How would you fix the deficit?

[doubtingmerle]

Impeach Obama.

That would end the deficit only if you found another president who would find a way to take those 13 $100B "slices" out of the debt.

What would he cut to reduce the deficit by 13 $0.1T "slices". You have already approved of some tax increases, which I think come out to about 2 "slices" of increase revenue, so that helps. But then where do you get the 11 additional slices off of the deficit?

 

[jacks]

"Impeach Obama"

Actually this shows great faith in Joe Bidden.

 

[DollIsMine]

Cut taxes, start more wars, then when everything goes pear-shaped blame someone else

 

[doubtingmerle]

Welfare programs should have people work and be training them for the future.

In other words you are asking to continue the current welfare program?

 

[doubtingmerle]

I would add to revenue, cut defense spending and cut welfare, primarily food stamps.

OK, but how much would you cut welfare and food stamps? The annual deficit is $1.3T but total spending in that area is only $0.45T. Cutting such programs in half only cuts $0.2T from the deficit. We need to cut $1.3T. So revenue increases and defense cuts need to be huge to balance the budget in your plan, yes?

 

[trunks2k]

Education is part of the root of our problems.

Free preschool for all!!!

Seriously. It's one of the best investments we can make. I'm a huge proponent of early education. Studies have shown that kids who went to preschool are significantly more likely to have graduated high school (and thus, college) and have a steady job, and significantly less likely to have been convicted of a crime and/or require welfare. It's something like for every dollar spent in early education, you get 4 dollars in return in the long run via a higher wage earning work force and less spending on things like prisons and welfare.

And yes, the studies that have been done have accounted for income disparities, etc. They've done things like gone into a community where kids don't go to preschool, and randomly selected a pretty large group of students to whom they provided free preschool. They tracked the kids progress over the years and found that by the age of 21, the kids who were afforded the free preschool were doing significantly better than the kids who did not get to go to preschool.

 

[trunks2k]

Interesting idea. Since the deficit last year was $1.3 T, if we freeze everything at that level and print enough money to balance the budget, we print $1.3T a year. That is a lot of money.

I'd also note that a deficit and debt isn't an inherently bad thing, particularly when it comes to a large government. A problem is that we all too often try to put personal household economics in a macroeconomic view, and that just doesn't work very well.

Investment now can show returns in the long run that can outweigh (either in real dollar terms via economic growth or more intangible quality of life terms) any interest you owe on the debt. If your debt goes up X% every year on average, that's not a big deal if your income is going up more than X% every year on average. You need to have a good debt vs GDP ratio. Yes the US is on the edge of what is a safe ratio, and that needs to be fixed.

Personally, I wonder what it would be like if we had a non partisan group dedicated to predicting a conservative estimate of GDP growth over, say, the next five years, and basing a debt ceiling on that. If GDP is going to be roughly Y, then it can issue enough debt such that the total is Z% of Y. Overrides of Z% of Y would require a super majority in Congress. It would at least end stupid fights over the debt ceiling and give congress a harder, set number to work within.

 

[OldWiseGuy]

Interesting idea. Since the deficit last year was $1.3 T, if we freeze everything at that level and print enough money to balance the budget, we print $1.3T a year. That is a lot of money.

It tells me that we need more money in the economy. If a family is constantly borrowing money to pay the bills (and what is being purchased is needed) that tells me that they don't make enough money. If this is true of the country it tells me that they need to print and issue more money, not borrow more money

And how would you answer the person who fears that would cause runaway inflation?

Price and wage controls for a period of time, more bank regulation (restore historical 20 percent down payment for homes, reduce mortgage rates to historical levels; 2-3 percent).

Our economy is so based on debt (people using unpayable I.O.U.'s as money) that it might soon collapse. We need to restore equity to the financial system so that we can actually own what we possess.

If viewed from outer space the world's economy is a trainwreck in the making. Consider it as a whole. The 'bank' loans the 'world' $100 to run it's economy, and charges 5 percent interest. So the 'world' owes the 'bank' $105. Where will the $5 interest come from as it was never printed and therefor doesn't exist except as an unpayable debt that is reborrowed over and over; until we arrive at our current condition.

 

[ThatRobGuy]

Refute my claim. I dare you. Double dog dare you. Prove to me that we are not borrowing money for nothing.

Because, due to interest rates on T bonds and the rate of inflation, we are literally getting money for nothing.

Not so much chicks for free. But still...

