Fiscal Cliff

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Not all are, but the party apparatus has been highjacked by the right wing extremists in the tea party and the religious right.

-Bill, otherwise known as Kraichgauer

The GOP civil war has begun. Marco Rubio (who identifies himself as a Tea Partier) issued a statement saying the GOP needs to communicate better with Latinos. The Bushes are waiting in the wings for Tea Party blood. Even John Boehner, I suspect, is tired of that movement, and is actively positioning himself as a moderate in opposition to his caucus's far right wing.

It will be interesting to see who House Republicans chose as their committee chairs. Boehner will probably get reelected as Speaker, but I imagine some committee appointments are up in the air.

What is good for the country has nothing to do with Washington thinking.

What is good for the Democrats is to push the Republicans over the cliff.

Obama has two years to take away their playhouse, stack the Supreme Court, and then two years to do anything he wants.

As all Bills start in the House, it is up to the House to submit something, that would pass the Senate, and get signed by the President, Good luck.

They are blocked in, have just gone down in flames over their canidate, have a House Majority through redistricting, and the House is going to be blamed for everything.

Politics is more important than government. Knocking over the House, electing a Democrat majority, is the platform to elect the next President, a Democrat.

The Republican doner list is Defense Contracting, Drugs, the very rich, Big Oil, and they use the Christian Right, which is the KKK after dark, and Tea Party is the tin foil hat wing.

Doing something about Medicare is code for forceing the drug companies to bulk sell to the government. That alone would greatly reduce the cost, from the present everyone pays retail for a little bottle. No, the government buys millions of bottles, and wants one deal, one price, for all.

For the Trillions for defense, the fertilizer bombs are winning. Al Kaeda does not have an air force or navy, The indestructable Abrams Tank had to be pulled out of Bagdad, because they were getting taken out by $10 of fertlizer.

From going into Iraq in Humvees, which got blown up, no body armor for the troops, and civilian contractors everywhere, each making more than a General, was the wrong people with the wrong weapons, in the wrong war, because contractors wanted the money, and big oil wanted a piece of Iraq.

America got 5,000 graves, 20,000 missing a limb, and after war services were limited and called a socialist plot. We got $16 Trillion in debt.

The Republicans got what they wanted for their doners.

Afganistan is one big mineral deposit. It is only worth a trillion, but it is Rare Earths, now controlled by China, Lithium, now controlled by Bolivia, and the Opium. That is why we have established a government, an army of 360,000 to defend our rights to their minerals.

The Taliban wanted a partnership, with the west putting up the technology, train Afgans to mine, processing the minerals in country, and then the product would be sold on the world market. So Bush invaded.

It is the same deal Bolivia wants, local production, processing, and battery manufacture.

Besides that there is the issue of restoring the mined out areas, protecting the wild life, while corporations offer some general a million dollars to kill the government and take over so they can strip mine, pillage, and leave.

These are the same corporations who hold their profits offshore, and do not pay US Tax. If they were paying taxes as the domestic corporations they are, we would not be borrowing money.

We have not won a land war in Asia in the last four trys. Our millitary is not geared to fight the kinds of wars that are happening. Our only danger of being invaded is by illegal aliens. That we do little about.

Since the Cold War, it has been atomic war or nothing. As atomic war will lead to nothing, if you cannot win do not play.

It has been corporations looking to loot the world that use our millitary to invade and occupy. Then they evade taxes.

While both sides wish to simplify the tax code, they mean very different things.

This time I have to go with the Democrats, all people who earn pay, and those who earn more pay at a higher rate.

I go a bit farther, all income is the same, and all should pay into Social Security. Social Security funds have been used to fund this economy, and it should pay back, not put the debt on future tax payers. The issue should not be when it is going to run out, it should be when we get to retire early, get higher benefits.

The United States should not have debt, and should have fully funded social programs, including free education. We are the only industrial country that lacks basic protections. We also have a low scoring educational system.

No child left behind leaves all the others standing around waiting. Everyone gets the education of the lowest performer. Children are not like that, but if held back will lose interest, and the drive to become educated.

No matter how hard you work, everyone is going to be equal to the lowest, is how the communists failed. No one works when everyone gets the same. The slowest does not try when everyone else is held back.

The result is, public education has not been producing people prepared for university, employment, self employment, or anything else.

