Public debt is not like private debt: Why public debt is not like credit card debt | The Great Debate




Unchecked deficit spending can be a problem (saving the argument of deficit spending as a response to Recessions). But, oh yeah....



The Shrinking Federal Deficit Hurts a GOP Argument - Businessweek

If you begin your chart when stimulus first kicked in, you'll get that type of curve. Especially if you frame it properly. Turn it upside-down, and it's a hockey stick.

The argument that public debt is a good thing ignores inflation. Right now, we're keeping inflation artificially low. When those practices stop... we'll all feel the effects.

Big-government supporters like inflation because it reduces savings and narrows the government-dependency gap.

It amuses me that the misguided deficit hawks back in 08/09 were all "Oh God don't use stimulus spending, the resulting debt (and/or deficit) will kill us!" And since then the Obama administration not only got stimulus to get the country out of recession, they've taken the deficit to lower than it was when they took office (half the size, in fact).

I wonder what these same people are going to be saying if the deficit ever gets to 0, or, god forbid, we run a surplus.

No wait, I don't, that happened, and the same people had Bush spend all the surplus on tax cuts.

Then when revenues drop, you get deficits again.

So you cut spending.

Then you get a surplus, so you cut taxes again.

See where this is going? The deficit hawk argument ends with no government. And if you want that, move to Somalia.

You're conflating deficit hawks with Bush supporters.

You're right, this paints a much worse picture:

Only in the sense that they're both deeply misguided on this topic.

There's also the question of what the 2013 (and beyond) debt really is. Many say we'll run a $1T debt in 2013 rather than what the budget office shows. Many noticed that the debt clock didn't change for quite a while this year in order to stay under a limit that was never respected.

US Federal Debt Definition - plus charts and analysis

The charts there look very different, of course. The big issue being whether we're being sold a huge pack of lies with those blue bars at the right end of the CR chart.

Rather than the emotional stuff, what's the real argument? What is the answer to the question of what you do when you devalue your currency by spending a lot more than you're taking in?

It's kind of like a geyser. Right now, it's plugged because interest rates are being kept artificially low. What happens when the pressure on those interest rates becomes too great?

Is it possible that some deficit hawks actually argue for letting the Bush tax cuts expire? Or understand that Bush was fairly damaging to the economy himself - not to mention responsible for the enormous disaster (for so many reasons other than financial) that was Iraq?

You can say that about literally anything, though.

I mean, the Denver Broncos look to have a really good trajectory to win the Super Bowl this year, but it's all quite possible we've been fed a pack of lies about their supremacy and Peyton Manning will be revealed to be Ryan Leaf in disguise come January.

The projections are the projections. If you've got something that substansively challenges the projections, then post it. If you want to argue via speculation that the trend won't continue due to reasonably-argued X, Y and Z, then that's fine too. But don't retreat with some vague claim of "we're being fed a pack of lies". There's literally no constructive way to discuss that.

Debt and deficit are two different things. The total debt is rising, but the yearly budget deficit is decreasing. The budget deal reduces the yearly deficit as compared to staying with sequestration. Spending increases, but revenue increases as well and lowers the deficit.

Are you talking generally, or in the context of responding to a recession?

Here's what happens when you practice austerity in response to a recession: Financial Times | Error | Akamai Error


And, as in the past, this will likely coincide with a recovering economy and, critically, recovering tax revenues, which will reverse the "problem" of "spending more than you take in".

Reasonable economists understand this is a balancing act, and managing economies in this manner requires work.


You get some of these mythical people into power and maybe we'll have a conversation. For now your choices are the insanity that currently passes for fiscal policy in the GOP vs. an administration that's overseen a recovery from recession, unemployment dropping from 10% to 7%, and a halving of the deficit, all without runaway inflation.

Edit: The link works, it's just giving the forum software a hard time.

You don't have to practice austerity in a recession, as long as you pay off the debt once out of it. We deficit spend constantly.

The Federal Government is keeping interest rates low enough that there is already talk that banks might start CHARGING you to keep your money there, rather than the tiny pittance that barely passes for interest they give you now. THAT'S going to be fun.

Try teaching a kid about savings and compound interest when their savings account offers 0.1% annually...

That part I'll agree with. The problem is we still are far from full employment and cutting hundreds of billions out of the economy will only add to that problem. I saw a couple of charts recently that showed private job creation in line with other recessions, but public job creation far into the negative. If we had followed the path of other recessions we'd be much closer to full employment and in a much better place to tackle the structural deficit.

