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New IMF Head Says US Must Raise Debt Limit, or Face 'Nasty Consequences'
fysdt writes with this from an article on ABC News: "The International Monetary Fund's new chief foresees 'real nasty consequences' for the U.S. and global economies if the U.S. fails to raise its borrowing limit. Christine Lagarde, the first woman to head the lending institution, said in an interview broadcast Sunday that it would cause interest rates to rise and stock markets to fall. That would threaten an important IMF goal, which is preserving stability in the world economy, she said. The U.S. borrowing limit is $14.3 trillion. Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2."
How about doing something different, and not simply letting the banks loot another time?
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
can people expect to wage 2 ground wars, and 1 air war, while giving tax cuts to the wealthy.
Does this include the dept of citizens too? Somehow I have a feeling it doesn't
When is the EU going to put it's house in order......starting with Greece?
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
No shit Sherlock. The only people who dont seem to understand this are the tea-baggers, but I dont find that particularly surprising, since their total understanding of economics is, "Taxes Bad."
perhaps we should just run up even more debt insuring we will NEVER be able to be rid of it. I think its a very smart plan to just raise it every time we want more money. That way, we can million dollar bills and have a gallon of milk cost $12billion dollars! Genius!
Eventually... if you cant pay.. you cant pay. It MUST be corrected sometime
It's pathetic how the left (national and international) refuse to admit the fact that the United States pulls in enough revenue each month to service the interest on the debt, which is the only thing that would cause default if not paid. We need to prioritize how we spend the revenue we take in. Servicing the debt comes first followed by the other spending. We won't default if big government spending (i.e. entitlements) isn't paid first. Tax increases on the rich (who already pay way more than their fair share) will not bring down the debt at all if we continue to spend like drunken sailors.
Um, what is "Last time *they* did this, WWII!", Alex.
whine whine whine
We all know they are going to raise the debt limit. Every time this comes up, whichever party is in power votes to raise the limit. Whichever party is not in power delays the vote to the last minute, using the occasion for political grandstanding.
It would frankly be wonderful if enough Congresscritters had the chuzpa to not raise the limit. Force some fiscal responsibility, even if it is probably too late. But, no, this is the Congress that still hasn't passed a budget for 2011 - they just gave up, and there is every sign that there will be no official budget for 2012 either.
Enjoy life! This is not a dress rehearsal.
When are we going to get rid of this garbage money system and get rid of the entire idea of taxation? Just let the government create money when they want to do something. All money is is allocation of resources.
Sig: I stole this sig.
The US has never had any real kind of economy at all. From 1619 until 1860 we lived off of newly discovered resources and slavery. Following the Civil War we survived as a nation by paying starvation wages, using child labor, and substituted wage slaves from the former concept of slavery. Then to make matters worse we began to taper off the rape and pillaging of foreign nations. The idea that all of us must earn our daily bread is so repugnant to the privileged classes that it is not even a consideration. This is not an anti US rant at all. Most nations have existed in a similar mode although the way they exploit and plunder others may have varied in the apparent details. I don't think we are very likely to see the upper classes wanting fair pay and fair rewards for their efforts. Do I think default to outside debtors is a threat to the US? It probably is the smartest of all paths we could take.
Central Banks owned by one family (Rothshild) have the private right to create money out of nothing, through fractional reserve banking.
Thus creating:
DEBT
INFLATION
SLAVERY
Collecting debt on money created out of nothing = ponzi scheme.
Giving people lower interest on saving accounts than real inflation (look at shadowstats) = slavery.
Giving people raises based on fake inflation (index = +- 3%) compared to real inflation (10%) = theft.
and they aren't fooling anybody. They want a civil war and have all but admitted it. And that is exactly what America will get if the debt ceiling is not raised. In specific and to be fair to the Tea Party they want a revolution. They think if the government does not pay for benefits, social programs, and if the jobs market remains weak, they'll have an easier time recruiting desperate individuals into their militias that are spread across the country. And they are right, the FBI and Homeland security both agree:
The agency warns that an extended economic downturn with real estate foreclosures, unemployment and an inability to obtain credit could foster an environment for extremists to recruit new members who may not have been supportive of these causes in the past.
http://www.huffingtonpost.com/2009/04/14/homeland-security-report_n_186834.html
And this isn't the first time the Tea Party formerly known as the American Liberty League attempted to start a civil war. In the 1930s they attempted the business plot. More details on that can be learned by watching this documentary.
The coup attempt was prevented because General Butler tipped off FDR.
In response to this President FDR created the CIA. The FBI initiated operation COINTELPRO. COINTELPRO became the main counter intelligence operation in the USA with the main mission to prevent a civil war from happening. COINTELPRO has wide spread recognition by those on the left but most on the right don't recognize that COINTELPRO was originally directed at them and who it's directed at is at the discretion of the President and the FBI leadership.
Do any amount of research you want to confirm these facts. Try Googling "American Liberty League", "COINTELPRO", "Business Plot", "Tea Party Movement", and see what you find. Eventually you'll discover the "Guardians of the Free Republic", and other militia's behind the Tea Party who just happen to be from Texas, the same state Ron Paul and Alex Jones happen to be from. The same state President Bush pretended to be from. Why? Because the Tea Party movements headquarters are where the militias are, and Texas is one of those places with lots of militias.
And what is happening now? The FBI is more than likely investigating the Tea Party with as much zeal as they investigated Al Qaeda. The Tea Party is being crushed by the FBI as we speak, but if the US defaults then all hell will break loose. How will the FBI agents trying to prevent civil war be paid? The country will divide into factions, and if that happens, and if it turns violent, the USA itself and the union itself will be divided into factions. Foreign nations will be in a position to invade, or simply flood all sides with weapons and make the civil war long and bloody.
I don't know about you, but I have friends and family here. I do not want a civil war. The Tea Party needs to stop playing games with the global economy. They need to pass a fucking budget ASAP. If the nation defaults there will be nothing anyone can do to prevent a civil war. The unemployment rate will be so high that many people will have nothing to lose by fighting.
The US won't "default" no matter what happens. Enough tax money comes in every day to sustain the interest payments on the debt. The tough decisions politicians need to make are the budget cuts. Obama and the Democrats don't want to cut anything (except for defense). The elephant in the room is all those people on the welfare dole. "Entitlements" account for the vast majority of the budget. Does a millionaire retiree really need that $2000 social security check and medicare? Those programs should be means-tested. Otherwise, they're just Ponzi schemes that are approaching the inevitable demise of more people taking out than putting in.
For those who want to raise taxes, I ask you: When has a tax increase ever created a job? On the contrary, Reagan knew what Kennedy (JFK) knew: tax cuts INCREASES private investment, which increases jobs, which adds more TAXPAYERS to the system. We don't need more taxes, we need more people paying taxes. Obama can sing his class warfare song (rich vs. poor) all he wants but the fact of the matter is, rich people INVEST their money. That creates jobs. Confiscate their money through taxation and that's less money available to invest. It's really quite simple. I'm glad my boss is a millionaire. If he wasn't, I might be unemployed right now.
EVERYONE wants lower taxes and reduced spending and "fiscal responsibility".
The problem is that each person has a DIFFERENT idea of what the government should be spending money on (and what programs should be cut) and what should be taxed.
And that doesn't even factor in the ear-marks and riders and other pork that gets attached to garner votes.
You can only apply a band-aid to our problems for so long. End of the day, just like a family with a high interest credit card that is maxed out, the US will need to figure out a way to pay it off - or default.
The politicians need to quit doing feel-good crap to get reelected and start becoming stewards for our nation - or there won't be much more feel good crap to do.
The IMF can suck the US's sack - they can't tell us what to do. If I were the O'man I would dig my heels in deeper with that kind of junk.
said in an interview broadcast Sunday that it would cause .... stock markets to fall.
Oh, no! Please don't let the stock market fall! Anything but that! It'll be a tragedy for all the people who've bought non-dividend paying stock at prices far higher than they're worth!
It's been pointed out before, and is worth pointing out again, but US government default is prohibited by the 14th amendment of the constitution. Whether they follow it or not is left to be seen.
"First they came for the slanderers and i said nothing."
Not all obligations would stop being fulfilled. There will still be cash flow. Somethings would not receive any money, yes, but we can prioritize our debts, and pay the ones that have the most impact on our government (i.e. interest on debt, bonds, etc). It's what normal people have to do.
So...lets get on with it. We need to stop spending so much money in places that have no value. Leave the debt ceiling where it is and let's face the music now instead of later. Raising taxes will only further DECREASE revenue. That's right, if you drop that gear into 4th while going up a hill, it's only going to stall your engine.
STOP SPENDING! Just stop spending, cut the budget to fit what monies we have.
What happend to Ethon Hunt...?
There have only been a few times that the United State's debt was paid off. Economic depression immediately followed.
The problem is that money is borrowed into existance. No new debt == no new money.
Presidential candidate Ron Paul has a good temporary solution for the debt ceiling: start tearing up the bonds that are held by the Federal Reserve. The Fed returns the interest paid on these bonds to the treasury anyways...
Read about this option in Ellen Brown's recent piece, QE2 Shocker: The Whole $600 Billion Wound Up Offshore
Learn the rules so you know how to break them properly.
www.teslabox.com
The US Constitution says the government isn't allowed to default on the debt. But the Debt Limit Law isn't in the Constitution - it's just a law that says that Congress doesn't authorize borrowing more than $X, and requires some actions if we hit that limit, including not spending more money than we're taking in. It's questionable whether it really even applies, because Congress has passed a budget law since the last Debt Limit Law update, and that budget says they're going to be spending more than they're taking in so they're going to be in more debt.
So what can the Executive Branch do when they hit the debt limit?
I'm guessing that they'll probably do a combination of politically unpopular spending cuts and Federal pay cuts and try to blame the Republicans, plus the Washington Monument's going to be doomed until there's a solution. I don't think they'll default on the debt, not just because it's unconstitutional, but because it seriously degrades their chances of borrowing any more money in the near future, which they want to be able to do - Obama's threatening that, but I think it's more of a political game of chicken.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
My mistake.
Here are the URLs.
http://www.godlikeproductions.com/forum1/message1029116/pg1
http://restoreamericaplan.blogspot.com/
http://www.youtube.com/watch?v=clkRYkIx4Ks
http://nesaranews.blogspot.com/
It's the Tea Party behind this budget nonsense not the banks, not Obama.
The only people who dont seem to understand this are the tea-baggers, but I don't find that particularly surprising, since their total understanding of economics is, "Taxes Bad."
WTF have tea-baggers got to do with economics or politics? Is it really true the USA now has a political movement devoted to tea-bagging?
Those who can make you believe absurdities can make you commit atrocities. - Voltaire
All money is is allocation of resources.
The only resource that matters to humans are hands and minds working to solve human's problems. Minerals in the ground are just minerals in the ground, without humans to extract them, or to design & build the machinery that can extract them...
Learn the rules so you know how to break them properly.
www.teslabox.com
A relevant cartoon.
I think she should be put under house arrest, under round-the-clock watch of armed guards, at her own expense in New York until she changes her tune.
Hey, how's it going?
Here's a way to save some $$$, stop paying into the worthless organization that is the International Monetary Fund.
"Obama administration officials say the U.S. would begin to default without an agreement by Aug. 2.""
The US government will only default if the Treasury is instructed to not pay interest on our current debt with the incoming revenues. This must be done per the 14t amendment:
http://www.nationalreview.com/articles/271329/constitutional-nonsense-debt-john-berlau?page=1
Would would happen is the government would be forced to cut entitlement programs.
The US can go all over the world if it pleases. Jurisdiction won't stop a sufficiently motivated government to handle your sabotage.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
And that means we could end up with a war at home along with the wars overseas.
I keep expecting this to turn into some huge political opportunity for Obama. He could use it as an opportunity to bring all our troops home from Iraq and Afghanistan, citing fears that they'd be stranded there if Congress doesn't reach an agreement. Once all our guys are out of Pakistan, no sense in giving them billions of dollars of aid anymore either. If they want to have a revolution and get into a nuclear war with India, that's none of our concern. It'd also provide a good excuse to sell off some of the gold in Ft. Knox, since it's not backing our dollars anymore.
Of course even if he can completely capitalize on it and manage to undo most of the damage wrought by the Bush Administration and its rubberstamp Republican congress in the previous 8 years, President Pailin will just fuck everything within 6 months of taking office in 2016, anyway.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Given that every other reputable economist from the left to the right has said exactly the same thing.
I'm not an economist myself but my understanding is that US debt is used as a fundamental, secure collateral for many (most?) other financial transactions; reducing confidence in US debt reduces confidence in the underpinnings of huge swaths of the economy.
Add to that the fact that interest rates on new US debt will rise (including debt that is rolled over), raising borrowing costs for the us government considerably.
http://www.economist.com/node/18866851
http://www.economist.com/node/18928600
The English word fart is one of the oldest words in the English vocabulary.
The Republicans are wrong to assume that cutting spending alone will produce a surplus. Take a lot at this graph.
link
US tax revenue is about $2tn. You aren't going to be able to cut $1.3tn without dipping into mandatory expenditures (social security, healthcare, etc). Defense is big, but not big enough to cover the difference, and there's no realistic way to do massive cuts to defense without resulting in massive unemployment (industries related to the DoD are enormous.) Long-term, the various healthcare programs do need cuts taken out of them, and real tax increases are going to be needed to produce a surplus. Even then, it won't be easy, and I'm unconvinced that either party is willing to take the necessary steps.
Presidential candidate Ron Paul has a good temporary solution for the debt ceiling: start tearing up the bonds that are held by the Federal Reserve. The Fed returns the interest paid on these bonds to the treasury anyways...
Or, tear up all the Dept of Education student loans!
Awe come on! I can dream, right?
As it is my Social Security, if it's still there, will be going to pay my student loans; which means cat food in my "golden years". And in the meantime, I am living really cheap - new TV? Fuck no! Computer?! Hell no. Car? Nope - I'm even becoming a decent mechanic fixing my own car. Meals out? Uhn't uh. New clothes, nope!
In other words, my personal consumption is as close to zero as it can possible be. Economy needs more consumption to give it a boost? Oh well, I can't do anything about it.
All because I believed that more education is good. I was doing what the economists said to do: job goes overseas, well, go up the food chain. So, I thought, "well, the company is sending these coding jobs overseas I might as well get an MBA and move into management."
STUPID! DUMB IDEA!
This isn't the place!
You could try http://krugman.blogs.nytimes.com/
Fiat Lux.
And the Tea Party certainly does not want the Republican politicians in office to vote on raising the debt limit. The Tea Party politicians lead by Ron Paul of Texas follow the instructions and listen to the militia, not the President of the USA.
They simply don't care if the US defaults because if the US defaults it only will increase their membership and their power. A weak economy helps militias to grow in size and in power. There will be many more revolutionaries the higher unemployment goes, and they want unemployment to be as high as possible so they can has as many recruits as possible.
The 14th amendment requires the Federal Government to honor it's debt. If the debt ceiling is not raise then the federal government will be required to service existing debt out of current revenues. There will be no default, unless the current administration make the purposeful, possibly unconstitutional, decision to default. There are plenty of current revenues to pay interest and maturities. What that will mean is that other parts of the government will be effectively defunded as available revenues go to meet debt service.
The administration will try to inflict the most pain possible so I would expect Military pay to stop and SS checks to stop. Thats the administrations privilege. However, if they attempt to default, it's probably an impeachable offense in light of the 14th. Of course, it would be subject of litigation.
I'm so glad that the US isn't pushing the rest of the world around on this issue. It's about time those hot-headed, arrogant, right wing crazy puritan grandkids stopped behaving like they still own the world.
Hey americans. It's 2011, not 1945. You no longer own the world.
In other news, heroin addict must get another fix or face "nasty consequences".
Set your phasers on "funky"!
In the dead of the night, tonight, Sunday, behind closed doors, the 11th hour deal will be struck to raise the debt limit, to maintain the rich tax breaks, and continue deficit spending.
