View Poll Results: Who's to blame for going of the the fiscal cliff?

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    45 54.22%
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Thread: Who's going to take the blame for the fiscal clif

  1. #131
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by Somerville View Post
    Well Zyphlin supplied a rational response to your statement but I wonder how many "public employees" are actually retiring at age 45? Sure there's some corruption in the process but isn't it the reality that those few who are making out like bandits are known about because of certain media outlets who like to hype up their specific political views by providing examples to 'prove' said views?

    and what does your response have to do with my post about increasing the level of income subject to FICA?
    I didn't like your idea, so I was trying to think of something else.

  2. #132
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by DVSentinel View Post
    We don't know that "everyone else did"? Unprovable statement, You saw it the way you did, me the way I did and others made their own opinions. Since I have seen other post supporting flat even taxes, I can say, without doubt that not everyone saw it the way you described.
    What do flat taxes have to do with Tax Cuts for the Rich? Flat taxes by the way are simply schemes to reduce tax burden on the rich and dump it on the middle and lower classes instead. What else is new.

    Quote Originally Posted by DVSentinel View Post
    As to the rest, did the factors exist prior to Bush/republicans taking office? Yes. If they existed prior to Bush taking office, is Bush/republicans solely responsible for them? No. So, can Bush/republicans be held entirely responsible for current problems? No.
    Everybody is entitled to his own opinion but not his own facts. Bush and the cowboy capitalists were responsible for the greatest economic collase in 75 years. They created it. Nobody else.

  3. #133
    User Nordenkalt444's Avatar
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    Re: Who's going to take the blame for the fiscal clif

    I think that both of them are to blame, the democrats and republicans should compromise to find a solution fast.

  4. #134
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by Nordenkalt444 View Post
    I think that both of them are to blame, the democrats and republicans should compromise to find a solution fast.
    Yeah RIIIIGHT!

  5. #135
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by Nordenkalt444 View Post
    I think that both of them are to blame, the democrats and republicans should compromise to find a solution fast.
    I am looking forward to paying more taxes while entitlements and subsidies dry up. It will be worth it to watch all these drains on society have to to whatever they can find to feed themselves.

  6. #136
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by Cardinal Fang View Post
    What magic properties does the number "3" have? Why would a slow 75-year projected decline past that number suggest anything special at all? Especially when the decline is premised among other things on legal and illegal immigration being flat or falling across most of that 75 years and on life expectancy at retirement continuing to increase at rates that it did during the 20th century.

    And one would also have to consider whether workers-per-retiree is even the right number to be looking at. In fact, that ratio is a component isolated from the larger workers-per-dependent ratio. Retired people and children are the two largest categories there. What's been going on with the children component? Are the baby boomers having any more kids? How about with the prison population? Changes in one category may be freeing up funds to devote to another at no net cost, but you won't know that unless you look.

    The current employment-to-population rate is meanwhile 58.7%. As recently as December 1977, that would have been the highest level since WWII. But the best big-picture number for whether we can afford to support our dependents may simply be real per capita GDP. Here's the graph of that over the past 50 years...

    Attachment 67139945
    Its not the number 3 that has any significance, just that 2.1 represents more than a 30% reduction from 3.1-3.2.

    That's a good, and interesting point. Except for the fact that many of those child services + education have gotten significantly more expensive in the last few decades, so while numbers may not be changing, costs are still rising. Besides, I don't see anyone propose we start cutting Headstart or education in the near future to push money into SS.
    Quote Originally Posted by Cardinal Fang View Post
    For the same reason that they did? Look, considering the fact that 75% of scheduled benefits will be worth more by the time the SSTF runs out (assuming it ever does) than what 100% of benefits are worth today, those who will be retired in the second half of this century might want to roll the dice and just keep payroll taxes where they are. But if people are as concerned as they say they are about the financial future of the system, then lining up to pay more taxes to support it is the only logical choice for those who don't happen to be otherwise wealthy enough to have arranged for a secure retirement already.
    Could you provide your source on that first part? I'm thinking that you are talking about nominal dollars, in which case the scheduled benefits would not be greater.

    I'd much rather see the retirement age increased, and in the long term pegged to life expectancy.

    Plenty of people who aren't in the top 1% can manage their own retirement. And how much of the fact that people aren't saving is the fault of social security? Regardless, SS would be a far better program if it was based on individual accounts which taught people how to save and invest their own money. But it seems recessions like 2008 always scare people off from saving, despite the fact that they are usually mere blimps in the long term, bigger picture.

