#1
|
|||
|
|||
America\'s Financial Future
http://www.youtube.com/watch?v=KIgrxpp97OQ
rest of the parts to the video series can be found in the right bar. wikipedia entry on David Walker: http://en.wikipedia.org/wiki/David_M...ler_General%29 (excerpt)" David M. Walker (born 1951) became the seventh Comptroller General of the United States and began his 15-year term when he took his oath of office on November 9, 1998. Mr. Walker was appointed by President Bill Clinton. As Comptroller General, Mr. Walker is the nation’s chief accountability officer and head of the U.S. Government Accountability Office (GAO), a legislative branch agency founded in 1921. GAO’s mission is to help improve the performance and assure the accountability of the federal government for the benefit of the American people. Over the years, GAO has earned a reputation for professional objective, fact-based, and nonpartisan reviews of government issues and operations. The long tenure of the Comptroller General gives the GAO a continuity of leadership and independence that is rare within government. Both elements help to allow GAO to consider long-range and cross-governmental issues and alert policymakers to problems looming on the horizon, such as unforseen growth of entitlement programs or deterioration of infrastructure. |
#2
|
|||
|
|||
Re: America\'s Financial Future
What seems strange to me from an European standpoint is that compared to Yankland Europe spends ALOT more on Social Security and welfare programmes.
For example My whole University Education was payed for (great value for tax payers [img]/images/graemlins/wink.gif[/img]) and also NHS>Medicaid in terms of spending and provision. Now Im wondering where we stand in regards to the same problem. Generalizing Europe is problematic as all European countries have different degrees of tax and welfare spending. However If yankland has it that bad you would think we would be mega fecked hard core up the xxxx. Things that might have mitigated that is of course more taxation. To be sure we are fecked but Im not sure if its to mega proportions. It just seems that in yankland you have had the worst of all probable outcomes via spending that hasnt been funded by revenues and then that spending itself being particularly inefficient. |
#3
|
|||
|
|||
Re: America\'s Financial Future
You euros also don't have an expensive globe-encircling empire to run, so you don't have to spend the social program revenues on the associated deficit spending.
|
#4
|
|||
|
|||
Re: America\'s Financial Future
[ QUOTE ]
You euros also don't have an expensive globe-encircling empire to run. [/ QUOTE ] Yea but that only costs 100 billion dollars though (lol). |
#5
|
|||
|
|||
Re: America\'s Financial Future
His $45tn figure is a complete extrapolation, based on currently low interest rates (which he says earlier will rise, but seemingly fails to factor this into his projection) and the assumption that all market imbalances will grow and continue to grow. I'd wager that the vast majority of the rise in 'fiscal exposures' is primarily due to the decrease in interest rates.
He doesn't do a very good job explaining exactly what his figures mean or how they were derived, which is all the more reason to me to be skeptical. |
#6
|
|||
|
|||
Re: America\'s Financial Future
[ QUOTE ]
I'd wager that the vast majority of the rise in 'fiscal exposures' is primarily due to the decrease in interest rates. [/ QUOTE ] Which decrease? Or... are you saying their refusal to raise interest rates enough is the major cause? |
#7
|
|||
|
|||
Re: America\'s Financial Future
[ QUOTE ]
[ QUOTE ] I'd wager that the vast majority of the rise in 'fiscal exposures' is primarily due to the decrease in interest rates. [/ QUOTE ] Which decrease? Or... are you saying their refusal to raise interest rates enough is the major cause? [/ QUOTE ]I'm saying that the present value of a payment that must be made far in the future is hypersensitive to a change in interest rates. Interest rates decreased around 3% over the 2000-2005 time frame he considered, which makes the present value of the payments to be made in the distant future skyrocket. So...umm...their 'refusal' to raise rates could be seen as what's making the figure LOOK so big. Just as 2000 was a spike in rates, 2005 was a trough in interest rates--they've inched back up considerably since. He just 'coincidentally' chose the window that made the problem of future obligations look as dramatic as possible. He definitely has some objective with this video other than unbiased public education. |
#8
|
|||
|
|||
Re: America\'s Financial Future
[ QUOTE ]
[ QUOTE ] [ QUOTE ] I'd wager that the vast majority of the rise in 'fiscal exposures' is primarily due to the decrease in interest rates. [/ QUOTE ] Which decrease? Or... are you saying their refusal to raise interest rates enough is the major cause? [/ QUOTE ]I'm saying that the present value of a payment that must be made far in the future is hypersensitive to a change in interest rates. Interest rates decreased around 3% over the 2000-2005 time frame he considered, which makes the present value of the payments to be made in the distant future skyrocket. So...umm...their 'refusal' to raise rates could be seen as what's making the figure LOOK so big. Just as 2000 was a spike in rates, 2005 was a trough in interest rates--they've inched back up considerably since. He just 'coincidentally' chose the window that made the problem of future obligations look as dramatic as possible. He definitely has some objective with this video other than unbiased public education. [/ QUOTE ] First of all do we know what interest rate he based the PV of future obligations on? Not sure we do. You wrote in part: [ QUOTE ] Just as 2000 was a spike in rates, 2005 was a trough in interest rates--they've inched back up considerably since. [/ QUOTE ] Here's a chart of the 10 year treasury over the long term: Long Term Chart of the Ten Year Treasury If 2000 was a spike what was 1981-82? It's clear that when Volker took over the late in the Carter administration that Fed policy changed drastically. Greenspan's tenure was basically a continuation of the policy that set off a disinflationary period that lasts to this day. I don't think we're going back to Fed policies enacted pre Volker but one never knows. Here's a linky with interviews of Mr. Volker that you may find interesting. Volker Interview |
#9
|
|||
|
|||
Re: America\'s Financial Future
When Bush proposed giving people a choice regarding directing their income earned towards government mandated retirement funds, he sought to decrease the future liability of SS. That's something that many people don't understand. Medicare/medicaid expenditures are growing faster than the economy and have done so over the long term. I'm fairly certain the government has underestimated Medicare/Medicaid obligations in the future because the estimates are probably based on growth rates in expenditures that are inline with economic growth. Medical costs have risen faster than economic growth and I think will continue to do so.
|
#10
|
|||
|
|||
Re: America\'s Financial Future
[ QUOTE ]
When Bush proposed giving people a choice regarding directing their income earned towards government mandated retirement funds, he sought to decrease the future liability of SS. That's something that many people don't understand. Medicare/medicaid expenditures are growing faster than the economy and have done so over the long term. I'm fairly certain the government has underestimated Medicare/Medicaid obligations in the future because the estimates are probably based on growth rates in expenditures that are inline with economic growth. Medical costs have risen faster than economic growth and I think will continue to do so. [/ QUOTE ] They cant grow faster than the general economy indefinitely or we'll all wind up working in the health care industry. That said, there is no question that in the late 80s and early 90s the short term growth in health care costs was underestimated. That was not confined to the government, however, it was a surprise to everyone consulting to employers and insurance companies as well. |
|
|