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Financial markets are telling to us to focus on jobs, not deficits, Paul Krugman writes:...

Financial markets are telling to us to focus on jobs, not deficits, Paul Krugman writes: "Investors are all dressed up with... no place to put their money. So they're buying government debt, even at very low returns... By making money available so cheaply, they are in effect begging governments to issue more debt. And governments should be granting their wish, not obsessing over short-term deficits.”
Comments (49)
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    Borrow and Spend
    Print and QE
    Food stamps and Handouts
    Drones and Wars
    The more of those the better!
    28 Jul 2012, 09:35 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    Here's the takeaway for those whose rabid ideology won't let them read (or understand) the article:

     

    "...yes, we have a long-run budget problem, and we should be taking steps to address that problem, mainly by reining in health care costs. But it’s simply crazy to be laying off schoolteachers and canceling infrastructure projects at a time when investors are offering zero- or negative-interest financing.

     

    ...note that when money is cheap, that’s a good time to invest. And both education and infrastructure are investments in America’s future; we’ll eventually pay a large and completely gratuitous price for the way they’re being savaged."
    28 Jul 2012, 10:00 AM Reply Like
  • Sammy Lee
    , contributor
    Comments (302) | Send Message
     
    I don't know about infrastructure, but the returns to education haven't been paying off for quite a while now for a substantial amount of non-Ivy Leaguers, when taking into account costs.

     

    And with infrastructure, it seems we're starting to see the returns in IRAQ AND AFGHANISTAN on money borrowed from communist CHINA!

     

    Having someone major in Medieval History of Poland isn't going to help pay the debt back in 10/30 years. A zero interest rate policy doesn't only mean that money is cheap, but builds up potential inflationary tendencies. Krugman, as a economist, should know this. It's econ 101: No Such Thing as a Free Lunch!
    28 Jul 2012, 10:10 AM Reply Like
  • The Delivery Guy
    , contributor
    Comments (142) | Send Message
     
    Not when the government keeps losing the money... which is all they seem to do.

     

    Borrow a billion at 1%, lose the billion where are you now?

     

    Appears to be in a stagnant economy with the only way out of the debt mess will tank the economy more.

     

    Its time to take the credit cards away from the 14 year olds and pay down debt, they failed we have to cover the bill now before interest rates pop and we really are in deep do do.
    28 Jul 2012, 10:42 AM Reply Like
  • ogd
    , contributor
    Comments (11) | Send Message
     
    Hi winningtrader,

     

    Man, I'm so happy you brought some bumper stickers to this party! I was afraid it was gonna be some boring intellectual affair. I brought some too, we can have a little duel! Check this out:

     

    No More Profit Over People
    Main Street Not Wall Street
    We're Not Greece We're Japan
    Corporations Are Not People And You're Not My Friend

     

    What do you think? This will be fun!
    28 Jul 2012, 02:24 PM Reply Like
  • davidbdc
    , contributor
    Comments (3152) | Send Message
     
    D_V,
    I don't think anyone disagrees on infrastructure. Problem is that we supposedly passed an 800 Billion $ stimulus..... which COULD have redone half the electricity grid, built a few nuclear power plants, AND financed 10's of billions into PURE RESEARCH of all those green technologies.

     

    Instead we got handouts to public unions, tax breaks for those that still had jobs, and crony capitalism that does nothing for green technology but makes politically connected people rich.

     

    And you wonder why people have had enough?

     

    We do NOT need to spend more money on education. We should not be firing teachers, rather firing all the "hangers on" that now permeate our public education system. In the past 30 years we have more than doubled the number of people employed per pupil. MORE THAN DOUBLED!!! And to what end? Same test results. Even more totally failing schools - and a lot more money spent.

     

    Enough is enough. More and more people understand our government is simply corrupt and not capable. Until that is changed there will be no willingness to provide more resources to be squandered and stolen.

