Republican bill passes, opening path to debt deal

[jadis]

If you want a doomsday scenario to worry you over your children's future, the far more likely one is a slow decline and decent of US status, power and influence, both political and economic. Just look east, at all the great powers of Western history -- the UK, France, Italy, Greece. Their present is more likely our future. Empires fall.

Very interesting. And this is not the first time I heard this. About 15 years ago, an old friend told me this exactly. That Empires fall. And let us include Spain here as a world power in those days when their conquistadores were sailing around the world claiming any land they see for their empire. Who would have thought they would be who they are in this century - virtually insignificant. The US is the lone remaining world superpower after the fall of the Soviet Union and the Eastern bloc nations. Who would have thought that their deficit amounts to $114.5 trillion today? About 10 years ago, a friend who migrated to LA told my sister "We (she became a US citizen) are the movers and shakers of the world, if we sneeze, the world catches cold'. In those days, she never meant that her country would be teetering on default.

 

[Phelonious Ponk]

Very interesting. And this is not the first time I heard this. About 15 years ago, an old friend told me this exactly. That Empires fall. And let us include Spain here as a world power in those days when their conquistadores were sailing around the world claiming any land they see for their empire. Who would have thought they would be who they are in this century - virtually insignificant. The US is the lone remaining world superpower after the fall of the Soviet Union and the Eastern bloc nations. Who would have thought that their deficit amounts to $114.5 trillion today? About 10 years ago, a friend who migrated to LA told my sister "We (she became a US citizen) are the movers and shakers of the world, if we sneeze, the world catches cold'. In those days, she never meant that her country would be teetering on default.

Well, we sneezed all over the front of our shirt, Phil, but I wouldn't count us out just yet. We still have massive resources and, debt or no debt, the world's dominant economy. If we can just stop staring at the beetle on the bark of the tree and make an investment in the long-term health of the forest again, this empire may have another century or two. Our deficit problem is peanuts compared to our infrastructure, education, politics...and resulting employment problem. The fastest way for the world's largest consumer market to become a third world nation, and bring much of the world down with it, is to develop a chronic employment problem. And for 30 years or so, we've been busting our asses to do just that.

Tim

 

[jadis]

Well, we sneezed all over the front of our shirt, Phil, but I wouldn't count us out just yet. We still have massive resources and, debt or no debt, the world's dominant economy. If we can just stop staring at the beetle on the bark of the tree and make an investment in the long-term health of the forest again, this empire may have another century or two. Our deficit problem is peanuts compared to our infrastructure, education, politics...and resulting employment problem. The fastest way for the world's largest consumer market to become a third world nation, and bring much of the world down with it, is to develop a chronic employment problem. And for 30 years or so, we've been busting our asses to do just that.

Tim

Well said, Tim. Agreed absolutely.

 

[Phelonious Ponk]

Well said, Tim. Agreed absolutely.

Yeah, a shred of optimism. Then again, everything in the world is happening in such compressed time now. Maybe Egypt got a few thousand years, Rome got a thousand, Western Europe got a few hundred...and by the time we got to the US, the lifespan of an empire is...from WWII until now? Could be. Sometimes it sure feels like a free fall.

Tim

 

[jadis]

I read yesterday that the debt deal could slash hundreds of billions from the Pentagon Budget. I have been thinking for a long time how a significant slash of defense money could have altered the US economy today, after all, money is money. If I'm not mistaken, I read something like in the last ten years, trillions of dollars were spent in the war in Iraq and Afghanistan.

 

[jazdoc]

I read yesterday that the debt deal could slash hundreds of billions from the Pentagon Budget. I have been thinking for a long time how a significant slash of defense money could have altered the US economy today, after all, money is money. If I'm not mistaken, I read something like in the last ten years, trillions of dollars were spent in the war in Iraq and Afghanistan.

Here a graph summarizing the defense budget:

So if we were to immediately stop the wars (or using the government's euphemism 'overseas contingencies') in Iraq and Afghanistan we'd cut $200 Billion from the budget -- bring this year's deficit to...$1.3-1.5 Trillion.

