Explain American politics to me please

I am not American so only have opinions from what I read online and in the international news. To tell you the truth I’m really not that interested but one of my friends just posted this on Facebook:

A family spends $38,200 per year. Their yearly income is $21,700. They add $16,500 in credit card debt every year to pay their bills. After a family debate, keeping in mind that it was not going to be possible to borrow $16,500 every year forever, the parents and kids agreed that a $380/year premium cable subscription could be terminated. So now the family will have to borrow only $16,120 per year.

He is a staunch Republican probably tea-partier (what are they really?) who insists he is a ‘doer’ and that ‘doers’ shouldn’t pay for ‘takers’ unless they want to.

How true is this statement about the ‘family’ he is talking about?

Please would someone try to explain in layman’s terms what is really going on in politics in the US. I’m not trying to incite anything and would post this in general questions because I’m looking for answers not debate but I know it could get into debate territory so posting it here.

How true is what statement about the family? I’m confused.

I think the analogy is the US Government is the family; the credit card debt is the deficit. The $380 cable bill is the recent $38 billion cuts. Or something.

A family spends $38,200 per year. Their yearly income is $21,700. They add $16,500 in credit card debt every year to pay their bills. After a family debate, keeping in mind that it was not going to be possible to borrow $16,500 every year forever, the parents and kids agreed that a $380/year premium cable subscription could be terminated. So now the family will have to borrow only $16,120 per year.

Oh ok now that makes a little more sense. That’s what he was talking about.

Oh. Duh.

My brain is small.

His is the classic “screw-you-I -got-mine” approach to resource allocation that never has and never will work. Move on from that debate–you will never gain from it.

We have a huge deficit both at the federal level and the individual level, becasue we have been conditioned to believe that we need everything right now and do not need to wait for anything as silly as “money” to pay for it. We have maxed out the credit cards, lenders don’t want to lend more, and now have to pay for all of these things. Economists use a bunch of $100 words and cool charts to say essentially the same thing.

The analogy breaks down in a couple of ways. First, a lot of the family’s outgo goes to hiring security guards for the neighborhood, which the neighbors can’t afford to do. More of it goes to pay gramma’s hospital bills, and college tuition for junior, which he says he will pay back with interest. The parents just took a big cut in pay, and don’t want granny to die or junior to have to drop out, so they add a bit to debt.

Meanwhile Uncle Jack, who lives with them and makes a ton of money, doesn’t want to contribute any more, even for neighborhood security, and in fact wants them to cut his room rent.

Analogies are fun, aren’t they?

Analogies from household budgets to gov’t finances are usually misleading. Unless your in a household that can print its own money or raise revenue by taxing people.

And the “cable bill” thing is meant to make the cuts seem like they’re on frivolous things. Obviously at least some people feel that the money being cut aren’t frivolous but are in fact being spent on important things.

Federal interest levels are very low, at a few points in the last few years they’ve actually been negative. We are a long way from “maxing out the credit cards” on the federal level. Lenders remain eager to lend to the Federal gov’t.

No, 38B in cuts is nothing. Oviously the cable bill refers to the ten-times bigger 380M expense for NPR. Opinion polls confirm that eliminating 4 white elephants the size of NPR or DeptEducation will save as much as is spent on the Pentagon.

I think my paragraph here is as good an elucidation of American politics as you’re going to get.

Yes and no. There were… interruptions, at least, which caused some deep pain to the Treasury. We seem to be past that for the moment, which is good. However, the worldwide economic situation is uncertain, which is bad. Then again, foreign instability favors us, which is good again.

Worse yet, you can talk to about fifty real economists who can give you all kinds of numbers, none of which have much more meaning than what I just wrote. :smack:

But here’s the problem. If our debt was lower I would be much more lax about peple trying a Keynesian tactic to borrow, even if I didn’t think it likely to do any good. But Keynesian responses have not been very effective historically, hence my deep opposition to the useless stimulus, whose proponents’ own overly-generous measurements say it failed. Yes, we can borrow cheap now. But we’ve got apunishing level of debt already, and we’re not particularly using that money for anything of great long-term value that I can see. Worse yet, what happens a few years down the line when (hopefully) interests rates rise?

You also have to consider the outcome, however. Does NPR really do particular amounts of good which the private sector can’t match? I say no. I don’t care that it exists, but why does it need public backing? Frankly, it pretty narrowly serves a certain arket, same as any other radio station. I even like some of its programs, though I don’t listen to much radio. It is not much of a public good, however.

As for Education… well,

However, when you start comparing programs, consider the outcomes. Education dept failed, period. No matter what we spend through it, education outcomes are not affected. For decades upon decades, we’ve been trying program after expensive program.

It doesn’t work. If anything, it’s harmful. Yet we still keep ponying up the money. This is why I favor a minimal national test (or reasonably equivalent state/local tests), some general grants, and sending the fine folks at the Ed off to other purposes. I believe they believe and work hard. But they are not successful.

On the other hand, the Pentagon is damn good at what it’s put to - which include the political objectives of the nation as expressed through the person of Republican presidents, Democrat presidents, and Congressmen. It works, and while I could tell you a tale or fifty about how I’d reform it (don’t get me started on military appropriations and procurement, systems which seem designed for bad outcomes), it’s not relevant. We need it in the long, and probably the short. Every time the nation has gotten rid of its military, it has come back to bite us with heavy casualties down the line. On the other hand, reasonably aggressive use of a highly skilled and well-armed pro military has reduced worldwide conflict to a manageable level and promotes worthwhile American interests.

So a 38B dollar cut is a start. It is, as of yet, more symbolic than actual. But the fact that people are mnow talking about how big the cuts are is a good start.

If my family budget was that out of balance, I’d be looking really hard for ways to increase my income. A cuts-only budget would mean eating cat food and living in a tent.

As Voyager said, we should ask Uncle Jack, who sleeps in the best bedroom, drives the most expensive car, and always eats food from the best restaurants, to contribute a bit more from his multi-million dollar trust fund. It doesn’t seem fair that he contributes the same as the other adults, who are on minimum-wage jobs.

If this family is supposed to represent the whole United States then they are the wealthiest family in the neighborhood, they own more assets than almost anyone and people are constantly knocking at their door begging to loan them money (like banks did a few years ago.) In addition, that family will have seen it’s income go up so much every year, on average, that it wouldn’t be unreasonable to assume they could pay off their bills sometime in the future.

Back in the Reagan days your friend, the “doer”, would have thought this family was a bunch of geniuses for their clever use of deficit spending.

Yeah, but Uncle Jack’s capital was what allowed the family to buy the house in the first place (how else could they have gotten the loan, considering their spending habits and probable credit scores?? :p), and they all work for Uncle Jack, since he’s the rich one with the business.

Mean while, back in fictional analogy land, while it’s true that the family is running a deficit, some people from another neighborhood keep buying the families debt because, despite the fact that the family seems poor and to be outspending their income, for some odd reason they are the best most stable investment for other neighborhoods to put their money in.

Etc etc.

-XT

It’s a great analogy because Americans never go into debt to buy a house, always pay cash for cars, and they pay off the principal on their credit cards every month.

More to the point, it does not matter that ye of the Left think that taxing rich people more is fair. It isn’t going to fix the giant problem. Even the “Rich” simply do not have enough money. You can stick your fingers in your ears and rpeach class conflict and wealth redistribution till your eyes bleed, but but it not physically possible, and so it isn’t going to happen.

How you deal with that fact is your own problem. In you example, Giles, the family is already leaning heavily on Uncle Jack. And while he may have a lot, he dooes not, and cannot, buy them out of debt. At best, he could maybe stop the burning for a year if he blew all his assets, but that would be it, period.

Shiftless: that’s the difference between short-term and long-term debt. Reagan ran large deficits, but they worked and fixed a short-term problem. I haven no problem with that, nor with the WW2-era deficits. Nor with several other Democrats I could name. The issue is that since the 60’s (and that ass Lyndon Johnson specifically :rolleyes: ) huge social expenditures became endemic and debt became structural. We nto have the ludicrous situation where anything liberals like si called “nondiscretionary” in an attempt to make sure the ever-flowing money tap does not go away. Heck the one area (Defense) conservatives believe is vital for the long-term national interest is only 20%, and that’s about it. But something like 60% of the budget goes to so-called “investments” like Social Security and medicare.

Of course, generations of liberals thus far haven’t actually gotten any of their actual goals. No lost-cost care (in fact, Medicare is a nightmare and doctors are increasingly jsut saying, “No” because it’s such crap. And reform completely misfires. Social Security has become a massive demi-fraud, while any reform is resisted to the death. Yet the money must come frm somewhere and it soging to only increase over time. Health and Education are giant wastes.

And at the end of the day, the problems have not gone away. They have not been fixed, and if anything, things got worse and worse the more the liberal prescruiptions were applied. Thre is a reasonable argument over exactly how much military we need. (If you are so inclined, and I note that liberals don’t have this conversaiton. They simply want to cut it to make room for more social spending, never considering what they’re cutting or what they might need to do with the military down the line.) But there is no reasonable arguement that social spending has done much good. The plain factual numbers proclaim otherwise.

It’s a shitty analogue because most Americans don’t have others buying their debt from them because they are such great investments for capital and security. Trying to force an analogy between a household and a nation state is pretty freaking silly, since it breaks down just about everywhere.

-XT

Smiling Bandit If you want to solve the problem first you have to understand it. Social Security is funded by a dedicated tax. It does not contribute to the deficit. If it went away tomorrow there would be no effect on the deficit at all. With that off the table, Defense is clearly the biggest expenditure. But the low hanging fruit is the interest being paid in the debt, and we are paying that because of the Bush tax cuts.

Let’s say we did cut Medicare. People still need to pay for healthcare, and private insurance rates and overhead are higher. The United States spends 30% more than any other country for healthcare and we still do not cover everybody. The quality of care in other industrialized countries, as measured by outcome, is superior to the that of the US. Having single-payer UHC would take a huge competitive disadvantage off our our manufacturing sector as well as small businesses and entrepreneurs. That isn’t even a squishy, feel good, liberal argument; it’s pragmatic. Ask BMW or Sony if they’d like to have a US-style healthcare system.

Want to compare our current situation to the past? Go ahead. Marginal tax rates are much lower now than they were in the past.

Our current mess isn’t even that bad yet, and can be addressed relatively easily: raise marginal rates on the wealthy, make people with capital gains pay the same rate as those earning a wage, pay off the debt so we get rid of the interest payments, implement single-payer UHC, and trim a few weapons systems from the Pentagon.

Hell. maybe we should even get rid of corporate taxes all together in return for slightly higher marginal rates. At some point that money gets paid out in salary, stock, or dividends anyway.

Well that’s my frigging point. It’s a lame analogy.