28 Aug 10
How many countries in the world have governments that provide Social Safety Nets? Of those countries, how many of them take in enough money each year to pay for the government? In other words, how many of those countries do not have a deficit and how many of those countries have balanced budgets year in and year out?
I don't know of any.
From my simple/peon point of view, if you are running a country in debt and each year you are going further into debt, then it is only a matter of time before you will no longer be able to pay off your debt.
If governments do not live under the same economic rules that the rest of us live under, then could you please explain to me why not?
28 Aug 10
Originally posted by FMFNo, I haven't investigated the issue. I'd just like to know why a government can't run itself so far into debt that it can no longer be able to pay off its bills. What makes a government different from an individual?
Have you investigated the issue?
Or are we debating the fact the [b]you don't know any?[/b]
I take it that you do not know of any social safety net country that can actually pay its bills with the taxes it brings in.
28 Aug 10
Originally posted by EladarAre you old enough to have asked Reagan this question?
No, I haven't investigated the issue. I'd just like to know why a government can't run itself so far into debt that it can no longer be able to pay off its bills. What makes a government different from an individual?
28 Aug 10
Originally posted by FMFShort term deficit spending during down ecomonic times I can see. The theory makes sense. Government pumps money into the economy during bad times, the government repays the debt and builds up a rainy day fund during good times.
Are you old enough to have asked Reagan this question?
If you are running defecits year in and year out, then there's a problem.
28 Aug 10
Originally posted by KazetNagorraHaving debt (excluding something like your house) and having finances in order are mutually exlusive statements in the real world.
And there are plenty of others who have their finances in order, for example Australia had a public debt of 18% of GDP in 2009 according to the CIA Factbook.
28 Aug 10
Originally posted by EladarWait, first you say the budget has to be balanced year in, year out, and now you're saying running a deficit in an economic downturn is okay. Which is it?
Short term deficit spending during down ecomonic times I can see. The theory makes sense. Government pumps money into the economy during bad times, the government repays the debt and builds up a rainy day fund during good times.
If you are running defecits year in and year out, then there's a problem.
28 Aug 10
Originally posted by KazetNagorraA company that has debt and plans to get further into debt every single year isn't going to be in business very long. That's why many businesses have cheated their employees and have defaulted on their retirement plans. The companies could not afford to pay the debt that their social program put into place.
So you are saying that any business which has a debt larger than 18% of its turnover is not a sound business?
28 Aug 10
Originally posted by FMFNorway is a member of NATO, and basicly has no national defense. The USA is their defense budget.
Are you old enough to have asked Reagan this question?
Bringing up Reagan gets to the crux of the issue, national defense or social programs. Since Carter there is a clear divide between the major parties on this.
Prior to that, both parties were somewhat concerned about both issues, and somewhat responsible.
It was Eisenhower (R) who warned about the "military industrial complex", and Kennedy (D) who first proposed supply side economics, lower marginal tax rates to stimulate the economy.
I am old enough to have asked Reagan, and also old enough to remember that Tip O'Neil was House speaker, and that spending originates in the House.
By the way, national defense was the reason for the "United States". If not for the need to defend against the European powers, neither the article of Confederation nor the Constitution would have been adopted. The alphabet soup of federal agencies and beaurocracies comprising the "social net" are neither authorized nor supported by the Constitution, and as such should be local or State matters.
That said, national defense and Homeland Security are also bloated and way beyond what the founders ever had in mind. The notion that the US would have troops scattered to the four corners of the Earth would have seemed preposterous to them, in fact the Constitution originally provided for annual allocations for a national army.
28 Aug 10
Originally posted by Eladar"Short term deficit spending during down ecomonic times I can see."
Short term deficit spending during down ecomonic times I can see. The theory makes sense. Government pumps money into the economy during bad times, the government repays the debt and builds up a rainy day fund during good times.
If you are running defecits year in and year out, then there's a problem.
There isn't any imperical evidence which shows that to be true. Both Hoover and Roosevelt attempted such stimulation by government spending to get out of the Great Depression, but we were still in it when WW2 began.
Unemployment was cured after the war, because several million young men were removed from the workforce permanently. Our industies thrived because two of our most potent industrial competitors were virtually destroyed.
Inspite of the postwar prosperity, the perceived need for social safety nets grew, and inspite of ever increasing social spending during the last half of the 20th century, the social problems have grown rather than receded.
The problem with the social safety net, and the corresponding big business safety net is that people in every class have been taught by recent US history that there are no consequences for poor decisions. For individuals there are no consequences and now we see that for multinational corporations there are none. The government bails out everyone. You are simply wise to observe that this course isn't sustainable. It will fall like a house of cards, and nobody conservative or liberal will like it when the fall occurs.