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Guest Post: The Fiscal Cliff and Demographic Drag

Tyler Durden's picture





 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Federal spending is heading for a fiscal cliff while millions of retirees are starting to draw Federal benefits.

We know two things about the future:

1. Borrowing 35% of Federal expenditures every year is unsustainable. (2012 Federal budget = $3.8 trillion, Federal deficit = $1.3 trillion, 34.2% of every Federal dollar spent is borrowed)

2. The Baby Boom generation of 75+ million may be working longer, but they are also retiring en masse, joining the ranks of Social Security and Medicare beneficiaries at the rate of 10,000 per day, a flood that will not ebb until the late 2020s. (The Baby Boom is generally defines as those born between 1946 and 1964, though many quibble with the 1964 date. The choice of parameter doesn't change anything about the consequences.)

The first Boomers qualified for early Social Security retirement (age 62) in 2008 and for Medicare (age 65) in 2011. The biggest cohort years (almost 4 million a year) will start reaching early retirement (62) in 2014 and Medicare (65) in 2017. The number of people entering these programs will rise every year from 2014 to 2020, and then remain constant at 4+ million a year until 2025.

Here are three views of the Baby Boom for context:

Frequent contributor B.C. calls this enormous transfer of people from wage earners to retirees drawing government benefits the demographic drag, as it will reduce consumer spending, wages and taxes while dramatically increasing Federal spending.

Here is a chart courtesy of B.C. that overlays year-over-year changes in private-sector wages+Federal expenditures, Treasury bond yields and the consumer price index (CPI). Note the downtrend in wages+Federal spending and Treasury yields, and the range-bound CPI.

Here is B.C.'s commentary:

 

The sum of the year-over-year change rates of wages and Federal spending is deeply into historical recessionary/depression territory. With the demographic drag and fiscal cliff constraints ahead, who knows how slow the rate will be hereafter, and for how long.

B.C. also submitted this year-over-year chart of Federal expenditures. Despite the unprecedented size of Federal deficits, both in dollars and as a percentage of peacetime budgets, the recent spurt of spending growth was lower than previous spikes.

To reduce the deficit--i.e. address the "fiscal cliff"--Federal spending will have to decline for many years. Such an extended period of declining Federal spending would be unprecedented.

This raises the obvious question: if Federal spending must decline, then where is the money going to come from to fund 75 million retirees? Calling the Central Bank of Mars: Greetings, Martian friends. Please send us 10 trillion quatloos every year from now until 2029. We promise to pay you in 2030 (heh).

 


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Thu, 10/25/2012 - 14:15 | Link to Comment mrktwtch2
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simple the gov wil linvent a diseas that targets old people..or they will die before 65 because of obesity..

Thu, 10/25/2012 - 14:20 | Link to Comment economics9698
economics9698's picture

Crash and burn 2014.

Thu, 10/25/2012 - 14:24 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Can we make it 2013?  I'm getting cliff-expectation-fatigue. 

Thu, 10/25/2012 - 14:15 | Link to Comment Frozen IcQb
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Earth Shattering Kaboom

Thu, 10/25/2012 - 14:45 | Link to Comment old naughty
old naughty's picture

Central Bank of Mars: "Stay the fxxk away, earth-lings, and don't you, Barnxxxx call us...We won't call you".

Thu, 10/25/2012 - 14:21 | Link to Comment lolmao500
lolmao500's picture

Borrowing 35% of Federal expenditures every year is unsustainable

Unless you borrow it from the FED... which creates it out of thin air.

And this whole thing is why the guy from ShadowStats says that hyperinflation will kick in no later than 2014.

Thu, 10/25/2012 - 14:29 | Link to Comment NotApplicable
NotApplicable's picture

As I've always said, as long as people accept fed notes as payment for goods and services, there is no limit to Benron's magic checkbook.

Hell, they might even manage borrowing 200% for a while, as long as they can "manage expectations."

We will most certainly crash, but it won't be based upon any metric other than "Oh Shit! We're Fucked! TODAY!!!!"

Thu, 10/25/2012 - 14:55 | Link to Comment Spastica Rex
Spastica Rex's picture

The con goes on until the mark wakes up or runs out of dough. We have a very effective grifterment.

