Originally posted by: bamacre
Originally posted by: Evan
Originally posted by: bamacre
Originally posted by: Evan
Originally posted by: smashp
Total Obligations By the FED is 50 trillion if you include all the liabilities such as SS and medicare.
And the government will have taken in more tax revenue than that by the time they actually have to pay SS and medicare. It's not hard to pay for either one even if you don't raise taxes, since moderate spending reductions and increases in population more than pay for those entitlements (though I do hate that they were put in place).
Also, ideally, we'd be consistently in debt as long as it was manageable. A debt of zero makes no sense if you understand TVM and debt financing. Would be sanely stupid in the extreme to bring the debt down to zero.
The GAO disagrees with your assessment.
http://www.gao.gov/new.items/d08783r.pdf
No they don't, and you couldn't point out otherwise if your life depended on it.
:roll:
Chart (that's the good "if" chart btw)
I will assume you can read the chart.
Now, mind you, this was done in April 2008, and our debt has risen a wee bit since then, but for all intents and purposes, let's ignore that.
Taking a look at the year 2040 projections, if the white area, aka "all other spending" were just pork spending, useless stuff we could cut, or as you put it, "moderate spending reductions," then you would be correct. Unfortunately for you, and all of us, "other spending" accounts for many many other things. Things like, you know, national defense.
In comparison, let's look at 2008. The white area, which we know by now, is not filled solely by pork spending, consumes half of the entire budget. And yet in 2040, it is projected to be only about a third of the budget.
Now, for 2008, look at the small area between the top of the budget and revenue. Pretty small, maybe 2% difference. Quite a different story in 2030, and much worse in 2040.
We'll just hope this one isn't closer to the truth.
Read the report carefully. The GAO outlines several assumptions, including but not limited to:
1) Rising immigration, which they admit had to be positively adjusted upward to reflect more legal residents paying taxes. There is no reason to believe this cannot be adjusted upwards in the future, especially since the BLS predicts a larger share of Hispanics than Whites by 2050.
2) Medicare and Medicaid spending; GAO projects modest cost reductions only because they cannot know for certain what new healthcare system we will have in place years from now. Americans and politicians know the current health system is broke and it's one of the biggest reasons libs have gained ground in recent years. For example, many projections see a universal healthcare plan reducing total healthcare spending per person by 25%. This is a massive game changer that alters face of the GAO's projections. Another game changer is my 3rd point...
3) The GAO specifically states that they assume revenue (i.e. public funding) as a percent of GDP remains at 20.3% after 2018, because the CBO projects that percentage for the 2008-2018 timeframe. This is grand assumption, as most people know by now that some form of tax increases will be instituted by the next few presidents, particularly on the rich and especially if a Dem is POTUS. In fact, the GAO says they assume Bush's tax cuts expire but say nothing about the fact that tax loopholes drastically lowers the effective tax rates the rich pay, meaning richer people have far more options available to them to get out of taxes than middle class, to the point where guys like Warren Buffet had an effective tax rate
lower than his secretary being paid $60K a year. That's billions in lost revenue from one person.
Also, this is to say nothing of the fact that our current economic growth rates will almost assuredly improve, helping to fill government coffers higher than the projected pattern. Additionally, no mention is made of reductions in war spending, such as Iraq, which will cost over $1T by itself, minimum. War spending (and Iraq specifically) aren't even mentioned in the GAO report, and while that?s a big omission it is one that has some precedent given our history with wars. That's the sole reason the GAO uses these spending projections without mentioning that the country may sour on future foreign incursions.
The combinations of all these factors, even if you ignore absolute (but not effective) tax increases certainly means this problem can be tackled. And nowhere does the GAO say it can not be tackled, only that patterns have to change, particularly recent (Bush admin) patters. That isn?t a news flash to anyone, as both Democrats and Republicans have shown disgust for recent spending patterns.
It is odd though, that you don't think this is a problem. Yet, former head of the GAO, thinks the problem is so drastic, that he quit his job to
tour the country, and appear on
TV, warning people of the coming problem.
Nowhere do I state this isn't a problem. Of course, at the same time, nowhere does Walker state this problem is insurmountable. He also uses a little bit of hyperbole (which he admits) to get his point across, but no one is under the impression this will be a walk in the part. But the solutions are there, they're obvious, and they can be quite easily implemented if the right people are in office. If we have another Bush presidency, things could get ugly though. And certainly, Paulbots get nowhere by exaggerating the reality, words, and opinions of those even tangentially aligned with their belief system, and is precisely why they're still well less than 5% of the population.