Is this an accurate assessment of the US financial situation?

[Tom]

This is probably the most significant thing that we could do right now to start bringing our healthcare costs down. We simply do not have the resources to spend hundreds of thousands of dollars on EVERYONE to extend their lives a month or two. I know its a shitty conversation and I know damn well that if it was me or a loved one that I would want them to spend whatever it took but the fact is we simply can not continue to do this.

That isn't necessary or going to happen.

1. healthcare providers income needs to flow from the health of their patients, not from the amount of services they perform on each patient.

2. uninsured people leads to healthcare being provided in expensive and inadequate ways. people need health monitoring before they get sick, like regular physicals and check-ups, where doctors can catch illness, and advise patients about lifestyles.

These changes could cost less overall, and increase productivity through a healthier population.

 

[chucky2]

If advising patients of bad lifestyle choices is going to be the cure-all, or, even a major part, of what is going to bring HC costs down, then we're F'd. I think in the year 2012, it's quite safe to assume sucking down fried whatever, fast food, little exercise, is terribly bad for you. Even the most progressive, dumb, low lifes I've had the (dis)pleasure of knowing get this.

They simply don't care - enough to actually change.

Better find a new argument, that one ain't gonna fly...

Chuck

 

[Pr0d1gy]

Well lets see, since it is so popular from the Democrats, I am sure you can appreciate a little blame game. Reagan was handed over 10% unemployment; gee I wonder why revenue was down..... The revenue decline for Bush Jr. started Oct 2000 before he was even in office and almost a year before his first tax policy was put into place. As you can see, or maybe you don’t want to see, revenue was quick to recover in both instances.

Globalization started in the 70's, thus the unemployment. Revenue went way down during Reagan's administration because he lowered taxes on the top earners from 70% down to 29% over the course of just 8 years whilst also increasing spending. That's right, I said INCREASING SPENDING, just like every Republican who followed him. So get off your fucking high horse, do some research, and wake the fuck up.

 

[Doc Savage Fan]

Globalization started in the 70's, thus the unemployment. Revenue went way
down during Reagan's administration because he lowered taxes on the top earners from 70% down to 29% over the course of just 8 years whilst also increasing spending. That's right, I said INCREASING SPENDING, just like every Republican who followed him. So get off your fucking high horse, do some research, and wake the fuck up.

Do you understand the concept of inflation and it's impact on government spending? I thought not.

http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx

If you want a more realistic picture of spending, you need to evaluate it in terms of percentage of GDP. Reagan held office from 1981-89. He did a decent job of holding down government spending especially when compared to Bush and Obama. In contrast, it's interesting to note how well Clinton did in this particular area.

Federal Spending as a Percent of GDP

Also, after getting through the double dip recession he inherited from Carter (the 2nd worst recession in US history since the Great Depression), Reagan did a good a job of increasing revenues as a percentage of GDP. His economic policies formed the basis for the 20+ years that economists call the Great Moderation. Consider this...if anyone should do some research and "wake the fuck up"...it's you.

Federal Revenues as a Percent of GDP

The Great Moderation

 

[Doc Savage Fan]

Can someone please explain how our financial situation got so bad? I'm not sure too many Americans understand it, let alone are able to describe the problem.

The message I'm getting is that the overall expenses have continually outpaced the revenue coming in, and this has been going on for years with a compounding effect. So when bills that provide services get signed into law and do not get enough funding, we borrow to cover the costs, and this adds to the national debt. So now we're forced to fund the expenses and service the debt.

Has it occurred to anybody that it is disingenuous and irresponsible to continue funding programs that were built on money that isn't there? I'm not suggesting scrapping all government services, but an influx of revenue from taxing the rich, or all taxpayers for that matter, is not addressing the root cause. And this feel good "balancing the budget" sounds an awful lot like "we'll find ways to pay for this year's budget items even if we project 10 years out." Doesn't address the existing debt, right?

I'm not trying to make this political, but is this accurate? If not, please correct.

Good question!

If you want to get a good understanding of why our financial situation is so bad, you need to spend about 10-15 minutes looking at this (63 slides). You will get a very clear picture of our problems and what we need to do to fix it.

http://www.businessinsider.com/poli...had-a-big-unusual-hiccup-in-economic-growth-1

 

[Jaskalas]

Actually that's pretty innacurate.

