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Subscribe to RSSA report by economist Mark Zandi from Moody’s says that Republicans’ plan to cut spending would cost 700,000 jobs through 2012, the Washington Post reports.
Republicans, however, are pushing back, trying to discredit Zandi (who was an economic adviser to John McCain's campaign), calling him the "chief architect" of the stimulus.
"When considering the latest study from Mark Zandi on the GOP’s efforts to rein in government spending, let’s not forget that he was the chief architect of the Democrats’ failed stimulus plan," wrote Brian Patrick, a spokesman for Majority Leader Eric Cantor. "Even as unemployment climbed into the double digits, Mr. Zandi continued to defend this failed policy. It shouldn’t come as a surprise that he would come out against the GOP’s common-sense efforts to put an end to more stimulus-style spending."
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We shouldn't be too hard on that leftist economist Zandi. So he was off a little bit on his previous estimate of the effects of the stimulus.
Hey, when Obama's out of control reckless spending policies were implemented, I admit I was wrong. My rock solid prediction was that 3 million jobs would be lost in 2 short years...dead wrong.
It is 4.3 million jobs lost.
Bob
Are you sure about that number? 4.3 seems a little low.
Actually, I wonder if the number of people applying for jobless benefits isn't slowing down just because we have reached a point where there are fewer companies going under. And they are waiting for stabiliity before making commitments to expand.
I don't think that will happen very fast under this president.
The Gobble Up Plenty party (we had a surplus and a rolling economy until they screwed it up) campaigned for more jobs. It is not suprising that their ideological blindness has led them to think that less is more, red is black and down is up.
Yes but as long as they are Middle Class jobs no problem for John of Orange or the Cantor man, they must do everything to protect those tax cuts for the wealthy, that's their mandate, or else they will piss off their overlords the Koch Bros, and you don't want them mad now do you. Like Bohner said, "so be it", for a group that ran all over the past two years claiming that they would "create" jobs, looks like that will be a hard task and one that all their followers will glaze over and make excuses for, nope protect the wealthy at all costs. What else would you expect from the group that nearly tanked the largest economy in the world.
It is all a matter of how we count jobs. Are these saved or created jobs? We can now say that the saved and created jobs will be lost even though they never existed. See how easy this is.
James-1838817 does it really matter if the jobs were created or saved. The end result was that people were working. We have about 45 million people unemployed right now. They wouldn't give a damn whether the job they got was one saved or created. Jobs that never existed? Were they filled by phantom workers, paid with Monopoly money? Get Real!
Who did the figuring to find out that Obama's stimulus package didn't work? The stock market is above pre-Lehman levels, first time unemployment claims have been going down, many public employees were able to keep their jobs instead of being laid off, and consumer sentiment is at the highest levels that it has been in three years. The GOP, who caused this mess in the fist place, don't seem to have any ideas.
The Republicans said before the last election that "They would focus on jobs like a laser beam". So far they have had a lot of votes on Abortion, Health Care and oh yes more Abortion. The country is going through buyers remorse and not just in Wisconsin, but nationally. Gov Dan Malloy (D) Connecticut, should be what everyone tries to emulate. He inherited a large deficit from a prior Republican Administration, got State and Union Concessions and raised Taxes on the wealthy. Balanced budget by shared sacrifice. If your number one concern is balancing the budget that is one thing, but, if your number one concern is protecting the tax cuts for the wealthy, then that is something else.
The top 1% of the tax bracket pays 40% of the taxes. Many people at the bottom pay no taxes.
Not only that Bruce but it has been proven throughout our countries history that, with the exception of the Clinton tax increases (explained by the silicon valley boom), increased taxes does not increase and usually decreases revenues.
"It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now ... Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus."
– John F. Kennedy, Nov. 20, 1962, president's news conference
"Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to thefederal government."
– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964
Read more:John F. Kennedy on taxeshttp://www.wnd.com/news/article.asp?article_id=39517#ixzz1FMZUKBV3
A wise Democrat who knew his economic history and tragically had his life cut short.
So what explains the last 10 years? The lower taxes should have "theoretically" been a boon for economic stimulus...what happened? Using your logic, "history" should have repeated itself, but as we can clearly see, that didn't happen. In this case it appears it was a case of a dumb ass Republican who had not idea of economic history and he's passed the mantle on to other dumb ass Republicans who believe in trinkle down economics. Otherwise known as the "golden shower"
Easy... You can't have one or the other. Higher spending with lower taxes doesn't cut it. Higher taxes period doesn't cut it. Lower taxes and reduced spending has always brought about our highest levels of prosperity. You actually have hit the nail on the head with "Dumb Ass Republicans". Spent like drunken sailors with wars and prescription programs etc... Now we have Democrats that follow Keynesian economics and that isn't working either. Both sides want to sell us that we need to give them all the control and our money and they will steer us to the promised land. The point is that Government, R or D are and will continue to be ineffective idiots. As George Washington said, "A government is like fire, a handy servant, but a dangerous master."
