Pundit HAMP'd

Via Atrios and Krugman, Third Wayer William Galston claims to have discovered, appropriately in The New Republic, "a new theory" of our economic troubles - it is the household balance sheet due to the homeowners crisis:

Movement conservatives argue that the weight of a government that “spends too much, taxes too much, and borrows too much” [. . .] Keynesian liberals, meanwhile, counter that the problem is the collapse of demand and that the government’s failure to offer a large enough stimulus is consigning us to a rate of growth not easy to distinguish from stagnation. What if they’re both wrong? That’s the claim of Amir Sufi, a finance professor at the University of Chicago’s Booth School of Business. The data tell a compelling story, he argues: “The main factor responsible for both the severity of the recession and the subsequent weakness of the economic recovery is the deplorable weakness of the U.S. household balance sheet,” which is, Sufi shows, “in worse condition than at any other point in history since the Great Depression.”

Heh. Tomorrow, Galston will invent the wheel.

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    Sigh (5.00 / 1) (#1)
    by Militarytracy on Wed Jul 13, 2011 at 10:03:05 AM EST
    All the info was there, has been there for ages and ages now during this crisis.  The engine of our economy is broke, the engine of the economy is ALL the people...not the rich "job creators".  Man I hate that GOP bull$hit buzzword.

    Everything that was done to save the infrastructure of the shadow banking/Wall Street system bled them even drier and weaker too.  Not having HOLC destroyed the worth of the item that contains most of our individual wealth too.  Along with that a large scale destruction of "credit ratings" took place...we have no idea who has good responsible spending habits out of those who lost their houses because it never was about making bad spending choices for many.  It was all about being sucked into another Greenspan bubble and then having it blow.

    GOP (and enablers at Fox) (5.00 / 3) (#18)
    by gyrfalcon on Wed Jul 13, 2011 at 10:48:16 AM EST
    now always use "job creators" instead of "wealthy" or "high-income."  I hear Frank Luntz in the background.

    Adding to the non-spending problem, I think, is that Americans got scared **less about that household debt and are paying it down as much as they can.  Which is of course supposed to be good, but only in normal economic times.  Now it's continuing to keep money out of the economy.

    With everybody's employment status still in danger of rolling off the cliff edge, even people with a little extra cash are holding onto it just in case.


    I think some people are paying their debt down (5.00 / 1) (#35)
    by Militarytracy on Wed Jul 13, 2011 at 11:06:46 AM EST
    if they can.  Some people have given up on the whole credit system and live only on a pay cash system.  Our daughter and her engaged are doing that right now. Or like us, we just aren't signing up for any more until this government and our leaders start putting their "bailouts" into the people and making the rich earn their damned money honestly again.  Right now they have all of us set up to be nothing other than perpetual rats running in rigid soul destroying wheels for the rest of our lives.  We are trying to avoid that being our destiny.

    I'll add this factor also (5.00 / 1) (#80)
    by ruffian on Wed Jul 13, 2011 at 12:13:36 PM EST
    In the process of the banks re-evaluating credit card risk, they drastically lowered credit limits on many customers. Good idea in the long run, but certainly makes people change their spending habits. OK, at least it made my brother and I change our habits.

    They did it to us (none / 0) (#98)
    by Militarytracy on Wed Jul 13, 2011 at 01:11:09 PM EST
    And then shortly afterward, two of them increased our credit to a figure off the scale.  I'm assuming they took a look at the pool out there as a whole and they decided to bet on us.  We won't be using any of it though.  I will not be a rat in their wheels.

    Where in the hell (none / 0) (#158)
    by cal1942 on Wed Jul 13, 2011 at 06:08:46 PM EST
    do we get these people.  Amir Sufi gets paid for this stuff.

    Of course people hold back during an economic downturn and with good reason.  What in hell is new about that.

    What Sufi is saying, whether he knows it or not, is that demand drives the economy.

    During a downturn when people are rightly practicing restraint the spender of last resort is the federal government.  That makes the Keynesians correct.

    What if they're both wrong? That's the claim of Amir Sufi, a finance professor at the University of Chicago's Booth School of Business. The data tell a compelling story, he argues: "The main factor responsible for both the severity of the recession and the subsequent weakness of the economic recovery is the deplorable weakness of the U.S. household balance sheet," which is, Sufi shows, "in worse condition than at any other point in history since the Great Depression."


    Double sigh: or When Red cannot be Magenta... (5.00 / 1) (#56)
    by rhbrandon on Wed Jul 13, 2011 at 11:24:16 AM EST
    So it's not "collapse of demand" but the "deplorable weakness of the U.S. household balance sheet," eh?

    Galston can't seem to admit that the Keynesians are right. What else would the lack of disposable family income result in?


    I'm sorry (5.00 / 2) (#68)
    by Militarytracy on Wed Jul 13, 2011 at 11:42:52 AM EST
    I misread your comment :)  Please forgive me.  This topic is frustrating for me because the little people have always known the score.  We were just told time and again that we were wrong and we didn't understand economics.

    You didn't misread it (5.00 / 2) (#70)
    by Warren Terrer on Wed Jul 13, 2011 at 11:46:03 AM EST
    You just omitted Galston's name after idiot ;-)

    Tracy, (none / 0) (#153)
    by NYShooter on Wed Jul 13, 2011 at 04:52:34 PM EST

    I've been noticing that you're diligently doing your best to educate yourself as to real facts underlying our economic mess. That's excellent, and I hope its becoming a little clearer as to what the truth really is.

    If the public had the facts explained to them in a simple manner (the facts really are simple) I'm not sure what would happen. Either it would ignite the pitchfork & torch brigades, or severe depression/suicide might set in. We'll see.

    The facts are simple: America & Europe are insolvent. Nobody knows the dollar amount of exposure. The quantity of algorithmic formulas used to devise the myriad of derivative instruments the banks and hedge funds employed created a fissionable math quandary making the amount of total exposure = infinity. The number they use in their models for risk assessment range between 500 and 1000 trillion dollars; but that's, admittedly, a guess.

    You have to feel a little sorry for Ben Bernanke. He's like the captain of the Titanic; when the engineers told the captain where, and how much, damage the iceberg caused the captain knew instantly they were all dead.....it was just a matter of time. We're in the same boat. (forgive the pun) The damage the Greed Merchants caused is so extensive that no known economic solution is adequate. So the "solution," for the time being, is to flood the banks with money and pray like hell at night for a solution. That's why the term, "kick the can down the road" is so prevalent these days.

    Anyway, I didn't even scratch the surface about our problem. I just wanted to say that no matter how bad the different experts & pundits & politicians say it is......its a million times worse.

    So, I don't feel so lonely any more as now I have a fellow explorer peering into the fog along with me.

    Let me know if you see a light on the horizon.....


    Its the same thing idiot (none / 0) (#66)
    by Militarytracy on Wed Jul 13, 2011 at 11:41:27 AM EST
    Demand comes from the engine, when the engine has no money there is no demand.

    No offense taken; wasn't trying to be critical... (none / 0) (#147)
    by rhbrandon on Wed Jul 13, 2011 at 04:05:23 PM EST
    of your comment. My apologies to you for seeming to be.

    "Job Creators" as term for wealthy (5.00 / 2) (#69)
    by jawbone on Wed Jul 13, 2011 at 11:46:03 AM EST
    is incorrect, false.

    David Cay Johnston was on WNYC yesterday, the term was used, and he said it is to incorrect and misleading: The majority of the wealthy do not create jobs, unless its for grounds keepers, cooks, etc.

    And, many who create jobs were not wealthy to begin with or as they grow their businesses.

    What a crock.  

    Yes, Frank Luntz's fingerprints all over this bit a propaganda the R's are flinging at us.

    But, since the MCM (Mainstream Corporate Media) tends to regurgitate just about anything the right --and powerful-- say, it has become a well-known term.  


    I'm not hearing anybody (none / 0) (#146)
    by gyrfalcon on Wed Jul 13, 2011 at 04:04:47 PM EST
    in mainstream media talk about "job creators" unless they're quoting some right-wing politician's rant.

    Too bad (5.00 / 2) (#2)
    by Ga6thDem on Wed Jul 13, 2011 at 10:19:42 AM EST
    we didn't get an HOLC. Can you imagine where we'd be now in the economy? Certainly the balance sheets would be a lot better.

    Yeah... (5.00 / 4) (#3)
    by kdog on Wed Jul 13, 2011 at 10:21:25 AM EST
    ya don't need a MBA or PHD to know the score...ya don't even need a GED.

    After 30 years of the income gap growing wider than the Pacific, we're reached our day of reckoning. Households have no cashish, and are running out of the ability to buy on the arm.  People who can't afford sh*t don't buy sh*t...this ain't profound, it's first grade math.

    Here here (none / 0) (#5)
    by Slado on Wed Jul 13, 2011 at 10:25:06 AM EST
    There are only so many rich people to tax.

    Bottom line is for the government to collect enough revenue to support it's commitments it will have to increase taxes on everyone.

    Guess what.  Most of us don't have it to give.  If we pay even more in taxes we won't be buying TV's, cars and whatever the hell else we don't need.


    If it taxed all income (5.00 / 1) (#7)
    by Militarytracy on Wed Jul 13, 2011 at 10:30:24 AM EST
    for Medicare and Soc Security, its commitments would be just fine.

    At some point you have to (none / 0) (#9)
    by Slado on Wed Jul 13, 2011 at 10:36:17 AM EST
    admit that federal spending is too high.

    We can't collect enough revenues to support it.  And I have no confidence if we collected more then say 20% of GDP in revenues that this government would reduce spending to meet it.

    That's the point.  No matter what they collect they spend more.  And now they spend much, much more.


    No we don't (5.00 / 1) (#11)
    by Militarytracy on Wed Jul 13, 2011 at 10:40:17 AM EST
    As our country grows and as the population grows, government spending must grow too because the government is responsible for providing the infrastructure of our civil society.

    That isn't how it works (none / 0) (#21)
    by Slado on Wed Jul 13, 2011 at 10:53:14 AM EST
    GDP in theory is growing along with population.

    One thing America has going for it vs. other countries is our population is actually still growing because we like kids and immigrants.

    One of the major issues Europe has is their populations aren't growing and their government is.

    There is a balance.  We can argue over where but at some point the federal government becomes too large and the economy can't support it.   I'd say that number is 22% of GDP.  

    The real problem is our government isn't able to adjust to economic realities very well.   when revenues drop to 15% then spending can't rise to 25%, as happened under Obama and Bush due to bailouts and stimulus, that money has to come from somewhere and that's why we now have a 14.5 trillion dollar deficit.


    We have allowed people like you (5.00 / 1) (#26)
    by Militarytracy on Wed Jul 13, 2011 at 10:59:55 AM EST
    to make argument after argument for not paying their fair share, and so much ground has been given it is literally insane.  Taxation is going to have to increase upon those who have not been paying their way, that would be the rich.  They have degraded the infrastructure of the country by avoiding paying their way to the point now that they are about to destroy the whole thing.

    The US has the most progressive (none / 0) (#81)
    by me only on Wed Jul 13, 2011 at 12:14:24 PM EST
    federal taxation in the OECD.

