Government Shutdown

[zoogs]

. That might be saying more about my stubborness than any reality of the situation.

 

But wouldn't you want to be more about the reality of the situation? Admittedly I don't understand this thoroughly myself, it's why I spoke vaguely earlier. But Krugman's article tschu linked above is fairly edifying, I think. In particular it's not merely a difference of scale. If it were, then the analogy would be wholly compatible and completely relevant. The difference is far more fundamental than that.

 

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

 

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

 

--

 

2- I recall the cries of the sky is falling at the time of the sequester. Dems said reducing/limiting our spending was going to ruin the country and cause mass chaos.

 

I think the point is rather that it will hurt the economy (which is always a long game) because the government's capacity to invest in the future of the country is crippled, while the runaway entitlement programs that are the real bulk of the difficulty are not addressed. I guess opinions differ on the value of government investments, but I suppose we could ask Europe (or Reinhart and Rogoff ) how austerity is going.

 

It doesn't take the sky to literally fall for a policy decision to be disastrous. 9/11 happened and the sky didn't fall for 99% of Americans - our country rolled on, strong as ever. The difference is those were the actions of terrorists trying to hurt us, rather than totally unnecessary, self-inflicted political tantrums. Being able to survive or withstand something is hardly justification for doing it.

[tschu]

They spend too much and , more specifically, waste too much for a little belt tightening to not be a good thing for our financial health. We are living the high life at the expense of our children. It is no more than a gigantic pyramid scheme. If it is so viable, why are pyramid schemes illegal?

Because pyramid schemes are unsustainable and are predatory - they're designed so that the earlier entrants into the system profit massively whereas the later ones will end up with nothing when it collapses. . Government debt is not a pyramid scheme because we manage our debt so that it grows more slowly than the income growth that the government experiences. There is also a guaranteed pool of new entrants into the system because there are always going to be more humans.

 

Now, things like this can be grossly mismanaged and lead to problems (see: social security. LOL Baby Boomers, worst generation of all time) But as a whole the government's debt situation is in very good control.

[JJ Husker]

It's no wonder our government is as out of control as it is. Not only do we allow them to operate the way they do, many people are convinced it makes sense and go out of their way defending the lunacy.

[Whistlebritches]

Although I'm a smart guy I've accepted the fact that understanding the budget for the United States is beyond me. There's just simply no way for me to relate to it. So I have to trust that these economists are correct.

 

I feel like the guys (not JJ) shouting about SEVENTEEN TRILLION DOLLAR$ are trying to scare us with a big number that we can't even comprehend.

[carlfense]

I try to simplify things and I know for a fact that we would be in a better situation with only $5T debt instead of $17T.

Why? I'm not asking for some version of an "it's common sense!" answer. I'm asking why, as a country, we would be better off if our debt was $5T instead of $17T?

 

2- I recall the cries of the sky is falling at the time of the sequester. Dems said reducing/limiting our spending was going to ruin the country and cause mass chaos. Did the sh#t hit the fan? No it didn't . . .

The sequester cuts ramp up over time. The sky won't fall . . . but that doesn't mean that it's not hurting.

[carlfense]

Thursday's Wall Street Journal/NBC News poll hit the Republican Party like a bomb.

 

It found, as Gallup had, the Republican Party (and, separately, the Tea Party) at "all-time lows in the history of the poll." It found Republicans taking more blame for the shutdown than they had in 1995. It found more Americans believing the shutdown is a serious problem than in 1995.

 

Even worse for the GOP is what the pollsters called "the Boomerang Effect": Both President Obama and Obamacare are more popular than they were a month ago. Obamacare in particular gained seven points. (More poll highlights here, full results here.)

 

It's hard to overstate the magnitude of the GOP's strategic failure here: Obamacare's launch has been awful. More than a week after the federal insurance marketplaces opened, most people can't purchase insurance on the first try. But Republicans have chosen such a wildly unpopular strategy to oppose it that they've helped both Obamacare and its author in the polls.

 

This could've been a week when Republicans crystallized the case against Obamacare. Instead it's been a week in which they've crystallized the case against themselves.

http://www.washingto...er-for-the-gop/

[Junior]

Thursday's Wall Street Journal/NBC News poll hit the Republican Party like a bomb.

 

It found, as Gallup had, the Republican Party (and, separately, the Tea Party) at "all-time lows in the history of the poll." It found Republicans taking more blame for the shutdown than they had in 1995. It found more Americans believing the shutdown is a serious problem than in 1995.

 

Even worse for the GOP is what the pollsters called "the Boomerang Effect": Both President Obama and Obamacare are more popular than they were a month ago. Obamacare in particular gained seven points. (More poll highlights here, full results here.)

 

It's hard to overstate the magnitude of the GOP's strategic failure here: Obamacare's launch has been awful. More than a week after the federal insurance marketplaces opened, most people can't purchase insurance on the first try. But Republicans have chosen such a wildly unpopular strategy to oppose it that they've helped both Obamacare and its author in the polls.

 

This could've been a week when Republicans crystallized the case against Obamacare. Instead it's been a week in which they've crystallized the case against themselves.

http://www.washingto...er-for-the-gop/

 

I think the Tea Party GOP has a serious problem with overestimating how many people believe their fringe, whack job crap. You saw it with how convinced they were that Romney was going to win in 2012, and you saw it here with this shutdown.

[BigRedBuster]

The more debt you have, the more of your budget becomes devoted to principle and interest payments. The more that happens, the less the government can actually do that we all love for them to do.

 

This is true no matter if you are an individual family or the federal government.

[carlfense]

I think the Tea Party GOP has a serious problem with overestimating how many people believe their fringe, whack job crap. You saw it with how convinced they were that Romney was going to win in 2012, and you saw it here with this shutdown.

Some of them, probably. Some others (Ted Cruz . . . I'm looking at you) just see an opportunity to gain an advantage through the extremely gullible.

[carlfense]

The more debt you have, the more of your budget becomes devoted to principle and interest payments. The more that happens, the less the government can actually do that we all love for them to do.

Do you think that dumping the borrowed money into the economy has any effect?

[Husker_x]

I am staggered by these numbers. I thought the GOP would take a hit, but this is an utter collapse. 10 points down in one month? Obamacare actually increasing in popularity?

 

Holy hell.

[carlfense]

I am staggered by these numbers. I thought the GOP would take a hit, but this is an utter collapse. 10 points down in one month? Obamacare actually increasing in popularity?

 

Holy hell.

"It's hard to overstate the magnitude of the GOP's strategic failure . . ."

 

Sums it up nicely. Just when we should be seeing a deluge of reports about the Obamacare rollout glitches . . . instead we get to watch a catastrophic implosion of a political party under the weight of it's own crazy.

[sd'sker]

The more debt you have, the more of your budget becomes devoted to principle and interest payments. The more that happens, the less the government can actually do that we all love for them to do.

Do you think that dumping the borrowed money into the economy has any effect?

exactly. for the economy, the gov't is largely the prime mover. that is why it has never made sense to compare it to a household. now, maybe if corporations would share their massive profits, rather than just use them to appease shareholders, the gov't would be less burdened. but the gov't is linked to the economy in a way very unlike a household and its budget.

[sd'sker]

Sdsker- It's not that I'm concerned about paying off the debt and bringing the balance to zero. It's an ethical concern that we are living beyond our means now and passing the bill for that to our childrens children. Also, inflation hurts the poor a lot more than it hurts the rich. It just strikes me as quite selfish of us to pass the payment to future generations and saddle the poor with even more dire circumstances.

i feel the same way about the environment.

 

but the gov't has to spend for there to be an economy. but i do not know anyone who would be opposed to cutting waste, becoming more efficient, and spending less money or spending it better.

 

it is just funny that the funding that get cut first (because of the moral concern of the debt handing down to our children) is generally the ones funding programs that help schools, the poor, women, and children.

[JJ Husker]

I try to simplify things and I know for a fact that we would be in a better situation with only $5T debt instead of $17T.

Why? I'm not asking for some version of an "it's common sense!" answer. I'm asking why, as a country, we would be better off if our debt was $5T instead of $17T?

 

 

OK here is an example of what I'm thinking. I'll apologize in advance for not citing any intellectual or government studies and for using my common sense.

 

If the debt were lower, we would have to pay less interest on the debt. Now I'll just make up a dollar amount that we have saved by not paying interest on the debt- $100 billion dollars (don't worry, it doesn't matter if that number is low or high- it's an example). What else could we do with that $100B?

-Healthcare

-Feed the poor

-Reduce taxes

-Government programs of all sorts

 

You get what I'm saying. We could pay for a bunch of things that dems complain everyday about the big bad repubs refusing to the poor. And, as an added bonus for these same people, there would be less interest income flowing into the pockets of the wealthy. Sure a bunch of that interest payment ends up going to other countries but a substantial amount also goes to the richest of our rich. Poor people are not the ones investing in government debt and profiting off of it. They're the ones who get denied services and benefits because we're spending that money on servicing debt instead of things that could help them.

 

So, IMO, it is contradictory for a person to think increasing the debt is not a bad thing while at the same time whining that some other political party doesn't care about the poor. Caring for the poor becomes much easier if you can use existing revenues and it doesn't have to be pick pocketed from an ever dwindling number of taxpayers.