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  1. #41
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    Explain to me why when Clinton was in office, we were rolling in money, had a budget surplus. Republicans get into office and drive it all straight to hell. A Democrat gets into office and the Republicans are up on their hind legs talking about the disgraceful state of the budget, when THEY ARE THE ONES WHO SPENT THE MONEY. And now you think you can somehow convince me that it's reasonable and there is no alternative but to work people into the ground and to take money from the poor and the elderly and the disabled? Yeah no, sorry.
    How about the realized gains from decreased military spending with the death of the Soviet Union and the Cold war.

    How about the birth of user friendly internet technology, or the tech bubble.

    How about unequally levying taxes across all tax brackets.

    Geithner Tells Obama Debt Expense to Rise to Record

    By Daniel Kruger and Liz Capo McCormick
    http://www.bloomberg.com/news/2011-0...to-record.html

    Barack Obama may lose the advantage of low borrowing costs as the U.S. Treasury Department says what it pays to service the national debt is poised to triple amid record budget deficits.

    Interest expense will rise to 3.1 percent of gross domestic product by 2016, from 1.3 percent in 2010 with the government forecast to run cumulative deficits of more than $4 trillion through the end of 2015, according to page 23 of a 24-page presentation made to a 13-member committee of bond dealers and investors that meet quarterly with Treasury officials.

    While some of the lowest borrowing costs on record have helped the economy recover from its worst financial crisis since the Great Depression, bond yields are now rising as growth resumes. Net interest expense will triple to an all-time high of $554 billion in 2015 from $185 billion in 2010, according to the Obama administration’s adjusted 2011 budget.

    “It’s a slow train wreck coming and we all know it’s going to happen,” said Bret Barker, an interest-rate analyst at Los Angeles-based TCW Group Inc., which manages about $115 billion in assets. “It’s just a question of whether we want to deal with it. There are huge structural changes that have to go on with this economy.”

    The amount of marketable U.S. government debt outstanding has risen to $8.96 trillion from $5.8 trillion at the end of 2008, according to the Treasury Department. Debt-service costs will climb to 82 percent of the $757 billion shortfall projected for 2016 from about 12 percent in last year’s deficit, according to the budget projections.

    Budget Proposal

    That compares with 69 percent for Portugal, whose bonds have plummeted on speculation it may need to be bailed out by the European Union and International Monetary Fund.

    Forecasts of higher interest expenses raises the pressure on Obama to plan for trimming the deficit. The President, who has called for a five-year freeze on discretionary spending other than national security, is scheduled to release his proposed fiscal 2012 budget today as his administration and Congress negotiate boosting the $14.3 trillion debt ceiling.

    “If government debt and deficits were actually to grow at the pace envisioned, the economic and financial effects would be severe,” Federal Reserve Chairman Ben S. Bernanke told the House Budget Committee Feb. 9. “Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living.”
    Yield Forecasts

    Treasuries lost 2.67 percent last quarter, even after reinvested interest, and are down 1.54 percent this year, Bank of America Merrill Lynch index data show. Yields rose last week to an average of 2.19 percent for all maturities from 2010’s low of 1.30 percent on Nov. 4.

    The yield on benchmark 10-year Treasury note will climb to 4.25 by the end of the second quarter of 2012, from 3.63 percent last week, according to the median estimate of 51 economists and strategists surveyed by Bloomberg News. The rate was 3.64 percent at 7:50 a.m. today in New York. The economy will grow 3.2 percent in 2011, the fastest pace since 2004, according to another poll.

    “People are starting to come to the conclusion that you’ve got a self-sustaining recovery going on here,” said Thomas Girard who helps manage $133 billion in fixed income at New York Life Investment Management in New York. “When interest rates start to go back up because of the normal business cycle, debt service costs have the potential to just skyrocket. Every day that we don’t address this in a meaningful way it gets more and more dangerous.”

