“No Way Out” of Debt Trap, Gross Says: U.S. Living Standards Doomed to Fall

[coyotes_geek]

CG: A pretty bleak picture into our future. One that's certain to be accurate.

**************

Debt, debt and more mounting debt is plaguing countries around the globe.

In this U.S., states across the country face a collective $125 billion shortfall for fiscal 2012, while Congress is facing a budget gap nearly 10 times that size.

PIMCO founder and co-CIO Bill Gross has previously said that if the United States were a corporation, no one in their right mind would lend us money. For the last decade, we’ve been “relying on the kindness of strangers” to help cover our debts, he tells Aaron in the accompanying clip.

By “strangers” he is referring to our foreign counterparts, like China for example. Basically, for years Americans have spent their hard-earned dollars on less-expensive Chinese made goods. With great gratitude, China turned around and used all those dollars to buy up U.S. Treasuries and other dollar-denominated assets.

But now after years of reckless spending, America’s debt level is nearing a breaking point and can no longer rely on foreign capital as a last resort. “When a country reaches a certain debt level, confidence in that country’s ability to repay that debt becomes jeopardized,” says Gross, citing the work of Ken Rogoff and Carmen Reinhart in This Time Is Different.

The Way Forward...And Your Pocket Book
The budget crisis situation unfolding at the state and federal government level does not bode well for working men and women in this country. There are really only two choices, says Gross. And, neither favors your pocketbook:

Option #1 – Keep spending and do nothing
Option #2 – Balance our budgets by cutting entitlements

House Republicans ran and won on a platform to cut $100 billion from the budget this year and last month managed to pass legislation that would strip $61 billion in spending.
But for President Obama and Congressional Democrats, those cuts go way too far at a time when the country is still struggling to recover from the worst recession since the Great Depression. Goldman Sachs and Bill Gross agree and have warned that cutting too much could stifle growth. (See: Gross "self sustaining" clip)

Meanwhile, neither side as gotten serious about reforming entitlement programs like Social Security and Medicare, which account for more than a third of Uncle Sam's budget.

If the country cannot come to grips and cut back on entitlement programs, U.S. debt will continue to grow and governments around the world will loose faith in the U.S. dollar. Foreign goods would become more expensive, says Gross, while our standard of living would drop.

Under the second option, if entitlement programs are cut, many Americans would naturally have to learn to live on less and take a hit to their standard of living.

“There is really no way out of this trap and this conundrum at this point,” says Gross. From an investment perspective his advice is to stay clear of “bonds in dollar denominated terms” and to be “wary of higher interest rates going forward.”

Link (http://finance.yahoo.com/tech-ticker/%E2%80%9Cno-way-out%E2%80%9D-of-debt-trap-gross-says-u.s.-living-standards-doomed-to-fall-536001.html?tickers=%5EDJI,%5EGSPC,%5ETNX,GLD,GDX, TLT,MUB&sec=topStories&pos=main&asset=&ccode=)

[Marcus Bryant]

Option #1 it is, judging by the last couple of years.

Our political system is working; the politicians are giving the people what they want.

[coyotes_geek]

Yep. The support for Option #1 is very bipartisan.

[Wild Cobra]

No Way Out” of Debt Trap, Gross Says: U.S. Living Standards Doomed to Fall
The standard of living has been slowly declining over the last several decades. No new news here....

[Marcus Bryant]

Perhaps the result of the brook no-compromise, faux-ideological politics of last couple decades. Or more accurately, the result of a culture which has elevated individual happiness to the point of absurdity. That one might face a diminished standard of living leaves any plan for fiscal reform DOA at the federal, state, and local level.

[Wild Cobra]

Option #1 it is, judging by the last couple of years.

Our political system is working; the politicians are giving the people what they want.

And when 50%+ of the voters are tax consumers rather than tax producers, we are doomed.

[Marcus Bryant]

Politicians aren't elected for telling, and then acting on, the truth. They are elected for telling us what we want to hear and then giving us what we want. Of course we want low taxes and high spending, and the Fed to print enough currency to make it happen with minimal short term pain.

[Marcus Bryant]

Political pandering to the middle class will ensure that this imbalance continues.

Either the story is that you're overtaxed to pay for the slothful, or that "the rich" aren't taxed enough. Either way, you're the victim, despite the fact that the entitlements and wars you expect someone else to pay for are what is driving federal expenditures, debt, and deficits to grow to unsustainable levels.

No politician wants to call the middle class on their bullshit.

[Marcus Bryant]

Or, there's no politicians like Bush (the father) or Clinton around anymore. Anything that resembles a deviation from party orthodoxy or perhaps an acceptance of some point of the opponent's agenda is apostasy.

But while the culprit is generally thought to be increasing partisanship (when has it not been at a fever pitch in the US?), the culprit is really the great middle's helplessness, selfishness, and irresponsibility. Arguments for probity, compromise, and societal well-being fall on deaf ears. What's in it for poor, helpless, us?

[greyforest]

Option 3: Printing mo...I mean, "quantitative easing".

[boutons_deux]

"the politicians are giving the people what they want."

bullshit, even by MB's average spew.

The politicians are giving the VRWC what the VRWC paid/elected them for.

Many polls show majorities of Americans want:

stop the wars

tax the wealthy

regulate the financial criminal genies back into their bottle.

stimulate the economy for jobs and growth

permit collective bargaining

permit abortion.

etc, etc.

None of these is being pursued, esp not by Repugs and conservatives.

Real household income has stagnated since the VRWC got its Useful Idiot of St Ronnie elected and implementing VRWC policies.

[LnGrrrR]

The article presents an interesting logical inconsistency though. China is happy to support our debts previously, because we were buying their goods. But is that any different today? We're still buying goods from China, are we not? The article doesn't state why China would be fine with our debt at one time, and then not fine later.

Is China sufficiently well-off now that they don't need American customers to the extent they once did?

[Marcus Bryant]

Ah yes, the "VRWC." What was that about spewing bullshit? Without your little conspiracy theory you'd have nothing to subtract from this forum with.

And I'm sure those polls show that a majority of Americans believe that they are overtaxed and shouldn't have their benefits cut. Not to mention that both current wars had the support of a majority of Americans when they started. And abortion is still legal, etc...Try again.

[Marcus Bryant]

And the rejoinder will be that the "VRWC" controls everything, for the "VRWC" controls everything, by definition. What a fucking moron.

[Wild Cobra]

Marcus, please keep in perspective the mentality of the one you just addressed...

[Marcus Bryant]

Shit, I just took croutons seriously. I guess the joke's on me.

[RandomGuy]

Debt really isn't as much of a problem as many seem to think it is. Important to be sure, but not as important to standards of living as our relatively high standard of living compared to the rest of the world.

We could be completely debt free and still face that fact that the Chinese can produce things at a fraction of what we can, mostly due to cheaper labor costs.

This was obvious to me even as far back as high school in the late 80's. We are competing in an ever more integrated global economy with people who can live very well being paid 1/3 of what an average American makes.

That will change over time, given growth rates in the developing world.

Oddly enough, high energy prices will probably help us in the long run, as it becomes more economically competitive to make things closer to where they are consumed.

[boutons_deux]

VRWC is real and extremely well organized, focused, financed, and effective.

[Marcus Bryant]

So are the Easter Bunny and the Chupacabra.

[TeyshaBlue]

Not to mention the Adjustment Bureau.

[coyotes_geek]

The article presents an interesting logical inconsistency though. China is happy to support our debts previously, because we were buying their goods. But is that any different today? We're still buying goods from China, are we not? The article doesn't state why China would be fine with our debt at one time, and then not fine later.

