Deficit Denial?

[eflatminor]

Actually, what I'm saying is this.

Raise taxes and funding to services - while using more progressive tax brackets.

We already have the most progressive tax structure in the world, meaning our rich pay a higher percentage of the overall tax burden than in any other country.

That's technically true, but misleading. When talking about redistributive taxation(simply, reducing inequality) we're nowhere near the top.

Good gawd, another one that thinks wealth is finite, a pie to be divided up...

Just because a fat man is standing next to a skinny man doesn't mean the fat man took the skinny man's food.

 

[SFC Ollie]

Face it, you cannot tax enough to handle the deficit let alone start lowering the debt. We have to cut spending.

The military has already done part of it for you. They gave me a COLA raise this year and then took back double the raise in what my Prescriptions will cost me... Thank you taxpayers..... All you had to do was ask and I'd have given up 10%, as long as all the other federal checks were cut by the same 10%....

 

[Toddsterpatriot]

Or we could raise taxes and spending. Private markets create inequality and, within current conditions, strategic use of the government is a good way to solve that.

No.....

Okay leaving it up to the invisible forces of markets - a.k.a. the very visible forces of the rich - is a way to solve our economic problems. Because if Austrian pseudo-economists paid by the heritage foundation say it, it's a-okay by me!

Kill the greedy kulaks, eh comrade?

 

[Blooper]

We already have the most progressive tax structure in the world, meaning our rich pay a higher percentage of the overall tax burden than in any other country.

That's technically true, but misleading. When talking about redistributive taxation(simply, reducing inequality) we're nowhere near the top.

Good gawd, another one that thinks wealth is finite, a pie to be divided up...

Just because a fat man is standing next to a skinny man doesn't mean the fat man took the skinny man's food.

Cute rhetoric, but practical application makes it largely irrelevant.

Is it not troubling to you that we're developing a class that controls the well being of another?

 

[ReallyMeow]

Face it, you cannot tax enough to handle the deficit let alone start lowering the debt. We have to cut spending.

No, firing people is the opposite of recovery. Contrary to popular belief, the govt does do things for you:

The problem isnt that we spend too much on the elderly.

 

[Toddsterpatriot]

Face it, you cannot tax enough to handle the deficit let alone start lowering the debt. We have to cut spending.

No, firing people is the opposite of recovery. Contrary to popular belief, the govt does do things for you:

You're right. Obama needs to hire half the unemployed to dig holes. And the other half to fill them in.

We'll all be rich!!! What could go wrong?

 

[Blooper]

Face it, you cannot tax enough to handle the deficit let alone start lowering the debt. We have to cut spending.

No, firing people is the opposite of recovery. Contrary to popular belief, the govt does do things for you:

You're right. Obama needs to hire half the unemployed to dig holes. And the other half to fill them in.

We'll all be rich!!! What could go wrong?

I know that was a joke, but it sounds a whole lot like the new deal.

 

[ReallyMeow]

Face it, you cannot tax enough to handle the deficit let alone start lowering the debt. We have to cut spending.

No, firing people is the opposite of recovery. Contrary to popular belief, the govt does do things for you:

You're right. Obama needs to hire half the unemployed to dig holes. And the other half to fill them in.
We'll all be rich!!! What could go wrong?

Heres a wacky idea, maybe if instead of hiring people to do busy work, we hired them to do things like cure diseases, solve our energy problems or even maintain our bridges.

 

[Blooper]

No, firing people is the opposite of recovery. Contrary to popular belief, the govt does do things for you:

You're right. Obama needs to hire half the unemployed to dig holes. And the other half to fill them in.
We'll all be rich!!! What could go wrong?

Heres a wacky idea, maybe if instead of hiring people to do busy work, we hired them to do things like cure diseases, solve our energy problems or even maintain our bridges.

It really bugs me when a jobs guarantee program stays out of the public eye. Such a great idea, with very little recognition.

 

[Underhill]

Really, we've got 16,000 billionaires we can take a Billion a piece from?

