(08-05-2011 08:51 PM)Machiavelli Wrote:  Medi Care, SS, and DEFENSE....... LION SHARE OF THE BUDGET. What do you want to cut?

Well... we are quickly approaching the single largest expenditure in the budget being interest payments on Obama's debt.

I still think we should look at VAT. It immediately makes our exports 20% cheaper and imports 20% more expensive. Revenue has to be a part of this equation. Has to be, but I still believe this is exactly what some on the right wanted. A bankrupted govt. is a limited govt. A great way to control the beast.

Bush is just as much at fault for this or even more. I know you guy's don't like to hear that but it's the truth. The economy that W inherited compared to the one that Obama inherited. No comparison. Some day you guy's will wake up to the absolute horrendous shape he left the country in.

(08-05-2011 08:19 PM)Claw Wrote:  The idea is to throw the U.S. and all of Europe into fiscal crisis at once so that a "global orgranization" is required.

One rule of politics, "Never let a good crisis go to waste."

In this case, I think just the opposite though. Politicians like the game of kick the can down the road. They like it so much we have seen few politicians of either party propose anything needed to get out of this debt based depression (when 12% of GDP in deficit spending by the government can barely even account for the decline in the private economy, it's a depression). With that thought in mind, they definitely didn't want this, which puts us one step closer to having to deal with our debt issues.

I applaud S&P for this. Lying and pretending like everything is fine is only making the eventual collapse worse and that's what Moodys and Fitch are still doing. I'm sure S&P is going to get a lot of political pressure for this, but it would have been the right call years ago and is definitely now.

(08-05-2011 09:03 PM)Machiavelli Wrote:  I still think we should look at VAT. It immediately makes our exports 20% cheaper and imports 20% more expensive. Revenue has to be a part of this equation. Has to be, but I still believe this is exactly what some on the right wanted. A bankrupted govt. is a limited govt. A great way to control the beast.

Well, it clearly wasn't going to voluntarily reel itself in, was it?

(08-05-2011 09:03 PM)Machiavelli Wrote:  I still think we should look at VAT. It immediately makes our exports 20% cheaper and imports 20% more expensive. Revenue has to be a part of this equation. Has to be, but I still believe this is exactly what some on the right wanted. A bankrupted govt. is a limited govt. A great way to control the beast.

There was an idea kicked around to tax all banking transactions instead of an income tax. The rate would be very low 2 or 3% since it would tax every exchange of money. It should be investigated since it could possibly spread the need for revenue most evenly across every. Heck even illegals would pay one way or another.

(08-05-2011 09:03 PM)Machiavelli Wrote:  I still think we should look at VAT. It immediately makes our exports 20% cheaper and imports 20% more expensive. Revenue has to be a part of this equation. Has to be, but I still believe this is exactly what some on the right wanted. A bankrupted govt. is a limited govt. A great way to control the beast.

While I won't argue for tax increases, I'd accept them as part of a solution if one was actually proposed.

With that in mind, our deficit last year was better than $1.6 trillion ($1,600 billion) dollars. This year is probably going to be around the same or a little higher and interest is becoming more and more of a factor. You could take absolutely everything from every single billionaire in this country and every penny from every Fortune 500 company and you couldn't even pay the deficit for one single year.

The main part of any actual solution (i.e. end the deficit within a couple of years as that's the only way to deal with debt based recessions/depressions outside of blowing bigger bubbles or wars which destroy your competitors infrastructure) is too severely cut spending. This means big cuts in Defense, Medicare, Social Security, etc. It will absolutely suck as those cuts will filter into the rest of the economy and we will probably be worse off than in the Great Depression, but it's better than the alternative which is waiting for the bond market to decide to force these things overnight.

(08-05-2011 09:06 PM)Machiavelli Wrote:  Bush is just as much at fault for this or even more. I know you guy's don't like to hear that but it's the truth. The economy that W inherited compared to the one that Obama inherited. No comparison. Some day you guy's will wake up to the absolute horrendous shape he left the country in.

Many one day you'll wake up and realize that very few on here are Bush defenders, and that at some point blaming him loses effectiveness when your guy is continuing/expanding virtually all of his policies.

