2nd Term, Part VI: Burnin' down the House

[Priceless]

Re: 2nd Term, Part VI: Burnin' down the House

So what was supposed to happen during "certain default." The country just magically runs out of money? Where does all the taxes that I pay go? How long does it take to get into the federal system and actually use that money? Not long I imagine so how can we default because we have to use the money we have instead of borrowing. It should force a hard look at some very harsh cuts but I would hope the govt could prioirtize. Then again, that may be giving them too much credit to figure out.

If your income is 10 and your bills are 15 and you set your spending cap at 10, you still owe the 5. So you have two choices if you want to eliminate borrowing. Cut the 15 or raise the 10 until it comes to 15. Unfortunately, the Teapublicans will not even consider turning the 10 into 10.1, much less 15. You want to cut spending? Let's hear your ideas.

 

[Tiggsy]

Re: 2nd Term, Part VI: Burnin' down the House

If your income is 10 and your bills are 15 and you set your spending cap at 10, you still owe the 5. So you have two choices if you want to eliminate borrowing. Cut the 15 or raise the 10 until it comes to 15. Unfortunately, the Teapublicans will not even consider turning the 10 into 10.1, much less 15. You want to cut spending? Let's hear your ideas.

That's not how it works with borrowing. If you go borrow $100k for a house, do you have to pay back the principle immediately? No, you only have to pay a portion which is interest on the debt which is typically a fraction of the total. The federal borrowing is the same way. So your premise of income versus bills is wrong because there is no way that payment to service the national debt is more than the government takes in each week/month/year/pick your time frame. You want to make sure we pay it off, eliminate unnecessary spending. Because of the shutdown we should have a pretty good picture of what departments are non-essential now so start there. How many agencies/departments had zero essential employees?

****! I don't want to get sucked into a political conversation but I'm doing it anyways. *sigh*

EDIT: Wait, are you implying that we don't need to cut spending? What's your answer then because we will run out of China's money sooner or later?

 

[Rover]

That's not how it works with borrowing. If you go borrow $100k for a house, do you have to pay back the principle immediately? No, you only have to pay a portion which is interest on the debt which is typically a fraction of the total. The federal borrowing is the same way. So your premise of income versus bills is wrong because there is no way that payment to service the national debt is more than the government takes in each week/month/year/pick your time frame. You want to make sure we pay it off, eliminate unnecessary spending. Because of the shutdown we should have a pretty good picture of what departments are non-essential now so start there. How many agencies/departments had zero essential employees?

****! I don't want to get sucked into a political conversation but I'm doing it anyways. *sigh*

EDIT: Wait, are you implying that we don't need to cut spending? What's your answer then because we will run out of China's money sooner or later?

We've already cut spending. As I've detailed before, a lot of the heavy lifting is already done. So, using a 600Bn deficit as a base...

($120Bn) War spending. The country spent $140Bn on the wars during this year. Yes we'll need some money to continue a force in Afghanistan, but these can be the savings.

($300Bn) Economic Growth. Deficit went to $1T+ at bottom, but only 700Bn of that was either bailout one year and stimulus the next. Rest is recession related. As growth continues to rise back up to 2007 levels, so should tax revenues.

($80Bn) Small tinkering to tax code and entitlements. Get rid of carried interest, oil/AG subsidies, and offshore tax shelters. Enact Medicare bargaining for prescription drugs & tort reform. All painless changes that will save big bucks.

That brings 600Bn deficit down to $500Bn. If healthcare costs continue to go down, you'd have it right there.

The trick is not to panic and bring about a second recession, ala England, by following brainless conservative austerity policies. We have our austerity already.

 

[Priceless]

Re: 2nd Term, Part VI: Burnin' down the House

That's not how it works with borrowing. If you go borrow $100k for a house, do you have to pay back the principle immediately? No, you only have to pay a portion which is interest on the debt which is typically a fraction of the total. The federal borrowing is the same way. So your premise of income versus bills is wrong because there is no way that payment to service the national debt is more than the government takes in each week/month/year/pick your time frame. You want to make sure we pay it off, eliminate unnecessary spending. Because of the shutdown we should have a pretty good picture of what departments are non-essential now so start there. How many agencies/departments had zero essential employees?

****! I don't want to get sucked into a political conversation but I'm doing it anyways. *sigh*

EDIT: Wait, are you implying that we don't need to cut spending? What's your answer then because we will run out of China's money sooner or later?

On a budget discussion thread we had a couple years ago, I cut some spending and restored Clinton Era tax rates and got us to a balanced budget this decade and eliminated all national debt in the 2030's.

 

[Tiggsy]

Re: 2nd Term, Part VI: Burnin' down the House

We've already cut spending. As I've detailed before, a lot of the heavy lifting is already done. So, using a 600Bn deficit as a base...

