'Earthshaking' Ways to Fix US Debt

[Nemesis 1]

The easiest way to fix the budget is just to say "starting Jan 1st 2012, social security and medicare/medicaid are canceled". Let the states run what ever programs they want to help their poor. But because the states can't print money infinitely, they have to do so efficiently and sustainably if at all.

Na it be better to say all government retirement plans are canceled LOL . But they will be if your plan was pushed threw as all governmeny employees would be forceablely removed.

 

[gevorg]

Auction off one big hawaii island for $20 trillion + 100 year non-militarization agreement.

The tables will turn with China.

 

[ebaycj]

No mention of increasing the tax base....you know, those 47% who pay NOTHING.

If you are so jealous of them, feel free to reduce your income to a level where you pay NOTHING.

 

[Hayabusa Rider]

There is no such thing as a tax increase that would not be spent for political gain. If a trillion dollars came in, the government would spend 110% of it, then talk about reducing the deficit.

 

[lothar]

The US debt isn't a credit card bill.

You can consider it one since the debt is in trillions.
Interest payments alone on the debt is in the hundreds of billions.

That doesn't alarm you enough?

 

[cliftonite]

I'm not. So since he promised to not raise my taxes, doesn't that mean that they can only make cuts? What cuts should they make? I say scrap social security since its unconstitutional to begin with and leave it up to the states. Let current reitrees draw from it until they die and send people a check for what they have paid into it so far.

Hows that for a cut to fix the deficit?

Did the supreme court not rule that SS was constitutional?

 

[nick1985]

Did the supreme court not rule that SS was constitutional?

http://www.ssa.gov/history/court.html

Heavily disputed. Check out the dissent.

 

[cliftonite]

http://www.ssa.gov/history/court.html

Heavily disputed. Check out the dissent.

Yet constitutional....

 

[nick1985]

Yet constitutional....

If you want to see the world as black and white, then yes its Constitutional. However there is more to it than that. A split vote with a strong dissenting opinion gives credence to the argument that its not. .. Especially when you read the article where it talks about how FDR was fucking with the court with legislation to remove judges over 70 to try to ram his beliefs through.

I count 18 enumerated powers of Congress in Article 1 Section 8. I dont see anything that can even be remotely contrued as social security. It should be a state's decision.

 

[cliftonite]

If you want to see the world as black and white, then yes its Constitutional. However there is more to it than that. A split vote with a strong dissenting opinion gives credence to the argument that its not. .. Especially when you read the article where it talks about how FDR was fucking with the court with legislation to remove judges over 70 to try to ram his beliefs through.

I count 18 enumerated powers of Congress in Article 1 Section 8. I dont see anything that can even be remotely contrued as social security. It should be a state's decision.

Glad we agree it is constitutional then.

 

[nick1985]

Glad we agree it is constitutional then.

Its too bad you cant have a healthy debate about the topic.

 

[theevilsharpie]

That doesn't alarm you enough?

Not really. As long as we can continue making interest payments, the quantity of debt doesn't really matter that much. Unlike a credit card, the US's "credit" isn't going to be canceled.

 

[nick1985]

Not really. As long as we can continue making interest payments, the quantity of debt doesn't really matter that much. Unlike a credit card, the US's "credit" isn't going to be canceled.

Estimates say in 5-10 years our interest payments alone will be more than what we spend on defense. Also, some estimates say by 2015 our international credit rating will drop. Do you know what effects that has?

 

[xj0hnx]

Unlike a credit card, the US's "credit" isn't going to be canceled.

Well, like a credit card, maybe it should be.

 

[piasabird]

Well how will the Interest be affected if the USA Federal Credit Rating falls from AAA TO AA rating? From what I understand is that the interest rate will increase for the debt. So how much will it increase?

Often the 2nd mortgage on a jumbo loan is personal debt.

