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This message was last edited by the GM at 00:37, Sat 23 Apr 2011.

The following are 24 more signs of economic decline in America.  Hopefully you will not get too depressed as you read them….

#1 On Monday, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned the U.S. that it could soon lose its AAA rating.  This is yet another sign that the rest of the world is losing faith in the U.S. dollar and in U.S. Treasuries.

#2 China has announced that they are going to be reducing their holdings of U.S. dollars.  In fact, there are persistent rumors that this has already been happening.

#3 Hedge fund manager Dennis Gartman says that “panic dollar selling is setting in” and that the U.S. dollar could be in for a huge decline.

#4 The biggest bond fund in the world, PIMCO, is now shorting U.S. government bonds.

#5 This cruel economy is causing “ghost towns” to appear all across the United States.  There are quite a few counties across the nation that now have home vacancy rates of over 50%.

#6 There are now about 7.25 million less jobs in America than when the recession began back in 2007.

#7 The average American family is having a really tough time right now.  Only 45.4% of Americans had a job during 2010.  The last time the employment level was that low was back in 1983.

#8 Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

#9 According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

#10 Gas prices reached five dollars per gallon at a gas station in Washington, DC on April 19th, 2011.  Could we see $6 gas soon?

#11 Over the past 12 months the average price of gasoline in the United States has gone up by about 30%.

#12 Due to rising fuel prices, American Airlines lost a staggering $436 million during the first quarter of 2011.

#13 U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

#14 Approximately one out of every four dollars that the U.S. government borrows goes to pay the interest on the national debt.

#15 Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

#16 Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.

#17 Average household debt in the United States has now reached a level of 136% of average household income.  In China, average household debt is only 17% of average household income.

#18 The average American now spends approximately 23 percent of his or her income on food and gas.

#19 In a recent survey conducted by Deloitte Consulting, 74 percent of Americans said that they planned to slow down their spending in coming months due to rising prices.

#20 59 percent of all Americans now receive money from the federal government in one form or another.

#21 According to the U.S. Bureau of Labor Statistics, the average length of unemployment in the U.S. is now an all-time record 39 weeks.

#22 As the economy continues to collapse, frustration among young people will continue to grow and we will see more seemingly “random acts of violence”.  One shocking example of this happened in the Atlanta area recently.  The following is how a local Atlanta newspaper described the attack….

    Roughly two dozen teens, chanting the name of a well-known Atlanta gang, brought mob rule to MARTA early Sunday morning, overwhelming nervous passengers and assaulting two Delta flight attendants.

#23 Some Americans have become so desperate for cash that they are literally popping the gold teeth right out of their mouths and selling them to pawn shops.

#24 As the economy has declined, the American people have been gobbling up larger and larger amounts of antidepressants and other prescription drugs.  In fact, the American people spent 60 billion dollars more on prescription drugs in 2010 than they did in 2005.


I know, a lot of subjects, but, always seem when trying to present your way of thinking, you need to lay on more and more examples.

Some of these aren't really issues. For instance, China has been trying to reduce their supply of dollars for a while in part as an attempt to diversify their portfolio and be more competitive with oil countries like Russia. However, yes, overall the outlook is bad. My personal investments rely heavily on minerals, since goods like that don't generally lose value. So far, it's been skyrocketing.

My wife and I have been seriously discussing locations outside of the US to move (right now South Africa is top of the list). Unfortunately, a US depression is a global depression. But my more long-term concern is when the boomers start retiring in mass, it's just going to destroy the federal government. We can't afford for that number of people to retire with so few working people to support them, but any politician who decides to do what's necessary is going to get voted out, and the next guy will just change it back. In a few more years, it's going to be generational warfare. Sure boomers, I'll give you you paid into the system and it would be 'fair' for you to get your money back; but you also elected the guys who raided that piggy bank. You got your value for your money already. Unfortunately for you, when retirement comes, it's either going to be worthless because the government cut it, or because there's no one left working in the country to support you.

I'm just praying the singularity hits before 2050 :P

Not sure I would look into South Africa at this point, they just passed a law that says that animals, plants and insects have the same rights as Humans.  I also don't care for the "If I have a need and you have, I can take because I have a need" approach.  If you leave your house, and you come back and find me in it, you can't get rid of me because I have a need for a house and you were not using it when I first got here.  Now we get to be room mates, I get the place for free.

Only brought that up as my opinion of SA.

As for economy, those products you say that are rising, this isn't due to them rising prices.  They are going up because the strength of the US Dollar is collapsing.  The dollar is worth less then it was 10 years ago.

I don't know where you got that first bit from. I thought that was somewhere in Europe.

Regardless, if you're looking for growing or stable economies, it's a pretty short list:
Brazil - neither of us speak the native language, we'll stick out, and it's a disagreeable climate for us
Russia - as above, plus it's basically a mafia-run state right now
India - As above, plus it's very crowded and politically threatened by Pakistan and resource crunches
China - really? No.
Australia - Government seems a bit too conservative/nanny state for me, plus if/when global warming hits, they're going to be really suffering
South Africa - Speak English, good food, good climate, plenty of white people, burgeoning economy. On the down side, crime and political instability in its neighbors.

Eh, wrong about the bug thing in South Africa.



As for the other part, I post the links for Dr. Vieth in the religion section.  He talks about it as he lives there, you just have to go through his videos which is about a week of stuff to watch if you have a week to waist and do nothing else.

Questions I would like to ask some one who thinks the economy is recovering.  These are not my orignal thoughts but I found they had merit to turn around and ask.

#1 During the 23 months of the “Obama recovery”, an average of about 23,000 jobs a month have been created.  It takes somewhere in the neighborhood of 150,000 jobs a month just to keep up with population growth.  So shouldn’t we hold off a bit before we declare the economic crisis to be over?

#2 During the “recession”, somewhere between 6.3 million and 7.5 million jobs were lost.  During the “Obama recovery”, approximately 535,000 jobs have been added.  When will the rest of the jobs finally come back?

#3 Of the 535,000 jobs that have been created during the “Obama recovery”, only about 35,000 of them are permanent full-time jobs. Today, “low income jobs” account for 41 percent of all jobs in the United States. If our economy is recovering, then why can’t it produce large numbers of good jobs that will enable people to provide for their families?

#4 Agricultural commodities have been absolutely soaring this decade.  The combined price of cotton, wheat, gasoline and hogs is now more than 3 times higher than it was back in 2002.  So how in the world can the Federal Reserve claim that inflation has been at minimal levels all this time?

#5 Back in 2008, banks had a total of 27 billion dollars in excess reserves at the Fed.  Today, banks have a total of approximately 1.5 trillion dollars in excess reserves at the Fed.  So what is going to happen when all of this money eventually hits the economy?….

#6 If the U.S. economy is recovering, then why are shipments by U.S. factories still substantially below 2008 levels?

#7 Why are imports of goods from overseas growing much more rapidly than shipments of goods from U.S. factories?

#8 According to Zillow, the average price of a home in the U.S. is about 8 percent lower than it was a year ago and that it continues to fall about 1 percent a month. During the first quarter of 2011, home values declined at the fastest rate since late 2008. So can we really talk about a “recovery” when the real estate crisis continues to get worse?

#9 According to a shocking new survey, 54 percent of Americans believe that a housing recovery is “unlikely” until at least 2014.  So how is the housing industry supposed to improve if so many people are convinced that it will not?

#10 The latest GDP numbers out of Japan are a complete and total disaster.  During the first quarter GDP declined by a stunning 3.7 percent.  Of course I have been saying for months that the Japanese economy is collapsing, but most mainstream economists were absolutely stunned by the latest figures.  So will the rest of the world be able to avoid slipping into a recession as well?

#11 Next week, Republicans in the House of Representatives are going to allow a vote on raising the debt ceiling.  Everyone knows that this is an opportunity for Republican lawmakers to “look tough” to their constituents (the vast majority of which do not want the debt ceiling raised).  Everyone also knows that eventually the Republicans are almost certainly going to cave on the debt ceiling after minimal concessions by the Democrats.  The truth is that neither “establishment Republicans” nor “establishment Democrats” are actually serious about significantly cutting government debt.  So why do we need all of this political theater?

#12 Why are so many of our once great manufacturing cities being transformed into hellholes?  In the city of Detroit today, there are over 33,000 abandoned houses, 70 schools are being permanently closed down, the mayor wants to bulldoze one-fourth of the city and you can literally buy a house for one dollar in the worst areas.

#13 According to one new survey, about half of all Baby Boomers fear that when they retire they are going to end up living in poverty.  So who is going to take care of them all when the money runs out?

#14 According to the U.S. Bureau of Labor Statistics, an average of about 5 million Americans were being hired every single month during 2006.  Today, an average of about 3.5 million Americans are being hired every single month.  So why are our politicians talking about “economic recovery” instead of “the collapse of the economy” when hiring remains about 50 percent below normal?

#15 Since August, 2 million more Americans have left the labor force.  But the entire period from August to today was supposed to have been a time of economic growth and recovery.  So why are so many Americans giving up on looking for a job?

#16 According to Gallup, 41 percent of Americans believed that the economy was “getting better” at this time last year.  Today, that number is at just 27 percent.  Are Americans losing faith in the U.S. economy?

#17 According to the U.S. Census, the number of children living in poverty has gone up by about 2 million in just the past 2 years, and one out of every four American children is currently on food stamps.  During this same time period, Barack Obama and Ben Bernanke have told us over and over that the U.S. economy has been getting better. So what is the truth?

#18 America has become absolutely addicted to government money. 59 percent of all Americans now receive money from the federal government in one form or another. U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes. Americans hate having their taxes raised and they hate having their government benefits cut.  So is there any hope that this will ever be turned around before disaster strikes?

#19 The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011.  How in the world is the U.S. government going to be able to afford to guarantee all of that debt on top of everything else?

#20 If the U.S. national debt (more than 14 trillion dollars) was reduced to a stack of 5 dollar bills, it would reach three quarters of the way to the moon.  The U.S. government borrows about 168 million dollars every single hour.  If Bill Gates gave every penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.  So how in the world can our politicians tell us that everything is going to be okay?

In reply to spoonk (msg #7):

Only Joe Biden thinks the economy is recovering.  Every other Democrat is just lying that they think the economy is recovering.

Bear in mind, economics relies heavily on predictions. It's just like the weather. If there's a dry, warm front coming in from the south, your weatherman may say it's 'clearing up', even if it is raining at this moment.

In reply to katisara (msg #9):

So?  By any standards you have to be a piss-poor weatherman/economist not to see that this economy is far from recovering.  Tell me, by which indicator would you judge the economy as improving?  Lack of inflation?  No.  Jobless claims going down?  No (BTW: they just revised the government stats that last week showed a job gain to a 15,000 job loss).

When I find a weatherman who only gets it right about 1% of the time I switch to a different weatherman.

I'm interested in trying to figure out how jobs are created.  I assume that, for jobs to exist, there has to be work that needs to be done, and an entity with the means to create jobs and a desire to see the work done for the jobs to be created.

In reply to Sciencemile (msg #11):

To put it simply, to create jobs, industry, not government, must grow and people must invest.  Industry isn't growing and people are not investing.

That raises more questions than it answers.

What is industry?  What is government?  What is the difference between these entities?

What does it mean for Industry to "grow", and how is it accomplished? (also, same question, but concerning Government)

With what are people supposed to invest?  How do they get it?  What are they supposed to be investing it in?  What qualifies as investing?

In reply to Sciencemile (msg #13):


Like to help but I don't have the time to define every detail.  I thought you just wanted to know how jobs are created, not Econ 101.

Have a good day.  I'm out yo!
This message was last edited by the GM at 11:40, Sat 28 May 2011.

Moderator post:

Tlaloc, please don't directly insult the knowledge of other users on this forum. It's suffice for you to say 'that is a very complex topic I don't have time to go into' without accusing him of abject ignorance.

I would appreciate your editing the post to make it a touch less confrontational.

Thank you.

To answer the question ... A big part of it is what is coming in vs. going out of the economic ecosystem, and how fast that money is moving WITHIN that ecosystem.

To illustrate the first, imagine you have an insulated community with 10 people. You start paying your 5 employees 50% more. They now have more money to spend on things like better food, chairs, cars and so on (so they do). That gives more money to the farmers and chair makers, who then have more money to spend on whatever you're selling. The downside is that it creates inflation. While the chair maker can hire more people to keep up with demand, the farmer only has enough acres and cows to grow 9 steaks a month (from the steak tree, you know). So the 10 citizens who want steak are caught in a bidding war, which drives up price, which means that if you're the 1 guy who couldn't afford steaks before, even doubling your salary, you probably still can't afford steaks.

I don't know the details on how increasing the money flow filters into increased wealth vs. increased inflation. A big part of it is capped by production and consumption. If everyone already has 20 chairs, paying everyone more won't help them buy more chairs. Similarly, if you're capped at 9 steaks, paying everyone more won't help the poor get more steak. However, at least according to Keynes, in situations like the Great Depression, this sort of thing does ultimately kick start a strong cycle of work, puts trust back in the system, and gets that spending going.

The second party is the money going in and out of the ecosystem. Imagine our little community likes Japanese stuff, so everyone has a Japanese car, television, chair, rice cooker and so on. If I increase the pay to my employees, they don't spend their money on local chairs and steaks, they send it to Japan to buy THEIR chairs and steaks. And if my community isn't competitive, for instance it costs us $20 to make a chair and it costs $10 to make one in Japan, no one is buying our chairs so no money is coming in. Money drains out of the community and eventually everyone is poor.

That's the big problem with the US. You can't hire manufacturing jobs here - people who work at plants still want a 40 hour work week, health care, a house, a car, a television and steak once every two weeks. That's expensive. A worker in China wants not to be beaten. If our workers are not willing to reduce their salaries to be competitive with the Chinese, all else being equal, our cars will not sell outside of the US, they won't be able to make any profit, and ultimately can't stay in business.

That's also the problem with government programs to make jobs. Sure, you can pay someone $20 to dig a hole, but it's not bringing any money into the community. Most of the solutions as of late have been focused on the first solution (make money move faster) and not on the second (make money move faster - into the US). To a degree this is justified - people don't spend because they're afraid, and so that's depressing the economy. But over the long haul, it's not the big issue.

So, in theory, industry is a business that produces a good or service with the purpose of making profit.
Government is an organization with the ability and responsibility of regulating the country, and usually makes money from taxing industry and individuals, and does not create a profit.
Industry grows based on a number of metrics, including profit, production and number of employees and assets.
Government grows based on its spending and number of employees and assets.
Investing means taking any resources (normally money) and making it unavailable for use, with the intention and hope that it will become available for use again, with a positive interest.

In reply to Tlaloc (msg #14):

It's necessary to define your terms if you have any intent of trying to come to a conclusion of any lucidity.

I took Micro and Macroeconomics in College, but that's no guarantee that I have any idea what you're talking about, or any guarantee that you're meaning what I'm thinking of when you say that.

Because if I have to rely on my understanding of the terms, then you're incorrect when you say growing Government can't create jobs.  See the problem now?
This message was last edited by the GM at 20:40, Fri 27 May 2011.

In reply to Sciencemile (msg #17):

Whatever.  Look over some of your questions and ask yourself if it is reasonable to ask for a definition of everything.  My days in debate are over and I don't feel like debating the definitions of everything that is generally well known.

As for this:



That was my mistake.  Government CAN create jobs.  What I meant was that government can't create wealth.  It only redistributes the wealth that already exists.

Also, as the moderator points out.  My last post can be construed as insulting your intelligence.  It is not.  I was just surprised that I am tasked with supplying a definition of every single term, like "government" and "industry".

I have no problem with correcting/clarifying what I have said, as shown above, but, like I said, I have not the time for long-winded explanations of the world of economics.

So I apologize for any miscommunication and wish you all an excellent weekend.

Sure the government can create wealth. The national power grid, the satelite communications industry which arose from NASA, the netional highway system which drives our industry all contribute to the wealth of the nation.
Saying governemnt can't create wealth because it relied on taxes is like saying business can't create wealth because it relies on paying customers.
What cannot create wealth is beuracracy, and 'private' companies being paid by teh government just add levels of beuracracy and cost to create wealth you have to be doing something productive. To create wealth *efficiently* requires a free market incentive, but when businesses make their money through financial games and conning customers while being protected by those who have decided that 'industry' must be protected even when it isn't really industry then what you have is a criminal class masquerading as business, and that is a sure way to destroy the economy.

And FYI, I do believe that the economy is recovering, it is simply a long way from recovered. I actually hope we don't "recover" to the point we were at before teh collapse, where essentially teh whole economy was a bubble, but instead find a way to have moderate and sustainable growth.
Our economy is recovering from the excessive of the Bush administration the way an addict recovers from addiction, which may not always seem to the addict like it is better than continuing to use.

In reply to silveroak (msg #20):

Oh please.  Bush didn't create the housing bubble.  Clinton authorized the securitization of CRA loans containing subprime mortgages.  The first public securitization of CRA loans started in 1997.  Bush wanted to reign that in and nip it in the bud but Frank, Dodd and the other Democrats screamed that he didn't want black people to own homes.

As for government creating wealth: the power grids create wealth because power companies create those and are private.  Heavily regulated but still private.

Taxes and Customers: You seem to miss the fact that you can't choose which government to pay taxes to.  Therefore the government can, and consistently does, supply inferior products and services with no recourse for the taxpayer to penalize the government.  Next tax season, tell your accountant you wish to give your taxes, if you pay them, to a competitor.  And there lies the difference and that difference is the key.

It wasn't private enterprise that created this crisis.  It was government intervention in private enterprise that created it.

Regardless as to the causes, presidents benefit from bubbles. If I'm president, I want to ride the bubble through my term (for it to pop in my successor's term). Rich people are happy people and more likely to keep you reinvested.

Countries naturally rise through 'levels' of produced wealth, from resource gathering, production, services and design. I'm wondering if the US is going to be making most of its wealth from services and design, or from con games. I wouldn't mind considering capital punishment for people who cheat old ladies out of their retirement money and leave them to starve on the street.

A service economy has its down falls.  What money do they bring in, when they are buying all their goods from out of their local area?  If they are not producing, doesn't that just lead to the Example Katisara had given?

Also some one had mentioned that Americans are not willing to work for less.  I agree, I'm not about to lower my standard of living just so that some other country can make the wealth off their slave labor citizens.  Should any 1st world nation, lower their standards to become on par with the rest of the 3rd world civilizations all for the sake of being fair?

Yes, service economy does 'bring in' money. Remember that time too is a resource. My wife is a wedding photographer and I can assure you, she produces plenty of value. However, service is oftentimes the first thing cut during lean times.

As for the latter ... in  economics, you're worth what you can convince people to pay. Sure, you don't have to lower your standards of living, but if you're going to keep those standards, you need to increase the value of what you're producing (or you will have no standard of living whatsoever). Adapt or die, as they say.

I'm not ignoring teh lack of competition in taxation, I ma pointing out that all economic relationships are interdependant. Governments don't create wealth through taxation, they build wealth by developing infrastructure. I cannot choose which government to pay taxes to, nor which (privately owned) utility to buy my electricty from. I cannot choose to drive on a competitors highyway system, or to benefit from an alternative police force's security.
The idea that government=bad and business=good is harmfull and false dichotemy. Sure the free market is better and more effecient that state run institutions, but as I mentioned above with utilities, being a corporation is not teh same thing as being a free market entity. If I set up a wind generator I am not free to sell the power it generates to anyone I please, because a private company owns and operates the transmision lines and becomes a monoply for power. Once you get into teh question of private monopoly versus government monopoly the benefit of teh market disappears and in some cases the government may be the better option, as their primary goal is to keep people happy (and get their people re-elected) where a for-profit company's motivation is to bleed all the profits out of people they can manage.
And again- this only aplies where the free market does not operate, namely under situations of natural monopolies.
And once again it comes to the point that government can create wealth, just not as effeciently as a free market. If we were to move 10% of the money currently spent on the military or on social programs into building our infrastructure the wealth of this country would skyrocket.

God forbid America stops fighting in a country we don't really need to be in, and should have never been in the first place.  We wouldn't bankrupt our selves otherwise.

Which one are you talking about?
Afghanistan we certainly did need to go in- not sure if tehre is still a reason to be tehre aside from ensuring a peacefull transition to local powers, though by now that should be fairly close to complete.
Iraq we did need to go in- in 1992. Unfortunately Bush Sr decided that we should stop at teh border and waste billions of dollars establishing a no fly zone. At that point it became necessary to finish the job in the early 200s to free up military resources for the real conflict in Afghanistan. However that turned out to be badly mishandled as the war in Iraq bogged down due to badly defined objectives.
Libya, we aren't technically in Libya, we're just lobbing bombs at teh side we don't like. It would probably be better if we did go in, provide some training and assistance to the side we support (though the CIA may already be doing this...) and get the conflict over with instead of dragging it out.

Afghanistan:
You are right, we did have a reason to be there.  We had to provide soldier support to guard the opium crops, even escort them to Pakistan and take the stuff to port.  We had Gem and gold mines we had to secure, we even had oil we needed to claim.  Also lets not forget the fact that locals liked communism so much that when you talk to them, they tell you they wish you were never there in the first place because they miss having a home and a car.  They are also mad at you because you gave them money and weapon to get rid of the Russians and then when they did, you cut off all funding and they decided into a lawless religions radical society.

Iraq:
Right, we were making plans in October to invade Iraq a month after 9/11.  But first we needed to get a good staging point set up, Afghanistan was a perfect place to support such an operation and since it had already started, why waist the opportunity.  What he was doing though was he had his own economy going and wasn't letting the IMF open a bank there.

Libya:
You do realize that the "rebels" are Al-Quadia right?  How is it we are fighting them in Afghanistan, but training them in Lybia?  Also Gidafi might be crazy, but his largest issue is he was using his oil money to improve his infrastructure, and was actually building a water connection for an under water aquifer which would make the country self reliant.  Why is it as soon as the rebels had a hold of their first city the IMF opened their first bank branch there, ever?  We have no business in any of these countries.

Afghanistan I am refering to 201 -2002 immediately after teh Taliban sent government trained Al-Quaedia terrorists to engage in an attack on US soil. I hope that qualifies as a just cause in your book.

Also Afghanistan makes a stupid lousy 'staging area' for invading Iraq since there is no common border between them

And no, the rebels are *not* LA-Queda. That is a Fox News rumor which ahs been thoroughly debunked.

I don't get my news from Fox, so if that was a rumor they were spreading, I wouldn't know.  I gave up on all main stream media a long time ago.

I believe that it wasn't Al quadia who attacked new york, I think it was our own us government and just used al-CIAda as a cover.  But that is just my own belief there.  A bunch of people living in caves could not have organized all the events that happened on that day.

Now as for Afghanistan being a poor place to use as a staging area.  Since I suspect you of being a CIA operative your self I can't get into to much details.  But I can tell you I spent my 6 years in the military, and only left service because of a injury.  I was an 88N which was, in the civilian world.  A Transportation Coordination and Management Specialist.  Just a long fancy name for a pencil pusher.  I was assigned to 1st TMCA  pronounced (tam-ka).  On Kleabor Kasern in Kaiserslautern (K-Town) Germany during 9/11 up till 2003.  While there I had a TS clearance and worked in the Vault, which was 21st Theater Support main operation center used for coordinating all logistics in and out of Europe and into the sand box.  This section was called TMCC or Theater Movement Command Center.

