Debt Reduction
by Timothy O. Villard
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# 1. 2/2/10 10:30 AM by mk
Timothy, one situation I've been made aware of: I live near a AF base, contracts that have been competed for by local businesses, are no longer being offered up, and have turned into government positions. Many, and I mean many contracts that have been available to business- to hire workers, are now no longer available, and those once viable businesses are not paying employees or taxes. One man who has been a contract administrator for thirty years, has never witnessed anything like it, and says the months before Obama took office- there were numerous contracts coming up, and a few months after, when contracts came due, they were not to be renewed. He is retiring because, his job is also gone. Why this push to make more government jobs, rather than grow the economy and by growing businesses? It's as if the Obama Administration, does not understand some parts of economics.
I don't mean this disrespectfully, or in a cutting manner, it is an honest question- that I've witnessed first hand. Editor's Note: Despite all that has transpired in a year, I still trust that he is 'serving' the American people; and I trust him.
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# 2. 2/2/10 10:34 AM by Alan
Economics 101:
We send about 3/4 of a trillion dollars overseas every year. This is called a trade imbalance.
The trade imbalance means that our economy would eventually run out of money.
The national debt is how the government replaces the money that is lost to the trade imbalance.
It happens through a process called debt monetization. New money is created by the Fed buying treasuries and authorizing the Treasury to print new money to pay for it.
As long as we continue to buy foreign goods faster than we sell them we must have a national debt. End of story.
As long as oil is traded on the American dollar we can continue to overspend indefinately because other countries need American money.
It's when oil is removed from the dollar standard that we will be in serious trouble.
Can you say "Weimar Republic." Editor's Note: It makse sense to me to re-invent our economy rather than let Wall Street and finance become our ONLY industry.
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# 3. 2/2/10 10:53 AM by Jim Mattison
What is really tiring is listening to the parties finger wag to the public like a hypnotist's locket as they continue to contribute in equal and like measure to the problem at the behest of the moneychangers. Then I have to listen to the clapping seals from both sides pontificate as to why it's the other party's fault while the actual causes and solutions go unrecognized, undiscussed, and unpursued. The fact that you think your opinion matters, or ever will, to the powerbrokers is amusing. By all means, give the government the power to do all the wonderful and wise things you so fervently wish to come to pass and see what happens. You'll be another Greenspan standing there saying, "But I really thought they would do the right thing". Your naivete is amusing, sad, and all too prevalent...and it's exactly what tyrants depend upon. Editor's Note: This paragraph reads as if from an angry intellectual dustbin.
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# 4. 2/2/10 11:03 AM by little john
 A Pyrrhic victory (pronounced /'p?r?k/) is a victory with devastating cost to the victor.
: a victory won at excessive cost
Main Entry: cadmean victory nikemacron; from the mutual slaughter of all but five of the armed men who sprang from dragon's teeth sown by Cadmus : a victory obtained only at great or ruinous cost to the victor -- Editor's Note: Not sure what you've attempted to impart here but it ain't pretty, that's for sure!
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# 5. 2/2/10 4:38 PM by Peter Lounsbury
Actually the collapse of the financial system and the fallout that followed lays squarely largely on the shoulders of the folks who pushed lending institutions (Fannie Mae and Freddie Mac chiefly among them) to give loans to folks that really couldn't afford them. That was the first mistake. The second mistake was something that happened naturally as a result of the first, and we are fools to think that they wouldn't have reacted as they did when greed took over. I'm talking the industry where the numbers were made to work on a temporary basis in the form of balloon mortgages, and the privileged few invested in the failure of those faulty loans. We call them credit default swaps.
Although government spending is indeed out of control, the root problem is that a major portion of our economy hinged on a scheme to redistribute wealth by giving people with limited financial capacity burdens that they were ultimately unable to keep up with. Good intentions at first, but the reality of the matter is that it happened. You wont want to hear this but John McCain did in fact warn of the impending doom, however he was drowned out by Barney Frank and others who labeled him has irresponsible for saying such things out loud. Now we know differently, don't we?
Timothy do you what the Laffer Curve is? It can be complicated in actual practice, mostly because our tax system is so complicated, but the bare bones version of it is that if you tax at 0% the return you will get will be 0%. Contrawise, if you tax at 100% the return will be 0% because there will be no basis to generate revenue. Somewhere there is a balance where maximum economic benefit can be derived where you've hit the sweet spot where you can generate maximum revenue in a market driven economy. The variables in reality are many and complicated, but we can and should shoot for that mark with purpose.
The problem with left wing economics is that you all fail to acknowledge reality. Your response to things like the Laffer Curve is devoid of an understanding of even simplest of economic theories. You look at solutions that ultimately create more problems than they solve by throwing big government out as the solution, exactly what Obama knee jerks to, and you allow emotions to trump facts.
The final fact of the matter that you need to grasp is that a land where economic opportunity exists to it's maximum potential is the best system for the poor. They need hope of a better day rather than the hope of crumbs that are generated by government feel good, do little to nothing giveaways.