This chart nicely summarizes the main driver of our current deficits and debt:

Things get really scary when you look at the projected trends in spending as summarized by the 2009 Social Security and Medicare Trustees report:


"The financial condition of the Social Security and Medicare programs remains challenging. Projected long run program costs are not sustainable under current program parameters. Social Security's annual surpluses of tax income over expenditures are expected to fall sharply this year and to stay about constant in 2010 because of the economic recession, and to rise only briefly before declining and turning to cash flow deficits beginning in 2016 that grow as the baby boom generation retires. The deficits will be made up by redeeming trust fund assets until reserves are exhausted in 2037, at which point tax income would be sufficient to pay about three fourths of scheduled benefits through 2083. Medicare's financial status is much worse. As was true in 2008, Medicare's Hospital Insurance (HI) Trust Fund is expected to pay out more in hospital benefits and other expenditures this year than it receives in taxes and other dedicated revenues. The difference will be made up by redeeming trust fund assets. Growing annual deficits are projected to exhaust HI reserves in 2017, after which the percentage of scheduled benefits payable from tax income would decline from 81 percent in 2017 to about 50 percent in 2035 and 30 percent in 2080. In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time"

Which can be summarized by this chart:

 

[jadis]

Thanks for the enlightening post, jazdoc.

 

[Steve williams]

Mark and Whatmore

I have taken the liberty of deleting the last 2 posts (one by each of you) as I felt they were just too politically charged and really don't belong here at WBF.

Sorry guys

 

[RBFC]

Mark and Whatmore

I have taken the liberty of deleting the last 2 posts (one by each of you) as I felt they were just too politically charged and really don't belong here at WBF.

Sorry guys

Agreed. I was contemplating the same action when I returned to see the task done.

Lee

 

[Steve williams]

I have also taken the liberty of deleting a recent post by Park and Roger. Once again, too politically charged and don't belong here at WBF

Thanks for understanding guys

 

[es347]

I post very little here since my posts largely go ignored...however in scanning this thread PP (Tim) posted this statement: Just look east, at all the great powers of Western history -- the UK, France, Italy, Greece. Their present is more likely our future. Have you seen what's going down in London today? Riots, burning buildings, robbing citizens, attacking the police...and firemen. If Tim is correct that their present is our future, how long before things really get violent here? We've already got "violent flash mobs" doing their part in redistributing wealth. Will it be the unions that get a much larger movement kick-started? This tactic is right out of the Sal Alinski playbook "Rules for Radicals". Conspiratorial? You be the judge.

 

[jazdoc]

Why are they rioting if they have universal health care?

 

[Phelonious Ponk]

I post very little here since my posts largely go ignored...however in scanning this thread PP (Tim) posted this statement: Just look east, at all the great powers of Western history -- the UK, France, Italy, Greece. Their present is more likely our future. Have you seen what's going down in London today? Riots, burning buildings, robbing citizens, attacking the police...and firemen. If Tim is correct that their present is our future, how long before things really get violent here? We've already got "violent flash mobs" doing their part in redistributing wealth. Will it be the unions that get a much larger movement kick-started? This tactic is right out of the Sal Alinski playbook "Rules for Radicals". Conspiratorial? You be the judge.

Conspiratorial? No. I don't think we should be expecting a return to tribalism as a result of an uprising against a New World Order, but if you get enough unemployed, disenfranchised young people boiling in the summer heat, you can expect that kind of trouble. We didn't need a conspiracy theory or Sal Alinski's book to get the Rodney King riots. We just needed some over-zealous cops, a video camera and a lot of idle, angry people a desire to raise hell and loot.

Yeah, it could happen here; it has. That doesn't make it a "movement."

Tim

 

[Phelonious Ponk]

Why are they rioting if they have universal health care?

People on their economic level have universal health care in the US: It's called the emergency room.

They're rioting because they're more or less permanently unemployed and angry about it, they have a lot of time on their hands, and when you don't have a job, looting is the sale you can afford; tax-free weekend isn't quite enough.

And of course none of that excuses their behavior.

Tim

 

[es347]

Hey three replies! I've raised my batting average. Tim, I didn't say it was a movement. I asked if it may become one.

 

[Gregadd]

It is sad We can easily, feed, house, cloth and medically treat our citizens. Unfortunately the rich play with money supply The reason these countries are in trouble is because the US forced them to play along.

 

[es347]

It is sad We can easily, feed, house, cloth and medically treat our citizens. Unfortunately the rich play with money supply The reason these countries are in trouble is because the US forced them to play along.

Greg, the government can easily feed, house, clothe and treat our citizens? Please explain. How did we force the UK to play along?? Not sure I follow you.

 

[es347]

cue cricket sounds..

 

[Phelonious Ponk]

Greg, the government can easily feed, house, clothe and treat our citizens? Please explain. How did we force the UK to play along?? Not sure I follow you.

I'm not Greg, nor do I play him on TV, but I suspect he's referring to the fact that we, as a nation, have the wealth to feed, house, clothe and treat (as in healthcare) our citizens.

Tim

 

[egidius]

This is good reading from outside: I live in Switzerland, and feel the extreme positions as "extremely" disturbing. It actually looks, as if your politicians do not want to work with each other any more, and what then? Guns?
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