    ‘Kind of Disruption’

    While yields on the benchmark 10-year note are up, they remain below the average of 4.14 percent over the past decade as Europe’s debt crisis bolsters investor demand for safer assets, Bank of America Merrill Lynch index data show.

    “The market is still giving the U.S. government the benefit of the doubt,” said Eric Pellicciaro, New York-based head of global rates investments at BlackRock Inc., which manages about $3.56 trillion in assets. “What we’re concerned with is whether the budget will only be corrected after the market has tested them. Will we need some kind of disruption within the bond market before they’ll actually do anything.”

    Still, U.S. spending on debt service accounts for 1.7 percent of its GDP compared with 2.5 percent for Germany, 2.6 percent for the United Kingdom and a median of 1.2 percent for AAA rated sovereign issuers, according to a study by Standard & Poor’s published Dec. 24. Among AA rated nations, China’s ratio is 0.4 percent, while Japan’s is 2.9 percent, and for BBB rated countries, Mexico devotes 1.7 percent of its output to debt service and Brazil 5.2 percent, the report shows.
    Auction Demand

    Demand for Treasuries remains close to record levels at government debt auctions. Investors bid $3.04 for each dollar of bonds sold in the government’s $178 billion of auctions last month, the most since September, according to data compiled by Bloomberg. Indirect bidders, a group that includes foreign central banks, bought a record 71 percent, or $17 billion of the $24 billion in 10-year notes offered on Feb. 9.

    Foreign holdings of Treasuries have increased 18 percent to $4.35 trillion through November. China, the largest overseas holder, has increased its stake by 0.1 percent to $895.6 billion, and Japan, the second largest, boosted its by 14.6 percent to $877.2 billion.
    ‘Killing Itself’

    “China cannot dump Treasuries without killing itself,” said Michael Cheah, who oversees $2 billion in bonds at SunAmerica Asset Management in Jersey City, New Jersey. “They’re holding Treasuries as a means to an end,” said Cheah, who worked at the Singapore Monetary Authority from 1982 through 1999, and now teaches finance classes at New York University and at Chinese universities. “It’s part of what’s needed to promote exports.”

    At least some of the increase in interest expense is related to an effort by the Treasury to extend the average maturity of its debt when rates are relatively low by selling more long-term bonds, which have higher yields than short-term notes. The average life of the U.S. debt is 59 months, up from 49.4 months in March 2009. That was the lowest since 1984.

    The U.S. produced four budget surpluses from 1998 through 2001, the first since 1969, as the expanding economy, declining rates and a boom in stock prices combined to swell tax receipts.

    Tax cuts in 2001 and 2003, the strain of the Sept. 11 terror attacks, the cost of funding wars in Afghanistan and Iraq, the collapse in home prices and the subsequent recession and financial crisis has led to the three largest deficits in dollar terms on record, totaling $3.17 trillion the past three years.
    ‘Demonstrates Confidence’

    The U.S. needs to manage its spending decisions “in a way that demonstrates confidence to investors so we can bring down our long-term fiscal deficits, because if we don’t do that, it’s going to hurt future growth,” Treasury Secretary Timothy F. Geithner said in Washington on Feb. 9.

    The Treasury Borrowing Advisory Committee, which includes representatives from firms ranging from Goldman Sachs Group Inc. to Soros Fund Management LLC, expressed concern in the Feb. 1 report that the U.S. is exposing itself to the risk that demand erodes unless it cultivates more domestic demand.

    “A more diversified debt holder base would prepare the Treasury for a potential decline in foreign participation,” the report said.

    Foreign investors held 49.7 percent of the $8.75 trillion of public Treasury debt outstanding as of November, down from as high as 55.7 percent in April 2008 after the collapse of Bear Stearns Cos., according to Treasury data.
    Potential Demand

    The committee projects there may be $2.4 trillion in latent demand for Treasuries from banks, insurance companies and pension funds as well as individual investors. New securities with maturities as long as 100 years, as well as callable Treasuries or bonds whose principal is linked to the growth of the economy might entice potential lenders, the report said.

