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It remains about the debt

Paul Ryan's budget guarantees an exploding deficit. a failed economy and a draconian killing of Medicare. It's the most cynically polarizing and doomed budget concept since Hoover.
 
TuffaloDeac10 said:
Am I worried about an economy that can't produce growth and jobs because too many people are cashing in interest payments and principle? I dunno, I guess my worries would depend equally on how the private is leveraging or not leveraging or deleveraging at that time. I would not be excited to see households, businesses, and the feds all try to delever at the same time.
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You mean like the slow delever we have all been witnessing the last 5 years? It's all playing out over a long course. Households can't pay their debts, businesses suffer, credit freezes, banks fail, growth halts, governments intervene and try to spend their way out of the problem and take on even more debt . . . We're still witnessing that cycle. Not fun. And it could get worse. Sooner or later the bills have to be paid. And the more resources that go to paying down debt, the less that remains for other things.
 
RJKarl said:
Paul Ryan's budget guarantees an exploding deficit. a failed economy and a draconian killing of Medicare. It's the most cynically polarizing and doomed budget concept since Hoover.
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Yes. Clearly staying to course is a great long term policy choice. Maintain entitlements. Make no meaningful tax reform. Don't change a thing.
 
His "tax reform" is trickle down taxation on steroids which guarantees less revenues. It also ensures harming the economy dramatically by raising taxes on those who can't afford them.

Obama offered over $4T in changes and deficit reduction during the next ten years. His "grand bargain" was scored significantly higher than anything Ryan has put forth.

I'm sorry facts are irrelevant to you.
 
DeacMan said:
You mean like the slow delever we have all been witnessing the last 5 years? It's all playing out over a long course. Households can't pay their debts, businesses suffer, credit freezes, banks fail, growth halts, governments intervene and try to spend their way out of the problem and take on even more debt . . . We're still witnessing that cycle. Not fun. And it could get worse. Sooner or later the bills have to be paid. And the more resources that go to paying down debt, the less that remains for other things.
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For households, yes. I'm honestly not sure about governments. The United States retired its debt just once and the outcome was the panic of 1837... so I'm not sure that the appropriate long-run goal is paying off the debts. I think the proper goal might be as low as having enough nominal GDP growth to maintain the debt at some "suitable" % of GDP, which may or may not vary over time (it probably varies).
 
The whole "passing on debt to our kids" crap is a canard. Our kids aren't going to be any more willing to raise taxes than we are. It's something for Republicans to say while refusing to chip in to pay the debt now. You only hear Republicans complain about the debt during Dem administrations.
 
TuffaloDeac10 said:
For households, yes. I'm honestly not sure about governments. The United States retired its debt just once and the outcome was the panic of 1837... so I'm not sure that the appropriate long-run goal is paying off the debts. I think the proper goal might be as low as having enough nominal GDP growth to maintain the debt at some "suitable" % of GDP, which may or may not vary over time (it probably varies).
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The problem is what we are doing is not at all sustainable. In fact it is patently stupid. Out just this week from the oft cited CBO.

WASHINGTON: US debt is on track to double the size of the entire economy in the next 25 years, the non-partisan Congressional Budget Office reported on Tuesday in its grim view of America's fiscal future.

The CBO said that under present policy, in which current tax rates are upheld and lawmakers do not curb entitlements, the portion of national debt held by the public would soar from 70 percent of GDP as forecast for the end of 2012 to 100 percent of GDP in just over a decade.

"After that, the growing imbalance between revenues and spending, combined with spiralling interest payments, would swiftly push debt to higher and higher levels," the CBO said in its 2012 Long-term Budget Outlook.

"Debt as a share of GDP would exceed its historical peak of 109 percent by 2026, and it would approach 200 percent in 2037."
 
But your support the Ryan Plan which cuts revenues dramatically. Thus you aren't serious about deficit reduction.
 
RJKarl said:
His "tax reform" is trickle down taxation on steroids which guarantees less revenues. It also ensures harming the economy dramatically by raising taxes on those who can't afford them.

Obama offered over $4T in changes and deficit reduction during the next ten years. His "grand bargain" was scored significantly higher than anything Ryan has put forth.

I'm sorry facts are irrelevant to you.
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Obama pulled that deal off the fucking table as soon as it was presented to his "caucus". He has shown zero leadership in this mess. His proposal right now is:

- increase taxes on income over 1 million USD - which raises a paltry sum
- no meaningful reforms to entitlements.
- a 1% reduction in defense spending.
- an overall increase in spending.

That is his proposal. Kudos for actually making a proposal. It is more than the Senate has managed in the last 3 years.
 
The Republicans best shot is to emphasize the economy, and so focusing on the debt is as good a bet as they have. Holding the line and reducing the debt, which are very important, however, are not going to solve the problems of a stagnating economy.
 
