The Deficit

[Cyrus the virus]

So while I claim to not give a crap about American politics, I can't say I don't find them a bit fascinating from time to time. When I'm home, I have CNN on in the background most of the time - and while I know that CNN has its own biases and leanings, it keeps me a bit up to date on things.

So explain something to me... When did all this deficit talk start up again? I mean it's always a popular topic among people who talk on TV for a living, but it seems to me to be an odd thing to focus on when there are other, seemingly more important issues to be addressed. I guess you can't just tackle things one at a time when it comes to a big scale like national leadership.

What do you think about the deficit the US has? Does it matter to you? What's the significance? Do you have potential solutions?

In Canada we recently re-elected the (fucking) Conservatives. I am not hugely into politics, but I believe that they were responsible for erasing a surplus we once had and recently got our deficit up to its all-time high. Mostly because of the recession, though, and we came out of it very well compared to other countries of similar economic level. JUST THOUGHT ID MENTION CANADA

[Karsh]

I guess the only thing that concerns me is that it's gone up almost a trillion dollars in one year while Obama has been in office. When I think of the debt, I just think of this gigantic monster that will never go away.

[Less Than Liz]

So explain something to me... When did all this deficit talk start up again?When Republicans threatened to let us default rather than raise the debt ceiling. It was in the limelight earlier into Obama's presidency during the HCR debate because Republicans were suddenly concerned about spending money after burning a shitload on an offensive campaign* and refusing to budge on defense spending.

I have my own qualms with Democrats but right now the Republicans seem way more interested in being stubborn to prove a point to their, quite frankly, retarded Tea Party constituents than giving any actual shit about fiscal responsibility.

*Today's problems are "kinetic actions."

[Cyrus the virus]

Liz talks good

[Karsh]

She does, indeed, like to do that.

[Phakiel]

Liz talks good

Igby, Igby, well, she talks well.

[Shifty]

American politics = broken

No compromise.. no fix. We're all fucked.

I'd run my mouth off, but I'd only get pissed off and stressed out. Plus I don't understand the scope of politics really; just what I see on TV.. which is more bullshitting than anything.

[Cyrus the virus]

I just find it fascinating because in terms of importance (and maybe this is my evil socialist Canadian self manifesting), for me it goes:

Citizen health/Means to get medical attention --> Education --> Industry --> Money stuffs

Of course there are issues with that. Creating a robust medical system where everyone has access is hard to pay for (leading to high taxes), creates long waits for important surgeries, and drives doctors and nurses to other places where they get paid a lot more. If Canada and the U.S. strove to create great (public) schools for the everyday student, same issue with taxes.

For me, I like the way Canada is. I have no problem paying more taxes so that our healthcare can work the way it does, but that's just the way I am. The fact that Jim Bob can go to the hospital and get looked at, x-rayed, operated on, prescribed medication, whatever, as long as he has an address, makes me feel good. He doesn't need private insurance because the government is run in such a way that he doesn't.

I also like that my tuition is less than $5,000 a year. That's a bit of a special case because I'm in an area that has some of the lowest tuition rates in all of North America, I believe. I always thought that tens of thousands of debt from school is a bit absurd, especially when you dig a bit and find out where all of that money goes. Even at my cheap university, we spend a portion of everyone's tuition on dumbass orientation concerts which featured, at their height, K-OS.

But you know, Canada has its issues and all. It's not for everyone.

I think education's a right up to a certain point and certainly we should pay for anything post-secondary, but what I pay right now doesn't require me to take any loans and I like that. I think it's the way things should be in a supposedly first-world country. It's supporting your own society and culture. Access to education alone would create more jobs and competition, which is only a good thing.

Of course it also increases the amount of douchey assholes downtown on a Friday night.

[Less Than Liz]

I don't think you understand. The obvious response to this is that we need money stuffs to pay for all of those services. The less obvious, but more important response, is that we're in big shit further down the road if we don't at least amend some of these services. Here's why (http://www.wtfnoway.com/) (and it uses pictures.)

[Blue]

One thing I keep seeing and hearing is about the gap between the top .01 percent, or it could be 1%, and the rest of the population and basically the rich keep getting richer while the middle class is slowly being eroded away. A lot of people think that getting rid of tax cuts for the rich would solve a lot of our problems.

