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Archive for Saturday, February 5, 2011

National debt should alarm U.S. public

February 5, 2011

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What does it take for the American public to become more concerned about this nation’s unprecedented debt and how this fiscal disaster can, and probably will, affect all Americans not only for the rest of their lifetimes, but for the lifetimes of their children and grandchildren as well?

The United States has never been in a situation such as this, and yet, the public is either living in a make-believe world, blind to the seriousness of the situation, is thinking it isn’t as serious as others suggest or is thinking that some way or other the problem will be solved. Too many think “the government will fix it.”

Now, the national debt totals more than $14 trillion, and the Congressional Budget Office predicts budget deficits of $768 billion annually for the next 10 years.

Interest on the debt is in the billions of dollars every day. According to the CBO, the government will have to borrow 40 cents for every dollar it spends this fiscal year, which ends Sept. 30. In 2010, the United States accumulated more than $3.5 billion in new debt every day, more than $2 million a minute. The current $14 trillion national debt — that’s how much the United States has borrowed and how much more it has to pay in interest — is larger than the total economies of China, the United Kingdom and Australia combined.

Uncle Sam is not reducing its debt; in fact, it is growing along with the billions in interest.

The national debt is expected to reach close to $20 trillion by 2015. How much more serious does it have to become before the public demands corrective action, as painful as it will have to be?

Is the public numb about the deficit? Has it heard so much about millions, billions and trillions that these numbers don’t register any more?

Bloggers are not known for accuracy, but one such effort at theeconomiccollapseblog.com offers an interesting scenario:

“How would you feel if you found out one day that your parents had run up millions of dollars in debt that now you were obligated to pay off? Would you be absolutely furious? Of course you would be and rightly so. So, how do you think future generations will feel about us? We once were the wealthiest nation on the planet, but we have taken that great inheritance and we have squandered it.

“Now we are handing our children and our grandchildren the largest debt the world has ever seen. How in the world can we do that? How can we consign our descendants to perpetual debt slavery and still feel good about ourselves?

“The America that we all have been enjoying so much today is going to be wiped out by all of this debt. We have literally stolen the future. We just had to keep spending more and more and more. The greed of this generation will be remembered for a very, very long time.”

Some will say this all is an over-alarming statement that unnecessarily tries to scare the public and use fear as a tactic to try to correct the situation, that the situation isn’t as bad as it appears.

Maybe so, but it seems there is every reason to be frightened about the current fiscal situation.

To illustrate just how serious and out of control the situation is, the Obama administration now is asking Congress to approve raising the nation’s debt ceiling. Is there ever enough for this administration? When will it end, and is there any conceivable way to pay off this debt and return the country to fiscal sanity?

To a far, far lesser degree, but also terribly important, Kansans should be concerned about the state’s fiscal situation and how to achieve the mandatory balanced budget. What cuts will be necessary, and will taxes have to be raised to pay for all the programs and services the public and state employees think they are entitled to?

Added to the national debt scandal is the Social Security scandal, another monetary disaster that Congress has failed to correct. A recent CBO report said Social Security will run at a deficit this year and keep running in the red until its trust funds are drained by about 2037. This is a bleaker forecast that previous CBO estimates.

The report said Social Security first went into deficit last year but had been projected to post surpluses for a few more years before permanently slipping into the red in 2016.

This year alone, Social Security will pay out $45 billion more in retirement, disability and survivor benefits than it collects in payroll taxes.

Again, what does it take for the American public to become more concerned about this nation’s debt, and what does it take for those in Congress to display the courage and guts to initiate long-overdue corrective actions?

The same could be asked of those in the Kansas Legislature.

Comments

grigori 3 years, 10 months ago

There is only one way out of this mess. . . and you will not like it.

Crazy_Larry 3 years, 10 months ago

Jubilee Year? It's about time for a Jubilee Year! When's the last time we had a Jubilee Year?

A Jubilee year is mentioned to occur every fifty years, in which slaves and prisoners would be freed, debts would be forgiven and the mercies of God would be particularly manifest.

Tom Genereaux 3 years, 10 months ago

I thought the Tea Party was on this problem.

booyalab 3 years, 10 months ago

Using their limited spending cuts, I eliminated the 2030 budget shortfall without touching any military spending or raising taxes.

Raising taxes is the worst way to address the deficit. It assumes the problem is the taxpayers fault, which is ridiculous. We don't make the final budget decisions. The problem, as evident in the word "deficit", is that the government is spending MORE than it collects in taxes. If the government was spending just as much as it took in and then let taxpayers vote on whether they wanted to be taxed more so the government would have more to spend, that's something else. But spending needs to be reigned in first.

Kendall Simmons 3 years, 10 months ago

And you're going to keep it a secret...why?

LiberalDude 3 years, 10 months ago

Yes, our national debt is a huge problem. But where was this article when Bush was starting two wars while also giving rich people (like Dolph) huge tax breaks. Our modern day conservative, Republican politicians are fiscally irresponsible. They don't know how to balance a budget but they sure know how to cut taxes (particulary for the rich and corporations). Reagan started us down this road to huge national debts and Clinton was our only recent president that reduced the deficit.

jafs 3 years, 10 months ago

Actually he eliminated budget deficits, and left office with a surplus.

booyalab 3 years, 10 months ago

I just learned about this recently. I used to attribute that surplus to the Republican congress. But it wasn't even a real surplus. They had to borrow the funds from social security and other trust funds. So hopefully we can put that myth to rest. The Clinton surplus was not a surplus.

jafs 3 years, 10 months ago

Do you have a credible source for that?

It's certainly possible - and he wouldn't have been the only one to do that.

LiberalDude 3 years, 10 months ago

Any President that would have been elected with half a brain would have spent in 2009. The Stimulus Bill and Bailouts saved our economy. If it wasn't for this spending we'd still be in a Great Depression. It would have been just as bad as 1929 with 50% unemployment and bread lines. Bush left our economy in this horrible condition.

Obama isn't a reckless spender. Once the economy gets better he'll balance the budget.

jafs 3 years, 10 months ago

I seriously doubt that we'll see balanced budgets with this administration - let's see how it goes.

Also, of course, what we really need is surpluses, so that we can pay down the debt over time.

Crazy_Larry 3 years, 10 months ago

Reckless! It wouldn't matter who the Republicrats put in office. They all have the same Puppet Master. What you need to realize is that there is a cabal of super-rich corporate 'elites' who want to control the world and the USA stands in the way.

So glad Bush wasn't a reckless spender... http://en.wikipedia.org/wiki/Troubled...

The Bush administration painted a rosy picture of how the Iraq War would unfold. Bush officials presented themselves as competent, efficient and concerned leaders, ready to handle any challenge the war might present. Among the assurances made by the Bush administration to the public are the following:

Assurances http://www.youtube.com/watch?v=b8DaIf...

NO END IN SIGHT Trailer http://www.youtube.com/watch?v=vINM0C...

Eisenhower tried to warn us about the Military Industrial Complex, which has taken control of this country.

Stop having faith in the 'leaders' of this country. They are not working for the good of our country and its future.

LiberalDude 3 years, 10 months ago

Our President (yes, he is yours too unless you are a treasonous traitor) knows that the debt limit has to be increased so that the US doesn't default and lose our credit rating. This is the only rational thing to do and you'll see that even the Republicans will vote for this.

Once our economy heals, we'll see balanced budgets from Obama. As Clinton proved Dems know how to balance the budget. Unfortunately, modern day Republicans (Reagan, Bush I, Bush II) have proved over and over again that they don't know how to balance a budget.

Crazy_Larry 3 years, 10 months ago

You're too caught up in the illusion of choice that is offered by the Republicrats and Democans. They offer the illusion of choice. Truth is these politicians are controlled by the same Puppet Master. Get past the illusion to realize the truth. The politicians do nothing for We The People, but everything for their corporate masters.

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. " Dwight D. Eisenhower, 1961

Assurances on Iraq War by the Republicrats: http://www.youtube.com/watch?v=b8DaIf...

Ground proofing the Iraq War: http://www.youtube.com/watch?v=vINM0C...

To Big To Fail TARP: http://en.wikipedia.org/wiki/Troubled...

(2 February 2011) All-Time Record: Wall Street Compensation Hits $135 Billion http://blogs.forbes.com/robertlenzner/2011/02/02/alltime-record-135-billion-wall-street-compensation/

Liberty275 3 years, 10 months ago

"(yes, he is yours too unless you are a treasonous traitor)"

Count me in!

FloridaSunshine 3 years, 10 months ago

@Liberty275...I'm not clear as to whether you want to be counted as a treasonous traitor or to acknowledge that Obama is your president as a citizen of the U.S.

Carol Bowen 3 years, 10 months ago

Weren't there two large tax increases under Reagan? I remember at least one stimulus effort. Checks were sent to every taxpayer.

I agree that current Republicans cannot manage a budget ... Not even for their own party.

kernal 3 years, 10 months ago

Only some of dem, Tom, not all of dem. That's like saying all Republicans are Tea Partiers.

Richard Heckler 3 years, 10 months ago

"for every dollar the Education Department pays out in default claims, it is able to rake back the entire principal, plus almost 20 percent in interest, penalties and fees. And keep in mind that the value of the default portfolio includes not merely principal plus interest at time of default, but also the interest that continues to accrue after default. " Wall Street Journal

MW--How is the government assisting this scam?

Alan Nasser---We've just seen one way that government aids and abets the lenders, by fudging default rates. But government's participation in this rip-off goes deeper than that. The Department of Education has its own loan program and, accordingly, a positive interest in defaults. It makes a financial killing on its recovery of defaulted Federal Family Education Loan Program (FFELP) loans.