    “They are opening up a can of worms with the idea of all these other instruments,” said Tom di Galoma, head of U.S. rates trading at Guggenheim Partners LLC, a New York-based brokerage for institutional investors. “They should try to keep the Treasury issuance as simple as possible. The more issuance you have in particular issue, the more people will trade them -- whether it be domestic or foreign investors.”

    White House Budget Director Jacob Lew said the Obama administration’s 2012 budget would save $1.1 trillion over the next 10 years by cutting programs to rein in a deficit that may reach a record $1.5 trillion this year.
    ‘Roll-Over Risk’

    “We have to start living within our means,” Lew said yesterday on CNN’s “State of the Union” program.

    Still, about $4.5 trillion, or 63 percent of the $7.2 trillion in public Treasury coupon debt, needs to be refinanced by 2016. That gives the government a narrowing window as growing interest expense will curtail its ability to spend.

    “There is roll-over risk,” said James Caron, head of U.S. interest-rate strategy at Morgan Stanley in New York, one of 20 primary dealers that trade with the Fed. “It’s a vicious cycle.”
    We have states going BANKRUPT.

    How people continue to stick their fingers in their ears and ignore these problems is beyond me.

  2. #42
    Order Now! pure_mercury's Avatar
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    Quote Originally Posted by Tiltyred View Post
    I just walked in on this conversation and admit I haven't read the whole thread, but I just gotta say: I'm 54. I've been paying into Social Security since I was 17 years old. There had better be some fucking money there for me when I just can't do it anymore. No younger worker is paying for me. I've worked all my life and I've paid for myself.
    But younger workers ARE paying for you, right now. That money you paid in will NOT be the money paid back to you. That money went to retirees the past few decades. There's no Social Security trust fund.


    [B]Not everyone is living all that much longer. People in higher income brackets are living longer and that skews the numbers. The common folk are not living all that much longer.
    False. Life expectancy is rising faster among the wealthy, but it has increased for every class and race in the U.S. in the second half of the 20th Century. Here is a comparison between white women, white men, black women, and black men.
    http://www.cbo.gov/ftpdocs/91xx/doc9...ancy_Brief.pdf


    I have to work until I'm 67 3/4 before I will be able to collect the full percentage. I promise you I'm not going to be a hundred. I'll do good to get to 80. You want to see a revolution, talk some more about fucking me out of the money I've put in my entire life so I could have a few years without somebody telling me what to do every second of my existence.
    It's not just raising the retirement age now. People who paid in should collect later, but we need to raise it for those who are not close to retirement age now. It's crucial.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  3. #43
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Tiltyred View Post
    I just walked in on this conversation and admit I haven't read the whole thread, but I just gotta say: I'm 54. I've been paying into Social Security since I was 17 years old. There had better be some fucking money there for me when I just can't do it anymore. No younger worker is paying for me. I've worked all my life and I've paid for myself.

    Not everyone is living all that much longer. People in higher income brackets are living longer and that skews the numbers. The common folk are not living all that much longer. I have to work until I'm 67 3/4 before I will be able to collect the full percentage. I promise you I'm not going to be a hundred. I'll do good to get to 80. You want to see a revolution, talk some more about fucking me out of the money I've put in my entire life so I could have a few years without somebody telling me what to do every second of my existence.
    Social security is not a retirement account.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  4. #44
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by pure_mercury View Post
    But younger workers ARE paying for you, right now. That money you paid in will NOT be the money paid back to you. That money went to retirees the past few decades. There's no Social Security trust fund.
    Life expectancy is going to continue to increase thanks to advances in medical science (anti-aging and such). This is going to spell doom for Social security, eventually. Baby Boomers will probably get their money because they're such a large voting bloc. Tiltyred has nothing to worry about. It's Generation X and younger that is going to get screwed on this, but I've accepted this possibility. Not only will our standard of living be lower than the Baby Boomers, we'll be forced to support them, as well.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  5. #45
    Senior Member Beargryllz's Avatar
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    Quote Originally Posted by Lateralus View Post
    Life expectancy is going to continue to increase thanks to advances in medical science (anti-aging and such). This is going to spell doom for Social security, eventually. Baby Boomers will probably get their money because they're such a large voting bloc. Tiltyred has nothing to worry about. It's Generation X and younger that is going to get screwed on this, but I've accepted this possibility. Not only will our standard of living be lower than the Baby Boomers, we'll be forced to support them, as well.
    Challenge accepted