Thu, 10/25/2012 - 15:08 | Link to Comment JPM Hater001
JPM Hater001's picture

In 1996 the "Econ Club" at my university held a "What to do about Social Security" Session open to the campus.  At that time I supported means testing.

Follow me here

Right now we could still means test off 30-40% of the population with some pretty serious targets.

After the collapse it will be 2%.

We missed our chance and with the economic collapse uncle sam will be the one means tested.... that is to say they will have no means.

Thu, 10/25/2012 - 14:23 | Link to Comment fonzannoon
fonzannoon's picture

This article is so far off base. I keep reading everywhere that the proper balance of revenue increases (that's another word for higher taxes) with a very mild set of spending cuts (no third rail stuff).....(that means entitlements)...will be able to resolve the fiscal/finacial/flautlent cliff. The boom in growth that would accompany that as Corporations everywhere will shut down their plants overseas and lay off their 35 cent/hr workforce to bring those jobs back here and pay $50/hr with benefits to US citizens would be eye popping.

I would say by the first quarter next year the fed will have to hike rates to slow growth crushing the housing market and blowing up the banks and wait a minute what?

Thu, 10/25/2012 - 14:31 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"The boom in growth that would accompany"  -  Bahh ha ha ha ha, please, wake the fuck up.  You can create all the "capital" out of thin air that you want, it's imaginary.  Nothing grows or gets accomplished or is built without energy.  What is the current level of available energy being produced again? is it growing?  Infinite growth in a closed system?  FAIL.

Barring a revolution in energy production/delivery, tradition text-book economic growth is fucking dead, period.  next human doubling coming in less than 7 years, 7 billion to 14 billion, what does common sense tell you about your quality of life moving forward?

stupid sheep.

Thu, 10/25/2012 - 14:36 | Link to Comment fonzannoon
fonzannoon's picture

and I was going to vote for you for President.......

Thu, 10/25/2012 - 14:43 | Link to Comment RSloane
RSloane's picture

I keep telling you to type /sarc after your posts.... but noooooo

Thu, 10/25/2012 - 14:45 | Link to Comment fonzannoon
fonzannoon's picture

I truly thought that one was transparent enough (shrugging shoulders/confused face)

Thu, 10/25/2012 - 14:50 | Link to Comment LawsofPhysics
LawsofPhysics's picture

So what you are saying that the energy available to the inhabitants of the earth is growing?  Hhmmm seems like you might be violating a few laws.  But let the sheep keep smoking the hopium because I like lamb and after all on a long enough timeline...

 

Yeah, (some of) you folks get it.

Thu, 10/25/2012 - 14:57 | Link to Comment fonzannoon
fonzannoon's picture

I WAS KIDDING. THE WHOLE THING! PLEASE REREAD

Flatulent cliff?

Thu, 10/25/2012 - 16:14 | Link to Comment odatruf
odatruf's picture

Or, we can start burning people for energy.  Two birds with one stone...

I win!

Edit: then I decided to do a quick search.  Seems the Swedes are already burning pests for heat: http://www.thelocal.se/22610/20091012/

 

Thu, 10/25/2012 - 17:05 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

The truth you're speaking is accompanied with a hearty dose of cognitive dissonance, hence the down arrows.  The humans wealthy enough to access a computer and have the IQ high enough to even reach this site and kinda comprehend what you said, that also understand the English language, seem to contain a fairly large element of softness/weakness.  

For those Matrix fans who are fans of "there is no spoon", the spoon here is "real growth".  There is a very obvious message in this film that is often missed, that happiness is a bowl of gruel and a simple tunic (because these things are real and provide necessary sustenance), and the fantasy is the steak in the nice restaurant.  People seem to mentally skip over that part.  

The good news is that you can start acclimating your body to what's coming by switching to a macro-plant diet.  The crash isn't nearly as scary when you've already been eating rice and beans.  I know there's a thought process of "as long as the music is playing, keep dancing", but that's just going to set you up for a personal "crash" to go along with the socioeconomic crash.  

