Government Assets (-) Liabilities (=) Bigger Problem than you realize.

Discussion in 'Politics, Religion, Social Issues' started by classicaliberal, Dec 27, 2012.

  1. macrumors regular

    classicaliberal

    Joined:
    Jul 19, 2011
    #1
    Article:
    Some of my Takeaways:
    A) Your government, and your politicians are lying to you about how bad the problem really is.
    B) Government isn't just a little too large, it's way too large. We have to SLASH spending immediately to have any chance of paying down our debt/liabilities. This includes all sacred cows including SS, Medicare, Medicaid, Defense, and more.
    C) Any suggestion that this problem can be fixed by mere taxation means the person is either lying right to your face, or they don't remotely understand the scale of the problem.
    D) Our society's desire to have it all and pay for none of it will be broken one way or another. Either way, it won't be easy and it won't be comfortable. Our decision is whether we take massive pain now, or we collapse later with far worse massive pain.
    E)"In short, if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn't be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities."
    F) The problem can't simply be solved by a 'balanced approach.' If both sides make concessions, this still isn't remotely close enough to close the gap. Spending is the problem, it can't be tweaked, it can't be adjusted, even when paired to massive tax hikes this doesn't come close to solving the problem. Spending must be SLASHED. We've spent beyond our means and the chickens are coming home to roost. To say spending at current levels 'isnt' sustainable' might be the biggest understatement of the century.
     
  2. macrumors 65816

    citizenzen

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    #2
    Running one of the largest 1st-world nations and governing over 300 million people costs a lot of money. That should come as a surprise to no one.

    A List of countries by tax revenue as percentage of GDP shows that when compared with other 1st-world nations, the USA generates between ~5-20% less revenue through taxes.

    The answer is pretty clear to me: we need to tax people more in order to maintain the society we enjoy. It would certainly help if we also stopped spending ~1 trillion dollars a year being the world's police force.

    I believe bringing our defense spending and taxation more in line with European countries will go a long ways towards raising government assets and meeting our financial obligations.
     
  3. thread starter macrumors regular

    classicaliberal

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    #3
    Right, but...

     
  4. macrumors G4

    Eraserhead

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    #4
    I think you're talking total rubbish.

    $8 trillion a year is over 50% of GDP - there is no way the US deficit is "really" that high.
     
  5. macrumors 65816

    citizenzen

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    #5
    From your article ...

    Love it.

    Now you know how it feels to advocate for something to get done regarding Climate Change.

    But back to your article ...

    You do realize this is an opinion piece?

    Can I rebut with Paul Krugman column?

    That would be cool.
     
  6. macrumors G4

    Rodimus Prime

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    Oct 9, 2006
    #6
    You forgot BUSH. Bush and on his run screw over a large number of that stuff and passed severel very large and unfunded entitlement.

    But never mind the fact that you had GW Bush and Bush and the GOP undid everything cBill had done in just a few short years.
     
  7. macrumors 68020

    miloblithe

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    #7
    This is nothing more than nonsense math. You'll note that the article doesn't mention time frames for the "net present value of the unfunded liability", because doing so would expose the real math behind these issues--not something the fear mongers want to do.
     
  8. thread starter macrumors regular

    classicaliberal

    Joined:
    Jul 19, 2011
    #8
    If you don't account for entitlement liabilities added to the balance sheet, you're right... it's not that high. And these are the numbers government reports. The point here is to account for ALL of our liabilities, not just those we have to pay today. Anything we don't pay today, has to be paid by our children... which I really don't think strengthens your argument.


    I sure do. And please, feel free to post a Paul Krugman column, I'd be glad to respond with specifics as to why I think he's wrong.



    Nobody forgot about Bush. I purposely didn't mention Bush, I also purposely didn't mention Obama, just like I didn't mention the Democratic or Republican parties. To me, it's not about party - that **** is meaningless. It's about policy, it's about philosophy, it's about being fiscally responsible. We can argue about who's more to blame... but where will that get us? This is about fully understanding how bad the problem is, and fessing up to what's going to be necessary to fix it!
     
  9. macrumors 68000

    hulugu

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    #9
    This is a strange accounting. These aren't really liabilities because they aren't "owed" instead, there's a promise to pay these amounts, but they can change because of political or demographic changes. Moreover, if the economic output improves over this time, that number will also decrease. The SSI report is an assumption of liabilities, but like corporations, you don't calculate that number as something owed today. No one is going to require the US gov't to pay 550 percent of GDP, in fact, that money will be spent from now to 2085.

    This doesn't dismiss our budgetary woes, but it's important to understand the context.

    Moreover, immediately slashing benefits will slow the economy, worsening the problem in the short-term, as well as the long-term.
     
  10. macrumors 6502

    CalWizrd

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    #10
    I agree with this, however, I believe that increasing taxes could have the same effect. Sadly, I think both are in order.
     
  11. macrumors 68000

    hulugu

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    #11
    Yeah, I tend to think we can balance them. The studies I've seen indicate that the tax hikes for top one percent of earners have less economic impact than benefit cuts or middle-class tax hikes.

    With that in mind, I think we should maintain services and benefits and raise some taxes now and then over time raise taxes for the middle. Benefit cuts have already been significant (state cuts have been drastic) and there's very little to be gained for the economic cost.

    We need to revise Medicare Part D and cut military spending (but keep veterans benefits up). And, then we need to wait for the economy to improve fully and that will happen much faster if we don't have to keep kicking the can down the road.

    We need a consistent five-year economic plan. We're actually creating a huge drag on the economy because Congress can't do it's job (and we lost inertia with the Debt Ceiling Debacle) and that needs to stop.
     