83 of the TOP 100 U.S. Corporations paid NO Taxes Last Year. Bank Of America which got 45 Billion in Stimulus Money Paid No Taxes and Got $1.9 Billion in Tax Returns? These are not Bankers they are scam artists and their Executive Board should be put in Jail immediately.
See, here's the deal. Republicans cut spending, which makes the tea party crowd happy. ( at least for the short term). The spending cuts cost 700,000 jobs which they can blame on Obama through their faux news spin machine, which will cause the Dems to lose the White house, which will make our corporate overlords ecstatically happy. Win win, no?
We cannot continue to borrow from China to pay wages of employees we CANNOT afford. In the private sector, those jobs would have been eliminated LONG ago. Banks won't fund unprofitable private businesses. If it makes sense to you to increase taxes for jobs we cannot afford or to borrow from China, I can't help you. But you should seek counseling. Truly.
Banks take our money and invest it overseas. Our small business owners can't get a dime of the money WE bailed them out with, but because as one banker said "the future is in foreign markets" So American business don't have access to the money we lent them; OUR MONEY, but they lend it to companies overseas that take away our jobs. When they aren't doing that, they are using part of the money we lent them to buy up their outstanding stocks, giving ginormous bonus all the while paying NO TAXES. Where is the sense in that? And you think that poster needs counseling. Truly, for real? And there's the little matter of the $800 Billion we borrowed from China to extended those pesky Bush Tax Breaks. No problem borrowing that money, but heaven's forbid we should borrow to keep Americans in their jobs.....go figure.
Sounds like another "so be it" moment from the "let them eat cake" Republicans. Can you count on the Repulbicans in Congress to do what is best for our country and the majority of it's citizens? HELL, NO, YOU CAN'T!
No one here see whats going on in Wisconsin!. It's ALL smoke and mirrors The 14 are on the DNC's padd useing the people of Wisconsin as Scape goats to fire up Obammys Election Bid...Cannon Fauter to fire up the Base..Obammy could care LESS.. Whats all the HUB BUB about anyway, walker is just Doing what Obammy said to do all along anyway...SPREAD THE WEALTH AROUND thats all walker is doing..NOT SO MUCH FUN when its YOUR MONEY THOUGH HUH!...How is all that HOPE AND CHANGE WORKING FOR YA! NOW!....
How is that JOBS, JOBS, JOBS thingy working for you now? Your logic is that the majority of people in Wisconsin are scape goats? With this bunch of Republicans, the fun has just started. Hope you get a chuckle out of it because America won't.
Amazing how many people jump on this issue when the article gives no details on how, why, or which jobs would be allegedly lost. It just show that there are some who are willing to believe anything negative about the right without any real proof at all. Mental midgets every one.
Sometimes people don't need to eat the whole pig to know when they're eating pork or if it walks like a duck and quacks like a duck, it must be a duck...getting my drift. And since when did the right need truth or proof of anything. As for mental midget, why does Beck have to use a chalkboard when talking to his audience? Perhaps because they need visuals to keep up?
Got your drift; you don't mind if the facts interrupt your fantasy. Someone tells you it's pork and ask for the barbecue sauce. If a liberal writer told you the moon was made of green cheese you'd probably grab some wine and bread and head for the stars.
I can only HOPE and PRAY all those JOBS are GOVERNMENT JOBS IN WASHINGTON DC!...
These are not "GOP" cuts per se; they are cuts that both parties should have been making all along, so it's unfair to blame the straw that is seemingly breaking the camel's back. The state governors have no choice but to go after state expenses because they are being saddled both directly and indirectly by Federal taxes and waste, which they cannot control. See today's article in the WSJ below.
We are fighting the wrong "enemy". The real "problem" is the Federal government and all the waste it creates. I'm willing to protect the state unions as long as they join us in reducing Federal government waste, instead of being in bed with them. The savings we could realize from the Federal government would make the savings from getting rid of unions at the state level pale in comparison.
Billions in Bloat Uncovered in Beltway
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By DAMIAN PALETTA
The U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.
These are a few of the findings in a massive study of overlapping and duplicative programs that cost taxpayers billions of dollars each year, according to the Government Accountability Office.
GAO Report
View Document
See the report, 'Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue.'
