SGOTM 13 - ChokoMisfits

[da_Vinci]

I have had much cause to over-drink scotch recently.

Want a depressing job? Be a US Gov't Economist! It's like watching the train coming at you but being unable to do anything about it.

It could easily be fixed though Ronnie. Check out CFRB.org, play with their calc. Easy really. Unwind Bush tax cuts, unwind the wars, raise age reqs on SS and Medicare. That gets you nearly there.

Le Sigh

CIV!!!!!

btw, very happy to be teaming with ya Vinci. I remember our rivalry in the GOTM!

I'd agree with just about all of the econ suggestions.

1. Index retirement age to life expectancy. One quick look at our problem: In modern times, go to school for 25 years, retire at 65 and live off everyone else's productivity for 20 more years.

45 years of being taken care of, 40 years of productive work. Problematic (that doesn't even get to health care cost issues).

2. Index increases in the cap on FICA earinings to economic growth. Seems to me we can't let the rich not pay on huge swaths of their income, if we want a safety net. But the rate of increase in the cap should be related to economic growth, so the negative impacts of the additional cost to employers is mitigated by growth.

3. Why not have a tax structure something more like the last time we had budget surpluses ... when was that again? Oh yeah, the start of the Bush II presidency.

Then figure out what you have to cut.

Because (am I right, JH?), some budget cuts will kill more jobs than some tax increases. Republicans mindlessly think that all spending cuts return money to taxpayers, and thus do not reduce demand (which is what really drives job creation, not "job creator" wealth: if demand is there, cash in the hands of employers helps, but if no demand, no amount of employer cash creates jobs).

But when you cut for deficit reduction, what is reduced is borrowing, not taxpaying. So that is some trillions of dollars of US demand not being subsidized by China. The certainty that cuts hurt is the observation of how vigorously Republican reps will oppose military base closures in their home districts.

So while I think we have to cut spending (it is unsustainable at present), we can't ignore the demand reduction consequences and we can't not look at revenue increases.

dV

 

[da_Vinci]

"Constitution of the United States

AMENDMENT XIV

Passed by Congress June 13, 1866. Ratified July 9, 1868.

Section 4.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned...."

Any debts we have made in the past are guaranteed in our constitution.

Hmm, well, the fact that a debt is valid does not assure it gets paid (bankruptcy, forclosure).

Even if one interprets the ammendment to assure payment, all it means is that we have to pay "debt", which might mean promissory notes, bonds, etc. If we are forced to pay that by the ammenedment but don't have borrowing power, then other "non-debt" obligations would suffer, like military salaries, contract payments to Haliburton and KBR (among others), social security and unemployjent benefits, etc. The ammendment would essentially say "Pay China First"

dV

 

[Grifftavian]

R1, dV, JH -

Although I generally agree let's not scare off our non-American team mates before the new game begins

 

[adrianj]

Meh.

This stuff reaches our 6 o'clock news as well. But us kiwis are more concerned about the rubbish $USD/$NZD exchange rate. Come on America, sort it out! And buy our milk!

 

[neilmeister]

But don't buy the apples

 

[Ronnie1]

Back to the debt debate for a moment....

In 1945, our debt was ~125% of our GDP, and we paid it all off in 6 years.

IMO, the actual amount of debt is not our real problem. The hole we have have dug is actually tied to the production of goods. We (the US) just don't build anything anymore. The only real way to create wealth/add value is through production. Turn a stick into a shovel handle as a rudimentary example! Unfortunately, we have have shipped most of our manufacturing jobs over seas to benefit the bottom line of the multinational corporations, but at the expense of the American worker. We also signed trade agreements that do not benefit us in any way. Allowing "them" to build it with cheap labor and then ship it back to us with tariff free is ludicrous.

 

[leif erikson]

Glad you are all solving the crisis.

Might suggest this discussion belongs in the Off-Topic section of the forum. Getting away from SGOTM a bit.

 

[Ronnie1]

This is a public thread now...but once upon a time it was somewhat private.

Everything is somewhat off topic at this point is it not?

 

[Sleepless]

Aah why can't "real life" be like a game of Civ. Problems easily solved or reboot/restart lol

 

[vranasm]

nice discussion our american friends...

I think there is one problem you run in... and that is the conflict between consumer and worker...

you as a consumer surely want that cheap stuff from China, don't you?
OTOH it's clear that
you as a worker for sure don't want China build all the crap...

Now there is one big question how to solve this big dilemma?
Are you already at the point that he only way to start growth is to fall down with living standard first a bit? That surely will involve some form of war.

Here in Czech Rep. it is said that after the 1990 where we switched a bit the economy we at first dropped down by around 30% living standard of everyone to grow eventually back.
It was done by the (now president) V. Klaus when he mentioned something along the lines of "we won't subsidize food anymore" and the prices jumped like 2x, but the income stayed of course and eventually grew.
Then there was the phase of big privatization of everything, since before everything was owned by country.

Btw such jump would eventually solve your debt issue and make a lot of angry Chinamen... they are the biggest holder of dollar bonds.

 

[da_Vinci]

Actually, our debt to China is our deterrent to war. We owe them too much money for them to attack us!

Sorry, leif!

dV

 

[da_Vinci]

Aah why can't "real life" be like a game of Civ. Problems easily solved or reboot/restart lol

Or spawning a GM ...

dV