U.S. war costs in Iraq up
HOW CAN WE KEEP THIS UP?
YAHOO-The Iraq war may not dominate U.S. news reports as the carnage drops, but a new report underscores the financial burden of persistent combat that is helping run up the government’s credit card.
“Funding for U.S. operations in Iraq and Afghanistan and other activities in the war on terrorism expanded significantly in 2007,” the Congressional Budget Office said in a report released on Wednesday.
War funding, which averaged about $93 billion a year from 2003 through 2005, rose to $120 billion in 2006 and $171 billion in 2007 and President George W. Bush has asked for $193 billion in 2008, the nonpartisan office wrote.
“It keeps going up, up and away,” Senate Budget Committee Chairman Kent Conrad said of the money spent in Iraq since U.S. troops invaded in 2003.
UPDATE
Economists Predicted Prolonged US Presence In Iraq Could Spark Recession
UPDATE
Bush budget won’t fully fund Iraq war
POLITICO-The White House confirmed Wednesday that its new budget next month will not request a full year’s funding for the war in Iraq, leaving the next president and Congress to confront major cost questions soon after taking office in 2009.
With military Viagra?
U.S. Asking Iraq for Wide Rights on War
A small town mourns its big sacrifice in Iraq
U.S. Success rate it Iraq up!
Iraqis feel safer, troops begin to come home
in Iraq…my bad
We can’t have the troops come home. They would need jobs. We need another war to keep them out of the workforce.
We need more spending to keep GDP positive. Besides, OPEC needs to do something with all their petro-dollars and China needs to do something with all their export dollars. They can loan it to us to spend more on the military.
re: post # 2. Things may have been peachy today in Iraq if we hadn’t bombed Fallujah in relaliation for what they did to the “contractors”. Asking Iraq to give carte blanche to contractors is ridiculous. Screw the “contractors”. Anybody who wants this would almost have to have “vested interests”.
How’s the body count going?
JP,
When the troops come home, they don’t stop being soldiers, sailors, marines, etc. They just go back to playing xbox in the barracks at Ft. Drum and Ft. Campbell and Ft. Benning. Even the weekend warriors will still have their civillian job waiting for them. It is not like WWII or Vietnam and the draftees returning home and to civillian life.
Aubrey
Remember that we are using 10s of thousands of “reserves.” They do go back into the work force. It is the full time soldiers that would go to the bases.
Also, we are trying to “close bases” here, and probably would offer a lot of “early outs” at reduced retirement pay plus benefits that wouldn’t be enough so they would look for jobs too.
Bottom line, if there is a way to make things worse, this government will do it.
The reserves that have been on long term deploy have been replaced in their jobs. They get their job back but the person that was filling it gets laid off. So, that still creates a labor surplus problem that has to be worked through.
However, I don’t see troops coming home as a problem, really.
But, here is something that I was wondering, regarding “Stimulus.”
Isn’t this a good excuse with states clamoring for federal funding of infrastructure, to get the 5 NAFTA super corridors going?
In today’s MONEY NEWS, was an article that the states want the Fed to pay for a lot of infrastructure projects that would last years. They are losing so much tax revenues from the housing collapse they are running budget deficits The credit crisis has made it harder for selling bonds and they can’t afford them anyway.
I look for all kinds of federal “bailouts” for states coming fairly soon. If you think “pork” was high before, wait until all the states start getting federal funds to make up for budget shortfalls.
Of course it won’t be called “pork” but rather “stimulus.”
Davey O and the rest of you cut and run types;
For the longest time I’ve read your postings about how “bad” things in Iraq are going. Clearly, facts and first-hand evidence from even the most left of leftist news reporters hasn’t seemed to change your mind. For this reason, I decided to post some factual information available to anyone who cares to look at it. I’m even including the link for you to check it out for yourself.
First, let me say this; the death of ANY American who wears the uniform of this Nation is tragic. Nobody wants to lose one of our own and we’re fortunate to have young men and women with the guts, pride and sense of honor protecting our freedoms. However, the overblown stuff you people post is simply untrue. Please read the following information and let’s finally put this topic to rest.
These are some rather eye-opening facts: Since the start of the war on terror in Iraq and Afganistan, the sacrifice has been enormous. In the time period from the invasion of Iraq in March 2003 through now, we have lost over 3000 military personnel to enemy action and accidents. As tragic as the loss of any member of the US Armed Forces is, consider the following statistics:
The annual fatalities of military members while actively serving in the armed forces from 1980 through 2006:
1980 ……… 2,392
1981 ……… 2,380
1984 ………. 1,999
1988 ………. 1,819
1989 ………. 1,636
1990 ……… 1,508
1991 ………. 1,787
1992 ………. 1,293
1993 …….. 1,213
1994 ………. 1,075
1995 ……. …..2,465
1996 ……… 2,318
1997 ………. 817
1998 ……… 2,252
1999 ………. 1,984
2000 …….. 1,983
2001 ………. 890
2002 ………. 1,007
2003 ………. 1,410
2004 ………. 1,887
2005 ……… 919
2006………. 920
Now David et al, add the numbers up and you’ll find that:
8 Clinton years: 13,417 deaths
7 Bush years: 9,016 deaths
If you are confused when you look at these figures…so was I.
Do these figures mean that the loss from the two latest conflicts in the Middle East are LESS than the loss of military personnel during Mr. Clinton ’s presidency when America wasn’t even involved
in a war? And, I was even more confused; when I read that in 1980, during the reign of President
(Nobel Peace Prize) Jimmy Carter, there were 2,392 US military fatalities!
These figures indicate that many of our Main Stream Media & Cut and Run Politicians will pick and choose. They present only those ‘facts’ which support their agenda-driven reporting. Why do so many of them march in lock-step to twist the truth? Where do so many of them get their marching-orders for their agenda?
Our Mainstream Print and TV media, and many Politicians like to slant it so that these brave men and women,
who are losing their lives in Iraq, are mostly minorities.
Wrong AGAIN – Just one more media lie! In the U.S. Armed Forces, there are three colors; RED WHITE AND BLUE. That’s all. Race or ethnic background doesn’t mean a thing when someone’s protecting your butt or vice versa. Now back to the “left-speak.” The latest census of Americans, shows the following distribution of American citizens, by Race:
European descent (White) …… 69.12%
Hispanic ….. 12.5%
Black……… 12.3%
Asian ……… 3.7%
Native American 1.0%
Other …….. 2.6%
Now… here are the fatalities by Race; over the past three years in Operation Iraqi Freedom:
European descent (white) …… 74.31%
Hispanic …. .10.74%
Black ……….9.67%
Asian …… . .1.81%
Native American 1.09%
Other …….. . 33%
These statistics are published by Congressional Research Service, and they may be confirmed by anyone at:
http://www.fas.org/sgp/crs/natsec/RL32492.pdf
Please look at this report site.
To sum this up Davey Boy, please start doing some research before you make your assinine remarks. I’m getting tired of having to prove you wrong over and over.
Oh yeah….one last thing; on behalf of Aubrey, Bart, Hugh, myself, and all other military veterans, you’re welcome. Have a nice day.
Sgt Mac
How do we pay for this?
John –
Simple. First, We pull ALL forms of funding of ANY kind to illegals. I have some data on this subject, but I’ll have to post it at another time as it’s on a different computer.
The cost of illegal criminal aliens to the U.S. is HIGHER than the cost of fighting the war on terror.
Next, we ‘The People’ tell our illustious legislators that “pork” is no longer acceptable. This includes unconstitutional garbage like SCHIP and funding for the arts as well as bridges to nowhere and ludicrous studies that nobody but special interests want.
Finally, ‘We The People’ insist we return to fiscal responsibility by eliminating ALL spending on social programs. Nowhere in our founding documents will you find anything about spending taxpayer money on social programs or public education.
Take care of those three items and you’ll find yourself back on the road to fiscal responsibility.
John – Here’s the data I promised in my earlier post. I believe you’ll find this eye-opening. Please take a look at the links. This is why I agree COMPLETELY with Hugh on this issue.
WHAT COSTS MORE PER YEAR THAN THE IRAQ WAR?
Illegal Aliens Cause Massive Cuts For US Seniors
December 4, 2007
http://rense.com/general79/seniors.htm
1. $11 Billion to $22 billion is spent on welfare to illegal aliens each year. http://tinyurl.com/zob77
2. $2.2 Billion dollars a year is spent on food assistance programs such as food stamps, WIC, and free school lunches for illegal aliens. http://www.cis.org/articles/2004/fiscalexec.html
3. $2.5 Billion dollars a year is spent on Medicaid for illegal aliens. http://www.cis.org/articles/2004/fiscalexec.html
4. $12 Billion dollars a year is spent on primary and secondary school education for children here illegally and they cannot speak a word of English! http://us.f820.mail.yahoo.com/ym/Compose??
5. $17 Billion dollars a year is spent for education for the American-born children of illegal aliens, known as anchor babies. http://us.f820.mail.yahoo.com/ym/Compose??
