The debt problem can be solved in 2 easy steps.

1. Flat tax, no deductions. Poor? Too bad, pay the lower tax and deal with it. Rich? We're sticking it to you the same percent as the poor, so stop complaining about the millions you're taxed on and be happy with the many-more-millions you're not.

2. Hold a $1 lottery for the right to stick a pin into Bill Gate's butt 1 time, but award 1 million winners. That will generate enough revenue to alleviate the debt.

[QUOTE=Prime95;267920]Um, how 'bout going a mere one post back:[/QUOTE]Tell us just what specific Republican faults he acknowledged with that.

"That Time in 1979 When the U.S. Government Defaulted"

[URL]http://www.mentalfloss.com/blogs/archives/95271[/URL]

[quote]As the Congressional debate over the debt ceiling rages on this week, more analysts are raising the question of what would happen if the country defaults on U.S. Treasury bonds. . . . Could the government really default?

It sure could. It’s happened before! In the spring of 1979, Congress was in the midst of a similarly heated debate about raising the debt ceiling, Legislators eventually reached a last-minute deal to raise the debt ceiling and (they thought) save the day, but something went wrong. The Treasury didn’t redeem $120 million worth of securities that matured in April and May.

In other words, the U.S. Treasury defaulted on its securities even though Congress settled the debt-ceiling issue. What happened? It’s not totally clear.

Ball State University finance professor Terry Zivney later co-authored a paper entitled “The Day the United States Defaulted on Treasury Bills,” ...

By all indications, the 1979 default seems to have been the result of a run of bad luck. The deal over the debt ceiling was a decidedly eleventh-hour affair, and when it sparked a run on Treasury securities by investors, the department got backlogged on its paperwork. Moreover, the Treasury later explained that it had problems with the word-processing and printing software that printed its checks. (This defense is otherwise known as, “We wanted to pay you, but you know how these dang computers are!”)

... The government quickly got its act together and paid off investors—the Treasury still considers the episode to be a delay rather than a default—but Zivney’s research found that the blip had real consequences for the economy.

After the default, investors no longer saw Treasury securities as totally risk-free options, so the government suddenly had to pay a higher interest rate when it wanted to borrow money. Zivney and co-author Richard Marcus estimate that as the result of the small 1979 default, the Treasury had to up the interest rate it was paying by 0.6 percent on all of its debt. That may look like a tiny number, but when it’s spread across the Treasury’s entire debt, it adds up quickly.

. . .[/quote]

Prime95,

I appreciate your response. Unfortunately, pointing out the obvious in this case only confuses the issue. My purpose in posting has not been to point out Democrat faults. So asking where I specifically point out Republican faults (even in the post right after I do so) is besides the point.

ZeroHedge has some nifty charts illustrating the history of US debt-ceiling-hikes since 1940:

[url=http://www.zerohedge.com/news/filed-under-exponential]Filed Under Exponential[/url]

And the CBO just weighed in on the oh-so-predictable 11.99th-hour debt ceiling raise "agreement" and reveals it - even more predictably - to be just another ginormous can-kicking exercise. The "S&P Required" bit in the title below is a reference to S&P stating recently that unless the government came up with a budget plan which amounted to at least $4 trillion in real, credible budget cuts over the next 10 years, it would downgrade US sovereign debt. Yah right, I`ll believe that when I see it. S&P`s buddy Moody`s made a similar warning recently, but Moody's former top-economist Mark Zandi was tripping all over himself to proclaim-to-the-media that [url=http://www.zerohedge.com/news/moodys-chief-economist-says-proposed-deal-will-avoid-us-downgrade]they would be satisfied[/url] with the "bipartisan agreement" hastily announced over the weekend, even before seeing any real details or letting a semi-credible 3rd party (e.g. CBO) analyze it. Of course Zandi no longer speaks for Moody's, but I expect he has as good a good feel for how things work there as anyone. Of course once the CBO finished their first look, the "budget savings" proved underwhelming: No impact this year, and targeted cuts amounting to just 0.6% of next year's budget. And since these sorts of plans always blather about "10 year savings" but US budgeting is done on a year-by-year basis, any kind of back-loaded savings projections are meaningless:

