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Thread: Geithner To Ryan On Debt: We Don't "Have A Definitive Solution To Our Long-Term Probl

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    How's that Hopey Changey thing workin'? C.Puffs's Avatar
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    Default Geithner To Ryan On Debt: We Don't "Have A Definitive Solution To Our Long-Term Probl

    http://www.realclearpolitics.com/vid...m_problem.html



    "House Budget Committee Chairman Paul Ryan and Treasury Secretary Tim Geithner spar over debt. Transcript below:

    Ryan: Here's the point, if you'll allow me. This is your time, so we'll just take a long time. Here's the point. Leaders are supposed to fix problems. We have a $99.4 trillion unfunded liability. Our government is making promises to Americans that it has no way of accounting for them. And so you're saying yeah, we're stabilizing it but we're not fixing it in the long run. That means we're just going to keep lying to people. We're going to keep all these empty promises going.

    And so what we're saying is, in order to avert a debt crisis -- you're the Treasury Secretary -- if we can't make good on our bonds in the future, who is going to invest in our country? We do not want to have a debt crisis. And so it comes down to confidence and trajectory. Do we have confidence that we're getting our fiscal situation under control, that we're preventing the debt from getting at these catastrophic levels?"


    "Geithner: That's right. We have millions of Americans retiring everyday, and that will drive substantial further rise in the growth of healthcare costs. [*******#ff0000]We're not coming before you to say we have a definitive solution to our long-term problem. What we do know is we don't like yours[/COLOR]."

    Nice. Apparently no solution is preferrable to a Republican one.

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    Amiable Scoundrel Corrupt's Avatar
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    Quote Originally Posted by C.Puffs View Post
    Nice. Apparently no solution is preferrable to a Republican one.
    What's the Republican solution?

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    The political Special Olympics continue

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    No Good Bloody Seppo California Joe's Avatar
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    Not even Republicans liked Ryan's budget.

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    Quote Originally Posted by California Joe View Post
    Not even Republicans liked Ryan's budget.
    That's my point. No solution yet might be better than a downright terrible one.

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    Quote Originally Posted by Corrupt View Post
    That's my point. No solution yet might be better than a downright terrible one.
    I think both sides are waiting for a painless solution and their isn't one. So I'm guessing they'll keep kicking that can until the house of cards collapses.

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    Another way of saying it puffs, is that they wasted another year (an election year) thinking that down the road someone will make the tough choice.

    Voters won't fix this in 2012. They always send Capitol Hill the mixed message of "don't cut my handouts/entitlements and by the way don't raise my taxes."

    The administration should have taken some bites each of the last 3 years. Faced the fact that a combination of cuts in the big entitlement programs with tax increases not just on the rich would nibble away some of the deficit.

    They didn't, they wanted to be more popular and say that they were handing out stimulus (or call it benefits), so that they look better for re-election.
    Campaigning.....more than worrying about debt and fiscal issues.

    The administration kicked the can down the road again. It wants four more years. That's business as usual.

    but voters will still send their mixed message in 2012 to Congress. So it will take a stronger WH leader to make a dent in the deficit and eventually the debt. Whoever that may be.

    (Personally, I would like Pres. Obama to stay. And deal more seriously with the issue for a couple more years)

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    Quote Originally Posted by California Joe View Post
    Not even Republicans liked Ryan's budget.
    Because Republicans just as much as Democrats don't like to confront reality and tell their constituents that the gravy train is over, it always has been.

    Being my Congressman, I got to talk with him at Pancake Day. I don't think he was expecting as much genuine support as he got. At least, people here understand the stakes.

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    toad, if the President has not dealt seriously with the problems facing this nation in the last three years of his term, what do think he is going to actually do in another four? (to be plain, it was never his intention to solve this or any another problem the USA faced. From the beginning it has been about "fundamentally" changing the nation. And that is what he has been doing to a tune of 5 TRILLION dollars!)
    As C.puff mentioned there is no painless solution, everyone and every facet of the Fed Govt has to go underneath the axe. (just cutting in the DoD is not going to suffice)

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    Ryan's solution would hack approx. 4-5% of GDP in spending, plunging the country into another recession. Income from taxes would plummet, as would market confidence. The economy would stagnate as Europe and Asia would no longer resort to stimulus measures. 10 years of economic depression would be your best bet.


    Jesus people, of course there's no long term solution. With the situation as volatile as it is, there is no such thing as a long term solution.

    But I assume you're all economics Ph.D's and know better.

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    Senior Member Maximmmm's Avatar
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    And anyway the whole tea party/little government group is a bunch of stupendous hypocrites. Most of the people polled from those groups accepted medicare/medicaid, tax breaks, exemptions and all sorts of gov gifts while screaming like a bunch of morons that they don't suckle on the federal government's tit and refuse to.

