U.S. Debt discussion

[afc wimbledon]

Ironic to think that Osama has done exactly what he set out to do with 9/11, brought the US to its knees financially, 4 trillion so far on the war on terror and nothing to show for it other than a dead Osama.

[CaptainCrunch]

Originally Posted by afc wimbledon

The US aught to be able to reduce their military down to half of its current level, it is useless in an asymetric 'war on terror' and other than the chinese has no other appreciable enemy in sight.

Won't happen though, the US military is like owning a gun, mostly an unused expensive waste of time and money and a more of a threat than a salvation, but try and tell the average yank that.

While I agree with it, the if you were to cut 300 billion plus from the military budget you would probably see a sharp spike in unemployment as it would effect the development of systems, it would crush civilian logistical supply to military bases as they close, plus any other revenue generated by the civilian side supporting the military, and because of that you would probably lose a big chunk of your income tax.

The smart move for the U.S. military would be to after the end of Afghanistan to refuse aid to countries like Pakistan and Turkey, refuse to participate in peace keeping and intervention and only use their military for humanitarian support in the U.S. and not internationally.

The U.S. still has a TO+E that is required to participate in two land wars and at least two peace keeping missions simultaneously.

Super Powers and mid powers also can't focus their military abilities, they have to do all things equally well, that means being able to fight a major power, being able to secure within a minor power and to be able to fight asymmetrical wars equally well.

Plus if you focus on asymmetrical warfare, then you can guarantee that the next situation will be based around an entirely different style of warfare and all of your work specializing will have been rendered useless.

Plus if you look at it the U.S. has done a great deal to change their mission capabilities, they've changed the way that they train their ground forces, they have increased their reconnaissance and military capabilities, and they basically dumped things like their Seawolf class submarines in favor of the Virginia class which is not only cheaper but better able to operate in brown water operations. They've also converted some of their ballistic missile class submarines into special forces boats.

They killed their F-22 raper project in favor of attempted to build cheaper more well rounded fighter bomber platforms.

They've increased their amphibious fleet at the expense of their blue water navy as well.

I'm not sitting here and saying that the U.S. military is an efficient spender, because its not really, but its the one thing that all Americans believe to be essential.

[CaptainCrunch]

Originally Posted by afc wimbledon

Ironic to think that Osama has done exactly what he set out to do with 9/11, brought the US to its knees financially, 4 trillion so far on the war on terror and nothing to show for it other than a dead Osama.

I believe that Bin Laden was a failure as a military commander but a bit of a visionary in terms of strategy. He predicted that he could severely hurt the American's economically by drawing them into the middle east and bleeding them.

In terms of that he accomplished his mission.

In terms of the cost to Bin Laden beyond his death. He actually saw his senior leadership ravaged, Al Qaeda reduced to a near non entity in terms of global operations. He saw his idea of a ideal Muslim Government in Afghanistan knocked over, he saw another in Iraq (not really Muslim) destroyed, he lost his funding, saw family members killed.

While Al Qaeda was on the rise prior to 9/11 its pretty much shattered now, and we haven't seen the rise of another organization to take its place.

The key next target is really the Taliban in Pakistan, the Canadians did a great job of reducing the Taliban to a shadow of itself in at least its area of Afghanistan, and the Taliban made the massive mistake of messing around too hard in Pakistan and took a beating from the Pakistan military.

We are now seeing the rise of the fanatical individual or berzerker instead of the organized and well funded terrorist groups.

[afc wimbledon]

Originally Posted by CaptainCrunch

While I agree with it, the if you were to cut 300 billion plus from the military budget you would probably see a sharp spike in unemployment as it would effect the development of systems, it would crush civilian logistical supply to military bases as they close, plus any other revenue generated by the civilian side supporting the military, and because of that you would probably lose a big chunk of your income tax.

The smart move for the U.S. military would be to after the end of Afghanistan to refuse aid to countries like Pakistan and Turkey, refuse to participate in peace keeping and intervention and only use their military for humanitarian support in the U.S. and not internationally.

The U.S. still has a TO+E that is required to participate in two land wars and at least two peace keeping missions simultaneously.

Super Powers and mid powers also can't focus their military abilities, they have to do all things equally well, that means being able to fight a major power, being able to secure within a minor power and to be able to fight asymmetrical wars equally well.

Plus if you focus on asymmetrical warfare, then you can guarantee that the next situation will be based around an entirely different style of warfare and all of your work specializing will have been rendered useless.

