Use access key #2 to skip to page content.

starbucks4ever (97.36)

Cut the deficit but not my benefits - yes, it is possible

Recs

6

February 13, 2010 – Comments (15)

No sooner did I remark here that there enough fat cats to cut the deficit without cutting the benefits, than another poster challenged me with this rebuff: 

US debt to GDP, including unfunded obligations, is 400%+...most of that is future entitlement spending.  Those unfunded obligations are going to be tapped in large part over the next 2 decades, and entitlement payments could exceed total federal revenues.  It's possible that the deficit could be reduced to zero without cutting any entitlement, but only if all other gov't spending equals zero.  Within the next decade, interest payments on the national debt could exceed 50% of total federal revenues...so it's not likely that even 25% of revenues would be available for entitlements...that's a massive shortfall.  Unless we have massive unexpected productive growth over the next decade, or are able to increase taxes 300%, I'm not certain how we can avoid cuts to entitlement spending.

Yes, I know that unfunded GAAP liabilities of USA Inc make something like 50 Trillion, 60 Trillion, 70 Trillion, etc. (choose your number). But they just forget to mention that these are unfunded liabilities for the next 50, 60, or 70 years. When you do the arithmetic, you get a very manageable figure on the order of $1 Trillion a year. Just save $1 Trillion a year with a real healthcare reform, stop spending $500 Billion a year on military paranoia, and bring the tax system in line with European standards, and you will get even more savings than you need. 

15 Comments – Post Your Own

#1) On February 13, 2010 at 1:39 PM, devoish (98.52) wrote:

+1 rec.

It really is just a matter of deciding which bills to incure, just as it has always been.

Report this comment
#2) On February 13, 2010 at 1:57 PM, davejh23 (< 20) wrote:

These obligations are not spread evenly over these years...a large portion will be tapped over the next 20 years.  However, let's assume that they equal $1 trillion per year...that's still a significant portion of federal revenues.  So, we just need to save $1 trillion through healthcare reform?...that's about a 60% cut in gov't spending on healthcare, so this may be a stretch...especially as boomers' dependence on Medicare is just getting started.  We could cut healthcare costs by 60% and still not save $1 trillion as 70 million boomers (many extremely unhealthy) will soon depend on Medicare.  In addition, reference recent blog posts discussing the dismal retirement outlook for most boomers...millions within years of retirement don't have the savings to support themselves in retirement for more than a few months.  Their dependence of the gov't could go far beyond Medicare.  Increase the top tax rate to 70% and it still probably wouldn't solve the problem...note that "European standards" have resulted in the same 400%+ debt to GDP for many EU nations that we have in the US...they certainly aren't a model of gov't efficiency.

Report this comment
#3) On February 13, 2010 at 3:03 PM, VExplorer (29.77) wrote:

Looks like we (You and I) are comming from the same origin by only ONE reason: LOWER TAXES in US. So, if "we" will "bring the tax system in line with European standards" I and a lot of another productive peoples will move to more attractive place. What about you? Will you leave or stay in stognant country which "suck blood from your business"? I worked in few places around word, today US is attractive, but you alraedy start look around for more comfortable home for your children. Mobility will big advantage in comming decades. JIMHO.

Report this comment
#4) On February 13, 2010 at 3:31 PM, devoish (98.52) wrote:

Vexplorer,

There are 300 million people in the USA, 10% unemployed. Someone will step up and fill the valuable niche you occupy. Probably for less money and still feel thankful for it.

I hope you enjoyed your stay.

Report this comment
#5) On February 13, 2010 at 5:35 PM, VExplorer (29.77) wrote:

devoish,

I'm not care about work place I occuped. it's not my problem. actually, it's a US problem: my employer CANNOT find locals to occupy this position. I'm working in eng. dept. of subdivision of BIG US manufacturer (S&P member). From 14 engs : 2 Russians (actually Jews), 14 Indians and ONLY 2 Americans. Americans are 65 and 68 years old. Just few unskilled YOUNG Americans in factory shop and office (~800 people total). The same situation in our another smaller plant (~600 people). In line with opinion of AMERICAN engs, the shop runs MUCH WORSE than 5 year ago. Quality and efectivity of production going down so fast after UNION sign contract 4 years ago. Our company slowing down like all country (20% layoff in 2009, NO ALIENTS layed off!!!). But believe me, I don't care. I can speak 6 languages, I skilled for 3 fields, I keep MS degree of good university, I've had 2 citezensips, I have good health, I'm young, I have NO debt, childrens and another abligations. Who can competite with me from young Americans? And, BWT, they don't want to competite. ;)