Our deficit spending is like a gambler winning at the tables. After 3-4 winning hands (things start to turn around in the economy), we should have enough discipline to stop it. But, like the winning gambler, our government can't. We will only stop once we run out of money :D

What we're trying to avoid is Japan-style over-spending. Yes, they make it through, but it's very painful. Austerity isn't the recommendation here - I think that's a loaded word that in modern times means less government increase than projected rather than a real cutback.




Question being what is the balance point. Reasonable is also a loaded word in this context. Deficit hawks would argue that we are so far beyond the balancing point that extreme cuts are necessary.



Some would say insanity passes for fiscal policy in the administration. Some would say that unemployment rose because of this policy, and continues to rise because more people are becoming dependent on government for everything, and have left the work force entirely. Some would say not only that, but the new jobs being created are either public sector or very low-paying. And some would say the runaway inflation is inevitable as soon as the fed is directed to stop holding interest rates at an unsustainable level.

Finally, when you say "maybe we'll have a conversation", that's adding an emotion that shuts down substantive discussion. Obviously, we have very different views on economic policy. It's frustrating to me that you post charts that ignore a large portion of the debt. We're in a great period for adding debt because we're still in the post-9/11 phase of our history, people will still lend us money (especially China) and politicians on both sides are fundamentally cowards when it comes to cutting off the spigot. But it's not a budget cut when it amounts to reducing the expected increase in something.

Public sector jobs are well below the level they were when Obama took office.

But federal employment is up, and participation in the work force is down.

Alright, this is malarkey. Yes, they are down. Why? Because they've replaced those people with short-term contractors who are actually more expensive than salaried public sector jobs. I know how this works because I've managed in the government before. My old group where I used to work is now at an all time high. 55% of the workers are contractors.

Need to cut? Move a couple salaried employees to another division and hire on contractors.

Bigger budget available? Time to hire back those employees you moved over.

It's all a shell game.

If public sector jobs are up and the government jobs are secretly up, why is the U16 so damn high?

Minimally.

There's no way to argue that most of the jobs created are in government. Public sector jobs are in line with other recoveries, but public sector jobs are way down.

The argument lies in the reduction of full-time private-sector employment.

The calculation of unemployment at 7.0% is misleading - it doesn't reflect lower participation in the workforce and increased part-time low-wage employment.

So the small increase in federal government employment (state and local, as you point out, is way down - the pending pension problem has seen to that) is compared to a large reduction in full-time private-sector employment.

It tuns out money is not just thrown into a giant hole and lit on fire, contrary to some ignorant beliefs. While there can be some waste, spending on things like roads, military spending, and food stamps actually go back into the economy and provide goods and services to the community as well as private sector job growth, in some cases.

SI

Then show us some non-misleading numbers.

Only one side of this conversation (JPhillips & I) are bothering to post actual numbers with actual citations and proof, which is why I have to do this:


:rolleyes:

It's not a substantive discussion if only one side is being substantive.

You know, it's bad enough that people try to make the analogy between public and private debt, but I think you've managed to construct an even worse analogy. Well done! :D

Did you even read the article? The result of the cutting back that Japan did (after first trying stimulus with mixed results) was a) serious economic stagnation, b) huge ballooning debt (mainly due to a stagnant economy = lack of revenue) and c) no real platform, even 20 years later, to climb out of the hole thus dug.


Those deficit hawks must then be making the argument that the U.S. economy is fully recovered and in good shape then, right? So, that's the question. Have we recovered, or does the economy need more help?


And those people have no actual evidence for any of those claims except "their gut" and "truthiness".


Well, you misread me. It's not emotion, it's dismissal.


Well, basically, that's because I've posted two charts about the deficit.


I'm reasonably certain I have never construed any of this as an actual cut of a budget. I'm certain I've never used that phrase. I understand the difference between cutting a budget and a deficit.

It's unfortunate that you have to resort to personal insult. You have a very definite view and don't seem open to discussion. At some point, either debt is paid back or you devalue. We seem headed for the latter, which will hurt a lot of people.

I think it's best to use the ignore function at this point.

mmmkay, can someone point out what the personal insult was that I used?

Was wondering that myself.

You said he wasn't being substantive I guess?

