Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
The Federal Budget And Why The US Is In Trouble
Old 04-09-2011, 06:02 AM   #1
Recycles dryer sheets
 
Join Date: May 2007
Posts: 371
The Federal Budget And Why The US Is In Trouble

One of the top stories of recent has to be the big battle on the Hill about trimming the federal budget. Last night an agreement was finally reached that would trim the budget by around 38 billion dollars.

This sounds great until you realize that it amounts to 1% of the federal budget. Yes folks, that's right. All this arguing back and forth for weeks, all this threat of a government shutdown, and they manage to trim 1%.

To put our federal budget and deficit problems in terms we can more easily understand, it is the equivalent of a family that spends 160K a year, but has an income of 100K a year. The husband and wife argue for weeks about what they are going to do to right the ship and they manage to come up with a reduction of 2K, leaving them still spending 158K a year on their 100K salary.

Anyone can see where this is going....and it is not good.
__________________

__________________
novaman is offline   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!

Budget Agreement & Deficit Spending
Old 04-09-2011, 06:08 AM   #2
Recycles dryer sheets
 
Join Date: Apr 2007
Posts: 71
Budget Agreement & Deficit Spending

I would say that one common topic on this forum is the concept of frugality and managing one's money closely.

I've also noticed a great divergence in views on various political topics.

So, here is a simple question:

Who here thinks that it is ok for our federal government to continue spending more money each year than they bring in?

To me, the budget issue is this simple, we must only spend what we bring in each year (less, of course, the amount we must allocate to pay off the existing debt). I would have much less heartburn as a citizen and taxpayer if the politicians were arguing about allocations within a pie chart that totaled 100% of the revenues..yep we could give it all to the arts or to fund abortions or to Medicaid, etc... Instead, we bring in around $2 Trillion and spend $3.6 Trillion and then hail a $38 billion cut as monumental.
__________________

__________________
cb7010 is offline   Reply With Quote
Old 04-09-2011, 06:13 AM   #3
Recycles dryer sheets
 
Join Date: Apr 2007
Posts: 71
I just posted a similar thread, not seeing this one first. I am simply amazed that we allow our government to operate like this, it's pure insanity.
__________________
cb7010 is offline   Reply With Quote
Old 04-09-2011, 06:58 AM   #4
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: 8,638
I hope you were both railing against the original Bush tax cuts and last year's extension of the Bush tax cuts because both actions vastly exacerbated the problem.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 04-09-2011, 07:00 AM   #5
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,085
Quote:
Originally Posted by cb7010 View Post
I just posted a similar thread, not seeing this one first. I am simply amazed that we allow our government to operate like this, it's pure insanity.
I just merged the thread you started.

One less thread to close when the fighting starts
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 04-09-2011, 07:01 AM   #6
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: 42,077
Quote:
Originally Posted by Alan View Post

One less thread to close when the fighting starts
Whaddya mean "when"?
__________________
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 04-09-2011, 07:16 AM   #7
Recycles dryer sheets
 
Join Date: Apr 2007
Posts: 71
Quote:
Originally Posted by donheff View Post
I hope you were both railing against the original Bush tax cuts and last year's extension of the Bush tax cuts because both actions vastly exacerbated the problem.
I am railing against Bush, Obama and every member of congress from both parties that has anything to do with us spending more than we bring in. It's not worth anybody's time to dwell on who specifically caused this, we should all be focused on how and who we will engage to fix it.

So, I will take that as one vote for repeal the tax cuts, raise taxes, and/or tax the rich. History shows that economies thrive most when taxes, regulation, and intervention are low (this is not my opinion, but historical fact); so, I will be interested to see how our "raise taxes" solution will work?

