Investors now see Australia as a better place to invest than the USA or Germany.

[Gromnir]

what makes it even more complex is the disparity 'tween states. yeah, in every state you gots kids going to college and relying on fed financial aid, so all states would be seeing some wailing from college students, no? but ca gets something approaching $80 BILLION per year for health care benefits related to the poor (again, recall that nearly half those poor is children.) fully 1/2 of all monies spent by the state o' kansas is fed dollars. new mexico, maryland, virginia, tennessee, and souh carolina is all in similar situations... if not worse. conversely, new jersey didn't appear to be all that immediate worried 'bout a fed default as it does not rely heavily on money from washington. most states would suffer some hurt related to med, school and road spending, but not all, and not equal.

 

but yeah, there is an enormous debt/spending problem and perhaps a small collapse now might be preferable to the one looming in the future a decade or so away. the present crisis were mostly smoke and mirrors, and the bond market is showing that the near-future o' the US economy ain't near as fragile as some suggest, but there is big problems on the horizon and it is very difficult to see any simple solutions.

 

oh, and just to be clear, all things being equal, Gromnir is much in favor o' reducing fed spending and involvement in the daily lives o' ordinary citizens. the problem is how to manage such reductions w/o wrecking an economy that appeared to be recovering. make cuts right now also means cutting services that some folks (probably the most needy) rely 'pon, and jobs that is already in short supply.

 

HA! Good Fun!

Edited August 3, 2011 by Gromnir

[Nightshape]

oddly enough, carlin is actual relevant in US policy making... if only as a footnote. fcc v. pacifica taught us that school-aged kids gets the "cute-case" exception to ordinary con law jurisprudence. the retarded, amish, and school kids is among the select categories o' peoples that all needs extra protection. carlin's "filthy words" resulted in the creation o' quasi-protected status for indecent speech... to protect kiddies.

 

HA! Good Fun!

 

Its Bulls***

Edited August 3, 2011 by Nightshape

[Humodour]

Just to interject here. Most of you know where I stand on this stuff. Government is necessary and not an evil thing so long as it remains within it's boundries. It begins to get into trouble when it gets it's hands into things beyond it's scope, like health care, social welfare, etc. The issue really is that it is not capable of doing them well and the cost of doing them poorly is ruineous which I doubt anyone will disagree with.

 

I disagree entirely with that. Most of the Western world exists as a counter example.

Edited August 4, 2011 by Krezack

[Nepenthe]

Just to interject here. Most of you know where I stand on this stuff. Government is necessary and not an evil thing so long as it remains within it's boundries. It begins to get into trouble when it gets it's hands into things beyond it's scope, like health care, social welfare, etc. The issue really is that it is not capable of doing them well and the cost of doing them poorly is ruineous which I doubt anyone will disagree with.

I dunno, I think the fundamental problem with healthcare was that your private sector wasn't handling it too well, either.

[Humodour]

Just to interject here. Most of you know where I stand on this stuff. Government is necessary and not an evil thing so long as it remains within it's boundries. It begins to get into trouble when it gets it's hands into things beyond it's scope, like health care, social welfare, etc. The issue really is that it is not capable of doing them well and the cost of doing them poorly is ruineous which I doubt anyone will disagree with.

I dunno, I think the fundamental problem with healthcare was that your private sector wasn't handling it too well, either.

 

America also had one of the largest amounts of government spending on healthcare per capita in the world under George Bush. And yet it didn't (and still doesn't) have anything near resembling universal healthcare.

 

Compare that to other Western states with low levels of public spending on healthcare which none-the-less have high-quality universal healthcare.

 

So it is extremely obvious that governments certainly can administer relatively effective and efficient universal healthcare programmes because there exist counter-examples of all shapes and sizes around the world.

[Walsingham]

IIRC from our last discussion I settled on two points:

 

1) Private health care in the US costs significantly more than anyone else's government managed healthcare, but isn't proportionately better

 

2) Gfted1 made what I thought was an interesting and compelling point: that the US government is uniquely rubbish for various reasons, and wouldn't be able to match the performance of other governments managed schemes.

