U.S. funding for future promises lags by trillions

[DarrinS]

http://www.usatoday.com/news/washington/2011-06-06-us-owes-62-trillion-in-debt_n.htm?csp=hf





The federal government's financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA TODAY analysis shows.

The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

This gap between spending commitments and revenue last year equals more than one-third of the nation's gross domestic product.

Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling.

STORY: Government's mountain of debt
Social Security added $1.4 trillion in obligations, partly reflecting longer life expectancies. Federal and military retirement programs added more to the financial hole, too.

Corporations would be required to count these new liabilities when they are taken on — and report a big loss to shareholders. Unlike businesses, however, Congress postpones recording spending commitments until it writes a check.

The $61.6 trillion in unfunded obligations amounts to $534,000 per household. That's more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.

"The (federal) debt only tells us what the government owes to the public. It doesn't take into account what's owed to seniors, veterans and retired employees," says accountant Sheila Weinberg, founder of the Institute for Truth in Accounting, a Chicago-based group that advocates better financial reporting. "Without accurate accounting, we can't make good decisions."

Michael Lind, policy director at the liberal New America Foundation's economic growth program, says there is no near-term crisis for federal retirement programs and that economic growth will make these programs more affordable.

"The false claim that Social Security and Medicare are about to bankrupt the United States has been repeated for decades by conservatives and libertarians who pretend that their ideological opposition to these successful and cost-effective programs is based on worries about the deficit," he says.

USA TODAY has calculated federal finances based on standard accounting rules since 2004 using data from the Medicare and Social Security annual reports and the little-known audited financial report of the federal government.

The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund's key asset: federal IOUs.

[Winehole23]

Cut spending, raise/reform taxes.

[Spurminator]

Cut spending, raise/reform taxes.

Not fair! Pick a side!

[Winehole23]

If the economy is still in the doldrums in 2013, stimulus will be politically viable again, no matter who wins the election.


(Sooner if we go back into recession.)

[TeyshaBlue]

If the economy is still in the doldrums in 2013, stimulus will be politically viable again, no matter who wins the election.


(Sooner if we go back into recession.)

It better be front-loaded this time. Fucking cut checks to citizens to pump back into the economy as they see fit.

[Viva Las Espuelas]

It better be front-loaded this time. Fucking cut checks to citizens to pump back into the economy as they see fit.

That would take another easing. I think it would be our death knell tbh

[MannyIsGod]

The stimulus boat has passed. The problem now is that politicians can spin it as having failed when in reality there simply wasn't enough effective stimulus. We should have spent that money yesterday and we would have seen a more robust recovery as well as improvement in areas such as infrastructure but that boat has sailed. I don't see how stimulus in the native sense becomes palatable in 2013.

No, now instead of spending that money at that point in time we'll deal with shortfalls in revenue that will surpass what we should have spent.

[Winehole23]

It better be front-loaded this time. Fucking cut checks to citizens to pump back into the economy as they see fit.:tu

[TeyshaBlue]

Daddy needs new shooz.

[boutons_deux]

Repugs will block ANY EFFORT by the Dems to get the economy moving.

As in the 2010 election, the Repugs want THEIR disastrous economy to continue to 2012 while continuing to blame everything on the Dems.

[Winehole23]

The stimulus boat has passed... I don't see how stimulus in the native sense becomes palatable in 2013.Fair enough, but people could be mis-undersestimating the human misery entailed by the next leg down. When added to the misery of the first down leg, we could be talking serious immiseration by first world standards.

No, now instead of spending that money at that point in time we'll deal with shortfalls in revenue that will surpass what we should have spent.In other words, the stimulus was a failure -- far too small to make a politically detectable diffference.

Maybe Obama should've gone for a much bigger one. Maybe you're right that the moment has passed for that. I tend to think unemployment will continue to be a burr to whoever is in power, may even become worse of one. Lotta state workers gonna lose their jobs in the next few years.

[boutons_deux]

"the stimulus was a failure"

not because it was a bad idea (Keynesian counter-cyclical spending) but because it was too small compared to the Depression

"Obama should've gone for a much bigger one"

Repugs would have blocked it

I'm reading about "full-employment" structural unemployment movfing for 4.5-5% to 7 or 8%. Millions of people are going to be very fucked, very 3rd world-y.

[DarrinS]

stimulus just wasn't big enough?


Mmmmkay.

[ChumpDumper]

No, the tax cuts weren't big enough.

[MannyIsGod]

Fair enough, but people could be mis-undersestimating the human misery entailed by the next leg down. When added to the misery of the first down leg, we could be talking serious immiseration by first world standards.
In other words, the stimulus was a failure -- far too small to make a politically detectable diffference.


Well I think I've stated that it was too small all a long. I take issue with the wording that it was a failure though. It did was it was supposed to do, it just wasn't enough. The failure wasn't the stimulus but rather in the amount used which isn't a knock on stimulus but those making the decisions.

I think its a very important distinction to make for obvious reasons.




Maybe Obama should've gone for a much bigger one. Maybe you're right that the moment has passed for that. I tend to think unemployment will continue to be a burr to whoever is in power, may even become worse of one. Lotta state workers gonna lose their jobs in the next few years.

Yeah, this might be true. Its hard to see 2 years into the future the way the political winds change to quickly. I find it hard to see that happening, but that may just be a knock on my perception more than anything.

[MannyIsGod]

BTW I just figured out where that Teysha Blue sounds remarkably close to Deja Vu. I feel as slow as DarrinS.

:(

[DarrinS]

It was a great time to focus so much energy on the bureaucratic clusterfuck known as Obamacare.

[George Gervin's Afro]

The tax cuts for the wealthy have saved this economy!

[TeyshaBlue]

BTW I just figured out where that Teysha Blue sounds remarkably close to Deja Vu. I feel as slow as DarrinS.

:(

Naptime, little fella.:lol

[boutons_deux]

It was a great time to focus so much energy on the bureaucratic clusterfuck known as Obamacare.

