Hmm, there are a few ways we can deal with this, and i don't like any of them.....
We can print a bunch of money causing hyper-inflation in the us.
We can pass a law letting us go above the lending cap, mabye doubling tripiling or even lifting it completely.
We can not pay them at all.
there are probably a few more, but those are just off the top of my head.
If we Hyper-inflate we will have to make a north american currency with canada, and we will bring like 1 north ameriacn currency for every 10-20 us dollar, and that would deal with the Hyper inflation, but we would no longer be the world currency and we would be less powerful.
China and all the other countrys with money from us will then realize that money is really worth nothing anymore, they can't even compensate it anymore, and they will hate us.
If the US says no, it will be hated by china...
If we lift the cap, they won't hate the US but it will plunge further into debt.
One time, this isnt going to happen and everyone is going to be standing around looking at each other wondering the the hell just happened. I really hope I live to see it.
It should be noted that while the failure to raise the debt ceiling would cause issues for things not being able to be paid for (would be nice if we could actually spend within our means as a government, like we are taught to do as individuals.) the government still takes in a significant amount of money in revenues from taxes every day. Enough to cover (at last I heard mentioned) Social Security, the Military, the debt payments, and a number of other programs that we NEED to make sure are kept funded. What would be harmed, of course, would be the many other programs the government funds.
The problem we have in our country now is that both sides are being stubborn about what they feel is "best" for the american people. The dem's eithor want a smaller amount of cuts with no tax increases, or will only allow for a larger amount of cuts in spending, but with fairly significant tax increases to go along with it. The rep's are steadfast in that they dont believe that increasing taxes on anyone is a good idea, especially with the recovery not going as well as predicted, and higher taxes would only stifle the issue, and they believe that we need to heavily cut spending to try to bring the country back on track from a fiscal standpoint.
That said though, both sides seem somewhat agreeable to the idea of changes to the tax code to allow for increases in revenue (through changing or removing deductions of various kinds among other things) without actually raising tax rates. The problem of course with such adjustments to the tax code and such, is that such changes tend to take time and a process to go through. Something that, at this point, we simply dont have to work with.
Some have suggested that we should come up with a temporary debt ceiling raise and plan until sometime next year, in order to give time for a larger and long-term plan to be agreed upon, and allow for such adjustments to the tax code to go along with it to help with the revenue side of things.
Obama however, has come out adamantly against a temporary short-term agreement to give such time, even when its clear that while both sides have come close to agreements in the past with both rep's and dem's making adjustments one way or the other to try to come up with such an agreement, they never quite seemed to get close enough, or a nearly agreed upon change was taken off the table at the last minute (at least once obama and the rep's were close to an agreement, only to have obama change the deal, and causing the talks to break down again. One of the problems of course for many in congress and with Obama himself, is that next year is an election year, and the prospects of a temporary plan, or one that doesnt make their constituents happy (as a dem or rep) is part of what is holding up the process.
What continues to boggle my mind, is how often Obama keeps talking about defaulting on the debt if an agreement isnt come to, when in fact it would be primarily up to Obama, in the case of a government shutdown (due to the lack of a raise in the debt ceiling) to choose what to pay and what not to pay with the tax money that is brought in. Given that the data shows that there would be plenty of money to pay for, among other things, the debt payments, I dont see how that could be the case. Would Obama seriously choose not to pay for the debt payments and cause massive damage to our country to prove a point? I sure hope not.
Even then, credit rating agencies that handle the credit ratings for governments around the world, have come out and warned that the US is very near having their credit rating downgraded for the first time in ages, and could even occur before the August 2nd deadline. The american people and the world would love to see both houses of congress and the president all get on the same page and agree to a big long-term deal that takes away any issues of uncertainty, but unfortunately, Im just not sure thats going to happen at the moment.
In the end, anyone thinking that this issue is the fault of just rep's or just dem's or just obama are quite simply wrong.
If it were up to me, I suppose, I would say that coming up with a short-term deal that both sides (and obama) can agree on, to give the time needed to come up with the tax reforms and better specifics of cutting and balancing for a long-term deal that will actually thoroughly deal with the issues we have with spending too much along with finding ways to increase revenue without hampering economic growth by raising taxes.
In the end I suppose we'll see what they manage to come up with.
maybe if we defualt the price of magic cards will crash and I can buy up the power 9.
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but seriously a sudden spike in interest rates and credit fees and whatever else would be terrible not just now but at any time.
stock markets gunna be funky in the days ahead if something doesn't happen for the better.
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Collaborative Pub: Ice Cold Thoughts Always On Tap Twitter- RogueSource.
Decks: "Name one! I probably got it built In one of these boxes."
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[I]Some call it dig through time, when really your digging through CRAP!
Merfolk! showing magic players what a shower is since Lorwyn!
I can't believe Republicans want to protect tax breaks for the top 2%, but they're willing to cut Social Security, Medicare and Medicaid. The wealthy don't need tax breaks, and people actually need these programs. Everybody should pay the same percentage of taxes.
The ONLY way the US can default on it's debt is if Obama tells Geither, who heads the Treasury, to NOT pay on the debt interest - which is, by the way, a violation of the 14th Amendment of the Constitution of the United States of America.
On a monthly basis, the US government brings in an estimated $200B in tax revenue (that's $200,000,000,000). The monthly interest on the debt is, on the top end, $20B (that's $20,000,000,000). That leaves the government with $180B to function on for the month (that's $180,000,000,000). Which more than covers essential government functions (but may not be enough to cover the 10 DIFFERENT Federal programs that produce food safety laws, as an example of the hundreds of billions of dollars in redundant programs our government has) such as seniors benefits, veterans benefits, the military, and the various Departments (Education, Energy, etc., etc.).
And actually Macius, Republicans are making a fuss about this for two reasons.
1) In 2006, Obama voted against raising the debt ceiling for Bush claiming that it was an indication of a failure in leadership that the debt ceiling needed raised. Now he's lying to the American people on a daily basis by threatening default if the debt ceiling isn't raised.
2) Obama and this Administration has a spending problem that needs curbed. Otherwise, by 2020, our debt will be 100%, or higher, of our GDP. We'll be in a worse position economically than Greece.
