The United States is broke; politicians decide to measure the size of their wangs

[Alpha]

I think my title sums it up. The United State's government debt ceiling is almost reached. When or if it is, what are you going to do? The government won't be able to function. Those on social security benefits will not be able to eat. You'll get a credit downgrade and the cost of future borrowing will go up.

There are three basic options.

1. Tax more.
2. Spending cuts.
3. Raise the debt ceiling.

Preferably avoid three, because it is not a sustainable solution.

The Republicans are ideologically preventing number 1. It is true that the top bracket pays a lot of tax as is in the United States, but there is plenty of room to move in the middle-upper bracket. This is a sensible option, because everyone's going to have to chip in, and better to have people chip in when they'll still be able to feed and clothe themselves afterwards.

2 is necessary, but the question is what.

The Republicans want 2 and 3. The Democrats want 1 and 2. Neither is budging, to the detriment of everything. I'd say the bigger man would compromise for the sake of ordinary people, but that's not what politicians are good at.

I say 1, 2 and a temporary smidgen of 3.

Although, right now, I'm in a good spot. The USD is rapidly losing value, and many other currencies are gaining ground in its place. The NZD reached a post-float high of USD 0.87 today. I expect the AUD to actually overtake the USD soon. Everyone's importing flat screen televisions. So thanks for that. Though it's hell for exporters just as things were starting to look good in the economy. So that sucks.

What is your solution? How serious is this? Are politicians doing an adequate job? What does this mean for you?

[che]

I was talking politics with friends a while back, and while talking I just blurted out "Democrats and Republicans aren't really all that different, though". Everyone turned to look at me, and then my ex-gf said "Brett, I think your brain went to shit just now." So I felt embarrassed, because I was high.

Looking back, I think I was onto something. None of those options seem realistic to me. If a politician is elected and does either of those, he's gonna lose votes. Not good for him, which is more important than actually solving something, because I feel like all of the U.S. is really in denial about how shitty it is right now.

I don't have a solution that can make everyone happy, as not enough people are open minded or goal-driven or focused on ****ing making something happen right now. It's like having a birthday party for your 6 year old and 10 kids will be attending, and each of them wants a different flavor of popsicle, but yellow costs 20% more than blue, and there's only gonna be 1 red and 1 purple and 30% of the kids wanted green, but they were out of green popsicles. It's all over the place.

So um, let me quote some shit I like?

“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”

-Warren Buffet

If I recall (which I can't right now), I believe some country actually tried this and it was effective. Brazil, maybe?

Also:



Feel like our "representatives" have moved on to "bigger" and "better" things.

[Alpha]

No, I think deficits are an important tool in recessions. What is less often realised is the importance of surpluses while the economy is growing. The only time the budget should be balanced is when the economy is near 0% growth.

It happens like that automatically anyway, but there are good reasons why it should be enabled, and limiting the deficit to 3% is not good policy.

In a recession, more people are unemployed. The government transfers them money from those still employed, or they rearrange expenditure from 'nice to haves' (like, idk, NASA) to ensure this is possible. This means no one starves, but also that consumption is maintained in the recession, which means other people get to keep their jobs.

There's no way that could happen without a deficit, depending on the size of the recession.

When the economy is growing, it is easy for there to be too much confidence in the economy, inflation, and bubbles in certain sectors. The government doesn't have to make as many transfers, because people are in employment, and are looking after themselves, provided wages (and in particular the minimum wage) are high enough. They usually are. Provided the government doesn't give in to calls for tax cuts and lolly scrambles, it should be building a surplus. The surplus indicates the government is taking more money from the economy than it is putting in. It's having a contractionary role. This is important, as the higher the rise in the rollercoaster, the further and faster it falls. A surplus will allow a state to withstand a small recession, and provide for a smaller deficit in larger ones.

The ability for the government to borrow in hard times is crucial, and don't let anyone say otherwise. But it must remember its responsibility to save when the sun shines. This allows it to pay back the debt at the appropriate time, while insuring the economy doesn't grow out of control.

That's my opinion anyway. But debt can reach unsustainable levels. That's what's happened now, and you'll need something new to get through it, as well as some extraordinary people. Both of those things are MIA.

[seanb]

These problems are evident worldwide and have been in Europe for the past couple of years. Somehow I'm still alive.

COMMUNISM IS OUR ONRY HOPE

[Musashiden]

Ya know, the big problem right now is what we are allowing corporations to do in regards to the tax code. Sure, the actual tax RATE for businesses is fairly high, but there are so many loopholes that allow them to bypass them entirely that what they actually pay in taxes goes from between 34-38% to about 10-15%.

