US is in Even Worse Shape Financially Than Greece

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US is in Even Worse Shape Financially Than Greece

Post by Anonymous Bosch »

According to the manager of the world's largest bond fund:
When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco's Bill Gross told CNBC Monday.

Much of the public focus is on the nation's public debt, which is $14.3 trillion. But that doesn't include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at "nearly $100 trillion," that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won't find a solution overnight.

"To think that we can reduce that within the space of a year or two is not a realistic assumption," Gross said in a live interview. "That's much more than Greece, that's much more than almost any other developed country. We've got a problem and we have to get after it quickly."



"We've always wondered who will buy Treasurys" after the Federal Reserve purchases the last of its $600 billion to end the second leg of its quantitative easing program later this month, Gross said. "It's certainly not Pimco and it's probably not the bond funds of the world."
Yeesh, that’s a hefty share of the bond market saying, "Thanks, but no thanks". That does not bode well for the fiscal well-being of the US.

I'm sure it's just a flesh wound (or a headwind, or a bump in the road, etc).
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Re: US is in Even Worse Shape Financially Than Greece

Post by Zarathud »

He's right that U.S. Treasury returns are quite low, but I don't buy his justification. The money guaranteed for Medicare, Medicaid and Social Security is largely spread out over decades and largely (but not entirely) offset by future revenues. The $100 trillion figure is ludicrious and makes me think he's shorting U.S. Treasuries. As long as investors are too scared to invest in stocks, U.S. Treasuries will continue to do well.
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Re: US is in Even Worse Shape Financially Than Greece

Post by PLW »

The very fact the Treasury returns are low is good evidence that we are in much better shape then Greece. If people are willing to lend at low rates, that means they believe the return is very safe. Check out the yield on Greek debt right now. I heard on the radio this morning that it just hit an all-time high.
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Re: US is in Even Worse Shape Financially Than Greece

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Zarathud wrote:He's right that U.S. Treasury returns are quite low, but I don't buy his justification. The money guaranteed for Medicare, Medicaid and Social Security is largely spread out over decades and largely (but not entirely) offset by future revenues.
This. I'm no expert on macro-economics so I was a bit shy in commenting, but since Z jumped in, I will too. Reading this guy talk about future liabilities without mentioning future revenue seemed HUGELY misleading to me.

There is no doubt that the US is in trouble. Real, actual trouble. But this guy seemed outlandish to me.
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Re: US is in Even Worse Shape Financially Than Greece

Post by noxiousdog »

Zarathud wrote:He's right that U.S. Treasury returns are quite low, but I don't buy his justification. The money guaranteed for Medicare, Medicaid and Social Security is largely spread out over decades and largely (but not entirely) offset by future revenues. The $100 trillion figure is ludicrious and makes me think he's shorting U.S. Treasuries. As long as investors are too scared to invest in stocks, U.S. Treasuries will continue to do well.
I tend to agree, but the fact that it's Bill Gross makes me give it some credence.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Zarathud »

The institutional money isn't looking for safety, it's the wealthy and retirees. It's a liquidity trap -- billions of investible assets are sitting in cash and U.S. Treasuries. Individuals just aren't willing to ride the roller coaster of volatility. My hope is that inflation pressures ease and Congress raises the debt cieling soon, followed by some economic good news. If this money gets back into the system, we'll have economic growth again.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Enough »

Gross talks deficits.
Both parties, in fact, are moving to anti-Keynesian policy orientations, which deny additional stimulus and make rather awkward and unsubstantiated claims that if you balance the budget, "they will come." It is envisioned that corporations or investors will somehow overnight be attracted to the revived competitiveness of the U.S. labor market: Politicians feel that fiscal conservatism equates to job growth. It's difficult to believe, however, that an American-based corporation, with profits as its primary focus, can somehow be wooed back to American soil with a feeble and historically unjustified assurance that Social Security will be now secure or that medical care inflation will disinflate. Admittedly, those are long-term requirements for a stable and healthy economy, but fiscal balance alone will not likely produce 20 million jobs over the next decade. The move towards it, in fact, if implemented too quickly, could stultify economic growth. Fed Chairman Bernanke has said as much, suggesting the urgency of a congressional medium-term plan to reduce the deficit but that immediate cuts are self-defeating if they were to undercut the still-fragile economy.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Smoove_B »