My crystal ball says we get more QE and monetizing of debt. Definite pain in our future. My worry is the govt. has been providing the hiring slack in the jobs area until the private sector could recover. The scary part is where do we go from here?

Here's what I'd do

1. Go to 15-15-15 flat tax/consumption tax combination (15% payroll split 7.5/7.5 between employer and employee, with no upper limit, plus 15% consumption tax, plus 15% business/investment income tax), with 30% Boortz-Linder prefund. This gets you about $300 billion more per year in revenues (net of the prefund).
2. Cut $100 billion a year from defense, without weakening us, by 1) bringing troops home from Germany and Japan, 2) converting 500,000 active duty slots into 1,000,000 reserve slots that cost about 20% as much each, 3) getting out of the nation-building business, 4) revising procurement policies and procedures, including fly before you buy and implementing the Zumwalt high-low mix of systems, and 5) never fighting a war we don't intend to win (goes with 3).
3. Replace the exisitng welfare hodgepodge with the prefund (funded above) and French health care (funded with elimination of Medicaid, offsets to Medicare--which will be phased out eventually--and reduction of the alphabet soup of programs made redundant by the prefund, see above). Provide a far better safety net with a net reduction of about $100 billion in cost.
4. Do away with corporate welfare programs, which are no longer needed to make US companies competitive, thanks to the tax changes above. Get rid of other non-productive and duplicative discretionary programs by eliminating them, farming them out to the states, and/or privatizing them, to save $500 billion.
5. Transfer the interstate highway system (revamped into a nationwide system of toll roads), the postal service, TVA and the western power agencies, air traffic control, water supply operations, and any other suitable operations to social security fund, offsetting with a reduction in debt owed by the general fund. Privatize them as self-funding profit-seeking corporations, with a target ROI of 5%, with profits going to grow the SS trust fund into a real fund. Use these as seed items for an ultimate privatization of a part of SS, along the lines of Sweden.
6. Legalize marijuana and tax it, raising maybe another $100 billion a year.
7. There are 320,000 federal employees in the DC area. Cut the number in half, at a conservative estimate of $100,000 per position that saves $16 billion a year--not a lot of money, but very symbolic.

Too many doom and gloomers. Not my style but sometimes it becomes a self fulfilling prophecy. Someone on here talked about someone's plan that said we cut 1% for 6 years and we are balanced. That doesn't sound like gloom and doom to me. Couple that with true tax reforms to increase revenue. Start paying down debt. *** **** it were AMERICA. Not some g damn bannna republic. We need to cut, cap, and tax. Start paying off debt. Put 50 cents on a gallon of gas. I hope this wakes some people up.

(08-05-2011 09:25 PM)BlazerFan11 Wrote:  

(08-05-2011 09:06 PM)Machiavelli Wrote:  Bush is just as much at fault for this or even more. I know you guy's don't like to hear that but it's the truth. The economy that W inherited compared to the one that Obama inherited. No comparison. Some day you guy's will wake up to the absolute horrendous shape he left the country in.

Many one day you'll wake up and realize that very few on here are Bush defenders, and that at some point blaming him loses effectiveness when your guy is continuing/expanding virtually all of his policies.

Not likely.

(08-05-2011 09:26 PM)Owl 69/70/75 Wrote:  2. Cut $100 billion a year from defense, without weakening us, by 1) bringing troops home from Germany and Japan,

This is one thing I can't figure out why we haven't done yet. Between our long range bombers and aircraft carriers I don't understand the strategic value in having troops in either place anymore.

