GAO chief warns economic disaster looms

Discussion in 'Politics, Religion, Social Issues' started by Thomas Veil, Oct 28, 2006.

  1. Thomas Veil macrumors 68020

    Thomas Veil

    Joined:
    Feb 14, 2004
    Location:
    Reality
    #1
    Seattle P-I

    I hope this is one thing the Democrats in Congress address in the new year. It is not a sexy topic, it is not at the top of many people's lists, and yet this is a far bigger threat than, say, the Social Security problem that Bush was raising the alarm for.

    Six short years of Republican rule have driven us near the brink of ruin. Can you believe it?

    If someone tries to tell me how good tax cuts are going to be for the U.S. economy, I think I'm going to punch him.
     
  2. Dont Hurt Me macrumors 603

    Dont Hurt Me

    Joined:
    Dec 21, 2002
    Location:
    Yahooville S.C.
    #2
    Clinton handed this president a big surplus, Bush has never said no to a spending bill even after this sorry congress loaded them up with Pork,Bacon,Chops......and anything else they could spend our money on.
     
  3. bemylover macrumors regular

    Joined:
    Jun 20, 2005
    #3
    Check what Milton Friedman says.

    But don't punch the dude, he's 93 after all.
     
  4. Desertrat macrumors newbie

    Joined:
    Jul 4, 2003
    Location:
    Terlingua, Texas
    #4
    I haven't seen much evidence of fiscal responsibility in the Congress since back in the days of JFK. Even Clinton's "balanced budget" was only balanced by ignoring accounting principles, and including FICA income into the general fund. If private-sector corporations followed the accounting system of the feds, the jails would be full.

    What's cited above about debt is only tip of the iceberg. The unfunded mandates for Social Insecurity, entitlements and other retirements already are around some $48 trillion. That's NOW, not off in the future.

    Another factor that doesn't get talked about much, outside of what might be called "counter-culture" investors, is the balance of trade. As a society, we're shipping money overseas at a rate of about double the federal deficit. As a society, we're spending more than we make by some $800 billion a year. The recipients, in turn, are buying US Treasuries as well as real property and control of domestic businesses.

    Solution? About all I can see is for the feds to cut spending by some notable amount. If you raise taxes to maintain current levels, you slow down business activity. We're already on the edge, given the reduction in buying power of the currency. Used to be, "middle class" was around $40K/yr and up. Now? Nope. Move on up. $60K or $80K is the entry. If we're losing high-pay jobs to overseas, and replacing them with lower-pay, how do you find the ability to pay higher taxes?

    You gotta factor in all these ARMs, among other problems, and what's already happening in many areas of the housing market. The big homebuilding corporations are in decline, laying off not only construction labor but office personnel as well. When the economy begins a decline, how can you ask those people for more money?

    We've been voting ourselves largesse from the public coffers for some 70 years, now. The buying power of our currency has been in decline for some forrty or more years. (When I was in the Army in the middle 1950s, the dollar bought 350 Yen. Now? Around 110. It was about 150 until the Reagan era.) Just in the last few years the Euro has gone from 83 cents to $1.27.

    So it's not just Bush or the Democrats or "they". Pogo done said it about meeting the enemy...

    'Rat
     
  5. Desertrat macrumors newbie

    Joined:
    Jul 4, 2003
    Location:
    Terlingua, Texas
    #5
    I haven't seen much evidence of fiscal responsibility in the Congress since back in the days of JFK. Even Clinton's "balanced budget" was only balanced by ignoring accounting principles, and including FICA income into the general fund. If private-sector corporations followed the accounting system of the feds, the jails would be full.

    What's cited above about debt is only tip of the iceberg. The unfunded mandates for Social Insecurity, entitlements and other retirements already are around some $48 trillion. That's NOW, not off in the future.

    Another factor that doesn't get talked about much, outside of what might be called "counter-culture" investors, is the balance of trade. As a society, we're shipping money overseas at a rate of about double the federal deficit. As a society, we're spending more than we make by some $800 billion a year. The recipients, in turn, are buying US Treasuries as well as real property and control of domestic businesses. Pray that they don't put in a "Sell!" order.

    Solution? About all I can see is for the feds to cut spending by some notable amount. If you raise taxes to maintain current levels, you slow down business activity. We're already on the edge, given the reduction in buying power of the currency. Used to be, "middle class" was around $40K/yr and up. Now? Nope. Move on up. $60K or $80K is the entry. If we're losing high-pay jobs to overseas, and replacing them with lower-pay, how do you find the ability to pay higher taxes?

    You gotta factor in all these ARMs and the interest-only mortgages, among other problems, plus what's already happening in many areas of the housing market. The big homebuilding corporations are in decline, laying off not only construction labor but office personnel as well. When the economy begins a decline, how can you ask those people for more money?

    We've been voting ourselves largesse from the public coffers for some 70 years, now. The buying power of our currency has been in decline for some forrty or more years. (When I was in the Army in the middle 1950s, the dollar bought 350 Yen. Now? Around 110. It was about 150 until the Reagan era.) Just in the last few years the Euro has gone from 83 cents to $1.27.

    So it's not just Bush or the Democrats or "they". Pogo done said it about meeting the enemy...

    'Rat
     
  6. zap2 macrumors 604

    zap2

    Joined:
    Mar 8, 2005
    Location:
    Washington D.C
    #6
    Increase tax and cut spending should solve this, Instead of that Bush went with "Cut taxes and increase spending!"


    Getting out of Iraq would a great way to free up some cash!
     
  7. Desertrat macrumors newbie

    Joined:
    Jul 4, 2003
    Location:
    Terlingua, Texas
    #7
    Getting out of Iraq would save, what, around $100 billion a year? That's a help, but the deficit (last I heard) is around $350 billion a year. The amount of the deficit, year-over-year, is declining. It used to be around $550 billion, IIRC.

    Government revenues are up, these last two or three years. That's historically common, following tax-rate decreases. It's also a large part of the reason for the decline of the deficit. After all, the amount of spending has increased, year-over-year.

    The reduction in the capital-gains tax changed investment patterns away from investments for an interest return. Interest is taxable as ordinary income, at a higher rate. So, millions of people sold capital assets and paid lower taxes on the profits. Previous to the decrease in the tax rate, they just sat on the assets--and paid no taxes at all. All that is part of why some half of all US households are in the stock market.

    'Rat
     

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