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CBO Analyzes Ryan Budget Proposal: 2050 Debt/GDP At 10% Versus 344% In Revised Existing Budget... But How?

Tyler Durden's picture




 

The Congressional Budget Office has chimed in with a 30 page summary comparing the proposed Ryan budget and two previously analyzed scenarios: scenarios—an extended-baseline scenario based on June 2010-current law and an alternative fiscal scenario that incorporated several changes to then-current law that were widely expected to occur or that would modify some provisions of law that might be difficult to sustain for a long period. In essence these are merely variation on the theme of an Obama budget. Needless to say, the divergences are quite dramatic. Since the Ryan budget is focused on fiscal solvency, it achieves that: indeed, comparing projected 2050 Debt/GDP in the Ryan proposal, the CBO reaches a number of 10%, compared to 90% and 344% for the extended-baseline and the alternative fiscal scenarios. On the other hand, the credibility of the assumptions used to goalseek this outcome remain very much in doubt (much more on these in the CBO analysis below). The massive amount of spending cuts, coupled with some very aggressive revenue postulates, will certainly bring the critics out of the woodwork. It will also mean that with fiscal stimulus essentially curtailed, the only source of incremental economic boosting will be monetary policy, read - the Fed, which is an outcome that Bernanke has vocally warned against, due to his concern of Fed "politicization." Then again, with no other choice, it means that the debauchery of the dollar, since the economy is nowhere near the stage where the morphine can be removed, is about to kick into hyperdrive. In the meantime, here are the CBO summary observations.

First, a table showing the key outcomes in the three scenarios.

Then the CBO takes up the topic of key spending line items. Needless the say, total spending is expected to be cut in half in 40 years. Then again, not even Moody's ever tried to forecast more than 5 years out...

Last it a chart showing the breakdown of "Spending on Health Care for a Typical 65-Year-Old with a Standardized Health Insurance Benefit" - i.e., the most contentuous topic at hand: the socialization of US healthcare.

And a summary of the key features of the proposal. Those who wish to sound intelligent while praising or bashing the proposed budget should at least read the following bullets:

Chairman Ryan’s proposal, as specified to CBO by his staff, encompasses changes to Medicare, Medicaid, the major 2010 health care legislation, other government spending (excluding that for Social Security), and tax law.

Medicare

Starting in 2022, the proposal would convert the current Medicare system to a system of premium support payments and would increase the age of eligibility for Medicare:

  • Starting in 2022, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2033.
  • People who turn 65 in 2022 or later years and Disability Insurance beneficiaries who become eligible for Medicare in 2022 or later would not enroll in the current Medicare program but instead would be entitled to a premium support payment to help them purchase private health insurance.
  • Beneficiaries of the premium support payments would choose among competing private insurance plans operating in a newly established Medicare exchange. Those plans would have to comply with a standard for benefits set by the Office of Personnel Management. Plans would have to issue insurance to all people eligible for Medicare who applied and would have to charge the same premiums for all enrollees of the same age. The premium support payments would go directly  from the government to the plans that people selected.
  • The premium support payments would vary with the health status of the beneficiary. In addition, the Centers for  Medicare and Medicaid Services would collect fees from plans with healthier enrollees, on average, and convey the proceeds to plans with less healthy enrollees, on average, with the goal of appropriately compensating plans for the health risks of their insured population. This riskadjustment mechanism would be known as the risk review audit and would be budget-neutral.
  • The payment for 65-year-olds in 2022 is specified to be $8,000, on average, which is approximately the same dollar amount as projected net federal spending per capita for 65-year-olds in traditional Medicare (that is, the program’s  outlays minus receipts from the premiums enrollees pay for Part B and Part D, expressed on a per capita basis) under current law in that year. People who become eligible for Medicare in 2023 and subsequent years would receive a payment that was larger than $8,000 by an amount that reflected the increase in the consumer price index for all urban consumers (CPI-U) and the age of the enrollee. The premium support payments would increase in each year after initial eligibility by an amount that reflected both the increase in the CPI-U and the fact that enrollees in Medicare tend to be less healthy and require more costly health care as they age. (For example, projected net federal spending per capita for all people age 65 and older in traditional Medicare would be about $15,000 in 2022, CBO estimates, in comparison with about $8,000 for 65-year-olds.)
  • The premium support payments would also vary with the income of the beneficiary. People in the top 2 percent of the annual income distribution of the Medicare-eligible population would receive 30 percent of the premium support amount described above; people in the next 6 percent of the distribution would receive 50 percent of the amount described above; and people in the remaining 92 percent of the distribution would receive the full premium support amount
  • described above.
  • Beginning in 2022, the federal government would establish a medical savings account (MSA) for certain beneficiaries with low income. (An MSA is an account that holds deposits that can be used for medical expenses.) Eligibility for MSA  payments would be determined annually by the federal government on the basis of income relative to the federal poverty thresholds. The amount of the contribution in 2022 would be $7,800, and the annual amounts in subsequent  years would grow with the CPI-U.
  • Eligibility for the traditional Medicare program would not change for people who are age 55 or older by the end of 2011 or for people who receive Medicare benefits through the Disability Insurance program prior to 2022. As a result, the average age and average costs of enrollees remaining in the traditional Medicare program would increase over time. However, enrollees’ premiums under traditional Medicare would be adjusted to equal what they would be under current law—a so-called hold harmless provision. People covered under traditional Medicare would, beginning in 2022, have the option of switching to the premium support system.