[url=http://www.zerohedge.com/news/cbo-scores-bipartisan-plan-half-sp-required-savings-only-2-total-cuts-take-place-obama-reelecti]CBO Scores "Bipartisan" Plan At Half Of S&P Required Savings; Only 2% Of Total Cuts To Take Place Before Obama Reelection[/url]

House member (R-Texas), presidential candidate and Fiscal-balance guru and fierce Fed/Ponzi-Finance critic Ron Paul [url=http://www.zerohedge.com/news/ron-paul-exposes-deficit-plan-lies-cuts-are-illusory-not-current-amounts-spent-projected-spendi]describes what`s really in that sausage[/url]:
[quote]"No plan under serious consideration cuts spending in the way you and I think about it. Instead, the 'cuts' being discussed are illusory, and are not cuts from current amounts being spent, but cuts in projected spending increases. This is akin to a family 'saving' $100,000 in expenses by deciding not to buy a Lamborghini, and instead getting a fully loaded Mercedes, when really their budget dictates that they need to stick with their perfectly serviceable Honda. But this is the type of math Washington uses to mask the incriminating truth about their unrepentant plundering of the American people. The truth is that frightening rhetoric about default and full faith and credit of the United States is being carelessly thrown around to ram through a bigger budget than ever, in spite of stagnant revenues. If your family's income did not change year over year, would it be wise financial management to accelerate spending so you would feel richer? That is what our government is doing, with one side merely suggesting a different list of purchases than the other."[/quote]
[i]My Comment:[/i] And after opening in predictably higher risk-fully-back-on idiot-rally mode, European and U.S. markets plunged shortly after US market-open on a slew of horrendous economic-indicator data, most prominently the [url=http://globaleconomicanalysis.blogspot.com/2011/08/gap-and-crap-it-was-ism-plunges-to-509.html]latest ISM manufacturing index plummeting[/url] far below even the lowest prediction among that of the numerous economists polled last week. In Europe, the DAX responded via a now-classic HFT-driven flash crash ... for our German-speaking readers, here is [i]Die Welt[/i] [url=http://www.welt.de/finanzen/article13520241/Die-naechste-Panik-Attacke-kommt-aus-den-USA.html]describing that excitement[/url]:
[quote][url=http://www.welt.de/wirtschaft/article13519921/Einigung-mit-Restrisiko-USA-werden-zum-Sparmeister.html]Die Vereinigten Staaten sorgen für eine Panik-Attacke nach der nächsten[/url]. Erst war es die Furcht vor dem Staatsbankrott, die die Märkte durchpflügte. Nachdem US-Präsident Barack Obama eine Einigung im Schuldenstreit verkündet hatte, zerstörten katastrophale Konjunkturzahlen die Hoffnung der Investoren auf ruhigeres Fahrwasser.[/quote]
[i]My Comment:[/i] Here is the DAX intraday chart showing the step function:

[QUOTE=ewmayer;268081]ZeroHedge has some nifty charts illustrating the history of US debt-ceiling-hikes since 1940:

[url=http://www.zerohedge.com/news/filed-under-exponential]Filed Under Exponential[/url]

And the CBO just weighed in on the oh-so-predictable 11.99th-hour debt ceiling raise "agreement" and reveals it - even more predictably - to be just another ginormous can-kicking exercise. The "S&P Required" bit in the title below is a reference to S&P stating recently that unless the government came up with a budget plan which amounted to at least $4 trillion in real, credible budget cuts over the next 10 years, it would downgrade US sovereign debt. Yah right, I`ll believe that when I see it. S&P`s buddy Moody`s made a similar warning recently, but the folks there were tripping all over themselves to hastily announce that [url=http://www.zerohedge.com/news/moodys-chief-economist-says-proposed-deal-will-avoid-us-downgrade]they would be satisfied[/url] with the "bipartisan agreement" hastily announced over the weekend, even before seeing any real details or letting a semi-credible 3rd party (e.g. CBO) analyze it:

