The New Reality: Spending 3x what we take in!

[Pangloss]

The story today that the deficit will top $1.2 trillion was bad enough, but the accompanying story from the Obama camp that this will likely be the case for years to come was a tough pill to swallow. The budget is only (only?) $3 trillion, so we're talking about spending another 50% on top of that. Yowsa.

 

But aside from a couple hundred million in Defense spending (if you're lucky), what can really be cut? Most of the programs in place are either employing people (at a time when layoffs are ill advised) or help the economy in some indirect way.

 

I think we're on the right track, scary as the numbers are. The hard part's actually going to be trimming the budget down to size once the economic crisis is over. We're not very good at recognizing economic upturns on the political side, and we're AWFUL when it comes to cutting government programs (have ANY ever been cut?).

 

What do you all think?

 

Some articles:

Record Deficit Forecast as Obama Weighs Options (New York Times):

http://www.miamiherald.com/news/politics/AP/story/842256.html

 

Soaring Deficit May Post Threat to Obama Stimulus Plan (Miami Herald):

http://www.nytimes.com/2009/01/08/business/economy/08deficit.html?em

[waitforufo]

With regard to the Miami Herald article, it is currently estimated that Social Security will start having more money going out then coming in 2012. Since the Social Security lock box is filled with US savings bonds, in 2012 the Social Security Administration will have to start cashing in those bonds. Where is that money going to come from? If we simply print money, that will cause inflation, and Social Security payments are indexed to inflation.

 

Not to worry however, both the Mayans & Nostradamus predict the end of the world in 2012, so we should be fine.

[ecoli]

Pangloss - I was under the impression that 'defense' spending was more on the order of a trillion dollars.

 

wairforufo - Social security is the world's largest ponzi scheme waiting to collapse. The ironic thing is that Madoff is going to jail for his ponzi scheme while the politicians get to make things worse.

[SH3RL0CK]

wairforufo - Social security is the world's largest ponzi scheme waiting to collapse. The ironic thing is that Madoff is going to jail for his ponzi scheme while the politicians get to make things worse.

 

I had thought Social Security was peanuts compared to Medicare/Medicaid.

[ecoli]

I had thought Social Security was peanuts compared to Medicare/Medicaid.

 

true, but SS is more like a classic ponzi scheme because the payout is cash "dividends" rather than a service.

[iNow]

Social Security is made worse by the fact that our elderly population is living longer and longer every year, hence they are draining the system far more than ever intended, and beyond what they paid in by quite a lot.

 

 

Per the OP, I think if we do this right, we set the foundation for a lot of years of prosperity. The challenge, of course, is that hugeness of that "if."

[bascule]

Let's see, we've gone from a budget audited by a president who used veto power so much Congress tried to give him a line item veto to a president who didn't veto anything until the opposing party took over Congress, at which point he waged a primarily religously-based ideological warfare with his veto power. Under the former president, the budget was nearly balanced. Under the latter, record deficits.

 

And now blame Obama for the budget mess that Bush and the Republicans created...

 

Ugh. Nice OP there Pangloss. Are you blaming Obama for not fixing the problems Bush created overnight?

[ecoli]

Let's see, we've gone from a budget audited by a president who used veto power so much Congress tried to give him a line item veto to a president who didn't veto anything until the opposing party took over Congress, at which point he waged a primarily religously-based ideological warfare with his veto power. Under the former president, the budget was nearly balanced. Under the latter, record deficits.

 

And now blame Obama for the budget mess that Bush and the Republicans created...

 

Ugh. Nice OP there Pangloss. Are you blaming Obama for not fixing the problems Bush created overnight?

 

The Clinton surplus is a myth created from the tech bubble which just happened to burst after Clinton left office.

 

He may have had a technical surplus, but only because of the bonds bought with the extra money coming through social security administration. This is how Clinton was able to leave office with a surplus even though he never operated with a balanced budget. This is not a true surplus just a clever (though admittedly inadvertent) reshuffling of debt.

[Phi for All]

Pangloss - I was under the impression that 'defense' spending was more on the order of a trillion dollars.

He's busy with the new term so I'll answer for him. He was referring to the "couple hundred million in Defense spending (if you're lucky)" that could be *cut*.

