Debt Ceiling Chicken

Funkenpants wrote:
Bear wrote:

My dream is that Obama snaps and goes Samuel Jackson.

Obama is raising millions of dollars from special interests. He plays the game as well as anyone else.

That is for sure. But if he talks to Americans like we are adults, the people will have his back.

Dylan Ratigan's meltdown was brilliant.

Minarchist wrote:

The problem is that nothing ever gets cut.

I agree that it's very difficult to make cuts. We saw that recently when just cutting funding in certain programs back to 2008 levels was seen as "destruction of the poor in this country" or whatever. It's much easier to freeze spending and just wait for the economy to expand around the program at issue, but Obama seems genuinely interested in bringing down government spending to a sustainable level. This is why he often seems to be offering up cuts and freezes before anyone on the other side asks for them.

But if taxes are only pulling in 16-17% of GDP absent a really good year in the stock market, then we need to look at long-term revenue growth. Eliminating the Bush tax cuts would be a big first step.

Jayhawker wrote:

That's why he has to snap. Duh!

Why would he snap when he's doing so well at the game? He is like the Tom Brady of fundraising right now.

http://www.dylanratigan.com/2011/08/...

Yesterday, on TV, I exploded. I spent two minutes giving a primal yell at our political system, demanding the extraction of our money and dignity end. It was my most heartfelt and emotional moment on television, ever.

And the emails poured in. I hit a chord, because it’s something we all feel. Take a look.

With the markets in turmoil and the global financial architecture groaning under the weight of fraud and corruption, it’s a good time to think about what leadership would look like. Believe it or not, we have had good leadership, purpose, integrity, and aligned interests in this country.

In 1961, President John F. Kennedy faced a dilemma — how could he direct our intense competitive passion with the Soviet Union in a direction other than war? The answer was his call for America to beat the Soviets to the moon. Kennedy understood power; if he did not lead us towards peaceful productive competition, that same animus would have turned violent (see this key memo on the real rationale for the space race). So he took the passion and focus of our society, the technology of war and missiles, and turned it into a great mission to explore space. He gave us a shared goal.

But that’s not the full story. Kennedy also demanded we use the finest scientists and engineers to design the rockets, and made sure that the path to the moon was based on the best possible solution to get there. For large rocket boosters, he was open to chemical, nuclear, liquid fuels, or any combination. He did not put a commission of astrologers in charge, and he did not put political cronies with no scientific background in charge of designing the rockets.

We had a shared goal, and we had a problem-solving process with integrity and aligned interests. Kennedy was the leader of this initiative, but Americans at that time, possibly because of a shared experience in World War II, had a shared purpose. They believed in prosperity as a goal, and they had a shared set of problem solving values to get there. They believed in education, in health and welfare, in mutual security, in dignified work and in Americans making things. The moon shot didn’t just avoid war with the Soviets, it created the largest surge of American students into math and science in history.

Today, we face the same demons as decades past. We have passion, and focus, and we want to compete. What we lack is a set of shared prosperity goals, and a shared problem solving values to get there. There’s no consensus, for instance, on the need to solve the problem of climate change. But even where we have some consensus, say on creating jobs, there’s no integrity or aligned interests in how we’re approaching the problem. It’s well-known in DC among lobbying firms that every policy initiative must be wrapped in the shared goal of creating jobs. It’s unclear whether anyone there has that as an actual goal, but even if they did, there’s no integrity in the way they are going about creating jobs. We still trust the same corrupted economic establishment, an establishment with no ethos of the importance of problem solving. Astrologers (like S&P) are in charge of job creation.

So now we are locked in a war of ideas and mechanics in a battle for power. But power to what end? The political solutions proposed by DC today are the opposite of Kennedy’s moonshot. We are taking our collective passion and focus and turning it toward manipulating power for the self-preservation of a few instead of working together towards shared goals with shared values knowing our ideas and mechanics will change as long as we try to get there.

Whether it’s full employment, clean energy, building a bridge, whatever — there’s no mutual consent to a set of shared goals, integrity on how to achieve them, or aligned interests. Even where there are policy discussions on, say, how to cut our debt load, it is the opinions of discredited ratings agencies that seem to matter. So our choices are organized around austerity measures that we know will not cut debt loads. Again, it’s using astrology to get to the moon.

