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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."
can people expect to wage 2 ground wars, and 1 air war, while giving tax cuts to the wealthy.
"There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." Warren Buffet. His tax rate is lower then his secertary. They pay more then the none rich, because they make retardedly huge amounts of money, but for some reason their taxes as a percent of income is much lower then those of the middle class.
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.
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.
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.
Er... this has almost nothing to do with what happened with the banks in 2008. In fact, it's about as unrelated as it is possible for one looming economic crisis to be to some recently past economic crisis. The fallout from the prior crisis is a major contributing factor, of course, but if there is any issue of "looting", it's going to be we the people, through our elected representatives in Congress, who do it.
This crisis is entirely voluntarily precipitated by our political leadership, albeit with the excuse that they believe *some* crisis is coming sooner or later. We are facing default not because we've spent more than was budgeted, or more than was appropriated, but because we spent money that as budgeted and appropriated but now Congress won't let the Treasury raise the money to pay the people we owe money to as a result.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
A relevant cartoon.
Oh, the infamous Lafffer curve (too lazy to post a link to wikipedia, check it yourself). Too bad it has not been proved, nobody knows where the optimal point is (why they always assume the optimal point is with LESS taxes, and no with more?), and everything else. But it gives some people a good mantra to repeat and repeat.
As other post has already put, everyone is willing to make sacrifices and cut costs... unless it is in something that benefits them.
At least some people is honest and choses consequently "I want good public services and I'll pay the taxes needed to/I do not want good public services but I want less taxes instead". Others just say"If I pay less taxes then everything will magically solve". With the first people one can try to get to a common point, arguing with the later ones is just a waste of time.
Why can't
In other news, heroin addict must get another fix or face "nasty consequences".
Set your phasers on "funky"!
The Laffer curve is a miserable failure, as anyone with even the slightest knowledge of economic history can deduce.
The only private investments tax cuts will spur will be in paying accountants to find new and unique ways to hide the taxable income in esoteric financial constructs designed specifically for the wealthy.
Balancing the budget requires cutting spending AND raising taxes.
~X~
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.
So that's why the US wanted her as head of IMF
I don't think you have your finger on the pulse of America (what little pulse there is). Unless you're going to acknowledge the same civil rights to gay people that everyone else has on a federal level, or you're going to shut down the NFL, or you're going to ban latte's, there is nothing that will ever cause the US to erupt. If that video of our troops unloading on unarmed people with really pathetic commentary on the open mics didn't cause a riot, nothing will. If Goldman Sachs executives running the treasury giving massive bailouts to Goldman Sachs didn't cause riots, nothing will. If going to war for almost a decade against a country that didn't attack us for reasons that were later acknowledged to be manufactured and false (and that we're still participating in) didn't cause riots, nothing will.
Why not? They've been robbing us for decades, to pay for their retirements and social services.
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?
You're kidding, right? Congress has been dominated by giant pussies for decades, who do whatever the president demands of them. They may bitch and whine and moan, but when it comes down to the voting and the actions, they're less a counterbalancing branch of the government than they are the lapdogs of the president (whichever president it is at the time).
Frankly, it's time to fucking grow up and stop spending more than we make. It's bullshit to say "you can't point that gun against our head!" when referring to refusing to raise the debt ceiling. Continuing to have unrestrained spending forcing us to continue raising our debt is itself a threat held against our own heads. When someone has a spending problem, you cut up the fucking credit cards. I don't see how difficult this is for us to understand.
I mean, really, what do you expect to happen? We're going to raise the ceiling this time around and everyone will promise to "be really good" next time? The democrats will promise not to spend zillions on more bullshit social programs and the republicans will promise not to spend billions on bullshit military actions? Really? If we just promise to let them go over this one more time?
This is the same fucked up "logic" that the public was fed to justify bailing out corporate America. Feed them bullshit through the media until everyone was worked up into a frenzy. We can't afford NOT to hand out seven trillion dollars! If we don't, the entire country will be bankrupt and you will be eating road kill off the streets as your house burns to the ground and your entire family contracts malaria!
