Bernanke Deficit Warning

[Meister]

Bernanke made a statement about our growing deficit, I just wonder if our politicians will listen. If they don't, I know they won't listen to anyone, and it might be time to clean the House that Pelosi promised to clean.

The United States must get its trillion-dollar deficit under control or face the consequences, Federal Reserve chairman Ben Bernanke warned Monday.
In remarks to a Federal Reserve conference in California, Bernanke called for the U.S. to whittle down its record budget deficits or risk seeing its economy collapse from unsustainable government spending.
On Friday, Washington reported a $1.42 trillion US deficit for the 2009 budget year that ended Sept. 30. The figure is more than triple the previous year's $459 billion deficit.

CBC News - Money - Tackle U.S. deficit: Bernanke

 

[Oddball]

Looks like it's CYA time at the Fed.

 

[Meister]

Looks like it's CYA time at the Fed.

Yup, Bernanke is on record, and NOW can't be held accountable.

 

[eagleseven]

It'd be great if Congress listened.

I doubt it...

 

[concept]

Where's that bus when you need it?

 

[Chris]

None of our politicians has the balls to cut spending or raise taxes.

 

[Zander]

None of our politicians has the balls to cut spending or raise taxes.

Obama will. he'll increase deficit spending until we have to increase taxes or go bankrupt. It's his version of the Kobayashi Maru.....

 

[Chris]

None of our politicians has the balls to cut spending or raise taxes.

Obama will. he'll increase deficit spending until we have to increase taxes or go bankrupt. It's his version of the Kobayashi Maru.....

Actually Obama is the only one who can solve this mess.

Only Nixon could have gone to China.

 

[Zander]

None of our politicians has the balls to cut spending or raise taxes.

Obama will. he'll increase deficit spending until we have to increase taxes or go bankrupt. It's his version of the Kobayashi Maru.....

Actually Obama is the only one who can solve this mess.

Only Nixon could have gone to China.

Yeah, sure. Obama is "the one". Keep drinking that Kool Aid.

 

[Chris]

Obama will. he'll increase deficit spending until we have to increase taxes or go bankrupt. It's his version of the Kobayashi Maru.....

Actually Obama is the only one who can solve this mess.

Only Nixon could have gone to China.

Yeah, sure. Obama is "the one". Keep drinking that Kool Aid.

He is the president of the United States.

Only the president and the Congress can cut spending and raise taxes.

 

[loosecannon]

None of our politicians has the balls to cut spending or raise taxes.

Cut Spending?!!!!!

They are launching spending TO THE MOON!

but they promise to do better some day.

It's hopeless folks. Social security is already running a half billion dollar deficit/year more than a decade before that was supposed to happen. Then there is a looming $37 trillion medicare unfunded liability on the horizon. Couple that with a shrinking working age group crippled by very high unemployment....

We are goin down. Like for real, going bankrupt. The world doesn't have and won't surrender 4% of the earth's GDP just to finance our debt.

The math is stacking insurmountably against us.

And worst of all the economy will NEVER recover. If by recover you mean return to it's glory years of 2005 or 1998.

Globalization's primary demand is that a great leveling occur between the richest labor forces and the poorest.

We are being taken down a level or 5 to serve globalization. That's a fact. And nobody from the fed, treasury or WH is about to do one damned thing to stop it.

 

[Chris]

None of our politicians has the balls to cut spending or raise taxes.

Obama will. he'll increase deficit spending until we have to increase taxes or go bankrupt. It's his version of the Kobayashi Maru.....

No, that was Bush and Reagan.

It's called Disaster Capitalism.

 

[eagleseven]

He is the president of the United States.

Only the president and the Congress can cut spending and raise taxes.

Perhaps you could remind him of this before he continues creating multiple new trillion-dollar programs?

Just sayin...

 

[Chris]

He is the president of the United States.

Only the president and the Congress can cut spending and raise taxes.

Perhaps you could remind him of this before he continues creating multiple new trillion-dollar programs?

Just sayin...

I am more worried about the lack of national health insurance.