Debt talks collapse:
"These conversations could continue if they take the tax hikes out of the conversation," Boehner said.
So this is what it all comes down too, eh?
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Re: US is in Even Worse Shape Financially Than Greece

Post by Kraken »

Meh. Call their bluff. From your link:
Republicans may not have enough votes to pass a deal through the House in any case, as many newly elected conservatives feel little urge to compromise.

That means Boehner may have to rely on Democratic votes, and Democrats will insist that tax increases must be part of the deal, one lawmaker said.

"I think we walk away unless there's some revenue raisers," Democratic Representative Allyson Schwartz said at a breakfast event hosted by Third Way, a centrist think tank. "It is going to take a bipartisan effort to get this done. That's something Republicans need to realize and we're not there yet."

...

Cantor and Boehner may need to allow a debt-ceiling vote to fail before they can craft a compromise, budget expert Stan Collender said. That could provide a jolt to markets akin to the failed bank bailout vote of 2008, which caused the Dow Jones Industrial Average to drop 800 points.

"There may need to be a negative market reaction to that vote to get Republicans to move from their current position," said Collender, a budget analyst with Qorvis Communications.

One Democratic aide said Cantor recognizes that tax increases will have to ultimately be part of any deal but that he did not want to be the one to say so.

"Cantor just threw Boehner under the bus," the aide said.
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Re: US is in Even Worse Shape Financially Than Greece

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If history is any guide, higher taxes are unlikely to reduce the deficit:
In the late 1980s, one of us, Richard Vedder, and Lowell Gallaway of Ohio University co-authored a often-cited research paper for the congressional Joint Economic Committee (known as the $1.58 study) that found that every new dollar of new taxes led to more than one dollar of new spending by Congress. Subsequent revisions of the study over the next decade found similar results.

We've updated the research. Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.
Call me a cynic, but the notion that the same venal pols that racked up all the debt would have us believe that they will now responsibly pay it down if they are just entrusted with more tax dollars and a higher credit limit, seems naive to say the least. I have to agree with Milton Friedman: Politicians will always spend every penny of tax raised, and whatever else they can get away with.
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Re: US is in Even Worse Shape Financially Than Greece

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That's silly. (a) we're trusting politicans to reduce spending regardless of whether or not we raise taxes. We're currently spending more than we take in, and as part of any deal they're going to cut spending. In this context, why would taking in more revenue via taxes as part of a deal that reduces spending make it less likely for them to reduce spending?

(b) The budget deals of 1990 and 1994 raised taxes and reduced spending, and sharply reduced the deficits (up until the Bush tax cuts and wars).

(c) The reference to giving them a "higher credit limit" (I'm assuming that this is a reference to the debt ceiling) is a canard. Every budget on the table, democratic or GOP, requires raising the debt ceiling. There is no feasible budget on the table that does not require giving a higher credit limit.
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Re: US is in Even Worse Shape Financially Than Greece

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Anonymous Bosch wrote:If history is any guide, higher taxes are unlikely to reduce the deficit:
In the late 1980s, one of us, Richard Vedder, and Lowell Gallaway of Ohio University co-authored a often-cited research paper for the congressional Joint Economic Committee (known as the $1.58 study) that found that every new dollar of new taxes led to more than one dollar of new spending by Congress. Subsequent revisions of the study over the next decade found similar results.