I’ve realized, over time, that it isn’t policy ideas we need. We need, as citizens, a shared purpose. And we need a commitment to integrity of process, and aligned interests so the incentives exist for all of us to contribute. You can talk to billionaires — and I have — who are scared for their children, for their country, and for the world. And if billionaires can’t create the changes we need in the machine, if Congress can’t, if the President can’t, then we must look to ourselves.

When Kennedy called for the country to go to the moon, he said that “no single space project will be more impressive to mankind… and none will be so difficult or expensive to accomplish.” The difficulty and expense were great problems to overcome, not reasons to shrink from greatness. He said we would experiment with different rocket technology, “until certain which is superior.” Every engineer, politician, and bureaucrat focused on the overall goal — not how to look like America was getting to the moon to get power and credit, but how to actually do it. And it was not his project, or even the project of the astronauts who went there. “It will not,” he said, “be one man going to the moon… it will be an entire nation. For all of us must work to put him there.”

This is shared purpose — Americans paid taxes, worked on rockets, trained as astronauts, cleaned NASA buildings, or did whatever they could do — to get each one of us to the moon using shared values to solve problems that got us closer to our objective. Later on, the space station in the 1970s, using even more advanced technology that could have been used for war and weaponry, helped us develop a new cooperative posture with the Soviet Union, cooling off the Cold War. This remarkable problem-solving value set helped create not just leadership in the space program, but the technological spinoffs we enjoy today.

This is the spirit we need today. We need to fight against the great ideological machine that lacks purpose, lacks integrity, and lacks aligned interests. The first step is to recognize our own place in it. If we believe that our problems are all due to the Tea Party, or Obama, or corporate power brokers, or liberals, then we’re lacking the integrity necessary to reach any goal. The reality is, by boxing ourselves into a tribal two-party state, we are all part of the machine. And so, in order to change it, we must simply change our own minds. We must reorient our own ways of thinking, to a leadership driven model of citizenship. It isn’t enough, or even necessarily important, to care about which politician is in charge. We must seek within our own lives and our own politics, food, culture, families, and schools, values. We must share a set of prosperity goals — full employment, clean energy, patient driven health care, high-quality universal education — and push our leaders and ourselves to achieve them.

Ultimately, peace and prosperity will not be made because we get rid of the animal instincts within us, the competitiveness, the passion, the need to argue. It will happen because we will use those instincts, as we did with the moonshot, to build a society that lets us take care of each other and solve our problems. And so we must figure out how to stop giving our consent and legitimacy to an unthinking mechanical beast that runs our lives, a beast which enslaves us to accounting mechanisms like debt ceilings instead of the shared prosperity we seek as a culture and society. We must figure out how to restore the integrity necessary to actually solve our problems and we must understand how to align all of our interests so we each have the incentives to solve them. That way, we can ensure our bridges don’t fall down and our job creation initiatives actually create jobs.

I have no doubt that by rededicating ourselves, another moonshot is inevitable. That’s just what happens when problem-solving people dedicate themselves to prosperity as a goal, make sure that integrity is the keystone of how they achieve it, and align their interests so it is doable.

For more on Jobs, check out Jobs Wanted: A Special Report on Trade, Taxes, and Banking.

Aetius wrote:
We must share a set of prosperity goals — full employment, clean energy, patient driven health care, high-quality universal education — and push our leaders and ourselves to achieve them.

Translation: we must make those stupid people do what we want, because we're right, and they are wrong, and we just need to ... rule them.

I think we can call this Bachman's Law now.

Funkenpants wrote:

*rolls eyes*

Whatever.

To be clear, I'm saying I'm as equally as guilty as anyone I might disagree with.

Why mix threads?

I changed my post. I don't even want to get into it.

We must share a set of prosperity goals — full employment, clean energy, patient driven health care, high-quality universal education — and push our leaders and ourselves to achieve them.

Translation: we must make those stupid people do what we want, because we're right, and they are wrong, and we just need to ... rule them. There was a slogan dedicated to that very idea a few decades ago, I can't quite recall it ...

Minarchist wrote:

It was 91% (on the equivalent of $1.8 million of income), but does it really matter for a discussion of deficits? Hauser's Law dictates that you're still going to pull in 19% of GDP regardless.

Like so many of the economic laws and certainties that have led us to this disaster, that one is unequivocally bullsh*t. It says everything about the rich's desire to pay less than it looks like they are, and American politicians willingness to give it to them over the decades. It says nothing about any fundamental economic truth.

