Even more political rants

[lets-retire]

I doubt there's any need to worry about the Democrats starting any more entitlement insurance programs. There's no money for the ones we have now. The only new taxes will be raised to pay back the debt created by 8 years of Mr. Bush.

Don't you know there's always more money, we haven't hit the 100% tax rate, yet. We don't have a VAT on top of the income tax. The dead can still pass on some of their wealth.

 

[donheff]

No easy answer here - but first step is to make at an economic matter and not a political one. Let's quit scaring people - any effort to address SS is met by Dems painting Republicans as thieves wanting to take peoples checks away - they've been very effective with the uninformed.

I completely agree that it is an economic matter. The bottom line is that we were on a path to at least a degree of fiscal balance and the recent tax cuts completely undid that. You say you are a fan of tax cuts and I presume that means even more tax cuts. I would simply like to know how the hell we are going to deal with the deficit with the existing tax structure let alone more cuts.

 

[brewer12345]

I completely agree that it is an economic matter.

I don't. Decisions like this ultimately depend on one's view of what the world should look like and what is important. If you don't think that a social safety net is impotant, then the solution becomes obvious: whackety-whack. If you believe that the social safety net is important, then you head out in an opposite direction: shore up the system as best you can. This isn't a simple matter of Yen and Euros.

 

[greg]

I completely agree that it is an economic matter. The bottom line is that we were on a path to at least a degree of fiscal balance and the recent tax cuts completely undid that. You say you are a fan of tax cuts and I presume that means even more tax cuts. I would simply like to know how the hell we are going to deal with the deficit with the existing tax structure let alone more cuts.

This tax cut issue is all rather amusing laugh:- ) to me at this point and has put us into a weird situation. We elected a fellow who thinks tax cuts are a big answer to our problems. Some think that lower taxes are a sort of birthright due them . . . yet we expect our children and grandchildren to pay for our SS, Medicare and wars because some think lower taxes cure most everything.

Does anyone think that these younger folks won't expect this same birthright? Does anyone think they will want or will vote for less than what we get now? Remember, we are currently training them or have trained them in the past to think like us.

 

[brewer12345]

Does anyone think that these younger folks won't expect this same birthright? Does anyone think they will want or will vote for less than what we get now? Remember, we are currently training them or have trained them in the past to think like us.

As a 33YO, I fully expect to get cornholed over SS. That's OK with me if it keeps a lot of elderly people out of poverty. More worrisome, IMO, is Medicare. It is in worse shape and we really cannot do away with it.

 

[FinanceDude]

As a 33YO, I fully expect to get cornholed over SS. That's OK with me if it keeps a lot of elderly people out of poverty. More worrisome, IMO, is Medicare. It is in worse shape and we really cannot do away with it.

I too have NO PLANS for SS in my future. Medicare is so far in the red it makes SS look flush with cash......................

 

[donheff]

I don't. Decisions like this ultimately depend on one's view of what the world should look like and what is important. If you don't think that a social safety net is impotant, then the solution becomes obvious: whackety-whack. If you believe that the social safety net is important, then you head out in an opposite direction: shore up the system as best you can. This isn't a simple matter of Yen and Euros.

I may have miscommunicated Brewer. I agree that we need the social safety net of a progressively structured SS system. I see that as an economic issue. Just like I see the increasing deficit as an economic issue.

Of course I neglected to add that I also see both of these matters as intensely political at the same time.

 

[jeff2006]

More worrisome, IMO, is Medicare. It is in worse shape and we really cannot do away with it.

Why do our "leaders" spend so much time wringing their hands over SS when Med is in so much worse shape? I read recently the the unfunded Med liability is now six times the unfunded SS liability, and that part D is a major factor. This is one of the principal reasons I have total contempt for the Bush crowd. Fomenting fear about SS just about non-stop, all the while making the problem so much worse with part D. And then there is the provision in part D about prohibitiing any negotiations on the price of meds. End of rant.

 

[brewer12345]

Why do our "leaders" spend so much time wringing their hands over SS when Med is in so much worse shape? I read recently the the unfunded Med liability is now six times the unfunded SS liability, and that part D is a major factor. This is one of the principal reasons I have total contempt for the Bush crowd. Fomenting fear about SS just about non-stop, all the while making the problem so much worse with part D. And then there is the provision in part D about prohibitiing any negotiations on the price of meds. End of rant.

Because SS still provides a budgetary gravy train while Medicare does not?

I actually think Part D was a good addition. Execution has been sloppy, though.

 

[greg]

As a 33YO, I fully expect to get cornholed over SS. That's OK with me if it keeps a lot of elderly people out of poverty. More worrisome, IMO, is Medicare. It is in worse shape and we really cannot do away with it.

