In order to survive the onslaught of political ads from presidential candidates and the Super Pacs with which they never coordinate, let’s pretend that we’re those few undecided voters that they’re spending squillions of dollars to sway. That way, we’ll be far less apt to throw our television, computer, iPad, iPhone, or other device on which we’re being tortured with political ads, against a brick wall with the craziness of Clint Eastwood and his imaginary chair friend.
Let’s see what we’ve got so far. Two nights ago, Paul Ryan carefully laid out spending cuts without a word about growing the economy. We’re seeing the wonderful results of that very tactic with Greece. Draconian spending cuts with declining economic growth is making things worse. Ask Angela Merkel.
At some point, revenues have to improve. The supply side economic theory that posits that more money for high earners through tax savings will result in job creation was never mentioned once, even through the “Jobs, jobs, jobs” theme has been hammered on by both parties.
Last night, Mitt Romney, followed up by remaining silent as to how the 20% across the board individual and and 28%+ corporate tax cuts will prevent deficits from rising. That is, as we all know, going to decrease revenues. As to the goal of major deficit reduction or entitlement program reform, both of which will require trillions of spending cuts to prevent rising deficits, we have no details.
I heard the arguments that candidate speeches are broad-brush, platform related, goal oriented statements made to secure their base, but as a completely undecided person, am I being told to wait for details that will have an enormous effect on my life?
At what point will I learn from where the trillions will be cut?
At what point will I learn the methodology of the implementation of such cuts?
From the rhetoric last night, it appears that the defense budget is safe.
If so, what isn’t?
Here’s an interesting exercise. On this site, all of us undecided voters can try to balance the budget ourselves. See how it works out yourself by cutting no defense spending. [Updated link, click below. ~ Eds.]
Remember, too, that we’re cutting current Federal revenues by 20% as well.
I, the undecided voter for whom both parties are spending enormous amounts of money to secure my vote, need more information.
When can we expect to get it?
And if you are contemplating divorce, install a keylogging program on your computer, easy to do and only costs about 99 dollars. Then you can keep track of his online activity when you are away and any evidence should go a long way toward supportin
http://www.marketplace.org/topics/economy/budget-hero Oopsie. Here’s the budget balancing site.
Kitty – Neither link is working for the budget exercise.
Hi Kitty – I used the NYTimes link and gained tax revenue by 63% and cuts 37%. My choices involved not cutting education, poverty or public safety. I overcame the 2015 shortfall by $183 billion but fell short of correcting the 2030 shortfall by coincidentally $183 billion. I stayed away from areas I didn’t feel I knew enough about because I am so suspicious of anything that will hurt the poor & middle class. I made cuts in defense because I think methods of going to war have changed completely, as illustrated by Obamas use of unmanned drones for surgical strikes. Also, how many nuclear warheads does one need to completely blow up the planet? I am not a believer in more subsidies for big oil and making cuts off the backs of the less privileged and seniors. I think a social safety net is a mark of civilized decency & works.
Maplav for President!
Actually Kitty, not only did you not get answers to your questions…..Im interested in receiving your take on what you hear next week as well. Because I’m sure you’ll be left with a whole slew of new, unanswered questions!
Meanwhile our debt counter is here:U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 31 Aug 2012 at 11:35:10 PM GMT is:
The estimated population of the United States is 313,421,317
so each citizen’s share of this debt is $51,032.53.
The National Debt has continued to increase an average of
$3.88 billion per day since September 28, 2007!
Concerned? Me too. No answers in sight, but plenty of lies, arguments, fingerpointing and histronics. From both sides. Expect more next week.
Actually I expect nothing more next week. Except more of the same. It is so sad, this 2 party system. WHen will it be about issues and policies–and not parties and sides?
Hi Dallas Lady, and thank you, as always, for your comment. I, too, will be interested in whether any further information is presented next week. There are so many holes in the budgets presented to the public for review, who knows what action either party will take. Have you tried the link above to balance the budget? I’d be interested in your thoughts on this. Thanks again for your comment.