If you don't believe we have a spending problem, look at this (data taken from http://www.treasurydirect.gov/NP/BPDLogin?application=np ):
National Debt on 1/19/01 (day before Bush assumed office): $5,727,776,738,304.64
National Debt on 1/16/09 (last recorded day before Bush leaves office): $10,628,881,485,510.23
National Debt on 1/20/09 (day Obama assumed office): $10,626,877,048,913.08
National Debt on 7/22/11 (last day data is available for right now): $14,342,873,980,042.91
Under Bush, the national debt grew by $4,901,104,747,205.59 over the course of 2,921 days. That's a rate of spending of $1,677,885,911.40 PER DAY.
Under Obama, the national debt has grown by $3,715,996,931,129.83 over the course of 917 days. That's a rate of spending of $4,052,341,255.32 PER DAY.
Obama is spending government revenue at a rate of 241.51% more than Bush did.
And this wouldn't be the first time we hit the debt ceiling, and we've never defaulted on it before. In fact, one of the times the US hit the debt ceiling it took three weeks AFTER we hit the ceiling to come to an agreement to raise it...and we never defaulted.
Basically, whether or not we default, regardless of whether or not we have raised the debt ceiling, is entirely in Obama's hands. The question, though, is will he violate the Constitution just to make a political point in an effort to ensure his party retakes the House and he wins reelection in 2012 by forcing the government to default and then spinning it to blame the Republicans (and hope, in the process, no one notices that he is the only one who could have caused the default by law).
I was driven from this once-great site by abusive mods and admins, who create rules out of thin air to punish people for breaking them (meaning the rule does not exist under forum rules) and selectively enforce the rules that are written on the forum rules. I am currently lurking while deleting 6 years and 2 months of posting history. I will return when ExpiredRascals, Teia Rabishu and Blinking Spirit are no longer in power.
I can't believe Republicans want to protect tax breaks for the top 2%, but they're willing to cut Social Security, Medicare and Medicaid. The wealthy don't need tax breaks, and people actually need these programs. Everybody should pay the same percentage of taxes.
You do realize that a flat/fair tax would be less progressive than the current system right? In an ideal world everyone would share some of the burden. As long as you can make someone else pay via the vote, that's what people do.
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Out of the blackness and stench of the engulfing swamp emerged a shimmering figure. Only the splattered armor and ichor-stained sword hinted at the unfathomable evil the knight had just laid waste.
The ONLY way the US can default on it's debt is if Obama tells Geither, who heads the Treasury, to NOT pay on the debt interest - which is, by the way, a violation of the 14th Amendment of the Constitution of the United States of America.
On a monthly basis, the US government brings in an estimated $200B in tax revenue (that's $200,000,000,000). The monthly interest on the debt is, on the top end, $20B (that's $20,000,000,000). That leaves the government with $180B to function on for the month (that's $180,000,000,000). Which more than covers essential government functions (but may not be enough to cover the 10 DIFFERENT Federal programs that produce food safety laws, as an example of the hundreds of billions of dollars in redundant programs our government has) such as seniors benefits, veterans benefits, the military, and the various Departments (Education, Energy, etc., etc.).
And actually Macius, Republicans are making a fuss about this for two reasons.
1) In 2006, Obama voted against raising the debt ceiling for Bush claiming that it was an indication of a failure in leadership that the debt ceiling needed raised. Now he's lying to the American people on a daily basis by threatening default if the debt ceiling isn't raised.
2) Obama and this Administration has a spending problem that needs curbed. Otherwise, by 2020, our debt will be 100%, or higher, of our GDP. We'll be in a worse position economically than Greece.
If you don't believe we have a spending problem, look at this (data taken from http://www.treasurydirect.gov/NP/BPDLogin?application=np ):
National Debt on 1/19/01 (day before Bush assumed office): $5,727,776,738,304.64
National Debt on 1/16/09 (last recorded day before Bush leaves office): $10,628,881,485,510.23
National Debt on 1/20/09 (day Obama assumed office): $10,626,877,048,913.08
National Debt on 7/22/11 (last day data is available for right now): $14,342,873,980,042.91
Under Bush, the national debt grew by $4,901,104,747,205.59 over the course of 2,921 days. That's a rate of spending of $1,677,885,911.40 PER DAY.
Under Obama, the national debt has grown by $3,715,996,931,129.83 over the course of 917 days. That's a rate of spending of $4,052,341,255.32 PER DAY.
Obama is spending government revenue at a rate of 241.51% more than Bush did.
And this wouldn't be the first time we hit the debt ceiling, and we've never defaulted on it before. In fact, one of the times the US hit the debt ceiling it took three weeks AFTER we hit the ceiling to come to an agreement to raise it...and we never defaulted.
Basically, whether or not we default, regardless of whether or not we have raised the debt ceiling, is entirely in Obama's hands. The question, though, is will he violate the Constitution just to make a political point in an effort to ensure his party retakes the House and he wins reelection in 2012 by forcing the government to default and then spinning it to blame the Republicans (and hope, in the process, no one notices that he is the only one who could have caused the default by law).
Its really not fair to compare the little bush numbers and Obamas numbers. little bush came in and Clinton had the spending under control and bush really didnt have to start spending until after 9/11 and his illegal war he started. Now look at Obama who came into a hornets nest and our country spending like never before. Obama has to be given time to straighten out all of bush's bad spending habits. You are comparing apples and grapefruit here.
I understand you dont like Obama, but slinging mud isnt becoming. Everyone gave bush a second term to try and straighten out his mess ( which he failed miserably ) I think we the people who put Obama in office owe the same to him.
I personally am not an Obama supporter, I just think if its good for one side, its good for the other. As for whats going on with the debt ceiling and the defaulting on the loan. I hope we do default and the political hiarchy of America crumbles. The politicians and big business that runs this country have had a good run, maybe its time for a change tho.
If we Hyper-inflate we will have to make a north american currency with canada...
Hey, c'mon man! Don't drag us down with you! I mean, if your currency flops our economy is done for too since you'll all stop buying Canadian goods, but at least I can buy some magic cards for cheap online!
Seriously though, what's with this talk of a North American currency? Why would that help anything?
