DebateGate
General Category => 3DHS => Topic started by: The_Professor on October 29, 2006, 01:57:21 AM
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I am VERY concerned over this!!!! AM i ALONE?
GAO Chief Warns Economic Disaster Looms
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Oct 28, 12:32 PM (ET)
By MATT CRENSON
AUSTIN, Texas (AP) - David M. Walker sure talks like he's running for office. "This is about the future of our country, our kids and grandkids," the comptroller general of the United States warns a packed hall at Austin's historic Driskill Hotel. "We the people have to rise up to make sure things get changed."
But Walker doesn't want, or need, your vote this November. He already has a job as head of the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.
Basically, that makes Walker the nation's accountant-in-chief. And the accountant-in-chief's professional opinion is that the American public needs to tell Washington it's time to steer the nation off the path to financial ruin.
From the hustings and the airwaves this campaign season, America's political class can be heard debating Capitol Hill sex scandals, the wisdom of the war in Iraq and which party is tougher on terror. Democrats and Republicans talk of cutting taxes to make life easier for the American people.
What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it.
There's a good reason politicians don't like to talk about the nation's long-term fiscal prospects. The subject is short on political theatrics and long on complicated economics, scary graphs and very big numbers. It reveals serious problems and offers no easy solutions. Anybody who wanted to deal with it seriously would have to talk about raising taxes and cutting benefits, nasty nostrums that might doom any candidate who prescribed them.
"There's no sexiness to it," laments Leita Hart-Fanta, an accountant who has just heard Walker's pitch. She suggests recruiting a trusted celebrity - maybe Oprah - to sell fiscal responsibility to the American people.
Walker doesn't want to make balancing the federal government's books sexy - he just wants to make it politically palatable. He has committed to touring the nation through the 2008 elections, talking to anybody who will listen about the fiscal black hole Washington has dug itself, the "demographic tsunami" that will come when the baby boom generation begins retiring and the recklessness of borrowing money from foreign lenders to pay for the operation of the U.S. government.
"He can speak forthrightly and independently because his job is not in jeopardy if he tells the truth," said Isabel V. Sawhill, a senior fellow in economic studies at the Brookings Institution.
Walker can talk in public about the nation's impending fiscal crisis because he has one of the most secure jobs in Washington. As comptroller general of the United States - basically, the government's chief accountant - he is serving a 15-year term that runs through 2013.
This year Walker has spoken to the Union League Club of Chicago and the Rotary Club of Atlanta, the Sons of the American Revolution and the World Future Society. But the backbone of his campaign has been the Fiscal Wake-up Tour, a traveling roadshow of economists and budget analysts who share Walker's concern for the nation's budgetary future.
"You can't solve a problem until the majority of the people believe you have a problem that needs to be solved," Walker says.
Polls suggest that Americans have only a vague sense of their government's long-term fiscal prospects. When pollsters ask Americans to name the most important problem facing America today - as a CBS News/New York Times poll of 1,131 Americans did in September - issues such as the war in Iraq, terrorism, jobs and the economy are most frequently mentioned. The deficit doesn't even crack the top 10.
Yet on the rare occasions that pollsters ask directly about the deficit, at least some people appear to recognize it as a problem. In a survey of 807 Americans last year by the Pew Center for the People and the Press, 42 percent of respondents said reducing the deficit should be a top priority; another 38 percent said it was important but a lower priority.
So the majority of the public appears to agree with Walker that the deficit is a serious problem, but only when they're made to think about it. Walker's challenge is to get people not just to think about it, but to pressure politicians to make the hard choices that are needed to keep the situation from spiraling out of control.
To show that the looming fiscal crisis is not a partisan issue, he brings along economists and budget analysts from across the political spectrum. In Austin, he's accompanied by Diane Lim Rogers, a liberal economist from the Brookings Institution, and Alison Acosta Fraser, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation, a conservative think tank.
"We all agree on what the choices are and what the numbers are," Fraser says.
Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America - Bill Gates, Warren Buffett and those Google guys included.
A hole that big could paralyze the U.S. economy; according to some projections, just the interest payments on a debt that big would be as much as all the taxes the government collects today.
And every year that nothing is done about it, Walker says, the problem grows by $2 trillion to $3 trillion.
People who remember Ross Perot's rants in the 1992 presidential election may think of the federal debt as a problem of the past. But it never really went away after Perot made it an issue, it only took a breather. The federal government actually produced a surplus for a few years during the 1990s, thanks to a booming economy and fiscal restraint imposed by laws that were passed early in the decade. And though the federal debt has grown in dollar terms since 2001, it hasn't grown dramatically relative to the size of the economy.
But that's about to change, thanks to the country's three big entitlement programs - Social Security, Medicaid and especially Medicare. Medicaid and Medicare have grown progressively more expensive as the cost of health care has dramatically outpaced inflation over the past 30 years, a trend that is expected to continue for at least another decade or two.
And with the first baby boomers becoming eligible for Social Security in 2008 and for Medicare in 2011, the expenses of those two programs are about to increase dramatically due to demographic pressures. People are also living longer, which makes any program that provides benefits to retirees more expensive.