Medicaid

The proposal would modify Medicaid as follows:

  • Starting in 2013, the federal share of all Medicaid payments would be converted into block grants to be allocated to the states. The total dollar amount of the block grants would increase annually with population growth and with growth in the CPI-U.
  • Starting in 2022, Medicaid block grant payments would be reduced to exclude projected spending for acute care services or Medicare premiums and cost sharing paid by Medicaid.
  • States would have additional flexibility in designing their programs.

2010 Health Care Legislation

The proposal would make several changes to the Patient Protection and Affordable Care Act (or PPACA, Public Law 111-148) and the health care provisions of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152). In general, it would repeal the provisions of those laws that deal with insurance coverage, including:

  • The requirement that most legal U.S. residents obtain health insurance;
  • The establishment of health insurance exchanges and the provision of subsidies for certain individuals and families who purchase coverage through the exchanges;
  • The expansion of Medicaid coverage to include most nonelderly people with income below 138 percent of the federal poverty level;
  • The penalties on certain employers if any of their workers obtain subsidized coverage through the exchanges; and
  • The tax credits for small employers that offer health insurance.
  • The proposal would also change some other provisions of PPACA and the Reconciliation Act:
  • It would repeal the Community Living Assistance Services and Supports (CLASS) program for long-term care insurance, as well as a number of mandatory grant programs including funds for so-called high-risk pools, reinsurance for early retirees, and prevention and public health activities.
  • The proposal would repeal the provisions that created the Independent Payment Advisory Board and that expanded subsidies for the “coverage gap” in Part D (a range of spending in which many enrollees have to pay all of their drug  costs, sometimes called the doughnut hole).

Most of the other changes that PPACA and the Reconciliation Act made to the Medicare program would be retained.

Other Spending

The path for all other federal spending excluding interest—that is, for discretionary spending and mandatory spending apart from that for Social Security and the major mandatory health care programs—was specified by Chairman Ryan’s staff. The remaining part of mandatory spending includes such programs as federal civilian and military retirement, the Supplemental Nutrition Assistance Program, unemployment compensation, Supplemental Security Income, the refundable portion of the earned income and child tax credits, and most veterans’ programs. Discretionary spending includes both defense spending and nondefense spending—in roughly equal amounts currently. That combination of other mandatory and discretionary spending was specified to decline from 12 percent of GDP in 2010 to about 6 percent in 2021 and then move in line with the GDP price deflator beginning in 2022, which would gen-erate a further decline relative to GDP. No proposals were specified that would generate that path.

Revenues

The path for revenues as a percentage of GDP was specified by Chairman Ryan’s staff. The path rises steadily from about 15 percent of GDP in 2010 to 19 percent in 2028 and remains at that level thereafter. There were no specifications of particular revenue provisions that would generate that path.

Hopefully the bolded sentence means there is something more than just a magic wand being waved around in geting this revenue rise.

Full report

CBO - Ryan Budget 2011-04-05

 

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Wed, 04/06/2011 - 00:01 | 1139707 knukles
knukles's picture

Go long popcorn.

Wed, 04/06/2011 - 05:28 | 1140012 StychoKiller
StychoKiller's picture

No changes to Medicare until 2022?  Whew, for a moment there, I thought they were serious!

Wed, 04/06/2011 - 07:30 | 1140083 Kiwi Pete
Kiwi Pete's picture

Scrap your military, CIA & NSA. Presto balanceo!