We've updated the research. Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.
Call me a cynic, but the notion that the same venal pols that racked up all the debt would have us believe that they will now responsibly pay it down if they are just entrusted with more tax dollars and a higher credit limit, seems naive to say the least. I have to agree with Milton Friedman: Politicians will always spend every penny of tax raised, and whatever else they can get away with.
+1

The only possible way I can see raising taxes helping with the debt is if it is a tax across the board, not just singling out the 'rich' out of class envy tactics, and that money can only be spent on the debt. They would also have to do something to prevent them from playing slight of hand games so the money currently being tossed at the debt isn't just reallocated to some other spending, as has been done by many of the states with federal money that had things tied to it.
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Re: US is in Even Worse Shape Financially Than Greece

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Why would whom the higher taxes are drawn from have any impact on the deficit? What determines whether the taxes will help with the deficit is whether it brings in more revenue. Who is comes from is just a distribution policy question.

As for the rest, you can't do anything to tie it to the deficit or bar slight of hand rules. Well, you can, but any future Congress could simply undo that by passing a statute that says that they can. What will force Congress to pay down the debt is a combination of politics and lobbying from groups that stand to lose otherwise.
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Re: US is in Even Worse Shape Financially Than Greece

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El Guapo wrote:Why would whom the higher taxes are drawn from have any impact on the deficit? What determines whether the taxes will help with the deficit is whether it brings in more revenue. Who is comes from is just a distribution policy question.

As for the rest, you can't do anything to tie it to the deficit or bar slight of hand rules. Well, you can, but any future Congress could simply undo that by passing a statute that says that they can. What will force Congress to pay down the debt is a combination of politics and lobbying from groups that stand to lose otherwise.
While the article Smoove linked to just says taxes, the news report I heard stated taxes on the 'rich'. That is part of the reason why the talks broke down. I was just stating that IMO if there is to be a tax increase to cover the debt that it needs to come from everyone not just a select group of people. I know there is no real way to stop them from playing their little games with everything, but one can dream can't they. :roll:
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Re: US is in Even Worse Shape Financially Than Greece

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Smoove_B wrote:Debt talks collapse:
"These conversations could continue if they take the tax hikes out of the conversation," Boehner said.
So this is what it all comes down too, eh?
The Republicans are idiots. There's no way the deficit can be cut purely by spending cuts. They would have to be far too deep. There's going to have to be compromise. If the Republican compromise is that the deficit is to be cut by reducing spending only, and they'll let the Dems pick what gets cut, well, that's not a compromise. That's giving the Republicans all they really want. Even the President's commission used tax increases to get to 25% of their deficit reductions, with 75% from spending cuts. There are going to have to be increased taxes. Demographically we have an older population and we didn't save to support them - we spent the money, Dems and Repubs alike. So we're going to face increased public spending for that reason alone, even if we held all else flat.
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Re: US is in Even Worse Shape Financially Than Greece

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Arcanis wrote:While the article Smoove linked to just says taxes, the news report I heard stated taxes on the 'rich'. That is part of the reason why the talks broke down. I was just stating that IMO if there is to be a tax increase to cover the debt that it needs to come from everyone not just a select group of people. I know there is no real way to stop them from playing their little games with everything, but one can dream can't they. :roll:
If CEO pay is going up faster than my pay (and I can assure you it is), why shouldn't they pay? CEO's consistently get much larger percentage raises than the rank and file. I see no reason to not tax them more. Maybe if pay increases were more equitable I might feel otherwise but right now, I'm not seeing it.
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Re: US is in Even Worse Shape Financially Than Greece

Post by LawBeefaroni »

El Guapo wrote:As for the rest, you can't do anything to tie it to the deficit or bar slight of hand rules.
Just to beat Grund to the punch, it's "sleight of hand." :wink:


