The Glade 4.0

I don't know about Lawyers but 66% of the Senate are millionaires and 41% of Congress:
http://www.cbsnews.com/news/why-is-cong ... ires-club/

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I'd be opposed to that. As nice as that sounds, it ties their hands in the event of an emergency. I recognize that defining "emergency" is part of the problem. Still.

Bad money habits never make your economy better. Sooner or later, you guys are going to get past the credit delusion and start cycling toward sound fiscal behavior and responsible monetary policy; and, if you don't, well the proof is in the pudding on the value of public education, isn't it?

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You build in the definition of "emergency".

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

You're suggesting that spending in the case of an emergency is bad economic policy?

Well, ok, but that ignores all manner of reality and practicality. It's cool that you're a teacher. Teach how things should be in an ideal sense, and let others deal with the real world.

Call me cynical, but it's just going to create emergencies. "We need to increase spending. Quick, create an emergency!"

Spending money you don't have and leveraging future incomes against immediate needs is always bad economic policy. Incidentally, I find it terribly amusing that you're quibbling with Diamondeye over the need to define emergencies for one of the biggest reasons Emergency Spending Bills are disastrous.

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Only if you consider the small picture. Making bad economic decisions from time to time can be good for the country. Get your head out of the books. Look around. We don't live in a controlled experiment. An easy example: disaster relief. Disaster relief promotes stability, which is good for the economy. Even if the economic benefits do not outweigh the damage associated with the deficit spending, it still makes sense typically to do this. Why? The reality that hungry, hurting people are destabilizing AND the fact that the American People will not tolerate anything else. So, bad economics or not, it needs to happen.

It would be nice to include provisions for such actions in the budget. However, you cannot plan for every contingency. Thus, allowance for emergencies must be made.



You need to learn a better definition of "quibbling".

Arathain:

It doesn't need to happen. In point of fact, it probably shouldn't happen at all, as all that emergency relief funding does is obligate people to debt they can't actually afford. You say get my head out of the books, you might want to put yours in a few and read how this stuff works. I'm not arguing for idealism, I'm arguing against the systemic and structural flaws in our current economic and monetary policy; and, amazingly, they generally don't start with the Fed. They start with how Capitol Hall accounts for a given fiscal year and their adherence to zero-sum budgeting (which trickles down to every government agency in the country).

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Yep, that sure would be great!

Arathain:

You are aware that the vast majority of FEMA or disaster relief monies are loans or loan options that would make the sub-prime credit market look sane, yes? Never mind the other side of the problem, which is all of our governments are required by Federal regulation to spend out a given year's revenues in that given year and use zero-sum money management practices; hence all the Deficit Hawks and the complaints about the Deficit in general.

Tell me, when does your employer bank their 2014 payroll?

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Hurricane Katrina's damage tally was greater than Mississippi's annual GDP and was over half of Lousiana's annual GDP. How exactly are they supposed to raise enough money to pay for stuff like this without help from the federal government?

You'll have to show your work on this one. Funds are spent on immediate needs, grants, and longer term loans for individuals. For public facilities, it is typically grants with a match. Remaining funds are typically spent on hazard mitigation for future reduction of disaster needs. How funds are expended depends on the event, and it can vary wildly. Provide your basis for "the vast majority" is loans.

Beyond that, though, I don't really see the relevance of your question.



I don't really see the relevance of your question. But I would definitely be interested to know how the date my employer banks their payroll affects the reality that emergencies happen and must be dealt with.

If you're just going to rely on cynicism to render problems unsolvable, then there's no point in exploring solutions. So yes, I'll call you cynical.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Arathain:

When your employer banks their bankroll most likely, because I'm assuming they're a pretty stable business, is a simple data point that highlights the problem with government accounting and fiscal practices at all levels. 2012 Revenues should be used to pay 2013 payroll and probably are. Most of the private sector banks the following years payroll before they start counting profits and stashing improvement monies and re-investment funds. In government, that doesn't actually happen. Zero-sum accounting means you have to liquidate all of your appropriations and capital by the end of that fiscal year, because governments are appropriations controlled. Government finance gets complicated and makes no sense to the average Joe, because government finance is not anything like the finance most people encounter. Even giant multi-nationals carry balances across fiscal years, hold free capital to hedge against emergencies, and have liquid assets they can mobilize to deal with the unexpected. Our governments, at least in the United States, do not. Government agencies particularly do not. In fact, the reason payroll is always leveraged against a fiscal difficulty with our government agencies: it's the easiest line item to cut, because it involves the fewest creditors or vendors.

As for how disaster relief monies work, those grants are underwritten by bonds which are consigned to the appropriate government entity or agency after the funds are generated. The federal government typically borrows the grant money to for liquidity purposes, but doesn't actually have the money stashed or saved anywhere. Most of it doesn't come out of revenues or from actual revenue generating streams. Our government finances aren't set up properly for such things to happen.

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They wouldn't have to raise money to deal with disasters if they were not dependent on Federal appropriations of money to pay their bills. Again, Zero-Sum accounting and government finance practices are irrational, detrimental, and bad. They can't save money; they can't hold surpluses in most cases; and if they can hold surpluses, there are all sorts of federal rules as to how that money can be spent.

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Ok, great. However, this doesn't impact what I've said at all. If you'd like to restructure HOW they pay for emergencies, have at it. But the simple reality is that they must. Another reality is that despite the best planning, there will be emergencies that exceed the emergency budget, and drop the government into the red (at least for that line item). If no emergency ever exceeds the budget, they're probably budgeting too much for emergencies.

Arathain:

You shouldn't be budgeting for emergencies; you should be budgeting for savings, just like an average household should be budgeting for savings. You don't save because you're afraid you'll run into problems; you save because you will sooner or later run into problems you do not have the immediate cash flow to solve.

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Don't budget for emergencies, budget savings for unanticipated "problems you don't have the immediate cash flow to solve".

Ok....

Arathain:

You don't budget for emergencies. You budget for savings. Budgeting for emergencies means, in this lovely zero-sum game of government accounting, that when you are not going to spend that money by the end of your accounting year, you re-allocate it to your operating expenses and spend it like birthday money. Government finance is arcane.

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No, you're still missing the scope of the problem. Even if Lousiana were to double its current income tax rate, set aside all the additional revenue for hurricane relief/fixing hurricane damage, and their economy was completely unaffected by the extra taxes, it would still take over fifty years for them to have enough money to afford a Hurricane Katrina. It's just not realistically possible for them to cope with major disasters of that scope without federal assistance.

What does that say about living there?

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Sure. Which is why I think it's necessary to hold their staff's payroll accountable, too. Yeah, Joe Elected is a millionaire, and doesn't *really* care about his Congressional paycheck.

But the guy writing his speeches, the guy scheduling his speaking dates, the guy reading his mail, and the guy recommending policy stances sure as hell aren't millionaires.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

That it's only smart if you're getting the rest of the country to pay for your "unexpected" expenses when they crop up!

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades