The 112th Congress: Debt ceiling edition

[Tundra]

Re: The 112th Congress: Debt ceiling edition

I read a finance article the other day on msn money's site where the writer (Jim Jubak if you wish to search for it) claimed that somewhere around 1/4 of our unemployment is structural (meaning job openings are posted and go unfilled for lengthy periods of time because nobody is sufficiently qualified). .

I would take these types of "reports" with grain of salt. Lot of these business reporters are corrupt by business money.

Farm business "need" illegal immigrants because they can't find US workers.

Oil companies (in my state) "need" legal immigrants because they can't find enough workers supposedly, 30-40% of oil field workers are foreign if I remember correctly, if you include oil service "contractors", most speak Russian.
And they want tax breaks so they can create jobs. too funny.

http://en.wikipedia.org/wiki/H-1B_visa

High-tech companies often cite a tech-worker shortage when asking Congress to raise the 65,000 annual cap on H-1B visas, but according to a study conducted by John Miano and the Center for Immigration Studies there is no empirical data to support that claim.[26] Citing studies done at Duke, Alfred P. Sloan Foundation, Georgetown University and others, critics have also argued that in some years, the number of foreign programmers and engineers imported outnumbered the number of jobs created by the industry

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

Back in the days when US economic policy tried to balance unemployment and inflation, the number that was often quoted for structural unemployment was 3% -- that's the percentage that takes into account people switching jobs, etc. That's not 3% compared to the bogus (U3) 10% unemployment that gets quoted, it's as compared with the actual (U6) unemployment rate including people who have given up looking, people forced into PT work by the bad economy, which is at least 15%.

 

[Bakunin]

Re: The 112th Congress: Debt ceiling edition

Back in the days when US economic policy tried to balance unemployment and inflation

So... pre-Greenspan?
Most people on this board weren't even alive then.

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

So... pre-Greenspan?
Most people on this board weren't even alive then.

Pre-Volcker, probably. The fed has always been the pawn of Wall Street, but it was in the late 70's that the executive power of the US said screw you to the poor and began to the game strictly for the benefit of K Street. People forget Carter was from the conservative wing of the Democratic Party. The rot had already begun to set in before Reagan -- he merely put the class war into hyperdrive. The legislative followed in the 90's, and now they've got the judiciary too. The Republicans may have been the villains of the piece, but they used blue dogs as a stalking horse, too.

Nice little coup d'etat.

 

[Bill]

Re: The 112th Congress: Debt ceiling edition

Actually, it is possible to leave spending alone and tax our way out of the problem. It isn't feasible to cut spending enough on its own to resolve the deficit.

If you truly believe we can tax our way out of our deficit/debt problem (which I'm not convinced you are), dream on. At the end of last year the $14+ trillion deficit came out to approximately $45K for every person in the country (man, woman, child). That doesn't even include unfunded entitlement liabilities, which adds several multiples to that amount depending upon the true extent of those. There's no way we could raise taxes enough to get ourselves out of the hole. We're either going to have to default on the debt, or more likely try to inflate it away by debasing the dollar. And even after one of those two solutions, we're going to have to get spending under control or we'll find ourselves with more huge deficits and debt again. Tax increases may very well happen, but they aren't going to be much help without significant spending cuts.

 

[Priceless]

Re: The 112th Congress: Debt ceiling edition

If you truly believe we can tax our way out of our deficit/debt problem (which I'm not convinced you are), dream on. At the end of last year the $14+ trillion deficit came out to approximately $45K for every person in the country (man, woman, child). That doesn't even include unfunded entitlement liabilities, which adds several multiples to that amount depending upon the true extent of those. There's no way we could raise taxes enough to get ourselves out of the hole. We're either going to have to default on the debt, or more likely try to inflate it away by debasing the dollar. And even after one of those two solutions, we're going to have to get spending under control or we'll find ourselves with more huge deficits and debt again. Tax increases may very well happen, but they aren't going to be much help without significant spending cuts.

If you set tax rates back to what they were when Reagan came into office, had a VAT, a carbon tax, user fees up the wazoo, then yes, you could balance the budget. I think you'd also crater the economy, but it already sucks for everyone but those on Wall Street, so all we'd be doing is spreading the misery. However, the longer the GOP says no to ANY tax increase (the tax cuts were supposed to expire) then the more likely we are to see liberals insist on raising taxes even more. This is what I said over on the budget thread :

What I'm hearing from the opposite side is that they want me to give up all of my benefit (and do what? Drop dead? Become homeless?) but they aren't willing to give up one Goddamned dime to solve the problem. That makes me angry. That makes me fearful. That makes me less willing to sacrifice my benefits and more likely to support raising the top rate to 50% or more. That makes me want to write a very different letter to Senator Snowe. And now I'm back in that fringe again where this problem started to begin with.

