Republicans want to wreck the US economy

[Keanu]

Considering that the Democrats had complete control (on paper, at least) of the government for two years and a majority of the control for a further two years and ran the spending up like crazy,

They didnt make the budget. They voted on it. And I didn't hear the republicans nor the democrats bitch

Look at the details on this "deal" that Obama is offering. This isn't a major cut TODAY

No cut would be today, this year or his term. Not without significantly impacting the economy or the lives of the poor and the middle class.

If you have a solution that fixes everything now. By all means tell me and I will idolize you forever.

this is set to go over ten years with some provisions taking effect only in the 2030's. So in short, what Obama is offering is to cut roughly the same amount of deficit he and the Democrats have added in the last two years all in a ten year span.

Correct. I dont see the problem also see point above.

That $4 trillion he has proposed is $400 billion a year. That will leave over a trillion dollars of deficit this year alone assuming that $400 billion is applied. That just isn't going to cut it.

I cant say if it will be a trillion dollars of deficit still this year but 400 billion is a large number to save in a year. Its not something you can sweep under the rug and say its insignificant.

Further, one more problem with this is that it is too long term. Just because things are set up now for savings doesn't mean that the next time Democrats get control of the House that they won't go bonkers again and override whatever was decided today. That is Obama's plan: to "compromise" and get a long term deal he hopes can be overturned in the future. That and to raise taxes and provide a way to spin this to his advantage.

Everything is long term. This deficit wont go away by decreasing spending to 0 (infact decreasing spending to 0 would actually cause for a huge loss of income)

realize that you cant have budget cuts without spending increases (unless you are running a surplus but then whats the point of budget cuts?)

 

[Travis]

realize that you cant have budget cuts without spending increases (unless you are running a surplus but then whats the point of budget cuts?)

Wait, what? You can't have a budget cut without increasing spending? Maybe I am missing something, but if you cut the budget (meaning, you aren't going to be able to spend as much money as before), you generally end up spending less because you don't have the ability to spend as much as before. So, how is that a spending increase?

No cut would be today, this year or his term. Not without significantly impacting the economy or the lives of the poor and the middle class.

Cutting as much as possible NOW is the entire point. The government underwent massive spending binges over the last decades (yes, I know it was even before Democrats got control), it cannot continue to do so. The time to stop it isn't in three or four years, it is as soon as possible. Every year we keep going on this scale seems to increase the deficit by an increasingly large number that is already something like $1.6 trillion. At the current rate, next year will be near or over $2 trillion. Our government cannot survive that for another two or three years until Obama is out of office like you suggest.

As for impacting the lives of the middle class and poor, that is going to happen. For those who were sucking on the welfare state, they are going to have to learn to stand a bit more on their own. They have drained the cash cow dry. For those who aren't relying on welfare, the impact likely will be better as we will avoid far worse problems in the future.

I cant say if it will be a trillion dollars of deficit still this year but 400 billion is a large number to save in a year. Its not something you can sweep under the rug and say its insignificant.

No, it is not insignificant, it just isn't enough. Were we running a $700 billion yearly deficit, then it would probably do just fine. However, that hunk of change, as big as it is, won't even get us below $1 trillion of deficit per year.

Everything is long term. This deficit wont go away by decreasing spending to 0.

Yes, actually, it will. Think about it: what causes a deficit? Spending more money than you take in. Therefore, if spending is cut to zero, there will be no deficit. Not that I am advocating that in any way, shape, or form as it would be impossible, but in theory, cutting all spending eliminates all deficits.

 

[Quill]

Seriously. This seems rather clear. They don't care about the debt at all.

Welcome to America.

 

[Keanu]

Wait, what? You can't have a budget cut without increasing spending? Maybe I am missing something, but if you cut the budget (meaning, you aren't going to be able to spend as much money as before), you generally end up spending less because you don't have the ability to spend as much as before. So, how is that a spending increase?

I meant to put in tax increases.