    Quote Originally Posted by Cardinal Fang View Post
    We have had both booms and busts. The early 70's, early 80's, and early 90's were hardly the best of times, to say nothing of the Bush-43 administration and since. Do you think it is realistic or pessimistic to project 70 consecutive years of growth at 1.7%, when between 1960 and 2010, we exceeded it 31 times and average growth was 12% higher than that?


    And at 2:00 am, it is merely wishful thinking to believe the sun will come up again until you can see the glint of some early morning rays. And we don't need 4% growth to blow the SS projections out of the water. 2% would do the job just fine. Remember: 1997 = SSTF exhausted in 2029...2007 = SSTF exhausted in 2042.
    So... 1.7% growth rates are too pessimistic, but 2.0% would do just fine?


    Quote Originally Posted by Cardinal Fang View Post
    Look up the free-rider problem then do the math. A system of near universal coverage cannot be sustained without near universal participation which is not going to happen without a mandate. Which is why Republicans first proposed it.
    It was a bad idea even when they first proposed it.

    I'm not in favor of it, because it completely eliminates the possibility of concierge medicine being available to the general public.

    Quote Originally Posted by Cardinal Fang View Post
    If that were true, you would have gone off to the library by now and read up on it. The demise of employment-based pensions is hardly some well-kept secret.
    I'd like to see some evidence that it is just a right wing conspiracy theory rather than an actual problem.


    Quote Originally Posted by Cardinal Fang View Post
    No, they didn't, and the union had made years worth of concessions on compensation across the board in order to help GM et al. through their problems, many of those the plain result of poor planning and decisionmaking on the part of management. The auto industry as a whole was put in a bind by the Great Bush Recession. That is what brought about the bailouts. Ford was able to get by without assistance only because it has serendipitously arranged lines of credit totalling more than $25 billion before the crisis hit. GM and Chrysler had no such cushion to sit on.
    Of course bad management played a role.... but Detriot's contracts with the UAW gave its workers better retirement benefits than Toyota or any other competitor. Higher cost units=more expensive cars=less units sold. GM's pension obligations are currently around $136B. Non-unionized Toyota on the other hand, pays its workers the same hourly wage, not nearly as generous health benefits, and its workers have their own retirement IRAs rather than pension plans.
    Its not the whole problem, but it does leave far less room for error and far greater consequences if it doesn't work out.




    Quote Originally Posted by Cardinal Fang View Post
    On the most elemenatry of scales, this must obviously be true. On any practical, sensible, analytical scale, it couldn't be further from the truth. The economics of a nation are a different animal entirely from the economics of a firm. This should fhave been made eminently clear in the very early days of your education.
    Actually, one of the first things I learned in economics was the Lucas critique. "The Lucas critique suggests that if we want to predict the effect of a policy experiment, we should model the "deep parameters" (relating to preferences, technology and resource constraints) that are assumed to govern individual behavior; so called "microfoundations". If these models can account for observed empirical regularities, we can then predict what individuals will do, taking into account the change in policy, and then aggregate the individual decisions to calculate the macroeconomic effects of the policy change." Lucas (1976), p. 21



    Quote Originally Posted by Cardinal Fang View Post
    You are too young to have learned better yet. You are still taken by neat and tidy and by the bright, shiny objects otherwise known as simplistic explanations. Your assumptions about the nature and value of land are chalkboard hallucinations. Things do not work that way in the real world. In the real world, two of the key determinants of land value are alternative capital gains rates and the existing level of real estate debt. I didn't see either one of those in your outline.
    I wasn't outlining how the tax should be implimented, rather the rationale behind its reasoning. Regardless, I'm not seeing how that disputes the validity of a national property tax? We already tax at local and state levels, why would this not work at a federal level?

  7. #137
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by Zyphlin View Post
    EARLY retirement (I don't believe retiring at 45, outside of in the military, is the standard for federal public employees) is being offered more regularly by the government currently because in many situations it provides for a net SAVINGS, not cost, by doing so.
    To provide a little background on the federal employee questions, about 30% of federal employees are represented by a union (the National Treasury Employees Union and the American Federation of Government Employees are the two largest ones), but those unions DO NOT bargain for wages or any benefits such as pensions. Wages and benefits for all federal employees are set by Congress through legislation.

