A hypothetical IMF loan to the US.

[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]

Originally Posted by piece-itpete

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]

Originally Posted by 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

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.

[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

[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/op...gman.html?_r=1

[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?

Originally Posted by 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.

Now that I can agree, QFT

Pete