    That isn't spin.  The rest of the OECD expects that the working poor/middle class pay more.


    When I hear Washington talking about: (5.00 / 1) (#79)
    by mmc9431 on Wed Jul 13, 2011 at 12:07:10 PM EST
    Cutting military spending. We spend more than the entire world combined. We have an arsenal  that could blow the entire planet to dust 1000 times over.

    Cutting the billions we give to countries so they'll allow us to maintain a military presence and "detention centers".

    Eliminating corporate welfare. Why does Wal-Mart need my tax dollars to build a store? Why did G.E. pay no taxes? Why are we subsidizing BP and Exxon?  The list is endless.

    When I hear them talk about these types of cuts then I'll know they're serious about the budget.
    Right now they're just using the budget as an excuse to eliminate programs they never believed in from the start.


    Your economic theories (none / 0) (#38)
    by Warren Terrer on Wed Jul 13, 2011 at 11:09:14 AM EST
    intrigue me and I would like to subscribe to your newsletter.

    Here we go again (5.00 / 3) (#14)
    by Dadler on Wed Jul 13, 2011 at 10:43:35 AM EST
    We threw TRILLIONS at criminals who wrecked the economy, and your foolish ace wants to starve more needy folks for whom the government is their only defense against the riggged and fixed economic game they are FORCED to play.



    Why are you yelling at me (none / 0) (#22)
    by Slado on Wed Jul 13, 2011 at 10:54:48 AM EST
    That's the system.  Get over it.  Rich powerful people hob nob with Washington and get breaks you and me will never get.  Sorry.  That's how it is.

    Pick your political system and they result in a few rich people getting most of the breaks.

    Now that we're past that reality lets discuss what the politicians can do which is not promise more then they can ever possibly provide.

    That's the issue.   Too much government and not enough money to support it.


    The debt (5.00 / 1) (#27)
    by Warren Terrer on Wed Jul 13, 2011 at 11:00:02 AM EST
    is here to stay. Get over it.

    If there isn't enough money (none / 0) (#28)
    by Warren Terrer on Wed Jul 13, 2011 at 11:01:21 AM EST
    then why doesn't the government just create some more?

    It's the internet (none / 0) (#29)
    by Militarytracy on Wed Jul 13, 2011 at 11:01:23 AM EST
    You can't yell.  If you are hearing Dadler yelling, I think maybe you are hearing voices that aren't there.

    Not too sure about that. (5.00 / 1) (#71)
    by oculus on Wed Jul 13, 2011 at 11:47:14 AM EST
    A "friend's" recent choice of capitalization in her e-mail to me caused me to conclude she ain't my friend now.

    Heh, capitalization happens (5.00 / 2) (#74)
    by Militarytracy on Wed Jul 13, 2011 at 11:52:50 AM EST
    Capitalizing (none / 0) (#72)
    by Warren Terrer on Wed Jul 13, 2011 at 11:51:04 AM EST
    one or two words is emphasis. Capitalizing everything is yelling.

    You're right Slado... (none / 0) (#154)
    by kdog on Wed Jul 13, 2011 at 05:18:04 PM EST
    Crony Capitalism, Crony Socialism, Crony Communism, Cronyism is the way of the world jack.

    The government does way too much...nasty, benevolent nasty, and societal good alike.

    Our core problem is when anybody in power wants to shrink government, they always start with the wrong sh*t. And when the government wants to go shopping, its for wars and reverse Robin Hood.

    We're f*cked at the leadership level, everybody is already lookin' to vote for the same sh*t, Brand D & R.  Radical problems call for radical change...Dadler for Treasury.  


    Money is fake (5.00 / 3) (#13)
    by Dadler on Wed Jul 13, 2011 at 10:41:31 AM EST
    It is infinite if our ability to treat each other well is.  You suffer from a terrible lack of imagination, which is inexcusable for a free American.

    The digusting concentration of wealth at the top is also inexcusable in a country supposedly commited to justice and equality for all.

    Your chart is fool's gold, btw.  

    The only thing keeping us down is our insane slavery to pot metal, paper and electronic blips.

    I cannot understand how sentient Americans who have all the freedom in the world to figure this out, still believe money is some sort of real, living thing.  For Christ's sake, get a clue, money is nothing more than casino chips in a rigged economy.


    Playing game with people's lives (5.00 / 0) (#44)
    by mmc9431 on Wed Jul 13, 2011 at 11:13:30 AM EST
    They can cut all the spending they want and it will only result in needing to cut more. We're continuing to spiral downward. Until they stabilize the housing market, the economy is doomed.

    Home ownership is the cornerstone of our culture. It's the American dream. Unfortunately our incompetent Congress chooses to ignore the crisis.

    Republicans certainly don't want the economy to improve. They've stonewalled everything so that they can run the clock out.

    It's always about the next election. I seriously doubt that there's even a handfull left in DC that actually care about the nation as a whole.


    Yep, housing dragged us into this mess (none / 0) (#87)
    by MKS on Wed Jul 13, 2011 at 12:29:13 PM EST
    and until folks burn off debt or start spending again, we are going nowhere.

    A better housing market would certainly help.

    Keynes struggled with the lack of aggregate Demand when he wrote his General Theory in the 1930s.

    Why is it so hard to get?  Until the vast majority of income earners start to spend (and they are not rich), there will be no increase in Demand.

    Cutting spending just takes money out of the economy and leads to more layoffs, and less tax revenue, and then leads to more budget cuts, and more layoffs......

    Just what rich conservatives want.....a downward spiral of killing off of government and a failing economy.


    As my mother used to tell me (5.00 / 2) (#94)
    by mmc9431 on Wed Jul 13, 2011 at 12:58:26 PM EST
    Be careful of what you wish for. The rich amassed their fortunes off the working class. If there is no working class left, there will be no rich!

    Wise woman... (none / 0) (#119)
    by kdog on Wed Jul 13, 2011 at 02:21:45 PM EST
    or as I like to call the deadly greed phenomenon...killing their golden goose.

    Weren't happy with a golden egg once a week, they want one every day, every hour, every minute...the geese are on life support, and when they croaks there will be no one to lay the golden eggs they hold so dear.  The geese will be replaced by jackals with growling bellys.


    Bingo (none / 0) (#148)
    by gyrfalcon on Wed Jul 13, 2011 at 04:13:02 PM EST
    Once upon a time, for a little while, businesses and speculators were content to make a decent profit.  Now they insist on making a killing.

    Here's a great chart (none / 0) (#6)
    by Slado on Wed Jul 13, 2011 at 10:28:29 AM EST
    At some point when the average household must pay $35K to support federal spending you run out of households.

    It's math people.  It all must be cut.   Sorry to be the one to tell you but if you're counting on the government of today to be there in 2020 I got news for you.

    It won't be.


    I'm not totally convinced... (none / 0) (#15)
    by kdog on Wed Jul 13, 2011 at 10:43:37 AM EST
    we would have to raise taxes across the board to fund our commitments and bare necessities.

    Lets dismantle the DEA, cancel the occupations, CIA/DOD/DHS budgets halved at least, kill every cent of hurtful spending.  Then look at the good sh*t and see what can be gone without in hard times.  Reasonable increase on the uber-wealthy, and see where we are at.  Not "politically viable", or so I hear, but if we don't it will be an economic necessity...so why wait for the books to get worse?

    Increases in spending we should look at, or rather re-allocations, are increased SS benefits...money in hand that will likely be spent by those currently going without.  Another Bush-style stimulus check to broked*cks, for the same reason.  Infrastructure projects, energy development projects, sh*t a nationwide pick up the litter jobs campaign...all to put people to work.

    No one economic school is gonna fix it, its not even an exact science...we can borrow from all schools with a goal of putting more cashish in the pockets of those that are currently holding lint, which will spur demand, which will spur job creation and increased revenue for the country.


    I think Alabama needs fewer cops (none / 0) (#17)
    by Militarytracy on Wed Jul 13, 2011 at 10:46:29 AM EST
    If we have so many cops they can spend all Friday night shaking down teenagers who aren't doing anything wrong therefore are never arrested, just threatened and intimidated....then we have too many damned doughnut magnets.

    The nation needs fewer cops... (5.00 / 1) (#23)
    by kdog on Wed Jul 13, 2011 at 10:54:59 AM EST
    but I'm not saying we have to necessarily lay them all off, which would not help demand. In NYC the Parks Dept. is severely understaffed, our too many cops and spooks and DEA home-invaders can be transferred to the parks service or other productive, less hurtful, work.

    Demand (none / 0) (#25)
    by Slado on Wed Jul 13, 2011 at 10:59:38 AM EST
    is such a buzz word on the left.

    When you lay a cop off it does not necessarily decrease demand.   If the state or local government is borrowing at high interest rates or not funding another project to pay for that cop to have money then that isn't the demand we're looking for.

    Real demand, economy growing demand comes from wealth creation and savings.  

    Moving money around to put money in people's pockets isn't creating demand.  It's just moving money from pocket to pocket and when the government does it a little change always seems to fall to the ground.


    "Real Demand" (5.00 / 1) (#32)
    by Warren Terrer on Wed Jul 13, 2011 at 11:04:36 AM EST
    is a buzzword of the right. All demand is real demand.

    I agree that (none / 0) (#33)
    by Warren Terrer on Wed Jul 13, 2011 at 11:05:40 AM EST
    'moving money around' doesn't create increased demand. It just shifts it. Solution - government spending, which puts MORE money into peoples' pockets thereby creating more demand.

    Where does that money come from (none / 0) (#37)
    by Slado on Wed Jul 13, 2011 at 11:09:01 AM EST
    It doesn't fall from the sky does it?

    Somebody earned it and put it in a bank account.   Then the government collects it and gives it to somebody else.

    $1 for $1.   I had a dollar.  The IRS takes it away and then gives it to somebody else.

    I don't believe that dollar magically turns into $1.50.   I actually believe it becomes worth about $.75 because the government is horrible at spending money as well as I do.

    Point being unless you believe in the magical multiplier effect taking a dollar from me and giving it to you does not create demand.  It merely redirects it.


    Multiplier effect (5.00 / 1) (#84)
    by MKS on Wed Jul 13, 2011 at 12:18:06 PM EST
    is acknowledged by even supply side, conservative, University of Chicago economists....

    The poor and middle income people spend more of their money than do the rich....because they have to in order to survive.....



    The multiplier effect (none / 0) (#88)
    by Warren Terrer on Wed Jul 13, 2011 at 12:32:07 PM EST
    does not explain where the money actually comes from.

    New money comes from two sources - federal government spending and bank loans. It does not come from people 'earning it'.


    Money is a symbolic fiction (none / 0) (#93)
    by MKS on Wed Jul 13, 2011 at 12:54:48 PM EST
    You can start with the various definitions of money.....

    The most basic being currency plus money in bank accounts.....

    Creating goods and servcies can result in money being created as people have "money" to deposit into accounts....

    Sure, the Fed can "print" money, but if the extra cash does not result in increased econonmic output, you just get inflation and hyper inflation can occur.

    It is interesting to note, however, that our problems with stagnating income for the middle class occurred when the Fed, starting under Volker, made fighting inflation a priority over full employment.