A report from the nonpartisan GAO, to be released Tuesday, compiles a list of redundant and potentially ineffective federal programs, and it could serve as a template for lawmakers in both parties as they move to cut federal spending and consolidate programs to reduce the deficit. Sen. Tom Coburn (R., Okla.), who pushed for the report, estimated it identifies between $100 billion and $200 billion in duplicative spending. The GAO didn't put a specific figure on the spending overlap.
The GAO examined numerous federal agencies, including the departments of defense, agriculture and housing and urban development, and pointed to instances where different arms of the government should be coordinating or consolidating efforts to save taxpayers' money.
The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances, according to a draft of the report reviewed by The Wall Street Journal.
Instances of ineffective and unfocused federal programs can lead to a mishmash of occasionally arbitrary policies and rules, the report said. It recommends merging or consolidating a number of programs to both save money and make the government more efficient.
"Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services," the report said.
There have been multiple efforts to cull the number of federal programs in recent years, but they often run into opposition from lawmakers in both parties who rush to defend individual spending provisions. In fact, GAO's recommendations are often ignored or postponed by federal agencies and lawmakers, particularly when they could require difficult political votes.
Washington Wire
The report says policy makers should consider creating a single food-safety agency because of a number of redundancies. The Food and Drug Administration makes sure that chicken eggs are "safe, wholesome, and properly labeled" while a division of the Department of Agriculture "is responsible for the safety of eggs processed into egg products."
Spokespeople for the Department of Agriculture and FDA pointed to the Obama administration's creation of the Food Safety Working Group, which works to better coordinate the government's regulators.
The report says there are 18 federal programs that spent a combined $62.5 billion in 2008 on food and nutrition assistance, but little is known about the effectiveness of 11 of these programs because they haven't been well studied.
The report took particular aim at government funding for surface transportation, including the building of roads and other projects, which the administration has made a major part of its push to update the country's infrastructure.
The report said five divisions within the Department of Transportation account for 100 different programs that fund things like highways, rail projects and safety programs.
One program that funnels transportation funds to the states "functions as a cash-transfer general-purpose grant program, rather than as a tool for pursuing a cohesive national transportation policy," the report said. Similarly, it chided the government over encouraging federal agencies to purchase plug-in hybrid vehicles while having policies that agencies reduce electricity consumption. It said government agencies have purchased numerous vehicles that run on alternative fuels only to find many gas stations don't sell alternative fuels. This has led government agencies to turn around and request waivers so they didn't have to use alternative fuels.
A spokesperson for the Department of Transportation said the president's budget for fiscal year 2012 "proposes to cut waste, inefficiency and bureaucracy by consolidating over 55 separate highway programs into five core programs, and by merging six transit programs into two programs."
On teacher quality, the report identified 82 programs that often have similar descriptions and goals and are spread across 10 federal agencies, including the Department of Education, the Department of Energy and the National Aeronautics and Space Administration. Nine of these programs are linked to science, technology, engineering and mathematics. Fifty-three of the programs are relatively small, receiving $50 million or less, "and many have their own separate administrative processes."
The GAO highlighted 80 different economic development programs at the Department of Commerce, HUD, Department of Agriculture and Small Business Administration, that spent a combined $6.5 billion last year and often overlapped. For example, the four agencies combined to have 52 different programs that fund "entrepreneurial efforts," 35 programs for infrastructure, and 26 programs for telecommunications. It said 60% of the programs fund only one or two activities, making them "the most likely to overlap because many of them can only fund the same limited types of activities."
The report took aim at several military programs, which could prove thorny because many lawmakers from both parties are wary to cut defense spending. It said there were 130,000 military and government medical professionals, 59 Defense Department hospitals and hundreds of clinics that could benefit from consolidating administrative, management and clinical functions.
For example, it said the government "may have developed duplicate" programs to counter improvised explosive devices, with the Marine Corps and the Army paying to develop similar "mine rollers." The Marine mine roller costs $85,000, and the Army mine roller costs $77,000 to $225,000. "Officials disagree about which system is most effective, and [the Pentagon] has not conducted comparative testing and evaluation of the two systems," the report said. The Pentagon didn't immediately respond to a request for comment.
The GAO study was required by a provision inserted by Sen. Coburn into a law that raised the federal borrowing limit last year. This report is the first produced in response to the provision.
Write to Damian Paletta at damian.paletta@wsj.com
Can't we all see that both sides have parts of the possible answers to the problem if only a compramise could be reached. This all or nothing approach that both parties have will kill us. We must cut spending and waste but we must spend to stimulate and keep us out of a recession/depression and everyone must contribute and sacrafice something according to their means. Fortune telling, speculation on how things will turn out if we go this or that path is only that, choose a compramised path and see it through.