As our debts get bigger, our risk of default on those debts does too. Just because China thinks our debt is a good investment today doesn't mean they're always going to feel that way.


Is China sufficiently well-off now that they don't need American customers to the extent they once did?

I don't think so. I do think China is getting concerned about what an excessive debt burden could do to the consumer power of American taxpayers. Larger debt burden = higher taxes = less disposable income.

[4>0rings]

Who cares about debt when we can just print more money... until that changes..

[boutons_deux]

China's problem right now is how to cool off its very hot economy. many key provinces are predicting growth of 10%/year

[Capt Bringdown]

The political and financial elites created this crisis and have been consolidating and growing their wealth and power to absurd gilded age levels- but, but it's the fault of the middle class!

[MannyIsGod]

Do you guys realize how little of our debt China owns?

[DMX7]

The standard of living has been slowly declining over the last several decades. No new news here....

Not for the richest Americans thanks to dumbass republicans.

[coyotes_geek]

The political and financial elites created this crisis and have been consolidating and growing their wealth and power to absurd gilded age levels- but, but it's the fault of the middle class!

Actually it is. At least a good chunk of it. Who doesn't want to see entitlement programs cut? The elites, or the middle class?

[coyotes_geek]

Do you guys realize how little of our debt China owns?

Today they own about $1.2 trillion. Five years ago they were under $300B.

So basically over those 5 years China has funded roughly 20% of our new debt.

[Jacob1983]

America is fucked yet it's still a country.

[RandomGuy]

Do you guys realize how little of our debt China owns?

Of bigger concern than actual government debt is the balance of trade.

That is something I worry about far more than government debt, since it can be something that exacerbates a lot of other problems.

[RandomGuy]

Today they own about $1.2 trillion. Five years ago they were under $300B.

So basically over those 5 years China has funded roughly 20% of our new debt.

They kind of have to, given the trade imbalance, and their currency peg. The recent semi-"floating basket" is B.S. since that basket is likely dominated by dollars.

[ManuBalboa]

Politicians aren't elected for telling, and then acting on, the truth. They are elected for telling us what we want to hear and then giving us what we want. Of course we want low taxes and high spending, and the Fed to print enough currency to make it happen with minimal short term pain.

People paying taxes want lower taxes. People collecting benefits want higher spending.

Hence the entire game of making people dependent on the government. It's all a joke. They are never going to fix this. Every man for himself. Can't wait till the house of cards crumbles.

[Winehole23]

Money where his mouth is:

http://www.bloomberg.com/news/2011-03-09/gross-drops-government-debt-from-pimco-s-flagship-fund-zero-hedge-reports.html

[The Reckoning]

actually, according to my macro prof last year, economists have already established our debt economy as just another market (like a stock market) that circulates treasuries through the globe by way of alternative markets driven by China. apparently China is profitting from our debt much like it profits from our consumption, so its very content with the situation.

so option 1

(note that the US has never defaulted on a loan)

[coyotes_geek]

actually, according to my macro prof last year, economists have already established our debt economy as just another market (like a stock market) that circulates treasuries through the globe by way of alternative markets driven by China. apparently China is profitting from our debt much like it profits from our consumption, so its very content with the situation.

so option 1

(note that the US has never defaulted on a loan)

That's all well and good from a macroeconomic standpoint. I agree that we don't need to worry about the U.S. defaulting. But the problem is that the debt markets don't give a shit about our standard of living. When it becomes necessary to lower the standard of living by raising taxes, cutting services and adopting an inflationary monetary policy so that we can continue to take on new debt, we can all rest assured that Uncle Sam will be up to the task. Uncle Sam knows full well that banks are more important than people.

If as an American taxpayer/citizen that scenario is acceptable to you, then by all means support the status quo.

[Marcus Bryant]

That's all well and good from a macroeconomic standpoint. I agree that we don't need to worry about the U.S. defaulting. But the problem is that the debt markets don't give a shit about our standard of living. When it becomes necessary to lower the standard of living by raising taxes, cutting services and adopting an inflationary monetary policy so that we can continue to take on new debt, we can all rest assured that Uncle Sam will be up to the task. Uncle Sam knows full well that banks are more important than people.

If as an American taxpayer/citizen that scenario is acceptable to you, then by all means support the status quo.

Remember that the low federal tax rates and open-ended federal entitlements enjoyed by the middle class are the result of a conspiracy propagated by the neo-Robber Baron reactionaries.

[CosmicCowboy]

My generation will be the last to enjoy all the benefits...reasonably low taxes, positive business environment, social security, medicare....all the while voting for new shit and kicking our debt down the road for you young idealistic "progressive" guys to pay...

Thanks suckers!

[Marcus Bryant]

My generation will be the last to enjoy all the benefits...reasonably low taxes, positive business environment, social security, medicare....all the while voting for new shit and kicking our debt down the road for you young idealistic "progressive" guys to pay...

Thanks suckers!

Essentially. Of course, when they have to pay for it, the culprit will be the right-wing bogeyman of the moment.

[coyotes_geek]

Remember that the low federal tax rates and open-ended federal entitlements enjoyed by the middle class are the result of a conspiracy propagated by the neo-Robber Baron reactionaries.

So true. The VRWC is forcing low taxes and entitlements on us against our will.

[coyotes_geek]

My generation will be the last to enjoy all the benefits...reasonably low taxes, positive business environment, social security, medicare....all the while voting for new shit and kicking our debt down the road for you young idealistic "progressive" guys to pay...

Thanks suckers!

:depressed

[RandomGuy]

Money where his mouth is:

http://www.bloomberg.com/news/2011-03-09/gross-drops-government-debt-from-pimco-s-flagship-fund-zero-hedge-reports.html


Yields on Treasuries may be too low to sustain demand for U.S. government debt as the Federal Reserve approaches the end of its second round of quantitative easing, Gross wrote in a monthly investment outlook posted on Pimco’s website on March 2. Gross mentioned that Pimco may be a buyer of Treasuries if yields rise to attractive levels.

Treasury yields are about 150 basis points too low when viewed on a historical context and when compared with expected nominal gross domestic product growth of 5 percent, he wrote in the commentary. The Fed is scheduled to complete purchases of $600 billion of Treasuries in June.

Gross in his February commentary urged investors to reduce holdings of Treasuries and U.K. gilts and buy higher-returning securities such as debt from emerging-market nations. “Old- fashioned gilts and Treasury bonds may need to be ‘exorcised’ from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint,” Gross wrote.

As much as we might be bitching about the borrowing, the rates are at almost record lows.

That is going to change going forward.

[MannyIsGod]

That's all well and good from a macroeconomic standpoint. I agree that we don't need to worry about the U.S. defaulting. But the problem is that the debt markets don't give a shit about our standard of living. When it becomes necessary to lower the standard of living by raising taxes, cutting services and adopting an inflationary monetary policy so that we can continue to take on new debt, we can all rest assured that Uncle Sam will be up to the task. Uncle Sam knows full well that banks are more important than people.

If as an American taxpayer/citizen that scenario is acceptable to you, then by all means support the status quo.

Well, I hate to break it to you but considering the level of consumption from a purely material standpoint our standard of living requires, it coming down was completely inevitable. Such a small fraction of the world's population using such a high energy per capita was very unsustainable.

[Wild Cobra]

So true. The VRWC is forcing low taxes and entitlements on us against our will.
I agree, they will be saying that when I'm in my 70's.

[FuzzyLumpkins]

William Gross born 1944 is a baby boomer.

[The Reckoning]

That's all well and good from a macroeconomic standpoint. I agree that we don't need to worry about the U.S. defaulting. But the problem is that the debt markets don't give a shit about our standard of living. When it becomes necessary to lower the standard of living by raising taxes, cutting services and adopting an inflationary monetary policy so that we can continue to take on new debt, we can all rest assured that Uncle Sam will be up to the task. Uncle Sam knows full well that banks are more important than people.

