The most told lie in American Politics rears its ugly head again.

"the end of the Clinton administration even as the federal government was running a surplus."

The National Debt has gone up every year since 1957. There has never been a surplus since then .

That morons refer to anecdotes told by professional liars rather than look at raw data is amazing, but they do.

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

maybe lutz got confused because for a little while he WAS spending t-bills.

Oh.

I thought the Rocky Mountains symbolized Peak Oil and the tunnel symbolized the widespread belief that magic "plug & play" alternative energy sources will be waiting for us when we get there.

Seems like a more critical 'We're all going to die' thing.

"Living in the United States is like being over Iowa on a cross country plane trip heading west when the captain gets on the intercom and explains that there's a tunnel through the Rocky Mountains and they're going to use it to fly through to the other side."

Is it different on a plane heading east?

Bill Jones:

The most told lie in American Politics rears its ugly head again. The National Debt has gone up every year since 1957. There has never been a surplus since then.

I see you have strong feelings about this. Anyway, if you're counting debt held by the government, you're right -- there wasn't a surplus. But if you're not, there was. Probably it makes more sense to count the debt held by the government, but people have legitimate reasons to look at it both ways.

Cloud:

Seems like a more critical 'We're all going to die' thing.

It is, but his inability to perceive something even simpler and less ideologically unpleasant for him than peak oil also says something about how we're all going to die.

John:

Is it different on a plane heading east?

Well, sure. If you're on a plane going east and you're over Iowa the pilot wouldn't announce that you're going to fly through a tunnel through the Rockies. That would be CRAZY.

Heading from West to East covers a much shorter distance before approaching the Rockies, and my guess is the direction is representative of the time the passengers have spent on the plane assuming the journey would end as safely as it had begun.

Lutz should know better, being an adult, or he should realize some folks know better, WE're NOT ALL rubes. Still, I blame The American Educational System. Too many ignorant people with a "higher education".

I'm gettin' me one of those.

JSchwarz comment wasn't there when I started mine, I promise I'm not one of those annoying over-thinking types. Oh, wait...

Read Lutz' comments in the articles beyond the point about IOU's and about how competitive labor already is.

He's talking about re-establishing the nation as a manufacturer instead of short-term profit mongering financial manipulation crazies.

It seems to me that the most important point is not these actually sane, positive sounding comments, but that he was saying that nonsense about Medicare to Republicans.

Of course, someone could remind him that Medicare and such programs keep GM from having to have retirement medical insurance, or their workers from being afraid they'll need it.

In order to return to the brief two-year trend of paying down the national debt, I'm sure Mr. Jones will join me in calling for a return to the 91% tax rate for income above $400,000.00 that existed in 1957. ($3.2 million today per inflationdata.com)

Of course, someone could remind him that Medicare and such programs keep GM from having to have retirement medical insurance, or their workers from being afraid they'll need it.

The same argument could be made for universal health care, but never is. Why not? It would be a huge boon to businesses, it would drastically reduce their expenses, and it would make American companies much more competitive with foreign ones. I've never understood this.

"But people like Bob Lutz somehow have gotten it into their head that budget deficits are bad and trade deficits are bad and"

NO, I think not. People like Lutz and most members of the upper class have no objection to budget deficits or trade deficits. They object to the freeloading poor, the grifters that populate the country, the riffraff, the rabble, the mob, in short the same worthless populace that elites have always loathed and that Madison and Hamilton so ably protected us from with their handiwork, the Constitution, an archaic, reactionary document designed to protect slavery, money, and power from uppity mobs that might decide to start hanging people instead of getting back to work making $19 DVD players. There is no real objection among the upper class to big government either, except to the extent it is equated with helping the freeloading portions of the public--i.e., everyone who doesn't agree with the upper class on everything involving money.
When cheap money benefits the rich, it is good. When it benefits others, it is bad. When trade deficits benefit the rich, they are good. Otherwise, they are bad. Budget deficits, ditto.

"the end of the Clinton administration even as the federal government was running a surplus."

"The National Debt has gone up every year since 1957. There has never been a surplus since then."