    Congress has in fact established two federal civilian retirement systems, the older Civil Service Retirement System, and the newer Federal Employees Retirement System. Everyone hired in 1984 or later is in FERS. Those hired in 1983 or earlier would have begun their careers in CSRS. They were given the opportunity to elect FERS coverage instead when it became available, and that made sense for those with less than 5-7 years of service at the time.

    CSRS employees pay 7% of their wages into the Civil Service Retirement Fund. They may also pay up to 5% into the Thrift Savings Plan (a 401-k equivalent) but with no employer matching. CSRS employees are eligible to retire once they are both 55 years of age and have 30 years of federal service. At that point their pensions would equal 56% of the average of their three highest years of earnings. They can accrue an additional 2% per year by continuing to work, up to a maximum of 80% at 42 years of service. CSRS employees do not contribute to Social Security and hence are not eligible for a pension benefit.

    FERS employees pay 6.2% of their wages into Social Security and 0.8% into the Civil Service Retirement Fund. They may also pay up to 5% into the Thrift Savings Plan with full employer matching. FERS employees are eligible to retire once they are both 55-57 years of age (depending on year of birth) and have 30 years of federal service. At that point their pensions would equal 30% of the average of their three highest years of earnings. They can accrue an additional 1% per year by continuing to work, but if they work to at least age 62, all those 1%'s become 1.1%, so most people do that. FERS employees retire with their FERS pensions, a standard Social Security pension, plus whatever they have managed to make out of their TSP/401-k accounts.

    The median federal retiree has worked four years beyond eligibility at the time he or she actually retires. One in four has worked at least nine years past eligibiltiy. Some people do of course retire at 55/30 and return to the private sector where they can often command higher wages and earn credits toward a Social Security pension. Those who receive both a federal pension and a Social Security pension based on private sector credits face rather stiff reductions in their SS benefits on the grounds that this is some sort of double-dipping.

    In addition to the standard 55/30, retirement is possible at 60/20 and 65/5. These are uncommon and of course result in smaller pensions.

    The information above does not apply to the military, and it does not apply either to certain foreign service and intelligence service employees who have similar but somewhat more generous retirement systems owing to the risks and hardships their work typically entails.

  8. #138
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by ReformCollege View Post
    Its not the number 3 that has any significance, just that 2.1 represents more than a 30% reduction from 3.1-3.2.
    Your math is better than some here at least, but there is nothing magical about a projected 30% reduction over the next 75 years either. In 1950, the worker-retiree ratio was 16.5-to-1. That's about an 80% reduction over the past 65 years. Productivity per worker increased enough over that time for a typical worker to be able to support five retirees instead of one. The role of real per capita GDP is not to be taken lightly here. I think the earlier graph of that ended up being an invalid attachment somehow, so here it is again...

    Who's going to take the blame for the fiscal clif-per_cap_gdp_1960-2010-jpg

    And again, putting faith in the trustees' projected 2.1 number is putting faith in a projection of flat and declining immigration going forward, even though the retirement of the baby boomers will be creating increasing demand in the personal and health services industries that immigrants dominate.

    Quote Originally Posted by ReformCollege View Post
    That's a good, and interesting point. Except for the fact that many of those child services + education have gotten significantly more expensive in the last few decades, so while numbers may not be changing, costs are still rising.
    Costs have increased as we have added new layers. Pre-school, after-school care, tutoring, and test-prep are all but ubiquitous today where they were quite uncommon yesterday. This suggests an increasing ability to invest in child-dependents. It seems odd to suggest a declining ability to invest in elderly-dependents at the same time, unless we are simply throwing Granny from the train so that we may further coddle Junior.

    Quote Originally Posted by ReformCollege View Post
    Besides, I don't see anyone propose we start cutting Headstart or education in the near future to push money into SS.
    Right, they just want to cut Headstart and education, period.

    Quote Originally Posted by ReformCollege View Post
    Could you provide your source on that first part? I'm thinking that you are talking about nominal dollars, in which case the scheduled benefits would not be greater.
    No, it's a matter of purchasing power (aka "lifestyle" in some sources) which is preserved through the use of wage rates rather than inflation rates in determining initial benefit levels. The purcahsing power of 75% of scheduled benefits in 40 years will be greater than the purchasing power of 100% of scheduled benefits today.

