Is America Going Broke? [Archive]

Sanslines

05-11-2009, 09:47 AM

Is America about to go broke?

Government obligations for Social Security and Medicare may soon exceed the combined net worth of every household and nonprofit organization in the country.

<CITE>By Scott Burns (http://articles.moneycentral.msn.com/Common/Contributors.aspx#Burns)</CITE>

Prices dropped last year. But we still need to invest to protect ourselves from inflation. That's why our retirement-plan investing needs an inflation "tilt." You'll understand why in a few paragraphs.

How bad will future inflation be? I don't know. Neither does anyone else. It could be a normal inflation of 3% to 4% a year. It could also be a banana-republic 10% a month.

What we know is that all governments make promises they can't fulfill. Our government certainly has. Under both political parties, it has taken promise making to a high art. This is not hyperbole. The figures can be found in regularly published government reports.

Much worse than you probably think

The figures exist, but they are ignored. News reports regularly inform us of the growing federal deficit, projected at a stunning $1.75 trillion for fiscal 2009 and $1.17 trillion for 2010. But regularly reported, less visible government obligations have been growing much faster.

In the nearly five years from January 2003 to December 2007, the Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion. The average annual growth topped $2 trillion.

That exceeds the expected formal deficit of $1.75 trillion this year.
In the 2008 trustees' report (http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2008.pdf) (.pdf file), the unfunded liabilities of Social Security and Medicare -- promises of future retirement and health care benefits -- total $42.9 trillion. In a few days, we should be able to read the 2009 report. It's a good bet that the unfunded liabilities will show an increase in the new report.

Ironically, payroll tax payments are still large enough that the Social Security and Medicare programs don't need every dime. The extra money goes into the program trust funds as Treasury debt. The actual cash is spent elsewhere. Basically, the employment tax has been subsidizing other federal spending. This has been going on since the 1983 "reform" of Social Security, a disaster chaired Alan Greenspan, later the Federal Reserve chairman.

Today's deficits? That's nothing

Last year's Social Security trustee report estimates (http://www.ssa.gov/OACT/TR/TR08/VI_OASDHI_dollars.html#116339) that OASDI (Social Security retirement and disability) and HI (hospital insurance), excluding book entry interest for the trust funds, will have more revenue than expenses until 2015. If higher cost assumptions prevail, however, the last year of positive flow will be 2010.

That's next year.

I am not making this up. It is public record. You can see for yourself by examining table VI.F9 on page 191 of the 2008 trustees' report.
When Social Security and Medicare costs exceed their revenues, the Treasury will have to borrow money to cover the shortfalls. When that happens, today's stunning deficits will look small.
That's why our future contains inflation, not deflation.

The upside-down nation

There is another way to see how serious our situation is: Compare the unfunded liabilities of Social Security and Medicare with the net worth of every household in America.

According to the Federal Reserve flow-of-funds figures for year-end 2007, our collective net worth as consumers was $62.7 trillion. By the end of 2008, the same figure had fallen to $51.5 trillion. Another year of growth for Social Security and Medicare liabilities would bring total unfunded government promises to about $46 trillion. That's nearly 90% of our net worth.

If consumer net worth fell an additional $5 trillion -- the same amount it fell in the last three months of 2008 -- we'd be broke.
Yes, you read that right.

Government obligations for basic programs would exceed the net worth of every household and nonprofit organization in America.
We'd be the upside-down nation.

Below: This table compares the unfunded liabilities of Social Security and Medicare over the next 75 years, which is the standard measure, with the net worth of all households in America.
<TABLE><CAPTION></CAPTION><TBODY><TR><TH>Program</TH><TH>Jan. 2004</TH><TH>Jan. 2008</TH><TH>Change</TH><TH>Projected Jan. 2009 </TH></TR><TR><TD>Social Security and Disability: OASDI

</TD><TD>$ 3.7 trillion

</TD><TD>$ 6.6 trillion

</TD><TD>$2.9 trillion

</TD><TD>NA*

</TD></TR><TR><TD>Hospital insurance: HI

</TD><TD>$ 8.5 trillion

</TD><TD>$12.7 trillion

</TD><TD>$4.2 trillion

</TD><TD>NA

</TD></TR><TR><TD>Supplemental medical insurance: SMI Part B, doctors expenses, etc.

</TD><TD>$11.4 trillion

</TD><TD>$15.7 trillion

</TD><TD>$4.3 trillion

</TD><TD>NA

</TD></TR><TR><TD>Supplemental medical insurance: SMI Part D, prescription drugs

</TD><TD>$ 8.1 trillion

</TD><TD>$ 7.9 trillion

</TD><TD>($0.2 trillion)

</TD><TD>NA

</TD></TR><TR><TD>Total unfunded liabilities

</TD><TD>$31.7 trillion

</TD><TD>$42.9 trillion

</TD><TD>$11.2 trillion

</TD><TD>$46.0 trillion (estimate)

</TD></TR><TR><TD>Consumer net worth

</TD><TD>$51.9 trillion

</TD><TD>$62.7 trillion

</TD><TD>$10.8 trillion

</TD><TD>$51.5 trillion

</TD></TR><TR><TD>Unfunded liabilities as % of consumer net worth

</TD><TD>61.1%

</TD><TD>68.4%

</TD><TD>NA

</TD><TD>89.3%

</TD></TR></TBODY></TABLE>
*Not available / Sources: Social Security and Medicare trustees' reports, Federal Reserve, author estimate

The only way out of this is to print more money, inflating the value of assets relative to the amount of debt.

Cutting the expense of investing through index funds alone wouldn't solve the inflation problem. In addition to cutting expenses, we would have to invest a portion of our money in assets that give us a hedge against inflation: Treasury inflation-protected securities, real-estate investment trusts and energy companies.

Would this be perfect protection? No way. But it would give our savings a fighting chance.

http://articles.moneycentral.msn.com/RetirementandWills/InvestForRetirement/is-america-about-to-go-broke.aspx

Naturist Mark

05-11-2009, 07:14 PM

This is BS. Social Security is DESIGNED to have expenses exceed revenues during the time that most of the baby boomes are drawing retirement. That is why Reagan doubled SS taxes back in the 80s and created the trust fund - which didn't exist before that.

The trust fund is expected to have enough in it to make up the difference between expenses and revenue for over 30 more years. After which SS will return to the same pay as you go system it had for its first 50 years. At that time it may be necessary to increase revenue, but the percentage of income paid would not have to be increased - the discount the wealthy receive may have to be reduced.

These prognostications of SS "bankruptcy" assume that when expenditures fall below revenue, the Social Security Administration will not be able to tap into the trust fund. There is no reason to believe that - the US has never defaulted on treasury bills - even during the great depression, and if they do in this case the government will have essentially fallen and there will be no United States.

And this joker suggests a "partial solution" would be for the government to invest trust fund dollars into treasury securities (which is what we do now), as well as invest in stocks and real estate ... yeah ... stocks and real estate ... If the Social Security trust fund had been in stocks and real estate in 2008 it would have lost a decade of usefulness.

This guy is a clown. He is making fun of you.

Medicare is more problematic, health care costs are completely out of control, the US pays more tax dollars for medical care than any other country in the world - including those that provide full medical coverage to every single inhabitant. But we pay twice as much while denying care to nearly 20% of our nation and providing substandard care to half. It is shameful and outrageous. But our corrupt broken health care system creates so much wealth in a very few hands with lots of power that there is tremendous resistance to reform. The anti-reform forces are doing everything they can to PREVENT consumer choice. Democratic Senator Max Baucus (http://crooksandliars.com/susie-madrak/ed-schultz-insurance-companies-are-ta) won't even allow proponents of allowing citizens to BUY INTO medicare a seat a the table discussing healthcare reform.

inudist

05-12-2009, 07:32 AM

Last year's Social Security trustee report estimates that OASDI (Social Security retirement and disability) and HI (hospital insurance), excluding book entry interest for the trust funds, will have more revenue than expenses until 2015. If higher cost assumptions prevail, however, the last year of positive flow will be 2010.

If this report is correct, this is actually happening now!

http://www.msnbc.msn.com/id/30698248/

When Social Security and Medicare costs exceed their revenues, the Treasury will have to borrow money to cover the shortfalls. When that happens, today's stunning deficits will look small.
That's why our future contains inflation, not deflation.

I'm afraid we never learn from lessons of the past. I'm afraid that inflation will be a very real part of our future. Almost like the misery index of the 70's times 10. But that is just speculation on my part. But for someone who expects to retire in 10 years this stuff is scary!

Borrowing our way out of a recession caused by too much borrowing is insane! We never learn.

I'm just expressing my personal opinion here. No more personal attacks please.

Sanslines

05-12-2009, 08:46 AM

If this report is correct, this is actually happening now!

http://www.msnbc.msn.com/id/30698248/

I'm afraid we never learn from lessons of the past. I'm afraid that inflation will be a very real part of our future. Almost like the misery index of the 70's times 10. But that is just speculation on my part. But for someone who expects to retire in 10 years this stuff is scary!

Borrowing our way out of a recession caused by too much borrowing is insane! We never learn.

I'm just expressing my personal opinion here. No more personal attacks please.

Thanks for sharing your opinion. I too am concerned about the fantastic level of spending and borrowing. If we could spend our way out of recessions then we would have done so a long time ago.

I give both political parties an F for medical reform. At least with the Repubs, you know up front that they will never break from the present trend and put everyone on some form of medicare. The Dems talk a good talk but they will never be able to stand up to the insurance industry and eliminate them from organized medicine. The present plan is for government to spend even more money to extend medical insurance coverage by making it 'affordable to all'. The money to accomplish this is taxpayer money and hence people will pay one way or another for medical coverage. The insurance companies will once again protect their sacred cash cow and rake in untold millions of taxpayer money. Will it ever end?

Sanslines

05-12-2009, 02:21 PM

Social Security and Medicare finances worsen

Recession hurts latest forecast for two biggest benefit programs

http://msnbcmedia1.msn.com/i/msnbc/Components/Sources/Art/APTRANS.gif

WASHINGTON - The financial health of Social Security and Medicare, the government's two biggest benefit programs, have worsened because of the severe recession, and Medicare is now paying out more than it receives.

Trustees of the programs said Tuesday that Social Security will start paying out more in benefits than it collects in taxes in 2016, one year sooner than projected last year, and the giant trust fund will be depleted by 2037, four years sooner.

Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year and will be insolvent by 2017, two years earlier than the date projected in last year's report.

The trust funds — which exist in paper form in a filing cabinet in Parkersburg, W.Va. — are bonds that are backed by the government's "full faith and credit" but not by any actual assets. That money has been spent over the years to fund other parts of government. To redeem the trust fund bonds, the government would have to borrow in public debt markets or raise taxes.

Treasury Secretary Timothy Geithner, the head of the trustees group, said the new reports were a reminder that "the longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be."
Geithner said that President Barack Obama was committed to working with Congress to find ways to control runaway growth in both public and private health care expenditures, noting the promise Monday by major health care providers to trim costs by $2 trillion over the next decade.
However, Republicans pointed to the newly dire assessments as evidence the Obama administration has failed to come forward with actual entitlement reform to close the funding gaps.

Government-run health insurance?

"Instead of getting existing public programs in order right now, some are saying we should create a new government-run health insurance plan," Sen. Chuck Grassley, the top Republican on the Finance Committee, said in a reference to the administration's health care proposals. "When we can't afford the public health plan we have already, does it make sense to add more?"

House Republican leader John Boehner said the trustees report "confirms what we already knew: Our nation cannot afford to continue this reckless borrowing and spending spree."

The findings in the trustees report, the annual checkup given the two benefit programs, did not come as a surprise. Private economists had been predicting that the dates the programs would begin to pay out more than they take in and the dates the trust funds would be insolvent would occur sooner given the economic recession.

The deep recession, the worst the country has endured in decades, has resulted in a loss of 5.7 million jobs since it began in December 2007. The unemployment rate hit a 25-year high of 8.9 percent in April.

Fewer people working means less being paid into the trust funds for Social Security and Medicare.

The Congressional Budget Office recently projected that Social Security will collect just $3 billion more in 2010 than it will pay out in benefits. A year ago, the CBO had projected that Social Security would have a much higher $86 billion cash surplus for the 2010 budget year, which begins Oct. 1.

The trustees report projected that Social Security's annual surpluses would "fall sharply this year," then remain at a reduced level in 2010 and be lower in the following years than last year's projections. The report said that the Social Security annual surplus would be eliminated entirely in 2016, reflecting increased demands from the wave of 78 million baby boomers retiring.

That means Social Security will have to turn to its trust fund to make up the difference between Social Security taxes and the benefits being paid out beginning in 2016. The trustees projected the trust fund would be depleted in 2037, four years earlier than the 2041 date in last year's report.

At that point, the annual Social Security taxes collected would be enough to pay for three-fourths of current benefits through 2083. To tap the trust fund, the government would have to increase borrowing or raise taxes because Social Security bonds exist only as bookkeeping entries.

Government obligation
While the government is obligated to redeem those bonds, it has already spent the excess Social Security collections over the years to fund general government operations, providing the trust funds with IOUs.

While the smaller surpluses that will begin this year will not have any impact on Social Security benefit payments, the government will need to borrow more at a time when the federal deficit is already exploding because of the recession and the billions of dollars being spent to prop up a shaky banking system.

Medicare's condition is more precarious, reflecting the pressures from soaring health care costs as well as the drop in tax collections.
Obama on Monday praised the pledge by the health care industry to achieve $2 trillion in savings on health care costs over the next decade, but it was unclear how much help those pledges would be in achieving Obama's goal of extending coverage to some 50 million uninsured Americans. The administration is pushing Congress to pass legislation in this area this year, preferring to tackle health care before Social Security.
The trustees report is likely to set off renewed debate over Social Security and Medicare. Critics have charged that the Obama administration has failed to tackle the most serious problems in the budget — soaring entitlement spending.

The administration on Monday revised its federal deficit forecasts upward to project an imbalance this year of $1.84 trillion, four times last year's record, and said the deficits will remain above $500 billion every year over the next decade.

http://www.msnbc.msn.com/id/30698248

Naturist Mark

05-12-2009, 04:08 PM

If this report is correct, this is actually happening now!
Not exactly. Medicare started spending more than it was taking in over a year ago, and has been drawing the difference from its Hospitalization trust fund - which is exactly what that fund is for. This was expected to happen and the reason we have that trust fund is because we prepared for it. But the present economic disaster has reduced medicare revenues, making it likely that the fund won't last as long as it was designed to last.

Social Security it still well in the black, it is still adding to the trust fund - which is 100% in treasury securities so NOTHING has been lost due to the crash in stock and bond values. SS revenues are also down because so many people are too unemployed to be paying into it, or living with reduced hours and wages. We are still 7 to 10 years away from having to start drawing on the trust fund (which is what is it there for), and the worst case forecasts say the trust fund will last until at least 2037, so there is at least 28 years before we are forced to reduce the Social Security tax discount granted to the wealthy.

I'm afraid we never learn from lessons of the past. I'm afraid that inflation will be a very real part of our future. Almost like the misery index of the 70's times 10. But that is just speculation on my part. But for someone who expects to retire in 10 years this stuff is scary!Right now our real problem is the opposite of inflation - we are in a deflationary period where many businesses cannot get the prices they used to for their goods, much less enough to make a profit.

Except for health care - whose inflation has run at least twice the base inflation rate over the last 25 years, and now runs infinitely higher since health care inflation continues at double digit rates while most of the economy has negative inflation.

Borrowing our way out of a recession caused by too much borrowing is insane! We never learn. Deficit spending during a recession (or depression) is the ONLY time it makes any sense at all. The insanity was the out of control deficit spending during all those non recession years.

ceejayforgroups

05-12-2009, 05:37 PM

I'm not going to weigh in on this subject directly, but I do think it's silly to compare anyone or any entity's current net worth with all future obligations or commitments, and call them "broke" because the former is less than the latter. Future earnings must be taken into account, too. If not, then I guess anyone who has a mortgage could be considered broke. And anyone who has children would have to be considered broke, too.

Sanslines

05-13-2009, 03:45 AM

Except for health care - whose inflation has run at least twice the base inflation rate over the last 25 years, and now runs infinitely higher since health care inflation continues at double digit rates while most of the economy has negative inflation.
Deficit spending during a recession (or depression) is the ONLY time it makes any sense at all. The insanity was the out of control deficit spending during all those non recession years.

Where are these lower prices???

Food prices were raised when gas prices rose to $4 per gallon. Then when gas prices dropped, food prices went down along with a major advertising campaign informing the consumer how the food stores were so 'concerned' about their customers. About 4 months ago, food prices were raised across the board, with not even a mention about any of this from either the media or the food stores.

