What will solve the looming debt crisis?

[markroxny]

Originally Posted by Whirlaway

The current system will be a burning tire around the necks of the upcoming 30-something generation; but Obama and the Progressive left don't care.

Why must you always say inflamatory untrue things like that? The progressive left just has other ideas, they DO care.

I do think however, they are going to have to swallow some bitter medicine this time. The tax rates on the top 2% will go up, but the Dems are gonna have to do some things on entitlement spending that they don't wanna do.

[Whirlaway]

Where is the Obama legislative package to reform SSI?

In the debate he punted on this issue.

The GOP put forth the Ryan Plan. Where is the Obama legislative equivalent ?

Every year of the Obama presidency that SSI continues, means a greater burden on the next generation(s). Where is Obama's urgency on this issue ?

[joe bloe]

Originally Posted by markroxny

Again i think eliminating SS will create human suffering especially of the elderly. This concept of "personal responsibility" is fine for older people who are good at managing their own retirement accounts, and I think they should be able to. But in all truth, most will not be good at that. I have no problem with safety nets for a group like the elderly. Yea i get ss taken out of my check and that money goes to retired people in the short term. But i far prefer that to seeing droves of broke hungry old people all over the US.

I feel it's my civic duty to pay my share and help out. I do agree that the current system needs to be re-vamped because it wasn't structured well in terms of money in and money out.

I'm confidant a solution can be found and I have no doubt it will. We don't have to do away with it all together, just improve the way it's funded, the way it's managed, structured and the way it works.

My 2 cents

No one is advocating that we shut down Social Security overnight. Obviously, people over the age of 50 would have to have their benefits gauranteed.

The best plan is to gradually privatize over time, so that today's young people will be able to completely opt out of the Social Security system, while at the same time, being required to contribute to an alternative private sector pension fund.

[Texas Contrarian]

It's funny how the substitution of just one little harmless looking word would have made a decisive difference in the meaning of the question posed by the thread title.

If one were to ask what could or would meaningfully address the risks associated with a debt crisis, a number of people have touched upon answers here and in other threads in this forum. Of course, in today's political climate, they're completely impracticable.

If the question (as precisely posed in the thread title) is the following:

"What will solve the looming debt crisis?"

...I'm afraid the answer is:

Nothing!

(At least, not until we experience the onset of a crisis severe enough that its gravity cannot be covered up or papered over by disingenuous, preening politicians.)

Not exactly a cheery thought, but the debate going on in Washington, D.C. today is completely unserious.

[thisguy23]

Freeze spending at current rate, cut all budgets 1% and it will be paid off in 7 yrs. Sounds to easy doesnt it.

[Laz]

Originally Posted by markroxny

Are these private funds guaranteed/insured by the government? Are they in the stock market?

My concern is that not every elderly person or working person is always good at managing private accounts, especially if they involve stocks. I would just be concerned about a ton of elderly people retired and broke which would not be good for the country.

I am not a opposed to a combination approach of secured government/tax funds and partial private funds, more of a hybrid really, one that we can transition to.

While the investment issues are valid they are not barriers. It would be easy to design balanced portfolios that people can invest in that controls risk. You might have to say they can only invest in portfolios that meet the appropriate standards but that is manageable. Another option would be an annuity that provides a guaranteed income for life. Either option would be better than the current system.

[JD Barleycorn]

Markie is putting up strawmen again. No one is talking about abruptly ending SS. No one! The Paul Ryan plan called for reduced benefits and payments starting at age 50. The younger you were the longer you had to get ready for retirement yourself.

I mean, what did we do before the social security system was created? I think the Waltons did okay and the first social security recipient Ida Mae Fuller made two payments into the system and lived to be 103 years old. Right there you can see the system was doomed to failure.

[essence]

On the third page and no personal abuse? Is this a record?

- there is a variety of tax - income tax, corporation tax, property tax, purchase tax etc. I don't know enough about the US tax system, but they each have different impacts and leverages. Getting the balance is critical, and different countries have different balances. In the UK, we pay 20% purchase tax (VAT), up to 40% income tax, 21% corporation tax, capital gains tax, inheritance tax, plus something we call national insurance tax.

- you can't change tax without considering the norms in the rest of the world, as corporations can easily rearrange their tax affairs.

- at the end of the day, everything we earn is taxed. We take home pay, we buy something, that purchase is used to pay somebody else's salary, or goes into company profits, which are used to invest in something else, so every dollar is sliced and diced and distributed and taxed somewhere down the road.

- so, what is needed is to accelerate this redistribution. Make sure we purchase something today, not tomorrow. That will accelerate the tax.

- defence spending? How much of the defence budget is spent paying salaries of US citizens (or contractors) who then go and buy/invest, which generates tax? How much of it goes abroad? If defence spending was cut, how much will social welfare programs go up? It is far too simplistic to just take a figure of defence spending and assume it can be cut with no impact.

So, in my view, the two main deficit reduction levers are:

- accelerate growth of existing and new industries, entrepeneurs
- accelerate sensible spending (not credit-based boom and bust).
- do not raise taxes above a level which prevent the above

I am not an economist, and even if economists all agreed on a single macro economic model, political aspects would prevent them from implementing the best solutions.

Hey, what about giving a green card to anybody who wants to immigrate with over $20K in their luggage? 10,000 immigrants a year, that is $200 million per year. No, can't be done, too many political barriers, even though it would lead to growth and economic dynamism.

Too little brain storming and forward thinking from the politicians.

We have armies of people who are focussed on increasing taxes and tracking tax avoidance, but very few dedicated to generate new revenue. Anal puritanical thinking.

If a company is going through difficult times, of course it controls costs, but also increases sales/marketing to generate revenue. If you cut sales, you are dead.

So what assets does the US have to sell? Land, lifestyle, etc etc etc etc

[essence]

I see threads which discuss the issues rather than hurling insults quickly drops down the page.

Bump.

[joe bloe]

Originally Posted by essence

On the third page and no personal abuse? Is this a record?

- there is a variety of tax - income tax, corporation tax, property tax, purchase tax etc. I don't know enough about the US tax system, but they each have different impacts and leverages. Getting the balance is critical, and different countries have different balances. In the UK, we pay 20% purchase tax (VAT), up to 40% income tax, 21% corporation tax, capital gains tax, inheritance tax, plus something we call national insurance tax.

- you can't change tax without considering the norms in the rest of the world, as corporations can easily rearrange their tax affairs.

- at the end of the day, everything we earn is taxed. We take home pay, we buy something, that purchase is used to pay somebody else's salary, or goes into company profits, which are used to invest in something else, so every dollar is sliced and diced and distributed and taxed somewhere down the road.

- so, what is needed is to accelerate this redistribution. Make sure we purchase something today, not tomorrow. That will accelerate the tax.

- defence spending? How much of the defence budget is spent paying salaries of US citizens (or contractors) who then go and buy/invest, which generates tax? How much of it goes abroad? If defence spending was cut, how much will social welfare programs go up? It is far too simplistic to just take a figure of defence spending and assume it can be cut with no impact.

So, in my view, the two main deficit reduction levers are:

- accelerate growth of existing and new industries, entrepeneurs
- accelerate sensible spending (not credit-based boom and bust).
- do not raise taxes above a level which prevent the above

I am not an economist, and even if economists all agreed on a single macro economic model, political aspects would prevent them from implementing the best solutions.

Hey, what about giving a green card to anybody who wants to immigrate with over $20K in their luggage? 10,000 immigrants a year, that is $200 million per year. No, can't be done, too many political barriers, even though it would lead to growth and economic dynamism.

Too little brain storming and forward thinking from the politicians.

We have armies of people who are focussed on increasing taxes and tracking tax avoidance, but very few dedicated to generate new revenue. Anal puritanical thinking.

If a company is going through difficult times, of course it controls costs, but also increases sales/marketing to generate revenue. If you cut sales, you are dead.

So what assets does the US have to sell? Land, lifestyle, etc etc etc etc

It's one of the signs of the end times.

[fetishfreak]

Originally Posted by CaptainMidnight

It's funny how the substitution of just one little harmless looking word would have made a decisive difference in the meaning of the question posed by the thread title.

If one were to ask what could or would meaningfully address the risks associated with a debt crisis, a number of people have touched upon answers here and in other threads in this forum. Of course, in today's political climate, they're completely impracticable.

