Just the Facts: S&P's $2 Trillion Mistake

Re:Just the Facts: S&P's $2 Trillion Mistake by mscarborough on Sunday August 07, 2011 @09:26PM (#2858370)

> It isn't our current debts that have people concerned. It's the combination of current debts and unsustainable future obligations, which are so large that they in fact can't be paid down by just raising taxes.

Who is proposing that we only raise taxes, without cuts? The entire Democratic 'compromise' is effectively all cuts.

> The "evil Republicans" are the only ones taking actions that may mean that Social Security still exists for anyone in 2050.

The "evil Republicans" hyperbole might be helpful in dismissing the fact that both parties are horribly complicit in the problem we have now. Neither one of them have done anything meaningful to cut budgets for any of their favorite projects. And that hyperbole ignores the fact that there is a significant percentage of Americans that do not identify with either party [1], and as such are not blaming the 'evil Republicans'.

1 - http://www.rasmussenreports.com/public_content/politics/mood...

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Re:Just the Facts: S&P's $2 Trillion Mistake by yummyfajitas on Monday August 08, 2011 @12:36AM (#2858804)

As a result of the spending cuts, the discretionary budget will be 0.6% lower in 2012 than it was in 2011 and 18% higher in 2021 than it is in 2012.

http://www.economist.com/blogs/democracyinamerica/2011/08/de...

Those democrats, how could they agree to such harsh cuts!

(The media is describing it as a "cut" because the growth rate of government spending has been cut.)

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Re:Just the Facts: S&P's $2 Trillion Mistake by onemoreact on Monday August 08, 2011 @09:43AM (#2860028)

Comparing fixed dollar amounts when the GDP is changing is silly.

http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&#...

PS: If growth avergages less than 1.6% for the next 9 years we are going to have an issue. But, a few of those 5+% years and things start to look vary diffrent. Except for SS which recives little benifit from GDP growth only population growth.

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Re:Just the Facts: S&P's $2 Trillion Mistake by yummyfajitas on Monday August 08, 2011 @11:02AM (#2860266)

Why would the cost of the government grow with gdp? If people are richer, it costs more to build roads and aircraft carriers?

Growing with population or inflation makes sense, at least for costs which scale with population. Growing with gdp is nonsensical.

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Re:Just the Facts: S&P's $2 Trillion Mistake by onemoreact on Monday August 08, 2011 @12:04PM (#2860516)

Wealth only indirectly influences GDP. If you had 1billion dollars’ worth of Sony stock and don't buy, sell, or receive dividends then the impact on US GDP of you owning that stock vs. someone in Japan is zero.

When you break it down short term GDP growth is dominated by the size of the working population and changes in the value of your currency. Over the long term you need to consider technology and infrastructure improvements but wealthy society’s both expect more from the government and can afford to have their government provide more so that's not really an issue. Thus linking government spending to GDP is fairly healthy activity.

PS: I would happily to drastically cut a lot of government spending, but I also realize doing so quickly would be vary damaging to our economy. I think a flat 25% federal tax including social security that starts at 70 and universal healthcare and excluding any and all tax breaks would be close to optimal, but good luck getting that passed.

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