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09/29/2013

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Thomas Rekdal

Judge Posner is probably right that long-range spending forecasts (or, for that matter, any forecasts) are largely exercises in futility. Still, the basic problem has been clear enough for some time. As every Congressional Budget Office prognostication has confirmed, we have promised way, way more to seniors than we can possibly deliver.

If one believes in "government by reflection and choice," as one of the Federalist authors put it, there may still be time to do something about this. I don't. We will go broke. Death, as they say, is nature's way of telling you to slow down.

Don Harris

Posner seems to suggest two countervailing pressures: (1) concentration of wealth and income, and (2) expansion of the social safety net which helps prevent a slide into poverty, or for those already poor, a slide into destitution.

One can easily see political instability arising from an extreme concentration of societal resources, and Posner has hinted at such in earlier posts. True, inequality is advanced by a parasitic financial sector, monopolistic practices, rentiers, etc., but also by structural forces (globalization, technological change) that hollow out the middle and working classes. What happens to our democracy when all that sustains the bulk of the population are insecure low wage jobs and governmental support? At a minimum, the bonds that unite us grow weaker (already happening) and our politics grows ever more brutal (ditto). Can a new equilibrium, a new social contract, one with the promise of long-term stability, develop from this?

Neilehat

When it comes to Budgetary Analysis, to achieve a Budgetary equilibrium, i.e. " a balanced budget", the mathematical equilibrium occurs when "Cash inflow equals Cash outflow". Now given the Fed. Budget, the two variables in the equation are multivariable in nature and I will allow you work out how these variables work together and against each other while trying to achieve a "balance" for yourself.

But, taking an "AXE" to both sides of the equation is "ignorant" at best. Especially when we are trying to achieve a financially stable Liberal Democracy...

kevin

This has been aa topic for a while and your just now talking about it?

Clayton Wohl

"conservatives want to shrink the federal government by drastically reducing federal spending, even if that means underfunding research, [...], law enforcement, and other normal government expenditures."

This overlooks the sentiment notably expressed by scientist, Terrence Kealey: government funding crowds out non-government funding and participation.

On the surface, governments are elected by a vote of the people, and the people are engaged to society through their elected officials. In reality, this is a very crude mechanism. Individual votes mean nothing and mere mortal people have little meaningful engagement with the aspects of society that are dominated by government. Right wing types feel that less government control translates to more meaningful non-government participation.

B Wilds

The crux of our economic woes lay in the fact that over the last several decades we have created entitlement societies on the back of the industrial revolution, technological advantages, capital accumulated from the colonial era, and the domination of global finances. They were built on the assumption that those advantages would continue in both Europe and US, and that ever greater prosperity and entitlements would be sustained through debt financed consumption growth.

In that eerie fantasy world, debt fueled consumption was to be the catalyst to bring about ever more growth. Now reality has begun to come into focus and it is becoming apparent that this is unsustainable. The entitlements and promises that have piled up have become overwhelming and even if unpopular we must face this fact. The remainder of this post can be viewed below,

http://brucewilds.blogspot.com/2013/11/the-crux-of-our-economic-woes.html

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