Draft report of the US fiscal commission

[Loki]

http://en.wikipedia.org/wiki/Househo...ncome_by_state

[GGT]

SS payments are easily forecast because we control the growth in SS benefit per capita (as opposed to healthcare), and the demographic trends are pretty clear. The shortfall isn't too bad to start with, and slightly raising retirement age while slightly decreasing the growth in benefits is an easy fix that makes it solvent for the foreseeable future. There is no end in sight for healthcare cost growth, and discretionary programs (while a lesser concern) can fluctuate all over the place depending on the political climate.

The demographic trends have been clear for decades. More people living longer. Baby Boomers (some 80 million +/-) living decades beyond age 62 (the original age for SS benefits). The forecasts were obvious with emerging medical technology, but the fundamentals never evolved. So I disagree --- the shortfall in SS is HUGE, and nothing is easy to "fix". People expected SS to be a retirement plan or pension, that's why they agreed to payroll tax deductions in the first place. And why younger people are angry about the same deductions from their wages...for a program they see as insolvent in their future.

You're wrong on several points here. First off, while our military spending is quite high (though I'd dispute the 'larger than everyone else combined' farce, especially when corrected for PPP) so is the size of our economy. It's not a huge proportion of our income, though it is larger than most of the Western world (a reason IMO for the rest of the Western world to spend more, though, not for us to spend less). I personally feel we should not 'slash' the defense budget out of a misplaced sense of responsibility for our deficits - it's no question that defense spending growth has been largely reasonable in the last few years, and will likely turn flat or negative with Gates' new cuts.

That's why I said [citation needed]. Again, I disagree. Our defense spending hasn't been "reasonable". Mostly because it's not been true defense but questionable offense. Wars based on false premises and paranoia. GWB admits it; first it was WMD, then toppling a dictator, then building democracy, then liberating women or creating allies.....constantly moving goal posts. Wars fought by choice and not principle.

That being said, $100 billion off by 2015 is hardly 'slashing' the budget on the scale the UK did. The US has a lot more slack they can cut and $100 billion is not going to cut frontline procurement programs or manpower significantly (though I'm a little concerned about the future of the LCS program, the F-35, the future ground vehicle, and a potential destroyer replacement, let's be honest - I had those concerns before budget cuts due to a dysfunctional procurement system. Budget cuts will probably just accelerate the reform).

We should stop trying to be the world's police or protector. IMO. I'd like to see military spending slashed by half. I'd like to see our military spending be for defense instead of offense. And that would mean bringing every troop home from foreign bases.

[Loki]

I'm amazed you're not a Tea Partyer. You have the same simplistic, inconsistent, isolationist, nationalistic beliefs.

[GGT]

I doubt Middle Class is 100k to 200k household income in New York State either. Feel free to show me where median income is 150k in New York or Pennsylvania (ie MIDDLE) and agmenmus has a leg to stand on. Frankly if your in the top 25% of wage earners you cease to be middle class and are rich. If your in the bottom 25% of the income side you are the lower class (working poor or whatever PC BS you want to call it). The middle 50% is... *drum roll* middle class. Now feel free to propose a counter definition. But if it excludes everyone but the top 20% wage earners prepare for your definition to be ridiculed.

There's a difference between median and average. There are differences between states, and their cost of living. Middle class is really a group of classes. What's lower middle class in Austin, Texas might be working poor in New Canaan, CT.

But while we're at it, you can't even distinguish between your and you're, or then and than. Were you in the bottom percentage of your graduating class, or was your school below national average?

[Loki]

I think it's more important for someone to know how to think than to know the distinction between "you're" and "your" or "then and "than".

[GGT]

I'm amazed you're not a Tea Partyer. You have the same simplistic, inconsistent, isolationist, nationalistic beliefs.

Ah, the ole familiar Loki name calling tactic. When all else fails, sling some negative labels around.

[Loki]

Ah, the ole familiar Loki name calling tactic. When all else fails, sling some negative labels around.

"Were you in the bottom percentage of your graduating class, or was your school below national average?"

How can you even write that with a straight face? You just make one inane statement after another and hope that one of them sticks. Unfortunately, that's rarely the case.

[GGT]

"Were you in the bottom percentage of your graduating class, or was your school below national average?"

How can you even write that with a straight face? You just make one inane statement after another and hope that one of them sticks. Unfortunately, that's rarely the case.

Touche.

[Being]

Not true, it's pretty easy to find rates up above 1.1%. 2.3% is out the question for an unrestricted account, but CDs might get you there.

Also, GGT - ARMs are the way most of the world works. In fact US mortgages are ARMs in that there is never a refinancing penalty, which means consumers can always reduce (but not increase) their rate. This results in banks instituting high transaction costs that generally don't help anyone. There was a Canadian economist who had a nice piece on the ridiculousness of US fixed-rate mortgages a while back, but I don't have the link with me right now.


Onto mortgage interest deductions: it's just an enormous subsidy for homebuying, and quickly raises home prices (but not much else). Also, the deduction provides little real benefit for moderate to low income homeowners since it's not an above-the-line deduction. Given the cost and dubious benefits for most Americans, I'd favor phasing it out entirely, but at least the proposals in the report start with the most egregious problems. Obviously it shouldn't be done immediately, given that the housing market is already in the shitter and lots of people have negative equity. But slowly phasing it out over a decade or so would probably be a good idea. At the end of the day, it would help new (especially poorer) homebuyers as the price of homes dropped to compensate for the lack of a tax writeoff.

Regular Savings account is not a CD or any time required holding.

https://www.golden1.com/Rates/RateDetails?rid=4&l=en

[GGT]

I think it's more important for someone to know how to think than to know the distinction between "you're" and "your" or "then and "than".

So, Loki. Important thinker who knows how to think, why don't you tell us all how to fix our nation's debt and deficit spending? Surely you have all the answers. Because you know better than anyone else posting here. You're an important thinker, clear and coherent, free of any bias. It's just that damn presidential commission that can't hear you. But we are all ears here, so go ahead.....lay it out. Fix it.

[Being]

I think it's more important for someone to know how to think than to know the distinction between "you're" and "your" or "then and "than".

Know how to think or know how to reason? A person who knows how to reason knows the importance of using what they've been taught (like the difference between then and than) as opposed to a person who merely knows how to think.

[Lewkowski]

There's a difference between median and average. There are differences between states, and their cost of living. Middle class is really a group of classes. What's lower middle class in Austin, Texas might be working poor in New Canaan, CT.

The difference between median and mean are not important to the number of households making 100k to 200k. That remains unchanged at about 15% of the American households.

And based on geographical location you still would make a poor argument for the 100k to 200k range. I checked the link Loki put from wikipedia the median income difference from New York to Texas is about 6k.

However if you want to classify the middle class as a certain income range adjusted for cost of living in certain areas... go right ahead. Thats fine. The notion that only 15% of the American population is "middle class" is silly when realistically anyone making 200k is in the upper strata of American society. Feel free to put forth your definition of middle class though.

[GGT]

Know how to think or know how to reason? A person who knows how to reason knows the importance of using what they've been taught (like the difference between then and than) as opposed to a person who merely knows how to think.

Touche.

[Being]

Touche.

My point is that Loki is not much for reasoning; he just likes thinking (that he knows everything).

[wiggin]

The demographic trends have been clear for decades. More people living longer. Baby Boomers (some 80 million +/-) living decades beyond age 62 (the original age for SS benefits). The forecasts were obvious with emerging medical technology, but the fundamentals never evolved. So I disagree --- the shortfall in SS is HUGE, and nothing is easy to "fix". People expected SS to be a retirement plan or pension, that's why they agreed to payroll tax deductions in the first place. And why younger people are angry about the same deductions from their wages...for a program they see as insolvent in their future.

Your numbers are wrong. Look it up.

That's why I said [citation needed]. Again, I disagree. Our defense spending hasn't been "reasonable". Mostly because it's not been true defense but questionable offense. Wars based on false premises and paranoia. GWB admits it; first it was WMD, then toppling a dictator, then building democracy, then liberating women or creating allies.....constantly moving goal posts. Wars fought by choice and not principle.