Looking at the debt clock alone is like looking at the entire economy through a pinhole. There are many other factors that are needed to get perspective on the number. You tried to do that yourself by dividing the number by the population. When administrations change, the new one inherits debt as well as policy as well as economic condition from the previous admin. If you have a giant ocean liner that has gone in the wrong direction, you cannot stop it on a dime, turn it around & correct its misdirection in a minute. The present admin inherited a very deep hole, hemorraging jobs at the rate of 800,000 a month, & the banking system in complete collapse. Bush was already on the TV speaking of the financial collapse before his term ended. From Bush, Obama inherited an economic recession which generated 3.5Trillion in lower tax revenue due to recession, 1.6Trillion in Bush tax cuts, 1.4Trillion for 2 wars, 1.4Trillion in additional interest due to higher debt inherited & then Obama spent 0.9Trillion on stimulus tax cuts to aid recovery. This was a giant ocean liner you cannot turn on a dime. Bush policy was still in effect until Obama could change policy & direction.People ask why everything isn’t fixed in less than 4 years. Actually a full 4 years has not passed in that the first year a new Pres has to make new policy and get it through this Do Less Than Nothing Congress which is trying to obstruct everything. People say Obama had full control of Congress and the Senate for the first two years, but that is not true. Remember how many times the Republicans fillibustered in the Senate, forcing a 60 superMajority vote in order to get a bill to the floor? A Record number of fillibusters occured. So, it is not easy to get anything done, especially when politicians serve their own self interest first before the people who are the victims of the economic crash that was not their doing. The banks are still withholding credit because of the toxic mess they created, even though they got bailed out. Dodd Frank & the Basil regs are forcing banks to correct their highly risky behavior and clean up their act. The banks are fighting it tooth and nail & spending millions lobbying. There are a lot of things that need fixing besides the economy. There are a lot more factors besides the debt clock to take into consideration.
Kitty. I’m getting one if those “the URL you are looking for has been moved ” messages on this link. is it live for you ? I’m on my iPhone traveling , will be home later today. Will try on a computer and also google it then.
http://www.marketplace.org/ See if this works for you. Let me know if you have any trouble getting on this site.
I read “this Time Is Different”. It was strictly research but this spending and debt is just a repeat of history. We will default by not paying our debt or inflation. There are not enough tax dollars out there to pay this debt or to cover the current spending level.
We have yet to know the how bad this part will be. Even if everything is cut for spending, the need for more taxes will grow to pay the interest on that debt.
We can not do this by cutting or taxing. Defaulting will happen. As soon as we stop protecting the banking system it will happen. The longer we wait the bigger the problem gets. The debt clock shows that.
Hi idosew and thanks for your comment. Actually, the US has been here before. It was after WWII, and the level of debt to GDP was about the same as it is now.
We inflated it away. But the GDP was growing very fast then. We had no competition with the rest of the industrialized world blown apart. It was easier to do with growth. I think Harry Dent has it right about our aging boomer problem.
http://www.theaureport.com/pub/na/13989
Hi Idosew. If you look at a comparison of Debt to GDP and inflation in the post war economy (1940 – 1960), you’ll find inflation averaged 3.74% vs. 3.99% (1940 – 2012). http://www.usinflationcalculator.com/inflation/historical-inflation-rates/
http://www.usgovernmentspending.com/downchart_gs.php?year=1940_2010&view=1&expand=&units=p&fy=fy11&chart=G0-fed&bar=0&stack=1&size=m&title=US%20Federal%20Deficit%20As%20Percent%20Of%20GDP&state=US&color=c&local=s
Debt to GDP is much lower than it was in 1940, so I’m unsure what you mean when you say that the Post War debt was “Inflated away.”
After the war we brought in in line with inflation. and GDP growth. We never paid any of the debt off. The stats changed and dollar bought less. Since the GDP was growing so nicely it was balanced to improve how the numbers looked in a debt to GDP ratio. Spending was growing but at a much slower rate. We have had high debt growth since Reagan in 1981. Only under Clinton did the rate of growth slow while the GDP grew. Stats never tell the real truth. While in USC a course in statistics taught that stat data are used to tell the tales you want them to tell.
No matter who we elect in congress or the White House we can not fix facts to say something different. We can not pay our debt or even a small part of what has been promised to retirees both private and public workers. We can not keep the sizes of federal, state or county levels. What will happen is not going to be fun.
China has already slowed the money they are willing to lend us. Our tin cup may be out but so is the EU tin cup.
The real question is what will they call our new money when the dollar fails.
Have your read any of David Stockman?
Hi, idosew. Your comment made me smile. I taught Securities Analysis at UCLA (USC’s arch rival, as you know), but did include enough Quantitative Analysis in the course to (hopefully) show students how data may be skewed. You make a valid point that we should all be on guard for that.