Any reasonable person knows it is going to take compromise on both positions to get an agreement and solve the problem. Unfortunately compromise has become a dirty word in Washington. There aren't many reasonable people there either.

 

[Almington]

Re: The 112th Congress: Debt ceiling edition

If you truly believe we can tax our way out of our deficit/debt problem (which I'm not convinced you are), dream on. At the end of last year the $14+ trillion deficit came out to approximately $45K for every person in the country (man, woman, child). That doesn't even include unfunded entitlement liabilities, which adds several multiples to that amount depending upon the true extent of those. There's no way we could raise taxes enough to get ourselves out of the hole. We're either going to have to default on the debt, or more likely try to inflate it away by debasing the dollar. And even after one of those two solutions, we're going to have to get spending under control or we'll find ourselves with more huge deficits and debt again. Tax increases may very well happen, but they aren't going to be much help without significant spending cuts.

You are mixing up the short term deficit problem with the long term entitlement problem. Currently, the entitlements do not have a funding problem, both the medicare and social security trust funds have positive values so both programs are solvent, the problem for those programs is that they are PROJECTED to exhaust their trust funds sometime after 2020.

Nothing that says that we have to eliminate the entire national debt in 5 to 10 years with massive tax increases so that we start running a $500B per year surplus. As long as we make responsible cuts, and thoughtful tax increases so that we balince the budget and run a small surplus, the debt level will naturally decrease, plus as the overall economy grows the ratio of debt to GDP will decrease.

The responsible solution to the federal governments short term deficit situation requires both spending cuts AND tax increases to balance the budget with the smallest impact on the overall economy.

 

[Bill]

Re: The 112th Congress: Debt ceiling edition

Obviously balancing the budget and running surpluses is necessary to start paying down the $14.5 trillion debt. As hard as it is for both sides to balance the budget for even one year, I don't think there is any way that tax increases are ever going to start making any meaningful dent in the overall debt. With significant spending cuts and moderate tax increases, we may be able to get to the point where we can balance the budget again and hopefully even start running surpluses, but I don't believe that will ever be enough to reduce the debt very much. I think the only way for the debt to be resolved will be to default on it or inflate it away, and Washington will likely go the latter of those routes.

I'm not mixing up deficit problems with unfunded entitlement problems. I'm merely pointing out that the entitlement problems are on unsustainable paths and painful as it might be for politicians on both sides and the common people, entitlement reform is going to have to happen as part of addressing our overall deficit/debt problems. The unfunded entitlement programs generally bring the total projected debt up to $60-100 trillion depending upon which source you want to use.

We can talk about the need for tax increases all we want, but the bottom line is that uncontrolled spending is at the heart of the deficit and debt problem and until the Dems and Reps in DC get that under control, tax increases aren't going to help much.

 

[Bob Gray]

Re: The 112th Congress: Debt ceiling edition

Both entitlement and other federal spending is part of the problem. Neither is sustainable. We spend more than we have, and any dancing around, saying some are ok while others is not, is fanciful rearranging of the deck chairs on the Titanic, and is emblamatic of the lack of financial sense that has brought us to this point. I understand there are different pots of money, but big picture, it's all money coming into the feds and going out, and a lot more goes out across the board than comes in.

 

[Almington]

Re: The 112th Congress: Debt ceiling edition

I'm not mixing up deficit problems with unfunded entitlement problems. I'm merely pointing out that the entitlement problems are on unsustainable paths and painful as it might be for politicians on both sides and the common people, entitlement reform is going to have to happen as part of addressing our overall deficit/debt problems. The unfunded entitlement programs generally bring the total projected debt up to $60-100 trillion depending upon which source you want to use.

We can talk about the need for tax increases all we want, but the bottom line is that uncontrolled spending is at the heart of the deficit and debt problem and until the Dems and Reps in DC get that under control, tax increases aren't going to help much.