    We wouldn't want a boring legacy, would we?

  6. #46

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    Quote Originally Posted by Beargryllz View Post
    Challenge accepted

    We wouldn't want a boring legacy, would we?
    agreed

    Quote Originally Posted by pure_mercury View Post
    It's not just raising the retirement age now. People who paid in should collect later, but we need to raise it for those who are not close to retirement age now. It's crucial.
    good point

  7. #47
    Uniqueorn William K's Avatar
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    Interesting results from a poll conducted by NBC/WSJ

    Full results here : http://msnbcmedia.msn.com/i/MSNBC/Se...2-24-28-11.pdf

    Q8 puts "Jobs Creation and Economic Growth" ahead of "The deficit and Government Spending" in terms of priority
    Job creation and economic growth - 37% 1st priority, 19% 2nd priority
    The deficit and government spending - 22, 18

    The main questions about how to cut the deficit are Q25 and Q26

    Q25 Let me you read you a number of programs that could be cut significantly as a way to reduce the current federal budget deficit. For each one, please tell me if you think significantly cutting the funding for this program is totally acceptable, mostly acceptable, mostly unacceptable, or totally unacceptable as a way to help reduce the federal deficit.

    Subsidies to build new nuclear power plants - 57% acceptable/40% not acceptable
    Federal assistance to state governments - 52/45
    The EPA, that is the Environmental Protection Agency - 51/46
    Transportation and infrastructure projects - 51/46
    Scientific and medical research - 48/51
    National defense - 46/52
    Unemployment insurance - 43/55
    The Head Start pre-kindergarten program - 41/56
    College student loans - 39/59
    Heating assistance to low-income families - 34/65
    Medicaid, the federal government health care program for the poor - 32/67
    Medicare, the federal government health care program for seniors - 23/76
    K thru12 education - 22/77
    Social Security - 22/77

    Q26 Let me you read you a number of other things that might be cut or eliminated as a way to reduce the current federal budget deficit. For each one, please tell me if you would find this totally acceptable, mostly acceptable, mostly unacceptable, or totally unacceptable as a way to help reduce the federal deficit.

    Placing a surtax on federal income taxes for people earning over one million dollars a year - 81/17
    Eliminating spending on so-called earmarks for special projects and specific areas of the country - 78/17
    Eliminating funding for weapons systems the Defense Department says are not necessary - 76/22
    Eliminating tax credits for the oil and gas industries - 74/22
    Phasing out the Bush tax cuts for families earning two hundred and fifty thousand dollars or more per year - 68/29
    Freezing annual domestic spending at its current level for the next five years - 67/26
    Reducing Medicare and Social Security benefits for wealthier retirees - 62/37
    Gradually raising the Social Security retirement age to sixty-nine by the year 2075 - 56/42
    Cutting funding for the new health care law so that parts of it will not be put into effect or enforced - 51/46
    Reducing agriculture subsidies or supports to farmers and ranchers - 45/54
    Eliminating funding to Planned Parenthood for family planning and preventive health services - 45/53
    Gradually turning Medicare from a system in which the government pays for most beneficiaries’ medical bills into a program in which seniors would receive government-issued vouchers in order to purchase private health insurance - 44/50
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