What specifically did you want him to do differently, that was permissible to the Repugs?

[Wild Cobra]

Cut spending, raise/reform taxes.
How bout only a little of both. Simplify taxes, reduce corporate taxes, and cut necessary spending like subsidies to start with. Tax reform like implementing a similar idea to "The Fair Tax" will collect revenue hidden from taxation and tax people on what the can afford to spend.

The problem isn't the tax rate so much as it is our exportation of good wage jobs. The solution is to improve our economy, and get more tax revenue by having more tax payers. Not tax ourselves out of more jobs. We need to make able bodied people work, even if it's low wage jobs instead of paying them to be lazy in those hammocks they made from abusing the safety nets.

[DMX7]

Obamaaaaaaaaaaaaa!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!

[Wild Cobra]

Obamaaaaaaaaaaaaa!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!
Yes...

Our future only sees change in our pockets.

No more dead presidents.

[ElNono]

How bout only a little of both. Simplify taxes, reduce corporate taxes, and cut necessary spending like subsidies to start with. Tax reform like implementing a similar idea to "The Fair Tax" will collect revenue hidden from taxation and tax people on what the can afford to spend.

Don't they already pay zero or even get money back?

[Wild Cobra]

Don't they already pay zero or even get money back?
That needs to be fixed, and you know I am in favor of ending tax credits, which are too much like subsidies. You know my take on subsidies.

Last paragraph of Definition of a Tax Credit (http://www.businesstaxrecovery.com/articleupdates/definition-tax-credit):

Credits and Deductions are often confused in the taxpayer’ mind when tax preparation time arrives. It is important to understand the distinction. Dollar for dollar, the credit will always be a better deal because it is directly subtracted from the tax owed. The deduction only reduces the taxable income and is dependent on the tax rate. In the case of certain items such as medical expenses, the deductions must exceed a certain amount before they result in any savings at all. The credit will always result in a savings.
What it doesn't say is that a credit adds to your effective tax taken out. If it is more than your taxes owed based on taxable income, you get money back you never paid in.

Now if a business has no taxable income, then sure, they shouldn't pay any.

[ElNono]

Then the first order is to fix the political system and tax code not to unfairly favor those that have the most. Good luck with that.

[ChumpDumper]

Which large corporation paid the full corporate income tax, WC?

[Wild Cobra]

Then the first order is to fix the political system and tax code not to unfairly favor those that have the most. Good luck with that.
It should be neutral. Problem is, taxing is one of congress' largest control over the people. they will not give it up easily by creating a neutral system.

[Wild Cobra]

Which large corporation paid the full corporate income tax, WC?
I'll bet its so few that I'm not going to bother looking.

Do you know?

I think corporate tax rates are too high, but I am in favor of eliminating all tax credits.

[ElNono]

It should be neutral. Problem is, taxing is one of congress' largest control over the people. they will not give it up easily by creating a neutral system.

What do you mean neutral? And how do you reconcile that with the realities of lobbying, secret campaign finance, etc?

[Wild Cobra]

What do you mean neutral? And how do you reconcile that with the realities of lobbying, secret campaign finance, etc?
Like I said, it will be hard to get congress to let go of that power. We need to start by voting out politicians who abuse that power.

[boutons_deux]

"by voting out politicians"

won't make any difference. All politicians will suck off anything for quid-pro-quo donations. DC is completely corrupt, tea baggers included.

Voting is a charade, US democacy a sham.

Human-Americans are completely disenfranchised by corporate and capitalist money.

[Wild Cobra]

"by voting out politicians"

won't make any difference. All politicians will suck off anything for quid-pro-quo donations. DC is completely corrupt, tea baggers included.

Voting is a charade, US democacy a sham.

Human-Americans are completely disenfranchised by corporate and capitalist money.
Only because so many people like you have given up. But it's really not that. Most people don't realize what they are doing. Politicians are buying your vote. They tell you they will take something away (tax dollars) and give to you. You vote for these people. Am I right or wrong?

[ElNono]

Like I said, it will be hard to get congress to let go of that power. We need to start by voting out politicians who abuse that power.

So your proposal is utopian... should've started there...

[Wild Cobra]

So your proposal is utopian... should've started there...
Yep.

It's impossible to talk the wolves out of not voting to have the sheep for dinner.

[Winehole23]

(bailed)

[2centsworth]

:tu

I thought you were against tax cuts?

Do away with social security taxes for 2 years. That way people decide how
To spend stimulus.

[Winehole23]

Why not? I'm not doctrinaire.

[Winehole23]

Bypassing the financial intermediaries would probably be a good idea next time around. Better to hit people directly in their pocketbooks.

[2centsworth]

Why not? I'm not doctrinaire.

It all comes from the same place. The question
Is do you want government to determine
Where to spend or people?

In recession I prefer people, in periods of growth
I prefer government.

[coyotes_geek]

Do away with social security taxes for 2 years.

The thread is titled "U.S. funding for future promises lags by trillions". Getting rid of SS taxes for 2 years would only make it worse.


That way people decide how
To spend stimulus.

This has already been tried multiple times going all the way back to the $600 checks Bush sent out four years ago. It's failed miserably each time. The "give them money and cross your fingers" approach to economic stimulus simply does not work.

[Winehole23]

999

[boutons_deux]

shrub's $600 checks was $180B

Barry's stimulus was was few $100B

Krugman, Reich, etc said the size of the way-too-small stimulus should have been $2T+ to match better the size of he Banksters' Great Depression.

Rolling ALL taxes back to 1975 would fix the deficit quick. Higher taxes stimulate investment (rather than profit taking).

Then stop both wars and cut $500B/year off the MIC and State Department Imperial spending, garrisoning of the planet which runs about $1.3T/year.

[2centsworth]

The thread is titled "U.S. funding for future promises lags by trillions". Getting rid of SS taxes for 2 years would only make it worse.