Thu, 10/25/2012 - 15:16 | Link to Comment lolmao500
lolmao500's picture

Well that's because it was so well written and so many stupid people believe exactly what you wrote that it seemed legit...

Thu, 10/25/2012 - 14:42 | Link to Comment oddjob
oddjob's picture

Less hoof room for you urbanites.

Thu, 10/25/2012 - 14:43 | Link to Comment slackrabbit
slackrabbit's picture

Jeopardy: What is irony?

Thu, 10/25/2012 - 14:48 | Link to Comment HobbyFarmer
HobbyFarmer's picture

I wish I had a reason to refute what you're saying, Laws.  But I don't....so I got off my ass and started down a path of personal independence.  I'm wiser, stronger, enjoy life more, and feel better than when I began this journey....glad I began while it's still considered a hobby.

I would suggest that the average ZH reader is awake and not a sheep (why else waste time reading here?)....the question for anybody reading this comment: how should you personally prepare for a world with expensive energy?  A world with 14 billion people? Where will the food come from? How many calories of energy does it take to produce a calorie of food that you consume at your dinner table? Again, where will the food come from to feed 14 billion humans?

Follow up question: are you hedging (preparing) accordingly? You're not a sheep.....

Thu, 10/25/2012 - 15:00 | Link to Comment jal
jal's picture

If you double the # of 99% in seven years, (7 billion to 14 billion), that would mean a reduction of 50% of the use of  the presently available resources for each person.

If inflation of consumer goods is at 10% then those cost will be doubled in seven years.

If wages for the 99% stays flat, then a lot of people will be added to the bread lines or die of starvation.

Gee!

That would mean that if I want the same quality of life as now, then the population has got to fall drastically and my income has got to double.

Gee!

 

I guess I better get a university degree, without borrowing money, to get a higher paying job.

Would I need to get a degree in Mandarin too?

 

If I keep going to school until the boomers are all retired then there should be lots of job opening needing to be filled. Maybe home nursing care for some of you lucky gambles?

 

 

 

 

Thu, 10/25/2012 - 15:02 | Link to Comment Heyoka Bianco
Heyoka Bianco's picture

"next human doubling coming in less than 7 years, 7 billion to 14 billion, what does common sense tell you about your quality of life moving forward?'

It tells me that if you don't ask what kind of "animal" all this yummy meat came from, you could be as happy as the proverbial porcine inundated in feces.

Thu, 10/25/2012 - 16:17 | Link to Comment odatruf
odatruf's picture

Laws - you are way off.  No way we add 7 billion people in 7 years.

The best projection has getting to about 10 billion by 2050.  That's 3 billion more than now.

See: http://www.globalchange.umich.edu/globalchange2/current/lectures/human_p...

Thu, 10/25/2012 - 16:54 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Oh yeah, that makes it "all better". 

Thu, 10/25/2012 - 14:30 | Link to Comment blunderdog
blunderdog's picture

No no.  Revenue increases won't come from "higher taxes"--they'll come from LOWER taxes.  But the loopholes will be closed. 

That Obamney guy who's running for POTUS has devised a cunning plan.

Thu, 10/25/2012 - 14:48 | Link to Comment slackrabbit
slackrabbit's picture

Wow - you here that Wilmar? 

Let's flick the house, get a buy to let, use our house as an ATM machine, buy two new cars, tell the kids to get a student loan and watch Cramer on Mad Money for the 'inside skinney'.

Happy days are here again.

Yabba dabba do!

;-)

Thu, 10/25/2012 - 14:24 | Link to Comment Zap Powerz
Zap Powerz's picture

It is dishonorable for the older generation to steal from younger generations.  That is exactly what SS is.  Dont give me any bullshit about "I paid into it so I deserve it."  Fuck that.  The money you get on SS comes directly out of some young workers paycheck.  When you were working, you were being robbed.  Two wrongs do not make it right.

End the corporate and personal welfare.  End the drag on progress.  Drain the gene pool of unsustainable inhabitants.

Thu, 10/25/2012 - 14:27 | Link to Comment slackrabbit
slackrabbit's picture

+1000 brother

Thu, 10/25/2012 - 14:31 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I don't know about you guys but when I'm long in tooth my retirement plan is to be the old cooter in the family that knows where the gold is buried.

