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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 09:30 AM   #41
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

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But -- Warren Buffet has believed dollar demise for a bunch of years, took enormous Forex positions, and I don't think it has panned out so far...
He did well in 2004-5 and gave some of it back in 2005-6.

From page 18 of the 2005 annual report: "My views on America’s long-term problem in respect to trade imbalances, which I have laid out in previous reports, remain unchanged. My conviction, however, cost Berkshire $955 million pre-tax in 2005. That amount is included in our earnings statement, a fact that illustrates the differing ways in which GAAP treats gains and losses. When we have a long-term position in stocks or bonds, year-to-year changes in value are reflected in our balance sheet but, as long as the asset is not sold, are rarely reflected in earnings.
For example, our Coca-Cola holdings went from $1 billion in value early on to $13.4 billion at yearend 1998 and have since declined to $8.1 billion – with none of these moves affecting our earnings statement. Long-term currency positions, however, are daily marked to market and therefore have an effect on earnings in every reporting period. From the date we first entered into currency contracts, we are $2.0 billion in the black.
We reduced our direct position in currencies somewhat during 2005. We partially offset this change, however, by purchasing equities whose prices are denominated in a variety of foreign currencies and that earn a large part of their profits internationally. Charlie and I prefer this method of acquiring nondollar exposure. That’s largely because of changes in interest rates: As U.S. rates have risen relative to those of the rest of the world, holding most foreign currencies now involves a significant negative “carry.” The carry aspect of our direct currency position indeed cost us money in 2005 and is likely to do so again in 2006. In contrast, the ownership of foreign equities is likely, over time, to create a positive carry – perhaps a substantial one."
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 10:08 AM   #42
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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Originally Posted by Charles
the long term pandering to the AARP, etc. with SS, medicare and especially the recent prescription drug benefits concern me most. Eventually we may spend ourselves into an entitlement situation where we cannot pay for an adequate defense, and that could make for a very uncomfortable retirement.

All you can do is diversify / hedge, and speak your mind politically / vote.
the long term pandering to neocons and evangelicals, along with pork to defense contrators and government corruption concern me most. Eventually we may spend ourselves into a deficit situation where we cannot pay for social security and medicare, and that could make for a very uncomfortable retirement.

All you can do is diversify / hedge, and speak your mind polictically / vote.
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 10:13 AM   #43
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

Thank you, Nords.
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 10:26 AM   #44
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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Originally Posted by bosco
the long term pandering to neocons and evangelicals, along with pork to defense contrators and government corruption concern me most. Eventually we may spend ourselves into a deficit situation where we cannot pay for social security and medicare, and that could make for a very uncomfortable retirement.

All you can do is diversify / hedge, and speak your mind polictically / vote.
Which of the tasks below is specificaly mentioned as a role of the federal government in the US consitution:
a) National defense
b) Free health care
c) Assuring that citizens have a comfortable retirement

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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 10:29 AM   #45
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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Which of the tasks below is specificaly mentioned as a role of the federal government in the US consitution:
a) National defense
b) Free health care
c) Assuring that citizens have a comfortable retirement

d) Promote the general welfare
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 10:33 AM   #46
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

Yes, that's the one they always twist use, samclem ... :
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 10:37 AM   #47
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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Originally Posted by Charles
Yes, that's the one they always twist use, samclem ... :
because we know that's the one that bugs the neocons the most....of course the true general welfare can only be as the neocons interpret it. any other use is obviously twisting it.
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 10:44 AM   #48
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

Maybe we just need a good description of what "promote the general welfare" means in today's society.

I think the Founding Father's idea of what encompassed that in the 1700's is a far cry from what we as Americans assume it to be today........

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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 10:53 AM   #49
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

Ironically, true neoconservatives are usually described as accepting much more social spending / engineering than conservatives and libertarians, evidenced by the overspending of the Bush admin ...
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 11:21 AM   #50
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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Maybe we just need a good description of what "promote the general welfare" means in today's society.