Plus if you look at it the U.S. has done a great deal to change their mission capabilities, they've changed the way that they train their ground forces, they have increased their reconnaissance and military capabilities, and they basically dumped things like their Seawolf class submarines in favor of the Virginia class which is not only cheaper but better able to operate in brown water operations. They've also converted some of their ballistic missile class submarines into special forces boats.

They killed their F-22 raper project in favor of attempted to build cheaper more well rounded fighter bomber platforms.

They've increased their amphibious fleet at the expense of their blue water navy as well.

I'm not sitting here and saying that the U.S. military is an efficient spender, because its not really, but its the one thing that all Americans believe to be essential.

Two good things about cutting back on the military though, you can target the cuts to specific areas, therefore reducing the impact, it makes perfect sense to close all the bases in the pacific north west, Bremerton, Edmunds, etc, it is a high employment hi tech area and most of those jobs would be absorbed by the local hi tech industries anyway resulting in little impact on the economy.

Second you can also target them onto the more extreme tea party states, 'here you go, how do ya like a balanced budget now?, say goodbye to Fort Hood'

[CaptainCrunch]

Originally Posted by afc wimbledon

Two good things about cutting back on the military though, you can target the cuts to specific areas, therefore reducing the impact, it makes perfect sense to close all the bases in the pacific north west, Bremerton, Edmunds, etc, it is a high employment hi tech area and most of those jobs would be absorbed by the local hi tech industries anyway resulting in little impact on the economy.

Second you can also target them onto the more extreme tea party states, 'here you go, how do ya like a balanced budget now?, say goodbye to Fort Hood'

Sure, you could look at cuts on the administrative side, they could do what Canada did to cut costs when they retired in force a lot of flag level officers. I think one of the things that they could really look at cutting is on logistical delivery and consolidate their supply chain.

I've always said that the sharp end of the spear or the fighting side of the military needs to be taken care of whereas the logistical and administrative chain is often too large.

If I remember right in the Canadian Forces only about a quarter of our men and woman are in actual combat roles, the rest are involved in logistics and other areas, so for every soldier in the field fighting there's 3 or 4 people standing behind him to make sure that he's fed and kept healthy and combat supplied.

I think its even worse in the U.S. Military.

Another thing that you have to look at is the officer to nco ratio and the senior officer to military force ratio.

I hate the idea of punative base closures, we saw what happened in this city when a vindictive Jean Chretien ripped the Canadian Forces base out of this city and moved it to Edmonton to reward Anne McClellen (sp?)

It devastated that area for a long time and destroyed a lot of businesses that depended on the military trade in those areas.

[seattleflamer]

Originally Posted by Shazam

Yeah the mortgage interest deduction doesn't work like that.

My point is there shouldn't be a mortgage interest deduction at that high of a threshold since it will be for the uber rich. Esentially these super rich are being subsidized to buy a principal home.

But here is my understanding of how it works then:

Let's say you are fortunate enough to qualify to buy an upscale house for 1.2 million. You borrow 1 million and put down 200K. The interest (not the principal) part of your payment is deductible. Lets say you have 30 year fixed 5% mortgage rate (with that$1million loan). That works out to a 50K/year in interest. If you qualify for a 1 million dollar loan, then you are probably in the 35% tax bracket (the highest). So out of that 50K, you can deduct ~18K which is the amount that reduces your taxable income in that year.

Or another way to look at it is that a 5% mortgage is net after tax (assuming the highest tax bracket of 35%), a real interest rate of 3.25% with the gov't subsidizing the 1.75% of your interest rate.

A $20million mortgage at 5% will get you to the max mortgage interest deduction of ~$1 million in yearly interest with you being on the hook for only 650K and the taxpayer subsidizing the rest: $450K of free money to encourge you to buy a home.

So is this a good tax policy? People who can afford a 20 million dollar loans getting govt subsidies? This is as egregious as it gets.

[SeeBass]

Originally Posted by afc wimbledon

Two good things about cutting back on the military though, you can target the cuts to specific areas, therefore reducing the impact, it makes perfect sense to close all the bases in the pacific north west, Bremerton, Edmunds, etc, it is a high employment hi tech area and most of those jobs would be absorbed by the local hi tech industries anyway resulting in little impact on the economy.

Second you can also target them onto the more extreme tea party states, 'here you go, how do ya like a balanced budget now?, say goodbye to Fort Hood'

Now that I like

[Shazam]

Originally Posted by seattleflamer

My point is there shouldn't be a mortgage interest deduction at that high of a threshold since it will be for the uber rich. Esentially these super rich are being subsidized to buy a principal home.