Medicare already costs four times as much as it did in 1970, measured as a percentage of the nation's gross domestic product. It currently comprises 13 percent of federal spending; by 2030, the Congressional Budget Office projects it will consume nearly a quarter of the budget.
Economists Jagadeesh Gokhale of the American Enterprise Institute and Kent Smetters of the University of Pennsylvania have an even scarier way of looking at Medicare. Their method calculates the program's long-term fiscal shortfall - the annual difference between its dedicated revenues and costs - over time.
By 2030 they calculate Medicare will be about $5 trillion in the hole, measured in 2004 dollars. By 2080, the fiscal imbalance will have risen to $25 trillion. And when you project the gap out to an infinite time horizon, it reaches $60 trillion.
Medicare so dominates the nation's fiscal future that some economists believe health care reform, rather than budget measures, is the best way to attack the problem.
"Obviously health care is a mess," says Dean Baker, a liberal economist at the Center for Economic and Policy Research, a Washington think tank. "No one's been willing to touch it, but that's what I see as front and center."
Social Security is a much less serious problem. The program currently pays for itself with a 12.4 percent payroll tax, and even produces a surplus that the government raids every year to pay other bills. But Social Security will begin to run deficits during the next century, and ultimately would need an infusion of $8 trillion if the government planned to keep its promises to every beneficiary.
Calculations by Boston University economist Lawrence Kotlikoff indicate that closing those gaps - $8 trillion for Social Security, many times that for Medicare - and paying off the existing deficit would require either an immediate doubling of personal and corporate income taxes, a two-thirds cut in Social Security and Medicare benefits, or some combination of the two.
Why is America so fiscally unprepared for the next century? Like many of its citizens, the United States has spent the last few years racking up debt instead of saving for the future. Foreign lenders - primarily the central banks of China, Japan and other big U.S. trading partners - have been eager to lend the government money at low interest rates, making the current $8.5-trillion deficit about as painful as a big balance on a zero-percent credit card.
In her part of the fiscal wake-up tour presentation, Rogers tries to explain why that's a bad thing. For one thing, even when rates are low a bigger deficit means a greater portion of each tax dollar goes to interest payments rather than useful programs. And because foreigners now hold so much of the federal government's debt, those interest payments increasingly go overseas rather than to U.S. investors.
More serious is the possibility that foreign lenders might lose their enthusiasm for lending money to the United States. Because treasury bills are sold at auction, that would mean paying higher interest rates in the future. And it wouldn't just be the government's problem. All interest rates would rise, making mortgages, car payments and student loans costlier, too.
A modest rise in interest rates wouldn't necessarily be a bad thing, Rogers said. America's consumers have as much of a borrowing problem as their government does, so higher rates could moderate overconsumption and encourage consumer saving. But a big jump in interest rates could cause economic catastrophe. Some economists even predict the government would resort to printing money to pay off its debt, a risky strategy that could lead to runaway inflation.
Macroeconomic meltdown is probably preventable, says Anjan Thakor, a professor of finance at Washington University in St. Louis. But to keep it at bay, he said, the government is essentially going to have to renegotiate some of the promises it has made to its citizens, probably by some combination of tax increases and benefit cuts.
But there's no way to avoid what Rogers considers the worst result of racking up a big deficit - the outrage of making our children and grandchildren repay the debts of their elders.
"It's an unfair burden for future generations," she says.
You'd think young people would be riled up over this issue, since they're the ones who will foot the bill when they're out in the working world. But students take more interest in issues like the Iraq war and gay marriage than the federal government's finances, says Emma Vernon, a member of the University of Texas Young Democrats.
"It's not something that can fire people up," she says.
The current political climate doesn't help. Washington tends to keep its fiscal house in better order when one party controls Congress and the other is in the White House, says Sawhill.
"It's kind of a paradoxical result. Your commonsense logic would tell you if one party is in control of everything they should be able to take action," Sawhill says.
But the last six years of Republican rule have produced tax cuts, record spending increases and a Medicare prescription drug plan that has been widely criticized as fiscally unsound. When President Clinton faced a Republican Congress during the 1990s, spending limits and other legislative tools helped produce a surplus.
So maybe a solution is at hand.
"We're likely to have at least partially divided government again," Sawhill said, referring to predictions that the Democrats will capture the House, and possibly the Senate, in next month's elections.
But Walker isn't optimistic that the government will be able to tackle its fiscal challenges so soon.
"Realistically what we hope to accomplish through the fiscal wake-up tour is ensure that any serious candidate for the presidency in 2008 will be forced to deal with the issue," he says. "The best we're going to get in the next couple of years is to slow the bleeding."
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You shoulda worried about it before you voted for the Bushidiot. Probly twice.
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I am VERY concerned over this!!!! AM i ALONE?
What are you concerned about?
What steps are you taking to take care of that concern?
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More tax cuts might help, or perhaps tax increases would help.
Tax cuts are like planting more garden , tax increases are like harvesting more.
If you harvest more from a bigger garden it works .
What happens when you try to harvest more from a garden the same size?
Could you wind up with less to plant in the next garden?
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Plane---
Sounds to me like tax cuts got us in this position. If you cut income and keep on spending, you get in trouble. We're in trouble. We have to raise taxes, and cut spending.
