Federal Debt Tops $13 Trillion Dollar Mark

[Snipe]

Federal debt tops $13 trillion mark (http://www.washingtontimes.com/news/2010/jun/2/federal-debt-tops-13-trillion-mark/)


The federal government is now $13 trillion in the red, the Treasury Department reported Wednesday, marking the first time the government has sunk that far into debt and putting a sharp point on the spending debate on Capitol Hill.

Calculated down to the exact penny, the debt totaled $13,050,826,460,886.97 as of Tuesday, leaping nearly $60 billion since Friday, the previous day for which figures were released.

At $13 trillion, that figure has risen by $2.4 trillion in about 500 days since President Obama took office, or an average of $4.9 billion a day. That's almost three times the daily average of $1.7 billion under the previous administration, and led Republicans on Wednesday to place blame squarely at the feet of Mr. Obama and his fellow Democrats.

National Debt To The Penny (http://www.treasurydirect.gov/NP/NPGateway)

At the end of 2005 the national debt was 8,170,424,541,313.62. It took us 20 more months to hit the 9 trillion mark, 9,005,648,561,262.70 on 8/31/2007.

From 8/31/2007 it took us 13 months to hit the 10 trillion mark, 10,024,724,896,912.49 on 9/30/2008.

From 9/30/2008 it took us 6 months to hit the 11 trillion mark, 11,033,157,578,669.78 on 3/16/2009.

From 3/16/2009 it took us eight months to hit the 12 trillion mark, 12,031,299,186,290.07 on 11/16/2009.

From 11/16/2009 it took us 7 months to hit the 13 trillion mark, 13,050,826,460,886.97 on 6/1/2010.

But the end of the calander year we will be at or near 14 trillion dollars in debt.

The population of the United States is 309,416,185. Our national debt represents $42,178.87 for every man woman and child in the United States of America. Many people don't have that kind of money laying around, and 47% will pay no federal income tax (http://money.cnn.com/2009/09/30/pf/taxes/who_pays_taxes/index.htm) this year anyway. If the burden is just on people who pay federal income taxes, that is only 163,990,578 people. For them the bill to pay off the debt comes out to $79,582.78 for taxpayers.

"A trillion here and a trillion there, and pretty soon you are talking about real money"

Have a nice day.

[smileyy]

We had a debt ceiling that could reasonably support one of (A) two useless destructive wars that leave a lot of people dead who don't need to be or (B) a banking bailout that let Wall Street pass all the risk onto the taxpayer.

In a sane world, the government picks one or neither of those, not both. The government _does_ need to spend right now. Unfortunately, one can argue that it's been backed into a corner where it's unclear whether it's wise to do so.

http://en.wikipedia.org/wiki/File:US_Federal_Debt_as_Percent_of_GDP_by_Presiden t.jpg is an illustrative graph. What's interesting is that the debt still managed to go down during the Vietnam war. Also interesting is that Reagan and Bush II were the only presidents to immediately shift from debt reduction to debt increase upon entering office. Going the other way is largely unheard of, as it's much easier to start spending money when you weren't, than it is to stop spending money when you are.

Arguably, the Reagan-Bush recession spending ought to have continued to be paid off by a continuation of the Clinton-era recovery.

[Strange Brew]

Looking at the GDP to Debt graph that you provided, I find a couple of things interesting. Yes, debt spiked under Reagan.....who controlled Congress? Debt continued to go up under Bush I and Clinton until about 1994-5.....who controlled Congress? The debt during the Buss II years stayed realtively even until '06-'07 before beginnning an unprecended spike....who currently controls Congress?

Now according to the Constitution, who controls the purse strings of Gov't.........Those are the questions that should be asked when looking at your graph.

Further, that graphs also shows what a disaster FDR and his policies were/are for the country,

[smileyy]

That sound bite sounded good, until you realize that the Democratic Party controlled the House from 1954-1995, and the Senate from 1955-1995, with the exception of 1981-1987, times which saw continual reduction in debt until Reagan took office.

Sorry, deficit spending was a core of Reaganomics. Which was fairly successful, I won't argue, but also not as successful as the worship of his legacy would lead you to believe.

There's simply no denying the slope discontinuity from Carter->Reagan, and then Clinton->Bush II. Both of which happened with Republican control of the Senate (in the Reagan case), and both houses under Bush II.



Further, that graphs also shows what a disaster FDR and his policies were/are for the country


Uh, really? You mean the part where we participated in victory in what I'm told is the most important war of our generation, the results of which led to a golden age of American growth?

[GuyFawkes38]

I really don't think presidents have as much of a factor on the economy as most people think. No doubt the government can offer relief when bad times hit. But even hardcore Keynsians wouldn't argue that Washington plays a big role in spurring productivity numbers.

Clinton lucked out. Most of the 90's brought a surge in real productivity (not productivity due to layoffs that we have now). That certainly made balancing budgets easier.

[Strange Brew]

That sound bite sounded good, until you realize that the Democratic Party controlled the House from 1954-1995, and the Senate from 1955-1995, with the exception of 1981-1987, times which saw continual reduction in debt until Reagan took office.

Sorry, deficit spending was a core of Reaganomics. Which was fairly successful, I won't argue, but also not as successful as the worship of his legacy would lead you to believe.

There's simply no denying the slope discontinuity from Carter->Reagan, and then Clinton->Bush II. Both of which happened with Republican control of the Senate (in the Reagan case), and both houses under Bush II.



Uh, really? You mean the part where we participated in victory in what I'm told is the most important war of our generation, the results of which led to a golden age of American growth?

the Dems until about the time of Reagan were Kennedy Dems (Kennedy was the originator of Reaganomics). The Dems since are Progressives. If you'll notice the graph the two largest spikes are under Progressive Presidents and Congresses (FDR and Obama). I'd vote for Kennedycrats any day over all present day Dems and most Repubs.

The major part of our Debt problem is not war, it is the social programs that are not and have not been funded.

[smileyy]

(not productivity due to layoffs that we have now).

Yeah, calling that "productivity" vastly confuses "profitability" with "productivity".

[smileyy]

Our military spending is $550B per year. That's 9 times larger than the next nearest country, China, at $63B per year.

We have spend more than $1T in Iraq and Afghanistan in less than 10 years. All of which has been lighting a match to that money, with the side benefit of killing U.S. soldiers.

[Strange Brew]

We have spend more than $1T in Iraq and Afghanistan in less than 10 years. All of which has been lighting a match to that money, with the side benefit of killing U.S. soldiers.

For some perspective, we spent nearly a $1T on the Stimulus...one stinking bill which has only stimulated the Gov't. So, $1T on a war that has liberated many in Iraq (at a high cost no doubt. Not saying I agree) over 10 years. Or burning a cool Trillion on Gov't programs that have not met the stated goal of keeping unemployment under 8%. Have you read the Stim bill to find out what is in it? Don't worry, neither did your Representatives or our President. But your right, wars are our REAL debt problem.

[GuyFawkes38]

yeah, there's something depressing about having the view that we must drastically cut military spending and change our defense strategies because medicare and social security payments are skyrocketing.

I guess baby boomers run the country and they demand their benefits (even though they didn't put enough in).

[smileyy]

So, $1T on a war that has liberated many in Iraq (at a high cost no doubt. Not saying I agree) over 10 years.

I'll take $1T for a stimulus that does little for the economy instead of $1T for wars that make America less secure, not more.

[Strange Brew]

I'll take $1T for a stimulus that does little for the economy instead of $1T for wars that make America less secure, not more.

How are we not more secure?

Please explain how we are less secure?

How about we leave a void in the Middle East, repeal the Stim and give the 2T back to the 53% of private citizens in this country that earned it and were forced to give it up to our bloated inefficient Gov't?

[smileyy]

Honestly, I'd probably make that deal. Except, you know, we never gave that money to the government. It was all borrowed :(

The killing of civilians in Iraq, Afghanistan and Pakistan and the illegal imprisonment of those labelled as "enemy combatants" do more to cause people to join causes like Al Qaeda and other militant groups. Bush and Obama's actions have been Al Qaeda's greatest recruiting tool. Worse, we've spent $750B in Iraq, a country that was never a threat to the United States.

Hint to military strategists: There aren't a fixed number of "terrorists" in the world. You're not going to eventually kill them all and be safe. Every time a Predator drone kills a target and the 10 civilians around him, their relatives don't say "Gee, thanks for saving me from my brother/uncle/son/mother! I'm forever in your debt for my liberation! I'll be fine living in this pile of rubble that used to be our house. Don't worry about it -- I can scrub the blood off!"

The "War on Terror" makes itself self-perpetuating, facilitiates executive power grabs, and kills American soldiers and civilians in other countries. I'm glad we've spent $1T on it.

Our government spies its citizens, detains people in secret prisons without trials and increases the number of "terrorists" threatening it. We've managed to go from Pax Americana to a combination of the Soviet Union/East Germany and Al Qaeda recruiter. No thanks.

[Snipe]

The wars have cost way too much money. The great thing about wars though is that they end, at least they are supposed to end. Our long term government budget problems have nothing to do with the wars. We just spend too much money.

We need to start shutting down federal agencies. We just don't have the money.

People are going to be pissed when they are kicked off the dole. It is going to be quite a show. You see how those Greeks took it. It is going to be a brutal reality for everyone.

[bobbiemcgee]

yeah, there's something depressing about having the view that we must drastically cut military spending and change our defense strategies because medicare and social security payments are skyrocketing.