Personally, my solution would lean toward a gross downsizing of the federal apparatus to cover just the enumerated functions in the constituation along with a cessation of foreign military activities and a more laissez faire economic environment. But, I am aware there are many ways to skin a cat and so long as we are all talking about financial responsibility and getting things back in order, I will be satisfied.
__________________
cb7010 is offline   Reply With Quote
Old 04-09-2011, 07:24 AM   #8
Thinks s/he gets paid by the post
martyb's Avatar
 
Join Date: Nov 2006
Location: Bossier City
Posts: 2,182
What's wrong with tax cuts? How about reducing the waste? Do you believe no matter how much our government wants to take from our paychecks, it's ok....just keep on raising the taxes? To what point...100%? Then what?

We need tax cuts. We need MORE tax cuts, and those need to be funded by CANCELING programs that have no business being paid for with Federal tax dollars.
__________________
martyb is offline   Reply With Quote
Old 04-09-2011, 07:43 AM   #9
Recycles dryer sheets
 
Join Date: May 2007
Posts: 371
Quote:
Originally Posted by donheff View Post
I hope you were both railing against the original Bush tax cuts and last year's extension of the Bush tax cuts because both actions vastly exacerbated the problem.
As we all on these boards already know, it is not how much you make but how much you spend. (and besides, as already mentioned tax cuts do not reduce revenues)
__________________
novaman is offline   Reply With Quote
Old 04-09-2011, 07:46 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by martyb View Post
What's wrong with tax cuts? How about reducing the waste? Do you believe no matter how much our government wants to take from our paychecks, it's ok....just keep on raising the taxes? To what point...100%? Then what?

We need tax cuts. We need MORE tax cuts, and those need to be funded by CANCELING programs that have no business being paid for with Federal tax dollars.
Like the military.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 04-09-2011, 07:54 AM   #11
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: 42,077
Quote:
Originally Posted by brewer12345 View Post
Like the military.
I like them too...
__________________
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 04-09-2011, 08:01 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Oct 2008
Location: Naples
Posts: 2,161
I never followed government spending much and hence don't much about about the budget process. I always thought the first thing I would eliminate in the budget would be foreign aid; however, a friend told me that foreign aid was a money making proposition. The government doesn't really give "them" cash, rather it's giving goods and services provided by American business and industry, thereby creating work for our people. Anybody got a handle on this topic? I'd be interested in knowing how foreign aid really works.
__________________
JOHNNIE36 is offline   Reply With Quote
Old 04-09-2011, 08:06 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,400
It will not be a problem! Bill Gross, the Bond King, explains how it will play out. Because we, as a nation, refuse to act (isn't Congress selected by voters?), I do not see a way out, so I tend to agree with Bill Gross.
... the only way out of the dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways: 1) outright via contractual abrogation – surely unthinkable, 2) surreptitiously via accelerating and unexpectedly higher inflation – likely but not significant in its impact, 3) deceptively via a declining dollar– currently taking place right in front of our noses, and 4) stealthily via policy rates and Treasury yields far below historical levels – paying savers less on their money and hoping they won’t complain.
All I can do as an individual is to watch as this unfolds, in order to protect my stash in any which way. Heh heh heh...

Bill Gross's original article is here.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 04-09-2011, 08:21 AM   #14
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,137
Quote:
Originally Posted by brewer12345 View Post
Like the military.
Indeed, our deficit would be substantially less if we would stop invading foreign countries.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 04-09-2011, 08:34 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
It is a show for the next election.
__________________
chinaco is offline   Reply With Quote
Old 04-09-2011, 08:36 AM   #16
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,085
Quote:
Originally Posted by Gumby View Post
Indeed, our deficit would be substantially less if we would stop invading foreign countries.
I wonder if it would have been cheaper to let the Middle East etc do it's own thing, take the hit on sky high oil prices, and invest in alternatives to their oil.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 04-09-2011, 08:47 AM   #17
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
Quote:
Originally Posted by novaman View Post
As we all on these boards already know, it is not how much you make but how much you spend. (and besides, as already mentioned tax cuts do not reduce revenues)
....and we all know spending less and increasing your income is the quickest way to get rid of debt. 25 years of tax cuts and over spending have got us into this trouble. We need to cut spending and raise taxes if the deficit is truly the problem. I would give tax credits in areas that are directly related to growth like capital purchases and actually creating a new job. This is the recipe the US and IMF gives to every foreign country that gets into fiscal trouble, it's interesting that the US can't take it's own medicine.

