Debt Ceiling Chicken

jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you. The various racial and ethnic groups are going to have a hard time justifying increased spending for "the others." That's just human nature.

I disagree. Liberals have no problem spending money on conservatives. Atheists have no problem spending money on the religious. The educated have no problem spending money on the uneducated.

Sure, sometimes people in the blue states think "make the red states careful of what they wish for, and cut off the wealth transfer from the liberal states to the conservative ones--see how they like it."

And then they remember what the name for that kind of behavior is: the road to Civil War II.

Duoae wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you.

What? Care to explain how the US is somehow different in its melting potness than any other country in the world? I think you're missing out on about 100% of the ethnic/social and multicultural history for the last 50+ years (in reality, eternity).

Just to start you off: Turkish.

Your point is completely undermined by this.

The US has 4 times the population, is 27 times larger and has an economy 5 times bigger than Germany. German's largest ethnic group is turkish at 2.4% of population while in the US 16% of our population is hispanic. We have three ethnic groups larger than 2.4% (hispanic, african american, asian). Also the US is the number 1 country in the world for number of immigrants, by a wide margin (almost 40 million, next is Russia at 12 million). I think it is very legitimate to say the US is a more diverse country than Germany.

Germany is more like the US in the mid-19th century. In 2005, 81% of Germans had no immigrant background. The US is, um, different. Probably around 1% of the population has no immigrant background...

jdzappa wrote:
The very first country and year I looked up, Germany and 2010 had a revenue of 47.5% of GDP, completely demolishing Hauser's "Law". I'd guess that a thorough examination of global revenues would show that 16-21% revenue was the exception, and not the rule.

The tax rate for the average German middle class household is 42%.
http://www.taxrates.cc/html/germany-...

Sorry but the American populace are not going to accept that level of federal taxation on top of local and state taxes. You have to be realistic about America's situation. First, our nation was born in opposition to onerous taxes. Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you. The various racial and ethnic groups are going to have a hard time justifying increased spending for "the others." That's just human nature. Third, most of Europe is in immediate danger of financial collapse or facing major problems in the near future.

Oh final note- you'll see that Germany has corporate tax rates of about 17%, making their companies more competitive in the global economy than ours. Any tax discussion needs to take our upper corporate tax rate of 35% into account.

By 1918, the top rate of the income tax was increased to 77% (on income over $1,000,000) to finance World War I. The average rate for the rich however, was only 15%.[18] The top marginal tax rate was reduced to 58% in 1922, to 25% in 1925 and finally to 24% in 1929. In 1932 the top marginal tax rate was increased to 63% during the Great Depression and steadily increased, reaching 94% (on all income over $200,000) in 1945. During World War II, Congress introduced payroll withholding and quarterly tax payments.

So there is precedent of higher tax rates than Germany.

CheezePavilion wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you. The various racial and ethnic groups are going to have a hard time justifying increased spending for "the others." That's just human nature.

I disagree. Liberals have no problem spending money on conservatives. Atheists have no problem spending money on the religious. The educated have no problem spending money on the uneducated.

Sure, sometimes people in the blue states think "make the red states careful of what they wish for, and cut off the wealth transfer from the liberal states to the conservative ones--see how they like it."

And then they remember what the name for that kind of behavior is: the road to Civil War II.

100% accurate.

One side sometimes wishes they could take their ball and go home. The other side wants to take their ball, the other guy's ball and kick them in the gnads. There is really no comparison. Blue-staters may not be pragmatic on many issues, but on this one they definitely are.

DSGamer wrote:
CheezePavilion wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you. The various racial and ethnic groups are going to have a hard time justifying increased spending for "the others." That's just human nature.

I disagree. Liberals have no problem spending money on conservatives. Atheists have no problem spending money on the religious. The educated have no problem spending money on the uneducated.

Sure, sometimes people in the blue states think "make the red states careful of what they wish for, and cut off the wealth transfer from the liberal states to the conservative ones--see how they like it."

And then they remember what the name for that kind of behavior is: the road to Civil War II.

100% accurate.

One side sometimes wishes they could take their ball and go home. The other side wants to take their ball, the other guy's ball and kick them in the gnads. There is really no comparison. Blue-staters may not be pragmatic on many issues, but on this one they definitely are.

So, Red States are the trailer trash extortionists that civilized Americans are and should be afraid of?

