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Unsustainable Spending (Must Read)
RealClearPolitics ^ | 2/21/2010 | David Warren

Posted on 02/21/2010 9:14:19 AM PST by mojito

A spectre is haunting Europe, and America -- the spectre of Keynesianism finally gone nuts.

What began, not very innocently, as a suggestion that governments should run deficits in bad times, and surpluses in good times, gradually "evolved." In the next phase, governments tried to balance at least the operating account during the best of times. In phase three, governments ran deficits by habit during the good times, but much bigger "stimulus" deficits during the bad times. We are now entering phase four.

[....]

The U.S. national debt now exceeds $12.3 trillion in a $14.2 trillion economy, and the U.S. government is now piling it on with unprecedented new deficits....

Little things, such as the heart of the U.S. space program, are being gutted to make way for metastasizing social security entitlements and debt service payments that will soon swamp the entire federal budget -- thus requiring the elimination of more little things such as the army, navy and air force. At some point the entitlements simply can't be paid, without hyperinflation.

[....]

While an optimist would say that we are witnessing the final demise of the welfare state, and good riddance, a pessimist would observe that everything must go down with it....

For our governments have created vast bureaucracies, employing immense numbers whose livelihoods depend entirely (whether they realize it or not) upon the capacity of profit-earning people to pay constantly increasing taxes.

It should have been grasped, decades ago, that the constant transfer of resources from the productive to the unproductive must eventually tip the ship. And when it does, real people go over the side, who get angry when they are thrown in the water. There are consequences to that anger.

(Excerpt) Read more at realclearpolitics.com ...


TOPICS: Business/Economy; Editorial; Government
KEYWORDS: debtbomb; obama
0 will realize his dream: He will destroy the first American republic.
1 posted on 02/21/2010 9:14:19 AM PST by mojito
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To: mojito

Hyperinflation is coming....

And there will be consequences...


2 posted on 02/21/2010 9:17:17 AM PST by Radix (What happened in Massachusetts, is going to be times 10 in a few months.)
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To: mojito
For our governments have created vast bureaucracies, employing immense numbers whose livelihoods depend entirely (whether they realize it or not) upon the capacity of profit-earning people to pay constantly increasing taxes.

That in itself will create the demise of our economy.

Without spending cuts the circle of taxation and dependency will prevent overall growth of our economy.

3 posted on 02/21/2010 9:22:41 AM PST by EGPWS (Trust in God, question everyone else)
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To: mojito

Start anew. Defund/dismantle all collectives.

Sweep ALL out or let them ALL resign and go back to their families. They only understand power. It’s time to flex OUR muscle. The soap box doesn’t work. They control all of the amplification devices. It’s time for the ballot box. It’s peaceful. It’s powerful.


4 posted on 02/21/2010 9:27:22 AM PST by PGalt
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To: mojito

Obama-nomics

Banks in CA, IL, FLa, TX are shut down...
http://finance.yahoo.com/news/Banks-in-Calif-Ill-Fla-Texas-apf-1195100471.html?x=0&.v=12

Governors: Bad economies in states to worsen...
http://www.reuters.com/article/idUSTRE61J26V20100220

Report: Taxes prop up ‘dying’ abortion industry
http://www.wnd.com/index.php?fa=PAGE.view&pageId=125372
[Could also call this ‘loony left’, but that would be too kind.]


5 posted on 02/21/2010 9:29:06 AM PST by Arthur Wildfire! March (Farah: "If [certifigate]'s been settled show us the birth certificate. Simple.")
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To: SeattleBruce; parsifal; Tolik

Little things, such as the heart of the U.S. space program, are being gutted to make way for metastasizing social security entitlements and debt service payments that will soon swamp the entire federal budget — thus requiring the elimination of more little things such as the army, navy and air force. ...[snip]


6 posted on 02/21/2010 9:30:39 AM PST by Arthur Wildfire! March (Farah: "If [certifigate]'s been settled show us the birth certificate. Simple.")
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To: PGalt

Return to the ‘07 budget and start fair tax.


7 posted on 02/21/2010 9:31:40 AM PST by Arthur Wildfire! March (Farah: "If [certifigate]'s been settled show us the birth certificate. Simple.")
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To: PGalt

You’re right. We need to destroy the DNC. We need to undermine their base support. That will take courageous words of truth. Working on the overall strategy. TTYL today. FRegards ....