That's ok. Instead of standing up against it the left side of my inbred football game can really capitalize on this come Ohio but as long as we all agree to spend 100 billion looking for one backpack cause securing that super orgasm is where our society pivots from now so don't blame me when you don't have a job and don't feel safe in the homeless shelter.
?????
Gimme Gimme Gimme, even if I don't deserve it or you can't afford it...The liberal motto.
Screw you, screw you, screw you because if you aren't rich, you deserve it...the Republican/Tea Party/ Conservative motto.
No, if you didn't earn it you don't deserve it.
Does that hold true for those bankers on Wall Street. Crap our economy and still "earn" those bonuses?
Should have let them fail. This misnomer of too big to fail is made up and never should have happened. That one is on Bush with his famous "abandoned free market principles to save the free market". So, to answer your question, their job should have no longer existed for them to have gotten the bonus.
Of course the GOP plan will eliminate jobs; their ideas of "helping" the economy ALWAYS cost American jobs. They have never been on the side of the working man. It's always "help the rich", "help the poor, starving corporations", "help the oil companies". Who do they think they're kidding? That's why the economy always suffers when the GOP is in charge. Anyone who thinks otherwise has not paid attention to history. Reagan, the Bushes, Nixon. It's always the same. "Layoffs will save the economy" is their rallying cry. Why does anyone think it would be different this time?
You know I've been reading through the comments and all I can say is that after 25 years in the Technology sector, my profession, and 3 years without a full time job, with no unemployment benefits.
I watch H1B status employees, not illegals, coming into this country and taking the jobs away that are created in my sector.
It's interesting that we don't seem to find reason to limit the number of Visas offered, last I knew. The number I last heard was 400k granted every year. It just seems to me there are so many other opportunities to insure that we as a nation can support our own workers that the impact of tax cuts, union-busting etc. are short-sighted strategies that in the long view don't solve the basic issues.
If we keep importing workers and exporting jobs via outsourcing it doesn't really matter what cuts we make in government since we basically ar exporting our wealth.
I am not a scholar or particularly politically aware, just a normal human being that would like the opportunity to be productive in this country I was born in and to have the opportunity to feed myself, clothe myself and have a roof over my head. I have been homeless and hopeful throughout all of the wrangling of both parties over this period of time.
So tell me again, why, even though I voted my needs as a US born Citizen are any less important? That's 400k jobs a year alone...
Oh yeah - I love it. When we need the jobs they send it away or bring it in under a contract with no benefits. I lost a perfectly good job when outsourcing sent everything to Australia, China and Malaysia. I have a job now but I hope everyday I am not out the door again because they can actually buy it cheaper and import it in.
This is so ridiculous... Neither side is actually getting serious about the budget. What people never seem to realize is that the "deep cuts" proposed by the GOP and the "wimpy" plan from Obama are the same from a budget standpoint. The difference between them is $60 billion or $100 billion in a $4 trillion budget that is being funded through $1 trillion in borrowing... Obviously, neither the GOP or the democrats are really interested in tackling the deficit or the national debt, at least not with this budget. There are few realities, as I see it, that people are failing to grasp:
Most economists agree that cutting spending is a terrible idea at this point and that adding to deficits during a recession is OK provided that they are addressed (something we haven't event tried since Clinton balanced the budget)
The stimulus worked... it's a fact, as much as the right likes to say that it failed, it only failed to live up to it's initial projections. The curve on unemployment started to change for the better immediately after implementation of the stimulus. The stimulus was also initially supposed to be much bigger, over $1 trillion dollars. In the interest of securing a few GOP votes in the senate, it was reduced to $878 billion with 1/3 of that money in the form of tax cuts. It worked, it just didn't work as well because it was never given the funding that was originally intended (Also, no one knew how bad things would get yet).
Since the democrat and GOP plans don't really come close to balancing a budget or addressing the national debt, why are they so different? They're so different because the GOP is using this as an excuse to forward their right-wing agenda and eviscerate funding for things they are ideologically opposed to. Their cuts have nothing to do with really saving money. The question isn't "we can cut funding for NPR and Planned Parenthood and balance the budget!" - that's no where near a reality, if it were true, there would be a lot of democrats and republicans into the idea. This is an ideological power grab that aims to undo as many demoratic initiatives as possible and it will not help the people of this country or the budget one bit - this is political pandering at it's best and we will never get anywhere if it continues.