We need a level playing in this country and a tax system that works to apprehend maximum revenue raising efficiency as just described, and where a single citizen is one equal ground as the largest of US corporations. This is where many conservatives fall on their faces. they erroneously default to giving big business things to help them succeed in the hopes that the revenue they create will trickle down to the people, when the right answer is that we need an environment where they succeed naturally and on their own accord, not because they receive special treatment. Then and only then will the poorest amongst have the hope of a better life. Editor's Note: Laffer curve notwithstanding there isn't a credible economist who actually believes that tricklle-down economics isn't more than a Republican talking point
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# 6. 2/2/10 4:48 PM by Zjabs
For the record, it isn't solely Bush's fault we're here. Or solely Obama's, Clinton's, Reagan's et al. It's the culmination of decades and decades (heck probably 234 years worth) worth of bad decisions. You know how Einstein said the most powerful force in the universe was compound interest? Works the same way in reverse when you're the debtor. And programs like the interstates, Social Security, Medicare, environmental regulations, NASA, etc etc that raise the costs of living (and take money to keep going) are finally breaking our back. When we only had a few obligations, it could be managed. But everything the government touches from college education to health care goes up faster than inflation. Meanwhile more and more programs like welfare and unemployment are in place with more and more people qualifying.... and someone has to foot the bill (and that my friends, is Zjabs). If there were fewer things the government meddled in (where is the money for the Race to the Top in education coming from...oh right..Zjabs), then there'd be fewer claims on any money the government takes from me. However every little segment grows (often faster than inflation and definitely faster than the taxes coming in) and we wonder why we're in this spot (this is for all levels of the government). Get tough on drugs...great...except who pays for the incarceration of more and more people? Oh right...we do...and so on and so on and so on. Unless we radically scale back the demands on the government purses, we can never escape this mess. Editor's Note: When Japan was in the midst of their supposed 'lost decade' the government came in and assisted industry to retool for the next generation. It worked quite well as certain Japanese industries are poised to embrace the nano-industrial revolution. We here in the US, where Wall Street reigns, have done the opposite; turne our back on innovation because there was more money to be made on DEBT. Don't try to convince me that government doesn't have a roll to play. You're simply accustomed to BAD governance.
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# 7. 2/2/10 6:01 PM by AC
It seems to me that Clinton was the last president who actually understood what it takes to balance a budget; the wealthy have to be seperated from the federal treasury for a while. The tax rates that everyone cries about were high for them but if Bush had maintained that rate for a few years we may have seen the debt substantially reduced.
I got a tremendous kick out of the individuals that the Swiss Banking disclosures sent groveling to Uncle Sam for clemency after they were found out. It seems that the tax rates don't necessarily indicate the amount of actual taxes being paid paid by the wealthy. Editor's Note: Oregon.
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# 8. 2/2/10 9:54 PM by Jim Mattison
"This paragraph reads as if from an angry intellectual dustbin."
I had the same reaction to your article. You could have saved space and just wrote, "He started it!" Editor's Note: you started it!!
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# 9. 2/3/10 9:27 AM by BF
Now, now boys! Tim and Jim, if you cannot get along you'll have to be sent to your respective rooms!
The completely ironic thing is, that were you two to actually meet, you would probably get along very well; you're both actually more on the same page as not.
So boys!: BEHAVE!! Editor's Note: Yes MOm
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# 10. 2/3/10 3:39 PM by Zjabs
"When Japan was in the midst of their supposed 'lost decade' the government came in and assisted industry to retool for the next generation. It worked quite well as certain Japanese industries are poised to embrace the nano-industrial revolution."
Ummm...I'm not certain what you've been reading but it now looks like Japan has lost more than a decade- it's going on a lost twenty years- soon enough it will be the "lost generation". I would greatly appreciate you sending me backup for your contention that Japan is on the right track as their economy is still weak from all that I've read. Wishing their government were good and that government intervention actually helped doesn't make it true. Backup please. Editor's Note: As an example I would cite Nikon. Their major product is no longer photography cameras. They are one of a handful of companies that offer for sale machines capable of producing integrated circuits in nano sizes.
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# 11. 2/3/10 11:09 PM by joe alati - Honeoye Falls
Tim I see you have not lost your touch wherein mind meets pen. As always I am with you and have missed your articles. I love reading the responses and your editors notes. It seems clear that most commentators are well read as are you. You all seem to be reading different things though, Lol. The way of the world. I would add although I do not have the time or inclination to read any where near the volume of most people on this site but I do not need to to know that most people in this country, well read or not, are really tired of politics as usual that cater to the almighty corporation, banks and Wall St. I am wondering what it will take to get the common man off his arse, to actually do something about it in this, the free-est country on the planet. I cannot call it a free country because the American dream has been pretty much squashed by "the man". Gonna take a revolution I surmise. Hasn't been one for over 200 years; we are due. Well so that's a bit extreme most of you say? Ok, I will settle for some tax incentives for small business and bigger salaries for teachers. Editor's Note: You teachers! More money and you'd simply spend more. I appreciate the level attitude you bring to the debate; shows wisdom!
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