US Federal Government Shutdown

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Originally Posted by Gaius Scribonius Curio

Not to put too fine a point on it, but: there is a positive to possible world-wide economic collapse, inflicted by a one group of self-interested politicians, in one single country, whose collective understanding of the international economy would apparently fit easily on the head of a pin?

Not only are they willing to destroy the US economy, but they do not even appear to have considered the wider consequences.

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Whatever. Treasury yields rise, government debt becomes riskier, money diverts to other governments or private industry. Or, we pay the debt back anyway, just later and even though yields rise, nobody is that shaken because what are the alternatives? Velocity is slowed down, resulting in jobs lost that were likely to be lost anyway. The plus side to the stagnation is that money that was directed at government is now directed elsewhere. Government is crippled, money has to find something else now that the government is no longer able to pretend that it is solvent

Major revisions forced to medicare, social security and we end up paying our debts anyway. Who knows? An overwhelming majority of economists? Let's start taking risks. People used to throw all of their money into rickety old ships and cross the world's oceans. They used to get into aircraft and fly without knowing what to expect. Sometimes you have to not be afraid to lose everything.

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Originally Posted by ICantSpellDawg

If the US defaults and loses a credit rating with more agencies, wouldn't this have a positive effect on other types of investment?

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https://i.imgur.com/BOqeSBs.jpg

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Originally Posted by ICantSpellDawg

People used to throw all of their money into rickety old ships and cross the world's oceans. They used to get into aircraft and fly without knowing what to expect. Sometimes you have to not be afraid to lose everything.

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Looks like the first thing to fix is the education system.

There's not going to be a default, folks. The government makes more than enough tax revenue to service the debt. I linked a Moody's article earlier. Now here's one from Forbes.

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The federal government estimates it will collect almost $3 trillion in revenue for the fiscal year that runs from October 1, 2013 until September 30, 2014. Below I demonstrate one possible way the federal government could institute some priorities and spend only the amount it receives in revenue. (All the numbers I use to construct the balanced budget below can be found here.)

To begin with, the interest on the national debt must be paid. I will budget $240 billion for that. The White House is guessing a little lower, but interest rates have been rising, so I will play it safe. Next, social security payments should run about $860 billion. Place that as the second priority and we already have spent $1.1 trillion of the $3 trillion we have.

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It won't be unicorns and rainbows, but default won't happen.

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Originally Posted by ICantSpellDawg

Let's start taking risks. People used to throw all of their money into rickety old ships and cross the world's oceans. They used to get into aircraft and fly without knowing what to expect. Sometimes you have to not be afraid to lose everything.

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Uh, you do realize that that the risks involved in sailing those rickety old ships across the world's oceans was the one of the main reasons that the modern insurance industry developed, right? People were not fans of the risk even back then.

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Originally Posted by Xiahou

There's not going to be a default, folks. The government makes more than enough tax revenue to service the debt. I linked a Moody's article earlier. Now here's one from Forbes.


It won't be unicorns and rainbows, but default won't happen.

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And Jeffrey Dorfman also expects that fireing a big chunck of employed people will have 0 effect on the income.

It's a 50% cut on education, abolishment of NASA (good luck restarting it afterwards), DoE (who are responsible of taking care of the nuclear waste for starters), DoC (they do patents), dumping farm subsidies (long term it might be useful, shot term it's going to kill off US farming), 40% defense cut, etc, etc. This will of course have no negative side effects at all.

It's causing an economic crash about the same time you can see recovery from the last one.

To be fair to ICSD, I do somewhat share his view that if Oct 18th arrives and the debt ceiling has not been raised, not a whole lot will happen. The risk comes into play with a much longer-term issue. A short jaunt over the ceiling won't really do much to shake the faith of investors in the validity of US bonds. The fact remains that the global market believes that, even if the US goes over the debt ceiling, it will eventually get authorized and all bonds will be repaid in full, possibly even with higher interest to compensate for any temporary defaults that occurred along the way. The market basically does not think it is even possible for there to be a scenario in which the debts are never repaid, which is what was at risk in places like Greece. As such, life will generally go on as normal in the financial industry come Oct 18th. Certainly the stock markets will rock and roll, but that will be an instinctual reaction to uncertainty and it will eventually even out. Harm will start to kick in the longer the default goes on, as failure to make payments will start to impact the US economy directly and would likely plunge us back into recession if it lasted long enough. That in itself is bad news and will depress the entire global economy, but it's not a situation like that which developed in 2008. True financial chaos would only occur if the markets started to believe that US bonds would not be repaid in full and, quite honestly, it's hard to imagine a scenario in which that could ever occur. It wouldn't be a pleasure cruise for anyone, particularly those who depend on monthly checks which would not arrive, but it's not quite the financial apocalypse that some have made it out to be. The reason is simply that the financial markets have more faith in the US government than our own citizens do. Right or wrong, that's all that matters.

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Originally Posted by ICantSpellDawg

If the US defaults and loses a credit rating with more agencies, wouldn't this have a positive effect on other types of investment? Or would the entire standard be lowered. If people thought that the US government was irresponsible, shouldn't a recognition of this fact drive bond US prices higher, interest rates up? Wouldn't this drive money into a private sector which looks better by comparison at the same time as it dosincentivises government borrowing? Collapse of trust in government does not mean trust is gone. We live in a trust vacuum - if the government loses hold, you find trust in another's hand.

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This bit is incorrect. The US is in a unique position because of the level of trust that is placed in its credit-worthiness by the global financial industry. There is no alternative to the US for this role, which is one of the main reasons the markets haven't already abandoned us. If there was somewhere else they could go that was as safe, or even close to as safe, they would already be there. But they aren't because there isn't. Once the US is no longer regarded as a guaranteed safe haven for investments, we will be in a world where this is no guaranteed safe haven for investments. That's not necessarily a financial apocalypse either, but there simply isn't another investment option that is ready to step into our shoes. People talk alot about China, but there is a growing sense in the markets that China itself is riding a bubble. Asian markets have always been notoriously bubble-rific and big collapses out there are part of doing business. European confidence is gone and will not return for a long time. I shouldn't even need to mention the problems with South America, Africa, and Russia. There's also the problem that even where there are other markets that are considered safe, they aren't large enough to meet demand. Part of the benefit of the US is that we carry so much debt that there's always room to invest in us. The same can't be said for much smaller states. Even if you think Canada and Sweden are nice stable places, they alone cannot support the global marketplace.

Once confidence in the US is gone, we will be in uncharted waters. There has never been a period in modern history in which there has not been a financial safe-haven for investments of some kind, not even during the Great Depression. If the markets lose confidence in US credit-worthiness, we will certainly go through a period of financial chaos the likes of which no living person has ever seen. That said, it's going to take a lot more than one day over the debt ceiling to shake confidence in the US. Make us go past the debt ceiling for a month or more, and then repeat the default process a second time and a third time, and you may want to start buying a lot of bullion.

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Originally Posted by Xiahou

Now here's one from Forbes.

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Or more accurately, from a Southern libertarian economics professor, whose notable work is titled Ending the Era of the Free Lunch. Not exactly reaching outside of your comfort zone there. Yes, 9 out of 10 libertarians agree: Government bad. Now let's hear from Grover Norquist and the cast of Atlas Shrugged!

Despite the fact that all of your recent posts have boiled down to "the government can pay its bills," and "default won't happen," I don't get the impression you've done much reading on the subject. Can you address prioritization? The unevenness (indeed, randomness) of tax receipts, when broken down to a week-by-week or month-by-month basis? The weird bill the Repubs tried to force through forbidding the Treasury to take "extraordinary measures" to not default?

@TinCow is correct that prioritizing debt repayment over all other functions would leave ample money to service the debt, while crippling silly things like the military. But it's not clear the U.S. Treasury is even set up to perform that sort of prioritization, which is an issue when you're processing millions of payments per year.

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Originally Posted by Lemur

@TinCow is correct that prioritizing debt repayment over all other functions would leave ample money to service the debt, while crippling silly things like the military. But it's not clear the U.S. Treasury is even set up to perform that sort of prioritization, which is an issue when you're processing millions of payments per year.

