To Cut The Deficit We Must Cut Large Categories

Ha, I'll gladly stop investing in tech stocks if it will reduce the deficit. What a great idea!

Oh, that's not what the link says once you read it. Never mind...
 
I suspect Ha was referring to the second article on the page that points out that defense spending is the elephant in the deficit room. The article points out that the deficit itself is a national security issue and so (presumably) is excess defense spending that contributes to it. +1 on that. But I also noted the lead article that asked if rising gas prices will kill the recovery. Maybe short term but there is an interesting interview with Vinod Koshla in Scientific American this month. Koshla is a venture capitalist who co-founded Sun and was involved in lots of high tech start ups in the 90s and early oughts. He is now focusing on "green technologies" but not just the standard solar and wind. He believes we are primed to develop some radical new technologies that can change the energy and carbon emission pictures dramatically. One area he thinks has promise is converting biomass to fuel (not today's subsidized corn ethanol). He thinks that in not too long some smart people could get a biofuel first plant producing at $75 barrel. After that he believes each iteration would drive costs down (a la Moore's law type economies). After 15 iterations it would be about $50 and by 2030 could be at $30 in 2006 dollars. Quite an interesting look at what may be coming.
 
You can eliminate the whole defense budget but that will not solve the problem. The elephant in the room is not defense spending - it is the American people and government realizing that continuing to spend more than you take in is the road to ruin for everyone. However, we are not there and I doubt we ever will get there because we are not willing to make the difficult choices. We want health care for all, social welfare programs, security etc.

The major choices were made in the Great Society plan of Johnson and have expanded and will continue to expand from there. Cost cutting suggestions will only slow down increases but not reverse them.

Look towards Europe for the future - VAT and increased taxes of all kinds.


Congressional Budget Office - Federal Debt and Interest Costs

The Congressional Budget Office (CBO) projects that, under current law, debt held by the public will exceed $16 trillion by 2020, reaching nearly 70 percent of GDP. CBO also projects that interest rates will go up. The combination of rising debt and rising interest rates is projected to cause net interest payments to balloon to nearly $800 billion, or 3.4 percent of GDP, by 2020.
 
donheff said:
I suspect Ha was referring to the second article on the page that points out that defense spending is the elephant in the deficit room. The article points out that the deficit itself is a national security issue and so (presumably) is excess defense spending that contributes to it. +1 on that. But I also noted the lead article that asked if rising gas prices will kill the recovery. Maybe short term but there is an interesting interview with Vinod Koshla in Scientific American this month. Koshla is a venture capitalist who co-founded Sun and was involved in lots of high tech start ups in the 90s and early oughts. He is now focusing on "green technologies" but not just the standard solar and wind. He believes we are primed to develop some radical new technologies that can change the energy and carbon emission pictures dramatically. One area he thinks has promise is converting biomass to fuel (not today's subsidized corn ethanol). He thinks that in not too long some smart people could get a biofuel first plant producing at $75 barrel. After that he believes each iteration would drive costs down (a la Moore's law type economies). After 15 iterations it would be about $50 and by 2030 could be at $30 in 2006 dollars. Quite an interesting look at what may be coming.
Click to expand...
Very inteersting, thank you. I'll read that article right away.

Yes, I was referring to the video interview about the defense budget.

Ha
 
dex said:
Cost cutting suggestions will only slow down increases but not reverse them.
Click to expand...

Quite right. Each American currently owes 45K that we know of and they're thinking about raising the debt ceiling. Any gov't cuts will result in lost GDP. We won't grow out of this either. Even during the booming 90's the deficit grew. I continue to say keep spending, enjoy the free ride as long as our creditors allow us to.
 
I for one do not know why the Military is not included in the cut process. Who said that we need to spread democracy around the world. It can spread w/o our help. Since we have drones why not create a service where a shield is around a country to defend itself. We can charge countries for the service and if someone decides to enter that DMZ w/o authorization - the drone opertator deals with them. This will reduce our armed services and keep everything simple. Dale Brown, ex Air Force Captain wrote a book, see link, that outlines this using oil platforms. Let's use or advancements in technology to solve these problems. We already do this now on the Iraq boarder! It works !

Hammerheads (Independent, book 2) by Dale Brown
 
If we're really serious about fixing our fiscal problems, all [-]sacred cows[/-] options must be on the table.
 
HFWR said:
If we're really serious about fixing our fiscal problems, all [-]sacred cows[/-] options must be on the table.
Click to expand...

Yep. There are 3 huge problems in the budget. One is oft ignored. I'm glad to see an expert (Robert Gates) actually touch the issue.
 
Texas Proud said:
I think they need to cut $78B per year... not over a 5 year period...
Click to expand...

Can anyone decode this for me? I really don't know what they mean.

The final plan calls for $553 billion spent in 2012 — $13 billion less than the Pentagon wanted, but still representing 3 percent in real growth.
Click to expand...

