This picture may be worth more than 1,000 words. A helpful list of Scott Brown’s votes to slow the Massachusetts economy and expand the deficit by maintaining discredited Bush-era Republican economic policies is here.
Please share widely!
Reality-based commentary on politics.
ChiliPepr says
Is they are already out of date… the current national debt is $15.5 Trillion. That chart never crosses the $15 Trillion mark.
The chart was created a year ago and is already wrong in the direction the debt would go, how can it be trusted going forward?
John Tehan says
The aggregate debt is not listed in that chart – it’s showing the projected annual deficits for the next 7 years, and it spells out the drivers of those deficits.
SomervilleTom says
Are you discussing a different chart from the graphic in the thread-starter? I ask because the above chart describes the deficit (not the debt), and its scale maxes at one point five trillion, not fifteen.
The temporary increase in the national deficit was needed to prevent the complete collapse of the entire financial system — caused directly by the failed dogma of the GOP that they now so fervently advocate. The decline in the deficit between 2011 and 2013 reflects the phaseout (hopefully!) of those measures.
The relatively flat sky-blue portion of the chart shows the decade-long Great Recession caused by that failed GOP dogma. Sitting above that is the rising red tide of deficits that Bush-era tax cuts (more of the dogma) add to the deficit. Layered on top of THAT is the poop-colored icing of the two prolonged — and unfunded — wars that George W. Bush got us into.
The above chart of the DEFICIT is therefore correct about the direction the DEBT will go — in order for the direction of the national DEBT to change, the deficit will have to be changed to a SURPLUS.
Like what Bill Clinton did (before Cheney/Bush screwed all of us).
danfromwaltham says
Regarding the great recession of Bush/Cheney, which Republican bill pushed these toxic mortgages which created the bubble and collapse. Are you really suggesting Democratic policies had nothing to do with it? Barney Frank is 100% pure? One large glass of kool aid please.
IMO, both parties are guilty
John Tehan says
Where’s the housing bubble in that chart Dan? Note how small the influence is on the deficit – then get your head out of your ass. Your act is very tiresome…
danfromwaltham says
Also, r the bush tax cuts just for the top wage earners, or everyone, because I know a received some checks for something like $600 one summer. U guys all get one?
John Tehan says
The chart is from the CBO, I’m sure you can find out all you need to know from their web site. I would assume it’s the Bush era tax cuts for everyone – ut what difference does that make? The tax cuts were irresponsible, and while you may have gotten $600, rest assured that the very rich got A LOT MORE. Had the Bush tax cuts not been implemented, we would not be in the budget hole we now find ourselves in, that’s a fact.
danfromwaltham says
The reason I asked is because Obama does not want to rescind the tax cuts Bush gave to the lower and middle classes, at least that is what he says. I guess you would increase the rates on everyone, which is a reasonable position to have but doubt it would get through congress.
John Tehan says
The Bush tax cuts are set to expire this year – absent any action in Congress, they will expire, so there’s no “getting it through Congress” as far as the rescinding those cuts is concerned. An extension of the cuts would have to get through Congress, but you would know that if you were even minimally informed on these issues. As I said above, go do some research and come back when your act isn’t quite so tiresome.
Mr. Lynne says
… options out there for deficit reduction is for Congress to do nothing. Bush tax cuts expire and the automatic cuts outlined in the debt ceiling deal would take effect.
Disastrous, but there it is.
ChiliPepr says
It was early Monday morning and I had not had my coffee!
I am usually a math geek and always look for bad math first…
Again, my apologies!
JHM says
Or maybe not. Perhaps it depends *which* thousand words. ‘Persiflage’ might do for a start . . . .
(( Happy days ))
Trickle up says
The Republican recession was not caused by deficits.
A better title might be Scott Brown’s Republican Red Ink.
A shame they exploded the deficit at the same time that they destroyed the world economy, but those two things are not the same.
SomervilleTom says
It’s true that they exploded the deficit by starting two unfunded wars and simultaneously pushing a massive deficit-busting and totally irresponsible tax cut. George W. Bush had to act decisively to destroy the budget surplus he inherited from Bill Clinton, and he did so. It’s also true that they destroyed the economy, separately from these insane policies. The hyper-partisanship of the GOP didn’t begin with Barack Obama — the GOP threw the national interest under the bus in their urgency to destroy any “Clinton legacy”.