    Bernanke is a scholar of the Great Depression and fears deflation and massive unemployment more than inflation....So, that is helpful....I can't fault monetary policy over the last few years....It is our fiscal policy of not enough stimulus and spending on jobs that has hurt us.


    Yes (none / 0) (#101)
    by Warren Terrer on Wed Jul 13, 2011 at 01:17:42 PM EST
    it's a symbolic fiction. But fundamental to understanding how it works is understanding where exactly it comes from. People who think that money comes into existence by 'people earning it' show no understanding whatsoever of where money comes from, and thus have no understanding of how it works.

    It comes from (none / 0) (#41)
    by Warren Terrer on Wed Jul 13, 2011 at 11:10:06 AM EST
    government spending. Look up the meaning of the term 'fiat currency' then get back to me.

    Please (none / 0) (#47)
    by Warren Terrer on Wed Jul 13, 2011 at 11:15:43 AM EST
    explain to me how money comes into existence by somebody 'earning it'. I'm all ears.

    That is the supply side credo (none / 0) (#82)
    by MKS on Wed Jul 13, 2011 at 12:14:43 PM EST
    That theory has long since been discredited.

    The "rich" have lots of money but still there are no jobs.....

    The reason there are no jobs is that there are no customers......

    Aggregate Demand is driven by average income folks....

    Until average income people start to spend, you will not have enough demand, i.e., customers, to create jobs.

    Without customers, the rich will just sit on their money or send it overseas....

    More tax breaks to the rich will not create more customers....


    MKS (none / 0) (#155)
    by NYShooter on Wed Jul 13, 2011 at 05:28:46 PM EST
    "....I can't fault monetary policy over the last few years..."

    Sure, But putting your finger into the hole in the dike isn't fixing anything, it's just (aren't we sick of overusing this term?) "kicking the can down the road?"

    Q1, Q2, Q3 (coming soon), and all the Q's to follow mask the problem temporarily, but it also has some bad "collateral damage." The dollar loses value, food, energy, and all commodities go up, and worst of all, the villains in the story, The Bankers, continue to be enriched by taking this free money from the government with the left hand and turning around and lending it back to the same government at 31/2% with the right.

    Why, in god's name, would they actually lend any of it out to anyone and expose themselves to some risk when they can just continue playing loan shark to the Treasury with no risk at all?

    Nice job; where can I apply?

    p.s. Oh yeah, one more benefit from Bernanke's "quantitative easing:" All those jobless, homeless, and aged folks (the greedy ones causing our problem) can put all their bags of extra loot into the stock market as Big Ben promises it well never, ever, ever go down again.

    (shhhh...until it does one last time.....to "0")


    I think you should be in charge of all (none / 0) (#46)
    by Militarytracy on Wed Jul 13, 2011 at 11:14:57 AM EST
    this reappropriating :)

    Laughable (none / 0) (#16)
    by Warren Terrer on Wed Jul 13, 2011 at 10:43:51 AM EST
    Total numbers of rich people doesn't matter, but how much money they have. It's simple math!

    Your right, it's extremely simple (none / 0) (#42)
    by Slado on Wed Jul 13, 2011 at 11:11:42 AM EST
    The government can collect @ a 100% tax rate a certain amount of money.

    If it chooses to spend more then that it goes broke.

    We are trying to spend 26% of GDP when we collect 15% in revenue.

    Doesn't work.   The US has never since 1965 collected more then 21% of GDP in revenue.   That's how much you have to spend.   Spend it wisely.

    Spend more and we go broke.

    Simple math.


    46 years (5.00 / 3) (#49)
    by Warren Terrer on Wed Jul 13, 2011 at 11:17:40 AM EST
    and counting. Slowest bankruptcy in history.

    Any day now (5.00 / 3) (#85)
    by MKS on Wed Jul 13, 2011 at 12:19:50 PM EST
    And Social Security is a failure because it may have a problem in the future (maybe 75 years hence).

    Serious People mantra on SS (none / 0) (#121)
    by MO Blue on Wed Jul 13, 2011 at 02:25:57 PM EST
    Cut benefits now because you might have to cut the later. {hiss}



    The 12,000 pound elephant (none / 0) (#160)
    by cal1942 on Wed Jul 13, 2011 at 06:30:16 PM EST
    in the room, the base of US fiscal problems in addition to low revenue is 58% of our discretionary spending on military and military adventures.  

    Eight hundred foreign military installations, thousands of troops stationed overseas, etc., etc.

    We can't afford to be the world's policeman.  It's unnecessary and it's killing us.


    The even bigger elephant, though (none / 0) (#165)
    by Towanda on Wed Jul 13, 2011 at 08:25:30 PM EST
    is the need to keep all of those troops overseas and otherwise occupied, even though it means illegally (or just immorally) occupying other countries and creating all that collateral damage -- deaths of troops, civilians, entire wedding parties, etc. -- that will haunt our children's children's lives and cause their deaths, too.

    Why?  What is the need?  The need to not let all those Americans, now expertly trained in shooting up streets elsewhere, come home and not get jobs despite the GI Bill and end up taking to the streets here.  Or, perhaps, to the boardrooms. . . .


    Prefer (5.00 / 1) (#177)
    by cal1942 on Thu Jul 14, 2011 at 12:08:17 AM EST

    The problem, frankly, is CORRUPTION (5.00 / 2) (#19)
    by Dadler on Wed Jul 13, 2011 at 10:52:21 AM EST
    WIth a concentration of wealth at the top as disgustingly out of balance as America's, and with those controlling the lion share of that corrupt and criminal to the core, NOTHING will happend for ANYone until some very powerful people are convicted and sentenced, their pirated loot confiscated, and their aces marginalized for the rest of their pathetic lives.

    I agree with you (none / 0) (#31)
    by Slado on Wed Jul 13, 2011 at 11:04:12 AM EST
    Crony capitalism is killing our recovery right now.

    The only problem as I state is it is more of a reality then anything we can really change.  


    I'm not really talking crony capitalism (5.00 / 2) (#39)
    by Dadler on Wed Jul 13, 2011 at 11:09:27 AM EST
    I'm taling one hundred precent criminality, down the board.  Look at the rating agencies, they are absolute criminal enterprises who, on a daily basis, facilitare and engage in insider trading.

    It's not that hard to take care of it.  These are financial terrorists.  Treat them like it.  Arrest and prosecute en masse.

    This is why, probably, the US could've defaulted and them completely reorganized our financial system into something that was actually lawful and decent.  Look at Iceland.  They said FU to all that austerity b.s., kicked out the banksters, reorganized and now are in a recovery. Yet, the criminal rating agencies will NEVER acknowledge this because Iceland didn't play the finanicial mafias game.


    Call it what you want but I agree with you (5.00 / 2) (#45)
    by Slado on Wed Jul 13, 2011 at 11:14:46 AM EST
    The government and the financial system collectively conspired to screw up the economy.

    When it got bad enough they cooked up a scheme that didn't address the cause and certainly didn't punish the real perpetrators.

    All the fat cats, bureaucrats and run of the mill thugs for the most part walked from the mess they created.

    History I predict will not look kindly on these group of people.  

    Unless of course they write it!


    In common people argot (5.00 / 3) (#20)
    by Stellaaa on Wed Jul 13, 2011 at 10:52:48 AM EST
    We are broke.  

    I will never forget during the Bush years a major HUD study that discovered the following:  Poor people have no wealth.  We are talking gobs of money spent to discover poverty.  

    My daughter has not enjoyed (5.00 / 1) (#48)
    by Militarytracy on Wed Jul 13, 2011 at 11:16:57 AM EST
    her early adulthood so far.  She said yesterday that every day is nothing but a fight to survive.

    We certainly haven't done them any favors. (5.00 / 3) (#57)
    by mmc9431 on Wed Jul 13, 2011 at 11:25:24 AM EST
    I've gotten so disgusted at what's happening to my country that I don't mind being old now! I'd rather be at the end of the game than the starting line right now.

    My son is convinced that his generation is the first of a long line of decline in quality of life.


    Same here (5.00 / 0) (#150)
    by gyrfalcon on Wed Jul 13, 2011 at 04:19:19 PM EST
    Took the words right out of my mouth.

    My children, too, Tracy (5.00 / 4) (#73)
    by Towanda on Wed Jul 13, 2011 at 11:51:54 AM EST
    and both struggled and worked so hard to get through college (including against different learning problems), working at lousy jobs -- but now they can't even get those lousy jobs back after being laid off, and they can't the good jobs for college graduates for which they worked for years, took out loans, etc.

    I used to encourage them, heartbreaking as it was for me to say so, to move to another state.

    Now I'm encouraging them to move to another country, to take their great brains and work ethic and go where they and those assets will be appreciated.  I tell them that I will keep working to help them relocate and then will follow whenever I can retire, taking whatever is left by then of my battered pension to spend elsewhere, too.

    You wanted it this way, U.S.A.  You got it.  Say g'bye to your best and brightest who deserve better than this mess -- and deserve much better than a patronizing president who tells my children to eat peas and retrain at some vocational school for what jobs, anyway?


    And I question the voc school retraining (5.00 / 2) (#75)
    by Towanda on Wed Jul 13, 2011 at 11:53:31 AM EST
    crap, too, since both of my stepsons went that route and worked hard in the construction trades with all of their training and varied skills in many fields, only to be laid off and unemployed for more than a year now, too.

    What is a young person to do today, given that no kind of education or training is wanted?  Leave.


    I keep telling them to not lose heart (5.00 / 1) (#76)
    by Militarytracy on Wed Jul 13, 2011 at 11:57:51 AM EST
    They have so much heart, he started a new business right before they met.  He has worked his butt off too this year to establish reputation, and he has gotten jobs.  They are paying their bills for now.  I tell them that what is happening is soul sucking though, how hard it is...it has nothing to do with kind of people they are....it is about what we have allowed to happen to the economic system of the country.

    We also tell them that we will not fall, not as a family.  They don't want handouts though, they want their own lives and to be able to do this for themselves.  I try to reassure.  I try to make them prepared too if things get worse because I think things are going to get worse still for some.


    My daughter and her (5.00 / 1) (#162)
    by Zorba on Wed Jul 13, 2011 at 06:56:14 PM EST
    significant other, the same.  They both have their doctorates in biological science (they are molecular biologists with a specialty in cancer research), and are looking for jobs.  They have expanded their search to overseas, and we have encouraged them.  Too bad for America, because they are both very smart and very hard-working.  My son, with a bachelor's, is out of work right now and living at home, doing whatever temporary jobs he can do.  He's also very smart and willing to work.  I'm willing to relocate, too, to wherever my kids find jobs.  

    This really is revealing, Zorba (5.00 / 0) (#166)
    by Towanda on Wed Jul 13, 2011 at 08:30:58 PM EST
    to find others in such similar straits -- and also willing to finally just up and leave the country, if we must . . . and as long as we're with our families.  What our lousy leaders hath wrought, huh?