I guess baby boomers run the country and they demand their benefits (even though they didn't put enough in).

Always with the Boomers!! Do you have parents? They took my taxes for almost 50 yrs. and I sent them another big chunk every April. I have kids who pay a ton of taxes. People who qualify are taking their SS early cuz nobody will hire them. When I went down to SS office, the clerk didn't say "oh, I see you're here to demand your benefits". The Gov't under Bush CUT the taxes!! and no I didn't complain about paying less but thought it was a bad move. I didn't complain when I was paying 1100 a mo for ins and some 20 something pays 80.

[GuyFawkes38]

Always with the Boomers!! Do you have parents? They took my taxes for almost 50 yrs. and I sent them another big chunk every April. I have kids who pay a ton of taxes. People who qualify are taking their SS early cuz nobody will hire them. When I went down to SS office, the clerk didn't say "oh, I see you're here to demand your benefits". The Gov't under Bush CUT the taxes!! and no I didn't complain about paying less but thought it was a bad move. I didn't complain when I was paying 1100 a mo for ins and some 20 something pays 80.

I have a tendency to group social security and medicare together. While Social Security does have its funding issues, you have a point. A lot of people paid a lot of money into the system. And most people aren't taking out vastly more than they put in.

Medicare is a different beast. It's the big debt monster. Because of rapidly increasing health costs, seniors take out much, much more than they put in. If changes aren't made, it'll have a serious negative impact on the country.

[PM Thor]

FYI, since 9/11 the base Defense Budget has doubled. This does not include the wars in Iraq and Afghanistan, nor any other US involvement throughout the world.

Just a little perspective, where they include projects like the F-35 (which calls for billions) and isn't wanted by the military. Stupid government spending.

Am I picking on the military? Hell no. We need to cut a crapload of programs that are the pet projects for politicians, and those politicians need to account for their spending too.

I HATE dayton.

[GuyFawkes38]

I completely agree with thor. There's a lot of defense spending waste. No doubt projects like the F-35 are ridiculous.

But one of the most important and expensive parts of defense spending is human capital. It's expensive to attract and keep great people. The armed forces aren't organized into strong unions like many other government worker groups. They don't have a powerful lobbying force to advocate on their behalf.

Given the choice of scaling back medicare benefits or reducing the number or pay of military personnel, a politician won't think twice about choosing the latter.

[QueensbridgeMF]

How much did it cost to put Freedom Fries on the congressional cafeteria menu? Did they actually follow through with that rediculousness? National Politics attract some of the most horrible and petty people you can find (and a few good ones).

I do enjoy me some liberty cabbage on my hot dog though

[Smails]

:(

The killing of civilians in Iraq, Afghanistan and Pakistan and the illegal imprisonment of those labelled as "enemy combatants" do more to cause people to join causes like Al Qaeda and other militant groups. Bush and Obama's actions have been Al Qaeda's greatest recruiting tool. Worse, we've spent $750B in Iraq, a country that was never a threat to the United States.

Hint to military strategists: There aren't a fixed number of "terrorists" in the world. You're not going to eventually kill them all and be safe. Every time a Predator drone kills a target and the 10 civilians around him, their relatives don't say "Gee, thanks for saving me from my brother/uncle/son/mother! I'm forever in your debt for my liberation! I'll be fine living in this pile of rubble that used to be our house. Don't worry about it -- I can scrub the blood off!"

The "War on Terror" makes itself self-perpetuating, facilitiates executive power grabs, and kills American soldiers and civilians in other countries. I'm glad we've spent $1T on it.

Our government spies its citizens detains people in secret prisons a threat to national without trials and increases the number of "terrorists" threatening it. We've managed to go from Pax Americana to a combination of the Soviet Union/East Germany and Al Qaeda recruiter. No thanks.

It's truly amazing to me that the people who are in favor of government regulated health care, govt. regulation of Wall street, Govt. control of the student loan business, government bailouts and ownership of the auto industry are same people who question the matter in which the government keeps us safe. In the history of our Republic, keeping us safe is the one thing our Government has actually done quite well. We have been attacked exactly 3 times since the American Revolution. 1812, Pearl, and 9/11. I'd say that's not a bad track record given US foriegn policy.

I you feel that our incursions into Iraq and Afgan have done nothing but strengthen the reslove of radical islam, then is safe to assume that you beleive that we would have no 'terror problem' if we simply left them alone?

FYI..It was peacetime when Al Quaeda attacked the US on 9/11.

Do you feel the US would be safer today if we had not responded to 9/11 with millitary action?

Is there a possibility that fighting terrorists on foriegn soils severely limits their ability and resources to plan, coordinate, and execute another 9/11 type attack on US soil?

[xudash]

the Dems until about the time of Reagan were Kennedy Dems (Kennedy was the originator of Reaganomics). The Dems since are Progressives. If you'll notice the graph the two largest spikes are under Progressive Presidents and Congresses (FDR and Obama). I'd vote for Kennedycrats any day over all present day Dems and most Repubs.

The major part of our Debt problem is not war, it is the social programs that are not and have not been funded.

Excellent post.

[muskienick]

the Dems until about the time of Reagan were Kennedy Dems (Kennedy was the originator of Reaganomics). The Dems since are Progressives. If you'll notice the graph the two largest spikes are under Progressive Presidents and Congresses (FDR and Obama). I'd vote for Kennedycrats any day over all present day Dems and most Repubs.

The major part of our Debt problem is not war, it is the social programs that are not and have not been funded.

I'm not a real fan of generalities ("Kennedycrats"; "Reaganomics") but I'd have to question the inclusion of Clinton among the post-Reagan Dems who spiked spending and the accumulation of national debt. In those regards, balancing the budget and nibbling away at the national debt, Clinton would probably describe himself as a progressive but he acted quite atypical for a Democrat (as described immediately above) and he followed Reagan.

[Strange Brew]

I'm not a real fan of generalities ("Kennedycrats"; "Reaganomics") but I'd have to question the inclusion of Clinton among the post-Reagan Dems who spiked spending and the accumulation of national debt. In those regards, balancing the budget and nibbling away at the national debt, Clinton would probably describe himself as a progressive but he acted quite atypical for a Democrat (as described immediately above) and he followed Reagan.

He was forced to change after the '94 Congressional election. Newt threatened to shut down the Gov't if Clinton didn't agree to the proposed budget (that cut deficits). Remember, Clinton tried to ram through HillaryCare before '94 which would have been a massive spending Bill similar to the recently passed "Healthcare" Bill.

His Administration defined "Triangulation"

[Snipe]

I'm not a real fan of generalities ("Kennedycrats"; "Reaganomics") but I'd have to question the inclusion of Clinton among the post-Reagan Dems who spiked spending and the accumulation of national debt. In those regards, balancing the budget and nibbling away at the national debt, Clinton would probably describe himself as a progressive but he acted quite atypical for a Democrat (as described immediately above) and he followed Reagan.

Bill Clinton was President for eight years. In every single year our national debt increased. Every single one of them. Check out the government website I highlighted about that shows you the national debt "to the penny". You can search for any time frame you want. The last time we actually paid off some of the debt was Ike in 1960. Ike was one of the most underrated Presidents in US History according to the House of Snipe. That man got shit done and on budget. National highway system, check. St. Lawrence Seaway, check. At the time both were the two biggest infrastructure projects in human history, and Ike got them done on time and on schedule, and for a plus, he paid for them and balanced the budget. We have not had a balanced budget since Ike. As MOR says, "Check the tape".

Ike was the Mofo Man with the Mofo Plan.

Bill Clinton never nibbled away at the national debt. I like Bill Clinton and I wish he was still President. We haven't had a President as good as Bill Clinton since he left office in my opinion. But he never nibbled away at the national debt. He came close, but the national debt went up every year that he was in office.

[Snipe]

It's truly amazing to me that the people who are in favor of government regulated health care, govt. regulation of Wall street, Govt. control of the student loan business, government bailouts and ownership of the auto industry are same people who question the matter in which the government keeps us safe. In the history of our Republic, keeping us safe is the one thing our Government has actually done quite well. We have been attacked exactly 3 times since the American Revolution. 1812, Pearl, and 9/11. I'd say that's not a bad track record given US foriegn policy.

Man did that feel good to read and that was well put.

I have some real problems with the cost of these wars. They sold us the wars with different costs and it appears Bush didn't care what they would actually cost. I am pissed about that. I also don't like the mission creep. Why are we still in Afganistan? For what exactly? Most Americans don't really know. I supported the wars initially, but after close to a decade it is time to stop this stuff in my opinion. We can only do so much.

That said, I loved what you wrote.

[GuyFawkes38]

Ezra Klein of the Washington Post is widely regarded as one of the Democrats top health care pundits. No one cheered harder for health care reform.

Here's his honest assessment of the of the future (he quotes Democratic economist Brad Delong) (http://voices.washingtonpost.com/ezra-klein/2010/09/the_budget_in_2060.html):



The budget in 2060

Brad DeLong asks a good question:


What is the most likely outcome for the U.S. budget come 2060?

1. We will have raised taxes to pay for government health spending.

2. We will have cut doctors' wages and enslaved them by drafting them into a socialist
national health service.

3. We will have abandoned our commitment to providing state-of-the-art health care to
the sick and not just the wealthy.

4. The health care fairy will have figured out a way for us all to have all the medically-
appropriate care we need for a surprisingly low private and public budgetary cost.