     

    The federal government needs to be totally revamped and drastically downsized. There is no reason to borrow money for infrastructure - we just need to tell people the truth - government is not going to sustain the social programs that breed dependency and reward only the bureaucrats. Instead that money - not new borrowing or new taxes - will be used for actual infrastructure projects.
    28 Jul 2012, 03:51 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    david

     

    I am from MO on the infrastructure money dump.
    28 Jul 2012, 03:57 PM Reply Like
  • BLSHC
    , contributor
    Comments (76) | Send Message
     
    WT: How about that ?
    'Krugman is not Klugman (in German Klugman = Smart man)
    but never make a log off when you read Rogoff (or Reinhardt by the way)
    Just read, that Klugman thinks 4% inflation is o.k. May be his moving to the Rogoff ideas ... Pretty interesting for a Keyensian Professor ... ( but I would doubt that JMK would be on his sides...)
    28 Jul 2012, 04:18 PM Reply Like
  • bdarken
    , contributor
    Comments (426) | Send Message
     
    It's "stagnant" because those with capital (wealth) have been under attack. So they hunker down.
    Why are we building schools when a kid with a laptop and a parent has more access to knowledge than NASA needed to get to the moon.
    Why are we building bricks and mortar libraries when you can down load the great books for FREE onto a tablet that can go anywhere...
    We are stuck on stupid.
    Think things are slow now? Wait till you try to sell your house next
    year and you have to pay a 3.8% healthcare tax on the "transaction" and on all of your investments....
    Sweeeeeeeeet.
    28 Jul 2012, 10:46 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (3550) | Send Message
     
    Virginia, to read Krugman and consider him rational one must be a proponent of "rabid ideology". There's nothing more rabidly ideological than believing that if $5 trillion of deficit spending failed, that another $5 trillion in deficit spending will fix the massive black hole that the first $5 trillion disappeared into. Government doesn't do anything but piss money away, and it's always justified as spending on "infrastructure" and "education," neither of which is actually ever seen or improved.
    29 Jul 2012, 02:22 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    > Why are we building schools when a kid with a laptop
    > and a parent has more access to knowledge than NASA
    > needed to get to the moon.

     

    The same could have been said of an encyclopedia set in the 50's -- but the key to educational success is the environment, not the material: good teachers, motivated classmates, and a culture that values knowledge and honest success instead of belittling it and corrupting it.

     

    Do you think the rich send their kids to elite boarding schools because those schools have 'knowledge' that the internet doesn't?

     

    > Why are we building bricks and mortar libraries when you can
    > down load the great books for FREE onto a tablet that can go
    > anywhere...

     

    Because poor people don't have tablets? And only the classics are usually free, modern educational content is still pretty pricey, though that is slowly changing.

     

    Also, most new and upgraded libraries do exactly that: they offer computers and internet access to those who may not have it (roughly 30% of Americans).

     

    That said, I am not aware of any new libraries going up anywhere near my area, so I think I call BS on this one. There is a new sports bar being built near me though -- bread and circuses.

     

    >Wait till you try to sell your house next year and you have to
    > pay a 3.8% healthcare tax on the "transaction"

     

    This is, for the most part, a myth propagated by partisan parrots:
    http://bit.ly/PXJLP5

     

    Uninformed much?
    29 Jul 2012, 03:16 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    > There's nothing more rabidly ideological than believing that
    > if $5 trillion of deficit spending failed, that another $5 trillion
    > in deficit spending will fix the massive black hole that the
    > first $5 trillion disappeared into.

     

    Sure there is: believing that blindly cutting spending in half will stimulate the economy. :)

     

    But both discussions are the wrong conversations.

     

    The productive conversation is: 1) find the things that are high ROI (long-term, not just the next quarter), and invest in them, and 2) find the things that are negative ROI, and cut them, handling the associated negative externalities (such as increased unemployment) gracefully.

     

    #1 doesn't necessarily mean blindly throwing money at "infrastructure and education", but rather focusing on the pockets of excellence in those categories that yield a lot of value.

     

    "Big bad gubment cant do nuthin rite" is just ignorance personified, especially when there are a lot of things that industry can't or won't do, like infrastructure and education.
    29 Jul 2012, 03:22 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Building schools is just a reflection that we are in a rut. Certain classes need more interaction but others not so much. That can be sorted out.

     

    If schools were the only way to get an education we would not have so many colleges and universities taking their curriculum online.

