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

[haha]

I'd love to hear why the drinking habits of Chinese Prostitutes are important to us.

Well, if you take one for a dram before your date, you might want to know what she likes? Would Madame like a Drambuie, a Calvados, or a single malt?

Does she like Tostitos with it, or perhaps pork rinds?

Ha

 

[Gumby]

I didn't say I had a legal right, I said I lived up to my end of the bargain now the government should do what they said. You think it's OK for the government to toss money around like a bunch of drunken sailors and then not pay folks who are collecting SS? I'd like to see the government try not paying the seniors what they were promised.

And I didn't opine on whether the government "should" or should not pay, or whether that is "OK"; I merely pointed out (implied, actually) that it is essentially a political question, not a legal one. Congress could indeed reduce your social security or means test it or stop it altogether, and you wouldn't find any recourse in a court.

Let me respectfully suggest that whether you or I or anyone else thinks that it is fair or unfair is entirely irrelevant. In my own life, I have found that for planning purposes it is far more effective to focus on the questions: "What are the rules now? How might they change in the future?" Knowing what Congress can legally do is important to being able to answer the second question.

 

[Midpack]

This audience is of above average intelligence, yet there's clear evidence in this thread that many here don't understand the federal budget. How anyone here could not know the fundamentals of Soc Sec is bewildering.

If this group doesn't 'get it,' imagine the knowledge base the broader electorate is basing their votes on? It's not a question of whether we can work out the math to reduce or eliminate our deficits, but a majority would have to have a clue about the math to do so...it doesn't seem we have a majority (yet).

As many have pointed out before, in the end we want someone else to pay more taxes and someone else to be impacted by spending cuts - that math won't work, there are not enough someone else's! We like to blame the politicians, but the collective electorate is equally to blame.

Did anyone learn anything from the article

I don't think the typical taxpayer understands the federal budget for two reasons. So people are pretty misinformed, and I think that may influence the way they vote.

 

[photoguy]

No, not on the top of my list to tell you the truth. I don't use dirty needles and I don't put my private parts where they don't belong.

That's ok. The government funds many things which not everybody agrees with. It's simply the nature of the beast that the government will spend money on things that don't directly benefit each individual citizen. My point is that although the media soundbyte makes it seem like the money is wasted, there is much more to the story. More specicifically,

(1) It's not an earmark. The funds came from an NIH grant which is peer reviewed by other scientists in a highly competitive process.

(2) The work has real relevance to healthcare and the impact of alcoholism and HIV.

(3) The lessons learned from the study might help reduce the billions of dollars we spend in the US on medicaid/medicare payments for HIV drugs.

 

[Hamlet]

Cutting the earmarks is fine, but it isn't going to make any meaningful difference to the budget. You're going to have to get less from SS and Medicare, or taxes are going to have to go up.

As you said--

Why can't you get this straight in your head?

SS, Medicare and such have been around for a long time and I have paid in and expect to get back.

New earmarks like the ones I mentioned are new spending for which we don't have the money. Why can't you get this straight in your head. Explain to me why I should give up one dime of my SS or Medicare to support the earmarks I mentioned above. I'd love to hear why the drinking habits of Chinese Prostitutes are important to us.

 

[TargaDave]

This audience is of above average intelligence, yet there's clear evidence in this thread that many here don't understand the federal budget. How anyone here could not know the fundamentals of Soc Sec is bewildering.

If this group doesn't 'get it,' imagine the knowledge base the broader electorate is basing their votes on? It's not a question of whether we can work out the math to reduce or eliminate our deficits, but a majority would have to have a clue about the math to do so...it doesn't seem we have a majority (yet).

As many have pointed out before, in the end we want someone else to pay more taxes and someone else to be impacted by spending cuts - that math won't work, there are not enough someone else's! We like to blame the politicians, but the collective electorate is equally to blame.

Did anyone learn anything from the article

Bingo!!!!!!!!! We, the so called smart voters, and of course our smart lobyist friends, will demand the status quo continue until it simply implodes on itself,...... and now you know why the precious metals (which we, the smart group, have completely trashed for the last 11 years) just don't seem to want to fade back into complete obscurity yet. Aaaaahh, the power of cognitive dissonance and normalcy bias.........

