Will the US default?

[Super Dude]

So I can't post the article here because I'm on my phone, but NYT just published an update about a new Gang of Six plan. From the sound of it, Obama's given in to Republican demands: deep cuts, some tax breaks eliminated, but lower tax rates all around. So basically nothing changes and we're gonna have to deal with this again in another two years.

[Dublagent66]

What good are more tax payers if we keep on lowering the rates?  It means the same amount of revenue spread across more people.

It's better than having less tax payers with lower rates.  That's where we are now.  You're never gonna be able to raise the rates enough to make up the difference.  The tax base is the key because it not only increases revenue, but stimulates economic growth as well.  Just a tax increase alone will not accomplish that.

[Super Dude]

Why can't we have both?  And also, no one said (the article included) who those tax breaks would be eliminated for.

[Scheavo]

stuff

Did you mean this as in we don't pay for our military involvements or that it doesn't factor in?  Because I thought $700 billion a year was a lot.

As in Bush didn't pay for his wars, he put them on the nations credit card. Now, the bill's due and everyone's blaming Obama and social welfare.

[Riceball]

However, I would like to know as to why a dramatic reduce of all foreign interaction would have a negative effect on us, and what the negative effect would be.

I, for one, believe that we'd be better off with a self-contained as possible economy, as little reliance on others for resources, and by not meddling with other's affairs/investing our interests in foreign nations, and instead, making the absolute best with the abundent natural resources, people included, that are within our own borders.

*handball receive from Super Dude*

In a not-military-geopolitical sense, removing oneself from the international economy would a) be pretty much impossible and b) turn said country into something akin to North Korea (NK), who decided that was the path they would take following the Korean war.

In fact, thats a pretty good point of comparison: NK closed up shop; decided to go it alone and attempt to do everything itself, while South Korea (SK) opened up its economy, floated its exchange rate et al. Other than that, and the outcomes of the war (which as far as I know left SK pretty devastated - which would have made it harder to achieve what its achieved relative to NK), I wouldn't bet on who has better living standards, better freedoms and a greater ability to provide for oneself and family.

[Sigz]

But let's even assume a nice slope as assumed by the Laffer curve. Isn't the angle of the slope the single most important thing? That is, if you could raise gov't revenue by 10% with marginal loss in economic activity, wouldn't that be acceptable if you can be assured that you're raising the country out of debt?

And all of that is only even relevant if you assume the current tax rate is past the maximum; There's really no way to accurately determine where on the Laffer curve we even are, so it's pretty much a moot point.

[MasterShakezula]

However, I would like to know as to why a dramatic reduce of all foreign interaction would have a negative effect on us, and what the negative effect would be.

I, for one, believe that we'd be better off with a self-contained as possible economy, as little reliance on others for resources, and by not meddling with other's affairs/investing our interests in foreign nations, and instead, making the absolute best with the abundent natural resources, people included, that are within our own borders.

*handball receive from Super Dude*

In a not-military-geopolitical sense, removing oneself from the international economy would a) be pretty much impossible and b) turn said country into something akin to North Korea (NK), who decided that was the path they would take following the Korean war.

In fact, thats a pretty good point of comparison: NK closed up shop; decided to go it alone and attempt to do everything itself, while South Korea (SK) opened up its economy, floated its exchange rate et al. Other than that, and the outcomes of the war (which as far as I know left SK pretty devastated - which would have made it harder to achieve what its achieved relative to NK), I wouldn't bet on who has better living standards, better freedoms and a greater ability to provide for oneself and family.

Wait, so the US, despite having huge amounts of oil reserves, farmland, and potential for industry, in terms of raw materials and a giant population, wouldn't be able to sustain itself without use of foreign goods.  Even if a giant tariff was placed upon all foreign goods, and all business outsourcing overseas were heavily taxed to the point of having to give that up, forcing all manufactured good in the US to be made in the US?

