150 years ago this date, a Federal army attempting to engage Confederate forces in Northern Virginia was routed at a creek called Bull Run, in Manassas, Va.
Today; the US military costs between 74% (Senate estimate) and 50% (‘liberal think tank’ giving DoD largesse a under estimate) more than in 2002 with about the same number of military personnel, 2.2M including reserves and national guard (.8M).
Chuck Spinney relating the pentagon-K street-congress puzzle palace axis to the Hall of Mirrors at Versialle, addresses the false claim that the DoD is underfunded for its amazing inflated targets which it want to address by shovelling huge sums of money at failed weapons.
The top 100 weapons are worth around $1.6T in acquisition costs and will burden the US with a bow wave of annual support costs of: $250B a year and they represent about a third of the total burdens.
And that Oklahoma congressman wants to cut military retirement and health insurance as a way to keep the unwarranted infleunce green at the expense of retired soldiers, whom they all loved when when soldiering to sell new weapons.
Most of this is for missions not needed since the end of War Two as a retired Army Colonel would say when discussing our Dads’ war.
The DoD is built to refight WW II in the most expensive manner possible, that is as Buck Mc Keon, running House Armed Services, says the US will enrich the unwarranted influence peddlers to be almost ready to execute the most unlikely contingencies like fight Midway again or invade Normandy.
“War is a racket”, Major General Smedley Butler, USMC (dec).
A Summary of the “Gang of Six Plan” (which has obama’s support) Provides major tax cuts to the wealthy and large corporations.The Gang of Six plan reduces the top marginal income tax rate for the wealthiest Americans and most profitable corporations from 35 percent to as low as 23 percent (about 34 percent lower than the top tax rates under Bush). Instead of reforming the Alternative Minimum Tax, it abolishes it altogether providing a major tax cut for the wealthiest Americans.It reduces the deficit by about $3.7 trillion over 10 years, while providing a net tax cut of $1.5 trillion that will mainly go to the wealthiest Americans and most profitable corporations. In other words, 100 percent of the deficit reduction achieved by the Gang of Six plan is through spending cuts to Medicare, Medicaid, education, child care, Head Start, LIHEAP, the environment, and other programs that the sick, the elderly, the children, and working families need.Any tax revenue that is raised by closing tax loopholes for large corporations must be used to lower tax rates. Revenue raisers cannot be used to increase spending at all. Revenue raisers can only be used to lower tax rates or reduce the deficit.Reduces the deficit on the backs of the elderly, the children, the sick, and working families.It imposes undefined spending caps to be in effect until at least 2015 that could only be raised by 67 votes in the Senate.Immediately reduces Cost of Living Adjustments for Social Security benefits.Even though Social Security recipients haven’t gotten a COLA for 2 straight years, the Gang of Six believes that the formula for calculating COLAs is too generous.Under their plan, they would ensure that seniors never get a fair COLA by shifting to the Chained-CPI which would significantly understate inflation for seniors. Under the Gang of Six plan, ten years from now the typical 75 year old will see their Social Security benefits cut by $560 a year, and the average 85 year old will see a cut of $1,000 a year.Slashes Medicare Cuts Medicare by at least $298 billion over 10 years.Holds Deficit Reduction Hostage to Cutting Social Security benefitsIf the Gang of Six deficit reduction plan receives 60 votes, it will not be sent to the House until and unless the Senate also adopts a plan to reform Social Security so that it is solvent for the next 75 years.If 60 Senators don’t vote to approve an undefined 75-year Social Security solvency bill, the deficit reduction plan dies, even if 60 Senators voted to approve it. Social Security is solvent for the next 25 years. No other government program can make that claim.
the “social security is insolvent” meme is mostly a lie. what they are saying is that if people live a lot longer than you and i will, and they don’t raise their retirement savings rate by 2%, they will have to take a per-month benefit cut in order to stretch their savings to last an extra two to six years of life expectancy. there is no “insolvent” in that at all.
or, of course, the people could be smart enough… if anyone would be honest with them about the facts… and raise their payroll tax one half of one tenth of one percent per year so the people who are going to live longer would pay for the increased expenses associated with living longer, and they could keep the same monthly replacement rate as current retirees, without raising the retirement age.
this is too simple and honest and cheap an approach to allow the people even to think about, so instead we have “Social Security is Going Broke!” hysteria, and even people who should know better assume it when they talk about solvent “for the next 25 years.”
which shows that the birthers are right. “Obama” is not an American. He is from the Black Lagoon. He and the real Obama were exchanged at birth. “Obama” shows that you can take a boy from the ghetto and send him to Harvard and teach him to walk on two legs and talk like a Banker.
Of course that wouldn’t be so bad if Bankers were not so stupid. You would think that the people who handle the money for the Economy would have enough sense to do more than read the Peterson “we’re all going to die. the Deficit is going to eat us alive!” scare stories, and at least scratch out on the back of an envelope what the numbers really mean. “Trillions and Trillions of Dollars over the Infinite Horizon” of course means nothing at all. But when the Trustees Report an ACCOUNTING deficit of 5 Trillion dollars over seventy five years, you’d think they’d at least ask “What accounting? What are the assumptions here: that we will spend the money without paying for it? Or that they would ask themselves what does 5 Trillion dollars mean to a 15 Trillion Dollar Economy rising to 30 Trillion (in constant dollars over 75 years mean?
Here is a hint for you all take the average… say 20 Trillion to make it easy and multiply it by seventy five years.. Oh! it’s 5 Trillion out of 1500 Trillion.. three tenths of a percent.
Yes, nothing for it but to cut Social Security: cut the money the workers save for their own retirement. Money that has nothing to do with “the deficit”, because it’s not even “government spending.”
Or as Obama says, Of Course Social Security has nothing to do with the deficit, but as long as we’re talking about the deficit we might as well cut Social Security. See, of course granma has nothing to do with the big bank robbery, but as long as we are talking about the big bank robbery we might as well hang gramma.
Get ready for the next big bombshell in the man-made warming debate. The world’s most sophisticated particle study laboratory—CERN in Geneva—will soon announce that more cosmic rays do, indeed, create more clouds in earth’s atmosphere. More cosmic rays mean a cooler planet. Thus, the solar source of the earth’s long, moderate 1,500-year climate cycle will finally be explained. http://canadafreepress.com/index.php/article/38627
A clue from the article? Watch the baseline used to compare!
Some key info: “What it really represents is Washington at its worst. The “plan” Obama was praising isn’t a plan at all, but a few pages of bullet points with vague concepts, promises of future cuts, and confusing, and at times contradictory, numbers. And what details it does contain show that the gang has employed some of the most egregious budget tricks available to make the spending cuts look bigger and tax hikes smaller than they actually are.”
and this: “The best example of this is the plan’s tax proposal, which alternately boasts that it cuts taxes by $1.5 trillion and raises them by $1 trillion, but which more likely will result in taxes going up by more than $3 trillion. According to the outline, the $1.5 trillion in “tax relief” is how the Congressional Budget Office would score the plan. But what the gang conveniently leaves out is that the CBO’s forecast has $4.6 trillion in tax hikes already baked into it. That’s because the CBO baseline assumes all the Bush tax cuts get repealed, that every other temporary tax cut is left to expire, and that the alternative minimum tax continues to entrap millions more middle-class families each year.”
and it concludes: “In addition, changes in spending and taxes should be measured against today’s levels, not against some baseline that assumes government gets bigger every year. Baseline budgeting gives politicians too many chances to fudge the numbers. And while deficits and debt are important, what matters most is the size of the federal government and economic growth. The bigger the government, the worse growth will be, no matter whether the budget is balanced. Since 1950, federal spending has averaged 20.8% of GDP. That should be the absolute upper limit on spending going forward, although we’d prefer it to be lower still. The fact that more and more lawmakers on both sides of the aisle are willing to sign onto the phony Gang of Six plan, and that Obama would lend it his effusive praise, is a testament to why the country is in such deep fiscal trouble.”
Until there is some detail, this is a non-starter to actually solve more than talking point problems.
I expect this will be the framework for the actual final debt ceiling bill, but the House will add some teeth to the budget cuts and tax reform areas.
Still a long way to go to get to consensus, so we can expect that the actual “short term” bill is being drafted as we speak. My hope is that it is being drafted in the House and not the Senate.
So who are the other two that have been added to the gang? I only wish there were some validity to the old expression, what goes around comes around. It did happen in China to the original members of the gang, but I wouldn’t count of the current Gang of Six (Thieves) to get theirs any time soon. The Jacobins had an interesting way of addressing imbalance in a political economy.
Peter Morici is finally talking about the possibility of an economic meltdown, long before 2020. He paints an ugly picture, one that the denialists can’t face.
America’s Permanent Deficit Problems On the Road to Armageddon by Peter Morici July 21, 2011
America’s finances are headed for a train wreck.
By August 2, the House, Senate and President must come up with a mutually agreeable deficit reduction package, or House Republicans will block the increase in the debt ceiling necessary to avoid default.
Something can still be cobbled together, likely along the lines of the Gang of Six proposal. However, it contains few hard cuts and initiates legislative processes with uncertain outcomes.
Little genuine fiscal reform will be accomplished, because the principle players won’t even acknowledge the facts.
Democrats constantly harp that the Bush tax cuts, two wars and the Bush prescription drug plan caused the $1.6 trillion 2011 deficit. Yet, in 2007, with all those factors in place, the deficit was one tenth its present size.
Since, expansions in federal regulation, bureaucracy, and new Medicaid and other entitlements have pushed up federal spending by $1.1 trillion-$900 billion more than required by inflation.
Over the next decade, the picture is even less rosy, because Treasury Secretary Geithner tells us the economy is likely only to grow at its present slow pace for many years.
The outlook is so dark the Standard and Poor’s has indicated the U.S. AAA credit rating will be downgraded unless an immediate $4 trillion deficit reduction package is accomplished now and growth oriented reforms are implemented sometime next year.
Growth at about two percent is a very serious problem. At minimum, three percent is required to accommodate productivity and labor force growth if unemployment is to be kept constant at 9 percent. Hence, Americans can expect wages to stagnate, unemployment to rise and entitlement spending to fly out of control as it did in Greece within just a few years.
Moreover, even with somewhat more robust growth, the cost of medical services and private insurance will outrun the federal government’s ability to finance Medicare, Medicaid and Veterans’ health benefits.
Liberal Democrats blame globalization for slow growth, high unemployment and falling wages, but they are absolutely opposed to managing that problem.
Globalization has been accelerated by U.S. participation in the WTO and other trade agreements. This policy is founded on the belief that increased trade, while it may impose some adjustments, will raise U.S. wages and living standards overall. However, if global competition is causing slower growth, high unemployment and falling wages, then how can free trade foster prosperty?
The answer lies in what trade agreements leave out – manipulation of exchange rates by China and others, subsidies such as those bestowed by Europe on Airbus, and export controls such as China’s severe limits on rare earth minerals essential in making the electronic components. Yet, liberal Democrats tar as protectionist anyone offering meaningful solutions to those problems.
Limits on oil and gas development in the United States and deployment of natural gas to its optimal uses are costing at least $500 billion annually in lost GDP. That’s enough to lower unemployment two or three percentage points, and increase federal revenues more than $1 trillion over ten years.
Failure to adopt reasonable energy policies is not helping the environment, because […]
Well Morici has something to recommend him.. to MG. He is long winded.
And short on critical thinking.
First thing I notice in the article is that IF the Pres can’t agree with the R’s, the R’s will refuse to raise the debt ceiling. For Morici this is an argument that the Pres must agree with the R’s. After all if someone is going to point a gun at his head and tell you to give him a million dollars or he’ll pull the trigger, you have no choice but to come up with the million dollars, right?
Next thing I notice (I skipped a lot) is that Standard and Poors is going to downgrade government bonds. Looks like the tail is going to try to wag the dog. Too bad it’s such a dishonest tail.
“Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission”
I’d suggest that the latter title is no great recommendation that the man knows the effects of global finance on this country’s economic condition. I’m sure it was very helpful to his earning consultancy fees for his economic accumen from any number of investment banks or sovereign wealth funds. As far as his professorship is concerned, Larry Summers was a big wig at Harvard. So what???
I’ll be impressed when an economist with influence comes out and clearly states, First we restore the tax rates to pre-Bush levels. Next we stop funding the wars of adventure and discontinue funding the crazier aspects of the military budget. Then knock out the various corporate tax scams like oil and gas depletion, ethanol support and farm subsidies to “farms” that don’t produce farm products for public consumption. Then lets get back to what’s left of the deficit problem. But economists don’t gain influence or fat retainers by speaking truth to power.
Midwest heat wave generates a heat index of 131° in Iowa – A unusually intense, long-lasting, and widespread heat wave with high humidities continues to plague the Central U.S. The heat index–how hot the air feels when factoring in both the temperature and the humidity–exceeded 100°F in twelve states on Monday and thirteen on Sunday, with the dangerous heat extending from Texas northwards to North Dakota, Minnesota, and Wisconsin. At least thirteen deaths are being blamed on the heat in the Midwest. The heat index hit a remarkable 131°F at Knoxville, Iowa on Monday, and a heat index in excess of 120° was recorded at numerous locations in Iowa, Minnesota, and Illinois. The extreme heat will shift slowly eastwards this week, peaking in Chicago on Wednesday, Detroit and Pittsburgh on Thursday, and New York City and the mid-Atlantic states on Friday. Temperatures near 100°F are expected in Detroit on Thursday and New York City on Friday. A heat index over 130°F, such as was observed yesterday in Iowa, is very rare in the U.S., and extremely dangerous.
“After all if someone is going to point a gun at his head and tell you to give him a million dollars or he’ll pull the trigger, you have no choice but to come up with the million dollars, right?”
What are you talking about? The President could agree to have some menaing cuts in spending, decrease the size of the government and the entire problem is solved. Your President is the one holding a gun to everybodies head.
“Unfortunately, Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility—two things that set us apart from much of the world.” Reagan Sep ‘87
Please Do The Math: Reagan inherited $908 bil. in debt growing to $2.6 tril. Up:+186%. Bush I inherited $2.6 tril. in debt growing to $4.2 tril. Up:+62%. Clinton inherited $4.2 tril. in debt growing to $5.7 tril. Up:+36%. Bush II inherited $5.7 tril. in debt growing to $10.6 tril. Up:+86%. Obama inherited $10.6 tril. in debt that is now up to $13 tril. Up: +23% (from Harold Krutz
“First we restore the tax rates to pre-Bush levels.”
Why? What does it accomplish? It’s $65 Billion a year from the top brackets at best…Big Deal!…..It likely to do more harm than any good. I remind you that there is the large portion of people knocked of the brackets that don’t pay now, and the middle class that will suffer the most with Pre-Bush Levels, especially in this economy.
“various corporate tax scams like oil and gas depletion”
These are a tax credits, it will generate no extra revenue, those corporation will change their behavior accordingly.
“Then lets get back to what’s left of the deficit problem.”
Everything you just mentioned is a drop in the bucket. Even if we appeased the Left with these things, the overwhelming majority of the problem still exists.
Darren, don’t talk numbers to Jack. I’ve tried several times to get him to add the actual $ valures to his oft repeated solutions, and it just has not sunk in.
“Obama inherited $10.6 tril. in debt that is now up to $13 tril. Up: +23%”
Yeah……In two years, compared to Eight… awesome comparison. We’ve done the Math. Reagan ended with awesome growth and employment numbers. What will Obama’s numbers look like should he win a second term.
My guess they aren’t gonna be anything remotely as attractive as any of the past Republican’s.
Heat Waves: A Climate Case Study: The U.S. is experiencing an extreme heat event this week (Masters @ WU). This heat wave is the consequence of a strong, stationary high pressure system over the central U.S., and it will move to the east over the next few days. Back on July 14th The Capital Weather Gang (WaPo) did a nice write up on the forecast of the heat wave. At the end of this blog are links to my previous blogs on heat waves and human health.
To keep the trend line you infer, the US would need to buy Euro toilet paper, keep paying the war profiteers and cut taxes more in which case I will join the tea party.
The Bush debt, 86% in 8 years less the bank bubble, is the result of tax cuts and the wars (I might add of choice but certainly wars not paid for with taxes or hardship except for the grandkids). What was expansion of M3 and private debt in those years?
Obama debt is recession, bank bubbles, the wars and tax cuts. (I think Paul has some appeal)
Darren Are you sure you’re not Sammy using another name. That may be the dumbest, or most naive, statement yet to appear on AB. Agree to which “menaing cuts in spending” not sure what menaing is supposed to mean, and just what cuts would be the right cuts. And how much cutting would be acceptable? “decrease the size of the government and the entire problem is solved.” Decrease to what size? The entire issue is the Republican intransigence over “cuts in the budget.” Nothing is enough and only the programs they dislike are to be cut. As to decreasing the size of government, maybe the place to start is in the Congress. Ten reps maximum from the big states and proportionately less in the small states. No rep if your less than one million population. States get a Senator only if they send more revenue to Washington than they get back. That should help to reduce the size of the government. Is that what you had in mind?
Darren Once again I ask you, are you really sammy by another name? No, can’t be. Even sammy knows that the Congress passes all the budget legislation and no matter what the President might recommend (and he can only recommend legislation) it is the Congress that has the responsibility to pass legislation that determines what to spend and how to spend it. The President is the implementer. When the Republicans were not in control they refused to cooperate with any legislative agenda. When they gained controlled they refused to bring forward any legislation that would be acceptable to the Senate. They have been wasting time collecting pay for a job undone.
This would also imply marginal tax rates of 70%+. So you might realize the $465 in year 1, definitely not year 2 – those people would have moved overseas or dived into tax shelters. They definitely wouldn’t be able to invest here at 70% marginal tax rates. This is not what the country needs right now.
Knowing the facts would get in the way of “getting the rich.” That’s what Jack wants. In spite of the fact that a rich guy signs his paycheck, and the fact that rich people buy his cars. Facts be damned, Jack wants to get the rich.
Peter Morici follows up again today. I disagree with his position on retirement age, but the rest of his analysis and commentary is pretty much on the mark in my judgment.
Deficit Drama Will Continue in 2012 and Beyond by Peter Morici July 21, 2011, 7:06 PM [via email] [this article will be published tomorrow; The Street has his articles]
By August 2, the Congress and President will likely come up with a patchwork plan to cut spending and increase revenue over the next ten years, the debt-ceiling will be raised, and Armageddon will be averted – but only for a brief period.
Angst will begin anew next February when the President publishes his 2013 Budget, and bond rating agencies see quite plainly the United States does not have a credible plan to bring its growing debt under control.
Budget compromises now being discussed will pare back discretionary spending-something that can’t be done very much a second time-and trim Medicare and Medicaid benefits. However, a few hundred billion a year in cuts won’t change budget fundamentals.
Health care costs are too high and Americans are living longer. The cost of health care and Social Security benefits the federal government remains committed to providing will continue to grow faster than the economy and federal revenues-even if the President gets higher taxes on millionaires.