     

    Reality is schools are a warehouse for the young.
    29 Jul 2012, 04:58 PM Reply Like
  • wyostocks
    , contributor
    Comments (7829) | Send Message
     
    Add in the many kids being homeschooled.
    30 Jul 2012, 08:39 AM Reply Like
  • diadochi
    , contributor
    Comments (212) | Send Message
     
    I like to refer to my primary school years as preventative detention.
    30 Jul 2012, 11:44 AM Reply Like
  • wyostocks
    , contributor
    Comments (7829) | Send Message
     
    Blah Blah Blah from the Krugman.
    Must be a slow day for SA.
    28 Jul 2012, 09:37 AM Reply Like
  • bbro
    , contributor
    Comments (9597) | Send Message
     
    Not a Krugman fan but look at what the French are being asked to pay
    to borrow 10 year money....2.22%....awful lot of money stacked up on one side
    of the boat...
    28 Jul 2012, 09:38 AM Reply Like
  • bbro
    , contributor
    Comments (9597) | Send Message
     
    How about 3.16% on 30 year French debt??
    28 Jul 2012, 10:04 AM Reply Like
  • Bret Jensen
    , contributor
    Comments (10327) | Send Message
     
    Krugman is a moron on his whole debt tirade. He never mentions that the Fed is buying over 60% of new treasury debt, take that away and interest rates skyrocket.
    28 Jul 2012, 09:52 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2280) | Send Message
     
    From the article:

     

    "One favorite is the claim [for why rates are still low] that the Federal Reserve is keeping interest rates artificially low by buying government bonds. But that theory was put to the test last summer when the Fed temporarily suspended bond purchases. Many people — including Bill Gross of the giant bond fund Pimco — predicted a rate spike. Nothing happened."

     

    Perhaps not the best example, but still, he mentions it. :)
    28 Jul 2012, 09:58 AM Reply Like
  • maudie
    , contributor
    Comments (473) | Send Message
     
    1970-Krugman to Greece: "Spend more."
    1980-Krugman to Greece: "Spend more."
    1990-Krugman to Greece: "Spend more."
    2000-Krugman to Greece: "Spend more."
    2010-Krugman to Greece: "Spend more."
    2012-Krugman to Greece: "If you would have done what I said, you wouldn't be in this predicament."
    28 Jul 2012, 10:37 AM Reply Like
  • JB Murphy
    , contributor
    Comments (88) | Send Message
     
    Krugman is a Keynesian at heart, what you do you expect?

     

    "The long run is a misleading guide to current affairs. In the long run we are all dead." (J. M. Keynes)
    28 Jul 2012, 12:13 PM Reply Like
  • Sammy Lee
    , contributor
    Comments (302) | Send Message
     
    Krugman: "...begging governments to issue more debt."

     

    I disagree, I think what they're saying is, "We're only doing this because there's no better alternative FOR NOW, but as soon as things change, you had better get your house in order because we will start demanding higher returns."

     

    The markets couldn't give two cents about jobs. The only people worried about jobs are those who don't have them. Markets don't care about other people's welfare. Somebody please take away this idiot's Nobel.
    28 Jul 2012, 09:53 AM Reply Like
  • diadochi
    , contributor
    Comments (212) | Send Message
     
    Au contraire Talebfan,

     

    Markets do care about jobs. No jobs, no sales, no markets.
    28 Jul 2012, 10:46 AM Reply Like
  • sr1977
    , contributor
    Comments (335) | Send Message
     
    Then why is there an immediate reaction from the market when the jobs numbers are released each week and an even bigger reaction when the monthly numbers come out?

     

    The markets care because 70% of our economy is based on consumer spending. Less jobs created tends to equal less consumer spending, all other things being equal.

     

    Now if you said businesses don't care about adding jobs then I would partially agree. Hiring people and paying them a salary is a huge expense for businesses, but it's only natural that they will attempt to reduce this expense, especially with an uncertain economic future ahead of them.
    28 Jul 2012, 11:15 AM Reply Like
  • Sammy Lee
    , contributor
    Comments (302) | Send Message
     
    That's not what I meant. Of course people need jobs for the simple act of surviving. And, of course the markets will react to job numbers. What I meant was that interest rate movements in U.S. Treasuries do not necessarily signal the market's desire for more jobs. It might simply be a capital flight to quality.