Our politicians both left and right are merely pawns of the bigger global interests of the Federal Reserve and of the ever widening group of "too big to fail' corporations who have bought our government.
I predict tonight (Sunday) after 9pm pacific time when everyone has gone to bed and it is too late to publicize, that Monday morning will show that "they did the best they could".
They will trumpet a "hard" negotiation which will not even pay for the interest that WE paid this year and will pat themselves on the back and go back to their constituents to blame the other side for not budging.
We are on the edge of total financial collapse and are being milked of every dollar they can get before we riot in the streets because of unemployment and inflation.
We should all be ashamed of the beast we have created which serves neither liberal nor conservative but merely serves to transfer wealth to their masters and pass laws which boggle the mind until you realize who they truly benefit.
Instead of sweeping reform, once again, we have received sweeping "the same".
Repeating it doesn't make it true. Nice that you continue to post these things, though. :-)
Would you like the litany of fringe groups in the Democratic Party posted too? Balance the fringe out? The point is, ironically, that there are always groups like these and no, they are not any more powerful than they were last election cycle. But it's fun to pretend, isn't it?
It's the Stay-Puft Marshmallow Man.
Aluminum foil doesn't do the same job - you need real tin.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
The (Tea Party) right wants to trigger a civil war. They know when enough peoples lives are at stake, it will wake up the passions in our country and many more people will be ready to fight. This would help them recruit people into their militias but it most likely could backfire as well. Those people who they cut off social security or government programs, they could just as easily and in all probability will join leftist socialist underground groups and prepare to go to war against their extreme right militia groups.
And this is why the situation wont end well for the nation. There will be a lot of people in the position to be recruited into ANY group. The nation will break into factions, most likely based on location, culture, tribe, and political ideology, and then these factions just like in other civil wars around the globe (including in Iraq) will fight for power violently.
This happens in the third world countries all the time. The only reason it hasn't happened in the USA is because the FBI have an excellent counter intelligence program. This will all change if the USA defaults. The default could set the stage for civil war that even the FBI wont be able to stop.
"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. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void."
Even if it is insurrection the debt must still be paid. But, credit default swaps on the tea party should be pretty pricey.
Yeah, that's right. You heard me!
This doesn't state or local government debt either, or money that politicians have promised people, like government employee pensions, future Social Security, or forty acres and a mule or pot for every chicken.
The Debt Ceiling is a law limiting how much money Congress authorizes the US Treasury to borrow for the various operations of the Federal government. Because Congress's budgets have been running large deficits for years, they're going to hit the limit they've authorized in about a month (technically, they hit it a few months ago, but the Treasury could play some games moving money from one pocket to another that let them stretch out until August.)
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
- Not one penny of US debt has been repaid for 51 years: the last time US government funded debt actually decresed on a year-over-year basis was 1960
97% of today's funded debt has been accumulated since August 1971 - the end of the Bretton Woods era by Nixon, and the terminal delinking of all fiat currencies from any and all hard assets, ushered in the era of modern-day hyper-debt insolvency
- Obama projects 2.5% Fed Funds rate in budget calculations through 2020. Average Fed Funds rate since 1980: 5.7%; Since 2008: 0.00%, If average 5.7% rate was used, projected US deficit would increase by another $4.9 trillion by 2020
- Obama projects 4.2% growth rate over next 3 years. If a normal growth rate of 2.5% is used, deficits would increase by another $4 trillion by 2020
- The US government borrows 40-50 cents for every dollar it spends. A balanced budget would mean cutting government spending in half.
- Implementing a balanced budget would not reduce current debt outstanding. It would merely stop it from growing.
- Over the past three fiscal years US debt grew by over $1.5 trillion per year: this is more than three times the record annual debt increase in any previous year in US history
- Last night deficit reduction targets were cut from $4 trillion to $2 trillion over the next decade, in exchange for a $2.4 trillion debt ceiling hike, which will last the Treasury until the next presidential election. Said otherwise, the Treasury needs to fund a $2.4 trillion hold over the next 15 months. Over a decade this come to $20 trillion: ten times more than the proposed deficit reduction.
In other words, cut the US budget in half to stop the situation from getting worse. Then start working on your debt mountains.
Tea Party which is holding President Obama hostage on the budget. They simply do not want Obama to pass a budget
Well, when the Democrats controlled the House, the Senate, and the Presidency in 2010, they failed to pass a budget. The Tea Party didn't have any power to stop them back then.
The Tea Party wants a budget - they just want it to be balanced, rather than simply pile on more and more unsustainable debt.
"Would you like the litany of fringe groups in the Democratic Party posted too?"
I'm not the parent, but yes, I really would like to see the litany of fringe groups in the Democratic Party. I'd like to see the list of groups, who their leaders and prominent members are, the activities of these groups, who supports them, and what politicians are either members of these fringe groups or listen to them. Being familiar with the Republican Party fringe I'd really like to see a comparison to the Democratic Party fringe.
No one cares about the losses of the banks. But the banks guaranteed the deposits in their banks. And the government guaranteed those deposits. And then the Iceland government actually took possession of the bank's assets. The Icelandic government has to make good on their promises to depositors.
By not doing so, their currency has gone soft and isn't freely convertible with other currencies. How this makes Iceland not a problem I don't know.
The EU countries are headed for trouble because there are countries depending on borrowing to get by and their cost of borrowing is now too high. This is because by EU regulation they were not allowed to be bailed out so the countries had to borrow individually based upon their own credit. Now, even though bailouts are allowed, the political will is flagging.
I agreed leaving the Euro would help Greece a lot.
http://lkml.org/lkml/2005/8/20/95
So that's why the US wanted her as head of IMF
We're all still marginally comfortable at the moment. Once the imminent EU collapse gets rolling with the weak socialist sisters plummeting into chaos we're going to be presented with a due in full invoice for our past decadence indulgences. Would like to believe 'We the People' would set about to right the floundering ship of state, but there is no track record of any such activity since 'credit' became the way of life for America in the 1960's.
How's this for a plan, screw the IMF, screw the FED, screw IRS, hang the lawyers (which will include most of the politicians), imprison the rest of the politicians, put everyone of the bankster on trial, freeze all accounts over $500,000, enforce the rule that all accounts over $500,001 request a release of funds after a thorough investigation of where the money came from. Reinstate the backing of any and all currencies by precious metals. Sure, this is untenable, but if these banksters continue to believe that war is the only profit making scheme, then let's go to war against the banksters!
We have been screwed enough by these degenerates, don't you think?
By all means, please tell us which "fringe" movements in the Democratic party have a caucus of sixty-four congressmen.
Your party has gone off the deep-end. They are trying to destroy the country. Take a step back from the red vs. blue sports fan mentality for a moment, and look around you.
Schengen's not particularly relevant - that's about whether the countries are friendly enough with each other to demand passports when people travel between them. Iceland's not part of the Euro Zone, and is a candidate for membership in the EU but hasn't yet been admitted (and since it just lost a lot of economic stability, that may take a while). It is a part of the European Economic Area, so it gets to do relatively free trade with Europe.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Repeating it doesn't make it true. Nice that you continue to post these things, though. :-)
Would you like the litany of fringe groups in the Democratic Party posted too? Balance the fringe out? The point is, ironically, that there are always groups like these and no, they are not any more powerful than they were last election cycle. But it's fun to pretend, isn't it?
Go for it. Post all the fringe groups.
It's the Tea Party that is currently fucking with the budget. So while you can post left wing fringe groups, you and I both know they aren't the ones responsible for the current crisis.
What's she going to do, rape one of our hotel maids?
The US Dollar is going to loose on that again, if they manage to increase the debt limit.
You missed moving to china.
If you think any American based company would move their home base to China (a communist country) you're nuts.
They do not need to physically move overseas. The can move manufacturing and other aspects of production overseas. They can then engineer the accounting so that the profits are booked by the overseas entities and taxed by their local governments. For example the overseas entity can charge the US entity a value close to the US retail price rather than a price close to the actual manufacturing cost.
Isn't there some country we could invade to fix this problem?
It's easier said than done. A lot of these Tea Party members will decide simply not to pay taxes at all. The government then will have to do what? Raid their compounds? They are armed to the teeth. It's not as simple of a scenario as to what the US Constitution says but this does give Obama a basis to do whatever is necessary to prevent a dafault.
Where would Obama get the money to pass the budget if the congress doesn't sign? The congress is controlled by the Tea Party so despite what the Constitution says Obama is still in a hostage situation where he can either use force (trigger a civil war), use pressure, or make a compromise. He has chosen to make a compromise.
You forget that the Tea Party had the power of FILIBUSTER! (by agreement, they didn't even have to do anything, just say they were filibustering and magically things more than just a simple majority to pass)
The US will not "default" on its debt obligations by not raising the debt ceiling on August 2nd. The treasury can simply cut spending and close government offices. The Obama administration is using this false "crisis" to gain political favor for the next election. Yes they are that cynical. Mr. Obama knows he cannot get reelected in 2012 with the unemployment rate above 8%. The Republicans in Congress are doing no better and playing his game. Somehow it's become obscene not to spend trillions of US dollars on fake construction projects and welfare handouts, money that has to be printed or borrowed. The real default will be several years away when service on the debt hits about a trillion US dollars per year and inflation is above 10% per year. But for now, it's politics as usual until the house of cards falls.
US Debtclock
You are almost at 55 trillion in total debt, that's like only 20 trillion away from the annual Global Domestic Product.
Aint that something?
You can increase revenue and that will help fix the budget issues. Sure we spend too much; not arguing that. We can afford to fund this budget without the end of the world happening -- don't listen to the propaganda. It will not kill you if your taxes match your spending-- and if they did, then you might spend more wisely...
A big chunk of the current budget issue is the economy tanked and the revenue is based upon the economy-- so if you CREATE JOBS even at the cost of increasing debt it will pay back quickly. If you raise taxes... Taxes haven't been enforced or as high as they need to be for a generation - bridges falling down etc..
Democracy Now! - uncensored, anti-establishment news
doubling the effective tax rate would be more effective, do so in a weighted fashion so that 80% of the increase falls upon those with 80% of the income
Snowden and Manning are heroes.
The Democrats never controlled the Senate, except for a period of a few months, and even then it was only if count Lieberman as a Democrat. The Republican willingness to abuse the filibuster led us to a state of minority rule, in which our country was held hostage by the representatives of barely over a third of its population.
Several top flight Republicans are serious about crashing the economy to keep Obama from a second term. There's quotes floating around the 'net from more than one US Senator where they say they'd rather sink the US then let him win. They might be right, Obama could be the one to bring Socialism to the US. His health care plan looks poised to wreak the current system, and then he can move in with a real solution (that doesn't involve parasitic "insurance" companies). This would be Great for the American People, no so much for the ultra wealthy.
And besides, is your a super rich Republican, what do you care if the US Economy crashes? It's not like it hurts you one whit.
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The solution to debt is not more debt. At some point someone is going to have to be grown up about this. It would be nice if they were grown up sooner, so that it hurts less. I'm not holding my breath.
Also, the US makes enough tax income to pay interest on it's current debt. In other words, "default" is not a consequence of refusing to raise the debt limit. Something will have to go unpaid, but it doesn't have to be the USA's debt interest. People are running fast and loose with the meaning of the word "default". Don't let them take you in.
Social security is an unfunded liability, currently funded through a Ponzi scheme, which is just now entering the "not enough new suckers" phase. (No, really, it is. There is no SS "trust fund". I can write checks to myself all day; it doesn't mean I have more money.)
Medicare is a disaster in terms of cost.
The US spends each day double what it takes in in taxes.
The US decided to take what was entirely a private problem (big banks would go bankrupt because they made bad bets on housing) and turn it into a government problem by bailing private entities out that should have gone bankrupt, and then guaranteeing lots of other debt. This actually prolongs the problem and makes it worse.
The Federal housing entities are some of the worst culprits, helping blow the housing bubble, and now pretending they are not bankrupt. They will have to implode and be shut down at some point. Bye bye Fannie and Freddie.
The inmates are running the asylum. It seems the solution to being seriously in debt is to spend more. There is also apparently a magical money multiplier that makes government spending somehow blessed and better than private spending. We have economists making arguments based on very dubious differential equations in which they carefully never specify their boundary conditions. The well known "economists" are more about justifying their political leanings than any actual scholarship.
Public union pensions for federal and state workers are unfunded to the tune of tens of trillions of dollars. These will never be paid out.
All of these chickens will have to come home to roost. Arguing about Democrats or Republicans or Left or Right completely ignores the fact that reality will eventually force a solution.
The current administration will do all of the worst possible things they could do. Not because they are evil, or Democrats, or whatever, but because bureaucracy is about protecting the way things are now. Their universe does not include actions which could fix this problem, because they would change the power balance and the money flows upon which they depend. The Republicans are being forced to pay lip service to the concept of being fiscally responsible by entities such as the Tea Party, but I can't see them doing anything real. They too are bureaucrats, and they too have rice bowls to fill.
If any entity did force some kind of resolution, it will be vilified by all and sundry, because resolution involves the death of a million sacred cows at all levels of this society. There's no upside for a politician in being vilified for doing something that will hurt this much, even if it's the right thing to do.
It would be nice to say that we get to pick whether we try to deal with it now, and maybe have a little control, or later, when it will be completely out of our control. In reality, I can't see that choice having any chance of being presented.
The Financial Crisis never ended. It was just temporarily papered over by insane government spending. Now we just have a bigger can to kick down the road.
A massive failure is coming, whether it be a cascade failure, or death by a thousand cuts. I have no idea when or how. I wish it would happen sooner so I can start concentrating on rebuilding, instead of trying to dodge falling pianos while the world at large tries to pretend we're in a light summer rainstorm.
---
Please don't let a few conspiracy loons distract you from the very real conspiracies that are out there. Remember, a conspiracy is just a bunch of people getting together to plan something. The Republican's don't bother to hide their conspiracies. Just read what comes out of their think tanks and you'll see. For a concrete example, google 'The Southern Strategy' and Reagan.
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They didn't have the power of FILIBUSTER! in the House, where there is no ability to filibuster (all debate is limited in time by the passage of resolutions defining the rules for consideration of a bill). All budget resolutions start in the House, as mandated by the Constitution, and in 2010 (before Republicans gained control of the House), the House failed to pass a FY 2011 budget before FY 2011 started. Finally, the Tea Party didn't gain strength inside the beltway until January 2011, when the newly elected members of Congress were sworn in.
Sure, the Democrats are scaremongering to say that they won't be able to pay the debt if the Republicans don't raise the debt limit (and taxes), but the Republicans are doing some scaremongering to say that there'll be a default if the Democrats don't agree to cut spending radically, because they're not going to cut the debt limit without it.
I really miss Alan Grayson, a loud-mouthed Florida Democrat who proposed the "War Makes You Poor Act", that required the government to either raise taxes or identify specific cuts in spending any time it spent money on a war, just to annoy the Republicans who did want new wars but didn't want to raise taxes to pay for them.
Bill Stewart
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The Tea Party wants a budget - they just want it to be balanced, rather than simply pile on more and more unsustainable debt.
No, their goal is to spare their corporate masters any hardship, the alternative is making us mere mortals bear the weight.
There are three ways to deal with not enough money in a budget. One is to go deeper into debt. They're refusing to allow that to happen, having finally seen how dumb that was, though when Bush was in office, they didn't mind flying wildly into the red.
The second is to increase taxes. The Bush tax cuts caused the debt crisis, so one would think that raising taxes as PART of the solution would be a no-brainer. But they're refusing that too, saying it will prevent economic recovery.
The last option is to cut spending. That's the only one left. Military spending is a major part of the budget, but all sides are too chicken shit to talk about that. There's been some token cuts, a plane no one wanted got cut after much controversy, but no one seems to be saying "We can't pay for Iraq and Afghanistan anymore."
So the path of least resistance is cutting the citizen's healthcare and retiree benefits, since citizens aren't paying for their campaigns. And to be fair, the citizens are too stupid to fight back.