Grifman wrote:
Arcanis wrote:While the article Smoove linked to just says taxes, the news report I heard stated taxes on the 'rich'. That is part of the reason why the talks broke down. I was just stating that IMO if there is to be a tax increase to cover the debt that it needs to come from everyone not just a select group of people. I know there is no real way to stop them from playing their little games with everything, but one can dream can't they. :roll:
If CEO pay is going up faster than my pay (and I can assure you it is), why shouldn't they pay? CEO's consistently get much larger percentage raises than the rank and file. I see no reason to not tax them more. Maybe if pay increases were more equitable I might feel otherwise but right now, I'm not seeing it.
It's harder to tax someone making $14M a year. The rank and file can't afford the same tax lawyers. Granted that higher hanging fruit will probably bear more sweet, sweet revenue if they can get to it.



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Re: US is in Even Worse Shape Financially Than Greece

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Grifman wrote:
Arcanis wrote:While the article Smoove linked to just says taxes, the news report I heard stated taxes on the 'rich'. That is part of the reason why the talks broke down. I was just stating that IMO if there is to be a tax increase to cover the debt that it needs to come from everyone not just a select group of people. I know there is no real way to stop them from playing their little games with everything, but one can dream can't they. :roll:
If CEO pay is going up faster than my pay (and I can assure you it is), why shouldn't they pay? CEO's consistently get much larger percentage raises than the rank and file. I see no reason to not tax them more. Maybe if pay increases were more equitable I might feel otherwise but right now, I'm not seeing it.
I'm looking at it as a % of total pay. it doesn't matter how much they make they should still pay the same %, which is more actual $. Then again I also think that the tax code should be no bigger than a pamphlet at doctor's office, that way there aren't nearly the number of loopholes to hide money in.
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Re: US is in Even Worse Shape Financially Than Greece

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Grifman wrote:The Republicans are idiots. There's no way the deficit can be cut purely by spending cuts. They would have to be far too deep. There's going to have to be compromise. If the Republican compromise is that the deficit is to be cut by reducing spending only, and they'll let the Dems pick what gets cut, well, that's not a compromise. That's giving the Republicans all they really want. Even the President's commission used tax increases to get to 25% of their deficit reductions, with 75% from spending cuts. There are going to have to be increased taxes. Demographically we have an older population and we didn't save to support them - we spent the money, Dems and Repubs alike. So we're going to face increased public spending for that reason alone, even if we held all else flat.
Yep, and the longer we wait the worse the inevitable increases are going to be. The Republicans are not in a good place. They are probably going to have to compromise and they are going to get beaten up by their base over it. The alternative in my mind is worse. If they don't compromise and the Dems fold, then we are in for some hard, hard times. When we have entire factions talking about default as no big deal...it's pure insanity.
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Re: US is in Even Worse Shape Financially Than Greece

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Arcanis wrote:I'm looking at it as a % of total pay. it doesn't matter how much they make they should still pay the same %, which is more actual $.
A flat tax is completely unfeasible unless you're willing to either eliminate the modern state or destroy the economy. The only way to raise the kind of revenue required to support the government Americans have come to expect is to set the tax rate at a level that would absolutely destroy anyone who isn't a millionaire.

I realize the simplicity is tempting. But the math simply doesn't work. There's a reason every modern nation employs progressive taxation. The alternative requires regressing to the Middle Ages.
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Grifman wrote:
Smoove_B wrote:Debt talks collapse:
"These conversations could continue if they take the tax hikes out of the conversation," Boehner said.
So this is what it all comes down too, eh?
The Republicans are idiots. There's no way the deficit can be cut purely by spending cuts. They would have to be far too deep. There's going to have to be compromise. If the Republican compromise is that the deficit is to be cut by reducing spending only, and they'll let the Dems pick what gets cut, well, that's not a compromise. That's giving the Republicans all they really want.
You seem to miss the point, today's Republican party is not interested in Governing, only tearing down government. The only bad cut is to defense spending. Everything else must go. The deficit is only a means to this end.

