Explaining Why Federal Deficits Are Needed[W:5330]

[Chainsaw]

Wages have been increasing at a steady and more or less accelerating rate for the past four years.

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>>like every standard lib, you don't give a sh1t about the real world

Real in what sense?

>>indoctrinate the dumba$$ with propaganda.

Is that what happened to you?



Don't hurry back on our account.



The accounts are separate.

>>you can't do Commingling to cover company loses

That's not what's being done. Public debt is not the same as intragovernmental debt. You want them kept "separate" don't you?

Treasury keeps very careful records. Notice that intragovernmental debt is included in the national debt figure it publishes monthly. It's not included in the deficit because it's not money that the gubmint is required to pay back, but rather borrowing from the trust fund surpluses. That money is the gubmint's, and since we the people are the gubmint, it's our money.

We do have a moral and political obligation to keep the trust funds solvent, and ask yerself which political party and which ideology is more committed to living up to that obligation. Social Security is a pay-as-you-go system, and it's what ya might call "formalised." But is it at all realistic to expect that we won't be collecting taxes in future years to pay for things like public education and national defence? They're sort of pay-as-you-go as well.

You shouldn't feel bad that the reported deficits aren't as large as they are in yer mind — you have that debt clock and $19 TRILLION to holler about. Now if we can just stop electing RW Republicans who created that mountain of debt with their massive and unproductive tax cut giveaways to wealthy households, their dangerously irresponsible and highly destructive deregulation of the financial sector, and their reckless and very expensive overseas military misadventures … we'll be a lot better off.

>>future deficits costs which will surprise many in the future

Not if we stop allowing RWers to do so much damage to the economy and the gubmint's finances.



Yeah, we've seen it here before.

>>I am done trying!!!

You keep saying that but you don't go away.



And hopefully voters are beginning to realise who can be trusted and who can't.



I don't have retirement coverage outside of SS. Do ya like me a little bit more now?

What does the 'Average Hourly Earnings Of Production' mean to to???

Now If you were talking about 'Average Hourly Earnings OF EMPLOYEES' yo lil o graph might be pertinent to my point. In if fact your graph perfectly proves my point. Modern GDP growth doesn't mean anything but Hillary/Oligarchy growth. Joes get f* and you better figure that out before you are officially given the title of serf.

 

[Kushinator]

No, the Government changed the rules for themselves.

So you say.

There is no possibility of income caps being lifted. Wasn't lifted 1993-1994 or 2009-2010. It also actually solves nothing in the long run, rather it delays the reality that earning 2% on those special treasury bonds is a joke... It would also reduce other federal income tax collections... it's another shell game scam (or Robbing Peter to pay Paul).

I disagree entirely. If we subject all wages to the payroll tax, S.S. is essentially fixed until 2067.

 

[Chainsaw]

Still here making a fool of yerself?

In Mar 2010, employment in professional and business services was 16.5 million, and it's now expanded to 20.1 million, a 22% increase. Overall private sector employment is up from 107.4 million to 121.8 million, a 13.4% increase.

So those on-average, higher-paying jobs are substantially overrepresented in the employment gains achieved over the past six years. One in four of the new jobs added during that period are in business and professional services.

In 2015, there were 870K workers paid the MW, and 1.7 million paid less than that. In 2010, there were 1.8 million paid MW, and 2.5 million paid less. So the number of very-low-wage employees fell by forty percent over that period.

I love the way you lump Professional and SERVICE jobs into the same category, as if they pay the same and have the same benefit to GDP. If all your regurgitated MSNBC BS was true, the GDP would have been well over is sub-minuscule 3%. How could it NOT?

 

[mmi]

If you were talking about 'Average Hourly Earnings OF EMPLOYEES' yo lil o graph might be pertinent to my point.

Check the title again. See the word after "nonsupervisory"? Begins with an e, ends with an es, nine letters?

>>your graph perfectly proves my point.

In what sense?

>>Modern GDP growth doesn't mean anything but Hillary/Oligarchy growth.

Those are real wages, not GDP.

>>Joes get f* and you better figure that out before you are officially given the title of serf.

My official titles are lord of the manor, king of the castle, tegwar champ, and hound attendant. I'm guessing yer not even master of yer domain.