    My nightmare, though, is that one leaves and one stays and we'll be in round 1,047 of "mom always liked you best."  And I'll be spending a lot of my life and ever-reduced savings for retirement traveling, in the hands (literally at times) of the TSA.  I'm gonna be that old lady in the wheelchair, being subjected to an invasive search, the star of Youtube in the year 2022.

    Heaven help me and mine, heaven help you and yours, heaven help us all.  Are we becoming a movement?  A movement of people ready to move on outathisUSofA?


    I'm in the same situation, Towanda (5.00 / 1) (#167)
    by Zorba on Wed Jul 13, 2011 at 08:39:15 PM EST
    If one leaves and one stays, where do I go?  I'm hoping that it will all work out, or that I can afford to spend half a year at each place.  Indeed, heaven help us all.  And heaven help our country, because it's going to lose its best brains, and eventually, if things do not change, will fall into second world status.  The rich will be extremely rich and not hurt, but the rest, the majority, will be in a constant state of struggle and deprivation.

    Excuse me (5.00 / 1) (#168)
    by NYShooter on Wed Jul 13, 2011 at 09:30:19 PM EST
    for butting in, but you brought up a topic I've been thinking about a lot recently. Full disclosure: my two grown kids, boy & girl, are close by (sometimes staying with each other & myself) and, believe it or not, actually want me around. Lol

    But, to the point, since I've just reached SS age, and so many of my acquaintances are in the same situation we all are here, I wonder why more folks haven't gotten together in some sort of co-op/communal living? I mean, we did it in the 60's, but that seemed like a lark of sorts, and wasn't sustainable, it seems. Also, that experiment didn't seem to have any particular age group that was predominate, all just a hodge podge.

    But now, with so many of us seniors (ugh) in the same pickle....financial strain, loneliness, security, mobility, etc...... wouldn't times seem ripe for another shot at it?

    Oh, and one more thought just popped into my head. With older folks more grouped together, wouldn't political advocacy be strengthened? One of the main reason the oligarchs have the upper hand is they're a tight knit small band, and we're scattered all over the place. Living together would make us a much more potent political power, don't you think?


    "village" living for seniors: (5.00 / 1) (#170)
    by the capstan on Wed Jul 13, 2011 at 09:56:08 PM EST
    I took the article (maybe AARP, maybe Sunday magazine) to my sister.  It is a bit oddly named, but I think it started from "It takes a village...." Anyway, it is an association of seniors who generally pay (not huge amounts) into an organization that coordinates volunteer help including companionship, referrals to experts, help getting to appointments, arranging deliveries, etc.  The seniors may live together in a group of apartments or live separately in near-by neighborhoods.  One area mentioned was Chevy Chase, and one was Dupont Circle.  The movement is not confined to DC.  Google can help.  (I had the article in my hand around the end of May.)

    Googled this up: (5.00 / 1) (#171)
    by the capstan on Wed Jul 13, 2011 at 10:03:48 PM EST
    Although each "village" may vary slightly in its approach to helping seniors remain in their homes, they are addressing the need for universal design of community, not just universal design inside the home. Most have a combination of volunteer services and third party providers. Annual dues are charged by most villages, though not all, and many who charge dues offer a price break for low income seniors.

    Citizens of many communities have struggled with how to form a Village - essentially a nonprofit organization whose mission is to assist its members to continue living independently in their own homes as they age. With this in mind, Montgomery County, Maryland, posted a link to a "Village Blueprint," authored by Ms. Leslie Marks in collaboration with the Bethesda-Chevy Chase Regional Services Center. It can be found at: Villages Blueprint. For anyone contemplating starting a Village organization, this 54 page blueprint is an excellent starting point.


    My savings are not all that big (5.00 / 1) (#172)
    by MO Blue on Wed Jul 13, 2011 at 10:23:32 PM EST
    but I originally thought that there might be a small amount left since I live within my means and don't have a lot of debt. Had thought about putting a little in a small trust fund that family members (grandkids, great grand kids) could access to help with education.    

    Lately I've been thinking that if there is any money left by the time the Masters of the Universe get done robbing me blind, it might be better to set up some kind of relocation fund for my grandchildren. Sad when ordinary people think that their children and grandchildren might have to leave the U.S. if they want a decent life.


    FWIW, and (none / 0) (#174)
    by NYShooter on Wed Jul 13, 2011 at 10:49:15 PM EST
    please accept this in the spirit its sent. Screw the kids. alright, alright, a little harsh....poopy for the kids, better?

    Of course I'm joking, but you know what they say about most jokes....there's a teensy little bit of truth in there.

    In all my reading, and talks with my peer group friends I agree with what seems to be a consensus......worry about yourself. No matter what the finances are, there's one advantage the kids have over you....about 30-40 years of life. Isn't that a better gift than money?

    Sure, if you're wealthy, like the Church Lady said, "never mind." But to deprive yourself, with limited resources, I would hope your children would respond to your generous thoughts by saying, "Are you nuts? If you leave me any money all I'll do is buy a more expensive coffin for you. Keep your money, go have a blast in Vegas, spend the money on the most valuable asset there is.....a diminishing number of days for you to live, love, and enjoy.

    Now, no more talk about scrimping & saving "for the kids."

    IMO, of course


    Accepted in the spirit given (none / 0) (#180)
    by MO Blue on Thu Jul 14, 2011 at 07:49:23 AM EST
    It would be nice if I was wealthy. Unfortunately, I'm not.  Always been a saver. More for me than to put aside money "for the kids."  I've been really poor twice in my life and I need to have a little "wolf away from the door" money to feel secure.

    Don't do much scrimping but just live rather simply . At this point in my life, I don't need to accumulate any more things. In fact, too many things cluttering up my small house as it is.

    The year before I went on Medicare, my former employer had really jacked up my retirement health insurance premium (premium increases of approx. 400% in 3 years) for a policy with a deductible that had to be met before they paid a cent. More money went out the door each month for health care than was coming in. Scary situation to be in even with some savings. If the draconian changes to Medicare and SS get implemented, I will be put back in that position and savings could be depleted much more quickly than planned. The false economy of the whole thing amazes me. Once my savings are depleted the government and taxpayers will be on the hook for my medical expenses at the most expensive periods of my life.  



    I'm sure (none / 0) (#182)
    by NYShooter on Thu Jul 14, 2011 at 10:37:19 AM EST
    you've heard all the pep talks already, so you don't need any more from me. What has kept me going many times in my life when things were really bleak was the understanding that no matter how bad my situation was millions upon millions of people were worse off......many really, really worse off.

    Hey, I just thought of a great new slogan Obama can use in his campaign: "Yo, you're not alone."  Or maybe, "You think you've got it bad now? You ain't seen nothing yet!"

    Anyway. I chuckled when I wrote it :)


    My god (5.00 / 0) (#161)
    by cal1942 on Wed Jul 13, 2011 at 06:37:13 PM EST
    so poor people have no wealth.  Who'd of thunk it.

    I guess they discovered that let them eat cake won't suffice.

    Where in hell do we get these people?


    Oooh! Charts! here's one on the debt -- (5.00 / 2) (#30)
    by jawbone on Wed Jul 13, 2011 at 11:02:58 AM EST
    Note the expanding effect of the Bush Tax Cuts, now of course the Obama Tax Cuts.

    The unfunded wars?

    Please note the expanding role played by the Bush, now Obama Tax Cuts and the huge base the economic downturn imposes. The TARP and stimulus are nearly down to noithing, and the current deficit is a rather unimpressive frosting, barely perceptible thin black line on top of this big layer cake.

    As someone who opposed the Bush/Cheney Tax Cuts and their extension by Obama, I'm pretty frosted myself that the Repubs and their supporters want to stick the little people with all the pain for paying for the tax cuts for the wealthy.

    David Dayen notes from WaPo article Obama offered (5.00 / 1) (#63)
    by jawbone on Wed Jul 13, 2011 at 11:38:16 AM EST
    to take the Bush/Obama Tax Cuts "off the table," meaning no expiration, in his Grande sized Grand Bargain he offered to Boehner.

    What you need to know is that both the fiscal commission and the White House's April speech included two tax increases: the one they proposed, and the one they assumed. Over 10 years, the fiscal commission wanted to raise about $1.2 trillion and the White House sought about $750 billion. But both of them assumed that the Bush tax cuts for income over $250,000 would expire in 2012, netting them another $800 billion or so in revenue. So the total revenue in the Simpson-Bowles proposal was closer to $2 trillion, and Obama's proposal was more like $1.5 trillion. Both of these were less than simply letting the Bush tax cuts expire -- which would get you $3.8 trillion, and $4.6 trillion if you include the consequent reduction in interest payments -- but they were significant.

    What Obama offered Boehner was an opportunity to take the Bush tax cuts off the table. So though $800 billion in revenue sounds sizable, it's only half as much in total revenue as the White House's April proposal, two-fifths as much as Simpson-Bowles wanted, and one-fifth what we'd get if the Bush tax cuts expire next year. (My emphasis)
    Ezra Klein, Washington Post, July 12, 2011

    We cannot pay off our debt and deficits without higher government revenues.  We cannot stimulate demand in the country without more demand.  Businesses, to the best of my knowledge, do not hire people out of the goodness of their hearts, not on any large scale at least.  

    Businesses hire more workers when there is higher demand for their goods and services, when there is demand from people for what they offer.  And they only hire more workers when that demand exceeds their ability to provide what people want to buy.  Since the days of St. Ronnie, the buying power of the masses of American workers has been going down.  Meanwhile, the wealth has been allowed to flow to the Uberwealthy.  

    Obama seems to be on the side to the Uberwealthy, Big Bidness, and the Wall Street Gang Banksters.

    This new offer to take the Bush/Obama Tax Cuts off the table is his second push to keep them in effect. Whassup, Obama?


    So according to Ezra Klein, (5.00 / 3) (#78)
    by MO Blue on Wed Jul 13, 2011 at 12:04:09 PM EST
    Obama is willing to implement a chained CPI (Social Security benefit cut and a regressive tax increase)and increase the Medicare eligibility age (both included in the Grand Bargain) so that the uber-rich can keep their tax cuts.

    Heck of job, Obama.


    Also, Obama has said it's his big goal to reform (5.00 / 1) (#141)
    by jawbone on Wed Jul 13, 2011 at 03:18:02 PM EST
    SocSec, Medicare, and Medicaid.  His idea of health insurance "reform" was to ensure profits for the private insurance companies. He refused to negotiate on prescription drugs, promising Big PhRMA he would do no such thing, behind closed doors as is his usual negotiating approach. The savings will come out of Medicare recipients' increased out of pocket costs.*

    I figure he takes a simlar approach to the Big Three safety nets.

    This is not a Democratic president, expcept in his false use of the party name and image to get himself into power.

    We wuz bamboozle and robbed.

    *See Trudy Lieberman's new article on the ways of increasing costs to Medicare recipients AND to Medigap purchasers. A nice little "gift" from Holy Joe, probably acting as the stalking horse for Holy O.

    Baker says a lower, combined deductible is not a good idea. It would raise out-of-pocket costs for millions of beneficiaries who don't use hospital services during the year. But nearly all seniors go to the doctor, often several times a year, and Lieberman's plan would require them to pay a $550 deductible instead of the $162 deductible they pay now for physician services. Under current law, they also pay 20 percent of the bills for doctor services, but Medigap policies, the popular ones at least, cover that amount.

