Taxes, Spending, the Fiscal Cliff, and Austerity

[Arthur]

Start by cutting the bloated defense budget:

"We continue to spend billions upon billions of dollars on a nuclear arsenal and Cold War-era weapons system designed to fight a phantom Soviet army. The Cold War is over and the Soviet Union long gone -- nonetheless, today we are spending above Cold War levels in real, inflation-corrected terms. It is time to say enough is enough; we need to rein in Pentagon spending after the last decade of unchecked increases, and spend our security dollars wisely on proven programs that can meet our national security goals.

The Pentagon currently spends as much on the military as the next 12 to 15 countries combined, most of whom are allies. It dwarfs all other federal agencies in money lost to waste, fraud and abuse and is the only agency not subject to an annual audit.

Two decades after the fall of the Soviet Union, the U.S. spends more in inflation-adjusted dollars than at the height of the Cold War. We need to adjust our approach to fit current threats by realigning our force structure.

The Project for Defense Alternatives, CATO Institute, Taxpayers for Common Sense, Center for American Progress, and Bowles-Simpson Commission have all called for deep cuts in defense spending ranging from $350 to $590 billion beyond the cuts already in place."

Rep. Barbara Lee: Toss Wasteful Defense Weapons Programs Off the Cliff

 

[Arthur]

In fiscal year 2000, the Pentagon budget was $295 billion, the national debt was $5.62 trillion, and unemployment was 4 percent. In FY 2012, the Pentagon budget was $645 billion, and a deficit of $1.1 trillion contributed to a year-ending national debt of $16 trillion. Unemployment was 7.8 percent.

Just as important, the money has been spent wastefully, with $102 billion in waste identified in just FY 2011. And, according to the Pentagon itself, in the last decade, the Pentagon awarded $1.1 trillion in contracts to contractors who have engaged in fraud.

Ed Flaherty,

Veterans for Peace Chapter 161

Military spending should be audited | TheGazette

 

[Wiseacre]

Start by cutting the bloated defense budget:

"We continue to spend billions upon billions of dollars on a nuclear arsenal and Cold War-era weapons system designed to fight a phantom Soviet army. The Cold War is over and the Soviet Union long gone -- nonetheless, today we are spending above Cold War levels in real, inflation-corrected terms. It is time to say enough is enough; we need to rein in Pentagon spending after the last decade of unchecked increases, and spend our security dollars wisely on proven programs that can meet our national security goals.

The Pentagon currently spends as much on the military as the next 12 to 15 countries combined, most of whom are allies. It dwarfs all other federal agencies in money lost to waste, fraud and abuse and is the only agency not subject to an annual audit.

Two decades after the fall of the Soviet Union, the U.S. spends more in inflation-adjusted dollars than at the height of the Cold War. We need to adjust our approach to fit current threats by realigning our force structure.

The Project for Defense Alternatives, CATO Institute, Taxpayers for Common Sense, Center for American Progress, and Bowles-Simpson Commission have all called for deep cuts in defense spending ranging from $350 to $590 billion beyond the cuts already in place."

Rep. Barbara Lee: Toss Wasteful Defense Weapons Programs Off the Cliff

Are you good with making identical cuts in Medicare/Medicaid/Obamacare? And reforming Social Security to make it solvent? And stop wasting money on Solyndras and high speed rail. Not many on the left are okay with any of that. When do we get to the part where the left gives up as much as they want from the right?

 

[The Rabbi]

Virtually every president has promised to "cut the fraud and waste." Yet it doesnt happen.

 

[KissMy]

When did Republicans REDUCE THE SIZE OF GOVERNMENT????? Campaign Rhetoric is not reality!!! Nationalizing Banks for the rich does not reduce government. Neither does subsidizing Flood Insurance for the Rich. Alan Greenspan Called Out Republicans For Exploding Entitlement Spending. So has Comptroller General David Walker. Mitt Romney & Paul Ryan promised to add $716 billion more Medicare spending. They buy the votes of seniors who vote regularly with my tax money. They spent trillions on prescription drugs to seniors. Mitt Romney & Paul Ryan promised to increase military spending. They subsidize the top 1% who fund their campaign with my tax dollars. That shit must stop.