I heard a shoot-from-the-hip idea for a SS resolution the other day while at my insurance agent's office: We just add another tax. Add a 10% tariff on all imported goods, take that money as it accumulates and put it aside into private accounts for workers. Pick an arbitrary time such as 2008 for a beginning date. Those already retired wouldn't be entitled to a penny of this money. Those retiring in say 2010 would get two years worth of that fund but have their SS reduced by an equivalent amount. As a younger worker, you would have money under your control that would make up a larger portion of your gov't supplied retirement fund. The younger you are today the greater that proportion of non-SS monies, a sort of gradual decline in you non-expected SS monies and increase in the tariff funded monies. After forty-sixty years, no more SS around. But the whole thing is funded by a sort of general consumer tax on all buyers of foreign stuff. It is very similar to Bush's plan except where the money from, another new added tax : on the whole country.

It has lots of problems, obviously. But it amused me when I heard it. From a Liberal trying to think of some positive solutions. I liked it on the surface because it wasn't presented as a paradigm shift in thinking, which is always hard to digest.

And, to stay on topic, I think you-know-who completely botched his recommended SS fix in content and, especially, the presentation to the public.

 

[brewer12345]

Add a 10% tariff on all imported goods

Non-starter. Not only would this run afoul of just about every trade treaty we ever signed, but you'd get to see what inflation really looks like.

 

[Zoocat]

Oldbabe,
You lost me - are you equating Bin Ladens attack on the US with the US response to Russia during the cold war?
.

Arc, I'm sorry I didn't make myself clear. Bin Laden has expressed publically that Al Queda's intention is to bankrupt us. Their attacks, including 9/ll, have been aimed at our financial heart. By doing so, they lead us to spend more and more on defense, sometimes ineffectually, in the same way that we led the Soviet Union to match us in the arms race. It is a futile effort that leads to financial ruin, which is how we defeated the Soviet Union, although in the short term it may seem that we are making "progress" in the "war against terrorism." I know that this is a very unpopular viewpoint among those who believe our government has unlimited funds for defense.

 

[youbet]

Arc, I'm sorry I didn't make myself clear. Bin Laden has expressed publically that Al Queda's intention is to bankrupt us. Their attacks, including 9/ll, have been aimed at our financial heart. By doing so, they lead us to spend more and more on defense, sometimes ineffectually, in the same way that we led the Soviet Union to match us in the arms race. It is a futile effort that leads to financial ruin, which is how we defeated the Soviet Union, although in the short term it may seem that we are making "progress" in the "war against terrorism." I know that this is a very unpopular viewpoint among those who believe our government has unlimited funds for defense.

I generally agree with you Oldbabe. My concern is that even if the Dem's plans for getting us out of Iraq are successful, what do we do about terrorism? I'd like to think that non-military means such as negotiations and consensus would do the trick. But then I remember that even under Clinton and the Dems we had the relatively successful attack on the World Trade Center in '93 and other less impactful incidents. So, I fear it's possible the Dems will get us out of Iraq and pulled back home, but occassional terrorist events (a plane here, a poisoned water system there, etc.) will keep us spending big time. I think you're right, that's their plan.

 

[Arc]

Arc, I'm sorry I didn't make myself clear. Bin Laden has expressed publically that Al Queda's intention is to bankrupt us. Their attacks, including 9/ll, have been aimed at our financial heart. By doing so, they lead us to spend more and more on defense, sometimes ineffectually, in the same way that we led the Soviet Union to match us in the arms race. It is a futile effort that leads to financial ruin, which is how we defeated the Soviet Union, although in the short term it may seem that we are making "progress" in the "war against terrorism." I know that this is a very unpopular viewpoint among those who believe our government has unlimited funds for defense.

Interesting viewpoint - what do you suggest then?

 

[FinanceDude]

Arc, I'm sorry I didn't make myself clear. Bin Laden has expressed publically that Al Queda's intention is to bankrupt us. Their attacks, including 9/ll, have been aimed at our financial heart. By doing so, they lead us to spend more and more on defense, sometimes ineffectually, in the same way that we led the Soviet Union to match us in the arms race. It is a futile effort that leads to financial ruin, which is how we defeated the Soviet Union, although in the short term it may seem that we are making "progress" in the "war against terrorism." I know that this is a very unpopular viewpoint among those who believe our government has unlimited funds for defense.

Although you make a valid point, you are not looking at the economic reality of your statement. The Soviet Union had LITTLE economic output to begin with.......i.e. in the Communist way, the govt controls prouduction, productivity, etc. They can't come close to the economic output of a capitalist society and free market enterprise.

I agree we are spending a boatload of money on defense. BTW, our govt DOES have unlimited funds, as long as they control taxation..........

 

[Zoocat]

In order to keep up with the arms race, the Soviet Union resorted to short changing their society economically in every way. You may understand how we are on the same track if you take a close look at our debt, current and future (unfunded entitlements). The implications of continuing on this same path are fairly obvious, IMHO.