     

    For example, a lot of the increase in profit margins for the past couple of years came from corporate layoffs and capex spending. Remember we were talking up a U.S. "decoupling?" So, if we ever had a case where margins increased while unemployment increased as well, the markets would not necessarily turn bearish or start buying up Treasuries. The markets' primary concern is profit and growth, not whether your next door neighbor gets his food stamps.
    28 Jul 2012, 06:27 PM Reply Like
  • Aristiphones
    , contributor
    Comments (1327) | Send Message
     
    to argue that low deficits are an impediment to job creation is the height of lunacy. the fact that growth isn't 4 percent instead of the current 1.5 percent is because...GOVERNMENT IS BROKE PAUL KRUGMAN. AND THIS IS EMPIRICALLY PROVEABLE. (state and local governments are in the midst of the biggest lay-off's in their history. with more to come. if growth doesn't pick up soon you will have an ACTUARIAL EVENT that will cause a massive reduction in benefits to those not working. "a lesson that needed learning long ago" in my view.) i would be very wary of annuity products as they offer a "guaranteed rate of return" which puts a lot of pressure on the folks running that thing to "perform to market." never an easy thing to do!
    28 Jul 2012, 09:56 AM Reply Like
  • apberusdisvet
    , contributor
    Comments (2873) | Send Message
     
    In a truly free market, where only competence and ability reign, Krugman would be unemployed.
    28 Jul 2012, 10:04 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2052) | Send Message
     
    Most professionals at least produce something. A lawyer helps release a suspect on bail, a doctor prescribes some medication to remedy the ailing, an engineer makes something work, and a weatherman (meteorologist) forecasts a storm.

     

    Somehow I couldn't fathom what an economist would produce; but then I look at their employers, they are limited to academia, government, banks, finance corporations, for-profit/non-profit institutions.

     

    Do I miss any on my list above?

     

    Obviously, they are very contrived and would tell you what their employers want them to tell.
    28 Jul 2012, 05:52 PM Reply Like
  • Sammy Lee
    , contributor
    Comments (302) | Send Message
     
    They also come up with mathematical models like VAR that do not in any way resemble the real world.
    28 Jul 2012, 06:29 PM Reply Like
  • bbro
    , contributor
    Comments (9597) | Send Message
     
    What is government debt service to GDP?? What is government debt
    service to total government revenue?? Until you include those metrics
    in the study you have an incomplete analysis ( but i suspect
    some don't want the data and have already made their decision)
    28 Jul 2012, 10:07 AM Reply Like
  • The Delivery Guy
    , contributor
    Comments (142) | Send Message
     
    1) we will NEVER pay off this debt, so whatever we spend we will pay interest on forever.

     

    2) Borrow at 1% and lose the money is still a losing proposition.

     

    3) The higher the debt goes, the less consumers spend.

     

    4) We need to increase the velocity of money, all this deficit spending is reducing it. I personally spent only ~$400 on discretionaries last year.
    28 Jul 2012, 10:38 AM Reply Like
  • diadochi
    , contributor
    Comments (212) | Send Message
     
    Where do you put your investment cash then? Under your mattress? I'm glad to say that I have been buying whatever I want (typically gas and boy toys) ...as life is all too short. Money is for spending on life (and investing for future playing). You cannot take it with you.

     

    I'm with Krugman; lets use some of your mattress money to restart the game by getting people to work---it almost doesn't matter what we spend it on. I have one novel idea; instead of war machines that will just be scrapped out and freeways (things we have too much of IMO), how about a network of coast to coast paved bikeways with campgrounds? It would be an investment in ourselves that could pay dividends for a hundred years or more. Get some tourism money flowing and start to kill the obesity epidemic in the country. Let's directly enhance our lives instead of continuously obsessing about GNP.
    28 Jul 2012, 11:02 AM Reply Like
  • davidbdc
    , contributor
    Comments (3152) | Send Message
     
    I like your idea, but unfortunately our idiot bureaucrats have so greatly alienated the European bike riders that we'd only get about 15,000 per year to put up with the ridiculous visa regime we've set up.

     

    Of course, as part of this I'm sure an admendment would be attached that allowed 50,000 Saudi's to get special bicycle visa's just to prove we don't discriminate against anyone.
    ----------------------...

