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(Bloomberg)   T-Bills are again paying less than inflation. That's bad. But home sales rose. That's good. Orders for durable goods fell. That's bad. Initial jobless claims declined. That's good. I just want sprinkles   (bloomberg.com) divider line 48
    More: Followup, t-bills, durable goods, Spanish Prime Minister, primary dealer, government bonds, mortgage securities, berg Bond Trader, inflation  
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468 clicks; posted to Business » on 27 Sep 2012 at 11:59 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-27 10:17:12 AM
The toppings contain potassium benzoate.
 
2012-09-27 10:21:05 AM

King Something: The toppings contain potassium benzoate.


...
 
2012-09-27 10:52:30 AM
I feel bad for President Obama if he gets re-elected.  Just think of the mess he's going to inherit.
 
Mixed economic news is the norm.  The economy will be uncertain for a long time.
 
2012-09-27 10:54:41 AM

ArkAngel: King Something: The toppings contain potassium benzoate.

...


That's bad.
 
2012-09-27 11:19:26 AM
There's really only one group to blame right now (besides Republicans).

BEARS.

/seriously, your pessimism is dumb
//buy the fark in
 
2012-09-27 12:06:22 PM
Titty sprinkles?
 
2012-09-27 12:28:46 PM

I_C_Weener: I feel bad for President Obama if he gets re-elected.  Just think of the mess he's going to inherit.
 
Mixed economic news is the norm.  The economy will be uncertain for a long time.


I wish I knew that for sure.
 
2012-09-27 12:57:15 PM

King Something: ArkAngel: King Something: The toppings contain potassium benzoate.

...

That's bad.


Can I go now?
 
2012-09-27 01:06:37 PM
Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?
 
2012-09-27 01:12:54 PM

nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?


We invade a middle eastern country so people will forget about it...?
 
2012-09-27 01:31:52 PM
Why is it that T-bills paying less than inflation a bad thing -- or even an abnormal thing?

Investors choose the best risk/reward option available, and if trading some principal in exchange for safety is what they want, then who's to stop them? It's more of an indictment of the risk/reward of all the other options than anything about T-bills.

Don't forget, there are also Treasury Inflation-Protected Securities (TIPS) if you're worried about the inflation rate.
 
2012-09-27 01:34:54 PM

nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?


You get to screw a super model?

/same probability
 
2012-09-27 01:37:41 PM

TyrantII: nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?

You get to screw a super model?

/same probability


Really? We can grow our economies exponentially forever?
 
2012-09-27 01:38:37 PM

StopLurkListen: Why is it that T-bills paying less than inflation a bad thing -- or even an abnormal thing?

Investors choose the best risk/reward option available, and if trading some principal in exchange for safety is what they want, then who's to stop them? It's more of an indictment of the risk/reward of all the other options than anything about T-bills.

Don't forget, there are also Treasury Inflation-Protected Securities (TIPS) if you're worried about the inflation rate.


Yeah, I find it funny. You ask people here and it's America is DOOMED! We're all going to fiscally DIE!

Meanwhile investors are jumping hand over foot to INVEST in America, because they look around the world and are concluding were the safest place to put their money.

We're a pretty long way away from a real fiscal cliff. Unfortunately we're not too far away from a political fiscal cliff, imposed on the nation because one party would rather herp-derp and disregard reality. The worst damage done to the economy besides the great recession was the debt ceiling fiasco, a totally politically manufacture bruhaha.
 
2012-09-27 01:41:34 PM

nmemkha: TyrantII: nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?

You get to screw a super model?

/same probability

Really? We can grow our economies exponentially forever?


TWSS?

No we can't because of scarcity. But were still (several hundred years) a ways away from that. And that's not taking into account how wasteful we are as a species. There's tons of room for improvement in waste reduction, recycling, energy efficiency, ect. It'll be a paradigm shift, but we always tend to do those when forced to.
 
2012-09-27 01:43:37 PM

TyrantII: nmemkha: TyrantII: nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?

You get to screw a super model?

/same probability

Really? We can grow our economies exponentially forever?

TWSS?

