Category: News and Views
So yesterday, Obama had sighned the bill which had saved the government from defaulting. To put it simply, it is a bill to cut spending by 2.5 trillion dollars as well as raising the debt ceiling to allow the government to borrow more money.
This to me seems like only a short term fix for a long term problem. Do you think this is enough to up start our economy, or are we simly looking at the means to a symtom instead of the problem. If government continues to cut back on spending which would have been used for social programs aimed at the less fortunate, are we not putting the people that can really use it at a greater disadvantage? What does it matter to the rich if the programs are reduced, or completely eliminated.
If they're going to be reducing how much they spend, they shouldn't need to borrow any more money after the debt ceiling has been raised, or maybe my maths is wrong.
I think that the US government and other governments waste a lot of money. The waste needs to be completely eradicated before services are cut.
The US is supposed to be the richest country in the world, so why all the proeects aimed at poor people? This is surely a sign of financial mismanagement, or politicians thinking that the answer to social problems is more projects, which follow on from other projects.
Yes it was miss management and the costly wars that were miss managed. A billion dollars was paid out to people that were dead over the last 10 years, so go figure. I don't think the spending will hurt the porr, just cut back on excessive waste.
Judging by today's major stock market plunge, investors are not impressed. This program suffers from so many things Obama fails at doing, concreteness, a definite plan of action. Of course his hand was forced this time by the republicans, be it the tea party or others.
As I have said too many times on the board, it's probably becoming a trade mark, health care coverage in the U.S. is too expensive, both for peoploe and the government. The U.S. spends, as a proportion of GDP, considerably more money than any other country, yet health insurance is the privellege of the few, insurance companies are making fat money, drug copmanies sell drugs for much higher prices in the U.S. than elsewhere and spend more money on advertizing than on research and development. Doctors do a lot more tests than they have to, for fear of being sued. One doctor said in the New York Times that she spent less than 15% of her time examining patients, rest filling in forms for one of the 1500 insurance plans in the U.S.
This is hugely ineffective and leads people to avoid doctor's visits that can be an early prevention of a problem that is only discovered when it has reached E.R. proportions and requires expensive treatments.
Lifestyle is one of the problems. The free market was given the freedom they craved and some sort of gentleman's promise that they'd be responsible. The outcome, millions of Americans bought houses they could never afford, and then moved out of them and defaulted when the housing prices collapsed, leaving the banks and, ultimately, tax payers to pick up the pieces. There is one mistake. Bankers, mortgage retailers, and everyone else, know they can pick up the bonuses and walk away, and the tax payers wil take the fall for irresponsible practices, so there is no downside to them taking downright stupid risks. We must pay this excess up, somehow, be it directly as house owners or through taxes, since the government sures up the banks.
The military is way too big and has had practically unlimited money supply towards better engines, planes, guns, not to mention wars, billions of dollars in waste or overpaid to private contractors associated with politicians (Chaney and Halliburton anyone?).
And people can't expect more services and less taxes. This is the root of the problem.
If you are 67 and a millionaire, you should not get same pension rights as if you were super poor and 67, these rights need to be based on your wealth and income.
Some of the top 500 companies in the S&P index paid less than 10% in effective tax rates, by using loop holes and overseas tax breaks. In the state of North Carolina companies got millions of dollars in tax incentives for creating jobs, while they were actually laying off workers.
All of this points to the same thing, people need to face up, make difficult decissions and put their money where their mouths are. If they are rich and proud to be Americans, then they have to give back to the country that enriched them, be it through higher tax rates or some other means.
Improving education and accessibility, I believe, will hugelyincrease employment, and decrease social secuity payments, for people with disabilities.
Information about drug prescription needs to be somehow centralized, or doctors and hospitals given access to patient medical history and drug prescriptions, to eraticate prescription drug abuse.
I think soda should be taxed at 2 cents an ounce and 50 cent tax put on French friens and fast food, to help offset the tremeous cost of ehalthcare required for obese people (I am a fan of both, but I think this is responsible).
Either way, until a credible plan has come up to get the U.S. out of this situation (and itis still very much doable, this is not as serious as the media will have people believe), investors will be nervous, the Chinese could pull all their money out of the U.S., causing a crash whose consequences will be drastic.
yes, for a more thorough understanding of the actions of the drug companies and how the medical professionals are working for them, check out the documentary big farma.
Isn't it amazing the idea of free markets and how promising it looks on paperwhen in reality, it is sucking down the economy.
I guess the only up side to all these people losing their homes is that cost of housing is going down since the banks have all these properties and wanting to get rid of them.
