Re: Record deficit expected in 2009

Rumpelstiltskin wrote:

On Thu, 31 Jul 2008 11:53:56 -0400, Alan Lichtenstein <arl@xxxxxxxxxx>
wrote:


Rumpelstiltskin wrote:


On Wed, 30 Jul 2008 21:37:06 -0400, Alan Lichtenstein <arl@xxxxxxxxxx>
wrote:



Rumpelstiltskin wrote:



<snip>


The tax decrease on the middle class could come not in the form of a tax reduction on income, but in the form of a tax reduction in FICA. the excess received through the income tax by rescinding the tax cuts on the wealthy would at least partially pay to redeem the notes written by the Treasury to Social Security, thus also helping with that projected deficit. At least while there's still enough surplus left to give Social Security a cushion until the projected date of 2017.



You interpret the crossover point between input and output at 2017 as Social Security being broke in 2017, I suppose, since there's no other vital reason to mention 2017. I interpret it as Social Security being broke in 2040, the zero point, not
the crossover point.

Not at all. First of all, Social Security can never be broke because it will always be taking in FICA. It CAN be in deficit, and that will occur in 2040, when it will take in less in FICA taxes than it has to pay out in benefits.

It WILL take in less in FICA taxes than it pays out in 2017, but it has in its possession promissory notes from the Treasury, which it can use to make up the difference. Those notes, given current benefit and population levels, are predicted to last until 2040, when Social Security will be in a true deficit.

The date is 2040, even if nothing is done.

So that we're talking about the same thing, 2017 is the date on which Social Security will begin paying out more in benefits than actual cash it takes in from FICA, however, it still has promissory notes from the treasury which it accepted over the last 40 years for the surplus money. Those promissory notes are expected to run out in 2040, thus leaving Social Security in the unenviable position of taking in less money than it is paying out, with NO cushion from any source, creating a true deficit.

The government has

no more right to welch on its bonds to SS than it has to welch on
its bonds to individual investors.

Agreed.

If the government has to print

money to meet that obligation, then it has to print money.

With all the negative results that entails.



Yep. Paying off bonds is even more important than paying down the debt. If the government doesn't meet
its bond obligations, nobody can trust it with their
money anymore.



The

obligation to repay its bonds is absolute. Failure to do so means
the government is bankrupt and indigent, and nobody can have
any faith in it anymore. That would be a catastrophe far bigger
than the one we already have.

Agreed.


And it might not be bad for Obama, if he has any REAL understanding of the problems facing our country to provide us with a total tax plan which INCLUDES addressing the long term needs of Social Security and Medicare. Unfortunately, I don't think he's up to that, despite the fact that some members of this group are enamored with the credentials and resumes of his 'advisors.'

I want National Health of course, and I think we'll get it, though maybe not for 20 years, so I see Medicare as a temporary problem.

I agree we'll get it eventually, but not within the next four years, unless something extraordinary happens, which I don't think will.


<snip>


Tariffs don't and will not work in this day and age. I refer you to the recently failed Doha round of trade talks as an example of why that will not work. A fundamental reason why they will not work is that what we do can be done to us, and will.



We already went through that. I disagree. Yes, things
will be done to us, but things are being done to us right
now, like sending all the jobs overseas.

The global economy is here to stay, and nothing any one country can do will change that.

We've already disagreed on that. I regard your feeling
that it's impossible to impose tariffs anymore as just "religion".

The effects are just too impractical in this day and age. Tariffs worked for a time when the economic relationships were simpler and far less complex than they are today. They are a relic of a system of economics which no longer exists, and as such cannot work.

I'm no big fan of unrestricted free trade, but I recognize the rest of the world requires free trade to a degree. You've got to wake up and smell the coffee about that, Rumple.

Yes, we permitted it to grow, and yes, that poor decision is coming back to bite us in the ass, but unfortunately, we can't go back to the way things were. Tariffs worked only when there were only a few manufacturing countries and only a few advanced economies, a set of circumstances which simply doesn't exist now. You may disagree, but unfortunately, you're wrong.


That's a cop out for NO foresight of vision at all. And if you're advocating a policy of shooting from the hip without any kind of planned action ,then I certainly don't want that kind of president.

If you think Obama has no foresight or vision, then I guess
you should vote for McCain, if you think he has any.

