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Thread: Debt Crisis is Worse than we Think

  1. #31
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by Mr. Invisible View Post
    IMO, the US is going to default on its debt sooner or later
    It seems like the downgrade is going to happy even if we don't default.

  2. #32
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by cpwill View Post
    that is incorrect. both times in the last century that the government slashed spending as a response to economic turmoil it was rewarded with booms. in contrast, over the last 40 years, in every single OECD nation, the "stimulus" packages that have been dependent on increasing transfer payments have been the ones that have failed (the success stories generally included cutting business taxes).
    Umm, the govt hasn't slashed spending at any time in the last 100 years.



    demand is a function of supply. you won't fix the one till you've worked on t'other.
    Nonsense, you can increase the supply of transistor radios all you want and demand will remain at near zero
    Last edited by sangha; 07-30-11 at 11:29 AM.
    Quote Originally Posted by matchlight View Post
    Justice Thomas' opinions consistently contain precise, detailed constitutional analyses.
    Quote Originally Posted by jaeger19 View Post
    the vast majority of folks that need healthcare are on Medicare.. both rich and poor..

  3. #33
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by cpwill View Post
    this is incorrect. SS Started running a deficit in 2010, and the CBO says it will continue to do so every year from here on out.



    you'll get no arguments from me that Republicans screwed the pooch. but that doesn't excuse Democrats cutting said pooch's head off.
    Actually SS is solvent until 2037 (Trustees Report Summary) (NCPSSM: Analysis of 2010 Annual Report of the Social Security Trustees)
    "And in the end, we were all just humans, drunk on the idea that love, only love, could heal our brokenness."

  4. #34
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by Guy Incognito View Post
    Nonsensical conspiracy theories belong in the conspiracy theory subforum. It's absurd to think that all the crises of the last three decades have been manufactured to lead us to precisely the point we are at now. One should always assume cock-up before conspiracy.
    Straw man. No one has claimed it explains all the crises of the last three decades
    Quote Originally Posted by matchlight View Post
    Justice Thomas' opinions consistently contain precise, detailed constitutional analyses.
    Quote Originally Posted by jaeger19 View Post
    the vast majority of folks that need healthcare are on Medicare.. both rich and poor..

  5. #35
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by Mr. Invisible View Post
    From your own link

    Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years. This deficit is expected to shrink to about $20 billion for years 2012-2014 as the economy strengthens. After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Through 2022, the annual cash deficits will be made up by redeeming trust fund assets from the General Fund of the Treasury. Because these redemptions will be less than interest earnings, trust fund balances will continue to grow.
    It doesn't say that SS will be running a deficit. It says they will be running a "cash deficit"

    Social Security's Long-Range Outlook Remains Strong

    The Trustees project that the combined Old-Age, Survivors and Disability (OASDI) Trust Funds will be able to pay benefits until the year 2037. Thereafter, Social Security will have sufficient annual revenue to pay about 78 percent of benefits. Last year's Trustees' Report also predicted that Social would be able to pay full benefits until 2037, but pay only 75 percent of benefits thereafter.

    The projected actuarial deficit of the Social Security program, measured as a percent of taxable payroll over the 75-year projection period is 1.92 percent of taxable payroll, 0.08 percentage point smaller than last year's estimate.

    At the same time, Social Security's accumulated assets continue to grow. For 2010, Social Security's reserves are projected to rise to $2.6 trillion by the end of the year and reach $3.8 trillion by 2019.

    Social Security Relative to Gross Domestic Product

    Another important way to look at Social Security's future is to view its annual cost and tax income as a share of U.S. economic output, or Gross Domestic Product (GDP). Social Security's cost as a percentage of GDP is projected by the Trustees to rise from the current level of 4.8 percent to about 6.1 percent in 2035, and then decline to 5.9 percent of GDP for the period 2050 through 2084.

    Seen from this perspective the projected growth of the program is modest and can be managed through relatively modest changes to the program.
    Last edited by sangha; 07-30-11 at 11:35 AM.
    Quote Originally Posted by matchlight View Post
    Justice Thomas' opinions consistently contain precise, detailed constitutional analyses.
    Quote Originally Posted by jaeger19 View Post
    the vast majority of folks that need healthcare are on Medicare.. both rich and poor..

  6. #36
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by Guy Incognito View Post
    It seems like the downgrade is going to happy even if we don't default.
    Definitely. Still, the difference between AAA and AA isn't that much (Bankersalmanac.com - Standard & Poor's Definitions)

    AAA - An obligor rated 'AAA' has EXTREMELY STRONG capacity to meet its financial commitments. 'AAA' is the highest Issuer Credit Rating assigned by Standard & Poor's.




    AA - An obligor rated 'AA' has VERY STRONG capacity to meet its financial commitments. It differs from the highest rated obligors only in small degree.
    "And in the end, we were all just humans, drunk on the idea that love, only love, could heal our brokenness."

  7. #37
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by sangha View Post
    From your own link



    It doesn't say that SS will be running a deficit. It says they will be running a "cash deficit"
    And from my own links it shows how the cash deficits will be made up.