No we can't because of scarcity. But were still (several hundred years) a ways away from that. And that's not taking into account how wasteful we are as a species. There's tons of room for improvement in waste reduction, recycling, energy efficiency, ect. It'll be a paradigm shift, but we always tend to do those when forced to.


And debt service is not compunding?
 
2012-09-27 01:44:52 PM
Spain's GDP (for example) contracted last quarter. Did the expansion of their debt obligations also contract?
 
2012-09-27 01:53:10 PM

nmemkha: TyrantII: nmemkha: TyrantII: nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?

You get to screw a super model?

/same probability

Really? We can grow our economies exponentially forever?

TWSS?

No we can't because of scarcity. But were still (several hundred years) a ways away from that. And that's not taking into account how wasteful we are as a species. There's tons of room for improvement in waste reduction, recycling, energy efficiency, ect. It'll be a paradigm shift, but we always tend to do those when forced to.

And debt service is not compunding?


One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.

I'm sure someone here can explain it better than I can.
 
2012-09-27 01:55:33 PM

TyrantII: You ask people here and it's America is DOOMED!


Doomed? No. Big problems we need to fix ASAP? Hell yes. If we ignore the debt problem we currently have, this country will not be around for several hundred years to enjoy that growth.
 
2012-09-27 01:56:45 PM

GanjSmokr: One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.


So Bush is accountable for the entire US debt now? Hmm, he must have had a time machine as well.
 
2012-09-27 02:03:03 PM

HeadLever: GanjSmokr: One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.

So Bush is accountable for the entire US debt now? Hmm, he must have had a time machine as well.


You didn't think Obama was the only one with a magical time machine, did you??
 
2012-09-27 02:18:58 PM

HeadLever: GanjSmokr: One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.

So Bush is accountable for the entire US debt now? Hmm, he must have had a time machine as well.


Everyone knows that Obama doubled the US deficit during his 7 years as President.
 
2012-09-27 02:19:20 PM

GanjSmokr: HeadLever: GanjSmokr: One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.

So Bush is accountable for the entire US debt now? Hmm, he must have had a time machine as well.

You didn't think Obama was the only one with a magical time machine, did you??


Yeah, must come standard with the office.
 
2012-09-27 02:22:26 PM

Moopy Mac: Everyone knows that Obama doubled the US deficit during his 7 years as President.

 
2012-09-27 02:25:33 PM
oops, that did not come through correctly.

In any case, I may be conservative, but I don't buy the 'blame only the other side' mantra. Everyone has blame in this. Yeah, some more than others.

However, what concerns me more than this is the inability for either side to really do much about it. They love giveing lip service to it in order to make a political point, but when the chips are down, no one seems to have the spine required to do what is necessary.
 
2012-09-27 02:58:48 PM
Titty Sprinkles?
 
2012-09-27 03:16:35 PM
DNRTFA but T bills are certainly a better investment than the typical bank's .001% interest rate.
 
2012-09-27 03:27:41 PM

HeadLever: TyrantII: You ask people here and it's America is DOOMED!

Doomed? No. Big problems we need to fix ASAP? Hell yes. If we ignore the debt problem we currently have, this country will not be around for several hundred years to enjoy that growth.


Soon, but not ASAP. The big drivers are healthcare costs and medicare, fueled by a population bubble. Debt as a percentage of GDP was MUCH larger in the 40's and 50's, and the boom years that followed tend to make everyone forget about that fact. Boom years where they paid it down, when it made sense to and didn't undercut the economy. The US had the longest history of growth, and smallest period of economic volatility since. So it's disingenuous to pump this problem up into something it is not, as people now do.

The debt issues is 100% a politically manufactured issue, the idea being debt spending is good because it's a means to the end of "starving the beast", ie getting red of federal programs you don't like. Conservative throw up their hands at the debt, but it's a code word to cut everything from the EPA to Education. They do not want to fix the problem, because they can use "the problem" to their real means to an end. They want deficit spending, because it makes their arguments for curtailing popular federal programs make more sense.

If they were serious, and were conservative, they would be arguing for revenue increases, shared sacrifice, and across the board spending cuts. You know, conservative fiscal responsibility arguments. They are not, and instead want to remove taxes and starve the beast: IE taxs and government are evil!