Paleocon wrote:
DSGamer wrote:
CheezePavilion wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you. The various racial and ethnic groups are going to have a hard time justifying increased spending for "the others." That's just human nature.

I disagree. Liberals have no problem spending money on conservatives. Atheists have no problem spending money on the religious. The educated have no problem spending money on the uneducated.

Sure, sometimes people in the blue states think "make the red states careful of what they wish for, and cut off the wealth transfer from the liberal states to the conservative ones--see how they like it."

And then they remember what the name for that kind of behavior is: the road to Civil War II.

100% accurate.

One side sometimes wishes they could take their ball and go home. The other side wants to take their ball, the other guy's ball and kick them in the gnads. There is really no comparison. Blue-staters may not be pragmatic on many issues, but on this one they definitely are.

So, Red States are the trailer trash extortionists that civilized Americans are and should be afraid of?

Those are your words, not mine. I'm simply stating that blue states are predominantly liberal and predominantly willing to send their tax money to someone else for the good of the country whereas the reverse isn't true.

Probably around 1% of the population has no immigrant background...

As far as we know, humans did not evolve in the Americas, so if you go back far enough, we're all immigrants, even the American Indians.

Paleocon wrote:
DSGamer wrote:
CheezePavilion wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you. The various racial and ethnic groups are going to have a hard time justifying increased spending for "the others." That's just human nature.

I disagree. Liberals have no problem spending money on conservatives. Atheists have no problem spending money on the religious. The educated have no problem spending money on the uneducated.

Sure, sometimes people in the blue states think "make the red states careful of what they wish for, and cut off the wealth transfer from the liberal states to the conservative ones--see how they like it."

And then they remember what the name for that kind of behavior is: the road to Civil War II.

100% accurate.

One side sometimes wishes they could take their ball and go home. The other side wants to take their ball, the other guy's ball and kick them in the gnads. There is really no comparison. Blue-staters may not be pragmatic on many issues, but on this one they definitely are.

So, Red States are the trailer trash extortionists that civilized Americans are and should be afraid of?

No, because extortionists--well one, they don't blame the victim--but two, extortionists have a plan and an overt goal. This is just a matter of looking at a situation pragmatically and saying "just give me the bill."

As far as we know, humans did not evolve in the Americas, so if you go back far enough, we're all immigrants, even the American Indians.

Sure, we can redefine the word if we want to opt out of the debate, but that seems kind of pointless. Pragmatically, the First Nations in the Americas were invaded by Europeans, but remnants still remain in reservations and among the general population.

No, because extortionists--well one, they don't blame the victim--but two, extortionists have a plan and an overt goal.

"The single most important thing we want to achieve is for President Obama to be a one-term president." - Mitch McConnell said that. He's also the guy who has ruined the good faith of the Republicans on negotiations ranging from the ACA to the debt ceiling limit. With a purpose that's pretty obvious...

Robear wrote:
No, because extortionists--well one, they don't blame the victim--but two, extortionists have a plan and an overt goal.

"The single most important thing we want to achieve is for President Obama to be a one-term president." - Mitch McConnell said that. He's also the guy who has ruined the good faith of the Republicans on negotiations ranging from the ACA to the debt ceiling limit. With a purpose that's pretty obvious...

Heh, true, but this was about a side trip the conversation took to the Ohio area on America's diversity and what that means for peripheraid.

Oh no, I agree with you about that; in fact, that's why the first Civil War happened to begin with, that kind of attitude and that manipulation of the people by the elite like McConnell.

LeapingGnome wrote:
Duoae wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you.

What? Care to explain how the US is somehow different in its melting potness than any other country in the world? I think you're missing out on about 100% of the ethnic/social and multicultural history for the last 50+ years (in reality, eternity).

Just to start you off: Turkish.

Your point is completely undermined by this.

The US has 4 times the population, is 27 times larger and has an economy 5 times bigger than Germany. German's largest ethnic group is turkish at 2.4% of population while in the US 16% of our population is hispanic. We have three ethnic groups larger than 2.4% (hispanic, african american, asian). Also the US is the number 1 country in the world for number of immigrants, by a wide margin (almost 40 million, next is Russia at 12 million). I think it is very legitimate to say the US is a more diverse country than Germany.