While Iraq and Afghanistan cost a lot (and it's always good to limit expeditionary warfare when we don't need to), the majority of defense expenditures have nothing to do with ongoing conflicts but rather our peacetime mobilization, deployment, and procurement. It's expensive, but not too bad.

Also, your numbers are again wrong. Look it up. Basal defense spending growth (stripping out one-time costs) has not been unreasonable. It can always use some cutting (I don't think defense cuts should be a third rail any more than any other program) but it's not our fiscal problem.

We should stop trying to be the world's police or protector. IMO. I'd like to see military spending slashed by half. I'd like to see our military spending be for defense instead of offense. And that would mean bringing every troop home from foreign bases.

Uh, that's your perogative, but I think that's an awful idea.

Regular Savings account is not a CD or any time required holding.

https://www.golden1.com/Rates/RateDetails?rid=4&l=en

http://www.us.hsbc.com/1/2/1/default...BUS_CSM0000617

1.1%, like I said. Obviously rates differ in other countries, but 1.1% is pretty easy to get here (I think a few go as high as 1.2% or 1.3%).

[Loki]

My point is that Loki is not much for reasoning; he just likes thinking (that he knows everything).

I actually know what I know and what I don't. You, on the other hand, make consistent claims on topics about which you're grossly misinformed. Not only that, but you refuse to acknowledge your lack of knowledge or to take any steps to become informed. I've yet to see you make a single post that a reasonable person would consider to be intelligent. Unintentional ignorance is sometimes forgivable. You, however, must know that you're constantly talking out of your behind and do nothing about it, which says quite a lot about your character.

[GGT]

The difference between median and mean are not important to the number of households making 100k to 200k. That remains unchanged at about 15% of the American households.

Median is Mean, but it's not Average, Albert.

And based on geographical location you still would make a poor argument for the 100k to 200k range. I checked the link Loki put from wikipedia the median income difference from New York to Texas is about 6k.

So what's your point, Poindexter?

However if you want to classify the middle class as a certain income range adjusted for cost of living in certain areas... go right ahead. Thats fine. The notion that only 15% of the American population is "middle class" is silly when realistically anyone making 200k is in the upper strata of American society. Feel free to put forth your definition of middle class though.

I think you lost track of your own argument. You were telling aggie (in Massachusetts) that having a home in the $400-500K range wasn't really a middle class category, when it really is. It might mean a dual income couple each making $100,000, but that can also be the norm for that area. Cowboy.

[Being]

http://www.us.hsbc.com/1/2/1/default...BUS_CSM0000617

1.1%, like I said. Obviously rates differ in other countries, but 1.1% is pretty easy to get here (I think a few go as high as 1.2% or 1.3%).

I hope you read this before you opened your account.

http://www.us.hsbc.com/1/2/1/oao/ter...ode=CSM0000617

[GGT]

wiggin, which numbers do you want me to look up? The ones for SS, where we'll have one young worker supporting three retirees down the road? The numbers of Medicare, where the costs of care exceed revenue? Or the ones for waging two wars with tax CUTS?

[LittleFuzzy]

Another interesting thing about this global austerity and sudden interest in budgets: when the UK slashed its military spending, it inspired a new thread. http://www.theworldforgotten.com/showthread.php?t=1265]

Now that the US is going to slash military spending, we find ourselves arguing about mortgage interest deductions?

The US spends more on military than the whole world combined. [citation needed] Our first slashes should be in military spending. It should be deep and global. Only then should we look at slashing domestic spending for the poor, the very young or the very old. And (IMO) we shouldn't be paying trillions of dollars to protect other nations, while our own country is in decline.

In the event of an emergency, apply your own oxygen mask before attempting to assist others.

The draft suggests cutting military spending, and no one here is offering the slightest dispute or argument over it. We're DOING what you wanted, so why are you trying to object?