6. $3 Million Dollars a DAY is spent to incarcerate illegal aliens. http://us.f820.mail.yahoo.com/ym/Compose??
7. 30% percent of all Federal Prison inmates are illegal aliens. http://us.f820.mail.yahoo.com/ym/Compose??
8. $90 Billion Dollars a year is spent on illegal aliens for Welfare and Social Services by the American taxpayers. http://us.f820.mail.yahoo.com/ym/Compose??
9. $200 Billion Dollars a year in suppressed American wages are caused by the illegal aliens. http://us.f820.mail.yahoo.com/ym/Compose??
10. The illegal aliens in the United States have a crime rate that’s two-and-a-half times that of white non-illegal aliens. In particular, their children, are going to make a huge additional crime problem in the US. http://us.f820.mail.yahoo.com/ym/Compose??
11. During the year of 2005 there were 4 to 10 MILLION illegal aliens that crossed our Southern Border also, as many as 19,500 illegal aliens from Terrorist Countries. Millions of pounds of drugs, cocaine, meth, heroin and marijuana, crossed into the U. S from the Southern border. Homeland Security Report. http://us.f820.mail.yahoo.com/ym/Compose??
12. The National Policy Institute, “estimated that the total cost of mass deportation would be between $206 and $230 billion or an average cost of between $41 and $46 billion annually over a five year period.” http://us.f820.mail.yahoo.com/ym/Compose??
13. In 2006 illegal aliens sent home $45 BILLION in remittances back to their countries of origin. http://us.f820.mail.yahoo.com/ym/Compose??
14. “The Dark Side of Illegal Immigration: Nearly One Million Sex Crimes Committed by Illegal Immigrants In The United States”. http://us.f820.mail.yahoo.com/ym/Compose??
Total cost is a whooping… $338.3 BILLION A YEAR!!!
SgtMac
Both issues cost more money than we can afford bottom line!
The outstanding warrants for murder in L.A. and Phoenix are both over 80% for illegals.
But, the problem is that people in Congress, like McCain want to also bring 67 to 100 million more here.
3.5 to 5 million a year, more. They say they need them to replace the 78 million set to retire but, think what needing 1/3 more infrastructure means when we can’t afford to care for what we already have.
This is nuts. We need reform and controls on immigration to keep the labor force low enough business has to compete for labor with better wages.
However, they can’t do that without almost total reform of government that add so much cost to U.S. business. The voters don’t support those reforms in enough numbers, I don’t believe and thus, with a democratically controlled Congress and White House in 2009, I believe they will pass “amnesty” and the increase in immigration quotas.
quote:
Border Patrol Agent Murdered by Fleeing Smuggler
On Saturday, Border Patrol Agent Luis Aguilar was killed while trying to stop two vehicles fleeing back over the border to Mexico from the United States. One of the vehicles, a Hummer driven by suspected smuggler Jesus Navarro Montes, ran over Agent Aguilar as he was placing spike strips in an attempt to puncture the tires on the suspects’ vehicles. Border Patrol agents had earlier spotted the two vehicles near the Imperial Sand Dunes in California and were in hot pursuit when he was killed. (Los Angeles Times, January 20, 2008)
According to Mexican authorities in Baja California, Navarro was smuggling narcotics into the United States at the time he was spotted by the Border Patrol. After running down Agent Aguilar, Navarro Montes fled to Mexicali and hid the vehicle with accomplices. He then traveled to the northern state of Sonora, where he was apprehended on Wednesday. The arrest of Navarro, who had previously been jailed in the U.S. for smuggling 10 illegal aliens into the country, also led Mexican authorities to three Mexicali homes containing the rudiments of an alien-smuggling enterprise, including blank immigration documents, border-crossing cards, temporary visas and machines to duplicate U.S. government seals. (MSNBC, January 23, 2008)
The attack on Agent Aguilar is the latest incident reflecting a recent spike in border violence. Assaults on Border Patrol agents have risen from 384 in 2005 to 987 in 2007. In the final three months of 2007, the number of assaults neared 300. According to Customs and Border Protection, the increase in violence is due to increased activity of Border Patrol Agents and deadly battles between drug- and human-smuggling rings at the Mexican border. Curiously, the Yuma sector in which Agent Aguilar operated had seen a recent decline in violence. (The Washington Times, January 24, 2008)
Agent Aguilar, a six-year veteran of the Border Patrol, was 32 and is survived by his wife and two children.
http://www.fairus.org/site/PageServer
This was in today’s email from FAIR
Federation for American Immigration Reform
John – you asked how we pay for something and I gave you a valid answer. In the future, if you don’t want a factual answer because of your pwn personal bias, please don’t ask for one.