The data I’ve provided should be explained further. The data for inflation is from the Bureau of Labor Statistics. It shows annual inflation increases by year, and my 3.74% calculation was an arithmetic mean for the period under review. The data for the relationship of Debt to GDP is from usgovernmentspending.com but all data used is promulgated from non-partisan US government sources. You’re correct that, to some degree, inflation mitigates the size of the deficit, but that has always been the case. Inflation, as you can see from the link, was not, and has not been significant different from its long term average, so I’m unclear as to what you’re referring when you content the debt is being “inflated away.”
I will say this, however. I’m not skewing data. I have no agenda, political or otherwise. I’m trying to provide information that I’ve used to draw my conclusions, and if you find that any data have been improperly analyzed, I welcome you to bring it to my attention.
Nice, as always, chatting with you, idosew.
Do you believe it is possible to cut and balance the on and off budget spending to incoming taxes at today or any other time’s level? Do you think Simpson-Bowles could do it if people would allow it to happen?
America never does anything until a panic happens and then America overreacts. Case in point the Gulf war has killed way more Americans that 911. Our freedoms have dissappeared faster with TSA and Homeland Security than I am comfortable with.
Your assumption about my university is wrong..University of South Carolina.
Hi Idosew. Sorry about the university assumption. When I read your comment, “While in USC a course in statistics taught that stat data are used to tell the tales you want them to tell,” I guess I assumed that was your school.
Your point is well taken regarding on and off budget items. I guess that I’m used to that, since my specialty was security analysis, and the accompanying shenanigans on their cash flow statements and balance sheets were familiar to me. But, as I said, your point is well taken. It’s needlessly complex, politically spun, and incomprehensible to most.
While I try to stick to writing about economics, I appreciate your point about personal freedom as well, It’s just a subject with which I know that others have far more knowledge.
Thanks so much for your comments. I enjoy chatting with you, and hope to do so again soon.
First of all cut the salaries and pensions of the politicians by 20%. Then reward the politicians who keep theiri office expenses at the lowest and punish the politicians with the highest budgets a 20% budget cut for failing to show fiscal responsibility. Next start hauling the tax evaders to jail and put them in orange suits cleaning the highways and byways every weekend till they have paid their tax debt off. ( also have them working in the National Parks keeping them clean). Then go to a flat tax without any deductions or loopholes. Next have women who have shown their worthiness as bargain basement shoppers buy all the government supplies. Start there and just getting the tax evaders to pay their taxes will probably come close to
getting the budget balanced.
Hi Julia. Great ideas! If you have a second, I’d love to know how you did on the link below titled “Budget Puzzle: You Fix the Budget.” Sounds like you’re off to a great start!
Random thoughts…Have congress give up all their lifetime perks and learn how to live like we do. Find out how to cut the cost of healthcare by looking at the OTHER side. Instead of messing with my healthcare, find out why it costs so much. Look at the fraud. Look at the suppliers. We only prey on the end users…not the other parts of the “system” And wouldn’t it be nice if we could have the billions of dollars being spent to buy the presidency – rolled into the budget instead of the TV and radio coffers?
Hi Auntie M, and thanks for your comment. Many, many people (myself included) agree that two classes of citizen – those in Congress and the rest of us – is a terrible idea. The problem, of course, is to put people in Congress that will vote against their own self interest. And, in regards to health care, many felt that the current legislation “caved” to “Big Pharma.” Finally, I can’t imagine that anyone would disagree with you about political ads. Except, of course, media conglomerates. Overturning Citizen’s United will take a lot of time. What would you think about limiting WHEN the ads could run (example, no more than two months before an election). Maybe that would accomplish the same thing.
Thank again for your comments.
Here is an active link, ladies. http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html Sorry for the others that did not work. Why not give this a shot and let me know how you did?
Hi Kitty, sorry it took me a few days to get back here. Thanks for getting the link active, it was a fun exercise. (Yes i know—Im twisted, haha).
Well I didn’t get the budget balanced but I made a dent. I got the 2015 shortfall down to $418 billion. and the 2030 shortfall to $1345B. As you’ve heard me say many times: we all have to get less and pay more–all of us, no exceptions. So needless to say, 47% came from tax increases and 53% from expense reductions.
Truthfully I would have gone further with the tax increases but the option to increase for everyone across the board to a flat percentage tax of income regardless of amount with no loopholes wasnt available to me. Yeah I’m a flat percentage tax woman.
Thanks for sharing this. Definitely a great exercise.
So tell us: How would you have done it?
