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Fiscal cliff negotiations between Senate Majority Leader Harry Reid and Minority Leader Mitch...

Fiscal cliff negotiations between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell hit a major snag after Republicans demand use of the "chained CPI" method for calculating entitlement benefits - which would result in lower payments for Social Security beneficiaries. Pres. Obama backed the provision previously, but Democrats now object to including it as part of a scaled-down deal. Updated 5:51 p.m.: The Senate won't vote tonight and will reconvene at 11 a.m. tomorrow, Reid says.
Comments (244)
  • Regarded Solutions
    , contributor
    Comments (16169) | Send Message
     
    Schmucks. All of them.
    30 Dec 2012, 03:47 PM Reply Like
  • Jeb Handwerger
    , contributor
    Comments (626) | Send Message
     
    "As time goes by the only true repositories of wealth exists in the natural resource area as it has since the days of Athens and Rome. Oddly enough after millennia we have come full circle, the same countries and the world's greatest empires are going broke."

     

    http://seekingalpha.co...
    30 Dec 2012, 06:58 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    CPI is an odd measurement full of compromises and assumptions. To switch it to an odder method of price level analysis might work for a short period of time, but in the longer run could result in more chaotic changes, perhaps even increasing payouts to Social Security beneficiaries. It really seems like an odd thing to choose to hang up negotiations, though perhaps it was the easiest item to put a halt to talks.

     

    This is really still just political theatre. Until Boehner is confirmed again as Speaker of the House, there is zero chance of anything passing. If Eric Cantor becomes Speaker of the House instead, then I think the chance of any deal becomes infinitely small.

     

    The real bigger issue and bigger battleground will be debt ceiling negotiations. I suspect we will have a repeat of the August 2011 market plunge in early March 2013. Patient investors with a reasonable cash position should be able to take advantage of some buying opportunities then. I would bet that many politicians either have active short positions now, or will take advantage of a market plunge that they will cause in the near future.
    30 Dec 2012, 03:47 PM Reply Like
  • The Last Boomer
    , contributor
    Comments (897) | Send Message
     
    McConnell wants BIG cuts to Social Security: a program that without any changes is solvent for another 20 years and with only modest changes will be solvent for another 75 years. May I ask why McConnell and the Republicans want to dismantle a perfectly solvent, popular program that benefits tens of millions of Americans?
    30 Dec 2012, 03:59 PM Reply Like
  • Rookie IRA Investor
    , contributor
    Comments (2615) | Send Message
     
    It seems obvious that the long-term solution will be increasing the rate of contributions a hair, increasing the maximum contribution a whisker, increasing the age of eligibility a fraction, decreasing the payout a sliver, and so on until the two ends meet.

     

    Of course, cuts in Medicare could reduce life expectancy, which would be great for Social Security.

     

    I can't imagine that if there was a national referendum on dismantling Social Security that it would have much of a chance.
    30 Dec 2012, 04:12 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    I won't be old enough to retire in 20 years, but you want me to keep paying in to the SS and Medicare dogs in the meantime? The "Greatest Generation" and the boomers are absolutely killing the rest of us... and none of you care.
    30 Dec 2012, 04:13 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Pigs always vote for more slop not less.
    30 Dec 2012, 04:38 PM Reply Like
  • Regarded Solutions
    , contributor
    Comments (16169) | Send Message
     
    They need to all just retire to their farms.
    30 Dec 2012, 04:47 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4011) | Send Message
     
    Very few people on the dole would willingly give up their benefits. They would sooner see the system collapse. Look at Greece.
    30 Dec 2012, 05:37 PM Reply Like
  • The Last Boomer
    , contributor
    Comments (897) | Send Message
     
    mickmars,
    The long-term gap between Social Security’s projected income and promised benefits is estimated at 1 percent of gross domestic product (GDP) over the next 75 years (and 1.5 percent of GDP in 2086). By coincidence, that only slightly exceeds the revenue loss over the next 75 years from extending the Bush tax cuts for people making over $250,000.
    30 Dec 2012, 05:52 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    exactly right. approaching 50% of the population getting government checks of one sort or another is a point of no return. People don't willingly let go of their government checks.
    30 Dec 2012, 05:54 PM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    Of course a national referendum to dismantle Social Security wouldn't have a chance. Why would anybody vote to dismantle a program that hands out free cash? Especially if you're near the cash-receiving age?

     

    Like somebody said, if the people are allowed to vote themselves money from the treasury, its all over.
    30 Dec 2012, 06:07 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    Yep, it's all over. Any talk of "balancing the budget" is laughable. Just stay away from treasuries, and get yourself ready for massive tax increases for all workers when the money printing finally stops working.
    30 Dec 2012, 07:04 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    Last Boomer, are those CBO projections? Forgive me if I dismiss them as inaccurate.

     

    Also, Medicare is the even bigger elephant in the room.....

     

    It's just a demographic math problem now, and the 45 and unders are screwed. Japan, UK, and the rest of Europe are in the same boat. At least we have friends....
    30 Dec 2012, 07:09 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    "May I ask why McConnell and the Republicans want to dismantle a perfectly solvent, popular program that benefits tens of millions of Americans? "

     

    I think you answered your own question. Read the last part of it. It is benefiting tens of millions of Americans. So why should the Republicans want that to go on?
    30 Dec 2012, 08:04 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    "Pigs always vote for more slop not less. "

     

    Tom, it is not nice to talk of the military industrial complex this way. They are the ones securing our freedom and liberty - for a small fee of $700-750B a year.
    30 Dec 2012, 08:05 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    "exactly right. approaching 50% of the population getting government checks of one sort or another is a point of no return. People don't willingly let go of their government checks. "

     

    What do you think can be done here Brian? Use force?
    30 Dec 2012, 08:06 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    " Of course a national referendum to dismantle Social Security wouldn't have a chance. Why would anybody vote to dismantle a program that hands out free cash? Especially if you're near the cash-receiving age?

     

    Like somebody said, if the people are allowed to vote themselves money from the treasury, its all over. "

     

    So what's the solution? Dissolve the legislative process and institute a dictatorship?
    30 Dec 2012, 08:07 PM Reply Like
  • XRTrader
    , contributor
    Comments (609) | Send Message
     
    Yes, the gap for SS is 1% of GDP. And, the gap for Medicare is 3% of GDP, and the gap for state-run Medicaid is 2% of GDP, and....

     

    You see how all of these "little" amounts of GDP add up to a whole lot of increased government taxation? ALL of these programs have to be adjusted down - we made promises to a lot of people, and we cannot afford to keep them.

     

    Waiting for 22 years until we're in really really deep is not the answer just because we don't "like" cutting benefits.
    30 Dec 2012, 10:21 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    Macro - I was just thinking..Italy gets a new government every two years..why can't we do the same??
    30 Dec 2012, 10:57 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    The Greatest Generation has contributed more than $2.3 trillion in EXCESS to SS that has helped fund the routine operations of government. Absent those excess contributions the government would be $2.3 million further in debt and would have had to borrow the same amount. The fund - last year - was solvent until 2037, 25 years from now - 5 years into your retirement and would then pay 75% of all benefits.

     

    Perhaps the small changes that Rookie talks about would help. Perhaps allowing the SS Trust Fund (mis-named) to invest in something other than loser Treasuries would benefit in a number of ways, particularly in allowing the market to assign real interest rates to those instruments.
    30 Dec 2012, 11:31 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    Especially when they have contributed more than $400,000 into the SS Trust Fund and will never get a return of their principle much less a return on their principle. Hey just pay me back the $400,000 plus 4% interest and I'll gladly opt out of future benefits.
    30 Dec 2012, 11:33 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    bbrady - you have made lots of other good comments on SA - but this appears to be one of your less well thought out? Why would I want to dismantle SS when it owes me - probably more than $3/4 of a million?
    30 Dec 2012, 11:35 PM Reply Like
  • muckdog
    , contributor
    Comments (57) | Send Message
     
    I saw you this year in concert, and I think you'll be lucky to see another 20 years, Mick!
    31 Dec 2012, 01:29 AM Reply Like
  • Deltascared
    , contributor
    Comments (289) | Send Message
     
    Was that a talking point, rhetorical question or do you want an answer?

     

    First, our president used to support the Republican position as do numerous other experts.

     

    Second, the 20 year estimate of solvency is, at best, questionable and probably very wrong.

     

    If you are sincere, why don't you do some research or check Paul Ryan's web site for an explanation?

     

    A bit:

     

    "Beginning in 2010, Social Security started paying out more in benefits than it collected in taxes – a trend that will skyrocket as the baby boomers continue to retire. In order to pay full benefits, the government must pay back the money it owes Social Security.

     

    Those who wish to solve this problem by raising taxes are ignoring the profound economic damage that such a large tax increases would entail. Just lifting the cap on income subject to Social Security taxes, as some have proposed, would, when combined with the Obama administration’s other preferred tax policies, lift the top marginal tax rate to over 50 percent. In reality, lifting the cap on income subject to Social Security will hurt the self employed – like many of the farmers and small business men and women in the First District – hardest as these individuals pay both the employee and employer share of the Social Security tax and further hamper the economic growth these individuals can provide.

