It's The Economy, STUPID!.....

[spoonbill]

quote:Originally posted by we vs us

quote:Originally posted by cannon_fodder

But my question was how and why?

Why do you think it is in danger in spite of having more mobility than anywhere else in the world (see previous post)?

And what do you propose we do?  There are already minority scholarships, need scholarships, government loan, and even free tuition in Tulsa County for TCC.  If someone wants to go to college, they certainly can.

Basically:

What is holding people back?

We're actually NOT the most mobile society in the world. As a matter of fact, using one measure called the Gini coefficient, we are completely average in terms of social and economic mobility, ranking on par with Iran, Turkey, and China (this graphic cribbed from wikipedia).

So, no, I don't believe we're the USA of old, or at least the one that you and Spoonbill an NativeTulsans are harkening back to.  There's plenty of data out there that says we're in serious trouble and have been for awhile now. I absolutely believe we can be the best country in the world, but self-congratulatory BS is what, IMO, got us here in the first place.  We're guilty of not taking an honest and hard look at ourselves, and coasting on our (rapidly dwindling) reputation.

I can suggest solutions, but until there's a willingness to shift our priorities from Mid-East adventurism and wars of choice to domestic improvement, we're stuck with our slow decline.  

Spoonbill:  your wallet is already getting a workout, what with Iraq's nearly $500 billion cost to date.  You're gonna be paying and paying and paying, for years to come, and so am I.  I was hoping you'd have the same indignation towards our poorly executed war that you have for your less-well-off countrymen, but I'm not holding my breath.

Yeah, the media keeps trying to pound that into my head about the "poor execution of the Iraq war, but I still can't swallow it.  I guess I look at the way we fought wars in the past and the vast amounts of lives given to produce a far less measurable result.

In the last 5 years we almost completely crushed the largest terrorist network in the world, liberated 50 million people from Sadam, and the Talaban, and rebuilt 3,600 civil projects including over 900 schools, 160 hospitals, 800 miles of highway and city streets, 4,000 megawatts of power generating facilities and 640 public markets to support an emerging capitalist society.  We are now in the course of building thousands of miles of oil pipeline to support the people's largest natural resource.

Many of my close friends who have spent time on the ground in Iraq say that they can't believe the way our own media spins the negatives without ever giving an ounce of focus to what they have accomplished.  I can only thank god that the rabid left has been thus-far unsuccessful painting our servicemen as the villains (though Murtha and a host of others have tried).  

Sure, war costs money, but it's the rebuilding that is taxing our resources at the moment, but it's a commitment that we are obligated to make.  You must understand that the strength of the United States is not in our power to dominate and destroy, but in our power to liberate and support freedom.  

In WW1 we lost 300,000 servicemen in 4 years.  In WW2 we lost 1,000,000 servicemen in about 4 years.  So far we have lost 3,919 servicemen in Iraq. . .And the biggest difference is how we fought this war as compared to others.  If we had fought this war in the same way that we fought WW1 or WW2 we would have bombed them to rubble resulting in millions of civilian casualties.

Call me crazy, but when you look at history, this may be an expensive war, but it is one of the most successful wars ever fought in the history of warfare.  Democracy does not come in a box from Walmart.  It is a long and painful process, wrought with roadblocks, assassinations, backslides and death.  It is by far the most dangerous and bloodiest form of government to create, but in the end it is, in all of it's forms, the only true and free form of society.  We cannot just give up on a commitment we have made to a population of people because our passions change or the voices of the near-sighted become too loud.

We as a country have lost our claws and teeth.  In a fit of national rage we could have turned Iraq and Afghanistan into a giant sheet of glass, but we chose a far more constructive and expensive course, by promising a future to those who wanted freedom and democracy.  Ask any soldier and they will tell you that the vast majority of Iraqis are extremely thankful and are working very hard to build a successful society.  

If we pull out of this war and leave the millions that have opposed Al Qaeda, Iran, Syria, and the other elements that are bracing for domination of Iraq to die, then we will give up everything that we stand for.  We will be a ridiculous country, filled with petty, emotional, self-serving elitists.  