    That brings up another goal of Lieberman's plan--to reduce the amount of coverage Medigap insurance can provide. His plan would forbid Medigap policies, which are owned by some ten million seniors, from paying that deductible. All Medigap policies now cover the hospital deductible, and two of them--Plans F and C--cover the medical deductible. Two-thirds of seniors who have Medigaps buy these plans because they want to reduce their risk of out-of-pocket expenses. Over the last few years, under the guise of consumer choice, Congress has authorized insurers to sell new Medigap plans that cost less but don't cover as many of the holes. Guess what? Older people don't seem to buy them. "Seniors are very risk averse," says Bonnie Burns, a policy specialist with California Health Advocates.


    Under Lieberman's bill, Medigap policies could cover only half of a senior's out-of-pocket costs up to the $7500. In other words, they would have to pay $3750 right off the bat before any insurance would be allowed to kick in. (My emphasis)

    Here's the WaPo article on Obama talking about (5.00 / 1) (#142)
    by jawbone on Wed Jul 13, 2011 at 03:31:13 PM EST
    taking on SocSec and Medicare, just days before his inauguration.

    WaPo, January 16, 2009

    President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare "bargain" with the American people, saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.

    That discussion will begin next month, Obama said, when he convenes a "fiscal responsibility summit" [that's his Peter Peterson Cat Food Commission; Congress wouldn't vote for his, so he set it up himself] before delivering his first budget to Congress. He said his administration will begin confronting the issues of entitlement reform and long-term budget deficits soon after it jump-starts job growth and the stock market.

    Obama then goes on to list the things he will do as president, many of which he has not done, did not try to do, or did in half measures. (Read and weep.) Then, he comes back to doing the dirty deeds on SocSec and Medicare.

    But he framed the economic recovery efforts more broadly, saying it is impossible to separate the country's financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government.

    "This, by the way, is where there are going to be very difficult choices and issues of sacrifice and responsibility and duty," he said. "You have to have a president who is willing to spend some political capital on this. And I intend to spend some."  (My emphasis)

    Obama did let us know how he would govern. The optics were all liberal and progressive, some of his words were as well. But that was to mislead Dems into voting for him. He could not have won on his actual agenda.


    They don't even care how much (5.00 / 1) (#145)
    by MO Blue on Wed Jul 13, 2011 at 04:03:08 PM EST
    harm taking almost $4,000 out of a person on a small fixed income will cause just as long as they continue to line their greedy little pig pockets and live large with us paying the bill.

    They are setting up eliminating SS and Medicare by making changes that will make them not work and less popular. Once these successful programs are devalued to the point that they are considered failed programs the politicians can turn them over !00% to their corporate masters.

    I'm not particularly a religious person, but I sure hope there is a hell and a special place reserved for these politicians.


    BTW (5.00 / 1) (#169)
    by NYShooter on Wed Jul 13, 2011 at 09:54:42 PM EST
    Does everyone here understand that there's been no cost of living adjustment for two years now? (Never happened before. Way to go, Barry) At this rate, when the CPI ruse is put into effect they'll be deducting money from what meager SS money is left.

    Reduce your SS benefits (none / 0) (#173)
    by MO Blue on Wed Jul 13, 2011 at 10:36:43 PM EST
    and force you to purchase Medigap coverage which would only cover only half of a senior's out-of-pocket costs up to the $7500. In other words, they would have to pay $3750 right off the bat before any insurance would be allowed to kick in.

    By the time seniors pay premiums for junk insurance, the increased deductible and the out-of-pocket expenses and for severely overpriced prescription drugs, they will be lucky to have any money left for food and shelter.

    No death panel just death by spreadsheet.  


    wow, (none / 0) (#175)
    by NYShooter on Wed Jul 13, 2011 at 10:52:41 PM EST
     food and shelter? you must be loaded:)

    Re: Medigap insurance, did you see (none / 0) (#179)
    by Anne on Thu Jul 14, 2011 at 07:08:57 AM EST
    this, from the WSJ?

    House Majority Leader Eric Cantor (R., Va.) this week presented a list of proposed cuts to the White House as part of the broader negotiations to reach a deficit-cutting deal. The cuts include lower federal payments to hospitals with many poor patients and to state Medicaid programs, new patient copayments for clinical lab work, and reduced payments to nursing homes and rural hospitals. The cuts would come on top of about $500 billion in cuts to Medicare payments made to allow passage of the 2009 health care bill [...]

    "Some of these ideas have been bouncing around Washington for some time, but nothing that I see would be confused with reforming Medicare," said Gail Wilensky, former head of Medicare under the first President Bush and now a senior fellow at the medical-education and humanitarian group Project Hope [...]

    Many of the latest proposal's salient items appear to put financial pressure on others besides the federal government without actually restraining the escalating cost of medical care. For instance, up to $53 billion in savings over 10 years would come from cutting seniors' ability to buy extra Medicare supplemental insurance, or Medigap. Seniors would simply have higher out-of-pocket medical costs, said Robert Laszewski, a Medicare consultant to insurers and medical providers.

    Another idea would save $14 billion to $26 billion by having the government cut back on reimbursing unpaid debts. That would ultimately just shift the burden to hospitals, medical experts said.

    [Emphasis is mine]

    Granted, this is a Cantor proposal, but hey, the door is open, and I'm sure all of this kind of stuff is "on the table."

    I just love the construction of seniors "simply" paying more, since for many it will mean having to do without; how ideas like this "strengthen" Medicare is beyond me.  


    To put it bluntly, if they (none / 0) (#181)
    by MO Blue on Thu Jul 14, 2011 at 08:01:34 AM EST
    implement these draconian measures, once my small savings are depleted, I will not do without medical care. IMO I paid for medical care in my old age and if all my care has to take place in the ER so be it.

    Unless they are willing to kill off the poor and the elderly, these measures will increase costs for everyone and not reduce them. There is "no free lunch." Hospitals and doctors are not going to eat these expenses but merely raise their prices so that people who still have some money (fewer and fewer over time) will have to pay more.


    I agree with you (none / 0) (#34)
    by Slado on Wed Jul 13, 2011 at 11:06:24 AM EST
    We dropped taxes and raised spending.

    Can't work.  Only problem now is Obama wants to continue raising spending and he can't raise taxes high enough to cover it.

    The Bush ship has sailed.  He f8cked it up along with his republican and democratic buddies in congress.

    Now we have Obama and he's doubled down on the same bad policies that got us in this mess.

    More spending and not enough revenue to cover it.


    Oh, and which presidents have provided big debts? (none / 0) (#40)
    by jawbone on Wed Jul 13, 2011 at 11:09:48 AM EST
    Federal Debt Growth by Presidential Terms:
    Source: Congressional Budget Office

    Wikipedia summary

    Reagan (1981-1985): +11.3%
    Reagan (1981-1985): +9.3%

    HW Bush (1989-1993): +13.0%

    Clinton (1993-1997): -0.7%
    Clinton (1997-2001): -9.0%

    W Bush (2002-2005): +7.1%
    W Bush (2005-2009): +20.7%

    Obama (2010- ): +9.0%

    Bush II's accomplishment is truly astonishing: He managed to wipe out Clinton's surplus (9%) and wrack up an actual 37.8% achievement!!! Whoohooo! Those Republicans really know how to party!


    So what's your point? (none / 0) (#50)
    by Slado on Wed Jul 13, 2011 at 11:18:36 AM EST
    I have conceded that Bush screwed it up.

    Now Obama took a deficit that was bad and made it worse.

    Lets deal in the now.   also during that 2005-2009 there was a democratic congress.

    We can play the blame game all day long.

    Still doesn't change the fact that we're broke.


    No (5.00 / 1) (#52)
    by Warren Terrer on Wed Jul 13, 2011 at 11:21:55 AM EST
    let's not deal with it now and wait till a Republican is in the Whitehouse again. I look forward to your demands that a Republican president jeopardize his re-election chances by attempting to balance the budget.

    I have seen the light (none / 0) (#58)
    by Slado on Wed Jul 13, 2011 at 11:25:28 AM EST
    I am no longer a republican apologist.

    I demand that this president, this congress and the next ones deal in a serious way with our long term debt reality.

    That means every program must be cut.  Some more then others because the poor don't deserve to be burdened more then they already are but it's not a political or policy issues.  As Gov. Christie likes to say..."it's a black and white issue.".

    We don't need the defense budget we have, we don't need half of the departments we have and we can't cover the entitlements we've promised.

    Cut them all and anyone who says a certain pet issue or a big entitlement should be off limits isn't serious.


    You ceased being (5.00 / 0) (#59)
    by Warren Terrer on Wed Jul 13, 2011 at 11:26:40 AM EST
    a republican apologist the moment Barack Obama became president. How convenient for you!

    How true (5.00 / 2) (#99)
    by mmc9431 on Wed Jul 13, 2011 at 01:12:30 PM EST
    I still can't believe how quick the right jumped on the deficit band wagon after they looted the treasury.

    Another great Reagan legacy. Bankrupt the nation with military spending to suffocate all those dirty little "socialist" programs.


    Research 1937 (5.00 / 1) (#90)
    by MKS on Wed Jul 13, 2011 at 12:38:07 PM EST
    That would tell you what budget cuts will do to an economy during a recession or depression.

    What will massive government spending on infrastructure do?  Research 1941-1946, the government debt (it got really big), employment and the growth of the middle class (it got really big too.)

    A growing economy will generate much more tax revenue.....


    I laughed this past weekend (none / 0) (#43)
    by Militarytracy on Wed Jul 13, 2011 at 11:12:46 AM EST
    Some Repub said on the tube, "The Iraq War did not break this country".  My husband was walking across the living room and he stopped in the middle, and this guy who took part in the Iraq War told the T.V. that the Iraq War broke this country...and a few other things too.  It is strange though to talk about austerity for the poor, who already have nothing...don't even have healthcare, but nothing was too good for Iraq.  Does anyone have any idea what all those MRAPs cost and all these wonderful new uniforms?  And I'm not complaining that it was decided that my husband's life should be saved at just about any cost.  But everyone else can go suck an egg I guess or pound sand or something equally austere.

    There is no excusing (none / 0) (#51)
    by Slado on Wed Jul 13, 2011 at 11:20:46 AM EST
    the fact that Bush presided over a housing bubble, cut taxes and started two wars on his watch.

    He had plenty of help but he was the boss so shame on him.

    So now what?   We continue digging the hole and hope it gets better?

    No.  We cut everything and start to deleverage.  Problem is neither side has the courage to stand up to their crazies and do what's needed.

    More revenue and less spending.


    The private sector (5.00 / 1) (#55)
    by Warren Terrer on Wed Jul 13, 2011 at 11:23:34 AM EST
    is the one that needs to de-leverage. This cannot be accomplished in a country running a trade deficit unless the federal government runs a deficit. It's simple math.

    Deficits don't matter? (2.00 / 0) (#60)
    by Slado on Wed Jul 13, 2011 at 11:28:11 AM EST
    Are you Dick Cheney?