IMHO you were actually far more gentle than say I would have been had I gone through and picked apart the series of posts that you did.

Somebody's apparently feeling a little sensitive today.

No, just tired of those who are dismissive of anyone who is concerned about the debt. It's pointless to discuss when they feel so strongly that any opposition is not only wrong, but a sign that someone can't read or can't think.

I don't want my son to grow up in a country going through what Greece is going through now. So I feel strongly that we need real budget reform, just like we need real health care reform. I don't see any sign that Washington is capable of addressing either issue, long-term. You can't run this high of a deficit without devaluing your currency. We can't keep propping up our currency without having to pay more down the road.

From now on, I think it's best that I put people on ignore who can't have this debate without resorting to insult. It's one thing to feel strongly. It's another to behave without respect for opposing views.

When I make assertions I do my best to back them up with facts, figures and other citations as possible, pointing out when I'm just speculating. All I'm asking for (on the previous page), is for those making competing assertions to do the same. To me, that's the respectful way (ironically) to conduct this kind of discussion, as opposed to just (say) putting unsupported assertions out there.

Let me ask this question to flere, etc:

When DO you start paying back the debt?

This conversation was happening, on this very board, before the real estate bust / recession hit. It's such a huge conversation during this recession and the climb out of it because we WEREN'T paying it off, except during a brief time under Clinton when there was a surplus, helped by a bunch of false economic bubbles (propped up stock prices based on shady accounting practices that came crashing down).

Nobody insulted you though!

You didn't back up your thoughts with any facts/figures/citations. If you're not willing to do that then you're not having a real constructive conversation about it.

If it was just a case of not having them at-hand, at least say "don't have sources for this, can someone provide?" or "i'm busy but i'll look up the sources I'm thinking of later."

Pointing out that you didn't include any actual evidence for anybody to dialogue over, and just based it on your feelings and anecdotes (and thus anybody responding and trying to discredit those is de facto going to come off as insulting you in your eyes and evoke an emotional response) isn't attacking you.

Not including actual evidence/citations/facts and figures isn't engaging in constructive conversation.

If you look at today's discussion, I've provided links and summaries of articles as well as an argument both based on opinion and on fact.

Even though it's not the case today, you certainly can have a constructive conversation without providing citations for every post you make.

Are you calling just about every post on this item non-constructive? That seems harsh.

As for the insulting part, it's part that post, part others, part to me, part to others. I've reached a point where I have no tolerance for the Fox/CNBC style of shouting down others without listening or being respectful. I have no idea why that stuff gets ratings - I can't watch for more than a few seconds. I like discussing politics, but respectfully. So I'm just going to ignore people who aren't respectful to others.

To be technical, we pay back the debt now. I am led to believe it's a rather large part of our budget.

I think the question you're asking is when do we get serious about balancing the federal budget and even aiming for surpluses that would allow us to pull the debt down to a level that is a) structurally sound and b) makes most people happy (with a being more important than b in my mind, but there you go....)?

To answer that question, you have to break it down further, into spending and revenue-based questions:

1. What is the appropriate level of revenue to generate given overall economic conditions and a goal of having a strong economy and what levers (i.e. taxes) should be adjusted to meet this revenue (also knowing that a stronger economy generates more revenue without changes to tax rates - see the late 1990s)?

2. What are appropriate spending cuts given a) need for that spending, b) the population's agreement on the necessity of that spending and c) the economic effects of any such spending cuts?

Sound familiar? Because it's the same old taxes & spending arguments we've had for ages.


Since we now have unprecedented access these days to data, models, etc..., in a non-partisan approach (which, granted, will never happen), we might ask the following:

What sources of revenue can be increased, and to what level, without deleterious effects on the recovering economy?

What spending line items can be decreased, and to what level, without other deleterious effects on the recovering economy?

And that's the problem: no one can agree on the answers to those two questions, probably least of all our politicians. Thus, we're left with folks seeking simpler solutions, such as unilateral and massive spending cuts, or unilateral and massive tax increases, neither of which is likely to actually work given the likely deleterious effects of such radical actions.

Which is why I respond with incredulity to those who would propose we focus on reducing the debt as a primary goal, given that it implies radical actions, and usually radical spending cuts.

