By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Politics - New Legislative Body - Super Congress

Kasz216 on 25 July 2011
Rath said:
HappySqurriel said:
 

With proper budgeting practices deficits are entirely unnecessary ...

If you collect 5% or 10% more money that you spend and save it to ensure that spending levels can be maintained in the case of a economic shock, or increased in the case of war, and if you expend this fund you cut discretionary spending and increase taxes to cover the shortfall.

There is no reason not to run a deficit in the face of a short term loss such as a natural disaster other than some moral problem with it. It's the sensible thing to do economically.

Edit: And in your plan to save money for a crisis - spending assets built up over previous years would still be running a deficit in that particular year.

 

@Viper. I agree the debt ceiling needs to be brought under control and the US needs to return to surplus. That doesn't mean the balanced budget amendment isn't a straight-jacket for the government.


The balanced budget ammendment has a provision allowing for that.



Around the Network
badgenome on 25 July 2011
Mr Khan said:
badgenome said:
richardhutnik said:
badgenome said:
I hope all the assholes who have been crying about the need for bipartisanship are happy. Whenever Republicans and Democrats agree on something it's invariably worse than what either of them could ever dream up by themselves.

At least this, which in no way do I support, will be better than what will happen if they don't raise the debt ceiling.  End result is half the government shuts down, and guess who decides what half operates?  One thing, it isn't going to be anyone elected, or it will end up on Obama's desk.

A nation has to have SOME sort of agreement to a minimum things that will be off the table, and pay for the rest.   What would be better, than on one agree to anything and thing no decisions are made, and then you go into half the government shut down?

The executive branch decides which agencies continue to operate once the debt ceiling is reached, and last I checked Obama was elected, so I don't get your point.

This bullshit is way, way worse than the Department of the Interior shutting down for a few weeks. And actually, I sort of hope a partial shutdown does happen just so all the pants wetters can see that the fucking world doesn't end when the government has to actually live within its means for a little while.

It's not about partial shutdown, nor even about the potential damage of millions of social security recipients going without for a bit. It's about credit ratings and the domino effect. We've sustained such huge deficits because of a high credit rating and the fact that our bonds are still a very good investment.

The venom of partial default will not be about what we can't pay, it'll be the backlash of investor confidence, it'll be the fact that Japan, with very high debt themselves has a lot of their positive balance sheet sunk into U.S. bonds, or China, whose consistent growth has been helping to float the global economy through recent turmoils, who also have a rather large proprotion of holdings in bonds that may suddenly find themselves sharply reduced in value

Imagine the credit-default-swap meltdown, but played out in the treasuries of the largest economies in the world, rather than in the banking sector. I'm not saying this will happen, but this is where the danger really lies here

Since the problem is debt, not some mostly imaginary debt ceiling, that's bound to happen anyway sans major changes on a scale that there's no evidence either party has the stomach for. All they seem able to agree on is pussy shit like the McConnell plan, which Moody's has already warned won't save our AAA rating.



Kasz216 on 25 July 2011

By the way, if we can push this problem onto our grandchildren. I say do so.

Cause, I plan to have zero children.

Me, I'm afraid shits going to blow up right when i'm old and need to be in a nursing home.



badgenome on 25 July 2011
Kasz216 said:

Me, I'm afraid shits going to blow up right when i'm old and need to be in a nursing home.

Unless you are in your late 70s, you're far more optimistic than I am.



HappySqurriel on 25 July 2011
Rath said:
HappySqurriel said:
 

With proper budgeting practices deficits are entirely unnecessary ...

If you collect 5% or 10% more money that you spend and save it to ensure that spending levels can be maintained in the case of a economic shock, or increased in the case of war, and if you expend this fund you cut discretionary spending and increase taxes to cover the shortfall.

There is no reason not to run a deficit in the face of a short term loss such as a natural disaster other than some moral problem with it. It's the sensible thing to do economically.

Edit: And in your plan to save money for a crisis - spending assets built up over previous years would still be running a deficit in that particular year.


For a country as geographically large as the United States, spending on natural disasters should be budgeted for because the regional variation ensures fairly consistent spending on disaster relief. Certainly, there would be some years where you might need to pull additional money out of your 5% to 10% budgetary surplus to cover the spending and other years where you would have surplus money to add to the 5% to 10% budgetary reserve but it would demonstrate a remarkable lack of foresight to run a deficit due to a natural disaster.