I think the Founding Father's idea of what encompassed that in the 1700's is a far cry from what we as Americans assume it to be today........
OK, I'll bite. I take 'promote the general welfare' very broadly (liberally?). I think that it means stability and orderliness for folks. By this, for example, I mean that we need a military or national defense force so that if some horrible event happens we are prepared to face it quickly and adequately. Therefore, national defense forces provide a form of stability (and a force to use if some disruption occurs somewhere that will affect us; it's good to have a force ready to act in emergencies). All laws in general and in particular promote the general welfare because they tell us in black and white : what behaviors are allowed and which ones aren't. This brings stability and orderliness to our lives. We know what will happen if we do or don't do certain things; they explain consequences. Does SS promote the general welfare? Yes and no. It acts as economic stability for a fairly large proportion of our citizens, those retired and those who need SSI. One doesn't have to worry quite so much if one dies and ones children are left alone in the world. Some little bit of money will be there for them. This is stabilizing for everyone to know SS is there and acts as a safety net. The current insecurity of SS is de-stabiliizing to many--as is $8.5 trillion national debt.

When I look at new laws and various activities of our leaders I always try to find out how they promote the general welfare first and how these laws and so forth act on individuals second. "Promote the general welfare" is in the Preamble for a reason. It should govern over all that follows.
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 11:34 AM   #51
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

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Ironically, true neoconservatives are usually described as accepting much more social spending / engineering than conservatives and libertarians, evidenced by the overspending of the Bush admin ...
What about fiscal conservatives? I think we are the forgotten ones..........
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 12:14 PM   #52
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

I'm sure that the view of "common welfare" as being the same as "welfare state" is far removed from the intent of the framers.

Still, as much as my libertarian tendancies pull me to reject all this redistribution of wealth (that is, forcibly seizing one person's assets to give to another), the role of government in fostering stability, as pointed out by Greg, is worth something in the real world. Though I wouldn't go as far as Bernstein does in fawning over the wonderful benefits of SS to our republic, the basic point he makes in this article is worth considering.

http://www.efficientfrontier.com/ef/900/ss.htm

If SS and other efforts are what it takes to prevent a majority of voters from demanding confiscation of all property and redistribution according to need, then I suppose this is the best that can be done. But, it is probably just postponing the inevitable.

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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 01:32 PM   #53
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

OK guys, let's read the Constitution first, before assuming what the framers intended.

The preamble reads:

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Article 8 concerns the powers of Congress. It says:

Section 8: The Congress shall have power
to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States;
To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
To provide for the punishment of counterfeiting the securities and current coin of the United States;
To establish post offices and post roads;
To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
To constitute tribunals inferior to the Supreme Court;
To define and punish piracies and felonies committed on the high seas, and offenses against the law of nations;
To declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;
To raise and support armies, but no appropriation of money to that use shall be for a longer term than two years;
To provide and maintain a navy;
To make rules for the government and regulation of the land and naval forces;
To provide for calling forth the militia to execute the laws of the union, suppress insurrections and repel invasions;
To provide for organizing, arming, and disciplining, the militia, and for governing such part of them as may be employed in the service of the United States, reserving to the states respectively, the appointment of the officers, and the authority of training the militia according to the discipline prescribed by Congress;
To exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square) as may, by cession of particular states, and the acceptance of Congress, become the seat of the government of the United States, and to exercise like authority over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings;--And
To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.



There is a long history of constitutional scholarship, acts of Congress and reaffirmations by the Supreme Court that the power to provide for the general welfare is broad. No serious scholar questions that providing social security, medicare or other social welfare programs are well within the authority of Congress and are part of providing for the general welfare the the United States. Similarly, no serious scholar questions that Article 8 allows taxing to support these programs.
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 02:11 PM   #54
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

Martha,

- Thanks for excerpt, very helpful.
- I am certainly not an expert on the rulings, established precedents, etc which have occured in the intervening years. Still, just a perusal of the section you posted is illuminating. Looking at the detail that the framers went into in enumerating what they specifically envisioned, is it possible that they simply forgot to mention something like "such medical care as may be deemed suitable by constituted authorities" or "provision for food, clothing and other essentials for the indigent"? But, there's nothing like that here. Certainly they spelled out some far more picayune items in other areas.

But, there's no doubt that your take on the role of government is far more prevalent today than mine. So, I worry . . .

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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 02:33 PM   #55
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

samclem,

Martha fails to mention the tenth amendment to our constitution which states:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."

It is strange that the constitution spells out in specific details what the congress can do, then says "oh yeah, and everything else, as long as it is for the general welfare".
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 02:53 PM   #56
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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Originally Posted by samclem
I'm sure that the view of "common welfare" as being the same as "welfare state" is far removed from the intent of the framers.