8 posted on 02/21/2010 9:33:50 AM PST by Arthur Wildfire! March (Farah: "If [certifigate]'s been settled show us the birth certificate. Simple.")
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To: mojito

Just look at this link. It tells you everything you need to know.

http://www.usdebtclock.org/


9 posted on 02/21/2010 9:42:47 AM PST by Sprite518
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To: mojito

Please....

This has been a bipartisan effort in the making for decades.


10 posted on 02/21/2010 9:53:02 AM PST by misterrob (Have you tea bagged a liberal today?)
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To: Arthur Wildfire! March

Return to the 2001 budget level then index for inflation. If you cannot afford it then you don’t get to have it.


11 posted on 02/21/2010 9:53:57 AM PST by misterrob (Have you tea bagged a liberal today?)
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To: Arthur Wildfire! March
Everybody knows Warren is speaking the complete truth and there doesn't seem to be a constructive way out either.

Spooky to think that maybe a Ron Paul isn't such a nut job actually; find it hard to believe that a mainstream Repub would have the integrity to attempt a solution.

12 posted on 02/21/2010 9:55:47 AM PST by Eska
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To: mojito
Obama's policies have sucked up all the investment cash from the economy and obligated future payments to foreign bond holders. Those future obligations payments will bankrupt the nation with no course correction.

Obama's 2011 budget request includes $1.4 billion granted to the developing nations fighting climate change and limiting carbon emissions when man caused global warming is a total fraud. This one item represent 0.1% of the budget deficit. This one item is a window into the crazy Democrat spending. Government spending needs to be brought under control by deleting the wasteful and unnecessary line items.

Obama created the “Bipartisan National Commission on Fiscal Responsibility and Reform” to provide cover for a tax increase. The Obama tax increase will be the coup d’grace for jobs in the United States.

13 posted on 02/21/2010 9:55:52 AM PST by ricks_place
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To: Radix

Roger that, Radix!!


14 posted on 02/21/2010 10:05:52 AM PST by blackie
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To: mojito

Maybe they should go to Vegas and put all 14.3 trillion on red. Actually, the problem is surprisingly easy to fix, if only a leader would emerge with balls: www.offgridblogger.wordpress.com.


15 posted on 02/21/2010 10:27:25 AM PST by grumpa (VP)
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To: misterrob
"Return to the 2001 budget level then index for inflation. If you cannot afford it then you don’t get to have it."

The formula should be:

In year X the congress gets to budget for year X+1 what it collected in year X-1.

The government should be competent enough to figure out in the middle of year X what they collected in X-1. I realize that in our screwy world even this seems to be beyond their abilities, but this is something we can hold them to.

If they want to spend more money in year X+2 then they will need to get a majority of congressmen to vote for more taxes.

Regardless of the inflation rate or the tax rate or the spending rate, there is a firm figure that they can be held to based on real numbers.

16 posted on 02/21/2010 10:43:39 AM PST by who_would_fardels_bear (These fragments I have shored against my ruins)
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To: mojito

Thanks for posting this article.


17 posted on 02/21/2010 10:56:47 AM PST by neverdem (Xin loi minh oi)
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To: misterrob
Return to the 2001 budget level....

Ah yes, Clinton's budgets were soooo wonderful.  Not!

His FY01 budget was a disaster that took years to clean up after becuase it gutted defense and still had soaring taxes.   After rebuilding our military we were far better off by '07 with lower taxes and shrunken deficit.

18 posted on 02/21/2010 11:11:49 AM PST by expat_panama
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To: Radix

The first round came and went, IMO. We’re deflationary now. Strong chance we could slip back into hyperinflation. Crude metaphor = continuing to overwater a plant dying from root rot.


19 posted on 02/21/2010 11:27:51 AM PST by CowboyJay
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To: Arthur Wildfire! March

“We need to destroy the DNC.”

You’ve only got half the problem solved in that case......the GOP is the federal governments second best friend, and has to have the same fate.


20 posted on 02/21/2010 11:42:10 AM PST by RFEngineer
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To: mojito
...While an optimist would say that we are witnessing the final demise of the welfare state, and good riddance, a pessimist would observe that everything must go down with it....

