OT: Interesting Debt Comparisons

[Red Green]

12 Scary Debt Facts for 2012

[Han]

Red Green wrote in news:Xns9FFCC7045ABA2RedGreen@

88.198.244.100:

Just taking one line. Didn't really go farther because if they can't get the deficit right, there is no use.

Deficit = money government takes in -- money government spends

Since the government (i.e. you and I and everyone else) is spending more than the take in, this would lead to a negatrive deficit, which by definition is a surplus. Which isn't true, ergo the equation is wrong. it should read: Deficit = money government spends -- money government takes in

[HeyBub]

It's government math.

[Han]

"HeyBub" wrote in news:iN- dnTUfSYFXJKLSnZ2dnUVZ [e-mail]:

I don't think finance.yahoo.com is government. It's just stupid, just like the deficit problem.

[trader4]

Actually the source is CBSMarketwatch. It's an obvious error though and it's clear what was really meant. However the rest of the piece is even more dubious. Supposed to be "scary facts", yet a lot of it has nothing to do with what is going on today, ie the defictis, debt, and ability of the country to repay them.

The best thing I've seen that puts the scary scenario into focus is converting the federal budget into an equivalent family budget. Essentially you get rid of the zeros. John Stossel showed it on Fox. Essentially it's this:

Annual family income: $21,700 Money the family spent: $38,200 New debt on the credit card: $16,500 Outstanding balance on credit card: $150,710 Total budget cuts: $385

[Han]

" [e-mail]" wrote in news:3e18e12c- [e-mail]:

I'll take your bait. It is obvious that even very painful budget cuts won't do the job. Moreover, budget cuts reduce GDP, stifle the economy and put people into the poor house. Just look at what is happening in Greece. Greece is not a good example for the US economy. Especially since here tax compliance is orders of magnitude better, and pension outlays orders of magnitude lower. The only good way to get our economy going is to increase taxes where they would do the least harm (capital gains and other loopholes need to be tightened, and higher incomes' taxes need to go up). At the same time, regulations need to be streamlined without making things like air quality and environmental defense useless. I could go on, but you know what I'd propose.

[trader4]

Bait? What bait? It's just the basic facts.

Says who? No material budget cuts of any kind have been made. Per the budget example, we're fooling around with pennnies.

That's the faulty logic that got us where we are.

=A0Just look at what is happening in

It sure is a good example. And unfortunately you fail to grasp the lesson from Greece. It was too much govt spending, giving people unrealistic salaries, benefits, welfare, all kinds of spending, usurping 50% of GDP that got them where they are. Greece debt is 50% of GDP. We're passing 100%, Capiche?

=A0Especially

Sure. Cutting all the wasteful govt spending is going to kill the economy, but higher taxes won't? Spoken like a true lib. Here's a question. What has gone up by 40% since 2007? Hmmm. Not taxes. Govt SPENDING. If taxes had been cut by 40% since

2007 then I'd consider tax increases. Since taxes are about the same, time to focus on the real problem. SPENDING.

If your household couldn't meet it;s budget, would you answer be that unless you can increase income, hell no, spending can't be cut? Look at our state, NJ Christy CUT the buget and it's now lower than it was

3 years ago.

=A0At the same time, regulations need to be streamlined

Sure do and it's mostly wrong. Interesting that you want to steamline regulations. That is 180 degrees opposite the Dems and in particular Obama.

[Han]

" [e-mail]" wrote in news: [e-mail]:

Even the starkest GOP cuts won't budge the deficit much at all.

It sure isn't the whole solution. Budget cuts should be applied appropriately,and I'm sure that some cuts would be better than others.

According to , Greece is close to 150% and we are just under 100%. Germany is 85%. SO between us and Germany there really isn't too much difference on this statistic. Especially given the point in the economic cycle we're in.

Taxes have gone down in important ways - important to the economy because the wealthy are paying less than before, when the economy was in good shape. Accordingly, just because taxes were higher during the Reagan years, taxes should go up now ...

Christie may have cut the state budget, but he increased taxes too, just by cutting the homeowners rebate, and by cutting local support tremendously. In my town, they had to fire a bunch of policeman, curtail library hours and more like that to stay under the cap, which they did an admirable job with. Now the boro has chosen a Republican majority, they have promptly followed the lead of the Democrats who had proposed raising water rates, but now it seems we have to go up 4-fold to get to neighboring communities. (But I don't know the details). There are some good points in Christie's massive reorganization of public employee pensions. On the other hand, he has effectively reduced incomes for teachers, in spite of contract obligations.