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Re: US is in Even Worse Shape Financially Than Greece

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Little Raven wrote:
Arcanis wrote:I'm looking at it as a % of total pay. it doesn't matter how much they make they should still pay the same %, which is more actual $.
A flat tax is completely unfeasible unless you're willing to either eliminate the modern state or destroy the economy. The only way to raise the kind of revenue required to support the government Americans have come to expect is to set the tax rate at a level that would absolutely destroy anyone who isn't a millionaire.

I realize the simplicity is tempting. But the math simply doesn't work. There's a reason every modern nation employs progressive taxation. The alternative requires regressing to the Middle Ages.
There isn't any real contradiction between simplicity and progressivity. The problem with simplicity is all of the deductions and exemptions. The tax code could just be: 10% up to $10,000; 20% from $10,001 to $100,000; 30% from 100,001 to $1,000,000; and 40% thereafter.
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Re: US is in Even Worse Shape Financially Than Greece

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malchior wrote:
Grifman wrote:The Republicans are idiots. There's no way the deficit can be cut purely by spending cuts. They would have to be far too deep. There's going to have to be compromise. If the Republican compromise is that the deficit is to be cut by reducing spending only, and they'll let the Dems pick what gets cut, well, that's not a compromise. That's giving the Republicans all they really want. Even the President's commission used tax increases to get to 25% of their deficit reductions, with 75% from spending cuts. There are going to have to be increased taxes. Demographically we have an older population and we didn't save to support them - we spent the money, Dems and Repubs alike. So we're going to face increased public spending for that reason alone, even if we held all else flat.
Yep, and the longer we wait the worse the inevitable increases are going to be. The Republicans are not in a good place. They are probably going to have to compromise and they are going to get beaten up by their base over it. The alternative in my mind is worse. If they don't compromise and the Dems fold, then we are in for some hard, hard times. When we have entire factions talking about default as no big deal...it's pure insanity.
The irony being that many of these same folks are the ones most eager to decry the "irresponsibility" of people that walked on mortgages, and the ones most likely to lamentthe liberal abandonment of "personal responsibility."
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Re: US is in Even Worse Shape Financially Than Greece

Post by Anonymous Bosch »

El Guapo wrote:That's silly. (a) we're trusting politicans to reduce spending regardless of whether or not we raise taxes. We're currently spending more than we take in, and as part of any deal they're going to cut spending.
Heh, speak for yourself. Even Paul Ryan's budget, bursting at the seams with draconian cuts, entailed borrowing trillions more over the next decade, and causing debt to rise by nearly $9 trillion in 10 years. Folks in Greece likely trusted their politicians to rein in their spending, yet they continue going from financial bankruptcy to political bankruptcy:
The Beeb wrote:A lame attempt by Prime Minister Papandreou to form a government of "national unity" or "national salvation" was met with unsustainable demands from the leader of the opposition, Antonis Samaras, and was undermined by lack of support within his own ruling party, Pasok.

Papandreou proceeded to a largely cosmetic cabinet reshuffle, strengthening the position of his internal party rivals by giving them key ministerial portfolios, including the Ministry of Finance.

The "short-termism" of these political manoeuvrings has laid bare the shallowness of the political system.

