patrick.net

Wow. That can't be right.

http://news.yahoo.com/poll-carries-warning-signs-obama-2012-213717802.html

WASHINGTON (Reuters) - A poll released on Wednesday carried warning signs for President Barack Obama's re-election chances in 2012.

Obama's overall approval rating was at 46 percent, with 48 percent of voters disapproving of him, and this is in line with other recent surveys.

"There's a very good chance Barack Obama would lose if he had to stand for re-election today," said Dean Debnam, president of Public Policy Polling.

Gullible.

EMan says

What happend to Ron Paul? He was probably the only real conservative out of the bunch.

Depends on how you define conservative.

He's a believer in liberty, and most self-described conservatives only believe in liberty with one hand in the till, the other policing the world.

That ain't Ron Paul, and I don't use the moniker "conservative" since it denigrates the man's reputation through guilt by association.

Let's see how many people still like Mitt Romey when they learn that he spent all of his time at Bain DESTROYING jobs.

If Kudlow likes the Gang of Six proposal, then I am opposing it. I get nervous when I hear things like "pro growth" since that usually entails massive tax cuts for the upper end. WHen Republcians talk about "pro growth" they mean the bank accounts of rich people, not the economy.

But HousingWatcher, a guy who makes money off labor arbitrage by outsourcing and slashing jobs is a "Jobs Creator", a veritable Hank Rearden that we should all worship as a Randian Hero.

Troy says

The change to 75-year actuarial balance in the SSTF is theft from Generation X too.

Troy, this is interesting. Can you elaborate on how the SSTF is accounted for, or do you have a link that explains it?

Thanks!

It's pretty simple, LOL.

Social Security maintains a trust fund ("SSTF") and it's supposed to have 1 year's expenses (currently ~$500B) in it.

But in the early 1980s Congress for some reason allowed the trust fund to run down to zero, and in response from 1984-1990 the FICA rate was raised from 8% to today's 12.4%:

http://www.ssa.gov/oact/progdata/taxRates.html

This overtaxation was such that the trust fund was returned to its legal minimum by 1989.

The 1990s were good for the trust fund and the overtaxation continued to cause the trust fund to grow $100B/yr or so.

Of course, unlike Norway and Alaska's pension trust funds, the Social Security Trust Fund only holds treasury bonds (Norway and Alaska hold stocks and corporate bonds, too). The Treasury took our surplus FICA taxes 1984-2009 and gave SSA special bonds in return.

This disguised the true nature of government's finances somewhat. Eg:

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding

09/30/1998 3,733,864,472,163.53 1,792,328,536,734.09 5,526,193,008,897.62
09/28/2001 3,339,310,176,094.74 2,468,153,236,105.32 5,807,463,412,200.06

Shows the external part of the national debt fell $400B in Clinton's last 3 years and the various trust funds rose $670B.

This was a good thing, within reason, a government that only owes itself money is a happy government indeed.

Due to falling wages in the current recession, the annual FICA tax surplus went away in 2009 (probably for good), but from 1984-2009 a total of $1.5T or so was overtaxed from working Americans, and there's another $1.2T in accrued interest (to pay interest, the Treasury just issues more bonds) so in total SSA is holding $2.7T in treasury bonds today in its trust fund.

This is basically the savings of people (and their heirs) who paid FICA taxes 1984-2009.

Divided by 120 million people, it is over $20,000 per person, so it is not an inconsequential amount of money.

Social security payments are scheduled to double from $500B now to $1T/yr in 2020. In 2020 the front half of the baby boom will be aged 63 to 74.

FICA collections aren't going to rise that fast so SSA will have to start redeeming its treasuries for cash, and for the Treasury to get the cash they either have to sell more treasuries, get more tax revenue, or have the Fed print the money.

The first is getting somewhat difficult due to the $1.5T/yr deficit, and raising taxes is impossible due to the Party of No being in charge of the House and being in a blocking position in the Senate.

Printing the money is possible but if it causes inflation it would be self-defeating since seniors are very vulnerable to inflation.

The sneaky thing they want to do is tweak the annual COLA rises to social security payees, to reduce the cash draw that SS has on the Treasury and extend the life of the $2.7T trust fund, so they don't have to raise income taxes to pay it back as originally intended.

