Well, since those numbers are largely fudged by a government who controls pretty much everything...those numbers never really existed.
also if the government admits to the "REAL" inflation rate then think of all the COLA adjustments that the government has to make to pay all the civil servants that work for the federal government?
yeah but only electronics....how about car repairs or transit fares? How about property taxes and insurance premiums? How about air travel? You see how many cell phones do you buy or computers compared to tanks of gas or loaves of bread?
The real inflation rate also impacts interest rates. A 10% increase in SSI & Medicare is a $14B increase, changing interest on the debt from 1.5% to 10% is $1.1T increase.
actually its all of the above....higher interest payments, higher pay increases for pensions, more money for civil servants pay, and a host of other things.....the government is saving billions in lying to the public!
long term yes as many factories producing in china would come back home as it would be uneconomic to ship things from there....but there would still be at least 5 years of pain!
The government would lie to us? I'm crushed...... To zero out the deficit, we need to increase taxes 50%. To pay off the debt over 10 years, we need to increase taxes another 50%. To fund Medicare and SSI, we need to increase payroll taxes by who knows how much. All this talk about protecting the children - and we are going to load them with taxes that would make Europe gag, just to maintain the status quo.
Not really. If one goes back to 2000 when the Budget was balanced and reverse what happened since then would be a good start. Cutting the excess spending since 2000 and eliminating the Bush Tax cut along with some small changes to Medicare and SSI would get us most of the way.
Eliminating all the Bush tax cuts, pulling troups and aid from Iraq and Afganistan, reducing SSI & Medicare to 2000 levels. Not quite. Is there the political will? Even Pelosi voted to extend the tax cut on the rich (her campaign contributors). The Democratic PAC's flood the airwaves with doom and gloom ads when the budget was cut $100B, and most of that was expected reductions. Why was the budget balanced in 2000? Clinton's fiscal genius, or venture capital funded dot.com & tech bubbles that burst just as he was leaving office.
Oh, bless those hard working Chinese who work for peanuts and flood our shores with goods that are made on the cheap and way more affordable and better than the stuff that's made elsewhere. I'd rather have the Chinese as trading partners than adversaries in a war!! The yellow people will bury us, if necessary!
I agree, there is no political will. If there was then Paul would be the Republican nominee. Clinton had nothing to do with the dot com bubble and that was nothing in comparison to the housing bubble in any case. The housing bubble was created by irresponsible Government policy, lack of regulation and so forth. "Those in the know" knew what was happening and what the end result would be. The fed heads claims "we did not know" are bunk.
And, we would have had a budget. Exactly, but the dot.com bubble, and the taxes generated during IPO's, had a lot to do with his magic balanced budget. Government policies added over the last 30 years. Do you think regulators could have figured out the mortgage backed securities, the derivatives, and all the other financial instruments? Why did the rating agencies give AAA to mortgage backed securities with potential defaults? Why did the regulators accept those as AAA, allowing banks to use the AAA leverage factor? Really? They still don't "know". After 60 years, the only agreement we have why the Great Depression ended, is it wasn't Roosevelts policies. That is why regulation usually does more damage creating a false sense of security. "Let the buyer beware", most of this crap would never happen. Even something as apparently innocuous as deposit insurance, keeps depositors from holding bank managements feet to the fire. Who has more incentive to get it right, the depositor that loses their lifes savings, or a regulator that get paid even if the bank fails? (have any regulators been fired for cause?)
The version of the Credit Default Swaps you are talking about weren't even around during the 1920s. CDSs came about in the 1990s and was created by Blythe Masters at JP Morgan in the 1990s when Exxon was dealing with the aftermath of the Valdez. She's currently at SIFMA. Actually it's very complex as there are many forms of an MBS. You can have a CMO (Collateralized Mortgage Obligation), SMBS (Stripped MBS) which comes in an IO (Interest Only) or a PO (Principal Only) and so on. Out of those you have different portfolios ( different % of Prime, Alt-A, Subprime, Jumbo in the portfolio) and then out of that you can't have traunches. Sorta right. It's complex from the start because it's the MBS portfolios that set the tone. The CDS is standard practice and is generally used to lower risk. Removing the the ability to lower risk would have let to a situation where the Clinton boom and the "Bush recovery" would have never happened. Growth would have never topped 2%. And that's true and wrong. And that's insider trading and his ass should be in Jail but show me a shadow banker that would go to jail for that. Why don't you ask CTFC as it was them that had control over derivatives. Yes, Banks. But the problem here is that Fannie, Freddie, Ginnie and Sallie all had exclusive rights to sell bundles to the public so they could reinvest. The idea of MBS started in a Government Sponsored Entities. But whatever. So Banks were given the same right as the GSEs? who'd a thunk. Signed by Bill Clinton and you are also forgetting Sarbanes-Oxley. Just to let you know only 8 Senators voted no and only 57 Reps voted no. Dodd and Reid voted yes. Wrong! The cause of the Great Depression came from the idea of buying on the margins in which everyday Americans would buy stocks for 10% or less of the real value with the promise to pay it off when sold. So when a few investors in 1929 starting selling, a massive wave of common people started to sell and selling at a loss. Brokers made calls for those investors to pay back, and they couldn't, which forced brokers to cover the losses (at the time Banks and Brokers were one in the same. While at the same time others worried and ran to the banks to withdraw money. Yeah it does. Without CDSs or MBSs the housing prices would have never gone up by 150% over 10 years in some places and sure as hell would have not gone up by 80% as the national average.
Basically right but I think prices would only go up about 50-60% instead of 100%. It would still hurt a lot. No democratic government would pursue such an exchange policy because the voters wouldn't allow it.