5. The federal government as we know it will have collapsed, and those of us still alive
will be starring involuntarily in a remake of “Mad Max: Beyond Thunderdome”.

I'll say some combination of 1, 2, 3 and 5. What do you think?

heh. TINSTAAFL. Number 4 is ridiculous (yet, it seems like a lot of democrats bought it, including smart people like doctors).

I love the honesty. I fear #1 the most. If Doctors' wages don't fall, we will be paying really, really high tax rates. So I'm all for #2 (I think it's bound to happen).

[madness31]

The social programs were funded, the problem is that the money was not set aside and invested so that the money is still available for payouts as the bills come due. Military spending is a huge part of this gaping hole but not the only issue. Those up in arms about social security and medicare don't understand that those programs were/are funded and that it is government mismanagement that created the hole.

Crazy people will do crazy things so a terrorist attack is always possible. The war does potentially create more terrorists through collateral damage and the image that the US wants to control the rest of the world but more importantly it created a power gap that Iran now wants to fill. Iraq was a force that helped keep Iran in check now there is a power void that gives Iran the opportunity to become a huge power in the middle east. The war in Iraq, which had nothing to do with 9/11 now makes a war with Iran almost inevitable. This will once again destroy the US budgets and likely lead to a devaluation of the dollar. Interest rates will soar and buying homes will become out of reach or home prices will once again fall/collapse.

The talk about congress and budget gaps does not take into account that defecits do not instantly materialize or go away in most circumstances. It is the decisions of the leadership the 2 to 3 years prior to a party gaining control that frequently dictates what will happen in the economy and with government budgets. The deregulation combined with regulators not doing their jobs plus greed in the financial industry that lead to the financial collapse. Financial common sense was discarded and it lead to an economic bust. There was no quick fix for this or the after effects. The bailouts allowed the status quo to remain rather than clearing the dead weight. The dead weight will weigh on the economy for decades. The booms will be shorter and the busts more severe until the mess is cleaned up. The stimulus spending was another short term fix that has long-term consequences. Unemployment would be dramatically higher without the spending and without the extension of unemployment benefits but these policies put the dollar and interest rates at risk in the coming years. Bush and Obama both made very short sighted decisions but the Iraq war will likely prove to be the most costly of these decisions as it just leads to more and more military/war spending. The financial bailout likely leads the US to a Japanese style depression where there is no growth for decades. The infrastructure spending was unfortunately focused on short term projects like roads rather than focused on long term initiatives to make the US more competitive.

[GuyFawkes38]

The financial downturn sucks. But when it comes to long term deficits, Medicare is the primary issue. And it's not only an issue in the USA. Across the 1st world, governments face the major challenge of funding their public health care systems for the elderly. Health care costs have risen dramatically more than expected.

With all due respect, this is false:


The social programs were funded, the problem is that the money was not set aside and invested so that the money is still available for payouts as the bills come due.

From the wikipedia article on medicare:


The present value of unfunded obligations under all parts of Medicare during FY 2009 over an infinite horizon is approximately $36 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the shortfall assuming the program continues indefinitely.

36 trillion!!!!!!!!!!!!!!!!!!!! yeah, the funding isn't there (that takes into account "IOU's"....a virtual lockbox).

[madness31]

The wikipedia post does not prove my statement wrong. It is possible that the tax withholdings were never enough even if the money was set aside and invested but the fact that it wasn't is the major problem. Insurance companies take premiums and invest them to have adequate funds to pay on claims. That is what the government should have done rather than spending them on wars, military and other beauracracies. There is a ton of government waste but military spending is where a meaningful chunk is wasted.

The cost of healthcare is a significant problem in this country and others though the US is one of the most expensive. The answer to this problem is not one many of you want to hear as it would result in reducing covered claims for medicare as well as other insurance providers. Some treatments are too expensive for the benefits (few months of extra life, indefinite life support, etc). Cash payments for these treatments should always be an option and hospice care should be covered as the cost is minimal compared to the benefits received.

Some tough decisions need made regarding healthcare and other government spending and neither party is capable of these decisions. They will accuse and blame one another without taking meaningful action until reality makes the changes for them. Instead of gradual changes the country will get abrubt and drastic cuts in benefits. Stop going out to eat. Pack your lunches and save cash. Invest in precious metals until the dollar collapses then move money to other investments as no trend lasts forever.

[GuyFawkes38]

The wikipedia post does not prove my statement wrong. It is possible that the tax withholdings were never enough even if the money was set aside and invested but the fact that it wasn't is the major problem. Insurance companies take premiums and invest them to have adequate funds to pay on claims. That is what the government should have done rather than spending them on wars, military and other beauracracies. There is a ton of government waste but military spending is where a meaningful chunk is wasted.

The wikipedia figure (taken from the US government) does take into consideration your point.

Most experts believe the trust fund (the IOU's....like I said, a virtual lockbox which earns interest) will go bankrupt in 10 years.

That means if medicare funds went directly into a lockbox and was invested prudently, just like you would have wanted, it would still go bankrupt in 10 years.


Edit: Here's where this 36 trillion figure comes from:

https://www.cms.gov/ReportsTrustFunds/downloads/tr2009.pdf

I hate to get repetitive. But as the report says, 36 trillion would have to be added to the medicare trust fund (which is a lockbox where funds earn interest) for it to be solvent for the future.

uggghhhh.

[Snipe]

The dollar is going to fail when the maximum number of people are on the government dole. Can't see it going down any other way.

The collapse is going to be spectacular. I wonder where the fans of the nanny state will be then.

California will go before the rest of us. It will be fun to watch. We live in interesting times.

[boozehound]

This medicaid talk reminds me of an interesting article I read somewhere recently. They premise was "how much is life worth". They cited examples of Cancer drugs that kept people alive an average of 4 months longer but cost $10K+ per month. Eventually the medicaid system is going to buckle under the weight of all this cost.

[GuyFawkes38]

This medicaid talk reminds me of an interesting article I read somewhere recently. They premise was "how much is life worth". They cited examples of Cancer drugs that kept people alive an average of 4 months longer but cost $10K+ per month. Eventually the medicaid system is going to buckle under the weight of all this cost.

yeah, it's a brutal subject. But no doubt, I think all Americans need to come to terms with the idea that it's not feasible for everyone to have equal care (as Milton Friedman said of health care, why do we need to give everyone a Lexus). Right now there are a lot of super expensive policies in place that attempt to guarantee that. Those will have to be loosened a bit.

Of course, that's not to say that we have a moral responsibility to provide a reasonable health care safety net to everyone.

[bobbiemcgee]

The pre-existing part has already kicked in. So if you break your arm today can you go online and get a policy b4 going down to the emergency room?

[Snipe]

Of course, that's not to say that we have a moral responsibility to provide a reasonable health care safety net to everyone.

When hasn't that been the case in America? Emergency rooms don't turn people away.

[GuyFawkes38]

When hasn't that been the case in America? Emergency rooms don't turn people away.

No doubt about it, the horror stories are false.

But emergency rooms only have a responsibility to stabilize the patient, which doesn't cover patients seeking more routine care. The NIH in Britain seems to provide a better model. It's really cheap but more of a complete service system. It's a safety net. It's far from ideal. But it's there.

[Snipe]

http://media.gallup.com/GPTB/healthcare/20050118_1.gif

http://media.gallup.com/GPTB/healthcare/20050118_2.gif

http://media.gallup.com/GPTB/healthcare/20050118_3.gif

I don't know why you think the NIH in Britain seems to provide a better model. It appears that the British people don't agree with you.

[GuyFawkes38]

that's a subjective evaluation. If you stick to the objective number, a different picture emerges. The NIH is much cheaper and health care outcomes are similar.

http://www.project.org/images/graphs/Health_Expenditures.jpg

The law of diminishing returns is certainly a major issue in the US. We pay much, much more without the benefits. Costs have to be slashed.

Life expectancy if far from a perfect measure of health care outcomes. But still, it's worth noting that the UK has a higher life expectancy than the US.

[dc_x]

California will go before the rest of us. It will be fun to watch. We live in interesting times.

California is in better shape than the Federal government. California's consitution requires a balanced budget. Could you imagine if the Federal constitution required that? We'd be in a lot of trouble.

California has about $43.5 billion of debt. The U.S. has about $13.5 TRILLION of debt.

California's debt is 2% of its GDP. The U.S. debt is 94% of GDP.

California's problem is that its constitution forces fiscal discipline today, wheras the Federal constitution allows us to pass the buck to future generations.

[boozehound]

California is in better shape than the Federal government. California's consitution requires a balanced budget. Could you imagine if the Federal constitution required that? We'd be in a lot of trouble.

California has about $43.5 billion of debt. The U.S. has about $13.5 TRILLION of debt.

California's debt is 2% of its GDP. The U.S. debt is 94% of GDP.

California's problem is that its constitution forces fiscal discipline today, wheras the Federal constitution allows us to pass the buck to future generations.

And pass the buck we shall!

As a person in my late 20's I am very concerned about the continued fiscal solvency of our Nation. We love to spend money that we don't have. Even after watching the economy brought to it's knees by people spending money that they don't have the government continues to do so with no realistic plan to reign it in.

