freeman2 wrote:So the 200 billion difference in spending cuts over 10 years between what Boehner proposed and what Obama proposed is going to cause us our economy to blow up and turn us into a second-rate power? That seems unlikely...

That's not what I'm saying. Political reality would not allow Boehner to propose something serious. The problem is that your man is bent on going to the tax and spend route.

Some economists, particularly Krugman, think this is just fine.

I've yet to see anyone explain how we pay the interest on $21T when the interest rates rise to historical norms.

Hint: it won't be by taxing the rich.

freeman2 wrote:I suspect that blaming voters for not being informed enough on the issues is going to work about as well for Republicans as it did for Democrats when they used to blame white working-class class voters for not voting for their economic self-interest and instead voted for Republicans...

Indeed. It's one of the least palatable attributes of the far left (by which I mean the real far left - Marxists as opposed to socialists or liberals), that they see the people they claim to be struggling for - the working classes - as rubes who don't know what is good for them.

It smacks of not wanting to live in a democracy to decry the 'ignorance' of those who don't vote the way they 'ought to'. Rather than repeatedly blaming those voters, those who see them as ignorant should look at ways to educate them. You don't get very far educating people if you've started off by alienating them when you call them stupid.

freeman2 wrote:You know if Republicans passed a bill cutting taxes for the bottom 98 percent, then agreed to taxes going up on those making over 250k in return for large spending cuts then they might outflank Obama.

The problem with this that $250,000 is not a lot of money. And it is not just small business owners that might get hit. I live in Middletown, Bucks County and the Neshaminy School District. A Middletown Police officer married to a Neshaminy Teacher both with 10+ years experience could be making up to if not over $250,000 a year. Hell, I know a family like this. They are not the rich. They are solid middle class people living in a Levittown home and driving a mid-size family car.

As long as they both continue to ignore the elephant in the room...

How much over 250K would they be on, ARJ? How much would a marginal increase of 4% hit them at over 250K? Not enough for penury to kick in, I bet.

And don't couples get a larger allowance (or couldn't they be taxed individually)?

fate

I've yet to see anyone explain how we pay the interest on $21T when the interest rates rise to historical norms.

When do expect, interest rates to rise? And why?
If the why has anything to do with a strengthening economy and a jump in inflation.... that will also lead to an increase in tax revenues gernerated by expanding economy...
And the best time to bring in govnernment austerity, is when the economy is expanding.

rickyp wrote:fate

I've yet to see anyone explain how we pay the interest on $21T when the interest rates rise to historical norms.

When do expect, interest rates to rise? And why?
If the why has anything to do with a strengthening economy and a jump in inflation.... that will also lead to an increase in tax revenues gernerated by expanding economy...
And the best time to bring in govnernment austerity, is when the economy is expanding.

This is so funny!

Why would interest rates go up from historic lows? Side-splitting!

You do know that in addition to overspending by $1T+ we are also printing $85B a month? That's another $1T a year in inflationary pressure. Sooner or later, the value of the dollar will demand interest rates going up--you can't print your way out of trouble, just as you can't spend your way out.

We won't expand like we should. In the last 90 days, we've had almost 5700 new regulations with more and more coming. Between Obamacare, Dodd/Frank, and the ever-growing EPA, we have a very "nice" braking effect courtesy of Government.

Archduke Russell John wrote:

freeman2 wrote:You know if Republicans passed a bill cutting taxes for the bottom 98 percent, then agreed to taxes going up on those making over 250k in return for large spending cuts then they might outflank Obama.

The problem with this that $250,000 is not a lot of money. And it is not just small business owners that might get hit. I live in Middletown, Bucks County and the Neshaminy School District. A Middletown Police officer married to a Neshaminy Teacher both with 10+ years experience could be making up to if not over $250,000 a year. Hell, I know a family like this. They are not the rich. They are solid middle class people living in a Levittown home and driving a mid-size family car.

They're rich! They're not paying their fair share!

fate

Sooner or later, the value of the dollar will demand interest rates going up--you can't print your way out of trouble

At what vaue? At what point against the Euro, the Yen or whatever currency do you think an interest rate hike will be triggered?
Has the US had ay trouble selling its debt? (The usual cause of an interest rate hike.)
I agree with you that an interest rate hike would be a problem. But they aren't expected for a couple of years, unless the economy picks up substantially faster than any predictions.

rickyp wrote:fate

Sooner or later, the value of the dollar will demand interest rates going up--you can't print your way out of trouble

At what vaue? At what point against the Euro, the Yen or whatever currency do you think an interest rate hike will be triggered?
Has the US had ay trouble selling its debt? (The usual cause of an interest rate hike.)