This situation is especially compelling now that Treasury Secretary Geithner tells us economic growth is likely to be closer to its current 2 percent rate than the 4 percent assumed by President Obama in his February 2011 budget and necessary to pull down unemployment to acceptable levels within a few years.
Since 2007, the deficit has swelled from $161 billion to about $1.6 trillion. Even with a few hundred billion annually in reduced spending and some new revenues, deficits in excess of $1 trillion each year can be expected indefinitely. Those projections will compel bond rating agencies to cut the U.S. credit rating from AAA, driving up borrowing costs for the federal and state governments, home buyers and private business. More spending cuts and taxes will be required to accommodate higher interest payments, and economic growth will slow even further.
On health care, the fundamental problem is that federal and state governments pay 55 cents of every dollar spent on health care; hence, a private market for health care no longer exists, and government reimbursements set most prices for health care services.
Germany and Holland, like the United States, have systems of private insurers. In those countries, although government reimbursements account for nearly 80 percent of payments, health care costs are half of what Americans pay. For example, Germans spend $400 per capita on prescription drugs, whereas Americans pay $800.
European governments keep costs down by better regulating prices, but in the United States drug manufacturers, health insurance companies and hospitals each have enough influence with the Congress or the President to keep real reform from happening.
Solutions require significantly lower prices for drugs and many health care services, and the President’s health care law doesn’t provide for those – witness the jump in cost of drugs, health insurance premiums and the like in 2011. Now the President is boxed in by past actions to defend a policy that adds additional subsidies to a broken system and increases health care prices and the deficit.
The Republican approaches – for example, Congressman Tim Ryan’s Path to […]
Dunno, but it appears the Dems are snookered. The only bill passed to date is the republican Cut, Cap & Balance. No other bill is even rumored. The dems have punted on the budget for 800+ days, and it has caught up to them.
So at this time there are only two available alternatives visible. Pass Cut, Cap and Balance and get a debt ceiling. Or, what I really thinks is happening, is that a short term bill with cuts only will be passed. The story will be that they have reached some longer term or larger deal, and the short term bill will be passed to buy the time needed to finalize the “Big Deal.”
Don’t believe it! The short term bill will cut the budget, and the next version will also. In the mean time the House has been busily passing the appropriations bills. They will again cut the budget. If the Senate doesn’t pass the budget, then the Dems are gone in 2012.
A longer term debt ceiling bill and the budge give republicans two more bites at the budget cut apple.
Peter Morici follows up again today. I strongly disagree with his retirement age solution, but the rest of his analysis and commentary is pretty much on the mark in my judgment.
Deficit Drama Will Continue in 2012 and Beyond by Peter Morici July 21, 2011, 7:06 PM [via email] [this article will be published tomorrow; The Street publishes most of his articles]
By August 2, the Congress and President will likely come up with a patchwork plan to cut spending and increase revenue over the next ten years, the debt-ceiling will be raised, and Armageddon will be averted – but only for a brief period.
Angst will begin anew next February when the President publishes his 2013 Budget, and bond rating agencies see quite plainly the United States does not have a credible plan to bring its growing debt under control.
Budget compromises now being discussed will pare back discretionary spending-something that can’t be done very much a second time-and trim Medicare and Medicaid benefits. However, a few hundred billion a year in cuts won’t change budget fundamentals.
Health care costs are too high and Americans are living longer. The cost of health care and Social Security benefits the federal government remains committed to providing will continue to grow faster than the economy and federal revenues-even if the President gets higher taxes on millionaires.
This situation is especially compelling now that Treasury Secretary Geithner tells us economic growth is likely to be closer to its current 2 percent rate than the 4 percent assumed by President Obama in his February 2011 budget and necessary to pull down unemployment to acceptable levels within a few years.
Since 2007, the deficit has swelled from $161 billion to about $1.6 trillion. Even with a few hundred billion annually in reduced spending and some new revenues, deficits in excess of $1 trillion each year can be expected indefinitely. Those projections will compel bond rating agencies to cut the U.S. credit rating from AAA, driving up borrowing costs for the federal and state governments, home buyers and private business. More spending cuts and taxes will be required to accommodate higher interest payments, and economic growth will slow even further.
On health care, the fundamental problem is that federal and state governments pay 55 cents of every dollar spent on health care; hence, a private market for health care no longer exists, and government reimbursements set most prices for health care services.
Germany and Holland, like the United States, have systems of private insurers. In those countries, although government reimbursements account for nearly 80 percent of payments, health care costs are half of what Americans pay. For example, Germans spend $400 per capita on prescription drugs, whereas Americans pay $800.
European governments keep costs down by better regulating prices, but in the United States drug manufacturers, health insurance companies and hospitals each have enough influence with the Congress or the President to keep real reform from happening.
Solutions require significantly lower prices for drugs and many health care services, and the President’s health care law doesn’t provide for those – witness the jump in cost of drugs, health insurance premiums and the like in 2011. Now the President is boxed in by past actions to defend a policy that adds additional subsidies to a broken system and increases health care prices and the deficit.
The Republican approaches – for example, Congressman Tim Ryan’s Path to Prosperity – would replace federal Medicaid with block grants to the […]
ilsm – “Please Do The Math: Reagan inherited $908 bil. in debt growing to $2.6 tril. Up:+186%. Bush I inherited $2.6 tril. in debt growing to $4.2 tril. Up:+62%. Clinton inherited $4.2 tril. in debt growing to $5.7 tril. Up:+36%. Bush II inherited $5.7 tril. in debt growing to $10.6 tril. Up:+86%. Obama inherited $10.6 tril. in debt that is now up to $13 tril. Up: +23% (from Harold Krutz”
Do you have a link for this info?
I find it interesting that you’ve posted something that states that total federal debt under President Obama is $13 trillion. That’s off by $1.343 trillion as of June 2011. You can look it up here.
Do you still want to stick with the +23% figure for President Obama’s first 2.5 years in office?
You’re both, (reference here is to Darren and CoRev) a couple of do nothings. “Oh, its not enough so lets not do that.” “No that’s not enough either, so lets not do that.” A few billion here. A few billion there. Pretty soon we’ll be talking about real money, but it’s not enough so lets do nothing but complain about what’s not being done.
CoRev You needd someone with more cognitive content than Darren brings to the table. He’s beginning to sound like a CoRev, MG, Sammy sock puppet.
did you read the sentence that said ” is very rare.” if you are going to say “it is common”, you need to have a better argument than a flat contradiction that looks like you just didn’t understand what rgjs wrote.
as to whether it is “weather” or “climate”… well, put enough weather together and you have climate.
i don’t make any claims about whether this weather is due to climate change, but IF it keeps up, that’s what it will be.
“On Social Security, the basic problems are that Americans are living much longer and retiring long before their health requires, and the ratio of retirees to working age Americans is too high and rising.” P. Morici, above
That, especially the bolded phrase, is an incredibly selfish position for Morici to take and little more than an opinion. And I have not yet seen any basis for an economist having a valid opinion concerning aging, retirement and health. And if the geezers continue to work til they’re 70 what will that do to the availability of jobs for the young men and women approaching 60? Who is that fool addressing? What makes him think that a 65 year old is employable in today’s America? He has obviously been working too long in academic circles where one can earn a full time salary regardless of age and have the lightest work schedule of any profession in America. Morici should retire early and allow UofM to hire two younger asst profs who might be more in touch with the world around them. Talk about an Ivory Tower syndrome.
“Higher taxes would cripple U.S. international competitiveness with rising Asian economies, and individual retirement accounts risk leaving many elderly without adequate support, especially if they live past 75.” P. Morici
Yet another untested and indefensible opinion regarding the relationship between taxation and economic competitiveness. And now he warns the elderly of the dangers of relying on capital markets for their retirement planning. Who provides the funding for the position Morici holds at the Smith School of Business? Or, how much outside private consultation work is he allowed to pursue while he soils the reputation of UofM?
people don’t retire because their health gives out. unless they are slaves or horses. people retire because they want to and have saved up enough money to be able to afford it. Social Security provides the first time in history that ordinary working people can afford to retire before they are ready for the glue factory. And because they are living longer it will cost them an extra forty cents per week each year in payroll tax to pay for that longer life without having to keep working at the kinds of jobs that ordinary workers have. only Morici and Peterson think that ordinary workers should keep working until they can’t walk.
Morici is apparently one of the many economists too dumb to figure out that people are paying for their own retirement with SS.
Roberts could polish and write a good article focusing on these points that he raised:
“The US economy is in a deepening recession from which recovery is not possible, because American middle class jobs in manufacturing and professional services have been offshored and given to foreigners. US GDP, consumer purchasing power, and tax base have been handed over to China, India, and Indonesia in order that Wall Street, shareholders, and corporate CEOs can earn more.
“When the goods and services produced offshore come back into America, they arrive as imports. The trade balance worsens, the US dollar declines further in exchange value, and prices rise for Americans, whose incomes are stagnant or falling.
“This is economic destruction. It always occurs when an oligarchy seizes control of a government. The short-run profits of the powerful are maximized at the expense of the viability of the economy.
“The US economy is driven by consumer demand, but with 22.3 per cent unemployment, stagnant and declining wages and salaries, and consumer debt burdens so high that consumers cannot borrow to spend, there is nothing to drive the economy.”
The WSJ article that you cited is a good read. All the same, very few taxpayers are going to leave the USA if the Bush II era tax cuts are allowed to expire.
My position is that ALL of the Bush II era tax cuts should be allowed to expire. That would provide roughly $3.675 trillion over ten years according to data from the U.S. Treasury. No one will like it, but too bad. Thereafter, the Congress can start developing new tax code.
Moreover, I wouldn’t allow any of the additional revenue from eliminating the Bush II era tax cuts to be used for general funding purposes in the fiscal year federal budgets. I would draft legislation that would require that such revenues only be applied directly to retiring Debt Held by the Public. This would continue until such time as such debt is reduced to $5 trillion. Thereafter, such revenue could support general budget needs.
By the way, I have no problem with increasing tax revenues from the upper income earners above the pre-Bush II era tax cuts. I could support a 45% tax rate or the euivalent thereof for incomes of $500,000 or $700,000 per year. Frankly, if they want to leave the country, fine by me. Once they shift their primary residency out of country, they should never be allowed to reestablish U.S. residency and their visitation rights should be severely limited.
We will all be back at the Source, in the end. Channelling Keynes thru Lao Tzu.
Republican arsenists have “controlled” the house since Jan 11.
“There you go again,’………………(RR) the only bill passed the house only; will not get thru the senate, so it was not passed it had a positive vote amongst the anti citizen arsen Murdoch faction running the house …….”
At this point I would as soon the economy shut down.
But I tend toward the Tao, time for a bit of Wu and Wu-wei.
“living much longer and retiring long before their health requires, ” How rude for 130M working folk to have self interest!!!
SS surpluses were collected to fund tax cuts and war profits. The old folks now get to pay for them again.
You just have to take his obfiuscation a little further.
Tax cuts and wars did not increase anyones’ productivity, just inflated bubbles which the oligarchs alone rode, while the boats are all anchored to the bottom by war and tax cuts, which demand off shoring to slave labor (euphemistically called emerging economies).
Keep ’em coming, thanks for not adding any to Morici, he says more by what is not said.
Why is A.B. running a day late. Can someone tell MOI how at this tyme: 6:00am PDT there can be 53 comments if this link was posted today? What’s the use when every thing is taking/happening as fast as it is, for this newsletter to be relevent?
ILSM, (I’m sure tongue in cheedk) says: “The point is the current firemen were arsenists when they ran the place, and the arsen was for keep Dubya in office looking good!”
But when we compare, most fair minded folks would say emphatically, Yes! GWB was actually a reasonably good president. His economic policies would have resulted in a balanced budget. Before the housing bubble burst his last deficit was just $160B, and had been falling for three years.
From the below charts you can draw your own conclusions as to who was the better president for the economy. Watch the BDS now, it can still re-occur and cloud logic.
People do not pay for their own retirement under SS. It is a pay as you go system, and the only reason it has seemed to work is because of favorable demographics. Many workers paying for few retiries. Now the demographics are shifting.
Also where do you get this 40 cents thing? $0.40 * 50 (working weeks a year) = $20/yr. $20 * 50 (working from 18-68) = $1000. How is saving an extra $1000 over the course of a lifetime going to pay for increased longevity? That covers about one month.
Sure it would be nice if everyone could reitire at 65 and live comfortably to 100, or even 80, but that puts a lot of pressure on working age people to support them. People don’t realize how expensive this is because the costs have been defered by SS. Now those costs are coming due as the baby boom retires.
Is that really you. Now we’re beginning to read the same page. Combine the restoration of the earlier taxation program with responsible spending controls and the deficit will become a manageable phenomenon. Spending cuts are where the details count, but we can’t let the focus be on well or fully funded programs like Social Security. The Defense (??) bedget is first and foremost because that is where the unnecessary waste is in abundance. Wars of waste and pillage. Defense of every other country is not our responsibility, but it is a good excuse to fund the defense industry. We’re pissing away funds on so much that there is no good reason to look to the elderly and infirm to take up the slack.
C’mon HofF, your point has been asked and aswered repeatedly. That you don’t understand the Social Security program is no good reason to rehash the issue continuously. Fully funded until 2037, and that date is only an estimate generated in the midst of a serious recession. The fact is that most of the socalled baby boomers will be pushing up daisys by 2037, or near to it. And any improvement in the economy will extend that 2037 date out further yet. The arguments regarding Social Securities deficiencies are bull shit peddled by liars who don’t want to see working people with a $2.6 Trillion Trust Fund that supplements the pay as you go FICA deductions. The only real problem that the Social Security program will have is how to keep the Trust Fund assets from growing too quickly once the economy returns to a positive growth condition. They’ll probably need to increase benefits to the elderly and disabled.
“That would provide roughly $3.675 trillion over ten years according to data from the U.S. Treasury. No one will like it, but too bad.”
Fine…I don’t have problem with it. I agreed with Joe Biden when he said “everyone should have skin in the game.”
But looking at the Math……$300 Billion a year off of $1.1 Trillion dollar deficits still leaves a huge problem. And it really exposes the fact that we have a spending problem not a revenue problem.
“Between December 2008 and December 2009, the federal government added nearly 100,000 new positions.”
“On the salary side, the average annual federal salary is now just under $120,000, compared with $59,909 for the private sector, according to the Census Bureau of Economic Analysis.” “The federal work force is expanding, not contracting, thanks to Obama initiatives like a health care program that adds 16,000 new Internal Revenue Service enforcers.” http://washingtonexaminer.com/opinion/obama-pro-growth-governmentWas ObamaCare neccessary? Will it be better? Will it save money?
“the Congress passes all the budget legislation and no matter what the President might recommend (and he can only recommend legislation) it is the Congress that has the responsibility to pass legislation that determines what to spend and how to spend it.”
Yep….and Obama has threatened to veto everything that isn’t his plan. And we don’t even know what his plan is. The House passed Cut-Cap and Balance…Where is the Democrat Plan? For that matter where is a Democrat Budget….over 900 days and still waiting!
Democrats are Hypocrits!
“They have been wasting time collecting pay for a job undone.”
Democrats control the Executive branch and the Senate……..that is just a flat out childish statement on your part!
Oh I get It!……people who do not agree with you or question your ultimate wisdom have a cognative dissonance, but you only provide sound solutions and reason?
To me it looks like a bunch of know nothing whinning!
last time i looked at the numbers a 3% increase in taxes would pay down most of the “excess” deficit accrued through 2008 by about 2030. No increase in taxes at all but a return to a normal economy would pay off the 2010 deficit in four years.
now this is top of my head and subject to my not too good memory, but i’d bet it’s ball park. meanwhile you are apparently unaware of the time factor. you can’t raise taxes 300 bil a year and keep running one tril deficits forever. but if you stop running the deficits, the 300 bil will pay down the debt to a level where normal growth will handle the interest.
yeah, i don’t follow the celebrity journalists or name brand economists so i don’t always know much about who is being talked about. Now i will know that Peter Morici is a hack who hasn’t had an honest thought in his whole life.
pay as you go is the same thing as put it in the bank and take it out later. what do you think the bank does with your money while you are waiting to cash your savings?
the forty cents per week is the raise each year. you’d have to be able to at least eighth grade arithmetic to do the calculation.
it must be hard for you to have to have opinions about things you can’t understand.
oh, well, here’s how it works. 40 cents per week this year, another forty cents per week next year, and another forty cents per week… so that after 10 years you’d be paying an extra 4 dollars per week, and after 20 years, 8 dollars per week…
and meanwhile your wages are projected to go up about 8 dollars per week each year. that’s 8 dollars per week this year, another eight dollars per week next year, and another eight dollars per week… so that after ten years you’d be making 80 dollars more per week, and after 20 years, 160 more dollars per week…
now that you get the idea, class, except for poor flint there… what would be the average increase in the tax after 75 years…. lets see 75 times 40 cents equals… 30 dollars per week in the seventieth year (don’t panic class… after 75 years your real wages will have increased 8 dollars times 75 equals 600 dollars per week.. more than you are making now. and you will get that 30 dollars back when you retire,)
okay an increase of 30 dollars per week over 75 years, means an average increase of 15 dollars per week. that would be a total of 15 dollars times 52 weeks times 75 years equals 58,000 dollars… i hate to do this with Flint in the room, because the poor child thinks that 58,000 is going to come out of his pay this year. he can’t think in terms of what happens over 75 years. but if he is making 800 per week this year and will be making 600 more, or 14 hundred dollars per week in 75 years, that is an average of 1400 plus 800 divided by 2 = 1100 dollars per week. 1100 times 52 times 75 equals $4,290,000 dollars. So maybe that 58000 is not going to cripple him after all… but he really, really wanted to spend that money in Vegas. why he knows a girl there who will…
but back to the lesson, class. 58000 dollars times 100 million people equals 5.8 Trillion Dollars !
And that my friends is how you get a 5 Trillion dollar deficit scare out of a forty cents per week tax increase.
exercise for the class: how much is your payroll tax increase as a percent of your wages over that 75 years. (no peeking, but the answer in the back of the book is 1.4%
Now I need to remind you that this was all a rough calculation. The Big Guys use Present Value and it changes things a bit… but not by much.
oh, and you need to pay the higher tax because you are going to live longer. it’s always such a drag to run out of money when you are eighty because you didn’t save enough.
or you can always work at WalMart until you are eighty.
or just let them cut your Social Security check by 25%…. lets see, 25% of a thousand dollars is 250 dollars a month. sure you can live on 750 dollars a month. unless the price of cat food goes up due to increased demand.
and, just for the hell of it… 250 dollars a month times 50 millioni retirees times 12 months times 20 years is.. 3 Trillion Dollars. not exactly the 5,8 Trillion we calculated on the other side of the balance sheet, but pretty good for a ball park. the difference is, i think, that the average benefit in 75 years would be a bit higher, to reflect those rising wages, so 25% of a bigger number would be more than 250 dollars. But if you were a low earner with a basic 1000 dollar pension… you would be trying to live on 750 when the cutters and Harvard economists are done with you.