At the end of the day, as a country, we have an increasing elderly population and a comparatively small (and shrinking) voter base of people in their 20's and 30's. We aren't going to do anything that causes us to sacrifice now for the sake of the future. We have demonstrated that time and time again when presented with the opportunity to make policy shifts to ensure our great nation's continued prosperity.

How do you think Public Healthcare gets the support it does after so many failed attempts? A lot of the voter base is on public healthcare anyways in the form of medicare. They also don't care about the costs associated with said program because they are just passing the buck to future generations anyways.

Government Pensions. Social Security. Health Care. With the Baby Boomers retiring who is going to pay for this? The tax base is only going to get smaller.

How about what happens to the housing market over the next 20 years as the baby boomers start to die off? There will be more houses than people that need and can afford them. What will that do to the market?

No one in government has the cajones to speak the truth about what we need to do to get back on the right track. They are a pack of career politicians who only care about getting re-elected, so they pander to the largest groups of voters.

We are facing a demographic situation that is going to be somewhat unique in American History. People are living longer then ever and having fewer kids. The net result is an aging of the population and a voter base of people who are just trying to preserve their quality of life for as long as they can, future be damned. I can't really blame them for doing it, but it is not good for the future at all.

[Snipe]

that's a subjective evaluation. If you stick to the objective number, a different picture emerges. The NIH is much cheaper and health care outcomes are similar.

http://www.project.org/images/graphs/Health_Expenditures.jpg

The law of diminishing returns is certainly a major issue in the US. We pay much, much more without the benefits. Costs have to be slashed.

Life expectancy if far from a perfect measure of health care outcomes. But still, it's worth noting that the UK has a higher life expectancy than the US.

When you choose life expectancy comparisons to make comparisons, you are subjectively choosing the criteria to make your "objective" one. So if I fall and break my hip, perhaps I can live in a wheelchair for the next ten years without a hip replacement. Perhaps if I got a hip replacement I would only live the same ten years anyway. What is the cost of me sitting around in extreme pain for the end of my days vs. walking around happily with a new hip? Life expectancy doesn't cover that, and Canada and the National Health Service are notorious for their waiting lists. One of the reasons that they can actually cut a lot of costs is that people die on the waiting lists. You don't have to provide costly service if people die while waiting for you to give it to them.

I agree that we have to find a way to ration care, and we have to make the difficult decisions on who to ration care too.

Certain hopeless elderly people who have little or no brain function would be prime candidates for rationed care in my opinion, as would violent criminals. It is a difficult subject. Either we face it and decide what to cut or government goes belly up and the ensuing chaos makes more drastic cuts for us. Either some people pay or we all do.

[Snipe]

California is in better shape than the Federal government. California's consitution requires a balanced budget. Could you imagine if the Federal constitution required that? We'd be in a lot of trouble.

California has about $43.5 billion of debt. The U.S. has about $13.5 TRILLION of debt.

California's debt is 2% of its GDP. The U.S. debt is 94% of GDP.

California's problem is that its constitution forces fiscal discipline today, wheras the Federal constitution allows us to pass the buck to future generations.

I think that either California or Illinois will be the first state to go bankrupt. Illinois pensions are so far underfunded it is laughable.

Califronia also has additional problems. Many cities are on the verge of bankruptcy, including Los Angeles. So it isn't just the state budget. California is in no position to bail out Los Angeles, and they also don't have the funds to absorb the responsiblity of the services that Los Angeles currently provides but will need to cut.

I see a domino effect happening in California starting at the Municipal level. Don't forget though that California has already paid people in IOUs because they don't have money. The situation is grave there.

As for Illinois:

Illinois Careens Towards Bankruptcy; Governmental Collapse Coming (http://www.howestreet.com/articles/index.php?article_id=12183)

Illinois deep in debt, doesn’t pay bills (http://www.msnbc.msn.com/id/37136518/)

Right now it takes the better part of a year for the State of Illinois to pay it's bills. They simply don't pay them because they don't have the money, and when they get money in they pay the oldest ones. So if you do business with them you have to wait a long time and hope they don't go bankrupt before they pay you. At some point people won't do anything for them until they can get a check upfront and that is when the whole thing collapses.

[GuyFawkes38]

This is interesting:

http://assets.theatlantic.com/static/mt/assets/meganmcardle/Taxpayer-receipt.jpg

So this 34K earner spends $2,050 on programs he or she doesn't receive benefits from. That's a big chunk of change for a 34K earner.

I think if more people realized that, they'd be more in favor of reforming entitlement programs.

[Juice]

This is interesting:

http://assets.theatlantic.com/static/mt/assets/meganmcardle/Taxpayer-receipt.jpg

So this 34K earner spends $2,050 on programs he or she doesn't receive benefits from. That's a big chunk of change for a 34K earner.

I think if more people realized that, they be in favor of reforming entitlement programs.

Additionally, I'm not a fan of Boehner, who refuses to touch entitlement spending because he's a puppet for AARP.

The biggest scam in that chart is the $0.19 for members of Congress

[GuyFawkes38]

The biggest scam in that chart is the $0.19 for members of Congress

ha, definitely.

[Snipe]

This is interesting:

http://assets.theatlantic.com/static/mt/assets/meganmcardle/Taxpayer-receipt.jpg

So this 34K earner spends $2,050 on programs he or she doesn't receive benefits from. That's a big chunk of change for a 34K earner.

I think if more people realized that, they'd be more in favor of reforming entitlement programs.


Where is welfare on this list? Where are food stamps? Where are agricultural subsidies?

I love the idea of an itemized bill, I just wonder if this list is accurate.

You have a bad habit of not linking to your source material.

It would also be interesting to see the list broken out between Federal Income taxes and FICA taxes. I think FICA is taxed at 7.5%, so $2,561 of the total taxes is expressly for Social Security and Medicare.

It would be interested if they did a breakdown of just the Federal Income Tax portion and what that pays for. Once you get Social Security and Medicare off the list, you will see that debt service is the #2 thing your federal taxes go to paying for. I suspect someday that will be #1.

[GuyFawkes38]

Where is welfare on this list? Where are food stamps? Where are agricultural subsidies?

I love the idea of an itemized bill, I just wonder if this list is accurate.

You have a bad habit of not linking to your source material.

It would also be interesting to see the list broken out between Federal Income taxes and FICA taxes. I think FICA is taxed at 7.5%, so $2,561 of the total taxes is expressly for Social Security and Medicare.

It would be interested if they did a breakdown of just the Federal Income Tax portion and what that pays for. Once you get Social Security and Medicare off the list, you will see that debt service is the #2 thing your federal taxes go to paying for. I suspect someday that will be #1.

Got it here:

http://www.theatlantic.com/business/archive/2010/10/hand-the-taxpayer-a-receipt/63909/

I don't believe stuff on the list adds up to 5400. There are programs not on the list (yeah, I wish it was more comprehensive).

The government uses tax inflows tagged for social security and medicare to spend on other stuff (tax revenue all goes into a big fund). That's why on this list, social security and medicare add up to well less than 2,561.

[X-band '01]

Where is welfare on this list? Where are food stamps? Where are agricultural subsidies?

I love the idea of an itemized bill, I just wonder if this list is accurate.

You have a bad habit of not linking to your source material.

It would also be interesting to see the list broken out between Federal Income taxes and FICA taxes. I think FICA is taxed at 7.5%, so $2,561 of the total taxes is expressly for Social Security and Medicare.

It would be interested if they did a breakdown of just the Federal Income Tax portion and what that pays for. Once you get Social Security and Medicare off the list, you will see that debt service is the #2 thing your federal taxes go to paying for. I suspect someday that will be #1.

FICA is 7.65% - Social Security is 6.2% (up to a threshold of $106,800) and Medicare is 1.45%.

[kmcrawfo]

This is interesting:

http://assets.theatlantic.com/static/mt/assets/meganmcardle/Taxpayer-receipt.jpg

So this 34K earner spends $2,050 on programs he or she doesn't receive benefits from. That's a big chunk of change for a 34K earner.

I think if more people realized that, they'd be more in favor of reforming entitlement programs.


It is interesting, but not accurate. 47-48% of Americans pay absolutely ZERO federal income tax and standard deductions, credits, etc. The $35,000 example salary this table offers falls smack in the middle of that group. The person in this example would have paid social secruity and medicare... However, they would not have funded a penny of the Iraq War, Veterans, Congress, etc.

In fact this person would likely have gotten a refund in excess of any taxes they would have owed (i.e. redistribution of wealth)

So, in the end 47-48% of Americans are benefiting from programs they pay absolutely nothing for. 5% of Americans are paying for roughly 70% of all programs for the rest of the country.

This is a stat easily found on any internet search:

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

http://www.postbulletin.com/newsmanager/templates/localnews_story.asp?z=12&a=471004

[kmcrawfo]

It would be interested if they did a breakdown of just the Federal Income Tax portion and what that pays for. Once you get Social Security and Medicare off the list, you will see that debt service is the #2 thing your federal taxes go to paying for. I suspect someday that will be #1.

It is important to remember that this person after standard deduction and credits and the current stimulus bill would pay zero in federal taxes, so in essence the breakdown that you want is pretty easy to calculate. This individual pays for essentially nothing after SS and Medicare.

[GuyFawkes38]

It is important to remember that this person after standard deduction and credits and the current stimulus bill would pay zero in federal taxes, so in essence the breakdown that you want is pretty easy to calculate. This individual pays for essentially nothing after SS and Medicare.

your assuming the tax payer has a family.

