Tea partyers claim that because of the massive expansion of government due to healthcare bill, taxes on the working class (which are down for now) will eventually HAVE to go up.

This seems to be the main source of their anger but its wrong because costs won't rise in the long term since the war will be over.

We've spent 983billion on wars in the last 9 years. Healthcare is going to cost 940billion in the next 10 years (before you count revenue from new taxes and fines)

So healthcare simply replaces the wars in the budget and government doesn't get bigger any way you look at it.

Whats wrong with my logic?

4/16/2010 6:48:40 PM

I dont think you want my honest answer.

But google baby boomers, entitlement spending growth, medicare/medicaid and SS solvency. Govt has already made a bunch of promises it cant keep or pay for, the new health care bill is simply one more.

Or just look at the deficit spending numbers and the PROJECTIONS...

You think the health care bill will be the only increase in spending it seems, that is where your logic here is mainly flawed.

http://en.wikipedia.org/wiki/File:GAO_Slide.png

http://en.wikipedia.org/wiki/File:Medicare_%26_Social_Security_Deficits_Chart.png

And sadly this chart is a little old, as SS is thought to go red much sooner bc of the recession.

[Edited on April 16, 2010 at 6:57 PM. Reason : .]

[Edited on April 16, 2010 at 7:00 PM. Reason : .]

4/16/2010 6:54:17 PM

We aren't out of the wars yet.

4/16/2010 6:56:18 PM

^true. Sadly, I doubt we will send everyone home regardless. And its not like we will save 100% of those dollars anyway.

4/16/2010 6:59:16 PM

We also give Israel ~140billion of aid per year but people don't riot over that.

[Edited on April 16, 2010 at 7:06 PM. Reason : 2003]

4/16/2010 7:05:47 PM

We still have bases in Germany. The US never pulls out completely, but going to just the tip will produce some savings in blood and treasure.

Although we shouldn't count the chickens before they hatch. I'm still glad we're on a time-table to get out of Iraq, but I'd like to see something similar for Afghanistan too.

4/16/2010 7:06:09 PM

mamba, who is rioting now? Actually foreign aid is the number one thing people want to cut first. fyi

A goal for Afghanistan would be the first thing I would want, not a mission statement. But I agree, its more than time to get everyone back.

4/16/2010 7:12:31 PM

Quote :

"foreign aid is the number one thing people want to cut first"

I tend to hear entitlements listed first.

4/16/2010 7:13:36 PM

^^You may like one of the senate candidates positions then. Elaine Marshall disagrees with the President on Afghanistan:

Quote :

"I acknowledge that there are no easy answers in Afghanistan and I respect the time and consideration that the President took in making his decision. However, I disagree that now is the time to commit 30,000 additional men and women to prop up a corrupt government that has shown no real effort to reform itself. The mission that we are about to undertake has too much to do with building a nation that has not had a stable or responsible government in decades and too little to do with keeping us safe at home. Our goal should be to stop terrorists who threaten our country wherever they are and we should identify, capture or kill them and using force when necessary. Right now though, the greatest threat to the United States and the rest of the region is the growing instability in Pakistan. The country harbors the most dangerous mix of terrorists and nuclear weapons in the world. Our efforts should be there, using political and diplomatic pressure on the Pakistani government to root out and destroy the remaining Al Qaeda elements that have sought harbor in their borderlands. Failed states provide havens and training grounds for terrorists. However, these states have rarely, if ever, been “fixed” by the foreign powers. They have only been made stable by long-term, expensive occupations that, more often than not, eventually fail. That is not the route we should take in Afghanistan."

4/16/2010 7:18:53 PM

Well that is the thing that NEEDS to be cut, as its our biggest and fastest growing expense. Its also the hardest to cut as people dont want to cut their benefits while they are receiving it. Thats why we gotta overturn this lastest health care bill before it gets rolling. imo.

The poll, i was referring to, was what people favored cutting. Aid was number one. If you said entitlements it would probably score higher than cuts in medicare or SS. You see what Im saying?

Supplanter, I dont blame the president for trying what worked in Iraq in Afgh. But id like to see a definition of success vs a mission statement. If we are there to kill AQ, fine. Do it, get home. If we are there to change the culture... its going to be awhile. But thanks for the info, I agree with the position they make.

[Edited on April 16, 2010 at 7:21 PM. Reason : .]

[Edited on April 16, 2010 at 7:22 PM. Reason : .]