Jan Paul – Very good points all. I only hope your belief about amnesty proves to be wrong. I, too, have my doubts, but I’m confident there ar enough real Americans to stop this madness now. I have some friends who’ve been down on the border with the minute men militia and they tell me the problem is as bad now as it ever was.
ANY candidate who makes this the issue on which he’s willing to “fall on his sword” over, has my vote.
Healthcare, economic reform, blah, blah, blah. In my view, the most important issue facing this Nation is the attack on our sovereignty. We’ve always been able to ride out economic problems, and in my view, the healthcare “crisis” is anything but a crisis. If we fix illegal immigration and maintain our borders, we can overcome anything.
Sgt Mac
The truth is you have no answer!
I hope you are right about the border but after listening to representatives from both parties in meetings in our city here in Arizona, I believe it will be passed in 2009. We have both Senators and most representatives that are supporting some version of legalizing those already here. The representatives most adamant about not letting them stay, were voted out.
Some say they can stay with a “touch back,” some with fines, some with other requirements (language for example) but, almost all favoring some type of plan to let them stay but, not call it amnesty.
On the economy, we can only delay the collapse. It could be for years though. I think we have one more bubble, a commodity bubble as we pump billions of federal dollars into the States that are losing so much tax revenue that they are willing, now, to basically let the Federal government do anything it wants in their state to keep the economy going. I believe they will move forward with the NAFTA highways in a big way, now, thanks to desperation.
That means massive borrowing or printing of money if they meet those demands by the states, but, it would employ hundreds of thousands either directly or indirectly in good paying jobs. If they do this, I believe our debt will easily top $10 trillion this year. But, the debt won’t be as much of a problem as the inflation it would cause. We can pay the 1/2 trillion interest until so many retire from the workforce and stop paying payroll taxes that it starts to reduce the loans from the trust funds to the general fund.
The economic crisis that we can’t get out of is “debt.” When the Asian nations, Russia and OPEC nations no longer need to depend on our consumers to keep growing. At that point, all they have to do to collapse the U.S. economy is stop selling oil in dollars.
The nations that buy oil from OPEC will no longer need dollars for those purchases and can stop supporting us with loans and can allow their currencies to rapidly rise against the dollar.
They are nations of savers and they have economic strength as a result of that that we used to have many decades ago. Now, we are the largest debtor nation and bow constantly to our bankers, like Saudi Arabia. More important than federal debt is consumer, city and state debt.
At some point that debt, we use to fuel our consumption, consumes us.
John
Did you even bother to read any of the links?
Why do you constantly make ridiculous, uninformed statements like that? Never mind….
Jan Paul – Again, your points are valid, but I must disagree. The cauldron hasn’t begun to boil yet on the illegal alien issue. If nothing else, the grass roots effort last summer to derail “comprehensive” immigration reform proves that ordinary Americans are not happy with anything remotely resembling amnesty.
I’m an optimist. I can’t deny the economy has slowed and even gone into reverse in some markets. However, this is the SAME Country that beat the depression and came out of it smelling like a rose. We are the most resiliant people on the planet, and to use a boxing analogy, “we have a chin made of stone.” We can take the best shot and still get up and continue. It’s been our greatest strength since our founding.
The forces of socialism, jihad, and North American Union are just the latest attempt to test our National resolve. When all is said and done, we’ll emerge from this a stronger, and more united Country than we are now. I really believe that.
The power brokers can say anything they like, but the average American citizenry will have the final word. I’m not suggesting it won’t get worse before it gets better. Rather, I think we, as a people, prize our sovereignty, liberty and freedom above all else. That’s as it should be.
When we beat those things we had a strong people. Government has been weak during those times but the people strong.
What is different is that now you have 52% of the people getting government funds for part of their income. They have gone so far in personal debt they can’t make ends meet, they can’t buy government bonds and we have to depend on foreign loans.
We had a nation where the consumers bought American made goods and rebuilt this nation from the depression with manufacturing and a rising standard of living. Now, they have to watch as the manufacturing base for the world that used to buy from America, buys from Asia.
You had people who were morally strong and self-discipline that fostered saving and living within their means was the standard. Now, they have to have both in a marriage working and massive loans to buy what one worker could buy in the 50-60’s.
Debt is the difference and debt that depends on our enemies whether real enemies or just economic enemies, loaning us the money we need is different.
