Oil prices, and subsequently prices paid at the pump, are the ONLY thing many of the imbeciles in this country actually pay attention to. I figure the US Gov will more than likely issue some "fuel cards" in the not so distant future to their beholden constituents so as to alleviate the "concern" over runaway spending and a lack of meaningful reform. But to your main point, yes, it's killing the economy again. This is 2007 redux.
Piezoe, small businesses, beyond sole prorietorships, are started directly by rich people or rich people put up the venture capital. They do the calculus about return even if the guy with the dream would settle to buy a salary. Growth of real wealth, properly understood, is the positive change in aggregate assets. Assets, propery understood, are the possive right a future income stream after tax. The present value of assets is the discounted to present strength of the possessive right, and the confidence level that projected income stream will be realized. The present value of an asset, depends entirely about your view on whether you can possess the income stream from that asset in future and whether it will be realized. So, the decison to invest has everything to do with your view of the future and perhaps more alarmingly, the present value of all assets reflects the consensus view of the future....if you think your taxes will go up, then your assets are devalued immediatley. With regard to your reference to the 'Social Security Trust Fund' and whether you can take thinks out of that fund, illegally or otherswise...I hate to break to you again but, there is no there there. There is nothing there. There is no 'Fund.' There is nothing in the 'Fund' to take. There never was 'Fund.' All the money that came in was spent...nothing was invested...all that happened is that 'Wimpy' the government said, "I will gladly pay you next Teusday for a hamburger today!' The Social Security Trust Fund is an accounting lable...it is an account of how much money is not in the Fund. So, you really can't go take it again. However, Wimpy could say, "Tuesday, is terribly inconvenient, how about next Thursday.?"
Breen, there is a major point of disagreement. There is not enough money to pay what's owed on Treasury bonds period, whether or not they are in the Social Security Trust fund or in your personal safety deposit box. So that point is simply moot. I agree with you that because the Trust fund is an intra-govermental operation there are options available with regard to how this debt obligation is handled that are not available with regard to Treasuries in general. It is very unrealistic, however, to think that the government will simply default on Trust Fund obligations, any more than it is realistic to think that the government will default on Treasuries in general. I mentioned some mechanisms by which the government can, in effect, reach into the Trust fund legally and spend the money for other purposes, without violating the law. I'm fairly confident that this is what will happen. And I might add that the government is also going to cheat you as well (and, yes, China too!) if you own Treasuries. There is a tremendous amount of misinformation being spread around the internet with regard to Social Security, for example "its a Ponzi scheme", or "there is no money in the Trust Fund", or that "there is no Trust Fund," on and on, blah, blah, blah. I hope you are not one of those spreading these absurd rumors. With regard to start up of businesses, you are surely aware that the vast majority of new businesses are small businesses financed by the owners, their immediate families and small loans. Relatively few are funded by venture capitalists and wealthy individuals. It's utter nonsense to claim that if income tax rates are raised people won't start businesses because they are going to be taxed at too high a rate to make it worthwhile. That might possibly be true if rates were raised very high on the first dollars earned. But there are no proposals to do that. What has been discussed is rolling back the Bush tax cuts on the last dollars of income to bring the rate back to something like 39%. That's going to have virtually ZERO impact on the number of businesses that get started. What IS going to affect the number of new businesses is the crappy economy. Please don't tell me next, that you are one of those that believes people are better off without medical insurance than they are with medicaid. And please don't interpret anything I've written above as indicating my personal political views or preferences, I'm merely stating facts.
