BobbyDigital posted this link in another thread and I felt it didn't get the attention it deserved.

The current fiscal state of our budget has been called into question by everyone from Ben Stein to the Concord Coalition, including the testimony of Comptroller general of the United States, David Walker. Make no mistake, this will be the single biggest issue facing our generation.


From the article:

Quote :

"Where the official federal deficit in 2004 was reported at about $412 billion, and the GAAP-based deficit was around $616 billion, they said that if you added in the net present value of the underfunding of Social Security and Medicare, the one-year deficit in 2004 was $11.1 trillion. That’s trillion, not billion. That amounted to almost 100% of GDP at the time. Now, that $11 trillion included a one-time spike of about $8 trillion, to account for what Congress and the President did in setting up the Medicare drug benefit without funding it going forward. But you can see that if you back out that one-time charge, that on a GAAP basis, accounting for Social Security and Medicare, in 2003 the deficit was around $3.7 trillion"

Quote :

"In fact, the fiscal 2005 statement shows that total federal obligations at the end September were $51 trillion; over four times the level of GDP. It is unprecedented for a major country to have its actual obligations so far out of whack."

Quote :

"Keep in mind that 2005’s $3.5 trillion GAAP deficit is roughly 10 times bigger than the “official” deficit. But that is the size of the shortfall. Even if you were to raise personal income taxes to 100%, take all of everyone’s salaries, and put all those funds into a pot against this deficit, you’d still have a deficit. (If you also threw in corporate taxes, you actually might get it a little bit to the plus side.) But we are at a point where we cannot cover the deficit by raising taxes. So what are we doing? We are lowering taxes to try to stimulate the economy. People are talking about new big spending programs going forward. Yet you’d have to cut back Social Security and Medicare drastically here, beyond anything that I can imagine is politically feasible, to bring things into balance."

I could go on, but I won't. Anyway, here is the link to the article:
http://www.shadowstats.com/pdf/779-626538446.pdf

3/12/2008 7:51:54 PM

The Federal Government is out of control. period.

3/12/2008 8:22:57 PM

yes and Bush did nothing to stop it, but the liberals will only make it worse

3/12/2008 8:36:24 PM

dont let the republicans hypnotize you....the world will be better under liberals than john mccain

3/12/2008 8:38:48 PM

well, we will most likely get to find out in a few more months wont we. But i know one thing, either Dem is gonna up taxes, spending and the size of government

3/12/2008 8:40:09 PM

Quote :

"the world will be better under liberals than john mccain"

and therein lies the fallacy in our approach to this issue. It is easy to stand up and blame G.W. Bush for the spending issues over the last four years (and to be fair, he deserves his share of the blame) but he couldn't do it without the consent of congress.

How many people who blame Bush can name their congressman or woman; a person with whom they would have much greater influence? It doesn't take nearly as many people to get the attention of a House Representative as it would a President.

3/12/2008 8:50:08 PM

i'm still happy i'm getting 600 bucks this spring.



seriously though, this is the problem I have with the current president, and most of the rest of the republican party. Although I know the economics of the times were different under clinton, at least that mofo could balance the budget.
We need a hardcore fiscal conservative in office that stays away from the religious right and is for personal freedoms, and we will be golden.

3/12/2008 8:55:09 PM

Eh, doom and gloom grabs headlines. I don't think that medicare and social security obligations should be added to the bottom line, since they are not like other liabilities. Unlike treasury bonds which we have a legal obligation to pay, medicare and social security benefits can be reduced at any time by congress.

We already knew that social security wasn't solvent, putting it's net value on the budget just makes it more glaringly obvious. Nevertheless, it is a pay-as-you-go program which was never meant to be on the budget. If this "Shadowstats" character wants to re-classify all federal programs as part of one budget, I guess we could do that. While we're at it, lets add some liabilities every time a child is born because we have to pay for his education.

It's disingenuous to group future SS benefits in the same category as set-in-stone obligations. Once outlays significantly exceed revenues (maybe 2015 or so), SS benefits will start to get scaled back.


[Edited on March 12, 2008 at 9:16 PM. Reason : 2]

3/12/2008 8:59:27 PM

Quote :

"Unlike securities and treasury bonds which we have a legal obligation to pay, medicare and social security benefits can be reduced at any time by congress."

A few points. First off, SS revenue is counted against the deficit, so eliminating the problem would not eliminate the larger deficit number. Second, part of the point is the fact that, at least at the moment, it is politically impossible to eliminate Social Security or Medicare, so writing them off as anything less than real obligations makes no sense at all.