Home building supplies at Lowes have not gone down. Petroleum based products, such as roofing materials, solvents, plastics, etc have not gone down in price.

The only stores that seem to have endless sales are clothing stores - but then again clothing prices have been on 'sale' for years.

I wish prices across the board would go down.

The 'insanity' of out of control deficit spending during those non recessionary years has just been increased by orders of magnitudes. What do we call today's deficit spending - SUPER out of control spending?? We can not spend our way out of recessions, our system is not designed to have massive amounts of money thrown at it in the hopes that more good can be accomplished then harm, and medical reform is NOT going to happen under ANY administration. Deficit spending to the extent that it is occuring now does NOT make sense and the eventual burden that will be placed upon taxpayers (across the board) will make all previous deficits look insignificant in comparison.

Right now our REAL problem is NOT inflation but a lack of jobs. Unemployment is the biggest problem that we face for most people are willing to work hard to resolve their own financial problems - they just need meaningful jobs to do so.

Naturist Mark

05-13-2009, 04:53 AM

Where are these lower prices???

Other than food and fuel, durable goods have taken a hit - many of which are being marked down as unsold inventory accumulates. As you may know energy and food prices are so volatile that they aren't even included in the most widely used inflation figures - the usual numbers used are "core CPI" when talking about inflation (or now deflation), so the large drop in food and crude oil prices did not directly contribute to the negative inflation numbers - but do have an indirect impact on costs and prices.

http://s.wsj.net/public/resources/images/MI-AW610_AOT_NS_20090510220017.gif

<blockquote>Falling energy and food prices have pushed down global inflation, and that will continue. Barclays Capital economists expect the U.S., U.K., euro-zone and Japan to rack up negative year-over-year CPI readings through at least September.

That will stoke worries about a global wave of deflation, an unstoppable price decline that causes consumers and investors to park cash on the sidelines, crippling economic growth.
Wall Street Journal (http://online.wsj.com/article/SB124199634745704787.html)</blockquote>

Deflation is a far worse demon than inflation, which is why central banks around the world are doing everything they can to increase money supplies and liquidity. Oddly enough, the recent increase in energy prices is widely seen as a sign of increased stability and hopefully a harbinger of economic recovery.
Right now our REAL problem is NOT inflation but a lack of jobs. Unemployment is the biggest problem that we face for most people are willing to work hard to resolve their own financial problems - they just need meaningful jobs to do so.Amen brother!

Sanslines

05-13-2009, 07:19 AM

Other than food and fuel, durable goods have taken a hit - many of which are being marked down as unsold inventory accumulates. As you may know energy and food prices are so volatile that they aren't even included in the most widely used inflation figures - the usual numbers used are "core CPI" when talking about inflation (or now deflation), so the large drop in food and crude oil prices did not directly contribute to the negative inflation numbers - but do have an indirect impact on costs and prices.

http://s.wsj.net/public/resources/images/MI-AW610_AOT_NS_20090510220017.gif

Falling energy and food prices have pushed down global inflation, and that will continue. Barclays Capital economists expect the U.S., U.K., euro-zone and Japan to rack up negative year-over-year CPI readings through at least September.

That will stoke worries about a global wave of deflation, an unstoppable price decline that causes consumers and investors to park cash on the sidelines, crippling economic growth.
Wall Street Journal (http://online.wsj.com/article/SB124199634745704787.html)
Deflation is a far worse demon than inflation, which is why central banks around the world are doing everything they can to increase money supplies and liquidity. Oddly enough, the recent increase in energy prices is widely seen as a sign of increased stability and hopefully a harbinger of economic recovery.Amen brother!

I have no idea where all of these falling prices are happening. There is no deflation for the consumer goods that matter the most. This is a real observation from a variety of stores in the real world. Gasoline prices have actually risen and will continue to rise as we head into the Summer driving season. Overall, food prices have risen in my area. Construction materials have risen. Auto parts have risen. Washing machine prices have risen. Heck, even the state is actively involved in raising any and every fee and tax that it can. How is any of this deflation??? (The flashing blue light specials at KMart are not a sign of deflation!).

The reports about deflation are old news and deflation has not materialized. The reports were no doubt generated by a bunch of bored journalists who needed something else to sensationalize in order to scare people.

Price deflation is not the demon that some are trying to make it out to be. Housing prices rose much too high too fast and outpaced the ability of enough people to keep buying them. Housing prices were a pyramid scheme. Now the market is in the process of correcting itself and attempts by the government to artificially keep housing prices high will ultimately fail and will only contribute to ever growning piles of govenrment (public) debt.

MoonShadow

05-13-2009, 07:38 AM

Goodness, Mark, where do you live? Where I live I have not seen any dropping of prices since gas prices went down.

Food jumped high and has remained there. Any home improvement products are still at the "high price" increases. Medical supplies went up and have not come down. There was a jump in pharmaceuticals and they haven't come down.

I have often wondered about these "charts" and "graphs" put up by this economist or that one and wonder where they live. I do not believe they speak what is truly real. They can't when so many of us are not seeing the "lower or lowered" prices.

I agree with the housing prices. They were so over-inflated and with all the scheming and scamming going on with subprimers, the housing market is in a correction mode where it should be and needs to continue.

Navigator

05-13-2009, 07:53 AM

I have no idea where all of these falling prices are happening. There is no deflation for the consumer goods that matter the most. This is a real observation from a variety of stores in the real world. Gasoline prices have actually risen and will continue to rise as we head into the Summer driving season. Overall, food prices have risen in my area. Construction materials have risen. Auto parts have risen. Washing machine prices have risen. Heck, even the state is actively involved in raising any and every fee and tax that it can. How is any of this deflation???

Deflation is a decrease in money and credit in an economy. Inflation is an increase in money and credit in an economy.

Prices can rise or fall during deflation or inflation depending on relative currency values, availability vs. demand for any specific item, expectations for the future and other reasons.

What we're seeing now is a massive wave of deflation in which credit is disappearing at a very high rate as individuals and corporations pay off debt.

What you're calling deflation and inflation is better described as "price deflation" or "price inflation" indicating nothing more than a drop or rise in price. This can have numerous causes despite the underlying true change in the amount of available money & credit in an economy.

inudist

05-13-2009, 08:16 AM

Sanslines

05-13-2009, 08:44 AM

Deflation is a decrease in money and credit in an economy. Inflation is an increase in money and credit in an economy.

Prices can rise or fall during deflation or inflation depending on relative currency values, availability vs. demand for any specific item, expectations for the future and other reasons.

What we're seeing now is a massive wave of deflation in which credit is disappearing at a very high rate as individuals and corporations pay off debt.

What you're calling deflation and inflation is better described as "price deflation" or "price inflation" indicating nothing more than a drop or rise in price. This can have numerous causes despite the underlying true change in the amount of available money & credit in an economy.

There appears to be some confusion concerning cause and effect vis a vis inflation and deflation.

Mark posted this:

"Right now our real problem is the opposite of inflation - we are in a deflationary period where many businesses cannot get the prices they used to for their goods, much less enough to make a profit."

"Falling energy and food prices have pushed down global inflation, and that will continue. Barclays Capital economists expect the U.S., U.K., euro-zone and Japan to rack up negative year-over-year CPI readings through at least September."

He is talking about a specific cause of 'deflation' ie price deflation. The commonly understood usage of the word 'deflation' concerns price decreases. The more accurate description would indeed be 'price deflation'. I assume that we are talking about 'price deflation' in this thread.

To be completely accurate, there are numerous kinds of 'deflation'

<TABLE height=2665 cellSpacing=0 cellPadding=5 width=322 border=0><TBODY><TR><TD vAlign=center height=69>What is Deflation

</TD></TR><TR><TD vAlign=top height=2569>In common usage deflation is generally considered to be "falling prices". But there is much more to it than that. Often people confuse deflation with disinflation or with Depression (as in "the Great Depression"). These three terms are related but not synonymous.

According to Investorwords.com (http://investorwords.com/) the definition of Deflation is "a decline in general price levels, often caused by a reduction in the supply of money or credit. Deflation can also be brought about by direct contractions in spending, either in the form of a reduction in government spending, personal spending or investment spending. Deflation has often had the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy. The opposite of inflation."

What Causes Deflation?

Although everything said above is true it doesn't present the true nature of deflation. It tries to define it by presenting several possible causes. For a true understanding of both Inflation and Deflation we need to understand Supply and Demand. Just like every other commodity there is a supply of and a demand for "Money".

In this article I am not going to address the issues of what true money is, for the sake of this article we will assume money is simply something other people are willing to accept in exchange for goods or services.

Price levels are the direct result of the relationship between the supply and the demand for any given item. But the value of the money used to pay for those items is also subject to the same relationship.

For the sake of simplicity let's assume that we are on an island and there are ten equally desirable goods in our universe and ten $1.00 bills available to purchase them with. We can safely assume that each item will end up costing $1.00 each.

If the quantity of money increases to $20 (without increasing the quantity of goods) the price of the goods will increase to $2.00 - that is inflation.
If, however, the quantity of money decreases to $5.00 the price will fall to 50¢ (deflation). This is what the first part of the above definition is referring to. The money supply can also be reduced if someone on our island hoards half of it and refuses to spend it on anything no matter what. This is the second part of the definition (reduction in spending).
So far we have only looked at part of the equation, the supply of money. But what happens if the quantity of goods available increases? What if instead of having ten items we build ten more? We now have twenty items and only $10. 00 so once again each item is worth 50¢.

This form of deflation is the good type. Everyone assumes that deflation is bad because the last major deflation that we had was during the "Great Depression" so deflation and Depression are synonymous in many peoples minds. In actuality if prices go down because the goods can be manufactured more cheaply this ends up increasing everyone's wealth.
This is exactly what happened in the late 1990s , with cheap productivity available from former Communist countries the quantity of goods is increased while the money supply increased at a slower rate.

What about Demand?

What about the demand for goods? If everyone on our island already has one of the items available and no one needs any more, naturally the price will also fall as sellers try to find someone to take them off their hands.

So far we have dealt with the supply of money, the supply of goods and the demand for goods, but what about the demand for money?
Is it possible that the demand for money could increase or decrease? Generally, the demand for money is measured by how much people are willing to pay to borrow it (i.e. interest rates). If inflation is high, interest rates will have to be higher to compensate for the loss of . But also if the demand for money rises banks can charge more to loan it. Conversely, if the demand for money falls interest rates will also fall.
So there are four causes for Deflation.
Decreasing Money Supply
Increasing Supply of Goods
Decreasing Demand for Goods
Increasing Demand for Money

Note:

Increasing demand or decreasing supply of money have the same result i.e. "tight money" either way people want more money than is available.

Both could also result in (or cause) higher interest rates. But the higher interest rates should also tend to balance (or decrease the demand for money because it is now more expensive).

In other words as interest rates rise at some point the demand drops off because people don't want it bad enough to pay such high rates.

Is Deflation Good or Bad?

Actually, deflation itself is neither good nor bad. It depends on the cause of the deflation whether people will suffer or rejoice. As I said, if the cause is increasing supply of goods that would be good. Another example of this is in the late 1800's as the industrial revolution dramatically increased productivity.
However, if deflation is caused by a decreasing supply of money as in the great depression, that would be bad. The sucked all the liquidity out of the market place, the economy contracted, people lost their jobs and then banks stopped loaning money because people were defaulting. The problem compounded as more people lost their jobs and money supply fell further causing more people to lose their jobs, etc. etc.
Note: During the Depression demand for money was high (but no one could afford it) because supply was low.

So deflation can be caused by several different things and thus can be good or bad depending on the cause.

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http://inflationdata.com/inflation/Inflation_Articles/Deflation.asp

Navigator

05-13-2009, 08:50 AM

I don't know where you are getting this stuff from.

Here's a quick overview of a complex subject that I tried to distill into a few paragraphs in my post.

How money works can be a yawner, but if you find it interesting you can click on any of the highlighted words in the article and go to futher articles on the subject.

You'll find the definition of inflation and deflation, that I used in my post, under the 3rd paragraph title down: "Deflation Economics".

http://globaleconomicanalysis.blogspot.com/2009/02/fiat-world-mathematical-model.html

Naturist Mark

05-13-2009, 04:38 PM

Navigator's monetary deflation is what is freaking out the Treasury and Fed (banker's don't really give a damn about the price of butter or two by fours).

Price deflation is what is freaking out small business owners who are sitting on inventory that won't move and whose value is falling.

Both are happening right now.

It is hard to see price deflation at the Supermarket - even though there really are a lot of items that have come down. But it is evident on the wholesale level. For instance wheat was trading nearly twice as high a year ago as it is now. (It spiked unusually high due to drought in Australia).

According to the American Farm Bureau Federation Marketbasket Survey, the price of a gallon of milk dropped 21% during the first quarter of 2009, and stands at 17% less than a year ago. Eggs have fallen 30% over the last year. Only organic Milk and Eggs have maintained most of their value. Marketbasket (http://www.agweb.com/get_article.aspx?pageid=150159)

Lumber prices have fallen precipitously, down about 30% from a year ago, although there was a springtime uptick in March, the price trend is again negative. TFC Commodity Charts (http://futures.tradingcharts.com/printchart/LU/W)

There is some belief that the decline in CPI has leveled off (http://online.wsj.com/article/SB124199634745704787.html), with the hope of some price growth on the horizon, but some analysts are skeptical, noting that just as the housing component of the CPI caused an understatement of price inflation rates in the past, it is now causing price inflation rates to look higher than they really are. Mish's Trend Analysis (http://globaleconomicanalysis.blogspot.com/2009/04/cs-cpi-negative-50-third-straight-month.html)

Skinview

05-13-2009, 09:43 PM

This is BS. Social Security is DESIGNED to have expenses exceed revenues during the time that most of the baby boomes are drawing retirement. That is why Reagan doubled SS taxes back in the 80s and created the trust fund - which didn't exist before that.And the trust fund still doesn't exist in reality.

The trust fund is expected to have enough in it to make up the difference between expenses and revenue for over 30 more years.Was expected. That was before we spent all of the trust fund money.

These prognostications of SS "bankruptcy" assume that when expenditures fall below revenue, the Social Security Administration will not be able to tap into the trust fund. There is no reason to believe that - the US has never defaulted on treasury bills - even during the great depression...Sanslines already addressed this before me, but since you ignored it:

The trust funds — which exist in paper form in a filing cabinet in Parkersburg, W.Va. — are bonds that are backed by the government's "full faith and credit" but not by any actual assets. That money has been spent over the years to fund other parts of government. To redeem the trust fund bonds, the government would have to borrow in public debt markets or raise taxes.
To tap the trust fund, the government would have to increase borrowing or raise taxes because Social Security bonds exist only as bookkeeping entries.

Government obligation
While the government is obligated to redeem those bonds, it has already spent the excess Social Security collections over the years to fund general government operations, providing the trust funds with IOUs.To rephrase: The "Social Security trust fund" does not exist. When the time comes when the cost of benifits exceeds SS tax revenue, taxes will have to soar to cover those expenses, or benifits will be slashed, or both. Use of the phrase "Social Security trust fund" is a deception by Democrats to lull voters into thinking that nothing needs to change because the government has a mythical bag of money to pay for our benifits. The "full faith and credit" of the US rests on its ability to clean out your bank account to cover the ongoing spending spree.

If the Social Security trust fund had been in stocks and real estate in 2008 it would have lost a decade of usefulness.And it will more than bounce back in a year or two.

Baron Lake

05-13-2009, 10:08 PM

How's your .0401K doing now Skin? Ya gonna have to take out a loan to hold ya till the "bounce back"?

b.l.

Oh, that's right you're not retired. Yet

Skinview

05-13-2009, 10:22 PM

How's your .0401K doing now Skin? Ya gonna have to take out a loan to hold ya till the "bounce back"?

b.l.

Oh, that's right you're not retired. Yet
The money that I put into my 401k will get me a much better return than the rat hole of Social Security taxes.

Sanslines

05-14-2009, 04:37 AM

Well, the trust fund exists....in theory. Can't we just leave off the factual adjectives and state that the the trust fund exists. When someone asks about the trust fund we can always say that it does indeed exist......in theory.

We can also say that Social Security is put into a lock box.....................in theory and then just leave off the 'in theory part'.

There are many different ways to play word games and dupe the public into believing that which does not really exist.

Sanslines

05-14-2009, 04:45 AM

It is hard to see price deflation at the Supermarket - even though there really are a lot of items that have come down. But it is evident on the wholesale level. For instance wheat was trading nearly twice as high a year ago as it is now. (It spiked unusually high due to drought in Australia).