     

    I agree with you that life is for living - but that also includes providing for one's family. And frankly I know more and more people that are truly preparing for the worst. As long as our government is allowed to continue being corrupt and taking our freedoms from us, you'll see more and more people doing the same. Who really believes that we have government of the people, by the people, for the people?

     

    I don't. I believe we have government of the bureaucrat, by the politicians, for the financial elite. And none of those three groups give a damn about "the people".
    28 Jul 2012, 04:00 PM Reply Like
  • diadochi
    , contributor
    Comments (212) | Send Message
     
    No argument there. The solution is democracy. You can see the fear of it from the elites in the decision to allow unlimited money into campaigns...but the death of the standard boob tube and the rise of on demand means that all that money has no effective outlet. However you could perhaps hire some bloggers on SA for instance. :-) Bring, em on I say...no bag limit!
    30 Jul 2012, 11:55 AM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    Bernanke to the politicians: Short term stimulus while addressing the long term fiscal problems.
    This sounds a bit like St. Augustin: God make me chaste but not yet.
    What a disaster.
    28 Jul 2012, 10:46 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5292) | Send Message
     
    What the government can and should do is extend the maturity of existing debt, the longer, the better.

     

    The point is, at some point the US will have to get on the road to fiscal sustainability. If interest rates are locked in on a large portion of the debt, interest charges will be less of a drain on the fiscal situation and the process will be less painful.
    28 Jul 2012, 11:02 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Tom

     

    We agree on something. Hope your pacemaker is working! LOL!

     

    If we can push a large % of our debt out on the maturity curve it will buy us time later when rates are not so low.
    28 Jul 2012, 12:09 PM Reply Like
  • Bear Bait
    , contributor
    Comments (670) | Send Message
     
    Refinancing or remodeling ones home at these low rates isn't a good idea either?
    28 Jul 2012, 11:06 AM Reply Like
  • Arnbjorn Ingimundarson, CFA
    , contributor
    Comments (188) | Send Message
     
    Refinancing is a good idea. Remodeling is only a good idea if you can afford higher mortgage payments.

     

    Can the U.S. afford to keep increasing its debt? There is a point at which bond buyers will revolt, even if that point has not been reached yet.
    28 Jul 2012, 03:25 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (3550) | Send Message
     
    If you're refinancing to cash out equity, the wisdom of it depends entirely on what you're doing with the cash.

     

    However government isn't cashing out equity on an asset it owns. It's taking a cash advance on a credit card that it has no ability to repay.
    29 Jul 2012, 03:13 AM Reply Like
  • diadochi
    , contributor
    Comments (212) | Send Message
     
    Ah but that's the beauty of ZIRP and financial repression. Who are they gonna call?
    30 Jul 2012, 11:58 AM Reply Like
  • wkl
    , contributor
    Comments (289) | Send Message
     
    Gee Paul, could it be that investors are just hiding out in government debt because of fear rather than risking capital to the unknown? And by the unknown, I mean public policies both at home and around the world, especially Europe. And don't forget the largest holder of that debt is the Fed.
    28 Jul 2012, 12:22 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Krugman is not completely honest why rates are so low. He makes it seem like magic for any country that issues debt in their own currency and that debt hawks are wrong. That somehow low rates are a green light to borrow and spend/invest.

     

    The real reason is that investors want capital preservation because governments have too much debt especially in Europe and so capital is looking for the safest place to be parked. A fuller look at the issue reveals that investors have been looking for a place to put their money since the early 90's when rates were very low and that is what led them to invest in MBS's and then get burned badly. That has not been forgotten so buying securities at a small negative interest rate is now looked at as being smart. The US is the least risky of all the options available for now. We are the least ugly of all the step sisters.

     

    Investing in infrastructure and education are typical government centric approaches because government controls both. However we are at diminishing returns on education spending and we have a terrible mismatch of our education system as currently structured against the needs of the job market. English Lit is not helping anyone looking for a manufacturing job. We have a serious problem with High School dropouts and that is a bigger problem. We should be a lot further ahead with internet education than we are to date.

     

    Infrastructure is the build it and they will come and is capital intensive not labor intensive. And I don't think anyone is saying they cannot find a road to get them home.