But that $2.7T morally belongs to the FICA taxpayers (and their heirs) who paid into the system 1984-2009! It needs to be redeemed during their retirement, which runs for the next 25 years.

Putting the trust fund on a 75-year balance means they will cut benefits and/or raise FICA taxes such that the people (or their heirs) who overpaid FICA over the past 25 years won't actually get their money back!

The whole trust fund will have been the biggest con ever perpetrated. If these bastards pull it off, nobody will applaud louder than I.

A government that owes it to itself really soft-gloves even that situation. What we tolerate as taxpayers with this program is and always has been a Ponzi scheme of sorts, nothing like a program funded privately for retirement.

This has to do with sources of cash-flow on the "investments" held on behalf of SS TF recipients.

Congress has always been keen on spending the excess SS taxes. In place, they put USTs that are backed by tax revenue.

Let's take a look at this another way: I run and investment company, and I want you to invest your retirement with me. Here's my plan.

Each year you give me a part of your savings. I turn around and immediately spend it and put a personal IOU into your account saying that I owe you money in the future at interest. Each year you contribute more money, and I do the same.

Immediately, each year at the end of the year, I send you a bill. That bill is in the exact amount required for me to cover your interest payments into your retirement plan with me. I put that money in, and immediately spend it, replacing it with another IOU. Each year I bill you for interest, and when your kids are of working age, I start billing them as well. When you have grandkids, as soon as they are working, they start getting a bill.

Ready to sign up, anyone??

Eventually you retire, and I pray that you have enough kids and grandkids to help cover the costs, since that's all I can afford to pay you.

That's basically what Social Security is / has done. Yeah, it's not a perfect analogy because the bills are spread socially across to your neighbors, etc.

But, it's close enough. Congress has spent every excess dollar it collected for SS. When you retire, there's no money set aside other than what can be drained as current cash flow from the existing tax base. Sure, it's laundered through the process of Govt Bonds as IOUs... But their cash flow and repayment are nil without current taxing... Or, piling on more debt.... Or printing money.

A real retirement program would invest in a cash flow secured by real assets from outside parties who are capable of providing a consumer value. Social Security does nothing other than enslave future generations for the excesses of past and current generations.

"If Matt Taibbi is right, this will be Obama's excuse to implement a right-leaning budget proposal, which according to him is what the President wanted all along."

Interesting, I'll have to chase Taibbi article down.

It fascinates me how GOP attacks Obama, he's closer to Reagan than some Republican candidates have been when it counted.

thunderlips11 says

* In return for those rate cuts, a host of tax breaks would be reduced, including popular deductions on mortgage interest, retirement savings, charitable deductions, high-cost health plans and tax credits for families with children.

I personally really like this part. It isn't right to provide random tax cuts to special interests. Time to remove these deductions and let people carry their own weight for a change.

It was one thing that upset me about Rush Limbaugh, he says he is a conservative yet defends interest rate deduction. Yeah lets defend a special interest give away, that's good for America.

I see that some are upset about cuts. But we as a nation can't live in credit forever like a bunch of deadbeats, tough choices are tough. Crying like babies about how life is now more difficult because government isn't giving out free money isn't going to help it.

Suck it up America, time to work on providing a better future for our children's generation instead of consuming their future like parasites.

Good budget deal overall.

Ronnie Honduras says

A real retirement program would invest in a cash flow secured by real assets from outside parties who are capable of providing a consumer value. Social Security does nothing other than enslave future generations for the excesses of past and current generations.

This is largely BS. Social Security is just a savings program that forces all wage earners to put 10% of their gross, up to ~$10,000 in US treasuries.

As long as it's run pay-as-you-go and the contribution rate is sufficient to cover the payout rate, it's a perfectly valid retirement program.

Treasuries are bond on the US taxpayer, and US taxpayers make $13T per year now. They're good for the the $2.7T+ that SSA is owed to cover the baby boom's checks over the next 25 years -- the top 1% alone is going to take home $80T in net income over the next 25 years.

Problem is though, these rich bastards are funding propaganda mills -- Heritage, AEI, Manhattan, Hoover, Cato, Reason, etc -- and own more than a few major media outlets to bullshit people about their social security.

If the system has promised too much to current workers, we simply need to raise their contribution level. Social security as structured makes tons of sense, it doesn't need any major changes, it just needs to have the rich begin pay back the money ($2.7T) they owe it now, something like $200B/yr starting in 2020.

