Reid Outlines What Wont be in a Budget Deal

[Mycroft]

The old adages are "where there is smoke there is fire" and "if somebody says something often enough long enough people begin to believe it is true". The "Tea Party" success is that they have stimulated general acceptance in the moderate populace that debt growth is a serious concern for our future - they have made the sale. But beyond that they are too combative to get concurrence for anything other than holding the spending line steady for a couple years while (hopefully) increased revenue from slowly growing GDP erodes the deficit.

The problem is...and has been recognized by the Tea Party...that government is the problem...not the solution. Less government involvement in a recovery is good...more government involvement is bad, as we've seen during the last 5 years or so. The Republicans understand this...the Democrats don't.

 

[head of joaquin]

Then, perhaps, Reid should have just said that...instead of paying lip service to spending cuts when what he really wants is to increase taxes AND spending.

We ARE talking about Reid's statement, after all.

I agree. He and the Democrats should never accept any of the stupid memes of the GOP, and should constantly attack their intellectual bankruptcy.

 

[Mycroft]

I agree. He and the Democrats should never accept any of the stupid memes of the GOP, and should constantly attack their intellectual bankruptcy.

Yeah...to bad he's not honest enough to tell the people what he really wants. Do you think...if he did...that people would tell him to take a hike?

I do.

 

[head of joaquin]

Yeah...to bad he's not honest enough to tell the people what he really wants. Do you think...if he did...that people would tell him to take a hike?

I do.

Since Americans overwhelmingly reject the idiotic policies of conservatives and overwhelmingly support a progressive agenda on most major issues, the answer is clearly no. But shouting over the weirdness of the rightwing noise machine is difficult, so sometimes leaders take the easy road and agree with its lunacy while working to overcome it.

The next election will certainly resolve this question to a degree. How are those House Tea partiers doing in the polls nowadays? BWHHAHAHHAAHHHAH!

 

[WhyNotWhyNot]

The problem is...and has been recognized by the Tea Party...that government is the problem...not the solution. Less government involvement in a recovery is good...more government involvement is bad, as we've seen during the last 5 years or so. The Republicans understand this...the Democrats don't.

Hmmm - sounds a little like having recurring acute pancreatitis. When you first get pancreatitis the standard treatment is to kill the pain with delodid (hospital version of heroin) and wait for the pancreas to restore normal function so that the pain subsides. For some patients the condition recurs - after a while the patient is dependent on the delodid and every few hours the pain recurs so that patient takes the delodid. The pancreatitis passes but the recurrent pain doesn't, so the doctors keep prescribing (and the patient stays dependent upon) the delodid. The "cure" becomes the "problem". Its called narcotic gut syndrom and the only way out of it is to suffer withdrawal.

I think we would all agree that the doctor should manage the withdrawal so that the patient remains functional. The problem that we face as a nation is that one role that the federal government has played to a greater and greater degree in the last few years is welfare disguised as employment. Essentially it has created something like the WPA of the 1930's without announcing it officially. Cutting budgets does mean staff reduction. By analogy to the pancreatitis / narcotic gut syndrom patient withdrawal management, we need to be smart about how we reduce this dependence on government. An example, I have posted previously goes like this. I live in the Denver area where we have a thing called the National Renewable Resources Lab. It could be cut severely or even closed with minimal impact because the Denver area economy is able to absorb the people but to the same thing at Los Alamos National Laboratory would be a disaster because it is most of the economy in Northern New Mexico.

I don't see any evidence of "smart" in DC at this time - in either party.

 

[Vern]

well the good news is Jonny is actually posting facts (mostly). Lets work with the facts he has posted.

Jonny, if you believe that taxes at 18% of GDP is 'normal' then you can not look at 2009, 10,11,12 and 13 and say "its only a spending problem". So by you own logic, every republican that said "its only a spending problem" was a liar.

You seem to understand that the Great Bush Recession affected revenue but why are you unable to recognize that it also affected spending?

You post the % of GDP revenue that shows it slowly increasing, why don't you post the % of GDP spending to show its declining?

And how asinine is it that you say "2.5 trillion is enough revenue" and then admit that revenues are under what you think is acceptable, 18 % of GDP?

and fyi, 2.5 trillion is less than we collected in 2007 and 2008 so its not a 'record'. And as you seem to understand in other parts of your post, you don't measure revenue on a nominal basis. You measure it as a % of GDP.

Now why jonny avoid my solid factual rebuttal of his silly post. Oh, because I've schooled him on the facts before

Or you could tell him yourself. Not sure why youre so set on being uncivil. We spend a trillion more than we take. Thats the definition of a spending problem.

