$14,289,000,000,000.00 not enough credit . . .

[Texsox]

Time to raise the debt ceiling again? This will be ten times since 2001. Standard and Poors issued a negative outlook for US debt. The AAA rating could be a thing of the past if the US defaults on loans. Today will probably be the day we reach the newest cap. But hey, without showing the world we can handle large debt and making on-time payments, we'll have to pay higher interest rates when we buy small countries.

 

I forgot, how did the Soviet Union collapse?

 

http://www.nydailynews.com/news/politics/2...r=news/national

The United States is set to slam up against its $14.3 trillion borrowing limit today as lawmakers squabble over whether to raise the debt ceiling.

 

Treasury Secretary Timothy Geithner told Congress issuing $72 billion in bonds and notes today would put the deficit at its legal cap, and that he would have to suspend deposits into federal pension funds to free up room for more borrowing.

 

The government has until about Aug. 2 before it begins to default on its loans, which have ballooned as the country spends more than it takes in.

 

Congress has boosted the debt cap dozens times over the years. This time around, though, Republicans and some Democrats are demanding that a hike in the ceiling be accompanied by measures to cut debt and slash spending.

 

The cap applies to debt owed to the public through the purchase of bonds - money budget experts say the government has agreed to spend.

 

Some economists warn that failing to repay those obligations could undermine creditors' faith in U.S. debt and send the government's borrowing costs skyrocketing.

 

In remarks broadcast Sunday, President Barack Obama warned that failure to boost the cap could send the country into an even worse recession than the recent downturn.

 

"If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system," Obama told the audience at a CBS News town-hall meeting.

 

The Washington Post said the Obama administration will begin to tap federal retiree programs to help fund operations.

 

With News Wire Services

Read more: http://www.nydailynews.com/news/politics/2...l#ixzz1MXdeT34z

[NorthSideSox72]

Lower discretionary spending, but not as much as the screamers on the right are saying.

 

Embark on a real, actual study of how every agency does business and what value comes from that spending, and make business-like adjustments based on the findings. This can include shutting down some entirely, re-tooling others, and may even mean increasing funding in yet others.

 

Get out of our three wars as expiditiously as possible.

 

Get the government of the business of supporting social security in any way, shape or form, but making it an elective investment vehicle instead of a giant ponzi scheme.

 

Take yet another look at Medicare and health care in general, and see what can be changed there in a way that is financially responsible.

 

Whatever cuts, as a general percentage, are made to discretionary spending... force the Pentagon to make cuts in the same percentage, and force them to make the choices of what to cut.

 

In terms of revenue... stop funding oil with subsidies... close more of the overseas investment tax shelter holes... Require people whose primary income over a base level is from investments to pay their taxes as income instead of cap gains... remove the carried interest and investment management tax tricks... stop all block grants and direct funding of state and local governments... and temporarily, until you can fully re-tool Soc Sec, lift the SS tax cap entirely and make it a flat rate to all, instead of only to the poor.

 

Whatever percentage gain comes from discretionary spending, that money goes to the debt as direct payments.

 

Whatever percentage gains you get from everything else, subtract the running deficit, and all other money beyond that goes to alt energy needs (which I consider to be the current day moon shot type project).

 

Going forward the federal government needs to slowly pull themselves out of the zillion different things it tries to do, and focus only on core national-by-necessity and/or Constitutionally required areas. This would mean things like defense and security, federal justice system, national and regional level infrastructure, foreign affairs, and maybe a dozen other things. All else, force the states and localities to make the adjustment to the reality that they need to deal with them.

 

--

 

Do all of that, and you will only need to raise it once.

 

[bigruss]

Lower discretionary spending, but not as much as the screamers on the right are saying.

 

Embark on a real, actual study of how every agency does business and what value comes from that spending, and make business-like adjustments based on the findings. This can include shutting down some entirely, re-tooling others, and may even mean increasing funding in yet others.

 

Get out of our three wars as expiditiously as possible.

 

Get the government of the business of supporting social security in any way, shape or form, but making it an elective investment vehicle instead of a giant ponzi scheme.

 

Take yet another look at Medicare and health care in general, and see what can be changed there in a way that is financially responsible.

 

Whatever cuts, as a general percentage, are made to discretionary spending... force the Pentagon to make cuts in the same percentage, and force them to make the choices of what to cut.

 

In terms of revenue... stop funding oil with subsidies... close more of the overseas investment tax shelter holes... Require people whose primary income over a base level is from investments to pay their taxes as income instead of cap gains... remove the carried interest and investment management tax tricks... stop all block grants and direct funding of state and local governments... and temporarily, until you can fully re-tool Soc Sec, lift the SS tax cap entirely and make it a flat rate to all, instead of only to the poor.

