[Sixstrings]

Why do I even bother following the news. I said a year and a half ago, long before there was talk of a debt ceiling limit crisis, that this is what the government would do.

Inflate while changing the definition of inflation, voila push the easy button no more budget problems.

Debt Talks Turn to Social Security Cuts

President Barack Obama and lawmakers are considering cutting Social Security and increasing revenue by changing the way the government measures inflation.

Four senior congressional aides said lawmakers are discussing using an alternative yardstick to gauge inflation, known as the “chained consumer price index,” to determine annual cost-of-living adjustments for millions of Americans.

The idea may rile both Democrats and Republicans, because it could mean paring Social Security by $112 billion over 10 years, raising taxes by $60 billion and cutting pension and veterans’ disability payments by $24 billion, according to estimates by the nonpartisan Congressional Budget Office and the Joint Committee on Taxation.

Advocates say the change is needed because the government’s current measure of inflation overstates how quickly prices rise.
http://www.bloomberg.com/news/2011-07-07/social-security-cuts-weighed-by-lawmakers-under-change-in-inflation-gauge.html

That last sentence is BS, it's the theory that added value should be factored into effective inflation. In other words, because an iPad 3 does more than an iPad 2 while costing the same means inflation went down. Problem with that is old folks eating cat food to survive aren't buying iPads in the first place. They're not getting any added value out of anything.

Another part of the Obama-Boehner deal would cut $24 billion from disabled war veterans. Wow, that's classy. Lastly there's $60 billion in tax hikes.. remains to be seen if that's on the rich or the rest of us.

[AgentR11]

Its a riot, no? Inflation excludes food and fuel... the people on these programs buy almost nothing other than food and fuel. Food and fuel going up at 10%, other junk just 2%, and then take out the 2% for added value... poof, no benefit increases, while costs increase 5-10% / yr.

Mr. Burns would be proud.
Excellent.

[Cog]

Another part of the Obama-Boehner deal would cut $24 billion from disabled war veterans. Wow, that's classy. Lastly there's $60 billion in tax hikes.. remains to be seen if that's on the rich or the rest of us.

What part of balancing a budget escapes you? Do you routinely borrow thousands every year to create an unsustainable personal lifestyle. Progressives like you aren't really concerned about budget deficits. Why not just state it up front? You seem to think we can just print and borrow our way into taking care of all the entitlements that grow yearly. Time for you to take reality pill.

Better yet tell me where you would cut $1.17 trillion out of the 2010 federal budget to achieve balance. You can start here http://en.wikipedia.org/wiki/2010_Unite ... ral_budget
Now balance the budget and tell me what you want to cut.

Revenues $2.381 trillion

Discretionary spending: $1.378 trillion and
Mandatory Spending$2.173 trillion
Total cost: $3.551 trillion

The actual budget deficit for 2010 was $1.4 trillion but who is counting chump change?

[vision-master]

Upper income earners will be getting an increase in Medicare payments (they already are now) and SS cut's.

Well, if'n those rich ppl don't need SS, I say fine, cut their bennies.

[Cog]

Upper income earners will be getting an increase in Medicare payments (they already are now) and SS cut's.

Well, if'n those rich ppl don't need SS, I say fine, cut their bennies.

You do realize you could tax the rich 100% of their income and still wouldn't have a balanced budget?

I didn't think so.

[vision-master]

End the wars.........

Bring back jobs here........

Join a union........... (you love this one)

[mattduke]

I love how redefining the CPI is now explicitly an expenditure reduction measure and negotiating chip. Kingdom of Moltz all over again.

http://www.constitution.org/tax/us-ic/schiff/moltz.pdf

[vision-master]

Private industry will follow the same CPI

[Cog]

Here is something else for the progressives to chew on while they feel the pain of entitlement cuts. If I thought raising taxes on the wealthy would magically balance the budget, I might give it some consideration. But the reality is, unless we radically define what we expect government to do for us and to us, we are headed for default. Then you will have no safety net whatsoever except private charity. Do you progressives really want to head down that road?

We didn't build up state nanny-ism overnight and its unfortunate the Republican will most likely cave on the issue. But I would let the budget deadline pass if I were them and simply pay the interest on the debt(which we can do) and cut the rest of the federal budget by 40%, (including the military by the way), until we reach a balanced budget. Would that result in massive pain? No doubt it would but we would have something sustainable at the end of it. We managed not to let the recession of 2007 do what it was supposed to by borrowing trillions. Recessions are actually useful if debt is either defaulted or paid off. We did neither and things are much worse as a result.

http://www.investmentrarities.com/best_ ... 2-11.shtml

The total cost of Social Security, Medicare, Medicaid, and other mandatory programs alone will be $2.2 trillion in 2011. Then when you add in the projected $205 billion in interest payments on our national debt in 2011, we will have a budget deficit of $235 billion right there without including any of the government's $891 billion in security and $496 billion in non-security discretionary spending.