4/16/2010 7:19:23 PM

Why does it "NEED" to be cut? Our currency and bonds still have lots of value. Why fix it if it ain't broke?

4/16/2010 7:23:02 PM

Cal Cunningham on the other hand advocates for a defining the mission in Afghanistan but has also said things in the debate like stay however long it takes to get the job done.

Quote :

"To ensure our national security, we must: Clearly define and pursue our national security interests in Afghanistan and Pakistan, by fully implementing counterinsurgency strategy, seizing momentum, protecting the population, allowing no geographic safe-haven for Al Qaeda, building Afghani capacity to secure itself, and turning over the security mission as soon as possible."

4/16/2010 7:37:25 PM

Another problem is we borrowed heavily for the war. Try paying interest. And wed have to borrow more if we swapped war for healthcare as you propose, which equals more interest which means more borrowing.

4/16/2010 8:00:43 PM

It doesn't matter anymore at this point. The problem is already past soluble.

No nation has ever amassed, let alone repaid, a sovereign debt of even the same order of magnitude as we now have.

There is not, and can not be, sufficient economic output within the nation to pay back what is now owed, denominated in actual wealth (such as the equivalent in gold or other goods with a tangible value).

Eventually we must either default on the debt (as other nations suchas Argentina have done) or monetize the debt (print the money) as Zimbabwe has done. So far, the current Federal Reserve has pursued the latter path. In other words, if it is nominally paid back, it will be with paper currency with little material value.

Either way, there will be a day of reckoning and it will be ugly.

4/17/2010 7:47:25 AM

you think there's a bill collector with more firepower than the US Army?

4/17/2010 7:58:41 AM

you don't need firepower to devalue currency.

hell, all China has to do to is stop buying our debt.

4/17/2010 8:22:45 AM

Quote :

"you think there's a bill collector with more firepower than the US Army? "

Really missed the point

4/17/2010 8:59:20 AM

Quote :

"Why does it "NEED" to be cut? Our currency and bonds still have lots of value. Why fix it if it ain't broke?"

The same is said of Greece today. The problem is that on the day the bonds lose their value, it is too late to do anything about it. Once they lose their value, simply rolling over the debt at the new higher interest rates bankrupts the state (100+% of tax revenues going towards interest payments).

4/17/2010 10:02:52 AM

Quote :

"Try paying interest."

In what? Dollars, that we determine the value of.

Quote :

"There is not, and can not be, sufficient economic output within the nation to pay back what is now owed"

Why would we want to? Reducing debt is a response to slowing down economically.

Quote :

"Eventually we must either default on the debt (as other nations suchas Argentina have done) or monetize the debt (print the money) as Zimbabwe has done. So far, the current Federal Reserve has pursued the latter path. In other words, if it is nominally paid back, it will be with paper currency with little material value."

Or, as people see we are unable to pay our debt it becomes tougher to get, and we begin paying it off then. We have nothing in common with Zimbabwe or Argentina, and the likelyhood that our debt-gdp ratio will get 10 times larger than it is, is fairly unlikely.

Quote :

"you don't need firepower to devalue currency."

We'll always get what we make.

Quote :

"The same is said of Greece today. The problem is that on the day the bonds lose their value, it is too late to do anything about it. Once they lose their value, simply rolling over the debt at the new higher interest rates bankrupts the state (100+% of tax revenues going towards interest payments)."

The reason Greece is in the trouble it's in is because they tried to hide it. Look at Japan, they have 2x the debt-gdp ratio of Greece, and 4x the ratio of ours, and they haven't had any of the problems you've described.

4/17/2010 10:52:37 AM

we need to go ahead and print the money to pay it back

4/17/2010 11:01:16 AM

^ It has been argued and I found it convincing that inflation is harmful to both current economic efficiency and future productivity growth. So, no.

^^ American debt tends to be held either by foreigners or Americans, neither of which have demonstrated their historical willingness to hold treasuries in the face of adversity. Japanese debt tends to be held by japanese people, which have.

4/17/2010 11:45:07 AM

Quote :

"American debt tends to be held either by foreigners or Americans"

Obviously, considering there's no one else that could possibly hold it.

Quote :

"neither of which have demonstrated their historical willingness to hold treasuries in the face of adversity."

Didn't they just do it? In fact aren't they flocked to in times of adversity?