I love the way you lump Professional and SERVICE jobs into the same category

You really should read more carefully, although I suppose it wouldn't help much. "Professional and business services" is a BLS employment category, not something I "lumped" together.

>>all your regurgitated MSNBC BS

BLS data, moron.

>>GDP would have been well over is sub-minuscule 3%. How could it NOT?

A variety of factors. If you knew anything about the economy. you'd know why.

 

[austrianecon]

Maybe you can explain to me - what exactly is the issue you have with intragovernmental debt?

When the government borrows money from the social security trust fund, it pays the interest to the social security trust fund. In other words, the only expense associated with borrowing is a revenue for the lending. So what's the problem?

The problem with intragovernmental debt is that it's disguising real deficit costs per year. We have $5.5t in intragovernmental debt and We pay a higher % in interest on this amount of debt then we do public debt. We would be saving $46b a year on interest if we just issued public debt.

That expense is more costly then just issuing the debt to the public. SSA can maintain is legal obligation to buy US debt, but do so in the bid process which is done in the public realm and that borrowing officially noted in yearly deficits as a realized short fall instead of kick the can down the road short fall which would lead to benefit losses.

 

[austrianecon]

So you say.

They did in 1968/1969 with LBJ's unified budget. Before that Social Security was off budget. Never counted as revenue of the US Government and since 1990s that's the case as well. If it's off budget, then borrowing from it should be a reported borrowing as part of deficit.

I disagree entirely. If we subject all wages to the payroll tax, S.S. is essentially fixed until 2067.

And that's fine.. we all disagree on how to fix Social Security.. but the fact remains, there will not be a cap limit lifted for FICA taxes, it just won't pass Congress despite almost 30 years of talking about it.

 

[Moderate Right]

You have exposed yourself, for over a year, of not having the slightest clue what you are talking about, and not showing the courage to try and learn anything.

The courage to learn an alternative non mainstream economic THEORY that economists of all political sides find flawed? The funny thing is I HAVE learned MMT and I agree with the mainstream economists who find it flawed. It is your arrogant and biased partisan belief that anyone who finds MMT to be flawed must not understand it and needs to learn about it.

 

[Gimmesometruth]

Yep, and yet the Federal Govt. is in control of Medicaid.

No, it is not, and that is the point. The states are charged with distributing Medicaid, whether in the form of CHIP, or AHCCCS in AZ. The state GOP decided that they would not enroll new children into CHIP. I explain this to you over and over and nothing ever sticks.

Obviously another Federal program you don't understand.

I luv it, I correct u, u say I don'[t understand. so sad.

Your problem is you don't understand what the Federal Govt. pays and what happens when those payments stop. Your legislature did the right thing

Oh, OK, the state GOP did the right thing by not adding new low income kids to the CHIP, they were better off without health insurance. This is the most stupid thing you have ever posted, and that is a very tough thing to get below. Next up, they are better off dead.

Here you go again with the charts that are out of context.

What "charts"? From last week? WTF!?!

You have no idea what the state services are for the uninsured or even who makes up those uninsured.

There you go again, I supposedly don't know a thing.....that I posted, that I referred you to.....this is so frigging weird!

Stop making a fool of yourself. You buy what the left tells you and ignores the content. Apparently you want the state police to go door to door making sure that every citizen of the state signs up for the program they want but as usual personal responsibility doesn't exist in your world. You really are a waste of time

This is just bat chit crazy talk, good grief.

 

[Moderate Right]

Never said it. Just another filthy RW lie. The fertiliser that morons grow in.



I agree — it is unbelievable. It's yer newest stupid lie. You say there are a million examples, and yet fail to point to even one example.

How appallingly ignorant of you to believe that macroeconomic theories can ever be "proven" as "fact," and how laughably childish of you to continue to pretend that anyone ever said that they can. Aren't you embarrassed by such behaviour? Apparently not. What does that reveal about yer mentality?

>>In any event, I'm just glad you are admitting that MMT is nothing but an alternative economic theory about how things work, not proven facts about how things work.

More of yer auto-moron BS. Do you have these snippets saved somewhere and just C & P them?