Any ways, Afghanistan made perfect seance as it was already being invaded to fight the terrorists.  We would ship every thing by boat to Pakistan, truck the stuff by Jingle trucks to Bagram Air Base in Afghanistan.  Then Send the stuff via C-17 to Iraq once we had Bagdad International Air Port under our control.  A C-17 can hold twice as much cargo then a C-130, but needs even less runway to do it with.  Pull up Google earth and look up Bagrum Afghanistan.  You will see the massive amount of space and yards dedicated to Conexes.  20 and 40 foot longs.  The 20's can easily hold a Humvee in them.

Me in Afghanistan
http://i41.photobucket.com/alb...ar-Koon/DCP_0674.jpg

Me with my MCT (Movement Control Team) Arm Band.
http://i41.photobucket.com/alb...-Koon/DCP_0548-1.jpg

One Container Yard
http://i41.photobucket.com/alb...ar-Koon/DCP_0489.jpg

Jingle Truck 1
http://i41.photobucket.com/alb...ar-Koon/DSCF0264.jpg

Jingle Truck 2
http://i41.photobucket.com/alb...ar-Koon/DCP_0693.jpg

Its not that hard the US the government just has to and have its citizens get used to a lower standard of living and less things they don't really need, downshifting to the new global economy.

Example factory workers will have to accept lower wages and benefits or not work but as I see it if they make $14 an hour for 30 hours a week with some benefits its decent money after taxes. A couple could earn just under $35,000 a year which is over the Federal poverty line for a family of four. One can live on that in most communties that would have these which are often suburban or smaller cities easily enough.

The nation though needs to focus on getting jobs here I have an idea require under national law at least half the products components be made IN the USA if the wholesale price to stores is over $10 a unit. Or the company faces a impact tax on the goods (making that high enough to make importing them not competative to a company making a item wholly in the USA). This tax paid by the buyer of the goods not the exporter so its not a tariff its a penalty on the buyer for not getting goods complying with the law.

The largest issue you have to keep in mind about trying to price things are subsidies.  Being experienced in teh field of Transportation for 10 years.  It is not cheap to transport things long distances at all.  Why is it a steal plant in Detroit couldn't sell steal to the auto factory on the other side of town?  Well Because the Auto Factory was buying its steal from Asia.  Wait a minute how is that cheaper?  Well their own government pays the company's transportation fees via subsidies.  Asians have a different Economic plan then Americans do.  They will sell their products dirt cheap, even if they are loosing money on it.  Once the competition goes belly up, then they raise the profit margin.  They make up for this for charging more with some other kind of product they have that is in demand.

Why ship to Afghanistan when we have already establishd a military presence in Saudia Arabia and Kuwait? Who do have borders in common with Iraq. It's not a matter of being in teh CIA, it's a matter of knowing geography.

Basically, this keeps people from investing their money into items that actually are worth something.

Seeing as it's partially related to the subject of metal training, I've always been curious about something. I've never been very strong at understanding economics (and, from the sound of things over the past few years, it doesn't seem like many are, including economists), but I know there's a lot of push in some crowds to made gold a primary investment, or the standard for our economy.

I just want to know why. Not just about the Gold standard, but why Gold period? What makes Gold valuable to society, aside what we artificially decide it's worth, seemingly on prestige and ascetics alone? You can't eat it, it doesn't improve one's quality of life in any direct manner, it's too soft a metal to be used for most constructive purposes, and one of it's useful qualities, it's high conductivity, is outdone by other, less rare metals. So, why exactly is it valuable? If the world really is going to ruin, why would I want it?

Chrysophilia, it's pretty common throughout various cultures and religions.  There isn't really any reason other than people want it, so it's valuable, so people want it because it's valueable...etc.

The mentality that gold has some intrinsic value is silly.  In the end it's just the same as Fiat currency, only with more redundancy.

There was a really bad movie awhile back called Battlefield Earth, which had the Aliens taking over the planet to get our Gold...that there are people who don't find that motivation ridiculous don't really understand the difference between currency, money, and wealth.

By the way, Spoonk, where did you get that E-mail?  I'm not sure where in Dodd-Frank Act it says that you won't be able to trade gold/silver over the counter.  It covers a lot, though, and I'm not really getting much out of searching online other than blogs repeating the email.

I had my doubts initially that it was a real email, but I've verified it as best as I could.  Below is my conversation with a representative on Forex.com:

Sounds like a hoax by financial guys upset over the fact that the government is enacting legislation to actually make them accountable for their many, many financial crimes; the only sites I can find mentioning it are blogs or forums.

It would seem to me that someone in the company misread a section

The reason we use a fiat currency like dollars or euros rather than tying it to gold is that fiat currencies permit more control. We can expand or restrict the money supply, set rules on its use, track it and so on.

The reason we would like to use gold as a currency is that it limits our control. We can't unreasonably expand or restrict it, set rules on its use, track it and so on.

Fiat currency in the hands of a responsible and knowledgable government is a great tool. Fiat currency in the hands of a government that is ignorant, or in the pocket of a few banksters, runs the risk of toppling the entire country for the profit of a few.



There are a few measures you need in any currency;
It must be small enough to carry
It must be divisible
It must be testable (to verify it's real currency)
It must have limited supply
It must be difficult to counterfeit
It must be easily recognizable
It must have a long shelf life

Ideally, it should also be attractive to look at, and have some cultural or political backing.

As you can see, gold matches all of these, while something like corn, toilet paper, gravel and so on do not. In fact, there's only a handful of things that meet all of these requirements (and most of them are mineral).

Another interesting example is bitcoins, which also meet all the criteria.

Personally I'm not sure that gold is sufficiently divisible anymore to be usefull for commerce. Imagine the size of gold coin you would need to buy a pack of gum (about 1/350th of an ounce!). Silver would make a far more reasonable medium of exchange.

The conversion was 15 silver pieces to 1 gold piece.  One of the advantages of hard currency is that you can't tax the use of it.  Right now, the us FIAT currency has it so that every 4 dollars are printed 5 dollars are owed to the bank in return to pay off the use of the currency.  Before the Federal Reserve, the country could create money with out an interest on it if it needed to do so.  With Fiat money, you can create money out of nothing.  And since it has no perceived value, inflation happens when they do that.  Like right now we are coming to the end of QE2 Quantitative Easing.  This is where billions of dollars are added to economy.  QE3 is about to start.  It is based off the trickle down effect.  Give the rich more money and they spend more which the money finds its way down to the lower income areas eventual.

Yes, this does find its way down, after a good amount of time.  When a QE first goes into effect the bying power is strong so those who got the money first get the best effects.  but by the time it does work its way down, inflation has happened, so the money has very little value.  Look at the rice of groceries.  This is the effect of inflation.  The dollar has been weekend by the flooding of the market with paper that has no value behind it.  And the US Dollar is not based on the gold standard.  The only thing that backs the dollar is the full faith and credit of the US people.

As for the question of where I got the email from.  I copied and paste it from Alex Jones as he deals in the valuable metal and deals with the dollar as little as possible.  www.infowars.com

He also believes white lines left by planes are chem trails and that fluorine in the water is put there by the New World Order to kill people or some stupid crap like that.

The fact that when I looked for the email the only places it appeared were on things like Infowars made me highly suspicious; Infowars is a site where every crackpot conspiracy theory gets touted as fact, and if you disagree you're part of the Illuminati New World Order Reptilian Jew-Kings.

I believe we've had this discussion before regarding the Federal Reserve; this "Interest" is simply a formality which gets rebated at the end of every year.

http://www.famguardian.org/Sub...onspire/interest.htm

I am one of those crack pots I guess.  Still, the info was proven to be true in your own research.  I have always found the info provided reliable with other sources to back it up.  As he links all his material on where to find the stuff.

I don't want to get drawn into a "The fed is evil" debate, but do feel a need to point a handful of small points here that I disagree with.


I'm not really sure that's true, at least not in anyway that's not also true of fiat currency.


Isn't part of the appeal of hard currency that the government can't just create money when they need it?  I may be misunderstanding what you mean here.


I'd disagree that it has "no perceived value," since if that was the case, no one would use it.  No one would take it in exchange for goods if they thought it had no value.  I can agree that creating more money reduces the perceived value of the money in circulation, but not to zero.  Also, since the population is increasing, a constant supply of money would lead to the value of money ever increasing, which has its problems too.  Creating money as the population using it increases can balance these two forces a bit, and keep values from changing too rapidly one way or the other.  Of course, it can also be done very poorly and make things worse.  But I'd argue that the potential for inflation isn't necessarily a bad thing (or at least no worse a thing than the potential for deflation that occurs with a hard currency and a growing population).


If you don't think it has much value, I'll happily take it off your hands for you! ;)


Disagree with you here.  Inflation is actually lower now than the government considers optimal.  The increased price of many groceries isn't due to inflation, but rather due to basic supply and demand:  More people eating a smaller supply of food.  More people because there keeps being more of us, and the percentage of us around the world that are wealthy enough buy groceries is increasing.  And a smaller supply of food because there's been some crop failures/low yields/etc. the last year or two, and because a good deal of US corn has been used to produce ethanol rather than food.  I guess also there's more people wanting to eat meat, and meat production uses up grain.  That's not to say the rising price of food isn't something to be concerned about, just that it's a supply and demand issue, not an inflation issue.  Prices can change from multiple reasons, not just the monetary policies of the government.

I think spoonk is referring specifically to inflation, which has been called the 'invisible tax'. And in that regard, it's true. If I'm the government and I collect $1m 'old bills' for destruction, and produce $1.5m new bills to put into circulation, I'm creating more currency - but not more wealth. That means I claimn a higher percentage of the country's wealth, at a penalty shared by everyone else who carries that currency.



You can't really do that with gold because, as much as we dig, we're still only pulling up a little bit of gold every year, and the reward for finding that gold about covers the actual work done in mining and refining it.



I like when people attribute quotes they disagree with to me by default :P



I'll happily share the $10 that, in my parents' day, could buy enough gas to drive clear across the country.

Gah, sorry katisara!  You seem to be permanently stuck in my copy-and-past buttons! All of those should have been quoting spoonk, obviously.

http://mises.org/daily/3663

Inflation by that method is just as easy as with fiat currency; we take 1m worth of gold coins to be melted down, reduce the purity, and come out with coins representing 1.5m worth.

Or simply put, you change the amount of gold each notary can be traded in for; if they need to make more money, they can double the amount of money by halving the exchange amount of the currency.

Or they can just cheat, and print more money than there is gold.

Any regulation you could put into place preventing this could just as easily be put in place for fiat currency.

I am one of those crack pots I guess.  Still, the info was proven to be true in your own research.

It wasn't. The email you provided doesn't match the reality of the legislation.

This is something that is equally testable, with a home-kit. It also happened previously between (if I recall correctly) Spanish and French currencies. People would sell the more and less pure gold currencies, melting down the one and buying the other. The result is, eventually, countries are forced to not respect the stated value of the impure version (assuming they do in the first place). After all, if the US sent a stack of cash to China of $500b Canadian dollars, China would appraise it based on the value of Canadian dollars, not American dollars.

But yes, if your government starts selling 4 karat gold as 8 karat gold and you choose to accept it at that value, you will be losing the value of your currency through inflation.

not sure where you get your economic info there spoons, but I find teh current price of gold at $1539.30/oz and silver at $35.94 an ounce, which puts the current ratio at 42.8 to 1. I can also recall durring the 1980s when Gold was $350 an ounce and silver was $6 an ounce, so the ratio basically hovers arround 50:1, not 15:1.
Meanwhile a $2 pack of gum would require a .0556 oz or 7.89 Carats of silver, and would be .00129 oz or .184 carats of gold

I was speaking old days, when gold was used and paper money wasn't used.  When the Gold standard was created, and so money was based off of that.  At this time, silver no longer was tied to it.

  But yes, if your government starts selling 4 karat gold as 8 karat gold and you choose to accept it at that value, you will be losing the value of your currency through inflation.

Chose? Would you really have a choice in that matter? And if you did, would enough people choose not to accept it to make a difference?

Wall street has put out a list of companies that are likly to close up shop this year.  Here are the top 10.

1. Sony Pictures
2. A&W
3. Saab
4. American Apparel
5. Sears
6. Sony Ericsson
7. Kellogg's Corn Pops
8. MySpace
9. Soap Opera Diges
10. Nokia

As for my own little remark, if you work for these companies, it might be a good idea to start looking around.

Wow, I'm a little surprised. Sony pictures?

Out of curiosity Spoonk, what's your source on that?

It would seem my grudge with Sony may be reaching it's zenith...

A Few different sources

http://xfinity.comcast.net/sli...r2012/sony-pictures/
http://specials.forbes.com/article/0aKq4ujgTy1pl
http://www.eons.com/groups/top...Gets-to-Ride-?page=1
http://sweetiesreviews.com/som...o-disappear-in-2012/


I could keep listing more.

Here is a video that does a good job of explaining the basics of how money is created in America.  It is 30 minutes long though.
http://www.youtube.com/watch?v...&feature=related
This message was last edited by the player at 04:00, Sat 25 June 2011.

Oh, it's just brands, not the whole Corporation, then.  A&W is a brand for a specific chain of franchises owned by YUM! Foods.

So they're trimming some subsidiaries.

A&W and Saab were all independent at one point, before they were bought out.  Now they are being jettisoned.  Instead of looking at is as a company that goes under, it view as only an asset.

Some how the word Brand sounds better as if there is no loss.  But using the logic that they belong to larger corporations, wouldn't that mean the so called competition is owned by a monopoly?

Nah, there's plenty of competition still, not a monopoly.  I know quite a bit about fast food restaurants ;)

You see, there are three major companies, you got the Pepsi-Co, the Yum Foods, and the Dr. Pepper Snapple Company.

You can usually tell which companies own which franchises because (with the exception of the third one, who seems to have a deal with the two companies), they usually only have the brand of soda owned by the company that's owned by the larger corporation.

But smart entrepreneurs know there's plenty of leftover market share that doesn't take much effort to scoop up.

Of the companies currently local to me, we have the independants Jones Soda, RC Cola, and Shasta Cola.  You have the Store-owned brands Safeway Select, Sam's Club, and Western Family.

I'm sure if I had been out to the store more often, I'd have more to mention.

Some unaffiliated to the big three (to the best of my knowledge, and not counting the soda deals) but still very popular fast food joints

Jack-in-the-Box
Happy Teriyaki
Subway
Arby's

Well, that's all I could think of at the moment.  Was going to throw in The Keg, but that's a sit-down restaurant chain.

You know you're geolocating yourself :P Are you in North Carolina?

Nope, Washington ;)

In reply to spoonk (msg #58):

Cheers, thanks for the links.

Something I'm trying to understand as a Canadian:

How does it make sense that a political squabble in the United States has led to your country's leaders holding the entire global economy hostage in order to score political points?

Because we can. Because we can! Bwahahahahaaaa!!

In reply to Falkus (msg #66):

Our leaders are doing nothing of the sort.  American leaders are supposed to look for American interests and nothing else.

In reply to Tlaloc (msg #68):

While I think many americans, and perhaps the leaders themselves hold that view, I expect more from our leaders than that.  "Is it good for America?  Okay, let's do it--and screw the poor bastards that get crushed along the way!" isn't the way I want my representatives thinking.

In reply to Tycho (msg #69):

Why do you have to add "and screw the poor bastards that get crushed along the way"?  No where do I say that and I don't believe most representatives believe that.  What I am saying is that the American government is tasked with looking out for the best interests of Americans first.  Nothing malicious in that.

It's the "and nothing else" part of the statement.  It implies that they don't need to care about morality, about non-americans, etc.  Your statement wasn't just "they should care about X" but rather "they should ONLY care about X," and there's an important difference between the two.  "screw anyone who gets in our way" is entirely legitimate if we ONLY care about american interests, but not if we also consider the interests of others, as I think we should.

In reply to Tycho (msg #71):

Then you read too much into my statement my friend.  Is it within America's best interest to govern in an immoral fashion?  No.  Is it within America's best interests to crush non-Americans in an off-hand fashion?  No.

When it comes to the American economy we are not "holding hostage" the economies of other countries.  Their governments and businesses made their own choices and if they tethered their economies to ours then that was their own choice.

So yes, the American government is tasked with the interests of Americans and Americans only as spelled out by our Constitution.  I have clarified my position so you can, hopefully, discontinue reading into it.

I can agree that we're not "holding hostage" the world economy.

I apologize for reading more into your statement than you intended, but I have to admit, I don't understand what the "and nothing else" part implies, if it's not a statement about what they shouldn't care about.  I think they should take into account how their decisions affect people around the world, not just americans.  Saying they should care most about americans is one thing (I may or may not agree, depending on just what is meant, but I think any disagreement we might have would be minor details), but saying they should only care about americans is a much bigger statement, in my view, and one that I would disagree with pretty strongly.  If that's not what you meant, I apologize for misunderstanding you.

When it comes to the American economy we are not "holding hostage" the economies of other countries.  Their governments and businesses made their own choices and if they tethered their economies to ours then that was their own choice.

Choice? The United States is the largest economy in the world; though that's likely to change come August if your government doesn't raise the debt ceiling. There's no choice in being tethered to the American economy. If your country has an economy, it's tied to the United States. There's no 'choice' in the matter.

So yes, the American government is tasked with the interests of Americans and Americans only as spelled out by our Constitution

There's no possible way that refusing to raise the debt ceiling is in the interest of the US or US Citizens. That's the other thing I don't get. Are Republicans tired of the United States being a great power? Do they really just want to flush two hundred years of development down the drain? Don't they understand what will happen to the US if the debt limit isn't raised?
This message was last edited by the player at 18:06, Thu 30 June 2011.

I don't know. I get the feeling American politicians are primary concerned for the welfare of American politicians.

But ignoring that, what are you expecting them to do? Politicians are trying to represent the interests of the people who got them into office, and presumably trying to do what they think will work. But their goal is to help America, not other countries. I don't see China or Canada going out of their way to help the US except when it's in their own best interest. Iceland isn't a third-world nation that needs rice deliveries, so why does your question seem to imply the US should be setting policy based on charity to wealthy countries like that?

Oh, I wish I'd known you were talking about the deficit to begin with.

Absolutely, the US should NOT increase the deficit ceiling - at least until they've gotten their affairs in order. If the government comes up with a plain to curb crazy spending, whether it be by cutting military efforts or welfare programs, it *needs* to be done. The country isn't going to fall apart by not raising the ceiling, but things will get tough in the short term. On the other hand, if the problem is ignored, the country MAY fall apart in the long term. So as a voter, I don't mind riding through some rough waves for the next year if that's what it takes to make sure there still is an America when my kids are ready to vote.

In reply to Tycho (msg #73):

Apology accepted.  I just don't see the issue that you have with "nothing else".  The Constitution lays down how the government works, or at least supposed to work, and makes no mention of weighing the concerns of other nations when governing.

Once again, no crushing, killing, destroying is implied in "nothing else", but making allies and being a contributing member of the nations of the world is wise government and within the best interests of Americans.

Then you don't understand the current debt debate then or at least you have bought the bill of goods Obama is selling you.

We can easily service our debt.  What we can't do is continue spending.  The Democrats will tell you that teachers will be laid off, soldiers won't get paid, and that old people will be sacrificed to the Volcano God.  What they don't tell you is that Obama can choose what is paid and what is not.  It is his choice to not pay soldiers or Social Security over not paying for his 125% budgetary increase to the EPA.



As explained above, you obviously don't know what will happen.  That is why Obama and the Democrats voted against raising the debt ceiling when Bush is in power.  Would you say that the Democrats, at that time, were tird of the US being a super power?  Would you say they were flushing 200+ years down the drain?

Didn't think so.

Ah, my apologies; I should have been clearer in my grievance with the US.

And while I can agree in principle about reducing the national debt; holding the debt ceiling hostage is not the way to do it. You're understating the effects; it won't just be tough times in the short term, it'll be looking at the thirties and saying 'Gee, they sure had it great.' If the economy loses faith in the US dollar and credit; it'll be a global economic depression that makes anything that's come before seem positively minor.

So you think the US withholding payments for a few months of foreign debts will cause more harm to faith in the dollar than the US spending more than it can possibly pay back? That seems an odd position to hold.

In reply to Falkus (msg #79):



The ceiling is not the issue on faith in the US dollar and credit.  The damage to the dollar has already started with QE1 and QE2.  Flooding the market with cheap money and keeping interest rates near 0% is an excellent way to get the global market to not want to play with dollars anymore.  Even though many nations do the same thing.

There is a practical problem here no one wants to give up anything. In this political climate look at Greece as a key example they had to pass EU mandated measures and socked it to the poor and working people.

A 130% increase in the VAT, taxes raised on the low income, a higher retirement age and nothing raised on the rich who seem to have gotten off scott free. They seem to have a right to riot they could have had a tax higher on the incomes of those with higher incomes over socking it to those earning under 10k Euros and maybe did other things. But no they took devastating moves on the ones with the least to lose save rioting. And the VAT tax now 23% over the modest 10% is going to hit the poor hardest the rich can buy things outside Greece and not report it if high value items, if you're a poor Greek buying clothes it is now going to be far more expensive. This is likely to impact elections what they voted on can be repealed easily enough and alot of people are very angry right now mostly those with the most voting power.

In reply to RubySlippers (msg #82):

So this is yet another product of the Evil Rich^TM?

Or, perhaps, it is the product of trying to make bad debt go away by piling more debt on top of it?  Perhaps a one-size fits all currency for the EU was not the wisest of choices?

Class warfare is a well and good, we got a nice load of it from Obama yesterday, but it doesn't solve financial problems to point at people who actually generate wealth and blame them for all your woes.  Where has this tactic ever improved the lives of the poor?

BTW: Greeks who make less than 10K Euros don't pay taxes.  Greece has a "progressive" tax rate that many in the States seem to love.  Looks like it worked for Greece.

To recap: government interference in the markets, a huge government workforce, a huge welfare state, and trying to solve debt through spending.  Yeah, we gotta get ourselves a piece of that!
This message was last edited by the player at 21:50, Thu 30 June 2011.

Well, even if we can't agree on the intense harm defaulting would cause to the economy, can we at least agree on the fact that defaulting won't do the national debt any favors either? If the US defaults; it'll increase the interest that the US has to pay on future borrowing. The numbers I saw said that it would result in a 973 billion increase in the national debt over the next decade on interest alone.

http://www.whitehouse.gov/site...2012/assets/spec.pdf (Page 23)

To me it implies the question is only whether it benefits the US.  Question of morality, the effect on others, etc. is explicitly not included.  Not just made secondary, but made to be not consider at all, beyond how it benefits the US.  To me, that's a problem.  Even if the US could act in a way that you and I both agree is evil, but could get away with it to no harm to any US citizen, all the harm being felt by non-US citizens, I'd still consider that something the government shouldn't do.  By the "and nothing else" method, though, it'd be completely legit.


But it doesn't expressly forbid considering it, which is what the "...and nothing else" statement does.  Saying "pay your taxes" is one thing, saying "pay your taxes, and not for anything else" is very, very different, no?


I agree, but even in those cases when it's not harmful to the US to crush, kill, or whatever, I still don't think it should do it.  Even in a case where the US might be better off by the government acting in such a way that you and I both consider it evil, I'd still be against it, and would prefer the leaders of the country be so too.  You don't think any act of evil is implied by "nothing else," but to me it says that an act is evil is acceptable, so long as it benefits the US, and to me that's not what I want the leaders believing.  Sometimes we all have to do things that benefit someone else, and don't benefit (or even harm) ourselves, because it's simply the right thing to do.  I'd like my government to work the same way.  I want them asking "is this the right thing to do," not "can we get away with it?"

