The ultimate vindication of Republican supply-side economics

[itfitzme]

You cannot mix accounts.

discretionary vs. mandatory spending ?

There is no data to support "Dems demanded high (social) spending".

Clinton-era "high" social spending, lamented by "conservatives", continued on under Bush -- as if in political compromise, per Greenspan's comments -- without decrease. i did not say, "Dems demanded higher spending", only that (stereotypically) "high" liberal social spending stayed the same. Bush, compromising to maintain his mandate, tolerated Democratic spending, for Republican Tax-cuts

Nah, not necessarily 'discretionary vs. mandatory spending'.

But there is the thing that I realized when I was going over the history. It doesn't matter. Medicare and SSI, the major social spending programs, are self funded. The tax changes of 2001 and 2003 have nothing to do with Medicare and SSI. Lowering the corporate and individual tax rates does not decrease funding for Medicare and SSI. In order to affect Medicare and SSI, FICA and SECA taxes have to be the ones to change.

Medicare and SSI are trust funds. They are paid for with the FICA and SECA taxes along with drawing on the trust funds.

Military spending only applies to corporate and individual taxes.

FICA and SECA <=> Medicare and SSI.

Military and other stuff <=> corporate and individual taxes.

We can't cross match them.

In truth, the federal receipts and outlays should be presented as separate accounts, not an absolute total. It's convenient to look at the total, after all, any deficit has nothing to do with Medicare and SSI anyways.

Medicare and SSI don't have a 'deficit'. They are drawing on their trust fund accounts. That is the whole hoopla about them. As separate accounts, they are drawing their savings. Alone, that isn't particularly unusual. That's really the idea of the trust funds, to save cash when outlays are low, then draw on it when they are high. The problem is that not enough was paid in and the exploding medical costs and baby boomer retirees are drawing more then the funds can sustain. But this is a completely separate issue then the deficit.

That's why I'm saying, we really need to look more closely at things before we can make a general statement about "Dems demanded high (social) spending".

FICA and SECA are really not that big of a tax. They didn't need to be because the ratio of retirees to employed workers is low.

What "Clinton-era "high" social spending" are we talking about? I will gladly see if the idea can be validated, if you can be more specific. I just don't know what to look at because I find no indication of "Clinton-era "high" social spending". How high? How much dollars? What percentage change, exactly? What percentage of the GDP? More importantly, what government budget category? "Social spending" could mean anything.

Outlays, real dollar per cap, was flat for decades. It only went up after 2001 due to the increased military budget.


p.s. I can't get through all of your material. I'd like to but I gotta get some work done.

 

[EdwardBaiamonte]

Ireland ran up external debt equal to six times its GDP. That's Republican, alright, but it's not sustainable.

actually dear Republicans have introduced 30 Balanced Budget Amendments since Jefferson's. Libtards killed every one of them

The US Republican party doesn't pass legislation in Ireland, you ******* retard.

If I said it did I'll pay you $10,000. Bet or run away once again with your liberal tail between your legs? With a low conceptual IQ you have no idea when you are constructing a strawman to defeat. Sorry

 

[EdwardBaiamonte]

No, because I'm not. Tell me, how'd all that FDI-fueled debt work out for Ireland?

FDI from 12.5% tax transformed Ireland from poorest to richest in Europe which is why EU is so opposed.

 

[Widdekind]

The tax changes of 2001 and 2003 have nothing to do with Medicare and SSI. Lowering the corporate and individual tax rates does not decrease funding for Medicare and SSI.

exactly -- (stereotypically) "high Dem spending" stayed the same

In order to affect Medicare and SSI, FICA and SECA taxes have to be the ones to change. Medicare and SSI are trust funds. They are paid for with the FICA and SECA taxes along with drawing on the trust funds...

FICA and SECA <=> Medicare and SSI

Military and other stuff <=> corporate and individual taxes.​

sure -- Bush cut what Taxes he could (i.e., individual & corporate), then 9/11 demanded more spending, precisely where Bush had reduced "revenues". 9/11 "Fiscally targeted" the Bush administration's "revenue posture" ("hit them where they're least willing-and-able to pay") ?

any deficit has nothing to do with Medicare and SSI anyways... Medicare and SSI don't have a 'deficit'. They are drawing on their trust fund accounts.

in 2012, Payroll Taxes (FICA & SECA) amounted to over $900B, but Social programs (SS, MC/MC) cost $1500B:

half of the Federal Government budget funds Social programs:

FICA and SECA are really not that big of a tax.

nearly $1T ?!

Outlays, real dollar per cap, was flat for decades. It only went up after 2001 due to the increased military budget.

exactly -- "high" stayed "high", then 9/11 made everything worse

 

[itfitzme]

You cannot mix accounts.

discretionary vs. mandatory spending ?

There is no data to support "Dems demanded high (social) spending".