I think he means they can pay enough to balance the budget and even pay down the debt a bit. And he's right.

Actually, he's wrong.

The net worth of America's billionaires is about $1.7 trillion (just over 400 billionaires with an average net worth of $4.2 billion). You'd have to CONFISCATE their assets to balance the deficit, with little left over to address the skyrocketing debt. In other words, you could tax their income at 100% (and assume they'd keep working) and you couldn't come close to covering this year's deficit.

We aren't talking about billionaires, but those over $250k. And we aren't talking about taking all their money clearly.

And I realize that alone isn't enough. But with moderate and reasonable cuts it could certainly be.

The question I have is this. What is the alternative?

We can only cut programs so far. People have needs whether we like it or not. And cuts mean more unemployment (which accounts for much of the reason the economy hasn't sprung back, as states have been cutting left and right).

And taxing everyone sounds good. But half the country don't make enough to hit harder with more taxes. Even that next 40% will struggle with incomes of 75-150k (who are already paying a higher (affective) rate than those in the top brackets).

So that leaves us with few options. Moderate cuts (10% or less) to programs. And taxing the higher income brackets. Cutting the military is a popular option too, among some. But it has many of the same side affects as cutting social programs.

 

[editec]

Are you concerned about never-ending trillion dollar deficits? If so, what can or should be done about them? Given our demographic trends, the current debates about taxes and spending reforms are almost laughably inadequate to address the enormity of our impending liabilities. In coming years, we may look back at a deficit of only a trillion dollars with nostalgic fondness.

So what are we to do, if anything? It seems to me that economic growth (jobs) can only take us so far, and rest will result in a massive (30-50%) reduction in our purchasing power. Any thoughts?

Jwoodie, do you believe that the government is printing FIAT money?

If you do then you must also accept the fact that the DEBT is equally worthless.

That's pretty much where I'm at.

 

[ReallyMeow]

94% is a perfectly reasonable rate to set the upper level of income to, over say a million dollars, we did it after ww2, we can do it again now.

It doesnt need to pay off the whole debt in one year, taxing the rich more is just the difference between making the minimum payment on a credit card and putting in a little overtime to get the finances in order.

 

[eflatminor]

I think he means they can pay enough to balance the budget and even pay down the debt a bit. And he's right.

Actually, he's wrong.

The net worth of America's billionaires is about $1.7 trillion (just over 400 billionaires with an average net worth of $4.2 billion). You'd have to CONFISCATE their assets to balance the deficit, with little left over to address the skyrocketing debt. In other words, you could tax their income at 100% (and assume they'd keep working) and you couldn't come close to covering this year's deficit.

We aren't talking about billionaires, but those over $250k. And we aren't talking about taking all their money clearly.

Billionaires is exactly what we were talking about. SFC Ollie wrote, rather sarcastically, "Really, we've got 16,000 billionaires we can take a Billion a piece from?"

You responded "they can pay enough to balance the budget"

Again, no they can't, not unless you're talking about confiscation of assets.

Now, if you're talking about the top 1% of income earners, the income figure to get into that percentile is not $250,000 but more like $343,000. Whatever the figure is, it ain't billionaires, which is what was referenced.

And I realize that alone isn't enough. But with moderate and reasonable cuts it could certainly be.

I disagree. Raising tax rates even higher on high income earners (however determined) will not likely result in more tax revenue but less. Capital for new and smaller businesses, the traditional driver of jobs, is already sitting on the sidelines. Higher taxes won't help. We'd see more capital and more jobs go overseas and even less growth here.

You cannot tax your way out of this kind of spending. No way.

The question I have is this. What is the alternative?

Living within our means. We take in plenty of tax revenue. Stop spending what we don't have.

We can only cut programs so far. People have needs whether we like it or not.

Needs they managed in the past without stealing from others. Just because somebody got on the dole doesn't mean they must remain there. Besides, we don't have to cut people off today but we can certainly phase out these ridiculous entitlement programs that ultimately do more harm than good. For example, since 1970, when we started spending heavily on entitlements, the rate of poverty is UP. We've done more harm than good!