Nah, you and those like you don't "think," you simply parrot RW lies.

>>who has zero leadership and executive experience

Ya mean other than two terms as POTUS?

>>I grew up a JFK Democrat

No need to insult the man like that, is there?

>>I am indeed a states rights advocate … The role of the Federal govt is for national defense, PERIOD.

And the nation founded by American patriots was well-defended against that attitude a little more than 150 years ago.

>>Social engineering is what liberals do and it is a failure, complete and utter

A loser's lament.



You feel that way because yer always wrong. Not our fault.

Thank you for admitting once again that MMT is not fact and is nothing but an unproven alternative economic theory and is only an alternaive explanation of how things work, not a factual explanation of how things work. Thank you for also admitting your arrogant liberal belief that you are ALWAYS right and that everyone else is always wrong.

 

[Moderate Right]

Social security is a government agency that holds government bonds, and those bonds will eventually be paid by the government. The government holds both the assets and the liabilities, so their position nets to zero. Money comes in, money goes out. It does not get saved, because the government is not able to save in their own currency.

SS assets don't belong to payees unless and until they start to collect.

Funny that you think that government cannot save but they can borrow.

 

[JohnfrmClevelan]

Do you even read what you wrote? US Government is borrowing from SSA to cover shortfalls. That by DEFINITION is covering a deficit and kicking that deficit down the road. At the end of the day that DEBT has to pay paid back to SSA so SSA can continue to payout retirement and disability payments.

SS assets do belong to the payees.. it's why it's called a TRUST. Maybe you should learn what the legal term means: A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary.

Let's see.... Grantor is the U.S. govt.; trustee is the U.S. govt.; property and assets still belong to the govt. until disbursed.

The problem with intragovernmental debt is that it's disguising real deficit costs per year. We have $5.5t in intragovernmental debt and We pay a higher % in interest on this amount of debt then we do public debt. We would be saving $46b a year on interest if we just issued public debt.

The govt. would be saving on interest??? In your scenario, they are paying interest to private bondholders. In my scenario, they are paying interest to themselves. And not only are they paying interest to themselves, that interest helps pay the government's future obligations to SS recipients. If we borrowed money the way you suggest, the government would be losing 100% of the interest they pay, not saving. Plus, those losses would compound year after year.

That expense is more costly then just issuing the debt to the public. SSA can maintain is legal obligation to buy US debt, but do so in the bid process which is done in the public realm and that borrowing officially noted in yearly deficits as a realized short fall instead of kick the can down the road short fall which would lead to benefit losses.

No, as I just explained, it is far cheaper to borrow from SS. No matter how much interest the govt. pays to the SS trust fund, 100% of it goes to paying benefits. If the govt. paid 50% interest annually on those SS bonds, they wouldn't lose a cent - every bit of it would go toward future SS payments.

 

[JohnfrmClevelan]

Funny that you think that government cannot save but they can borrow.

Funny that you think it's funny when you don't understand any of it.

 

[mmi]

intragovernmental debt … We pay a higher % in interest on this amount of debt then we do public debt.

Who collects this "higher % in interest"?

there will not be a cap limit lifted for FICA taxes, it just won't pass Congress

Fwiw, I agree, but it will likely continue to be raised, and the retirement age will likely continue to be increased.

Thank you for admitting once again that MMT is not fact

No one ever said that it is.

>>unproven alternative economic theory … not a factual explanation of how things work.

Yep, just like all macroeconomic theories. Tell us, which ones are "proven facts"?

>>Thank you for also admitting your arrogant liberal belief that you are ALWAYS right and that everyone else is always wrong.

I'm not always correct and never suggested that I am. Just today pinqy reminded me of my error regarding the change in how PT for economic reasons is collected. I have said that I am cautious in my judgements.

As I've said, you have the impression that I believe I'm always correct because you are always wrong. Yer part of a collection of RW DPers who share that quality. And in yer case, I feel that it's kind of sad. I don't see you as a lunatic or a moron. You just don't use the intelligence and sanity that you possess to reason effectively.

E.g., why do you insist that DP liberals have said "a million times" that MMT is a "proven fact"? Where does that get you? What does that accomplish? Why can't you behave like an adult? I often say that I've never really grown up, but I figure I can more or less overcome that limitation when a situation calls for it.