 

Whatever percentage gain comes from discretionary spending, that money goes to the debt as direct payments.

 

Whatever percentage gains you get from everything else, subtract the running deficit, and all other money beyond that goes to alt energy needs (which I consider to be the current day moon shot type project).

 

Going forward the federal government needs to slowly pull themselves out of the zillion different things it tries to do, and focus only on core national-by-necessity and/or Constitutionally required areas. This would mean things like defense and security, federal justice system, national and regional level infrastructure, foreign affairs, and maybe a dozen other things. All else, force the states and localities to make the adjustment to the reality that they need to deal with them.

 

--

 

Do all of that, and you will only need to raise it once.

[Balta1701]

Eliminating Social Security should NEVER get that response from anyone.

 

Because anyone who thinks about it for a second will realize that as soon as a generation starts going through that doesn't have Social Security, where the whole generation is suddenly in poverty, we'll be right back to figuring out how to recreate Social Security again, and it will cost a ton more to end it then restart it than to just keep it going. Same thing with any giveaway to wall street private investment scheme...as soon as a large investment shock hits, the government will have no option but to step in to make up for the gap in people's retirements.

 

And anyway, it has nothing to do with the current deficit anyway.

[NorthSideSox72]

Eliminating Social Security should NEVER get that response from anyone.

 

Because anyone who thinks about it for a second will realize that as soon as a generation starts going through that doesn't have Social Security, where the whole generation is suddenly in poverty, we'll be right back to figuring out how to recreate Social Security again, and it will cost a ton more to end it then restart it than to just keep it going. Same thing with any giveaway to wall street private investment scheme...as soon as a large investment shock hits, the government will have no option but to step in to make up for the gap in people's retirements.

 

And anyway, it has nothing to do with the current deficit anyway.

I didn't say get rid of social security. I said make it an elective investment vehicle. The tax would still be in place, though ideally it would be WITHOUT a regressive cap (which should make you happy), and at a lower overall rate as a result. You then give people options on what they want to invest in: US gov't debt, fixed income, a few different options, all of which would need to be conservative.

 

And it absolutely has to do with the current deficit, since we are borrowing from it to pay the bills.

 

[Balta1701]

You then give people options on what they want to invest in: US gov't debt, fixed income, a few different options, all of which would need to be conservative.

Where are you going to get the $15 trillion you're going to take out of current obligations?

[southsider2k5]

Where are you going to get the $15 trillion you're going to take out of current obligations?

 

aka, how are you going to continue to prop up the pyramid.

[Balta1701]

aka, how are you going to continue to prop up the pyramid.

Well yeah.

 

Are you going to say that you're sorry out of luck to current seniors or are you going to raise taxes to account for the additional funds you need?

 

Feel free to treat that as a pejorative. It isn't.

[Harry Chappas]

I really do not understand the rationale for a cap in social security withholding.

 

I also wonder what the contribution amount would be if you did not start withholding until you made $50,000 as compared to the current total.

[StrangeSox]

I didn't say get rid of social security. I said make it an elective investment vehicle. The tax would still be in place, though ideally it would be WITHOUT a regressive cap (which should make you happy), and at a lower overall rate as a result. You then give people options on what they want to invest in: US gov't debt, fixed income, a few different options, all of which would need to be conservative.

 

And it absolutely has to do with the current deficit, since we are borrowing from it to pay the bills.

 

It's not an investment vehicle, nor should it be.

[Balta1701]

So, back on topic.

 

So far 3 people have voted "Don't raise it".

 

That effectively means that Medicare, the Army, and Social Security will stop being funded come about Aug. 1, or that the U.S. government will default on its debt. (Edit: and I should note, you'll still be paying the taxes for those programs. The money just wouldn't go out).

 

Which do you prefer, shutting down all of those or defaulting?

[jasonxctf]

Macroeconomics 101, now's not the time to slash government spending.

 

Want to reduce it slowly at a rate being offset by growth in private spending.

 

Should run surpluses in the good years, and deficits in the bad years.

 

 

[Texsox]

aka, how are you going to continue to prop up the pyramid.

 

You mean the entire US budget?

 

Simple, we reduce taxes on the wealthiest Americans and the middle class so other people will start paying more taxes.

[bmags]

In terms of revenue... stop funding oil with subsidies...

