The Fiscal Cliff -- 48 days and Counting

[GAMike]

I guess you should run for office in LA then Billy because the change you seek will not happen unless someone steps out of the shadows.....I have to many skeletons in the closet. May as well make all that time researching pay off:beer:.

This is what many of those in power want. They believe the system in the USA is fundamentally "unfair" by favoring certain groups at the expense of others. To make it "fair" their sole goal is Social Justice via income redistribution until financial collapse makes us all equal by restarting at zero.

They believe the only way "Forward" is to reset the system by collapsing it.

It is called "fundamental change" by going "Forward".

They have clearly stated this as their Goal over and over. Many choose not to hear it.

I can assure you their "greater good" is not your greater good nor that of most Americans.

 

[Ozark Marauder]

So what exactly is this looming menace, and why is it so dangerous? Stripped of its rhetorically charged language the fiscal cliff is simply a legal trigger that will trim the deficit in 2013 by automatically implementing spending cuts and tax increases. In other words, the government will spend less, and more of what it does spend will be paid for with taxes rather than debt. Isn't this exactly what both parties, and the public, more or less want? The fiscal cliff means that the federal budget deficit will be immediately cut in half, shrinking to approximately $641 billion in 2013 from the approximately $1.1 trillion in 2012. What is so terrible about that? I would argue that there is a greater danger in avoiding the cliff than driving over it.

It is amazing that members of Congress can keep a straight face as they claim to want to address our long-term deficit problem while simultaneously working to avoid any substantive action. No doubt an agreement will be reached that will replace the looming fiscal cliff with another one farther down the road (which they can easily dismantle before we actually reach the precipice). Will the rating agencies buy this bill of goods a second time? If we lack the political courage to go over this fiscal cliff, why should anyone think we will be able to stomach going over the next one? Especially since each time we delay going over the cliff, we simply increase its future size, making it that much harder to actually go over it.

The truth is that regardless of what you call it, going over the fiscal cliff is not the problem, it is part of the solution. Our leaders should construct a cliff that is actually large enough to restore fiscal balance before a real disaster occurs. That disaster will take the form of a dollar and/or sovereign debt crisis that will make this fiscal cliff look like an ant hill.

IBTL

OZ

 

[Haggis]

I am planning for the worst and stocking up on supplies. Barbwire is strung, foxholes are dug with connecting trenches and sandbags are full and in place. Underground bunker should be finished by mid December and ready to move into when/if the ***** hits the fan.

 

[Bluerauder]

So what exactly is this looming menace, and why is it so dangerous? Stripped of its rhetorically charged language the fiscal cliff is simply a legal trigger that will trim the deficit in 2013 by automatically implementing spending cuts and tax increases. In other words, the government will spend less, and more of what it does spend will be paid for with taxes rather than debt. Isn't this exactly what both parties, and the public, more or less want?

In one sense, you are absolutely correct. Something has to be done to reduce spending, cut the deficit, and increase revenue. The automatic triggers will certainly do that. However, the triggers in place don't necessarily do that in the best way so as to minimize the impacts. What we don't need at this point is more unemployment and negative growth.

The so-called "Entitlements" are protected within the current trigger mechanisms. The right way to go about this is to look at raising revenue smartly and targeting wasteful and inefficient spending in Government rather than "across the board" 10-15% cuts only in the so-called Discretionary accounts.

If you take a salary hit at work, you don't reduce your spending equally across all of your obligations. Or you probably shouldn't do that. Food and housing/mortgage/rent should take the smallest hit. You can't cut gas, electric, and water much, if anything, at all -- unless you implement some in home conservation methods. Eating out at restaurants and entertainment could probably take a big cut. Maybe you REALLY don't need HD TV, 20 premium channels and NFL weekend ticket on cable. Maybe you could get a little more wear out of some clothes rather than getting the newest set of jeans, suit or sneakers.

I am just saying that there are things that the Government spends money on that could be cut with very little impact on "real" readiness and operations.

Nothing should be Off Limits including "Entitlements". Reform in Taxes and Entitlements are both needed to fix the problem permanently. Doing so will take at least another year or even 2. The "Safety Net" has turned into a "Gravy Train" for some and a "Way of Life" for others. It needs a hard look.

