Robert Winner

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Debt Ceiling Crisis

For the last few months I have bee successfully guided away from the elephant in the room and very concerned with the fisical cliff ... which is important granted.

The part of the package that the Administration is holding dear to is .... an administrative right to total control of the debit ceiling with no Congressional input or guidance.

At issue is that the government is spending more than is coming in ... Repbs want to reduce the government and balance the budget .... Demos want to have unrestricted spending and lower taxes thus less coming and more going out.

I think this is the key issue in fisical cliff talks and has not been addressed to the public in the manner it deserves.

What do you think?

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      Dec 31 2012: Mike you nailed it

      This is what happens at the local level this is not what happens with centralized government, which as we all know is subterfuge for taking power and enslaving us.
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    Dec 31 2012: it seems to me, as of now, that the fiscal cliff will last one day this year. who would have thought? neither of the big parties wants to reduce the size of the state. they both subscribe to keynesian fears about economic downturn caused by reduced state involvement. and they are both fine with the status quo. red or blue, the difference is minuscule.
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    Gail .

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    Dec 31 2012: Pat, you misrepresent reality

    The House of Representatives has EXCLUSIVE right to introduce spending bills. If the senate agrees with the house's bill, it goes to the president for signature. If the president vetoes, it returns to congress who can override the veto. You are giving the president too much power.

    As I understand it, Reps want to reduce spending except military, that it wants to enhance. Dems want to reduce military as well, but it also wants some spending bills included. They do not want unrestricted spending. Reps want tax policies that favor the wealthy who got us into this mess. Dems want to even that out.

    I also favor not raising the debt limit, but the only way to do that is to drastically reduce military spending which will throw us into another down-turn (recession or depression). Smaller government? Same thing.

    Rather than blame the president for things that are not in his purview, I would like to hear how you suggest that we fix this mess without bringing down the whole house.

    If you are willing to let the house collapse, then I understand what you are saying, but you have never suggested this before, so more information would be appreciated.
    • Dec 31 2012: Exactly: congress will always have a major say on the debt ceiling, even if it is indirectly.

      P.S. it is indeed Robert and not Pat that started this thread.
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      Dec 31 2012: Are you talking to me?
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        Gail .

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        Dec 31 2012: Please do accept my apologies. The comment is to Robert. :-(
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      Dec 31 2012: Just out of curiosity TL.

      What would happen if the house fell?
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        Gail .

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        Jan 1 2013: We would be forced to come together into communities and re-establish our relationships with others and with the land. A lot of people would be very terrified. Perhaps they would learn how to walk through their fears and own the power. Then a much finer would would begin to establish itself - without a monetary system
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          Jan 2 2013: Happy New Year TL.

          It wouldn't come to a total collapse would it? There must be some provisions in place for your house of representatives to rely on? This is mute since yesterday but it was a foregone conclusion that it would ride over the time.
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        Gail .

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        Jan 2 2013: Happy New Year to you too, Ken.

        If the economy collapses (money has no value), then the social glue that holds us together (money) is no longer there. Do you think that the government that forced this state of affairs on us necessarily (sold us out for money and power) would be able to stay in power when so many lives were destroyed in the name of $$$$$$$$$$$$$$$$$$?

        I don't. There is a way to live without money (including barter). Those who prefer the inequality and divisiveness that money was INTENDED to instill in a society don't want people to know that.

        the fiscal cliff was a misnomer. More like a fiscal slide. But we probably have a few more years left before it all comes tumbling down. We have yet to see the period of spiraling inflation.
  • Dec 30 2012: "Repbs want to reduce the government and balance the budget .... Demos want to have unrestricted spending and lower taxes thus less coming and more going out."

    In what universe is this true?

    Reps want to cut taxes on the rich, keep taxes on the middle class as they are, raise military spending and cut welfare spending (well some of it, they won't touch the majority of it, namely anything that goes to seniors, the key republican constituency), dems want to raise taxes on the rich, keep taxes on the middle class as they are, cut military spending, and keep welfare spending as it is.

    The disagreement is primarily about the rich and the military.
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      Dec 31 2012: 'In what universe is this true?'

      Thats what I'd like to know aswell.
      I follow American Economic policy and congressional hall quite closely and all I tend to see from Republicans (despite a fraction of Libertarians and Oldskoolers such as Bernie Sanders) is the budget of:

      -Give more reductions to the wealthy
      -Give more to the military
      -Cut everyone elses services, programs and safety nets to cover some of the above.
      In what way is any of that fiscally responsible? It isn't.

      I doubt theres a legitimate American-Economic model on Earth that concludes that increasing the worlds most inflated military budget and giving further tax breaks to those already only paying 5% is in the interests of a balanced budget..
      Then again, I struggle to see any legitimate perspective in American politics these days..
      (Again, besides Bernie Sanders).
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    Jan 3 2013: So the corrupt bastards (Republicans) did it again. They are not rearranging the deck chairs on the Titanic they are going into the wheel house and giving the full speed ahead command.

    The one small hope we could have is gridlock. They did NOTHING about the spending. It is seriously time to fire all republicans and all democrats and vote in real libertarians (Ron Paul) the rest are putrid scum.
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      Jan 3 2013: I could watch the first but not the 2nd vid, it was great and sad but not surprising as it only highlights that in all government bodies there is the Patron system still in effect somewhere in some form. The thing that gets me is why didn't America go na na over this at the time?

      TL's right, inflation hasn't hit yet. What do you think?

      Pat. How strong are the lobby groups? especially the foreign backed groups, Can they influence or have influenced the current decisions?