This has already been tried multiple times going all the way back to the $600 checks Bush sent out four years ago. It's failed miserably each time. The "give them money and cross your fingers" approach to economic stimulus simply does not work.

We have an aggregate demand problem that's
Killing tax revenue. Cutting social security taxes
Is a lot more than $600. On average it amounts to
An extra 300 bucks per month.

Now that will stimulate this economy and generate more tax
Revenue.

[Wild Cobra]

We have an aggregate demand problem that's
Killing tax revenue. Cutting social security taxes
Is a lot more than $600. On average it amounts to
An extra 300 bucks per month.

Now that will stimulate this economy and generate more tax
Revenue.
Cutting SS insurance completely on wage earners would only give the top wage earners $373.80 a month more. Us little people would get to keep $35 more monthly for every $10k we earn annual.

The 2011 SS insurance cut I say was a mistake. However, the highest wage earners only get a $178 per month break.

SS insurance for 2011 went down to 4.2% from 6.2% (-2%). The cap is at $102,000. 0.2 x $102,000 = $2,136 annual, or $178 a month.

This is a savings of $200 for every $10k annually, up to the limit. $50 monthly for every $30k annual.

[MannyIsGod]

Spending absolutely generates revenue in the form of taxes which is why stimulus never burdens with the entirety of its cost. This country drastically needs infrastructure improvements yet where is the political will to spend the money to fix our country which would in turn do worlds of wonder for the economy. Instead we tell people to go out and buy a PS3 when instead we could make a worthwhile investment in ourselves.

[Wild Cobra]

Spending absolutely generates revenue in the form of taxes which is why stimulus never burdens with the entirety of its cost. This country drastically needs infrastructure improvements yet where is the political will to spend the money to fix our country which would in turn do worlds of wonder for the economy. Instead we tell people to go out and buy a PS3 when instead we could make a worthwhile investment in ourselves.
If the past stimulus packages were all geared to infrastructure that actually created jobs, instead of bailing out the rich, I wouldn't be so against it. However, we are financially is such a deep hole, I don't see more spending practical.

I say it will now be a long slow path to a recovery that will never happen if we don't bring manufacturing jobs back home. To do this, we must do what ever we can to encourage business to start manufacturing here again, and have a reasonable trade balance.

Look what we have lost over the years.

Timber industry... mostly outsourced.

Steel industry... mostly outsourced.

Cars industy... highly outsourced.

Consumer electronics... almost completely outsourced.

etc.
etc.
etc.

[ElNono]

We're just not competitive... you could go full protectionist, but that's really not a solution, but a bandaid. Either way you'll see a fairly heavy decrease in the standard of living.

[2centsworth]

Cutting SS insurance completely on wage earners would only give the top wage earners $373.80 a month more. Us little people would get to keep $35 more monthly for every $10k we earn annual.

The 2011 SS insurance cut I say was a mistake. However, the highest wage earners only get a $178 per month break.

SS insurance for 2011 went down to 4.2% from 6.2% (-2%). The cap is at $102,000. 0.2 x $102,000 = $2,136 annual, or $178 a month.

This is a savings of $200 for every $10k annually, up to the limit. $50 monthly for every $30k annual.

Your math is off. Median Income is $51,000 @ 6.2% per year that's $263.5 per month. An extra $263.5 per month for the average household would go a long way!

That, in my opinion, would stimulate aggregate demand (sales).

Short-term fix, but is what I would prefer the stimulus to look like.

[Wild Cobra]

Your math is off. Median Income is $51,000 @ 6.2% per year that's $263.5 per month. An extra $263.5 per month for the average household would go a long way!

That, in my opinion, would stimulate aggregate demand (sales).

Short-term fix, but is what I would prefer the stimulus to look like.
No, your math is off. The current SS rate is 4.2%.

---ooops---

Part of mine is off. I calculated part of the SS at $102k cap rather than $106.8k cap.

[Wild Cobra]

Here is my corrected responce, a redo of post #45:

Cutting SS insurance completely on wage earners would only give the top wage earners $373.80 a month more. Us little people would get to keep $35 more monthly for every $10k we earn annual.

The 2011 SS insurance cut I say was a mistake. However, the highest wage earners only get a $178 per month break.

SS insurance for 2011 went down to 4.2% from 6.2% (-2%). The cap is at $106,800. 0.2 x $106,800 = $2,136 annual, or $178 a month.

This is a savings of $200 for every $10k annually, up to the limit. $50 monthly for every $30k annual.

[2centsworth]

No, your math is off. The current SS rate is 4.2%.

---ooops---

Part of mine is off. I calculated part of the SS at $102k cap rather than $106.8k cap.


No dude, your math is off, but it's is par for the course for you. $50 monthly savings for every $35k in income :rollin

[2centsworth]

Here is my corrected responce, a redo of post #45:

Cutting SS insurance completely on wage earners would only give the top wage earners $373.80 a month more. Us little people would get to keep $35 more monthly for every $10k we earn annual.

The 2011 SS insurance cut I say was a mistake. However, the highest wage earners only get a $178 per month break.

SS insurance for 2011 went down to 4.2% from 6.2% (-2%). The cap is at $106,800. 0.2 x $106,800 = $2,136 annual, or $178 a month.

This is a savings of $200 for every $10k annually, up to the limit. $50 monthly for every $30k annual.

Dude, you're sounding more and more retarded. Here it is in simple terms. don't make it any more complicated.

$51,000 median income. 6.2% tax ( i'm aware of the tax cut). 6.2% x $51,000 per year = $3162 per year. $3162/12 = $263 per month.

[Wild Cobra]

Median Income is $51,000 @ 6.2% per year that's $263.5 per month. An extra $263.5 per month for the average household would go a long way!

$51,000 @ 4.2% per year is $178.5 per month.

If anything SS insurance rates need to be increased. Not decreased. It's part of the pot the government spends out of. We need more tax payers, not less.

Want to increase the spending of consumers, eliminate tax deductions and tax credits, and make a flat way somewhere between 20% to 25%. make it so consumers and business know what to expect year to year.