Let's bring this up to date with a glance at Table 4 in the Supplement to president Obama's 2010 budget. We find that the most recent recovery rate -the amount recovered compared to the amount of the defaulted loan- for defaulted FFELP loans is 122 percent. This is the highest recovery rate for all types of federal loan, and more than twice the rate for the next highest loan category. You get a sense of the relative enormity of Uncle Sam's looting binge when you look at the recovery rate for credit card defaults – about 25 cents on the dollar.

Alan Collinge of StudentLoanJustice.org has shown that the Department of Education makes more on defaulted loans than it does on loans in good stead. Washington has just as much an interest in encouraging student loan defaults as do, for example, collection companies, which obviously live off defaults. This is exactly what the first president Bush meant when he declared his intention to "run government like a business." Government itself has become a predatory lender. It has the same incentive to benefit from default as do private lenders.

MW-- How do private loan companies benefit from defaults?

Alan Nasser---Here, briefly, is what gives private companies a more than casual interest in default. It was Congressional legislation that screwed students to the benefit of holders of defaulted loans. Legislators put in place a new fee system which permitted holders of defaulted loans to appropriate 20 percent of of all payments from debtors before any of those payments are applied to principal and interest

The borrower is subject to a form of extortion, whereby (s)he essentially buys her way out of allegedly more severe penalties with payments that are rarely applied to principal or interest on the defaulted loan. These outlays are in effect the price of access to a substitute loan, accompanied of course by additional fees. The new loan is typically larger than the defaulted one.

The fee system is at the heart of the private lenders' affection for default....

more and more:

http://www.counterpunch.org/whitney02042011.html

Richard Heckler 3 years, 10 months ago

How did we get here?

The Global Economy and Reagnomics are absolute failures for the USA!!!

This is what I mean:

Reaganomics brought in deregulation big time with hostile takeovers,mergers and leveraged buyouts following like no other time in history. Following all of that American jobs being laid off and moving to communist China with a fair amount of rapidity. Now we're talking loss of wealth generation within the blue collar workers and for the nation.

Slowly being chipped away was the middle class. Essentially the primary spenders and equally important the folks that kept the nations bills paid.

Now the white collar jobs are off to India by the millions.

How does putting millions upon millions upon millions out of work support the economy?

Now in more recent times the upper middleclass white collar is being chipped away with these jobs largely moving to India.

All in all this is simply reckless management of the nations economy. Reaganomics has been more like wreckanomics.

Have voters forgotten who and what put them out of work twice in the last 30 years?

Richard Heckler 3 years, 10 months ago

Face it repub neoconservatives, their Global Economy and their Reagnomics are absolute failures for the USA!!!

This is what I mean:

  1. The Reagan/ Bush Savings and Loan Heist( millions out of work) "There are several ways in which the Bush family plays into the Savings and Loan scandal, which involves not only many members of the Bush family but also many other politicians that are still in office and were part of the Bush Jr. administration.

Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which cost American tax payers over $1.4 TRILLION dollars (note that this was about one quarter of our national debt").

The Reagan/Bush savings and loan heist was considered the largest theft in history at the time. George Herbert Walker Bush then took $1.4 trillion of taxpayers money to cover the theft. http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm

  1. The Bush/Cheney Wall Street Bank Fraud on Consumers(millions out of work) Yes, substantial fraud was involved. For example, mortgage companies and banks used deceit to get people to take on mortgages when there was no possibility that the borrowers would be able to meet the payments. Not only was this fraud, but this fraud depended on government authorities(Bush admin) ignoring their regulatory responsibilities." http://www.dollarsandsense.org/archives/2009/0709macewan.html

  2. Only 3 major Financial Institutions were at risk in spite of what we’re told ? "There were just a handful of institutions that were terribly weakened. AIG the insurer, Bank of America and Citigroup, Those three were clearly in very weakened form. Many of the other big banks simply were not. http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

  3. We do know it is a good thing Social Security was not under Wall Street control during the Bush/Cheney years. In fact Wall Street has a consistent history for losing money...Yep!

Privatizing Social Security Would Place the Nations Economy at Risk "Social Security privatization will raise the size of the government's deficit to nearly $700 billion per year for the next 20 years, almost tripling the size of the national debt.

Put simply, moving to a system of private accounts would not only put retirement income at risk--it would likely put the entire economy at risk."

http://www.dollarsandsense.org/archives/2005/0505orr.html

Moving Social Security Insurance over to Wall Street is real dumb economics!

overthemoon 3 years, 10 months ago

Funny thing...privatizing Social Security would force people to pay into for-profit money management fund-. Kind of like a mandate to purchase health insurance from for-profit insurance companies. Why is one ok and the other 'unconstitutional'??

scott3460 3 years, 10 months ago

Let's all listen to the crickets chirp while the right wingers' heads explode.

scott3460 3 years, 10 months ago

Ah, the good old days before that horrible mandated Social Security, how wonderful they were. When a man was free of government interference and could die of starvation in a tenement shack at age 65. Life was so much simpler then.

