A hypothetical IMF loan to the US.

[piece-itpete]

Take for the sake of conversation that we no longer had the world reserve currency and the reality of everyone else's currency applied to us.

Being basically broke, we turn to the IMF. What do they say?

Based on what I've read over the years they require a couple of things:

A balanced budget. For real, no smoke and mirrors, true austerity.

Free market reforms. A boatload of regulations and restrictions out the window.

Transparency, which we may have already. But I wonder if we'd be up to snuff completely.

Just thinking out loud.

Pete

[Fast_Eddie]

Well we sure don't have a balanced budget. We did. But we don't now.

[piece-itpete]

In reality, we have not had a balanced budget since Eisenhower. Clintons surplus is a farce. It's that pesky 'spending the ss' thing again.

http://www.geldpress.com/2008/07/us-budget-reporting-deception/

Pete

[Fast_Eddie]

Hum. Guess we haven't lowered taxes enough.

[noonereal]

Hum. Guess we haven't lowered taxes enough.

bush lowered taxes, why isn't the budget balanced?

[piece-itpete]

The last big increase was in ss withholding, to cover future payouts.

Pete

[noonereal]

The last big increase was in ss withholding, to cover future payouts.

Pete

gee, maybe we should not have spent the SS surplus on other things

[Fast_Eddie]

The last big increase was in ss withholding, to cover future payouts.

Pete

We're on the same page Pete, though we may disagree on a solution. Thing is, you're never going to get anyone elected who says "we need to kill (or significantly cut) Social Security". It's just not going to happen. So, we need to raise taxes to pay for it. Thing is, that's not going to get you elected either. So you have to...

Well, I'll let you fill that in. First off, do you agree with the above assumptions and if so, how do you fill in the end of that sentance?

Take care,

Ed

[piece-itpete]

gee, maybe we should not have spent the SS surplus on other things

We are in absolute agreement.

We're on the same page Pete, though we may disagree on a solution. Thing is, you're never going to get anyone elected who says "we need to kill (or significantly cut) Social Security". It's just not going to happen. So, we need to raise taxes to pay for it. Thing is, that's not going to get you elected either. So you have to...

Well, I'll let you fill that in. First off, do you agree with the above assumptions and if so, how do you fill in the end of that sentance?

Take care,

Ed

Agreed that ss is a big problem. I'll never join AARP.

Me personally filling in? Something like ....stop increasing spending. At least.

In that I know the IMF would concur. I can see why the small nations would be a bit bitter.

The overall populace, including the politicians? They've already answered it: ....print money till we run out of paper. :)

Or is that :(

Which the folks who argued against a democracy back at the beginning of our country would say 'I TOLD you so!!'

Pete

[noonereal]

We are in absolute agreement.





Great, so you are for tax increases.

[piece-itpete]

Hey, you didn't say that! :eek:

;)

Pete

[Charles]

Of course they'll loan it to us. Float a new note, sign on the line, only thing that matters is the global bankers get their juice.

Besides, the less than stellar dollar is still backed by plutonium...at least for the time being.

Chas

[Fast_Eddie]

Yeah, I'm sorry, but we need to raise taxes. At least that's what I think. We can't just keep digging this hole and we can't cut anything that will make a significant difference.

[piece-itpete]

Didn't we just spend a tril on the porkulus package?

Pete

[Fast_Eddie]

Didn't we just spend a tril on the porkulus package?

Pete

The point I keep trying to make is that you have to look at it as a percentage of the whole. Sure, we can cut here and there. But it won't solve the problem. It's like saying "I can't make my car payment" and deciding the solution is to stop spending money on salt. I mean, you're spending like $6 a year on salt! How can you waste that when you can't make your car payment. At the same time you're ignoring that you live in a house you can't afford. You either have to make more money or move.

That's what we're looking at. We either need to raise taxes or stop spending so much on military, social security, medicade and medicare. Of those, military spending is the largest single hunk that can be easily adjusted. Cutting 10% out of that *would* make a difference. But we keep focusing on marginal things. Either cut it or pay for it.