If as an American taxpayer/citizen that scenario is acceptable to you, then by all means support the status quo.


well, i was pointing out the fact that our debt isnt something that is waiting to be paid back in full or is in complete possession of china.

its a living, breathing market that cycles around the globe with much of the retention being in US markets. although the debt is something to note, i dont believe all the hysteria is warranted. the government, however, doesnt need to "test the waters" of how much debt it can issue out though. the market can only be supplied so much.

that said, for me "standard of living" is all relative. we'll always have a higher standard of living than our parents because of technological and industrial advances.

plus, ill always be content with what i have so long as im not being worked to death (or i hate what im doing), which is definitely a possibility due to the upcoming hiccup in the labor market when the baby boomers retire, and we have to cover social security. its not the debt that concerns me - its social security and military spending.

[FuzzyLumpkins]

that said, for me "standard of living" is all relative. we'll always have a higher standard of living than our parents because of technological and industrial advances.

To me this sentiment is a problem. There is zero justification for it in the face of ever so scarcer resources.

We figure out how to burn hydrogen in the atmosphere without producing nitrates or something?

[z0sa]

Oh no! We'll reap what we've sown! AH SHIT

[byrontx]

I'll just toss something out there for consideration but maybe globalization only benefits the hyper-capitalists by forcing those dwelling in lower economic stratas to compete with people of poorer nations. The effect would be to drive down wages and basically slap their ass in line. The U. S. protected its industries for nearly two-thirds of its existence with high tariffs and that seemed to work well for the average American. Maybe we need to toss this globalization mantra. Let China sell us those things we cannot make for ourselves and outside of that-Fuck 'em. The reality is that China and other nations do that to us.

I think that and a program of developing and deploying thorium reactors would get us back on our feet.

[Wild Cobra]

I'll just toss something out there for consideration but maybe globalization only benefits the hyper-capitalists by forcing those dwelling in lower economic stratas to compete with people of poorer nations. The effect would be to drive down wages and basically slap their ass in line. The U. S. protected its industries for nearly two-thirds of its existence with high tariffs and that seemed to work well for the average American. Maybe we need to toss this globalization mantra. Let China sell us those things we cannot make for ourselves and outside of that-Fuck 'em. The reality is that China and other nations do that to us.

I think that and a program of developing and deploying thorium reactors would get us back on our feet.
Our founding fathers were geniuses who realized that tariffs were necessary. I agree we need to go back to them to keep USA manufacturing competitive in our own economy.

[Marcus Bryant]

Oh no! We'll reap what we've sown! AH SHIT

The American religion demands you seek repentance for your sins against something, apparently now called "sustainability."

[Winehole23]

PIMCO's Bill Gross, the manager of the world's largest bond fund, raised his bet against U.S. government-related debt in April to 4 percent from 3 percent, according to the company's website on Monday.http://www.reuters.com/article/2011/05/09/us-investing-pimco-fund-idUSTRE7486LU20110509

[CosmicCowboy]

Do you guys realize how little of our debt China owns?

No shit. Just a little over 5%.

[CosmicCowboy]

The standard of living has been slowly declining over the last several decades. No new news here....

Oh really? Whose standard of living has declined? Americans definition of "absolutely have to have" has continued to expand every year. Houses are bigger and fancier than ever before. Cars are sexier. Fucking elementary school kids have their own cell phones. There are more labor saving appliances and gadgets every year. Where is this living standard decline that you speak of?
.

[boutons_deux]

The shithole Human-Americans find themselves was NOT of their own doing. It was decades-long strategy, back to the early 70s, of the VRWC to undo social progress back to the 1920s.

The Unwisdom of Elites

By PAUL KRUGMAN

The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europe’s single currency is coming apart at the seams. How did it all go so wrong?

Well, what I’ve been hearing with growing frequency from members of the policy elite — self-appointed wise men, officials, and pundits in good standing — is the claim that it’s mostly the public’s fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorate’s foolishness.

So this seems like a good time to point out that this blame-the-public view isn’t just self-serving, it’s dead wrong.

The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.

Let me focus mainly on what happened in the United States, then say a few words about Europe.

These days Americans get constant lectures about the need to reduce the budget deficit. That focus in itself represents distorted priorities, since our immediate concern should be job creation. But suppose we restrict ourselves to talking about the deficit, and ask: What happened to the budget surplus the federal government had in 2000?

The answer is, three main things.

First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade.

Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so.

And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.

So who was responsible for these budget busters? It wasn’t the man in the street.

President George W. Bush cut taxes in the service of his party’s ideology, not in response to a groundswell of popular demand — and the bulk of the cuts went to a small, affluent minority.

Similarly, Mr. Bush chose to invade Iraq because that was something he and his advisers wanted to do, not because Americans were clamoring for war against a regime that had nothing to do with 9/11. In fact, it took a highly deceptive sales campaign to get Americans to support the invasion, and even so, voters were never as solidly behind the war as America’s political and pundit elite.

Finally, the Great Recession was brought on by a runaway financial sector, empowered by reckless deregulation. And who was responsible for that deregulation? Powerful people in Washington with close ties to the financial industry, that’s who. Let me give a particular shout-out to Alan Greenspan, who played a crucial role both in financial deregulation and in the passage of the Bush tax cuts — and who is now, of course, among those hectoring us about the deficit.

So it was the bad judgment of the elite, not the greediness of the common man, that caused America’s deficit. And much the same is true of the European crisis.

Needless to say, that’s not what you hear from European policy makers. The official story in Europe these days is that governments of troubled nations catered too much to the masses, promising too much to voters while collecting too little in taxes. And that is, to be fair, a reasonably accurate story for Greece. But it’s not at all what happened in Ireland and Spain, both of which had low debt and budget surpluses on the eve of the crisis.

The real story of Europe’s crisis is that leaders created a single currency, the euro, without creating the institutions that were needed to cope with booms and busts within the euro zone. And the drive for a single European currency was the ultimate top-down project, an elite vision imposed on highly reluctant voters.

Does any of this matter? Why should we be concerned about the effort to shift the blame for bad policies onto the general public?

One answer is simple accountability. People who advocated budget-busting policies during the Bush years shouldn’t be allowed to pass themselves off as deficit hawks; people who praised Ireland as a role model shouldn’t be giving lectures on responsible government.

But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

http://www.nytimes.com/2011/05/09/opinion/09krugman.html?pagewanted=print

========

For you illiterates who need Draw-Me-A-Picture:

http://www.cbpp.org/images/cms//12-16-09bud-rev6-28-10-f1.jpg

[TeyshaBlue]

For you illiterates who need Draw-Me-A-Picture:
GFY you illiterate bot.

[baseline bum]

Oh really? Whose standard of living has declined? Americans definition of "absolutely have to have" has continued to expand every year. Houses are bigger and fancier than ever before. Cars are sexier. Fucking elementary school kids have their own cell phones. There are more labor saving appliances and gadgets every year. Where is this living standard decline that you speak of?
.

You're not serious, right? There's a big difference between being well off and being nigga rich. Everything that really matters has gone way up in price. Gone are the days of the single earner family having a nice house. Education costs are an absolute nightmare now. Which correlates more strongly with a higher standard of living: giving your kid an iPhone or being able to afford his college degree? Was medical bankruptcy a huge issue 30 years ago? Now we spend way more than anyone else on the face of the earth for our lousy medical care.