Cutting as much as possible NOW is the entire point. The government underwent massive spending binges over the last decades (yes, I know it was even before Democrats got control), it cannot continue to do so. The time to stop it isn't in three or four years, it is as soon as possible. Every year we keep going on this scale seems to increase the deficit by an increasingly large number that is already something like $1.6 trillion. At the current rate, next year will be near or over $2 trillion. Our government cannot survive that for another two or three years until Obama is out of office like you suggest.

The deficit will go down as the economy progresses. Untill then undoing the bush tax cuts would significantly help the deficit. Further tax increases on the rich to meet european standards would go a far way again. (remember the top 2% controls more then 50% of the income. the top 10% controls 80%)

As for impacting the lives of the middle class and poor, that is going to happen. For those who were sucking on the welfare state, they are going to have to learn to stand a bit more on their own. They have drained the cash cow dry. For those who aren't relying on welfare, the impact likely will be better as we will avoid far worse problems in the future.

sorry that just made me laugh. Welfare state? America? You really MUST be joking.

No, it is not insignificant, it just isn't enough. Were we running a $700 billion yearly deficit, then it would probably do just fine. However, that hunk of change, as big as it is, won't even get us below $1 trillion of deficit per year.

Decreasing spending without increasing taxes will reduce the deficit but at the same time have a negative effect on the taxes collected. Keeping the purchasing power and the GDP per capita the same (or even better having it go higher) is what is the key here.

Yes, actually, it will. Think about it: what causes a deficit? Spending more money than you take in. Therefore, if spending is cut to zero, there will be no deficit. Not that I am advocating that in any way, shape, or form as it would be impossible, but in theory, cutting all spending eliminates all deficits.

And if you increase spending again to pre spending cut levels. Even having a debt of 0 would still not change the deficit by any significant amount.
Also see above. Cutting everything (EVERYTHING)

gets rid of all the jobs in the military (roughly 1.5 - 2 million soldiers) -> effects the defense industry > effects the metal industry / chemical industry / oil industry (and other defense industry related companies), the millions of federal and state employees / All police men, firemen, majority of the schools and hospitals etc

It basically means that sure, no deficit and only income but a DWINDLING income (and im not talking about a few billions either. Hundreds of billions)

The burden of the financial crisis cannot fall on the poor and the middle class, they are the ones suffering from this crisis and any more burdens on them is likely to kill the middle class and drive the poor (and the nation) to unprecedented levels of unemployment, poverty and hunger

http://playspent.org/

please indulge yourself in the life of a poor worker

 

[Travis]

The deficit will go down as the economy progresses.

If the spending isn't cut, the economy will collapse and there will be no deficit decrease.

Untill then undoing the bush tax cuts would significantly help the deficit.

Last time the Democrats tried to cut them, the economy went into a nosedive. Taxing the rich (who actually provide the jobs) is never a good idea in a down economy. Even Obama claims to know that (I posted a link to him saying just that a while back). In a down economy, you cut taxes so people have more income on hand to spend in truly stimulating the economy.

Further tax increases on the rich to meet european standards would go a far way again.

Yes, because that European standard is working so well for Italy, Ireland, Greece, Portugal, Spain, Hungry, Latvia, and Romania, right? Without the other nations in the EU to bail them out, they would be toast.

Welfare state? America? You really MUST be joking.

I did not mean to imply that America was the welfare state that most of Europe is, but there are plenty of welfare handouts in America. Those people who are taking advantage of that will have to cut back because there simply isn't more to give. Welfare is great when there is a surplus or even a small deficit, but it can't be sustained while a huge and growing deficit is suffered.

Decreasing spending without increasing taxes will reduce the deficit but at the same time have a negative effect on the taxes collected.

If tax rates stay the same, revenue will increase. Think about it. Right now, one of the major crimps on our economy is fear of economic collapse due to this deficit. Once that is taken care of, people will feel a little more secure in investing and expanding. The rich will start spending thus providing jobs for everyone who provides the goods and services they are buying. The corporations will start investing and hiring thus providing jobs for the middle class and poor. Once more jobs are being had, the economy will grow and fewer of the middle class and poor will be jobless. The fewer people who are jobless, the fewer people sucking on welfare thus decreasing the strain on that and further lowering the spending. It isn't rocket science and was done quite successfully in the '80's where taxes to the rich were cut, the economy improved, and revenue to the government increased.

