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Old 01-20-2011, 03:35 PM   #61
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Well this should shake things up and start some interesting conversations.

House GOP Lists $2.5 Trillion in Spending Cuts - US News and World Report
That's the total, spread over 10 years. A bunch of that is in one-time savings:

80 billion - defunding the recent healthcare legislation and banning Justice from defending against legal challenges
45 billion - recapture remaining 'stimulus' funds
16 billion - repeal Medicaid FMAP increase to states (reinstates the cut in doctor reimbursements, etc)

The article also lists a bunch of annual cuts. It's a start, but not quite enough in sustained annual cuts to have balanced the FY 2008 budget, which they are basing this off of. Nothing that a couple years of double-digit GDP growth wouldn't fix, of course.

Some of the cuts in that list are pretty funny. Not the mohair subsidy! Oh noes! And the usual suspects; Repeal the Davis-Bacon Act (good luck), defund public broadcasting, nibble at federal employee unions, etc.

Even more interesting are the things not cut: DoD spending (Still almost as much as the rest of the world combined), almost all farm subsidies other than sugar (take that, Hawaii and California!), and of course The Third Rail of Entitlements.
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Old 01-20-2011, 08:57 PM   #62
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Originally Posted by BTravlin View Post
Well this should shake things up and start some interesting conversations.

House GOP Lists $2.5 Trillion in Spending Cuts - US News and World Report

Going back to the OP's question: If this bill is passed by the House and stays in play for some extended political wrangling over the next few months, what does the forum think would be the short term effect on markets? Why?
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Old 01-20-2011, 09:13 PM   #63
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That's the total, spread over 10 years. A bunch of that is in one-time savings: ...

Some of the cuts in that list are pretty funny. Not the mohair subsidy! Oh noes! And the usual suspects; Repeal the Davis-Bacon Act (good luck), defund public broadcasting, nibble at federal employee unions, etc.

Even more interesting are the things not cut: DoD spending (Still almost as much as the rest of the world combined), almost all farm subsidies other than sugar (take that, Hawaii and California!), and of course The Third Rail of Entitlements.
Yes, pretty disappointing, but better than nothing. Not even an ethanol cut in there (unless it was in code). Not the kind of substantive 'meet the problem head on' that we need, but I don't think either party is ready for that.

I hope to make it to the 'meet & greet' my rep will have again tomorrow. Maybe I can get some feedback on this.

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Originally Posted by Htown Harry View Post
Going back to the OP's question: If this bill is passed by the House and stays in play for some extended political wrangling over the next few months, what does the forum think would be the short term effect on markets? Why?

Wish I had gone short on mohair futures.

-ERD50
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Old 01-21-2011, 01:02 PM   #64
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Originally Posted by M Paquette View Post
That's the total, spread over 10 years. A bunch of that is in one-time savings:

80 billion - defunding the recent healthcare legislation and banning Justice from defending against legal challenges
45 billion - recapture remaining 'stimulus' funds
16 billion - repeal Medicaid FMAP increase to states (reinstates the cut in doctor reimbursements, etc)

The article also lists a bunch of annual cuts. It's a start, but not quite enough in sustained annual cuts to have balanced the FY 2008 budget, which they are basing this off of. Nothing that a couple years of double-digit GDP growth wouldn't fix, of course.

Some of the cuts in that list are pretty funny. Not the mohair subsidy! Oh noes! And the usual suspects; Repeal the Davis-Bacon Act (good luck), defund public broadcasting, nibble at federal employee unions, etc.

Even more interesting are the things not cut: DoD spending (Still almost as much as the rest of the world combined), almost all farm subsidies other than sugar (take that, Hawaii and California!), and of course The Third Rail of Entitlements.
Yes, they need to add more cuts in many more areas if they want to be taken seriously. We have hundreds of military installations around the world and surely we can do without a couple dozen of those at least. Neither side wants to touch agricultural subsides though. I guess nobody wants to piss Iowa off.
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CBO Analysis of Congressman Paul Ryan's Roadmap proposal
Old 01-24-2011, 11:30 PM   #65
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CBO Analysis of Congressman Paul Ryan's Roadmap proposal

http://www.cbo.gov/ftpdocs/108xx/doc...map-Letter.pdf

The good news is that The Roadmap does eventually reduce the deficit to zero.

The bad news is that the deficit reaches zero around 2060, and the preceding half century of deficits runs the national debt to about 77 trillion dollars. It looks like we'll still have to raise the debt ceiling.

On Medicare, the proposed voucher system does cap Medicare spending as a portion of GDP, keeping it under 4% past 2050. That's compared to the current situation, projected to be 9% in 2050, rising to 15% in 2083. Both the level of expected federal spending on Medicare and the uncertainty surrounding that spending would decline, but enrollees’ spending for health care and the uncertainty surrounding that spending would increase.
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Old 01-27-2011, 03:34 PM   #66
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I just read a Reuter's poll that says 71% of Americans don't want Congress to raise the debt ceiling.
. . . 80% don't want their taxes raised, and 82% don't want their benefits cut.

99% are morons.
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Old 01-27-2011, 03:39 PM   #67
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http://www.cbo.gov/ftpdocs/108xx/doc...map-Letter.pdf

The good news is that The Roadmap does eventually reduce the deficit to zero.
The bad news is that it doesn't when the tax proposals are included. The CBO analysis linked above doesn't factor in Ryan's plan to significantly cut taxes. From page 4 of the above linked CBO analysis . . .

Quote:
Other Tax Provisions. The proposal would make significant changes to the tax system. However, as specified by your [Paul Ryan's] staff, for this analysis total federal tax revenues are assumed to equal those under CBO’s alternative fiscal scenario (which is one interpretation of what it would mean to continue current fiscal policy)
So much for seriousness.
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Old 01-27-2011, 04:27 PM   #68
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. . . 80% don't want their taxes raised, and 82% don't want their benefits cut.

99% are morons.
Noticed that, didja?

The thing about polls is that rather than representing some sort of collective wisdom of the people, they are more of a reflection of the lowest common denominator. If you can get some yahoo with a megaphone to repeat anything often enough, it starts to sound familiar, and will likely be regurgitated in response to inquiries.

We have a Congress, rather than direct governance through polls, for a reason. Congresscritters are supposed to be a deliberative body with our best interests in mind, with polling information merely one more source of information for them. Of course, they do have to survive the poll that counts, the elections, but in theory if they've acted with our best interests in mind, and clearly communicated that, then they have a fair crack at being re-elected.

Of course, for them to act with our best interests in mind, and communicate that back to us, they have to be heard over the noise from all the yahoos with megaphones.

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Old 01-27-2011, 04:41 PM   #69
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The bad news is that it doesn't when the tax proposals are included. The CBO analysis linked above doesn't factor in Ryan's plan to significantly cut taxes. From page 4 of the above linked CBO analysis . . .

So much for seriousness.
Well, a fella's gotta have his bread and circuses. Under the alternative scenario, with a 28% of GDP annual deficit and 433% of GDP debt in 2060, almost doubling by 2080, I'm sure that the good Congressman and his colleagues will find the golden showers of trickle-down economics adequately stimulating to the nation.

Or not.

The CBO document compared the Roadmap proposal, assuming that Congress can stick to it for half a century (not a great assumption) with what the CBO calls the alternative scenario, which rather than adhering to current law, follows what is more likely to happen based on past history, with Congress patching Medicare payments, the AMT tax thresholds, and similar tweaks every year or two.
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