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    Quote Originally Posted by Maximmmm View Post
    Jesus people, of course there's no long term solution. With the situation as volatile as it is, there is no such thing as a long term solution.

    But I assume you're all economics Ph.D's and know better.
    Yeah, there's a plan. Stick your head in the sand and give up without any honest effort. But hey, you're a big shot Ph.D and "know better" right?

    Quote Originally Posted by Maximmmm View Post
    And anyway the whole tea party/little government group is a bunch of stupendous hypocrites. Most of the people polled from those groups accepted medicare/medicaid, tax breaks, exemptions and all sorts of gov gifts while screaming like a bunch of morons that they don't suckle on the federal government's tit and refuse to.
    Says the Canadian teenager.

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    Senior Member Maximmmm's Avatar
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    Quote Originally Posted by C.Puffs View Post
    Yeah, there's a plan. Stick your head in the sand and give up without any honest effort. But hey, you're a big shot Ph.D and "know better" right?



    Says the Canadian teenager.
    Say what you want, I took 4 years of economics classes and have been reading magazines such as The Economist since I was a thirteen year old. I've lived in Russia, Europe and currently Canada. I'm no Ph.D, I don't claim to be, but I sure as hell figure that I'm quite informed.

    If you want a historic example to illustrate my point, look at the deficit reduction of 1937, with both parties urging Roosevelt to slash debt. So he did, and what happened? the country returned to recession, only stopped by the start of the second world war.

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    Quote Originally Posted by Maximmmm View Post
    Say what you want, I took 4 years of economics classes and have been reading magazines such as The Economist since I was a thirteen year old. I've lived in Russia, Europe and currently Canada. I'm no Ph.D, I don't claim to be, but I sure as hell figure that I'm quite informed.
    Fair enough. But how does a country keep going further and further into debt indefinitely without ever having to pay the piper?

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    Senior Member Maximmmm's Avatar
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    Quote Originally Posted by C.Puffs View Post
    Fair enough. But how does a country keep going further and further into debt indefinitely without ever having to pay the piper?
    Well from what I know and believe this is an unprecedented problem that needs a lot of solutions that combine ideas from both left&right. Therein lies the problem. Political parties nowadays are opposed to even looking at each other. Many veterans of 90's and 80's Washington politics have expressed surprise at how members of opposing parties no longer meet, dine together or go out to share some ideas.
    That is the first underlying problem

    The second problem is the nature of the deficit crisis.
    The Keynesian economic model, on which deficit spending is based, assumes that a massive investment during a recession and the subsequent deficit will be removed once the economy starts growing. This is a great model, since while companies recover, the gov picks up the slack and pays off all debts once the companies are able to drive the economy again.
    This however has not been the case for decades. Deficits have grown under each president, even as the economy could have handled a reduced government. Thus the central idea of deficit spending "no deficit in good times" was blatantly violated.
    This is not only the case in the US, the EU's deficit problems come from the exact same violation of their economic dogma.

    So now to summarize our options:
    1. Spend more: This is the classic Keynesian model, and while it may have worked well if previous governments weren't all a bunch of bloody pillocks, the nature of the investments would be too much of a drag on the deficit. What I mean is that temporary investments like the solyndra debacle are actually less negative for the economy than long-term medicare commitments for instance.
    2. Cut everything: In a minor downturn this would definitely have an effect on recovery. The central issue is that cutting Government spending will do several negative things: It will shock markets, thus freezing up liquidity (loans) crippling the same companies that this plan wants to help. Also this would return the country to recession and drag the world along with it, as the economy cannot sustain a recovery while losing billions of gov investment.

    My belief is that we need a very comprehensive program.
    Step one would be to outline a massive package of much needed reforms. Closing tax loopholes, ending most subsidies, cutting unneeded red tape, etc.

    Step two would be another 500$ billion dollar stimulus. This would increase the deficit, but the effect would not only reassure markets of the Government's commitment to the economy, but also prompt them to invest their massive cash reserves. (since they would be more sure of the economic future)

    Step three would be a plan to hack away billions of spending once the economic recovery reaches 3-3.5% a year. This would be a sustainable recovery, that could handle a government slowly reducing its massive footprint.

    The debt is certainly massive, but does not need to be paid off in a day, if a 20-30 year plan is outlined, the US can handle 2-3Trillion more on its debt load. This isn't me talking, but an assessment from leading financial groups.

    That is my opinion, from what I understand of economics and the situation. Sadly it won't happen since all politicians are absolute pillocks and won't work together.

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