We had one party drastically reduce revenue then prevent the other party from restoring it.

It's a revenue problem, not a spending problem.

Take away the Bush tax cuts and the terrible economy which is hopefully temporary and the deficit is back to what it has been historically as a percent of GDP.

You get a whole $68 billion a year. That'll fix everything!

 

[piasabird]

There are no problems and everything is fine.

There is a Halo Above his Head!

The democrats will solve all your problems. If you dont believe this, then why did you reelect them?

No problem here just pretend everhthing is OK.

 

[piasabird]

When you elect tax and spend liberals that is what you get.

 

[Darwin333]

When you elect tax and spend liberals that is what you get.

Versus spend and cut tax Republicans?

 

[Darwin333]

This is not accurate by any economics I am aware of. When the economy is deeply depressed, government spending utilizes productive capacity that would otherwise go unused, thus increasing GDP and adding a multiplier effect. When the economy is working well, government spending takes up resources that would otherwise be employed by the private sector. (crowding out). It is not at all true that the presence or absence of government spending always means the same dollar impact.

That is completely beside my actual point but if you want to argue that when the .gov spends deficit money they get more than $1 of GDP out of every dollar they spend yet when they remove that dollar only $1 of GDP is removed that is fine.

The bottom line, and my main point, is still a very simple concept to grasp, when the government removes deficit spending the economy must contract by at least the amount they pulled out.

 

[Darwin333]

That isn't necessary or going to happen.

1. healthcare providers income needs to flow from the health of their patients, not from the amount of services they perform on each patient.

2. uninsured people leads to healthcare being provided in expensive and inadequate ways. people need health monitoring before they get sick, like regular physicals and check-ups, where doctors can catch illness, and advise patients about lifestyles.

These changes could cost less overall, and increase productivity through a healthier population.

On your first point, are you saying that if a hospital performs emergency surgery on someone and that person doesn't make it they shouldn't get paid or are you talking about strictly GPs?

Do you have any clue what end of life healthcare costs us right now? What it costs to keep someone whose body is failing, often due to their own lifestyle choices, alive for just a few more months?

 

[Pr0d1gy]

Also, after getting through the double dip recession he inheritied from Carter (the 2nd worst recession in US history since the Great Depression), Reagan did a good a job of increasing revenues as a percentage of GDP. His economic policies formed the basis for the 20+ years that economists call the Great Moderation. Consider this...if anyone should do some research and "wake the fuck up"...it's you.

You really think getting handed the biggest economic tech boom of the 20th century had anything to do with his policies? That is the problem with you idiots, you want to give credit to the leaders and the companies when it is really the schools and the scientists that made this happen. What happened in the 80's to increase revenue despite his rape of the tax rates?

Well, let's see, the home PC, video game consoles, along with a litany of other new tech that caused a huge upswing in consumer spending. Just like with the .com bubble in the 90's it wasn't going to last forever but to give Reagan all this credit is like saying Clinton was the cause for the greatest economy this country has ever seen. It's just a complete up and down bullshit fallacy.

So get over yourself and shut the fuck up the next time you want to call bullshit on someone, lest you get shown the door again.

 

[werepossum]

You get a whole $68 billion a year. That'll fix everything!

Obama has announced his intention to not only repeal the tax cut on the highest earners, but to increase their rates, so instead of $70 billion per year/$700 billion per decade we'd get an additional $120 billion per year/$1.2 trillion per decade. Of course, we won't see all that - some people will simply retire, restructure into capital gains, or move their activity off shore. But best case, that fills a tenth of our deficit.

Of course, that is a tenth of our existing deficit. We're adding people to government programs at record rates, and several months we've had more new enrollments in Social Security disability than have found jobs. We're already spending the equivalent of TARP and the auto bailout every year, and no doubt Obama's going to want some new spending as well.

We are well and truly screwed, and we have no one else to blame.

