Boehner Accidentally Explains Why His Deficit Position Is Phony

[MCgrease08]

House Speaker John Boehner says businesses couldn't run with debt and deficits like the government does. Well it seems Walmart is doing quite well doing it.

"the net debts of Wal-Mart Stores, Inc. have soared -- up 5,760 percent since 1987. By comparison, the roughly 600 percent rise in the U.S. public debt over the same period looks restrained."

Boehner Accidentally Explains Why His Deficit Position Is Phony - Bloomberg

Do we have any economists in the house?

 

[johnny45]

If WalMart needs revenue to meet its obligations, will it hold a gun to the head of citizens and take it by force?

Will the central state violate the property rights of bond holders in order to "rescue" WalMart?

 

[Twangbanger]

I'm guessing WalMart's business has grown a lot since 1987, too.


But simply put - there is absolutely no comparison between a profitable organization, and an unprofitable one. People can intuitively sense the difference in sustainability between a profitable organization, and an unprofitable one. The Boehner quote, if actually attributable to him, is not phony - it simply seeks to question whether the US Gubmint can run increasing levels of debt, forever, with no consequences. True enough, a government is not a business and is not designed to generate "profit," so the comparison is a complex one. But since we have no other examples of governments the size of America's, running the size of debt we're running, for as long as we're doing it, and showing how it all turned out "in the end," we cannot make that apples-to-apples comparison, because no suitable apple exists (just a few European olives and prunes...which liberals like this one will also seek to invalidate as being an "unfair comparison"). So Boehner is left to draw the comparison to admittedly different types of organizations with more definite life-cycles, and trying to make inferences based on that, for the intended consumption of low-information voters who have about as much patience for technically-detailed economic arguments as they do for commercials during American Idol.


It may not be a linear comparison - but it's not "phony," either. If you read the attached article, the writer's reasoning basically boils down to, "The U.S. Government hasn't blown up yet - therefore, there's no evidence to believe it will." That sounds like a stick-your-head-in-the-sand approach to me, and is a lot less convincing than what Boehner is supposedly saying.

 

[Bunnykid68]

I'm guessing WalMart's business has grown a lot since 1987, too.


But simply put - there is absolutely no comparison between a profitable organization, and an unprofitable one.

 

[Bennettjh]

What I find odd is, why does he bring up wal-mart? The issue is the .gov deficit and debt.

 

[avboiler11]

Debt-to-revenue is an important ratio to consider.

The author of the article for a financial news resource should know that...then again, his degree is in PSYCHOLOGY.

 

[johnny45]

Remember the feigned shock of "You Lie"?

 

[MCgrease08]

Just to clarify. The quote in the OP is from the article linked above, not Boehner. Here is his direct quote.

"We have spent more than what we have brought into this government for 55 of the last 60 years. There’s no business in America that could survive like this. No household in America that could do this. And this government can’t do this."

The comparison with Wal-mart shows that taking on debt and running deficits is common in the business world as well.

Boehner undermines his point by basically saying taking on debt is unsustainable yet we've done it for 55 of the past 60 years and have seen huge economic growth over that time.

I'm more interested in an objective look at the economics of it, not politics. It's an interesting read because it broke down the concept into something I actually understood. That's always a plus.

 

[Twangbanger]

Boehner undermines his point by basically saying taking on debt is unsustainable yet we've done it for 55 of the past 60 years and have seen huge economic growth over that time.

But that's a little like saying the Boston Marathon has been perfectly safe for 19 of the last 20 years, so therefore, the need for increased security is over-exaggerated.


Clearly, something has changed. I don't see anybody making a sensible argument that the additional levels of debt we've taken on in the past 5 years is in any way justified by the level of growth in the U.S. economy over that period, or alternately, by any game-changing projections of positive growth yet to come. All I see is Democrats placing 10 years' worth of job-security for government employees on the national Charge Card, with a payback plan consisting of printing money to inflate our way out of it. And, their echo-chamber accomplices in the media attempting to use decades of old data (from when a different mindset and economic reality prevailed) as justification for why it can continue forever, unabated and without disastrous consequence.

 

[IndyDave1776]

Debt-to-revenue is an important ratio to consider.

The author of the article for a financial news resource should know that...then again, his degree is in PSYCHOLOGY.

This, and also that given Walmart's growth in that time, the debt in question could potentially be this month's outstanding bills, rather than a long-term cancer like the national debt.

 

[LEaSH]

Walmart - any company - is loaned money to keep it operating and expanding. This is money voluntarily loaned by investment companies. The investment companies get something for their risk. And if walmart wants to pay it down it can do so.

The federal government wants to keep operating and expanding, too. They will take money by force and have no realistic means (or desire) to pay down its debt. There is no accountability for the decision makers.