The Republican willingness to abuse the filibuster led us to a state of minority rule, in which our country was held hostage by the representatives of barely over a third of its population.
If you are concerned about the abuse of filibuster (from both parties historically), then I agree with you 100%.
If you are concerned about each state, regardless of size, getting two senators each, then I have to say tough noogies? This arrangement is plain as day in the constitution, and is the only part (that is currently operating) that can't be changed by amendment.
I'm afraid the 14th Amendment doesn't prevent default. Any constitutional scholar will tell you it merely prevents paying the confederate war debt while imposing the union's debts upon the south. And SCOTUS would eventually be forced to hand down exactly that ruling.
Yet, the 14th Amendment does buy Obama some wiggle room while the courts decide that issue.
Should Obama use this wiggle room to issue new debt? NO! I'm afraid that'll make him look weak, give the Tea party more power, and merely postpone the default until the courts are forced to order a default.
Instead, Obama should simply stop paying federal contractors in Tea party controlled states, especially military contractors, lay off TSA, DEA, ATF, etc. personnel, eliminate oil subsidies, etc., thereby forcing congress to the table while still paying federal debts.
Would the courts support this use if the 14th Amendment? Hell no! But they'd take their sweet damn time issuing that ruling because they know the Tea Party are idiots intent on wrecking the economy.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
If they want a balanced budget and less debt, how does opposing taxation fit in with that?
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LOL! Things must be desperate!
There is more debt in the world than the value of the planet. The UK/American Financial System crashed in 2008. It is still crashed. The Euro is done. QE2 is done.
Moody's and S&P just launched nuclear downgrades to start the banker war between US/UK and the EU. Trash the Euro to save the US.
US taxes cannot and will not be raised. Spending will not be cut.
I am going to have to listen to this gong show until, August 2 (?) and then an 11th hour bipartisan miracle is going to increase the debt limit. When the smoke clears, nothing will have been done.
Sometime around November 2012 there is a US Federal Election. Absolutely nothing will be done to spook the voters. Interest rates will not go up. Taxes will not go up. Spending will not be cut. There is enough road left to kick the can until then.
The split between the US/UK and Euroland is going to undermine support for global organizations like the IMF, the World Bank, and the UN.
Putin is giggling.
On China's 5000 years timescale, things look like an explosion. The Chinese are not micromanaging and tracking terabytes of trade data on a microsecond scale.
The Persians are still there and have a lot of oil, money and anger.
India, Brazil, who knows, but the world does not consist of the USA, the UK and the EU.
The USA is done. Done. Done. Done.
It is very obvious the the non-americans on the planet. We laugh at your self delusion and your self deception.
The EU is done to. Miss Merkel. Get away from your handlers for a week. Phone. I've got time this week.
The Politicians and the Thinkers are locked in a bubble, thinking 200 year old thoughts. The German pysops techniques of WWII are tired and exhausted.
They will kick the can down the road as long as they can. Then it will collapse. It is collapsing now, if you know what to watch.
All this insane surveillence and TSA and Security and censorship will go into scary mode, Maybe. Violence and coercion are the number 1 line item on every city and state budget. LOL! What budgets? I hope for a gradual, unannounced fade, rather than a catasrophic collapse that makes Dear Leader think HE Must Do Something.
Governments, Banks and the Plutocrats crashing is meaningless. Who cares if 0.01% of the world's population loose their entourage, their harems, and their yachts. I can live with that.
There is still enough food, shelter and energy for everyone. Roads will be paved. Children will go to schools.
Meet the new boss, same as the old boss.
The 14th amendment requires the Federal Government to honor it's debt.
I read that as they are allowed to run a debt, not that they are required to pay it.
More accurately, it is the U.S. Government and the American people that are behind "this budget nonsense". The U.S. Gov. made promises it couldn't keep, and the American people decided sometime in the last decade that they could all be the ME generation.
The American people have another problem: they do not value education. Look at all the Asian Tigers, education is number one with them. Here in the U.S., the Republicans seem to think science either grows on trees or is a liberal plot to re-edit the Christian Bible. The Democrats are all for science as long as it supports their pet beliefs (and if their pols can get some good pork out it, all the better).
American Big Business has forsaken education when they allow a company to be run top to bottom by Business School Product. BSP does not understand how the mettle of a company should be centered on pride of workmanship and new ideas. They only understand widgets. Unless that changes, American Big Business will continue to slowly circle the toilet bowl.
Yes, we need to raise the credit limit. Everybody knows the solution to when you can't pay your maxed out $100,000 CC bill is to raise your credit limit to $300,000. After all, it solves the immediate problem of running out of credit, and who worries about the future payments once you run out of the credit given to you. You can just raise it again next year to $720,000, and keep up the cycle of perpetuating debit. When they refuse to raise the credit limit again, who cares? You are dead, and now your heirs of will are stuck with the bill.
Seriously though, why do we even have a "debit limit", when it is raised every year? The solution to a debt problem is not an increased credit line, it's getting your financial affairs in order so you make more then you spend, and allow yourself enough leverage to start paying down the debt.
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That's true if you paid attention in elementary school as to how the government should work. However, as for how the government does work, they'll pass around a non-bill (often before it's written) and count votes. If it won't pass, they won't submit it. It doesn't matter where it will be submitted, it has to pass the house and the senate, and if it won't pass both, there's no reason to submit it. So, as a practical matter, it's a savings to not pass a budget that won't be passed. Though because of ignorant asses like you, it would have been better political capital to submit a bill they knew would fail and let it fail so that you'd shut the hell up. But then, they don't care what you think either.
you don't care that our government is already committing far bigger abuses than George III and the British in the 1700s. You don't care that our lawmakers are in the pockets of huge corporations. You don't care that our money is out of control of congress but instead placed in the hands of a private banking cartel that looted us in the name of "bailouts". You don't care that our government is funding cia military operations with narcotics, is on the both sides of the war on drugs. you don't care that we have mass murdered hundreds of thousands instead of fighting any real "war on terror" to line the pockets of big corporations. Instead, you are terrified of little old ladies waving tea bags. No tea party member has gone shooting and killing people at political rally, but left-wing nut job recently has.
Seriously, it is going to take one very bloody revolution for humanity to regain it's soverignty back from the IMF, Fed, Military, and Federal Government. Our selected leaders aren't worth a shit. I think the only 'Nasty Consequences' that will happen are that bankers and their cohorts won't make a fuck-ton of money if we keep the debt limit where it's at now.
Because the economy is dynamic, not static.
People change their behavior when tax rates rise (by spending less, therefore driving the economy into a recession meaning less total tax revenue and more gov't spending on unemployment insurance, welfare, etc which then ratchets up the debt) and fall (by spending more, therefore boosting the economy therefore increasing total tax revenue and reducing unemployment insurance, welfare, etc which then shrinks the debt).
The big intellectual failure of "progressivism" is not realizing this truth of human nature.
What is needed is
"I don't know, therefore Aliens" Wafflebox1
I sit on the fence with politics, where I can see huge problems with the political "discourse", which is more about sides than ideas.
/rampant/ government spending on social programs (e.g.: Medicaid Part D), and the military. George W was the worst president in all of history in this regard. His own treasury secretary, Paul O'Neil, resigned because of W's irresponsible attitude.
For example, it amazes me that Republicans think of themselves as the fiscally responsible party, since they have a history of
If you think this is just partisan spin -- a lot of the financial crisis can be laid on the shoulders of Larry Summers (Clinton's secretary of treasury), but that part of the story really goes back to Ayn Rand's prodigy, Alan Greenspan. Greenspan and Summers were thick as thieves, and their continued to increase through the 80s and 90s up until the present. Rand's fundamental idea is progressive politics (i.e.: more liberal than conservative), but it happened to be popularised by Thatcher and Reagan, and then continued through the Clinton era.
If you pull your head out of your partisan ass, you might discover that the world is far more interesting then the tired black and white, four-legs-good, two-legs-bad memes that float around your head. Modern political history really is very interesting, and Paul O'Neil's story is an interesting one, and a key to understand the current debt crisis. I would also learn something about deficit spending, which is almost universally supported as an essential ingredient in abating deep recessions and depressions.
I suspect my words are wasted on you, because partisans are far more interested in talking then learning anything. They just want to own the debate, so that they feel "right", and there-by avoid the imminent threat of discovering that they really know jack shit.Both sides of the political "discourse" clutch at whatever strawmen are within arms reach, and alas, nothing of consequence is ever said.
Like all pain, suffering is a signal that something isn't right
They were on track to keep all those promises until Reagan and the New GOP got it's hands on it.
Even to this day, Social Security does not add a nickel to the budget deficit. Medicare could be made solvent simply by raising the cap on medicare taxes. Nobody would suffer. In every single poll, a large majority of Americans would prefer a European-style socialist setup, as long as it's not called that. But transnational corporations have such a death-grip on the government and courts that it's not going to let go willingly.
The US is headed for at least a quarter-century of very bad times. The nihilistic "supply-side" economic theory that has gripped the political class thanks to unlimited influx of corporate money will not let go until we suffer some pretty catastrophic times.
As crazy and wrong as he is, Glenn Beck is unintentionally correct about one thing: It's important to keep close family and community ties going into the next decade and beyond. We are going to need each other. Skynet is coming, but it's not going to be as much fun as the movies. The hunter-killers are called "corporations".
You are welcome on my lawn.
Why won't the IMF and agency ratings apply the same standards they applied to other in-debt countries like Iceland, Greece, Portugal etc... to the USA? ....But other than that, seriously, can anyone explain that?
I guess the difference is they don't have a debt "ceilling" to increase
I guess one reason they aren't applied would be that it could be argued to be akin of treason in a way if they would un-mask the sugar coating and make-up.
Either way, increasing the debt "ceiling" won't fix any problems, it will just be a cover sheet of fakery on top of a pile of mistakes, corruption and double standards who cause more fear, instability and damage to people of several nations than the very much"mediatised" terrorists would ever dream of. Gives you some intriguing food for thought doesn't it?
that it doesn't have? I saw a congressional hearing where a congressman asked Bernanke, "Can we allocate more money than we have, and will that increase the money supply?" and Bernanke said "Yes." So why can't the government cover all its obligations by allocating more money than it has in revenues, without borrowing it? Basically, creating money, like banks do.
Err, there is an inconvenient errors in your grandstanding.
Not one penny of US debt has been repaid for 51 years: the last time US government funded debt actually decresed on a year-over-year basis was 1960
Clinton had 4 years where budget was in surplus and the US was paying down the debt.
http://factcheck.org/2008/02/the-budget-and-deficit-under-clinton/
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist01z2.xls
Bush Jr. like Bush Sr. are on both sides of the chart.
Obama projects 2.5% Fed Funds rate in budget calculations through 2020. Average Fed Funds rate since 1980: 5.7%;
You may have noticed bond rates near 0% for extended period of time, and little inflation. These days, US doesn't have inflation for number of reason, one being that China is exporting deflation worldwide. Of course, this may end, but that's another story.
Anyway, your comparison to 1980 is irrelevant and wrong. We are in a global economic environment today. US is no longer the only nation that matters w.r.t. inflation.
The US government borrows 40-50 cents for every dollar it spends. A balanced budget would mean cutting government spending in half
Negative. To balance the current budget by cutting spending alone would require spending cut of 70%. Each $1 spent by the US governement is returned as 25-30% taxes, thus effectively costing $0.75. The reverse is true as well, Each dollar cut will only decrease the deficit by $0.75 or so, as there will be less revenue.
This is why cuts in Greece are so painful. They have to cut A LOT more than mere 10% of their budget.
In other words, cut the US budget in half to stop the situation from getting worse. Then start working on your debt mountains.
Or how about raise taxes by 50%? Institute 100% inclusion rate for capital gains, as Buffet indicated?
http://www.whitehouse.gov/omb/budget/
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist04z2.xls
So basically, if you cut all agri subsidies, cut all of military spending, cut all the health and human services, the veterans affairs and social security, then you have a balanced budget. If you don't cut the military by at least 50%, you can't balance the budget...
PS. Interesting note from the attached spreadsheet. The Executive Office of the President ALWAYS had less than 0.05% of the entire budget. But during the Bush years, it swelled to 0.3% in 2006, equivalent to the entire budget of the Environmental Protection Agency (EPA), more than the entire congress and that is A LOT more people! That was about $5-6 billion! WTF?
Doesn't anyone find this odd? The former IMF head warned the US against "reckless spending endangering the global economy" two years ago. Then that guy is framed with rape, later cleared. The new IMF head is hand-picked by Obama and Clinton, who now warns us that we must do exactly what Obama tells us.
Meanwhile, those of us that can do math, know that the country has enough revenue to pay the interest on the debt by a factor of three. So there is literally NO danger of default. Nada. Not even a little. Witness the coming and going of the last 3 "default deadlines".
What is really at risk is all the spending they've been doing. Socialists are like trust fund kiddies - they max out the credit card and all they can do is complain to daddy about how "they're ruining everything" and that the problem isn't their spending, no, it's the limit on the credit card.
Otherwise you won't have a clue as to what is actually going on.
All of this 'debt' money is COUNTERFEIT money, produced from NOTHING by the banks. The government works for the banks, not the people. If the government worked for the people, they would tell the banks to get stuffed, and what could the banks do about it? Nothing..
Only the government should have the power to issue money.
I wish people would stop confusing the 'debt limit' and the 'budget'.
If people want to play budgetary games over the budget, go ahead.
The debt limit, however, is just how much money we can borrow for our already existing budget.
Threatening to not raise that is like a group of people purchasing a big screen TV, and then some members of the group claiming the TV was too expensive so we need to remove the money out of the checking account before that check clears, so it will bounce.
Oh, and that means that all checks will start bouncing, not just the TV check.
That is not a fucking way to operate a country. You want to argue over how much money we fucking spend, argue it when we decide to spend it, not by saying 'Hey, I know we agreed to spend this money earlier, and already wrote the check, but we were just kidding.'
If corporations are people, aren't stockholders guilty of slavery?
>- Obama projects 2.5% Fed Funds rate in budget calculations through 2020. Average Fed Funds rate since 1980: 5.7%; Since 2008: 0.00%, If average 5.7% rate >was used, projected US deficit would increase by another $4.9 trillion by 2020
Have you seen what the fed fund rates have been in the last 20 years? You are going to extrapolate an 8 year extrapolation as being 5.7% by averaging from 1980? Geitner is way closer to reality than you are. Its been hovering at 0.2 for the last 3 years.
here are the numbers:
http://www.thecommunitybanker.com/fedfundsrate-monthly.htm
get a number of companies to go into afganistan and start mining the huge deposits of minerals that have been found. Even if we work with the locals (and only get say 40% of the value) we could pay for both the afgan and iraq war in a few months time (heck get some of the Corps of Engineers working on getting the mining rolling (with of course the roads needed to get the minerals out)).
heck some folk say that there is a trillion dollars worth of minerals (not counting indirect worth of course) waiting to be grabbed.
Any person using FTFY or editing my postings agrees to a US$50.00 charge
Hence the rise in the number of companies that don't pay dividends. Capital gains are only realized when stock is sold.
Obama and the Democrats don't want to cut anything (except for defense)
This is just untrue. Obama is proposing $3 of tax cuts for every $1 of tax increase. Spending cuts are across the board, and both discretionary spending and Medicare/Medicaid are taking far bigger hits than the military. Did you deliberately miss the memo?
/increased/ net tax revenue by closing loopholes for the rich. Reagan also introduced spending rules that mandated that all government spending must be accounted for by either a tax increase or a budget cut. George W. waited for those rules to expire before engaging in the worst big-government spending spree in all of history.
btw, Reagan
Furthermore, you should also learn what the paradox of thrift means.
You have a lot to learn, lol!
Like all pain, suffering is a signal that something isn't right
Clinton had 4 years where budget was in surplus and the US was paying down the debt.
