Fed again raises rates, showing economy still strong...

another raise.. the 11th in 15 months and where does all that intrest go to? more tax money to give to the poor.

How many posts before he starts with the deficit?

The Fed increased interest rates because of the fear of inflation. When the long rates begin to go up as they will, housing and auto sales will be negatively impacted. The higher interest rates coupled with the increase in the National debt will drive up interest in the Budget . Interest on the debt is the second largest item in the Federal budget and will become the largest expendature about the time Bush leaves office. For those of you conservatives worried about Federal spending, just wait until you see what the added interest will do to Federal spending!

One (in answer to Island Dog's hypothetical )

And btw, to follow up MM's point a bit, where does the interest go? Something I got into an argument with some ultra-lib's about before -- that interest money is what many Senior citizens live on and depend on. They buy bonds and t-bill's and other fixed income investment vehicles that are keyed to the prime rates. When prime rates are low, they make almost no money, and wind up eating up their own principal, rather than living on interest.

I'm no big fan of a high prime rate, but the rates we had in the last several years were very much "artificially low", held down because the Fed had caused the last recession with their damned fear of inflation. Once they started the recession with their rate hikes back at the end of the 90's and coming into 2000, they had no choice but to take drastic measures to help spur the economy on after they put it into negative growth territory.

The Fed increased interest rates because of the fear of inflation. When the long rates begin to go up as they will, housing and auto sales will be negatively impacted. The higher interest rates coupled with the increase in the National debt will drive up interest in the Budget . Interest on the debt is the second largest item in the Federal budget and will become the largest expendature about the time Bush leaves office. For those of you conservatives worried about Federal spending, just wait until you see what the added interest will do to Federal spending!

Dry up and blow away, ya "clueless old fool"! Nobody really wants to hear it anymore!

An economy that can absorb $60+/barrel oil prices AND a major natural disaster is only weak to the intellectually weak. The Colon farts out his ignorance by pointing out that the Federal Reserve raised the prime lending rate to head off inflation. I remind the mindless that the interest rate was lowered to next to nothing in reaction to a recession, the fact the Fed feels comfortable continuing to normalize the interest rate (even in the face of 2 events that would have destroyed a weak economy) is a GOOD thing. But then again, when you are a pathetic simpleton, the only way anything can be "good" is if it is bad for the U.S.

Colon Gene, you are a joke and your so-called "opinions" are the punchline!

The factor that kept us from going into a deep recession in 2001 was the Fed lowering interest rates not the Bush economic policy. The added money from low mortgages and car loans are more responsible for helping the economy than anything Bush did.

As to where the interest goes 40% of the interest is paid to foreign investors and is not spent in the U.S. The interest will jump to about $500 Billion per year about the time Bush leaves office ( Up from $335 Billion last year). It was Greenspan and O'Neil that told Bush in 2001 NOT TO ALLOW THE BUDGET TO RETURN TO A DEFICIT! Look where we are! You can not cut taxes, increase spending without creating a deficit. GREAT WORK GEORGE Let our kids pay the bill!

Yup, he's back on the deficit issue again.... didn't take long at all. That artificial intelligence seems to zone in on some key words. Too bad it's so clueless on real impact to the economy....

Colon Gene, have you ever, in your life, said anything that wasn't total idiocy?

Colon Gene, have you ever, in your life, said anything that wasn't total idiocy

Better question would be...have you "ever" in your life had a coherent thought?

The factor that kept us from going into a deep recession in 2001 was the Fed lowering interest rates not the Bush economic policy.

Wrong again col.

WASHINGTON - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) said Wednesday that President Bush (news - web sites)'s three rounds of tax cuts prevented a severe recession and helped spark the current economic recovery.

The Fed Chairman and Sec of Treas in 2001 told Bush to tie the tax cuts to the available surplus and if the surplus did not materalize, the tax cuts would should be ended. Bush was told by BOTH men NO TO RETURN TO ANNUAL BUDGET DEFICITS.

Go back to 2001 and read for yourself the advise of the two most knowledgeable people in our government about the fiscal management of our country!

Look at what Greenspan has to say about deficits in 2005:


Greenspan Says Federal Budget Deficits
Are “Unsustainable”
By Edmund L. Andrews
New York Times
March 3, 2005

Alan Greenspan, chairman of the Federal Reserve, warned on Wednesday that the federal budget deficits were "unsustainable," and he urged Congress to scrutinize both spending and taxes to solve the problem. Mr. Greenspan also warned that the deficits could be driven sharply higher by costs connected to the aging of the baby boom generation, particularly entitlement programs like Social Security and Medicare. While reiterating his support for President Bush's plan to offer private accounts as part of overhauling Social Security, Mr. Greenspan urged lawmakers to tackle the program's problems now, rather than later.