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"We're in trouble. We have to raise taxes, and cut spending."
Bush's veto *non*-record speaks for itself. If the last nearly 6 years has taught us anything, it's that there isn't a bit of difference between the Democratic party and the GOP when it comes to fiscal resposibility.
This is one of those rare areas in life where gridlock is a good thing, which is what I supported back in 2000- not Bush, not Gore, but literally gridlock, the only way I saw that spending and government expansion could be held in check.
For 5 plus years, the man couldn't veto a single bill, not $1 of spending.
It's beyond absurd.
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BT asks what I am doing about it. Well, I wrote a letter to both President Bush and the RNC. I sent those letters to Saxby Chambliss, my U.S. Senator.
As far as the rest, I am apparently not in agreement with many of my Republican colleagues on the tax cut issue. I agree with Lanya. We need to increase taxes and reduce spending. In fact, I think we should balance the budget by whatever means necessary. This neocon spending is simply out of control and has been for some time. Or, institute a 23% (or whatever is necessary) VAT. Stop raiding the SS fund. Restart the draft. Limited deferments. (stirred the pot enough yet?)
For a start, let's take EVERY Federal Government Department and cut their budget across the board by, er, 20%. EVERYBODY. Gee, if DoD can't sustain their current ops with thisdecrease, thne I geuessthey have to make some important decisions, huh ('bout time!) Freeze Federal salaries (sorry, Plane). Freeze what the Federal government pays into the Federal employee healthcare system (again, sorry Plane). I was a GS-14 Computer Scientist and then started going into Executive Mgt there, and in seven years in the U.S. Department of the Treasury and I can tell you that few of the folks I met there could make their salaries in the private sector. If they feel they are underpaid, then they can pursue the private sector.
Then, lets form a bipartisan committee to make recommendations on how to balance the budget. Let's make those recommendations MANDATORY in execution. Be sure to have a diverse group from all major parties. Give 'em a deadline, say 24 months. Then implement those recommendations (doesn't really make them recommendations, huh?).
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This neocon spending
What neocon spending. Please explain the influence of neocons on domestic policy
Who are these neocon leaders that are leading us down the path to ruination?
How does restarting te draft balance the budget.
The article mentioned three entitlement programs that will tip the budget.
Why is refoming these programs political suicide and what help did you provide Bush in his efforts to reform Social Security?
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okay, I'll change the name to "current Republican mantra", if that will help.
Naw, restarting the draft won't affect balalncing the budget, unless you reduce salaries accordingly. After all, aren't current military salaries higher in order to attract them? And, if you compute that over the 3M people in uniform, that mgiht add up to some serious numbers. I haven't run the numbers.
I just had to get that in however as it would help us address some of these military staffing concerns.
"The article mentioned three entitlement programs that will tip the budget.
Why is refoming these programs political suicide and what help did you provide Bush in his efforts to reform Social Security?"
Those entitlement programs will continue to be serious spenders. Medicare, for example, needs to be trimmed. I am not sure how to reasonably do this until you enter the entire "universal health care" debate.
Many people seem to have this head in the sand attitude about this issue and it concerns me. Are you concerned about this Federal budget issue?
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Are you concerned about this Federal budget issue?
if you are asking whether i would support a balanced budget amendment, i certainly would.
I have stated repeatedly that universal health can be handled at the state level and paid for with a sales tax.
Social Security should at the minimum be barred from contributing to the general fund and iou's should not be considered legal tender. I would prefer that the program be privatized. or more likely modeled after the thrift savings program. All those under 40 would be enrolled in the new program, all those over 40 would remain in the old program. I have no problem eliminating the ceiling on income eligible for SS taxes.
and i would still like an explanation on who these neocon domestic policy leaders are.
You used the term. Certainly you have people in mind .
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Professor, you seem to be looking at trimming social programs. What about the vast sums we pay to KBR, Halliburton, and other "contractors" to do things the regular military used to do? To cook, build, etc.? You know those employees get paid much, much more than our soldiers. And it seems to me there's no oversight. Lots of waste, and little appetite in the GOP Congress for curbing it. It simply makes no sense.
Medicare is one program I would not cut. That is vital to lives and health of so many people.
I like your idea of freezing federal employees' wages. State, county, and city employees wages should be frozen too. How many minimum wage earners does it take to pay one hour of a city employee's wage, I wonder? 4?
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okay, I'll change the name to "current Republican mantra", if that will help.
I am speaking of the NEW Republicans, not the William Buckley types who were/are conservative fiscally as well.
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Professor, you seem to be looking at trimming social programs.
Considering that the majority of the Federal Budget is spent on social programs, any budget cuts would have to impact them.
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Lanya, I just recommended a 20% iniital cut as a starting point and, to be fair, I appllied it across the board. Just as a starting point. The bipartisan commission can tweak this their charge.
Medicare simply costs too much and will continue to grow. There MUST be ways to effectively trim it.
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Considering that the majority of the Federal Budget is spent on social programs, any budget cuts would have to impact them.
And this probably goes a long way toward explaining why the problem exists in the first place. It's easy to say freeze federal wages when you don't recieve one. It is easy to point the finger at demon corporations when you don't work for one. It is easy to say raise taxes on the rich when it doesn't affect you.
