amazing post friend.....question:Do you bush apoligists at least sugar that kool-aid before drinking?

-the slithering left

"The economy is strong and unlikely to slow soon."

I think you meant to say, "Asian central banks are still willing to loan us money." That IS the economy now, thanks to Bush.

Mr R, why don't you make a note to check back this time in 2006. We will see who's been drinking kool-aid.

Dave, Asians know a good investment when they see one.

For any serious person who's interested, I think the item that's missing from discussions of global money flows is that we have, as TPM Barnett has pointed out, an export that's not on the books. We export security to the whole world. They "loan" us money in exchange for not having to provide their own Carrier Strike Groups and nuclear shield, a far more expensive option

Will we be crushed under a mountain of debt? No, because our economy is growing faster than the debt load. Also, as those other economies grow, the logic of Globalization and per-capita-income forces them to become more like us. The question will increasingly become no more worrisome that the question of whether California is loaning too much money to Oregon, or vice versa.

John, you must be using the same "fuzzy math" that Bush uses. How can you possibly say that the deficit has grown slower than the economy? Are you forgetting the minus sign at the beginning? We had a surplus, now the deficit is sky high and growing by the minute.

What alternate universe are you living on? Maybe the stock market is OK but the rest of the economy SUCKS. Bankruptcies due to health care costs, repossessions of homes at astronomical levels, 40% of national guard soldiers are unemployed 20% are underemployed. The Iraq vets can't find jobs. Gas prices are raising the prices of everything.
You must sit by your computer and suck your thumb cause you aren't living in the same place I am.

Actually Ronnie he said our economy is growing faster than our debt load. Federal debt outstanding as a percentage of GDP was 36.80% at the end of 2000. It was 34.01% as of the end of the second quarter of 2005, and is clearly trending downward.

The one that really worries me is #2 - how can we retreat??? I thought the whole reason why we have wasted so much time in Iraq was because we COULD NOT RETREAT??? Now we will be turning the whole country over to the terrorists and and torturers, and telling the difference will be pretty hard...Personally, I hate the war, opposed going in, but bow that we are there, we need a WINNING strategy, not just 'stay the course' and CERTAINLY NOT declaring victory and running away, which seems to be what is in the cards right now. The best part about it is that after we leave, and it is disaster, the Republicans will say "Well, isn't this what you wanted in the first place?" Pre-emptively, I say, "No! I didn't want the whole damn war in the first place, but when it happened, I wanted better planning beforehand (which everyone knows didn't happen) and better action and thought in winning! The American people support their troops. The fact that it has taken so long to even suggest pulling out is a sign of that."

Joe, we are WINNING. It's not in the papers, but you can follow the actual campaigns at Bill Roggio's blog Fourth Rail.

There are more and more Iraqi units able to fight reliably. No more stories of police running away whan attacked--now they stay and fight, and usually win. Now when we clear a city, it's not just temporary, because Iraqi units remain in force to hold our gains.

We are no longer leaving western al Anbar alone--now we are fighting right up to the Syrian border.

And when we leave it will not be RETREATING. We will be turning things over to the Iraqi government, as promised. And as we have already done to a large extant. Remember, most of Iraq is quite peaceful now. (Of course if we were forced to retreat westwards, through Damascus, I wouldn't object.)

Also, I predict that Iraq will be a strong anti-terror ALLY in the future, because they will have come to hate terrorists more bitterly than anybody. A good side-effect of the "insurgency."

Mike, one quarter of 2.79% less doesn't make a trend. I was looking more at the entire bush presidency than the last quarter. This must be the "one step forward" in bush's "one step forward, two steps back" plan. I guess you have to take what small victories you can.

And how soon will it be before the ChiComs decide to pull the plug on financing the American economy? Maybe not too long after today's speech by the Prez. Not only does he sell out American independence but he goes out of his way to aggravate the people holding the purse strings. Republican incompetence is coming home to roost, get ready.

John,

What is it about your site that attracts all of these economic populists?

For the record (and believe me I have tons of data to support this - and not selectively chosen either) this whole mantra of the US economy being at the mercy of overseas bondholders is a myth, or, at the very least greatly overstated.

Of course the absoulute level of government debt has grown and any Republican worth his salt is not happy about that. But the economy grows as well, and it has been growing faster. Federal debt outstanding as a percentage of GDP peaked in the early to mid 90's at just shy of 50% - now its roughly 35%. In other words, John's original comment was spot on, and we are less "dependent" on "people being willing to own our debt" than we were ten years ago.

Yo Mike,

I don't know where you're getting your numbers. But they obviously conflict with my source: http://zfacts.com/p/318.html. Now, this is a liberal site, but I do believe his stat is from the OMB.

It's a nice graph that obviously shows our debt compared to our GDP has increased during another Republican administration.

I think your definition of GDP is different from what conventional economist use. I'm interested in why your numbers are different.

