U.S. Will Enter Recession If 'Fiscal Cliff' Not Avoided: CBO

http://www.huffingtonpost.com/201...f=business

The U.S. economy will sink into a deep recession and unemployment will jump back above 9 percent if Congress does not avoid a "fiscal cliff" waiting at the end of the year, according to a Congressional Budget Office study published Wednesday.

The report is the latest, possibly most dire, warning of the consequences of congressional inaction on more than $600 billion in spending cuts and tax increases currently mandated to take effect at the start of 2013. The question is whether it will spark more action, and just how helpful that action would be.

As hyperpartisan as Congress is right now, there's not a bloody chance a damned thing is going to happen before 2013 - and if anything happens then, I'd still be surprised.

Less unemployment now, but 90% debt to GDP ratio in 2022...

This isn't really news. Less pain now at the cost of more pain later, or more pain now with the benefit being less pain later.

Quote from Xygonn : Less unemployment now, but 90% debt to GDP ratio in 2022... This isn't really news. Less pain now at the cost of more pain later, or more pain now with the benefit being less pain later.

I read that and realized my plan of retiring in a warm foreign country needs to be accelerated!

Seriously, I love the "Decisions for 2013". So happy to see they didn't address the elephant in the room which is GTFO'ing of the Middle East.

http://www.reuters.com/article/20...5320110629

$370B savings a year sounds like a damn nice place to start! The truth of the matter is that if we weren't the worlds police force we would have had a huge surplus for many of the past years, or at the very least significantly reduced the deficit per year. It would be great to do but I'm sure now the excuse is we have to watch out for the big bad boogeyman called China.

Quote from LivninSC : I read that and realized my plan of retiring in a warm foreign country needs to be accelerated! Seriously, I love the "Decisions for 2013". So happy to see they didn't address the elephant in the room which is GTFO'ing of the Middle East. http://www.reuters.com/article/20...5320110629 $370B savings a year sounds like a damn nice place to start! The truth of the matter is that if we weren't the worlds police force we would have had a huge surplus for many of the past years, or at the very least significantly reduced the deficit per year. It would be great to do but I'm sure now the excuse is we have to watch out for the big bad boogeyman called China.

Defense, social security, medicare. This is where we pour buckets and buckets of money. In the case of SS and Medicare, I believe they are already paying out more than they are taking in so we are dipping into the trust funds from previous surplus years. Those years are long gone. The employment pool is shrinking and people are getting older.

We need to cut defense spending. If military forces are like robot basketball teams, we are paying for twenty foot tall robots where twelve foot robots would suffice to completely dominate the game.

We need to raise the retirement age for SS and Medicare benefits. It was set at the life expectancy when it was started, when almost everyone worked a manual labor job for a portion if not all of their life. The manual labor sob story is not only infrequent in the modern era, we know that most people had to deal with that reality when SS was implemented. Furthermore, most SS era people started working straight out of HS, so they were working for four more years even at the same age as a modern worker.

Other options I am less amenable to but that would help, uncap SS contributions, means test SS and Medicare. That way at least you won't be pissing on the legs of the "wealthy" and telling them it's raining as it comes to the programs being "insurance" rather than welfare.

There's a bunch of other cuts we can make in addition to this, but if there is not major reform in these programs, the debt fight is nearly hopeless.

Quote from Xygonn : We need to cut defense spending. If military forces are like robot basketball teams, we are paying for twenty foot tall robots where twelve foot robots would suffice to completely dominate the game.

Outside of extraneous wars, less can be cut than most people realize. For instance, our overseas deployments are a matter of hegemony to our advantage. IOW, that's more of what someone like yourself might call an ethical issue rather than straight budgetary one.

It also serves as an employer of last resort in this country so there are (socio)economic consequences, too. Those ditches aren't covering themselves back up.

Quote : We need to raise the retirement age for SS and Medicare benefits. It was set at the life expectancy when it was started, when almost everyone worked a manual labor job for a portion if not all of their life. The manual labor sob story is not only infrequent in the modern era, we know that most people had to deal with that reality when SS was implemented. Furthermore, most SS era people started working straight out of HS, so they were working for four more years even at the same age as a modern worker. Other options I am less amenable to but that would help, uncap SS contributions, means test SS and Medicare. That way at least you won't be pissing on the legs of the "wealthy" and telling them it's raining as it comes to the programs being "insurance" rather than welfare. There's a bunch of other cuts we can make in addition to this, but if there is not major reform in these programs, the debt fight is nearly hopeless.

Old people are a third rail best not pissed on or off this country.

Quote from agent00f : Outside of extraneous wars, less can be cut than most people realize. For instance, our overseas deployments are a matter of hegemony to our advantage. IOW, that's more of what someone like yourself might call an ethical issue rather than straight budgetary one. It also serves as an employer of last resort in this country so there are (socio)economic consequences, too. Those ditches aren't covering themselves back up. Old people are a third rail best not pissed on or off this country.

That is the political agreement.

