Completely Irresponsible

[scoutingagain]

Not to answer for Beav but Democrats that think we can deal with the deficit without meaningful changes in Social Security and Medicare are just as delusional as Republicans that think it can be dealt with without raising revenues or making cuts in defense.

 

The difference is, is that there were several bi-partisan plans put forward that cut the deficit by more than $4trillion dollars over ten years that would have been acceptable to many Democrats and Republicans in the Senate. However, since all those plans included increased revenues, either through direct tax increases, or even minor tax reforms by eliminating some special interest deductions and credits, Tea Party congress folks in the House refused to support them.

 

As a consequence, the current debt increase authorization cut spending by less than $1 trillion over 10 years, and kicked decisions on another $1.5 trillion in cuts over 10 years down the road for 3 months. Keep in mind the deficit is running close to $1.4 trillion PER YEAR! So even if, the "super congress" agrees on another $1.5 trillion in cuts over 10 years were talking, about reducing the defecit less than 20% over a 10 year period and settling for ongoing deficits of more than a $1 trillion PER YEAR.

 

That's why the US has been downgraded. The current Congress has effectively demonstrated they have no effective way of dealing with the deficit.

 

Until there is an effective coalition of centrist Demcrats and Republicans, or and effective third party that can really provide some leadership we're on our way to becoming Greece. As scouters all I can say is "Be Prepared."

 

SA

 

 

[SSScout]

*anecdotal*

Got a 23 year old niece that is of the opinion that "they" should not take out FICA because "there won't be any money to give me anyway when I retire. If I retire".

I have a niece and nephew-in-law (?) that tell us that SS should be "privatized" or even eliminated, because "it isn't relavant to our lives" ( they are in their mid 40s)and they could "do a better job investing our own money". They drive two big SUVs and take cruises and have been legally "bankrupt" twice.

My pension from gov't service is nice, but we can't live purely on that (wife is still working) so I work three P/T and am looking for something more permanent. But who wants to hire a 63 year old at more than medium wages?

[packsaddle]

You are retired at 63????

[SeattlePioneer]

Gen X, Y and Z would be smart to demand that their tax money go to a new retirement program that will benefit THEM!

 

Social Security and Medicare are Ponzi schemes that depend on new generations of suckers putting in their money to avoid collapse of the programs. It's grossly irresponsible for government to require young people to fund Ponzi schemes.

 

The classic Ponzi scheme makes long term promises but uses current income to pay benefits rather than fund a savings pool to pay the promised benefits. That describes Social Security and Medicare.

 

[SR540Beaver]

I was on vacation last week and I'm NOT going to wade thru all 8 pages of this thread. Not raising the debt ceiling would not cause a default on our obligations. A debt ceiling is the amount of debt we are allowed to carry. Think of it like the spending limit on your credit card. As an example, you can borrow up to $5,000 and no more. Hit the limit which is based on a number of factors like your income and other debt and you can't charge anymore to that card. Why? Because you can't afford to pay back any additional debt you incur. The US has money coming in every month thru tax revenues. Enough money to pay the interest o nthe debt, pay social security, medicare, the military, etc. What they don't have enough to do is pay for everything they've obligated themselves for......which is why they borrow 40 cents from China for every dollar they take in thru taxes. We don't have a revenue problem, we have a spending problem. Our eyes have been bigger than our stomachs. We are like a kid in a candy store. If you are drowning in credit card debt, what does a financial planner tell you to do? Call the credit card company and ask for an increase in your credit limit or to tighten the belt, meet your basic obligations and pay off your debt. You don't give an alcoholic a drink and you don't give an addict a fix. Likewise, you don't give the US gubmint more tax money. They've already proven they have a spending addiction.....very often for silly things. You tell them to go to Washington, sit down, make the hard decisions they were elected to make, get their spending under control and pay of their debt. It doesn't happen over night, it will take a long time, but it is doable. I don't count myself as a tea partier, but I for one appreciate them actually acting like the adult i nthe room and drawing the line in the sand. The gubmint must shrink and spedning must be controlled. Handing over more of our money simply means it will be added to the pile they already get and spent instead of being used to reduce our debt. Less money in our pockets means the economy does even worse.