[url=http://www.zerohedge.com/news/cbo-scores-bipartisan-plan-half-sp-required-savings-only-2-total-cuts-take-place-obama-reelecti]CBO Scores "Bipartisan" Plan At Half Of S&P Required Savings; Only 2% Of Total Cuts To Take Place Before Obama Reelection[/url]

House member (R-Texas), presidential candidate and Fiscal-balance guru and fierce Fed/Ponzi-Finance critic Ron Paul [url=http://www.zerohedge.com/news/ron-paul-exposes-deficit-plan-lies-cuts-are-illusory-not-current-amounts-spent-projected-spendi]describes what`s really in that sausage[/url]:

[i]My Comment:[/i] And after opening in predictably higher risk-fully-back-on idiot-rally mode, European and U.S. markets plunged shortly after US market-open on a slew of horrendous economic-indicator data, most prominently the [url=http://globaleconomicanalysis.blogspot.com/2011/08/gap-and-crap-it-was-ism-plunges-to-509.html]latest ISM manufacturing index plummeting[/url] far below even the lowest prediction among that of the numerous economists polled last week. In Europe, the DAX responded via a now-classic HFT-driven flash crash ... for our German-speaking readers, here is [i]Die Welt[/i] [url=http://www.welt.de/finanzen/article13520241/Die-naechste-Panik-Attacke-kommt-aus-den-USA.html]describing that excitement[/url]:

[i]My Comment:[/i] Here is the DAX intraday chart showing the step function:[/QUOTE]

And still no tax hikes for the rich.

Silverman,

Do you really want tax hikes on the rich before they even start paying down the debt? I'm all for increasing taxes on the rich, closing loopholes and the like [b]IF[/b] government used the money wisely. But at this point it would just give the politicians more excuses to waste the money and pretend they are saving money when in fact they are incurring more debt this year than last year.

[QUOTE=R.D. Silverman;268082]And still no tax hikes for the rich.[/QUOTE]

Well, that issue is actually quite interesting ... If I read the 'agreement' correctly, while there is no mention of *adding* such, it is well-known that the Bush-era tax breaks for the high-income folks will expire at year's end ... and there is no mention of extending them. There has been some speculation that this was a concession Obama wrung from Boehner, but of course Boehner would not want to *announce* such a tacit agreement to the Republicans and tea partiers. Stay tuned for more on this - fellow readers, feel free to weigh in if you read anything that updates or contradicts the above speculation.

-----------------------------

As for a question many are surely asking, "what to do with one's investments?", I won't offer any advice except the general note that multiple data (e.g. the latest US GDP revisions and manufacturing numbers out of US, Asia and Europe) point to a global double-dip recession already being well underway, and there are multiple extreme-danger signals flashing: Sovereign-debt crises in Europe and the US, massive credit bubbles making loud "pffffffffft" noises in China and other BRIC nations, job market in the US remains firmly moribund despite the happy noises in certain areas, notably high-tech and Ponzi finance, though the latter is showing signs of strain now that the government-supplied financial cocaine is running out.

For myself, I (somewhat belatedly) cashed out all my company ESPP (employee stock purchase plan) shares last Tuesday and went into the weekend nearly entirely in cash, except for a small "disaster hedge" short position I started the same day I cashed out my ESPP. With respect to the latter, the idea is that one is confident that there is going to be a major market selloff (in the -20% range), buy some puts which are roughly that much out of the money (and hence should be very cheap), and thus will pay off handsomely if the bear market prediction comes true. (If not, they expire worthless, but they were cheap, so it's only a small loss). it's a good question as to what one should short here - a broad index short (say S&P500) is probably a good idea. I decided to put a small short on one of the "top 5 most bubbleicious dotCom mania v2.0" stocks I've been tracking for most of the year. Originally had planned on Netflix, but missed the recent brief pop over $300 and next thing I knew, NFLX had announced less-than-jaw-dislocating earnings and guidance and the stock dropped 10% in a day. Around the same time, another one of my T5MBDM2.0 watch-list companies, China Internet-search giant Baidu, shot up by a similar amount to a new all-time high, on little real news which would justify such a move. So I shorted that. Those puts quickly doubled and I was sorely tempted to sell them last Friday, but decided to give the DC dysfunctionality a few more days. Today's price range for those was from a full 1-2x what I paid (Opened at the low, quickly doubled on the ISM miss, then started settling back again), I dumped them at about 1.7x. Yes, such a quick-flip defeats the purpose of a disaster hedge, but given how volatile the markets are, the time-is-money cost of all options, and the added danger of betting against the interests of the politicians and bankers in keeping the debt-Ponzi going, "take the money and run" - good thing, too, as the puts I sold finished the day back down close to breakeven. So 100% cash, and waiting for the inevitable "debt ceiling raise market orgasm" to re-short whatever T5MBDM2.0 watch-list companies are looking most bubbly at that time. Again, only betting a very small % of my portfolio - this stuff is too crazy to wager more. But for this day, I'll happily take the 6 months' rent money from the pro-Ponzi gamblers.

