Thread in which the world laughs at America

[Zoetstofzoetje]

26 minutes to open. oh boy, this week is going to be awesome!

[Zevico]

We are getting loaned money at a near 0% interest rate.

I don't think the US has a debt crisis.

I wish I could get some near 0% interest rate loans. Maybe I would start a company.

JM

The United States does not have a plan to pay back its debt. At all. Its debt is increasing, and will increase, if the current plan continues. If it does increase and there is no plan to pay it back, there will be negative economic repercussions.

Quite simply, when you don't have a plan to pay back your debt, your debtors start to doubt your willingness or ability to pay it back. And when that happens interest rates rise and you find yourself in an uncomfortable position. Fact is you're going to reach that uncomfortable position one way or the other. The other way is to simply throw so much money into the economy that--hey presto--your debts are much easier to pay. Can you say "inflation"? Neither method inspires much confidence in the American economy.

The solution to being in debt is not more debt. It's getting out of debt. The United States has essentially declared that not only will it refuse to get out of debt, it will add about $7 trillion in debt with plan whatsoever to pay it back. That "compromise" is an improvement, mind you, from the previous Democrat position--simply borrowing $10 trillion flat.

[Asher]

I can't complain too much.

Apparently this will mean lower interest rates on Canadian mortgages somehow, which will matter to me in January.

I've already done my house downpayment and I'm now putting back money into my RRSP that I took out for the down payment (home buyers plan). Everything is getting cheap, cheap, cheap for me to buy.

[Asher]

The United States does not have a plan to pay back its debt. At all. Its debt is increasing, and will increase, if the current plan continues. If it does increase and there is no plan to pay it back, there will be negative economic repercussions.

Quite simply, when you don't have a plan to pay back your debt, your debtors start to doubt your willingness or ability to pay it back. And when that happens interest rates rise and you find yourself in an uncomfortable position. Fact is you're going to reach that uncomfortable position one way or the other. The other way is to simply throw so much money into the economy that--hey presto--your debts are much easier to pay. Can you say "inflation"? Neither method inspires much confidence in the American economy.

The solution to being in debt is not more debt. It's getting out of debt. The United States has essentially declared that not only will it refuse to get out of debt, it will add about $7 trillion in debt with plan whatsoever to pay it back. That "compromise" is an improvement, mind you, from the previous Democrat position--simply borrowing $10 trillion flat.

Well, that and raising taxes to bring in more revenue. That typically helps offset deficits, if you increase your income...

The Republican/Tea Party solution is if you cut trillions from the budget, costs will never go up and everyone will be just as happy and not only will they balance the budget, but repay that massive debt in a reasonable amount of time. Yeah, it's pretty hilarious.

[Hauldren Collider]

You couldn't possibly raise taxes enough to cover the growth of expenses. The problem we have is not that taxes are too low, it is that spending is too high. Taxes are high enough already to sufficiently cover people's needs from the government, in my view.

[Asher]

You couldn't possibly raise taxes enough to cover the growth of expenses.

Yes. That's why you need to cut stupid expenses and raise taxes. The solution is both, not one or the other. Anyone who says otherwise is a simpleton.

Taxes are high enough already to sufficiently cover people's needs from the government, in my view.

That would be completely true if the US wasn't a warmongering nation with an absurd military budget and a ridiculous number of tax loopholes.

[Jon Miller]

We don't just need to cover people's needs, we need to cover past debt as well.

edit: and as asher points out, the highest military spending on the planet

JM

[Jon Miller]

Viewing the future tax stream as an asset is just as idiotic as viewing future expenditures on various programs as a liability.

But blithely claiming that the US should continue to borrow because rates are low betrays a fundamental misunderstanding of basic finance.

That isn't all that I was implying, but I am pretty sure that those who loan to governments do view the future tax stream as an asset (combined with the will to pay).

There are liquidity issues, the US can't just snap it's fingers and pay back 9 trillion. But then the creditors are stupid if they suddenly ask for 9 trillion or jack the interest rates sky high too... the will to pay ceases to exist as some point even among the most honorable.

To first order (which is where you like to play), the US should continue to borrow if interest rates are low. Probably it should invest some of it into direct assets (and not national assets) so that it can divest those if the interest rates become too unfavorable.

Jon

[Tupac Shakur]

The defense cuts show how, contrary to conventional wisdom, the budget deal reflects liberal preferences. The liberal agenda came in three parts: First, raise taxes on high-income Americans to limit domestic spending cuts; second, protect the social “safety net,” especially Social Security and Medicare; and finally, cut defense spending to spare (again) domestic programs.

Liberals got two of three. They failed on taxes, the Republicans’ litmus test. But they prevailed elsewhere. Social Security, Medicare and most benefits (food stamps, Medicaid) for the poor, regardless of age, were put off-limits. Medicare reimbursement rates might be cut by 2 percent as part of a second round of reductions, but that’s small potatoes. Because retiree benefits constitute half of non-interest federal outlays, the deal isn’t hard on overall government spending.