[Sixstrings]

What part of balancing a budget escapes you?

The budget won't be balanced. This is all just to get the Republicans to let us get back on the infinite debt wagon.. there will be some cuts, then more debt. If the budget were actually going to be balanced then that would at least be something you could point to.

You seem to think we can just print and borrow our way into taking care of all the entitlements that grow yearly. Time for you to take reality pill.

If you have a nationalist pro-America trade policy and bring jobs back, if we could get out of this guilded age of crazy income distribution ratios and back to a society based on working people making good wages then the country would be better of in so many ways. It's not all about money, it's about a decent and healthy society.

You're more of a Liberterian, I understand that Cog I don't criticize you for it. Maybe you're cool with living in a Tijuana America as long as you have guards and a gated community. I'd prefer a healthier society as a whole. That's where we differ, fair enough.

Better yet tell me where you would cut $1.17 trillion out of the 2010 federal budget to achieve balance.

Raise taxes on the rich. Stop offshoring of corporate headquarters, re-orient American companies back home to America. Make GE and Google start paying some darn taxes (is that asking too much?).

As for cuts, I'm not for cutting the military too much other than getting out of these bankrupting wars. And staying out of new ones. However.. it's really unfair the US shoulders so much of the burden for defending the West. That's the real reason why Canada, Australia, and Sweden can afford social safety nets and we can't -- they're spending money on people, we spend it on cruise missiles. While it's easy to be anti-war, somebody has to be global cop so we just need a more fair arrangement with our allies.

The American elderly shouldn't have to suffer so that France can have Libyan oil.

[newman1979]

When did Washington first learn that that the baby boomer generation would get to 65? Or that life expectancy was longer? These matters have been known for 45 years. Washington had to fund stupid voluntary wars, tax cuts, giveaways to the rich, earmarks for friends, before throwing the old under the truck. CPI changes in 1983 have made SS recipients poverty stricken already. Now food energy and health care inflation is not even recognized as inflation because the Government doesn't want to pay more interest on its $15 trillion debt to SS and Medicare trusts plus public debt. Oil is $118 in the world, so we can expect higher prices here soon. Seniors will have to find jobs to survive and many will not be able to retire in their life. Yes, everybody else will have to save every dime if they ever want to retire as it will take a million or two to retire with .25% interest rates. This is what happens when we elect mediocre politicians over a long period of time. Maybe we deserve this fate, or maybe we elect smarter people that protects our and our children's future better.

[Serial_Worrier]

Good let seniors eat dog food for all I care. My most important priority to to afford another Mac.

[Oakley]

Gee, I didn't see anything about cutting the pay to politicians and bureaucrats. I did see an article that showed Obama paid the White House staff hefty salaries and gave hefty raises.

This deal reinforces in my mind the sociopathic nature of most of the people in government. Yes the federal government is broke. So why is it that Obama not only continued the wars of empire started by Bush, but enlarged the one in Afghanistan and started a new on in Libya.

Ron Paul has proposed immediately ending all foreign intervention (wars), all foreign aid, and closing all military bases on foreign soil (WWII after all did end many decades ago). He suggest that yes we need to end the Ponzi schemes we call Social Security and Medicare, but he wants to do it in a way that is not cruel and heartless as is being proposed by Obama and the Republican leaders. He wants to maintain payments to those dependent on these promises, but discontinue payments to those who have independent incomes that are sufficient to maintain them through retirement. He wants young people to be able to opt out of Social Security and Medicare including opting out of paying the associated payroll taxes. He also wants to end all federal programs that are not strictly authorized by the Constitution such as the FDA, Departments of Agriculture, Education, Homeland Security, Commerce, and others to numerous to mention, most of which are counterproductive. He wants to end the war on drugs and and save the associated costs.

And most importantly, he wants to end the monopoly privilege handed to banks to issue new money by creating it and loaning it out to people, businesses and the government at interest, resulting in a huge transfer of wealth in the form of interest payments from the average man into the pockets of bankers. He suggest that since the federal debt issued to the Federal Reserve Bank was in return for unconstitutional money, that that portion of the federal government debt be canceled; stiff the Federal Reserve Bank. He points out that only Congress has the authority to coin money, and that the Constitutional intent was that this was to be gold and silver coins, as evidenced by the writings of those who wrote the Constitution and the fact that the Constitution prohibits the states from making anything but gold and silver coins legal tender.

