Can You Balance The U.S. Budget?

The New York Times has created an online "game" that allows you to tackle the U.S. budget deficit by creating a plan of your own. When you are done implementing the plan, you can see how it actually will affect the deficit – if at all. I haven’t tried it personally, but Gawker mucked around with it by moving tax levels back to the Clinton era and getting out of Iraq and Afghanistan. They claim that did the trick. Here is the lead-in from the NYT:

"Today, you’re in charge of the nation’s finances. Some of your options have more short-term savings and some have more long-term savings. When you have closed the budget gaps for both 2015 and 2030, you are done. Make your own plan, then share it online."

You can play Mr. — or Mrs. FixIt by visiting the NYT. Thanks Gawker.

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  1. 0
    ZippyDSMlee says:

    Meh selling 30% of your consumer base more than they could afford did not take down or largely effect the whole system, making money from nothing and keeping a large portion of it did it and that goes to the very core of the financial system and why it will fail again and soon and after that there is no going back to the old ways.

    I have a dream, break the chains of copy right oppression!

  2. 0
    ZippyDSMlee says:

    Its ok bro, but still if they can not find work out of government or government affiliated business its time for them to go back to school mew thinks. Sorry but one must have NO appearance of corruption and getting rid of old coders who serve then bend over the public from the "free market" is bad for us all. Hell if they want they can go on social security at a max of 900 a month if they have nothing the bank that is :P.

    I have a dream, break the chains of copy right oppression!

  3. 0
    DorthLous says:

    Actually, never have second term or election including a past official. EVER. Else you got the popularity contest going on WHILE they are in their seats. Removing that diminishes by that much the public pandering. You can couple this with longer terms and a mechanism to remove problematic people.

  4. 0
    Xveers says:

    Personally, I blame it on a situation where mortgage retailers and real estate agents could sell high risk clients variable rate loans and then dump all the liabilities onto someone else, so they could take a cut of it.

    In other words, I sold a very expensive product to somone who could barely make the normal payments, neglecting to mention that said payments were very likely to increase substantially in the future. I then sold all my obligations and risks on this product to some one else. I then walked away with my cut of the processing fees.

    Ain’t life a bitch?

    But that’s the thing of course. "Rational actors" only able to see right up to the tip of their nose and the next bi-weekly paycheque got free reign to earn as much as they were able. Sell to everyone you can! Nevermind that you’re selling a product they can’t afford. Won’t be your problem. Especially when you hand off the risks to someone else.


    Best keep your wits about you: The gears of life are always spinning, and ignorance eventually means you’ll get caught in them.

  5. 0
    Weatherlight says:

    I would say that the timeout period needs to be in the 1-3 year range. Remember we would be required to compensate them once they leave office if they cannot take other employment.

    More importantly I would go for term limits, that would require that people hold political office no more than X cumulative years. Meaning fine you can hold any political position not to exceed 20 years cumulative, and regular term limits enforced so that you cannot hold one office for more than 8 years (two terms). Your either doing something or you GTFO so someone else can. I think this could reduce career politicians so as we have people making choices that are in the best interest of their communities.

    Then cut the pay of all politicians, make it so that they make less but get paid a small amount during that cool off period. Remember political office was meant to be a service to your community/country not a way to make the big $$$.

    Now when you put caps on spending during campaigning it may actually have an effect, where we will start seeing more partys then just R & D and CHANGE may actually happen.

    In a free speech society we will have trouble limiting air time, however debates when they happen need to be balanced. Look at the questions we ask the "non-important" vs the "primary" candidates. Every candidates needs to be given a chance to respond to the same question, and they are allowed to talk about what they would do, or a contrast not a "He would F*** it up, but I wouldn’t".

    *sigh* sorry Zippy, I kind of took one from you on this post.


  6. 0
    greevar says:

    Actually, I’d suggest that all candidates be supplied with a set amount of money and allowed campaign hours limited to be outside of working hours to allow those who need to support their families a fair chance to compete. No other private, personal, nor public material nor monetary contributions are allowed. If someone wants to contribute to a campaign, they need to actually volunteer to work for that campaign. Campaigns should be won by the will of the people, not the content of their coffers. Lobbying should be considered bribery and thus illegal.

    Former executives/administrators from corporations and other private industries should be inelligible for government offices for a minimum of ten years after their last year of employment. Candidates for office and immediate family (i.e. spouse/children) are not allowed to hold investment assests in any company during their term in office *cough* Cheney *cough*.