Wed, 04/06/2011 - 00:00 | 1139710 Dr. Porkchop
Dr. Porkchop's picture

Well my grandfather used to say;

If you can't dazzle them with brilliance, baffle them with bullshit.

Wed, 04/06/2011 - 04:33 | 1139990 Sudden Debt
Sudden Debt's picture

ABRAHAM LINCOLN WAS YOUR GRANDFATHER?!?

 

 

Wed, 04/06/2011 - 00:05 | 1139717 A Nanny Moose
A Nanny Moose's picture

Sovereign default.....Bitchez!

Wed, 04/06/2011 - 00:27 | 1139770 traderjoe
traderjoe's picture

A default of the illegitimate debt is the only solution for people. The TPTB created the Fed and took control of the printing of 'our' money. They created the paradigm of borrowing. Why does a sovereign country borrow its own money?

Austerity is the final chapter of the wealth transfer to the TPTB. It will not 'heal' the economy. Ryan is carrying the water for the bondholders.

Default...

Wed, 04/06/2011 - 01:34 | 1139867 jmc8888
jmc8888's picture

Exactly. Glass-Steagall. Too bad we don't have two congressmen named Fuch and Fraud.

Wed, 04/06/2011 - 07:22 | 1140064 TaxSlave
TaxSlave's picture

Repudiate!

I didn't borrow it.  I'm not paying it back.  Bondholders who expected to get rich by putting me in bondage can go fuck themselves.

Wed, 04/06/2011 - 00:08 | 1139725 glenlloyd
glenlloyd's picture

Well, we knew it was coming, but it really sounds like more complexity.

Personally, I'm not fond of block grants. I've seen the city I live in use block grants for doing untold damage in neighborhoods and converting the medicaid system to block grants could be a windfall if used improperly. Who will monitor the program to verify compliance or appropriate use? I see the potential for more abuse here.

I also see a problem using the CPI-U, I would prefer an unbiased 3rd party generated inflation rate, otherwise we'll have an even more worthless an indicator than we have now.

Wed, 04/06/2011 - 00:20 | 1139750 Yen Cross
Yen Cross's picture

Hey Elmondorf. Appreciate the input. Maybe one of your interns can crack out some decimals on that 2050 26Trillion Figure. 1,000,000   1,000,000,000  1,000,000,000,000x26! Quadrillion 1,000,000,000,000,000 .26 Bitch!

Wed, 04/06/2011 - 00:20 | 1139751 baby_BLYTHE
baby_BLYTHE's picture

Ryan’s description of the plan is disappointing after all the buildup. If he can’t give a summary with numbers of where he and Heritage calculate $6.2 trillion savings, then he is a poor communicator. The rest is just words.

I don’t see $6.2 trillion in this description, so I’m eager to see whatever support exists. I hope he has believable support. How can a Congressman devote his life to this program and dismiss social security proposals by just saying: “This budget forces policy makers to work together to enact common-sense reforms...”?

Wed, 04/06/2011 - 00:24 | 1139755 Yen Cross
Yen Cross's picture

Total revenue column 1 page one. 2050. Why do the old farts use fractions, and hide UST BP yield changes?

Wed, 04/06/2011 - 00:22 | 1139758 web bot
web bot's picture

They're talking 2050? The world as we know it won't exist in 2050...

Wed, 04/06/2011 - 00:23 | 1139760 Yen Cross
Yen Cross's picture

I'll be dead for sure. My family won't though!

Wed, 04/06/2011 - 00:27 | 1139766 Shock and Aweful
Shock and Aweful's picture

Paul Ryan is a complete lying sack of shit....

Anyone who actually believes that this budget he has proposed is even remotely accurate has to be the dumbest motherfucker alive.

You wanna tell me how ANY government agency...or anyone for that matter can forcast 40 years into the future?  Are they assuming we will only be involved in 4 or 5 medium sized wars in that time period?  Or maybe they assuming that there will be a massive pandemic that will kill off half the population or something?  That would save a bunch of money.  This whole 40 year budget effect bullshit is a complete joke and a waste of time to even entertain. 

 

If it is not already obvious...Ryan and his Ilk are nothing buy apologists and hatchet men for the large corporations and banking sector...They are so zealous in their disdain for governement...I am surprised they even wanted to run for office  (doesn't that strike any of you as funny....since Reagan...the GOP has been claiming how much they hate government...and how government is evil.  When we send people like that to Washington...people who think government is a failure...is there any wonder why we get a government that is anything but? 

