"...finally to break the bounds of reality and frolic and gambol in the magical fairy kingdom of Spendaholica..."

"United States of Handoutica"

Made me laugh!!!

However, this is a very serious matter. Every time I read these things, I feel like I am stuck in some strange dream. To continue this irrational spend, spend, spend crap is, how shall I say it, ? CRAZY!
No one in their right mind would think that this is a good idea.

Thanks - but, it is absolutely very serious.

I didn't get to discuss this on John Phillips' radio show the other day, but from my notes, "I hit my debt limit, VISA cuts me off."

Not that I ever spend more than I can pay for. (I use my credit card as a convenience, but treat it like a debit card.)

My Dad was a meat cutter, my mom a housewife. They were able to afford a nice house, yearly vacations, health care was taken care of by the union and never a concern, my brother and sister and I all have excellent and affordable college educations, and none of it was paid with debt, at least no long term debt (except the mortgage, of course).

It seems like whereever the government has flooded the market with money to make it more accessible to the average Joe, the results have been quite the opposite. Today health care, college education, etc. are increasingly out of the reach of two-working-adult households without going into long term indentured servitude.

It takes a lot of money to buy all of those votes. That is what it all comes down to. We are a nation of electoral whores.

Been fighting with a guy at work. He thinks Obama's getting a bad rap for sins that began in previous administrations... I've concluded that my friend, like my president, doesn't think any of this is real. As we were wrapping it up last night, he mentioned that when you consider all the household wealth in the United States, you don't have to worry that taxes are too high...

(Though you do, of course. Household wealth is about $44 trillion, and we have $61 trillion in unfunded liabilities.)

But that's where his head's at. He doesn't think wealth can be created: He thinks the rich white people have it all stashed away, so no more can be created. In order to make a better society, we're going to have to bust into people's lives and bank accounts and redistribute their wealth.

McCardle has warned about this, too: The United States could start raiding private retirement accounts, just like they do in Venezuela.

I'd like to think this is unlikely in a country with so many gun owners.

But make no mistake, Handout people are still going strong, and will be for the rest of time. They think they're more honest and nicer than other people, no matter how much misery they cause.

America will not get out of this crisis without being horribly diminished. It's the end of a fascinating experiment in human history... Because cowards were threatened by the results.

"whereever the government has flooded the market with money to make it more accessible to the average Joe, the results have been quite the opposite"

Bingo. That is exactly the case: if you flood money into something, guess what, the market will happily soak it up.

- Housing? Flood money into the market, and prices go up. Eventually that came crashing back down - in some neighborhoods, you can now get houses for 1/10 of what they sold for a few years ago.

- College? When every student can suddenly get an extra $50k towards college, the colleges no longer have any incentive to keep their costs under control. Unfortunately, the money doesn't go any place useful, like toward better labs or teachers. Instead, it gets soaked by by xxx-studies courses, ever-increasing administration, etc.

The liberal fallacy is that the government can solve social problems. In fact, in the long run, the government almost always makes matters worse, if only because of the sheer weight of the bureaucracy it creates.

Obama threatening Social Security checks is deliberately dirty pool. The first services to go will be the useful services - things that people depend on. More sensible would be to lay off entire useless departments: DEA, FDA, OSHA, USDA, Education, NEA, TSA. Of course, no one would miss them - in fact, the country would run better without them. For that reason, they will undoubtedly be the last things to go...

I personally almost am beginning to believe that what borat obozo and his cronies want is to turn us into the weimar republic, declare state of emergency, and run the country by decree. His tax schemes are nothing more than "redistributing the wealth" to the welfare moms and idealistic morons that voted him in. Also, when we say cut spending, everything needs to be cut. Grandma cant take the same pay cuts that the rest of us have had to endure over the last 3 years. I have never understood why social security and medicare funding crisis looming discussions always have focused on funding and not cutting the current payouts. Me personally, I have seen my SSN benefit pushed from 62 to 65 to 67 and a half over the last 8 years alone. The carrot just keeps moving so that we do not touch granny and her current stipend. If granny was so stupid as to not put money away to supplement her SSN payment, then that is granny and family's problem.

Amy wrote:

"Very, very few people really have the balls and integrity to say we need vast economic policy changes in this country (toward fiscal responsibility and conservatism), and in government overreach (and the ensuing costs), and in the expectation that there will be handouts at every turn...and that people DESERVE and are OWED these handouts."

The problem is that a politician who espouses those views could not get elected. Most of the people here would vote for him/her, but most others would focus on keeping their "entitlements".

The primary purpose of the pell grants is to give money to people who are unqualified for college to get "Credentials" otherwise known as degrees in subjects that there is no market demand for.....