From a commenter at the site the list is from:


This is from the supporting PDF on their website:

According to the IRS website, in 2008 the median tax filer in America had an adjusted gross income of $34,140 and paid $2,790 in federal income taxes.2 Assuming that all of that income was earned through wages, this filer would also contribute $2,610 to Social Security and Medicare through FICA. That is a total of $5,400 in federal tax and FICA payments.

To address your point, if this median AGI tax payer doesn't have kids or a wife, it's accurate.

[GuyFawkes38]

A pertinent graph from Reason Magazine (http://reason.com/blog/2010/10/04/when-it-comes-to-massive-feder):

http://reason.com/assets/mc/_ATTIC/Image/riggs/June_Fig_2.png

[waggy]

So that's what "puke" green looks like.

[American X]

So France has come to a standstill because Sarkozy wants to raise the retirement age from 60 to 62.

Can we do the opposite somehow? Everybody go to work on Saturday, send the wages to pay down the national debt, and demand the Social Security age be raised?


How can a country with Carla Bruni get so uptight?

http://pibillwarner.files.wordpress.com/2010/09/carla-bruni_0_0_0x0_375x537.jpg

[smileyy]

I'd be fine with raising the retirement age if there were any realistic potential of being able to be hired or retained at that age for many jobs. When the unemployment rate in the country is around 10%, I have to figure the unemployment rate for the 55+ demographic is even higher than that.

I'm find with working till I'm 65 or 70 if I'm expected to live into my 80s, but will anybody employ me?

[madness31]

The age must be raised and/or payments reduced. The cap on taxes will also need removed to properly fund the program.

I would prefer the program get phased out but paying for that is practically impossible. Most Republicans support this as Social Security as well as Medicare is considered an entitlement. Other Republicans believe it should be managed by the financial industry. This is the worst of all worlds in my eyes as it would only benefit the financial firms managing the money. Retirees would get market returns minus commissions and when the market experiences a big drop the elderly will suffer. If the money is not going to be guaranteed then it should not be taken out of pay in taxes. The individuals can decide how best to manage it.

[bobbiemcgee]

I'd be fine with raising the retirement age if there were any realistic potential of being able to be hired or retained at that age for many jobs. When the unemployment rate in the country is around 10%, I have to figure the unemployment rate for the 55+ demographic is even higher than that.

I'm find with working till I'm 65 or 70 if I'm expected to live into my 80s, but will anybody employ me?

In a word, NO

[GuyFawkes38]

This via The Atlantic (http://www.theatlantic.com/business/archive/2010/11/a-visual-history-of-us-government-deficits/65526/):

http://assets.theatlantic.com/static/mt/assets/meganmcardle/Spending%20and%20Taxes.jpg

Someone on this thread was making the argument that Obama inherited Bush's recession and spending programs and shouldn't be blamed for the debt. But as the chart clearly shows, even without the recession, Obama still would have dramatically increased the debt (dotted green line is revenue without recession).

Obama has to take some responsibility for that. He can't continue blaming Bush.

[bobbiemcgee]

where would the dotted line be if Bush didn't cut taxes?

[smileyy]

...and force through an unfunded Medicare Prescription Drug Plan with no price negotiating powers?

[GuyFawkes38]

...and force through an unfunded Medicare Prescription Drug Plan with no price negotiating powers?

I'm not a fan of Medicare plan D. But in terms of debt, it pales in comparison to Obama's spending (GM bailout, stimulus, and other budget increases).

And that's the point of the graph above. Look at the red line and the dramatic increase after 2008 (it's important to note that Bush's TARP didn't lose much money and might even make money).

Ha, it's a little funny and frustrating to post a chart which directly shows Obama's lack of concern of debt and how that has nothing to do with Bush and then immediately get 2 posts complaining about Bush.

[smileyy]

I'm still taking the long view -- that this is when the government _should_ spend. Unfortunately, it came on the back of awful budgetary policy under the Bush administration (Medicare Part D, tax cuts, the "war" on terror) that had already ratcheted up the debt.

Don't mark me as an Obama fan, though.

[GuyFawkes38]

I'm still taking the long view -- that this is when the government _should_ spend. Unfortunately, it came on the back of awful budgetary policy under the Bush administration (Medicare Part D, tax cuts, the "war" on terror) that had already ratcheted up the debt.

Don't mark me as an Obama fan, though.

That's a reasonable perspective. But IMHO, it didn't work in practice and we would have been better off with stimulus checks.

[madness31]

The GM bailout is also performing much better than expected. The bailouts might not lose much money but that doesn't make them right. The financial bailouts are a moral hazard as is the GM bailout. The big difference is that the finance companies needed a bailout because they didn't maintain working capital and instead paid it out in bonuses. The managers that made terrible decisions walked away with billions and billions of dollars that should have been used to maintain solvency.

To say the spending programs didn't work is to ignore reality. The economy was shedding 700K jobs a month when Obama took office. The government spending projects slowed that pace. The programs were less effective than they should have been because projects were not chosen wisely but mainly because of decades of irresponsible spending. The deficit is becoming a huge concern and is probably on the margins adding to business uncertainty and therefore leading to cautious hiring. At the same time without the job backstop the job losses would have continued for many more months.

To put things in perspective the Republicans are on record for stating they want to go back to pre 2008 non defense spending. This would shave a mere $122 billion from the current budget. This is not a game changer and tells you that the Republicans also lack the backbone to do what is necessary.

Spending must go down dramatically and the only way to do that is to decrease social security payouts, medicare/medicaid coverages or military. My vote is for less military spending as we spend more than the rest of the world combined. That is an insanity that must stop. I'd also change social security and focus on cutting fraud out of medicare.

[madness31]

The rising spending chart includes increased social security and medicare expenses as the public ages. It also includes the prescription drug program as pointed out. The stimulus spending was for the most part one off meaning that future deficit projections are mostly related to those liabilities and tepid economic growth.

If you are looking for fiscal responsibility you must vote Libertarian as you will not find it with the Republicans or even the tea party.

[bobbiemcgee]

We'll see what happens when the 'pubs get back in today, my guess, more gridlock and stalemates.

[spazzrico]

I personally don't see any way that the deficit can be managed without raising taxes. I think it will have to be a combo of slightly higher (think Clinton era, including the estate tax) and cutting spending. You can't and shouldn't do one without the other. The American taxpayer has to be met in the middle somewhere if asked to bear a greater burden. I don't see how the military is not cut somewhat and some entitlement spending needs to be rearranged. The age of retirement is going to have to go up a little bit. Then there is going to be a long hard look at the rest of the budget and any under-performing services are going to have to go.

It might be a blessing that the GOP is set to take back over, because if taxes do need to be raised, it is going to have to be them. If the Dems are in charge, they will fight tooth and nail to not raise taxes so that the old "Tax and Spend" moniker cannot be used, even if it is necessary. Spineless as usual. It'll be one of those "Only Nixon could go to China" moments.

[dc_x]

If you are looking for fiscal responsibility you must vote Libertarian as you will not find it with the Republicans or even the tea party.

That's the great thing about this election. Everyone is fired up about the debt/deficits, but nobody will throw out any ideas that would put any meaningful dent into it.

This is a fun website where you can look at what it would actually take to balance our budget.

http://crfb.org/stabilizethedebt/

The cuts would be very painful, which is why nothing meaningful is going to happen until it's too late.

[XUglow]

The public is demanding that Washington do something to balance the books. The majority of people want Washington to act responsibility with the money they get. There really is no shortage of money coming in, but there is a shortage of common sense being used on managing that money.

The two sides are littered with people that have different social views. When one side gets elected, they think it is a mandate to make sweeping social changes. That isn't the change that people want right now. Just put the social agenda hammers down for a while and focus on income and outgo. After you get that fixed, you guys can worry about your little pet projects.

When I worked Fortune 500, I was a turn-around specialist. I only went to places that operated in the red. My job was to put them in the black. My days and nights were consumed with managing out-go and increasing income. Our congress needs to get obsessed with managing out-go and increasing income. When somebody comes forward with a pork project to build a bridge to nowhere, the leader of their party has got to say, "Sorry, but this doesn't bring in income or help us manage out-go. Next."

[JimmyTwoTimes37]

We'll see what happens when the 'pubs get back in today, my guess, more gridlock and stalemates.

That's exactly what I think will happen. Boehner and McConnell have both stated they have no interest in compromise. Mcconnell has stated its his goal to make Obama a "one term President".

Who knows though that could just be political text to get elected. We'll find out soon enough if Republicans and democrats are serious about working together,

[bobbiemcgee]

"When somebody comes forward with a pork project to build a bridge to nowhere"......

haha....we've been riding on that sucker for quite a while now and, what 's worst, it is a toll bridge that takes the Taxpayer's credit card with no limit.

[smileyy]

XUGlow -

Unfortunately, government needs to work in the opposite way of private business.

[XUglow]

XUGlow -

Unfortunately, government needs to work in the opposite way of private business.

How so? If Dept. XYZ is spending $1M per day on hotel rooms, you don't think someone should stop and ask, "Why are we doing this? Is it necessary? If it is necessary, can we do it cheaper?"

If I run a section of Social Security, I might come in and say, "OK, let's stop sending money to dead people." Before I cut benefits, I am going to look at waste and overhead first.

If I am collecting revenue, I would think that it would be beneficial to make sure that I am getting what I am owed. Before I increase taxes on the people that aren't paying, I want to put a program in place to get as much money as I can from people that are dodging the system.