Not trying to change your mind here, just trying to let you know where I'm coming from, and why a phrase like "...and nothing else" makes me uncomfortable.  I guess as analogy, think of church leader saying "we're looking out for the interests of Christians," and another saying "we're looking out for the interests of christians, and no one else."  Or, say a minority rights group that says "we're looking out for the interests of minorities," versus one that says "we're looking out for the interests of minorities, and no one else."  Would any of those give you cause for concern?  If so, it might give a better feel for where I'm coming from.

This message was deleted by the player at 23:02, Thu 30 June 2011.

Did you see the law that passed they dropped that limit to below 10k Euros and the VAT shooting up from 10% to 23% is going to hit the lower income families hardest. Did they look into a bit higher taxes on the wealthy, maybe some modest taxes spread across income levels or anything that would appear to be fair to everyone, so everyone feels some pain?

You're not going to make a dent in the national debt here without hitting the three legs of Social Security, Medicare and Medicaid and all will get either the retirees angry at you or the poor angry at you. We need to cut military spending this means US jobs and reducing our role in global issues making us less prestigious. We need to have meaningful health care reform to cover everyone and keep costs under control and no one wants to do that seriously. And we need to cut spending at all levels on many things from law enforcement to education to environmental protection. So where are you going to get any consensus on what to cut that will leave you if an elected official safe enough to keep your job?

And we will have to also raise taxes I know in Florida that is a non-starter for any issue even a local one cent sales tax in Tampa for transportation with light rail and better bus service failed. You say you're for or do raise taxes you can kill your poilitical career goodbye.

So as a pragmatic matter even if this has to be done its not going to without such a major threat that we have to act, we are not near there yet.

Of course. Not making payments increases your debt. But which is worse, $1T in ten years from not making payments, or $1T in two years from more unsustainable borrowing?

Don't get me wrong, I agree that defaulting even for a few months is a Bad Thing. But I see it as applying the emergency brakes on the train. It hurts, it's bad for business, but it's better than hurtling off the broken bridge at full speed.

Of course. Not making payments increases your debt. But which is worse, $1T in ten years from not making payments, or $1T in two years from more unsustainable borrowing?

You could increase taxes to pay off the debt rather than threaten to default; get rid of the Bush tax cuts on the rich. They're at the lowest they've been in fifty years, and since the unemployment rate has almost doubled in the last two years; it's pretty damn clear that low taxes do not make jobs.

Don't get me wrong, I agree that defaulting even for a few months is a Bad Thing. But I see it as applying the emergency brakes on the train. It hurts, it's bad for business, but it's better than hurtling off the broken bridge at full speed.

The entire world economy is based on the idea that US Credit is sound. If we default; all that comes crashing down. Maybe I'm wrong about it being an economic doomsday scenario, but you've got no evidence backing your position that it'll just be tough times for just a few months either. These are literally uncharted economic territories, a default on the US Credit has never happened before; and I don't think we should gamble the world's economy that it'll all turn out okay if we sail into them with no idea what's waiting for us.

Obama will have to make massive spending cuts if you default. I imagine you're thinking that's good, but let me put this to you: Given that the unemployment rate in the US has almost doubled in the last three years, do you think putting a few more million more people out of jobs will be a great idea?

And it's not even the worst it's ever been.

http://en.wikipedia.org/wiki/File:US_Federal_Debt.png

Look at the graph; the debt almost reached 120% in the forties and the fifties. Comparatively, we're only at 40%.
This message was last edited by the player at 13:46, Fri 01 July 2011.

Congress has power of teh purse, which means Obama cannot just decide what to spend and what not to spend.
And, as has been noted repeatedly and demonstrated conclusively in 2010, suddenly halting spending on social programs will send the national economy into a further tailspin, decreasing tax revenues.
Which is why ham handed wanabe economists playing at armchair president make better better rabble rousers than legislators.

In reply to Falkus (msg #89):

We don't have to default.  We can service our debts easily.  What is being debated is whether or not to continue spending like drunken sailors.  The Democrats are using the sky is falling tactic.

And raising taxes will not solve this problem.  This is not a revenue problem, it is a spending problem.  Look to the states for the path.  Cut spending.  Right to work.  Shrink government.  States that are doing that see a rise in job creation and additional revenue from business growth.

BTW: In 1980, at a rate of 70%, the richest 1% paid 19% of all income taxes.  Today, at a rate of 35%, the richest 1% pay 39% of all income taxes.  These are the IRS figures.  If you are going to engage in class warfare you should try to base it in reality.  Of course, in reality those evil rich folks DO pay their fair share.

The problem does not lie in the private sector.  It lies in government.

In reply to silveroak (msg #90):

What about the trillions in stimulus?  That is Obama's slush fund to spend as he wishes and money still remains there.  Not to mention that Obama can choose to cut his spending in order to fund social programs and still remain under the ceiling.

And I agree with you on the ham-handed, would-be economists.  I find Krugman repulsive to.
This message was last edited by the player at 14:31, Fri 01 July 2011.

You do understand that just because someone in teh media labels it as Obama's does not mean he has discretionary power over it, right?
http://useconomy.about.com/od/...a/Obama_Stimulus.htm
the package is $787 Billion, not trillions, and it is already pre-allocated:
•$288 billion in tax cuts.
•$224 billion in extended unemployment benefits, education and health care.
•$275 billion for job creation using federal contracts, grants and loans.

Who is 'you'? It's not me. It's congress. And different members of congress have different ideas on how to deal with it. Unfortunately, until now, rather than deal with the problem, they've been taking out another loan and sweeping it under the rug. Now they are going to have to come to a decision; no more procrastination.

And ultimately, Tlaloc is right on this. I do agree with you, we need to raise taxes. But just raising taxes won't do it. It's a lot easier to spend money than to make it, and for every step we increase taxes, we can increase spending twice. We need to put some controls on the spending before we move on.



If we default completely, yes, it will. If we stop taking out more loans for a few months, it won't. 'The world' is already stuck holding the bag, and everyone knows we're on a collision course. Already China is dumping dollars. Already we're maxing out t-bonds. If we don't fix this, the US won't be able to sell those bonds and we're going to have a spending crash anyway (and this time, one that isn't planned and under our control). So far you've said nothing to address this. Do you think the US should just sweep it under the rug, keep taking out loans until there are no more loans to be taken, our income starts, and everything collapses? Do you think this course will maintain faith in the US dollar?

In reply to silveroak (msg #93):

I typed trillions instead of billions.  My error.

For someone who has their opinions handed to them by DailyKos you should refrain from accusing me of being a mere toady for "someone in the media".  I am quite surprised that you didn't name Beck.

So Obama doesn't have descretionary power of the Stimulus funds?  And they are allocated?

The Washington Times found that 440 "phantom districts" listed on Recovery.gov received $64 billion and claimed to create 30,000 jobs.  Note that is $2.13 million per job.  Please tell me where that money went.

Recovery.gov showed 12 districts in Washington, D.C. that consumed more than $2.7 billion.  That only have one congressional district.  Tell me where that money went.

What about all those "shovel-ready" jobs that Obama talked about the money going to?  What about the fact that he admitted there never were any "shovel-ready" jobs?  What happened to the allocated money?  I actually know how government allocation works and although you can say that it is allocated the definitions of "allocation" can be tortured into putting money into the pockets of people you owe your Presidency to.  Unions anyone?

So even with this wonderful allocation you speak of, did the Stimulus/Slush Fund accomplish any of the effects our President and lawmaker's told us it would?

Imagine what could have been done if that "Stimulus" would have been tax breaks.  Now that would have accomplished far more than Obama's Slush Fund.

1) I do not read DailyKos
2) I did not say Toady in any way shape or form, I merely pointed out you had apparently mistaken a label for actual authority
3) Your response is highly personal and insulting and I believe, once more, in violation of the terms for these forums. Again.

Now, just because a beuracracy sends money to phantom districts or misplaced funds does not mean that Obama had any authority or that the decision to distribute those funds there were made by him. they were made by government beuacracies follwoing directions given by the legislative branch.
Simply speaking it is spelled out in teh constitution- Congress controlls the budget. This is not an autocracy, and Obama does not make every governmental decision.

But since you state that you know how this works, why don't you spell out for te rest of us how a mistake by a low level beuracrat in an agency regulated by congressional oversight is actually teh responsibility of President Obama?

The following are ten reasons why all Americans should be concerned about the Federal Reserve and rising food prices….

#1 What we are witnessing right now is part of a long-term inflationary trend.  Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its value.  An item that cost $20.00 in 1970 would cost you $116.48today.  An item that cost $20.00 in 1913 would cost you $456.49 today.

#2 Over the past couple of years, the Federal Reserve has used a process called “quantitative easing” to pump hundreds of billions of new dollars into the financial system.  This has helped push the cost of food, gas and just about everything else up.  Even though “QE2″ has now come to an end, the Federal Reserve has announced that they are going to continue to “reinvest” hundreds of billions of dollars into the financial system.

#3 The Federal Reserve is not the only central bank that has been doing this sort of thing.  Sadly, central banks all over the world have been recklessly printing money over the past several years.  This is creating inflation all over the planet.

#4 Prices are going up but wages are not.  One recent survey found that 9 out of 10 U.S. workers do not expect their wages to keep up with soaring food prices and soaring gas prices over the next 12 months.

#5 We have already seen a tremendous amount of food inflation in the United States during the last 12 months.  According to a recent CNBC article, over the past year many of the most popular foods in America have absolutely skyrocketed in price….

    Coffee, for instance, is up 40 percent. Celery is 28 percent higher while butter prices rose 26.4 percent. Rounding out the top five are bacon, at 23.5 percent, and cabbage, at 23.3 percent.

#6 In many areas of the world food inflation is far worse than it is in America.  Over the past year, the global price of food has risen by 37 percent and this has pushed approximately 44 million more people around the world into poverty.

#7 When the Federal Reserve and other central banks create new money, it usually goes to big banks and major financial institutions first.  So what have the big banks and the major financial institutions been doing with this new money?  Well, they have been sinking a lot of it into hard assets such as oil, precious metals and agricultural commodities.  Over the past 12 months, almost every single agricultural commodity has risen substantially in price.  For example, the global price of wheat has approximately doubled over the past year.  But it is not just wheat that has been skyrocketing.  Check out what a recent Bloomberg article had to say about what has been happening to many key agricultural commodities over the past year….

    Corn futures advanced 77 percent in the past 12 months in Chicago trading, a global benchmark, rice gained 39 percent and sugar jumped 64 percent.

#8 Many areas of the world are experiencing severe drought right now, and this is also harming food prices.  For example, the Horn of Africa is experiencing the worst drought that it has seen in 60 years.

#9 The United States is also having crop problems as well.  All of the flooding, wildfires and tornadoes that we have seen this year have certainly not helped things.  There is even a major “east coast stink bug epidemic” which is causing chaos for large numbers of farmers.  In general, U.S. agricultural production has not been blessed this year.  It just seems like there is crisis after crisis.

#10 A lot of agricultural production that would go for food is now going for other purposes.  For example, almost a third of all corn grown in the United States is now used for fuel.  This is putting a lot of stress on the price of corn.

So how concerned about food prices should we be?

Well, renowned investor Jim Rogers recently put it this way….

    “We’ve got to do something or we’re going to have no food at any price at times in the next few years.”

That doesn’t sound good.

But it is not just the price of food that is going up.

The price of gas has also gotten crazy.

Right now, the average price of a gallon of gasoline in the United States is approximately $3.54.

One year ago, it was $2.76.

Thankfully, the price of gas has actually come down a bit recently.  Earlier this year it hit $3.99.

Sadly, back in the 90s you could go to just about any gas station and fill up for about a dollar a gallon.  Over the past couple of years we have gotten comfortable with outrageous gas prices, but the reality is that what we are seeing now is part of a very disturbing long-term trend….

Moderator post:

I am not sure that saying someone repeats news that they get from a legitimate news source is a personal attack (I assume Daily Kos is a legitimate news source).

However, please keep the discussion impersonal. It does nothing to help the discussion, and can do much to harm it.

If we need to discuss this further, please send me a private message.

I tend to disagree.  Yes, we can service our debts.  But it ISN'T "whether or not to continue spending like drunken sailors" that's being debated.  What has to be decided is whether or not to increase the debt limit.  Whether we increase it or not, we can change our spending and taxing practices one way or another.  Not paying our debts won't make the spending go away, it won't balance our budget, and it won't benefit anyone.  When it comes to how we should fix our deficit problem, I can understand that republicans and democrats have different ideas of what should be done, and that reaching an agreement could be difficult.  But when it comes to paying people the debts we've already incurred, I don't see how anyone could really be in favor of default at this point.  That's what strikes me a so odd in this "debate".  It's not one side wanting us to default, and the other not wanting us to do so.  Neither side is in favor of a default.  Why can't we pass something that everyone agrees we want to pass?  Argue about the budget, and push us to the point of a government shut down for lack of having one if you must, but really, we need to pay our debts.  Threatening to not do so in order to get ones way on something else just doesn't seem rational to me.


Raising taxes alone won't solve the problem, yes.  But I don't think anyone is suggesting that.  I disagree with the either/or dichotomy of the oft-repeated "it's not a revenue issue its a spending issue" position.  It's both.  Spending is higher than it's been in a long time AND revenue is lower than it's been in a low time.  It's not one or the other, it's both!  Taxes are lower than they were when Regan RAISED them.  This idea that taxes are out of control just doesn't square with history.  Yes, cut spending, but realize that cutting spending will lead to job losses and reduced revenue.  The bottom line, is that people are going to lose jobs no matter what we do to solve the budget problem.  Politicians on both sides like to pretend otherwise, but whether we raise taxes or cut spending (or both, like we need to) someone's going to be losing jobs.  Other people will get new jobs (if we do it right, which is a non-trivial IF at this point), and the country will survive, but everyone seems to be pretending that their solution will harm no one, when in reality any solution will harm someone.


Not sure what the message to take away from this?  That if you cut taxes on the rich, the rich get way richer?  Sounds fairly non-controversial to me, but the question is whether it's a good thing or not?  Is the goal to get the rich to pay a bigger percentage of total taxes?  If so, just give them all the money, and they'll pay 100% of the taxes, no matter what rate we charge.  Not really a great solution, though, no?  The richest 1% are far richer now than were the richest 1% in 1980.  Is that a great thing?  Is it better for the richest 1% to get 1000% richer while everyone else stays the same, or for everyone across the board to get 5% richer?  Just point out who pays what fraction of the total doesn't really address the issue of how much we should be taxing each group, in my opinion.


Have to disagree, again because of the either/or assumption here.  The private sector plunged the economy into a very bad position.  Very big private banks made some very bad investments.  The government encourage some bad investment, and has been running a large deficit since, well, since the Bush tax breaks (not just on rich people, on everyone).  There's problems all over the place.  The problem is the private sector AND government.  Revenue is down because we're in a recession.  But even before that we were running large deficits.  Cutting spending will worsen the recession, and prolong the revenue short fall.  Increasing spending could improve the economy and shorten the shortfall, but will increase the deficit in the short term.  Either way, the debt will increase, and people will suffer.  Shooting down every idea because it will lead to a debt increase and/or make someone suffer is going to get us no where.  My hope is that politicians will be responsible enough to forge some manner of compromise, but their doing a pretty good job of making me doubt it lately.

In reply to spoonk (msg #97):

Food prices are going up, and this is a legit concern, but it's not the fault of the federal reserve or inflation.  It's a market-driven, supply-and-demand issue.  We could be on the gold standard, and food prices would still be going up, for many of the reasons you mention in your post.  Similarly for gas.  The issue isn't the federal reserve for this stuff, it's the fact that more and more people are wanting food and gas, and the supply isn't keeping up.  Whatever the faults of the federal reserve, this isn't a problem that its caused.  Inflation is actually below what economists consider optimal right now.  Interest rates are near zero.  Food and gas prices are a concern, but they're a natural product of free markets, not some manipulation by the federal reserve.

Having bid on contracts I can say with certainty that responsibility of awarding those contracts and handing out the money is determined by the party in power.  That would be the Democrats and the head of the Democrats would be... hmmmmm... now who could that be?

That would be why Democrat districts, those that actually existed, received 2.5 times more Slush Fund money than Republican districts.  Not to mention the rules put in place regarding the hiring of Union workers and such.  Biden admitted as much when he told AFL-CIO that the Slush Fund was created with Unions in mind.  I am sure that was just another gaffe on his part?  Although the guy is an idiot I wouldn't call him a "low-level bureaucrat".

Allocation in the budget is generalized with the individual departments of the government further dividing up the money and awarding contracts.  You can say 250 billion to "infrastructure".  Okay, what does that entail?  Who gets those contracts decided on by the President and his administration?

I find it funny for those who believe that the Evil Rich^TM own the politicians but that the President is unable to funnel contracts and money to those who donate money to him.  Please explain how the President and his administration are unable to move Slush Fund money where they want.

As a voter, I have lost my faith in the ability of the government to control itself. Part of re-establishing control is revoking the ability of the government to just pass off its debts onto my children. If the government can't just keep running the credit card, congressmen can't keep promising the sun and the moon to their constituents. Congressmen can't bribe their constituents means they don't get elected. So they now have to actually solve the problem themselves rather than dumping it on my kids.

Am I against the government taking out loans for important work? No. But I am against that tool being abused for personal gain. So I'm happy it's being turned into a beating stick to force the topic.

What I find interesting is the amount of resistance I've seen. Are you against the idea of the government balancing the budget? Are you comfortable with the government dumping an untenable debt onto your children and grandchildren? You (Tycho) at least seem to assume that politicians will act in a responsible and self-sacrificing manner when not under the gun. I don't think I need to state that I find that position simply absurd.

Which is fair enough.  But defaulting on our debt won't solve that.  It doesn't make the spending go away.  It doesn't force us to have a balanced budget.  Politicians will still get up to all the same shenanigans whether we raise it or not.  It'll just mean your kids are paying much higher interest on the debt we've already handed them if we default.  Defaulting isn't going to make politicians more responsible.  If anything, I'd wager it'd make them less so, since they have basically decided they can spend without having to pay.


No.  Am I opposed to them doing it in a recession?  Yeah, probably not the best time for that.  But more importantly, I'm opposed to the idea that it can be done entirely by cutting spending.  I'm all for a balanced, reasonable approach, including both spending cuts and tax increases.  But from what I'm reading in the news, that's "a non starter" and "off the table."


No.  But defaulting on the loans we've already taken isn't going to put them in a better position, in my view.


No, that's not my assumption.  I just disagree that defaulting on our debts will get us where we need to go.  Politicians will act responsibly once we, the voters, start rewarding them for doing so (ie, pretty much never).  Defaulting on our debt won't cause them to do it.  It'll just make most people's lives that much more unpleasant.

Our debt level is managable, financially.  It's just not managable politically, because no one wants to propose that their base suffers any pain when proposing a solution.  No one wants to admit that we can't have our cake and eat it too.  We're all happy to make someone else go with out cake, but get fired up when our cake (whether that's entitlements, tax breaks, subsidies, or whatever) gets put on the table.  Everyone wants someone else to suffer the pain of balancing the budget.  And most politicians are using the debate to push non-related ideological issues instead of doing something to actually address the problem.  Everyone wants to blame the other side, and anyone who comes up with a realistic solution gets thrown to the wolves.  The number of people willing to come to a reasonable compromise is so small as to have no real influence.

Oh, and in case we all forgot about the evil Scott Walker and his attempts to destroy education and slaughter teachers in concentration camps, here is an article that shows what his measures have accomplished:

http://washingtonexaminer.com/...nsin-school-district

It is one district highlighted here but local news in Wisconsin seems rather reluctant to report these things due to Union thugs and boycotts.

If we default completely, yes, it will. If we stop taking out more loans for a few months, it won't. '.

Where is this coming from, Katisara? Every source I've read, republican or democrat or libertarian or socialist or whatever says there will be a default if the debt limit is not raised. Why are you saying there won't be one?

So far you've said nothing to address this.

This isn't the way to fix it. If it isn't raised; a lot of people are going to be harmed.

When making statements like this, you might want to think back to how you felt when I misinterpretted your "...and nothing else" statement to mean "whatever happens to non-americans doesn't matter."  If you don't like people extrapolating your words to what they think is the logical conclusion, you may want to avoid do the same.

In reply to Tycho (msg #106):

I was actually in the middle of the protests and that was the mood and that was the Union message.  Since the time we spoke of Walker balancing the Wisconsin budget, and many here defending Union thuggery, I have had the following happen:

- A teacher told me that my children better not have her for a teacher because she would "make them suffer".  Gee, she liked me at the school board meetings when I suggested that we move some money from the sports budget into the music and art budget.  I told her that would be fine but that I also know where she lives.  Shame, we used to be friends.

- I refused to put on a Solidarity t-shirt "offered" by Union thugs who were handing them out to at my favorite restaurant on the Square in Madison.  I was there with clients.  One was a female and avowed liberal and the other was a gay man who was also an avowed liberal.  The waitress refused to seat a "fucking Reich-Winger" and my two clients took issue with her.  One of the three Union boys told the female to shut her "whore mouth".  When my male client and I called over the owner, whom I have known for six years and brought in untold numbers of people into her establishment, she told me she couldn't kick out the Union boys nor could she discipline the waitress because she will be boycotted and her employees harassed as other restaurants who don't "support" the Unions.  I told her I was very sorry to hear that and that I hoped the Unions would bring in as many customers as I did to make up for my loss.  She keeps calling to apologize.  Oh!  And as we were leaving they pushed my male client in the back and told the "faggot" to get a move on.

So I believe I have the full right to make the statements I do.  They are not aimed at you in any case.  They are aimed at the Union thugs and useful liberal idiots who allow them to run amok as they do.

Has anyone here said such things, though?  You seem to take offense when people here treat you as "just another right-wing nut job" and tend to demand that they respond to only things you bring up, rather that what someone else in the media or the internet has said.  I think that's entirely fair, but would expect you to live by the same yourself.  You don't want to be called (or implied to be) a racist just because someone's met a conservative who was a racist.  You don't want to be called a bigot, though there are no doubt conservative bigots out there.  You don't want people putting words in your mouth, just because some conservative somewhere has said them, no?  I know I'm getting a bit preachy here, and you're certainly not the only one who's done this, but you do seem to be the one who complains about it most when others do it, which is why I bring it up.  I think we could all do (myself included) with a bit of a reminder to debate with those who are here, not just the extremist fringe who aren't here, and who we'd all agree are wrong in their actions.

I'm happy to agree that the people you describe were in the wrong.  Are you willing to agree that not everyone who supports labor rights acts that way, or condones such action?

Okay, maybe I'm not understanding the situation, but right now I see two realistic paths.

1) Status quo: Congress votes to increase the debt ceiling again. They continue to pay a trillion here for wars, a trillion there for entitlement programs, and not raise taxes. The government continues to sell t-bills to make up the difference at ridiculous interest rates. Last years bond market was abysmal. People aren't interested in buying the dollar any more. Next year it'll be worse. When the government comes out in 2014 with their new $6T budget with a $1T shortfall, they sell less than $500B in bonds. The gap comes out of ... I don't know. Pick something. Whatever it is, it sucks. And worse, it's not temporary. The budget has already been approved. The shock along sets them back months. They fight over what to cut as things start to break down. People already holding dollars get suspicious. Either they're not getting paid, or they're watching Americans riot in the street. They stop buying and the remaining bond sales flatline. The government has no choice but to immediately reverse spending, cutting across the board. The problem snowballs, with them not being able to pay back debts, countries putting pressure to get their money back now before things crumble, and Americans depending on entitlements rioting in the streets. Things get 'very bad' for the foreseeable future, with no easy solution.

