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On June 24 2011 05:01 Jumperer wrote:Show nested quote +On June 24 2011 04:57 dybydx wrote:
i usually like the Democrats but i have to agree with the Republicans on this one. American doesn't have a revenue problem. it has a spending problem.
US tax total revenue has been fairly stable in all these years. in addition, its a lot easier to reduce spending than raising revenue. raising taxes on a ditto economy won't work because ppl don't have the income to pay it. cutting spending, while it hurts the economy too, it can be justified as living within your means. wrong, US taxes rate is at an all-time low especially at the top of the bracket. the rich gets richer while the poor get poorer.
The thing to consider with that last sentence is that the rich get richer on the continued employment of the poor. You don't get a good return on existing money by just throwing it in the bank or sitting on it. Those kinds of rates barely, if at all, keep up with inflation, so you're not gaining anything. The rich actively invest their money back into the economy, which produces more wealth in one of a hundred different ways (bonds, stocks, entrepreneurial efforts and so on and so forth) which they eventually collect on at a later date. Meanwhile, all of these have some level of risk associated with them. Bigger risk, bigger return. All of these investments pumped back into the economy keep us all employed.
I don't necessarily buy that government spending is entirely bad, either. If it's spent domestically, then its little to no different than the rich reinvesting their money back into the economy. If tax revenues increase, I would have to wonder where all of that extra money would be going. I sincerely doubt it would be as beneficial to the economy as it would to leave things as they are now.
The two fundamental things that I think need to be fixed ASA-fucking-P is
A) The blatant cheating of the tax system - that some people and corporations are literally getting away with murder by cheating on their taxes is just fucking us all over
B) Make government more efficient. I don't feel as though I should pay more in taxes to an organization that is doing a horrible job of efficiently using the money its already being given. If the government can't prove they can responsibly spend the money they have now, why should I feel compelled to give them more?
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On June 24 2011 05:10 Kaitlin wrote:Show nested quote +On June 24 2011 05:01 Jumperer wrote:On June 24 2011 04:57 dybydx wrote:
i usually like the Democrats but i have to agree with the Republicans on this one. American doesn't have a revenue problem. it has a spending problem.
US tax total revenue has been fairly stable in all these years. in addition, its a lot easier to reduce spending than raising revenue. raising taxes on a ditto economy won't work because ppl don't have the income to pay it. cutting spending, while it hurts the economy too, it can be justified as living within your means. wrong, US taxes rate is at an all-time low especially at the top of the bracket. the rich gets richer while the poor get poorer. wrong, 28% Top Federal Income Tax Rate under Reagan's 1986 TRA 35% Top Federal Income Tax Rate Currently Keep in mind, Obama wanted it even higher, but went along with Republicans to extend Bush's policy.
Previous poster was wrong about the top bracket rates being historically low but overall they are pretty damn low. Lowest bracket is at 10% compared to Reagan's 15%. Corporations are smarter at avoiding taxes though - see GE's ability to pay zero dollars on its US earnings.
I'm not quite sure how half the country is convinced that taxes are at a crushingly high rate. The financial sector has been reporting excellent profits since recovering from 2008.
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I read through all of the posts here and I didn't see a mention of politicians too weak to ACTUALLY change anything because of fear of not getting re-elected. I agree with alot of the posters above in the sense that the problem is bad, but not to bad to get out of. The IMF are essentially bluffing, but on the flip side of the coin are warning us as well. The dollar WILL NOT loose its place as the reserve currency. The reasoning is simple. What other currency is anywhere near stable enough to be adopted. NONE the Euro was the hope of many countries. The Euro was designed to be the new reserve and be adopted by many different countries, but as we are seeing now, it is just as unstable as other emerging currencies. I know I am late to the party and others have probably said this but I think it warrants another rant 
The real problem is our elected officials. They are weak and are too scared to enact REAL policies that change things. Too many politicians curry favor by adopting policies and stances based solely on their constituents, and they have no idea how out of touch they are with the rest of Americans. The receive HIGH salaries, Fantastic benefits and a term that can last indefinitely. Take for instance our newest President. What was his very first act? He bailed out companies left and right, and spent 800 BILLION dollars. He did this because all of those companies one way or another paid into his election campaign. Alot of those companies STILL failed and are failing now. Waste of money. I will not mention the past presidents who also fucked things up because we can only look forward and not blame the past. It seems that no one has the spine to stand up and say YES we are cutting medicare, medicaid and Social Security. The president is a weak individual and he has shown us this time and time again. I wanted him to be different and change things up but the only thing he has done is make things worse by spending like there is no tomorrow and hyping partisanship until there is a HUGE divide between democrat and republican. Unless we can elect officials who care more about America than their own salaries then we will continue to fester in this mess we have put ourselves in.