How can you assume what the economy looks like in 2030?
“No increase in taxes at all but a return to a normal economy would pay off the 2010 deficit in four years.”
ObamaCare kicks in fully 2014. We can assume a “normal” economy, whatever that means, will come shortly but where is the evidence that we are headed in that direction? If going back to Pre-Bush Tax levels is that important to the Left…then fine, but it does not solve the problem, and any change in this weak economy will have consequences. It does not mean that for a couple of years we will not see increased revenues, but there will be consequence as with any tax increase.
“but if you stop running the deficits”
Bingo! And why is it that the people who have offered a plan are being crucified by the people with no plan? Where is the Democratic Budget? Where is the Democratic Deficit reduction plan? Where is the Democratic Debt Ceiling Plan?
Where is the Democratic Leadership “Bill of Goods” we were scolded about before the election of 2008?
If raising taxes is part of a larger plan that will get the job done and both sides can agree upon then let’s move forward…it part of compromise…..but Democratics keep insisting that Tax Increases only actually works…and it clearly doesn’t, therefore NO deal on tax increases!
i don’t give a damn at this point what the dems and the R’s and the big O say. I can tell you that rescinding the Bush tax cuts and raising the Social Security tax one half of one tenth of one percent per year, and teaching the people to understand that they are going to have to pay for health care if they want it… WILL solve the budget deficits, real and imagined…. unless our Leaders start another war, or keep the present ones running for no apparent reason.
the trouble with your sides budget plans is they are dishonest. not only do they refuse to raise taxes to pay down the deficit caused by the tax cut that was going to pay for itself but didn’t. but they are trying to cut Social Security which has not a goddamn thing to do with the deficit.
Richard Miniter, a Forbes columnist, is right: “Obama is not the new FDR, but the new Gorbachev.” Beneath the tattered, fading banner of reactionary liberalism, Obama struggles to sustain a doomed system.
Democrats’ dependency agenda — swelling the ranks of government employees, multiplying government-subsidized industries, enveloping ever-more individuals in the entitlement culture — is buckling under an intractable contradiction: It is incompatible with economic growth sufficient to create enough wealth to feed the multiplying tax eaters.
Dale says: “last time i looked at the numbers a 3% increase in taxes would pay down most of the “excess” deficit accrued through 2008 by about 2030.” Here are the numbers, do the math!
2010 receipts (that’s everything including taxes) – —— $2163B 2010 outlays (that’s everything including SS checks) — $3456B 2010 ——————————————— deficit — $1293B
So Dale and jack repeat the same story without ever thinking beyond some talking points they have taken in as gospel. Since I know Dale and Jack will not do the math 3% of the total receipts is $64.89B. And Dale’s total excess deficits since 2008 is : $3563B. BTW, the deficit in 2007 was $160B if you wish to deduct that annually to calculate your “excess” deficits.
Dale also said without any corroborating numbers: “No increase in taxes at all but a return to a normal economy would pay off the 2010 deficit in four years.” Will it? Show us!
Dale closed his comment with this: “you can’t raise taxes 300 bil a year and keep running one tril deficits forever. but if you stop running the deficits, the 300 bil will pay down the debt to a level where normal growth will handle the interest.” So Dale, how obviously wrong is your thinking? How does one stop running $1,000B+/Yr deficits by increasing revenues by $65B/Yr.
This isn’t the first time we’ve had this discussion, but you and even Jack persist in regaling us with the same fantasy. And they vote?!?
You fight a good battle and your take on taxes and SS is on the mark.
With deficit reduction being the target, I believe we are forsaking the one target which needs to be pursued . . . jobs creation, good paying jobs beyond the “Texas miracle.” Any other target is little more than a race to the bottom and one which will not benefit the middle and lower income taxpayers.
SS is only fully funded if the government stops relying on raiding the SS fund and starts using general revenue to pay into the system. As it is the Feds are running chronic deficits and any cut in spending would supposedly be disasterous. The SS fund is not like putting money in the bank because banks loan that money with the expectation of repayment rather than spend it and then borrow more just to meet current expenses. Sorry Jack, there are no “trust fund assets.” Just a bunch of IOUs from a government with no specific plan on how to repay them. Borrowing from SS isn’t even considered part of the official deficit.
Coberly, I’m sorry I misread your $0.40/week proposal. Now I’m wondering where you are getting the $8/week projected anual raise. We have to be talking about constant dollars, so your projected increase must be in addition to inflation. I would have thought that you would claim that real wages have been stagnant for the last couple decades. Have the poor and midle class been getting these raises all along or just from now on? If real wages do not rise in the private sector, will the Feds step in and mandate higher wages and 95% employment?
The bottom line is that the earlier we retire the more we have pay while we are working. Raising the retirement age is inevitable if longevity continues to increase.
Preliminary results were just announced last December. No results so dramatic as a few politically conservative web sites are pushing have been announced. These sites are also pushing yet another conspiracy theory about the “truth” being suppressed. The preliminary results show some particle formation but have no quantitative estimates for the real world and no mention of what part of the atmosphere these particles would form in, a vital piece of information when considering what effect, if any, there would be on the climate. Given that the announcement of the preliminary results included the information that it would be another two to three years before more conclusive results would be available I think sammy’s link is probably full of it.
The counter point is obvious if only implied. The article is rhetorical bull shit and symbolized as such by amateur’s imitiating the reply with “Forbes eh?” There should be a required label on each issue, “Read with caution. Much of the editorial content os this magzine has been manufactured by the editors and may not bear any relationship to facts and the reality.” Sammy’s choice of reference is perfect as an example of just that ppoint, “Beneath the tattered, fading banner of reactionary liberalism, Obama struggles to sustain a doomed system.”
A doomed system? How absurd can a statement be? What system would that be? The entire US economy and related private and public institutions? That would be the same system governed by both Republican and Democratic politicians alike, both in the Congress and the Presidency. Did Obama suddenly create the “doomed system” in just two years of his Presidency? And what is “reactionary liberalism”? If the system in place has been too concerned with the health and welfare of all Americans, as is implied by the phrase “Democrats’ dependency agenda,” how then is the liberalim reactionary? Miniter and his cohorts get paid to manufacture an alternate reality. amateur’s ridicule of the representations contained therein is well justified.
Morici’s article was really lacking. In his critique of some admittedly simplistic Democratic claims about the source of the deficits he uses 2007 as his baseline for deficit increase comparisons without one referring to the recession. In fact, no where does he refer to the effects of the recession on the deficit. In addition he says that American workers will find their income stagnating in the future because of fallout from the debt problem. Where has he been? That’s already been happening for most Americans for the last decade.
Sorry flint, but your ignorance is on display with the statement, “Sorry Jack, there are no “trust fund assets.” Just a bunch of IOUs from a government with no specific plan on how to repay them. Borrowing from SS isn’t even considered part of the official deficit.”
We have two choices. One is to believe the bull shit spread by the ignorant and the deceitful, as the statement from HofF is an example. Otherrwise we can believe the summary of current legislation as detailed on the SSA site:
In the real world, which Morici chooses to ignore, older people are often the first to be fired because the are making more and their future replacements would be cheaper. Once they are unemployed it is far more difficult for them to find a job and the job will often pay far less than their previous one. They also will often have had to drain what savings they had to make ends meet while unemployed and the new job doesn’t pay enough for those savings to be replenished. The recession has driven many people who planned to work until 65 or older to file for SS early when their unemployment runs out and they still have no job prospects. Morici addresses none of these issues.
unfortunately i used to teach math to people like you who couldn’t get beyond one and one and one is three. the math is a little more complex than you think. than you can think.
Flint you are so ignorant it isn’t even any fun to try to help you.
The government borrows from the SS excess, and has to pay the money back at interest. Is in fact doing so. but your friends at the lie factory can rely on you to believe all of their lies even when they conradict themselves.
Even if your friends succeed in stealing the Trust Fund, Social Security… that is the workers… could continue to pay all promised benefits with a tax raise of about one tenth of one percent per year starting soon. this would not be a hardship or even a real injustice. The boomers would get theretirement they paid for. and the post boomers… paying the tax increase… would get their longer life expectancy paid for… with a slightly higher tax than they expected, but not higher than a fair payment for their own benefits.
and i know, you can’t understand how they can be paying for the boomers retirement and still be paying for their own benefits at the same time. because you don’t understand the first thing about money and banking.
your thoughts are so disconnected it is hard to even respond to them. but just to help you out a little, whatever the mix of inflation and real wage increase is represented by the increase in nominal wages, the fact is that benefits are paid out of the nominal wages of the time the taxes are paid… so that, for a very oversimplified example, if you paid 12% of your 100 dollar a week salary in 1960 into Social Security, and some guy in 2011 is paying 12% of his 1000 dollar a week salary, you are going to get, in dollars, about ten times as much as you paid in. Of course a lot of that is inflation, but about 2% per year of it is “real.”
and here we are. i cannot overcome ignorance even in a 20 week course that your parents pay for and you have some motivation to pass. i sure as hell can’t do it a blog of half assed comments from you and me trying to explain how the whole thing works in a one minute reply.
From this morning’s NY Times: “OSLO — The Norwegian police on Saturday charged a 32-year-old man, whom they identified as a Christian fundamentalist with right-wing connections, over the bombing of a government center here and a shooting attack on a nearby island that together left at least 92 people dead.”
Disregard the religious identification. What remains of the description of this lunatic? Right wing fundamentalist.
If SS has nothing to do with the deficit/debt ceiling, why does Obama say
“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview
CoRev What’s with the reliance on White House as a data source? I’m under the impression that you don’t trust Obama and his minions. Not to worry, neither do I. I can’t even guess at O’s motives, but he’s been pandering to right wing extremists, other than the Islamic variety, since he entered the Oval Office. I, and you just a short while ago, wouldn’t trust one data point that he might provide. Now you provide two links to White House data analysis. At least you’re consistent in your inconsistency.
The government takes in money from payroll taxes. It uses some of that money to pay current beneficiaries. The rest it spends and replaces with what they call a special issue seccurity and I call an IOU. Either way it is a promise to repay what was spent. Unfortunately the government doesn’t count this obligation as part of its deficit. These securities are not tied to any existing asset, they represent the obligation of the government to collect and pay that money out of future taxes. If you think the government will have no trouble repaying all of its obligations, then you should have confidence in the special issue securities. If you believe the government will have too much debt to repay and can’t even sustain its current course despite raiding SS, then those promises don’t look so secure. Linking to SS’s “Don’t worry, we promise.” page does nothing to reassure me.
You can continue to think everyone who is worried about SS, not to mention Medicare, is evil and ignorant. Just don’t be too surprised when the entitlement gravy train dries up regardless of which party is in power. Do you really think the Republicans want to antagonize the AARP? Why do you think the Dems give in so easily? Bush got in the last big entitlement expansion with Medicare D. Now that the bubble economy is over, it’s all down hill.
Don’t strain yourself trying to “educate” me. The lack of intelectual respect goes both ways. I came here looking for economically literate “slightly left of center” opinions. Instead its the usual reflexive, ad hominim vitriol. Labelling anyone who does not already agree with you as hopelessly ignorant doesn’t convince many people, but it sure does make one feel smug, doesn’t it?
Maybe because he is a politician with a slightly distorted agenda and wants to join with his Republican affiliates in their efforts to obfuscate the relationship between the payment of Social Security benefits from both FICA contributions (which are only available for the payment of such benefits) and Trust Fund assets (which consists of Treasury notes that the Treasury is legally required to honor with the “full faith and credit of the United States).
Why would you suppose that Obama is going to be truthful in his efforts to discuss the issue with Republicans that haven’t heard of a lie that they won’t be happy to spread? The Congress and the Executive branch know full well that the media is sufficiently cowed so that no one will be called out for the deceitulness of their proclamations or the dishonesty of their personal politics. Democracy can really suck once we’ve given the upper class the upper hand in regards to the electoral process and the news and communications media.
HOF, a minor addition to your comment. This is absolutely true during periods of excess FICA collection: “ It uses some of that money to pay current beneficiaries. The rest it spends and replaces with what they call a special issue seccurity and I call an IOU. Either way it is a promise to repay what was spent. Unfortunately the government doesn’t count this obligation as part of its deficit.” We need to add that the amount borrowed is added to the “debt” totals.
We also need to add during periods when the FICA collections are less than SS needs, the SSTF is used to make up the difference by redeeming SSTF treasuries. This difference is subtracted from accounting class “intra-governmental debt” and added to the accounting class “debt owned by the public”. That difference is also added to the total deficit.
Allow me to ask a dumb question. When an employer sends a dollar in FICA taxes to Treasury, does it not go into the SSTF as a purchase of special securities the moment it arrives? And thus, to pay checks on 3 August, don’t special securities need to be cashed-in? And if the Treasury is unable to borrow money elsewhere to pay-off the special securities, how do the checks go out? What am I missing here?
Don’t take it personally. You are making complete sense (as you are only stating the obvious). They resort to name-calling because they have lost the argument and have got nothing else.
There is another, more rational and higher probability, explanation. That is that there is legitimate reason why 99.9% of observers and both political parties are grabbing the “third rail”: Social Security and other entitlements DO contribute to the deficit/debt, and that your solutions of raising taxes on the “rich” (numbers please), or 40 cents a week or a 3% tax increase will solve the problem are ridiculous.
You can remain in the .01% and continue to rail against the “evil liars,” or you can join reality. Your choice.
Every word of your comment is a direct quote from George Will’s July 21 WaPo column. You should have made that clear to the AB readers and provided a link so that others can respond properly to your post, Will’s opinion, and the opinions of Richard Minter.
sammy was citing George Will’s 21 July WaPo column. Everything sammy posted was a direct quote from Will. And, yes, Will cited a short quote from Richard Minter and linked to Minter’s blog commentary.
It is apparent from your comment that you haven’t read Richard Minter’s recent commentary and George Will’s subsequent column piece. I recommend that you read Minter’s commentary as it is clear what he is discussing. You might also note the related posts at the bottom of Minter’s commentary.
Bear in mind that Minter closes his remarks with these opinions:
“With its traditional funding drying up and its core constituencies fading away, the Democrat Party of 2020 will look very different. It will either be smaller or much more centrist. Without federal money to spread, the Democrat Party will have to reinvent itself. It will. The world’s oldest political party knows how to survive. And it will look back at 2011 as its high point, the year before the tide ran out.”
And the substance of the article is more valid because it originates with George Will? I don’t think so. I now better understand why the material comes across as such bull shit. it originates with the master of the bull, George Will. Mr. Wills academic preparation is in the fields of propaganda dissemination. That’s why he works as a “journalist.” I put that in quotes to underscore that Will does not deal in factual news, but instead writes biased opinion pieces. His take on anything is through the distortion of the rose tinted glass.
“We also need to add during periods when the FICA collections are less than SS needs, the SSTF is used to make up the difference by redeeming SSTF treasuries. This difference is subtracted from accounting class “intra-governmental debt” and added to the accounting class “debt owned by the public”. That difference is also added to the total deficit.” CoRev
So what part of that comment validates the suggestion that the Treasury will not be able to cover all benefits due? One form of debt, the Special Treasuries, metamorphoses into another form of debt, regular Treasuries, which it was representational of from the first spent dollar of the excess FICA receipts. Calculate that transformations dollar value at any point in time and you will have the value of the insufficient taxation which the excess FICA contributions were covering up. Now it is time to pay the piper. The Bush tax holiday was weighted to the Wealthiest Americans. Now it is time for them to return the holiday cash that has contributed to the distortion of wealth distribution over the past several decades.
I did the math on the 3% tax increase right here before your eyes about a year ago. look it up.
the four years to pay off one year’s deficit… if the economy returns to normal is based on the difference in tax revenues between a recession year and a normal year.
i have done the math. you can’t do math. you get a bunch of numbers and throw them at the wall to see what sticks… sticks to your philosophy. The only bull shitter here is you.
PJR, the Chief Actuary for SS said this in an interview a week ago (parphrased): SSA send the list of authoriazed payments and from there Treasury writes ALL checks from the SSTF.
That would indicate that Treasury redeems the amont needed every month to cover SS outlays. Surplus or deficit in FICA wouldn’t matter until the SSTF is eshausted.
That is also why I called Obama a liar re: can’t guaratee SS checks on 8/3/2011.
obama is a fool or a liar. or both. but in any case your logic is faulty. Social Security can have nothing to do with the deficit… or the debt ceiling… but if the debt ceiling is reached and the law says the checks can’t go out, they won’t. that doesn’t mean that SS had anything to do with it.
to be honest, i don’t know. but most of what comes into SS has to go right back out again to pay benefits. i don’t know on a day to day basis whether more is coming in than is needed or less.
it seems to me that the money that comes in that is needed today can go right back out without ever entering the Trust Fund… but I don’t know the details of how the government handles it. I don’t think they matter… or should matter.
But here is a strange thing. If SS brings in less money than it needs and has to cash its bonds… that does NOT increase the deficit/debt, it reduces it. What the government apparently can’t do is go out and borrow the money to replace the money it has to pay BACK to SS,
On the other hand, there is some kind of law that says that SURPLUS SS funds MUST be used to buy government bonds, but that would INCREASE the debt/deficit. So if SS is surplus, the president is forced to break the law either by ignoring the deficit ceiling or by “borrowing” the money from SS.
the actual facts are simple. the convolutions of laws written by fools and gamed by fools are not.
The commentary originated with Richard Minter, not George Will.
I take it that you still haven’t bothered to read Minter’s blog commentary.
Your response to sammy was based on a lack of knowledge as to what Minter was explaining in his opinion. Your response indicated that you will talk off the top of your head without putting forth any effort to determine what the hell was really stated.
You had the opportunity to read Minter’s commentary and blew it off. Your 11:24:08 AM comment is an embarrassing mess.
There’s no way to help you if you’re intent on being bullheaded.
Jack asks: “So what part of that comment validates the suggestion that the Treasury will not be able to cover all benefits due? ” The entire comment validates that Obama lied!
The only time Treasury will not be able to cover all benefits is when FICA receipts are below demand and the SSTF is exhausted. that other alternative is when people stop buying US treasuries.
“Calculate that transformations dollar value at any point in time and you will have the value of the insufficient taxation which the excess FICA contributions were covering up. ” This is called the amount of intra-governmental debt owed to the SSTF. What’s your point?
you are a fool. my numbers are accurate. you are basing your opinion on the lies of the paid liars.
you of course would not understand that, never having had a thought of your own and having to rely on what “most people” think in order to guess at what “must be” right.
as far as I know you are kind to dogs and children. I am truly sorry I end up with “vitriol” but after a while it is truly exasperating trying to explain things to someone who is determined not to understand them.
The US government has the same assets as any corporation: its workers and its product. We are paying very low taxes at the moment and could easily raise the taxes necessary to pay down the defict… including the money owed to Social Security.
meanwhile the workers who will get the benefits can pay for them themselves by raising their own payroll tax forty cents per week each year.