[GGT]

The draft suggests cutting military spending, and no one here is offering the slightest dispute or argument over it. We're DOING what you wanted, so why are you trying to object?

Because I am skeptical that recommendations will lead to actions. There is no DOING here, only ideas and suggestions. Also, because I know the two sides will argue about Defense vs Domestic, and history has shown that military spending trumps....pretty much all else. And any time people say we should spend money on our own citizens or our own national needs, people like Loki make accusations of nationalism or protectionism, and then equate that with being ignorant.

There's nothing ignorant or stupid about realizing our limitations, or pulling back when we've over-extended ourselves.

*In fact, there is good cause to stop acting like a super power, while we're in decline. I argue that this is our time to stop acting like the bully with the biggest britches, and pull back home, to survey things and do some mending.

[GGT]

Any comment from you, Loki? Or are you content to lambast me and Being for not knowing what you know, or thinking like you do, and leave it at that?

Is that what this is about for you, a game of aha told you so, or you know things we don't, or what the fuck?



*Oh, he went to bed. Second time I apologize for a tangent. Perhaps tomorrow we can comment on the fiscal commission, and state our opinions or ideas, and let it all hang out. It's fine to defend our views, but not so fine when it turns to personal or personality attacks. I'll try to do better. I will try to be less snarky or defensive. I will try to be more diplomatic. I hope we all will.

[Being]

I actually know what I know and what I don't. You, on the other hand, make consistent claims on topics about which you're grossly misinformed. Not only that, but you refuse to acknowledge your lack of knowledge or to take any steps to become informed. I've yet to see you make a single post that a reasonable person would consider to be intelligent. Unintentional ignorance is sometimes forgivable. You, however, must know that you're constantly talking out of your behind and do nothing about it, which says quite a lot about your character.

The behind part shows restraint, not reason.

[wiggin]

I hope you read this before you opened your account.

http://www.us.hsbc.com/1/2/1/oao/ter...ode=CSM0000617

I should read... the website terms and conditions? Pretty standard for using any website, far as I can tell. What's your point? Pretty much any bank not tied to a bricks-and-mortar setup will get you over 1% on your savings account (e.g. Ally, HSBC Direct, FNBO Direct, ING, etc.). They generally don't have many downsides - very few (if any) fees, low or nonexistent minimums, refunds of ATM fees, etc. They're a little slow in transferring money (up to 3 days), but that's about it. In contrast, my BoA account is shit - the checking account charges money unless a bunch of conditions are fulfilled, the savings provides essentially zero return, and I never use their bricks-and-mortar setup anyways.

wiggin, which numbers do you want me to look up? The ones for SS, where we'll have one young worker supporting three retirees down the road? The numbers of Medicare, where the costs of care exceed revenue? Or the ones for waging two wars with tax CUTS?

The first part I didn't like was when you argued we have a huge shortfall in SS that's not easy to fix. The numbers are clearly not in your favor - as a percentage of our deficits, SS is nowhere near the most important factor. Furthermore, we control the program and its costs and a few minor changes multiplied by tens of millions can save serious amounts of money. Raising the retirement age by less than a month a year is easy - so is indexing COLA to CPI instead of wage growth. Two simple fixes, and presto - no SS deficit!

My second problem with your numbers is your assertions about the defense budget. Strip out Iraq and Afghanistan and look at trend growth over the last 30 years. Add them back in, with the expected drawdowns in the next few years, and see where that leaves us in 2015. Now, compare that to a similar look at healthcare expenses and tell me where our long term fiscal problem is coming from. Do your homework and stop making hyperbolic statements.


For God's sake, healthcare is the problem. Everything else is just details that doesn't require some radical fiscal commission to fix, but rather some common sense moves.

*In fact, there is good cause to stop acting like a super power, while we're in decline. I argue that this is our time to stop acting like the bully with the biggest britches, and pull back home, to survey things and do some mending.

We're in decline?

[Being]

We're in decline?

Rank us against the rest of the world by GDP real growth rate over the last 5 years and yes we've been declining. Rank us against our own GDP real growth rate since 2005 and yes we're declining. What metric should we use to show we are not in decline?