We pay twice as much per capita for healthcare as the rest of the industrialized world, because the insurance companies own Congress. If we could bring down healthcare costs, and increase taxes on the rich to the level they were at when Clinton was in office, we could solve the deficit.

 

[jreeves]

He is the president of the United States.

Only the president and the Congress can cut spending and raise taxes.

Perhaps you could remind him of this before he continues creating multiple new trillion-dollar programs?

Just sayin...

I am more worried about the lack of national health insurance.

We pay twice as much per capita for healthcare as the rest of the industrialized world, because the insurance companies own Congress. If we could bring down healthcare costs, and increase taxes on the rich to the level they were at when Clinton was in office, we could solve the deficit.

Cue....Ringling Bros. and Barnum & Bailey circus music...your a broken record

adding an additional 800 billion dollars+ of debt will solve the deficit how?

 

[eagleseven]

I am more worried about the lack of national health insurance.

We pay twice as much per capita for healthcare as the rest of the industrialized world, because the insurance companies own Congress. If we could bring down healthcare costs, and increase taxes on the rich to the level they were at when Clinton was in office, we could solve the deficit.

1. Healthcare can be reformed without spending an additional penny.

2. The hundreds of healthcare regulations need to be reformed, and we're already paying several hundred Congressmen to do just that.

3. This is because the current money we are spending on healthcare is wasted on systemic inefficiency. We need to whip our healthcare system into shape, not feed it more government-funded doughnuts.

 

[Xenophon]

Barry and his clown car congress know it.

That is why the senate didn't pass cap & trade.

Its also why they are so afraid to pass barrycare.

 

[Meister]

None of our politicians has the balls to cut spending or raise taxes.

Obama will. he'll increase deficit spending until we have to increase taxes or go bankrupt. It's his version of the Kobayashi Maru.....

Actually Obama is the only one who can solve this mess.

Only Nixon could have gone to China.

Chris, you are good for one liners, but just saying Obama can fix is is just empty words. He is the one creating this mess. We can't continue with the rising deficit, that is what Bernanke is trying to tell the politicians.
Chris, go get your own health insurance, your gainfully employed. Don't expect the people of this nation to pay for what should be your own responsiblility. MAN UP

 

[Charles Stucker]

Debt and Deficits

A Brief History
Jimmy Carter (D) held the office of president from1977 to 1980, at the end of which the debt stood ~$ 1 trillion. Ronald Reagan (R) and George Bush Sr. (R) inherited both the debt and a large suite of ‘sacred cow’ social programs, along with an economy which went up and down over the twelve years they spent breaking the Soviet Union. Like Carter their conditions were far from optimal. Carter faced an OPEC embargo which smashed the American economy, and Reagan and Bush labored in an attempt to defeat he Soviets without bloodshed by tempting them to bankruptcy with an arms race. Bill Clinton faced neither of these difficulties. He reaped a peace dividend, downsizing and economizing the military to an extent impossible for his two Republican predecessors. He also was blessed with the most vibrant economic boom ever seen anywhere in the globe. A boom caused, not by any policy, but by the internet revolution. George Bush Jr. (R) saw the economy crumble as he entered office; less than a year later the events of 9/11 pushed him into war and he carried the nation with him for seven more years. In his first year Barak Obama has seen the debt soar to ~$12 Trillion. The GDP for 2008 was, according to the IMF, slightly more than $14.4 trillion.

A Word of Warning
It does not matter if Clinton could have paid down the debt during the years of the internet boom. It does not matter if Reagan and Bush Senior’s bloodless victory over the Soviets was made Pyrrhic by the cost. It does not matter if Bush Jr. was an idiot or if Barak Obama is surrounding himself with ideologues hostile to the American way of life. The ONLY thing that matters at this juncture is reducing the debt before the IMF takes over and reduces the US to a second tier economy.

