Buffett Says Federal Debt Poses Risks to Economy (Update1)

[Craftsman]

Source: http://www.bloomberg.com/apps/news?pid=20601087&sid=ay3ayJvt3t3s

Aug. 19 (Bloomberg) -- The U.S. must address the massive amounts of “monetary medicine” that have been pumped into the financial system and now pose threats to the world’s largest economy and its currency, billionaire Warren Buffett said.

The “gusher of federal money” has rescued the financial system and the U.S. economy is now on a slow path to recovery, Buffett wrote in a New York Times commentary yesterday. While he applauds measures adopted by the Federal Reserve and officials from the Bush and Obama administrations, Buffett says the U.S. is fiscally in “uncharted territory.”

The government is trying to spark business and consumer spending through a $787 billion stimulus plan spanning tax cuts and infrastructure projects, while the Treasury and the Fed have spent billions more on separate programs to rescue financial institutions and resuscitate the banking system. The U.S. budget deficit is forecast to reach a record $1.841 trillion in the year that ends Sept. 30.

“Enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects,” Buffett, 78, said. “For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.”


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=ay3ayJvt3t3s

[Demit]

1. Buffett is one of the high-profile types who disapproved of Bush's tax cuts for the wealthy, right?

He says in this article, “With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required." Hope he gets quoted on what's the best way the gov't can get back some of those receipts...

[tomm2thumbs]

2. he's drinking the Wall Street kool-aid, and it flows in abundance spiked with $$$$$

[Historic NY]

3. He actually gave away 37 billion.

http://news.bbc.co.uk/2/hi/business/5115920.stm

[JDPriestly]

7. Philanthropy looks wonderful. It has a dark side.

In exchange for their "generosity," philanthropists gain immense power over society.

Think of what the Annenberg millions have done to veer the political discourse in our country rightward. Think about what the mega-donations to mega-churches have done to empower folks like Pat Robinson.

Take a education. Bill Gates did not turn into a computer genius all by himself. He attended a private school to which wealthy parents and donors had given the money to buy a computer. Most kids born in the mid-50s did not find out what a computer was until many, many years later.

My eyes were opened to the truth about philanthropy when I worked as a fundraiser in the nonprofit sector. The generosity of the rich is purposeful -- and like everything else the rich do -- ultimately motivated by self-interest. Sorry to be so cynical, but I saw this up close and personal.

The wealthy hob-nob with their kind. Our tax policy is building an aristocracy, a class of wealthy heirs.

Let us remember that the first thing that our Founding Fathers did was to abolish primogeniture. Our laws no longer favor inheritance by the first-born son in a family. It's no longer first-born-take-all. But the children of wealthy families definitely enjoy enormous advantages from the moment of birth to the moment of death. Jefferson and Adams would be horrified. Class differences, even slavery were tolerated, but the kind of aristocracy, the kind of leisure class, that is emerging in the U.S. would not be. The ideal was the gentleman farmer, a landowner who worked every day.

[No Elephants]

9. Buffet's expertise, smarts and jaw dropping success, combined with his morality, gave him all the

power over society that any one man could want. All he had to do was open his mouth and say something and everyone thought they's heard straight from the Oracle at Delphi. That will hold true if he gives away all his money, but will probably be "truer" if he had remained one of the richest men in the world.

Although he made tons of money, he has always lived frugally, all his life. He still lives in the same modest house where he lived forty or fifty years ago. He set up some foundations and gave his kids jobs in them, but his kids are not rich because he does not believe in "generational" wealth. I think he even made his kids earn their own college money, tho' I can't swear to that..

He softened his policy or principles with his grandkids, giving them college tuition. One of his granddaughters was on TV, saying how that was it, no car, no allowance, no job, no nuttin'. At the time, she was totally supporting herself by working as a nanny.

He met Bill Gates and his wife some years ago. He decided they were "better at philanthropy than he is, so he decided to give the bulk of his money to their foundatons, though he still has a couple of small ones that employ his kids. And he will leave them something, but nothing like what he gave the Gates foundation. I don't think he reserved any rights to direct how the Gates used his gift.

In other words, he ain't like most people when it comes to money and philanthropy, to say the least. I don't think you can make the standard assumptions about what he does with his money and why and expect to be correct.

[Psephos]

17. excellent post

I've seen both Gates and Buffet casually and ignorantly vilified on threads here for a long time. While I'm sure they both do things like leave the toilet seat up and let dishes pile up in the sink, they're both exemplars of what wealth can accomplish when controlled by those who understand that becoming rich obliges responsibility and charity.