I know, you will cry for the poor, but everyone should pay taxes. Leave in exemptions. That's all any of us need at most. I would personally do away with all exemptions as well and tax at about 16% to 19%.

This idea of completely eliminating SS for a few years is real scary. This is the type of thing that when it's time to start again, there will be enough voices that cry "raising taxes on the poor" and calling it "regressive" that once eliminated, it will never return. Then we get to a point where more than 50% have no money supporting government costs. they will then, not only put politicians in place who give them free health care, but shoot for the sky. Free cars, free houses, etc. etc. etc.

[Wild Cobra]

No dude, your math is off, but it's is par for the course for you. $50 monthly savings for every $35k in income :rollin
Look again.

That is the current savings for 2011 vs. 2010.

The SS rate in 2010 was 6.2%. It is 4.2% for 2011. That is a 2% difference. 2% of $30k is $600. $600/12=$50.

You are misquoting me. I said $30k not $35k. I can't change what's in my quote of your quote in post #49. see for yourself. I said $30k.

The only mistake I made as the $102k vs. the $106.6k. Though I wrote down the wrong number, I still calculated at the $106.8k.

[Agloco]

shrub's $600 checks was $180B

After five days of open bar action, it took me a while to figure out who "shrub" was...... :lol

I hope Barry pulls a shrub plus then. I think Teysha mentioned it: Let me decide which watering hole to support.

As my limited knowledge of finance and government debt goes, shouldn't the government take a page from the average American household? For us it's not about our salary, it's about our expenditures. Why is the paradigm different at the federal level?

[Wild Cobra]

After five days of open bar action, it took me a while to figure out who "shrub" was...... :lol

I hope Barry pulls a shrub plus then. I think Teysha mentioned it: Let me decide which watering hole to support.

As my limited knowledge of finance and government debt goes, shouldn't the government take a page from the average American household? For us it's not about our salary, it's about our expenditures. Why is the paradigm different at the federal level?
It shouldn't be any different, but all spending is someone's sacred cow.

I say start eliminating subsidies and eliminate programs that are controversial as being authorized for congress by constitution.

Simplify taxation and phase out, or significantly reduce the IRS.

We were just fine before the Department of Education was started. Actually better before government started with it's nationalized standards. Now schools are teaching to the lowest common denominator. I say phase out this department and others.

One by one, no single cost will fix it. Find several and add the costs together, and we make some headway.

We simply have too big of a government. We don't need this much.

At the end of the day, I'm glad I don't get as much government as I pay for. Too much BS already.

Then there is the never ending cry for more individual tax credits and tax deductions. I'm sorry, fix this with that simplified tax structure. Redistribution or wealth via tax credits is simply wrong.

[ElNono]

As my limited knowledge of finance and government debt goes, shouldn't the government take a page from the average American household? For us it's not about our salary, it's about our expenditures. Why is the paradigm different at the federal level?

Because it's not their money and their job isn't dependent on it, at least in the short term. It's like running a company with 500+ treasurers. Add the fact that the fiduciary duty is to donors/lobbyists and you have the recipe for disaster.

All that said, it's not democracy that's the problem. It's the fact that over time politics stopped being about the people, but shifted into appeasing the largest interests who funnel enough money for the candidates to run (which nowadays is obviously a lot of dough). It's a really fucked up vicious circle, and killing legislation that barred secret campaign contributions only enhance it.

[ElNono]

It shouldn't be any different, but all spending is someone's sacred cow.

I say start eliminating subsidies and eliminate programs that are controversial as being authorized for congress by constitution.

Simplify taxation and phase out, or significantly reduce the IRS.

We were just fine before the Department of Education was started. Actually better before government started with it's nationalized standards. Now schools are teaching to the lowest common denominator. I say phase out this department and others.

One by one, no single cost will fix it. Find several and add the costs together, and we make some headway.

We simply have too big of a government. We don't need this much.

At the end of the day, I'm glad I don't get as much government as I pay for. Too much BS already.

Then there is the never ending cry for more individual tax credits and tax deductions. I'm sorry, fix this with that simplified tax structure. Redistribution or wealth via tax credits is simply wrong.

Any thoughts on military spending? You know, the largest spending outside of interest payments?

There's no silver bullet. It's going to have to be an increase in revenue through a tax hike and at the same time cutting on spending across the board.

[Wild Cobra]

Any thoughts on military spending? You know, the largest spending outside of interest payments?
Well, we still have the lowest military spending both war time and peace time as a percentage of government spending as in the decades past.

It's social spending that keeps rising uncontrolled. I will agree we can find military cuts.

Here, I took the time to back up what I am saying. From the CBO:


I extracted the data from Table 4.1—Outlays by Agency: 1962–2016 (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist04z1.xls) and removed these last line items before totaling the columns and converting to percentage:

Social Security Administration (On-Budget)
Social Security Administration (Off-Budget)
Other Independent Agencies (On-Budget)
Other Independent Agencies (Off-Budget)
Allowances
Undistributed Offsetting Receipts
(On-budget)
(Off-budget)

I did so because SS is suppose to be it's own entity, and the other minor numbers had no data for some years. I could go back and replace the .... with zeros.

Anyway, look at how military spending was a major part of the budget in the past. Look at how the social welfare system has clearly beaten out military spending.

http://i181.photobucket.com/albums/x262/Wild_Cobra/Politics/CBOtable04z150pct.jpg

Why is the IRS and other treasury functions so high? Think we should simplify the tax system?

I suggest you research the OMB (http://www.whitehouse.gov/omb/) site sometime, instead of listening and repeating other people's propaganda. This table and others are found here (http://www.whitehouse.gov/omb/budget/Historicals/).

[Wild Cobra]

There's no silver bullet. It's going to have to be an increase in revenue through a tax hike and at the same time cutting on spending across the board.
We do not need to increase taxes. That is counterproductive, especially in times like this where the long term damage is more than the short term gain.

