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Thread: The Next Enron

  1. #1

    The Next Enron

    http://www.washingtonpost.com/wp-dyn...041201726.html
    The cover letter in the report from Treasury Secretary John Snow contains the bad news. Whereas the budget deficit for fiscal 2005 was officially given as $319 billion, "the government's accrual-based net operating cost . . . was $760 billion in 2005."

    [...]

    The U.S. government has been running up bills -- notably the promises of pensions and health-care benefits for military veterans and millions of other retirees -- without putting the obligations on the books.

    That is what is really scary about the financial report. It contains page after page of graphs showing the probable future course of income and expenditures for Social Security and Medicare. In each chart, the dotted line for spending climbs far faster than the solid line for revenue. Beginning a decade from now, the shortfalls explode in what Cooper calls "a perfect storm" of fiscal ruin.
    Enron swindled investors by hiding expenses until they couldn't anymore, then the company collapsed. What's going to happen when the U.S. government collapses?

  2. #2
    Cyburbian hilldweller's avatar
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    The neoconservatives will all feel satisfied that they have accomplished their mission in destroying govt. to make America a better place for the ultra-wealthy.

  3. #3
    Cyburbian jread's avatar
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    Quote Originally posted by jaws
    What's going to happen when the U.S. government collapses?
    I'm going to get the hell out of here. Maybe I'll be a sheep farmer in New Zealand.
    "I don't suffer from insanity... I enjoy every single minute of it!"

  4. #4
    Cyburbian nerudite's avatar
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    I'll move to Canada... oh wait, too late.

  5. #5
    Cyburbian imaplanner's avatar
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    I would forego my opposition and buy a gun!

  6. #6
    Cyburbian illinoisplanner's avatar
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    Which is why we need to get rid of Social Security ASAP, get rid of the illegals, and completely analyze and redo Medicare.
    "Life's a journey, not a destination"
    -Steven Tyler

  7. #7
    Cyburbian Zoning Goddess's avatar
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    Quote Originally posted by imaplanner
    I would forego my opposition and buy a gun!
    I'm screwed; I just sold mine!

  8. #8
    Quote Originally posted by illinoisplanner
    Which is why we need to get rid of Social Security ASAP, get rid of the illegals, and completely analyze and redo Medicare.
    Who is "we"?

  9. #9
    Member Wulf9's avatar
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    Look at the Soviet Union somewhere around 1990. They had fought a wasting war in the Middle East. They were going deep into debt buying weapons and supporting a bloated military budget. A small cadre of elite party members ran the country with a one party government that rigged elections. Bribery and corruption were rampant.

  10. #10
    Cyburbian jordanb's avatar
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    illinoisplanner: If you get rid of social security you get rid of FICA. Currently, the FICA system collects more money than it pays out. That money is often raided to pay for unrelated things, meaning the loss of FICA will mean that the deficit will go up FASTER. Or are you suggesting ending the retirement insurance system but then increasing taxes to make up for the lost of FICA?

    The Federal Government is a soverign power and will not "disappear" because of financial issues. There would (will?), however, be grave consequences for our economy if (when) it is forced to repudiate its loans.
    Reality does not conform to your ideology.
    http://neighborhoods.chicago.il.us Photographs of Life in the Neighborhoods of Chicago
    http://hafd.org/~jordanb/ Pretentious Weblog.

  11. #11
    Cyburbian njm's avatar
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    Actually I believe he's just spouting rhetoric. Getting rid of illegals will cost this country because the labor force will shrink, driving wages up.

    Re-building medicare, medicaid, and social security may cost more in the long run as politicians have never been good at 'slimming anything' and there is enough resistance (and will likely continue to be) to privatizing that these will always be in the hands of the governement. Eliminating social security will either require the re-instatement of corporate pensions (unlikely) or a massive campaign to get families to start saving to take care of their elderly relatives... or [light bulb] maybe we could get the elderly to take the jobs deserted by the illegals![/sarcasm]

    rhetoric is rhetoric and will always have the value of the paper it's printed on, and no more.

