US Politics XXX

[Shryke]

Can't they selectively finance certain government operations like they'd selectively default? (Note: I'm not saying that selective default is a good thing, but rather that it's an option) Kind of seems, as you say, that he's making a gamble by threatening those relying on SS.

Maybe. As he says, they don't know. They can't guarentee they'll be able to restructure such that those checks will go out at all, let alone on time.

And the worse case will actually be the future checks, as a default would probably absolutely destroy the US goverment's ability to borrow.

[Tormund Ukrainesbane]

Can't they selectively finance certain government operations like they'd selectively default? (Note: I'm not saying that selective default is a good thing, but rather that it's an option) Kind of seems, as you say, that he's making a gamble by threatening those relying on SS.

ETA: For instance, he didn't say a thing about federal pensioners.He's threatening the biggest voting bloc there is. That is a hell of a gamble.

Yes of course they can. Social Security and Medicare have separate budgets from the rest of the government and special payroll taxes that are used to fund them. Social Security is running a deficit right now but it's only predicted to be $20 billion next year which is easily coverable by cuts in other areas (notably, interest on the debt in the event of a default).

Saying that SS checks won't go out is scaremongering, nothing more.

[Tormund Ukrainesbane]

Can't they selectively finance certain government operations like they'd selectively default? (Note: I'm not saying that selective default is a good thing, but rather that it's an option) Kind of seems, as you say, that he's making a gamble by threatening those relying on SS.

ETA: For instance, he didn't say a thing about federal pensioners.He's threatening the biggest voting bloc there is. That is a hell of a gamble

.

Yes of course they can. Social Security and Medicare have separate budgets from the rest of the government and special payroll taxes that are used to fund them. Social Security is running a deficit right now but it's only predicted to be $20 billion next year which is easily coverable by cuts in other areas (notably, interest on the debt in the event of a default).

Saying that SS checks won't go out is scaremongering, nothing more.

[Xenophon]

The $800m is military aid, the rest is civilian/humanitarian aid and does not go to the military.

No, I think that is what goes to the military. According to the reports, we're only cutting our military aid by about 1/3 this year. I don't know if that includes past payments (i.e. we've stopped giving them any military aid, but we'd already given them $1.6bn) or if we're still paying out at a reduced rate, but in any event, we gave them a lot more.

[Shryke]

It seems to me that he's jumping the gun by threatening SS. I'm sure Turbo Tax Timmy has been up night after night figuring out how to restructure their liquidity to pay for things. If BO is seriously thinking about cutting off SSS before, say, barely-legal foreign wars, he's doomed the Democrats for the next few decades.

:lol: If the US government defaults, your country is fucked for the next few decades period.

Complaining about cutting SS during is bitching about the seating arrangements on the Titanic. And this is not hyperbole.

There is no restructuring your way out of that kind of financial armageddon. It doesn't matter because you are fucked.

He could always pull an EU and try to ban the rating agencies. :laugh:

Meaningless. Rating agencies have nothing to do with government borrowing because they don't know shit anyone else doesn't already know.

[Xenophon]

It seems to me that he's jumping the gun by threatening SS. I'm sure Turbo Tax Timmy has been up night after night figuring out how to restructure their liquidity to pay for things. If BO is seriously thinking about cutting off SSS before, say, barely-legal foreign wars, he's doomed the Democrats for the next few decades.

Exactly. And beyond the barely-legal time/scope-limited kinentic military actions, how about a government shutdown, or temporary reduction in government payrolls? Because nothing wins the people over like cutting social security while making sure every federal government employee gets paid.

It's a great threat, but he'd be insane to ever actually cut social security before making drastic cuts elsewhere.

[Shryke]

Exactly. And beyond the barely-legal time/scope-limited kinentic military actions, how about a government shutdown, or temporary reduction in government payrolls? Because nothing wins the people over like cutting social security while making sure every federal government employee gets paid.

It's a great threat, but he'd be insane to ever actually cut social security before making drastic cuts elsewhere.

None of this will actually fix the problem. Calling it a "threat" displays a level of non-understanding of what is going on here that's just absurd.

[Swordfish]

Exactly. And beyond the barely-legal time/scope-limited kinentic military actions, how about a government shutdown, or temporary reduction in government payrolls? Because nothing wins the people over like cutting social security while making sure every federal government employee gets paid.

It's a great threat, but he'd be insane to ever actually cut social security before making drastic cuts elsewhere.

Pretty much. As someone else mentioned, this is nothing more than a little bit of transparent scaremongering.

[Xenophon]

None of this will actually fix the problem. Calling it a "threat" displays a level of non-understanding of what is going on here that's just absurd.

Huh? How is it not a threat? He's threatening to make drastic cuts to programs that ordinary citizens rely on rather than to government programs that they don't care about as much. That's what Cocomaanin meant by taking a page out of Paulson's playbook (who allegedly told lawmakers there'd be riots and martial law if congress didn't approve the bailouts).

EDIT: Here, by the way, is a handy chart comparing likely US revenue to expenditures in August.

[Shryke]

Huh? How is it not a threat? He's threatening to make drastic cuts to programs that ordinary citizens rely on rather than to government programs that they don't care about as much. That's what Cocomaanin meant by taking a page out of Paulson's playbook (who allegedly told lawmakers there'd be riots and martial law if congress didn't approve the bailouts).

EDIT: Here, by the way, is a handy chart comparing likely US revenue to expenditures in August.

That's like saying the captain is threatening to drown you because he's telling you that you'll be seated on the side of the ship that sinks first.

[awesome possum]

Saying that SS checks won't go out is scaremongering, nothing more.

So what you're saying is he's learning how to politik like his friends across the aisle?

[Xenophon]

That's like saying the captain is threatening to drown you because he's telling you that you'll be seated on the side of the ship that sinks first.

Well, yes. It's like we're on a ship that's taking on water so we need to throw some weight overboard to stay afloat, and Obama is proposing beginning with the passengers rather than the tables and chairs.

That's an effective threat to emphasize why we need to patch the hole (i.e. raise the debt ceiling + work out some deficit deal), but it would be political suicide to actually carry it out.

Edit:

So what you're saying is he's learning how to politik like his friends across the aisle?

More or less. The Republicans were playing chicken and Obama suddenly floored the gas pedal. Now, as Cocomaan said, cutting social security first probably would have hurt the Dems more than the GOP, but the GOP didn't want to put that to the test it seems, since they're now talking about ways to raise the debt ceiling.

[awesome possum]

I seem to have missed the part where he actually proposed or threatened anything.

[Jon Sprunk]

I seem to have missed the part where he actually proposed or threatened anything.

Exactly. He answered the question honestly. He doesn't know how the govt fiscal situation is going to shake out because it's never happened before. And he's also putting the debt ceiling fiasco in terms that everyone can understand.

The fed govt borrows 40% of the money it spends. So if we defaulted and couldn't borrow, we'd be left with roughly 60% from income. Well, defense eats up about 20%, SS another 20%, medicare/medicaid/CHIP 21%, and safety net programs another 14%. Cuts will have to come from these things which affect actual people, so someone's going to feel the pain. And that doesn't even touch the meltdown that the financial sector might (will) suffer, which will shatter this fragile economy, put more people out of work, and reduce tax income, and so forth. This is the downward spiral we face.

Which is why McConnell is now proposing that Obama be given unilateral power to lift the debt ceiling on his own. Even he understands this can't be allowed to happen.