     

    Most economists agree that raising marginal tax rates that high would create a significant drag on economic growth, job creation, productivity and wages. This nation cannot fix its retirement-security system by leaving young families with nothing to save."

     

    Nobody wants anything cut. See Greece and riots for more info there.
    31 Dec 2012, 04:44 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    You wouldn't Wmark, and I can't blame you. Social Security is a giant Ponzi scheme, and like all who put money in, want to get money out.

     

    My entire point was related to one of your comments- most people, especially the younger you are, will never get a return of their principle paid in, let alone any additional return on it. Therefore, I would much rather take a buyout and attempt to invest it on my own, as opposed to continuously trying to dump sand into a pit of quicksand with the notion that it will eventually stabilize itself.

     

    The only guarantee that Social Security really provides for solvency of itself is that it is backed up by a printing press, which will inflate my own dollars away. This will widen the size of the hole in the sinking boat as I'm trying to bail water out of it. My idea of a buyout is essentially saying that I would much rather be given a solid kayak in the middle of the Atlantic, as opposed to standing on the Titanic with a lot of other people with buckets.
    31 Dec 2012, 08:44 AM Reply Like
  • Tom Armistead
    , contributor
    Comments (5315) | Send Message
     
    Amazing dexterity on the part of Obama. He actually touched the third rail, just brushed it for a minute, and was not electrocuted.

     

    So now the Republicans have decided its safe to stand on it.

     

    But when you demand cuts to social security, while proclaiming that the rich should not be taxed, that completes the circuit. The Republicans have just fried themselves.
    30 Dec 2012, 04:00 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    The fair trade is cuts (or, less of an increase) to SS/Medicare payments in exchange for raising taxes on the Rich.

     

    Tom, I'm guessing you didn't pay 15.3% to FICA and Medicare your entire working career. The rest of us have paid that rate every year since we were delivering pizzas as teenagers, yet we'll see none of it.

     

    Can't wait for that to be bumped up to 20+% of our checks when all of the boomers are retired. Count on it....
    30 Dec 2012, 04:20 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5315) | Send Message
     
    mickmars,

     

    Neither did you. Take a look at your paystub and do the math. FICA has been cut by 2% as a stimulus measure.
    30 Dec 2012, 04:25 PM Reply Like
  • anonymous#12
    , contributor
    Comments (552) | Send Message
     
    Oh my God those elderly people receiving $1,200 per month are living the high life!
    30 Dec 2012, 04:33 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Who really cares about political parties? The ideas are important but the parties are not. However that is not what we are participating in. The parties are important but the ideas are disposable. Unless of course they have a lot of votes behind them.
    30 Dec 2012, 04:40 PM Reply Like
  • bgold1955
    , contributor
    Comments (2041) | Send Message
     
    Mick.... I understand you having issues with today's economic environment but SS has been levied since 1938, and Medicare since 1965, so most that are on this site have paid their entire working careers into both. Only difference at this point is that we have paid much more.

     

    I disagree with your assumption that SS will not be there for you as, believe it or not, that is what everyone said in the 1960's. just don't let any group scare you into thinking it won't be there. It's all a fear game. In 1986, we got the grand fix for SS that was suppose to make it solvent forever, that didn't work. Limit will continue to increase with inflation + some to make it solvent for years to come.

     

    As for Medicare, you are correct it will not be there in 20 years as we will have a National Health Care Program like all other nations where everyone has insurance, like it or not.
    30 Dec 2012, 05:10 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5315) | Send Message
     
    anon,

     

    That $1,200 a month isn't that bad. In order to draw it risk free, I would need $847,000 in ten year treasuries.

     

    I would need even more in order to draw it risk free and protected from inflation. I don't know enough about TIPS to do the math.

     

    The only difficulty is, you have to keep breathing in order to collect it.
    30 Dec 2012, 05:16 PM Reply Like
  • D-inv
    , contributor
    Comments (4114) | Send Message
     
    Tom, you know full well that the Republicans have not demanded cuts in social security. They have asked for change in the indexation formula used to calculate FUTURE increases in social security annuities.

     

    The record of inflation as measured by CPI-U and C-CPI-U shows the difference between the two is relative small. CPI-U is typically higher than C-CPI-U, but not always. A quick run of some numbers shows percentage changes in the index numbers as

     

    Year CPI-U C-CPI-U
    2003 2.28 2.08
    2004 2.66 2.50
    2005 3.39 2.90
    2006 3.23 2.90
    2007 2.04 2.53
    2008 4.66 3.73
    2009 -0.35 -0.47

     

    The Republican proposal is to change the rate of change in future INCREASES in social security. To claim otherwise is blatant misrepresentation.
    30 Dec 2012, 05:57 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    Tom- you might need less in treasuries if you were going to treat SS like an annuity. You would draw it down gradually based on actuarial life expectancy.
    30 Dec 2012, 05:57 PM Reply Like
  • Petelovesamy
    , contributor
    Comments (178) | Send Message
     
    In the "world of politicising" nobody knows what are you saying, but you get the votes, a n y w a y !!!!!!!!!!!
    30 Dec 2012, 06:04 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5315) | Send Message
     
    D-inv,

     

    Give them an inch, and they'll take a mile.
    30 Dec 2012, 06:33 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    the republicans, geniuses that they are, dropped the chained ss idea. the idiots could have had it if they had the sense to accept the earlier deal. now they'll walk away with less than they could have had a week ago.

     

    republicans will become the whigs of the modern age...
    30 Dec 2012, 06:35 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5315) | Send Message
     
    Brian, good point. Probably there's a website where you could get a quote on an inflation indexed annuity, then we could talk real facts, what is this thing worth.

     

    I found something, it would be worth $214,000. I suppose the next thing would be, for me to take my social security statement and adjust my contribuations for inflation and see how I made out.
    30 Dec 2012, 06:39 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    spot on. i am 64 and i can remember my dad worrying about social security not being there when he retired. he died 12 years ago and collected for the last 20 years of his life.

     

    i wouldn't mind a small give back to help the system remain solvent, as that's the underpinning of democracy....everyone gives a little. but i have one big caveat, which is:

     

    slay the sacred cow of the u.s. military. it has an enormously bloated budget, with troops in 150 odd countries in the world, dwarfing the military budgets of every other country on earth. my daughter has a young friend who joined after high school and guess where he's stationed: japan. i guess we're worried the japanese might pull another pearl harbor some day. christ, what iciocy. we have squandered trillions on pointless wars, having learned nothing from the trajedy of vietnam. what the bush/cheny team did in the name of "protecting us from terrorists" is nothing short of criminal in my view and if i had my way they'd be tried in an international court.
    30 Dec 2012, 06:45 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    Yep, no complaints in 2010 and 2011. Only paid 1980's rates for those two years.

     

    You think I'll ever pay less than 15.3% in the future? Be honest....
    30 Dec 2012, 06:49 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    you're wrong.

     

    it is a cut in benefits compared to the baseline.

     

    having said that i wouldn't object to a chained CPI if they get rid of the CPI all together and apply the chained concept to every other item in the u.s. budget. it is not just seniors who adjust their spending habits in an inflationary environment.
    30 Dec 2012, 06:54 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5315) | Send Message
     
    mick,

     

    SA pays a penny a page view for my articles. So I get a 1099 at the end of the year, and Turbo tax tries to make me pay self-employment tax on it, which would be that 15.3% you are complaining about.

     

    I operate under the opinion it's hobby income, subject to regular income tax but not the self-employment tax. You would think I was Tim Geithner, the software fights me so, it can take 15 minutes to get it to do what I want.

     

    I don't know how this story ends. Apparently the younger people are afraid they'll never collect, and don't want to pay in. Meanwhile those of us who paid in for our entire working life expect to collect along the lines of what we were promised.

     

    I would just remark that a lot of things can happen over the course of a lifetime, and none of us has half as much control over our destiny as we think we do. Social security provides a safety net, and it's a good idea.

     

    The reason we have social security is, the financial markets speculated and manipulated and gambled until they brought on the Depression and wiped everybody out. Something had to be done, and social security was it.

     

    So now we've come full circle, and the financialists have done it again, except they only wiped people out half way, or only half of the population. But reducing or eliminating social security is not the fix. The solution is already in place: social security.
    30 Dec 2012, 07:05 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    don- the US has to station troops all over the world - that's how you maintain an empire. I am not an apologist for the US military, just stating the facts. if we didn't establish a presence everywhere, then someone else would, and the US would lose its influence. it's just part of maintaining an empire.
    30 Dec 2012, 07:09 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2055) | Send Message
     
    Empire is fine as I elucidated in my only Instablog 'Britain, China, and the U.S: A Tale of Three Empires'. But where is Diocletian, let alone the Trajan and Hadrian combo? Laughing out Loud (LOL)! Really loud!
    30 Dec 2012, 07:29 PM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    Tom
    You are wrong......Younger people are not afraid they won't collect. They also have no complaints about paying in. What we don't like is the higher rate we are and will be paying to maintain the status quo and will receive reduced benefits in comparison to current generations of collectors.