    Just kidding.

    We can run a deficit.  We just can't afford to run one as large as we're currently running.

    The government must deal with the economy it has, not the one it wants.

    It can't continue to grow at the rate it's growing when the economic output can't support it.

    That is the simple math.  It's simply too big.


    Why can't we afford it? (5.00 / 1) (#62)
    by Warren Terrer on Wed Jul 13, 2011 at 11:31:07 AM EST
    Interest rates on government debt are lower than they were in the past when the total debt was smaller than it is now. Explain that.

    What is the debt/interest costs over the (none / 0) (#64)
    by BTAL on Wed Jul 13, 2011 at 11:38:53 AM EST
    life of the debt?  Those rates will not last forever and subsequent borrowing to roll over that debt with new debt will have much higher rates.

    Just like the "introductory/balance transfer" credit card rates.


    Did you make that (5.00 / 0) (#67)
    by Warren Terrer on Wed Jul 13, 2011 at 11:42:08 AM EST
    argument in reverse when rates where higher? "Rates will probably be lower later so we can roll-over these debts at lower rates in the future". Of course you did not.

    Hint - Rates are what the Fed makes them.


    Watch what happens (none / 0) (#86)
    by BTAL on Wed Jul 13, 2011 at 12:24:43 PM EST
    Bernanke tipped his hand today to QE3.  This will drive both the markets and commodities higher.  The market is baking in its future inflation hedge now.

    All the QE1, 2 and 3 money will be pulled back at a point in the future and rates will rise across the entire spectrum.


    Yes (none / 0) (#89)
    by Warren Terrer on Wed Jul 13, 2011 at 12:34:45 PM EST
    QE3 could likely drive commodities higher. I don't dispute that.

    But it will have no effect on interest rates, which is the topic under discussion. We've had QE1 and 2. Where are interest rates right now? At historic lows, that's where.


    No question that current rates (none / 0) (#97)
    by BTAL on Wed Jul 13, 2011 at 01:10:25 PM EST
    are at historical lows.  Solely due to the Fed's actions and QE.  However, we both know that all that money cannot stay in the system forever.  It will be pulled back by the Fed and they will raise the rate.  The question then arises as to when and what will be the inflationary effect resulting from commodities (food & fuel being big drivers) coupled with the monetary pull back.

    IMHO, the only thing that is truly holding back inflation at the moment is the housing market.


    So low interest rates (none / 0) (#103)
    by Warren Terrer on Wed Jul 13, 2011 at 01:27:57 PM EST
    are due solely to the Fed. You are getting there. High interest rates are due solely to the Fed too. Remember Paul Volker?

    Then you argue that higher interest rates will cause inflation. Interesting.

    What about the lousy labor market? No effect on inflation?


    Flash back to Carter's (none / 0) (#107)
    by BTAL on Wed Jul 13, 2011 at 01:39:40 PM EST
    misery index.  High interest, high inflation plus 7+ to 8% unemployment.  

    Not a robust labor market then.  I don't put all the significance on the UE rate but it was a part of the overall situation.

    Clearly remember Volker and Bernanke will do the same when the time comes just maybe to the same extreme but he will use that tool to pull money back from the QE experiment.


    Why does the housing market (none / 0) (#110)
    by Warren Terrer on Wed Jul 13, 2011 at 01:46:30 PM EST
    affect inflation but the labor market does not? How can the housing market even recover if the labor market does not? What do you think caused the inflation of the 1970s while the labor market was bad? A good housing market?

    We have been deleveraging (5.00 / 1) (#65)
    by Militarytracy on Wed Jul 13, 2011 at 11:39:24 AM EST
    but it is a deleveraging on the backs of the middle class and now they are coming after the poor.  It is not a shared sacrifice.  The rich have completely been let off the hook, and the deleveraging has been a targeted deleveraging.  Whenever the invisible hand comes in to slap the hell out of predatory lending practices or financial industry fraud or market manipulation it is stayed by our government leaders.  That is what is wrong with all of it.  I think the banks in the end will still end up having to be taken over and restructured too.  The only thing Obama did was put off the inevitable and allow the lions to hunt everything on the plain to earn their way back to solvency while they were saved/bailed out at the same time.  They've hunted alright.  The shadow bankers who are also the Wall Streeters took the QE money too and bought commodities with it because the people will need to eat and that is an ace in the hole when nothing else is left to violate.  You can make bank too doing it before the whole world goes Libya on your arse.

    More revenue and less spending (5.00 / 1) (#91)
    by MKS on Wed Jul 13, 2011 at 12:40:12 PM EST
    would create a Depression.

    Please go research 1937.

    We have tried your medicine before.  It does not work.


    Gov't revenues lowest since 1932--Great Depression (none / 0) (#135)
    by jawbone on Wed Jul 13, 2011 at 03:00:15 PM EST

    The federal government's tax revenue is on track to drop 18 percent this year, the biggest annual decline since the depths of the Great Depression, according to an analysis by The Associated Press.

    Individual income tax revenue is down 22 percent and corporate income tax receipts have fallen 57 percent compared with 2008, according to the AP. Social Security tax revenue might have only its second year-over-year decline since 1940, and Medicare tax receipts could fall for only the third time since they started being collected in the 1960s.


    So terribly sad we got the 21st C. Hoover (with all apologies for Hoover being more accomplished prior to reaching the presidency) instead of the 21st C. FDR we so desperately needed.

    Gee, if there were just make work programs, there would at least be more income for the currently unemployed and poor. That would mean more business and probably more jobs and more tax revneues for both the Feds and state governments....


    This is news to me! (none / 0) (#176)
    by katiebird on Wed Jul 13, 2011 at 11:36:41 PM EST
    This is a big deal -- it's really, really bad news.

    Jawbone (none / 0) (#163)
    by cal1942 on Wed Jul 13, 2011 at 07:09:10 PM EST
    thanks for the link.  I've seen the chart before but lost track of where I saved it.

    Cut out the unfunded wars, eliminate the Bush tax cuts and fire up the economy.  Presto - balanced budget.


    I've been relatively unaware of the Third Way--FDL (5.00 / 2) (#54)
    by jawbone on Wed Jul 13, 2011 at 11:23:29 AM EST
    post explains a bit about them.

    ...Jon Cowan and Jim Kessler, respectively the president and senior vice-president of The Third Way, criticize "progressives" for opposing deals which cut Social Security benefits.
    Cowan and Kessler state the obvious, that "math knows no ideology," but they fail to acknowledge that they do.  Undisclosed is Cowan's long history of flaming the fans of "intergenerational warfare" and calling for the radical dismantling of Social Security. For instance, in a 1995 Los Angeles Times op ed,  he proclaimed, "The time has come to reinvent Social Security based on a "cut and privatize" approach that will be fair to all age groups."  Although no longer as threatening as when  Newsweek quoted him in 1995 about his plans to "burn social-security cards in New Hampshire" to make a big splash in the presidential campaign, Cowan is hardly an objective voice when it comes to Social Security.(My emphasis)

    Unfortunately, Obama seems to have picked up some of their talking points and approaches....

    Plain as the nose (5.00 / 1) (#164)
    by cal1942 on Wed Jul 13, 2011 at 07:16:06 PM EST
    on your face yet we're too abysmally stupid to get it.  58% of all discretionary spending.  Adjusted for inflation we're spending more on our military than in the latter cold war years after the huge Reagan buildup.  Yet we have no industrial "enemy."

    Chinese politico "gets it": (5.00 / 2) (#96)
    by oculus on Wed Jul 13, 2011 at 01:07:30 PM EST

    The United States is spending too much on its military in light of its recent economic troubles, China's top general said Monday while playing down his country's own military capabilities.
    The chief of the General Staff of the People's Liberation Army, Chen Bingde, told reporters that he thought the U.S. should cut back on defense spending for the sake of its taxpayers. He was speaking during a joint news conference in which he traded barbs with visiting U.S. counterpart Adm. Mike Mullen.

    "I know the U.S. is still recovering from the financial crisis," Chen said. "Under such circumstances, it is still spending a lot of money on its military and isn't that placing too much pressure on the taxpayers?"
    "If the U.S. could reduce its military spending a bit and spend more on improving the livelihood of the American people ... wouldn't that be a better scenario?" he said.

     [Emphasis added.]

    The Chinese economy (5.00 / 1) (#104)
    by MKS on Wed Jul 13, 2011 at 01:30:06 PM EST
    is a fascinating topic.

    Are they really getting 10% growth based on a top-down, government-controlled allocation of resources?.....If so, that would be a real blow to the standard theory of Capitalism.

    But maybe there is some free market forces at work?....But apparently not too much of a free market.


    By the time the Pentagon gets done with (none / 0) (#105)
    by Militarytracy on Wed Jul 13, 2011 at 01:34:43 PM EST
    Dissecting what this interview means, they will get twice the budget :)  The growing Chinese military threat is always on the Pentagon radar and topic of all long term strategic planning right now.  A top Chinese General saying this will only make our military bigger.  They try everything they can every hour of every day to hack into our military computer network.  Nobody is harder at work on that than China right now.

    ;-) Just what I was thinking (5.00 / 1) (#120)
    by ruffian on Wed Jul 13, 2011 at 02:22:32 PM EST
    I can hear the laughter from the pentagon now....

    This from Rueters too (5.00 / 1) (#113)
    by Militarytracy on Wed Jul 13, 2011 at 01:54:23 PM EST
    about some mortgages having their principal written down, and they aren't mortgages that anyone is behind on.  Those poor people have probably given up.  Looks like at this time you stand a better chance of negotiating a write down if your mortgage was sold to someone else at a discount.  I think all of us will be able to negotiate a write down soon though.  This will be the time that what I have learned from BTD about not blinking will be tested.  For the record though, I'm getting my principal written down or I'm walking!  Not many folks are going to come out of this crisis with perfect credit, so all their threats against me are hollow.  We have a decent guaranteed income too.  Write me down or I walk, see my eyes...notice I'm not blinking?  Fortune favors the bold, so be bold out there!

    Current scare tactic is to (5.00 / 2) (#118)
    by ruffian on Wed Jul 13, 2011 at 02:21:16 PM EST
    threaten those with security clearances that 'walking away' would impact them. Something to think about...

    God Damn IT! (none / 0) (#122)
    by Militarytracy on Wed Jul 13, 2011 at 02:26:33 PM EST
    Thanks for the heads up. How do they say this can "impact" it?  And first of all, how does a bank know you have a security clearance?  If you have a security clearance you are supposed to keep that mostly to yourself too and you certainly don't look at some bank officer and say...Oh Yeah, I have this blankety blank security clearance :)  I know when you are having your clearance gone over yearly they go over your credit, is that where they say it can impact you?  I would think that would mean you are very smart to have negotiated your own write down.

    If you've declared (none / 0) (#124)
    by jeffinalabama on Wed Jul 13, 2011 at 02:35:07 PM EST
    bankruptcy, don't you know that you're susceptible to foreign governments offering you money and then blackmailing you?

    Don't you watch James Bond films?

    And remember, bankruptcy is just personal irresponsibility. Wasn't that the talk even here for a few weeks last year?

    Either that or my meds are off...