    Also, in my opinion, the media should be required to cover all candidates for a particular office if they want to report on any of them. This way we don’t have the media giving all the coverage to the "star" candidates, while the rest dwell in obscurity. After all, how many people knew there were more than two nominated candidates for the 2008 election? It wasn’t just Obama and McCain. There were seven presidential candidates for the 2008 election and the we only saw two on the corporate media on a regular basis. Such favortism in coverage is no less the subversion of the electoral system. If they are on the ballot, I want to seem them reported on just as much as the incumbent party nominees.


  7. 0
    ZippyDSMlee says:

    On the banking stuff, people want to blame giving money to those that can not pay it back(poorer home owners,ect) but the reality is the system is founded on gambling money the banks do not really have thus creating a bubble that can destroy them.


    As for balancing the budget fire everyone in government, ban any ex government official working for any business that is partnered with or doing business with government, PERIOD. Next ban all lobbying, you get caught its an auto felony and you can not serve or do business with the government ever again plus 5 years parole.

    Next limit national campaigns to 200$ per person and regional ones to 2000$,double dipping is an automatic felony not only can they not vote but can not give money to any campaign violations eqaul jail time(1 year), corporations are not a person thus may not give money. If this is to hard to implement then all money from everyone during a campaign is put into a pot and divided equally amongst the top 10 candidates, local and regional run off debates must be run on TV as so you can get to the top 10 for any campaign,if there is any money left over government keeps it for campaign funds first anything else 2nd.

    Its impossible to balance the budget with all the corruption in government, get rid of the corruption and you might fix more than just the budget.

    I have a dream, break the chains of copy right oppression!

  8. 0
    Xveers says:

    No, our situation isn’t rosy, but that’s because the US is our primary export market. With their demand going down the pipes it’s only understandable for our own economy to get dragged down as well. HOWEVER, you may notice a lack of mass forclosures here in Canada. Or banks that were forced into reccievership or going cap in hand to Ottawa to beg for a bailout.

    Which Canadian banks got kneecapped, by the way? I Know TD lost some money, but that was in their trading company, which is firewalled off from their main bank. Scotiabank didn’t. Neither did RBC or BMO. Any credit unions drop dead in your neighborhood due to the crisis?

    Why? Because Canadian banks couldn’t do what the US ones did. They couldn’t buy and sell mortgages to high risk clients. Why not? They had no-one to pass the buck to. And they are restricted with how much they can loan to whom and still get insurance protection on their loans. Yes the pressure to deliver is there, but so is the pressure to make financially viable loans.

    Now, do I think the housing market is overvalued? Yes, it is. Alberta certianly is, though it’s deflating pretty hard right now. I know BC’s is (though that is as much an issue about supply and demand). I can’t speak for other provinces, but I’m willing to bet that it’s still far better than places like detroit 😛


    Best keep your wits about you: The gears of life are always spinning, and ignorance eventually means you’ll get caught in them.

  9. 0
    DorthLous says:

    Are you kidding me? I live in Canada and our situation isn’t rosy either. Any single bank linked to the international bank cartel got its knee broken at the same time as all the others. Want to know what’s really scary? The bubble hasn’t burst yet. It merely deflated a bit. But since we’re not fixing the system (quite well explained above, though the movie someone suggested higher [Money is Debt] is a great helper on that as well), it’s going directly for a real burst, the one we merely pushed a bit further.

  10. 0
    Xveers says:

    Just want to point out that the FRB isn’t the catch-all evil system. Other countries also use the system, and have weathered the last crisis rather well. IE Canada. No, the meltdown that happened in the US is a result of insanely poor regulation and the logical collusion of several different actors within the US banking system in an effort to earn more take home pay for themselves. Mortgage brokers helped people who shouldn’t have gotten loans to get them. Banks took these loans and resold them, sometimes an insane number of times, and then repackaged them with more stable assets in order to boost their asset rating. They then sold off said packaged assets to investors who read the label but didn’t know/understand/care what was in the package of debts.

    End result when the first domino fell, everyone else got knocked down. The fundamental reasons as to WHY it melted down are proving difficult to correct.

    There are more issues as to why things melted down, but essensially this is the flaw. Simple human greed. No system man has ever built can stand against it by itself. Only vigilance and a dispassionate desire to keep things on the straight and narrow can.


    Best keep your wits about you: The gears of life are always spinning, and ignorance eventually means you’ll get caught in them.