[QUOTE=Zeta-Flux;267980]My purpose in posting has not been to point out Democrat faults.[/QUOTE](No one claimed that was your purpose.)

[quote]So asking where I specifically point out Republican faults (even in the post right after I do so) is besides the point.[/quote]Yes, asking that would be ... if anyone [I]had[/I] actually asked that. [U]I[/U] never asked where you specifically point out Republican faults, and I don't recall where anyone else did, either.

Instead, you've just trotted out another evasive straw-man to try to mislead readers.

- -

Let's review what I [U]ACTUALLY[/U] posted:

[QUOTE=cheesehead;267721]Yes, that's one way to weasel out of acknowledging Republican faults[/QUOTE]I didn't say "... [I]pointing out[/I] Republican faults", which would be to bring them to the thread's attention before anyone else did.

I said, "... [U]acknowledging[/U] Republican faults", which is admitting the existence of faults [I]that had already been pointed-out (by another)[/I].

[quote=cheesehead;267721]When you don't realistically admit (without strawman exaggeration) that Republicans really, truly made some mistakes,[/quote]I didn't say "[I]... point out[/I] ... that Republicans really, truly made some mistakes", which would be to bring Republican mistakes to the thread's attention before anyone else did.

I said, "... [U]admit[/U] ...", which is to acknowledge descriptions of mistakes already pointed-out by others.

As for my "(without strawman exaggeration)", it looks like I should have written "(without strawman exaggeration, [I]misdirection or evasion[/I])".

[QUOTE=cheesehead;267914]Will you please point out for us where you've posted sincere acknowledgements of Republican faults described by other posters?[/QUOTE]I didn't write, "... point out for us where you've [I]pointed out[/I] Republican faults ...".

I wrote, "point out for us where you've posted sincere [U]acknowledgements of Republican faults described by other posters[/U]".

- -

I never framed my statements so as to imply that you had any obligation to have [I]taken a first step[/I] in describing or listing, or "point out", Republican faults or mistakes.

But once again you dance, dodge and evade my question by responding with a straw man instead of straightforward honesty about what I actually asked.

[QUOTE=ewmayer;268088]As for a question many are surely asking, "what to do with one's investments?", I won't offer any advice except the general note that multiple data (e.g. the latest US GDP revisions and manufacturing numbers out of US, Asia and Europe) point to a global double-dip recession already being well underway, and there are multiple extreme-danger signals flashing: Sovereign-debt crises in Europe and the US, massive credit bubbles making loud "pffffffffft" noises in China and other BRIC nations, job market in the US remains firmly moribund despite the happy noises in certain areas, notably high-tech and Ponzi finance, though the latter is showing signs of strain now that the government-supplied financial cocaine is running out.[/QUOTE]Likewise, I won't offer advice --- I'm not allowed to because I'm not registered under the relevant regulations.

However, my wife and I have been taking financial advice over the last couple of years because we are an age when significant amounts of cash have been arriving. Specifically, my father died a couple of years ago and Jean has just retired and taken a cash sum element from her pension scheme. Our approach has been to follow the old advice: keep several months living expenses (at least) in cash or cash equivalent and diversify what's left over. Some of our stuff is in gilts (the UK equivalent of US Treasury bonds), some in UK market tracker funds, some in highly speculative developing-economy stocks, some in somewhat less risky (we believe) managed US, UK and European managed funds, some in company bonds, and so on.

