The US debt (proper debate) - Page 14

On July 26 2011 05:59 Gaga wrote:



yeah .. if you start to explain monetary policies with apples you wont get anywhere. Printing money does a lot ... the US is doing it a lot right now. unfortunatly the FED who prints the money does lend it to the US state. It buys US Bonds.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

On July 26 2011 09:12 XenOmega wrote:
I have an account with US savings. However, the interests seem very low, and I'm scared its value continue to tank compared to Canadian$. Should I just close the account and convert all USD into CAD? Or should I keep it open, assuming that whatever happens, default or not, higher limit or not, I'm still better off with that account open, because eventually it will go higher?

On July 26 2011 08:39 jon arbuckle wrote:
I hope Ron Paul falls off a cliff while chasing a roadrunner and is never heard from again.

On July 26 2011 06:14 farvacola wrote:

You drastically underestimate the value of what corporations primarily, and the richest American citizens secondarily, owe the government in terms of ludicrous tax shelters, tax evasions, entitlements, and perhaps most importantly, reduced salaries/employee benefits and job opportunities. Yeah, I always find it strange how the right wing ignores the lost income that results after American businesses ship jobs overseas, in addition to the billions upon billions of dollars worth of additional burden on social services that are a result of either two things: companies cutting insurance policies and benefits, or cutting jobs and moving them elsewhere altogether.

On July 26 2011 09:25 xXFireandIceXx wrote:


Probably convert it. The USD is not going to get any stronger any time soon.

On July 26 2011 05:51 Reyis wrote:



every country in the world can print more money. but that wouldnt sort anything.


let me tell you, imagine;

1 apple is 5 euro/10 dollars right now in the global market and you have 1 euro only. so you go and print 4 more euros thinking you will have 5 euro in the end and finally manage to buy the apple which will sort your problems but unfortunately its not that simple and wont happen because lets say there are 100 euros around the world and 200 dolars around the world due to 1 apple price in euro/dollar. with printing 4 more euros there will be 104 euro and 200 dolars overall. which means there will be more euros in the market and less dollars, so it makes euro less valuable and dolar more valuable. at the end it turns back to 100 euro and 192 dollars in the values market and 1 apple will cost five-six point something euros/nine point something dollars because of that.

you have printed 4 more euros so you can have the 5 euro to buy the apple right? but it costs more than 5 euros now unfortunately so all you have done was pointless basicly. it only made you have more money in your own currency for short term spendings which is by the way is still not letting you buy anything new at all but in the long term you have also ruined everything because your currency lost some value. you lose either way.

well on the bright side, you can wipe your ass with that printed out 4 euros.

On July 26 2011 09:42 rapidash88 wrote:


Yes, good budget control is bad. SPEND SPEND SPEND MORE DEBT WILL MAKE BETTER ECONOMY

In all seriousness, everyone needs to realize that strong changes will need to be made in order to prevent us from going the same way as Greece (but worse of course).

Pull out of foreign wars such as Iraq or Afghanistan, which are huge money suckers.

Increase age limit to social security from 62 to 68. (62 is the earliest age you can begin collecting. Even a small change like this would save).

Cut pet projects and the hundreds of useless social projects that simply bloat the government.

And finally a constitutional amendment for a balanced budget so politicians on BOTH sides have to be sensible.

On July 26 2011 09:49 farvacola wrote:

You are ignoring the bulk of my post.

On July 26 2011 06:14 farvacola wrote:

You drastically underestimate the value of what corporations primarily, and the richest American citizens secondarily, owe the government in terms of ludicrous tax shelters, tax evasions, entitlements, and perhaps most importantly, reduced salaries/employee benefits and job opportunities. Yeah, I always find it strange how the right wing ignores the lost income that results after American businesses ship jobs overseas, in addition to the billions upon billions of dollars worth of additional burden on social services that are a result of either two things: companies cutting insurance policies and benefits, or cutting jobs and moving them elsewhere altogether.

The broken dynamic of the health insurance situation alone costs the government so much in terms of spending, and yet, the right wing insists that instead of addressing the actual issue of effectively "fixing" healthcare in America they simply want to cut everything, as though the problems then go away? Expect uncovered emergency room visits to skyrocket the moment medicare/medicaid gets cut, expect earlier deaths and increases in uncovered elderly healthcare costs as people are forced to work longer for less due to cuts in social security, and expect the gradual dissolution of the middle class, as the rich get richer and the poor get poorer due to weakened federal policies and influence.

This image is from a book by Joseph Stiglitz, an admittedly liberal economist, but does a good job showing just how much more we've spent in Iraq and Afghanistan than we would otherwise. You are substantially underestimating the expense involved in fighting two wars halfway around the world.