And now S&P has downgraded the U.S. government bonds to second highest grade, but with negative outlooks.
Many banks and companies have certain rules about what proportion of their investment portfoio they are allowed to hold in which rating category.
Therefore, these rules could, in theory, force them to sell of part of their U.S. government bonds.
With an excess of bonds flooding the market it means that the purchase price will be lower, which will up the effective yield/interest rate on the bond itself, and increase the cost of borrowing to the U.S. government.
If we think about it, we, as U.S. government, issue a bond for $100 today and say we'll pay back $105 in a year.
Up till now people have bought that bond for $100, so we get $100 in our pocket.
Now people don't trust us as much and are only willing to give us 97 dollars today, and we give them 105 at the end of the year.
So if we absolutely need $100 today we need to pay people back $107 or $108 in a year.
Therefore the price reduction on the aftermarket for bonds will push up the yield/interest rate on U.S. bond, due to the perceived investment risk associated with it.
This could also easily bleed into the stock market as general investor confidence is shaken.
It is unlikely, in the short term, because only one out of 3 main rating agencies downgraded, and it seems that most central banks either do not have, or can circumvent, the regulations for their bond portfolio security. But the U.S. is also uncomfortably reminded that China is one of its biggest land lords now, holding at least 1.2 trillion of U.S. debt, and with significant power over the U.S. economy.
I think the downgrade is much deserved, and the opinion poll that showed 14% of Americans are satisfied with their senators and house representatives, I'd say it's higher than they deserve.
Strange days indeed, but I think all the U.S. politicians should be fired and the presidency should become a qualified position that people can apply and interview for, and hired based on credentials.
Interesting concept about the position of the President as a position for which one would have to interview for on the bases of credentials. I am curious though, in your opinion, who do you believe should conduct the interviews? I have never heard of this before, and do not know of any countries who select their leaders based on a professional interview.
so I take it that we have lost our tripple A credit rating
Unfortunately, I don't thinkany country treats the position of president as a professional position.
One could imagine a committee of both parties conducting interviews (3 from the majority party, two from the minority). Since the candiate would be, at least somewhat, apolitical, or not necessarily affiliated with one party, this might present less party politics. But, in either case, it is a huge disfunctional aspect of the government that the president has considerable powers but the opposite party, at the same time, can have majority in both the house and the senate, this produces the kind of political wralngling and deadlock we have been witnessing, and that has lost the U.S. its trile A credit rating from S&P.
I, personally, believe a big part of the problem is that such huge percentage of the nation's wealth is in suc few hands. I've heard up to 50% owned by the top 1% of the nation's earners. To them an extra dollar, or million dollars, won't be an incentive to spend more, since the additional dollar is meaningless. With such amount of money they can also hire lawyers and accountants to hide the money from taxation.
This hurts society as a hole, and hurts it badly, it ties the hands of the government when it comes to spending as the majority of the nation barely has enough to pay down existing debt, the stockpile of money sits with people who won't be affected much by interest rate changes or changes in fiscal policy, making the tools of the government much less effective.
This will have to be addressed at some point.
Call this socialist thinking, but socialist countries are not doinso badly.
The 5 highest rated countries in the world, with regard to sovereign debt are Denmark, Norway, Sweden, Finland and Australia (I believe Canada is up there too). All of these countries have universal cheap healthcare, cheap education, social structure with higher taxes and decent standard of living.
You may not be able to get super ueber rich there, but my sincere personal belief is that there is no justification for people owning the unimaginable amounts of money owned by the elite few and that it is part of the role of government to prevent that. The free market can't be trusted, as the smart and greedy will take the money for themselves. We've seen countless examples of this.
I'm not rich, even less so after today, but one thing you have to remember is that many of the rich here set up charitable foundations to give to the less fortunate. There are exceptions, of course, but many rich people have actually worked to gain their wealth, so to say that they can't keep it is wrong.
Also, have you noticed that China is blasting us for our overspending on the military and entitlement programs? Those communist Chinese??? Well, I guess that's communist only in name these days, but they have problems of their own and if they want us to improve they should start improving themselves and stop sending us all of their crappy products and knockoffs.
there are several falacies in what you just said,
1. the rich only give to cherrody to improve theri image. Look at all the stuff people like celebs, and CEOs are doing, all of it is for image and ntohing more. Afterall, if you had taht kind of money, wouldn't you like the idea of your name being associated with a organization such as the united way?
2. Countries like China may be inneffective to us, but I think it is a bit of a contradiction to say they should look at themselves first before blasting us since we oe china over 2 trillion dollars.