[boutons_deux]

You Can't Be Serious

"Whose standard of living has declined"

household income has been stagnant since St Ronnie the Useful Fool got elected, and that even with with millions of women entering the labor force since 1980, making many households two incomes, the only way they have been able to stand still.

single male real income has actually declined since the mid'70s.

etc, etc.

[DarrinS]

WH to release statement: All of this was caused by the Bush tax cuts for quadrillionaires and gazillionaires.

[CosmicCowboy]

You're not serious, right? There's a big difference between being well off and being nigga rich. Everything that really matters has gone way up in price. Gone are the days of the single earner family having a nice house. Education costs are an absolute nightmare now. Which correlates more strongly with a higher standard of living: giving your kid an iPhone or being able to afford his college degree? Was medical bankruptcy a huge issue 30 years ago? Now we spend way more than anyone else on the face of the earth for our lousy medical care.

I AM serious. I can remember when my "middle class" aunts and uncles all lived in 1000sf houses with no air conditioning and one bathroom and both adults worked. They shared a car and cooked all their meals at home. Eating out was a once a month "special" treat.

Compare that to what a middle class household thinks they have to have now.

[ElNono]

What do you guys call 'middle-class' these days exactly?

Both my wife and I work, but we just aren't even close to being able to purchase a house, even a shitty one, in this area...

[boutons_deux]

WH to release statement: All of this was caused by the Bush tax cuts for quadrillionaires and gazillionaires.

the Repug tax cuts going back to St Ronnie were part of the cause of the revenue crisis, as intended to "drown govt in a bathtub", aka, "starving the beast" (so it won't get in the way of the VRWC raping and pillaging people, the environment, the economy)

[Wild Cobra]

Oh really? Whose standard of living has declined? Americans definition of "absolutely have to have" has continued to expand every year. Houses are bigger and fancier than ever before. Cars are sexier. Fucking elementary school kids have their own cell phones. There are more labor saving appliances and gadgets every year. Where is this living standard decline that you speak of?
.
And it's taking both adults working to have that on average instead of one.

[Wild Cobra]

I AM serious. I can remember when my "middle class" aunts and uncles all lived in 1000sf houses with no air conditioning and one bathroom and both adults worked. They shared a car and cooked all their meals at home. Eating out was a once a month "special" treat.

Compare that to what a middle class household thinks they have to have now.
That was how I grew up, but rather poor. Our house was larger and we were below middle class. My father didn't make much but could buying a 4 bdrm house. That same house today, I cant afford and I am better of than he was then.

Technological advances skews the value of our work. Microwave ovens for example when they were new were 5 times what they cost today, or more. Look at the basics like food, housing, and gas prices.

When I was out of High School, the 2 bdrm house I rented with basement was 47.6 x minimum hourly wage. Today, smaller apartments are 103.4 x minimum wage, and a similar house, over 150 times. It seems to me houses are about 3x what they were in rent vs. minimum wage. To buy one, relative to minimum wage changes, it seems like similar houses are about 6x as much.

Anyway, that's what I see here in Oregon.

[RandomGuy]

I AM serious. I can remember when my "middle class" aunts and uncles all lived in 1000sf houses with no air conditioning and one bathroom and both adults worked. They shared a car and cooked all their meals at home. Eating out was a once a month "special" treat.

Compare that to what a middle class household thinks they have to have now.

1940 standard of living > 1840 standard of living

1960 standard of living > 1940 standard of living

1980 standard of living > 1960 standard of living

2000 standard of living = 1980 standard of living

2020 standard of living < 1980 standard of living.

The statement that standards of living are dropping is not so much that we are really going to slide back to 1940. It is simply that this is the first time when standards of living have *not* gotten better than the generation before, and don't look to be better.

You have a point that things are better now than they were 40+ years ago, and people have new "must-haves", but that doesn't really contradict the OP at all, if that was your meaning.

[TDMVPDPOY]

gettin a year 9 drop out to be president = fail

color guy combo breaker to be president = fail

lol if a female pres is next in line = fail

i dont think any future president is going to fix ur current problems and foreseeable future, if the senate is continue run by clowns after their self interest and not the interest of the people that got them there....

[boutons_deux]

The DC political class was long ago totally disenterested in having the USA progress.

Now DC is only interested in making progress for UCA and stuffing their own pockets.

DC is completely unfixable since Human-American citizens have no power to oppose the UCA kleptocratic plutocracy/corporatocracy. Barry, Mr Yes-We-Can-Change, is the perfect example why the DC disaster is hopeless.

[boutons_deux]

CBPP has updated their wherefrom-the-deficit chart which shows how VRWC policies ran the country into a deficit shithole:

http://www.cbpp.org/images/cms//5-10-11bud-f1.jpg

http://www.cbpp.org/cms/index.cfm?fa=view&id=3490&utm_source=twitter

Note, the govt pays taxpayer cash to UCA. If taxpayer cash is insufficient, then taxpayers get stuck with debt + interest.

[TeyshaBlue]

CBPP has updated their wherefrom-the-deficit chart which shows how VRWC policies ran the country into a deficit shithole:

http://www.cbpp.org/images/cms//5-10-11bud-f1.jpg

http://www.cbpp.org/cms/index.cfm?fa=view&id=3490&utm_source=twitter

Note, the govt pays taxpayer cash to UCA. If taxpayer cash is insufficient, then taxpayers get stuck with debt + interest.

lol @ cbpp.org

[coyotes_geek]

Someone should do something about those Obama tax cuts.

[boutons_deux]

Repugs extorted extension of THEIR tax cuts by threatening to block extension of unemployment benefits. To keep the rich getting richer and richer, the Repugs were ready to fuck over the people unemployed by the VRWC's Great Bankster Depression.

[TeyshaBlue]

:rollin

[coyotes_geek]

Repugs extorted extension of THEIR tax cuts by threatening to block extension of unemployment benefits. To keep the rich getting richer and richer, the Repugs were ready to fuck over the people unemployed by the VRWC's Great Bankster Depression.

Such bullshit. If the "repugs" truly had that much power Obamacare never would have passed.

republicans = democrats = like the Bush tax cuts

[boutons_deux]

Repugs, Blue Dog dems, corporate lobbyists fucked up health care reform, not Obama.

[boutons_deux]

Hell Freezes Over As Wall Street Calls For Tax Increases

In a stunning admission of the obvious, a majority of Wall Street bond dealers believe spending cuts alone cannot solve the U.S. budget deficit and tax increases must be part of the mix.

http://www.politicususa.com/en/wall-street-taxes

[TeyshaBlue]

Hell Freezes Over As Wall Street Calls For Tax Increases

In a stunning admission of the obvious, a majority of Wall Street bond dealers believe spending cuts alone cannot solve the U.S. budget deficit and tax increases must be part of the mix.

http://www.politicususa.com/en/wall-street-taxes

WTF? The VWRC strikes again!

[johnsmith]

WTF? The VWRC strikes again!

:lol

[coyotes_geek]

Repugs, Blue Dog dems, corporate lobbyists fucked up health care reform, not Obama.

Repugs didn't write or vote for the bill, so you can scratch them off this list.

[Wild Cobra]

Someone should do something about those Obama tax cuts.
No kidding, but he didn't cut taxes.

With SS being in a near future mess, why was the SS contribution cut from 6.2% to 4%. Shouldn't we have increased it instead?

[ElNono]

No kidding, but he didn't cut taxes.

That makes no sense.

[Wild Cobra]

That makes no sense.
OK, what did I miss?

[ElNono]

Someone should do something about those Obama tax cuts.


No kidding, but he didn't cut taxes.

[Wild Cobra]

Real helpful El... (not.)

What were the Obama tax cuts missed?

[ElNono]

You're telling him "No kidding (someone should do something about those Obama tax cuts)" and follow it with "but he didn't cut taxes".