I do love Saturday mornings. Long comment to follow. If you're feeling like tl;dr, please read the linked piece!

One thing that I have really been surprised by in the debt ceiling negotiations is that they have had virtually no effect on bond prices. Treasuries are getting snapped at top dollar up even though you'd think the markets would be starting to price in some risk, given the intractability of the current negotiations.

I suspect part of it has to do with there being few other options for organizations that need to hold a lot of cash-equivalent securities (the Euro isn't looking too good these days, China's opaque). Also that it's really hard to imagine U.S. politics going so far off the rails as to fail to approve a debt limit increase. Though I think any observer watching what has gone on with the negotiations should be worried about how far off the rails we have gotten.

Ladies and gentlemen, the last fiscal crisis and the next one... succinctly explained:

http://blogs.reuters.com/felix-salmon/2011/07/15/the-horrifying-aaa-debt-issuance-chart/

I have never understood why social security and medicare funding crisis looming discussions always have focused on funding and not cutting the current payouts.

Because seniors vote in droves, and punish elected officials who propose cuts to these programs. This is why in the Ryan budget, big changes to those entitlements don't kick in until years down the road – Republicans in particular are dependent upon the senior vote.

Obama threatening Social Security checks is deliberately dirty pool. The first services to go will be the useful services - things that people depend on.

I suspect he thought it effective politics. And it will be, in the event of a default. Obama has the bully pulpit and a compliant press corps. I suspect he will be able to use discretionary power to punish constituencies that vote for his opponents and blame the need to do so on Republicans. In the event of default, this will probably be an effective message.

Except, Republicans in the house plan to pass a spending-cuts only bill to raise the debt ceiling next week. Which will make blaming the other side more difficult.

Even though this is about numbers, it is also about the power of myths. I work at 87th and Ashland in Chicago which is totally African American and there is not even a hint that spending must be cut back. It's all a plot by "the man" to keep African Americans down. Since Obama is black every word against him is a conspiracy. You would not believe the totally loony tunes conspiracies I hear day in and day out that have serious traction in the community. I really believe there is no hope for these areas. And I mean none.

Yes, federal spending.
Look at where the federal employees are:

Department of Defense 3,000,000
Veterans Affairs 275,000
Homeland Security 250,000
Treasury 115,000
Justice 112,000
Energy 109,000
USDA 109,000
Interior 71,000

Labor 17,000
HUD 10,000
Education 4,487

I think all of these agencies should be whacked in half. Would not that put a crimp in federal spending?

BTW, the B2 bomber cost $3 billion, That's per plane. The "stealth" bomber has been used against three countries, all of which had ferocious air defense systems: Kosovo, Afghanistan and Iraq.

Still, we are just getting warmed up: The new Gerald Ford class of aircraft carriers are only $12 billion each, although they are easily sunk by missile or torpedo.

No worries--it is those Pell grants we got to cut.

(Though you do, of course. Household wealth is about $44 trillion, and we have $61 trillion in unfunded liabilities.)

The number is $534,000 per household. We can't afford it.

And Obama is lying about the what happens if congress doesn't raise the debt ceiling. They will have enough funds to pay the debt service, SS, and medicare. They just won't have enough money to pay all the bills. That would mean they would have to shutter some agencies, or cut back on the services for the time being.

I hope the House holds the line and doesn't give in.

Jim P-

I am happy with a radical scale back of Department of Defense, Homeland Security and the VA, and that is obviously where most of the employees are.

But that flies straight in the face of the GOP base.

Could it happen?

debt ceiling. They will have enough funds to pay the debt service, SS, and medicare. They just won't have enough money to pay all the bills. That would mean they would have to shutter some agencies, or cut back on the services for the time being.

Here, everyone can play with the budgeting priorities:

http://about.bgov.com/2011/07/12/august-invoices-show-u-s-treasury%E2%80%99s-limited-choices/

As mentioned above, I suspect Obama would, in the event of default, prioritize payments in such a way to exact maximum pain on Republican constituencies and priorities, while making sure Republicans are blamed for his need to do so.

I'm alo pretty sure this scenario also does not consider what will happen in the bond markets if we hit the debt ceiling without a deal. Which would be disastrous; probably making 2008 look like a good time.

Yields are almost certain to go up significantly, and our AAA rating may be threatened (reducing the number of buyers substantially), making borrowing massively more expensive and requiring that we divert even more money into debt service (lots of our debt is in short term treasuries that must be rolled over regularly). This in turn will require more cuts. The effect will certainly be to throw the U.S. back into recession - or depression - and probably take the world with us.