Please. Stop acting the fool.

If anyone knew precisely when interest rates would go up, he/she would be a billionaire.

Can the US borrow more than a trillion a year, print another trillion-plus, and NEVER face any lack of confidence in its currency?

I agree with you that an interest rate hike would be a problem. But they aren't expected for a couple of years, unless the economy picks up substantially faster than any predictions.

Fine, I'll be you. How much would the economy have to pick up for tax revenue to be sufficient to pay for double the current interest? Triple?

What evidence is there that the economy is about to "pick up substantially?"

fate

What evidence is there that the economy is about to "pick up substantially?"

Most indications are that any recovery will be slow, not rapid. Meaning that interest rates are not expected to rise for some time...
Unless, you can point to some other reason why interest rates will rise ...

fate

Can the US borrow more than a trillion a year, print another trillion-plus, and NEVER face any lack of confidence in its currency

Apparently, for the foreseeable future. Because most of the competing economies, and their currencies are also struggling. Those countries that have performed economically better than the US have seen their currencies appreciate, which affects some of their exports (Australia and Canada for instance), but interest rates haven't changed in either country either.
The greatest indicator that countries will start to lose faith in the US, is an increase in the required rates of US treasury Bonds.
But foreign and domestic investors continue to buy US bonds despite the conditions you describe, simply because the US economy and government are seen as a safer bet than most competitor nations, and those that are performing better than the US aren't large enough to offer a sovereign investor too much opportunity to cover...
So, although you are right that a sudden increase in interest rates might create problems for the US, in the short term, (next few years) its very unlikely that interest rates will rise .
Long term, the US still has a lot of positives in its economy. The US has a low median age, which usually predicts growth. The energy deficit is likely to be turned to a surplus, largely by natural gas, but with minor contributions from oil and renewable, and the rising cost of labour in Asian markets is bringing some lower end employment back to the US, Productivity is still high.
On the whole, Fate, deficits aren't a huge worry at this time. Structurally they are a long term problem. But it should be noted that the average Federal taxation to GDP ratio in years when the US has had surpluses is 19.8%. Today its 15%
Right there, you have an indication of why deficits are so large, historically..
The next is that Federal spending is at 25% of GDP. If the economy improves, and spending stays the same, that percentage goes down... Now, I agree that long term the spending does have to come down. By about 5 percentiles of GDP. How much is spending cuts and how much is as a result of growth ?
The problem with cross the board austerity, is that it has proven to stall economies... Without both growth and spending adjustments .... achieving a balance will be impossible. You cannot cut yourself to a balanced budget if it tanks the economy. (The UK has proved that most recently)

fate
Fine, I'll be you. How much would the economy have to pick up for tax revenue to be sufficient to pay for double the current interest? Triple

Moot. Not a scenario that has a chance of occurring.

rickyp wrote:fate

What evidence is there that the economy is about to "pick up substantially?"

Most indications are that any recovery will be slow, not rapid. Meaning that interest rates are not expected to rise for some time...
Unless, you can point to some other reason why interest rates will rise ...

Please, do the world a favor: stop being a donkey.

Interest rates are at historic lows and have been. How long can the Fed keep them this low? That depends.

However, isn't it obvious that if anywhere in the world becomes a more attractive investment than the US, we're hosed? The moment that "safe" does not equal "US Treasury notes," we're smoked.

fate

Can the US borrow more than a trillion a year, print another trillion-plus, and NEVER face any lack of confidence in its currency

Apparently, for the foreseeable future

How long is foreseeable? 50 years?

If not, the interest on the Debt is going to be a problem, especially as Obama seems determined to continue borrowing at least a trillion a year.

In 4 years, the Debt will be at least $20T. Even if interest rates are still (essentially) zero, that is a 25% increase in interest payments . . .

Does this begin to bring the light on for you?

Let's say in 8 years we owe $24T and interest rates are still zero. The interest payments will be 50% higher than they are now.

This is a problem.

How can we believe Democrats are serious about it when they are still beating their chests over cutting money for the Iraq war (that was over)?

Long term, the US still has a lot of positives in its economy. The US has a low median age, which usually predicts growth.

Irony alert:

You, who extol the virtues of small families, now say a "low median age . . . predicts growth."

But it should be noted that the average Federal taxation to GDP ratio in years when the US has had surpluses is 19.8%. Today its 15%

Federal spending is at 25% of GDP, way above the norm of 18%. That is why the deficits are so high. Again, look at the years you love: Clinton. In 1998, Federal spending was $1.7T. It is now more than double that. That's not inflation.

fate
Fine, I'll be you. How much would the economy have to pick up for tax revenue to be sufficient to pay for double the current interest? Triple

Moot. Not a scenario that has a chance of occurring.