Flap Doodle 3 years, 10 months ago

I was beginning to think you'd worn out this set of links, merrill. Has to have been at least a week since you've repeated this drivel.

Alceste 3 years, 10 months ago

Trace the debt back to the Ronnie RayGun days of tax cuts for the wealthy.

Reagan cut top marginal tax rates on the rich from 74 percent to 38 percent. Predictably, there was an immediate surge in the markets—followed by the worst crash since the Great Depression and the failure of virtually the entire nation’s savings-and-loan banking system.

“You Americans are such suckers. You think that the rules for taxes that apply to rich people also apply to working people, but they don’t. When working peoples’ taxes go up, their pay goes up. When their taxes go down, their pay goes down. It may take a year or two or three to all even out, but it always works this way—look at any country in Europe. And that rule on taxes is the opposite of how it works for rich people!”

So, if a worker is earning, for example, a gross salary of $75,000, his 2009 federal income tax would have been about $18,000, leaving him a take-home pay of $57,000. Both he and his employer know that he’ll do the job for that $57,000 take-home pay. So let’s take a look at what happens if the government raises income taxes. For our average $75,000-per-year worker, his takehome pay might decrease from $57,000 to $52,000. So, in the short run, increased taxes have an immediate negative effect on him. But here comes the part the conservatives don’t like to talk about. Our own history shows that within a short time—usually between one and three years—that same worker’s wages will increase enough to more than compensate for his lost income. Former Federal Reserve Chairman Alan Greenspan used to be hysterical about this effect—he called it “wage inflation”—and the Wall Street Journal and other publications would often reference it. It’s one reason why as income taxes increasingly hit more and more working people in the United States between the 1950s and 1981, income itself steadily went up, too. http://www.truth-out.org/roll-back-reagan-tax-cuts65332

libra101 3 years, 10 months ago

The Boomers and so-called Greatest Generation racked up this debt with tax cuts and expensive wars. We can't ask them to do anything to help pay it back though, because they are old, or something. Dolph has no problem with me and my kids paying for it though. Way to be responsible, care to lecture us any more Dolph?

tomatogrower 3 years, 10 months ago

Where was this outrage when Bush started an expensive war, then cut taxes? Back then the Republicans were poopooing the concern over the deficit. I guess it's ok to run up the debt to spend on wars and on other countries, but if you run up the debt to spend money in the US, it's bad. Such patriotism.

Kendall Simmons 3 years, 10 months ago

The question was actually "Where was this outrage when Bush started an expensive war, then cut taxes?"

Outrage at war itself is not the same as outrage at the economic decisions to start a war then cut the taxes needed to pay for it.

scott3460 3 years, 10 months ago

"How much more serious does it have to become before the public demands corrective action, as painful as it will have to be?"

When will that pain involve a return for the wealthy to the tax rates and policy we had in place when there was a middle class and the country was prosperous?

just_another_bozo_on_this_bus 3 years, 10 months ago

Dolph is too much of a proud warrior for his class to propose anything like that. Maybe if he had as much money as Buffet and Gates he'd be more willing to do his part in paying off the debt.

scott3460 3 years, 10 months ago

No, Liberty One, I was attempting to point out that Simons and those like him are always trumpeting that painful cuts must be made to government services to remedy the mess their economic policies have created. When will the painful choice be that the very wealthy in this country pay more in taxes for all the tremendous benefit they receive, rather than the vast middle and lower class get less service?

Alceste 3 years, 10 months ago

Here's the deal, and, trust me, history repeats itself:

The wealthy SHALL share what they have and do so happily, or it SHALL be taken from them. It's as simple as that. It's the way it works. There is no changing this fact, either.

Smart wealthy understand the reality that if they don't share, it'll get taken. Dumb wealthy get what's coming to them.

The tax structure we have in the USA is so weak and favoring the financially elite few it's beyond amusing. Comparing the income tax structure of the USA to our good friends in Western Europe is also amusing. And, no, the problems with the Euro have nothing to do with service delivery.....Look at Denmark, Sweden, The Netherlands, etc., etc., etc., etc.

JustNoticed 3 years, 10 months ago

Or, maybe the future just looks like "Soylent Green". We are moving in that direction.

Tony Kisner 3 years, 10 months ago

By printing all of this money we have been able to pay nearly $100 a month for TV and internet. Something we lived fine without about thirty years ago. Plus we were a little thinner.

jafs 3 years, 10 months ago

The real problem is that nobody in Washington has been serious about the debt situation (pace Clinton).

So those of us who are concerned have no good candidates to vote for - both D and R folks don't actually do anything to help.

Tea Party supporters think that those folks will do something - I hope they're right. But I predict they will either not have much sway in Washington, or become inevitably corrupted in order to get that power.

It's a bit cynical, and I hope I'm wrong, but that's the way it looks to me.

scott3460 3 years, 10 months ago

"and what does it take for those in Congress to display the courage and guts to initiate long-overdue corrective actions?"