It's my belief, this financial fantasy land we're living in is going to end in a disaster. Like the Depression, it'll take a decade to recover.

I was looking more at the entire bush presidency than the last quarter...

The scheme of the whole presidency was to fight the Clinton Recession with tax cuts, which would cause deficits, but over the long run would more than counterbalance the resultant debt with economic growth. So far, it seems to be working.

We saw the same pattern in Reagan's time, where tax cuts led to deficits (much bigger than Bush's as a % of GDP, by the way). People howled that the 1.3 trillion in debt added by Reagan would enslave our grandchildren. They never bothered to mention that the economy grew by 17 trillion in the same period, and that it kept growing, so that now that 1.3 trillion is a small matter compared to the size of our economy.

And the Chi-coms can't pull the plug, they own part of us--they would be pulling the plug on the very economy that makes the debt have any value. We could for instance devalue our currency and wipe out a lot of that debt, and there would be nothing they could do about it. Or we could freeze repayment the bonds they hold.

And right now they are hoping to attract Western investment and capital. And their economy is based on trade, and we are their biggest market. Pulling plugs is not an option. We are tied to each other by Globalization---we are interdependent.

John,
Thank you for replying to my message - I really hope that you are right. I really hope that Bush is right, but I just don't see it. Maybe I am blind, but when there are daily attacks on US troops, and our officials can't travel to Iraq, even to the green zone without arriving unannounced, it seems to me that there are problems. Again, nothing would make me happier than victory in Iraq. Perhaps I didn't say this before, but even though I didn't support the war going in, we are there now, and we need to stay until we win, which means when the Iraqis can fight without us. If we are having all these problems while we have the best military in the world, how can they hope to win without resorting to exactly the same brutality that Saddam Hussein conducted? Again, I really hope they can, but the signs that I see don't support it.

TK -

My numbers come from Bloomberg. There are two numbers involved: "US Debt Outstanding - Federal Government" and GDP, the same number that gets released each quarter to guage economic growth.

In looking at the two graphs it looks like the discrepancy isn't with the GDP number, but with the debt number.

Your site quotes "Gross National Debt" and has a ticker running that shows a number around $8 trillion. I didn't investigate far enough to discover what that is exactly My number, which tries to focus on Federal Debt, is about $4.5 trillion.

All in all though I don't see much of a discrepancy regarding the overall point. (I am trying to keep this as neutral as possible and couldn't care less about who was in office.)

Even your graph shows (ignoring the projections which are notoriously wrong regardless of who is in office) that debt as a percentage of the economy is not "out of control" and is lower than it was ten years ago.

I stand by my point - there is nothing in the numbers to suggest we are any more at the mercy of bond holders than we were in the past.

Joe, it frequently happens in history that wars are most ferocious just before they end. The losing side starts to throw all its strength in without regard to long-term survival.

And those daily attacks are mostly in the form of IED's or snipers or single morter rounds. In other words, mostly in ways that don't involve facing us in combat. In a way, it is because our military is so good that it is hard to finish here. If the "insurgents" formed themselves into a brigade and attacked us openly, they would be exterminated in half an hour. Also, we are on the offensive, we are looking for trouble in places like Husaybah and Ubaydi. that means more casualties, but it is still good news.

The metrics to watch are the effectiveness of the Iraqi Defence Forces, and the growth in popular support for the Iraqi government. As long as those two continue to improve, there is no way we can lose.

By gosh yes. The war is going splendidly and the Dems are trying to push the boys back home so they can get credit for it. Yes and the tooth fairy is going to leave me $25,000...

But keep up the good fight of ideology over reality, you have nothing to gain but self respect.

One more reason for Republicans to feel no malaise, is the way the other side argues with insults instead of facts...A sign of weakness, rather like the IED's are.

Uhhhh, Brian ......weren't you listening when Nancy said Just say No to drugs?

Some of these "commenters" remind me of an old joke.

Mah Great-Grand-daddy was a Democrat.
And mah Grand-daddy was a Democrat.
And mah Daddy was a Democrat.
And I'm a Republican.

Why the change?

I learned to read.

Your post must have been found by the trolls who read Michelle Malkin's blog.

Yeah, trackback. She's got 'em, but they can't comment there.

Some people have all the luck. I write any number of outrageous things, and never ever get to be a lightining-rod for hate. Michelle just attracts it, like lint onto a blue suit...

Even Zoomie got bored with me...

Great post, John. I share your optimism, especially about Iraq. I'm convinced that the Dems are just whacko. They are positioning themselves badly: they are betting on a bad end in Iraq, with a civil war or continued terrorist attacks. Bad news for the American military is good news for them at a time when the country doesn't trust them in defense matters. They are wasting energy fighting Bush when he will gone in a little over three years and leaves no political heir or (as Clinton did) a political movement in his own party. The hopefull bleat that "there's bad things gonna happen down the road" meme that some commenters to this post seem stuck on is not likely to attract many voters.

Well it sure was a lot of fun. You should trackback to her more often.