How is 3% real growth in spending cutting anything by $78B? Where did it go?Where does $78B fit in an equation? I'm lost. Was this their intent?

-ERD50
 
78B dollars divided by 308M citizens...hmmm... WOW that's 253 dollars of the 45K I already owe. Peanuts...
 
ERD50 said:
Can anyone decode this for me? I really don't know what they mean.



How is 3% real growth in spending cutting anything by $78B? Where did it go?Where does $78B fit in an equation? I'm lost. Was this their intent?

-ERD50
Click to expand...



Yes... they say they will cut $78 billion out of the budget over the next 5 years... I say they need to cut $78 billion PER YEAR out...


Gvmt budget is a game in itself.... IF you budget it last year... for 2015... you can come in this year and cut that budget and 'save' money, even if 2015 is higher than today.. simple... :whistle:
 
ERD50 said:
Can anyone decode this for me? I really don't know what they mean.



How is 3% real growth in spending cutting anything by $78B? Where did it go?Where does $78B fit in an equation? I'm lost. Was this their intent?

-ERD50
Click to expand...

I suspect that this is a rhetorical question, but in case it is not this is my understanding of how government budget cuts work

Let say Clif's current budget is
spending $50,000 in 2011, $54,000 in 2012, and $60,000 in 2013.

Under my new austerity budget the numbers look like $50,000 in 2011, $53,000 in 2012, and $56,000 in 2013.

Obviously, I have cut spending by $5,000 ($1,000 in 2012, $4000 in 2013). This represents slashing my budget by 10% from current level $5,000/50,000.

I have also made massive cuts in the growth of spending 25% in 2012 (a $3,000 increase instead of $4,000) and 50% in 2013 ($3,000 increase from 2012 level vs a planned $6,000).

Now you small minded folks, who take things very literally may argue that actually I haven't cut anything at because my spending has increased in two years from $50,000 to $56,000. But this is only because you fail to comprehend that I have actually cut my budget by 10% by foolishly looking at actual spending vs the all important budgeted spending.

The bonus question is what happens in 2013 when the actual numbers come in? We find that I actually spent $50,000 in 2011, $53,000 in 2012, and $59,000 in 2013. Some of you might claim that spending increased 18% from 2010 to 2013. This would the wrong answer of course. The correct answer is that spending was flat in 2011 (since the original budget was $53,000) and dropped by 'almost' 2% in 2013 ($59,000 vs $60,000 budgeted.).
 
clifp said:
Originally Posted by ERD50
Can anyone decode this for me? I really don't know what they mean.



How is 3% real growth in spending cutting anything by $78B? Where did it go?Where does $78B fit in an equation? I'm lost. Was this their intent?

-ERD50
Click to expand...
I suspect that this is a rhetorical question, but in case it is not this is my understanding of how government budget cuts work
Click to expand...

Not entirely rhetorical. Yes, I figured that a 'partial reduction in future increases' were being called 'savings', but I really am lost on where the $78B number fits in all of that, and what happens in year 6. I couldn't follow that.

-ERD50
 
Dranoel said:
I think this is an informative excercise...every voter should have a go at it. In fact, it would be useful to see each member of congress' solution to the puzzle :cool:: The Budget Puzzle: You fix the budget
Click to expand...


Interesting. I solved it.

2 options:


  1. Totally eliminate Social Security and Medicare (not my choice)
  2. Reset estate and income taxes, cut govt across the board, eliminate tax loopholes, and better control the growth of costs related to healthcare by managing overall program better (scale economies, waste, fraud, inefficiencies, etc)
 
These are great solutions. I did the puzzle and fixed the budget 100% in spending cuts, 0% from tax increases.

Also:
Privatize the post office
Sell all unused federal properties (Thomas Jefferson did it and raised mucho $)
Privatize education
Flat tax with no loopholes

We also need a balanced budget amendment going forward so that politicians can't put us back into this situation again.
 
Ronstar said:
These are great solutions. I did the puzzle and fixed the budget 100% in spending cuts, 0% from tax increases.

Also:
Privatize the post office
Sell all unused federal properties (Thomas Jefferson did it and raised mucho $)
Privatize education
Flat tax with no loopholes

We also need a balanced budget amendment going forward so that politicians can't put us back into this situation again.
Click to expand...


But they could... all balanced budget amendments have an out in time of war or financial stress... that describes all years since 9/11....
 
You must log in or register to reply here.

Similar threads

T
All Your Worth (Book Review)
Replies
5
Views
673
walkinwood
walkinwood
Tranquility Base
When to Sell Positions With Unrealized Gains
2
Replies
38
Views
2K
TheWizard
T
NW-Bound
Retail Investors Badly Trailing the S&P 500
2 3 4
Replies
82
Views
7K
Markola
Markola
T
It would have been funny if it weren't real
Replies
7
Views
2K
frank2009
F
audreyh1
Big Tech Layoffs ahead of Recession
2
Replies
48
Views
5K
brett
B

Latest posts

Back
Top Bottom