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US declares financial war on world

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Re: United States is insolvent

Unread postby MOCKBA » Tue 19 Dec 2006, 18:55:40

$this->bbcode_second_pass_quote('nero', '')$this->bbcode_second_pass_quote('', 'T')o see how this demographic thing would play out, look at Canada over next 15 years. On one hand Canadians are fiscally conservative, on the other hand like Europeans they cannot dump social security and on top of this all Canadian problem with baby boomers is a lot worse then in US (or Europe).


I'm no expert on the Canadian pension plan (other than as a contributor) but the government believes it has fixed the problem by instituting an investment fund (and by hiking contributions substantially) where our contributions will be able to get that fabulous long term 8% return from the market. I have my doubts as I fully expect that eventually we will have a market crash ala Argentina and all of a sudden our government will have a huge pension liability again. But in terms of conventional accounting principles I do believe the pension fund is sound.

And it might be all the way to around 2020. Then you would have most Canadian baby boomers retired (Canadians do retire almost as early as French at 61 vs. 59). Then you would have very steep drop from 3.5+ kids per female to less then 1.8 vs. more gradual from 3.5 to around 2.0 for US. I am telling yah Canadians would be pioneers dealing with baby boomers.
$this->bbcode_second_pass_quote('nero', '
')The real hole in the public finances in Canada as in the US is the increasing cost of publicly funded healthcare for people over 65. In Canada this has been an ongoing problem. We are muddling through so far by reducing services, lengthening wait times, creaping privatization and higher taxes.

Denying access to health care so that baby boomers would die out earlier... here you go... but then again, you are racing against advances in medicine etc...
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Re: United States is insolvent

Unread postby rogerhb » Tue 19 Dec 2006, 18:59:59

$this->bbcode_second_pass_quote('benzoil', 'A')ccording to the authors, you'd have to cut the entire federal budget by about 125% for many years in order to get the future math to work out. THAT's even less of a solution.


What will happen will be a depression and hyperinflation. But the hyperinflation will only apply while there is any faith in the dollar. Once the faith is lost, you are back on to either (a) some other fiat currency, (b) metals (c) barter.

All promises will be forgotton, eg, no welfare, no pensions, no insurance, but you will also have less state services, education, police.

Being a capitalist country you will have both homeless people and empty houses.
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Re: United States is insolvent

Unread postby threadbear » Tue 19 Dec 2006, 19:13:01

$this->bbcode_second_pass_quote('rogerhb', '')$this->bbcode_second_pass_quote('benzoil', 'A')ccording to the authors, you'd have to cut the entire federal budget by about 125% for many years in order to get the future math to work out. THAT's even less of a solution.


What will happen will be a depression and hyperinflation. But the hyperinflation will only apply while there is any faith in the dollar. Once the faith is lost, you are back on to either (a) some other fiat currency, (b) metals (c) barter.

All promises will be forgotton, eg, no welfare, no pensions, no insurance, but you will also have less state services, education, police.

Being a capitalist country you will have both homeless people and empty houses.


In other words, Russia. This sounds much like Russia after perestroika. It also shows how both societies were actually flip sides of the same coin, in terms of ideological retardation and grosse mismanagement of govt and economy.
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Re: United States is insolvent

Unread postby TommyJefferson » Tue 19 Dec 2006, 19:20:03

$this->bbcode_second_pass_quote('joewp', 'I')rrelevant, every worker pays payroll taxes. Straight 7.5% out of your paycheck up to about $80,000/year. Then it stops.


Illegal workers don't pay payroll taxes. That's why they are called "illegal", off-book, under-the-table, back-door.

They get paid in cash. Yet, they consume far more in social services like Emergency Room visits, WIC, EMS, law enforcement, etc. than they contribute in sales, property, or income taxes.

Illegal immigrants are a drain on public coffers. They consume far more public funds than they contribute.

Business who employ them get cheap labor. We the taxpayers get the bill. It's basically a subsidy for crooked employers.
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Re: United States is insolvent

Unread postby MOCKBA » Tue 19 Dec 2006, 20:07:34

$this->bbcode_second_pass_quote('benzoil', '')$this->bbcode_second_pass_quote('rogerhb', '')$this->bbcode_second_pass_quote('benzoil', 'I') don't think they talked about super duper hyperinflation though. THAT might definitely fix the problem.


That is not a fix by any stretch of the imagination.


You're absolutely right, but I wouldn't rule it out. The only way to make a trillion dollars worth less is to make a trillion dollars worthless, so to speak.


In case of hyperinflation you would have to index payouts. My Russian grandma receives about the same now as my grand-grand ma during Cold War and even more in "bottles of Vodka" equivalent ("bottle of Vodka" is Russian hard currency that is "inflation adjusted") :)


$this->bbcode_second_pass_quote('benzoil', '
')The problem is not solvable by anything less than extraordinary means. According to the authors, you'd have to cut the entire federal budget by about 125% for many years in order to get the future math to work out. THAT's even less of a solution.