Where did you get "shadow government" anyway? This isn't a conspiracy article.

3/12/2008 9:03:33 PM

1) SS is off-budget. You do realize that, right?

2) The guy runs a site called "shadowstats". I got the name mixed up with that "shadow government" bullshit that popped up a few years ago.

3) Nobody is talking about eliminating SS. It WILL be scaled back though, the only question is when. Most likely when outlays cost glaringly more than revenues, and the treasury has to pick up the tab.

[Edited on March 12, 2008 at 9:09 PM. Reason : 2]

3/12/2008 9:07:24 PM

1) Yes, but that doesn't make our obligation any less unless there is the political will to do something about it. The two most powerful lobbying organizations in the US right now are the AARP and the NRA, in that order.

Ben Stein recently gave at the Commonwealth Club discussing, partly, the fiscal state of the US (http://wordforword.publicradio.org/ -- scroll down a bit and you can find the audio) when he cited these facts:

- 78m Baby Boomers set to retire with an average household savings of $50k, $115k if you include home equity, and only roughly 20% of them have a "meaningful pension." These folks aren't going to give up their Social Security.

- Medicare obligations, growing at the present rate over the next 50 years & discounted to present value is so large, that they exceed the current collected wealth of the United States.

Now, I can't verify those facts (yet) since I don't know where Stein pulled them up.* My point is, we've reached a point where outlay costs glaringly exceed the revenues, the question is one of politics.


2) Fair enough. FWIW, the name behind his website alludes to the fact that the Federal Government cooks their numbers to make them look better. If you look at the actual article he covers this in some depth.


3) see #1.


*50 trillion over the next 75 years was the quickest number I found and it came from the Concord Coalition. The fact that we can't pay it all off today with the nation's assets (and he was referring to private as well as public assets) is being used more for comparison than anything else.

[Edited on March 12, 2008 at 9:35 PM. Reason : *]

3/12/2008 9:27:33 PM

Quote :

"My point is, we've reached a point where outlay costs glaringly exceed the revenues, the question is one of politics."

Actually, right now revenues exceed outlays by billions, and the treasury dips into the surplus. Shit will change pretty quickly though, since baby boomers are starting to retire. I believe that SS is projected to change from a surplus to a deficit by 2011 or so.

The issue is one of accounting. John Williams wants to put future SS obligations into the budget. Our budget doesn't work like that. SS is a pay-as-you-go program, and although the surplus or deficit will ultimately get picked up by the government, it factors in differently as an off-budget program.

3/12/2008 9:35:42 PM

If we're not at the point, we're very near the point, and people will fight harder for the very real SS checks coming every month than the notional checks they may get in a few years once they manage to retire.

The other issue is the probability of falling productivity due to a higher tax burden, one we'll be the ones paying.



Anyway, I'm wondering if anyone has read the actual article yet?

3/12/2008 9:41:10 PM

Havent read it yet . . . . . but i dont feel like i need to in order to understand that we are spending way more money than we have, whether you factor in SS now or later. The hole Washington is digging is ridiculous.

also . . .
republican or democrat?
I dont think it matters. All congress/the president can do is pass bills that cost more money and shy away from other things that need to be done. My prediction for the new president (no matter who it is) is the Deficit to increase, the war to continue, and taxes to increase. thats not Doom and gloom either.

3/12/2008 10:09:37 PM

Me? libertarian (little "L")
Author? describes himself as a Republican, but makes clear his disgust with both parties.

3/12/2008 10:30:30 PM

i was actually talking about the next president/congress
that may be off topic though

3/12/2008 10:37:02 PM

is the implied debt really that large in all ways of looking at it?

I mean, the debt to the retiring population is only an IOU. Can't we just not pay it?

3/12/2008 10:46:02 PM

In theory, yes.

3/12/2008 10:47:42 PM

The only thing worse then a republican is libertarian.

ZOMG MY MONEY IS MINE FUCK SOCIETY THAT ENABLED TO GET WHERE I AM EVERYONE FOR HIMSELF PER THE HEIGHT OF THE INDUSTRIAL REVOLUTION WHERE TOOLS LIKE ME SLAVED FOR 14 HRS A DAY TO BARELY AFFORD HEAT.

but anyway, yes. The federal deficit is out of control and the government is essentially borrowing the cost of all new programs.