[Pangloss]

Ugh. Nice OP there Pangloss. Are you blaming Obama for not fixing the problems Bush created overnight?

 

No, I'm supporting his position in spite of my nervous concerns. Need to work on the ol' reading comprehension skills there, lil' buddy.

 

Pangloss - I was under the impression that 'defense' spending was more on the order of a trillion dollars.

 

Half that, but yeah with the unbudgeted expenses of Iraq and Afghanistan I believe that's correct. But as Phi mentioned I believe only about 200-250 billion could realistically (both politically speaking as well as actual capabilities) be cut. In fact I think that kind of figure is a liberal wet dream -- I doubt we'll see a quarter of that actually happen.

 

In fact I'll be amazed if 200 billion is cut from the whole 2010 budget. We should run a poll on that, like a betting poll. Might be fun.

---

Merged post follows:

Consecutive posts merged

BTW, just as a side note, I realized as I was writing the above that if we do manage to pull out of Iraq in 2009 our actual expenditures would drop a good bit faster. In fact the cut in expenses from departing Iraq could easily exceed the actual program budget cuts from the 2010 budget.

 

That would be a somewhat ironic twist to the old complaint about unbudgeted expenditures -- we wouldn't really notice the improvement, because it never showed up on an actual budget! (lol)

---

Merged post follows:

Consecutive posts merged

Interesting bit of perspective as I run screaming out the door, ridiculously late:

 

http://www.coshoctontribune.com/article/20090108/NEWS01/901080302

 

This year's deficit will equal 8.3 percent of the nation's gross domestic product, the CBO said. That makes it larger than the previous postwar record of 6 percent reached in 1983 under President Ronald Reagan. But it's still dwarfed by deficits during World War II: 30 percent of GDP in 1943, 23 percent in 1944 and 22 percent in 1945.

[john5746]

In fact I'll be amazed if 200 billion is cut from the whole 2010 budget. We should run a poll on that, like a betting poll. Might be fun.

 

might need to define what a cut is first.

 

I bet a billion that less than 100 billion is cut. If I lose, I need a bailout.

[bascule]

The Clinton surplus is a myth created from the tech bubble which just happened to burst after Clinton left office.

 

Okay, why are you bringing this up? I didn't mention anything about it. I just said the budget was nearly balanced, which it was.

 

And there was more to "irrational exuberance" than just the dot com bubble...

[john5746]

The Clinton surplus is a myth created from the tech bubble which just happened to burst after Clinton left office.

 

He may have had a technical surplus, but only because of the bonds bought with the extra money coming through social security administration. This is how Clinton was able to leave office with a surplus even though he never operated with a balanced budget. This is not a true surplus just a clever (though admittedly inadvertent) reshuffling of debt.

 

At least he wasn't stupid enough to send this mythological money back to the people so they would buy more stuff at Wal-Mart in their SUV's

[ecoli]

Okay, why are you bringing this up?

because you seemed to claim that policy decisions made a difference between the economies under Clinton and Bush. I'm claiming that they just happened to come under office under different times in the same business cycle and that their policies basically amount to the same thing.

 

you're right though, this is probably off topic. My apologies.

Edited January 8, 2009 by ecoli

[jackson33]

Social Security is made worse by the fact that our elderly population is living longer and longer every year, hence they are draining the system far more than ever intended, and beyond what they paid in by quite a lot.

 

Per the OP, I think if we do this right, we set the foundation for a lot of years of prosperity. The challenge, of course, is that hugeness of that "if."

 

Paragraph 1; Very true, but largely understated. Not only are us elderly people living longer, there are increasingly more of us, percentage wise. I would argue under the 1936 Original Program it could have worked, at least much longer, but added programs and access to SS funds for other than intended purpose has destroyed that original intent. Example; I retired January of 2003, having paid about 50k into my fund, most earlier years the maximum amount. (includes some employer contributions and many years of self employed), but have already received back that 50k and a good chunk of interest, figure will pass my contributions plus interest this year.