2) Hold the debt cap: Congress makes it clear they don't want to raise the debt cap several months before it becomes an issue, and begin debating it. They expect issues, and state department works it over with other countries, making the situation clear and explaining that it is not an emergency. Congress fights and deadlocks. The president has time to get predictions on where to withhold money. The deadline passes and the president puts his plan into effect, trying to spread out the pain. Still, things get hot. There are riots, but fewer, because it's a 'government thing', not a 'foreign powers manipulating our economy' thing. Foreign governments are upset and demand payment, but they know the US has the money and can pay back the debts, so there's no rush on calling those debts immediately. Instead, they just chalk extra on the bills. Congress feels the pressure and finally passes an improved budget and protections. It's not perfect by any measure, but it cuts future debt significantly. With that done, both sides make talky about 'compromise' to justify raising the debt cap in November. Things return to normal, except that in the interim, the debt jumped another few hundred billion just because we skipped payments (but that increase is about equal to what we were planning on taking out in 2012 anyway, so as far as our grandchildren are concerned, no change). In 2013, debt levels out and confidence in the dollar remains high. The US resumes AAA status.

Am I incorrect here? What am I realistically missing?

In reply to Tycho (msg #108):

Actually, in the case of Union members sending death threats and vandalising their opponent's homes there were a few who basically said that the Republicans were reaping what they had sown and that the Union members were justified in their outrage.  They just decided to argue the definition of thuggery or to argue about the location of the thuggish actions rather than admit that Union members were, and typically do, act like thugs when they feel the sharp pains of "injustice".

There is a huge difference between "and nothing else" and "Conservatives consider homosexuals to be subhuman".  My statement reflects the fact that the Constitution does not say that government should consider the interests of other nations while the other statement is a stereotype that does not state the Conservative notion of marriage or address it.  It is mere mud-slinging.

And yes, you are getting preachy but I don't mind.

And no, I don't complain about it.  I point it out and correct it.  If you find a statement from me that reads into your comments I would expect you to call me out about it and explain your words the way I did.  Please show me where I am whining and moaning about people reading into my statements without addressing and clarifying what I have written.  Miscommunication is easy in the written word and I address it when it happens.
This message was last edited by the player at 20:48, Fri 01 July 2011.

Am I incorrect here? What am I realistically missing?

Once the debt limit is reached; the government has to immediately cut 44% of its spending. That means the treasury has to make hard choices that are going to hurt a lot of people no matter how it goes. Do supplies to the military forces in the middle east get cut off, or do we eliminate the social safety net? Do we keep the FBI or the CDC funded? What do you think happens to the economy when air control gets shut down and nobody can fly?

The treasury gets to choose what gets funded and what doesn't. And that happens on August 2nd if the debt limit isn't raised. It's not several months, it's a single month left until the deadline expires.

Fortunately, and this is one glimmer of hope for the economy, the debt limit is unconstitutional per the fourteenth amendment; and the treasury could conceivably keep borrowing without approval of Congress.

"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
This message was last edited by the player at 21:23, Fri 01 July 2011.

This message was deleted by the player at 21:37, Fri 01 July 2011.

In reply to katisara (msg #109):

So, your present summation is that one choice leads to the utter destruction of America, and the other leads to a path to prosperity? With all due respect, Katisara, isn't this the quintessential modern example of either/or fallacy? You present two outcomes, and only two outcomes, as if these two are the only possibilities, and the two possibilities you lay out are written in the most favorable manner possible to your position. You only left out Mulslim extremists invade the Pentagon while we're busy with the permanent riots, let loose the nukes, and blow up the whole world in reality A, while during reality B, America is respected once more as leader of the world, China submits to America's superior budgetary abilities, and we're kings and queens once more.

With all due seriousness, putting the jokes aside, it does sound like you're taking a lot for granted in this scenario. Not just I think you are taking a lot for granted in laying out these scenarios, but I feel confident enough to say that you are taking a lot for granted in this scenarios. It's possible that, it works the other way around, like the Democrats are saying it will. It's possible that either case results in the ultimate destruction of America. It's possible that recovery is also possible in either scenario. It's possible that no riots will break out in either case. It's possible that, in either case, the budget won't be made. There are a lot of possibilities that your either/or scenario is leaving out, for no real reason.

To be fair, you're also painting the opponents as people who don't want to balance the budget. The Democrats have proposed a plan that's near identical to the ones the Republicans held in March. Republicans wanted 85% cuts and 15% increased revenue then, Dems held their nose and gave them 83% cuts, and 17% revenue increase. Off by the margin of error in any statistic. However, the moment they started offering it, Republicans decided they didn't want that anymore, and now want 100% cuts. For all this talk about balancing budgets, a part of this is politics, and both sides trying to gain as much of their personal agenda as possible. Even putting that aside, there are differences on interpretation about how one can go about balancing the budget. Libs think that raising revenue can help that, and Cons seem to think that there is no place for revenue anywhere in the balancing. Even when it comes to, say, the oil subsidies, or the subsidies on private jets. It seems like boths sides are using a big scare tactic, with Republicans demanding nothing short of everything they want, and Democrats foretelling doom if the Republicans don't agree to their deal by the end of the deadline.

There doesn't seem to be a lot of consensus over the matter. Both sides are describing completely different realities, both of which just happen to fall exactly in line, without a fault, of one's personal ideology. Different economists seem to say different things about the matter, as is the case with pretty much every macro-economics debate. There doesn't seem like anyone really knows what's going to happen, in either case. Most people, on either side, just making assumptions, based on what they already held to be true anyway.

You say you don't trust government, and trust me, I get that. The Congress in particular has some real head-palming moments, and they let things get out of hand. But, personally, I don't trust business, banks, or corporations either. So, where do we go? It's possible that "short term pain" may not be so easy to just brush off. Speaking personally, I'm working month to month at the moment, and barely getting by. My family back at home nearly lost their house last year. It's possible we're not going to be able to survive the "big dip" that results. What do you tell the people who don't? "I'm sorry, sacrifices must be made, and we decided that sacrifice would be you?" Do sacrifices have to be made? Yeah, I get that. They do. But I'm not sure it's quite the selfish action you suggest it is. It's easy to ask for us to weather the tide when one is high on the watchtower and relatively free from any real harm. It's not so easy to ask when your family lives on the near the shoreline. If we let it come, some people are going to be washed away. But, it could be less than we think, and no harm is done. If we build the dam, they could prevent anyone from being threatened from the tide. But, there's also the real possibility that, after a number of years, the dam will break, and the build up from behind will surely wipe us all out.

Is there any real solution, besides just choosing one, and hoping for the best? Can you really blame the people on the sea level for voting in the way they do?
This message was last edited by the player at 21:54, Fri 01 July 2011.

Immediately ... but only temporarily. Yes, if you're old granny Johnson who is living a hand-to-mouth existence on social security, missing two weeks of pay may be a life or death matter. Treasury probably shouldn't cut payments to those people. But for most of us, even people in the military, missing a paycheck won't kill us. And since we know it's coming, the Dept. of the Treasury has already made a plan and will spread the pain out. Congress can end it whenever they want. Heck, August 1st they can pass a stopgap measure and say 'we can borrow money for only these purposes' or somesuch. The point is, it's a controllable gap. A slap of the pen and it's done.

Compare that to the other situation, that people stop buying government bonds. You still get the 44% drop, but it's permanent and it's a surprise. No going back. No slack time to ease into a new program.

Were my scenarios simplistic? Definitely. I was just trying to touch on the salient points. In one scenario, we have control. In the other, we don't. That's pretty important, and it seems to be forgotten. No one has told me yet what is bad about the 'debt ceiling not raised' which isn't also bad about '2014 people stop buying bonds'. I can find several good things, which I've pointed out. So why the fuss about the one and not the other? Are we totally cool with the government continuing 0% interest rates and busting out bonds in secret markets because no one is buying otherwise?



Which opponents? I've painted POLITICIANS, all of them, as not wanting to balance the budget. There's not one place where I've blamed one side or the other specifically as being wrong.

That's more my point than anything else. The scenario you paint is entirely simplistic, and creates a very slippery slope-like effect for both sides, incredibly favoring the position you hold. I don't feel like it portrays the reality of the situation, which, frankly, is because I don't really know if anyone has a clear idea on just what's going to happen.

Do we want that? No. But, I don't think anyone was arguing that we don't balance the budget. The argument is really how and when, and there are some rather varying opinions on that matter. Do I think too much fuss is being made over it? No, if you believe that missing the deadline really will create chaos. It's kinda like Jehova's Witnesses: yeah, they're kinda annoying and preachy, but if you understand why they do it, it does sound like a fair reaction in concept. Do I personally think that everything will go to hell? I'd like to think it wouldn't, but I honestly don't know. I guess we may find out. Frankly, if it does, there's not much I can do to stop it anyway.



You are correct, so I must apologize. You haven't exactly told the other side who disagrees with you that they don't want to balance the budget. I'm sorry for misinterpreting you.

However, I must say, for someone who is accusing politicians on both sides of the aisle as not wanting to balance the budget, you make extremely lenient assumptions in favor of just the opposite when it comes to the second scenario you painted, the one that happens to agree with your position. If you really don't have any faith in the government actually balancing the budget in scenario 1, what makes you think that in scenario 2, they actually buckle down and do it? You also rely extremely heavily on the faith other governments have in our currency in scenario 2, where you don't express that at all in scenario 1. They rush into cutting off the U.S. in that scenario, but not in the second. They have patience in the second. You also seem to express that the reduction is permanent in scenario one, where as it's merely temporary in the second. Same thing with the riots. You seem to grant scenario two that most favorable of circumstances, and grant scenario one, that opposes your own, a much more pessimistic set of circumstances, ones that don't necessarily result from the actions being taken.

You might not say that the other side has it wrong, but you don't seem to be granting them the favorable impression that you give to the argument that coincides with what you want.
This message was last edited by the player at 02:06, Sat 02 July 2011.

Five out of the last eight years Congress failed to approve the budget in time. When the deadline is tomorrow, they BS, play politics, and continue their three-day workweeks. When the deadline is yesterday, people are waiting on paychecks and the heat is on, all of a sudden they stay up until 4am writing bills. In regards to politicians doing their work, I can only comment based on previous experience.

To be clear though, I'm not debating here. I'm not an economist, and reading up, it seems like even the economists have no idea what's going to happen. All I know is the debt has been spinning out of control since I was born. I'm paying for social security, but I don't expect to see a dime of it. Reagan 'outspent' the Soviet Union on behalf of my parents, and now my kids are looking at the price. Now that we're facing the possible end of the earth from global warming, we're busy spending money on salmon farms in West Virginia and THREE wars against petty dictators we can't beat. And for, whew, thirty years? politicians have been playing cups and balls with it rather than fix the problem (with a few exceptions, such as Clinton). Every year there's worse news about our debt to China, and our ability to grow it to pay for said salmon farm. Everything Falkus is afraid of I'm afraid of too, don't get me wrong. And I am genuinely pissed, really furious, that these politicians are willing to do this with the country of my children, just because they're going to be well dead by then.

But now politicians are actually talking about it and taking it seriously. The fact it's because of this sucks, no question. But at least it's getting done and maybe Congress will do their job and pull my bacon and the bacon of my children out of the fire.

So I'm asking, again, why is the current scenario worse than the other one, that we just run out of cash one morning? If you convince me that either the politicians can actually be responsible on their own, or that the scenario I'm frightened of will be better than the one we're facing right now, I'll change sides. But no one has really shown that yet.

I wasn't saying that the *party* n power does not influence how money is spent, but there isa  huge difference beween having a party be predominat in power and having presidential discretinary spending. Your initial comment was that we could pay thedebt through the discretionary funds allocated to teh president. I have well established that they were not allocatd as presidential discretionary funs and teh point you are trying to defend now is so far from your initial claim it only bears mention in indication of how uch ground you have had to surrender and how quickly on this topic.
The legislature has teh pwoer of eh purse. In 2009 & 2010 the legislature was controlled by Democrats an things got better by all objective measures compared to where they were trending prior to that. Just not quickly enough for some people. So the Republicans took congress in 2011 but not the Senate, s Democrats are still mostly in power, but the Republicans have teh power to hamstring tehm at any given time on any given issue which they seem to be doing to score political points at the cost of the welfare of the country.

I have a simple question here and its this.:

In the end its what the people of this nation will allow do you think the voters will be happy with a government that cuts programs they want and raise taxes that is going to allow a politician to be safe in office?

Its fine in theory to talk about this but then there is the real world your talking about cuts of changes to key social welfare programs, social security, military spending (all related areas like veterans care and military use of power) and other programs. Then raising taxes an area no one really wants to go to.

I don't see anyone anytime soon lowering the deficit unless they can do so without hurting whatever programs are important to a given voter influencing their vote, likely against who is hurting them.

Nothing is really going to happen until frankly what usually happens no choice is given but to fix the problem by then it might be easier to default on all our debts and say we aren't going to repay them.

That really would cause global economic collapse. I'm pretty sure that's not a good option, and not one that's ultimately going to be pursued.

Why drag this out another year?  Why not just have it collapse now?  The last video I had placed up was 30 minutes long and I wouldn't be surprised if no one watched it.  This one is only 5 minutes long and it does a good job of explaining the current topic going on.

http://www.youtube.com/watch?f...ed&v=NblhUrcdrSc

To be clear though, I'm not debating here. I'm not an economist, and reading up, it seems like even the economists have no idea what's going to happen. All I know is the debt has been spinning out of control since I was born

That's not true. The national debt has been far worse in the past; and the United States has come through it without problems before. In the late forties and fifties; it was a 120% of the GDP. While it's bad now, at 90%, it's been worse and it was recovered from.

Yes, your country does need to make cuts.

  But now politicians are actually talking about it and taking it seriously.

They're not taking it seriously. The Republicans are not engaging in any sort of reasonable debate on the matter; and just keep pushing their demands farther and farther whenever the negotiations come close to an agreement. The whole damn thing is political; it's not about the national debt, it's about embarrassing the government and winning the next cycle of elections.

So I'm asking, again, why is the current scenario worse than the other one, that we just run out of cash one morning?

Because you're making a gamble that your proposed solution, where the debt ceiling isn't raised, there's a bit of trouble then everything in the economy becomes sunshine and roses is the one that will happen; as opposed to the one that a lot of other economists are saying will happen, which is a decades long depression, global economic collapse, loss of vital services of the federal government etc.

We can fix the national debt without threatening to knock out the cornerstone of the global economy.

Why drag this out another year?  Why not just have it collapse now?

Do you... read what you write? Why collapse the economy? Why not just drop a nuclear bomb on Manhattan? What is it? Do you hate people? Why are you so anxious to see them die?

I don't hate people at all.  Though I wish more of them would wake up to what is going on around them.  But as I learned through a number of Psychology classes in collage, people ignore stuff to keep a sense of normalcy in their life.  But thank you for watching the video that I has posted as the question was directly related to it.  It also relates to a conversation further up the thread where some one was talking about how it would be better to stretch stuff out of 10 years instead of coming to a halt right now.  If it is going to happen, why not have it now instead of 10 years later?  I would rather deal it now than then.

With a collapsed system, a new one would emerge.  Granted it would all be on a local level at first.  At least that is what they are teaching in collage now.  Every one wants a Global level economy where one country is the manufacture, the other country is the consumer, and another one is the disposers.  That really doesn't work to well as it doesn't allow for diversification.  But I'm not going to go into last semesters Economic class.

Also it is interesting that you brought up the nuclear bomb analogy.  Kinda interesting that the UN has policy 21 in action which is supposed to reduce the current population of the Earth to a manageable level.  That bomb theory might actually work.  Or, you could forgo the bomb and have a Nuclear power plant kill off a large number of inhabitants so that you have plausible definably.

I don't hate people at all.  Though I wish more of them would wake up to what is going on around them

And why are you the only one who can see this?

If it is going to happen, why not have it now instead of 10 years later?  I would rather deal it now than then.

What makes you so sure it's going to happen? I say it's not going to happen at all.

With a collapsed system, a new one would emerge.

So? Our current system is just fine.

e.  Granted it would all be on a local level at first.  At least that is what they are teaching in collage now.  Every one wants a Global level economy where one country is the manufacture, the other country is the consumer, and another one is the disposers.  That really doesn't work to well as it doesn't allow for diversification.

Call me crazy; but I happen to like my computer and my job and I'd rather not see them go anywhere.

Oh, by the way, just a word of advice for you: In the event of a global economic collapse; you're not going to be Mad Max. You're going to be part of the pile of skulls in the background.

Kinda interesting that the UN has policy 21 in action which is supposed to reduce the current population of the Earth to a manageable level. 

That, uh, doesn't exist.

That bomb theory might actually work.  Or, you could forgo the bomb and have a Nuclear power plant kill off a large number of inhabitants so that you have plausible definably.

...

What on earth are you talking about?

The problem is that there is one solution which nobody is talking about, and frankly given historical precedent it is the most likely one.
Conquest.
Scenario: congress does not raise the debt ceiling, aug rolls arround and it seems like the only remaining option is to default on our loans. Note that this is for the 2011 budget which was already voted on- saying we can cut costs means revisiting the already passed budget for the year, which is what the Republicans are really after here, it just doesn't happen to pass constitutional muster.
So instead the crisis goes the other way and the president invokes 90 day emergency powers. The Republicans of course cry fould and stomp whine and cry and gear up for the next election cycle.
Meanwhile we have troops in Afghanistan, Iraq, Kuwait, Europe...
Now what the Republicans are banking on is the idea that Obama will unilatterally raise the debt ceiling and make them look good for the next election. If however his advisors suggest that this would be a bad idea for constitutional reasons, demanding tribute from occupied countries is certainly a possibility that would provide an alternative revenue stream, and would turn teh US from a reluctant superpower into an effective de-facto empire.
Which is the first part of collapsing democracy as we know it, not towards small local governments running everything, but towards a larger, more militant government.

When the people at school talk about that there is no resession right now, that people loosing their jobs is a myth as it hasn't effected them yet.  I would classify that as being asleep.


This looks like a engineered collapse.


With the current systems collapse, a new system would get started.  I like the pre-Fedral Reserve era as there was no interests that need to be paid to any one for using currency.


When I honorably separated from the military, I took up a job in transportation in Arizona.  I was making 60 grand a years.  I had just gotten out in 2007.  I was layed off by November of 2007 from the company going bankrupt from the recession first setting in.  Back then though, no on thought of it as a recession, even today.  But at that point, trying to find a job got much much harder as peoples business were laying them off.  As my 20 grand savings slowly was sucked dry over the next year trying to pay rent and the car note, I eventually found my self on the street, was there for a whole year.  I put a tent up under a bridge in Phoenix, cops got rid of that for me.  Now you are thinking this lazy mofo should have then a job at walmart or Mcworld.  I did for Wal-mart but that only lasted three weeks as I have a knee injury from a being in Afghanistan, I can not stand for longer then 40 minutes, my knee literally gives out and I fall to the ground.  Grocery shopping is a bitch.
So after being told that my 6 years of job experience doesn't count and that they had plenty of people who had a collage education they could hire.  I now find my self in collage, ablate living with my parents again.  I live out in the middle of no where in the country so to reduce food expenses, I plated a quarter archer garden.  We have our own well so water isn't an issue as we have a windmill for a pump.


I have no delusions that I might survive.  The only comfort I have is being out in the middle of no where knowing at least I have food and water.


http://www.un.org/esa/sustdev/...english/Agenda21.pdf
There you go, I don't have a job so I had the time to read through all 350 pages.  Oh, and you might want to get your hands on a few different versions of Blacks Law Dictionary.


In particular, the nuclear issue in Japan, were documents are now coming out that it was indeed a cover up.  But that is all conspiracy any ways.  Though, why is it that once the radiation came over here and was setting off alarms, the EPA raised the allowable dosage limits by a thousand times?


With the UN as the controlling government.  They already are telling the US what to do, especially with the war in Lybia.  Why is the president saying the UN told us to, but wont listen to congress?

...

Right. I think I'll drop out this conversation with you about now.
This message was last edited by the player at 18:19, Sat 02 July 2011.

http://www.washingtonmonthly.c..._to_consid030648.php

No, the UN won't take over teh US. The Federal government will not disapear in a puff of smoke because we decide not to raise te debt cieling, even teh spiral collapse assumes a far to apssive role by the federal government in light of teh fact that we are dealing with a very large organization which has guns and nuclear weapons. In teh event of a full on collapse of teh federal government the US would have  amilitary dictatorship within 5 years, homegrown and with widespread suport as a stabilizing influence. It's not a matter of consipicy against the righteous republicans, it's a matter of how the world really works.

And for those with delusions that this would be equivelent to a Republican victory, this is the same organization that is standing up to the likes of McCain and saying yes we need to allow gays to serve openly- teh first large organization to welcome blacks as equal members, and teh organization that brought you the tailhook scandal. The beuacrats that will continue operating teh government offices are teh same FEC executives who hired teh people who got fired for spending all their time at work looking at porn, the minerals and mines will be the same people who have spent teh last decade attending parties hosted by the represenatives of big businesses and selling sex toys to those people as a side business and litterally sleeping wih teh people they are supposed to regulate.
The only thing that will go away is the civilian oversight which is part and parcel of a democracy, becasuse as part of the election strategy of one faction is to make government less and less effective to show how important it is to give them more power to mess up teh government with.

http://www.washingtonpost.com/...H_story.html?hpid=z2

I was surprised to read number 2. In 2006, the democrats were fighting to keep the debt cieling. One of the loudest senators was Barack Obama (and it passed because they were outnumbered by Republicans). Comes around, goes around.

#3 addresses something I brought up before, the cost of defaulting for a few days. Frankly though, I'm still not moved. $50b/yr is a lot ... but not compared to how much we're overspending by.

I was surprised to read number 2. In 2006, the democrats were fighting to keep the debt cieling. One of the loudest senators was Barack Obama (and it passed because they were outnumbered by Republicans). Comes around, goes around.

I'm not going to defend him. Opposing raising the debt ceiling is wrong and just plain partisan politics.

Matter of fact; the American debt ceiling should just simply be eliminated. No other western country has something like it and, as pointed out above, it's unconstitutional, violating the fourteenth amendment, since it calls into questions the United States' debts.

In reply to Falkus (msg #131):

Matter of fact: The reason so many other countries are in trouble is that they do not possess a debt ceiling.  As Maggie said, "Socialism is fine until you run out of other people's money."

As noted numerous times, our debt can easily be serviced.  We do not have to default if we reduce the size of government and quit spending money we don't have.  The problem is not revenue.  It is spending.  Kat explains that quite clearly.

Wealth Redistribution = Taking money from those who have money, and giving it to those who do not have money = theft

In reply to spoonk (msg #133):

Here is an analogy that shows how the US tax system works:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.  The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.”  Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings)..

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,”declared the sixth man. He pointed to the tenth man,” but he got $10!” “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than I!” “That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!” “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!” The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, democrats and progressives and liberals, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.

I like that story. Neat illustration.

Unlike the bar, however, the benefits of government are not distributed equally.
The wealthy have more assets protected, and benefit more from the stable operation of society, than the poor. Rich and poor alike may be prevented from sleeping under bridges but the police paid for with those tax dollars will also haul teh poor man away if he tries to sleep on the rich man's property.
A solid infrastructure will lower the price fo a por man's goods, but it also contributes to a rich man's pocket book as he can get his goods to market more easilly and get the materials he needs more cheaply.
A properly run government does benefit the wealthy more than the poor.