Like most people Flint does not think in terms of numerical relationships, let alone strict logical (causal) connections. He free associates from one “idea” to another and comes up with nightmare images that justify to him the need to cut taxes… but everything justifies to him the need to cut taxes.
What he doesn’t understand is that the payroll tax is not a tax. it’s an insurance contribution. you get the money back. with interest. more or less deending on whether or not you have the fire.
Flint says blithely The US has no assets. He says this and the words sound like them mean something. but they don’t. it’s just a noise. this is characteristic of the “arguments” of Flint and Sammy and CoRev. They just throw out words more or less grammatically arranged and having about as much meaning as the average rock and roll lyric, or TV commercial for soap. But it “sounds like” it means something. It produces a tingle in their head. But there is not even the remotest connection to reality, or the way reality interacts with itself. And it never stops.
I respond to your questions below. First, I want to raise another related issue.
My Question: If the U.S. Government hits its total debt ceiling or debt limit, how does the Treasury issue further special issue Treasury securities to the SSA OASDI combined trust funds or any other trust funds for that matter? Inbound dedicated cash for OASDI would be recorded as a ledger entry, but without the debt ceiling headroom, how would Treasury be able to comply with the law and immediately issue more special issue Treasury securities to the SSA? It appears that Treasury must save some debt limit headroom for issuing special issue Treasury securities to the SSA for the OASDI combined trust funds. Otherwise, Treasury has to hold the cash until OASDI payouts occur (apparently that happens routinely – see below).
Your Questions:
Redeeming the nonmarketable special issue Treasury securities held in SSA OASDI combined trust funds doesn’t increase the U.S. Government’s debt limit. The action is a matter of swapping special issue Treasury securities for marketable Treasury securities with no noticeable change in the U.S. Government’s total debt.
As you know, the U.S. Government’s total debt is composed primarily of Intragovernmental Debt (trust funds, etc.) and Debt Held by the Public (marketable Treasury instruments sold on the open market).
The special issue Treasury securities provided to the SSA in exchange for SSA OASDI dedicated inbound cash revenue have already been counted against the debt ceiling, having been recorded as Intragovernmental Debt. Redeeming them for marketable Treasury securities doesn’t change the total debt of U.S. Government unless the marketable interest rates are different than for the special issues redeemed. If the marketable rates are lower, then the impact on the debt limit is reduced. If higher, then there is an increase in debt limit obligations, but that interest obligation wouldn’t occur immediately even if supported by short term marketable issues.
The SSA explains the process in two (or more) ways:
Trust Fund FAQs: (as cited by Jack, above) “Tax income is deposited on a daily basis and is invested in “special-issue” securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.”
“By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are “special issues” of the United States Treasury.”
Trust Fund Data – Investment Transactions: “The trust funds hold special issues (SI) sold only to the trust funds. These SI securities are of two types: short-term certificates of indebtedness and long-term bonds. The certificates of indebtedness are issued on a daily basis for the investment of receipts not required to meet current expenditures, and they mature on the next June 30 following the date of issue. Special-issue bonds, on the other hand, are normally acquired only when special issues of either type mature on June 30.”
I see you’re doubling down on the Bull Sh%t. I’m smarter than you cause I taught math. Your stupid because you didn’t teach math. Just because you can bring number to do math, doesn’t mean anything cause I taught math. And, because I did the math one time, I’m even smarter than you.
Oh, did I tell you I’m so much smarter than you cause I taught math?
If you find it so exhausting to respond to those who refuse to share your views, perhaps you should give it rest. You have provided very little as a substantive response anyway. In these latest posts you merely dismiss my arguments as meaningless and throw up your hands. Why bother?
I did not say the US has no assets. The US gov. has many assets, such as most of the land in Neveda. The SS Trust Fund is not backed by an asset in any real sense. It is effectively a liability. The assets of the speical issue securities are offset by the corresponding liability by the government to pay those same securities. Every dollar realized by the securities must be paid for at that time. It’s like saying my left hand owes my right hand $50, so I have a $50 asset. In addition the government owes that same money to the beneficiaries. So if we look at the government as a whole, there are two dollars of liability for every dollar of asset.
The government has already spent the trust fund and no amount of accounting shell games is going to change the fact that SS is backed by promises not dollars. You are so worried about someone stealing the fund, but you refuse to open the safe and see that it’s already gone.
Morici has discussed the impacts of the recession in many other articles.
He is using 2007 as the pre-recession federal budget deficit baseline – a reference point of comparison to future projections.
The fiscal years’ deficits problem going forward is nothing short of astonishing, projected to rise from the current of Debt Held by the Public of $9.75 trillion to $20.8 trillion in 2021 according to CBO’s analysis of the President’s budget proposal which includes elimination of Bush II era tax cuts for upper income earners. Net interest outlays are projected to exceed $800 billion in FY2021, which in my opinion is a very conservative estimate.
A major problem is U.S. trade policy. Morici writes about that issue all the time.
sammy – “There is another, more rational and higher probability, explanation. That is that there is legitimate reason why 99.9% of observers and both political parties are grabbing the “third rail”: Social Security and other entitlements DO contribute to the deficit/debt, and that your solutions of raising taxes on the “rich” (numbers please), or 40 cents a week or a 3% tax increase will solve the problem are ridiculous.
You can remain in the .01% and continue to rail against the “evil liars,” or you can join reality. Your choice.”
I am surprised at your comments.
There is no question that a net increase in the SSA OASDI combined trust funds – principal and interest or interest only – increases the total debt of the U.S. Government. In fact, the SSA OASDI combined trust funds can continue to grow, thereby increasing total federal debt, and concurrently, net OASDI cash shortfalls can occur which directly impact the fiscal year operating budgets of the U.S. Government. But the net cashflow shortfall would not further increase total federal debt as marketable Treasury securities would be issued via redeemtion of the special issue Treasury securities. That portion of the transactions would serve as a wash.
The hit would occur on the operating budgets whereby net interest payment obligations on marketable Treasury securities would increase, and such obligations would extend well into future federal budgets. This could lead to a further crowding out of discretionary spending. That, in fact, appears to be the driving issue that put the SSA OASDI programs on the budget cutting table. It’s all about saving funding for discretionary spending as pressures mount from increasing net interest payments, all sorts of mandatory spending – some of which have nothing to do with entitlement programs, and desires and needs for discretionary spending.
I disagree with you that adopting coberly’s plan wouldn’t have an impact on reducing the deficits of the fiscal years’ federal operating budget. If such changes occurred immediately, the U.S. Government would eliminate net cashflow shortfalls for the OASDI combined trust funds, thereby eliminating $355 billion in general budget outlays over the next ten years. That would help the situation with the fiscal years’ federal budgets. But, at the same time, the SSA OASDI contributions to total federal debt would increase on a net basis whereby no OASDI combined trust fund redemptions were needed for cashflow shortfalls.
I disagree with you as well on elimination of Bush II era tax cuts on upper income earners. The increased revenues would total roughly $679 billion over ten years. That’s not enough additional revenue but it helps. The problem is that the Congressional Republicans and Democrats don’t want to eliminate the Bush II era tax cuts on all other individuals and households, thereby leaving $3 trillion of additional revenue on the table.
President Obama’s FY2012 budget proposal already includes elimination of the Bush II era tax cuts for upper income earners. Yet, Debt Held by the Public rises to $20.8 trillion in 2021 according to CBO’s analysis of the President’s budget proposal. Obviously, further revenue growth and spending reductions are needed to eliminate the projected massive growth in Debt Held by the Public from the $9.75 billion level we’re at now.
While the SSA OASDI funding change only results in ten year federal budget savings of $355 billion, it does take […]
coberly – “Social Security can have nothing to do with the deficit… or the debt ceiling… but if the debt ceiling is reached and the law says the checks can’t go out, they won’t. that doesn’t mean that SS had anything to do with it.”
Are you saying that SSA OASDI net cashflow shortfalls have no impact on fiscal year federal budget deficits?
Are you saying that SSA OASDI combined trust funds have no impact on the growth of total federal debt (i.e., the federal debt ceiling)?
If these are your positions, I would like to see your supporting math or government references that support you.
The SSA OASDI combined trust funds are program assets, but certainly not assets to the U.S. Government as a whole from an accounting viewpoint. They are legal internal debt obligations, not assets.
The SSA OASDI combined trust funds are program assets held in the form of special issue Treasury securities earning interest which have always been honored in the same fashion as marketable Treasury instruments.
The securities held in the SSA OASDI combined trust funds haven’t been stolen nor has the U.S. Government refused necessary redemption of any of their marketable or special issue Treasury securities.
MG thanks your answer makes sense (“a matter of swapping special issue Treasury securities for marketable Treasury securities with no noticeable change in the U.S. Government’s total debt”) and your question is a better one than mine. It’s got to be tricky to pay off debt (writing SS checks or checks to others redeeming treasuries, for example) each day in an amount equal to or greater than FICA receipts on that day.
coberly stated 2 days ago, 9:55:30 PM – “I can tell you that rescinding the Bush tax cuts and raising the Social Security tax one half of one tenth of one percent per year, and teaching the people to understand that they are going to have to pay for health care if they want it… WILL solve the budget deficits, real and imagined…. unless our Leaders start another war, or keep the present ones running for no apparent reason.”
I agree with coberly’s solution on restoring positive SSA OASDI net cashflow, but I don’t agree with his statement about eliminating the fiscal year budgets’ deficits.
Rescinding all of the Bush II era tax cuts would provide additional revenue of $3.675 trillion over ten years according to the U.S. Treasury. CBO’s analysis of President Obama’s FY2012 budget proposal shows that over the period 2012-2021, ten years, debt held by the public would increase from its current level of $9.75 trillion to $20.8 trillion.
Rescinding the Bush II era tax cuts and making SSA OASDI net cashflow positive wouldn’t cover the projected growth in debt held by the public.
You stated to coberly – “You fight a good battle and your take on taxes and SS is on the mark.”
Coberly’s approach leaves total deficits growth of roughly $7 trillion less consideration of reduced net interest payment obligations. His taxation answer of eliminating the Bush tax cuts does not eliminate the federal budgets’ deficits over the next ten fiscal years.
I asked if you wanted to show the numbers on the taxes issues. Instead, you respond with some of your usual childlike, snot-nosed bullshit.
Coberly’s math, unfortunately, doesn’t work.
You’re clueless on the ten year federal budgets’ deficits issue based on your endorsement of coberly’s statement.
PJR, Treasury is (IIRC by law) required to have a $60B cushion of cash to cover the variability and lags in revenue receipts. On the Aug. 3rd it is expected to actually have a fraction of that cushion. Using models they are able to project cash flow needs, and p;an and redeem accordingly.
SSI checks, the largest SSA outlay, are issued on each Wed of the month. 8/3/2011 is a Wednesday. So, Treasury should have already redeemed enough SSTF special treasuries to cover next months needs.
For the math averse we now see that Treasury has borrowed in excess of $233.854 in July in excess of SS needs. But, a very big but, that does not mean that all of that $233B+ is available for Treasury outlays, since much of it was rolling over maturing treasuries already previously offered.
it’s a little hard for me to keep up with a Congress that cries about deficits and then cuts taxes and boosts spending.
my math did work. i think it would still work, but i don”t know what CBO’s assumptions are, and I do not assume O’s 2012 budget proposal.
I am dead certain that the increase in the payroll tax would solve the SS “shortfall.”
I am reasonably certain that the people ought to just pay for the Medicare they are going to want. They can afford it…. I think you left that out of your calculation… as did CBO.
meanwhile, if you want to start your math in the same place as I did… take the 3% increase and compare it to the Trustees Projections for the next 10 years… I was using the 2010 projections. Things have changed…. that ought not to have changed.
After doing that, look at the difference between tax collections now and before the recession. If the recession ends and tax collections return to normal and no increase in made in the budget, the increased tax collections will pay for one year’s deficit in about four years.
Then if the math still doesn’t work for you we can talk about details. But if we are working on different assumtions we are just arm waving and blowing hot air.
That actually had it’s origings in some MG gratuitous insults. So try to find some better manners yourself, and leave us to work out our own salvation.
there is no way to help you if you continue to be bullheaded. of course you don’t recognize when you are being bullheaded because you know everything and if we would only read everything you read then we would just naturally have to agree with you.
but there is nothing in any of your past posts that shows much judgement about what you read, or if you even understand it.
thank you. I think the first several paragraphs agrees pretty much with what i said/thought. it is not clear to me that you notice the difference between saying “tax income is invested on a daily basis..”
and
“certificates are issued …for the investment of receipts not required to meet current expenditures.”
In the rest of your comment I got lost trying to keep track of just which money was counted as SS and which was general revenues and expenditures. the thing about math averse is that the numbers don’t mean a damn thing until you know what you are counting.
I think I agree with most of what you say here. but you must understand that PAYING BACK THE MONEY YOU ALREADY BORROWED is not “increaseing the deficit” even if you have to borrow to pay back the money you already borrowed. Failure to be clear, or honest, about this is the source of much of the … well, confusion, about the deficit and SS.
Also I must emphasize: elimination of ALL the Bush tax cuts. Not just elimination of tax cuts on upper income earners. That tax the other guy bullshit has got to stop.
And no, we can’t keep spending more than we are taking in. The problem is the tax cutters don’twant to take in any more, and the programs they want to cut are the programs that pay for themselves. There is deep dishonesty going on here.
social security is self funded. it has nothing to do with the budget deficits… except by virtue of having lent money to the government.
you cannot claim with any honesty that paying back the money you borrowed is a case of the guy you borrowed it from increasing your deficit… even if you have to borrow from someone else to pay your debt to the first guy.
no math or references are required. only simple honesty.
and the growth of total federal debt is NOT a case of SS affecting the “debt ceiling.” The debt ceiling is a purely political “fact.” SS is not contributing to that fact. The R’s are using the debt ceiling as a way to blackmail O into cutting SS. And he is falling for it.
the trust fund is backed by “the full faith and credit of the United States”. that used to be counted as an asset. The Trust Fund is indeed a liability to the government. Where you go wrong is that you want to walk away from that liability and blame SS for “causing” it. SS collected the money for the benefits, lent the excess to the government, and now needs to be paid back. That is pretty simple, but your firends in Washington are saying “we can’t possibly pay that mean old SS back so we need to cut granny’s retirement below subsistence levels.”
but it is NOT like saying your right hand owes your left hand. SS is the workers money. When you overpay your income tax, the IRS sends you a refund. It does not say its left hand is paying its right hand so we’ll have to reduce our deficit by not paying tax refunds.
What do you think a dollar is? It’s a promise.
If you go to the bank and demand to see your money, and they open the safe, you will see that it is already gone. That’s why I say you don’t know anything about money and banking.
“The SS Trust Fund is not backed by an asset in any real sense.” Flint
If that is true then so too would it be true for all Treasury notes held by the public (individuals and institutions) and foreign governments. The assets of the Trust Fund are the Treasury Notes that are representative of the debt owed by the Treasury of the USofA to the Trust Fund just as Treasury notes held by the public and foreign governments are representative of debt. This is not different from any other form of debt security, what we generally refer to as bonds, issued by corporations and municipalities. The biggest difference is that the US Treasury has always been regarded as the most reliable of all debtors. That the current Congress and the President are trying to distort that historical regard is an appalling affront to the sanctity of the “full faith and credit” character of US debt. A pox on all their houses.
150 years ago this date, a Federal army attempting to engage Confederate forces in Northern Virginia was routed at a creek called Bull Run, in Manassas, Va.
Today; the US military costs between 74% (Senate estimate) and 50% (‘liberal think tank’ giving DoD largesse a under estimate) more than in 2002 with about the same number of military personnel, 2.2M including reserves and national guard (.8M).
Check this out: http://battleland.blogs.time.com/2011/07/19/the-defense-death-spiral/
Chuck Spinney relating the pentagon-K street-congress puzzle palace axis to the Hall of Mirrors at Versialle, addresses the false claim that the DoD is underfunded for its amazing inflated targets which it want to address by shovelling huge sums of money at failed weapons.
The top 100 weapons are worth around $1.6T in acquisition costs and will burden the US with a bow wave of annual support costs of: $250B a year and they represent about a third of the total burdens.
And that Oklahoma congressman wants to cut military retirement and health insurance as a way to keep the unwarranted infleunce green at the expense of retired soldiers, whom they all loved when when soldiering to sell new weapons.
Most of this is for missions not needed since the end of War Two as a retired Army Colonel would say when discussing our Dads’ war.
The DoD is built to refight WW II in the most expensive manner possible, that is as Buck Mc Keon, running House Armed Services, says the US will enrich the unwarranted influence peddlers to be almost ready to execute the most unlikely contingencies like fight Midway again or invade Normandy.
“War is a racket”, Major General Smedley Butler, USMC (dec).
A Summary of the “Gang of Six Plan” (which has obama’s support)
Provides major tax cuts to the wealthy and large corporations.The Gang of Six plan reduces the top marginal income tax rate for the wealthiest Americans and most profitable corporations from 35 percent to as low as 23 percent (about 34 percent lower than the top tax rates under Bush). Instead of reforming the Alternative Minimum Tax, it abolishes it altogether providing a major tax cut for the wealthiest Americans.It reduces the deficit by about $3.7 trillion over 10 years, while providing a net tax cut of $1.5 trillion that will mainly go to the wealthiest Americans and most profitable corporations. In other words, 100 percent of the deficit reduction achieved by the Gang of Six plan is through spending cuts to Medicare, Medicaid, education, child care, Head Start, LIHEAP, the environment, and other programs that the sick, the elderly, the children, and working families need.Any tax revenue that is raised by closing tax loopholes for large corporations must be used to lower tax rates. Revenue raisers cannot be used to increase spending at all. Revenue raisers can only be used to lower tax rates or reduce the deficit.Reduces the deficit on the backs of the elderly, the children, the sick, and working families.It imposes undefined spending caps to be in effect until at least 2015 that could only be raised by 67 votes in the Senate.Immediately reduces Cost of Living Adjustments for Social Security benefits.Even though Social Security recipients haven’t gotten a COLA for 2 straight years, the Gang of Six believes that the formula for calculating COLAs is too generous.Under their plan, they would ensure that seniors never get a fair COLA by shifting to the Chained-CPI which would significantly understate inflation for seniors. Under the Gang of Six plan, ten years from now the typical 75 year old will see their Social Security benefits cut by $560 a year, and the average 85 year old will see a cut of $1,000 a year.Slashes Medicare Cuts Medicare by at least $298 billion over 10 years.Holds Deficit Reduction Hostage to Cutting Social Security benefitsIf the Gang of Six deficit reduction plan receives 60 votes, it will not be sent to the House until and unless the Senate also adopts a plan to reform Social Security so that it is solvent for the next 75 years.If 60 Senators don’t vote to approve an undefined 75-year Social Security solvency bill, the deficit reduction plan dies, even if 60 Senators voted to approve it. Social Security is solvent for the next 25 years. No other government program can make that claim.
rjs
social security is solvent forever.
the “social security is insolvent” meme is mostly a lie. what they are saying is that if people live a lot longer than you and i will, and they don’t raise their retirement savings rate by 2%, they will have to take a per-month benefit cut in order to stretch their savings to last an extra two to six years of life expectancy. there is no “insolvent” in that at all.
or, of course, the people could be smart enough… if anyone would be honest with them about the facts… and raise their payroll tax one half of one tenth of one percent per year so the people who are going to live longer would pay for the increased expenses associated with living longer, and they could keep the same monthly replacement rate as current retirees, without raising the retirement age.
this is too simple and honest and cheap an approach to allow the people even to think about, so instead we have “Social Security is Going Broke!” hysteria, and even people who should know better assume it when they talk about solvent “for the next 25 years.”
rjs
and “the gang of six has Obama’s support.”
which shows that the birthers are right. “Obama” is not an American. He is from the Black Lagoon. He and the real Obama were exchanged at birth. “Obama” shows that you can take a boy from the ghetto and send him to Harvard and teach him to walk on two legs and talk like a Banker.
