Keeping the blogosphere posted on the goings on of the world of submarines since late 2004... and mocking and belittling general foolishness wherever it may be found. Idaho's first and foremost submarine blog. (If you don't like something on this blog, please E-mail me; don't call me at home.)

Friday, November 09, 2012

Some News Items

Here are some items of interest:

1) Submarine arsonist Casey Fury pled guilty and faces a recommended 15 to 19 year sentence. Although I would have loved to see them go for life, I'm really hoping they put him on the hook for the $450 million in damage after he gets out, such that the maximum allowed portion of his post-prison income goes to restitution.

2) A Russian Sierra II attack submarine (or "Seirra 2", according to ABC) has been detected off the East Coast, and is now heading home. It's a good sign of US-Russian cooperation when they send their boats to us for our submarines to get their training in. Thanks, Vlad! I'm just hoping that boats returning from deployment don't get delayed from coming home to join in the fun.

3) USS Boise (SSN 764), named after the capital of Idaho, celebrated the 20th anniversary of her commissioning this week, and returned from deployment yesterday, the day after the anniversary. I note with interest that she deployed on May 2nd, and returned from deployment on November 8th. I guess LANTFLT is adding 6 days to normal deployments nowadays. Here's an article with a video, and a picture:


4) The Iranians fired, unsuccessfully, on a U.S. drone over the Arabian Gulf. Having spent a deployment on a carrier in the Gulf and becoming very familiar with the Iranian claims of territorial waters vs. what we recognize (the Iranians claim some "straight baseline" water more than 12 miles from their shore that we correctly state is not in accordance with international law), I have no doubt that 1) our drone was over international waters as we recognize them, and 2) the  drone was over waters the Iranians wrongly claim. When we were seizing Iraqi tankers back in 2000, we'd board them in those "grey" area waters, since the Iranians gave the tanker skippers charts showing how they could stay in Iranian waters, and they included the portions that we didn't recognize. I'm glad to see we're continuing to defend the international standard in determining territorial water, and hope we don't back down from the mullahs.

5) On a personal note, I just remembered I posted this right after the election 4 years ago. Now cancer-free for 44 months. Thanks to all the readers who supported me back in the day and throughout the process.

112 Comments:

Anonymous Anonymous said...

Here's another news tidbit, speaking of elections. In the 3 days since the presidential election, the Dow Jones industrial average has dropped nearly 500 points.

11/09/2012 10:42 AM

 
Blogger Bubblehead said...

Yes, investors are really worried the Republicans will fail to recognize they lost the election, and will plunge us off the fiscal cliff in order to assure that the Kardashians and Miley Cyrus don't have to pay the same tax rate the upper 2% paid during the '90s.

11/09/2012 10:45 AM

 
Blogger Bubblehead said...

I should say "make a stand", since if they don't compromise the Jay-Z's and Lindsay Lohan's will still see their taxes go up, since taxes will go up for everyone without Congressional action. They'll hold tax cuts for the 98% hostage to try to force us to accept that Charlie Sheen needs more money.

11/09/2012 10:48 AM

 
Blogger Vigilis said...

While veering to contemptuous politics, open-minded individuals should be more apprehensive and less partisan about our two major political parties.

For instance, did you know that Obama won 8 of the nation’s 10 wealthiest counties by very healthy margins? http://www.cnbc.com/id/49726054

According to Jeff Connaughton, a lawyer and Biden Senate staffer turned lobbyis, "Democrats aren’t much different than Republicans when it comes to selling out.

Connaughton describes the Washington taxonomy of the lobbyists, consultants and lawyers he calls “Professional Democrats.”

“If the Marine Corps’s hierarchy of allegiance is unit, corps, country, God, then the hierarchy for a Professional Democrat is current firm, former-elected-official boss, the congressional Democratic leadership, and the president (if he or she is a Democrat).” Jeff Connaughton, author of “The Payoff,” Sept 2012

While wage-slave voters are disparaging each other over political parties, some are living very comfortably behind a blameless shield of respectability in the wealthy counties that supported Obama. Voters may soon wish they had dropped the divisive partisanship to focus instead on the nameless lobbyist-lawyers who benefit from government waste, fraud, abuse, and public treachery.

11/09/2012 11:49 AM

 
Blogger Mike Golch said...

44 months cancer free,Hand Salute!

11/09/2012 12:01 PM

 
Anonymous Anonymous said...

Joel, you are a smart man, so you must be aware that there is no such tax bracket as the "upper 2%." There are 5 tax brackets, and the "upper 2%" pay the same as the other "upper 18%" on income taxes. That rate is 38% before any deductions. Factoring in the portion made by capital gains in this group and deductions, the top 20% of income earners end up paying about 20% of their income in taxes.

Source

Where the upper 2% differs is that they make a greater proportion of their income from capital gains vice conventional paychecks. Those capital gains are taxed at 15%. But they are also charged at 15% for people like Sailors who invest in retirement. If you raise the capital gains rate, you raise it on everyone.

I have yet to hear either party discuss the posibility of changing the capital gains tax rate to adjust for overall income.

There is also the complication that in a global market, raising taxes will just make those top 2% find a foreign bank that has lower rates. Collecting 15% domestically is better than collecting 0% abroad. We already caused our low skill jobs to be outsourced through high minimum wage laws, which then prevents people in high school and college from getting those summer job experiences to build a resume and some kind of work credibility.

Before anyone gets on about a "living wage," in my time working in fast food, part-timers like me got min wage while the full timers got $11/hr plus health benefits. This was in the 90s. Employers know it's not a good practice to pay full-timers min wage because when people jump ship for higher pay, it reduces productivity which reduces overall profit. So amazingly, you could get a Whopper meal for $3.25 after tax, now it's almost up to $9 15 years later... 300% more expensive. And you don't see too many teenagers flipping burgers there anymore...

11/09/2012 1:00 PM

 
Anonymous Anonymous said...

Source to above:

http://en.wikipedia.org/wiki/US_Income_tax#Effective_income_tax_rates

11/09/2012 1:01 PM

 
Anonymous Anonymous said...

Two or three buckets of cold water of truth seems in order:

#1 Obama isn't the only one that just got re-elected...so did the heavily Republican Congress. So Republicans won, too. They retained 60 of the 63 gains they made in 2010 as well.

#2 Obama's approval is declining...not improving. He's one of just 3 presidents re-elected with a declining % of the popular vote. So the only real difference between before the election and afterwards is that the growing disapproval of Obama has been quantified. There is no magic carpet ride of mandate awaiting him.

#3 Eating and having cake is possible: Obama can have greater taxes on the wealthy and Boehner can have no increase in the tax rate. How's that work? Simple...Flat tax with no deductions. Too many wealthy (e.g., General Electric!) pay no taxes despite enormous incomes. So this situation is very fixable...but it will take a crisis to make each side recognize it as the right thing to do, and they can both then declare victory. Losers in this process: the pork-festing Congress (Ds and Rs), who loves to skew fairness in taxes via 'tax incentives.'

11/09/2012 1:48 PM

 
Anonymous Anonymous said...

P.S. Honest injun -- I had only just left TSSBP website for the WSJ, and lo' and behold found this on the front page:

"Door Is Opened to Deal on Tax Breaks
Obama and Boehner, in separate statements, left open the possibility of raising revenue by limiting tax breaks for the wealthy, a hint at a possible compromise in fiscal talks. 1:47 PM"

(BTW...I am part American Indian, and we do not refer to ourselves as hyphenated "Native-Americans"...that's role is left to the double-talkers in life.)

11/09/2012 1:59 PM

 
Anonymous Anonymous said...

On another news front, General Patraeus just resign as head of the CIA citing "poor judgement" in having an extra-marital affair.

Where have all the heroes gone!

11/09/2012 2:36 PM

 
Anonymous Anonymous said...

Nice straw man. Y

Congress could set as many tax rates affecting whatever proportions of the population that they wanted, using "laws". So Congress could easily set a 6th tax bracket that kicks in for income over $250K.