The fact is, everyone will have to come to terms with some cuts and tax increases. that will be the only way to not radically chance the fabric of modern american life and close that $1 trillion dollar budget gap. We need to fund innovation and increase education and improve health care so we can have a smarter, more productive work force in the future. like it or not, the dice have already rolled and we can't chance the fact that our children will be paying this debt back, not us. let's actually give them the tools now to ensure they have the best chance of doing it.
"TKS the Engineer"
Your rational is way to sane and reasonable for some people here.
TKS Engineer, you communist, socialist, liberal, Obama lover, Acorn lover, hater of America. Just joking. Excellent post. No doubt you will hear these stupid statements from the Right!
This post is nearly devoid of facts. "Clinton" did not balance the budget; the main cause of economic growth in the nineties was the dot.com boom. The so-call stimulus was a complete waste of money; it was actually $787 Billion and there was absolutely no surge in job growth during any time the money that was spent, was spent; joblessness actually spiralled downward and it still above nine percent. The "democratic initiatives" are the types of things that created this economic mess to begin with: Carter's Community Reinvestment Act, Clinton's Glass-Steigal Act and legislation against "red-lining." The economy in the nineties didn't begin to flourish until republicans took control of both houses and it continued to do very well until the democrats took back control. You can speculate all you want, but if you check the facts, you'll find them very different than what you attempt to portray. We need a massive cut in federal government spending; there is no need for the federal government to be as large as it is and so intrusive in our lives. This is the only way we will ever begin to pay off our debt. Obama is the most spendthrift person to ever enter the White House; if he doesn't leave sooner than later, this country has no chance...
RealMerridian, you are totally delustional. Your post is so stupid and inaccurate where do you begin?? Ronald Regan your hero raised taxes 11 times during his time in office!! He left Clinton with the biggest pile of mess other than the mess Bush left Obama. Both Regan and Bush left office without creating any jobs. Bush lost 8 million jobs. Had a huge deficit in which Dick Cheney said "Deficits don't matter", high unemployment, Wall Street about to collapse, two unfunded wars!
Whatever you are smoking its illegal. Oh, Ronald Regan gave Amnesty to 4 million illegals.
I'll concede this - the stimulus is $787 and not $878, i got my numbers mixed up. At least I'm not orders of magnitude off like most republicans...
Let me go through your post point by point:
The dot com really added a lot of money to the federal tax rolls and contributed to the balanced budget, you're right. However, the budget was in fact not only balanced, but had a surplus and unlike GW bush and his cronies, didn't decide to give it all back to the rich.
"The stimulus was a waste of money" - that's a statement and you've provided no facts to ack it up... http://www.cbpp.org/cms/index.cfm?fa=view&id=3252 this link provides an overview of monthly employment during the last few years. There was no "surge" in jobs but it's no coincidence that the stimulus reversed the alarming speed of job losses and stabilized unemployment at about 9.4%. You also don't acknowledge my point that the stimulus was actually a weakened, anemic version of what Obama initially proposed. As initially proposed, it is very likely that rather than stopping the job losses, it could have reversed them, at least in the short term - and got some essential infrastructure repaired in the process.
The repeal of the Glass-Steigal act was signed by Clinton, you're correct, but it was developed by republicans. If it were such a stinker, why was the repeal referred to as the Gramm–Leach–Bliley Act (All republican sponsors and authors, btw). That was also over a decade ago and again, if republicans thought it was so terrible, they should have some something in the intervening decade of republican rule to correct it.
You could look at the cost of Carter's community reivestment act and I bet it doesn't come close to the dollar figures required to "cause this mess" as you put it... And red-lining was racist, contributed to white-flight and urban blight.
And, as I was saying previously, neither my commie liberals or the GOP are proposing massive federal budget cuts - NEITHER ONE! they are playing around with 1% of the annual budget - that's it! One problem is, no one wants to cut services and no one wants to pay for services... and the cuts the GOP wants to make are ideologically driven, not pragmatic - this is an opportunity for them to do away with programs they don't approve of - that is unacceptable...
I think that cutting $100,000,000,000 in annual waste would be great, that coupled with even-handed program cuts and tax increases... the budget could actually be balanced.
look at this link - I think the government should put something like this out to the public and ask each individual to perform this exercise for themselves. http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html
Then, adding up all the results and priorities, we could come up with something that americans, not legislators are willing to live with.
And don't worry - I predict Obama will be elected again and that the GOP hold in congress will be short-lived
We have been adding to the deficit for over 50 years. We are still paying off money borrowed from Vietnam. At what point do you "stop the deficit spending"? Congress does not want to stop the spending this year for the same reason it did not cut it for the other 49 years. It is simply not favorable to lobbies and voters so it will never happen until the creditors force us to cut it.
