Budget Mess Military Edition

[El Karacho1647545492]

If we allow everyone to have personal surface to air missiles, we won't need the military. 2nd amendment says its ok.

 

 

economy solved.

[Tractor]

If we allow everyone to have personal surface to air missiles, we won't need the military. 2nd amendment says its ok.

 

 

economy solved.

 

Yeah pretty much.

[iwishiwascool]

Pretty sure we have, which may be why I had full confidence you could provide an intellectual debate. (Not sure if my desire for one last night was spurred by boredom, the few drinks I had, or my fear for humanity after reading every imstock2 thread)

 

I barely remember writing that. I had a few after an 80 hour work week and apparently used my leisure time to debate economics.

 

 

 

This is where I might be over my head.....

 

Yes I believe SURPLUS liquidity relies on central bank holdings.

 

 

It does but it's fairly irrelevant in our context. When I said surplus of liquidity, I didn't mean the economic term "surplus liquidity" referring to central bank holdings. I meant excess liquidity in the market; that inflation is caused by too many dollars chasing too few goods or investments - a lack of slack in the market. It is usually characterized by very low unemployment and irrationally low interest rates (at first). Obviously, we aren't there. In fact, the reason for QE 1, 2 and 3 is to battle deflation; the enemy of western civilized banks. Deflation results in less tax revenue, that wouldn't be great right now.

 

This article highlights many of the reasons behind it, though I don't agree with his conclusion: http://www.forbes.com/sites/greatspeculations/2012/09/19/demographics-to-blame-for-inescapable-deflation/

 

I subscribe to a mix of MMT and Krugman economics, heavier on the latter than the former. That makes me fairly liberal in my worldview but it's better than subscribing to the Austrian principles that are getting annihilated in the European experiment.

[iwishiwascool]

Like I said, more in the mood last night. Just kind of blah today.

 

Likewise. I didn't realize it would be 70' here today. I'm going to the beach.

[iwishiwascool]

Ok, my wife wasn't ready to go yet.

 

Money is incredibly cheap right now. Let's say you own a business, growth is stagnating, and you're capital infrastructure (copiers, computers, service trucks, whatver) is falling apart. You have two options, immediately start slashing expenses knowing that each percentage you cut will cut your revenue accordingly. Or you can take advantage of near zero interest rates, swipe that credit card, and make capital investments that will increase your revenue long term.

 

The US is in a similar place. The nasty truth is that government spending is a function of GDP each and every dollar cut will be reflected as a contraction. So we can cut spending when demand to hold our debt is high (so high that rates of return are LESS than rate of inflation) and send ripples of contraction throughout the economy reducing growth even more. OR, we could do another round of stimulus (in useful sectors infrastructure, education and technology) increase the debt a bit more for a long term increase in tax revenues. Once the slack is taken up and the jobless rate decreases we will see inflation (finally) and it will be time to increase rates.

[Big Chief2011647545501]

Thomas Jefferson said it best, “The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” By cutting/controlling spending to programs such as welfare, unemployment, tax subsidies for most research/businesses, etc. we can turn the debt around. I dont see why the government, schools, etc. cant be run more like a business. We have X income and Y costs, control costs and you wont be in this mess. If people want good schools they will pay for them instead of forcing people to increase their taxes every other quartet. No one would ever spend money to save money that's just illogical thinking. When we keep raising the debt ceiling, congress views it as we have x amount more to spend instead of trying to reign in spending. Its criminal to think this is what we are laving for future generations. The entitlement programs and class warfare that is going on needs to stop. If you can't afford a kid, don't have one. If you can't afford college, don't go. People should take some personal responsibility in their lives and not allow the government to act as a safety net. Its their to maintain order and peace not to act as your guardian angel.

[iwishiwascool]

Thomas Jefferson said it best, “The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

 

Except that he never said that. .

 

http://www.monticello.org/site/jefferson/democracy-will-cease-to-exist-quotation

 

More later, I have to wash the sand off

[10phone2]

Ok, my wife wasn't ready to go yet.

 

Money is incredibly cheap right now. Let's say you own a business, growth is stagnating, and you're capital infrastructure (copiers, computers, service trucks, whatver) is falling apart. You have two options, immediately start slashing expenses knowing that each percentage you cut will cut your revenue accordingly. Or you can take advantage of near zero interest rates, swipe that credit card, and make capital investments that will increase your revenue long term.

 

The US is in a similar place. The nasty truth is that government spending is a function of GDP each and every dollar cut will be reflected as a contraction. So we can cut spending when demand to hold our debt is high (so high that rates of return are LESS than rate of inflation) and send ripples of contraction throughout the economy reducing growth even more. OR, we could do another round of stimulus (in useful sectors infrastructure, education and technology) increase the debt a bit more for a long term increase in tax revenues. Once the slack is taken up and the jobless rate decreases we will see inflation (finally) and it will be time to increase rates.

 

I do agree with you that we are in the exact position that you described. The problem that I see now is that increasing the tax rates will lower the profits being pushed back into the economy and more into banking accts for individuals to sit on. Our economy did not fall apart when the military went through contraction in the 90's.

 

I can see the benefits of a stimulus program to focus on building the infrastructure of our country, but to keep spending for the military at the same levels when we are no longer holding two battle fronts is money being wasted that could be spent on other aspects of our country, like infrastructure. If a stimulus program is enacted, why not offset the spending with cuts to welfare, unemployment, etc so individuals are forced to move on?

[iwishiwascool]

I do agree with you that we are in the exact position that you described. The problem that I see now is that increasing the tax rates will lower the profits being pushed back into the economy and more into banking accts for individuals to sit on.

 

You are exactly right, raising taxes in a downturn is equally as dumb as cutting spending. Though the impact was limited to the highest income earners whose consumption will not be dramatically reduced (if is declines at all).

 

I can see the benefits of a stimulus program to focus on building the infrastructure of our country, but to keep spending for the military at the same levels when we are no longer holding two battle fronts is money being wasted that could be spent on other aspects of our country, like infrastructure. If a stimulus program is enacted, why not offset the spending with cuts to welfare, unemployment, etc so individuals are forced to move on?

 

We agree. The real reason we are where we are was because we engaged in two unfunded wars while maintaining the lowest tax rates in 30 years. You can blame poor people all you wan't but they are just the low hanging fruit; scapegoats that don't have the political influence to defend themselves and show that politicians doing the pointing are doing so acknowledging that it was the wars that they authorized and sold to the American people that caused this ongoing financial "crisis". That is the only class warfare that is happening.

 

You don't enact equal amounts of cuts to meet stimulus spending because you are then contracting the economy in the exact proportion that you are expanding it. You might as well do nothing.

 

It's not that Republicans are stupid and Democrats have all the answers, or vs. versa. They each have half of the puzzle but are too married to ideology to see the whole picture. Yes, tax cuts work to stimulate the economy. Most economic models suggest they work exactly as well as stimulus spending. The problem is that Republicans only believe in cutting spending when Democrats are in office. Dick Cheney famously said "Deficits don't matter" when he had the steering wheel. Democrats are incapable of marketing the reality that austerity is fucking stupid in an anemic economy. Classic republicans who understand that deficits indeed don't matter ONLY in recession and economic downturns are so afraid of the Tea Party voters that they pretend they hold the same strange view that national debt is some sort of moral hazard.

 

So the solution is to cut middle class taxes and/or inject stimulus capital (that impacts the middle class) and don't fucking worry about deficits for a year. When we are seeing 4-5% growth again we can slowly make changes to military and so called entitlement spending to reign in the deficit to the appropriate trajectory.

[10phone2]

I do agree that both republicans and democrats have gotten us into this shit mess.

 

I could be wrong, but the tea parties goal is to reign in gov spending, lower taxes, and put the money in the pockets of the citizens so they can decide how to move forward. That in combination with stimulus programs could possibly be the game plan and I could possibly be dead wrong.

 

My big concern is that gov will get so big that we are basically working to maintain their spending and lose any shred of personal freedoms that we have left. Yes I know it's simpleton approach.

 

Reigning in the welfare/unemployment programs can start now without an impact for another year or two. Current people in the program will not be effected and those coming in will be under different rules that are not completely gutted, but lets say 5% reduction over a period of time for each wave of new applicants. Getting people motivated will ultimately decrease the numbers who live in poverty, increase those who are contributing to our country, and increase those paying taxes.

 

The sad thing is there will likely never be any decent deficit reduction due to both parties use gov spending to secure their votes in their states.

[2011SVT]

 

I can see a problem...

 

Of course, absent some significant amount of entitlement reform - cuts to discretionary programs including defense alone won't get the job done.

[Not Brian]

Gov workers get one day off a week for 11 weeks. Most contractors (myself included) just got notice today that we get the same. Four-day work weeks for the next three months woo

[dakotart]

Some workers are getting all of their days off in a row so they can file for unemployment.

http://money.cnn.com/2013/05/29/news/economy/furlough-unemployment-benefits/index.html

[JuicedH22]

Some workers are getting all of their days off in a row so they can file for unemployment.

http://money.cnn.com/2013/05/29/news/economy/furlough-unemployment-benefits/index.html

 

Perfect... Rob from Peter to pay Paul....

 

fucking stupid.

[LJ]

Perfect... Rob from Peter to pay Paul....

 

fucking stupid.

 

Depending on the state system, the employer, in this case the .gov, pay an unemployment premium for every employee. Technically, that unemployment money is "their" money. That's why there is a certain rolling calculation for your unemployment benefits in Ohio, because of the amount of premium's paid.

 

Just like people bitch about seasonal workers taking unemployment, but they pay a higher premium to cover constant layoffs.

[Not Brian]

Today is the first furlough day. It's eerily quiet around here.

[buelliganx1]

Well you can't blame the workers, not getting paid for 11 days is a big hit. But I laugh at the government that thinks it will somehow save money doing this. Not only are government workers incredibly creative when it comes to squeezing all they can out of the government but just think of the work hours waisted not doing their job while they figure out how to save their pay. Oh and I'm a government worker so I've done my fair share of this.

[Not Brian]

Yep. Management is telling their workers to make sure they don't get all their work done, to show this is doing more harm than good.

[zeitgeist57]

Wow.

 

11 days off = .gov making "money-saving moves" that look good on a spreadsheet or a by-line about getting rid of .gov waste.

 

Mgmt sand-bagging production = systemic failure in the system.

 

[ShoMeSomeFun]

They didn't cut the days I work they cut my pay and yes 20% is a lot. Came out to a 30k pay reduction for me, but unlike everyone else Im not quitting. You have to fire me to get me to leave the desert.

[1fast5gp]

Wife said there were plenty of DOD departments that were allowed to work OT have put in a ton of over time in the past few weeks to make sure they don't get behind during the furlough. LOL Yes, this is saving us money!!!!!!! There are plenty of worthless federal employees that they can get rid of instead of furloughing everyone. But it is so hard to get rid of someone that works for the federal government, managment just seems to pass these bad employees around because no one wants to put the effort into getting them fired.

[wagner]

I really need to get one of these jobs, I work to hard right now...

[Mojoe]

HI. I'm posting from a GOV laptop. Just wanted to check in so you see your $$$$$ at work.

 

Here's the thing, there are some slack jobs in the GOV. I have a crusty old civilian who works with us, who should just be at the VFW. I have no idea what he does, except take smoke breaks.

 

And if you were upset with my opening post, I'm just poking the bear. FYI, I will not waste your $$$$. I'm on my lunch break, so I thought I would post. My day started at 0530 and will run to about 1900 tonight. I got shit that needs done, so I stay and do it. Which, I get to do, being in uniform and not restriced by work hours. I will tell you that the MEPS station has been hit by this and it sucks for anyone trying to get in the military right now. it just takes a little more planning and understanding to the process. Side affect being, it supports the reduction in force. Meaning, less service members to pay and freeing up funds.