But it is real hard to cut a benefit that you recieve.
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But it is real hard to cut a benefit that you recieve.
But, the MATURE thing is to consider others. Sometimes, as corny as it sounds, you must do what is best for the country and not for you.
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So you wouldn't classify Lanya's dismissal of social spending cuts as the MATURE thing to do?
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Without getting into remedies, I'll simply note that if this report had been made by so authoritative a figure in the old Soviet Union about that defunct country's prospects, President Reagan would have included it among the prime exhibits supporting his confrontational stance toward the old nemesis. In other words, folks, this is serious.
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Plane---
Sounds to me like tax cuts got us in this position. If you cut income and keep on spending, you get in trouble. We're in trouble. We have to raise taxes, and cut spending.
Well you are half right.
Cutting spending would definately help , and I would agree with the professor that cutting should be across the board and spare no one , every exception will harm some one more than another and so each exception will be unfair .
The simplest means of spending cut is a freeze , instead of a new budget , we should have no more spending than last years , and spread it the same way, if this could be done for several years it would have the effect of a gradually increaseing cut.
Don't worry about my pay , if I can't get a cost of liveing raise , I can still get a promotion or another job.
Raiseing taxes , on corporations , on the rich or poor , on the middle class or the upper crust, all has the effect of reduceing the productivity of the economy.
If taxes are raised enough to make 20% of our economy ,government, this is like a company makeing 20% of its payroll management.
Imagine the disaster resulting from a tax rate of 100%?
Can you see that that would be a mistake?
Now you can see that a tax rate of 99% might also be a mistake ?
Keep going in that direction , what amount of our productive economy should be diverted from production for taxes for the optimum amount of government and the optimum amount of real economy?
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Plane,
I read an article about the tax rate that was put into effect by FDR.
This isn't it but it gives the tax rate I was looking for.
http://www.tompaine.com/articles/shared_sacrifice_shared_glory.php
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Plane,
I read an article about the tax rate that was put into effect by FDR.
This isn't it but it gives the tax rate I was looking for.
http://www.tompaine.com/articles/shared_sacrifice_shared_glory.php
And that top rate stood till the late fiftys .
In the face of impending subjugation the people gave up a lot , even though we were paying more taxes than ever , we also bought more bonds and lent the government more money than ever also.
But do we really need to quintiple our military spending right now? That was certainly needed then but I don't see the need being the same now.
Recent evidence demonstrates that a drop in tax rates causes an increase in tax recipt.
Compare this to a store , does a store make more money automaticly whenever they raise prices?
Of course not , if you raise prices enough you get fewer buyers.
Since the present Democratic proposals are weighted to take the money mostly from employers , the most immediate effect will be a reduction in hireing, fewer taxpayers in other words .
I see no evidence at all that an increase in taxes right now is required .
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Since the present Democratic proposals are weighted to take the money mostly from employers , the most immediate effect will be a reduction in hireing, fewer taxpayers in other words .
Well, some of them will jsut move offshore. I think the operative question is how much of an increase will it require to create this event?
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Imagine the disaster resulting from a tax rate of 100%?
Can you see that that would be a mistake?
Now you can see that a tax rate of 99% might also be a mistake ?
An extreme example. Imagine a tax rate of 0% with no government resources to pay for a military, an FBI, disability coverage, medicaid, medicare, social security, interstate maintenance, all the way down to local greenways and erosion prevention programs.
The economics of taxation is not nearly as simplistic as you've made it. Public investment is not as destructive a force as you've made it sound either.
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Regardless, the issue will continue to loom LARGE, e.g. enormous government deficits. The longer we wait to address this, the worse the ultimate effect.solution will be.
A large part of the reason is that the typcial politician isn't interested in really solving the problem, due to the potential fallout.
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Since the present Democratic proposals are weighted to take the money mostly from employers , the most immediate effect will be a reduction in hireing, fewer taxpayers in other words .
Well, some of them will jsut move offshore. I think the operative question is how much of an increase will it require to create this event?
Each .01% tasken from employers as taxes should be considered .01% less availible for hireing.
Unless we are going to reinstitute the draft , then the employment of Soldiers can b e the main business of the nation as it was during WWII.
If we could maintain that strain we could take over the world entirely and crush any kind of resistance.
As it is we devote a larger purportion of our budget to defense than the tipical European country and less than the tipical tyrany , much less than N. Korea.
But we being the largest economy and all, this spending winds up being only a little less than equal to all the rest of the worlds spending on defense.
If we went onto a War footing as we did during WWII and raised our defense spending by a factor of five or more,we could arm more Americans as soldiers than all the rest of the world put together could , by a factor of three at least.
I don't see this as necessacery, but if we elect a very agressive Democrat like FDR I will go along with it.
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Imagine the disaster resulting from a tax rate of 100%?
Can you see that that would be a mistake?
Now you can see that a tax rate of 99% might also be a mistake ?
An extreme example. Imagine a tax rate of 0% with no government resources to pay for a military, an FBI, disability coverage, medicaid, medicare, social security, interstate maintenance, all the way down to local greenways and erosion prevention programs.
The economics of taxation is not nearly as simplistic as you've made it. Public investment is not as destructive a force as you've made it sound either.