    I bet the military (none / 0) (#127)
    by Militarytracy on Wed Jul 13, 2011 at 02:44:03 PM EST
    comes up with a write down program.

    Or they'll just reassign (none / 0) (#129)
    by jeffinalabama on Wed Jul 13, 2011 at 02:45:43 PM EST
    a bunch of qualified folks to the public affairs office, instead of the incompetent officers they usually stick there ;-).

    They have a few mortgage relief (none / 0) (#131)
    by Militarytracy on Wed Jul 13, 2011 at 02:49:47 PM EST
    type programs out there already for military only right now.  I have little doubt this won't be the next one.

    Am certain it is not the bank making the threat. (none / 0) (#125)
    by BTAL on Wed Jul 13, 2011 at 02:37:20 PM EST
    The "impact" is that if you are willing to break that contract for personal financial gain, why would you not break the security clearance "contract" for personal financial gain.

    Well (5.00 / 4) (#132)
    by Warren Terrer on Wed Jul 13, 2011 at 02:50:45 PM EST
    if treason is such a concern thanks to the bad economy, perhaps the government should, you know, DO something to fix the economy and put a stop to all that treason.

    Ha hahahahahaha (none / 0) (#130)
    by Militarytracy on Wed Jul 13, 2011 at 02:47:29 PM EST
    Oh really?  I seriously don't think it has anything to do with that.  It has to with being bribable.  But if you household spreadsheet isn't underwater that makes you less bribable.

    There are several mmortgage relief programs available to the military that nobody else gets right now.  One of them that some friends just took advantage of has the taxpayers paying all the closing costs and all the realtor fees on the sale and purchase of our homes.  I bet a write down program is already in the hopper if one doesn't already exist now.


    Exactly. (5.00 / 1) (#133)
    by Ga6thDem on Wed Jul 13, 2011 at 02:51:56 PM EST
    You are a bigger security threat with huge debt than you are with a foreclosure on your record. However, a foreclosure could hurt you in the private job market right now simply because they are looking for a million ways to eliminate an applicant.

    Ok, then pull the trigger on your posted (none / 0) (#139)
    by BTAL on Wed Jul 13, 2011 at 03:10:05 PM EST
    threat to walk away then get back to us with the results.  

    What's to loose?  You get a better mortgage deal with zero risk to your husband's career - right?


    There is more to a security clearance (none / 0) (#149)
    by Militarytracy on Wed Jul 13, 2011 at 04:18:41 PM EST
    For one thing a person with a security clearance cannot control their spouse or the spouses spending habits so the credit check is only looking for risks of being bribable.  If it was looking for perfect credit scores too many soldiers that I know would have no chance of having one.  Too many soldiers going through crazy divorces would be sunk, but they aren't.  It isn't black and white.

    Yes, it would be in the credit check (none / 0) (#144)
    by ruffian on Wed Jul 13, 2011 at 03:53:09 PM EST
    in the periodic review. I think a write-down of principle is fine, but walking away/foreclosure - not so good, as it may indicate financial hardship. I know I don't need to explain this to you, but for others...if they suspect financial hardship they think you are more likely to sell secrets.

    You could explain you are not in hardship, just pi**ed off - that might work!


    But in this economy it doesn't (none / 0) (#151)
    by Militarytracy on Wed Jul 13, 2011 at 04:23:30 PM EST
    indicate necessarily financial hardship, and looking at the rest of our finances would make that pretty clear too.  It is a financial decision on a collaterally secured loan. The powers that be know that someone who is underwater in their mortgage is under more financial hardship than someone who is not so that doesn't make any sense at this juncture of our economic woes.  I know that credit checks are part of security clearances, but I don't know how definitive they are in the whole equation becuase we have had friends going through horrible divorces and all sorts of things and usually after answering certain pointed questions about what is taking place in that realm they still receive their security clearance just fine.  If this family's spreadsheet is in a better position, a member of this family is a better security clearance risk.

    True. Scare tactics are the extreme (5.00 / 1) (#159)
    by ruffian on Wed Jul 13, 2011 at 06:23:46 PM EST
    of what could happen, not what necessarily will.

    Who is applying this scare tactic though? (none / 0) (#178)
    by Militarytracy on Thu Jul 14, 2011 at 04:00:05 AM EST
    jobs? (5.00 / 1) (#156)
    by dandelion on Wed Jul 13, 2011 at 05:50:49 PM EST
    Now that we seem to be finishing up this insider-baseball game of debt-ceiling kabuki, can Democrats, including our President, quit the deficit fear-mongering and start talking about the much needed government spending to create jobs?

    I keep remembering that FDR created 11 million jobs through the WPA via executive order.

    So far, all Obama's done via executive order is segregate women's reproductive health care.

    Jobs.  Jobs.  Jobs.  Jobs.  Jobs.

    Everything else is theater.

    He gets this debt ceiling hike, (none / 0) (#157)
    by jeffinalabama on Wed Jul 13, 2011 at 06:04:59 PM EST
    I expect to see some spending on jobs. Immediately. If he goes for some silly infrastructure bank, I'll be screaming again.

    "The word for today is J-O-B."

    h/t the movie 'Friday.'


    He is 1/3 right (none / 0) (#4)
    by Slado on Wed Jul 13, 2011 at 10:22:13 AM EST
    It is household debt, governmental debt and business debt that caused this crisis.

    My famous chart.   Make sure you note the last time the spike went up and then look how this time we've climed even higher.

    What was the last and this presidents respone?  STIMULUS!!!! More debt.   That's the answer.  When you have a debt problem add more debt.

    Our economy is retracting due to the massive debt burden here and globally.   It will with us or without us.   That's how economics works.  It does not play a fairness game or a fair share game.

    The whole economy grew faster then the wealth and materials available to support it and it grew on debt.  Now there is nothing to sustain it and it's retracting.

    Look at Europe.  Look at most of the industrialized world.  In debt up to their eyeballs.   Wonder why the economy is not growing?  If you can't figure it out you don't want to know.  All the economists and politicians are slamming their economic theories against common sense and basic math.   We are broke.  

    I don't get why liberals and progressives think we can sustain a government that spends 25% of GDP when it's never, ever collected more then 21% of GDP in revenue.   It's simple math.   We can't sustain the largess of government that we've created with the economy that is going to be around for the next few years.

    Why?  Because the tax payers, home owners and most businesses don't have the money, the capital or the customers to grow fast enough to support our obligations.  

    You can't squeeze blood from a rock and the idea that our government is going to collect enough revenue to support it's out of control spending habits just is not reality.

    Look at Ireland, Italy, Greece, Portugal and California to see where we're heading if we insist on spending what the president and Democrats think is reasonable to spend.

    Debt is not the problem (5.00 / 1) (#10)
    by Militarytracy on Wed Jul 13, 2011 at 10:38:25 AM EST
    That is how the economy expands, lack of demand and a lack of ability for households to generate income is the problem.  By the way, all "stimulus" is not equal.  You throw the word stimulus around like some Republican.  Quantitative easing isn't really stimulus, but the only entity that doesn't have to answer to insane Republicans right now is the Fed so the only "stimulus" available to us that doesn't require a fight (which Obama hates to do unless it is about his right to create wars of his choice) is QE.  Many people attempted to tell the White House that the stimulus package they did get through during the emergency portion of this crisis was way too small.  But President Obama and Wall Street wants the New Deal gone.  Obama does not believe that New Deal economics works....well, up to now but I think he's about to have a brand new come Jesus moment.

    Link for revenue vs. spending gap (none / 0) (#8)
    by Slado on Wed Jul 13, 2011 at 10:33:42 AM EST
    I will admit this chart makes Bush and republicans look bad because obviously we need more revenue but it also makes democrats look bad because we can't collect enough to meet our commitments.



    Ireland, (none / 0) (#12)
    by Warren Terrer on Wed Jul 13, 2011 at 10:40:57 AM EST
    Italy, Greece, Portugal and California all have something in common that they DO NOT share with the United States. Therein lies all the difference in the world.

    True (none / 0) (#24)
    by Slado on Wed Jul 13, 2011 at 10:56:22 AM EST
    And that's why they are in worse shape then us.

    But math doesn't care who you are.  It will take longer but we'll get there if we keep doing what we're doing.


    Interest rates (none / 0) (#36)
    by Warren Terrer on Wed Jul 13, 2011 at 11:07:47 AM EST
    on US government debt is at about 3%. But hey we're getting there, lolz.

    As you say for now they are (none / 0) (#53)
    by Slado on Wed Jul 13, 2011 at 11:22:21 AM EST
    What happens when Europe implodes.

    A simple hike in rates and our debt explodes.

    There is a reason Obama mentioned Greece when he had one of his recent press conferences.

    When the first card falls we're all screwed.


    Obama (5.00 / 1) (#61)
    by Warren Terrer on Wed Jul 13, 2011 at 11:29:56 AM EST
    mentioned Greece for the same reason you did in another comment - lack of understanding of economics.

    A simple hike in rates? How is that going to happen? When Europe implodes people will be running for the cover of the US dollar.

    I'll let you in on a little secret. The Fed controls interest rates. They are what the Fed makes them. They won't go up until the Fed decides, right or wrongly, that it's time to raise them.


    California's problem is easy to spot (none / 0) (#95)
    by MKS on Wed Jul 13, 2011 at 12:59:02 PM EST
    It wasn't too much government spending, it was a crash of the real estate market....

    Huge unemployment led to less tax revenue.


    What I was hoping you would spot (none / 0) (#106)
    by Warren Terrer on Wed Jul 13, 2011 at 01:38:28 PM EST
    is that Ireland, Italy, Greece, Portugal and California all use a currency that someone else issues. The United States uses a currency that it issues itself. There is a fundamental difference between the United States and those other political entities as a result.

    California uses the Euro? (none / 0) (#109)
    by MKS on Wed Jul 13, 2011 at 01:44:24 PM EST
    But honestly, I really don't think monetary policy is the culprit here in the U.S.--but I'm all ears if you have evidence to the contrary....

    Ireland did cut spending and it made things worse....

    I am skeptical that the PIIG countries are suffering anything other than the effects of a recession.....And their situation regarding debt is not the same as ours....


    No (none / 0) (#112)
    by Warren Terrer on Wed Jul 13, 2011 at 01:50:22 PM EST
    California uses the US dollar which is not created by California. Perhaps you've never been to California and don't realize this.

    No I don't think monetary policy is the culprit here. I think monetary policy has proven itself to be pretty useless. The culprit right at the moment is terrible policy from the POTUS.


    I live in California (5.00 / 2) (#115)
    by MKS on Wed Jul 13, 2011 at 02:08:09 PM EST
    For a second, I thought with regard to California's use of currency, you were going to make a point about Pesos......but then again you are not a right winger so you would not go there.

    Just a little humor.....

    I have not been following the latest debt discussions--too busy with work stuff, but I did hear that Obama explicitly put Social Security and Medicare on the table.....

    Lawrence O'Donnel was saying how brilliant it was--a bluff that the Republicans would never call, exposing Republican hypocrisy without really putting those programs into jeopardy because the Republicans would never accept the offer.

