The debt ceiling stuff is a matter of terminology, although I perhaps misspoke with paying off, rather than just paying. It's good that you're looking into real detail, though.

As for the public sector size issue, that's a strong demonstration of the problem with targetting of spending. Americans are, as I think I said earlier in this thread, so absurdly scared of "socialism" that they're unwilling to enact sensible public OPTIONS for things. Socialism isn't the government providing options, socialism is government owning the economy - that is, it's where the government owns all businesses, supposedly on behalf of the people (although in practice, that's never how it works out). Giving the public a no-frills government-funded option for things like education, healthcare, etc, is good governance, not socialism.

So again, it's not that America spends too much money, it's that it spends it poorly. Note, by the way, that federal government activity's component of the economy is not the full impact of government spending. For instance, wages paid to congressmen and senators would not be considered part of the economy, but that money is then either put in the bank or spent - in either case, it then affects the economy via the private sector. Similarly, I doubt that most education spending would register as economic activity, but that money goes to teachers, to principals, to admin staff, etc, who then spend or save that money, again showing up in private activity.

Of course, some spending won't show up. This includes, for instance, any interest repayments on foreign debt, international aid, and tax incentives for large corporations that use offshoring to save money. But at the same time, much of the money spent on things that do impact the economy will flow on - the teacher might buy a laptop, which then allows the manufacturer to pay more money to their employees, who then spend their wages on something, money from which goes to the wages of yet more employees, and so on. Each time the money is spent, it is registered separately with regards to the economy - a country with "$1 million" in circulating currency is capable of having a GDP many times as big, purely because of this.

Indeed, while the US GDP is around $15 trillion, the amount of money in circulation in the US is just $1.16 trillion. So on average, each dollar is spent nearly 13 times per year.

In that case, the issue might be in functionality and purely political/legal in nature. Education is suppose to be a state and local matter, for example (schools get money from property taxes.)  It is in the constitution that education should be a state power. This is for obvious reasons (so propaganda can't be imposed in schools by a federal power.) Additionally, many people viewed the federal government's involvement with "No Child Left Behind" as a waste of tax dollars, because other countries found better results with less money. Hence, one might argue for the federal government to provide vouchers to enable the choice of private schools instead of giving additional funding to public education. In 2007, in example, because of the dependency on the federal government for "No Child Left Behind" funds, many states were left to dry when $75 billion was moved elsewhere in the budget. Furthermore, such funding gives the federal government  more say in the control of certain states than others (those which receive money.)

I think most Americans oppose social democracy because they view it as a means of dependency on government, which many do not like at all because it creates a strong federal state and one which will have more control over people's lives. Americans are far more individualistic than Europeans, and I assume other ex-British colonials. In general, the Classical Liberal sentiment is still strong, albeit not in politics. There is also a strong federalism ideal in place, in which state rights shouldn't be infringed upon by federal rights. The label of "socialism" is just a media tool by the right in general to make social democracy scarier. 

As for healthcare, the issue with Obamacare is mostly the mandatory purchase. The majority of Americans oppose it because it is unconstitutional and the government shouldn't have power to force people to purchase health care (or anything for that matter.)  Furthermore, it hurts the private health professionals (only covers some of the cost) so they refuse to take it, hence making it useless.  This is why you see many state governments nullifying it, or attempting to. The biggest problem is the fine ( or what they call a"tax".) Discard that, and I think most people would be happy with it,  as they are happy with the current Medicaid/Medicare already in place. 

And then I think all, except the neo-conservatives and their followers, agree that our military spending needs to decrease and we need to bring most of our troops in the world back. For far too long Americans have been paying for military bases in countries that are at peace and can put their own money into their own military. 

Those are the three largest investments by the U.S Federal government. After they're adjusted, I think it is quite clear that spending would be reduced regardless of whether it is necessary or not, and debt can be paid off. However; the way things are going right now can't persist. 

Whether education rules are handled at the federal level is immaterial. The federal government should be, at least in part, funding the public school systems, and placing safeguards on how states can run the system to ensure that states don't impose ideology on children. How can the federal government justify it? Ironically enough, through the First Amendment. Yes, it has "freedom of speech"... but just as how it doesn't permit perjury, it also doesn't mean that you can force people to listen to your speech. As children are required to be at school, both freedom of speech and the establishment clause prohibit mandating that children be taught one ideology or religion as the "correct" one.

Also, I think you'll find that Australians are a remarkably individualistic lot, very comparable to the US. But we also have a strong history of working our way up from the bottom, in part thanks to the whole "convict" history stuff - and we recognise the need to work together to make everyone's lives better. Something Americans seem to still have trouble with (ironically, given the level of religiosity in America - one of the other ways that Americans differ significantly from Australians by the way).

