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Thread: Obama says he cannot guarantee Social Security checks will go out on August 3

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Polotick View Post
    Your reading comprehension in this thread is fail. Try to go back and read the thread so you can keep up.
    My reading comprehension (and your "what if the 43% advocates get their way" stories) have nothing to do with what's going on in Washington. I have no problem with you wanting to explore that territory -- I was just making the point that it has no real bearing on reality.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by PzKfW IVe View Post
    We define these obligations as we choose. Change the definition to one that's 43% less, and the obligations are met.
    Deciding to lower you kids' allowance wont do anyting to the interes rate on your credit card; your argument here is unsound.
    Our government defines ALL its obligations as it chooses, as no one is capable of forcing it to do otherwise. If the government felt like it, it could change the definition of its debt to one that's 43% less (call it the Venezuela Solution). But surely everyone would view that as a default, and rightly so.

    Whcih is... we're paying our current debt service and cutting spending so we do not take on more debt.
    Seems pretty darned responsible to me - how, exactly, would this cause interest rates to rise?
    Because for one thing, Social Security and Medicare ARE debt (in a certain sense). Not in the legal sense, but in the fiscal sense. People paid into those programs with the expectation of getting paid back, just as bondholders did. For another thing, bondholders would recognize that such an arrangement (where they got paid ahead of everyone else) would not be politically sustainable for any long period of time, and they would adjust their risk factor accordingly.

    Well, we -do- get the government we deserve... Yf the people decide they'd rather have out-of-control debt that will eventually lead to a fiscal, then economic, and then societal collapse, as opposed to the perceived 'pain' caused by forcing the government to spend $1500B less, there's no much anyone can do about it.
    Enjoy your future. Hope you have plenty of ammunition.
    Or rather than either THAT ridiculous extreme, or the ridiculous extreme that you're actually proposing, we could have a government that gets rid of the debt ceiling to eliminate a ticking time bomb, and reforms our programs so that we are on a stable long-term trajectory even if it takes a while to get there.
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Kandahar View Post
    Our government defines ALL its obligations as it chooses, as no one is capable of forcing it to do otherwise. If the government felt like it, it could change the definition of its debt to one that's 43% less (call it the Venezuela Solution). But surely everyone would view that as a default, and rightly so.
    Point is that you;re trying to apply the term "defaut" across dissimilar situations. It doesn't work.
    Defaulting on the debt is not the same as lowering the benefits paid from SS, in any way shape of form.
    Your continued use of the term as applied to entitlements is dishonest, and, really, I've come to expect better of you.

    Because for one thing, Social Security and Medicare ARE debt (in a certain sense). Not in the legal sense, but in the fiscal sense.
    Not hardly. The money paid from SS is not debt in any sense. It's a self-assumed payout of benefits created by law, and nothing more.
    Nothing about changing the specifics of that obligation equates to a "default" in any sense.

    People paid into those programs with the expectation of getting paid back...
    They paid into those programs because the law forced them to do so. There was never any guarantee, expressed or implied, that they'd receive any specific benefit from it.

    just as bondholders did.
    The SS bonds are not held by anyone outside the structure of the US government.

    For another thing, bondholders would recognize that such an arrangement (wheret hey got paid ahead of everyone else) would not be politically sustainable for any long period of time, and they would adjust their risk factor accordingly.
    This is a baseless assumption; your presumption of what is and is not 'politically sustainable' does not a solid foundation make.
    Aside from that - the bondholders ALWAYS get paid at the same time, if not before, anyone else.

    Or rather than either THAT ridiculous extreme, or the ridiculous extreme that you're actually proposing, we could have a government that gets rid of the debt ceiling to eliminate a ticking time bomb, and reforms our programs so that we are on a stable long-term trajectory even if it takes a while to get there.
    Tell me:
    What evidence is there that this will -ever- happen?
    Last edited by PzKfW IVe; 07-13-11 at 03:34 PM.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by PzKfW IVe View Post
    Point is that you;re trying to apply the term "defaut" across dissimilar situations. It doesn't work.
    Defaulting on the debt is not the same as lowering the benefits paid from SS, in any way shape of form.
    It might not seem the same to you, but the question is if it will seem the same to bondholders. Imagine that you're a corporate bondholder, and the corporation to which you've loaned money starts hemmorhaging cash. They start closing various departments, but they assure you that YOU will be paid before anyone else. Wouldn't that make you a bit suspicious?

    Your continued use of the term as applied to entitlements is dishonest, and, really, I've come to expect better of you.

    Not hardly. The money paid from SS is not debt in any sense. It's a self-assumed payout of benefits created by law, and nothing more.
    ALL government debt is a self-assumed payout of benefits created by law, and nothing more. If the government wanted to walk away from the entire national debt tomorrow, there is no one that could stop them.

    Nothing about changing the specifics of that obligation equates to a "default" in any sense.
    They paid into those programs because the law forced them to do so. There was never any guarantee, expressed or implied, that they'd receive any specific benefit from it.
    I agree, in a political/legal sense, social security is not debt. But from a fiscal perspective, that is certainly how it is viewed. The markets are going to view any payment stoppage on any of our obligations (regardless of whether they are self-imposed obligations, as if there was another kind) in pretty much the same way: as the inability to pay the bills we are legally required to pay.