Of course that wouldn’t be so bad if Bankers were not so stupid. You would think that the people who handle the money for the Economy would have enough sense to do more than read the Peterson “we’re all going to die. the Deficit is going to eat us alive!” scare stories, and at least scratch out on the back of an envelope what the numbers really mean. “Trillions and Trillions of Dollars over the Infinite Horizon” of course means nothing at all. But when the Trustees Report an ACCOUNTING deficit of 5 Trillion dollars over seventy five years, you’d think they’d at least ask “What accounting? What are the assumptions here: that we will spend the money without paying for it? Or that they would ask themselves what does 5 Trillion dollars mean to a 15 Trillion Dollar Economy rising to 30 Trillion (in constant dollars over 75 years mean?
Here is a hint for you all take the average… say 20 Trillion to make it easy and multiply it by seventy five years.. Oh! it’s 5 Trillion out of 1500 Trillion.. three tenths of a percent.
Yes, nothing for it but to cut Social Security: cut the money the workers save for their own retirement. Money that has nothing to do with “the deficit”, because it’s not even “government spending.”
Or as Obama says, Of Course Social Security has nothing to do with the deficit, but as long as we’re talking about the deficit we might as well cut Social Security. See, of course granma has nothing to do with the big bank robbery, but as long as we are talking about the big bank robbery we might as well hang gramma.
See what you can do with a Harvard education.
Speaking of the stupidity of people:
This Week in Global Warming
Get ready for the next big bombshell in the man-made warming debate. The world’s most sophisticated particle study laboratory—CERN in Geneva—will soon announce that more cosmic rays do, indeed, create more clouds in earth’s atmosphere. More cosmic rays mean a cooler planet. Thus, the solar source of the earth’s long, moderate 1,500-year climate cycle will finally be explained.
http://canadafreepress.com/index.php/article/38627
coberly, i was just quoting the article i linked to, which i believe originated with bernie sanders staff…i wasnt vouching for everything in it…
Here’s another summary of the Gang of 6 proposal from IBD: http://www.investors.com/NewsAndAnalysis/Article/578924/201107201854/Gang-Of-Six-Plan-DC-At-Its-Worst.htm
A clue from the article? Watch the baseline used to compare!
Some key info:
“What it really represents is Washington at its worst.
The “plan” Obama was praising isn’t a plan at all, but a few pages of bullet points with vague concepts, promises of future cuts, and confusing, and at times contradictory, numbers.
And what details it does contain show that the gang has employed some of the most egregious budget tricks available to make the spending cuts look bigger and tax hikes smaller than they actually are.”
and this:
“The best example of this is the plan’s tax proposal, which alternately boasts that it cuts taxes by $1.5 trillion and raises them by $1 trillion, but which more likely will result in taxes going up by more than $3 trillion.
According to the outline, the $1.5 trillion in “tax relief” is how the Congressional Budget Office would score the plan.
But what the gang conveniently leaves out is that the CBO’s forecast has $4.6 trillion in tax hikes already baked into it. That’s because the CBO baseline assumes all the Bush tax cuts get repealed, that every other temporary tax cut is left to expire, and that the alternative minimum tax continues to entrap millions more middle-class families each year.”
and it concludes:
“In addition, changes in spending and taxes should be measured against today’s levels, not against some baseline that assumes government gets bigger every year. Baseline budgeting gives politicians too many chances to fudge the numbers.
And while deficits and debt are important, what matters most is the size of the federal government and economic growth.
The bigger the government, the worse growth will be, no matter whether the budget is balanced. Since 1950, federal spending has averaged 20.8% of GDP. That should be the absolute upper limit on spending going forward, although we’d prefer it to be lower still.
The fact that more and more lawmakers on both sides of the aisle are willing to sign onto the phony Gang of Six plan, and that Obama would lend it his effusive praise, is a testament to why the country is in such deep fiscal trouble.”
Until there is some detail, this is a non-starter to actually solve more than talking point problems.
I expect this will be the framework for the actual final debt ceiling bill, but the House will add some teeth to the budget cuts and tax reform areas.
Still a long way to go to get to consensus, so we can expect that the actual “short term” bill is being drafted as we speak. My hope is that it is being drafted in the House and not the Senate.
The original Gang of Four:
So who are the other two that have been added to the gang? I only wish there were some validity to the old expression, what goes around comes around. It did happen in China to the original members of the gang, but I wouldn’t count of the current Gang of Six (Thieves) to get theirs any time soon. The Jacobins had an interesting way of addressing imbalance in a political economy.
The original Gang of Four
Here is the actual summary from the Senate Gang of Six released this week.
A BIPARTISAN PLAN TO REDUCE OUR NATION’S DEFICITS
http://thehill.com/images/stories/gangofsix_plan.pdf
This is the source document. People should consider reading it first.
Peter Morici is finally talking about the possibility of an economic meltdown, long before 2020. He paints an ugly picture, one that the denialists can’t face.
America’s Permanent Deficit Problems
On the Road to Armageddon
by Peter Morici
July 21, 2011
America’s finances are headed for a train wreck.
By August 2, the House, Senate and President must come up with a mutually agreeable deficit reduction package, or House Republicans will block the increase in the debt ceiling necessary to avoid default.
Something can still be cobbled together, likely along the lines of the Gang of Six proposal. However, it contains few hard cuts and initiates legislative processes with uncertain outcomes.
Little genuine fiscal reform will be accomplished, because the principle players won’t even acknowledge the facts.
Democrats constantly harp that the Bush tax cuts, two wars and the Bush prescription drug plan caused the $1.6 trillion 2011 deficit. Yet, in 2007, with all those factors in place, the deficit was one tenth its present size.
Since, expansions in federal regulation, bureaucracy, and new Medicaid and other entitlements have pushed up federal spending by $1.1 trillion-$900 billion more than required by inflation.
Over the next decade, the picture is even less rosy, because Treasury Secretary Geithner tells us the economy is likely only to grow at its present slow pace for many years.
The outlook is so dark the Standard and Poor’s has indicated the U.S. AAA credit rating will be downgraded unless an immediate $4 trillion deficit reduction package is accomplished now and growth oriented reforms are implemented sometime next year.
Growth at about two percent is a very serious problem. At minimum, three percent is required to accommodate productivity and labor force growth if unemployment is to be kept constant at 9 percent. Hence, Americans can expect wages to stagnate, unemployment to rise and entitlement spending to fly out of control as it did in Greece within just a few years.
Moreover, even with somewhat more robust growth, the cost of medical services and private insurance will outrun the federal government’s ability to finance Medicare, Medicaid and Veterans’ health benefits.
Liberal Democrats blame globalization for slow growth, high unemployment and falling wages, but they are absolutely opposed to managing that problem.
Globalization has been accelerated by U.S. participation in the WTO and other trade agreements. This policy is founded on the belief that increased trade, while it may impose some adjustments, will raise U.S. wages and living standards overall. However, if global competition is causing slower growth, high unemployment and falling wages, then how can free trade foster prosperty?
The answer lies in what trade agreements leave out – manipulation of exchange rates by China and others, subsidies such as those bestowed by Europe on Airbus, and export controls such as China’s severe limits on rare earth minerals essential in making the electronic components. Yet, liberal Democrats tar as protectionist anyone offering meaningful solutions to those problems.
Limits on oil and gas development in the United States and deployment of natural gas to its optimal uses are costing at least $500 billion annually in lost GDP. That’s enough to lower unemployment two or three percentage points, and increase federal revenues more than $1 trillion over ten years.
Failure to adopt reasonable energy policies is not helping the environment, because […]
That’s amusing. During her trail Jiang Qing said, “I was Mao’s dog, when he said bite I bit.” Whose dog is Dick Durbin?
Of course after decades of marriage to Mao you might feel like a dog just like Jiang.
rjs
i wasn’t accusing you of vouching for anything it it. i was making some points about SS as is my wont.
Well
Morici has something to recommend him.. to MG. He is long winded.
And short on critical thinking.
First thing I notice in the article is that IF the Pres can’t agree with the R’s, the R’s will refuse to raise the debt ceiling. For Morici this is an argument that the Pres must agree with the R’s. After all if someone is going to point a gun at his head and tell you to give him a million dollars or he’ll pull the trigger, you have no choice but to come up with the million dollars, right?
Next thing I notice (I skipped a lot) is that Standard and Poors is going to downgrade government bonds. Looks like the tail is going to try to wag the dog. Too bad it’s such a dishonest tail.
MG must stand for More Garbage.
“Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission”
I’d suggest that the latter title is no great recommendation that the man knows the effects of global finance on this country’s economic condition. I’m sure it was very helpful to his earning consultancy fees for his economic accumen from any number of investment banks or sovereign wealth funds. As far as his professorship is concerned, Larry Summers was a big wig at Harvard. So what???
I’ll be impressed when an economist with influence comes out and clearly states, First we restore the tax rates to pre-Bush levels. Next we stop funding the wars of adventure and discontinue funding the crazier aspects of the military budget. Then knock out the various corporate tax scams like oil and gas depletion, ethanol support and farm subsidies to “farms” that don’t produce farm products for public consumption. Then lets get back to what’s left of the deficit problem. But economists don’t gain influence or fat retainers by speaking truth to power.
when does cooler start?
Midwest heat wave generates a heat index of 131° in Iowa – A unusually intense, long-lasting, and widespread heat wave with high humidities continues to plague the Central U.S. The heat index–how hot the air feels when factoring in both the temperature and the humidity–exceeded 100°F in twelve states on Monday and thirteen on Sunday, with the dangerous heat extending from Texas northwards to North Dakota, Minnesota, and Wisconsin. At least thirteen deaths are being blamed on the heat in the Midwest. The heat index hit a remarkable 131°F at Knoxville, Iowa on Monday, and a heat index in excess of 120° was recorded at numerous locations in Iowa, Minnesota, and Illinois. The extreme heat will shift slowly eastwards this week, peaking in Chicago on Wednesday, Detroit and Pittsburgh on Thursday, and New York City and the mid-Atlantic states on Friday. Temperatures near 100°F are expected in Detroit on Thursday and New York City on Friday. A heat index over 130°F, such as was observed yesterday in Iowa, is very rare in the U.S., and extremely dangerous.
rjs,
It’s Summer….this is nothing unsual. It has happend every Summer. Besides, your refering to weather, and Sammy is referencing Planetary Cycles.
Coberly,
“After all if someone is going to point a gun at his head and tell you to give him a million dollars or he’ll pull the trigger, you have no choice but to come up with the million dollars, right?”
What are you talking about? The President could agree to have some menaing cuts in spending, decrease the size of the government and the entire problem is solved. Your President is the one holding a gun to everybodies head.
“Unfortunately, Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility—two things that set us apart from much of the world.” Reagan Sep ‘87
Please Do The Math: Reagan inherited $908 bil. in debt growing to $2.6 tril. Up:+186%. Bush I inherited $2.6 tril. in debt growing to $4.2 tril. Up:+62%. Clinton inherited $4.2 tril. in debt growing to $5.7 tril. Up:+36%. Bush II inherited $5.7 tril. in debt growing to $10.6 tril. Up:+86%. Obama inherited $10.6 tril. in debt that is now up to $13 tril. Up: +23% (from Harold Krutz
A few surface open to the atmosphere nuke detonated to create soot plumes and we could get partial nuclear winter.
It may further reduce the need for soylent green cook books.
I wonder if the AGW schools have a ‘model’ for that???
AQ could do the deed for them.
Jack,
“First we restore the tax rates to pre-Bush levels.”
Why? What does it accomplish? It’s $65 Billion a year from the top brackets at best…Big Deal!…..It likely to do more harm than any good. I remind you that there is the large portion of people knocked of the brackets that don’t pay now, and the middle class that will suffer the most with Pre-Bush Levels, especially in this economy.
“various corporate tax scams like oil and gas depletion”
These are a tax credits, it will generate no extra revenue, those corporation will change their behavior accordingly.
“Then lets get back to what’s left of the deficit problem.”
Everything you just mentioned is a drop in the bucket. Even if we appeased the Left with these things, the overwhelming majority of the problem still exists.
Darren, don’t talk numbers to Jack. I’ve tried several times to get him to add the actual $ valures to his oft repeated solutions, and it just has not sunk in.
Islm,
“Obama inherited $10.6 tril. in debt that is now up to $13 tril. Up: +23%”
Yeah……In two years, compared to Eight… awesome comparison. We’ve done the Math. Reagan ended with awesome growth and employment numbers. What will Obama’s numbers look like should he win a second term.
My guess they aren’t gonna be anything remotely as attractive as any of the past Republican’s.
Actually several places in the Southern Hemi are having rough snowy winters. Time will tell.
Heat Waves: A Climate Case Study: The U.S. is experiencing an extreme heat event this week (Masters @ WU). This heat wave is the consequence of a strong, stationary high pressure system over the central U.S., and it will move to the east over the next few days. Back on July 14th The Capital Weather Gang (WaPo) did a nice write up on the forecast of the heat wave. At the end of this blog are links to my previous blogs on heat waves and human health.
Open thread?
Darren,
To keep the trend line you infer, the US would need to buy Euro toilet paper, keep paying the war profiteers and cut taxes more in which case I will join the tea party.
I may go for Paul in any event.
CoRev,
Dispute this:
The Bush debt, 86% in 8 years less the bank bubble, is the result of tax cuts and the wars (I might add of choice but certainly wars not paid for with taxes or hardship except for the grandkids). What was expansion of M3 and private debt in those years?
Obama debt is recession, bank bubbles, the wars and tax cuts. (I think Paul has some appeal)
Darren you can help CoRev.
Darren
Are you sure you’re not Sammy using another name. That may be the dumbest, or most naive, statement yet to appear on AB. Agree to which “menaing cuts in spending” not sure what menaing is supposed to mean, and just what cuts would be the right cuts. And how much cutting would be acceptable? “decrease the size of the government and the entire problem is solved.” Decrease to what size? The entire issue is the Republican intransigence over “cuts in the budget.” Nothing is enough and only the programs they dislike are to be cut. As to decreasing the size of government, maybe the place to start is in the Congress. Ten reps maximum from the big states and proportionately less in the small states. No rep if your less than one million population. States get a Senator only if they send more revenue to Washington than they get back. That should help to reduce the size of the government. Is that what you had in mind?
Darren
Once again I ask you, are you really sammy by another name? No, can’t be. Even sammy knows that the Congress passes all the budget legislation and no matter what the President might recommend (and he can only recommend legislation) it is the Congress that has the responsibility to pass legislation that determines what to spend and how to spend it. The President is the implementer. When the Republicans were not in control they refused to cooperate with any legislative agenda. When they gained controlled they refused to bring forward any legislation that would be acceptable to the Senate. They have been wasting time collecting pay for a job undone.
CoRev/Darren,
There is a reason that Jack won’t do the numbers. They are easy to do, just start here: http://ntu.org/tax-basics/who-pays-income-taxes.html
It’s because if he does the numbers, he will realize that his “plan” won’t work. If you took fully half if the income of the top 1% of tax payers (>$380K per year), this would realize $465 B. http://online.wsj.com/article/SB10001424052748704621304576267113524583554.html
This would also imply marginal tax rates of 70%+. So you might realize the $465 in year 1, definitely not year 2 – those people would have moved overseas or dived into tax shelters. They definitely wouldn’t be able to invest here at 70% marginal tax rates. This is not what the country needs right now.
Knowing the facts would get in the way of “getting the rich.” That’s what Jack wants. In spite of the fact that a rich guy signs his paycheck, and the fact that rich people buy his cars. Facts be damned, Jack wants to get the rich.
Peter Morici follows up again today. I disagree with his position on retirement age, but the rest of his analysis and commentary is pretty much on the mark in my judgment.
Deficit Drama Will Continue in 2012 and Beyond
by Peter Morici
July 21, 2011, 7:06 PM [via email]
[this article will be published tomorrow; The Street has his articles]
By August 2, the Congress and President will likely come up with a patchwork plan to cut spending and increase revenue over the next ten years, the debt-ceiling will be raised, and Armageddon will be averted – but only for a brief period.
Angst will begin anew next February when the President publishes his 2013 Budget, and bond rating agencies see quite plainly the United States does not have a credible plan to bring its growing debt under control.
Budget compromises now being discussed will pare back discretionary spending-something that can’t be done very much a second time-and trim Medicare and Medicaid benefits. However, a few hundred billion a year in cuts won’t change budget fundamentals.
Health care costs are too high and Americans are living longer. The cost of health care and Social Security benefits the federal government remains committed to providing will continue to grow faster than the economy and federal revenues-even if the President gets higher taxes on millionaires.
This situation is especially compelling now that Treasury Secretary Geithner tells us economic growth is likely to be closer to its current 2 percent rate than the 4 percent assumed by President Obama in his February 2011 budget and necessary to pull down unemployment to acceptable levels within a few years.
Since 2007, the deficit has swelled from $161 billion to about $1.6 trillion. Even with a few hundred billion annually in reduced spending and some new revenues, deficits in excess of $1 trillion each year can be expected indefinitely. Those projections will compel bond rating agencies to cut the U.S. credit rating from AAA, driving up borrowing costs for the federal and state governments, home buyers and private business. More spending cuts and taxes will be required to accommodate higher interest payments, and economic growth will slow even further.
On health care, the fundamental problem is that federal and state governments pay 55 cents of every dollar spent on health care; hence, a private market for health care no longer exists, and government reimbursements set most prices for health care services.
Germany and Holland, like the United States, have systems of private insurers. In those countries, although government reimbursements account for nearly 80 percent of payments, health care costs are half of what Americans pay. For example, Germans spend $400 per capita on prescription drugs, whereas Americans pay $800.
European governments keep costs down by better regulating prices, but in the United States drug manufacturers, health insurance companies and hospitals each have enough influence with the Congress or the President to keep real reform from happening.
Solutions require significantly lower prices for drugs and many health care services, and the President’s health care law doesn’t provide for those – witness the jump in cost of drugs, health insurance premiums and the like in 2011. Now the President is boxed in by past actions to defend a policy that adds additional subsidies to a broken system and increases health care prices and the deficit.
