Some problems with decreased government spending

[Reveille]

I think we all agree that government spending has gotten out of hand. In this thread I want to encourage talks not only about the problems but possible solutions our nations leaders can persue to improve the situation!

 

[Moot]

How can you have capitalism without spending?

 

[specklebang]

I think we all agree that government spending has gotten out of hand. In this thread I want to encourage talks not only about the problems but possible solutions our nations leaders can persue to improve the situation!

Out of hand is subjective. We'll know when it's out of hand when merchants no longer accept dollars. Until then, why worry? Unless you have a Libertarian overthrow of the US, we'll just keep on keeping on. It's politically implausible to decrease spending and miraculous if we don't get too carried away.

 

[Reveille]

Government spending of military operations in S. Korea for one, I have not been able to find the actual amount U.S. government has been spending annual to maintain its current military posture in S. Korea, but i know 4,645 command sponsored military families authorized to be stationed in S Korea, now in a month the lowest ranking person would receive $ 2946.89 in housing benefits alone that equals $13,684,170 a month spent on housing assuming not one of the families the military was no higher than a private, that's $164,210,040 a year spent into the Korean economy instead of the U.S. economy. If we use that number as an average to substitute for the fact that higher ranks obviously earn more, and there is no historic data on the average allowance over the last ten year and that other areas may have lower allowances than Seoul, that means over the last ten years we have spent 16,421,004,000 into the S Korean on housing as opposed to the 1,470,336,000,000 we have spent on both Iraq and Afghanistan wars combined, that is 10% spent on housing alone in a country that has been in stalemate for over 65 years than the nation has spent to completely support two active wars. Yet down sizing and cutbacks happen in the war zones where American military members are at risk everyday.

And I feel the need that this money goes into the pockets of Korean landlords instead circulation through the U.S. economy which makes the pain is felt twice.

Simple solution would be to continue to support our troops in combat at take a good long look into how many U.S. military units are really needed to stand by and two countries throw sucker punches and insults at each other.

 

[Reveille]

How can you have capitalism without spending?

I am not against government spending, but we are spending foolishly, making cuts where they hurt not help, and the whole inability to agree on HOW to spend the government money has created increased our debt while ruining the nations global credit rating

 

[Rainman05]

How can you have capitalism without spending?

Well you can't have capitalism without spending money. The question is, who does the spending. Pro-tip: it shouldn't the government because when the govt spends money it doesn't have, it buries the people in debt... and then the people won't have money.

 

[Reveille]

Out of hand is subjective. We'll know when it's out of hand when merchants no longer accept dollars. Until then, why worry? Unless you have a Libertarian overthrow of the US.

What makes you say unless you have Libertarian over throw of the US? Do you think that Libertarians would make the US dollar useless with merchants? and do you think that would be US or foreign merchants?

 

[Moot]

Well you can't have capitalism without spending money. The question is, who does the spending. Pro-tip: it shouldn't the government because when the govt spends money it doesn't have, it buries the people in debt... and then the people won't have money.

Everybody does the spending. Borrowing and spending are the pillars of today's debt driven economy. So if businesses can't get loans to expand...and states, cities and towns can't borrow for infrastructure.... and people can't get mortgage loans then the economy slows down. The government has to spend to keep the economy going during down turns and pay off debt during expansion. The idea is to keep the economy expanding.

 

[Moot]

I am not against government spending, but we are spending foolishly, making cuts where they hurt not help, and the whole inability to agree on HOW to spend the government money has created increased our debt while ruining the nations global credit rating

Most of those problems were created by congress. The only way to resolve that is to vote out the "no compromise" politicians and replace them with more sensible people.

 

[sookster]

I hate to break it to you guys, but increased government spending is a requirement to satisfy the demand of money itself. Inflation is a requirement (albeit too much or too little has consequences) for a growing economy. Otherwise all the money will run out. This is why when you take a look at the federal budget, for the most part, every single department gets a percentage increase in funds. Those funds in theory are for the common good and is infused into the economy. Some of the money gets retracted out due to interest by the banks, which inevitably gets transferred to The Fed through FDIC insurance as well as loans (for investing). The Fed then gives the government loans in exchange for treasury bonds. The treasury bonds are assets that can be used to accrue more wealth, while the loan from The Fed (deficit spending) is spent through the economy through government programs. The Treasury prints money to satisfy the interest of the loans from The Fed. This does not contribute to inflation because it is sent to the banking sector. Plus, banks through the fractional reserve banking system contribute more to inflation than the government printing its interest.