    This is a baseless assumption; your presumption of what is and is not 'politically sustainable' does not a solid foundation make.
    Well...let's look at the words and actions of the people in power then. This idea is pretty much a non-starter with Democrats, so that's more than half the power base right there. And it's not much more popular among Repulicans; Boehner and McConnell have both repeatedly said that no one is even considering a default on the debt (although whether they'll be able to pull back in time to make a deal before August 2 remains to be seen). If they actually supported a plan to cut spending by 43%, immediately and permanently, then they would likely be talking it up...in fact, they'd likely be asking for MORE. But they aren't doing anything even close to that.

    Aside from that - the bondholders ALWAYS get paid at the same time, if not before, anyone else.
    Yes, but how long would that arrangement hold up if the debt ceiling isn't raised?

    Tell me:
    What evidence is there that this will -ever- happen?
    We have several promising ideas. There's the Wyden-Gregg tax reform proposal which could bring in some much needed revenue. Republicans have signaled an openness to cutting defense spending. Social security requires only some minor adjustments to eliminate the long-term deficit it would create. There's the deficit commission from last year that had many good ideas (and a few bad ones) for cutting spending. The only really tough one to tackle is Medicare/Medicaid, and I suspect that there won't be any further action on that front until after the Affordable Care Act plays out in the courts and becomes fully effective in 2014.
    Last edited by Kandahar; 07-13-11 at 03:58 PM.
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Kandahar View Post
    We have several promising ideas. There's the Wyden-Gregg tax reform proposal which could bring in some much needed revenue.
    Democrats (or at least Obama) seem not so much interested in added revenue as they are in raising taxes (on the rich). Boehner offered as one solution to add revenue the plan suggested by Obama's own bipartisan debt commission, but Obama would not agree unless it were modified to raise taxes on the rich.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Kandahar View Post
    It might not seem the same to you, but the question is if it will seem the same to bondholders.
    It's not the same, period.
    A default is when you fail to pay your creditors the money you agreed to pay them when they loaned you the money.
    Reducing SS benefits is not a default as there is no creditor, no loan of money, and no agreement made at the time of the loan as to the terms of repayment.

    Your continued use of the term as applied to entitlements is dishonest; your contined use of it is nothing but a deliberate misrepresntation of the situation designed to create fear among those who cannot think for themselves.

    I agree, in a political/legal sense, social security is not debt. But from a fiscal perspective, that is certainly how it is viewed. The markets are going to view any payment stoppage...
    There's no stoppage of payment; anything beyond this point proceeds from a false premise.

    Well...let's look at the words and actions of the people in power then...
    None of this supports your assertion that paying the creditors first is politically unsustainable.

    Yes, but how long would that arrangement hold up if the debt ceiling isn't raised?
    For however long as it needs to - not raising the debt ceiling means no more spending beyond what you have in revenue; this means no more deficits; no more deficits means no more debt accumulation. So long as some other event does not reduce revenue to the point we cannot cover the debt service, there's no reason paying our creditrs first cannot be maintained indefinitely.

    We have several promising ideas.
    We ALWAYS have "promising ideas."
    I asked for evidence of a government willing to -actually do- what you say is needed.
    When has government spending -actually- decreased?
    When have Democtrats -actually- enacted a reduction in entitlement spending?
    Recall you, yourself -just- argued that "the voters will not tolerate it".

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Taylor View Post
    Democrats (or at least Obama) seem not so much interested in added revenue as they are in raising taxes (on the rich).
    Yes... to raise less-than-inconsequential amounts of revenue.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by ReverendHellh0und View Post
    So August third, there is no money? o.O
    It's July 13th, and there is no money.

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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by ReverendHellh0und View Post
    Did you factor in those who stopped looking? 17% Sorry man, Obama has failed and I hope he really does run on his "Facts" and "stats"......


    Oh yeah, and what did Obama do that 1st year that slowed it down? Specifically.
    Direct your questions on the details to the Department of Labor c/o Washington DC.

    I gave you the official stats kept regardless who was president. First year - Obama - stimulus package. Look it up.

    So as you can see, I did NOT make it up. I gave you official stats.
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    Re: Obama says he cannot guarantee Social Security checks will go out on August 3

    Quote Originally Posted by Taylor View Post
    If you truly believe that, I'm curious why you're not castigating Obama for his "championing a failure in negotiations."
    I have been critical of the way things have been handled. However, there is a defining difference. Mr. Levin is describing the all but certain outcome of his posture as a "day of liberation." None of the sides in the negotiations--Congressional Republicans, Congressional Democrats, and President Obama--have expressed the reckless view that a failed outcome would somehow be an occasion for celebration. All of the participants, even as they have remained close to their maximum positions, have shown some flexibility.

    Ultimately, more than likely, one will see a smaller deal, no tax hikes (to accommodate the Republicans' needs), and little or perhaps no entitlement reform (to accommodate the Democrats' needs) tied to a smaller increase in the debt ceiling. The more contentious issues that will have to be resolved for credible fiscal consolidation will be postponed. A self-inflicted crisis will be averted and a modest but not adequate downpayment on fiscal consolidation will be made. In effect, each side will yield some ground. Under such circumstances, it would not be too surprising if Mr. Levin, among some others, turned on the Congressional Republicans and accused them of capitulation.

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