I am proud to be a progressively thinking man who finds fiscal responsibility to have top priority, and F all those earmarks.

[krw]

Nor will Obama's continued spending increases. The fact is that base-line budgeting has *got* to go, and the "baseline" reset to 2008, at least.

Earmarks are *not* the problem.

[Han]

" [e-mail]" wrote in news: [e-mail]:

I say to go back a bit further, and reset the tax rates in addition to the budget. Then hike the tax rates so we are properly aware of the ongoing costs of the Iraq and Afghan wars (I think you will agree that caring for the brave men and women who fought the war will keep costing money). If Congress (R or D) increases spending, they should cover the expenses, at least in the long run. Spikes in spending will occur from time to time to finance "emergencies", be they wars or natural or economic catastrophes.

In themselves earmarks are not, but as a symptom of irresponsible spending they often are. There should be a set # of $/ rep or sen that cannot be exceeded. Period.

[HeyBub]

Huh? We don't HAVE poor houses.

Yep. You propose turning the U.S. into an European economic model.

I agree that taxes should be increased - those at the low end should pay something! In other words, virtually nobody should pay zero. Conversely, those at the top should have their taxes reduced inasmuch as they use much fewer government services. (They don't send their kids to government schools or the county hospital, they don't use food stamps or need rent supplements, and so on.)

[Han]

"HeyBub" wrote in news:hqGdncxZX5EL0d3SnZ2dnUVZ [e-mail]:

Great idea. Prescription for labor unrest (and not only manual labor, but practically everyine "earning" less than $200,000/yr). If you up the taxes on them, they either can't live, or will need to demand doubling their wages. Not only to make up for the taxes they have to pay but also for the increased cost of everything that involves any kind of human labor. If you've ever seen an inflationary spiral, it would be nothing compared to that. I don't think "free enterprise" can generate more dissension that what you propose. And I'm leaving out the trade consequences. Either we would have to devalue the dollar even more and faster than it has devalued in the recent past, or we wouldn't be ble to sell anything abroad anymore because of the increased costs in making it.

[krw]

Taxes are *NOT* the problem. The wars were *NOT* the problem. You can stop with those lies any time. Find new ones.

I wouldn't object to that, so much, except that not all districts are the same. There are positive aspects of earmarks; they force funds to be spent on specific projects rather than giving the executive all the discretion.

[trader4]

[e-mail]:

Again, says who? Spending was increased 40% between

2007 and 2011. That is a staggering amount. If it can be increased, it can also be decreased. The latest example of foolishness is extending the SS tax cut. It's just another $90bil of unfunded govt benefits designed to make people feel good in an election year. Exactly like the process in Greece, Ireland, Italy....

The problem is with spending out of control, NO real budget cuts have been made. Per that example of the family budget, after all the bitching and screaming about cuts from the Dems, almost nothing has been actually cut, because they won't allow it.

So, Germany is at 85%, the US is passing 100%, Greece is at 150%. What in that gives you comfort? The problem is not just Greece. It's that most of Europe had gone down the same socialist highway to hell. At some point, it becomes unsustainable. How much further do you want to go?

What happens one day when the bond market finally wakes up and instead of worrying about international risk, starts worrying about credit risk? When that day comes, you'll have Tbonds yielding 8% or 12% and corresponding rates in the credit markets for mortgages. Think the real estate market is bad now, what will that bring? Think the deficit is bad now? Wait until they have to borrow at 12% instead of 0 to 3%.

And that turn could come at any point. Everyone was happy as a clam holding all kinds of stocks back in 2000 at lofty levels without a care. Then one fine day it turned with a vengance and everyone re-evaluated what they were really worth. It's all based on fear and greed, human emotion. And one day it can turn like that on US bonds, when buyers suddenly demand a higher rate for the risk.

The libs railed like hell about the deficts under Reagan as pure evil. At the end of Reagan's term the debt was 50% of GDP, or half of what it is today. The deficit was 3% of GDP. Today the corresponding numbers are 100% and 8.5% and the answer from the libs is..... MORE govt spending.

Let's look at the facts. Federal tax revenue was $2.568bil in 2007 In 2012 it was $2.627bil. That's right. The govt took in MORE last year than it did in 2007, more than it ever did in history. Revenue is NOT the problem and never has been. Now let's look at spending. In 2007, it was $2.7tril with a deficit of just $160bil. Last year spending was $3.8tril with a deficit of $1.3tril. Now that is a clearly a spending problem.

Yet the libs want to spin it into class warfare. The top 10% of incomes earners are currently paying 70% of the tax burden. The top 1% are paying 36%. How much more do you want? You could take it all and it would only lead to even MORE spending.