So when Obama says he wants to raise taxes on the top 2% he is saying exactly what he means to do. He wants to write a law that sets a tax bracket at 39.6% for income over $250K/year.

Also, you don't understand Capital Gains Taxes at all. If you are a sailor that is investing in retirement, why are you not using tax advantaged accounts? You are literally allowed to put 100% of your income into the ROTH TSP, which would never be taxed at the Capital Gains Rate.... ever. The rules could be written to allow for the current exemption to stay in place for homes.

-- I'd like to see a source for a $9 whopper... Is that in NYC or San Francisco? There probably ARE $11/hour McDonald's workers, because everywhere is subject to the local labor market... but I can assure you that my Brother in Law who has worked for years at Wendys (during college/High School) never made $11/hour. I think he topped out around $7, and got about a nickel per year raise.

The rest of the stuff is pure conjecture. There is no empirical evidence that historically high tax rates significantly lower economic output or that historically low tax rates significantly raise economic output.

I am also curious of this tax scheme that allows one to put your money into a foreign bank and not pay taxes on it. Again, there are tax loopholes, but the particular tax scheme you are suggesting does not exist. Tax shelters are much more complicated than putting your money in an ING account, otherwise why wouldn't everybody do it?

I feel like you are artificially limiting possible government actions to make your argument. They can write laws to do just about whatever they want with taxes.

I think the bottom line is that IF you think the deficit is a problem, there is only two ways to deal with it.

1) Raise Taxes
2) Cut Spending

Cutting spending GUARANTEED to hurt the economy. Period. See Greece and the UK for how well Austerity "works". Both are in worse positions than they were before.

But in reality, the choice between cutting spending and raising taxes is a false choice. There is no economic reason to do either one, right now because the economy is at less than full utilization. The government CAN NOT cause inflation when there is excess capacity in the economy.

11/09/2012 2:51 PM

 
Blogger KellyJ said...

Gee, it's announced that a Sierra II was playing around the East Coast and the Boise just happens to have a deployment thats about 6 days longer than the norm.
Sometimes 2+2 does equal 5.

11/09/2012 3:16 PM

 
Anonymous Anonymous said...

Petraeus just resigned. Extramarital affair.... Just another "American Hero"

11/09/2012 3:44 PM

 
Anonymous Anonymous said...

Two or three buckets of cold water of truth seems in order:
Some Facts:
#1: Democrats won the POPULAR VOTE in Congress as well. The ONLY reason that Republicans hold onto the house is Gerrymandering via the redistricting process. So, I wouldn't be too certain that the American people approve of the Republicans job in Congress.



#2 1a) 2008 was a total rout. It's going to be hard to beat that.
1b) The vote count isn't finalized, so you are making an assumption that the rest of the votes to be counted look like what's already been counted
1c) So what? He still won over 50% in both EV's and PV.

#3 The Flat tax is highly regressive due to payroll taxes. If you were to uncap payroll taxes and apply them to Capital Gains, you could fix the regressive problems, the Medicare Budget Problems, and Social Security Budget Problems.

But one way or another, somebody has to pay more taxes, there is no way to squeeze more money out of the system without raising taxes paid on somebody, you are just recharacterizing it in a way that places more of the burden on the poorest people.

I personally think we should just punt on the whole package, both the tax raises AND the spending cuts until the economy is at full employment. If Cheney was right about one thing, it's that deficits don't matter (as long as you are in a recession).

11/09/2012 3:55 PM

 
Anonymous Anonymous said...

"Democrats won the POPULAR VOTE in Congress as well."

Could you please provide a citation for that very specious "fact"? I very much question the validity of it. You can't spread the numbers of people voting across districts and have any integrity left in the result...regardless of re-districting.

An imaginary 'perfect districting' is just that.

11/09/2012 4:00 PM

 
Anonymous Anonymous said...

@ anonymous 251pm,

The 250k+ tax bracket already exists. It is called the "top quintile." Twenty percent of Americans make over $250k. Way to buy the dems bs on that one.

You pay capital gains on the interest made on retirement accounts, too. Thats why you get a tax form 1050 for them. Roth accounts don't save you from paying capital gains, they save you from paying higher income tax if you go up tax brackets while collecting if the money gets that large.

I am simply limiting the choices to what is feesible to pass through Congress. Hell, they could overhaul the tax system and implement the fair tax system, but that has little chance of passing. Likewise, I can't see a bunch of politicians, whose campaigns are funded by millionaires, suddenly create a new super wealthy tax bracket. Even if they did, it would be moot because they make the vast majority of their money from capital gains on investments. The only people that would affect significantly are athletes and celebrities who collect most of their money from traditional paychecks.

11/09/2012 4:07 PM

 
Anonymous Anonymous said...

@ anonymous 251pm,

The 250k+ tax bracket already exists. It is called the "top quintile." Twenty percent of Americans make over $250k. Way to buy the dems bs on that one.

You pay capital gains on the interest made on retirement accounts, too. Thats why you get a tax form 1050 for them. Roth accounts don't save you from paying capital gains, they save you from paying higher income tax if you go up tax brackets while collecting if the money gets that large.

I am simply limiting the choices to what is feesible to pass through Congress. Hell, they could overhaul the tax system and implement the fair tax system, but that has little chance of passing. Likewise, I can't see a bunch of politicians, whose campaigns are funded by millionaires, suddenly create a new super wealthy tax bracket. Even if they did, it would be moot because they make the vast majority of their money from capital gains on investments. The only people that would affect significantly are athletes and celebrities who collect most of their money from traditional paychecks.

11/09/2012 4:08 PM

 
Anonymous Anonymous said...

News: Lockheed incoming CEO resigns over an affair as well.

http://www.bbc.co.uk/news/world-us-canada-20277710

11/09/2012 4:21 PM

 
Anonymous Anonymous said...

The notion of a "popular Congressional vote" for Democrats is just ridiculous.

Take it to the extreme. If there were only two Congressional districts in the United States -- one in NYC with millions of ghetto rat Democrats, and one in the entire state of Wyoming (extremely Republican) -- you're saying that the 'popular Congressional vote' completely rules out the voting rights of the folks in Wyoming?

That's a lot of stupid in one statement.

Each Congressional district stand on its own. If the Democrats would have won 'the popular vote' in more districts, they'd have recovered a whole lot more than 3 out of 63 lost districts from the 2010 race. Redistricting happens...including by Dems. Get over it.

11/09/2012 4:39 PM

 
Blogger Vigilis said...


"The affair is likely the excuse used today." - Steven Davis II

Not only is your speculation spot on, but I had predicted Petraeus's voluntary exit on another blog several days ago (over Benghazi).
He is too honorable either to be an accomplice to the lies that have been submitted, or to dishonor his commander in chief.

Since Obama won and cover ups will continue, there were just no other plausible choices for Petraeus.

Need substantiating evidence that I am correct?

First, the good general has been battling prostate cancer, which makes such an affair problematic. But, even more to the point, his wife Holly is in on his graceful exit ploy and divorce is highly unlikely. Finally, the alleged paramour is a Harvard grad lawyer (but USMA - West Point graduate) likely to be incommunicado as well. Just a few sanity tests.

As usual, time will certainly reveal the truth either way. Some of you detractors may wish to hold your powder.

11/09/2012 5:38 PM

 
Anonymous Anonymous said...

Anon @ 4:07 PM

Are you just making up information?

The top 5% of household income starts at $158K.

source: http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Quintiles

You DO Pay capital gains on a Traditional IRA or 401K, when you withdraw money, but you do not pay it on a Roth IRA or 401K, ever. You just pay normal income tax on the money going into it.

source: http://www.fool.com/investing/ira/2008/04/04/the-best-stocks-for-your-ira.aspx

quote: "If you want immediate tax savings, a traditional IRA is the right move for you; it will allow many taxpayers to take a tax deduction right now. In picking stocks for a traditional IRA, the most important thing to consider is that you won't have to pay tax on any income or capital gains until you start taking money out of your account when you retire."