 

From Newt Gingrich last week:

This whole problem of intellectuals who live on university campuses and take mass transit and then have no idea what the rest of the country is like. I mean, it’s nice to have a physicist as the Secretary of Energy, but maybe his experiences of real life on an everyday basis are the same as those of people who live in rural Georgia or people who live in north Georgia. I’m always reminded when people talk about Europe. I did my dissertation on Belgium. Belgium is one-third the size of South Carolina. So when you start talking about traveling in Europe, they’re not driving very far and they’re not driving cars that are very big. And that happens to be different han America on two grounds—we travel a long way and we like driving bigger vehicles. Now liberals don’t like us liking bigger vehicles, so they want to find a way to punish us economically. Hit our pocketbook, make us change, because they’d like all of us to live in big cities in high rises, taking mass transit. That’s their idealized utopia.

 

aka oil subsidies as identity politics.

 

this means i think that won't happen.

 

also yglesias's response was pretty funny:

I’m not sure why Newt Gingrich feels the need to pad his resume here and pretend to have written a dissertation about Belgium. His dissertation was actually about Belgian Congo, a former colony currently known as the Democratic Republic of Congo, which is neither small nor located in Europe. Meanwhile, you hardly need to undertake graduate level study to ascertain that Belgium is a small country. By the same token, Rhode Island is a small state. South Carolina is about the size of Austria and considerably smaller than Spain or Italy. This is all irrelevant. hat’s not irrelevant is to say that it’s true that apartment-dwelling is more common in Europe than in the United States of America. It’s also true that transit commuting is done by a larger minorities of Europeans than of Americans. It’s also true that European car commuters drive shorter distances on average and drive more fuel efficient cars on average. And it’s true that this is in part because the United States does much more to subsidize oil companies. But who is it who’s forcing whose lifestyle on whom here?

[NorthSideSox72]

Where are you going to get the $15 trillion you're going to take out of current obligations?

 

aka, how are you going to continue to prop up the pyramid.

 

To be clear, I am not saying you end social security, which I feel like I have to keep reiterating. It is indeed a pyramid scheme, but I wouldn't want to pull the rug out either.

 

Getting out of it takes two steps, and both will take a long time. First step, new money going in is put into market investment vehicles. As time goes on, the obligations are slowly replaced - owed government funds go down, invested positions go up. Once the tables are significantly turned, in a few decades, then you can take the next step and remove the pooling aspect. This will literally take 50+ years to accomplish, by the way.

 

And any gaps, in the meantime, are filled by removing the SS cap as I mentioned earlier.

 

[NorthSideSox72]

From Newt Gingrich last week:

 

 

aka oil subsidies as identity politics.

 

this means i think that won't happen.

 

also yglesias's response was pretty funny:

LOL, he actually has the impression that oil production subsidies means lower gas prices. Wait, check that... he knows that is a lie, but he's playing it anyway.

 

[StrangeSox]

To be clear, I am not saying you end social security, which I feel like I have to keep reiterating. It is indeed a pyramid scheme, but I wouldn't want to pull the rug out either.

 

Getting out of it takes two steps, and both will take a long time. First step, new money going in is put into market investment vehicles. As time goes on, the obligations are slowly replaced - owed government funds go down, invested positions go up. Once the tables are significantly turned, in a few decades, then you can take the next step and remove the pooling aspect. This will literally take 50+ years to accomplish, by the way.

 

And any gaps, in the meantime, are filled by removing the SS cap as I mentioned earlier.

But, again, it's not a individual retirement account. How does this scheme handle all of the disability claims?

[Balta1701]

Getting out of it takes two steps, and both will take a long time. First step, new money going in is put into market investment vehicles. As time goes on, the obligations are slowly replaced - owed government funds go down, invested positions go up. Once the tables are significantly turned, in a few decades, then you can take the next step and remove the pooling aspect. This will literally take 50+ years to accomplish, by the way.

And doing so entirely means raising taxes by $20-30 trillion over those 50 years. Maybe more. You need to have an entire generation pay double their social security taxes for their entire life.

 

Even a partial phaseout like Bush was trying to talk people into back in 2005 means you need $15-$20 trillion.

 

And then, of course, as I keep noting, 2008 hits, 10 million people try to retire and realize they have no retirement savings left, and the government comes racing to the rescue since those retirees actually vote.

[StrangeSox]

LOL, he actually has the impression that oil production subsidies means lower gas prices. Wait, check that... he knows that is a lie, but he's playing it anyway.

 

Someone on this very forum tried to make that argument to me

[NorthSideSox72]

But, again, it's not a individual retirement account. How does this scheme handle all of the disability claims?

 

Well ideally, I think they should have been seperate programs. One is retirement insurance, the other is disability insurance. But in the current world, as I said, I am not saying you remove the pooling aspect, because you can't escape that without...