[Riceball]

Wait, so the US, despite having huge amounts of oil reserves, farmland, and potential for industry, in terms of raw materials and a giant population, wouldn't be able to sustain itself without use of foreign goods.  Even if a giant tariff was placed upon all foreign goods, and all business outsourcing overseas were heavily taxed to the point of having to give that up, forcing all manufactured good in the US to be made in the US?

Don't they teach economics in the US any more? (maybe thats why the economy is shot to pieces)

I tried to write a big list of things, but one should suffice.

Why do you think you can walk into a Walmart and buy a t-shirt for basically nothing?

The answer: trade with countries who have lower unit costs than the US.

Look at it this way, say the average hourly rate for a t-shirt factory worker in the US is $20 per hour (thats a totally arbitrary number), and a worker can make 10 shirts per hour. Those shirts "cost" $2 each. In {insert developing world economy here}, the average hourly rate is something akin to 20c per hour – many valid reasons for this that are probably beyond the scope of this post. Given the same level of production technology (which is pretty much a valid assumption as production convergence has almost happened), each shirt costs 2c each.

So, where do you think a company will manufacture their shirts? The US, or the developing world?

In return, the US trades technology, high end services and all of the other wonderful goodies that are generated by a fruitful and well-functioning modern economy. Everyone wins.

Dude, not to be condescending, but take economics when you go to college.

EDIT: Oh, and this:

However, I would like to know as to why a dramatic reduce of all foreign interaction would have a negative effect on us, and what the negative effect would be.

Y’all tried that once, didn’t end too well.

[Super Dude]

However, I would like to know as to why a dramatic reduce of all foreign interaction would have a negative effect on us, and what the negative effect would be.

Right, I forgot to address this little tidbit.  Have you ever heard of the Great Depression?

[MasterShakezula]

Dude, not to be condescending, but take economics when you go to college.

Um, I will, considering how out of touch I just proved myself to be.   

[Scheavo]

However, I would like to know as to why a dramatic reduce of all foreign interaction would have a negative effect on us, and what the negative effect would be.

Right, I forgot to address this little tidbit.  Have you ever heard of the Great Depression?

What I don't get is why a reduction in our foreign military presence means a reduction in all foreign interaction. Why is it isolationist to bring the troops home? Wouldn't that also have to be combined with diplomatic changes?

As for the topic, it appears that as of right now, house Republicans are becoming more and more convinced that defaulting wouldn't be a bad thing.

[Super Dude]

However, I would like to know as to why a dramatic reduce of all foreign interaction would have a negative effect on us, and what the negative effect would be.

Right, I forgot to address this little tidbit.  Have you ever heard of the Great Depression?

What I don't get is why a reduction in our foreign military presence means a reduction in all foreign interaction. Why is it isolationist to bring the troops home? Wouldn't that also have to be combined with diplomatic changes?

As for the topic, it appears that as of right now, house Republicans are becoming more and more convinced that defaulting wouldn't be a bad thing.

To that first bit, I think I misread that as reducing all foreign economic interactions.  My bad.  Although a dramatic reduction of US foreign involvement seems like a good thing on paper until you realize that we do lose our stake in the pie, and in a way none of us can really appreciate, and I'm only just beginning to learn about it now.

To the second, I know and it scares me.  I have a friend who's convinced that it's happened several times before and that we got through it just fine.

[Riceball]

The problem this time is, as I said previously, global finance is such a massive and intertwinned part of the global economy that any fallout would certainly hit the real economy. US government bonds are considered the ultimate risk-free asset, and an increase in the price of the worlds most important asset would reverbirate across all asset prices, pushing up global borrowing rates. That would lead to a significant repatriation of debt instruments similar to that which occurred when Lehman went belly up - although on a much larger scale as we are now talking countries not institutions. Needless to say, things would be pretty fucked up lol.

The only saving grace would be that things won't immediately hit the fan on August 2, from what I understand the Fed can defer payments for welfare, servicemen etc before failing to pay interest on its outstanding debt. Although, I've also read that there are $480 billion worth of securities that expire in August - all of which would need to be refinanced. If the "default cycle" was to commence, investors would demand a higher interest rate on these securities which could have a similar effect to full default, but at a smaller magnitude.