3/12/2008 11:34:35 PM

Quote :

"i was actually talking about the next president/congress that may be off topic though"

It isn't. You're right it isn't relevant what party is in power as long as enough of the people who got them there keep saying "gimmie". I think that is the issue I'm trying to address here. At what point do we quit saying "gimmie"? Is it early enough for a soft-ish landing, or do we, in the words of the late Hunter S. Thompson, "ride this strange torpedo to its logical conclusion?"

3/13/2008 7:44:16 AM

Id say the earlier we start the better it will be, cant imagine its going to be much fun though. this is going to be our generations big section in the history books.

^^just another example of government failing the people. . . . which is why we need less of it

3/13/2008 8:19:08 AM

Well if you elect an incompetent president/party combo then yes government fails.

There's no set rule that government can't be successful as American society is filled with governing institutions that are successful:

State Governments
Town Governments
Corporate Governments
etc.

And even the federal government, when its not in republican control.

3/13/2008 8:59:57 AM

I just wish that ANY of the current candidates took this fiscal issue seriously, instead of downplaying it and covering it up. If a presidential candidate doesn't actively campaign for fixing this problem, then it's clear that it's not going to get better when they're in power. Both parties are complete bitches for this.

That was my #1 reason for cheering Ron Paul on. I didn't want him to win, but I wanted other candidates to take up his issues.

Sadly, they haven't. I will now vote in whatever way possible to express maximum discontent with the present government.

[Edited on March 13, 2008 at 9:29 AM. Reason : ]

3/13/2008 9:27:45 AM

No you took up ron paul because you're an idiot and don't understand how the economy works.

Fiscal responsibility aside, the Gold Standard and abolishing both the Federal Reserve and the IRS would have thoroughly destroyed the nation. Thoroughly. We'd end up living in the Republic of North Carolina.

3/13/2008 9:45:07 AM

John McCain is a budget hawk, so he'll at least try to keep the costs down if elected.

3/13/2008 9:54:49 AM

you mean he will keep us spending a shitload of money in iraq while our infrastructure collapses

3/13/2008 9:55:50 AM

^^^ He addresses that as well:

Quote :

"I mean, if we can accept for a moment my premise that there’s no way of curing the fiscal problem shy of a bankruptcy—and that there’s no way the government is going to renege on its debt—I’m sure it’ll do what has been politically expedient in the past: You rev up the printing presses and pay off the debt with the money that you print—even as that money becomes worthless. The thing is, with the dollar, we are dealing with the world’s reserve currency. So we are talking about a global crisis of unprecedented proportions, probably one that would lead to the collapse of the current currency system. You’d probably have to have an international conference to reconstitute the global currency system and somehow build confidence in the public that the new system will work and that it’s stable, so that we are not put in the same position as the poor people of Germany, after WWI, because that is the type of hyperinflation that could evolve here. So the cures will have to be remarkable. They will have to convince people that things have changed. As crazy as it sounds, I think the only thing they will be able to do is to go back on some kind of gold standard."

Look, no one argues that going off the gold standard didn't spur growth. But Mr. William's point here is that the use of fiat money has encouraged us to spend beyond our means and we're approaching, if not at, a point where that system could collapse.

Our ability to borrow money is completely based on the international faith in the dollar, a faith that rests on the value of the dollar and the ability of the US government to pay off its debts. If this ceases to be the international perception, the dollar is in for a precipitous drop.

Ron Paul, was the only candidate, on either side of the aisle, seriously addressing the fiscal issues facing the government.

3/13/2008 9:56:52 AM

the only serious issues our current congress can tackle is Roger Clemen's steroid use. A democratically controlled congress. That was our hope against Bush. . . . .?

republican, democrat . . . . they are pretty much the same to me. They are skirting important issues either willfully or because they know they are divisive and are worried about their careers. The least they could do was have an honest dialogue. we sure cant count on the media to do that.

3/13/2008 11:17:48 AM

I think we're fucked.

3/13/2008 12:07:34 PM

I don't think we're necessarialy fucked, I just think that there needs to be a vocal enough minority that starts bringing this issue up to their congressmen. The two biggest obstacles to that are:

a) the status quo -- usually more politically feasable to go with a known evil than a problematic solution

b) general economic / fiscal ignorance -- I mean, I'm no economic expert (and I'd be glad to hear some legitimate criticisms of my assumptions and the article's assumptions) but I feel like I know more than the average voter. These are dry issues, not nearly as "exciting" as prostitution scandals or steroid abuse. Getting people fired up about this is going to be hard.

3/13/2008 12:50:03 PM

an honest, open dialogue would be so crucial.

Not telling people what to think but allowing them to form their own opinions

Id actually admit that hearing others opinions on this board has helped me both form my own opinions and look for more information of topics. Most people just don't want to talk about in a face to face conversation though.

