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Obamatrons: He has no idea what to do
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jsteele
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Interesting interpretation. Let's see if I can simplify for you. I quoted a poster who said that we have to cut the budget just like we would cut our household budget. If I was going to cut my household budget, I would get together with my wife and discuss specific items we would agree to cut. So, were is the previous poster's list? That poster also says "everyone needs to such it up". I am interested in seeing what that poster is willing to suck up. I didn't mention the word "taxes". I have no idea where your question about that came from. As for political hype, I think political hype is calling for cuts but not actually being willing to list specific cuts. |
Anonymous
Just to clarify, I am the previous poster of both the suck it up email and the email you quoted. The simple answer is that no one is doing what you suggest. Instead, they are standing in front of microphones trying to play the electorate against each other. It's as if, instead of sitting down with your wife to figure out your finances, you were each out independently whining to your friends and neighbors about which or you or your wife is more "right" about the way to handle it - whether someone gets a second job or you stop spending beyond your means. I don't pretend to know the fiscal details, but I have a hard time believing that our elected officials are remotely taking the details or outcome seriously. Even the economists don't agree on what is going to get this economy working again, but from what I can hear through the chatter, large businesses are sitting on tons of cash that they won't spend on hiring if they don't see certainty in the economic future. Going into more debt without a way out (except a balloon payment for our children) isn't certainty. |
Anonymous
This actually a quite common fallacy: we're not actually "out of money". The government should be issuing debt as fast as it can at the current 0% interest to the many, many investors who are willing to take it. That money should be spent on massive infrastructure projects. When the economy recovers, then we address Medicare costs spiral out of control (which is already possible through the ACA framework), cut defense spending, and raise taxes back to the Clinton levels when the economy is back at full employment. Problem solved. |
Anonymous
One last point:
Do you know what a "balloon payment" is? Our country is literally falling apart. You want a cracker-barrel "household" metaphor? We're living in a house our grandparents built, the roof is falling in, and we've been spending all the money we had in the checking account on booze. And now we're not going to take out a 30 year loan at 0% to fix the roof, and make the house safe and sound for the next 30 years. We should be making the critical needed repairs that will allow us to compete in the decades ahead, but rather mire ourselves in a decade long recession out of some misguided belt-tightening impulse. |
Anonymous
And when the Chinese call in the debt, we'll just print more money to pay it back. We'd be wishing for the good old days then. |
Anonymous
| 2011 expenditures are $3.8T. You tell me they cannot cut $3T over ten years? That is much less than 10% each year. |
Anonymous
You hear this a lot, and frankly, it's pretty funny. Perhaps you could enlighten us on how "calling in the debt" will happen. I think the fact that your average American has a pretty cartoonish conception of how the world financial markets work doesn't help matters. Oh well. Don't bother fixing the roof. Forget that 30 year 0% loan. Let the house cave in. We wouldn't want The Chinese to "call in" our debt. 
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Anonymous
For 16:31:
This was the least technical, layman's response I could find for you:
http://answers.yahoo.com/question/index?qid=20090223200359AAbN2A6 Does it make a little more sense to you now? |
Anonymous
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You're awfully trusting that this will all work out in the end. We can trust that the money will just keep flowing as long as we need it. I guess Robin Hood had it all figured out. You are living in a fairy tale. Let's see how that works out for them in Europe.
Do you know why we will not have any jobs back here in the U.S.? Because we have a nanny state that has left us with a largely unskilled, overpriced work force and no incentive for companies to build anything here when they can get a better priced, unskilled workforce elsewhere. Jobs are the key, but I don't see anyone trying to get jobs back. The problem here is that the roof has fallen in, and fixing it won't do it. You need a whole new house, but you are so in debt you'll never be able to afford it. I guess your fictious loan doesn't need a down payment either. |
Anonymous
| I don't know what "calling in the debt" means either. But no guarantee that the chinese or others will continue to want to buy trillions in US debt at super low rates. |
Anonymous
You are correct, they can't call the note, but they can in fact stop buying the debt. Who's going to buy it next? Why is the US a good investment for them? Which brings us back to the debt ceiling. No ability to issue new debt means no ability to pay the priciple/interest on those bonds that have come due - or the need to deflect the money from other spending to pay the interest. Wait, let's print more money - at the cost of the inflation that causes. And how does that inflation rate compare to the interest earned on the bonds???????? We're so busy believing our own shit doesn't stink that we can't see how or why the US will become a bad investment. Man, we are short-sighted. |
Anonymous