Hi Dallas Lady, and thanks for your patience with my inability to post an active link. Mine was 48%/52%. Looks like we may have had a similar approach.
A shame that neither convention produced much in terms of specificity for their plans. As far as I can tell, on the revenue side, the Rs want no tax increases, which as you said, is impossible (or at least highly improbable), and the Ds want to rescind the Bush tax cuts for those earning $250k plus now, and for the rest, once we are closer to full employment. On the spending cuts side, Ryan was far more specific, increasing defense and cutting nearly everything else.
Hopefully the debates will bring more clarity.
Thanks again for coming back and sharing the results of your budget exercise.
Back to the original question – what would I cut to balance the budget? The best single soundbite I’ve heard from ANY politician lately was Romney’s “look seriously at any program for which we are borrowing to fund.” He made light of it and drew attention by using PBS’s Big Bird as an example but that is, in fact, a good example. I want, use, and enjoy all sorts of things that money can buy – but I wouldn’t borrow to buy most of them.
And while I’m weighing in with an unpopular view, I’d also look seriously at ways to LIMIT so-called entitlements. Whether we “give” or are forced to participate in the biggest welfare give-away in history, the whole idea is to assist those less fortunate for whatever reason. Many of the “less fortunate” have come to see my generosity and my tax dollars not as assistance but as a guaranteed way of life. If we help with one baby, that now is translated into an OBLIGATION to help with a second, third or tenth irresponsible pregnancy, and a never ending obligation to provide food, housing, education and medical care. My heart supports the concept of understanding and generosity, but my resources limit MY excesses and there should be limits on what we are forced to pay for others.
Would those entitlements include those for military and seniors? Would it also be for state aid? What about farm entitlements that go to corporates? Or maybe state retirees or city or county retirees? What about a list of those with the hands held out for tax deduction, entitled of course. Default .. not one will give their cut up to prevent this.
Hi idosew, and thank you for your question. Here is a chart and explanation of entitlement (welfare, health care – or Medicare, and pensions – or social security. http://www.usgovernmentspending.com/fed_entitlement_spending_chart_09_014.html
Hope this helps.
Hi SassySenior, and thank you for your comments. Many share your point of view. This is the current entitlement spending chart http://www.usgovernmentspending.com/fed_entitlement_spending_chart_09_014.html
Entitlement spending, as you can see, consists of Welfare, Health Care and Pensions. I believe your comment refers to Welfare, as the others are Medicare and Social Security.
Many, including me, conclude that Medicare is the biggest problem, as it exhibits unsustainable growth.
Thank you again for your comments.
I am aware of what they are. My point is that all spending on retired folks has to come from somewhere.
Just like private company ones. A company only has so much income All expenses come from that income. The more you have to pay folks retired and not producing for the company the less there is for the current worker.
It means lower wages for those now working or better productivity with fewer workers to support this.
These fewer or lower waged workers are also the ones being taxed to pay for the growing number of retired folks. Ending in lower standards of living for younger folks.
After all, the system is not one in which you pay for your own retirement but rather we paid for those who were retired when you worked. Now the current workers are paying for the current retirees.
There is only so much you can promise and deliver with out killing the goose ( young people) that lays the golden egg. We are Greece.
The same problem with too many boomers in the SS program is in the private ones too. Paying folks who are not contributing anymore encourages us to spend too much and not save. If we knew we would be on our own we would save much more.
I am resolute in my opinion that borrowing to finance ANY way of life is unsustainable and YES, I understand that this will result in reducing or even eliminating benefits which I may be receiving or to which I am entitled. I will lose these “benefits” when the current course of action fails, so if I get any say in the matter, I’d rather volunteer to be part of the fix than continue to be part of the problem. My observation is that government irresponsibility has set the bar for personal irresponsibility. It may well be my lot to live out my senior years under a huge and failing government, but whether I live to see it or not, the current system WILL fail. The very idea that our government assumes some businesses are too big to fail underscores their own fallibility. No government in history has even gotten too big to fail; on the contrary it has always been the greedy reach for more that precedes the fall. History and human nature do not change.
And yes, Kitty, medicare is a HUGE problem. I can hardly believe the amount that has been expended on my behalf and I’m relatively healthy for my age. And outlawing market-based care is surely a step in the WRONG direction. Thanks for providing us VNers the opportunity to express our concerns.
I like what you said. I do wish we could have a market based medical system, like it was when my grandfather practiced.
There was no such thing as insurance then. That little beast was invented in WWII when the government put wage freezes on. Companies invented it to attract workers. So it began as the inflating factor.