Piezoe, you are disingenuous. There are no facts in what you wrote. It all opinion based on mistakes. Don't patronize me by hoping this or hoping that; just read what I wrote, forget about hope, and deal with what I said; if you think I am wrong point out the 'facts' that are wrong. If you simply disagree with my interpretation of 'facts', then fine; argue your position. The issue of the distinction between 'Special Government Securities' which have no real substance, just a meaningless phrase, a label on a ledger, and 'Treasuries' which are real, substantial marketable securites that can be possessed, is not dependent on the ability of the government to perform. My argument assumes an inability to pay and properly understood the issue informs the likely priorities of performance that will be applied when the inability to pay is manifest. 'Special Government Securities' are not 'Treasuries'; they are not even close...not at all in the 'general' area. They are not even legally cognizable as 'securities' per se. They are not marketable; they are not acceptable as collateral; they are not transferable, they are not subject to the law of secured transactions; you can't buy insurance against thier 'default'. Thinking about these IOU notations on a balance sheet as a 'Fund' or a 'Security', or as any sort of a contract with a counterparty, can only be interpreted as evidence of brainwashing by Orwelian speech manipulation. A 'Treasury' must be performed according to its original terms or there will be a default with a legal consequence; it will be subject default swap insurance; it will result in a legal 'credit event.' A 'Treasury' is a contract at law; enforceable at law. 'Special Government Securites' are no such thing...the name is just Orwelian speech manipulation...the are merely political promises subject to change by political action and they can only be enforced by political will. If Congress decides to change the promise, which would be a default in a legal contract, they can simply do so and there will be no legal remedy, no credit event, no insurance payment. The promise is only as good as the political will to keep it....but then again, the original promise of SS was to set up the system as an insurance program and invest the money so that its growth would fund its future obligations...but there was no political will keep that promise already. If you want engage this more with me, beyond hope, you would do better to read what I wrote in this thread months ago where I likely argued it better than this redo. I am not going to continue to do it again in this same thread. I also will pass on discussing the 85% of U.S. Corporations that are Sub-S elections distinct from C-Corps. LLC's, LLP's and proprietorships; I won't parse out what tranch of the Sub-S elections create the proponderance of new jobs and how their growth is financed, or where the majority of the asset value lies. I think your pass at it above is too superficial to engage now. Maybe another time.
Not going to get into new jobs. What I wrote referred to new businesses. One of the greatest accelerations in the rate at which new businesses were being begun was during a period of higher marginal tax rates than now. You can look that up if you care to find out when it was. The debt obligations in the trust fund have the force of law behind them. They are not an imaginary asset as you seem to incorrectly suggest. You can look that up also on the internet, should you care to. I read your earlier posts in which you commented on the securities in the Trust Fund.
Laws are as ephemeral as the people whom write them. There have already been partial defaults on SS - anytime the indexing calculations are changed to slow the rate of spending, a partial default is occurring. At some point, the hard choices will have to be made. Given the current debt ceiling squabble is over very paltry sums of money (relative to budget/deficit/revenue) it does not appear voters, and therefore Congress, are ready yet to make those choices. There is nothing in the SS trust fund. It's gone, spent. Any bookkeeping cleverness to shift numbers around the ledger would be just another form of QE - so whats the point when we're already comfortable QEing?
I'm in agreement for the most part, especially your first paragraph which speaks to my main point Re the S.S. Trust Fund, viz., the obligations in the Trust fund will not be dipped into nor defaulted on directly. That would be political suicide and would require a change in the law that protects the Trust. Rather the Trust will be, in effect, dipped into, and quite legally, by such indirect measures as you mention. This is what I expect to happen again and again, unless congress gets it's act together. What congress should be doing instead is strengthening the Trust. I'm almost certain that only a temporary measure to meet debt obligations will result from the current negotiations. We will very likely have to wait until after the election for substantive measures, because our lily livered congressmen don't want to take any politically difficult stand until they are re-elected. The democrats are somewhat closer to the correct stance, but not faultless by any means, because they want to protect entitlements rather than dip into them -- by surreptitious means in the case of S.S. -- to subsidize the defense industry and endless wars. What the Republicans want to do to Social Security clearly violates the spirit of the law protecting the Trust. It would be truly a marvelous and wondrous thing if the American voter would send a special delivery message to congress by not re-electing any incumbent, but we know that's not going to happen. It's a terrible breach of trust by the congress to allow entitlements to be used to subsidize the discretionary budget. These are, after all, entitlements. The money in S.S.Trust is yours and mine, and using it to resolve spending excesses in the discretionary budget should be criminal, but sadly is not when the stealing is done by the back door. The medicare situation is much more difficult. because though it is an entitlement, i.e., we paid our hard earned money for that specific purpose, and the government protected medical cartel is on the other side. Medicare will be a hopeless situation until the power of the cartel is broken. Your last point, as with Breen's is moot because there is not enough money to pay off the regular Treasury bonds either! The money owed on both Regular Treasuries and the Trust fund holdings has to be borrowed. The only difference is that because the Trust is an intra-government operation, there are additional avenues available to steal from it. It is clearly nonsense to say "there is nothing in the Trust Fund". Why on Earth do you suppose all of this time is spent figuring out how to get around the law protecting the Trust if there is nothing there? To say there is nothing in the Trust is utter rubbish. It's the kind of statement one expects to hear on Fox "News", but not from an educated person. There are trillions of valid debt obligations there with the force of law behind them and if those obligations are not met then the government will have fallen or be on the path to collapse. (The odds of the latter seem to be going up.) http://www.ssa.gov/oact/progdata/fundFAQ.html
For those interested, there are also Medicare trust funds that earns interest. http://www.ssa.gov/oact/trsum/index.html The problem here is that medicare has to be subsidized from general revenue. If the U.S. were, as if by magic, to bring its medical costs down to a level near that of the country with the next highest medical costs, the medicare trust fund would produce a surplus and no funds from general revenue would be needed. This will be impossible as long as U.S. medicine continues to operate as a government protected cartel. If ever there was a good case to be made for deregulation, this is surely it!!! (Unless, of course, you are an advocate of socialized medicine, in which case you would prefer a different solution to the problem of unaffordable cost.)