First of all, if you don't live in a European country then you can't just quote a few statistics and then derive from that the homogeneity of culture. Immigration and background aren't the only things that define a culture. Just as if I told you how America "is" to live in you'd be skeptical of that, well, i'm telling you that, as a European who's lived in different countries and has many diverse European friends - no country in Europe is culturally homogenous. Which is what you said - not ethnically diverse which is what you're "proving" with those stats. Maybe you got a bit confused with the terms?

Even among a single country with persons who have no immigrant background (whatever that is defined as because there are very few people in the whole of Europe who cannot trace their ancestry back to other countries and cultures) there can be wild regional differences in culture.

I don't see how the population is relevant to the conversation, tbh.

Robear wrote:

Germany is more like the US in the mid-19th century. In 2005, 81% of Germans had no immigrant background. The US is, um, different. Probably around 1% of the population has no immigrant background...

I think you read that wrong. From wikipedia (you didn't say where you get your info):

In 2007, 91.2% (75.0 million) of residents in Germany had German citizenship, while 81% of the population were Germans with no immigrant background and 19% were German citizents with immigrant background ( 15.3 million people) Of the remaining 8.8% (7.2 million), 1.7 million (2.1%) had Turkish, 0.5 million (0.6%) Italian and 0.4 million (0.5%) Polish citizenship.

That's 81% of 91.2% which is around 73%. That's a big difference... Again, not that it matters because he specifically said "culturally homogenous" which was the point I was addressing. I wouldn't have assumed that in mid-19th century that the US was particularly culturally homogenous... far from it, in fact.

Uh. The US has 313 million and Germany has 81 million. That is more like 400% than 3%. Unless I am misunderstanding populous.

Duoae wrote:
LeapingGnome wrote:
Duoae wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you.

What? Care to explain how the US is somehow different in its melting potness than any other country in the world? I think you're missing out on about 100% of the ethnic/social and multicultural history for the last 50+ years (in reality, eternity).

Just to start you off: Turkish.

Your point is completely undermined by this.

The US has 4 times the population, is 27 times larger and has an economy 5 times bigger than Germany. German's largest ethnic group is turkish at 2.4% of population while in the US 16% of our population is hispanic. We have three ethnic groups larger than 2.4% (hispanic, african american, asian). Also the US is the number 1 country in the world for number of immigrants, by a wide margin (almost 40 million, next is Russia at 12 million). I think it is very legitimate to say the US is a more diverse country than Germany.

First of all, if you don't live in a European country then you can't just quote a few statistics and then derive from that the homogeneity of culture. Immigration and background aren't the only things that define a culture. Just as if I told you how America "is" to live in you'd be skeptical of that, well, i'm telling you that, as a European who's lived in different countries and has many diverse European friends - no country in Europe is culturally homogenous. Which is what you said - not ethnically diverse which is what you're "proving" with those stats. Maybe you got a bit confused with the terms?

I don't really want to get into a pissing contest but 1. I never said "culturally homogenous", maybe you are confusing me with jdzappa. 2. I never claimed I knew what it was like to live in Germany. 3. You brought up ethnicity in the first place so I don't think it is very fair to then throw it in my face that I brought up ethnicity stats and for you to claim they don't apply and 4. you asked to "explain how the US is somehow different in its melting potness" which is exactly what I did, the U.S. melting pot has a much higher degree of diversity than Germany in both ethnic groups and immigrant population.

That's 81% of 91.2% which is around 73%. That's a big difference... Again, not that it matters because he specifically said "culturally homogenous" which was the point I was addressing. I wouldn't have assumed that in mid-19th century that the US was particularly culturally homogenous... far from it, in fact.

Okay, I was 8% off, thanks for the correction.

The US in the mid-19th century was composed largely of English and Scottish settlers and their descendents, the vast majority of whom had strong ties to Great Britain in the previous generations. That's about as culturally homogenous as it gets for an ex-colony. Sure, there were some Jews who showed up mid-century, but the Irish didn't start migrating en masse until the late 1840's or so, so the mid-19th century was the last time the US was primarily a population of recent British colonial families.

Slaves did not have a significant cultural impact as slaves. It was after the war that African Americans start to really take off culturally.

LeapingGnome wrote:

the U.S. melting pot has a much higher degree of diversity than Germany in both ethnic groups and immigrant population.