 

[Doc Savage Fan]

You really think getting handed the biggest economic tech boom of the 20th century had anything to do with his policies? That is the problem with you idiots, you want to give credit to the leaders and the companies when it is really the schools and the scientists that made this happen. What happened in the 80's to increase revenue despite his rape of the tax rates?

Well, let's see, the home PC, video game consoles, along with a litany of other new tech that caused a huge upswing in consumer spending. Just like with the .com bubble in the 90's it wasn't going to last forever but to give Reagan all this credit is like saying Clinton was the cause for the greatest economy this country has ever seen. It's just a complete up and down bullshit fallacy.

So get over yourself and shut the fuck up the next time you want to call bullshit on someone, lest you get shown the door again.

If Reagan got handed anything it was a double dip recession and double-digit inflation "you idiot". And Clinton was the main beneficiary of the tech boom "you idiot". Also, the reason tax revenues increased during Reagans tenure (despite the tax cuts) was because he got the economy moving again with his economic policies "you idiot".

Edit: BTW, Clinton did a damn good job with the economy "you idiot". Clinton and Reagan were the best 2 presidents we've had in the last 60 years imo.

 

[Darwin333]

If Reagan got handed anything it was a double dip recession and double-digit inflation "you idiot". And Clinton was the main beneficiary of the tech boom "you idiot". Also, the reason tax revenues increased during Reagans tenure (despite the tax cuts) was because he got the economy moving again with his economic policies "you idiot".

Edit: BTW, Clinton did a damn good job with the economy "you idiot". Clinton and Reagan were the best 2 presidents we've had in the last 60 years imo.

Lol. You are both wrong but I don't want to interrupt the pissing contest so please do continue.

 

[Nemesis 1]

Can someone please explain how our financial situation got so bad? I'm not sure too many Americans understand it, let alone are able to describe the problem.

The message I'm getting is that the overall expenses have continually outpaced the revenue coming in, and this has been going on for years with a compounding effect. So when bills that provide services get signed into law and do not get enough funding, we borrow to cover the costs, and this adds to the national debt. So now we're forced to fund the expenses and service the debt.

Has it occurred to anybody that it is disingenuous and irresponsible to continue funding programs that were built on money that isn't there? I'm not suggesting scrapping all government services, but an influx of revenue from taxing the rich, or all taxpayers for that matter, is not addressing the root cause. And this feel good "balancing the budget" sounds an awful lot like "we'll find ways to pay for this year's budget items even if we project 10 years out." Doesn't address the existing debt, right?

I'm not trying to make this political, but is this accurate? If not, please correct.

The Problem isn't taxing people . The problem is the freee ride the poor want . The ones that I know who are really poor deserve it . Their lazy , Stupid and second generation welfare types . They have plenty of money for Drugs and Alky, But not for food or paying bills . Yes I KNOW special needs and thats another subject. The other problem is the gooberment is the USAs biggest employer. They Are way over paid for the amount of work they do . And their retirement benies are way better than private sector . Problem is they want to Reduce SS, But than want me to pay for their beneies and retirement . Many millions are not qualified for those jobs .

 

[ivwshane]

You are so fucking disengious it's not even funny! What happens when an economy tanks? Just look at the chart you posted, do you see that big spike at the beginning of Reagan's 1st term? Gee I wonder what caused that? I'm sure the even bigger economic crises Obama took over had nothing to do with the big spike under his term!

Do you understand the concept of inflation and it's impact on government spending? I thought not.

http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx

If you want a more realistic picture of spending, you need to evaluate it in terms of percentage of GDP. Reagan held office from 1981-89. He did a decent job of holding down government spending especially when compared to Bush and Obama. In contrast, it's interesting to note how well Clinton did in this particular area.

Federal Spending as a Percent of GDP

Also, after getting through the double dip recession he inherited from Carter (the 2nd worst recession in US history since the Great Depression), Reagan did a good a job of increasing revenues as a percentage of GDP. His economic policies formed the basis for the 20+ years that economists call the Great Moderation. Consider this...if anyone should do some research and "wake the fuck up"...it's you.

Federal Revenues as a Percent of GDP

The Great Moderation

 

[Arglebargle]

every couple years this issue comes up, but we stuff it back down and bury it because no one's willing to deal with the fundamental flaws of social security, medicare, and medicaid. no one will fix it, and they will only use band-aid solutions. It's time to bite the bullet and make a solvent system.