4/17/2010 11:49:04 AM

I'm surprised that mambatroll's obvious trolling is luring in so many people. Seriously, he's doing the worst trolling I have ever seen.

4/17/2010 1:26:21 PM

America just needs to make a lot of money on the Internet.

4/17/2010 2:36:13 PM

^ you mean like placing a toll on all those dump trucks, a la Ted Stevens?

4/17/2010 3:11:58 PM

Quote :

"Didn't they just do it? In fact aren't they flocked to in times of adversity?"

Not at all. You said it yourself, the U.S. does not currently owe that much money. We don't even owe as much as Greece. But, we are stacking it up fast, hence the discussion. Or are you going to continue talking around the issue?

4/17/2010 4:28:10 PM

Sure we don't owe that much, but it was obvious we are going to owe more, so using your logic, shouldn't investors have left US bonds, rather than running to them?

4/17/2010 4:49:14 PM

Quote :

"hell, all China has to do to is stop buying our debt. "

and all we have to do is stop buying their cheap plastic imports. We take money from the Chinese as fast as they can lend it to us because they can't afford to not lend us the money.

Quote :

"Really missed the point"

,

no, you really don't understand the situation.

4/17/2010 8:14:01 PM

Quote :

"you mean like placing a toll on all those dump trucks, a la Ted Stevens?"

I'm thinking more like the "What What, in the butt" kid.

4/17/2010 10:52:36 PM

Quote :

"Sure we don't owe that much, but it was obvious we are going to owe more, so using your logic, shouldn't investors have left US bonds, rather than running to them?"

Of course not. Have you no knowledge of history? Western nations, particularly America but most recently western Europe and Canada, have a habit of running up huge deficits and then, inexplicably, slashing spending, cutting taxes, and paying down their debts. Coming into the 1990s, Canada was just as we are today, running massive annual deficits, raising taxes, and seemingly incapable of cutting even trivial spending. Then, from 1992 to 1997, federal spending fell by 20%, while the population continued to grow and the economy prospered.

Governments tend to operate in a form of boom and bust cycle. Politics cannot move as fast as markets can, so it can take decades or more for voters to muster the necessary political organization to correct even the most glaring governmental failures. This is why I prefer free markets. Failures tend to get corrected in a matter of months or years, not generations.

4/18/2010 11:31:04 AM

Quote :

"Western nations, particularly America but most recently western Europe and Canada, have a habit of running up huge deficits and then, inexplicably, slashing spending, cutting taxes, and paying down their debts."

Cutting taxes won't really help reduce debt. And I'm not sure what history you're talking about, WW2/GDep where we ran the debt up above where it is now, and that wasn't really paid off with a reduction in spending, but more overall growth.

The Reagan borrow, Clinton pay down is pretty small, I don't know if that's what you're trying to get at.

But you're throwing up a red herring, what does this have to do with the original point?

4/18/2010 12:01:24 PM

Quote :

"Cutting taxes won't really help reduce debt. And I'm not sure what history you're talking about, WW2/GDep where we ran the debt up above where it is now, and that wasn't really paid off with a reduction in spending, but more overall growth."

Again, it seems my only point is your complete lack of historical knowledge. That, or exaggerate my own (it really is a coincidence I read this recently).

Quote :

" The president [F.D.R., during WWII's final year] believed a New Deal revival was the answer—and on Oct. 28, 1944, about six months before his death, he spelled out his vision for a postwar America. It included government-subsidized housing, federal involvement in health care, more TVA projects, and the “right to a useful and remunerative job” provided by the federal government if necessary. Roosevelt died before the war ended and before he could implement his New Deal revival. His successor, Harry Truman, in a 16,000 word message on Sept. 6, 1945, urged Congress to enact FDR’s ideas as the best way to achieve full employment after the war. Congress—both chambers with Democratic majorities—responded by just saying “no.” No to the whole New Deal revival: no federal program for health care, no full-employment act, only limited federal housing, and no increase in minimum wage or Social Security benefits. Instead, Congress reduced taxes. Income tax rates were cut across the board. FDR’s top marginal rate, 94% on all income over $200,000, was cut to 86.45%. The lowest rate was cut to 19% from 23%, and with a change in the amount of income exempt from taxation an estimated 12 million Americans were eliminated from the tax rolls entirely. Corporate tax rates were trimmed and FDR’s “excess profits” tax was repealed, which meant that top marginal corporate tax rates effectively went to 38% from 90% after 1945. Georgia Sen. Walter George, chairman of the Senate Finance Committee, defended the Revenue Act of 1945 with arguments that today we would call “supply-side economics.” If the tax bill “has the effect which it is hoped it will have,” George said, “it will so stimulate the expansion of business as to bring in a greater total revenue.” He was prophetic. By the late 1940s, a revived economy was generating more annual federal revenue than the U.S. had received during the war years, when tax rates were higher. Price controls from the war were also eliminated by the end of 1946. The U.S. began running budget surpluses. Congress substituted the tonic of freedom for FDR’s New Deal revival and the American economy recovered well. Unemployment, which had been in double digits throughout the 1930s, was only 3.9% in 1946 and, except for a couple of short recessions, remained in that range for the next decade. The Great Depression was over, no thanks to FDR. Yet the myth of his New Deal lives on. With the current effort by President Obama to emulate some of FDR’s programs to get us out of the recent deep recession, this myth should be laid to rest."

