On Wed, Nov 7, 2012 at 10:12 PM, kirby urner wrote: ... >> >> http://en.wikipedia.org/wiki/Fungibility >> >> for an introduction.) > > Not sure what you're saying as lenders ipso facto have powers to > enforce standards on debtors.
You were trying to identify what is paid for and hat is not, when it all comes out of the same pot.
> To me, Uncle Sam looks pretty seriously addicted
To borrowing? The only people addicted to something relevant here are the ones who believe in the conservative fairy tale I talk about further below.
Again: The deficit each each is roughly 7 percent of GDP. The Bush tax cuts are costing the US government a half trillion dollars per year, roughly 3 and 1/3 percent of the 15 trillion dollar GDP. Eliminate them and put tax rates where they were under Clinton, and we have a deficit each year that is only about 3 and 2/3 percent of the GDP. All we have to do to get the total debt to start to go down as a percentage of GDP is to get the yearly deficit below the GDP growth rate which historically has been about 3 percent. Get the growth rate back up to the historical average (since the Great Recession its been about 2.5%) and all we need is revenue increases and/or spending cuts of a bit more than 3/4 of GDP, which is about 125 billion - about the cost of the remaining war each year. Regardless, put tax rates back to where they used to be before Clinton, and problem solved for a long time to come.
There is an easily solvable crisis only because of this conservative fairy tale that so many believed since Reagan, that we can cut taxes again and again and again and again and if we never put taxes back up to where they used to be, we will not have to eventually slash and burn government spending to pay for these cuts.