Its really not fair to compare the little bush numbers and Obamas numbers. little bush came in and Clinton had the spending under control and bush really didnt have to start spending until after 9/11 and his illegal war he started. Now look at Obama who came into a hornets nest and our country spending like never before. Obama has to be given time to straighten out all of bush's bad spending habits. You are comparing apples and grapefruit here.
I understand you dont like Obama, but slinging mud isnt becoming. Everyone gave bush a second term to try and straighten out his mess ( which he failed miserably ) I think we the people who put Obama in office owe the same to him.
I personally am not an Obama supporter, I just think if its good for one side, its good for the other. As for whats going on with the debt ceiling and the defaulting on the loan. I hope we do default and the political hiarchy of America crumbles. The politicians and big business that runs this country have had a good run, maybe its time for a change tho.
Clinton had the budget balanced due to the exteme economic growth that we saw during the mid-late 90's. The economy was booming, people were buying on credit and racking up debt like never before, and our GDP was growing very quickly. Not to mention that there was a large amount of money that was taken from the social security surpluses that helped to create that balanced budget. The thing that people often fail to realize is that the late 90's in the markets, and the economy, were creating a bubble of their own, and though it was fantastic that we were able to come up with a balanced budget, it wasnt realistic from an economics perspective to assume that the crazy growth in the economy that we were seeing was going to be sustained. Taking all of that money from the social security fund with the idea that it was a surplus was just idiodic, because the market always fluxuates over time and you need to have those surpluses on hand in order to handle the times where the market drops and the long-term growth evens itself out properly.
The economy was allready faltering by the time clinton was leaving office. The internet stock bubble burst in 2000, and the high growth rate the economy had been working with for much of the 90s had allready faltered. The kicker that really caused the market to fall was what happenned on 9/11 and the continued decline in the economy that had allready started previously.
Bush and Obama issues and likes/dislikes aside however, the actual data the other poster lists, does appear to be correct. The data itself doesnt lie and would be foolish to simply dismiss out of hand. If you disagree with a perceived viewpoint of a poster thats fine, but dont dismiss actual factual data out of hand.
For the record, I do believe bush spent too much money, and tried to be too agreeable in trying to bring both parties together to try to accomplish things during his two terms in office(Which I think is fine to do, creating unity in government is key to getting things done.) What we saw during the 2000's was a steady stream of bubbles being created and then bursting, and the government trying to pick up the pieces after each bubble burst, in the end ending up setting up the next bubble that was created. The biggest bubble of all, of course, turned out to be the housing bubble, which caused our markets to run up to heights never seen before, only to crash right back down again once people realized that it was in fact a bubble and the mess that subprime loans, and adjustable rate/no-down-payment mortgages caused. The many issues that we saw came to a head, as it turned out, right at the end of bush's second term, and while bush/congress/treasury/fed all worked together in order to try to stop the rapid decline in the markets and global investor confidence, unfortunately there was just too much of a mess to fix that quickly, thus many of the programs and packages that were put together when bush was still in office ended up eventually getting implemented during the early month's of obama's first year in office.
My personal view is that I feel that many of the programs up to and including the 700B stimulus package that was inevitably passed as the market was tanking in early 2009, was something that was needed in order to calm the panic and get people to pause and realize the sky wasnt falling, the economic world wasnt ending, and it inevitably did accomplish that (that said, I do believe that many of the things that money was spent on as a part of that package werent needed and a much better stimulus package could have been put together had more time and negotiating been available.)
Its, unfortunately, what happenned in large part after that, that concerns me. Though this may have stopped the freefall of the market and began an unprecedented climb back up to where we are now, instead of obama and the government focusing solely on trying to right our economic ship, and work solely at trying to get unemployment back down, obama and the democratically controlled congress at the time went off and started trying to pass a ton of other things (which took far more effort for many of them than one would think it should have given that the dem's did have control of both houses of congress and the presidency, so they could have passed anything and everything they wanted without a single republican vote, and yet it turned out to be much harder than that, at least until the 2010 elections.)
I firmly believe that if our government would have left their own political agendas at home over the last couple years and actually focused solely on trying to improve the economy, lower unemployment, and righting that very important part of the ship, that we would be in much better shape right now than we are, with us still having around 9% unemployment, and still having very low growth in the economy to speak of.
As far as the unprecedented rate of spending that we are seeing now, Its clear that this cannot continue, and something needs to be done. As was mentioned, we are on pace for a greece-style debt meltdown if something drastic isnt done to bring our fiscal house back in order. Some hard decisions are going to have to be made, and in the end I doubt eithor side is likely to be 100% happy with what will inevitably be agreed to in order to keep our government running. Adjustments to the tax code to deal with many un-needed deductions that can increase revenue without raising taxes, along with many needed cuts and adjustments to the spending problems we have these days will inevitably be needed to right the ship.
I still look forward to seeing what congress manages to come up with over the next week in hopes that we can, at least for now, put this issue behind us and let us move forward without all the uncertainty.
The bubble started way before Clinton was in office, it just wasnt that noticable.
Since you started with Clinton, I will too. Think of the office as a family business that turns over leadership every 8 years. Prior to Clinton, papa bush spent like no president before. When Clinton took over, it took him 8 years and some creative accounting to balance the books and make it look like the country was on the right path. In actuallity he had just spent money that wasnt really his to spend and promised money he wouldnt be around to spend. He leaves the country to little bush looking like its going in the right direction but in reality spending is about to get ugly. Add in 9/11 and the illegal war and little bush is spending almost as much as papa bush is. Add in Clintons 10-12 year contracts that our country was obligated to honor and spending is seriously going out of control. So what does little bush do before leaving office? Spends even more money by bailing out the banks and auto industry!! Then here comes Obama. Now he has to deal not only with little bushes out of control spending but, Clintons lengthy contracts. So yeah it looks like Obama is spending more then little bush, but he has to pay off not only what little bush spent but the mess Clinton left that little bush ignored while hunting W.M.D. in the desert.
Dont get me wrong, I am not an Obama fan, or a Republican backer, or even a Democrat supporter but, lets be fair Obama is paying for the sins of many before him.
Hey, c'mon man! Don't drag us down with you! I mean, if your currency flops our economy is done for too since you'll all stop buying Canadian goods, but at least I can buy some magic cards for cheap online!