Say what you will about the Dem's, but they're the only party that realizes the need to cut spending and raise revenues, especially in times of good. Clinton balanced the budget on tax increases that not one single republican voted for (and without would not have produced the Clinton surplus).

Now that can all change in the future and the 60'2-70's magical thinking DFH's might take over the party and decide to give drug users mansions; but watching the current administration and party, I don't see that anytime soon. There's too much of a political vacuum being left ripe for the picking in the middle.
 
2012-09-27 03:31:25 PM

HeadLever: GanjSmokr: One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.

So Bush is accountable for the entire US debt now? Hmm, he must have had a time machine as well.


Not at all, but the unfunded medicare Donuthole, unfunded tax cuts and two protracted ground wars kinda does that to you. Especially when you hit a finical crisis not seen since the great depression.

The financial crisis wasn't all his fault, but he did plenty to run up deficits in the good times, because that's the MO of his party.

Remember Cheney: "Deficits don't matter". Why? Because they make our arguments stronger!
 
2012-09-27 03:34:17 PM

HeadLever: oops, that did not come through correctly.

In any case, I may be conservative, but I don't buy the 'blame only the other side' mantra. Everyone has blame in this. Yeah, some more than others.

However, what concerns me more than this is the inability for either side to really do much about it. They love giveing lip service to it in order to make a political point, but when the chips are down, no one seems to have the spine required to do what is necessary.


We were close to $2 trillion in cuts, but raising revenue by resetting the top bracket a measly +3% was a deal killer to the house. That's not being fiscally realistic if you're really worried about the deficit and debt.
 
2012-09-27 03:35:59 PM
So if I convert my money into another form of money, that money will be worth less than if I had just kept the money?
 
2012-09-27 03:48:40 PM

born_yesterday: So if I convert my money into another form of money, that money will be worth less than if I had just kept the money?


No, not if you buy TIPS.
 
2012-09-27 03:53:02 PM

TyrantII: Debt as a percentage of GDP was MUCH larger in the 40's and 50's,


Yes, but we had an industrial revolution to help us climb out of the war-time debt. Problem is now that we can't even begin to reduce debt the same way as we did back in the late 40s to early 60s. Especially now that we are saddled with all of these entitlements. Also, debt peaked out at about 120% of GDP to pay for WWII. We are currently at 104% and adding about 7.5% each year.

The debt issues is 100% a politically manufactured issue,

Lolwat?
theeconomiccollapseblog.com

While it is political in nature, the threat to our fiscal health because of this debt and the current path we are on is far from manufactured.

If they were serious, and were conservative, they would be arguing for revenue increases, shared sacrifice, and across the board spending cuts.

I'll mostly agree with that and said as much.

Clinton balanced the budget on tax increases that not one single republican voted for (and without would not have produced the Clinton surplus).

Let's not get all revisionist on us, shall we? Clinton's greatest surpluses were mostly due to the dot com bubble which greatly increased revenue. Which was great until the bubble popped.
 
2012-09-27 03:55:07 PM

TyrantII: Remember Cheney: "Deficits don't matter".


In all reality, deficits really don't matter if they are small enough as to not grow the debt by more than the inflation rate.

However, no one that is sane will say that the deficits we have had over the last 5 years 'don't matter'.
 
2012-09-27 03:58:36 PM

TyrantII:
We were close to $2 trillion in cuts, but raising revenue by resetting the top bracket a measly +3% was a deal killer to the house. That's not being fiscally realistic if you're really worried about the deficit and debt.


While that was likely a good start to addressing the issue, that $2T in cuts over 10 years only represented about 20% of the average estimated deficit over that timefram.

I'll agree with you that it sucked that the Republicans stalled the measure over thier refusal to approve any tax increases.
 
2012-09-27 05:30:47 PM

TyrantII: StopLurkListen: Why is it that T-bills paying less than inflation a bad thing -- or even an abnormal thing?

Investors choose the best risk/reward option available, and if trading some principal in exchange for safety is what they want, then who's to stop them? It's more of an indictment of the risk/reward of all the other options than anything about T-bills.

Don't forget, there are also Treasury Inflation-Protected Securities (TIPS) if you're worried about the inflation rate.

