U.S Government Debt Crisis !!!

[taylor192]

This graph is misleading. Obama had the opportunity to reverse the damage done by Bush, and didn't. So Obama is now responsible for how much those Bush programs cost during his term.

So essentially divide the Bush numbers by 1/2 and add them to the Obama side.

[TheNewGirl]

You know, I know that sales taxes are retroactive and generally frowned on. But it occurs to me that a GST (though I would have it applied to only none essential items) is possibly the best solution to the US government's problem.

It allows an increase in revenue with out increasing income tax.

[taylor192]

Originally Posted by will068

Of course not, but I'm not of the ultra rich. I belong in the middle class. Thus, it benefits me more when I get favoured by the tax laws than the ultra rich.

Awesome reply, let me dig into it a bit.

I agree, I'm upper-middle-class so income tax decreases benefit me. Yet I am getting to an age where my investments surpass my income, and those tax advantaged investments are very useful to me too. I'm not alone in this, as most people older than me "should" have a 6-7 figure retirement savings account ("should", many don't cause they didn't prioritize saving) and be benefiting from the same tax-advantaged investments of the ultra-rich.

Originally Posted by will068

Even if the taxes were raised to the Clinton-era magnitudes, taxes in the US are still painstakingly low compared to here.

They aren't that low, especially when you get into cities with a municipal income tax, higher property tax, and then paying out of pocket for medical insurance. I looked into moving to Minnesota and Texas, and after everything considered it wasn't that much lower.

That said, taxes today are lower than decades ago. Here's a graph of US income tax, and then US and Canadian corporate tax. Thus taxes are really low, not just for the ultra rich, for everyone.

Originally Posted by will068

If there is such thing as a Laffer Curve, I wonder if there's a theory out there that shows that reaching a certain point of wealth for a corporation does not correlate to the same rate of expansion of jobs after this point. Perfect example is Apple and their $50 billion in Cash. Could be a great thesis for an Econ Post Grad student.

Lots of companies are sitting on piles of cash cause the economy sucks. Hell I'm sitting on a pile of cash too. Rates need to rise to make investment more attractive, its just too bad we're all so far in debt that rising rates would kill the economy.

I have seen charts showing big business are actually net losers of jobs. Small-medium business creates all the jobs.

Originally Posted by will068

Taylor, I understand your paradigm though. Just like saying on why we should have Universal Health Care when there are obese,lazy fucks out there not even helping themselves. Well, in this last Financial Meltdown we had, it was the ultra rich in the Finance related Industry Groups that caused the problem. That's like me saying: "I'm the one that shoved french fries 24/7 to these obese people complaining for medical assistance. Fuck 'em, I still don't want universal health care - I'm fucking healthy." This is where the Government has to step in to protect the interest of the majority.

Everyone blames the big bad banks for handing out credit like it was candy - what happened to personal responsibility? Did the banks knock on those people's doors and drag them to house showing and make them sign mortgages? no. Did the banks swipe their CCs while they were out shopping? no. Did the banks force them to lease cars they couldn't afford? no.

So I disagree with your analogy. No-one forced fat people to eat french fries, they did so willingly cause they are stupid, and they should pay the price for being stupid. Your analogy is as bad as San Fransisco forcing McDs not to sell Happy Meals cause somehow these kids just happen to make it to McDs and pay for Happy Meals all by themselves...

[taylor192]

Originally Posted by AWDTurboLuvr

Well, most of them have signed "The Taxpayer Protection Pledge" to never introduce any new taxes. See "Americans for Tax Reform" for more info.

Originally Posted by TheNewGirl

You know, I know that sales taxes are retroactive and generally frowned on. But it occurs to me that a GST (though I would have it applied to only none essential items) is possibly the best solution to the US government's problem.

It allows an increase in revenue with out increasing income tax.

See the above reply. Those newly elected Republicans at the last mid-term election will never let it happen, cause they were voted in by campaigning for no more taxes.

[Ferra]

Originally Posted by taylor192

This graph is misleading. Obama had the opportunity to reverse the damage done by Bush, and didn't. So Obama is now responsible for how much those Bush programs cost during his term.

So essentially divide the Bush numbers by 1/2 and add them to the Obama side.

Either you are trolling or you are retarded...

stopping the bush era tax-cut is exactly what he is trying to do
He has also done a much better job at pulling out from iraq & afghanistan than bush did...

In all fairness, I think the obama stimulus spending should be added back to the bush side since bush was the one who started the shit that made the stimulus spending necessary in the first place.

[taylor192]

Originally Posted by Ferra

Either you are trolling or you are retarded...

stopping the bush era tax-cut is exactly what he is trying to do
He has also done a much better job at pulling out from iraq & afghanistan than bush did...