There is really no choice but to substantially reduce the federal government in size. How it is done can be rational and as kind as possible, and perhaps the federal government will avoid civil war. But if those Corporate interests and the politicians they control insist on maintaining their privilege at the expense of the majority and continue their system of plunder, then I see little hope to avoid eventual civil conflict far worse than the last civil war. This current proposal is just a continuation of shifting the burden of economic contraction onto the shoulders of the average person. It is a matter of kicking in the teeth those with the least power. It is true that nobody is entitled to anything from the government other than mutual defense against internal and foreign criminals, but it is also true that government has taken wealth from the public under the Social Security and Medicare taxes with the promise of later benefits, which they now are attempting to slyly default upon.

What a bunch of sociopathic con men are those who occupy the seats of power!

[Cog]

What part of balancing a budget escapes you?

The budget won't be balanced. This is all just to get the Republicans to let us get back on the infinite debt wagon.. there will be some cuts, then more debt. If the budget were actually going to be balanced then that would at least be something you could point to.

You seem to think we can just print and borrow our way into taking care of all the entitlements that grow yearly. Time for you to take reality pill.

If you have a nationalist pro-America trade policy and bring jobs back, if we could get out of this guilded age of crazy income distribution ratios and back to a society based on working people making good wages then the country would be better of in so many ways. It's not all about money, it's about a decent and healthy society.

You're more of a Liberterian, I understand that Cog I don't criticize you for it. Maybe you're cool with living in a Tijuana America as long as you have guards and a gated community. I'd prefer a healthier society as a whole. That's where we differ, fair enough.

Better yet tell me where you would cut $1.17 trillion out of the 2010 federal budget to achieve balance.

Raise taxes on the rich. Stop offshoring of corporate headquarters, re-orient American companies back home to America. Make GE and Google start paying some darn taxes (is that asking too much?).

As for cuts, I'm not for cutting the military too much other than getting out of these bankrupting wars. And staying out of new ones. However.. it's really unfair the US shoulders so much of the burden for defending the West. That's the real reason why Canada, Australia, and Sweden can afford social safety nets and we can't -- they're spending money on people, we spend it on cruise missiles. While it's easy to be anti-war, somebody has to be global cop so we just need a more fair arrangement with our allies.

The American elderly shouldn't have to suffer so that France can have Libyan oil.

So in summary, you want to raise taxes by whatever amount we are in deficit. So raise taxes by $1.4 trillion and everything should be cool. Have you really done the math on this? Or do you continue to maintain that deficits don't matter as long as we continue BAU on entitlements?

Now I have given you a link to the 2010 federal budget. Go through the different departments and tell me how much to cut off them. Then tell me how much you want to raise taxes on the rich. A percentage increase will do and I'll run the math for you to see if we can get to a balanced budget using your numbers. Don't be intellectually lazy about this and spin homilies about poor people's pain. Balance the budget your way and I'll be happy to listen. Otherwise, your opinions are no better than what I hear coming out of Washington who don't want to tell the American people the bad news coming at them.

While you are pondering how to solve this budget problem address this issue first:

The total cost of Social Security, Medicare, Medicaid, and other mandatory programs alone will be $2.2 trillion in 2011. Then when you add in the projected $205 billion in interest payments on our national debt in 2011, we will have a budget deficit of $235 billion right there without including any of the government's $891 billion in security and $496 billion in non-security discretionary spending.

Ok what part of social security, medicare, and medicaid do you want to cut? Or perhaps you want to leave it alone and raise some billions through taxes. Let your conscience be your guide and show me how a progressive balances a budget. I will be enthralled.

[Sixstrings]

Ok what part of social security, medicare, and medicaid do you want to cut? Or perhaps you want to leave it alone and raise some billions through taxes. Let your conscience be your guide and show me how a progressive balances a budget. I will be enthralled.

Here's a good op-ed in the New York Times calling for raising SS benefits:

Get Radical: Raise Social Security

AS a labor lawyer I cringe when Democrats talk of “saving” Social Security. We should not “save” it but raise it. Right now Social Security pays out 39 percent of the average worker’s preretirement earnings. While jaws may drop inside the Beltway, we could raise that to 50 percent. We’d still be near the bottom of the league of the world’s richest countries — but at least it would be a basement with some food and air. We have elderly people living on less than $10,000 a year. Is that what Democrats want to “save”?

(snip)

A recent Harris poll found that 34 percent of Americans have nothing saved for retirement — not even a hundred bucks. In this lost decade, that percentage is sure to go up. At retirement the lucky few with a 401(k) typically have $98,000. As an annuity that’s about $600 a month — not exactly an upper-middle-class lifestyle. It’s too late for Congress to come up with some new savings plan — a new I.R.A. that grows hair, or something. There’s no time. We have to improve the one public pension program in place.