RJKarl said:
But your support the Ryan Plan which cuts revenues dramatically. Thus you aren't serious about deficit reduction.
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Per the CBO's review of Ryan's budget, federal revenues would double over the next 10 years from 2.4 trillion to 4.6 trillion. Or do you just refer to the CBO when it supports your world view?

Fair enough to debate his individual rate reforms - which include simplifying the code, removing deductions, etc. Most central to his plan IMO is lowering the corporate tax rate - something Obama himself will eventually do because our corporate taxes are the highest in the world. And, to be clear, the CBO doesn't take into account potential growth that would be associated with lowering the corporate tax rate by 10% - to the international average (so we can compete) - of 25%. You lower that marginal rate and you'll stimulate some increased production. So the producer keeps more of what it produces. In turn there is incentive to produce more and that in turn increases savings and investement. In turn we get more jobs and more growth.
 
and over the next ten years the GDP will grow dramatically as well as there will be less unemployment. If nothing is changed revenues will be greater.
 
DeacMan said:
The problem is what we are doing is not at all sustainable. In fact it is patently stupid. Out just this week from the oft cited CBO.

WASHINGTON: US debt is on track to double the size of the entire economy in the next 25 years, the non-partisan Congressional Budget Office reported on Tuesday in its grim view of America's fiscal future.

The CBO said that under present policy, in which current tax rates are upheld and lawmakers do not curb entitlements, the portion of national debt held by the public would soar from 70 percent of GDP as forecast for the end of 2012 to 100 percent of GDP in just over a decade.

"After that, the growing imbalance between revenues and spending, combined with spiralling interest payments, would swiftly push debt to higher and higher levels," the CBO said in its 2012 Long-term Budget Outlook.

"Debt as a share of GDP would exceed its historical peak of 109 percent by 2026, and it would approach 200 percent in 2037."
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I don't think we live in a world in which structural reform of entitlement programs is incompatible with short-term stimulus through infrastructure spending or tax rebates or any other thing. Though I may mis-assess political realities and be wrong.
 
TuffaloDeac10 said:
I don't think we live in a world in which structural reform of entitlement programs is incompatible with short-term stimulus through infrastructure spending or tax rebates or any other thing. Though I may mis-assess political realities and be wrong.
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In other words, you can envision meaningful entitlement reform and a redeployment of some newly available funds to things that would promote some form of growth.

Wish I was as optomistic as you. We can't even get the eligibility age for SS adjusted.
 
DeacMan said:
In other words, you can envision meaningful entitlement reform and a redeployment of some newly available funds to things that would promote some form of growth.

Wish I was as optomistic as you. We can't even get the eligibility age for SS adjusted.
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No I envision meaningful entitlement reform (long-run problem w/ long-run solution) alongside new borrowing to promote growth (short-run solution to short-run problem). It's possibly even more optimistic than what you think I think.
 
RJKarl said:
and over the next ten years the GDP will grow dramatically as well as there will be less unemployment. If nothing is changed revenues will be greater.
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The GDP will not be able to grow as dramatically if we are forced to use more and more and more of our resources to service our debt.

What part of the CBO's report this week is difficult to comprehend. We are on a path to ruin if "nothing is changed". That's what the report said.
 
TuffaloDeac10 said:
No I envision meaningful entitlement reform (long-run problem w/ long-run solution) alongside new borrowing to promote growth (short-run solution to short-run problem). It's possibly even more optimistic than what you think I think.
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I'm far more skeptical than you when it comes to any type of entitlement reform. Any proposal to do so is met with massive resistance. SB doesn't disagree with your vision. But I bet both of them are a heck of a lot more skeptical than you at present. FWIW, they both have lauded Ryan - not because they share exactly the same vision but because he at least has the courage to face the problem and put something on the table. Our leaders generally have abandoned responsibility. And our President is chief among the politicians who refuses to call a spade a spade. At its heart this is much more an issue of spending (how much and how) than it is of revenues. Yet all he wants to talk about is raising 50 billion in taxes to solve a much more massive problem. It's so sad its funny.
 
The problem, I think, is encapsulated by the Mittster:

"HALPERIN: You have a plan, as you said, over a number of years, to reduce spending dramatically. Why not in the first year, if you’re elected — why not in 2013, go all the way and propose the kind of budget with spending restraints, that you’d like to see after four years in office? Why not do it more quickly?

ROMNEY: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course. What you do is you make adjustments on a basis that show, in the first year, actions that over time get you to a balanced budget."

Right now, the patient needs medicine. The patient does not need medicine for all time. But discourse generally stays on the level of asking if the medicine itself is intrinsically good or bad, and not on diagnosing the patient.
 
And that is also an argument for letting the Fed take the lead on stabilization, but to do that I think we'd need to change its mandate to NGDP targeting instead of its fake dual mandate on inflation and unemployment.
 
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