In reply to silveroak (msg #136):

Considering the size of the current welfare state and the recent growth of it, I don't see how your statement applies.  It actually seems to prove the point of the story perfectly.

But I do agree that:



This is as it should be.  The wealthy invest and pay the taxes that allows a nation to grow and employ.  If you can, please tell me where this properly run government exists?
This message was last edited by the player at 13:35, Fri 08 July 2011.

Let's not make this personal, please.

In reply to katisara (msg #138):

Edited for bluntness.

I'm not saying that this properly run government exists, but understanding what the idea should be is usefull in laying out what corrections are needed. If the issue is teh ammount of welfare being given out by the state then talking about the tax burden on teh rich is not the way to address it. I have posted my idea of a fair tax code before, it is rather lengthy, so I'm not going to post it again today, except to say that for the purpose of stimulating the economy we should probably reward actual job creation over simply being wealthy- put in another way I think Bill gates should have a lower tax rate than Oprah Winfrey.
In terms of state welfare there are two concerns that need to be addressed: entitlement and social cohesion. Some attribute the fall of teh Roman Empire to the fact that the benefits to poor Roman citizens went from being measured in cups of grain to being measured in loafs of bread. There is a lot to be said for this- grain can be planted and something grown from it, and bread is more expensive, further draining the coffers of Rome. Once teh bread and circuses became an entitlement and the spread of Christianity put an end to the orgies (which made for great social cohesion despite the lack of need for interdependant charity) the empire fell apart. Popularity was purchased with the coffers of the empire instead of supporting teh military and infrastructure and Rome fell to invaders.
Now the US is certainly nowhere near this state of affairs, but it does illustrate the potentially corrosive effects of state run welfare run amok, and at teh same time points out that Rome was built with a small degree of welfare in place- a measure of grain was provided for each citizen.
Personally I think if we took all teh food which is being purchased and destroyed as a part of the farm subsidy programs and distributed it to the underprivlidged that would be sufficient government charity.

Actually, I think if you look back, most people in the conversation agreed that the actions you pointed to were wrong.  Some people did argue that they were "expected" (which isn't the same as justified or right), others did get into semantics of what constitutes "thuggery," but as I recall, most were fairly quick to say that violence wasn't right, death threats weren't right, and the like.


Yes, I definitely agree here.  But I'd say that saying "those who think Walker wants to put teachers in concentration camps" is more along the lines of the latter than former, which was sort of my point.


Apologies, I was using a fairly literal meaning of "complain" when I said that, and didn't mean to imply it in a moaning/whining way.  Sorry if it came off that way, and I can agree that wasn't probably the best word choice on my part.

In reply to Tlaloc (msg #134):

I like this analogy, and think it has a lot in it.  The one part I'd take issue with, though, is that we're not really trying to figure out how to fairly divvy up a large windfall fairly.  While I'm sure there'd be some complainers in that case (no matter how we ended up deciding how to divvy it up), I think we'd be able to get through it fairly easily.  What's more the case, though is that we had a modest surplus (and still a very large debt), but divvied it up like it was a very big one, and ended up with a big deficit because of it (and then got into 2 long wars, let the economy crash, and made some big spends on stimulus).  So I think the end of the story would be a bit more like this:

They guys have been getting their one beer each for $100 a night for a while, and all is going relatively well.  Then the barman comes over and says "hey guys, just to let you know, we've got a special going now, so instead of $100 for all your beers, it's going to cost $98.  But since you guys worked up a pretty big tab the last few months, it's probably good to just put the extra $2 towards paying that off, yeah?"  And six of the guys say "Hells no!  We're gettin' cheaper beer!" (and the other four say "huh?  whatever").  So they go about divvying up the savings, and implement the same plan Tlaloc suggested (the one that saved a total of $20), and most of them are feeling pretty good about it.  The barman says "er...guys, you're like $18 short now..." and the rich guy says, "don't worry about it.  Since we're all gonna have all this extra money now, we'll soon be making lots more money, and everyone will be able to chip in more.  This gonna all pay for itself."  Five other guys say "sounds good to me!" and four others say "huh?  whatever."

After a while of doing this, they've got a huge tab, and the barman is saying "really guys, you gotta start paying more of your bills or I'm going to cut you off!"  And the rich guy says "okay, we've all had extra money to invest, so we should all be able to chip in a bit more, right?"  One guy says "yeah, I guess I'm doing a little better, so I can throw in one more dollar."  Another says "actually, I just lost my job, so I can't afford to put in any now."  The rest says "we're about where we were before, maybe a little worse off."  The rich guy says, "jeese! What's wrong with you guys?!  I've doubled my money!  I'm doing even better than I was!"  So the other guys say "well, okay, I guess you can afford to put more in then?"  And the rich guy says "what?!  No way!"  So the rest of the guys say "well, lets go back to how we were doing it before, when we were $2 over" and the rich guy says "no way!  That's raising the level I owe!"

How it plays after that is to be seen, I guess.  Whether they beat up the rich guy and he stops coming back, or whether the barman cuts them off and no one gets any, or whether they reach some kind of agreement is anyone's guess.

Tlaloc has said a number of times (and so have the republicans) that it's not a revenue problem, its a spending problem.  I disagree with the dichotomy.  It's BOTH.  Revenue is lower than it's been in a long time, and spending is higher than it's been in a long time.  We had the most expensive war in our history and paid for the whole thing on credit.  We gave a huge tax break that was supposed to "pay for itself," but which never did.  Taxes are at lower rates than any point in my life.  Yes, we have spending problems, but to say it's not a revenue problem as well is to ignore half the problem, in my opinion.

Remember, we had a small surplus just 10 years ago.  The things that have changed that are (in no particular order):
1.  two wars that were paid for by borrowing
2.  tax cuts for everyone
3.  a recession which has reduced tax revenue and increased spending
4.  stimulus spending to try to get us out of #3
5.  increasing costs of health care (note, whatever ones views on the affordable care act, we haven't really seen its major costs or benefits yet, so it's isn't really a major cause of our current financial situation yet.  It will become more so as time goes on, and we can debate about whether it will be a net positive or negative, or how big in a given direction, but it's not a large component of our current deficit or debt)

Numbers 1 and 2 are revenue problems (1 is also a spending problem), 3 is both a spending and revenue problem, but both are driven by the recession, rather than being things we can easily just legislate away (ie, we can't pass a law to ban recessions and make the problem go away).  4 was a spending problem, but is in the past, so isn't really a factor in short term deficit (it IS a factor in the debt, however).  5 is both (or either, I suppose) a revenue and a spending issue.  We can debate about what to do about it, but the only simple choices are "let people fend for themselves" or "make people pay more for what they're getting."  A debate over that is probably a good one to have, but is one which all politicians desperately want to avoid.

This is an interesting point. I know that TARP has been paid back, in full, plus interest. I've never seen anything on whether the tax cuts have been paid back. Yet, I still hear people bellyaching that TARP was a terrible plan, and the tax cuts should be done again.

If you are really going to fine tune this analogy then you need to include the idea that after giving them the discount the bartender slowly raised the prices as well.

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. - 14th Amendment, Section 4 of the US Constitution

Okay here is my case its black and white english all authorized by law public debt for payment are unquestionable - seems easy to read.

So here is my idea Obama get a pair of testicular fortitudes, sign an executive order ordering as president all lawful debts as approved be congress be covered in all vital programs (everything necessary to the safety, security, health and welfare of the citizens) on HIS authorization using this as the affirmative power to do so. Order it in effect until December 31st, 2012 and leave just discretionary spending like personal projects and such at the will of Congress to fund. Then let them deal with it.

The tea party will whine and its in the Constitution where is the wiggle room to really file complaints they are strict Conastitutionalists in the main.

The Republicans will be outraged but again its a power afforded him and Obama could say its there as statutory power that is very high up the powers food chain if I recall my civics.

The Democrats might like it or not.

But someone has to show we will meet our debts fast that is clear so he should go for it and assure our debtors someone gives a damn and he has the authority to do this, until a court says no. And that fight could take a year or more if it goes all the way up the Federal Court chain.

The president only has 90 day emergency powers, claiming perogative to over-ride teh budget from Aug to december would be a bit of an expansion upon that, one that would ultimately go to the supreme court i'm certain, along with teh constitutionality of authorizing spending but not authorizing raising funds to cover it, and other issues as to what exatly the fruit is going on in Washington.
If congress doesn't do something soon this will wind up with congress loosing power to the presidency.

Very well then do it for three months and have another ready to go in another 90 days. But its not an emergency power he is executing the constitutional demands of his offer under the 14th Amendment to fund necessary funding. And directing the government to do that.

Its still there in plain language and the programs in question are authorized and necessary and proper, he is just going to provide the funding on his signature to them.

It would be an interesting case is the 14th Amendment a core obligation in which case the government MUST raise the debt ceiling as needed or is it not? The language is pretty clear to me that its the first that upon enacting a program it becomes a necessary debt that must be met. It doesn't ignore congress they can opt to eliminate any programs they want or set rules for funding them. The house raised the revenues for them by approving the agencies after that its automatic these must be funded - period.

Of course from teh same perspective it could be said that the congress violated the law by authorizing the 2011 budget in excess of teh debt ceiling. If it is a constitutional issue then it is for the supreme court to decide, not the president, and if things are going to go that route somebody needs to start the issue in federal courts soon- now filing that suit probably would be the responsibility of the office fo the president, though if they do defult then anybody who doens't get paid or get tehir benefits would be able to file their own suit in federal court- even the Chinese government.

I saw the presidents speech he needs a legal brief ready, do at least a 90 day executive order raising necessary general revenues to meet our obligations under the 14th Amendment precedent and ask for a Supreme Court ruling ASAP on his powers in this matter.

Personally its unclear but since the 14th Amendment is a later revision it should take precedent, the Congress I pointed out still have power they can designate how a program is funded and do so or leave it to the general revenues. Then its a matter of public debts under the Executive Office and the Treasury. Its still quite fair to all.

Ruby, if you believe that is what the 14th says then you are also supportive of Bush's "unitary executive".  The Congress controls the purse strings and that is that.

What the 14th does say, based on Supreme Court rulings, is require the Treasury Department to prioritize payment of existing debt to bondholders over other spending in the event the debt ceiling isn’t raised.  So if the government finds itself short on cash, it has to keep paying the bondholders and find the necessary savings in some other part of the budget.

It is a Constitutional requirement that the dollar amount of the nation's borrowing can be approved only by Congress.  The 'debt ceiling' is the limit Congress has imposed on how much money the country may borrow.  The executive branch cannot constitutionally borrow a dime in excess of this amount.

If Obama shows that "testicular fortitude" you speak of he is acting outside of the Constitution.  But that would be nothing new for him.

Ummmm... why on Earth do tax cuts have to "pay for themselves"?  How do you justify allowing people to keep the money they earn and chalking it up to an expense for the government?  This line of thinking has always amazed me.  It's like people believe that money was the government's to begin with.

As for TARP paying back, GM took TARP money to pay back the government for its bailout.  Using government money to pay back the government isn't really payback.  If an accountant for a business shuffled around money like TARP did and claimed a profit that accountant would be thrown, quite rightly, in jail.

Technically the money was the governments to begin with- they printed it.
What I am wondering is where you find this idea that debts have to be paid back *before* other programs. The 14th amendment does say they hav eto honor their debts, but it does not specify a certain remedy in the case of fincancial crisis. I have heard that in one war a loan was secured by the united states with plans to sieze another nation's gold supply being used as the collateral. Certainly selling Afghanistan to China as payment of our debt would be an intriguing option...

Tax cuts don't have to pay for themselves.  However, numerous republican leaders (e.g., Mitch McConnell, Jon Kyl) have claimed that they do, and the justification for cutting taxes without cutting spending at the same time tends to be "oh, tax cuts don't cost anything because they pay for themselves, so we don't need to offset them with reduced spending."

Now, tax cuts don't pay for themselves, but they do need to be paid for if you want to balance a budget.  You can do that by cutting spending, raising revenue elsewhere, or, I suppose, putting it on credit to be dealt with by someone else.  When we implemented the Bush tax cuts (and when we extended them) we picked the last option.  That's led (unsurprisingly) to large deficits.  And republicans seem to want to blame those large deficits entirely on spending, and not on the reduced revenue.  This is the whole "we don't have a revenue problem" canard.

Imagine someone who works as a banker, and likes to buy big expensive cars.  They manage to make the monthly payments on time (just) because they're getting paid well.  Then they decide to work part time, so start making much less money.  But they still like their car, and don't want to give it up.  Do they have a spending problem, or a revenue problem?  They have both!  You might think they should give up their car, or you might think they should start working full time again.  Either solution might work (and each has their downsides that the banker might not like), but the problem started when he started taking in less money, so to say it's not a revenue problem seems disingenuous to me.

To turn things around a bit, if this (the current economic problems now, not the car analogy) isn't a revenue problem, what would be a revenue problem?

Printing legal tender does not make the wealth it represents the property of the government.  We do have property rights, for now, in this country.



The 14th addresses existing public debt to bond holders.  It does not have to give a remedy.  It just ensures that the Treasury has to pay off or service its debt before spending money on anything else.  It is up to Congress and the Executive to work out which programs get shortchanged.  This would stop new spending dead in the water while allowing our bondholders to continue having faith in the dollar.

By the way, Social Security is not considered public debt.  The Supreme Court has already shot down the argument that government benefits, even if they are labeled "entitlements", represent contractual obligations.  Not every government program is considered public debt.

The argument is actually that tax cuts allow for growth of the economy.  Which they do.  By allowing for more spending, investment and growth.  It is proven over and over again.  Even Kennedy cut taxes and saw higher tax revenue.

It is the Democrats that whine about tax cuts having to be "paid for".



You prove my point above.  And no they don't.



It's not a canard if it is true.  Look at the spending orgy since the Democrat Congress came into power in 2006.  Bush was at the punch bowl as well and didn't do a damn thing to stop it but the tax cuts brought in more revenue during his tenure and the IRS figures prove that.

As far as I can tell, you are both saying the exact same thing. Why are you disagreeing?

In reply to katisara (msg #156):

It is Tycho's misrepresentation of a Republican stance.  Tax cuts don't have to be paid for, they bring in revenue.  Their is a difference.  One looks at it from the perspective of the government giving away money it owns (the "paid for") vs. the reality of allowing people to keep their own money (the added revenue of an actual growing economy).

I see a clear difference.

Isn't bringing in revenue 'paying'?

No.  It is taking money from people who earned it to spend.  Paying for tax breaks implies the money is the government's to begin with.  It is not.

Is it paying when you have taken it in the first place?  Is it paying when you are forced to hand it over?

On a tax sidenote: I heard a great idea that would really engage people in the taxation argument.

Get rid of payroll withholding.

Every paycheck you would get your entire paycheck.  You can then write a check to the government every two weeks or whatever for your "fair share".  This would really hit it home how much the government actually takes from you.

Okay, so you're debating a completely different thread; the ethics of income tax. But in this case, it's a red herring.

If the government puts a tax break in place on the understanding that it will increase economic activity and tax revenue and so will result in a net gain for the government, I think it's reasonable to hold that tax break to that measure.

If the goal is to put tax breaks in place because taxes are bad in principle and need to be eliminated whenever possible, I understand your position, but it's a different topic altogether.

So far, so good.  But the question is, will the growth offset the loss of revenue.  And, though republican politicians tell us over and over that they always do, they almost never do.  In particular, they haven't in the case of Bush's tax cuts.


Yes (except for the "whine" bit), democrats think that if you reduce the revenue, you will either need to reduce spending or borrow more.  That's fairly basic math (not even economics).  They're admitedly not very good actually reducing the spending, but then again, they're not usually the ones who push for the tax cuts in the first place.


Please provide the IRS figures that prove that they brought in more revenue than was lost due to the tax cuts.  All the data I've seen says otherwise.  It's a bit hard for me to buy the idea that the economy grew so much during the last few years that the taxes paid in are more than they would be at the old rate, since, well, the economy seems to be a bit crap these days.  The glorious economic boom that the tax cuts were supposed to bring doesn't seem to be that glorious.

It's odd, really, that the republican response to a budget surplus (modest though it was) was huge tax cuts.  And their response to a large deficit is...well, the same thing.  It seems like "tax cuts are the answer!" for anything, no matter what the situation happens to be.

But lets take a slightly different tack here:  does it really matter, in your view, if the idea that tax cuts lead to more revenue is wrong?  If we could objectively show that the Bush tax cuts led to an increased budget deficit, would it alter your opinion of them in any way?  If it could be shown that tax cuts that aren't offset lead to deficits, would your view be altered at all?  It sort of sounds like you're more opposed to taxes on general principle, but are using the republic meme that they don't affect the budget at all to argue against taxes.  If that argument turns out to be false, would it affect your view, or just change what you use to argue for it?





Sounds like a semantic disagreement.  Call it what you like, but the idea that tax cuts lead to higher revenue is the claim (to me, that's "paying for themselves" but we can use your terminology if the difference is significant in your view).


Many people actually do this already.  When you're self employed you have to do so.  When I was in grad school I had to do so.  Paid my estimated taxes every quarter.  To be honest, it was the paper work I found most frustrating, not the money they took from me, but I wasn't making a ton of money at the time, and my patience for paper work is very low.  On a slight tangent, paying my taxes over here in the UK is WAY easier than it was in the states.  I pay a higher rate, but the headache of filling out my tax return is less...or, would be if I still didn't have to file a tax return with the US as well.
This message was last edited by the GM at 21:29, Mon 11 July 2011.

In reply to katisara (msg #160):

Calling it a "revenue" problem is the red herring.  Part of that red herring is the concept of paying for a tax break.  It means that the government is not spending outside its means, people just aren't paying enough taxes.

The debt is the bonds issued by the US and backed by the full faith and credit of the US.  Deficit spending is all the insane spending the government does that outstrips the money that it takes in from taxes, fees for government services, sale of these bonds and government land, all of that.  No one is saying we should default on our debt.  What I'm saying is we won't.  We can't.  I mean we literally can't.  We couldn't if we wanted to.  Well, we could if we wanted to if we just stopped accepting payments which is what we would have to do in order to do so but we cannot default, and there's no reason to default.

It's a scare tactic.  With the number of bonds that the Treasury has issued, it costs the government about $20 billion every month to service this debt.  But the government actually takes in about at least $200 billion every month.  So we easily have enough to cover the debt service of these bonds.  In fact, we could easily cover debt service even if the debt limit was slashed instead of raised.

What is being fought over here is additional spending and the desire to keep bloated government.

The goal is to stop government spending, reduce the size of government, reduce taxes, and grow the economy.  Look, the Democrats didn't pass a budget in over two years and now it is the Republicans holding them hostage?  The Democrats couldn't even pass Obama's budget.  So the only grown-ups in the room, the Republicans, stand up for prinicple and want to tackle the hardest questions and they are the bad guys?

They did for Kennedy, they did for Reagan, they did for Bush.  The Bush years, except for the first and last year, saw astounding growth in revenues.



Show me which Democrat is crusading for spending less.  The current batch are all spenders.  Obama, Pelosi, and Reid (Mr. Cowboy Poetry) are the worst.



What a strawman.  You can't compare the Bush growth in revenue, due to the tax cuts, and say you aren't seeing them "in the last few years" on account of the current recession caused by government meddling in the housing markets and Obama's class warfare.  In 2006 the Democrats were worried because an unexpectedly steep rise in tax revenues from corporations and the wealthy was driving down the projected budget deficit that year.



Because Republicans understand that people behave differently when tax rates are high as compared to when they are low.  With low tax rates, they take their money out of tax shelters and put it to work in the economy, benefitting themselves, the economy and government, which collects more money in taxes because incomes rise.  It is almost as though they believe that a growing economy creates jobs, innovation, investment, and wealth.  Crazy huh?

By the way, there was no Clinton surplus.  That was that wonderful government accounting which would put corporate accountants in jail.  Don't get me wrong, it was close but I don't want my government to think it is a money making venture.



The facts don't back that up so your question means nothing.



Okay.  Go ahead and objectively show me.  Being a libertarian I am against large, bloated government that takes money and throws it away without creating any wealth.

While you are researching your objective argument that proves that less taxes causes the economy to grow which causes more revenue in income tax, also prove that the current amount of money our government consumes does so wisely.

Anything that is a fact I will treat as a fact.  Years of studying economics tells me that more tax revenue comes from economic growth.  And economic growth happens when people can start businesses and invest in them.  Taxes kill that.

So fire up the research.

For you.  Not me.

For a governemnt in the modern era, taxes *are* it's means.
And if the government were to invest in industry as it did back in pre-colonial Europe, Republicans would scream bloody murder about unfair competition and socialized industry because the government is involved.
When reagen first ran "we need to cut taxes" was the truth. Now it is a mantra that threatens to defund the government.

Truth then.  Truth now.  Defunding the government is exactly what needs to be done.

Why? Because the US government needs to fall? Do you hate your own country so much you would see it fall from superpower to 3rd world nation with an impoverished dictatorship at the helm? because that is what teh result of defunding the government will be.

Your ability to read into a statement is breathtaking.

Actually, I love my country so much that I don't want to see its greatness diminished by a government full of bloat, fraud, and abuse.  I have faith in the American people to innovate and create wealth far more than I have faith in the ability of a large, centralized government that dictates who wins and who loses.

At least the lessons of the last century are not lost upon me.

Defunding would force the government to give up its bloat.  It would have to do more with less.  It would have to take its 15 different agencies overseeing food-safety laws and reduce it to one that runs more efficiently.  It would have to take its more than 20 separate programs to help the homeless and reduce it to one that runs more efficiently.  It would have to take the 80 programs for economic development and reduce it to one that runs more efficiently, or abolish it altogether.  The same can be said about the 82 federal programs to improve teacher quality, the 80 to help disadvantaged people with transportation, the 47 for job training and employment, and the 56 to help people understand finances.  Now I could go on and on and on.

It would also force government to not declare private companies "too big to fail" and would, perhaps, keep them from buying out private companies, kicking their bondholders to the curb, and handing it over to their Union lackeys.

I am sure you have a great defense for the waste and bloat.  Please, present it since you equate loving this bloated, wasteful system with loving one's country.

So yes, Silveroak, I am all about defunding.  It would force the government to fall back to the parameters of the Constitution.  A shocking concept I know.

Yes but if the Federal government needs less money couldn't the states raise taxes for programs as needed to meet the needs of their citizens from the funds the citizens then have in their pockets?

It seems to me its where the funding comes from and to where, not if some programs are good and bad.

Take welfare in the Great Depression states ran these programs in NYC you went to a state office with a request for a need and they would issue the money. Private charities like mutual aid societies also filled the gap as far as they could. The Federal governmnet moved to have work programs to give wages for labor as their main source of assistance such as the Hoover Dam project.

But now much of this is the Federal Governments duty as people and states seemed to want them to do these programs, no one fought when they did so very much. So if they need more money get it as its needed.

I would start by raising the tax base with 1% to a 60% range of tax brackets starting paying at say $2,000 of income up to the superrich, no tax breaks at all except for medical care. No charity donations, number of children, education costs etc. Businesses expenses are the cost of doing business but should be not exempted or given special consideration the reason is they must do these things to make an income. This would cut the paperwork down to almost nothing and you would know this year you pay 28% of your income to the government in taxes minus your medical care expenses. Simple. I don't care if your income is a SSI check you should have to pay something in even if its a few percent of that. This way everyone pretty much shares the burden as they can handle it.

