"Red Ink": A frank conversation on the federal debt

[Lazarus]

Those of you who don't want your Social Security are free not to claim it. As I won't be around forever I think I will take mine when I am eligible.

I would have preferred to not be in the system at all. Since I did not have a choice about the contributions I do feel I should get some return on my contributions.

I am not opposed to modifing the SS system. But care must be taken on changes made to older contributors. No time to make up the loss.

Retiring without any Social Security is not realistic for most people, probably its all many people have.

[ziggy29]

Quote:

Originally Posted by marko A hundred years of waste, fraud, entitlements and $18,000 wrenches and suddenly I'M the one who has to sacrifice?

Yes, by all means we should emphasize eliminating fraud and waste. But even when get rid of as much as we can (keeping mind that it's possible to spend more on enforcement and compliance than the cost of the fraud itself), we'd probably not even make up 10% of the deficit.

The other 90% still has to come from tax increases and spending/entitlement cuts that collectively affect US, most likely (not me, not you -- US). That's where the "you go first" attitude -- the belief that only *other people* should feel the pain -- is causing a kick-the-can attitude, ensuring we'll never fix anything.

Quote:

Originally Posted by Lazarus I am not opposed to modifing the SS system. But care must be taken on changes made to older contributors. No time to make up the loss.

And I agree -- I've already said so. Such "care" can make sure that those on moderate means get theirs while Warren Buffett doesn't (I'd even set the phaseout threshold fairly high, say $200-250K at minimum.) A blanket line in the sand based on age -- 100% protected at age X, 100% screwed at age X-1 -- is just not good policy and just creates generational warfare. Slowly phased in, sure, so that there's no big difference in any two individuals just 1-2 years apart, fine -- an all or nothing line in the sand (such as "over 55 = saved, under 55 = screwed"), no. That's horribly unfair to those just barely on the wrong side of the line.

[Mulligan]

Quote:

Originally Posted by FinanceDude That explains the $125 hammers and the $250 toilet seats of yore.........

That is why I always say the government should hire multitudes of retired policemen and accountants looking for some retirement income. They are hired for $0 money, but are able to claim 20% of the fraud monies uncovered. Yes, we might make some instant millionaires, but in the process we save untold amounts of dollars for the tax payer. Nothing like an incentive to work when it is all performance based!

[ziggy29]

Quote:

Originally Posted by Mulligan That is why I always say the government should hire multitudes of retired policemen and accountants looking for some retirement income. They are hired for $0 money, but are able to claim 20% of the fraud monies uncovered. Yes, we might make some instant millionaires, but in the process we save untold amounts of dollars for the tax payer. Nothing like an incentive to work when it is all performance based!

But would potentially also lead overzealous individuals into making life hell for others by claiming fraud where none really exists.

[marko]

Ziggy29: In all seriousness, I appreciate your point and sincerity.

I just don't get it. I just honestly don't believe this is something that can be 'fixed'.

I'm not a doom and gloomer. I'm not a fatalist...I'm trying to look at it realisticaly.

To me, the train went off the tracks 80+ years ago and it ain't getting back on those tracks. Collectively, our great-grandads stuck their kids with the bill, who stuck our dads with the bill, who've stuck us with the bill.

The whole thing got away from us a long time ago and at this point, there are just way, way too many moving parts to think it can be fixed well enough to be acceptable to any majority.

A Frank Discussion on the Debt: I'm all for "sacrifice" in order to put out a kitchen fire, but look closely: the house is fully engulfed.

[FinanceDude]

Some of us "average Americans" DO know something about govt spending and the deficit and such. $16 trillion is not a small amount of money!

[Alan]

Quote:

Originally Posted by FinanceDude Some of us "average Americans" DO know something about govt spending and the deficit and such. $16 trillion is not a small amount of money!

But, the deficit is $1 trillion, the debt is $16 trillion.

Sorry, couldn't resist.

