Discussion: The Economy, Fiscal Cliff, National Debt, And Other Financial Issues III

[enterthemadness]

So wait, wiegeabo, does this mean Gary Johnson and Ron Paul are ignorant on how the debt ceiling works? Or is it just spending cuts we need to make to pay off debt??

Thanks.

And if lets say, people only get money from military retirement and or post office retirement, would a govt default or govt shut down cease payments??

[Marvolo]

Originally Posted by enterthemadness

So wait, wiegeabo, does this mean Gary Johnson and Ron Paul are ignorant on how the debt ceiling works? Or is it just spending cuts we need to make to pay off debt??

Thanks.

And if lets say, people only get money from military retirement and or post office retirement, would a govt default or govt shut down cease payments??

I read an article last week that said roughly 40% of the government would be shutdown. We can only afford to pay the debt of 60% of our current government. Which 40% gets shutdown would be chosen by congress.

[enterthemadness]

Originally Posted by Marvolo

I read an article last week that said roughly 40% of the government would be shutdown. We can only afford to pay the debt of 60% of our current government. Which 40% gets shutdown would be chosen by congress.

Wouldn't a govt shut down not only tank the stock market, and our credit rating, but also send one of the major parties into the grave? I mean, on paper, why would any future voter support a party that forced a shut down? It's insanity.

[Marvolo]

Originally Posted by enterthemadness

Wouldn't a govt shut down not only tank the stock market, and our credit rating, but also send one of the major parties into the grave? I mean, on paper, why would any future voter support a party that forced a shut down? It's insanity.

Oh its party suicide no doubt but there are many in congress who dont give a flying **** or who are in complete denial.

There are more and more civilian s saying a non violent revolution is coming because congress approval is 14%, we are in economic upheaval, and we are exiting the Industrial Age and entering the Tech Workforce Age. Things and society are very different today. We think and expect different things and our government isnt going with the times but are instead fighting and holding on to the old ways. If things stay on this course you can rest assured that both parties will shift greatly or will collapse and others will come into existence.

[enterthemadness]

Originally Posted by Marvolo

Oh its party suicide no doubt but there are many in congress who dont give a flying **** or who are in complete denial.

There are more and more civilian s saying a non violent revolution is coming because congress approval is 14%, we are in economic upheaval, and we are exiting the Industrial Age and entering the Tech Workforce Age. Things and society are very different today. We think and expect different things and our government isnt going with the times but are instead fighting and holding on to the old ways. If things stay on this course you can rest assured that both parties will shift greatly or will collapse and others will come into existence.

LIBERTARIAN PARTY FTW If you didn't guess it, I'm a registered Libertarian btw. Although if I became a dues paying LP Member, like I really want to, I'll worry at night about ****ery from Roger Stone and Glenn Beck.

[wiegeabo]

Originally Posted by enterthemadness

Wouldn't a govt shut down not only tank the stock market, and our credit rating, but also send one of the major parties into the grave? I mean, on paper, why would any future voter support a party that forced a shut down? It's insanity.

The government's been shutdown before, usually not for very long. The stock market doesn't like it, but it's never hurt our credit rating.

Of course, our credit rating hadn't already been dropped before the previous shutdowns.

[wiegeabo]

Originally Posted by enterthemadness

So wait, wiegeabo, does this mean Gary Johnson and Ron Paul are ignorant on how the debt ceiling works? Or is it just spending cuts we need to make to pay off debt??

Thanks.

And if lets say, people only get money from military retirement and or post office retirement, would a govt default or govt shut down cease payments??

The debt ceiling has nothing to do with spending cuts. The debt ceiling just gives the Treasury more money to pay the debt that's already been spent.

It would sort of be like trying to stop paying an auto loan on a car you bought last year. Doesn't matter how much or little money you have this year, you still have to pay that loan or bad things will happen. (It's hard to come up with a great analogy because it's such an unusual thing.)


If Johnson and Paul are saying we shouldn't raise the ceiling, they're wrong. At the very least, passing an increase should be little more than a formality. At most, it should be a strong indicator used to judge Congress on spending habits based on how often the limit needs to be raised, and by how much.

[George Wendt]

Originally Posted by enterthemadness

LIBERTARIAN PARTY FTW If you didn't guess it, I'm a registered Libertarian btw. Although if I became a dues paying LP Member, like I really want to, I'll worry at night about ****ery from Roger Stone and Glenn Beck.

[Destructus86]

Originally Posted by wiegeabo

The debt ceiling has nothing to do with spending cuts. The debt ceiling just gives the Treasury more money to pay the debt that's already been spent.

It would sort of be like trying to stop paying an auto loan on a car you bought last year. Doesn't matter how much or little money you have this year, you still have to pay that loan or bad things will happen. (It's hard to come up with a great analogy because it's such an unusual thing.)