The Budget, Debt and What Might Be Done
Break the budget into several sections; Pork, Interest, General Operating Expenses, Social Security, Welfare and Other Entitlement Programs, Defense, NASA/Research, and the War on Drugs. Each section adds to the total budget and the current budget is too much, increasing the Debt faster than GDP growth, so each section must be examined for possible reduction. These divisions are not those typically used, but are chosen more for an eye to dividing how they might be reduced.
Pork could, in principle, be completely eliminated. If Obama is truly serving the interests of the USA he can, and should, refuse to sign a budget with a single identifiable bit of pork. Each congressman and senator should be willing to do the same, but Obama can simply demand an open vote of any override should he use such a veto. He might try the catchy slogan “The Pork Stops Here.” The voters should firmly indicate that they will toss anyone out who overrides a “No Pork” veto.
Interest on existing debt cannot be changed by any appreciable amount, it is what it is. Only by reducing the debt can future budgets have lower interest.
General Operating Expenses is a catchall for those costs not covered elsewhere. Like any company in trouble, the employees might get a pay cut. This is doubly true for Senators and Congressmen who should be first in line to volunteer, as part of their love and concern for this great republic.
Social Security is a tricky issue. The government has spent decades collecting a specific tax to fund Social Security; despite their raiding those funds to create the illusion of lower deficits, the money was supposed to be set aside for retirees. Retirees who are often too old or decrepit to easily get decent jobs. Leave it for a later examination. Phasing down Social Security may prove necessary, and reducing Medicare/Medicaid is vital.
Welfare and Other Entitlement Programs should be informed the teat has run dry. Potentially more damning, they don’t work; cancel them entirely.
Defense can be slashed to the bone. Mothball ships, demobilize troops, and pull all the remainder back to US territory.
NASA/Research is another tricky portion. In general any society which falls behind technologically suffers serious effects. The US, despite deficiencies in primary education, still leads the world in research to an extent that with only ~5% of the global population we have ~25% of the GDP, and, at $47,000, one of the higher GDP per capita. Fortunately the total NASA/Research budget is moderately small relative to these others, so it might be possible to save our future while still making the budget work.
War on Drugs expenditures represent another failed program and should be eliminated along with welfare.


Now look at just how much there was to save in the 2008 budget
Defense 613 Billion
Social Security 612 Billion
Medicare and Medicaid 682 Billion
“Other Mandatory” 303 Billion
Interest 249 Billion
Other Discretionary 520 Billion
Try cutting down to Saves
Defense 100 Billion 513 Billion
Social Security 612 Billion 0
Medicare and Medicaid 500 Billion 182 Billion
“Other Mandatory” 200 Billion 103 Billion
Interest 249 Billion 0
Other Discretionary 200 Billion 320 Billion
Total Saved 1.118 Trillion
Total Expenses 1.861 Trillion ~13% of GDP
Tax 2.861 trillion ~ 20% of GDP and reduce the debt to 13.4 trillion.
Failure to control the budget may also tempt some states into seceding in order to escape the onrushing economic meltdown. Attempting to defeat them would as surely bankrupt our nation as attempting to defeat the USA ruined the USSR. The above example was not meant as an outline, rather as an indication of how difficult paying the current best has become.

On Phasing Down Social Security
Stop all payments to Social Security, replace the current OASI with general tax (perhaps one which is not regressive). Freeze all benefits. Anyone who has not yet paid into Social Security will never receive benefits. Make the cost part of the general budget. This will prove a heavy burden on those retiring twenty years from now as they will receive severely curtailed benefits but will not have much chance to earn after the monkey of debt is off the public’s back, but that is the only option except;
Cut off social security now. Completely. Do the same with Medicare/Medicaid. The people who are retired and living on OASI checks are the ones who routinely allowed the politicians to spend from that fund. None put their foot down to stop them. Do that and the above sample could save an extra 1.12 trillion allowing the debt to be eliminated that much faster and ending the specter of “under supported future expenses.”
Before anyone cries “but what happens to all those old people?” let me remind everyone that long before there existed Social Security there were old people. They worked, lived with their children or lived off accumulated savings. Presumably that is what will happen to these old people. After all they asked for ti by reelecting politicians who routinely overspent.

Permission to freely copy and distribute granted so long as credit is given and the text is unchanged.

 

[Soggy in NOLA]

He'll probably get canned, or worse, end up on a park bench in D.C.... a la Vince Foster.