The Briefing Room
General Category => Politics/Government => Topic started by: pjohns on October 12, 2013, 12:11:51 am
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The Dick Morris haters (as regarding which, there is surely no paucity) will doubtless recoil; but I believe that Morris has some useful suggestions for the GOP, as regarding both the partial government shutdown and the upcoming debt-ceiling battle:
1. End the shutdown immediately by passing a Continuing Resolution to fund the government EXCEPT that the subsidy lawmakers get for health insurance should be ended. The public will applaud this and God grant that Obama is dumb enough to oppose it!
2. Agree to the six week debt extension but demand in return $70 billion of spending cuts (dollar for dollar with the debt increase) AND demand that Treasury Secretary Liu commit to prioritizing the use of tax revenues to pay debt service interest in the event we bump up against the debt limit ever again, ending the risk of default.
3. In the long term debt talks, demand a dollar for dollar cut in spending for each increase in borrowing. And seek:
a. An end to the Payment Advisory Board in ObamaCare, the so-called death panels. Obama hasn't even appointed it yet.
b. Repeal of medical device tax.
c. Keystone pipeline approval.
4. Let ObamaCare die of its own troubles. Very few are signing up and the system can't work without many more signups. Let it unravel on its own.
Very good advice, in my opinion.
Oh, here is the link: What Republicans Should Do - DickMorris.com at DickMorris.com (http://www.dickmorris.com/what-republicans-should-do/)
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The government is like a hydra, kill one head and two will grow back.
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Personally, I hope they go past the limit extension deadline and force the government to live on its revenues and stop borrowing more. Then the budget negotiations will be truly meaningful. And, no, it will not cause a recession. Quite the opposite.
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Personally, I hope they go past the limit extension deadline and force the government to live on its revenues and stop borrowing more. Then the budget negotiations will be truly meaningful. And, no, it will not cause a recession. Quite the opposite.
I'm with you 100%.
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Personally, I hope they go past the limit extension deadline and force the government to live on its revenues and stop borrowing more. Then the budget negotiations will be truly meaningful. And, no, it will not cause a recession. Quite the opposite.
:amen:
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Personally, I hope they go past the limit extension deadline and force the government to live on its revenues and stop borrowing more. Then the budget negotiations will be truly meaningful. And, no, it will not cause a recession. Quite the opposite.
I agree.
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Personally, I hope they go past the limit extension deadline and force the government to live on its revenues and stop borrowing more.
In theory, I would agree with you.
As a practical matter, however, it seems very doubtful that the federal government will learn to live within its means anytime soon; so a reduction in the annual borrowing, coupled with a few other sweeteners (specifically, an end to the proposed panel that could very easily lead to the end of some people's lives; a repeal of the tax on medical devices; and the go-ahead for the Keystone Pipeline) would amount to a pretty good deal, it seems to me...
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Sorry - I am a little slow this morning.
If you hold out for a dollar for dollar reduction in spending to match the increase in the debt limit - why would you need to increase the debt limit in the first place?
If I give you $5 and you save $5, you didn't need the loan in the first place.
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Sorry - I am a little slow this morning.
If you hold out for a dollar for dollar reduction in spending to match the increase in the debt limit - why would you need to increase the debt limit in the first place?
If I give you $5 and you save $5, you didn't need the loan in the first place.
That's not the way they count in DC. Usually, the cuts are for a period of many years while the debt increase is cash they get right now.
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Sorry - I am a little slow this morning.
If you hold out for a dollar for dollar reduction in spending to match the increase in the debt limit - why would you need to increase the debt limit in the first place?
If I give you $5 and you save $5, you didn't need the loan in the first place.
That's not the way they count in DC. Usually, the cuts are for a period of many years while the debt increase is cash they get right now.
That, unfortunately, is the way it works. Essentially it's like going to a bank and asking for a loan where the bank gives you $1,000 today, and you repay the bank $100 a year over $10 years.
If you engage in very simple accounting that fails to take the time value of money into account, then that seems to be an even trade; however, once the time value of money is taken into account, this deal becomes very unfair to the bank. At even a very low discount rate of 2%, the present value of $100 a year for 10 years is about $820. (Aside: one of the points of discounting back from the future to the present is to compare equal values to equal values - $10 today is worth more than $10 in two years, both because of the postponement of the enjoyment of spending that $10, but also because inflation erodes the value of that $10).