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That's not what I was referring to, actually. Whether prioritization occurs or not, the faith remains that the US will eventually pay back the full amount of all of its bonds, plus interest. That faith remains even if the US actually fails to make an interest payment on bonds. The belief is that, even if this occurs, the US will still compensate the bondholder fully a little further down the road, possibly even with higher interest rates than they were issued at originally. That's the faith that the markets have in the US system at the moment. They believe that the US is capable of paying its debts and that the current crisis is caused by politics, not by an underlying weakness of the US economy. Thus, once the political situation is resolved, the money will continue flowing as normal, even if it is delayed. In order for there to be true financial chaos, investors need to believe that it may be possible that the US will never pay them in full for their bond investments. We're nowhere near close to that kind of sentiment yet.

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Originally Posted by TinCow

In order for there to be true financial chaos, investors need to believe that it may be possible that the US will never pay them in full for their bond investments.

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Oh, fair point, but from what mainstream economists and investors are saying, just denting the confidence in the USA's debt is having repercussions. This isn't strictly binary, where we flip from "everything's great" to "buy leather clothing and join a roving cannibal gang." Degradation has gradations.

By one set of calculations (Macroeconomic Advisors), the debt brinksmanship and uncertainty wrought by our Tea Party friends has already cost the USA ~3% of GDP growth since 2010, and added ~1.4% to unemployment.* Major investors are already shunning notes that come due in November and December (Bank of Japan is demanding a steep discount on all of those notes).

Money is a confidence game. Nobody in their right mind can dispute this. Damage the confidence, and you create trouble. It takes a sizable pair of brass balls to support the self-inflicted damage, and then declare that there is no damage.


*Note that Macroeconic Advisors' numbers were run before the latest shutdown. For estimates of damage from our current funtime adventure, see Goldman Sachs' Jan Hatzius, who estimates 2% GDP growth damage.

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Originally Posted by Lemur

Oh, fair point, but from what mainstream economists and investors are saying, just denting the confidence in the USA's debt is having repercussions. This isn't strictly binary, where we flip from "everything's great" to "buy leather clothing and join a roving cannibal gang." Degradation has gradations.

By one set of calculations (Macroeconomic Advisors), the debt brinksmanship and uncertainty wrought by our Tea Party friends has already cost the USA ~3% of GDP growth since 2010, and added ~1.4% to unemployment. Major investors are already shunning notes that come due in November and December (Bank of Japan is demanding a steep discount on all of those notes).

Money is a confidence game. Nobody in their right mind can dispute this. Damage the confidence, and you create trouble. It takes a sizable pair of brass balls to support the self-inflicted damage, and then declare that there is no damage.

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I agree with this. If the 18th rolls around with no debt ceiling increase, there will be significant damage done to our reputation and, with every day that goes by, to the economy. As I said, we could easily plunge back into recession if the US misses SSA payments and other such things. However, there is something of an alarmist Financial Mad Max attitude going around which I think has the potential to undermine the Democrats position. If they try and make people believe that the entire system will come crashing down on the 18th, those that are most vocal disputing it (the Tea Party) will gain credibility. That's particularly so because even if there is a default it would likely be short-lived and resolved before the most serious impact began to take hold. That in itself would be good for the Tea Party, because the public would visibly see us go over the debt ceiling and the world not end. They would not understand that the only reason that the world didn't end was that we didn't go far enough over. Thus, they would be much more likely to support going far enough over in the future. That, to me, is dangerous because the Tea Party itself is dangerously wrong about the long-term impact of the problem, as demonstrated by ICSD's opinion about such a prolonged default. If that kind of mentality is given some credibility, the risk that a long-term default (or a repeat several months down the road) will occur increases. As such, I think it's important to be realistic about exactly what will happen here to make sure that the Dems are not accused of crying wolf after the fact. We need to emphasize to the American public that if they wake up on the 18th with no debt ceiling increase they shouldn't expect to see roving bands of marauders in the streets and half the world on fire. Life will go on as per normal for most people for at least a few days or weeks. It would only be after such a period that things would get increasingly worse. If people understand that, there's less of a risk that the obstructionists will get a credibility bounce that might itself cause the catastrophe that we want to avoid.

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Originally Posted by a completely inoffensive name

Looks like the first thing to fix is the education system.

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Sounds like a Soviet plot, to me.

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Originally Posted by TinCow

I agree with this. If the 18th rolls around with no debt ceiling increase, there will be significant damage done to our reputation and, with every day that goes by, to the economy. As I said, we could easily plunge back into recession if the US misses SSA payments and other such things. However, there is something of an alarmist Financial Mad Max attitude going around which I think has the potential to undermine the Democrats position. If they try and make people believe that the entire system will come crashing down on the 18th, those that are most vocal disputing it (the Tea Party) will gain credibility. That's particularly so because even if there is a default it would likely be short-lived and resolved before the most serious impact began to take hold. That in itself would be good for the Tea Party, because the public would visibly see us go over the debt ceiling and the world not end. They would not understand that the only reason that the world didn't end was that we didn't go far enough over. Thus, they would be much more likely to support going far enough over in the future. That, to me, is dangerous because the Tea Party itself is dangerously wrong about the long-term impact of the problem, as demonstrated by ICSD's opinion about such a prolonged default. If that kind of mentality is given some credibility, the risk that a long-term default (or a repeat several months down the road) will occur increases. As such, I think it's important to be realistic about exactly what will happen here to make sure that the Dems are not accused of crying wolf after the fact. We need to emphasize to the American public that if they wake up on the 18th with no debt ceiling increase they shouldn't expect to see roving bands of marauders in the streets and half the world on fire. Life will go on as per normal for most people for at least a few days or weeks. It would only be after such a period that things would get increasingly worse. If people understand that, there's less of a risk that the obstructionists will get a credibility bounce that might itself cause the catastrophe that we want to avoid.

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Your responses have been well reasoned, non-alarmist and effectively apolitical which I respect.

With regards to my understanding of this situation, I am not an economics guy, I understand that. What I do seem to accept is that;
1.Deficit spending for Federal and, to some extent, State Governments is a good thing in most situations.
2.the debt ceiling is not the edge of the world but a guide sign well in advance of the edge of the world.
3.Our levels of deficit spending have reached unsustainable levels and our current spending is not being directed in a way that makes deficit spending a good thing in the first place; effective education and infrastructure development.
4. Our spending levels, low growth outlook, and entitlement culture, coupled with longer life expectancy make dramatic tax increases over time a guarantee

Recognition of these things makes me desire pulling us past this artificial ceiling as this would help us to constantly fail to increase it, until we are able to get our spending in order - to a more favorable ratio of deficit spending. It would give much more credit to the position that it will not be increased, so that more radical debt and budget cuts are required, to entitlements in particular. Medicare and social security ages should be spiked, with a means tested ladder to those who would be most harmed. Major cuts to education expenses with a major drive towards fewer teachers by radically increased use of technology. Dramatic shedding of redundant government jobs, as they are treated as a form of entitlement. We can have a bloody revolution, or we can have a financial one, but there is nothing healthy about our national situation. We are at the point where people are breaking. Sacrifice of the GOP is worth it to force a major overhaul.

I'm not afraid of being called an idiot. When I smell bullshit I don't have to be a scientist to call it out. This is a representative democratic republic. We elect those who represent us, they are not appointed based on how intelligent other intelligent people think they are. The world will not end if the central planners in our politburo back up a bit and cut some of the reigns is my point. Damage to trust in the system, proximity to the debt ceiling with stoic realizations about it's artificial nature may have helped us for next time or it may have shrunk the GOP in the house. It remains to be seen until the midterms.

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Originally Posted by Gelatinous Cube

There's a place for anti-spending policy in the mainstream, just not in a way the far right wants.

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Of course not. The last time spending was the way they dream of it was in the 1950s, at the height of our "we have the only industries left in the world" phase and the Medicare, Medicaid, federal welfare programs did not exist. Prior to that, the last time it was roughly that way was during the 1920s, when isolationism ruled and military spending was about 1% of GDP and there was no social security.

Truly putting our spending house in order would require far more than tweaking -- or even defunding -- the ACA.

The "deal" has passed the senate. We know why Mitch McConnell supported it- they gave him 2,918,000,000 good reasons.

Just of out interest there has obviously been a lot of polling lately about the shutdown and some which purport to show what the House could look like thanks to this. Usually I don't put much stock in generic ballot questions (for a variety of reasons) but I found this interesting, particularly given the discussion of incumbency that we had here the other day:
http://www.people-press.org/2013/10/...cism-persists/

The grim public mood is reflected in the record share of voters who want most members of Congress defeated in next year’s midterm elections. Nearly three-quarters (74%) of registered voters would like to see most members of Congress defeated; during the 2010 and 2006 election cycles, which both culminated in shifts in control of the House, no more than 57% in each of these two cycles wanted most members of Congress not to be reelected.