Obviously what is happening in China works for them and for the rest of the world since they have the largest growing economy. Europe is clambering to get more chinese to conduct business in europe and why do you suppose that is?
I think if you have any working knowledge of international economics, you should be able to answer that question
WB I appreciate your position on the Presidency.
I recently had a discussion with my daughter, who will be of voting age in a couple of years, young and idealistic now. And I told her the same thing you just said: Look at politicians the way you look at someone you're trying to hire. Then, debates won't matter, how they look won't matter, how many kids they won't matter. It's the qualifications. And, as to the job description, one need only begin by reviewing the relevant parts of the Constitution. The right-wing wing-nuts do not have a monopoly on that document, albeit they only quote minor portions of it.
I agree about China also: The Asian nations are clearly booming now, they have all centralized their health care. On a business trip a couple years ago, a manager for an international company told me straight out what many of us have already known: one thing they look for when outsourcing their labor force is a decent health care system. The American system, as many of us already know, is very hard on employers as well as employees. This is especially true for the midsized and smaller companies - 3 to 500 employees or less. These companies do not have this burden in the Asian countries, no matter what they tell you on Fox News.
Your fallacy is that the rich only give to charity to improve their image. Really? Do Bill Gates, Warren Buffet, Steve Jobst, Tom Cruz (okay, maybe you have a point here), Derek Jeter, etc., etc., etc., really need their images polished? I'm sure they get a huge tax write-off for their charitable work, but it's because these people can raise so much from their name-recognition that money flows into many different charities. Why do you have such a bone to pick with the super-wealthy? This is capitalism at work and, at least up to now, it's worked.
Personally, if I were super-wealthy, I wouldn't give a shit what people thought and I'd still contribute as an individual. Yes, maybe I'd start my own charitable foundation, but it would be for altruistic and, yes, possibly tax considerations, not to burnish my image among the embittered people who are jealous because I have more than they do.
I made my China remark with my tongue halfway implanted in my cheek. Sorry if it didn't come out the way I wanted, but I can understand the misunderstanding. Yes, the USA has a lot to answer for in terms of the way we handle our money and it starts from the top. I haven't checked your profile, but do you remember a time when personal credit was a reward, not a right? Somehow it was turned into a right when the credit card companies found that they could make money off of suckers who couldn't manage their debt and now a lot of people feel that it's their right to have relief from their personal debt that they brought on themselves. The way the politicians run this country doesn't exactly absolve anybody because they can raise their own credit limit and then make excuses as to why this needs to be done or why they need more money when they increase taxes. I wouldn't exactly ditch government bonds, though, because unlike you or I, they can increase revenue at will. The problem with increased taxes is that it eventually trickles down to the people who can afford them the least, and when government programs get cut it's usually the poor that suffer because the middle and upper class don't need government entitlements.
well you just nailed on the head, why do the rich donate, for tax ride offs. How is this even remotely a characteristic of their personality or how does that make them more true to their calling?
Also, you said that but it's because these people can raise so much from their name-recognition that money flows into many different charities. Why do you have such a bone to pick with the super-wealthy? This is capitalism at work and, at least up to now, it's worked.
Really, how has it exactly worked. We still have huge amounts of child malnoutrition, the crisis in east Africa etc. And don't forget capitalism at it's best. Yes, and is it because it is at it's best that we are in such a economic crisis right now? Based on your innaccurate depiction of capitalism and the nature of donating, I don't think you have a clear grasp on what is going on in the world right now or that your either somehow oblivious.
I don't understand why you blame charities for what's been happening in Africa for decades. Is it the charities fault that Africans are engaged in civil wars throughout their continent or that they're starving? People are aware of this and donate money for those causes, every few years there's some huge rock concert that raises millions for them, but where does it go? It goes to the corrupt governments that are in place in African nations. Is that the charities fault? I hardly think so. So what do we do about the poor African population being wiped out by war and famine? We can't exactly go in and nuke them so that they can start over. If we became the socialist U.S.S.A., like Obama is trying to do, how does that cure the ills in Africa?
We can continue to pump money that we don't have into the economy in an effort to limit the effects of the recession we're once again sliding into, but keep in mind that we have little left after the first trillion or so that our president threw at the problem in a belief that he could fix it. I suppose we could always print more money so that everybody can have a little more, but that will only fuel inflation and then you'll have something else to bitch about.
And I don't see how that helps Africa.