Do I need to post a colorful chart so you understand that doesn't make any sense?

[Wild Cobra]

You're telling him "No kidding (someone should do something about those Obama tax cuts)" and follow it with "but he didn't cut taxes".

Do I need to post a colorful chart so you understand that doesn't make any sense?
The only cuts I'm aware of is the SS. Most people consider SS a tax. That's why I stated it as I did.

Now are the tax cuts I'm not aware of, or you just going to play games?

[boutons_deux]

"Most people consider SS a tax."

SS is a public retirement fund, NOT a tax, NOT an entitlement

[CosmicCowboy]

"Most people consider SS a tax."

SS is a public retirement fund, NOT a tax, NOT an entitlement

:lmao

More proof Boutons has lost complete touch with reality.

http://catholicvote.org/discuss/wp-content/uploads/2010/12/shell-game.bmp

[Winehole23]

What were the Obama tax cuts missed?Pretty sure CG was referring to Obama signing the extension of the Bush tax cuts last December.

[TeyshaBlue]

http://www.audioandanarchy.com/images/smilies/fack.png

[boutons_deux]

:lmao

More proof Boutons has lost complete touch with reality.

http://catholicvote.org/discuss/wp-content/uploads/2010/12/shell-game.bmp

So you're assuming the T-bonds held by SS will be defaulted on?

There's nothing wrong with SS that isn't easily fixable, eg, the VRWC needs to quit LYING about the SS.

If the Repugs get into WH and both branches of govt (they already have control of SCOTUS), I'm sure they will destroy SS and middle/working class citizens in deep(er) shit and Wall St hauling in $Ts in "fees".

[CosmicCowboy]

So you're assuming the T-bonds held by SS will be defaulted on?

There's nothing wrong with SS that isn't easily fixable, eg, the VRWC needs to quit LYING about the SS.

If the Repugs get into WH and both branches of govt (they already have control of SCOTUS), I'm sure they will destroy SS and middle/working class citizens in deep(er) shit and Wall St hauling in $Ts in "fees".

It is a totally rational conclusion that the US will not have enough current tax revenue to pay off the T-Bonds held by Social Security as they mature. They will either print shit loads of money or default. No other choices.

[coyotes_geek]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't fuck with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments (READ: MEDICARE) Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

[RandomGuy]

It is a totally rational conclusion that the US will not have enough current tax revenue to pay off the T-Bonds held by Social Security as they mature. They will either print shit loads of money or default. No other choices.

We will have the revenue to pay that off, but that isn't he problem with SS, barring some planetary catastrophe.

The problem is that the future liabilities (well actually current, but let's not split hairs about technical accounting issues) of the fund will far exceed the assets held.

[RandomGuy]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't fuck with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments. Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

F) Raise SS tax rates, while raising the retirement age, and curbing benefits somewhat over time.

Address the problem from both ends, and suck up the fact that the population is aging.

[MannyIsGod]

Where are the greatest factors Americans have regarding their increased standard of living? Is it energy usage? So if our standard of living falls that mean we use less energy? I've thought for awhile that the world would have to catch up a great deal before our standard of living increases but what does that really mean in practical terms?

My initial thinking is that it is indeed energy usage in the form of excessive driving and decentralized cities. Baring technology increases that allow us more energy usage (such as better batteries and solar) people's driivng habbits will likely be the first to change. Second on that list for me would liikely be water consumption. I live in a place where the main river is a creek fed from snow melt that at its widest is maybe 4 feet. People out west will likely pay the price for trying to live in the middle of a desert. Sup Phoenix.

If the worst aspects of our standards of living dropping means reduced energy consumption and a surge in activities like recycling then I'm not too sure its a bad thing.

[coyotes_geek]

F) Raise SS tax rates, while raising the retirement age, and curbing benefits somewhat over time.

Address the problem from both ends, and suck up the fact that the population is aging.

I agree, but my list was intended to be specific to how we address the problem of the Treasury owing SS $10 trillion dollars that it doesn't have.

Raising SS taxes, raising the retirment age & curbing benefits all need to happen, but that's a tangential issue.

[boutons_deux]

Raising the retirement age + years has already been calculated to have a minuscule effect on the SS deficit, WHILE being extremely cruel to seniors who can't even find a job these days and perhaps for 10 years more of the Banksters' Great Depression. Being unemployed, they would be in extreme distress/poverty/wards of the state to have their SS checks delayed until 67 or 70.

[MB20]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't fuck with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments (READ: MEDICARE) Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.


Unfortunately, A.
If somehow they find a way to keep part of that money away from the public/banks, inflation could be "controled"

[101A]

Political pandering to the middle class will ensure that this imbalance continues.

Either the story is that you're overtaxed to pay for the slothful, or that "the rich" aren't taxed enough. Either way, you're the victim, despite the fact that the entitlements and wars you expect someone else to pay for are what is driving federal expenditures, debt, and deficits to grow to unsustainable levels.

No politician wants to call the middle class on their bullshit.



Great point

[101A]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't fuck with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments (READ: MEDICARE) Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

F. Systematic program to encourage Americans to partake in activities and lifestyles that are profoundly conducive to long-life spans. Give away filterless cigarettes, doughnuts, Soda; a legion of hot hookers - practically free, who won't allow protection. Hell, be creative, wouldn't take much to significantly lower the life expectancy.

Dead people don't collect ss.

[RandomGuy]

Political pandering to the middle class will ensure that this imbalance continues.

Either the story is that you're overtaxed to pay for the slothful, or that "the rich" aren't taxed enough. Either way, you're the victim, despite the fact that the entitlements and wars you expect someone else to pay for are what is driving federal expenditures, debt, and deficits to grow to unsustainable levels.

No politician wants to call the middle class on their bullshit.

Succinct and mostly correct. I think eventually it will have to come to a head.

[RandomGuy]

F. Systematic program to encourage Americans to partake in activities and lifestyles that are profoundly conducive to long-life spans. Give away filterless cigarettes, doughnuts, Soda; a legion of hot hookers - practically free, who won't allow protection. Hell, be creative, wouldn't take much to significantly lower the life expectancy.

Dead people don't collect ss.

Heh, just have to figure out a way to keep them out of the emergency room.

Free skydiving lessons for everyone?

Maybe hold a nationwide "draw mohammed" day, then go vacationing in Iran?

[RandomGuy]

Where are the greatest factors Americans have regarding their increased standard of living? Is it energy usage? So if our standard of living falls that mean we use less energy? I've thought for awhile that the world would have to catch up a great deal before our standard of living increases but what does that really mean in practical terms?

My initial thinking is that it is indeed energy usage in the form of excessive driving and decentralized cities. Baring technology increases that allow us more energy usage (such as better batteries and solar) people's driivng habbits will likely be the first to change. Second on that list for me would liikely be water consumption. I live in a place where the main river is a creek fed from snow melt that at its widest is maybe 4 feet. People out west will likely pay the price for trying to live in the middle of a desert. Sup Phoenix.

If the worst aspects of our standards of living dropping means reduced energy consumption and a surge in activities like recycling then I'm not too sure its a bad thing.

Energy is, I think, the very root of our standard of living.

As it gets less efficient in terms of returns on invested energy, we will have to rely on technology to make what we have stretch longer (use fewer units of energy per $ GDP)

I think technology will probably keep it from getting outright dysotopian in that malthusian death-spiral kind of way.

[ElNono]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't fuck with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments (READ: MEDICARE) Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

F) Invade almost every oil producing country and control oil prices worldwide. Sell $10 trillion worth of oil. Profit!

[boutons_deux]

It is a totally rational conclusion that the US will not have enough current tax revenue to pay off the T-Bonds held by Social Security as they mature. They will either print shit loads of money or default. No other choices.

