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Barack Obama: Deficit Hawk

carlfense

By carlfense,
in Politics & Religion

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TGHusker Offensive Coordinator

TGHusker

Posted
Posted

OK - I'm not an economist but I'll take a stab at it. If there is a real economist in the audience, please amend, correct, and address this properly:

Cost of money. The Fed is artificially holding down interest rates and financing out debt. Eventually they will have to reverse this policy. We "pay" for the deficet spending one of 2 basic ways: 1. Increase taxes to pay for it 2. the cost of money - interest rates go up, inflation comes into play - the value of the $$ is reduced. We have more $$s to pay for the debt. However, countries holding our $$s will now see that the value of the $ is less. We've already seen the affects of this as fewer countries are wanting to hold our $$s in reserve - bying our treasuries - so the Fed 'buys' it. We have fewer entities wanting to finance our spending habits. China, Brazil, S.Africa, Russia (and i think another country - i believe India) are already talking how they can get away from the USD as a reserve currency and use a basket of other currencies instead.

Right now, it feel AOK - low interest rates, low inflation (however they don't measure inflation like they use to - food and fuel removed from the equation now I believe). But we will end up paying for it one way or another - much higher taxes or greatly reduced buying power of the $$. Since the USD has been the dominant reserve currency in the world, we can get by with printing it - other countries don't have that benefit.

Also, wt the $90 trillion+ (not just the $16T actual debt) unfunded obligations ( our promises for payments on entitlements like Soc Sec, medicare, etc) we are creating a real pit for later generations. This kind of spending is not sustainable - ask Greece.

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BigRedBuster Legend

BigRedBuster

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Nebraska Harry wins the prize.

 

So, let's see. We pay 359,000,000,000 interest in 2012. That is with record low interest rates.

 

Much of this is owned by foreign governments so the American public doesn't even get the benefit of much of this in income.

 

We pay the following for programs people think are very important.

 

Social Security - $860 billion

Medicare - $524 billion

Medicaid - $304 billion

 

Now, wouldn't it be much easier to pay for these things if we weren't paying about the same amount to countries like China?

 

Wouldn't it be much easier to work out trade agreements and other major issues if we didn't owe China so much money?

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BigRedBuster Legend

BigRedBuster

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A quick google search shows that the best I could come up with was in 2005, there were 134.4 million tax returns filed. Of those, 90.6 million were taxable.

 

So, if there are 90.6 million people who pay income tax, that means if we didn't pay interest, we could fund what we are spending now and each of those would have $3,962 more dollars in their pockets instead of paying taxes and having those funds going to China and other foreign investors who own our debt.

 

Anyone mention a stimulus package?

 

If those people take that $3,962 and put it in retirement, how many more people would be set up to live well when they hit 65?

 

If they don't put it in retirement, how much do you think that money spent would mean in job creation?

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sd'sker Defensive Coordinator

sd'sker

Posted
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Your mom must do all your grocery shopping.

leave my mom out of this.

Go look at BigRedBuster's posts above. Nuff said. Unless you just can't grasp that concept... Frankly, if your just picking sides to pick sides.. well.. you're picking the wrong side on this debate.

that is all abstract argument. those are not demonstrable effects.

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JJ Husker Head Coach

JJ Husker

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Would it be an abstract concept if you took 25% of your personal household budget and lit it on fire every year? I understand your question about demonstrable effects but surely you can appreciate what that amount of money could better be doing and realize that it is having a negative effect.

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sd'sker Defensive Coordinator

sd'sker

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Would it be an abstract concept if you took 25% of your personal household budget and lit it on fire every year? I understand your question about demonstrable effects but surely you can appreciate what that amount of money could better be doing and realize that it is having a negative effect.

i am not saying it is ideal, but i do not think it is worth sacrificing better policies that focus on job creation.

 

i had a friend that was looking at an apartment. it was a little expensive, but they had a deal where the first month was free. he argued that was like $50 off a month. the math may have been accurate, but that is not how budgeting works. he may have had extra money, but it would have no effect on his spending. he would have had to pay himself that first rent payment and take away from it monthly. but that is not how budgeting works. even with putting the money away and withdrawing a little monthly his spending would be the same, even though he is saving a percent of his rent. and that is my point. he would have no demonstrable effects on his budget. just like saying the gov't's spending would be different if it did not have to pay interest. spending would largely still be the same and so would the arguments.

 

if the politicians really cared, they would cut spending where it would be the easiest: the military. but they refuse to, so that tells you how much they care about budgeting. it is just posturing and the deficit/debt is the perfect issue to highlight when trying to justify their agenda, which is to neuter gov't.

 

edit: i am really not arguing. i agree it would be great not to have a deficit and to have a balanced budget. but it is not the issue some want to think it is.

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NebraskaHarry Backup

NebraskaHarry

Posted
Posted

Would it be an abstract concept if you took 25% of your personal household budget and lit it on fire every year? I understand your question about demonstrable effects but surely you can appreciate what that amount of money could better be doing and realize that it is having a negative effect.

i am not saying it is ideal, but i do not think it is worth sacrificing better policies that focus on job creation.

 

i had a friend that was looking at an apartment. it was a little expensive, but they had a deal where the first month was free. he argued that was like $50 off a month. the math may have been accurate, but that is not how budgeting works. he may have had extra money, but it would have no effect on his spending. he would have had to pay himself that first rent payment and take away from it monthly. but that is not how budgeting works. even with putting the money away and withdrawing a little monthly his spending would be the same, even though he is saving a percent of his rent. and that is my point. he would have no demonstrable effects on his budget. just like saying the gov't's spending would be different if it did not have to pay interest. spending would largely still be the same and so would the arguments.

 

if the politicians really cared, they would cut spending where it would be the easiest: the military. but they refuse to, so that tells you how much they care about budgeting. it is just posturing and the deficit/debt is the perfect issue to highlight when trying to justify their agenda, which is to neuter gov't.

 

edit: i am really not arguing. i agree it would be great not to have a deficit and to have a balanced budget. but it is not the issue some want to think it is.

 

So what's the issue?

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