We also applied the diversification advice to the financial advisors. It's unwise, in my opinion, to rely on a single so-called expert.

We're interested in long-term investment (>= 5 years) and don't mind too much if we lose 20-30% of our money next year (another reason for keeping a good cash-equivalent float) as long as it comes back again in good time.

YMMV.

Paul

Some interesting comments on Bloomberg:

[url=http://mobile.bloomberg.com/news/2011-07-28/democrats-can-lose-on-debt-win-on-bush-tax-cuts-commentary-by-ezra-klein]Democrats Can Lose Debt Fight, Win on Bush Tax Cuts: Ezra Klein[/url]

Selected reader comments:
[quote][b]Kiev500[/b]
5 days ago

Great, so the Bush tax cuts for the wealthy will survive a second time under Obama, a man who promised to end them. You say time will eventually end the tax cuts, but we didn;t elect time president, we elected Obama. And why did we elect Obama? -Because of his campaign promises, most of which he has broken or reneged on.

As a Democrat, I look at President Obama’s re-election campaign and I’m not excited
...
I look at America and see Guantanamo still open. I see America involved in more than twice the number of wars that president Bush started. I remember a candidate who promised to close Guantanamo and end those wars. In hindsight, I realize that Obama has not pursued the promises he made to progressive democrats with any discernable enthusiasm, and I wonder why that is.

I look at the world and see wide-spread political unrest spreading across many states in the mid east. This unrest has spawned conflict that President Obama has openly encouraged and in some cases directly supported with funding and military operations. Obama took advantage of America’s desire to end it’s involvement in the wars in Iraq and Afghanistan, but has in fact doubled the number of wars we are involved in. The governments of several mid east countries, including Egypt and Tunisia, have collapsed and been replaced, while Obama continues to act directly against the government of Libya and indirectly against the government of Syria. Obama claims these acts are intended to protect civilians. That old argument helped get us into the Vietnam War.
...
Remember when Bush said "Saddam must go, -he must leave Iraq"? Obama said the same thing about Gadhafi in Libya. It was a Freudian slip.

Regarding Libya, Obama has argued that the war powers act does not apply to him because we are not involved in “hostilities” as the legal term was intended to be used. The bottom line is Obama has involved the US military in operations that are killing people in a foreign country that did not attack us, and has done so without the constitutional approval of Congress. In addition, Obama presides over a CIA drone program that targets and bombs groups deemed unfriendly in Pakistan and Yemen. Taken together, all this sounds like something Dick Cheney would do. We didn't vote for this.

Many progressives have asked themselves where the change went. This man who rode a popular wave of change to the White House has applied that mantra of change almost entirely to Arab countries in the middle east, while little to nothing substantial has happened at home. This man who promised he would end the mid east conflict between Israel and the Palestinians through peace negotiations has accomplished nothing in that regard besides being lectured to and publically humiliated by Israel‘s prime minister.

I cannot forgive Obama's veto in the UN Security Council of the recent resolution denouncing Israeli Settlements and continued Settlement construction in occupied territory. This illegal Settlement construction prevents any possibility of peace and prejudices the outcome of future negotiations. It also violates Israel's commitment from the Road Map peace plan.
...
Obama seems to operate on the premise that Democrats have no choice but to re-elect him because the other guys, -the Republicans, are worse. I’m not ready to re-elect Obama without a careful analysis of what he promised to do and what he has actually accomplished for the party that sent him. From my perspective, that analysis does not produce a favorable result.
[b]
We voted for a man who would end the wars, close Guantanamo, repair the economy, create jobs, reign in the un-regulated and immoral behavior of Wall Street, protect the middle class from job losses and mortgage foreclosures, and adjust our income tax system to better address the incomes of the wealthy that completely outstrip the current tax table brackets. We got none of that. After generously bailing out the banks, Goldman Sachs and Wall Street, and big corporations including General Motors and AIG, -and after extending the Bush tax cuts for the wealthy, Obama has done almost nothing for working class Americans who can’t find jobs and are losing their homes to foreclosure. Worse, it seems that Obama is about to extend the Bush tax cuts for the wealthy AGAIN with his plan for raising the debt ceiling. It's unbelievable! We didn't vote for this.
[/b]
In fact, if you look at the net results of the first 2 years of Obama’s administration, what you actually see looks a whole lot like George W. Bush’s third term.