I reject the notion that government cannot run more efficiently and get better results at the same time.

[smileyy]

My point is that the government needs to expand and spend during times of economic contraction, to provide services and liquidity that the private sector is currently unable to do; government should contract and save during times of economic growth, as private citizens and institutions are more capable or providing services, jobs and investment at that time.

The government is not, and should not be, a for-profit business. Unfortunately, the popular notion of "My business is downsizing, my personal finances are contracting, why isn't government shrinking too?" is a misguided one.

[Snipe]

That's the great thing about this election. Everyone is fired up about the debt/deficits, but nobody will throw out any ideas that would put any meaningful dent into it.

This is a fun website where you can look at what it would actually take to balance our budget.

http://crfb.org/stabilizethedebt/

The cuts would be very painful, which is why nothing meaningful is going to happen until it's too late.

Too Late! And then we are back on my "Can society collapse?" thread.

I don't think many of them have the balls to do anything about it. Paul Ryan has some good ideas.

We need to raise taxes on the poor and lower middle class. A consumption tax would even get drug dealers who don't report their income. Everyone needs to start paying some tax until things get straightened out. And we need to cut the federal portions of welfare and foodstamps and give some of that money to the states and let them decide what to do with it.

I hope they shut down the government. Life would still go on. Eventually people would start saying things like, why do we need the government?

Free the People.

[XUglow]

My point is that the government needs to expand and spend during times of economic contraction, to provide services and liquidity that the private sector is currently unable to do; government should contract and save during times of economic growth, as private citizens and institutions are more capable or providing services, jobs and investment at that time.

The government is not, and should not be, a for-profit business. Unfortunately, the popular notion of "My business is downsizing, my personal finances are contracting, why isn't government shrinking too?" is a misguided one.

Wow. You are against elimination of fraud, waste, and corruption because they help the economy. Talk about misguided.

[smileyy]

That sound was my point whooshing past you.

[chico]

That sound was my point whooshing past you.

I think the problem is you're arguing theory and Glow is arguing practice. In theory, according to your post, the government should expand during hard times and contract during the good times.

All glow is saying (I think) is that it is sound policy to not waste money no matter what the economic climate is. I don't see how that is such a bad idea. I mean, if you're going to spend money don't you think it should be done responsibly?

[madness31]

Glow is definitely right that you get rid of waste and corruption in any economic situation. The theory that the government spends more in a downturn is also correct, both in theory and practice. They key however is that you get something meaningful for the dollars spent. They need to lead to a competitive advantage for the country or are a necessary expense - sewage pipes, water lines, etc.

Snipe's suggestion to tax and/or raise taxes on the poor and lower middle class would result in another recession. Every tax dollar taken from these people will pull $1 out of the economy because a strong majority of them spend every dollar they make. This tax might also force even more of these people to default on their debt creating further economic problems beyond a decrease in consumption.

I have no problems with a consumption tax instead of income tax but there would have to be different rates for luxury goods and services than on other products. The tax code would again become very cumbersome so it is better to just eliminate all the tax breaks from the income tax and just change the percentages and add a few extra break points ($1M, $5M).

[boozehound]

I have no problems with a consumption tax instead of income tax but there would have to be different rates for luxury goods and services than on other products. The tax code would again become very cumbersome so it is better to just eliminate all the tax breaks from the income tax and just change the percentages and add a few extra break points ($1M, $5M).

Can't it be simplified though? The other nice thing about a consumption tax is that it would reward saving, instead of discouraging saving like our current economic and tax policies have done.

Couldn't we have several 'tiers' of products with different levels of consumption tax? Why would that be so cumbersome? Couldn't you just force manufacturers to 'register' a product when it is first brought to retail and have a department determine the applicable 'luxury tier' at that time? They could base their decision on similar products that already exist.

[madness31]

If the Republicans don't compromise with Obama it will be they who suffer politically. If gridlock leads to another recession, which I believe is incredibly likely, then the public will once again turn away from the Republicans. The public might not be brilliant but at some point you have to realize the Republican obstruction without meaningful ideas is destructive. Polls show the public generally supports raising taxes on the wealthy so if Republicans cause the expiration of tax cuts on everyone to save the rich and it leads to recession they will go down. At the same time if Obama gives in to these demands his presidency is over at the end of this term because his base will not support him.

[waggy]

A consumption tax will never ever happen. That discussion is a waste of oxygen and bandwidth.

[XUglow]

I think the problem is you're arguing theory and Glow is arguing practice. In theory, according to your post, the government should expand during hard times and contract during the good times.

All glow is saying (I think) is that it is sound policy to not waste money no matter what the economic climate is. I don't see how that is such a bad idea. I mean, if you're going to spend money don't you think it should be done responsibly?

Correct. The economy isn't contracting. We just aren't producing jobs right now, and he and I disagree a LOT over how to create those jobs. He is speaking theory. I am dealing with dollars and sense. (Get it.)

[Snipe]

Snipe's suggestion to tax and/or raise taxes on the poor and lower middle class would result in another recession. Every tax dollar taken from these people will pull $1 out of the economy because a strong majority of them spend every dollar they make. This tax might also force even more of these people to default on their debt creating further economic problems beyond a decrease in consumption.

I have no problems with a consumption tax instead of income tax but there would have to be different rates for luxury goods and services than on other products. The tax code would again become very cumbersome so it is better to just eliminate all the tax breaks from the income tax and just change the percentages and add a few extra break points ($1M, $5M).

Half the country doesn't pay federal income taxes. We can keep talking about taxing the rich but the rich already pay a huge proportion of the taxes and most of it isn't spent on their interests. We need to cut the welfare state and we need to get everyone involved in paying taxes. One of the reasons that it is hard to cut government spending is that so few people pay taxes. If everyone paid they wouldn't take likely to the dregs of society around them that wallow on the public dole.

As for consumption taxes, the Fair Tax is actually a progressive consumption tax with a rebate. It isn't that complex and it certainly wouldn't be as complex as the many volumes of the tax code.


Can't it be simplified though? The other nice thing about a consumption tax is that it would reward saving, instead of discouraging saving like our current economic and tax policies have done.

Couldn't we have several 'tiers' of products with different levels of consumption tax? Why would that be so cumbersome? Couldn't you just force manufacturers to 'register' a product when it is first brought to retail and have a department determine the applicable 'luxury tier' at that time? They could base their decision on similar products that already exist.

You wouldn't have to have several tiers, like with the Fair Tax but you could have tiers and it would be easy. Food in Ohio is already exempted as a staple. I don't see anyone freaking out at the check out. It is easy to do and preprogram what goods are taxable and what are not. Cigarettes, gasoline and beer are taxed at different rates. Cigarette taxes pay for children's health care. If more people cared about children they would take up smoking. Smoking a lot not only pays for children, but it helps our Social Security problem when you die. Smokers are patriots.

And the Fair Tax would only tax goods once. If a good was sold used it wouldn't be taxed. That is good for the environment as more people would reduce, reuse and recycle and favor more durable goods.


A consumption tax will never ever happen. That discussion is a waste of oxygen and bandwidth.

A consumption tax will never happen, except in every single state in the Union.

SNAP!

[Snipe]

If the Republicans don't compromise with Obama it will be they who suffer politically. If gridlock leads to another recession, which I believe is incredibly likely, then the public will once again turn away from the Republicans. The public might not be brilliant but at some point you have to realize the Republican obstruction without meaningful ideas is destructive. Polls show the public generally supports raising taxes on the wealthy so if Republicans cause the expiration of tax cuts on everyone to save the rich and it leads to recession they will go down. At the same time if Obama gives in to these demands his presidency is over at the end of this term because his base will not support him.

How many times have you repacked this rant. "Those republicans need to do what the Democrats want, that is the problem".

Just like Nancy Pelosi suffered so much after her first two years of rule, no wait, that was George Bush that suffered. If Obama can't get anything done it will be Obama that suffers. It doesn't matter if shills like you blame the Republicans. Obama will be graded in the next election, not Republicans. Republican won't have the Senate or the Presidency. If things are bad, people won't be blaming Republicans. You are delusional, and this isn't the first time.

Now if Obama gives Republicans a fair shot at passing legislation he has a better shot. The economy will improve and he can take credit just like Bill Clinton did. Democratic Presidents need Republicans in Congress in order to be successful. With Paul Ryan's legislation even Obama could be made to look smart (in all 57 states).

[smileyy]

Elimination of inefficiency and fraud in the government will eliminate millions, maybe tens of millions, maybe even hundreds of millions from the federal budget. Which sounds like a lot of money until you realize that you're talking about a budget of around 2 trillion dollars.

In other words, if you're making $50,000 a year, a systematic process of making sure you don't waste $2.50 isn't going to solve your economic problems.

[Snipe]

Elimination of inefficiency and fraud in the government will eliminate millions, maybe tens of millions, maybe even hundreds of millions from the federal budget. Which sounds like a lot of money until you realize that you're talking about a budget of around 2 trillion dollars.

In other words, if you're making $50,000 a year, a systematic process of making sure you don't waste $2.50 isn't going to solve your economic problems.

So why not eliminate government instead? That could eliminate trillions. Lets start with the Department of Agriculture, the Department of Education. The Department of Housing and Urban Development, and the National Health Institute. Lets cut every Feds pay by 35%, and cut every fed making over 100K by even more. Let's shut the whole thing down.

