Sleepwalking into debt catastrophe: The thread for tracking the economic unraveling

[oxcoug]

First on our radar from Bloomberg a bit of macro:

http://www.bloomberg.com/news/2012-0...-trillion.html

The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year’s true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.

And then a bit of micro from City Journal:

http://www.city-journal.org/2012/cjc0807sg.html

What is it about California’s Democratic leaders that makes them ignore fiscal reality and put politics above mathematics? Conventional wisdom holds that unions elect these politicians and that the politicians do the unions’ bidding. But in reality, the unions are the legislature. Most of the Democratic leadership in the state assembly and senate comes directly out of the union movement and identifies with the public sector. For these union Democrats, government is primarily a means to improve the financial condition of those who work for the government.

If you're not worried/alarmed, then you do not understand. This is not politics, it is math. And it is math that will destroy every public good on the table and take all of our well-intentioned aspirations for universal health care and leaving no children behind straight to hell.

If there is not leadership that is serious and capable abt handling the debt burden and if the public doesn't adjust itself to the idea of some pain now then there is going to be a collapse that will make 2008 look like a birthday party.

[TripletDaddy]

If there is not leadership that is serious and capable abt handling the debt burden and if the public doesn't adjust itself to the idea of some pain now then there is going to be a collapse that will make 2008 look like a birthday party.

wold you expound on this point? I am genuinely interested, simply because It is one of the few non partisan things that you have ever posted in an otherwise bloated resume of partisan windbaggery.

I don't disagree with your premise here, btw, although "sleepwalking" is a silly word to use. Both parties are acutely aware of the state of the economy. Nobody is getting caught off-guard.

[oxcoug]

It is one of the few non partisan things that you have ever posted i

By your definition the math itself is "partisan" - as both my voting and employment history demonstrate cld care less abt partisan politics. I care very much abt the public and our government acting like grownups and attacking problems in a serious fashion. To date a total of two serious proposals have been produced that aren't bullshitting the debt: Simpson-Bowles and Paul Ryan's.

Both are credible plans.

.
I don't disagree with your premise here, btw, although "sleepwalking" is a silly word to use.

"Sleepwalking" is pretty perfectly applicable - it has now been over three years since the Senate has produced a budget. Giving the state of debt that's a completely indefensible dereliction of fiscal duty.

Meanwhile - the Obama admin has ignored the very sensible recommendations of the debt-busting duo it convened itself and has forced through laws which - far from cutting debt, significantly increase it. They've been coasting toward re-election w/o any serious effort to tackle this problem for well over a year.

As for the point you asked me to expound on, I'll go hyper-micro - the last ten years of my dad's career before retiring were as a Wilson-appointed administrative law judge in CA. His pension for the that decade of public employment is outrageous, esp given that he had already saved prudently for retirement while in the private sector - but of course, he's not going to give it back - it's going to into college and mission funds for his 20 grandchildren (and as of yesterday ONE great-grandchild!!).

As we're seeing more and more, almost EVERY pension in the state of CA is outrageous. And it's killing our home state, one shitty city at a time. Meanwhile over here in NYC Subway operator are retiring in the mid-50s with $75K a year and comprehensive health coverage coming for the remaining decades of their lives.

The "pain" in my view, starts there - deep pension reform that shld be cutting 25-50% off of state, municipal, county and federal pension expenditures.

But as you know - there are a thousand places to trim fat. And we need leadership that is serious about it and campaign to educate the public so they understand why it has to happen.

[TripletDaddy]

I don't know your voting or employment history. I do know your posts and your posts are as I described. They are extremely partisan.

You suggested that the public adapt to the notion of pain now but then admitted that your father has no plans to give back any of his bloated pension. So where is the pain right now?

[oxcoug]

I don't know your voting or employment history. I do know your posts and your posts are as I described. They are extremely partisan.

You suggested that the public adapt to the notion of pain now but then admitted that your father has no plans to give back any of his bloated pension. So where is the pain right now?

If you had been more of a student of my history you'd know I voted for Obama and that I worked for a CA Democrat in Congress. And that I campaigned for a winning D congressional campaign in the state of Utah. I have a long history of crossing lines.

Like I said: Some people must think the math is partisan. Because the math on debt and public has become the defining issue (both practical and moral, IMO) of the global and American political landscape. The Republicans under Bush ignored the math. The Dems under Obama have doubled and tripled down on that dereliction and are now ignoring it in stunning ways - like not submitting a budget for three years.

I believe that the Republicans under new leadership will attack this problem seriously. Mitt Romney's professional history is one of taking deep red debt and moving it to the black - he did it at Bain, he did it at the SLC Olympics and he did it most impressively in MA as Governor. Once in the private sector, once in a public-private partnership and once in the public sector.

No other issue matters like this one does right now - and here we have one guy with a proven track record and the actual economic understanding to approach it.

[Omaha 680]

I don't know your voting or employment history. I do know your posts and your posts are as I described. They are extremely partisan.

You suggested that the public adapt to the notion of pain now but then admitted that your father has no plans to give back any of his bloated pension. So where is the pain right now?