Well, here's your answer:



Two key points:





Look, if you want to reduce and/or eliminate the debt, you're going to need to:

1. Spur growth and keep the economy strong
2. Raise revenue
3. Cut spending, especially spending with questionable ROI
4. Avoid decisions that create massive mandatory expenditures (like wars)

And I think that's the key problem that I've seen others post as well - no one can agree on how to do it, so let's not bother. That's not a solution either.

If no one can agree, then doing something across-the-board so everyone feels the pain becomes necessary. There is no "easy" solution, there will be pain. But the longer we delay, the worse the pain is going to get.

We can talk all we want about "good" levels of deficit, but as long as that debt grows, and the interest on it, a larger percentage of our taxes go to pay that interest, and we have less for all the other things we need to spend it on. Eventually we reach a point where it's all going to interest, and not paying off anything else. Or we default on that debt. Both are pain, big pain.

So I understand that getting the budget balanced and paying down the debt won't be easy, will hurt, and will cause problems, I just think the result of NOT doing it will be far, far worse. Maybe I'll get "lucky" and be dead by then, but I don't think so, I think it's coming much much sooner than that, based on history and the magnitude of the debt.

Unfortunately I'm not sure #4 is always a viable option. #1 I'm not sure how you actually do, again the last time our economy was "strong" turned out to be mostly a sham of illegal accounting tricks.

2 & 3 I agree on, and we can certainly have this conversation.

But we've got you and others going "the deficit is okay", and that's where I think Jim and myself and others have a big problem.

I'd target under 6% unemployment before I cared at all. The debt is a possible crisis in the future, the lack of jobs is a real crisis currently. I wish we'd worry more now about the current crisis.

I look at where I grew up in rural Ohio and see massive suffering because there are no jobs. Cutting spending doesn't mean shit to these people because they can't find work. The real physical and emotional damage being done by a lack of employment should be on the front pages papers every day. Congress should be screaming and investigating. Every election should turn on who will get people working.

But we can choose not to start wars.


That's greatly overstating things. There was massive real growth and productivity improvements in the 1990s. Just modern inventory management alone has reaped hundreds of billions of dollars.


I think we should eventually go back to the Clinton tax rates and if healthcare expense growth doesn't slow something big will have to happen there.


I've certainly never said the deficit is okay, just not as important as the real crisis of unemployment.

I'll admit I haven't studied this much, but a world with zero new U.S. Treasury debt would be risky. Where would all that money go? How would that change the global power structure?

edit: That doesn't mean I think any debt level is sustainable.

You used facts and data. Shame!

HOW are you going to cure unemployment? This is much easier said than done, especially when so much of the population does not value education and is growing up thinking things should get handed to them. People like to wave their hands about "creating jobs", but even with free education too many people don't have the basic skills needed for so many of the jobs that are available. And more educated people is likely to mean more businesses (with the people to run them) to hire those folks.

But the problem isn't money, the education is available, people just won't take advantage of what's there.

And for those that want to start and own businesses, the road is daunting, between convoluted regulations, taxes, and other roadblocks.

So we need people to start taking advantage of the education that is there, and we need to create a business-friendly climate with a streamlined set of regulations and taxes that is easier to follow and not run afoul of.

But creating a business-friendly climate does not seem to be supported by those who scream the loudest (I use that intentionally, I'm not talking necessarily about folks here, but what you see in the media etc) about jobs.

And yes, I think you need to do something about run-amok corporations, but heck even Obama thinks we have businesses that are too big to fail...

That's the stock market you're thinking of (the sham of illegal accounting tricks). The economy continued to produce:



An improving economy improves revenues. Improved revenues assist with deficit reduction. Thus a focus on improving the economy is important and should be a major part of any deficit reduction strategy.


I'm tired of people putting words in my mouth. I did not say "the deficit is okay". I did say (well, post a chart) that it was decreasing, and that this was a good thing. Which is completely and utterly different.

Don't misconstrue my positions and I won't misconstrue yours.

Every election should. So how do we get more people employed, long-term? How do we deal with a record-level of people who aren't employed full-time? The stimulus ended up lowering employment when you count people who have left the work force. And we're only getting growth in part-time work.

The number we should target is percentage full-time participation in the work force. If stimulus had wound up getting that number down, then we could begin to turn this around. Instead, it's at a 35-year low - and numbers going back a few decades reflect far less participation from women.