I hope the republicans who may be thinking default is a good idea realise they will rape the global economy if they persist with their bullshit.

[Super Dude]

I think they do.  I think the problem is the wealthy among them - such as John McCain with his multiple homes in multiple countries - probably think they'll ride it out.  Even during the Great Depression there were those among the rich and fabulous who had no idea what the whole fuss was all about.

[Riceball]

So it looks like the house has sorted it out, voting through a significant spending reduction as part of an overall package of fiscal reforms. Those closer to the action, any thoughts?

I guess now its up to Obama, seeing as he had threatened to veto anything that didn't contain tax increases...

[ReaPsTA]

I'm okay almost with the U.S. defaulting on its debt.  It's like a mediocre sports team.  Sometimes you have to blow it up and start over.

[Super Dude]

That's great if you're also okay with spending the next decade or so living out of your car.

[Super Dude]

I find it so sad that the nation that began this century with an economic boom in spite of the dot-com bubble burst is now heading towards default and potential global economic collapse. And in a little more than ten years.

[ReaPsTA]

That's great if you're also okay with spending the next decade or so living out of your car.

It's easier for me to say this right now sitting behind a computer basking in the wonders of central air, but I don't give a crap.  The whole country's a mess economically, I'm 23 and have never had a girlfriend, the government's filled with incompetents and power mongers, and I have very few real prospects in my life.  So, look, I'm sorry, but why the hell not?  There might actually be, and I know this is a dirty word, consequences for the way the U.S. government overspends?  Good.  I'll take a 5-10 year period of utter-economic collapse for a remaining lifetime of improved fiscal responsibility.

[Super Dude]

1. Maybe your life isn't going anywhere, but mine is, and I'd greatly appreciate it if people like you welcoming in economic disaster didn't ruin it for the rest of us.

2. The government may spend a lot and maybe in the case of the military it overspends, but you're delusional if you think that as we move into the future, every government on every continent won't find that things cost more and so taxes must rise and spending too (within reason of course).  Things cost money.  As time goes on, things cost more money.  Get used to it.

3. It may be more than a 5-10 year period.  Hell, if this is the event that robs America of its superpower status, it may very well be the rest of your life.  I hope that makes it worth it to you to see the end of fiscal irresponsibility...oh wait, no because no power on Earth will ever end fiscal irresponsibility because we are only human and imperfect and not always morally sensible.  There will always be people who take advantage of the system or people out there making their wealth at other people's expense.  That has been a part of the human experience going back to the earliest civilizations, even as far back as Sumer and Egypt.  The mark of a good government is one that can overcome that very unfortunate fact of life.  Maybe we're not doing such a good job right now, but it's no reason to welcome a default that makes life hell for everyone except the people who thrived off of the economic collapse in the first place.  You really think the rich and corrupt are going to get their what for if we default?  All it's going to do is plunge you further.

[ReaPsTA]

1. Maybe your life isn't going anywhere, but mine is, and I'd greatly appreciate it if people like you welcoming in economic disaster didn't ruin it for the rest of us.

2. The government may spend a lot and maybe in the case of the military it overspends, but you're delusional if you think that as we move into the future, every government on every continent won't find that things cost more and so taxes must rise and spending too (within reason of course).  Things cost money.  As time goes on, things cost more money.  Get used to it.

3. It may be more than a 5-10 year period.  Hell, if this is the event that robs America of its superpower status, it may very well be the rest of your life.  I hope that makes it worth it to you to see the end of fiscal irresponsibility...oh wait, no because no power on Earth will ever end fiscal irresponsibility because we are only human and imperfect and not always morally sensible.  There will always be people who take advantage of the system or people out there making their wealth at other people's expense.  That has been a part of the human experience going back to the earliest civilizations, even as far back as Sumer and Egypt.  The mark of a good government is one that can overcome that very unfortunate fact of life.  Maybe we're not doing such a good job right now, but it's no reason to welcome a default that makes life hell for everyone except the people who thrived off of the economic collapse in the first place.  You really think the rich and corrupt are going to get their what for if we default?  All it's going to do is plunge you further.