But here is my understanding of how it works then:

Let's say you are fortunate enough to qualify to buy an upscale house for 1.2 million. You borrow 1 million and put down 200K. The interest (not the principal) part of your payment is deductible. Lets say you have 30 year fixed 5% mortgage rate (with that$1million loan). That works out to a 50K/year in interest. If you qualify for a 1 million dollar loan, then you are probably in the 35% tax bracket (the highest). So out of that 50K, you can deduct ~18K which is the amount that reduces your taxable income in that year.

Or another way to look at it is that a 5% mortgage is net after tax (assuming the highest tax bracket of 35%), a real interest rate of 3.25% with the gov't subsidizing the 1.75% of your interest rate.

A $20million mortgage at 5% will get you to the max mortgage interest deduction of ~$1 million in yearly interest with you being on the hook for only 650K and the taxpayer subsidizing the rest: $450K of free money to encourge you to buy a home.

So is this a good tax policy? People who can afford a 20 million dollar loans getting govt subsidies? This is as egregious as it gets.

No, that is not how it works. You can either claim the mortgage interest or the standard deduction. You can't claim both.

[seattleflamer]

You have the choice between taking the standard deduction or itemize your deductions.

The standard deduction is $11600 for 2011. I'm not a math major but if I got a 1 million dollar mortage, you'll itemize everytime.

[Mike F]

Originally Posted by CaptainCrunch

I think its a bit of both. If your spending a million dollars more then your making on your yearly deficit and the next year you manage to spend a million dollars less then in theory you should balance to a 0 deficit position.

However even I'm not foolish enough to believe that you instantly turn off the money taps of a war. Canada is going to continue to spend dollars on the Afghan war in terms of bringing equipment home, repairing, refitting and replacing worn out equipment. Dealing with veterans who are leaving the military and training their replacements and replenishing supplies and ordinance.

The hookers and blow example for me is that in a lot of ways war is like spending money on useless things in that you don't see any economic benefits to it that will cover the losses.

IIRC, the number for savings from the ending of the wars is over the next 10 years, so it's not arrived at by assuming the tap gets turned off.

I'll leave it to accountants who have actually looked at current budgeting for what the wars cost and how Reid arrived at his number to determine whether its accurate. But, in the end, there will be savings from some real reduction in actual spending, which is a far cry from choosing not to spend more on another war.

The only way the criticism of Reid's proposal would be completely accurate would be if the projected deficit already accounted for the wars ending, but you wouldn't need the Pakistan war analogy to make that point.

[Jag_Gator]

Originally Posted by mikey_the_redneck

Wow, what a gong show.

America needs direct democracy like in Switzerland......because these republican/democrat "representatives" are awful, awful people.

It looks like the middle class will bear the brunt of the austerity bill, I mean spending cuts. What a broken system....

How about making the top fortune 100 or whatever pay taxes instead of allowing them to hide revenues off shore?
How about cutting all this foreign aid?
How about ending the pointless wars in Libya, Iraq, Pakistan, Afghanistan etc.?
How about slashing the over-sized federal government?...the country can run without it.

How about they actually make the corporations like GE pay taxes? They have payed virtually no taxes in the last few years. I laugh at the fact that GE CEO Jeffery Immelt is the head of Obama's Jobs Council! During his time there, GE has shipped about 34,000 American jobs off shore since 2001. The corrupt corporatism is disgusting.

The supposed "grass-roots" tea party members have totally assimilated into the republican party and it is now obvious. Wanting to cut entitlements while mostly ignoring the Pentagon budget is totally selling out.

I see America defaulting down the road no matter what.

Amen.

[MelBridgeman]

Originally Posted by seattleflamer

And to further my point about the taxes in the US. From today's Globe and Mail: http://www.theglobeandmail.com/repor...rticle2114872/

Isn't this article ignoring why other countries have higher taxes which allow for free health care, free education ect..

[afc wimbledon]

Originally Posted by MelBridgeman

Isn't this article ignoring why other countries have higher taxes which allow for free health care, free education ect..

I think the point of the article is that whatever they use the taxes for is less relevant than the fact they can raise them to deal with the debt without becoming less competative with, say us.

[opendoor]

Originally Posted by Shazam

No, that is not how it works. You can either claim the mortgage interest or the standard deduction. You can't claim both.

That kind of backs up his point that it largely benefits the well to do. Assuming a 5% mortgage with 30 year amortization, a married couple would have to carry a mortgage of approximately $240,000 before their mortgage interest deduction goes above their standard deduction. Anything below that and they reap no benefits from mortgage interest deduction.

