Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
To Cut The Deficit We Must Cut Large Categories
Old 01-05-2011, 10:20 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
To Cut The Deficit We Must Cut Large Categories

Technology stock picks & industry news: Tech Ticker, Yahoo! Finance
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-05-2011, 10:24 AM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,117
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...
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-05-2011, 11:43 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,644
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.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 01-05-2011, 12:21 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
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.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 01-05-2011, 12:25 PM   #5
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
Quote:
Originally Posted by dex View Post
You can eliminate the whole defense budget but that will not solve the problem.
Oh, it will! But maybe not in a way that we would want.
__________________
walkinwood is offline   Reply With Quote
Old 01-05-2011, 12:27 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by donheff View Post
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.
Very inteersting, thank you. I'll read that article right away.

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

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Old 01-06-2011, 10:21 AM   #7
Recycles dryer sheets
Pete's Avatar
 
Join Date: May 2008
Posts: 350
Quote:
Originally Posted by dex View Post
Cost cutting suggestions will only slow down increases but not reverse them.
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.
__________________
Pete is offline   Reply With Quote
Old 01-06-2011, 10:25 AM   #8
Recycles dryer sheets
In-control's Avatar
 
Join Date: Mar 2007
Posts: 319
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
__________________
Just Trekking thru!
In-control is offline   Reply With Quote
Old 01-06-2011, 11:19 AM   #9
gone traveling
 
Join Date: May 2008
Posts: 3,864
Quote:
Originally Posted by In-control View Post
It can spread w/o our help.
Better order your Rosetta Stone Russian and Chinese language courses early, before the price goes up.
__________________
Westernskies is offline   Reply With Quote
Old 01-06-2011, 11:42 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
If we're really serious about fixing our fiscal problems, all sacred cows options must be on the table.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 01-06-2011, 01:37 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Quote:
Originally Posted by HFWR View Post
If we're really serious about fixing our fiscal problems, all sacred cows options must be on the table.
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.
__________________
eridanus is offline   Reply With Quote
Old 01-06-2011, 03:25 PM   #12
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,117
Quote:
AP - Defense Secretary Robert Gates announced Thursday he will cut $78 billion from the Pentagon's budget in the next five years money that will come from shrinking the military's ground force, increasing health care premiums for troops and other politically unpopular cost-saving measures.
Gates plans to cut $78B from Pentagon budget - Yahoo! News
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 01-06-2011, 04:19 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,278

I think they need to cut $78B per year... not over a 5 year period...
__________________
Texas Proud is offline   Reply With Quote
Old 01-06-2011, 04:43 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,284
Quote:
Originally Posted by Texas Proud View Post
I think they need to cut $78B per year... not over a 5 year period...
Can anyone decode this for me? I really don't know what they mean.

Quote:
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.
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
__________________
ERD50 is online now   Reply With Quote
Old 01-06-2011, 05:01 PM   #15
Recycles dryer sheets
Pete's Avatar
 
Join Date: May 2008
Posts: 350
78B dollars divided by 308M citizens...hmmm... WOW that's 253 dollars of the 45K I already owe. Peanuts...
__________________
Pete is offline   Reply With Quote
Old 01-06-2011, 05:05 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,278
Quote:
Originally Posted by ERD50 View Post
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


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...
__________________
Texas Proud is offline   Reply With Quote
Old 01-06-2011, 09:19 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by ERD50 View Post
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
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 is offline   Reply With Quote
Old 01-08-2011, 11:44 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,284
Quote:
Originally Posted by clifp View Post
Quote:
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
I suspect that this is a rhetorical question, but in case it is not this is my understanding of how government budget cuts work
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
__________________
ERD50 is online now   Reply With Quote
Old 01-09-2011, 05:37 AM   #19
Dryer sheet aficionado
Dranoel's Avatar
 
Join Date: Jan 2007
Location: Full Time RVer
Posts: 27
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 : The Budget Puzzle: You fix the budget
__________________
Dranoel is offline   Reply With Quote
Old 01-09-2011, 06:19 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by Dranoel View Post
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 : The Budget Puzzle: You fix the budget

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)
__________________

__________________
chinaco is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
cut off point Khan FIRE and Money 43 10-18-2010 03:47 PM
GM to cut dividend by 50% cute fuzzy bunny FIRE and Money 11 02-08-2006 08:57 AM
Cut-Throat plattj1 Life after FIRE 20 12-17-2005 05:08 PM
Should Taxes Be Cut? Just Asking? Eagle43 Other topics 21 09-20-2005 05:21 PM

 

 
All times are GMT -6. The time now is 09:48 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.