Sadly, though, when the economy collapsed into the Great Recession, tax revenues collapsed with it. Thus, while these two are different, they are not independent.
whosmindingdemint says
even if he was right, Bush had 8 years (6 of which with a republican controled congress) to correct the supposed sins of the democrats.
BTW: Bush made 2 speeches in 2001 praising the efforts of Freddie and Fannie for providing more people with access to mortgages. His lust for Franklin was almost pornographic. Then, of course, he bragged about it in the SOTU speech.
Available on youtube so you don’t get blinded by all the wittle words.
danfromwaltham says
The Democratic policies started in the late 90’s to push home ownership, actually saved W’s butt in 04.
I thought W did make a feeble attempt to reform Freddie and Fannie back in 2003 but Dodd throated it. Again, plenty of blame to go around. Does the NY times suffice?
http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?pagewanted=all&src=pm
whosmindingdemint says
That Bush for 8 years allowed this thing to get completely out of control and knew it was in trouble as early as 2003?
danfromwaltham says
W knew there was a problem and tried to address it in 2003 but was blocked and Chris Dodd is a main reason. Do you deny the NY times article? You really blame W 100% for the real estate crash? Hey Kool Aid!!!!!!
SomervilleTom says
In 2003, the GOP controlled the House (229-204-1), the Senate (51-48-2) and held the Presidency. This Republican government did exactly what the GOP says would “help the economy” — deregulated Wall Street (and the banking industry) and slashed taxes, especially for the wealthy. Funny how you squirm to avoid facing the plain truth — the dogma was tried, and it failed miserably.
I don’t blame George W. Bush 100% for the real estate crash. He had plenty of help from Dick Cheney, the Republican majority in both the House and the Senate, and the Wall Street owners who bought and paid for his government.
Insanity is doing the same thing over and over again expecting the result to be different. The GOP is not only calling for the same “policies” that already failed so miserably, they are calling for MORE OF THEM.
Scott Brown has yet to show that he has the slightest clue about any of this, never mind a proposed direction that will do anything but crash the economy again.
danfromwaltham says
Obama can’t get things done due to the filibuster rules of the senate and the evis Scott Brown. Did the Dems not use this same tactic against Rep’s?????? Need to be consistent here folks.
petr says
But the severity of the crash, it’s overwhelming and far reaching scope and consequences, are almost certainly due to Bush era policies. In 2005 the five largest investment banks, BearStearns, Lehman Bros, Merril Lynch, Goldman Sachs and Citigroup (which I think at that time was actually Citicorp…) asked, and received, of the Bush appointed SEC permission to hold debts in excess of the legally mandated ratio of 12 to 1. Bear Stearns frightened Wall Street some three years later forcing their very very quick sale to JP Morgan when investigation of their position revealed debt ratios of greater than 40 to 1. Things settled down for a time, and the ‘smart money’ on Wall Street breathed easier thinking that nobody could ever again be that stupid. We only have estimates on Lehman Bros from after the bankruptcy placing their debt ratio at somewhere between 60 to 1 and 200 to 1. Apparently someone could, indeed, be that stupid.
Timothy Geitners much discussed, but publicly extremely vague, ‘stress tests’ from 2009 and 2010 were specifically designed to ferret out similar stupidity and figure out how to get the companies back to a sane ratio.
Without that one simple decision on the part of the Bush administrations SEC the problem, while still real and problematic, would not have been catastrophic.
Christopher says
Dan, it is in fact true that a GOP majority Senate got more done than a Dem majority Senate even with the rules being the same on paper. A key difference between the parties from my observation is that Dems believe in governing, respect elections, and don’t make it their mission in life to gum up the works just because they can, while the GOP has decided that their strategy is precisely to obstruct for its own sake, largely through the tactic of abusing the filibuster rule, good governance be damned.
danfromwaltham says
Didn’t the filibuster kill Anwr?
whosmindingdemint says
Too bad none of its true.
http://www.businessweek.com/investing/insights/blog/archives/2008/09/fannie_mae_and.html
danfromwaltham says
Fannie and Freddie are the victims? All I can say is Wow!