Still, as much as my libertarian tendencies pull me to reject all this redistribution of wealth (that is, forcibly seizing one person's assets to give to another), the role of government in fostering stability, as pointed out by Greg, is worth something in the real world. Though I wouldn't go as far as Bernstein does in fawning over the wonderful benefits of SS to our republic, the basic point he makes in this article is worth considering . . . .

If SS and other efforts are what it takes to prevent a majority of voters from demanding confiscation of all property and redistribution according to need, then I suppose this is the best that can be done. But, it is probably just postponing the inevitable.
samclem:

We may be even less far apart than you think. I don't think a mass redistribution of property is a good choice either. But historically, for example when Rome moved into an uncivilized territory and de-savaged it, they really did bring stability and order to someplace where it hadn't existed before. They set up rules of law that governed all the folks and all the behaviors, unlike the 'survival of the fittest world' that preceded it, where a club to the head could end everything for you and your family in few short swings.

And I'm sure after thinking about it that you too prefer some taking of property by the gov't. You like your highways don't you? They were taken with some sort of 'just' compensation process, just as your electricity and natural gas were delivered to you in the same way. It's just that none want unknown or unfair 'taking.' We all wanna know what's coming and how to get out of the way--if it's bad stuff a comin. All of these takings were done thru due process. And, as always, a few individuals felt they got the short end of the stick. Most folks want some moderate amount of 'taking' if it's fairly done and for a greater good, ever more and better services and products at low prices. But it almost inevitably means that someone may lose the family homestead at times.

Philosophically, I didn't like W's approach to SS reform, much as I don't currently like his supply-side 'lower taxes but keep on spending spree' (with fingers crossed that it'll produce more growth ultimately). Like I hinted elsewhere if such was the case then I'd settle for a tax rate of 1% that produces only 25% of an infinite tax revenue stream. I don't trust that type of magical thinking stuff, so when he presented his SS fix last time I was suspect right off the bat. As were most others at the time. Are there ways of fixing SS so it works better for everyone, even future generations? Sure! But I tuned out W for many of the same reasons others on this board have also: His facts and presentations are too simplistic and suspect for me.



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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 03:47 PM   #57
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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I think the Founding Father's idea of what encompassed that in the 1700's is a far cry from what we as Americans assume it to be today........
d'ya think?

d'ya think they envisioned semi-automatic weapons when they wrote the 2nd amendment? Nukes? How about "freedom of speech" as a plausible basis for obscene corporate campaign contributions?

As for "general welfare" I also doubt that the framers envisioned the cost and role of health care and knowledge advances in today's society. Wooden teeth were probably cheap and chemotherapy non-existent. Doctors were trained by apprenceship, and I don't believe they were nearly as expensive relative to cost of the day.

Thomas Jefferson recommended a constitutional convention every 20 years. Clearly these men realized their ideas would need modification. It strikes me as no coincidence that in many cases the same people that enshrine mythology written millenia ago (e.g. the bible) as absolute truth often treat the constitution as unchangeable and sanctified. Although I realize there are many exceptions to this.

sometimes things change. People adapt. Improvements get made. Ideas evolve and develop.

I personally take exception to the notion that those of us fortunate enough to be able to afford decent health care (this includes me) somehow deserve to have it and all the other poor schmucks who can't are just lazy and undeserving. I'd rather pay a bit more in tax than either trip over bodies in the street or create bodies in foreign lands and call it "defense."
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-22-2006, 04:05 PM   #58
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

Conversely, the govt. should not do things don't "promote the general welfare"...
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic
Old 11-22-2006, 06:31 PM   #59
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion defic

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samclem,

Martha fails to mention the tenth amendment to our constitution which states:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."

It is strange that the constitution spells out in specific details what the congress can do, then says "oh yeah, and everything else, as long as it is for the general welfare".
I didn't mention it because it wasn't relevant to the discussion as the Supremes have ruled that national programs like social security and medicare are allowed under the general welfare clause.

You want a broad reading of the constitution that the framers probably never intended, look at the broad interpretations of the commerce clause by the Supreme Court. Take the states vs the feds positions on medical use of marijuana. In Gonzales v. Raich, the court ruled that the federal government has the power to arrest and prosecute patients and their suppliers even if the marijuana use is permitted under state law, because of its authority under the federal Controlled Substances Act to regulate interstate commerce in illegal drugs.
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?
Old 11-23-2006, 10:20 AM   #60
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Re: Isn't anyone leary of our government defaulting with our 8.5+ Trillion deficit?

We can all cite examples where we disagree with the Supremes.

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