Excellent question. (Aside from the misplace moralizing there at the end. You need to stop turning this into a bad opera; it's fiscal policy) In any case If Treasuries cannot be sold at any price, then the debt will be "monetized". That means, the Federal Reserve buys the debt. There is a current debate about "quantitative easing", which uses the same mechanism: the Federal Reserve purchases Treasuries to keep interest rates low. Of course, the risk to "monetising" and "quantitative easing" is that it raises inflation, because the amount of money circulating in the economy increases in relation to real activity in the economy. (Milton Friedman received his Nobel Prize for discussing this.) Finally, as a practical matter, a senior Chinese policy officer announced earlier this month "We hate you guys. (quoted verbatum). You issue $1-2 trillion $, and the $ will decline. But what choice do we have? Buy gold? Buy Japanese government bonds? The US$ is the only safe haven." Source(s): Financial Times, early February (the Chinese policy officer quotation) |
jsteele
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You really need to take a deep breath and give this topic a bit more thought. Think it through. What is the most important facing our country economically? Is it the debt? Is it unemployment, economic growth? Are all of those things equally bad? You seem to be equally obsessed with the debt and with jobs. In your analysis, a large debt prevents job creation because corporations are scared to hire. There is another interpretation, however. In that analysis, corporations are not hiring because there is not a market for their products. If a market were created, they would hire in order to produce and sell more. Corporations are not known for refusing to make money. The easiest way to stimulate a market is to spend money. The government is most able to spend money, but doing so means ignoring the debt in the short term. A very bad mistake was made during the Bush administration when he inherited record budget surpluses and used them to cut taxes rather than pay down the debt. Bush then left record budget deficits. Dealing with those deficits means incurring more debt Republicans are openly hoping that a failed economy will lead to Obama's defeat. The easiest way to ensure a failed economy is to focus on the debt. Obama must know this and why he is seemingly participating in his own defeat is a mystery. At this very moment, the banks are borrowing money interest free. They are using that money to buy Treasury bonds. So, they are making money for doing nothing. Instead of subsidizing banks, the government should be investing that money in infrastructure, creating jobs, and growing the economy. Then, when we are back on our feet, pay down the debt. |
Anonymous
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9:39, I dunno, maybe the bit where Japan's public debt is now over twice its GDP.
From the Wiki: "In response, Japanese policymakers tried a series of government economic stimulus programs and bank bailouts. A 2.4% budget surplus in 1991 turned to a deficit of 4.3% by 1996 and 10% by 1998, with the national debt to GDP ratio reaching 100%. In 1998, a $500 billion bank rescue plan was implemented to encourage bank lending and borrowing." Not Republican policy to me. The results? http://en.wikipedia.org/wiki/File:Real_GDP_growth_rate_in_Japan_%281956-2008%29.png The 2000s were somewhat better but was it worth pushing the public debt to over 200%? And now, I suppose I need to make some suggestions. 1. The GOP's tax phobia is understandable. Less so is their unwillingness to alienate their "keep government out of my Medicare" wing. Sorry, taxes are going to have to return to Clinton era rates on the over $100k crowd, which includes myself. If the Bush era tax rates couldn't create jobs faster than under Hoover, something else is at play here. 2. Impose FICA taxes on all wages. 3. Capital gains and dividends over 250k are taxed as normal income. 4. Freeze Social Security as we know it. Replace COLA's to Social Security with a means-tested supplemental program, weighing income over the past 5 years or something so a random stock sale or 401k withdrawal doesn't completely blow up your income. This will at least reduce the increase in Social Security spending and ensure the pain is given to those who can most take it. 5. Reform Medicare so it does not even kick in until 10% of income is spent (at least an initial step). For whatever reasons, American patients seem more willing to undergo extraordinary effort and expense to extend the last few years as opposed to European patients, so I understand most of the gap in healthcare costs is among the over-65s especially in last year care. 6. Allow doctors to pay off med school debt by doing work for Medicaid, say $5k of debt is erased if you do $10k of Medicaid work. 7. Get out of Europe and Northeast Asia. Europe is at peace and the DRPK and PRC fear our carrier-based forces WAY more than the smattering of ground forces we have in Korea. Reduce our nuclear arsenal by 75% but only if Russia also agrees to that. Continue getting out of Iraq and Afghanistan although those may be the Korea and Germany of the next 20-30 years. Reduce spending on large land combat vehicles (e.g. tanks and APCs.) 8. Attempt as much as possible to insource functions now done by contractors. To make this easier, make the hiring process even more honest -- no more BS "we already have someone in mind" postings, for example. 9. Cut the rest of civil government 5% or so if (8) won't do enough. Odd how the teabaggers focus mostly on this and not the elephants in the room. |
Anonymous
your plan is extreme. The goal is not to move to a depression, nor is the goal to balance the budget next year. As long as we the deficit down to 300-400 billion a year we are fine. So I am ok with #1, #5 and #7. That along with reasonable defense cuts (even a freeze for 3-4 years) and some modest reform of SS should do the trick. |