      Here's a link that's way off topic and it might be conspiracist rubbish but i lived through those times as a kid so, I didn't actually pay any attention to any of it except it's quite in depth.

      http://www.veteranstoday.com/2012/12/31/david-rockefeller-the-looting-of-iran/

      I spoke to a Kiwi ex pat that currently resides in California and she said to me that they are thinking of moving to Canada or Mexico, Do you think that there could be a rush to get out?
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        Jan 3 2013: I don't know it seems like there should be hyperinflation. I guess it is because the money is used mostly to bail out banks and keep the price of housing artificially high, otherwise the banks assets would not have enough value to meet their fractional reserve requirements.

        We Americans are so naive and ignorant, but what country is not? Yea this insider trading thing should land some heads on some spears. Starting with Pelosi.

        I guess when things are good people shrug their shoulders?

        I don't think Mexico would be a good choice but certainly Canada or places in the U.S. that are not as prone to violence as So Calif.

        I mostly look to the Austrian school on this subject they are saying the 2 big bubbles right now are bonds and healthcare. So by deduction is that when Bernanke has to start paying more than 1.5 percent on the bonds (borrowing) that just debt service will be 30% of the revenue and that is when the shit will hit the fan.
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          Jan 4 2013: Pat I took this out of an article. "The bill delays for two months tough decisions about automatic spending cuts that were set to kick in Wednesday."

          I think the intention is to link the cuts into the Debit Ceiling deals.

          However your feelings are echoed by many from both parties and are reflected in many articles I have read.

          I have heard that some of the ratings agencies are posed to reduce the US credit rating yet again and that would mean that the perfered rate of 1.5% would now be 10% or higher depending on the new rating.

          Obama has already drawn a line in the sand of what he will and will not do ... just like the fisical cliff talks ..... and made comments that the GOP is to blame ... all this even prior to the talks. Politics first and America last .. another media circus enroute.

          The problem is that the man on the street is clueless about the issues. There is little attempt to educate the public ... keep them in the dark and feed them crap ... the old mushroom theory.

          I do not see the exit of people as much as money going out of country soon. Is there a way to view or track that that we have access to?
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        Jan 4 2013: Not that I know of but is absolutely part of the zeitgeist I live in.
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    Jan 2 2013: Would you guys be interested in looking at this?

    http://xkcd.com/980/huge/#x=-712&y=144&z=3

    It's a money chart, an unbelievably huge chart.
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    Dec 31 2012: A good post Mike.

    I found this if anyone is interested.

    http://projects.wsj.com/my-deficit-plan/

    There's still a lot of time.
    • Dec 31 2012: I do not know whether it's because of the WSJ's biases (though to their credit they're not trying to dispute the CBO's predictions that adding a government run health plan to the exchange will save money and that increasing tax rates will increase revenue) or whether their list only includes stuff that's being discussed right now in the negotiations but I find it striking that major choices are not listed, such as:

      - structural reduction of military spending instead of the hasty, temporary $75bn cut from the fiscall cliff, plus cuts to those overpaid, triggerhappy mercs, oh, I'm, sorry, I mean "private security contractors"

      - increase of taxes on dividends and capital gains

      - reform of corporate tax (lower nominal rates, less loopholes) so truly small businesses pay a little less and giant corporations pay a lot more

      - subsidies to oil and agricultural corporations
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        Dec 31 2012: Yes that word "Contractors", in my country it was called "Consultants" and they made a killing providing their unique services. Look, I don't think your country can afford to lower the military budget too much if you want your country to remain secure in a "possible" future turn of events. Obviously this is not going to sit well with the peace faction of us here or whatever political side people side on.

        I have another link you might find laughable.

        https://www.bcgperspectives.com/content/articles/management_two_speed_economy_ending_the_era_of_ponzi_finance/

        or

        http://finance.townhall.com/columnists/danieljmitchell/2012/12/25/while-much-of-america-suffers-with-stagnation-washingtons-political-class-is-having-a-very-merry-christmas-n1473636?utm_source=thdaily&utm_medium=email&utm_campaign=nl

        I'm not American John but i have this distinct feeling that trying to wade through so much information without some spin on it is virtually impossible for anyone. Whether these links are reputable is impossible for me to discern.
        • Dec 31 2012: I'm not American either and I for one believe the United States will be just fine with a smaller military. In 2000 the US military cost 3% of GDP, a return to that situation would shave $150bn off the federal budget per year, ending the war in Afghanistan will put in an additional $90bn per year and the US military would still be the most expensive in the world while 3% of GDP is also above the NATO average, to top it all off these measures don't have to cost a lot of jobs.

          $240bn is a quarter of the American federal deficit...
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        Dec 31 2012: This made me laugh John but not at you or your post just at "Not American either" I'm not a profile scanner so it came as a pleasant surprise. Would you look at this link's pdf about possible invasion tactics? I'm sure there is far better and more vetted pdf's on this subject but i'm sure that an actual invasion would be disastrous to the planet.

        http://www.wired.com/dangerroom/2012/09/iran-war-plan/all/

        I don't actively look for this but thought it would be good reading, it's probably rubbish.
        • Dec 31 2012: I get that a lot online: people think I'm American even though I use British spelling on some words.

          Anyway, I don't think a 3% military would take away the option of air attacks against Iran and I certainly don't believe such an attack is absolutely necessary either, I doubt it would even be on the table if it weren't for so many virulently pro-Netanyahu American evangelicals (who have their own reasons for this support, none of them having to do with national security) in the American electorate. Let them have that bomb 5-10 years from now, it can't be worse than Pakistan and North Korea having a bomb and chances are that 10 years from now a popular revolt has removed the Ayatollahs in Iran.