SomervilleTom says
It doesn’t sound like you’ve ever tried to get a mortgage — then or now.
As the Business Week piece is trying to explain, the collapse of the housing market was driven by the collapse of sub-prime mortgages. That was not Fannie Mae and Freddie Mac.
danfromwaltham says
From 2002 to 2006, as the U.S. subprime market grew 292% over previous years, Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion per year, which included $350 billion of Alt-A securities. Fannie Mae had stopped buying Alt-A products in the early 1990s because of the high risk of default. By 2008, the Fannie Mae and Freddie Mac owned, either directly or through mortgage pools they sponsored, $5.1 trillion in residential mortgages, about half the total U.S. mortgage market
However, in 2003 when George W. Bush called for an investigation and more controls on Fannie Mae and Freddie Mac, Congressman Barney Frank vocally objected, saying “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing” [144] Frank has dismissed the charge that he influenced the debate over increased oversight, as his party was in the minority in 2003. Frank says, “Yes, I was wrong in 2003, but I wasn’t in charge…Remember, I was in the minority from 1995 to 2006. They were in charge.”
johnk says
I’m not following your logic, do you think Fannie and Freddie being lied to by big banks about the mortgage backed securities is what? Not sure if you think your quote means they were lenders, they weren’t , they played a very small role in the housing bubble. Check the Federal Reserve list of subprime private lenders.
The Frank stuff is going into looney Limbaugh territory. Everyone has been through this many times already. Republicans had control of the House and all the Committees, Frank couldn’t stop a bill or get a bill for that matter on the House floor for a vote. So he’s responsible? What does the quote have to do with anything. Republicans had the votes and the committee, you can’t filibuster a committee. That’s f’n stupid.
danfromwaltham says
Found article, says Fannie and Freddie played a small role in the bubble, like 138 billion in losses. The prime suspects should not have been bailed out.
http://www.bloomberg.com/news/2011-08-04/fannie-freddie-role-in-the-financial-crisis-commentary-by-phil-angelides.html
SomervilleTom says
From your piece (emphasis mine):
The evil inefficient incompetent government agencies had 6.2% delinquent mortgages, compared to a whopping 28.3% for Wall Street.
And the there’s the money quote (emphasis mine):
The collapse was caused by Wall Street and by the GOP administration that they bought and paid for. Today’s GOP asks us to revert to precisely the same failed policies — apparently they claim the “medicine” wasn’t strong enough.
No sane voter who remembers and understands what caused the 2008 collapse would ever let these miscreants come close to the levers of power without strong evidence of a change of heart and mind.
petr says
The mortgage lenders got in trouble not because Freddie and Fannie were lending out subprime mortgages. Lending out subprime mortgages were what Fannie and Freddie were conceived to do: the raison d’etre of their corporate being.
The mortgage lenders figured out two things: 1) that Fannie and Freddie were making a great deal of money by careful management of sub-prime loans and B) that they could make even more money on careless management of sup-prime mortgages: they realized that they could write mortgages and turn around and sell them, thus removing the more or less ingrained protection of worrying about whether or no the loan would ever default. This is something that Fannie and Freddie never did: every loan that originated at either Freddie Mac or Fannie Mae stayed there.
Fannie and Freddie only ever provided a lure: someone said “there’s money in sub-prime, look at Freddie and Fannie!” and then they went for it, but without the strict guidelines and retention that Freddie and Fannie implement. It’s kinda like blaming the Yankees payroll for the fact that the Red Sox are in last place: Red Sox management think they have to do everything like the Yankees to beat the Yankees. But when it doesn’t work out, is it the Yankees fault? (they’re just above the Red Sox in last place, last I looked…) In the same way people are trying to say Freddie and Fannie are responsible for the unscrupulous manner in which others tried to implement the basic Freddie and Fannie business model.
lodger says
“Lending out subprime mortgages were what Fannie and Freddie were conceived to do”
That is absolutely incorrect.
Furthermore…”Before the subprime mortgage crisis, they owned or guaranteed $1.4 trillion, or 40%, of all U.S. mortgages. They only held $168 billion in subprime mortgages “
whosmindingdemint says
unless its the NYTimes of course (and it supports your misguided position.)
danfromwaltham says
I can tell you this, I don’t rely on one network or news organization as the gospel truth.
whosmindingdemint says
And you don’t understand what you have.