Unfortunately, for a long while, we've elected people who say they'll do that, but all they do is lower taxes. They don't cut the costs. Say what you will, that's worse than tax and spend. Don't tax but still spend is going to ruin us much faster.

Take care,

Ed

[piece-itpete]

I disagree that 1 tril is salt. The 09 budget was 3.1 tril, that makes 1 32%!!

It's easy to target the military but that is the last thing to cut, our bipartisan foreign policy since ww2 shows that, I think.

Pete

[Fast_Eddie]

I disagree that 1 tril is salt. The 09 budget was 3.1 tril, that makes 1 32%!!

It's easy to target the military but that is the last thing to cut, our bipartisan foreign policy since ww2 shows that, I think.

Pete

32% for one year. But I don't think we'll do it every year.

Whatever. We can argue the stimulus. But it's done. We can't use that as a solution now and it's not what got us into this mess. Moving forward we have the same expenses year in and year out. And you demonstrate my point. No on wants to cut anything. So we have to raise taxes. Simple as that. There's no two ways about it.

When Ronald Regan told people they didn't have to pay taxes (I know, that's not what he said. But that's what people heard) and showed Republicans that it was a message that would get them elected he began killing America. When it's all over and we work for the Chinese we can look back and say Ronald Regan did it.

[noonereal]

When Ronald Regan told people they didn't have to pay taxes (I know, that's not what he said. But that's what people heard) and showed Republicans that it was a message that would get them elected he began killing America. When it's all over and we work for the Chinese we can look back and say Ronald Regan did it.

QFT




it is what it is

[piece-itpete]

So it's Reagan's fault :hdscrtch:

Pete

[Fast_Eddie]

Yes. Reagan, in fact, has maybe inflicted more harm on this country than any other individual in history.

He sold the idea that we could cut taxes but maintain services. It didn't work. He sold the idea that deregulation would lead to economic prosperity. We've seen that fall apart in the last couple of years. Shoot, we've seen it for a while. I guess Enron was the beginning of that. Economically, Reagan was a disaster for America and we're only now starting to pay the bill. Except we're not paying it because people *still* believe we can spend more and have lower taxes.

But that's just the beginning. Reagan built the Islamic extremist regime in Afghanistan. His argument was that it would be the death blow to the U.S.S.R. But reality is they were already doomed. Their economy didn't work and they continued to spend ever more on their military (sound familiar?) He let Pakistan get the bomb and sent weapons to Bin Laden. We're paying the bill for that now too and will be for generations.

The fact is that history will judge Reagan pretty harshly. In fact the tide is beginning to turn. The Republicans are looking to distance themselves from the Reagan legacy and find new ideas. But his influence will continue to lead their marketing campaign. His great lie about taxes will continue to get them elected and we'll dig much deeper before we all realize we were conned.

Take care,

Ed

[piece-itpete]

Wow, I guess Reagan was a lot more powerful than most Presidents, to accomplish all that singlehandedly ;)

So, why haven't the Dems raised taxes yet?

Pete

[Fast_Eddie]

Wow, I guess Reagan was a lot more powerful than most Presidents, to accomplish all that singlehandedly ;)

So, why haven't the Dems raised taxes yet?

Pete

Reagan was a masterful politician and the first one ruthless enough to knowingly mislead Americans into believing they could have something that was too good to be true. But he didn't do it alone. He had plenty of help. Reagan also wasn't overly concerned with doing things in a manner you might call "legal". Ask Ollie North about that.

Why haven't the Democrats raised taxes? I can only guess it's because they like their jobs and realize that people still believe Reagan's big lie. "I'm going to raise your taxes" isn't a strong line for someone trying to get elected.

Take care,

Ed

[Fast_Eddie]

Here's a pretty good analysis of how Reagan caused our current economic crisis.

http://hnn.us/articles/53527.html

Found another good one:

http://www.nytimes.com/2009/06/01/opinion/01krugman.html?_r=1

[Charles]

Reagan was a masterful politician and the first one ruthless enough to knowingly mislead Americans into believing they could have something that was too good to be true. But he didn't do it alone. He had plenty of help. Reagan also wasn't overly concerned with doing things in a manner you might call "legal". Ask Ollie North about that.

