The 19 Percent Solution

How to balance the budget without increasing taxes

(Page 4 of 4)

Discretionary Spending

When it comes to discretionary spending, there are obvious cuts that any serious spending audit would demand. The Department of Education, created in 1980 under Jimmy Carter, has demonstrably failed to improve education results. Ronald Reagan talked about abolishing the department but did nothing to dismantle it. Under George W. Bush, federal funding for education increased by 50 percent in real dollars without anything to show for it other than higher debt levels. The department should be dumped altogether, along with farm subsidies and virtually all spending by the energy and commerce departments.

Then there is military spending, which at around $700 billion for fiscal year 2010 is one of the largest items in the federal budget. Pentagon spending has become sacrosanct among many conservatives who otherwise attack the government as incompetent and spendthrift. In an October 2010 op-ed in The Wall Street Journal, American Enterprise Institute President Arthur Brooks, Heritage Foundation President Ed Feulner, and Weekly Standard Editor Bill Kristol fretted that “our active-duty military is two-thirds its size in the 1980s,” as if the ideal number of troops was set in stone during the last decade of the Cold War. Noting that growth in mandatory spending has outpaced spending on the Pentagon, the authors argued that we should opt for guns rather than butter, writing: “Congress can make a difference…by insisting that the Obama administration endorse responsible defense budgets instead of throwing our money down the well of entitlement expansion.”

Brooks, Kristol, and Feulner are right to imply that tradeoffs exist in the budget, but they are wrong about how to address them. The question isn’t whether entitlements or military spending should be cut. It’s how much both can and should be cut. If the United States cannot afford an open-ended commitment to retirees regardless of need and income, it certainly cannot afford an open-ended commitment to Pentagon budgets hashed out when the Soviet Union controlled half of Europe.

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Last July, Reps. Barney Frank (D-Mass.) and Ron Paul (R-Texas) wrote a letter signed by 55 other legislators that called for a thorough reappraisal of military spending, noting that the defense budget accounts for 56 percent of all discretionary spending. Within the next few years, defense spending will rise to almost $900 billion annually before tapering down again. Obama’s debt commission lays out $100 billion in military cuts, a number that could easily be increased and even doubled through steps such as scrapping obsolete weapon programs and shifting the military to the lighter, smaller strategic model envisioned by Secretary of Defense Donald Rumsfeld before 9/11. While silent on the ongoing wars in Iraq and Afghanistan, the commission suggests that basic war spending be outlined by the president each year, a procedure very much at odds with the way George W. Bush used emergency supplemental spending bills to pay for conflicts that had been underway for years. 

Specific cuts can and should be debated, as the political class belatedly grapples with a crisis of its own making. But one idea that should be rejected early on is the notion that revenue shortfalls got us into this mess and that new taxes are needed to pull the country out of it. As calls for revenue increases come fast and furious, keep the number 19 in mind. Until federal spending is brought down to 19 percent of the economy or less—something that was accomplished with little trouble for the years 1997 through 2002, not to mention most of the period between 1950 and 1970—no serious solution will be possible. 

Nick Gillespie (gillespie@reason.com) is editor in chief of reason.com and reason.tv. Contributing Editor Veronique de Rugy (vderugy@gmu.edu) is a senior research fellow at the Mercatus Center at George Mason University.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Old Mexican||

    New at Reason: Nick Gillespie and Veronique de Rugy on How to Balance the Budget Without Increasing Taxes


    Why do you hate the [choose your prefered rent-seeker here] poor/children/minorities/foreigners/Firemen/teachers so much, Veronique?

  • ||

    You forgot the elderly.
    It's okay, everyone forgets the elderly.

  • Old Mexican||

    The elderly are not my prefered rent-seekers.

  • i give up (formerly some guy)||

    I think Old Mexican is an elderly.

  • ||

    The elderly forget the elderly all the time. No big deal.

  • Thomas Paine||

    I suggest you learn what "rent seeker" actually means....

  • Old Mexican||

    The feds can spend more than the available revenue by literally printing money or by taking on massive levels of debt that future generations of Americans will have to pay off.


    In a nutshell: It doesn't matter if government raises taxes, that will not balance the budget or reduce the deficit - you have to get rid of the spendthrift.

  • Bucky||

    man, i just don't get it!
    i do not think that people are going to sit idly by and watch hand wringing and dithering...

  • Tony||

    And we aren't raising taxes because... we're playing a parlor game? Oh, because according to the warped, destructive new fiscal policy stance of the right, taxes can never go up, ever, for some reason.

  • Bucky||

    what? what do raising taxes have to do with "STOP SPENDING NOW"?

  • Tony||

    And what do mindless slogans have to do with good policy?

  • Bucky||

    "warped, destructive new fiscal policy stance of the right..."
    ahem, mindless slogans?

  • Red Rocks Rockin||

    Bucky, you're asking tony for intellectual consistency? The guy can't even do basic math.

  • Tony||

    Basic math contains a plus sign, not just a minus sign.

  • Red Rocks Rockin||

    Basic math contains a plus sign, not just a minus sign.

    Neither of which you've shown yourself competent enough to employ.

  • ||

    It also contains a division sign.

    I'd like to take the federal budget and divide it in half. Then we can use your plus sign.

    With both, perhaps we will be saved from the abyss.

  • ||

    Spending is raising taxes. Which is why spending is the problem.

    Which of course you well know.

    'parlor game' is apt though. You pretend that if taxes were raised that spending would be cut.

    If it were possible to take back the plunder from the redistributees among the rich (the poor too, but of course they don't still have it) without worse consequences I'd be on board. But it's not. So we just want the plunder to stop or be drastically minimized.

    Regardless you don't accept that theft is bad in the first place. You just want to be the one doing it.

  • sarcasmic||

    Did you miss the part where raising taxes does not increase revenue?

    Raising taxes decreases the incentive to increase one's income. Why bother if it's going to be taken away? This decreases overall economic activity.

    Raising taxes takes money out of the economy that would be put to productive uses, also decreasing overall economic activity.

    Decreased overall economic activity means decreased government revenue.

    In addition the super wealthy, the ones that you and your communist ilk so envy, are able to move their assets and avoid taxes while mere peons like us cannot.

    Add it all up and raising taxes does not do what you want it to do, unless what you want is to crush the economy.

  • Tony||

    No I didn't miss the thousandth iteration of the falsehood that increased tax revenues don't increase revenues. And I didn't miss the misleading-by-design chart of revenues vs. spending as a percentage of GDP.

    "Decreased overall economic activity means decreased government revenue."

    That's the one true thing you said. The question becomes, how do you increase economic growth? Tax cuts are proven not to do it efficiently. And tax hikes on the wealthy, to a certain unfathomable point, don't decrease economic growth either. You're trying to pretend that tax increases always decrease revenue and cuts always increase it. That is not some kind of ironic truth, it's a flat out Orwellian contradiction. I like how you threw in a little extortion as an excuse for never raising taxes. How about we have policies that fix such loopholes?