[Beavah]

Not raising the debt ceiling would not cause a default on our obligations.

 

Yah, it would have. Yeh forget that revenues and expenses come in at different times, eh? If yeh have an expense that is due and yeh don't have the revenue to pay for it, yeh either borrow or you default. Yeh can't say "but wait, I'll have the money I owe you when I get da next quarterly tax payments in October!"

 

So as you say, we're borrowin' 40 cents on the dollar. We spend .25 cents of that dollar on defense, .22 cents on social security, .23 cents on Medicare, .06 cents on interest, .05 cents on transportation and security, .12 cents on general welfare, .03 cents on education.

 

Now find me 40 cents without raisin' revenues. We can eliminate every single social program and all education funding. That gets us 15 cents. Also gets us more foreclosures and personal bankruptcies and bank failures and riots in a number of major cities, plus throws a bunch of state budgets further into the red, with resultant personnel cuts and such. But that's OK. Yeh have .25 cents to go, plus a buffer for cash flow. You can eliminate the entire defense and homeland security expenses. All the way to zero. You up for that? Is that a "spending addiction?" Or you can completely eliminate Medicare and all border and homeland security. How's that sound? You'd only kill a few hundred thousand people's relatives in da next year or two. Or eliminate social security and do cross-the-board 20% cuts in the military. That's like eliminating all of Central Command, a complete cut-and-run from the middle east, on top of stopping social security checks. Just more "spending addiction" right? Don't mind da homeless elderly and more foreclosures and bankruptcies and bank failures.

 

Yah, yah, it's fun to complain and call it the "gubmint" and talk about "spending addiction" and all the rest. I wouldn't call it "adult" or "mature" though. Gubmint? Really? What are we, two years old?

 

Adult and mature would be paying our bills. Yah, there's room for some wise reductions in expenditures. And there's room for increasing revenues. What's not possible or rational is suddenly defaulting on 40% of our obligations.

 

Beavah

(This message has been edited by Beavah)

[SR540Beaver]

A guy named "Beavah" has a problem with calling the government the "gubmint", eh. Seriously? Here's an adult question for you Beavah, do you borrow 40 cents on the dollar every month to pay your bills? If not, why not? Is that sound fiscal policy? Should all Americans follow the example of our government? And copping out by saying that the government is different and sound fiscal policies don't apply the same doesn't count. I already stated my opinion, we have a spending problem, not a revenue problem. If this president and the Congress had any real back bone, they'd do the right thing, they'd cut spending X% across the board. It's what we do in business at budget time each year when things aren't going good.

[BadenP]

 

I tell you what if the stock market continues to plummet as it did today and days prior,

and our and the European economies continue to plummet none of this debate is going to matter as we are getting as close to a serious global recession than we ever have before. This is not the time to be engaging in a political party pissing contest. All the Congress and the Administrative branch are at fault for allowing this crisis to get as bad as it is and they along with the leaders of business and industry need to get together and come up with a recovery plan and quickly. The government or business moguls can NOT do it on their own and if all parties can not get it together soon we will, along with most of the world, go over that ledge into a full scale recession or possible depression. Then it will be too late to point fingers or assign blame, it is time to WAKE UP AMERICA!!!

[packsaddle]

BadenP, I tend to agree with what you say, except for that part about the heretofore unknown 4th branch of government, the Administrative Branch.

C'mon, the bus is off the cliff. Finger pointing is all that IS left. We're not going to do anything else....but the view is breathtaking.