I'm not saying I'm welcoming a default.  If I had the choice I'd say no.  But the Reckoning for our overspending must come, and if the time for that is now then it's better than later where the consequences will be worse.

Also, there's a fundamental ideological divide here at work again.  I think any sort of government healthcare, federal public transportation, government run social security and medicare, and on and on and on are a bad idea.  So, really, if the government does what I want it to do, it shouldn't be spending too much money.

So if, for example, the Republicans say they'll vote to raise the debt ceiling if the most recent health care bill is repealed, then I'm a happier person.  I might even vote for them in 2012. 

[Super Dude]

It doesn't matter if or when it will come because whenever it does, it's not going to end fiscal irresponsibility, corruption, and the like. As I said, those are ever-present elements of any and all human societies in every time and place. Economic disaster will not make it go away; in fact, it'll probably widen the gap between rich and poor more than it already is. The middle class as an economic stratum will probably no longer exist, but the very rich most definitely will.

[ReaPsTA]

It doesn't matter if or when it will come because whenever it does, it's not going to end fiscal irresponsibility, corruption, and the like. As I said, those are ever-present elements of any and all human societies in every time and place. Economic disaster will not make it go away; in fact, it'll probably widen the gap between rich and poor more than it already is. The middle class as an economic stratum will probably no longer exist, but the very rich most definitely will.

But what we're doing is creating a wider gap between rich and poor.  I'd rather have something happen with a chance of positive consequence than our current policy, which is to give businesses a bunch of money because they do what the government likes.

[Super Dude]

There is no chance a default can have positive consequences.  You're an economist, you should know that.  I'm a politics major with an environmental and theory focus and I know that.

And again, from a societal point of view, the only result I would expect from a default is not the rich and corrupt getting their what for, but regular joes like us getting squeezed even more.  It would be like living in the Great Depression, only instead of getting social programs they'd be taken away.

[ReaPsTA]

There is no chance a default can have positive consequences.  You're an economist, you should know that.  I'm a politics major with an environmental and theory focus and I know that.

And again, from a societal point of view, the only result I would expect from a default is not the rich and corrupt getting their what for, but regular joes like us getting squeezed even more.  It would be like living in the Great Depression, only instead of getting social programs they'd be taken away.

I know things about economics, but I'm not an economist.  Not smart enough to be one of those.

I don't understand why you're saying a default can't have positive consequences.  People respond to pressure, and the government is made up of people.  If the government actually has to save money, they'll start finding ways to do this.  Since far too much of what I've read about social programs is... discouraging, I'd be perfectly happy to see them go.  Maybe instead of an unsustainable social security system we'll move to a Chilean model.  That'd actually be exciting and positive.

I mean, like, we can at least both agree that the government shouldn't spend more money than it takes in, and that the government should also be spending money to pay off our debt.  I would think/hope.

So how does this get accomplished?  From my perspective, the federal government is getting more powerful and wasting more money all the time.  Something has to stop it before it collapses in an even more catastrophic manner.  Why not now?  What else will make the debt go away?  I'd say wait for something else to come in the future, but I find the existence of this debt stand-off in-and-of-itself miraculous.  While I'm 99% sure they'll work something out, a 1% chance now is better than a 0% chance later.

EDIT:  Just to see if I could, I did the NYTimes Debt Game (https://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html) and got rid of the long term budget shortfall without having the cut the military.  I only got rid of 87% of the short term deficit, but that's okay.  Trying to untangle the web of the U.S. budget doesn't necessarily have to be done now, although unfortunately it seems it might be the best option.

[Super Dude]

What did you cut?

Also that seems to be the difference between you and me (and obviously between Democrats and Republicans): I'm a WITT (We're In This Together), you're a YOYO (You're On Your Own).