  • sarcasmic||

    Increased tax rates do not necessarily increase revenues.

    rates != revenues

    Let's say I work 55 hrs a week at current rates. Then the tax rate is hiked on the upper margin of my income. Instead of keeping 67% of my overtime pay I am only allowed to keep, say, 50%.
    Now, on an hourly basis, I am paid less for my overtime than for my straight time!
    I say "screw this" and decide to spend those 15 hours doing something else.
    The increased tax rate resulted in less economic activity and less overall revenue from me.
    Multiply that over the entire economy.

    It's all about incentives. High marginal tax rates take away incentive to produce, which results in less economic activity and less overall revenue to the state.

  • ||

    Let's say I work 55 hrs a week at current rates. Then the tax rate is hiked on the upper margin of my income. Instead of keeping 67% of my overtime pay I am only allowed to keep, say, 50%.
    Now, on an hourly basis, I am paid less for my overtime than for my straight time!
    I say "screw this" and decide to spend those 15 hours doing something else.
    The increased tax rate resulted in less economic activity and less overall revenue from me.
    Multiply that over the entire economy.

    You are wasting your time.

    Tony does not want to accept real world facts because they conflict with his ideology. It does not matter how you describe those facts....he will always deny them because his faith prevents him from accepting them.

    You may as well be trying to explain natural selection to the church lady.

  • ||

    This. But that said the point of arguing is not to convince Tony. The point is to show Tony's arguments as farcical to the reader who may not yet be sure what they think.

  • ||

    + ?

  • Doktor Fail||

    When has anyone ever had the idea to just raise taxes on overtime pay??
    You create this perfect straw man to support your own view then magically decide that it applies to everything. Where does it follow that when an individual's tax rates go up they decide to work less?? Wouldn't it make more sense to for them to work more to return to the same level of take home income?

  • sarcasmic||

    "When has anyone ever had the idea to just raise taxes on overtime pay??"

    I see you do not understand how marginal tax rates work.

    "Where does it follow that when an individual's tax rates go up they decide to work less?? Wouldn't it make more sense to for them to work more to return to the same level of take home income?"

    I see you have never paid taxes either.

  • Doktor Fail||

    Marginal tax rates do not effect overtime pay. You made up this "overtime pay tax" out of nothing. Individual income is taxed based on TOTAL INCOME, regardless of overtime.

  • Old Mexican||

    Re: Doktor Fail,

    Marginal tax rates do not effect overtime pay. You made up this "overtime pay tax" out of nothing.


    He was illustrating a point, you nincompoop!

  • sarcasmic||

    "Marginal tax rates do not effect overtime pay."

    I see you've never worked overtime.

    You really need to get out of mom's basement and get a job.

    I know I know, working doesn't pay as well as getting disability, but there is a certain amount of pride in earning what you have.

  • ||

    Actually, Doktor, there was a time when my behavior was exactly as sarcasmic describes, so his (her?) point is valid. I worked up to 16hrs/day, 8 straight pay, 8 OT, for X days on end. I quickly learned that after more than so many hrs my pay/hr was less than straight time - not worth the lost rest and family time, though total pay increased. Like all my coworkers I turned down the extra work before that point.(We were union, btw, at a large corp - very good pay and bennies).

  • Amakudari||

    Marginal tax rates do not effect overtime pay.

    Ridiculous. Overtime pay is mostly going to be taxed at your marginal tax rate. It's the most appropriate rate to use when figuring out how much you'll receive, net, from working overtime, getting a bonus, etc.

  • ||

    "Marginal tax rates do not effect overtime pay" In a round-about way, it does. Work enough overtime, and there's the possibility of being thrown into a higher tax-bracket.
    In the end, if you know working more than X hours will put you in a higher tax bracket, you will do your damndest stay under X.

  • ||

    Real life situation. Household income over $300,000 3 yrs in a row. Realized it was too much work for what little we gained due to paying so much in federal income taxes those yrs, so my husband stopped taking on so much work and went back to spending time with me and our kids.

  • Tony||

    All you're doing is repeating the tired old nonsense that the Laffer curve is real, and real at all levels of taxation. Nobody is talking about rates that will affect incentives. It's a curve, not a line.

  • Random Dude||

    Tony: explain.

    Please do provide humorous and enlightening anecdotes about how if we had higher marginal top income rates, the federal government would have more money. Also, do indeed provide any attached cycles, supercycles, epicycles, and astrological corrections necessary to transform tax rate "fluctuations" to fit the data.

    Hugs and Kisses.
    XOXO

  • ||

    @Tony.

    Oh my. You've failed a basic test of intelligence measurement.

    It's a curve, not a line. -- Tony

    Hello, McFly? *thud* *thud*

    A line is a curve with null curvature.

    Quit while you're oh-so-far behind, Tony.

  • Mr. FIFY||

    Tony denies it, but the only reason he wants taxes raised is to Stick It To Rich White People.

    Revenge as economic policy, just like Barry described when talking about raising capital-gains taxes.

  • Tony||

    That's better than your motivation, which is pretty much articulated as sticking it to poor people for being morally unfit. There is a hell of a lot more cheap moral finger-pointing on your side. I want tax rates for everyone to be as low as possible while still maintaining a healthy fiscal situation and a degree of progressivity so that nobody is burdened by taxes. That's all. Whether I like someone because of how much money they have is totally irrelevant.

  • Old Mexican||

    Re: Tony,

    That's better than your motivation, which is pretty much articulated as sticking it to poor people for being morally unfit.


    You think not giving them money that does not belong to you is "sticking it" to them?

    Hmm....

    I want tax rates for everyone to be as low as possible while still maintaining a healthy fiscal situation and a degree of progressivity so that nobody is burdened by taxes. That's all.


    You mean you want to give away money without consequences?

    What's a healthy fiscal situation, and why would a fiscal situation be a good thing? Why not having NO fiscal situation and just keep your money?

  • Tony||

    I think giving poor people money that doesn't belong to them is better than giving rich people money that doesn't belong to them, which is what we've been trying for decades. Or do you suppose they somehow earned their vast increase in the share of wealth? Be consistent. It's always justified for the rich to get richer. If the poor get richer, it's morally distasteful. You're not principled, you're just a selective moral prig.

    Who decides what money belongs to whom in the absence of policy? Finders keepers isn't a way to organize society.

  • Mr. FIFY||

    Fuck you, Tony. I'm poor and I refuse to go on the dole.

    This is where you chastise me for not making enough money.

  • Tony||

    Fuck you, Tony. I'm poor and I refuse to go on the dole.

    Then not only are you a failure as a self-motivated human being according to your own principles, you're dumb. What, you think you'll be rewarded in the afterlife for your heroic stance of denying something most other people feel they are perfectly entitled to? I'm not impressed by self-flagellation whether done with a whip or a political philosophy.

    Besides, you already are on the dole. If you're poor, then by our (rather minimally) progressive tax structure, you're getting more out of government than you're paying for. (Roads!)

  • Mr. FIFY||

    I *knew* you'd stoop to shit like that, Tony.

  • Red Rocks Rockin||

    Whether I like someone because of how much money they have is totally irrelevant.