Notice: Data not available: U.S. Bureau of Labor Statistics

We disagree on how close we are to crisis with the debt. We don't feel it yet because the fed is artificially keeping inflation low. The minute that stimulus stops, we'll have double-digit inflation. Then not only are people out of work, they'll see whatever savings they have reduced in value.

Well, we just went from 10% to 7% in the space of about three years. Let's examine how that happened and maybe do more of it.

Edit: Having said that, Greg, I certainly agree that long-term structural unemployment is an issue we should be looking at closely, and agree with many of the challenges you raise. I would also agree with JPhillips that working on that issue should be one of our more important priorities, given that strong employment will aid with many of these other challenges.

I did miss this bit earlier, but when I keep seeing graphs showing "deficit as a percentage of GDP" explaining how good things are, and it seems to keep ignoring the "total debt" question, that's when I jump to the "deficit is not really a problem" conclusion.

Because 15-or-whatever trillion as a big number doesn't really mean much when a dollar today is not worth a dollar yesterday and certainly is not worth a dollar in 1980. It's really where using the average family as a model for national debt breaks down. Deficit as a percentage of GDP or deficit adjusted for inflation are more meaningful.

SI

Well, that's your interpretation. I would term it as "explaining how relatively not terrible things are".


OK, you're conflating two things (debt & deficit) while I'm separating them.

Public debt has some problems, perhaps chief among them a) the money lost to interest payments (though remember a lot of this interest goes to actual Americans who hold this debt) and b) the risk of the debt ballooning should interest rates rise (which is what I think Jim has been pointing at).

However, to me, those problems aren't as important as the budget deficit.

The budget deficit has some problems, perhaps chief among them a) growth in the aforementioned debt and its attendant problems and b) a weakening of American fiscal strength (and/or perception).

However, to me, those problems aren't as important as unemployment and having a strong economy.

Unemployment and a weak economy have some problems, perhaps chief among them a) an inability to grow revenues, leading in part to deficits and the aforementioned problems, b) a need to sustain and/or grow programs that provide support for those affected by the weak economy and unemployment and c) an increasing inflexibility in the ability to manage the budget due to the aforementioned challenges.

So yes, I'd like to see the debt brought down, the deficit reduced, unemployment drop, and the economy strengthened, in roughly reverse order.

Is this another puzzle?

Just a couple of charts here to try and clarify what seems to be apples and oranges in the discussion:

Total Debt:

Government Debt Chart: United States 1900-2018 - Federal State Local Data

This is the primary concern. It's what we owe.

The annual deficit:

Government Spending Chart: United States 1900-2018 - Federal State Local Data

This the rate of change in the above chart. The administration claims the far right portion of this chart is accurate. Others question this.

The dollar in 2008 has the same value as $1.085 today. Yet the total debt has risen about 70% since.

"You know, based on personal experience and just my general speculation, I think X, Y and Z."

"Well, that's interesting, but it seem X is disproven by LINK, Y is disproven by CHART and Z is disproven by TABLE. But do you have something else which backs up what you're saying?"

"OMG STOP ATTACKING ME!!!"

Is there any indication in those charts what debt is 'real' in terms of being a debt to an outside force (as a lot of government debt is frequently borrowed from another aspect of the government itself in a lot of cases) and also any indication of how this balances against assets owned in debts to other governments.

I thought this was interesting btw:

If I remember correctly, the 2008 budget deficit was projected to be around $200m at the beginning of the year. It ended up being about $450m. At the time, the Iraq and Afghanistan war costs were not included in the deficit numbers under Bush (they were "special appropriations") whereas they were with Obama. So add in another $150m to that number.

Also, the Federal Government fiscal year starts in October. Between October 2008 and January 2009 Bush approved TARP and part of the GM bailout, which cost over another $100B. So when Obama took office in January 2009, the 2009 Federal fiscal year was already 1/3rd over. Given the 2008 budget deficit + war spending + TARP costs + declining revenues, the 2009 budget deficit was easily going to hit $1T without any stimulus spending under any President - Obama, McCain, Ron Paul or Jesus Christ.

Those intra-governmental holdings (more than half consists of borrowing against social security tax revenue) amount to 25-30% of the debt. Since we don't pay interest on that debt, it's not as bad. However, it represents an obligation that we could find troubling if we were counting on it being paid out.

I believe (and I could be wrong) that Obama hasn't done anything unusual here - it's been a practice for the last several presidents. The run-up in the debt is almost all to public debt-holders. So the percentage was a lot higher.