And yes, we can spend less on military by refocusing our boys to protect our borders, our airspace, and international waters.

And taxing everyone sounds good.

No, it sounds really bad.

So that leaves us with few options.

Only if you find the current level of entitlement spending anything close to acceptable. You'll NOT get the revenue from higher income earners and continuing to borrow from the future to support our largess is not only immoral, it will eventually crash the entire system, as every culture in history that has gone down this path experienced.

 

[eflatminor]

That's technically true, but misleading. When talking about redistributive taxation(simply, reducing inequality) we're nowhere near the top.

Good gawd, another one that thinks wealth is finite, a pie to be divided up...

Just because a fat man is standing next to a skinny man doesn't mean the fat man took the skinny man's food.

Cute rhetoric, but practical application makes it largely irrelevant.

Why? Because you say so?

Is it not troubling to you that we're developing a class that controls the well being of another?

The only group that can control a "class" of citizens is government. And yes, that bothers me. So please, stop supporting the epidemic of nanny state meddlers, central planners, and cronyism in our society. Rich people are a byproduct of a free and successful society. They're not the problem to poverty, which is hardly a problem at all in America when you consider our poorest citizens rank in the 84th percentile (if I remember the figure correctly) of world wide wealth. Our "poor" own more assets than the rich did just a few decades ago. Nobody is starving here. Of course, every society will have a few mindless drones walking into walls...they are charity cases, but normal folks in the country do not know true poverty. I've lived in Africa. THAT'S true poverty.

Point is, please stop blaming successful people, generally the job creators, for the rate of poverty, however defined, in this country. Blame the central planners that are just sure government must provide charity. Blame the nanny staters that are just sure they know what's best for everyone else. Blame the breakdown of the family and all the men that walk out on their children. Whatever. But please, don't blame hard working, successful people.

 

[Underhill]

Actually, he's wrong.

The net worth of America's billionaires is about $1.7 trillion (just over 400 billionaires with an average net worth of $4.2 billion). You'd have to CONFISCATE their assets to balance the deficit, with little left over to address the skyrocketing debt. In other words, you could tax their income at 100% (and assume they'd keep working) and you couldn't come close to covering this year's deficit.

We aren't talking about billionaires, but those over $250k. And we aren't talking about taking all their money clearly.

Billionaires is exactly what we were talking about. SFC Ollie wrote, rather sarcastically, "Really, we've got 16,000 billionaires we can take a Billion a piece from?"

You responded "they can pay enough to balance the budget"

Yes, except you missed the post before his. He wasn't talking specifically about billionaires but the wealthy.

Again, no they can't, not unless you're talking about confiscation of assets.

Now, if you're talking about the top 1% of income earners, the income figure to get into that percentile is not $250,000 but more like $343,000. Whatever the figure is, it ain't billionaires, which is what was referenced.

I'm not talking about specific brackets, more a question of who is paying how much. Above a certain point (and it varies depending on location, cost of living and the effort put into it by the tax payer) people have more disposable income. These tend to be the people who negotiate loopholes and pay significantly less.

I mentioned the top 2% because that is the point at which their really is no arguing, they are wealthy.

And yes they can. This year we are on track to run about a 1 trillion dollar deficit, with the cuts already in place. If we continue to cut to the tune of about 10% overall (10% of our 4 Trillion in spending being roughly 400 billion) we would be short roughly 600billion.

The top 10% made 1.7 Trillion in 2010. At a 36% actual rate, the deficit would be gone (36% of 1.7 Trillion being 612 Billion).

There is a bit more to it than that but clearly is could be done.

I disagree. Raising tax rates even higher on high income earners (however determined) will not likely result in more tax revenue but less. Capital for new and smaller businesses, the traditional driver of jobs, is already sitting on the sidelines. Higher taxes won't help. We'd see more capital and more jobs go overseas and even less growth here.