     

    Who knows maybe over the next 30 years rates won't go up for workers (doubt it) or maybe age increases won't happen (doubt it) or maybe benefits won't be slightly cut (doubt it). I'm not a psychic but I know how to add, subtract, multiply, and divide.

     

    It's a little sad that you try to make younger workers out to be somehow unwilling to pay their share, when I'm getting up for work tomorrow to pay directly into your pocket.
    30 Dec 2012, 07:41 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5315) | Send Message
     
    RSI,

     

    I'm not trying to put words in anybody's mouth, I'm just reflecting what I've seen or heard in comments on the topic over the years I've been active on SA.

     

    Social Security as originally developed wasn't insurance in any proper sense, it was stricly a pay as you go scheme to take care of the victims of the Depression. And it worked, you had people who grew up during the Depression then fought WWII and meanwhile they paid for both themselves and the generation before them. Somewhere in there it was fully funded which was quite an achievement from where it started.

     

    The financial crisis with its unemployment has cut the amount going into the program. That, and the unwillingness to welcome immigrants and make them legal citizens with a stake in social security. The powers that be were happy to have a lot of Mexicans in the country, doing all the work Americans wouldn't take, under the table with no benefits.

     

    The problems would be less severe if our politicians would cooperate to get the economy rolling forward sustainably. That, and bringing in legal immigrants and making them part of things. This country used to be more inclusive.

     

    In reality if you look at social security by itself, it's not in that bad shape. The Republicans conflate the results of the unfunded wars, the Bush tax cuts, the financial crisis caused by deregulation, and the demographic issues for social security, and then label social security as an "entitlement," a dirty word in their lexicon.

     

    I say, let those who pay into social security collect. Meanwhile, let those who collected from the wars, the tax cuts, and the financial deregulation pay for that. It will all add up.
    30 Dec 2012, 07:58 PM Reply Like
  • D-inv
    , contributor
    Comments (4114) | Send Message
     
    "You think I'll ever pay less than 15.3% in the future? Be honest.... "

     

    You will pay a higher rate and do so starting January 1 if your income exceeds $200K ($250K for families) even if all "Bush tax cuts" are extended. http://bit.ly/UCWWbG
    30 Dec 2012, 08:00 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    "As for Medicare, you are correct it will not be there in 20 years as we will have a National Health Care Program like all other nations where everyone has insurance, like it or not. "

     

    If that happens, I promise I will dance naked in the Capitol. OK, you may not want to see me do that, which is a different issue.
    30 Dec 2012, 08:09 PM Reply Like
  • D-inv
    , contributor
    Comments (4114) | Send Message
     
    "you're wrong.

     

    it is a cut in benefits compared to the baseline. "

     

    The social security "baseline" IMO is one's initial benefit amount which is computed without reference in any way to CPI. It is determined by one's own reported wage earnings and nationwide average wage changes over time. That is, in computing a benefit for someone filing for benefits at age 67 in 2013, wages earned in 1983 would be indexed higher by change in average wages between 1983 and 2012 (possibly 2006). Earnings after age 60 are not indexed in any way for purposes of computing SS benefit amounts.

     

    I repeat, "The Republican proposal is to change the rate of change in future INCREASES in social security." Its implementation would neither reduce current federal spending in any way nor change computation of a person's initial social security benefit check.

     

    I do not accept your judgment.
    30 Dec 2012, 08:42 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    Why you complain so damn much? As most republicans say, you should be happy you even have a job...
    30 Dec 2012, 10:58 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    Perhaps you need to talk to an accountant?
    30 Dec 2012, 11:00 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    Since when did we become an empire? This is insanity....
    30 Dec 2012, 11:01 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    And you got this deal for just being born.....cool, huh?
    30 Dec 2012, 11:02 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    Tom - you know that those cuts to SS contributions have only been for the last 2 years and was a political ploy anyway.
    30 Dec 2012, 11:37 PM Reply Like
  • User 489326
    , contributor
    Comments (272) | Send Message
     
    mickmars I don't know where you get your rates but the "employee" rate is 6.2%. The only way you would pay 15.2% is if you are self employed. What I don't understand is why there is a cap on the amount of wages subject to FICA. What I would like to see is how much do wealthy receive in SS benefits vs how much they paid in. They are probably in the max benefit bracket. Now compare that to a low income wage earner and how much they paid in.
    31 Dec 2012, 01:13 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    There is a cap on payroll taxes so that they can be the most regressive taxes ever. That is also why Republicans are lways willing to raise payroll taxes.
    31 Dec 2012, 01:15 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (3566) | Send Message
     
    mickmars, you're exactly right and I've called Armistead on his bs numerous times. He never paid close to 15.3% during his working years (more like 5% to 6%), and he wants to pretend that the pyramid scam that he's used to loot from younger generations can continue without acknowledging that we'd need a similar increase in FICA + Medicare taxes going forward. Another doubling or tripling of these taxes going forward isn't going to happen.
    31 Dec 2012, 02:11 AM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    I'm an employer, and you better believe that entire 15.2% (SS and Medicare) is included in the what I consider an employee to be paid.

     

    If the entire 15.2% was paid by the employer, I guarantee you salaries across the nation would drop. It all comes out of the same bucket... the worker's.
    31 Dec 2012, 07:42 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    RSI, you couldn't be more wrong. I would be considered in the "younger" crowd being in my early 30s, and I have a huge problem paying in, and not only I'm afraid I won't collect, I'm certain of it. And so are other like minded people of my age.

     

    The problem is the general apathetic nature of people in the younger generation. I consider myself an exception. I follow the stock market, save money, adjust investments, and am very active well ahead of the curve in planning my financial future for retirement. Most people in my general age bracket have the careless attitude that the government will take care of them when they're older. They have this attitude because that is what they are being told. We live in a society where delayed gratification is for the suckers who don't want to have any fun. And that is exactly what is killing America.

     

    I'm not all that worried about the immediate future. Baby boomers that are retiring at least have some sense of personal responsibility, and that is why many of them are fiscally solvent without Social Security. Many older people have financial security in the inflated values of their homes. I don't believe that will happen for the younger generations. I have a feeling that there will be too many people in 20-30 years that get to retirement and find that they have no pension, no IRA, no 401(k), and no Social Security waiting for them.

     

    Then what will we have to become? Socialist. Totalitarian. I know, it sounds extreme. But when you look at taking a walk from New York to California, it looks awfully long. The first step seems futile. As does the second. Insignificant. Regressive even. But walk long enough, and eventually you'll find yourself at your destination. Do we not see ourselves walking this path? Government run healthcare. Social security that is on the path to fiscal insolvency. Currency inflation. Surrendering of liberty for security.

     

    I hope I'm wrong with all of this, and I know I went on a bit of a rant, but that shouldn't detract from the ultimate point, which is I would much rather have the option of planning my own retirement, as opposed to throwing that money into the federal blackhole, where I will see little if any of it back in my pocket in my lifetime.
    31 Dec 2012, 08:56 AM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    bbrady413

     

    Couldn't be more wrong? I've been alot more wrong in my life but this isn't a case of that. I am in your age group also and have been investing for well over a decade, many people I know around my age are well aware of their financial necessities going forward and I dare to say have a HIGHER financial IQ than many baby boomers.

     

    That being said alot of what you say is true one I don't agree with is the likelihood of SS being completely gone in 30 years. I have been paying in for almost 20 years at this point and it damn well better be there (although by then with any luck i"ll just need it for beer money)......it may be in an altered form with the days of it actually supporting someone being gone but it'll be there.
    31 Dec 2012, 09:50 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    How are you so sure it'll be there? It is running an operating deficit. It is filled with low yield government treasuries, that are only being paid back by inflating our currency! Of course it could be there in 20 years, but if it is, it'll probably be essentially worthless. I want it there in 20 years as much as you do, as I've been paying in for as long as you have, but I'm not holding my breath on it, and I'm certainly not planning my future with SS as any significant part of my retirement picture!

     

    And I disagree with you on the apathetic nature of our generation. Most don't know the difference between the federal debt and deficit, unfunded obligations, the payroll tax, the Medicare tax, what an IRA or 401(k) is, what they are invested in, if anything at all. Most take the liberal mainstream view and look at government and view it as a source of free money, and then look at big business as a source of greed and disparity, yet they do that while driving their corporate owned gas guzzler and talking on their corporately produced smartphone, while drinking their corporately brewed mocha latte frappa-whatever-the-he... And then they say how poor they are. Its really sad how willfully ignorant this society has become. Very few want to have the responsibility of knowledge, because most have no personal ethics when it comes to responsibility at all!
    31 Dec 2012, 10:06 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    By the way RSI, I don't know where you live. My view could be a bit bitter and cynical considering I'm a staunch fiscal conservative investor living in blue-as-it-gets liberal New England on the Mass/Connecticut line.
    31 Dec 2012, 10:07 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Brady, since you are certain that you won't be paid social Security, would you be willing to sell your future SS checks to me for, say, a cent on the dollar? Let's see how sure you are. I am pretty sure that you will be paid.
    31 Dec 2012, 10:29 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Why not move to the conservative haven in the south?
    31 Dec 2012, 10:30 AM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    bbrady413

     

    "Most take the liberal mainstream view and look at government and view it as a source of free money"

     

    I would argue the so-called conservative farmers, dairy producers etc. (who blatantly steal from us daily) have that same opinion....oh as well as most of the mulitnationals in this country. I wouldn't necessarily consider that a "liberal mainstream" view my friend.