Troy says

The change to 75-year actuarial balance in the SSTF is theft from Generation X too.

No it's theft from the young (the boomerang) generation. They won't get good jobs for 10 more years.

Much better is to cut it by 50% and REDUCE the retirement age. Let retire all those old, slow, stupid, incompetent ones.

Troy says

This is largely BS. Social Security is just a savings program that forces all wage earners to put 10% of their gross, up to ~$10,000 in US treasuries. As long as it's run pay-as-you-go and the contribution rate is sufficient to cover the payout rate, it's a perfectly valid retirement program.

Wasn't Bernie Madoff a "pay as you go" system, as well? If only he could have used the tax man to collect for him, he'd still be in business, too.

Bottom line is Congress spent the money and put "investments" in their place that are dependent on you, your kids and your neighbors, to come up with the cash they spent via taxation. Much different in quality than a bond from a corporation that produces tractors, or something, to pay off its bonds productively.

Troy says

and US taxpayers make $13T per year now

So I'm on the same page, you are talking GDP, right?

Troy says

If the system has promised too much to current workers, we simply need to raise their contribution level.

Same logic would have solved Bernie's problem, too, no?

shrekgrinch says

Sane Americans realize that we have a spending problem, not a revenue problem. So does that aforementioned conservative.

No, sane people typically recognize that the answer to the problem is usually in between the two extremes and is best reached by compromise. Regardless of what the problem is.

Thank god for the dumbification of the American youth.
Me now in the 40s will enjoy at least two or three decades(if I choose) of relevant employment. With out looking over my shoulder for the young guns.

They can facebook about it, while I cash my checks.

Who need SS, and retirement when you can work and be a valuable Sr. member in companies of your choosing?

Seriously the older I get, the more valuable my skill set gets, and the easier my next job becomes to acquire.

This has not been the case for at least the past three generations in America. As after 15, Men were supposed to put away childish things. Before now, men age 21 to 30 were at the TOP of their GAME. Now grown ass kids, age 26 are still at home with mom and dad, and our President is putting the burden of their health care on their parents to further keep them holed up and stupid.

And what are they learning in college these days? Why they are acting out fantasy Children books, fictitious games.

http://sportsillustrated.cnn.com/multimedia/photo_gallery/1107/quidditch.college.campus/content.1.html

It would be pathetically sad, if it weren't insuring my working future.

Go run and Play kiddies, daddy's got work to do...

Dumb ass bitches.

"Sane Americans realize that we have a spending problem, not a revenue problem"

Individiual income tax revenue is $1T and corporate income tax is $200B this year.

Total individual income is $10T and total corporate profits are $1.7T.

http://www.federalreserve.gov/releases/z1/Current/z1r-3.pdf

So we have a 10% tax rate on the national income. When we had a surplus in the late 1990s, the tax rate per GDP was 12%. Now it's under 8%.

http://research.stlouisfed.org/fred2/graph/?g=1bf

We have a tax problem to this extent.

We also need to cut defense spending and other non-productive spending back a lot, and get more care per dollar from our federal health spending.

HousingWatcher says

If Kudlow likes the Gang of Six proposal, then I am opposing it. I get nervous when I hear things like "pro growth" since that usually entails massive tax cuts for the upper end. WHen Republcians talk about "pro growth" they mean the bank accounts of rich people, not the economy.

Sometimes people are wrong about things that they claim are pro-growth. For example, capital gains taxes. It is not really as anti-growth as people think to raise capital gains taxes.

If I buy stocks, then I am buying a share of a company, sure. But only on an IPO or in angel/venture financing is buying stock pro-growth. When buying in the secondary market, I am not causing IBM to grow by buying IBM stock. IBM gets absolutely no money to spend on R&D, employees, or machinery when I buy IBM stock. IBM got money for those things from stockholders only during its own stock offerings, and now it funds those things via profitable operations. IBM itself causes the growth.

Taxing capital gains the same as labor can also be pro-growth. Reagan did this, by the way. That way, people are neutral between work and investment. Work produces growth. Being a passive investor doesn't.

Troy says

This is largely BS. Social Security is just a savings program that forces all wage earners to put 10% of their gross, up to ~$10,000 in US treasuries.