The result is those in private school, christian school, have moved up and taken all the better jobs. They teach children to win the race.

Those who would Privatize the property of others used to be called Thief, now they are called Job Creators.

Long term, the education of the people and the soundness of the money are the base of all things.

If other people had made the $15 Million Rommney did, they would have paid over 15% in Social Security on it, then tax, 30%, he paid less than 15%. A dollar is a dollar, tax them all the same to maintain the social safety net. Tax people by their ability to pay. it keeps money from being held by less hands, and kept in stagnant pools. Like water, when it flows clear and clean through many hands it is good,

To do this we need Democrats to control the government, establish a reverse income tax, do away with all of the programs that spend more than they deliver. Food stamps, unemployment, disability, are unneeded when a minimum income is in place. Some government programs spend 90% on administration, 10% delivered to the needy.

Reduce government employment, expand the benefits for Citizens, where all you need is a birth certificate and social security number to qualify. Born in America with at least one American parent.

Universal health care is a good idea, universal income is better. Secure people live better healthy lives, reducing medical costs.

Even if 10% of the people took it as a long vacation, they would spend it, and the remaining 90% would have full employment.

It can be cheaper overall to do right, and depend on the Citizens to make the best of it.

It would be hard to do worse than the current situation.

Do you realize what would happen with that kind of approach?

The entire United States economy is roughly $15 trillion. A $1trillion cut in government spending imposes a direct contraction in the US economy of over 6% at the stroke of a pen. Furthermore, almost all government spending takes one of four forms: direct transfers to other levels of government, direct transfers to individuals, salaries and benefits, and procurement.

Cuts in transfers to individuals, salaries and benefits or procurement all involve spinoff contraction. A person no longer receiving direct benefits has less money to spend. A public servant no longer earning a salary has less money to spend. A company no longer supplying goods to government has to lay off employees. Only cuts in intergovernmental transfers do not directly create further spinoff cuts in consumer spending. But the subordinate governments no longer receiving transfers will need to undertake corresponding fiscal changes to accommodate the loss of transfers, which simply downloads the problem.

The answer is not dramatic cuts--there is no capacity for the private sector to respond to those quickly.

I suggest that the better approach is to is flatline expenditure. Do not actually make any cuts in nominal dollars--but allow inflation to serve to reduce government spending as a percentage of GDP. There can still be realignment--spend the nominal dollars where they will do the most good. Streamlining and aggregation certainly make sense. But broad, dramatic cuts are a recipe for contraction.

Many yes. But not all.

ruveyn

I think what the U.S. needs to do is to somehow fix the system of "entitlements" (Medicare and Social Security). As most of the collectors are elderly, and as demography works seriously against us, we have trillions of dollars in unfunded liabilities going forward. Even if the government improves its cash flow, demography ensures we'll have more collectors than those paying into the system. Already, they are half of all government spending, and are twice as large as the defense budget.

What's needed is entitlement reform. Cuts in discretionary spending are nice, but entitlements need to be reformed. I'm personally in favor of limiting benefits to those currently under 50, and means-testing everyone else so that the wealthier elderly don't collect.

Unfortunately, those programs are a political third rail. George Bush tried to seriously reform social security in his first term. It died.

65 is too young for most people to collect Medicare and Social Security. The public sector should not be expected to finance 15 to 20 years of retirement for those who are still able-bodied and fit for work.

Right now, we need to start ramping up the eligibility age to 75. Doing that, along with means testing, would help a lot.

But what about people who work manual labor, and are literally physically broken down even before 65? Office workers can arguably wait till 75, but not laborers.

-Bill, otherwise known as Kraichgauer

This is an insoluble problem for a Welfare State.

In Privatetopia people will provide for their own retirement by prudent saving and investing.

ruveyn

Not everyone does, or can. What about a catastrophic illness that financially wipes someone out? Or just the cost of living that might make saving money impossible?

-Bill, otherwise known as Kraichgauer

I believe there is middle ground. While I believe not everyone can save (especially those with a rough lot in life), we do more than subsidize those people. We also subsidize the middle classes. We also subsidize the very rich, but that's a separate issue with entirely different policy questions.

Anyway, we shouldn't subsidize the middle clalsses, especially when they don't need it. Our European friends believe in supporting all but the very rich, and we have seen where that leads. Europe is a great place for the fantastically wealthy and the tourists, but I certainly would not trade places with an average EU citizen right now.