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On June 24 2011 05:31 MaliciousMirth wrote:I read through all of the posts here and I didn't see a mention of politicians too weak to ACTUALLY change anything because of fear of not getting re-elected. I agree with alot of the posters above in the sense that the problem is bad, but not to bad to get out of. The IMF are essentially bluffing, but on the flip side of the coin are warning us as well. The dollar WILL NOT loose its place as the reserve currency. The reasoning is simple. What other currency is anywhere near stable enough to be adopted. NONE the Euro was the hope of many countries. The Euro was designed to be the new reserve and be adopted by many different countries, but as we are seeing now, it is just as unstable as other emerging currencies. I know I am late to the party and others have probably said this but I think it warrants another rant The real problem is our elected officials. They are weak and are too scared to enact REAL policies that change things. Too many politicians curry favor by adopting policies and stances based solely on their constituents, and they have no idea how out of touch they are with the rest of Americans. The receive HIGH salaries, Fantastic benefits and a term that can last indefinitely. Take for instance our newest President. What was his very first act? He bailed out companies left and right, and spent 800 BILLION dollars. He did this because all of those companies one way or another paid into his election campaign. Alot of those companies STILL failed and are failing now. Waste of money. I will not mention the past presidents who also fucked things up because we can only look forward and not blame the past. It seems that no one has the spine to stand up and say YES we are cutting medicare, medicaid and Social Security. The president is a weak individual and he has shown us this time and time again. I wanted him to be different and change things up but the only thing he has done is make things worse by spending like there is no tomorrow and hyping partisanship until there is a HUGE divide between democrat and republican. Unless we can elect officials who care more about America than their own salaries then we will continue to fester in this mess we have put ourselves in.
I agree with some of the spirit of your post, a lot of politicians are in a state of permanent campaigning for themselves or their party. But you're wrong on some of the specifics. Their salaries are generally far below what they could be earning in the private sector. Presidents and Governors have term limits. The 800 Billion bailouts were paid back almost completely and were genuinely effective at getting cash flowing in the economy, far from a waste of money.
"Bipartisan" is such an empty buzzword at this point that you can throw at your opponent when they don't agree with you.
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so.. why are people stupid for investing in gold?
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I don't consider the American debt to be as crushing a problem as is commonly conceived. While America has a high federal debt to GDP ratio, which is costing them something like 5% of their budget to service. Americans still have some of the lowest taxes in the world. The American government aside from its military is actually quite lean combined with the fact that most Americans are very concerned with the amount of money being wasted, it would be difficult for the government to increase budgets. All Americans need is a reasonable level of taxation for the services their government provides and their debt problems will be solved.
This is contrast to the problems faced by the EU, where their populations tax burden is already too heavy to increase without harming the economy, creating the need for austerity measures.
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On June 24 2011 05:36 Laerties wrote:
we have too much debt
You have just won this thread. Congratulations.
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The solution is to get rid of several of the thousands of useless organizations the government loves to set up, reduce the benefits of government officials who get payed WAY too much.
Also, stop giving other countries aid, we got enough problems, yet every time some other country has some minor problems, the government throws billions upon billions into them, and they still hate us, screw em! Enough of being the world's babysitter, time for the UN to pick things up.
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I agree with some of the spirit of your post, a lot of politicians are in a state of permanent campaigning for themselves or their party. But you're wrong on some of the specifics. Their salaries are generally far below what they could be earning in the private sector. Presidents and Governors have term limits. The 800 Billion bailouts were paid back almost completely and were genuinely effective at getting cash flowing in the economy, far from a waste of money.
"Bipartisan" is such an empty buzzword at this point that you can throw at your opponent when they don't agree with you.
Very well reasoned response thank you for not going the flame war style.....I was referring to the auto industries, freddie mac, etc... but mostly the housing bailouts that did nothing!! It just sends me into RAGE everytime one of these stupid politicians or presidents campaign instead of lead....We are in a world of hurt if that doesn't change!