To address the whole cutting the spending to zero, I said that it is not possible. Though, I will point out something: even if it were down to zero and the federal government essentially disappeared, there would still be a deficit decrease simply because there is nothing spending. Assuming the economy went bad or suffered, there would be nothing spending money so ANY money that happened to come into whatever entity collected taxes would thus go to servicing the national debt. So if that was $1 million a year, that would be $1 million less on the debt. There would be no deficit period because there would be no spending. You may be mixing up the terms deficit (spending more than is taken in) vs debt (what is owed from the long term).

The burden of the financial crisis cannot fall on the poor and the middle class, they are the ones suffering from this crisis and any more burdens on them is likely to kill the middle class and drive the poor (and the nation) to unprecedented levels of unemployment, poverty and hunger

I agree, to a degree. I do not think the burden should be put on those who are working and not on government handouts. For some of those who are on welfare, I would not see that go away as there are times when people need some help. Unfortunately, there are a LOT of people on welfare who, in my opinion, need to get off their lazy asses and work, stop having children they can't support, and stop spending money frivolously they don't have. I would love to see all welfare cut down and those who are not worthy removed to stand or fall on their own.

A problem with just throwing mass taxes on the rich is that it will negatively effect the economy. As I said, the rich are the ones who provide jobs. If they have less money or fear they will soon have less money in the near future, they won't hire or invest or expand. Penalizing the rich harms the free market that the American economy is still mostly based on. If we were spending less, it wouldn't exactly insta-boost the economy, but it would remove a lot of the worries and allow people to feel comfortable in spending/investing again. THAT, more than any government handout or "stimulus" is what the economy needs. Government spending is nothing more than taking from one person without reward to give to another person without them having to earn it.

please indulge yourself in the life of a poor worker

I am a minimum wage worker.

 

[Dmitri]

I find most amusing that we're doing a bit better discussion and analysis of the situation than I've seen some of the news stations doing.

 

[Keanu]

If the spending isn't cut, the economy will collapse and there will be no deficit decrease.

not decreasing spending wont kill the economy.

Last time the Democrats tried to cut them, the economy went into a nosedive. Taxing the rich (who actually provide the jobs) is never a good idea in a down economy. Even Obama claims to know that (I posted a link to him saying just that a while back). In a down economy, you cut taxes so people have more income on hand to spend in truly stimulating the economy.

when was that? The rich dont provide the jobs. Companies provide jobs and the taxes in the US are easily able to attract jobs not to mention the foreign investment from europe and other nations. I personally believe the majority of the jobs come from Companies. these companies are funded by banks, investors (angel investment, capital ventures, the bank itself. etc)

Yes, because that European standard is working so well for Italy, Ireland, Greece, Portugal, Spain, Hungry, Latvia, and Romania, right? Without the other nations in the EU to bail them out, they would be toast.

http://en.wikipedia.org/wiki/Nordic_model

Other nations that follow a similar model like that include belgium, netherlands, germany, switzerland, austria, UK and those are doing fine

I did not mean to imply that America was the welfare state that most of Europe is, but there are plenty of welfare handouts in America. Those people who are taking advantage of that will have to cut back because there simply isn't more to give. Welfare is great when there is a surplus or even a small deficit, but it can't be sustained while a huge and growing deficit is suffered.

I have to disagree with you the welfare benfits have been reduced over the last 20-30 years to a laughable amount (and that amount was already at. Really? really?)

If tax rates stay the same, revenue will increase. Think about it. Right now, one of the major crimps on our economy is fear of economic collapse due to this deficit. Once that is taken care of, people will feel a little more secure in investing and expanding. The rich will start spending thus providing jobs for everyone who provides the goods and services they are buying. The corporations will start investing and hiring thus providing jobs for the middle class and poor. Once more jobs are being had, the economy will grow and fewer of the middle class and poor will be jobless. The fewer people who are jobless, the fewer people sucking on welfare thus decreasing the strain on that and further lowering the spending. It isn't rocket science and was done quite successfully in the '80's where taxes to the rich were cut, the economy improved, and revenue to the government increased.