     

    The real problem with jobs is unknown health costs and unknown taxes makes businesses not want to hire anyone. They work with temp agencies if they really need help and are just waiting for clarity. Our current federal government has made a bigger mess of both and they were not great to start with. This is not going to end until our federal government submits to the reality of what is going on either through voter choice or a serious meltdown that forces them to face the fact they need to quit hurting businesses. We all cannot work for the government.
    28 Jul 2012, 12:25 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2052) | Send Message
     
    When does government really shrink, tell me? No, they don't; they always expand.

     

    Why? It is not a business. Its income is guaranteed by taxation; and penalty for late payment is heavy and by law. There is no effective appraisal of this non-performer, only a potential mild rebute in every two years. You can't fire them for bad performance.

     

    No win situation!
    28 Jul 2012, 01:18 PM Reply Like
  • diadochi
    , contributor
    Comments (212) | Send Message
     
    Ah, finally getting down to brass tacks here. It's a diminishing returns problem. Once you have a nice place to stay, good food, and some spending cash what exactly is it that you need more of? A larger house or new car to impress people you don't even know? Maybe our problem is more of a meaning of life question rather than increasing that which we have almost ludicrous quantities of.
    30 Jul 2012, 12:07 PM Reply Like
  • Sammy Lee
    , contributor
    Comments (302) | Send Message
     
    The diminishing returns problem is pervasive in societies that finally end up collapsing.
    30 Jul 2012, 07:16 PM Reply Like
  • User 462216
    , contributor
    Comments (95) | Send Message
     
    The FED creates money and destroys money by taking it out of circulation. The FED can make assets rise or fall. (Bank)ruptcy's take money out of circulation. It takes time for the economy to catch up with the FED action. Short times of inflation and deflation of certain assets. The fed will continue to support the market until private debt is paid down and money flows again to the market and it will sell the asset back to new buyers coming into the market....Getting the money back that was created out of thin air and is taken out of circulation. Once risk assets have money flowing back to them the FED will cash in and start to raise bond and Treasury interest to try and balance risk assets. There is never a balance for long. Just money sloshing back and forth. Its the system. Picture a seesaw and the money is a counter balance. Some of those that sold in 2008-09 may not come back to the market....but their kids will and population growth will replace the rest, 401k and IRA will assure that and the never ending pump by the financial system that makes their living of the investors.
    The money always comes back to the FED no matter where it flows too even the Govt. It is simply a tool to promote growth and stability.....sooner or later. Sooner or later the Govt. will be forced to enact policy that helps promote proper money flow. Don't worry about it. Understand the system and work within the system. Learn to respond and not react. Skate to where the puck is going to be and you'll be fine.
    Will many be hurt in this system.....yes. Don't be one of them.

     

    28 Jul 2012, 01:29 PM Reply Like
  • davidbdc
    , contributor
    Comments (3152) | Send Message
     
    Since late 2008 I've been reading the same drivel. Just give more money to spend and everything will end up ok.

     

    Seems we've done that. How has it worked out? Having a great recovery?

     

    And folks like myself said then, and say it again today... the answer is less government spending. We now owe 16 Trillion. When the whole crisis started it was what 11-12 Trillion? Have we gotten our 4-5 Trilion's worth? I don't think so. Have our children gotten 4-5 Trillion's worth of a better future? I don't think so.

     

    Folks, its simple math. We owe 16 Trillion dollars. We spend more than a trillion more than we take in at the federal government level. We have to SLASH government spending. Not reduce, not maintain, not increase - We need to greatly curtail government spending. It will mean totally revamping our bureaucracy. It means eliminating entire agencies, combining others, eliminating lots of programs. It means restructuring the pay and benefits of those that are supposedly "public servants". It means a large reduction in defense spending. It means closing many many bases around the world and purchasing fewer weapons and downsizing our armed forces personnel. It means raising the retirment age for social security and throwing million off of the disability program which has become a huge early retirement program.

     

    Then we can tackle the really difficult item which is health care - and there again... getting government out of the way (with the exception perhaps of providing catastrophic coverage) and sticking to regulating rather than running the system would go a long way to reducing costs.

     

    Unfortunately the Krugman's of the world have created so much dependency and enough idealogues that its unlikely we'll see any changes before its too late.
    28 Jul 2012, 04:14 PM Reply Like
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