But the new job creating super Tea Congress read the parts of the Constitution that weren't politically embarrassing and voted to allow insurance companies to deny coverage to Americans who get sick. And John Boner is doing his very best to reduce the national debt via cigarette and tanning bed taxes.

Isn't that enough?

yourworstnightmare 3 years, 10 months ago

The national debt should have worried you and all americans eight years ago. Bush profligacy in part led to the economic recession of 2008.

And happy 100th to Ronald Reagan, the architect of deficit spending and who we have to thank for much or our national debt.

yourworstnightmare 3 years, 10 months ago

I do not doubt that you persoanlly were, liberty_one, but as I recall certainly Mr. Simons was not nor were many in the GOP who have now leaped aboard for political expediency.

We were told by Dick Cheney that deficits don't matter and this idea was followed by Bush and Congress. We were told by "conservatives" that it was a good thing to run a deficit, just like having a mortgage or car loan.

We are told that tax cuts do not increase the deficit. They do.

I do not doubt your personal consistency on this isue, but the GOP conservative establishment reeks of hypocrisy for political gain.

yourworstnightmare 3 years, 10 months ago

Obama is in great company as a deficit spender. The facts:

Reagan: deficit spender. Bush I: deficit spender. Clinton: balanced the budget with a surplus. Bush II: deficit spender. Obama: deficit spender.

just_another_bozo_on_this_bus 3 years, 10 months ago

There only thing wrong with deficit spending is when it doesn't satisfy these two criteria.

  1. It must help create something of tangible value that will
  2. create the conditions that will allow it to be repaid in a timely manner.

Unfortunately, neither of those conditions has been met for a very long time. And adopting "austerity measures" as a way to deal with the current debt is nothing more than the movers and shakers (such as Dolph) who created this mess trying to shove it off on those least able to pay for it just so they can get even more tax cuts while leaving all their corporate welfare intact.

kernal 3 years, 10 months ago

grigori says, "there is only one way out of this mess and you're not going to like it" Well, gregori is right, up to a point since I don't know what his "way" is.

But, if we are going to save our country from a catastrophic economic implosion, we also have to include the current and future state of the environment because everything thing we are able to do in life is tied to nature. If we continue to contaminate our planet the economic status will be a moot point.

kernal 3 years, 10 months ago

Grammer wits need not reply, I know, I know.

guess_again 3 years, 10 months ago

After 9/11 we could have bought Afghanistan and Iraq for less than we have spent fighting two wars.

And it was the Republicans that took the war costs out of the debt ceilings. Republicans can't complain about the current deficit after busting the procedures which have kept the debt in check previously.

yankeevet 3 years, 10 months ago

Dont blame this on the american tax payer; its the governments fault for getting us in this situation; the overspending; the welfare; women having kids with no fathers; so they get a check; ..............what a crock...........

Alceste 3 years, 10 months ago

food stamps are just a mechanism to pay Corporate Welfare to Corporate Farming via price supports and subsidies. Food stamps have very little to do with feeding people.

kernal 3 years, 10 months ago

Well, then they better put down their beer, crack pipe, or whatever, and give a rats patootie!

pace 3 years, 10 months ago

Raise taxes but not to the wealthiest, they need their loose change to buy the asserts the states plan to sell off to them cheap.

Close the loopholes, make taxes simple and fair. Cut the pork.

It won't happen. In time of emergency, people jump up and rob the victims. Some teapots are demanding the unemployed be assessed a special tax as an incentive to find a job.

notanota 3 years, 10 months ago

So I take it from your current budget scare column, Dolph, that you'd like us to eliminate the Bush tax cuts for the rich and stop bailing out "too big to fail" businesses? Because cutting things like education, public health, Social Security, state retirement benefit, and arts spending is only another way to tax our grandchildren.

camper 3 years, 10 months ago

I'm also concerned about other challenges we are going to leave those who come after us. Several come to mind, but are not the topic of this thread.

Darrell Lea 3 years, 10 months ago

Mr. Simons - in regard to your piece, I would note the following:

Paragraph 1 - review sentence structure. This is a run-on sentence that could have been written as two or three separate sentences.

Paragraph 2 - review sentence structure. The list-within-a-sentence trick is difficult for the reader to follow.

Paragraph 3 - beginning a sentence with an adverb followed by a comma is awkward.

etc..

Is there no one on staff to help you with the fundamentals of writing? I am aware that language arts and comprehension are suffering as a result of new digital media. As the proprietor of a news organization, I feel that you owe it to your readers and your co-workers to present your ideas in a more coherent and cohesive manner.

yourworstnightmare 3 years, 10 months ago

Defense, social security and medicare consume over half of our spending. Any proposal without serious cutting of these is mere posturing. 1) Get out of Iraq and Afghanistan and rely on special ops and cruise missiles. 2) Impose means tests for social security and for medicare.