Why haven't the Democrats raised taxes? I can only guess it's because they like their jobs and realize that people still believe Reagan's big lie. "I'm going to raise your taxes" isn't a strong line for someone trying to get elected.

Take care,

Ed

I have to admit, saying "I'm going to raise your taxes" is pretty much DOA.

Never heard of the HNN, Krugman is left leaning economist. While he has a viewpoint, it is not the Rosetta Stone. Economics is such a difficult subject that it leaves not only the prophets, but the Monday morning quarterbacks with egg on their face.

There is a school of thought, by credible "smart guys", who can make an impressive argument that FDR prolonged the depression and only WWII brought it to an end.

Who knows what the answer is. Kinda like raising teenagers...you can talk to one and get results, you can't kick another one's ass enough to keep him from stealing your car. And six months later you will probably have to change tactics on both.

In other words, you need to remain fluid.

What very little I understand about Keynesian economics is that during hard times you open the public tap to stimulate the economy. Tax cuts, fire up the printing press, etc. But I also believe that Lord Keynes advocated filling the hollow tree full on nuts while times are good.

Saving, I believe it's called.

Sadly, a point lost on both parties, not to mention the world stage.

I'm not going to get this perfect, but I'll give it my best shot. One of the Rothschilds was quoted as saying, "Let me control a nations currency, and I care not who makes the laws."

Who knows, I for sure don't. Dow Jones has went up 50% from it's low, gold's went up, what 10/15% from it's high. Don't forget, gold is a commodity.

Even the "Oracle from Omaha" admits that we're into uncharted territory. And lost a ton of money proving it.

Making this mess political is missing the point. No one has the answer. Hold your cards tight to your vent, bet light, and wait until your luck changes...it you have the time.

Ain't the first time something like this has happened, and it won't be the last.

May Lady Luck be your Mistress,

Chas

[merrylander]

It surely will not be the last time it hits the fan as long as we let those thieves at Wall Street run unchecked. As for economists (my son majored in commerce) I would as soon believe a tea leaf reader or some medium with a crystal ball.

[Fast_Eddie]

Good post Chas,

I certainly tend to agree that Keynesian economics seemed to be doing a pretty good job keeping thing moving along. Sure, there were good times and bad. But the current situation started with the massive deregulation in the 80s and in the admittedly brief time we've traveled this road things seem to be considerably less stable. I don't think it's a huge leap to say "maybe we should revisit that". One thing does seem quite clear- the assumption that markets and corporations will "self regulate" in a more open environment seems to have been incorrect. Reagan was just wrong. It didn't work. But the great tax lie is so strong we'll have a very difficult time getting people of a different mind back in office. "We need to be responsible with our money" is the exact line that kept Republicans *out* of power for so long. Now they've abandoned it entirely and instead promise everything under the sun.

Well, maybe Hu Jintao will figure it all out for down the road a bit.

Good Day Comrade!

Ed

[piece-itpete]

We are considerably more wealthy today as a society than before Reagan took office. And what, the last 25 years existed in a vacuum?

It surely will not be the last time it hits the fan as long as we let those thieves at Wall Street run unchecked. As for economists (my son majored in commerce) I would as soon believe a tea leaf reader or some medium with a crystal ball.

Now that I can agree, QFT :)

Pete

[merrylander]

We are considerably more wealthy today as a society than before Reagan took office. And what, the last 25 years existed in a vacuum?
Pete

Correction, some people are considerably more wealthy, most of the middle class and below are marching in place at best. The only good thing to come out of all of this mess is the drop in the dollar. It has effectively given me a 25% raise in my Bell Canada pension, the $CDN is now at $0.9745.;)

[piece-itpete]

Correction, some people are considerably more wealthy, most of the middle class and below are marching in place at best. The only good thing to come out of all of this mess is the drop in the dollar. It has effectively given me a 25% raise in my Bell Canada pension, the $CDN is now at $0.9745.;)

Congrats on your raise!

When I was young, most still had 1 tv and 1, maybe 2 cars.

And the house size! Whoa. In light of this I don't see how things are the same or worse.

And the poor, back when I first moved to the hood no one had AC, on a hot day everyone was outside. Now so many have AC on a hot day there isn't many out at all.