There is more to it, but this is a rough picture on the flow of money and how our economy works. If we were to pay back the entire US debt, there would be no money in the economy; the government debt is roughly the entire money supply. And as there is economic growth, there needs to be inflation. It is true that hyperinflation is definitely a possible outcome, but that is why there are interest rates. As more and more money is being transferred from the private sector to the banking sector, more money is in essence being destroyed from the money supply because the money is no more in the circulation of buying goods and services. This decreases the amount of money available in the money supply, which eventually results in prices to deflate. Of course, if there is no money to spend, people hold onto their money and only buy what is necessary. In order for business owners to receive the same amount of profit or more the next quarter, they have to raise prices which I guess is a form of inflation by non-consumption. The raise in prices force customers to hold onto their money, which results in a feedback process.

Two important things to note:
1. Controlled inflation is necessary
2. The value of the dollar is not only dependent upon the size of the money supply, but how fast money circulates through the economy.

By circulating money through the economy more rapidly, there is more available money to buy goods and services, which results in prices to not inflate as rapidly thus increasing the value of the dollar. This is why banks are coming out and promoting new faster ways to deposit money...to increase the velocity by which money is circulated. And not to allude too much to another issue, but by looking at a law of physics on flow systems, if you increase the flow velocity of other parts of the system, you make the entire system flow faster. This would help with the innate inflation of our economy; it would benefit everyone. This is why the president focused on the things that he did. His strategy was to look at the debt of the middle class. First was healthcare. I am not saying what he did was good or bad, but he did make an attempt. And right before Syria he was focusing on the cost of education. This would increase the flow of middle class families which would facilitate the flow of the entire economy.

We need government deficit spending. Without it our system would collapse. There just simply would not be enough money to go around. The dollar would inflate, people would hold onto their money, prices would continue to rise, and people would continue to hold onto their money. Eventually all confidence in the dollar is lost; the economy would collapse.

 

[Rainman05]

Everybody does the spending. Borrowing and spending are the pillars of today's debt driven economy. So if businesses can't get loans to expand...and states, cities and towns can't borrow for infrastructure.... and people can't get mortgage loans then the economy slows down. The government has to spend to keep the economy going during down turns and pay off debt during expansion. The idea is to keep the economy expanding.

Look. businesses who take out credits and loans do so because they think their business will kick off. the price of the loan will be paid by the investment. So it's like you loan me 1000$ which I use to start a business that makes me 10k, and I easily can pay you back. But that's because I spend time and energy focusing on the best way to use that money to make profit.

When is the last time you saw government efficiency when dealing with the budget or giving contracts? There are infinite case examples of frivolous spending and overspending at ungodly levels. hell, there was that scandal in Vegas where the institution that deals with watching over such spending abuses went on a spending spree of its own.

If the government would mind the money it has more efficiently, sure, let it spend it. let it spend it wisely because you know it will get the best deals. They'd give good contracts to good companies for road repair that will the best for you, the taxpayer. Instead, they give hundred of thousands of dollars, even millions, to some dip**** road repair company because the people who are running the show are connected. And they fix the road just enough so that the next year, another round of repairs are needed, and another government contract is awarded to the same people who did such a poor job the first time.

This is why the budget needs to be restricted and the federal budget needs to be cut down. Everything that can be decentralized should be decentralized. And in todays' world ,with the internet, an efficient government who cares about the taxpayer dime would be interested in putting up several websites showing how the money trail for each govt contract awarded for all issues.

 

[Moot]

Look. businesses who take out credits and loans do so because they think their business will kick off. the price of the loan will be paid by the investment. So it's like you loan me 1000$ which I use to start a business that makes me 10k, and I easily can pay you back. But that's because I spend time and energy focusing on the best way to use that money to make profit.

Thats all fine and dandy during a strong economy but what happens when the econmy slows and you lose business and can't make your loan payments or can't get a loan at all?

When is the last time you saw government efficiency when dealing with the budget or giving contracts? There are infinite case examples of frivolous spending and overspending at ungodly levels. hell, there was that scandal in Vegas where the institution that deals with watching over such spending abuses went on a spending spree of its own.

Well, I don't mean to brag or nothing but I think my state of Utah has handled it's budget fairly well and we didn't suffer nearly as much as states like Nevada and California did. Utah wasn't shy about taking their share of the stimulus money either. I see road work and new paved roads everywhere.