(08-05-2011 09:26 PM)Owl 69/70/75 Wrote:  Here's what I'd do

1. Go to 15-15-15 flat tax/consumption tax combination (15% payroll split 7.5/7.5 between employer and employee, with no upper limit, plus 15% consumption tax, plus 15% business/investment income tax), with 30% Boortz-Linder prefund. This gets you about $300 billion more per year in revenues (net of the prefund).
2. Cut $100 billion a year from defense, without weakening us, by 1) bringing troops home from Germany and Japan, 2) converting 500,000 active duty slots into 1,000,000 reserve slots that cost about 20% as much each, 3) getting out of the nation-building business, 4) revising procurement policies and procedures, including fly before you buy and implementing the Zumwalt high-low mix of systems, and 5) never fighting a war we don't intend to win (goes with 3).
3. Replace the exisitng welfare hodgpodge with the prefund (funded above) and French health care (funded with elimination of Medicaid, offsets to Medicare--which will be phased out eventually--and reduction of the alphabet soup of programs made redundant by the prefund, see above). Provide a far better safety net with a net reduction of about $100 billion in cost.
4. Do away with corporate welfare programs, which are no longer needed to make US companies competitive, thanks to the tax changes above. Get rid of other non-productive and duplicative discretionary programs by eliminating them, farming them out to the states, and/or privatizing them, to save $500 billion.
5. Transfer the interstate highway system (revamped into a nationwide system of toll roads), the postal service, TVA and the western power agencies, air traffic control, water supply operations, and any other suitable operations to social security fund, offsetting with a reduction in debt owed by the general fund. Privatize them as self-funding profit-seeking corporations, with a target ROI of 5%, with profits going to grow the SS trust fund into a real fund. Use these as seed items for an ultimate privatization of a part of SS, along the lines of Sweden.
6. Legalize marijuana and tax it, raising maybe another $100 billion a year.
7. There are 320,000 federal employees in the DC area. Cut the number in half, at a conservative estimate of $100,000 per position that saves $16 billion a year--not a lot of money, but very symbolic.

You ought to run against Dimwit Dewhurst for the Senate.

(08-05-2011 09:46 PM)Ninerfan1 Wrote:  

(08-05-2011 09:26 PM)Owl 69/70/75 Wrote:  2. Cut $100 billion a year from defense, without weakening us, by 1) bringing troops home from Germany and Japan,

This is one thing I can't figure out why we haven't done yet. Between our long range bombers and aircraft carriers I don't understand the strategic value in having troops in either place anymore.

Because you can park heavy things (like tanks) over there, and they are a hell of a lot closer to the hot sports than parked over here. The other thing is that you can never have enough air bases within one tanker refuel range of any potential target.

(08-05-2011 09:49 PM)WMD Owl Wrote:  Because you can park heavy things (like tanks) over there, and they are a hell of a lot closer to the hot sports than parked over here. The other thing is that you can never have enough air bases within one tanker refuel range of any potential target.

Fair enough but we have bases in Italy, South Korea, Kosovo, Kuwait, Spain, Bahrain, Brazil and Greece. I would think it would be reasonable based on geography and current technology we could shutter some of these couldn't we?

(08-05-2011 09:49 PM)WMD Owl Wrote:  

(08-05-2011 09:46 PM)Ninerfan1 Wrote:  

(08-05-2011 09:26 PM)Owl 69/70/75 Wrote:  2. Cut $100 billion a year from defense, without weakening us, by 1) bringing troops home from Germany and Japan,

This is one thing I can't figure out why we haven't done yet. Between our long range bombers and aircraft carriers I don't understand the strategic value in having troops in either place anymore.

Because you can park heavy things (like tanks) over there, and they are a hell of a lot closer to the hot sports than parked over here. The other thing is that you can never have enough air bases within one tanker refuel range of any potential target.

Park the heavy stuff over there, with a cadre to guard and maintain it. Fly the troops to the equipment if needed. That's what always struck me as wrong about western Europe. We had the troops over there without enough hardware to last very long in a shooting war. We'd have a very challenging resupply problem if Ivan ever started shooting. That always struck me as being backwards.

But I'll give you a hint--Don't bring that up at a NATO conference, if you happen to get invited to one.

The first downgrade of the US full faith and credit happens under Obabba's watch. Happy Birthday. Tomorrow we will hear how it's not your fault.

Here is my take from the S&P press release:

Quote:The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).

The S&P downgrade has more to do with sending a message to our government about our need for compromise and consensus than any fear they have about us not honoring our debts.

This is a shot across our bow not a torpedo to our hull.

The S&P press release might be the greatest thing to happen to this country in a long time. Now there is political cover for the moderates of both parties to tell the radicals in their parties to either get on board or get left behind. This could be a good thing in the long run if we are able to keep our AAA/A+ with the other 2 ratings agencies and our politicians see this downgrade for what it is.....A Warning.