Clinton-era "high" social spending, lamented by "conservatives", continued on under Bush -- as if in political compromise, per Greenspan's comments -- without decrease. i did not say, "Dems demanded higher spending", only that (stereotypically) "high" liberal social spending stayed the same. Bush, compromising to maintain his mandate, tolerated Democratic spending, for Republican Tax-cuts

Okay, yeppers, you didn't say that they increased. I just quoted your statement, though. And, we (or at least I) are trying to figure out what the increase in the deficit was due to. Was it simply an increase in the defense spending or was it a combination of defense and social programs. I thought that was what we were after. Did the Clinton era surpluses disappear due to funding of "no child left behind", defense, both, or these and other things? As well, as I will detail, Medicare, Social Security, and Social Security Disability Insurance cannot be applied to the deficit.

I find '"high" social spending' to general and dissatisfying. It has been said that, while people often agree with the idea of lowering government spending, when presented with the actual details, they don't find any that they actually want to cut. In the abstract, it is one thing, when considering the idea of cutting off Grandma Milly's Medicare, it becomes something else.

Even if we consider them in terms of "higher", this is just too vague. For example, if defense increased from 3% to 4.3% of GDP while non-defense increased from 3.3% to 3.9% and means tested entitlements increased from 2.4% to 3.0% can each be reasonably classified as simply increasing? One increased by 1.3%, the second by .6%, the third by .6%. The first is double that of either of the other two. And that 2.4% to 3.0% is already starting lower then the others. Its .6% increase is a just bigger increase compared to where it began.

Just as well, they belong to different accounts with different funding sources. This consideration, that the federal budget is separable into specific accounts to which specific taxes applies, appears important. With Social Security fully self funded, all increases are fully accounted for by the associated tax and trust fund. On the other hand, defense is paid out of the federal fund and is associated with the individual income tax decreases. Any increase in deficit belongs to the defense/income tax pair, not the Social Security/FICA tax pair.

I have been able to sort out some of it.

The first issue is that the major social programs, Medicare and most of Social Security are self funded and don't apply to the deficit.

The historical budget is available in detailed tables. The detailed tables some in a zip file, hist_xls.zip. One problem in attempting to answer this question, of exactly what the specific programs, taxes and outlays contributed to the deficit isn't simply answered by one file.

Still, among the 59 Excel files, is hist01z4.xls. It is titled, "Table 1.4 RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS (-) BY FUND GROUP: 1934-2014"

Also included are files, like hist08z4.xls, that differentiate between mandatory and discretionary.

The download I have goes through 2008, with 2009 to 2014 as estimates. It's good enough for the period of time we are considering. More recent data is available at Historical Tables | The White House

This table 1.4, separates receipts, and outlays into "Federal Funds", "Trust Funds" and "Interfund Transactions". It includes the surplus for "Federal Funds" and "Trust Funds". There is no surplus for "Interfund Transactions" and it doesn't seem to mean much.

There are two SSA trust funds. Tax rates for Social Security's two trust funds, the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund, are shown at Social Security Tax Rates

(What I always though of as Social Security is OASI.)

Among the "social" programs are Medicare (HI) Part A, Medicare Part B, Medicare Part D, Social Security Disability Insurance, Old-Age and Survivors Insurance, and Supplemental Security Income.

Medicare (HI) (Part A), Social Security Disability Insurance, and Old-Age and Survivors Insurance are all self funded with specific taxes, FICA and SECA. Medicare(HI), Social Security Disability Insurance, Old-Age and Survivors Insurance and their associated taxes are all tied to trust funds. These trust funds, taxes, and programs are entirely separate from other taxes, funding and programs.

The Social Security website says, "Medicare is financed by a portion of the payroll taxes paid by workers and their employers. It also is financed in part by monthly premiums deducted from Social Security checks." So, it seems that Medicare parts B and D are self funded through premiums.

The statement from the SSA website is "SSI is paid for by U.S. Treasury general funds, not the Social Security trust funds." Social Security Publications

Trust Fund receipts come from trust fund taxes which go directly into the trust fund. The social programs, Medicare Part A, Social Security Disability Insurance, and Old-Age and Survivors Insurance are paid from these taxes and not from general tax receipts. Corporate and individual income taxes do not pay for these social programs.

For all practicality, there has never been a deficit, always a surplus, for the Trust Funds. (1950, 1959, 1960, and 1962 had deficits.)

Here are the receipts, outlays, and surpluses for the federal funds and trust funds.

(The blue lines go together. The brown, red and pink go together.)

At least we can conclude that Medicare , Social Security Disability Insurance, and Social Security Insurance were not contributors to the deficit.

This leaves the question of Supplemental Security Income. So this would be one program that we might consider as fitting the description of "increases in social programs that affect the deficit". What also might fit is the department of education, that's a social program.

But the thing is that, of all the budget items, Defense and the trust funds are by far the largest. It's going to be hard to make a case that things like the department of education are significant compared to defense and the trust funds.