  11. 0
    greevar says:

    You are mistaken. I do understand Fractional Reserve. Fractional reserve banking requires a fraction in actual deposited money on-hand compared to what they have loaned out. You seem to think it’s the reverse. In fractional reserve, they have 1 dollar of deposited money for every X dollars (i.e. 9:1) loaned out (depending on the set ratio. It could be 100:1 or more). That means they can loan out nine times what they have in deposits on a 9:1 reserve. That means they are, in fact, loaning out money they do not have. They never loan out depositor money, that’s what they use to increase their loan capacity.

    If we followed your understanding of FRB, that is the money loaned out comes from depositors only, then the interest the banks charge on loans would result in the banks eventually holding all of the money and none would be in circulation. The economy would fall through the floor. If everyone is giving more money to the bank than they are getting from the bank (because of interest), eventually they will have all of the money. That won’t make them rich and powerful, they need something to keep us feeding the pyramid and them on top.

    Instead, they create money out of nothing in ratio to the deposited funds at the central bank and charge interest on that previously non-existent money. This way, there is plenty of money to loan out, as long as people take out loans and pay them back on time. Unfortunately, this means there’s a perpetual battle between debt and the money supply. If the debt ever fell below the amount of the current money supply, the whole system would break. So, as I said before. There is nothing backing the money you borrow but your promise to pay it back. Then, the money they get from you becomes reserve money to increase the amount they can loan out. Money, that previously didn’t exist.

    What if you asked to borrow a hammer from me? Instead of an actual hammer, I gave you a piece of paper that says I loaned you a hammer and you owe one hammer to me in return, plus some nails? That’s exactly what the banks are doing right now. That’s why they fell apart in 2007. They made out loans to people who couldn’t pay them back, then the money supply and the debt fell out of balance.

    This is why we have the Federal Reserve Act and the 16th Amendment. They needed these two pieces of law to support their monetary model. The Federal Reserve is funded from the income tax created by the 16th Amendment, which is used to supply banks with enough reserve to make loans. It’s a cycle of perpetual growth and as we know, the resources of this planet are finite. So infinite perpetual growth will only serve to rape the earth of its wealth and leave us nothing.

    It doesn’t have to be this way though. Banks that don’t use FRB and don’t use interest can exist. "Land Labor Capital" (or JAK banks for the Swedes) banks have a 1:1 reserve and don’t charge interest. The way they make loans possible is by requiring any loan applicant to have money deposited in the bank. Thus, if you want to borrow money, you need to contribute to the supply. You earn credits over time depending on how much money you have deposited in savings. The more money you save and the longer you keep it there, the more credits you earn. When you earn enough savings credits, you can apply for a loan. This is contingent on credit approval of course. Now, the amount of money coming into the bank is more balanced with amount going out and if it’s not, they can’t make loans until some of the borrowers pay back their loans.

    Since they don’t charge interest, the bank is a public servant rather than a private service that’s out for profit. That means the operational costs need to be covered another way. Were these banks nationalized and tax funded, that would take care of that. Yeah, I know "Let the government run the banks ?!? That’s unpossible!!" Well, the private sector certainly has done a great job haven’t they? Any system that involves human beings is flawed, but this is the least flawed when compared to what we have now.


  12. 0
    Neeneko says:

    I am familiar with fractional reserve banking, I am not sure you are.  Fractional reserve means they keep some of the deposists as liquid assetts (non-investible) and loan the remainder of it out.  So deposits and such are exactly what is being loaned out.   Now, I agree this can lead to currency being counted in multiple places and thus creating the illusion of there being more currency in circulation then there is (the standard money multiplier effect), but this is not a flaw with fractional reserve banking since the alternative would be to either hoard it all (no loans at all) or loan it all (no reserves)… the former would indeed negate the effect but also negate the economy and the latter would cause the effect to be greater.

    This is also why something like the fed is important because it does track this effect and compensates for it, while individual banks only have thier worm-level perspective.

    And yes, I am also familiar with the federal reserve act.  I am also familiar with how volitile things could be without oversight.   Even the worst of the collapses were nothing compared to earlier problems and can still be seen in modern countries that do not have oversight but do still have robber barrons.  Even within your own arguments, it is the Fed that keeps money multiplication in check, otherwise the banks would do as much as they please with nothing backing them.

  13. 0
    greevar says:

    "Banks create money by taking deposits and interest and reinvesting them in loans."

