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CKA Uber
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PostPosted: Wed Jul 13, 2011 11:55 am
 


Psudo wrote:
I think the "lowering or not raising" issue is secondary to the effect on revenue -- revenues shouldn't be lowered when spending is so dramatically high, probably impossible to cut, and tax rates are already relatively low.

I feel like I'm repeating myself, but I think it makes more sense to negotiate an exchange rate -- "We'll allow $X in tax increases in exchange for $Y in spending cuts." Maybe include some trade of defense spending cuts for welfare spending cuts, too.


Cut defence spending?!? What, are you a Commie? :lol:


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PostPosted: Wed Jul 13, 2011 12:00 pm
 


America's low taxes are not enough to pay for their military and entitlement programs. No one really wants to cut the military or entitlement programs because of the short term implications on votes, so they scribble in the margins with reducing "inefficiencies" or eliminating tax breaks for yacht owners.

So it's the old raise taxes or cut entitlements argument. The thing is that that argument has been hashed out many times in the past, to little avail. Eveutally you reach a point--maybe they've reached it--where you have to raise taxes and cut entitlements. The good thing about that is that it would tick off both the Dems (for cutting entitlements) and the GOP (for raising taxes), thus potetnially annulling any fallout at the ballot box. And you would get real progess on the debt front. But it would be hard medicine.


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PostPosted: Wed Jul 13, 2011 12:13 pm
 


andyt wrote:
Then you're over with the Demoncrats, since that is what Obamas proposal is. Heavily biased towards cuts rather than increase taxes. But the Repulsicons are having none of it.
"Despite the tougher talk, aides say behind closed doors the tone in the White House meetings has been frank and constructive." Sounds to me they're agreeing on roughly the plan I support. You're confusing rhetoric with action.

bootlegga wrote:
Cut defence spending?!? What, are you a Commie? :lol:
H. W. Bush cut defense spending, whereas China continually increases it. I'd say that makes me an anti-Commie.

Besides, I'm only talking about minor defense cuts as a reluctant concession to get things I actually want, like low tax rates, reduced welfare spending, and a balanced budget.

Zipperfish wrote:
No one really wants to cut the military or entitlement programs because of the short term implications on votes
Yeah, efficacy is frowned upon.


Last edited by Psudo on Wed Jul 13, 2011 12:15 pm, edited 1 time in total.

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PostPosted: Wed Jul 13, 2011 12:13 pm
 


The debt ceiling issue is not something that's occuring in a vacuum. The Democrats want to raise it because they see that as a lifeline to keep them in the Senate and the White House next year.

The fact is that if the debt ceiling goes up and debt passes 100% of GDP then the bond market will downgrade US Treasuries to junk status - just like they did with Greece - and then the interest rates on the existing debt will skyrocket and the market demand for US debt will vaporize.

tl;dr version: the debt ceiling issue has already been settled on Wall Street and all of this posturing in Washington is just theatre.


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PostPosted: Wed Jul 13, 2011 12:56 pm
 


Thanos wrote:
President Obama has to call their bluff. No more negotiating at all with that collection of Randian lunatics. Shut down the government if neccessary, but call it already and get it over with. And then ramp up the vitiriol by about 1000% and never make a public statement about the crisis without including in every second sentence that the TeaParty/GOP is absolutely and completely responsible and guilty for every negative aspect of it.
Are you serious? If the US government would fail to pay what it owes (whether it would be salaries of government employees, entitlements or maturing debt) even if only temporarily, would cause a lot of problems to no one's benefit.

While single minded budget cutting without any tax increases might not be the best way to go, it at least does have some benefits. A default would have none.

If I were a US law maker and the Republicans didn't seem to be bluffing, I certainly would yield to their demands. The other option is just that much worse.


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PostPosted: Wed Jul 13, 2011 1:45 pm
 


More than a default, which he believes in unlikely, Buchanan worries a deal to avert a default will include sharp spending cuts, a troubling possibility given that federal spending accounts for eight per cent of the American economy.

"That could weigh quite a bit on an already weak economy," he said, given the June employment numbers disappointed economists, showing job creation of just 18,000 compared with the 90,000 new jobs most had expected.

A debt limit agreement that included cutting $2 trillion in spending, Goldman Sachs economists have said, could shave 0.8 percentage points off economic growth next year.

"If the U.S. economy slows further or even lapses in recession that would have clear implications for Canada's economy given that about half our GDP is trade-related and three quarters of our trade is with the U.S.," Buchanan said.


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PostPosted: Wed Jul 13, 2011 2:36 pm
 


Federal spending is an artifice that imitates economic value without actually adding to the purchasing value of the economy. If I promise to give you a million dollars and you were foolish enough to plan as if I already had it might look like the economy has grown a million dollars larger. But it hasn't. That money isn't created just because I refer to it.