If Johnson and Paul are saying we shouldn't raise the ceiling, they're wrong. At the very least, passing an increase should be little more than a formality. At most, it should be a strong indicator used to judge Congress on spending habits based on how often the limit needs to be raised, and by how much.

So, it's like americans and visa cards. We pay the minimum payment on the visa for things we bought that we didn't have the money for...and then right after we make the min payment we bought more stuff.

[wiegeabo]

sorta kinda but still not really

It's a really weird thing. There's actually some debate about the constitutionality of the debt ceiling itself.

[enterthemadness]

Originally Posted by wiegeabo

The debt ceiling has nothing to do with spending cuts. The debt ceiling just gives the Treasury more money to pay the debt that's already been spent.

It would sort of be like trying to stop paying an auto loan on a car you bought last year. Doesn't matter how much or little money you have this year, you still have to pay that loan or bad things will happen. (It's hard to come up with a great analogy because it's such an unusual thing.)


If Johnson and Paul are saying we shouldn't raise the ceiling, they're wrong. At the very least, passing an increase should be little more than a formality. At most, it should be a strong indicator used to judge Congress on spending habits based on how often the limit needs to be raised, and by how much.

I believe Johnson says we shouldn't be raising the debt ceiling and we need drastic cuts in spending. Which, shocker, I agree with still. Although I can see how a partial debt ceiling raise with spending cuts is workable.

[wiegeabo]

You and he aren't getting it. Even if we stopped spending today, we'd still need to raise the ceiling to pay for the old debt since there wouldn't be enough 2013 revenue coming in before the deadline.

The debt ceiling shouldn't be used directly as a political tool. That's a game of chicken that can't be won.

[enterthemadness]

Originally Posted by wiegeabo

You and he aren't getting it. Even if we stopped spending today, we'd still need to raise the ceiling to pay for the old debt since there wouldn't be enough 2013 revenue coming in before the deadline.

The debt ceiling shouldn't be used directly as a political tool. That's a game of chicken that can't be won.

So, a partial raise then? Cause in theory, raising the debt ceiling doesn't mean we have to make spending cuts. We need drastic spending cuts.

[wiegeabo]

What does a partial raise mean? You either raise it or you don't.

And, yeah, raising the debt ceiling doesn't mean having to make spending cuts. Nor should it, because it doesn't have anything to do with new spending. Nor should it be used as a political ploy to force new cuts.

Nothing is going to force new, real, cuts until politicians are ready to do so. But they don't want to do so, because the people don't want to talk about any kind of spending cut other than military. And saying things along the lines of "SPEND LESS MONEY, but don't cut funding for any programs we're using."

Wait, what?!


People need to realize that we're going to have to have serious spending cuts across the board. Not just from one source. There are people who say cut military spending and you fix everything. That's wrong. Yes, military spending needs to be cut, and drastically (we have 57 bases in Germany alone that are leftovers from when we thought the Commies were going to attack; do we really need that many now?). But even you we cut military spending to $0, we'd still be a few hundred billion dollars short every year.

I believe we can cut at least $200 billion from the non-military budget just by improvements in government efficiency and reduction of redundancies. Without any sacrifice to services provided.

Sadly, that, combined with slashing the military in half, would still only get us about halfway to a balanced budget. And we've pretty much maxed out tax revenues from straight increases based on how many big name stores I saw closing with increased taxes paying a big part in their closures.

And yet, any politician who dares try to lower corporate tax rates, even for just small businesses who employ a huge percentage of lower and middle class workers, will likely get chewed up by their constituents who don't understand that decreased tax rates can lead to increased tax revenues.

[Marvolo]

We could also get rid of a lot of bureaucracy in the government. There is entirely too much fat in government and redundant employees.

[wiegeabo]

That's where I think we could save at least $200 billion. And I would not be surprised in the least if it was a lot more than that.

Hell, there are whole programs/departments that could be either combined, or eliminated out right.

[Kelly]

Originally Posted by enterthemadness

So wait, wiegeabo, does this mean Gary Johnson and Ron Paul are ignorant on how the debt ceiling works? Or is it just spending cuts we need to make to pay off debt??

Thanks.

And if lets say, people only get money from military retirement and or post office retirement, would a govt default or govt shut down cease payments??

Ron Paul is not ignorant on ANYTHING that has to do with the Fed and the Economy....the man is a walking Encyclopedia on that stuff.

[enterthemadness]

Originally Posted by wiegeabo

What does a partial raise mean? You either raise it or you don't.

And, yeah, raising the debt ceiling doesn't mean having to make spending cuts. Nor should it, because it doesn't have anything to do with new spending. Nor should it be used as a political ploy to force new cuts.