What has become the biggest political crisis in Greece in the last 30 years is treated as yet another round in a normal electoral cycle - with political opponents within the ruling party, and across party divides, lining themselves up for a crack at the prime minister's office.
Of course, American politicans would surely not follow suit.
El Guapo wrote:In this context, why would taking in more revenue via taxes as part of a deal that reduces spending make it less likely for them to reduce spending?
Firstly, because politicians routinely spin, exaggerate, obfusticate and lie their arses off. Secondly, because, as the study pointed out, history would seem to indicate that trusting venal pols to change their profligate ways by providing them with more money is akin to trusting an alcoholic to become sober by providing them with more Grey Goose.
El Guapo wrote:(b) The budget deals of 1990 and 1994 raised taxes and reduced spending, and sharply reduced the deficits (up until the Bush tax cuts and wars).
From the earlier article:
After the 1990 and 1993 tax increases, federal spending continued to rise. The 1990 tax increase deal was enacted specifically to avoid automatic spending sequestrations that would have been required under the then-prevailing Gramm-Rudman budget rules.
El Guapo wrote:(c) The reference to giving them a "higher credit limit" (I'm assuming that this is a reference to the debt ceiling) is a canard. Every budget on the table, democratic or GOP, requires raising the debt ceiling. There is no feasible budget on the table that does not require giving a higher credit limit.
Indeed, Greece is facing ever harsher austerity measures (or defaulting on its debt) for much the same reason. Why have a ceiling at all when it can be raised at will? I suppose the real debt ceiling will ultimately boil down to how much foreigners are willing to lend the U.S. before they decide T-bonds are no longer a worthy investment. Which amounts to the fiscal equivalent of Russian roulette, and does little to bolster confidence in American politicians behaving any more responsibly than their Greek counterparts.
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Re: US is in Even Worse Shape Financially Than Greece

Post by El Guapo »

My point re "trusting" politicians is that we have no choice but to trust/charge them with balancing the budget, since they are literally the only people in the country entrusted with the legal authority to do so. To balance the budget you're going to have to have some combination of higher taxes and/or reduced spending, by definition. Whatever that balance is, whether you achieve it by raising taxes or by reducing spending, you'll then have some amount of money freed up that you didn't have before (whether it was because taxes were lower or spending was higher). At that point whatever politicians are in charge have the ability to use that money to either pay down the debt, spend it, or lower taxes.

So, trust by definition has literally nothing to do with whatever the right mix of taxes and/or spending cuts to reduce the deficit.

And ultimately whether the relevant politicans use any new or freed up funds to pay down the deficit or on whatever project or tax break or what have you is going to be determined by the relevant political pressures and lobbying at that time.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Grifman »

Anonymous Bosch wrote: Why have a ceiling at all when it can be raised at will?
Uh, it can only be "raised at will" if it has the votes. Using this logic why have elections since politicians can be voted in at will?

That said, historically, voting to increase the debt limit is a relatively recent thing dating back to only 1917. And there's a legal question as to whether is it really required.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Arcanis »

Little Raven wrote:
Arcanis wrote:I'm looking at it as a % of total pay. it doesn't matter how much they make they should still pay the same %, which is more actual $.
A flat tax is completely unfeasible unless you're willing to either eliminate the modern state or destroy the economy. The only way to raise the kind of revenue required to support the government Americans have come to expect is to set the tax rate at a level that would absolutely destroy anyone who isn't a millionaire.

I realize the simplicity is tempting. But the math simply doesn't work. There's a reason every modern nation employs progressive taxation. The alternative requires regressing to the Middle Ages.
El Guapo has more of the idea I was going for. It is the complex deductions and accounting tricks to hide money that I see as the problem. The point I was making about everyone paying is that the math on taxing the 'rich' doesn't pan out either. You need to either make 'rich' a nurse and cop couple or you don't have enough people to have their be any meaningful increase in revenue (that despite the fact that you may be averaging out to a million dollars more a person).

edit: I see what the problem is. I should have said % of increase instead of pay.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Anonymous Bosch »

Grifman wrote:Uh, it can only be "raised at will" if it has the votes.
You are delusional if you believe the votes will not be there to raise the debt ceiling. As El Guapo correctly pointed out, there is no feasible budget on the table that does not require raising the debt ceiling. There is clearly no relationship between having a debt ceiling and maintaining a stable level of debt. The consequences of running against the debt ceiling are so serious compared to the ease with which the debt ceiling can be raised, that it simply does not pose a credible barrier to deficit spending.
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Re: US is in Even Worse Shape Financially Than Greece

Post by El Guapo »

I actually think that there is a substantial risk that the debt ceiling won't be raised, based on the game theory of the situation. The debt ceiling is a hard vote - while it is something that congressmen collectively want to pass, it's something that no individual congressman wants to vote for. That's because it's seen as granting a pass on fiscal profligacy (a view that's been encouraged by the GOP leadership on the issue), and I'm not sure that people understand that it's necessary regardless of the budget that passes.