($120Bn) War spending. The country spent $140Bn on the wars during this year. Yes we'll need some money to continue a force in Afghanistan, but these can be the savings.

($300Bn) Economic Growth. Deficit went to $1T+ at bottom, but only 700Bn of that was either bailout one year and stimulus the next. Rest is recession related. As growth continues to rise back up to 2007 levels, so should tax revenues.

($80Bn) Small tinkering to tax code and entitlements. Get rid of carried interest, oil/AG subsidies, and offshore tax shelters. Enact Medicare bargaining for prescription drugs & tort reform. All painless changes that will save big bucks.

That brings 600Bn deficit down to $500Bn. If healthcare costs continue to go down, you'd have it right there.

The trick is not to panic and bring about a second recession, ala England, by following brainless conservative austerity policies. We have our austerity already.

If that's all the case, obviously it's not enough if we still need to borrow more. It's much better when debt goes down, not up.

When will healthcare costs go down? Mine are going up so when can I expect that to reverse? Should I be fighting the website to get enrolled instead of staying on my group plan because those premiums appear to be even higher?

On a budget discussion thread we had a couple years ago, I cut some spending and restored Clinton Era tax rates and got us to a balanced budget this decade and eliminated all national debt in the 2030's.

Well, why isn't this happening then if it's that easy?

 

[Priceless]

Re: 2nd Term, Part VI: Burnin' down the House

Well, why isn't this happening then if it's that easy?

For starters, I set taxes back to Clinton Era which is, the Teapublicans tell me, Socialism. They will block even the slightest increase. As the Teapublicans told us at the 2011 presidential debates - even if the Democrats were to propose a deal that was 99% cuts and 1% tax increase, they would oppose it. And there is no way the Democrats will (or should) do this unilaterally.

 

[Rover]

If that's all the case, obviously it's not enough if we still need to borrow more. It's much better when debt goes down, not up.

When will healthcare costs go down? Mine are going up so when can I expect that to reverse? Should I be fighting the website to get enrolled instead of staying on my group plan because those premiums appear to be even higher?

Health care costs aren't going down, their rate of growth is going down. If costs are rising less, yet the economy/tax revenues are growing, it lessens the budget impact.

When Simpson-Bowles came out, they had a set # of health care cuts they wanted to achieve. The country has already achieved them even as that plan was never put in place. Getting costs to the 3% range, as opposed to the 9% a year increase from the previous decade is key.

 

[joecct]

Re: 2nd Term, Part VI: Burnin' down the House

For starters, I set taxes back to Clinton Era which is, the Teapublicans tell me, Socialism. They will block even the slightest increase. As the Teapublicans told us at the 2011 presidential debates - even if the Democrats were to propose a deal that was 99% cuts and 1% tax increase, they would oppose it. And there is no way the Democrats will (or should) do this unilaterally.

I think you're going about it wrong. If you increase the rate, the income group that you're targeting have the resources to move their $$ out of the income tax stream putting the burden back on the income groups you're trying to "aid". Others will move to the "underground (barter)" economy and move more money out of the tax stream.

If you want to grab more income to feed the federal beast, then you need to get creative and think outside of Form 1040 and their ilk.

However, the Federal Beast is not getting any smaller. Our political masters keep adding and adding and adding. How do you reign in the Beast and get more money into the private sector which will generate more tax revenue?

If our debt is $17 trillion, it will take about 20 years of $1 trillion surpluses just to pay it off. How in heaven's name is this current crop of politicians and the public going to generate $1T surplus without cutting existing spending?

 

[FreshFish]

Re: 2nd Term, Part VI: Burnin' down the House

This quiz supposedly tells you with what party you are aligned on most issues. Apparently I'm generally a Green Libertarian who does not believe in anthropogenic global warming who is not fond of Obama's policies, who tends to align with Republicans on foreign policy issues?.

 

[Rover]

I think you're going about it wrong. If you increase the rate, the income group that you're targeting have the resources to move their $$ out of the income tax stream putting the burden back on the income groups you're trying to "aid". Others will move to the "underground (barter)" economy and move more money out of the tax stream.

If our debt is $17 trillion, it will take about 20 years of $1 trillion surpluses just to pay it off. How in heaven's name is this current crop of politicians and the public going to generate $1T surplus without cutting existing spending?

1) The ol' "no point in raising taxes cuz the rich will just hide it" isn't true. Taxes were raised this year and in 1993 and revenues went up from the top earners. This is a right wing talking point put forward by the people who don't want to pay taxes but have the money to fund think takes.

2) You need not eliminate the entire deficit. I don't know of too many developed countries that aren't running some sort of national debt. The trick is to stabilize it.

 

[Craig P.]