If you think ignoring some basic macro math is bad, just think about things like the massive international shadow banking behemoth with 2+x rehypothicated junk collateral, the net-versus-notional timebomb with CDS and interest rate swaps, the hedging disconnects (think JPM London Whale) or things like HFT algos run amok, mis-pricing of risk with ZIRP, blah, blah, blah. Even the originators/users of some of these recent [-]casino games[/-] products struggle to contain them. Certainly will add some excitement as we march forward

[Lest you think I'm just another eternal gloom&doomer my past did include raising two rounds of VC funding and gettin my biz sold off to a foreign public company. Let's just say that the background and more ER time to study evolving world wide macro numbers predisposes me to some anti-normalcy bias] Cheers!

 

[Mulligan]

I thoroughly understand that inefficiencies, waste, and fraud of the government would not balance the budget if all were eliminated. Howevermuch it still needs to be done, it cant, because the model is not set up to promote and reward efficiency. In a lot of cases, it winds up completely the opposite.
If it is eventually determined that taxes have to go up, I wouldnt be opposed to having a national income tax instead of just raising the rates in the tax brackets. Lets all share in the pain. When the bums who feed off the system and never pay into the system start having to give back some of their free money with a sales tax on their vices, at least I will feel some satisfaction in knowing its shared pain.

 

[ziggy29]

I thoroughly understand that inefficiencies, waste, and fraud of the government would not balance the budget if all were eliminated.

I guess part of the problem is that as long as any waste or fraud exists, a lot of people will feel justified in saying they refuse to share *any* of the pain of balancing the budget as long as waste and fraud are not zero. As if it's feasible to get rid of 100% of it -- besides, one person's waste is another person's vital program. It's all in the eyes of the beholder.

 

[Mulligan]

I guess part of the problem is that as long as any waste or fraud exists, a lot of people will feel justified in saying they refuse to share *any* of the pain of balancing the budget as long as waste and fraud are not zero. As if it's feasible to get rid of 100% of it -- besides, one person's waste is another person's vital program. It's all in the eyes of the beholder.

I soured on government efficiency with tax payer money about 20 years ago, when I got hired to a summer gig running a summer jobs program working with teenagers. They gave me a budget to fulfill the projects, and didn't really say much more. I assumed I was supposed to be efficient and mindful of the money spent. Well, we had a good successful program, and at the end I came and told them we managed to save and not need about 20% of the funds. 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.

 

[ziggy29]

Well, we had a good successful program, and at the end I came and told them we managed to save and not need about 20% of the funds. 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.

Yes, I'm painfully aware of this aspect of common government budgeting. When I worked in aerospace we saw that, too. We'd go on spending sprees late in the year if we were running strongly under budget, because as you said, if we didn't spend it not only would we lose that budget, but also have it CUT next year because we obviously "didn't need that much." Always bugged the crap out of me because it encourages needless spending.

 

[T-bird]

I guess part of the problem is that as long as any waste or fraud exists, a lot of people will feel justified in saying they refuse to share *any* of the pain of balancing the budget as long as waste and fraud are not zero. As if it's feasible to get rid of 100% of it -- besides, one person's waste is another person's vital program. It's all in the eyes of the beholder.

+1

I think that the willingness to give a little and not attempt to force feed on an all or nothing approach is paramount. Problem is attempting to do so during an presidential election year. No one what's to look weak, compromise or give an inch to the "other party". So we get what we are in now the "kick the can down the road" phenomenon. Makes me sick with both sides. Just so much verbal BS. At some point someone should realized or wake up to the face that it's a give and take thing not just take.

T-bird
Class of 2013
DW Class of 2012 (May, a done deal)

 

[marko]

This is actually illustrative of the point I made above. We support budget cuts as long as they aren't ones that affect *me*. As soon as someone wants to touch a part of the budget we care about personally, we scream bloody murder. Those who support tax increases are likely to do so as long as "other people" (defined as those who earn one dollar more than me?) pay them all.

Collectively, we refuse to accept that we personally have to "take a hit" through higher taxes or reduced spending on things we care about. And thus we kick the can, just ensuring that the next time we start talking about a "fix" it will be even more painful.

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.

 

[FinanceDude]

I soured on government efficiency with tax payer money about 20 years ago, when I got hired to a summer gig running a summer jobs program working with teenagers. They gave me a budget to fulfill the projects, and didn't really say much more. I assumed I was supposed to be efficient and mindful of the money spent. Well, we had a good successful program, and at the end I came and told them we managed to save and not need about 20% of the funds. 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.

That explains the $125 hammers and the $250 toilet seats of yore.........

 

[ziggy29]

Ziggy, you go first and I'll be right behind you.

This is why all we can ever agree on is to kick the can and let it keep getting worse.

 

[marko]

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

 

[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]

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.

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]

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]

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]

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]

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]

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.........