I thought we've argued for reducing military spending? I'm all for spending on roads, but the spending tends to go towards pork, special interest spending, and expanding entitlement programs. Food stamps are okay, but should they be a time-limited program? Isn't putting more money back in the hands of individuals a better way to get private sector job growth?


But you can't spend yourself silly doing it. You either pay for it now, or pay more later.


We did it with low-paying and or part-time jobs. Not exactly a great recovery...and we aren't accounting those who have gone on disability, retired, and or drop of the workforce/job market all together. The real problem with the job recovery is man is being replaced with technology, and more can done with less. What happens when the ratio of number of people in this country (or world) grows, yet the private sector jobs needed decreases continues to widen?

Facts.

Didn't this start with the cotton gin? You can't stop progress, nor do you want to, as it makes the economy more efficient. The only thing you can do is invest in education (and hope that investment is efficient as well), and make the next class of new products that continually push efficiency forward.

People have been screaming that inflation is right around the corner for years. I'll stick with the data.

Yes, labor participation has dropped, but there's not an economist alive that would say the stimulus caused that.

We could create tons of low skilled jobs (just the type we need) if we had the will to do it. Schools need repaired as do roads and bridges. Lead abatement would be the best education/anti-crime policy we could implement. Painting the roofs white in cities would reduce energy consumption. I bet I could come up with a dozen more ideas pretty quickly.

Lots of people need jobs and lots of stuff needs doing, but we're more concerned about the debt than alleviating suffering.

In other news...

Sen. Lamar Alexander's Chief of Staff was just arrested fro child porn.

A need for these jobs plus a need to repair our crumbling infrastructure seems like a stimulus match made in heaven, to be honest.

We could start by employing those (capable) on unemployment/welfare. We don't even need a stimulus for that, they are already getting paid a stipend.

The trick with this is to get rid of the corruption. One of the stimulus bills tried to do this, and it led to very little actual job creation. I agree it is something that should certainly be worked on, and is much better to me than straight-up welfare. We just need to make sure the money ends up creating jobs, not lining the pockets of construction owners and municipal leaders.

I honestly thought that's what the first stimulus was going to be mostly, but it turned out to be such a small part of it as to be almost negligible. I guess I am just naive.

I never thought I'd see the day when you'd agree with the concept of a "works program" (because that's essentially what I'm describing).

I'm going to go fall over now.

Yep, it's a significant issue. I'd honestly like to see a bill passed that required a full account of money spent, and on what, and have that information be posted publically, when these kind of appropriations are made.

It's a cause & effect, really. If we are saying that the rich (and really, the middle class) have additional obligation to the state to give back, then we should say that of all Americans. But let's fairly quantify and articulate those obligations. I'd rather our taxes subsidize new (safer) roads and bridges, cleaner cities, growing plants and trees, and cut grass than uncontrolled taxes subsidize a lifetime supply of McDonalds, cigarettes and beer in our current welfare state. Obviously, if people choose those things after they put in few hours of work, I'm less likely to be offended by where our tax dollars go.

You're bottom point is how the standard of living rises. It's no different than at any other point in history. I'd also point out the unemployment rate for tech jobs in cities like SF has been around 2% before and through the recession. So the jobs are there, but people need to retrain. Just as they had to when industry moved overseas. I don't see anyone pining to slave away in a steel mill.

Yet people are still in college getting types of degrees that are effectively worthless then bitching because they can't get a job.

The story of the "interpreter" at Mandela's funeral is incredible. It really sounds like it could have been a tragedy.

For the overwhelming number of jobs that don't need certification I don't think the type of degree matters much. As long as you gain transferable skills you'll be fine. Look at the degrees of corporate CEOs, they cover a wide range of disciplines.

I see South Carolina is going down the nullification route on Obamacare.

Silly rebs, never learn their lesson.

Most of the stimulus bill was tax cuts. Not really what the economy needed at the time.

The problem is that most Americans don't want to do them. We've gone decades now teaching kids that manual labor is beneath them and not a respectable job. I think if you posted a sign in each city saying "We're hiring 250,000 people to do construction", you'd sadly find that a lot of unemployed folks wouldn't bother.

There are a lot of skilled jobs involved in infrastructure development too that we just don't have. Plumbers, electricians, engineers, people who can handle heavy machinery. These are jobs we scared people away from over the last few decades and now have a shortage.