If the question (as precisely posed in the thread title) is the following:

"What will solve the looming debt crisis?"

...I'm afraid the answer is:

Nothing!

(At least, not until we experience the onset of a crisis severe enough that its gravity cannot be covered up or papered over by disingenuous, preening politicians.)

Not exactly a cheery thought, but the debate going on in Washington, D.C. today is completely unserious.

Your analysis of the question is accurate. In keeping with the spirit of the question rather than the literal meaning, I find the answers lacking in the long term solution.

Yes, a balanced approach is necessary but no amount of spending cuts, entitlement reform, or tax increases will solve the problem. They are a step in the right direction, but a true solution involves a balanced budget. The model of continuously increasing the debt ceiling while spending more than you earn is unsustainable for a family and is unsustainable for a country. We need to balance the budget and mandate that a percentage of revenue be going to the principle of the debt, not just to service the debt. The remaining revenue can be used for the necessary functions of government. A balanced budget would force congress to eliminate some programs which are not necessary, hopefully even entire departments.

We also need to repeal the federal reserve act, which would eliminate the central bank, restore congress' control over the monetary system and have our money backed by a tangible asset like gold and silver once again.

[Laz]

Originally Posted by fetishfreak

Your analysis of the question is accurate. In keeping with the spirit of the question rather than the literal meaning, I find the answers lacking in the long term solution.

Yes, a balanced approach is necessary but no amount of spending cuts, entitlement reform, or tax increases will solve the problem. They are a step in the right direction, but a true solution involves a balanced budget. The model of continuously increasing the debt ceiling while spending more than you earn is unsustainable for a family and is unsustainable for a country. We need to balance the budget and mandate that a percentage of revenue be going to the principle of the debt, not just to service the debt. The remaining revenue can be used for the necessary functions of government. A balanced budget would force congress to eliminate some programs which are not necessary, hopefully even entire departments.

We also need to repeal the federal reserve act, which would eliminate the central bank, restore congress' control over the monetary system and have our money backed by a tangible asset like gold and silver once again.

The only thing I can think of that would force Congress to balance the budget is a refusal to increase the debt ceiling. The problem is that Congress is in charge of that also.

[CuteOldGuy]

Does anyone think that perhaps financial collapse is part of the plan? What happens in a financial collapse? The ultra-wealthy will be able to buy up huge companies and property for pennies on the dollar, and further consolidate their wealth in the hands of a very few. Governments will be able to enforce strict control of their populations for the purpose of "maintaining order." Then the elites will have control over the governments, since they have the money, and all power will be theirs. Freedom will be gone.

I'm not saying that is what will happen, but what if it is part of the plan? Hypothetically.

[Laz]

Originally Posted by CuteOldGuy

Does anyone think that perhaps financial collapse is part of the plan? What happens in a financial collapse? The ultra-wealthy will be able to buy up huge companies and property for pennies on the dollar, and further consolidate their wealth in the hands of a very few. Governments will be able to enforce strict control of their populations for the purpose of "maintaining order." Then the elites will have control over the governments, since they have the money, and all power will be theirs. Freedom will be gone.

I'm not saying that is what will happen, but what if it is part of the plan? Hypothetically.

There is a certain amount of logic to that. If it is not planned it might be the result anyway.

I don't see why people don't realize that the rich will not be harmed by higher taxes. They will just do what is necessary to avoid them or pass them on to others.

[fetishfreak]

Originally Posted by Laz

I don't see why people don't realize that the rich will not be harmed by higher taxes. They will just do what is necessary to avoid them or pass them on to others.

You answered your own query. Everyone is harmed by higher taxes on the rich, except the rich. While it is true that the rich can afford to pay more, they can also pass the burden on to others or change there investments in order to maximize profit and minimize there tax burden.Take Buffett for example, he earns more in a year than his secretary yet she pays more taxes, not because she earns more but because hers is income and his is capital gains, he doesn't pay himself a salary. That is why they have all those lawyers and accountants on their staffs. Tax law changes are written by congressional aids who can easily stick in new loopholes as old ones are closed. The tax laws are so complicated that it takes years for anyone to truly understand them. Then you need to constantly update yourself as the anual changes are made. The wealthy have the contacts necessary to keep themselves protected on both sides of the aisle.