Thu, 10/25/2012 - 14:39 | Link to Comment slackrabbit
slackrabbit's picture

Just so long as its your gold ...

Thu, 10/25/2012 - 14:54 | Link to Comment Calmyourself
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I would also be sure not to be the old coot with bamboo under his nails...

Thu, 10/25/2012 - 17:15 | Link to Comment optimator
optimator's picture

Great life insurance from the family that will certainly take care you in your old age.

Thu, 10/25/2012 - 14:28 | Link to Comment kridkrid
kridkrid's picture

That last bit is the rub, no? No real easy way to get from A to B

Thu, 10/25/2012 - 14:30 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Relax, this will come anyway.  Paper promises are no match for Nature and the Laws of Physics.

Thu, 10/25/2012 - 15:01 | Link to Comment djsmps
djsmps's picture

Too bad for you.

Thu, 10/25/2012 - 15:13 | Link to Comment Whiner
Whiner's picture

BUT, I didn't know Wilbur Mills indexed SS to CPI. I did NOT know that LBJ and Co. raided the Lock Box to finance guns and butter. Anyway, look who you youngsters elected to our Central Govt. regime. You will therefore pay every dime of my SS, every dime. AARP guarantees it. Get used to a very smaller life style. But if you want to revolt, I will join you. Just pay my SS dammit; it was sold to me as and insurance program. I paid my premiums. So pay up and revolt!

Thu, 10/25/2012 - 15:17 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

How can you say that with a straight face? If two wrongs don't make a right then people who were forced to pay into Social Security shouldn't have the money they paid in stolen from them. The money they paid out worked the same way for them as it does for you. IMO Social Security wasn't Constitutional but then IMO neither is Obamacare and guess what boomer's pay taxes both on their income and Social Security if they get it which funds programs that are really Welfare like food stamps, subsidized housing, student loans and Obamacare. Social Security was self funded not a welfare program if people want to end it fine it will die if Romney is elected once it exhausts the funds owed to it.

Thu, 10/25/2012 - 16:06 | Link to Comment RSBriggs
RSBriggs's picture

You know what?  You're a REALLY.  STUPID.  FUCK.   Why not do us all a favor and help cleanse the gene pool by removing yourself from it....

Thu, 10/25/2012 - 16:51 | Link to Comment Zap Powerz
Zap Powerz's picture

If I did that, my employees would no longer have jobs and would end up on welfare for you to support.  You dont want that do you?

It seems I touched a nerve with you.  Welfare much there sport?

Thu, 10/25/2012 - 14:29 | Link to Comment BlueCollaredOne
BlueCollaredOne's picture

This post needs moar birth rate charts.

Thu, 10/25/2012 - 14:30 | Link to Comment NotApplicable
NotApplicable's picture

Really. I mean, why stop at three?

Thu, 10/25/2012 - 14:35 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I can really use a turnover rate for guaging the approx. length of generation, is it getting longer or shorter?

Thu, 10/25/2012 - 14:29 | Link to Comment Segestan
Segestan's picture

Hello Earthlings!!!..... Sorry but someone has stolen all our gold. Call Jupiter....he has godly powers.

Thu, 10/25/2012 - 14:42 | Link to Comment Cyrano de Bivouac
Cyrano de Bivouac's picture

Well one solution would be the Federal Government have a firesale of its properties. Sell Alaska(69.1% is Federal land) back to Russia. Sell Nevada(84.5% Federal land) to Japan which would also provide  a place for Japanese to live if it gets too radioactive there. Utah(57.4%), Oregon(55%),Idaho(50.2%) would be sold to China. This would be a more honorable way to deal the problem than what actually will happen and more in the spirit of capitalism. I forgot to add, Germany gets Arizona(48% Federal land) and Wyoming(42% federal land).

Thu, 10/25/2012 - 14:42 | Link to Comment BlueCollaredOne
BlueCollaredOne's picture

That is akin to the crack addict taking his kid' PS3 to the pawnshop because he is short on money for more crack. 

Yea, hes going to get his next fix, but his addiction will not be cured.  After he sells his kid's PS3, what will he sell next time when he has no money?