Those who are sanguine about what will happen in the event the debt ceiling is reached without a deal are insane.

> I am happy with a radical scale back
> of Department of Defense, Homeland Security
> and the VA, and that is obviously where
> most of the employees are.

There's no reason to assume, beyond your fevered Kentucky fantasies, that the fat is uniformly distributed.

Even those of us with burgeoning boners for government reduction don't imagine that cuts will or could be made in such a straightforward way. These agencies were created in response to political pressures, and that's how they'll die... And it's probably how they should.

I look forward to productive —urgent and productive— discussions about these relative values. It may prove that a mispriced education costs us more than a shitty airplane. People with weird ideas about what it means to be smart have done a lot of damage to the Republic in recent years.

We all hate the B2. I just read about military aircraft procurement: I grok, OK? But you like to presume Americans don't enjoy their security. Perhaps you misjudge them, just as you midjudge its source in your own life.

> Those who are sanguine about what will
> happen in the event the debt ceiling is
> reached without a deal are insane.

Sanguinity ain't the issue. Things are already bad. I wish the lefties —and the motherfucking Republicans for that matter— could understand this: I've lost faith in my government to spend money in a way that isn't directly injurious to my interests and to those of Americans I admire. If it cost more for government to do things, anything at all, well... My heart will go on.

You all understand that this is money that has already been spent, right? It's just a matter of whether or not we're going to make good on debt that has already been incurred. You know that, right?

Do you also know that President Obama has the largest debt reduction and most deeply cutting package on the table? The Republican objection is that it also includes a modest tax hike on the wealthy, returning to the tax rates we had during the nineties.

Republicans are the fiscally responsible party here? Really?

Mitch McConnell's idea is brilliant. Though he really should have kept his mouth shut and kept the back room sausage making in the back room. I'm afraid that he's sabotaged it by going public with it. His base is now pissed off at him.

His idea is what's best for the country while letting him and his fellow Republicans continue to speak to their base of idiots and tea-baggers. I was pretty impressed with McConnell. That was clever as hell.

Goddam spam filter: http://www amazon com/Boyd-Fighter-Pilot-Who-Changed/dp/0316881465

> it also includes a modest tax hike
> on the wealthy

You can't hear this: The problem is that the government spends too much money. I DON'T CARE WHERE THEY GET IT.

If it cost more for government to do things, anything at all, well... My heart will go on.

Interesting. So a greater proportion of our tax dollars going to debt service is a good thing, because the government can then spend less money on other things. Perhaps this is a corollary to Norquist's "starving the beast" idea?

Thx!

> So a greater proportion of our tax dollars
> going to debt service is a good thing

How could you possibly, possibly be so confused by short, simple words presented in black just inches front of your face?

I'll tell you how: You presume the cancer of government is going to spread no matter what.

This strikes me (even me!) as cynical. I think people will stop abusing government authority once there's no money in it. The United States private sector has proven itself the most rewarding environment the universe has ever know for people who want to achieve through effort.

If you'd told the Framers that life could be this good for this many just a couple centuries later, they'd not have believed it.

wD - Obama's "plan", if you can call it that, is massive spending increases, massive deficits, and massive tax hikes.

So, he intends to decrease the GDP while spending nearly twice as much as the government brings in, and you call it "fiscally responsible"?

Please.

This is very simple. Either we cut the government MASSIVELY, or we go broke and the whole experiment in self-governance goes to shit.

That's not hyperbole. It's not drama. It is the stone cold truth. Either we start to live within our means, or the whole fucking facade comes crashing down and we're back to feudal serfdom and the return to life in the time of Hobbes: "solitary, poor, nasty, brutish, and short"

the time of Hobbes: "solitary, poor, nasty, brutish, and short"

Especially if the Chinese and islamic militaries get stronger

You presume the cancer of government is going to spread no matter what... This strikes me (even me!) as cynical.

I assume that no matter what happens on August 2nd, the U.S. will need to issue new treasuries. A lot of our current debt is in short term treasuries. Even if the debt ceiling is not raised, we will still need to roll these bills over.

This is very simple. Either we cut the government MASSIVELY, or we go broke and the whole experiment in self-governance goes to shit.

The markets seem pretty confident in our ability to pay our debts. You are not wrong that we need to address our long-term fiscal health. But the only crisis right now is entirely self-created: the inability of our political leadership to make a deal on something they all understand must happen.

If we default, then it's clearly evidence that the experiment in self-governance has already failed.

Especially if the Chinese and islamic militaries get stronger

This is very, very, wrong.