Tlaloc, I do agree with your political position. We need to cut government spending. It's unfortunate we have to use the debt ceiling as a bludgeon to do it with, however it's better than the alternative.

However, I disagree with you on some of your supporting points.
-Tax cuts do not always lead to increased revenue for the government (or for the people). The result of tax cuts depend on the circumstances they're in. There's a very nice curve showing this. If you lower your tax rate from 1% to 0%, your revenue will go down. If you increase your tax rate from 99% to 100%, your revenue will go down. Similarly, 2% to 1%, 98% to 99%. There is a 'sweet spot' between these points; the ideal point where increasing taxes disincentivizes work enough that people profit less (reducing revenue), and decreasing taxes does not stimulate a great enough increase in GDP to increase revenue.

-People paying money to the government (i.e., taxes) is government revenue. They are the same thing. Any difference is posturing or semantics.

States are far better at knowing the needs of its citizens, except California.  Most welfare programs should operate at this level and no further.



This is the part that really stopped me.  Are you saying that the important thing is where money comes from?  It all comes from the taxpayers.  On any level.  At least when you rob them at the state level they can leave.

The real kicker to this statement is that it doesn't matter if a program is good or bad, just how you fund it.  Why fund bad programs?



So wipe out charity, destroy any incentive to start a business, hobble the existing small business community but hey, at least the IRS doesn't have as much paperwork to go through.

I don't think I am down with this tax plan.

In reply to katisara (msg #170):

Your premise is wrong.  Where do I say 0% tax?  We do need a government but a very small, lean, and efficient one that we can afford.

You keep arguing semantics and I am pointing out a very real concept where some believe that it is the government's money and that allowing the one's who earn it is "revenue".  Keep saying semantics all you wish but the concept of whose money it really is is the point of contention here and it is one that drives the argument of spending and tax cuts.

Take, for example, when Clinton proclaimed a budget surplus.  At a new conference a reporter asked when the money would be given back to the taxpayers.  Clinton shook his head and said that the money wouldn't be returned because the American people would only waste it.  That is a clear picture of how some view taxes.  They actually believe that government is in the business of making money and that the surplus was profit.

Its like Obama telling me that he doesn't have to cut spending but I have to "eat my peas".  Such arrogance and elitism.

So no, we do not have a revenue problem and we do not have to "pay" for letting people keep what they earn.  We need a government that controls spending and looks for ways to shrink.  Pure and simple: a spending problem.

We can agree to disagree on this since I have explained my position over and over on this issue.

That is a fat lie. If it was up to the states we'd still be arguing whether black people need freedom OR votes.



Not really. Some tax comes from the rich, some tax comes from the poor. Some tax comes from corporations, some comes from citizens. In Serbia we tax property by square meter and market value. Each year. If you own property on Dedinje (Beverly Hills) you pay more. Period.



The degree of competition between local governments in such a big nation as USA is a good thing. It's sad that other people don't have that luxury.



You're twisting words here. It's not that people should fund bad programs, it's that these bad programs are a drop in a bucket compared for instance to VAT, property or income tax rate.



No. Simply switch to flat 25% VAT rate and centralize tax collection. That way you'll for sure have for universal education and health care.

I was speaking in terms of welfare and financial assistance.  The Constitution is what civil and voting rights is based on.  That is the Supreme Court doing its job.



Ummm... what are you arguing?  Poor.  Rich.  Corporate.  They are taxpayers.  I didn't differentiate.  This wasn't a rich/poor contrast although the top 25% pays 86% of the taxes if you want to go that route.




Totally agree.  We do have pretty lax immigration laws if you're willing.



Oh yes, I'm twisting words here.  At least you clarified by saying that if it is a bad program it should be funded because it doesn't cost much.  Or something?



I don't know if I am down with VAT.  It depends the details of the implementation.  VAT tax fraud in Europe is rampant and it's effectiveness in the world economy, since VAT has to be eaten by the manufacturer, is minimal.  Even the EU argues round and round on its inefficiencies.

And no, I don't want universal education and healthcare.  Government runs both very poorly.

Frankly, I'm having a lot of trouble following your arguments at all. The discussion was about balancing the budget, and you're coming in with questions about whether the government has any right to tax at all, but you're doing it in a very confusing manner, fighting for individual tax breaks rather than just plain saying 'eliminate taxes'. Your argument so far seems to be suggesting you think tax breaks are always good. I really don't know. You lost me from your first post, and I'm just trying to catch up. But my point is, tax breaks are not always good, at least not for generating revenue. You say "Tax cuts don't have to be paid for, they bring in revenue. " That isn't always true, is my point.

Are we on the same page here? Do you agree that sometimes tax cuts do NOT bring in government revenue?



You are confusing terms. Revenue is just income. It has no bearing on whether that income is moral or not. If I steal $20 from you every day, that's revenue. You aren't arguing that. Please stop confusing the debate so you can make a political point. If you want to make a political point, just state it straight out instead of trying to redefine terms around it.



Again, you're confusing terms. Profit is the payout to the workers and shareholders. The surplus tax money is not profit because the government doesn't write it as a check to government employees. It is additional invested or available capital.

And yes, I still agree with your position 100%. We need to cut spending, and the number one killer is entitlement programs, which should be handled at the state level anyway. However, the way you are arguing your position is just plain confusing. You're misusing terms, abruptly changing topics, and otherwise making it difficult to understand your ideas. It is getting very frustrating to *AGREE* with you because of it. If I were disagreeing with you, I'd probably just give up.
This message was last edited by the GM at 14:57, Tue 12 July 2011.

from http://www.yourdictionary.com/defund


when you talk about defunding teh government then you are talking about cutting *all* revenue. there is no way for democracy to survive that act.
If you are not talking about defunding the government then there is some point at which tax cuts must stop.
There is nothing about reading into a statement here, it is simple math- without funding teh government cannot survive. It is not my fault that you posted a comment advocating the effective overthrow of the US government, even if you did so in ignorance.

do you have  alink to this news footage? I rememmber him saying that the responsible thing to do with it was pay down the debt, while the Republicans wanted to give it out in tax breaks to the wealthy. I have heard lots of people *say* this occured at a press conferance but there is a huge difference between a rumor and footage.

In reply to katisara (msg #175):

I would say our problem is that we mince words and attach a different level of importance on different ones.  I try to define and then others tell me to define more.  Once I define I get arguments and I address those arguments and then I am taken to task for not staying on topic.

A vicious circle.

In other words, we agree.  Done.

You could always read your own definition:



My only error seems to be that I didn't spell it out in the most simplest terms for you.  But wait!  I did!  Only you wish to ignore what I wrote in my expanded explanation of my use of the term defund.

Because as we all have seen here, I constantly proclaim my hatred for all things American and call for the overthrow of this country.  I can see where you could assume that.

In reply to silveroak (msg #177):

Washington Time, January 21st, 1999.  Here is a link but I ain't paying to get into the article.  His statement was a matter of public record at the time and caused quite a stir so I believe I will stick with it as true.

http://nl.newsbank.com/nl-sear...;xcal_useweights=yes

It might be usefull if you use the standard definitions rather than trying to redefine everything.
Yes the definition says esp. government programs, but when you defund that program you state that you are defunding that program to defund means to cut off all funds. period, that's what it means. If you can acknowledge that your response may have been made in ignorance and we go forward with 'what is an appropriate level of funding for govrernment' that is one thing, to to proclaim ignorance as enlightenment merely serves to belittle your own position.

So the best evidence you have is a paraphrase which doesn't even support your allegation?

is a very long ways away from Clinton saying teh american people would simply waste the money or throw it away because they are too stupid- even this paraphrase indicates only that Clinton thought the funds were best used by the government to shore up social security, with the words 'government knows best' inserted into a paraphrase as descriptive hyperbole rather than a direct quote.

the actual speach is here:
http://odur.let.rug.nl/~usa/P/...peeches/sud99wjc.htm

and


which is a very long way from what you 'quoted' him as saying.
FYI the site I gave is a transcription of his actual words, not the script he had written.

So very rich coming from this direction.



And yes, many government programs need to be defunded.



I believe I acknowledged that I used the word broadly and then went to specifics when questioned.  That is not ignorance since I fully mean that many parts of government need to be defunded.  Wiped out.  Period.

Now if you can acknowledge that over-the-top assessment and the questioning of one's love for their country is idiotic then we can go forward.  Hysterics does not serve your position.  If you can't acknowledge this then I doubt we have much more to discuss.

You didn't use the word broadly, you used teh word incorrectly. When you say "the government should be defunded" that means that *all* funds should be withdrawn from the *whole* of government. Your 'explanations' and back peddaling came *after* my response.

I would agree that some government programs should be defunded, but I suspect that we might disagree on which programs. Personally i think the DEA should be the first to go, which I believe would alos make health care more afordable once drug companies stop having so much beuracracy to deal with.

In reply to silveroak (msg #183):

Ummmm.... that's the State of the Union address.  The speech I referred to was in Buffalo on January 20th.  My quote is quite accurate to what was actually said at the actual speech I was referring to.

edited by GM Katisara to remove personal attack.
This message was last edited by the GM at 12:48, Wed 13 July 2011.

Arguing such artificial differences demonstrates your insincerity either to yourself or towards others.

You are arguing here infallibility of US constitution, when we both know that just because writers of US constitution failed to mention something doesn't mean that it's not an inherit human right. (We know opposite to be true as well, but that's not the subject of this discussion.) Democracies around the world in their constitutions, as well as United Nations in numerous documents rectify these oversights.



Precisely my point. Had they pay all 100% (better yet 200%-300% of current taxes) they still would have more money than they need (and deserve).



Sadly (but possibly unsurprisingly) American Serbian community is less obnoxious than Austrian Serbian community.



Precisely. It's far more important to introduce VAT.



All I know is that first (and only) time Serbia had budget surplus was right after introducing VAT.



Maybe, but in Serbia no politician ever questioned it after it was introduced. That can mean only one thing -- it's getting them money.



Of course you don't. You believe whites have all the healthcare and education they need and know that it's blacks and Mexicans are the one lacking them.



I never said that I want government-run health care or education. In Serbia we no longer have a single (partially or fully) government owned bakery, but government still dictates both top price of bread and percentage of flour that a bakery must spend on cheap bread. And had you ever been in Serbia you'd know that only France and Italy have better dough.

Sadly when it comes to health and education, it's becoming more and more obvious that private schools and hospitals can provide similar (if not better) service for less money. So much so that successive governments are constantly contemplating hiring private hospitals and schools for government-financed students and patients.

The site you gave indicated it was refering to the state of teh union address, sothat is what I addressed. if you care to provide evidence of this supposedly well known speach, then I will address that evidence.

I believe what you are refering to is the post- address speach where he is quoted by the Washington Times as saying

whereas what you claimed he said was

which is in fact not what he said- he indicated, to paraphrase, that the risk of squandering it carried unacceptable costs, not that squandering the money was inevitably what the American people would do.
But ultimately Bush attempted the alternate approach and proved Clinton right.
This message was last edited by the player at 17:17, Tue 12 July 2011.

I am replying to Tycho, Kat, and you and I am not allowed a term used too broadly?   Should I have expanded?  Sure.  And I did after which, if you read back, your response.  I don't dispute that do I?  No.  I explained myself.

Even though I have never spoken of wiping out the US government, or revolution and have spoken of wiping out various government programs and shrinking government I can say that I knew what I was talking about but should have narrowed it down for a written forum populated by literal minds who dissect every word while ignoring the topic as a whole.  I admitted error in broad terminology.  Perhaps you can admit error in hysterical renderings of others?



Of course we'll disagree.  But not on that.

While it is acceptable to point out ignorance, phrasing it like this is condescending, disrespectful, and not permissible behavior.

Thank you.

The thing is this.
I had written that tax cuts cannot always be good unless the eventual goal was to defund teh government.
*You* were responding to *my* statement, in which I was pointing out that whether tax cuts are good or not is situational.
Your reponse to that seemed to be saying that tax cuts would always be good and that government (the whole of it) should be defunded.
So no, within that context I did not overeact because that is what you said.
If what you say is not what you mean that is not my responsibility.

In reply to silveroak (msg #185):

The link show this right at the top:



So lets do some of that "simple math" you love so much.  State of the Union is January 19th.  The speech being referred to appears in the Washington Times refers to a speech on January 20th in Buffalo.  Another indicator, that most would have picked up on, was the "crowd of nearly 22,000" that was cheering.  How many State of the Union addresses have you seen with a crowd of 22,000?

I suppose the Washington Times is now as invalid a source as Fox News?  Noted for future reference.  Like I said, I won't spend the money even to prove you wrong.

So then you have no actual proof, you will just assume it is there?

http://www.thefreelibrary.com/...+RALLIES.-a083600772
also refernces teh speach, without having to spend money, but doesn't have any quotes about "the American people will squander it" only precautions that we cannot affoard to squander the surplus due to future obligations.

Which is wrong when you say it like that.



I was.



And then I went on to clarify that I used the word to broadly, multiple times, but that defunding government programs is indeed a great idea.



Yes, calling me to task over my blatant call for the end of America and asking if I hated my country was not overeacting at all.  No.  Not at all.



Ignoring an extended explanation of my meaning is.

In reply to silveroak (msg #195):

As I said, I was around when it happened and remembered the backlash against it.

It is telling that you pick a source that doesn't present the whole speech:



I am sorry to say this but I am not going through a paywall to prove my point.  I have better things to spend my money, or the government's money depending on how you technically look at it, on a forum argument.

Take it, leave it, declare victory and dance around it.  I don't care, it was such a small point of my overall argument.  It does show Kat what I have to deal with though.  Such a small molehill into a mountain.

I was actually pointing out the Supreme Court executing of its Constitutional duties in regards to civil rights and voting rights.



So government is decision maker on who has enough money?  What Constitution did you read?  Certainly not the US one.



I work with a Serbian programmer and one of friends is a Serbian linguistics expert.  Very nice people.



So VAT is needed to fund programs that don't get results or waste money.  Noted.



One size does not fit all.



I am happy it works in Serbia but it seems to have problems in other nations.  That is why I am interested in the details of how one would implement it here.



Wow.  Now I am a racist.  Even though government intervention has devastated the black community I am supposed to jump on that train because, if I don't, I am to be labeled a racist.  Excellent approach and very logical.

And I thought others read too much into my posts.  You put those guys to shame!



Healthcare and Education = Bakery?



Why sadly?  If it provides better service than government run institutions then isn't that good?  Is it profit you find evil?

Guys, I would appreciate it, with just my "another debater here" hat on, not my moderator hat on, if you would stop attacking each other, and focus on the actual points of disagreement.  If someone clarifies what they mean, let it stand and move on.  Please don't call into question each other's morality/patriotism/honest/etc. in every other post.  It gets old.  Please don't intentionally inflate people's claims to mean more than they do.  Misunderstanding what they say is one thing, but there's a big tendency here to make "oh, so now you're saying its okay to torture kittens?!" type statements.  You don't have to agree, but it'd be nice if you could act a bit more civil while disagreeing.

Indeed. Tzuppy, comments implying other users are racists really aren't necessary, and I'd appreciate it if you could remove that.

Katisara: Question, would four trillion in cuts over the next ten years be considered a satisfactory deficit reduction to you?
This message was last edited by the player at 19:11, Tue 12 July 2011.

Just remember that when the racist card is pulled, the person has run out of things to argue about so now they have to discredit you.

I've heard a lot of politicians say this (well, not so much about the Kennedy ones), and I've read quite a few economists who say otherwise.  To be honest, I don't think we can objectively say which is right, because there's too many contributing factors to isolate one variable.  But, since you've claimed it, please show me the evidence for this proposition.

For what it's worth, I think taxing the wealthy at 78% was too high, and cutting taxes on them was a good idea.  Did it lead to a net gain or loss in revenue, I can't say for certain.  Wouldn't be too surprised either way.  Reagan seemed to think his cut was too big, however, because he later raised taxes quite a few times to increase revenue.  All that said, though, I don't see any real evidence at all for the bush tax cuts leading to a net increase in revenue.  Some politicians seem to claim it, but even the economists who worked for Bush and pushed the tax cuts don't claim that it lead to higher revenue.  Like I said, I'm happy to look at the evidence you're willing to provide, though.

For clarity, and to avoid confusion, let me make clear that I can agree that tax cuts can stimulate the economy, and lead to increased growth.  However, the issue is whether they do so to a degree that offsets the reduction in revenue due to the tax cut.  If taxes are really, really high, it's possible, but I don't think 35% is on that side of the laffer curve.


Well, apparently Obama put forward a proposal that cuts more than what the republicans are putting forward, and includes cuts to the military, social security, and medicare.  It hasn't made him all that popular with his party, but republicans still seem to say "no tax increases no matter what!"  But go back to what I originally said.  I didn't say democrats are "crusading for tax cuts" (if anything, I said the opposite--that they're not doing a good job of pushing for tax cuts).  What I said was that, unlike republicans, they think that if you tax in less money, you're going to either have to cut spending or borrow more.  To me, that's just basic finance, not some ideological position.  If you take in less money, something else has to give.  That's why dems tend to not favor tax cuts.  On the other hand, republicans these days seem to deny the basic math, and claim that you can cut taxes and it doesn't affect how much you can spend or need to borrow.

[emphasis added]


Let me repeat my request for the information you said proved your case.

Also, you seem to be saying that it's not fair to consider the result of Bush's tax cuts because we're in a recession.  Does that apply to other president's policies as well?  Is this a general rule, that recessions don't count, or is it just for the Bush tax cuts?  I'm fine with counting them always, or counting them never, but I'd rather not leave as a pick-and-choose thing, because everyone will always ignore the ones that don't help their side, and focus on the ones that don't help the other.





So, you're saying that we're always on the far side of the laffer curve?  That no matter what tax rate we're at, it's always a net revenue gainer to cut taxes?  Lowering taxes can help the economy.  The higher taxes are, the more lowering them helps.  But saying that taxes are always the solution to a budget shortfall OR a budget surplus implies that the proper tax rate isn't situation dependent.  It says that no matter what the tax rate is, it should be lowered.  That's not sound economics.



An interesting claim.  Please provide your evidence?


On this, at least, we can agree.  Actually, it's refreshing to hear a conservative say this.  Usually it's all "the government should be run like a business!" or "government doesn't work because it doesn't have a profit motive!" and the like.  Knowing that someone else agrees that treating the government like a business isn't going to lead to the kind of government we should want is encouraging.  (and in this debate, we should probably take whatever level of agreement we can get! ;) ).



It's a hypothetical.  We disagree about the facts, and I don't see much chance of that changing, really.  But if we take a step back, we might be able to agree on general principles, and realize that our goals are similar, we just disagree on how best to get there.  So, please humor me, if it turned out that a tax cut actually led to a revenue shortage, would that change your view on tax cuts at all?  Put another way, is the tax-cuts-generate-more-revenue idea the actual reason you're for them, or is it just a pleasant side effect, in your view?  Would you want lower and lower taxes, even if they didn't have this revenue-boosting effect that you claim they do, or would that make you say "hmm, cutting taxes would mean we'd have to reduce spending too, and so cutting taxes would need to be weighed up against the services lost?"


Wow, that's a bold stance!  I guess the "pro-bloat" and "throwing away cash" lobbies will be worried. ;)  Seriously, though, do you think anyone is actually for these things that you claim to be against, or do you think they just disagree on the effectiveness of the programs in place or propossed?


Did I claim the government currently spends all its money wisely?  If so, I happily recant!

I'll show some stuff I've dug arguing that tax cuts don't always pay for themselves:
http://www.thefiscaltimes.com/...-for-Themselves.aspx
http://www.time.com/time/magaz...9171,1692027,00.html
http://www.edlotterman.com/RWE/Articles/20101031.htm

I'm sure you can find plenty of websites that say the opposite.  Where does it leave us?  We can go to the actual data ourselves ( http://www.presidency.ucsb.edu/data/budget.php ) (if you want to apply a correction factor for inflation you can use this: http://oregonstate.edu/cla/pol...ion/excel/cv2011.xls ), but again, I don't know that it's going to convince either of us of much.  I plotted this all up, in 2011 dollars, and it looked to me like revenue grows fairly steadily most of the time, but fastest for longest time during Clinton's era (who, remember, raised taxes, and gave us a surplus (pending your claim that that's just an accounting trick, of course)).  GDP grows pretty nearly linearly for the past 50 years (Again, in 2011 dollars), with short periods of slow-down during recessions.  (note, if someone more handy with html can tell me the code to put a png file into these posts, I can post the plots I made).  Where does this leave us?  How should we figure out who's right on this?


Hadn't realized you had spent so much time studying economics.  Am just a dabbler myself.  Salt water or fresh water school of thought?

Anyway, let's try this:  What level of taxes do you feel is optimal?  Say you get to set the size of government exactly where you want it, get to cut out all the programs you don't like, set up all the ones you do like exactly how you want.  What level of taxes would you feel was fair to pay in that situation?  What level of taxes would you feel would be necessary to pay for it?  Say, for some reason, all the services you feel the government should provide turn out to be more expensive than you expect (again, this is a hypothetical, just bear with me and give it a go), what do you do?  Cut services, raise taxes, borrow, something else?  Alternatively, say the government isn't providing the services you think it should, and is already running a deficit.  What do you think they should do?  Cut services further?  Raise taxes?  Borrow to pay for more services?  (to save us some time, if you just say "improve efficiency" to either of these, assume that you've tried that already, and haven't managed to squeeze any more efficiency out of them).

I ask these questions because I think it'd be good to get a bit of common ground on some general principles.  Right now, it seems like we're struggling to agree on anything at all, so I feel like we need to dig a bit deeper, and find some more fundamental level of agreement we can lean on to move forward.
This message was last edited by the GM at 19:57, Tue 12 July 2011.

To me personally?

I'm not married to any particular number. My issue is that our spending is outstripping our income, and our credit cards are about tapped out. If they raised tax rates 5%, I would be okay with that (in regards solely to debt reduction). You can't spend more than you make without SERIOUS cause. Even if we did have 'serious cause' before, given how deep our debt is, the level of seriousness has gone up and we just aren't meeting it.

This is related to, but not identical to, reducing unnecessary spending. If you can find four trillion dollars of stuff worth cutting, than it needs to be cut. We shouldn't have a budget deficit to cut four trillion that we don't truly need. This is especially true when we're talking about government, which is bound not only by sensible spending, but also is answerable to all her citizens, and whose every dollar spent is a further infringement on the rights of her people (albeit, at times justified).

This is also related to, but not identical to, cutting taxes when possible. Taxes are, by their nature, an infringement. If the government ran solely on donations, I'd say let them spend on whatever they want, but they don't. Taxes are forced at the barrel of a gun. So taxes should not be raised for something unless that 'something' is of compelling need for all people.

Servicing the debt is a need for all people; it's a matter of national security. Highways too, since all (or very nearly all) people use highways, and highways are not contained within a single state. If a program can't meet these criteria, it shouldn't exist at the federal level, and taxes should not be raised to support it.

Of course. The point is that it took them how long to abolish the slavery? How long to give blacks equal protection under the law? How long to allow blacks to vote?



But government is a decision maker who to tax and how much. Isn't it?



Well, I might start looking for a new job rather soon...



Shrug. My mother used to say that if you don't learn from others' mistakes you'll have to learn from your own. It looks to me that America likes to pretend that it's the only free democratic country in the world. Sad, both for US and the world.