My Grandfather was not wealthy like today’s doctors are. But they never turned away anybody. He had more money owned to him than he ever made when he died. But he was in the job to help people not get rich.
I agree, but it’s not easy becoming a medical doctor or maintaining a practice these days. My Primary Care Physician told me that she paid over $1 million annually for participation in a group clinic that provided liability insurance – so her fees have to cover that before she starts earning a living. And even though medicare and my secondary insurance pay, I was only able to get her to accept me as a patient because of a mutual friend. She says Medicare is slow pay (4-5 months); rejects claims for failure to cross a “t”; and only pays a percentage of what is billed. Presumably, doctors overcharge for services so they can break even. I know that there are doctors who abuse the system, but I have several doctor friends who confirm sadly that this is just what you have to do to practice medicine these days.
Another thing that irritates me and bogs down the system is that doctors want their labs to perform tests – which is how they pay for the very pricey equipment that they need to compete. The reason a cat scan costs thousands of dollars for 15 minutes is the cost of the equipment, not the cost of the procedure. Now, they want to do invasive procedures (for example, a heart catheter) as part of a new patient workup. My moving or deciding to change doctors costs me time and wear; and cost medicare thousands of dollars when the information is clearly in my records. Rightly or wrongly, I see government regulation as having unintended consequences which do little but outrageously inflate the cost of care, my medical insurance, and the doctor’s mal-practice insurance. Thus, no matter how politicians couch it, it is shameful that the government is trying to outlaw market-based care.
Believe me, there are no poor doctors in this country. No matter how much the tell you about how hard it is.
They don’t get a call in the middle of the night that they have to go to the unpaying home to treat. The oath was really believed then. There was no such thing as saying no. My grandfather came with medicine and gave it out. He stopped practicing when his own health gave out. Then he went to live with his kids. A doctor in the south in the first 55 year of the 20th century was loved and respected but poor.
It is why my father refused to be one. He used the business world to become wealthy. Now doctors make more than the local business man. And most don’t know your name until they read it on your chart.
Such an interesting approach to solving this problem, idosew and SassySenior. Thank you both for your insight and “out of the box” thinking about this critical issue.
Oh dear, Kitty – I appreciate that you keep up with replies to your thread, but I think you underestimate us. Let’s not pretend that the exchange between idosew and me was “out of the box” thinking or any kind of approach to solving the complex issues of what services we need and want from government and how they will be funded. Unfunded commitments of Medicare-Medicaid-Obamacare represent a huge portion of the federal budget and are growing at an unsustainable rate. Even politicians are no longer pretending that it won’t fail unless corrections are made – and failure now looms in MY foreseeable future (5-10 years). We get it – 41 cents of every dollar spent by our government is now borrowed. Even the poorest and least educated among us understands that they can’t continue to live on borrowed money and neither can the government. Let’s also not pretend that we don’t understand that most of what our government borrows is NOT from China and others, but from newly printed paper money. We also have a fairly good understand that as long as we all “pretend” that said money has value, it does. But pretending that paper money has value doesn’t make it so – it just causes inflation. In fairly plain language, what that means to me is that whatever amount it now takes for me to live independently will very likely double in the next 10-15 years – at the very time than I am unable (due to age) to earn more or participate in new ideas or investments that will inflate simultaneously.
(Sorry – I wasn’t finished but afraid that it would time out and I would lose what I had written.) My point to the raving above is that idosew and I were never pretending to offer solutions – and our thinking is not “out of the box” but simply additions to the first-person narratives about what we perceive as ills in the current system. When I spoke earlier of allowing healthcare to return to a market structure (assuming provision for truly needed charity), that is a proposed SOLUTION. I can and should provide for my own healthcare – and that assumes a personal responsibility not to abuse my body and expect others to pay the consequences. I would be better served by a government that provided that which I cannot reasonably provide for myself – protection of our nation (an armed and ready military); a fair system of law; a base public education; and the foundation of transportation (highways, airports, etc). If we, the taxpayers who fund these services, want them to be expanded, we vote to pay more tax – not to borrow and leave our heirs to pay the debt…or the consequences.
To that I would add the wisdom of our forefathers not to make laws than cannot be reasonably or equally enforced. Sodomy, for example, may be against the law, but unless we want the police in our bedrooms (or wherever), it is a law that cannot be enforced. Yes, that is a distasteful subject, but it serves to reinforce that neither can the government force people to get jobs – eat healthy – and treat their fellow man with respect. By assuming the consequences of what are personal choices by individuals, our government has gone so far beyond charity as to be a party to encouraging poor behavior. Unless this concept is changed – our republic, however wise it began or powerful it became – will fail. I just can’t begin to express how much I hate that my generation allowed this to happen on our watch.
