Financial Problem?

But that may change. And even in the interim, the SS fund holds quite a bit of gov't paper. All of which matures and needs to be rolled over.*

*Until such time as the fund needs to be drawn down to pay SS recipients. Then, the SS admin will come to the Treasurey with t-bills and begin to cash them in. That cash will have to come from someplace. Either a budget surplus (more revenue than expenditures) or the printing presses. We might be able to ignore the Chinese when they come to cash in the t-bills. But not the retirees (who vote).

--
Paul Hovnanian     mailto:Paul@Hovnanian.com
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Hit any user to continue.

Medicare is not self-supporting. Recipients receive roughly 3x benefits for every dollar they pay in.

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It--government health care--is also one of our biggest expenses, and slated to rise the fastest.

-- Cheers, James Arthur

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

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It's really pretty simple.

1) The gov't is in debt. It doesn't have a giant mattress full of money it saved for you. Not for SS, not for anything else. 2) OTOH, it is not obliged to pay anyone any particular sum of SS or Medicare, etc. Benefits are arbitrary, decided by the government each year. There is no guarantee. 3) Future payments will come directly from future revenue (taxes), just as today. 4) Future benefits will be whatever the taxpayers can provide, plus what the politicians can borrow. 5) If there's less money (or less available to borrow), benefits will be decreased.

-- Cheers, James Arthur

Perhaps not:

Money shot ( Geithner reading the 14th amendment ): "The validity of the public debt of the United States, authorized by law, including debts incurred for the payments of pension and bounties for services in suppressing insurrection or rebellion' -- this is the important thing -- 'shall not be questioned," Geithner read.

Not necessarily. *Present* payments do not all come from present revenue - that's what's bothering people.

That's simply not been shown.

The real problem here is that people appear to be *imagining* scenarios in which the ability to borrow is constrained.

-- Les Cargill

How are they rationalize calling the attacks on the Middle East "defense?"

Am I really safer while the administration does its damnedest to piss off the whole rest of the world?

Thanks, Rich

The US funds half of NATO. That alone is a problem.

Much like corporate America, there are way too many generals in the DoD. Nothing is as bloated as the military. Even BRAC was a clucterfuck of politics, shutdown down bases in regions that vote Blue to relocate the operations to the Red states such as NC.

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Last BRAC was a farce. DoD is still bloated with cold war era infrastructure that is TOTALLY useless, like nearly ALL the in-house laboratories (so-called)- cesspools that produce absolutely nothing- there are dozens of them and they cost $250M-$1B per copy to keep afloat- a complete waste of money.

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Despite Geithner's odd posturing, there's no conflict. These "benefits" are not debt and they are not "owed" in any legal sense. There's no obligation under the 14th.

(No one has a signed contract from Congress promising terms, conditions, time, and amount of benefits in exchange for specified payments. And, if there were such a contract they'd simply change it ex post facto, raising and lowering benefits as they pleased.)

It's also not true that the Treasury must default on its debt payments. They've got $2.2T in revenue pouring in, more than 5x what they need to make the payments on our debt and prevent default indefinitely. Geithner knows that.

(for example, 3% of 14.4T is $400B)

I meant that today's payments are also coming, in part, from future revenue, just like today. IOW, we're borrowing to pay the benefits.

That notion puzzles me--how could it be otherwise?

-- Cheers, James Arthur

The real problem is not that they would default on their payments, it is that they would default on their PAYCHECKS! They basically have a budget that says that they will spend half again as much as their income, and if they can't continuously borrow money, they can't spend that much. If they can't spend that much, SOMEONE will have to not get their paychecks. They can't cut out the paychecks to themselves, of course, so they have to decide whom to stiff. It makes better political theatre to cut something important, like interest payments on the debt, SS, or the military, instead of cutting unnecessary beauracracies that no one has ever heard of, so that is where they will cut. Same as the states always cut police and teachers (not administrators!) as no one would complain otherwise...