All these endless threads here about "conservatives durp durp" and 'liberals durp durp". Let's call it what it is... fucktards and fucktards. And both groups of fucktards are trying to scare the shit out of you to continue raping us all. And we're fucking falling for it, like morons.
It's clear what's going to happen. We'll raise the ceiling into the indefinite future and we'll continue to spend more and more into the indefinite future, until our deficit becomes so large that it topples over and the whole country is done. There will be a breaking point, eventually. We have to get control of this bullshit, sooner rather than later. But... we won't. And so we'll get what we deserve.
Dividends are related to how much profit the company is making; a drop in the stock market alone will not cause a drop in dividends.
People tend to be afraid of stock market drops, because they have the perception that the drop in the stock market caused the great depression. It did not, it merely accompanied the depression.
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.
"First they came for the slanderers and i said nothing."
Lagarde is also the politician who has been involved in a huge scandal over offering french troops to Tunisia's ousted dictator Ben Ali to suppress demonstrations.
In other words, she's perfect for the job. She supports dictatorship, systemic oppression of the masses to benefit rich elite and increase of power of private financial institutions at the cost of public ones.
Which is exactly what IMF has always stood for under all the glossy slogans.
It would frankly be wonderful if enough Congresscritters had the chuzpa to not raise the limit.
Yeah, it would be great if our credit rating were downgraded. That would be wonderful. Paying extra percentages on the 14 trillion we already owe and can barely pay is a wonderful way of staying afloat. In fact, I stay up nights thinking "Gee, I wish the value of the dollar entered the sort of massive decline that Mexico saw in the 90's."
What I really wish is that the Republicans or Democrats actually believed that a balanced budget was worthwile. I'm sorry, if you're willing to axe a historic deal because you don't want to close tax loopholes on the most profitable industry in America (all the while cleaning up after its oil messes), then you're just a posturing nit. Oh no, we can't lower military spending. Oh, Social Security is sacrocent. And while we're at it, let's extend those tax cuts for the rich again, and keep taxing income from stock accounts at half of what normal income is taxed as.
The ______ Agenda
"military contractors, lay off TSA, DEA, ATF, etc. " You mean they could remain on furlough until some heinous crime or terrorist act happens. Then Obama would get screwed. And those aren't the agencies driving the debt. 2/3 of the budget is ENTITLEMENTS. Fail to attack those means you do squat against the debt.
There is another aspect to the debt. The Bush tax cuts were enacted when they "could see surpluses as far as the eye can see". Well, that lasted...well...it didn't last. Why didn't it last? Two elements: (1) Bush never funded the wars, and (2) the Clinton years were the dot.com bubble. Regarding (2), there was deadlock between Congress and the White House, neither would agree to the other's spending plans. So they simply stopped increasing spending lest their enemies get the leg up in the next election.
In addition, the economy changed during the aughts. Companies shifted more of their operations overseas due to shortsighted Business School Product, and an antiquated tax structure that made it prohibitive for Big Business to invent in the U.S. The latter is open to speculation. Anyhow, the anti-regulation atmosphere of the Bush Years (although started under Clinton attempting to "triangulate") allowed investment banks to invade the loan market. They were aided by the credit rating agencies, and Congress who thought any business is good business. Their bright idea was to securitize (sp?) loans and sell them widely...with collateral "guaranteed by the rating agencies".
That alone wouldn't have caused the current mess.The missing element was the American people. Being greedy and too dumb to understand (or read) the fine print, they bought houses they couldn't afford, bought second houses, flipped houses, took equity out of their houses to piss off on large SUVs (thereby distorting the car market), etc.
This encouraged the Contractors. It used to be you found a contractor to build a house the bank decided, based on your financials, to loan you the money to have build. But in the rarefied atmosphere of no-one minding the store, mega-contractors took over. They will buy a 100 acres or more and build speculation houses (spec-houses). And the American people sucked them right up. Being dumb, you could buy one and think it was worth the purchase price. Being greedy, you could buy one with the intention of flipping it.