Did you read the Esquire article I posted in another thread? I think it's pretty good.

http://www.esquire.com/features/y...ssion-0412

Quote from Xygonn : Defense, social security, medicare. This is where we pour buckets and buckets of money. In the case of SS and Medicare, I believe they are already paying out more than they are taking in so we are dipping into the trust funds from previous surplus years. Those years are long gone. The employment pool is shrinking and people are getting older. We need to cut defense spending. If military forces are like robot basketball teams, we are paying for twenty foot tall robots where twelve foot robots would suffice to completely dominate the game. We need to raise the retirement age for SS and Medicare benefits. It was set at the life expectancy when it was started, when almost everyone worked a manual labor job for a portion if not all of their life. The manual labor sob story is not only infrequent in the modern era, we know that most people had to deal with that reality when SS was implemented. Furthermore, most SS era people started working straight out of HS, so they were working for four more years even at the same age as a modern worker. Other options I am less amenable to but that would help, uncap SS contributions, means test SS and Medicare. That way at least you won't be pissing on the legs of the "wealthy" and telling them it's raining as it comes to the programs being "insurance" rather than welfare. There's a bunch of other cuts we can make in addition to this, but if there is not major reform in these programs, the debt fight is nearly hopeless.

I agree wholeheartedly with this, although I do admittedly like the cap on SS contributions

And to agent, ya, it's great to have 50,000 people stationed in Germany, 35,000 people in Japan, and 30,000 people in South Korea. If they ever attack us we'll be able to just lob out some bombs on to their cities from within their walls! Seriously though, in this day and age when all we have to do is push a button to wipe out an entire country/region is having so many people stationed overseas really important? That is, if we no longer want to be the worlds police force? Sure having them everywhere is great when we're the worlds police force but if we were like most countries and focus primarily on defending themselves and our borders than I don't see how it's all that necessary, especially when you're factoring in the cost.

http://www.vetfriends.com/images/...202011.jpg

Maybe it's just me but if there were truly a WWIII between the super powers of this world, given the armaments they have I don't see there being much of a world left afterwards and they know this so I don't really see any huge conflicts like we've had in the past, where having 10,000s of troops deployed around the world would be beneficial, happening again. One can hope!

Quote from Xygonn : That is the political agreement. Did you read the Esquire article I posted in another thread? I think it's pretty good. http://www.esquire.com/features/y...ssion-0412

I skimmed over it the first time. It's pretty well written and I don't disagree with the general premise even though it's overemphasized. However IMO it misses out on some of the fundamental trends of why this came to be:

The frontier is gone to be forever replaced by globalization. All the worthwhile hard assets that can be owned have owners and the new competition are from those who are just as smart and will work harder for less pay. Add to this our own self-destructive forces of greed, and what's left is those who got theirs and those who are never going to get much.

Cool so we should vote for Romney and Ryan right...

Ryan blames Obama for scheduled defense cuts

Quote from noobhammer : As hyperpartisan as Congress is right now, there's not a bloody chance a damned thing is going to happen before 2013 - and if anything happens then, I'd still be surprised.

Yeah, despite whatever rhetoric is said on either side, that's a fair and accurate assessment.

Quote from LivninSC : And to agent, ya, it's great to have 50,000 people stationed in Germany, 35,000 people in Japan, and 30,000 people in South Korea. If they ever attack us we'll be able to just lob out some bombs on to their cities from within their walls! Seriously though, in this day and age when all we have to do is push a button to wipe out an entire country/region is having so many people stationed overseas really important? That is, if we no longer want to be the worlds police force? Sure having them everywhere is great when we're the worlds police force but if we were like most countries and focus primarily on defending themselves and our borders than I don't see how it's all that necessary, especially when you're factoring in the cost.

The only issue I have with this is that:

A) The local countries will bellyache as millions of dollars leave the neighboring local economies.
B) Europe has largely cut its militaries to minimal levels to increase spending on social programs and the welfare state because they know America will back them up. Basically, Germany, France.... it's doubtful that they have the ability to mount any sort of significant resistance against a genuine attack from China or Russia.


And yeah, that's it.

Quote from Xygonn : Less unemployment now, but 90% debt to GDP ratio in 2022... This isn't really news. Less pain now at the cost of more pain later, or more pain now with the benefit being less pain later.

GDP = Consumption + Investment + Government Spending

Let's fix each value at 10. So 10 + 10 + 10 = a GDP of 30. Now let's say that debt = 30. Debt to GDP ratio = 30:30, 100%

Now let's cut spending. Let's say that 100% of the revenue obtained by spending cuts goes into debt payments. But let's also remember that these cuts will have an effect on the private economy (the "pain" you spoke of):

9 + 9 + 5 = a GDP of 23. We took the 5 we got from cutting government spending and paid off some of the debt. However, we have to pay interest on that debt, so let's say that the debt is now 26. 26/23 = 113%

Hey wait! How did that happen! The problem actually got worse!

Quote from gunnerusa : GDP = Consumption + Investment + Government Spending Let's fix each value at 10. So 10 + 10 + 10 = a GDP of 30. Now let's say that debt = 30. Debt to GDP ratio = 30:30, 100% Now let's cut spending. Let's say that 100% of the revenue obtained by spending cuts goes into debt payments. But let's also remember that these cuts will have an effect on the private economy (the "pain" you spoke of): 9 + 9 + 5 = a GDP of 23. We took the 5 we got from cutting government spending and paid off some of the debt. However, we have to pay interest on that debt, so let's say that the debt is now 26. 26/23 = 113% Hey wait! How did that happen! The problem actually got worse!

RTFC. I'm not talking about a one year change. I'm using the CBO's numbers, not your ultra-simplistic version of things.