Are you perhaps confusing the national debt with the budget deficit? Those are not the same thing. Compare your stats above with these:

http://www.gpoaccess.gov/usbudget/fy11/pdf/hist.pdf

Page 26 of that pdf shows the total US budget ran a surplus in FY 1998-2001. If you count only on-budget expenditures, the surpluses exist for FY 1999 and FY 2000. Yes, the debt increased those years, but that only means the surplus wasn't used to pay down the debt. My household budget is much the same. I currently run a budget surplus. My weekly paycheck is more than I need to pay my current bills. If I only pay the minimum balances on my credit cards, though, my debt will continue to increase, because I'm not making a dent in principal. Do you see the distinction?

Of course we could use that tunnel under the rockies to hide all our nuclear waste.

Now, if they could use a shrink ray on the airplane, they could fly east through the Weehawken-Alameda burrito tunnel . That could save time and av fuel, assuming there are gaps in burrito firing schedule. Really depends on NYC area burrito consumption metrics. And a shrink ray.

Now, if they could use a shrink ray on the airplane, they could fly east through the Weehawken-Alameda burrito tunnel . That could save time and av fuel, assuming there are gaps in burrito firing schedule. Really depends on NYC area burrito consumption metrics. And a shrink ray.

It was less funny once...

Bill Jones may be right insofar as the federal govt would have us believe a lie. But as Erin points out, Mr. Jones is also conflating "national debt" with "budget deficit".

And as Perot may have parroted, the surplus run during that time was not enough to pay down enough of the interest on the debt to keep it from rising.

But to the question of how to decrease the trade deficit: Can the US really create more worthless crap than it already does, which is actually worth a crap to anyone else? Seems we are talking about a race to the bottom of discerning consumerism in which, at the end of the day, there are only a bunch of pathetic losers.

National debt does not equal federal budget deficit, they are two separate, if related concepts. The post discusses the latter, not the former. That the two concepts are being confused in the very first and subsequent comments increases my fear of a Rock Mountain impact, since the passengers are cheering on the captain.

I don't see where Lutz's statement (as quoted) confuses them. The fact is that we do have a higher standard of living by running up the national debt. Importing $19 DVD players from China means that we are losing jobs to China, which means those American jobs no longer exist which means there are less jobs to pay off our national debt.

Lutz's whole point is that we need to bring manufacturing jobs back home. That is bad?

Mr Schwarz seems to have misunderstood the point that Mr Lutz was trying to make by taking one quote out of context and then combining two elements in the wrong way. If you follow the link to the original Rueters story and also look at what Lutz has said in the past you'll realize what Lutz was actually saying.

By insisting on importing cheap consumer goods from overseas, Americans have destroyed their own manufacturing base. The idea of an economy built on nothing but services is unsustainable as a means to high income for average working people. We can't have it both ways. If we want high incomes we must bring manufacturing back onshore and actually make stuff.

The American economy grew as big as it did and middle class ballooned because we got very good and making stuff (with higher productivity than anyone else) and selling it both to ourselves and the rest of the world. If we don't manufacture our lifestyle will be degraded and we'll have to give up everything.

I don't agree with everything Mr Lutz says (such as his take on climate change) but he does understand that the key to economic success is to make high quality products and sell them profitably enough so that people can earn enough to buy those products.

A strange creature The Ecconomist
In the land of supply and demand
He sees neither the salesman
Nor the guy with cash in hand
Only the staight sharp line of a Lafer Curve
Horizontal, neither up nor down
And when their convoluted models fail
(As they must)
Only market forces can be found.

If you want to hear the craziest reason not to lower the dollar's value then listen to this interview with Dean Baker:

http://will.illinois.edu/mediamatters/show/may-22nd-2011/

Apparently the decision-makers need a strong dollar so they can buy more during their European vacations. By God nothing is going to prevent this.

"The scary reality is that Lutz almost certainly believes this, and doesn't understand the difference between the U.S. trade deficit and the U.S. federal budget deficit. That would be a drag but wouldn't matter too much if he were a normal person, but it's dangerous considering that he's at the pinnacle of American power."

Well, he's not. He's in the zone where he could attend some social events with those at the pinnacle. I realized this during the bail-outs - Wall St got 10x or 100x the money as the auto industry, with infinitely fewer strings, while being the guys who caused this.