Seriously though, what's with this talk of a North American currency? Why would that help anything?
The Amero is worthless unless if you consolidate the banks and the budgets of the three nations, frankly we'd either enter into a Canadian or American system of federalism and right now those two are not joining into a massive empire. At best the US might be able to expand farther into Latin America via a broken down Mexico and into some strategically important areas such as Cuba and Panama.
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Ambition must be made to counteract ambition.
Individualities may form communities, but it is institutions alone that can create a nation.
Nothing succeeds like the appearance of success.
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
The debt ceiling is going to be raised no matter what, its our out of control spending that has to be curbed. The U.S. government and all government overall has grown out of control. People who say don't cut social programs are just not understanding WE CANT KEEP IT UP. These social programs have so many loopholes and people who are scamming the system its unreal. The only things the government should cover is Infrastructure, Military, and Schools. Social Security will not be around when I need it so why should i pay into it? Same with medicare. Its time we started fixing whats wrong with this country. Start taxing individuals who ship our jobs oversees, start REWARDING companies that higher U.S. workers. My family came to the U.S. with nothing, built a successful buisness and worked hard to do it. Its that WORKING HARD that people are tending to forget and its whats bringing this country to ****. The ghetto they came from in the old country makes the ghetto's here look like a country club. Raise the ceiling but start cutting alot of the bs. If people want to get tattoo's they regret removed or study a bee or butterfly look to donations not to the government. ****s getting out of hand fast and it needs to stop now.
I can't believe Republicans want to protect tax breaks for the top 2%, but they're willing to cut Social Security, Medicare and Medicaid. The wealthy don't need tax breaks, and people actually need these programs. Everybody should pay the same percentage of taxes.
EVERYBODY SHOULD PAY THE SAME PERCENTAGE OF TAXES. However they don't. The poor pay less and the rich for being successful are taxed MORE. Flat tax = best way. Also that top 2% are the ones who invest and create jobs. The public sector should never look to make jobs, thats the duty of Americans with a dream.
EVERYBODY SHOULD PAY THE SAME PERCENTAGE OF TAXES. However they don't. The poor pay less and the rich for being successful are taxed MORE. Flat tax = best way. Also that top 2% are the ones who invest and create jobs. The public sector should never look to make jobs, thats the duty of Americans with a dream.
Flat taxes are a regressive tax on the poor who have limited disposable income. The rich often equally invest into areas such as blue chip stocks that lack job creating mechanics, since that money is exchanged in money market accounts and remains only in the financial sector without being reinvested outside of that areas.
There are basically two types of "job creating investors" among the rich:
1. "Dolphins" or "flippers such as venture capitalists that seek a portion of ownership in a start up, to see that start up make money and then "flip" the ownership to other investors to get monies.
2. "Sharks" such as investment banks that hunt for easy investments and that equally want a piece of the profits immediately.
Another sort of investors are "small and large fish" that while they get eaten by dolphins and sharks, tend to be the more calmer sort of investor that can deal with long term consequences.
However, what a "flat tax" does is take money away from the poor to pay for services that may or may not benefit them. The rich benefit from an educated electorate to hire and start up businesses to invest in, equally the rich also benefit from security for shipping lanes and other expensive adventures into areas to support property claims which most poor people do not.
What I will add is that the "poorer areas" do have some large deficits in culture such as "not acting white" by "getting an education" is an oft cited one that helps to perpetuate an uneducated underclass in urban regions. So personal responsibility does play a crucial factor in communities, equally so does some forms of redistribution of the wealth that do work such as infrastructure that the poor as well as rich corporations like Fedex use every day.
And if we're going to go back to the Early Republic, I will furthermore add that the vast majority of "private start ups" that created infrastructure were government granted monopolies because the electorate was scared about the government having too much power. However, these monopolies created in some places city-states unto themselves in which companies controlled all forms of commerce and paid in worthless currency that was only good while in the town which further enslaved the peoples to the companies.
Historically dating back to the Roman empire and perfected under the Byzantine system of governance, it has been moderate progressive taxation that has sustained governments and defended commercial interests for any length of time. This is the same for modern nation-states in which a progressive income tax works with consumption taxes.
Equally, considering for the last few decades large corporations have written large tracts of law to keep people out of their personal fiefdoms and wedges in the tax system to gain a comparative advantage over other companies this is just a stealthy way to stifle competition. That is essentially plutocracy and not capitalism.
And since a large portion of the government expenditures is the military where contracts and defense against pirates and terrorists which disproportionately affect the "job creators" then they should equally pay to fit the bill for this large thrust in military and security spending over the last decade, no?
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Rollback Post to RevisionRollBack
Ambition must be made to counteract ambition.
Individualities may form communities, but it is institutions alone that can create a nation.
Nothing succeeds like the appearance of success.
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
income tax needs to go away, and only "use" taxes be in effect... we aren't in WW2 anymore and with billions going into the government from our hard work, they just become irrational spenders because they will be getting more soon. just my 2c
Hey, c'mon man! Don't drag us down with you! I mean, if your currency flops our economy is done for too since you'll all stop buying Canadian goods, but at least I can buy some magic cards for cheap online!
Seriously though, what's with this talk of a North American currency? Why would that help anything?
Seconded we don't want your problems unless your willing too accept our extremely harsh banking regulations. (there is a reason there is about only 6 banks in Canada)
I don't think people understand just how bad this can get. If the US Defaults on its debts, there would be people lining up in the streets for soup, except the soup kitchen is closed due to lack of funding. That's how bad it would be.
EVERYBODY SHOULD PAY THE SAME PERCENTAGE OF TAXES. However they don't. The poor pay less and the rich for being successful are taxed MORE. Flat tax = best way.
I think the best way to understand why a flat tax is unfair is to realize that your $10,000th dollar is not worth the same amount as your $10,000,000th dollar (I mean this in the real, economic sense of "worth," i.e., how much do you value something/what would you be willing to exchange for something). Put in economic terms, the marginal value of a dollar is not a constant. (Something's "marginal value" is, essentially, the "value of one more" of that thing).