If you mean we will rebuild after the coming crisis, yes, I agree. But, you can’t avoid this kind of crisis because the only cure ever, in the history of these types of crisis is for people to start returning to saving and living within their means. That takes a hard recession because to save and pay down debt, they have to stop spending by huge amount.
Then add that cities will have to cut spending and states will have to cut spending to have a balanced budget that doesn’t include massive borrowing and you have another reason a debt based crisis can’t be “grown” out of.
But, I am open to what you think could avoid that reduction in debt without a crisis being created. What do you think they can do at the consumer level, the city and state level?
I agree you may be able to delay the crisis but you can’t avoid it.
One reason that Congress wants to keep the 20 million illegals here and add 100 million more is that they believe they will “grow” us out of the crisis.
I disagree but, Congress is determined to get those people here.
Let’s say we are successful in getting the 20 million here deported. Congress will just immigrate them legally back here. They will say those people, because they are already skilled in the jobs they were deported from should qualify first for legal immigration. Then add that they will still add the 100 million they want in addition and you have still got the same problem.
Whether they deport or don’t deport, Congress plans to “save the U.S. with immigration.”
I think you have valid points as I said. Certainly, I can’t predict what the government (read: congress) will do, but I’m fairly certain what John Q. Public will do. He proved it beyond ANY doubt last summer and he will not stand for anything including amnesty.
Looking at the numbers, unemployment in the U.S. stands at an excellent 5.2%, and the economy, while slowing, projects out to about 3% annual growth. These can hardly be called recessionary numbers, but they certainly could use a boost.
In a previous posting, you mentioned the growing number of jobs at all levels of government that don’t count against unemplyment figures. This is an alarming development in my view, and one that MUST be addressed. Growing government instead of the private sector is a recipe for certain disaster.
Bloated government, debt, and worst of all APATHY at the voter level are each contributing to the problems we face. I deny none of what you say becasue I think your points are true.
My primary point is that criminal illegal aliens are placing such an enormous drain on our resources, we simply can’t afford to let it continue. If you looked at the links I posted with respect to this issue you’ll know the problem is FAR greater than our legislators would like us to believe.
In my view, we can fix things by degree starting with illigal aliens. Next, we move to the next issue, than the next and so on. Personally, I’d like to see a number of current government departments privatized. The Dept of Education, the US Postal Service, and the IRS come to mind immediately. Private industry has proved over and over it does a better job at these things than the government can do – and it does it cheaper with BETTER overall quality. The IRS needs to be eliminated immediately and should have been about 50 years ago. Companies like FedEx and DHL are forced to compete against the government for the same customers while being subsuduzed to do so. I doesn’t get much sillier than that.
Looking at the numbers, unemployment in the U.S. stands at an excellent 5.2%,
======================
Sgt. actually it is about 12% unemployment.
We have done a lot to make that number look better in the last 15 years or so.
Also, take into consideration the 1.5 million real estate agents who don’t pay into nor qualify for unemployment and thus aren’t counted when they lost their jobs because, technically, they are still licensed and can “work” on commission for any real estate agency though they may not make a dime now.
Then you have people who have been dropped from the roles.
quote:
While official unemployment in June 2006 is 4.8%, real unemployment is 12,3%, which includes those who want a job now but are classified as “not in the labor market” and additional jobs needed to keep up with population growth since April 2000 when employment began to decline.
Note that none of this includes the underemployed, which adds considerably to slack in the “labor market.”
Source
Then you have the 4% underreporting of inflation which means many of the 3% GDP growth numbers were actually negative. That is why the buying power of lower wage Americans has dropped so much over the last 2 decades. A social security check would have to be 50% higher to have the same buying power as of 20 years ago.
That “real GDP” number is a fraud and has been for at least 15-20 years because of the changes they made in how they report inflation to give you the GDP figure.
We have been going down hill even though the “numbers” have been positive. However, more and more Americans are waking up to that distortion. More and more economists are realizing the “smoke and mirrors” has not only created great distortions but, under Bush has got worse.
Now you even have our own government agency, the GAO touring the nation warning people of that distortion and the disaster we are headed for. If you have watched any of the video’s by the Comptroller General, then you know how bad it is. For three years in a row the GAO has warned congress we are headed toward a “gradual if not sudden loss of our standard of living.”
Virtually nothing you see on the news regarding the “numbers” that say our economy is good are accurate in “reality.” Most of the growth is due to inflation and debt and deficit spending by individuals, cities, states, and the fed.
Here is an example of how the “deficit” can be distorted.