He is glib and has good rhetoric, but little of substance. Not that McCain is any better, but because one's adversary is incompetent doesn't make one any more competent.


And neither do you or anyone else. But if that's the best they can come up with as a defense, I have a better reason; reevaluate skeptically, their support of Obama.

That's the "Read my lips, no new taxes"


trap.

No, that's the analogy to what YOU are suggesting.



Completely wrong. Bush Sr. said "read my lips, no new taxes". He promised what he ultimately couldn't deliver. You want Obama to make promises on which he might
not be able to deliver.

I know who said it. I simply said the analogy more aptly applied to one making the grandiose promises. Hint: That's Obama.

As noted, for the reason noted, you are completely wrong.

While Obama didn't say 'no new taxes' the manner in which you used the analogy went not to the substance, but to the concept.

I do trust Obama, and I do think he's competent.


That's why I support him.

He's certainly intelligent, but he is far too ideological without any kind of assessment of what needs to be done beyond his rhetoric.

I call that very shortsighted.

I don't trust the approach to


problems supported by McCain, because they look like
the same old stuff that got us into this mess in the first place.

They are EXACTLY the same kind of approaches that got us into these problems, and will continue to exacerbate them, as i have said many times. But since Obama has no real solutions, it is evident that the economy is going to sink further into a morass. Given that, I'd rather have a Republican presiding over the mess than a Democrat. I don't think you've thought it that far out down the road. Perhaps you should.

I don't expect anyone to have a perfect plan. I just expect them to have clear principles that I think are "good" and which have the interests of the man on the street first in mind. If you want somebody with a perfect plan. nobody has one or ever will.

At the end of the day, the electorate isn't going to give much of a damn as to what you plan was. They're only going to evaluate the RESULTS. And neither candidate is going to give them the RESULTS they want or need, so human nature being what it is, the electorate is going to 'punish' the one at the top who failed by voting the rascal out. I'd rather the public's wrath be directed against a Republican.

So, Rumple, we need someone with a plan that WORKS. McCain hasn't got one; neither has Obama. Neither of them has addressed the real problem; bringing manufacturing jobs back to America.

Well, vote for who you want. We'll see what happens in November.
I'd agree that neither has as realistic a plan as I have (tariffs) for
bringing jobs back to America, but you seem to think something other than tariffs, though I haven't seen anything very convincing,
can do it better.

I'm holding my nose and voting for Obama and hoping he doesn't get elected for a number of reasons. I can't vote for McCain because I'm morally opposed to his economic plans as well as the ultimate role of government. I dislike Obama because he's too trusting on foreign affairs, has no realistic plans that he's detailed on economics and taxation, has no plan for bringing manufacturing back to the United States( in fact his plan to renegotiate NAFTA may actually be more deleterious ), and I never liked him because I feel he hasn't paid his dues and is not respected as he ought to be.

As far as your final statement regarding tariffs, neither candidate has offered anything, but at least both of them know that tariffs don't work, which is why they're keeping their mouths shut on those. And Obama, especially, because he really needs to back away from his apparent support of same during the primaries.

It is evident the economy is going to sink further.
No plan will prevent that. It will sink further still if McCain gets in though.

I agree. And the public will punish the one in charge. I'd rather that punishment be directed at a Republican.


It is annoying to give the Republicans an excuse to blame the Democrats for what the Republicans did but I don't regard that as a good reason to allow
the Republican party to sink the country even deeper into ruin.

Obama isn't going to do much better. Since the economy is going to tank anyway, I'd rather the blame for it go to a Republican.

As for blame, we've even had

Republicans in this group blaming Jimmy Carter for the national debt, so they'll blame anybody who isn't a Republican no matter how ridiculous.

There will always be stupid people. Most of them are Republicans. If they had any functioning brain cells, they'd be Democrats, except, of course, if they had incomes in excess of around $250,000.


If one is expecting this horrible mess to be fixed overnight,
one might as well start preparing one's "failure" billboards
because nobody can succeed at that.

Now you're getting it.

Are you trying to take credit for something?
I never said anything different.

Not at all. I merely stated that I believed you're understanding the problem and the immediate outlook.



Then why did you say "now"? It should be "always did".
I've not only always maintained it, I've emphatically always
maintained it.