    I think we already have enough evidence of Republican hypocrisy.....

    And letting the genie out of the bottle on cuts to Social Security and Medicare is not a good thing...

    O'Donnell is a very smart guy and a former Senate aide who knows the ropes.....But I wonder if he really buys what he is sellling.....

    The one hope for our economy is that it survives in spite of the stupidity of our policies....


    It worked in WWII (none / 0) (#92)
    by MKS on Wed Jul 13, 2011 at 12:46:03 PM EST
    You have a theory to back up your argument.

    But there is actual data for the Keynesian approach.

    True, an increase spending and the debt by itself is not good, but if you spend on jobs and infrastructre, the economy grows as does tax revenue.

    Reagan talked one way but acted like a Keynesian.  

    Reagan cut taxes, (some, but raised them too) but also spent money like a maniac.....That is why the deficit increased on his watch.  That is why Cheney infamously said that Reagan proved that deficits don't matter.


    Reagan took the gamble of (none / 0) (#100)
    by BTAL on Wed Jul 13, 2011 at 01:14:20 PM EST
    "buying the pot" in the Cold War/Arms Race.  The gamble was to spend X now to end the game that would otherwise cost X+++ in the longer term.  For discussion sake, one could even make the case that Reagan pulled a modern day FDR.

    Clinton benefited in his budget numbers by reaping the much touted "Peace dividend" coupled with the dot com bubble.


    Not sure I would disagree--much (none / 0) (#102)
    by MKS on Wed Jul 13, 2011 at 01:25:35 PM EST
    The Clinton budget balancing was due to a booming economy.....

    The military spending on the Iraq and Afghanistan wars did not result in much, if any, economic benfit here--that money was sent on a conveyor belt directly to those countries.....

    Back in the day, the GIs were not spending money in Bastogne.  And we were building a lot of things here.....

    Reagan's 700 ship Navy and other defense spending increases resulted in money being spent here. California near Long Beach was the center of a lot of that defense spending.....And, as that spending stopped, and the engineering firms laid off folks, the California economy took a hit in the early 90s.

    As to the need to outspend the Soviets, it has been reported that we vastly overestimated their strength.....they were imploding anyway.....the money could have been better spent elsewhere.  


    Hind sight on the Soviet strength is (none / 0) (#108)
    by BTAL on Wed Jul 13, 2011 at 01:41:58 PM EST
    20-20.  At the time the alternate risk was not an option, much less a known.

    True, that chapter is closed (5.00 / 1) (#111)
    by MKS on Wed Jul 13, 2011 at 01:50:19 PM EST
    Time will tell, but I wonder if we have overdown how capable Al Qaeda was.....

    Our intel seems to always push us into needless wars....Gulf of Tonkin.....Saddam and WMD.....

    And the Biden plan for Afghanistan seems more and more like a good idea.....Selected strikes at enemy camps rather than occupation of entire countries....

    More Jason Bournes and fewer Pattons and Rumsfelds....


    Reagan benefitted (none / 0) (#114)
    by jeffinalabama on Wed Jul 13, 2011 at 01:55:04 PM EST
    from the end of the centralized
    Soviet. The problems had gotten so bad that, as you said, the internal economy had pretty much collapsed.

    The USSR didn't really try to match Reagan's build up, because they saw it as impossible. However, on two occasions, the USSR came within moments of releasing ICBMs.

    Yes, twice. Scary times.

    Now, looking at the defense budget, not simply military but defense in general, we need to cut SDI, aircraft carrier construction, and the new joint pork fighter. As well as the new tanker fleet.

    It's not really amazing, but the type of wars we need to be prepared to fight right now are low intensity conflicts. "Heavy" divisions and Stryker brigades are, in my opinion, too cumbersome.

    God, I sound almost like an oldster reminiscing.

    Bach in the day when the US maintained the 7th ID and the 9th ID, both light, these two divisions could fight in an asymmetrical conflict situation. Boots on the ground, less of a footprint ie tracked vehicles. But the 9th and the 7th got BRAC'ed really quickly, leaving the 10th Mountain as the only general purpose light division. And the 10th has been overused since the Clinton years, since it's the only light-capable division.

    Of course, I'm not a fan of brigades, Stryker or otherwise. In LIC, what needs to deploy are reinforced/integrated battalions, under a generalized brigade or regimental control. Keep some regimental sized or even division sized assets, Divarty, for instance, and a scout/attack helicopter squadron, but have direct support to these battalions. Allow independent operations.

    It creates initiative, and one finds commanders who can hack it, and even more importantly those who can't, quickly.

    Thus endeth the homily by Brother Maynard, concerning the Holy Hand Grenade of Antioch and it's possible uses.


    Being a blue vs green suiter (none / 0) (#116)
    by BTAL on Wed Jul 13, 2011 at 02:10:52 PM EST
    I would disagree with the tanker fleet comment.  Not only is the current fleet extremely old it is critical to airlift (giving free rides to all you green suiters ;-) ) in addition to fighter/bomber refueling.

    China is the unknown wild card in relation to the need for the F-35.


    I know the tanker fleet's old, (none / 0) (#117)
    by jeffinalabama on Wed Jul 13, 2011 at 02:18:56 PM EST
    but the BUFF's went through a refurbishment, couldn't the 707's?

    Serious question. I thought I read somewhere that refurb would save billions and extend the life by 40-50 years.

    When it comes to the F-35, I think the same mistakes for the F-4 and F-111 have been made. Design by committee doesn't pay off.

    Ask a naval aviator-- "two engines are better than one, two people are better than one." Got a f/a 18 nephew, and his dad was an airedale, too.

    China has developed a good fighter, but until they begin to export it, I don't worry. I think selling Silkworm missiles to Iran is different from a top-flight Generation 3 fighter.

    Besides, I want more A-10's... I do love the Warthog.


    The buffs don't do near the number (none / 0) (#123)
    by BTAL on Wed Jul 13, 2011 at 02:34:38 PM EST
    of flight cycles that the 135s do.  Far greater frame stress levels and flight hours.  The 135s did go through some refurbs when they go the new larger engines and became the 135-R model.  Still doesn't overcome the first issue.

    The F-111 was a different story than the F-4 as the Navy did take the Phantom but couldn't use the Aardvark.  Would suggest that the F-14/F-15 and the F-16/F-18 scenarios better describe your point.  (Side point, the F-18 is a single seater).

    Complete agree on the A-10.  Best bang for the buck in far too many years.


    And the f-18 (none / 0) (#126)
    by jeffinalabama on Wed Jul 13, 2011 at 02:40:46 PM EST
    has short legs, too. Just saying that an aviator flying one says things like that.

    Did you know the F-111 was originally supposed to be able to take off and land on carriers? Look up McNamara's plans for it-- if you want one dry, boring read.

    Didn't think about the extra flight hours on the tankers.

    Also, isn't it really an in-service thing? f-15/f-16 because of cost for the 15? Not quite sure about the f-14/18 issue... might be age or airframe size... just pulling that out of my butt, though.

    I think the post McNamara Defense decided if you need a screwdriver, it doesn't need a hammer and a toaster attached.

    What are your thoughts on mothballing the bone and/or the B2 for cost savings?


    One more a-10 comment... (none / 0) (#128)
    by jeffinalabama on Wed Jul 13, 2011 at 02:44:21 PM EST
    I don't know if any have been deployed to Afghanistan, but a slow-flying cannon with superfantastic hard points and loiter time out the kazoo makes the folks on the ground very happy. Especially when mortars and caves and being enfliladed are involved.

    The A-10 is in Afghanistan (none / 0) (#136)
    by BTAL on Wed Jul 13, 2011 at 03:01:42 PM EST
    My SIL is an Army SF team member (taking his own team in Nov.) and has described their use of the Warthogs.  He much prefers them to the fast movers.

    Glad to hear it. (none / 0) (#137)
    by jeffinalabama on Wed Jul 13, 2011 at 03:04:38 PM EST
    SF long range teams need, and I mean NEED loiter time. Fly high where you can't be heard, lower the power, and cruise in figure eights, we'll find you something to blow up!

    Spend ~4 years at RAF Lakenheath (none / 0) (#134)
    by BTAL on Wed Jul 13, 2011 at 02:54:56 PM EST
    with the F-111s, so am very familiar with the airframe and its history.  The AF "rigged" the deal 'cause it wanted a super-sonic, swept wing, nuke-capable platform.  That killed it for the USN as it then had zero air superiority (CAP) capabilities.

    The actual correlation/relation ships are the F-14 & F-15 then the F-16 & F-18.  As you state, the costs were what drove the development of the 16 and 18 relative to the 14 & 15 respectively within the services.  But the 16 was supposed to be multi-service but the USN didn't like it so it chose the YF-17 and had McDonnel Douglas make it into the F-18.

    The B2 is the pinnacle of the ultimate cold war bomber.  The LeMay all time wet dream.  IMHO, we are only keeping it in operation in an attempt to "recoup" its initial costs.  The buffs are still around because we don't have enough B-2s to match the (cold war mindset) buffs all out strike numbers.  


    ty for the (none / 0) (#138)
    by jeffinalabama on Wed Jul 13, 2011 at 03:07:13 PM EST
    info on the 14/15 and 16/18. I always learn when I come to this site, and your direct experience helps tremendously.  

    I just hated hearing "hang in there, buddy, air is only 30 minutes out."

    No such thing as 'only' when you need CAS ;-)


    Thank you (none / 0) (#140)
    by BTAL on Wed Jul 13, 2011 at 03:15:16 PM EST
    Its been a fun (OT) chat.  Cheers

    And thank all of you (5.00 / 2) (#143)
    by Towanda on Wed Jul 13, 2011 at 03:42:59 PM EST
    So allow me to mention, as I occasionally remember to do, that the vets and the almost-so such as military tracy so often add to discussions here in many ways that really are helpful, insightful, and sometimes inciteful in cutting through puffery.  

    I was a vet's spouse 'way back, which still comes in useful, but I'm not as up-to-date as are all of you to see through some of the newfangled puffery (as well as much of this newfangled weaponry).

    And, of course, thank you for your service.


    Can I just say as well (none / 0) (#77)
    by Militarytracy on Wed Jul 13, 2011 at 12:00:20 PM EST
    Ben Bernanke getting up there saying there will be QE3 if we begin to experience deflation.....he isn't helping anyone but the rich sayiing that and doing that.

    We are finding out how much debt-fueled spending (none / 0) (#83)
    by ruffian on Wed Jul 13, 2011 at 12:15:34 PM EST
    was adding to economic growth. Wait, didn't I say that 2.5 years ago?

    A Joke or are they THAT Stupid? (none / 0) (#152)
    by pluege2 on Wed Jul 13, 2011 at 04:46:16 PM EST
    "The main factor responsible for both the severity of the recession and the subsequent weakness of the economic recovery is the deplorable weakness of the U.S. household balance sheet,"

    Q: the deplorable state of US household balance sheets results in what?

    A: reduced spending...very good Amir

    Q: and reduced spending by US households results in what?

    A: excess capacity...very good Amir

    Q: And a sudden state of excess capacity is synonymous with what?

    "collapse of demand"...very good Amir

    see how easy that is.