In 2008, total outlays were 21% of the GDP. Discretionary spending was about split between defense and not defense at 4.3% and 3.7% respectively. The non-defense in important, perhaps things like the department of education and department of energy. Mandatory spending includes social security at 4.3%, a self funded program. Where the supplemental security income fits, I don't know yet. The mandatory spending includes categories of means tested entitlements and "other". That is pretty non-specific.

Just going down the %GDP numbers, it's not simply clear if they increased significantly by comparison to defense.

So far, that's as close as I can get. I really would like to know, aside from the easily recognized defense spending, what exactly are the programs that most affect the deficit.

 

[itfitzme]

The tax changes of 2001 and 2003 have nothing to do with Medicare and SSI. Lowering the corporate and individual tax rates does not decrease funding for Medicare and SSI.

exactly -- (stereotypically) "high Dem spending" stayed the same

Quantify "high Dem spending"? What spending? On what? Where? When? What are we talking about by "high Dem spending"?

Medicare and SSI is an insurance program. How does a self funded insurance program qualify as "high dem spending"? Grandpa paid into it when he worked, now he is collecting from it. It's his ******* money.

"high Dem spending" in Medicare and SSI did not contribute to the deficit. The deficit was due to the increase in military spending. Changes to Medicare and SSI would not have changed the deficit.

In order to affect Medicare and SSI, FICA and SECA taxes have to be the ones to change. Medicare and SSI are trust funds. They are paid for with the FICA and SECA taxes along with drawing on the trust funds...

FICA and SECA <=> Medicare and SSI

Military and other stuff <=> corporate and individual taxes.​

sure -- Bush cut what Taxes he could (i.e., individual & corporate), then 9/11 demanded more spending, precisely where Bush had reduced "revenues". 9/11 "Fiscally targeted" the Bush administration's "revenue posture" ("hit them where they're least willing-and-able to pay") ?

So? The increase in defense spending couldn't hit anything else. What is the point?

in 2012, Payroll Taxes (FICA & SECA) amounted to over $900B, but Social programs (SS, MC/MC) cost $1500B:

half of the Federal Government budget funds Social programs:

So, what's the point? That the Bush deficits were related to SS and MC or that SS and MC are drawing from their trust funds?

What the point? Why not all of the federal budget? Seems kind of low at half. One third? One sixth? 80%?

FICA and SECA are really not that big of a tax.

nearly $1T ?!

So? A big number. Compared to what? What is the percentage? What does that percentage compare to? It a billion light years to the nearest star. There are 7.7 million businesses. The US population is 330 million. The work force is 160 million. The world population is 7 billion. It is 4000 miles across the contiguous United States or 63360 inches. A bunch of big numbers.

What's the point?

Outlays, real dollar per cap, was flat for decades. It only went up after 2001 due to the increased military budget.

exactly -- "high" stayed "high", then 9/11 made everything worse

"High" compared to what? In who's opinion? "went up" and "went down" are factual. "high" is an opinion.

The original point, made some time back by someone, was that the deficit was not caused by the decrease in revenues. You pointed out that there was a large military build up. Then you added something about the social spending.

The social spending didn't cause the deficit. It was the military increase combined with the decrease in taxes that caused the deficit. Damn good thing too, nothing stimulates the economy like military spending combined with lower taxes.

 

[itfitzme]

As business credit is the source of the money supply

broad Money (M2) tracks total individual Consumer credit debt. Now, there is no net "inside Money", because every dollar spent was (ultimately) borrowed into the economy -- i borrow for a new car, the dealer pays their workers & the lot landlord, and they re-spend my credit-Money. Ergo, prima facie, if "M2 - individual debt = 0" (approximately), then M2, as a broad measure of "inside Money", plausibly derives, from individual debt... not corporate debt. If so, then (almost) every dollar people have put, into their wallets (M0), checking accounts (M1-M0), and savings accounts (M2-M1), was a dollar "spent to them", (ultimately) by some other Consumer debtor who borrowed the "credit-Money". That hypothesis can explain why "individual Consumer (credit-)Money" (M2) tracks "individual Consumer (credit-)debt".

is the apparent similarity, between individual debt (most of which is mortgages), and broad Money-supply (a third of which is now large & long-term time-Deposits), spurious ?

individual debt
individual debt, mortgages
M3 + MMFs
M2 + MMFs

Yeah, I've been down this road before with no results. All I know is that "savings equals investment".

You may have noticed that I consider very little if it is not in real dollar per capita terms. I've got the same comparison, of M1, M2, M2-M1, and consumer credit as shown.

and

The second one does show a strong correlation between savings and credit. But that's all it shows and because everything grows with population, standard of living, and efficiency, it doesn't really mean much. There are some obvious low and high frequency similarities between credit and savings. But I cannot tell if they are simply artifacts or not. It may be that, because they share the same CPI and population factors, it is these that create the effect.