    Too bad it's your sole motivating factor for every policy decision you support. You're the last person who should be scolding anyone for cheap moral finger-pointing, you poz.

  • Tony||

    A line is a curve with null curvature.

    Listen here, pedant. It wouldn't be called the Laffer Curve if it were straight.

  • ||

    The Laffer curve is perspicuously real. Otherwise you have to explain why 99% taxation would not derive more revenue.

    The thing about the Laffer curve that simplistic progressives can't seem to grasp is the time index. This is a general problem with Keynesians and collectivists of all flavors.

    In other words consequences.

    Collectivists deny consequences.

    In the case of the Laffer curve, clearly if you raise the tax rates 10% you will get more revenue the next year, and the inverse is true.

    The point is that 10% increase will over time reduce growth. And the 10% decrease over time increases growth. In absolute terms, over time, your increase in taxes will produce less real revenue than had you not raised taxes.

    To quote the famous statist economist Greg Mankiw:

    My guess is that that the short-run answer and the long-run answer are quite different. For example, if you raised the top rate from 35 to, say, 60 percent, you might raise revenue in the short run. Over time, however, you would get lower economic growth, so the additional revenues would fall off and eventually decline below what they would have been at the lower rate.... I will pass on offering a specific number, as it would require more time and thought than I can offer just now, but I will opine that I think the long-run answer is actually more important for policy purposes than the short-run answer.

  • Charles||

    67% -> 50%?!? That's madness.

    For most of us try 75% -> 73%, and then only if your overtime bumps you into the next tax bracket.

    You seriously need to come up with a better example... something that someone (anyone) might actually believe.

  • Mann42||

    Serious question, I'm actually looking for facts and statistics that support this. If anyone knows of any reading or studies, please point me in the right direction.

    Are there any actual numbers to prove that increased tax rates actually result in people working less or acquiring greater income? I like the sound of the incentives argument, but do we have any actual proof that's how it works?

    My own experiences are purely anecdotal, but I have never seen anyone I know work overtime or get a job making more money, reach the next highest tax bracket, and then stop working overtime or find a job making less money. I get that they'll have less income, and thus spending money, because of the taxes, but I've never seen it be the disincentive that common wisdom seems to dictate (at least, not at the levels they've been the last 30 years).

    In fact, I've seen the opposite happen, at least once. After realizing that working overtime wasn't going to get him the money he needed because of the tax bracket, it actually motivated him to finally get his own business plan together and eventually work for himself. He figured that if he was going to be taxed more anyway, he might as well find a way to make enough money to overcompensate the taxes.

    But like I said, anecdotal, which is why I'm looking for actual statistics and numbers.

  • PETE||

    crickets ...

  • Old Mexican||

    Re: Tony,

    No I didn't miss the thousandth iteration of the falsehood that increased tax revenues don't increase revenues.


    You mean tax rates. And your belief is false: An increase in tax rates does NOT provide higher revenues, as people simply stop producing (i.e. investing), instead placing their money in securities and bonds (i.e. no different than putting their money under the mattress.)

    The question becomes, how do you increase economic growth? Tax cuts are proven not to do it efficiently.


    Yes, it was proven -> 1921-1929.

    And tax hikes on the wealthy, to a certain unfathomable point, don't decrease economic growth either.


    Yes, it does -> 1937-1940. A major tax hike by the FDR administration sent the very tenuously recuperating economy back to a spiraling drop. Things became even worse than when the Depression started.

    You're trying to pretend that tax increases always decrease revenue and cuts always increase it.


    Well, you know how it is - he says that only because it's true.

  • ||

    An increase in tax rates does NOT provide higher revenues

    You just need to be careful in making this assertion. Over time this is true. But a short term tax increase will increase taxes over the short term. Business and people can't move instantly. Marginal businesses take time to fail completely.

    Given enough time, any tax rate above zero will always produce more revenue than any other higher tax rate. However the time involved could be quite long. IE a 1% flat tax would grow the economy like Kudzu. (can you imagine!) However it would take decades before the net tax revenue would equal what we have today.

  • sarcasmic||

    "The question becomes, how do you increase economic growth?"

    Easy. You tear down barriers to starting businesses (deregulation) and allow people to keep more of their money (tax cuts).

    This way new businesses provide jobs and people are left with more money to spend on the goods and services offered by those new businesses.

    Freedom is an amazing thing!

  • Doktor Fail||

    YAY! Then we can keep all our extra money not "lost" from taxes into buying the services the government no longer provides. Whether or not they provide those services as efficiently or as broadly is irrelevant becuase govment is aaaalways eevil!!!

  • DK||

    First off, it's pretty easy to see that governmental provision of nearly any service possible is inefficient. Look at the Postal Service, DMV, Department of Education, etc. All horrendously inefficient bloated bureaucracies.

    Even if they were comparably efficient to free-market enterprises, we still go back to the basic argument that, because governments can only provide services by force and coercion (taxation = taking money from citizens under threat of imprisonment), it's ethically repugnant. So you're right - I do believe government is evil, as it is the epitomization of the use of force to achieve dubious ends.

  • Doktor Fail||

    Also make sure you ignore all the good government programs including the interstate highway system, public health programs that eradicated smallpox, polio, and cholera, the FDIC, the armed forces, the FAA which keeps planes from falling from the sky, the FDA which keeps our food pure, the EPA who keeps our water clean, because otherwise DK's points do not translate into reality. Also make sure to ignore that not paying taxes amounts to stealing from the government, because whether or not you agree with government programs you still use them.

  • ||

    ...the FAA which keeps planes from falling from the sky...-- Doktor Fail

    What a silly, false belief held by Doktor Fail.

    It's thrust and lift that keeps airplanes aloft by counteracting drag and gravity. The FAA has nothing to do with aerodynamics.

    You have failed Aerodynamics 101, Doktor Fail. And thus your mediocre IQ has been exposed for not knowing the basics of aerodynamics as well as economics and politics and slew of other knowledge.

  • Old Mexican||

    Re: Doktor Fail,

    YAY! Then we can keep all our extra money not "lost" from taxes into buying the services the government no longer provides.


    The government provides services?

    Because it that is the case, then the local mobs provide 'services' as well when offering protection to local businesspeople. It's the same business model as the government's, after all...

  • Doktor Fail||

    If you have ever driven on the highway you have used a government service

  • sarcasmic||

    Perhaps you were not aware of this, but highways are supposed to be maintained using gasoline taxes, not income taxes.

    The presumption is that if you don't use gas then you don't pay to maintain the roads that you don't use.

    This is different from the disability check that you use to pay for your video games and baby oil.

  • ||

    Doktor appears to subcribe to the common fallacy that if we empower the gov to do some things, we must empower it to do all things; Hang the cost, efficiency, and impact on liberty.

  • Old Mexican||

    Re: Doktor Fail,

    If you have ever driven on the highway you have used a government service


    Not unless the government is driving ME. But maybe it was and I didn't know until now, or maybe - just MAYBE - you are an imbecile who cannot differenciate between a service and a good.