Moreover, the share saying they do not want their own representative reelected – 38% – is as high as it has been in two decades. At this stage in the 2010 and 2006 midterms, fewer wanted to see their own member of Congress defeated (29% in November 2009, 25% in September 2005).

That is just absolutely unprecedented.

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Originally Posted by CountArach

Just of out interest there has obviously been a lot of polling lately about the shutdown and some which purport to show what the House could look like thanks to this. Usually I don't put much stock in generic ballot questions (for a variety of reasons) but I found this interesting, particularly given the discussion of incumbency that we had here the other day:
http://www.people-press.org/2013/10/...cism-persists/

The grim public mood is reflected in the record share of voters who want most members of Congress defeated in next year’s midterm elections. Nearly three-quarters (74%) of registered voters would like to see most members of Congress defeated; during the 2010 and 2006 election cycles, which both culminated in shifts in control of the House, no more than 57% in each of these two cycles wanted most members of Congress not to be reelected.

Moreover, the share saying they do not want their own representative reelected – 38% – is as high as it has been in two decades. At this stage in the 2010 and 2006 midterms, fewer wanted to see their own member of Congress defeated (29% in November 2009, 25% in September 2005).

That is just absolutely unprecedented.

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Yes, we might see one of the biggest "out with the incumbents" efforts in recent memory.

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Originally Posted by Seamus Fermanagh

Yes, we might see one of the biggest "out with the incumbents" efforts in recent memory.

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And I will remain skeptical until the ballots are counted.

Here is the real problem, or part of it at any rate:

https://www.facebook.com/photo.php?v=10151899681508984


I keep telling you that you can't blame on party. Maybe there are others who think the same...

You can blame it on one party because there is only one party pretending to be two parties.

The other problem is that people don't like change. They prefer the corrupt politicians they have over an insecure future, which is true here as well.

Republicans really blew it on this one. It is probably time to replace Boehner. His speakership has resulted in weakness without trade-off. I'm not sure what he is doing.

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Originally Posted by Seamus Fermanagh

Yes, we might see one of the biggest "out with the incumbents" efforts in recent memory.

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I've voted for my House Rep (a Dem) several times, basically on auto-pilot. Next time I'm going to be carefully reading the platforms of his primary challengers. If any of them campaigns on being moderate and reaching across the isle to make deals with the Republicans, that person will get my vote in the primary. If the Dem candidate doesn't hold that view, but by some miracle the Republican does, I will vote for the Republican. My voting priorities are now as follows: First, don't be a bigot. Second, act like an adult and compromise. Everything else is irrelevant as far as my vote goes.

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Originally Posted by Husar

You can blame it on one party because there is only one party pretending to be two parties.

The other problem is that people don't like change. They prefer the corrupt politicians they have over an insecure future, which is true here as well.

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That is about the way it is.

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Originally Posted by TinCow

I've voted for my House Rep (a Dem) several times, basically on auto-pilot. Next time I'm going to be carefully reading the platforms of his primary challengers. If any of them campaigns on being moderate and reaching across the isle to make deals with the Republicans, that person will get my vote in the primary. If the Dem candidate doesn't hold that view, but by some miracle the Republican does, I will vote for the Republican. My voting priorities are now as follows: First, don't be a bigot. Second, act like an adult and compromise. Everything else is irrelevant as far as my vote goes.

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Wise! But that assumes they will do what they say they will, which is uncommon.

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Originally Posted by TinCow

I've voted for my House Rep (a Dem) several times, basically on auto-pilot....

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You are not alone. Far from it.

You new methodology is a good one. I hope others emulate it.

Sadly, ACIN's skepticism is well-founded.

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Originally Posted by Fisherking

Here is the real problem, or part of it at any rate:

https://www.facebook.com/photo.php?v=10151899681508984


I keep telling you that you can't blame on party. Maybe there are others who think the same...

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He sounds kind of confused, actually, lumping a whole bunch of disparate phenomena under "extraction."

Also, at this point I am really done with tu quoque and "both sides do it" arguments. I call bullhockey.

Yes, all politicians are liars, but some lie more frequently and stupidly than others. Yes, political parties are amoral, but some are more nihilist than others.

The US debt is eminently fixable, if people would stop being such hysterics about it. Check GDP-to-debt ratio, and then try to tell me that we're becoming Greece. Our numbers look good. If Ayn Rand fanatics such as Paul Ryan would stop destroying all attempts at a compromise, we could make some serious steps toward fixing the balance sheet. Pretty much instantly.

(BTW, did you know that the deficit has been falling rapidly anyway? You sure wouldn't know that if you listedn to red-faced McPanicmonkey on MSNBC.)

https://i.imgur.com/xXT0KSu.png

The other forms of "extraction" Sir Rants-a-lot describes are harder to address, because there are big-money interests that would have to have toes stepped on. But here's a helpful thought: don't lump four or five completely different financial phenomena into an unclear term such as "extraction." And shouting does not make you more convincing.

Right wing radio is commenting on yesterday's "kick the can a bit" deal as a total cave-in surrender/victory for Obama. Callers seem to be in favor of punishing any GOP rep or Senator who voted yes for the deal.

I myself think that George Will had it right. Valid tactic, but only effective with buy-in from the public supporting the "underdog" on what they believe is a worthy cause. In other words, had the GOP made it about cutting spending and paying down the debt on a fight over the debt limit, they might have been able to sell it and garner support. Over the ACA, they didn't have a chance.

This should, in my estimate, yield a more staunchly TEA/Social Conservative GOP after the next couple of elections. Fair chance of them being a minority party at the same time though.

However, a year in politics is a long time. Craziness with the ACA or unknown events moths ahead could alter this political landscape entirely.

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Originally Posted by Seamus Fermanagh

This should, in my estimate, yield a more staunchly TEA/Social Conservative GOP after the next couple of elections.

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Serious question: Why is it that whenever a Republican suffers any sort of defeat, supporters reflexively go for "he/she wasn't ideologically pure enough"? I ask because it's such a one-sided phenomenon. I don't hear my Dem friends say that when a Dem gets KO'ed. They talk circumstances, mistakes the guy made, things the opposition got right, etc. But they don't immediately say, "He wasn't a pure enough Democrat, we need more ideology next time!"

It's a striking discrepancy between the two parties.

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Originally Posted by Lemur

Serious question: Why is it that whenever a Republican suffers any sort of defeat, supporters reflexively go for "he/she wasn't ideologically pure enough"?

It's a striking discrepancy between the two parties.

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You're dealing with people who's basic plan seems to be:

• Stand at your window at night and say 'I believe'
• Magic spirit thingy will come and take you away
• To a Neverland without government, without adults, without laws, without taxes, without responsibility, and without restrictions of any kind on your personal freedom.

... So when the spirit fails to magically appear the only conclusion can possibly be that you're not a true believer. They know their story, it's the only explanation.

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Originally Posted by TinCow

I've voted for my House Rep (a Dem) several times, basically on auto-pilot. Next time I'm going to be carefully reading the platforms of his primary challengers. If any of them campaigns on being moderate and reaching across the isle to make deals with the Republicans, that person will get my vote in the primary. If the Dem candidate doesn't hold that view, but by some miracle the Republican does, I will vote for the Republican. My voting priorities are now as follows: First, don't be a bigot. Second, act like an adult and compromise. Everything else is irrelevant as far as my vote goes.

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As a Virginian, you should be using the open primary system to moderate the Republican candidates. Try to get a moderate GOPer nominated, then vote as you see fit in November.

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Originally Posted by drone

As a Virginian, you should be using the open primary system to moderate the Republican candidates. Try to get a moderate GOPer nominated, then vote as you see fit in November.

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For a moment there, I read it as "Varangian" and I was like... WHERE DO I SIGN UP?

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Originally Posted by Lemur

Serious question: Why is it that whenever a Republican suffers any sort of defeat, supporters reflexively go for "he/she wasn't ideologically pure enough"? I ask because it's such a one-sided phenomenon. I don't hear my Dem friends say that when a Dem gets KO'ed. They talk circumstances, mistakes the guy made, things the opposition got right, etc. But they don't immediately say, "He wasn't a pure enough Democrat, we need more ideology next time!"