That's many decades away. But it's LIED ABOUT as if it were imminent.

[boutons_deux]

Like CC, Hatch parroting the VRWC-speak of SS T-Bonds are "IOUs".


Sen. Hatch Smears Social Security in Senate Finance Hearing

http://www.huffingtonpost.com/daniel-marans/hatch-social-security-_b_860731.html?view=print

[coyotes_geek]

That's many decades away. But it's LIED ABOUT as if it were imminent.

If by "many decades" you mean "less than three decades", you would be making a true statement.

[boutons_deux]

30 years is an infinity in practice.

VRWC has plenty of time and many attempts to privatize SS and impoverish Human-Americans further.

[coyotes_geek]

26 years actually. Trust fund projected to be broke by 2037.

In reality, we don't even have that long. 2037 is when the money runs out. SS has to start cashing in their treasuries in 2014. Oh, but that's three whole years away. Plenty of time...............

[boutons_deux]

"Trust fund projected to be broke by 2037."

If nothing changes. There will certainly be changes, so 2037 is nothing but dishonest fear-mongering. Raising the SS contrib by just 1% will push 2037 way back.

[boutons_deux]

Medicare and Medicaid are MUCH MORE immediate problems than SS, since seniors consume much more in medical care than than do in SS payments.

The sick-care corps and their Repug whores will make sure US sick-care remains a Human-American wealth-draining ATM.

[TeyshaBlue]

So the CBO is fear mongering by projecting 2037 as the terminal date. Ooook. http://www.audioandanarchy.com/images/smilies/fack.png

[coyotes_geek]

"Trust fund projected to be broke by 2037."

If nothing changes. There will certainly be changes, so 2037 is nothing but dishonest fear-mongering. Raising the SS contrib by just 1% will push 2037 way back.

Except Obama already has changed something. He cut the SS contribution rate by 2%, so that 2037 date is going to be moving closer, not further.

Also, that whole 2037 date is still predicated on the assumption that SS is going to be getting paid back, in full. Hardly a guarantee, and a scenario that presents a whole slew of other problems even if SS does get paid back in full.

[TeyshaBlue]

Medicare and Medicaid are MUCH MORE immediate problems than SS, since seniors consume much more in medical care than than do in SS payments.

The sick-care corps and their Repug whores will make sure US sick-care remains a Human-American wealth-draining ATM.

And the enlightened progressives will simply sit there and gawk with bovine incomprehension while this happens. None of them will be in on the payola. OOook. http://www.audioandanarchy.com/images/smilies/fack.png

[TeyshaBlue]

Except Obama already has changed something. He cut the SS contribution rate by 2%, so that 2037 date is going to be moving closer, not further.


Oh snap. The VWRC strikes yet again!

[TeyshaBlue]

Duplicate friggin post.

[coyotes_geek]

Oh snap. The VWRC strikes yet again!

They're everywhere I tell ya. VRWC membership includes Obama and the democratic party.

[CosmicCowboy]

And Croutons still can't and won't address where the US is gonna come up with TEN TRILLION REAL DOLLARS to repay the money they "borrowed" from the "trust fund" and already blew on other stuff.

[Whisky Dog]

The master plan: keep sippin on our vast and mostly untapped oil reserves and oil sands while guzzling oil from the world markets then right at the brink... BAM tap our supplies and become the major seller generating trillions in the largest greed fueled money swipe in history

[RandomGuy]

And Croutons still can't and won't address where the US is gonna come up with TEN TRILLION REAL DOLLARS to repay the money they "borrowed" from the "trust fund" and already blew on other stuff.

You say that as if the funds will need to be paid all at once.

Ten trillion divided by a decade or three is not quite doomsday.

[TeyshaBlue]

You say that as if the funds will need to be paid all at once.

Ten trillion divided by a decade or three is not quite doomsday.

No but couple that with the fact that SS is running a deficit now and will for the projected future....it ain't exactly rainbow bridges and ponies.

[RandomGuy]

The master plan: keep sippin on our vast and mostly untapped oil reserves and oil sands while guzzling oil from the world markets then right at the brink... BAM tap our supplies and become the major seller generating trillions in the largest greed fueled money swipe in history

I would be all for that. Switch over to renewables now, save up the oil, until everyone else runs out and charge out he ass for whatever is left.

If I controlled any oil reserves I would be doing just that.

[RandomGuy]

No but couple that with the fact that SS is running a deficit now and will for the projected future....it ain't exactly rainbow bridges and ponies.

E-yup.

Our only hope is to start encouraging immigration on a large scale.

Yeah, I went there. :stirpot:

[TeyshaBlue]

I would be all for that. Switch over to renewables now, save up the oil, until everyone else runs out and charge out he ass for whatever is left.

If I controlled any oil reserves I would be doing just that.

lol...you and me both, bruddah.:lol

[TeyshaBlue]

E-yup.

Our only hope is to start encouraging immigration on a large scale.

Yeah, I went there. :stirpot:

:rollin:rollin

[Wild Cobra]

F) Raise SS tax rates, while raising the retirement age, and curbing benefits somewhat over time.

Address the problem from both ends, and suck up the fact that the population is aging.
I agree the SS rates should be increased, and maybe the retirement ages increased since life expectancies are also increasing.

I think what we need as an overall fix is for the federal government to budget to spend no more than 17% of a normal economy GDP number. In bad times, we would still have a deficit, but we could then pay down the debt during average and good time. This would require dramatic cuts, mostly in social service areas, maybe some in military spending. This is just fixing the symptom however, and what we need to do is bring jobs back to our shores. This means reverting back to a more protective stance and reducing tax rates on employers.

[Wild Cobra]

26 years actually. Trust fund projected to be broke by 2037.

In reality, we don't even have that long. 2037 is when the money runs out. SS has to start cashing in their treasuries in 2014. Oh, but that's three whole years away. Plenty of time...............
Actually, I'm pretty sure those numbers are obsolete with this new 4% SS rate that started in January.

[Jacob1983]

The fuckers in D.C. could care less about this. They're not hurting like most Americans are right now.

[CosmicCowboy]

You say that as if the funds will need to be paid all at once.

Ten trillion divided by a decade or three is not quite doomsday.

It is when you are already routinely running trillion dollar annual deficits.

Just wait till inflation kicks in and we see double digit interest on treasury debt.

[ElNono]

Whatever happens we will most likely have zero say about it and happily get screwed over...

[Nbadan]

You say that as if the funds will need to be paid all at once.

Ten trillion divided by a decade or three is not quite doomsday.

This.

Interest income will more than make up any projected deficit brought about by contributions through 2024, at which time, without a increase in the SS tax rate, we could see SS cashing in assets to pay benefits...at which point benefits can still be payed, at least at a 75% of scheduled benefits until 2084...


Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983. The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession and to an expected $25 billion downward adjustment to 2010 income that corrects for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy. After 2014 deficits are expected to grow rapidly as the baby boom generation’s retirement causes the number of beneficiaries to grow substantially more rapidly than the number of covered workers. The annual deficits will be made up by redeeming trust fund assets in amounts less than interest earnings through 2024, and then by redeeming trust fund assets until reserves are exhausted in 2037, at which point tax income would be sufficient to pay about 75 percent of scheduled benefits through 2084. The projected exhaustion date for the combined OASI and DI Trust Funds is unchanged from last year’s report.

[url=http://www.ssa.gov/oact/TRSUM/index.html]SS.gov[url]

it's very likely that the SS tax rate will be increased after 2012 and that the fund will remain solvent indefinitely...

[CosmicCowboy]

This.