 

I am being serious too...there was a time when the position of representative and senator (and president for that matter  - you fuck up Obungo) actually made the person in that position give a shit about their constituents....seems today that everything, on both sides is about some abstract policy or ideology and has NOTHING to do with reality or the day to day lives of how people live.

I have a feeling that the next two years are going to be sillier than ever in politics...(don't ask me why I think that...hahaha)

My only question...when in the fuck are the American people going to start DEMANDING something a little more authentic and effective?  We are FULLY asleep at the wheel here...and have no one but ourselves to blame for our nation's current state of affairs.  SHAMEFUL!

Wed, 04/06/2011 - 00:32 | 1139777 baby_BLYTHE
baby_BLYTHE's picture

+++

You nailed it!

As to your final point, Don't start the Revolution without me. I am ready and waiting to take to the streets to Restore America (not in the vain of the fascist Glenn Beck). In the vain of Jeffesron, Hamilton, Franklin, Paine and Washington!

Wed, 04/06/2011 - 00:54 | 1139809 Dr. Porkchop
Dr. Porkchop's picture

The founding fathers were products of the enlightenment who respected philosophy and laws and principles. Who can hold a candle to them now? I wonder if society can muster anyone to fill their shoes.

Wed, 04/06/2011 - 00:58 | 1139818 Yen Cross
Yen Cross's picture

Infinity. It's all starting.

Wed, 04/06/2011 - 06:19 | 1140036 jeff montanye
jeff montanye's picture

hey baby, hope your efforts are not in vain.  

Wed, 04/06/2011 - 06:21 | 1140037 jeff montanye
jeff montanye's picture

hey baby, hope your efforts are not in vain.  

Wed, 04/06/2011 - 11:29 | 1141090 PhotonJohn
PhotonJohn's picture

Amen brother! The founding fathers saw political science as a necessary evil. These people know live, breathe and get advanced degrees in it. Anyone who would strive to be a career politician is not someone you want in DC.

Wed, 04/06/2011 - 01:02 | 1139822 Yen Cross
Yen Cross's picture

Beck is nutty! I have to admit. I'm a different kind of concervative.

Wed, 04/06/2011 - 16:32 | 1142609 baby_BLYTHE
baby_BLYTHE's picture

6 junks, interesting...

What is the big secret about the Founding Fathers? am I missing something?

SRS

Wed, 04/06/2011 - 02:42 | 1139926 Global Hunter
Global Hunter's picture

honest question here, what has Paul Ryan done wrong?  Not many others are talking about spending cuts.

Wed, 04/06/2011 - 04:21 | 1139986 Silva Plata
Silva Plata's picture

Please look at Paul Ryan's donors, it's all insurance and banking. That's who he represents. Don't think for one second he cares about you or America or the national debt. All he cares about is pleasing his Wall Street masters. Plus, he shouldn't be trusted because of that hair.

Wed, 04/06/2011 - 07:41 | 1140096 tarsubil
tarsubil's picture

Rand's budget gets ignored while Ryan's gets praised in the NYT? Something isn't right here folks. Even ponytailed hippies can see it.

Wed, 04/06/2011 - 10:21 | 1140555 MachoMan
MachoMan's picture

Well, the answer to your last question is fairly complex...  Presently, we do have a politically active america.  However, we're only active for a continuation of or additional entitlements...  the counter-argument has yet to gain any traction.  As a result, we get only half-hearted (at best) budget and austerity proposals.

The problem is at what point do 80%+ americans who rely upon governmental aid refuse to ask for more?  I postulate, never...  The only possible way this could happen is when the government is no longer...  which is a difficult endeavor when the vast majority of the population demands entitlements rather than an equal playing field, clawbacks of ill obtained gains, and the possibility (not god given right) to work.  The american people, like all others, will choose the well worn path over the one less traveled.  In other words, even if the government collapses, the populace will still seek to rekindle the entitlement system.

In short, the populace at large will never seek a more bleak (for the risk averse) future.  If it is to occur, it will have to be imposed...  [see generally, the level of general support for the american revolution].

Wed, 04/06/2011 - 00:31 | 1139776 bob_dabolina
bob_dabolina's picture

THE FED DOESN'T WANT TO BE POLITICIZED?

Doesn't the Fed have a dual mandate to have stable prices and maximum employment?

How much more politicized can you get?

Maybe a tri-mandate:

-Maximum employment

-Stable prices

- and abortion.