It has absolutely nothing to do with economics and everything to do with being reelected. People who make cuts don't get reelected. People who keep raising the deficit get reelected.
TheRealMerridian, I checked the facts, it says you're wrong.
http://en.wikipedia.org/wiki/Presidency_of_Bill_Clinton
But you can't pool SS and Medicare in that to create a surplus.
What does that mean? SS is kept separate from the budget and is actually a full solvent fund (as of right now). because of the recession, credits exceeded debits for the first time but the fund still exists and does not count as surplus
No social security fund exists. Every penny sent out above the amount taken in goes right to the U.S. deficit.
John Galt - Cute...
Actually there is a social security trust fund http://www.ssa.gov/oact/progdata/assets.html
And except for a small blip, credits exceed debits and it has over $2.5 Trillion in assets...
And, when outlays exceed income, it's made up by the fund, not deficit spending.
These are facts - don't get it twisted
Ah, I see, you are referring to the lies perpetrated by the Social Security administration themselves. Do you know what are the form of the "assets" in the "trust fund"? Is it gold? Or cash? Or real estate? What do you think makes up those assets? I can't wait to get through this with you, I thought everyone knew.
Lies - you know the real truth with all your exclusive access... what assets? I admit to not being sure but I assume it's treasury bonds or something? Those are assets... as much as you don't believe it.
If you're going to go into some BS about the gold standard, save it - most economists agree that the gold standard contributed to the severity of the misery of the great depression and switching off the gold standard was one factor in helping us get out of the depression. The lack of a gold standard also helped make this recession less severe than it would have been otherwise.
The fact is, there is a fund that contains assest and the fund gets bigger every quarter that credits exceed debits... what's you're 401k in? stocks? bonds? they can all just disappear too
This has nothing to do with exclusive access, I just know how to read public information. You nearly have it right and there is exactly one kind of "asset" in there, special US IOUs (treasuries). Here read this thoroughly and get back to me. This is right on the same web site you referenced. Try to read it with some critical thinking and let me know what you think is backing up those special treasuries, because it is said very explicitly.
http://www.ssa.gov/oact/progdata/fundFAQ.htm
Then read this:
http://www.independent.org/blog/index.php?p=9259
I didn't say anything about gold standard, and it's not related in any way, so I don't know why you went on this rant.
You're not much of an investor, are you? You're really hedging with this. Yes, the "assets" in the SS "fund" grow when intake exceeds payouts, but those days are over. With the boomers retiring, intake is supposed to be lower than output basically from this point forward. So where does the money come from when the cash flow is negative? Do you know? Read the above and get back to me.
I get your point about the IOU's and owing the money ultimately to ourselves but... it's not really the whole story. Money is basically an arbitrary social construction and money only has value because we assign it value.
I guess the idea of investing social security "Assets" in something other than US treasuries makes sense but no investment is secure enough for people i suspect. Maybe, if there was some sort of a money market created with the federal government buffering any actual losses if the interest rate goes negative, or negative below a certain point that would work... that way, the credits could be used to purchase "real" assets and the government would be liable for losses but not interest gains...
The US treasury sort of decouples money from the federal government in some ways though doesn't it? Bernanke can choose to move interest rates and create money at will... and they're the ones who issue treasury bonds...
Yes - and it's all a shell game
I'm not missing any part of the story. The abstract social construct of money doesn't really matter. If a mutual fund or bank were operating the way the federal government is running Social Security, they would be out of business, post haste, and probably in jail. The money comes in the front door, and goes out the back door in the form of either payments to other people, or to the government's general revenue stream to spend. They stick some nifty pieces of paper in the vault promising to pay that money back, but they are not putting it to any productive use themselves. The only thing behind the repayment is the full faith and credit of the U.S. government, which is the U.S. taxpayer (you and me), or the government deficit spends (borrows), or they print more money to pay it back!
If you buy a stock or a bond in a private enterprise, it's because you are expressing confidence in their management and business model that they will use your money wisely and they will generate a profit selling the fruits of their labor, thus giving you a real return on your investment. Does it always pay off? No! but, if you follow proper investment guidelines by diversifying and dollar cost averaging, it will almost always pay off in the long run. If you stayed in stocks after 2008, and stuck to your knitting continuing to invest, you would likely be far beyond your high point in 2008 by now. I can tell you that I am.
You are confusing the Federal Reserve Bank with the U.S. treasury, by the way. The Treasury are the folks who collect taxes and borrows money, but it's the Fed that controls the money supply, primarily by purchasing certificates issued by the treasury in exchange for fresh money.
