Are you SURE that is what you want? Not a very pretty picture, but I suppose it would take care of the sticky issue of the elderly living too long.Quote:
Originally Posted by ApatheticNoMore
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Are you SURE that is what you want? Not a very pretty picture, but I suppose it would take care of the sticky issue of the elderly living too long.Quote:
Originally Posted by ApatheticNoMore
I've been watching a few episodes Doomsday Preppers so I'm ready.:moon:
While it is certainly possible that a collapse could result in something better rising from the ashes it's equally likely that something worse, possibly much worse, could fill the void after an uncontrolled collapse. One only has to look to German history not quite 100 years ago to see just how bad things could turn out after the collapse. Hopefully we'll never have to find out what would happen in the US after a collapse.
I think that the odds of a positive eventual outcome after a collapse are pretty darned low, if you look at history. Best to avoid.Quote:
Originally Posted by jp1
A fellow once said, in a really decent speech:
http://www.youtube.com/watch?v=qXBswFfh6AYQuote:
You and I have a rendezvous with destiny.
We'll preserve for our children this, the last best hope of man on earth, or we'll sentence them to take the last step into a thousand years of darkness.
I have to agree that fastidious, self-imposed austerity measures now are far preferable to attempting a phoenix impersonation later.
That is assuming that self-imposed austerity measures aren't just a more controlled form of collapse - in an economic model dependent on growth, aren't austerity measures a move in the wrong direction?Quote:
Originally Posted by Gregg
For starters we should probably consider broadening our economic base as opposed to a pure reduction. Some aspects of our economy (and our society) may benefit from lateral moves. Agriculture is king in my area and a prime example. We could begin a shift from global industrial ag to more localized producers and suppliers. Not a complete shift, but enough to make the base more stable. Subsidies that currently offer the most benefit to multi-national corporations could be shifted to some form of stimulus that would benefit smaller producers and companies and thus encourage a shift to a more local or regional model. Leaving environmental and health benefits out of it for now, the economic benefits would include more dollars remaining in local economies which should reduce the need for some federal programs allowing the budget to shrink. It would also support a wider job base which should remain more stable over time thereby reducing the need for federal unemployment assistance. In a way it would be a partial controlled collapse in one sector offset by growth in another.Quote:
Originally Posted by creaker
No. You seem to think government spending creates growth. Every dollar the govt spends is taken from somewhere else where it is likely doing more good. You can make a colorable claim that during certain short periods govt spending may provide a buffer of some kind, but only at the cost of reduced future growth.Quote:
Originally Posted by creaker
I thought it was well known that it is more efficient to take a dollar from a citizen, run that dollar through half a dozen layers of administrative overhead, then spend it on Something Important, an to simply allow the citizen to spend the dollar directly.Quote:
Originally Posted by East River Guide
I got dinged on an audit for an energy-assistance program one of my non-profits was administering for the State a few years ago. The average grant per client was about $200. I was allocating $7.00 per grant for our overhead, which is what it cost us according to my data. The State auditor told me that wasn't sustainable, and I'd have to start charging ~40% of the grant amount for overhead, or they'd have to take the program away and give it to someone else who could do a better job wasting money on handling fees...
Our economy isn't dependent on growth because of gov't spending. Our economy is dependent on growth for survival because of the way the money is created. Every dollar in existence was loaned into being by the federal reserve and has to be paid back with interest. Obviously that's not possible unless there's an ever increasing amount of dollars. If those dollars, along with hard work or natural resource utilization, are used to create something of value the system will continue to work, and grow. The alternative is bad debts getting written off and that money destroyed. Since the powers that be don't seem to want that to happen, because they and their bankster buddies are the ones holding the debt, we will continue to have the federal reserve creating more and more debt in the form of dollars so that the bad debt can be refinanced over and over until growth makes the debts payable. It's questionable whether that will work out given the vast vast amount of questionable debt that's already out there.
Most entitlements get spent as consumer dollars - consumer spending is like 70% of the economy. I think this creates more jobs than some corporation buying a synthetic CDO betting on how someone else's portfolio is going to move. Almost all entitlement dollars handed out this month are sitting on business's balance sheets next month.Quote:
Originally Posted by East River Guide
The problem is everyone got greedy and worked to pump a lot of borrowed money into the system and we now have an economy dependent on those borrowed dollars and where a huge amount of government revenue is used to pay interest on that debt. The only way to correct this is to shrink the economy which will break a system which requires ever increasing growth. Capitalism functions on boom and bust, I don't think we're going to be able to play the numbers to avoid the bust, although austerity is more of a controlled crash.
Not me. I will take a system of market based investment decisions over a government distribution system any day. Are there bumps in the road? Sure. But in the long run I think more jobs will come from individual liberty than centralized social entitlemnents. By your logic the USSR should have in fact buried us by now.Quote:
Originally Posted by creaker
That's not what I'm saying at all - I'm saying we've dug ourselves into a hole and we can't just dig ourselves out of it.Quote:
Originally Posted by East River Guide
So when would you end SS, Medicare, etc?
USSR was an oligarchy where a few were profiting from everyone else, that part of it is still there although there was some turnover in the players. And it's where we are now.