    Quote Originally Posted by ReformCollege View Post
    I'd much rather see the retirement age increased...
    It was already increased from 65 to 67. That's one thing for a nice, cushy office worker, quite another for a telephone or electrical lineman or other worker subject to continuous physical stress and injury throughout his career. How long do you think you can force these people to keep working? Many of them have physically crashed and burned already by 60. Keep trotting them out there and you'll simply end up paying them from the disability pool instead of from the retirement pool.

    Quote Originally Posted by ReformCollege View Post
    ...and in the long term pegged to life expectancy.
    Really? Life expectancy for whom? As calculated by whom?

  9. #139
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    Re: Who's going to take the blame for the fiscal clif

    Quote Originally Posted by Cardinal Fang View Post
    There is exactly nothing wrong with any such lending. Each is an appropriate choice under the circumstances it was designed for. Responsible lenders engaged in all of these. The problems arose when IRRESPONSIBLE lenders -- taking advantage of conditions and demands that Bush and his pals created -- used such loans to abuse credit markets and the borrowers in them, creating large profits and much larger volumes of mortgage paper that they themselves knew full well was destined for short-term failure at the moment the loan was signed. Those people and those who enabled them are the ones to blame for all this. That comes down to a bunch of cowboy capitalists on Wall Street and the completely dismal fiscal, monetary, and regulatory policies of the Bush administration.


    Fannie and Freddie's line of business was the purchase of conforming loans, that is loans that met established minimum underwriting standards. Ultimately, the junk that couldn't get through that filter went off to Wall Street where it was securitized and sold off into the secondary markets anyway. The private-label shops had no such standards or filters and would buy almost anything at all. As noted earlier, the profit potential in Alt-A and subprime markets had come to the attention of traditional lenders in the mid to late 1990's. Between 1993 and 2001, subprime originations had gone from $25 billion to $175 billion. Subprime was the market at the turn of the century, and the GSE's were preparing to work with lenders as they moved into this new area. After being on the subprime sidelines for virtually all of the 1990's, the GSE's purchased 11% of subprime originations in 2001 (again skimming off the cream of the crop) and were hoping to reach 50% within a few years. That of course didn't happen.


    Not all dominos are the first domino. The Great Bush Recession was a product of the credit crisis. The credit crisis was a product of defaults on mortgages written by predatory lenders into vulnerable markets. Those loans could be securitized and sold at all only because of unscrupulous underwriters and securitizers sucking profits out of elevated demand for mortgage-backed securities. That elevated demand existed because the Fed had frozen its long-term interest rates at an unattractive 1%. That happened because Bush's Tax Cuts for the Rich failed to produce any meaningful new economic activity. The Tax Cuts for the Rich came about because Bush and his people were economic incompetents. That incompetency extended to moronic laissez-faire notions that markets were wise enough to regulate themselves. Thus even when warnings were sounded concerning the potential calamity inherent in so many recently written predatory loans running into triggers when interest rates once again began to rise were completely ignored. That was the extent of it. All Bush and the cowboy capitalists all the time. The rest was inert windowdressing that contributed nothing. There would not have been a Great Bush Recession without the craven and bungled behaviors summarized above.


    Outsourcing had nothing to do with the Great Bush Recession, and there is actually quite a difference between outsourcing and foreign investment. GM built cars in Brazil because it sold cars in Brazil.


    Big deal. It's all irrelevant. There are no dots to connect here.


    Of course it did, as anyone who understood that the Social Security budget surplus caused an increase in public debt as it was invested would have been expecting. The debt did of course decline every time Clinton bought some of it down, but that $363 billion was not enough to show up in the overall numbers when measured across an entire fiscal year.
    Thank you. Your demonstration in this one post of the depth of your ignorance/comprehension has probably done more to undermine you arguments than anything I could of written myself. I say ignorance/comprehension because you clearly demonstrate a singular bias that blinds you to other facts, as your insistence that there was only a single contributing factor clearly demonstrates.

    You have now saved me an unknown amount of time in writing counters, since you have so thoroughly shot your own stance in the foot. No further need for me to argue anything.

    Good day.
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  10. #140
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    Re: Who's going to take the blame for the fiscal clif

    I guess you really can learn from your mistakes. Obama got his clock cleaned and had to back down in the last two budgets over extending the debt ceiling. Now he is not playing that same weak role any longer apparently empowered by he election results.

    The GOP will take the hit.
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