You gotta' be kidding me.

I'm going to take a Ben Bernanke brb.

Wed, 04/06/2011 - 00:58 | 1139813 Yen Cross
Yen Cross's picture

The Fed is Done. BD. It's done.

Wed, 04/06/2011 - 00:34 | 1139782 savagegoose
savagegoose's picture

2050! how many more wars between now and then, lol kick the can to a date noone alive now will be alive to see.

and here is hoping another katrina like event dont happen in next 40 ish years.  or your numbers could; read WILL, be all fucked up.

Wed, 04/06/2011 - 01:03 | 1139826 Yen Cross
Yen Cross's picture

2030 comes to mind. If we make it through that it should be pretty darn good. I'm looking forward to making a lot of new friends.

Wed, 04/06/2011 - 00:35 | 1139783 nah
nah's picture

abort the jobless babys... but tax their parents first

Wed, 04/06/2011 - 01:13 | 1139840 Yen Cross
Yen Cross's picture

Got the sarc/ Never abandon  babies! They are the future. Ass slap em and teach em how to Race Motocross, Own expensive cars, Houses, travel, Double breasted suits, Fly Jets, Scuba dive, And chew heads off bats.

Wed, 04/06/2011 - 09:40 | 1140433 InconvenientCou...
InconvenientCounterParty's picture

protect life at all cost while it's helpless in the womb. Of course, once in pops out, don't use my tax money to keep it healthy or educate it or feed it.

Wed, 04/06/2011 - 00:38 | 1139786 Misean
Misean's picture

Shit man, if they put the spending cuts in year 39, the budget balances. Man, we are ruled by geniuses.

Wed, 04/06/2011 - 00:46 | 1139796 RockyRacoon
RockyRacoon's picture

Funny how Nomi Prinz was pilloried for saying about the same thing in her article.

http://www.zerohedge.com/article/guest-post-paul-ryans-budget-arithmetic...

Consistency here at the ole ZH seems to be lacking...

At least this article had more purty charts and pitchurs and stuff.

Wed, 04/06/2011 - 01:02 | 1139810 Eureka Springs
Eureka Springs's picture

Double down on the profiteer for health billing model, instead of eliminating 30 percent of costs for an entirely needless corporate insurance model, which is not about care at all. Also refusing to negotiate pharma down to prices small european countries manage to do so well. Our drug using pool of 300 million ought to have the lowest bulk drug prices in the world, not highest.

This is all to familiar pure evil ponzi... and I am sure there will be bipartisan immoral expensivesupport for doing the wrong thing again.

Oh and cut all defense spending by 85 percent, yesterday!

I hate fascists, no matter what they call themselves libertarian, teabagger, republican, democrat, conservative, centrist or liberal. A mandate forcing people to buy corporate insurance, and paying the non-negotiated highest drug prices in the world is just that, fascism.

None of this is new or humane in the least, thus shouldn't be treated as such... it's the same old shit.

Wed, 04/06/2011 - 00:58 | 1139812 Korg
Korg's picture

I can just imagine the German Kaiser in 1900 saying the same thing this asswipe shill is saying.

How'd that work out????

Wed, 04/06/2011 - 01:08 | 1139834 Yen Cross
Yen Cross's picture

I can sit down a dissect any chart. The best make me question them. I always respect them. We respect each other. I did this stupid IQ thing hung over in Cairns Qld. I still hill hit 136 after hanging with the Quantas crew. I'm guessing a trapaziod could have been found after Some Calcium Carbonate on Lipids?

Wed, 04/06/2011 - 01:21 | 1139848 Id fight Gandhi
Id fight Gandhi's picture

Just shut the whole damn thing down. Fuck it.

Nobody wants to take the medicine or cut shit.

Fiscal and monetary policies need to worked on together. Otherwise one fucks the other.

Wed, 04/06/2011 - 01:26 | 1139850 baby_BLYTHE
baby_BLYTHE's picture

I went to a bar near Arizona State University with my friends over Spring Break.

Get ready for this... you cannot make this sh*t up (picture I took with my Andriod)

http://i51.tinypic.com/343mbrn.jpg

Get ready, folks!

We are going into an inflationary Depression! Tyler was right. The dollar is in BIG TROUBLE!

Thankfully I own Gold and Silver, I advise you all take precaution. This shit is f***ing real! It is unbelivable.

Hard times are coming. For everyone!

Wed, 04/06/2011 - 02:17 | 1139905 Yen Cross
Yen Cross's picture

It's right. @ 19 I made a promise to GOD. It's real!