  • ||

    And isn't that what the taxes we pay on gas and when we buy tires is for?

  • Proud fascist||

    "Because it that is the case, then the local mobs provide 'services' as well when offering protection to local businesspeople. It's the same business model as the government's, after all..."

    The government tells you that if you work over the table in that country, then you are also obliged to pay into certain expenditures.

    You are free to move to another country.

    Mob bosses suddenly introduce an "incentive" to pay but do not actually provide anything.

    Government allows you to choose with fair warning - if you want to be a part of the nation and get the benefits from being part of the pack, you have to do some things you don't want to do. Like pay taxes.

    Humans are pack animals.

    All American libertarians are just complete idiots. You're even lower than the Abrahamites.

  • Old Mexican||

    Re: Proud Fascist,

    The government tells you that if you work over the table in that country, then you are also obliged to pay into certain expenditures.


    Exactly - just like the Mob operates!

    "Hey, youse, you woik around 'ere? You must gives our dues if youse wants to woik in this town!"

    You are free to move to another country.


    Yes, very moral - put out, or get out.

    Mob bosses suddenly introduce an "incentive" to pay but do not actually provide anything.


    I would disagree - they provide their lack of presence until next payday.

    Government allows you to choose with fair warning - if you want to be a part of the nation and get the benefits from being part of the pack, you have to do some things you don't want to do. Like pay taxes.


    Something like "being born into servitude", like a serf, would it not?


    Humans are pack animals.


    And you are quite the jackass yourself, PF.

  • Joe R.||

    "You are free to move to another country."

    I notice that that line of reasoning always goes one way. The speaker never offers to leave if he doesn't like it MY way.

  • Doctor K||

    This line in the article sums it up...
    Giving Washington yet more money will grant it more power over the economy, but it won’t guarantee anything resembling a balanced budget.
    The questions for me always go back to "Who's money is it in the first place?"

    "Is this a function of the Federal gov't as laid out by the Constitution?"

    "And if yes is this money better spent by the bureaucrats or the tax payer that it was confiscated from?"

    and lastly...

    Instead of trying to "close loopholes" why not make the US the tax haven of the world...?

    You catch more flies with honey than vinegar....

  • Red Rocks Rockin||

    And I didn't miss the misleading-by-design chart of revenues vs. spending as a percentage of GDP.

    "HOW DARE YOU ATTEMPT TO PERSUADE ME WITH YOUR REGRESSIVE, HETERONORMATIVE HISTORICAL FACTS!!!"

  • Gregory Smith||

    Yes it does. When FDR raised the top tax rate to 90% tax revenues went down dramatically. Learn from history, high tax rates don't work, they only encourage people to cheat, put their money in tax havens, and take less risk by engaging in less business ventures.

    http://libertarians4freedom.blogspot.com/

  • ||

    So keeping my own money is destructive? To whom?

  • Sovereign Immunity||

    The Entitlement Class.

  • ||

    I hate those bastards.
    *shakes a fist*

  • sarcasmic||

    To those who feel that you will spend it incorrectly.

    They feel that government spends your money much more wisely than you.

  • Doktor Fail||

    The government provides the infrastructure on which individuals can make money. It is an implied contract that the government will supply and maintain roads, clean food and water, and safe working conditions if you provide them with a portion of your income.

  • sarcasmic||

    I don't recall ever signing this 'social contract' you speak of.

  • Doktor Fail||

    Do you sign a contract everytime you eat out to agree to pay before you leave?

  • sarcasmic||

    Holy shit you're dumb.

  • Doktor Fail||

    No, sir, it is YOU who is dumb. You don't have to sign a contract for it to exist. Its called an "implicit contract".

  • sarcasmic||

    I know what "implicit contract" means.

    Your scenario fails miserably.
    I'll amend it a bit to make it more like the 'social contract' you speak of.

    Instead of "Do you sign a contract everytime you eat out to agree to pay before you leave?"

    What if the restaurant owners got together and hired some people with guns to go door to door and demand money or be shot. In exchange people would be allowed to go to these restaurants and eat without paying, because they already payed.

  • Proud fascist||

    You are free to leave the country anytime you want. Please hurry up.

    If you want to change the taxation levels via democracy, I will oppose you but accept the attempt. You are free to influence the organization or leave it at any time. But don't act as if growing up in a country since childhood, well aware of the fact that you will be taxed for certain things once you start working, is not enough of an implicit country.

    The US has very low taxes and the especially low taxes among private households today are not helping. The idea of lowering the deficit without raising taxes is basically religious.

    Democracy is just barbarism in a form most people can stomach. If you feel you are strong enough, break away with the other Galtians and make your own society somewhere. Use force and power.

    Don't sit and whine like a little insect.

  • MJL||

    are there ANY inalienable rights, as written in our constitution,or are all rights subject to will of the majority?

  • Joe R.||

    "You are free to leave the country anytime you want. Please hurry up."

    You first, fuckhole. We'll be much better off for it.

    "If you want to change the taxation levels via democracy, I will oppose you but accept the attempt. You are free to influence the organization or leave it at any time."

    You do realize that your argument is that you and your friends can gang up and vote to kick me out of my own home, right? Does that in any way seem moral to you? If so, then you are a vile, evil little toad.

  • Joe R.||

    "Democracy is just barbarism in a form most people can stomach."

    Ah...ha. OK, you got me. Well played, sir.

  • Old Mexican||

    Re: Doktor Fail,

    Do you sign a contract everytime you eat out to agree to pay before you leave?


    Don't tell me! Don't tell me!!!

    There's an "implied contract"! Am I right? Am I? Am I right?

    There's a difference, DF. When you go to eat, the supplier and you participate in a voluntary exchange - that's the contract, you give one thing in exchange for the other.

    When it comes to government, the government simply TAKES, and then pretends to give something in return. That's no contract by any means - NO 'contract' created under duress is valid, ever.

  • Proud fascist||

    "When it comes to government, the government simply TAKES, and then pretends to give something in return."

    It gives something in return - a society conducive to social stability and healthy economic activity. It's a matter of transaction costs as well - do you have time to check if the corporations are not feeding you poison or destroying your water (and are you ready to bet your health on the notion that *all* corporations doing unethical things will be punished by consumers? Can you convince others to do so?)?

    You can leave the organization/country if you don't want to sacrifice yourself in order to be in a social agreement to reduce the level of competition and uncertainty. I would applaud such a strong attempt to become independent.

    But don't sit and whine like you've been cheated or been denied something. You know full well what happens when you agree to join the security of the pack and subjugate yourself to democracy.

    I know you Christians/libertarians love to villainize and victimize. But belay those pathetic instincts and realize why organizations and nations come to be, and what being a part of one entails.

  • Magical Thinking||

    It gives something in return - a society conducive to social stability and healthy economic activity. It's a matter of transaction costs as well - do you have time to check if the corporations are not feeding you poison or destroying your water (and are you ready to bet your health on the notion that *all* corporations doing unethical things will be punished by consumers? Can you convince others to do so?)?