     

    We'll have to agree to disagree I couldn't possibly agree that MOST of an entire generation has no personal ethics or responsibility. Or that VERY FEW want knowledge. Let's face it we are in a stage of our lives where personal ideas are changing.....because of the difficulty in the job markets maybe more than usual some are stuck in the "save the whales" phase.

     

    I spent my entire late teens and 20s in the military so I guess I "grew up" a little quicker and never had that phase.
    31 Dec 2012, 05:55 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    bbrady

     

    Those checks will likely be there when you retire but they will be worth less AKA worthless. We will drive inflation and hit you with a hidden tax so you can't say you were screwed directly but indirectly you are a slave.

     

    Bigger issue for you is to protect the assets you have that are not in SSA.
    31 Dec 2012, 06:25 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Tom, will you sell those worthless payments to me for pennies on the dollar? I will pay cash. You can do what you want with the money.
    31 Dec 2012, 06:35 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    I would sell them in a heartbeat but I get to set the price.
    1 Jan 2013, 03:34 AM Reply Like
  • Deltascared
    , contributor
    Comments (289) | Send Message
     
    ICANDOITDON -- Amen. I mention wars only to defend American lives or to make money and people go nuts!
    1 Jan 2013, 08:46 AM Reply Like
  • Deltascared
    , contributor
    Comments (289) | Send Message
     
    Then make money on wars. We are accused of it anyway.
    1 Jan 2013, 08:47 AM Reply Like
  • Deltascared
    , contributor
    Comments (289) | Send Message
     
    Those guys didn't have a media full of dumb, state school educated dreamers and Code Pink to deal with.
    1 Jan 2013, 08:48 AM Reply Like
  • Deltascared
    , contributor
    Comments (289) | Send Message
     
    Why don't we give them $10,000 a month?
    1 Jan 2013, 09:01 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    They are worth nothing according to you. If you set a price that is worth more than nothing, that will only go to show that you were just trash talking SS. You know very well that you will get all the payments.

     

    That was my point. I have challenged many who claim that SS won't be there for them to sell their future payments to me for pennies on the dollar. Everyone backed off. See, they all know that they will get SS. They were just parroting what they heard on right wing talk shows.
    1 Jan 2013, 11:01 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    MI

     

    Really I negotiate for a living. Since you are a big believer I know you will want to pay the face value amount less some discount.

     

    Now put up or shut up.

     

    Checkmate!
    1 Jan 2013, 01:06 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Face value less 90% discount is a very generous offer since you expect to receive face value minus 100%. Put up or shut up.
    1 Jan 2013, 01:23 PM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    MI,

     

    Pennies on the dollar isn't worth it, merely due to the slim possibility that the money could be there. I don't have a crystal ball. I'm not 100% certain it won't be there. Nobody can give a guarantee like that. But like TVP said, it could be there but pumping out checks that have essentially no value due to the inflated nature of our currency, but that could still potentially be worth more than the pennies you give me today. That doesn't make it a valuable program, but its merely a gamble. Your pennies don't compensate for my SS being worth zero.
    1 Jan 2013, 01:28 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    What do you think is the probability? Let's use that to discount. So if you think the probability is 50-50, I will buy it from you for 50 cents on the dollar. So go ahead, name your probability.

     

    I have given this test to many who believe SS will not be there for them. The result has been __100%__ in favor of people declining to sell their future SS payments to me for anything less than face value (adjusted for interest rates and inflation expectations). That means they believe that SS will definitely be there.

     

    But they are merely posturing when they say that SS won't be there.
    1 Jan 2013, 01:32 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    MI

     

    You are a babbler.

     

    I will throw the pennies on the floor as I don't care about immaterial amounts.

     

    I will sell them at a NPV calculation using double the current 10 year note rate. And I make no new payments going forward.

     

    Come on big believer. That's an annuity discounted at twice a market rate.

     

    You are in over your head.
    1 Jan 2013, 01:47 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Tom, Since you believe that you will get nothing out of SS, what's the point of the NPV? Or do you believe that you will, after all, get something out of SS? ROFL!
    1 Jan 2013, 02:07 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    MI

     

    Well I am just valuing them as they would clear the market today according to your genius insight. And I would discount them heavily and transparently so you could benefit. My benefit is I get cash to invest and I will smoke the amount you get later if anything at all. Then I would visit you in the poor house and ROFLMAO.

     

    If I am going to give them away I would just give them to charity.
    1 Jan 2013, 11:02 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Well Tom, clearly the market believes that SS will be there, but you know better than the market, right? You know SS won't be there. Or are you backtracking on that now? So many do.
    1 Jan 2013, 11:05 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Damn right I do as shown by my track record of investing. I would bet on me before the USG in a nano second.

     

    In the meantime if there is a sucker like you that wants to buy them I am all too willing to sell them.

     

    Down deep you know you are the sucker because you know I would have a pile of money in my hand in 15 years and complete control over my investments and you would be taking your walker to the mailbox from your double wide trailer.

     

    I won't even bother to LMAO. I am too busy.
    1 Jan 2013, 11:11 PM Reply Like
  • Terry330
    , contributor
    Comments (867) | Send Message
     
    No cuts in elderly social security to cut taxes again for the top 2%. Shame on Republicans, American voters will remember.
    30 Dec 2012, 04:09 PM Reply Like
  • HoldAndBuyInvestor
    , contributor
    Comments (146) | Send Message
     
    Yeah. I will remember when there will be no SS in another 14 years. We will remember Obama drove US bankrupt. Look at the financial history of Greece, once a prosperous nation.
    30 Dec 2012, 04:52 PM Reply Like
  • bgold1955
    , contributor
    Comments (2041) | Send Message
     
    Would you rather have Bush's proposal in 2005 where SS funds would have been privatized and in the stock market?
    30 Dec 2012, 05:20 PM Reply Like
  • rhgordon3505
    , contributor
    Comments (28) | Send Message
     
    To bgold1955. Simply put, the answer is an unequivocal YES. Defined contribution vs. defined benefit and YOU make your own investment choices...unless your emotional dependency on the Feds is just too great.
    30 Dec 2012, 06:11 PM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    I would rather just keep that money I contribute to Social Security. I will never see that money, and if I do, it'll be a pittance. I can do far better than the US government can. And if I can't, I'm willing to accept the consequences.

     

    And Terry, I just have to say, you are a moron. Who is cutting taxes for the top 2%?
    30 Dec 2012, 06:13 PM Reply Like
  • mattskin
    , contributor
    Comments (67) | Send Message
     
    In the time of Plato, maybe. Not in the modern age.
    30 Dec 2012, 06:48 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    bbrady, you are obviously just a mean guy. You should want to throw a good portion of your check into the abyss every month.
    30 Dec 2012, 06:58 PM Reply Like
  • HoldAndBuyInvestor
    , contributor
    Comments (146) | Send Message
     
    Yes, just like 401k. Your money, you control it. Under Obama, even though I am paying for SS, I wont get anything back.
    31 Dec 2012, 12:07 AM Reply Like
  • HoldAndBuyInvestor
    , contributor
    Comments (146) | Send Message
     
    Well said abou Terry. Its rather a he who is freeloading on others.
    31 Dec 2012, 12:08 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    "Yes, just like 401k. Your money, you control it. Under Obama, even though I am paying for SS, I wont get anything back. "

     

    So the NPV of you future social security payments must be 0, eh? I will be happy to take those payments off of your hand. Will you sell them to me?
    31 Dec 2012, 12:13 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (3566) | Send Message
     
    "Would you rather have Bush's proposal in 2005 where SS funds would have been privatized and in the stock market?"

     

    Putting capital into the private sector economy? That's crazy talk. We need to be "investing" SS funds in government debt to finance profligate spending that we can't afford to begin with.
    31 Dec 2012, 02:24 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    You really want the Govt to be the largest shareholder in private companies? You like socialism, don't you?
    31 Dec 2012, 02:26 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    No Macro, he is saying take the government out of the decision loop completely. Why should I be forced to pay into a retirement fund that I have absolutely no control over that is going bankrupt? Seriously Macro, if SS is supposed to be my money, why can't I direct the government to invest it in a corporate bond fund, a stock, an index, or a mutual fund? Why do I have to buy government debt?

     

    I understand the point of SS- money put aside for the years that we can't work- but that money then should not be just thrown down a hole of government largesse. There is no return on investment there.
    31 Dec 2012, 09:04 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Brady, SS is a social safety net. It is an insurance program. Do you get to invest the money you pay to your car insurance? No, the car insurance company decides how to invest it.
    31 Dec 2012, 10:31 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    There is a difference Macro. I buy car insurance voluntarily. Social Security, on the other hand, is taken out of my paycheck directly, and it is done involuntarily.