The Republican approaches – for example, Congressman Tim Ryan’s Path to […]
Dunno, but it appears the Dems are snookered. The only bill passed to date is the republican Cut, Cap & Balance. No other bill is even rumored. The dems have punted on the budget for 800+ days, and it has caught up to them.
So at this time there are only two available alternatives visible. Pass Cut, Cap and Balance and get a debt ceiling. Or, what I really thinks is happening, is that a short term bill with cuts only will be passed. The story will be that they have reached some longer term or larger deal, and the short term bill will be passed to buy the time needed to finalize the “Big Deal.”
Don’t believe it! The short term bill will cut the budget, and the next version will also. In the mean time the House has been busily passing the appropriations bills. They will again cut the budget. If the Senate doesn’t pass the budget, then the Dems are gone in 2012.
A longer term debt ceiling bill and the budge give republicans two more bites at the budget cut apple.
Peter Morici follows up again today. I strongly disagree with his retirement age solution, but the rest of his analysis and commentary is pretty much on the mark in my judgment.
Deficit Drama Will Continue in 2012 and Beyond
by Peter Morici
July 21, 2011, 7:06 PM [via email]
[this article will be published tomorrow; The Street publishes most of his articles]
By August 2, the Congress and President will likely come up with a patchwork plan to cut spending and increase revenue over the next ten years, the debt-ceiling will be raised, and Armageddon will be averted – but only for a brief period.
Angst will begin anew next February when the President publishes his 2013 Budget, and bond rating agencies see quite plainly the United States does not have a credible plan to bring its growing debt under control.
Budget compromises now being discussed will pare back discretionary spending-something that can’t be done very much a second time-and trim Medicare and Medicaid benefits. However, a few hundred billion a year in cuts won’t change budget fundamentals.
Health care costs are too high and Americans are living longer. The cost of health care and Social Security benefits the federal government remains committed to providing will continue to grow faster than the economy and federal revenues-even if the President gets higher taxes on millionaires.
This situation is especially compelling now that Treasury Secretary Geithner tells us economic growth is likely to be closer to its current 2 percent rate than the 4 percent assumed by President Obama in his February 2011 budget and necessary to pull down unemployment to acceptable levels within a few years.
Since 2007, the deficit has swelled from $161 billion to about $1.6 trillion. Even with a few hundred billion annually in reduced spending and some new revenues, deficits in excess of $1 trillion each year can be expected indefinitely. Those projections will compel bond rating agencies to cut the U.S. credit rating from AAA, driving up borrowing costs for the federal and state governments, home buyers and private business. More spending cuts and taxes will be required to accommodate higher interest payments, and economic growth will slow even further.
On health care, the fundamental problem is that federal and state governments pay 55 cents of every dollar spent on health care; hence, a private market for health care no longer exists, and government reimbursements set most prices for health care services.
Germany and Holland, like the United States, have systems of private insurers. In those countries, although government reimbursements account for nearly 80 percent of payments, health care costs are half of what Americans pay. For example, Germans spend $400 per capita on prescription drugs, whereas Americans pay $800.
European governments keep costs down by better regulating prices, but in the United States drug manufacturers, health insurance companies and hospitals each have enough influence with the Congress or the President to keep real reform from happening.
Solutions require significantly lower prices for drugs and many health care services, and the President’s health care law doesn’t provide for those – witness the jump in cost of drugs, health insurance premiums and the like in 2011. Now the President is boxed in by past actions to defend a policy that adds additional subsidies to a broken system and increases health care prices and the deficit.
The Republican approaches – for example, Congressman Tim Ryan’s Path to Prosperity – would replace federal Medicaid with block grants to the […]
Jack, the link for Roberts’ article is http://counterpunch.org/roberts07222011.html .
Jack, the link for Roberts’ article is http://counterpunch.org/roberts07222011.html .
Roberts’ article may get shuffled from the main page. If you fix your post (repost it), I’ll delete my comment.
ilsm – “Please Do The Math: Reagan inherited $908 bil. in debt growing to $2.6 tril. Up:+186%. Bush I inherited $2.6 tril. in debt growing to $4.2 tril. Up:+62%. Clinton inherited $4.2 tril. in debt growing to $5.7 tril. Up:+36%. Bush II inherited $5.7 tril. in debt growing to $10.6 tril. Up:+86%. Obama inherited $10.6 tril. in debt that is now up to $13 tril. Up: +23% (from Harold Krutz”
Do you have a link for this info?
I find it interesting that you’ve posted something that states that total federal debt under President Obama is $13 trillion. That’s off by $1.343 trillion as of June 2011. You can look it up here.
Do you still want to stick with the +23% figure for President Obama’s first 2.5 years in office?
You’re both, (reference here is to Darren and CoRev) a couple of do nothings. “Oh, its not enough so lets not do that.” “No that’s not enough either, so lets not do that.” A few billion here. A few billion there. Pretty soon we’ll be talking about real money, but it’s not enough so lets do nothing but complain about what’s not being done.
CoRev
You needd someone with more cognitive content than Darren brings to the table. He’s beginning to sound like a CoRev, MG, Sammy sock puppet.
MG gets credit for correcting the link. So what do you think of what Roberts has to say?
Here’s a worth while read from someone with a professional background with more breadth than most who try to comment on the same issues.
An Economy Destroyed
By PAUL CRAIG ROBERTS
http://counterpunch.org/roberts07222011.html .
Darren
did you read the sentence that said ” is very rare.” if you are going to say “it is common”, you need to have a better argument than a flat contradiction that looks like you just didn’t understand what rgjs wrote.
as to whether it is “weather” or “climate”… well, put enough weather together and you have climate.
i don’t make any claims about whether this weather is due to climate change, but IF it keeps up, that’s what it will be.
Jack
what darren is trying to say is that if someone blackmails you, all you have to do is given him what he wants and the problems is solved. capice?
when you run into a case of criminal insanity its best to just walk away. far away.
Sammy
if you cherry pick the facts you can arrive at any conclusion you want. rescinding
the Bush tax cuts would be considerably more than taxing half the income of the top 1%.
all you and CoRev do when you “talk about the numbers” is show you don’t know anything about numbers.
“On Social Security, the basic problems are that Americans are living much longer and retiring long before their health requires, and the ratio of retirees to working age Americans is too high and rising.” P. Morici, above
That, especially the bolded phrase, is an incredibly selfish position for Morici to take and little more than an opinion. And I have not yet seen any basis for an economist having a valid opinion concerning aging, retirement and health. And if the geezers continue to work til they’re 70 what will that do to the availability of jobs for the young men and women approaching 60? Who is that fool addressing? What makes him think that a 65 year old is employable in today’s America? He has obviously been working too long in academic circles where one can earn a full time salary regardless of age and have the lightest work schedule of any profession in America. Morici should retire early and allow UofM to hire two younger asst profs who might be more in touch with the world around them. Talk about an Ivory Tower syndrome.
“Higher taxes would cripple U.S. international competitiveness with rising Asian economies, and individual retirement accounts risk leaving many elderly without adequate support, especially if they live past 75.” P. Morici
Yet another untested and indefensible opinion regarding the relationship between taxation and economic competitiveness. And now he warns the elderly of the dangers of relying on capital markets for their retirement planning. Who provides the funding for the position Morici holds at the Smith School of Business? Or, how much outside private consultation work is he allowed to pursue while he soils the reputation of UofM?
MG
people don’t retire because their health gives out. unless they are slaves or horses. people retire because they want to and have saved up enough money to be able to afford it. Social Security provides the first time in history that ordinary working people can afford to retire before they are ready for the glue factory. And because they are living longer it will cost them an extra forty cents per week each year in payroll tax to pay for that longer life without having to keep working at the kinds of jobs that ordinary workers have. only Morici and Peterson think that ordinary workers should keep working until they can’t walk.
Morici is apparently one of the many economists too dumb to figure out that people are paying for their own retirement with SS.
Roberts could polish and write a good article focusing on these points that he raised:
“The US economy is in a deepening recession from which recovery is not possible, because American middle class jobs in manufacturing and professional services have been offshored and given to foreigners. US GDP, consumer purchasing power, and tax base have been handed over to China, India, and Indonesia in order that Wall Street, shareholders, and corporate CEOs can earn more.
“When the goods and services produced offshore come back into America, they arrive as imports. The trade balance worsens, the US dollar declines further in exchange value, and prices rise for Americans, whose incomes are stagnant or falling.
“This is economic destruction. It always occurs when an oligarchy seizes control of a government. The short-run profits of the powerful are maximized at the expense of the viability of the economy.
“The US economy is driven by consumer demand, but with 22.3 per cent unemployment, stagnant and declining wages and salaries, and consumer debt burdens so high that consumers cannot borrow to spend, there is nothing to drive the economy.”
coberly,
Thanks! After your response I should amend my comment. It should read: “There is a reason that Jack and coberly won’t do the numbers…..”
Sammy,
The WSJ article that you cited is a good read. All the same, very few taxpayers are going to leave the USA if the Bush II era tax cuts are allowed to expire.
My position is that ALL of the Bush II era tax cuts should be allowed to expire. That would provide roughly $3.675 trillion over ten years according to data from the U.S. Treasury. No one will like it, but too bad. Thereafter, the Congress can start developing new tax code.
Moreover, I wouldn’t allow any of the additional revenue from eliminating the Bush II era tax cuts to be used for general funding purposes in the fiscal year federal budgets. I would draft legislation that would require that such revenues only be applied directly to retiring Debt Held by the Public. This would continue until such time as such debt is reduced to $5 trillion. Thereafter, such revenue could support general budget needs.
By the way, I have no problem with increasing tax revenues from the upper income earners above the pre-Bush II era tax cuts. I could support a 45% tax rate or the euivalent thereof for incomes of $500,000 or $700,000 per year. Frankly, if they want to leave the country, fine by me. Once they shift their primary residency out of country, they should never be allowed to reestablish U.S. residency and their visitation rights should be severely limited.
rjs, last year it was Russia with the similar weather phenomenon.
Or a ~35% increase in 2 1/2 years. More importantly, don’t project the 4 or 8 year debt using Obama’s own 2012 budget submission.
MG, thanks for the latest Morici article. Keep them coming.
Snap shot in time.
Got it from the web, no attribution.
The point is the current firemen were arsenists when they ran the place, and the arsen was for keep Dubya in office looking good!
MG/sammy,
The WSJ editorial is an agitprop sheet.
CoRev,
We will all be back at the Source, in the end. Channelling Keynes thru Lao Tzu.
Republican arsenists have “controlled” the house since Jan 11.
“There you go again,’………………(RR) the only bill passed the house only; will not get thru the senate, so it was not passed it had a positive vote amongst the anti citizen arsen Murdoch faction running the house …….”
At this point I would as soon the economy shut down.
But I tend toward the Tao, time for a bit of Wu and Wu-wei.
Keep ’em coming.
“living much longer and retiring long before their health requires, ” How rude for 130M working folk to have self interest!!!
SS surpluses were collected to fund tax cuts and war profits. The old folks now get to pay for them again.
You just have to take his obfiuscation a little further.
Tax cuts and wars did not increase anyones’ productivity, just inflated bubbles which the oligarchs alone rode, while the boats are all anchored to the bottom by war and tax cuts, which demand off shoring to slave labor (euphemistically called emerging economies).
Keep ’em coming, thanks for not adding any to Morici, he says more by what is not said.
Why is A.B. running a day late. Can someone tell MOI how at this tyme: 6:00am PDT there can be 53 comments if this link was posted today? What’s the use when every thing is taking/happening as fast as it is, for this newsletter to be relevent?
ILSM, (I’m sure tongue in cheedk) says: “The point is the current firemen were arsenists when they ran the place, and the arsen was for keep Dubya in office looking good!”
But when we compare, most fair minded folks would say emphatically, Yes! GWB was actually a reasonably good president. His economic policies would have resulted in a balanced budget. Before the housing bubble burst his last deficit was just $160B, and had been falling for three years.
From the below charts you can draw your own conclusions as to who was the better president for the economy. Watch the BDS now, it can still re-occur and cloud logic.
CoRev
works on the Big LIe principle: just keep saying it. enough people will believe it and tell their friends.
Dubya drove the car into the ditch, and now Obama gets the blame because he is paying the bill.
I am no fan of Obama… at all. But “fair minded people” know that Dubya was a disaster.
MG
i have to say i agree with that.
People do not pay for their own retirement under SS. It is a pay as you go system, and the only reason it has seemed to work is because of favorable demographics. Many workers paying for few retiries. Now the demographics are shifting.
Also where do you get this 40 cents thing? $0.40 * 50 (working weeks a year) = $20/yr. $20 * 50 (working from 18-68) = $1000. How is saving an extra $1000 over the course of a lifetime going to pay for increased longevity? That covers about one month.
Sure it would be nice if everyone could reitire at 65 and live comfortably to 100, or even 80, but that puts a lot of pressure on working age people to support them. People don’t realize how expensive this is because the costs have been defered by SS. Now those costs are coming due as the baby boom retires.
MG
Is that really you. Now we’re beginning to read the same page. Combine the restoration of the earlier taxation program with responsible spending controls and the deficit will become a manageable phenomenon. Spending cuts are where the details count, but we can’t let the focus be on well or fully funded programs like Social Security. The Defense (??) bedget is first and foremost because that is where the unnecessary waste is in abundance. Wars of waste and pillage. Defense of every other country is not our responsibility, but it is a good excuse to fund the defense industry. We’re pissing away funds on so much that there is no good reason to look to the elderly and infirm to take up the slack.
C’mon HofF, your point has been asked and aswered repeatedly. That you don’t understand the Social Security program is no good reason to rehash the issue continuously. Fully funded until 2037, and that date is only an estimate generated in the midst of a serious recession. The fact is that most of the socalled baby boomers will be pushing up daisys by 2037, or near to it. And any improvement in the economy will extend that 2037 date out further yet. The arguments regarding Social Securities deficiencies are bull shit peddled by liars who don’t want to see working people with a $2.6 Trillion Trust Fund that supplements the pay as you go FICA deductions. The only real problem that the Social Security program will have is how to keep the Trust Fund assets from growing too quickly once the economy returns to a positive growth condition. They’ll probably need to increase benefits to the elderly and disabled.
MG,
“That would provide roughly $3.675 trillion over ten years according to data from the U.S. Treasury. No one will like it, but too bad.”
Fine…I don’t have problem with it. I agreed with Joe Biden when he said “everyone should have skin in the game.”
But looking at the Math……$300 Billion a year off of $1.1 Trillion dollar deficits still leaves a huge problem. And it really exposes the fact that we have a spending problem not a revenue problem.
Dale, that ditch should be really obvious on the above charts. Point it out.
When did that housing bubble burst?
Where are the wars in budget tracking table?
CBO chart what are ‘economic and other tech changes’?
Ole Debt chart, Bush depression aweful expensive as well as his wars, Obomber just playing past Bush, same game.
And of course the war profiteers keep getting 20% of outlays forever!!!
Seems only difference between 07 and 11 is the depression and no change Obomber.
What is your point with 4 tiny qcharts?
Jack,
“Between December 2008 and December 2009, the federal government added nearly 100,000 new positions.”
“On the salary side, the average annual federal salary is now just under $120,000, compared with $59,909 for the private sector, according to the Census Bureau of Economic Analysis.”
“The federal work force is expanding, not contracting, thanks to Obama initiatives like a health care program that adds 16,000 new Internal Revenue Service enforcers.”
http://washingtonexaminer.com/opinion/obama-pro-growth-governmentWas ObamaCare neccessary? Will it be better? Will it save money?
Jack,
“the Congress passes all the budget legislation and no matter what the President might recommend (and he can only recommend legislation) it is the Congress that has the responsibility to pass legislation that determines what to spend and how to spend it.”
Yep….and Obama has threatened to veto everything that isn’t his plan. And we don’t even know what his plan is. The House passed Cut-Cap and Balance…Where is the Democrat Plan? For that matter where is a Democrat Budget….over 900 days and still waiting!
Democrats are Hypocrits!
“They have been wasting time collecting pay for a job undone.”
Democrats control the Executive branch and the Senate……..that is just a flat out childish statement on your part!
Jack,
Oh I get It!……people who do not agree with you or question your ultimate wisdom have a cognative dissonance, but you only provide sound solutions and reason?
To me it looks like a bunch of know nothing whinning!
Darren
Sorry for your confusion regarding the cognition point. It’s not the presence of dissonance. It’s the lack of content I was referring to.
Darren
last time i looked at the numbers a 3% increase in taxes would pay down most of the “excess” deficit accrued through 2008 by about 2030. No increase in taxes at all but a return to a normal economy would pay off the 2010 deficit in four years.
now this is top of my head and subject to my not too good memory, but i’d bet it’s ball park. meanwhile you are apparently unaware of the time factor. you can’t raise taxes 300 bil a year and keep running one tril deficits forever. but if you stop running the deficits, the 300 bil will pay down the debt to a level where normal growth will handle the interest.
MG
yeah, i don’t follow the celebrity journalists or name brand economists so i don’t always know much about who is being talked about. Now i will know that Peter Morici is a hack who hasn’t had an honest thought in his whole life.
heart of flint. brain of gas.
pay as you go is the same thing as put it in the bank and take it out later. what do you think the bank does with your money while you are waiting to cash your savings?
the forty cents per week is the raise each year. you’d have to be able to at least eighth grade arithmetic to do the calculation.
it must be hard for you to have to have opinions about things you can’t understand.
oh, well, here’s how it works. 40 cents per week this year, another forty cents per week next year, and another forty cents per week… so that after 10 years you’d be paying an extra 4 dollars per week, and after 20 years, 8 dollars per week…
and meanwhile your wages are projected to go up about 8 dollars per week each year. that’s 8 dollars per week this year, another eight dollars per week next year, and another eight dollars per week…
so that after ten years you’d be making 80 dollars more per week, and after 20 years, 160 more dollars per week…
now that you get the idea, class, except for poor flint there… what would be the average increase in the tax after 75 years…. lets see 75 times 40 cents equals… 30 dollars per week in the seventieth year (don’t panic class… after 75 years your real wages will have increased 8 dollars times 75 equals 600 dollars per week.. more than you are making now. and you will get that 30 dollars back when you retire,)
okay an increase of 30 dollars per week over 75 years, means an average increase of 15 dollars per week. that would be a total of 15 dollars times 52 weeks times 75 years equals 58,000 dollars… i hate to do this with Flint in the room, because the poor child thinks that 58,000 is going to come out of his pay this year. he can’t think in terms of what happens over 75 years. but if he is making 800 per week this year and will be making 600 more, or 14 hundred dollars per week in 75 years, that is an average of 1400 plus 800 divided by 2 = 1100 dollars per week. 1100 times 52 times 75 equals $4,290,000 dollars. So maybe that 58000 is not going to cripple him after all… but he really, really wanted to spend that money in Vegas. why he knows a girl there who will…
but back to the lesson, class. 58000 dollars times 100 million people equals 5.8 Trillion Dollars !