    You can leave the organization/country if you don't want to sacrifice yourself in order to be in a social agreement to reduce the level of competition and uncertainty. I would applaud such a strong attempt to become independent.

    But don't sit and whine like you've been cheated or been denied something. You know full well what happens when you agree to join the security of the pack and subjugate yourself to democracy.

    I know you Christians/libertarians love to villainize and victimize. But belay those pathetic instincts and realize why organizations and nations come to be, and what being a part of one entails.

  • Old Mexican||

    Re: Proud Fascist,

    It gives something in return - a society conducive to social stability and healthy economic activity.


    Oh, you think people don't do that themselves?

    I know you Christians/libertarians love to villainize and victimize.


    You pretty much know nothing. First of all, I ain't no Christian, I'm a non believer.

  • Brian D||

    "When it comes to government, the government simply TAKES, and then pretends to give something in return."

    It gives something in return - a society conducive to social stability and healthy economic activity."

    Well the government seems to have failed to keep up their end of our implicit contract or this discussion wouldn't even be happening, would it? Can I demand my money back?

  • Bucky||

    actually the founders intention was to keep "gub'mint" out of lives as much as possible, not to "provide the infrastructure on which individuals can make money".

  • Old Mexican||

    Re: Doktor Fail,

    The government provides the infrastructure on which individuals can make money.


    Oh, such naivette! You brought tears to my eyes, DF!

    It is an implied contract that the government will supply and maintain roads, clean food and water, and safe working conditions if you provide them with a portion of your income.


    An "implied" contract? Wow! I wish I could get away with one of those! Sounds so mobbish! Imagine me taking someone's money and saying "Wait a minute - there's an implied contract between us two!" Why can't one get away with shit like that?

    "Implied contract"

    Oh, sorry, DF. THERE'S NO CONTRACT between government and anybody, implied or otherwise. Government simply TAKES your money and then PRETENDS to do something with it to keep people not angry. Panem et circenses

  • Proud fascist||

    " THERE'S NO CONTRACT between government and anybody, implied or otherwise."

    Um, you agree to stay in a country built and kept together in a lot of ways by taxes. A nation or society is a state of reduced barbarism - it's basically deescalation in a harsh world of scarcity.

    It is degenerate, but it is what feels best for most people.

    You are free to leave the country so we don't have to put up with your religious shrieking, and you can also use democracy to lessen expenditures and taxes. Let's see a mob boss victim have democratic power to escape the predicament :D.

    Every second you don't break free from the US and live on your own is a continuous admission that you are too weak to live on your own. You can be your own society, but you are too lazy and weak. So stop whining like a little puppy and at least try to work through democracy to ease your pains. Of course, I will oppose such idiocy, but at least I will respect the work you put into it.

  • Old Mexican||

    Re: Proud Fascist,

    Um, you agree to stay in a country built and kept together in a lot of ways by taxes.


    "But it wasn't rape, your honor, as she did not say no!! Honest!"

    A nation or society is a state of reduced barbarism - it's basically deescalation in a harsh world of scarcity.


    Why don't you take a piece of candy or something? Your writting is starting to slur...

    Every second you don't break free from the US and live on your own is a continuous admission that you are too weak to live on your own.


    Oh, you mean "aquiescing by pusillanimity"?

    "Honest, your honor! She wanted it, otherwise she would have fought back!"

  • Ron||

    I live in a private subdivision. our water is from a well our sewers are private and every year we repair our own roads and even plow the snow our selves seems to work pretty well without the governement. Oh and most of have gardens for food and either raise meat or hunt.

  • PETE||

    "We even wash our own BMWs and hand-make our Christmas cards for the nanny and the chef." Sounds like heaven! Why can't everyone in America be as self-sufficient as you and your neighbors? You, sir, are a shining beacon on a hill.

  • ||

    Doktor, in a free society the "implied contract" we have with government is that it exists by our will, does what we want it to, when we want it to, how we want it to, with what tools we give it, and not one bit more; when we say "stop!" it stops. It is not an entity with its own independent existance, will, and rights. Please don't treat it as such.

  • Old Mexican||

    Re: Tony,

    And we aren't raising taxes because...


    We don't have a personal problem with money?
    We like to keep what we earned?
    Our money is our money?

    Oh, because according to the warped, destructive new fiscal policy stance of the right, taxes can never go up, ever, for some reason.


    Not raising taxes is destructive?

  • Tony||

    It's destructive to require that taxes never go up, ever. It's utter insanity, which is not a good ingredient for sound policy.

  • ||

    You keep repeating it, yet you haven't really explained how this is destructive. Please try again.

  • Old Mexican||

    Re: Tony,

    It's destructive to require that taxes never go up, ever. It's utter insanity, which is not a good ingredient for sound policy.


    You're just asserting it, instead of giving a reason why it's destructive. Your answer doesn't answer anything.

  • MNG||

    I'll give this one a try. It's destructive because there will be times where the government will be more expensive and thus will need to have more money coming in or face deficets. For example a war.

  • Old Mexican||

    Re: MNG,

    It's destructive because there will be times where the government will be more expensive and thus will need to have more money coming in or face deficets. For example a war.


    You're begging the question, MNG.

    "It's destructive because it would be destructive if we don't do it."

  • MNG||

    OM I've told you that you really should leave the begging the question thing alone since you don't seem to understand it.

    I said it was destructive because it can lead to situations such as where government spends much more than usual without increasing revenues and a deficet results. Yes, "deficets are destructive" is implied, but as I've tried to explain to you an implied premise is not begging the question.

  • Old Mexican||

    Re: MNG,

    OM I've told you that you really should leave the begging the question thing alone since you don't seem to understand it.


    No, my friend, I fugured out it is YOU who doesn't understand. Begging the Question or Peticio Principii means using a statement that looks or is the same as your conclusion, or assuming your conclusion when arguing.

    http://philosophy.lander.edu/logic/circular.html

    When you say the following: "It's destructive [not to raise taxes] because there will be times where the government will be more expensive and thus will need to have more money coming in or face deficits", you are already assuming the destructive nature of taxation in order to conclude it's destructiveness.

    You don't seem no notice but your conclusion is the same as your premise: it is destructive not to raise taxes because it would be destructive not to do so in case of war or emergencies. This is circular thinking.

    Yes, "deficits are destructive" is implied


    That's not why your argument is fallacious. You are arguing that not raising taxes is destructive because not doing so would be destructive, an explanation that explains nothing. Even if deficits themselves were 'destructive', that in itself does not explain why the limits on tax rates would be destructive - you simply assume it is to conclude it is.

    It would be the same in this case" "Not looking for another job to complement my income would be destructive because then I would not cover my wife's spending". That statement only serves to indicate my logic is circular, as my wife's spending is something beyond my personal control, my explanation not explaining anything.

  • Old Mexican||

    Sorry, the "the destructive nature of limited taxation"

  • MNG||

    I'm assuming, or rather the premise is implied, that deficets are bad. It's no more begging the question than responding to the question of why smoking is bad for you with the answer "because it causes cancer."