Any economist will tell you the deficit wont kill the US. The fear of collapse is the fact that the debt ceiling isnt being increased. At that point the US stop accumulating bills and is forced to cut spending to essential services

To address the whole cutting the spending to zero, I said that it is not possible. Though, I will point out something: even if it were down to zero and the federal government essentially disappeared, there would still be a deficit decrease simply because there is nothing spending. Assuming the economy went bad or suffered, there would be nothing spending money so ANY money that happened to come into whatever entity collected taxes would thus go to servicing the national debt. So if that was $1 million a year, that would be $1 million less on the debt. There would be no deficit period because there would be no spending. You may be mixing up the terms deficit (spending more than is taken in) vs debt (what is owed from the long term).

actually no I am not. Reducing the government spending to 0 would cause for a breakdown of the economic system.

I agree, to a degree. I do not think the burden should be put on those who are working and not on government handouts. For some of those who are on welfare, I would not see that go away as there are times when people need some help. Unfortunately, there are a LOT of people on welfare who, in my opinion, need to get off their lazy asses and work, stop having children they can't support, and stop spending money frivolously they don't have. I would love to see all welfare cut down and those who are not worthy removed to stand or fall on their own.

A problem with just throwing mass taxes on the rich is that it will negatively effect the economy. As I said, the rich are the ones who provide jobs. If they have less money or fear they will soon have less money in the near future, they won't hire or invest or expand. Penalizing the rich harms the free market that the American economy is still mostly based on. If we were spending less, it wouldn't exactly insta-boost the economy, but it would remove a lot of the worries and allow people to feel comfortable in spending/investing again. THAT, more than any government handout or "stimulus" is what the economy needs. Government spending is nothing more than taking from one person without reward to give to another person without them having to earn it.

Hasnt negatively effected the economy in the EU our growth rates have always been the same as the US growth rates (sometimes higher)

I am a minimum wage worker.

and do you live alone and able to get by without increasing your own debt?

 

[Random Hero]

Ain't not no nonebody in gummint gonna tell me what to do. *Fires rifle recklessly into the air.*

But seriously,

After this whole debt issue is over, there needs to be serious reform to all American governance. This has proved, to me at least, that we have given our government (Federal and State) way too much power over the years. Their powers need to be scaled back immensely.

 

[Malon]

I find most amusing that we're doing a bit better discussion and analysis of the situation than I've seen some of the news stations doing.

That's because most of us, dare I say all of us, just want what's best for the country and our society despite our differing beliefs. The media, on the other hand, has an agenda no matter if they're right wing or left wing, and will spin it anyway they can to get their side political points and leverage.

Also, Keanu, the EU is the worst possible example you could give of a thriving economy. Their system is crashing down all around them. Italy, Ireland, Greece, Portugal, Spain, Hungry, Latvia, and Romania are only the start. Its been shown that once one country in the EU goes down economically, it starts a wildfire that brings neighboring nations down with it, which is part of their current economic crisis. They're trying desperately to bail out the countries that are having these problems, because they fear it will spill in to the rest of the EU. If that is true, than Belgium, Netherlands, Germany, Switzerland, Austria, and the UK aren't as well off as you are portraying them to be. I read an article on this exact thing yesterday.

 

[Andreus Makaryk]

Last time the Democrats tried to cut them, the economy went into a nosedive. Taxing the rich (who actually provide the jobs) is never a good idea in a down economy. Even Obama claims to know that (I posted a link to him saying just that a while back). In a down economy, you cut taxes so people have more income on hand to spend in truly stimulating the economy.

I specifically take issue with this.

The US has maintained a low-taxes-on-the-rich policy for the last ten years.

So, if the rich create jobs when taxes are low, WHERE ARE THE JOBS!?

Even before the 2008 crash, job growth was anemic compared to historical standards. Hell, the recovery from the 2001 recession was called the "jobless recovery" because job growth was so slow, barely enough to keep up with population growth, much less actually recover from the losses caused by the recession.

The 2000s were a decade with ZERO net job creation. So why didn't the rich, who very clearly did not have their money taxed away by the government during this time, create jobs? I think even the 1930s did better.