We can't keep spending like a drunken sailor (sorry guys) nor raising taxes until the system collapses under its own weight. Once we are ALL equal in poverty, ain't anybody gonna be happy 'cause the "Gravy Train" will have wrecked.

This can be a civil discussion. So no need to say IBTL.

 

[PonyUP]

In one sense, you are absolutely correct. Something has to be done to reduce spending, cut the deficit, and increase revenue. The automatic triggers will certainly do that. However, the triggers in place don't necessarily do that in the best way so as to minimize the impacts. What we don't need at this point is more unemployment and negative growth.

The so-called "Entitlements" are protected within the current trigger mechanisms. The right way to go about this is to look at raising revenue smartly and targeting wasteful and inefficient spending in Government rather than "across the board" 10-15% cuts only in the so-called Discretionary accounts.

If you take a salary hit at work, you don't reduce your spending equally across all of your obligations. Or you probably shouldn't do that. Food and housing/mortgage/rent should take the smallest hit. You can't cut gas, electric, and water much, if anything, at all -- unless you implement some in home conservation methods. Eating out at restaurants and entertainment could probably take a big cut. Maybe you REALLY don't need HD TV, 20 premium channels and NFL weekend ticket on cable. Maybe you could get a little more wear out of some clothes rather than getting the newest set of jeans, suit or sneakers.

I am just saying that there are things that the Government spends money on that could be cut with very little impact on "real" readiness and operations.

Nothing should be Off Limits including "Entitlements". Reform in Taxes and Entitlements are both needed to fix the problem permanently. Doing so will take at least another year or even 2. The "Safety Net" has turned into a "Gravy Train" for some and a "Way of Life" for others. It needs a hard look.

We can't keep spending like a drunken sailor (sorry guys) nor raising taxes until the system collapses under its own weight. Once we are ALL equal in poverty, ain't anybody gonna be happy 'cause the "Gravy Train" will have wrecked.

This can be a civil discussion. So no need to say IBTL.

I certainly agree there are smarter ways to manage the debt than going over the cliff.
History has shown though, at least recently, both parties refuse to work together. The perception that I have is both parties only want to cut what's important to their opposition so that they can protect their own interests.
With the amount of debt we are talking about the compromise should be

1) take up Boehner on his offer to close loop holes as a revenue stream
2) the President needs to show he can compromise to, instead of raising taxes on individuals making more than $250k, change it to $1 million
3) we were close on a social security fix a few years ago, raise the retirement age to at least secure it for an extended period of time, this worked before. People are living longer, working longer, and with Baby Boomers entering retirement, it needs to be addresses
4) the same process implemented in social security should be do e to Medicare as well
5) programs like the NEA should be eliminated
6) Farm subsidies should be look at to determine how much they are actually needed
7) closing loopholes in tax deduction should also be done with corporate taxes, however we should also lower their tax rate in an effort to get more business domestically and keep corporate profits here rather than see them go abroad
8) military budgets need to be cut. Following these two wars the need for boots on the ground in large numbers is diminished. We don't need to be stacked for another World War, our enemy now carries suitcases and vest bombs

Just my two cents


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[Cheeseheadbob]

I would say your response is worth at least 10 cents! Well thought out and concise...:up:

I certainly agree there are smarter ways to manage the debt than going over the cliff.
History has shown though, at least recently, both parties refuse to work together. The perception that I have is both parties only want to cut what's important to their opposition so that they can protect their own interests.
With the amount of debt we are talking about the compromise should be

1) take up Boehner on his offer to close loop holes as a revenue stream
2) the President needs to show he can compromise to, instead of raising taxes on individuals making more than $250k, change it to $1 million
3) we were close on a social security fix a few years ago, raise the retirement age to at least secure it for an extended period of time, this worked before. People are living longer, working longer, and with Baby Boomers entering retirement, it needs to be addresses
4) the same process implemented in social security should be do e to Medicare as well
5) programs like the NEA should be eliminated
6) Farm subsidies should be look at to determine how much they are actually needed
7) closing loopholes in tax deduction should also be done with corporate taxes, however we should also lower their tax rate in an effort to get more business domestically and keep corporate profits here rather than see them go abroad
8) military budgets need to be cut. Following these two wars the need for boots on the ground in large numbers is diminished. We don't need to be stacked for another World War, our enemy now carries suitcases and vest bombs

Just my two cents


The Ice Bucket Approves of this message

 

[Ozark Marauder]

The right way to go about this is to look at raising revenue smartly and targeting wasteful and inefficient spending in Government rather than "across the board" 10-15% cuts only in the so-called Discretionary accounts.