The whole Social Security trust fund is an illusion just like any other confidence scam. They dress it up like insurance to make you feel like you're investing and are guaranteed to get something back. Next time you get your social security statement in the mail, take a long time to read all of the fine print and tell me you don't feel a sense of panic.
John, you are correct. The Supreme Court specifically told FDR he could not hold ANY money in "trust". He also could not sell or offer people insurance or a pension.
Social Security is simply a tax and the federal government is not liable to give anyone "anything" back. To give people Social Security checks is a "courtesy" and there is nothing anyone can do to change that. This was also decided by the Supreme Court. This is also why the government can give your Social Security money to another generation or even people who paid little or nothing into the system.
It is simply a tax the government can do what they please with. People are so lame and politically uneducated.
In fact, that's the only way the Roosevelt administration could get the scheme to pass muster with the SCOTUS by declaring it as a tax so that it would fall within the authority of their taxing power. The Obama administration just tried to pull the same game with the penalty for not getting health insurance because they know the mandate won't pass muster if it's intended to coerce behavior instead of raising revenue.
"john", I was going to not reply since I think you make a good point, and, quite frankly, changed my mind about the current state of the social security trust fund and what it invests in. But, though you make a good point, the idea that social security is simply a scheme or another wasteful tax is just not true. I guess it depends on your perspective, but even if it operated simply as a "pay as you go" program it had help sustain millions of older americans and allow them to live out their lives with dignity and at least some security. And just because the SCOTUS made some ruling about not holding any money in trust doesn't make it right, or the smart thing to do. I find it a little strange that we're allowed to stockpile oil in a strategic reserve but we can establish a real trust fund to shore up the retirement of millions of americans. it's different, but I don't think it's that different.
It seems like it would make sense for annual SSI surpluses to be invested either back into the american economy, or, possibly a better idea, invested in foreign economies like a soverign wealth fund. it could even be used as a tool of foreign policy to increase development in the rest of the world (and people to buy our stuff). If debits exceed credits, the government can sell assests to make up the difference. in a few years, the fund would be millions and if there was a recession and the value of the trust fell, at least it would still have intrisic value, as opposed to the US buying bonds from itself that, though secure, would eventually have to be paid back in interest.
It is not a tax the government can do as they please with... And even though democrats and repubicans alike have raided the fund to shore up deficit spending, the VAST majority of what goes in, goes back to people...
I know the real root of this argument is a differing ideology - I think something should be a right and you think it's a privilege. The thing is, that societies only advance and advance quality of life when everyone is taken care of. You can't have a thriving country of 300,000,000 people without making sure that the 50,000,000 less fortunate ones are provided with some assistance. without that, the fabric of society breaks down and the fortunate cloister themselves away from the less fortunate (a 3rd world country in a 1st world country - or the other way around...). The convenience of the republican ideology often presupposes that this country would be even greater if these social programs never existed, that somehow, the increasing quality of life or the last 100 years happened in spite of the new deal... there would be no middle class to pander to without the new deal, social security, etc... You can't take away or completely privatize these programs and not replace them with something else
my two cents
The republican party has stated they are going to raise $120 million dollars to support their campaign for a republican president in 2012.
I make $21,000 a year. $120,000,000 would equal 5,714 employed individuals. Republicans need to take that $120 million and put it towards the american job industry, not their own pockets. Their like little kids with their hands in the cookie jar. You can't trust them.
It seems to me that the time has come for Americans to take back America. We have to unite and demand the Reagan era tax cuts be repealed. Just look at what the results of those tax cuts now! It's time to place a sales tax on Wall Street trades. It's time to repeal NAFTA and fix America before we try to fix the world. It's time for a war on poverty and a war on greed. Stand up and fight America! Let your voices combine to be heard.
Cutting 700,000 jobs!! Now that's the GOP we all have come to know and love! They got rid of 8 Million jobs during the Bush years! Anybody believing that the Republi_CONS were going to create jobs also believes in the toth fairy!!!!!!!!!!!!!
"Toth fairy?" Is that how Barney Frank says "tooth fairy" when he not screwing up Freddie Mac and Fannie Mac?
Someone writes: "
In your opinion you'd probably just keep on spending until the whole system collapses and everyone starves! Yeah, that's the lefty way! How about maybe those 700,000 government jobs get replaced with REAL productive, revenue generating, private sector ones? Maybe small business growth when the Feds quit sucking the life out of the economy!"