http://online.wsj.com/article/SB10001424052702304024604575173632046893848.html

[Edited on April 18, 2010 at 4:20 PM. Reason : .,.]

4/18/2010 4:19:41 PM

Quote :

"Again, it seems my only point is your complete lack of historical knowledge."

I guess you just mean my ability to read wall street journal regularly.

You stated that the holders of american debt would be extremely risk aversive, they just proved themselves not to be. Last year was history too you know.

So instead of trying to prove whatever the hell you're trying to prove about the great depression, why don't you try to put some evidence behind your statement that holders of american debt would quickly run away from it, keeping in mind that they flocked to it as our debt and debt future grew and grew?

4/18/2010 5:29:42 PM

The U.S. Government had trouble borrowing both times it tried to do so in such large quantities. The government had trouble borrowing as much as it wanted to during the great depression, it had difficulty borrowing during WW2. As such, I said "neither of which have demonstrated their historical willingness to hold treasuries in the face of adversity." The only adversity we have seen were extreme examples, I recognize. But outside of these examples, the U.S. has not run up such large debt loads, so there is no evidence that investors are willing to hold such large quantities of American debt. The only evidence we have, the past year, is not evidence as our debt load is still rather paltry. So, as I said in another thread, the question is not of default this year, but in twenty years.

4/18/2010 6:13:38 PM

Quote :

"The only adversity we have seen were extreme examples, I recognize."

And as such, is that example alone enough to justify the statement you made?

Quote :

"But outside of these examples, the U.S. has not run up such large debt loads, so there is no evidence that investors are willing to hold such large quantities of American debt."

We are very close right now, more than close enough to test your theory.

4/18/2010 7:17:28 PM

Trying to prove or refute economic theories based on events still in progress right now seems a bit like trying to confirm/deny global warming by saying "it's been especially hot/cold this year"...

4/18/2010 7:20:02 PM

The bond rally has already happened.

4/18/2010 7:31:28 PM

didn't read most of the thread...

but we have deficit and debt problems that ending the wars won't solve (and OEF isn't going away for while, anyway).

I'd like to think that no tax increases will be needed, but I'm not sure that's the case. I definitely roll my eyes every time the right rants and raves about wanting more tax cuts. While that would probably be possible if we kept the federal government within its lane, we have to carve away a bunch of federal bullshit before we can lower taxes (and maybe before we can even keep them where they're at). Cutting taxes further will just cause further deficits, in my opinion--not responsible pruning of spending (this is, of course, assuming that at this point, we're on the back side of the Laffer curve...I'm no economist, but that's my guess).

I think that few people realize just how overwhelmingly large our deficit has become. Getting rid of it will require cuts in a lot of peoples' sacred cows.

4/19/2010 12:54:25 AM

Quote :

"And as such, is that example alone enough to justify the statement you made?"

Yes, it justifies the statement that U.S. bond holders have not "demonstrated their historical willingness to hold treasuries in the face of adversity." They have not. If you have some historical evidence that U.S. bond holders are willing to hold two or three times our current debt load, then show it to us. If not, then my statement stands as absolutely true.

4/19/2010 9:52:07 AM

Quote :

"If you have some historical evidence that U.S. bond holders are willing to hold two or three times our current debt load, then show it to us."

Well you don't have have evidence to back that up.


Right now it is getting close to what it was, yet our bonds remain stable, so I believe the evidence supports me.

4/19/2010 5:18:47 PM