 

To the thread; Guess the IOU's which have never drawn a dime of interest (savings bonds?) are enough to care on the SS program for years to come, but Medicaid, would seem to be the real problem and IMO created by government itself. W/O government programs, does anybody really think any hospital or medical facility could charge the going rates. Called market forces and has been interrupted by both government mandates and requirement, to say nothing of the legal system dead set on redistribution of wealth to itself.

 

Pangloss; If the economy had not tanked, which IMO is still arguable, the predicted deficit would be far less. Its a combination of expenses to fix a perceived problem and the reduction of projected Federal Revenues. This year 2009, is probably correct, but from what has already happened. If Paulson and/or Bush programs were incorrectly or unnecessarily activated, which even the Obama Team seems to agree were not correct, following up with additional and similar programs would seem to be a false premise to correct future problems. They (the Obama team) can become the Worlds Greatest Conservative Movement, by words and actions during the next six months. As iNow suggest, its in the "ifs" and all indications are the Obama Team will use the opportunity given to create the Worlds newest form of socialism.

[bascule]

I'm claiming that they just happened to come under office under different times in the same business cycle and that their policies basically amount to the same thing.

 

Except Bush liked to couple new spending with tax cuts. Clinton did not. I think it's completely myopic to claim their policies "basically amount to the same thing". Clinton fastidiously exercised his veto power to curb spending, to the point Congress tried to give him a line-item veto. Bush didn't veto a single bill until halfway through his second term. Bush substantially cut taxes for the richest Americans, depriving the government of needed revenue, and made up the difference with more national debt. The DoD's budget has almost doubled under Bush, and that's not even counting two very expensive wars.

 

WTF? Seriously...

[iNow]

As iNow suggest, its in the "ifs" and all indications are the Obama Team will use the opportunity given to create the Worlds newest form of socialism.

 

I think we both agree that the "if" in this case is a huge one. I think we also both agree that the opportunity before us right now is magnificent. What I am confused by, however, is that statement I quoted.

 

You argue as if providing health care for all citizens will make us a socialist country. I think that's silly, as it will allow people to spend their money on other things capitalistically, and be healthier on top of that (thus allowing them to continue producing and adding to our GDP). Most good corporations these days recognize the huge impact a good health care plan can have on it's employees, as well as offering them additional sick time and paid time off. By spending more up front on the health costs, and allowing employees more time away when ill, they do better in the long run. It seems counter to common sense, but nearly all studies suggest that corporations lose MORE money per annum by spending less on health care for employees than if they spent more on health care for employees. A big part of this is that those employees will be less productive and sicker for longer under the cheaper system, also forcing themselves to come to work (no time off, no money to see doctor) and will spread the illness to other employees.

 

Why would it not be the same for the country? Also, why do you comment as if we will not still be a mixed economy (like we are now, and which has tremendous benefit)? It's not "all or nothing" when it comes to socialism. Some things ARE better managed from the central government, and other things are not. We discussed this at length here:

 

http://www.scienceforums.net/forum/showthread.php?t=36009

[waitforufo]

wairforufo - Social security is the world's largest ponzi scheme waiting to collapse. The ironic thing is that Madoff is going to jail for his ponzi scheme while the politicians get to make things worse.

 

Why restrict that comment to Social Security, the same could be said of most of socialism. Socialism's motto could be easily stated as "From each at the bottom of the pyramid to each at the top of the pyramid.";)

 

On a more serious note, the primary difference between Social Security and a ponzi scheme is that people voluntarily participate in ponzi schemes.

[ecoli]

Why restrict that comment to Social Security, the same could be said of most of socialism. Socialism's motto could be easily stated as "From each at the bottom of the pyramid to each at the top of the pyramid.";)

 

On a more serious note, the primary difference between Social Security and a ponzi scheme is that people voluntarily participate in ponzi schemes.

 

Also socialism has some form of internal production, even if it is inefficient.

---

Merged post follows:

Consecutive posts merged

Except Bush liked to couple new spending with tax cuts. Clinton did not. I think it's completely myopic to claim their policies "basically amount to the same thing". Clinton fastidiously exercised his veto power to curb spending, to the point Congress tried to give him a line-item veto. Bush didn't veto a single bill until halfway through his second term. Bush substantially cut taxes for the richest Americans, depriving the government of needed revenue, and made up the difference with more national debt. The DoD's budget has almost doubled under Bush, and that's not even counting two very expensive wars.

ok fair enough... I guess I was giving Bush too much credit.