[Enoch]

IIRC from our last discussion I settled on two points:

 

1) Private health care in the US costs significantly more than anyone else's government managed healthcare, but isn't proportionately better

 

2) Gfted1 made what I thought was an interesting and compelling point: that the US government is uniquely rubbish for various reasons, and wouldn't be able to match the performance of other governments managed schemes.

Well, on point one, the problem is that the current U.S. healthcare system (and even the pre-PPACA one) was muddied enough for both sides to blame the other. By which I mean that, while most of it is privately run, significant portions are paid for publicly (Medicare for the 65+ crowd, Medicaid for the poor, Tricare & VA for military and veterans, etc.), and all the privately run stuff has some level of both state and federal regulation. So, everyone knows the system sucks, but the people on the Right blame the government interference for all the problems, while the people on the Left blame the healthcare providers and drug companies. Which means that it gets argued about in the same "shouting talking points past each other and never bother to get into serious objective analysis of data" manner as most political arguments in the States, and any attempt to fix things gets heavily watered down by the other side.

 

Plus, the truly politically powerful people weighing in on the issue are the ones who don't have any incentive at all to keep costs down (Medicare beneficiaries, healthcare providers, insurance companies, and drug companies)-- the people who tend to get hit hard by those costs are either relatively low-influence (lower-middle-class types) or don't make it a major part of their efforts to influence policy (big employers who offer employee health plans, but who generally exercise their political influence in areas more central to their business operations).

Edited August 4, 2011 by Enoch

[Gfted1]

Can anyone point out to me even one US government program thats operating in the black?

[Tale]

By that do you mean one that makes a profit? Or one that simply operates within its budget? Because one of those doesn't make sense.

 

The former would require them to sell things. I hear bad things about the latter, such as "if you don't spend it, you lose it," but won't pretend I know anything intimate.

[Enoch]

Can anyone point out to me even one US government program thats operating in the black?

Yeah, as Tale points out, it's not a particularly apt analogy. For the most part, the benefits of government programs are non-monetary. And the parts that do generate monetary revenues are generally the parts that do so by exercising some inherently governmental activity wherein the main costs are non-monetary. (The IRS brings in a hell of a lot more money than it spends.)

 

Anyhow, pulling out my handy Financial Report of the United States Government for Fiscal Year 2010, the Treasury Department reported a few government entities whose earned revenue exceeded their gross cost of operations. Those included the Postal Service, the Tennessee Valley Authority, the Securities and Exchange Commission, the Import-Export Bank of the United States, and the Farm Credit System Insurance Corporation. If you drill down to sub-components of agencies (the consolidated Financial Report only lists the big Departments and those smaller entities that are independent of them), you'll find some other programs and entities. For example, although the overall Department of Commerce spends more money than it brings in, Patent and Trademark Office, which is part of Commerce, makes a profit every year.

[Gfted1]

"Operating in the black" was a poor choice of terms, I should have said operating within budget. With that out of the way its good to see a few competent agencies. Unfortunately, most of the big ones are deeply flawed and probably wont be around when I become eligible.

 

Social Security? check

Medicare/Medicade? check

 

Also, I was shocked to see Enoch report that the Post Office turned a profit. Every article Ive read stated they are hemorrhaging billions per year, may need to cut delivery to 3 times a week and propose closing 3700 post offices across the country. Nice to see they rebounded since last week.

[Calax]

Just gonna pop in and say that in a recent interview, Austan Goolsby stated that he thinks that what the white house is angling for currently is the current deal for now, and when the congress gets back in session then he'll force the tax issue to raise revenues.

[Enoch]

Yeah, I'm not sure what is going on with the USPS. I was just reading the Statement of Net Costs information in the report I linked, and they showed a profit. That didn't really jive with the vague impression I had of their overall performance, either.

 

 

As to "within budget," that gets policed reasonably well. Agencies are legally required to monitor their spending and report any expenditures (or obligations to expend) in excess of the amount approved by law. This is called the Antideficiency Act, and any violations have to be reported to Congress, which has the Government Accountability Office post them online. And Congress takes agencies exceeding their appopriations pretty seriously.