     

    Let me ask you this Macro- would anybody buy Social Security "insurance" (as you like to call it) if it wasn't mandatory? Or is this another progressive program that is SO GOOD that it needs to be mandatory?
    31 Dec 2012, 11:09 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    In many states, car insurance is a per-requisite to getting a car title. So it is not voluntary there. It is there to protect everyone. Would people buy car insurance if it was not mandatory? Many wouldn't. People are short sighted that way.
    31 Dec 2012, 11:13 AM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    I'd buy it voluntarily if they'd guarantee that I'd get four times my investment back.
    31 Dec 2012, 11:19 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    You still haven't answered my question. Do you think anybody at all would buy into Social Security if it was a purely voluntary program? I think not. Why? Because there are far better performing programs out there that give control to the purchaser of the program/plan/insurance... as opposed to a bureaucrat who takes your premium, spends it elsewhere, and in its place puts an IOU that doesn't even keep up with the pace of inflation, and that you have no access to until the government tells you you are allowed to access it.
    31 Dec 2012, 11:23 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    ME

     

    SSA is not insurance. Macro spin on that one.
    31 Dec 2012, 06:26 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Brady, No one would voluntarily buy into Social Security, because it is an insurance program, and no one wants to buy insurance. They think they are immortal gods of knowledge and need no safety net. Especially young people.
    31 Dec 2012, 06:36 PM Reply Like
  • Deltascared
    , contributor
    Comments (289) | Send Message
     
    Don't look now, but this Dimocrat talking point is getting dull.

     

    Bush recommended accounts. The accounts would be modeled on the Thrift Savings Plan -- a 401-k type program that is already available to government employees -- and centrally administered by the government.

     

    The accounts are up 25% since 2005.

     

    Now what is your problem?
    1 Jan 2013, 08:52 AM Reply Like
  • bgold1955
    , contributor
    Comments (2041) | Send Message
     
    Rhgordon.... I am not emotionally dependent on anything or anyone. Your response gives me the impression you must be. How about it?
    8 Apr 2013, 05:39 PM Reply Like
  • AllStreets
    , contributor
    Comments (1044) | Send Message
     
    Yeah, let's pay down the debt that was run up by tax cuts to millionaires with pay cuts to retirees, those with the lowest incomes. That's surely the way to reverse the sagging real incomes of Americans. Brilliant. There's the class warfare again. Doubly bad, since FICA taxes, mainly for social security retirement, have been twice the level needed for nearly 30 years and the huge surpluses were turned over to the general budget. So much for the lock box. I'm shocked that Obama would suggest it.
    30 Dec 2012, 04:11 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    What are some of your talking about? The older generation and boomers have the majority of the wealth in this country and are getting the majority of government transfer payments?

     

    I am a boomer but this is grossly unfair and embarrassing. And unsustainable.
    30 Dec 2012, 04:42 PM Reply Like
  • rhgordon3505
    , contributor
    Comments (28) | Send Message
     
    To AllStreets: Since taxes, and always have been, nothing more that a transfer of wealth from those in the private sector to the Feds, they aren't "revenues". The problem isn't the government is an underperformning "business", not generating enough revenue to cover its costs, it's that our government won't and can't control spending...of all types. Get rid of defense-spending waste and understand that an aging, less contributory workforce will no longer support continuously more expensive entitlement programs.
    30 Dec 2012, 06:21 PM Reply Like
  • Ed54
    , contributor
    Comments (41) | Send Message
     
    I always find it laughable that we boomers, having been cut off from company pensions and forced to save for our own retirement, are now accused of being the wealthy old guys. I almost am impressed with the size of my 401 until I remember that it is providing about one-quarter of my final year's pay.
    30 Dec 2012, 09:40 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    Social security receipts will be used to buy F-35's at $1Billion a copy, that can be shot down by drones that can be built for $1million a copy...congrats on your contributions!
    30 Dec 2012, 11:04 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    Thomas - why is it unfair? Have you gotten back everything you paid into SS?
    30 Dec 2012, 11:41 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Maybe I was not clear. It is unfair because the younger generation has very little wealth, fewer opportunities given the way this economy is run by the older generation, a future full of massive government debt voted on by the older generation and likely high inflation, and they are asked to carry an older generation that has the wealth and is asking for massive transfer payments for many decades.
    31 Dec 2012, 01:19 AM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    Well, we can talk more about the younger generation carrying the older generation in the future when SS starts to not be able to pay 100% of their required payments.
    31 Dec 2012, 01:54 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2055) | Send Message
     
    Looks real mean on the Repubs; millionaires and billionaires nickel and dime a bunch of seniors living off meager SS.

     

    Sad
    30 Dec 2012, 04:12 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    those meager seniors had a vote in the manner, and in fact, many vote republication. i think of my grandmothers sitting there watching Fox News and complaining everything....
    30 Dec 2012, 05:58 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2055) | Send Message
     
    This unpopular proposal was quickly withdrawn in the latter part of the Saturday afternoon negotiations as I understand it. McCain called it 'No Win Situation' on this one!
    30 Dec 2012, 06:36 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3530) | Send Message
     
    Yes we need to raise the rates on those millionaire professional athletes,
    30 Dec 2012, 08:47 PM Reply Like
  • varan
    , contributor
    Comments (3704) | Send Message
     
    Holding 99% of the people hostage for the benefit of 1%.

     

    So much for the party of ideas.

     

    The just have one idea. Screw anyone making less than $250K.
    30 Dec 2012, 04:13 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    varan

     

    I got an idea. Why don't you explain why some people say it is the top 2% and some say it is the top 1% and others say it is less than 1% and others say it is only people over $1 million in income, etc, etc.

     

    You have no idea what you are talking about but it is easy to repeat class envy political sound bites and we all know that tax increases will continue ongoing for everyone and Dems are happy about it because they want to control everyone.

     

    I will flip it around for you. All young people should be branded because they are slaves for the next 50 years paying off the debt that the older generations are dumping on them.

     

    Enslave the young!!!! Vote for more spending.
    31 Dec 2012, 01:24 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Would you prefer that spending is cut and more jobs are lost? For the young people, of course.
    31 Dec 2012, 01:26 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    Yes Macro, cut the spending. Government spending, with very few exceptions, is forcing the masses to fund the benefits of the few. I pay my federal tax, and that might be used for a mutual benefit of society, like funding the Navy for the defense of our shores. But my tax dollars may also be used to build a busline in New Britain, Connecticut, or used to fund a DUI patrol in Tacoma, Washington, or used to subsidize the healthcare of a single mother in Beaumont, Texas. How are those things beneficial to the society as a whole?

     

    My job as a taxpayer is not to fund federal jobs so that way everybody has one. Will spending cuts hurt somebody? Obviously. But they will need to be done at some point. Its like cutting off a limb with gangrene. I could chop off the tip of my finger now, but it will hurt like hell. But if I wait just to avoid the pain, I may end up having to cut off my entire hand.
    31 Dec 2012, 09:11 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    "my tax dollars may also be used to build a busline in New Britain, Connecticut, or used to fund a DUI patrol in Tacoma, Washington, or used to subsidize the healthcare of a single mother in Beaumont, Texas. How are those things beneficial to the society as a whole? "

     

    Was that a serious question or are you just playing the sociopath to screw with me?
    31 Dec 2012, 10:32 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    That is a serious question. If my federal tax dollars that I contribute are sent to a project that only bestows benefits on the locality it is contained in, how is that to my benefit?

     

    Perfect example. Federal stimulus dollars went to build a paved bike path in my area. How does that bike path benefit somebody that is 3,000 miles away on the other side of the country?
    31 Dec 2012, 11:11 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    MI

     

    Yes cut it. It is an inefficient use of capital.
    31 Dec 2012, 06:27 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    There are other projects in the places 3000 miles away that you are paying for Brady. Have you ever shared anything with a group? Like, say, a roommate? A friend? A SO? That's how sharing goes.