    The argument is like this:

    Not raising taxes during emergency spending causes deficets.
    Deficets are destructive (implied)
    Therefore not raising taxes during emergency spending is destructive.

  • MNG||

    You make this mistake so much, you seem to think that disagreeing with a premise is begging the question. Premises will always assert that something is the case, if that is not the case then the argument is not sound (though perhaps valid), but it is not begging the question.

  • Old Mexican||

    Re: MNG,

    I'm assuming, or rather the premise is implied, that deficets are bad.


    MNG, please don't bury yourself further.

    It's no more begging the question than responding to the question of why smoking is bad for you with the answer "because it causes cancer."


    It's not the same argument, not even in the same form, MNG. Smoking is positive action, non taxation is negative action or inaction.

    The argument is like this:

    Not raising taxes during emergency spending causes defic[i]ts.
    Defic[i]ts are destructive (implied)
    Therefore not raising taxes during emergency spending is destructive.


    You're not even trying hard enough, MNG. Your very first premise establishes unequivocally that what creates the deficits is SPENDING, not lower taxes, even though you try to throw the red herring there. So how can then one conclude that it is lower taxes that create the deficits when you disprove yourself on the very first premise?

  • Bucky||

    ^^what he said^^

  • Edwin||

    it's funny. OM tries to use typical libertarian "logical fallacies" arguments but even sucks at that

  • Mr. FIFY||

    What do YOU offer, Edwin?

    By that, I mean "substance".

  • ||

    It's destructive to require that taxes never go up, ever. It's utter insanity, which is not a good ingredient for sound policy.

    Here is a list of people who disagree with Tony on this issue.

    Kennedy, Gore, and Obama.

    That is all.

    Be sure to tip your waitress.

  • Doktor Fail||

    Its actually pretty simple math. You cannot provide less to the government and maintain the same level governing. Its just like moving any kind of fluid, the quantity going in must be greater than or equal to the quantity coming out.
    The problem is the people who want to cut taxes don't want to cut an equal amount of government.

  • sarcasmic||

    "The problem is the people who want to cut taxes don't want to cut an equal amount of government."

    In the case of Republican politicians that is a true statement.

    However that is not the case for everyone, though it does make for a convenient straw man to argue against.

  • Doktor Fail||

    We must speak in terms of everyone, because using examples from current reality defeats sarcasmic's views.

  • sarcasmic||

    There are people who want to cut taxes and cut spending.
    In case you didn't notice, but that was the point of this piece.

    You know, 'The 19 Percent Solution'?

    Apparently there are people at Reason who want to cut taxes and cut government.

    Are you saying that because Republicans want to cut taxes without cutting spending that EVERYONE who wants to cut taxes does not want to cut spending?

    You're not making sense.

  • ||

    The problem is the people who want to cut taxes don't want to cut an equal amount of government.

    Yeah sarcasmic is correct. I am one of the poeple who want to cut taxes and i defenatly want to cut spending as well.

  • Night Elf Mohawk||

    Its actually pretty simple math. You cannot provide less to the government and maintain the same level governing.

    Even apart from everything else, aren't you presuming that the government is 100% efficient?

  • ||

    Why should taxes continually increase as a pecentage of GDP?

    Just out of curiosity.

    Since technology is making everything else cheaper, especially information services, and government involves a lot of information processing, why shouldn't government services get less expensive?

  • MJL||

    Great post Hazel. I realize there are few, if any things, provided completely by government or completely by free market. However it would be interesting if someone did a comparison of the price of goods provided mostly by government versus the price of goods provided mostly by free markets. How would they compare? The price of an automobile, in nominal dollars, has gone up about 7 times since 1970, and cars are much better and last longer than they did then. Public education spending per pupil has gone up about 12 times. Is anyone going to argue that public education is much better today? Some could make a good case that it is worse.

  • ||

    We spend a much smaller percentage of our income today on food, clothing, and communication - computers, TV and telephones have gotten cheaper - than we did 30 or 100 years ago.

    Cars have gotten better. Houses have gotten bigger.

    Why the heck should government remain a constant percentage of our budgets?

    Even welfare programs should get cheaper as a percentage of GDP, since we're largely talking about food provision, and those costs have continued to decline.

    So why on earth is the state consuming an ever LARGER percentage of our salaries?

  • i give up (formerly some guy)||

    "So why on earth is the state consuming an ever LARGER percentage of our salaries?"

    Because politicians crave power and power of money is the easiest kind of power to maintain. If you insist on having direct power over people, they tend to revolt.

  • Proud fascist||

    "We like to keep what we earned?"

    How much did you earn through pure merit and how much from having a fortunate starting point? That is, of course, impossible to say, so the notion that taxes are *always* bad is as idiotic as the notion that taxes are *never* bad.

    But, this would require a lot of case-by-case judgment, which is beneath the libertarians (religion of the market, the socialists (religion of the state), the liberals (religion of equality) or conservatives (self-worshippers).

    If we always reward those whose main accomplishment was getting out of a rich mother (I am not saying that applies to you) then we are sacrificing society's health and the idea of meritocracy just to appease a religion.

    We'll never know if someone earned it all through merit or through not having to contend with others who were born in much worse situations. There is nothing else to say - if you can't grasp this, then I am not just cognitively superior to you, but neurologically as well.

  • Mr. FIFY||

    Remind the Kennedy family they need to get their wealth out of tax shelters, Proud Fascist.

    Or, just shut the fuck up and stop playing wealth-envy politics.

  • DesigNate||

    The point is that every time we raise taxes, the pols just spend that money instead of paying down the debt or I don't know, saving it. Don't talk to me about raising taxes when all the politicians can't seem to cut ANY spending.

  • MNG||

    Now this I find sensible. It's sensible to draw the line with taxes when Congress runs deficets in emergency and non-emergency times, in high tax and low tax times. It's sensible to make them display some awareness of the duty to watch their spending of what is our money wisely before giving them any more of it.

  • Sovereign Immunity||

    But the pols have special interest groups to repay for putting them in office; we can't put perfectly good lobbyists out in the street, can we?

    Answer: YES!

  • Tony||

    But the people braying about cutting spending are the ones who have an agenda to do away with what's left of the social safety net. The same people who invented the concept that deficits don't matter and who have no problem spending untold billions on blowing up Arabs. Your premise, and the premise of conventional DC wisdom, is that spending needs to go down. I don't accept that premise, at least not in an overall sense. I think social welfare spending should go up. I think the retirement age should go down. I think stimulus spending should go up. I just don't think the premise you're working from comes from an honest place. The people insisting we cut spending are people who would insist the same thing no matter the economic circumstances.

  • Old Mexican||

    Re: Tony,

    But the people braying about cutting spending are the ones who have an agenda to do away with what's left of the social safety net.


    "When in doubt, question their motives."
    Old Statist proverb.

    The same people who invented the concept that deficits don't matter and who have no problem spending untold billions on blowing up Arabs.


    But the OTHER people that invented the concept that deficts don't matter when safety nets are involved, those are ok with you, right?

    I think social welfare spending should go up.


    The farmer that wanted to plow two fields with the same mule ended up with NO mule and empty plots.