 

Agencies are also required to produce financial statements and have them audited by independent auditors, who, among other things, test controls over Antideficiency Act compliance. The big caveat here is the Department of Defense. The requirement for them to produce an audited financial statement has been in effect since 1991, but they still cannot produce statements with sufficient supporting data for auditors to state an opinion on their reliability. They currently have a big plan under way to be auditable by 2017.

[Guard Dog]

This just in, US borrowing has now reached 100% of the GDP. Note, that is not spending, that is just borrowing. When Obama took office it was arounf 70% or thereabouts. Oh, and by the way the stock market took a billion dollar plunge today. Now that miserable keynsian SOB of a President wants to raise taxes hoping that will increase revenues, heedless of how higher taxes depress economic growth. Not that there is any of that to speak of. He's putting the pedal to the metal with the edge of the cliff in sight. This is why I got out of the stock market all together and started buying gold when it looked like he was going to get elected. I started buying when it was just shy of $900/oz. Today it is $1654 and predicted to hit $2k by years end. It seems a lot of folks do not expect the dollar to be worth a rats turd by the end of his administration. Actually, I don't know why I hate him so much, his incompetence is making me a fortune.

 

To quote Krez, Australia & Germany do look like better investments for business because they are not hell bent on self destruction.

 

http://news.yahoo.com/us-aaa-rating-still-...-204040123.html

[Enoch]

This just in, US borrowing has now reached 100% of the GDP. Note, that is not spending, that is just borrowing. When Obama took office it was arounf 70% or thereabouts.

You're confusing your terms there somewhat. U.S. aggregate debt is around 100% of GDP. "Borrowing" usually refers to the annual fiscal shortfall-- the difference between what the government takes in and what it spends. It's something of a "no duh" point that total debt is higher than it was during the Bush years-- every year the government doesn't run a surplus, it goes up. And there haven't been any surplusses since right around the first round of Bush tax cuts.

 

As for how the Obama folks are handling fiscal and economic matters, generally, I can't say I'm pleased. But the chief problem is that, when push comes to shove, they're basically acting as a 3rd term of GWB would. (Which, in hindsight, should've been obvious when they named their Treasury Secretary.) Instead of making a serious attempt at fixing the Wall Street issues that brought things down in '08, they've stuck with the bankers and tried to re-inflate the debt bubble that popped (debt, in this context, referring to corporate and consumer debt). For all the complaining, the Dodd-Frank Act was a half-hearted wave in the direction of "reform"-- there was a moment where it was possible to do something useful, and they let it pass.

 

That said, the government is in a bind right now, as there really aren't any good options (and haven't been since the '08 crash became inevitable around '05 or '06). Increasing federal debt will hurt the economy. Raising taxes will hurt the economy. Cutting spending will hurt the economy. Letting the Fed quietly inflate the dollar to reduce the real value of the nation's debts will hurt the economy. It's a question more of relative efficacy of these options and of whose ox gets gored. As I've said before, America is looking somewhat screwed over the course of the next decade-- we'll end this with a lower standard of living than we started with. But the rest of the developed world is looking more screwed. The dollar may end up being worth $0.30, but everything else will be worth $0.10.

[Guard Dog]

This just in, US borrowing has now reached 100% of the GDP. Note, that is not spending, that is just borrowing. When Obama took office it was arounf 70% or thereabouts.

You're confusing your terms there somewhat. U.S. aggregate debt is around 100% of GDP. "Borrowing" usually refers to the annual fiscal shortfall-- the difference between what the government takes in and what it spends. It's something of a "no duh" point that total debt is higher than it was during the Bush years-- every year the government doesn't run a surplus, it goes up. And there haven't been any surplusses since right around the first round of Bush tax cuts.

 

As for how the Obama folks are handling fiscal and economic matters, generally, I can't say I'm pleased. But the chief problem is that, when push comes to shove, they're basically acting as a 3rd term of GWB would. (Which, in hindsight, should've been obvious when they named their Treasury Secretary.) Instead of making a serious attempt at fixing the Wall Street issues that brought things down in '08, they've stuck with the bankers and tried to re-inflate the debt bubble that popped (debt, in this context, referring to corporate and consumer debt). For all the complaining, the Dodd-Frank Act was a half-hearted wave in the direction of "reform"-- there was a moment where it was possible to do something useful, and they let it pass.