For instance, a corporation with international branches can sell something to their, let's say, German branch, have them manufacture it, and sell it back, so that the profits stay in the company, but are kept overseas. The current tax code legislation allows for this. If a company moves its profits overseas, they are not required to pay taxes on it. They are also temporarily exempt from taxation by "offshoring" profits in, for example, now notorious Cayman Island accounts. They ARE required to pay tax when they extract these funds, but they are not required to until then. Plus, lest we forget the bountiful tax holidays the government gives out in hopes of having that money be put to use in job creation... yeah, I don't see a single job coming from the last one, and the one they are proposing now won't create any either.

We don't need to raise taxes on the wealthy, we just need to eliminate their means of escaping their responsibility so dutifully given by the Republicans. I'm in no way saying Democrats are paragons of finance, as most of them have been bought and sold too, but the Republicans are going one step further and fellating them.

[OceanEyes28]

My dog just woke me up a little too early, so I won't get too into what I think should happen (because right now I am more focused on what smoothie I want)... but how it affects me...

I would be okay with cutting some medicare as long as large corporations took on their share of the burden. My father is a geriatric psychiatrist (he helps old people). He is a doctor, but we have never been rich. I mean, we're middle class to be sure, but we've never been able to live like, say, a heart surgeon would. And that's always been fine with us, but the more medicare gets cut, the less he gets paid. If at all. Most of his paycheck comes from being reimbursed by medicare or social security. If that gets cut, he just doesn't get paid. He works 7 days a week and he works hard (he's self-employed). It's a shame. He is stressed all the time, he has started taking blood pressure medication.. he's 63.

So while I think about the overall implications of how this works out, and worry over them... this whole issue is very personal to me. My brother is still in college, and I don't know how we'll pay for it.

[Clint]

I have a solution. Apparently the government isn't working anymore. The system that used to run the government is failing the entire country. Perhaps the size of the country is far too big to sustain a stable economy.

Anyway, here's what they should do. Firstly, scrap the federal government. Seriously, who's going to miss it? **** Washington. Put the power back into the states. Secondly, dissolve the Federal Reserve, GM, and other companies that don't do anything but waste money. In their place, create new businesses that aren't pieces of shit. Thirdly, stop focusing so much on international affairs. America can't solve the world's problems if it can't even solve it's own.

Also, politicians, especially the president, shouldn't accept large paychecks, and should have to pay for their own health care, just like everybody else.

[Furore]

I expect the AUD to actually overtake the USD soon. Everyone's importing flat screen televisions. So thanks for that. Though it's hell for exporters just as things were starting to look good in the economy. So that sucks.

What is your solution? How serious is this? Are politicians doing an adequate job? What does this mean for you?

Dude, the AUD has been stronger then the USD for months now. Most online prices overseas are in USD and both PayPal and the Android store have me paying 80-95 cents AU for every US dollar.

My 'solution' is to buy everything I want from the US cheap and hope their economy bombing hardcore afterwards won't absolutely rape Australia's economy for a long time. The politicians (and the system moreso) are hopeless, but what's new?

[Musashiden]

**** Washington. Put the power back into the states. Secondly, dissolve the Federal Reserve, GM, and other companies that don't do anything but waste money. In their place, create new businesses that aren't pieces of shit. Thirdly, stop focusing so much on international affairs. America can't solve the world's problems if it can't even solve it's own.

Also, politicians, especially the president, shouldn't accept large paychecks, and should have to pay for their own health care, just like everybody else.

Quoted for truth.

The Federal Reserve especially needs to go. We need to go back to a dollar backed by gold. What we have now is fiat money created out of debt.

[Pete]

All we need to do is go to war with Germany again. It worked last time!

[Clint]

All we need to do is go to war with Germany again. It worked last time!

We're already at war. It would be easier just to use the same job creating tactics used during World War II to create a financially stable economy to support the war effort then to start a war with Germany, but I get where you're coming from.

Why don't we just do that? Do politicians not know relatively modern history? It was only, like, 70 years ago.

[Alpha]

So this has been 'solved' now.

I think The Onion got it right, with a speech from Obama thanking "the Democrats and their Democrat counterparts" for tough decisions on 'both sides'.

Seriously? This was no compromise. No new taxes? That is not a balanced approach to solving this issue, and is exactly why Standard and Poor's gave the historic credit downgrade despite the 'compromise'.

[Acheron]

So this has been 'solved' now.

I think The Onion got it right, with a speech from Obama thanking "the Democrats and their Democrat counterparts" for tough decisions on 'both sides'.

Seriously? This was no compromise. No new taxes? That is not a balanced approach to solving this issue, and is exactly why Standard and Poor's gave the historic credit downgrade despite the 'compromise'.

And it's only going to continue to get worse as time goes on. American politics have become so twisted and so insane it's almost impossible for a reasonable voice to be heard. I'm stationed in Germany and I get asked by many German nationals, "what's the deal with Washington?" I have yet to find a reasonable answer for them.

Compromise? I don't think we'll see a productive one in the near future. Democrats and Republicans are so polarized against each other that they will not see reason until it manifests itself as the rubble of a former great society. And don't even get me started on the Tea Party....