Financial Problem?

That's sort of the wrong question. The real issue is, what is the best public policy to create jobs and wealth?

John

I don't think it's the wrong question! What you ask is a good question, just a different one. We need to end the entitlement mentality, 54.2 million get a SS check, then add Medicaid and Childrens Health Ins. Program, the Safety Net programs,and Federal Retires and Vets and I'll bet you near 80 million out of the 300 million people getting government checks. Someone will say but the Federal retires earned it, they don't deserve anymore than someone working in the private sector. Vets, I have some sympathy there, but I know several that retired from the military and then went back to the same job as a civilian. Somethings not right with that. Mikek

If we killed all Democrats we'd have a budget surplus ;-) ...Jim Thompson

Does that lead cup have any influence on the taste of your wine? Mikek

I only drink from the finest crystal ;-) Do you disagree with my premise? It certainly would do exactly as I say, would it not ?:-) ...Jim Thompson

You lost the social graces that you had just a few years ago. Mikek

Too bad, so sad... but I can still design circles around you, and I'll be sober in the morning and _you_ will _still_ be ugly (paraphrasing Sir Winston :-) ...Jim Thompson

When the private sector refuses to buy government debt the govt. will either become totalitarian by increasing taxes to the breaking point or they will figure out what to cut.

Some day the youngsters (under age 30) are going to figure out how incredibly rigged the system is against them and tell all the older people with the excessive benefits to go starve themselves.

I'm telling every youngster (even over 30 :-) the government is spending money for old people that they will have to take from their families to pay back. How long can the government spend 37% more than they take in tax revenue. I heard a scary scenerio, if interest rates double, (which some are predicting) 14% of every tax dollar collected will go to service the debt. Mikek

If you stupidly look at those spending categories as indivisible entities then of course there's nothing that can be done. Examine the details and you'll find more than a trillion that can be eliminated.

Yep, and eliminate all foreign aid, subsidies to business (oil and agriculture), programs that the military doesn't even want (but some in congress do want as pork...) and you'll do a lot to balance things.

Then starting GE and other large corporations at a flat rate on all earnings (US and overseas) and things start balancing better.

Finally, implement proper import duties to prevent predatory (and subsidized) imports from damaging our economy, and guess what... Things improve again.

BTW, Social Security was PRE-PAID by those who receive it, and cannot be considered an expense. Just because we allowed congress and the president to steal the money in the SS trust (TRUST!) funds doesn't make it right.

Problem is, there are quite a few sectors that HAVE TO buy government debt. The Social Security fund, for one. And banks (regulated) need to hold a certain amount of reserve in ultra safe forms (T-bills, etc.) That's what all this "quantitative easing" was about.

Secure debt instruments will always be in high demand by various sectors of the financial community. And our government will be pressured to keep them turning over.

From insurance companies to wealthy heirs with piles of cash, these people need someplace to park their money in return for a guaranteed rate of return. In part, that's what drove the mortgage-backed security mess. People with money and influence pressured the investment banking community to produce a 'perfect' instrument (in part by lobbying to keep mortgage debt as a special class of debt with stricter bankruptcy terms) with all risk engineered out. That didn't work as well as they planned. So now, it's back to the government to provide them with safe cash flow and no risk to their capital.

Pol Pot tried that, I'm not sure many people think it worked out that well for him.

Jon

That's easy. The best public policy to create jobs and wealth is to make it easier (less time, money, and overhead) to do those things.

The new guy's building all sorts of costs into employing someone, plus heaping inefficiencies on the businesses themselves, and raising his cut of their action.

The gain's quite high. A few percent extra load is more than enough to obliterate a big share of our enterprises, or send them scurrying for their lives overseas.

And vice versa.

Everyone *wants* to do business at home--for so many reasons it's so much easier and better--they simply can't.

Fixing this is easy.

-- Cheers, James Arthur

Huh? If the gvt takes in 2.2 T$ and spends 3.5 T$ then that is (3.5-2.2)/2.2=3D 60% more spending than revenues...

You seem to have heartburn with entitlements while conveniently ignoring they're funded by government managed trusts into which the receipients paid for 30-40 years.

If you have a problem with government payouts breaking the bank then take a look at your really badly governed country, and not the recipients.

The Bush administration defamed social security for the stated purpose of establishing private investment accounts.This was obviously a ploy to drum up trillions of dollars for the private investment sector and had absolutely nothing to do with looking out for anyone's interests. SS is rock solid into the foreseeable future.

And as for the sorry-assed so-called young people, seems they got where they are using a heck of lot government investment in a bloated and failed education system and programs to fund their overpriced college loans...

Wrong. In 2010 Social Security took in less than it paid out.

Dan

as long as it on the defense budget the republicans can agree to it without being called socialist ;)

-Lasse

t.

As of last year , Social Security no longer takes in more than it pays out. So it can no longer buy government debt.

Dan

=A0 =A0 =A0 =A0 =A0 =A0 =A0 =A0Dan

That's what the special securities are for...