We need more tax payers. We now have a systems where something like 47% of all tax filers pay no net money, or get more back than they paid in. This is a ridiculously high number. We need to fix the problems that cause this to happen, not amplify them by pushing more job providers to outsource labor.

[ElNono]

Well, we still have the lowest military spending both war time and peace time as a percentage of government spending as in the decades past.

...



I don't have Excel here, but something doesn't jive there... This is the 2010 federal budget:

The President's budget request for 2010 totals $3.55 trillion. Percentages in parentheses indicate percentage change compared to 2009. This budget request is broken down by the following expenditures:

Mandatory spending: $2.173 trillion (+14.9%)
$695 billion (+4.9%) – Social Security
$571 billion (+58.6%) – Other mandatory programs
$453 billion (+6.6%) – Medicare
$290 billion (+12.0%) – Medicaid
$164 billion (+18.0%) – Interest on National Debt

Discretionary spending: $1.378 trillion (+13.8%)
$663.7 billion (+12.7%) – Department of Defense (including Overseas Contingency Operations)
$78.7 billion (−1.7%) – Department of Health and Human Services
$72.5 billion (+2.8%) – Department of Transportation
$52.5 billion (+10.3%) – Department of Veterans Affairs
$51.7 billion (+40.9%) – Department of State and Other International Programs
$47.5 billion (+18.5%) – Department of Housing and Urban Development
$46.7 billion (+12.8%) – Department of Education
...

The figures come from the GAO (link) (http://www.gpoaccess.gov/usbudget/fy10/pdf/fy10-newera.pdf).

The 2009 budget (while Dubya was still the emperor) wasn't much different:

The President's budget for 2009 totals $3.1 trillion. Percentages in parentheses indicate percentage change compared to 2008. This budget request is broken down by the following expenditures:

Mandatory spending: $1.89 trillion (+6.2%)
$644 billion - Social Security
$408 billion - Medicare
$224 billion - Medicaid and the State Children's Health Insurance Program (SCHIP)
$360 billion - Unemployment/Welfare/Other mandatory spending
$260 billion - Interest on National Debt

Discretionary spending: $1.21 trillion (+4.9%)
$515.4 billion - United States Department of Defense
$145.2 billion(2008*) - Global War on Terror
$70.4 billion - United States Department of Health and Human Services
$68.2 billion - United States Department of Transportation
$45.4 billion - United States Department of Education
$44.8 billion - United States Department of Veterans Affairs
$38.5 billion - United States Department of Housing and Urban Development
....

-------

After Social Security, the DoD is second, and by a relatively wide margin.

[ElNono]

We do not need to increase taxes.

I disagree.


We need more tax payers. We now have a systems where something like 47% of all tax filers pay no net money, or get more back than they paid in.

That's not true, unless you're specifically talking about income taxes.


This is a ridiculously high number. We need to fix the problems that cause this to happen, not amplify them by pushing more job providers to outsource labor.

A lot of those job providers already have tax exemptions and STILL outsource simply because labor is simply beyond cheap overseas, due to much cheaper standards of living. A change in tax code won't make the American worker suddenly accept to work for $10/hour.

[Winehole23]

The thread is titled "U.S. funding for future promises lags by trillions". Getting rid of SS taxes for 2 years would only make it worse. Regardless, you continue to invest in people. Throw em a goddam bone. Things are tough all over, and they/we are the godammed future.

This has already been tried multiple times going all the way back to the $600 checks Bush sent out four years ago. It's failed miserably each time. The "give them money and cross your fingers" approach to economic stimulus simply does not work.If it makes people feel better, maybe it's worth it...

[Winehole23]

...for the politicians.

[Winehole23]

Regardless, if we get another bite at the apple, we can do it better next time. Policy more focused on people isn't a bad angle at all.

[Capt Bringdown]

http://1.bp.blogspot.com/-5M2yPgciq4E/TdUdLngEGmI/AAAAAAAAAPM/0Vgsb6m5isM/s640/taxnobarriergrowth.jpg

[coyotes_geek]

We have an aggregate demand problem that's
Killing tax revenue. Cutting social security taxes
Is a lot more than $600. On average it amounts to
An extra 300 bucks per month.

Now that will stimulate this economy and generate more tax
Revenue.

It would if everyone would actually use that money to go spend on things that they would not have bought otherwise. The fundamental failure of the "give away money & hope" approach to stimulus is that people are afraid right now. A large percentage of the population would simply take their $300 a month and apply it towards things that produce no short term stimulative benefit whatsoever. Things like putting the money into savings. Paying down debt. Investing in retirement accounts (anyone with a brain should be able to figure out that if you get rid of SS taxes for 2 years there's going to be a price to be paid for that somewhere down the road). Or maybe they need the money to simply be able to sustain their current expenditures.

From a personal finance standpoint, each of those causes are far more intelligent use of extra money than spending it. From an economic standpoint, those causes are what makes that entire approach to stimulus ineffective. People are worried about their jobs. I don't see all that large a percentage of them saying to themselves "Gee, I might get laid off any day now, but I've got this extra $300 so I'm going to go buy an X-box."

If you believe that the government has a responsibility to try and create aggregate demand, the efficient way to go about it is to have the government be the entity demanding goods and services, not just some giant entity handing out free money in hopes that demand magically creates itself. Invest in infrastructure. Hell, go down to the unemployment office and hire people to pick up trash and clean graffiti. Put people back to work by, gasp, hiring them to do some work.


Regardless, you continue to invest in people. Throw em a goddam bone. Things are tough all over, and they/we are the godammed future.

If it makes people feel better, maybe it's worth it...

Isn't that attitude how we ended up with this huge funding gap in the first place?


http://1.bp.blogspot.com/-5M2yPgciq4E/TdUdLngEGmI/AAAAAAAAAPM/0Vgsb6m5isM/s640/taxnobarriergrowth.jpg

As a prefice, I don't have a problem going back to the Clinton-era tax rates for all tax brackets. But when looking at this chart one does need to keep in mind that Clinton caught the good part of the tech bubble and Bush caught the bad part. GDP and employment growth were going to be better in the 90s than the 00s no matter whose tax rates were in effect.