According to the American Farm Bureau Federation Marketbasket Survey, the price of a gallon of milk dropped 21% during the first quarter of 2009, and stands at 17% less than a year ago. Eggs have fallen 30% over the last year. Only organic Milk and Eggs have maintained most of their value. Marketbasket (http://www.agweb.com/get_article.aspx?pageid=150159)

Lumber prices have fallen precipitously, down about 30% from a year ago, although there was a springtime uptick in March, the price trend is again negative. TFC Commodity Charts (http://futures.tradingcharts.com/printchart/LU/W)

There is some belief that the decline in CPI has leveled off (http://online.wsj.com/article/SB124199634745704787.html), with the hope of some price growth on the horizon, but some analysts are skeptical, noting that just as the housing component of the CPI caused an understatement of price inflation rates in the past, it is now causing price inflation rates to look higher than they really are. Mish's Trend Analysis (http://globaleconomicanalysis.blogspot.com/2009/04/cs-cpi-negative-50-third-straight-month.html)

Wholesale prices mean nothing to the person that actually goes out into the real world and purchases items such as food and lumber. Retail prices are what matters both to consumers and to business. No one who needs lumber goes to the lumber exchange to purchase a few 2 x 4's. No one who needs a box of Wheaties goes to the commodities exchange to purchase a few boxes of wheaties.

The fact for those of us who live in the real world and purchase at real world stores is that there has been no overall price deflation at the retail level. The fact is that there was a brief period of time when certain food prices droped but have risen since then. Government statistics do not reveal this fact and do not matter to the consumer who actually goes to the food store and pays a real world price.

Mark, ya really need to get off yer 'puter, go to the stores, and see the real world prices for yerself. Ya will then see that the government information that you are posting is not reflective of the current real world situation.

nimrod

05-14-2009, 11:47 AM

I thought that America was allready broke. Nevermind SSI, look at the debt we are in, if that is not an indicator that we are broke I do not know what is.

This thread only touches on how America is finacially broke, I have to bring up some of the other ways that we are broke.

People are strugling to make it and our politicians have no problem voting themselves a raise and then raise our taxes to pay off the debt we are in. I have seen it here in California with Arnold doing the same as Grey Davis, but no one seems to be questioning it much just because now we are in more trouble then before.

Look at our political system and the great divide between the two major parties. Both parties need to pull their heads out and be a government of and for the people once again instead of a government of and for themselves.

We are broke in many ways, not just finacially.

Naturist Mark

05-14-2009, 06:08 PM

Wholesale prices mean nothing to the person that actually goes out into the real world and purchases items such as food and lumber. Retail prices are what matters both to consumers and to business. No one who needs lumber goes to the lumber exchange to purchase a few 2 x 4's. No one who needs a box of Wheaties goes to the commodities exchange to purchase a few boxes of wheaties.

The Wheat and Lumbers prices were wholesale - and those were to illustrate the effect on deflation on the income of suppliers.

The Marketbasket survey and CPI data are retail prices. They are explicitly about what consumers pay for goods.

Sanslines

05-15-2009, 04:18 AM

People are strugling to make it and our politicians have no problem voting themselves a raise and then raise our taxes to pay off the debt we are in. I have seen it here in California with Arnold doing the same as Grey Davis, but no one seems to be questioning it much just because now we are in more trouble then before.

Many people in California may think that the state's budget woes have been resolved. In fact, the only thing that has been resolved is to postpone the inevitable for another year. The same old budget fights and show downs will occur again. Given the current way that the state legislative process is configured, it can almost be guaranteed that the state will continue to be unable to resolve the never ending problem of spending too much and taking in too little to cover those expenses.

Sanslines

05-15-2009, 04:34 AM

The Wheat and Lumbers prices were wholesale - and those were to illustrate the effect on deflation on the income of suppliers.

The Marketbasket survey and CPI data are retail prices. They are explicitly about what consumers pay for goods.

I think that there was a great deal of confusion concerning who pays what and for what.

Concerning wheat and flour prices............

http://www.ers.usda.gov/Data/Wheat/YBtable32.asp

Who grows wheat and are they considered 'small business':

Family farmers who can access farm bill subsidies?

Megabusiness' ie companies such as Monsanto, etc?

Who purchases wheat:

Bakeries that can either be large mega bakeries or small operations and what do they pay for wheat?

In the past when weat prices increased, such operations were quick to increase their prices. When wheat prices dropped they were generally did not lower their prices due to the 'excuse' that they have fixed costs and the price that they pay for wheat is actually a very small part of their overall costs (this is what many claim).

Who purchases the final product:

Consumers - both large and small. They will pay the going price and the going price may increase rapidly but seldom, if ever, will decrease rapidy because prices are generally 'sticky' (Econ 101).

As a brief aside, gasoline prices are increasing around here. I initially believed that the price for regular would reach $2.50 per gallon by Memorial Day. As of last night, a number of gasoline stations are already charging that. Perhaps we will see $2.75 or $3.00 by Memorial Day. Given such price increases, you can rest assured that there will be no fear of consumer price deflation for if gasoline prices (along with diesel fuel) continue to rise, retail stores will again go through a round of price increases.

nimrod

05-15-2009, 12:02 PM

Many people in California may think that the state's budget woes have been resolved. In fact, the only thing that has been resolved is to postpone the inevitable for another year. The same old budget fights and show downs will occur again. Given the current way that the state legislative process is configured, it can almost be guaranteed that the state will continue to be unable to resolve the never ending problem of spending too much and taking in too little to cover those expenses.

Not trying to contradict, but everyone I know does not think the states budget woes have been resolved, most are just relieved that they finally came to an agreement on the budget. There are some agencies that come to a standstill because they are waiting for an agreement on the budget and for it to pass. Usually most are unhappy about what is in the agreement, but they can finally get back to work.

One thing that I think will help California is being more friendly to businesses. Have a friend that used to own a small business, he was taxed for everything that was in the store that was used to sell products, computer, shelves, display cases, even the hooks. I understand that they need revenue, but it is a bit much when hooks used for display are being taxed.

jon71

05-15-2009, 04:54 PM

Sanslines

05-15-2009, 06:07 PM

Not trying to contradict, but everyone I know does not think the states budget woes have been resolved, most are just relieved that they finally came to an agreement on the budget. There are some agencies that come to a standstill because they are waiting for an agreement on the budget and for it to pass. Usually most are unhappy about what is in the agreement, but they can finally get back to work.

One thing that I think will help California is being more friendly to businesses. Have a friend that used to own a small business, he was taxed for everything that was in the store that was used to sell products, computer, shelves, display cases, even the hooks. I understand that they need revenue, but it is a bit much when hooks used for display are being taxed.

Just wait until they dream up and pass a law that taxes nudists for not wearing clothes. If it isn't enough to tax all clothing in California, no doubt they will have to resort to taxing people for lack of clothing fairly soon.

inudist

05-15-2009, 07:46 PM

Naturist Mark

05-15-2009, 08:37 PM

It was just in the news recently that Social Security is good until 2037. This was actually depicted as a drop. That just shows how silly this talk about it already being in the negative is. If we do nothing at all it's good for about 20 years. If we make token improvements we can add decades to that. This is not a problem.

Social Security is NOT going broke in 2037. That is the date that they now expect the Boomer retirement trust fund to be used up. That is OK, it was designed from the beginning to run out.

For the 50 years before Reagan and Congress started the trust fund, Social Security operated on a pay as you go basis. It was not "Broke" or "Bankrupt" or "Insolvent". After 2037 it will return to pay as you go, as was always intended.

Right now, and for several more years even with the economy in the tank Social Security is taking in far more money than it is expending - the trust fund is still growing and will continue to grow before we even begin to draw from the trust fund - even though baby boomers are already retiring.

Because of the higher number of retirees compared to workers paying into Social Security, it is expected that when the trust fund is used up in 2037 or so, there will be a shortfall of revenue compared to expenditures. But it won't be necessary to cut benefits or raise the retirement age to close the gap. Nor will it be necessary to raise the Social Security tax rate that most workers pay.

All that will be required is a reduction or elimination of the Social Security tax discount that is given to the wealthy. They wouldn't have to pay a higher percentage of their income than anyone else, they would just have to pay closer to that percentage than they do now.

Remember this. ALL of the scaremongering you hear about Social Security "going broke" and the necessity to "cut benefits" is entirely about avoiding a reduction of the discount on SS taxes given to the wealthy.

Sanslines

05-16-2009, 04:07 AM

Social Security is NOT going broke in 2037. That is the date that they now expect the Boomer retirement trust fund to be used up. That is OK, it was designed from the beginning to run out.

The trust fund in reality is a 'box stuffed with IOU's' It has already been stated numerous times that a lock box for social security funds do not exist. Funds are routinely 'borrowed' from social security and IOU's are put in the place of funds. Given the current enormous expenditures of funds (ie rampant out of control deficit spending), the government does not have sufficient funds to cover those IOU's. The government has therfore resorted to a funding shell game. Eventually the game will be over and the day of funding reckoning will arrive.

If Social Security funds were kept in a lock box, then Social Security would indeed be presently running a surplus. However, since this lock box does not exist, those surplus funds have already been accessed and spent on other government programs. Any meaninfgul conversation about Social Security must acknowledge this simple fact.

"In common usage a trust fund is an estate of money and securities held in trust for its beneficiaries. The Social Security Trust Fund is quite different. It is an accounting of the difference between tax and benefit flows. When taxes exceed benefits, the federal government lends itself the excess in return for an interest-paying bond, an IOU (http://en.wikipedia.org/wiki/IOU) that it issues to itself. The government then spends its new funds on unrelated projects such as bridge repairs, defense, or food stamps. The funds are not invested for the benefit of present or future retirees."

http://en.wikipedia.org/wiki/Social_Security_debate_%28United_States%29

As for Social Security going broke, the past tried and true remedy for any social security revenue problems has always been to raise the social security tax and / or to reduce benefits or raise the age of elegibility for receiving benefits.

Naturist Mark

05-16-2009, 06:39 AM

The trust fund in reality is a 'box stuffed with IOU's' It has already been stated numerous times that a lock box for social security funds do not exist. Funds are routinely 'borrowed' from social security and IOU's are put in the place of funds. Given the current enormous expenditures of funds (ie rampant out of control deficit spending), the government does not have sufficient funds to cover those IOU's. The government has therfore resorted to a funding shell game. Eventually the game will be over and the day of funding reckoning will arrive.

That is just silly.

The Social Security Trust Fund is invested 100% in treasury bonds. The most secure investment on the planet. The US government has never defaulted on a treasury security, and if it ever does it will be because the government has fallen.

The trust fund has never been 'raided' or 'spent'. Every dollar Social Security has put into it is still part of the fund, not a penny is missing.

Funds are routinely 'borrowed' from social security and IOU's are put in the place of funds Nonsense.

Of course the trust fund is full of IOU's. Every bond is an IOU from the very beginning that is what "bond" means! It is not a pile of diamonds sitting in vault. The money in your savings account is not sitting in a vault either, your balance is an IOU from the bank. Every penny ever spent on a treasury security has immediately been turned into an IOU.

The meaning of "lock box" is not that the money the treasury takes in from the sale of securities is not spent - it is, it always has been. The meaning is that the money put into the SS trust fund, which is designed to pay only for Social Security benefits, should not be counted as current income that offsets current deficit spending in the federal budget. In other words - you shouldn't count one IOU (treasury bonds sold to SS) as offsetting another IOU (treasury bonds sold to cover deficit spending). It is a dishonest accounting practice, but it has nothing to do with the value of the trust fund. The reasoning for that dishonest accounting is that the treasury securities sold to the trust fund is money the government owes to itself, not to outside parties like treasury securities sold to Saudi Arabia or China to cover the deficit - except that is not true, the securities in the Trust Fund are owed to future Social Security recipients - not to the government. That is why Al Gore said the trust fund should treated as a "lock box" - but he was talking about accounting practices, not an actual box with money it it.

Next time someone tells you that the Social Security Trust Fund is just a drawer full of IOU's , give them a big dope slap and say "DUH".

As for Social Security going broke, the past tried and true remedy for any social security revenue problems has always been to raise the social security tax and / or to reduce benefits or raise the age of elegibility for receiving benefits.Social Security is not "going broke", it has a surplus that will last until at least 2038, it is the least "broke" government program in existence.

The retirement age for the tail end boomers like me, and everyone younger, has already been pushed back to age 67. Adjustments to benefits level due to inflation have already been pegged to a CPI number that lags behind the actual cost of living. Further benefit cuts are not likely. But they are not necessary either. We don't really "have to" change anything so long as we can draw from the trust fund. And after that all we "have to" do to cover the gap is reduce the SS tax discount given to the wealthy.

Sanslines

05-16-2009, 07:49 AM

.......... We don't really "have to" change anything so long as we can draw from the trust fund. And after that all we "have to" do to cover the gap is reduce the SS tax discount given to the wealthy.

Here we go again. Theories about Social Security are NOT reflective of the realities. Politicians continue to spout half truths and down right lies about Social Security. If Social Security is so wonderfully well funded, then why do members of Congress have their own special retirement entitlement programs. The 'trust fund' is empty. There is no money to draw from. The money has already been spent on other things that have nothing to do with Social Security. All that is left is a pile of IOU's and given the enormous deficit spending that is occuring now, there just is no money to cover such IOU's. The future looks scary as the day will come when people will be forced to pay for all of the enormous deficit spending that is occuring now.

Peterson Hits Social Security Myths

September 27, 2000

Peter Peterson, former Commerce Secretary and founder of the Concord Coalition (http://www.concordcoalition.org/), lamented in the New York Times this week that in the coming election "what poses for debate on entitlements may be worse than no debate at all. The bidding and one-upmanship on the campaign trail could easily lock the new president into indefensible positions that block genuine and badly needed reforms."

"Why is there so little understanding of the long-term challenge? Two big myths are anesthetizing our judgment: Myth No. 1: Social Security is in good shape because it has a trust fund. We are often told that the trust fund will keep the system solvent until 2037 if we do nothing and, if we make some minor tweaks, it will last until 2075. Who could get excited over such a distant danger?

"What we are rarely told is that the trust fund is fiscally and economically meaningless, an accounting fiction; this money has already been spent. Its so-called assets are nothing but a stack of IOU's from the Treasury. By 2015, Social Security's annual costs will start to exceed its tax revenues by ever ballooning margins.

"Because this is a pay-as-you-go system, Congress would then have to raise taxes, cut other spending or borrow from the public to redeem the IOU's -- precisely as if there were no trust fund -- or else take a heavy hatchet to Social Security and Medicare at the very moment the huge boomer generation is moving into its elder years.

"Some argue that we can use the projected budget surpluses to pay off the IOU's. Alas, this isn't possible. The surpluses themselves may not materialize. For one thing, an economic downturn could easily turn the surpluses into deficits in just a few years. (Note: This article was written in 2000 when there was a surplus. Those days are long gone as we continue to increase deficit spending to enormous and unprecidented levels). For another, the budget projections assume, implausibly, that discretionary spending will not grow faster than inflation -- in spite of major new commitments to defense and education.

"If the surpluses do materialize, much of the money is likely to be spent. Gluttons don't often turn down a free lunch. Presidential candidates and members of Congress rarely withstand the temptation to give away surpluses by increasing spending or cutting taxes. There's much talk of putting a "lock box" on the surpluses. But no one has yet designed a lock box that Congress couldn't pick. Even if the lock box works, the money in the trust fund is but a small down payment on future obligations.

"Myth No. 2: The New Economy will allow us to grow our way out of the problem. According to this myth, official projections, which point to a gradual slowdown in economic growth, are too pessimistic. The critics confuse pessimism with arithmetic. Economic growth depends not just on growth in productivity, that is, output per worker, but also on rising numbers of workers. By the 2020's, the labor force will be growing only about one-tenth as fast as in the last quarter century. Given the demographics, it would fly against all logic if economic growth did not slow.

"A better question is whether the official projections are too pessimistic about the growth in productivity. But keep in mind that even a huge boost in productivity won't do much to reduce Social Security's burden. According to Alan Greenspan, the Federal Reserve chairman, eliminating Social Security's long-term deficit would require a 200 percent increase in long-term productivity, a leap that few economists, even new economy enthusiasts, believe is possible.
"Our leaders face a choice. They can address the question of entitlements for the elderly while the economy is still booming and the budget is in the black, and before most baby boomers retire. Or they can delay until the window of opportunity closes. Either way, America will change course. If we act now, everyone, young and old, will have time to adjust and prepare."

http://www.socialsecurity.org/daily/09-27-00.html

Naturist Mark

05-16-2009, 08:09 AM

Naturist Mark

05-16-2009, 08:46 AM

"Why is there so little understanding of the long-term challenge? Two big myths are anesthetizing our judgment: Myth No. 1: Social Security is in good shape because it has a trust fund. We are often told that the trust fund will keep the system solvent until 2037 if we do nothing and, if we make some minor tweaks, it will last until 2075. Who could get excited over such a distant danger?