Correct. Social Security is a regressive taxation system, where the tax proceeds function as forced savings with progressive benefits.

Ronnie Honduras says

Bottom line is Congress spent the money and put "investments" in their place that are dependent on you, your kids and your neighbors, to come up with the cash they spent via taxation.

No, not me, since the top 20% -- mostly non FICA payers -- clear 50% of the national income. We need to tax them extra to repay whatever the FICA payers are owed as it is repaid.

This should not be controversial.

So I'm on the same page, you are talking GDP, right?

F.7 Distribution of National Income (1) from
http://www.federalreserve.gov/releases/z1/Current/z1r-3.pdf

Same logic would have solved Bernie's problem, too, no?

No. If the government only owed $4.5T on trust funds there would not be an issue repaying them. The problem is the $10T of OTHER debt -- "held by the public" -- that is over-extension for the overall system as-it-is. Congress should never have let this debt grow so high, cutting taxes in 2003 while expanding a war was a colossal mistake.

"Refusing to execute his constitutional duty to propose a budget to Congress for two years running qualifies."

Shrek did not earlier answer where in the Constitution this duty is created.

Since his primary purpose is to lie here, he will not stop making this patently false assertion, or correct my understanding of the constitution should I be wrong about this.

Troy says

"Refusing to execute his constitutional duty to propose a budget to Congress for two years running qualifies."

Shrek did not earlier answer where in the Constitution this duty is created.

Shrek says a lot of wrong things I've noticed. It's not even clear that he/she has even read the Constitution.

I have found that most people who make an argument based on the Constitution who have not studied constitutional law either a) haven't read the Constitution, or b) are making a crappy argument because they should be able to articulate a good policy argument without reference to the Constitution first, and then describe how the Constitution affects that good argument. Starting from the Constitution first is usually misguided.

Here is the entirety of Article II of the US Constitution -- where do you see this provision, Shrek?:

Article II - The Executive Branch Note

Section 1 - The President

The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice-President chosen for the same Term, be elected, as follows:

Each State shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress: but no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector.

(The Electors shall meet in their respective States, and vote by Ballot for two persons, of whom one at least shall not lie an Inhabitant of the same State with themselves. And they shall make a List of all the Persons voted for, and of the Number of Votes for each; which List they shall sign and certify, and transmit sealed to the Seat of the Government of the United States, directed to the President of the Senate. The President of the Senate shall, in the Presence of the Senate and House of Representatives, open all the Certificates, and the Votes shall then be counted. The Person having the greatest Number of Votes shall be the President, if such Number be a Majority of the whole Number of Electors appointed; and if there be more than one who have such Majority, and have an equal Number of Votes, then the House of Representatives shall immediately chuse by Ballot one of them for President; and if no Person have a Majority, then from the five highest on the List the said House shall in like Manner chuse the President. But in chusing the President, the Votes shall be taken by States, the Representation from each State having one Vote; a quorum for this Purpose shall consist of a Member or Members from two-thirds of the States, and a Majority of all the States shall be necessary to a Choice. In every Case, after the Choice of the President, the Person having the greatest Number of Votes of the Electors shall be the Vice President. But if there should remain two or more who have equal Votes, the Senate shall chuse from them by Ballot the Vice-President.) (This clause in parentheses was superseded by the 12th Amendment.)

The Congress may determine the Time of chusing the Electors, and the Day on which they shall give their Votes; which Day shall be the same throughout the United States.

No person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty-five Years, and been fourteen Years a Resident within the United States.

(In Case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President and Vice President, declaring what Officer shall then act as President, and such Officer shall act accordingly, until the Disability be removed, or a President shall be elected.) (This clause in parentheses has been modified by the 20th and 25th Amendments.)

The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.

Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation:

"I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States."

Section 2 - Civilian Power over Military, Cabinet, Pardon Power, Appointments

The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual Service of the United States; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any subject relating to the Duties of their respective Offices, and he shall have Power to Grant Reprieves and Pardons for Offenses against the United States, except in Cases of Impeachment.

He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.

The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.

Section 3 - State of the Union, Convening Congress

He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient; he may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper; he shall receive Ambassadors and other public Ministers; he shall take Care that the Laws be faithfully executed, and shall Commission all the Officers of the United States.

Section 4 - Disqualification

The President, Vice President and all civil Officers of the United States, shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.