[Winehole23]

Isn't that attitude how we ended up with this huge funding gap in the first place?In fairness, 2cents specified its appropriateness of this attitude for recessions. Not at all times.

[Wild Cobra]

I don't have Excel here, but something doesn't jive there... This is the 2010 federal budget:

<snip>
What you listed is the presidents request, and the "mandatory spending" isn't broken down. I didn't try to make heads or tails of it, but the "request" is not necessarily what congress passes. The numbers I presented are the actual money spend per department up to FY 2010 and estimated for 2011+

I suggest you get excel and download some of those links. Don't believe me. See what the OMB is required by law to report.

I'll tell you what. I will make another plot with all lines. We will see how SS fits in.

[ElNono]

What you listed is the presidents request, and the "mandatory spending" isn't broken down. I didn't try to make heads or tails of it, but the "request" is not necessarily what congress passes. The numbers I presented are the actual money spend per department up to FY 2010 and estimated for 2011+

I understand that the requested amount is not the actual appropriated amount for discretionary spending, but there has to be some correlation, not entire heads and tails. I actually have Excel here at work, and the table you used as source is missing some items (like Debt Interest Payments) and also lumps things such as Medicare-Medicaid into the Department of Health and Human services, which has both mandatory and discretionary spending.

Even then, the expenses for 2010 are still (this is from the table you linked and graphed):

$854 billion - Department of Health and Human Services (includes mandatory Medicare - Medicaid)
$754,1 billion – Social Security
$666,7 billion - Department of Defense (including Overseas Contingency Operations)
$444,3 billion - Treasury (this is very likely still cost for the TARP (http://thehill.com/blogs/on-the-money/banking-financial-institutions/99587-cbo-expects-feds-payments-to-treasury-will-nearly-double-in-the-next-two-years))
$129,4 billion - Department of Agriculture
$108,2 billion - Department of Veterans Affairs

Which more or less matches with the budget requests posted previously.

[Wild Cobra]

I haven't started graphing the numbers yet, but you may want to look at this PDF:

Historical tables (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf)

Pages 47 to 55 (pdf pages 51-59) are titled Table 3.1—OUTLAYS BY SUPERFUNCTION AND FUNCTION: 1940–2016. 2010 numbers are:

20.1% National defense
69.0% Human resources
2.6% Physical resources
5.7% Net interest
5.0% Other functions
-2.7% Undistributed offsetting receipts

Other good pages too. I just started scanning it.

[ElNono]

I haven't started graphing the numbers yet, but you may want to look at this PDF:

20.1% National defense
69.0% Human resources
2.6% Physical resources
5.7% Net interest
5.0% Other functions
-2.7% Undistributed offsetting receipts

Other good pages too. I just started scanning it.

But you can't lump all of them together. IE: You can't make Social Security, Medicare and Medicaid suddenly disappear. You can tweak it's eligibility to make reductions, but that's about it. Also, making any changes require passing a law (AFAIK anyways).

On the other hand, Defense is strictly discretionary. You don't need to pass a law to make cuts there.

[Wild Cobra]

Well, here's the complete graph with SS.

http://i181.photobucket.com/albums/x262/Wild_Cobra/Politics/CBOtable04z1complete50pct.jpg

I think the non federal interest is included in the treasury number and that the interest to the other US programs like owed to SS are included in the Undistributed Offsetting Receipts. This is just a guess, I didn't search if my guess is correct.

When you claim the military spending is the highest, that is only true when looking at discretionary spending. Want to cut the budget?

I forget which table on the PDF file I linked last post, but one of the tables shows that Obama's debt is double what it was 7 years ago, and as high as during WWII.

[Wild Cobra]

But you can't lump all of them together. IE: You can't make Social Security, Medicare and Medicaid suddenly disappear. You can tweak it's eligibility to make reductions, but that's about it. Also, making any changes require passing a law (AFAIK anyways).

On the other hand, Defense is strictly discretionary. You don't need to pass a law to make cuts there.
The point is that Social Spending is the highest outlay, and is not a constitutional addressed item.

I purposely left out SS the first time I did the graph because it is suppose to be a separate program from tax revenues.

Look at the PDF I linked. There are different tables broken down different ways.

[boutons_deux]

"Obama's debt"

.... completely due to the shitpile he inherited by 8 years of Repug misrule, and 30 years of VRWC policies.

Barry's first year budget was smaller than dubya's last year budget.

[ElNono]

The point is that Social Spending is the highest outlay, and is not a constitutional addressed item.

What do you mean by "not a constitutional addressed item"?
Article I, Section 8, Clause 1 disagrees.

And Military spending might not be the highest, but it's absolutely way beyond any other non-discretionary spending, basically in the same realm as mandatory programs like Social Security.

Again, there's no silver bullet. Cuts are going to have to come from all areas, and principally from the biggest spenders, like Medicare, Medicaid, SS and the DoD.


I purposely left out SS the first time I did the graph because it is suppose to be a separate program from tax revenues.

It's still an outlay that needs to be budgeted and accounted for.


Look at the PDF I linked. There are different tables broken down different ways.

The first table you referenced has basically all the information you need as far as what we're discussing. It backs up my contention that Military spending is among the top 4 heaviest outlays, and by a wide margin compared with the rest. Thanks for providing the link.

[MannyIsGod]

CG has a point. I have razor thing margins right now and if I got a 600 dollar stimulus check that shit isn't getting spent - its going right into my savings account because I'll more than likely need it in the near future.

[ElNono]

I agree the better 'stimulus' would come from direct temporary govt employment, much in the same way that it did in WWII and got us out of the Great Depression.

[Winehole23]

CG has a point. I have razor thing margins right now and if I got a 600 dollar stimulus check that shit isn't getting spent - its going right into my savings account because I'll more than likely need it in the near future.What if it was a $5000 check?