"What we are rarely told is that the trust fund is fiscally and economically meaningless, an accounting fiction; this money has already been spent. Its so-called assets are nothing but a stack of IOU's from the Treasury. By 2015, Social Security's annual costs will start to exceed its tax revenues by ever ballooning margins.

What Peterson is claiming is that since the Trust Fund is in treasury securities, it has already been spent. Duh ...

He is using a rather novel definition of "solvent" to claim that when Social Security begins to redeem its IOUs - perhaps in 2015, it will be insolvent - not correct. You are not insolvent when you begin to withdraw money from savings.

The truth in what Peterson is saying is that the entire federal government may have to be spend more than its income in order to meet all of its obligations, including redemption of Social Security trust fund "IOUs". That is nothing new, the US government has been running a deficit since the Revolution, by that definition the US government has been insolvent from day one.

The US treasury pays off treasury bonds every day of the year, old bonds are redeemed and new ones sold. There is absolutely no reason to believe that will suddenly become impossible when SS begins to redeem its bonds. Worst case is that the Treasury will sell some new bonds to cover the cost - just like it does every single day of the year. That doesn't help the federal deficit, but there is no reason to believe that the redemption of SS trust fund bonds will be any worse than any other bond that is redeemed every day. There is nothing about SS trust fund bonds that makes them any less likely to be redeemable than any other government bond.

If the US treasury is ever not able to redeem bonds as they become due, making adjustments to Social Security benefits will be a moot point, because the US government will have fallen and the accompanying economic catastrophe will make the current depression look like a spring parade.

Sanslines

05-16-2009, 10:18 AM

Every treasury security is an IOU. Every single one. No one has "replaced the funds in the trust fund with IOUs" because the trust fund is 100% IOUs to begin with. No one has removed any of the funds - that is the IOUs - from the trust fund - they are still there, they are not yet being redeemed. To claim that that the Social Security trust fund is "empty" because it is "full of IOUs", is blatant dishonesty, it is a clear sign that someone is either trying to pull one over on you, or has been misled by someone else who was trying pull one over on them.

Follow along with me class -
1) Every bond is an IOU
2) Every treasury security is an IOU

When Social Security turns over revenues to the Treasury in exchange for bonds - that is when the money was borrowed. That is what bonds are - the government borrowing money in exchange for an IOU.

Every claim of an "empty trust fund" because it has been "replaced by IOUs" is nonsensical drivel.

You have completely and totally missed the point with all of this. The point is that with a normal trust fund, funds that are collected are set aside to be eventually used exclusively and specifically for the original intended purpose. This is what is meant when certain individuals call for a social security fund lock box.

This has not happened. Social Security is therefore not a 'trust fund' at all in the traditional sense. The monies that were specifically collected for social security have been used for other purposes. They have not been set aside for social security. Instead, the so called trust fund 'funds' are actually a bunch of IOU's. The IOU's represent money that was intially collected for the sole purpose of social security but has been spent elsewhere on other government programs. This was NEVER the original intent of social security. Social Security funds were never intended to be used as a back door shell game type of funding for other programs. If the government wants to fund other programs, then fund those programs directly. Do not use social security funds for those purposes.

Furthermore, you have missed the point that borrowed money must eventually be paid back. Where will the money come from given the record deficit spending that is occuring right now? Print more money? Expect China to fund our Social Security obligations in the future?

As for bonds, this is what a bond is:

http://en.wikipedia.org/wiki/Bond_(finance)

A bond is a debt security. In the case of social security what is the security. It is the 'word' of the Federal Government. The Federal Government can only borrow so much before their 'word' becomes worthless and then the whole world will wind up in economic collapse. This is exactly where the USA is headed unless the enormous amount of deficit spending is brought under control and fast. The rest of the world will not be able to fund unlimited USA government deficit spending.

Sanslines

05-16-2009, 10:29 AM

What Peterson is claiming is that since the Trust Fund is in treasury securities, it has already been spent. Duh ...

He is using a rather novel definition of "solvent" to claim that when Social Security begins to redeem its IOUs - perhaps in 2015, it will be insolvent - not correct. You are not insolvent when you begin to withdraw money from savings.

The truth in what Peterson is saying is that the entire federal government may have to be spend more than its income in order to meet all of its obligations, including redemption of Social Security trust fund "IOUs". That is nothing new, the US government has been running a deficit since the Revolution, by that definition the US government has been insolvent from day one.

The US treasury pays off treasury bonds every day of the year, old bonds are redeemed and new ones sold. There is absolutely no reason to believe that will suddenly become impossible when SS begins to redeem its bonds. Worst case is that the Treasury will sell some new bonds to cover the cost - just like it does every single day of the year. That doesn't help the federal deficit, but there is no reason to believe that the redemption of SS trust fund bonds will be any worse than any other bond that is redeemed every day. There is nothing about SS trust fund bonds that makes them any less likely to be redeemable than any other government bond.

If the US treasury is ever not able to redeem bonds as they become due, making adjustments to Social Security benefits will be a moot point, because the US government will have fallen and the accompanying economic catastrophe will make the current depression look like a spring parade.

You are insolvent when you wish to withdraw from savings that do not exist. Those savings have been spent elsewhere. They no longer exist. They were replaced with IOU's that represent money that must come from somewhere. Where will that money come from to fund social security obligations? More borrowing from other areas? Even more deficit spending? How much of this endless shell game can go on before the system breaks. What Peterson is discussing must be put in the context of the year 2000, when the federal government was running a surplus. Those surpluses are long gone. They have been replaced by year after year of deficit spending under Bush. They are now replaced with deficit spending of orders of magnitude higher under Obama. How much more deficit spending can occur? Do deficits even matter? If not then you have your answer to the other thread where it was sugggested to give everyone over 50 one million dollars. That can certainly be funded with more deficit spending. Why not. That's exactly what will happen with social security.

How is the USA able to deficit spend to record levels now. We do it by having nations, such China, cover our deficit spending. Do we really want to allow the rest of the world to have such control over our nation because we can;t get our financial house inorder? How long will the rest of the world go along with this?

Social Security is not just another bond that needs to be paid off. It is a program where a specific tax is levied and was originally intended to be set aside and used solely and specifically for social security purposes. It was never intended to be used as a ready pool of money to fund wars or to fund other programs.

The US government is stepping on dangerous ground. If they do not get the exponentially increasing deficit spending under control and fast, then there will be economic collapse. This is not a fantasy. Hopefully it never becomes a reality.

Naturist Mark

05-16-2009, 10:35 AM

You have completely and totally missed the point with all of this. The point is that with a normal trust fund, funds that are collected are set aside to be eventually used exclusively and specifically for the original intended purpose. This is what is meant when certain individuals call for a social security fund lock box.

Wrong.

A "normal" trust fund is not a pile of gold or diamonds in a vault. It is not "money set aside". It is a collection of securities, such as stocks and bonds that were purchased as an investment. In very conservative trusts the funds will be in the safest most secure securities available - and that is US Treasury bonds. EVERY trust fund is filled with IOUs. There is absolutely nothing unique about the Social Security trust fund, it is just as real as any other fund - except that it is invested 100% in the most secure security known to mankind.

What the bamboozlers who are scaring people about the Social Security trust fund are trying to do is convince us that it should be invested in private securities and stocks (hey! wouldn't that be socialism?) by the very same investment bankers we just bailed out (and gave bonuses to). If you like what has happened to your 401K in the last year, you'll LOVE what they would do to the Social Security trust fund - while collecting their "management fees".

Naturist Mark

05-16-2009, 10:50 AM

You are insolvent when you wish to withdraw from savings that do not exist. Those savings have been spent elsewhere. They no longer exist

The savings exist. They were not "replaced by IOUs", they ARE the IOUs. That is how every single bond or savings account for that matter works.

Do you think the money you put into your savings account at the bank exists as a pile of money that no-one has touched somewhere? It does not. As soon as you turned it over to the bank it was either spent, lent to someone else, or used to buy a security to serve as that bank's fractional reserve. Your savings account is nothing but a pile of IOUs. Does that mean you are insolvent?

No.

Nobody has redeemed the treasury bonds (or IOUs) in the Social Security trust fund or removed them. They are all still there. The money used to buy them in the first place has been used - just as the money you gave to the bank has been used. But your account isn't empty because of that.

If your definition of insolvency is that the money used to buy a security is then used by the party that sold the security, then anyone who relies on banking, or frankly on anything but gold coin, is insolvent.

Sanslines

05-16-2009, 10:52 AM

Wrong.

A "normal" trust fund is not a pile of gold or diamonds in a vault. It is not "money set aside". It is a collection of securities, such as stocks and bonds that were purchased as an investment. In very conservative trusts the funds will be in the safest most secure securities available - and that is US Treasury bonds. EVERY trust fund is filled with IOUs. There is absolutely nothing unique about the Social Security trust fund, it is just as real as any other fund - except that it is invested 100% in the most secure security known to mankind.

What the bamboozlers who are scaring people about the Social Security trust fund are trying to do is convince us that it should be invested in private securities and stocks (hey! wouldn't that be socialism?) by the very same investment bankers we just bailed out (and gave bonuses to). If you like what has happened to your 401K in the last year, you'll LOVE what they would do to the Social Security trust fund - while collecting their "management fees".

You are representing the past.

The Social Security Trust Funds are the Old-Age and Survivors Insurance (http://www.ssa.gov/OACT/ProgData/describeoasi.html) (OASI) and the Disability Insurance (http://www.ssa.gov/OACT/ProgData/describedi.html) (DI) Trust Funds. These funds are accounts managed by the Department of the Treasury. They serve two purposes: (1) they provide an accounting mechanism for tracking all income to and disbursements from the trust funds, and (2) they hold the accumulated assets. These accumulated assets provide automatic spending authority to pay benefits. The Social Security Act limits trust fund expenditures to benefits and administrative costs.
Benefits to retired workers and their families, and to families of deceased workers, are paid from the OASI Trust Fund. Benefits to disabled workers and their families are paid from the DI Trust Fund. More than 98 percent of total disbursements in 2008 were for benefit payments.

You will not look beyond this statement: "Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government." You obviously believe that the actual funds to back up the present social security IOU's will come from somewhere else in the budget. Given the enormous deficit spending, there in NO money out there. Just look at the amount of taxpayer money that is used to service the national debt. How much higher must this number go in order to keep the shell game going? How much more of a tax burden will we place upon people in the future to fund the current endles deficit spending?

The government 'has always repaid' does not mean that it always will. We NEVER have had the record deficit spending that is occuring right now. This is the difference between the past and the present. The 'full faith and credit of the US government' will be worthless if the government is unable to meet their obligations. Today, we heavily rely upon other nations to lend us money in order to meet our obligations. This can not go on for eternity.

The point that I have beem making over and over again is that Social Security should be a unique trust fund. Social Security was initially set up to be exactly that. It was never set up to be a general source of funding for any and all government programs.

What we really are disputing is the sustainablity of the federal budget. The federal government budget is a real shell game, and sadly social security is clearly part of that shell game.

To answer the original question, yes America is going broke. The federal government is living well beyond it's means. it is living on credit and deficit spending. This can not go on forever. We can not run this country on a pile of IOU's.

Sanslines

05-16-2009, 11:27 AM

USA's Future
Economic Collapse
Excerpt from FOUNDATION TO ALL FREEDOM

<B>

</B>As the most dominant empire since Roman times, America has helped to bring great wealth and prosperity to the world...
Pat Robertson

The merchants of the earth will weep and mourn over her because no one buys their cargoes anymore–cargoes of gold, silver, precious stones and perils; fine linen, purple, silk and scarlet cloth; every sort of citron wood, and articles of every kind made of ivory, costly wood, bronze, iron and marble; cargoes of cinnamon and spice, of incense, myrrh and frankincense, of wine and olive oil, of fine flour and wheat; cattle and sheep; horses and carriages; and bodies and souls of men.
Revelation 18:11–13

America's unquenchable materialistic appetite is the machine that fuels a global economy. Japan's economy would collapse if it were not for the billions of dollars per year gained in trading with America. When America goes into a recession, the world follows. When America's economy is booming, the world's economy strengthens. America devours, yet, is never satisfied. Running out of money, she tells the waiter to put it on her tab. He gladly complies making a tidy profit from the interest. He cannot serve her quick enough. The more she eats, the hungrier she becomes. As time passes, less goes to paying for food and more is needed to pay for the huge debt she is accumulating. Finally, all of her resources are used up in paying for the interest she owes. America falls crashing to the ground in economic ruin, so suddenly, it sends shock waves throughout the world. She is incapable of paying for her massive imports. Merchant ships sit offshore, heavy laden with cargo, weeping and wailing in horror for Babylon has fallen.

In 1929, the debt ratio in relation to the Gross National Product stood at a healthy 16%. In 1990, the national debt increased to an alarming 60% of the GNP. The total debt of America is greater than the combined external debts of all the nations of the world. America's debt is 4.3 trillion dollars which is equivalent to a 270 mile high stack of tightly bound $1000 bills. Each mile representing the depth of the pit America will be unable to crawl out of.

TREMORS OF AN ECONOMIC EARTHQUAKE

In 1929, America was having an economic explosion. Immigrants were pouring in. There were more jobs than people. Farmers were leaving their fields for factories, making twice the income for half the labor. Politicians confidently portrayed a picture of an endless era of unprecedented prosperity. The prophets of gloom and doom were ignored as being fanatical crazies.

Fall is a beautiful time of year. A time of thanksgiving, a remembrance of God's blessing upon the birth of a Christian country. The leaves are in full bloom, ready to fall. It is a time for Sunday drives through the country without a thought of the winter to come. Splashes of color cover the hills and valleys. As the squirrels wisely gather food for a cold long winter, a nation is borrowing and spending because of a thriving economy that can promise only spring and summer.

A ship sails to England in the early part of October, full of wealthy entrepreneurs, a sign of absolute faith in a thriving American economy. While they were on their care–free vacation, enjoying the pleasure away from the stress of their jobs, a powerful economic tremor rippled through the United States. On October 24, 1929, 12,000,000 shares of common stocks traded in a single afternoon. By Monday, October 28th, the trading averages had dropped by 20 points. On Tuesday, October 29th, virtually all trades were to sell. It became A Nightmare On Wall Street. Investors became panic–stricken, resulting in a huge economic land slide. AT&T was down a hundred points, General Electric, 90 points and General Motors, plummeted 150 points. Sixteen million shares were traded at a loss of 10 billion dollars. This is equivalent to twice the amount of currency of the entire USA. Headlines proclaimed, WALL STREET CRASHES. Tens of millions of people's life savings became completely useless. Millionaires were reduced to the unemployed. On Wall Street, it rained the bodies of men jumping from their offices high above. When the ship returned full of happy–go–lucky entrepreneurs, they were worth the clothes on their backs. An economic winter had fallen upon America which would effect the entire earth. An ice age that would last four long years.

Revelation 18 describes an economic earthquake that will hit America with such force it will make the Great Depression seem like child's play. It will be utter destruction in which she will never rise again. A judgment from the hand of God because of a nation that is seeped in adultery and rebellion. A nation that began as a Light on a Hill became a corrupting stench rising up to the altar of the Living God. The moral fabric that would allow America back on its feet from the Great Depression will not be present in this massive economic earthquake. The Beast she rides will devour her flesh so he may rise to absolute world power, filling the vacuum created by America's fall. The only warning will be the prophetic voices of the faithful saints of God who will be hated and despised by the world. For the Harlot will be drunk on the blood of the saints. In her intoxication, her mind will be numb to her impending doom. A head–on collision with a wrathful God. If you have built your life on the sands of the kingdom of this world, your hopes, your dreams, your energies and aspirations will mingle with the smoke that will rise up from the utter destruction of Babylon.

Ten thousand nuclear war heads and the most technologically trained army in the world will not be able to stop America's economic disaster. An implosion that will come from the moral rot inside her heart. A physical army cannot stop the wave of spiritual destruction, for God does not use the weapons of this world to fight against her.

http://www.freedomyou.com/prophecy/USA_economic_colapse.htm

Sanslines

05-16-2009, 11:29 AM

What The Dollar's Collapse
Will Mean To The World
By Bruce Porteous
bruceport@xtra.co.nz
11-26-4

<DT><CENTER></CENTER><DT><CENTER><TABLE height=127 cellSpacing=0 cellPadding=0 width=555 border=0><TBODY><TR><TD vAlign=top width="601%" height=126><DL><DT>Over the last few days, there has been a number of articles in the media about the steady decline of the $US against the Euro. While many economists have forecasted the possiblity of the dollar declining against the Euro for sometime, most do not comprehend the significance of this. Some believe that the decline of the dollar against the currencies of American's trading partners will help correct the USA's trade deficit, and the dollar will stop falling when the trade imbalance is corrected. However, the evidence is that the opposite is happening - the $US has declined 40% against the Euro over the last 2 years, and during this time America's trade deficit has continues to deteriorate. <DT><DT>There is now nothing the USA can do to prevent the collapse of its currency, and its economy. It has no reserves to support its value, and has the most indebted country in the world, is dependant of the credit from America's former enemies. Over the last couple of days, both Russia and China have said they will be switching their considerable dollar reserves into Euro. This will only hasten the lack of confidence in the dollar, creating a global lack of confidence in the currency, and setting into free-fall. It will soon bring about the total collapse of the dollar, and the American economy. <DT><DT>The collapse of the dollar will throw the world into a global depression. Those nations with large external debts will not be able to trade sufficiently to earn the income to service their debts, and will slide into bankruptcy. The economies of New Zealand, Australia, Canada and the UK will also totally collapse, as a result of their indebtedness and not being able to service their borrowings. It will result in the Anglo-Saxon nations facing abject poverty, our people facing starvation, and a total break-down in society. Crime will become rampant. Law and order will cease to exist. Disease will become widespread. <DT><DT>The Asian economies, which have depended upon American trade, will also be severely affected. However, they will recover after a period, but only after considerable political and economic turmoil. <DT><DT>The EU will be in a much better position to survive the coming economic chaos. An influx of capital into the Euro zone by those selling dollars will provide the funding for rebuilding the economies of the new United States of Europe. However, the collapse of the $US will still severely affect the already depressed German and French economies. The resulting economic turmoil will create the need for the acceptance of a strong EU leader, who will be able to make the necessary political and economic reforms to enable Europe revive their economies. Those nations that accept the new EU Constitution will come under the control of this new leader, creating Europe as the world's new Super Power. <DT><DT>The Euro will become the world's only reserve currency, creating the means for the new United States of Europe to become the dominant economic power in the world. The new Europe will be able to dictate the terms on how the global economy should be run. They will take over the administration of America and Britain, placing the Anglo-Saxon people in bondage for repayment of their debts. <DT><DT>Americans do not appear to comprehend the bitterness that has grown around the world as a result of their illegal invasion of Iraq. While once Europeans looked up to, and admired America; today it is held in utter contempt for its arrogance and warmongering. Anti-European comments in the American media have only added to this hostility towards the US. America's attempt to impose its version of government on the world, its hypocrisy in claiming to be the moral leader of the world, while flooding the media with degenerate filth and garbage, has bought upon it disgust and contempt that few Americans can comprehend.</DT></DL></TD></TR></TBODY></TABLE></CENTER>http://www.rense.com/general60/whatthedollarscollapse.htm

</DT>

Naturist Mark

05-16-2009, 11:38 AM

You obviously believe that the actual funds to back up the present social security IOU's will come from somewhere else in the budget.

The funds will come from the same place as the funds for any other government security that is redeemed. From general revenues at the time of redemption, and from the sale of new securities (borrowing). There is absolutely nothing unique about redeeming Social Security trust fund securities compared to the redemption any other debt instrument ever sold by the US Treasury. The foolish idea that we would be 'broker' for redeeming SS IOUs than from redeeming treasury securities held by Saudi Arabia or China or Canada has no basis.

Yes, the US government's national debt is immense and out of control. That was not caused by Social Security, and Social Security did not contribute to it. Social Security is just about the only large government program that has been living within its means - that is unique. But it doesn't make Social Security more vulnerable than other programs. The people focusing their fear mongering about the national debt on Social Security - the only large program that has NOT contributed to it, are just softening us up so they can steal from us.

Let's be very clear here. Social Security has nothing to do with the explosion of the national debt. Cutting Social Security will do nothing to solve the problem. Attacking Social Security because of the budget deficit is a dishonest distraction, it is irrelevant, even destroying Social Security would do absolutely nothing to solve the debt problem. If Social Security fails because the government cannot redeem the treasury notes in the trust fund, Social Security will be the least of our problems - the government will have fallen. And so will the world economy. It will be Somalia everywhere.

Sanslines

05-16-2009, 12:17 PM

Let's be very clear here. Social Security has nothing to do with the explosion of the national debt. Cutting Social Security will do nothing to solve the problem. Attacking Social Security because of the budget deficit is a dishonest distraction, it is irrelevant, even destroying Social Security would do absolutely nothing to solve the debt problem. If Social Security fails because the government cannot redeem the treasury notes in the trust fund, Social Security will be the least of our problems - the government will have fallen. And so will the world economy. It will be Somalia everywhere.

Social Security taxes actually enable and prop up the enormous deficit spending that is occuring. Social Security is a ready pool of money that is endlessly used for purposes other then Social Security.

What is so puzzling is that when Bush was in office, there was nothing but non stop criticism about his out of control deficit spending. Today, then enormous exponential increase in deficit spending makes those years look like fiscally conservative years in comparison. Yet, there is no criticism. Perhaps this is just a sign that people want uncontrolled spending without properly paying for that spending and they will drive this country to complete and total economic collapse rather then change. We are doomed!

jon71

05-16-2009, 01:10 PM

inudist

05-16-2009, 01:45 PM

Sanslines

05-16-2009, 03:23 PM

Sanslines

05-16-2009, 03:29 PM

Here is an interesting article that relates a historical example of hyperinflation in Germany after WWI that seems to relate to the dangers Sanslines original post describes if anyone cares to read it.

http://www.thenewamerican.com/history/european/1056

Scare tactics? Perhaps. Provacative? Definitely. Is history about to repeat itself? I don't know.

I greatly fear that massive inflation could be the result all of this huge scale of borrowing and money printing that we are doing now. I'm not being partisan as both major political parties have a hand in this. Most of you probably think this article is garbage, but we cannot discount the historical lessons we have learned. No country is too big or too powerful to be immune to this. I'm not saying this will happen to us, but it can.

Have a nice day!

We should never discount historical lessons. What I find so strange is that Bush was so severly criticized (rightly so) for unrestrained spending. Yet now we have super unrestrained spending orders of magnitude higher and there is little to no criticism.

Deficit Projected To Swell Beyond Earlier Estimates

CBO Expects Trillions More in Borrowing

By Lori Montgomery (http://projects.washingtonpost.com/staff/email/lori+montgomery/)
Washington Post Staff Writer

Saturday, March 21, 2009; Page A01

President Obama's ambitious plans to cut middle-class taxes, overhaul health care and expand access to college would require massive borrowing over the next decade, leaving the nation mired far deeper in debt than the White House previously estimated, congressional budget analysts said yesterday.

In the first independent analysis of Obama's budget proposal, the nonpartisan Congressional Budget Office concluded that Obama's policies would cause government spending to swell above historic levels even after costly programs to ease the recession and stabilize the nation's financial system have ended.

Tax collections, meanwhile, would lag well behind spending, producing huge annual budget deficits that would force the nation to borrow nearly $9.3 trillion over the next decade -- $2.3 trillion more than the president predicted when he unveiled his budget request just one month ago.

Although Obama would come close to meeting his goal of cutting in half the deficit he inherited by the end of his first term, the CBO predicts that deficits under his policies would exceed 4 percent of the overall economy over the next 10 years, a level White House budget director Peter R. Orszag yesterday acknowledged would "not be sustainable."

The result, according to the CBO, would be an ever-expanding national debt that would exceed 82 percent of the overall economy by 2019 -- double last year's level -- and threaten the nation's financial stability.

"This clearly creates a scenario where the country's going to go bankrupt. It's almost that simple," said Sen. Judd Gregg (N.H.), the senior Republican on the Senate Budget Committee, who briefly considered joining the Obama administration as commerce secretary. "One would hope these numbers would wake somebody up," Gregg said.

Orszag defended the president's agenda in a conference call with reporters, noting that the forecast of bigger deficits and mounting debt is largely because of the CBO's view that the recession will be more severe and the recovery more tepid than the White House expects.

The White House's economic assumptions have come under fire for being too optimistic: Over the next decade, the administration projects that the economy will grow at an average annual rate of 2.8 percent, rosier than forecasts by the CBO (2.5 percent) and the Blue Chip economic consensus (2.3 percent).

Orszag, who served as CBO director before joining the Obama administration, also argued that long-term budget estimates are notoriously uncertain. He noted that the CBO's projections leave open the possibility that the government could record a small surplus, rather than a $750 billion deficit, after five years.

In a speech to state legislators at the White House yesterday, Obama said his budget "makes hard choices about where to save and where to spend."

But he said: "What we will not cut are investments that will lead to real growth and prosperity over the long term. That's why our budget makes a historic commitment to comprehensive health-care reform. That's why it enhances America's competitiveness by reducing our dependence on foreign oil and building on a clean-energy economy. And that's why it makes a down payment on a complete and competitive education for every child in America, from the cradle up through the time that they get a career."

The CBO is the official scorekeeper for budgeting on Capitol Hill, and the new report could complicate efforts to win congressional approval for Obama's $3.6 trillion request for the fiscal year that begins Oct. 1. While Obama had predicted a deficit of nearly $1.2 trillion for 2010, the CBO puts next year's budget gap at nearly $1.4 trillion. And this year's deficit is now projected to soar past $1.8 trillion, or 13 percent of the economy -- the deepest well of red ink since the end of World War II.

Deteriorating economic conditions are a major cause of the darkening fiscal picture, according to the CBO. But other factors also are weighing heavily on the budget this year and next. For example, the $700 billion financial-system bailout is now expected to cost taxpayers at least $350 billion, by CBO estimates, because the investments the Treasury Department has made in banks and other financial institutions are worth considerably less than when the bailout was approved. In addition, Obama proposes to use a portion of the money to buy down troubled mortgages, a program that will provide no return to the taxpayer.

The CBO's estimates assume that the Treasury will win approval to spend another $500 billion on the bailout, at an ultimate cost to taxpayers of $250 billion.

The government takeover of mortgage-finance giants Fannie Mae (http://projects.washingtonpost.com/post200/2007/FNM/) and Freddie Mac (http://projects.washingtonpost.com/post200/2007/FRE/) is also proving more costly than expected, the CBO reports. On the bright side, however, the office projects that it will cost taxpayers less to cover deposits at failed banks than previously projected because federal officials recently increased insurance premiums.

Democratic budget leaders are putting the finishing touches on their versions of Obama's spending plan and hope to bring them to a vote in the House and Senate in the next two weeks. Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, said he has already made "lots of adjustments" that will slice billions from Obama's spending proposals, generating smaller deficits.

"We're requiring more things to be paid for and to have tough spending discipline. It's just got to be done," said Conrad, who expects to unveil an outline of his budget proposal Tuesday.

But Conrad and House Budget Committee Chairman John M. Spratt Jr. (D-S.C.) said they will preserve Obama's priorities. "We will follow President Obama's lead," Spratt said, "and produce a budget that cuts the deficit in half over the next four years but still invests in areas critical to our future such as energy, education and health care."

Orszag said such changes are a common part of the budget process. "No one had any expectation they would take our budget, Xerox it and vote on it," he said. "I am confident that what will come out of the committees will lead to a fiscally sustainable path."

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/20/AR2009032001820.html?hpid=topnews

Naturist Mark

05-16-2009, 03:32 PM

For the record America has operated in debt our entire existence other than a few years after a lot of the Louisianna purchase had been sold to the American people. The nation as a whole was briefly in the green then, otherwise, it's been solid debt. Frankly after 200 years of it it's kind of silly to worry too much now.

Here's one analysis that agrees that the national debt is not a problem The U.S. National Debt Level: Is The Sky Really Falling? (http://www.rgemonitor.com/us-monitor/252860/the_us_national_debt_level_is_the_sky_really_falli ng) Latter's analysis is valid to a point. A certain amount of debt is a good thing, an economy that runs without debt is unable to grow or respond to change. Try buying a house or building a factory without debt. But at what point does debt become excessive? In your household it is when servicing the debt takes too much of your daily income to allow you to maintain your standard of living.

We had debt much higher than today during WWII (as a percentage of GNP), and you might note that we had to forego a lot during that time.

http://zfacts.com/metaPage/lib/National-Debt-GDP.gif

There are some substantial differences between today's debt of about 80% of GNP and the WWII 120% debt. And that has to do with the nature of our GNP. In WWII the GNP was created by an economy that produced real goods and services. 40% of today's GNP was created out of air through financial manipulations. The problem with that is that the air often leaks out ... which is what happened last year.

Thom Hartmann spells out the problem with excessive debt in an economy built on air: Debt is Not Money – and Must Be Regulated (http://www.thomhartmann.com/2009/04/12/debt-is-not-money-%E2%80%93-and-must-be-regulated/)

Sanslines

05-16-2009, 03:44 PM

Here's one analysis that agrees that the national debt is not a problem

So you finally found the answer to your dispute about giving $1 million to everyone over 50 if they quite their job and buy an American car.
You have now convinced us all that debt and deficit spending is irrelevant. It just seems odd that you now say national debt is not a problem and yet when Bush was in office you crucified him in part because he was running up an enormous debt. Why the change?? Could it possibly be politically motivated? Something seems awefully fishy here!

Naturist Mark

05-16-2009, 03:49 PM

So you finally found the answer to your dispute about giving $1 million to everyone over 50 if they quite their job and buy an American car.
You have now convinced us all that debt and deficit spending is irrelevant. It just seems odd that you now say national debt is not a problem and yet when Bush was in office you crucified him in part because he was running up an enormous debt. Why the change?? Could it possibly be politically motivated? Something seems awefully fishy here!

Sans, you might want to read the rest (http://www.clothesfreeforum.com/showpost.php?p=229283&postcount=49) of the post. If you do, you might notice that I disagree with the notion that deficits don't matter.

Sanslines

05-16-2009, 04:38 PM

Sans, you might want to read the rest (http://www.clothesfreeforum.com/showpost.php?p=229283&postcount=49) of the post. If you do, you might notice that I disagree with the notion that deficits don't matter.

That's good! I have heard just about every argument for and against deficits that conver then entire range. We are partly in the mess that we are today due to past reckless deficit spending. We have heard the same old past arguments over and over again with such glorious projections as to how deficits will be cut in half due to economic growth. Yet this never quite materializes. It seems that the only tried and true method to prevent deficits is to tax at a sufficient level to cover expenditures - something that politicians just don't want to do because the majority of society seems to want something for nothing and expect others to pay for it.

Naturist Mark

05-16-2009, 07:37 PM

It seems that the only tried and true method to prevent deficits is to tax at a sufficient level to cover expenditures - something that politicians just don't want to do because the majority of society seems to want something for nothing and expect others to pay for it.

You may have a point there.

If you look at how the post WWII debt was vastly reduced (in percentage of GNP if not absolute dollars), you will find two things that happened at the same time. 1) Very high marginal tax rates (up to 90%) on income over the present day equivalent of 2 million dollars. Which caused 2) sustained economic growth. - Just the opposite of what the Club for Growth (http://en.wikipedia.org/wiki/Club_for_Growth) claims would happen.

Larry Beinhart lays out the historical facts:
Tax Cuts: The B.S. and the Facts (http://www.alternet.org/workplace/106410/tax_cuts:_the_b.s._and_the_facts/?page=entire)
Why the Economy Grows Like Crazy Amid High Taxes (http://www.alternet.org/workplace/106979/why_the_economy_grows_like_crazy_amid_high_taxes?p age=entire)

jon71

05-17-2009, 01:13 AM

I just read in today's paper about California facing a "tax revolt". A lot of the budget proposals are facing a special election and the only one expected to pass was one saying legislators can't raise their pay in a deficit year. The rest are expected to fail because people don't want to pay more taxes, big surprise. Well how do California voters want to balance their budget? The answer, less spending on prisons and state parks. That's it. As much or more spending on education, transportation, health care, etc. etc. etc. The only things where a majority of voters want to cut spending is prisons and state parks, NOTHING ELSE. Am I the only one who doesn't think that makes sense? That's even before you take into account that the state is under judicial orders to improve it's prison system, things have been let go too far for too long apparently. Then, for those of you who love irony, when Gov. Schwarzenegger said that if these budget proposals don't pass he may have to release some prisoners to cut costs the anti's started howling "scare tactics, how awful", lol! People need to realize that there is a give and take. If we want the deficit to go down we either raise taxes, cut spending or both. Ususally people will say "cut spending" but when you ask "what do you cut" you get very little consensus and most of the time when you do get a lot of people agreeing on one thing it's something piddly. The big ticket items are the military and ecucation. I think almost everybody knows we drastically underspend on schools. Ending Iraq will save some money but personally I think it's still important to fight Al-Queda and therefore Afghanistan matters. That limits how much we can cut. Then you get to the matter or timing. A recession is the WORST POSSIBLE time to cut spending. We need more spending, more jobs and economic growth. Then, when things are on track, we can cut back and focus on the debt. Personally I hope it's a gradual approach so we don't kill the rebound. The issue of America's economy is so much more than "debt bad".