And now, the chickens have come home to roost. And everyone wants to point fingers. There is plenty of blame to spread around, and I've neglected several miscreants.
And the Tea Party is not intent on wrecking the economy. The economy is already wrecked, now we are only fighting on how to fix it.
Indeed in a normal year the GOP would have jumped at that deal, which is because it's a rather extreme deal. I'm not familiar enough to comment on it too much, but the tax increases are pretty minimal and are mostly the result of closing loopholes.
Raising taxes will only further DECREASE revenue.
That is just an opinion that the vast majority of economists (and educated people) disagree with. Sometimes I wish we could send all the people like you to a separate country, so that you can screw up your own lives without affecting mine. Perhaps the feeling is mutual =). There is no tax, and no government in Somalia. Go for it.
Like all pain, suffering is a signal that something isn't right
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.
Oh, for fuck's sake - listen up closely; I'll say this again.
Ready? SOCIAL SECURITY HAS A $2.5 TRILLION SURPLUS. IT'S NOT A FUCKING PROBLEM AND WE HAVE DECADES TO IMPROVE IT.
Pain is merely failure leaving the body
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
You mean like trickle down (80-88) voodoo economics (88-92) free trade with countries with no environmental laws (92-2000) and of course lets cut them taxes on the rich a lot! (2000-2008) and finally bailout baby bailout! (2008-present) like that?
Look at what the tax rates were during the best times of this country such as the 50s (which the Rs idolize) and today. You will see that taxes on the top 5% have never been lower not in the ENTIRE history of our tax system. Not once.
So if the libertarian/republican trickle down "Its the gubment!" theory held true, we are living in a utopia right now. Are we? hell in just the last 10 years with EVER lowering taxes on the top 5% we've lost 21,000 FACTORIES even as the politicians tripped over themselves to give ever larger tax cuts to the top 5%, oh and the middle class? They are just about DOA. If the "give the rich more money" theory was sound, where are the results? Where is the trickle down?
Oh right it is actually trickle upon, as in they piss on the peasants while lining their pockets. well that is how revolutions get started my friends. ever hear a little ditty called "no taxation without representation"? Or what the tree of liberty needs to be watered with? If those at the top think the other 95% are just gonna go quietly starve to death in a corner you got another thing coming. Hell we have our own soldiers taking oaths to FIGHT THE GOVERNMENT that trained them! Think this is a coincidence? I think when the shit hits the fan they are gonna find like old Mo Mo the military? Well they got families too and they ain't rich.
It ain't gonna be pretty but perhaps it is just what this country needs. No government lasts forever, just look at how many they have been through in Asia and Europe. Maybe it is time to start over.
ACs don't waste your time replying, your posts are never seen by me.
And we could return to Clinton's tax rates, which were as obviously consistent with a growing economy as Bush's (ie. current) tax rates have been consistent with a collapsing economy.
Clinton had an economy artificially buoyed by the dot-com bubble. When this collapsed, Bush allowed a property bubble to take its place. Neither economy was supported by actual production, both were propped up by wild speculation.
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Socialism has worked well in big parts of Europe for longer than your country has been around.
I'm not well versed in history, but I thought Europe was mainly controlled by monarchy when the US was founded. Which parts of Europe had socialist governments in 1788?
You're just afraid of equality because it's the antithesis of wealth. There's nothing wrong with earning your keep and getting paid according to your job, but once you no longer have to work you're about as productive and useful to society as the poor slob begging in the streets.
If I make something I should own it. Justice demands it. So if I build a house, it should be my house. If my neighbour works harder than me and builds a better house, we no longer have equality but we do have justice. If he continues to work while I am enjoying relaxing and entertaining in my house and builds another house the inequality is greater, but still just. Now if another neighbour doesn't want to build a house, perhaps because he plans to move cities in a few years, he can pay rent to the first neighbour. If he continues to build houses, the inequality continues to increase but with no injustice to anyone. Eventually the rent will enable him to retire. That his greater productivity obligates him to donate his work to "society" is incomprehensible to me.
Equality of opportunity is good, equality of outcome is gross injustice.
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