Report this comment
#6) On February 13, 2010 at 5:37 PM, VExplorer (29.77) wrote:

Sorry, for spelling errors. I've not used speller :)

Report this comment
#7) On February 13, 2010 at 5:45 PM, VExplorer (29.77) wrote:

and math errors: 18 engs in dept. = 2+14+2

Report this comment
#8) On February 13, 2010 at 6:36 PM, starbucks4ever (97.36) wrote:

davejh23,

loaded question is a question with a false or questionable presupposition, and it is"loaded" with that presumption (from http://www.statemaster.com/encyclopedia/Loaded-question )

A common use of loaded question: "You say you want to save 1 Trillion from healthcare reform. So you must want to deny care to the elderly Medicare patients, right?"

 VExplorer,

There are some irreplaceable people, but their number is by a few orders of magnitude less than the number of people who consider themselves irreplaceable. And the really irreplaceable ones don't fret about tax rates nearly as much as those who think they are irreplaceable. Case in point: Buffett who wants to pay more taxes vs. Blankfein who's doing God's work. If taxes are raised, guess who will stay and who will leave the ship to do God's work elsewhere?

Report this comment
#9) On February 13, 2010 at 6:49 PM, VExplorer (29.77) wrote:

zloj,

Buffett just DECLARED he wants to pay more taxes, not really paid. I remember he told about favorits in management - NEVER.After that he set his SON ahead of really talated people. I don't believe ANYBODY irreplaceable. ICANNOT help to this country and, actually, don't want "to help" to any. Nobody can help people then they don't ask (or even accept) help. I've leaved God's work to God.I just want care about my family with help of God. And wish the same to you.

Report this comment
#10) On February 13, 2010 at 8:17 PM, ChrisGraley (29.75) wrote:

Don't bother to explain VExplorer, liberals can't be bothered with economics and in most cases math.

 

Report this comment
#11) On February 14, 2010 at 2:20 PM, russiangambit (29.27) wrote:

VExplorer, so good of your trying to explain. I stopped a long time ago. Most americans don't want to know how to do things better or more efficiently because it would require them working harder. And even if they don't mind that they usually don't have the skills anyway.It takes a lot of hard work to aquire the skills in the first place. In fact, americans like the status quo, they don't really want to change. The only problem is the status quo is no longer sustainable. 

Devoish, the thing is that usually a foreign worker is laid off before any americans are because foreign worksers costs more (additional legal fees). You run into a problem that you got no american workers at all. I worked for top 5 IT consulting firms for a long time and 80% of their workers are either immigrants or children of immigrants - indians, vietnamese, chinese, europeans, very few americans. The few americans who got the skills moved into management very fast because they had one invaluable advantage - they spoke without an accent. It all starts with education and hard work and american education is in deep do-do as well as the hard work culture. My be 10% unemployement will change that.

Report this comment
#12) On February 14, 2010 at 5:52 PM, davejh23 (< 20) wrote:

http://finance.yahoo.com/news/US-debt-will-keep-growing-apf-219502322.html?x=0&sec=topStories&pos=3&asset=&ccode=

"Take Social Security, Medicare and other benefits. Add in interest payments on a national debt that now exceeds $12.3 trillion. It all will gobble up 80 percent of all federal revenues by 2020, government economists project."

 

Report this comment
#13) On February 14, 2010 at 7:00 PM, starbucks4ever (97.36) wrote:

"Take Social Security, Medicare and other benefits. Add in interest payments on a national debt that now exceeds $12.3 trillion. It all will gobble up 80 percent of all federal revenues by 2020, government economists project."

davejh23

This is not the right way to put it. Here is the right way: DON'T do a meaningful healthcare reform, CONTINUE wasting half-trillion dollars a year on military toys, ALLOW the top 1% to enjoy unprecedented tax cuts enacted by baby Bush, and then you'll be spending 80% and your coffers will be empty and the middle class will be in no position to contribute more taxes because it will be already crushed by HMO bills. In other words, keep driving your Jeep right into that oak tree in front of you, and then you will soon experience a crash - who would have thought?