This is simply untrue. The debt increased every year.
Saying anything else is Enron accounting and calls deeply into question any source which does so.
-Obama added the wars to the budget so all that military spending that was 'off the books' is now on the books making the budget look much larger when it was there before but was outside the budget!
-When we have a surplus, state or federal there is a big push from our fools to give tax rebates and tax cuts INSTEAD of paying off the debt. This is what we do each time so the debt grows.
-The deficit and debt are two different things people confuse too often. Fixing the deficit does not fix the debt and the interest on the debt only compounds creating more deficit problems.
-Cutting the budget in half will not stop the situation from getting worse. Breaking even will not stop it-- the only way for things to not get worse is if we pay back the interest on the debt and actually break even.
-Trickle down economics do not work; it has a bad reputation... Well, the terms are considered bad-- we've simply shifted the terms while still supporting supply side economics with Democrats slowly warming up to it as well. What is clever is the use of cover terminology that can be swapped out after it takes too much damage. Today its all veiled in terms of jobs-- the rich provide jobs etc. Its just another way of selling the same old failed economics which made huge gains around the Nixon era when the powerful started think tanks to legitimize their positions (the beginning of the modern corporate info war.)
There are other issues leading to a collapse around 2020 besides OUR money mismanagement. Its all interconnected to a point where repair is impossibly difficult.
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(1) the majority of business *cannot* survive a month without their credit lines, many of them cannot survive a week.
(2) most consumers cannot go without their bank account: that's where their credit card is anchored, their mortgage is serviced from, where their paycheck is paid into, and where their bills are paid from.
Doing without banks is only marginally easier than doing without money and going back to a barter economy. It's not impossible (e.g. the Afghans manage) but it's not possible to run a big complicated economy that way. And either move causes so much friction in day-to-day commerce that it's sufficient to cause the entire economy to go into a tailspin. If you thought that the 'virtual' money in banking accounts doesn't impact the real bricks-and-mortar economy, read up on the banking crisis of 2008 and the resultant depression.
Bottom-line: you *need* banks, even if you' don't like it.
Unfortunately, banks tend to be intertwined (each and every bank is tied to most others through *massive* borrowing and lending. Topple one and you hurts lots of others. In other words: there is a really stiff penalty if you let one topple. Lehman brothers was comparatively small, so the impact could be absorbed. Try that with e.g. Citibank, and you're in real trouble.
Now how do you ensure that banks don't take undue risks, without micro-managing them and wrapping them up in red tape?
I don't know. Fact is: the more risk you take, the more higher the yield is you can ask when you lend money. As long as people pay up, you will be competed out of the market unless you take as much risk as your colleagues.
Therefore banks (and especially their management) haven't got much of an incentive to observe higher safety margins than those required by regulation (which is a poke in the eye for libertarians of all stripes).
Complicated eh? All the snappy, easy solutions have been tried already ... and rejected.
The other IMF goal is to redistribute wealth; that is not a secret. The IMF seems like a Ponzi scheme.
What is the point of having a debt limit if you just raise it every time you get up to it? And why do people like to talk about social security as though it is money spent. I hate to break it to you, but that check is going to bounce no matter what we do.
What are you talking about? The Democrats STILL control the Senate. The Republicans now control the House, but that's it. Until last year, Democrats controled both houses of Congress and the Whitehouse. Denying such is tantamount to mental illness.
The Republican who filibustered the Patriot Act in the Senate? Is that what you're talking about? I suppose that makes you angry, since your man is in the oval office. You didn't like a Republican warrantlessly wiretapping US Citizens, flying people overseas to torture false confessions out of them, and ordering extra-Judicial assassinations. . . Guess all of that changes when "your team" makes it in. . . doesn't it?
A right bunch of fascists you Obamanoids turned out to be. Teleport back to Nazi Germany please, the rest of America doesn't feel like going down that road. Even a lot of the people who were foolish to vote for Obama in 2008 realize the writing on the wall now. You elected total scumbags, so quit complaining and trying to pass on the blame. Republicans have done plenty wrong, but it's simply disingenuous to try to blame the actions of your own fanboy party on everyone else. . . and you people wonder why nobody outside of your minority clique takes you seriously. . . but you bunch are actually arrrogant enough to imagine you're in the majority. Yeah, tell that to all the people out of work and suffering without any of the rediculous promises Golden Boy didn't bother trying to fulfill. I wonder who his running mate will be this time around, Loyd Blankfein? It's "liberal". HA!
The problem is jumping nearly 25% is expenditures in two years. You can totally remove the defense department and their four wars (there are two air wars, don't forget Sudan) and you would still be half a trillion in the hole.
You want to know what the wars are, they are the distraction to keep people looking over there instead of where they should be looking.
Talking the wealthy cannot fix it, it has been shown you could take all the money earned above 250k and still not come close enough to balancing the budget.
There are three major problems.
1) Entitlement expenditures are too high, we are running out of other peoples money
2) Spending on everything is else is out of control (including and especially defense)
3) Not everyone has to pay taxes as such not everyone feels the pain. Believe me, if the bottom half had to pay in 10 or 20% of their income then perhaps politicians might feel it.
We have President Wall Street - He got in on the backs of Main Street America and then forgot about us - oh, until he needs us again for 2012. Soon as he gets in again you can rest assured he will forget us again. He will get all cozy again with his rich CEO buddies from Google, GE, and anyone else willing to pad his wallet and that of his party. You can bet he already has lined up his millions after he is out.
We are out of other peoples money, its time to realize that the fastest way out is to stop spending so much. The government is stifling the economy through its heavy borrowing and our President is handing over us to his banking buddies. For all the angst people had with Bush Jr being a tool of business they seem to miss that we have that and worse. We have ex-Wall Street insiders running the economic course in our White House!
* Winners compare their achievements to their goals, losers compare theirs to that of others.
whatever you say hoover
The trouble with your entire argument is that you assume that the only possible way to balance the budget is to cut spending in half. There's another way about equally likely (that is, whelk's-chance-in-a-supernova likely), namely double tax revenue to solve the budget problem.
As far as what taxes to hike, there are a lot of choices: dividends, business profits, FICA for income currently above the cap, capital gains, or upper end of the income tax range. All of those have historically low tax rates, and have done better than ok in the last few years.
I am officially gone from
To be sure, Republicans claim the Treasury can just "prioritise" interest payments to avoid a default. Read the meticulous analysis that Jay Powell of the Bipartisan Policy Center did of the Treasuryâ(TM)s cash flows in August for a sense of how risky that is. Among his findings:
For example, on Aug. 3, we project that the government will have about $12 billion in receipts and $32 billion in committed payments, including a $23 billion Social Security payment. And Aug. 15 presents a triple threat: a $19 billion daily deficit, a $29 billion interest payment and a quarterly refunding auction to pay off a maturing $27 billion bond.
Even assuming that Treasury manages to remain current on its debt, the firestorm that arises when vendors, pensioners and soldiers stop getting paid will be unprecedented. As the nonpartisan analysts at ISI Group note, the failure of TARP to pass on the first try in the fall of 2008 may not do justice. The main fallout then was the plunge in the stock market. This time, it will not be just financial market turmoil but âoevoter outrage associated with the prospect of an immediate 44% cut in federal spending that would instantaneously overwhelm the Capitol Hill switch boardâ. Both parties will be blamed, but Republicans more. After all, some, such as Michele Bachmann, have opposed raising the ceiling precisely to induce cuts on such a scale.
http://www.economist.com/blogs/freeexchange/2011/06/republicans-and-debt-ceiling
So just stopping spending isn't that simple, and if you do manage to do it without defaulting on debt payments, you'll disrupt many lives.
The English word fart is one of the oldest words in the English vocabulary.
Crooks and Criminals = IMF
How many banks have told people that Oh, you are in debt. No problem, take on more debt! That will fix your problem!
The only reason why they are suggesting this is because they want every country they can to go bankrupt, and privatize the infrastructure of the country afterwards.
See what they are doing to Greece? Those idiots in Greece voted to increase the debt limit and now the IMF is asking for some of the islands, their bridges and historic works of Art to be used as collateral to private foreign interests.
By the time the IMF gets done with Greece, the citizens of that country won't even own their own water works, Hospitals or government buildings.
The IMF will own everything.
Now, the IMF has its sites set on the USA. By the time they get done, we won't even have a national park anymore, it will be owned by IMF private investors.
-Hack
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
The Banks go Marching Two by Two Hurrah! ...
And we all come crashing down!
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
From your link:
Includes legal tender notes, gold and silver certificates, etc.
So you didn't read this or you don't understand what constitutes debt. Debt includes things like circulating cash used by people for everyday transactions. After all, ALL USD cash is backed by US debt. This is basically paper-only debt - debt to the Treasury.
http://en.wikipedia.org/wiki/Money_in_circulation#United_States
You may want to check this out and understand that the USD in your pocket (assuming you have any) is also part of the US outstanding debt. Since the money supply is suppose to increases 1-2% faster than the GDP, also known as inflation, then there you have it. Clinton's surplus was "only" 1-2% of GDP, well, it is not surprising that people money supply increased faster than Clinton's surplus, especially during the roaring 1999.
The largest *surplus* was 1999-2000.
For sake of numbers, debt "increased" 20 billion. Money supply increased MORE, at least 100-200 billion. Net result is US real debt was paid down.
And yes, it is very important to keep sufficient money supply in the economy, or the 2008 "liquidity crisis" would be like walk in the park.
Been there, learned a trick.
If you saw anything coming before hand, you might still have a car left. You can sleep in your car. Your first X bucks go to a gym membership. That's your shower. Then your next $20 goes to one of those fancier "street boxes" where they can't tell what 188 Main St #24 is.
Rent + cars are the killers of today's economy - a lot of places have really skewed rents vs the jobs available.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
The cunt must be referring to the "nasty consequences" that Iceland has experienced. These consequences aren't 'nasty' for the people, but for the bankers. So she is quite correct that 'nasty consequences' will follow an American default. It's time to see the huffing, puffing, threat-dealing strawbitch for who she is and who she represents - the tiny fraction of 1% that thinks that they can just keep stealing from the workers.
Let's break these down one by one:
a) dividends
You mean breaking the last non-Ponzi profit center on the stock market? That seems like a bad idea.
b) business profits
You do realize that the US unemployment is effectively between 11-17%, right, and that businesses are not creating jobs specifically because of the additional costs of regulatory compliance? Adding more tax to business profits will just extend the current recession, and probably make it worse.
c) FICA income cap
I'm not necessarily against this, as long as it is linked to a serious revision of how SS is administered and maintained.
d) Capital gains
So I should take some or all the money I have in investments and move it to investing in overseas companies. Wait, that takes money and incentive for businesses to hire out of the economy. See also point (b), above.
e) Upper end of the income tax range
So the top 20% of income earners that pay 80% of the income tax in the US (look up taxation on Wikipedia, this is public knowledge) should pay even more tax? I'm nowhere close to the top 20% and even I've entertained thoughts about moving to a country with sensible economic and business policies. I'm sure those in the top 20% already have an exit strategy in place. Say half of the top 20% leave; the US government is now down 40% yearly income due to those 10% relocating.
Somewhere in this mess there's a solution; it's going to be painful, and it's going to affect everyone. However, I can pretty much guarantee it won't be any of your above suggestions, alone or in some combination.
Inflation is the most progressive form of income tax.
-I like my women like I like my tea: green-
Or, just put taxes back to where they were under the Clinton administration and close the existing tax loopholes. Which would do more to remedy the budget than any right-wing proposal yet. I'm willing to listen to a solution that includes both budget cuts and raising taxes. But any solution that *doesn't* involve raising taxes and closing loopholes at all doesn't strike me as really being pointed at solving the deficit. From what I see, it's using a scare of "deficit bad! deficit bad!" to cancel spending that the right-wing doesn't like for ideological reasons.
The Invisible Hand of the Free Market is what punches workers in the nuts.
People should get some facts before engaging in these black-and-white discussions.
Taxes on the top 0.01% have fallen dramatically to match those of the top 1%. Does that make sense? Probably not. Is it responsible for our economic problems or debt? Probably not.
http://taxprof.typepad.com/taxprof_blog/2011/06/ny-times-who.html
http://visualizingeconomics.com/2007/11/03/nytimes-historical-tax-rates-by-income-group/
Another little fact of interest to this group is where all those "rich people" come from: Silicon Valley and New York. Without those counties, income inequality in the US hasn't increased significantly over the last few decades. Yes, the gap between the rich and the poor that is supposedly condemning us to third world status soon is just the result of the IT revolution.
http://www.nytimes.com/2006/09/21/business/21scene.html
Frankly, most of the taxing or spending decisions currently debated in Congress are irrelevant and merely political posturing. Personally, I think they increase the taxes on the top 1% significantly, but it won't make any difference. But at least they can then move on to more important things.
The Tea Party has the power to Filibuster in congress? Really? I didn't know that. So you mean, a bunch of random people angry about the direction of the country who set up protests can enter into congress and start filibustering right away? This is the news of the century! I was always under the impresion that you had to be a sitting member of the US Senate to filibuster legislation.
Reality check: The only "tea party" affiliate that has filibustered ANYTHING was Rand Paul who tried to filibuster the renewal of the PATRIOT act. . . Your beloved Democratic majority in the Senate tried to block him at every juncture and MADE SURE it passed.
Oh wait, people forgot about the whole PATRIOT Act issue. Americans have such short memories. What was one of those key issues Obama got elected on? Oh yeah, that was his promise to sunset the PATRIOT Act, and have his AJ look into Bush era abuses. I guess none of you Obamabots care about that anymore. Your cult hero has changed his mind and so now you will stand by your Furher no matter what he does. You people are dangerous (sorry to say, but it's true).
In other words, cut the US budget in half to stop the situation from getting worse. Then start working on your debt mountains.
That will essentially mean eliminating Medicare, Medicaid, food banks, etc. How many patriotic Americans are willing to die to help the U.S. Right Wing who don't want to pay taxes?
I hate to break it to you, but that check is going to bounce no matter what we do.
right wing rubbish. SS checks are not going to bounce. Go rabble rouse with your tea party friends.
The point appears to be so that Congress can play these stupid games every so often. Oh, and so some of our more soft-headed citizens can pretend that the debt limit actually means something, or keeps the total national debt contained.
Celebrity worship is a poor substitute for Deity worship and costs more to boot.
In my humble opinion...
The IMF is the same old bunch of people who have been shunned around the world for the misery they bring to the common person in any country that they have helped themselves to.
Most recently, see how the South American/Latin American countries rejected them and their so-called austerity measures - the social sector cut backs that would have brought million into poverty and taken services away from those that needed them most, were averted simply because the governments in those countries did not believe the scare mongering from the IMF.
Today the IMF seeks a place for itself in a world that sees them for the scam they are and so now they are trying to "re-image" and "re-invent" their "role" in the world, trying to bait everyone and anyone so that they can start their games anew.
That wasn't really what I meant. Hoverer, if things keep going as they are, there will come a point when SS checks will bounce (I'd assume they'd take some corrective action before that happens, like not issuing bad checks). Even a government check can bounce. I got one from the state of CA a couple years back that the banks refused to accept.
Understood, But that was a state check, not a fed government check. It is not a given that a fed government check will bounce. It is not even possible.
Still, I agree with your general point and you have personally experienced some of the bad stuff yet to come.
regards
there are massive hordes of credit default swaps against US debt out there right now.
credit default swaps are almost completely secret. nobody knows how many are out there. there could be a hundred billion, there could be 10 trillion.
if you allow the US debt to default, it will make the Russian and Asian defaults of 1997/1998 look like a kids birthday party.