In all fairness, I think the obama stimulus spending should be added back to the bush side since bush was the one who started the shit that made the stimulus spending necessary in the first place.

You're very uninformed.

When the Dems had the house he had the chance to kill the Bush tax cuts, yet instead signed to extend them. Strike one.

Obama may have pulled out of Iraq, yet he actually sent more troops to Afghanistan. Strike two.

Stimulus spending is never necessary. It just kicks the can down the road. Obama had the chance to do something different, like Clinton, yet didn't. Strike three, you're out.

Come back when you know a little bit more than what Fox news has on.

[Ferra]

Originally Posted by taylor192

You're very uninformed.

When the Dems had the house he had the chance to kill the Bush tax cuts, yet instead signed to extend them. Strike one.

Obama may have pulled out of Iraq, yet he actually sent more troops to Afghanistan. Strike two.

Stimulus spending is never necessary. It just kicks the can down the road. Obama had the chance to do something different, like Clinton, yet didn't. Strike three, you're out.

Come back when you know a little bit more than what Fox news has on.

The tax-cut was extend because it contained tax-cut for the average middle income households as well, I am sure he would've stopped the super wealthy tax-cut (where most of the money is) if he could without increasing tax for the average middle income households

Stimulus spending is NEVER necessary?? Let me guess....you also think we can do without any fed, central bank, and monetary policy as well...right?

Sounds like it is you who are watching too much fox news...

[TheNewGirl]

Originally Posted by taylor192

See the above reply. Those newly elected Republicans at the last mid-term election will never let it happen, cause they were voted in by campaigning for no more taxes.

But regardless of what spending cuts are made they HAVE to increase revenue. The only way to do this is to tax people or businesses.

They can't hold the people hostage on this or it's never going to be resolved.

[taylor192]

Originally Posted by TheNewGirl

But regardless of what spending cuts are made they HAVE to increase revenue. The only way to do this is to tax people or businesses.

They can't hold the people hostage on this or it's never going to be resolved.

They are NOT holding anyone hostage. The people voted in Republicans on campaign promises of no tax increases. That's the democracy you silly lefties like until you don't get your own way.

[taylor192]

Originally Posted by Ferra

The tax-cut was extend because it contained tax-cut for the average middle income households as well, I am sure he would've stopped the super wealthy tax-cut (where most of the money is) if he could without increasing tax for the average middle income households

Could've, should've, would've aren't very compelling arguments. The fact stands Obama extended the cuts, so Obama shares in the blame.

Originally Posted by Ferra

Stimulus spending is NEVER necessary?? Let me guess....you also think we can do without any fed, central bank, and monetary policy as well...right?

Do you know what the role of the Fed is? or what Monetary Policy is supposed to govern?

Those institutions/policies are not supposed to to provide a glorified piggy bank to the government. They are supposed to control money supply and inflation. Instead they've been bastardized and abused to let the country spend stupidly.

Stimulus spending should be like a rainy day account. You save during good times so you can spend during bad times. If you don't save enough during good times, you have to cut back during bad times. I say "never" cause most countries are in debt. They have no "rainy day fund" so any stimulus spending just kicks the can down the road and makes the problem worse.

Yet you don't care right? tax the wealthy to pay for your lifestyle, I bet you don't have a penny saved.

[taylor192]

A lot of people voted for this man, not the idiot President today.

Originally Posted by Senator Barack Obama 2006

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

Senator Barack Obama Explaining his 2006 Vote Against Raising the Debt Limit - By Andrew C. McCarthy - The Corner - National Review Online

[Jermyzy]

Originally Posted by taylor192

A lot of people voted for this man, not the idiot President today.



Senator Barack Obama Explaining his 2006 Vote Against Raising the Debt Limit - By Andrew C. McCarthy - The Corner - National Review Online

I love when politicians are strongly opposed to a certain policy, but can turn 180 and fully support the same policy later when it benefits them and "forget" how strongly they opposed it earlier

[TheNewGirl]

Originally Posted by taylor192

They are NOT holding anyone hostage. The people voted in Republicans on campaign promises of no tax increases. That's the democracy you silly lefties like until you don't get your own way.

People voted Obama on his healthcare promises too.

How come it's only democracy when it's the Righties getting their way?

As a side, god bless The Onion: http://www.theonion.com/articles/eme...dispatc,21023/

[taylor192]

Originally Posted by TheNewGirl

People voted Obama on his healthcare promises too.

How come it's only democracy when it's the Righties getting their way?

That was 2008, welcome to today. In 2010 the biggest swing of seats in nearly a century occurred, with the Dems losing 60+ seats in the House and 6 in the Senate, handing control of the House back to the Reps.

The people spoke, they want the Obama I quoted above, not the one they got.