Screw them.

[smileyy]

Snipe, champion of the short, nasty brutish life.

[SixFig]

No politics chat during a game...c'mon guys!

[GuyFawkes38]

There is so much factually wrong with Madness31's posts that I stopped responding to them.

He still hasn't admitted he was wrong with his belief that medicare would be sustainable if we put medicare payroll tax revenue in a "lock box" (ugghhhh, NOT TRUE....and that's a serious issue that will bankrupt our country).

He also claimed that Keynesian economics isn't about increasing demand but making worthwhile public infrastructure improvements. That's just wrong.

[Snipe]

If the Republicans don't compromise with Obama it will be they who suffer politically.

Democrats control the Senate. They have the Executive office of the President. If something goes wrong, I don't expect people to blame the Republicans. Harry Reid still stands, enjoy him while you can. People around the country don't like him. They won't blame Repulicans. Also, you are a moron on this. Take the blinders off.


There is so much factually wrong with Madness31's posts that I stopped responding to them.

The thing I do like about Madness is that he is sure of his own opinion. That is a great quality in a man, or at least it can be even if you are sometimes wrong.

I do get sick of the parrot reflex that he has in repeating the same argument over and over as if it is novel. I confess I do that myself as well, but he should disguise it better.

I think he really believes that if Republicans just agreed more with Obama that we would all be better off, and that it is Republicans that are holding up this country. That becomes a hard argument after four years of Reid and Pelosi. Maybe all of us should just be like them.

http://gatewaypundit.firstthings.com/wp-content/uploads/2010/10/obama-destruction-e1288188669848.jpg

Our government has a Democratic face in one Barack Obama. It will have a democratic face in Harry Reid's Senate for a six year Senate Rule. I can't see people blaming their liberal tragedy on any Republican.

[XUglow]

Elimination of inefficiency and fraud in the government will eliminate millions, maybe tens of millions, maybe even hundreds of millions from the federal budget. Which sounds like a lot of money until you realize that you're talking about a budget of around 2 trillion dollars.

In other words, if you're making $50,000 a year, a systematic process of making sure you don't waste $2.50 isn't going to solve your economic problems.

Actually, the people that track these things estimate the waste to be close to the $100B level, and that doesn't even begin to tackle the issue in an exceptionally serious manner. It is hard for me to imagine anyone in this country thinking that our government runs at 99.99% efficiency, and yet here you are quoting that level.

[madness31]

Oh Snipe you continue to give Obama credit for deficits inherited from Bush. The first year of a presidency basically comes from the previous president's budget. Yes tweeks are made and I'm sure Obama added a hundred billion or so in spending to what Bush gave him but the bulk of the deficit is from Bush. There is no arguing it, it is fact. The continued deficit is the result of spending programs to keep workers employed (which can be argued as good or bad) combined with lower economic activity created by the banking sector greed. Yes regulators didn't do their job and policies pushing for sub prime lending contributed but the Republican repeal of prior regulation was a also a contributing factor. Both parties helped to create the banking crisis but it was primarily the Federal reserve that enabled it plus greed from mortgage originators to banking executives that created the problem. Until something is done to prevent enormous financial gain from short-term success the economy will be at risk of another systemic crisis.

My post was before the results and I assumed (incorrectly) the Republicans would gain the senate too. Now that they failed to get the Senate, it is likely that the Dems will be blamed for all that is wrong in the world. I suspect the Republicans will put political interests first and allow their obstruction to lead to a recession that turns into a depression. Great for the party but not so good for the country.

Obama is neither the savior nor the problem. He failed to veto the healthcare bill and demand a better product. He failed to spend the stimulus wisely. He has also failed to push for creating government efficiency. There of course is the inaction on immigration and the continuation of the wars. I know I'm repeating myself again but you aparently didn't get it the first 10 times since you seem to think I believe Obama is great. As I have said over and over, I don't like the Democrats. I simply realize they are the lessor of the two evils. Most of my votes this election went to Libertarians as I believe it is stupid to reward failure. Both Republicans and Democrats failed during the last decade. Yes the Republicans had control longer and therefore have proven their failure to a greater degree but I saw enough failure from the Dems to decide to vote for another option.

Snipe, not sure you should be the one to comment on someone's over confidence. Then again only an over confident person would make that claim about another in a public forum.

I know I've pointed out numerous factual errors of yours but haven't seen the same from you. You claim I make them and I likely have made a few but you don't seem to point them out which leads me to believe you just have a problem with my overall view point that Republicans are dangerous. For the record, I don't just make this stuff up. I get it from numerous sources, primarily libertarians but also Republicans and to an even lesser extent liberals. I spend 4 hours a day reading economic and finance and that information tends to come from Republicans and Libertarians. I use the differing opinions plus my own intelligence (or lack there of if you prefer) to form the most sound argument.

These theories don't always hold because the actions of the masses can be very surprising sometimes. The current economic growth is confusing but when you consider investors have become accustomed to a lowering of interest rates by the Fed and direct money printing as a cause of growth they just go out and buy stocks and then spend money as their portfolios go up in value. Combine that with unemployment benefits enabling the unemployed to keep spending plus the jobs saved by the stimulus and you get temporary growth. If the stock market creates a wealth effect for the masses then the growth will even last for years. Of course any significant pullback in the market could cause a panic and have the opposite effect.

Regardless of how long the recovery lasts the end result is still devastation. You cannot successfully print your way out of problems. There is no room to take rates lower and at some point the bond market or currency market voices their opinion in a material way.

The odd thing about Snipe and I is that we generally agree on the most important issue being that deficit spending must be brought under control. The significant disagreement is that he believes the Republicans will actually do it. Aparently decades and decades of history hasn't shaken his belief in this myth. The Republican hero (Reagan) was guilty of shocking deficits (at least shocking at the time). Every Republican since has done the same. I suspect it was the same before as well though I don't have the data in front of me and don't really feel the need to find the one Republican that may have had a surplus.

[madness31]

The unemployment chart is amusing since no intelligent person can blame Obama for the recession given that it started before he took office. Lower corporate taxes might help create jobs but given all the cash on the corporate books it doesn't appear that tax burdens are the fault of continued unemployment. Until demand materializes job growth will remain sluggish.

Job creation in this recovery has outpaced job creation from the past two recoveries but is still low by historical standards. The reason for this is the expansion of debt has reached unsustainable levels and growth will remain slow until their is a healthy economic base. I've seen figures with Bush's unemployment figure over 6% but can't recall the souce or the exact percentage. The figures are all BS anyway since they drop people considered discouraged.

I notice Snipe didn't include a chart of the stock market performance. I suspect that is because he realizes that it is following history and performing better under the Democrats than under the Republicans.

[XUglow]

Lower corporate taxes might help create jobs but given all the cash on the corporate books it doesn't appear that tax burdens are the fault of continued unemployment. Until demand materializes job growth will remain sluggish.


OK. Let's get back to the real world.

My company has built up and is sitting on a large reserve of cash. That cash is going to be divided into inventory, overhead, profits, and taxes in some manner. It is just one pool, so if one segment goes up, there is less money for the other parts. Growth is always a risk, so you try to manage it the best you can, but anyway that you look at it, hiring new people and taking on new inventory puts short-term stress on your working capital.

New taxes and government regulations also take money out of the working capital. My crystal ball shows taxes going up and regulations going up by some unknown amount. Because I don't know the extent of government intervention into my working capital, I am hesitant to do anything other than what I absolutely must do with this money. For the moment, that means no growth and no new hiring.

[Strange Brew]

[QUOTE=madness31;218582]Glow is definitely right that you get rid of waste and corruption in any economic situation. The theory that the government spends more in a downturn is also correct, both in theory and practice. QUOTE]

Dude, put down the Krugman and actually study history. Particularly the market crash of '19. It's strange most people haven't heard much about it........

Also, you've said that you support Libertarians???? How? No Libertarian would preach the Keynesian ideal of gov't Federal or State for that matter involvement in the economy.

Keynes = Fabian Socialist
Socialism = gov't control/political manipulation of business (means of production if you are a Webster's literalist)
Keynesian philosophy/Western Socialism is not, in any way an ideal of Libertarianism

[Snipe]

David Brooks comments on the debt today (http://www.nytimes.com/2010/11/12/opinion/12brooks.html):


Elections come and go, but the United States is still careening toward bankruptcy. By 2020, the U.S. will be spending $1 trillion a year just to pay the interest on the national debt. Sometime between now and then the catastrophe will come.

It will come with amazing swiftness. The bond markets are with you until the second they are against you. When the psychology shifts and the fiscal crisis happens, the shock will be grievous: national humiliation, diminished power in the world, drastic cuts and spreading pain.

Nothing in this past election has averted this disaster. The Republicans talk about cutting deficits, but a party that campaigns to restore the $400 million in Medicare cuts included in the health care law is not serious about averting a fiscal meltdown. Some Democrats, meanwhile, don’t even bother to pretend. Look at the way many Democrats completely rejected the draft proposal unveiled by the chairmen of the fiscal commission. Nancy Pelosi, the public sector unions and many liberal commentators are not only unwilling to compromise to prevent a catastrophe, they’re unwilling to even consider a compromise. They seem to regard anybody who would negotiate as fundamentally immoral and unserious.