When Lehman went under, the money market funds started to crash, and then the credit system started to crash. Yes, McDonalds was going to have problems meeting payroll.
the US government is like tens of thousands of Lehman Brothers, not in its operation but in the tentacles it has to every other financial product and financial system on the planet. credit default swaps against US debt are just the tip of the iceberg - and they are completely secret. we have no idea how many other products and institutions of the 'shadow banking system' are linked to US debt, or what the repercussions would be.
we would see currency devaluation on a massive scale. we could see entire companies disappear overnight. we could see entire countries central reserves emptied, overnight.
it could make the AIG bailout look like a child asking for 5 cents for a gumball.
it would be like taking a cigarette lighter and throwing it into a fireworks factory.
----
some people want to see the factory blow up. yes, it would be awesome, and serve the factory owners right for running such a sweatshop. but it is completely irresponsible to allow it to happen.
the only safe way to take apart the fireworks factory is brick by brick, slowly, over time. not in a massive explosion that will destroy an entire quadrant of the city.
if you think stopping millionaires from collecting social security is going to make a meaningful impact in the long run solvency of social security you are dreaming. This should be very obvious to people who are capable of thinking logically. What percent of Social Security payments go to people with a yearly taxable income of around $1,000,000?
just because she didnt want to let lehman fail doesnt mean she necessarily wanted to bail it out.
there are other ways to do it. when ordinary banks fail the FDIC takes them over, puts a few people in prison, pays off some creditors, winds it down, and keeps things going in an orderly fashion.
of course, since Lehman was an "investment bank" (not an ordinary bank) in the US, the FDIC, the Comptroller of the Currency, and the Fed did not technically have legal jurisdiction over it.
letting lehman just go bankrupt caused a lot of problems. institutions who had money saved there in europe couldnt get their savings out. also investors in lehman, like the "good as money" money market funds started losing value, which caused a mass panic and helped the credit markets seize up, which meant that ordinary business activity, like mcdonalds payroll, was threatened. it was like one of the last dominos to start the global run on the global financial system in sept 2008.
if i understand it correctly, she probably would have wanted us to 'go cowboy' on Lehman, and do something like have the FDIC take it over, even though it wasn't technically under FDIC jursidiction. in Paulsons book he talks about how he is continually hamstrung by what is allowable legally for him to do as treasury secretary. he is always worried about doing whats legal.
however, technically, we had no right to invade Iraq, to writetap american citizens, to set up secret prisons and torture POWs. why couldnt we bend the rules in this case? i think thats where she might have been coming from.
1. enforce transparency with laws
2. put people in prison for breaking the laws
i know they sound too simple, but that is basically what happened in the US from the 1930s to circa the 1980s, when it had the 'best financial system in the world'. the SEC & financial laws were somewhat well enforced (especially compared to every other country) and these companies had to show what they were doing in public.
that broke down with the rise of the 'shadow banking system' and the end of the rule of law, which many people will say began in circa the 1980s when the big investment banks stopped being partnerships and started being 'shareholder driven'. the rise of special purpose entities, collateralized debt obligations, off-balance sheet special investment vehicles, and other various creatures of the shadow banking system destroyed all semblance of transparency. modern large banks do not have any idea what their actual financial condition is - it is simply too complicated to properly calculate it or to know what they have at risk.
yves smith covers a lot of this at nakedcapitalism.com
except of course if you want to put long hairs in prison, then its 'we are at war!'
Sorry that won't work (http://www.heritage.org/budgetchartbook/total-tax-burden). Even if you raised tax rates to the highest tax burden in US history, that won't fix the problem. This is because the problem is not an income problem, it is an outgo problem that has no control (http://www.heritage.org/budgetchartbook/growth-federal-spending-revenue).
Basically it is like you gave your teenager a $10,000 limit credit card and they went crazy charging things. You gave them a good talking to and called and had the limit raised because there was a legitimate need for some expenses Now they have reached the limit a second time. You are faced with bills that you can pay the bills but unless you take the credit card away from them this cycle is going to continue until you can't pay and are bankrupt.
You have a choice, follow them into bankruptcy or take away the credit card and make them live within their means.
every time i buy food, 8% goes to the government. since i spent roughly 1/3 of my income on food, thats a 2.7% tax rate just to eat. i pay rent. i dont know how much my landlord pays in taxes, but im sure they take it out of my hide. i pay for gasoline. again, taxes. and then every month out of my paycheck, comes money to pay social security &c.
add it all up, and i am paying a hell of a lot more than 15% that i would pay if i was a day-trader swapping stocks around.
I look forward to shooting dumb fucks like you when they come for my land and property in the name of fairness.
It is not a given that a fed government check will bounce. It is not even possible.
Except, of course, we see in this story a scenario where it can happen. Just because the US government can print unlimited money, doesn't mean that they will.
I'm a scientist, but not an economist. However, I know a bunch of people who know a lot about economics, mostly economics grad students, postdocs, and professors. I also know a decent number of people who believe the US can plausibly refuse to raise its debt ceiling. Those two groups are completely non-overlapping. Literally nobody who has even the slightest clue what it would mean to fail to raise the debt ceiling thinks that it is at all a good idea to do so.
Our survey says.... ding ding ding:
The IMF!
The gas bags who run the various unaccountable globalist organizations need to learn to keep a low profile. They do not win friends among their funders by continually poking fingers in their eyes, and they certainly cannot be winning friends among the world's poor as they lend money to dictators and later demand austerity from the poor who suffered under those same dictators...while wining-and-dining each-other in high-end facilities from New York to Paris. It's not much money relative to the U.S. economy, but as an American taxpayer who is tired of being lectured by flakey euro quasi-intellectual crypto-socialist jerks who can never see an end to the good things they can do to the poor of the world with my money I would get some measure of satisfaction from seeing the IMF on the chopping block.... I Think I will call my congresscritter in the morning....
How would anyone know how bad things in the USA are becoming? Keep your eye on the Jewish communities. If one sees more and more "moving sale" signs posted on the lawns of their homes, take note. The signs on the lawns may say "moving sale" but go into their places of business and look at the bulletin boards. One will see notices with the same information but also the PURPOSE for moving. These are known as "emigration sales" or "ALIYAH SALES" but they do not want those outside (gentiles) to know that. They are selling their homes to those who will pay cash (aggressive and ambitious business-owning immigrants) or those Jews who are less inclined to emigrate. Those individuals and families are fleeing to Israel because they see a dark future for America and not solely doing so to fulfill the commandment to dwell in the Land. They understand that even though the USA has been perhaps the most noble experiment in human history (cf. "goldene medina", fool's paradise, etc.), from the perspective of Torah, it is merely one of all the other nations destined to mistreat the Jewish people. As demographics change here in the USA, more and more people will become hostile to the Jews. It is a metaphysical determinism. When it comes to certain matters, people have no choice but to behave the way they do.
I spent too much time today reading on the debt limit crisis, but after looking at everything have come to the conclusion that we need to raise taxes significantly, doubling our tax revenue.
This is a modified version of what I've always proposed, that is, tax rate based on spending, but we're past the niceties of deciding what to spend on. For better or for worse, we've pretty much committed to what we spend on for various good reasons. We need to pay for it.
In the process we also take a step toward flat tax in that I propose we raise all the various tax rates to the same rate, the middle class income tax rate of 35%. After we start running surpluses and pay down debt then we can lower that rate.
I don't think the low tax rates, let the wealthy invest to create jobs is working. The wealthy are not investing the money in the US, and jobs aren't being created.
While I think we should have some CCC type programs to put laborers to work until manufacturing ramps up again in the US, helped tremendously by a new large tarriff on imports from countries running a trade deficit with us, the goal of doubling the tax revenue is to balance the current budget and get the money immediately spent and back into circulation and generating new tax revenues without new spending programs.
We also need to stop business as usual, everything will be fine government operations with great budgetary pressure all the way down the line.
This basically affects those who are wealthier than middle class. I have a feeling they'll make out fine from this.
rd
Social Security is not part of the debt, what the Federal Government owes Social Security is part of the debt. To not pay Social Security to those it's owe to would be theft.
This just indicates a lack of discipline and coherence in the Democrat side. They had almost 60 votes. They couldn't get deals with Republican defectors to overcome the filibuster (a traditional legislative tool dating back as far as I know to the establishment of the Senate) and I'm cool with that. As I see it, if they couldn't overcome the filibuster and pass legislation, then they didn't deserve that legislation.
Whose tune is the GOP dancing to? Why that'd be the Tea Baggers' tune.
How many Republicans didn't sign that ATR blood oath? Ya, I thought so.
The economic situation is not going to improve until we solve the Energy Crisis. We are sitting on the solution, Liquid Flouride Thorium Reactors, a Green Nuclear technology that has the potential to radically transform our society for the better, but we need to aggressively pursue its commercialization immediately.
To summarize, this technology was already prototyped back in the 60s at Oak Ridge National Laboratories, so it definitely works. What remains involves system integration, scaling, interfacing with carbon collection systems and fuel production facilities, cost reduction, updating materials, and configuration exploration (among other things). What we will end up with will be far more affordable, safer, efficient, flexible, and scalable than what is currently available. Imagine complete energy independence, ample social services for everyone, massive carbon sequestration, and super cheap carbon-neutral synthetic fuels (check out Green Freedom).
We only require the will to become our own savior. If we continue our current course of confusion and division, we get the opportunity to watch the demise of Democracy and Freedom.
My bet (if I were casting bones or rolling dice) is that ideology will persevere, no new taxes, no cuts to social programs, the debt ceiling will not be raised, and the US will follow Greece into economic oblivion. Then the righteous ideologues (not just the politicians, but those that put food and water into their cages), will suffer actual REAL PAIN! Social programs will have no choice (sadly) but to be cut by 10% or more. Those not wanting more (or any) taxes will suffer *REAL PAIN* when their dividends and stocks and the entire market drops by 25% or more. There is no room left for 'too big to fail'. Things will head south. The only difference between last time and this time is that last time, those who caused the crisis last time never learned a damn thing. There will be real poverty in the US, and people with money will spend a lot of money hiring people with guns to keep people with no money but enough for guns from shooting them. The pain will be real. Things are going down. People on Wall Street won't jump, they will be pushed. This one is going to hurt.
Why do governments have to issue bonds to receive money, why not print the money themselves for public projects (the money gets printed anyway).
The money would flow into the economy without the banksters, helping keep state assets public instead of being raided by the private sector.
The Tea Party may make a fine demagogue, but please get your facts in a row. They are hardly to blame for our current situation.
I am sorry, I do not agree with you.
You paint a false picture.
I work in financial industry and economic data shows quite an opposite trend of what you are saying.
-- Between 1996 and 2001 -- the US paid down its debts and actually had revenue that outpaced its debt accumulation.
-- Actually US has currently cut its deficit much better than the forecast called for, this has resulted in positive outlook for deficit reductions for the United States in 2012 as of July 2011.
You are just spitting out propaganda fed to you by one or the other party.
Of course, a global one-world government has to start somewhere.
What is the point of having a debt limit if you just raise it every time you get up to it?
Originally, Congress had to individually approve every single expenditure, no matter how trivial. As the nation expanded and the number of expenditures grew, that quickly that become impractical. So in order to avoid spending all their time voting on e.g. $5,000 for toilet paper, they agreed to authorize yearly spending up to a given amount instead.
The point wasn't to limit spending, but rather to avoid governmental gridlock.
I don't care if it's 90,000 hectares. That lake was not my doing.
If you're reading this page, you're probably a taxpayer. If not yet, then you will be. Did you enjoy that money being spent in your name? You're liable for it! Even if you don't pay off your share, you'll be paying the interest on it! Think about it: $130K would buy a really amazingly sweet ride, like a 2011 Corvette ZR1. You don't have that ride, now do you? But, you have to pay the bill. Not so fair, is it? And, if you don't pay the bill, don't worry... your kids will get to keep paying it off. Nice parent you are!
That's where I really get ticked-off: My kids aren't old enough to vote, but that doesn't stop the politicians from borrowing money "in their name". I call that THEFT! It is just PLAIN EVIL.
I'm willing to go toe-to-toe with anyone to argue the benefits and pitfalls of taxes vs. spending. But leave my kids out of it! If we can't pay for something this year, then we don't do it! Pick on someone your own size! Don't steal my kids' money before they can vote! Don't steal their money before they're born!
As I tell the younger folks in my office: When are you gonna say, "We're just not gonna pay back the money you borrowed and spent without our permission!" ?
You don't appear to understand a concept called tax incidence. The person writing the tax collector check is not always the person who is truly paying the tax. Capital gains are taxed on capital assets. Capital assets are generally income producing assets. Income of income producing assets are taxed at ordinary income tax rates. The value of an asset is the present value of its payments. When you reduce those payments with income tax, you reduce the value of the asset. Therefore, the owners of the asset pay a tax in the form of a lower asset value. Capital gains is a double tax, just like a dividend tax. Warren Buffett is brilliant, but his statements on that particular subject are just wrong.
Really, I'm not trying to be clever with my signature.
So the IMF is saying that the U.S. must continue to borrow so that the borrowed money can filter down to the rest of the world so everyone else in the developed world can continue their reckless, lazy ways while seriously endangering the future of the U.S.?
Greece is supposed to cut spending because it has "too much debt", whereas the US is supposed to just keep increasing its debt.
Rich people pay above 30%.
False. Rich people don't make money from wages. They make money from investments, dividends, and bond interest. That's why the super rich pay almost no tax (and why C-levels get paid in stock as opposed to salary). In the US we tax income from work, but we do not tax income from wealth.
We tax all forms of income, including investments, and then sometimes we'll slap taxes on top of those taxes. You've never heard of capital gains taxes? We often tax wealth twice. First we'll tax corporate profits, and then we tax those same profits in the hands of private shareholders. When corporations get away with not paying taxes... GE is a good example here... it's because they've made crony capitalism deals with the government, often getting huge tax credits for things like "green initiatives". This is why I want an across the board flat tax on all first time income. Not only will everyone, rich and poor, have skin in the game, it'll stop the insane practice of Congress using taxation to shape consumer behavior to their political liking.
Life is hard, and the world is cruel
nothing wrong or hypocritical about playing
by the rules as they exist, while
simultaneously saying the rules are stupid
and should be reformed.
You're a fucking idiot. That is the definition of hypocracy.
Playing by the rules while changing them is the only way to succeed in politics and finance and business. Taxation rules are so perverse, due to Congress using it to reward and punish behavior, that you can't operate an enterprise at all without playing by those rules. What you're demanding is that anyone critical of bad rules must take an ascetic stance and divorce themselves from reality. That's just dumb. You'll make a big statement all right... right before you go out of business.
The idea is to save the system by reforming it, not destroy it. Are agricultural subsidies corrupt and a bad idea? They certainly are. But if you turn them down, you're going to be out of the farming business the way it's currently structured. So a farmer could take your stance... refuse the subsidies that all of his competitors are getting... and go out of business. That means the farmers that like those subsidies will win, and nothing will change. Or, you can play by the rules, and convince enough people to change the system to where bad policies are phased out. That's how real change happens in the real world.
Life is hard, and the world is cruel
I told my credit card the same thing "If you don't raise by debt limit, I will default within two month's time.", I don't know why they didn't raise my limit...
Those are great ideas.
testing out my trending skills
The constitutionalist fanatics in the tea party or the IMF?
Help me out here. What makes a constitutionalist fanatical? The idea that we should... follow the Constitution? Wasn't that the whole point of creating it in the first place? It's not supposed to be optional. What would be so fanatical about actually governing according to what it says? That's why we have a Constitution.
Maybe we've become so used to our politicians ignoring it that your attitude is actually mainstream. We did our best to ignore the 2nd Amendment for years. We heartily ignore the 4th. We still ignore the 10th.
If you're right, and the Constitution is "optional", then what's the whole point of American government then?
Life is hard, and the world is cruel
I used to agree with this line of thinking. The problem is the rich aren't investing in US companies. The current tax breaks are creating jobs they just happen to be in China.
Thank your government for that. Example: Congress votes to penalize creation and sale of incandescent light bulbs. Result: companies close American incandescent light bulb factories, and open new factories in Asia. So perhaps "green jobs" were created. But not in the manner that those politicians thought, apparently. So laws that Americans didn't want are now resulting in the losses of American jobs and replaced with Asian jobs.