It's a striking discrepancy between the two parties.

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A good comment and a valid question.

If you listen to right wing radio, as I do, you hear quite a number of folks who take such a stance on conservatism. I have heard Limbaugh say that a failing of most GOP candidates for President, recently, is that they were not conservative enough. Limbaugh, along with many others on the US political right, are convinced that, whether outspoken about it or not, a solid majority of people are motivated by and support the core values of conservatism and that a politician courageous enough to ignore the media and evoke that inner strength will not only win the election but embody a powerful mandate for leadership.

So, for many of them, the short term goal is to precipitate a crisis that either a) forces the opposition (Dems) to cave, allowing more conservative policies to flower (and with that success brings more conservatives to the fore within the GOP), or b) is defeated but shows who is really championing the conservative cause, thus convincing voters in districts with RINO (Republican in Name Only -- since only an out and out conservative is a "true" Republican) representatives to replace them with dyed-in-the-wool conservatives and transform the party. They are, though they do not state this in so many words often, perfectly willing for that party to be a minority party, at least in the short term, since they KNOW that Americans are, at heart, mostly conservative and that their views will therefore eventually win out.

Many of them haven't embraced the fact that only about 20-25% of Americans are conservatives by their definition, and that the middle 50% of the population (mugwumps) has any number of conservative values but does NOT embrace the whole panoply of Ayn Randian conservatism. The mugwumps want to pick and choose which combo of values to support and often very purposefully do not want to embrace anything that is extreme in either direction. Over the last 20 years, there actually seems to be a groundswell in favor of some of the social-democratic policies associated with Europe, which would run counter to the TEA orthodoxy beliefs. Again, the TEA crowd are failing to account for the middle blob of the population's preference for a mixed strategy and an acceptance of the primacy of the federal government (even though most in this group still want a number of limitations ON that government).

Instead, the right tends to dismiss the moderates as cowards, waiting for what appears to be a majority opinion to form and then jumping on the bandwagon. The right also believes this makes them susceptible to media agenda-setting, hence their constant vitriol for the politically "left" tone of much of the mainstream media.

Just how they reconcile in their minds the view that moderates are both "most people are conservative at heart" and "indecisive and easily lead by peer pressure" is beyond me. I have yet to hear an articulate reconciliation of both trends.


I myself am a conservative -- particularly on economics and the role of the federal government. I am less so, marginally, on "social" issues and national defense/our role as the world's police officer. I would like to see the federal government curtailed a good bit, more power put back in the hands of the states, and taxation taken out of the hands of the feds and placed in the hands of my state and local officials -- as these politicians have, historically, been somewhat easier to unseat as incumbents and more of a part of their communities rather than closeted inside the DC beltway for most of the year.

For all of that, I simply don't get why the TEA crowd will not accept facts and adopt a policy that addresses and seeks to change the situation facing them -- as opposed to the current strategy of denying those facts, shouting their own position even louder and somehow assuming that stridency will work more effectively that careful efforts at attitude change. The comm scholar in me goggles at this.

Oh well, I needed to vent that a bit. Thanks for your patience all.

Quote:

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Originally Posted by Seamus Fermanagh

Many of them haven't embraced the fact that only about 20-25% of Americans are conservatives by their definition, and that the middle 50% of the population (mugwumps) has any number of conservative values but does NOT embrace the whole panoply of Ayn Randian conservatism. The mugwumps want to pick and choose which combo of values to support and often very purposefully do not want to embrace anything that is extreme in either direction. Over the last 20 years, there actually seems to be a groundswell in favor of some of the social-democratic policies associated with Europe, which would run counter to the TEA orthodoxy beliefs. Again, the TEA crowd are failing to account for the middle blob of the population's preference for a mixed strategy and an acceptance of the primacy of the federal government (even though most in this group still want a number of limitations ON that government).

---

A question from an outsider. Why is "Tea" acronymic here?

Quote:

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Originally Posted by Seamus Fermanagh

Yes, we might see one of the biggest "out with the incumbents" efforts in recent memory.

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Would Lemur be interested in taking part though? He sounds rather fond of his congressman.

TEA, Taxed Enough Already

Kinda funny because they dont seem to care much about the amount of tax but that its a black democrat collecting them.

Quote:

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Originally Posted by Lemur

Serious question: Why is it that whenever a Republican suffers any sort of defeat, supporters reflexively go for "he/she wasn't ideologically pure enough"? I ask because it's such a one-sided phenomenon. I don't hear my Dem friends say that when a Dem gets KO'ed. They talk circumstances, mistakes the guy made, things the opposition got right, etc. But they don't immediately say, "He wasn't a pure enough Democrat, we need more ideology next time!"

It's a striking discrepancy between the two parties.

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Echo chamber. At some point did a large chunk of Republicans lose touch with reality (Romney was going to win big remember?) and because they stay in the chamber, they can't see the actual reasons, only the propaganda. Take Jeffrey Dorfman from the Forbes article. He has no freaking idea on what the department of commerce/energy does, and didn't bother to check. But since he doesn't like commerce regulations and presumably green energy, he wants them gone.

It's emotionally driven, as in the emotions comes first and everthing else is an after rationalisation. As in if reality doesn't match my emotions, then reality must be wrong.

Seamus, since you have better check on this than me, any idea on why the "true believers" has gotten the feeling that something is very wrong in the US? Is it something simple as changes running past them or catched up to them? Or something else?

It started before Obama (even if it's certainly peaking here), probably even before Bush. One reason is probably increasing disparity of wealth and that most Americans doesn't get wealthier anymore.

Edit:

Quote:

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Originally Posted by Greyblades

TEA, Taxed Enough Already

Kinda funny because they dont seem to care much about the amount of tax but that its a black democrat collecting them.

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Or that rising them from the lowest levels in 50 years in one big reason on why it starts to finally approaching a balanced budget. Or that Obama has been quite cutting in the goverment expenses, it's the stimulus packages and low tax income that caused the huge budget deficit.

Also, it it your Paul Ryan that will be leading the Republican side in getting a unified budget, Lemur? :sweatdrop:

When they lynch Ted Cruz, can anyone come along or do we have to buy tickets?

Quote:

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Originally Posted by Seamus Fermanagh

I needed to vent that a bit. Thanks for your patience all.

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Why apologize? I thought your reasoning and explanation was really solid, and I appreciate you taking the time to put your thoughts together.

Quote:

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Originally Posted by Ironside

Also, it it your Paul Ryan that will be leading the Republican side in getting a unified budget, Lemur? :sweatdrop:

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Well, if history is any guide, my representative won't get 100% of everything he wants, so he will reluctantly be forced to burn the house down.

This is pretty much how I see my congresscriter:

http://youtu.be/9AEUIHBoudU

Quote:

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Originally Posted by Greyblades

TEA, Taxed Enough Already

Kinda funny because they dont seem to care much about the amount of tax but that its a black democrat collecting them.

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Unkind and untrue. The large majority of tea-party types simply don't give a damn about the man's race(s). The fact that he is a big-government type actively seeking to create another government entitlement that must be funded is more than enough.

Quote:

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Originally Posted by Seamus Fermanagh

The fact that he is a big-government type actively seeking to create another government entitlement that must be funded is more than enough.

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If that's the case, why don't they get worked up about the Iraq war, which was approx. ~$2 trillion, 100% funded by debt? Medicare Part D? Ronald Reagan's socialization of the US healthcare system? The PATRIOT Act?

As an outsider, their outrage seems extremely selective. So it's not unreasonable for non-tea-partiers to look at the rage and fear, and say, "Maybe something else is driving this?"

Here's an essay that I found thought-provoking:

In trying to understand the far-right mindset – which accounts for around a quarter of the country – I think you have to zoom out and see all of this in context. [...]

[Y]ou cannot understand the current GOP without also grasping how bewildered so many people are by the dizzying onset of modernity. The 21st Century has brought Islamist war to America, the worst recession since the 1930s, a debt-ridden federal government, a majority-minority future, gay marriage, universal healthcare and legal weed. If you were still seething from the eruption of the 1960s, and thought that Reagan had ended all that, then the resilience of a pluralistic, multi-racial, fast-miscegenating, post-gay America, whose president looks like the future, not the past, you would indeed, at this point, be in a world-class, meshugganah, cultural panic. [...]