I am just saying that there are things that the Government spends money on that could be cut with very little impact on "real" readiness and operations.

Nothing should be Off Limits including "Entitlements". Reform in Taxes and Entitlements are both needed to fix the problem permanently. Doing so will take at least another year or even 2. The "Safety Net" has turned into a "Gravy Train" for some and a "Way of Life" for others. It needs a hard look.

.

If there is no pain, there is no gain. Across the board cuts are the only way to go. They can find 10 -15 % of as you say, "wasteful and inefficient spending" in each budget across the board. What exactly do you mean by "raising revenue smartly"?

If you recall, the cliff was created by a deal last year when Congress couldn't find ways to trim the deficit in exchange for raising the debt ceiling. When they failed to reach an agreement, Congress knew they had to raise the debt ceiling anyway. The resulting Budget Control Act of 2011, signed in August of that year, offered the pretense that they were dealing with our long-term fiscal crisis and not simply raising the debt ceiling with no strings attached. This was done not only to appease some House Republicans, who had threatened to vote against a debt ceiling increase, but to satisfy the bond rating agencies that had threatened a down-grade if Congress failed to act.

Now the focus turns to how Congress will dismantle the structure it created just 16 months ago. There can be little doubt that they will, as economists are assuring politicians that driving over the fiscal cliff will immediately bring on a recession. The expiration of the Bush era tax cuts for all taxpayers will cost Americans an estimated $423 billion in 2013 alone. Hundreds of billions of across the board spending cuts, including the military, have been delineated. No politician would allow that to happen.

Many currently believe last year's S&P downgrade resulted from the same congressional dysfunction that resulted in the fiscal cliff agreement. The truth is that the downgrade would probably have been much greater, and more rating agencies would have likely joined S&P in taking action, had it not been for the fiscal cliff agreement. If further downgrades fail to be issued when the lame duck Congress inevitably comes up with another can kicking deal, then the agencies themselves could lose any remaining credibility. In my opinion, the only explanation for inaction by the rating agencies would be for fear of regulatory retaliation by a vindictive U.S government.

I do not think it is a coincidence that while the banks are suffering a regulatory backlash as a result of their perceived culpability for the mortgage crisis, the credit rating agencies have been relatively untouched. But the credit agencies played a key role in catalyzing the mortgage crisis by giving questionable ratings to the mortgage backed securities.

My guess is the government simply does not want to open up that can of worms as similar mistakes are being made with respect to the agencies' ratings of government debt.

It does need "a hard look", but more. In my opinion, it is not by doing another can kick down the road because we all know who is at the end of that road....our children and grandchildren...we really can't wait a year or two.

OZ

 

[sailsmen]

An annual deficit in excess of 3% of GDP cannot be sustained. This is what the rating agencies look at.
The 60 year 1948-2008 annual average deficit was 1.7% of GDP. The average of the past 3 years is 9.9% of GDP.
The 60 year 1948-2008 annual average Federal spending as a % of GDP 19.9%. The average of the past 3 years is 24.7%.
The Fed Base Line Budget has increased 24% as a % of GDP in the past 3 years.
The State I live in after increasing it's Budget 69% in 9 years with no population growth has just increased the current Budget 1% and Healthcare by 7.6%. All we see in the news is how the LA Gov has cut Healthcare spoending when in fact it was increased by 7.6%!
A reduction in an increase is a CUT!

Gov't taking wealth and redistributing it destroys wealth. History has example after example of it.