Your first $10,000 or so represents your survival and basic ability to function in society, even if at a meager subsistence level with no savings or security; in a hypothetical world with no charity/welfare (which can be thought of as a means of transferring $ to those who otherwise don't have enough of it for survival), you'd risk your life for that $10,000, because without it you have to go without food/shelter/other essentials, and your ability to function socially, keep a job, or even survive are threatened. Your 1,000th $10,000 (i.e., from $9,990,000 to $10,000,000) gets you some additional luxury/security/etc. over what you already have. I don't know what you personally would do for that 1,000th $10,000, but you wouldn't risk your life for it. It is literally worth less than your 1st $10,000.
Most tax systems recognize this variable marginal value by not taxing every dollar the same way. All the money everyone makes in a given "tax bracket" is taxed at the same rate, but that rate increases with higher brackets. (A lot of people don't realize that this is how income tax works; I, Steve Jobs, and the manager at Burger King all pay the same rates on all the tax brackets we share. It's just that Steve and I make income that falls into higher brackets in which Burger King guy has no income, and so we're taxed at higher rates only on that income. Tax rates aren't retroactive down the scale for all the money you earned in lower brackets)
This is important, because Steve's $1,000,000th dollar is worth less to him than my and his $50,000th dollar is worth to each of us, which are in turn worth less to us than our $20,000th dollar is worth to he and I and Burger King Guy. So all of our $20,000th dollars are taxed at one rate, and Steve's and my $50,000th are taxed at another, and Steve's $1,000,000th is taxed at yet another. If we all paid a flat tax, the actual rate on the $20,000th dollar would be higher than that on the $50,000th (or whatever) in real economic terms, because the $20,000th has a higher marginal value.
So. It's certainly possible to think that government spending and taxes are too high, or that we have the wrong number of tax brackets, or that the distribution of rates amongst those brackets is wrong. Nothing above argues against any of that, and I'm not giving my opinion on any of it here. But if you could snap your fingers and set government spending to the exact right level, if you wanted the tax structure to really be fair, you would still need multiple brackets with higher brackets being taxed at a higher rate than the lower ones. Otherwise your poorest citizens have to pay the highest rate on the actual value of their income, just because the first dollars you earn are worth more to you than the later ones. Should the tax system be "flatter", with higher rates on the poor and lower rates on the rich than what we have now? That's something to debate. Should it be completely flat? That's just illogical.
I don't think people understand just how bad this can get. If the US Defaults on its debts, there would be people lining up in the streets for soup, except the soup kitchen is closed due to lack of funding. That's how bad it would be.
The United States will not Default on its debt. We'll probably get our credit rating downgraded from the current AAA rating that we've basically had forever, but defaulting on the debt simply wont happen. Why you ask? Well, unless President Obama intentionally chooses not to pay the debt payments which are only a very small amount of the taxes they take in each month, then we wont be defaulting. Most of the main things that are needed to be funded will inevitably (one would hope) be chosen to get the funding they are bringing in, and then the other programs would have to deal with the lack of funding until a plan could be put together. So anytime you hear obama or the dems spout off about defaulting, just remember its a load of crap, its just talking points to try to rile up the people and rally them behind them in hopes of getting the plan that they would want passed (would be nice if the dems in the senate would actually put forth a plan, pass it in a vote in the senate, and then send it over to the house to be voted on/tweaked/etc, like the congressional process is supposed to work.)
If we hit the debt ceiling and it causes a partial government shutdown, and we get our credit rating lowered slightly, it will cause the markets to drop (though nothing like whats being talked about if we were to default.) and we will start seeing higher interest rates. It should be noted that the government did shutdown for a short while during the '90's when Clinton was president, and inevitably a deal was worked out and the affects of that certainly werent the doom and gloom being talked about these days.
I personally have faith that inevitably the government will come up with a plan that both sides at least partially agree on, and start the proper process of passing a plan in one house, sending it to the other to be tweaked, voted on, and sent back, and so on until we end up with a compromised plan that both sides can agree with that will allow all of this to end.
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Thoughts? Those from outside the US feel free to chime in...
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Our government is barely functioning any more
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We can print a bunch of money causing hyper-inflation in the us.
We can pass a law letting us go above the lending cap, mabye doubling tripiling or even lifting it completely.
We can not pay them at all.
there are probably a few more, but those are just off the top of my head.
If we Hyper-inflate we will have to make a north american currency with canada, and we will bring like 1 north ameriacn currency for every 10-20 us dollar, and that would deal with the Hyper inflation, but we would no longer be the world currency and we would be less powerful.
China and all the other countrys with money from us will then realize that money is really worth nothing anymore, they can't even compensate it anymore, and they will hate us.
If the US says no, it will be hated by china...
If we lift the cap, they won't hate the US but it will plunge further into debt.
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Which hasn't stopped our politicians from continuing to be completely petty.
The whole thing is ridiculous, and we should sack the lot of them.
But instead, there will just be a last minute 'miracle save' that does not actually accomplish a single thing in the long term.
One time, this isnt going to happen and everyone is going to be standing around looking at each other wondering the the hell just happened. I really hope I live to see it.
The problem we have in our country now is that both sides are being stubborn about what they feel is "best" for the american people. The dem's eithor want a smaller amount of cuts with no tax increases, or will only allow for a larger amount of cuts in spending, but with fairly significant tax increases to go along with it. The rep's are steadfast in that they dont believe that increasing taxes on anyone is a good idea, especially with the recovery not going as well as predicted, and higher taxes would only stifle the issue, and they believe that we need to heavily cut spending to try to bring the country back on track from a fiscal standpoint.
That said though, both sides seem somewhat agreeable to the idea of changes to the tax code to allow for increases in revenue (through changing or removing deductions of various kinds among other things) without actually raising tax rates. The problem of course with such adjustments to the tax code and such, is that such changes tend to take time and a process to go through. Something that, at this point, we simply dont have to work with.
Some have suggested that we should come up with a temporary debt ceiling raise and plan until sometime next year, in order to give time for a larger and long-term plan to be agreed upon, and allow for such adjustments to the tax code to go along with it to help with the revenue side of things.
