S&P Downgrades U.S. Outlook to Negative for First Time in 70 Years

[Tani Coyote]

I already earned my piece of the pie--I don't want everybody else to get their hands on it. I did the work, it's my slice.

You seem to be talking about welfare.

You're conveniently forgetting the Republicans' sacred cow: the army. This is what I meant by both sides wanting their pie and wanting to starve someone else of their share. Rather than agree to cut everything, they squabble over cutting only one or two things. It's why nothing can be done...

Republicans say a bloated military is necessary for our interests/protection. Democrats say a bloated welfare state will stimulate the economy by putting money in more people's pockets.

You can only bloat so much before you explode. Or implode as the case might be here.

 

[deanej]

They should handle the budget the way they handled closing military bases a few years ago: have an independent panel come up with the it, and vote on it as a whole, with amendments banned.

 

[Ajidica]

Reps will exchange tax rises for spending cuts on Dem projects. That's reason to be hopeful, and it's disappointing that S&P have taken such a blunt view.

Republicans agreeing to tax increases is not going to happen. That is the absolute cornerstone of their entire economic policy. As soon as Bush II came into office, he wiped away the budget savings Clinton had made by issuing tax breaks.
There is no chance that the Republicans will raise taxes until it has been made virtualy non-existant by loopholes, and the dems will consider that a victory.

 

[Colonel]

I second the statement about the S&P being stupid for releasing this now, a year or two ago this would have made sense. We finally get to talking about deficit reduction and then you give negative outlook. Dumb---es

 

[Cutlass]

You seem to be talking about welfare.

You're conveniently forgetting the Republicans' sacred cow: the army. This is what I meant by both sides wanting their pie and wanting to starve someone else of their share. Rather than agree to cut everything, they squabble over cutting only one or two things. It's why nothing can be done...

Republicans say a bloated military is necessary for our interests/protection. Democrats say a bloated welfare state will stimulate the economy by putting money in more people's pockets.

You can only bloat so much before you explode. Or implode as the case might be here.

The thing you have to keep in mind is that the safety net has been getting steadily more stingy in all of the years that the deficit has been exploding. Reagan, Clinton, and Bush all cut welfare. So claiming that expanding entitlements is the problem is not something that can be justified. The entitlements are stingier than ever. What has changed is that more people fall into the categories that are eligible for entitlements. There are more poor, and more old, people. The expansion of poor people is caused, largely, by Reaganomics. The expansion of the old we knew about, and poorly planned for. The only real expansion of entitlements is the Medicare drug plan that the Republicans and Bush did in the Aughts, and refused to either make provisions to pay for or to control the costs of it.

So other than Medicare, entitlements and social spending really isn't the cause of the problem at all. And Medicare needs comprehensive health care reform in order to control its costs.

 

[Tani Coyote]

The thing you have to keep in mind is that the safety net has been getting steadily more stingy in all of the years that the deficit has been exploding. Reagan, Clinton, and Bush all cut welfare. So claiming that expanding entitlements is the problem is not something that can be justified.

This is why I'd hate to be a Republican politician since they increasingly have less and less to run on in reality. Medicare, Medicaid, and SS may make up 43% of the budget, but that has to cover everybody, whereas defense spending at 20% only has to cover 2.5 million soldiers. Now, there are lots of arguments in favor of why the defense spending needs to stay stable or even increase, but in reality, is it going to hurt us to be able to destroy the world two times rather than three?

The entitlements are stingier than ever. What has changed is that more people fall into the categories that are eligible for entitlements. There are more poor, and more old, people. The expansion of poor people is caused, largely, by Reaganomics. The expansion of the old we knew about, and poorly planned for. The only real expansion of entitlements is the Medicare drug plan that the Republicans and Bush did in the Aughts, and refused to either make provisions to pay for or to control the costs of it.

Why plan for the future? After all, we won't be around to see it...