Charlie

The US is defunct, all the natural resources are gone and the dump is broke. Let'em fanatsize about the people being the greatest resource- that and a dollar will get them a cup of coffee. Just get ready for a third world living standard.

What resources are gone? Even gold mining is coming back.

We have a lot of oil and huge amounts of coal and natural gas. Lots of water, too.

But the trump card is that we have, and can make a lot more, food.

John

There is the matter that USA greatly decreased its exports of grains, especially corn, due to a major Federal subsidy program for biofuel made specifically from home-grown corn.

As I hear it, switchgrass gets greatly better numbers than corn gets, needs less irrigation than corn needs, and grows in areas where corn does not. And, people don't eat switchgrass, and some livestock don't eat switchgrass.

The way it appears to me, USA has a problematic corn lobby and lack of a significant switchgrass lobby.

--
 - Don Klipstein (don@donklipstein.com)

Didn't Congress recently end the ethanol subsidy?

No matter: the price of corn keeps going up, so it will be more valuable to sell as food.

John

Seriously- even a huge domestic oil find supplies the market for a only few days, and over 90% of the coal output is used for domestic electricity production. Your food situation is changing all the time, and it is not for the better. There are areas of once major food production in places like Iowa, Indiana, and Ohio totally depleted of agricultural grade topsoil, for one example. Then there is this pesky global warming throwing a wrench in the works.

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According to Wired magazine, the part of the corn crop used for ethanol is not used for food.

"Myth No. 2: Ethanol production reduces our food supply.

False. Only 1 percent of all corn grown in this country is eaten by humans. The rest is No. 2 yellow field corn, which is indigestible to humans and used in animal feed, food supplements and ethanol.

Specifically, a bushel of corn used for ethanol produces 1.5 pounds of corn oil, 17.5 pounds of high-protein feed called DDGS, 2.6 pounds of corn meal and 31.5 pounds of starch. The starch can be converted to sweeteners or used to produce 2.8 gallons of ethanol. DDGS displaces whole corn and some soybeans traditionally used in animal feed. The United States is a large exporter of DDGS to China and other countries.

Additionally, the food-versus-fuel debate has spurred significant research and development of second-generation biofuels like cellulosic ethanol that do not use food crops. Cellulosic ethanol is made from the =93woody=94 structural material in plants that is unusable by humans. Unlike food crops, ethanol crops and cellulosic ethanol crops can grow in any soil that will sustain grass.

Researchers, including Argonne, are investigating using marginal land to grow ethanol crops. Studies from the U.S. Department of Energy suggest the United States has enough non-edible biomass to produce approximately 30 percent of our total transportation fuel requirements by 2030. That could go a long way toward easing our reliance on imported petroleum.

Taken together, the increase in crop yield and the use of marginal lands can enable us to produce food and fuels."

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You're not reading that right, that 1% is whole corn kernels, sweet corn. See Rising corn prices are already affecting everything from the cost of tortillas in Mexico City to the cost of producing eggs in the United States.

The corn that feeds animals feeds us. And a lot of it makes corn syrup, which we consume. And farmers are versatile about what they plant; when corn hits $10 a bushel, they will plant more corn, whichever variety pays the best.

My original point was that a prime US asset is its agricultural capacity. You seem to agree.

John

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Look at the author of the Wired article

forrest-jehlik/

- godammed half-assed engineer with an agenda- too stupid to know he doesn't have a clue. Then this other piece of clueless crap

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Wired is piece of crap...

Maybe we can produce food with our social networking sites...

Never mind several important facts...

(1) Ethanol from sugar cane is vastly cheaper, but we heavily tariff Brazil to keep them from competing... AND heavily subsidize our own corn method.

(2) Whole corn is the only way to get good beef steaks... NOT from chemical equivalents.

(3) Tried to buy yellow corn-on-the-cob recently? I can't find it in the stores here, only some white taste-free shit fit only for Democrat consumption ;-) ...Jim Thompson

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| James E.Thompson, CTO                            |    mens     |
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