Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
The U.S. budget can't be balanced
Old 05-04-2012, 04:44 AM   #1
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
The U.S. budget can't be balanced

He makes some good points. It makes me wonder when and what kind of pain is coming.

__________________

__________________
Never surrender what you really want for what you want right now.
shotgunner 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!

Old 05-04-2012, 05:49 AM   #2
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
Shotgunner, how does this relate to early retirement?
__________________

__________________
MichaelB is offline   Reply With Quote
Old 05-04-2012, 06:00 AM   #3
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
I think it shows the magnitude of the debt problem and in a simplistic easy to understand way outlines the high probability of tax increases and cuts to or elimination of entitlement programs like SS and Medicare. If the gov't continues to monetize the debt then hyper-inflation is possible. I could keep going but I think you can see that a growing US Debt has the potential to change and hurt our retirement plans and expectations. Did I post this in the wrong place?
__________________
Never surrender what you really want for what you want right now.
shotgunner is offline   Reply With Quote
Old 05-04-2012, 06:20 AM   #4
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
Thanks for the additional detail, it is helpful. Not the wrong place, but topics in the politics forum such as the one you posted need to be related to FIRE in some way, as do all subsequent comments.
__________________
MichaelB is offline   Reply With Quote
Old 05-04-2012, 07:24 AM   #5
Recycles dryer sheets
shotgunner's Avatar
 
Join Date: Jun 2008
Posts: 454
Michael I think the size of the current debt and the projections of where it is going in the next 10 years if things don't change is the single greatest threat to the retirement plans we have made. I think the second biggest threat to our retirement plans are the changes our government may make to reduce the annual deficit. The US debt matters a lot to future of taxes, investing, interest rates, inflation and the scope of entitlement programs. Perhaps others don't see it that way, if so I would like to hear their opinions.
__________________
Never surrender what you really want for what you want right now.
shotgunner is offline   Reply With Quote
Old 05-04-2012, 09:05 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
There isn't anything in the video that should come as a surprise to anyone here, it's all more readily available online than ever with Google and a few minutes time. In fact much of this has been posted here (piecemeal) in the past several years. The video conveniently leaves out revenue growth through a growing economy (vs increasing taxes), but I'm under no illusion that alone will make a big difference.

The left and their constituents are getting what they want, lots of spending. And the right and their constituents are getting what they want, historically low taxes. 2012 on the chart below clearly shows both, though both resulted in large part due to the meltdown/recession. Most of the population can't be bothered. Many more Americans can tell you who got booted off DWTS or American Idol, what celebrity cheated on their spouse or who's in the NBA playoffs - than anything about our national fiscal health. And special interests spend big money (from all of us) to powerfully maintain the status quo using campaign contributions and lobbyists to control tax code and regulations.

We get what we deserve.

But we will dramatically reduce deficits eventually, and the longer we wait the more painful it will be.
Attached Images
File Type: jpg runaway-spending-tax-revenue-6002.jpg (164.6 KB, 27 views)
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 05-04-2012, 11:56 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Oct 2008
Location: Naples
Posts: 2,161
Quote:
Originally Posted by MichaelB View Post
Shotgunner, how does this relate to early retirement?
MichaelB, half of the threads on this forum have no relationship to early retirement.
__________________
JOHNNIE36 is offline   Reply With Quote
Old 05-04-2012, 12:02 PM   #8
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: 42,149
Quote:
Originally Posted by JOHNNIE36 View Post
MichaelB, half of the threads on this forum have no relationship to early retirement.
True, but as MichaelB pointed out above, that's a requirement when political topics are posted (see the Community Rules)
__________________
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 05-04-2012, 12:25 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
Hmmm - I when to a lecture the other day from an econ. prof at UMKC (aka the OWLS).

We need a much bigger deficit - not smaller! The idea that a big deficit is going to hurt us is totally wrong - aka sort of like believing in the flat earth.

Kinda left me listening with my mouth hanging open. Totally opposite of what I was used to hearing.

Paying off the deficit is very bad for us - and our children/grandchildren.

heh heh heh - being single, retired and with a untaxed portfolio I feel like I have a target painted on my back - future tax wise.
__________________
unclemick is offline   Reply With Quote
Old 05-04-2012, 12:33 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
FWIW, the US fiscal health and economy are my biggest concern WRT a successful retirement. And of course many here have similar concerns, not news. But we do need to refrain from attacking individual politicians or even bashing one party or another...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 05-04-2012, 12:42 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,616
Quote:
Originally Posted by unclemick View Post
Hmmm - I when to a lecture the other day from an econ. prof at UMKC.

We need a much bigger deficit - not smaller! The idea that a big deficit is going to hurt us is totally wrong - aka sort of like believing in the flat earth.
Yes, Paul Krugman has been saying this, too, for a long time. And he's been wrong as long as he's been saying it. Just ask him--The problem with the stimulus and all the other government spending isn't the deficit hole we're digging, the idea that bondholders may decide they want a higher interest rate to loan us more money, and the drag on our economic future from all the repayments we'll need to make. No, the problem is that the spending hasn't been big enough.