We will deserve the consequences of that decision.

To answer your question, yes, I open my wallet for that.  It is my duty.

[TheArtist]

Well thats one way to see things. But I dont really think that Al qaeda or the Taliban are as defeated as you say they are. Sure things look to be going well in Iraq but people always seem to frame it as the war was needed in the first place. Lets go back a bit in time shall we.....

Remember right before the war there were these things called "no fly zones".  Basically Saddam was boxed in unable to really do much of anything in either the north or the south parts of the country. The Kurds in the North were already showing signs of independance, a budding free market economy was starting. The Shia in the south were also starting to rally and throw off the shackles. When Saddam tried to move some tanks into the south. We flattened them from the air. The inspectors were doing their job, though yes indeed Saddam was not making it an enjoyable experience.  

We could have kept squeezing him, slowly whittling away his power and control, while at the same time encouraging the growth of free government institutions and budding new economies in the north and south of the country.

In other words, with a bit of wisdom, will and patience we could have effectively neutralized any threat "real or imagined" that Saddam posed, WITHOUT thousands of Americans losing their lives and without such a loss in treasure as well. Without stirring up chaos, destruction and so much loss of life for the people in those areas that were already starting to turn the corner and build new lives. There was no alqaeda in those areas and the locals would not have allowed them to come in.

We should have also focused more effort in Afghanistan. We still need to, for from what I can tell things arent going that well there. Plus now the Taliban and Alquaida have an even stronger presence in Pakistan. Their presence in Pakistan is stronger and more of a problem there than it ever was in Iraq. "they certainly have more of a presence in Iraq now than they  did before the war as well". How anyone can say there are now fewer Taliban and Al Quaida in the world now than there was before the wars, baffles me.  

We should have, and still need to use the power of education to clip the growth of progress of Muslim fundamentalism in places like Africa. I cant tell you the number of times I have seen articles and news programs that show people there talking about how the so dearly want their childrenn to go to school and learn. And guess who is stepping up to the plate to build schools, I mean Madrasas. The parents say. "well I would rather my children not be learning that other stuff, but... at least they are learning to read, etc."  

Get rid of the threat from Saddam... great. But we didnt have to go to war to do it.  

Get rid of the Taliban and Al Qaeda from Afghanistan... wonderful idea. But we should have put enough into it to do it right and not let things just shift next door to Pakistan because we were throwing most of our troops into Iraq.

It looks to me like we made things a looooot harder and costlier than they ever needed to be, for our country and the other countries involved.

[HazMatCFO]

quote:Originally posted by FOTD

1-20-09 can't come soon enough....

For Immediate Release
Office of the Press Secretary
December 16, 2003

Remarks by the President at Signing of the American Dream Downpayment Act - Washington, D.C.

THE PRESIDENT:...One of the biggest hurdles to homeownership is getting money for a down payment. This administration has recognized that, and so today I'm honored to be here to sign a law that will help many low-income buyers to overcome that hurdle, and to achieve an important part of the American Dream.

I want to thank the representatives of the consumer and housing groups that worked hard on this piece of legislation. I want to thank leaders of the national community organizations that are with us, and members of the real estate industry.

This administration will constantly strive to promote an ownership society in America. We want more people owning their own home. It is in our national interest that more people own their own home. After all, if you own your own home, you have a vital stake in the future of our country. And this is a good time for the American homeowner. Today we received a report that showed that new home construction last month reached its highest level in nearly 20 years. (Applause.)

Many people are able to afford a monthly mortgage payment, but are unable to make the down payment. So this legislation will authorize $200 million per year in down payment assistance to at least 40,000 low-income families. These funds will help American families achieve their goals, and at the same time, strengthen our communities.

And there's more to do, as well. We'll continue to pursue a broad agenda to help people own a home. There are three steps I want to describe to you right quickly about what we intend to do. First, those who apply for mortgages should be made aware of all the costs and warned about predatory lenders who take advantage of inexperienced buyers. So we've doubled the funds for housing counseling services, including those run by faith-based and community groups.