I don't think I would write anything off of the table now. The Democrats have a lot of leverage now, if they use it properly (though they probably won't because they are terrible at that). Obama and the Senate could easily just sit on their hands and let everything expire and challenge the Republicans to vote against middle class tax cuts. If Obama keeps his spine, they will eventually fold, or suffer the consequences.


@Anon @ 4:39 PM
The notion of a "popular Congressional vote" for Democrats is just ridiculous.

I disagree. What you are really advocating is Minority rule. There are reasons for congressional districts, but they should be set by bipartisan or nonpartisan committees and at least sort of reflect existing geographic, county, or city boundaries.

There are valid reasons to have congress be set geographically, but you should not have a situation where one party wins 55% of the vote and ends up with 1/3 of the seats of Congress. It's not truly representing the will of the citizens of that state writ large. The worst part is it encourages extremism, because you have a high portion of both parties sitting in relatively safe seats. So the Dems will be the liberalest dem candidates they can put forth and the Republicans will be the Tea Partyingest Tea Partiers the Republicans can find. This is not a good recipe to actually get things done and is guaranteed to result in lots highly controversial legislation that doesn't reflect what the populace wants.

You are right that both sides do it. R's did it in Ohio and PA and Texas, and Dems did it in Maryland and California and Illinois. It is wrong in all 4 examples. In all 4 cases Demographic effects will likely lessen the impact over the next 4 years or so.

Taken to the extreme you are advocating that it's ok to essentially "cheat" your way into rule by the minority party in a state. That said, only one half of 1/3 of the government is decided this way, so that's where the balance of powers comes in. It is more troubling in State government than federal.

All in all, I think split rule is preferable, assuming that all sides are willing to work together for mutually acceptable solutions, since a majority of the population is actually somewhere in the middle anyway. Right now, I don't have any confidence the Dems and Repubs are going to play nice, however, which is bad for all of us.

I am probably one of the few people on here that switches parties pretty frequently. I voted for Bush twice and Obama twice, mostly because I just want a non-extremist government that can get things done without stopping all development to save owls or threatening to bring the whole government crashing down around us with debt ceiling games.

I never split ballots, and normally vote for whichever party seems saner at the moment (since they seem to fluctuate in that respect pretty frequently too). Right now that's the party that doesn't dress up as Captain America while claiming the President was born in another country. Hopefully, in the next two years that changes some.

11/09/2012 6:01 PM

 
Anonymous Anonymous said...

I like to think that Petraeus was sleeping with the Lockheed CEO.

11/09/2012 6:03 PM

 
Anonymous Anonymous said...

Given the context that Petraeus had an affair with his biographer, the book is named very unfortunately... "All In"

11/09/2012 6:10 PM

 
Anonymous Anonymous said...

Happy Veterans day all!

11/09/2012 7:01 PM

 
Anonymous Anonymous said...

Here's a more than slightly ironic video interview of the general's squeeze on The Daily Show. Nice rack.

11/09/2012 9:23 PM

 
Anonymous Dan from SSBN 740 said...

We once tracked a Sierra II for hours. Ohios can track everything ever put to sea

11/09/2012 9:24 PM

 
Blogger Bubblehead said...

As far as the total House popular vote, the sources I've seen that say Democrats got more votes to not include races where a candidate was unopposed. When you add those in, Republicans got 48.64% of the total vote, Democrats 48.48%, so the Republican House candidates got about 200K more total votes.

11/09/2012 10:01 PM

 
Anonymous Anonymous said...

^^^ Gee...why do I suspect that the Dems are now no longer enthralled with the heavy implications (to them) of a 'popular Congressional vote'...?

Or worse...they'll still love the idea, but without any plausible justification will throw out the unopposed races, as they're just so terribly inconvenient to their Barry narrative.

Obama got into office via data mining and targeting for voter registration only those American voters who were likely to support his cause. He produced the greatest gender and marriage gap in history as a result.

Nice "democracy" (/sarcasm off).

11/10/2012 5:46 AM

 
Anonymous Anonymous said...

Re. Petraeus: "Omnia Vincit Amor"

(That's Latin for "nice rack." ;-)

11/10/2012 6:05 AM

 
Anonymous Anonymous said...

Can someone explain what a tax increase on a few people will actually achieve? I realize the political class warfare implications but I’m asking about real fiscal accomplishment.

Joel, you seem to think this is a good idea. Why do you like it? What will it fix?

11/10/2012 11:54 AM

 
Anonymous Anonymous said...

It won't accomplish anything, but neither will spending cuts. That's the double-edged sword.

It only has any meaning IF you think the deficit is a problem, which it's not.

FYI, I don't know anyone that is advocating that Congress should move to a popular vote. Just that a few days ago the democrats had more votes for their Congressman than Republicans did for their Congressman. It's an interesting factoid, not a policy proposal.

Apparently, according to Joel that might no longer be the case. However, it will be a few weeks before all the votes are counted anyway, so it is subject to change.

11/10/2012 12:29 PM

 
Anonymous Anonymous said...

Now you are upset over Get out the vote efforts?

Until we have mandatory voting like Australia, getting your guys to the Polls is how you win! At least, unlike the Republicans he didn't try to actually keep anybody from voting.

Disenfranchisement, Gee, nice democracy!

Note: I think we should just require everyone to vote. It would end the unsavory parts of elections (micro-targeting GOTV efforts, disenfranchisement, and things like Robo calls that tell Latinos to vote on the wrong day).

11/10/2012 12:33 PM

 
Anonymous Anonymous said...

"Can someone explain what a tax increase on a few people will actually achieve?" - Anon 11/10 11:54 AM

First, the tax increase on the "few"
is just the age-old ploy to raise taxes that middle class taxpayers will soon have to pay.

The bipartisan compromise now under discussion does NOT raise tax rates, but would reduce or eliminate deductions like the
popular mortgage interest deduction. Yes, millionaires might lose most of the current deduction, BUT...

Every time (there have been no exceptions to this since the IRC was established) the tax code has been "overhauled", "simplified", or "reformed", new loopholes have been made available only for those wealthy enough to afford "expert tax guidance". Why? Tax lawyers thrive on deciphering the arcane legalese of new loopholes for their wealthy clientele.

Since it usually takes at least 10-15 years for tax interpretations to become public (through court cases and clarifying regulations) with Congress's help tax lawyers effectively stifle competition from all but the larger CPA firms.

Example: how long have you known about the "carried interest tax deduction" the wealthy Obama supporters and Romney use? It has been around since 1972!


11/10/2012 11:29 PM

 
Anonymous Anonymous said...

There is no bipartisan compromise in the works to get rid of the mortgage deduction. In fact there is no bipartisan compromise in the works, AT ALL! Both side have dug in and are sitting on their hands until the other blinks.

I would like to see a link to that.

11/11/2012 8:30 AM

 
Anonymous Anonymous said...

I would simply be happy with Congress repealing the bill that allows a Senator to utter the word Filibuster to block a bill, rather than actually having to get up there and talk for days on end. We'd see a lot less deadlock coming out of Congress and a lot more *gasp* compromising to reach a viable solution, particularly with a Republican controlled House and Democrat controlled Senate (sidenote: I'll never understand why America would not elect the same party to the Presidency and majority control of Congress. It just creates more deadlock). Instead, the minority party in the Senate knows that they can just filibuster almost anything they don't like unless there is a super-majority, which there rarely is.

11/11/2012 9:21 AM

 
Anonymous Anonymous said...

I guess Joel is not going to respond to the question. Fair enough, it's his blog.

Silence is the typical response to this question by those who want the "wealthy" to pay "their fair share". It's great class warfare babble for the uninformed but it doesn't fix anything.

What gets fixed if the Kardashians, Miley Cyrus, Jay-Z, Lindsay Lohan, Charlie Sheen, etc. pay an extra couple of points on their tax bill? It’s a silly argument for a smart person to even bring up. Does it matter today what they paid ten years ago? Where’s the plan?

It would be great to see a politician with the guts to go after real reform. The problem is those guys don’t get elected.

Slightly over half of the people have spoken and so it’s time for congress to get out of the way. Give the Democrats whatever they want and let them own it.

I for one would be happy to be wrong.

11/11/2012 9:56 AM

 
Anonymous Anonymous said...