And that my friends is how you get a 5 Trillion dollar deficit scare out of a forty cents per week tax increase.
exercise for the class: how much is your payroll tax increase as a percent of your wages over that 75 years. (no peeking, but the answer in the back of the book is 1.4%
Now I need to remind you that this was all a rough calculation. The Big Guys use Present Value and it changes things a bit… but not by much.
oh, and you need to pay the higher tax because you are going to live longer. it’s always such a drag to run out of money when you are eighty because you didn’t save enough.
or you can always work at WalMart until you are eighty.
or just let them cut your Social Security check by 25%…. lets see, 25% of a thousand dollars is 250 dollars a month. sure you can live on 750 dollars a month. unless the price of cat food goes up due to increased demand.
and, just for the hell of it… 250 dollars a month times 50 millioni retirees times 12 months times 20 years is.. 3 Trillion Dollars. not exactly the 5,8 Trillion we calculated on the other side of the balance sheet, but pretty good for a ball park. the difference is, i think, that the average benefit in 75 years would be a bit higher, to reflect those rising wages, so 25% of a bigger number would be more than 250 dollars. But if you were a low earner with a basic 1000 dollar pension… you would be trying to live on 750 when the cutters and Harvard economists are done with you.
Coberly,
How can you assume what the economy looks like in 2030?
“No increase in taxes at all but a return to a normal economy would pay off the 2010 deficit in four years.”
ObamaCare kicks in fully 2014. We can assume a “normal” economy, whatever that means, will come shortly but where is the evidence that we are headed in that direction? If going back to Pre-Bush Tax levels is that important to the Left…then fine, but it does not solve the problem, and any change in this weak economy will have consequences. It does not mean that for a couple of years we will not see increased revenues, but there will be consequence as with any tax increase.
“but if you stop running the deficits”
Bingo! And why is it that the people who have offered a plan are being crucified by the people with no plan? Where is the Democratic Budget? Where is the Democratic Deficit reduction plan? Where is the Democratic Debt Ceiling Plan?
Where is the Democratic Leadership “Bill of Goods” we were scolded about before the election of 2008?
If raising taxes is part of a larger plan that will get the job done and both sides can agree upon then let’s move forward…it part of compromise…..but Democratics keep insisting that Tax Increases only actually works…and it clearly doesn’t, therefore NO deal on tax increases!
a 131F heat index is only common around the dead sea in the middle east…
also rare: 2331 record high temperatures in one week:
http://mapcenter.hamweather.com/records/7day/us.html?c=maxtemp,highmin
i was agreeing with MG about tax raises and denying visiting rights to companies who go offshore.
of course i also agree about the WSJ editorial page.
Darren
i don’t give a damn at this point what the dems and the R’s and the big O say. I can tell you that rescinding the Bush tax cuts and raising the Social Security tax one half of one tenth of one percent per year, and teaching the people to understand that they are going to have to pay for health care if they want it… WILL solve the budget deficits, real and imagined…. unless our Leaders start another war, or keep the present ones running for no apparent reason.
the trouble with your sides budget plans is they are dishonest. not only do they refuse to raise taxes to pay down the deficit caused by the tax cut that was going to pay for itself but didn’t. but they are trying to cut Social Security which has not a goddamn thing to do with the deficit.
Richard Miniter, a Forbes columnist, is right: “Obama is not the new FDR, but the new Gorbachev.” Beneath the tattered, fading banner of reactionary liberalism, Obama struggles to sustain a doomed system.
Democrats’ dependency agenda — swelling the ranks of government employees, multiplying government-subsidized industries, enveloping ever-more individuals in the entitlement culture — is buckling under an intractable contradiction: It is incompatible with economic growth sufficient to create enough wealth to feed the multiplying tax eaters.
More Bull Sh$t from Dale.
Dale says: “last time i looked at the numbers a 3% increase in taxes would pay down most of the “excess” deficit accrued through 2008 by about 2030.” Here are the numbers, do the math!
2010 receipts (that’s everything including taxes) – —— $2163B
2010 outlays (that’s everything including SS checks) — $3456B
2010 ——————————————— deficit — $1293B
The numbers are from here: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/tables.pdf
So Dale and jack repeat the same story without ever thinking beyond some talking points they have taken in as gospel. Since I know Dale and Jack will not do the math 3% of the total receipts is $64.89B. And Dale’s total excess deficits since 2008 is : $3563B. BTW, the deficit in 2007 was $160B if you wish to deduct that annually to calculate your “excess” deficits.
Tabel 25-1 from here: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2010/assets/concepts.pdf
Dale also said without any corroborating numbers: “No increase in taxes at all but a return to a normal economy would pay off the 2010 deficit in four years.” Will it? Show us!
Dale closed his comment with this: “you can’t raise taxes 300 bil a year and keep running one tril deficits forever. but if you stop running the deficits, the 300 bil will pay down the debt to a level where normal growth will handle the interest.” So Dale, how obviously wrong is your thinking? How does one stop running $1,000B+/Yr deficits by increasing revenues by $65B/Yr.
This isn’t the first time we’ve had this discussion, but you and even Jack persist in regaling us with the same fantasy. And they vote?!?
coberly:
You fight a good battle and your take on taxes and SS is on the mark.
With deficit reduction being the target, I believe we are forsaking the one target which needs to be pursued . . . jobs creation, good paying jobs beyond the “Texas miracle.” Any other target is little more than a race to the bottom and one which will not benefit the middle and lower income taxpayers.
Forbes eh? Sounds like quite the comic book you found there. Nice.
AS, no couter point so ridicule.
SS is only fully funded if the government stops relying on raiding the SS fund and starts using general revenue to pay into the system. As it is the Feds are running chronic deficits and any cut in spending would supposedly be disasterous. The SS fund is not like putting money in the bank because banks loan that money with the expectation of repayment rather than spend it and then borrow more just to meet current expenses. Sorry Jack, there are no “trust fund assets.” Just a bunch of IOUs from a government with no specific plan on how to repay them. Borrowing from SS isn’t even considered part of the official deficit.
Coberly, I’m sorry I misread your $0.40/week proposal. Now I’m wondering where you are getting the $8/week projected anual raise. We have to be talking about constant dollars, so your projected increase must be in addition to inflation. I would have thought that you would claim that real wages have been stagnant for the last couple decades. Have the poor and midle class been getting these raises all along or just from now on? If real wages do not rise in the private sector, will the Feds step in and mandate higher wages and 95% employment?
The bottom line is that the earlier we retire the more we have pay while we are working. Raising the retirement age is inevitable if longevity continues to increase.
Preliminary results were just announced last December. No results so dramatic as a few politically conservative web sites are pushing have been announced. These sites are also pushing yet another conspiracy theory about the “truth” being suppressed. The preliminary results show some particle formation but have no quantitative estimates for the real world and no mention of what part of the atmosphere these particles would form in, a vital piece of information when considering what effect, if any, there would be on the climate. Given that the announcement of the preliminary results included the information that it would be another two to three years before more conclusive results would be available I think sammy’s link is probably full of it.
The counter point is obvious if only implied. The article is rhetorical bull shit and symbolized as such by amateur’s imitiating the reply with “Forbes eh?” There should be a required label on each issue, “Read with caution. Much of the editorial content os this magzine has been manufactured by the editors and may not bear any relationship to facts and the reality.” Sammy’s choice of reference is perfect as an example of just that ppoint, “Beneath the tattered, fading banner of reactionary liberalism, Obama struggles to sustain a doomed system.”
A doomed system? How absurd can a statement be? What system would that be? The entire US economy and related private and public institutions? That would be the same system governed by both Republican and Democratic politicians alike, both in the Congress and the Presidency. Did Obama suddenly create the “doomed system” in just two years of his Presidency? And what is “reactionary liberalism”? If the system in place has been too concerned with the health and welfare of all Americans, as is implied by the phrase “Democrats’ dependency agenda,” how then is the liberalim reactionary? Miniter and his cohorts get paid to manufacture an alternate reality. amateur’s ridicule of the representations contained therein is well justified.
Morici’s article was really lacking. In his critique of some admittedly simplistic Democratic claims about the source of the deficits he uses 2007 as his baseline for deficit increase comparisons without one referring to the recession. In fact, no where does he refer to the effects of the recession on the deficit. In addition he says that American workers will find their income stagnating in the future because of fallout from the debt problem. Where has he been? That’s already been happening for most Americans for the last decade.
Those are reasonable proposals.
Sorry flint, but your ignorance is on display with the statement, “Sorry Jack, there are no “trust fund assets.” Just a bunch of IOUs from a government with no specific plan on how to repay them. Borrowing from SS isn’t even considered part of the official deficit.”
We have two choices. One is to believe the bull shit spread by the ignorant and the deceitful, as the statement from HofF is an example. Otherrwise we can believe the summary of current legislation as detailed on the SSA site:
http://www.ssa.gov/oact/progdata/fundFAQ.html
In the real world, which Morici chooses to ignore, older people are often the first to be fired because the are making more and their future replacements would be cheaper. Once they are unemployed it is far more difficult for them to find a job and the job will often pay far less than their previous one. They also will often have had to drain what savings they had to make ends meet while unemployed and the new job doesn’t pay enough for those savings to be replenished. The recession has driven many people who planned to work until 65 or older to file for SS early when their unemployment runs out and they still have no job prospects. Morici addresses none of these issues.
CoRev
unfortunately i used to teach math to people like you who couldn’t get beyond one and one and one is three. the math is a little more complex than you think. than you can think.
Flint you are so ignorant it isn’t even any fun to try to help you.
The government borrows from the SS excess, and has to pay the money back at interest. Is in fact doing so. but your friends at the lie factory can rely on you to believe all of their lies even when they conradict themselves.
Even if your friends succeed in stealing the Trust Fund, Social Security… that is the workers… could continue to pay all promised benefits with a tax raise of about one tenth of one percent per year starting soon. this would not be a hardship or even a real injustice. The boomers would get theretirement they paid for. and the post boomers… paying the tax increase… would get their longer life expectancy paid for… with a slightly higher tax than they expected, but not higher than a fair payment for their own benefits.
and i know, you can’t understand how they can be paying for the boomers retirement and still be paying for their own benefits at the same time. because you don’t understand the first thing about money and banking.
your thoughts are so disconnected it is hard to even respond to them. but just to help you out a little, whatever the mix of inflation and real wage increase is represented by the increase in nominal wages, the fact is that benefits are paid out of the nominal wages of the time the taxes are paid… so that, for a very oversimplified example, if you paid 12% of your 100 dollar a week salary in 1960 into Social Security, and some guy in 2011 is paying 12% of his 1000 dollar a week salary, you are going to get, in dollars, about ten times as much as you paid in. Of course a lot of that is inflation, but about 2% per year of it is “real.”
and here we are. i cannot overcome ignorance even in a 20 week course that your parents pay for and you have some motivation to pass. i sure as hell can’t do it a blog of half assed comments from you and me trying to explain how the whole thing works in a one minute reply.
The Right Wing Strikes Again
From this morning’s NY Times:
“OSLO — The Norwegian police on Saturday charged a 32-year-old man, whom they identified as a Christian fundamentalist with right-wing connections, over the bombing of a government center here and a shooting attack on a nearby island that together left at least 92 people dead.”
Disregard the religious identification. What remains of the description of this lunatic? Right wing fundamentalist.
coberly/Jack,
If SS has nothing to do with the deficit/debt ceiling, why does Obama say
“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview
CoRev
What’s with the reliance on White House as a data source? I’m under the impression that you don’t trust Obama and his minions. Not to worry, neither do I. I can’t even guess at O’s motives, but he’s been pandering to right wing extremists, other than the Islamic variety, since he entered the Oval Office. I, and you just a short while ago, wouldn’t trust one data point that he might provide. Now you provide two links to White House data analysis. At least you’re consistent in your inconsistency.
The government takes in money from payroll taxes. It uses some of that money to pay current beneficiaries. The rest it spends and replaces with what they call a special issue seccurity and I call an IOU. Either way it is a promise to repay what was spent. Unfortunately the government doesn’t count this obligation as part of its deficit. These securities are not tied to any existing asset, they represent the obligation of the government to collect and pay that money out of future taxes. If you think the government will have no trouble repaying all of its obligations, then you should have confidence in the special issue securities. If you believe the government will have too much debt to repay and can’t even sustain its current course despite raiding SS, then those promises don’t look so secure. Linking to SS’s “Don’t worry, we promise.” page does nothing to reassure me.
You can continue to think everyone who is worried about SS, not to mention Medicare, is evil and ignorant. Just don’t be too surprised when the entitlement gravy train dries up regardless of which party is in power. Do you really think the Republicans want to antagonize the AARP? Why do you think the Dems give in so easily? Bush got in the last big entitlement expansion with Medicare D. Now that the bubble economy is over, it’s all down hill.
Don’t strain yourself trying to “educate” me. The lack of intelectual respect goes both ways. I came here looking for economically literate “slightly left of center” opinions. Instead its the usual reflexive, ad hominim vitriol. Labelling anyone who does not already agree with you as hopelessly ignorant doesn’t convince many people, but it sure does make one feel smug, doesn’t it?
Maybe because he is a politician with a slightly distorted agenda and wants to join with his Republican affiliates in their efforts to obfuscate the relationship between the payment of Social Security benefits from both FICA contributions (which are only available for the payment of such benefits) and Trust Fund assets (which consists of Treasury notes that the Treasury is legally required to honor with the “full faith and credit of the United States).
Why would you suppose that Obama is going to be truthful in his efforts to discuss the issue with Republicans that haven’t heard of a lie that they won’t be happy to spread? The Congress and the Executive branch know full well that the media is sufficiently cowed so that no one will be called out for the deceitulness of their proclamations or the dishonesty of their personal politics. Democracy can really suck once we’ve given the upper class the upper hand in regards to the electoral process and the news and communications media.
Instead of doing the complex math, Dale doubles down on the Bull Sh%t.
It’s a source of consistent historical data. I don’t have problems with history just projections.
HOF, a minor addition to your comment. This is absolutely true during periods of excess FICA collection: “ It uses some of that money to pay current beneficiaries. The rest it spends and replaces with what they call a special issue seccurity and I call an IOU. Either way it is a promise to repay what was spent. Unfortunately the government doesn’t count this obligation as part of its deficit.” We need to add that the amount borrowed is added to the “debt” totals.
We also need to add during periods when the FICA collections are less than SS needs, the SSTF is used to make up the difference by redeeming SSTF treasuries. This difference is subtracted from accounting class “intra-governmental debt” and added to the accounting class “debt owned by the public”. That difference is also added to the total deficit.
Those numbers can be verified in my earlier Whitehouse budget reference: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/tables.pdf
Allow me to ask a dumb question. When an employer sends a dollar in FICA taxes to Treasury, does it not go into the SSTF as a purchase of special securities the moment it arrives? And thus, to pay checks on 3 August, don’t special securities need to be cashed-in? And if the Treasury is unable to borrow money elsewhere to pay-off the special securities, how do the checks go out? What am I missing here?
HOF,
Don’t take it personally. You are making complete sense (as you are only stating the obvious). They resort to name-calling because they have lost the argument and have got nothing else.
Jack,
There is another, more rational and higher probability, explanation. That is that there is legitimate reason why 99.9% of observers and both political parties are grabbing the “third rail”: Social Security and other entitlements DO contribute to the deficit/debt, and that your solutions of raising taxes on the “rich” (numbers please), or 40 cents a week or a 3% tax increase will solve the problem are ridiculous.
You can remain in the .01% and continue to rail against the “evil liars,” or you can join reality. Your choice.
sammy,
Every word of your comment is a direct quote from George Will’s July 21 WaPo column. You should have made that clear to the AB readers and provided a link so that others can respond properly to your post, Will’s opinion, and the opinions of Richard Minter.
Jack,
sammy was citing George Will’s 21 July WaPo column. Everything sammy posted was a direct quote from Will. And, yes, Will cited a short quote from Richard Minter and linked to Minter’s blog commentary.
It is apparent from your comment that you haven’t read Richard Minter’s recent commentary and George Will’s subsequent column piece. I recommend that you read Minter’s commentary as it is clear what he is discussing. You might also note the related posts at the bottom of Minter’s commentary.
Bear in mind that Minter closes his remarks with these opinions:
“With its traditional funding drying up and its core constituencies fading away, the Democrat Party of 2020 will look very different. It will either be smaller or much more centrist. Without federal money to spread, the Democrat Party will have to reinvent itself. It will. The world’s oldest political party knows how to survive. And it will look back at 2011 as its high point, the year before the tide ran out.”
Here are the Minter and Will links:
http://blogs.forbes.com/richardminiter/2011/07/18/why-the-democratic-party-is-doomed/3/
http://www.washingtonpost.com/opinions/sustaining-the-unsustainable/2011/07/21/gIQAI6mtRI_story.html
And here is a good counterargument:
http://ordinary-gentlemen.com/blog/2011/07/20/rumors-of-the-democratic-partys-demise-are-greatly-exaggerated/
And the substance of the article is more valid because it originates with George Will? I don’t think so. I now better understand why the material comes across as such bull shit. it originates with the master of the bull, George Will. Mr. Wills academic preparation is in the fields of propaganda dissemination. That’s why he works as a “journalist.” I put that in quotes to underscore that Will does not deal in factual news, but instead writes biased opinion pieces. His take on anything is through the distortion of the rose tinted glass.
“We also need to add during periods when the FICA collections are less than SS needs, the SSTF is used to make up the difference by redeeming SSTF treasuries. This difference is subtracted from accounting class “intra-governmental debt” and added to the accounting class “debt owned by the public”. That difference is also added to the total deficit.” CoRev
So what part of that comment validates the suggestion that the Treasury will not be able to cover all benefits due? One form of debt, the Special Treasuries, metamorphoses into another form of debt, regular Treasuries, which it was representational of from the first spent dollar of the excess FICA receipts. Calculate that transformations dollar value at any point in time and you will have the value of the insufficient taxation which the excess FICA contributions were covering up. Now it is time to pay the piper. The Bush tax holiday was weighted to the Wealthiest Americans. Now it is time for them to return the holiday cash that has contributed to the distortion of wealth distribution over the past several decades.
Sorry MG. I originally supplied the link but it posted additional links
Read more on Newsmax.com: Time Is on the Side of Tea Party Reforms
Important: Do You Support Pres. Obama’s Re-Election? Vote Here Now!
When I erased them it must have erased the original links.
CoRev
I did the math on the 3% tax increase right here before your eyes about a year ago. look it up.
the four years to pay off one year’s deficit… if the economy returns to normal is based on the difference in tax revenues between a recession year and a normal year.
i have done the math. you can’t do math. you get a bunch of numbers and throw them at the wall to see what sticks… sticks to your philosophy. The only bull shitter here is you.
PJR, the Chief Actuary for SS said this in an interview a week ago (parphrased): SSA send the list of authoriazed payments and from there Treasury writes ALL checks from the SSTF.
That would indicate that Treasury redeems the amont needed every month to cover SS outlays. Surplus or deficit in FICA wouldn’t matter until the SSTF is eshausted.