So other than Medicare, entitlements and social spending really isn't the cause of the problem at all. And Medicare needs comprehensive health care reform in order to control its costs.

Very true, but unfortunately, nobody wants to cut the military too so we don't need to cut everything as much. Conservatives want everything to come out of social programs.

 

[Cutlass]

This is why I'd hate to be a Republican politician since they increasingly have less and less to run on in reality. Medicare, Medicaid, and SS may make up 43% of the budget, but that has to cover everybody, whereas defense spending at 20% only has to cover 2.5 million soldiers. Now, there are lots of arguments in favor of why the defense spending needs to stay stable or even increase, but in reality, is it going to hurt us to be able to destroy the world two times rather than three?

Electorally wise, the Republicans aren't doing too bad despite that. They are skilled at spinning it all to their advantage with the voters.

Why plan for the future? After all, we won't be around to see it...

The world's not going anywhere. And neither is the human race or the nation. So there's a need to plan for it. If you give a damn about your old age. If you give a damn about your children and grandchildren. If you give a damn about the country, the species, the planet.

Only if you give a damn about nothing, or live in a delusion, should you not think about the future.

Very true, but unfortunately, nobody wants to cut the military too so we don't need to cut everything as much. Conservatives want everything to come out of social programs.

Even that is not the issue. Control health care costs, adjust for demographic changes, and then raise taxes for the rest. There are things that can be cut from the budget, but they don't really add up to all that much.

 

[Whomp]

The thing you have to keep in mind is that the safety net has been getting steadily more stingy in all of the years that the deficit has been exploding. Reagan, Clinton, and Bush all cut welfare. So claiming that expanding entitlements is the problem is not something that can be justified. The entitlements are stingier than ever. What has changed is that more people fall into the categories that are eligible for entitlements. There are more poor, and more old, people. The expansion of poor people is caused, largely, by Reaganomics. The expansion of the old we knew about, and poorly planned for. The only real expansion of entitlements is the Medicare drug plan that the Republicans and Bush did in the Aughts, and refused to either make provisions to pay for or to control the costs of it.

So other than Medicare, entitlements and social spending really isn't the cause of the problem at all. And Medicare needs comprehensive health care reform in order to control its costs.

Entitlements are where the biggest cuts need to happen along with higher taxes.

It's not even a question what needs cutting when you consider we're spending 44% of budget on three programs.

For perspective, by completely eliminating discretionary spending on housing, education, agriculture and infrastructure doesn't eliminate the deficit.

 

[Ajidica]

How much of that increase expense is due to an outdated structure which is driving up costs?

 

[Whomp]

How much of that increase expense is due to an outdated structure which is driving up costs?

You mean like people living longer? I'd say demographics and age have a ton to do with it.

 

[Ajidica]

So if we adjusted Medicare to start later and spend less cash on making sure Gramma Betty gets her bypass surgery and lives another 3 months Medicare would be alot closer to reaching solvency?

Besides the obvious (can you hear 'Death Panels'?) problems to getting a reform like this done, are there any things that would make it especialy difficult?

 

[Cutlass]

Entitlements are where the biggest cuts need to happen along with higher taxes.

It's not even a question what needs cutting when you consider we're spending 44% of budget on three programs.

For perspective, by completely eliminating discretionary spending on housing, education, agriculture and infrastructure doesn't eliminate the deficit.

But it is not entitlements as a whole. It is one entitlement. And that one needs to be controlled by controlling the costs of the health care sector as a whole. Not by simply cutting off access to medical care, the way the voucher plan is designed to do. All the others, Social Security isn't that big of a fix, if they can be bothered to do it. And the other parts of entitlements would do far more harm than good to cut.

All the rest is just an excuse to make the poor and middle class poorer so that the rich can get richer.

 

[Whomp]

So if we adjusted Medicare to start later and spend less cash on making sure Gramma Betty gets her bypass surgery and lives another 3 months Medicare would be a lot closer to reaching solvency?