We understand that buying a home for the first time is complicated, and we want to simplify the process. We want to help people understand the pros and cons of buying a home. We want people to be fully aware of what it means to buy a home and what it takes. And we want people as best protected as possible from those shysters who would take advantage of first-time buyers. (Applause.)

Second, we need to make the home-buying process more affordable. Some of the biggest up-front costs in a home purchase are the closing costs. Sometimes they catch you by surprise. (Laughter.) Many home buyers do not have the time to shop around looking for a better deal on closing costs. You're kind of stuck with what you're presented with. And so they end up paying more than they should. So we've proposed new rules to make it easier for buyers to shop around and to compare prices on closing costs, so they can get the best deal and the best service possible.

And thirdly, we want to make buying a home simpler. Many first-time buyers look at the paperwork from a loan application, and frankly, get a little nervous about all the fine print. Those forms can be intimidating to the first-time home buyer. They can be intimidating to the second or third-time home buyer, too.

And so now it my honor, right here at this important Department, the Department responsible for encouraging homeownership in America, to sign the American Dream Downpayment Act. (Applause.)

(The bill is signed.) (Applause.)

http://www.whitehouse.gov/news/releases/...

- the federal seeds of the bubble that gave the moral and financial backing to re, mortg, and wall st securitizing machine. all those short term profits and housing #s sure looked good for a while, and some subprime folks got to rent a nice place, but as we all know now there is hell to pay.

I didn't read anywhere in the comments by President Bush where he said to lend money to people with bad credit. It seems to me you're assuming all people with low income or first time buyers that were the targets of this program have sub-prime credit and the initiative to provide down payment assistance started the sub-prime crisis of today.

I just don't see that.

Besides, $ 200 million a year even leveraging let's say $ 4 billion in mortgages per year and ALL to sub-prime borrowers ( which there's no evidence of this ) is just a drop in the bucket. The total value of sub-prime ARMs is in the $ 500 billion range. So at best, you may have $ 16 billion of $ 500 billion in mortgages from this program and it's the root of the problem? That's only 3% of the total and not even a blip. I think the blame Bush movement goes way too far and is too easy of a crutch.  

I blame the mortgage industry and bankers for getting too greedy and home buyers speculating on rising home prices plus expecting low interest rates in perpetuity more than a small, $ 200 million a year program from the Feds as the principal reason why the sub-prime mortgages are causing problems now.

[FOTD]

^ You remove the belts and suspenders and the pants fall down....

[spoonbill]

quote:Originally posted by TheArtist

Well thats one way to see things. But I dont really think that Al qaeda or the Taliban are as defeated as you say they are. Sure things look to be going well in Iraq but people always seem to frame it as the war was needed in the first place. Lets go back a bit in time shall we.....

Remember right before the war there were these things called "no fly zones".  Basically Saddam was boxed in unable to really do much of anything in either the north or the south parts of the country. The Kurds in the North were already showing signs of independance, a budding free market economy was starting. The Shia in the south were also starting to rally and throw off the shackles. When Saddam tried to move some tanks into the south. We flattened them from the air. The inspectors were doing their job, though yes indeed Saddam was not making it an enjoyable experience.  

We could have kept squeezing him, slowly whittling away his power and control, while at the same time encouraging the growth of free government institutions and budding new economies in the north and south of the country.

In other words, with a bit of wisdom, will and patience we could have effectively neutralized any threat "real or imagined" that Saddam posed, WITHOUT thousands of Americans losing their lives and without such a loss in treasure as well. Without stirring up chaos, destruction and so much loss of life for the people in those areas that were already starting to turn the corner and build new lives. There was no alqaeda in those areas and the locals would not have allowed them to come in.

We should have also focused more effort in Afghanistan. We still need to, for from what I can tell things arent going that well there. Plus now the Taliban and Alquaida have an even stronger presence in Pakistan. Their presence in Pakistan is stronger and more of a problem there than it ever was in Iraq. "they certainly have more of a presence in Iraq now than they  did before the war as well". How anyone can say there are now fewer Taliban and Al Quaida in the world now than there was before the wars, baffles me.  