Earmarks are one part and should be curtailed, but it's not the core of the problem.

[trader4]

[e-mail]:

Heybub is talking about those in the 50% that are paying NO income tax. So, you're not going to have unrest with those that are earning $200,000, $100,000, $75,000. They are already paying taxes.

And he's right/ If you want tax fairness and the above folks are all paying, then most of those below them should be paying SOMETHING too. I don't think Heybub or anyone else is proposing and drastic tax. But would it kill someone making $25,000 to pay $500? That way they have skin in the game, just like the rest of us. Without it, the 50% become the folks who just want more govt spending because it never comes out of their pockets.

=A0Not only to make up for the taxes they have to pay but also

Inflationary spirals are only produced by govts printing money recklessly. Kind of what the FED is doing now. And if you believe it's gonna cause an inflationary spiral, why are you the one arguing for tax increases? Apparently your tax increases don't have negative effects on prices, investment, etc.

None of that has anything to do with devaluing the dollar. It's being devalued currently because the FED is printing money and flooding the markets with dollars. A lot of that newly printed money is being used to buy, you guessed it, US Debt.

[Han]

" [e-mail]" wrote in news: [e-mail]:

I don't understand. If you reduce taxes and spend extra money for wars, why would that not contribute to a deficit, especially when combined? Moreover, we are now retreating and either abandoning or destroying expensive equipment in foreign lands. And paying "contractors" to provide "security", not to mention the myriads of other expenses we didn't have before the invasions, such as caring for the wounded, both those with physical and those with mental disabilities as a result of the wars.

[Han]

" [e-mail]" wrote in news: [e-mail]:

Totally agree.

[Han]

" [e-mail]" wrote in news:a5ffd370- [e-mail]:

I'm picking and choosing ... I don't believe that you can single out the period between 2007 and 2011. First of all, most of that period is NOT Obama's budget, as you'd like us to believe. Secondly, once the economy has been dropped into a hole, you have to do something to get out, and as the example in Greece will likely prove, cutting all expenses to barebones isn't the solution.

I agree that extending the SS taxcut is more like giving a tax break and financing it by making it part of the national debt. It does make people feel good, and if they do use the money to make purchases, that is in itself good for the economy. But we'll pay for the incurred debt, and I'd rather have had it be paid for by taxes in some form or another now, instead of later as the currently in place "law" does. It will be especially painful later when (not if) interest rates go up.

What is happening in or to Greece is the revenge of the Germans on their profligate clients down south. What needs to be done in Greece (my opinion) is well-considered cutting of benefits/salaries that are indeed exorbitant to all but the most leftist (your view) idiots (you see, I agree with that), but also streamlining and/or cutting crazy and protective work rules, making tax collection work, eliminating tax evasion and areas of the "grey" economy, where "bartering" or under the table work leaves services untaxed.

The Greeks are now used to getting things without paying for them, and it will be difficult to get over that featherbedding.

[Han]

" [e-mail]" wrote in news:a5ffd370- [e-mail]:

I'm pretty sure you and I will not agree on where the cuts should be made, but cuts need to be made. And some taxes need to go up, because we can't really keep up spending if there is no offsetting income. It's just that compromises need to be made if Congress wants to get some respect.

[Han]

" [e-mail]" wrote in news:a5ffd370- [e-mail]:

Germany is 85%, US is 95%, Greece is 150%. That in itself is some comfort. Greece, Spain, Portugal, Italy have had varied left and right governments, and that is NOT the common denominator versus Germany and Holland having left and right governments, which they have also had. The difference between North and South in Europe is the pervasiveness of tax evasion and gimme benefits in the South, versus more responsible fiscal (and labor) management in the North. And believe me, my wife just returned from a week in Holland (for less than enjoyable reasons), and in Holland the top subject of discussion was Greece and how worried they are whether things will work out or not. That is, after the sorrow of no "11 Cities race on skates" this year (A 120 mile race over natural ice - something that the Dutch go into a frenzie over that makes excitement over superbowl XLVI in New York or Boston appear tame).

So there is no socialist highway, but a "tradition" that for Greece et al indeed has become unsustainable because the euro doesn't allow for individual countries to devalue their currency, which is what would have happened in the past. The euro was indeed fashioned with the hopeful throught that countries would individually modify their tax and spending habits to fall in with the general rules. Individuality prevented that thus far, and now there is going to be imposed fiscal restraint. Tough on Greece.

There is a lesson for Congress - make the budget much more balanced or somehow there will be imposition of restraint that'll be very, very painfull, from whatever authority that will hold the spoils (China, anyone?).