A budget-buster in the making

Discussion in 'Politics' started by carpro, Nov 22, 2009.

  1. carpro

    carpro
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    http://www.washingtonpost.com/wp-dyn/content/article/2009/11/20/AR2009112002618_pf.html

    A budget-buster in the making
    By David S. Broder
    Sunday, November 22, 2009

    It's simply not true that America is ambivalent about everything when it comes to the Obama health plan.

    The day after the Congressional Budget Office (CBO) gave its qualified blessing to the version of health reform produced by Senate Majority Leader Harry Reid, a Quinnipiac University poll of a national cross section of voters reported its latest results.

    This poll may not be as famous as some others, but I know the care and professionalism of the people who run it, and one question was particularly interesting to me.

    It read: "President Obama has pledged that health insurance reform will not add to our federal budget deficit over the next decade. Do you think that President Obama will be able to keep his promise or do you think that any health care plan that Congress passes and President Obama signs will add to the federal budget deficit?"

    The answer: Less than one-fifth of the voters -- 19 percent of the sample -- think he will keep his word. Nine of 10 Republicans and eight of 10 independents said that whatever passes will add to the torrent of red ink. By a margin of four to three, even Democrats agreed this is likely.

    That fear contributed directly to the fact that, by a 16-point margin, the majority in this poll said they oppose the legislation moving through Congress.
     
  2. NiteShift

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    The real healthcare crisis is that Medicare and Medicaid are running out of money. If the Administration and Congress want to fix something, let them fix those disasters just waiting to happen. Instead, they come up with a whole new program and take funding away from M-care. Good thinking :rolleyes:
     
  3. billwald

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    The phrase, "running out of money" is only used for programs that one doesn't like. How come the Armed Forces never run out of money? Their money comes from the same pot.
     
  4. targus

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    Actually, it does not.

    Social security and medicare are funded by payroll tax withholdings.

    I am surprised that you are not aware of that fact.
     
  5. OldRegular

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    And this at a time when the "baby boomers" are entering the Medicare system!:BangHead::BangHead:
     
  6. OldRegular

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    Two things should be kept in mind:

    1.) Democrats have persistently blamed deficits on defense spending; and

    2) Defense spending, as a share of all spending, has been on a steady decline since Eisenhower.

    In other words, the most popular explanation for deficits is self-serving hokum designed to take the observer's eye away from the real cause - the cost of the Welfare State.

    In 1960 under Eisenhower, defense spending was 9.3 percent of GDP, and 52.2 percent of total spending; in 2008, it is projected to be 4.2 percent of GDP and 20.7 percent of total spending. Higher spending for Defense was affordable under Eisenhower; lower spending (relatively speaking) was unaffordable under Bush.

    http://www.salemnews.com/puopinion/local_story_031101900
     
  7. AresMan

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    However, "GDP" is a moving, fidgeted statistic. Measuring things in terms of "GDP" especially with figures from decades ago is not very accurate. Now consumption based upon borrowing is factored into GDP where is wasn't before. The government continues to ease and fidget the definition of GDP to make things look rosier than they really are.
     
  8. carpro

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    81 % of the people know Obama and his Obamacare acolytes are lying through their teeth.

    The result...

    Obama just keeps lying. He doesn't even bother to change the lie. He just tells another one.
     
  9. OldRegular

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    That does not change the fact that in 1960 half the Federal Budget was for Defense. I posted the source. I also remember that fact. That was before Social security was included in the Budget.
     
  10. billwald

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    Boggles my mind that Republicans don't know that the payroll tax goes into the treasury and is spent for current budget needs and has been done since SS was started. What, exactly, do you think is done with the payroll tax? Cash is put in Fort Knox? No, the Govt writes an IOU in the form of a Treasury note and spends the money.

    If anyone thinks the government acts stupidly . . . consider the stupidity of sitting on a pile of payroll tax cash while at the same time selling US debt to the Chinese. Or would you have the government buy the rest of the outstanding GM shares?

    With money . . . one must either sit on the cash or buy something or loan it to someone. Is their a 4th choice?

    Well, yes, there is. One can destroy existing money and decrease the money supply but that would be stupid while the country is selling debt to the Chinese.

    Exactly what do you good Republicans think that "money" IS? You all but into the stupid Libertarian theory that money is the greatest of all "goods" because one can buy goods and services with it? Money is an accounting convenience and a government backed IOU for future goods and services. Money basically only has value because you can pay taxes with it. It is the acceptability for paying taxes that ultimately makes it useful for buying other stuff.

    Remember the money changers whom Jesus hated? The Law required that the temple tax be paid with a Jewish sheckle. (sp?) The sheckle was NOT a form of money in general circulation which is why Jews had to buy them to pay their tax. In other words, it was the LAW which gave the sheckle value.