Obama however, has come out adamantly against a temporary short-term agreement to give such time, even when its clear that while both sides have come close to agreements in the past with both rep's and dem's making adjustments one way or the other to try to come up with such an agreement, they never quite seemed to get close enough, or a nearly agreed upon change was taken off the table at the last minute (at least once obama and the rep's were close to an agreement, only to have obama change the deal, and causing the talks to break down again. One of the problems of course for many in congress and with Obama himself, is that next year is an election year, and the prospects of a temporary plan, or one that doesnt make their constituents happy (as a dem or rep) is part of what is holding up the process.
What continues to boggle my mind, is how often Obama keeps talking about defaulting on the debt if an agreement isnt come to, when in fact it would be primarily up to Obama, in the case of a government shutdown (due to the lack of a raise in the debt ceiling) to choose what to pay and what not to pay with the tax money that is brought in. Given that the data shows that there would be plenty of money to pay for, among other things, the debt payments, I dont see how that could be the case. Would Obama seriously choose not to pay for the debt payments and cause massive damage to our country to prove a point? I sure hope not.
Even then, credit rating agencies that handle the credit ratings for governments around the world, have come out and warned that the US is very near having their credit rating downgraded for the first time in ages, and could even occur before the August 2nd deadline. The american people and the world would love to see both houses of congress and the president all get on the same page and agree to a big long-term deal that takes away any issues of uncertainty, but unfortunately, Im just not sure thats going to happen at the moment.
In the end, anyone thinking that this issue is the fault of just rep's or just dem's or just obama are quite simply wrong.
If it were up to me, I suppose, I would say that coming up with a short-term deal that both sides (and obama) can agree on, to give the time needed to come up with the tax reforms and better specifics of cutting and balancing for a long-term deal that will actually thoroughly deal with the issues we have with spending too much along with finding ways to increase revenue without hampering economic growth by raising taxes.
In the end I suppose we'll see what they manage to come up with.
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but seriously a sudden spike in interest rates and credit fees and whatever else would be terrible not just now but at any time.
stock markets gunna be funky in the days ahead if something doesn't happen for the better.
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So why are republicans making such a big fuss about this?
oh, i know
BECAUSE, THEY DONT WANT OBAMA IN OFFICE. THEY DONT GIVE A HOLY **** ABOUT THE AMERICAN PEOPLE. ALL THEY WANT IS POWER..
mind you, i am a republican....but a very liberal one.
540 Peasant cube- Gold EditionSomething SpicyOn a monthly basis, the US government brings in an estimated $200B in tax revenue (that's $200,000,000,000). The monthly interest on the debt is, on the top end, $20B (that's $20,000,000,000). That leaves the government with $180B to function on for the month (that's $180,000,000,000). Which more than covers essential government functions (but may not be enough to cover the 10 DIFFERENT Federal programs that produce food safety laws, as an example of the hundreds of billions of dollars in redundant programs our government has) such as seniors benefits, veterans benefits, the military, and the various Departments (Education, Energy, etc., etc.).
And actually Macius, Republicans are making a fuss about this for two reasons.
1) In 2006, Obama voted against raising the debt ceiling for Bush claiming that it was an indication of a failure in leadership that the debt ceiling needed raised. Now he's lying to the American people on a daily basis by threatening default if the debt ceiling isn't raised.
2) Obama and this Administration has a spending problem that needs curbed. Otherwise, by 2020, our debt will be 100%, or higher, of our GDP. We'll be in a worse position economically than Greece.
If you don't believe we have a spending problem, look at this (data taken from http://www.treasurydirect.gov/NP/BPDLogin?application=np ):
National Debt on 1/19/01 (day before Bush assumed office): $5,727,776,738,304.64
National Debt on 1/16/09 (last recorded day before Bush leaves office): $10,628,881,485,510.23
National Debt on 1/20/09 (day Obama assumed office): $10,626,877,048,913.08
National Debt on 7/22/11 (last day data is available for right now): $14,342,873,980,042.91
Under Bush, the national debt grew by $4,901,104,747,205.59 over the course of 2,921 days. That's a rate of spending of $1,677,885,911.40 PER DAY.
Under Obama, the national debt has grown by $3,715,996,931,129.83 over the course of 917 days. That's a rate of spending of $4,052,341,255.32 PER DAY.
Obama is spending government revenue at a rate of 241.51% more than Bush did.
And this wouldn't be the first time we hit the debt ceiling, and we've never defaulted on it before. In fact, one of the times the US hit the debt ceiling it took three weeks AFTER we hit the ceiling to come to an agreement to raise it...and we never defaulted.
Basically, whether or not we default, regardless of whether or not we have raised the debt ceiling, is entirely in Obama's hands. The question, though, is will he violate the Constitution just to make a political point in an effort to ensure his party retakes the House and he wins reelection in 2012 by forcing the government to default and then spinning it to blame the Republicans (and hope, in the process, no one notices that he is the only one who could have caused the default by law).
You do realize that a flat/fair tax would be less progressive than the current system right? In an ideal world everyone would share some of the burden. As long as you can make someone else pay via the vote, that's what people do.
Its really not fair to compare the little bush numbers and Obamas numbers. little bush came in and Clinton had the spending under control and bush really didnt have to start spending until after 9/11 and his illegal war he started. Now look at Obama who came into a hornets nest and our country spending like never before. Obama has to be given time to straighten out all of bush's bad spending habits. You are comparing apples and grapefruit here.
I understand you dont like Obama, but slinging mud isnt becoming. Everyone gave bush a second term to try and straighten out his mess ( which he failed miserably ) I think we the people who put Obama in office owe the same to him.
I personally am not an Obama supporter, I just think if its good for one side, its good for the other. As for whats going on with the debt ceiling and the defaulting on the loan. I hope we do default and the political hiarchy of America crumbles. The politicians and big business that runs this country have had a good run, maybe its time for a change tho.
Hey, c'mon man! Don't drag us down with you! I mean, if your currency flops our economy is done for too since you'll all stop buying Canadian goods, but at least I can buy some magic cards for cheap online!
Seriously though, what's with this talk of a North American currency? Why would that help anything?
