U.S. Debt discussion

[Calgaryborn]

Originally Posted by MarchHare

The recent debt ceiling increase was required to cover expenses already approved in previous budgets only, not new spending.

This you will have to show me. Congessional budgets are yearly things. They don't give a mandate for spending beyond their duration.

Originally Posted by MarchHare

I was under the impression that budget bills must come from the House, not the Senate. Is that not the case? If so, please provide a citation. Also, please cite the specific passage of the Constitution you believe the Senate to be in violation of.

The budget has to come from Congress. They both are responsible to get it done. Of course last summer the Democrats controlled both houses and didn't want to discuss finances close to an election. This spring the Republican controlled house did submit a budget:

http://online.wsj.com/article/SB1000...172357504.html

The Senate rejected that budget and offered no other. Now America has got a newly minted debt ceiling and promises of a full budget by Christmas.

[MarchHare]

Originally Posted by Calgaryborn

This you will have to show me. Congessional budgets are yearly things. They don't give a mandate for spending beyond their duration.

“Let’s be clear about what the debt limit does and doesn’t mean. Raising the debt limit when it’s absolutely necessary – and right now, it is – lets us pay the bills that have already come due,” he says. “We borrow a lot of money in this country. That’s not a new phenomenon, or unique to one party. It’s how America has done business for centuries. And borrowing a lot of money means we owe a lot of money. We cannot cut off our own ability to pay those debts.”

[...]

“Here’s what it doesn’t mean. The emergency we enter today isn’t about a penny of new spending. It’s not about new programs or new taxes. It’s not about creating new obligations, only meeting existing ones. The debt limit is about paying what we already owe,” Reid says.

http://www.thewashingtoncurrent.com/...imit-isnt.html

[MarchHare]

Here's another source, direct from the Treasury Department:

http://www.treasury.gov/initiatives/...ct%20FINAL.pdf

The debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments. The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.

Emphasis added.

[Yasa]

Anyone want to give me a hand on what the regulation talk is about? And how it will help?

Also, I was wondering about quantitative easing and if/how it will help the US markets this time around. I have a rudimentary idea of how it works, but both times they've done it in the last 2 years the S&P grew slightly but then dipped again. This time it's dipping to where it was almost 8 months ago just before the QE2. So, why do it again? It seems like they're heading towards a liquidity trap.

Again though, I'm looking for clarification.

[SeeBass]

Originally Posted by Azure

Why is that such a big deal? Separating two disks is a pretty big deal.

Fixing a herniated disk at Mayo Clinic is around $50,000 if I remember correctly. But you're in and out in 2 weeks.

So you use a $50K and two weeks example to justify that a $275K for 5 days is not such a big deal?

[afc wimbledon]

Originally Posted by Calgaryborn

You could argue that if a regulation was in place that disallowed the banks from lending so freely that the crisis wouldn't have happened but, that wasn't the cause of the crisis. Bankers without regulation aren't so incompetent as not to see a bad risk. And even if some were the majority wouldn't follow.

The problem was Fanny and Freddy were willing to insure high risk debt for a small fee which freed the banks to lend more because they didn't have to cover those risks. This created a lending frenzy because with the government backing Fanny and Freddy they couldn't lose. One day in 2008 Fanny and Freddy quit insuring high risk loans. What brought down the banks was all the bad debt still in their system which they couldn't get covered by Fanny or Freddy. Covering those high risk loans ate up their lending capital. Since then even many of their sound loans have lost them money because of the huge drop in housing prices and high unemployment.

Fanny today is back asking the government for money. They need another 5.1 billon to cover last quarter's losses. That will put the government out over 100 billion and counting just with Fanny.

The real problem is that both sides, both Dem and Repugs want their cake and to eat it too, they have both spent like drunken sailors, neither is prepared to be honest with the taxpayers about what needs to be done, the dems should be telling their supporters 'we can't afford much of these social programs and their has to be massive tax increases to deal with the debt'
while the repugs need to be telling their side, 'we cant afford these wars, the military, vast subsidies to the oil and ethonal industries etc and we need massive tax increases'.

Neither side will do this though, of the two though the repugs are most to blame though, in any western political system you have two sides, left and right, the left's job is defend social programs, to represent the poor and huddled masses, it is the rights job to be fiscally sensible and not piss money away on wars, the military and tax cuts, in the US the roles have been reversed, it is the repugs that have spent the most in the last 60 years, generally on programs that don't benefit the average american in any way really.