 

And doing so entirely means raising taxes by $20-30 trillion over those 50 years. Maybe more. You need to have an entire generation pay double their social security taxes for their entire life.

 

Even a partial phaseout like Bush was trying to talk people into back in 2005 means you need $15-$20 trillion.

 

And then, of course, as I keep noting, 2008 hits, 10 million people try to retire and realize they have no retirement savings left, and the government comes racing to the rescue since those retirees actually vote.

 

...but this is a silly illustration. First, removing the cap causes the amount of money flowing in to go up enormously. Second, the money you "need" is still coming into the system, as what I am suggesting is NOT a Bush-like plan. Third, this is the key part here - if we are going to have a social security system, then we all need to be in it together. We all need to pay the same rate, and we all need to keep our money in the country's economy, if we want to succeed. Long term, assuming the country is pretty successful, we all win big. If the country falls apart, then really, none of this even matters, because the money is gone in either case.

 

[southsider2k5]

LOL, he actually has the impression that oil production subsidies means lower gas prices. Wait, check that... he knows that is a lie, but he's playing it anyway.

 

With the elasticity of gasoline and the type of industry we are talking about, it absolutely means lower prices, both in real terms, and in supply terms.

[Balta1701]

Well ideally, I think they should have been seperate programs. One is retirement insurance, the other is disability insurance. But in the current world, as I said, I am not saying you remove the pooling aspect, because you can't escape that without...

 

 

 

...but this is a silly illustration. First, removing the cap causes the amount of money flowing in to go up enormously. Second, the money you "need" is still coming into the system, as what I am suggesting is NOT a Bush-like plan. Third, this is the key part here - if we are going to have a social security system, then we all need to be in it together. We all need to pay the same rate, and we all need to keep our money in the country's economy, if we want to succeed. Long term, assuming the country is pretty successful, we all win big. If the country falls apart, then really, none of this even matters, because the money is gone in either case.

No it doesn't. It increases it some. You get a decent amount, enough to cover the long term OASDI shortfall, because the U.S. income distribution skews so heavily to the top. However, that's no where near enough to cover any sort of phaseout, especially if you intend to cover current scheduled benefits.

 

It's not a silly illustration to point out that putting money in any sort of private account while paying out scheduled benefits means you need 2x as much money coming into the program.

[NorthSideSox72]

With the elasticity of gasoline and the type of industry we are talking about, it absolutely means lower prices, both in real terms, and in supply terms.

No way. First, the amount of money we are talking about is a meager percentage of their income, so its not going to have any noticeable effect on overall levels of production and procurement. Second, the money is tied to specific actions it must be used for, and those actions are prompted by high gas prices anyway - so it will happen regardless. If the subsidies were removed, what you will see is a lot of complaining by big oil, a brief and small spike in the futures that quickly dissipates, and then nothing. The subsidies are a hand out, pure and simple, and no they would not have an effect on gas prices at the pump unless they did something purely punitive and acted like children (which would then get a government response and investigation, everyone loses, etc., so won't happen in any big way).

 

[NorthSideSox72]

No it doesn't. It increases it some. You get a decent amount, enough to cover the long term OASDI shortfall, because the U.S. income distribution skews so heavily to the top. However, that's no where near enough to cover any sort of phaseout, especially if you intend to cover current scheduled benefits.

 

It's not a silly illustration to point out that putting money in any sort of private account while paying out scheduled benefits means you need 2x as much money coming into the program.

I must not be making this clear.

 

NO PRIVATE ACCOUNTS. Did you not see the part where I said over and over again, maintain the pooling aspect?

 

[Balta1701]

I must not be making this clear.

 

NO PRIVATE ACCOUNTS. Did you not see the part where I said over and over again, maintain the pooling aspect?

Oh, ok, so it's even worse, there's no "mandatory" part left to it except for covering scheduled benefits.

 

So we still spend $30 trillion extra to meet current obligations, but then we cut off Social Security completely for some portion of the population, and then we discover to our horror that once we made Social Security "elective", 2/3 of the people in the country didn't invest in it at all, hit retirement age with nothing, and wind up being supported by the government anyway.

 

The reason that the program actually works is exactly what you said in your last post. It covers everyone. It's a baseline. Everyone pays the same rate and everyone is invested in the program. Individual mistakes can't screw it up. It's simple, functional, and even if you screw everything else up in your life, by the time you hit OASDI, you are not out on the street.

 

Pretending that you can extract savings by making social security optional is just silly, because you should know exactly what will happen. People will fail to invest in it or they'll borrow against it, then the government will wind up picking up the tab for those people anyway.