Oh wait...the rich don't create jobs...they simply hoard tax cuts in their bank accounts.

DEMAND FOR PRODUCTS AND SERVICES creates jobs. It does so by offering the rich a greater or more certain return on investment than bank accounts or speculative bubbles such as the economy experienced the last decade. But surprise, with unemployment so high, with economic uncertainty so high (especially with the political bickering threatening to cause a first-ever Treasury default because our politicians can't kriffing grow up), there is insufficient demand.

The rich very clearly won't create jobs for which there is no demand. I can't really say I blame them for this. It is at this point that the government must become an employer of last resort so that demand can stabilize. Employed people create demand by spending their paychecks, hopefully enough demand so that private-sector employment can grow and the government can back out of such temporary work-creation programs without hurting the economy. Ideally, this would be paid for by taxing the idle wealth that the wealthy hoard, therefore circulating that idle wealth back into the economy. There is no political will to do this, and therefore the US economy is doomed to stagnation or worse.

Maybe if the rich thought their idle wealth might actually get taxed, they'd be less likely to hoard it and more likely to invest it in job-creating activities...hmm.

 

[Brandon Rhea]

Also, Keanu, the EU is the worst possible example you could give of a thriving economy. Their system is crashing down all around them. Italy, Ireland, Greece, Portugal, Spain, Hungry, Latvia, and Romania are only the start. Its been shown that once one country in the EU goes down economically, it starts a wildfire that brings neighboring nations down with it, which is part of their current economic crisis. They're trying desperately to bail out the countries that are having these problems, because they fear it will spill in to the rest of the EU. If that is true, than Belgium, Netherlands, Germany, Switzerland, Austria, and the UK aren't as well off as you are portraying them to be. I read an article on this exact thing yesterday.

Collectively, the EU is one of if not the largest economy in the world. It is the largest trading partner of the United States -- and the World Trade Organization considers the EU one entity and doesn't recognize member states.

Countries in the EU have issues, serious issues that require reforms, but this whole "the system is crashing down all around them" is just as much an exaggeration as saying the American system with banks and states that need to be bailed out is crashing down all around us.

Plus, like Keanu said, not every EU country follows the same model. The countries that are successful are following a particular model, and countries like Germany that are more centrist are doing extremely well. Germany is a global powerhouse.

And once Greece reforms itself, countries that are giving it big bailouts, such as Germany, will actually make a profit.

EDIT: Oh, and I'll raise you multiple university courses on the subject. :p

 

[Sovereign]

countries like Germany that are more centrist are doing extremely well.

Germany is a communist republic compared to the U.S.

And once Greece reforms itself, countries that are giving it big bailouts, such as Germany, will actually make a profit.

No they won't.

 

[Brandon Rhea]

Germany is a communist republic compared to the U.S.

And yet, it's not actually communist or socialist.

Funny how that works.

No they won't.

Yes they will, theoretically, with the rate of interest.

 

[Sovereign]

Yes they will, theoretically, with the rate of interest.

They might not even get it back. It's a rather risky investment for the interest they're getting, no?

 

[Brandon Rhea]

They might not even get it back. It's a rather risky investment for the interest they're getting, no?

Hence why I used words like "once Greece reforms" and "theoretically." Regardless of whether they make the profit, though, they'll have bailed out Greece, so that's the return on their investment. Profit is the icing on the cake.

 

[Sovereign]

Hence why I used words like "once Greece reforms" and "theoretically." Regardless of whether they make the profit, though, they'll have bailed out Greece, so that's the return on their investment. Profit is the icing on the cake.

Use simple words next time.

 

[Brandon Rhea]

Use simple words next time.

I did. You're just stupid.

:CStern

 

[Keanu]

I think the european debt crisis is solved for quite some time. The EU nations just took some measures that will stabalize the EU as a whole (not just by affecting greece but ireland, italy and portugal aswell)

http://www.latimes.com/business/la-fi-0723-petruno-column-20110723,0,459902.column

 

[Cailst]

And yet, it's not actually communist or socialist.

Funny how that works.

Socialist and communist are pretty broad definitions and Germany could definitely fit as a socialist country under some definitions.

 

[Rom]