There is no Islamic military that could not be defeated by a tiny fraction of our armed forces. A single carrier group is more powerful than the armed forces of any Islamic state.

China wants respect for its clout; it isn't a military threat. Their rapid growth and economic security (and through those, political stability) depend deeply on us.

Furthermore, we should expect and perhaps WANT that they should flex muscle in their region. Wouldn't it be great if they could mop up the Norks? Real slick 'n quiet, like?

@biff - what Christopher said. I'm more worried about social unrest caused by those dependent upon government largesse once the checks stop flowing.

@Christopher - The markets are jittery now that two major ratings agencies (S&P, Moody's) are talking about downgrading the US from AAA status even if the debt ceiling is raised.

Understand what that means. Two major ratings agencies (which screwed the pooch by overrating CDOs, by the by) are saying that they expect the United States to become less able to meet their obligations in the future.

We've reached the Thatcher Point: we have run out of other people's money.

> the only crisis right now is entirely
> self-created: the inability of our
> political leadership to make a deal
> on something they all understand must happen.

Who you callin' "self", Bub? Them's fightin' words. Well, something worse than votin' words, anyway.

Here come the uglies——

http://tinyurl.com/6jqp82j

@Crid - loved that article linked in the Instapundit post (I posted a link to it in my first comment on this thread). I read that on the way to work yesterday and really impressed at how much insight was packed into one graph and a few paragraphs. Salmon's is one of the blogs that reliably earns its place in my RSS reader.

@Brian - that article I linked was indicating that treasury prices were up, even now. Meaning investors still think we're a good bet.

Who you callin' "self", Bub? Them's fightin' words. Well, something worse than votin' words, anyway.

Self = by the people of the U.S. through their duly elected representatives.

Well, that's the point: Their elections are not due, and they don't represent me anymore. They're not to be trusted to assume debts on my account.

$10 trillion in the next 10 years on the Department of Defense, Homeland Security and the VA. That's more than double the $4 trillion cut the GOP says is necessary.

Gee, where could a rational person cut?

China is spending a smaller fraction off its GDP on defense every year. The Soviet Union has collapsed (after invading and occupying Afghanistan, btw).

The "threat" we face, if any, is a very loose affiliation of misfits and punk terrorists. There is no country with a military worth beans that wants to inflict harm on us. Not one.

So why are wasting so much money?

The US military has become parasitic and coprolitic--like all militaries everywhere. Organized religion too, btw.

@Crid Oh, you're special. They don't represent you anymore, Constitution be damned. I'm confident the sovereign citizen movement would welcome another supporter.

Also, I don't think duly means what you think it does.

| : in a due manner or time : properly
|

My wording is spotless, as is my heart. And LORD knows, I'm good-looking...

Meaning investors still think we're a good bet.

Investors thought Tulips were a good bet.

Investors have been known to be wrong.

It is quite simple, pass a law that cuts payments to the President, congress and their entourages, first, before anyone else, and make them the last to regain funding, if there is no money. See how long they take to balance the budget or come to an understanding then! Of course there would have to be a minimum level of support to keep the government running, but let's cut all the perks to the bone first. Close the gym before the public park.

I know, give the president and congress bonuses based on the amount of money they shave off this year's debt. Give em the proper incentive and cut all the crap.

I've talked about getting rid of entitlements like Social Security (OK, technically not an entitlement, but run like one), and my father agrees with me. My liberal step-mom, however, commences to worrying that seniors will starve.

That will be the typical liberal answer, I suppose, to ending entitlements: who's gonna feed so-and-so?

And LORD knows, I'm good-looking...

You seem quite dashing from your writing style.

Frankly, BOTU, I'd be happy with a 20-trillion-dollar cut over 10 years, becuase that's just about what it would take to both stop the deficit spending and pay down sizeable chunks of the debt, the way we should be doing.

I would sweep entitlements off the board and even cut defense a little. Do we really still need to be in Europe???

> You seem quite dashing

Chicks dig me.

I used to make fun of idiots who'd say "Well, George Bush isn't MYYYYYYYYyyyyy president", but....

...Well, actually, I will continue to make fun of those people. They're fuckin' idiots.

But as my sunset years are threatened with all sorts of moral, economic and environmental calamity by dickweeds who know much less of decency than I know –much less of decency than granite boulders know– I'm starting to believe that universal suffrage isn't the way to go. Human nature is both needy and trusting, and it's getting in the way. GOVERNMENT is getting in the way.

I'm not saying you should own have to own property, but to vote, you should have some capacity for nuance and humility that's lost on the average polling-booth-rodent.