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.

fangblackbone wrote:
If your interests are those of big business, you have three.

FIXED

I don't consider the tea party a real party. It's just the looney wing of the GOP.

I wish I could say the same. The problem with that is, take a look at what they've accomplished. They at the least hurled a gut shot at the world economy. Sure the circumstances helped...

In 2008 the debt was 9T.

In 2011 the debt is 14T.

2008 10-year interest rates was 4.0%

2011 10-year interest rate is 2.1%

If you listen to the debt hawks they would have and did predict... hyperinflation, higher interest rates, and government defaults. They still are now.

But as you can see from reality - the opposite is true. Higher debt leads to lower interest rates.

goman wrote:

But as you can see from reality - the opposite is true. Higher debt leads to lower interest rates.

You'd better tell that to the Greeks then. And the Irish. And the Portuguese.

The argument is that our current course of action leads to those outcomes. There's little argument that we can suppress interest rates for now and delay the inevitable, but it is the inevitable - as Europe is now demonstrating. The only question is how bad we're willing to let things get before we come to our senses and agree that we cannot, in fact, get something for nothing.

Aetius wrote:
goman wrote:

But as you can see from reality - the opposite is true. Higher debt leads to lower interest rates.

You'd better tell that to the Greeks then. And the Irish. And the Portuguese.

The argument is that our current course of action leads to those outcomes. There's little argument that we can suppress interest rates for now and delay the inevitable, but it is the inevitable - as Europe is now demonstrating. The only question is how bad we're willing to let things get before we come to our senses and agree that we cannot, in fact, get something for nothing.

Those countries you cite are on the Euro Standard.

If you look at the Euro countries as a whole. The inflation and interest rates are low.

Saw that someone posted this on facebook for all you conspiracy fans out there ;p

Standard and Poor's is owned by McGraw-Hill. Harold McGraw III, the current CEO, worked for H.W. Bush, Dole, W. Bush, Cheney, Giuliani and is currently working for Romney 2012. So the person who downgraded the nation's credit, works for MITT ROMNEY.
They at the least hurled a gut shot at the world economy.

Honestly, what they've done is more along the line of forcing the world to realize that the Emperor has no clothes. He was already naked, it's not like they ripped off his robes.

As awful as things could get, they may have done us a long-term favor. Every day that passes in the old way of doing things, the hole we're in, on a global basis, just gets deeper. Some kind of crash was absolutely inevitable. If they forced it to happen sooner than it otherwise would have, that means it will be less severe overall.

It's easy to be furious at them, but despite what the progressives claim ("oh, we just need to raise taxes a little"), we are in a world of hurt. We need to raise taxes a LOT, cut spending a LOT, get our trade deficit in order to pull those huge dollar balances that are held abroad back into the country, and get our private-sector debt burdens back to something vaguely reasonable. Any one of those things would be terribly, terribly painful to deal with, and we're going to have to try to fix all four at once.

These problems have been accumulating since Reagan. The bills for voodoo economics are finally coming due, and they are staggering.

You know, I remember thinking, as a teenager in high school, that Reagan's deficit spending was a terrible idea, that we'd someday have to pay for it. Even to a 16- or 17-year old kid with just about zero knowledge of finance, that was obvious. But we wanted things to be easy NOW, no matter that it made things hard LATER.

And, well, it's later.

Malor wrote:

You know, I remember thinking, as a teenager in high school, that Reagan's deficit spending was a terrible idea, that we'd someday have to pay for it. Even to a 16- or 17-year old kid with just about zero knowledge of finance, that was obvious. But we wanted things to be easy NOW, no matter that it made things hard LATER.

And, well, it's later.

The irony is that people often point to that is how the Cold War was one. The narrative being that the US, being a stable democracy, was able to borrow some money and outspend the USSR, bankrupting them in the arms race. Meanwhile the reality was that the US was also digging its own grave. We're just allowed to be zombies for longer.

Malor wrote:

You know, I remember thinking, as a teenager in high school, that Reagan's deficit spending was a terrible idea, that we'd someday have to pay for it. Even to a 16- or 17-year old kid with just about zero knowledge of finance, that was obvious. But we wanted things to be easy NOW, no matter that it made things hard LATER.

And, well, it's later.

Except you know that as the higher the deficits went the lower the interest rates. Opposite of what you say.