Piezoe, what do you think is in these imagined 'Trust Funds' of yours...you think there is a lock box with something in it? All SS revenue and all Medicare revenue is collected by the Treasury Department and it is deposited in the general account as received to be used to pay current benefits when due. To the extent that there are surplus revenues those revenues are spent to pay general obligations of the government and the government increases the amount owed to social security...owed means that the government took the money and spent all of it and that it promises to borrow money and pay the benefits in the future when the revenues are no longer in surplus. Medicare is the same way...revenue comes in, it is spent on benefits, all of the revenues are spent on benefits currently, there is no surplus, and the government borrows money to pay the benefits in deficit on a current basis. Nothing is saved, nothing is in a lock box, and there is no 'Fund' of assets. Cash comes in, cash goes out, IOU's are written. There is only a notation on the Federal Government Balance sheet that there is a liability to SS or to Medicare. That notation is included in the National Debt and it is subject to the Debt Ceiling. Legislation was passed to allow the Treasury itself to manipulate the Special Government Securities in details of term and interest rates as they see fit. Because these securities are intergovernmental and are not marketable securities in any way, the Treasury can change the interest rate it says it owes to itself and it can change the term profile of the debt that it says that it owes to itself. They do not need Congressional approval. There is no counterparty...there is Treasury dealing with itself and taking in revenue into the general account and issuing IOUs to its own ledger account. There is no income from investment to fund these obligations; there is no income except current revenue, there are no saved assets to sell or to pay interest revenue. There was no investment of the revenues; there is nothing in the funds. Why is that so hard for you to grasp. Companies do the same thing with intercompany businesses...they may carry a debt from a subsidiary to a parent but it is only an accounting entry that is part of the consolidated balance sheet...it does not represent a real asset. Why don't you find an account of the assets that you imagine are in these Funds...see if you can find anything but a Special Government Security account...an account that holds only IOUs called securities but that are not real securities. You cannot arbitrarily change the terms of real securities...but you can change the terms of what you owe to yourself. Don't you understand when you read the linked publication you provieded that when they say 'Fund' they are only telling you there is an account in a ledger that trackes the money in and the money out..but there is really nothing in it...there is no surplus retained. Don't you understand that when they say the Treasury has decided to invest the surplus in 'Special Government Securities' that are not marketable...that means they are not really securities at all...they are just IOU's...and when they say that they bear a mark rate of interes that the interest rate and is just an accrual of the IOU...and it can be changed at will according to rate and maturity? Read your Orwell, just because they write about it like its a real thing doesn't mean there is a real thing...its all just accounting for money spent and owed from the government to itself. This does not mean that the government does not owe the money to itself...it does. It does not mean that the government does not have a promise to pay these benefits. It just means that the government invested nothing to fund these benefits and the government's ability to pay these benefits depends on increased future revenue or borrowing. It also means that there is no legal remedy in the event of default...there is only a political remedy.
How about you start...i don't know...EVERYWHERE?!?! Why not cut a mandatory 15% from EVERY budget, regardless. Secondly, get rid of these beauracracies like the dept of education, energy, home land security, etc. Education has always been handled by state and local governments, why are the Feds attempting to coerce people from Washington? There is so much waste that it is really a funny thing that anyone would think there is no room to cut. The funniest of all is that most of the money goes to RICH PEOPLE. Yes, most of the real money is taken from the middle class and redistributed to the rich. We are talking about the military industrial complex, the medical industry, all those contracts that corporations get. The Federal government gives poor people little to NOTHING. Out of its massive multi trillion dollar budget, how much do you think actually goes to kids and the poor? Roads, schools, the typical things you think about are funded at the local/state level. This government is a massive farce. They use the excuse of the poor/kids to funnel money from the middle class to the rich. Just like the bailouts of banks. How criminal to steal money from middle class people and redistribute it to the rich and then claim that it's for the good of the people, lol. Get your head's on straight. Most poor/kids will be taken care of even if the federal government is 10% of its current size. They would be taken care of via family, church, community and at last resort local/state governments. The rich and the elite? They would be in trouble, however, if the Federal government was only 10% of its current size.