3/13/2008 1:08:06 PM

Quote :

"No you took up ron paul because you're an idiot and don't understand how the economy works. Fiscal responsibility aside, the Gold Standard and abolishing both the Federal Reserve and the IRS would have thoroughly destroyed the nation. Thoroughly. We'd end up living in the Republic of North Carolina."

You are the worst fucking kind of crap posting on TWW, seriously. All you're working off of is a stereotype of Ron Paul supporters, it's uninformed, disgusting, and shows that you can't even read the post you're responding to.

I never wanted Ron Paul to win. I wanted to see him make bigger waves. Why? Because of the exact problem presented in this thread. Honestly, I think the stuff about gold standard and whatnot is lip service anyway. The crisis is what JCASHFAN said in the first post here. The other candidates don't acknowledge the issue, which confirms what many people see as the biggest threat facing our country right now.

Quote :

"Ron Paul, was the only candidate, on either side of the aisle, seriously addressing the fiscal issues facing the government."

3/13/2008 7:13:59 PM

so what year did all the european nations become socialized? just wondering cause i'm wondering why the us didnt do it then either

3/13/2008 8:28:37 PM

Quote :

"dont let the republicans hypnotize you....the world will be better under liberals than john mccain"

Now remember, DNL said he hasnt decided whether he will vote dem or republican in the general. LOL

Im not sure the numbers are correct from the website cash. They seem to have a hard time between debt and deficit.

What better way to help the country than to elect a dem. 800B in new spending is surely the way to go.

3/13/2008 9:55:30 PM

my mom told me today shes not voting for clinton or obama and i was like you are voting mccain arent you LOL

3/13/2008 10:24:28 PM

Really.

Do any of the three really represent an economically defensible position?

1) Spend a trillion or so on Iraq and elsewhere.
2) Spend a trillion or so on Health Care.

With Social Security coming due for millions of baby boomers, my position is this:

Source of $$$ or GTFO.

3/13/2008 11:46:18 PM

Quote :

"Im not sure the numbers are correct from the website cash. They seem to have a hard time between debt and deficit."

Not following you, the information seemed pretty understandable to me, what did you have issue with?

3/14/2008 5:37:47 AM

Democrats "torpedo" Bush tax cuts but continue "pork-barrel spending":

Senate Blocks Moratorium on Earmarks

Quote :

"WASHINGTON (AP) — The Senate rejected calls from both parties' presidential candidates to take an election-year break from pork-barrel spending as a Democratic-run Congress pushed budget plans that would torpedo hundreds of billions of dollars in tax cuts won by President Bush."

Quote :

"The underlying House and Senate Democratic federal budget plans for 2009, though nonbinding, drew blasts from Republicans for allowing some of Bush's tax cuts to die in about three years. The House passed its $3 trillion budget plan by a 212-207 vote. It would provide generous increases to domestic programs but bring the government's ledger back into the black, but only by letting all of Bush's tax cuts expire at the end of 2010 as scheduled. The Senate endorsed extending $340 billion of Bush's tax cuts but balked at continuing all of them as it headed toward a final vote well after midnight. All three major presidential candidates interrupted their campaigns for a Senate vote-o-rama that began before noon and included more than 40 roll calls."

http://ap.google.com/article/ALeqM5gSu1RI33g5jZfU8YAz7ZFmoPbb7AD8VD0DRG0

3/14/2008 7:22:31 AM

^ Here is my issue with that perception. It is easy to condemn the "Democrats" or "Republicans" as a monolithic block but, as the article pointed out, "John McCain, the GOP nominee-to-be, couldn't attract even a majority of Senate Republicans to vote with him Thursday night"

I'm waiting for the roll call numbers to come out but I plan on calling Rep Price and Sens Dole and Burr to let them know my opinion. Will I talk to them? Of course not. If enough people call their secretary supporting or disagreeing, they'll get the point.


In case you haven't see this little gem, this is an excellent website for tracking how your congressman or senator votes: http://projects.washingtonpost.com/congress/110/

3/14/2008 8:54:17 AM

^ Fair enough. Just quoting the AP, which is not a conservative organization:

Quote :

"WASHINGTON (AP) — The Senate rejected calls from both parties' presidential candidates to take an election-year break from pork-barrel spending as a Democratic-run Congress pushed budget plans that would torpedo hundreds of billions of dollars in tax cuts won by President Bush [emphasis added]."

[Edited on March 14, 2008 at 9:01 AM. Reason : .]

