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The Dooming Defecit Looms Large

Economy Deficits 2004

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#1 Gefiltefishmon

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Posted 29 April 2004 - 09:44 AM

This was actually going to be a response to Handmaidens thread but I thought it would need to be seperated  - it's a bit off her topic  :)  So I started one......

Our economy is heading into a nosedive from it's "Golden Age" to..... What? Thirld world status.

WHY?

There are certain programs (for instance Social Security) which have not been managed effectively by Democrats OR Republicans. Bush Sr was not the first to raid the Social Security trust - but he was the first to suck it dry (to the tune of about 1.25 trillion). The Clinton adminstration paid a LOT of lip service :eh: to recovering those funds, but did essentially nothing about it, even with all time high budget surpluses (which the Republican Congress managed to spend and Bubba signed off on). The current Bush administration didn't just ignore the problem - they rammed through the biggest tax cut in history and may have actually succeeded in causing entitlements eventual destruction (which, I, Personally, believe was their goal in the first place). Conservatives (well at least this administration, well actually specifically, Dick Cheney) hate entitlement programs and without adequate funding the ones we have now cannot be sustained, let alone any additional "liberal programs". Social Security and Medicare are both doomed - and no matter how much we all want them to be fixed, and no matter how much rhetoric we all believe, nothing short of drastic tax increases will save them in their current forms. This is a fact which cannot be argued nor ignored. Both parties know and agree that these programs are going to go belly-up. And I'm not just talking out the side of my face - read this:

http://www.pbs.org/n...pt316_full.html

At the bottom of the page is a conversation with Alice Rivlin, Isabel Sawhill and David Brancaccio about this very subject where they show it's impossible to elliminate the deficit without raising taxes. I know these women, they are correct, I've seen their numbers. Nobody from either party is arguing about their numbers either - everyone agrees that this terrible thing will happen in the future - the question is when....

A total top/down re-organization with the ellimination of around ten thousand government jobs (trimming the beaurocracy) would be a good first step - but who's going to vote for that? Considering the size and power of the entrenched Gov't Workers Union? A means test for both would do a lot to offset their eventual demise (not stop, just push back) but the only way of doing that would be to put a greater financial burden on the wealthiest senior citizens. Personally, I think people with, oh, say more than a Million Dollars in investments should not be eligible for Social Security - that's the wealthiest 3%...These folks don't have much to do BUT vote so the chances of that passing are minute. The chances of being re-elected after voting for such a measure are also minute. Eventually the burden of supporting a larger and larger aged class will result in the erosion of our standard of living to the point where the "Middle Class" almost disappears entirely. We will be left with the rich elite and the working Poor - everyone else. This IS going to happen and nothing anyone has done or said is going to stop it. We ignore it at our own peril. All of the BS about leadership and terrorism and jobs and everything else is not going to mean squat if we don't fix these things now. I'm all for saving some fish in some stream in some unspoiled place, but frankly, that kind of liberalism is what got us into this mess in the first place. Our governemnt is like a kid with a credit card and has never been able to control it's desire to go shopping; it will destroy our way of life if left unchecked.

We pay less taxes than any developed industrialized nation - and it shows, we get far less too. Currently our "High School Graduates" run an IQ of around 113 - In Europe its 123 and in Japan 136 - We are dumbing down our country for the sake of , what?? We are dead last in percentage of college degree achievement. We are dead last when it comes to secondary education. We are not preparing our children to get the high paying jobs of tomorrow that they will need to support our system! We are the ONLY first world nation without total healthcare coverage. Our highway infrastructure is collapsing, bridges and dams are in disrepair. Our electric generation system is about to fall down and die and we do not have the industrial capacity to support what we have, let alone enough to support the growth predicted (Fuel, water, sewage, garbage etc etc etc). Why?