    If the Federal decided to accept subway tokens as payment for taxes (are there still subway tokens?) then sooner or later your local pub would start accepting subway tokens for beer. Then if the Feds started only accepting subway tokens for taxes a money market for them would come into existence and Federal Reserve Notes would lose value. Accountants would keep the books in ts instead of dollars.
     
  11. rbell

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    There was tons wrong with your post, but I had to correct this terrible error:

    Jesus did not hate anyone. Anyone with the most basic knowledge of theology would understand that.
     
  12. AresMan

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    Our current Federal Reserve notes are really a form of debt. They are not backed by anything, and much of what goes into circulation comes from borrowing. You are correct about the IOU, which shows how corrupt governments become.

    I think the current practice of selling US debt to the Chinese is an unsustainable practice, because the inflationary policies that the current and last administrations have set in place are antithetical to the reasons China would want to buy our bonds. Eventually, they will wake up and realize that they are losing out on the deal.

    Never. The government has NO business buying anything of the sort. The fact that the government can control the money supply and force redistribution like this to purchase private enterprise is appalling. I do not want the government getting into "business."

    One can also save money for a rainy day. That seems to be lost art today. And, since politicians do not like it when people save and borrow and spend less because they cannot act like Santa Clause and promise the sun, moon, and stars today for debt slavery tomorrow, and because the Fed is keeping interest rates way too low to make saving virtually worthless, people are not saving like they need to do to endure the recession and restore the economy.

    During the '79-'80 debacle, inflation was running rampant from "guns and butter" following the collapse of the Bretton Woods system. Fears about the collapse of the dollar ensued. Fed chairman Paul Volcker did the right thing then by increasing interest rates to around 20%. Although this caused a severe recession, it caused people to rebuild their savings, reallocate the malinvestments, and regain confidence in the dollar. After about a year the recession was over.

    Your view of money and its marginal utility sounds like it comes straight out of a Keynesian textbook.

    Well, destroying existing money and decreasing the money supply would increase the value. The Chinese would then have made a "good" "investment" and their treasury holdings would increase. However, such action would have unnecessary temporary stifling effects on the economy. The correct solution would be to raise interest rates substantially to speed up the recession, rebalance the economy, and rebuild savings. This is the hard medicine that we must endure from unhealthy easy credit policies.

    Money is a medium of exchange. It is a good that everyone accepts as a means to make trade much easier. Ideal money should be convenient and mobile, divisible, sound and stable, and have intrinsic value and marginal utility. History has proven gold and silver (and possibly platinum and palladium) as real money. They are convenient and mobile, divisible, virtually sound and stable, and have intrinsic value and marginal utility. Not only can they circulate as money, but they have other uses, such as aesthetic uses, industrial uses, and medical uses. What gives these metals their intrinsic value are the demand for their marginal utility relative to their supply.

    If you think that real money with real value is something that can come off a printing press and actually generate real wealth, you have bought the Keynesian lie lock, stock, and barrel.

    That's what it is today... unfortunately. That is why our economy is in such a financial mess.

    Yet another Keynesian myth. Real money has real value because it is real utility. Fiat money has no real value, and people only use it out of coercion and a false promise to keep it stable. Does a government stroke of a pen give gold and silver their value, or does the free market based upon marginal utility relative to supply?

    People in cultures throughout history have used "money" without a central government to tax it from them. People made free exchanges in gold, silver, ivory, shells, and so on without a central government to tax it from them. The market gives money its value, NOT the government. The reason that the dollar is falling is because of market forces reacting to bad government policy. The market will always be stronger than the government, but the government can sure make the market miserable.

    Government does not give money its value and certainly taxes do not give money its value. For certain purposes, government is a necessary liability. Government taxation is for certain necessary evils. However, government is not an asset, but rather a necessary liability on the free market that should be minimized as much as possible. Government does not create wealth and taxation does not create wealth. Government can only redistribute wealth because wealth (standard of living) is created by the free market.

    The shekel was a weight of silver. It had intrinsic value. What the money changers were doing was robbing the Jewish citizens by taxing their currency conversions by forcing a certain currency and being dishonest about the transactions. The Law did not create wealth, it redistributed it from the hands of the Jews coming to the Temple to perform sacrifices to the hands of the money changers.

    That is the unfortunate reality of today's fiat system of money controlled by a Federal Reserve banking system that can create new money (not wealth) and redistribute wealth undercover to themselves or their friends or special interests. The inflationary fractional reserve banking system and deposit insurance slowly and insidiously transfers wealth from citizens to banking interests and the government by allowing them to inflate and dilute the money supply by law and take away purchasing power from the people and give it freely to special interests.
     
    #12 AresMan, Nov 23, 2009
    Last edited by a moderator: Nov 23, 2009

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