The "breaking/tipping point" of federal expenditures in the economy | TigerDroppings.com

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SlowFlowPro
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The "breaking/tipping point" of federal expenditures in the economy



so i was thinking this weekend about the negative effect austerity has on economies. in my view, this is a short term pain that will lead to a more prosperous future, but that immediate pain makes it difficult to stomach

the issue is the vast amount of federal dollars flowing in an economy (or being forced into sections of the economy via government intervention, if you will). once they exist, they create direct and indirect impacts

this applies to all spending, from entitlement spending that funds many hospitals to defense spending that supports many towns here or there. this applies to government agencies, contractors, vendors down the line, etc.

my question is if there is a term or a study that goes over the breaking/tipping points of the involvement of a federal government. there has to be a measure that we can look to in order to determine that our feds have "gone too far"







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Darth_Vader
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re: The "breaking/tipping point" of federal expenditures in the economy


Look at Europe. Really look at Spain & Greece. Better yet, dust off a history book or two and look at Germany in the early 1920's. You're looking at the US in under a decade unless we do a whole lot of changing in our spending habits.





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constant cough
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re: The "breaking/tipping point" of federal expenditures in the economy


But the Dow is doing ok so it's all good, right?





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Roaad
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

they create direct and indirect impacts
namely, the political impact of removing those dollars, even after their usefulness has passed.






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SlowFlowPro
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

Look at Europe. Really look at Spain & Greece.

they're obviously passed the tipping point, but so is the US






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Powerman
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

But the Dow is doing ok so it's all good, right?


What is your stance on cutting the military budget?






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Roaad
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

but so is the US

It's just "how far". . .and "can we step back"?






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SlowFlowPro
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

.and "can we step back"?

YES WE CAN!

but we won't. it will hurt too much in the short term. that's why people are proclaiming "austerity is failing" in europe when it's just beginning. of course you're going to have economic downturns when you're sucking that money out of the economy.






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Powerman
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re: The "breaking/tipping point" of federal expenditures in the economy


When we start spending 35% of our budget on welfare





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Turbeauxdog
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re: The "breaking/tipping point" of federal expenditures in the economy


Keep stagnant In nominal dollars for the next 10 years or so and let inflation reduce it as a percentage of our GDP.

You cut it without saying you have to cut it.






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GumboPot
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

my question is if there is a term or a study that goes over the breaking/tipping points of the involvement of a federal government. there has to be a measure that we can look to in order to determine that our feds have "gone too far"


The tipping point is when we have to sell so much debt (borrow) we run out of buyers or we have to decrease the price of the debt (thus increasing yields) to attract buyers causing interest on the debt to rise. We are past that tipping point with the easing programs implemented by the Federal Reserve. They need to step in and buy federal debt to keep bond prices high and borrowing cost low for the federal government to continue its operations. When Fed easing is required, it's simply an admonition that we have run out of money, we are bankrupt, can you please print some more money so we can continue the ponzi.






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N.O. via West-Cal
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re: The "breaking/tipping point" of federal expenditures in the economy


I suspect that you never know whether you have gone too far until it's too late. I agree with the notion that the pain of austerity prevents measures to address the problem. I suspect teh most plausible approaches are things like hiring freezes and phase-outs which slow the growth of spending but are not quite as painful. If you could couple with that with some real growth, which would raise revenues, I think you could start to see some improvement.





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GumboPot
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

What is your stance on cutting the military budget?


This is one of the parts that I like about the sequester coming in January.






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tigeraddict
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

Keep stagnant In nominal dollars for the next 10 years or so and let inflation reduce it as a percentage of our GDP.

You cut it without saying you have to cut it.


people would still freak out on this as well... "I didn't get my cost of living increase...."






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Roaad
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

When we start spending 35% of our budget on welfare
It really depends on what we now consider "welfare"






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Darth_Vader
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re: The "breaking/tipping point" of federal expenditures in the economy


Sad part about that last graph put up by Roaad is there should only be about 5, maybe 6 slices to that pie from what our Founding Fathers intended.

1. Department of Defense
2. Department of State
3. Department of Justice
4. Department of Treasury
5. Department of Interior
6. Corps. of Engineers

The reason we're so far into debt is all the other slices that have been added to the pie.






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ProjectP2294
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re: The "breaking/tipping point" of federal expenditures in the economy


I see where we can save 4.63% right away and not miss a beat.

I'm sure there are more, but that one jumped out to me first.






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theunknownknight
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re: The "breaking/tipping point" of federal expenditures in the economy


quote:

my question is if there is a term or a study that goes over the breaking/tipping points of the involvement of a federal government. there has to be a measure that we can look to in order to determine that our feds have "gone too far"


Paul Ryan always cites one, gotta look it up. He stated the study he saw gives the USA 3 more years at its current pace before we hit "the point of no return"



This post was edited on 9/26 at 4:21 pm


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Tiger n Miami AU83
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re: The "breaking/tipping point" of federal expenditures in the economy


Good for you for thinking about austerity.

I will say it can be extremely difficult to implement and have very bad unintended and unforeseen consequences as well. If some of the european countries implement the crushing taxes, be ready for the wealthy and mobile to leave the given countries rather than take it in the ass.






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SlowFlowPro
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re: The "breaking/tipping point" of federal expenditures in the economy


my version of "austerity" is just cutting

cutting taxes is what we need to do..NOT raise them






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