A confiscatory tax was the foundation of our Nation , we didn't stand for it from King George , but what rate of taxation did the Stamp Tax amount to ?
A tax rate of 0 is quite obviously a mistake , but a tax rate of 100% is an equally ridiculous mistake. You can't get beef next year from the heard you have totally slaughtered this year.
There must indeed be an ideal rate for maximizing the Government intake , and the subject shouldn't be much more complex than determining the maximum ,sustainable, beef production from a heard of a certain size.
But why do you accuse me of making it seem too simple ?
Too many seem to think that a rise in taxes is going to produce a raise in government tax receipts as certainly as 2+2=4 but the relationship is very non lienear.
http://en.wikipedia.org/wiki/Laffer_curve(http://upload.wikimedia.org/wikipedia/commons/thumb/4/47/Laffer_Curve.png/250px-Laffer_Curve.png)
http://www.investopedia.com/terms/l/laffercurve.asp
http://www.heritage.org/Research/Taxes/bg1765.cfm
(http://www.heritage.org/Research/Taxes/images/figure2.gif)
(http://www.heritage.org/Research/Taxes/images/figure3.gif)
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the problem is this country overall do not think in terms that see`s this ever as a problem
I brought this up earlier.
20 years ago if a person said he`s broke ,people will back away.
to day if you say your broke,people will not accept that and say charge it.
this thinking is entrenched in our government and it`ll be very hard to convinced those folks to reacted to anything economic as a serious problem.
in fact bankruptcy is thought of as a goodthing by many folks as a form of bailout of your problems.
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Actually, no one knows what the middle of the Laffer Curve looks like. The supposition you have there is that it is a parabolic equation. The reality is that we know two endpoints (the two extremes) and nothing else about the middle of the "curve" or whatever it is.
The capital gains graph assumes that there are only two variables involved. In other words, you are providing what you hope is causation, but in reality it is not. It might be correlation, but one would have to do statistical analysis to see if that is the case.
And remember what you are essentially saying when you cut capital gains lower than income tax brackets. You are basically saying that income realized on real estate (and other ventures) is worth more than income realized through a hard day of work. You are saying that a dollar of a real estate executive or a stock speculator is worth more than a dollar someone earns being a nurse, a garbageman, an engineer, or a policeman.
Economics is no science and beware anyone who tells you otherwise. It is an amalgamation of mathematics, art, psychology, politics, and philosophy all rolled into one bizarre attempt to project reality onto the future.
Too many seem to think that a rise in taxes is going to produce a raise in government tax receipts as certainly as 2+2=4 but the relationship is very non lienear.
You'll have to show me where I've indicated that because I certainly do not recall doing so.
A confiscatory tax was the foundation of our Nation , we didn't stand for it from King George , but what rate of taxation did the Stamp Tax amount to ?
The stamp tax was in fact rather mild. It was the management of paying the damn thing on every piece of paper one used that bothered Americans. In fact, most of the Crown's taxes on Americans were rather mild. It was irony that Hamilton and Washington turned around and did the same thing to Americans in having to raise taxes to pay for a war (which is exactly what the British were doing).
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Social Security should at the minimum be barred from contributing to the general fund and iou's should not be considered legal tender. I would prefer that the program be privatized. or more likely modeled after the thrift savings program. All those under 40 would be enrolled in the new program, all those over 40 would remain in the old program. I have no problem eliminating the ceiling on income eligible for SS taxes.
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O How utterly clever!
Tell me, when all the people over 40 are retired, and no longer paying in, where will the government find money to pay for their benefits, since the people who are working have all their money going to their benefits?
I suppose that if they stop paying the geezers, some of them will starve and die. But many will vote before they croak.
And they will not vote in favor of the klutzes who passed your clever plan.
The guys who passed this plan will be quite lucky if the geezers do not parade about, with the heads of the originators of your plan stuck atop tall sticks.
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What is YOUR solution to the problem, XO?
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I just wanted to add this bit of a column to the discussion.
"American prosperity is owed not only to a brilliant design for a government and generations of hard work, but also to an amazing run of good luck. We inherited an entire continent of virgin land - an inconceivable bonanza - at precisely the moment that the industrial revolution made it possible to exploit such expanses.
Then, in World War I, Europe, our only economic competitor, blew its brains out and repeated the act 20 years later, with the Japanese joining in. That left the U.S. astride the globe with the only intact economy on earth. We were generating 62% of the entire planet's GDP. And we have riden that horse ever since.
But the measure of leadership is not how well it leads when times are good. It is how it leads through adversity, when times are bad. That is why we revere Washington, Lincoln and Roosevelt as we do. Today America faces some of the biggest economic challenges it has ever faced and the benign wind of serendipity is no longer at our backs.
Budget deficits. Trade deficits. Unfunded liabilities. Oil. And China. In all of these arenas, Bush's leadership has failed, badly, even catastrophically. His policies make each of these problems dramatically worse. They effectively amount to an abandonment of the U.S. economy and a milking of its assets and wealth into the hands of a very small group of the world's richest people. Like the Bush family. "
http://www.commondreams.org/views06/1029-26.htm
We were generating 62% of the entire planet's GDP with the tax rate I mentioned earlier. Hmmm.