The report from the chairmen lists some of the best ways to raise revenue and cut spending. But it comes with no enactment strategy. In this climate, asking politicians to end the mortgage deduction and tax employer health care plans and raise capital gains taxes and cut benefits for affluent seniors is like asking them to jump on a buzzing sack full of live grenades. They won’t do it.

So we continue on the headlong path toward a national disaster. And along the way our dysfunctional political system will leave all sorts of other problems unaddressed: immigration, energy policy and on and on.

A headlong path toward a national disaster.

The collapse will be spectacular.

[madness31]

I generally agree with Brooks comments. There were a lot of good ideas in the proposal but the end result will be a fraud. Obama's new comments about extending all tax cuts will go a long way toward the pending bankruptcy. The tax cuts for the ultra wealthy will not add to economic growth enough to offset the lower tax rates. Expect more Fed money printing. Take advantage of the pullback in silver and gold and add to or initiate positions.

[chico]

David Brooks comments on the debt today (http://www.nytimes.com/2010/11/12/opinion/12brooks.html):



A headlong path toward a national disaster.

The collapse will be spectacular.

It bears noting that the second half of that article sounds a very optimistic tone. He has faith that the American people can put aside political differences and turn this thing around.

I think the Polosi's of the world need to understand that some belt tightening now will pay off later. I don't expect Social Security to be around when I retire (more like if I retire) - it's not a right, but some people seem to think it is.

[smileyy]

it's not a right, but some people seem to think it is.

Well, it's also something that I've paid a hell of a lot of money into.

Social Security is not an entitlement -- it's funded by the same workers it pays out to. We have LBJ to thank for the fact that it has been rolled into the overall budget.

[Kahns Krazy]

Well, it's also something that I've paid a hell of a lot of money into.

Social Security is not an entitlement -- it's funded by the same workers it pays out to..

Based on your first 15 words, I can make a reasonable estimate of how old you are.

[pizza delivery]

great website for facts and figures on government spending. it's like the baseball-reference.com of politics.

http://www.usgovernmentspending.com/

[smileyy]

So, I know where to get $500B a year from for deficit reduction. Seriously, we could cut $500B from the defense budget and _still_ spend twice as much as the next country on the list.


The United States continues to lead the world in defense spending, according to a new report released Thursday by the Center for Arms Control and Non-Proliferation, a U.S.-based non-partisan research organization.

In fact, the U.S. outspends Russia, the next highest spender, by more than 800 percent.

In 2008, the most recent year for which figures are available, the U.S. expenditure was 696.3 billion dollars, followed by Russia’s 86 billion and China’s 83.5 billion.

The U.S. defense budget is 15 times that of Japan, 47 times that of Israel, and nearly 73 times that of Iran.

http://jnoubiyeh.com/2010/05/us-military-spending-far-outpaces-rest.html

[boozehound]

So, I know where to get $500B a year from for deficit reduction. Seriously, we could cut $500B from the defense budget and _still_ spend twice as much as the next country on the list.



http://jnoubiyeh.com/2010/05/us-military-spending-far-outpaces-rest.html

Wow. I don't really know what else to say about that. Do we really need to spend that much on defense?

[smileyy]

From a guy who would might be branded as a left-wing, unserious, why-do-you-hate-America socialist today, Dwight D. Eisenhower:


Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.

http://www.harpers.org/archive/2007/11/hbc-90001660


Then again, all Eisenhower knew was the insignificant conflict of World War II and the menace of Soviet intercontinental ballistic missiles with nuclear warheads aimed at multiple American cities; I'm sure he would have thought differently had he known the True, Unprecedented, Existential Threat of cave-based Islamic Terrorists trying to blow up an airplane or a nightclub once every few years, or the frightening threat posed by the Persian Hitlers (our military budget is only 73 times larger than those expansionist, belligerent mullah-monsters and we're only occupying two of their bordering countries for close to a decade now with hundreds of thousands of troops and other personnel; can you believe how aggressive and threatening they are?).

http://www.salon.com/news/opinion/glenn_greenwald/2010/11/17/gates/index.html

[madness31]

Brew, I'm fine with the government not spending during a downturn because I believe economic downturns are healthy and should be left alone. That doesn't change the fact that government spending does reduce the severity of an economic downturn. The question is whether government spending once they are deeply indebted has the same impact as spending when there is a surplus. It is possible that a certain level of federal debt could cause further business anxiety and delay hiring. This cannot be blamed on Keynes because he advocated surpluses in good times. The debt is the result of mismanagement by both Democrats and Republicans and if you you history as your guide, primarily the Republicans.

Glow, I want to be clear that my comment was about the impact of lowering business taxes and not on the effect raising business taxes would have. If companies already have significant piles of cash then a lower tax rate probably doesn't cause them to hire, unless they believe that will increase demand. A question I have about your comment on not spending money due to uncertainty - do you normally spend money for the business that you don't need to spend? Do you hire workers just to have them around or do you hire them when you have an opportunity to make more money? I understand that increased uncertainty would lead to maintaining less inventory which could impact jobs at suppliers but I would think it wouldn't impact the number of employees at your business. Economic uncertainty might also cause a capital intensive expansion to be put on hold if that uncertainty means a potential significant drop in demand. Is it your belief that if taxes went up on income over $250K by a few percent that it would kill demand to the degree that it would make expansion unprofitable? Or are you more worried about the economy in general because of high unemployment, high consumer and government debt, etc?

[bobbiemcgee]

Buy some Gm tmrw, bail yourselves out.

[Strange Brew]

Brew, I'm fine with the government not spending during a downturn because I believe economic downturns are healthy and should be left alone. That doesn't change the fact that government spending does reduce the severity of an economic downturn. The question is whether government spending once they are deeply indebted has the same impact as spending when there is a surplus. It is possible that a certain level of federal debt could cause further business anxiety and delay hiring. This cannot be blamed on Keynes because he advocated surpluses in good times. The debt is the result of mismanagement by both Democrats and Republicans and if you you history as your guide, primarily the Republicans.

Glow, I want to be clear that my comment was about the impact of lowering business taxes and not on the effect raising business taxes would have. If companies already have significant piles of cash then a lower tax rate probably doesn't cause them to hire, unless they believe that will increase demand. A question I have about your comment on not spending money due to uncertainty - do you normally spend money for the business that you don't need to spend? Do you hire workers just to have them around or do you hire them when you have an opportunity to make more money? I understand that increased uncertainty would lead to maintaining less inventory which could impact jobs at suppliers but I would think it wouldn't impact the number of employees at your business. Economic uncertainty might also cause a capital intensive expansion to be put on hold if that uncertainty means a potential significant drop in demand. Is it your belief that if taxes went up on income over $250K by a few percent that it would kill demand to the degree that it would make expansion unprofitable? Or are you more worried about the economy in general because of high unemployment, high consumer and government debt, etc?

Agree with your sensible first paragraph, except......While yes spending increased under Republican Presidents it has been reduced under Republican Congresses (where spending bills are written) sans Bush's second term. Thus, blaming Republicans for debt spending is somewhat well, goofy. Do you honestly believe Clinton wouldn't worked to balanced the budget (NEVER reduced the deficit BTW) without the strong R Congress?

Also, the largest debt explosions were under the two most recent true Progressive Presidents. First, FDR and Now Pres. Obama. Who both, BTW had VERY liberal/progessive Congresses.

[madness31]

It is a valid point on congress writing the bills but the president has the ability to veto these spending bills. I also agree about FDR and Obama but would add Bush and Regan to the list of huge budget offenders. The Clinton success was less about the congress and more about the Fed creating an economic bubble. That is what makes Bush such a failure. He also had the advantage of an economic bubble and still managed unprecedented defecits. The size of Obama's debt spending is as much about the economic trouble he inherited than it is about his policies.

I don't really want to argue who is worse because both parties are a disaster. A vote for either is a waste of time and harmful to the future of the country. Voting independent is the only sensible vote, until they also prove to be failures.

[DC Muskie]

That new representative from South Dakota is smoking hot. If she could cut the deficit and do it naked, the country and I would feel better.

[bobbiemcgee]

GM volume so far - 260 million shares - 35+ - Snipe will be happy.

[GuyFawkes38]

Interesting graph (from here: http://www.theatlantic.com/business/archive/2010/12/what-happened-to-us-health-care-costs/67288/)

http://assets.theatlantic.com/static/mt/assets/meganmcardle/6a00d8341c66b253ef0147e0453e06970b.jpg

IMHO, doctors deserve the blame. They have too much power and don't care about cost.

[pizza delivery]

I watched "Babies" last night and the American baby was hooked up to 12 wires with all sorts of beeps and what not, the others were basically slapped, weighed, and handed back to mom. Made me think of our treatment of life. Is our obsession with health a reflection of our values or an indication of what we lack? Anyway, this won't solve the debt crisis, sorry.

[pizza delivery]

That new representative from South Dakota is smoking hot. If she could cut the deficit and do it naked, the country and I would feel better.

She may think about it.

http://t3.gstatic.com/images?q=tbn:ANd9GcT7Wm1qNPVGruivDq5Ieub42F5Bi6NF_ aoyoW4p7KCuDl_cAk9PXw

[GuyFawkes38]

Here's an insightful piece of writing on our current debt situation:

http://www.oaktreecapital.com/MemoTree/Down%20to%20the%20Wire%2007_21_11.pdf

It is a terribly depressing situation. Yikes.

The only thing that can really save us is economic growth. In the past 10 years, economic growth has been pitiful.