 

That said, the government is in a bind right now, as there really aren't any good options (and haven't been since the '08 crash became inevitable around '05 or '06). Increasing federal debt will hurt the economy. Raising taxes will hurt the economy. Cutting spending will hurt the economy. Letting the Fed quietly inflate the dollar to reduce the real value of the nation's debts will hurt the economy. It's a question more of relative efficacy of these options and of whose ox gets gored. As I've said before, America is looking somewhat screwed over the course of the next decade-- we'll end this with a lower standard of living than we started with. But the rest of the developed world is looking more screwed. The dollar may end up being worth $0.30, but everything else will be worth $0.10.

Where do you think the value of real commodities like gold end up? That is a subject near and dear to my heart because contrary to all the advice I've gotten over the years I really do have all my eggs in that one basket. But so far it's been a good basket to be in. I don't like the fact that I am essentially betting on the US economy to wreck but that has been happening in slow motion for the past four or five years and it seems the political leaders do not have the will to stop it.

[Gorth]

Frankly, reading the latest news (as of a few hours ago), with stock markets plummeting, commodities too, I would probably start considering canned tuna a viable investment for a post collapse society. Only half joking

[Calax]

Well, Given that the market plunged with the "we're just cutting spending" gambit, I'm willing to bet if they'd shown a tax increase as part of the deal the market wouldn't have dropped nearly as much. Mainly because the average american wouldn't feel that the politics in washington were being handled by a set of 6 year olds arguing over the pink ball, and the fact that it would be a sure fire way to start dropping the overall debt by 2017(?). The drop was like 2 billion total as of the deal, but with tax increases they could pretty fast get it under control according to projections.

[Guard Dog]

Well, Given that the market plunged with the "we're just cutting spending" gambit, I'm willing to bet if they'd shown a tax increase as part of the deal the market wouldn't have dropped nearly as much. Mainly because the average american wouldn't feel that the politics in washington were being handled by a set of 6 year olds arguing over the pink ball, and the fact that it would be a sure fire way to start dropping the overall debt by 2017(?). The drop was like 2 billion total as of the deal, but with tax increases they could pretty fast get it under control according to projections.

Raising taxes means less revenue for business and consumers. If I have less money I will buy less stuff. If I buy less stuff the companies and retailers I buy from earn less, and on top of that their if operating costs went up because of a tax increase it's doubly bad for them. If a business has it's operating costs increase it will raise the price of it's product if possible, or retrench (meaning fire employees) if they can't. Those employees were tax payers while they were employed, now they are not. Raising taxes does increase revenue in the short term up to a point. But it becomes self defeating real quick. It's called the Laffer Curve and it's been around for a long time. There is a great quote attributed to Winston Churchill "For a nation to try to tax itself into prosperity is like a man standing in a bucket trying to lift himself up by the handle.".

[Enoch]

I don't like the fact that I am essentially betting on the US economy to wreck but that has been happening in slow motion for the past four or five years and it seems the political leaders do not have the will to stop it.

I'd content that they don't have the ability. The same broad-scope sequence of events would have played out nearly identically had McCain won the '08 election with large GOP majorities in both houses. Probably earlier and with somewhat less federal debt (I'm thinking of the Recovery Act, here), but otherwise not all that different.

 

As to Gold, it's value is just as ephemeral and confidence-based as paper currencies are. It's only the tradition of it as an inflation hedge that has it riding so high. That might last, but it might not.

 

Well, Given that the market plunged with the "we're just cutting spending" gambit, I'm willing to bet if they'd shown a tax increase as part of the deal the market wouldn't have dropped nearly as much. Mainly because the average american wouldn't feel that the politics in washington were being handled by a set of 6 year olds arguing over the pink ball, and the fact that it would be a sure fire way to start dropping the overall debt by 2017(?). The drop was like 2 billion total as of the deal, but with tax increases they could pretty fast get it under control according to projections.