Clinton had the budget balanced due to the exteme economic growth that we saw during the mid-late 90's. The economy was booming, people were buying on credit and racking up debt like never before, and our GDP was growing very quickly. Not to mention that there was a large amount of money that was taken from the social security surpluses that helped to create that balanced budget. The thing that people often fail to realize is that the late 90's in the markets, and the economy, were creating a bubble of their own, and though it was fantastic that we were able to come up with a balanced budget, it wasnt realistic from an economics perspective to assume that the crazy growth in the economy that we were seeing was going to be sustained. Taking all of that money from the social security fund with the idea that it was a surplus was just idiodic, because the market always fluxuates over time and you need to have those surpluses on hand in order to handle the times where the market drops and the long-term growth evens itself out properly.
The economy was allready faltering by the time clinton was leaving office. The internet stock bubble burst in 2000, and the high growth rate the economy had been working with for much of the 90s had allready faltered. The kicker that really caused the market to fall was what happenned on 9/11 and the continued decline in the economy that had allready started previously.
Bush and Obama issues and likes/dislikes aside however, the actual data the other poster lists, does appear to be correct. The data itself doesnt lie and would be foolish to simply dismiss out of hand. If you disagree with a perceived viewpoint of a poster thats fine, but dont dismiss actual factual data out of hand.
For the record, I do believe bush spent too much money, and tried to be too agreeable in trying to bring both parties together to try to accomplish things during his two terms in office(Which I think is fine to do, creating unity in government is key to getting things done.) What we saw during the 2000's was a steady stream of bubbles being created and then bursting, and the government trying to pick up the pieces after each bubble burst, in the end ending up setting up the next bubble that was created. The biggest bubble of all, of course, turned out to be the housing bubble, which caused our markets to run up to heights never seen before, only to crash right back down again once people realized that it was in fact a bubble and the mess that subprime loans, and adjustable rate/no-down-payment mortgages caused. The many issues that we saw came to a head, as it turned out, right at the end of bush's second term, and while bush/congress/treasury/fed all worked together in order to try to stop the rapid decline in the markets and global investor confidence, unfortunately there was just too much of a mess to fix that quickly, thus many of the programs and packages that were put together when bush was still in office ended up eventually getting implemented during the early month's of obama's first year in office.
My personal view is that I feel that many of the programs up to and including the 700B stimulus package that was inevitably passed as the market was tanking in early 2009, was something that was needed in order to calm the panic and get people to pause and realize the sky wasnt falling, the economic world wasnt ending, and it inevitably did accomplish that (that said, I do believe that many of the things that money was spent on as a part of that package werent needed and a much better stimulus package could have been put together had more time and negotiating been available.)
Its, unfortunately, what happenned in large part after that, that concerns me. Though this may have stopped the freefall of the market and began an unprecedented climb back up to where we are now, instead of obama and the government focusing solely on trying to right our economic ship, and work solely at trying to get unemployment back down, obama and the democratically controlled congress at the time went off and started trying to pass a ton of other things (which took far more effort for many of them than one would think it should have given that the dem's did have control of both houses of congress and the presidency, so they could have passed anything and everything they wanted without a single republican vote, and yet it turned out to be much harder than that, at least until the 2010 elections.)
I firmly believe that if our government would have left their own political agendas at home over the last couple years and actually focused solely on trying to improve the economy, lower unemployment, and righting that very important part of the ship, that we would be in much better shape right now than we are, with us still having around 9% unemployment, and still having very low growth in the economy to speak of.
As far as the unprecedented rate of spending that we are seeing now, Its clear that this cannot continue, and something needs to be done. As was mentioned, we are on pace for a greece-style debt meltdown if something drastic isnt done to bring our fiscal house back in order. Some hard decisions are going to have to be made, and in the end I doubt eithor side is likely to be 100% happy with what will inevitably be agreed to in order to keep our government running. Adjustments to the tax code to deal with many un-needed deductions that can increase revenue without raising taxes, along with many needed cuts and adjustments to the spending problems we have these days will inevitably be needed to right the ship.
I still look forward to seeing what congress manages to come up with over the next week in hopes that we can, at least for now, put this issue behind us and let us move forward without all the uncertainty.
Since you started with Clinton, I will too. Think of the office as a family business that turns over leadership every 8 years. Prior to Clinton, papa bush spent like no president before. When Clinton took over, it took him 8 years and some creative accounting to balance the books and make it look like the country was on the right path. In actuallity he had just spent money that wasnt really his to spend and promised money he wouldnt be around to spend. He leaves the country to little bush looking like its going in the right direction but in reality spending is about to get ugly. Add in 9/11 and the illegal war and little bush is spending almost as much as papa bush is. Add in Clintons 10-12 year contracts that our country was obligated to honor and spending is seriously going out of control. So what does little bush do before leaving office? Spends even more money by bailing out the banks and auto industry!! Then here comes Obama. Now he has to deal not only with little bushes out of control spending but, Clintons lengthy contracts. So yeah it looks like Obama is spending more then little bush, but he has to pay off not only what little bush spent but the mess Clinton left that little bush ignored while hunting W.M.D. in the desert.
Dont get me wrong, I am not an Obama fan, or a Republican backer, or even a Democrat supporter but, lets be fair Obama is paying for the sins of many before him.
The Amero is worthless unless if you consolidate the banks and the budgets of the three nations, frankly we'd either enter into a Canadian or American system of federalism and right now those two are not joining into a massive empire. At best the US might be able to expand farther into Latin America via a broken down Mexico and into some strategically important areas such as Cuba and Panama.
Ambition must be made to counteract ambition.
Individualities may form communities, but it is institutions alone that can create a nation.
Nothing succeeds like the appearance of success.
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
EVERYBODY SHOULD PAY THE SAME PERCENTAGE OF TAXES. However they don't. The poor pay less and the rich for being successful are taxed MORE. Flat tax = best way. Also that top 2% are the ones who invest and create jobs. The public sector should never look to make jobs, thats the duty of Americans with a dream.
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Flat taxes are a regressive tax on the poor who have limited disposable income. The rich often equally invest into areas such as blue chip stocks that lack job creating mechanics, since that money is exchanged in money market accounts and remains only in the financial sector without being reinvested outside of that areas.
There are basically two types of "job creating investors" among the rich:
1. "Dolphins" or "flippers such as venture capitalists that seek a portion of ownership in a start up, to see that start up make money and then "flip" the ownership to other investors to get monies.
2. "Sharks" such as investment banks that hunt for easy investments and that equally want a piece of the profits immediately.