I'm all for infrastructure projects, but a bunch of Sociology majors without jobs aren't going to rush to fill them, and if they do they'll be woefully unqualified for the work.

I'd argue that things are very different than at other points of history because there is basically no where for jobs to head eventually as technology evolves and removes them.

Initially jobs were subsistence/agriculture based in the main
Then moved towards manufacturing
Then moved towards retail and suchlike

Retail is now being replaced at an increasing pace by online stores meaning delivery will be one of the last bastions - however automated cars and 'drone delivery' is already on the radar to replace those.

If you combine that with an increasing simplicity with regards to many formerly complicated tech jobs and all that remains are niche positions which haven't been automated yet (programmers, plumbers, electricians, etc.) and jobs which require specific human interaction or intuition (psychiatrist, teacher etc.).

It'll be a while yet before this reaches 'crisis point' - however it'd be nice if we anticipate it and stop looking down on people if they are not employed long before it reaches that crisis.

According to the latest stats, the unemployment rate for college grads is 3.4%. The high unemployment rate is driven by less educated workers.

http://www.bls.gov/news.release/empsit.t04.htm

Under 25 it is just under 9%. Underemployment was at like 19% in that demographic too.

But college grads are largely fine in this economy. It takes a while to find a job, but almost all of them work, even if it is outside their chosen field. The problem is people without a college degree.

When you say 'outside their chosen field' do you mean a professional job - or is it that the less educated are struggling to find employment because the people with degrees are now taking their positions in order to find any employment at all?

I'd guess it's some of both. So many jobs that don't really need higher education now use a degree as a sort of entrance exam as it proves the applicant is at least responsible enough to finish college.

I think eventually we're going to have problems with a more automated economy, but I don't think that's the problem right now. We could put lots of people to work, but we choose not to.

But doesn't technology tend to solve this problem as well as cause it? For instance, as farming was dying, modern manufacturing was born so those jobs were created that didn't exist before. As manufacturing got more automated, more items were created and thus retail went from a general store with a few items to a retail empire that needed to be staffed. As that started going away, we had a use for all sorts of white collar service industries: there were no computer programmers, project managers, or public relations workers before there were computers, business projects, or large scale public relations.

It's certainly no perfect system and I'm certainly not an unfettered invisible hand advocate (and this reasoning has some flaws much like the "well, don't worry about pollution as we'll technology our way out of it!"). But at some point, an industry or group of industries says "hey, there's a lot of cheap labor out there, let's soak it up". The next major set of jobs out there is something we haven't even thought of yet. Either that or we head towards a more automated society where working 60 hours a week isn't required for a person to maintain a standard living.

SI

Hopefully Boehner and Ryan will bring the core GOP back into line. Not sure if Boehner can survive if this escalates but good to see him trying.

Don't expect Boehner to totally change his tune - CNN.com

First his ex-girlfriend, now his uncle. Too bad there is not someone in the NK military willing to knock him off. When NK finally joins the real world it'll be fascinating to hear all the stories.

Kerry weighs in on North Korea execution, Bob Levinson in Iran – CNN Political Ticker - CNN.com Blogs

Well, we'll start by going after our veteran's pensions. I mean really...what have you done for us lately Gulf War, Iraq War, and Afghan War vets?

These go into effect December 2015.

Military pensions "screwed" in budget deal - Dec. 18, 2013

Bipartisan agreement that this is fucking ridiculously shitty.

I'm sure we have different ideas about where the money should come from so that this didn't have to happen, but I think we can all agree this is shitty.

Then again - I'd say the same about any pensions that were previously agreed upon - not sure if you would say the same or not.

Am I the only person who thinks a 38 year old doesn't need to be drawing a pension?

Well yeah - they retire from the military and then are still young enough to start working in the private sector (some on the civilian side of the government or as gov't contractors...where they can get another pension if they stay long enough :) ). Very few people can get by after having only worked for 20 years. I've been working "real" jobs for almost 19, and I feel like I'm barely started.

And most of them have continue to work somewhere after 20 years unless they're able to get by on 50% of their former salary.

But if you wanted to retire younger and have some kind of pension, maybe you should have tried to be in the military, or tried to be a police officer, or a firefighter. This isn't like a new thing they made up yesterday. Different jobs have different salaries and benefits.