Nothing is going to force new, real, cuts until politicians are ready to do so. But they don't want to do so, because the people don't want to talk about any kind of spending cut other than military. And saying things along the lines of "SPEND LESS MONEY, but don't cut funding for any programs we're using."

Wait, what?!


People need to realize that we're going to have to have serious spending cuts across the board. Not just from one source. There are people who say cut military spending and you fix everything. That's wrong. Yes, military spending needs to be cut, and drastically (we have 57 bases in Germany alone that are leftovers from when we thought the Commies were going to attack; do we really need that many now?). But even you we cut military spending to $0, we'd still be a few hundred billion dollars short every year.

I believe we can cut at least $200 billion from the non-military budget just by improvements in government efficiency and reduction of redundancies. Without any sacrifice to services provided.

Sadly, that, combined with slashing the military in half, would still only get us about halfway to a balanced budget. And we've pretty much maxed out tax revenues from straight increases based on how many big name stores I saw closing with increased taxes paying a big part in their closures.

And yet, any politician who dares try to lower corporate tax rates, even for just small businesses who employ a huge percentage of lower and middle class workers, will likely get chewed up by their constituents who don't understand that decreased tax rates can lead to increased tax revenues.

I didn't read all of this, but what I read, about half of it, was good. Johnson said we need cuts to military, medicare and medicaid. One thing he would not touch is veteran benefits. Social Security isn't a big problem at the moment.

I know one thing I would consider doing, might get flack from it, and it may be in the Constitution...but do we need a Postal Service? I have family in it...and I just roll my eyes. Badly ran..defaulting on billions...let Fed Ex or UPS take over. Let the Private Sector run it. That or reform the Postal Service, cause it's losing billions and that's not a good thing for business.

Originally Posted by Kelly

Ron Paul is not ignorant on ANYTHING that has to do with the Fed and the Economy....the man is a walking Encyclopedia on that stuff.

Well, my memory is ******, sue me. Also, I finished chapter 2 of End the Fed this morning. Pretty good book... sadly, might be one of those books that I may have to read twice to get the full message/info. I like Gary Johnson's book more. Also got another Ron Paul book to read, and a Fair Tax book as well.

[enterthemadness]

Originally Posted by wiegeabo

That's where I think we could save at least $200 billion. And I would not be surprised in the least if it was a lot more than that.

Hell, there are whole programs/departments that could be either combined, or eliminated out right.

Homeland ****ing Security.

We have the FBI, CIA, and NSA...do we really need a Homeland Security? And no, I'm not updated o what all four really do...I know FBI does domestic stuff, CIA has spies, but probably not as cool and hip as dat Bond, well...that Mike guy who is on Red Eye is cool and hip, and Micheal Weston, but the latter is a tv character...anyway, I don't think we need 4 departments. 3 is fine.

[Marvolo]

Originally Posted by enterthemadness

Homeland ****ing Security.

We have the FBI, CIA, and NSA...do we really need a Homeland Security? And no, I'm not updated o what all four really do...I know FBI does domestic stuff, CIA has spies, but probably not as cool and hip as dat Bond, well...that Mike guy who is on Red Eye is cool and hip, and Micheal Weston, but the latter is a tv character...anyway, I don't think we need 4 departments. 3 is fine.

FBI handled domestic affairs.

CIA handles international affairs.

NSA is a cryptologic intelligence agency of the United States Department of Defense responsible for the collection and analysis of foreign communications and foreign signals intelligence, as well as protecting U.S. government communications and information systems, which involves information security and cryptanalysis/cryptography.

Homeland security is an umbrella term for security efforts to protect states against terrorist activity. It is not an organization. This is the mission statement of the three organizations listed above. Specifically, is a concerted national effort to prevent terrorist attacks within the U.S., reduce United State’s vulnerability to terrorism, and minimize the damage and recover from attacks that do occur.

So in point of fact we only have three departments not four and they all serve a very valuable purpose. Well except maybe the CIA which is treason and espionage wrapped in a pretty package.

[enterthemadness]

Originally Posted by Marvolo

FBI handled domestic affairs.

CIA handles international affairs.

NSA is a cryptologic intelligence agency of the United States Department of Defense responsible for the collection and analysis of foreign communications and foreign signals intelligence, as well as protecting U.S. government communications and information systems, which involves information security and cryptanalysis/cryptography.

Homeland security is an umbrella term for security efforts to protect states against terrorist activity. It is not an organization. This is the mission statement of the three organizations listed above. Specifically, is a concerted national effort to prevent terrorist attacks within the U.S., reduce United State’s vulnerability to terrorism, and minimize the damage and recover from attacks that do occur.