[will068]

Originally Posted by taylor192

So I disagree with your analogy. No-one forced fat people to eat french fries, they did so willingly cause they are stupid, and they should pay the price for being stupid. Your analogy is as bad as San Fransisco forcing McDs not to sell Happy Meals cause somehow these kids just happen to make it to McDs and pay for Happy Meals all by themselves...

Actually, it'll be McD's saying to kids that they can own the Happy meal toy for $1.00. But making them sign a contract that says McD's has the right to charge them extra in the future. Kid asks McDonald's what it means, and the McD's say it's nothing and they should just sign it. A few months later, McD's goes to the kids how's and asks for $500 for the toy. Kid can only give $5 since Kid doesn't have the money. McD gets the repo guys to repossess the toy. Because of the all these deregulation lobbied by McD, the law is at the side of McD and not the Kid. Poor Kid.

That's why I hate these banks. They just bought out the whole system. There should be some law helping out the little guys. Just like how there is an Anti Trust law so companies do not get too powerful in their industry.


Back on topic. I am all for the Clinton era tax rates. The US had a balanced budget at that time and for a couple of years, budget surplus. I remember when CNN did a poll on what to do with the surplus, the majority said pay the debt.

As for corporations, the US still has the environment to make money. Lots of customers, reasonable tax rates, and rule of law applies. Bump up the tax rate by a few percent - there will still be money to be made. Again, check the Clinton years.

[iEatClams]

Originally Posted by taylor192

Do you know why companies try to make a profit? Many are publicly owned and have to show a profit to their shareholders.



I know "hard", don't you dare lecture me on how "hard" it is. I've been there and worked through it without depending on the system to bail me out - so fuck everyone who says its hard then doesn't do anything about it - they are just lazy fucks and deserve what little they have.

You're entitled to your own opinion, and I'm not here to lecture you.

I hear you on why you don't think the lazy should not be subsidized and your other arguments etc. I even agree that many spending cuts on certain programs are needed.

However here's my take:

As someone who worked in the investment industry, I understand the goal is to maximize stock price.

My issue is the long term, my kids, and their kids, and I want them to have the best possible chance at having a decent life.

Similar to you, my folks were dirt poor immigrants who came here with nothing. Same story, they worked hard etc etc. I was dirt poor growing up, worked for money since I was 12, never had real money until I graduated from university.

I know this is off-topic, but there are many social factors that come into play. Sometimes people don't save becuase their parents never thought them to save. They don't even know how to study. If you were a bastard child to a teenage mom, the chances of you succeeding are very slim.

When I was younger, I grew up in a poorer neighbourhood and all my friends didn't try in school, I didn't have the proper surrounding that allowed to succeed. My parents weren't educated, they were blue collar, so they didn't give me any clues about the white-collar jobs. Most of my friends were what you would label as "lazy", and "stupid", and at that age, I would consider myself that too.

But what changed was my parents found work in a different province, moved to a bigger city and I grew up in a better neighbourhood and made new friends who had better habits, which affected me. . .no longer became "lazy" and "stupid", went to university, got educated, made good money, invested my money to make more money,etc, etc and now I'm in a higher social class.

However one of my best buddies from before I moved continued to grow up in that shietty neighbourhood, and never got a chance to move up the social class. It's easy to say he has a choice, but social/cultural and other factors sometimes prevent people from doing such things.

if all your friends are fat, theres a higher chance you will be fat.
if no one around you or no one ever taught you to save, chances are you wont save.
if you're father is a Executive/Partner of a company, chances are you will be educated and do something pretty decent.
but if you're parents were janitors . . .well you get the point.

of course there's always the exceptions but those are again the exceptions and not the rule.

Again I'm not taking anything away from personal accountability as ultimately you are responsible for your own actions, but sometimes it's not entirely their fault that they are "lazy", "stupid", "fat" etc.

I believe that if I was born again randomly, I would like to live in a society that allows me to best succeed, so that if I was born to parents of a Billionaire, a Warehouse worker, or an Alcoholic, or someone not in the top 2%, that I have the Best Possible probability to succeed . ..

back on topic. . . . and right now, I believe the Republican Policies of saying no to Tax Reforms and cutting many essential social programs doesn't increase that possibility.

[taylor192]

Originally Posted by will068

Actually, it'll be McD's saying to kids that they can own the Happy meal toy for $1.00. But making them sign a contract that says McD's has the right to charge them extra in the future. Kid asks McDonald's what it means, and the McD's say it's nothing and they should just sign it. A few months later, McD's goes to the kids how's and asks for $500 for the toy. Kid can only give $5 since Kid doesn't have the money. McD gets the repo guys to repossess the toy. Because of the all these deregulation lobbied by McD, the law is at the side of McD and not the Kid. Poor Kid.