Interest income will more than make up any projected deficit brought about by contributions through 2024, at which time, without a increase in the SS tax rate, we could see SS cashing in assets to pay benefits...at which point benefits can still be payed, at least at a 75% of scheduled benefits until 2084...



[url=http://www.ssa.gov/oact/TRSUM/index.html]SS.gov[url]

it's very likely that the SS tax rate will be increased after 2012 and that the fund will remain solvent indefinitely...

:lmao @ "the fund". There IS no FUND. The social security "lock box" has been raided and cleaned out and the money pissed off on other stuff. We can't balance the budget and are running trillion plus dollar deficits already. Where are those trillions gonna come from to pay social security back?

[Wild Cobra]

:lmao @ "the fund". There IS no FUND. The social security "lock box" has been raided and cleaned out and the money pissed off on other stuff. We can't balance the budget and are running trillion plus dollar deficits already. Where are those trillions gonna come from to pay social security back?
Some people just don't understand those simple facts.

[boutons_deux]

The current deficit is a revenue problem completely the result of VRWC policies to reduce govt revenue ("starve the beast" with tax cuts, tax evasion/avoidance, bullshit wars, financial deregulation, globalization, etc) and/or shovel Human-American taxes and to Corporate-Americans.

The revenue problem can be fixed by reversing those policies.

But VRWC head-lock (mental and financial locks) on govt means those policies will never be reversed, putting USA into permanent decline, and UCA into permanent ascendance and dominance. aka, USA is fucked and unfuckable.

[Nbadan]

Some people just don't understand those simple facts.

:rolleyes

if there is no fund, then no amount of private investments, or 401ks or any type of annuity is going to help you because our money would be worthless....the govt would rather monetize the debt than let it default...not that either one of those choices have to made anytime soon as I have already proven...

[Wild Cobra]

:rolleyes

if there is no fund, then no amount of private investments, or 401ks or any type of annuity is going to help you because our money would be worthless....the govt would rather monetize the debt than let it default...not that either one of those choices have to made anytime soon as I have already proven...
No, my 401k will help. It may not be worth as much as I have planned, but it's still better than not planning for my own retirement.

You miss what was said. The fund balance is zero. It has been spent. It is nothing but government IOU's. Now in this time of very high deficits and the need to repay some of it as more retire, it is more difficult to fix our economy.

[boutons_deux]

"The fund balance is zero. It has been spent."

Was there ever meant to a stagnant balance, just sitting there doing nothing? Lending the money to US government is much safer, even the bond markets say so, than poor fuckers whose 401's lost 30% in the Wall St casino, forcing them to keep working rather than retire.

Hitler's Baby Boomers are a demographic problem, compounded by the BB's kids having fewer kids.

Again, the most immediate problem is not SS cash flow, but the CORPORATE/DOCTOR greed pushing up medical prices 7% per year, so Medicare/Medicaid for 65+ people is going up, combined with the pathogenic lifestyles (corporate shit for food and no exercise).

The SS panic is totally fabricated, a transparent attempt to kill SS and divert those retirement funds into the Wall St casino, where they will be consumed by results-independent fees.

[Wild Cobra]

Again, the most immediate problem is not SS cash flow, but the CORPORATE/DOCTOR greed pushing up medical prices 7% per year, so Medicare/Medicaid for 65+ people is going up, combined with the pathogenic lifestyles (corporate shit for food and no exercise).

The SS panic is totally fabricated, a transparent attempt to kill SS and divert those retirement funds into the Wall St casino, where they will be consumed by results-independent fees.

Your opinion and strawman.

[boutons_deux]

what strawman?

The Repugs, as dubya's failed attempt showed, want to privatize SS. Do you deny that? What is the Repug "solution" for SS?

We see the Repug solution of CA budget crisis is to cut funds to old, disabled, sick, pretty much a mirror of what Repugs propose everywhere, while continuing $Ts in tax expenditures to the wealthy and corps.

[Wild Cobra]

what strawman?

The Repugs, as dubya's failed attempt showed, want to privatize SS. Do you deny that? What is the Repug "solution" for SS?

We see the Repug solution of CA budget crisis is to cut funds to old, disabled, sick, pretty much a mirror of what Repugs propose everywhere, while continuing $Ts in tax expenditures to the wealthy and corps.
Idiot.

They want to add a privatization option for individuals to opt out. Not make it mandatory for everyone.

Why do you liberals insist on these authoritarian policies of mandatory insurances?

[Agloco]

They kind of have to, given the trade imbalance, and their currency peg. The recent semi-"floating basket" is B.S. since that basket is likely dominated by dollars.

RG, consider me a rank novice on this but wasn't China being accused of artificially devaluing their currency? (terminology is probably off but...)

What benefits are derived from that exactly? I've read something about keeping exports higher and imports cheaper? Is that the trade imbalance you're talking about? Or is it a "physical" thing as in, we're getting 1 and they're taking 2 of whatever?

Anyone who cares to comment, I'd appreciate some education on the topic. :toast

[ElNono]

RG, consider me a rank novice on this but wasn't China being accused of artificially devaluing their currency? (terminology is probably off but...)

What benefits are derived from that exactly? I've read something about keeping exports higher and imports cheaper? Is that the trade imbalance you're talking about? Or is it a "physical" thing as in, we're getting 1 and they're taking 2 of whatever?

Anyone who cares to comment, I'd appreciate some education on the topic. :toast

There's many 'benefits', if you want to call it that, but in a nutshell the idea is that keeping the value of the currency low means that the purchasing power is kept low, so the competitive edge of low salaries and extended work hours is kept in place. If they would let their currency float freely, then the current salary would be able to buy much more, which normally translates in people not needing to work as much to keep the same standard of living. In the world of cheap labor, that's a loss in competitiveness.

[Agloco]

Again, the most immediate problem is not SS cash flow, but the CORPORATE/DOCTOR greed pushing up medical prices 7% per year, so Medicare/Medicaid for 65+ people is going up, combined with the pathogenic lifestyles (corporate shit for food and no exercise).

:lol

Doctors are pushing up prices? :lol



There's many 'benefits', if you want to call it that, but in a nutshell the idea is that keeping the value of the currency low means that the purchasing power is kept low, so the competitive edge of low salaries and extended work hours is kept in place. If they would let their currency float freely, then the current salary would be able to buy much more, which normally translates in people not needing to work as much to keep the same standard of living. In the world of cheap labor, that's a loss in competitiveness.

:tu

[boutons_deux]

"Doctors are pushing up prices'

sure they are. they get a slice of every test, drug, procedure they prescribe, aka fee-for-service, no matter what the outcome. aka "moral hazard". The more they prescribe, the more they make, and if they own the labs, even better, totally independent of the what the patient needs, and they hide behind "defensive medicine" scam.

Ever ask a doctor what something costs? They mostly don't know and don't care. Ever ask his staff what something costs? They don't know, they don't care. The insurance company sets the prices, all horribly complex, opaque, just like UCA likes their rip-offs.

A friend of mine had carotid and cardiac sonograms (all clear) and cardiac calcium CT scan (all clear). There was one little spec of plaque in one tiny section of one carotid. Absolutely no risk, but cardiologist prescribed the smallest, 5mg, Crestor statin, $1000 for 3 months.

Docs are now prescribing statins to 100% healthy people as pre-disease protection. fucking insane.

[Agloco]

"Doctors are pushing up prices'

sure they are. they get a slice of every test, drug, procedure they prescribe, aka fee-for-service, no matter what the outcome. aka "moral hazard". The more they prescribe, the more they make, and if they own the labs, even better, totally independent of the what the patient needs, and they hide behind "defensive medicine" scam.

