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10 votes (35.71%)
18 votes (64.28%)

28 members have voted

thecesspit
thecesspit
Joined: Apr 19, 2010
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July 15th, 2011 at 11:49:39 PM permalink
Quote: Calder

thecesspit: I don't contend that raising taxes was easy, just that it's politically easier to than cutting services. There is some resistance to tax increases in the Senate from those senators up for re-election in 2012. Of course, they haven't passed a budget since the last election, either.



It would -seem- from the news reports that the prevailing mood is to cut services (and hence government spending) over raising taxes. This might be only the impression being served me by Fox, CBC, the BBC and USA Today. I'm willing to be told otherwise.

Some here would contend that a tax rate rise will always result in a reduce tax take.

I am not convinced of that, nor am I convinced of the argument that raising taxes back to the pre-Bush cut level would stymie growth in the US. Nor would a slight raise in the base line lending rate cause the economic world to fall apart. Nor would I disagree with those who which to limit government spending to some extent... it's clear the US can't keep spending at the current rates. What you cut, and how... I'll take a pass, I don't read enough or live enough in the US to know, I'm more interested in the general macro economics right now.

But that's just ideas, I'm not economist, nor do I play one on TV.
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
odiousgambit
odiousgambit
Joined: Nov 9, 2009
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July 16th, 2011 at 3:09:02 AM permalink
To defend the WoO, it's worth taking a jab at folks who have a fantasy about the SSTF. It is certainly true that the SSTF money has not just been turned into cash and stuck in a vault. Then again, when you deposit your money in your local bank in an interest bearing account, the same thing is true. Unless you stick your cash in a safety deposit box, it has been taken and used, just like the SSTF money is taken and used. For banks, it is well known that one thing that must never happen is a Run on the bank; if enough depositors want their money at the same time, it is simply not there. The SSTF money is also "not there" like a lot of folks think, and you can make that sound dire if you like. Hey, Obama is currently threatening to delay SS checks to the old folks , something he would never ever do sure enough!

Well, maybe if he could be absolutely sure the Republicans would be blamed.
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
RonC
RonC
Joined: Jan 18, 2010
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July 16th, 2011 at 4:59:50 AM permalink
I don't think the US would actually default very soon if the debt ceiling is not raised BUT it would cause turmoil. There is enough revenue coming in to pay the debt each month but there isn't enough revenue coming in to pay for all of the things we have said (through budgets, entitlements, etc.) we would pay for each month. We have a spending problem--we spend more than we take in each month. We can either cut spending or raise taxes so that we don't continue increasing our debt but continually raising the debt ceiling has not "fixed" things and raising it this time won't fix anything, either.

Would we default on debt eventually if there is no increase in the debt ceiling, increase in revenue, or decrease in spending? Once we couldn't delay payment dates on other items any further and we continued the overspending, it is possible. We won't default or miss any payments on August 3rd unless a politician makes a decision to do so.

Our largest problem is that are elected officials are not citizens serving their country--they are mostly politicians serving their own needs. None of them seem to want to do a good job and go back to being country farmers or lawyers...they all aspire to higher office or, at the very least, amassing power by staying in office. We happily oblige them by consistently electing them again and again even if they are ineffective or seem corrupt. The negotiations now are not as much about the future of the country (which they should be) but about which party "wins". There is one thing sure about that formula--WE lose.

The answer may be to make serving in Congress a bit of a pain. I know we can't make them ride a horse and buggy to Washington (well, we could....hmmm...) but taking away the perks and making them work for us would change a lot of things. Longer work periods with less cleverly disguised campaign trips, lower benefits, etc. just might be the answer.
AZDuffman
AZDuffman
Joined: Nov 2, 2009
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July 16th, 2011 at 5:37:28 AM permalink
Quote: s2dbaker

The SSTF can sell those bonds on the open market and get the money it needs to pay its obligations to seniors.



No, the SSA cannot do this. The "trust fund" is invested in a special issue of Treasury Bonds issued only to the SSA and unlike most Treasurys they are redeemable "on demand" as funds are needed to pay SSA obligations. They cannot be sold to the public. The Treasury would be crazy to sell securities "redeemable on demand" to anyone but another part of the government.

The kicker is everyone said what a joek the Trust Fund was in the first place. Everyone knew the Feds were just sepnding the money on daily running of the government. It was clear this was a sort-of "baloon payment" that would come due.

Lets look at it. First Baby Boomers were born in 1946. 1946 plus 65 equals 2011. No acturial math needed here (no offense, Wiz) to see what happened.

Over the years, Bush43 was the only politician with the guts to propose ending the Ponzi-elemenmts of the scheme by letting you put part of the funds in a private account. Sadly the establishment as usual went on the attack without proposing their own soultion other than yet more taxes.
All animals are equal, but some are more equal than others
AZDuffman
AZDuffman
Joined: Nov 2, 2009
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July 16th, 2011 at 5:59:48 AM permalink
Quote: thecesspit

Up in Canada. I'm not denying that Democrats want to raise taxes, I'm just saying if it was easy they'd have passed already. It's obviously not easy to raise taxes, due to a variety of reasons.




Yet the tax cuts happened, right? Meaning it's possible to cut taxes (this doesn't surprise me...).

I'm only taking issue with the statement it's easier to raise taxes than cut services. I'm not convinced either are easy if the prevailing will of the parties in power are against them. This isn't meant to be a party political statement, and I'm making no value judgement on whether taxes should be raises, spending cut or the entire eastern seaboard of the US sold to China in return for cancellation of the debt.