Yeah, I find it funny. You ask people here and it's America is DOOMED! We're all going to fiscally DIE!

Meanwhile investors are jumping hand over foot to INVEST in America, because they look around the world and are concluding were the safest place to put their money.

We're a pretty long way away from a real fiscal cliff. Unfortunately we're not too far away from a political fiscal cliff, imposed on the nation because one party would rather herp-derp and disregard reality. The worst damage done to the economy besides the great recession was the debt ceiling fiasco, a totally politically manufacture bruhaha.


Krugman, is that you?
 
2012-09-27 05:38:21 PM

HeadLever: TyrantII: Remember Cheney: "Deficits don't matter".

In all reality, deficits really don't matter if they are small enough as to not grow the debt by more than the inflation rate.

However, no one that is sane will say that the deficits we have had over the last 5 13 years 'don't matter'.


FTFY. But yes, we do need to start getting our house in order, as soon as we get the economy going again.

Also the chart above is scaremonger territory. In all likelihood you and I are not going to be around in 2080 and there's a litany of things that could happen between now and then that could drastically screw or enrich us beyond our wildest dreams. Forecasting out so far is the first sign of some sort of agenda, because it's utterly meaningless in the real world. If you went back to the 30's and forecast 70's year into the future, think of all the advancements, changes in the economy and population, booms and busts, changes from local to world politics, ect. Predictions past 10-20 years are just bunk. A better frame to put this in is to look towards the past, how bad the debt was at times, and how we fixed it.

Case in point the ACA is a real attempt to bend the cost curve of Healthcare down, which does impact as debt reduction. It's a AEI plan, and makes a lot of sense. Meanwhile Romney is out on the campaign trail claiming Emergency rooms are good enough, where people rack up $50,000 bills that are dumped on the state, the hospitals and insurance.

We can tackled the debt and the deficit, but it's going to take reforming a lot of sacred cows on all sides. It's going to take a combination of inflation, economic prosperity, revenue generations and budget cuts. My hope is the GOP fever breaks this cycle or in 2016, and they drop the eval Gov/Taxes slick and get serious about fiscal issues finally, something the Dems are increasingly taking away from them. Well see though, because they've been very clear for a while now about their starve the beast agenda.
 
2012-09-27 06:04:31 PM

nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?


WWIII
 
2012-09-27 06:38:08 PM

TyrantII: Also the chart above is scaremonger territory.


It is stright from the CBO and GAO. If it is scary, then good. Maybe folks will wake the hell up. And the pain does not start in 2080. The country would implode well before that under this budgeary circumstance. The pain will be felt much sooner than that.

i2.cdn.turner.com

You thought that 2T in spending cuts was big? That could be eaten up just in the growth in interest obligation to the debt if interest rates start to rally.

We can tackled the debt and the deficit, but it's going to take reforming a lot of sacred cows on all sides. It's going to take a combination of inflation, economic prosperity, revenue generations and budget cuts. My hope is the GOP fever breaks this cycle or in 2016, and they drop the eval Gov/Taxes slick and get serious about fiscal issues finally, something the Dems are increasingly taking away from them. Well see though, because they've been very clear for a while now about their starve the beast agenda.

I'll agree with that at about 90%. The republicans are right to 'starve the beast' but wrong to do it with only spending cuts. You need to starve the deficit by feeting it additional tax revenue and not spending as much. What gets me about Democrats is that anytime you talk about additional tax revenue or money saved by cutting the millitary, they immediatly want to spend it on something not called the deficit. That is not the point folks.

Goverment is going to have to get smaller and more efficient and the tax burden on the citizens (especially the wealthy) is going to have to increase. There is really no other way to get around it.
 
2012-09-27 06:42:38 PM

TyrantII: HeadLever: TyrantII: You ask people here and it's America is DOOMED!

Doomed? No. Big problems we need to fix ASAP? Hell yes. If we ignore the debt problem we currently have, this country will not be around for several hundred years to enjoy that growth.

Soon, but not ASAP. The big drivers are healthcare costs and medicare, fueled by a population bubble. Debt as a percentage of GDP was MUCH larger in the 40's and 50's, and the boom years that followed tend to make everyone forget about that fact. Boom years where they paid it down, when it made sense to and didn't undercut the economy. The US had the longest history of growth, and smallest period of economic volatility since. So it's disingenuous to pump this problem up into something it is not, as people now do.