As he has done in the past, he points out the decline in revenue but clings to the lying republican narrative that its only a spending problem.

 

[Mycroft]

Hmmm - sounds a little like having recurring acute pancreatitis. When you first get pancreatitis the standard treatment is to kill the pain with delodid (hospital version of heroin) and wait for the pancreas to restore normal function so that the pain subsides. For some patients the condition recurs - after a while the patient is dependent on the delodid and every few hours the pain recurs so that patient takes the delodid. The pancreatitis passes but the recurrent pain doesn't, so the doctors keep prescribing (and the patient stays dependent upon) the delodid. The "cure" becomes the "problem". Its called narcotic gut syndrom and the only way out of it is to suffer withdrawal.

I think we would all agree that the doctor should manage the withdrawal so that the patient remains functional. The problem that we face as a nation is that one role that the federal government has played to a greater and greater degree in the last few years is welfare disguised as employment. Essentially it has created something like the WPA of the 1930's without announcing it officially. Cutting budgets does mean staff reduction. By analogy to the pancreatitis / narcotic gut syndrom patient withdrawal management, we need to be smart about how we reduce this dependence on government. An example, I have posted previously goes like this. I live in the Denver area where we have a thing called the National Renewable Resources Lab. It could be cut severely or even closed with minimal impact because the Denver area economy is able to absorb the people but to the same thing at Los Alamos National Laboratory would be a disaster because it is most of the economy in Northern New Mexico.

I don't see any evidence of "smart" in DC at this time - in either party.

Your medical example does resemble the Democrat's actions...not so much the Republicans. I've never seen them advocate a cold turkey approach to spending cuts. Heck, even George Bush proposed a gradual reduction in the country's dependency on Social Security...though it was a bit before the optimal time to propose such a thing.

 

[Mycroft]

Since Americans overwhelmingly reject the idiotic policies of conservatives and overwhelmingly support a progressive agenda on most major issues, the answer is clearly no. But shouting over the weirdness of the rightwing noise machine is difficult, so sometimes leaders take the easy road and agree with its lunacy while working to overcome it.

The next election will certainly resolve this question to a degree. How are those House Tea partiers doing in the polls nowadays? BWHHAHAHHAAHHHAH!

WhyNotWhyNot presented an excellent medical analogy. In respect to that analogy, your comment would fit. The patient is screaming for the drug to avoid the pain. The doctor is trying to tell the patient that he needs to slowly reduce the drug to eliminate the dependency. And you...are saying the doctor is full of crap.

Why do you want to extend the dependency?

 

[WhyNotWhyNot]

Your medical example does resemble the Democrat's actions...not so much the Republicans. I've never seen them advocate a cold turkey approach to spending cuts. Heck, even George Bush proposed a gradual reduction in the country's dependency on Social Security...though it was a bit before the optimal time to propose such a thing.

The Ryan Budget was essentially a cold turkey treatment. I would suggest a truly believable, reliable (CBO certified) deficit reduction of $100B to $150B per year so that balance is acheived in 4 or 5 years then continuation of that policy until a $300B per year surplus is achieved (like the 1997, 1998 times) and maintained. That way we have no additional debt 10 years from now and the debt as function of GDP is returned to a less dangerous number. Hold it at that for 50 years and the debt will evaporate. After all it took 50 years to build it up. Lets start with agreeing on this framework. Then we can go about the cussing and discussing of tactical implementation.

 

[head of joaquin]

WhyNotWhyNot presented an excellent medical analogy. In respect to that analogy, your comment would fit. The patient is screaming for the drug to avoid the pain. The doctor is trying to tell the patient that he needs to slowly reduce the drug to eliminate the dependency. And you...are saying the doctor is full of crap.

Why do you want to extend the dependency?

So we're supposed to worry about the pseudo-problems and false premises cooked up by the rightwing noise machine from pieces of Palin's speeches?

No thanks. What in Sam Hill are you trying to solve with this bizarre crisis rhetoric? Dependency on what? Modern society and its benefits?

 

[jaeger19]

Do you think...if the government didn't take money out of the economy in taxes so they can put it back into the economy as social spending is better than just leaving that money in the economy? If you do, why not just have the government take ALL the money out of the economy so they can put it back into the economy? I mean, besides the loss of personal decision making, why wouldn't that be better?

btw, I don't think the federal government should be extending any oil or ethanol subsidies either.

Gee.. if my business is in trouble do you think the answer should be that I should send all the employees home because its going to save the company money?

Or MAYBE.. it would be a better idea to look at what contributes more to my business and reduce spending on non essentials.. maybe it might be smart to look for MORE revenue and raise prices where I need to.. and MAYBE it might be smart to reinvest some of my money into infrastructure that can further grow my company...