     

    One note. If you live in the liberal states as you do Brady, you are for sure getting less for you Federal dollars than the residents of the conservative states. That's because the liberal states get back less from the Federal govt in tax dollars than they pay in. But someone has to support the conservative states that are in general poorer. They are Americans too.
    31 Dec 2012, 06:39 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Tom, your compassion brings tears to my eyes.
    31 Dec 2012, 06:39 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Save your compassion for when people are really hurting in the next 10 years. Then you will see pain.
    1 Jan 2013, 03:37 AM Reply Like
  • minecanary
    , contributor
    Comments (453) | Send Message
     
    It's going to take SS cuts and a lot more than that to restore financial sanity to this country. This allowing voting blocks to suck the country into Greece territory by demanding benefits is a river that must be crossed.
    30 Dec 2012, 04:13 PM Reply Like
  • bbro
    , contributor
    Comments (9621) | Send Message
     
    We are a long long way from Greece territory...
    30 Dec 2012, 04:15 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    Yep, we can print money. No worries :-)
    30 Dec 2012, 04:23 PM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    Oh yeah, no worries, just keep rolling out those hundred dollar bills. That has no harmful effects on the economy. Oh besides that inflation thing, but thats no big deal right? You know who inflation negatively impacts the most? The poor. The elderly. The people working low wage jobs.
    30 Dec 2012, 06:16 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Where is inflation, Brady? If you find inflation can you please let me know?
    31 Dec 2012, 09:15 PM Reply Like
  • HPBunker
    , contributor
    Comments (219) | Send Message
     
    We could easily solve the political side of our fiscal problems with a maximum voting age. If you can't vote for the first 17 years of your life, why should you be able to vote for the last 17 years? Voila! The elderly will no longer dominate the political process, and the entitlement cuts can begin.
    30 Dec 2012, 04:32 PM Reply Like
  • Seth Walters
    , contributor
    Comments (675) | Send Message
     
    When there are real cuts and the young people feel some pain, they will turn out to vote in droves.
    30 Dec 2012, 04:39 PM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    Unfortunately, we are outnumbered by a much larger generational cohort. The boomers will scorch the earth to protect their entitlements.
    30 Dec 2012, 05:28 PM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    Seth, there would be a revolution in this country if we had to pay taxes in cash. Imagine that? Instead of money being paid that you never see, you have to go down to the tax collector's office and write a check, or bring cash? There would be changes in the fiscal mess of the government faster than you could say austerity.
    30 Dec 2012, 06:25 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    HP - unfortunately its the older generation that has some brains! BTW - what do you want to do about the Extended Unemployment and all the Earned Income Tax Credits, and the Disability SS payments that go to Widows and Children? I guess you want to cut all those entitlements too? Is that right?
    30 Dec 2012, 11:47 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    And hey - CPI off the table again now. LOL. What a joke.
    30 Dec 2012, 04:38 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Boy, even though I am a Democrat, I feel bad for the Republicans. They have absolutely no leverage. I negotiate for a living and I wouldn't want to be in such a sorry position. Hats off to the Democrats though. They are squeezing like ... OK I will leave the rest to your imagination.
    30 Dec 2012, 07:59 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    Hey, they can rename GOP into OOP - obsolete old party. The US really really needs a third party quickly and badly! I feel extremely uncomfortable with the democrats being all mighty soon when GOP loses the house. But who lets extremists rule the party doesn't deserve better I guess.

     

    My prediction: in 4 years there will be a Clinton in the White House.
    30 Dec 2012, 09:53 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Hillary 2016! I voted for her in the primaries in 2008. I also voted for Bill.
    30 Dec 2012, 10:05 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    http://nyti.ms/TWv1F2

     

    Perhaps not.
    30 Dec 2012, 10:16 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    I wish her a speedy recovery!
    30 Dec 2012, 10:43 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    If she lives...I"m sorry to hear about her health...
    30 Dec 2012, 11:06 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    Hillary will probably be dead of a brain clot in the next week.
    30 Dec 2012, 11:50 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Will you be sad if she is not?
    30 Dec 2012, 11:50 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Let's go off the cliff now rather than later. It is only a matter of time.
    31 Dec 2012, 01:27 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    You want to pay more taxes? Or are you short?
    31 Dec 2012, 01:51 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    On the tax side I view this as a 5 to 10 year problem and the longer it goes on the higher the taxes will have to go later. I want to get it over with and have the crap hit the fan so we can get on a known and sustainable course so the pain is less over time. If I take a short term hit fine.

     

    On the investment side I am both short and long. How it will net out I don't know yet.
    31 Dec 2012, 02:00 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    So you just want some quick pain? Hmmm ... well, if that floats your boat ...
    31 Dec 2012, 02:02 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2055) | Send Message
     
    The rich and the super rich, of course, couldn't care less about SS and Medicare.

     

    SS would be peanuts to them, and within Medicare there is an option for "Fee for Service", meaning that they could pick and choose their 'Society (Private) Doctors' at will, even for house calls.

     

    As for the tax rate hike, oh well, that might mean not trading in a BMW 700 Series or a Proche every 3 years. (Me not a fan of the Mercedes though).

     

    Best for the New Year, SA folks!

     

    P.S. In my dictionary, I define a rich as one whose liquid net wealth is greater than or equal to US$15M
    30 Dec 2012, 05:31 PM Reply Like
  • Petelovesamy
    , contributor
    Comments (178) | Send Message
     
    Friday's close, S & P = 1402.43
    Futures, = 1384.95
    ~~~~~~~~~
    Finance, where a -* is a real #
    =================
    - * = bull's l o s s !!
    30 Dec 2012, 05:53 PM Reply Like
  • bgold1955
    , contributor
    Comments (2041) | Send Message
     
    Looks like the futures for the last 4 Sundays.
    30 Dec 2012, 06:22 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    I have some cash on the side to buy the dip :)
    30 Dec 2012, 06:00 PM Reply Like
  • Archman Investor
    , contributor
    Comments (2435) | Send Message
     
    I think what is most sad is that people are at each other's throats, blaming the "other side", etc.

     

    This is EXACTLY what these criminals in Washington want. There is no 2 party system in this country. They are one group of corrupt individuals who are doing everything they can to extract every bit of life from US citizens.
    I said in a previous post:

     

    -----One thing the rich do very well, that the middle and lower classes do not.... they do not sit around waiting for bad things to happen, then cry about them.
    If anyone thinks that people with real wealth, real money and real power are sitting around waiting for things to get resolved, then they are truly living in a dream world.

     

    When are people going to wake up and realize that there is only one class that bears the brunt of every pathetic and bad decision that comes out of Washington: The middle class.

     

    Trust me folks: in the end, the rich are not going to pay,the poor are not going to pay and those tens of millions of Americans living off other Americans are not going to pay. The middle class are going to pay. Just like they always pay and yet they keep electing the same clowns to office (regardless of political sides) year after year, decade after decade.

     

    If you are not in self preservation mode at this point...yikes.------

     

    I think that last sentence of my post says it all. I could care less what the outcome of the fiscal cliff is, debt ceilings, etc. It is meaningless to me. Completely and utterly meaningless. I think those that are like me, who have taken steps over the past decade to set themselves up for themselves and their family going forward know what I mean.
    The writing has been on the wall since the late 90's. It is unfortunate that the 21st century has brought the complete dumbing down of the population which has led to a false sense of hope and a complete abandoning of sensibility.

     

    I summed it up further in another previous post a couple of weeks ago:

     

    ----It is every person for themselves now. Anyone following any of these mindless politicians is going to be so far down the hole they can never climb back out.

     

    Dividend paying stocks....check.
    Physical gold and silver....check.
    Multiple streams of income....check.
    Self reliance......check.
    Ability to think for one's self...check.
    Prepared for anything....check.

     

    Watching America implode while the 80% of American losers end up blaming each other for their own pathetic outcome....check, check and check.-----

     

    Folks I apologize. I am not calling anyone here on SA a loser. Most people here on SA are going to be the people who are left standing while the rest of America tears each other apart blaming each other and their pathetic elected officials for not giving them their bottle and their binky.

     

    I want all those who can recite verbatim the MSNBC and FOX mantras to step back and realize you are being used. You are exactly what they want. They want you to hate your fellow Americans, follow their cause right over the cliff and ignore the real truth:

     

    That our government has become nothing more than a self serving enterprise bent on destroying the middle class and enslaving as many people as possible.

     

    In the end the fiscal cliff, debt ceiling, etc will not touch the rich, it will not hurt the poor and it will not hurt the takers......it will as it has always done affect one class and one class of people alone: The middle class!!
    30 Dec 2012, 06:31 PM Reply Like
  • kcr357
    , contributor
    Comments (560) | Send Message
     
    Bingo. It's really humorous when Americans get riled up over the latest gov. policy that claims to help them out by extorting money from rich people to pay for their housing, food, healthcare, phones, ad infinitum.
    "Trust me folks: in the end, the rich are not going to pay,the poor are not going to pay and those tens of millions of Americans living off other Americans are not going to pay. The middle class are going to pay. Just like they always pay and yet they keep electing the same clowns to office (regardless of political sides) year after year, decade after decade."
    30 Dec 2012, 07:17 PM Reply Like
  • WMARKW
    , contributor
    Comments (10334) | Send Message
     
    Right on. Anyone who thinks there are two parties instead of one has not been watching very closely. Don't listen to what they say. Watch what they do.
    30 Dec 2012, 11:55 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    AI

     

    1000 thumbs up!

     

    I will call people losers who continue to get sucked into this dysfunctional charade. Maybe sucker is a better term. They will lose if they continue to believe "my party is right and everyone else is evil."