That is also why I called Obama a liar re: can’t guaratee SS checks on 8/3/2011.
sammy
obama is a fool or a liar. or both. but in any case your logic is faulty. Social Security can have nothing to do with the deficit… or the debt ceiling… but if the debt ceiling is reached and the law says the checks can’t go out, they won’t. that doesn’t mean that SS had anything to do with it.
pjr
to be honest, i don’t know. but most of what comes into SS has to go right back out again to pay benefits. i don’t know on a day to day basis whether more is coming in than is needed or less.
it seems to me that the money that comes in that is needed today can go right back out without ever entering the Trust Fund… but I don’t know the details of how the government handles it. I don’t think they matter… or should matter.
But here is a strange thing. If SS brings in less money than it needs and has to cash its bonds… that does NOT increase the deficit/debt, it reduces it. What the government apparently can’t do is go out and borrow the money to replace the money it has to pay BACK to SS,
On the other hand, there is some kind of law that says that SURPLUS SS funds MUST be used to buy government bonds, but that would INCREASE the debt/deficit. So if SS is surplus, the president is forced to break the law either by ignoring the deficit ceiling or by “borrowing” the money from SS.
the actual facts are simple. the convolutions of laws written by fools and gamed by fools are not.
Jack,
The commentary originated with Richard Minter, not George Will.
I take it that you still haven’t bothered to read Minter’s blog commentary.
Your response to sammy was based on a lack of knowledge as to what Minter was explaining in his opinion. Your response indicated that you will talk off the top of your head without putting forth any effort to determine what the hell was really stated.
You had the opportunity to read Minter’s commentary and blew it off. Your 11:24:08 AM comment is an embarrassing mess.
There’s no way to help you if you’re intent on being bullheaded.
Jack asks: “So what part of that comment validates the suggestion that the Treasury will not be able to cover all benefits due? ” The entire comment validates that Obama lied!
The only time Treasury will not be able to cover all benefits is when FICA receipts are below demand and the SSTF is exhausted. that other alternative is when people stop buying US treasuries.
“Calculate that transformations dollar value at any point in time and you will have the value of the insufficient taxation which the excess FICA contributions were covering up. ” This is called the amount of intra-governmental debt owed to the SSTF. What’s your point?
The remainder is just more class warfare crap.
sammy
you are a fool. my numbers are accurate. you are basing your opinion on the lies of the paid liars.
you of course would not understand that, never having had a thought of your own and having to rely on what “most people” think in order to guess at what “must be” right.
Flint
as far as I know you are kind to dogs and children. I am truly sorry I end up with “vitriol” but after a while it is truly exasperating trying to explain things to someone who is determined not to understand them.
By the way
The US government has the same assets as any corporation: its workers and its product. We are paying very low taxes at the moment and could easily raise the taxes necessary to pay down the defict… including the money owed to Social Security.
meanwhile the workers who will get the benefits can pay for them themselves by raising their own payroll tax forty cents per week each year.
Like most people Flint does not think in terms of numerical relationships, let alone strict logical (causal) connections. He free associates from one “idea” to another and comes up with nightmare images that justify to him the need to cut taxes… but everything justifies to him the need to cut taxes.
What he doesn’t understand is that the payroll tax is not a tax. it’s an insurance contribution. you get the money back. with interest. more or less deending on whether or not you have the fire.
oh, hell… one final note.
Flint says blithely The US has no assets. He says this and the words sound like them mean something. but they don’t. it’s just a noise. this is characteristic of the “arguments” of Flint and Sammy and CoRev. They just throw out words more or less grammatically arranged and having about as much meaning as the average rock and roll lyric, or TV commercial for soap. But it “sounds like” it means something. It produces a tingle in their head. But there is not even the remotest connection to reality, or the way reality interacts with itself. And it never stops.
PJR,
I respond to your questions below. First, I want to raise another related issue.
My Question: If the U.S. Government hits its total debt ceiling or debt limit, how does the Treasury issue further special issue Treasury securities to the SSA OASDI combined trust funds or any other trust funds for that matter? Inbound dedicated cash for OASDI would be recorded as a ledger entry, but without the debt ceiling headroom, how would Treasury be able to comply with the law and immediately issue more special issue Treasury securities to the SSA? It appears that Treasury must save some debt limit headroom for issuing special issue Treasury securities to the SSA for the OASDI combined trust funds. Otherwise, Treasury has to hold the cash until OASDI payouts occur (apparently that happens routinely – see below).
Your Questions:
Redeeming the nonmarketable special issue Treasury securities held in SSA OASDI combined trust funds doesn’t increase the U.S. Government’s debt limit. The action is a matter of swapping special issue Treasury securities for marketable Treasury securities with no noticeable change in the U.S. Government’s total debt.
As you know, the U.S. Government’s total debt is composed primarily of Intragovernmental Debt (trust funds, etc.) and Debt Held by the Public (marketable Treasury instruments sold on the open market).
The special issue Treasury securities provided to the SSA in exchange for SSA OASDI dedicated inbound cash revenue have already been counted against the debt ceiling, having been recorded as Intragovernmental Debt. Redeeming them for marketable Treasury securities doesn’t change the total debt of U.S. Government unless the marketable interest rates are different than for the special issues redeemed. If the marketable rates are lower, then the impact on the debt limit is reduced. If higher, then there is an increase in debt limit obligations, but that interest obligation wouldn’t occur immediately even if supported by short term marketable issues.
The SSA explains the process in two (or more) ways:
Trust Fund FAQs: (as cited by Jack, above)
“Tax income is deposited on a daily basis and is invested in “special-issue” securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.”
“By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are “special issues” of the United States Treasury.”
Trust Fund Data – Investment Transactions:
“The trust funds hold special issues (SI) sold only to the trust funds. These SI securities are of two types: short-term certificates of indebtedness and long-term bonds. The certificates of indebtedness are issued on a daily basis for the investment of receipts not required to meet current expenditures, and they mature on the next June 30 following the date of issue. Special-issue bonds, on the other hand, are normally acquired only when special issues of either type mature on June 30.”
I see you’re doubling down on the Bull Sh%t. I’m smarter than you cause I taught math. Your stupid because you didn’t teach math. Just because you can bring number to do math, doesn’t mean anything cause I taught math. And, because I did the math one time, I’m even smarter than you.
Oh, did I tell you I’m so much smarter than you cause I taught math?
Coberly
If you find it so exhausting to respond to those who refuse to share your views, perhaps you should give it rest. You have provided very little as a substantive response anyway. In these latest posts you merely dismiss my arguments as meaningless and throw up your hands. Why bother?
I did not say the US has no assets. The US gov. has many assets, such as most of the land in Neveda. The SS Trust Fund is not backed by an asset in any real sense. It is effectively a liability. The assets of the speical issue securities are offset by the corresponding liability by the government to pay those same securities. Every dollar realized by the securities must be paid for at that time. It’s like saying my left hand owes my right hand $50, so I have a $50 asset. In addition the government owes that same money to the beneficiaries. So if we look at the government as a whole, there are two dollars of liability for every dollar of asset.
The government has already spent the trust fund and no amount of accounting shell games is going to change the fact that SS is backed by promises not dollars. You are so worried about someone stealing the fund, but you refuse to open the safe and see that it’s already gone.
Jim,
Morici has discussed the impacts of the recession in many other articles.
He is using 2007 as the pre-recession federal budget deficit baseline – a reference point of comparison to future projections.
The fiscal years’ deficits problem going forward is nothing short of astonishing, projected to rise from the current of Debt Held by the Public of $9.75 trillion to $20.8 trillion in 2021 according to CBO’s analysis of the President’s budget proposal which includes elimination of Bush II era tax cuts for upper income earners. Net interest outlays are projected to exceed $800 billion in FY2021, which in my opinion is a very conservative estimate.
A major problem is U.S. trade policy. Morici writes about that issue all the time.
run75441 – “You fight a good battle and your take on taxes and SS is on the mark.”
Care to show the numbers on the taxes issue?
sammy – “There is another, more rational and higher probability, explanation. That is that there is legitimate reason why 99.9% of observers and both political parties are grabbing the “third rail”: Social Security and other entitlements DO contribute to the deficit/debt, and that your solutions of raising taxes on the “rich” (numbers please), or 40 cents a week or a 3% tax increase will solve the problem are ridiculous.
You can remain in the .01% and continue to rail against the “evil liars,” or you can join reality. Your choice.”
I am surprised at your comments.
There is no question that a net increase in the SSA OASDI combined trust funds – principal and interest or interest only – increases the total debt of the U.S. Government. In fact, the SSA OASDI combined trust funds can continue to grow, thereby increasing total federal debt, and concurrently, net OASDI cash shortfalls can occur which directly impact the fiscal year operating budgets of the U.S. Government. But the net cashflow shortfall would not further increase total federal debt as marketable Treasury securities would be issued via redeemtion of the special issue Treasury securities. That portion of the transactions would serve as a wash.
The hit would occur on the operating budgets whereby net interest payment obligations on marketable Treasury securities would increase, and such obligations would extend well into future federal budgets. This could lead to a further crowding out of discretionary spending. That, in fact, appears to be the driving issue that put the SSA OASDI programs on the budget cutting table. It’s all about saving funding for discretionary spending as pressures mount from increasing net interest payments, all sorts of mandatory spending – some of which have nothing to do with entitlement programs, and desires and needs for discretionary spending.
I disagree with you that adopting coberly’s plan wouldn’t have an impact on reducing the deficits of the fiscal years’ federal operating budget. If such changes occurred immediately, the U.S. Government would eliminate net cashflow shortfalls for the OASDI combined trust funds, thereby eliminating $355 billion in general budget outlays over the next ten years. That would help the situation with the fiscal years’ federal budgets. But, at the same time, the SSA OASDI contributions to total federal debt would increase on a net basis whereby no OASDI combined trust fund redemptions were needed for cashflow shortfalls.
I disagree with you as well on elimination of Bush II era tax cuts on upper income earners. The increased revenues would total roughly $679 billion over ten years. That’s not enough additional revenue but it helps. The problem is that the Congressional Republicans and Democrats don’t want to eliminate the Bush II era tax cuts on all other individuals and households, thereby leaving $3 trillion of additional revenue on the table.
President Obama’s FY2012 budget proposal already includes elimination of the Bush II era tax cuts for upper income earners. Yet, Debt Held by the Public rises to $20.8 trillion in 2021 according to CBO’s analysis of the President’s budget proposal. Obviously, further revenue growth and spending reductions are needed to eliminate the projected massive growth in Debt Held by the Public from the $9.75 billion level we’re at now.
While the SSA OASDI funding change only results in ten year federal budget savings of $355 billion, it does take […]
coberly – “Social Security can have nothing to do with the deficit… or the debt ceiling… but if the debt ceiling is reached and the law says the checks can’t go out, they won’t. that doesn’t mean that SS had anything to do with it.”
Are you saying that SSA OASDI net cashflow shortfalls have no impact on fiscal year federal budget deficits?
Are you saying that SSA OASDI combined trust funds have no impact on the growth of total federal debt (i.e., the federal debt ceiling)?
If these are your positions, I would like to see your supporting math or government references that support you.
coberly,
The SSA OASDI combined trust funds are program assets, but certainly not assets to the U.S. Government as a whole from an accounting viewpoint. They are legal internal debt obligations, not assets.
flint,
The SSA OASDI combined trust funds are program assets held in the form of special issue Treasury securities earning interest which have always been honored in the same fashion as marketable Treasury instruments.
The securities held in the SSA OASDI combined trust funds haven’t been stolen nor has the U.S. Government refused necessary redemption of any of their marketable or special issue Treasury securities.
These are facts.
MG:
Reread Coberly post. I am not your librarian either
MG thanks your answer makes sense (“a matter of swapping special issue Treasury securities for marketable Treasury securities with no noticeable change in the U.S. Government’s total debt”) and your question is a better one than mine. It’s got to be tricky to pay off debt (writing SS checks or checks to others redeeming treasuries, for example) each day in an amount equal to or greater than FICA receipts on that day.
run,
coberly stated 2 days ago, 9:55:30 PM – “I can tell you that rescinding the Bush tax cuts and raising the Social Security tax one half of one tenth of one percent per year, and teaching the people to understand that they are going to have to pay for health care if they want it… WILL solve the budget deficits, real and imagined…. unless our Leaders start another war, or keep the present ones running for no apparent reason.”
I agree with coberly’s solution on restoring positive SSA OASDI net cashflow, but I don’t agree with his statement about eliminating the fiscal year budgets’ deficits.
Rescinding all of the Bush II era tax cuts would provide additional revenue of $3.675 trillion over ten years according to the U.S. Treasury. CBO’s analysis of President Obama’s FY2012 budget proposal shows that over the period 2012-2021, ten years, debt held by the public would increase from its current level of $9.75 trillion to $20.8 trillion.
Rescinding the Bush II era tax cuts and making SSA OASDI net cashflow positive wouldn’t cover the projected growth in debt held by the public.
You stated to coberly – “You fight a good battle and your take on taxes and SS is on the mark.”
Coberly’s approach leaves total deficits growth of roughly $7 trillion less consideration of reduced net interest payment obligations. His taxation answer of eliminating the Bush tax cuts does not eliminate the federal budgets’ deficits over the next ten fiscal years.
I asked if you wanted to show the numbers on the taxes issues. Instead, you respond with some of your usual childlike, snot-nosed bullshit.
Coberly’s math, unfortunately, doesn’t work.
You’re clueless on the ten year federal budgets’ deficits issue based on your endorsement of coberly’s statement.
PJR, Treasury is (IIRC by law) required to have a $60B cushion of cash to cover the variability and lags in revenue receipts. On the Aug. 3rd it is expected to actually have a fraction of that cushion. Using models they are able to project cash flow needs, and p;an and redeem accordingly.
SSI checks, the largest SSA outlay, are issued on each Wed of the month. 8/3/2011 is a Wednesday. So, Treasury should have already redeemed enough SSTF special treasuries to cover next months needs.
From here: http://www.treasurydirect.gov/RT/RTGateway?page=institAnnceRes We can see that since 6/30/2011 Treasury has auctioned $293B, which equates ~8% of an estimated $3.5T FY2011 budget.
Furthermore from here: http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/ we find that average monthly beneficiary payments are: $59.146B.
For the math averse we now see that Treasury has borrowed in excess of $233.854 in July in excess of SS needs. But, a very big but, that does not mean that all of that $233B+ is available for Treasury outlays, since much of it was rolling over maturing treasuries already previously offered.
MG
it’s a little hard for me to keep up with a Congress that cries about deficits and then cuts taxes and boosts spending.
my math did work. i think it would still work, but i don”t know what CBO’s assumptions are, and I do not assume O’s 2012 budget proposal.
I am dead certain that the increase in the payroll tax would solve the SS “shortfall.”
I am reasonably certain that the people ought to just pay for the Medicare they are going to want. They can afford it…. I think you left that out of your calculation… as did CBO.
meanwhile, if you want to start your math in the same place as I did… take the 3% increase and compare it to the Trustees Projections for the next 10 years… I was using the 2010 projections. Things have changed…. that ought not to have changed.
After doing that, look at the difference between tax collections now and before the recession. If the recession ends and tax collections return to normal and no increase in made in the budget, the increased tax collections will pay for one year’s deficit in about four years.
Then if the math still doesn’t work for you we can talk about details. But if we are working on different assumtions we are just arm waving and blowing hot air.
as for snot nosed bullshit
That actually had it’s origings in some MG gratuitous insults. So try to find some better manners yourself, and leave us to work out our own salvation.
MG
there is no way to help you if you continue to be bullheaded. of course you don’t recognize when you are being bullheaded because you know everything and if we would only read everything you read then we would just naturally have to agree with you.
but there is nothing in any of your past posts that shows much judgement about what you read, or if you even understand it.
MG
thank you. I think the first several paragraphs agrees pretty much with what i said/thought. it is not clear to me that you notice the difference between saying “tax income is invested on a daily basis..”
and
“certificates are issued …for the investment of receipts not required to meet current expenditures.”
CoRev
SSI has nothing to do with SSA.
In the rest of your comment I got lost trying to keep track of just which money was counted as SS and which was general revenues and expenditures. the thing about math averse is that the numbers don’t mean a damn thing until you know what you are counting.
MG
I think I agree with most of what you say here. but you must understand that PAYING BACK THE MONEY YOU ALREADY BORROWED is not “increaseing the deficit” even if you have to borrow to pay back the money you already borrowed. Failure to be clear, or honest, about this is the source of much of the … well, confusion, about the deficit and SS.
Also I must emphasize: elimination of ALL the Bush tax cuts. Not just elimination of tax cuts on upper income earners. That tax the other guy bullshit has got to stop.
And no, we can’t keep spending more than we are taking in. The problem is the tax cutters don’twant to take in any more, and the programs they want to cut are the programs that pay for themselves. There is deep dishonesty going on here.
MG
social security is self funded. it has nothing to do with the budget deficits… except by virtue of having lent money to the government.
you cannot claim with any honesty that paying back the money you borrowed is a case of the guy you borrowed it from increasing your deficit… even if you have to borrow from someone else to pay your debt to the first guy.
no math or references are required. only simple honesty.
and the growth of total federal debt is NOT a case of SS affecting the “debt ceiling.” The debt ceiling is a purely political “fact.” SS is not contributing to that fact. The R’s are using the debt ceiling as a way to blackmail O into cutting SS. And he is falling for it.
MG
I understand that quite clearly. It’s the Big Liars who are trying to confuse that issue.
Flint
the trust fund is backed by “the full faith and credit of the United States”. that used to be counted as an asset. The Trust Fund is indeed a liability to the government. Where you go wrong is that you want to walk away from that liability and blame SS for “causing” it. SS collected the money for the benefits, lent the excess to the government, and now needs to be paid back. That is pretty simple, but your firends in Washington are saying “we can’t possibly pay that mean old SS back so we need to cut granny’s retirement below subsistence levels.”
but it is NOT like saying your right hand owes your left hand. SS is the workers money. When you overpay your income tax, the IRS sends you a refund. It does not say its left hand is paying its right hand so we’ll have to reduce our deficit by not paying tax refunds.
What do you think a dollar is? It’s a promise.
If you go to the bank and demand to see your money, and they open the safe, you will see that it is already gone. That’s why I say you don’t know anything about money and banking.
“The SS Trust Fund is not backed by an asset in any real sense.” Flint
If that is true then so too would it be true for all Treasury notes held by the public (individuals and institutions) and foreign governments. The assets of the Trust Fund are the Treasury Notes that are representative of the debt owed by the Treasury of the USofA to the Trust Fund just as Treasury notes held by the public and foreign governments are representative of debt. This is not different from any other form of debt security, what we generally refer to as bonds, issued by corporations and municipalities. The biggest difference is that the US Treasury has always been regarded as the most reliable of all debtors. That the current Congress and the President are trying to distort that historical regard is an appalling affront to the sanctity of the “full faith and credit” character of US debt. A pox on all their houses.