[Perpetual Change]

That's great if you're also okay with spending the next decade or so living out of your car.

It's easier for me to say this right now sitting behind a computer basking in the wonders of central air, but I don't give a crap.  The whole country's a mess economically, I'm 23 and have never had a girlfriend, the government's filled with incompetents and power mongers, and I have very few real prospects in my life.  So, look, I'm sorry, but why the hell not?  There might actually be, and I know this is a dirty word, consequences for the way the U.S. government overspends?  Good.  I'll take a 5-10 year period of utter-economic collapse for a remaining lifetime of improved fiscal responsibility.

Sorry, but this is one of the most bizarre things I've ever read. The Republicans should just campaign on the slogan, "Hey, we're rich enough to weather the storm, and you don't give a damn anyway!"

Seriously, though. These aren't "our" consequences. Us normal folk should not have to suffer because Congress and the presidents decided to engage in multiple, illegal and expensive military actions. If anyone deserves to live out of their cars for what's happened to America, it's our lawmakers.

Also, I can't believe people actually think Public Transportation and Social Security are bankrupting us. The first is just laughable, and if you think the second is true than you have no idea how the Social Security system actually works.

Finally, the US isn't going to default. The US media is really making this a bigger issue than it is for some reason, but talking to people outside the states has really opened my eyes. No-one without a vested interest in US partisan politics I've talked to thinks this is actually going to happen.

[ReaPsTA]

What did you cut?

Foreign Aid
Eliminate Earmarks
Eliminate Farm Subsidies
Cut Pay of Federal Workers
Reduce Federal Workers
Cut Aid to Space

Malpractice Reform
Medicare Eligibility to 70
Reduce Tax Break for Employer Health Insurance
Cap Medicare Growth starting in 2013 (this was HUGE)

Social Security Age to 70
Reduce Social Security Benefits to those with Big incomes

Clinton Era Investment Taxes (almost out of principle)

Remove Payroll tax ceiling

Eliminate Tax loopholes, reduce Rates

Also that seems to be the difference between you and me (and obviously between Democrats and Republicans): I'm a WITT (We're In This Together), you're a YOYO (You're On Your Own).

Wait, I'm a yoyo?

I dunno if what you're saying's exactly fair though.  People that aren't responsible for themselves seem to be moochers who never really achieve anything based on what I've seen.  America's been built on people trying to achieve and do better for themselves.  And now we live in a society where the government's actually advertising food stamps.  We're all in this together, yes, but people need to take responsibility for their actions and contribute.

Seriously, though. These aren't "our" consequences. Us normal folk should not have to suffer because Congress and the presidents decided to engage in multiple, illegal and expensive military actions. If anyone deserves to live out of their cars for what's happened to America, it's our lawmakers.

Wait, wait.  Okay.

Why are any of the military actions in question "illegal?"  I'm not necessarily saying you're wrong, but I have a feeling you'll bring up international law, in which case our positions are miles and miles apart.

And you're trying to do that thing where the military and our wars in Iraq and Afghanistan are why we're running up such a massive deficit.

https://en.wikipedia.org/wiki/2010_United_States_federal_budget

Defense spending didn't even hit 20% of the 2009-2010 budget.  And while defense was indeed one of the fastest growing parts of the budget, it didn't get remotely close to the amount the budget grew in terms of bailouts and welfare.

Also, I can't believe people actually think Public Transportation and Social Security are bankrupting us. The first is just laughable, and if you think the second is true than you have no idea how the Social Security system actually works.

I never wanted to imply public transportation is bankrupting us, just that the federal government shouldn't be funding it.  And I don't understand your thing about social security.  At some point it will put out less money than it takes in.  How is that not bankrupting us at some point?

Finally, the US isn't going to default. The US media is really making this a bigger issue than it is for some reason, but talking to people outside the states has really opened my eyes. No-one without a vested interest in US partisan politics I've talked to thinks this is actually going to happen.

I already said in some other post there was a 99% chance the US wouldn't default.