George Lippencott 3 years, 10 months ago

Well,

Doctor care under Medicare is essentially pay as you go - not broke - needs tweaking. Hospital care under Medicare is broke. Social Security is not broke as it has a number of "bonds" issued with the full faith and credit of the United States in those cabinets in West Virginia. They are now to be redeemed. I guess you could call it broke but then there are those pesky “bonds”.

If you means test the portions of these program that are insolvent how long will there be support to continue the programs. They will just be another massive income transfer activity.

The middle is getting increasingly angry at paying most of the bill for these!!

Godot 3 years, 10 months ago

Dolph says, "A recent CBO report said Social Security will run at a deficit this year and keep running in the red until its trust funds are drained by about 2037. This is a bleaker forecast that previous CBO estimates."

There is no trust fund, at least not one with any assets. Back in the Clinton years, Congress took the money from the trust fund and spent it. They replaced the money in the trust fund with IOU's. Not treasury bonds, not marketable securities, just IOU's. And every Congress since then has continued to take the annual surplus from our FICA contributions and spend it and replace it with more IOU's.

Thanks to this accounting gimmickry, aka Ponzi scheme, in a few months when FICA contributions are not sufficient to meet current retiree obligations, the Social Security Administration will have to open up its Trust Fund file cabinet, pull out a few IOU's, and try to collect from a government that has no money in the bank. The only way .gov can pay off those IOUs is to borrow money.......sell more bonds and add to the national debt. And every year forward, the IOU's will have to be pulled out earlier and earlier, and in larger and larger quantity, and the borrowing will continue, unchecked, until finally no one is willing, or able, to buy our bonds. Then what will we do?

That $20 trillion debt in 2015 is an optimistic projection.

George Lippencott 3 years, 10 months ago

Mr. Simons has written an editorial on our predicted bleak financial future. In response the LJW bloggers came out of their corners with the blame game. Mr. Obama did it or Mr. Bush did it. Few actually offer solutions or challenges to the presumptions. Perhaps we should all stop and think about this a bit. For some thoughts see:

http://www2.ljworld.com/weblogs/loyal-opposition/2011/feb/5/we-are-bankrupt-part-1/#c1514013

Godot 3 years, 10 months ago

Agnostick, I challenge you to step up to the plate. What will you, personally, do to solve the problem in the here and now? In this game, you do not have the option to blame others in the past, you cannot refuse to act now because people in the past have made mistakes or acted criminally; you must make a plan to rescue, not just us, but our children and their children, now.

What are you willing to you do?

Godot 3 years, 10 months ago

Agnostick, I cannot civilly respond to you. I am sorry for you.

notanota 3 years, 10 months ago

Not to mention that the debt ceiling has been raised by every single president within my lifetime. Asking to raise it again is not some momentous occasion. Other than a bargaining chip that tea partiers hope to use in order to slash social security and medicare. Extra bonus is that if they succeed, they'll campaign on how they're not the ones who slashed all the benefits.

OzD 3 years, 10 months ago

The U.S. House could show that they're at least going to pretend to be fiscally responsible by repealing Medicare Part D, an unfunded program passed by a Republican congress and signed by a Republican president. Boehner could then say "We're going to undo our piece of legislative garbage, now work with us on undoing some of yours." Lead by example.

Godot 3 years, 10 months ago

Then you'll agree that we should repeal Obamacare - it fills the "donut hole" in Medicare Part D.
Repeal the Patriot Act. Dismantle TSA.

nut_case 3 years, 10 months ago

Debit? F.... Who cares, we're getting a new library.

camper 3 years, 10 months ago

Here is what I'd do or be willing to support:

1) .05% to1% federal sales tax to go toward debt reduction 2) Social Security means testing 3) Eliminate federal payroll tax ceiling (social security/medicare) 4) Cut military spending 10% each succesive year until we reach 20% of what we are currently spending. 5) Immediate exit from Iraq and Afghanistan 6) Eliminate and/or consolidate government programs that overlap 7) Eliminate earmarks 8) Eliminate capital gains tax and treat passive income as ordinary 9) Cut foreign aid 10) Reverse current health care bill and institute a federal public option 11) Eliminate Bush tax cuts 12) Gradually monetize small percentages of the debt by offsetting it against trade deficit (which is a cash outflow and one reason in addition to low demand why we are currently not experiencing inflation).

Each of the 12 above have flaws. Some of them like #12 are even risky. But this is not going to be pain free if we are serious.

camper 3 years, 10 months ago

Which of the above do you think gives me anything more? I can't come up with any.

Crazy_Larry 3 years, 10 months ago

I agree with most of your suggestions. However, I have a better solution: JUBILEE YEAR! The money is pulled from thin air by the Federal Reserve Banksters anyway...

yourworstnightmare 3 years, 10 months ago

Camper I agree with most of your items.

I would also add a means test for medicare, but if there was a public option then this would be moot.

Crazy_Larry 3 years, 10 months ago

The way I see it, what's going on is unconstitutional taxation without representation...Isn't that what is happening? The debt will be passed on to FUTURE generations; people who are not even born yet and have absolutely no say in how the money was spent.