    What we need to do is get the American public to start thinking long-range. People need to start saving to supplement the eventual reduction in Social Security benefits.

    The government needs to look long-term. Instead of pillaging state health-care funds (see: MNCare circa last year) to balance budgets, we need to have a government that supports preventative care to avoid the costly bills of sending those on Medicare/Medicaid to the ER when they could have seen a doctor for 10% of the cost 2 weeks earlier.

    And DON'T tell me that doesn't happen. I spent a year working in a homeless shelter. People would go to the nurses all the time and be told that they had no coverage until the condition was acute... so they waited.

    The worst part is that Minnesota has a good health care system (both private and public-assistance.) I shudder to think what it's like in most other states.
    What luck! A random assemblage of words never sounded less intelligent.

  12. #12
    Cyburbian jread's avatar
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    Quote Originally posted by Wulf9
    Look at the Soviet Union somewhere around 1990. They had fought a wasting war in the Middle East. They were going deep into debt buying weapons and supporting a bloated military budget. A small cadre of elite party members ran the country with a one party government that rigged elections. Bribery and corruption were rampant.
    You could change that to "United States" and "2006", and all of it would be true
    "I don't suffer from insanity... I enjoy every single minute of it!"

  13. #13

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    Quote Originally posted by jread
    You could change that to "United States" and "2006", and all of it would be true
    This is one of the most fascinating analyses/thought exercises I have read about this issue. Is it ALL "true" and prophetic? Of course not. Nonetheless, it's an interesting comparison between post-imperial Russia and soon-to-be-post-imperial United States. We do not necessarily do better in this comparison, according to this writer.

    Note, I'm not claiming this site is 100% believable. No media source is. Nonetheless, when you have time, check it out.

    http://www.fromthewilderness.com/fre..._lessons.shtml

  14. #14
    Cyburbian biscuit's avatar
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    Quote Originally posted by jaws

    Enron swindled investors by hiding expenses until they couldn't anymore, then the company collapsed. What's going to happen when the U.S. government collapses?
    Well, just think of it as clearing the way for privatization. I'd have thought you'd be thrilled at the prospect.

  15. #15
    Cyburbian
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    The comparisons between the US and the USSR is quite interesting... will this be the dawn of a new multipolar world (politically speaking), or will the UE replace the US as the political unipolar empire of the world?

    I guess that my teacher is right when he says that military empires are shortlived.... too bad for the US.

  16. #16
    Quote Originally posted by biscuit
    Well, just think of it as clearing the way for privatization. I'd have thought you'd be thrilled at the prospect.
    The U.S. government doesn't really have anything valuable to privatize. How big is the market for secondhand aircraft carriers and nuclear subs?

  17. #17
    Cyburbia Administrator Dan's avatar
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    Plannergirl and the other Cyburbian MOTs - aliyah?

  18. #18
    Cyburbian Plus PlannerGirl's avatar
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    Nope not me the red hair would make me stick out like a tumb, I will visit but no right of return for me. I dont think the US econ is as grim and bad as some would make us think but I do think Americans as a whole need to get on the savings wagon.
    "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." Ben Franklin

    Remember this motto to live by: "Life should NOT be a journey to the grave with the intention of arriving safely in an attractive well preserved body, but rather to skid in sideways, chocolate in one hand, martini in the other, body thoroughly used up, totally worn out and screaming 'WOO- HOO what a ride!'"

  19. #19
    Gunfighter Mastiff's avatar
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    Quote Originally posted by nerudite
    I'll move to Canada... oh wait, too late.
    When the US runs out of resources, they'll come take them from Canada.
    -----------------------------------------------------------------
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  20. #20
    Cyburbian imaplanner's avatar
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    Quote Originally posted by jaws
    How big is the market for secondhand aircraft carriers and nuclear subs?
    I'm thinking pretty big actually.

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