The assessment was Mr. Greenspan's gloomiest to date about the government's budget straits. Unless Congress takes major action to reduce the deficits, preferably, he said, by deep cuts in spending, annual budgetary shortfalls will continue and closing those gaps will become even more difficult.

Though Mr. Greenspan has made similar pleas in the past, he spoke more urgently on Wednesday and disagreed more adamantly with Republican lawmakers and Mr. Bush, who have steadfastly refused to put restrictions on new tax cuts. "Addressing the government's own imbalances will require scrutiny of both spending and taxes," Mr. Greenspan told members of the House Budget Committee. "However, tax increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base."

The Fed chairman emphasized that his own preference was to reduce deficits by cutting spending rather than raising taxes. But he said the "overriding principle" was to reduce the deficit, making compromise essential. "It's the principle that I think is involved here, namely that you cannot continuously introduce legislation which tends to expand the budget deficit," Mr. Greenspan said.

The Fed chairman's tone, as he addressed the House Budget Committee on Wednesday, was noticeably more urgent than it was last year or even in Congressional hearings just a few weeks ago. "When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you, and you add interest costs to that ever-rising debt, at ever-higher interest rates, the system becomes fiscally destabilizing," he told lawmakers. "Unless we do something to ameliorate it in a very significant manner," he added, "we will be in a state of stagnation."

Thanks for avoiding what I posted col. It proved you wrong so you go back to the usual deficit bs.

Colon Gene, so, if the economy is on the ropes, how is it that it is absorbing two major hits?

COL, know that these jingos represent only 35% of those diehards who still support the dubya regime. Not worth arguing, really, and certainly not about economics. They still think that gravity is a theory, and therefore, down is up is down when it comes to trickledown, or Reaganomics or Voodoo Economics.

35% and still sinking...............

COL, know that these jingos represent only 35% of those diehards who still support the dubya regime. Not worth arguing, really, and certainly not about economics. They still think that gravity is a theory, and therefore, down is up is down when it comes to trickledown, or Reaganomics or Voodoo Economics.

35% of 1000 people dabe. Remember, you guys lost twice.

COL, know that these jingos represent only 35% of those diehards who still support the dubya regime. Not worth arguing, really, and certainly not about economics. They still think that gravity is a theory, and therefore, down is up is down when it comes to trickledown, or Reaganomics or Voodoo Economics. 35% and still sinking...............

Only in YOUR wildest wet dreams baby!

Dabe, you don't do yourself any favors by aligning yourself with the Colon. You often actually try to think things through, that complete moron merely hops on the Bash Bush Bus and vomits out whatever fecal matter happens to sprew from his festering gob.

He is to mindless ignorance as Thomas Robb is to bigotry.

If the election were held today, guess who would loose? Answer, GWB! Some of the Republicans were a bit confused. Looks like more are not aware of their error. Read how the GOP in Katrina's Cost May Test GOP Harmony
Some Want Bush To Give Details on How U.S. Will Pay

By Shailagh Murray and Jim VandeHei
Washington Post Staff Writers
Wednesday, September 21, 2005; A01

Congressional Republicans from across the ideological spectrum yesterday rejected the White House's open-wallet approach to rebuilding the Gulf Coast, a sign that the lockstep GOP discipline that George W. Bush has enjoyed for most of his presidency is eroding on Capitol Hill.

Trying to allay mounting concerns, White House budget director Joshua B. Bolten met with Republican senators for an hour after their regular Tuesday lunch. Senators emerged to say they were annoyed by the lack of concrete ideas for paying the Hurricane Katrina bill.

"Very entertaining," Sen. John McCain (R-Ariz.) said sarcastically as he left the session. "I haven't heard any specifics from the administration."

"At least give us some idea" of how to cover the cost, said Sen. Conrad Burns (R-Mont.), who is facing reelection in 2006. "We owe that to the American taxpayer."

The pushback on Katrina aid, which the White House is also confronting among House Republicans, represents the loudest and most widespread dissent Bush has faced from his own party since it took full control of Congress in 2002. As polls show the president's approval numbers falling, there is growing concern among lawmakers that GOP margins in Congress could shrink next year, and even rank-and-file Republicans are complaining that Bush is shirking the difficult budget decisions that must accompany the rebuilding bonanza.

Rep. Tom Feeney (R-Fla.) said he and other fiscal conservatives are feeling "genuine concern [which] could easily turn into frustration and anger."

Congressional Republicans are not arguing with Bush's pledge that the federal government will lead the Louisiana and Mississippi recovery. But they are insisting that the massive cost -- as much as $200 billion -- be paid for. Conservatives are calling for spending cuts to existing programs, a few GOP moderates are entertaining the possibility of a tax increase, and many in the middle want to freeze Bush tax cuts that have yet to take effect.