  12. macrumors 65816

    citizenzen

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    #12
    Very rational. The answer is to combine revenue increases and refining (not ending) entitlements as well as constantly looking for ways to make government more efficient. A balanced approach is the only way we'll create a sustainable solution.
     
  13. macrumors 6502

    CalWizrd

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    #13
    The problem, in my opinion, is that due to the nature of our system (I really have no better alternative to suggest) the "gifts" our representatives continue to bestow upon the groups they are beholden to will continue to guarantee excessive dollars being appropriated and spent on too many inefficient and dubious government programs.

    I am singling out neither side of the aisle, as they are both quite guilty of this practice. I don't rule out the executive branch either, both this administration and previous.
     
  14. macrumors 68000

    hulugu

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    #14
    Yeah, we need a government that bases more decisions on data rather than influence. We should look at farm subsidies, tax credits for oil and gas companies (including not only tax credits and subsidies, but cheap land leases), the defense industry (a real tabulation of cost overruns on projects as well as their necessity), and analysis of various forms of unemployment and health insurance. Are the states better at this? Or is this an ideological idea that actually spends more money that necessary?
     
  15. macrumors G4

    Rodimus Prime

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    #15
    seem to me this is part of the reason I think term limits is a damn good idea for them.

    At the very least you will have a group every time that does not have to deal with the people who bribed them with "campaign" financing. Also after you leave office make it against the law to be able to work as a lobbist for X number of years plus banned from working anywhere that you have worked with over certain number of with for a while. (aka remove those factors that make them want to pay back any types of bribs)
     
  16. macrumors 6502

    CalWizrd

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    #16
    Yes, term limits is a long overdue idea that should be implemented. Of course, the folks in power don't want to see it happen, especially if there were strict restrictions on official or "unofficial" lobbying after leaving government service.
     
  17. macrumors G4

    Rodimus Prime

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    #17
    I think they need those strict terms because that is about the only way you can make sure you have a rather good size group in office for their entire term they are more interested in the long term of the country instead of only the next election.

    Right now you can sure bet most of the people in congress are only thinking to the next eleciton. Made worse that they never get to leave campaign mode any more.

    The senate was set up so in theory the 2/3s of them could be dealing with long term stuff. Sadly they are turning the same way.
    Having 1/4 of congress at any point in time in lame duck would be helpful because you know that 1/4 would be allowed to think longer term as they are not going to be running for office again.
     
  18. macrumors 65816

    citizenzen

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    #18
    Totally disagree.

    We have term limits in the form of elections. When the people no longer want them, they won't be returned to office.

    And I want Nancy Pelosi fighting for me for many more years to come.

    (Admittedly, she's not in my district)
     
  19. macrumors Penryn

    rdowns

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    Jul 11, 2003
    #19

    In a more perfect world, I might agree. Between gerrymandered districts, power of incumbency and special interest groups, it's pretty hard for incumbents to lose, no matter how bad or corrupt they are. See Rangel, Charles, D-NY as an example.
     
  20. macrumors demi-god

    LethalWolfe

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    #20
    I think gerrymandering is a significantly bigger problem than term limits as a political party can keep putting in a new a warm body to toe the line even if term limits are in place. I'm not really keen on term limits (even for presidential elections) because it will get rid of the good as well as the be bad. If someone is good at their job they should keep to keep it and if they are bad they should be let go. Right now though because of gerrymandering and aspects of campaign finance it's too hard to get a bad elected official out of office.
     
  21. macrumors 68000

    thewitt

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    Sep 13, 2011
    #21
    It never ceases to amaze me how little the left on this forum understand about economics and the current state of our deficit spending.

    You cannot tax your way out if this.

    Government spending must be cut drastically - by as much as 40% - and tax savings for supposed cuts like are being promised today MUST be realized in the FIRST year, not in year TEN as is being proposed.

    Wake up sheeple.
     
  22. macrumors Penryn

    rdowns

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    Jul 11, 2003
    #22

    It never ceases to amaze me how little the right on this forum understand about economics and the current state of our deficit spending.

    You cannot fix a problem decades in the making in a year or 2. I can't fathom how anyone could call for a 40% cut in spending in the FIRST year unless one wanted economic collapse and civil unrest and a reason to use all those guns they are hoarding.
     
  23. macrumors 68000

    NickZac

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    Dec 11, 2010
    #23
    Historically, it seems the more we tax the more we waste. Have you checked the corporate tax? IIRC we are the second highest in the industrialized world...
    http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

    I'd like to see more fiscal responsibility and accountability across the board before I hand over any more of my money. And by all means, cutting defense spending can be part of that plan. And I think it is time we lower the corporate tax rate, especially if you want to raise the individual one.
     
  24. macrumors Penryn

    rdowns

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    Jul 11, 2003
    #24

    Our tax rates are a a joke. Hardly any individual or business pays anywhere near their marginal rate in taxes. It's even worse after all the loopholes and deductions. We could easily get by with much lower tax rates and the elimination of the vast majority of the deductions and loopholes. The business of tax avoidance should be put out of business.
     
  25. macrumors 68000

    NickZac

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    Dec 11, 2010
    #25
    I'm not sure what businesses you are referring to, but the ones I have worked for have paid tons in taxes. I agree loopholes are a bad thing and should be closed, but compare the US corporate tax rate to that of most European nations...it's almost twice as much. That isn't business friendly...corporations have a hard enough time making profit in this economy as it is, then they have to also pay a hoard of employee expenses that European companies don't due to different structural laws. I agree clear tax codes (ideally across the board) are a good thing and ending 'wealthfare' is important, but the amount of taxes that most US companies pay is staggering...
     

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