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Thread: The sky has finally fallen...
07-29-2011, 07:08 PM #443
We all won't be talking about this deficit, if US is failed to lift debt ceiling and S&P slapped a downgrade on US bond. Reports came up yesterday US GDP grew only 1.7% annual basis and any downgrade by S&P will surely bring that number below 1. Just look at how much the Dow dipped since Monday, only from having no clue on what will happen. I think bringing the budget into balance or surplus is the easier part, the harder part for US lies on the political part of the equation and having this debt ceiling in the 1st place. Why don't use for example GDP % term? So at least it's an independent bench mark rather than for hundreds of time, time have to be wasted debating and approving the ceiling.
07-30-2011, 04:22 AM #444
- As for raising taxes, a lot of people incl. those from GOP wouldn't mind tax increase. But there must be more govt. accountability on the tax money. Still issue at hand is how to minimize and reduce deficit and debt, and without any substantive/real spending cuts (meaning change in entitlements and other social programs), raising taxes wouldn't make much difference.
- Food stamp was created during Great Depression as a way for govt. to help those in need. However, nowadays, people are taking advantage of it; esp. drug addicts and it's become more like a tax rip-off..Coupons for "real" foods are available but they're generally provided by the stores/supermarkets themselves..
- As for healthcare system..i think we've discussed it to near death...I'm still a believer that healthcare shouldn't even be handled by the govt. (just look at the budget for Medicare) and now with the new obamacare law, it's gonna get even bigger..Simply govt. are the worse money manager..
- As for military budget, a lot of it goes into pay and benefit for personnel, on top of of the operations. If anything, a lot of the modernization program of the U.S. military has been skipped for pretty much a decade. Further, the Reagan military buildup created a cushion that allowed defense investment to be deferred in the 1990s and even in this decade while military operations escalated. Personally, i wouldn't mind most of my tax money to be given to the military dept.
- As for govt. giving money to the poor and needy, that might sound noble and give an impression of a "good heart". But i'm sure you've heard of the phrase "the poor will always be with you"? Check this out, The Department of Housing and Urban Development counted 1900 homeless shelters in 1984. By 1988, there were 5400. Why? Because, some suggest, the supply created a demand. U.S. News and World Report also mentioned people are now kicking out extended family or single daughters with children—or the latter are choosing to leave an adequate home—precisely because society will provide them free housing.
Now, going back to this debt-ceiling issue, the deadlock now seems to be between one side wanting a smaller debt-ceiling increase ($900b) and smaller spending cuts ($917b) vs. one side wanting a bigger debt-ceiling increase ($2.7t) and bigger spending cuts ($2.2t); both with no tax increase and no cuts to entitlements..One side a big proponent of tax and spend and the other side proponent of low tax and minimal little spending; big govt. vs. small govt.
Last edited by ctjcad; 07-30-2011 at 04:31 AM.
07-30-2011, 04:36 AM #445
Why We DON’T Need A Debt Ceiling?
**Taken from James Surowiecki’s latest article in the New Yorker entitled “SMASH THE CEILING**
In the past few years, the U.S. economy has been beset by the subprime meltdown, skyrocketing oil prices, the Eurozone debt crisis, and even the Tohoku earthquake. Now it’s staring at a new problem—a failure to raise the debt ceiling, which would almost certainly throw the economy back into recession. Unlike those other problems, however, this one would be wholly of our own making. If the economy suffers as a result, it’ll be what a soccer fan might call the biggest own goal in history.
The truth is that the United States doesn’t need, and shouldn’t have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There’s no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn’t risk economic chaos—namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn’t raised, we’ll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he’ll end up violating the debt ceiling.
As it happens, the debt ceiling, which was adopted in 1917, did have a purpose once—it was a way for Congress to keep the President accountable. Congress used to exercise only loose control over the government budget, and the President was able to borrow money and spend money with little legislative oversight. But this hasn’t been the case since 1974; Congress now passes comprehensive budget resolutions that detail exactly how the government will tax and spend, and the Treasury Department borrows only the money that Congress allows it to. (It’s why TARP, for instance, required Congress to pass a law authorizing the Treasury to act.) This makes the debt ceiling an anachronism. These days, the debt limit actually makes the President less accountable to Congress, not more: if the ceiling isn’t raised, it’s President Obama who will be deciding which bills get paid and which don’t, with no say from Congress.