 

Clinton still was running over a hundred billion dollar deficit per year... how could you have a surplus and debt at the same time?

 

Either the surplus is used to pay off the debt, and you have less debt (but no surplus) or you use that surplus to increase the federal budget, and you have increased federal spending, not necessarily more debt, but no surplus.

 

Since this 'surplus' came from future social security pay offs, Clinton's surplus represents future debt.

 

Maybe he didn't raise spending as much as Bush, but he certainly didn't cut overall spending either.

 

 

WTF? Seriously...

 

LIKE, OMG, RLY.

[npts2020]

Socialism's motto could be easily stated as "From each at the bottom of the pyramid to each at the top of the pyramid.";)

 

Well American style socialism anyway.

[Pangloss]

Except Bush liked to couple new spending with tax cuts.

 

Yes, just like a certain incoming president plans to do. In a couple of years we're going to be looking back at that and calling Bush "Obama Lite".

[jackson33]

I think we both agree that the "if" in this case is a huge one. I think we also both agree that the opportunity before us right now is magnificent. What I am confused by, however, is that statement I quoted.

 

You argue as if providing health care for all citizens will make us a socialist country. I think that's silly, as it will allow people to spend their money on other things capitalistically, and be healthier on top of that (thus allowing them to continue producing and adding to our GDP). Most good corporations these days recognize the huge impact a good health care plan can have on it's employees, as well as offering them additional sick time and paid time off. By spending more up front on the health costs, and allowing employees more time away when ill, they do better in the long run. It seems counter to common sense, but nearly all studies suggest that corporations lose MORE money per annum by spending less on health care for employees than if they spent more on health care for employees. A big part of this is that those employees will be less productive and sicker for longer under the cheaper system, also forcing themselves to come to work (no time off, no money to see doctor) and will spread the illness to other employees.

 

Why would it not be the same for the country? Also, why do you comment as if we will not still be a mixed economy (like we are now, and which has tremendous benefit)? It's not "all or nothing" when it comes to socialism. Some things ARE better managed from the central government, and other things are not. We discussed this at length here:

 

http://www.scienceforums.net/forum/showthread.php?t=36009

 

Yes the 'ifs' are huge, but they include a whole lot more the 'Universal Health care. Whats worse, any error made in many of the problems could lead to a catastrophic conclusion...

 

I really have no idea, what the 'Obama' plan for health care is. If fact I have gone back over the 3,296 news conferences since winning the election and I am not sure of any of his policy.

 

On the US System or Free Market over Government Control and assuming its partially or totally based on Ms. Clinton's 1993 proposals and in short; It would totally destroy the built in incentive aspirations of the American Medical System, to say nothing of the quality of at least a portion of todays system.

 

I do agree preventative health care, should be studied and when something tangible evolves, be announced. What I see today and have noticed for my years on the planet, are personal viewpoints based on some agenda or desire to punish some self perceived human action. From salt, caffeine, sugar substitutes, synthetic foods, apples or a thousand items claimed harmful, then retracted, I have become skeptical of mans ability to judge just what is harmful or that any one item good for some may in fact be harmful to others.

To me, sky diving, taming lions, boxing/wrestling, even driving is more harmful than most other human activity. My Mother, drank alcohol, smoked (worse yet inhaled my Dads second hand smoke) during her two pregnancies, as did her mother with her seven kids and millions of others over generations of people, with out any apparent problem. Then we were raised when food was sprayed with DDT, paint was lead based and most building materials contained asbestos. I walk the RR Track to school, in the rain and probably if had some time, come up with hundreds of things, no longer acceptable.

 

I did follow you other post and did give an opinion. As said and think you point, socialism can and does exist with capitalism. The problem is and beginning to appear in the US, that socialism can become addictive. It would be nice if we could all live like Al Gore, but then Warren Buffet would not be happy, currently living in the same house he bought in 1953 and is happy. It would be nice to own a 72 inch TV or drive only Cadillacs, or travel the world, but then those things never interested me to begin with. Necessities today and those of 1940 are not the same and with Capitalism those things that are seen important can be had by many more. I don't think Castro, wanted the Cuba he created (much evidence to this), but as the Capitalist and the investment community left, he had little choice if he was to rule.