The answer is pretty simple actually. These industries have taken all of their profits and given them to their investors - who demand high returns - thus the wealth which was generated, instead of being used to upgrade equipment and improve facilities, was removed from the system and given to those who funded the system in the first place - the individual and corporate investors. So much wealth has been removed from these systems by the "Investor" and in fact the stock market has become such a "Means to wealth" that our entire monetary philosophy is in jeopardy. Kenesian theory aside - we are living through an era which will prove that freemarket economies without controls lead inexorably to disaster. Freemarket economies with controls - controls which determine how much of a companies money can be invested in stocks, cash reserves and especially TAXES, those could save us - but they are anathema to conservatives - "Why that might interfere with my profit!" - well yes. That's the point. Freemarkets are essential - but they must be regulated and controlled - because unfortunately everyone is not honest (Ken Lay, Dennis Kozlowski). Even if the SEC were to actually start ENFORCING the rules we have now - that would have an effect - but they are in essence a branch of the adminstration and if there is one thing the current adminstration does, its avoid pissing off it's money source AND they are cozy with many "shady" big businesses (Enron, Massey, Haliburton, ad nauseum) who now are either in litigation for breaking the law - or are under investigation for breaking the law - or are actively in court accused of breaking the law - a clear pattern of behaviour from these corporations and the administration.

Action is required now - not by Democrats or Republicans or Libertarians or Greens or Blues or Chartreuses by ALL OF US. If we do not come together and get rid of this hate and discontent (a fire restoked bianually by the likes of Ralph "I'm really a good guy" Nader, Karl "I'll DESTROY YOU!!!" Rove and Terry "HUH!?" Mcauliffe) we will all be like deck hands on the Titanic - helpless and powerless, spectators of our own civilizations demise for the sake of a few rich and powerful elites.

Thoughts? Suggestions? Observations?
"To know that you do not know is the best. To act from the pretense that you know when you do not know is a disease" - Lao Tzu

"From All, One; and From One, All" - Heraclitus

"Let me be clear: however the world's goblet turns there will always be those drunk on the wine of the Self" - Ghalib

"A 'politically savvy challenge to evolution' is as self-evidently ridiculous as an agriculturally savvy challenge to euclidean geometry would be." - Charles Pierce

#2 Godeskian

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Posted 29 April 2004 - 09:56 AM

2010, when the first of the babyboomers begin to retire in large numbers.

without trying to be alarmist, when the 75 million babyboomers stop paying into these programs, and start taking money out, the system will come crashing down, and America, the land of plenty, will begin to find out that it has tens of millions of people who live in poverty

I've posted on this topic before, and my opinion stands, Those of you living in the US have about 6 years to get ready to weather what i believe will be the biggest, and most devastating economic storm any western nation short of japan has ever seen.

Edited by Cyberhippie, 29 April 2004 - 09:56 AM.

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#3 Gefiltefishmon

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Posted 29 April 2004 - 10:14 AM

^ You got it CH! I think I need to move to Canada! Seriously what economic sense doe s it make to pay less on the income from capital than on the income from work? Why should the working man pay more tax than the wealthy investor? Our system is severly flawed!
"To know that you do not know is the best. To act from the pretense that you know when you do not know is a disease" - Lao Tzu

"From All, One; and From One, All" - Heraclitus

"Let me be clear: however the world's goblet turns there will always be those drunk on the wine of the Self" - Ghalib

"A 'politically savvy challenge to evolution' is as self-evidently ridiculous as an agriculturally savvy challenge to euclidean geometry would be." - Charles Pierce

#4 QueenTiye

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Posted 29 April 2004 - 11:57 AM

One reason to tax capital less is so that it pays to invest. This keeps our economy going - the persistent investment of capital. However, I'm generally of the opinion that there should be a flat tax, payable by everyone, without regard to who they are or how they earned their money.  I also believe that there are tons and tons of programs that can be aggressively eliminated, if the government shops them out for a short term - for instance - what would happen if some programs were shopped out to a private bidder with the best program, for say - 10 years?  That gives the government the right to rescind the contract after two and a half election cycles, should the privatization not be working well, and may possibly put in the hands of private entities some capital expenditures that the government can't afford to make any more.

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#5 Gefiltefishmon

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Posted 29 April 2004 - 12:31 PM

That's a good idea and I think there are tons of programs which would work under those conditions - many programs that deal with the homeless and the differently abled, Environmental programs, HUD programs - all of these could be better run by private enterprise (even not-for-profit enterprise).

We've got to do something though. Time's-a-wastin' and all of the current unpleasantness needs to be put aside and we all need to work together. It's a shame that the Democrats AND the Republicans seem to feel that right now it's an "All or nothing" proposal, and in many ways it is - either we ALL work together or we are going to have NOTHING!