Wed, 04/06/2011 - 02:23 | 1139909 baby_BLYTHE
baby_BLYTHE's picture

WTF are you talking about?

What is Hyper-Inflation? Dollar bills in wheelbarrows, 150 dollar gallon of milk, defaced graffiti currency dangling from the ceiling?

People want to see the end result of massive debt monetization, bailouts and deficits as far as the eye can see? WELL I provided that in the link above^^^ 

Wed, 04/06/2011 - 02:29 | 1139916 Yen Cross
Yen Cross's picture

Hate me Blythe!

Wed, 04/06/2011 - 09:47 | 1140453 InconvenientCou...
InconvenientCounterParty's picture

The one dollar bill could be a collectors item if we don't turn shit around. Then again so could spring break. I would really hate to lose that.

Wed, 04/06/2011 - 02:26 | 1139912 Yen Cross
Yen Cross's picture

Relax Blythe. I'm thinking a short like the old days on euro yen. It's not God. It's been around for awhile.

Wed, 04/06/2011 - 01:23 | 1139851 honestann
honestann's picture

Unless they refuse to raise the debt ceiling, any and every plan is just short-term feel-good talking-point propaganda designed to garner brownie points with TeaParty types.

What we need for a first step is a 2/3 reduction in federal spending, then subsequent 2/3 reductions until the federal government is gone.  The experiment in "central government" is a total failure, and must be recognized as such.

Wed, 04/06/2011 - 01:34 | 1139870 Akrunner907
Akrunner907's picture

Maybe Allan Grayson's prophetic words about the Repub health care should be expanded to the entire federal budget plans, "Die quickly!"

Wed, 04/06/2011 - 01:57 | 1139887 ATG
ATG's picture

Since when did CBO get it right?

Wed, 04/06/2011 - 07:43 | 1140100 StychoKiller
StychoKiller's picture

Ya can't make chicken soup out of chicken poop!

IOW, Garbage In, Garbage Out!

Wed, 04/06/2011 - 02:18 | 1139906 Fed Supporter
Fed Supporter's picture

I would suggest you all start fasting 2 or 3 times a week.  That way your body will be adjusted to food shortages when either the dollar collapses due to the withdrawall of QE2 due to deflationary death spiral and govt default or Continued Fed printing leading eventually to Hyperinflation.  Pick your poison.

Wed, 04/06/2011 - 02:42 | 1139925 equity_momo
equity_momo's picture

Not as silly an idea as it sounds.   Cutting unnecessary calories for sure is a good start (scientifically proven the body ages better and you live longer with lower calory intake too - obviously not too low!  and thats assuming one wants to prolong their life)

Wed, 04/06/2011 - 02:50 | 1139932 Fed Supporter
Fed Supporter's picture

My retirement plan is to eat a little cat food every day, that when when I retire it wont be a big shock to my system.

Wed, 04/06/2011 - 03:01 | 1139945 Yen Cross
Yen Cross's picture

Your cat has black and orange stripes.

Wed, 04/06/2011 - 03:06 | 1139950 Fed Supporter
Fed Supporter's picture

No I dont have a cat, cant afford to feed him and myself.

Wed, 04/06/2011 - 02:41 | 1139922 equity_momo
equity_momo's picture

2050.  LOL.  These clowns in govn cant forecast past 2015. 

2050. fking good one.

Wed, 04/06/2011 - 02:59 | 1139943 Yen Cross
Yen Cross's picture

You are a fat ass. You should be respectfull. Period.

Wed, 04/06/2011 - 02:40 | 1139923 Global Hunter
Global Hunter's picture

Canadian guy here, sorry I don't understand.  The government has to reduce spending in a big way, what am I missing and what is the beef with Paul Ryan's plan?

Wed, 04/06/2011 - 04:44 | 1139996 Silva Plata
Silva Plata's picture

Hi Canadian Guy. Maybe it will help to think of Paul Ryan as an actor putting on a show. He isn't really a representative of any American citizens. He's an employee of insurance and baking interests. Take a look at his proposal. Look how sweet it is for the insurance industry. He knows it's all BS. But you can be sure he'll be looked at as a good little whore by his employers. America is f@ckd because all of our reps -- republican and democrat are owned... except maybe Ron Paul.