Given that Germany is a federated state of 16(IIRC) sovereign principalities I suspect the Germans, esp. the Bavarians, would be greatly inclined to disagree. They might well be mostly caucasian but they regard themselves are ethnically and culturally distinct (see also: scots/welsh/english/N.Irish).

jdzappa wrote:

Oh final note- you'll see that Germany has corporate tax rates of about 17%, making their companies more competitive in the global economy than ours. Any tax discussion needs to take our upper corporate tax rate of 35% into account.

Just because the corporate tax rate is 35% doesn't mean anyone actually pays that amount.

True, there are a huge number of subsidies, loopholes and write offs available to corporations to reduce tax liability. I'd be willing to follow along with the whole idea of tax reform in which rates are lowered in exchange for elimination of the subsidies and loopholes, but I expect this crew would just reduce rates and assign the tough work to a bi-partisan study group that would recommend a targeted package of rule changes somewhere around 2025, blah, blah, blah.

There have been a bunch of articles lately in various sources discussing the intense lobbying beginning around the automatically triggered defense and other spending cuts that it looks like will come into effect at the end of the year. Since the Republicans have indicated they will not hold to the deal set up last Fall, it looks like there could be a severe hit to the economy at the end of the year as the Federal government closes down contracts en masse in required cuts.

Of course, if Romney wins, it'll all be turned around in an instant, most likely... The Democrats are not the suicide bombers in today's Congressional Baghdad...

I assume there will be a deal at the last minute. Same with the expiration of the tax cuts. Treasury can sell debt at 2% or less, and keeping both tax cuts and our current spending levels is the path of least resistance for politicians.

LeapingGnome wrote:
Duoae wrote:
LeapingGnome wrote:
Duoae wrote:
jdzappa wrote:

Second, we're not a homogenous culture like Sweden or Germany where social spending goes to other people like you.

What? Care to explain how the US is somehow different in its melting potness than any other country in the world? I think you're missing out on about 100% of the ethnic/social and multicultural history for the last 50+ years (in reality, eternity).

Just to start you off: Turkish.

Your point is completely undermined by this.

The US has 4 times the population, is 27 times larger and has an economy 5 times bigger than Germany. German's largest ethnic group is turkish at 2.4% of population while in the US 16% of our population is hispanic. We have three ethnic groups larger than 2.4% (hispanic, african american, asian). Also the US is the number 1 country in the world for number of immigrants, by a wide margin (almost 40 million, next is Russia at 12 million). I think it is very legitimate to say the US is a more diverse country than Germany.

First of all, if you don't live in a European country then you can't just quote a few statistics and then derive from that the homogeneity of culture. Immigration and background aren't the only things that define a culture. Just as if I told you how America "is" to live in you'd be skeptical of that, well, i'm telling you that, as a European who's lived in different countries and has many diverse European friends - no country in Europe is culturally homogenous. Which is what you said - not ethnically diverse which is what you're "proving" with those stats. Maybe you got a bit confused with the terms?

I don't really want to get into a pissing contest but 1. I never said "culturally homogenous", maybe you are confusing me with jdzappa. 2. I never claimed I knew what it was like to live in Germany. 3. You brought up ethnicity in the first place so I don't think it is very fair to then throw it in my face that I brought up ethnicity stats and for you to claim they don't apply and 4. you asked to "explain how the US is somehow different in its melting potness" which is exactly what I did, the U.S. melting pot has a much higher degree of diversity than Germany in both ethnic groups and immigrant population.

Sorry, I did get confused between you two. I blame it on posting at 6am in the morning! Culture is a function of ethnic variance and social history - hence the slash. I didn't bring up ethnicity, I was addressing the homogeneous culture (or culturally homogeneous, depending on how you want to write it) statement and trying to explain as to why Germany isn't culturally homogeneous. As for the last thing, I don't believe that the US is more culturally diverse than a lot of places in the EU. Differently diverse, yes I'd agree to that. Without being able to know what a person with immigrant background is defined as (Is it just one generation?) because it makes a huge difference: the settlement and intermingling throughout Europe over many centuries has caused many culturally diverse things to occur and exist through to today. Sure, we can look at current numbers of immigrants or we can think about how countries are formed and realise that it's not that simple. I don't think it's special and I don't think that somehow the differences (How many people in america count themselves as "American" despite not holding citizenship for example) would preclude social programmes such as we have seen in other parts of the world. I think your currently active social programmes would also put paid to that idea. That was my point and I don't think it's been refuted.