Sanslines

05-17-2009, 04:38 AM

You may have a point there.

If you look at how the post WWII debt was vastly reduced (in percentage of GNP if not absolute dollars), you will find two things that happened at the same time. 1) Very high marginal tax rates (up to 90%) on income over the present day equivalent of 2 million dollars. Which caused 2) sustained economic growth. - Just the opposite of what the Club for Growth (http://en.wikipedia.org/wiki/Club_for_Growth) claims would happen.

Larry Beinhart lays out the historical facts:
Tax Cuts: The B.S. and the Facts (http://www.alternet.org/workplace/106410/tax_cuts:_the_b.s._and_the_facts/?page=entire)
Why the Economy Grows Like Crazy Amid High Taxes (http://www.alternet.org/workplace/106979/why_the_economy_grows_like_crazy_amid_high_taxes?p age=entire)

I read both of these articles and also the supporting reader's comments. I agree with some of the reader's comments that Larry Beinhart seems to have a political grudge against Repubs and also carefully picks and choses the 'facts' that he wishes to present.

This reader comment sums things up nicely:

"It appears this is an over simplification. First there are many other factors that play into this. For example - the impact of the enormous inflation and all time high interest rates during Carters time, an impact Reagan surely had to deal with in his tax plans.

Impacts of tax cuts cannot be taken in a vacume

A main factor regarding tax cuts impact is the balance between tax cuts and cuts in spending. If government continues to grow, as it did under Bush, and tax cuts do not generate the additional revenue it often does through economic stimulation, then the net government deficit over time would impact economic growth - a reverse effect it would seem.

Cut taxes AND cut spending would have a positive effect - I doubt this administration will come anywhere near controlling spending so we will have to pay so they can play."

It is true that Beinhart is sloppy and does not always clearly distinguish between corporate and personal income tax. He also assumes that the business tax loopholes of the past will remain and those loopholes will encourage business to reinvest in their business.

He really discredits himself when he ignores the rampant inflation and interest rates during the Carter years, and also the stock market bubble that formed during the Clinton years.

If Beinhart wishes to promote something that has real meaning, then he needs to put aside his political biases, include all of the facts (not just pick and chose which ones that support his opinions), include the extenuating circumstances that occured during times of tax increase and tax decreases, and also include other taxes that existed during the periods of times during tax increases and decreases.

Just looking at a 1959 Federal Income Tax Booklet now, I can unequivocable say that this booklet is small and doing one's personal income taxes at that time was much easier as compared today. The tax rates were certainly higher for high wage earners in those days, and there certainly were virtually no tax credits, loopholes, etc for things such as education, etc. However, it really would be meaningless to compare tax rates from 1959 versus today without taking into consideration all of the credits, exemptions, loopholes, ect that exist today but did not exist in 1959. what would be far more accurate is to compare overall tax burden.

Naturist Mark

05-17-2009, 06:10 AM

Sanslines

05-17-2009, 07:33 AM

Some of those comments were due to careless reading - for instance the "tech bubble" attributed to "Clinton" didn't cause a crash which took down the rest of the economy - indeed the economy continued to grow until after Clinton left office - for over a year - which is longer than most recessions and is an unprecedented response to a so called crash - this could only be because of the underlying robustness of economic growth. The tech bubble is likely an example of an actual bubble caused by "irrational exuberance" that met its inevitable correction rather than a direct response to tax policy.

Also the Kennedy/Johnson "tax cuts" were actually tax increases, since the reduction of top marginal rates accompanied the closing of much used/abused loopholes that resulted in higher effective tax rates at the top margins - still, like the Clinton tax increase they were too small to produce the kind of growth seen in the 50s.

Dr Ravi Batra covers similar ground from a very different direction - rather than focusing on top marginal tax rates like Beihart, he analyzes the redistributive effect of taxes and the wage-productivity gap.

Reagan: The Great American Socialist (http://www.truthout.org/032009R?print)
New Thinking on the Economy (http://www.truthout.org/031609A)

These people are pseudo-academics and are proposing theories based upon very selective information. They are not reflective of the true nature of the complexities of the economy. Tax policies are just one part of the very complicated picture. There are, of course, theories which state the exact opposite of what these articles are stating - that lowering taxes will stimulate growth - and those articles also use very carefully selective information to prove their point.

What really is a fact is that any talk of raising taxes on the wealthy always translates into more taxes or fees for the middle and lower classes.
Politicians of both parties are not going to antagonize the wealthy or big business thereby cutting off their source of campaign contributions (regardless of their rhetoric to the contrary).

Naturist Mark

05-17-2009, 05:32 PM

These people are pseudo-academics and are proposing theories based upon very selective information

Dr Ravi Batra (http://dandelionsalad.wordpress.com/2008/12/21/prophet-of-boom-and-bust-now-will-they-listen-to-ravi-batra-by-kendall-anderson/) is hardly a "pseudo-academic". LOL

Fitz1980

05-17-2009, 06:38 PM

The answer, less spending on prisons and state parks.

Well with prisons I can see. If we didn't lock up marijuana smokers and other non-violent drug offenders we could cut a lot from the budget.

Sanslines

05-18-2009, 03:49 AM

Dr Ravi Batra (http://dandelionsalad.wordpress.com/2008/12/21/prophet-of-boom-and-bust-now-will-they-listen-to-ravi-batra-by-kendall-anderson/) is hardly a "pseudo-academic". LOL

He has his theories and others have theirs. If there are so many geniuses out there, then ask yourself why we are in the mess that we are in.

This Dr Batra claims that we are on the edge of a social revolution.......lol............lol. This is pure baloney. There will be no revolution for a long time to come. We live in the age of apathy. Compare today to the 1960's where there was real revolution in the form of on-the-street protests.

I guarantee that if 1 million protesters showed up on the National Mall in fron ot the Capitol Building this July when the health care debates occur in Congress, and people stood up and vociferously demanded real change in the form of a one payer system, then Congree would suddenly abandon their refusal to consider such a system. As it stands now, there will be little if any protest, and Congress has already stated that a one payer system is not an option. Once again the insurance companies continue their stranglehold on insurance and their will be no real reform. This is due to the people's apathy.

If you really believe that Obama will create all of these miracles, then you are in for a huge disappointment. Without continued enormous and unrelenting grass roots support from the people, Obama doesn't have much of a chance for real and meaningful change. The failures won't be Obama's for lack of trying. The real failure will reside with people for being too apathetic to offer him reall support as a counterbalance against extremely powerful special interest groups.

Naturist Mark

05-18-2009, 06:14 AM

He has his theories and others have theirs. If there are so many geniuses out there, then ask yourself why we are in the mess that we are in.LOL, I see, Dr. Batra is a "pseudo-academic" because you don't agree with him ... not because of his academic bonafides.

If you really believe that Obama will create all of these miracles, then you are in for a huge disappointment.In case you haven't noticed, Obama has been backtracking on just about everything. He is the Compromiser in Chief, and is utterly under the spell of the very Wall Street Bankers cabal that utterly failed us. Geithner, Sommers, Bernanke - all come from the same small fraternity of investment bankers.

Health Care Reform? That looks like it is being turned over to Pharma and the Insurance companies - (because they have done such a good job so far?), they aren't even letting a single payer option be discussed, much less considered. I think there may very well be a million protesters in the streets (but the corporate media will report there were a 'few thousand'). I agree with you, that may be the only way to force the Obama administration and Congress to do the right thing.

Naturist Mark

05-18-2009, 06:22 AM

Well with prisons I can see. If we didn't lock up marijuana smokers and other non-violent drug offenders we could cut a lot from the budget.

Since so many prisons have been privatized, and even the non privatized ones funnel most of their budgets to private contractors and vendors, our prison-industrial-complex has become a corporate profit center. We have the highest incarceration rate in the world not because of our crime, or even that it decreases our crime level, but because it is necessary to keep the prisons full and to keep building more prisons in order to advance the industry. Prisons are now bigger business than higher education.

As long as there is profit to be made by locking up human beings, there is absolutely no incentive to actually reduce crime, to rehabilitate offenders (recidivism is GOOD for business), or to reform an utterly backward broken penal system.

Sanslines

05-18-2009, 06:29 AM

LOL, I see, Dr. Batra is a "pseudo-academic" because you don't agree with him ... not because of his academic bonafides.

No, I consider him a "pseudo-academic" because he is proposing theories based upon past events. Also some of his statements are based upon very isolated observations. I know academics and pseudo-academics very well. Anyone can come out with profound sounding statements and then justify them with certain select information. Dr. Batra is obviously not beyond this. Also, to be very clear, Dr Batra makes some good points that are worthy of further exploration as well as some unfounded points. I never portray anything in black and white where a person is either completely right or completely wrong. As for his academic bonafides, I look beyond impressive sounding credentials and directly at what is being proposed. We have a government full of academic bonafides and yet so many of these indviduals actually contribute to and create the enormous mess that we have today.

Finally, it is very important to always remember one simple statement: "Past performance is no guarantee of future results (performance in terms of stocks and mutual funds". Healthy skepticism should always form the basis of any use of past performance to postulate future economic theories.

In case you haven't noticed, Obama has been backtracking on just about everything. He is the Compromiser in Chief, and is utterly under the spell of the very Wall Street Bankers cabal that utterly failed us. Geithner, Sommers, Bernanke - all come from the same small fraternity of investment bankers.

Health Care Reform? That looks like it is being turned over to Pharma and the Insurance companies - (because they have done such a good job so far?), they aren't even letting a single payer option be discussed, much less considered. I think there may very well be a million protesters in the streets (but the corporate media will report there were a 'few thousand'). I agree with you, that may be the only way to force the Obama administration and Congress to do the right thing.

I have noticed that Obama is backtracking on many things. It is because he is no longer campaigning and has discovered just how difficult it is to create real change in government. If people do not keep the pressure on the system and continue to demand real change, then there will be no change. People will have no one to blame but themselves.

As for 1 million health care reform protesters, I plan to be one of them and will let you know just how many show up in July and camp out on the steps of the Capitol Building demanding that there be REAL health care reform for all and not just the same old continued sell out to pharma and insurance companies.

Naturist Mark

05-18-2009, 03:36 PM

As for 1 million health care reform protesters, I plan to be one of them and will let you know just how many show up in July and camp out on the steps of the Capitol Building demanding that there be REAL health care reform for all and not just the same old continued sell out to pharma and insurance companies.

I'll be with you in spirit if not in person.

Here's an article published yesterday:

Middle Class Healthcare Reform? Bend Over… (http://www.commondreams.org/view/2009/05/17-0)

Personally, I'll be happy if they just include an option to join medicare among the available plans that every citizen can choose.

Naturist Mark

05-18-2009, 04:02 PM

I consider him a "pseudo-academic" because he is proposing theories based upon past events.

Hmmmm ... as opposed to proposing theories based on future events?
Calling Dr. Nostradamus!

Batra has a pretty good record for economic and political prognostication - although his timing has been spectacularly off in a few cases - for instance he first forecast the present meltdown for 1990. His reasoning on the theories I've studied seems sound - doesn't mean his analysis is all encompassing and takes into account every variable (obviously not or his timing on the crisis in capitalism would have been better). I'm reading his latest book right now The New Golden Age: A Revolution against Political Corruption and Economic Chaos (http://www.amazon.com/New-Golden-Age-Revolution-Corruption/dp/0230613950/ref=sr_1_2?ie=UTF8&s=books&qid=1242686831&sr=1-2), published in 2007 I'd say he has improved his timing issues. Chapter 2 is "The Twin Bubbles: Housing and Oil".

Sanslines

05-18-2009, 04:21 PM

I'll be with you in spirit if not in person.

Here's an article published yesterday:

Middle Class Healthcare Reform? Bend Over… (http://www.commondreams.org/view/2009/05/17-0)

Personally, I'll be happy if they just include an option to join medicare among the available plans that every citizen can choose.

Thanks for the article along with any other info you might come across concerning any upcoming National Mall protests in DC in July.

We need to break the stranglehold that insurance companies have on the medical system and force the option where people can at least buy into medicare. The amount of profit that insurance companies make from the medical field is criminal. Someone is paying for those nice, shiny insurance offices in city centers across the country.

Sanslines

05-18-2009, 04:22 PM

Hmmmm ... as opposed to proposing theories based on future events?
Calling Dr. Nostradamus!

Batra has a pretty good record for economic and political prognostication - although his timing has been spectacularly off in a few cases - for instance he first forecast the present meltdown for 1990. His reasoning on the theories I've studied seems sound - doesn't mean his analysis is all encompassing and takes into account every variable (obviously not or his timing on the crisis in capitalism would have been better). I'm reading his latest book right now The New Golden Age: A Revolution against Political Corruption and Economic Chaos (http://www.amazon.com/New-Golden-Age-Revolution-Corruption/dp/0230613950/ref=sr_1_2?ie=UTF8&s=books&qid=1242686831&sr=1-2), published in 2007 I'd say he has improved his timing issues. Chapter 2 is "The Twin Bubbles: Housing and Oil".

I'll have to get a copy of his book from the library.

Skinview

05-19-2009, 04:36 AM

Since so many prisons have been privatized, and even the non privatized ones funnel most of their budgets to private contractors and vendors, our prison-industrial-complex has become a corporate profit center. We have the highest incarceration rate in the world not because of our crime, or even that it decreases our crime level, but because it is necessary to keep the prisons full and to keep building more prisons in order to advance the industry.

Ok Mark, take a deep breath and get a grip. I know you lefties get all upset when someone makes money, but please explain why tax paying juries would decide to convict someone to increase the profits of a privately run prison. Or why a cop would arrest someone in the first place for that purpose.

Skinview

05-19-2009, 04:56 AM

The funds will come from the same place as the funds for any other government security that is redeemed. From general revenues at the time of redemption, and from the sale of new securities (borrowing). There is absolutely nothing unique about redeeming Social Security trust fund securities compared to the redemption any other debt instrument ever sold by the US Treasury. The foolish idea that we would be 'broker' for redeeming SS IOUs than from redeeming treasury securities held by Saudi Arabia or China or Canada has no basis.

Yes, the US government's national debt is immense and out of control. That was not caused by Social Security, and Social Security did not contribute to it. Social Security is just about the only large government program that has been living within its means - that is unique. But it doesn't make Social Security more vulnerable than other programs. The people focusing their fear mongering about the national debt on Social Security - the only large program that has NOT contributed to it, are just softening us up so they can steal from us.

Let's be very clear here. Social Security has nothing to do with the explosion of the national debt. Cutting Social Security will do nothing to solve the problem. Attacking Social Security because of the budget deficit is a dishonest distraction, it is irrelevant, even destroying Social Security would do absolutely nothing to solve the debt problem.
Wrong. Wrong. Wrong. Let me be clear: That is wrong. A dollar spent on Social Security is no different that a dollar spent on an F-22A fighter, or unemployment benifits, or paying farmers not to grow crops, or Americorps, or road construction, or Obama's paycheck, or whatever else the Federal Government spends money on. It all comes out of the same pot. The more money the Federal Government spends on SS, the more money we have to borrow from the chinese.

Naturist Mark

05-19-2009, 05:54 AM

Ok Mark, take a deep breath and get a grip. I know you lefties get all upset when someone makes money, but please explain why tax paying juries would decide to convict someone to increase the profits of a privately run prison. Or why a cop would arrest someone in the first place for that purpose.

Because the profit motive overrides the (former) primary objective of serving justice and reducing crime. This has led to the proliferation of victimless crime laws, mandatory sentences for nonviolent crimes, and a prison system that encourages recidivism rather than rehabilitation. It isn't the police or juries that are behind the system designed to increase crime in order to feed the prison industrial complex.

Naturist Mark

05-19-2009, 05:55 AM

Wrong. Wrong. Wrong. Let me be clear: That is wrong. A dollar spent on Social Security is no different that a dollar spent on an F-22A fighter, or unemployment benifits, or paying farmers not to grow crops, or Americorps, or road construction, or Obama's paycheck, or whatever else the Federal Government spends money on. It all comes out of the same pot. The more money the Federal Government spends on SS, the more money we have to borrow from the chinese.

Social Security did not contribute to the national debt because Social Security brings in more money than it spends.