We should have, and still need to use the power of education to clip the growth of progress of Muslim fundamentalism in places like Africa. I cant tell you the number of times I have seen articles and news programs that show people there talking about how the so dearly want their childrenn to go to school and learn. And guess who is stepping up to the plate to build schools, I mean Madrasas. The parents say. "well I would rather my children not be learning that other stuff, but... at least they are learning to read, etc."  

Get rid of the threat from Saddam... great. But we didnt have to go to war to do it.  

Get rid of the Taliban and Al Qaeda from Afghanistan... wonderful idea. But we should have put enough into it to do it right and not let things just shift next door to Pakistan because we were throwing most of our troops into Iraq.

It looks to me like we made things a looooot harder and costlier than they ever needed to be, for our country and the other countries involved.

We did stand back and observe, for years. We and the useless UN, set forth no-fly zones, economic restrictions, and requirements.  Meanwhile his Bath party murdered over 600,000 Iraqi citizens and continued to smuggle tons of weaponry from Russia and China.  They used/tested chemical wepons purchased from the German company Karl Kolb and used them in a test to kill 5,000 Kurds in 88.  



Sorry for the disturbing image, but it's amazing how fast the american public forgets, and amazing how we can say things like: (your quote) We could have kept squeezing him, slowly whittling away his power and control, while at the same time encouraging the growth of free government institutions and budding new economies in the north and south of the country.  

This is what they did to the very people we were making an impact on.  The Kurds were our friends in the North that we were providing support to.  

So, what did we do?  We lobbed cruse missiles at strategic targets from a distance and watched it on CNN.  I am not a military strategist, but the only way that has been proven over and over again to win a war is to have thinking troops on the ground.

In Iraq, the Samarra complex used to produce and stockpile the three lethal gas compounds of mustard gas, Tabun gas, and cyanide acid. Each time, the defunct regime claimed that the factories in Samarra was a complex of scientific research laboratories to produce pharmaceuticals and insecticides to protect the fluoride in the soil. (from the Federation of American Scientists).

We were on the brink of total de-stability in Iraq.  Iran was ready to invade in the wake of the Arab 911 celebrations.  Israel was ready to strike Iran from the air, and the world was on the brink of total loss of control in the middle east that would result in the crippling of all major world economies.

So, I must discount your proposed strategies as near-sighted.  There were more reasons to go into Iraq than WMDs or Al Qaeda or just Sadam.  Unfortunately, we have become a "sound-bite" society, requiring politicians must give reasoning for decisions in 5 second MTV generation friendly format, and the  media then boils that down to simple buzz-phrases that other politicians can regurgitate for poll numbers.

Looking at the conflict with fresh eyes, yes there were things we could have done better, done earlier, done with more veracity.  Unfortunately when we as a country make the tough decision to go to war, we have to fight on two fronts.  We have to fight the enemy, and our own media misinformation system.  

So, the "anything but this" mentality does not fly with me.  Consider it a "no-fly-zone."  

So rather than "armchair general-ing," I would like for someone to provide me with a reason why we should have left Sadam in power.

[TheArtist]

You know danged well there were no mass killings of civilians when the no fly zones were being enforced. They couldnt fly a single helicopter or plane to gas anyone. They couldnt even move a column of tanks into either area. Those things you were describing happened years before. Actually he did the most killing when he was our "friend" before either war and then after the first Persian Gulf war when we left and he "punished" those that helped us. The world was not on the "brink of war with Iran wanting to invade etc". Before this war when the no fly zones were being enforced, there was even talk of just splitting up Iraq into 3 countries. I remember reading newsweek and Time stories showing the budding economies and freedoms in Kurdish Iraq. Turkey was complaining that it might turn into a Kurdistan, etc. There wasnt any mass murdering going on. I think you must be getting your first Iraq war mixed up with this one.

[we vs us]

quote:Originally posted by spoonbill

quote:Originally posted by TheArtist

Snip

There were more reasons to go into Iraq than WMDs or Al Qaeda or just Sadam.  Unfortunately, we have become a "sound-bite" society, requiring politicians must give reasoning for decisions in 5 second MTV generation friendly format, and the  media then boils that down to simple buzz-phrases that other politicians can regurgitate for poll numbers.