Taxmageddon sparks anxiety - WaPo

The impending upheaval is the result of multiple policy changes all set to hit at the same time. The George W. Bush-era tax cuts are scheduled to expire in December, along with a temporary payroll-tax holiday sought by President Obama. Meanwhile, Congress last summer paired a debt-limit increase with $1.2 trillion in across-the-board spending cuts over the next decade that almost no one wants to see happen.
...
During a recent dinner in Washington, Lawrence H. Summers and Robert Rubin mulled the situation. Both men led the Treasury Department during the Clinton administration, and Summers was Obama’s top economic adviser in 2009 and 2010. They concluded that, whatever happens on Election Day, exhausted lawmakers are likely to resort to a short-term deal that extends all the tax cuts, postpones the spending cuts and pushes the deadline for fiscal calamity into the spring of 2013.

But even that move would be risky, Rubin argued, potentially inviting another downgrade of the U.S. credit rating, roiling financial markets and shattering confidence that the United States will ever get its debt problem under control.

Solutions are easy to come by “when you’re sitting at the Council on Foreign Relations in New York,” said Rubin, the council’s co-chairman. “It’s a lot harder to do it when you’re sitting in Washington and it’s one minute of midnight.”

Anyone who thinks the US is going to make good on its debts at par value is insane. The debts will be paid, but they will be paid with printed money that isn't worth as much as it was when borrowed, even counting the interest that was supposedly paid.

There's just no way our economy can support the load of paying all the liabilities we've taken on, and printing money doesn't change the basic facts on the ground one iota. It just diverts wealth, away from the people actually generating it, to the people printing the dollars.

It's using morphine for cancer, when what we need is chemo.

Malor wrote:

It's using morphine for cancer, when what we need is chemo.

I'm too lazy to do this, but I think I could make a Tumblr out of every analogy you've ever used for the US financial situation.

Malor wrote:

The debts will be paid, but they will be paid with printed money that isn't worth as much as it was when borrowed, even counting the interest that was supposedly paid.

That seems likely given the level of debt. Long and intermediate-term bondholders will lose money, but they knew the risks going in. If you buy U.S. bonds at 2% interest now, you are taking the risk that interest rates in a few years will be at 4,6, or even 10 percent. You may lose money in real terms.

We saw this in the 1970s. Bond holders lost a lot of money, but that's the nature of investing. Don't lend money to people if you don't think you're going to get it back.

For wage earners who don't own bonds (a huge portion of the population), this situation will be a problem only if wages fail to keep pace with inflation. There will also be issues with uncertainty over future rates in terms of business planning, which is why there will be pressure to rein in inflation.

DSGamer wrote:
Malor wrote:

It's using morphine for cancer, when what we need is chemo.

I'm too lazy to do this, but I think I could make a Tumblr out of every analogy you've ever used for the US financial situation.

Isn't it ironic?

[size=2]No it isn't.[/size]

Funkenpants wrote:

Don't lend money to people if you don't think you're going to get it back.

I've always known this as "Don't lend money you aren't willing to never see again."

Edit: Or the less awkward phrasing: Only lend money that you are willing to lose.

Rezzy wrote:
Funkenpants wrote:

Don't lend money to people if you don't think you're going to get it back.

I've always known this as "Don't lend money you aren't willing to never see again."

Edit: Or the less awkward phrasing: Only lend money that you are willing to lose.

That's true for friends. In commercial terms, you ask an interest rate that reflects the risk. You also take steps to reduce the risk of loss. This can involve taking security for the loan, or insisting on a high level of credit worthiness prior to lending money. The problem we had over the past 10+ years is that lenders have gotten into the habit of underestimating risks. The government has had a big impact in that respect, because it viewed loose credit as a way to juice an stagnant economy and promote "good causes" like home ownership, college educations, and retail sales.

The result is that we're now carrying a staggering amount of public and private debt. There's really no way to pay it off without devaluing the debt in real terms.

So in a few years, we're all going to making a lot more money. It's just that money won't buy us as much as it does now.

Crystal Ball soothsayers don't believe the market?

Market says 2%. And you don't think these investors think about potential inflation? PS - The Treasury also sell TIPS. IE Par value bonds. Those that want it will get it.

How much longer do we have until a Malor type analysis is correct?