[Perpetual Change]

Why are any of the military actions in question "illegal?"  I'm not necessarily saying you're wrong, but I have a feeling you'll bring up international law, in which case our positions are miles and miles apart.

We could get into that, but we don't need to. How about just plain old undeclared military action?

Defense spending didn't even hit 20% of the 2009-2010 budget.  And while defense was indeed one of the fastest growing parts of the budget, it didn't get remotely close to the amount the budget grew in terms of bailouts and welfare.

Between "Department of Defense,"  "Department of State and Other International Programs" and the biggest joke of all, the "Department of Homeland Security," you've got a pretty good majority, though I will admit it's hard for me to tell for sure what's what on that map. Also, the 2009-11 budget sadly doesn't take into account the total cost of the wars, including what we've paid already and what is to come. The defense budget also doesn't include past military expidentures that we're still paying for. Finally, the graph doesn't take into account that the money we're paying for the wars is borrowed, and we'll have to pay interest, and it decreases the value of our dollar, whereas Social Security is still self-sustaining (even if not for long).

But it doesn't matter, because the programs aren't nearly as big of a problem as the fact that the rich basically have decided to stop paying taxes which, by the way, directly correlates with the fall of almost every historical empire I can think of.

I never wanted to imply public transportation is bankrupting us, just that the federal government shouldn't be funding it.  And I don't understand your thing about social security.  At some point it will put out less money than it takes in.  How is that not bankrupting us at some point?

But all of those programs can be made to be self-sustaining, and in fact a few of them are, which a war can almost never be. Which is why I don't get your priorities at all. How do you justify supporting an undeclared invasion of Iraq that we have to borrow money for before you can justify fixing a self-sustaining program that will eventually, but still hasn't, bankrupted itself?

Finally, knock Clinton on principle all you want, but that was the last time we saw a balanced budget if I remember correctly.

[ReaPsTA]

Between "Department of Defense,"  "Department of State and Other International Programs" and the biggest joke of all, the "Department of Homeland Security," you've got a pretty good majority, though I will admit it's hard for me to tell for sure what's what on that map. Also, the 2009-11 budget sadly doesn't take into account the total cost of the wars, including what we've paid already and what is to come. The defense budget also doesn't include past military expidentures that we're still paying for. Finally, the graph doesn't take into account that the money we're paying for the wars is borrowed, and we'll have to pay interest, and it decreases the value of our dollar, whereas Social Security is still self-sustaining (even if not for long).

This is all fair to say, but at some point what's the financial impact relative to our budget?  Still small relative to what I think you're trying to represent it as.

Also, there's another values difference.  You say "oh my god, we spend so much on our military, it's more than the next fourty-some countries combined!"  I wonder why it can't be more than the rest of the world combined.  Ideas of sovereignty aren't as nice as the ability to back them up.

But it doesn't matter, because the programs aren't nearly as big of a problem as the fact that the rich basically have decided to stop paying taxes which, by the way, directly correlates with the fall of almost every historical empire I can think of.

As much as I hate tax loopholes, let's not forget that the top 1% of earners pay something like 50% of income taxes.

But all of those programs can be made to be self-sustaining, and in fact a few of them are, which a war can almost never be. Which is why I don't get your priorities at all. How do you justify supporting an undeclared invasion of Iraq that we have to borrow money for before you can justify fixing a self-sustaining program that will eventually, but still hasn't, bankrupted itself?

Finally, knock Clinton on principle all you want, but that was the last time we saw a balanced budget if I remember correctly.

I'm okay with some kind of government pension plan like Chile has, where people mostly pay into their own pensions.

You're looking at the invasion of Iraq in purely financial terms, or at least that's how it seems.  I appreciate having another country in the Middle East that we have meaningful co-operation with.  Also, why was the invasion undeclared?  Bush told everybody it would happen, we got congressional approval, and we went in.

While Clinton did sign a balanced budget, how much of that was a reaction to the Republican Congress he was dealing with?  Just like Obama looks worse because of the incompetent Democratic Congress, we can't ignore that Clinton looked better because of a relatively competent group of Republicans.