Report this comment
#14) On February 14, 2010 at 9:29 PM, ChrisGraley (29.75) wrote:

#13) On February 14, 2010 at 7:00 PM, zloj (99.25) wrote:

This is not the right way to put it. Here is the right way: DON'T do a meaningful healthcare reform, CONTINUE wasting half-trillion dollars a year on military toys, ALLOW the top 1% to enjoy unprecedented tax cuts enacted by baby Bush, and then you'll be spending 80% and your coffers will be empty and the middle class will be in no position to contribute more taxes because it will be already crushed by HMO bills. In other words, keep driving your Jeep right into that oak tree in front of you, and then you will soon experience a crash - who would have thought?

I think it would be better said this way. STOP SPENDING MONEY THAT YOU DON'T HAVE! YOU ARE LITERALLY SIGNING YOUR OWN CHILDREN INTO SLAVERY! If you want to make health care even worse, then put government in charge of it! If you want to improve it, try tort reform, (so 50% of your hospital bill doesn't go to malpractice insurance), try allowing competition across state lines, (so that health care companies can't inflate rates with protection from bribed state officials,  try giving the consumer an idea of the cost of medical procedures ahead of time so that they can make an informed choice and revise intellectual property laws to stop price gouging by the drug companies.

As far as military spending, that needs to be cut as well, but protecting it's population is one of the few things that a government is supposed to do. Being our doctor, daddy, bank, or grocery store is not.

And as far as tax cuts go, yes, eventually they should be cut. They should be cut once we are fiscally responsible. If they aren't cut, the middle class will continue to be destroyed by Walmart and it's array of Chinese goods well before our debt implosion. How hard is it to understand for the Middle Class that every entitlement that you get puts your job in even more jeopardy?

Again economics and basic math. It's not that hard. Tax me till I can't compete and I leave and take my jobs with me. I'll stay as long as you are willing to pay more for my goods to support that free healthcare, but you will always buy the an equal product for a cheaper price. If you don't tax me and just print the money for the free healthcare, I'll probably still leave. My costs go up because the dollar is worth less. Demand goes down because your dollar is worth less. It's much easier for me to produce the same product across the border and pay pesos and ship it in. 

It would be great if we could live in that liberal world where it's possible for everyone to eat ambrosia and fart rainbows, but in the world that actually holds you accountable for your decisions, that is never going to happen. 

It amazes me on this site in particular that anyone could be liberal, because most of you can read a balance sheet and understand business to some extent. All that crap that you want in the left column gets paid for in the right column. I know you think that you can get business to pay for it and it won't come out of your pockets, but where do you think business gets the money to pay for it? They raise their prices to you. If you think that you can just refuse to pay the higher price, you can and already do. That's why your toothpaste, tennis shoes and computers are all made in China. That's why jobs are harder to find for the middle class even when the economy is booming. 

Is it that hard to understand that you are your own worst enemy? 

Report this comment
#15) On February 15, 2010 at 6:14 PM, rofgile (99.31) wrote:

ChrisGraley:

 There are always multiple intelligent perspectives on lots of issues.  Especially the proper spending of money!  Just ask any married person.

 One of the world's greatest business owners and investors (Warren Buffett),  is a avowed democrat and supporter of the current administration.  You can't say that he's a fool.  Just goes to prove the above paragraph.

 ---

 I believe the remedy is similar to what zloj says:

1) Cut military spending by 500 billion.  Just makes sense.

2) Reform healthcare as suggested in the current plan in congress.

3) End subsidies for large agriculture.

4) Increase tariffs on imported goods (are you afraid of a trade war with China?  Do you think China's government can stabily exist without its exports to the US?  Nope).

5) Cut tax breaks on large oil companies.

 

----

 That's my liberal agenda that would balance the budget, and improve our foreign trade balance import/export balance.  We import TOO much from China, and export too little (mainly to countries other than China).

 -Rof

Report this comment

Featured Broker Partners


Advertisement