The solution would be to dump obligations in this or that form for example by giving say $10,000 to be invested in private pension account in exchange for fixed payouts for a fixed period of time and then running moderate inflation... Hmm, ain't it what Bush was suggesting then he was talking about Social Security reform?

Anyhow, the point that I was trying to make is that US government doesn't need to run all those complicated schemes. It could simply walk out from the obligations. Other governments cannot walkout and would have to address the problem (have liabilities not on the books today) in the following order Canada, Germany, France, Japan, USA.
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Re: United States is insolvent

Unread postby EnergyHog » Tue 19 Dec 2006, 20:39:29

Which party will walk out on the financial obligations?

The one that doesn't ever want to be re-elected.

Like it's always been done... create the funds necessary.
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Re: United States is insolvent

Unread postby Kingcoal » Tue 19 Dec 2006, 20:56:42

What's interesting is that this is a worldwide problem. We are all human after all. Some nations are healther than others, but for the most part, we are all living much longer than we used to. That means huge healthcare costs in the senior years. If you think about it, these social programs really are a throwback to cheap, almost free, oil. As the party ends, so do the perks.
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Re: United States is insolvent

Unread postby nero » Tue 19 Dec 2006, 21:20:08

$this->bbcode_second_pass_quote('MOCKBA', 'D')enying access to health care so that baby boomers would die out earlier... here you go... but then again, you are racing against advances in medicine etc...


We ration healthcare but I don't expect it saves money by having people dying younger (which is a morally reprehensible way of designing a healthcare system). The rationing is based on the sickest getting priority so in practice alot of money is spent on people in the last few years of life. Whether those last few years start when they are 70 or 80 doesn't make a large difference to the ultimate amount of money spent on the individual.

In the end our demand for publicly funded healthcare is almost infinite so we all will have to confront the issue at some point. I'm just saying that Canada is further along in the debate than the United States is.

The social security crisis is in my humple opinion a sham. Benefits will be reduced at some point and people will have to work more years before they can collect it. But that's it. I think the public has been well softened up for the change in policy that is going to have to occur. Most young adults don't even expect to receive social security anymore. The healthcare issue is the real problem because the cost is increasing much more rapidly than social security and the public is in no way prepared to accept a reduction in services.
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Re: United States is insolvent

Unread postby Laughs_Last » Tue 19 Dec 2006, 21:35:04

NPR had some good coverage of America's deficit yesterday. NPR Marketplace: U.S. Trade Deficit Hits Another Record. There is mention of the solution to the problem being "The Fed would have to raise interest rates dramatically."
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Re: United States is insolvent

Unread postby JustinFrankl » Tue 19 Dec 2006, 21:45:59

$this->bbcode_second_pass_quote('TommyJefferson', 'I')llegal immigrants are a drain on public coffers. They consume far more public funds than they contribute.

The general public is a drain on The Commons. They consume far more resoures than they contribute, and leave far more waste than they clean up.
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Re: United States is insolvent

Unread postby MOCKBA » Tue 19 Dec 2006, 22:09:24

$this->bbcode_second_pass_quote('nero', '')$this->bbcode_second_pass_quote('MOCKBA', 'D')enying access to health care so that baby boomers would die out earlier... here you go... but then again, you are racing against advances in medicine etc...


We ration healthcare but I don't expect it saves money by having people dying younger (which is a morally reprehensible way of designing a healthcare system). The rationing is based on the sickest getting priority so in practice alot of money is spent on people in the last few years of life. Whether those last few years start when they are 70 or 80 doesn't make a large difference to the ultimate amount of money spent on the individual.

Good point. The amount of health care "units of work" remain the same regardless if those units are received at the age of 70 or 80 and is a constant per person. The cost of the unit would increase going forward. The funds available to fund those units of health care would remain constant at best (with moderate inflation) and would decrease in my opinion. So what do you do?

Under Canadian rationing system it is inevitable that number of units would decrease and as a result not only they would be received more at the age of 70 then 80 by very sick due to high priority, but the number of units available to people with lower priority - younger people who would be healthier if they had access to health care would decrease as well. As a result, under rationing system all would be sicker and system would be stressed even more requiring even more units... Rationing works in case of short emergency, it doesn't work in the long run.
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Re: United States is insolvent

Unread postby Tyler_JC » Tue 19 Dec 2006, 22:22:27

The problem with health care is that it is too cheap.

If everyone had a higher co-pay and a higher deductable, they would be far less inclined to show up at the hospital for every single cough or sniffle.

I know people (young, healthy people) that go to their HMO every month, or more! It's absurd.

I generally require very little medical care because I take good care of myself. But there are people who engage in very unhealthy activities that then feel it is their right to take from the public domain health services at essentially no cost to them. Personally, I would gladly throw the heroine addicts back out on the streets if it meant saving another emergency room for a sick child.

Those $5 co-pays should be illegal. We have to force people to shoulder more of the cost of their own health care costs and they will be more prudent with their spending. The core of the problem is that there are too many people taking advantage of their health insurance, forcing up the price for everyone else. Health insurance is just that, insurance. It isn't supposed to cover every single little thing.