I don't pretend to know great deal, but here's what I remember from some seven years ago.

1. They did tax overhaul. Considering how big mess Milošević left, it was necessary. I also remember politicians saying that VAT needs some serious support legislation, but since I didn't know how huge success VAT would be I wasn't paying much attention. I remember thinking at the time that if that tax overhaul was successful, it would be the first since 1912. Guess what, it was.
   
2. They forced everyone to use fiscal cash registers. Again I don't know exactly how they work, but judging from how much traders hate them I'd say they do some serious damage to their tax evading ability. One should also notice that until that point Serbian traders were known far and wide for their skill in dodging taxes. Prior to that Serbia's tax collecting was known to be just as inefficient as Greece's. And just for the record, Greece was known for its inefficient tax collecting looooong before the current crisis.
   
3. They centralized spending. I'm guessing that this one was more to control waste than anything. Not sure how applicable this is for country size of US.

Are you denying that whites in US believe that they have all the health care and education they need?



I do my best to outdo others.



Laugh all you want, but providing bread historically was one of the most important public services the state needed to ensure. It still is in some parts of the world.



I find profiting in health care and education to be morally objectionable. But as I'm growing older I keep agreeing with this point of yours more and more.
This message was last edited by the player at 13:23, Wed 13 July 2011.

http://www.politico.com/news/stories/0711/58801.html

Looks like the McConnell and the rest of the Republican leadership blinked.

Good; now I most likely don't have to worry about an economic collapse while I'm looking for a new job.

In reply to Falkus (msg #206):

Yeah!  Now the government can continue to spend money!  Win!

So you believe this is a blink?  You should note that Obama is the one threatening to cut of SS checks.  He doesn't have to but he is the one holding them hostage so he can push his agenda, which is spending and umm... more spending.

But really look at McConnell's plan and see how it works:

Congress would agree to vote to authorize the president to propose three separate incremental debt ceiling increases, spaced over the remainder of his term.  He would be required to couple each request with a corresponding set of spending cuts that exceed the dollar amount of his sought-after debt limit hike.  These cuts would be of his choosing alone.  The first pair of requests would come prior to the August 2 deadline.  It would be for roughly $700 Billion.  The next requests, for $900 Billion, would come in the fall, and the final one, also for $900 Billion, would be scheduled for summer of 2012, right in the thick of the campaign cycle.

On each occasion, Republicans would overwhelmingly vote to disapprove of the president's debt ceiling increase request.  This allows GOP members, and vulnerable Democrats, to technically vote "No" on raising the debt ceiling.  If simple majorities in both houses vote to disapprove of the president's requests, he would be forced to veto each disapproval, pinging the issue back to Capitol Hill.  If Congress can’t override those vetos with 2/3 majorities, and Republicans won't have the votes, even with some Democrats, the debt ceiling will increase.  But not without the exacting a substantial political price from the president and his allies in Congress.  They will own the debt ceiling hike.  Period.  Members of Congress who vote with the president will set themselves up to be targeted by brutal attack ads, "so-and-so has voted to increase the national debt limit three times in the last year alone," etc.

Considering that Americans oppose the ceiling hike 2 to 1 in recent polls this is a win for the GOP.

So the default armageddon all the chicken littles are screaming about, which can't happen anyway, is defused and it pins the outrageous deficit spending firmly on Obama and the Democrats.  It also showcases their inability to tackle tough issues like entitlement solvency.

McConnell and the GOP are the winners in this one.  If that is blinking then blink away!

I will get to you Tycho.  I don't want to rush my response to you since every word will be examined under a microscope.

Nobody in the US believes they have enough health insurance.

FYI, for the record, Tlaloc, my statment that you are objecting to occured *before* your explanations. I refuse to appologize for not taking into consideration statements you had not made yet. I am simply not that accomplished at precognition.

To defund the government is, by definition, to eliminate the government, so in fact I *was* responding directly to your call to eliminate the government.

As for taxes, I have posted my model a few times (raise capital gains taxes to stabilize the economy, eliminate taxes on dividends from investments)

also I believe in private health *care*, it health *insurance* that I believe to be a den of thieves which would be better off managed by the government.

I believe I have enough health insurance.



Um, again, from the point of view of someone who agrees with you, yes, I do think he needs to make that threat. If they cannot come to an agreement, a cut must be made somewhere. Cutting payments to debtors isn't an option; the economic impact would be HUGE. Cutting food and equipment for troops overseas isn't an option. People die. Cutting medicare isn't an option. Again, people die. Cutting social security ... the number of people who absolutely depend on social security is pretty low. For most people, it's in addition to another source of income. I assume those in dire need will be able to fall onto another stopgap program. But regardless, he does need to choose A program to cut until the spending issue is addressed and SS, being one of the four huge money sinks, seems the choice which causes the least harm.

Honestly, I would be happy if he cut off SS to all incoming people permanently. I'm really praying for that day.



I do agree with you though that McConnell's plan isn't 'blinking'. It's an ingenious and irresponsible political trap, meant to cast blame without actually solving problems. No actual cuts have been approved. No tax changes have been approved. There's no actual change.

Lemonade out of lemons my friend.

It is an excellent bit of political manuevering but it is no less irresponsible than holding back SS when you don't have to.  There are so many other things he can shut down before witholding SS checks.  He certainly isn't going to budge on tax hikes and he certainly isn't the voice of compromise.

It's a political "trap" that permenantly cedes to the presidency the power to regulate debt. Politically expedient and one more step in ending our democratic system of government.
If he they do pass that now then teh president can simply raise the debt as necessary, and will be negotiating from a position of greater strength. The Republicans are banking n teh idea that putting him in that position will cost him the 2012 election, but if he handles it responsibly it could help cement his re-election. After all it is easy to stimulate an economy with debt (Regan did it!)and he could easilly wind up with creit for fixing the economy by postponing the crisis.
It also means that in the future any president would have teh ability to *not* raise the debt ceiling and then decide which parts of the budget to enact.
Now from a legislative perspective money for bringing the troops home is not specified in the 2011 budget to my knowledge, being under discretionay spending. I would hate to be in teh Republicans shoes if teh President winds up explaining on National TV that the plans are in place to bring the troops home but that Congress won't raise the debt ceiling to pay to bring them home.

No it doesn't Congress is still in control and does the Constitution say how they are to declare the raising of debt and obligations and taxation. No.

They just say your the executive officer fine under the 14th Amendment you have the duty to pay our debts as our branch legislated we will maintain oversight in the power of a vote on this matter, up or down by a simple majority in the house. Fair and fully acceptable use of powers.

As for bringing the troops home that is easy the president under his signature ORDERS all troops outside of intelligence and anti-terrorist covert operation out of the regions, war zones in say six months. Period. HE is commander of all armed forces and the generals and military must obey him or be violating their oaths of service. We could be out in no time and everyone here knows it. That would save lots of money. As for equipement to big to move make it a gift to the nations they are in owns military, just take out what we can.

In reply to silveroak (msg #211):

Where do you get the permanent part of allowing three distinct debt ceiling raises?

actually under the 14th amendment the legislature, not the executive branch, is responsible for paying all of debts, including the already approved budget.

and from what i read it does not specify three specific instances, (of course this is still just a proposal and may be revised) but simply grants the president the power to raise the debt ceiling, and leaves congress teh ability to override that raising of the debt ceiling.

I do agree with you though that McConnell's plan isn't 'blinking'.

It's blinking because he's not willing to risk an actual default, and it's the first time they're really willing to admit that they don't want it to go that point.

It's an ingenious and irresponsible political trap, meant to cast blame without actually solving problems. No actual cuts have been approved. No tax changes have been approved. There's no actual change.

Speaking as a guy hunting for a job who would be strongly, negatively impacted in a very real way by a default: No change works just fine for me.

It's amazing how a single week can truly change your priorities. I don't care about the present or future American debt anymore. I only care about the decisions your government makes impact my livelihood and ability to seek employment.
This message was last edited by the player at 17:00, Wed 13 July 2011.

In reply to silveroak (msg #214):

The plan calls for three distinct rises in the debt ceiling.  But, as you say, it can change in the actual write up.

He stated from the start that he wanted to do good but wasn't willing to do harm.  That is the statement that, I believe, provoked Obama to hold SS checks hostage.



Speaking as one of the people who pays taxes, it doesn't work for me.



That is quite apparent.  You are a fine capitalist.

The part (of teh article) I am refering to is


which implies that teh power to raise teh debt goes beyond this one off situation.

Realistically they should be addressing the 2012 budget, not playing political games threatening to ruin the US credit rating if they don't get their way.

Exactly what part "implies" that?  I would say the actual language regarding three specific raises would trump any implication you see.



Realistically it was the Democrats failure to create a budget for the last two years which has gotten us to this point.  The Republicans wanted to tackle entitlement spending, which needs to be addressed, and the Democrats attempted to beat the crap out of them for it.

Don't point a finger at the Republicans when the Democrats had a firm hand, since 2006, in creating this current mess.  I say, if it gets Obama out of the White House it's worth it since we won't, and can't, default and thus, won't ruin our credit rating.

Geithner and Bernanke’s threats sound eerily similar to those made by former Treasury Secretary Hank Paulson before the 2008 bailout vote. In an effort to stampede lawmakers into voting for the bailout bill, Paulson threatened lawmakers with “martial law in America” if the legislation failed to pass.

Just fear mongering is all.  Need to instill fear into people in order for them to give up something they have.  Even one senator has proposed that the budget should be handled by the president and not have congress get involved in it at all.

This message was deleted by the player at 19:57, Wed 13 July 2011.

Just an article I stumbled upon.  As you already know I lived on the streets for a year and I can confirm that you can't sleep in your car or even on the streets.  Feel free to pass over it as it is a large article.

---

Tonight Tens Of Thousands Of Formerly Middle Class Americans Will Be Sleeping In Their Cars

The Economic Collapse
July 13, 2011
despair

Economic despair is beginning to spread rapidly in America.  As you read this, there are millions of American families that are just barely hanging on by their fingernails.  For a growing number of Americans, it has become an all-out battle just to be able to afford to sleep under a roof and put a little bit of food on the table.  Sadly, there are more people than ever that are losing that battle.  Tonight, tens of thousands of formerly middle class Americans will be sleeping in their cars, even though that is illegal in many U.S. cities.  Tens of thousands of others will be sleeping in tent cities or on the streets.  Meanwhile, communities all over America are passing measures that are meant to push tent cities and homeless people out of their areas.  It turns out that once you lose your job and your home in this country you become something of an outcast.  Sadly, the number of “outcasts” is going to continue to grow as the U.S. economy continues to collapse.

Most Americans that end up living in their cars on in tent cities never thought that it would happen to them.

An article in Der Spiegel profiled one American couple that is absolutely shocked at what has happened to them….

    Chanelle Sabedra is already on that road. She and her husband have been sleeping in their car for almost three weeks now. “We never saw this coming, never ever,” says Sabedra. She starts to cry. “I’m an adult, I can take care of myself one way or another, and same with my husband, but (my kids are) too little to go through these things.” She has three children; they are nine, five and three years old.

    “We had a house further south, in San Bernardino,” says Sabedra. Her husband lost his job building prefab houses in July 2009. The utility company turned off the gas. “We were boiling water on the barbeque to bathe our kids,” she says. No longer able to pay the rent, the Sabedras were evicted from their house in August.

How would you feel if you had a 3 year old kid and a 5 year old kid and you were sleeping in a car?

Sadly, if child protective services finds out about that family those kids will probably be stolen away and never returned.

America is becoming a very cruel place.

Unfortunately, what has happened to that family is not an isolated incident.  As rampant unemployment has spread across America, the number of people that have lost their homes has soared.

Today, it is estimated that approximately a third of the homeless population in Seattle live in their cars.

It is even happening to my readers.  A reader named JD left the following comment on one of my articles a while back….

    I was laid off from my construction job almost 2 yrs ago was on unemployment for over a year they cut me off last September so I lost my apartment. Since then I've been couch surfing and hotel hopping. Now I occasionally sleep in my car. I was lucky enough to have a friend with a lawn care business so i can at least put ever increasing gas in my car\house. I hate to say it but I think we will see hoovervilles in the major cities soon. When the welfare & food stamps & all the other govt. programs end the anarchy begins.

Desperation is rising all over America.  Most people had hoped to see an economic recovery by now but it just hasn’t happened.

The phenomenon of Americans living in their cars has become so prominent that even Time Magazine has done a story about it….

    For people who cannot afford rent, a car is the last rung of dignity and sanity above the despair of the streets. A home on wheels is a classic American affair, from the wagon train to the RV. Now, for some formerly upwardly mobile Americans, the economic storm has turned the backseat or the rear of the van into the bedroom. “We found six people sleeping in their cars on an overnight police ride-along in December,” says John Edmund, chief of staff to Long Beach councilman Dee Andrews. “One was a widow living in a four-door sedan. She and her husband had been Air Force veterans. She did not know about the agencies that could help her. I had tears in my eyes afterwards.”

Unfortunately, it turns out that sleeping in cars has been made illegal in many areas of the United States.

In many cities, police are putting boots on the cars and when the homeless owners can’t pay the fines the vehicles are being taken away from them.

Venice, California is one place where people have been arrested for living in vehicles.  Venice had been a popular spot for people living in their RVs to go, but police started arresting people that were living in RVs and they began towing away their vehicles. The following is an excerpt from an article that appeared on the Daily Kos website….

    They took Eric while he was changing his battery in his car. Claimed he lived in his car. A few days later they went to 3th Street and took his RV because he was in jail and no one moved it for 72 hours. Saturday they did a sweep of 7th and took Bear and his RV. They also took Elizabeth’s RV but do not know if they took Elizabeth but can not find her. The police went to 6th and took the white RV that always parks by Broadway on 6th. Everyday they take 1 to 4 RVs. Very soon there will be no one left.

Once you are down on your luck in America you will quickly find that authorities will try to take everything else you still have away from you.

The United States can be a very brutal place to be if you are poor.

All over America, communities are making tent cities illegal or they are simply just chasing them away.

It turns out that many Americans really don’t like large numbers of homeless people camping out in their neighborhoods.

But many of those now living in tent cities used to be just like you and me.

What is being done to tent cities in some areas of the country is absolutely disgusting.

For example, who could ever forget this video of police in St. Petersburg, Florida using box cutters to slash up the tents of the homeless….

http://www.youtube.com/watch?f...ed&v=LrPdZmPB36U

What goes through your mind when you watch something like that?

If you don’t feel at least a little bit of compassion for those people then something is wrong.

You never know – you might be the next one forced to take refuge in a tent city.

In many U.S. cities, it is even illegal to sleep on the street.  If you are homeless I am not sure what you are supposed to do.  In some areas of the U.S. you can’t sleep in your car, you can’t sleep in a tent city and you can’t sleep on the street.

So what should we do with all of the Americans that are being forced out of their homes by this economy?

Should we just round them all up and put them into fenced camps?

Don’t laugh – we are getting closer to that kind of thing every day.

We live in very frightening times.

Poverty is absolutely exploding in America.  The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.  There are 44 million Americans on food stamps.  If it was not for measures like these, the streets of America would be filled with destitute people.

Things are tough out there and they are about to get tougher.

At the beginning of next year, the extended unemployment benefits that have been helping the unemployed during this economic downturn will expire.  Up to now, many unemployed Americans have been able to enjoy up to 99 weeks of unemployment benefits.  Now that is coming to an end.

According to the New York Times, this is going to drain 37 billion dollars out of the wallets of unemployed Americans that are just barely hanging on.

What in the world is that going to do to the economy?

This all comes at a time when it looks like unemployment is going to start rising once again.

Cisco has just announced that they are going to be laying off 10,000 workers.  Other large firms are expected to announce more layoffs shortly.  The number of good jobs continues to shrink.

There are other signs that the economy is slowing once again.  Pre-orders for Christmas toys are way down.  Vacancies at U.S. shopping malls are rising again.  Nearly every major poll shows that Americans are extremely pessimistic about the economy right now.

So why in the world is all of this happening?

Where in the world did all of our jobs go?

Well, it turns out that millions of our jobs have been shipped overseas where the labor is far, far cheaper and it is really starting to catch up with us.

On The American Dream website, I just finished an article entitled “How Globalism Has Destroyed Our Jobs, Businesses And National Wealth In 10 Easy Steps“.  It is a 2500 word essay that explains how globalization has absolutely gutted our economy.  The article will hopefully help you understand why so many good jobs have left the United States and why they aren’t coming back.

Many of our great cities that used to be the envy of the entire globe are now a bad joke to the rest of the world.

The following is what one reporter from the UK found when he visited one of the worst areas of Detroit….

    Occasionally a half-ruined or half-burned house still stands to remind you that this used to be a cityscape. Pathetic, besieged knots of surviving homes remind you of what was once here. Sometimes amazing efforts have been made to keep them smart. More often, they haven’t.

    Many bear menacing notices warning visitors to stay away. On the door of one, easy to imagine as a neat home with an iron-pillared porch where the head of the family must once have sat on summer evenings, are the words ‘Enter at ya own risk’ accompanied by a crude drawing of an angry face.

    I ventured into a nearby ruin, smashed, charred and half-filled with garbage. You have no idea who or what might be lurking in these houses.

But don’t laugh at Detroit.  What is happening in Detroit is coming to your area soon enough.

America is in an advanced state of decay.  The number of “outcasts” is going to multiply as more Americans lose their jobs and their homes.  Millions more Americans will be sleeping in their cars, in tent cities or on the streets before this is all over.

The U.S. economy is never going to get back to “normal”.  What we are living through now is the “new normal” and it is rip-roaring prosperity compared to what is coming.

Please show compassion to the people around you that are hurting right now.

You never know, as the economy continues to unravel it may be you that needs some compassion soon.

The impression I got was that McConnell's plan would only apply to Obama, at three specific times, not to future debt limit debates.  To be honest, I find the proposal pretty interesting.  The fact that it's managed to split both parties means there's got to be a least something in it!

It would give Obama what he wants (the debt ceiling goes up, so major problems avoided at least a little while), it gives republicans what they want (a whole lot of political theater before the election to attack Obama--12 separate votes to raise the debt that they can vote against every time, without ever having to worry about winning those votes and having to deal with the consequences), so that seems somewhat good.  It is purely a political move, which seems to indicate to me that to McConnell at least the election is more important than the debt limit, which is a bit frustrating, but we might have to take what we can get given the way negotiations are going.

The main thing I don't like is that it doesn't address the problem at all, and sets us up to repeat this whole charade again after the next election, no matter who wins.  As tired of it all as we are now, imagine sitting through three rounds of finger pointing and shouting before the election, the election itself, and then have to start all over again from scratch.

That said, I think it's an offer Obama could take if the republicans don't budge on closing tax loopholes, like most of the country wants them to do (apparently 80% of the country favors including at least some tax increases as part of the deal, according to the latest polls).  And while it makes him (and to a lesser extent the rest of the dems) take all the heat for doing what needs to be done, I'm not sure it would guarantee the election to the republicans like McConnell seems to be banking.  Will be interesting to see how it plays out, if it comes to that, actually.

There is just one problem. Obama knows that if he tells his constituency that he stomped on Republicans during budget wrangling he's gonna win the elections.



And is it any different for Obama?

Maybe, just, maybe US cannot keep spending like there's no tomorrow (which was Obama's line from the last elections) and they need to do what everyone else does -- cut spending and borrow from China. Now had they only not used up all the borrowing for the wars...



There's one more important thing. Obama's administration is behaving like last Greek government. It's been almost four years since he was elected and only now he's trying to address the deficit. And still it hasn't dawned to him that he can't keep business as usual. All other nations have either substantially cut the spending or risen taxes (or both) and America is refusing to do either.

Knows it?  I'd say that's going too far.  The republicans don't think it's true, it seems.  Again, the fact that the two parties are split on their reaction to the proposal tells me its effect on the elections is far from clear.  If both sides agree to it, both sides will probably be thinking that they can spin it to their advantage.




I think so, yes.  Obama does care about being reelected, don't get me wrong, but I don't think that's is one and only concern the way getting rid of him seems to be for republicans.  As far as I can tell, Obama wants a real deal that actually starts to address the problem.  He seems to want to fix the real problems more than anyone, democrat or republican, in congress seems to want to do.  I'm not saying he's not keeping a close eye on how any agreement would play out come election time, but I think he'd be willing to take a good deal that would hurt him a bit at election time.  On the other hand, I suppose that may be in part due to the fact that "election time" means different things to Obama and the republicans.  Obama is worried about the general election, which means he's after independents and moderates most of all.  Non-presidential-candidate republicans are actually probably more worried about primary challenges than general elections, so are courting votes much further from the center, which may affect the way things look to me.


Actually, we could probably borrow lots more from China, if the dems or republicans were keen on it.  Real interest rates for the government are negative right now, which means it's actually cheaper to take out a loan for them and spend it, then it is to pay for it in cash 5 years from now, since inflation will actually decrease the real value of loan faster than interest rates increase it!  In normal times, politicians would be falling all over themselves to spend money in such a situation.  But that's somewhat besides the point.  The idea that we need to cut spending is what Obama is proposing.  He just republicans to commit to raising revenue as well.


Almost three years, that he's been in power, actually.  And he took over in the middle of the worst economic crisis since the depression.  Austerity measures don't make recessions go away.  The best time to address the deficit is when times are good, but we blew that chance by giving away the surplus in tax cuts.  Right now, getting the economy righted is a bigger priority, in my opinion, than fixing the deficit (in part because the biggest contributor to the deficit is the effect of the recession on revenue and spending).


Really?  You must not be reading the same news I am.  Because he's the one pushing for the biggest changes.


Congress is refusing to do either, yes.  Obama has proposed doing both.  It's not that the administration is choosing to do nothing, it's that our political system is has "do nothing" as the default option, and can only "do something" when a lot of people agree on what to do, which doesn't happen very often, unfortunately.

Found this today, and thought it might interest people here:

http://marketplace.publicradio...eatures/budget_hero/

It's a simple little budget-balancing game, so you can see how your preferred spending and cuts would affect the budget.  It doesn't do any economic simulation, so it's pretty artificial, but it at least gives an idea of the scale of the various items being considered.

Working on 11 policies that need to be done by Monday but I will answer your excellent post above Tycho.

In the meantime, can you actually point us to a official proposal that Obama has made?  You say he has proposed cutting spending, on what?  All I have heard are leaked insider reports which mean absolutley nothing and Obama says he doesn't want to go into specifics.  A promise from Obama doesn't really have a long shelf-life.

The Republicans have been laying out suggestion after suggestion.

It's all so clear to me now.  The problem with the debt ceiling and the negotiations is that Obama is black.

http://thehill.com/blogs/floor...cause-obama-is-black

Tried and true Democrat tactic.  Real classy and real helpful.

What is real sad is that so many throw down the race card that it really doesn't mean anything anymore.

It does, if he's incompetent.