[Perpetual Change]

This is all fair to say, but at some point what's the financial impact relative to our budget?  Still small relative to what I think you're trying to represent it as.

One and a quarter trillion dollars of borrowed money which will be paid on interest for years to come can hardly be seen as having a small financial impact on our budget.

I wonder why it can't be more than the rest of the world combined.  Ideas of sovereignty aren't as nice as the ability to back them up.

Yeah, nothing says "sovereignty" like borrowing hundreds of billions from China to continue our misguided and fruitless razing of the middle east. And, honestly, the idea that we'd somehow we'd be less sovereign if we pulled our troops home and slashed our defense budget by half or more is ludicrous, especially given our current nuclear deterrent.

As much as I hate tax loopholes, let's not forget that the top 1% of earners pay something like 50% of income taxes.

Which just helps illustrate my point: if they stop, so does America. Isn't that basically what all this hype is about, anyway?

I appreciate having another country in the Middle East that we have meaningful co-operation with.

I don't see that as ever happening. I mean, wasn't that supposed to be Hussien at one point? Our Middle Eastern allies have a funny way of not working out like that. And, honestly, why should we have their loyalty? I doubt anyone's quality of life is better in Iraq right now than it was before-- and things are certainly much worse in Afghanistan. And if it ever gets to the point where it is, which I also don't see happening, it'll be thanks only to years and maybe even decades of prolonged commitment from the US. You may have no problem with splurging a quarter of the budget (a borrowed quarter) on Iraq every year for the next century in the hopes that they might be allies one day, but personally I can't be that optimistic. At the rate we're going, we'll collapse from the inside before we ever get to reap the benefits of having allies who remember the days when we carpet bombed entire villages because we thought terrorist leaders might be hanging out in them.

While Clinton did sign a balanced budget, how much of that was a reaction to the Republican Congress he was dealing with?  Just like Obama looks worse because of the incompetent Democratic Congress, we can't ignore that Clinton looked better because of a relatively competent group of Republicans.

I don't think either of those statements are true. Obama only looks bad because he listened to the contrarian side of the Republican party when there was no need to, and hasn't helped much with ending the wars. And, Obama and the Democrats may look bad now, but the Republicans look even worse. Despite my and many people's disappointments, I think the RNC will be bludgeoned in 2012.

[Scheavo]

As much as I hate tax loopholes, let's not forget that the top 1% of earners pay something like 50% of income taxes.

I really, really wish this stat would stop being used to somehow say rich people are being taxed too much. For starters, the two biggest welfare programs, medicare and social security, have their own independent tax through the payroll. Lower income people have to pay these, whereas higher income people often don't. Most importantly, the math I've done several times on this forum. Rich people pay such a large portion of income taxes because they make such a large portion of the overall income. It's simple as that.

I did that budget game, and got very close to closing the budget in 2030 (did it for 2015); I did it without sacrificing any social welfare program, and without being able to make very deep defense cuts, or other options I would prefer.

[Super Dude]

How did you do it?

[Scheavo]

Earmarks
Farm Subsidies (I think we should still have some farm subsidies, but nothing close to what we have now, food production is too important)
Cut salaries by 5%

All the military options (not that there's that much)

The more drastic troop cuts (not that it's full)

Malpractice reform

Reduce tax breaks for health insurance (tricky subject considering I would redo health care system)

Reduce social security benefits for those with high income

Return to clinton era levels for capital gains tax (though I think this should be fully in line with income tax, it's a source of income)

Let all the Bush tax cuts expire

Payroll tax increase

Eliminate loopsholes and lower rates

Reduce mortgage reduction for high income earners

Millionaries tax on income.

51% tax increases, 49% spending cuts. Would probably get higher actual spending cuts if I had more control over options. Didn't like a lot of the first options, even though I agreed that some sort of change is necessary there.

[Super Dude]

So the conservatives/libertarians cut spending and the liberals end tax cuts, breaks, and loopholes.  Hmm...