Another sort of investors are "small and large fish" that while they get eaten by dolphins and sharks, tend to be the more calmer sort of investor that can deal with long term consequences.
However, what a "flat tax" does is take money away from the poor to pay for services that may or may not benefit them. The rich benefit from an educated electorate to hire and start up businesses to invest in, equally the rich also benefit from security for shipping lanes and other expensive adventures into areas to support property claims which most poor people do not.
What I will add is that the "poorer areas" do have some large deficits in culture such as "not acting white" by "getting an education" is an oft cited one that helps to perpetuate an uneducated underclass in urban regions. So personal responsibility does play a crucial factor in communities, equally so does some forms of redistribution of the wealth that do work such as infrastructure that the poor as well as rich corporations like Fedex use every day.
And if we're going to go back to the Early Republic, I will furthermore add that the vast majority of "private start ups" that created infrastructure were government granted monopolies because the electorate was scared about the government having too much power. However, these monopolies created in some places city-states unto themselves in which companies controlled all forms of commerce and paid in worthless currency that was only good while in the town which further enslaved the peoples to the companies.
Historically dating back to the Roman empire and perfected under the Byzantine system of governance, it has been moderate progressive taxation that has sustained governments and defended commercial interests for any length of time. This is the same for modern nation-states in which a progressive income tax works with consumption taxes.
Equally, considering for the last few decades large corporations have written large tracts of law to keep people out of their personal fiefdoms and wedges in the tax system to gain a comparative advantage over other companies this is just a stealthy way to stifle competition. That is essentially plutocracy and not capitalism.
And since a large portion of the government expenditures is the military where contracts and defense against pirates and terrorists which disproportionately affect the "job creators" then they should equally pay to fit the bill for this large thrust in military and security spending over the last decade, no?
Ambition must be made to counteract ambition.
Individualities may form communities, but it is institutions alone that can create a nation.
Nothing succeeds like the appearance of success.
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
Seconded we don't want your problems unless your willing too accept our extremely harsh banking regulations. (there is a reason there is about only 6 banks in Canada)
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I think the best way to understand why a flat tax is unfair is to realize that your $10,000th dollar is not worth the same amount as your $10,000,000th dollar (I mean this in the real, economic sense of "worth," i.e., how much do you value something/what would you be willing to exchange for something). Put in economic terms, the marginal value of a dollar is not a constant. (Something's "marginal value" is, essentially, the "value of one more" of that thing).
Your first $10,000 or so represents your survival and basic ability to function in society, even if at a meager subsistence level with no savings or security; in a hypothetical world with no charity/welfare (which can be thought of as a means of transferring $ to those who otherwise don't have enough of it for survival), you'd risk your life for that $10,000, because without it you have to go without food/shelter/other essentials, and your ability to function socially, keep a job, or even survive are threatened. Your 1,000th $10,000 (i.e., from $9,990,000 to $10,000,000) gets you some additional luxury/security/etc. over what you already have. I don't know what you personally would do for that 1,000th $10,000, but you wouldn't risk your life for it. It is literally worth less than your 1st $10,000.
Most tax systems recognize this variable marginal value by not taxing every dollar the same way. All the money everyone makes in a given "tax bracket" is taxed at the same rate, but that rate increases with higher brackets. (A lot of people don't realize that this is how income tax works; I, Steve Jobs, and the manager at Burger King all pay the same rates on all the tax brackets we share. It's just that Steve and I make income that falls into higher brackets in which Burger King guy has no income, and so we're taxed at higher rates only on that income. Tax rates aren't retroactive down the scale for all the money you earned in lower brackets)
This is important, because Steve's $1,000,000th dollar is worth less to him than my and his $50,000th dollar is worth to each of us, which are in turn worth less to us than our $20,000th dollar is worth to he and I and Burger King Guy. So all of our $20,000th dollars are taxed at one rate, and Steve's and my $50,000th are taxed at another, and Steve's $1,000,000th is taxed at yet another. If we all paid a flat tax, the actual rate on the $20,000th dollar would be higher than that on the $50,000th (or whatever) in real economic terms, because the $20,000th has a higher marginal value.
So. It's certainly possible to think that government spending and taxes are too high, or that we have the wrong number of tax brackets, or that the distribution of rates amongst those brackets is wrong. Nothing above argues against any of that, and I'm not giving my opinion on any of it here. But if you could snap your fingers and set government spending to the exact right level, if you wanted the tax structure to really be fair, you would still need multiple brackets with higher brackets being taxed at a higher rate than the lower ones. Otherwise your poorest citizens have to pay the highest rate on the actual value of their income, just because the first dollars you earn are worth more to you than the later ones. Should the tax system be "flatter", with higher rates on the poor and lower rates on the rich than what we have now? That's something to debate. Should it be completely flat? That's just illogical.
The United States will not Default on its debt. We'll probably get our credit rating downgraded from the current AAA rating that we've basically had forever, but defaulting on the debt simply wont happen. Why you ask? Well, unless President Obama intentionally chooses not to pay the debt payments which are only a very small amount of the taxes they take in each month, then we wont be defaulting. Most of the main things that are needed to be funded will inevitably (one would hope) be chosen to get the funding they are bringing in, and then the other programs would have to deal with the lack of funding until a plan could be put together. So anytime you hear obama or the dems spout off about defaulting, just remember its a load of crap, its just talking points to try to rile up the people and rally them behind them in hopes of getting the plan that they would want passed (would be nice if the dems in the senate would actually put forth a plan, pass it in a vote in the senate, and then send it over to the house to be voted on/tweaked/etc, like the congressional process is supposed to work.)
If we hit the debt ceiling and it causes a partial government shutdown, and we get our credit rating lowered slightly, it will cause the markets to drop (though nothing like whats being talked about if we were to default.) and we will start seeing higher interest rates. It should be noted that the government did shutdown for a short while during the '90's when Clinton was president, and inevitably a deal was worked out and the affects of that certainly werent the doom and gloom being talked about these days.
I personally have faith that inevitably the government will come up with a plan that both sides at least partially agree on, and start the proper process of passing a plan in one house, sending it to the other to be tweaked, voted on, and sent back, and so on until we end up with a compromised plan that both sides can agree with that will allow all of this to end.