What the understandably beleaguered citizens of this new modern order want is a pristine variety of America that feels like the one they grew up in. They want truths that ring without any timbre of doubt. They want root-and-branch reform – to the days of the American Revolution. And they want all of this as a pre-packaged ideology, preferably aligned with re-written American history, and reiterated as a theater of comfort and nostalgia. They want their presidents white and their budget balanced now. That balancing it now would tip the whole world into a second depression sounds like elite cant to them; that America is, as a matter of fact, a coffee-colored country – and stronger for it – does not remove their desire for it not to be so; indeed it intensifies their futile effort to stop immigration reform. And given the apocalyptic nature of their view of what is going on, it is only natural that they would seek a totalist, radical, revolutionary halt to all of it, even if it creates economic chaos, even if it destroys millions of jobs, even though it keeps millions in immigration limbo, even if it means an unprecedented default on the debt.

This is a religion – but a particularly modern, extreme and unthinking fundamentalist religion. And such a form of religion is the antithesis of the mainline Protestantism that once dominated the Republican party as well, to a lesser extent, the Democratic party. [...]

[A]s religious organizations grow powerful and complacent, and their adherents do likewise, they make themselves vulnerable to challenges from upstart sects that “impose significant costs in terms of sacrifice and even stigma upon their members.” For insurgent groups, fervor and discipline are their own rewards.

Right now, the Republican Party is an object of contempt to many on the far right, whose adamant convictions threaten what they perceive as Republican complacency. The Tea Party is akin to a rowdy evangelical storefront beckoning down the road from the staid Episcopal cathedral. Writing of insurgent congregations, Finke and Stark said that “sectarian members are either in or out; they must follow the demands of the group or withdraw. The ‘seductive middle ground’ is lost.”

Quote:

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Originally Posted by Lemur

If that's the case, why don't they get worked up about the Iraq war, which was approx. ~$2 trillion, 100% funded by debt? Medicare Part D? Ronald Reagan's socialization of the US healthcare system? The PATRIOT Act?

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A few do decry the Iraq War and a few of the older ones decry the EMTALA and the amnesty efforts under Reagan. A lot complained and bitched about Part D at the time.

Why aren't they going after it now? Beats me.

The Patriot Act doesn't seem to be a focus of any outside the (L) part of the group. I agree with you that it should be.


Of course, expecting consistency from a group of yanks is an act of unbridled optimism in and of itself!

Quote:

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Originally Posted by Seamus Fermanagh

Why aren't they going after it now? Beats me.

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Right, nobody has a good explanation for the selective outrage of the Tea Partiers. So all I'm saying is that it's not crazy-town for outsiders to speculate on other motives.

Nobody should be smug, and nobody should be doing a victory lap.

This little temper tantrum has done damage to our economy, and to world confidence in the USA.

Relief tempered with caution would be more appropriate.

Quote:

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Originally Posted by Lemur

Right, nobody has a good explanation for the selective outrage of the Tea Partiers. So all I'm saying is that it's not crazy-town for outsiders to speculate on other motives.

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Perhaps not. I do admit to being frustrated at the quick association between racism and conservatives though. I find racism to be a form of self-expressed stupidity that is anathema to my way of thinking, and get annoyed when some are too quick to characterize my views by focusing on the expressed views of a few idiots. I try not to be so sweeping in my posts (successfully I think) and to accord others the same privilege of respect for their views -- to allow for the possibility of nuanced and varied viewpoints on a subject -- even if I argue with the main thrust taken by my intellectual "opposition" on an issue.

So I acknowledge that I might be reacting to this on a bit of a "pet peeve" level. Perhaps I am incorrect and a great swath of tea-partyers and conservatives are neaderthalic in their thinking to the point that they buy into all of that "bruised peach" excrement and that they simply can't allow themselves to be comfortable with a "darkie" running the White House. Perhaps that's what's really motivating them in their thinking. If so, however, I haven't met such or heard such in my own experience.

It is likely, statistically, that at least some of the TEA crowd are racists, just as some of those supporting the American political left are eco-whacks who believe that humans are an unnatural element of planet earth and need to be eradicated to free Gaia. In other words, all of the political perspectives have a fruit bat fringe. I try not to confuse them with the mainstream of the various perspectives.

Quote:

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Originally Posted by Seamus Fermanagh

eco-whacks who believe that humans are an unnatural element of planet earth and need to be eradicated to free Gaia.

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HOW DID YOU GET HOLD OF MY DIARY?

-edit-

On a slightly more serious note, since your thoughts deserve a response:

"Racism" is pretty darn useless as a description, unless you're applying it to yourself, because it's a motivation. And (a) pretending to know what motivates somebody else is dangerous and prone to error, and (b) nobody but the thickest, stupidest moron would ever admit to racial animus in the USA. So ... it's kinda moot.

That said, the Tea Party reaction to Obama always make me think of Blazing Saddles, which probably means I am a bad person:

http://youtu.be/IZT7xLjxuhs

I've been struggling with how to formulate, simply and clearly, why I find the Tea Party so disturbing. Finally stumbled across an essay that nails it:

Can the Tea Partiers’ beliefs be falsified? I don’t think they can be. I mean, is there any evidence that could convince them that the fault here lies with themselves, in the way they conceive politics, and in the way they behaved? It sure doesn’t look like it. In that sense, they think of politics as a kind of religion. [...]

Religion requires us to believe the impossible; that’s what makes it religion. Politics is the art of the possible; that’s why it is not religion.

I thought TEA stood for The Economic Anarchists.

Less precise than Lemur's link, but in much the same vein:

http://www.aljazeera.com/indepth/opi...245693884.html

Quote:

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Originally Posted by Lemur

https://i.imgur.com/xXT0KSu.png

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Hey now, cherry picking content smells of Washington politics and has no place between gentlemen. Including the whole picture gives a better sense of reality and demonstrates that this so called "deficit reduction" still leaves deficits THREE TIMES greater than they were 10 years ago.

Quote:

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TEA, Taxed Enough Already

Kinda funny because they dont seem to care much about the amount of tax but that its a black democrat collecting them.

---

Even though the group started when Bush was president, most observers share this closed-minded attitude.
Attachment 11079

Quote:

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Originally Posted by The Lurker Below

the whole picture gives a better sense of reality and demonstrates that this so called "deficit reduction" still leaves deficits THREE TIMES greater than they were 10 years ago.

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"Whole picture" is a funny concept when you're talking about mathematical abstraction, but okay. If I thought for one minute that Tea Partiers were genuinely concerned with deficits, there would be a whole lot to talk about, including what mix of revenue increase/spending decrease would bring maximal deficit reduction with minimal economic disruption. But somehow that conversation never engages them, and that sort of deal-making is anathema to their reps. So ... cheers. It appears that y'all like to complain about deficits, but don't want to do anything about 'em. (See: Ryan, Paul.)

Quote:

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Originally Posted by The Lurker Below

Even though the group started when Bush was president

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If you mean the Tea Party originated in the space between the 2008 Obama election victory and Obama taking office, then yes, technically correct, although any fair-minded observer would say that there's a definite correlation between the multi-culti Democratic president and the Tea Party.

Quote:

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Originally Posted by The Lurker Below

Hey now, cherry picking content smells of Washington politics and has no place between gentlemen. Including the whole picture gives a better sense of reality and demonstrates that this so called "deficit reduction" still leaves deficits THREE TIMES greater than they were 10 years ago.

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Thank you. The start point on that graph was very misleading. (Not suggest that was Lemur's intent.)

Quote:

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Originally Posted by PanzerJaeger

The start point on that graph was very misleading.

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What, at the moment when massive, unfunded tax breaks met the biggest economic collapse since the Great Depression? Indeed, how could that represent anything but cherry-picking?

Besides which, the indisputable fact is that the US deficit is falling, and is projected to continue to do so.

And if anyone on the Tea Party side were serious about deficit reduction, they would look for ways to make deals, instead of attempting to burn the house down every time they don't get 100% of what they want.

Quote:

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Originally Posted by Lemur

Serious question: Why is it that whenever a Republican suffers any sort of defeat, supporters reflexively go for "he/she wasn't ideologically pure enough"? I ask because it's such a one-sided phenomenon. I don't hear my Dem friends say that when a Dem gets KO'ed. They talk circumstances, mistakes the guy made, things the opposition got right, etc. But they don't immediately say, "He wasn't a pure enough Democrat, we need more ideology next time!"