[vol_scouter]

Packsaddle, I must agree with you. There have been decades of irresponsible congresses and executive branches who have avoided the looming problems of social security, medicare/medicaid, and other social programs. They knowingly allowed this to occur, all praying that it would not happen when they were in office. Still short sighted because they likely live here or their descendents do. All will be affected in the coming economic collapse.

 

I have the feeling that in a hundred years or so, if there is any bastion of freedom left in the world which is a gigantic if, that those scholars will be talking about the events that lead to the great recession of the 20 teens. They will talk about the lack of leadership (not limited to Obama) and ignoring all the warnings. How the two parties would not work together until it was too late. I feel that I am reading the textbook now. My even greater fear is that worldwide economic strife frequently leads to wars. The world has not experienced a war in which several combatant countries possess nuclear weapons. If that comes to pass, may God have mercy upon our souls.

[scoutingagain]

I agree with Pack. I've said this before, we're through the looking glass fiscally speaking. No one alive in the US today has seen an economic and fiscal situation we have today. I'm not even sure the Depression is comparable. We could, immediately balance the federal budget as SR40Beav wants, but that would require cutting federal expenditures by 35 - 40%. Taking around $1.5 Trillion direct dollars out of the economy, let alone the multi-plier effect. It would result in severe financial pain for all us quickly. Don't hold your breath, 'cause Congress can't come close to agreeing on cutting spending on less than 1% of the budget let alone the 35 - 40% needed to balance the budget.

 

The compromise approach is to try and spread this pain out for 10 years or so. But it's still economic pain, and the government has no plan or effective way to do this. It's not Democrat or Republican. None of them seem to be able to get past their biases and all that's left is finger pointing. As Pack says, we're off the cliff already. All that's left is to buckle up and brace for impact.

 

SA

 

 

[Beavah]

Yah, cuttin' 40% across the board is just foolish, eh? That would involve mothballing the entire navy and grounding the entire air force and putting 'em all out of work with no benefits, and cutting everyone's social security check by 40% (with da resultant homelessness and bankruptcies), and cutting 40% of Medicare (with the resultant thousands of deaths and temporary increase in expenses due to lack of basic care), and shutting down all airports and air traffic control in 20 states, and firing all customs, emigration, and border folks along either the Canadian or Mexican border and leavin' it completely open, and letting 40% of da prisoners free and stopping 40% of the crime fighting and ... And.... And...

 

And after da economic contraction all that would cause, you'd find yeh needed to cut an additional 15% because da lost revenues made the situation worse.

 

Here's an adult question for you Beavah, do you borrow 40 cents on the dollar every month to pay your bills?

 

If da interest rate is 1% for a 30 year loan, so that the effective interest rate is less than zero? You bet I'd borrow money! Yeh could put it in almost any investment and do well in da long run. Real adults routinely take out bigger loans as a fraction of their net worth just to buy a house, eh? First time I did that, I think I was payin' around 10%, not less than zero.

 

Businesses routinely borrow money for investments and to pay their bills to get through economic downturns. That's just common sense, eh? What would be really stupid would be for 'em to not pay their bills and go into an unmanaged default/bankruptcy, or to downsize so severely that they compromised their ability to recover as a goin' concern. People who advocate that are looney toons who have never run a business.

 

Stop with da silly media-induced gloom and doom crap, people! It's self-fulfilling foolishness. If there's a debt crisis in our future, it's a moderately long-term one, and only if people are so absurdly stupid that they maintain a notion that they can't raise revenues. Just lettin' da Bush tax cuts expire would take us more than half way there. And let me tell yeh, as a fellow who has been around a while, da taxes in the late 90s were not a big deal, cheaper than what they were in my younger days by quite a bit.

 

A real adult doesn't cut payin' for education for his kids or put his elderly mom on da street if his revenues exceed expenses. He mans up and gets a second job to bring in more revenue.

 

Da whole thing is not immediately urgent, and it's readily solvable by just manning up.