    No, they do not. That is a lie. Not that I’m calling you a liar, but that this particular concept is not true in the least. Banks use fractional reserve banking to loan money that doesn’t exist, which is backed by nothing but the borrower’s promise to pay it back. They do not use depositor money to give out loans. If you compared the amount of printed money to the actual amount of currency in circulation in the US, you’d find there is far more invisible money than printed currency. Interest alone cannot account for such a phenomena. The only way more currency can exist than what is printed, is that banks are creating money that didn’t previously exist. You have been fooled by the colloquial propoganda of banking. Read about fractional reserve banking and revisit your comment. In fact, check out "Money as Debt". It explains it in detail.

    "If you do not increase the money supply along with the expanded economy, bad things happen.  This is one of the reasons we left a fixed system like the gold standard, value was not able to float with the constantly expanding economy making long term loans unstable."

    I didn’t say to not increase the money supply at all. I said not to borrow from the Federal Reserve to do so, which by doing thus would add pre facto interest to the new currency."

    "The federal reserve has overseen economic stability that pre-fed america could have only drempt of."

    The federal reserve has created economic instability that pre-fed america could have only have imagined in their worst nightmares. There, I fixed your comment. You need to understand where the Federal Reserve Act and the 16th Amendment came from before you can claim thusly. Look up The Money Trust, Federal Reserve Act of 1913, and Philander Knox. Cross-reference those terms and I’m sure you’ll find some fairly enlightening information.


  14. 0
    Neeneko says:

    (1) Banks create money by taking deposits and interest and reinvesting them in loans.  Banks take risks in lending out money by needing to pay out people who loaned them money, which includes savings accounts (which are essentially loans).  They risk not being able to meet their obligations.

    (3) If you do not increase the money supply along with the expanded economy, bad things happen.  This is one of the reasons we left a fixed system like the gold standard, value was not able to float with the constantly expanding economy making long term loans unstable.  Gold standard currency couldn’t be trusted.

    (4) The federal reserve has overseen economic stability that pre-fed america could have only drempt of.   Earlier systems, while simpler, where generally very chaotic and easy to manipulate.  Not to say the fed is perfect, but things used to be much worse with no one looking over the economy as a whole.

  15. 0
    greevar says:

    People think I’m insane when I suggest this first one, but:

    1. Eliminate fractional reserve banking and interest. Banks create money out of nothing, without anything to back it. Then, they charge you interest on that non-existent money when you pay it back. You risk your collateral, they risk nothing of value.

    2. Severly cut military spending. They keep us fearful intentionally to legitimize the expenditure and make the military industrial complex rich. Cheney is loving it.

    3. Stop borrowing from the Federal Reserve to increase the money supply. That just tacks on interest before the money even gets circulated.

    4. Abolish the Federal Reserve. They are the governing body that largely perpetuates this farce of a economy. Between the Federal Reserve Act of 1913 and the 16th Amendment (Both were passed at the time. Coincidence? I think not.), they’ve established a system that keeps the American people and its government perpetually in debt.

    5. Improve public education methods, funding, and standards. Include education on running a household budget and planning finacially for the future (i.e. fiscal responsibility and basic monetary theory).

    6. Invest in better internet infrastructure. We are way behind on internet technology and that puts us behind in the global economy.

    Some of these points don’t pertain directly to the US budget but, in their execution,  they can influence the ebb and flow of the American economy in ways that will help the people as well as the budget.


  16. 0
    vellocet says:

    It’s interesting to see the comparison between what Obama’s proposals are versus the Clinton era and Bush era (tax rates, cuts, etc.)


    Morality has always been in decline. As you get older, you notice it. When you were younger, you enjoyed it.

  17. 0
    Neeneko says:

    Where did you find this assumption?  I am not finding it in the ‘behind’ description.

    Though keep in mind, the historical relationship between deficit and growth change according to what the rest of the economy is doing, so there are few ‘always’ historical facts in this case.  That is one of the things that makes economic modeling difficult, it is not context independent.

  18. 0
    deuxhero says:

    We know how to do it alreddy. Just limit growth to inflation+population growth and the deficit is gone in a few years. We don’t need to reinvent the wheel, just kick some politicans in the nuts.


    The "game" also operates under the idea raising taxes increases income. It doesn’t, it’s historical fact.

  19. 0
    Neeneko says:

    While this is a cool idea, I question how accurate an economic model the NYT is using.  Real economic models are frighteningly complex things and are not terribly accessible to work with… and the differences are not ‘well we are off by a few percentage points’ but can result in entirely different, well, results.

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