Skinview

05-19-2009, 08:56 AM

Because the profit motive overrides the (former) primary objective of serving justice and reducing crime.
Cops and juries have no profit motive to arrest and convict. It costs them money to do that.

This has led to the proliferation of victimless crime laws, mandatory sentences for nonviolent crimes, and a prison system that encourages recidivism rather than rehabilitation.This idiocy existed long before the existence of privately run prisons. Its driven by voter opinion. We are a land of authoritarians who want to impose our likes and dislikes on everyone else. We always have been, but perhaps a little less so than we used to be.

It isn't the police or juries that are behind the system designed to increase crime in order to feed the prison industrial complex.Its politicians who want to get votes by supporting popular laws. There is no conspiracy going on to keep it a crime to sell drugs.

Navigator

05-19-2009, 08:59 AM

There is no conspiracy going on to keep it a crime to sell drugs.

Are you sure?

Would the liquor lobby be in favor of legalizing pot?

Skinview

05-19-2009, 09:06 AM

Social Security did not contribute to the national debt because Social Security brings in more money than it spends.

Social Security brings in ZERO dollars. There is a tax, which happens to be called a social security tax, that brings in money to fund the Department of Defense, and the Department of Agriculture, and the Department of Justice, and the Department of State, and the Department of...

It has been proposed that the Social Security tax be abolished as a means to dispell the misimpression that it has something to do with Social Security. Perhaps it could at least be renamed the "Agriculture Price Support Tax", and then people would have a clearer idea of what the money is used for, and move people to view it with all the warmth and affection that it deserves.

Skinview

05-19-2009, 09:25 AM

Are you sure?

Would the liquor lobby be in favor of legalizing pot?

Ok, lets get real. There are lobbies that try to convince politicians to vote for all kinds of things. They print glossy brochures and post websites and buy magazine ads to promote whatever it is that they want. No doubt Lockheed has all sorts of ads and lobbyists and so forth to go around telling everyone what wonderful products they make and how important it is for the government to buy more. If the private prison operators want politicians to vote to make more victimless crimes (all the ones I can think of are pretty old), then there will be a website or something telling people how important it is to make chewing tobacco a crime, or whatever. They always are trying to get public opinion behind them, they are shameless, and they will try to pitch even the most ridiculous ideas. The need to ban the sale of small peaches because America prefers large peaches comes to mind. So when Mark posts a link to some prison management company website that says we need to make x a crime, then I will be amazed and convinced. But just for giggles, I would enjoy reading what gave Mark the idea that there is a conspiracy, if there is something besides his own fertile imagination.

MoonShadow

05-19-2009, 09:26 AM

?????????

Skinview -- the social security tax is called FICA (Federal (Insurance Contributions Act tax) which comes out of everyone's paycheck whether you are legal or not to work if you get a payroll check, you will pay FICA. It is an employment tax which funds social security and medicare and is specific. Most people call it social security tax but they are talking about FICA.

FICA brings in a lot of money. It is the cash cow that government keeps dipping their hands into to fund other programs/services. And, it is a program which works. Congress needs to leave it alone!

MoonShadow

05-19-2009, 09:30 AM

LOL there is no conspiracy to make selling drugs a crime. What is really happening is the so-called "war on drugs" is smoke and mirrors as there has never been a war on or against drugs and it apparently looks like there never will be one.

How can a government declare war on something that many within their ranks buy and many of those who support buy and use?

;)

Hey Navigator, you know the alkies don't want potheads around! :D

Skinview

05-19-2009, 09:31 AM

?????????

Skinview -- the social security tax is called FICA (Federal (Insurance Contributions Act tax) which comes out of everyone's paycheck whether you are legal or not to work if you get a payroll check, you will pay FICA. It is an employment tax which funds social security and medicare and is specific. Most people call it social security tax but they are talking about FICA.I know.

FICA brings in a lot of money. It is the cash cow that government keeps dipping their hands into to fund other programs/services. And, it is a program which works. Congress needs to leave it alone!Of course the FICA tax works. It takes lots of our money out of our paychecks.

MoonShadow

05-19-2009, 09:56 AM

[QUOTE=Skinview;229455]
We are a land of authoritarians who want to impose our likes and dislikes on everyone else. We always have been, but perhaps a little less so than we used to be.[QUOTE]

How true, how true. But, I agree we are a little less so now due to many people moving away from the right-winged zealousy that abounds in our culture. Once this stronghold was broken decades ago, we have slowly moved away from the harsh authoritarianism we once had. Hopefully, we will continue to break this up over time.

Skinview

05-19-2009, 10:10 AM

We are a land of authoritarians who want to impose our likes and dislikes on everyone else. We always have been, but perhaps a little less so than we used to be.

How true, how true. But, I agree we are a little less so now due to many people moving away from the right-winged zealousy that abounds in our culture.

Its not just the right wing. You should see what the left wing does to gun owners.

jon71

05-19-2009, 01:04 PM

Its not just the right wing. You should see what the left wing does to gun owners.

Almost nothing unfortunately. Teddy bears are subject to more govt. regulations than guns are and it doesn't have to be that way. The govt. could legally go much much further in regulating, and limiting guns, even outlawing certain models that is currently done. The N.R.A. (which doesn't come close to actually representing the typical pro-gun control, gun owner) is vastly over estimated.

Skinview

05-20-2009, 10:41 AM

Almost nothing unfortunately. Teddy bears are subject to more govt. regulations than guns are and it doesn't have to be that way.
It isn't that way. Thats BS. There are 20,000 gun control laws nationwide, and "A study published in the American Journal of Preventive Medicine notes 300 federal and state laws regarding the manufacture, design, sale, purchase, or possession of guns."
(Wikipedia http://en.wikipedia.org/wiki/Gun_politics_in_the_United_States)

The govt. could legally go much much further in regulating, and limiting guns,Most of the laws that currently exist are unconstitutional.

even outlawing certain models that is currently done.
The recent Heller decision of the Supreme Court struck down a ban on handguns, and would sensibly do the same with other gun bans. The Court stated that a gun ban was unreasonable and unconstitutional.

The N.R.A. (which doesn't come close to actually representing the typical pro-gun control, gun owner) is vastly over estimated.The NRA had a lot to do with the Republicans taking over Congress in 1994, and the Democrats have admitted it. Democrat political leaders are falling over themselves to make it sound like they are pro gun.

Naturist Mark

05-20-2009, 04:39 PM

jon71

05-20-2009, 09:58 PM

It isn't that way. Thats BS. There are 20,000 gun control laws nationwide, and "A study published in the American Journal of Preventive Medicine notes 300 federal and state laws regarding the manufacture, design, sale, purchase, or possession of guns."
(Wikipedia http://en.wikipedia.org/wiki/Gun_politics_in_the_United_States)

Most of the laws that currently exist are unconstitutional.

The recent Heller decision of the Supreme Court struck down a ban on handguns, and would sensibly do the same with other gun bans. The Court stated that a gun ban was unreasonable and unconstitutional.

The NRA had a lot to do with the Republicans taking over Congress in 1994, and the Democrats have admitted it. Democrat political leaders are falling over themselves to make it sound like they are pro gun.

Wishful thinking. There was a huge thread a while ago explaining that Heller only gave the gun nuts a fraction of what they wanted and claim to have. Since then a few gun restrictions have been struck down and many more have been upheld. The fact that there isn't any push to have the courts even look at many existing gun laws is a tacit admission that they're completely constitutional. The only thing you got right is that in recent years the anti-gun control people have been vastly overestimated. Not only are they a fraction of the American public that viewpoint is a minority view among gun owners even. The good news is that they will continue to dwindle. While not passing more gun control now could be viewed as a missed opportunity the truth is the opportunity will never go away. In fact in 8 or 12 years the next president might find it really easy to get some overdue gun control legislation passed. The shame is the lives lost prior to that which we could save if we get a handle on this.

Sanslines

05-21-2009, 03:57 AM

Did you see what those DemocRAT Socialists did today? They passed a law that made it illegal to take concealed weapons into national parks!

The Bastards!

What? They actually did the opposite? ... nevermind ...

Putting aside gun laws for a minute, what would you say about a nation that went to war immediately when over 3,000 were killed with the World Trade center attacks (not trying to minimize this event at all) BUT seems to passively accept that over 10 times this number are victims of homocide each and every year in this nation. Where is the national outcry and response to such an enormous homocide number? Why aren't American Armed Forces occupying American cities in order to keep the peace?

jon71

05-21-2009, 05:44 AM

nimrod

05-21-2009, 01:05 PM

It does not matter how many restrictions we put on guns crime will still happen, murders will still happen, accidental deaths will still happen, and suicides will still happen. Make guns illegal you just make more criminals and not stop any of what is happening in our society when it comes to violence.

Skinview

05-21-2009, 11:42 PM

Wishful thinking. There was a huge thread a while ago explaining that Heller only gave the gun nuts a fraction of what they wanted and claim to have.In your dreams. It was a huge victory. The Supreme Court ony looks at what is before it, and the Heller decision was never going to strike down many other unconstitutional laws. But it established that we have an individual right to bear arms, which opens the door wide open to attack a whole mountain of gun laws.

Since then a few gun restrictions have been struck down and many more have been upheld.And a lot of gun laws have simply been repealed without going to court after being challanged by the NRA, as has been the case with handgun bans in Chicago. Other rulings are contradictory, and some others could be expected to go up to the Supreme Court and be overturned there. And not every gun law is unconstitutional. One court ruled that illegal aliens don't have a right to bear arms. They don't have a right to vote either, and I doubt the NRA counts that one as a loss, or the ruling that upheld a law that mandated stricter sentencing for using a handgun in a crime.

The fact that there isn't any push to have the courts even look at many existing gun laws is a tacit admission that they're completely constitutional.BS. The NRA was vehemently against even taking the Heller case itself to the Supreme Court because they had no idea which way the court would rule. It was a 5-4 decision. The anti gun people didn't want it to go to the court for the same reason. Everyone on both sides were biting their nails. Just because the NRA doesn't want to roll the dice in court doesn't remotely mean that they think those anti gun laws are constitutional.

The only thing you got right is that in recent years the anti-gun control people have been vastly overestimated. Not only are they a fraction of the American public that viewpoint is a minority view among gun owners even.Wrong.

Do you believe the Second Amendment to the U.S. Constitution guarantees the rights of Americans to own guns, or does it only guarantee members of state militias such as National Guard units the right to own guns?

..........................Right of all Americans......Only state militias

All adults...........................73%.............. .......20%

Gun owners........................91%................. .....6%

Non-Gun owners..................63%....................28%

Source: USA TODAY/Gallup Poll of 1,016 adults Feb. 8-10. Margin of error for all adults: ±3 percentage points; for gun owners: ±6 points; for non-gun owners: ±4 points; Julie Snider, USA TODAY
http://www.usatoday.com/news/washington/2008-02-26-guns-cover_N.htm

jon71

05-22-2009, 01:27 PM

In your dreams. It was a huge victory. The Supreme Court ony looks at what is before it, and the Heller decision was never going to strike down many other unconstitutional laws. But it established that we have an individual right to bear arms, which opens the door wide open to attack a whole mountain of gun laws.

And a lot of gun laws have simply been repealed without going to court after being challanged by the NRA, as has been the case with handgun bans in Chicago. Other rulings are contradictory, and some others could be expected to go up to the Supreme Court and be overturned there. And not every gun law is unconstitutional. One court ruled that illegal aliens don't have a right to bear arms. They don't have a right to vote either, and I doubt the NRA counts that one as a loss, or the ruling that upheld a law that mandated stricter sentencing for using a handgun in a crime.

BS. The NRA was vehemently against even taking the Heller case itself to the Supreme Court because they had no idea which way the court would rule. It was a 5-4 decision. The anti gun people didn't want it to go to the court for the same reason. Everyone on both sides were biting their nails. Just because the NRA doesn't want to roll the dice in court doesn't remotely mean that they think those anti gun laws are constitutional.

Wrong.

http://www.usatoday.com/news/washington/2008-02-26-guns-cover_N.htm

You're overcome with wishful thinking. Not only will we see a lot more gun control, not in the next few years but in the next 10 to 20 years, there will be (is already really) great public support in doing so. Oh, thanks for the poll, that pretty much makes one of my points. The difference between gun owners and the national average is 14 to 18%. That's measurable, but not extreme. If you listen to some of the rhetoric from Wayne LaPierre and such you'd think it was 50 or 60 percent and it's not even close.

Naturist Mark

05-22-2009, 03:50 PM

Not only will we see a lot more gun control, not in the next few years but in the next 10 to 20 years, there will be (is already really) great public support in doing so.

I don't think so.

We are fundamentally a gun culture. The "cowboy ethos" is part of our cultural DNA. Unfortunately the upstanding responsible straight shooter part of that ethos fails too often - and that is what we need to bring back. It was what the NRA used to stand for - before it became a tool of partisan hackery.

We've spent hundreds of posts arguing about what the 2nd Amendment really means, but I'm not interested in restarting that. It doesn't really matter. No matter whether you are pro or anti gun control - every responsible American agrees that anyone who holds a gun should be fully in control of both themselves and the gun. Most Americans also agree that people have a right to self defense - even if that doesn't include the right to own every conceivable weapon.

There are more guns in America than people, firearms will never be banned. Law abiding citizens will never be prohibited from having some means of self defense. It just isn't going to happen.

There is a whole lot of territory between the extremes of not giving in one inch and taking all the guns away. That is where reasonable people have to stop fighting each other over extremist dogma and deal with reality.

inudist

05-22-2009, 04:48 PM

There is a whole lot of territory between the extremes of not giving in one inch and taking all the guns away. That is where reasonable people have to stop fighting each other over extremist dogma and deal with reality.

Hmmm.... Don't think you are the right person to be lecturing anyone about this. I would suggest practicing moderation before preaching it. Gotta call it like I see it.

Sanslines

05-22-2009, 06:17 PM

There is a whole lot of territory between the extremes of not giving in one inch and taking all the guns away. That is where reasonable people have to stop fighting each other over extremist dogma and deal with reality.

Isn't the reality that we are a violent country with many people who enjoy killing? Isn't this the real truth that can never be discussed by politicians for it is much easier to declare war on other nations then deal with our own violent culture?

Naturist Mark

05-22-2009, 07:06 PM

Hmmm.... Don't think you are the right person to be lecturing anyone about this. I would suggest practicing moderation before preaching it. Gotta call it like I see it.

Have you read what I've written about gun control? (It's pretty easy to search, here (http://www.clothesfreeforum.com/showthread.php?p=200162#post200162), here (http://www.clothesfreeforum.com/showthread.php?p=10410#post10410) or here (http://www.clothesfreeforum.com/showthread.php?p=199266#post199266) are good places to start.). This discussion comes up pretty regularly.

jon71

05-23-2009, 01:29 AM

I don't think so.

We are fundamentally a gun culture. The "cowboy ethos" is part of our cultural DNA. Unfortunately the upstanding responsible straight shooter part of that ethos fails too often - and that is what we need to bring back. It was what the NRA used to stand for - before it became a tool of partisan hackery.

We've spent hundreds of posts arguing about what the 2nd Amendment really means, but I'm not interested in restarting that. It doesn't really matter. No matter whether you are pro or anti gun control - every responsible American agrees that anyone who holds a gun should be fully in control of both themselves and the gun. Most Americans also agree that people have a right to self defense - even if that doesn't include the right to own every conceivable weapon.

There are more guns in America than people, firearms will never be banned. Law abiding citizens will never be prohibited from having some means of self defense. It just isn't going to happen.

There is a whole lot of territory between the extremes of not giving in one inch and taking all the guns away. That is where reasonable people have to stop fighting each other over extremist dogma and deal with reality.

There are a few trends that lead me to believe that the intermediate future will be a good one. One is hunting is on it's way out. This isn't because of liberals taking people's guns away, it's because of conservatives taking hunting land away. To all hunters reading this, Chamber of Commerce Republicans are your worst enemy. They will take your hunting land, pave it over and put up a mall. I'm stating it dramatically of course but undeveloped land is disappearing at a heavy pace. If you love hunting leave the N.R.A. and join the Sierra Club instead. This fact partially leads to the N.R.A. being comprised of, and dedicated to, the most out there and extreme people on this issue. It's not JUST that they're shrinking, it's also that the people they're losing the most are the more reasonable mainstream hunters and sport shooters. They'll be less and less able to win people over since they've lost their moderate wing if you will.
Obviously you're right about the often over looked middle ground. While I'm definitely pro-gun control I would never support a total ban on guns. Certain models should be out-lawed of course (automatics, semi-automatics and anything that can be converted into full or semi-automatic, cop-killer guns, plastic guns, etc.) and other restricts should be in place (waiting periods, felons and mental patients being barred from gun ownership, etc) but while that's more restrictive than some would like responsible sane gun ownership would remain and nothing in that would prevent hunting, sport shooting, or self-defense (in reality, not it the bizarro scenarios the gun nuts like to toss about). Oh, for the record when I say "gun nut" I'm only talking about the extremists who see nothing wrong with kids taking loaded guns to school (an actual N.R.A. position) or people being able to buy cop-killer guns no questions asked. I don't use the term to apply to all, or even most, gun owners.