Hey, I'm one of those people! I could never work as a millwright or electrician again. On bad days, I can barely walk.

Obviously, those folks get their social security/disability benefit at 65 or whenever they can no longer work....

Ideally, those well under 65 would get scholarships/new training so they can do jobs that are less demanding (if possible).

However, I still think that, in general, 65 is way too young to retire these days (unless you can finance it yourself).

The money is better spent on folks who really cannot help themselves anymore.

That's my take, anyway.

This is a most unusual discussion. You want cut demand (SS benefits) and increase the workforce at a time of high unemployment. Would any of you want to guess what the unemployment rate will be after this ?

I think the reason that things like social security are a third rail is because instead of funding from social security being incorporated into regular income and other federal taxes (which would mean a higher income tax rate than we have now), its literally a separate tax with a stated purpose and an explicit bargain & promise: Pay social security tax now, get social security checks when you retire. Its not pay social security tax now, we'll give social security checks to current retirees, even though that's what's really going on. so there's no way to reduce or remove social security benefits from anyone whose already paid social security taxes (pretty much any living American who ever worked a day in their lives) without breaking that promise in whole or in part.

At the same time, I think labeling social security an "entitlement" is a bit misleading. Its not a government handout that people are entitled to. Its a government obligation that people paid for.

Well, I'm talking about something that would be phased in over a decade or so...

...and what else can we do?

Nobody wants to pay for this and it really is not practical to keep retirement at 65 when most people live to 80+.

About $5 Trillion of Public Debt is money paid into Social Security by workers, which were then borrowed by the government, for other purposes, that were going to make them so rich they would have no problem replacing it.

It is for Disability and Retirement, Death Benefits are minumial.

At 15% of income one could by a very nice private insurance, including life insurance.

This sounds like a life insurance company that blew the money and wants to get out of the deal, because they just discovered those people are going to die.

Prolonging retirement and leaving them in the workforce, learn about Social Security, you get less if you retire at 62, 65 is just a number, delay till you are 67, and the payments are higher. The longer they work the more it costs, and the jobs do not turn over.

With our employment picture, companies with pension plans are offering buyouts to get people to retire. They need to reduce head count, and long term costs, and are willing to pay more now to get it.

Paying younger workers unemployment is not cheap, and they are missing out on their most productive years, where they would pay into Social Security, and taxes, if they had a job. Unemployment and food stamps are costs that could be avoided, if people could retire with full benefits at 62.

As is if you keep working Social Security is reduced $1 for every $2 earned. It is scaled to promote retire, get out of the way, let the younger kids have their turn.

The war babies are the pig going through the python, the next generation, 60s, 70s, were the birth control and abortion generation, 80s was a recession, low birth rate, and the 00s have produced the lowest birth rate on record.

Telling them that they are going to have to support the big generation all their life, and they cannot retire, and they have no jobs, lots of education debt, so they will never own a house, and they can slave away till they are 80, is not going to inspier productive work. Also taxes and regulation have to go up because government, national, state, county, city, are bloated hogs that must be fed. They will also get the rolled forward national debt.

Also, all levels of government have unfunded pension liabilities, so they can pay that too. Private Pensions that fail are backed by the government, and what about the poor banks almost losing money? What about Defense?

It does not work.

The time for the war babies to see to their retirement is now. They have the political power. Raise taxes, pay down the debt, reduce the governments at all levels, or one day your Social Security will stop coming.

Leave all campsites in better condition than you found them is good advice. Leave a pile of firewood and those who come behind will thank you, and will leave it in their turn. Leave trash and scorched earth, and it will follow you.

Even the myth of retirement is hung on the Stock Market. Pension Funds make up most investment. 12,500 today is less than 10,000 in 1999. All of it can just evaporate. That Government IOU for $5 Trillion, well they are running on a Capital One card now.

Waiting for the Social Security to come to rush out and buy a loaf of bread before the price goes up is the future.

Meanwhile I noticed that the General was reduced in rank, down to two stars, where his pension for twenty years service was cut from $225,000, to $200,000, and I can assure you, it is the same through Federal and State Government, and these people do not pay Social Security, they pay less.

Their Medical Insurance is better, no Medicaid for them.

The people who worked, paid for 45 years, are getting screwed, and now the talk is of reducing their pitance?

Tax the rich now, or eat them later.