I recommend a Jubilee Year solution whereby lands are returned, (debt) slaves freed, and all debts forgiven. The money is pulled from thin air by the Federal Reserve Banksters anyway. JUBILEE! JUBILEE! JUBILEE!

camper 3 years, 10 months ago

Thanks AG and CL. I purposefully set the bar as high as possible on the 12 with the hopes of something maybe happening in the middle. And if any of the 12 displaces or is detrimental to anyone, I'm all for helping them thru the transition and not leaving anyone behind. Especially those who paid service. #12 I threw out there because my limited 12-hours of Ecomomics tells me monetizing the debt is bad......but I'm intrigued by the idea of finding a way to do it gradually. At the end of the day #12 could set a terrible precedent so I am generally against it.

George Lippencott 3 years, 10 months ago

Hey camper - could start. Some may not save much.

I would add

  1. Limit dependence on government social programs by requiring work (and enforcing it).
  2. Tax all entitlements so that the cost of government is apparent to all.
  3. Add a wealth tax to restore progressivity to our tax system
  4. Limit the franchise to those who are productive (remove permanent welfare recipients)
  5. Cut social programs by 5% a year until they are 20% of the current level (or 1950 level which ever is higher).

I would amend your offering as pertains to health care. Add a constitutional amendment requiring government to fund it adequately and define the term as to availability, quality, timeliness and so on.

yourworstnightmare 3 years, 10 months ago

The GOP know that americans hate paying taxes but also hate having their goodies cut. So, they indulge them in both.

They cut taxes and all the while increase spending. There has not one single serious spending cut program detailed by the GOP, one that will get at the defense, social security, and medicare spending that accounts for over half of our budget.

Guess what? Tax cuts + spending increases = national debt.

yourworstnightmare 3 years, 10 months ago

Yes. The Tea Party.

In the past, democrats have generally opposed spending cuts but have supported means tests for entitlements such as social security and medicare. Indeed, means tests were taken out because of republican opposition, that means tests were socialism whereas equal payout was simply a savings account.

Democrats also, until recently, have opposed tax cuts. While there is bklame for both the GOP and democrats, I would say it is about a 75-25 split.

Richard Heckler 3 years, 10 months ago

This should alarm smart people far more than the national debt:

Still Banking on Fraud | Dollars & Sense

Reforms Fail to address the “control fraud” that caused the financial crisis. By William K. Black

A truly amazing thing has happened in banking. After the worst financial crisis in 75 years sparked the “Great Recession,” we have

* Failed to identify the real causes of the crisis
* Failed to fix the defects that caused the crisis
* Failed to hold the CEOs, professionals, and anti-regulators who caused the crisis accountable—even when they committed fraud
* Bailed out the largest and worst financial firms with massive public funds
* Covered up banking losses and failures—impairing any economic recovery
* Degraded our integrity and made the banking system even more encouraging of fraud
* Refused to follow policies that have proved extremely successful in past crises
* Made the systemically dangerous megabanks even more dangerous
* Made our financial system even more parasitic, harming the real economy

And pronounced this travesty a brilliant success

The Bush and Obama administrations have made an already critically flawed financial system even worse...

http://www.dollarsandsense.org/archives/2011/0111black.html

Richard Heckler 3 years, 10 months ago

Politicians are blaming the unemployed for being unemployed

Unemployment: A Jobs Deficit or a Skills Deficit?

Millions of Americans remain unemployed nearly a year and a half after the official end-date of the Great Recession, and the nation’s official unemployment rate continues at nearly 10%.

Why? We are being told that it is because—wait for it—workers are not qualified for the jobs that employers are offering.

Yes, it’s true. In the aftermath of the deepest downturn since the Great Depression, some pundits and policymakers—and economists—have begun to pin persistently high unemployment on workers’ inadequate skills.

The problem, in this view, is a mismatch between job openings and the skills of those looking for work. In economics jargon, this is termed a problem of “structural unemployment,” in contrast to the “cyclical unemployment” caused by a downturn in the business cycle.

The skills-gap message is coming from many quarters. Policymaker-in-chief Obama told Congress in February 2009: “Right now, three-quarters of the fastest-growing occupations require more than a high school diploma. And yet, just over half of our citizens have that level of education.” His message: workers need to go back to school if they want a place in tomorrow’s job market.

The last Democrat in the White House has caught the bug too. Bill Clinton explained in a September 2010 interview, “The last unemployment report said that for the first time in my lifetime, and I’m not young…we are coming out of a recession but job openings are going up twice as fast as new hires. And yet we can all cite cases that we know about where somebody opened a job and 400 people showed up. How could this be? Because people don’t have the job skills for the jobs that are open.”

A load of nonsense:

http://www.dollarsandsense.org/archives/2011/0111millerwickslim.html

Richard Heckler 3 years, 10 months ago

Move Your Money - To local Lawrence institutions like credit unions and do your community a large favor.