Some of the posts you've made caused me to think that such were not your views all along. Regardless, I'll accept your qualification, if it means so much to you.


(snip)

The American auto industry may not be salvageable. It's a disaster, but perhaps one that is going to happen no matter what. Stiff tariffs would certainly help to save
it.

It's salvageable. and tariffs will have NO effect, because few if any of the cars are imported. Most are made here.

If they're made here and the profits stay here, there'd be
no tariffs.

Wrong. Tax laws don't work that way. so long as you pay taxes, you can do what you will with your profits and send it where you choose. toyota, Honda and Nissan all make cars here. Diamler has purchased an unused Chrysler plant to do the same. Volkswagen is made here as well.
all these entities have American corporate structures which are wholly owned by their parent companies. And all the companies pay taxes here, and send the profits home, overseas. Perfectly legal.

American workers protected from competition
from cheap imports. If the profits don't stay here, then to that extent the foreign ownership is a drain on the country, and tariffs or some other penalty is appropriate.

WHAT other penalty, Rumple? Tariffs are inappropriate because the products are domestically manufactured. WHAT other penalty?

I care as
little for the welfare of international corporations as they care about my or America's welfare.

Unfortunately, we have a constitution which prohibits discrimination against, even them.

In point of fact, to institute tariffs would actually hurt the domestic auto manufacturers, since the high mileage, low cost cars they produce for foreign markets are produced in foreign markets and would have to be imported. For example, Ford has what is likely the best selling car in Europe, but Ford would have to import it for the American market. Under YOUR tariff plan, a tariff would be levied against that car. Add that to the exchange penalty in currency and you have a car which is unprofitable. Which is why Ford doesn't import it, preferring instead, if you've been following the news, to close domestic factories and retool them.

You see, Rumple, tariffs are a simplistic solution to a complex problem, which IMHO, you do not understand all the variables which contribute to. Which is why they are ineffective in this day and age.

They're a start. Not having tariffs is no start.

Hardly. There are better ways. You've already seen they would do little or nothing for the auto industry, and likely do it further harm.

Worker compensation in the auto industry is a problem,
but we shouldn't really be thinking of that which benefits
the common man as just a "problem", especially since
the American auto industry has long been plagued with
high-paid management who routinely make atrocious decisions that have them producing whole lines of cars
that nobody wants anymore.

The biggest problems facing the unionized auto industry are health costs and retirement benefits. Management salaries are a problem for the stockholders, not the government.



All dollar bills are the same.

????????????

Snip


Those debts aren't going away, and will be there until paid. We simply need to give the government more revenue. The Democratic policy of paygo was good, when we didn't have such things like the war which eat up large sums and cannot ever be paid for by paygo. So we need to pick and choose. Obama wants to spend more on infrastructure, a noble idea, but where in the hell is going to get the money to pay for it? It's not sufficient to say from the war, because that's isn't going to be enough by a long shot. Makes good rhetoric for his base, but is short on implementation. Obama is good at rhetoric, and short on implementation, and his followers are so starrey-eyed that they don't look very far when crossing the street, and don't care. He's not wrong, but these things need to be paid for, and guys like you who think he's such a great and inspiring leader should be asking him how? He doesn't have the answers, because if you ever asked him, his apparent inspirational ability and wisdom might tarnish a bit in your eyes. But you don't ask him, and that's what he depends on.

I'm not expecting Obama to do miracles.

But that's what his rhetoric leads one to believe.



He never suggested any such thing. It is what
McCain is trying to propagandize lately, in his increasing desperation. Maybe you believe it. I don't. Obama doesn't.

He intimated miracles when he intimated change. He can't deliver. Neither can McCain.

"Miracles" and "change" are not synonyms.

I agree. However, to most Obama supporters, they are one in the same.

If you believe Obama won't change anything, you might as well vote for McCain.

Have you been missing the point? Your continued insistence on that point indicates that you really didn't understand anything I said, or it infers that you believe that one of them(Obama) can achieve something. I'm asserting precisely the opposite. NEITHER of them will change anything, and because the circumstances will continue to decline, the electorate will need someone to blame. Better that person be a Republican.

And why elect him if he can't generate the change his rhetoric promises?