Now, you're correct that it would technically be a budgetary deficit when you spent some of your reserves but it is not problematic deficit spending because there is no built up debt. When you pay for recurring spending through debt as a government you're not that much different from an individual who pays for their rent or groceries with debt; you’re participating in behavior which is unsustainable, and the total cost of what you’re paying for today is dramatically higher than you believe because of the cost of interest over the lifetime of debt.



Around the Network
richardhutnik on 25 July 2011
Rath said:
HappySqurriel said:
 

With proper budgeting practices deficits are entirely unnecessary ...

If you collect 5% or 10% more money that you spend and save it to ensure that spending levels can be maintained in the case of a economic shock, or increased in the case of war, and if you expend this fund you cut discretionary spending and increase taxes to cover the shortfall.

There is no reason not to run a deficit in the face of a short term loss such as a natural disaster other than some moral problem with it. It's the sensible thing to do economically.

Edit: And in your plan to save money for a crisis - spending assets built up over previous years would still be running a deficit in that particular year.

 

@Viper. I agree the debt ceiling needs to be brought under control and the US needs to return to surplus. That doesn't mean the balanced budget amendment isn't a straight-jacket for the government.

Problem with the deficits is that they ran them in supposedly good times, with people rationalizing, "Well it is only X% of the GDP.  It is manageable".  No one bothered to ask what happens if unemployment spikes over 9%, or you face issues with GDP growth.  Also, they decided to pass tax cuts, without matching spending cuts.  Apparently it is trendy to do that, because maybe they know that no one will approve of spending cuts, and hey, what is a little deficit.  Apparently if you slash taxes, the revenues will be made up greater than if you don't, like the economy doesn't grown on its own, even if you left taxes alone.

WAY too much manipulation and belief what government does can work miracles, rather than the real miracles coming from the bottom up and the people.



Viper1 on 25 July 2011

Another issue was relying on the GDP figures to calculate growth. GDP includes government spending. So if the government spends more it looks like the economy is growing. Problem is worse given that the government doesn't produce anything. All that capital was being used on a non-producing enterprise so real growth never came with the spending growth.

It only looked like the economy was getting bigger when actually it was getting smaller. And with government and Fed boosted economic bubble markets. The shit and the fan were betrothed.



The rEVOLution is not being televised

richardhutnik on 25 July 2011
Viper1 said:
Another issue was relying on the GDP figures to calculate growth. GDP includes government spending. So if the government spends more it looks like the economy is growing. Problem is worse given that the government doesn't produce anything. All that capital was being used on a non-producing enterprise so real growth never came with the spending growth.

It only looked like the economy was getting bigger when actually it was getting smaller. And with government and Fed boosted economic bubble markets. The shit and the fan were betrothed.

I believe that embedding any statistical measures into the constitution is a sign of gross incompetence on the part of individuals in the government to not do what they are supposed to do.  It is seriously lame.  I consider it akin to people who want to define marriage in the constitution also.  If a society doesn't know what marriage is, putting it in the constitution isn't going to help matters.



Viper1 on 25 July 2011

I'll agree with that.



The rEVOLution is not being televised

HappySqurriel on 25 July 2011
richardhutnik said:
Viper1 said:
Another issue was relying on the GDP figures to calculate growth. GDP includes government spending. So if the government spends more it looks like the economy is growing. Problem is worse given that the government doesn't produce anything. All that capital was being used on a non-producing enterprise so real growth never came with the spending growth.

It only looked like the economy was getting bigger when actually it was getting smaller. And with government and Fed boosted economic bubble markets. The shit and the fan were betrothed.

I believe that embedding any statistical measures into the constitution is a sign of gross incompetence on the part of individuals in the government to not do what they are supposed to do.  It is seriously lame.  I consider it akin to people who want to define marriage in the constitution also.  If a society doesn't know what marriage is, putting it in the constitution isn't going to help matters.


While it may be foolish to define too many specifics in the constitution, it is also foolish not to have well defined rules and limitations that governments are bound by ...

For example, every program that is introduced by the government should be fully paid for before it is implemented; and if the costs exceed the funding that was set out for it the government should be forced to find additional funding for these programs without going into debt. Generating programs with unfunded liabilities and running massive deficts to fund recurring program spending should be treated as the equalivalent to treason.