THATS the kind of thoughtful moves that our government should make.. not starting with going after social programs that are helping prop up the economy right now in order to 1. score political points with a portion of the electorate that cries about the welfare state.. while they are on medicare.. an 2. To shift focus off of special interest subsidies, and on to folks that don't have as much political clout.

 

[Dittohead not!]

Gee.. if my business is in trouble do you think the answer should be that I should send all the employees home because its going to save the company money?

Or MAYBE.. it would be a better idea to look at what contributes more to my business and reduce spending on non essentials.. maybe it might be smart to look for MORE revenue and raise prices where I need to.. and MAYBE it might be smart to reinvest some of my money into infrastructure that can further grow my company...

THATS the kind of thoughtful moves that our government should make.. not starting with going after social programs that are helping prop up the economy right now in order to 1. score political points with a portion of the electorate that cries about the welfare state.. while they are on medicare.. an 2. To shift focus off of special interest subsidies, and on to folks that don't have as much political clout.

Or, you could hire two managers for your business, one who wanted to send everyone home, and the other who wanted to increase the numbers of employers.

Then, they could argue and call each other names, play games, rant about how everything is the other guy's fault.

You'd be running the business the same way government is being run.

 

[jaeger19]

Or, you could hire two managers for your business, one who wanted to send everyone home, and the other who wanted to increase the numbers of employers.

Then, they could argue and call each other names, play games, rant about how everything is the other guy's fault.

You'd be running the business the same way government is being run.

Yep..and then they both meet up after work, have a laugh and beer as they go deposit both of their checks.

 

[Dittohead not!]

Yep..and then they both meet up after work, have a laugh and beer as they go deposit both of their checks.

That's how Congress used to work.....

 

[WhyNotWhyNot]

Or, you could hire two managers for your business, one who wanted to send everyone home, and the other who wanted to increase the numbers of employers.

Then, they could argue and call each other names, play games, rant about how everything is the other guy's fault.

You'd be running the business the same way government is being run.

Yup, And the default action would be no action so that the business failed.

Unfortunately this example hits rather close to home. Some friends and I started a custom equipment manufacturing company, it did pretty well and we really wanted a generational change after 10 years so we sold the company. I was the President. I made the mistake of agreeing to a full time employment contract - but the new ownership took over operations control and I became an "out to pasture" business development VP. It took them 2 years to get into very serious financial trouble so they called me to a "what should we do" meeting with imminent default on a large bank loan" Their intent was to lay-off 50% of the company instantly. It took me nearly two days to convince them that that was one sure path to death because that would totally end production and hence any further income. Every time I thought they understood they would come back to "but we have to lay off half the staff". I managed a coup and got control of the operations, figured out how to get along with the bank's workout manager, figured out how to keep production from declining, operated out of the cash flow without any cash flow management tool, mostly paid off the old supplier accounts, and ultimately executed an asset sale such that the the business continued and retained 25 of our people to go forward - and we sold a $3.5M project just as the sale closed as well. It took 9 months and this time I did leave. Tenacity and strict prioritization to keep the income up does work. You must cut but you must do it very thoughtfully.

P.S. I must say that I really appreciate what Dave Bing is going through in Detroit.

 

[Mycroft]

So we're supposed to worry about the pseudo-problems and false premises cooked up by the rightwing noise machine from pieces of Palin's speeches?

No thanks. What in Sam Hill are you trying to solve with this bizarre crisis rhetoric? Dependency on what? Modern society and its benefits?

sigh...

While a lot of citizens don't want to give up their entitlements, a whole bunch recognize that, unless something is done, spending on those entitlements will only increase until the costs are untenable.

Except you, of course.

 

[Mycroft]

Gee.. if my business is in trouble do you think the answer should be that I should send all the employees home because its going to save the company money?

Or MAYBE.. it would be a better idea to look at what contributes more to my business and reduce spending on non essentials.. maybe it might be smart to look for MORE revenue and raise prices where I need to.. and MAYBE it might be smart to reinvest some of my money into infrastructure that can further grow my company...

THATS the kind of thoughtful moves that our government should make.. not starting with going after social programs that are helping prop up the economy right now in order to 1. score political points with a portion of the electorate that cries about the welfare state.. while they are on medicare.. an 2. To shift focus off of special interest subsidies, and on to folks that don't have as much political clout.

Your business analogy doesn't apply to government. Sorry.

 

[jaeger19]

sigh...

While a lot of citizens don't want to give up their entitlements, a whole bunch recognize that, unless something is done, spending on those entitlements will only increase until the costs are untenable.