One argument you hear for having a debt ceiling is that it’s useful as what the political theorist Jon Elster calls a “precommitment device”—a way of keeping ourselves from acting recklessly in the future, like Ulysses protecting himself from the Sirens by having himself bound to the mast. As precommitment devices go, however, the debt limit is both too weak and too strong. It’s too weak because Congress can simply vote to lift it, as it has done more than seventy times in the past fifty years. But it’s too strong because its negative consequences (default, higher interest rates, financial turmoil) are disastrously out of proportion to the behavior it’s trying to regulate. For the U.S. to default now, when investors are happily lending it money at exceedingly reasonable rates, would be akin to shooting yourself in the head for failing to follow your diet.
Advocates of the ceiling like the way it turns the national debt into front-page news, focussing the minds of voters and politicians; they think it fosters accountability, straight talk, transparency. In reality, debt-ceiling votes merely perpetuate the illusion that balancing the budget is easy. That’s why politicians like the debt ceiling: it allows them to rail against borrowing more money (which voters hate) without having to vote to cut any specific programs or raise taxes (which voters also hate).
You might think that there are benefits to putting negotiators under the gun. But, as the Dutch psychologist Carsten de Dreu has shown, time pressure tends to close minds, not open them. Under time pressure, negotiators tend to rely more on stereotypes and cognitive shortcuts. They don’t consider as wide a range of alternatives, and are more likely to jump to conclusions based on scanty evidence. Time pressure also reduces the chances that an agreement will be what psychologists call “integrative”—taking everyone’s interests and values into account.
In fact, by turning dealmaking into a game of chicken, the debt ceiling favors fanaticism. As the economist Thomas Schelling showed many years ago, “It does not always help to be, or to be believed to be, fully rational, coolheaded, and in control of oneself” when it comes to brinksmanship. It doesn’t, in short, help to be President Obama. That may be why all the deals that have been taken seriously this season rely much more heavily on spending cuts than on tax increases: the deals represent Republican priorities, because the Republicans seem to be more willing than the Democrats to let the country default. It’s not pure craziness that’s rewarded—when some congressional Tea Partiers said that they wouldn’t vote to raise the ceiling under any circumstances, they became irrelevant to the conversation, since no compromise would make them happy. But recklessness does equal power: that’s why Eric Cantor, the House Majority Leader, and John Boehner, the Speaker of the House, have implied that they’re willing to go over the cliff (in part by suggesting that their fellow party members will force them to) but also that they can be persuaded to do the right thing.
We may nonetheless end up with a halfway sensible budget deal. But that would be the result of luck, not design. Instead of figuring out ways to raise the debt ceiling, we should simply go ahead and abolish it. The U.S. economy has plenty of real problems to deal with. We shouldn’t have to wrestle with ones we’ve created for ourselves.
08-01-2011, 02:45 AM #446
told you everything is gonna be alright... wasted those typing times and stress.. lol. relax...
08-01-2011, 08:39 AM #447
I see a band aid to a bullet round. It stop the bleeding out now. The bullet is still in side and bleeding inside.
Last edited by silentheart; 08-01-2011 at 08:43 AM.
08-01-2011, 11:10 AM #448
Oh, one more thing. Broke Omama is a such lair. He said he is fine as one term president. If that is the case, why not just fight it out and do the right thing? Make it right on health care, not just a rushed bill. Do it right and cut the spending and expire the Bush cut? Support the Arab Spring up rise the right way from day one?
Everything he did is half @$$ and all he want is to be re-elected.
We are screwed again...
08-04-2011, 12:18 PM #449
The sky seems to be falling today. But the VIX index has hardly budged. So it's either smart money isn't too worried to bother protecting their interests, or they have already liquidated and are waiting on the sidelines.
08-04-2011, 12:22 PM #450
Extendicare REIT (TSX) falls 18.66% in a single day after the US government reduces funding to its long-term healthcare programs. This is more than a year after analysts had anticipated it happening. It's all a matter of timing the event.
08-04-2011, 02:02 PM #451
Here we go again!!!!
08-04-2011, 02:49 PM #452
08-04-2011, 03:03 PM #453
People, where is the bottom? How much further for the fall?
08-04-2011, 03:05 PM #454
Looks like they finally capitulated to fear.
There will be much breast beating tomorrow, when the jobs figures are released, either from those who sold today, or those who didn't.
While this is reminiscent of last year's flash crash, the selling looks more sustained.
Can't believe I actually went in just now. I must be reckless or insane!
Echoes of 2008, or worse?
08-04-2011, 03:08 PM #455
08-04-2011, 03:12 PM #456
No, echo of great depression? Same pattern, there was a rebound then the dive.
08-04-2011, 03:17 PM #457
08-04-2011, 03:22 PM #458
08-04-2011, 03:28 PM #459