The resistance suggests that Bush's second term could turn out far rockier and more contentious than his first. One indicator many Republicans are watching to gauge whether Bush is becoming a liability for the party is in Pennsylvania, where Rick Santorum, the No. 3 Republican in the Senate, is trailing state treasurer Bob Casey Jr. by double digits.

"My caucus would do anything for Senator Santorum," Sen. Lincoln D. Chafee (R-R.I.) said of his colleague. Chafee, who himself faces a tough reelection battle next year, predicted Republicans will increasingly be faced with the choice of propping up Bush or protecting their own. "I think they're going to collide," Chafee said of the two options.

Asked whether Bush's problems were a factor in his slump, Santorum responded, "That may be."

The White House is aware of the growing political problem and has moved on several fronts to pacify Republicans -- with decidedly uneven results. Treasury Secretary John W. Snow, in a speech yesterday, said the White House will be forced to put several plans on the "back burner," including changes to the estate tax and permanently extending first-term tax cuts. "It's taken over the national agenda, and I think it will for a while," he said.

This prompted protests from one of the White House's closest allies, House Majority Leader Tom DeLay (R-Tex.), who said waiting on taxes was unacceptable. But White House officials said Snow was accurately reflecting Bush's intentions.

Amid this friction, top White House officials told Republicans the relief and recovery package could come in much lower than widely quoted projections of $200 billion. Some House GOP leaders also are urging their colleagues to cool off, reminding them that the true cost of the relief effort is not yet known.

"There are tough choices that are going to have to be made," said White House spokesman Scott McClellan. "We're going to have to cut unnecessary spending elsewhere in the budget to offset some of the cost with Katrina."

House conservatives are particularly riled. Unhappy about spending growth during Bush's first term, they thought they had slowed the pace when Congress passed a relatively austere fiscal 2006 budget this spring.

A group of these conservatives, including Feeney, plans today to present to the White House a proposal to cover the cost of the entire Katrina relief and reconstruction package. Dubbed "Operation Offset," it will include repealing many of the pork-barrel projects stuffed into the $286 billion highway bill that Bush signed into law a few weeks before Katrina struck.

McCain called on Bush to undo the Medicare prescription drug law, while a number of lawmakers said the costly benefit should at least be postponed from its January starting date. Republicans are pressing ahead with the Medicare changes, even as the White House spreads the word it is opposed to such a move.

In one of the most unexpected proposals to cover the reconstruction costs, Rep. Vernon Ehlers (R-Mich.) raised the possibility of raising taxes. Other Republicans say that while a tax increase is unlikely, Bush tax cuts that are scheduled to take effect in coming years may be in serious jeopardy.

Sen. George V. Voinovich (R-Ohio) said he will even comb through the Pentagon budget for cost savings. "Many of us think that we need to step back and look at what we're doing and reevaluate it," Voinovich said. But he added that "someone has to look at the big picture" -- and that someone should be the president. "The vision is missing," Voinovich said.

A new Gallup poll shows a majority of Americans believe the mission in Iraq should be cut to cover the recovery costs, while only a small fraction support slashing other domestic programs, raising taxes or increasing the deficit to finance it. New Orleans also has emerged as the chief target of angst. "The question is do we really want to flood New Orleans with money," said Rep. Jack Kingston (R-Ga.).

Kingston said he has detected a building hostility toward New Orleans among his constituents, based on reports that local officials mismanaged the crisis, along with federal dollars that had previously flowed the region's way. "What we are hearing from constituents is: 'Wait a minute, slow down on this,' " Kingston said.

Deficits have rarely emerged as a potent political issue, with the exception of Ross Perot's independent bid for the presidency in 1992, but some worried Republicans believe the deficit may soon reach an untenable level, especially if Democrats can link it to Republican mismanagement.

"I don't know that anyone ever lost a race because of the deficit, but there is concern" that it could happen this time around, said Rep. Thomas M. Davis III (R-Va.), the former head of the National Republican Congressional Committee. "You can't just keep piling up debt."ngress do not agree with Bush.

If the election were held today, guess who would loose? Answer, GWB!

Col I already posted a poll that Bush would still win. Just get over it. Bush is President and he will be until his term ends, and then we will elect another Republican as President.

I notice you didn't answer Ted's question.

If the election were held today, guess who would loose? Answer, GWB! Some of the Republicans were a bit confused. Looks like more are not aware of their error. Read how the GOP in Katrina's Cost May Test GOP Harmony Some Want Bush To Give Details on How U.S. Will Pay

Then I guess it's a REAL good thing that isn't possible, huh? He's in till "08", DEAL WITH IT!