Wow.  No, actually there weren't.  And actually those reasons were wrong, too.

You know, Spoonbill, almost your entire comment was utterly and verifiably false.  Your facts are wrong, and when they're not, your context and timeline is. I don't have the time to refute each sentence you wrote, but I can do it.  It's not hard.  All the information is available, and it's plentiful, as well.

I'd also like to point out that that information has been available since before we went to war.  It's not new.  And I'll bet it isn't even new to you, though I'm sure you've dismissed it as lies created by "politicians" (probably all liberals) to win elections.

I'd like to talk about the economy again now, please.  

[spoonbill]

Gonna have to dissect this one.

quote:Originally posted by TheArtist

You know danged well there were no mass killings of civilians when the no fly zones were being enforced. They couldnt fly a single helicopter or plane to gas anyone. They couldnt even move a column of tanks into either area. Those things you were describing happened years before.

You are correct, the no fly policy stopped the use of chemical weapons, however in Basra and Al-Hillah they rounded them up and shot them.  And you are incorrect, they were able to move assets by ground, though we were successful in intercepting and destroying a small percentage.

quote: The world was not on the "brink of war with Iran wanting to invade etc". There was even talk of just splitting up Iraq into 3 countries.

There was discussion in the media and amoung some congressmen, but not in the real world, and would make for a really stupid idea.  Sunnis in the north and Shiites in the south setting up the cards for another war.  Segregation imposed by the West on a foreign country, Wow!  Great Idea.

And yes Iran's goal was to destabilize the region. For eight years in the early 80's Iraq and Iran were at war (known as THe Iranian Holy Defense) resulting in over 100,000 Iranian casualties from Iraq's chemical attacks and over 1,000,000 casualties total.  The war was supposidly fought over control of oil fields, but if you talk to any Iraqi or Iranian they will tell you that the conflict goes back for centuries going back to the sovereignty of Khuzestan.  Iraq was battled back but Iran still to this day works very hard to position themselves to conquer Iraq.

quote:I think you must be getting your first Iraq war mixed up with this one.

There is only one Iraq war.  There was a brief ceasefire in which Iraq was supposed to comply with UN resolutions and was warned of the consequences.  We never went through with the consequences we had promised because of UN and administration weakness.  We then had a new administration and followed through.

[rwarn17588]

<spoonbill wrote:

There is only one Iraq war. There was a brief ceasefire in which Iraq was supposed to comply with UN resolutions and was warned of the consequences. We never went through with the consequences we had promised because of UN and administration weakness. We then had a new administration and followed through.

<end clip>

And $1 trillion, 600,000 Iraqi lives and 4,000 American lives later for a war against a country that had nothing to do with 9/11, we definitely see consequences.

And I question whether you really *are* willing to open your wallet, spoonbill. The $1 trillion figure on the war (which is conservative, BTW) means $3,333 for every man, woman and child in the United States. If you U.S. came to you and said "pay up," would you?

By the time Bush leaves office, the national debt would have doubled on his watch. It was about $5.5 trillion and falling when he started. It's now $9.1 trillion and counting fast.

That's what drives me nuts about modern Republicans and Reaganites (I was a former fan of the latter). Both talk a lot about fiscal responsibility, but both are failures at it. The national debt was mostly stable for nearly 40 years, then rose dramatically on Reagan's and Bush I's watch, starting leveling off and dropping during Clinton, then started rising fast again on Bush II.

Such reckless spending has real consequences on the economy for many, many years. And based on recent history, the Republicans aren't the ones providing solutions.

[spoonbill]

quote:Originally posted by rwarn17588

<spoonbill wrote:

There is only one Iraq war. There was a brief ceasefire in which Iraq was supposed to comply with UN resolutions and was warned of the consequences. We never went through with the consequences we had promised because of UN and administration weakness. We then had a new administration and followed through.

<end clip>

And $1 trillion, 600,000 Iraqi lives and 4,000 American lives later for a war against a country that had nothing to do with 9/11, we definitely see consequences.