On top of that, the Republicans have kind of hammered themselves into a "no new taxes" position, and the democrats are hammered into a "no deal that doesn't involve at least some new taxes / revenue. So it's not impossible that a deal could fall short of the necessary votes, especially in the house.

Meanwhile, I've just read some the articles that discuss the idea that the President might have the legal authority to simply disregard the debt ceiling (based in part on the debt / credit clause in the constitution). I'm curious what the fallout of that would be. Negative, to say the least, but who could sue? Even disregarding the (substantial) standing issues, what court is going to want to order the U.S. into default?
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Re: US is in Even Worse Shape Financially Than Greece

Post by GreenGoo »

Oh man. Reading this thread has made me aware of just how much carnage is coming. And it's probably going to be a lot.

Even if everyone was on board and willing to sacrifice to get the country back afloat, it doesn't appear that anyone is capable of agreeing with anyone else. The bickering while the country goes under will be one of the wonders of the world. And it will be EVERYONE ELSE's fault.

Good. Lord.
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Re: US is in Even Worse Shape Financially Than Greece

Post by noxiousdog »

Grifman wrote:
Arcanis wrote:While the article Smoove linked to just says taxes, the news report I heard stated taxes on the 'rich'. That is part of the reason why the talks broke down. I was just stating that IMO if there is to be a tax increase to cover the debt that it needs to come from everyone not just a select group of people. I know there is no real way to stop them from playing their little games with everything, but one can dream can't they. :roll:
If CEO pay is going up faster than my pay (and I can assure you it is), why shouldn't they pay? CEO's consistently get much larger percentage raises than the rank and file. I see no reason to not tax them more. Maybe if pay increases were more equitable I might feel otherwise but right now, I'm not seeing it.
#1) Because it's not your money. If you want CEO pay, go be a CEO.

Regardless, if you ask one American to pay more of a percentage, you should ask all Americans to pay more of a percentage. It doesn't have to be the same percentage. It doesn't even have to be the same percentage increase.

But being 'rich' (again, whatever that means) is no excuse for property confiscation on an arbitrary basis.
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Re: US is in Even Worse Shape Financially Than Greece

Post by LawBeefaroni »

GreenGoo wrote:Oh man. Reading this thread has made me aware of just how much carnage is coming. And it's probably going to be a lot.

Even if everyone was on board and willing to sacrifice to get the country back afloat, it doesn't appear that anyone is capable of agreeing with anyone else. The bickering while the country goes under will be one of the wonders of the world. And it will be EVERYONE ELSE's fault.

Good. Lord.
Same thing is happening in the Eurozone. Greece going into complete default won't just hurt the Greeks. Countless Eurobanks will get slaughtered if Greece goes into a complete default. Eurozone taxpayers, the banks (through writeoffs) and Greece all need to share in the burden but no one wants to. Markets will also plummet. To avoid minor pain for all, they are risking extreme pain for all.


Same problem here, different specifics.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Smoove_B »

I'm not sure if it's directly related to the bigger picture, but I found this article about where there rich are keeping their money to be interesting.