The fundamental flaw of social security was that it's funds were stolen by generations of politicians. Without that fraud, it would be rolling in dough.

 

[Arglebargle]

USA in 1980: Largest creditor nation in the world.
USA in 1984: Largest debtor nation in the world.

USA in November 2000: Economy starts to go south as business world realizes what's just happened.

USA in early 2008: Birds start coming home to roost.

 

[PJABBER]

 

[chucky2]

USA in 1980: Largest creditor nation in the world.
USA in 1984: Largest debtor nation in the world.

USA in November 2000: Economy starts to go south as business world realizes what's just happened.

USA in early 2008: Birds start coming home to roost.

Keep smokin that good shit, lifes short...

 

[OverVolt]

http://www.youtube.com/watch?v=NZWJ7WPVD_c

The ascent of money explains all.

Perhaps most important, The Ascent of Money documents how a new financial revolution is propelling the world's biggest countries, India and China, from poverty to wealth in the space of a single generation—an economic transformation unprecedented in human history.

Yet the central lesson of the financial history is that sooner or later every bubble bursts—sooner or later the bearish sellers outnumber the bullish buyers, sooner or later greed flips into fear. And that's why, whether you're scraping by or rolling in it, there's never been a better time to understand the ascent of money.

Kind of important to realize.

 

[OverVolt]

You guys should pretty much be required to watch all 6 episodes before you can post.

 

[OverVolt]

The fundamental flaw of social security was that it's funds were stolen by generations of politicians. Without that fraud, it would be rolling in dough.

The baby boomers trusted other people with their money. Mistake #1. So long as the baby boomers were paying in, all was well. So long as there was a huge demographics prime working base, all was well.

 

[OverVolt]

You really think getting handed the biggest economic tech boom of the 20th century had anything to do with his policies? That is the problem with you idiots, you want to give credit to the leaders and the companies when it is really the schools and the scientists that made this happen. What happened in the 80's to increase revenue despite his rape of the tax rates?

Well, let's see, the home PC, video game consoles, along with a litany of other new tech that caused a huge upswing in consumer spending. Just like with the .com bubble in the 90's it wasn't going to last forever but to give Reagan all this credit is like saying Clinton was the cause for the greatest economy this country has ever seen. It's just a complete up and down bullshit fallacy.

So get over yourself and shut the fuck up the next time you want to call bullshit on someone, lest you get shown the door again.

fundamentally they are all credit bubbles, each one smaller than the last. The tech bubble was a commercial and stock market investment bubble. Massive amount of investment. In terms of loan size, the types of loans to start businesses are the biggest.

Next was the housing bubble, again nothing gets the money flowing like large loans in rapid succession. Money velocity had hit around 2.2 at this time. People making transactions on multiples of their income, like someone who makes 50k buying a house worth 500k. So 10x their income spent in one year. Huge boom.

Housing bubble crashes, we get 2008.

QE restores liquidity and prevents the banking system from seizing up (the lending of credit) you see once the RATE of lending falls off a cliff, defaults SURGE and you would be stupid to lend money in that type of environment, causing a positive feedback loop. QE is meant to get into the hands of the banks, so that they can increase the rate of lending. QE3 is intended to get mortgages off the books, or to inflate the book value of MBS. That type of thing. Thats the reason its not causing inflation.

Current bubble is student loans. The bubbles get smaller you see? First venture capital, then housing, now student loans/automotive. Goes in order of the most expensive things that people own. 1. Businesses 2. Houses 3. Degrees/Cars.

Subprime auto loans are hot right now. Can't even buy a car under MSRP. In order to increase the RATE of lending, they need to make big loans, or make alot of loans to alot of people, or else the economy seizes up. Debt temporarily creates money and if the rate of lending ever decreases the number of defaults surge. Skyrocketing tuition is actually helping the economy (except those going to college of course). If student loan debt ever hits a plateau brace for another financial seizure.

This is one of the big reasons why the Pell Grant stayed on the table despite the deficit, as did the interest rate cut on student loans from 7.2% cut to 3.4%.