Thu, 10/25/2012 - 14:46 | Link to Comment fonzannoon
fonzannoon's picture

his neighbors kidney

Thu, 10/25/2012 - 14:49 | Link to Comment Cyrano de Bivouac
Cyrano de Bivouac's picture

It's better than hyperinflation.

 

Thu, 10/25/2012 - 15:06 | Link to Comment Ham-bone
Ham-bone's picture

After selling off the assets...most addicts start "turning tricks"...Americans, go long kneepads

Thu, 10/25/2012 - 15:38 | Link to Comment hockeypuck777
hockeypuck777's picture

Break up the USA.  Devolve.  Canada can have the Northeast and Midwest.  Southwest back to Mexico from whence it was stolen. Southeast can secede again.  New currency, new laws; everyone can move to where they feel comfortable.  Border fences.

Thu, 10/25/2012 - 14:35 | Link to Comment Robslob
Robslob's picture

We will not have to fund 75 million retirees for fucks sake...they are already dead...and so are we....

Thu, 10/25/2012 - 14:36 | Link to Comment Hohum
Hohum's picture

Spending will have to decline, but in 15 years commitments to Medicare and Social Security will be the least of our worries.

Thu, 10/25/2012 - 14:40 | Link to Comment hairball48
hairball48's picture

In my best whining voice :)

"I was born in 1948. They're not gonna take my Social Security and Medicare(next year) are they? NOOO!! Please no, Say it isn't true!!"

Thu, 10/25/2012 - 14:38 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

so, the Echo Boomers are going off to war soon?

You youngins be sure to pack your cameras and upload often to youtube; i wanna watch.

Thu, 10/25/2012 - 15:23 | Link to Comment Joe Davola
Joe Davola's picture

Yeah, these trendlines don't recognize the distinct possibility of large percentages of populations being wiped out in shooting wars which typically follow currency wars.

Thu, 10/25/2012 - 14:42 | Link to Comment Offthebeach
Offthebeach's picture

Glorified road side canning by half the smerf muppets that don't have union govey jobs. They can peddle around on fixie bikes stripping aluminum siding, copper pipe, and burn down decaying BOA foreclosure's for nails, Simpson ties, wire. A small house will have a couple of hundred pounds, easy. Metal entrance doors, furnance, appliances,garage, ....basement Bilco's ...might be a ton. Plus raise carp for sale in the foundations like the Vietnamese did with B-52 bombs.
The Squid could instrument the whlle thing, buy rights, get investors, provide hedges. There are decades of recoverable metals, brick built over hundred of years of pre Federal Reserve that can be harvested, and taxed to keep the boomers in Jello and depends.

Thu, 10/25/2012 - 14:42 | Link to Comment GubbermintWorker
GubbermintWorker's picture

Let the generational wars begin!!

Thu, 10/25/2012 - 15:04 | Link to Comment James-Morrison
James-Morrison's picture

Draft everyone over 65, then invade werfukistan.

No need to fight amongst ourselves.

 

Thu, 10/25/2012 - 14:58 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Blah blah blah what about Obamacare?  That program will cost Trillions in taxpayer dollars even the CBO estimates it at $1.76 Trillion and that doesn't count the cost of interest people will have to pay on that debt. If you back Obamacare (which I don't) how can you bitch about Medicare? How would you dare bitch about Social Security then a program that is entirely self funded and owed $2.7 Trillion.

Medicare is the real problem it's the program that actually takes money from the government to fund  just like Obamacare will. Get rid of Medicare but then get rid of Obamacare too.

If you don't know who will fund all this debt by now well duh the answer is you, your children and grandchildren, etc.but the same was true of the boomer's who had to pay prior generations debt and who weren't even born when Social Security was enacted. Obamacare puts the medicare program even deeper in the hole 

 

Obamacare Robs Medicare of $716 Billion to Fund Itself

 

 

CMS actuaries doubt spending caps will work

http://www.ama-assn.org/amednews/2012/05/28/gvbf0528.htm

 

Thu, 10/25/2012 - 15:08 | Link to Comment jal
jal's picture

... what about Obamacare? 

Those cost are not going to happen.