 

[Gaea]

Funny that you think that government cannot save but they can borrow.

I don't understand what you're trying to say here. Are you saying that you don't think it's a good idea to invest the money in the SS trust fund and generate returns on investment?

 

[austrianecon]

Let's see.... Grantor is the U.S. govt.; trustee is the U.S. govt.; property and assets still belong to the govt. until disbursed.

No, the US Government isn't the Grantor. Trustee isn't the US Government either.. rather the SST. None of the assets belong to the US Government as SSA has to seek general funding from the Federal Government to operate. If assets belonged to the Federal Government those assets in SST would be used to fund SSA operations per Trust operation cost.

The govt. would be saving on interest??? In your scenario, they are paying interest to private bondholders. In my scenario, they are paying interest to themselves. And not only are they paying interest to themselves, that interest helps pay the government's future obligations to SS recipients. If we borrowed money the way you suggest, the government would be losing 100% of the interest they pay, not saving. Plus, those losses would compound year after year.

Yes, they would be saving money. Bonds issued to trust funds pay on average a 1.5% plus current bond rates to Trust funds for borrowed money. On $5.4t in "intragovernmental" debt Uncle Sam pays $131b in interest on that. On public debt which is $14t, US Government pays $227b. So a Public debt which is roughly 3x higher, has a lower interest rate then Trust fund bonds.

And no, you have a massive misunderstanding who pays interest. It's Tax payers who pay interest. It's the FIRST thing the US Government is obligated to pay from Revenues as it's mandatory. What's left over goes to Government operation costs. Government isn't paying anything thus they aren't losing anything. Rather it would save the budget from higher interest rate payments.

No, as I just explained, it is far cheaper to borrow from SS. No matter how much interest the govt. pays to the SS trust fund, 100% of it goes to paying benefits. If the govt. paid 50% interest annually on those SS bonds, they wouldn't lose a cent - every bit of it would go toward future SS payments.

And I explain how VERY wrong you are..

 

[austrianecon]

Who collects this "higher % in interest"?

Nobody really. It's a loss to the Federal spending (Interest payment comes first then everything else). So what it really does is it harms the poor and middle class as that's real money being wasted. If you are an MMTer you should actually like my position because what you are doing is actually lowering Government borrowing costs and allowing larger deficit spending as by law SSA has to buy US bonds. All you are getting rid of is the extra bonus they receive by buying US bonds. So now they are competing with primary dealers and driving bond rates lower which in turn forces more "other investment" in the economy.

 

[JohnfrmClevelan]

Nobody really.

So, you're saying that the money just disappears.

I win the debate!!! Thanks for the assist, mmi.

It's a loss to the Federal spending (Interest payment comes first then everything else). So what it really does is it harms the poor and middle class as that's real money being wasted. If you are an MMTer you should actually like my position because what you are doing is actually lowering Government borrowing costs and allowing larger deficit spending as by law SSA has to buy US bonds. All you are getting rid of is the extra bonus they receive by buying US bonds. So now they are competing with primary dealers and driving bond rates lower which in turn forces more "other investment" in the economy.

...and empties the SS fund faster, so the government has to pay more later, while private parties earn interest instead.

 

[Conservative]

You quoted the entire post, but only addressed the last question?

The last question was the most important

 

[Conservative]

So, for example...

Do you think it's bad that health insurance companies are no longer allowed to deny insurance to people with pre-existing conditions?
Do you think it's bad that Obama cut taxes?
Do you think it's bad that Obama cut spending?

You remember that little story I wrote about the history of the "states rights" movement?

I'm beginning to think you're one of the Dixiecrats.

health insurance is a personal responsibility issue and I believe the problem of pre existing conditions could have been solved without ACA

Obama didn't cut taxes, he gave out one rebate

Obama hasn't cut spending, Congress cut his budget

I wasn't a Dixiecrat, I am from Seattle and grew up in Ohio. We have a Constitution, read it

 

[Conservative]

I believe he is asserting that GDP/capita has fallen during Obama's 7.5 years as president.

It's a nice story, but it's patently false.