If the government would mind the money it has more efficiently, sure, let it spend it. let it spend it wisely because you know it will get the best deals. They'd give good contracts to good companies for road repair that will the best for you, the taxpayer. Instead, they give hundred of thousands of dollars, even millions, to some dip**** road repair company because the people who are running the show are connected. And they fix the road just enough so that the next year, another round of repairs are needed, and another government contract is awarded to the same people who did such a poor job the first time.

A good portion of federal spending is on military and defense spending. A lot of states with military bases, DoD civilian employees and private defense companies with government contracts depend on that government spending. Ironically, those are the same people screaming the loudest to cut government spending. lol

This is why the budget needs to be restricted and the federal budget needs to be cut down. Everything that can be decentralized should be decentralized. And in todays' world ,with the internet, an efficient government who cares about the taxpayer dime would be interested in putting up several websites showing how the money trail for each govt contract awarded for all issues.

I'm all for government transparency.

 

[Vern]

I think we all agree that government spending has gotten out of hand. In this thread I want to encourage talks not only about the problems but possible solutions our nations leaders can persue to improve the situation!

I don't agree. I could post the actual budget data that shows that President Obama has gotten spending under control but better proof is that the "conservative entertainment complex" isn't instructing cons to scream about spending any more. Who paid attention to the 2014 budget process? The lack of screaming from the right speaks volumes.

 

[Reveille]

Strangly I agree with you both on most everything, lets take the DoD/military base areas. Go back to my cost comparison of military spending in Korea, this time Ill use Hawaii (since the money will be effecting US economy) average rate is about 2000- 2900 USD per month, this goes into the local economy which is good, but it also raises the cost of living there, bringing the average rent to...you guessed it 2000-2900 a month. This great if you're a landlord, but now the other jobs forced to compete with those wages, and most big (non-government affiliated) companies move to other areas, and average local folks can no longer afford to live there. However that money is now running through the US economy and people are buying cars, houses, boats, paying for home improvements or property management/maintenance on the rental properties. So it feeds the larger economy but kills the local (hence why they complain most) it creates an imbalanced local economy.

on a side note California has the most military bases in the country, not that I am blaming the military for the poor state of California's economy, they have huge taxes and licensing fees, and extra restricted on products that can be sold as well as emissions control, they enforce crazy laws with crazier fines, yet the roads are crap, non- tourist or military neighborhoods are completely run down,the state is broke the police force is lacking at best where it is needed the most and the air quality is the worst I've seen with in the United States.

So why is that? It seems plenty of money coming in, but where is it going? Is it because they have such a high gap in social classes?

 

[Reveille]

I don't agree. I could post the actual budget data that shows that President Obama has gotten spending under control but better proof is that the "conservative entertainment complex" isn't instructing cons to scream about spending any more. Who paid attention to the 2014 budget process? The lack of screaming from the right speaks volumes.

The great thing about data is it is so easy to make it speak to you're beliefs, as a matter of fact I am particularly fond of the use of the phrase "under control", forest fires can be "under control" yet still be burning hundreds of acres of woodlands and wild life.

No one here has mentioned or blamed either side right or left but I dont even know what a "conservative entertainment complex" is, sounds like a place you would go if you only wanted to be entertained...just a little.

If you have data, please share, but the military is still cutting training, and educational benefits yet spends millions researching new boots, a matching uniform for all services and genders, they are cutting back on the times the grocery store is open (which by the way is a profit based corporation) yet you can still go to the base exchange a purchase a Prada hand bag. None of these things have anything to do with Pres Obama, or his policies, the only blame I recall even being mentioned was congress, who would rather take a two week break rather than pass a national budget or decide if in fact we may go to war for the third time in under 15 years. Am I really the only one who thinks these priorities are a little out of sync?

thank you for your " I love Obama moment" I am glad you have faith in our Commander in Chief,he definitely fell in on a "poop samitch" when he first took office, but he is one man in massive dysfunctional system.

 

[Fenton]

How can you have capitalism without spending?

Ignorant statement....


So what Greece did was " Capitalism " ??

Borrowing on future revenues and finanacing away it's future to perpetuate a corrupt public sector ?


When will you folks understand the difference between real wealth, and Government spending ?

Because they're not synonymous.