Um, no we don't. As a matter of fact, in most cases now the more you prescribe, the more you lose. Compensation for labs and routine testing doesn't cover the cost usually. These articles reveal the reality of the situation:

http://rangelmd.com/2010/05/the-future-of-primary-care-compensation/

http://www.time.com/time/business/article/0,8599,2012443,00.html


Come again once you've been sued because Lab test X wasn't ordered despite it having no bearing on the clinical treatment course. I think lawyers should be looked at more closely.


Ever ask a doctor what something costs? They mostly don't know and don't care. Ever ask his staff what something costs? They don't know, they don't care. The insurance company sets the prices, all horribly complex, opaque, just like UCA likes their rip-offs.


Our staff asks those questions everyday and unfortunately it's a limiting factor for many patient treatments. Ultimately it's the patients choice whether or not to go ahead with the regimen.


A friend of mine had carotid and cardiac sonograms (all clear) and cardiac calcium CT scan (all clear). There was one little spec of plaque in one tiny section of one carotid. Absolutely no risk, but cardiologist prescribed the smallest, 5mg, Crestor statin, $1000 for 3 months.

As opposed to the cost of bypass surgery or cardiac cath, convalescence, and follow-up care on down the road. Any plaque can and usually will progress to something clinically significant. Just because it's benign today doesn't mean we can ignore it. Crestor is expensive, but there are cheaper alternatives out there. All one needs to do is ask.


Docs are now prescribing statins to 100% healthy people as pre-disease protection. fucking insane.

Again, as opposed to allowing those people who are naturally predisposed to CAD and hyperlipidemia to go unmanaged which invariably requires much more expensive care later. Preventive medicine is much cheaper overall in the long run.

[Wild Cobra]

I've tried to explain the litigation aspect increasing costs, but I get shouted down. Maybe you can convince these people.

[boutons_deux]

"explain the litigation aspect increasing costs, but I get shouted down"

no, your lie gets you bitch-slapped with the facts that show tort reform would have almost no effect on medical costs, as we see in TX.

[Wild Cobra]

"explain the litigation aspect increasing costs, but I get shouted down"
no, your lie gets you bitch-slapped with the facts that show tort reform would have almost no effect on medical costs, as we see in TX.
I agreed that particular tort reform was a joke, but you want to imply that it means all others solutions will fail.

Is your forgetful nature of remarks in past threads by accident or design?

[Agloco]

"explain the litigation aspect increasing costs, but I get shouted down"

no, your lie gets you bitch-slapped with the facts that show tort reform would have almost no effect on medical costs, as we see in TX.

B, I'm not saying that physicians are without fault, theres plenty of buddy-buddy going on. What I am saying is that anytime there's a substantial threat of litigation MD's will play CYA. Costs be dammed.

I'd like to see tort reform play a bigger part in things. I'm not versed on the specifics except that the attempt in Texas was a half-hearted one that yielded no substantial benefits.

[boutons_deux]

Treatments damage/kill patients, docs and staff make mistakes that damage/kill patients. One study a few years ago put the number of annual deaths from avoidable medical errors at about 90K.

Of all medical suits, how many are frivolous?

The "reform" proposed always seems to slam the court house door and cheat the plaintiffs, rather than change treatments and procedures to be less error prone. I read one report where an airline pilot's type of pre-flight checklist in the operating room gave huge reduction in errors, and costs fucking nothing. win-win-win.

[Agloco]

Treatments damage/kill patients, docs and staff make mistakes that damage/kill patients. One study a few years ago put the number of annual deaths from avoidable medical errors at about 90K.

Of all medical suits, how many are frivolous?

The "reform" proposed always seems to slam the court house door and cheat the plaintiffs, rather than change treatments and procedures to be less error prone. I read one report where an airline pilot's type of pre-flight checklist in the operating room gave huge reduction in errors, and costs fucking nothing. win-win-win.

Pretty obvious examples no? If a treatment kills or disables a patient, of course that patient is entitled to having his/her expenses taken care of. I'm speaking about bullshit like being awarded 500k because that surgical scar didn't turn out to look quite like you had hoped. There's a long list which I could share with you, but you get the idea. That's gotta go.

And sure, checklists are a matter of common sense. Unfortunately, you have some cocky docs who don't want to be bothered with such things. They'll rubber stamp a bunch of them at once and have someone else fill em out.

Seems to me that you've asked the million dollar question BD. Why don't you do some digging and give us an answer? That's one point which needs clarification.

The other point is that the mere threat of litigation will increase costs. That's just a fact that won't go away..........unless the ability to litigate goes away.

[Winehole23]

Off topic, but tangentially related to the last few posts:

http://www.washingtonmonthly.com/features/2010/1007.blake.html

[boutons_deux]

Off topic, but tangentially related to the last few posts:

http://www.washingtonmonthly.com/features/2010/1007.blake.html

I read about this guy and his gadget several weeks ago. Insanity supreme.

The sick-care system really does want everybody to be diseased, and if the sick-care system can maim you with the treatments/side-effects, It's All Good. They don't make money from healthy people.

BigFood doesn't make money from lean, fit people.

The sicker you are, and/or the worse the treatment side-effects, the more money for them. They don't want to cure you, just keep you a little less chronically fucked up so they can keep prescribing pills and treatments indefinitely.

[Agloco]

They don't want to cure you, just keep you a little less chronically fucked up so they can keep prescribing pills and treatments indefinitely.

There's no money in a cure.

[Wild Cobra]

There's no money in a cure.
On top of that, if we extended people's lives to 125, how do we address retirement?

Two things are certain in life. Taxes and death. I find it real selfish that people want to burden others over their selfish fear of death, that will cone eventually anyway.

[RandomGuy]

RG, consider me a rank novice on this but wasn't China being accused of artificially devaluing their currency? (terminology is probably off but...)

What benefits are derived from that exactly? I've read something about keeping exports higher and imports cheaper? Is that the trade imbalance you're talking about? Or is it a "physical" thing as in, we're getting 1 and they're taking 2 of whatever?

Anyone who cares to comment, I'd appreciate some education on the topic. :toast

Well it makes the goods produced in your country cheaper for other people to buy in other countries. They therefore buy more. It has the added effect of making imports to your country more expensive.

China used to have an "official" exchange rate of definite dollars to yuan/renmenbi, but have sinced loosed in a bit, and allowed it to float slightly.

The problem for China is that it has a massive trade imbalance, and is sucking in more and more euros and dollars.

This means that as time goes on, it becomes harder and harder to fight the market forces keeping your currency artificially low.

There is some debate as to whether the Chinese are really keeping the exchange rate artificially low, because they are experiencing some pretty steep rises in the costs of labor that are probably offsetting the trade imbalances.

The US, through its trade deficit, puts a LOT of dollars out there. As the supply of dollars goes up, that nominally should drive the "price" of those dollars down. Price being the exchange rates between currencies.

Hope this helps.

[RandomGuy]

Off topic, but tangentially related to the last few posts:

http://www.washingtonmonthly.com/features/2010/1007.blake.html

Shit that was long. And a bit depressing.

[Winehole23]

slightly relevant factoid: http://www.reuters.com/article/2012/01/03/us-gross-fund-redemptions-idUSTRE8021QY20120103

[boutons_deux]

slightly relevant factoid: http://www.reuters.com/article/2012/01/03/us-gross-fund-redemptions-idUSTRE8021QY20120103

"The self-styled "bond king," analysts say, is betting on the likelihood the Federal Reserve will also purchase those securities in a bid to boost the U.S. housing market."

much better would be massive expansion of what some banks are already doing: principal reductions for people very late or in foreclosure, so the banks avoid the expenses of owning the property (foreclosure fees, back taxes, taxes, insurance, maintenance, security...)