And I question whether you really *are* willing to open your wallet, spoonbill. The $1 trillion figure on the war (which is conservative, BTW) means $3,333 for every man, woman and child in the United States. If you U.S. came to you and said "pay up," would you?

By the time Bush leaves office, the national debt would have doubled on his watch. It was about $5.5 trillion and falling when he started. It's now $9.1 trillion and counting fast.

That's what drives me nuts about modern Republicans and Reaganites (I was a former fan of the latter). Both talk a lot about fiscal responsibility, but both are failures at it. The national debt was mostly stable for nearly 40 years, then rose dramatically on Reagan's and Bush I's watch, starting leveling off and dropping during Clinton, then started rising fast again on Bush II.

Such reckless spending has real consequences on the economy for many, many years. And based on recent history, the Republicans aren't the ones providing solutions.

National Debt, the ghostly refuge of the left.

Interestingly enough, there is no national debt- at least it's not real merely imaginary. The Congress 'borrows' inland bills of exchange, (credit; not substance), from a private corporation. The country supposedly owes interest on credit extended from a corporation.

If we borrow mere credit from someone there is no substance owed, the debt is a book keeping 'legal fiction'. The USA pays/owes the 'fed' for credit circulating at banks. If we 'borrow' from a bank or use 'credit' cards we expand the supply- as the supply is merely an imaginary book keeping item.

The Federal Reserve Bank has the power to adjust the debt through many instruments, however it has no need to unless inflation grows at an unhealthy rate, production begins to wain, or we begin to go into recess.  

Unfortunately, this big imaginary number has become the beach-ball of the left and the right.  It is simply a measuring tool, and as long as it is managed through the regulation of interest rates, printing of currency and a host of other means.  In economics there are "measures" and "indicators."  The national debt is considered a measure because it has never been proven to indicate anything.  

The sad thing, is that there are so many ways to calculate the national debt because the amounts very depending on what focus is taken.  Some simply look at general fund dollars, and some take Social Insurance fund cash as the focus.  Investment capital in bonds with varying maturity dates also influences the calculation of this "boogie-man" number.

I would argue that as our GNP grows over time, our debt should also grow as a sign of our economic flexibility.

So, to answer your question, I'll will be happy to pay my imaginary bill with my imaginary checkbook.

[rwarn17588]

It's fascinating that you would call the deficit "imaginary," not to mention ironic since such a notion can be considered only as delusional.

Tell China and all the other parties that are loaning to the U.S. government that the money is a figment of their imagination. Tell Tom Coburn that the deficit is "fiction." Tell the Federal Reserve chairman.

I don't know how you can post here anymore after shooting your credibility to hell like that. Saying that the deficit is imaginary is just insane.

[spoonbill]

quote:Originally posted by rwarn17588

It's fascinating that you would call the deficit "imaginary," not to mention ironic since such a notion can be considered only as delusional.

Tell China and all the other parties that are loaning to the U.S. government that the money is a figment of their imagination. Tell Tom Coburn that the deficit is "fiction." Tell the Federal Reserve chairman.

I don't know how you can post here anymore after shooting your credibility to hell like that. Saying that the deficit is imaginary is just insane.

Oh my lord, I don't understand why I have to spend so much time on this, It's very simple. . . And as for China, we are the best investment in the world, we service our notes with more reliability than any other country.  You are simply not understanding what the National Debt number is!  If this is your concept of debt as just a negative, rather than a tool, than please, for your own good, say out of banking or investing.

I'll give you a different view:

Steve Conover Writes in the Skeptical Optimist:

Whether you're left of center or right of center (...or you don't care to be measured relative to whatever "center" means), today's budget deficit of 1.2% GDP is a non-issue.

That is, unless you're one of those on the left or right who likes to play political games with deficits.  A few politicians and concerned citizens disliked the idea of deficits so much they formed an organization, in the '80s I think, called The Concord Coalition.  (I wrote them a letter nine years ago, but haven't yet received an answer.  I'm starting to think someone lost it at the bottom of her inbox, or buried it in Concord's too-hard-to-do file.  Too bad; back then we still had three years left to shift our priorities before 9/11/01 arrived.)