Naturist Mark

05-23-2009, 07:42 AM

If you love hunting leave the N.R.A. and join the Sierra Club instead ... It's not JUST that they're shrinking, it's also that the people they're losing the most are the more reasonable mainstream hunters and sport shooters. They'll be less and less able to win people over since they've lost their moderate wing if you will.

Or join the American Hunters and Shooters Association (http://www.huntersandshooters.org/).

Skinview

05-24-2009, 09:24 PM

Or join the American Hunters and Shooters Association (http://www.huntersandshooters.org/).
Which is an anti gun front organization founded by members of Handgun Control Inc.

Skinview

05-24-2009, 09:31 PM

You're overcome with wishful thinking. Not only will we see a lot more gun control, not in the next few years but in the next 10 to 20 years, there will be (is already really) great public support in doing so.
I actually heard on NPR just this Friday that public support for gun control has dropped significantly.

Oh, thanks for the poll, that pretty much makes one of my points.How do you figure that?

The difference between gun owners and the national average is 14 to 18%. That's measurable, but not extreme. If you listen to some of the rhetoric from Wayne LaPierre and such you'd think it was 50 or 60 percent and it's not even close.I don't ever recall anyone on any side who remarked on the difference having any meaning. 14%? 60%? What does it prove either way?

Skinview

05-24-2009, 09:39 PM

I don't think so.

We are fundamentally a gun culture. The "cowboy ethos" is part of our cultural DNA.

There are more guns in America than people, firearms will never be banned. Law abiding citizens will never be prohibited from having some means of self defense. It just isn't going to happen.

Thanks for the support, but I'm afraid I'm not so optimistic. As time goes on, the nation's demographics are shifting to a population that is increasingly urban and immigrant. Neither group has much positive experience with guns, and they view them as scary things that they associate with criminals.

Skinview

05-24-2009, 10:07 PM

There are a few trends that lead me to believe... One is hunting is on it's way out.As I just wrote above.

They'll be less and less able to win people over since they've lost their moderate wing if you will.The NRA is regarded as too moderate by many gun owners, and they join Gun Owners of America instead.

While I'm definitely pro-gun control I would never support a total ban on guns. Certain models should be out-lawed of course (automatics,Production has already been banned.

semi-automaticsWhatever for? Why single out that mechanism?

and anything that can be converted into full or semi-automatic,Not that it would be easy, but the only thing that could be converted to semi-auto would be a lever action rifle, and it would probably be easier to start from scratch.

cop-killer guns,Any deer rifle will shoot through a bullet resistant vest like it was tissue paper. So I guess it is true you gun grabbers really do want to take away our hunting rifles.

plastic guns,There is no such thing as a plastic gun. Its another fabricated issue created by anti gun politicians.

etc.)The most ominous group of all.

and other restricts should be in place (waiting periods,Half of all households already have a gun in them. Making me wait for my next gun purchase is just harassment.

felons and mental patients being barred from gun ownership,Which has been the case for a loooong time.

Oh, for the record when I say "gun nut" I'm only talking about the extremists who see nothing wrong with kids taking loaded guns to school (an actual N.R.A. position)BS. Absolute rubbish. What kind of drugs do you take to dream this stuff up? Any rifle taken to the school shooting range, like the one in the junior high school where I used to live, should be unloaded, as per long articulated NRA safety rules.

or people being able to buy cop-killer guns no questions asked.No. The clerk should always ask if we need ammo with our new deer hunting rifle.

jon71

05-25-2009, 01:08 AM

Or join the American Hunters and Shooters Association (http://www.huntersandshooters.org/).

Thanks. It's good to see mainstream gun owners becoming more vocal in their support of sane policies. That's one more reason for optimism.

Naturist Mark

05-25-2009, 08:38 AM

Which is an anti gun front organization founded by members of Handgun Control Inc.

It is true that a former board member was the leader of a Massachusetts anti-gun violence organization affiliated with the Brady Campaign (formerly known as Handgun Control Inc.) and that the president of AHSA Ray Schoenke once made a contribution to a specific campaign by HCI back in 2000. AHSA does not oppose "common sense" gun regulation, but it does oppose banning and extreme restrictions - which is why AHSA opposed the Washington DC gun ban and submitted an amicus brief (http://www.huntersandshooters.org/node/1375) in support of Heller and against the position of the Brady Campaign in the District of Columbia v. Heller (http://en.wikipedia.org/wiki/District_of_Columbia_v._Heller) case, and currently opposes the resumption of the assault weapons ban (http://www.huntersandshooters.org/node/1480).

Skinview

05-25-2009, 09:40 AM

It is true that a former board member was the leader of a Massachusetts anti-gun violence organization affiliated with the Brady Campaign (formerly known as Handgun Control Inc.) and that the president of AHSA Ray Schoenke once made a contribution to a specific campaign by HCI back in 2000. AHSA does not oppose "common sense" gun regulation, but it does oppose banning and extreme restrictions - which is why AHSA opposed the Washington DC gun ban and submitted an amicus brief (http://www.huntersandshooters.org/node/1375) in support of Heller and against the position of the Brady Campaign in the District of Columbia v. Heller (http://en.wikipedia.org/wiki/District_of_Columbia_v._Heller) case, and currently opposes the resumption of the assault weapons ban (http://www.huntersandshooters.org/node/1480).

AHSA only endorses Democrat candidates. It endorsed Obama for President. Schoenke is the founding president of ASHA, and has donated millions to Democrat politicians, as well as HCI. Another AHSA leader, John Rosenthal, is the founder of Stop Handgun Violence. Stop Handgun Violence is credited with lobbying and subsequently helping to pass the draconian licensing and registration system in place here were I live in the state of Massachusetts. Joseph J. Vince, Jr., a member of the AHSA Board of Directors, has worked for the anti gun rights Brady center, and he has supported the Federal assault weapons ban. And to remove all doubt, Paul Helmke, the President of the Brady Campaign, says of the AHSA, "I see our issues as complementary to theirs".

AHSA is an anti gun front organisation for Democrat politicians, and is designed to funnel away support from real pro gun rights politicians.

Naturist Mark

05-25-2009, 10:26 AM

AHSA is an anti gun front organisation for Democrat politicians, and is designed to funnel away support from real pro gun rights politicians.

As opposed to the nonpartisan NRA?

Let's see, AHSA has endorsed 6 politicians over 4 years. Yep, all Democrats. Boy, that is a lot of 'cover'. How does that compare to the NRA?

AHSA has held positions opposite from the Brady Campaign on the two biggest gun issues of the last year. Bad lapdog! Bad! Bad!

AHSA is a voice for those of us who are not anti-gun and not in lockstep with NRA absolutism and current Republican politics.

Fitz1980

05-25-2009, 11:18 AM

AHSA only endorses Democrat candidates. It endorsed Obama for President.

AHSA is an anti gun front organisation for Democrat politicians, and is designed to funnel away support from real pro gun rights politicians.

You could could make the same argument about the NRA being a Republican front. They spent $15 million on an anti-Obama campaign that was full of lies.

http://www.factcheck.org/elections-2008/nra_targets_obama.html

Skinview

05-25-2009, 05:52 PM

You could could make the same argument about the NRA being a Republican front. They spent $15 million on an anti-Obama campaign that was full of lies.

http://www.factcheck.org/elections-2008/nra_targets_obama.html

The anti-Obama campaign was largely correct. Obama is clearly anti gun, but shrewd enough to pay lip service to the Second Amendment. He favors a whole menu of legislation that violates the right to keep and bear arms. Unlike most senators, he declined to sign a letter supporting an individual rights ruling in the Heller case. Of course after his side lost, he then claimed that he agreed with the ruling. Pretty slick.

And yes, most of the candidates that the NRA supports are Republicans, but that is because the Republican Party is the one that defends gun rights the most consistantly. The NRA also endorses Democrats when they support gun rights. John Murtha was my Rep when I lived in Pennsylvania, the NRA supported him, and he is a Democrat. Interestingly, Gun Owners of America supported his opponant, Republican Choby, because Choby was more pro gun rights. I am sure the NRA supported the incumbant Democrat because it figured it would have a better chance of buying off the incumbant than defeating an incumbant.

Fitz1980

05-25-2009, 08:27 PM

The anti-Obama campaign was largely correct.

You didn't read my link did you?

Skinview

05-25-2009, 08:39 PM

AHSA does not oppose "common sense" gun regulation, but it does oppose banning and extreme restrictionsAHSA wants to ban production of 50 cal BMG rifles and subject them to the same extreme restrictions that are on machine guns.

- which is why AHSA opposed the Washington DC gun ban and submitted an amicus brief (http://www.huntersandshooters.org/node/1375) in support of HellerThey did not oppose the DC gun ban as a violation of the Second Amendment. They said in their brief that:

"The argument advanced by [AHSA] would in no way prevent the D.C. Council from enacting reasonable regulations relating to possession, safety, and registration of firearms in the District. Indeed, it has a responsibility to the public to do so. [AHSA believes] that the District’s Gun Law was a laudable effort."

AHSA wanted the court to rule that the DC ban was invalid because DC was not a state and didn't have authorization to make such a ban under Federal Law. If the court had agreed with this, it would have left any state handgun ban unaffected. Very clever. They get to sound like they support the Second Amendment, and pull its teeth at the same time. And later tweeking of Federal Law would allow a reinstatement of the "laudable" DC gun ban.

and currently opposes the resumption of the assault weapons ban (http://www.huntersandshooters.org/node/1480).So do a whole bunch of anti gun Democrat politicians. They got so badly burned in the 1994 elections after the last time they banned the rifles that they won't try that again for a while. But AHSA wants to put draconian regulations on 50 cal BMG rifles, which is more of the same nonsense.

Here is the real story on AHSA:
http://www.nraila.org/issues/factsheets/read.aspx?id=232

Skinview

05-25-2009, 09:29 PM

You didn't read my link did you?On the contrary, I read most of it very carefully. I mostly knew what was behind the NRA's assertions and their reasoning already. Much of what Factcheck calls "False" and "unsubstantiated", isn't. Factcheck seems to place more weight on the claimed intent of Obama's favored legislation than the actual effect. We on the receiving and of anti gun legislation know how an anti gun administration can twist a law to become much more sweeping than its intended purpose. Or how even a straitforward reading of the law would have unintended consequences. One of the "false" NRA claims that Obama favors banning most hunting ammunition is true. The proposed law as written would ban any amunition that can be fired from a handgun that can penetrait a bullet resistent vest. Well, there are a bunch of handguns that fire the most common ammo made for deer hunting rifles. That ammo goes through those vests like tissue paper. So its "false" that Obama wants to ban hunting ammo, but if Obama got the laws he wants, that is exactly what would happen. The NRA actually wrote the current legislation that outlaws steel core armor piercing handgun ammo. The NRA knows guns, and they are reasonable. But you can't ban all ammo that will go through bullet resistant vests without banning hunting ammo.

The problem is that these "common sense" "resonable" laws are written by anti gun people who don't know squat about guns. One anti gun Congresswoman introduced, not too long ago, a bill to ban "assault weapons". It banned, among other things, guns with "barrel shrouds". I saw a hysterical interview in which the Congresswoman was asked to tell the viewers what a "barrel shroud" is. She danced and danced and then finally admitted that she didn't know what a "barrel shroud" was. It was her bill!

But back to the NRA and Obama. Factcheck admitted that many of the NRA claims were just simply true. Obama wants all sorts of bans and restrictions and he is very anti gun. He says he supports the Second Amendment, which is BS, and he says he not going to take away our hunting rifles, which is just to divert attention from all of the guns he wants to ban. Factcheck got sucked into Obama's spin, and they are too dizzy to realize it.

Naturist Mark

05-25-2009, 09:47 PM

They did not oppose the DC gun ban as a violation of the Second Amendment. They said in their brief that:

"The argument advanced by [AHSA] would in no way prevent the D.C. Council from enacting reasonable regulations relating to possession, safety, and registration of firearms in the District. Indeed, it has a responsibility to the public to do so. [AHSA believes] that the District’s Gun Law was a laudable effort."

AHSA wanted the court to rule that the DC ban was invalid because DC was not a state and didn't have authorization to make such a ban under Federal Law. If the court had agreed with this, it would have left any state handgun ban unaffected. Very clever. They get to sound like they support the Second Amendment, and pull its teeth at the same time. And later tweeking of Federal Law would allow a reinstatement of the "laudable" DC gun ban.

No, AHSA opposed the gun ban, but supports reasonable regulations. Exactly the position affirmed by the majority of the Supreme Court, even citing AHSA's brief in their deliberations.

The problem here is the NRA absolutist position that any gun regulations are the same as a ban. The very same leap that Skinview used in his quote above.

As for the link ... does anyone really think the NRA is the best source for an honest assessment of AHSA? That's like asking Dick Cheney to explain why torture is bad.

Skinview

05-25-2009, 10:32 PM

No, AHSA opposed the gun ban, but supports reasonable regulations. Exactly the position affirmed by the majority of the Supreme Court, even citing AHSA's brief in their deliberations.No, they liked the ban, but they argued that it was invalid for technical reasons. And I quoted their brief, which called the DC gun ban "a laudable effort".

The problem here is the NRA absolutist position that any gun regulations are the same as a ban.No, the NRA supports some gun regulations. The problem is that that the anti gun people don't think the Second Amendment prohibits anything.

As for the link ... does anyone really think the NRA is the best source for an honest assessment of AHSA?

Does anyone think that the AHSA is the best source for an honest assessment of the NRA?

Naturist Mark

05-26-2009, 06:01 AM

No, they liked the ban, but they argued that it was invalid for technical reasons. And I quoted their brief, which called the DC gun ban "a laudable effort".You missed the context. The effort was to address issues relating to possession, safety, and registration of firearms in the District. - that was laudable, but the execution - including the ban - was faulty. Which is why AHSA opposed the ban but lauded the DC council for making the effort to address those 'laudable' issues.

Does anyone think that the AHSA is the best source for an honest assessment of the NRA?I'm not using AHSA sources to defame the NRA. Every bit of AHSA defamation has come directly from NRA press releases.

Skinview

05-26-2009, 06:22 AM

As for the link ... does anyone really think the NRA is the best source for an honest assessment of AHSA?
And here is what Gun Owners of America has to say about AHSA:

http://gunowners.org/op0624.htm

jon71

05-26-2009, 01:04 PM

And here is what Gun Owners of America has to say about AHSA:

http://gunowners.org/op0624.htm

You've already admitted that gun owners of America is even further out there than the N.R.A. Why would anybody take what they have to say seriously?

Skinview

05-26-2009, 01:08 PM

You've already admitted that gun owners of America is even further out there than the N.R.A. Why would anybody take what they have to say seriously?They aren't farther out there. They are more principled. And its confirmation that its not something the NRA cooked up on its own.

gmoney

07-14-2009, 02:51 PM

BinCo

07-14-2009, 05:31 PM

Putting aside gun laws for a minute, what would you say about a nation that went to war immediately when over 3,000 were killed with the World Trade center attacks (not trying to minimize this event at all) BUT seems to passively accept that over 10 times this number are victims of homocide each and every year in this nation. Where is the national outcry and response to such an enormous homocide number?

Worse is how we passively accept it when someone believes that 100% of the gun deaths in the US are homocides when in fact over 50% are determined to be intentional suicides by the coroners who report to the CDC from all over the US.

And if we just dropped the speed limit to 5mph we could save over 47,000 lives and almost 2.3 million hospital required injuries a year from automobile accidents. Where is the outrage!!

And if we eliminated ALL fast food and high sugar foods from the US diet we could save hundreds of thousands of lives a year. Where is the outrage!!

Why aren't American Armed Forces occupying American cities in order to keep the peace?

Why not have the national forces go door to door and collect those guns before they jump up and murder someone!! It will make those of us who won't tolerate a Police state that you want have to sacrifice ourselves in a hail of gunfire to protect the freedoms that the nation was built on, not just the freedoms that YOU will permit us to have. Of course, some of the goons you send to collect my guns are coming along with me.

BTW: Hunting is the most effective means of wildlife population control in the US today. I suggest to speak to your state dept of wildlife about who contributes more to wildlife support, the anti-hunting goons or the fishermen and hunters. I think you might be very surprised by the amount of money we spend that you vegans do not.