:tribble:

On the taxing of capital gains - the philosophy that it gets re-invested was great when it was mostly institutional investors and such - but it isn't anymore - today a LOT of people have accounts in the market and a lot of people are seeing capital gains - and the government is not getting enough revenue from it. During the heady days of the Tech boom in the '90's One only has to watch TV for a few hours to see numerous seminars which one can go to in order to learn to "Shelter" capital gains, and "Deferr" having to pay the tax man - our tax system is so complex, so convoluted and so clearly structured to benefit the wealthy and screw the working poor that it's almost criminal. I think capital gains taxes should be DRAMATICALLY increased - because then, when the penalty for accruing the gains is steep enough - the money will be left in the company it came from and they can then continue to use it. The problem is that Capital gains taxes don't impact anyone but the wealthy and they can afford to buy the votes they want - so we all pay for them to play. That's why they call it "Other Peoples Money".

Edited by Gefiltefishmon, 29 April 2004 - 12:44 PM.

"To know that you do not know is the best. To act from the pretense that you know when you do not know is a disease" - Lao Tzu

"From All, One; and From One, All" - Heraclitus

"Let me be clear: however the world's goblet turns there will always be those drunk on the wine of the Self" - Ghalib

"A 'politically savvy challenge to evolution' is as self-evidently ridiculous as an agriculturally savvy challenge to euclidean geometry would be." - Charles Pierce

#6 Jid

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Posted 29 April 2004 - 01:08 PM

Gefiltefishmon, on Apr 29 2004, 09:12 AM, said:

^ You got it CH! I think I need to move to Canada!
I'd recommend Europe ;)

There's an old old saying in Canadian Economic circles:  If the U.S. Economy gets the sniffles, Canada's catches the flu. ;)

It'd be nice if we could diversify our trading, but, free trade is pretty much just too sweet a deal, for all its drawbacks.

Really, though, taxing is a double edged sword.  The problem with government taxation so far as I've seen, is that politicians are too damned hamstrung by their own (and their lobby groups') personal interests to strike a good balance between low enough taxation that will allow low and middle income earners to spend more, while allowing the higher income earners enough tax relief to save and invest.

A good management of this, combined with specific goals (like, say, keeping Social Security afloat), could go a long way in the future.
cervisiam tene rem specta

#7 emsparks

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Posted 29 April 2004 - 01:17 PM

Under the current conditions there is not going to be any working together. For those that the system works, it works very well, all too well, and they write the laws, and arenít about to give up their cash cows.

For anything to change itís going to take that economic melt down, of which you speak, a melt down thatís going to beat the socials security trust fund running out of money.

As to bloated government programs, thatís just another pipe dream. The government runs these programs; such as they are, because no one else can. In the history of privatization, more money and lives have been lost, then have been saved. Ever wonder about that so-called cleaning up of welfare that was a big thing during the Clinton years. Well it was a bust instead of getting the so-called cheats, it hurt the most needy. The statistics are there, their just neatly hidden. The best example is the mental health system in this country. Did you know that there are, by several orders of magnitude, more mentally ill in prison, then there are in mental hospitals, in this our beloved country.

As a point of rhetoric, and not personal rebuke, ďYour just noticing this now, where have you been for the last thirty years?Ē

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#8 Godeskian

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Posted 29 April 2004 - 01:40 PM

mostly growing up EM, at 23, i'm only just beginning to realise how precarious my economic position is.

Defy Gravity!


The Doctor: The universe is big. It's vast and complicated and ridiculous and sometimes, very rarely, impossible things just happen and we call them miracles... and that's a theory. Nine hundred years and I've never seen one yet, but this will do me.


#9 emsparks

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Posted 29 April 2004 - 01:55 PM

^^^
Iím a grown up, and let me tell you itís not what itís cracked up to beÖ
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#10 Godeskian

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Posted 29 April 2004 - 02:00 PM

chuckle. I'm beginning to find that out.

Defy Gravity!


The Doctor: The universe is big. It's vast and complicated and ridiculous and sometimes, very rarely, impossible things just happen and we call them miracles... and that's a theory. Nine hundred years and I've never seen one yet, but this will do me.




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