 

[Fenton]

I don't agree. I could post the actual budget data that shows that President Obama has gotten spending under control
but better proof is that the "conservative entertainment complex" isn't instructing cons to scream about spending any more. Who paid attention to the 2014 budget process? The lack of screaming from the right speaks volumes.

Post away VERN, please.

As you try to equate " deficit as a percenatage of GDP" to a decreasing debt and reduced spending.

I mean the unfortunate poster youv'e targeted with your partisan drool will of-course have to ignore the 7 TRILLION that's been added to our debt since 2008, but yes, " Obama has reduced spending..."

Go ahead. Expose your distinct style of apology, dishonest justification and Bush blame.

Or you could start your own thread that will absolutely wind up in the trash heap section of the Forum, as all of your threads do.

Partisan politics...

 

[Vern]

The great thing about data is it is so easy to make it speak to you're beliefs, as a matter of fact I am particularly fond of the use of the phrase "under control", forest fires can be "under control" yet still be burning hundreds of acres of woodlands and wild life. .

really, data is easy to make it speak to your beliefs? can you provide an example of that. I find cons tend to try to 'limit' the actual data in their posts and 'editorials'. And your example was about a phrase not data.

No one here has mentioned or blamed either side right or left but I dont even know what a "conservative entertainment complex" is, sounds like a place you would go if you only wanted to be entertained...just a little. .

You started the thread with

"I think we all agree that government spending has gotten out of hand."

"out of hand" is quite similar to the conservative narrative of "out of control" And I don't agree because President Obama has gotten spending under control.

For his last budget Bush asked for 3.1 trillion. Revenues were expected to be 2.8 trillion. This process started before they realized the recession started. And before Bush let lehman fail. So with Q4 GDP 2008 at -8.9%, 700,000 jobs lost a month, the TARP and GSE bailout, the CBO revised the budget estimates on Jan 7, 2009. Here's that estimate along with actuals.
_____________1/7/09____actuals
Total Revenues__ 2,357__ 2,105
Total Outlays__ _ 3,543__ _ 3,518

mmmmm, spending came in around the estimate but revenue collapsed another 250 billion from the estimate. So spending went up 400 billion but revenues collapsed 700 billion. If I had to pick just one thing that was "out of hand " it would be revenue collapse. The truly strange thing was I never heard anything about revenue collapse. I only heard about "out of control spending". And now four years later, you think we all agree "spending is out of hand" mmmm, lets look at President Obama's first 4 budgets.

Fiscal year_______2010____2011____2012___2013(est)
Total Revenues___ 2,162___ 2,302___ 2449___2,708
Total Outlays____ 3,456___ 3,598___ 3,538___3,553

mmmm, I'm not seeing "out of hand" spending. As a % of GDP its flat and then declining. kind of seems to me to be the opposite of "out of hand"

 

[Vern]

Post away VERN, please.
As you try to equate " deficit as a percenatage of GDP" to a decreasing debt and reduced spending.
I mean the unfortunate poster youv'e targeted with your partisan drool will of-course have to ignore the 7 TRILLION that's been added to our debt since 2008, but yes, " Obama has reduced spending..."

Reveille, just so you know, Fenton is not trying to make the data speak to his beliefs, he's attacking the way govt spending is measured. Its measured as a % of GDP. For no other reason than it hurts his narrative, he’s concluded it has to be measured on a nominal basis.

Now let's look closely at his statement

"As you try to equate " deficit as a percenatage of GDP" to a decreasing debt and reduced spending."

Fenton, like a lot of cons has used the words “debt” and “deficit” interchangeably so there are literally 4 different variations to his statement and none of them make any sense. I’ve clearly equated “spending declining as a % of GDP” to a decreasing deficit. When you have to rant to make a point, “clarity” seems to be the first victim.

 

[specklebang]

What makes you say unless you have Libertarian over throw of the US? Do you think that Libertarians would make the US dollar useless with merchants? and do you think that would be US or foreign merchants?

If memory serves, the Libertarian position would bring back a metal based currency and that currency would be very valuable indeed. Whether there would be enough currency to allow 7 billion people to function is another topic. Really, I was just making the point that despite the terrors of government spending (and the creation of dollars to do this far beyond actual tax revenues) the currency is still desirable.

If 10 years ago, you told me we would have 17T in debt I would have been shocked and disbelieving. But we do - and it works. I have my theories as to why but I'll try to stay on topic