You cannot tax your way out of this kind of spending. No way.

History disagrees with you. But I agree that taxes alone aren't the answer. I never said it was. Look back at every one of my post and I've said spending needs to be cut too.

Living within our means. We take in plenty of tax revenue. Stop spending what we don't have.

Sounds good. That's what everyone says. I even agree. But a few issues.

First, look at history. In the 1970's the top tax rates were vastly higher. Double what they are today. In the mid 80's we cut taxes by almost half on the upper class. (we also lost a lot of revenue from tariffs).

And we started running up deficits and haven't stopped since. So the notion that this is entirely a spending problem is shit.

Needs they managed in the past without stealing from others. Just because somebody got on the dole doesn't mean they must remain there. Besides, we don't have to cut people off today but we can certainly phase out these ridiculous entitlement programs that ultimately do more harm than good. For example, since 1970, when we started spending heavily on entitlements, the rate of poverty is UP. We've done more harm than good!

Yep and it has been done. In NY State (one of the most liberal states in the union) we have tried just that. We make our people on social services work for the county after 3 months (with the exception of single moms). It hasn't seemed to help.

Everyone talks about getting people off the dole, but it isn't nearly as easy as people think. It cost money to put them to work. Training, supervision.... every estimate I've seen says the program cost us money and not saved us a dime.

Only if you find the current level of entitlement spending anything close to acceptable. You'll NOT get the revenue from higher income earners and continuing to borrow from the future to support our largess is not only immoral, it will eventually crash the entire system, as every culture in history that has gone down this path experienced.

Which culture would that be? This is a relatively new model. This is not communism or socialism. It's a hybrid. There are problems, no doubt. But there is no glaring examples of collapse all over the globe.

France, and many other European countries, spends vastly more than we do, and yes they are having problems. But we are no where near their league in social spending.

Where we outspend them by a wide margin is our military spending. And I would say that is immoral and could crush the entire system.

 

[Tambellini]

The debt is so large that it is impossible to pay off, Right now it is at 16.4 trillion dollars and the ceiling has been, or shortly will be, raised to 20 trillion dollars.
If you pay a billion dollars a year (plus the interest) it would take a thousand years to pay back each trillion dollars. That means 16000 years and it is still not paid off.
If you pay 100 billion dollars each year (plus interest) then paying off 16 trillion dollars takes 160 years.
To pay off the national debt in a single presidential term would require paying 4 trillion dollars (plus interest) for each of the four years. The taxes collected last year were less than 3 trillion dollars. That includes Social Security taxes that are separate from income tax.

There is no way it would be paid off in a single term. That much is true.

But the solution to the debt is a relatively simple one. Stop running up more debt (that alone would mean big cuts and tax increases). Pay the interest for the next 20-30 years.

By then inflation (running at roughly 2-4% a year) would nibble away at it until 20 Trillion is worth more like 5 Trillion in todays dollars.

But it would mean being fiscally responsible for 20-30 years, by both parties. The odds on that happening make the lottery a good bet.

They have no desire to bring down the debt and that is both sides of the political spectrum. The govt is too fat with lazy overpaid workers and the military wants their toys.

 

[eflatminor]

We aren't talking about billionaires, but those over $250k. And we aren't talking about taking all their money clearly.

Billionaires is exactly what we were talking about. SFC Ollie wrote, rather sarcastically, "Really, we've got 16,000 billionaires we can take a Billion a piece from?"

You responded "they can pay enough to balance the budget"

Yes, except you missed the post before his. He wasn't talking specifically about billionaires but the wealthy.



I'm not talking about specific brackets, more a question of who is paying how much. Above a certain point (and it varies depending on location, cost of living and the effort put into it by the tax payer) people have more disposable income. These tend to be the people who negotiate loopholes and pay significantly less.

I mentioned the top 2% because that is the point at which their really is no arguing, they are wealthy.

And yes they can. This year we are on track to run about a 1 trillion dollar deficit, with the cuts already in place. If we continue to cut to the tune of about 10% overall (10% of our 4 Trillion in spending being roughly 400 billion) we would be short roughly 600billion.