Yes, we're printing money out of thin air when we artificially inflate the currency, however it's not technically money for nothing, it's money from stealing value from the currency already in circulation.

When they inflate the currency to fund social programs, it works like a hidden tax on the folks that have made the effort to save for retirement.

 

[doubtingmerle]

It tells me that we need more money in the economy. If a family is constantly borrowing money to pay the bills (and what is being purchased is needed) that tells me that they don't make enough money. If this is true of the country it tells me that they need to print and issue more money, not borrow more money

"Print and issue" seems to be a popular answer on this thread. Don't have enough of paper dollar bills? No problem, the government has a copying machine!

Or so I am told.

I actually agree with printing money--to a point. That is exactly what we are doing now with QE3 (or QE infinity as it is sometimes called.) It's sorta a nice position to be in. People demand dollars. There aren't enough dollars to go around. The government has a printing press. Presto, crank up the printing press, and we have more dollars. That actually works to a point, but it is extremely risky.

Price and wage controls for a period of time, more bank regulation (restore historical 20 percent down payment for homes, reduce mortgage rates to historical levels; 2-3 percent).

Now there are a couple of ideas that will make conservatives angry!

If inflation pressure is huge, price controls aren't going to stop it.

If viewed from outer space the world's economy is a trainwreck in the making. Consider it as a whole. The 'bank' loans the 'world' $100 to run it's economy, and charges 5 percent interest. So the 'world' owes the 'bank' $105. Where will the $5 interest come from as it was never printed and therefor doesn't exist except as an unpayable debt that is reborrowed over and over; until we arrive at our current condition.

But that actually works as long as there is continual growth, and continual loaning of new dollars in excess of the interest payments. The problem is when growth stops. Then we need to ask how we will maintain the money supply. And the answer right now seems to be that we will print more.

 

[doubtingmerle]

If your debt goes up X% every year on average, that's not a big deal if your income is going up more than X% every year on average. You need to have a good debt vs GDP ratio.

Understood, but GDP isn't exactly skyrocketing now. And yes, interest rates are low, but can you guarantee they will stay there?

What happens if you owe $13 trillion and interest rates jump from 2.5% to 25%? Do the math. Its not pretty. And once you get into the position, cutting up the credit card does nothing to erase the past debts that are still owed.

 

[doubtingmerle]

Free preschool for all!!!

Seriously. It's one of the best investments we can make.

You sure you posted on the right thread? Free preschool is a great idea, but at best that investment wouldn't pay off for 20 years. That hardly helps when it comes to balancing the budget now.

 

[doubtingmerle]

Yes, we're printing money out of thin air when we artificially inflate the currency, however it's not technically money for nothing, it's money from stealing value from the currency already in circulation.

When they inflate the currency to fund social programs, it works like a hidden tax on the folks that have made the effort to save for retirement.

Well yes, but when the money supply is contracting, as it has been doing lately, prices tend to go down instead of up. That is why the Fed has been doing multiple measures to increase the money supply, such as QE1, QE2, and QE3. QE (quantitative easing) is just another name for counterfeiting. If I did it, we would call it counterfeiting. When the Fed does it, it's called QE.

And we are in the interesting position where we can print money and not cause inflation. Its extremely risky and scary, but that is how we are keeping things going.

 

[Vylo]

Understood, but GDP isn't exactly skyrocketing now. And yes, interest rates are low, but can you guarantee they will stay there?

What happens if you owe $13 trillion and interest rates jump from 2.5% to 25%? Do the math. Its not pretty. And once you get into the position, cutting up the credit card does nothing to erase the past debts that are still owed.

Interest rates don't work like that for entire nations. The US has had excellent credit standing for decades. Even the minor dents put in it recently will not disrupt the interest rates we are offered. It would take a global financial upheaval of such a magnitude to change this that the debt would be the least of our worries.

 

[doubtingmerle]

Interest rates don't work like that for entire nations. The US has had excellent credit standing for decades. Even the minor dents put in it recently will not disrupt the interest rates we are offered. It would take a global financial upheaval of such a magnitude to change this that the debt would be the least of our worries.

OK, but that applies only if other countries have strong faith in the value of the dollar, and are willing to loan it to us at low interest rates. If they see the printing presses running, and lose confidence in the future value of the dollar, they will surely start demanding a higher rate of return when they loan to us.

And yes, if that gets out of control, there could be major global financial issues.