As for the mandatory purchase part of "Obamacare", what most Americans don't get is that it's a necessary part of the system. Requiring that all Americans (who can afford it) buy healthcare, you expand the base of the insurance system, thereby making it possible for insurance companies to cover those with preexisting conditions without going bankrupt. Indeed, if you look into it, the mandatory purchase condition was put in place for the sake of the insurance industry, and insurance companies like it.

The big problem with Obamacare is that it's still private health insurance. In Australia, we have our own "Medicare"... but Medicare in Australia covers all Australians, with a "Medicare Levy" charged on those earning more than a certain amount. Medicare could be thought of as public health insurance, and it operates on a non-profit basis. There are then private health insurance companies that cover private hospitals (except in critical emergency cases, which are covered by Medicare) and various optional extras, etc. Private health insurance also has a shorter waiting list, as fewer people have private health insurance than public health insurance.

The fact of the matter is, too many Americans have a problem with tax. They want all of the benefits of government, but don't want to have to pay for it. And American politicians play off this fact in order to get support.

On military, you're right - part of the problem is all of the bases stationed elsewhere in the world.

And yes, like I've said a couple of times, at first the US spending is going to have to drop. But as the debt falls, spending should increase again.

Now to turn attention to the one that Americans seem remarkably scared of - often called the "third rail" of American politics. Social Security. Now, I'm very much a left-winger in terms of my natural inclinations. But America's social security system is woefully inadequate compared with Australia's system, which is a system predicated on private accounts. We call it Superannuation, and it essentially works like this - based on your wage, your employer is legally required to pay at least a certain amount of money into a superannuation account of your choice. This account, which you cannot access to draw money out of it until you turn 65 (retirement age) except in exceptional circumstances, usually gets better interest than your typical savings accounts, because banks can be certain that the money will remain available for a significantly longer period of time. The government will also provide an incentive (at one point, it was "we'll match you dollar-for-dollar for any non-mandatory contribution you make to your Superannuation") for you to put additional money into your superannuation account, up to a certain point.

There is also a public pension available, as a backup, mostly for those who, for one reason or another, didn't have enough money coming in to save a reasonable amount in terms of superannuation. And you get to choose which bank you have your Super stored with, with each bank offering various options, such as allowing you to have the money invested in the stock market, for instance (but with the stocks remaining in your Superannuation account, so you still don't get access to the money until retirement).

On the flipside, our unemployment benefits are very generous, compared to America, although you have to show that you are making an effort to find work in order to remain on the benefits (there is no maximum time after which it gets cut off). For a single adult looking for work, you get AU$228 per week (there is also a separate amount available to help people cover the cost of rent, if they are renting). This amount is independent of the amount that the person may have been earning prior to losing their job. Sounds like a relative boon for people wanting to live on welfare, right? Well, Australia's unemployment rate (which is basically the number of people on unemployment benefits) is 5.2%, compared with 7.7% in the US.

In all seriousness, if America wants to improve their system, a great starting point is to look at Australia. We may not be the best with regards to any of the systems, but we seem to do better than America on most measures.

Yeah i heard of that, it's called the positive mulitiplier effect. 

But maybe, if farming becomes successful there, it might start to attract people to Detroit, it's possible. Although, It should of never been allowed to rot like that in the first place, it amazes me that they are cities like that in America

Personally, I think this is all simple.  Keep tax rates for the middle class where they are.  Maybe raise them slightly on those making over $1M, not this $250,000 is now stinking rich BS.  And, we need to raise taxes on the poor.  I'm sure no politician would have the balls to do it, but it needs to be done.  What I would do is take the bottom 50% that don't pay any federal income taxes and split them into two groups.  The bottom half would only pay $1 a week, while the top half would pay $2 a week.  Nothing that would crush them financially, but it would definitely give you more revenue.  Of course, if I truly had my way I would do away with this ridiculous tax system and pass either a flat tax or national sales tax, preferably the latter.  That means no loopholes or deductions, and you pay tax on everything you buy.   That would even get any illegals that don't pay income taxes.  But, still, the biggest problem is spending. 

We need to stop the automatic yearly hikes in a department's budget.  In fact, have an independent probe go through each one and weed out any expenses that are not needed.  That includes unneeded personnel.  We definitely need to have a probe for the Defense Department, too, but I would save that one for last, since its so important.  Another thing we need to do is actually get rid of all these BS committees and agencies that don't do jack shit but get paid.  Here's a list to show just how big and useless some of our government is.

Also, quit demonizing the rich.  Here's a nice parable:

'Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this…

• The first four men (the poorest) would pay nothing
• The fifth would pay $1
• The sixth would pay $3
• The seventh would pay $7
• The eighth would pay $12
• The ninth would pay $18
• The tenth man (the richest) would pay $59

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

The bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

• And so the fifth man, like the first four, now paid nothing (100% saving).
• The sixth now paid $2 instead of $3 (33% saving).
• The seventh now paid $5 instead of $7 (28% saving).
• The eighth now paid $9 instead of $12 (25% saving).
• The ninth now paid $14 instead of $18 (22% saving).
• The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.'