Hi Sassy Senior, and thanks, as always, for your views. My characterization of your conversation above as “out of the box” was not meant to demean your comments, or even to say that your opinions are unique. Rather, they are a new aspect of conversation here. For that, I am most appreciative.
Ay system is going to have those who take advantage of it, but by far the greater number are not. I am a big believer in a social safety net – a base of rights that everyone should have, such as healthcare, food, shelter. When Wall St crashes the economy and a hardworking person loses their job through no fault of their own, then society needs to pull together and help out until the system gets fixed and jobs are available. There are all sorts of ways to do this if there was cooperation in Congress. The ways available are proven and the ways that don’t work are also proven. Austerity is not working for Europe, as they are slowly learning. In the meantime though, Europeans have healthcare as a safety net etc. I don’t look upon all this as charity, but rather a pulling together to make things right. It is a universal acceptance of certain rights that would make the entire planet work. Being our brothers keeper means also that if things went wrong for us, a brother would help keep us as well. None of us have so much control of life that we can feel sure that we will never be that person who needs help. We step up for hurricane victims. We should also step up for cancer victims, starving people and people who have had their finances crashed by greed and avarice on Wall St.
I only wish enough Americans could care as much about the country as they do their personal handout. Promises that none of the mainstream parties will never fix. They all want to be re-elected more than they care about the future of our once great and mighty dollar.
The real scary part is that the rest of the world is starting to become concerned about our spending. Money that is not backed by anything but faith must fail. We may be too late to fix this. Default is going to happen.
The amount of cutting just to stop the bleeding in the budget would be overwhelming. I can’t think of how bad paying any of the debt would be.
I ,too, think it will happen in 5 to 10 years. Maybe sooner if China continues slow the growth in it’s economy. The rest of the world is depending on them at the same time we are buying less. There are always problems in the world but this is the first time we don’t have the money to buy our way out.
Hi idosew, and thank you,as always, for your views. I thought you might be interested in reading this article. http://www.cnbc.com/id/49388184 The author, Mohamed El-Erian, ran the Harvard Endowment Fund prior to coming to Pimco, the world’s largest bond dealer. I’d be interested in your thoughts about what he has to say.
Thanks again for your invaluable participation.
I watch him often on CNBC. I started watching that channel when it was FNN.
He is a very smart guy with whom I agree. The buying of mortgages by the Fed is printing money for sure. We the people seem powerless to do anything about what the Fed does. We can’t even look at the books!
David Stockman is one of my favorites and has a book coming out early next year. He is in the camp that says it’s too late as is Jimmy Rogers(Investment Biker) who has long said it is too late. He now lives in China.
Marc Faber, who also guests on CNBC often, think the same.
All we need to do is watch as the dollar slips more from the reserve to another has been. Maybe not like the 1930s German Mark but moving to that very spot.
We have none to blame but ourselves. Policing the world is the worst thing we do. Afghan war is what really cause USSR to default twice in the 1990s. That has not stop the world from investing. The government take overs there have slowed. As well as jailing so many with money.
http://www.cnbc.com/id/49379431 Did you catch Alan Simpson on CNBC?
I just don’t think we have a chance of saving ourselves. If something had been done to stop spending and promises before they became something we feel entitled there may ahve been a chance.
I will be voting for Gary Johnson for president so my thought will be free from guilt that voting for either of the spending parties would cause.
If we keep doing the same thing and expecting different results we are stupid.
Hi Kitty – I read that link as the Central Banks are smoothing things out and doing what they can but they cannot do it all. Cooperation and constructive work is also needed from Congress (in the case of the U.S.) to step up and pass jobs bills etc. to invest in growth. Is that how you read it?
Hi idosew and thanks for the link. Yes, I did see that interview. I find Lloyd Blankfein a very knowledgeable and prescient person. And I’d like to respond to your comment “I just don’t think we have a chance of saving ourselves.”
With that, I disagree. I have extraordinary faith in the ability to do the right thing, even if it is, as Winston Churchill said, after doing everything else. As an ex-banker, it is on that assumption that I accumulated my wealth, as well as that of my clients. If one looks at the situation on a global scale, which economy would be superior?