It's a striking discrepancy between the two parties.

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It's because the Democrats have already gone through their 'purges' in the last 5 years. Back in 2008 the Blue Dog Caucus of conservative/pro-business (or more correctly anti-Labour) Democrats was huge (54 House seats). Many of them were primaried over the preceding 2 cycles, with a lot also falling to the Republican wave of 2010. Now there are only 13 in that Caucus. A lot of them were in fairly safe blue seats where Democrats thought they could do better (read: elect 'true Progressives') and so more progressive candidates were found who were then supported in primaries. The Netroots movement had a lot to do with this and showed what a motivated, activist base can do in primaries.

Quote:

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Originally Posted by CountArach

The Netroots movement had a lot to do with this and showed what a motivated, activist base can do in primaries.

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Huh, I heard the term "Netroots," but I never paid attention.

I guess I should read up ...

Quote:

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Originally Posted by Lemur

What, at the moment when massive, unfunded tax breaks met the biggest economic collapse since the Great Depression? Indeed, how could that represent anything but cherry-picking?

Besides which, the indisputable fact is that the US deficit is falling, and is projected to continue to do so.

And if anyone on the Tea Party side were serious about deficit reduction, they would look for ways to make deals, instead of attempting to burn the house down every time they don't get 100% of what they want.

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I was only referencing the graph. Using very narrow bounds to imply one trend when a more rational data set selection implies the direct opposite is the definition of cherry picking. You know this.

Quote:

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Originally Posted by Lemur

Huh, I heard the term "Netroots," but I never paid attention.

I guess I should read up ...

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They are truly powerful. For example Act Blue, which is where most of the donations from the Netroots blogs are channelled through raised more than $22.5 million in the previous financial quarter, almost entirely for either progressive candidates at all ballot levels or for Democrats in competitive seats, with an average of under $40 per donation:
http://blog.actblue.com/2013/10/03/e...2-million-day/

Edited

Quote:

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Originally Posted by Gelatinous Cube

But there is no truly organized lefty counterpart to the Tea Party. I'd expect to see one soon barring a sudden marginalization of the Tea Party.

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Oh yeah definitely it isn't formalised and it is nowhere near as rabid but the point is that there are large portions of the Party who will seek a level of ideological purity.

A snapshot of the cost in research:

http://www.scientificamerican.com/ar...ence-permanent

Quote:

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Originally Posted by Lemur

Besides which, the indisputable fact is that the US deficit is falling, and is projected to continue to do so.

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Sure, if they keep falling they may even get down to the levels they were at during the Bush administration. Wouldn't that be something? No one thought they were too high then...

Quote:

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Originally Posted by Xiahou

Sure, if they keep falling they may even get down to the levels they were at during the Bush administration. Wouldn't that be something? No one thought they were too high then...

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In part because it meant that it would be handling a major economic crisis very poorly. Considering the starting position, Obama has done a good to great work on the economics. Expenses have stabilised enough that the spike is gone in practice (as in 2000-2012 has about the same yearly increase as 2000-2008). Income is still lagging behind. ACA is in part intended to drive medicare costs down longterm (I know you don't expect it to work) and social security and military are the big expenses that you could cut to make a large diffference. Both would bring massive protest storms if cut, and the Republicans haven't exactly been in negotiation mode during the last years. So it's basically politically impossible to do such things.

He'll never get credited for it.

A retirement question, how does it work in the US? I'm wondering since both ss and medicare spiked during the crisis. It matches fired old people retireing and going over from private health insurance to ss, but I don't know if the US system works that way.

Quote:

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Considering the starting position, Obama has done a good to great work on the economics.

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If he's done such a fine job, why is the deficit (as a percent of the GDP) for 2012 (the latest year we have non-estimate numbers for) still 7%? That's double what it was under Bush's highest year (2004). I don't remember anyone, myself included, who thought the rate of debt accumulation under Bush was acceptable

It seems like you want to have it both ways in your efforts to make Obama look good. The deficit is high because the economy is so terrible. Yet, on the other hand, thanks to Obama, the economy is doing great. The deficit has fallen, but that's mainly due to the sequester- which Obama and Democrats in congress want to reverse. They got their tax hikes on the rich, and then no one wanted to talk seriously about trimming spending, so the sequester was triggered. Now they want to talk about more tax hikes.

It's pretty neat how the administration wants to take credit for lowering the deficit when it was done over their objections. Regardless, the sequester cuts are over a 10 year schedule- projections that go beyond that show the deficit falling off the cliff again. And using the White House's own projections (which are typically over-optimistic), when Obama leaves office, the deficit will still be higher than at any point during the Bush administration.

If you consider that a "great job", I'd like to know what your standard is....

Edit: link for my numbers.

Bush's deficits were larger than they should have been for what was being accomplished. The Medicare D thing was a financial bonanza for the pharmaceutical industry but has had mixed results at best overall. Way too much of the monies allocated to Iraq and the WoT were spent poorly as well.

While Obama's administration must bear the burden for the stimulus packages of 2009 and onward, it should be noted that the EESA (included TARP) was a product of the Bush administration. It can be argued that this legislation allowed for a long-slide into recession and the survival of most of the financial firms involved, generating stability. Absent this effort, we may have had a shorter recessions, but it would've been massive and world spanning as the bubble popped. These were some of the costs that Obama inherited.

The problem with the Obama stimulus package was that it became the biggest pork barrel in history. More dollars were spent on idiot projects than anything else, and a lot of the "shovel-ready" infrastructure jobs were anything but shovel ready. The goal was to shove money into the economy and minimize a crash -- which it certainly helped with -- but rather than spending on public works with lasting value, too much of it was spent funding the pet projects of influence groups along with massive funds for tax breaks and payments to social security recipients. Was it wrong to spend the money? No. Was it well thought out? Yes....but on a political level more than a recovery level.

In short, there is a lot of blame to go around. As the Rutledge character in 1776 queried, "who stinketh the most?"

Quote:

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Originally Posted by Seamus Fermanagh

While Obama's administration must bear the burden for the stimulus packages of 2009 and onward, it should be noted that the EESA (included TARP) was a product of the Bush administration.

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There's no denying that. But even if you give the Obama administration a pass on all of 2009, the deficit is still higher.

Quote:

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The problem with the Obama stimulus package was that it became the biggest pork barrel in history.

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It didn't become one, it was designed as one. It spread around federal largesse to pet projects in the name of "stimulus". Then, when the stimulus ran out, they could warn us of dire budget cuts if we didn't maintain the new spending levels- thanks to the fraud that's known as "baseline budgeting".

Quote:

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"In short, there is a lot of blame to go around. As the Rutledge character in 1776 queried, "who stinketh the most?"

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Bush was bad on spending- I'm not here to argue that. But.... what difference, at this point, does it make?

Even with the sequester, it's a struggle to return to Bush-level spending. They want to roll back the sequester. It's bewildering to see people who condemned Bush's profligacy try to praise Obama's.

Most of the US political left would like to see the deficit reduced. They just have a substantially different agenda for where the reductions would be coming from.

That said, I DO think the US political left is far more tolerant of endless deficits than are the GOP -- and for a certainty more tolerant than are the TEA crowd.

It's definitely fun to see who the hacks are in congress (that would be the majority of them). When they're out of power, they're deficit hawks. When they're in power... what deficits?

I hope that if the GOP ever gets their hands back on the reins again that there's enough of those dangerous, unhinged lunatics known as TEA partiers around to effect real change- probably not...

Death and Taxes 2014

Death and Taxes 2004

Note that Discretionary spending is $350 billion higher than in 2004.

National Security/Military in 2004: $399 billion
National Security/Military in 2014: $647 billion

Not-That 2004: $383 billion
Not-That 2014: $509 billion

Also, consider that current Discretionary spending as % of GDP is not at all high, historically.

Would you blame Obama for Mandatory spending over which he has no control, and for the defense budget?

How would things have gone differently under any other POTUS?

Quote:

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Originally Posted by Montmorency

Would you blame Obama for Mandatory spending over which he has no control, and for the defense budget?

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Who does have control of it, if not the chief executive. Has he offered any serious plan to address them? Someone had better, because it's going to continue to crowd out other spending as it takes over a larger and larger share of the budget and drives out yawning deficits.

