Treasury Secretary Snow warns Congress: US government's cash running out

[Satisfaction 1]

I think we should ask Duck Cheney for a loan. The lawyer-sniper (innocent ) currently receives between $150,000 and $250,000 per year in "deferred" salary from Halliburton and has stock options that (if Halliburton's stock rises....ah-hummm) stand to provide him close to a hundred millions of profit in the next decade.

[Satisfaction 1]

I find amazing that governments are always telling us there is not enough money for health services, public transport and so on. Yet they are ready to embark on a "long war" without a definite end that will cost just the US $$$$$ billion (not to mention that the US military has already stretched to the limit because of the Iraq and Afghanistan wars).

Why don't US taxpayers just give their money directly to Halliburton shareholders ?? - thereby saving the need for the smokescreen of "a long war" against anybody . Good scam though!!!

[Texanadian 10]

Why don't US taxpayers just give their money directly to Halliburton shareholders ??

I believe they sort of do.

About the debt and deficit. When there are deficits, the US government has 2 options.

1) Create government bonds that pay out interest in the future for a quick fix of cash now. Not the greatest situation. But it pays the bills for today. Since the government has always paid the interest on these, their credit rating for bonds is good.

If not enough people buy bonds, we have number 2.

2) The Federal Reserve can print more money. This of course gives us inflation. So even in times of low inflation, there is a hidden extra level of inflation that most people don't pick up on. As a side note, since the Federal Reserve was created in 1913, inflation has gone up by over 1800%. In the hundred years prior (when you had to have gold to create money) the inflation level dropped by roughly 50%.

The early 1980's economic boom in the US wasn't so much the tax cuts that the Reagan government pushed through (since they didn't cut the growth of government), it was the steady stream of money by the Fed. Reserve from 78-84. When they went back to trying to manipulate the currency, we got the market ups and downs of the later 80's.

Choice # 1 is better than # 2. But with a debt ceiling maxed out, they can't borrow money. Hence we only have # 2, which makes for a heck of a devalued currency. This is probably what happened in Argentina (I don't know about their situation).

As for taxing rich people. Basically there's a half circle curve. You can squeeze more tax money out of them but at a certain point, you lose money. Tax avoidance goes up. People work less. People don't expand as much. Look at England with their 90% top tax bracket or the US with their 70% top tax bracket. Things just don't happen. The business owner doesn't work 70 hours a week. They work 50. But that's not to say that lowering taxes while keeping spending the same will allow the tax cuts to pay for themselves. Clinton raised taxes his first year and managed to bring in more revenue every year. When Bush Jr came in during 2000, they looked at the books and saw that revenue was good and thought it's time for tax cuts. What they missed is that a large chunk of that money was from capital gains from the tech boom. So with the tech bubble bursting at the same time they cut the income taxes, we went for deficit city. Add on that the Bush government has grown at a rate larger than Clinton's and even larger than Reagan's, and we have record deficits.

Basically we need some serious cutting of spending. Of course the way they word things, they'll reduce the growth of spending on something from 15% over the next 5 years to 10% over the next 5 years and then turn around and say they cut spending by 5% right there.

We need a constitutional amendment that only people from New Hampshire can have control over the budget.

[Scott & Lai 12]

Here's a thought: They could actually try cutting spending (not just the rate of increase, but the baseline), and limit the government to what the Constitution permits

Edited March 15, 2006 by Scott & Lai

[Satisfaction 1]

Here's a thought: They could actually try cutting spending (not just the rate of increase, but the baseline), and limit the government to what the Constitution permits

I heard the same - oh so too often - about cutting down on "State spending"! Not quite successful.... Except perhaps in Massachussets, which didn't raise property taxes last year even though its budget spending was actually on the rise.

I just read this morning the latest scandal: NJ corrupt "school superintendants". This article publishes the latest findings of an audit in boards of education / administrations throughout the state that are ripping off tax-payers of $$$$$$ in illegal and exhuberant wages and allowances, i.e."unused" sick and vacation days, free cars (are 4 cars just enough for one person in a household?), homes.... What is a $200,000 salary for a super? Just a drop in the ocean really.

Inflation where? What are we talking about??

[meddykomp 0]

A question for people who know these things:

What happens if the ceiling is not raised and the government is unable to pay its bills?

Oh no ... they wont be able to continue financing the war ... oh wait .. that cant happen .. they will simply have to stop helping Americans get a college education .. later we can deal with the increasing ignorance in our country as the percentage of the population that is educated decreases.

[ChristinaM 0]

I had a hunt for information about what would happen if the government can't pay its bills anymore, and I got totally confused. Please can someone explain it to my tired little brain in a short, easy-to-comprehend manner?!

[pax 0]

http://en.wikipedia.org/wiki/U.S._public_debt

[ChristinaM 0]

Thanks Pax.

Am I not reading it correctly, or is that article somewhat politically slanted?

[pax 0]

I think the section on "Projecting the Future Debt" could be read as politically slanted, maybe. Wikipedia is an amazing resource, but the fact that it has no single author or editorial board, every article could have been written by any number of people, some of whom may have been writing to advance an agenda.

But then again, I'm not sure that caveat doesn't apply to most writing out there, even something as "objective" as an encyclopedia, dictionary, or almanac.

[ChristinaM 0]

Isn't one of the points of writing anything to advance a particular agenda?! It's very hard to be completely objective about anything.

Thank you

[Sister Fracas 5]

Here's a thought: They could actually try cutting spending (not just the rate of increase, but the baseline), and limit the government to what the Constitution permits

well there goes the government run healthcare for ALL Americans that some folks think is necessary......

Edited March 17, 2006 by Frances

[pax 0]

The government is already indirectly subsidizing the uninsured and underinsured to the tune of billions a year.

We're running a wee little war over in the Middle East that ain't cheap.

[Sister Fracas 5]

The government is already indirectly subsidizing the uninsured and underinsured to the tune of billions a year.

We're running a wee little war over in the Middle East that ain't cheap.

yes, I know that....and I guess that's more important than taking care of the folks at home....

[pax 0]

I did not think the war was a particularly good idea, mind you, I'm just saying that we are still having one.