 

[If Not For Grace]

1) eliminate the electoral college and take the focus of campaigning/fundraising-think of all the $$ that could go into the economy in more benefical ways than TV ads, etc.

2) Reduce spending across the board.

3) Make the difficult calls to CUT programs/agencies completely as we redefined the Federal govts role in our daily lives-there are things (good things) that are just not their responsibility.

4) Remove the tax exempt status for charities that use more than 25% of donations for overhead expenses & work with religious organizations to take over a more active role in filling social needs.

5) Make one National Security organization combining the FBI, CIA and others into security.

6) Put people to work-no free rides w/o a job. Even those living in public housing can take a turn in the on-site day care, help cut the grass etc.

7) utilize the military here at home-natural disasters, road building,border security etc.

8)Make use of criminals-have work camps for non-viiolent offenders and have them do public/community service-(DUI's, Bad check writers-dead beat parents) Fines owed could be worked off in the same manner. Hold people accountable for their actions and make em pay with service. No Federal courthouse should have a "lawn crew" all those sorts of jobs could be incorporated-Bring this to furition on a state level and you won't need federal funding there either.

9)enforce laws already on the books (like liter) to generate revenue.

The bottom line is no more taxes and do the BEST you can with what you make as far as spending is concerned, if it is not ABSOLUTELY necessary-you cut it-IF you are in debt or can't afford it. Simple...but efficient. Make revenue producing investments not spending programs. You run it like your home and outlaw borrowing except for War....

 

[OldWiseGuy]

But that actually works as long as there is continual growth, and continual loaning of new dollars in excess of the interest payments. The problem is when growth stops. Then we need to ask how we will maintain the money supply. And the answer right now seems to be that we will print more.

Consider a 'Monopoly' game where 'startup' money is loaned to the players, to be repaid incrementally each time the board is circled. The game would quickly collapse, the bank owning everything. That's how the global banking system operates. The economy is a giant pyramid scheme; a larger group of underpaid workers regularly forming the bottom tier that enriches the levels above it, until the top tier virtually owns everything. The operative mechanism is the fractional reserve banking system. It is this system that creates money 'out of thin air', not the government. The banking system creates unpayable debt within the economy and it finally collapses.

The solution is pretty simple. Get unindebted money into the economy. Consider a patient who is bleeding to death. Attending him are doctors who want to do every medical procedure known to cure him, except a blood transfusion. This is what is happening to the economy. Not a single financial expert is even suggesting a workable cure. Its either a conspiracy or stupidity on an unimaginable scale.

We're in a giant hole, and the experts are telling us to DIG FASTER.

 

[Glas Ridire]

1) eliminate the electoral college and take the focus of campaigning/fundraising-think of all the $$ that could go into the economy in more benefical ways than TV ads, etc.

Brilliant. In this day and age of online banking and online voting for which celebrity has the best hair, there is no reason voter registration couldn't be linked to software allowing voters to vote from home or anyplace internet accessible (once). Such an arrangement would take the wind out of the sails of the "no voter ID" people as even a homeless registered voter could log on at the local library and vote once. Elderly house bound people could log on through their home health nurses I-phone and vote once. There is no excuse for the electoral college, besides game rigging.

2) Reduce spending across the board.

Here I disagree, reduce spending on everything that isn't paying down debt and I'll climb back on board.

3) Make the difficult calls to CUT programs/agencies completely as we redefined the Federal govts role in our daily lives-there are things (good things) that are just not their responsibility.

Yes, state's rights! Put those state legis to work! Too often it is just used as a rookie league for federal govt and it shouldn't be.

4) Remove the tax exempt status for charities that use more than 25% of donations for overhead expenses & work with religious organizations to take over a more active role in filling social needs.

Yes.

5) Make one National Security organization combining the FBI, CIA and others into security.

No. Revise laws surrounding inter-agency cooperation and disband agencies like the FBI in favor of state bureaus working cooperatively, Disband the BATFE and roll their tax enforcement duties back into the Treasury Dept. The CIA is a different animal altogether, lets put a posse comatatus-style ban on them working inside our borders and otherwise leave them be to spy and such elsewhere, insist they source inside-country info from state agencies (forcing some things into the light).

6) Put people to work-no free rides w/o a job. Even those living in public housing can take a turn in the on-site day care, help cut the grass etc.

Yeah, I am with ya except the day care thing. We should be more careful who we expose children to, not less. There are other jobs though.

7) utilize the military here at home-natural disasters, road building, border security etc.