I've read that gerrymandering, which was first done in Massachusetts way back in the day, is also required by the Voting Rights Act in order to ensure minorities received representation in districts where they have large numbers.

11/11/2012 10:57 AM

 
Anonymous Anonymous said...

Bipartisan compromise on mortgage interest deduction certainly under discussion:

NOV 9th -
"You could get significantly more revenue by capping deductions at 2 percent of income, as Harvard’s Martin Feldstein has proposed, which you could also limit to upper-income earners. But that would put a much bigger squeeze on tax breaks that have staunch defenders, like mortgage-interest deduction."

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/11/09/a-possible-compromise-on-the-bush-tax-cuts/

11/11/2012 10:59 AM

 
Anonymous Anonymous said...

"Slightly over half the population has spoken..."

Yea, and they also elected a Republican majority to the House, and it wasn't so that they could sit in the corner and color while Obama tries to raise taxes with no hint of government fiscal accountability to go with it.

Raising taxes right now to fix the budget is like lending a person with bad credit more money. You know he's just going to piss it away, but for some reason you expect a different outcome this time.

11/11/2012 1:50 PM

 
Anonymous Anonymous said...

The standard deduction is 5950 for single and 11900 for married filing jointly; this is well over 2% of gross income for over 90% of America. For the bottom 5th, it's over 60% of their income.

Capping deductions isn't a bad idea, but it would have to be graduated based on gross income.

11/11/2012 4:03 PM

 
Anonymous Anonymous said...

"the bill that allows a Senator to utter the word Filibuster to block a bill"

This modification to the cloture rule probably was a reaction to some famously long filibuster speeches. In one, a Senator (possibly Everett Dirksen of Illinois) simply read the New York Times cover-to-cover to his colleagues (some asleep by the end of the "speech").

Senator Strom Thurmond appears to hold the record of 24 hours and 18 minutes for a filibuster speech.

11/11/2012 5:16 PM

 
Anonymous Anonymous said...

You need to remove the cap on SS taxes so those over $110k are still contributing. That move alone covers ~80% of the SS shortfall.

Until we go to a flat tax, everything else is pushing numbers around the page.

Tax capital gains as ordinary income.

I support the tax plan for those over 200/250 to pay higher rate.

Do you really want a guy like Romney paying a lower rate than someone making $50k? I don't.

Mortage deduction is baked into the cake so you can color me shocked if they touch it. For most of Americans who own homes, it's the #1 deduction. It's also why Romney's tax plan had no details because to lower tax rates on the wealthy (ie, 20% tax cut for a millionare is way more meaningful than a guy making $40k) while removing a few key decuctions for middle class ain't going to fly.

For those who think we should "fend for ourselves", I'd like to see all of you have to waive away medicate coverage and a host of other social programs. And those who would sign are most likely government retirees whiel the majority of Americans would not take the route ;)

Put your money where your mouth is with your idealism.

11/11/2012 8:00 PM

 
Blogger Harold said...

"You need to remove the cap on SS taxes so those over $110k are still contributing. That move alone covers ~80% of the SS shortfall."

BUT- SSI is Social Security INSURANCE. if you cap what can be paid out, but not what can be paid in, then it is no longer insurqance, it is a SCAM! Or are you saying the government is lying to us?

11/11/2012 9:38 PM

 
Anonymous Anonymous said...

"Tax capital gains as ordinary income." - Anon 8 PM

Really? Is that based on the theory that capital gains are not "earned
income" (like welfare transfers of over $60,000 per family)? If so, let's tax welfare payments as well.

Or, is taxation of capital gains based in your mind on the fact you
that you are a parasite who never risks investing?

11/11/2012 9:55 PM

 
Anonymous Anonymous said...

This parasite happens to work one rung below numerous full blown level-C employee millionaires.

They aren't out trying to create jobs and turn that money into the next mega company. In fact, they're squirling it away.

Watch this part as it reminds me of people like you:
http://www.youtube.com/watch?v=Vsql45M4c64

Are you one of the "pre-rich" (you know, in your MIND)?

11/11/2012 10:39 PM

 
Anonymous Anonymous said...

Hey Republicans, this is why you lost the elections (they are you):

http://www.youtube.com/watch?v=7PJ6IQT_OKM&feature=related

11/11/2012 10:47 PM

 
Anonymous Anonymous said...

harold:

Uncapping FICA fixes Social Security even if you don't cap out the returns, and just adjust back based on the normal formula.

SSI has always been a wealth transfer program... you are just now realizing this?

11/12/2012 5:22 AM

 
Anonymous Anonymous said...

Yea, and they also elected a Republican majority to the House, and it wasn't so that they could sit in the corner and color while Obama tries to raise taxes with no hint of government fiscal accountability to go with it.

http://www.nydailynews.com/news/politics/democrats-lose-congress-due-redrawn-maps-republicans-article-1.1199799

I'll just throw out there that over half of the population voted for Democratic Congressman as well.... I wouldn't read too much into the "mandate" for Republicans.

11/12/2012 5:26 AM

 
Anonymous Anonymous said...

1 - Social Security Insurance does not function as an insurance, regardless of its title. It functions as a government subsidy, like farm subsidies.

2 - Businesses do not PAY taxes. They COLLECT taxes. Business "taxes" are a pass through cost of doing business, just like payroll, utility cost,facility costs, etc.

11/12/2012 7:09 AM

 
Anonymous Anonymous said...

Social Security Insurance is Social Security Insurance...not "What's-in-it-for-good-ol'-selfish me" Insurance.

Slow down and read, for heaven's sake.

SSI is a form of forced altruism, but one which was initially voted for and modified over time by the American people's representatives.

Those saying that the caps need to be removed are 100% correct. I would go one step further and say that those who do not need SSI payments in their elder years shouldn't receive them.

This is about taking care of YOUR parents in their old age, and your neighbors' parents as well. Think of it as a hat being passed in church...but one that you will contribute a fair portion to, regardless.

Have problems with that? Then you have problems.

11/12/2012 9:05 AM

 
Anonymous Anonymous said...

The Republicans have a serious image problem resulting from supporting outdated social policies and an inability to deliver on their party's bread-and-butter promise of smaller and limited government (usually because their definition of limited government need not apply to oppressive social laws and big defense spending). In order for them to go forward, they need to do the following:

-Give up on supporting the outlawing abortion on a national level. Polls show that over 70% of Americans favor a woman's right to choose at least through some parts of the pregnancy. Additionally, the right to lifers who make exceptions for rape are hypocrites; the fetus has a right to life or it doesn't. It had no choice in how it was conceived, so making exceptions for rape is a political olive branch used to try to gain favor with woman voters who are pro-choice, but people see through it.

-Give up the crusade against Gay marriage on a national level. Again, most people really don't care what other people do in the privacy of their homes, and all the talk about "protecting the sanctity of marriage" just comes across as bigotry to the average joe. Marriage licenses are issued by states, so they can all handle this on the state level.

-Actually deliver on promised government reduction. No, I'm not talking about cutting a few million here and there from Sesame Street; I'm talking about finding ways to cut 1.5 trillion dollars from our budget in order to balance the budget and start to pay off our debts national. It will require drastic reductions in defense funding and the scope of what we think we 'need' for national defense, raising the retirement age for those looking to collect social security, removing caps on SSI, repealing Obamacare, letting the capital gains rate stay at 20%, and slashing almost 100% of the 'discretionary budget.' Most Americans favor at least some of the above, and with a charismatic candidate who can articulate a sound plan, they could sell the majority on the rest.

-Stop financing national welfare programs like No Child Left Behind and bailouts to big business. These are not in-line with the party's core beliefs, and they lose moderates when the Republican party tries to claim it's not in the pocket of wealthy business owners and the party of small government.

11/12/2012 10:20 AM

 
Anonymous Anonymous said...

On the abortion topic: over 40% of children are born out of wedlock these days.

Here's a visual on how this has changed...including by race...since the 1950's, when an average of 5% were born out of wedlock.