Interest rates are currently lower than during the Great Depression. How long can we artificially keep them there? How long can we defy gravity? When we crash, will Canada bail us out?

fate

Interest rates are at historic lows and have been. How long can the Fed keep them this low? That depends.
quote]

Depends on what? I asked you that before, but you've never offered your explanation...

However, isn't it obvious that if anywhere in the world becomes a more attractive investment than the US, we're hosed? The moment that "safe" does not equal "US Treasury notes," we're smoked.

Ah. So you understand that sovereign debt competes for lenders? But you don't understand that those who buy sovereign debt see the USA as a safer bet then almost any other?
I'll bite; who do you think is offering a better alternative than the US now? Or likely to in the future?
Make your case...
Frankly you haven't got a clue. And if a republican was in the White House you'd be arguing on the other side, just because.

fate

You, who extol the virtues of small families, now say a "low median age . . . predicts growth

I understand how ambiguity is tough for your inflexible mind. However, the historical facts are that countries with a low median age have tended to generate the greatest economic growth. Mexico is well placed for this, and has indeed had very significant growth over the last few years... Mostly due to immigration, legal and not legal, the median age of the US is lowest amongst developed countries other than Mexico.

I take note of your reference to irony....
Elsewhere I have argued that over population is a problem for the environment. Essentially its akin to the issue of unsustainable debt. It is indeed ironic that our current economic systems rely on growth, and yet the planet we exist upon is starting to have serious problems because over population stress resources. If we continue on that course, why its kind of like unsustainable debt.
However, Fate, Man kind has figured out how to generate economic growth without population growth. Its called productivity growth.
And yes, the correlation still exists. Smaller average size families tend to be found in developed (prosperous) countries. As countries develop (prosper) the trend is almost always followed.

rickyp wrote:fate

However, isn't it obvious that if anywhere in the world becomes a more attractive investment than the US, we're hosed? The moment that "safe" does not equal "US Treasury notes," we're smoked.

Ah. So you understand that sovereign debt competes for lenders? But you don't understand that those who buy sovereign debt see the USA as a safer bet then almost any other?

Hey loser, I said that in the quote you cite above.

I'm sorry to get personal with you, but when you ask a question that I've answered in the very paragraph you are quoting, you are being dumb. Now, it is either intentional to get a rise out of me or you really are unintelligent.

I'll bite; who do you think is offering a better alternative than the US now?

Okay, maybe you really are an idiot. Should I limit my answer to one word per line?

How about I bold the pertinent parts? Maybe that will help you? No?

The moment that "safe" does not equal "US Treasury notes," we're smoked

Now, let's see . . . does that mean it has happened yet?

Shake your head rickyp.

Good.

Or likely to in the future?
Make your case...
Frankly you haven't got a clue.

But, at least I can read with comprehension.

Look, there are how many other countries in the world? If one of them, any one of them, becomes a safer bet than the US, our interest rates will go up.

Will that happen tomorrow? Probably not.

Five years from now? Maybe.

Here's what is knowable: no one can continue to borrow 40 cents of every dollar they spend indefinitely. The President has no other plan--that is the issue.

Sooner or later, interest rates will go up. Again, what part of "record" or "historic" low do you not understand? That means they're not going lower and will, sooner or later, go up.

And if a republican was in the White House you'd be arguing on the other side, just because.

If I was President, I would be railing against $1T budget deficits. There is no excuse for them. Worse, there is no excuse for having no plan after 4 years! Your Messiah is a joke.

fate

You, who extol the virtues of small families, now say a "low median age . . . predicts growth

I understand how ambiguity is tough for your inflexible mind.

I understand how consistency is impossible for yours.

However, the historical facts are that countries with a low median age have tended to generate the greatest economic growth. Mexico is well placed for this, and has indeed had very significant growth over the last few years... Mostly due to immigration, legal and not legal, the median age of the US is lowest amongst developed countries other than Mexico.

It's positioned us with a great number of unskilled, uneducated workers just waiting for the President to give them everything!

Mexico is "well-placed" for growth?

Sure, many countries with undeclared civil wars experience significant economic growth.

What troubles me is that there doesn't even seem to be a national conversation about spending. The media only seams to focus on the tax difference between the two parties, but I haven't seen any main stream media coverage of our excess spending. Am i mistaken about that?

Regarding family size, I don't think anyone is arguing that the government should make the decision on how many kids one should have. That seems to me to be a basic human right above and beyond even free speech. The question of what is good for the family and what is good for the country and what is good for the planet is a fair one. Certainly tax and other policies within reason can influence the decision. But overall, I'm uncomfortable with anyone making that decision for me.