I wish I had a brilliant suggestion about what our foreign policy should be regarding terrorism. Containment worked during the cold war. We negotiated with the Soviets. But the world is a different place and there are fundamental problems in practicing "containment" with suicide bombing terrorists. But I think there needs to be a more rational viewpoint on what makes our country more secure and resistant to terrorist attacks. Spending billions in Iraq will not do it nor will all the millions spent on anti-terrorism boondoggles all over the country. There really is no way to make our country completely secure against a determined terrorist.

I think we as a nation have a steep learning curve ahead of us and it's really important that we elect leaders who are willing to look at the world situation through a different lens in this new nuclear age. That may require that we elect more independent thinkers , if any present themselves.

 

[Arc]

I don't. Decisions like this ultimately depend on one's view of what the world should look like and what is important. If you don't think that a social safety net is impotant, then the solution becomes obvious: whackety-whack. If you believe that the social safety net is important, then you head out in an opposite direction: shore up the system as best you can. This isn't a simple matter of Yen and Euros.

I agree that the decision to have it or not is a political one - with pros and cons - and that choice was made long ago. However the matter of delivery is economic - there are better ways than others - and the current ratio of the # of workers per SS recipient, combined with longer life spans, makes it obvious that a fix is an order. The inability for Republicans and Democrats to even agree on this simple point is the reason the cost of this entitlement program will continue to be pushed off on our children and grandchildren.

 

[Arc]

Some think that lower taxes are a sort of birthright due them . . .

I find this comment amusing - I think a little different. I think that Politicians see taxes as a their birthright due them so they can win votes - waste money - and redistribute wealth!

I am happy to pay taxes when I believe that government uses those dollars in a responsible way - and in ways that are provided for in the Constitution. If we took a hard look on how our money is being spent, I suggest we would get a few laughs, then we would get angry and then we would get very drunk. As long as things continue the way they have during my first 42 years, I will speak out loudly for lower taxes.

 

[greg]

I find this comment amusing - I think a little different. I think that Politicians see taxes as a their birthright due them so they can win votes - waste money - and redistribute wealth!

I am happy to pay taxes when I believe that government uses those dollars in a responsible way - and in ways that are provided for in the Constitution. If we took a hard look on how our money is being spent, I suggest we would get a few laughs, then we would get angry and then we would get very drunk. As long as things continue the way they have during my first 42 years, I will speak out loudly for lower taxes.

I agree with you about much of the waste in gov't and that it needs to be fixed. My problem with the birthright issue is a macro one. I find lowering taxes just to lower taxes leaves one huge deficit and problems for our children and retirement. Better to spend a little less now THEN lower taxes after the spending is reduced. I see an improper sequencing problem currently: lower taxes first then hope/dream gov't figues out spending issue afterwards. We can do much better; lower taxes are not a birthright. PAYGO is better

 

[Arc]

I agree with you about much of the waste in gov't and that it needs to be fixed. My problem with the birthright issue is a macro one. I find lowering taxes just to lower taxes leaves one huge deficit and problems for our children and retirement. Better to spend a little less now THEN lower taxes after the spending is reduced. I see an improper sequencing problem currently: lower taxes first then hope/dream gov't figues out spending issue afterwards. We can do much better; lower taxes are not a birthright. PAYGO is better

Lowering tax rates for individuals has actually resulted in record high tax revenues to the politicians. So I agree with you that it is a spending issue and would like to see some adult politicians actually address it. But in the meantime, I believe the answer is lower taxes and cut spending. But that it is way to logical!

 

[donheff]

Lowering tax rates for individuals has actually resulted in record high tax revenues to the politicians. So I agree with you that it is a spending issue and would like to see some adult politicians actually address it. But in the meantime, I believe the answer is lower taxes and cut spending. But that it is way to logical!

CBO, GAO, et al have concluded that the economic stimulus of tax cuts generates less than 10% of their costs. When you cut taxes you need to cut spending by 90% of the gross amount of the cut just to break even. Under PAYGO you would need to make the spending cuts to fit the revised budget.

 

[greg]

Lowering tax rates for individuals has actually resulted in record high tax revenues to the politicians. So I agree with you that it is a spending issue and would like to see some adult politicians actually address it. But in the meantime, I believe the answer is lower taxes and cut spending. But that is way too logical!

As I understand the Laffer Curve and some supply side stuff, it appears interesting on the surface but doesn't make any logical sense. I understand the one end of the Laffer curve where a 100% tax rate would cause zero revenue for the govt. That makes sense to me. Why would anyone work for free (unless it was a lot of fun and one didn't need any money)? But on the other end of the curve, zero taxes would create an infinite amount of revenue for the gov't. I have some trouble believing that. It suggests logical inconsistency to me. Is there some part I don't understand? Could you direct me to a website, perhaps, that explains its internal consistency--or lack thereof? Discovery of a tax system that works exactly like that sounds charming.