The debt issues is 100% a politically manufactured issue, the idea being debt spending is good because it's a means to the end of "starving the beast", ie getting red of federal programs you don't like. Conservative throw up their hands at the debt, but it's a code word to cut everything from the EPA to Education. They do not want to fix the problem, because they can use "the problem" to their real means to an end. They want deficit spending, because it makes their arguments for curtailing popular federal programs make more sense.

If they were serious, and were conservative, they would be arguing for revenue increases, shared sacrifice, and across the board spending cuts. You know, conservative fiscal responsibility arguments. They are not, and instead want to remove taxes and starve the beast: IE taxs and government are evil!

Say what you will about the Dem's, but they're the only party that realizes the need to cut spending and raise revenues, especially in times of good. Clinton balanced the budget on tax increases that not one single republican voted for (and without would not have produced the Clinton surplus).

Now that can all change in the future and the 60'2-70's magical thinki ...


Clinton's budgets came from a republican controlled congress. If "not a single republican" voted for his tax increases, how did they pass?
 
2012-09-27 07:08:51 PM

leevis: Clinton's budgets came from a republican controlled congress. If "not a single republican" voted for his tax increases, how did they pass?


This increase was passed in 1993 when the House and Senate was still controlled by the Dems. Even at that, they had to use Gore as a tie-breaker. In the end, this was one of the bills that really helped the Republican takeover of Congress in 1994.
 
2012-09-27 07:27:19 PM
The benefits of technology are greatly offsetting the penalties of indebtedness. Robots can run much faster than people, error-free, and at 1/10th the cost. The benefit of the lower costs of production flow through to everyone. Far more manufacturing jobs have been lost to automation than to foreign labor. The internet gives a vast pool of free entertainment, the uses to which we put our time are far more diverse and productive than they used to be. GPS navigation in cars and trucks alone saves billions a year as people aren't driving around lost anymore.
 
2012-09-27 08:06:55 PM

GanjSmokr: nmemkha: TyrantII: nmemkha: TyrantII: nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?

You get to screw a super model?

/same probability

Really? We can grow our economies exponentially forever?

TWSS?

No we can't because of scarcity. But were still (several hundred years) a ways away from that. And that's not taking into account how wasteful we are as a species. There's tons of room for improvement in waste reduction, recycling, energy efficiency, ect. It'll be a paradigm shift, but we always tend to do those when forced to.

And debt service is not compunding?

One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.

I'm sure someone here can explain it better than I can.


LOL, farking what? These are Obama's voters right here.
 
2012-09-27 08:08:11 PM

TyrantII: HeadLever: GanjSmokr: One thing I've learned here is that debt is a good thing and a $16T debt that Bush ran up is nothing at all to be worried about.

So Bush is accountable for the entire US debt now? Hmm, he must have had a time machine as well.

Not at all, but the unfunded medicare Donuthole, unfunded tax cuts and two protracted ground wars kinda does that to you. Especially when you hit a finical crisis not seen since the great depression.

The financial crisis wasn't all his fault, but he did plenty to run up deficits in the good times, because that's the MO of his party.

Remember Cheney: "Deficits don't matter". Why? Because they make our arguments stronger!


Deficits don't matter when the debt-GDP ratio is low. Obama is damn willing that ratio to be 1 to 1, which is the danger zone.
 
2012-09-28 12:55:42 AM

nmemkha: Every year a larger percentage of real growth goes to paying the service on existing debt. What happens the amount needed to service the debt outstrips the global enconomy's ability to generate tangible value to service pay the service on the existing debt?


The rich people win.
 
2012-09-28 10:36:03 AM

HeadLever: oops, that did not come through correctly.

In any case, I may be conservative, but I don't buy the 'blame only the other side' mantra. Everyone has blame in this. Yeah, some more than others.

However, what concerns me more than this is the inability for either side to really do much about it. They love giveing lip service to it in order to make a political point, but when the chips are down, no one seems to have the spine required to do what is necessary.