[iNow]

Would it be fair to say, then, that you agree with me that we are a mixed economy, that this is a good thing, and we simply need to be careful to do our healthcare implementation correctly? What I obviously took issue with is 1) you're labelling the entire country as socialistic for trying to care medically for it's citizens (like all other first-world countries do), 2) suggesting that it simply cannot work without offering any specific details or facts in support of your position, and 3) not even understanding what the program is before commenting on it in a negative manner.

[jackson33]

Would it be fair to say, then, that you agree with me that we are a mixed economy, that this is a good thing, and we simply need to be careful to do our health care implementation correctly? What I obviously took issue with is 1) you're labeling the entire country as socialistic for trying to care medically for it's citizens (like all other first-world countries do), 2) suggesting that it simply cannot work without offering any specific details or facts in support of your position, and 3) not even understanding what the program is before commenting on it in a negative manner.

 

When it comes to you, I am always hesitant to agree. Socialism in short, is the ownership/operation by government, opposed to public ownership and operation. What your trying to do is link regulation/mandates (laws) of the Federal and assume State Governments to what your calling 'mixed'. What government has been doing or plans on doing with these bailouts is partial ownership (preferred stocks) of Company's they are financial aiding. Since, in the name of the 'taxpayer' accepting this assistance, requires this partial ownership IMO, the government is Nationalizing in part a business. Congress and media has gone further in insisting on 'rules/regulations' additionally being attached we are simply getting closer to a 'degree' (operative word, not mixed) of socialism.

 

1- I have said, I do not know what the current plans are for Universal Health Care mean to the Obama Administration. Clinton's plan was socialistic and if implemented as I understood it, the Federal would have controlled who could study for what (by needs) in Medical Schools, where they practiced and on into the Pharmaceutical Industry. Total government and pure socialistic. There are voucher systems, credit systems and involvement through business, which would be additional intervention through the Capitalist economy. AND yes, I can with hold comment for lack of understanding or knowledge coming from the source.

 

2-3 and what should be 4- First Health Care is not the US Federal Governments responsibility. There must be a hundred other things involved in maintaining good physical/mental health that can cause it going bad, that government would have to get involved with. What your indirectly suggesting is staggering in scope and where European Health Care is heading. From childhood nurturing by parents to when old age disqualifies a person for care or who gets what as demand increases or even with patient is left to die while one is attended.

---

Merged post follows:

Consecutive posts merged

iNow; Had to leave to check out future broadcast on a Documentary, but could not find a future date. 'Brookhaven Obesity Clinic/Hospital', has 75 800$/day beds (2006), maintains a waiting list of 100, outside NYC but caters to only special needs of the obese from around the US. I recently saw one documentary 'Half Ton Hospital' on the History Channel. Our conversation reminded me of this viewing. Another article seen today as an AP Article, 'Obese, now more then Fat in US' think 27% obese 26.7 now falling into Fat categories.

 

No one in the documentary and must believe any person while gaining these extraordinary pounds, could possibly say they didn't know it was bad for their health. Even those that make it to Brookhaven, some staying for months, fail while there or leave and fail to maintain the program. Reason given for weight gains or lack of control, almost always go to some emotional feeling, I suppose for many reason Alcoholics/legal-illegal drug users fall off the wagon or in fact get on the that wagon.

 

I have brought this up to possibly make you understand, the cost involved and the involvement pre-emptive health care, that would be involved on just one item, with only 75 people and in most cases a lifetime with the same problem. However if you haven't seen the documentary, it would be worth your while and interesting outside this discussion.

[ecoli]

iNow; Had to leave to check out future broadcast on a Documentary, but could not find a future date. 'Brookhaven Obesity Clinic/Hospital', has 75 800$/day beds (2006), maintains a waiting list of 100, outside NYC but caters to only special needs of the obese from around the US. .

Interesting... I'm from Brookhaven town, but I've never heard of this place.