We need tax reform to eliminate things like mortgage deduction, increase tax rates on the top 10% of income earners, better enforcement of company taxes, encourage growth by giving tax credits on capital expenditures and new job creation, slash the military budget and foreign deployments, increase SS age to 67, get better efficiency out of medicare and medicaid and cover more people. US has and expensive system that is difficult to access and produces poor outcomes. US has same life expectancy as Cuba but spends 10 times as much per capita so there's obviously room for savings without reducing outcomes.
__________________
nun is offline   Reply With Quote
Old 04-09-2011, 09:09 AM   #18
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: 8,638
Quote:
Originally Posted by donheff View Post
I hope you were both railing against the original Bush tax cuts and last year's extension of the Bush tax cuts because both actions vastly exacerbated the problem.
Quote:
Originally Posted by cb7010 View Post
So, I will take that as one vote for repeal the tax cuts, raise taxes, and/or tax the rich. History shows that economies thrive most when taxes, regulation, and intervention are low (this is not my opinion, but historical fact); so, I will be interested to see how our "raise taxes" solution will work?

Personally, my solution would lean toward a gross downsizing of the federal apparatus to cover just the enumerated functions in the constituation along with a cessation of foreign military activities and a more laissez faire economic environment. But, I am aware there are many ways to skin a cat and so long as we are all talking about financial responsibility and getting things back in order, I will be satisfied.
Quote:
Originally Posted by martyb View Post
What's wrong with tax cuts? How about reducing the waste? Do you believe no matter how much our government wants to take from our paychecks, it's ok....just keep on raising the taxes? To what point...100%? Then what?

We need tax cuts. We need MORE tax cuts, and those need to be funded by CANCELING programs that have no business being paid for with Federal tax dollars.
Quote:
Originally Posted by novaman View Post
As we all on these boards already know, it is not how much you make but how much you spend. (and besides, as already mentioned tax cuts do not reduce revenues)
Good luck guys. I was pulling in loads of $ when the Bush cuts went into effect. I thought they were insane then when they put lots of extra dollars in my pockets. And I think they are insane now. We flourished before them and saw no evidence that those cuts helped us flourish more. They certainly busted the 1990s surplus. I am willing to support drastic cuts in military spending and in health care spending. There isn't much to save outside of those. But we will never get where we need to go without revenue increases as well.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 04-09-2011, 09:38 AM   #19
Recycles dryer sheets
 
Join Date: Aug 2007
Posts: 401
Quote:
Originally Posted by Gumby View Post
Indeed, our deficit would be substantially less if we would stop invading foreign countries.
+1
__________________
DallasGuy is offline   Reply With Quote
Old 04-09-2011, 10:54 AM   #20
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Quote:
Originally Posted by nun View Post
We need tax reform to eliminate things like mortgage deduction, increase tax rates on the top 10% of income earners, better enforcement of company taxes, encourage growth by giving tax credits on capital expenditures and new job creation, slash the military budget and foreign deployments, increase SS age to 67, get better efficiency out of medicare and medicaid and cover more people. US has and expensive system that is difficult to access and produces poor outcomes. US has same life expectancy as Cuba but spends 10 times as much per capita so there's obviously room for savings without reducing outcomes.
Good start. How about another sacred cow, the DOT?
__________________

__________________
eridanus 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
Trouble Purron Other topics 13 01-27-2011 06:33 PM
Trouble Ahead??? Steve O FIRE and Money 114 02-04-2010 09:10 PM
Having a little trouble getting adjusted...... cardude Life after FIRE 50 05-18-2009 04:59 AM
Trouble With Access haha Forum Admin 14 05-05-2006 02:18 PM
54 yo trouble ferco FIRE and Money 35 12-15-2005 02:01 PM

 

 
All times are GMT -6. The time now is 06:08 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.