It's like comparing the CPI to population. They are heck of correlated simply because they both increase with time. Savings increases with time, credit increases with time. It just doesn't prove that savings equals investment simply because there may be an alternative cause of the correlation. It is all just missing something "comprehensive", something that serves as a foundation with which to ensure that the correlation is, in fact, a connection.

This tendency of things increasing with time is why I always go after real per capita. It at least eliminates the effect of increasing population and inflation.

The only thing that maybe telling on the first graph is that M1 in real dollars per capita has remained flat. Should it go up with standard of living? Why doesn't it?

Until I have a good model for the endogenous increase in the money supply, I've got nothing on this one.

I am beginning with DSGE's statement that the fractional reserve money supply process "is sustainable, because the money supply endogenously expands as real output, and hence real income grows. The money supply only expands as our ability to service that debt expands."

The simple flow model is

This diagram captures the essential elements. For these purposes, the bank operations are simply shifted over to Supply. Interest on debt is used to pay for labor and supplies, so this presents nothing unusual. While S:Savings is included, it is not necessary and will be considered only later.

What this diagram does not show is the time dependent changes. In the full economy, population, cost of living, standard of living, and efficiency all increase. Attempting to approach all of this simultaneously is a bit much.

Rather, we will consider a more static system with only the standard of living increasing. Specifically, this means that output or Q increases with time. In order for Q to increase while P remains constant, then M must increase. We will take the velocity of money as constant at unity. In order for output to increase, K, capital equipment must increase. And, because we are taking population as constant, then it is apparent that efficiency must increase.

In the simplest terms, then, with population and cost of living constant, if we expect standard of living to increase then M, K, and e must increase. As well, W:wage will increase.

To increase K, credit is drawn upon in the form of debt. This debt pays wages, increasing the money supply M. With an increase in M, as as K was increased to increase Q, then the system is balanced at a higher level of output and income.

One problem arises in that P is now due with interest i. In order for P to be paid, then something must replace the decrease in M. The interest is a non issue as it pays wages and simply recirculates.

The only solution to paying of P without decreasing M is to continuously increase debt D along with K. As long as D and K are continuously increasing ahead of P, the M continues to increase along with Q and W.

This is the basis of the endogenous money supply creation.

What is lacking now is simply an appropriate time dependent mathematical model that will reveal more refined constraints on how this process must function.

The question that needs to be answered is if the system is stable if debt is not accumulating. The reason this is significant is in the issue of P requiring a decrease in M unless K is continuing to increase on further increase in D. If D is not increasing, the K is not, efficiency is flat, and the existence of P necessitates that M fall.

This doesn't answer the initial question, of comparing savings to credit. It leads, unfortunately, to a completely new problem.

The problem is that the system appears, in fact, to be unstable. Unless D continues to increase, then M is forced to decrease. M cannot be held constant.

This present a personal philosophical issue. I simply cannot come to a conclusion that suggest the entire process is not functional. That's not going to work. There has to be something that I am missing.

 

[Widdekind]

...what the increase in the deficit was due to. Was it simply an increase in the defense spending or was it a combination of defense and social programs.

uncritical acceptance, of (Wikipedia's citing of) Greenspan's statements, implies that a combination, of "same-to-higher" spending, with cuts to (some) Taxes, turned surpluses to deficits

the federal budget is separable into specific accounts to which specific taxes applies... With Social Security fully self funded, all increases are fully accounted for by the associated tax and trust fund. On the other hand, defense is paid out of the federal fund and is associated with the individual income tax decreases. Any increase in deficit belongs to the defense/income tax pair, not the Social Security/FICA tax pair.

sure -- and FICA/SECA taxes have also been increasing, i.e. (stereotypical) "high Dem Social spending" has stayed high (if not higher)

Bush cut "discretionary Taxes", then increased "discretionary spending" (on Military, due to 9/11); more spending, less Tax revenue, more deficit

major social programs, Medicare and most of Social Security are self funded and don't apply to the deficit.

by 2012, FICA/SECA revenues were less than SS+MC+MC expenditures. Evidently, those programs have already begun to draw down their Trust-Funds ?

There are two SSA trust funds... the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund...

Medicare (HI) (Part A), Social Security Disability Insurance [DI], and Old-Age and Survivors Insurance [OASI] are all self funded with specific taxes, FICA & SECA[and] are all tied to trust funds. These trust funds, taxes, and programs are entirely separate from other taxes, funding and programs.

"Medicare is financed by a portion of the payroll taxes paid by workers and their employers. It also is financed in part by monthly premiums deducted from Social Security checks"...

"SSI is paid for by U.S. Treasury general funds, not the Social Security trust funds."