Economies cycle, plain and simple. Government intervention has the potential to moderate the highs and lows, but as often as not either amplifies or extends them. Part of the beauty of capitalism is that the most opportunity exists when we're at the bottom. The same can not be said for government entitlements.Quote:
Originally Posted by creaker
Maybe I don't follow you. You said "in an economic model dependent on growth, aren't austerity measures a move in the wrong direction?" I said no, government spending doesn't produce long term growth, it crowds it out. There may be cases where that is an acceptable cost, but in the long term I don't think you get more growth by giving the government control over more of the economy. In what hole does that change?Quote:
Originally Posted by creaker
We got growth because the government injected huge amounts of debt into the economy. How do you correct that without seriously impacting the economy?Quote:
Originally Posted by East River Guide
I'm saying at least in the short term, austerity would choke the amount of consumer dollars out there and affect not only those consumers but those further up the chain as well. Long term, I don't know - are there any examples out there?
So you think collapse is the way to go?Quote:
Originally Posted by Gregg
If you mean a controlled collapse (aka a contraction) of a relatively significant percentage of the federal government, then yes I do. It's likely to happen on its own if we don't take action. I would much prefer that we retain some control and execute a "soft landing".Quote:
Originally Posted by creaker
Part of the confusion may be the term austerity itself. In the classic sense it involves a reduction in spending and so also the programs/benefits that the spending provided in addition to debt reduction. I agree that deficit reduction is probably not a good idea right now. We need a productive economy that generates revenue to do that and we don't have one. The one advantage to our debt right now is that the interest is at historically low rates so reducing it doesn't have to be the top priority in the short term. After that even cutting spending can be confusing. It might make sense to keep the same budget we have right now, even with some deficit spending included, but reorganize what we spend money on. Infrastructure development spending is an investment. It will help this country get more done and do it better and so will generate revenue in the future. That is a reasonable kind of spending. There are examples of government spending that do not shine so brightly. Those are what needs to be cut, or collapsed, as the case may be.
We don't need short term thinking, we need to get things fixed now while we can still make choices. If you wait until rates are a problem it's probably too late. From Ben:Quote:
Originally Posted by Gregg
By definition, the unsustainable trajectories of deficits and debt that the CBO outlines cannot actually happen, because creditors would never be willing to lend to a government with debt, relative to national income, that is rising without limit. One way or the other, fiscal adjustments sufficient to stabilize the federal budget must occur at some point. The question is whether these adjustments will take place through a careful and deliberative process that weighs priorities and gives people adequate time to adjust to changes in government programs or tax policies, or whether the needed fiscal adjustments will come as a rapid and painful response to a looming or actual fiscal crisis
...
Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living. Moreover, diminishing investor confidence that deficits will be brought under control would ultimately lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil. In a vicious circle, high and rising interest rates would cause debt-service payments on the federal debt to grow even faster, resulting in further increases in the debt-to-GDP ratio and making fiscal adjustment all the more difficult.
http://www.cnbc.com/id/41491193
Exactly.Quote:
Originally Posted by East River Guide
It is sometimes hard for people to grasp the budget issues with all the zeros attached. We focus a lot on family budget issues here, so maybe it helps to convert it to scale:
UNITED STATES OF AMERICA
U.S. Tax revenue: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $1,650,000,000,000
National debt: $14,271,000,000,000
Recent / April 2011 budget cut: $ 38,500,000,000
Now, let’s remove 8 zeros and pretend it’s a household budget:
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Amount of April 2011 belt tightening $ 385
But the way I understand it the current part of the $385 is only about 1/10, so call it $4.
Would that make our frugalistas happy?
And the effect of the Buffett Rule on your annual family income? $47Quote:
Originally Posted by East River Guide
It does nothing to correct the problem, but does make for good political theater.
Letting the Bush tax cuts expire would have done a lot more than the Buffet rule yes. But it still doesn't solve the problem? Well of course not. But hey hard to propose an alternative solution that even does at much as that would to bring revenues in line with spending. I mean really propose any alternative solution that even does as much to balance the budget as that does (and then you get into political feasibility. Is anything political feasible anymore but catastrophe? seriously? ending all the wars isn't generally considered politically feasible for instance).
Really basically my thinking on EVERYTHING - insulate every house in America while natural resources are still relatively plentiful and the economy not in total collapse yet etc.. Just do it. But mine is doomer thinking for sure :). But yes I wonder how long the window of choice on many things will persist.Quote:
We don't need short term thinking, we need to get things fixed now while we can still make choices.
2012 Dept. of Defense Projected Spending - $707.5 BillionQuote:
Originally Posted by ApatheticNoMore
2013 Dept. of Defense PROPOSED Budget - $200 Billion
A nice simple 1/2 trillion dollar savings. We tell the Joint Chiefs that they have to make sure our shores are defended. They're sharp guys, they will get it done for $200B. Would be quite the wake up call for Saudi Arabia, Tajikistan, Israel, Denmark, etc!
You're right about the political feasibility of ending wars. What say not one voter in this country votes for the guys who perpetuate that attitude. That would be as quick a turn around as the budget.