No rush.  RL comes first, and even if we manage to come to an agreement, we'll still have to convince the politicians to listen to us! ;)



Anything "official?"  No.  As far as I know, it's all been in the negotiations.  Offers, counter offers, etc., rather than official documents.  Obama hasn't promised anything, he's made an offer.  From what I've read, it was along the lines of $2.3T of cuts and $1.7T in increased revenue.  The increases in revenue, were in part letting the bush tax cuts expire for those making over $250k per year, and then closing tax loop holes and simplifying the tax code (so, getting rid of ways for companies like GE to pay no taxes at all).  Some of the cuts include benefits form Medicare and Social Security.  I think at least for Medicare it was in the form of increasing the age of eligibility to 67.  I think I recall reading (but can't remember where, or for sure if this was the case) that the revenue increases would start in 2014, so as to avoid making the recession worse.  I would imagine there's probably also be defense budget cuts in there, though that's just my assumption.  And presumably there's a lot of cuts that I wouldn't be a fan of, but again, that's just my assumption.  I don't know what for sure he's put on the table, but he's put a big number out there, and indicated he's willing to touch some of the democrat's sacred cows, so makes me think he's really interested in getting something substantial, and willing to make some painful concessions to the republicans.  Is the offer a good one?  I really have no idea, but the only reason I've heard republicans give for being against it is that it includes tax increases.  (I read today that Representative King said that he'd reject a deal that was $3T cuts, and just $8 tax increases!)

#1 Things have already gotten so bad that Americans will literally trample one another just to get on a waiting list for rental assistance vouchers.  Just check out the following excerpt from a local news report about a recent incident in Texas….

    At least eight people were hurt Thursday morning while scrambling to line up for a limited number of Dallas County rental vouchers — after waiting for hours in their cars.

    People lined up Thursday morning to apply for Dallas County Section 8 housing vouchers. Dallas County sheriff’s spokesman Kim Leach estimated the crowd at about 5,000.

Video of this incident is posted below.  One of the people that was trampled was a pregnant woman….
http://www.youtube.com/watch?v...ture=player_embedded

#2 Almost every measurement of consumer confidence is going down.  For example, the Conference Board’s consumer confidence index fell from 61.7 in May to 58.5 in June.

#3 The Reuters/University of Michigan consumer sentiment index has fallen to 63.8 after being at 71.5 in June.  It is now the lowest that it has been since the last recession “ended”.

#4 The Rasmussen Consumer Index is down 9 points from a month ago.

#5 A recent poll taken by Rasmussen found that 68 percent of Americans believe that we are actually in a recession right now.

#6 According to Gallup, the percentage of Americans that lack confidence in U.S. banks is now at an all-time high of 36%.

#7 In many areas of the United States this summer, just about anything that is not bolted down is being stolen by people that are desperate for money.

#8 According to one recent poll, 39 percent of Americans believe that the U.S. economy has now entered a “permanent decline”.

#9 Another recent survey found that 48 percent of Americans believe that it is likely that another great Depression will begin within the next 12 months.

#10 According to a brand new Reuters/Ipsos poll, 63 percent of Americans believe that the nation is on the wrong track.  That figure is three percent higher than it was last month.

One of the only things preventing chaos from breaking out in the streets of our cities from coast to coast is government handouts.

Today, almost 20 percent of all personal income in the United States comes from benefits provided by the federal government.

You don’t believe this?  Just check out what the New York Times recently had to say….

    Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics.

Yes, because everyone is seeing on teh television that the Republicans are threatening to ruin the coutnry's credit rating if they don't get their way, and that scares them.
Whether you agree with the idea that that is what they are doing or not, it is scaring the American consumer.

In reply to silveroak (msg #232):

Or it could be the Democrats screaming bloody murder about the coming apocalypse and cutting off benefits to old people and the military.  Yeah, its those Republicans.

Where in there idd I say "it's those darned Republicans?
I Mean *SERIOUSLY* here, now you are up in arms and oversenstive about what? The fact that I mentioned republicans and televisions ad *didn't* allude to some vast conspiricy of Democrats trying to scare people?
I *said* it is the hype on TV that is scaring them, not what is actually being done, but seriously here give some credit, the news does in fact do it's own analysis and it isn't just Democratic talking heads spreading the fear.
Now if the Republicnas want to go onto teh mainstream media and answer questions to allay fears, then that is certainly tehir right, but when they only talk to puff piece reporters at Right wing TV stations then the complaining about teh main stream media is pretty hollow...
not sure how the Rupurt Murdock scandal is going to affect all this...

The thing is, the democrats aren't just making up this idea that if we don't raise the debt limit, we're not going to be able to pay important people.  The bipartisan policy center says that if we run out of cash on August 3rd as expected, we'll take in without enough money to pay the $23B in SS checks that are schedule to go out that day.


http://www.bipartisanpolicy.or...-analysis-debt-limit

http://content.usatoday.com/co...it-social-security/1

This one lets you play around with the numbers, and pick which areas won't get funding:
http://www.washingtonpost.com/...o-gets-paid/?hpid=z2
(but it doesn't look at the day-to-day cash flow aspects, so misses issues like the SS checks being due at the beginning of the month.  They say that most business that go under do so because of cash flow problems, rather than profitability problems, and the government could run into the same issue).

A lot of republicans seem to think that it won't be that big of a problem if we don't get this sorted, but a roughly 50% shortfall is pretty huge anyway you look at it.

I hate to Godwin this but it's the same problems the Nazis had at the end of WW2. They had intelligence they simply refused to believe because it clashed with their ideology. The Republican party did the same thing in 2008 where they refused to believ polls which had them behind and were suprised by Obama's victory, and they are doing teh same thing now. When ideology trumps reality, you have a problem.

Regardless as to your political leanings, this is something everyone should be aware of. It's necessary to have values and an ideology, but you do need to check in with objective facts from time to time to, at minimum, have a realistic understanding of what the costs of that ideology are.

"However beautiful the strategy, you should occasionally look at the results."
-Sir Winston Churchill

It's a little left-leaning, but David Brin has some nice analysis on the topic:

http://davidbrin.blogspot.com/...on-debt-ceiling.html

In reply to Tycho (msg #235):

Actually, they are making it up.  Considering the government takes in at least $200 Billion/month I think we can pay $23 Billion in SS checks.

As for the coming apocalypse, why didn't this occur in December 1973, March 1979, November 1983, December 1985, August 1987, November 1995, December 1995 to January 1996, and September 2007?  Congress and the president have fail to agree on a debt ceiling increase and still there has been no default.  Why?  Because we can easily service our debt, as required, and pay SS.  We can also cover all Medicare, Medicaid and children's health insurance, defense, federal law enforcement and immigration, all veterans benefits, and response to natural disasters.

Terrifying elderly people who are dependent on their Social Security checks shows who is really putting politics over the well-being of the nation.  I don't find these scare tactics surprising.  The Democrats behaved no differently when they ran television ads bizarrely depicting Ryan as pushing an old lady in a wheel chair off a cliff.  So let us not delve into ideology trumping reality and point fingers at the ones who have actually been presenting plans that will actually help our economy and economic stability.

To Tycho regarding Tax Cuts create Tax Revenue

The concept of tax cuts creating more tax revenue for the government stems from the concept of growth.  Growth of the economy as a whole and growth of investing.

To grow the economy means more people work.  Working people pay taxes.  To grow the investing environment creates small business.  Small businesses pay taxes as do the workers that are employed by these small businesses.

When the penalties for investing and earning money are removed people take their money out of tax protected institutions and invest it.  They try to grow it.  When taxes are levied against them for merely having the audacity to be wealthy, they put it back into the protected institutions and the wealth no longer works within the economy.

The history of reducing tax rates is quite clear: Cuts in tax rates do not mean cuts in tax revenues.  In all four past administrations, of both parties, "tax cuts for the rich" led to increased tax revenues with people earning high incomes paying not only a larger sum total of tax revenues, but even a higher proportion of all tax revenues.  This is shown by record amounts of tax revenues coming from those rich scoundrels that so many wish to villify.

Here are some linky's to look at.  If you have an issue with some of my sources then those issues are your own.

Check out the graph in this one.  It shows the staggering rise in the deficit.  Was this deficit caused by tax breaks or by Democrat budgets?  Oh, yeah, blame Bush.  I forget that tactic is still in fashion.

http://www.humanevents.com/article.php?id=35461

Thomas Sowell, highly respected economist, addresses the "tax the rich" canard as well as discussing the historical affirmation of more tax revenue due to tax cuts.

http://www.dispatch.com/live/c...an-more-revenue.html
http://www.appeal-democrat.com...00-mellon-facts.html
http://rapidcityjournal.com/ne...d3-001cc4c03286.html

Here is some confirmation from the JEC:

http://www.house.gov/jec/fisca...eagtxct/reagtxct.htm

Here are some excellent breakdowns and myth-busting by Heritage:

http://www.heritage.org/Resear...s-of-Lower-Tax-Rates
http://www.heritage.org/Resear...ut-the-Bush-Tax-Cuts

Analysis of the 1920's Tax Cuts:

http://www.cato.org/pubs/tbb/tbb-0302-13.pdf

Now here is Kennedy's appeal to Congress for a tax cut.  Needless to say this shows exactly how one is supposed to lead and how Obama is simply out of his depth and clueless.  That aside, notice the last paragraph:



http://www.nationalcenter.org/JFKTaxes1961.html

Too bad Democrats of this day and age are too bogged down by socialist fantasies.

Just in case you wish to read into my statement "tax cuts means more tax revenue", let me add that tax cuts do not immediately cause a flood of money into the IRS office.  It takes time for the economy to grow and THAT is where the additional growth in revenue comes from.  Much of the "data" I have seen against lower taxes is the immediate reduction in tax revenue for the first and second years.  Much of their "data" also fails to take into account budget increases.

Also let me state that government, as we all seem to agree, can do with a great deal of cutting of fraud and waste.  That being said, the money earned by small businesses, working people, and large organizations is money that belongs to them first, not the government.  I am a firm believer, supported by fact, that money does the most good in the hands of those who have worked for it.  Period.

There you go Tycho.  I enjoyed your post and I hope you enjoy mine.

However, some people reinvest that money faster than others. The velocity of money for wealthy people is relatively slow; they're more likely to tie it up in long-term savings and investments, such as property and bonds. The middle class spends a much larger portion of their income, and are more likely to spend it domestically (because they can afford to, and because they're buying the more expensive manufactured goods, which are more likely to be owned or manufactured by the US), so the velocity of their money is much higher. The poor are the most likely to spend that money; they are unlikely to be at a place where saving that money is better than using it for necessities of living. However, they're less likely to spend it domestically, since their sole driving motivation is price, and cheaply made stuff is more likely made overseas.

So if your goal is to stimulate growth by reducing taxes, it would make the most sense to tax the rich and give tax breaks to the poor (or if you'd prefer, give tax breaks to the rich for engaging in growth behaviors, such as starting up businesses).

What about the core needs of the nation besides jobs, being a citizen means meeting all obligations of the government. Lowering taxes also demands cuts somewhere and I will note we have many crushing issues socially in our nation - hunger, lack of medical care, homelessness, crushing poverty in many places. Waving a magic wand saying you create more jobs and it will trickle down has not worked for many it made it worse. If these jobs cannot lead to a living wage at some point then they are not good jobs take an average Walmart job its usually dead end for most and they get paid and to few hours in many cases to support a family not to mention lack of affordable health care on top of that.

The governments programs for feeding the poor were cut over and over again, yet in many places children go to bed hungry in our nation. We have homeless that are likely never going to be employable so we should look to provide for them as a nation. We have war vets coming back all screwed up worse than Vietnam from my experience so what about them they need therapy, medical care and help that is a long term commitment as a nation.

I happen to think its important for our nation to set real priorities and re-examine itself on how we use the resources we have and then have the funds to meet our overall need. This may require more people across the board paying more taxes including the very wealthy.

In reply to katisara (msg #242):

With the over-regulation, a Unions-before-investors administration, uncertainty with healthcare, possible tax increases, and class-warfare rhetoric coming out of the POTUS every single time he opens his mouth, I would say that investors aren't just worried about taxation.  As Wynn just said, the President is a wet blanket for business all together.

But no, you don't redistribute wealth to make an economy grow.  How did that work in Europe?  You give tax breaks to the people who actually pay them and allow them to invest the way wish.  The markets are smarter than government.

In reply to RubySlippers (msg #243):

I would argue that the US does alot for homeless, medical needs, and hunger.  Entitlements already chew up a huge amount of our budget and our poor have it better than anywhere else.

Here is a nice breakdown, according to the Census Bureau, of how hard it is to be poor in America:

http://www.heritage.org/resear...1/07/what-is-poverty

I think more people would have more if they stopped asking the nanny-state to provide it and blaming others for the troubles that are, most likely, caused by their bad choices.

Who you give tax breaks to depends on what you're trying to encourage. If you're trying to cut down taxes for tax cuts' sake, sure, cut them for the wealthy. If you're trying to speed up the economy (which seems to be what you're arguing for), you need to cut them where the velocity of money is the highest. It's a simple economic fact that that is not the wealthy. If it were, the wealth of the wealthy would not be increasing, while everyone else's wealth is decreasing.

We've put our faith in the rich taking care of the country of their birth several times, and broadly speaking, they've failed to live up to it. Cutting taxes has helped their portfolios and corporations grow, but it hasn't done much to help normal Americans or the economy in general. Why? Because the wealthy put money where it's most likely to generate money, and that is most likely NOT in the US. Why are we giving corporations tax breaks so they can build factories in Taiwan that sell products to Japan?




I am curious where children go to bed hungry. By law, if you are not able to feed your children, child services will take those children and put them where they can be fed until you can pick yourself up. There are programs available, for those who are willing to take advantage of them. Vets also are generally well cared for; they get free, quality medical care. They get buckets of money towards school. The benefits for service are very generous. Of course, if you are a guy whose only skills are 'shooting people', you won't do well in the economy. But that isn't on the government to fix.

It would seem like it, wouldn't it?  It's an easy error to make, and one that leads more companies to go under than does not being profitable.  It seems so simple:  I'm going to bring in X in revenue this month, and I'll need to pay Y in bills.  X is greater than Y, so I'm all set, right?

Not necessarily.  The issue is that it doesn't just matter how much you owe, and how much you're going to bring in, but also WHEN you're going to get the money and when you have to pay the bills.  Basically, you can't pay today's bills with money you're going to get later this month (well, at least not if you rule out more debt).  Yes, we're going to take in much more in August then we'll need to pay for SS.  But we need to pay for SS at the beginning of the month.  And all that money we expect to get in August isn't going to show up on the 1st.  Our best estimate is that we're going to be completely out of cash on the 3rd of August.  Like, at 0 balance.  That means when we come to pay for SS checks, we can only pay out as much as we take in that day, not how much we're expecting to make all August.  By all estimates, if we don't reach a debt limit agreement, we're not going to have enough cash on hand to pay all the checks when we've said we would.

Now, you might say "oh, well, fine, we just pay a few days later then!" and fair enough, if you don't think that's a problem.  But that's different from saying there's plenty of money to pay for it.

And more importantly, even if we pay SS, somebody is going to be left waiting for a check that won't come.  In fact, a whole lot of somebodies are going to be going without a whole lot of money they were expecting (130 Billion dollars worth, in just one month!  That's more than the republicans were promising to cut, from the YEARLY budget, back when they were just running.  They backed it off to 80 Billion over a year after they got into office, remember?  Now we're going to do 50% more than that, in just one month?).  It's going to be very bad for lots of people who essentially won't get paid until the government makes a deal.  And that'll be bad for the economy in general, because those folks waiting to get paid are going to cut back on spending, which means less income for businesses, and the whole cycle.


The difference is in all the past cases we haven't reached the point where we're actually out of money.  Never before have we gone so far as to reach a day where we had more checks to right than we had cash on hand to pay out.  We didn't reach the point where mandatory spending couldn't be met in those cases, because we got things sorted out soon enough.  Remember, we're already past the deadline where we don't have money to pay for everything.  That happened months ago.  This deadline is when we really, truly, have no money left in the coffers, and can only spend what we take in each day.


Perhaps, but then you don't pay defense contractors, unemployment insurance, any federal salaries, the department of energy, pell grants, housing assistance for poor people, and more than 50 Billion dollars in other government services.  And those aren't just a few days late, like SS would be, they'd be "sorry, nothing for you this month."




I appreciate all the links, but you didn't really address most of the questions I asked in my last post.  I'll address the stuff you bring up here, but I'll re-post the questions from my post that I'd really like you to answer.


I can agree with most of this.  Cutting taxes can, and has, helped speed growth.  I don't deny that.  But that's different from saying it raises overall revenue.


Er...clearly not, or we wouldn't need to having this discussion! ;)


Clinton raised taxes, no?  And the thing is, the economy is pretty much always growing at a pretty steady rate.  Just saying the economy grew after tax cuts isn't sufficient evidence, because the economy grows after tax increases, and after taxes staying the same.  What you have to demonstrate is:
1) that it grows faster than it would without the tax cut, and
2) that it grows so much faster that it offsets the loss of revenue due to the lower tax rate.


It's not, though (shown, that is).  This is a "post hoc, ergo procter hoc" argument.  Yes, the rich have gotten richer, but to show your point, you need to show that they wouldn't have gotten richer without those tax cuts.


Er...7 years of actual budgets, and 9 years of projected budgets?  And the main feature of the plot, the big spike in the deficit starting in 2008, is due to the recession, not tax policy.  The tax cuts started before this plot starts, so we can't tell how they changed trends because we can't see the trends in place before the tax cuts.  If we could, we'd see that the deficit was actually negative (ie, the clinton surplus), and then became large when we put in tax cuts for the rich.  Sure the deficit got smaller after that, but it was still a deficit.


I see the claim, but I don't see anything more than that.  Him saying it isn't enough to change my mind here.  I need either data or at least a theory.  I'm not just going to take him at his word.


This is interesting, and makes a valid point, though I disagree with the conclusion.  If people are ignoring the law and just not paying their taxes, then the answer isn't to lower taxes to whatever they're willing to pay, but to chase after them to pay what they owe.  Or, if they're putting their money in tax exempt investments, we need to tax away those tax exemptions (or, if we made them tax exempt because we want rich people to invest lots of money in them, well, it seems like not a problem in that case).


This is mostly just ideology, not theory or data.  "Left is bad, right is good," stuff.  Might make half the people reading it feel good about themselves, but it doesn't change anyone's mind on the other side, because it provides nothing to persuade them that they're wrong, it just claims it.


This one is about the Regan tax cuts, but again, is mostly just the basic idea, without much to back it up beyond that.  I've already said that cutting tax rates from 78% was a good idea, and that it seems possible to me that revenues could have increased from that.  But just showing that the rich paid more taxes in 88 than they did in 81 doesn't prove that the tax cut paid for itself.  Because the economy grows even if you don't provide tax cuts.  You have to show that that paid more than they would have if we didn't cut taxes.



This one gets off to a bad start, by saying that periods of higher taxes are periods of poor growth and economic performance.  But the Clinton years were high-growth and high economic output.  The rest is similar to the other stuff mentioned already.  Only looking at "did the rich pay more 8 years after a tax cut than at the time of the tax cut?" doesn't address the issue, because they'd pay more taxes 8 years later no matter what you do to taxes.  You need to compare what happened with what would have happened otherwise, which none of these links seems to do.


This one even says that tax cuts don't pay for themselves, and calls the idea that they do a "myth."  That part sounds good to me.  Most of the rest of it I question, though.  It also says that revenue as a fraction of GDP hasn't returned to pre-recession levels (talking of the bush tax cuts and the previous recession), but discounts this because the pre-recession levels were abnormally high.  Mostly its a "supply side is right, keyesians are wrong" list, but without enough data to back it up one way or another.


I can agree that a rate of over 70% is too high, and is quite likely to be on the wrong side of the Laffer curve.


Remember, Kennedy cut the rate to 78%.  If you want Obama to do that, I'm sure he could make the same speech, but I'm guessing you wouldn't go for it. ;)


Okay, but the economy also grows when taxes are high.  If all we look at is whether the economy grows after tax cuts, it's not very illuminating.


Yes, but what we mean by a "great deal" needs to be clarified.  We could probably save billions a year cutting waste.  But we're looking at 1.5 Trillion in deficits.  Cutting waste and fraud is good, but it's not going to solve our problems (and cutting taxes isn't going to get rid of waste and fraud anyway).  We're all against wasteful spending, but a lot of people seem to have the idea that it's the reason we've got this huge deficit.  It's not.  We have a huge deficit because we keep voting for politicians who promise us we can have lots of services and low taxes.  Inefficiencies are bad, but their a minor issue compared to the the real causes of our deficit.


So, you don't believe in taxes at all?  I would disagree.  We're all better off not living in an anarchy.  I consider taxes to be the dues we pay for getting to living a functioning society where working hard, coming up with clever ideas, etc., can lead to wealth.  Free markets are very good at doing many things, but there are a few things they're not very good at doing, and we need a government to handle those things.  And that government needs to be paid for.  And those of us benefiting from it have a duty to contribute, in my opinion.  When people say things like "taxation is theft!" I tend to think of people going to a restaurant, ordering a big meal, eating it, and when the bill comes, saying "this is theft!  My money is mine!  I earned it working hard, and you have no right to it!"  Many people think that if they don't get a check from the government, or go to some government office for a specific service, that they're not getting any benefit from the government, so don't owe anything.  I disagree with that kind of view.  All of us who have lived in the States, or any other western nation, have benefited in countless ways that lots of people around the world haven't.  I grew up in the US.  Got a public school education, and had a lot of opportunities that I would never have had if I had been born in India, say, or Mongolia, or any number of other places.  The advantage I had just by being born in the US is worth the taxes I've paid, in my opinion.

Now, as I said at the start, there were some questions I was hoping you'd answer in my last post, so I'm going to repeat them here:

1.  what do you think the peak of the Laffer curve is?  At what tax level will lowering taxes actually lower revenue, in your view?
2.  My hypothetical:  Does it really matter to you if tax cuts pay for themselves?  If they don't, would it change your position on them at all?
3.  What level of taxes do you feel is optimal?  Say you get to set the size of government exactly where you want it, get to cut out all the programs you don't like, set up all the ones you do like exactly how you want.  What level of taxes would you feel was fair to pay in that situation?  What level of taxes would you feel would be necessary to pay for it?  Say, for some reason, all the services you feel the government should provide turn out to be more expensive than you expect (again, this is a hypothetical, just bear with me and give it a go), what do you do?  Cut services, raise taxes, borrow, something else?  Alternatively, say the government isn't providing the services you think it should, and is already running a deficit.  What do you think they should do?  Cut services further?  Raise taxes?  Borrow to pay for more services?  (to save us some time, if you just say "improve efficiency" to either of these, assume that you've tried that already, and haven't managed to squeeze any more efficiency out of them).


Uff da!  That was a long one!  Sorry for the long post, but I wanted to cover everything.  No rush to get back to it...I can't do posts this long very often these days!

In reply to katisara (msg #246):

No, you don't throw money from the wealthy to the poor if you want real, sustained growth.  How did all that "stimulus" go down?  A perfect example of what happens when you want to effect a small bump in the economy with no real lasting power.

The rest of your post is rather class-warfarey for me and rather tiresome.  Please show me this time in recent history where the wealthy have failed the nation.

In reply to Tycho (msg #247):

You couldn't have read all my sources and considered them in this amount of time.  Damn.  Makes me feel like I wasted time actually reading your sources.  I didn't address any of your questions because you said you wanted objective proof that tax cuts create tax revenue.  That was what I was presenting.

But at least my answer is out there.  Moving on.

As for your "were out of money" argument, the government has a steady flow of cash coming in in the form of income tax and SS withdrawls.  These do not come in at the end of the month at once.  Nice try though.

Stimulus, like stimulants, can be a usefull *short term* solution for dealing with some issues. an adreneline shot to get the heart started, as it were, as opposed to taking speed three times a day. We need to get away from the 'always good/always bad' approach to problems if we want to find real solutions...