So, is that the key? What about spending on the military? Are we spending too much on that?

[Poofy]

i blame that black guy evry1 elected

[Shifty]

i blame that black guy evry1 elected

I blame Abe Lincoln for giving him the chance.

teehee

But back to the topic at hand. The Canadian healthcare system works for Canada because their population is a fraction of the USA (like 10%). That type of healthcare will never work in this country. We're just too damn big (and literally fat). Plus, I personally don't want a chunk of my taxes paying for lazy people to keep on living.. or immigrants. See, I'm getting pissed now.

[Cyrus the virus]

Oooo shifty has a post bar thing.

Good point about the population difference.

This is what I don't get, though:
I personally don't want a chunk of my taxes paying for lazy people to keep on living.. or immigrants.

Like I get that at a base level, the idea is an irritating one. But I mean, for every 'lazy fat person' getting free treatment, there's a kid with a family who's too poor to otherwise get good treatment without putting his family in debt for 10 years or more.

The whole immigration thing is just a whoooole other shebang. Except for immigrants finding jobs where they're paid less than minimum wage and thus taking jobs away from Americans (something that's the employers fault, anyway), why do people care about immigrants entering their country? Chances are that immigrant now has a chance at a decent life.

I guess my whole perspective on this sort of thing is "Hey, I'm not the only person I want to have a good life" and I get the impression that many others think the opposite.

[Shifty]

Once the new healthcare system is put in place, I'll be moved up a tax bracket more than likely. This is because the half of my health insurance that is paid by my employer will soon count as income. This is just something that stood out to me. I don't know what all will roll in by 2014. I just know I'll be paying more in the long run.

Immigration is a tricky subject and I do believe the hard working non-Americans deserve a good life. But with a good chunk of the immigrants comes criminal activity. Criminal activity costs our state governments and their people money. Money that's involved with jails, property damage, gun and drug control, and tacos. Then comes future overpopulation and more tacos.

Personally, I think good immigration control lies in the hands of the highly trained, war-hardened veterans in the sand land. Bring 'em home and put them on the borders. If we're going to spend billions in defense, let's put it towards a cause that's achievable; protecting our borders.

[Less Than Liz]

I don't like our most recent HCR because it was a shitty compromise that amounts to yet another government program where the young subsidize the old. Literally, that's all the individual mandate is for. The legislation insures more people and prevents them from being denied insurance coverage because of preexisting conditions, but success of the reform requires uninsured people – usually younger and healthier – join the national risk pool. This will help lower the costs of health insurance premiums nationally, but at the expense of a generation already burdened by paying for social security (with little to no likelihood that they will ever benefit from the program come their retirement), medicare, and nevermind peripheral issues like loan payments in a terrible economy (the root cause of which are poor, shortsighted policies put in place by the generation for whom we are paying.)

So, no, I don't think we can discuss the merits of this legislation in the context of a Canadian healthcare system because they are horses of an entirely different color. As you can see, I am sitting here engaging in the interstate commerce of not buying doughnuts.

Let me preface my next statement by saying I think a public option could be feasible in the United States. Having said that, I don't think we should assume that, since the Canadian system works in Canada, we could simply copy and paste it in America, and consequently Americans have no reason to be wary of implementation of it here. Any kind of universal healthcare system put into place here needs to take into account the vast number of people in the United States; our differing and potentially overlapping governmental programs, and; the unique federalist setup of our government and corresponding Constitution.

Oh, and I don't really worry about immigrants. Statistics have shown that it costs way fucking more to ramp up the defense of our borders than any current and predicted use of governmental services by illegal immigrants. Immigrants - illegal or otherwise - come here and demand goods and services, consequently causing our economy to grow. They gravitate towards unskilled jobs that most Americans aren't even looking to do - not because they're lazy or suck, but because we're just transitioning to an information economy and our specializations lean that way as a consequence. Thus immigrants are a boon, not a bane. I could definitely go for less offensive wars, though -- I mean, military conflicts. Er, "kinetic actions." Whatever we're calling them to justify less Congressional involvement.