If wages go up due to lower unemployment, which did happen during the housing boom, payroll taxes rise. Millions of illegals using stolen or forged numbers were getting $15 an hour and more pushing wheelbarrows or roofing or pounding nails here in the Phoenix area. Those pay roll tax surpluses were loaned from the trust funds to the general fund but, aren’t counted as loans.
However, they reduced the need for foreign loans and make the deficit look better even though we were spending more. The government accounting method for that justification is as follows. They state that because Congress can legislate out of existence what those tax revenues were collected for, they can be counted and tax revenues against spending and not as a loan to cover that spending.
The entire federal system is so screwed up for counting money that the Government accounting office says they haven’t been able to provide an accurate accounting for 10 years due to all the hidden flow of money.
Just in the Pentagon, Rumsfeld said there were $2.2 trillion they couldn’t account for. (that was in 2002). The American people have no idea of how bad this government’s fiscal condition is. And, that doesn’t even account for what is happening now in the cities and states with debt and budget deficits.
Sgt. Mac
I should have added that there are solutions and you mentioned some. The problem isn’t a lack of solutions.
The problem is saving and reducing debt will cause a recession.
The problem is that deporting the illegal will expose some of the smoke and mirrors and our government doesn’t want that to happen.
The problem is that the citizens only want the portion of government reformed the 52% don’t get funding from.
The Problem is that we have both parties moving us toward a North American Union.
Jan Paul –
Sorry for the delay…..I can’t attest to the veracity of your numbers, but I’m willing to split the difference. Let’s say you’re right on target and the Country is moving toward a North American Union. Here’s what I believe will happen;
1. As I stated earlier, when the average “Joe Bag O’Donuts” gets wind of this, and eventually he will, he and all the other grassroot Americans will rise up in the greatest protest this Nation has ever seen. THe uprising last summer over “comprehensive immigration reform” is smaller than the tip of the iceberg where this issue is concerned. In fact, if there were a SINGLE candidate willing to say flat out his or her number one priority is to seal our southern border and deport every illegal criminal alien in the Country, I believe that candidate would win the heart and sole (not to mention the vote) of about 75% of Americans. I think the issue is THAT important.
2. I’ve found that federal “numerology” is frequently skewed in both directions. I’m not suggesting your numbers are less than accurate, but we are talking about the same government willing to pay SCHIP payments to certain families making $80K per year. Mr. Bag O’Donuts I mentioned earlier probably has a wife, kids, mortgage payments, etc. and doesn’t make $80K annually. What I’m getting at is that the smoke and mirrors you mention works in two directions. Perhaps you’re right about real estate agents, but you’ve left out those who work “off the books,” make a good living, and ARE counted as unemployed. Many illegals fit this category quite nicely.
3. With regard to debt, I couldn’t possibly agree more. Enough said about that.
4. For some odd reason, the current and last generation of Americans seem to think Social Security was intended to see people through a comfortable retirement. As you are well aware, NOTHING could be further from the truth. It was supposed to be a safety net and nothing more. I agree with your point that entitlement spending is out of control.
5. I believe your point about deporting illegals and exposing the smoke and mirrors is PRECISELY what this Nation needs. There’s nothing quite like a smack in the face to wake people up.
Thank you for this discussion. I have enjoyed it very much. By the way, your posting about Jeff Flake in another thread couldn’t possibly have been said better. Well done.
One last thing….I know things look pretty dim from time to time, and I suppose that’s to be expected. However, don’t EVER doubt the power of ‘We The People.” Our history is chock full of examples of the Nation overcoming what seemed to be insurmountable problems. I believe from the bottom of my heart we can weather this storm and be better for having done so.
Sgt Mac. This article came out a few minutes ago and is a better description of what I was saying is different this time.
quote:
Debt Saturation Is the Problem
This then is what is different this time, and it is what the Fed fears. In the early stages of all credit expansions, businesses flourish, and the Fed is able to manipulate the expansion’s boom-bust nature in a tolerable way. But once an economy becomes “debt saturated” from the massive injections of credit over time, borrowing and confidence drop off. This causes the rate of money supply growth to decline by negating the central bank’s power to pyramid credit, which brings severe disinflationary pressures no matter what the Fed does with interest rates. If the preceding build-up of debt is severe and the resultant decrease of confidence widespread, such pressures then morph into a far more serious crisis.
Down deep, the Fed and its circle of monetary bureaucrats fear that this time the fundamental buoys of the economy could indeed collapse and usher in a dreadful credit deflation that would suck America and the world into the vortex of Depression. It is this dread that is undoubtedly keeping Bernanke awake at night.