Let me help, From a source that you can go fish for:
Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don’t lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans.
It’s a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more.
Commentators say that’s what triggered the stock market meltdown and the freeze on credit. They’ve specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie’s and Freddie’s financial problems.
Federal housing data reveal that the charges aren’t true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.
Federal Reserve Board data show that:
• More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
• Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
• Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.
The “turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.
But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party’s standard bearer, President Bush, didn’t criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership.
Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.
Fannie and Freddie were left holding the bag for private sub-prime lenders.
danfromwaltham says
For FAnnie and Freddie to buy these Mortgage securities, dont the underwriters use Fannie and Freddie guidelines? Otherwise, they couldn’t be sold to the secondary mkt, right?
Mr. Lynne says
… to buy these Mortgage securities…” means that Fannie and Freddie behaved, remarkably, like everyone else in the entire market.
whosmindingdemint says
And I’m beginning to think you don’t want to.
The loans are a done deal, approved by the lender’s underwriters attesting to the paper being good. The whole idea was to get more people buying more homes, credit was cheap, there was plenty of money around, and lenders did a volume business (Countrywide for example).
That is where the problem began.
Between 2004 and 2006, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.
Now I know you really want to believe that the entire housing crisis was all the fault of Fannie/ Freddie oh, and Barney, but it ust is not the case. Listen carefully, the only people saying it is are the right wing “truthers.”
Done for the evening
danfromwaltham says
The investment banks should have been allowed to fail, this is a disgrace. It does appear Fannie and Freddie played just a minor role in the bubble, but not what I thought.
http://www.bloomberg.com/news/2011-08-04/fannie-freddie-role-in-the-financial-crisis-commentary-by-phil-angelides.html
SomervilleTom says
The problem is that the investment banks were so large, and so tightly interwoven with the rest of the banking system, that if they had been allowed to fail the entire banking system would probably have failed with them. This is why those who understand what actually happened are so adamant about the role of the prior administration — it isn’t “just politics”, it is that we very nearly lost the entire banking system.
I’m not sure what generation you are from. I grew up in a family with parents and grandparents who experienced the bank failures of the Great Depression first-hand. We would have had MILLIONS of people who had been relatively prosperous who, through no fault of their own, suddenly have NO MONEY AT ALL. Too many voters today literally can’t conceive of just how devastating such a collapse is — it took America by surprise when it happened in 1929.
The people who caused the collapse should be criminals. They should be prosecuted, they should be incarcerated, they should be themselves penniless. One of my disappointments in President Obama and the Democrats is that they did not do nearly enough to investigate, prosecute, and punish the perpetrators of this crime — just as they did not do nearly enough to investigate, prosecute, and punish the crimes against humanity perpetrated by the prior administration.
danfromwaltham says
To think the execs of these firms who made millions while driving their companies into the taxpayers arms makes me sick. Their assets should be confiscated, just like Bernie Madoff’s. They are one in the same.
SomervilleTom says
This is why I find Scott Brown’s claims of “independence” so disingenuous. He, and the GOP, promote precisely the same policies that led to this disaster, while lying about the causes of the one we’re attempting to recover from — and doing everything in their power to block President Obama’s efforts to build and continue that recovery.
petr says
… the ‘investment banks’ don’t exist as investment banks anymore. In fact, as ‘investment banks’ they most certainly failed. That’s the essence of the bailout: during the height of the crisis the banks either went under or were consumed (BearStearns, Lehman Bros. MerrilLynch, etc..) or applied for, and received immediate, relief in the form of a commercial banking license (JP Morgan, Goldman Sachs, Citigroup). This allowed them FDIC, TARP and other protections and required of them a greater diligence. They continued as commercial banks by giving up their status as ‘investment banks.’ They, in fact, did fail.
This is the problem with the recent JP Morgan ‘hiccup’ of 2billion (possibly more) losses: they continue to act as though they are an investment bank, even though they now have commercial banking licenses which comes with a great deal of protections and different responsibilities. Paul Volcker told Bill Moyers recently that all they have to do is to return the commercial license and they can go back to their investment banking ways any time they want. The fact that Jamie Dimon doesn’t consider this option says alot…