Didn't realize you were north of the Border (unless Detroit is across the river from you lol.) Sorry if my relpy sounded scolding on civics, but I do get tired of people born here in the USA who probably couldn't come close to passing the citizenship test. Anyhow, the reason raising taxes is easier than cutting spending is that when you cut spending the howl of protest is louder than the groan of raising taxes. The headlines are premade: "___________ proposes cutting spending on __________, women and minorities expected to be hardest hit."

As to the eastern seabord, NY, ME, RI, and MA are almost communist already so I doubt they would notice the difference up there.



Quote:

Cunning. Very cunning. I don't expect anyone to bite the bullet and let them all expire.



Cunning by luck. The GOP was forced into making it an expiring package of cuts. Logially it was written as one law that all expires at once. GOP backed into a very tight conrer procedural-wise got to say, "we already won the election, we are not extending just part of it. You want our cooperation after running us over since 2008? Drop dead." But intentional? Like they said about New Coke, "we are not that smart and we are not that stupid."
All animals are equal, but some are more equal than others
thecesspit
thecesspit
Joined: Apr 19, 2010
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July 16th, 2011 at 7:20:20 AM permalink
I'm not in Windsor, but I am south of the border :)
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
timberjim
timberjim
Joined: Dec 5, 2009
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July 16th, 2011 at 8:07:48 AM permalink
Quote: s2dbaker

Go to town! The SSA site posts all of that information for public consumption:
Social Security Investment Portfolio



Interesting information. I guess we see things differently. My idea of an "investment" is not giving my money to an entity that is spending over $1,000,000,000,000 more a year than it is taking in, while showing no inclination to reign in spending, and trusting them to be fiscally sound.

By your statements, I must assume you trust the government as to what they say and to be good money managers. I do not.
Wizard
Administrator
Wizard
Joined: Oct 14, 2009
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July 16th, 2011 at 8:30:52 AM permalink
Quote: AZDuffman

A question for Wiz--when you did acturial predictions was it mostly the aging of the population or did the economy come into play. And for that matter, how much did you change your predictions for a slowing economy causing more people to take partial benefits early? Just curious.



Our office took under consideration both economic and demographic factors. The outlying assumptions we used for such things were provided by the Board of Trustees, which oversees the Social Security program. From there complicated programs estimated thousands of pages of statistics about all kinds of things pertaining to Social Security for a 75 year period. It has not unusual for outsiders to say that the assumptions we were given are too rosy. One such skeptic is former chief actuary A. Haeworth Robertson, author of Social Security: What Every Taxpayer Should Know.

The office was divided roughly in two between "short range" and "long range." The long range actuaries were the ones to do the 75-year projections. When you hear such things as the year the trust funds will be exhausted, it comes from them. Short range also helped in the long-range projections, but did a host of other things as well. One of such responsibilities was determining 10-year projects of the effect of any change in laws affecting Social Security. That was my job. My particular area of specialty was changes in the law concerning benefit or taxation calculations.

Quote: s2dbaker

This is sad because I think the Wizard is a smart person. The Social Security trust fund does indeed exist. It is currently invested in US Treasury Securities. In other words, the United States Government has already borrowed the money from the Social Security Trust Fund and the SSTF is holding the Bonds as an interest bearing investment. Since the Constitution of the United States states that the debts and obligations of the US shall not be questioned, there is absolutely no reason to believe that those bonds will not be repaid. The SSTF can sell those bonds on the open market and get the money it needs to pay its obligations to seniors. The problem is that if the debt ceiling is not raised, then those bonds that will come due will be in default making their value significantly less than in normal situations. So Mr. Wizard, if you were just stating things that way as a shortcut then I apologize for splitting hairs but to say that the "So Called" SSTF doesn't exist is simply untrue. It's currently invested in the safest security the world has ever known.



I don't disagree with any of the facts provided. Social Security bonds exist just as much as the ones that may be sitting in your safe deposit box in the bank. My point is that they are based on the hope that a future taxpayer or bond buyer will produce the money when the owners wants to cash the bond. So far, this has always happened. My point is there is no vault somewhere full of money or other asset to cover these bonds. I'm not trying to argue that the bonds will not be repaid. I am arguing that in looking at the overall strength of the national economy we can't count the trust funds as assets, because we owe that money to ourselves.

To put it another way, if you look just at Social Security, yes it does hold a lot of bonds. However, if you step back, and look at the whole economy, those trust funds are offset by the obligation and burden of paying them.
It's not whether you win or lose; it's whether or not you had a good bet.
Calder
Calder
Joined: Mar 26, 2010
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July 16th, 2011 at 10:03:57 AM permalink
Quote: thecesspit

It would -seem- from the news reports that the prevailing mood is to cut services (and hence government spending) over raising taxes. This might be only the impression being served me by Fox, CBC, the BBC and USA Today. I'm willing to be told otherwise.



I wish the president shared that mood.
Wavy70
Wavy70
Joined: Nov 3, 2009
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July 16th, 2011 at 10:24:47 AM permalink
Quote: AZDuffman


As to the easternb seabord, NY, ME, RI, and MA are almost communist already so I doubt they would notice the difference up there.



It's good to see nothing but useless rhetoric seems to come from Duffs Keyboard. I do not think he is an idiot I just think he can't cease posting idiotic things. I often wonder if he is doing a parody like Colbert.

Once again what started out a thoughtful debate has been turned by AZ to a political rant. Yes Everything bad was from the Democrats and everything good comes from the GOP. Signal to noise issue as usual.
I have a bewitched egg that I use to play VP with and I have net over 900k with it.

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