Conversely, a married couple who can afford a $1,000,000 mortgage would be able to deduct an additional $37,000 above their standard deduction.

[afc wimbledon]

A tax deduction that largely benefits the well to do!!!!!! unthinkable.

[AvsJerk]

Originally Posted by CaptainCrunch

...They killed their F-22 raper project in favor of attempted to build cheaper more well rounded fighter bomber platforms.

They've increased their amphibious fleet at the expense of their blue water navy as well.

I'm not sitting here and saying that the U.S. military is an efficient spender, because its not really, but its the one thing that all Americans believe to be essential.

For some reason, the public support was never there for the F-22 raper project...I still don't know why...

Captain, I always enjoy your posts...especially when they concern military or firearms issues. You know your shiat and communicate it well.

[afc wimbledon]

Originally Posted by AvsJerk

For some reason, the public support was never there for the F-22 raper project...I still don't know why...

Captain, I always enjoy your posts...especially when they concern military or firearms issues. You know your shiat and communicate it well.

Well the testing program in Okinawa didn't go as well as expected, or perhaps better, depending on your point of view I suppose

[CaptainCrunch]

Originally Posted by AvsJerk

For some reason, the public support was never there for the F-22 raper project...I still don't know why...

Captain, I always enjoy your posts...especially when they concern military or firearms issues. You know your shiat and communicate it well.

Thanks

The problem with the F 22 was two fold, first of all, the cost was originally supposed to be about $140 million per plane, however later calculations nearly doubled that estimate, so the Raptor was stopped at about 168 or about 10 complete squadrons. Second, while it does contain the ability to switch some of its missile carriages with bomb racks, its mainly a air superiority fighter, and future aircraft roles are really calling for multi-role low observable aircraft.

If I remember right, strategically its not the right time for the F-22, most of them have been deployed in Okinawa as the biggest rival right now aircraft wise is the Chinese, and the current strategy is to try to destroy as many chinese airfields as possible with cruise missile launches from submarines, which leads the way for air to ground action by the Americans, so its not expected that there will be a massive furball for air dominance in a war with China.

However China is in the midst of a massive military buildup based around power projection. There were fairly new photo's released of the Chinese J-20 stealth fighter that looks like a bigger version of the Raptor, however some think that its closer to the Russian abandoned Mig 1.42. the Chinese are also working very hard on land based anti carrier missiles that would allow them to secure the seaways between China and Tawain.

The Chinese are also frantically trying to build and deploy their own aircraft carrier, they did purchase the not completed Varaq which was part of the Admiral Kuznetsov class, Russia's attempt to complete a proper non ramped take off design based on what the American's do, they are probably using it as a design test bed, its more then likely that the Chinese will build VTOL version of the smaller carriers like the rest of the world uses but are still outclassed by the American super carriers.

The Chinese have also spent a lot of time upgrading their submarine fleet the American's literally pooped their pants about three years ago when a Chinese Song Diesel electric sub popped up in the middle of an American naval exercise within torpedo and missile range of an American carrier.

The newest operation sub is the type 093 sub which would be equivalent to an early flight 1 LA class sub, They also have 5 type 94 ballistic missile submarines that are decent but nowhere in the class of the American Ohio class, however this comes at a time when America is converting their ballistic missile submarines to other missions.

But the Chinese at one point focused on the ground element of their military thinking that they would face land based battles and defense missions, now they're working on the ability to project power into the pacific.

Anyways this is the wrong thread for military capabilities of China.

[Shazam]

Originally Posted by opendoor

That kind of backs up his point that it largely benefits the well to do. Assuming a 5% mortgage with 30 year amortization, a married couple would have to carry a mortgage of approximately $240,000 before their mortgage interest deduction goes above their standard deduction. Anything below that and they reap no benefits from mortgage interest deduction.

Conversely, a married couple who can afford a $1,000,000 mortgage would be able to deduct an additional $37,000 above their standard deduction.

Canadians can do the same thing, if they have enough money (in other words, rich people).

I'm not necessarily disagreeing, he kept asking if he got his scenario right and it wasn't quite right.

[Rockin' Flames]

Originally Posted by seattleflamer

A $20million mortgage at 5% will get you to the max mortgage interest deduction of ~$1 million in yearly interest with you being on the hook for only 650K and the taxpayer subsidizing the rest: $450K of free money to encourge you to buy a home.

Just to clarify the maximum mortgage interest deduction allowed is on a $1 Million mortgage NOT $1 Million of interest. So the $20 Million portion of you example is incorrect.

This limitation amount is only if you are married filing jointly otherwise it is $500k.