In all the recessions since World War II, the Fed has been able to maneuver economic forces in America to induce recovery. The prior inflationary booms were not outrageous, the nation was a solid creditor in the world, there was a substantial cache of savings among the people, etc. It was a matter only of squeezing the speculative excesses out of the system. Some prolonged pain was required, but nothing that could not be endured by men and women who had a “life is tough” philosophy instilled into them in their youth.
This time it is all very different….
KEYNESIAN CHICKENS COMING HOME
by Nelson Hultberg
What makes it so obvious it is different in this last decade is the “bubbles” are getting bigger and more unmanageable. This housing bubble is undermining the entire financial system of not just the U.S. but much of Europe and is even being felt in Chinese banks.
When you have a currency that only has value due to demand for it and the nation owes more than it owns, it doesn’t take much to cause panic in the Fed and Congress.
When have you seen Congress when we have an almost 4% GDP growth in panic mode to avoid a recession? Not even one quarter of negative growth and it takes two for there to be a recession. When have you seen the Fed cut rates during economic expansion? When have you seen the Fed do an emergency rate cut of 75 basis points between meetings when the economy is expanding and the only major news is a dropping stock market in other nations since ours wasn’t even open.
You have never seen panic like this and while quick action may avoid this current crisis from creating a recession, all the better economist say they can’t avoid it, only delay it.
We have to prepare people for it. We have to let them know they will need to have the skills needed during a recession and enough savings to pay the bills for a few months if laid off. If it doesn’t happen for a decade, great. That means they have a decade to save and prepare.
That link didn’t seem to work
http://tinyurl.com/32yl3d
Try this one.
Nobody likes “recessions,” but, if we are prepared for it, it may not be so bad. You can’t be prepared for it if you have no savings.
Also, think about what this “economic crisis” is doing. It is taking the focus off immigration. If we get even one quarter of negative growth, not two which would be a recession, the economy will remain top topic and they won’t even discuss immigration in specific terms.
Then after the election, this Congress that has nothing to lose and won’t face reelection for two years if at all for those not returning, will pass whatever they want and Bush has already indicated he will sign it as long as they “say” they will secure the border.
Jan Paul
I don’t disagree that there’s some “bait and switch” stuff going on here. In fact, I think there probably is.
It’s important to remember that this is an election year and, as such, it’s normal to expect the incumbents to try and make things as rosey as possible. I’m not saying things are rosey, but I don’t think they’re as bad as many think. Remember, the traders and hawkers on Wall Street are not CEOs or CFOs. They’re regular people working to make a living.
I still believe the average person will see the light and make the corrections necessary to keep the Nation on form footing. I suppose we shall see.
I still believe the most important issue facing the Nation is sovereignty and all the smoke, mirrors, bait, switch, main stream media tripe, etc. simply won’t change that view.
Sgt Mac
The biggest issue is we are spending money we do not have!
Sgt. Mac said
I still believe the most important issue facing the Nation is sovereignty
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Absolutely
Not only do we have the borders too open but, we have 1/2 those that are here illegally that came here legally. Securing the border will not stop the problem, just slow it. They come as visitors and students and legal temporary workers and then stay.
Also, international bodies now rule many of our trade practices. We are no longer sovereign in our ability to decide what tariffs or restrictions or other things we can or can’t do in many situations. WTO, NAFTA, CAFTA are more “treaties” than trade agreements. The reason was a Treaty requires a super-majority to approve while a trade agreement only requires a simple majority.
Then add the debt. We now are borrowers from China, Russia, Korea, OEPC, Japan who can make demands on us to get us to keep loaning us money, when it comes to trade. That is why, when Paulson and others have gone to China, they have gone “begging” and found that China basically tells them that they will do what is good for them and we need to solve our own problems.
They are right, but, we have so screwed up or economy with debt, that we have to beg our “bankers” for help.
John – you have a keen sense of the obvious.
Jan Paul – In any endeavor where there are several issues working at one time, it is far better to tackle them one at a time. Even in personal finance issues.
I don’t know if you’ve ever heard of a debt reduction system called the “power payment” system so I’ll give you the short version;
A person lays out all credit debt excluding a mortgage; for example,
DEBT BALANCE MIN PAYMT INT%
CAR 20,000 400 5%
VISA 6,000 150 15%
MC 4,000 125 18%
Sears 5,000 75 20%
and so on……
The way this works is to eliminate one debt at a time based on interest rate. In the above example, the plan would be to pay off Sears, Master Card, Visa, and the car in that order by use of a “Power Payment.” The consumer continues to make MINIMUM payments on ALL other crdit, but doubles the payment on the highest interest item until it’s paid off. In this instance, the consumer would pay Sears $150 per month until the debt is paid. Next, the consumer adds the $150 he’s been paying to Sears to the minimum payment of the next highest interest rate (Master Card in the example) so now he’d be paying $275/mo (125+150) per month until that, too, is paid off. He’d repeat this until all debt is gone. At that point, the consumer has the option of continuing on with the mortgage if he so chooses, or save the money he’s been using on credit and interest.