National Guard, already has that covered. Except the border security thing. Yes, I think the US military should be on our southern border, stopping anything that crosses illegally allowing civilians to retreat. There should be a (wide, with plenty of multilingual signs, patrolled by drones which could be used to identify where to send the gunship supported troop helicopters for persuasive conversation) buffer zone and a kill zone (after which nobody has an excuse for dying in the desert that doesn't involve willful incursion).

8)Make use of criminals-have work camps for non-viiolent offenders and have them do public/community service-(DUI's, Bad check writers-dead beat parents) Fines owed could be worked off in the same manner. Hold people accountable for their actions and make em pay with service. No Federal courthouse should have a "lawn crew" all those sorts of jobs could be incorporated-Bring this to furition on a state level and you won't need federal funding there either.

Cool.

9)enforce laws already on the books (like liter) to generate revenue.

Yes.

The bottom line is no more taxes and do the BEST you can with what you make as far as spending is concerned, if it is not ABSOLUTELY necessary-you cut it-IF you are in debt or can't afford it. Simple...but efficient. Make revenue producing investments not spending programs. You run it like your home and outlaw borrowing except for War....

Right on! Require a budget, nah, that deserves its own paragraph.

Require a budget. Hold politicians accountable. They take oaths of office, the oaths need to be rewritten with teeth. Not "so help me God" said by so many with their fingers crossed behind their backs, but, "if I fail in my duty I forfeit all personal and corporately owned property and holdings belonging to myself and family, shall accept a lifetime ban on accepting any elected position, and will charitably donate any money I make above minimum wage for the rest of my life." or something like that. A balanced budget should be the starting point of whether a politician has neglected their oath. Hold 'em to that. I'd also be down with public flogging for any politicians passing a law which is found Unconstitutional. Modify their salary. Start them at the poverty line and pay them per law: one amount for every Constitutional law passed and double that for every unnecessary law taken off the books. Put a little financial motivation behind passing good laws (and fear of flogging) so they won't just be running amok passing ridiculous tripe nobody wants, like Obamacare (yes I know some people will say they want socialized healthcare. . .. but did you want Obamacare, as it is written. . . do you really think it is perfect?) Shouldn't have been passed until they got it right, pushing it through as a compromise nobody wants is something politicians should be publicly flogged for.

 

[Vylo]

OK, but that applies only if other countries have strong faith in the value of the dollar, and are willing to loan it to us at low interest rates. If they see the printing presses running, and lose confidence in the future value of the dollar, they will surely start demanding a higher rate of return when they loan to us.

And yes, if that gets out of control, there could be major global financial issues.

They don't have real reason to doubt the dollar, nor the general US economy. Realistically, this will not come to pass in my lifetime.

 

[doubtingmerle]

IfNotFor Grace, you have some good ideas, but how is any of this going to gain $1.3 trillion and eliminate the debt? I contend that is not practical to do this without massive cuts to the military or tax increases. Do you think you can do it? Then please show me where you would cut and get the $1.3 trillion in gains. From which of the areas shown above would you get that $1.3 trillion from?

2) Reduce spending across the board.

And "across the board" means massive cuts to social security, yes? And this means massive cuts to medicare, yes?

Can you see how some people might think grandma is in big trouble if social security and medicare cut?

4) Remove the tax exempt status for charities that use more than 25% of donations for overhead expenses & work with religious organizations to take over a more active role in filling social needs.

OK, now you are talking increased tax revenue. So you are OK with some tax increases? That is a start.

5) Make one National Security organization combining the FBI, CIA and others into security.

Saving how much? The entire budget for these organizations is small compared to the total debt.

6) Put people to work-no free rides w/o a job.

So you are saying you want the current work rules of welfare to continue?

7) utilize the military here at home-natural disasters, road building,border security etc.

The military already defends the borders and helps with disasters. But road-building? Why should we hire soldiers to build roads? I thought maybe it would make more sense to hire road builders to do that.

9)enforce laws already on the books (like liter) to generate revenue.

Seriously, how many hundreds of billions do you expect we can raise by fining litterers?

The bottom line is no more taxes

But you suggested a tax increase: eliminating some deductions for charitable giving. Do you want that tax increase or not?

and do the BEST you can with what you make as far as spending is concerned, if it is not ABSOLUTELY necessary-you cut it-IF you are in debt or can't afford it.

And if grandma is not absolutely necessary you cut her off from social security? Or is grandma an exception from your rule about keeping only the absolutely essential?