[Syrus]

Current problems with the U.S. debt and deficits are based on many concepts, so to pin the tail at any one position creates more difficulties then it solves because no single problem in the deficit has anyone single root cause, at least micro-economically. However, if we draw ourselves away from the closed system of just the Healthcare industry, or just the military, and look at the far more significant Banking industry in the most Macroeconomic of ways a couple obvious things appear for us.

1. U.S. Currency has no real value, only value based on debt. I.E. The Government says okay we OWE 20 Trillion dollars, since we are the government of The United States, the biggest financial power house of the world, they tell the bankers, "Yo dawg we're good for it, and if we're not we will put it on the back of the tax payer." So they write a bond for 20 trillion and give it to the banks as a lien against which they can loan out that amount. So the government owes them 20 trillion, but has converted that Debt into an asset for the bank (and thusly themselves).

2. The American Monetary System is based on Debt, but it's currency is completely Fiat in nature. Fiat Money is money that has no hard backing, that is to say it isn't backed by Gold or Silver, or even some other commodity. The Gold Standard regulates our currency to the value of silver or gold on the market. This doesn't mean that if more gold appears the dollar is more valuable. (It can result like this but that is not the reason) Infact, the two are counter balanced and will remain, or struggle to remain in balance. If foreign investors prefer the currency, gold can flock to a countries coffers very quickly, as it did in post-war of 1812 America. However, the currency is based on debt, and the money is Fiat because of how banks operate. For every Million dollars handed to a bank they can loan 9x that amount, so 9 Million. In our scenario the government just rolled 20 trillion over into a Bond, gave it to a bank, so that bank can now loan 180 Trillion, Of which 160 trillion only exists in an accounting entry.

3. Inflation Sells us Out. This newly created 160 Trillion has to come from somewhere, but since most of the money stays with the bank, gets redeposited, or sent to other companys under the banks control, they don't really have to have it, they can just push currency here or there, but never really need to have that much on hand. If a bank had to have a 100% reserve ratio (that is, they have to be able to pay off any and all debts at any time completely and are not allowed to loan beyond what they have the ability to pay for) there would be no Fiat money on the market, however they continue to be unregulated in that respect and produce more and more fiat money.

Fiat money lends to inflation. Inflation is a confusing word for a lot of people, at least in regard to how it occurs.

Get ready for the knowledge... oh yeah....oh shit, its coming.

Inflation IS A HIDDEN TAX. It Is Created by the FEDERAL RESERVE, FIAT MONEY, and CENTRALIZED BANKING. The Fed creates one of these bonds, gives it to the Bank who loans it out by a factor of 9. This money leaves the bank and or country to sit in an account somewhere. At some point, the Fed changes interest rate and reserve ratios to either increase the amount of lending (Expand the money supply) or decrease it (contract the money supply). This causes our boom and bust cycles in the name of trying to control them. This is a mix of Milton and Keynesian economics, with the focus being on the Fabian Socialist concepts of Keynes. When money comes back to the country in the form of super huge loan defaults or payments (doesn't matter, you're fucked either way) the money floods into the supply and raises prices.

So when Obama says, we're signing a 60 trillion dollar bailout, and everyone gets pissed about their tax dollars, they're really misplacing their anger - By design. The President takes the heat or the glory for the action, but never engineered it in the first place, the power and money brokers at play did, and the public is to confused to realize the Fed fucked them. Their anger is misplaced because, their taxes do very little in regards to running the government and probably only make up a 1/3rd of our interest payment. (Yes I am Implying that even with all of Americas Taxes it's still barely even our interest payment.) So if all the taxes collected off our income only pays for the interest payment, what pays for the rest?

More Debt.

Then the debt is compounded and called New Debt

New debt produces New Spending which makes New Profits, which makes the system Seem Okay but it remains fundamentally unstable.


Solutions:

There are none, we are too far in over our heads to have any single action solution to this problem.

Starters: Community organization and education about Central Banking and how it robs people via inflation and pro-oligarchical monopoly actions.

Return to a metal based economy. Gold and Silver all the way. Silver for your people, gold for your banks. It's been suggested that Kennedy was assassinated for producing a very large quantity of Silver notes that were backed outside of the federal reserve. Bankers didn't like being undermined.

Complete abolishment of the central bank, the Federal Reserve.