Well, you can go nuts trying to figure out the "why" of equities markets. But most informed parties are calling the confluence of yesterday's drop and the debt ceiling deal as mostly coincidence. The recent reports on U.S. GDP (and the antipated report on U.S. employment tomorrow) coupled with a new round of nervousness about Eurozone debt issues are more at the heart of this particular downturn than the puppet show in Congress.

 

From a longer-term point of view, the game that the Fed (and, to a lesser extent, the Administration) has been playing has been staked largely on keeping stock markets relatively high and hoping that this spills over into consumer confidence (which is what actually drives the real economy). But without any real change in the ability of consumers to spend (i.e., employment, wages, consumer credit, and residential housing appreciation), pinning hopes on keeping the Dow high was probably never going to work. It was the approach that best served the interests of the big Wall Street banks, though, and that has been what drives the policy for the last 20 years. Today's drop was simply a sign that trying to fix things by re-blowing an already-burst bubble isn't going to work.

[Enoch]

Well, Given that the market plunged with the "we're just cutting spending" gambit, I'm willing to bet if they'd shown a tax increase as part of the deal the market wouldn't have dropped nearly as much. Mainly because the average american wouldn't feel that the politics in washington were being handled by a set of 6 year olds arguing over the pink ball, and the fact that it would be a sure fire way to start dropping the overall debt by 2017(?). The drop was like 2 billion total as of the deal, but with tax increases they could pretty fast get it under control according to projections.

Raising taxes means less revenue for business and consumers. If I have less money I will buy less stuff. If I buy less stuff the companies and retailers I buy from earn less, and on top of that their if operating costs went up because of a tax increase it's doubly bad for them. If a business has it's operating costs increase it will raise the price of it's product if possible, or retrench (meaning fire employees) if they can't. Those employees were tax payers while they were employed, now they are not. Raising taxes does increase revenue in the short term up to a point. But it becomes self defeating real quick. It's called the Laffer Curve and it's been around for a long time. There is a great quote attributed to Winston Churchill "For a nation to try to tax itself into prosperity is like a man standing in a bucket trying to lift himself up by the handle.".

Eh. It's a feedback loop in the system. The effects that you describe certainly happen, but there isn't much evidence that they actually will overwhelm the original "gov't draws in more revenue" signal in most circumstances.

 

And the exact same thing can be said for decreasing government spending. It's simply a question of where the feedback loop is weakest and whom you'd like to bear the burden of a government lowering its annual deficits.

Edited August 5, 2011 by Enoch

[Hurlshort]

So what exactly are the tax rates right now? Last year someone told me they were lower than they have been in about 35 years. Is that true?

[Calax]

So what exactly are the tax rates right now? Last year someone told me they were lower than they have been in about 35 years. Is that true?

Simply, yes.

 

CAPTAIN WIKI SAYS!

 

http://en.wikipedia.org/wiki/Income_tax_in...tes#1930_-_1980

 

in 1980 for the lowest income bracket was a base tax of 18%

 

Right now, it's slightly smaller, but it's 10%

 

Basically right now it's broken down into

 

10% 15% 25% 28% 33% 35% while bin 1980 (according to the page linked) if you earned over 250k you had a 70% tax rate.

 

Right now our taxes are lower than the Reagan era, and the reversal of the bush cuts would put us at a tax level akin to 1994 (I think) under Clinton which were higher.

 

 

Also, if we don't raise taxes, and default on all our debts... we can't pay anyone on the government payroll (Including the US Military), and the dollar is worth crap almost instantly (this is, again, according to Goolsby in an interview with John Stewart). I personally don't want to be paying 20 bucks to buy a candy bar.

[Gorgon]

I would be buying fur coats if I paid 10-35%. Don't really need fur coats, but I could totally buy them. If I paid somewhere in the middle, say 20%, I would only have to work a few days a week to stay afloat. We start at 48% and the highest bracket is 60- something percent.

[Gorth]

My effective tax rate wouldn't really be any different (compared to my current tax rate) if I were to use the numbers at the end of that wiki link.

 

I wonder why there is a separate group for 'Single' and 'Head of Household'. I'm single AND head of my own household, do I get to pick which one I want to use?