    Your economic logic is fascinating, Tony.

  • ||

    Well, in this case (soaring deficits): we cannot afford your desired social safety net. That's a pretty significant economic circumstance. Spending needs to go down. All of it.

  • Mr. FIFY||

    Tony's just worried the Liberal Perpetual-Reelection Machine - aka the welfare system - might have a cog or two taken from its innards.

  • Tony||

    How will reducing the spending power of vast numbers of people by cutting the social safety net help with the deficit?

    This kindergarten approach to macroeconomics just doesn't work. The key to solving deficits is increasing revenue through a growing GDP. The policies you're advocating are pretty much tailor-made to stifle GDP growth.

    Republicans believe Jesus rode around on a dinosaur. They also believe in austerity economics. What makes you think they're magically right about that one?

  • Old Mexican||

    Re: Tony,

    How will reducing the spending power of vast numbers of people by cutting the social safety net help with the deficit?


    By reducing the spending that such profligacy represents, silly!

    Oh, by the way: Economies do not grow just by spending alone.

    This kindergarten approach to macroeconomics just doesn't work.


    To be more accurate - YOURS doesn't work.

    The key to solving deficits is increasing revenue through a growing GDP.


    The key to solving my wife's spending is by me getting a higher paying job!

    Wee! This Keynesian shit is easy!!!

  • Mr, FIFY||

    So... we just keep borrowing and spending, always more, into infinity.

    Got it.

  • ||

    The key to solving deficits is increasing revenue through a growing GDP. The policies you're advocating are pretty much tailor-made to stifle GDP growth.

    GDP isn't really the best measure of prosperity. Besides you double count stimulus spending when you use GDP, since it counts government spending AND private spending in the formula. If government spending is just being given to stimulate consumption, the formula results in it being counted twice.

    The policy of giving money away to stimulate consumption also has the perverse effect of discouraging consumers from living within their actual means. Instead of switching from Cable to Netflix, or moving into a smaller, more affordable home, you're effectively borrowing money to sustain present spending patterns.
    No matter what choices the consumer makes, he will be stimulating some kind of response from producers. It is only a matter of WHICH response. The producers will have more incentive to improve efficiency, innovate and develop CHEAPER ways of doing the same thing if the consumer has less to spend. In the long run that drives bigger improvments in quality of life.

    The issue isn't how many JOBS there are, but how efficiently productive capacity meets consumer demands.

  • ||

    This is why I like talking to you Tony. I might totally disagree with you and MNG, but at least I don't have to deal with you guys calling me names like The Truth and SM.

    Now to rebut your statement. I know you've been around here long enough to know that most of us DO have a problem "spending untold billions on blowing up Arabs". I'm not advocating cutting all spending entirely, but there is absolutely no fucking reason we can't return to 1999 spending.

    I know you must be joking about lowering the retirement age cause even in your wildest dreams, people taking social security for a longer period of time wouldn't work.

    I think the premise that you're working from is flawed and morally ambiguous at best. I don't think all taxes are theft, but I shouldn't pay the government for the privilege of putting food on my family's table. Your ideas require me to pay even more of my meager earnings to take care of someone else.

  • Doktor Fail||

    WRONG! 1998-2001 the government took in more money than it spent.

  • Brian D||

    And yet the national debt was still higher at the end of each of those fiscal years than it was the year before.

  • Red Rocks Rockin||

    WRONG! 1998-2001 the government took in more money than it spent.

    Oh look, yet another 'tard that can't do a basic search on his beloved government's own website. From the Treasury:

    Historical Debt Outstanding
    09/30/2001 5,807,463,412,200.06
    09/30/2000 5,674,178,209,886.86
    09/30/1999 5,656,270,901,615.43
    09/30/1998 5,526,193,008,897.62
    09/30/1997 5,413,146,011,397.34

    Doktor Fail certainly is an appropriate monikor, you goon.

  • Night Elf Mohawk||

    And we aren't raising taxes because... we're playing a parlor game?

    Because... there's no evidence whatsoever that doing so would do anything other than cause spending to increase at an even faster rate?

  • ||

    >And we aren't raising taxes because..

    Taxes are being raised, and rather drastically. You just don't notice because the primary mode of taxation today is dilution of the currency.

    -jcr

  • Matrix||

    Actual dollars stay the same, but your real money is depressed, causing your real debt to be lower.

    Punish the savers and reward those who amass massive debt.

  • ||

    Which incidentally discourages reinvestment, since the banks will have less money to put into private enterprise.

    Inflation fucks with the value of capital. Anyone with a bank balance looses, not just private individuals with savings accounts, but corporations, businesses, banks, and investors too.

    The only gainer is the recipient of the freshly printer dollars.

  • Wheelock||

    Which happens to be the folks with a monopoly on the printing press. Good work if you can get it...

  • Thomas Paine||

    Tony, did you READ the article? Be honest....

    One of the main points made at the outset is that Federal revenues have (almost) never risen over 20% of GDP. Not with 90% top individual rates; not with 28% and a broader base.

    This is a real constraint, I believe the authors would agree, because human behavior is dynamic -- people adjust to tax policy by shifting income to non-income, deferring, "going on strike" aka not working as much, moving income offshore to trusts (perhaps Curacao, like Soros?), and more. You simple CAN'T GET that "increased revenue by taxing the rich" or poor, or whoever. I believe that would be fundamental to the authors' argument.

    So ... cut spending. Period.

    BTW, I don't agree on means-testing Social Security. Privatize perhaps, divert payments to "forced savings" like Singapore, whatever, but means-testing opens up a whole new Pandora's box of moral hazard to hide/defer/reduce income below the "test" level. So don't likey thatey....

  • ||

    Hopefully the math on this one is better than the last time Nick and Veron got together and cut off chunks of pork. that didn't go so well and Gillespie failed at math :/

  • MNG||

    "With common-sense exceptions for seniors, veterans, and our troops, we will roll back government spending to prestimulus, pre-bailout levels..."

    I just heard this part of the GOP's 'pledge' over the weekend. This is why I have trouble taking their proposed image as fiscal conservatives seriously. Everybody is for cutting things you don't care for and protecting things you do.

    I will give big kudos to Tom Coburn for recent remarks about cutting defense and Michelle Bachman for suggesting cuts to veteran benefits. MSNBC attacked her for it of course, shame on them. If she had left them out they would have attacked her for that too. Slimey.

  • Mike in PA||

    As long as the discussion remains about what to cut and when, then we're not getting very far.

    The discussion needs to return to negative (natural) vs. positive rights and how you cannot have positive rights without recognizing that you believe negative rights do not exist. If this is the discussion, then all this debating over which programs to cut goes away.

  • Mike M.||

    By the way, France has now joined the IMF in calling for the replacement of the U.S. dollar as the world's reserve currency.

    Porter Stansberry predicted that this would happen this year, and I have a sickening feeling that he may well be right.

  • ||

    The reserve status is a market decision that can be made any time.

    The markets trust Bernanke more than any of the other central bankers (much to the chagrin of the Paultards).