I never really answered the question. What you see right now with the "Debt Crisis" is a classic maneuver that gets played on us all. Its a Bailout cycle, and I'm preparing to watch the government bail itself out. I expect to see a doubling of our current debt as our debt is rolled over, the interest payment is reduced but it's life is extended, and our government is given new money to fuck around with, but also continue to pay off it's old debts with. Banks don't want their super massive loans paid, they just want to continue receiving the interest, because that is their profit, and they never had the money they originally loaned in the first place because it was a simple checkbook entry.

Don't buy the debt ceiling, it's a masquerade for another round of super inflation.

[Syrus]

Government intrusion in the market, and in your social services is not going to help you. The Public Option is THE WRONG OPTION.

Look at the DMV, they don't fucking do anything and it still takes 4 hours to get out of there. Bureaucratic Red tape is a real concept that really happens.

Don't be the stupid ass who gets fooled by "This time it'll be different" It won't be, and you're going to be the asshole for it. The solution is never more government, its always more freedom.

[Poofy]

Damn Syrus, you couldn't possibly be more wrong.




Loljk well done.

:|

[Less Than Liz]

Someone's been brushing up on his Friedman. Possibly his Paul.

Weirdly enough, I have never had a long wait at the DMV, save for the wait to take my permit test, and that wasn't even the DMV really (though I don't disagree entirely with the point you were trying to make with the example.)

[Syrus]

More Austrian ecnonomic school

Let's not get off topic but my DMV isn't incredibly busy but it still takes to long to do the simplest shit.

[Syrus]

More Austrian ecnonomic school

Let's not get off topic but my DMV isn't incredibly busy but it still takes to long to do the simplest shit.

Don't be mislead by massive government spending programs like NASA or all these mutlibillion alphabet soup organizations. The money is put there in massive quantities for the purpose of graft and economic plundering of the middle class. The loans produce profit for the banks, the organization does very little, but the recurring interest payment stands only to oppress you in the future.

[Zuhzuhzombie!!]

America is under a dictatorship of two parties of oligarchs. They're only in power because of who they funnel money to. The country itself won't default unless the Republicans stick steadfast to the beliefs of the minority Tea Party. Neither party wants a default because it will damage their primary benefactors.


Conservatism in this country doesn't work because it's policies always disenfranchise anyone other than those who control Capital or a majority of wealth. "Liberalism" in this country doesn't work because they are absolutely uncompromising when it comes to getting the public sectors "corporate culture" under control. For example, I am pro union and I am anti union. I was against Scott Walker's union busting rhetoric and legislation. I was also against the Wisconsin unions because what they were asking for was well beyond what the private sector middle class would ever hope to receive in compensation and unions receive it at the behest of Wisconsin's middle class private sector. The wealthy citizens and corporations in Wisconsin had the means to circumvent tax law to avoid it.

Liberalism, above, is in quotes because both our Democrat and Republican party are examples of Liberal governments in the classical sense. Both want a level of governmental control and freedom that is largely constructed on what their voting blocks identify with.

[Syrus]

Some would say that the problem inherent in most of modern banking is the concepts related to Fractional Reserve Banking. What do you guys know about the subject?

Economics is my first love.

[Syrus]

Well the thing is, I bet if you watch closely that the debt will be defaulted on in some respect. IT WILL be called something else. Parties will convene via committee with bankers and will call it a debt roll over. Consolidation, or a credit line. Maybe something new like credit swapping or something but it all means they've been given new money that they created.

[Zuhzuhzombie!!]

What we'll see is a debt limit raise but nothing done to address the debt long term. Fractional Reserve Banking has it's own list of pros and cons. Federally backed accounts versus an insane risk of bankruptcy.

[Syrus]

I do not see any pros to fractional reserve banking unless you're a banker trying to create more loans or a government trying to live beyond its means.

[Zuhzuhzombie!!]

I don't have a problem with either. For example, this Cut, Cap, Balance mantra that's going around now is complete nonsense to me.

[Less Than Liz]

More Austrian ecnonomic school

Let's not get off topic but my DMV isn't incredibly busy but it still takes to long to do the simplest shit.
Chicago > Austrian.

I barely made it through Human Action. What a tome.

[Syrus]

Chicago school has its finer points but still works under a falsified system. Lol friedmen