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What will not be reported in the official debt numbers, however, is that the United States federal government uses cash-basis, rather accrual-basis accounting, which is in violation of standard Generally Accepted Accounting Principles (GAAP), and utilizes a series of accounting labeling tricks which underscore the actual debt owed. In particular, "liabilities" are labeled transfer payments and are not considered a form of the public debt, though they do represent obligations which must be paid at some time in the future. How disingenuous it is to call these "transfer payments" can be seen in the fact that the Social Security payments have historically been used as a general slush fund for spending in the legislature and in fact is NOT transferred to future generations.
This statement is a little fallacious. You previously use the 97.3% of GDP debt number, which includes the liabilities, then say that social security is not included as a slush fund. The number without the liabilities is 62% of gdp. Source: http://en.wikipedia.org/wiki/United_States_public_debt
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On June 24 2011 05:01 Jumperer wrote:Show nested quote +On June 24 2011 04:57 dybydx wrote:
i usually like the Democrats but i have to agree with the Republicans on this one. American doesn't have a revenue problem. it has a spending problem.
US tax total revenue has been fairly stable in all these years. in addition, its a lot easier to reduce spending than raising revenue. raising taxes on a ditto economy won't work because ppl don't have the income to pay it. cutting spending, while it hurts the economy too, it can be justified as living within your means. wrong, US taxes rate is at an all-time low especially at the top of the bracket. the rich gets richer while the poor get poorer.
for the last few decades, annual tax revenue is approx 20% of US GDP.
the poor is indeed getting poorer but the tax system shouldn't be blamed for this. the poor class is not paying more tax than they receive back in benefits. the reason they remain so poor is because they lack education to get better jobs.
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I'm curious, isn't this issue talked about in the media? A while back, before the "greece crisis", there where a lot of items about this topic in the media. the vibe I get here is that its pretty much beeing ignored in the US media, or am I wrong?
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On June 24 2011 08:29 InvalidID wrote:Show nested quote +
What will not be reported in the official debt numbers, however, is that the United States federal government uses cash-basis, rather accrual-basis accounting, which is in violation of standard Generally Accepted Accounting Principles (GAAP), and utilizes a series of accounting labeling tricks which underscore the actual debt owed. In particular, "liabilities" are labeled transfer payments and are not considered a form of the public debt, though they do represent obligations which must be paid at some time in the future. How disingenuous it is to call these "transfer payments" can be seen in the fact that the Social Security payments have historically been used as a general slush fund for spending in the legislature and in fact is NOT transferred to future generations.
This statement is a little fallacious. You previously use the 97.3% of GDP debt number, which includes the liabilities, then say that social security is not included as a slush fund. The number without the liabilities is 62% of gdp. Source: http://en.wikipedia.org/wiki/United_States_public_debt
It's funny you say my facts are fallacious and then link me to a page which very clearly states what I originally said...
![[image loading]](http://i.imgur.com/iOd9J.png)
"The government is committed under current law to mandatory payments for Social Security. However, these amounts are excluded from the national debt computation."
Let me clarify the terms for anyone who is confused....
Debt Held by the Public: all federal securities held by institutions or individuals outside the United States Government;
Intragovernmental Holdings: U.S. Treasury securities held in accounts which are administered by the United States Government, such as the OASI Trust fund administered by the Social Security Administration; and
Total Public Debt Outstanding: the sum of the above components.
The category of "Intragovernmental Holdings" does not include the obligations owed to future recipients of Social Security, which is what is meant by "unfunded liabilities." It refers to the debt that has already been accumulated when failing to meet current and past Social Security obligations. In other words, it is a government IOU to itself, which allows them to pay for Social Security obligations as they arise, but do not account for the total liabilities owed.
On June 24 2011 10:22 Madoga wrote:
I'm curious, isn't this issue talked about in the media? A while back, before the "greece crisis", there where a lot of items about this topic in the media. the vibe I get here is that its pretty much beeing ignored in the US media, or am I wrong?
I would say this isn't being ignored by the media. They have reported on this mounting problem fairly often. It is being ignored by the American people. I'm sure many Americans don't really care about it, they are apathetic. Then once the government realizes they actually need to do something before all hell breaks loose, that's when the people start protesting like they are in Greece. People don't do much about government overspending or waste or corruption until they start seeing it hit them in their wallets.