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Tell me, when all the people over 40 are retired, and no longer paying in, where will the government find money to pay for their benefits, since the people who are working have all their money going to their benefits?
It would be time for the feds to pay back their debts, wouldn't it? SS has all those bonds sitting around that they could cash in...
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Economics is no science and beware anyone who tells you otherwise. It is an amalgamation of mathematics, art, psychology, politics, and philosophy all rolled into one bizarre attempt to project reality onto the future.
Sounds like what was said about quantum mechanics about 60 years ago.
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and that was solved in Timeline. see http://www.imdb.com/title/tt0300556/ ;D
Seriously, Lanya's article makes sense as to the history, post WWII to now.
Still, the issue rermains: what needs to happen NOW?
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Sounds like what was said about quantum mechanics about 60 years ago.
Yes. Quantum mechanics and economics are exactly alike.
*sigh*
There's a reason economics is a social science.
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It would be time for the feds to pay back their debts, wouldn't it? SS has all those bonds sitting around that they could cash in...
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That would, of course, be part of my plan.
I would also raise the SS rates to tax everyone at the current SS rate.
It would help if the government were not so ready to monger unwinnable wars in places like Iraq.
I think an inheritence tax on inherited wealth over $5,000,000, and pegged to the CPI would make a lot of sense.
It is true that economics is not an exact science. But it is also true that we do know oodles more about it than we did back in the days of Herbert Hoover and FDR, and this needs to be taken into account.
I naturally favor SS paying me at the rate that was promised me long ago, being as I have bewen paying into the mutha since I was 16, barring only four years when I was studying and living out of the country. I earned money in Mexico, but I am afraid that I did not pay any SS taxes to any government on it.
I could probably live on what I have saved in my IRA's and 403-B's, but the SS payments would make life easier, for sure.
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Social Security should at the minimum be barred from contributing to the general fund and iou's should not be considered legal tender. I would prefer that the program be privatized. or more likely modeled after the thrift savings program. All those under 40 would be enrolled in the new program, all those over 40 would remain in the old program. I have no problem eliminating the ceiling on income eligible for SS taxes.
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O How utterly clever!
Tell me, when all the people over 40 are retired, and no longer paying in, where will the government find money to pay for their benefits, since the people who are working have all their money going to their benefits?
I suppose that if they stop paying the geezers, some of them will starve and die. But many will vote before they croak.
And they will not vote in favor of the klutzes who passed your clever plan.
The guys who passed this plan will be quite lucky if the geezers do not parade about, with the heads of the originators of your plan stuck atop tall sticks."
This is certain to happen , I will be one of the Geezers that will be holding a tall stick , on the up wards end of the stick I want the head of one of the anti reformer reactionary Democrats who stood against all repair efforts and shot the bottom out of all lifeboats as the SS Social Security was sinking.
Read your own statement of the problem , do you really think it is viable to tax a shrinking pool of workers at a growint rate ad infinitum?
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You mean you aren't a GEEZER now? hahahahahaha
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Sounds like what was said about quantum mechanics about 60 years ago.
Yes. Quantum mechanics and economics are exactly alike.
*sigh*
There's a reason economics is a social science.
Why is Economics less exact than animal husbandry?
You cannot know how many calves a particular cow will produce , but you can rely on stistics to tell you within reasonable error how many calves a heard can produce.
Although the huge number of individual choices involved produces a haze on the numbers , the great number of people makeing the choices firms up the stats quite a bit.
The prediction of the motion of a single water molicule is a Quantum equation of high uncertainty and great complexity , but the behavior of a slug of water being dumped from a bucket sin't hard math at all , even though the individual molicules are winding very complex paths the water being dumped from one bucket into another does not need to account for all of the molicules individually and can be described in simple terms.
We do not have enough computeing power on the planet to account for the effect of a change of taxation on a particular individual , but the laffer curve does not pretend to do that.
We know that at one end of the curve is a Zero because collecting no taxes produces no government revenue , one could even infer that the Zero would vbe true at any rate that did not cover the expense of the IRS in collection.
On the other end we have a Zero that is just as certian because putting all of the economy into governance would be a rediculous load , this zero must extend downwards untill there is a rate at which the economy can function at some crippled level and carry a bloated government .
Where the real center of the laffer curve belongs seems to be a mystery , where the most return occurs probably is not at 50% or 80% or 20% but experiment can find the perfect point even if there is no adequate mathmatical model, if taxes are lowered and tax revenue falls this may indicate that the area below the optimum level has been entered.
But if taxes are cut and the revenue rises then the optimum might have been reached , or the optimum might still be lower .
Still unasked is whether it is correct for government to make the biggest bite on our economy that it can , this money is not a possession of the government by natural right , if the government can be run on a lower amount than the best taxes we can pay what is the point of a tax higher than that?
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infinitum? The Baby Boomers are not an infinitum. It is a swell that will come and go over a twenty year period. the economy will always have an ebbtide and the bad years will be offset by the good years. In fifty years the ratio of young working Americans will be larger than the retired. The average life span is 80 years of age. The age of retirement begin at 62. We work about 40 years of our life. The numbers are in favor of maintaining the SS system as is.