    "Through 2022, the annual cash deficits will be made up by redeeming trust fund assets from the General Fund of the Treasury. Because these redemptions will be less than interest earnings, trust fund balances will continue to grow."

    Like I said, SS is solvent until 2037
    "And in the end, we were all just humans, drunk on the idea that love, only love, could heal our brokenness."

  8. #38
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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by Mr. Invisible View Post
    And from my own links it shows how the cash deficits will be made up.

    "Through 2022, the annual cash deficits will be made up by redeeming trust fund assets from the General Fund of the Treasury. Because these redemptions will be less than interest earnings, trust fund balances will continue to grow."

    Like I said, SS is solvent until 2037
    Exactly!! SS will be able to pay with the income from its assets.

    Social Security’s surplus is not disappearing. While it is true that revenue income received by the Trust Funds has declined during the recession, the program’s financial health is still sound. In fact, as we stated earlier, the surplus held by the Trust Funds is still growing, and is projected by the Social Security actuaries to reach a peak in 2020 of $3.1 trillion.

    These surpluses and the interest income they yield, along with continuing payroll taxes and other receipts to the Trust Funds, are sufficient to assure payment of all benefits through 2037. However, it is also true that, at least for the time being, Social Security’s Trust Funds are not able to loan money to the general government and will loan less in future years than was previously projected.

    Don't confuse one kind of surplus with another. Whether intentionally or unintentionally, those who assert that the "surplus in Social Security is disappearing" are misleading the American public. In fact, Social Security has two types of surpluses: the "annual surplus" and the "total assets" (sometimes also known as the "surplus"). An "annual surplus" occurs in any year in which the revenue to Social Security that year exceeds the outgo for the year. As those annual surpluses accumulate over time, they become the "total assets" of the Social Security Trust Fund. Because many people refer to those accumulated assets as Social Security's surplus, they may incorrectly conclude that the reduction in projected annual surpluses over the next few years means that all of the assets in the Trust Fund, which equal over $2.5 trillion, will disappear in the short term and that Social Security will soon be unable to pay benefits. The truth is that, even after taking into account the impact of the recession, the assets held by the Trust Fund will continue to permit payment of full benefits until 2037.
    Maybe they should pay attention to what their source is saying instead of picking one sentence out and running with it.
    Last edited by sangha; 07-30-11 at 11:39 AM.
    Quote Originally Posted by matchlight View Post
    Justice Thomas' opinions consistently contain precise, detailed constitutional analyses.
    Quote Originally Posted by jaeger19 View Post
    the vast majority of folks that need healthcare are on Medicare.. both rich and poor..

  9. #39
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    Re: Debt Crisis is Worse than we Think

    Ya know... I sit here and I watch Republicans blaming Democrats, Democrats blaming Republicans, the poor blaming the rich, the rich blaming the poor.... "we need to spend more" vs "we need to spend less"... "more taxes" vs "less taxes"... "more gov't vs less gov't".... arguing about where to cut a few tens of billions this year while we rack up another trillion-plus in gov't debt every year and the collapse looms ever closer while the economy still stagnates.

    We are royally ****ed, because there is no consensus on what to do and politicians are largely incapable of thinking beyond the next election cycle. A plague on both their houses.

    What does Joe Average do when he can't pay his bills, when he's going ass-deep further in debt every year? If he's smart, he cuts his expenditures as much as possible, then tries to raise his income by working more hours/taking a second job/wife goes back to work/etc. Clearly, the addition of a trillion-plus to our already ass-deep debt is unsustainable. Cuts must be made accross the board... but we're probably going to have to raise taxes on the wealthy as well, since they're the ones who can afford a tax increase. Reducing the annual deficit to less than 200 billion a year is essential.

    Next, address the economy. Most businesses are holding on to their capital instead of expanding... why? Because they're scared. The economy is very uncertain and every possible investment is risky right now. Cutting the deficit will probably help, but what will induce businesses to put that money back into the economy? Rational and stable and predictable pro-business policy on the part of government. What does the economic "recovery" need most? More new jobs. Who primarily creates jobs? New businesses and expanding businesses. Make policy that encourages and incentivizes the opening of new businesses, expanding existing ones, and particularly the creation of new jobs. Most of the time this means easing regulatory costs and offering tax incentives.

    No one is going to do these things because we're too damn busy playing partisan politics with it. We're going to experience an economic collapse on the scale of Argentina soon, and we're going to fracking deserve it because, collectively, we're a pack of fracking idiots!
    Last edited by Goshin; 07-30-11 at 11:42 AM.

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    Re: Debt Crisis is Worse than we Think

    Quote Originally Posted by sangha View Post
    Exactly!! SS will be able to pay with the income from its assets.



    Maybe they should pay attention to what their source is saying instead of picking one sentence out and running with it.
    EDIT: My bad, I thought you said that I should pay attention to my source instead of running with it
    Last edited by Mr. Invisible; 07-30-11 at 11:42 AM.
    "And in the end, we were all just humans, drunk on the idea that love, only love, could heal our brokenness."

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