The best you can find is probably "He shall from time to time ... recommend to [Congress'] Consideration such Measures as he shall judge necessary and expedient." That is a discretionary power, not a mandatory requirement.

I support tax loopholes going away, just too many who get them kind of enjoy the free perk on the back of others and call it a tax increase if these are gone.

"We have a spending problem, not a revenue problem" is nothing more than a right wing talking point. Tax revenue is at a 60 year low

IF peopel had bothered to do their research, they would know that tax revenue has fallen off a cliff thanks to the recession:

HousingWatcher says

hey would know that tax revenue has fallen off a cliff thanks to the recession:

Sorta. the bulge in 2006 was simply driven by the bubble machine.

How is it that we have a $15T economy but only collect $200B in corporate income taxes? Why even have a corporate income tax if it collects so little?

We should tax incomes less and land more.

Troy says

How is it that we have a $15T economy but only collect $200B in corporate income taxes? Why even have a corporate income tax if it collects so little?

Some people think it should go away entirely because shareholders and consumers are effectively paying it. It doesn't really cost the corporation itself anything. Either they charge higher prices and it gets passed onto consumers, or it reduces profits, which means shareholders get lower stock prices and lower dividends.

There are arguments for keeping it too, of course.

You are correct that corporate tax in the US as a percentage of GDP is historically low and is the lowest percentage in the OECD.

Ron Paul is he's a TOOL.

I mean that in several senses. Sure he voted against Glass-Steagall, but lately?

Glass-Steagall should be reinstated, do you see him proposing that? Nope.

TBTF banks should be either broken up, or have protection removed, did he propose legislation for that? Nope.

Volcker and the CFPB under GOP assault, do you see Ron out defending them? Nope.

All Ron does is give the Anti-Fed people a nutty old man to rally behind and cluster all of these ineffectual individuals where they will do the least real damage to the FIRE industry.

Bad link

Troy says

HousingWatcher says

hey would know that tax revenue has fallen off a cliff thanks to the recession:

Sorta. the bulge in 2006 was simply driven by the bubble machine.

How is it that we have a $15T economy but only collect $200B in corporate income taxes? Why even have a corporate income tax if it collects so little?

We should tax incomes less and land more.

“Nessuna soluzione . . . nessun problema!„

that idea is unlikely to go anywhere past this message board.

"that idea is unlikely to go anywhere past this message board."

LOL. It's funny how something so efficacious is so well hidden.

The entire field of economics was reconstructed to confuse the difference between land and capital. Even the heterodox schools like the Miseans are bootlicks to wealth and thus intentionally obfuscate the merits of land taxes.

At least some noises are being made against commercial properties enjoying Prop 13 protections.

http://www.latimes.com/news/local/la-me-0710-lopez-mayoronprop13-20110710,0,3252606.column

Yeah, they both went bankrupt and lost their seats on the NYSE after a couple of maverick upstarts thwarted their attempt to corner the market in frozen concentrated orange juice.

Oh... wait.. that was 1982's "Trading Places"

My mistake.

Seriously though, even LV looked horrified at the post-Potter carnage!

EMan says

I support tax loopholes going away, just too many who get them kind of enjoy the free perk on the back of others and call it a tax increase if these are gone.

I support removing tax loophole as long as parents have to pay the same taxes as non-parents.

Dumb Asses, the electric non existent trains don't run out there...
how on earth could they shop at Trader Jose and Hoe Foods living out there?

They must love Ferin Oil.

What's the matter with them, $800,000 1 BR town houses too good for them?

At $8/gallon gasoline there will be a re-think, with many young people moving to downtown outdoor non-luxury condos with open heat vents.

The city can be really disgusting, but it's hard to see how the 'burbs will do well if it's so expensive to get to a job. Rural areas, on the other hand, will see a rebirth, as young people flock to the new growth sector of the job market: manual agricultural labor.

"More intriguing, and perhaps counter-intuitive, “hip and cool” core cities like San Francisco, New York and Boston have also suffered double-digit percent losses among this generation. "

As it was true in the past, you find after 10 years, your life living next to the gutters, spending everthing you earn, and little to show. Hopefually you didnt fall in the bad crowd and picked up bad habits/addictions like so many have in the past. Living in big cities can become self destructive in the long run.