Honestly the Democratic party has been trying but hell, the GOP turned down 10-1 spending cuts to revenue increases. Simpson Bowles was torpedoed by Ryan for revenue increases as well. Cuts and revenue increases are obviously necessary and the fights should be about what gets cut and who/what gets taxed more, not the existence of the revenue streams in the first place.

But you know it's hard to cue as much outrage with "My marginal rate on familial income exceeding 250 thousand dollars will go from 35% to 38%!!!! THINK OF THE CHILDREN!!" Honestly, I think there might be too much public awareness of the process at the moment. Backroom deals have always been incredibly important to the way the US system works and the rigid party discipline just doesn't work with a two-party, non-parliamentary system with such strong brakes on the process.

HeadLever: You thought that 2T in spending cuts was big? That could be eaten up just in the growth in interest obligation to the debt if interest rates start to rally.

We can tackled the debt and the deficit, but it's going to take reforming a lot of sacred cows on all sides. It's going to take a combination of inflation, economic prosperity, revenue generations and budget cuts. My hope is the GOP fever breaks this cycle or in 2016, and they drop the eval Gov/Taxes slick and get serious about fiscal issues finally, something the Dems are increasingly taking away from them. Well see though, because they've been very clear for a while now about their starve the beast agenda.

I'll agree with that at about 90%. The republicans are right to 'starve the beast' but wrong to do it with only spending cuts. You need to starve the deficit by feeting it additional tax revenue and not spending as much. What gets me about Democrats is that anytime you talk about additional tax revenue or money saved by cutting the millitary, they immediatly want to spend it on something not called the deficit. That is not the point folks.

Goverment is going to have to get smaller and more efficient and the tax burden on the citizens (especially the wealthy) is going to have to increase. There is really no other way to get around it.


My family is solidly middle class (and hardcore right wing) and I was discussing fiscal issues and I had mentioned that it seems pretty obvious from the math and from a subsidy perspective that the mortgage interest tax deduction needs to go. The reaction was it wasn't a government handout because they save money and therefore need it. I just don't get how we deal with such a large swath of otherwise very intelligent people that just go bonkers when politics and finance meet. We need something to realize that the government is everyone and we all benefit from it and pay for it because that's what society means.
 
2012-09-28 10:49:21 AM

Lupine Chemist: My family is solidly middle class (and hardcore right wing) and I was discussing fiscal issues and I had mentioned that it seems pretty obvious from the math and from a subsidy perspective that the mortgage interest tax deduction needs to go. The reaction was it wasn't a government handout because they save money and therefore need it. I just don't get how we deal with such a large swath of otherwise very intelligent people that just go bonkers when politics and finance meet. We need something to realize that the government is everyone and we all benefit from it and pay for it because that's what society means.


This line of reasoning is at the core of bigoted entitlement: "I am somehow more derserving the benefits of the system because of all the [stereotypes] that leach off the system." And they beleive this "fact" negates any counter-argument against their own (ab)use of the system.".
 
2012-09-28 11:08:53 AM

Lupine Chemist: Honestly the Democratic party has been trying but hell, the GOP turned down 10-1 spending cuts to revenue increases.


The Dems have been playing lip service to the issue as well. Most of them don't want substantial spending cuts and play many of the same games as the republicans. Yes, the GOP absolute refusal to do anything about increasing tax rates is retarded, but what do you expect during silly season.

My family is solidly middle class (and hardcore right wing) and I was discussing fiscal issues and I had mentioned that it seems pretty obvious from the math and from a subsidy perspective that the mortgage interest tax deduction needs to go.

In the technial sense, the housing deduction is not a subsidy. As subsidy is money paid to an individual or group based upon some qualification. From the goverment, this is on the spending side of the ledger. The housing dedcution is a redcution the tax liability to an individual or group and respresents revenue to the government.

In the broad sense, you are correct as the ultimate impact of this deduction is a higher deficit for the goverment as it costs the government about $100 Billion in tax revenue per year. If this deduction was eliminated, the impact of this change could create issues in the short term, but I would tend to think that the long term prices would adjust in order to reflect this new pricing structure.

/Yes the right wing has thier sacred cows, the same as the left wing
//and yes, it is time for some shared sacrifice
 
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