No one is going to give anything back out of generosity. We need politicians to be honest about the challenge and treat us like adults. This is what Chris Christie did in NJ and a similar approach is needed at every level of government.

I have said this in other threads, but the most disappointing thing to me about Obama's tax the rich schtick is not the class warfare aspect, but the dangerous inference that if we just raise taxes on the rich that all our fiscal problems will be solved. This is pure fantasy.

[YOhio]

I campaigned for a winning D congressional campaign in the state of Utah.

Bill Orton? I remember when someone affiliated with Karl Snow's campaign insinuated that he wasn't fit for office just because he was older, single and creepy. Interesting that you crossed party lines to support him.

[oxcoug]

Bill Orton? I remember when someone affiliated with Karl Snow's campaign insinuated that he wasn't fit for office just because he was older, single and creepy. Interesting that you crossed party lines to support him.

Yeah - it wasn't to vote, as I was too young for that - it was a family effort that brought me out to walk neighborhoods as a teenager (confession: I got two BYU games in Detmer's Heisman year out of the deal) against Snow. Who was a total sleazebag.

BTW, my bro is likely to have discussed this story in the class you had with him. He actually played a major role in Orton's win (per Orton at the time, the pivotal role bc he wrote an article that put the spotlight on Snow's shady business history).

No one is going to give anything back out of generosity. We need politicians to be honest about the challenge and treat us like adults. This is what Chris Christie did in NJ and a similar approach is needed at every level of government.

Yes, I forgot to address TD's fairly silly question on this front - the problem is either collectively addressed or not addressed at all. And why would my dad hand back a significant part of his pension to a state legislature that has proven again and again that it will show no discipline in re-allocating it?

[TripletDaddy]

I wasn't asking why he wouldn't hand it back. Of course he wouldn't. But your answer is disingenuous. His impetus for keeping the money has nothing to do with the stewardship abilities of the government. He won't give it back because it is his money and he is a greedy bastard like the rest of us. He wouldn't give it back to Mitt Romney or anyone else, either.

I agree that the problem must be addressed collectively.

[YOhio]

Alan Simpson had a good quote around the time Simpson-Bowles cames out:

"My question to Obama: show me your sacred cow," Simpson said in an interview with CBS News Thursday at the Aspen Institute and the Atlantic's annual Ideas Festival in Colorado.

"Every one of us stuck our finger down our throat and voted for something that hurt ourselves," Simpson said, naming oil and gas as his state of Wyoming's "sacred cow."

"If there's anybody in America who wants to solve this son of a bitch, show me your favorite sacred cow and shoot it," Simpson said.

He's exactly right that both sides need to sacrifice on some platform issues to address the debt crisis. For Republicans its military spending, taxes, and the drug war. For Democrats its entitlements, environment and welfare. None of these cuts can be cosmetic, either. Some drastic overhauls have to occur for a real course correction.

[Omaha 680]

I wasn't asking why he wouldn't hand it back. Of course he wouldn't. But your answer is disingenuous. His impetus for keeping the money has nothing to do with the stewardship abilities of the government. He won't give it back because it is his money and he is a greedy bastard like the rest of us. He wouldn't give it back to Mitt Romney or anyone else, either.

I agree that the problem must be addressed collectively.

Maybe he would vote for people who promised to cut his pension by 50% as a part of a comprehensive plan that addresses the structural imbalances of the state budget.

[TripletDaddy]

He's exactly right that both sides need to sacrifice on some platform issues to address the debt crisis. For Republicans its military spending, taxes, and the drug war. For Democrats its entitlements, environment and welfare. None of these cuts can be cosmetic, either. Some drastic overhauls have to occur for a real course correction.

This is the only worthwhile post in this thread. Besides my posts.

[oxcoug]

Alan Simpson had a good quote around the time Simpson-Bowles cames out:



He's exactly right that both sides need to sacrifice on some platform issues to address the debt crisis. For Republicans its military spending, taxes, and the drug war. For Democrats its entitlements, environment and welfare. None of these cuts can be cosmetic, either. Some drastic overhauls have to occur for a real course correction.

This is the most worthwhile post in this thread that I started.

[PaloAltoCougar]

Alan Simpson had a good quote around the time Simpson-Bowles cames out:



He's exactly right that both sides need to sacrifice on some platform issues to address the debt crisis. For Republicans its military spending, taxes, and the drug war. For Democrats its entitlements, environment and welfare. None of these cuts can be cosmetic, either. Some drastic overhauls have to occur for a real course correction.

My hope, however futile, is that Romney will get elected and then show that he saved his biggest flipflop for last--essentially turning his back on much of his right-wing base and making some major cuts in the "Republican" areas you've mentioned, while sticking it to the Dems as well. I would love a president whose primary objective is the long-term health of the nation and its economy, not reelection.

[Jeff Lebowski]

My hope, however futile, is that Romney will get elected and then show that he saved his biggest flipflop for last--essentially turning his back on much of his right-wing base and making some major cuts in the "Republican" areas you've mentioned, while sticking it to the Dems as well. I would love a president whose primary objective is the long-term health of the nation and its economy, not reelection.

Preach it, brother.