[afc wimbledon]

Originally Posted by Calgaryborn

You could argue that if a regulation was in place that disallowed the banks from lending so freely that the crisis wouldn't have happened but, that wasn't the cause of the crisis. Bankers without regulation aren't so incompetent as not to see a bad risk. And even if some were the majority wouldn't follow.

The problem was Fanny and Freddy were willing to insure high risk debt for a small fee which freed the banks to lend more because they didn't have to cover those risks. This created a lending frenzy because with the government backing Fanny and Freddy they couldn't lose. One day in 2008 Fanny and Freddy quit insuring high risk loans. What brought down the banks was all the bad debt still in their system which they couldn't get covered by Fanny or Freddy. Covering those high risk loans ate up their lending capital. Since then even many of their sound loans have lost them money because of the huge drop in housing prices and high unemployment.

Fanny today is back asking the government for money. They need another 5.1 billon to cover last quarter's losses. That will put the government out over 100 billion and counting just with Fanny.

The history of finance shows this to be untrue, perfectly normal sensible banks and people get caught up in bubbles and make dumb decisions regardless of the existance of Freddie and Fanny.

[afc wimbledon]

Originally Posted by Yasa

Anyone want to give me a hand on what the regulation talk is about? And how it will help?

Also, I was wondering about quantitative easing and if/how it will help the US markets this time around. I have a rudimentary idea of how it works, but both times they've done it in the last 2 years the S&P grew slightly but then dipped again. This time it's dipping to where it was almost 8 months ago just before the QE2. So, why do it again? It seems like they're heading towards a liquidity trap.

Again though, I'm looking for clarification.

If you mean the Tea Party deregulation manifesto it is based on the mythic idea that somehow the US is gods chosen country and they are divinely picked to be rich and succesfull through their reformed protestant commitment to hard work and gumption, and the fact they are in the sh***er must be due to some socialist/popish plot, they have decided that goverment is the new whore of Babylon and if only goverement closed down the US would be back on top.

The fact that most of these poor schmoes are lower middle class and would find themselves living in a new Hooverville (Palinville I suppose) down by the railway tracks if this happened is just Gods great ironic joke.

[Yasa]

Originally Posted by afc wimbledon

If you mean the Tea Party deregulation manifesto it is based on the mythic idea that somehow the US is gods chosen country and they are divinely picked to be rich and succesfull through their reformed protestant commitment to hard work and gumption, and the fact they are in the sh***er must be due to some socialist/popish plot, they have decided that goverment is the new whore of Babylon and if only goverement closed down the US would be back on top.

The fact that most of these poor schmoes are lower middle class and would find themselves living in a new Hooverville (Palinville I suppose) down by the railway tracks if this happened is just Gods great ironic joke.

Ok, so what would they be deregulating and what's the mentality behind it?

[afc wimbledon]

Originally Posted by Yasa

Ok, so what would they be deregulating and what's the mentality behind it?

They essentially want to deregulate everything on the basis that the only reason US manufacturers cant compete with China is because they arn't allowed to chain people to sewing machines and dump PCB's into the stream out back (although they never actually admit that this is the effect of deregulation) the Tea Party would like to close the EPA completely.

They really are bat#### crazy, we are living through one of the US's bat#### crazy periods, ala prohibition and McCarthyism

[MarchHare]

I've seen Tea Party supporters seriously propose eliminating the FDA because they apparently think that the all-mighty invisible hand of the free market will be sufficient to regulate the safety of the food and medicines we ingest.

[Azure]

Originally Posted by SeeBass

So you use a $50K and two weeks example to justify that a $275K for 5 days is not such a big deal?

No, I'm saying that its not crazy that a procedure like that costs 3/4 of a million bucks.

Health care isn't free.

[Azure]

Originally Posted by afc wimbledon

They essentially want to deregulate everything on the basis that the only reason US manufacturers cant compete with China is because they arn't allowed to chain people to sewing machines and dump PCB's into the stream out back (although they never actually admit that this is the effect of deregulation) the Tea Party would like to close the EPA completely.

They really are bat#### crazy, we are living through one of the US's bat#### crazy periods, ala prohibition and McCarthyism

Holy over generalization.

They want to deregulate everything? Really?

The EPA is a HUGE reason the US is a very unfavourable business climate right now. But nobody is saying put away with it completely. You just need to use some common sense with your approach.

[Tinordi]

Originally Posted by Azure

Holy over generalization.

They want to deregulate everything? Really?

The EPA is a HUGE reason the US is a very unfavourable business climate right now. But nobody is saying put away with it completely. You just need to use some common sense with your approach.

WTF are you talking about? Another quality post. The EPA is the reason the U.S. has a bad business climate? Are you kidding me?