...It should have been grasped, decades ago, that the constant transfer of resources from the productive to the unproductive must eventually tip the ship. And when it does, real people go over the side, who get angry when they are thrown in the water. There are consequences to that anger...

Stockpile and Invest in (as much as possible) getting yourself in the best physical shape possible, needed medications, water purification, food that can be stored, camping and survival supplies, and precious metals such as brass and lead...

21 posted on 02/21/2010 11:44:04 AM PST by Screaming_Gerbil (Luke 22:36 "Then said he unto them...he that hath no sword, let him sell his garment, and buy one.")
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To: grumpa
I made your link clickable: How To Fix The Budget Death Spiral Problem

Many people have plenty of good ideas, but the simple truth is that the people in power are not listening and they don't care.

So, I am sorry to report that none of this is going to be easy, or painless.

In fact, it might entail quite a lot of pain (and blood and sweat and tears) in the coming years...

22 posted on 02/21/2010 11:51:31 AM PST by Screaming_Gerbil (Luke 22:36 "Then said he unto them...he that hath no sword, let him sell his garment, and buy one.")
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To: misterrob

“Return to the 2001 budget level then index for inflation. If you cannot afford it then you don’t get to have it.”

That won’t do it either. Medicare, medicaid, Social Security, federal retirements of all types (even military.....) will not be paid as expected.

The entire concept of a “dignified” retirement will go - unless you can figure out a way to pay for it yourself. Otherwise, you will not get to decide where and how you live - the folks providing you charity will decide for you.

The author gets it. The only thing worse than America’s demise will be everyone else’s. We’ve powered the worlds growth, and when the hill becomes too much for the train, we’ll disconnect the boxcars until we can make it.


23 posted on 02/21/2010 11:52:07 AM PST by RFEngineer
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To: mojito

>>>0 will realize his dream: He will destroy the first American republic.<<<

I think you are correct. He and his cohorts probably think, like all good Marxists, that history is a trajectory pointing ultimately to communism, and that nothing stands in the way.

Except that the theory itself is badly flawed.

IMHO: Obama will destroy the republic. There will be chaos. Underneath the chaos, though, there are those of us who have read the Constitution, love liberty, and desire limited government. We may have to start over, and this time take a second look at how the Constitution was subverted by the left, and make efforts to prevent it. I can tell you already that my son, at the age of 11 years, already has in his heart a love for the country, a desire to live as a free man, and the will to defend his liberty. There are others like him in this little village who will stand with him, shovel in hand, to rebuild. And they will not forget who and what caused the mess in the first place.

Not every generation will have at sweet as I did, born in 1956 into the land of the weekend barbecue and a big Chevy in the garage. Not every generation will be a grim struggle, either, but sometimes we get the cards we’re dealt.

I don’t think this is the end of our country. It’s a huge problem that we will have to overcome, and I think we will.


24 posted on 02/21/2010 12:05:23 PM PST by redpoll
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To: misterrob

Sounds good to me. Instead ...

Cash for Convicts? [Stimulus checks for first degree murderers]
http://www.foxnews.com/search-results/m/26044849/cash-for-convicts.htm

[Stimulus]
How Did John Stossel Get a Free Golf Cart From the Government ...
http://www.foxnews.com/story/0,2933,585395,00.html

Report: Taxes prop up ‘dying’ abortion industry
http://www.wnd.com/index.php?fa=PAGE.view&pageId=125372
[Could also call this ‘loony left’, but that would be too kind.]


25 posted on 02/21/2010 12:15:58 PM PST by Arthur Wildfire! March (Farah: "If [certifigate]'s been settled show us the birth certificate. Simple.")
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To: Eska

Ron Paul Discusses The Greece Bailout
http://www.infowars.com/ron-paul-discusses-the-greece-bailout
[Greece is but a warning of what is yet to come?]

Yeah, I think we could do a heck of a lot worse than Ron Paul. I also think that Palin has some good ideas too, like “drill baby drill” and Reaganomics.

Another major idea is the fair tax, the only thing that makes Boortz stand out in a good way.