[Capt Bringdown]

Deficit hawks: Don't go nuts on cuts (http://money.cnn.com/2011/06/09/news/economy/federal_spending_cuts/index.htm)


Some top deficit hawks from the left and right are flashing a warning sign: Making too many federal spending cuts now will hurt the economy.

These are the same folks, mind you, who have been preaching the perils of debt long before the cut-now-or-else Tea Party came to town.

And their message comes at a time when Republicans are pushing for trillions in federal spending cuts -- with as much in the near-term as possible -- in exchange for raising the country's debt ceiling.

[Capt Bringdown]

I agree the better 'stimulus' would come from direct temporary govt employment, much in the same way that it did in WWII and got us out of the Great Depression.


We didn't get adequate sized fiscal stimulus until it became a matter of national security, but the economics don't dictate that it has to be a war, a massive fiscal stimulus could be done for peaceful, productive purposes.

[ElNono]

We didn't get adequate sized fiscal stimulus until it became a matter of national security, but the economics don't dictate that it has to be a war, a massive fiscal stimulus could be done for peaceful, productive purposes.

Oh, I agree. And you could put that people to work on things like infrastructure, where you need to make the investment sooner or later anyways.

[Capt Bringdown]

Oh, I agree. And you could put that people to work on things like infrastructure, where you need to make the investment sooner or later anyways.

Too bad our current politics preclude this from happening. We aren't suffering from a gridlock that prevents action, but rather a monism that is supply-side economics.

IMO, without a real, actual Left/Labor voice, things will only get worse for American workers. Neocons or Neolibs, what's the difference? Both are for austerity.

[2centsworth]

I agree the better 'stimulus' would come from direct temporary govt employment, much in the same way that it did in WWII and got us out of the Great Depression.

Way too isolated and slow. The best stimulus
Is a payment of about 300 per month to each working
Individual for the next 24 months.

We have a customer problem in this economy.
Time to help the customer. We will see a trickle
Up affect.

[boutons_deux]

"300 per month to each working"

That will get a lot of bridges, dams, electrical grid, roads, sewers, water systems, solar power facilities built and maintained.

[Capt Bringdown]

Way too isolated and slow. The best stimulus
Is a payment of about 300 per month to each working
Individual for the next 24 months.

We have a customer problem in this economy.
Time to help the customer. We will see a trickle
Up affect.

This does nothing for folks out of work, is a simple handout that isn't earned, and doesn't address our infrastructure needs, which as others have pointed out, need to be addressed at some point. And, as others have mentioned, given the insecurity of our current job market, sticking that extra $300 bucks in the bank and not spending it is the most likely scenario.

[2centsworth]

This does nothing for folks out of work, is a simple handout that isn't earned, and doesn't address our infrastructure needs, which as others have pointed out, need to be addressed at some point. And, as others have mentioned, given the insecurity of our current job market, sticking that extra $300 bucks in the bank and not spending it is the most likely scenario.

If you think an extra 300 pet month to work g families is not going
To be spent, you live in a different world than I do.

[ducks]

"the stimulus was a failure"

not because it was a bad idea (Keynesian counter-cyclical spending) but because it was too small compared to the Depression

"Obama should've gone for a much bigger one"

Repugs would have blocked it

I'm reading about "full-employment" structural unemployment movfing for 4.5-5% to 7 or 8%. Millions of people are going to be very fucked, very 3rd world-y.

yeah throwing more money down the toliet is a smart thing to do
mine liberals have no brains

it is not the gov responsibilty to bail out business
let them go out of business


has happened in the past and it has worked out

and guess what bailouts for people staying in houses are stupid
people got kicked out of their houses
grown the hell up and have been better off in the long run
THEY LEARNED THEIR LESSON

BUT THE DONKEYS want to use my tax paying money to help them out

cost seniors raises in their retirement
making them trying to survive on 850 a month

[ducks]

"300 per month to each working"

That will get a lot of bridges, dams, electrical grid, roads, sewers, water systems, solar power facilities built and maintained.

no it will not


if you are going to use tax payers money
you pay 50 thousand to everyone house loan
the money NEVER touches people

people would refinace then to lower their payments
it would help out the ecconomy

[coyotes_geek]

If you think an extra 300 pet month to work g families is not going
To be spent, you live in a different world than I do.

Half the nation thinks a depression is on it's way. A third are afraid they're about to lose their jobs. What different world are you living in where you think that's an enviroment where people are going to go out and start buying stuff they don't need?


Approximately 48 percent of Americans say they think that a Great Depression is either very or somewhat likely to occur within the year, according to a CNN Opinion Research Poll,


Respondents' fear that they would soon become unemployed also spiked to an all-time high of 30 percent.

http://www.huffingtonpost.com/2011/06/09/nearly-half-of-americans-fear-depression_n_874406.html

[boutons_deux]

Here's fncking investment banker/misognynist Larry Summers, who absolutely refused to give Barry any input or plans for job creation, NOW asking for more stimulus

http://www.reuters.com/article/2011/06/13/us-usa-economy-summers-idUSTRE75C1ST20110613?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F +US+%2F+Top+News%29

[2centsworth]

Half the nation thinks a depression is on it's way. A third are afraid they're about to lose their jobs. What different world are you living in where you think that's an enviroment where people are going to go out and start buying stuff they don't need?





http://www.huffingtonpost.com/2011/06/09/nearly-half-of-americans-fear-depression_n_874406.html

Yes, because during the depression no one
Would have ever spent an extra 300 per month.
Do you actually read what you post?

[coyotes_geek]

Yes, because during the depression no one
Would have ever spent an extra 300 per month.

Correct. People would just take their $300 and hoard it.


Do you actually read what you post?

Always.

[Winehole23]

How do you know what everyone would do with the $$$, CG? Honest question.

[coyotes_geek]

How do you know what everyone would do with the $$$, CG? Honest question.