Life is hard, and the world is cruel
Entrepreneurs, small businesses, and other business are not gods, nor human shields for the private sector.
The more freedom you hand to business, the more slavery you get.
We gave them more freedom, and they used that to create more slavery. If you want tax cuts, you have to be able to start putting the millions out of work, back into work in a capacity they prefer. If they don't like it, they'll have to put up with it, since the US can go anywhere it wants to in the world.
The only option should be to link the DoD even closer to the IRS. One arm handles the international repatriation and international tracking, the other collects the revenue from all parts of the scofflaws.
At some point employers will hire out of fear, and the US will prosper.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
Why do you hate your grandparents?
Because they spent decades partying as they built up huge debts that they now expect their grandchildren to pay?
I see more and more people are starting to take this position. I revered my grandparents... three served in WWII... but their generation got the ball rolling on huge government and expensive entitlements that we and our children never asked for and are now stuck with. As another poster here at Slashdot put it, "Can we stop calling them the greatest generation now?"
Life is hard, and the world is cruel
N/T
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
"There are other issues leading to a collapse around 2020 besides OUR money mismanagement. "
You got that right! By 2020, the heat waves will be kicking in a serious way, with virtually no fresh water to be had for irrigation of crops and summer time temperatures in the mid 130's. Looking back on the 2011 debt crisis and the great recession will seem like nostalgia for the good old days.
Yeeee harrr JP Morgan Goldman Sachs BOA and the IMF go to Greece.
1) The 14th Amendment requires the executive branch to pay debt service
2) A Supreme Court decision during the Nixon presidency says the executive branch must appropriate money from the treasury as directed by Congress.
So here is what will happen if the debt ceiling does not get lifted. The US will continue to service Federal Debt as Constituionally required. Money left over in the treasury is appropriated as per law, until you run out of money to appropriate.
The executive has to decide in what priority to appropriate non-debt payments. I'd put Congressional salaries last in line...
"then they didn't deserve the legislation"- but what about your citizens, did they deserve the legislation?
This anti-democratic attitude strikes me as being the rotten core of your partisan political system.
Bad analogies are like waxing a monkey with a rainbow.
At some point the inevitable will happen. The wealthy will have to pay more taxes, if for no other reason that soon, they will be the only folks with any money to tax. The problem with the economy is that wealth is already so concentrated in a few hands that there isn't enough money in circulation to support a 350,000,000 person economy. The only real question is whether the wealthy can starve that number down to say 35,000,000 before the 350,000,000 eat them first.
Not raising the debt limit is not paying the minimum balance due on your credit card
rating?
That's absolutely silly. That's like saying that if Mastercard doesn't raise your borrowing limit, then you'll have no choice but to stiff them. Nevermind that you've now proved an inability to pay them what you owe them already. Why should you be given a higher debt limit?
Not raising the debt celing simply means that we can't borrow anymore until we've got our current out-of-control spending under control. You can still pay the debt without borrowing even more money.
We have a debt ceiling problem because we can't seem to put a ceiling on our spending. Fix the later and you'll fix the first. Meantime, start cutting expenditures, and you'll free up money to pay those debts, and then you've paid your creditors and you haven't defaulted and at the same time, haven't raised the debt ceiling. Cutting spending is the answer, not borrowing even more money. Cut entitlements, cut the military budget, call something from all Federal departments.
Life is hard, and the world is cruel
You split the banks up...
Don't let any single entity become too big, if its too bit to fail then its simply too big.
Then ensure that any bank which fails won't be bailed out, if there is a fallback (bailout) then whatever you do isn't a risk as far as the bankers are concerned.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
Obama offered a plan for $4 trillion in deficit cuts, with 75% coming from spending cuts (including cuts to entitlement programs).
One, Obama denies putting any entitlements on the table right now, and two, every single time Congress enacts a "mix of spending cuts and tax raises", we always get the tax raises, but the spending cuts don't happen. I've seen this all the way back to the 80's. They'd be nuts to take that deal. Suckers and Chumps to take that deal.
Spending is the problem. If taxes are raised, politicians will just spend it. This has been proven by history, time after time. If you think this is "perfectly reasonable, then you are part of the problem.
Life is hard, and the world is cruel
Clinton had 4 years where budget was in surplus and the US was paying down the debt.
This is simply untrue. The debt increased every year.
Saying anything else is Enron accounting and calls deeply into question any source which does so.
Not to mention that the "surplus" was based on paper dot com profits, an economy based on smoke and mirrors. When the dot com became the dot bomb and the economy went boom, so did the "surplus". It returned to the ether from which it came. The whole "surplus for years to come" was based on the worst kinds of wishful thinking.
Life is hard, and the world is cruel
I like how "increasing our debt" is a perfectly viable solution to "fixing our debt". Isn't this just going to compound the problem? If you can't pay back 100 dollars, what makes you think that you can pay back 150? Are those extra 50 that you are borrowing magically going to turn your economy around so that you can pack back the first 100? If so, why didn't you take better care of the first 100?
Move sig!
Loan shark threatens debtor, news at 11, after the movie.
In a socialist country, people pay taxes. Greece is famous for its dismal tax collection. What Greece really is is SPEND SPEND SPEND. Its politicians cared only about making EVERYONE happy. Plenty of benefits, low taxation just to buy voter favour. It is what happens when your economy essentially is fueled by the outside world. Greeks have never contributed anything to the EU, they have only be taking. Same with all the other EU economies that are falling down. The EU want to grow and to keep its new members happy it kept giving them more and more money without demanding anything in return.
Democracy is the problem, it is next to impossible to get elected with sensible policies if your opponent can promise the moon and never be called out on it by the press/people.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Debt is a complete distraction, a tool of bankers to keep money artificially scarce, because how else would they get attention, unless they have an exclusive right to create and allocate money?
Also on The World Bank, and the Exchange Stabilization Fund.
Which means reading up on a guy called Harry Dexter White. None of these organizations are lily white. They exist to project power and achieve geopolitical aims, which makes the recent Dominique Strauss-Kahn controversy highly suspect.
Anyway, the US government already hit the debt ceiling a month or two back, what they have been doing in the meantime is raiding federal employees pension schemes, to the tune of several hundred billion dollars. Once that is all gone (real soon now), they'll start closing down government departments and selling stuff to pay the bondholders. There will be no default even if the ceiling is not raised.
In the meantime, if you hold government bonds which you know are going to decrease in value, what do you do? You sell them and put the money elsewhere. Where? Stock market. The recent rally in the stock market is the smart money getting out of US government bonds ahead of the next set of auctions, at least till the debt ceiling is sorted. It certainly isn't because the economy is running on all cylinders, heading for another recession is more likely.
(Oh, also read up on Fractional Reserve Banking, the source of all these problems in the America and Europe: http://video.google.com/videoplay?docid=-2550156453790090544)
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USA are almost a bankrupt, but they simulating that they're not. They always printing their worthless dollars when their economy is in trouble. Anyway, capitalism fail.
Recipes for USA bankrupt - http://tinypaste.com/0d66f dd = dollar deluge (printed in the infinity)
This is more than a theoretical issue: people often focus on trying to improve the stock market number, instead of trying to improve the economy as a whole. Trying to raise the stock market by printing more money, by borrowing more money, is counter-productive and causes problems.
You should send a letter to Dr. Bernanke with this information. His Cargo Cult economics appear not to have helped much.
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Same beast behind both parties. Go look at their contributers.
The divisions between the two are simply a divide and conquer strategy. Keep the rubes divided and diverted from the real problems and issues.
Bush vs Obama? Fools arguments, all the presidents since JFK have been puppets.
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Banks follow the Basel rules, it means that they have to have a certain percentage of "Tier 1 capital". That basically means AAA rated sovereign debt. If the bonds they hold are re-rated and no longer qualify as Tier 1 capital it means that the banks will have to pull in hundreds of billions of loans as the proportion they are allowed to lend is reduced.
This is why Greece is a problem for the EU. Particularly French and German banks. The bailouts for Greece are not for the Greek government or people, they are for the French and German banks who are exposed to Greek (no longer sovereign; Greece is no longer a country) debt and would have to pull in loans.
Greece's interest rate is like 28%,
No, their bond yield is 28%, the interest the bond pays is almost certainly much much lower. As the value of a bond decreases, (e.g. â100 bond is now worth â25) the yield it provides as a percentage, increases. It means that Greek bonds are seen as risky, but they'll still be paying 6% interest, or whatever. You simply got them on sale at 75% off. The ECB will end up owning most Greek debt (no matter what the politicos think just now) and it won't be at 28% interest.
Yes it can be doom and gloom, but it's inconceivable that the debt limit doesn't get raised. If by some chance the politicians screw the pooch and don't get it lifted, every last one of them better not be re-elected.
There will be no default. The debts will be paid one way or another the only question is what gets cut from the budget if the limits are not raised. It's just enforced vs voluntary cuts.
Wouldn't worry about it too much. Of much more concern is the yield on new treasury issuance, because that absolutely will cause recession.
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Lagarde is right and wrong:
Raising the debt limit now may prevent immediate nasty consequences.
But it will cause much nastier consequences in the (not so) long term.
Runaway debt leads to collapse or war or both.
Unfortunately, any responsible politician suggesting debt restraint would incur electoral defeat.
If you base your beliefs based on a Right Wing website and their propaganda, then you are a fool.
Like a Right Wing business man once said, "There's a sucker born every minute.".
You have a choice, follow them into bankruptcy or take away the credit card and make them live within their means.
Taking Medicaid away from the poor that will "make them live within their means" is certainly a Right Wing concept. But like almost everything that the Conservatives stand for, it has nothing to do with reality.
There's no such thing as a "bank-run on bonds" because bonds aren't liquid until their maturity date.
Yes there is and they are. The bond market is huge, it's much bigger than the stock market. Obviously the liquidity of particular bonds differ, but US treasury bonds are typically highly liquid. We're talking nearly a trillion $ traded per day in the US alone.
I can buy for example Greek bonds at far below the face value. How is that not a "bank run on bonds"? It's people dumping them because the perceived risk of default has changed for the worse. The market value is far below par. Same is happening to Italian bonds just now.
Also, banks can't just "call in their loans" ahead of schedule
Yup. I think you will find they mostly can. Usually some reason is required, but I suggest you look at the small print.
and in the stock markets that can delete existing wealth
You can't delete wealth.
The notion of net worth is complete bollocks: If the amount of money in existence is cut in half, so is the net worth.
=> The stock markets are not real wealth, it doesn't exist. If/when people start exiting the markets, e.g. The boomers retiring enmasse, the notional value drops, because it was never there. Numbers in a computer are not wealth, they are only a claim on wealth.
Well, those claims are simply not going to be honored because the wealth is not there.
But let's be correct about how the economics actually work, and what actually works. That makes it easier to see what doesn't.
Like The Bernank's Cargo Cult economics?
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The Median income in 1964 was $6,600. That seems low compared to the median income of 2004: $54,061.
However: The median car price was $3,500. Less than a years salary. In 2004, the AVERAGE car price was over $30,000. So in 1964 a car cost Just 53% a years salary. In 2004 it's 55% a years salary.
Not a big difference you might say, but now days cars are made out of plastic, have planned obsolescence and do not last nearly as long. There are STILL 1964 Dodge Darts on the road, that have had a minimum of maintenance. There is NO FUCKING WAY a 2004 Ford Fiesta is going to make it to 2044. NO WAY. So the value in 1964 is much, much higher, and that's not even the worst of it.
1964 House: $18,900. Well less than THREE TIMES a years salary. 2004 House: $221,000. Well over FOUR TIMES a years salary.
Take a look at bread, gas, and real commodities like Gold/Silver, and the picture is even scarier.
The American dream slipped away a long time ago. It started with the creation of the FED in 1912, and moving from the gold standard. It continued when JFK was shot in the face, since he wanted to RETURN to the gold standard. Then Reagan and all the corrupt corporate bankers that have been running the show since: INCLUDING all the Goldman Sachs guys in Obama's administration..... Well, we the people got completely screwed out of every dime. And we let it happen. We let it happen because we let corporations take over the news and television airwaves, and got drugged out on corporate pharmaceuticals, and the obvious tranquillisers like fluorine in the water. We need a violent revolution where these bankers are all killed. And then we need to get back on the gold standard and eliminate the FED. There's really no other way to avoid our current situation.
Thomas Jefferson said it best: "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
You can disagree with me, if you'd like. But try to disagree with Thomas Jefferson. He was much, much smarter than you or I, and had done oodles more research, besides.
I hold very few opinions. I hold information based on observation and fact. If you wish to disagree, please use facts.
The US government cannot print money. That ability has been granted exclusively to the Federal Reserve by the Federal Reserve Act of 1913. The United States Treasury may request money be printed, but the ultimate authority to do so (or to refuse) lies with the Federal Reserve. This was done intentionally under the assumption that it would remove monetary policy from the hands of politicians and protect the value of the currency of the United States from political meddling (exactly the kind you mention).
Now, whether the Federal Reserve has done that job or not is certainly debatable. Either way, the US government cannot print a single US Dollar on its own without a complete reversal of the Federal Reserve Act.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
What is the point of having a debt limit if you continuously raise it? I'm glad to see that the United States approaches their problems like I do with my New Year resolutions. I'll start going to the gym tomorrow.
Just hope that you got big enough car to fit a bicycle in it (or attach to it safely), because you won't afford gas to go to work, and you still need to goto gym and car :)
Well, i know gas is way cheaper in US (~1/4th of price here) but still.
Pulsed Media Seedboxes
Say half of the top 20% leave; the US government is now down 40% yearly income due to those 10% relocating.
I'm not sure how many "income earners" there are in the US; let's guess 150 million (but that's probably low). So you are suggesting that 15 million rich people will leave the US if taxes go up. That's just not believable. Currently, there are only about 6 million US expats in total.
And where would they go? There are tax havens, but those are for people who already have their wealth and don't need to earn any more. Most of the top 20% of "income earners" are still working to earn that high income, they aren't living off their investments.
It has been suggested that the 14th amendment of the constitution might give the president the power to raise the dept ceiling by a decree if necessary to satisfy the terms of that amendment. So far the president has declined to comment on this other than stating his belief that congress will do what they are required to do. The end result of a failure by congress to act might be that all members of congress, the courts, and the president (and his staff) would not be paid, while all other business goes on as usual. I think that would be proper.
What I see going on is something like this analogy:
You make a really good income but find that your family has been spending more than you make for quite a while and have now run up credit card and mortgage debt to the point (you are up against your debt ceiling) that after paying interest you can't pay all the monthly bills. You don't get another credit card/loan to continue on. Rather you sit your family down and level with them that this can't go on. In this analogy their response is to tell you that the problem is that you aren't bringing in enough money (I'll let you decide which political party represents you and which is your irresponsible family)! Their proposal is that if you will agree to bring in additional money, they will cut back on their expenses a little, but under no circumstances are they going to cut back enough to balance the budget (even over a 10 year period). They have become accustomed to their spending habits and are unwilling to reduce them and it is your responsibility to make more money even if you have to embezzle it from the company you work for (they make a lot of money and can afford it).
See how ridiculous this is? That is not how things work in the real world. In the real world you IMMEDIATELY cut your expenses back to the point where you are no longer going into the hole and then you determine how you might increase your income and whether that increase (taking a second job, etc) is worth it for the extra income. There is cost associated with gaining the extra income and you must weight the pros/cons of going after more money and it should be debated/decided.
The stock market rises and falls on speculation. The price of a stock should depend on the companies actual worth, which can be measured (how accurate such a measurement is depends on if the books have been cooked or not). What actually does happen is that the stock price depends on what investors THINK will happen to the value of the company, which can be based on rumor, inside or public information, and overall trends in the market as a whole. Speculation is sort of a stampede effect however, not always driven by reason but by herd instinct.
in 2006. Here's then Senator Obama's argument against raising the debt ceiling:
I agree completely.