Re: 2nd Term, Part VI: Burnin' down the House

At that point, the Democrats need not do their own mid-decade redistricting. All they need do is allow a initiative petition on the ballot to set up an independent commission to redraw the lines.

To my knowledge, initiative petition is actually a fairly unusual construct. MA has it (which I'm sure is why you thought of it), CA has it, but I'm not sure of any other states that do. TX does not, IN does not.

 

[Handyman]

Re: 2nd Term, Part VI: Burnin' down the House

I think you're going about it wrong. If you increase the rate, the income group that you're targeting have the resources to move their $$ out of the income tax stream putting the burden back on the income groups you're trying to "aid". Others will move to the "underground (barter)" economy and move more money out of the tax stream.

If you want to grab more income to feed the federal beast, then you need to get creative and think outside of Form 1040 and their ilk.

However, the Federal Beast is not getting any smaller. Our political masters keep adding and adding and adding. How do you reign in the Beast and get more money into the private sector which will generate more tax revenue?

If our debt is $17 trillion, it will take about 20 years of $1 trillion surpluses just to pay it off. How in heaven's name is this current crop of politicians and the public going to generate $1T surplus without cutting existing spending?

Here is a novel idea...how about we raise rates AND cut spending

 

[Craig P.]

Re: 2nd Term, Part VI: Burnin' down the House

I think you're going about it wrong. If you increase the rate, the income group that you're targeting have the resources to move their $$ out of the income tax stream putting the burden back on the income groups you're trying to "aid". Others will move to the "underground (barter)" economy and move more money out of the tax stream.

It's fair to argue that increasing taxes will not be perfectly efficient at increasing revenue, but I think you're engaging in some unjustified hyperbole about how inefficient it would be.

 

[Tiggsy]

Re: 2nd Term, Part VI: Burnin' down the House

1) The ol' "no point in raising taxes cuz the rich will just hide it" isn't true. Taxes were raised this year and in 1993 and revenues went up from the top earners. This is a right wing talking point put forward by the people who don't want to pay taxes but have the money to fund think takes.

2) You need not eliminate the entire deficit. I don't know of too many developed countries that aren't running some sort of national debt. The trick is to stabilize it.

If it's really true that revenues went up, do you really expect them to hold at a higher rate next year? Especially if the economy continues to be down. I would expect a dramatic drop next year because of a period of adjustment. 93 was different because of the .com boom and the economy was massivlely better than it was now. Incomes were higher so of course tax revenues were up. Once the boom was over, I'm sure that changed in a big way.

Here is a novel idea...how about we raise rates AND cut spending

Just as long as you don't raise my rate or my employer's rate so they pay me less, I'm good.

 

[Rover]

If it's really true that revenues went up, do you really expect them to hold at a higher rate next year? Especially if the economy continues to be down. I would expect a dramatic drop next year because of a period of adjustment. 93 was different because of the .com boom and the economy was massivlely better than it was now. Incomes were higher so of course tax revenues were up. Once the boom was over, I'm sure that changed in a big way.

I expect revenues to continue to grow because the economy is growing. Furthermore the stock market growth is outpacing the economic growth, so in fact you could have even better tax returns as a result. Obviously earnings have to keep up, but I don't believe the market is too overbought at this point based on historical P/E multiples (IIRC 15 times earnings is the norm for S&P, higher #'s for techies).

 

[unofan]

Re: 2nd Term, Part VI: Burnin' down the House

do you really expect them to hold at a higher rate next year?

I expect they'll be higher than they would be if the rates were lower. As should anyone rational who doesn't believe we're on the "wrong" side of the Laffer curve. I won't make predictions for events unrelated to the tax issues.

Just as long as you don't raise my rate or my employer's rate so they pay me less, I'm good.

At least you're acknowledging your "******* you, I've got mine" attitude.

 

[Gurtholfin]

Re: 2nd Term, Part VI: Burnin' down the House

At least you're acknowledging your "******* you, I've got mine" attitude.

Who doesn't have that attitude?

I'm all for health care for everyone, but that doesn't mean I want my own lessened or made more expensive.

 

[walrus]

Re: 2nd Term, Part VI: Burnin' down the House

I'm all for health care for everyone, but that doesn't mean I want my own lessened or made more expensive.

Both of those things are going to happen

 

[Deutsche Gopher Fan]

Who doesn't have that attitude?

I'm all for health care for everyone, but that doesn't mean I want my own lessened or made more expensive.

When people utilize our health services without insurance, those costs are passed on to us anyway. Just like providers raise rates for non Medicare and Medicaid people to make up for what they don't make on the gov reimbursement rates.

 

[Gurtholfin]

Re: 2nd Term, Part VI: Burnin' down the House

Both of those things are going to happen

No indication of that at all.