Fewer healthy people clogging up the system will reduce costs for everyone and delay the inevitable collapse of our health care system.

Lastly, something needs to be done about this lawsuits...
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Re: United States is insolvent

Unread postby MOCKBA » Tue 19 Dec 2006, 22:30:48

$this->bbcode_second_pass_quote('nero', 'I') think the public has been well softened up for the change in policy that is going to have to occur. Most young adults don't even expect to receive social security anymore.

They might not expect it in public statements but their behavior didn't quite stand up to those words. Humans are animals after all and as such they very well fit into what Sir Darwin observed a while back. If they indeed expected no help from the government or any other entitlements for that matter, fertility rates would be way higher. We are not seeing that and the reason is that young adults in developed world just have no recent experience with poverty. Compare them to any young adult in Afrika or any young adult following any World War...
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Re: United States is insolvent

Unread postby nero » Wed 20 Dec 2006, 01:31:25

$this->bbcode_second_pass_quote('MOCKBA', 'T')hey might not expect it in public statements but their behavior didn't quite stand up to those words. Humans are animals after all and as such they very well fit into what Sir Darwin observed a while back. If they indeed expected no help from the government or any other entitlements for that matter, fertility rates would be way higher. We are not seeing that and the reason is that young adults in developed world just have no recent experience with poverty. Compare them to any young adult in Afrika or any young adult following any World War...


You're probably right there. They still act as if the entire social safety net built by the governement will always be around. But my point was that there has been alot of ground work done educating the public on the necessity of doing SOMETHING about social security. They're primed for a change and so are more likely to react peacefully when it does occur.
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Re: United States is insolvent

Unread postby SchroedingersCat » Wed 20 Dec 2006, 01:36:19

Health care is another example of how badly corporate welfare has failed. I pay through the nose for a low-cost insurance plan. I try to use it as little as possible. The thought of going in for a consult with my GP raises my blood pressure (really -- white coat syndrome).

A couple decades ago if I had say, pink eye, I would call my family physician and he would call the pharmacy with a prescription. Now, I would need to go to urgent care because it would take weeks to see my "primary care physician", wait a couple of hours, have some newly minted doctor say "yep, it's pink eye" and write me a script. The cost to them, me and my employer has grown by an order of magnitude, at least. Now multiply that times the 200 million insured in the U.S.

The cost for my wife to spend roughly 48 hours in the hospital to deliver our child was almost $15,000! No complications! $312.50 per hour for what? The only person who did anything extraordinary was my wife!

Modern health care and insurance is likely to be the first casualty of peak oil. May it rest in peace.
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Re: United States is insolvent

Unread postby nero » Wed 20 Dec 2006, 01:54:25

$this->bbcode_second_pass_quote('Tyler_JC', 'T')he problem with health care is that it is too cheap.


More correctly, it is too cheap for the person who chooses the amount of care provided. Your insurance provider doesn't consider health care cheap. Even if the patient had to pay large deductables it would still be a real problem because usually people let their doctors make the real decisions on what procedures are necessary. If your doctor says a biopsy is medically required do you really say "no" because it is going to cost you a couple of hundred dollars?

It's like getting financial advice from someone who is trying to sell you mutual funds.
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Re: United States is insolvent

Unread postby JBinKC » Wed 20 Dec 2006, 07:37:57

Regarding the situation fiscally with our government I think the government has a bail out plan and its called the Amero.

Health care needs to be deregulated to a point. Quotation for services, competition (just like any other business) and I should have a right to access to self treatment (i.e. access to class II drugs). Eventually medicare will have a cap once you reach it-tough. The subject of euthanasia will be a very big topic in the coming years.
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Re: United States is insolvent

Unread postby MrBill » Wed 20 Dec 2006, 09:05:35

Average longevity, and I do mean average, is strongly influenced by nutrition and access to clean water and sanitation. Throw in some common sense and pre-natal care.

The biggest returns come from treating working age adults with acute problems quickly allowing them to return to the workforce. There are no savings from keeping 80 or 90-year old seniors alive longer through expensive chronic care. The net benefit of allowing tri-mester abortions versus the time and money invested to save preemies offset one another.

With 6-8-10 billion people or maybe 4-billion workers in the world the overall gains from medicine are minimal at best. Important for you and your family. Crucial to the world economy less so.

Many countries pay less per person for healthcare than the US, eh, and have better results. Therefore, peak post oil it is probably an everyday luxury people will learn to live without. They will call their neighbors or the midwife and the doctor when all else fails. Needless procedures will not be affordable.

It is only the cad that is afraid of his own death. All the really decent people I have known accepted their own mortality with grace.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
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Re: United States is insolvent

Unread postby TommyJefferson » Wed 20 Dec 2006, 09:48:06

I see more physicians bailing on the whole corrupt socialized medical system and going private.

No Medicaid.
No Medicare.
No Blue Cross/Blue Shield.

A return to the old ways. They charge just like a car mechanic does.
Diagnosis: $40
Tune-up: $200
Major Overhaul/Surgery: $2000

They save thousands of dollars and hours by going straight.
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