I believe this is the way our Congress should be dealing with the debt issue. Granted, the numbers are far higher, but the principle is the same. Attempting to solve immigration, healthcare, entitlements, war funding, foreign aid, et. etc. all at once gets nothing paid off. The key to fiscal responsibility is judicious use of credit. Our Nation has become a Nation who relies on credit for everyday purchases. Your point about saving is right on. The key to this plan being successful relies on the discipline necessary to NOT use the credit cards or loans after you’ve paid them off. We get people re-finacing a home and using the proceeds to pay off other debt and six months later they have the debt right where it was before the re-fi.
The same principle applies to government. We need to prioritize what we owe, and use a power payment to pay off the debt. In my view, that’s the road to fiscal responsibility.
Yes, I am very familiar with that plan.
Consumers are having trouble refinancing because the home is worth less than what they owe. Those who had equity borrowed it and now with dropping home prices they can’t get refinancing for what they owe. This is true on even “prime” loans with a fixed rate. They owe more than they own.
The government has another problem, inflation. There is no way to cut spending. Inflation causes mandatory spending increases every year even with underreporting of inflation. Defense? I doubt you will see much cut there even with a change in President. Education? Nope, both are calling for more, not less.
Pork? It is small in comparison to the budget and required to keep state economies going in many cases. States are in deep trouble now and are demanding much, much more federal aid in “pork” and designated spending on the decaying infrastructure.
There is nothing the Federal government can do to reduce spending without massive, unpopular reforms as long as voters are demanding more spending and more programs and more aid for their states.
But, I think the Government can “inflate” an illusion of growth and prosperity over the next few years with massive deficit spending and increasing debt. Both parties, right now, are admitting they have no intention of controlling the deficit or debt during this period of “stimulus.” Since the “stimulus” on infrastructure, if granted, will go on for years, you can forget about any hope of reducing national debt and none of them are really saying they can do anything for years. But, it may delay the recession for years if they haven’t already waited too long.
Jan Paul – thought this would interest you…..
“We’re so used to Democrats pushing tax hikes as the answer to all of America’s problems that we were taken aback to find the following words buried in Pelosi’s release on the stimulus deal: ‘Economists estimate that each dollar of broad tax cuts leads to $1.26 in economic growth.’ Gee, that sort of sounds familiar. It’s almost, though not quite, like what the much-reviled supply-side economists have been saying for, oh, 30 years or so. Pelosi, and other Democrats now suddenly touting tax cuts, may be on to something. We might demur on the notion that all tax cuts must be ‘broad’ to be effective. Evidence really lies more strongly with giving tax cuts to those who would start new businesses or expand old ones. But it’s refreshing to hear a Democrat admit the obvious—that tax cuts work. It’s no secret that high tax rates act as a deadweight on the economy by creating absolute losses from which no one gains. Martin Feldstein, head of the National Bureau of Economic Research, estimates that a $1 tax hike costs the economy 76 cents in output. That explains why the economy jumps each time there’s a tax cut.” —Investor’s Business Daily
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Backwards economics: “How do we stimulate the economy to prevent or shorten a recession? One way would be to repeal the Bush tax cuts two years early, in 2009.” —Len Burman, director of the Urban-Brookings Tax Policy Center, writing in The New York Times
Well, the Fed cut rates 1/2 point and they may stimulate with hundreds of billions. That means massive borrowing and deficits.
However, a tax cut, that in the short term would decrease tax revenues would grow them later. The problem I see is not tax rates as much as compliance costs for business.
A simple tax code and a reasonable tax rate would dramatically increase tax revenues while lowering prices and increasing our buying power.
A cut in corporate tax rates is the best longer term solution IF combined with a tax reform package.
That will help the business community and even help with wages. What it won’t help with is people who borrow too much. We have to somehow, take advantage of any “boom” this government action creates and maintain, but not increase personal spending, pay down debt, invest so we have additional income from investing like foreign nations that loan us money are doing, and get our heads above water as individuals.
Government will have to be corrected at the city and state levels too. The Fed will have to almost totally reform. There are solutions. We just need leadership and voters who will use them.