But there is part of the problem. We gave the free market free reign, they go out and sign mortgage salesmen to distribute money and find lenders, without taking responsibility. Then the banks go to package these loans into bonds, which makes them near impossible to chase, and sell those off to investors, so they take no responsibility. On top of that the credit agencies are bribed or convinced somehow to give these AAA ratings and stamp of authority to said investors, a lot of Chinese included there.
In addition, the U.S. regulations encourage excessive spending by, for instance, limiting people's responsibility for their mortgage to the value of their property, but many of the self made recent millionaires were exactly a part of this scheme, and now they have the government to protect them from tax increases.
There was no one to oversee or regulate the market behavior, tie CEO bonuses to longterm, risk adjusted profits, or simply eliminate them .. Japan has had a long standing practice of the CEO only being able to make a multiple of the lowest sallary (albeit 50 or 100 times), which I think is actually very fair.
People can make additional money by being smart and investing the money they get in profitable projects or stocks etc, and make money on their own merit, rather than at the expense of company share holders.
I am not anti capitalism, I am pretty central, but I am discusted with the curroption and the utter lack of responsibility those who benefitted fro the excess take for the mess the rest of us are having to bail them out of, with no end in sight.
Both Obama and his predecessors are to blame, for short-sighted wars that have done nothing, either to increase U.S. scurity or improve its image .. the only successful mission, the killing of Osama, could've been done without an invation. Iraq is a mess edging towards civil war, Afghanistan is no better, after all the billions of dollars spent.
That is an entirely different sory of course and different topic.
Also, giving charity, to avoid tax, is rather ironious, and the tax code simply needs to be simpler, you can lower the rate but eliminte the unnecessary loop holes that speecial interest groups have managed to create for themselves. This should also simplify the monitorring and collection practices and reduce overhead.
Every day I hear commercials on XM radio from law companies that can get your tax reduced by 90%, bcause you should not give up your hard earnt money, but still get all the government services and have other people pay for it.
This is extremely weird and unnatural, and kind of a very sad depiction of the American citizen, at least those who do this. This means the nation really means nothing to them, the government is there to bail them out and give them a free pass when their schemes don't work out, but they pay lawyers to avoid having to pay to the common necessities of society.
Sure, charity is fine, for what it's worth, and I won't, but I find it synical that they can get tax writeoffs for it, making them look good without necessarily doing anythig but divert their cash to self selected courses.
There is no one right way to run a country, I realize, but the selfishness today is crazy (may be it always was). If I were one of the super rich, I'd hold on to all my money, because Ið'm a bastard I guess, but may be so are we all, but I think we as a society need to have mechanism in place to make sure everybody contributes fairly, this is not the case today.
You can discuss bigger issues, the crisis really resulting from the manufacturing economies of Germany, Japan and China providing the consumer economies like the U.S. cheap capital so they can buy their goods. So one may argue it is partly up to them to help fix the problems. But that's an altogether more complex topic.
Post13 you are woefully misguided and wrong about so-called entitlements in this country: The Bush administration including the saviors of 1994 did absolutely nothing to strip entitlements. Anyone on these programs has absolutely nothing to fear: After all, there are a significant amount of food-stamp-collecting God-fearing churchgoing Republicans whose votes the conservatives must count upon. A majority of entitlements users are white poor rural or semi-rural people who complain about entitlements.
You, Post 13, you, me, and every other working person is the one who pays for all this. The very rich spen their money overseas, tax shelter it overseas, etc. simply because they can. The very poor's entitlements have never been severely restricted, because to do so would hurt the economies of grocery stores, projects owners, and many other private businesses who earn a living providing goods and services to entitlements-users. It's you and me, middle America, people with kids to put through college as well as people without, who carry most of the tax burden on a per capita per capacity to pay basis. Bush and his Boys ran wild with the Iraq war and a few other so-called initiatives, but they did absolutely nothing against entitlements, except two attempts to curtail NLS services for the blind and a few other drops in the bucket.
Had they snuffed out the food stamps programs, many of their gods-fearing voters on the dole, that you post 13 and many of the rest of us ladle out to them, they wouldn't get the votes they need. All economies are strrongest with a strong and stable middle class, not an entitled rich or entitled poor. We are headed in the direction the third-world nations were when I was in high school in the 1980s, all the time singing silly songs about the rich and paying for the poor. Only when the middle class can't pay anymore, the poor will riot and the rich will move what belongings they still have in the U.S. elsewhere. They already know where to land, how to move resources, and how to keep what is theirs.
Part of being wealthy is the knowledge of how to control one's resources, and how to prevent others' access to those resources.