The real budget story is how protecting these vast retiree benefits dominates policymaking. If you shield almost half of spending and still want to cut, pressure intensifies on everything else. Along with defense, the budget deal also squeezes that catch-all category, “domestic discretionary spending.” This covers many programs: roads, food safety, financial regulation, grants to states and localities, and much more.

We are penalizing general government to protect all retirees, no matter how healthy or wealthy. Earlier this year, the Congressional Budget Office projected that domestic discretionary spending would drop 30 percent — as a share of the economy — from 2011 to 2021. The budget deal will deepen that. President Obama keeps saying this spending will fall, again as a share of the economy, to its lowest level since Eisenhower. Why is he bragging about this?

The Welfare State Wins This Budget War

[Asher]

But the budget deal does reflect national priorities, for good or ill. It’s mostly a triumph of the welfare state over the Pentagon. Even before the deal, the Obama administration projected that — assuming continued withdrawals from Iraq and Afghanistan — defense spending would shrink to 15 percent of the budget by 2016. This would be the lowest share since before World War II. The deal’s cuts, potentially as much as $950 billion over a decade, would reduce that further. In the 1950s and ’60s, defense often was half of the budget.

Drastic military retrenchment seems unwise. It would threaten readiness, training and the replacement of aging weapons. Many planes, ships and vehicles are approaching or have passed their planned service lives, says Heritage Foundation defense analyst Mackenzie Eaglen. To take one example: F-18s were designed to fly for 6,000 hours; now, many are headed toward 10,000, she notes.

LOL

Damn those Liberals cutting the military budget! Liberals Liberals Liberals

****ing welfare ****s! Damn Liberals.

Can't they see we are at war with the world? We need more weapons, not more health. :furious: LIBERALS

Some people are simply blinded by ideology. I've no idea who this guy is, but looking at his picture you can already conclude he is a massive douchebag who probably smokes a pipe in a 35 year old leather armchair.

[Asher]

I'm shocked to see he has an arts degree.

[Tupac Shakur]

You're a moron.

[The Mad Monk]

Wednesday :: Feb 25, 2004
Robert J. Samuelson - An Utter Disgrace To The Washington Post

by paradox
Before we get all warm and fuzzy about real journalists at The Washington Post like Dana Milbank�or whores like Jonathan Weisman who sometimes act like real journalists�it�s important to remember that paper is still firmly captured, ensnared by corporate greed and a nauseating self-righteousness.

Robert J. Samuelson fits that profile perfectly today in his incredibly dishonest and condescending piece The Phony Job Debate. �Electing a president based on job creation makes as much sense as selecting a doctor based on palm reading.�

�Facing a weak economy, a government can do three things: cut interest rates; run a budget deficit; and allow -- or cause -- its currency to depreciate.�

Samuelson must think his readers are total morons who never heard of Keynes. Samuelson is totally, rankly lying, for he knows full well there�s another option�stimulative spending. He barely skips around the truth by calling this �run[ning] a deficit.�

�All these weapons have been deployed.�

Deficit spending has not been deployed. A huge deficit has been �deployed� by giving the rich tax cuts, implementing a huge hike in defense spending, letting Congressional Republicans gorge on pork, and letting corporate taxation further erode.

Real deficit spending would have given tax cuts to the poor, who would have immediately spent it instead of saving it like the rich do. Real deficit spending would have flowed cash to immediate, massive public works projects that had a primary goal of employing workers, with a secondary benefit of improving the country�s infrastructure (roads, schools, forest maintenance, etc).

Bush gambled that his save-the-rich-from-pain strategy would work to produce jobs. It failed miserably, yet Samuelson is willing to rankly lie to defend Bush. �In war, truth is often said to be the first casualty. It's the same in campaigns.�

It�s the same at the Washington Post.

http://www.theleftcoaster.com/archives/001210.php

[Asher]

You're a moron.

You're probably a Liberal that hates American soldiers and wants the country to surrender.

[Dinner]

You couldn't possibly raise taxes enough to cover the growth of expenses. The problem we have is not that taxes are too low, it is that spending is too high. Taxes are high enough already to sufficiently cover people's needs from the government, in my view.

Clueless. Absolutely clueless. Since the end of WW2 government spending has averaged 25.5% of GDP while taxes have averaged 24.5% of GDP. Right now spending is ~26.5% of GDP but taxes are all the way down to just 17% of GDP. Yes, spending is slightly high due to the recession and two unpaid for wars but only by a single percentage point but revenue is down by a quarter due to tax cuts and the recession. THAT is why we had a surplus under Clinton and endless deficits ever since. In the long term we will have to cut back spending and raise taxes but for the short term we need to ramp up spending to increase aggregate demand as that is cheaper then the economic loses of persistent under employment plus costs are dirt cheap now so it's an excellent time to fix all those bridges and roads which are in disrepair.