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Old 07-12-2006, 05:42 PM   #16
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Quote:
Originally posted by Irvine511

ultimately, the current debt load isn't the problem, yet. the problem, as i pointed out, is what happens after 2010, when retiring Baby Boomers begin placing demands on Social Security and Medicare. so it's less about where we are -- and the ability to make chest-thumping, nyah-nyah statements -- but it's the trajectory we're on.
This is the frightning part. It scares the crap outa me. 77 million of them. Most with less than $50K saved for retirement.
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Old 07-12-2006, 06:19 PM   #17
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This is the frightning part. It scares the crap outa me. 77 million of them. Most with less than $50K saved for retirement.
Damn.
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Old 07-12-2006, 08:05 PM   #18
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It would seem that a government can pay attention to cultural issues when the economic issues are in fairly good order. Perhaps we overlook the enormous wealth of this country and the ability to absorb and bounce back from large deficits. The cynics had their day during the Reagan administration, and yet we bounced back from the “insurmountable” deficits. Our bounce back today is even stronger – considering a 30% reduction in a relatively short time span is considered.

Similar doomsday arguments have been made regarding Social Security. The scare tactics of potentially losing this entitlement has often been used as a political distraction to current economic realities. We continually project the bankruptcy of the Social Security system, which of course has always been a fraud as the government has never segregated SS funds from the general fund.
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Old 07-12-2006, 09:10 PM   #19
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Then throw in negative savings rates,



and record household debt service:

http://www.federalreserve.gov/releas...bt/default.htm

Good times.

Good times.
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Old 07-12-2006, 10:07 PM   #20
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Originally posted by AEON
Is this cynicism, nihilism, or skepticism?
It's called realism.
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Old 07-12-2006, 11:55 PM   #21
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Originally posted by nbcrusader
It would seem that a government can pay attention to cultural issues when the economic issues are in fairly good order. Perhaps we overlook the enormous wealth of this country and the ability to absorb and bounce back from large deficits. The cynics had their day during the Reagan administration, and yet we bounced back from the “insurmountable” deficits. Our bounce back today is even stronger – considering a 30% reduction in a relatively short time span is considered.

Similar doomsday arguments have been made regarding Social Security. The scare tactics of potentially losing this entitlement has often been used as a political distraction to current economic realities. We continually project the bankruptcy of the Social Security system, which of course has always been a fraud as the government has never segregated SS funds from the general fund.
Actually, we never bounced back from Reagan's debt. We've just accumulated on top of it since his era. Clinton made a small dent, but it's obviously easier to spend on the credit card than it is to come up with the money to pay it back.

However, I would agree that doomsday arguments are premature, and we should be looking for better arguments and solutions--as I try to do--rather than cry that it's the end of the world.

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Old 07-13-2006, 03:49 AM   #22
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The deficit goes down and all so many people have to say "well the deficit is sttill huge!!"

I guess Bush hate is very dominant here.
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Old 07-13-2006, 08:30 AM   #23
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So....about that deficit...

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Old 07-13-2006, 10:04 AM   #24
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Quote:
Originally posted by melon
However, I would agree that doomsday arguments are premature, and we should be looking for better arguments and solutions--as I try to do--rather than cry that it's the end of the world.


oh, i agree. i don't think its the end of the world, but i think we are on a bad path and i can't think that there's some sort of master plan here -- like, we'll have to cut HUD or the Department of Education or some other program once "the beast" is effectively "starved."

my objections were more to the fact that critics were somehow "dumbfounded" or the assertion that lower taxes is the key to all economic problems, as well as to Bush's taunting, sneering press conference where he effectively said that he thought he was going to get a D+ but instead pulled a solid gentleman's C.
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Old 07-14-2006, 08:16 AM   #25
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OK, all you wordsmiths... what is the correct phonetic spelling for a derisive snort? Bush has done this bofore, forcast horrible numbers so that when they turn up being just bad it doesn't seem as awful. What would the numbers be like if he factored in the war?
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Old 07-14-2006, 09:45 AM   #26
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Re: Deficit Down by 30%

Quote:
Originally posted by nbcrusader
Tax cuts spur economic growth. Critics dumbfounded.
While consumer spending due to tax cuts may have held strong and contributed to reducing the deficit, I'm guessing personal debt levels have been spiking even higher...while interest rates and gas prices are going up...and wages are stagnant...

This is not a pretty picture...it's a ticking time bomb.
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Old 07-14-2006, 12:07 PM   #27
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Originally posted by melon
However, I would agree that doomsday arguments are premature, and we should be looking for better arguments and solutions--as I try to do--
The only thing fueling the economy right now is rising consumer debt. The only way out it seems is a recession that hopefully doesn't burst any bubbles.
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Old 07-15-2006, 10:13 PM   #28
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Quote:
US 'could be going bankrupt'

By Edmund Conway, Economics Editor
(Filed: 14/07/2006)

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.



Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.


The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.


Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

Paul Ashworth, of Capital Economics, was more sanguine about the coming retirement of the Baby Boomer generation. "For a start, the expected deterioration in the Federal budget owes more to rising per capita spending on health care than to changing demographics," he said.

"This can be contained if the political will is there. Similarly, the expected increase in social security spending can be controlled by reducing the growth rate of benefits. Expecting a fix now is probably asking too much of short-sighted politicians who have no incentives to do so. But a fix, or at least a succession of patches, will come when the problem becomes more pressing."
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Old 07-16-2006, 03:50 AM   #29
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Am I mistaken, or does the actual debt of something like 290 billions directly reflect the cost of the Iraq war?

Does that mean the country could be debt-free, if it wasn´t for that dirty ass Saddam? It´s his fault. Just because you wanted to get rid of some WMDs.

Boo-fucking-hoo.
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Old 07-16-2006, 12:41 PM   #30
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Quote:
Originally posted by Irvine511
my objections were more to the fact that critics were somehow "dumbfounded" or the assertion that lower taxes is the key to all economic problems, as well as to Bush's taunting, sneering press conference where he effectively said that he thought he was going to get a D+ but instead pulled a solid gentleman's C.
I agree with this. Bush thinks cutting taxes will solve all of our economic problems and I don't.
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