Is "economics" as (practiced by columnists) a science if nothing is testable/falsifiable?
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Post
Old 05-04-2012, 01:18 PM   #12
Full time employment: Posting here.
antmary's Avatar
 
Join Date: Mar 2008
Location: Northern California
Posts: 542
Post

Quote:
Originally Posted by Midpack View Post
FWIW, the US fiscal health and economy are my biggest concern WRT a successful retirement. And of course many here have similar concerns, not news. But we do need to refrain from attacking individual politicians or even bashing one party or another...
+1
I do enjoy reading about the economic milieu we find ourselves in; it helps me to make sound decisions for my own retirement situation. The political in-fighting has become so loud that I simply tune it out, and regard it as background noise...much like children yelling in a playground. I do appreciate fact-based discussions, though.

Thanks for sharing the video.
__________________
antmary is offline   Reply With Quote
Old 05-04-2012, 01:24 PM   #13
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,492
Quote:
Originally Posted by REWahoo View Post
True, but as MichaelB pointed out above, that's a requirement when political topics are posted (see the Community Rules)
Thank you.

Quote:
Originally Posted by Midpack View Post
FWIW, the US fiscal health and economy are my biggest concern WRT a successful retirement. And of course many here have similar concerns, not news. But we do need to refrain from attacking individual politicians or even bashing one party or another...
Correct. Many of us share this concern. Resolving what to do is important, as is following your suggestion (and community rules) about refraining from bringing politicians, parties and other prominent ideological figures into the conversation.
__________________
MichaelB is offline   Reply With Quote
Old 05-04-2012, 02:21 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
It's unlikely that the deficit debate, tea leaves and my not so trusty crystal ball will cause me to adjust my stock/bond/short term balance in my retirement portfolio based on fear, guesses as to future interest rates or taxes given that my success rate(with hindsight) since 1966 is less than stellar.

After 18 yrs of ER I have sort of given up and gone with a life cycle fund, Target Retirement.

heh heh heh - stay the course and all that rot. .
__________________
unclemick is offline   Reply With Quote
Old 05-04-2012, 03:11 PM   #15
Recycles dryer sheets
 
Join Date: Apr 2006
Posts: 398
Uncle Mick,

What happened to "psst .... Wellesley"?
__________________
2soon2tell is offline   Reply With Quote
Old 05-04-2012, 03:58 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
Quote:
Originally Posted by 2soon2tell View Post
Uncle Mick,

What happened to "psst .... Wellesley"?
Relagated to history as I became a 'semi' born again(pun intended) Boglehead.

However selling the last of my 'few good stocks' has proved harder than when I quit smoking.

heh heh heh - I think it's a male hormone thing.
__________________
unclemick is offline   Reply With Quote
Old 05-04-2012, 07:59 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
This sort of thing is like worrying about the tax code, gravity, and what teenagers are thinking about while they masturbate. We aren't going to solve the problem and nobody would listen if we did.

FWIW, I think history is probably a good guide. The last time the US was this indebted we simply inflated our way out of the mess over 2 or 3 decades. Given my wonderful demographic luck thus far, I will probably be the 1966 (63?) retiree all over again.
__________________
"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 05-04-2012, 08:01 PM   #18
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,849
I think the information in this video is central to ER. Most of us have run firecalc, have analysed our swr, and all of that. The foundation for all those calculations is that the financial picture doesn't stray too far from what we have seen in the past. I have noticed on this and other boards that when someone questions the foundation, it's not a welcome topic. And it is easy to see why...we have all bought into this system, and if it goes too far south, and we go from the good life to something more like the life of those who didn't 'prepare for the future', then we start looking a lot less smart.

But it's not like we, as investors, have our hands completely tied. It might be hard for those of us that have US assets to avoid the possible future tax tsunami, we don't have to ride the USD down the hill, should that come to pass. So having a heads-up on the fact that the US fiscal house is completely out of whack is important to an ER, imho.
__________________
sengsational is offline   Reply With Quote
Old 05-05-2012, 08:45 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,983
Quote:
Originally Posted by brewer12345 View Post
This sort of thing is like worrying about the tax code, gravity, and what teenagers are thinking about while they masturbate. We aren't going to solve the problem and nobody would listen if we did.
Gravity and teenagers aside, I'm not as fatalistic about what "we" can do. Maybe we can't make a difference but if we don't even try, it's assured, and we'll have only ourselves to blame. Not that US circumstances are anywhere near the same point --- the establishment in Tunisia, Libya, Egypt and Syria (to name a few) discounted their ordinary citizens at their peril. I don't know if social media will become more influential, it will be interesting to watch. YMMV
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 05-05-2012, 09:10 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,299
Quote:
Originally Posted by JOHNNIE36 View Post
MichaelB, half of the threads on this forum have no relationship to early retirement.
Quote:
Originally Posted by REWahoo View Post
True, but as MichaelB pointed out above, that's a requirement when political topics are posted (see the Community Rules)
OK, but I'm trying to figure out how this could be seen as NOT being related to FIRE? Why would the level of debt's effect on the economy even be questioned? Or what some threads in this forum had to do with FIRE, but were not questioned.


-ERD50
__________________

__________________
ERD50 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


 

 
All times are GMT -6. The time now is 05:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.