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PostPosted: Wed Jul 13, 2011 3:22 pm
 


BartSimpson wrote:
The debt ceiling issue is not something that's occuring in a vacuum. The Democrats want to raise it because they see that as a lifeline to keep them in the Senate and the White House next year.

The fact is that if the debt ceiling goes up and debt passes 100% of GDP then the bond market will downgrade US Treasuries to junk status - just like they did with Greece - and then the interest rates on the existing debt will skyrocket and the market demand for US debt will vaporize.

tl;dr version: the debt ceiling issue has already been settled on Wall Street and all of this posturing in Washington is just theatre.


From my keyboard to God's monitor:

http://www.washingtonpost.com/business/ ... story.html

Moody's today downgraded Ireland to junk and put the US on a downgrade watch. So if the US tries to continue borrowing it will be at higher rates as the market thinks it may be too risky to invest in US securities. At least if the det ceiling isn't raised then current interest service can be maintained with current revenues - it's the spending that will have to be slashed to austerity levels.

And if they don't do it then the market will force austerity when no one buys our debt.

The credit cards are maxxed out and the party is over.


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PostPosted: Wed Jul 13, 2011 3:57 pm
 


bootlegga wrote:
Psudo wrote:
I think the "lowering or not raising" issue is secondary to the effect on revenue -- revenues shouldn't be lowered when spending is so dramatically high, probably impossible to cut, and tax rates are already relatively low.

I feel like I'm repeating myself, but I think it makes more sense to negotiate an exchange rate -- "We'll allow $X in tax increases in exchange for $Y in spending cuts." Maybe include some trade of defense spending cuts for welfare spending cuts, too.


Cut defence spending?!? What, are you a Commie? :lol:

A Communist cutting defence spending :?:


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PostPosted: Wed Jul 13, 2011 4:04 pm
 


It's quite easy to understand what is happening in the USA and Europe (and here too, in Quebec).

We accused "too much capitalism" (which is stupid thinking) as the cause of what happened and now we see that the problem is much more the overspending of the State and the indebtement for immediate 'privileges' or 'society rights' which we are throwing over the next generations. The baby-boomers ideals of the 60's and 70's are now hit by reality.


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PostPosted: Wed Jul 13, 2011 4:27 pm
 


Proculation wrote:
The baby-boomers ideals of the 60's and 70's are now hit by reality.


Exactly.

The liberal boomers are discovering that a country cannot tax itself into prosperity nor can it borrow itself into prosperity.

Amazingly, prosperity is built not on government spending, but on private industrial effort - something some leftists adamantly oppose yet paradoxically count on at the same time.

California comes to mind with Rob Reiner's ballot measure a few years ago that levied a special tax on 'rich' people in order to pay for pre-school for poor people. Now there's fewer rich people and tax revenues for that program are about 1/3 of what they were five years ago.

Hate on the rich all you want, but when they're financing your pet projects you might want to take better care of them.


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PostPosted: Wed Jul 13, 2011 5:06 pm
 


@Bart: My motto: "Take my money out of politician's pocket" :P


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PostPosted: Wed Jul 13, 2011 6:30 pm
 


Under Pres. Eisenhower, the tax rate for the top income earners was 91% and I'm pretty sure the US didn't succumb to a capital flight nor were collective farms the norm.


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PostPosted: Wed Jul 13, 2011 7:24 pm
 


Proculation wrote:
bootlegga wrote:
Cut defence spending?!? What, are you a Commie? :lol:


A Communist cutting defence spending :?:


Its context is historical - in the past, those who wished to cut defence spending were sometimes labelled communists (or communist sympathizers) - because by cutting defence spending it would allow the USSR to gain an advantage and possibly 'win' the Cold War.


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PostPosted: Wed Jul 13, 2011 7:30 pm
 


BartSimpson wrote:
Exactly.

The liberal boomers are discovering that a country cannot tax itself into prosperity nor can it borrow itself into prosperity.

Amazingly, prosperity is built not on government spending, but on private industrial effort - something some leftists adamantly oppose yet paradoxically count on at the same time.

California comes to mind with Rob Reiner's ballot measure a few years ago that levied a special tax on 'rich' people in order to pay for pre-school for poor people. Now there's fewer rich people and tax revenues for that program are about 1/3 of what they were five years ago.

Hate on the rich all you want, but when they're financing your pet projects you might want to take better care of them.


I don't see that many people fleeing California for low tax pastures like Ireland or the Caymans. Instead, it appears that at the very least Silicon Valley and Hollywood are still producing millionaires and multi-millionaires at a prodigious rate.


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