We need to put aside the logical fallacy of name calling ("lefty way") and catch phrases ("sucking the life out of the economy") and look more closely at the consequences of the GOP budget. It's going to cost jobs when the unemployment rate is already unacceptably high.
If you call for "real, productive, revenue-generating jobs," how about rebuilding our infrastructure? Everybody agrees it needs to be done, if not by us then by our kids. The government uses tax revenue to hire private contractors who do the work. The materials used will be domestically produced and the jobs themselves can't be outsourced. Instead of collecting unemployment, the workers will be paid wages. On these wages they will pay taxes, which will reduce the deficit by raising federal revenue -- something the tax breaks for the rich are not doing. Moreover, the workers will buy their goods at WalMart, which will feed the money back directly into the private sector of the economy, which will against provide more federal revenue.
When looking at consequences, instead of calling names and making flip judgments, there are a couple of other things to keep in mind. Among them: (1) "Private sector jobs" are not in themselves in any way superior to "public sector jobs." This is an economy, not a religion. (2) There is increasing evidence from sources traditionally allied with both sides of this argument that GOP plans to cut spending everywhere is satisfying their base but is bad for the economy. The worse the economy gets, the worse it is for Obama. What does this suggest about the motives of some in the GOP, regarding the next presidential elections?
The fallacy in your argument is that public sector spending must be supported by taxation or borrowing. That money doesn't just magically appear without cost, people have to work and then pay it into the system.
If you can't show that for every dollar of tax revenue spent it generates at least one dollar in tax receipts through economic activity generated by that dollar, then your argument isn't valid. It might work if the two amounts are close together, but if that dollar has to be borrowed, interest on the debt must be taken into consideration.
Interest payments on the debt now amount to I believe between fifteen and twenty percent of tax receipts. Massive borrowing could put that to twenty percent and higher. Who wants to pay one fifth to one quarter or more of their tax money to go to pay interest on a debt that will never be paid off?
You want to generate growth? For every dollar in tax cuts, you get $1.03 worth of growth. For every dollar paid in unemployment benefits (and by extension, wages) you get $1.60 worth of economic growth. Those figures are from Moodyecon.com. I would like to cite the exact article but I'm not a paying member of Moody's. However, the figures come from a reliable source. Of course it's always possible that Moody's is a nest of communist conspirators just making up figures so labor can take over the world.
You say the interest on the debt is bad news and, as I said in my post, I agree entirely. The growth in the national debt is unsustainable. There is no reason to believe that tax cuts are going to help. We've been trying it for the past ten years. And taxes are now at their lowest point in more than thirty years. I'd like to suggest that when we pull out of this slump, and we will, we raise taxes for everyone. That will curb irrational investments, reduce and eventually eliminate the debt, and perhaps even build a surplus so that the next time we get a bust, the hole isn't as deep as it was in 2008.
I have a question though. What do you have against public-sector jobs? Why do you treat them as "evil," as something alien to the American way? The nation has been "socialist" from its founding, when Benjamin Franklin was appointed first Postmaster General.
How about actually taxing "everyone". The largest problem is 50% of the country don't pay any. The problem with public sector jobs is they are deficit driven and financed. They are unfunded so they generate negative cash flow in debt with interest. Since we never pay a principal off you are guaranteed that principal will double every 20 years. This includes doubling every wage, benefit and pension of a federal employee. So you have to borrow to support an employee for 30 years then you borrow more to pay him to do nothing for up to 30+ more. Many can take a retirement and collect Social Security etc. Sooo.. when you tally all that up it is a small fortune to give a career even to a lowly $35K a year employee. The higher paid employees are simply insanity.
Until we have a balanced budget amendment including appropriations public sector jobs are nothing but a drain. Even then we would have to have a large surplus to cover inevitable wars and natural disasters etc or we wind up right back where we started.
We will never eliminate the debt or even pay it down significantly. The Federal Reserve will make sure of that. If we were going to do that we would have done it along ago and removed them. JFK tried and failed.
As Ben Franklin said "When the citizens can vote themselves jobs and money from the treasury it will herald the end of the Republic."
I thought we were promised that if the Bush tax cuts of 3% for the wealthiest were extended that this would create jobs. SO WHERE ARE THE JOBS?? Don't tell me that the Tea Party and the Republicans lied to the country. The President tells the Corporations that they should feel obligated to create American jobs (again there's that 3% extension that you guys insisted on) and the first words out of their mouth is - we have no obligation to the people of this country to create jobs - well then we have no obligation to keep these tax cuts. The Wisconsin TP Governor grants over a $100M in tax cuts to corporations and then claims that the state is running a deficit (as a result) and they need to remove the unions. Maybe the public is starting to wake up.