Whew. So much shrillness and hostility in one set of comments. Their anger grabs hold of logic and twists it around and around until it doesn't hold any water at all. Congratulations on attracting so many readers but I wish the discussion was more substantive and less BDS. (By the way, after being scared at the sight of "anne" who wrote nonsense above, I'll include my official first initial from now on!)

Well Anne, you are definitely not like that other Anne...

John,

Your least inflammatory post, ever.

The US economy continues to perk. Democrats have been reduced to recycled Reagan-era quibbles. There's a reason their party doesn't want to talk about the Economy Stupid any more.

The war in Iraq has never been a quagmire. Now, for the first time, it is possible to seize jihadi strongholds and garrison them with rebuilt Iraqi forces, from Baghdad all the way out to the Syrian border. Fourth Rail is indispensible for anyone seeking a strategic overview.

It's significant that instead of driving the jihadis westward into Syria, coalition forces have sealed the border and worked eastward town by town, killing and capturing the enemy. Whether or not this is the war's final phase, tremendous damage has been inflicted.

#8 Fascists, you guys are not actual conservatives, have no conscience, which is what one needs to feel saddend by the mess that you have brought this country to. The people of this country have been fooled long enough and are starting to wake up.
Check out the poll numbers.

Sigh...wouldn't it be entertaining to trasport people like Paul back in time to, say, Germany in 1939 so they could get a taste of what fascism really was? Maybe then they wouldn't be so quick to toss the word around.

Hell, transport him back to the US during WW II...he could see what a US president in a time of war does, and would be astonished by the hyper-restrained Bush administration. Imagine ration cards today...wow...fascism now? Dude is utterly insane.

I suppose we could just suggest they read and understand a good history textbook, but I think there is a better chance of us inventing a time machine.

RE: "One more reason for Republicans to feel no malaise, is the way the other side argues with insults instead of facts...A sign of weakness, rather like the IED's are."

Right-O! Just ask Big Dick "FU" Cheney!!

The economy has huge debts of 3 types: public, private and foreign.

50% of growh in the last few years has been related to real estate, this is slowing and will likely recede. Jobs and trillions of dollars will be lost. The credit machine which has been feeding the economy will probably collapse.

In Iraq the corruption scandals that are starting to hit us are going to dwarf food for oil. Do you realize how many tens of billions of Iraqi dollars went to US companies and how much was unaccounted for.

The Iraqi governments in the south are more closely allied with Iran than us. The Shiite don't particularly like us and while we remain useful for several reasons they do tolerate us, do not assume they are our friends anymore than Stalin was in WWII.

Experts predict the Sunni insurgency will simmer for years. So we will have a Iranian influenced south and trouble in other regions. Many of the nations we have relatively close ties such as saudi Arabia percieve us as oppressing Sunni.

Crime and corruption are rampant in Iraq. A number of neighbrohoods have been emptied of one ethnic group or another, an indicator of potential civil war of the ethnic cleansing type. While electric producton capacity is up slightly, actual production is often at prewar levels. The corruption has meant that in many places fod rations are pilfered. Infant mortality has not declined, we painted 500 clinics, but they often lack medicines.

The World Bank has reported that after a rapid takeoff (40%) growth has flattened in an economy that had lots more room to go. Oil production is down.

These are not insoluable problems, but they are serious. The tendency of the admnistration and especially it's supporters has been to attack or ignore anyone who warned of them thus preventing reforms and solutions.

Your "enemy" at this point in the game is not simply liberals, but two thirds of the American people. Many supported the war and voted for the president. The inability to percieve unpleasant aspects of reality demonstrated in Iraq now manifests itself here almost insanely. Instead of answering people like General Scowcroft or many others with legitimate and often conservative worries, the "strategy" is to pretend all criticism comes from leftists.

Good luck. Your time is coming to an end. Enjoy your delusions as they deepen.

Wow, that last one was primo, almost Zoomie-esque in its monomaniacal obsession with imaginary scenarios that will Crush the Enemy (which is George Bush and the Republicans, or course). All tha's missing is the ending all caps cry: "WORST PRESIDENT EVER!!!"

Urgh. That should be "of course" and "all that's missing." I need to go to bed.

Andrea,

Even half-asleep, you nailed it.

Jane dumped a garbage bag of irrelevancies, dubious assertions, foolish analyses, and unlikely predictions. Too much to pick through, and I just washed my hands.

There are always problems in this world. There are challenges in any enterprise worth doing.

Maloney is the same twat that claimed Canada was a repressive country...

"General" Scowcroft? He'll sure tell us conservative chickenhawks!

"Enjoy my delusions as they deepen?" Oh, I do, I do,,,

Actually, that the slitherers should embrace Brent Scowcroft is just SO fitting. The man who didn't want the Soviet Union to break up, who refused to meet Solzhenitsyn, who didn't want Saddam removed from power....can we imagine Clinton/Scowcroft 2008?