On July 26 2011 07:36 sunprince wrote:


The problem is that they are not politically in a position to do so, the same way that the Republicans cannot politically afford to offer meaningful revenue increases.

The simple fact of the matter is that the budget deficit can only be meaningfully closed by a combination of cutting the major entitlement programs (Medicare especially, but also Social Security/Medicaid) and raising taxes (closing corporate loopholes, taxing capital gains, top bracket increases). Unfortunately, both ends are poltical third rails, and the Democrats represent interests that would kick them out of office if they cut entitltements significantly, the same way that Republicans represent interests that kick them out if they raise taxes significantly.

So what both parties are effectively doing is engaging in a chest-thumping game, so that when the compromises are finally made, both sides can tell their constituents that they tried their best to fight for their interests and deserve to be re-elected despite technically losing ground. I have little faith in democracy in general, but I trust that politicians are looking out for their own self-interest. While this does mean that they won't let America slide into economic ruin, it also means that they will draw out the prevention process as long as possible in the pursuit of political gain.

He even repeated the lie about social security checks not going out if we default.

On July 26 2011 10:15 DeepElemBlues wrote:


Yeah it's a disgrace, the Executive Branch will get to pick and choose what bills to pay if the debt ceiling is not raised.

If a debt deal is not reached and social security and other entitlement checks do not go out, the responsibility for that will be Barack Obama's. There's no law that says you can't use the revenue you are still getting from taxes and other sources to pay entitlements. It's entirely up to him. He could say "Treasury, pay absolutely no other bills until those Social Security checks are cleared" and that's the way it would be, but instead he's fearmongering.

On July 26 2011 10:00 Caller wrote:
Since everybody else is talking out of their ass about things that they don't know about, I will too.

Here's a simple solution to fix the debt and the fucking economy and at the same time save bajillions on paper work.

a) all income, whether it be wage-based, capital gains, or whatever, is classified as one thing: income.
b) You are allowed to keep up to some amount (let's say 20%) of your income tax free provided it is invested or put into a bank or something along those lines.
c) the rest of your income is taxed at, let's say, 35% straight, unless you spend it. So your typical person will keep 20% of their income in the bank (whether it be 20% of 10k or 10 mil or whatever) and spend the rest of it on stuff. Stuff will be taxed at a much lower rate-10% or less, but because I'm bad at math and lazy I'm not going to say exactly how much.

Now let's assume that people value stuff as much as they value money. Which is to say they value whatever crap they buy at $100 to be worth as much as $100 to them. This would make sense as generally you buy crap that you need.
Firstly, because income = income, and isn't subdivided into god knows what, we can just straight up take GDP as income. So in the case of the US I'm being lazy and saying we have 10 trillion in GDP annually.
We'll also use a very, very basic formula to model growth in GDP-namely, GDP of next year = GDP of this year - government taxes + investment of this year.
And finally, government revenue is equal to, of course, government taxes. Which is, in turn, tax rate *GDP. We're assuming interest rate is 0, because, well, it is 0 right now, ain't it?

So because people have no interest in taking a 35% tax rate when they can get away with a 10% tax rate, they'll spend their money. All but 20% of it, because 0% tax rate is better than 10%. So investment will be 2 trillion. Taxes will be 10% of 80% of GDP, so 800 billion (By comparison, our current tax revenue is about 2 trillion.). Therefore, growth in the economy is 1.2 trillion. In other words, the economy is growing by 12% annually, compared to a recent high of 7%-and that was fueled by a bubble.

Let's see how long it takes for growth in the economy to reach equilibrium-namely, the 2 trillion in tax revenue vs. the 800 billion we have now. It'd require GDP to be 20 trillion, which at 12% growth gives us about... holy crap, 6 years. So with my crappy overly simplistic uneducated plan, we'd greatly simplify the tax system, slash income taxes by effectively two-thirds, increase consumer spending to 72% of GDP, have an equal tax revenue to what we have now, oh yeah, and double the size of the fucking economy. And all we have to do is borrow our way for the next 6 or 7 years (+ interest). Unless, of course, we simply cut military budgets, social programs, unemployment (which, with the economy growing as fast as 12%, shouldn't be an issue) and etc.

The upper class will be happy, because they get to potentially keep all of their money at a huge tax premium, while at the same time being able to buy whatever the fuck they want. The middle class will be happy, because they can pay college tuition with money that's being taxed at 10% instead of 30+payroll. And the lower class will be happy, because they spend all their money anyways on goods, and more importantly more jobs will be created. The only people that won't be happy will be foreign governments, the military, and politicians. And to be honest, they deserve to be cut loose.

See? I can come up with ways to sound smart by talking about the debt and economy despite not knowing what the fuck i'm talking about either.