Wed, 04/06/2011 - 06:23 | 1140041 Global Hunter
Global Hunter's picture

Silva, I saw your other response to my question, appreciate it.  I will try to get my noodle around this and how it helps banking and insurance industries.  We have big government here in Canada as you're probably aware and it seems to me that both of our countries need to cut government spending by about half (as a good starting point) if we hope to have a future for our children.  I will keep my mind open on this going forward but my initial reaction was "great a politician talking seriously about cutting spending".

Wed, 04/06/2011 - 07:37 | 1140093 TaxSlave
TaxSlave's picture

That's for public consumption.  It cuts spending later, after Ryan is dead and gone.  It does it by picking winners and losers in the insurance industry, nationalizing them in the process in everything but name.

The name of the game is 'kick the can'. Or 'extend and pretend'.

We'll get our spending reductions, when people realize we aren't going to pay back the fuking bonds, then the central banks will print (actually create with a database entry) the money to fund government excesses, and the money begins to trade at its true value (slightly less than zero).

Regulatory democracy run by central bankers with money-printing machines is coming to its inevitable end.  What kind of brave new world will you embrace?  The Next Level they will offer you as salvation, or one where you recognize that without property rights you have no rights at all?

Wed, 04/06/2011 - 07:48 | 1140115 Global Hunter
Global Hunter's picture

OK thanks for your responses its clear now, the cut spending later crap is BS and the way that politicians try to appeal to people who want fiscal responsibility with the headlines without having to take the political pain that the actual cuts would bring if they were effective immediately.  

Wed, 04/06/2011 - 07:52 | 1140119 TaxSlave
TaxSlave's picture

Very well put. 

Wed, 04/06/2011 - 02:49 | 1139929 ebworthen
ebworthen's picture

Realize that in the past 100 years we have gone from the light bulb and flying being a miracle to being second nature.

Realize that we have gone from trench warfare and bayonets to ICBM's and kinectic bombardment from space (X-37).

The nuclear genie only came out of the bottle 67 years ago (one lifetime).

The majority of our food production is a house of cards dependent upon petroleum for tillage, planting, fertilizers, pesticides, harvesting, processing and transporting (not to mention genetically or lab produced seed that is often a monoculture).

We teeter on the brink of collapse and death; and yet we have blown our societal wad on speculative financial instruments, golden toilets, porn, toys, and government cheese.

The deficit and the debt are a problem, but we won't solve them within the constructs of our current political or financial or social system; this is a problem nature is going to solve for us and it won't be pretty. 

The opposing forces we have built up behind our hubris are not one only of environment or materials or ability  - but forces of chaos that we have fed and nurtured with our knack for abundance of production, of efficiantization, of order, of predictability, reliability, and a lack of failure. 

Wed, 04/06/2011 - 07:46 | 1140102 TaxSlave
TaxSlave's picture

We have rewarded sloth and incompetence, and we have punished the productive to the point where production has fled the jurisdiction.  You can't take farmland with you, so all we have left is urban nightmare cities with defiantly entitled dependent consumers surrounded by farmland.

When an economy produces nothing but food, it cannot produce more than a bare subsistence.  Without manufacturing, no real surplus wealth is generated. When the burden shifts to farmers, to feed everyone but themselves, the land will fall fallow.

We are coasting along, eating off debt which cannot and will not be paid back.

Prepare.  The next step is inevitable.

Wed, 04/06/2011 - 02:48 | 1139931 bankonzhongguo
bankonzhongguo's picture

Any way you slice it, each one of us are on our own.

Ethics sells to the highest bidder.  Morality is what you can get away with.

Lady Justice is not so much blind as her eyes have been gouged out and she is rendered deaf, mute and crippled in the forgotten side of town.

Only the poor are punished with a wider and wider net of unintelligible laws of equally capricious enforceability.

One would think a Citizen's government would work to reduce health care costs and expand care.  Instead they legislate a private tax for pure insurance industry profits.  Then its a parade of war (kinetic action?) to keep the empire gasping.

The sick and aged will be targeted, as will the poor and defenseless in far-away lands.

Wed, 04/06/2011 - 07:11 | 1140053 overmedicatedun...
overmedicatedundersexed's picture

think of the noble Eskimo or for our pc readers

"native americans"..when the elderly could no longer be productive they were encouraged to walk out into the frozen tundra to die. the old and infirm were glad to go for life in the frozen north is hard on the healthy.

the moral of this story: no work no food.

true then true now.

apply that to the modern tape worms that inhabit the gut of our society and government becomes debt free ..

ps banksters = tape worms in tape worms.