Everytime I see that this thread got a new post I think and hope they have an agreement;...And always I am dissapointed :(.

1. The thing is, most of the sorts of things we're talking about have nothing to do with individual liberties. The few exceptions, such as the "obamacare fine" thing, are a necessary evil. And what I find curious is that, in your response to my description of Australia's Medicare, you said it was a good idea and a solution to the Obamacare problem... and it has a Medicare Levy that is comparable to the Obamacare fine, except that everyone above a certain income has to pay it.

I'm sure that Americans like to give money to charities. But here's something you might not be aware of. According to the World Giving Index, Australia comes in highest, followed by New Zealand, Ireland, Canada, Switzerland, and then the US. Only 60% of Americans give to charity, compared with 70% of Australians. Something to think about.

2. As I said, the big irony is that you like the sound of Australia's Medicare system, but dislike Obamacare's no-insurance fine, despite the fact that Australia's Medicare system goes beyond a fine to a full-fledged tax on all who can afford it. Is your problem the fact that only those who don't buy private insurance have to pay it? Also, given your big-L Liberal positioning, I'm surprised that you're strongly in favour of a single-payer public healthcare system (that's what Medicare is) - in Australia, we call it "Bulk Billing".

Anyway, the point is that, for a proper public health option or universal healthcare to work, you must have a strong public health system - something that America doesn't have, right now. Hence why it's so hard when you're on Medicaid.

3. I think you misunderstood. Americans, like everyone else, want a strong education system, a strong health system, functional infrastructure (roads, rail, power lines, water pipes, etc), some sort of social safety net in case they lose their job, etc. But Americans don't want to pay for it. Research has shown that the people who most loudly condemn government benefits are also the ones who most use those benefits. They want to have their cake and eat it too.

4. 40% of GDP isn't especially high. This site shows general government total expenditure for 2010 by country. The US is listed at US$6 trillion, which is 40% of US$15 trillion. Australia is listed at AU$500 billion, which is about 33% of GDP. Canada is at just over 40% of GDP. Norway is nearly at 45% of GDP - and you'll note that Norway leads the world in many measures. Of course, Norway isn't perfect - it has high debt (not as high as US debt, but 50% of GDP is still high) and was in recession during 2009 (GFC hit it hard enough to do that for one year, but they're back to just under 2% per year growth). But they're running surpluses, enabling them to pay off their debt - despite government expenditure at 45% of GDP. Their unemployment rate is remarkably low, around 3.2%.

5. Unemployment benefits having time limits aren't even remotely an incentive to work. It just punishes those who lack the skills necessary to get a job in a strained economy such as what America is currently experiencing. As I pointed out, despite Australia not having a time limit on unemployment benefits, we have lower unemployment than America. The fact of the matter is, if a person can show that they've been seeking work (in Australia, you have to apply for 5 jobs a week to get unemployment benefits), they should be supported by the government. Note that this doesn't mean that there aren't welfare cheats. There certainly are. But they're a minority.

Note that America's unemployment rate only covers people who are on unemployment benefits, which means that anyone who has passed the 99 week limit is seen to disappear from the unemployment rate. So when comparing America with Australia, you actually have to raise America's rate further to make it align with Australia's in terms of definition.

6. Oh, the big corporate bailouts were an idiotic move by your government. Had they been smart, rather than bailing out the banks, they'd have bailed out the people who were in impossible mortgages. The banks would have been saved anyway, but the ordinary people wouldn't have experienced all of the foreclosures, etc. And then, with strong regulations to prevent the situation from happening again, things would have worked out well. And with many people suddenly no longer facing bankruptcy, the economy would have been saved. But it happened the way it happened, and now America has the task of fixing the system (re-instating Glass-Steagall would be a good first step).

Having said that, please don't use the term "fascist" to refer to what they did. Terms like that have very specific meanings, and the bailouts were not fascist in any way. It's as bad as confusing communism with socialism, or confusing socialism with national socialism (Nazism is nothing like Socialism).

The US is spending more than it generates. It's really quite simple.

1996 Deficit - $188,335,000,000

2012 Deficit - $1,224,790,000,000

----------------------------------------------------

1996 Spending - $1,560,500,000,000

2012 Spending - $3,795,500,000,000

------------------------------------------------------------

1996 Revenue - $1,453,100,000,000

2012 Revenue - $2,468,600,000,000

In summary, 10 fold increase in deficit as a result of 2.5 fold increase in Spending despite generating 170% the revenue of 1996.

Spending is the problem, not tax. Not sure if that's what you're advocating, but it sure seems like it. Maybe you're just offering a solution i.e. increase taxes and curb spending? The balanced approach?

It simply isn't possible to increase taxes enough to offset expenditures, but it would provide some help.