Yes, we delay, we fight, we argue endlessly. Democracy is very messy. But as it is with the intelligence of the American jury, so it is with the American people. History shows us that we have faced much worse and prevailed. And the best predictor of future behavior is past behavior.
We also have an example in front of us in real time to show, as the IMF Chairwoman recently said, the danger of draconian economic cuts in a fragile economy. In any event, thank you so much. It’s always a pleasure chatting with you.
I agree with your thoughts Kitty that Democracy is messy. I find more and more that the burden is on us to wade through a lot of rubbish to find the truth. I am aghast at the blatant lies that are told. Our political system is proving that if you shout a lie often, long enough and loud enough, a large percentage of the population will buy into it. I hear the lies repeated from people who when questioned, have not done fact checking at all – just accepted it, even if it is against their own interests to do so. I am often annoyed at how much fact checking I end up doing personally to determine what I should actually believe. I wish there was a law that any ads would have to be fact checked Before they are run. But, still, one cannot give up on the entire process because one’s own interests are involved. We cannot divorce ourselves and live in an alternate reality.
Ladies, I’d like to interject some thoughts which, to this point have not been discussed regarding the national debt. It will be titled “A Grown Up Girs’ Guide to the National Debt,” and I’ll post in later in the day. Extraordinary conversation. Thank each one of you.
Idosew – I would appreciate very much your sharing your logic in deciding to vote for Gary Johnson. One of my adult kids has opted not to vote because he thinks the economic war has already been lost. I’m having a hard time understanding that.
I have another thread running on VN about adult children and politics. My two adult children are extremists on both ends of the political spectrum. My daughter and her husband will be voting for Obama on grounds which they are personally unable to substantiate, and their minds are too closed to even consider opposing views. My son and his wife are opting NOT to vote (even for Gary Johnson or writing in Ron Paul) because they believe the war to save our nation is already lost. They have for the last decade been storing food and ammunition and basically believe that by not voting, Obama will win; the decline will occur quicker; and the quicker it occurs, the quicker it will be over. It’s hard to believe, but we are a loving and caring family who get along well when together. BUT…as I age and look to the REALITY of how my life might play out in either of THEIR scenarios. I have begun to lean toward reinvesting my assets in ways that I hope will be sufficient to remain independent. But financing my own care will use up what their Dad and I accumulated and there will be no inheritance. It’s not that I feel that I “owe” them or that they have any unique needs for which I might otherwise wish to contribute – but rather the whole idea of whether I should look to them for anything other than love and friendship. To some extent, I’m not as upset with my dauhter than my son – so I was wondering if you would tell me why casting a vote that (while voting your conscience which is conservative) will effectively support the liberal viewpoint. And, yes, I know that obvious thing to do would be to discuss this with my children – but, as I said, we have a great relationship – and I keep it that way by not passing judgement on their viewpoints. So, maybe, as an outsider, you can shed some light on this. Thanks – and if you want to take this conversation personal as in replying only to me, that’s OK. I’m not asking for other VNers, just for helping me understand my children. Thanks.
Sassy, my husband and I have 3 adult girls. We tried to teach them from very early on not to accept what others say without fact checking them. They were to remain respectful but questioning, even with us. To a great extent we succeeded, for which we are grateful. They are all involved with the system and offer good argumentation for their positions and we have a lively discussion. It is interesting, however, how they all come at it from a different angle. My husband and I are insanely persistent in digging for truth, whatever the subject. We still pursue it deeper and longer than our daughters. I think it is because we are older and have life’s lessons teaching us persistence. They eventually tire out and conclude what they are going to do and move forward. We just encourage them to not stop thinking about things with an open mind. I think a lot of people get sick of the morass of info that we have to wade through and check out of the system and try to create their own reality that they feel they can trust. They also get discouraged by the mess of Democracy and want something cleaner and tighter and more controlling. Age perhaps will teach them that freedom can be lost by giving in to the desire to drop out. Sometimes, as a parent, you just have to wait and encourage openness of mind. Hang in there and lean on your loving relationship.
I would never give any advice for others and their adult offspring.
My reason is the same as it has been since I voted for Reagan the first time and discovered the debt would rise much faster under him than under Carter.
It was the rise in debt that made me interested in just where the money is really spent. I have voted for 3rd party every time since.
There is rarely a true word coming from the two main parties. My social side has also become an issue in my voting. Even if Republican could cut spending I completely disagree with everything else.