A database to assist those wishing to move their money out of big banks that took taxpayer money and used it to pay themselves large bonuses:

http://moveyourmoneyproject.org/

http://www.huffingtonpost.com/arianna-huffington/move-your-money-a-new-yea_b_406022.html

http://www.democracynow.org/2010/1/4/move_your_money_project_urges_people

jayhawklawrence 3 years, 10 months ago

I have been reading Jim DeMint's book,"Saving Freedom."

I am trying to be more open minded and I think the Senator makes a lot of good points about how our nation managed to accrue such a huge national debt.

There is an unwillingness to give up on tax cuts or to cut spending. Should we call this a Mexican standoff?

The same standoff seems to block health care, tax and financial reform. DeMint traces a lot of our problems to allowing government to grow too large and intrude into our lives to the point where our freedom is now at stake and with it, our economic future.

You wonder where we can find the leadership we need that can rally the American people to make the necessary sacrifices and change that is needed to get out from under this debt and to start competing better in the new global economy.

What I did not understand before reading this book was how earmarks have corrupted our Congress. Even though the amount is relatively small, it works like a bribe to get the congress supporting larger spending bills that should not have passed. They are often passed without debate because of earmarks that are promised to a particular senator or house member who votes without even reading the entire bill.

The way our current Congress is operating is not how our founders intended. There is simply too much money being controlled by our government and they burn through it like crack heads through dope. Who is going to stop it if we don't say enough is enough?

camper 3 years, 10 months ago

jayhawlawrence, I'm reading a book called "Naked Economics", by Charles Wheelan. One earmark example he used was ethanol subsidies. This benefits a very minute part of the population, but because Iowa is one of the 1st primary states, politicians have been known to flip flop on the issue once they join a race. I suppose there are many examples like this.

Richard Heckler 3 years, 10 months ago

It may not be as simple as DeMint wants it to be...

Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else by David Cay Johnston

Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense and Stick You With The Bill - David Cay Johnston http://en.wikipedia.org/wiki/David_Ca...

Nickel and Dimed: On Getting By in America is a book written by Barbara Ehrenreich http://en.wikipedia.org/wiki/Nickel_a...

Deficits: Real Issue, Phony Debates What's at stake on either side of the class divide. http://www.dollarsandsense.org/archives/2010/1110wolff.html

George Lippencott 3 years, 10 months ago

merrill

Checked your URLs. Nothing new. Business and the rich are the villains. No answer as to how we actually pay the bill. Taxing the rich will not really dent it. Taxing business just passes that on to the rest of us in the costs of everything. While I agree that some businesses really overdo compensation, I do not know how to reach that money except through taxes and as above that will not solve the debt problem

Right now Social Security cost the taxpayer nothing. Medicare costs the taxpayers about $170 B per year (significant portion to supplement the Part A "trust Fund" that does not cover all the costs that we have assigned to it (is broke despite payroll tax withholding from many for a lifetime) and the part D prescription drug program that was added without any contributions by anybody and that is means tested and limited to those who do not buy supplemental insurance (about half of the 40 million recipients).

Entitlements (income redistribution) not including Medicare or Social Security cost about $800 Billion per year (a bit more than Defense in the large). Why are they never on the block? Just who is trying to hide those costs?

Why do SS and Medicare always come up without clarity as to actual costs? Neither was ever to have burdened the general fund. Adding in redistribution elements to both has raised the costs and should be paid from general revenues (Part D and largess in Part A) as they are essentially welfare. Social Security was to have had a large trust fund. The Congress in its wisdom spent it. How can they have not known that they would have to pay it back??

Have we been duped again by the government to whom you always want us to give more power?

Carol Bowen 3 years, 10 months ago

Good list Camper. I would add revamp the tax structure or increase taxes. Like it or not, the number of employed people is decreasing. That's one of the reasons social security is hurting. The revenue has to come from somewhere. All the added suggestions are good, too.

Moderate, I understand that you want to cut welfare, but I think you have a jaded view of those receiving it. Not everyone is milking the system, especially now. I agree that we should get folks back on track, if possible. To do that, the welfare systems need to be revamped. A lot of their regulations are counterproductive.

I am against increasing the retirement age to 70 for two reasons: 1) we need those positions to open up for younger workers, and 2) many folks struggle to hang on until 65 or 66. There's an assumption that aging is easy. It is not.

Carol Bowen 3 years, 10 months ago

Why can I not get upset about the federal deficit? Panic does not help. Anyone who has experienced an economic downturn knows that you have to develop a strategy to recover without doing more damage. Decide what is necessary to maintain and manage growth.

I am alarmed about the panic and emotion demonstrated by our leaders. None of them seem to understand how to budget. They are just pushing their own agendas.

jayhawklawrence 3 years, 10 months ago

I am familiar with the book, "Nickel and Dimed", because my wife used it as source material for a class she was taking.

However, I do not understand the point you are making.

It is true that many Americans are not paid enough and a minority are paid too much.

What has that to do with earmarks and overspending by Congress?

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