Recently, I've noticed left-leaners having some rhetorical fun with the deficit.  Their typical assertion:

"No wonder the administration touts the 'unified budget deficit'; it looks really small.  Why don't we ever hear about the deficit that really matters, the dreaded, bloated General Fund deficit?  It's a sinister plot to keep you uninformed about the tragic raid of the social insurance trust fund surpluses."

Yes, and I'm sure Karl Rove was behind that plot, too.

Well, now it's my turn to have some fun with deficits.  First, let's review what has happened in the last fiscal decade (i.e., ten years ending October 2007).  The federal government's receipts and outlays net out to the surpluses and deficits shown in the far right column below:



The bottom right corner, $1.1 trillion, is the ten-year increase in publicly-held debt -- which most economists (...those who refuse to let politics get in the way of economics, anyway) say is the most important of several measures of federal debt.  Here's an excerpt from a summary page at the US Treasury website:

Debt held by the public is the most meaningful of these concepts and measures the cumulative amount outstanding that the government has borrowed to finance deficits.

So, let's see what the deficits look like under three different accounting scenarios.  The first is the way the feds actually chose to account for the receipts (because it's the law).  Here's what the deficits look like; the orange star is the additional amount that was borrowed from the public.



Now for the fun part.  Let's "shore up" the General Fund, just by assuming the law mandated accounting for the receipts a little differently.  (Note: same total receipts, same total outlays, nobody's social security check changes by even a penny.)  All we do in Scenario 2 is call all social insurance receipts by a different name: "General Fund supplemental taxes."



Note that there's no change in the amount borrowed from the public (see orange star); we just changed which government pocket owes government-backed money to the other government pocket.

Now let's assume the law mandated that all trust fund surpluses be classified as "General Fund supplemental receipts."  (Again, same total receipts, same total outlays, nobody's social security check changes by even a penny.  Again, we just changed how much one government pocket owes government-backed money to the other government pocket.  Again, no change in the amount borrowed from the public.)



Bottom line: Because the unified budget deficit is the change in publicly-held debt, that is the important deficit number to track.  It is currently 1.2% GDP; it's small.  When you hear anyone assert that the general fund deficit is a more important number, start suspecting a political agenda attempting to masquerade as economics.

The never-mentioned way to keep the publicly-held debt to a comfortable percentage of GDP is to grow GDP at least as fast as the debt grows.   Because sufficient growth makes debt a non-issue, I wonder which candidates have some positive ideas about how to enhance the growth of the economy.  [A few Republicans do (...not all); but I'm having trouble remembering any specific growth proposals from any Democrats.  Maybe I haven't been listening enough; help me out if you know of some.]      

=========
End note:
If you know anyone who asserts that the above analysis is invalid because it "steals from the trust funds"—including your Senators or Congressman or Congresswoman, ask them how they'd answer the following brain teaser:

If you were in charge of financial management for the federal government's social insurance trust funds, and the trust funds ran a surplus, would you:

(a) hoard the US-government-backed cash; or

(b) exchange it for interest-earning US-government-backed bonds?

If they picked (a), ask them why they'd choose not to earn interest on their multi-trillion dollar financial asset.  If they picked (b), congratulate them for choosing the method by which trust fund surpluses are already being managed.

[FOTD]

Too much of our economy is hinged on "the house" and our ability to use it as a source of financing lifestyle.

This needs to be broken or we will be in this boom/bust RE cycle for years to come. No other nation operates like this. In many nations mortgages are not tax deductible or max loan period is only 15yrs.

When boomers start retiring in earnest and trading down or heating / cooling costs triple you will se a rush to unload 2nd and 3rd homes.

So obvious.

[cannon_fodder]

Having lost the pulse of this thread in large amounts... I agree with you FOTD.  Home ownership should not really be encouraged in the manner it currently is.  Many people would be better off in an apartment in the long run or find they prefer NOT to have the pain in the donkey or really can not afford a house... and get burned.

[Conan71]

This time around I'd agree that too much "image" of the economy hinges on the house.  What is different this time with the new foreclosure glut is it wasn't the result from massive unemployment or plunge in a major commodity which suports a lot of lifestyles.