LOL a little extreme, yet I get it.

There was certainly predatory lending where the details were not disclosed and people urged to sign. I watched a special on it, how they went into neighbourhoods and essentially rounded people up to go buy houses. Disgusting, yet this was a very slim part of the problem, most of it was just fat hungry stupid people buying overpriced french fries cause everyone else was. They weren't interested in reading the nutritional info, even if someone pointed out the obvious... hell look around this site for how many real estate threads there are where the person can barely afford the mortgage

[Meowjin]

[taylor192]

Originally Posted by MajinHurricane

...

Now you're just trolling, stop it before you lose whatever credibility you have left.

[taylor192]

Originally Posted by azndude69

My issue is the long term, my kids, and their kids, and I want them to have the best possible chance at having a decent life.

Good post dude!

I plan to do the same thing my parents, grandparents, and siblings did: move. Even you admit your life was better when your parents immigrated, then eventually moved. We may be a byproduct of our surroundings, yet we can change our surroundings.

Getting back to the topic, debt, is part of the problem. Those deep in debt have little choice but to stay and stick their hand out asking for help, and all this non-sense of the past decade where debt levels have risen to record highs is not helping matters. Not only is the country racking up debt, people are begging for help with their own debt problems. Lose-lose.

Thus why I am adamant that the solution has to be cuts. More revenue will translate into more spending, and a bigger problem later.

[Gt-R R34]

I read back the post regarding the Rich VS Poor and the Tax cuts

Buffet said it best:

On July 7, Warren Buffett told Bloomberg: "I think the rich have a responsibility to pay higher tax rates." Then he groused that his wealthy friends are "paying lower tax rates than the people who are serving us the food." Mr. Buffett has been voicing this complaint for years, once observing that his personal tax rate of 17.7% is lower than that of his receptionist (30%).

That should end that arguement, and get back to topic

Btw- I have no doubt that the rich is still probably paying ~50% of the US taxes in terms of actual dollars. Still you live in a democratic country, help should be given/earned but never rescinded - AKA Republicans.

[goo3]

Originally Posted by Jermyzy

I love when politicians are strongly opposed to a certain policy, but can turn 180 and fully support the same policy later when it benefits them and "forget" how strongly they opposed it earlier

So why did he say one thing in 2006 and something else in 2011? Is it power / convenience? Objectively speaking, I think it has more to do with this:

Deficit spending - Wikipedia, the free encyclopedia

Keynesian Effect

Following John Maynard Keynes, many economists recommend deficit spending to moderate or end a recession, especially a severe one. When the economy has high unemployment, an increase in government purchases creates a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output. (This is the multiplier effect). This raises the real gross domestic product (GDP) and the employment of labour, and if all else is constant, lowers the unemployment rate. (The connection between demand for GDP and unemployment is called Okun's Law.) Cutting personal taxes and/or raising transfer payments can have similar expansionary effects, though which method has a better stimulative economic effect is a matter of debate.[citation needed]

The increased size of the market, due to government deficits, can further stimulate the economy by raising business profitability and spurring optimism, which encourages private fixed investment in factories, machines, and the like to rise. This accelerator effect stimulates demand further and encourages rising employment. Increase in government payroll has been shown to depress the economy in the long run.[citation needed]
Similarly, running a government surplus or reducing its deficit reduces consumer and business spending and raises unemployment. This can lower the inflation rate. Any use of the government deficit to steer the macro-economy is called fiscal policy.

Some ppl disagree with this approach. That's fine, but keep in mind Canada and many other countries have been doing the same thing. When a recession hits, the money the govt is committed to paying stays the same, but tax revenues drop quickly, throwing balanced budgets out of whack. They are afraid (rightly or wrongly) that cutting back too fast will make the recession worse, and the less bad alternative is to be in a deficit short term and paying it back when times are less harsh.

Now, you can like or Obama or not.. I don't care. But I would base it on more than what political junkies here and on tv tell you. Sadly, I find it's all just of a game of: how much can we lie to you to get you to change your opinion.

[Culverin]

Jeeze, how did this ever become such a serious topic?

[mr_chin]

i'm no eco101 expert, but what happens when they reach the ceiling and the ceiling is not raised?

Most importantly, how will that affect our stock market?

[hk20000]

When they reach the ceiling and the ceiling is not raised, essentially the Federal Bank has to order a stop of printing them papers.

Now no papers people are not getting paid. Public services, military, welfare checks, health care blah blah blah have to be cut/stopped.

Then a lot of people will be pwn3d coz that's how they have come to rely upon... Either the people that run this country stop getting paid so much or they stop spending so much there won't be money in the Federal bank to pay the expenses.

It's like having to run a marathon while coughing up blood right now.