The government hs both a spending AND a revenue problem, tax recepits are 5% off of the historic averages and the Bush tax cuts account for between 1/3 and 1/4 of the overall deficit (the rest is mostly the result of the economic downturn decreasing revenues and the government's response to the downturn). Governement revenues have to go back up to average historic levels (as a % of the overall economy) or people had better be prepared to accept the resulting societal fallout.
Entitlement reform will need to occur within the next few years, but it does not have to be adressed imediately to resolve the deficit and debt limit problems that we currently face. We need to focus on our current problem, because if we can't resolve these problems now, the long term entitlement problem will resolve itself (and not in a good way for anyone)

 

[Bob Gray]

Re: The 112th Congress: Debt ceiling edition

Here's what the CBO says:

"The single greatest threat to budget stability is the growth of federal spending on health care - pushed up both by increases in the number of beneficiaries of Medicare and Medicaid (because of an aging population) and by growth in spending per beneficiary that outstrips growth in per capita GDP. For the nation's fiscal situation to be sustainable in future decades, growth in such spending will have to be reduced relative to its historical trend and to CBO's projected path."

 

[Priceless]

Re: The 112th Congress: Debt ceiling edition

Democrats have said entitlements are on the table (most recently, Chuck Schumer, who was subsequently blasted by the left) but the GOP has repeatedly said no to new taxes. Again, these are NOT new taxes - the tax cuts were supposed to expire. This isn't increasing anyone's taxes.

The Democrats have said it's all open for discussion. The GOP continues to balk. The Democrats have already cut spending and President Obama has produced a budget with even more cuts. The GOP hasn't contributed a dime to balancing the budget, and they show no willingness to.

 

[Almington]

Re: The 112th Congress: Debt ceiling edition

Here's what the CBO says:

"The single greatest threat to budget stability is the growth of federal spending on health care - pushed up both by increases in the number of beneficiaries of Medicare and Medicaid (because of an aging population) and by growth in spending per beneficiary that outstrips growth in per capita GDP. For the nation's fiscal situation to be sustainable in future decades, growth in such spending will have to be reduced relative to its historical trend and to CBO's projected path."

I agree with this and have acknowledged that entitlements will be reformed in the next few years. I feel that our first priority should be to find a way to balance the CURRENT budget, then we can worry about future projections and how to balance those.

 

[Priceless]

Re: The 112th Congress: Debt ceiling edition

.

No. We were 100 billion apart, and I met you halfway, at 50 billion. Then we were 50 billion apart, and I suspect if I'd gone down to 25, we'd be 12 billion apart.

 

[Bob Gray]

Re: The 112th Congress: Debt ceiling edition

I agree with this and have acknowledged that entitlements will be reformed in the next few years. I feel that our first priority should be to find a way to balance the CURRENT budget, then we can worry about future projections and how to balance those.

I think we aren't that far from each other. I just feel more urgency in dealing with both as quickly as possible. That said, I have little faith that eithe rthe current budget will be anything near balanced, and that entitlements will be reformed meaningfully in the next few years. Too many entrenched special interests that would rather have theirs now than think about future generations.

 

[Kepler]

Re: The 112th Congress: Debt ceiling edition

Your taxes and my spending are the foundation of the economy and the mark of a civilized society.

My taxes and your spending are a threat to personal liberty and a decadent culture of dependence.

 

[Almington]

I think we aren't that far from each other. I just feel more urgency in dealing with both as quickly as possible. That said, I have little faith that eithe rthe current budget will be anything near balanced, and that entitlements will be reformed meaningfully in the next few years. Too many entrenched special interests that would rather have theirs now than think about future generations.

I agree that we are not that far apart.
In an ideal world, the whole fiscal situation would be delt with as a whole. Sadly, we don't live in an ideal world and I feel that the only way to deal with the problem is peicemeal and focus only on one problem at a time. I feel that worrying about the future deficit projections obscures the current deficit problem that needs to be resolved first.

 

[Priceless]

Re: The 112th Congress: Debt ceiling edition

Dems are apparently pushing for revenue hikes in the neighborhood of 20% of the spending cuts Republicans get in the negotiations. But that's a non-starter. McConnell says debt reduction has to come 100% from spending cuts.

Here we go.

 

[Foxton]

Re: The 112th Congress: Debt ceiling edition

Here we go.

Let it burn let it burn.

 

[joecct]

Re: The 112th Congress: Debt ceiling edition

And another piece today from the Washington Examiner (though I think in Kepler's house, it is treated like Pravda was in Pat Buchanan's) on the ticked off electorate and the problems of a successful 3rd party.

http://washingtonexaminer.com/politics/2011/06/prisoners-republican-democrat-duopoly