26 posted on 02/21/2010 12:20:44 PM PST by Arthur Wildfire! March (Farah: "If [certifigate]'s been settled show us the birth certificate. Simple.")
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To: RFEngineer

We can pick our RNC targets with care.

How about we start with McCain?


27 posted on 02/21/2010 12:22:08 PM PST by Arthur Wildfire! March (Farah: "If [certifigate]'s been settled show us the birth certificate. Simple.")
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To: redpoll

Spot on!


28 posted on 02/21/2010 12:41:26 PM PST by gruffwolf
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To: mojito
they probably thought goldman would help 'em hide the deficits with some off-balance-sheet swaps, like they did with greece.

anyhoo...paging paul volcker.

29 posted on 02/21/2010 2:28:53 PM PST by the invisib1e hand (yeah, you can quote me.)
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To: redpoll
nice thoughts.

We're headed to a soft dictatorship with some hard edges, and it will be global. No timetables -- either sooner than we think or later than we think.

30 posted on 02/21/2010 2:30:33 PM PST by the invisib1e hand (yeah, you can quote me.)
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To: the invisib1e hand

>>>We’re headed to a soft dictatorship with some hard edges, and it will be global. No timetables — either sooner than we think or later than we think.<<<

Sometimes I’ve thought the same thing - we could go the route of Rome, with the collapse of our Republic being replaced by an Empire - and the Roman Empire was just as you’ve described, as was Mussolini’s attempt to recreate the Empire, fasces and all, in the last century.

In which case, the United States lasts for a thousand years, sometimes lurching between bad despots, and our Constitution will remain in the history books for some future generation to read and think about, in the same way we read Cicero and Aristotle today and think about Periclean democracy. Maybe they’ll need a New World to recreate our experiment - and, fortunately, it looks like the universe is filled with those new worlds.

Then there’s part of me that thinks we’ll succeed in my generation and reestablish the republic.

I guess we’ll see.


31 posted on 02/21/2010 3:42:59 PM PST by redpoll
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To: expat_panama

Are you kidding me?

Go back and look at the amount of deficit that had been amassed over the first 7 years of the Bush administration. Clinton’s budget (with a Repub Congress) in 2001 fell into a deficit due to falling revenue from the Tech crash and Bush’s spending and other gimmicks.

And, the laws of math will tell you that you cannot boost your spending, cut taxes and borrow the difference without it biting you in the ass hard later on.


32 posted on 02/22/2010 4:22:01 AM PST by misterrob (Have you tea bagged a liberal today?)
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To: RFEngineer
That won’t do it either. Medicare, medicaid, Social Security, federal retirements of all types (even military.....) will not be paid as expected.

Correct.

33 posted on 02/22/2010 4:23:27 AM PST by misterrob (Have you tea bagged a liberal today?)
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To: misterrob
"...you kidding me?   Go back and look..."

You may have a great starting point there but without hard numbers you don't go anywhere.  Let's stay clear of a cheap pi$$ing contest and stick to facts; here're mine.   Show us which budget office figures you're talking about.

34 posted on 02/22/2010 1:11:14 PM PST by expat_panama
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To: Arthur Wildfire! March

How about a thread discussing fair tax.
I for one have a lot of unanswered questions, after browsing the website.
Can’t do it tonight, but I would love to have some dialog.
Thanks,


35 posted on 02/22/2010 3:33:36 PM PST by Apogee
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To: redpoll
Then there’s part of me that thinks we’ll succeed in my generation and reestablish the republic. I guess we’ll see.

Indeed. The biggest problem I have with the current trajectory is the seemingly unchecked aggregation of power (politcal, police, data and capital and * in case I've left out a biggie). People are fighting a thousand fires on a thousand fronts meantime the structure is giving way.

Anything that counteracts this perverse aggregation -- which, incidentally, I think would disturb the founders greatly, and should disturb everyone as greatly -- would be a good thing for the cause of liberty.

FWIW, I think things tend to climax in some disaster and then life goes on. But there may come conditions for which the climax will be so overwhelming to mankind (i.e. the interconnected world) that God Himself has to step in and then it's a whole new game with new rules.

The Divine "reset," if you will.