In summary, they're not doing anything special with it - they just have more to begin with.
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Re: US is in Even Worse Shape Financially Than Greece

Post by malchior »

El Guapo wrote:On top of that, the Republicans have kind of hammered themselves into a "no new taxes" position, and the democrats are hammered into a "no deal that doesn't involve at least some new taxes / revenue. So it's not impossible that a deal could fall short of the necessary votes, especially in the house.
Pete Sessions was on POTUS this morning (Sirius XM) and said that no Republicans will vote to raise taxes EVER. Now he might have misspoken or been only talking in regard to the debt ceiling discussion, but they've gone beyond painting themselves into a corner. Especially when people with substantial sway in the party--Grover Norquist clearly stands out--view any rise in revenue as raising taxes, including eliminating loopholes or subsidies as tax increases. The leadership in the House seems to subscribe to that notion. Where can they go from that position?
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Re: US is in Even Worse Shape Financially Than Greece

Post by malchior »

noxiousdog wrote:Regardless, if you ask one American to pay more of a percentage, you should ask all Americans to pay more of a percentage. It doesn't have to be the same percentage. It doesn't even have to be the same percentage increase.
Totally agree. We will have to spread the pain around. There is no way around it at this point. The super wealthy aren't going to be able to absorb it themselves. But I think the point is academic, the very wealthy and powerful have rigged this system and I don't see a near-term scenario where we achieve meaningful action on the deficit.
But being 'rich' (again, whatever that means) is no excuse for property confiscation on an arbitrary basis.
Hopefully, we wouldn't do it arbitrarily. I know that might be too optimistic maybe, but we had progressive taxation at much higher rates in the past. The world didn't fall apart.
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Re: US is in Even Worse Shape Financially Than Greece

Post by noxiousdog »

malchior wrote:
But being 'rich' (again, whatever that means) is no excuse for property confiscation on an arbitrary basis.
Hopefully, we wouldn't do it arbitrarily. I know that might be too optimistic maybe, but we had progressive taxation at much higher rates in the past. The world didn't fall apart.
That's fine. But tax them more and me less strikes me as awfully arbitrary.
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Re: US is in Even Worse Shape Financially Than Greece

Post by Kraken »

noxiousdog wrote:
malchior wrote:
But being 'rich' (again, whatever that means) is no excuse for property confiscation on an arbitrary basis.
Hopefully, we wouldn't do it arbitrarily. I know that might be too optimistic maybe, but we had progressive taxation at much higher rates in the past. The world didn't fall apart.
That's fine. But tax them more and me less strikes me as awfully arbitrary.
It's not arbitrary if you are the one suffering from budget cuts. The $trillions that the Republicans want to cut primarily affect the middle class and poor. Raising their taxes will include the upper class in the general sacrifice.
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Re: US is in Even Worse Shape Financially Than Greece

Post by noxiousdog »

Kraken wrote: It's not arbitrary if you are the one suffering from budget cuts. The $trillions that the Republicans want to cut primarily affect the middle class and poor. Raising their taxes will include the upper class in the general sacrifice.
I don't have any idea what you just wrote.
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Re: US is in Even Worse Shape Financially Than Greece

Post by LawBeefaroni »

noxiousdog wrote:
Kraken wrote: It's not arbitrary if you are the one suffering from budget cuts. The $trillions that the Republicans want to cut primarily affect the middle class and poor. Raising their taxes will include the upper class in the general sacrifice.
I don't have any idea what you just wrote.
I think he's saying that the middle class and poor will suffer disproprtionately from the budget cuts so more taxes on the "rich" will even things out.

Kind of populist but it makes some sense. Federal government services that the "rich" avail themselves of won't be getting chopped nearly as much, if at all.
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Re: US is in Even Worse Shape Financially Than Greece

Post by El Guapo »

Also, taxing the rich more than the non-rich isn't really arbitrary at all. You have a certain level of government that people have (to date) agreed to, and it costs a certain amount of money. That money has to be raised largely through taxes that someone has to pay. Putting the burden disproportionately on the rich is largely because the rich have a greater capacity to bear that burden. There's also a "they've obviously benefitted significantly from society" argument, but that's probably secondary.

You can disagree with that, but that's not arbitrary. Arbitrary would be imposing a higher tax rate on profits from lobsters captured on Tuesday, or on people whose last names begin with N, or something like that.
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