So in point of fact we only have three departments not four and they all serve a very valuable purpose. Well except maybe the CIA which is treason and espionage wrapped in a pretty package.

Well, the fact is, Homeland Security has only been around since 2002. And I feel it's better if we give bit more power to FBI, CIA, NSA. And wasn't Homeland Security rushed? We get attacked on 9/11, so about 5 months later we get Homeland Security along with the Patriot Act. Not a fan of either one.

[wiegeabo]

Homeland is an unnecessary redundancy that's just a drain on money and resources and creates a bureaucratic and jurisdictional nightmare.

[Marvolo]

Originally Posted by wiegeabo

Homeland is an unnecessary redundancy that's just a drain on money and resources and creates a bureaucratic and jurisdictional nightmare.

The thing is Homeland is deeply ingrained in what the FBI, CIA, and the NSA do. Good luck removing it especially from the CIA. They might say its going away, but it would continue to operate off the books behind closed doors and the ledgers would show a question mark beside a chunk of our taxes instead of Homeland Security. It is here to stay for the forseeable future and with the worldwide situation decreasing and China threatening war with Japan and NKorea launching "satellites" I wouldnt expect anything different.

[Marvolo]

4 Ways to Avert the Debt Ceiling (And the Most Likely Option Is the Scariest)

-- The Treasury could repo Mount Rushmore to the Fed.
As Karl Smith of Modeled Behavior argues, the Treasury could theoretically sell anything valuable enough, like offshore oil rights, to the Fed, and agree to buy it back later. This kind of repurchase (repo) agreement would give the Treasury cash flow if it's running so low that it can't pay the interest on our debt, but there are two big problems. First, repo agreements are not, economically-speaking, sales, but rather loans, so it would almost certainly violate the debt ceiling. And second, there's no way the Fed would do this. So there's that.

-- The Fed could send some of its bonds back to the Treasury as dividends.
Printing money is a pretty good way to make money, never more so than the past few years. The Fed remits most of its profits -- $89 billion in 2012 -- to the Treasury, which kind of makes the Treasury its sole shareholder. As @IvanTheK first suggested, the Fed could advance some of these profits to the Treasury as a dividend if there wasn't enough incoming revenue to pay the interest on the debt on any given day during a debt ceiling standoff. It's an elegant solution, but, again, not one the Fed is likely to go for.

-- Use IOUs to pay our bills.
If we don't hit the debt ceiling, we will immediately have to stop paying 40 percent of our bills ... unless we pay the rest with IOUs. Paul Krugman proposed something along these lines, and law professor Edward Kleinbard points out that California successfully used them during its own budget crisis in 2009. Back then, California paid people with IOUs yielding 3.75 percent that people could trade to banks for cash at a slight haircut. In other words, the banks made money off the trades. The federal government could do the same, but there are a few legal hurdles. If the IOUs pay any interest, it's hard to see how they're not debt; but if they don't pay any interest, it's hard to see how they're not money. Either would be illegal. Maybe everybody would be happy enough with this arrangement not to challenge it, like in California, but maybe not -- not to mention the awful optics of "Obama dollars".

Most Likely
-- Refuse to negotiate, and blame the Republicans for any economic damage.
Welcome to everybody's favorite game, debt ceiling chicken! Here's how it works. Obama says there's nothing he can do to lift the debt ceiling on his own; that's it up to Republicans to pay the country's bills; and that if they don't, they will get blamed for Social Security checks not going out. It's the strategy former Treasury Secretary Robert Rubin used back in the mid-90s when then-Speaker Newt Gingrich threatened to hold the debt ceiling hostage, and it's the strategy Obama seems to be using now. As Ezra Klein points out, Obama has deliberately ruled out all of these different debt ceiling end-arounds, because he doesn't want Republicans to think they have any alternative to increasing it themselves. Now, maybe half of them really do welcome default, as Politico reports, but maybe not. That's a terrifying bunch of "maybes", but it's where we are today.

In other words, Obama is happy not to mint the coin, because he thinks minting it reduces his leverage. Now it's a psychological game of chicken, with Obama and Republicans accelerating toward the other, each convinced they cannot swerve, and when they meet in the middle, they'll set off the mother of all global market crashes.

And you thought a trillion-dollar coin was crazy.

http://www.theatlantic.com/business/...ariest/267121/

[enterthemadness]

Originally Posted by Marvolo

4 Ways to Avert the Debt Ceiling (And the Most Likely Option Is the Scariest)



www.theatlantic.com/business/archive/2013/01/4-ways-to-avert-the-debt-ceiling-and-the-most-likely-option-is-the-scariest/267121/

Let it crash, let the mother trucker buuuuuuuuurn, I want to see both parties get pissed on. oh...Imma mad. Maaaaaaaaad.