36 posted on 02/22/2010 4:11:47 PM PST by the invisib1e hand (yeah, you can quote me.)
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To: expat_panama

http://www.heritage.org/research/features/budgetchartbook/federal-spending-growing-faster-than-federal-revenue.aspx

Spending grew tremendously during Bush tenure. In 8 years time spending went up a whopping 50%. Spending cannot increase on that scale while revenues are falling. At some point you are blowing a bubble and when it blows up God help us all.


37 posted on 02/22/2010 9:32:51 PM PST by misterrob (Have you tea bagged a liberal today?)
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To: misterrob
You're absolutely right saying that spending "...grew tremendously during Bush tenure...", and that was good because the economy grew more.  

It's the old problem of surges in both incomes and expenses, that doubling expenses is OK when incomes triple, but doubling income is no good when expenses triple.  That's why federal budgets make more sense considered as a percent GDP.  Your link showed that Heritage knew this when they when brought up national defense.   Like I said back in post 18 that the 2001 budget had gutted defense and how most of the 'tremendous growth' in Bush's spending was defense.

National Defense Spending as a Percentage of GDP

Funny how Heritage first bad mouths Republicans and then switches to %GDP.  Heritage usually does a good job telling us what the US budget looks like, but it's really better to see things directly instead of letting others tell us what we're supposed to see.

38 posted on 02/23/2010 5:51:52 AM PST by expat_panama
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To: expat_panama

Deficits as a % of GDP is utter nonsense. You are still debting and in the end you have to pay it back with interest. The longer you debt the more interest increases as a share of the budget. That means more tax money being deployed to support what you have already consumed vs leaving it in the hands of people to utilize as they see fit.

And, it doesn’t matter what the spending is for. Tax Revenues must > Total Spending.

People want to talk about how important it is to have a strong military, take care of our seniors’ health in the golden years and make good on the promises of social security.

Where is the god damned money going to come from to pay for all of this?


39 posted on 02/23/2010 6:16:59 AM PST by misterrob (Have you tea bagged a liberal today?)
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To: misterrob
Deficits as a % of GDP is utter nonsense

We're kind of stuck now because I'm not sure we can get together on say, how a $10 million debt during the Washington administration meant possible default while Reagan led the nation to prosperity with $5trillion in debt.

Been fun though, and thanks for the chat!

40 posted on 02/23/2010 6:55:00 AM PST by expat_panama
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To: expat_panama

You make $50K a year. You live okay but not in luxury.

If you borrow $10,000 (5 years 8% int) and spend it all are you prosperous? It might feel that way at the time but all you have done is created a liability and future drag on yourself when you have to pay it back. Suddenly that $50K a year is not as enjoyable because with debt and interest payments you now have $47,500 available to spend and in addition that extra $10K you had available to spend is gone.

Or you can borrow another $10K on the same terms and live almost as well as you did the year before less the $2.5K in debt and interest. But in year 3 your debt vs earnings is now 19%. You have $45K a year to spend vs the $50K you earn

or you can borrow another $10k and keep doing it every year until your debt service crowds out everything else.

At some point the laws of math catch up to you and your ability to pay off debt fails when you don’t make enough $$ to even eat and provide shelter for yourself.

You conned yourself into thinking that you were prosperous when in fact all you did was debt yourself into a black hole. In the first few years life was good. At the end you borrowed from one credit card to pay another.


41 posted on 02/23/2010 8:50:35 AM PST by misterrob (Have you tea bagged a liberal today?)
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To: misterrob
Everything you're saying about personal earning/borrowing is absolutely true and I agree completely, so let's add up the grand total of all that America's actually earning and borrowing because that really is what the the GDP and the national debt are. 

The GDP is the $11,000 billion that all of us private individuals are buying and selling this year added to the $3,000 billion that federal, state, and local governments are buying and selling.  The total national debt that the feds owe everyone (mostly us) is $8,000 billion .  Back in 1945 when WWII ended, our total buying and selling was just $223 billion (mostly government) and the feds owed $270 billion.   Back then we owed more than we made.   Right now we make more than we owe.  Now is better. 

42 posted on 02/23/2010 12:53:09 PM PST by expat_panama
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To: expat_panama

uh huh....


43 posted on 02/23/2010 2:02:55 PM PST by misterrob (Have you tea bagged a liberal today?)
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