Either of the two parties would be voting against what I think is best for America. Vote I do, even in the small local elections. It is one’s only say so in what happens without runnung for office yourself. My job requires that I keep up with local issues as well.
I will never be a quit and hide American. My 3 kids do vote with 3rd parties and main ones. They have no loyality but just keep hoping something will change. Thinking about what is going on and who is doing it what matters to them.
Thanks, maplav, for a wonderful perspective. I just didn’t foresee our encouraging open minds as resulting in the vastly diverse positions my children hold, not to mention that they are both vastly different from my own. We are all inundated with way too much propaganda and I do have more time to sift through it than those whose minds most also handle the demands of work and children. We do in fact yearn for a reality that we can trust. Their father was very principle centered and didn’t seem to have these dilemmas – or put up with viewpoints outside those principles. Since his death, I have been surprised to hear that they were “scared” of him. We did hold the kids to certain standards, but I now realize that my role was just backing up his principled view of right or wrong, black or white. While I have a clear sense of right and wrong, I also got the gene that tolerates some grey – and apparently passed it on. Now, I am frustrated with distrusting the viewpoints of those I love the most and who, for better or worse, will be in charge of my future. Talk about unintended consequences….
We just try to remind ourselves that quiet strength in an informed position, always with the words attached that we will be glad to consider your position and hope that you will keep an open mind to ours, or have you considered this factoid that I saw recently type of approach takes the fear out of discussions. I think young people tend to run away from someone who comes across as unequivocal and not open to discussion on positions. Just so they realize they can respectfully argue with you but with fact, not just emotion. Usually works with our kids, but not always
We learn from them as well. Not all one way. Facts Matter. Truth Matters. Logic, not emotion.
Well said. Thanks.
$9.8 Trillion of $14.3 Trillion U.S.Debt is owned by the American People and the U. S. Govt. Only $1.2 Trillion is owned by China. Japan, U.K.,Brazil,Hong Kong,Taiwan also own some debt. U.S.debt is considered a good debt to own. But China does not own the bulk of the debt as is often misrepresented to us by certain politicians. The U. S. is not going bankrupt. Some common sense adjustments will reduce the debt while investing in the growth of the economy will also reduce the debt. Austerity will make things worse, not better. Trickle down economics does NOT create jobs and make things better for the middle class and the poor, only the rich. Facts Matter. Big numbers must be understood in context.
I agree that austerity would make things worst.
But I am not happy the the Fed is printing money i.e. the US government owning our debt. That is printing money. Dollars are worth only a fraction of what they once were.
The down side to printing is that savers loose. We saved money that was worth more than it will be when we need it. There are few investments that will keep up with inflation and earn money too. As a little guy I fear inflation.
Well, cities and states are considering bankruptcy – so why not the federal government. Let’s see. How would that work? If we agreed to maintain and pay our debt to legitimate lenders (China and others) and bondholders and asked the mystical Federal Reserve (who was created by our government and charged with printing and distributing currency through member banks – but is apparently unaccountable to either the current government or citizenry) to forgive that debt, then we could balance the budget – and presumably start the process all over again. Don’t think for one minute that politicians haven’t thought of doing exactly that. But, there is that pesky unknown of exactly what all that printed paper money is actually worth. It has been advanced by some economists that defaulting on internal debt and paying legitimate external debt with newly printed (less valuable) dollars . may actually be a solution. And, it might be if our politicians learned their lesson and went back to the basics, but I don’t see that happening. Oddly enough, we “little guys” who struggle to even comprehend tiny segments of world economics are still able to see the situation for what it is – the most enormous Ponzi scheme ever. It’s just a matter of time and I really fear the coming hurt.
The trouble is that we don’t come close to taking in enough taxes or other means of income to cover what we are spending. Just defaulting and getting a new dollar would only be part of it. We would need to strongly cut spending since we could no longer borrow to pay for it.
Scary as it is we are moving closer to not having the control of our future. The countries in Europe have lost control of theirs. Spain may think the lower rates they have been getting will save them but time will tell.
We would be bit vain to think we would not act like the Greeks in hard times. One only needs to look back at newsreels from the early 30s to see that.
It is sort of a choice of inflation or anarchy.
CNBC is going to have a show about this subject @ 7 PM Eastern
New post titled “A Grown Up Girls’ Guide to the National Debt” is up. I’d love to hear all of your thoughts. And thanks to idosew for the heads up on the CNBC show this evening. As a Monday Night Football fan, I’m afraid I’ll have to catch it on a rerun, but I will be sure to do so.