 

[Trajan]

Start by cutting the bloated defense budget:

"We continue to spend billions upon billions of dollars on a nuclear arsenal and Cold War-era weapons system designed to fight a phantom Soviet army. The Cold War is over and the Soviet Union long gone -- nonetheless, today we are spending above Cold War levels in real, inflation-corrected terms. It is time to say enough is enough; we need to rein in Pentagon spending after the last decade of unchecked increases, and spend our security dollars wisely on proven programs that can meet our national security goals.

The Pentagon currently spends as much on the military as the next 12 to 15 countries combined, most of whom are allies. It dwarfs all other federal agencies in money lost to waste, fraud and abuse and is the only agency not subject to an annual audit.

Two decades after the fall of the Soviet Union, the U.S. spends more in inflation-adjusted dollars than at the height of the Cold War. We need to adjust our approach to fit current threats by realigning our force structure.

The Project for Defense Alternatives, CATO Institute, Taxpayers for Common Sense, Center for American Progress, and Bowles-Simpson Commission have all called for deep cuts in defense spending ranging from $350 to $590 billion beyond the cuts already in place."

Rep. Barbara Lee: Toss Wasteful Defense Weapons Programs Off the Cliff

we have discussed this at length here-

http://www.usmessageboard.com/6427023-post25.html

plus ...

like it or not deterrence has always been a benchmark, MAD, etc.


Our deterrence in the wake of the ussr falling is now focused on the Chinese in that the age old concept of strategic freedom for commerce is still and always will be paramount.

The geography of the world being what it is, chokes points exit that help maintain that commercial freedom. There fore we need to maintain some semblance of advance bases securing these choke points.

I personally think we should scale back the manpower aspect as in amour and infantry as these are less technically challenging and intensive to rehabilitate if we need them where in you cannot create aircraft carriers, superior aircraft in a year, as you could with infantry and armored divisions.


as for spending cuts , we have and there are more cooked into the books-, the marines and army combined are being reduced by 47,000 troops. platforms as in heavy artillery and tanks are being pared back HOWEVER we have also canceled the F-22 at 187 aircraft and have only 10 carrier air grps on hand and have canceled 3 of 5 of the next generation Carrier the Gerald Ford class, and we are only taking the 2, because there ( and always is for these alike platforms) were huge front loaded costs paid for in 03 and 06.

 

[Foxfyre]

Ya'll may be forgetting that the Democrats have not passed a national budget since 2009. Romney did not want to increase medicare by 700+ billion. He wanted to replace the raiding of the Medicare fund to pay for Obamacare. The plan as you will recall, if Romney had won, was to repeal Obamacare.

Having said that, while he did a good job with national security, President Bush did a terrible job with national defense and managed both wars poorly. And it will forever be a footnote of controversy whether the invasion of Iraq was warranted and also whether nation building in Afghanistan was part of the original plan to go after the Taliban in retaliation for 9/11. But both things happened and cannot now be undone. So let's focus on how to move forward from this point.

But President Bush's last defense budget in 2008 was roughly $670 billion.

As of early December this year:

WASHINGTON — The Senate overwhelmingly approved a sweeping, $631 billion defense bill Tuesday that sends a clear signal to President Barack Obama to move quickly to get U.S. combat troops out of Afghanistan, tightens sanctions on Iran and limits the president's authority in handling terror suspects.
Military budget flies through Senate - Worcester Telegram & Gazette - telegram.com

The vote was 98 to 0.

 

[Sactowndog]

No increasing the rates is important to show that everyone is pitching in and as th carrot for the democrats to agree to significant entitlement reform. And I have yet to hear you say you would support these increases if you can get significant entitlement reform.

No increasing the rates is important to show that everyone is pitching in and as th carrot for the democrats to agree to significant entitlement reform.

Ah, I see, its a matter of 'fairness' despite the fact that the rates will yield approx. 83Bn dollars (in year one and almost certainly go down there after) means little, until the gop agrees to tax people because it presents the appearance of 'pitching in', the dems will not compromise?

So, the carrot isn't effective tax policy to collect more revenue, but, what will be almost a useless exercise in axe grinding.