When I was a kid and we talked politics around the dinner table, my dad suggested the concept of a weighted vote. Everyone who reached majority and registered could vote, but factors like education, property ownership and business ownership increased the weight of one's vote relative to others. Doesn't seem crazy to me.

Crid and Christopher, I've had a nasty suspicion lurking around in the back of my mind for a while now that none of this is going to get solved until we find a way to disfranchise the entitled. I don't admit this out loud because it leaves one wide open to accusations of racism and classism and all sorts of other things that can ruin your reputation. But the fact stands.

Unfortunately, at this stage, I'm starting to doubt that it can be done without violence. The 2012 elections are going to be crucial.

Golly, to listen to the president, you'd almost get the impression that, by the time you saw the padlock off the old Social Security lockbox, there's nothing in there but a yellowing IOU and a couple of moths. Indeed, to listen to Obama, one might easily conclude that the whole rotten stinking edifice of federal government is an accounting trick. And that can't possibly be so, can it?

It is precisely so.

And as to this: I've talked about getting rid of entitlements like Social Security (OK, technically not an entitlement, but run like one), and my father agrees with me. My liberal step-mom, however, commences to worrying that seniors will starve.

Oh yes, yes, of course - We have to force everyone into these programs because what do you do with all the people too stupid to set aside money for their old age? They'd just fritter it away! Except that the government frittered it away, too.

BTW, the B2 bomber cost $3 billion

Chickenshit money, BOTU. Did you read the part about how SS checks might not go out, despite the famous lockbox? Start talking trillions of future obligations that you can cut.

Till then, DoD is the least of your worries.

> none of this is going to get solved until we
> find a way to disfranchise the entitled.

No. We need that player back in the game. The American man-on-the-street is the product and vessel of all the brilliance in human history... All the hard-to-articulate insight that makes excellence happen, the refined genius coveted by every generation heretofore. I seriously believe this.

The problem is that he doesn't give a rat's ass. He's got no skin in the game, and gives his time to more rewarding pursuits.

He needs to be TAXED, not disenfranchised. As long as taxes are so progressive that Bill Gates alone is paying for government, why should anyone else pay attention?

I suggested in one online forum that the mortgage interest deduction and the child tax credits be eliminated. (For the record, I said I would also eliminate the loophole that allows hedge fund managers to endlessly "borrow" from their funds without ever treating any of those withdrawals as taxable income.)

For this, someone screamed at me that I was advocating a tax on the middle class. I was even (gasp!) called an idiot!

But here's how it works out. Half of all wage earners earn less than $25K a year. The average household income is around $48K a year. If an average household has two kids and a mortgage, they end up paying no income tax whatsoever.

Frankly it astonishes me that people of average means are willing to be debt slaves their entire lives. If this is what the "American dream" is, then I don't want any part of it.

But anyway, this is why you have so many people who pay no income tax.

Jo, people do not pay taxes because of a tax system where income is not taxed at all on the first 15k of adjusted income. There needs to be a minimum tax rate on every dollar earned an an elimination of the earned income credit. That way everybody pays something for their government. Perhaps then they will take their vote a bit more seriously. And if you hadn't noticed, interest rates ate at an all time low and so is the deduction.

I don't disagree, Ron, that everyone should pay something for their government. Actually I am opposed to the idea of being taxed on income altogether, but that opens a whole different can of worms. We've debated the Fairtax and national sales taxes and such at great length here already. But Crid is right - everyone should have some skin in the game.

"Still, we are just getting warmed up: The new Gerald Ford class of aircraft carriers are only $12 billion each, although they are easily sunk by missile or torpedo."

How do I put this?

You're an idiot.

This is because you have no idea about the subject. Like a lot of others, you learned about warfare in a theater, popcorn in your lap. That carrier in the second Transformers movie just fell apart, didn't it? Gee, they're easy targets!

BOTU, the carrier group can only be victimized by public policy, set by people just like you - ignorant - but with the power to tell the military to do nothing while they are shot at.

Meanwhile, not only are they protected by a missile defense system three layers deep, their own AWACS and helicopters, there's at least one submarine scanning the ocean along their projected path.

Yeah, that's an easy target.

Meanwhile, you're apparently offended by a physical law: the one that says that when you really need an effective military unit, you won't be allowed to build one.

You can argue about the disposition of design and deployment money or this or that program - but only after you learn about how military assets are used.

So far, that hasn't happened.

He needs to be TAXED, not disenfranchised.

Yeah, good point. Everyone must experience the joy of 4/15. Even the poor need to pay something, as a reminder that government ain't free.

It ain't what it means to them, it's about what they should mean to the government that squanders money. The most pissed-off taxpayers of all are the poor.