Trust Fund receipts come from trust fund taxes which go directly into the trust fund. The social programs, Medicare Part A, Social Security Disability Insurance [DI], and Old-Age and Survivors Insurance [OASI] are paid from these taxes and not from general tax receipts. Corporate and individual income taxes do not pay for these social programs.

technically -- yet, individuals & corporations are still losing -$1T / yr. in Taxes (albeit, with special names, "FICA & SECA"), to the Federal Government. They may not be "individual & corporate income Taxes", but they still are Taxes on individuals & corporations. Those Social programs cost huge Money, huge Money which is taken in huge Taxes (with special names).

there has never been a deficit, always a surplus, for the Trust Funds... At least we can conclude that Medicare , Social Security Disability Insurance, and Social Security Insurance were not contributors to the deficit.

they still cost huge Money, taken in huge Taxes. Perhaps Bush cut "discretionary Taxes" all-the-more, for inability to touch "mandatory Taxes" ?

Supplemental Security Income [and] department of education...

SSI outlays total <$100B; one above chart listed DoE at 2% US budget = $60B. Both SSI & DoE combined account c.$100B (plausibly). In "big and round numbers" ($T's), SSI + DoE ~= $0T

when you say "self funded", i only want to clarify, that those Social programs were evidently passed into Law, with de facto "personal Balanced-Budget-Amendments" attached (the legislation = Law + Taxes too). I.e. for those "mandatory" Social programs, there is a de facto mini-BBA for them, according to which, sufficient Taxes are automatically taken from US individuals & corporations, to fund outlays.

at the same time, those programs cost huge Money, taken in huge Taxes, apparently "mandatory". evidently, Bush cut "what other Taxes he could"; then, months later, with "discretionary" revenues reduced, 9/11 demanded increased "discretionary" spending. Prima facie, 9/11 was "Fiscally astute", targeting the US, where there was the least overall political willingness-and-ability to pay, i.e. "on the discretionary (General fund) side" (that the "mandatory" side is, in the end, called "mandatory" by 300M Americans, proves prima facie that overall political willingness-and-ability, to take enough Tax Money to fund those "mandatory" programs, is higher, than for what those same 300M Americans relegate to "discretionary" status; 9/11 targeted "second-class citizen" programs)

 

[Widdekind]

How does a self funded insurance program qualify as "high dem spending"? Grandpa paid into it when he worked, now he is collecting from it. It's his ******* money.

Grandpa and the corporations he worked for paid it into, it was their money, now Grandpa gets (some of) it back

"high Dem spending" in Medicare and SSI did not contribute to the deficit. The deficit was due to the increase in military spending. Changes to Medicare and SSI would not have changed the deficit.

yes -- those "mandatory" programs apparently "mandate" Taxes sufficient to cover their costs, which now amount to nearly -$1T / year, or nearly -$10K / worker / year, half of which is paid by employers

 

[Widdekind]

endogenous increase in the money supply

Krugman vs Minsky: Who Should You Bank On When It Comes to Banking? « Multiplier Effect
Krugman

the money supply [M] endogenously expands as real output [Q], and hence real income [Y=PQ], grows. The money supply only expands as our ability to service that debt expands

mathematically,

Y = GDP = MV = PQ
M increases
Q increases
PQ increases
PQ = fair-market-value (FMV) of that year's production​

? So, as the Money-supply expands (M --> M + dM), more "widgets" are produced (Q --> Q + dQ), having a nominal FMV of approximately (P dQ). If all of that new Money was loaned into existence, as credit-and-debt (dM = dD), then new debts (dD) are offset, or collateralized, by the "widgets" the new debts bought ?

MV = PQ
d(MV) = d(PQ)
dM V + M dV = dP Q + P dQ​

DSGE says "prices are sticky" in the short-term (dP=0), and Money "Velocity" seems stable, even over the longer-term (dV=0):

dM V = P dQ​

note the units are those of "spending", i.e. a Money flow [$/year]. So let us multiply by one year (dt = 1):

dM (V dt) = P dQ dt = P dQ (x1)
= nominal FMV of that year's increased production, due to increased Demand, due to access, to increasable credit-and-debt​

DSGE says (?), that new debts [dD, a Money stock, $] are offset, by the FMV, of the new "widgets" Demanded-and-Supplied [P dQ dt, a Money stock, $]. And, those new debts [dD] offset the new credit "Money" [dM = dD]. So, how does new debt [dD = dM] compare, to the FMV, of the assets thereby bought ? We want the latter, to be greater than or equal to the former:

FMV > dD
P dQ (x1) > dM
P dQ (1)/dM > 1​

which requires

V (1) = P dQ (1)/dM > 1
V > 1​

so, this math suggests, that newly "endo-generated" credit-Money (dM), deriving from new debt (dD = dM), only purchases products worth more than that debt (FMV > dD), if the new credit "Money" is involved in more than one transaction that year (V > 1). And, since debt is only borrowed, to immediately buy, the new debt must be used at least that initial one time -- even if (say) the car dealer sat on the buyer's newly created credit-Money, for the rest of the year, that "Money" was still involved in at least one transaction per (that) year (V > 1).

what if you say, that the initial purchase, directly bought with the new credit-and-debt, represents Demand, for more product, at current prices (dD = dM = P dQ (1)); and that every subsequent "downstream" spending, of those new credits, in the same year, only increases Prices ("the car dealer doesn't buy more toothpaste, but has more Money to do so, so Prices rise") ? I.e. we separate the spending Velocity, of the new credits, into the initial purchase, plus all others made in that year:

V = 1 + dV
dM V = dM (1 + dV) = dM (1) + dM dV
= P dQ (1) + dP Q dV
= "the new car bought at current prices on loan" + "the old amounts of groceries bought by the dealer, at now-inflated Prices"​

i.e.

P dQ = dM = dD
dP Q dV = dM dV = dD dV​

if so, then

P dQ = dD
dP Q = dD​

so that (dividing everything by PQ):

dQ/Q = dD/(PQ) = dP/P​

that is, new debts, as a fraction of GDP (dD/PQ = dD/GDP), should equal both the fractional increase in Prices, and in Quantities...

guess i'll need to download OpenOffice...

 

[itfitzme]

...what the increase in the deficit was due to. Was it simply an increase in the defense spending or was it a combination of defense and social programs.

uncritical acceptance, of (Wikipedia's citing of) Greenspan's statements, implies that a combination, of "same-to-higher" spending, with cuts to (some) Taxes, turned surpluses to deficits

the federal budget is separable into specific accounts to which specific taxes applies... With Social Security fully self funded, all increases are fully accounted for by the associated tax and trust fund. On the other hand, defense is paid out of the federal fund and is associated with the individual income tax decreases. Any increase in deficit belongs to the defense/income tax pair, not the Social Security/FICA tax pair.

sure -- and FICA/SECA taxes have also been increasing, i.e. (stereotypical) "high Dem Social spending" has stayed high (if not higher)

Bush cut "discretionary Taxes", then increased "discretionary spending" (on Military, due to 9/11); more spending, less Tax revenue, more deficit

by 2012, FICA/SECA revenues were less than SS+MC+MC expenditures. Evidently, those programs have already begun to draw down their Trust-Funds ?

technically -- yet, individuals & corporations are still losing -$1T / yr. in Taxes (albeit, with special names, "FICA & SECA"), to the Federal Government. They may not be "individual & corporate income Taxes", but they still are Taxes on individuals & corporations. Those Social programs cost huge Money, huge Money which is taken in huge Taxes (with special names).

there has never been a deficit, always a surplus, for the Trust Funds... At least we can conclude that Medicare , Social Security Disability Insurance, and Social Security Insurance were not contributors to the deficit.

they still cost huge Money, taken in huge Taxes. Perhaps Bush cut "discretionary Taxes" all-the-more, for inability to touch "mandatory Taxes" ?

Supplemental Security Income [and] department of education...

SSI outlays total <$100B; one above chart listed DoE at 2% US budget = $60B. Both SSI & DoE combined account c.$100B (plausibly). In "big and round numbers" ($T's), SSI + DoE ~= $0T

when you say "self funded", i only want to clarify, that those Social programs were evidently passed into Law, with de facto "personal Balanced-Budget-Amendments" attached (the legislation = Law + Taxes too). I.e. for those "mandatory" Social programs, there is a de facto mini-BBA for them, according to which, sufficient Taxes are automatically taken from US individuals & corporations, to fund outlays.

at the same time, those programs cost huge Money, taken in huge Taxes, apparently "mandatory". evidently, Bush cut "what other Taxes he could"; then, months later, with "discretionary" revenues reduced, 9/11 demanded increased "discretionary" spending. Prima facie, 9/11 was "Fiscally astute", targeting the US, where there was the least overall political willingness-and-ability to pay, i.e. "on the discretionary (General fund) side" (that the "mandatory" side is, in the end, called "mandatory" by 300M Americans, proves prima facie that overall political willingness-and-ability, to take enough Tax Money to fund those "mandatory" programs, is higher, than for what those same 300M Americans relegate to "discretionary" status; 9/11 targeted "second-class citizen" programs)

Let's try and stay on point. The initial point was what were the Bush era deficits attributable to. Are they attributable to the tax cuts alone or tax cuts and increased spending? What is the increased spending attributable to? Is it attributable to simply the military build up or was there also increased spending in other programs?

The question isn't if spending and taxes are good or bad. I game for that convo, but it's something else all together.

The logic that something not changing causes something else that does change is simply weird. If x = 1 and y = 5, then x = 1 and y = 10, it simply makes no sense to say that x caused y. That's what I hear you saying, that the Bush era deficits were caused by the Dems not lowering social spending. It makes no sense.

 

[itfitzme]

How does a self funded insurance program qualify as "high dem spending"? Grandpa paid into it when he worked, now he is collecting from it. It's his ******* money.

Grandpa and the corporations he worked for paid it into, it was their money, now Grandpa gets (some of) it back

Ah, I get the sense your working from two unstated and undemonstrated premises.

1) If taxes were lower, most people would have more spending power.

2) A 3% tax on labor to the company combined with a 3% tax on income to the earner is different then a 6% tax on income.

Is that what you're saying?

 

[itfitzme]

How does a self funded insurance program qualify as "high dem spending"? Grandpa paid into it when he worked, now he is collecting from it. It's his ******* money.

Grandpa and the corporations he worked for paid it into, it was their money, now Grandpa gets (some of) it back

I always find the "where the tax is applied" thing a curiosity. Does it really matter where it is applied?

Consider sales tax. Who pay it, the purchaser or the seller? Who is it a tax on, the purchaser or the seller? Or it not a tax on anyone, just a tax on the activity?

Here's a couple of fundamental questions; if the 6.2% employer paid portion of the OASDI didn't exist, would the employee have 6.2% higher pay? Would the business have 6.2% more spending power in purchases of more labor or materials? If the 6.2% employee paid portion of the OASDI didn't exist, would the employee's spending power be 6.2% higher?

 

[DSGE]

Wow. Looks like I missed a lot of stuff here.

 

[itfitzme]

And taxes are not necessarily a barrier. Lumping them all into some "government gun" concept is over simplified and childish.

Guns are "childish" ? According to Chairman Mao Zedong, "all power flows from the barrels of Guns"

In reviewing the thread, I decided to provide further comment on this concept.

Well, Chairman Mao Zedong is wrong.

Human beings, of all creatures, are the best at considering consequences.

Behavioral changes come from the combination of two categories, positive and negative, punishment and reinforcement.

The "positive" and "negative" refer to whether the learning is the decrease of a behavior or the increase of a behavior. The other two refer to whether the environment acts on the individual in causing either discomfort or incentive.

"barrel of Guns" is a description of positive and negative punishment. And it puts all forms of punishment in terms of an extreme.

This is a tremendously oversimplified conceptualization of learning and behavior.

Even the military does not rely strictly on "barrel of Guns" in military training. Military training is replete with rewards. And fundamentally, military personnel describe themselves as motivated by a sense of brotherhood, not a sense of getting shot by the Sergeant for running away.

Just because some people seem to be motivated by only the "barrel of Guns" doesn't mean that everyone, even the majority, are primarily motivated by it.

Nor, in the complication of behavior and learning, are the four types of learning isolated. A single behavior is likely to be motivated by two of them, the threat of not acting and the reward of having acted.

I work because a) I will lose my house if I don't and b) I like living in my house.

I act, not because I am directly threatened, but because I am considerate of the future consequences, both the reward and punishment.

Simply, Chairman Mao Zedong is wrong.

 

[Widdekind]

Bush era deficits were caused by the Dems not lowering social spending...

and because Bush slashed "discretionary" Taxes, whilst raising "discretionary" spending to boot (after 9/11)

A 3% tax on labor to the company combined with a 3% tax on income to the earner is different then a 6% tax on income.

First, i thought it was 6% + 6% ?

Second, if workers realized, that they cost their corporations (6%) more than their actual paychecks; "pretended" that they made (6%) more; and then "pretended" that they were actually paying the whole (6%+6%=12%) all by themselves; then i suppose not. When you say "self-funded", you make "Dem" Social programs sound non-burdensome. But they cost employers and/or employees $1T per year -- three-quarters of employees pay more in FICA/SECA than in income Taxes (Wikipedia).

 

[itfitzme]

Bush era deficits were caused by the Dems not lowering social spending...

and because Bush slashed "discretionary" Taxes, whilst raising "discretionary" spending to boot (after 9/11)

A 3% tax on labor to the company combined with a 3% tax on income to the earner is different then a 6% tax on income.

First, i thought it was 6% + 6% ?

Second, if workers realized, that they cost their corporations (6%) more than their actual paychecks; "pretended" that they made (6%) more; and then "pretended" that they were actually paying the whole (6%+6%=12%) all by themselves; then i suppose not. When you say "self-funded", you make "Dem" Social programs sound non-burdensome. But they cost employers and/or employees $1T per year -- three-quarters of employees pay more in FICA/SECA than in income Taxes (Wikipedia).

I posted the link to the tax rates. I was using 3% + 3% as an example. You didn't answer the question. Nor did you even quote the question. Rather, you took the sentence out of context then presented it as if I had said that FICA/SECA are 3% and 3%.

What is really weird is that you present the second quote as if it is a concept of mine. I still haven't figured out why you have a habit of misquoting and misrepresentation. Is it laziness or are you being disingenuous?

Rather then quote all your comments, from other comments, I'm just going to address the whole thing generally.

Initially, the idea was what accounted for the deficits under the last Bush admin. And it seems fairly clear that it was the increase in military spending and not "social programs". After all, Medicare and Social Security are self funded and balance. There may be other discressionary spending that add up.

Given this concept, you quickly go off into a totally different topic of taxes being "stolen" or whatever.

If showing that "social programs" didn't increase, then you go after "they remained the same". If them remaining the same doesn't account for the deficit, then you just fall back on the "gov't" gun concept.

As soon as the considerations begins to touch the concept of taxes, you lose all capacity for objective reason. What you otherwise present as some reasonable math skills suddenly disappears. I get this sense that you only "do the math" when it supports this emotional bias against taxes.

I haven't "sounded like" anything. I was simply differentiating the accounts and noting that Medicare and Social Security do not account for the deficit. That you think I "sounded like" anything is simply you. Why not just be honest about it and say you don't like paying taxes, instead of trying force economic reason to fit with your a-prior bias.

Underlying this seems to be a lack of understanding of what taxes do in the macro economy as you apply micro economic laws to macro economics.

This seems most pronounced when it comes to where the tax is applied. This is why I really wish things like FICA and SECA were just applied on the income side rather than the payroll side. It would confuse you less.

It seems that you just don't like "social programs" and associated taxes. Guess what, at least half of voters do.

You rail against the "stealing" of money "by gov't gun" for Social Security and Medicare, even though they are balanced against their associated taxes. Yet, not once have you suggested that income and corporate taxes should be raised to balance increases in military spending.

It's not Bush's fault that 9/11 happened, so that excuses the deficit due to military increases. But Medicare and Social Security are still "stealing" of money "by gov't gun" even though they are balanced by taxes.

I'm just saying.

By your reasoning, if applied comprehensively, then the problem is military spending and stealing of money through taxes to support those programs, however unbalanced the expenses are compared to the receipts. After all, who has the "gov't guns", it ain't social workers.

So, to get down to some fundamentals, let me ask you this

In the long run, if the employer contribution to FICA and SECA taxes were eliminated, would lower income earners get that much more in their paycheck?

As another example, what about sales tax? If sales taxes were applied, as they are technically suppose to be, to the supplier, on the total sales when tax time comes around, rather then added in at the end of the receipt, would prices be lower?

And, return to that original question

I ask these because I get the sense that you either don't understand how the free market functions or you intentionally ignore the fundamental to force things to fit into this "stealing" of money "by gov't gun".

I ask these because I get the sense that you either don't understand how the free market functions or you intentionally ignore the fundamental to force things to fit into this "stealing" of money "by gov't gun". It's like you can't sit still long enough to address the very basics, like a ten year old squirming in their seat so much that they can't finish the math homework.

You can't even stick to a fundamental sense of direction of the ideas. Have you been diagnosed with ADHD? Cuz, that's really what it feels like.

The conversation is just going nowhere, there seems to be no point in engaging in one.

I'm just saying

 

[EdwardBaiamonte]

you intentionally ignore the fundamental to force things to fit into this "stealing" of money "by gov't gun".

well, taxes are collected at the point of a liberal gun which means they are not voluntary. Businesses will relocate to Zug Switzerland for a foreign address or Ireland for a foreign address and a foreign factory in order to avoid taxes. To avoid this liberal tax violence business taxation should be eliminated so business energy can be devoted to business rather than to avoiding taxes. Would this help the current depression? Yes, efficiency and innovation would be encouraged. This interference in the Republican free market would help end the depression.

 

[starcraftzzz]

you intentionally ignore the fundamental to force things to fit into this "stealing" of money "by gov't gun".

well, taxes are collected at the point of a liberal gun which means they are not voluntary. Businesses will relocate to Zug Switzerland for a foreign address or Ireland for a foreign address and a foreign factory in order to avoid taxes. To avoid this liberal tax violence business taxation should be eliminated so business energy can be devoted to business rather than to avoiding taxes. Would this help the current depression? Yes, efficiency and innovation would be encouraged. This interference in the Republican free market would help end the depression.

Every GOP state raised taxes from 2010-2012 so lioke always your a dumbass

 

[EdwardBaiamonte]

you intentionally ignore the fundamental to force things to fit into this "stealing" of money "by gov't gun".

well, taxes are collected at the point of a liberal gun which means they are not voluntary. Businesses will relocate to Zug Switzerland for a foreign address or Ireland for a foreign address and a foreign factory in order to avoid taxes. To avoid this liberal tax violence business taxation should be eliminated so business energy can be devoted to business rather than to avoiding taxes. Would this help the current depression? Yes, efficiency and innovation would be encouraged. This interference in the Republican free market would help end the depression.

Every GOP state raised taxes from 2010-2012 so lioke always your a dumbass

1) who's talking about GOP states??????????????????????

2) In fact only 11 states raised business taxes. How does the illiterate "lioke" that?? You get the subject wrong as well as the facts on the wrong subject!!

Are you even from America? Also, its you're not your, at least in America.