The top 10% made 1.7 Trillion in 2010. At a 36% actual rate, the deficit would be gone (36% of 1.7 Trillion being 612 Billion).

There is a bit more to it than that but clearly is could be done.



History disagrees with you. But I agree that taxes alone aren't the answer. I never said it was. Look back at every one of my post and I've said spending needs to be cut too.



Sounds good. That's what everyone says. I even agree. But a few issues.

First, look at history. In the 1970's the top tax rates were vastly higher. Double what they are today. In the mid 80's we cut taxes by almost half on the upper class. (we also lost a lot of revenue from tariffs).

And we started running up deficits and haven't stopped since. So the notion that this is entirely a spending problem is shit.

Needs they managed in the past without stealing from others. Just because somebody got on the dole doesn't mean they must remain there. Besides, we don't have to cut people off today but we can certainly phase out these ridiculous entitlement programs that ultimately do more harm than good. For example, since 1970, when we started spending heavily on entitlements, the rate of poverty is UP. We've done more harm than good!

Yep and it has been done. In NY State (one of the most liberal states in the union) we have tried just that. We make our people on social services work for the county after 3 months (with the exception of single moms). It hasn't seemed to help.

Everyone talks about getting people off the dole, but it isn't nearly as easy as people think. It cost money to put them to work. Training, supervision.... every estimate I've seen says the program cost us money and not saved us a dime.

Only if you find the current level of entitlement spending anything close to acceptable. You'll NOT get the revenue from higher income earners and continuing to borrow from the future to support our largess is not only immoral, it will eventually crash the entire system, as every culture in history that has gone down this path experienced.

Which culture would that be? This is a relatively new model. This is not communism or socialism. It's a hybrid. There are problems, no doubt. But there is no glaring examples of collapse all over the globe.

France, and many other European countries, spends vastly more than we do, and yes they are having problems. But we are no where near their league in social spending.

Where we outspend them by a wide margin is our military spending. And I would say that is immoral and could crush the entire system.

So many false assumptions, untruths, and misunderstandings of history. You watch what happens to tax revenues from wealthier citizens in the months ahead. Just like they're experiencing California, France and the UK where revenues are down following tax rate hikes, so shall we see across the nation. And you want to raise rates even higher? No way that will result in anything but even less growth, fewer jobs, and less tax revenue.

And every culture, hybrid or not, that has spent beyond any reasonable measure, spread itself thin militarily and devalued it's currency, just like we're doing, ended up failing, usually following hyperinflation and war. Whatever the specifics, they ALL failed. Of course, nobody thinks it will happen to them, until it does.

Obviously, we are on different planets when it comes to spending, taxes and government meddling. What you advocate I find offensive and immoral. I suspect you feel the same.

But, don't take my word for it. If you care to expand your worldview of these topics, I'd recommend the following:

The Road to Serfdom - Hayek. History about where we're headed...
[ame=http://www.amazon.com/The-Road-Serfdom-Fiftieth-Anniversary/dp/0226320618]The Road to Serfdom: Fiftieth Anniversary Edition: F. A. Hayek, Milton Friedman: 9780226320618: Amazon.com: Books[/ame]


The End of Prosperity - Laffer. History of tax rates and revenue...
[ame=http://www.amazon.com/End-Prosperity-Higher-Economy--If-Happen/dp/B0064XGGVE/ref=sr_1_3?s=books&ie=UTF8&qid=1360257407&sr=1-3&keywords=art+laffer]The End of Prosperity: How Higher Taxes Will Doom the Economy--If We Let It Happen: Arthur B. Laffer, Stephen Moore, Peter Tanous: Amazon.com: Books[/ame]


No They Can't - Stossel. Great overview for beginners as to why free people making voluntary choices always gives superior results to central planing...
[ame=http://www.amazon.com/They-Cant-Government-Fails-But-Individuals/dp/1451640943/ref=sr_1_1?s=books&ie=UTF8&qid=1360257532&sr=1-1&keywords=john+stossel+no+they+can%27t]No, They Can't: Why Government Fails-But Individuals Succeed: John Stossel: 9781451640946: Amazon.com: Books[/ame]

Good to chat with you. Best of luck.