Wed, 04/06/2011 - 02:55 | 1139938 Yen Cross
Yen Cross's picture

Who is that unique(sp) ACT crew?

Wed, 04/06/2011 - 03:02 | 1139946 Yen Cross
Yen Cross's picture

My Jet Becons me!

Wed, 04/06/2011 - 03:54 | 1139971 Skeptical_10016
Skeptical_10016's picture

I guess those on here prefer the Obama doctrine........wait, survey the landscape, take a poll, flip flop, take another poll, then have your speach "ghost" writer get your tele-prompters ready and then blame the other guy and hide behind undefined, unquantified notions of "FAIRNESS".

 

PEOPLE WE ARE SPENDING 25+% OF GDP AT THE FEDERAL GOVT LEVEL! ALL POLITICIANS ARE FULL OF SHIT, BUT THE SHIP IS SINKING AND WE NEED SOMEONE TO LEAD......FINE IF THEY ARE WRONG.......AT LEAST TELL US TO "SMOKE 'EM IF YOU GOT 'EM" AS THE PLANES HEADING DOWN INSTEAD OF PONTIFICATING ABOUT HOW THAT MIGHT HURT THE ENVIRONMENT.........

Wed, 04/06/2011 - 04:59 | 1140000 Silva Plata
Silva Plata's picture

There is not one bit of difference between Obama and Paul Ryan. Even they know it. They're both employees of big business playing a game.

I don't like either of these whores, but let's not pretend one will give us a better solution than the other. That needy thinking keeps us in this mess. We're on our own. There is no solution to our problem that our government can provide. They are the problem. We are on our own.

Wed, 04/06/2011 - 07:48 | 1140116 TaxSlave
TaxSlave's picture

Shoulda listened to Ron Paul.  He was warning about this.  But, noooooooo!  Don't threaten our delusions!

Wed, 04/06/2011 - 05:03 | 1140004 Silva Plata
Silva Plata's picture

Oh yeah, and smoke 'em if you got 'em.

I hope that helps.

Wed, 04/06/2011 - 06:12 | 1140031 kaiten
kaiten's picture

Currently, defense spending is about 4% of GDP and I dont think Pentagon would agree with any significant decrease. For 2050, CBO projects defense spending plus other mandatory plus all discretionary spending for 3,5% of GDP. I only have one question: What do they smoke?

Wed, 04/06/2011 - 06:55 | 1140047 sudzee
sudzee's picture

Forget bs projections for 2050, just look at March :

http://cnsnews.com/news/article/march-madness-feds-spent-more-eight-time

Wed, 04/06/2011 - 07:11 | 1140054 tek77blu
tek77blu's picture

Good commentary on gold and silver: http://www.youtube.com/watch?v=L_oh5ke2Cf8

Wed, 04/06/2011 - 07:26 | 1140076 HEHEHE
HEHEHE's picture

"the Fed, which is an outcome that Bernanke has vocally warned against, due to his concern of Fed "politicization.""

The Fed does whatever the oligarchs running this country tells the Fed to do; it would be nice if they got rid of the entire "independence" charade.

Wed, 04/06/2011 - 08:13 | 1140173 gs_runsthiscountry
gs_runsthiscountry's picture

I had to laugh yesterday Paul Ryan, given a pedestal and proverbial soap box to speak....for an unabated, unprecedented, and commercial uninterrupted  24 effin mins.  24 mins of cliche after cliche and vanilla talking point.

That has to be a first for CNBC who doesn't pass by 12 mins without paying some bills. This all under the guise, of course, that Jim Chanos was "under the weather" or otherwise unavailable to be a guest.

Not that selling these austerity measures at the Fed level wouldn't parallel Gov walkers attempts in Wisconsin. Oh, and by the way, Wisconsin was host to a spring election yesterday, one of the most pivotal in recent  history. Supreme Court Justice is TBD as the numbers show a dead heat at this time.

Further, for 24 mins i found it amusing he kept quoting The Heritage Foundation, when in the past 2 years, all we ever heard was his love of quoting CBO numbers. Something is a miss, as evidently CBO numbers no longer serve his, or the parties agenda....lol

http://video.cnbc.com/gallery/?video=3000014529

Wed, 04/06/2011 - 20:52 | 1143562 Element
Element's picture

damn ... remind me, did obama say he was going to halve the US deficit, or double it? ... I'm pretty sure he must have said double it ... but that just doesnt seem to make sense ... no, wait ...

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