Only 1 in 50 Americans needed Medicaid when it was first created in 1965, 1 in 6 Americans receives Medicaid now. It's the bigger problem...

Besides the obvious (can you hear 'Death Panels'?) problems to getting a reform like this done, are there any things that would make it especialy difficult?

You mean difficult like having promises that can't be kept every two years? Third rails are difficult.

But it is not entitlements as a whole. It is one entitlement. And that one needs to be controlled by controlling the costs of the health care sector as a whole. Not by simply cutting off access to medical care, the way the voucher plan is designed to do. All the others, Social Security isn't that big of a fix, if they can be bothered to do it. And the other parts of entitlements would do far more harm than good to cut.

All the rest is just an excuse to make the poor and middle class poorer so that the rich can get richer.

I'm talking about slashing all three programs along with higher taxes. $2.2 trillion in revenues do not match $3.5 trillion in spending. It's worse when we use discounted net present value of current spending and our demographic trends.

Without massive restructuring of these three then we get higher borrowing costs to fund them and a currency that continues to become worth less and less. Pretty simple to understand.

 

[Cutlass]

I'm talking about slashing all three programs along with higher taxes. $2.2 trillion in revenues do not match $3.5 trillion in spending. It's worse when we use discounted net present value of current spending and our demographic trends.

Without massive restructuring of these three then we get higher borrowing costs to fund them and a currency that continues to become worth less and less. Pretty simple to understand.

I'm not denying that SS needs changes. But you yourself have said that they are not extreme ones if done sometime soon. But the issue with Medicare is that it is medical costs that need to be controlled. Not just cutting the budget. If you just cut the budget without controlling the costs, then the only other option is to kick people off it or deny coverage. So any proposal that is not by design aimed at the costs of medical care is worthless in the long run. You are not going to control medical costs by stopping the growth of Medicare spending. Even assuming that Congress stuck to its guns for a change, which it won't, because that would mean wholesale denial of coverage, it wouldn't control the costs everywhere else the government budget touches medical care.

 

[Whomp]

Social Security will fix itself because it does not take on debt. Once all the funds are exhausted it's pay as you go. Not a good outcome but until it's fixed that's how it will operate.

All I'm trying to do is communicate the severity of the problem since that's what people do who are trying to fix a problem. Even little ones like how we average 28% of all Medicare spending in the last year of life and 12% in the last two months. Bad deal for everyone.

 

[Ajidica]

Even little ones like how we average 28% of all Medicare spending in the last year of life and 12% in the last two months.

Perhaps if Medicare included more end of life counseling this total would be reduced. Gramma doesn't need her third bypass operation!

 

[Cutlass]

Sure, I think that everyone gets that it is a critical problem. But the approach to dealing with it will impact the success at dealing with it. And beyond that, it would be wrong to ignore the equity of dealing with it. It's not like the middle class or the lower class gained any benefit from running up the debt. And yet are being told they have to pay the entire cost.

 

[Janusi]

Ryan's plan is a start only in an insane asylum. It doesn't do anything for the deficit and its main objective is ensuring another trillion dollars find their way into the pockets of the wealthy.

The main problem is that everybody is talking about deficits when the actual problem is a weak economy coupled with even weaker financial regulations. S&P shouldn't even be in business anymore, who in their right mind would still pay for their assessments after all? But here they are, still up to their old tricks.

But nobody's talking about investing in the economy, they're quibbling on how much should be taken out. The best thing that can realistically happen now, with the lunatics running the House, is nothing. And that will only until whatever bubble the masters of the universe are inflating right now bursts.

 

[GamezRule]

We need to balance the budget. Cutting domestic spending will not do that. We need to turn the economy around, half military spending, reduce health costs, and raise taxes.

 

[JerichoHill]

Entitlements are where the biggest cuts need to happen along with higher taxes.

Agreed.