Look at wage growth, retail sales, household debt and household savings over the last three years. For all the attempts we've made to put more money into consumers hands ($600, making work pay, SS rate cut to 4.2%, etc) all we've got to show for it are declining retail sales, an increase in the household savings rate and reduced debt per household. All this despite a 15%-20% chunk of the population who isn't in a position to reduce debt or increase savings because they're unemployed or underemployed. The combination of all those events certainly suggests to me that there are far more people pocketing their extra money than there are people spending it.

[Winehole23]

So it was an educated guess. In fact a fairly persuasive one. I should have known.

[Winehole23]

One question: would you tend to agree or disagree that deleveraging and debt retirement are beneficial for the US or that more generally, an increased savings rate is a good thing, despite what it means for short term growth?

[ElNono]

Look at wage growth, retail sales, household debt and household savings over the last three years. For all the attempts we've made to put more money into consumers hands ($600, making work pay, SS rate cut to 4.2%, etc) all we've got to show for it are declining retail sales, an increase in the household savings rate and reduced debt per household. All this despite a 15%-20% chunk of the population who isn't in a position to reduce debt or increase savings because they're unemployed or underemployed. The combination of all those events certainly suggests to me that there are far more people pocketing their extra money than there are people spending it.

This 'correction' might be shit for the economy right now, but it's not in itself a bad thing, IMO. Ultimately, it should eventually lower lending enough.

But that's exactly why I think direct government job creation would work much better, and as I said earlier, infrastructure could be a great target.

[coyotes_geek]

One question: would you tend to agree or disagree that deleveraging and debt retirement are beneficial for the US or that more generally, an increased savings rate is a good thing, despite what it means for short term growth?

I agree. There are definitely going to be long term benefits to household deleveraging. The biggest benefit in my mind being the amount of wealth that households will be able to keep for themselves instead of transferring to banks in the form of interest payments. Reducing the number of households living paycheck to paycheck should also make it a little harder for bad economic news to spook the populace.

[coyotes_geek]

This 'correction' might be shit for the economy right now, but it's not in itself a bad thing, IMO. Ultimately, it should eventually lower lending enough.

But that's exactly why I think direct government job creation would work much better, and as I said earlier, infrastructure could be a great target.

Agree on both counts. Lowered taxes certainly can provide long term benefits to people, but it just doesn't make for an effective short term stimulus solution IMO.

[Winehole23]

I agree. There are definitely going to be long term benefits to household deleveraging.If so, why would you now have us rule out any further helping out of fellow Americans with respect to their household debt, even if via politically timed and executed stimulus?

[Winehole23]

Reducing the number of households living paycheck to paycheck should also make it a little harder for bad economic news to spook the populace.God I hope you're right about that. The bad economic news ain't even arrived yet.

[coyotes_geek]

If so, why would you now have us rule out any further helping out of fellow Americans with respect to their household debt, even if via politically timed and executed stimulus?

The short term benefit is minimal to non-existant and the long term benefit still comes at a price. Tax breaks can help out households individual financial situation in the long run, but the tradeoff is that it only makes an already huge gap in entitlement programs even bigger. There's already a $534,000 per capita gap between promised benefits and estimated revenues that needs to be reconciled through some combination of benefit cuts & tax increases. Cutting taxes only makes that number bigger and brings us closer to the day where we'll no longer be able to put off making a decision.

[Winehole23]

the tradeoff is that it only makes an already huge gap in entitlement programs even bigger.A lot of somebodies want to make that trade. Larry Summers made a big noise about it today.

[Winehole23]

Then there's everyone else who stands to get 50 gold pieces from Caesar.

[Winehole23]

The short term benefit is minimal to non-existant and the long term benefit still comes at a price. Tax breaks can help out households individual financial situation in the long run, but the tradeoff is that it only makes an already huge gap in entitlement programs even bigger. ... Cutting taxes only makes that number bigger and brings us closer to the day where we'll no longer be able to put off making a decision.No need to feather it out in a depression?

Can't the rough stuff be put off a year or two while everyone muddles through and pretends to be whole? When's the drop dead date?

[MannyIsGod]

In fairness, 2cents specified its appropriateness of this attitude for recessions. Not at all times.

Here in lies the biggest problem with stimulus. Not in stimulus itself, but how/when it is used and the timing of people pointing to it as a problem.

[MannyIsGod]

What if it was a $5000 check?

I would spend it then, but the inflation that would result from a 5 trillion dollar stimulus would probably be counterproductive.

[MannyIsGod]

Way too isolated and slow. The best stimulus
Is a payment of about 300 per month to each working
Individual for the next 24 months.

We have a customer problem in this economy.
Time to help the customer. We will see a trickle
Up affect.

There's a reason why unemployment benefits are some of the best ways to spend stimulus. That being said, I don't want to see 300 dollars for 24 months going to everyone in this country. That will simply be government subsidized consumerism which has far greater ramifications on the levels of consumption our country has which are flat out unsustainable.

[MannyIsGod]

Look at wage growth, retail sales, household debt and household savings over the last three years. For all the attempts we've made to put more money into consumers hands ($600, making work pay, SS rate cut to 4.2%, etc) all we've got to show for it are declining retail sales, an increase in the household savings rate and reduced debt per household. All this despite a 15%-20% chunk of the population who isn't in a position to reduce debt or increase savings because they're unemployed or underemployed. The combination of all those events certainly suggests to me that there are far more people pocketing their extra money than there are people spending it.


I don't think that necessarily means they're not spending the money. Its more symptomatic of how big the problems we are facing are and how unsustainable the level of consumption we need for growth is.

[Capt Bringdown]

There's a reason why unemployment benefits are some of the best ways to spend stimulus. That being said, I don't want to see 300 dollars for 24 months going to everyone in this country. That will simply be government subsidized consumerism which has far greater ramifications on the levels of consumption our country has which are flat out unsustainable.

Unemployment benefits yes. Money to folks who already have jobs, no:


Is a payment of about 300 per month to each working
Individual for the next 24 months.

A very dumb idea.