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Druckenmiller Blasts Obama: "Show Me When You Initiated Budget Discussions Without A Gun At Your Head"
One of the great ironies of the Obama presidency is that it has been a disaster for the young people who form the core of his political coalition. High unemployment is paired with exploding debt that they will have to finance whenever they eventually find jobs, and as Stan Druckenmiller explains in his WSJ interview, the "rat through the python theory," (that fiscal disaster will only be temporary while the baby-boom generation moves through the benefit pipeline and then entitlement costs will become bearable) is simply wrong; since, by then Druck exclaims, "you have so much debt on the books that it's too late." Unfortunately for taxpayers, "the debt accumulates while the rat's going through the python." The hedge fund billionaire adds that he "did not think it would be nutty to tie entitlements to the debt ceiling because there's a massive long-term problem. And this president, despite what he says, has shown time and time again that he needs a gun at his head to negotiate in good faith." The interview goes much, much further...
On The Thieving Generation...
While many seniors believe they are simply drawing out the "savings" they were forced to deposit into Social Security and Medicare, they are actually drawing out much more, especially relative to later generations. That's because politicians have voted to award the seniors ever more generous benefits. As a result, while today's 65-year-olds will receive on average net lifetime benefits of $327,400, children born now will suffer net lifetime losses of $420,600 as they struggle to pay the bills of aging Americans.
"Oh, so you've paid 18.5% for your 40 years and now you want the next generation of workers to pay 30% to finance your largess?" He added that if 18.5% was "so immoral, why don't you give back some of your ill-gotten gains of the last 40 years?"
But the "kids" still don't get it...
One of the great ironies of the Obama presidency is that it has been a disaster for the young people who form the core of his political coalition. High unemployment is paired with exploding debt that they will have to finance whenever they eventually find jobs.
Are the kids finally figuring out that the Obama economy is a lousy deal for them? "No, I don't sense that,"
On Entitlements...
...for those on the left who say entitlements can be fixed with an eventual increase in payroll taxes. "Oh, I see," he says. "So I get to pay a 12% payroll tax now until I'm 65 and then I don't pay. But the next generation—instead of me paying 15% or having my benefits slightly reduced—they're going to pay 17% in 2033. That's why we're waiting—so we can shift even more to the future than to now?"
and it's not going to get any better... despite the left's claims...
He also rejects the "rat through the python theory," which holds that the fiscal disaster will only be temporary while the baby-boom generation moves through the benefit pipeline and then entitlement costs will become bearable. By then, he says, "you have so much debt on the books that it's too late."
Unfortunately for taxpayers, "the debt accumulates while the rat's going through the python," so by the 2040s the debt itself and its gargantuan interest payments become bigger problems than entitlements.
On a disingenuous President Obama...
"I did not think it would be nutty to tie entitlements to the debt ceiling because there's a massive long-term problem. And this president, despite what he says, has shown time and time again that he needs a gun at his head to negotiate in good faith. All this talk about, 'I won't negotiate with a gun at my head.' OK, you've been president for five years."
His voice rising now, Mr. Druckenmiller pounds his fist on the conference table. "Show me, President Obama, when the period was when you initiated budget discussions without a gun at your head."
On changing the tax code...
Druckenmiller wants to raise taxes now on capital gains and dividends, bringing both up to ordinary income rates. He says the current tax code represents "another intergenerational transfer, because 60-year-olds are worth five times what 30-year-olds are."
And 65-year-olds are "much wealthier than the working-age population. So the guy who's out there working—the plumber, the stockbroker, whatever he is—he's paying the 40% rate and the coupon clippers who are not working anymore are paying a 20% rate."
Ah, but what about the destructive double taxation on corporate income? The Druckenmiller plan is to raise tax rates on investors while at the same time cutting the corporate tax rate to zero.
"Who owns corporations? Shareholders. But who makes the decisions at corporations? The guys running the companies. So if you tax the shareholder at ordinary income [rates] but you tax the economic actors at zero," he explains, "you get the actual economic actors incented to hire people, to do capital spending. It's not the coupon clippers that are making those decisions. It's the people at the operating level."
As an added bonus, wiping out the corporate tax eliminates myriad opportunities for crony capitalism and corporate welfare. "How do the lobbying groups and the special interests work in Washington? Through the tax code. There's no more building plants in Puerto Rico or Ireland and double-leasebacks and all this stuff. If you take corporate tax rates to zero, that's gone. But in terms of the fairness argument, you are taxing the shareholder. So you eliminate double taxation. To me it could be very, very good for growth, which is a huge part of the solution to the debt problem long-term. You can't do it without growth."
What the Republicans should do...
Republicans should demand entitlement reform in exchange for the next debt-limit vote this winter or spring. "Maybe they need a break," he says. "I think a much more effective strategy would be for them to publicly shine a light on something so obvious as means-testing and take their case to the American people rather than go through the actual debt limit."
If Mr. Obama rejects the idea, "then we will really know where he is on entitlement reform." For this reason, Mr. Druckenmiller views means-testing as "really the perfect start—and it should only be a start—to find out who's telling the truth here and who's not."
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http://blogs.wsj.com/emergingeurope/2013/10/03/russia-to-grab-pension-mo...
Why tax, when you can just confiscate pensions?
yea druck... it's the oldtimers fault. fuck you.
Can we please drop the "gun to the head" propaganda?
0bama, Reid and the Dems got every fucking thing they wanted-there was no real negotiation.
Is this asshat also in favor of letting the companies fail? My guess is he is another crony in favor of bailouts. Hang them all, start over with some mass graves and a clean slate.
FUCK YOU BERNANKE! FUCK YOU YELLIN!
The boomers, like everyone, were forced to invest in social insecurity and medon'tcare, if we all had invested that money in Something Other than those ponzi schemes chances are we WOULD be getting back MORE THAN WE PUT IN. That is why we bother to invest our money. It is no wonder boomers feel entitled to their money...not that they will get it. And of course there are those who did put in very little and will get back way to much...but in a free market society they would get way more back through charity.
Young people should watch this: http://www.silverbearcafe.com/private/10.13/scam.html
http://blogs.wsj.com/emergingeurope/2013/10/03/russia-to-grab-pension-mo...
Ooops...there goes the Russian private pensions!
Mornin' Y'all;
This isn't directly related to this article, but I think it kind of fits in: Gyp'em (JPM) has a former prosecutor for an apologist! (BIG surprise, right?) SO, these guys steal trillions, and then have the nerve to call the DOJ (whatever other monikers it justly deserves) a shakedown artist over the $13B fine. Check the newsfeed at CNBC:
http://www.cnbc.com/id/101127876
The suggestion made at the end of the article - drop the corporate tax rate to zero and tax the shareholders- is an item worth debate. It's sort of like legalizing marijuana - corporations pay precious little in taxes anyway, using the many lawyer-provided loopholes to squirm out of being , ah, "responsible citizens." Settling the tax burden on shareholders, where Wall ST. is concerned, has the double benefit that large shareholders are finally paying something back in benefits.
As for the rest of the article, pure bullshit. Those reading terrain will notice that there is a load of commentary recently that is clearly designed to frighten "the kids."All of it is coming from the Right, the uber-rich, and is a direct attack on the youth who this generation decided to bring into a world that they were busy raping. Same old Far-Right BS-when you don't have a constructive platform, scare the shit out of your opponent.
You know, Dru[n]ck, you have a really good, positive suggestion that might actually do something useful to ALL of us homo-saps here on Earth. Why did you preface this article with fearmongering and bullshit? Are you just the latest example of a Repub shooting himself in the foot?