     

    Dumb and dumber.
    31 Dec 2012, 01:41 AM Reply Like
  • sethmcs
    , contributor
    Comments (3228) | Send Message
     
    Oh no! I have to sell stocks to buy milk. Where's my pitch fork?
    30 Dec 2012, 06:45 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    one thing is true, and this applies whether the money was paid in by the indivudal or not, is that people REALLY like getting government checks. I think it's high time we acknowledge that. Me - I've never gotten a check from the government, but whenever I do qualify, I am sure I will eagerly await it in the mail every month.
    30 Dec 2012, 06:45 PM Reply Like
  • Cliff Hilton
    , contributor
    Comments (1574) | Send Message
     
    mickmars

     

    Your afraid that you won't have SS to draw when you're old and ready to retire? Work and save now. Your country will thank you less. You are whining! You won't have time to whine if you work 345 days a year, 10 hours a day like I do. I am being conservative. You can too be part of the top 5% headed to the top 1% like me. I have done this since the Great Recession started and will continue to it's end. I managed this without debt. I never cry about my situation since that accomplishes nothing. Go have a conversation with your father, he would love to see your post. All of you should work more and ask for nothing. Are you too entitled to something? I have paid more in to SS than you. I don't expect to receive but a small portion of it as I know, by then, that they will have passed a law that modifies my initial take according to what I have saved. I hope to have saved so much that I will not receive a penny. What the government taketh, it will surely keep. For the elders here at this conversation, I hope all it well with you. I surely respect that "Great Generation". You children pale in comparison. Try to fill their shoes...
    30 Dec 2012, 07:33 PM Reply Like
  • jirim
    , contributor
    Comments (19) | Send Message
     
    do you think, that they will be not able to BUY a BMW 700 Series or a Proche every 3 years:(
    PLS increase vat to 15 % and use surplus
    30 Dec 2012, 08:00 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    OK, so futures are up. Nice.
    30 Dec 2012, 08:03 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    Macro- the futures are up but well below fair value. they went down more after regular trading closed on friday and are still below that point
    30 Dec 2012, 08:33 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Brian, That they are up tonight means that as of right now we have more buyers than sellers. Who cares what happened in the past? They are down by more than 5% in the past 6 sessions. That's water under the bridge.
    30 Dec 2012, 08:36 PM Reply Like
  • cash
    , contributor
    Comments (447) | Send Message
     
    They need to cut medicare & medicaid, reduce payments to doctors, put in place a collective bargaining for prescription drugs and such to get the costs under control. Focusing on ss is a mistake
    30 Dec 2012, 08:40 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    I agree that collective bargaining for prescription drugs is a must. The Republicans will be upset, and they blocked it last time, but if we are serious about cutting costs, we have to do what it takes. As for cutting payments to doctors, I would take a slightly different approach. First, we need to increase the number of doctors in the USA. The medical community doesn't graduate enough doctors to keep wages stable. Let's start by importing foreign doctors. Then, let's aggressively remove virtual quotas for medical students and also fund their educations so that they don't have to worry about loans. Then let's cut payments for doctors.
    30 Dec 2012, 08:43 PM Reply Like
  • chopchop0
    , contributor
    Comments (3344) | Send Message
     
    how about we reduce all those public sector wages too while we're at it
    30 Dec 2012, 08:57 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    I have no idea if those wages are too high by market standards. Are they? If they are, then sure. Let the market rule.
    30 Dec 2012, 09:03 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    uhhh...Public wages are not as high as the K.O.C.H. brothers would have you believe.....if you compare skill level by skill level and the salary for each, you may be shocked to find public sector workers make the same, or much less than equivalent private sector.....don't just listen to the rhetoric...go get actual stats (not made up stats from some "think-tank") and make up your own mind.
    30 Dec 2012, 11:12 PM Reply Like
  • chopchop0
    , contributor
    Comments (3344) | Send Message
     
    did you find that out from your monthly AFL cio mailing?
    31 Dec 2012, 06:52 AM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    You are totally discounting the value of the guaranteed pension payouts as part of the compensation package for federal workers.
    31 Dec 2012, 10:18 AM Reply Like
  • D-inv
    , contributor
    Comments (4114) | Send Message
     
    Medicare and medicaid need to get out of the price control business altogether. Current low payments to doctors, hospitals, diagnostic labs, etc. for treatment of medicare/medicaid patients forces those providers to either decline to provide services or provide service to those patients and charge all other patients higher fees which pushes up insurance premium rates and co-pays for everyone not on medicare/medicaid. The current system concentrates price discrimination into an ever smaller share of the medical care service market.
    30 Dec 2012, 09:05 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    We need universal health care. In a single payer system, there will be uniformly low prices and no price discrimination. That's the only way to control rising medical costs.
    30 Dec 2012, 09:06 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    As a physician, I am wondering if we will get some free consultation from the post office and the DMV so they can inform me how to better run my practice under the single payer system.
    30 Dec 2012, 09:25 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    How do they do it in Canada and the UK?
    30 Dec 2012, 09:30 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3530) | Send Message
     
    Ration care to the elderly.
    30 Dec 2012, 09:35 PM Reply Like
  • varan
    , contributor
    Comments (3704) | Send Message
     
    @Macro Investor
    " How do they do it in Canada and the UK? "

     

    Just like in the USA.

     

    Missionary position mostly.
    30 Dec 2012, 09:36 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    How much do they pay the medical institutions?
    30 Dec 2012, 09:36 PM Reply Like
  • varan
    , contributor
    Comments (3704) | Send Message
     
    Do you have to pay for it in the USA? That's the first time I have heard that.
    30 Dec 2012, 09:38 PM Reply Like
  • chopchop0
    , contributor
    Comments (3344) | Send Message
     
    Canada outsources to private for profit practices

     

    http://nyti.ms/WUokQV
    30 Dec 2012, 09:38 PM Reply Like
  • DavyJ
    , contributor
    Comments (416) | Send Message
     
    I miss the thumbs down.
    30 Dec 2012, 09:46 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Me too.
    30 Dec 2012, 10:06 PM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    Why don't they have a thumbs down? That would be a great sentiment indicator on these boards.
    31 Dec 2012, 09:37 AM Reply Like
  • Tricky
    , contributor
    Comments (1583) | Send Message
     
    Because the thumbs up/down were totally worthless. I can't tell you the number of times someone posted something thoughtless and got 62 thumbs up.
    31 Dec 2012, 10:19 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    So, the Senate has adjourned without an agreement and futures are still up. This market really wants to go higher.
    30 Dec 2012, 10:09 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    I still think we see a full, or near full, extension of the Bush tax cuts. Obama will get the debt ceiling bumped up to $19 Trillion in exchange. No real spending cuts anywhere.
    30 Dec 2012, 10:28 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2055) | Send Message
     
    mickmans

     

    You are absolutely right on!

     

    This whole show is a set-up and a scam.

     

    There won't be any cuts at all. From where I live, looking out of the window of a McDonald I see government and government contractor folks streaming into line. Wow, everybody is snapping up Lexus, Acura, BMW, Mercedes, Audi.

     

    This is a sign that no cuts are coming; they the bureaucrats know best! They have a Protector-in-Chief downtown DC!

     

    He will get his extra $3T new ceiling before the inauguration.

     

    Welcome to the Obama Boom Town reminiscent of the Wild Wide West!
    30 Dec 2012, 11:01 PM Reply Like
  • jsijimmy
    , contributor
    Comments (335) | Send Message
     
    How can we cut spending when defense "needs" $100's of billions more for a "universal star fighter???" gotta have those star fighters to kill martians (not all martians, just the communist ones)...
    30 Dec 2012, 11:14 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    Hey you seen War of the Worlds right?

     

    Never can be too prepared.
    31 Dec 2012, 01:44 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Are aliens attacking?
    31 Dec 2012, 01:53 AM Reply Like
  • muckdog
    , contributor
    Comments (57) | Send Message
     
    Actually, slowing the growth rate of Social Security benefits is a very practical approach.
    31 Dec 2012, 01:31 AM Reply Like
  • Bear Bait
    , contributor
    Comments (671) | Send Message
     
    I don't understand why everyone is even talking about Social Security. It is not part of the deficit and spending problem. The only "general" funds going into SS are those use to pay the interest on all the US debt held by the SS Trust fund.
    31 Dec 2012, 01:38 AM Reply Like
  • btrahan
    , contributor
    Comments (16) | Send Message
     
    “The actual liabilities of the federal government—including Social Security, Medicare, and federal employees' future retirement benefits—already exceed $86.8 trillion, or 550% of GDP”.

     

    http://on.wsj.com/WUTYhc
    31 Dec 2012, 02:15 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Thank goodness the GDP is an annual number, while those liabilities are spread over many decades. Otherwise we would actually be in trouble.
    31 Dec 2012, 02:17 AM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    Macro, do you think Obama will ever have our deficits below $1 Trillion? If so, how?
    31 Dec 2012, 11:40 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Why would I want deficits to be under $1 Trillion when a very fragile recovery is under way? Why would I want my investments to crash? I am not suicidal.
    31 Dec 2012, 11:42 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    That is no different than saying that you wouldn't want your credit card to be anything but maxed out, because otherwise you might not live as well. The difference here is that there is personal responsibility attached to a credit card, so you may not do that. With the federal deficit, you feel a sense of removal from it since it is the responsibility of "society," not individuals. But what is consistent in both cases is that the debt needs to be paid eventually. Its only a matter of whether you pay it, or you pass it off to somebody else down the line.
    31 Dec 2012, 11:47 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Poor analogy. What I am suggesting is taking debt when times are bad and paying it off when times are good.
    31 Dec 2012, 11:51 AM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    So that should be done regardless of the ability to pay for it at all?
    31 Dec 2012, 11:54 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Of course not. The ability to pay back is key. That's why when you take the debt you invest it in the economy in areas that stimulate growth. It's like taking a student loan to increase your income.
    31 Dec 2012, 11:56 AM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    So the "fragile recovery" will last another 4 years?
    31 Dec 2012, 12:28 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    the problem is, the govt debt largely isn't used to invest in ANYTHING.... it's mainly to pay current expenses.
    31 Dec 2012, 12:32 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    I hope it does. Otherwise we are all screwed.
    31 Dec 2012, 12:38 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Brian, There I agree with you.
    31 Dec 2012, 12:39 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    No government pays off debts when times are good (See Clinton and Bush). We're all Keynesians now....