 

[Underhill]

You realize I could post the same types of books taking the opposite tact?

It's clear we aren't going to agree. The funny part is, the only thing I suggested if you actually read my post, is that the rich pay slightly more than the middle classes and that we cut spending as a solution.

And you find that immoral?

Odd.

 

[eflatminor]

You realize I could post the same types of books taking the opposite tact?

Yes, and I have read those books...or similar ones. I've studied all sides of these issues with an open mind. I was simply hoping you might consider the same.

It's clear we aren't going to agree.

Not at this point, no.

The funny part is, the only thing I suggested if you actually read my post, is that the rich pay slightly more than the middle classes

They already pay lots more. Again, we have the most progressive tax structure in the world. My point is attempting to extract even more will not get us more revenue and will harm the economy thereby hurting the very people you're defending.

and that we cut spending as a solution.

There we agree. Please, show me someone, anyone, that is supporting an actual cut in spending...not just a slight decrease in the proposed rate of increased spending.

Personally, I like the Mack Penny plan. Worth a look:

Penny Plan

And you find that immoral?

I find the very idea of taxing a man's labor to be immoral. I find the notion of spending trillions on entitlements over decades, only to have the rate of poverty increase, to be immoral. I believe burdening those yet to be born with the debt from our largess to be immoral. I find the very idea of central planning, and those that are just sure they know what's best for everyone else, to be immoral.

The key, IMO, to avoiding all this immorality can be summed up in one word: voluntary. You want to help poor people? That's great. Just don't steal from others. No matter the cause or how well intentioned the legislation, theft is wrong. Free people making voluntary choices. That's what we should be shooting for whenever and wherever possible.

Anyway, thanks for the chat. All the best.

 

[Underhill]

You realize I could post the same types of books taking the opposite tact?

Yes, and I have read those books...or similar ones. I've studied all sides of these issues with an open mind. I was simply hoping you might consider the same.

It's clear we aren't going to agree.

Not at this point, no.



They already pay lots more. Again, we have the most progressive tax structure in the world. My point is attempting to extract even more will not get us more revenue and will harm the economy thereby hurting the very people you're defending.

and that we cut spending as a solution.

There we agree. Please, show me someone, anyone, that is supporting an actual cut in spending...not just a slight decrease in the proposed rate of increased spending.

Personally, I like the Mack Penny plan. Worth a look:

Penny Plan

And you find that immoral?

I find the very idea of taxing a man's labor to be immoral. I find the notion of spending trillions on entitlements over decades, only to have the rate of poverty increase, to be immoral. I believe burdening those yet to be born with the debt from our largess to be immoral. I find the very idea of central planning, and those that are just sure they know what's best for everyone else, to be immoral.

The key, IMO, to avoiding all this immorality can be summed up in one word: voluntary. You want to help poor people? That's great. Just don't steal from others. No matter the cause or how well intentioned the legislation, theft is wrong. Free people making voluntary choices. That's what we should be shooting for whenever and wherever possible.

Anyway, thanks for the chat. All the best.

I think there was a time when we lived with voluntary charity and no central government control. It was called the dark ages.

I think voluntary giving would mean people dying. Something I find immoral.

Our government system is imperfect, no question. And nobody likes taxes. But the idea that taxes are immoral... far fetched. And that is being generous. Our government is of the people for the people and by the people. That means if it is imperfect, if it needs changing, then we have that power.

But it can, and has done a lot of good. You talk about social programs as a burden, and they are. But as someone who has used them in times of need I see them as what they are. A helping hand. Some abuse that generosity. And I am all for trying to fix that. But dismissing a system that has helped tens of millions of people legitimately in need because you don't like paying your taxes.... that seems immoral to me.