Any time a Republican even whispers about reform, we're told they're going to throw grandma off a cliff. When are we going to grow up and have a serious discussion about entitlement reform? Probably not before we're all going off the cliff with grandma. There's too much hay to be made playing politics and denying reality.

https://www.youtube.com/watch?v=OGnE83A1Z4U

Quote:

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Originally Posted by Seamus Fermanagh

Most of the US political left would like to see the deficit reduced. They just have a substantially different agenda for where the reductions would be coming from.

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The Tea Party/GOP position makes any meaningful deficit reduction difficult, if not impossible. If you say:

1. I don't like the deficit.
2. But don't raise any more revenues with tax rates.
3. And don't close a single tax loophole.
4. And don't you dare attempt to create a simplified tax structure if it means any more revenue.
5. And don't touch defense.
6. And don't touch elderly entitlements.
7. But please balance the budget by tomorrow.

Doesn't really leave much room for ... anything, ya know?

This is why I do not believe the Tea Party is serious about the deficit. I think the national debt is more of a totem than an issue for them.

Quote:

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Originally Posted by Xiahou

If he's done such a fine job, why is the deficit (as a percent of the GDP) for 2012 (the latest year we have non-estimate numbers for) still 7%? That's double what it was under Bush's highest year (2004). I don't remember anyone, myself included, who thought the rate of debt accumulation under Bush was acceptable

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Because a balanced budget would require military cuts during war, big social security cuts and big medicare cuts. Or massive tax rises. With the current political climate, could you see any of these remotely possible? All of them are fairly obvious "both parties agrees somewhat" situations.

The big tax cuts due to the stimulus package are one of the things I'm uncertain about, but since they pretty much came immidiatly or even before taking office, I count them more like a situation to handle, rather than something he implemented.

Quote:

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Originally Posted by Xiahou

It seems like you want to have it both ways in your efforts to make Obama look good. The deficit is high because the economy is so terrible. Yet, on the other hand, thanks to Obama, the economy is doing great. The deficit has fallen, but that's mainly due to the sequester- which Obama and Democrats in congress want to reverse. They got their tax hikes on the rich, and then no one wanted to talk seriously about trimming spending, so the sequester was triggered. Now they want to talk about more tax hikes.

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Increasing the taxes back to late Bush levels or even Clinton levels makes sense to recover the deficit. Table 2.1 should show quite clearly how much of an income drop 2009 was. Income recovery is one area where Obama has been doing more poorly.
Over 75% of the budget is related to the military, medicaid and social security. That's not some small projects.

Quote:

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Originally Posted by Xiahou

If you consider that a "great job", I'd like to know what your standard is....

Edit: link for my numbers.

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Well, we can take that the expenses 2009-2012 increased by about 20 billion dollars. The last time the increase was that low in a single year was between 1972-1973 and the budget was about 1/15 of what it is now. That's my standard. The 2018 prognosis does feel a bit wobbly though, both expenses and income increases drastically.

Read around on that link, it shows major shift in where the expenses ended and why it didn't immidiatly drop the year after (2010), when they got some returns on the covering for the housing bubble.

You have to remember that Bush inherited and led the nation during a time of 'Economic Boom/Prosperity' whilst Obama inherited the beginning of the worst Recession since 1930 which was 1) Bound to make the debt situation worse (less income. bigger welfare) 2) The cost of the Stimulus Packages to get out of that situation.

That is a big difference which is often overlooked.

Quote:

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Originally Posted by Xiahou

When are we going to grow up and have a serious discussion about entitlement reform?

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Not while Paul Ryan is taken seriously, that's for sure.

What's the second word in "Grand Bargain"?

Obama and the Dems have made it painfully, awkwardly clear that they are willing to negotiate on liberal sacred cows. It's up to the Repubs to reciprocate, and show that they're actually, you know, interested.

Quote:

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Originally Posted by Lemur

The Tea Party/GOP position makes any meaningful deficit reduction difficult, if not impossible. If you say:

1. I don't like the deficit.
2. But don't raise any more revenues with tax rates.
3. And don't close a single tax loophole.
4. And don't you dare attempt to create a simplified tax structure if it means any more revenue.
5. And don't touch defense.
6. And don't touch elderly entitlements.
7. But please balance the budget by tomorrow.

Doesn't really leave much room for ... anything, ya know?

This is why I do not believe the Tea Party is serious about the deficit. I think the national debt is more of a totem than an issue for them.

---

Virtually no one is willing to entertain the possibility of entitlement reform, if you look at the polls.
Everyone thinks the government should spend less, but when you ask them where- all you get is blank stares or something insipid like "Let's cut aid to countries that hate us!", as though that accounts for even a drop in the bucket.

Look at the polls- the only item that gets close to majority support is cutting "Aid to the world's needy".

There continue to be sizable partisan differences in views of funding for government programs. For most, substantially larger shares of Republicans than Democrats support decreased funding. Yet there are only two possible reductions that draw majority support from Republicans – foreign aid (70%) and unemployment assistance (56%). There is no program among the 19 included in the survey that even a plurality of Democrats wants to see decreased.

In a way, I guess we make it easy for our politicians to ignore the real problems- we don't seem to know what they are.

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Originally Posted by Xiahou

Virtually no one is willing to entertain the possibility of entitlement reform, if you look at the polls.

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Which is why both parties would need to dive in together, along with a number of other unpopular measures, such as closing tax loopholes.

The difficulty is that Repubs have expressed absolutely no desire to do anything contrary to the wishes of their base. Nor is there evidence that Repub leaders could deliver the votes, even if a difficult and painful Grand Bargain were struck.

In this, as in all things for all time, I blame my congressman.

Note that Grover Norquist is a huge problem when it comes to making a bargain. Pledging to never, ever, under any circumstances close a loophole or raise a marginal tax rate ... well, imagine if the entire Dem caucus has signed a Holy Vow to never cut any spending ever, under any circumstances. Kinda limits the ability to get anything done, no?

You seem to be looking at this perhaps a little one sided. Obama got significant tax increases as part of the previous "fiscal cliff" deal. Where was his grand bargain/compromise on spending cuts? We got the sequester, but that was a result of failed negotiations- not compromise. The sequester had been designed to be so horrific that neither side would allow it to take effect. In the end, the Republicans decided to was better to take bite the bullet than continue to try and negotiate.

Obama got tax hikes. Let's see him approve of some meaningful cuts before he comes back around for more tax hikes. :yes:

Edit: Personally, I'm all for tax reform. Not for tax increases, however. Regardless, had Obama shown any interest in real cuts, his claims of wanting to compromise would seem more sincere to me.

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Originally Posted by Xiahou

Where was his grand bargain/compromise on spending cuts?

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Here, let me Google that for you.

As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

“Obviously, there will be some Democrats who don’t believe we need to do entitlement reform. But there seems to be some hunger to do something of some significance,” said a Democratic official familiar with the administration’s thinking. “These moments come along at most once a decade. And it would be a real mistake if we let it pass us by.”

Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing, and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.

That would represent a major legislative achievement, but it would also put Obama and GOP leaders at odds with major factions of their own parties.

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Originally Posted by Xiahou

I'm all for tax reform. Not for tax increases, however.

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Are we defining "tax increase" using the Grover Norquist formula? Are you saying that a radically simplified tax code is illegitimate if it produces more revenue? Or what?

Whole thing just sucks. The only entitlement reform that MIGHT pass is an increase for social security. It is the primary retirement income of a majority of Americans. Cutting it is simply not going to happen.

Medicare and Medicaid might be slowed in terms of rate of growth.

Welfare is really the only one that might be open for reductions, but it has already been pared back far more than the others.

Some tax loopholes must be maintained. Without those loopholes allowing them to opt out of the normal system of taxation, corporations and the wealthy will flee. Any that can be closed should help.

The defense budget will probably be slashed -- it likely needs to go back to 2% GDP as opposed to the 6-8 level we've been doing. That will necessitate a reduction in commitments, a return of U.S. forces to U.S. territory save for a very few exceptions etc. We simply cannot afford to police the world and both balance our budget and pay down the debt.

Discretionary spending will need to be hacked across the board as well -- far more so than sequestration has accomplished.

Even with those cuts noted above, we'll have to roll back tax reductions and increase taxes back up to 1982 rates if we are going to pay down the national debt by a couple of percentage points each year -- which must be the long term change to right the fiscal house.


The alternative would be to actually cut/privatize social security. I do not believe that that will ever happen unless it is then replaced by a basic living allowance.