     

    Let's just hope nobody sees that the Fed is just monetizing our federal debts and all will be okay.
    31 Dec 2012, 12:54 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    The Feds should have monetized the debt a long time back. By the way, when Clinton had a surplus he did pay off a little bit of the debt.
    31 Dec 2012, 01:02 PM Reply Like
  • bbrady413
    , contributor
    Comments (757) | Send Message
     
    Macro, in theory yes, the government could run small deficits during the bad times, and pay off that debt in the good times, but lets be realistic- it never works that way. We run small deficits in the bad times, and large deficits in the good times. Spending other people's money is a hunger that can never be fully satiated. The only reason it stops is because governments eventually run out of other people's money to spend, and that results in collapse.
    31 Dec 2012, 01:20 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    This has been going on for the past several centuries. How many countries have collapsed, and how many have prospered? It you are a betting person without any ideology whatsoever, a pure numbers guy in other words, which way would you bet?

     

    Brady, Never, ever, let your politics or your morality come into play when investing or choosing a course for the economy. Economy is not a morality play. It's all about money.
    31 Dec 2012, 01:25 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    So, since Japan can print their own money, they can get to 1000% debt to GDP with no problems?

     

    Money printing works great..... until the day it stops working.
    31 Dec 2012, 02:45 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    I hope they monetize the debt with the printed money. Bernanke told them to do it in 2002. They didn't listen. they need a higher inflation target, something like 5%. But they are unwilling to have an inflation target in excess of 1%. For shame! See Mick, debt is relative. Inflation erodes away the debt load.
    31 Dec 2012, 04:37 PM Reply Like
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    A 5% inflation target? We had that under Carter and it didn't work out so hot.

     

    Personally, I don't care what they do in Washington. I know inflation is the long-term plan and am positioned for it. Those in bonds and cash will be wiped out when inflation begins in earnest.... being led like sheep into 'safe assets'.
    31 Dec 2012, 04:52 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    there is some irony that if the Fed monetized debt, it would raise inflation which would also minimize the impact of the remaining debt. The only problem is that the trillions of dollars that have to be rolled over would go at much higher refinancing rates. That's what kills countries that think they can pull this off. Check with Greece.
    31 Dec 2012, 04:53 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    of course Greece couldn't monetize since they can't print their own currency, but you see what I mean.
    31 Dec 2012, 04:54 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    There was a 5% inflation target under Carter? I learn new history every day on SA. Wow!

     

    I do agree that the risk off guys will be wiped out under the inflation scenario. At some point they will move to equities and then watch out above.
    31 Dec 2012, 05:02 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Why would it have to be rolled over Brian if the debt is monetized? When the Fed monetizes the debt the debt simply goes away. It disappears. Into thin air. Poof. The problem with Greece is that it cannot print its own currency to monetize its debt like it used to be in the past.
    31 Dec 2012, 05:03 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    I don't see what you mean Brian because Greece is not monetizing the debt. The problem there is totally different, in that they are forced into austerity when precisely the reverse is needed.
    31 Dec 2012, 05:04 PM Reply Like
  • Brian Abbott
    , contributor
    Comments (148) | Send Message
     
    sure, they were targeting 5% inflation when it was actually 15%. well, probably not until Volcker under Reagan
    31 Dec 2012, 05:07 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    ROFL Brian.

     

    Look the 1970s inflation was oil induced. We all know that. It was not due to expansion of the monetary base.
    31 Dec 2012, 05:12 PM Reply Like
  • D-inv
    , contributor
    Comments (4114) | Send Message
     
    "Look the 1970s inflation was oil induced. We all know that. It was not due to expansion of the monetary base. "

     

    You best look at the numbers a bit closer.
    31 Dec 2012, 05:53 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    This debt monetization strategy has a short shelf life. The US is still the reserve currency of the world as we are still the largest economy in the world and are relatively stable politically believe it or not.

     

    However we are becoming a smaller portion of the world GDP and China will likely pass us inside 10 years which means we become less important and we are dictated the terms and they will be painful.

     

    The clock is ticking.
    31 Dec 2012, 06:32 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Show me, D-inv.
    31 Dec 2012, 06:40 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    USA will be the second biggest economy for the next 100 years. Trust me, no one dictates terms to the second biggest economy. USA tried to dictate terms to China and failed.
    31 Dec 2012, 06:41 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    Tax evasion is the national past-time of Greece. Solve that and quite a bit less austerity would be "needed". The other issue is corruption on a scale far beyond what other western governments have yet attained (if ever). A look at either Spain or the UK would provide a more valid comparison for the United States.
    1 Jan 2013, 12:25 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Well said. It always gives me a chuckle when the Tea Party Patriots claim that USA is going the way of Greece.
    1 Jan 2013, 12:34 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4845) | Send Message
     
    MI

     

    Where do you get these baseless stupid axioms?
    1 Jan 2013, 03:37 AM Reply Like
  • D-inv
    , contributor
    Comments (4114) | Send Message
     
    "Show me, D-inv. "

     

    YOU show me where monetary expansion did not occur in the wake of the Arab oil embargo and Iranian revolution. Your statement,
    "Look the 1970s inflation was oil induced. We all know that. It was not due to expansion of the monetary base" is one of the most absurd economic arguments I have encountered on Seeking Alpha.
    1 Jan 2013, 06:37 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    Prove me wrong, D-inv.
    1 Jan 2013, 11:04 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    " MI

     

    Where do you get these baseless stupid axioms?"

     

    Goblins.
    1 Jan 2013, 11:04 AM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    There is a very real feeling of concern amongst a segment of Americans about the troubles in Greece happening here. It's not a pillar of Tea Party rhetoric any more than it is a concern of Occupy WallStreet. In a way I think it is healthy to have these groups raising concerns, because that creates awareness. People do not need to disagree with them in order to understand those concerns. Obviously some people consider TP and OWS arguments and concerns as baseless, and the major media certainly tried to brand them as nutcases and extremists. However, when you look at the residual affects of those groups, then you see some actions being taken on bank regulations, and you see new Congressmen coming in to replace politicians who were entrenched in DC for decades. Those effects on the structure of politics might look sloppy at first, but it should be glaringly obvious that the old guard of aging multi-term politicians is genuinely worried about getting booted out of the political class.

     

    That's not to state that comparisons with Greece are without any connection to reality. Maybe I am tough on Greece since I am German, but I have tried to understand the issues there. I also have several Greek friends, and their views make for interesting looks at the economy there. Greece has a political elite, and now with the Lagarde List we see examples of prominent Greek politicians, and those who influence politicians, enriching themselves at the expense of the common people. When we see politicians in the United States, and their families, benefiting financially from being in office, then are comparisons with Greece really that extreme?

     

    The idea behind this is for people in the United States to try to do something now, and over the next few elections, to change the status quo dysfunction of Washington, D.C. I think that absolutely people should be concerned, on many levels. Whether one drinks Republican Koolaid or Democratic Koolaid, I think most people in the United States feel that the current make-up of politicians is unable to accomplish much of anything. That we would discuss these things on financial forums indicates to me the spill-over of the concern over the present dysfunction.
    1 Jan 2013, 04:31 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9035) | Send Message
     
    You said a lot about what people believe. You said nothing about what is wrong. You totally lost me when you said that politicians are benefiting financially from being in office. While bribery cases do crop up every now and then, the amounts are trivial and the punishments are medieval. Let's get our facts straight here, shall we, Mr Duck?

     

    Do you live in the USA or in Germany? I doubt you live in the USA.
    1 Jan 2013, 05:29 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    I split my time between Texas and California, so I get to see some interesting economic activity. Also, my name is not Duck, nor is it remotely even close to that, so I'm not sure what you mean. As to why I should be concerned about the United States, despite that I am German, there are several reasons. One of the main reasons is that the United States is a very large and important economy, so the economic long term health of the United States is important. There is a saying that if they US catches a cold, then the rest of the world will soon be sneezing.

     

    As to politicians and their families benefiting financially. Did you miss the recent pay raise? Ever look at Senate and Congressional expense accounts? Health care and pensions for life, regardless of how long they stayed in office? They use to be allowed unhindered insider trading, though that was rolled back after public disapproval.

     

    Congressman Cuningham of California was an interesting case. I happened to have met him in California and he seemed like a nice enough guy. While the amount of wealth he amassed, and the real estate deals that fell into his lap were his undoing, I don't know too many people who feel that was isolated. Then there was t