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On June 24 2011 10:22 Madoga wrote:
I'm curious, isn't this issue talked about in the media? A while back, before the "greece crisis", there where a lot of items about this topic in the media. the vibe I get here is that its pretty much beeing ignored in the US media, or am I wrong?
It isn't completely ignored, but it's downplayed. It's not as prevalent as you would think, given the circumstances.
I'm surprised more people aren't critical of the Federal Reserve. Greenspan's deregulation (e.g. unwillingness to regulate derivatives) greatly contributed to the 08 crisis. Furthermore by Bernanke's own admission the Federal Reserve was responsible (at least in part) for the great depression. I'm not an econ major but it seems to me the Fed is rather incompetent.
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On June 24 2011 05:20 Bibdy wrote:I don't necessarily buy that government spending is entirely bad, either. If it's spent domestically, then its little to no different than the rich reinvesting their money back into the economy.
I just wanted to pick on this little part here:
The important thing to consider is that the money spent by the government would otherwise be spent by private citizens/businesses.
One metaphor I've used before to explain this to my relatives:
Imagine you need groceries. Now there's two scenarios. First, you can go and spend $50 to get all of the things you need. Second, you can give me that $50 and I'll go get the things that I think you need.
If I buy your groceries, I'll inevitably buy stuff that you don't need, meaning you end up with value less-than-or-equal-to the original $50. In the absolute best case, the second scenario is the same as the first.
Obviously this is just a metaphor, but the point is that when private businesses spend money on investments, they make sure there is a huge amount of value in what they're investing in. When the government spends money, they don't care what they get back. They just want a giant project that sounds nice. In both cases, a whole bunch of money gets spent and goes to the hands of the people on the ground working to make the giant projects happen. In only one of them, however, does the giant project ever actually return profit.
Perfect example is the high speed rail in my home state CA. At best, it's going to be billions of dollars spent and take away the tiniest fraction of traffic from southwest airlines. At worst (and most probably) it's going to end up being a giant money sink just like amtrak/metrolink/bart. If instead these billions of dollars were in the hands of people wanting to start businesses and invest in new enterprise, we would know that every single dollar spent is going to be well thought through.
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It really scares me when people think all spending is equal. They claim that government spending is exactly the same thing as business spending because the money just gets circulated through the economy.
Look at it this way... You can pay people to dig a hole and fill it back up, or you can pay people to produce computers. It is not the amount of money that matters, but the amount of efficiently produced goods. Businesses have huge incentives to be as efficient as possible and never squander resources. Governments have no such incentives and have a reputation for waste and inefficiency.
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Its obviously not exactly the same, but it does help in times of crisis like in 2008. When the shit hits the fan, private investors have a tendency to turtle up and pull money out of everything. People then turn to government to spend like assholes to keep things afloat. Lo and behold, once things start to fix themselves once more, and private investors return to the party, people complain that the government spent too much.
It's a cycle that repeats itself over and over and it just gets nauseating.
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On June 25 2011 02:47 Bibdy wrote:
Its obviously not exactly the same, but it does help in times of crisis like in 2008. When the shit hits the fan, private investors have a tendency to turtle up and pull money out of everything. People then turn to government to spend like assholes to keep things afloat. Lo and behold, once things start to fix themselves once more, and private investors return to the party, people complain that the government spent too much.
It's a cycle that repeats itself over and over and it just gets nauseating.
Except you have to realize that recessions don't happen for no reason. They have a very specific cause: overinvestment and malinvestment. And the primary factor driving overinvestment and malinvestment is the policies of easy credit, aggressive fractional reserve banking, and artificially low interest rates set by the federal reserve.
A recession is a CORRECTION. This is something that needs to be understood clearly. If someone stays awake way too late and then feels very tired, I wouldn't recommend that you go over and give them a shot of caffeine and some meth. That's essentially what the governments keynesian economic policies entail. They think they can perpetually create artificial growth financed with debt and there will never be any consequences.
Give that tired man enough caffeine and meth and eventually he's gonna collapse from exhaustion or die. "Spend spend spend!"
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I'd just like to point out that the OP is clearly biased. The OP state that the US Federal debt does not follow general accounting rules, which is correct, and proceed to talk about how future liabilities such as SS and MC are not included INCREASING the size of the real debt. Great. However, the US debt also does not include assets of the US government including land, public buildings, etc. These assets would LOWER the amount of real debt. The OP simply doesn't mention this.
This post is not meant to be political and just pointing out bias in the OP.
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EPT