Except you, of course.

Actually not true.. first, eventually, the baby boomers do die off..

Secondly, a lot of seniors paid a lot in taxes and ran surpluses for years and years in what are now considered "entitlements"...

that's the fallacy of the entitlement spending bull...

The money was put in there.. turned into bonds.. and then spent... but the fact remains that those entitlements were still paid for.. that's why medicare and social security are solvent for the next twenty years or so with no changes and decades with minor changes.

This whole entitlement fiasco is to shift blame away from those that ran the bills up in the first place.

 

[jaeger19]

Your business analogy doesn't apply to government. Sorry.

It most certainly does.. government is an economic entity.

 

[Mycroft]

The Ryan Budget was essentially a cold turkey treatment. I would suggest a truly believable, reliable (CBO certified) deficit reduction of $100B to $150B per year so that balance is acheived in 4 or 5 years then continuation of that policy until a $300B per year surplus is achieved (like the 1997, 1998 times) and maintained. That way we have no additional debt 10 years from now and the debt as function of GDP is returned to a less dangerous number. Hold it at that for 50 years and the debt will evaporate. After all it took 50 years to build it up. Lets start with agreeing on this framework. Then we can go about the cussing and discussing of tactical implementation.

It's not cold turkey at all.

Here...this is the portion that deals with "Repairing the Social Safety Net": The Path to Prosperity | House Committee on the Budget I don't see anything cold turkey in there...just smart, reasonable reductions. The rest of the Ryan Budget is similar.

 

[Mycroft]

It most certainly does.. government is an economic entity.

Sorry...no. Government is a political entity. It doesn't operate under the same rules as a business.

 

[Perotista]

Sorry...no. Government is a political entity. It doesn't operate under the same rules as a business.

Government can print all the money its wants, businesses can't. Not the same

 

[Mycroft]

Actually not true.. first, eventually, the baby boomers do die off..

Secondly, a lot of seniors paid a lot in taxes and ran surpluses for years and years in what are now considered "entitlements"...

that's the fallacy of the entitlement spending bull...

The money was put in there.. turned into bonds.. and then spent... but the fact remains that those entitlements were still paid for.. that's why medicare and social security are solvent for the next twenty years or so with no changes and decades with minor changes.

This whole entitlement fiasco is to shift blame away from those that ran the bills up in the first place.

Ummm...

Perhaps you should read what the Social Security Administration Trustees had to say about it. Here is their conclusion:

Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible. Taking action sooner rather than later will leave more options and more time available to phase in changes so that the public has adequate time to prepare.

Trustees Report Summary

It has taken us decades to get into the situation we find ourselves...it will take decades to get out of it. Thinking about the next twenty years only is shortsighted. The government needs a complete reworking of the program if it expects to avoid disastrous problems. Republicans are working at it...Democrats are not.

 

[Mycroft]

Government can print all the money its wants, businesses can't. Not the same

Exactly.

 

[NeoVsMatrix]

Yup, And the default action would be no action so that the business failed.

Unfortunately this example hits rather close to home. Some friends and I started a custom equipment manufacturing company, it did pretty well and we really wanted a generational change after 10 years so we sold the company. I was the President. I made the mistake of agreeing to a full time employment contract - but the new ownership took over operations control and I became an "out to pasture" business development VP. It took them 2 years to get into very serious financial trouble so they called me to a "what should we do" meeting with imminent default on a large bank loan" Their intent was to lay-off 50% of the company instantly. It took me nearly two days to convince them that that was one sure path to death because that would totally end production and hence any further income. Every time I thought they understood they would come back to "but we have to lay off half the staff". I managed a coup and got control of the operations, figured out how to get along with the bank's workout manager, figured out how to keep production from declining, operated out of the cash flow without any cash flow management tool, mostly paid off the old supplier accounts, and ultimately executed an asset sale such that the the business continued and retained 25 of our people to go forward - and we sold a $3.5M project just as the sale closed as well. It took 9 months and this time I did leave. Tenacity and strict prioritization to keep the income up does work. You must cut but you must do it very thoughtfully.

P.S. I must say that I really appreciate what Dave Bing is going through in Detroit.

Just that the president can't - and usually doesn't want to - sell "his company", not for profit, and not for a generation change. Neither does he brag about his intent to embrace a generation change, followed by how he was needed to stay on board to save the company from that next generation. just out of curiosity.. after you were called into the meeting to save the company, was your first course of action to re-invest your initial sales profits back into that company still dear to your heart to allow for some breathing while you managed to rescue them ?

Edit: i want to add: i commend you for at least stating that it was a mistake for you to stay with the company after the sell-out.