 

Beavah(This message has been edited by Beavah)

[packsaddle]

Beavah, I guess I'm the epicenter of the doom and gloom bunch. I'm not saying this mess can't be fixed. I'm saying that we won't do it. We had turned all this around at the end of the Clinton administration. I remember well the arguments about the Bush tax cuts. They argued that the projected surpluses should be returned to the people through tax cuts, not used to pay down the debt (as suggested by Clinton). The same people who clamored for those tax cuts are today fighting to keep them and (ironically) arguing for fiscal austerity to eliminate the deficit.

These people are not sincere. They do not care about your reasoning. They have the ability to block any approach to a solution if they choose to and they are doing it. With this latest legislation, they can achieve across-the-board cuts and all they have to do is nothing. All they have to do is make sure that more legislation does not pass. And that is what I predict will happen.

Frankly, after your rundown of the predictable effects of what I think will happen, you might want to give in to the temptation to join my view.

 

I saw the deception of the Bush tax cuts when they were first passed and now I see the same deceptions at work. I really hope I am wrong about what is happening. But I wasn't wrong about the Bush tax cuts. And my gut is telling me, for the same reasons, that I'm not wrong about this. Please, show me where there is reason to be optimistic.

[Beavah]

Yah, I like many conservatives was opposed to much of the Bush tax cuts at the time. Not all of 'em, but most. The right thing to do was to keep things stable and keep payin' down the debt. After 9/11, the right thing to do would have been a hefty gas tax (back when gas was less than half of what it is now) to pay for the war and fund alternatives.

 

I reckon there are some systemic problems in how we choose leaders and make decisions. Right now, da worst are district gerrymandering and da partisan primary system. Together, those create both executives and a Congress who are at da fringes of American thought on both sides, so ideology is more important than doin' the practical right thing for the country. Didn't used to be as much of a problem, 'eh? Fringe folks couldn't get coverage. But with da death of good reporting and the Internet allowing fringe folks to organize (and da more cynical and manipulative to confuse ordinary folks with "stories" that never would have been printed by old school responsible media), it's come a bit unglued. A lot of what we see even from good, well meaning folks here on da forums is just quoting from da worst sort of manipulative propaganda.

 

So I'm in favor of a few systemic changes, eh? But really, da biggest fundamental issue is that folks who grew up with responsible old media haven't adjusted to da freewheeling propaganda of new media. Like the debt debate. Nobody who understands anything would ever consider voluntary default, or mandatory, unnamed cross-the-board cuts in a weak economy. That kind of uncertainty at that magnitude causes what we're seeing now in the markets, eh? Any business or individual with money pulls back from da markets until the uncertainty is resolved. Too risky otherwise. Market capitalism thrives only in stable environments. Stable politics, stable regulatory environment. Instability only benefits financial looters, gamblers, and those with inside information. In the old media world, anybody who talked about voluntarily defaulting would have been dismissed as a loon by da press and gotten no coverage, except in propaganda pamphlets mailed to small fringe groups. And no money.

 

I figure the young folks who grow up with modern media will be better at it than us old folks, though. At least more immune to da propaganda stuff. So more than da system changes to stop electing polarized fringies, I figure educatin' is a good way to go.

 

Though I wouldn't mind a responsible 3rd party in da middle.

 

B

[BadenP]

Beav

 

In theory I agree with you but what you are ponting out in your defense is the "Washington Machine" which has become so powerful it is almost impossible to stop. Obama in his naivette really believed he could fix that machine and instead it chewed him up and spat him back out. Until the American people develop the guts to demand every politician they elect is held accountable or be booted out in the next election nothing will change. Instead Americans for the most part vote straight down party lines and then wonder how such jerks get into office and why nothing gets done.

 

This economic crisis is not going to get any better anytime soon because no one person or group of people have any realistic ideas how to fix it. Each party is blaming the other, moronic groups like the Tea Party do nothing but disrupt the process , and the result is total CHAOS that could cripple this country for decades.