US Real GDP Per Capita by Year

GDP hasn't fallen with govt. spending being a part of it but it is stagnant. The guy who liberals demonize and call the worst in history, Bush, grew GDP 4.5 trillion dollars. Obama is at 3.7 with the stimulus included. Real GDP vs. Actual. What is it about liberalism that doesn't understand that actual GDP is where tax revenue comes from?

 

[Conservative]

No, it is not, and that is the point. The states are charged with distributing Medicaid, whether in the form of CHIP, or AHCCCS in AZ. The state GOP decided that they would not enroll new children into CHIP. I explain this to you over and over and nothing ever sticks.I luv it, I correct u, u say I don'[t understand. so sad.Oh, OK, the state GOP did the right thing by not adding new low income kids to the CHIP, they were better off without health insurance. This is the most stupid thing you have ever posted, and that is a very tough thing to get below. Next up, they are better off dead.

What "charts"? From last week? WTF!?! There you go again, I supposedly don't know a thing.....that I posted, that I referred you to.....this is so frigging weird! This is just bat chit crazy talk, good grief.

You really don't understand Medicaid either do you? this is a joint State and Federal program operating under FEDERA JURISDICTION. Do you ever support personal responsibility on any issue? Do you realize that there are other options vs a federal program to take care of these kids. Why is it you always look to the Federal govt. for solutions to your local issues?

 

[Moderate Right]

Who collects this "higher % in interest"?



Fwiw, I agree, but it will likely continue to be raised, and the retirement age will likely continue to be increased.



No one ever said that it is.

>>unproven alternative economic theory … not a factual explanation of how things work.

Yep, just like all macroeconomic theories. Tell us, which ones are "proven facts"?

>>Thank you for also admitting your arrogant liberal belief that you are ALWAYS right and that everyone else is always wrong.

I'm not always correct and never suggested that I am. Just today pinqy reminded me of my error regarding the change in how PT for economic reasons is collected. I have said that I am cautious in my judgements.

As I've said, you have the impression that I believe I'm always correct because you are always wrong. Yer part of a collection of RW DPers who share that quality. And in yer case, I feel that it's kind of sad. I don't see you as a lunatic or a moron. You just don't use the intelligence and sanity that you possess to reason effectively.

E.g., why do you insist that DP liberals have said "a million times" that MMT is a "proven fact"? Where does that get you? What does that accomplish? Why can't you behave like an adult? I often say that I've never really grown up, but I figure I can more or less overcome that limitation when a situation calls for it.

To say that someone is ALWAYS wrong is the same as saying that you are always right. No one is ever always right and no one is ever always wrong. Your statement just goes to show how partisanly biased you are.

 

[Moderate Right]

I don't understand what you're trying to say here. Are you saying that you don't think it's a good idea to invest the money in the SS trust fund and generate returns on investment?

No. Of course I did not say that.

 

[JohnfrmClevelan]

.....

Central bankers eye public spending to plug $1 trillion investment gap

 

[Gimmesometruth]

Yep, and yet the Federal Govt. is in control of Medicaid. Obviously another Federal program you don't understand.

No, it is not, and that is the point. The states are charged with distributing Medicaid, whether in the form of CHIP, or AHCCCS in AZ. The state GOP decided that they would not enroll new children into CHIP. I explain this to you over and over and nothing ever sticks..

You really don't understand Medicaid either do you? this is a joint State and Federal program operating under FEDERA JURISDICTION.

No, the official power to make legal decisions and judgments.....happens at the state level.

Do you ever support personal responsibility on any issue?

Yes, I think it is the responsibility of everyone to care for the most vulnerable of our country, state, county, community without discrimination, which is why I think it was a dereliction of duty for the GOP to end enrollment of poor children into AZ CHIP.

Do you realize that there are other options vs a federal program to take care of these kids.

Sure, these kids could go out on the side of the highway...with a sign....and beg for assistance...in out of the way rural desert areas....for 5 years.

Why is it you always look to the Federal govt. for solutions to your local issues?

We already established this is a joint Fed/state program, you can't even remember this in the same paragraph.

I'm wondering, do you stand out in front of the health clinic you supposedly contribute to.....and yell at the patients there....to take personal responsibility for themselves?