The Deficit Reduction Act of 2010

[deficitjobs]

http://www.deficitreductionandjobcreationact.com/

It's a fictional bill - but what do you think? Would it work?

[truedelphi]

1. I like it greatly but I would smack an extra

50 to 75% off the defense/offense budget, and put that money into the "50 billion" that is labeled as going directly to the states.

The states need at least 100 billion bucks to make ends meet.

It is truly sad to see that schoolteachers, fire fighters, police people, project mgrs, social workers etc getting pink slipped.

[Name removed]

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[deficitjobs]

4. Because the current defense budget does that now

Want to know why there are defense jobs in 50 states, paid for by the $719 billion? So that any attempts to cut the defense budget are met by "wah, you're taking our jobs" from all quarters. So the giveback directly to the states is designed to neutralize this.

[truedelphi]

7. Ah we have had this discussion many many times on DU

Just in case you missed it -

Let's take my state, California as an example.

The state of California receives BACK from the federal government exactly 73 cents per every dollar it offers the Federal Government through taxes. Not a very equitable situation.

Now consider the population index of this state.

Californians are currently among the least friendly of the states regarding the "current open" border immigration situation. Sixty percent of us would like to see some type of tough immigration stance - or at least to enforce the current open border situation. (We take in not only huge numbers of people from south of the border, but huge numbers from the Pacific Rim countries.)

One of the reasons for the agreement of subsidies for newly arrived peoples, is that for every newly arrived immigrants we receive here, we are supposed to receive so many hundreds of dollars to offset costs: that is, hospital costs, education costs, cost of imprisoning the drug dealers, AND THAT MONEY IS NEVER GIVEN!

Yet five out of every ten babies born in this state are born to newly arrived immigrants.

We have gone from 23 million people in the early 1980's to over thirty seven million currently.

It is as though the population of the state of Virginia came here twice!

How can anyone keep a deficit from occurring when the agreements are not kept?

Although it is true that the major money makers are using the Prop Thirteen situation to keep their expensive real estate from being taxed properly, those monies are made up by the huge tax that we pay any time we buy anything except prescription meds or food. (Most locales have a tax rate of over 8%$ of purchase price.)

So basically if the Federal government would see to it that the billions of dollars that was supposed to, by legal agreement, come to offset all the people this state has taken in, plus if the rate of return of 73 cents per dollar were upped to 85 cents, this state would not be in a deficit situation.

And Prop Thirteen needs to be re-written, so that corporations are excluded from the benefits.

[westerebus]

3. Welcome to DU.

Nice thought. You might start looking at the numbers.

There is not enough money in the defense budget to cover the states' debt, the federal debt, the FED holdings of toxic waste, and so forth and on and on. You can cut the defense budget, the country is so mired in debt, you could eliminate the entire defense budget, and the debt would still be there.

Adding jobs will not eliminate the debt either. A trillion dollar jobs program would not eliminate the debt. Even leveraged.

If we went to 5% unemployment tomorrow and raised taxes on the rich to 90%, you still would not eliminate the debt.

As a nation, our government runs on the promise to pay plan. It runs on deficit spending. There are times when the government will take part of the debt and place it off the books. Or use procedures to make a debt look like something other than what it is. It is why they keep the FED. It is why Congress makes laws to benefit some much more than others. It is about power.

Those who control the debt, control the power.

We do need jobs. The problem is deflation. Jobs are not created in a deflationary environment in the private sector, that's the lesson of the First Great Depression.

So until some thing changes, this government will stay the course. The economy will continue to crawl along and the debt will grow. Up until the the time the government defaults. And we've done that before too.

Capitalism is bankrupt. What we will end up with is still in question.

Which is why I'm optimistic.

[econoclast]

5. Capitalism bankrupt?

Hmmm. US businesses have 2.5 trillion in cash. And while they have lots of debt too, the cash cache is about 23% of total business debt.

Government have a coupl'a trillion cash hoard I'm unaware of?

Somebody is bankrupt. Sure as hell. But I don't think it's capitalism.

[westerebus]

6. Which if true proves the point.

Businesses don't hold cash if the economy is growing. They invest it. Pay dividends or buy back shares. They expand operations and upgrade. They cut debt to make their fundamentals look better to other investors.

They add to their payrolls. They create jobs.

Conversely, when the economy is contracting, they layoff people, cut overhead, delay upgrading, reduce operations, and hold cash.

Looking forward at a contracting economy and deflation, it is reasonable to hold cash to met the flow of money needed to stay in business. The more that's held in cash, the higher the expectation that the economy will not recover any time soon.

Did the government not bail out the banks and wall street? And it hasn't stopped btw.

Did the government not change the rules on how banks mark to market? Sham a regulation bill also.

GM ring a bell? AIG? QE 1.0 now QE 1.8.

Why has the FED increased its reserves (debt) to cover the market's?

Capitalism is bankrupt. That's a possible reason.

The Mother ship is going to return in 2012, I can go for that too.

[Crazy Dave]

9. I have always wondered what the real debt number is

We all know the official unemployment number is a bunch of bullshit and that's it's double or more. I'm sure they are fudging the national debt numbers too and it's probably twice as high.

[westerebus]

10. They all use the same accounting firm.

DEWY CHETHAM & HOWE.

[jtuck004]

8. I read it. Way too small...

I think it heads toward a good idea, but

We are very likely to have near double-digit unemployment for at least the next 10 years, and with 20 million people unemployed or underemployed today, (likely to grow over the next year), the program would have to be hundreds of billions a year to be effective, and it would have to do something to head off all those dollars simply heading to China after they are spent (on mostly Chinese products). We set $15 trillion aside to pay to banks and foreign investors - in all fairness the American worker should be worth as much.

I suspect the initial program would have to near a trillion the first year, perhaps for two or three, and then tail down to a few hundred billion a year after that to reduce unemployment significantly.

The high speed rail portion is good, but much more would need to be allocated to build anything significant. Also need some money for moving us off our dependance on oil (China is spending a couple hundred billion a year to do this, and if we don't they will own us in a decade) as well as some medical improvements that lower costs in that area - which may be social as well as technological.

The current news says business is sitting on about $1.5 trillion today. Giving them more would be a waste, since they won't hire unless there is demand. So a huge national program to work on infrastructure, alternative energy, hi-speed rail, and education\training would distribute the money, create demand, and cause jobs to be created by business.

Good idea to work on, however...thank you.