 

[prchrman]

my company went through a horrific down turn and made needed adjustments, layed off 5% of the work force, cut the remaining people's salary 5%, reduced inventory since we were not selling anyway, asked for and got 10% reduction in all facilities budgets. they did give us an extra 2 weeks off during the 2 year period that this took place and they also gave us back the 5% and another 5% when we got on good financial footing. you see this is the kind of change you need to right the ship. in america as of now the revenue has decreased and is way down falling way short of spending in the good ole US of A. look at any chart you want on rev vs spend and you see when revenue went down we doubled down on spending which does not make for a good financially responsible budget. we need to make some decisions that will get us back on good financial footing but the dems will not cut entitlements because that is a voting block and pubs will not cut defense or raise taxes (obtw the US revenue was the highest ever in 2007 which was under the bush tax cuts). bush got us into wars and that really took a toll on national debt and then the bubble burst and that had a lot to do with dems pushing their everybody needs to own their own home crap. so you see they all got dirt on their hands and they all do not want to do what it takes because they would rather protect their position or their party than protect our american way of life. there are no more statesmen, only polictical hacks who are bent on hanging on to what they got. so you see one day we will fall back in our own poop and wonder why we stink. my great granddaddy had a saying for life, save 10%, give 10% to God and if you cann't live off the rest you need to change your lifestyle. america needs to change her lifestyle.

 

[Bluerauder]

If there is no pain, there is no gain. Across the board cuts are the only way to go. They can find 10 -15 % of as you say, "wasteful and inefficient spending" in each budget across the board. What exactly do you mean by "raising revenue smartly"?

Again, I'll agree with most of what you have said. However, I still think that "Entitlement" spending should NOT get a pass in this drill. Certainly there is AT LEAST that much waste, fraud and inefficiency in many of those programs. They should kick in their 10-15% too.

As to raising revenue smartly ... I mean closing loopholes and some tax shelters. They can even adjust the rates to an equitable level. Personally, I am not opposed to paying more taxes. What I AM opposed to is taking my money and pissing it away on programs that have very little oversight, are littered with fraud, have piss poor management, and which tacitly encourage irresponsibility and government dependency. When able-bodied and qualified people (as cited in the post above) prefer government feebies and can do better "On the Dole" than in the workforce, there is a big problem that only grows worse every year.

Can the military and other government agencies and departments find savings. Absolutely. However, the proposed impact to the US Army is another force structure cut of about 100K-120K from its currently level of about 550,000. That size of cut will put us about at the size of the US Army in 1939-1940. We all know how that turned out. There was another massive drawdown in forces at the end of World War II and we initially went into Korea untrained, untested and ill-equipped. Task Force Smith paid the price for that mistake. Other services US Navy, USMC, US Air Force and the Guard and Reserve will have similar cuts.

How much Defense is enough?? I'll let the SecDef, Chairman JCS and the service chiefs figure that one out. But I am not comfortable with 1940 force levels especially in today's volatile world. Brad/Pony-Up seems to think that the current threat is made up of a couple guys with IEDs or bomb vests or unorganized insurgents. Obviously, the days of the huge wars are over. Haven't we been sucked down that path before? Read history. Take a look at the lessons learned -- or maybe not learned at all.

With the planned reductions, the USA will have the 6th largest army in the world. That means 5 others are larger and not all of them are friendly.

1. China 1.6 Million
2. India 1.1 Million
3. North Korea 950K
4. South Korea 560K
5. Pakistan 550K
6. USA 420K (now about 550K)
7. Vietnam 412K
8. Turkey 402K
9. Iraq 375K
10. Russia 325K
11. Syria 321K

 

[Mr. Man]

Charlie one thing that I think people overlook is that for every soldier the USA has you can probably double or triple that number when it comes to kill ratios, maybe more considering the technology weapons the US can deploy.

 

[Bluerauder]

Charlie one thing that I think people overlook is that for every soldier the USA has you can probably double or triple that number when it comes to kill ratios, maybe more considering the technology weapons the US can deploy.

That ^^^^ sounds like "bean counter" speak to me. I have more than 40 years experience in that business, so I don't overlook much. It doesn't work that way at the squad and platoon level. Yes, we want to maintain our overmatch capability. If a company can take out a battalion "under some circumstances", then that is in our favor. If the enemy is in prepared defenses, that 2-3 fold advantage is erased pretty quickly.

The technology gap between our enemies is decreasing everyday. The M1 tank is 30 years old. The M2/M3 Bradley is 25-30 years old. The UH-1 dates to the 1960s. Same for the OH-58. The UH-60 Blackhawk is about 25 years old. How old are the B-52, B-1, F-14, F-16, F-18. The USMC still has some M-60 tanks that date to the 1960s. The USA hasn't bought much new stuff in any significant quantities since the early 1990s (except maybe MRAPs and UAVs). We may still be the best equipped and manned force; but the advantage slips away every day that we don't invest in the future. Defense cuts under "Sequestration" won't help improve that situation.