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You mean you aren't a GEEZER now? hahahahahaha
http://www.answers.com/topic/geezer
If I am a Geezer now , I will shurely be a Geezer then.
Maybe a seinor Geezer.
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infinitum? The Baby Boomers are not an infinitum. It is a swell that will come and go over a twenty year period. the economy will always have an ebbtide and the bad years will be offset by the good years. In fifty years the ratio of young working Americans will be larger than the retired. The average life span is 80 years of age. The age of retirement begin at 62. We work about 40 years of our life. The numbers are in favor of maintaining the SS system as is.
You have just stated the reason that your conclusion cannot work.
There will be a swelling of the retiree numbers that will not reduce for twenty years.
Starting about now.
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if the government can be run on a lower amount than the best taxes we can pay what is the point of a tax higher than that?
as my grandma used to say all the time
thats jusy crazy talk
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Off course it works. Twenty years is nothing when we are talking about a nation's economy. There is no time limit, we are a nation and we will go on. The Great Depression came and went. Look at America now. Off course there will be hard times, they will pass.
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Off course it works. Twenty years is nothing when we are talking about a nation's economy. There is no time limit, we are a nation and we will go on. The Great Depression came and went. Look at America now. Off course there will be hard times, they will pass.
No
Two years of unemployment over ten percent will end the SS forever, even if we are talking about starting right now.
I may be optomistic about that , perhaps less than one year , then we will have that parade with long sticks decorated by the guys that told us to stay the course and not change SS one iota.
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You think the Stock Market is a safer investment then a national trust?
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Two years of unemployment over ten percent will end the SS forever,
Unemployment is not a problem, the baby boomers are retiring, remember. Not having enough workers is more likely the problem.
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You think the Stock Market is a safer investment then a national trust?
Under the present circumstances , yes very much so.
If the Stock market were to do what the SS is about to do there would be nothing to produce taxes at all.
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Two years of unemployment over ten percent will end the SS forever,
Unemployment is not a problem, the baby boomers are retiring, remember. Not having enough workers is more likely the problem.
How can you say that unemployment will cause no problem when there is already a problem with haveing too few workers to support the system with 95 out of an hundred working?
How would there be enough when only 90 of an hundred are working when 95 is already projected to be a failure mode?
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How can you say that unemployment will cause no problem
As the boomers retire, their Jobs will need to be filled. We will have more people leaving the work force than coming into the work force. There will be no (unemployment) problem. We may in fact have to allow more immigrants into the country to fill the void. So, for every person who retires someone is going to have to fill their job. The question should be, where are the workers coming from? Just because someone retires does not mean there old job disappears.
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that`s happening now
alot of jobs are open now,but there is no real programs to get local people to get these jobs.
what i mean is we have no training programs to make people qualified for these job.
ex. bio-tech is said in the near future to be the big trend for jobs.
but have anyone notice no serious push to get people ready to get these jobs.
nobody is outright saying to train in that field.
I`m the only guy in my immediate area I know with a somewhat medical background.
I`ve asked manytimes in the past whats the last trend for jobs
and i always get look it up
it`s like people are scared to answer that question.
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So, for every person who retires someone is going to have to fill their job.
Not true.
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So, for every person who retires someone is going to have to fill their job.
Not true.
Is this just too simple to explain?
Fewer workers ,whether because of a lack of people to work or a lack of jobs either one reduces the resorce that can be tapped.
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Is this just too simple to explain?
Many jobs are being replaced by automation. Not every retiring worker is being replaced. Heck, companies are letting workers go that they no longer need - they're not even waiting for retirement.
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Why is Economics less exact than animal husbandry?
You cannot know how many calves a particular cow will produce , but you can rely on stistics to tell you within reasonable error how many calves a heard can produce.
Although the huge number of individual choices involved produces a haze on the numbers , the great number of people makeing the choices firms up the stats quite a bit.
I'm not an expert on animal husbandry, so I want to make that very clear. I'm going to go out on a limb though and say that economics, like psychology, involves assumptions based on the human mind. Now, there are occasions where it doesn't seem so, but the human mind really is quite a bit more complex than the bovine mind.
Population theories have existed for a great many years in the biological sciences. The equations, as you have indicated, are rather reliable given known variables.
Economics is not so amazingly sharp at predicting the future. It is rather useful at explaining what has happened in the past. For example, the Asian Tiger collapse was not readily predicted, but can be explained by a few economic explanations. Black Wednesday wasn't predicted, but certainly can be explained.
Short-term projections are also more accurate and computer modeling can be done to give moderately accurate figures for something like sales-tax revenue (barring something like Hurricane Katrina).
Yet, economics is not a science. Yours and Ami's quest to make it one is similar to asking why sociology is not the same as physics, or why philosophy is not the same as statistics.
Unless you truly believe in pure reductionism to its very core, then it will simply never be.
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Economics is not so amazingly sharp at predicting the future.
Neither is quantum mechanics. As a matter of fact, quantum mechanics has as a core principal the "Heisenberg uncertainty principle" - you cannot know both the position and velocity of a subatomic particle accurately. Another core principal is that of the randomness of actions of subatomic particles.
Yet, it's amazingly accurate at predicting what large groups of subatomic particles will do.