3/14/2008 9:01:17 AM

Right, I'm not saying that isn't true, just that I think it is in the interest of the controlling parties to get us wrapped around the axle of the other party being the boogey-man while ignoring the individual votes of the individual representatives.

To be blunt, goddamnit you represent me mother-fucker and I plan on making my voice heard.

Hell, it is an election year, you think these guys don't have their ear to the electorial railroad tracks?

3/14/2008 9:04:08 AM

^ Yeah, it looks like we're going to be seeing a tax increase and increased spending--not good.

[Edited on March 14, 2008 at 9:11 AM. Reason : .]

3/14/2008 9:09:00 AM

Quote :

"Really. Do any of the three really represent an economically defensible position? 1) Spend a trillion or so on Iraq and elsewhere. 2) Spend a trillion or so on Health Care. With Social Security coming due for millions of baby boomers, my position is this: "

true, BUT...

1. from a fiscal perspective, universal/socialized healthcare is much more terrifying to me, because once it's out of the bag, it'll be almost impossible to put it back. we'll be stuck with it forever. win or lose, we'll be out of iraq someday, and whether it's 1 year or 10 years, that's a comparatively short period of time.

2. i think that leaving iraq would be a disaster. we might end up having to do it anyway, but I don't think this is the time at all. i think we've seen enough (and are seeing enough) progress to justify sticking with it.

3/14/2008 10:33:02 AM

FOR THE LAST FUCKING TIME

STOP RANTING AGAINST UNIVERSAL HEALTHCARE

ALL THOSE COUNTRIES THAT RANK HIGHER ON THE WHO HEALTH SYSTEM SCALE

YEA

THEY HAVE UHC

ARE THEIR GOVERNMENTS ON THE VERGE OF BANKRUPTCY?

THE NEAR 2:1 VALUE OF THE EURO VS DOLLAR SUGGESTS NO.

SERIOUSLY. THIS IS GETTING RETARDED NOW.

HURRRRRRR, HEALTHCARE FOR EVERYONE IS WORSE THEN SPENDING 10 BILLION DOLLARS A MONTH ON A WAR WITH NO END

NOT TO MENTION, WE

THE UNITED STATES

HAVE THE MOST EXPENSIVE HEALTH SYSTEM IN THE WORLD.

[Edited on March 14, 2008 at 10:58 AM. Reason : >.<]

3/14/2008 10:58:28 AM

and where do you think the money for UHC is going to magically come from?

I guess helicopter ben can print more...

How about we first get our finances in order before thinking about the next big ticket spending item?

3/14/2008 11:27:03 AM

^^ FOR THE LAST FUCKING TIME

STOP RANTING ABOUT A "WAR WITH NO END"

Public's Attitudes Toward Progress in Iraq Turn More Favorable
February 28, 2008

Quote :

"However, public attitudes about the war in Iraq have turned more positive, which is a favorable development for McCain. A steadily growing number of Americans say progress is being made in Iraq. Moreover, 47% now favor keeping U.S. troops in Iraq until the situation there has stabilized, the highest percentage expressing this view in well more than a year."

http://pewresearch.org/pubs/750/obama-lead-problems

Interest in Iraq war declining, poll finds
From the Associated Press
March 13, 2008

Quote :

"WASHINGTON -- Only 28% of the public knows that nearly 4,000 Americans have died in the Iraq war, and attention to the conflict has gradually diminished, a survey by the nonpartisan Pew Research Center found."

http://www.latimes.com/news/printedition/asection/la-fg-toll13mar13,1,7957757.story

[Edited on March 14, 2008 at 11:40 AM. Reason : .]

3/14/2008 11:40:14 AM

Well yea

I'll readily admit that UHC is impossible in the US currently.

However, people labeling it as the worst thing possible for this country I think are being slightly more then a little ignorant.

Hooksaw

The war on terror is a war on an abstract concept. And like all war's on abstract concepts (ie: Poverty, drugs) it has no end.

3/14/2008 1:05:37 PM

yeah, if i had a choice between 10B a month on killing brown people in iraq, or 10b a month on fixing healthcare, i'm all for spending that money within our borders...

3/14/2008 1:30:31 PM

^

Quote :

"brown people"

Un-fucking-believable. The Nazis weren't "brown"; the Italian fascists weren't brown.

Never miss a chance to bash America, am I right?

3/14/2008 1:35:56 PM

Nazi's and italians aren't very abundant in iraq.

Thats what the context of this argument is. Try to stay focused.

3/14/2008 1:40:44 PM