Fair point - I wouldn't trade where I am just for a military/police/fire pension. 20 years seems like a short window for a career however -- it's a length that may have been in line with other pension plans and retirement ages as they existed years ago before being bumped either to higher ages or eliminated altogether but might be reevaluated now.

I think there might also be an argument for differentiating between pensions for the enlisted vs officers. If you were enlisted for 20 years, I'd imagine you would not be in the same position for continued employment as an officer, who I assume would have picked up skills with higher earning potentials.

Does the "Well you should've been one too" apply to all over-paid public servants?

Nobody wants the government to cut spending on themselves, they want government spending on others cut.

That's very true

I think the same goes for raising taxes too.

It's not necessarily a window for a career, it's just now long you have to serve in the military before you get some pension benefit. Some start earlier, some start later, many have other careers (especially if they only put 20 years in).

There's certain kinds of jobs where it's not necessarily advantageous to the employer (or taxpayer), to have lots of old people around on active duty pulling full salaries. At the same time, they're pretty important jobs, and it'd be harder to obtain more qualified applicants if people were just cut loose entirely in mid-life and forced to fend for themselves in a private sector for the first time as an older person. It's a fair debate what salaries and pension benefits are appropriate for these different kinds of jobs to a point, but I'm not sure they they deserve the hostility and microscopic scrutiny some like to shell out for any government employee. Pension changes should be phased in at least so they're not done to the detriment of people who have planned their careers and lives around them. Especially when it's the federal government and they're not facing bankruptcy any time soon. Personnel salaries really aren't what's breaking the bank of public budgets.

If you're complaining about the concepts of partial pensions benefits generally after less than 35-year career or whatever, then probably yes. Those make sense and I don't think anyone's arguing that they should go away entirely. It's like complaining that teachers don't work in the summers, or that construction workers get to work outside.

They should just keep doing what they are doing?

That's two years away. Given the constituency in question, I'd be pretty surprised if it isn't somehow "fixed" by then, to be honest.


I'm going to assume you're excepting those who were injured in the course of their service, right? Especially those injured to the point where obtaining and keeping a well-paying job would be challenging, right?

They get disability.

They get compensated for their losses which is an even-sum game...at best, so yes, they get disability.

I think the problem here is that for the most part, the general public only see's "The Hero's" portion of the military. The reality is that the military is a lot like Logan's Run. It's a young man's game and once you hit 40...you are done. So an Army infantry or tanker or artilleryman gets out at 40...and assuming good health...he or she is going to do what exactly? Get a job as an expert tankman? Probably not. Join a construction crew as a rookie? Probably not. So how do you entice somebody to join an all-volunteer military if you are really only planning on shafting them if they serve 20 years? The answer to that question was a pension. It's not a lot actually, it's not "retirement" from working, it's retirement from the military. It's just compensation for somebody who served the government for a long time and made themselves available to do the job that you won't be conscripted to do.

Don't get me wrong, there are a lot of post-military careers and a lot of success stories, but there are no guarantees, lots of folks get shafted hard when leaving, so if you want to avoid military service, which America typically does (and the reason we have an all-volunteer force vs. the draft), then give these folks a fair shot when leaving the military...and a modest pension.

That's why I would consider differing policies for the rank-and-file and officers (if there isn't one already - I admittedly don't know much about how these are structured). One seems like more of a use and discard scenario, where the other one can prep you with valuable skills (my B-I-L is a retired Lt. Col who has a good deal of IT experience; between that and contacts he made while in, he had a lot of options post-Marines).

There's always the GI Bill when you get out of the service and Tuition Assistance (at least for Air Force) while you're in. I think 20+ years is plenty of time for career planning.

On another note I don't see why a person who has been in the military for 20 years and never deployed should get an immediate pension while another person who serves 4 years and spends half of it in a combat zone gets absolutely zilch as far as retirement goes.

Is your desire to send 40- and 50-something people off to college with a handshake wishing them the best in job market for the first time with no backup or supplemental income based on a desire to save money or a dislike for those in the military generally?

Edit: On the latter point, do you feel the same way about, say, Forest Service Smoke Jumpers? That's another job that tends to be pretty tough to do too far into your 40s. As a result, they get some compensation beyond that for their service, though, like with 20-30 year military careers, not necessarily enough to retire on. Should they instead be entirely cut off as soon as they're not useful anymore?