 

[Mr. Man]

...but think about all those exterestrial weapons we are reverse engineering that your clearance level doesn't make you privy to.

 

[kernie]

1. China 1.6 Million
2. India 1.1 Million
3. North Korea 950K
4. South Korea 560K
5. Pakistan 550K
6. USA 420K (now about 550K)
7. Vietnam 412K
8. Turkey 402K
9. Iraq 375K
10. Russia 325K
11. Syria 321K[/QUOTE]


Rank Country Spending ($ Bn.)[3] % of GDP World share (%) Spending ($ Bn. PPP)[4]
— World total 1,735 2.5 100 1562.3
1 United States 711.0 4.7 41 711
2 China 143.0 2.0 8.2 228
3 Russia 71.9 3.9 4.1 93.7
4 United Kingdom 62.7 2.6 3.6 57.5
5 France 62.5 2.3 3.6 50.1
6 Japan 59.3 1.0 3.4 44.7
7 Saudi Arabia 48.2 8.7 2.8 58.8
8 India 46.8 2.5 2.7 112
9 Germany 46.7 1.3 2.7 40.4
10 Brazil 35.4 1.5 2.0 33.8
11 Italy 34.5 1.6 2.0 28.5
12 South Korea 30.8 2.7 1.8 42.1
13 Australia 26.7 1.8 1.5 16.6
14 Canada 24.7 1.4 1.4 19.9
15 Turkey 17.9 2.3 1.0 25.2


http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

 

[PonyUP]

That ^^^^ sounds like "bean counter" speak to me. I have more than 40 years experience in that business, so I don't overlook much. It doesn't work that way at the squad and platoon level. Yes, we want to maintain our overmatch capability. If a company can take out a battalion "under some circumstances", then that is in our favor. If the enemy is in prepared defenses, that 2-3 fold advantage is erased pretty quickly.

The technology gap between our enemies is decreasing everyday. The M1 tank is 30 years old. The M2/M3 Bradley is 25-30 years old. The UH-1 dates to the 1960s. Same for the OH-58. The UH-60 Blackhawk is about 25 years old. How old are the B-52, B-1, F-14, F-16, F-18. The USMC still has some M-60 tanks that date to the 1960s. The USA hasn't bought much new stuff in any significant quantities since the early 1990s (except maybe MRAPs and UAVs). We may still be the best equipped and manned force; but the advantage slips away every day that we don't invest in the future. Defense cuts under "Sequestration" won't help improve that situation.

What does get overlooked on Military spending, is planes. The government just completed the super hornet run, I mean I was at the end of the line with the last two being built, and they were already starting the F35 run. From an exec at Lockheed Martin

"The Air Force does not need or want these planes, but it got contracted, so we are building it"

We need to maintain a strong military, but we do have room for cuts including personnel.
Yes there are armies larger than ours, China by their size alone is understandable, but if we have a conflict with China, it will involve bombs
India is larger because of constant threat from Pakistan, again understandable. India is an ally, and invasion would trigger response from us
Except China would be forced to back Pakistan because of their treaties.

While I think personnel reduction could make sense, what really makes sense is closing some foreign bases.

But I just don't feel we are going to have as many boots on the ground because our enemies hide in the shadows. Do we see any country starting a conflict with us, or the US invading another country that wouldn't involve a search for terrorists.
Maybe the answer is not force depletion but change of assignment
Our borders, protecting us not from immigrants, but the flow of drugs, domestic militias, helping keep peace at home during disasters


The Ice Bucket Approves of this message

 

[SC Cheesehead]

1. China 1.6 Million
2. India 1.1 Million
3. North Korea 950K
4. South Korea 560K
5. Pakistan 550K
6. USA 420K (now about 550K)
7. Vietnam 412K
8. Turkey 402K
9. Iraq 375K
10. Russia 325K
11. Syria 321K