[LittleFuzzy]

Because I am skeptical that recommendations will lead to actions.

Most of us think nothing will lead to action, the commission's never going to get the supermajority it needs to report out to Congress. So? Write a rant about it. But you yelled at US for not arguing about the defense cuts on here, when we weren't doing so because we're all pretty much in agreement with you about those cuts. You treat our tacit agreement as violent objection. Why, to feel validation about how righteous you are?

[']['ear]

Oh OK just to make clear you think a household must make more then 80% of American households to be considered Middle Class. What part of "Middle" do you like ignoring?

[QUOTE="']['ear;55276"]Conscious derail bid rejected, part deux.

http://worthwhile.typepad.com/worthw...dangerous.html

There's two sides to the issue, but he has a real point.

Thanks. Once the open vs closed thing was explained, the point and implications were clear.

[Lewkowski]

I think you lost track of your own argument. You were telling aggie (in Massachusetts) that having a home in the $400-500K range wasn't really a middle class category, when it really is. It might mean a dual income couple each making $100,000, but that can also be the norm for that area. Cowboy.

Income is often measured by household income which by the way is what aggie used as an example. If you have a two household income that can put you in a higher income bracket and therefore party of the "rich" or "upper class" whatever you prefer.

My point is of course that the mortgage deduction when excluding homes over 500k is NOT targeting the middle class in anyway. If you stretch the definition into something absurd (like 80% of the American population doesn't fit the claim) sure you can say that. Since then the argument has morphed into what is middle class.

I've asked you several times to put forth your own definition of middle class. Or lets change this - at what point does someone become rich?

[GGT]

The first part I didn't like was when you argued we have a huge shortfall in SS that's not easy to fix. The numbers are clearly not in your favor - as a percentage of our deficits, SS is nowhere near the most important factor. Furthermore, we control the program and its costs and a few minor changes multiplied by tens of millions can save serious amounts of money. Raising the retirement age by less than a month a year is easy - so is indexing COLA to CPI instead of wage growth. Two simple fixes, and presto - no SS deficit!

It's not an easy fix politically, third rail and all.

My second problem with your numbers is your assertions about the defense budget. Strip out Iraq and Afghanistan and look at trend growth over the last 30 years. Add them back in, with the expected drawdowns in the next few years, and see where that leaves us in 2015. Now, compare that to a similar look at healthcare expenses and tell me where our long term fiscal problem is coming from. Do your homework and stop making hyperbolic statements.

I was going off one of those studies and graphs you posted, showing most of our costs are in SS, Medicare/Medicaid, and Defense.

For God's sake, healthcare is the problem. Everything else is just details that doesn't require some radical fiscal commission to fix, but rather some common sense moves.

I agree health costs are the lion's share, but so are two unfunded wars that cost trillions. Common sense would say spend less on military operations and more on citizenry.

We're in decline?

Remember the Infrastructure data? US education and health care are consistently rated very low on a global scale, even our infant mortality is rising.

Most of us think nothing will lead to action, the commission's never going to get the supermajority it needs to report out to Congress. So? Write a rant about it. But you yelled at US for not arguing about the defense cuts on here, when we weren't doing so because we're all pretty much in agreement with you about those cuts. You treat our tacit agreement as violent objection. Why, to feel validation about how righteous you are?

I ranted a bit, yeah. Didn't think it was yelling or self-righteousNess, but now you've corrected me, as is your wont.

[GGT]

Income is often measured by household income which by the way is what aggie used as an example. If you have a two household income that can put you in a higher income bracket and therefore party of the "rich" or "upper class" whatever you prefer.

My point is of course that the mortgage deduction when excluding homes over 500k is NOT targeting the middle class in anyway. If you stretch the definition into something absurd (like 80% of the American population doesn't fit the claim) sure you can say that. Since then the argument has morphed into what is middle class.

I've asked you several times to put forth your own definition of middle class. Or lets change this - at what point does someone become rich?

Defining middle class(es) is like its own thread. But it depends on region and COL as much as income. (Thanks for quoting with name. )