Telling the US that it must do something is the best way to get it to do nothing.
Time is what keeps everything from happening all at once.
Is the US too big to fail?
Who in their right mind ever cared what the IMF said...
Whatever Washington spends results in a a tax.
Either a direct one paid through our friends at the IRS
or an indirect one paid by devaluing the currency.
(The indirect one is a particularly unkind in who it targets.)
Anything that forces Washington to balance the budget is ultimately going to lower taxes.
So holding the line with the debt limit seems a good plan.
(The only downside is that economic systems don't like unpredictability,
but this it seems a good tradeoff.)
Of course the folks in Washington it differently.
(They have no intention of ending govt of Washington, by Washington, and for Washington.)
So it seems likely we will see a bit of theater and then they will raise the limit yet again.
Sigh.
Where the Rich are dragging around a heavy suitcase full of pretty paper, and the rest of us are zombies.
Wealth is only wealth if you have some means of which to protect it, like rule of law and an ideal that what you have is worth anything. Even little dictators need a way to pay off their goons, and if your money is worthless, well don't bet on a lot of help.
I'll make my investments in food and ammo, and wait for the coming storm, hope you have an umbrella!
I must be missing something here - if my bank were to call me and tell me that it would raise my interest rates significantly if I missed a payment here's what I would not do:
Talk back to them telling them that they are bluffing about how much they'd raise my rates.
Instead, here's what I might consider doing:
1) Get a real job. No - not the pizza delivery job I signed up for when I lost my real job back in 2001 and have been 'getting by on' (This would be the unpopular raise taxes/increase revenues - trickle down economic theory has been shown to be a farce, let's get off it and actually pay for what we're spending)
2) Cut expenses. No - not just the 2.99 lattes. Real cuts - no more trips to the theater, no pretending that I can afford that data plan on my phone. Hell, for that matter, get rid of the wireless phone. (This would be the unpopular cut to 'sacrosanct' social security/medicare programs, among others... side bar - do my grandparents who have over $2 million in the bank really need to be drawing on social security/medicare... come on folks, let's get real here)
3) Make the tough decisions. No - not just whether to wear khakis or jeans today. How about whether to sell my car and use the bus or forgo birthday and Christmas presents for my family this year. (This would be what the politicians are currently _not_ doing)
Oh boy, a politicial thread! Let's see what's up!
"Bark bark bark Rethuglicans ams teh evuls! Grrr! Howl! Spit!"
"Bark bark bark Dumbocrats ams teh evuls! Grrr! Howl! Spit!"
News for nerds! Stuff the politicians laugh their asses off about. And remember, they're laughing at you, not with you.
First, you'll notice above that my comment wasn't saying ONLY raise taxes. It was saying that any serious proposal to eliminate the deficit and the debt will include tax increases AS WELL AS budget cuts. So my main point remains - if the debt is such a worry, then there should be tax cuts ALSO. And if the debt is really such an all-fired crisis suddenly, now that a Democrat is President, then why should tax increases be OFF the table? You're welcome to base some sort of reply on "trickle-down economics" or a variant, but be warned in advance that trickle-down AKA supply-side AKA Reaganomics AKA Voodoo Economics is thoroughly disproved and no longer taken seriously by any nonpartisan economists.
The Invisible Hand of the Free Market is what punches workers in the nuts.
It is funny that when right-wingers say "make them live within their means", it almost never seems to apply to corporations or the military.
It's almost like this rule is only applied towards spending that right-wingers don't like. Which almost always is spending on women's health, public education, programs for the young or the elderly, or anything that doesn't benefit a Christian church, a corporation or a personal friend.
Coincidence - or SATAN??
The Invisible Hand of the Free Market is what punches workers in the nuts.
What I see is more like this analogy:
Ever since you were born, you and all your brothers and sisters have been working on Daddy's farm. A certain percentage of what everyone earns has been put aside for the family's needs - medicine, schooling, and protection i.e. guns and guard dogs.
A couple of years ago, on the theory that it would make everyone make more money, the family started putting less money aside from what everyone made. This had no discernible effect on the family fortunes, besides less money actually being saved.
Your older sister and brother went to college. Now it's time for you. But when it's time to pay your tuition, dad says "Nope, sorry kiddo. It's time for austerity now. Daddy lost a lot of money on the stock market, and barely has enough money to buy guns and keep giving money to your rich uncles and aunts, so they can hopefully pay the rest of you some more money if they feel like it."
And when you say, "But Dad we already tried that, and they didn't give us any more money at all. They just kept it." he says, "Nyahhha nyahhh!! I can't hear you!"
And when you say, "We'll have more money if we just start saving more again from what everyone's making. Why not put the amount we're saving back to where it was 9 years ago?" Daddy tells you to shut up and get in the fields.
The Invisible Hand of the Free Market is what punches workers in the nuts.
I'm not sure what your point is, or how it is related.
"First they came for the slanderers and i said nothing."
I guess fundamentally we must decide two things: 1) When has the government (federal, state, and local) reached the limit of how much total money it should take from individuals in the form of taxes. The top 10% of taxpayers are already paying 70% of the taxes. Should they be paying 80%, 90%, 100%? Class warfare that is being used to say the "rich should be pay more" is great for a 6:00 news soundbite, but is neither a fair or a workable solution. The path we are on now is such that if we took 100% of the income of the top 10% of the wage earners in the US we won't balance the budget! 2) While I agree that "trickle down" hasn't worked, I don't think increasing taxes on the highest 10% (or 1%) will fix that problem whatsoever. We don't have an income problem, we have an outgo problem (i.e. spending more than we make). Continuing to hold spending cuts hostage to increased taxes just shifts the focus off the problem and makes for good politics (for democrats).
I don't agree with your analogy. The government didn't give any money to rich uncles and aunts. Not taking money in taxes isn't giving them anything. Unless you subscribe to the theory that all the income belongs to the government and anything that they let us keep is what they "gave" us. That's pretty close to communism. If you believe that the "rich" aren't paying their taxes, then why does the top 10% of wage earners in the US pay 70% of the taxes. Should they pay 80%, 90%, 100%? You pick a number that you think is fair. But the problem is no matter what number you pick YOU WON"T BALANCE THE CURRENT BUDGET. There isn't enough money to tax our way out of this situation. So now focus on the REAL problem: expenses (i.e. entitlements) and get out of class warfare politics. Perhaps there are tax deductions (loopholes) that need to be reviewed, but they are tiny and basically inconsequential when it comes to the sizes of deficits we are talking about. Funny think about deductions (loopholes) they were put in the tax law for some reason and unless that reason is no longer viable, eliminating them will have a negative affect on someone that benefits from them.
Then how are companies like Exxon and GE not only NOT paying taxes, but **getting refunds**?
The fact that the most profitable companies in history are actually being PAID money by poor and middle class taxpayers, shows that's exactly what's happening.
Second, also note the financial bailouts - which gave banks money without restrictions in order to save the economy. Which the companies then spent on giving BILLIONS in bonuses to the same people who cratered the economy. Now note that this is a **net win** for them - the government has given them FAR MORE money than it taxed. Which also exactly matches my analogy.
You'll note that my analogy didn't say "ALL your uncles and aunts."
Therefore, even though you don't like my analogy, I think you can see that it still stands. Also note that these loopholes are the ones that the GOP is interested in preserving.
Interesting, isn't it? It's all "austerity" when the elderly need some pennies to keep their houses warm in winter. But when a company like Exxon or GE, or a wealthy non-producer like a hedge fund manager needs buckets of gold to stay comfortable? Somehow we can afford that.
Why is that? I'd love to hear why that's good for America.
Finally, I'd like to note once again that you're misconstruing what I'm saying as concentrating ONLY on raising taxes. I'm NOT doing this. What I want to hear is, if the debt is such a huge problem then why is raising taxes ENTIRELY off the table?
Why not a balanced approach of raising taxes and cutting the budget? What is wrong with that, besides supply-side economics which once again have been proven not to work?
The Invisible Hand of the Free Market is what punches workers in the nuts.
I think any such approach should be centered around this fundamental point: what is the tax rate that works best for America?
It seems that the tax rate that helped America to its worldwide success was in the past much higher on the wealthy. So it appears from past historical experience, and the present of our competitors who all have higher tax rates on the wealthy, that that is the direction we should go in.
I don't see how it's bad for the wealthy to pay 70% of the taxes, if they're earning around that much in terms of wealth. Which they are.
But what I think is more important than how much they are taxed, is how that money is spent. What is the best way to invest money in America?
Because money once gathered can be blown irresponsibly or spent wisely and yield a return. For example, you could spend a lot of money on programs which generate no effective return, such as war, or spend it on programs which continue to return for the entire country. Such as interstate roads, rural electrification, social security, and public education.
Once a reasonable non-partisan estimation of what the most effective kind of programs are, and what the long-term gains we want to achieve are, taxes should be estimated around that.
I also think a flat tax rate is kind of silly. The poor and the middle class simply do not have the level of disposable income that the upper classes do. So to simply have the same tax rate for everyone is unfair to the majority of the US population.
The Invisible Hand of the Free Market is what punches workers in the nuts.
They are getting refunds because our elected officials decided to promote some economic activity (i.e. increased oil well drilling, etc.) by giving a deduction. Now we can argue if that was a good idea (many of them are not), but don't pretend that removing the deduction will only result in more taxes and have no other affect. This is a dynamics problem not a statics problem. Every decision that is made has a ripple effect and often unintended consequences. Every dollar taken in taxes isn't available for investment. Those Exxon and GE stockholders are making profits and unless they are putting them underneath their mattresses, those profits go somewhere (that they won't go if they are taken in the form of taxes). Frankly I've NEVER believed that taxing corporations would work. They either just raise their prices to cover the taxes and in effect, the customer pays the tax anyway or they lobby for loopholes that get them out of the taxes altogether. I'm a big fan of the flat tax put forth by Senator Shelby many years ago (http://heraldnewsmedia.com/content/?p=2012), but that didn't go anywhere because 50% of the people on the low end aren't paying any taxes now (and they don't feel the responsibility to contribute at all) and there is another group on the high end that aren't really paying a fair amount in taxes (this we agree on, but even if they did we won't fix the problem). BTW-Corporate income taxes only represent 12% of the total collected (2010 http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm) so if you could double them (which you can't) it won't even come close to the shortfall.
Sure, good point ...
I have a minivan, and I'm racing the national default to pay it off.
Really, I'm starting to get really nervous about the Mayan date for the end of the world... the national collapse of the US might just do it...
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Let's be truthful. The fair thing is for everyone to pay the same amount. How would you like it if when you went to a restaurant or movie theater they asked your income and set the price based on that number? That wouldn't be fair and you know it. Now unfortunately the fair thing isn't workable, so we have to do something that is minimally unfair; like take more taxes from people that are more productive. Do you really believe it is fair to take 70% of someone's income? I'll bet if you started a company and it was very successful, you would not be remotely interested in contributing 70% in taxes. You make $10 million and pay $7 million in taxes. In theory you might say: I could live on $3 million, but I would bet my house that you would do everything in your power (deductions) to minimize those taxes. You worked really hard for a a really long time to be a success. The flat tax is not that everyone pays the same amount, rather it is the same percentage (with a REALLY low floor). I sincerely believe that it is ridiculous that anyone would pay NO taxes (whether on the low or high end). Everyone should contribute some amount no matter how low or high their income is. Everyone in the US benefits from being here and should be expected to contribute towards paying the government's bills. The very idea that I can live in the US and rationalize that I shouldn't contribute is IMHO un-American. I do make special exemptions for the mentally/physically challenged people. We are a big enough country to take care of these individuals. Everyone else needs to get off their asses and get to work. If you goofed off in school and didn't take advantage of your time there, you are reaping what you sowed. If you are too lazy to put in the 16 hour days for 10-15 years it takes to really get ahead, quit whining. I think you are on the right track when you say "For example, you could spend a lot of money on programs which generate no effective return, such as war, or spend it on programs which continue to return for the entire country. Such as interstate roads, rural electrification, social security, and public education." I think the rub is that there are programs that have never worked, but we the response from many is that "We just need to spend more". We don't seem to be ever able to get rid of programs that don't work or subsidies that are no longer needed. They just keep piling on. We can't even agree on how to measure success. Example: the money spent on education has gone from $14B in 1980 to $43B last year and students keep falling further behind. Clearly the increased spending didn't produce expected results, but Obama's solution is to recommend that the 2011 budget be raised to $68B! A liberal never met a spending program that they didn't like or one that was over funded.
Let's be truthful, and live in reality. The fair thing for everyone is that people pay something in line with what they can **AFFORD**.
Otherwise you're asking someone who is using and benefiting from 5% of the country, to pay as much in cash as someone who is using and benefiting from %70 of the country.
If you are only using a car to go work, you are benefiting from less of the roads than the President of a company whose employees use that road to drive to work, ship products on, etc. Ditto for the police, fire department, and military. Even Social Security, which means that the employer has a workforce which is secure and isn't demanding a similar set of benefits from the company.
We're either a nation or we aren't. If we are, we all work together. Which means that some people who benefit more as a percentage, pay back a higher percentage.
The Invisible Hand of the Free Market is what punches workers in the nuts.
OK! So this is exactly in line with my analogy of paying money to aunts and uncles, in the hopes that they'll give money to others - which they haven't. Here, I'll quote that part of the analogy again for you:
So, can you admit that my anology is actually apt? As that money given to them would easily pay for a great many of the programs which we allegedly can't afford?
And? Is that any reason to not include closing those loopholes, as part of the deficit reduction?
Basically, is there ANY REASON to not include closing those loopholes, as part of the deficit reduction? Since reducing the debt and deficit is so all-fired important, right?
The Invisible Hand of the Free Market is what punches workers in the nuts.
>>Basically, is there ANY REASON to not include closing those loopholes, as part of the deficit reduction? Since reducing the debt and deficit is so all-fired important, right?
It is not that reducing the debt is "so all-fired important" it is the deficit that has gotten out of control. We can manage the debt. Our debt ($14 trillion) is about 7 times revues ($2 trillion). That's like someone that makes $100K having $700K in debt. Pretty close to the limit, but not completely outside what might be serviceable. It is the $1.5 trillion deficit that can't be maintained. That's like adding $75K per year to their debt in the example above. It cannot supported.
>>So, can you admit that my anology is actually apt? As that money given to them would easily pay for a great many of the programs which we allegedly can't afford? What money given to them? The government didn't give them any money. Letting someone keep the money they earn isn't giving them anything. Also, one man's loophole is another man's deduction. Do use any loopholes (take deductions) on your income taxes? Which ones are you willing to give up? I'm guessing none of them. What kind of effect do you think the elimination of the mortgage interest deduction would have on the economy and jobs? How about the deduction for children (actually it may be time to get rid of this one because we don't really need to motivate people to have more children do we)? The elimination of a deduction (loophole) will have an effect on the economy, some smaller than others but no deduction elimination will have no effect. Increasing taxes might temporarily increase revenues, but eventually there will be an offsetting negative effect as well. Fundamental question: Do you believe that there is a maximum total percentage (below 100%) of the total incomes of businesses and individuals should the government take in the form of taxes? When we reach that number what should happen?
Citaction for your poll data re "majority of Americans would prefer a European=style socialist setup", otherwise I'm calling bullshit.
If I responded to Anonymous Cowards, I would include a link to the Pew Research Poll from June showing that between 77 and 86 percent of US adults do not believe Social Security and Medicare should be cut. I would call those programs "European-style Socialism" but maybe we should call the European systems "American-style Socialism".
As long as you don't use the world "Socialism", in every single poll, Americans by a large majority prefer things like single-payer health care, government pensions (social security), etc.
In fact, in the Pew Poll I mentioned above (you can google it, AC) even a solid majority of Republicans and Tea Party members favor leaving Social Security and Medicare alone or making them even stronger.
Yes, Americans want what the Europeans have, but they don't want "Socialism". The corporate media have demonized the word, but the preference for socialized programs have not faltered.