If the bank were to accept your proffered deal, it would be giving you $1,000 in exchange for you giving it $820; essentially, the bank would be giving you $180 dollars "for free." Pump that discount rate up to 3% and the present value of that 10-year payment stream drops to $744; at that rate the bank is giving you $256 "for free" - that's more than 25% of the loan you're asking for.
No sane lender would ever do that.
Unfortunately, in the case of Congressional debt "negotiations," the lender isn't irrational, the lender isn't even present to fend for itself. This dollar for dollar fiction is essentially tantamount to future taxpayers lending the current Congress $1,000 today in exchange for that 10 year repayment scheme. Unfortunately, this sort of thievery takes place because there isn't anyone there to negotiate on behalf of those future taxpayers; in the case of your proffered loan, the bank is there to negotiate on behalf of its future shareholders/owners and would therefore reject your offer out of hand - you might even get laughed out on your keister.
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Thank you both.
Guess I'll just never get it. **nononono*
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Thank you both.
Guess I'll just never get it. **nononono*
Get what?
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Get what?
The clap. blij26
:silly:
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If you hold out for a dollar for dollar reduction in spending to match the increase in the debt limit - why would you need to increase the debt limit in the first place?
The increase in the debt ceiling would be for the purpose of the Congress's paying for spending that has already been approved; whereas the dollar-for-dollar reduction would be intended to apply to future spending. And this (one would hope) would signal an end to so-called "baseline budgeting," which simply assumes an increase in spending each year (and counts any decrease in that projected increase as a "cut")...
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The increase in the debt ceiling would be for the purpose of the Congress's paying for spending that has already been approved; whereas the dollar-for-dollar reduction would be intended to apply to future spending. And this (one would hope) would signal an end to so-called "baseline budgeting," which simply assumes an increase in spending each year (and counts any decrease in that projected increase as a "cut")...
One would hope!
It is instructive to note that in my experience I have found base line budgeting to be used only by government entities. Private business uses instead what we call zero based budgeting where each line item of the budget must be rejustified ever time a new budget is put together.
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One would hope!
It is instructive to note that in my experience I have found base line budgeting to be used only by government entities. Private business uses instead what we call zero based budgeting where each line item of the budget must be rejustified ever time a new budget is put together.
I managed budgeting in a major multi-national firm over several years. What ever the process, it is only as good as the people that have power and authority to make decisions.
In ZBB the same old justification can be made, and approved year after year, for an outdated, overly costly department, process, etc.
I recall the motto of a top level manager (managed much of the Alaska Pipeline engineering/construction):
"...what are we doing?....why are we doing it?...and when are we going to stop?"
It is the stop part that is most difficult to bring about. Those involved will cling to their jobs, paychecks, perks, bennies, power, status, etc.
In government the entire system is set up to help them, with unions, work rules, lawyers, etc.
I remember how frustrated top management became, about the centralized computer function. In the end they decided to simply outsource it. They transferred employees to a new entity, chartered that entity to seek other business, and to behave strictly and solely on a profit basis.
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The increase in the debt ceiling would be for the purpose of the Congress's paying for spending that has already been approved; whereas the dollar-for-dollar reduction would be intended to apply to future spending. And this (one would hope) would signal an end to so-called "baseline budgeting," which simply assumes an increase in spending each year (and counts any decrease in that projected increase as a "cut")...
How can Congress approve spending without having the money to pay for it before hand?
Sorry, these are really basic questions, but I am very ignorant about financial stuff beyond the very basics.
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How can Congress approve spending without having the money to pay for it before hand?
Sorry, these are really basic questions, but I am very ignorant about financial stuff beyond the very basics.
Congress has three sources of money: stealing (taxes); borrowing and counterfeiting. Whatever it can't steal it borrows and counterfeits. Its only constraint is the possible political repercussions from the American people, but our two-party system assures that is no constraint at all.
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How can Congress approve spending without having the money to pay for it before hand?
It shouldn't be able to do so.
Unfortunately, "baseline budgeting"--according to which, a certain increase in spending is built into the system, for every government program--has ensured that our national expenditures will exceed our national income...