Rank Country Spending ($ Bn.)[3] % of GDP World share (%) Spending ($ Bn. PPP)[4]
— World total 1,735 2.5 100 1562.3
1 United States 711.0 4.7 41 711
2 China 143.0 2.0 8.2 228
3 Russia 71.9 3.9 4.1 93.7
4 United Kingdom 62.7 2.6 3.6 57.5
5 France 62.5 2.3 3.6 50.1
6 Japan 59.3 1.0 3.4 44.7
7 Saudi Arabia 48.2 8.7 2.8 58.8
8 India 46.8 2.5 2.7 112
9 Germany 46.7 1.3 2.7 40.4
10 Brazil 35.4 1.5 2.0 33.8
11 Italy 34.5 1.6 2.0 28.5
12 South Korea 30.8 2.7 1.8 42.1
13 Australia 26.7 1.8 1.5 16.6
14 Canada 24.7 1.4 1.4 19.9
15 Turkey 17.9 2.3 1.0 25.2


http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures[/QUOTE]


Good points.

While we still have military superiority I think we need to invade Canada....

Lebensraum.

 

[PonyUP]

I do want to say, it is so refreshing to have a good debate with open minds on this site, where everyone's opinion is respected


The Ice Bucket Approves of this message

 

[kernie]

Good points.

While we still have military superiority I think we need to invade Canada....

Lebensraum.

[/QUOTE]


You just want a 2nd blue.

 

[SC Cheesehead]

Good points.

While we still have military superiority I think we need to invade Canada....

Lebensraum.

You just want a 2nd blue.

[/QUOTE]

To the victor go the spoils!

 

[Bluerauder]

... and they were already starting the F35 run. From an exec at Lockheed Martin. "The Air Force does not need or want these planes, but it got contracted, so we are building it"

The program is still in development and if they are building anything, it is prototypes for testing. The program has slipped to about 2018 for full rate production. There are some performance issues and cost issues. The cost of one F-35 in 2010 was about $112 Million per copy. That has increased and has everyone concerned.

The F-35 is NOT a US Air Force program. It is a DoD/Joint/Allied program funded principally by the US but with funding coming from other partner countries. Other countries interested in the F-35 include the UK, Italy, Netherlands, Australia, Canada, Norway, Denmark, Turkey, Israel, and Japan. The F-35 is intended in 3 variants (F-35A Conventional, F-35B STOL, and F-35C Carrier based.) The intent is/was to replace service specific planes with a common airframe. Theoretically, this should reduce costs for development and procurement of service unique planes. Until they iron out the performance issues and get the software on track and the costs under control, it probably is not getting much support from the USAF, USMC, or Navy.

We need to maintain a strong military, but we do have room for cuts including personnel. I will agree with this. The question is how much? I personally think that 480,000 US Army active is the lower limit.500-520K would be better. That's still a pretty hefty chunk of cut and the equivalent of 2-3 Divisions (or 6-9 Brigades if you want to look at it that way. You lose the people, their equipment, their support, their housing, their maintenance, etc.

While I think personnel reduction could make sense, what really makes sense is closing some foreign bases.

This is being done constantly and has been on-going for 20 years. US Forces in Germany went from 199,000 in the late 80's to a force of under 40,000 now. All of those bases have been closed. Others have been scaled back. Not much in Korea anymore either. Iraq and Afghanistan will be gone by the end of next year. Stateside bases have been closed and consolidated under several rounds of BRAC. Army and Air Force installations are combining in several locations. Much of this savings has already been taken. Maybe only a trickle left. Cut a division in New York and close Fort Drum. Close a division in Hawaii and close Fort Shafter/Schoeffield Barracks.

But I just don't feel we are going to have as many boots on the ground because our enemies hide in the shadows. Believe it or not, this says that you need MORE not less boots on the ground. It takes manpower to search and destroy.

Do we see any country starting a conflict with us, or the US invading another country that wouldn't involve a search for terrorists. Have we ever? Was anybody surprised when Iraq invaded Kuwait in 1990?? Bosnia?? Vietnam?? Korea?? 9/11?? Iraq?? Afghanistan??

Maybe the answer is not force depletion but change of assignment
Our borders, protecting us not from immigrants, but the flow of drugs, domestic militias, helping keep peace at home during disasters. US forces are limited in the duties that it can perform domestically under the Posse Comitatus Act. They can't do police work unless martial law has been declared and the Act is suspended by Congress for the emergency.


The Ice Bucket Approves of this message

My comments in RED ^^^^