I nominate LMAOLORI to sit on the death panel.

Thu, 10/25/2012 - 17:26 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Cutting payments to providers = putting Medicare deeper in a hole?  Are you really that fucking stupid?  Mind you, I don't agree with either program, but please attempt to think before posting.  

Thu, 10/25/2012 - 15:01 | Link to Comment Pancho Villa
Pancho Villa's picture

From the birth charts, it looks like the number of people in the 55-65 age group is rapidly increasing now and will continue to increase until 2019. People in this group are in their peak earning years so they pay lots of taxes and buy stocks and bonds to save for their retirements. When this age group starts decreasing, the government starts having problems collecting taxes and finding new buyers for USTs. And at the same time, the number of people eligible for SS and Medicare starts to explode. I think there will be severe problems starting in the early 2020s and continuing for more than a decade.

Thu, 10/25/2012 - 17:29 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"From the birth charts, it looks like the number of people in the 55-65 age group is rapidly increasing now and will continue to increase until 2019. People in this group are in their peak earning years so they pay lots of taxes and buy stocks and bonds to save for their retirements."

 

ROFL

Thu, 10/25/2012 - 15:05 | Link to Comment Shizzmoney
Shizzmoney's picture

I would figure Mars would be smart enough to not having a central bank.

It is RED though.

Thu, 10/25/2012 - 15:00 | Link to Comment Shizzmoney
Shizzmoney's picture

33% of Americans in the middle class expect to work in their 80s.

"Get me a beer, old man!"

Totally sustainable.

Thu, 10/25/2012 - 15:06 | Link to Comment SmittyinLA
SmittyinLA's picture

print bitches, print 

Thu, 10/25/2012 - 15:57 | Link to Comment jplotinus
jplotinus's picture

The salient query is:
"This raises the obvious question: if Federal spending must decline, then where is the money going to come from to fund 75 million retirees?"

In nearly 100 replies thus far not even a single 1 has put the word "reduce" next to the words "military spending" in any post at all. Not 1.

Yet, a mere two days ago, a learned poster in one of the post-debate threads acknowledged the US has more than 4-times the naval firepower than the rest of the world combined.

Posters, that is military excess, to put it obviously, rather than harshly.

In a thread where lambasting spendthrifts is in order, it raises the question of just how real is brainwashing when not a single, solitary poster has said reduce military spending in response to a chronic budget short fall until now.

Wake up ZHers. Surely you are not mere sheep, are you?

:-/

Thu, 10/25/2012 - 16:17 | Link to Comment sethstorm
sethstorm's picture

That military "excess" will pay off when the world thinks that it's a good idea to piss off the world's superpower, the US.

 

Thu, 10/25/2012 - 17:18 | Link to Comment dscott8186
dscott8186's picture

False metrics and narrow optics will give false solutions.  Deficit reductions come not just from goring everyone's favorite ox.

1) The economy must grow, as it does so does the tax revenue.

2) End ALL economy killing or limiting government regulations starting with ObamaCare and the EPA.  The economy can not grow and employ full timers if government policy discourages that activity.  A good start would be to repeal EVERY Law and regulation enacted since 2007 when the Democrats took control of Congress.

3) The oxymoron of efficient government must become a reality.  Every industry has been touched by the computer revolution increasing productivity EXCEPT for government.  Productivity of dollars spent to bureaucrats spending must be increased by either capping or reducing the total number of government employees and that trend line should mirror private industry OR ELSE every bureaucrat who is a manager should be fired and replaced.  We demand results not continual excuses for failure and then using that failure as a reason to increase staff.  

4) Reform of the social compact must occur when million dollar lottery winners can draw food stamps.  A safety net is not a trampoline. All government benefits must be capped, an individual should NEVER EVER receive more financially than the minimum wage at 40 hrs per week.  That means if you have assets that can be leveraged or drawn up, those must be used up first BEFORE you receive one penny of tax payers hard earned income.  I am not obligated to help you because you are stingy and want someone else to pay your expenses when you have the means.  That also means the person asking for the hand out must decide for themselves which benefit(s) up to the weekly max is most important to them.  You can't have it all, life is not fair so its time to grow up and take personal responsibility.