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You certainly cannot predict everything that will happen economicly.
But when there is no reserve and there is a trend to tax fewer people on and on as fewer are availible to tax.
And there is as growing number of people supported by this tax.
And neither of these trends is going to slow or change .
We do have absolute certainty , the Social Security system as it is will fail.
You are only right in that the date is hard to predict , a period of high unemployment wold cause the failure to happen immediately.
And certainly.
Twenty years of uninterrupted good employment rates might mean that Social Security will last fifteen years , how many periods of fifty years with no low employment periods have there ever been?
I suppose you might say that the science is inexact and there are experts that disagree so we should do nothing untill the science is exact and the experts all agree on all the details.
Next tell me that Golbal warming predictions are the result of exact science with all experts agreeing?
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Yet, economics is not a science.
I like the section in Wikipedia about economics as being a science.
"However, many recognized people like the renowned philosopher of science Karl Popper, has argued that any system of theories which allows itself to be disproven is indeed scientific. It is also argued by many, that difficulty in proving many hypotheses come [sic] occur in the natural sciences too, not only in the social sciences. In general, economists reply that while this aspect presents serious difficulties, they do in fact test their hypotheses using statistical methods such as econometrics and data generated in the real world.[9] Some have argued that difficulty in this estimation implies economics is not a soft science, the field simply lacks the controllability of other sciences, and thus has greater difficulty in gathering and establishing evidence. The field of experimental economics has seen efforts to test at least some predictions of economic theories in a simulated laboratory setting – an endeavour which earned Vernon Smith the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel in 2002."
[9] Harvard University Department of Economics — Al Roth - Gund Professor of Economics and Business Administration, Harvard Economics Department and Harvard Business School, accessed May 2006
Article (http://en.wikipedia.org/wiki/Economics)
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Astronomy is a science , no ability to experiment at all .
Have you heard that NASA is going back to repair the Hubble?
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Economics is NOT Natural Science!
(It is technology of Social Science.)
Science is a process of formulating models that predict outcomes in a natural system under certain conditions, and then testing them to see if the future predictions agree. However, the goal is to find how the model is inadequately representing the natural system. When the model is refuted, it is adjusted to form a new model from what is learned about the system. Since there is an underlying system that is being approximated by the models, there is an "objective reality" (exists independently of human conceptualization) to be described by conceptual models. The models evolve representations of the relationships and features that are defined by the system. Models are useful to humans. Models are respected when they better reflect the nature of the system.
Since Descartes we have approached the task of developing models as if the systems were mechanical. This means that the properties of one part are inherent in its composition and individual properties, unaffected by the surroundings. We can study the whole system a part at a time, assemble what we have learned into a more comprehensive model. The more extensive the parts and the quality of the model's components, the better model should become.
As complex systems have been recognized and are being studied, we are beginning to appreciate that both living and physical systems are not well approximated by Cartesian approaches. A model composed of parts that are independently describable is inadequate because the system has extensive interactions among the components. Therefore, the features of a part of the system are partly determined by the components, and partly determined by the conditions surrounding the components. That is, the components have properties that partly depend on the context in which they exist. To understand responses we need to consider the entire system at once.
Nevertheless, the reality of science is a physical universe with underlying determinable properties. Only our approach to study reflects the difference between Cartesian science and complex systems. In complex systems, the system evolves and there is an "arrow of time" that prevents "retro-dictions" (predicting the conditions in the past that led to present states) and long range pre-dictions are impossible.
On the other hand economics is an artifact of human imagination, and the agreement among certain humans who "play the games" together -- thereby it is a social technology. There is no underlying physical reality other than what is identified by the players to be components. Granted, the interactions within the system may be complex, and the economic properties are determined by what people study. Nevertheless, in the economic properties are determined by and limited only by the beliefs of the "players." To build economic models one must assume certain features, and the models become part of the generators of the results. Since they are not inherently tied to the physical and biological realities, they may fail arbitrarily as the physical and biological world view of humans change -- or as people believe the physical and biological world exists. Economics in large part reflects human belief systems. When physical and biological constraints become seriously constrained for humans, economics becomes irrelevant. The game ends.
Dr. Dick Richardson
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Economics is NOT Natural Science!
According to this article, neither high-energy physics nor quantum mechanics are "science". Nor is cosmology.
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But it is real hard to cut a benefit that you receive.
Thats it BT. That is why we need a "Flat Tax" System. 6% state sales tax and 6% federal sales tax. No other taxes of any kind. When the a state or the federal government revenue spending begin to out pace incoming revenue, they must cut spending. No shelter, no deductions. A simple tax system that can be audited and confirmed. Those who break the law go to jail. No one gets a loophole. If you can afford to buy it, you can afford to pay federal and state tax on it. We need to get rid of the IRS.
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that`s interesting
with a flat tax you would know if spending needs to be cut much quicker.
it would be harder to hid cost.
the present system ,there is no limit what can be hidden.
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"On the other hand economics is an artifact of human imagination, and the agreement among certain humans who "play the games" together -- thereby it is a social technology. There is no underlying physical reality other than what is identified by the players to be components. ..."
I do not beleive that Dr Richardson is right .
I have just imagined the cash in my wallet doubleing.
Nope .