You are welcome on my lawn.
One of my list items was "- They could declare that the most recent Budget supersedes the older Debt Limit law." That's how you constitutionally ignore most of the debt limit law. On many other topics, I've wished that the President would use his Constitutional Scholarship powers to find what he has to do and do it, instead of using them to find loopholes or opportunities for delaying his responsibilities by wording his refusal to obey the Constitution in clever ways, but it's not like his predecessor was any better.
I did forget to put "Oh, Noes!!!" after the closing the Washington Monument bit, though :-)
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Sorry - "QE2 was the size of..." leads to "When did we start talking about ocean liners here?" "No, wait, Queen Elizabeth - does he really mean Maggie Thatcher?" "Oh, right, Quantitative Easing, never mind" :-)
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
> There aren't any easy answers left no matter what billstewart et al. wish to believe.
There are two radically different problems here - what to do to avoid disaster when the US hits the entirely artificial Federal Debt Limit in a month or so, and how to deal with the actual problem of Federal debt, budgets, unfunded pensions and other obligations, and general financial and demographic mess the country is in. Yes, the latter is really really hard, and we not only have to balance the budget, we either have to run it into a major surplus to pay back the Social Security Trust Fund, which was invested in "perfectly safe" T-bills instead of in the market, or shaft the Baby Boomers much earlier than 2036 or whenever it is they're currently (pretending we're ok until) planning to shaft us. But I'm not talking about that problem.
I'm talking about the artificial Debt Limit that we're about to hit, which the President, Congressional Democrats and Republicans are playing partisan chicken games with, threatening that the country will fall into Disaster! Chaos! Anarchy! Dogs and Cats Living Together! if the other side doesn't immediately give in, with the primary stakes being political support for the 2012 election. One side has already thrown the spare steering wheel out the window, while the other side's driver is sticking his head out the window making moose-antler faces. At some point in the next month, either they're far stupider than I give them credit for and they'll crash, or they're both going to swerve a bit, just miss each other, and give each other high-fives where they hope most of the audience can't see, and the real question is how far on which side of the road they'll be when they do it. If Obama's extra-clever he can jump out of the car, change his clothes, and he and Geithner can show up as the Keystone Kops and make the Congressional Democrats and Republicans stop the game before they crash.
I think Obama has the advantage here, and if he's good at it he can pin most of the blame for the problem on the Republicans, and if not, he's going to fall really hard, because "It's still the economy, stupid!" and he's let the Republicans frame the debt as his problem, not Bush's. I did miss one other option he can use, which is "Sell the gold in Fort Knox, mostly to annoy Ron Paul, but also to make the Tea Baggers and Republicans take responsibility for their spending." (And you may have noticed that Obama's been quietly selling off the Strategic Petroleum Reserve, which not only makes gas prices a bit lower but also gets the Treasury some cash, even though, as when GHWBush did it during the First Gulf War, he hasn't timed it for the best profit or market benefit.)
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
OK, fine. It's only "gotten out of control". My question remains the same: is there still ANY REASON not to include closing those loopholes, as part of the deficit reduction?
Come on now. Just go back several comments in this thread. You know when Exxon, GE and others received a REBATE? That means they were given money - and MORE MONEY than they paid in taxes. That means they paid zero taxes, and then received MORE MONEY after that.
That means the government gave them money. Its MORE than "allowing them to keep the money they paid", which merely means they would be riding for free while using the country's services.
If you think that means the government DIDN'T give them money, then please explain how giving them back MORE MONEY THAN THEY PAID isn't actually giving them money.
Is there any part of that which is not clear? Otherwise, can we move forward so that you can at least admit that the government made them money? Since, well, the government gave them money, and once again MORE MONEY than they paid?
The Invisible Hand of the Free Market is what punches workers in the nuts.
The US government cannot print money. That ability has been granted exclusively to the Federal Reserve by the Federal Reserve Act of 1913.
That is a law which can be overturned by another such law. It's a really bad idea, but printing money is a common (perhaps even the default) ploy for desperate governments.
"then they didn't deserve the legislation"- but what about your citizens, did they deserve the legislation?
No, they didn't either. I count them implicitly since the Democrats were acting as delegates for the constituents who elected them.
This anti-democratic attitude strikes me as being the rotten core of your partisan political system.
It's a natural result of having a group of people with divergence interests. It's not my job to sacrifice my interests for some else's interests solely on the basis that they managed to get a majority in the legislature for a couple of years.
As I see it, the failure of the Democrats to do much in the 2009-2010 was primarily due to the ideological blindness and incompetence of the political leadership. If these legislator's goals are a priority of a large enough fraction of the US voters, then there will be future chances. If it's instead a passing fancy, then there won't.
I think you picked up an an article that was subsequently corrected:
http://blogs.forbes.com/energysource/2010/04/07/exxon-says-it-does-pay-u-s-income-taxes/
Oh and by the way, they employed over 100,000 people that paid taxes as well.
You might also want to look at this about GE:
http://www.theatlantic.com/business/archive/2011/03/did-ge-really-pay-no-us-taxes-in-2010/73178/
They had huge losses in the GE Capitol division and the losses washed out their profits of the other divisions. What is so hard to understand about this?
So the /only/ OECD country that pays less taxes then the USA is Turkey (by a slim margin). Taxes are almost /double/ in Norway, Sweden, Denmark and Italy, and these countries are nothing like North Korea. In fact, Norway as a /higher/ GDP per capita then America.
Do you have any empirical data that already shows that paying less taxes will somehow improve the economic situation? I am not talking about shoot-from-the-hip theories, but actual data.
Like all pain, suffering is a signal that something isn't right
From your own article that you cited:
So, which are we to believe - the actual statement filed, or the word of a spokesperson who refuses to actually divulge any information?
I prefer to go with the facts, until the facts are disproven by other verified statements.
To quote from the other article you cited, re: GE,
Leaving it aside is avoiding the facts rather than proving them wrong. We are talking about the amount of money that GE paid as a business. If GE made a profit as a business, it should pay taxes as a business.
And, according to the NY TImes article - which the NY Times stands behind, and which GE has demanded no retractions from: http://www.nytimes.com/2011/03/25/business/economy/25tax.html
So you tell me - what is so hard to understand about that? If GE made a profit, it should pay taxes on that profit. If it is legal for GE to avoid paying taxes on that, then those are legal loopholes that should be closed. And certainly should be closed before we do other things in the name if "budget austerity" like cut off the oil heat for the elderly in winter. Right? If not, why not?
The Invisible Hand of the Free Market is what punches workers in the nuts.
Sort of "newspaper semantics". They made a paper profit in a year, but they had carry forward losses that offset the profit and reduced their taxable income to zero. If I have a company that loses money for several years and then I have a breakout year and make $20 million dollars. The newspaper reports that I made $20 million dollars but paid no taxes. Sounds like "the man" is sticking it to us again. I paid no taxes because I had losses that were greater than the $20 million in profits. The newspaper is looking for a headline and got one (same with GE/Exxon). But they weren't completely honest with you. The profit was a "paper" profit not a real one.
So? Let's say that's the case. *I* can't do that, as a private taxpayer. If I lost $50k in one year and then made $50k the next year, I still have to pay taxes on the year I made $50k.
What is a single reason why this tax loophole should NOT be closed, if reducing the deficit is of such importance?
How does keeping this loophole open help pay the debt, if corporations can do that while I can't? Since it is an established fact that trickle-down theories don't work, what other possible reason is there that this is a good thing?
Why is it that, IN SPITE OF OUR DEFICIT AND DEBT, we can afford to let corporations do that - but we CAN'T afford to give the elderly far, far less in oil subsidies so they can keep themselves warm through the winter?
The Invisible Hand of the Free Market is what punches workers in the nuts.
My party? Just because I want balance?
Why do you think those republicans caucus with the Tea Party? Because they're militia nuts who want to be out of a job? No. Does the environmental wing of the Democratic Party side with the fringe groups who want to kill anyone who doesn't live in a teepee made from their own shit? No. Because the term "fringe" means just that.
Just like the fringe of the Republican party... the Democrats have their fringe. When the fringe becomes a majority voice in EITHER party (I am not convinced there are two parties anymore)... then we can revisit this issue. Otherwise it sounds like a bunch of partisan bluster.
I've got two words for anyone who doesn't think there are fringe groups in the Democratic Party as well "George Soros."
(I never said there WEREN'T fringe groups... I just do not equate those with any of the mainstream politics of even the Teabaggers.)
Take a step back from characterizing any disagreement with you as being someone from 'the other side'... and think for a moment before you buy into the phobia. Do I believe the Democratic Party in the Northeast is run by the Black Panthers? No, but I can cite several mainstream media (and no, not just Fox News) outlets who did stories on just that unsubstantiated nonsense. (google is your friend.) Giving the story ANY credence even "asking" if it is true means that they believe, even a little, that there was voter intimidation by the Black Panthers. Do the Black Panthers control the Congressional Black Caucus?
Take a step back from believing in the scare-tactics and realize that the Teabaggers are a crude implementation of Libertarian philosophy that doesn't want to overthrow government... just to pull its power down to constitutionally provided levels. There are nuts... just like there are nuts in the Democratic party... what you have to realize that if you are looking for boogey-men... you will find them. On either side of the aisle.
Go to opensecrets and find some of the interesting donors to Democratic (and Republican) candidates... the nutjob fringe of the Tea Party is the least of anyone's worries.
It's the Stay-Puft Marshmallow Man.
Do you realize that the current President argued on the Senate floor in 2006 AGAINST raising the debt ceiling?
Do you realize that with the exception of the stupid tax on jet airplanes (remember how well that worked for yachts?) the Democratic party wants MORE money to solve the problem of OVER-spending by BOTH sides of the aisle?
How this is a "Tea Party" fucking with the budget is frankly tilting at windmills... convenient scapegoat because of their fringe (that you so acutely documented)...
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200
Sorry this is from a fringe group:
http://www.heritage.org/budgetchartbook/federal-government-revenues
http://ntu.org/tax-basics/who-pays-income-taxes.html
One of the things I love to mention, and this is from a great President (JFK)... he LOWERED the marginal rate for the top bracket and actually INCREASED revenue... because if you change the marginal rate upwards, you freeze the money over that amount into savings or bonds or something that doesn't generate revenue (he has a great speech about it somewhere... I forget where I read it.)
But let's be frank... people who complain there is a revenue problem because of lower tax rates forget the difference between MARGINAL and EFFECTIVE tax rates... It's a spending problem. It has been since the last years of the Carter Administration....
But never let facts get in the way of a good partisan rant...
It's the Stay-Puft Marshmallow Man.
Actually you are quite wrong. You can carry forward losses and that has been a part of tax law for a LONG time. The problem with individuals is that many of them can't really have losses because they don't have the ability to go below zero unless they have other than normal W2 income. You can't really get a negative W2. Now if you invest $50,000 in a company and it goes bankrupt, you can apply that $50,000 loss against future income until the loss is all gone (even into future years). I know this is true because I has a lady embezzle a rather tidy sum from my company and the carry-forward loss took several years to use up on my personal return. That is what the companies are doing. Take this very important tenant of tax law away and corporations would not invest in many ventures that might not pay off the first year. They aren't cheating, they really lost the money. They are just recognizing that fact when they finally do make money. This doesn't make them money in any way and they eventually have to pay taxes on all of it. They aren't getting any "free lunch", it is just fair and I doubt hardly anyone with any experience in business would refer to this as a loophole.
As to reducing the deficit: the US government now pays around $400B per year about 1/6 the total budget yearly in interest. If we keep borrowing $1.5trillion per year (what will be borrowed in 2010) soon that number will so large that it is unserviceable debt. That is why we MUST fix the deficit. We can chip away at the debt over time (just like you would do as an individual if you found yourself in this situation), but we must not continue to spend more than we make first. Then let's see if there are ways that make sense to everyone involved to increase revenues. The old saying goes "When you find yourself in a hole, STOP DIGGING"
As to your second point. The government doesn't have the responsibility to give anyone (except for the mentally/physically disabled) anything. That is the job of the individual, their churches, and their families. This is a fundamental difference in belief between liberals and conservatives. We can't pay people not to work, supply them with unlimited medical care with prescription coverage, pay them to have children out of wedlock, and expect it all to work out. They are provided a free education and if they are truly poor, financial aid and pell grants are available for post-secondary education. Having worked my way through school and then paying off my student loans after, I know it can be done.
Reality check: The only "tea party" affiliate that has filibustered ANYTHING was Rand Paul who tried to filibuster the renewal of the PATRIOT act. . . Your beloved Democratic majority in the Senate tried to block him at every juncture and MADE SURE it passed.
Implying that it's just Democrats supporting the act, rather than large majorities of both parties, makes you a very dishonest person. I hope you realize that.
You people are dangerous (sorry to say, but it's true).
You're delusional, and you seem to forget all the Bush cheerleaders who turned a blind eye to all the trouble he caused, and now try to pin those problems on Obama. It would be funny if it weren't so scary.
This just indicates a lack of discipline and coherence in the Democrat side. They had almost 60 votes. They couldn't get deals with Republican defectors to overcome the filibuster (a traditional legislative tool dating back as far as I know to the establishment of the Senate) and I'm cool with that. As I see it, if they couldn't overcome the filibuster and pass legislation, then they didn't deserve that legislation.
Democrats represent a wider spectrum of political beliefs, ranging from right-leaning centrist to far left nutjobs. Republicans have a much narrower scope, in that if you aren't a far right nutjob, you can't get elected as a Republican in most places. So democrats naturally don't vote as a bloc like Republicans.
So, actually I'm quite wrong except that I'm right. Please look at the bolded area of your own quote, above. Most individuals only have normal W2 income.
Oh, come now. Exxon and GE are far from having their first years in business. And, more importantly, their STOCKHOLDERS know and are well aware these companies are profitable. And if they in fact actually losing so much money, and this is NOT some clear and obvious tax dodge, then why haven't their stocks tanked?
So please, if you will, come back to the main point, and please answer this question:
IF paying down the deficit and debt is so important, then WHY can't these loopholes be closed for established corporations that have no real losses, only clever bookkeeping that has no effect on their actual stock market value? Why must the deficit be paid ONLY by budget cuts, in your opinion?
I mean, let's say this really is supposed to be such a Darwinist society that we simply CAN'T afford to give pennies to the poor. In that case, then why CAN we lose BILLIONS in tax revenue from HUGE corporations WHILE they are having their most profitable seasons ever? Why aren't the huge corporations strong enough to take the tough love that the weak, poor and elderly are supposed to get?
The Invisible Hand of the Free Market is what punches workers in the nuts.
The Republicans don't want to raise the debt ceiling. The Democrats do. Since the House of Representatives is controlled by the Republicans, the Democrats need to either offer the Republicans a deal that the party as a whole will accept, or at least offer terms that are good enough that a few dozen Republicans are willing to go against party discipline and vote with them. So far, the Republican Party's suggestions about what they'll accept are roughly along the lines of "We want you to roll back Obamacare, The Great Society, and half the New Deal, plus we want a Balanced Budget Amendment. And a pony."
One of the big problems is that the Tea Party is ideologically committed to balancing the budget - the issue that created them as a movement was the sudden discovery in 2008 that Federal Budget Deficits are Bad, which had not been a problem when George W. Bush was in office and the Republican-controlled Congress had doubled the Federal Debt, but now it was obviously a serious problem. On the other hand, the Party Machine candidates are ideologically committed to not raising taxes, and maintaining the Bush-era tax cuts for the rich, and that's mandatory for any deal approved by the party leaders and their corporate sponsors. And the Party Machine doesn't want to risk alienating the Tea Party wing too much, especially when it's easier to play chicken with the Democrats.
One of the two major US political parties hasn't had a balanced budget since the Eisenhower Administration. Neither has the other one, but the Democrats like deficit spending for Keynesian ideological reasons, and the Republicans (except Nixon) pretend they don't.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks