4 ms·

Maybe I am misreading your argument, but it seems like you are saying the cause of the US deficit problem is that the faction that trades entitlements for votes

Maybe I am misreading your argument, but it seems like you are saying the cause of the US deficit problem is that the faction that trades entitlements for votes has gained control of the system. If that were true, and this faction were really just concerned with entitlements, there would be an obvious solution to the deficit: raise taxes. This may be every bit as horrible as you imagine, but it wouldn't involve a debt crisis. The problem as I see it, is that the faction that trades entitlements for votes and the faction that trades tax breaks for votes are both simultaneously in control. The low taxes people win all the fights about taxes, and the high spending people win all the fights about spending. The bug in democracy that led to our deficit problem is the lack of anything to prevent us from voting to have our cake and eat it too.

ansy 15y ago
Tax breaks are just another form of entitlement. Tax breaks are almost worse than other government benefits. It's basically taking out interest only loans on the tax payer's behalf. Here's $500 ... Oh and by the way, that comes with $500 worth of debt with a 4% interest rate that you are going to pay forever.
- oelewapperke 15y ago
  That's not true at all. Government loans are not traditional interest-only home loans, and they certainly don't have a fixed interest rate. It's much, much worse than that. The entitlements side (sorry, but it's definitely that side), first saw lending as a way to get their votes without the corresponding loss of spending power, where the problem of repayment was delayed until after an election. Then the entitlement side (the taxbreaks side actually tried to repay these debts) screamed that "it's not fair we have to pay it back, someone else made the loan !". And this argument was more-or-less accepted. So the principle was started to take out new debt to repay obligations of the old debt. Is this associated to a particular party ? Perhaps, but it doesn't really matter since all of this happened before WWII. Few of the politicians that first created this disaster are even alive anymore, and I believe none are still in office. You really want to know more ? Yes, it was the democrats. So government loans have the worst of all possible loans as a result : they're interest-only loans with two extra very bad properties 1) the bank can foreclose whenever it wants (by not extending a new loan at all) 2) there is a variable rate interest, which can raise ver fast (and lower, in which case the windfall is immediately spent by the entitlements side). But the problem is not particularly bad in America you know. At least, not compared to Europe. America can take something around an interest rate of around 5%, and even the worst predictions do not involve a default before 2020 or so. Europe cannot possibly hope to survive with loan interests exceeding 3% and might default this very year. Most muslim countries are much worse off than Europe, and have the big issue that sometimes 80% of their population is dependant on state support for food and water (as in, they wouldn't be able to remain alive without government opening out new debt) (in Gaza/West Bank this is 100%, but that's an exception). So don't worry : yes the US is screwed. However the only thing that really matters is who is screwed first, and that's not us. Even Europe might escape if the middle east implodes first.

ansy 15y ago

Tax breaks are just another form of entitlement. Tax breaks are almost worse than other government benefits. It's basically taking out interest only loans on the tax payer's behalf. Here's $500 ... Oh and by the way, that comes with $500 worth of debt with a 4% interest rate that you are going to pay forever.

oelewapperke 15y ago
That's not true at all. Government loans are not traditional interest-only home loans, and they certainly don't have a fixed interest rate. It's much, much worse than that. The entitlements side (sorry, but it's definitely that side), first saw lending as a way to get their votes without the corresponding loss of spending power, where the problem of repayment was delayed until after an election. Then the entitlement side (the taxbreaks side actually tried to repay these debts) screamed that "it's not fair we have to pay it back, someone else made the loan !". And this argument was more-or-less accepted. So the principle was started to take out new debt to repay obligations of the old debt. Is this associated to a particular party ? Perhaps, but it doesn't really matter since all of this happened before WWII. Few of the politicians that first created this disaster are even alive anymore, and I believe none are still in office. You really want to know more ? Yes, it was the democrats. So government loans have the worst of all possible loans as a result : they're interest-only loans with two extra very bad properties 1) the bank can foreclose whenever it wants (by not extending a new loan at all) 2) there is a variable rate interest, which can raise ver fast (and lower, in which case the windfall is immediately spent by the entitlements side). But the problem is not particularly bad in America you know. At least, not compared to Europe. America can take something around an interest rate of around 5%, and even the worst predictions do not involve a default before 2020 or so. Europe cannot possibly hope to survive with loan interests exceeding 3% and might default this very year. Most muslim countries are much worse off than Europe, and have the big issue that sometimes 80% of their population is dependant on state support for food and water (as in, they wouldn't be able to remain alive without government opening out new debt) (in Gaza/West Bank this is 100%, but that's an exception). So don't worry : yes the US is screwed. However the only thing that really matters is who is screwed first, and that's not us. Even Europe might escape if the middle east implodes first.