[J pold]

[Cowperson]

Originally Posted by Calgaryborn

You could argue that if a regulation was in place that disallowed the banks from lending so freely that the crisis wouldn't have happened but, that wasn't the cause of the crisis. Bankers without regulation aren't so incompetent as not to see a bad risk. And even if some were the majority wouldn't follow.

.

Not even Alan Greenspan would agree with that anymore.

That argument is been done and buried now.

Cowperson

[Tinordi]

At least Calgaryborn demonstrates consistent epistemic closure to his belives. No amount of evidence will challenge his world view from economics to religion.

Is it wrong to say that people like him are extremely dangerous?

[4X4]

Originally Posted by afc wimbledon

The real problem is that both sides, both Dem and Repugs want their cake and to eat it too, they have both spent like drunken sailors, neither is prepared to be honest with the taxpayers about what needs to be done, the dems should be telling their supporters 'we can't afford much of these social programs and their has to be massive tax increases to deal with the debt'
while the repugs need to be telling their side, 'we cant afford these wars, the military, vast subsidies to the oil and ethonal industries etc and we need massive tax increases'.

Neither side will do this though, of the two though the repugs are most to blame though, in any western political system you have two sides, left and right, the left's job is defend social programs, to represent the poor and huddled masses, it is the rights job to be fiscally sensible and not piss money away on wars, the military and tax cuts, in the US the roles have been reversed, it is the repugs that have spent the most in the last 60 years, generally on programs that don't benefit the average american in any way really.

No, the REAL problem is that most people pick a party like they pick a sports team, and rarely/never waver. No matter how screwy a party gets, a hardcore democrat voter will still vote democrat, just as a hardcore republican will still vote "repug". Oh, and clever name there, Rick Bell.

[Azure]

Originally Posted by MarchHare

I've seen Tea Party supporters seriously propose eliminating the FDA because they apparently think that the all-mighty invisible hand of the free market will be sufficient to regulate the safety of the food and medicines we ingest.

Yes, because a federally mandated organization like the FDA is always looking out for the safety of the American people, which is why they have been constantly telling their sister organization, the Department of Agriculture, to stop subsidizing corn to make it cheaper to feed cattle with, because it has been proven many times that feeding corn to beef cattle in an effort to get them to the slaughter house faster will make them develop highly acidic GI tracts. The E. coli O157:H7 strain that is produced as a result is immune to the acids in our own stomach, and people have died horrible, painful deaths from eating contaminated beef.

As the 'FOOD, and Drug Administration', the FDA is directly responsible for making sure that the obese, Big Mac loving people in the US are never at risk of getting sick from eating their favorite, unhealthy and vile fast food burger, but its painfully obvious that they're not doing anything about it.

Go watch 'Food Inc.' and then come back and tell me that the government is looking out for our best interests safety wise. Especially with the food we eat.

Not to say that you should completely deregulate everything. In fact deregulation or regulation isn't the problem at all. The problem is that every single government department tasked to look out for the 'common citizen' has been bought and paid for by big business. From the financial regulators, most notably the SEC, who were caught watching porn when they should have been doing their job and keeping the 2008 meltdown from happening, to the CFTC who has been giving secret exemptions to major banks in the US since 1991 that nobody knew about, to the Federal Reserve System that blindly threw around billions upon billions of taxpayer money, blindly bailing out banks in the largest transfer of wealth from the taxpayer to 'Wall Street', to the FDIC with its ridiculous 'too big to fail' stance, to the Department of Agriculture and its 'relationship' with big food companies like Kraft, Dole and many others who are making damn sure they're using the Department of Agriculture to help screw over the little guy. Know how hard it is to run a family farm in the US? Not only with big food companies, but you have have companies like Monsanto, DuPoint, Cargill and others who somehow got the Supreme Court to put a patent on 'life'....so now Monsanto can sue smaller farmers who want to use heirloom seeds instead of the genetically modified ones that Monsanto produces. If you save your own seed, Monsanto will come calling and strongarm you into abiding by 'their' law....or the law that the Supreme Court and the Department of Agriculture helped create.

I could go on and on about big oil, big tech companies, pharmaceutical companies, etc, etc....and how 'regulation' by the government has allowed them to profit billions while 'common' people are left to fend with nothing.

No amount of regulation will solve this. No amount of deregulation will solve this. It is a simple issue of government having been overtaken by big business. Problem is nobody realizes it, and those that do don't have the power to fix it.

[MarchHare]

Originally Posted by J pold

Big infographic

Epic fail by whoever inserted the flags for Sweden, Netherlands, Finland, Austria, and Australia.