 

[piasabird]

Well we could go to just putting people to sleep if they live long enough to draw social security. Just humanely put people out of their misery and take their money and give it to the survivors. Pass on your wealth and say goodbye.

No need for medicaide and no need for ssn.

 

[heyheybooboo]

http://useconomy.about.com/gi/o.htm...surydirect.gov/govt/reports/ir/ir_expense.htm

As I stated in my previous post my original number was off due to including states as well, currently we are on track to spend 250ish billion in interest payments this year which correlates with the $140B so far in FY 2010 but as I keep pointing out, we are currently enjoying historically low interest rates.

How long do you think the bond market is going to loan us that kind of money at near zero return and due to the avg maturity of our bonds being around 4 years any increase in interest will almost immediately increase our budget deficit. Do you think that it is plausible that we might see a 2% increase within the next few years? What will that do to interest payments?

I think you are confusing 'net interest' with 'gross interest'.

And once again, you are not even bothering to look at the chart of economic assumptions:

Budget estimations include Treasury rates in their projections. You are bloviating for nothing.

Of the anticipated Federal Debt over the next ten years, more than 30% will be simply interest that we pay ourselves on monies 'borrowed' from the trust funds. There is nothing we can do about it. If we balance the budget today and pay off all the existing public debt, we are still obligated to pay this interest to the trust funds.

'Net interest' is the cash paid to holders of the public debt, not interest paid on intergovernmental debt. And yes, the net interest expense will rise substantially in the next 4 years because of our recent borrowing binge over the last 3 years.

The current 'plan' to address this over the next ten years: As the expense of net interest increases, reduce the level of discretionary spending by a proportionate amount.

It actually works quite well except in the 'out-years' (2015-2020). Discretionary spending can be reduced from around 10% of GDP today to around 6.3% of GDP (a good 'historical average') in 2020.

In the 'out-years' of 2015-2020 there is an ugly convergence of Debt, Wars & Tax Cuts which is exacerbated by inflation and population growth.

Otherwise, as a percentage of overall Discretionary spending and GDP, the net interest expense is not exceptional when you look at the Raygun, Bush41 and early Clinton years.




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[Darwin333]

Not really. As long as we can continue making interest payments, the quantity of debt doesn't really matter that much. Unlike a credit card, the US's "credit" isn't going to be canceled.

Perhaps, but it will get much more "expensive" as the bond market raises our interest rates. Its not a matter of if either, just a matter of when.

Unless of course you wish to argue that there are just tons of entities with literally 10's of trillions of excess capital that they are willing to continue lending to us at near zero return.

 

[theevilsharpie]

Unless of course you wish to argue that there are just tons of entities with literally 10's of trillions of excess capital that they are willing to continue lending to us at near zero return.

At this point in time, yes.

 

[rchiu]

Heh all these discussion on how to fix US Debt but nobody touches the core of the problem.

It's the politicians. It's the people who decide the spending/tax policy and their incentives. Their incentives is 100% aligned with bigger spending, less tax and therefore bigger deficits. Unless you fix the fundamental way you reward your politicians, they will always make policies that will increase deficits. Stop the war? They will find ways to start another one. Raise tax? They will find ways to repel it. Cut some spending? They will find ways to increase it when you are not looking.

How do you fix a companies problem? you tie the performance of the execs to their pays. But in this country, it's the politicians that cut taxes gets elected. It's the politicians that give programs and money to special interest groups that gets elected. It's the politicians that give big contracts to big companies who gets the donations and gets elected.

Not fixing those problem, you will never fix the deficit problems.

 

[ebaycj]

Modest reduction in Social Security benefits and a small increase in the eligibility age. That alone could save huge amounts of money.

No more wars in Iraq.

This.

10% reduction across the board in SS payouts (including current people being paid out), raise eligibility age to 69 starting right now for everyone who is not currently recieving payments.

Provide a 2 year stipend to fill in for people who are eligible but not recieving payments, should they decide to take payments before turning 69.