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Originally Posted by Lemur

The Tea Party/GOP position makes any meaningful deficit reduction difficult, if not impossible..

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I have to admit, if I was the one in charge, what I would do as the minimum, would be -
- Raise revenue via high-bracket tax rates whilst tax reform takes place as a stop-gap measure. This creates incentive to help and push reform in order for it to expire.
- Close tax loopholes.
- Streamline and simplify tax-structure
- Touch defence

End result
- Budget balanced by "tomorrow" (2-5 years for losing deficit)

As I couldn't resist myself, here are reforms I would implement in America if I were the President..

- Raise minimum wage, remove the 'waiter tip' cop-out. Service industry personal get the royal shaft in the provisions and no, they do not make up for it in tipping and tipping should not be a mandatory practise.

- Reduce defence spending significantly. America spends 1/3rd of the worlds total on Defence. Perhaps a GDP figure of around 2.8% instead of 4.4%, decreasing nuclear arsenal and allowing the lapse/non-renewal of programmes which are costly and non-efficient as the main drive for the cuts. Sell off or repurpose the older arsenal, perhaps do so in stages and depending on the level of technology involved.

- Start progressive changes to Healthcare. An American NHS would not occur overnight unless super-costly.
Federal-level watch-body and State-level implementation into Trusts.
It would be done in stages, starting with GP Surgeries being brought under the control of State-level Trusts. These would charge affordable rates and these will assist to help, refer and treat people.
Introduction of a nation-wide insurance which is administrated at a state level, this would have set costings for essential treatment. Similar to the fix-rate German system.
Make it so this insurance has to be accepted by law. This should see a dramatic reduction in the price of insurance, with insurances from existing companies providing 'luxury services'/privileges people may desire.
If required, start the construction of ANHS hospitals focusing on the major cities first, then spreading out to the more rural areas.
Aim is to make the programme self-sufficient, re-purpose Medicare into the new framework.
Give incentives to newly trained doctors to join the ANHS system. This could be providing help with medical school fees in return for a 3-5 contract.
Buy medicines at similar prices to other countries such as Canada, Britain, etc. The average cost can be up to ten times higher in the United States.
Make it so if employers are not funding insurance, they have to contribute to it. Influence from the French system in this case.

- Reform Lobbying. This includes setting fixed monetary limits on politicians campaign fund. Make it an offence to accept bribes of any kind, especially when there is a conflict of interest. Working on Oil Policy whilst enjoying a holiday to Hawaii paid for by BP? Enjoy losing your seat and a ban from in standing in elections and possible criminal charges. Term limits for the Senate and Congress.

There are quite a few things I would do whilst in power, and this is simply tip of the iceberg stuff!

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Originally Posted by Xiahou

Personally, I'm all for tax reform. Not for tax increases

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Could I ask for a clarification of what you mean by this? Is it...

I would like the same percentage and rates for taxes (10% for A, 20% B) as of now, but I would like the tax-code simplified and less exploitable. This may increase or decrease (depending on situations) the revenue generated by taxes (for different brackets), but an increase in revenue generated by this acceptable, however, I am against the increase of rates A, B, etc as a result of this.

or

I am for tax simplification and closing loopholes, but an increase in the amount of revenue generated by this is unacceptable and taxes such be cut accordingly.

I am presuming you are meaning 1, but a couple of replies seem to indicate 2.

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Whole thing just sucks. The only entitlement reform that MIGHT pass is an increase for social security. It is the primary retirement income of a majority of Americans. Cutting it is simply not going to happen.

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About SS - if it's currently paid for by payroll taxes + surpluses, and backed up by special federal debt:

Then would it be OK to dismiss the Trust-Fund securities as 'insignificant debt'? My understanding is that this debt only represents a commitment by the federal government to pay for the outlays of another part of the federal government should that part experience shortfalls and become unable to pay through internal means. In other words, no money is being lost or even moved around for these trust-fund securities (besides that tax-surpluses are added to the federal budget in exchange for them), as they can only be redeemed in the event of a program-deficit - is that correct?

Similar question for Medicare.

If the above is basically on-track, then should we at all concerned about this sort of "intragovernmental debt", in itself? That is, leaving aside the issue of the long-term ability of these programs to service pay-outs to eligible persons...

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The defense budget will probably be slashed -- it likely needs to go back to 2% GDP as opposed to the 6-8 level we've been doing.

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While it's easy to come to the conclusion that the military should cut on contracting, payroll for admin and foot, and procurement, and become leaner, more dynamic and flexible, and focused on R&D, responsiveness, and scalability - what of the hundreds of thousands of weapons systems currently mothballed, the tens of thousands of tanks and so-on? All that hardware seems to require a huge amount of labor and money just to be maintained.

On one hand, we don't want all that stuff to just fall apart, else we might as well scrap it now. On the other, the world doesn't really have the demand or even the funds to buy up all this excess - and it's against our humanitarian and nat-sec interests to unload so much hardware in the contemporary world anyway.

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if we are going to pay down the national debt by a couple of percentage points each year

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I think for the current world-system, we don't actually need to get on any sort of deleveraging track, as long as we can demonstrate sustainable deficit-management. We've seen so far, it seems to me, that a few years of political incontinence would prove at least as detrimental to our debt-situation as a generation of 5+% deficits, as long as those deficits were seen to be marginally-considered or not a gross abuse of hegemonic privilege to enrich our population...

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Originally Posted by Seamus Fermanagh

The defense budget will probably be slashed -- it likely needs to go back to 2% GDP as opposed to the 6-8 level we've been doing. That will necessitate a reduction in commitments, a return of U.S. forces to U.S. territory save for a very few exceptions etc. We simply cannot afford to police the world and both balance our budget and pay down the debt.

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Sorry, I just saw this when someone else called it out. Where are you getting your numbers? Referring again to me link using OMB data from the White House's website, national defense spending has averaged about 5.4% of GDP. In 2012, it was 4.3%. Lower than mean.

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Originally Posted by Lemur

And don't touch defense.

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There's more of an isolationist bent to the TEA part than Lemur realizes. (Link: Tea Party activists: Bring on defense cuts)It's the old guard GOP who won't hear anything of defense cuts, and it is they that remain pro-intervention. I think if we're going to take some small step back from the "world police" role we took on for ourselves, there is room for defense cuts. But saying we're going to cut it by half or even more is just unrealistic. We'll have the entire defense budget tied up paying benefits to veterans.

Also, thank you @Lemur, I had forgotten about the proposal to change how SS COLA adjustments are calculated. It's worth noting that the average savings from that probably worked out to $13bn/yr. Not quite chump change, but it doesn't address the problem.... also, how did Obama's own party take to that plan? I don't think it was the nasty tea party that torpedoed it.

While I'm on the subject... Social Security cuts are becoming more and more necessary, but I don't like them. They really do screw old people. Social Security is already a bad investment. Depending on your marital status and longevity, you might see something like a 2-6% return on your "investment". If instead, they could have invested that money in a S&P500 index fund, they would have seen a 10+% ROI. Cutting it's already paltry returns is just screwing them more.

For my part, I'd gladly take a haircut on what I've paid into SS thus far if I could take that 12+% of my income and invest it instead.... but it's not going to happen.

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Are we defining "tax increase" using the Grover Norquist formula? Are you saying that a radically simplified tax code is illegitimate if it produces more revenue? Or what?

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I'm saying that I'm all for us stopping using the tax code for social engineering. Stop using it to encourage people to make dumb decisions. But, when you're looking at closing loopholes and ending exemptions, you're walking through a mine field. People who have come to count on them stand to get hammered hard when they go away. So, we should look at lowering actual rates where it makes sense to offset the income people will lose when their deductions go away.

I don't think there's a lot of revenue to be had on the front-end with tax reform. But, streamlining the code could recover a lot of lost productivity which could instead be used to grow the economy and increase revenue on the back end.

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Originally Posted by Xiahou

But saying we're going to cut it by half or even more is just unrealistic. We'll have the entire defense budget tied up paying benefits to veterans.

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Originally Posted by Wiki

The VA 2014 Budget request for 2014 is $152.7 billion. This includes $66.5 billion in discretionary resources and $86.1 billion in mandatory funding. The discretionary budget request represents an increase of $2.7 billion, or 4.3 percent, over the 2013 enacted level.

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And Medical Care takes up $55 billion of the discretionary budget. So your point is somewhat exaggerated.