Pete

[Twodogs]

Congrats on your raise!

When I was young, most still had 1 tv and 1, maybe 2 cars.

And the house size! Whoa. In light of this I don't see how things are the same or worse.

And the poor, back when I first moved to the hood no one had AC, on a hot day everyone was outside. Now so many have AC on a hot day there isn't many out at all.

Pete

Exactly Pete, the "middle class" today has things light years better than they did 50 years ago. My Dad was a Union guy and made a decent living, but we never had two cars, central air, etc.. I wish another "Regan" would emerge from the Republican Party and save this country again. I'm afraid though, that Obama has done more permanent damage in 10 months than Carter did all told.:(

[merrylander]

All of that did not start with Reagan, most of the improvement in living conditions started after WW II with the GI Bill getting us into the technology forefront. People were building larger houses before he took office.

Only reason we have AC is because right now the Heat Pump is keeping the lousy wet 46 degree temps outside. When it get hotter we reverse it.

We need another Reagan like we need a round of the bubonic plague.

[Charles]

Good post Chas,

I certainly tend to agree that Keynesian economics seemed to be doing a pretty good job keeping thing moving along. Sure, there were good times and bad. But the current situation started with the massive deregulation in the 80s and in the admittedly brief time we've traveled this road things seem to be considerably less stable. I don't think it's a huge leap to say "maybe we should revisit that". One thing does seem quite clear- the assumption that markets and corporations will "self regulate" in a more open environment seems to have been incorrect. Reagan was just wrong. It didn't work. But the great tax lie is so strong we'll have a very difficult time getting people of a different mind back in office. "We need to be responsible with our money" is the exact line that kept Republicans *out* of power for so long. Now they've abandoned it entirely and instead promise everything under the sun.

Well, maybe Hu Jintao will figure it all out for down the road a bit.

Good Day Comrade!

Ed

Well, we're all Fabians now. It's the only game in town.

For good or for bad.

Chas

[piece-itpete]

Exactly Pete, the "middle class" today has things light years better than they did 50 years ago. My Dad was a Union guy and made a decent living, but we never had two cars, central air, etc.. I wish another "Regan" would emerge from the Republican Party and save this country again. I'm afraid though, that Obama has done more permanent damage in 10 months than Carter did all told.:(

It surprises me that most of us take for granted that 'things aren't better'. I think it helps the politicans that say it. All these folks blaming Reagan when the Obama-led Congress just porked out a tril - when we're broke! Great avatar btw :)

All of that did not start with Reagan, most of the improvement in living conditions started after WW II with the GI Bill getting us into the technology forefront. People were building larger houses before he took office.

Only reason we have AC is because right now the Heat Pump is keeping the lousy wet 46 degree temps outside. When it get hotter we reverse it.

We need another Reagan like we need a round of the bubonic plague.

It didn't start with him, but certainly continued which means even more considering the state of things when he took office.

The weather's been terrible this fall! It was 35 miserable wet degrees outside on the way in.

I linked a sf graph for those interested, all talk aside it tells the real story of our growing wealth over time:

http://www.nahb.org/fileUpload_details.aspx?contentID=80051

Pete

PS: SF grew more during Reagan than Clinton :p

[noonereal]

It surprises me that most of us take for granted that 'things aren't better'. I think it helps the politicans that say it. All these folks blaming Reagan when the Obama-led Congress just porked out a tril - when we're broke! Great avatar btw :)



Are things better now or are they different now?

Has our standard of living increased as much as other countries?


Without Ray-gun we would not have needed a trillion to save the economy.
Just a fact guys.

[piece-itpete]

Are things better now or are they different now?

Has our standard of living increased as much as other countries?


Without Ray-gun we would not have needed a trillion to save the economy.
Just a fact guys.

Without Madison we wouldn't need a trillion in pork to save the economy? Taylor? I blame G. Washington. ;)

Pete

[Charles]

Without Madison we wouldn't need a trillion in pork to save the economy? Taylor? I blame G. Washington. ;)

Pete

Don't forget all of the money that Lincoln spent on an illegal war.

Chas