Obama didn’t change Washington. He didn’t change the things he promised to change. He hardly even tried. Instead, Obama changed himself. It seems to me that his real agenda was to eliminate Hillary Clinton in the primary, get elected as a black democrat who was opposed to the wars, accomplish little to nothing for Democrats, compromise at every opportunity with Republicans, and basically run out the clock on all the hopes and dreams of Democrats and working class citizens who voted for him.

So will I vote again for Obama? -Fool me once, shame on you. Fool me twice, -shame on me.

Don't get me wrong, I'm not against Obama because he's black or because some idiot questioned his nationality. Far from it. I'm against Obama because he's red. He has kept more of George Bush's campaign promises than he has kept of his own. I didn't vote for that, and I sure as Hell won't vote for it a second time.

[b]marquis6[/b]
2 days ago

Politians make big promises but being able to deliver those promises is hard. We had all these great expectations for Obama's Presidency and so did he but reality delivered something different. You can't be too far right or too far left in running this country. You need to be somewhere in the middle and that is what has happened to Obama. I think he is doing the best that he can with what he has to work with. Our expectations for him far exceeded reality, that is all. As a country, we expect our Presidents to solve all our problems. They do what they believe is the right thing to do which may prove later to not be a good decision...just like the rest of us. I think Obama did a really good job up until the time the GOP took control of the House and created gridlock. Now he will really be forced to play cards he may not want to play but reality dictates compromise sometimes.

[b]Kiev500[/b]
1 day ago

No, the political "middle ground" is utterly worthless as a descriptive term because conservatives have taken the middle ground and moved it several miles to the right. Our glorious leader has done nothing to take that middle ground and move it back to the place it used to be. Thus when he compromises, they move the middle further to the right, he compromises again, they move the center again, over and over, ad infinitum. Aside from that, the lack of presidential words of leadership on issues like the right wing attacks against Acorn, Planned Parenthood, women's reproductive rights, worker's rights, public radio, union rights and collective bargaining, and new voter-ID laws that oppress or prevent hundreds of thousands of legitimate minority votes -are unforgivable. He has sat quietly as Republican governors in several states attempted to destroy some of the most prominent political organizing arms of progressive democrats. Regarding the economy, employment, banks, and Wall Street, he has operated like the ineffective coach of an arrogant football team that does not like him or his policies. This football team has become accustomed to making their own rules and serving their own corrupt interests, including fixing and betting on games for profit. They have no intention of allowing the coach to end their little party. To be rid of the coach and his policies, the team has chosen to intentionally lose until the coach gets fired. Think about that for a moment. What can the coach do? How far is he willing to go to assert the authority of his office and regain control of the situation? In order to overcome this situation and be effective, the coach needs to walk out onto the field and shoot a couple of those players. Right there, under the lights, in front of the crowd. An example needs to be made of real consequences for disrespect of the coach and his position of authority. Otherwise, these “football players“, who are over-paid, arrogant, self-centered, and in many cases corrupt, -will forget that they play to defend their home field, their school, and the honor of the men who came before them, -and they will continue to place greed and personal profit ahead of fidelity and patriotism. Of course, in my example above the football team is a metaphor for Wall Street and the corporate establishment. I’m sure some would ask me just how this “football team” has chosen to lose. Failing to produce American jobs while allowing more and more American worker's homes to fall into foreclosure puts pressure on the middle class, who the "team" hopes will ultimately fire the coach. These groups, including the US Chamber Of Commerce and dozens of corporate-funded PACs, have gone out of their way and spent millions of dollars to destroy this president and the reforms that a majority of American voters supported. To my regret, it seems to me that Obama has played right along with this "kill the middle class" strategy which is aimed at undermining democratic support for the agenda Obama was elected on. He CAN'T play along with that. We must refuse to allow the leader we elected to lie down for that. You can't compromise with a group whose only goal is to destroy you. Like the coach above, Obama must take control of the situation.[/quote]