It wasn't the deficit spending that bankrupted us. It was the financial for profit wealth extractors (as Dylan Ratigan called them) that bankrupted people and made them unemployed.

DSGamer wrote:
Malor wrote:

You know, I remember thinking, as a teenager in high school, that Reagan's deficit spending was a terrible idea, that we'd someday have to pay for it. Even to a 16- or 17-year old kid with just about zero knowledge of finance, that was obvious. But we wanted things to be easy NOW, no matter that it made things hard LATER.

And, well, it's later.

The irony is that people often point to that is how the Cold War was one. The narrative being that the US, being a stable democracy, was able to borrow some money and outspend the USSR, bankrupting them in the arms race. Meanwhile the reality was that the US was also digging its own grave. We're just allowed to be zombies for longer.

Not to mention that the proliferation of nuclear weapons was not the most awesome idea ever.

Except you know that as the higher the deficits went the lower the interest rates. Opposite of what you say.

Interest rates are the price of credit, and in an environment with an unlimited supply of credit, of course rates are low.

When you have a central authority that can produce any amount of money it wants, at any arbitrary interest rate it wants, of COURSE interest rates went nowhere. When the money supply is fictitious and created from thin air, you can't look at interest rates and get useful data out of it. If the Fed is willing to print enough money, it can hold interest rates at any level it chooses.

I've never really said ANYTHING about interest rates, anyway, at least not as a symptom. I've talked about them as a CAUSE, but because they're controlled, you can't really use them as a data point for anything other than the intentions of the Federal Reserve.

Where the hell did that comment even come from? I've never made any corresponding claim. You're being snide, saying that something isn't true that I've never said.

It wasn't the deficit spending that bankrupted us. It was the financial for profit wealth extractors (as Dylan Ratigan called them) that bankrupted people and made them unemployed.

And all of your prescriptions, all of your desired money printing, will only make those people stronger. The more wealth tokens are available to manipulate, and the easier they are to create from nothing to suit political whims, the stronger the token manipulators become.

I don't consider the tea party a real party. It's just the looney wing of the GOP.

It really took off after they relaunched without John Birch's name on the label.

Well, the original root of the Tea Party was actually pretty sensible and straightforward. Then they got hijacked by loonies.

Malor wrote:

Well, the original root of the Tea Party was actually pretty sensible and straightforward. Then they got hijacked by loonies.

Not precisely. The original "root" of the Tea Party was an astroturf organization started by David Koch. It's an entirely manufactured phenomenon.

No, it existed before then. Kurt Denninger over at Market Ticker was, I believe, the one that came up with the name. Mostly, they wanted balanced budgets and jail time for a bunch of bankers. Denninger has explicitly disavowed the current Tea Party; a different organization took the very broad outlines of his thinking and corrupted them.

They existed months before Koch, and WAY before Obama won the election. I don't think Koch arrived until after November 12.

I thought this was an interesting piece on the further repercussions of this whole debt ceiling idiocy.

http://www.slate.com/articles/busine...

I also wondered what people were thinking about the Republicans latest move on this. Because I thought it seemed like a bad move from every angle.

NathanialG wrote:

I thought this was an interesting piece on the further repercussions of this whole debt ceiling idiocy.

http://www.slate.com/articles/busine...

I also wondered what people were thinking about the Republicans latest move on this. Because I thought it seemed like a bad move from every angle.

Awesome--- the platinum coins were mentioned.

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.

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.

First, our nation was born in opposition to onerous taxes.

No, the nation was born in opposition to the idea that a group of people could be taxed unconstitutionally; in this case, without representation in the Parliament which laid the taxes, even though the British law and tradition stated that the consent of the governed was required. Since the colonists were not represented in Parliament, how could their consent to direct taxes affecting only the colonies be given?

It gets complicated, but the tea tax was kept on symbolically after other taxes were repealed, and the immediate cause of the flare-up in the American colonies was the passage of a new Tea Act which actually *reduced* the cost of tea by about a third by allowing the East India Company to sell directly for the first time in the colonies - but kept the 3 pence per pound tax in place.

The slogan of the rebellion was "No taxation without representation" not "lower taxes" or "no taxation". It was not a rebellion against onerous taxes, as can be seen by the price drop not being enough to calm things. It was a rebellion against the idea of being taxed without having a voice in the process.