(snip)

What does it take to get Social Security up to half the average worker’s earnings? According to the National Academy of Social Insurance, to close the deficit and raise benefits to nearly half of average worker earnings, we would need to find an additional 5 percent of taxable payroll, or find the money elsewhere. If we lift the cap on the payroll tax without paying more benefits to those above it, that gets us 2.32 percent (or a bit less if we slightly increase benefits to the rich). Dedicating revenues from the estate tax at its 2009 levels to Social Security gets another half percent. A few other tweaks, like covering new public employees, add another 0.42 percent. The remainder can be found by raising the payroll tax by roughly 1 percentage point for both employees and employers.

I can hear the argument: It will discourage jobs, blah, blah. While I sympathize with the health costs employers pay (I am an employer, at our tiny law firm), they have had a windfall on pensions. In 1975, when I left law school, around two-fifths of American workers were in defined-benefit plans. Now it’s just a fifth, and dropping. For employers, that’s not the real bonanza.

Retirees today are shortchanged on Social Security because they have been shortchanged on wages for their entire working lives. The labor economist Richard B. Freeman points out that the hourly earnings of workers dropped by 8 percent from 1973 to 2005 while productivity shot up 55 percent or more. The United States is one of the few developed countries where workers are routinely cheated of a share in higher productivity.
http://www.nytimes.com/2011/06/20/opinion/20geoghegan.html

Anyhow I know that's fantasyland.. our "Democratic" president is set to cut out over a hundred billion from Social Security, plus cut $24 billion from disabled war vets. That last one bothers me.. these guys come back with PTSD, lots of traumatic brain injuries. Missing limbs.

Congratulations Cog, your side won.

[Cog]

I'm not interested in what some op-ed writer wants to do. I'm interested in what you want to do. Do you not have a household budget? If you want all the benefits of living in a modern society, you have to find a way to pay for them. Just explain to me how we get to a balanced budget with taxes, spending cuts or a combination of both. You continually moan about how the government is letting the underprivileged down but don't offer a way to pay for their way through life.

This is your chance to take the 2010 budget and tell me how to reach a balance between revenues and expenditures. Its just an exercise that will be beneficial to you. Or you can continue to moan about the unfairness of life. I'm trying to help you here.

[Novus]

The tax code simply needs to re-written to adjust to the fundamental changes going on.

As said a million times even if you tax the rich at 100% of income you still don't solve the problem and that is because the super rich don't really make a lot of income. The super rich make their wealth from capital creation which is taxed at a big fat 0% in the United States. I don't think it is unreasonable for a billionaire to pay a 5% tax on the maintenance of their principle capital regardless of what their "income" is. Someone like Bill Gates or Warren Buffet would have to pay a little over a billion dollars each. Then graduate the scale down to 3% at the $100 million level, 2% at $50 million and 1% at $10 million. Under that no principle capital tax. The middle class still has to pay their income tax though.


The US government budget expenditures of $2.5 trillion is only 1/6th of the entire $15 trillion economy. This is much smaller percentage than other major Industrial nations such as England, France, Germany, Japan.

[AgentR11]

The US government budget expenditures of $2.5 trillion is only 1/6th of the entire $15 trillion economy. This is much smaller percentage than other major Industrial nations such as England, France, Germany, Japan.

To make such a comparison with those countries, you need to include State budgets in with the US Govt budget. A lot of programs that would be considered "national" have their costs split between the two.

[Oneaboveall]

...You're more of a Liberterian, I understand that Cog I don't criticize you for it. Maybe you're cool with living in a Tijuana America as long as you have guards and a gated community...

I wonder how reliable those $10 an hour security guards are going to be when a gated community gets attacked. It'll probably be like Poe's Masque of the Red Death; the same walls that are meant to keep you safe instead trap you inside.

[AgentR11]

I wonder how reliable those $10 an hour security guards are going to be when a gated community gets attacked. It'll probably be like Poe's Masque of the Red Death; the same walls that are meant to keep you safe instead trap you inside.

If you think the grunts stand a chance against the security guys in charge, close in, you're living in a fantasy world. They'll stand their guard boxes, but they won't risk their lives to defend the gate, nor will they commit suicide by trying to take over the enclave. The guys close in are paid much more than a $10/hr wage. They will neither hesitate, nor miss; and the head of family will bring scotch afterwards and ask if anything interesting happened... close security guy, "Not really, just a bit of Darwinian stupidity removal."

This isn't like Hollywood with the gung-ho moron, selling slick to the pasty rich guy. The guys in close are professional, well paid, very loyal, and very vested in their clients security. Unless you're fielding a real, disciplined and trained, military platoon size unit against such an enclave; don't even entertain the thought.