The real movement in any economy comes from the goods and services bought and paid for by you, and by me, and by other members of the midddle class, such as we are. Born in 1970, I am a member of the so-called Generation X, and my generation's kids are growing up with a much lower standard of living than we had. My generation takes fewer vacations, works longer hours, and takes home less pay. My generation pays more per month (percentages) for food, housing and basic bills.
You are right about the credit situation, and its resolution is not easy. One third of the U.S. economy is wrapped up in credit. This goes from retail to automobile to houses to ... you name it. It isn't about credit being a right, it is precisely about that one third of the economy trying to maintain itself. Has nothing at all to do with either you or me.
So, let's just say for lack of argument, you live in a neighborhood where around your house, 5 other homes got foreclosed upon. Not only did you suffer as your home's market value dropped, but even if you rent as I have done for the past seven years, you may now be treated to squatters. You read about them in books before, but now theory meets reality, and your kid goes through that neighborhood to get to school, with homeless and druggies tying up the neighborhood in the abandoned houses. If there are no homeless to acomodate the situation, there are always raccoons and general physical problems to the property that result from home abandonment, often requiring the buildings be condemned, ultimately a substandard and expensive proposition.
Trite sayings are perhaps useful for media, but the problems we're now acquainted with are far more complex and require a lot more from us than the simple textbook thinking of schoolchild yesteryear economics.
America can handle this: we still are an innovative society, if only we could get the zealots on both sides out of the way. Send 'em out to the field to fight: keep 'em out of the way so the rest of us can get some work done. American politicians never learned from their father to stay out of the way of a working man.
The way I se it is what the government's trying to do is put a small bandaid on an injury too big for it.
its not even that, this mess is being created with the republicans and democrats being at odds with each other.
Which they have been practically since Democrats and Republicans were invented. So there's really nothing new about that.
not necessarily. I don't ever recall this kind of separation in the rationale that the republicans and democrats have ever had aside from when Andrew Jackson was running and he ended up with all those supporters due to his morale.
Truth be told, politics like most other adult activities, is compromise. The problem is, we have people on both sides of the aisle who talk a good line about 'No Compromise' - which is, in fact, silly. Sounds good to a zealot, sounds like something out of an inspirational novel, but makes litttle to no practical sense.
The Tea Party has done a great job of marketing themselves, but they are marketing the feelings of most people rather than marketing solutions. They are the modern "Blood-And-Thunder" (fictional Western novels from the 1800s written by authors in Manhattan who had never traveled west).
Politics like any group dynamic is give and take. This surly, childish 'no-compromise' stance has given us exactly what we voted for. Is it their fault?
Well, I haven't seen a single tea party member ambush a voter / slam them into the booth and force them to vote tea party. It is all us. We put them there, and they have never been deceptive on this issue: they have always said they wouldn't negotiate. Unfortunately, negotiate is their job in Congress, so when I hear that, that is like someone showing up to an interview then telling me when they come to work for me, they promise not to do their job.
The only thing that can be said about them, is they have given the voters exactly what they asked for. If they had behaved like civilized adults, negotiated, thought about the future of this country, they would have gone back on what the voters wanted. They are not at fault: many Americans asked for this.
Hopefully we as a country are smart enough to learn and evaluate.
Now we have Bachman saying people can choose their own science, a twisted version of the leftist elitists of the 90s who proposed so-called "outcome-based" education. Choose your own beliefs about science? Really? You want any of these people designing anything for you? This is as good as handing over technological, genetic, medical and other scientific developments to Asia. If this type gets in, America will have voted to hand our economy's title deed to Asia. And it's the voters, not the politicians, who are responsible: this breed of politicians is appallingly honest about its ends, and people are swooning with the emotional effects rather than stepping back to evaluate. Like a bunch of 1980s loonie lefties, people are crooning 'Something must be done!' believing anything is better than nothing, a complete logical fallacy.
well put, and completely agreed.
It just amazes me how many times I have spoken with republicans, or shall I say, so called republicans who say they want this or they want that. Oddly enough, what they want are not the general platform for the republican party, EG. tax cuts for the rich. It just seems to me the political affiliation is overriding what we as americans want to have done. We communicate by who we want rather than what we want done.
no, it's not, there's a lot of corruption and why does nancy pelosi need more than one jet plane and why not just a small personal one? politicians need to stop sucking up money for once, stop spending it on themselves, stop robbing welfare accounts, and then cut programs down to the law keeping and defense level. taxes won't be necessary or very few, borrowing isn't needed, they won't be in debt, and everything else.