5) Stop the outsourcing of our energy supplies and federal revenue.  Allow domestic drilling for oil and gas on government lands.  We loose billions in royalty payments when oil is imported instead of produced here.  

6) Military procurement reform should happen, however, we need to acknowledge that Congress is the source of most of the mis-spending or waste in the defense budget.  There is not a program that Congress doesn't jigger the number of requested weapons due to what State it is being manufactured. When the military asks for x planes, Congress should not supply x+10 because it benefits someone's home district.  That would be a very good start.

7) IF Congress is serious about federal spending then it should be rolled back to 2006 spending levels with zero ear marks.  

There are many other things that should be done such as ending ALL, EVERY subsidy payment to industries like Agriculture and Green Scams of Wind, solar and electric cars.  If an industry can not stand on its own then it has no right to exist.  As a taxpayer I have a right to my earnings and you don't have a right to take my earnings to support your profit margin.

Thu, 10/25/2012 - 17:36 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"5) Stop the outsourcing of our energy supplies and federal revenue.  Allow domestic drilling for oil and gas on government lands.  We loose billions in royalty payments when oil is imported instead of produced here."

I'm totally fine with that, as long as we view those lands (and waters) as belonging to the people, and demand appropriate compensation for utilization of our land.  We don't do that currently.

"There are many other things that should be done such as ending ALL, EVERY subsidy payment to industries like Agriculture and Green Scams of Wind, solar and electric cars.  If an industry can not stand on its own then it has no right to exist.  As a taxpayer I have a right to my earnings and you don't have a right to take my earnings to support your profit margin."

Interesting that you left out the oil company subsidies, and even more importantly, the financial industry subsidies.  These two industries DWARF everything else in regards to receipt of government largesse, by a FUCKTON.

"False metrics and narrow optics will give false solutions.  Deficit reductions come not just from goring everyone's favorite ox."

Indeed.  Please make sure you read and understand your own statement.

Fri, 10/26/2012 - 09:28 | Link to Comment dscott8186
dscott8186's picture

Standard tax treatment of capital expenses are not subsidies.  You obviously know nothing of business practice but instead choose to believe the propaganda of an economic illiterate like Obama.  The 5 year write off of capital expenses used by the oil industry is exactly the same as EVERY business is allowed.  It is NOT a subsidy. You do understand the difference between a tax deduction, a capital expense write off, a tax subsidy and a tax credit?  If you understood why the write off on capital expenses exists you wouldn't be making such an obvious mistake.  Or do I need to explain that to you?

Obama and his cohort of self serving self enriching friends have been chanting deceitfully that the 5 year write off is a subsidy.  Of course Obama and his cohort, i.e. his campaign contributors started this when a Republican lead House refused to renew the wind power tax credits and subsidies, i.e. their profit margin.  The wind power industry is not economically viable without a profit margin and that margin is only achieved on the backs of tax payers.  What is particularly outrageous about this propaganda is that even with all these government guaranteed profits, the wind industry even with a mandate forcing the electric utilities, i.e. a guaranteed customer base, to buy the power generated can not turn a profit on its own.  How's that for picking a loser?

I will agree however, that whatever tax credits that might exist even for the oil industry should be stopped.  Government has no business meddling in and distorting the market place.

Thu, 10/25/2012 - 16:08 | Link to Comment Tombstone
Tombstone's picture

Quatloos?  Beam me up Scotty, I'm drowning in debt.

Thu, 10/25/2012 - 16:41 | Link to Comment jplotinus
jplotinus's picture

"That military "excess" will pay off when the world thinks that it's a good idea to piss off the world's superpower, the US."

The assumption that "might makes right" has proven itself false and illusory time and time again. That said, I credit the poster with putting into writing one of the key, underlying American ideals. To wit:

Unlimited $trillions for weapons, no matter what, no questions asked, evah. That is how we roll.

Or, put simply. America believes might makes right. We'd rather die by the sword (read: gun) than by any other way.
America is crazy.

Thu, 10/25/2012 - 20:44 | Link to Comment rjs
rjs's picture

what makes you believe "Borrowing 35% of Federal expenditures every year is unsustainable"?

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