There are plenty of rich assholes who don't get it. I'm glad you set the record straight on one who does.

[JDPriestly]

18. I'm vilifying philanthropy in general.

Wealthy philanthropy give money for those sweet projects like giving computers to kids. Oh, they are so clever. Try raising money to feed and clothe and shelter mostly adult homeless male African-Americans. These wealthy people are not interested. There is no glamor in feeding and clothing and sheltering homeless grown-ups who have drug addictions, are alcoholics, suffer from mental illness or have prison records.

Because I know first hand just how hard it is to get rich people to give to the least among us, to those who are not photogenic, cute or full of cheer and hope, I am very sour on philanthropy. Projects are chosen to make the donors feel good. It feels really nice for a rich American capitalist to give multi-millions to fight a disease in Africa. But that same man will not give that same sum to feed and house and clothe poor Americans.

Most philanthropy is a vanity game. Sorry. That is my experience.

[Psephos]

19. JD, I have to part company with you on this one

Don't let the perfect be the enemy of the good here.

Rich people giving away money to poor people is a good thing. It could be a better thing, if only....

Just as with everything else.

I appreciate your personal perspective, in any case, although my own experiences have been somewhat different. :)

[cbdo2007]

20. You're expecting one person to save everyone.

If he gave money go clothe the poor, you'd get mad that he didnt help someone else. Then if he helped them, you'd get mad cause he didn't help someone else. and on and on and on and on for eternity.

He's helped tens of millions of people in a positive way. If your problem is that he didn't do enough, it's your problem...not his.

[JDPriestly]

21. I want people to pay taxes and to allow the representatives of the

people to decide where money for helping people should go. Homeless projects are either mostly funded by religious groups who use them as proselytizing tools or by the government. Very rarely do wealthy philanthropists assist homeless projects to and adequate extent, and when they do, they mostly assist those that proselytize. I have a friend who has organized a homeless project for young people that is well supported. But when you start asking for money for adult, mostly minority males with serious problems, you run into a lot of resistance from wealthy people who donate to shore up their image and make themselves appear less greedy.

[curlyred]

4. Was Buffett complaining last year? Or the year before?

Or the year before that? The roots of this deficit are REPUBLICAN and have been building every year for the last 8 years. Didn't seem to bother anyone then.

[Raster]

5. Thanks Warren, for those words of wisdom. Let's eradicate those risks by re-instituting

a progressive income tax, and abolish the Raygun tax cuts for the rich.

And while we're at it, let remove the Medicare AND Social Security caps while we're at it.

Oh, and Warren, what do you think about legislation specifically prohibiting rich motherfuckers from bribing Congress to grant rich motherfuckers privileged tax status? Thoughts...?

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.” Warren Buffett NYT 11-26-2006.

[Craftsman]

6. I hate to be the one that tells you this

But if you get rid of all of those tax cut you can kiss the dem majority goodbye. In this economy with so many families struggling a tax increase is a poison pill in 2010.

[JDPriestly]

8. Taxes should be raised on the wealthy. There is plenty of room for that.

[Craftsman]

10. To overcome the deficit we now have it will take taxes on us all

and when you have an economy base on 70% consumer spending that is going to hurt.

[Raster]

12. I am thrilled to tell you this: The Raygun tax cuts by-and-large benefitted those

well above the "middle class." Oh there was a bone thrown here and there for us little folk, but the vast majority of the tax cuts went to THE RICH. Raygun began the unholy transfer of public wealth to the uber-rich we are seeing today.

[caseymoz]

11. No, Wall Street Traders and derivatives are a threat to the economy

And, unfortunately, a great part of the national debt is from rescuing these people so they could continue to threaten the economy.

You talk about mis-direction.

[Craftsman]

13. Agreed

[Festivito]

14. Two-word quotes in large sentences by author. Dubious.

Made to sound like he would be castigating Obama a bit to the RW reader.

[and-justice-for-all]

15. Since Bush started with the $1trillion deficit he left us...

which ruined everything Clinton did to build a surplus, I am not at all concerned with the deficit. Can it ever be paid back? I leaning towards NO.

We will ride this deficit well into the future and it will take several administrations, if they even worry about it, to get it resolved. If there is public option, it will more then pay for its self in the long run and it might even help pay down the deficit.

They really need to tax the rich more, after all, they live here too and need to contribute more to society instead of bleeding us dry and hording all reward.

[Name removed]

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