The effects of abortion are a harsh thing, no matter what your principles/beliefs are...and they're similarly not psychologically helpful to the (former) mother.

But here's the thing: if fathers are not supporting the mothers who bear their children, are the mothers so wrong to say "watch this" (so to speak) when the fathers expect them to raise the child on their own?

11/12/2012 12:24 PM

 
Anonymous Anonymous said...

Why not cap the debt where it is and have Congress prioritize where the money we have goes?

Let's make some tough choices now to avoid even more pain later.

11/12/2012 12:41 PM

 
Anonymous Anonymous said...

"Why not cap the debt where it is and have Congress prioritize where the money we have goes?

Let's make some tough choices now to avoid even more pain later."

This is probably the worst idea of all time. And would cause a worse recession than the one we just came out of.

There is no reason to have an exactly balanced budget, and there are even better reasons to never actually pay down the debt.

The current level of deficit is probably not where we want to be LONG TERM, but is sustainable right now, until the economy is stronger.

I am so sick of deficit hawks unwittingly offering policies that we know will crash the economy. Again.

11/12/2012 12:54 PM

 
Anonymous Anonymous said...

How much money can we print before its completely worthless?

11/12/2012 1:19 PM

 
Anonymous Anonymous said...

^^^ What makes you think it has any value whatsoever right now?

11/12/2012 1:23 PM

 
Anonymous Anonymous said...

A cut in government spending would absolutely cause a huge recession... if you live in a Keynesian wonderland.

11/12/2012 2:56 PM

 
Anonymous Anonymous said...

The federal government can easily find 1.5 trillion to cut. For starters, we don't need to maintain a military larger than the next 13 industrial countries combined. We don't need them to wage two wars in the middle east for God knows what, but it certainly wasn't to secure the sovereignty of the several states. We don't need to award overpriced military contracts to a company who funds a Congressman's reelection (*cough* Electric Boat). We don't need to provide social security and public healthcare to every person who reaches 62 when life expentancy spans 16 more years. We don't need to provide unemployment to people for two years. We don't need the TSA to spend billions on the facade of security, the DEA to spend billions on conducting marijuana raids, and a slew of other worthless federal organizations. We don't need the federal government to bail out billionaires when their business models fail, and we don't need them to buy people's used cars. We don't need to provide free money to colleges, who in turn decide to raise their tuition because they know that the average amount a private person can afford is relatively constant and most employers want to see a degree. Ditto for healthcare and the insurance mandate that feeds overpriced healthcare service.

All of this stuff can go, but every single item will piss off at least one specialty group. So Congress tries to accomodate everyone, and in turn they accomodate no one.

And if history is any judge, the economy won't go to shit as a result of drastic spending cuts. Post WWII saw a drastic reduction in government spending, and the economy grew. It turns out that when there is a strong demand for something, an entrepreneur will innovate a way to provide it at an affordable price.

The biggest growing portion of the U.S. economy is public employees. Public employees, including politicians, make more on average than their civilian counterparts. That should not be the case. It is called public service for a reason, and it's not so that you can live comfortable in the top two income brackets when you factor in benefits and allowances.

What, exactly, is the federal government spending money on that is so crucial to the growth of the private economy? Do you really think that the stagnant unemployment rate and economy growth over the last four years would have been worse if the federal government didn't hand out money to big business, exponentially grow the military-industrial complex, and conduct costly drug raids in California because the Federal ban against marijuana overrides the state law that allows medicinal use?

11/12/2012 3:05 PM

 
Anonymous Anonymous said...

"What, exactly, is the federal government spending money on that is so crucial to the growth of the private economy?"

Solyndra?

Oh, wait...

11/12/2012 3:12 PM

 
Anonymous Anonymous said...

"What, exactly, is the federal government spending money on that is so crucial to the growth of the private economy?"

All the money that the government spends up back in the real economy. Once you take that extra money away... where do you think it's going to come from? If you cut $1.5 Trillion out of the economy right now, then the economy becomes $1.5 Trillion smaller. It's honestly that simple.

Will private industry catch up? Maybe... But initially it will take a huge hit as there will be $1.5 Trillion less dollars spread around amongst all of the various companies vying for your hard-earned dollar.

All of those government employees buy things, pay bills, own homes, and so on. All of the people on federal unemployment buy food, clothing, and so on. If you cut them off, than those things are no longer being bought, and the people who make money producing food, clothing, and so on... some of them lose their jobs, because of a fall in demand. This is not a difficult concept.

And, for the government to spend with a deficit when the economy is depressed is not inflationary. Every dollar that the government magics into existence by Treasury Bonds is used to buy "stuff". If those dollars go the way than less "stuff" is bought. Rather than buy 50 million cars per year people buy 30 million. There would be plenty of capacity to make the extra cars, but nobody would because there wouldn't be anybody to buy them. Instead, the government spends extra money during a recession to help keep the effects of this very very obvious phenomenon from making things even worse. Good government (which we obviously rarely have) then starts to back off of the extra spending when things are better.

The proof of Keynesianism is all around you. There have been several real-world experiments since the recession. Compare the economy of the US to any country that adopted austerity measures. The Eurozone had austerity, and their economy is heading back down, the UK had austerity, they just entered another recession. We implemented a stimulus plan, and relatively speaking, our economy is much better than that in any European country.

And for proof that deficit spending is not inflationary during the current time, look at interest rates, which remain near historical lows, and have for almost four years.


I know you mentioned WWII, and there are some things you should be aware of.

1) There WAS a recession after WWII, when the government pulled all of the war spending away.
2) The government never balanced its budget after WWII, and none of that debt was ever paid off. We continue to pay interest on it to this day, but nobody cares because relatively speaking it's not that much money, due to 60 years of inflation.

11/12/2012 3:44 PM

 
Anonymous Anonymous said...

http://presspass.nbcnews.com/_news/2012/11/11/15089281-white-house-grand-bargain-offer-to-speaker-boehner-obtained-by-bob-woodward#.UKCJftkTtS8.twitter

Here's a link to a leaked memo from the "Grand Bargain" in 2011, that was never approved.

Note on the list two items that should be pretty important to everybody here. They were going to cut Military Retirement and TRICARE for retirees in this deal...

So for those of you banging the austerity drum, be careful what you wish for, you just might get it.

11/12/2012 5:19 PM

 
Anonymous Anonymous said...

anon @ 11/12/2012 3:44 PM,

Do yourself a favor an look up the pie chart for all tax revenues by the US treasury. Use the CBO as this is already in a nice, easy to read format.... Don't forget the interest the US Treasury actually collects as well (often left out by political pundits).

Now do the same for the expenditures that Uncle Sam pays out.

Reading some of these posts just shows how much financial illiteracy drives ideals. Guuess I should not be shocked since we're on a sub blog.

Then, go

11/12/2012 5:21 PM

 
Blogger -J.Darling said...

Congrats on the 44 months cancer free! My dad has Stage 4 pancreatic cancer and was basically told to get his affairs in order. That was in April. Yet he walked me down the aisle in August and his tumor markers went down after aggressive chemo and he's allowed a break probably through the holidays! Cancer is the plague or our time, but it's not the death sentence it once was, THANK GOD!

Keep up the great blog work. I love reading your reader's comments.

11/12/2012 5:49 PM

 
Blogger -J.Darling said...

As far as politics go, I gotta admit, I'm pushing for the adoption tax credit to be redefined and CONTINUED, instead of cut off all together. :/ But hey, so few of us adopt, that it'll probably never get national attention...

11/12/2012 5:51 PM

 
Anonymous Anonymous said...

"This parasite happens to work one rung below numerous full blown level-C employee millionaires." anon 10:39 PM 11/11

And a boastful attorney like yourself will hopefully not stay there.

Answer the real question:
If capital gains should be taxed at punitive rates because libs consider them "unearned income" of the rich, why shouldn't welfare transfers of over $60,000 per family (unearned income of the unmotivated) be taxed accordingly?

There is no rational reason for such disparity, parasite. And before you offer the liberal, claptrap cliche about ambition of the "mind", you would do well to the fact that regardless of education no one (including Obama supporters who are not criminals, or con men) become successful without such drive.

11/12/2012 7:05 PM

 
Anonymous Anonymous said...

anon @ 11/12/2012 7:05 PM

That you can't have a conversation without vitriole speaks volume.

You liken success with drive? Oh my. You have no understanding of demographics. Do you think it's all about drive, or do you think it's about opportunity?

Go look up major companies and their executive staffs and follow their paths back to college. It's more about who worked for who in the past or who you had for a roommate back in the day. One guy works for the right (or wrong) guy along the way and getting that Senior Director level or above either happens or not. I've watched it play out many, many times.

Let's keep this going as I'm going to give you an education. I can give you real world examples and yet you want to ignore them by spewing garbage about lack of drive. MUUUUWAHAHAHAHAHA.

You can talk about how you THINK it works. I know precisely how it works.

Go read the book 'Outliers' by Malcolm Gladwell.

I'm talking real world, not some "guvmint" job but the ass sniffing of friends still applies.

11/12/2012 7:38 PM

 
Anonymous Anonymous said...

@Anon @5:21 PM

Do you have a point? Everybody knows that the government deficit spends. What you seem to be unable to grasp is that this is not a problem that needs to be, or even SHOULD be addressed, right now.

I will submit that in my post-submarine life that economic forecasting is part of my job description. I have an MBA from a top 5 program.

Maybe, just maybe, I actually know what I am talking about and am not some cloistered submariner who spends 50% of his time underwater (thanks for your service!) and thinks he knows how the world works because he memorized all the steps in OP-1.

I am telling you, short term, medium term, and probably long term, we will be worse off if we try to balance the deficit now, than if we just sit on our hands and give it another year or two.

11/12/2012 7:58 PM

 
Anonymous Anonymous said...

I have an MBA from a top 5 program.

So you have a piece of paper...time for a round of /golfclap. I also have a piece of paper from a school that says Astronautical Engineer, so I know my way around numbers as well. Now that we've each established our bona fides:

Deficit spending needs to be addressed now because it will take years to be realized. If we keep adding $1,000,000,000,000+ each year to our debt (which is over $16,000,000,000,000), how long until the debt service becomes untenable? Deficit spending may have its use, but when our debt is over 100% of GDP and growing at ~6% a year, we can't afford that kind of deficit spending.

11/12/2012 8:31 PM

 
Anonymous Anonymous said...

@ 7:58,

Congrats on your MBA. It doesn't make you a macro-economics expert. There are many prominent economists who disagree with your assessment of government spending.

What you have to realize is when the government spends money to employ people, it's subtractive to the economy, not additive. There is no "product," and the "growth" is imaginary. When the government collects $2 trillion in taxes and spends 3 trillion, that's 33% less money in everyone's pocket who works for a private corporation, since the government has to print funny money to make up the difference.

Reducing federal spending might increase the recession short-term. But most of that is from removing the veil. The long term benefits from real economic growth and output are worth it.

If your line of thinking were true, why don't we just have the fed gov't hand out $50k/year to everyone as a baseline "spend this" fund? After all, this would undoubtedly create more demand and in turn grow the economy. This would lead to lowered unemployment It would also be a "living wage." It's a perfect solution under Keynesian theory, but in reality it would doom us to bankruptcy.

11/12/2012 9:05 PM

 
Anonymous Anonymous said...

anon @ 11/12/2012 8:31 PM

Go read the book 'Where Does the Money Go?'

Are you willing to waiver every social program we have? Speak with your wallet. And if you get a military pension you need to take the free money and keep your mouth shut.

11/12/2012 9:05 PM

 
Anonymous Anonymous said...

anon @ 11/12/2012 9:05 PM

Not only did you just obliterate any logic to economic policy but you also gave a nice example of a strawman argument with the "give everyone $50k" logic.

You're irrational.

11/12/2012 9:09 PM

 
Anonymous Anonymous said...

Anon @ 8:31 PM

The Government CANNOT default on its debt except by choice. The debt is always servicable because the government prints dollars. There is no point at which it becomes unsustainable. The government can print dollars in any quantity at any time, they produce government bonds mostly by convention, but there is no requirement (except by choice) that the government issue bonds to create dollars. They can literally just print them.

There are reasons not to do this, obviously, but it is incorrect to suggest that there is a point at which the government cannot continue to pay its debt. That point doesn't exist.

I think what you mean to say is that there is a point where inflationary pressure outweighs the benefit of adding more debt. I would submit that Japan has 200% Debt to GDP ratio, and still pays very low rates on its debt and in fact, has lower inflation than they probably even want.

11/12/2012 10:00 PM

 
Anonymous Anonymous said...

[i}Congrats on your MBA. It doesn't make you a macro-economics expert. There are many prominent economists who disagree with your assessment of government spending.[/i]

There are not many economists who disagree with this who have not looked like fools in the last few years. In fact, I can't think of any that haven't been wildly off in their predictions of of the effect of deficit spending. Keynesian's have looked pretty spot-on, however.

[i]What you have to realize is when the government spends money to employ people, it's subtractive to the economy, not additive. There is no "product," and the "growth" is imaginary. When the government collects $2 trillion in taxes and spends 3 trillion, that's 33% less money in everyone's pocket who works for a private corporation, since the government has to print funny money to make up the difference.[/i]

This is a foolish argument that shows the lack of understanding of even Macroeconomics 101.

GDP = C + G + I + NX

The G stands for "Government Spending". Clearly, the parts of MacroEcon that literally every serious economist agrees on thinks government spending is important enough to include it its own variable. You seem to be making some form of argument of government spending "Crowding out" consumer spending (the "C") and adding inflationary pressure. But that only applies when the economy is at full capacity (which it is not, currently).

Government spending is just as "real" as consumer spending, because the Government uses those dollars to buy "stuff" that would not otherwise be bought => employing people that would not otherwise be employed. If unemployment was at 4%, then yes, I would agree with you that additional government spending would cause inflation. But it is not.

If government spending is crowding out Consumer spending, than why do we not see high inflation, and wages rising quickly as the government competes for workers that would otherwise be employed in private industry? We don't, because if it wasn't for the government spending those workers would just not be employed.

In the current situation, deficit spending is a win all around. The government hires people (either directly or indirectly) => Those people buy stuff from companies, that have excess capacity because the private sector cannot provide the additional demand => Private industry also makes more money, because those government workers are buying "stuff" that would otherwise not be bought (and therefore not produced). It is a win-win-win situation. As long as economic activity is depressed, there is no downside to deficit spending.

Note: This is not the same thing as saying that we should run $1 Trillion deficits forever. At some point, the recovery will take hold, more tax revenue will be generated, and less people will need government assistance. At this time the deficit will decrease, and the government should step back its spending.

[i]
Reducing federal spending might increase the recession short-term. But most of that is from removing the veil. The long term benefits from real economic growth and output are worth it. [/i]

Again, do you have any kind of model for this? It sounds like utter bullshit...

11/12/2012 10:28 PM

 
Anonymous Anonymous said...

[i]If your line of thinking were true, why don't we just have the fed gov't hand out $50k/year to everyone as a baseline "spend this" fund? After all, this would undoubtedly create more demand and in turn grow the economy. This would lead to lowered unemployment It would also be a "living wage." It's a perfect solution under Keynesian theory, but in reality it would doom us to bankruptcy.[/i]

Obviously, this is a dumb idea politically, but that doesn't mean it is a bad idea ECONOMICALLY. The problem with idea is that people wouldn't accept it, not that the dollars would be any less "real". They could still be spent on stuff, and more stuff would be produced because of the stimulus. It makes about 1000x more sense for the government to spend money doing something else that actually makes the country stronger (infrastructure investment, replacing worn out military equipment, hiring teachers, etc).

At no point however, would it bankrupt the US Government, because that is in fact, impossible. The government can always pay its debts, because it is the sole source of US dollars and only issues debt denominated in US dollars. It cannot ever go bankrupt, except by choice.

11/12/2012 10:28 PM

 
Anonymous Anonymous said...

apparently... I don't the correct tags for blogger!

11/12/2012 10:29 PM

 
Anonymous Anonymous said...

This Keynesian garbage is ridiculous. The government does not create value. It only takes from people who create value and uses it less efficiently, not to mention creating a disincentive to work more.

The idea that giving everyone money to spend would cause more production is just absurd. If that were to happen the dollar would become worthless and everyone would rush to own hard assets that have value that could be traded. An unstable currency is a useless currency.

11/12/2012 11:31 PM

 
Blogger Mark said...

WTF,
Thought this was a submarine blog.

Congrats on 44 months Joel. My daughter just went through a scare with thyroid cancer. Initial tests said it was likely malignant when they cut her open, they took out a 1 1/2 lump but found no cancer.

Little late, past mid night on the east coast, but... thanks for all your service to those that served and to those of you that are still serving, a big thanks. I don't think I could have taken all the crap you guys are putting up with now.
Math Teacher UP State NY
EMCS/SS Retired

11/12/2012 11:59 PM

 
Anonymous Anonymous said...

The government can always pay its debts, because it is the sole source of US dollars and only issues debt denominated in US dollars. It cannot ever go bankrupt, except by choice.

People used to say the same thing about General Motors -- it'd never go broke because the banks would always lend them money or otherwise they'd go bankrupt as well. This worked until it didn't, wherein the banks were jammed up during the credit crunch, and the U.S. 'had to' step in.

The problem with the U.S. scenario is that the dollar is two-fold:

(1) the dollar is a credit-backed currency. Every dollar represents debt. Which means that there has to be a counter-party to the debt...someone who loans the money. And...

(2) The 'banks' that back the U.S. -- other countries -- may themselves become incapable of buying U.S. debt.

In the modern era, the Soviet Union was largely defeated economically. This was made possible because Japan was buying our T-notes.

If China and others get tired of watching their investments in U.S. debt getting inflated away, they can and may very well stop loaning us money. Their own banking circumstances may demand it.

In which case, we would now be out of the GM-is-always-backed situation, and find ourselves more like Greece -- a debt-drunk country that no one wants to loan money to anymore.

No more loans...no more printed dollar-debt...one collapsed economy.

11/13/2012 6:24 AM

 
Anonymous Anonymous said...

This Keynesian garbage is ridiculous. The government does not create value. It only takes from people who create value and uses it less efficiently, not to mention creating a disincentive to work more.

The idea that giving everyone money to spend would cause more production is just absurd. If that were to happen the dollar would become worthless and everyone would rush to own hard assets that have value that could be traded. An unstable currency is a useless currency.


That might be true, but it's not because of the extra dollars created, it would be because of the perception that dollars are just given away. Nobody is actually recommending that we JUST give away dollars for nothing.

11/13/2012 7:18 AM

 
Anonymous Anonymous said...

People used to say the same thing about General Motors -- it'd never go broke because the banks would always lend them money or otherwise they'd go bankrupt as well. This worked until it didn't, wherein the banks were jammed up during the credit crunch, and the U.S. 'had to' step in.

This is a false equivalence. GM is a user of dollars but cannot create them. That is not true of the US Government. The US Government 1) only carries debt in USD and 2) can print USD. It CANNOT go bankrupt. It can always just print more USD. There is not a point at which the American government cannot pay its debts, it can always just print more money. It can only go bankrupt by choice.... And even then, it's not bankrupt, it is just choosing not pay its bills.

(1) the dollar is a credit-backed currency. Every dollar represents debt. Which means that there has to be a counter-party to the debt...someone who loans the money. And...

This is simply not true. Dollars are backed up by nothing. Dollars have value only because people think they have value. They have no innate value unto themselves. All of the government debt is owed in dollars and was bought with dollars. There is nothing backing up the dollar except for more dollars.

(2) The 'banks' that back the U.S. -- other countries -- may themselves become incapable of buying U.S. debt.

1) less than 10% of our debt is owed to foreign governments
2) That is a function of the trade deficit. Here's how it works:
A) We buy Chinese crap
B) China has excess dollars
C) They need to buy something with the dollars
D) They buy government debt

If the government didn't issue debt, they would just invest in the US Economy directly, by buying stocks or businesses or land. As long as we have a trade deficit, the countries with whom we have a trade deficit will buy US debt.


If China and others get tired of watching their investments in U.S. debt getting inflated away, they can and may very well stop loaning us money. Their own banking circumstances may demand it.

As long as we have a trade deficit with China, they will always have excess dollars. Their banking system will never demand it, unless their trade deficit decreases... and then we will have extra reminbis.

In which case, we would now be out of the GM-is-always-backed situation, and find ourselves more like Greece -- a debt-drunk country that no one wants to loan money to anymore.

We can never be like Greece. Greece is a user of the Euro but has no ability to produce them. That is why they are having such a difficult time right now. If they controlled their currency, they could inflate their way out of debt problems, but they do not. The US on the other hand, only holds debt in a currency it prints. It can never default. It may get to a point where people will only loan us money at rates we don't want to pay, but we cannot actually default except by choice.

11/13/2012 7:30 AM

 
Anonymous Anonymous said...

This much is true:

"Dollars have value only because people think they have value."

I wonder what people will think tomorrow...?

11/13/2012 8:50 AM

 
Anonymous Anonymous said...

Yes... I agree. we CLEARLY are on the precipice of a collapse in the dollar. The evidence of this is.... wishful thinking?

P.S. The rest of this is true as well.

11/13/2012 8:56 AM

 
Anonymous Anonymous said...

TSSBP...here's the requested proof of a collapse in the value of the U.S. dollar:

http://pricedingold.com/charts/USD-1787-log.pdf

You really didn't know that gold is up in the $1,600 - $1,900 range since 2000, when it was trading in the $200-250 range?

If that's not a collapse in the value of a currency...what is?

11/13/2012 9:46 AM

 
Anonymous Anonymous said...

Did we go back to the gold standard? I must have missed that!

What if we were to measure the cost of the dollar in computing power or price per square feet of housing Las Vegas? If that is not proof that the dollar is stronger now than ever, than I do not know what is.

The only way to measure the relative strength of currency is by the the relative interest rates of bonds issued in that currency.

Ours are among the lowest in the world, and also near historical lows.

You should start shorting the dollar. Invest in some other currency where they have had massive austerity (the EURO) and then in 10 years, you can trade it back into massive amounts of dollars for the ultimate win. Since you are the only person seeing this and have irrefutable proof, you can't lose.... I'm going to keep investing domestically.

11/13/2012 10:13 AM

 
Anonymous Anonymous said...

"I know precisely how it works.
Go read the book 'Outliers' by Malcolm Gladwell." - Parasite anon @ 11/12/2012 7:38 PM

If you base your decisions on the writings of a socialist lib like Gladwell, (born UK raised Canada; grades not good enough for grad school, writes best-selling tripe for boastful achievers like yourself) no wonder you are such a socialist dupe!

If you are one rung "full blown level-C employee millionaires" you must be getting stock bonuses, 401k matches, or making max contributions to your Roth IRA (yes a Roth - your youthful naïveté and ill-informed certainty shows, and you deserve to learn the hard way.

My advice: Success comes when preparation meets opportunity.

Good luck to you on the remainder of your woeful education.


11/13/2012 11:57 AM

 
Anonymous Anonymous said...

You're right homey, I'm clueless about how to save money.

I guess since I work with executives and what them pile away there money, pay cash for their kids education, set up large trust funds for their kids and grand children.

Look at Romney. He left Bain and has done the exact same thing. He's hiding the money away.
You're so far gone with partisan bullshit to be saved. Exactly why the GOP is becoming irrelevant as your the party of hate. I bet you wouldn't call me a parasite to my face either ;)


11/13/2012 12:59 PM

 
Anonymous Anonymous said...

My advice: Success comes when preparation meets opportunity.

This is definitely true, but some of us are borne with more opportunity than others.

11/13/2012 2:54 PM

 
Anonymous Daniel Boone said...

Not that it has anything to do with Submarines, but I think it’s hilarious that a few posters here are questioning the level of economic schooling achieved by those they disagree with, and in the next breath advocating the economic theories of Ayn Rand, a novelist, whose works of fiction can be found in the young adult-juvenile fiction shelves of most libraries.

11/13/2012 2:58 PM

 
Anonymous Anonymous said...

"This is definitely true, but some of us are borne with more opportunity than others." parasite @ 11/13 2:54 PM

So it would seem (lets not consider infants who don't survive to the age of majority, adults afflicted by physical and mental disorders, etc., nerds who can't attract intelligent mates, etc.).

So, let's just throw up our hands and level life's playing fields to eliminate unfairness? Think, woman!

Examine the populations of socialist countries that have adopted you pathetic mantra. Why are their suicide rates higher?

You are proposing that we squander America's historic legacy because your pampered, entitlement generation wishes life to be fair. Suck an egg and grow up, junior!

11/13/2012 5:43 PM

 
Anonymous Anonymous said...

All off them 4-stars getting in trouble and over what?

Well the "what" is only the most powerful force known to man other than Kryptonite. That's right, that little hole known as the pussy.

That thing, along with it's life support system known as "woman" has been the downfall of presidents, generals, admirals, captain's of submarines who also work special ops, Dirty Dave, movie stars, and the common everyday Joe.

Hardly any man can resist it (except gays...and they have their own hole to worship). The thing has caused diseases, started wars and ruined families.

All hail the pussy!

11/13/2012 6:17 PM

 
Anonymous Anonymous said...

anon @ 5:43 PM

Quoting Ayn Rand is instant fail. It shows that you have relatively the maturity of a 13 year old. I used to think like that too... and then I grew up.

What's more pathetic is you are probably in your 50's, spent a life in the submarine force, and suckle at the government teat like a newborn baby.

I can't figure out who's dumber, poor Republicans who vote against their own interests because of racism or military Republicans who rail against "Government Giveaways" while living their entire life in a socialist cocoon that would make Marx blush.

The Motto of the Lifer:

"Get rid of Social Security and Medicare (but don't touch my military retirement or tricare for life).

11/13/2012 6:42 PM

 
Anonymous Anonymous said...

anon @ 11/13/2012 6:17 PM

Ain't dat da truth!!

Here's to the pussy!! But when you get busted for drilling it when you should not b -or- it barks at you to take out the trash it changes tune and is called a snatch. lol

11/13/2012 7:13 PM

 
Anonymous Anonymous said...

anon @ 11/13/2012 5:43 PM

I hope you realize the venom you spit just makes people laugh at you. Are you that immature that the only way you can reply is name call but can't back things up with facts?

Go reread your posts. When confronted with facts, even something as simple as a book mention that points our fallacies in your logic, what do you have left? Huffing and puffing and attacking the messenger. Why? Because the message hit the target ;)

There's no helping your type. You can't without vitriole. I hope I'm causing you an early deathy by making your cortisol levels shoot throught the roof.

Meanwhile, back at the ranch, you're the type to call for war and big military and asking for "reduced spending" at the same breath.

Let me give a little piece of humble pie: Tricke down doesn't work. Get past your pathetic shallow thinking and look at economic growth vs tax rates and the historical trends. You're not going to like what you find.

Also, you mentioned in an earlier post about your "vast" knowledge of Roth IRAs. Well dumbass, some of us CAN'T contribute to those because our family income exceeds the income thresholds.

Now go back and enjoy the pension off the public that my taxes funded.

11/13/2012 7:25 PM

 
Anonymous Anonymous said...

For all those who support socialist policies:

Do you really think America would have become such a great and successful nation if we had those policies in place instead?

11/14/2012 7:06 AM

 
Anonymous Anonymous said...

Which socialist policies?

Neither Medicare nor Social SEcurity Nor military retirement nor Higher tax rates kept us from winning WW II or the Cold War.

I would point out that our standard of living is dropping every year, infant mortality is rising, and our life expectancies are dropping relative to "socialist" countries. To a large extent the lack of national healthcare has ALREADY FAILED.

And Obamacare is a Republican Policy. THE REPUBLICANS proposed it in the 90's. It is a sensible free market reform that will save taxpayers money in the long run.

What specific "Socialist" policies are you talking about?

By the way, screaming socialism just shows you drag knuckles and breathe heavily from the mouth.

11/14/2012 9:31 AM

 
Anonymous Anonymous said...

Anon at 11/09/2012 4:39 PM: You are correct, that is a lot of stupid in one statement.

11/14/2012 12:27 PM

 
Anonymous 610ET said...

Joel, what happened to this place?

It used to be a go to blog for submariners with the occasional political topic. Now you have mostly anon’s spouting and foaming at the mouth.

I have made some anon posts myself lately just because things here are so out of control. It seems like the real discussions are over at Sal’s site these days.

Obama doubled down today on a meaningless tax the wealthy program which as we all know isn’t a program at all. It seems like he is more interested in boxing Republicans into a political position that his party can exploit down the road than actually solving anything.

He has the ball and instead of getting it down field he is spiking it now. The uninformed cheer but you have to know that this country needs a plan, not a Petulant-in Chief.

The Democrats have a real opportunity right now to demonstrate why they are right. You have to ask yourself why they aren’t doing it.


11/14/2012 10:27 PM

 
Blogger Henson said...

"Political posts suck and are annoying - now here's my political post..."

11/15/2012 7:48 AM

 
Anonymous Anonymous said...

New definition for our on-going political dialogue:

‘Tolerati’ — People who claim to be tolerant except when they run into someone who disagrees with them...then the joyous hate comes out. Never directed at anybody else on their side of 'Tolerati'-ness.

11/15/2012 9:56 AM

 
Anonymous Anonymous said...

Excessive flags finally on the chopping block.

11/15/2012 3:06 PM

 
Anonymous Anonymous said...

Wow, can't believe so many of you stupid leftist fucks exist. Mostly coners and limp-wristed zero types, no doubt.

11/15/2012 3:18 PM

 
Anonymous Anonymous said...

anon @ 11/15/2012 3:18 PM,

It's those crazy socialist ideas like public education, public works, police, fire, water treatment plants, roads, bridges.

All paid for by the masses for the common good. Whodathunkit?

If you don't like living in a 1st world country and truly seek full independence plan on moving to another country (that you'll almost assuredly hate). Welcome to a civilized nation!


11/16/2012 1:12 AM

 
Anonymous Anonymous said...

New signage needed here:

"Please do not feed the Tolerati trolls."

11/16/2012 6:33 AM

 
Blogger tennvol said...

If you're too damn lazy to think of a handle to post under, then why should anyone give any credence to what you have to say?

Now back to slapping each other with your microdicks.

11/16/2012 6:52 AM

 
Anonymous Fast Attack said...

^^^ ...said the anonymous boomer fag.

11/16/2012 2:36 PM

 
Anonymous tennvol said...

I may be a boomer fag but....oh never mind, I'm still a boomer fag.

11/17/2012 7:59 PM

 
Anonymous Anonymous said...

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11/19/2012 1:37 AM

 
Anonymous Anonymous said...

I highly question anybody's intelligence who chooses a handle that proudly displays that they are from Tennessee.

Fun facts about Tennessee:
- 85% of Tennesseans think Jesus rode dinosaurs. The rest are management brought in from other states.

- An important milestone in the life of a Tennesean is 6 months, when a mother traditionally changes her infant's diet from breast milk to Mountain Dew.

11/23/2012 9:08 AM

 
Blogger tennvol said...

Oh the jealousy...

Boomer fag? No, sorry, try again. You might get it right on the second try, but I doubt it.

11/27/2012 9:11 AM

 
Anonymous Anonymous said...

^^^ ...said the anonymous skimmer fag.

11/30/2012 2:33 PM

 
Anonymous Anonymous said...

Speaking of Iranian subs....

http://ca.news.yahoo.com/blogs/sideshow/iran-unveils-unusually-colored-blue-submarine-211724188.html

12/02/2012 6:39 AM

 
Blogger jony said...

There are so many good points for the visitors for traveling but i like to Rent a yacht in Dubai

12/19/2012 5:48 AM

 

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