Then vote for McCain. I don't see how I could
talk you out of it if you wanted too, and it would seem an impossible task even if I did. There are plenty of people who do support Obama. He can't be all things to all people, and you seem to be one of the left-outs.

I'm not voting McCain. If you haven't realized it, I'm still fighting the Democratic Primary. I just want to be able to tell all the sarrry-eyed liberals and academics here that 'I told you so,' and whenever they complain about McCain, remind them that he's president because it was THEIR fault.

Well Ok then, vote for Obama and tell us "I told you so"
when Obama doesn't deliver "miracles" that you, though not I, not Rita, not Islander, not most other people, expected him to deliver anyway.

Perhaps not you, as you supported Hillary. But not for Islander and Rita because those miracles are PRECISELY what they expected fro their poster boy of egalitarian social change.

But I'll enjoy telling them "I told you so."

I'm expecting him


to be a foresightful and responsible leader, which would be an enormous change from Reagan and the Bushes.

Regean was a responsible leader; you just didn't agree with him.

Reagan was not "responsible" at all. He ran up the first four trillion or so on the national debt. Nothing could be more irresponsible.

If that's your definition of responsible, I won't argue with it.


I've said that before George W. Bush, I never thought I'd in my lifetime see a worse president than Reagan. I see no reason to change that view. The fact that he was the one who started running up the debt is by itself
sufficient justification. If I'm right, the fact that most
people still don't understand what's happened to the USA is not my fault.

I agree that Dumbya will likely go down in history as the worst president we've ever had.


Neither did I. But he was forceful and decisive. Why in the hell do you think the Iranians let the hostages go after nearly two years of captivity the minute Regean took office? I'll give you a hint: They knew he was no Casper Milquetoast, aka, Jimmy Carter, and Regean would bomb the *** out of them and then send in the Marines to attack them

from the south while Saddam attacked them from the North. And if you


don't realize that, then I would suggest that the scales are really covering your eyes. Do you think the Iranians view Obama as another Regean or another Jimmy Carter?

I'll give you a hint, there are a hundred other equally
or more likely possibilities, including that Iran just wanted Carter out.

ROTFLMAO!!! Sorry, but Carter's presence permitted the Iranians to consolidate their power. I remind you when Saddam attacked Iran. AFTER Carter left office and during Regean's Administration. Why do you suppose that happened THEN and NOT during the last two years of Carter's Administration? I'll give you another hint: Saddam knew that Regean would not oppose his invasion, but Carter might. However, as wel well know, Regean walked both sides of the street.



ROTFL all you want, that doesn't count as argument.

It's as a polite evaluation of your response as I can offer, Rumple.

There was a lot of talk of

shenanigans at the time, you may recall, such as a bribe paid by the Reagan forces not to release the hostages until after the election.

Fantasy, as we well know.

I'm not at all sure it couldn't be true.

If it's true, where is the evidence? There isn't any, so file the conjecture under wishful thinking.

I have less faith
in Reagan and the Republicans than you have, possibly.

Hardly. But before I convict them, I like proof. I don't believe in guilt by association, as do some people here.

Remember Ollie North, and the death squads in El
Salvador, and the utterly immoral financial shenanigans hidden from eyes of the American people there?

Indeed I do. Which is why I specifically stated that Regean walked both sides of the street.

There's
not much I'd put past those people. I wouldn't believe a
single word they say.

Your choice. I take much of what they say with a grain of salt myself. But unlike you, I don't dismiss it outright because of my opinion of the source.

That's more

likely than that Iran was afraid of Reagan. Iran has not shown any great fear of the USA, under
Reagan or afterwards.

Iran has shown no fear because they know we are too preoccupied and overextended with our own misadventures at this juncture. After they released the hostages, Regean had no excuse to attack them, so Saddam had to go it alone. Would have been better if it were a combined attack, but the iranians knew that would happen, so they released the hostages as fast as they could. However, now the Iranians are hoping they can get a nuclear bomb before the situation in Iraq stabilizes. You can bet your booties that if the situation stabilizes, they're going to be scared shitless. Unfortunately, I won't hold my breath waiting.

That's your belief. Believe it if you want, don't expect everybody else to.

I expect reasonable people to believe it. It has avery high probability of being accurate. people who would choose to bury their heads in the sand, likely will not.


( snip )
.