[haha]

Most of us reading this today will never see an improvement. Much more likely we will see further deterioration in morale and finances. I hope someone will point to a successful, positive, remake of a modern social democracy, because I can't think of one.

Ha

[73ss454]

Quote:

Originally Posted by marko Well, I've worked very, very hard for my money. Did all the right things along the way too. But if the government wants to drain me dry (and reneg on the social contracts I made with them) because they spent like a drunken sailor, I'm all for it! Ziggy, you go first and I'll be right behind you.

+1 Me too!

[FinanceDude]

Quote:

Originally Posted by Alan But, the deficit is $1 trillion, the debt is $16 trillion. Sorry, couldn't resist.

I included the debt in the "and such" part of my post.........

[Alan]

Quote:

Originally Posted by FinanceDude I included the debt in the "and such" part of my post.........

So, just the usual finance-speak of using the word deficit in the sentence and the number $16 trillion, which actually refers to "and such".

Got it, a good example of how the average American is confused with all this stuff

[frayne]

Actually I think we were screwed about thirty years ago when they first started to raise the debt ceiling, and have done so in a bipartisan way until recently.

[Alan]

Quote:

Originally Posted by frayne Actually I think we were screwed about thirty years ago when they first started to raise the debt ceiling, and have done so in a bipartisan way until recently.

Why do we have a debt ceiling? Has the debt ceiling ever stopped us from borrowing more? Do other industrialized countries have a debt ceiling? (their politicians argue about their countries' debt levels all the time but I don't recall a hard and fast limit that they legally cannot exceed without dire consequences)

[frayne]

A little history on the debt ceiling and why we have it.

Why Do We Even Have A Debt Ceiling Law?

[gauss]

Quote:

Originally Posted by Mulligan I soured on government efficiency ... ... I thought they would be excited, instead they were mad at me and told me, their budget would be cut next year because of it. Thats when I realized the system is set up in a way not to be efficient with money.

I have seen this many times in the MegaCorp world.

[Alan]

Quote:

Originally Posted by frayne A little history on the debt ceiling and why we have it. Why Do We Even Have A Debt Ceiling Law?

Thanks for the link. It appears that from it's introduction in 1917 it has only ever been a political instrument and never actually constrained spending. The debt ceiling is set by the same body (Congress) that sets the budget, so it is not a constraint as they can always increase it.

Quote:

At no time has the debt ceiling acted to restrain either Federal spending or Federal borrowing. Moreover, during the 30 year period from the late 1970s to today, the debt ceiling was routinely increased at least once every two years as we racked up more debt than we’d ever had in the previous 200 years of the Republic.

[george76]

Quote:

Originally Posted by Lazarus I am not opposed to modifing the SS system. But care must be taken on changes made to older contributors. No time to make up the loss.

It depends what they define as old. And it depends what they mean by modify. The changes I have seen would only apply to people below the age of 55. That seems very unfair to some one who is 54, 50 or even 45 years old. Someone who is 45 has paid in to the system for perhaps 20 years.

[Midpack]

I see we're still proving the authors point over and over, even with this (likely) above average intelligence crowd. Deficits will be brought under control sooner or later, almost certainly within the life time of most here I'd guess. But it won't be pretty, and it'll be considered grossly unfair by most people I suspect...fasten your seatbelt.

[GrayHare]

Kick-the-can means that rather than wean, the majority opt to go cold turkey from the government tit, probably because they've never experienced such upheaval. I agree with fasten your seatbelt.

[scrabbler1]

When I think about the consequences of a debt ceiling being hit, I recall what happened in New York City back in the 1970s. The city government had become accustomed to having area banks lend money endlessly until the banks shut their windows and stop lending. The city was only hours away from bankruptcy until it struck a deal with the unions and made some severe cost-cutting moves such an increase in the transit fare and to start charging tuition to attend city colleges.

The markets ended up forcing big changes to the business-as-usual, kick-the-can policies. I hope it doesn't come to that on the federal level.