I have to say I find that ridiculous.



you are representing a false premise, in any case- I do NOT sppt. rate hikes, I support tax reform, with or without entitlement reform, one has little do with another.

It really doesn't matter a damn what you think. The point is if you want to reform entitlements and get agreement that is the price you need to pay. And if you right and it is a small amount your more obstinate than I believed and you define the problem with the Republican Party. They put the interests of the one percent over the country.

 

[The Rabbi]

Ah, I see, its a matter of 'fairness' despite the fact that the rates will yield approx. 83Bn dollars (in year one and almost certainly go down there after) means little, until the gop agrees to tax people because it presents the appearance of 'pitching in', the dems will not compromise?

So, the carrot isn't effective tax policy to collect more revenue, but, what will be almost a useless exercise in axe grinding.

I have to say I find that ridiculous.



you are representing a false premise, in any case- I do NOT sppt. rate hikes, I support tax reform, with or without entitlement reform, one has little do with another.

It really doesn't matter a damn what you think. The point is if you want to reform entitlements and get agreement that is the price you need to pay. And if you right and it is a small amount your more obstinate than I believed and you define the problem with the Republican Party. They put the interests of the one percent over the country.

That is wrong. The problem with this country is not that the wealthy are payng too little. They pay way too much, is one problem. But the bigger problem is the spending. Democrats have welched any number of times to address this but now we're being told "this time it's different." It is not different. It is the same shit, different day. They will gladly vote for a tax increase but point fingers and swear solemnly that if the GOP cuts one dollar from the budget widows and orphans will be starving in the street.
The Dems have no credibility when it comes to cutting spending. They simply cannot. So if they propose serious spending cuts--not 10 years down the road maybe--maybe the GOP should consider a tax increase. But they won't. The Dems will propose it to get the tax increase and then strip the cuts out of the bill at the last minute in their usual quasi-legal parliamentary maneuver.

 

[Sactowndog]

" In terms of businesses the lower hurdle rate arises in terms of the seller not the buyer. Most sellers have an after tax number in their head they want to receive for their business. With a lower capital gains tax rate the sellers can reach that number more easily making them more likely to sell and the employees more likely to be off-shored. "


This makes no sense, if the taxes are low enough for the seller to make the desired after tax profit, why would the buyer move the company offshore? All other things being equal, the buyer isn't going to incur the considerable moving expenses without a damn good reason.

Because by moving the business off shore the company substantially improves their cash via labor arbitrage. So "all other things aren't equal". Generally the seller may not want to take this step so they sell to the buyer who then comes in and off shores the labor.

 

[The Rabbi]

" In terms of businesses the lower hurdle rate arises in terms of the seller not the buyer. Most sellers have an after tax number in their head they want to receive for their business. With a lower capital gains tax rate the sellers can reach that number more easily making them more likely to sell and the employees more likely to be off-shored. "


This makes no sense, if the taxes are low enough for the seller to make the desired after tax profit, why would the buyer move the company offshore? All other things being equal, the buyer isn't going to incur the considerable moving expenses without a damn good reason.

Because by moving the business off shore the company substantially improves their cash via labor arbitrage. So "all other things aren't equal". Generally the seller may not want to take this step so they sell to the buyer who then comes in and off shores the labor.

If it made sense to off shore the labor, previous management would have done it already. It isn't like off shoring is some new concept. Of course changes in gov't policy, e.g. Obamacare, could change the equation to make it more profitable.

 

[Sactowndog]

" In short, I think some true academic research could likely show reducing the capital gains rate today would have a significantly negative impact on the deficit and in fact might actually have a negative impact on jobs. "


I highly doubt that; I think that true academic research would show the exact opposite. Because a lower CG rate incentivizes capital investment and enriches not only the rich but also encourages the less rich to put more money to work. AND it also encourages offshore money and investments to come here instead of somewhere else.

No what would incur off-shore money to come here would be lower corporate income taxes. The investor will pay the capital gains rate where he lives not where he invests. Capital extraction laws aside the investor maximizes his return by living where capital gains taxes are lowest and investing where corporate income taxes are lowest.

Your thinking ignores dramatic changes in WW finance.

 

[Sactowndog]

" In short, I think some true academic research could likely show reducing the capital gains rate today would have a significantly negative impact on the deficit and in fact might actually have a negative impact on jobs. "


I highly doubt that; I think that true academic research would show the exact opposite. Because a lower CG rate incentivizes capital investment and enriches not only the rich but also encourages the less rich to put more money to work. AND it also encourages offshore money and investments to come here instead of somewhere else.

It is historically the case that lowering hte CG rate produces more income to the govt, not less. Even Obama understands this.[/QUOTE

It was also historically the case that investors invested where they live. Since that fundamental premise has changed so likely has the conclusion you state.

 

[Sactowndog]

" In short, I think some true academic research could likely show reducing the capital gains rate today would have a significantly negative impact on the deficit and in fact might actually have a negative impact on jobs. "


I highly doubt that; I think that true academic research would show the exact opposite. Because a lower CG rate incentivizes capital investment and enriches not only the rich but also encourages the less rich to put more money to work. AND it also encourages offshore money and investments to come here instead of somewhere else.

It isn't even a matter of doubt. A lower CG makes investing a more attractive risk and the resulting increased economic activity has a positive ripple effect through the whole.

It is amazing to me how people take things on assumption even if the underlying factors have changed dramatically. Again the past examples you point to we're all in a time when most portfolios were 100% invested in US stocks and bonds. Since for the wealthy that has shrunk to 1/3 it stands to reason 2/3 of the effectiveness no longer exists. It is quite possible that this 2/3 reduction makes reducing the capital gains taxes highly negative to the deficit.

 

[The Rabbi]

" In short, I think some true academic research could likely show reducing the capital gains rate today would have a significantly negative impact on the deficit and in fact might actually have a negative impact on jobs. "


I highly doubt that; I think that true academic research would show the exact opposite. Because a lower CG rate incentivizes capital investment and enriches not only the rich but also encourages the less rich to put more money to work. AND it also encourages offshore money and investments to come here instead of somewhere else.

It is historically the case that lowering hte CG rate produces more income to the govt, not less. Even Obama understands this.[/QUOTE

It was also historically the case that investors invested where they live. Since that fundamental premise has changed so likely has the conclusion you state.

Please show me that it has changed. Please give a logical explanation why it would.

 

[The Rabbi]

" In short, I think some true academic research could likely show reducing the capital gains rate today would have a significantly negative impact on the deficit and in fact might actually have a negative impact on jobs. "


I highly doubt that; I think that true academic research would show the exact opposite. Because a lower CG rate incentivizes capital investment and enriches not only the rich but also encourages the less rich to put more money to work. AND it also encourages offshore money and investments to come here instead of somewhere else.

It isn't even a matter of doubt. A lower CG makes investing a more attractive risk and the resulting increased economic activity has a positive ripple effect through the whole.

It is amazing to me how people take things on assumption even if the underlying factors have changed dramatically. Again the past examples you point to we're all in a time when most portfolios were 100% invested in US stocks and bonds. Since for the wealthy that has shrunk to 1/3 it stands to reason 2/3 of the effectiveness no longer exists. It is quite possible that this 2/3 reduction makes reducing the capital gains taxes highly negative to the deficit.

And it is quite possible it is not. In fact the burden of proof would be on you to show that this has changed.

 

[Sactowndog]

It really doesn't matter a damn what you think. The point is if you want to reform entitlements and get agreement that is the price you need to pay. And if you right and it is a small amount your more obstinate than I believed and you define the problem with the Republican Party. They put the interests of the one percent over the country.

That is wrong. The problem with this country is not that the wealthy are payng too little. They pay way too much, is one problem. But the bigger problem is the spending. Democrats have welched any number of times to address this but now we're being told "this time it's different." It is not different. It is the same shit, different day. They will gladly vote for a tax increase but point fingers and swear solemnly that if the GOP cuts one dollar from the budget widows and orphans will be starving in the street.
The Dems have no credibility when it comes to cutting spending. They simply cannot. So if they propose serious spending cuts--not 10 years down the road maybe--maybe the GOP should consider a tax increase. But they won't. The Dems will propose it to get the tax increase and then strip the cuts out of the bill at the last minute in their usual quasi-legal parliamentary maneuver.

The Republicans control the house last I checked. If the House leaders and President Obama agreed on a deal that raised taxes for the wealthy and reformed entitlements the Senate would pass it. The problem with the deficit is clearly the Republican Party has so many of you have aptly proven. I have not seen a single person argue against spending cuts and entitlement reforms. All I see is you and those like you digging in your heels on tax rates for the wealthy.

You all illustrate the problem completely and that is why the country is blaming Republicans for not getting to a deal.

 

[The Rabbi]

That is wrong. The problem with this country is not that the wealthy are payng too little. They pay way too much, is one problem. But the bigger problem is the spending. Democrats have welched any number of times to address this but now we're being told "this time it's different." It is not different. It is the same shit, different day. They will gladly vote for a tax increase but point fingers and swear solemnly that if the GOP cuts one dollar from the budget widows and orphans will be starving in the street.
The Dems have no credibility when it comes to cutting spending. They simply cannot. So if they propose serious spending cuts--not 10 years down the road maybe--maybe the GOP should consider a tax increase. But they won't. The Dems will propose it to get the tax increase and then strip the cuts out of the bill at the last minute in their usual quasi-legal parliamentary maneuver.

The Republicans control the house last I checked. If the House leaders and President Obama agreed on a deal that raised taxes for the wealthy and reformed entitlements the Senate would pass it. The problem with the deficit is clearly the Republican Party has so many of you have aptly proven. I have not seen a single person argue against spending cuts and entitlement reforms. All I see is you and those like you digging in your heels on tax rates for the wealthy.

You all illustrate the problem completely and that is why the country is blaming Republicans for not getting to a deal.

The country (whoever that is) is not blamng the GOP. The liberal media and their lap dogs are blaming the GOP.
The Dems have shown themselves to be totally untrustworthy. They have not passed a budget in years. They have not proposed any credible spending cuts. Ten years down the road maybe is not credible. All they want is higher tax rates on the rich, even though it would not solve the budget crisis one iota. It is purely political. That is all the Democratic Party is today: a political machine for getting and retaining power. The GOP is serious about reining in the deficit. It awaits honest Democrats to help.

 

[Sactowndog]

It is historically the case that lowering hte CG rate produces more income to the govt, not less. Even Obama understands this.[/QUOTE

It was also historically the case that investors invested where they live. Since that fundamental premise has changed so likely has the conclusion you state.

Please show me that it has changed. Please give a logical explanation why it would.

I am not going to get the links for you but you can find them yourselves. Look at the structure of the Harvard Endowment Fund which is the bellwether portfolio for sophisticated investors. In 1980, 100% of the fund was invested in US stocks and bonds. Today, that same portfolio has about 1/3 of its portfolio invested in US stocks and bonds.

 

[Sactowndog]

The Republicans control the house last I checked. If the House leaders and President Obama agreed on a deal that raised taxes for the wealthy and reformed entitlements the Senate would pass it. The problem with the deficit is clearly the Republican Party has so many of you have aptly proven. I have not seen a single person argue against spending cuts and entitlement reforms. All I see is you and those like you digging in your heels on tax rates for the wealthy.

You all illustrate the problem completely and that is why the country is blaming Republicans for not getting to a deal.

The country (whoever that is) is not blamng the GOP. The liberal media and their lap dogs are blaming the GOP.
The Dems have shown themselves to be totally untrustworthy. They have not passed a budget in years. They have not proposed any credible spending cuts. Ten years down the road maybe is not credible. All they want is higher tax rates on the rich, even though it would not solve the budget crisis one iota. It is purely political. That is all the Democratic Party is today: a political machine for getting and retaining power. The GOP is serious about reining in the deficit. It awaits honest Democrats to help.

Look at the polls, the majority of the population believes the Republicans are to blame. As an independent voter just from the tone of this board I would draw the same conclusion.

Everyone here is ready to move to a solution which would impact the deficit but you and people ideologically aligned with you. Despite what you claim it screams I don't care what the deficit is I just want to lower taxes on the wealthy. This message is the same message being sent by the Republican Party.