  • Mike M.||

    Translation: I'm going to stick my fingers in my ears and completely ignore what's actually going on in the world.

  • ||

    So what is wrong with letting each market participant decide?

    This reminds me of the "forced" change to the metric system in the US 20-30 years ago.

  • Doktor Fail||

    Because the metric system isn't used by anyone.....
    Oh wait, the US is the only country in the entire world that still uses the imperial system. Way to go market participants.

  • ||

    Oh wait, the US is the only country in the entire world that still uses the imperial system.

    There are parts of the world that don't speak English....some people don't even use the alphabet.

    It is a tragedy...a fucking tragedy that different societies use different standards.

    Why can't we all be exactly alike?

  • ||

    Oh wait, the US is the only country in the entire world that still uses the imperial system.


    Actually, the US uses the Systeme international for a lot of things.

    Practically anything in international trade, for example. Have you bought a car since 1986 or so? All the parts are metric sized.

    I guess you don't drink. What did you do, quit in 1978 or something? Go and try to buy a bottle of wine in Imperial units (or even dual labelled, which admittedly beer is).

    Like most of the people who set themselves up as no-it-alls talking about "market failure", you don't appear to know very much at all.

  • Red Rocks Rockin||

    Go and try to buy a bottle of wine in Imperial units (or even dual labelled, which admittedly beer is).

    He only buys wine in a box.

  • Mike M.||

    If you seriously don't understand the potential impacts of what would happen should Bretton-Woods be abandoned on the global commodity and security markets (among many other things), I can't help you.

  • ||

    Bretton woods was abandoned when Nixon reneged on the promise to redeem dollars for gold.

    -jcr

  • Random Dude||

    I think he's referring to our still overweight representation in global reserve currencies.

    But yes, you are of course correct.

    It doesn't make much sense that the market would select the U.S. dollar for that pre-eminent reserve currency status.... until one realizes that the only realistic replacement is the Euro.

  • Mike M.||

    The plan being discussed isn't to replace the dollar with the Euro, or with any other single currency. They are talking about replacing the dollar with a system of Special Drawing Rights based upon a basket of currencies, of which the dollar would be merely one of several.

  • Mr. FIFY||

    shrike is such a pussy.

  • Tim||

    Why not get rid of all taxes and just replace it with a flat income tax of 19%?

  • Mike in PA||

    You had me right up until your conjunction...

  • Doryphoros||

    A couple of reasons:

    1. This makes too much sense (can't have that now).

    2. It wouldn't be "fair" to those in the lower income brackets (though many in this bracket will never comprehend the concept of having a vested interest in government spending so long as that gov't money keeps coming in).

    3. In years of excess, which would invariably happen at some point, the government wouldn't know what to do with the extra money (can't pay down the debt or build up reserves, that would be anathema).

    4. A fixed rate would imply responsibility for budgeting based on projected real GDP growth (the horrors that government employees - including politicians - would only get 2-3% raises).

    So sadly, that is my opinion why it would not pass, as sensible and truly fair as it would be.

  • Proud fascist||

    Because you have to convince enough voters to do it, and they don't want that kind of society. Since you agree to live in a democracy, you have to deal with that.

  • Old Mexican||

    Re: Proud Fascist,

    Because you have to convince enough voters to do it, and they don't want that kind of society. Since you agree to live in a democracy, you have to deal with that.


    Yep, it's not called "Mob Rule" for nuthin'!

  • ||

    You do realize we live in a Constitutional Republic and not a democracy, right?

  • Short Tony||

    Soak the rich, deficit spending, TEAM BLUE FOREVER.

  • ||

    "With common-sense exceptions for seniors, veterans, and our troops, we will roll back government spending to prestimulus, pre-bailout levels..."

    Translated: After protecting most of the budget from any cuts (thus ensuring 12-figure deficits), forevermore, we will roll back government spending to the level it was at when we were running 12-figure deficits.

  • Vermont Gun Owner||

    How to Balance the Budget Without Increasing Taxes

    Step 1: Take Clinton's last budget.

    Step 2: Add $600 billion (30%) for increased costs.

    Step 3: Pay back $100 billion of the debt this year.

    Step 4: Polish monocle while stepping over people dying in the streets and crying at the horror of the '90s.

  • ||

    They won't be dying in the streets! They'll be too busy working and buying stuff.

  • DesigNate||

    +1,000,000,000,000

  • Mike||

    Indeed. They aren't talking about destroying the government as we know it. They're talking about turning back government spending to where it was ten years ago. I'm pretty sure the US was still a world power then, with a powerful military and a social safety net for most people.

  • Vermont Gun Owner||

    You've just been brainwashed by the Kochtopus. The '90s were hell on earth. The working class couldn't even afford a hybrid car.

  • Vermont Gun Owner||

    Oh, and something about not enough education funding and all the retarded kids from the '90s. Oh wait, that's me.

  • Matrix||

    powerful military... maybe, but our current wars proved we were not really ready for those engagements. We spent a lot of money upgrading our equipment to fight in desert environments and combat IEDs.

  • ||

    But, cost of living increases! I mean 10 years ago, a happy meal was $5, now it's like $7.50 or something outrageous like that.

  • Vermont Gun Owner||

    Damn. I guess the $600 billion increase was foolishly small. That only covers the increased cost of 240 billion happy meals. That's only like 2 happy meals per person per day.

  • ||

    dude, I can get a big kids meal (the six piece happy meal) for like $4.50 here in Dallas.

  • Yadda||

    Clinton did not balance the budget. He used the social security surplus to offset deficit spending. If a corporation tried this, it would be a felony.

    To those who think growing the economy is the solution not spending cuts: Reagan grew the economy so much that tax receipts increased 200%, but the Congressional spenders increased spending 300%! So the problem is Congressional money whores who will debase the currency into nothing.

  • trig||

    No mention of Rand Pauls proposed 500 billion cut? I know it isn't going to happen but you could give him some props at least :P

  • Mike M.||

  • ||

    The Bulgarian Financial minister is doing likewise coming from the World Bank and: in two years we have lost 4 billion dollars worth of revenue and losing; having changed the annual budhet for four times since then (2009).
    Tell me why for so you spoke!
    I dare you!

  • Jack On||

    Just for the sake of argument, if it's true that higher tax rates decrease incentives to work, then why did any executives work hard in the 1950s? With the highest bracket tax rates being astronomical by today's standards, according to libertarian / conservative theory, shoulnd't everyone have just sat on their hands and refused to work because they were being over-taxed?

  • Old Mexican||

    Re: Jack On,

    Just for the sake of argument, if it's true that higher tax rates decrease incentives to work, then why did any executives work hard in the 1950s?


    Maybe because there were more loopholes to pass a Mack truck through?

    By the way, higher taxes in Britain drove highly paid artists to seek asylum in Switzerland and other places, during the 70s. Just for your info.

    With the highest bracket tax rates being astronomical by today's standards, according to libertarian / conservative theory, shoulnd't everyone have just sat on their hands and refused to work because they were being over-taxed?


    You mean they aren't sitting in their hands?

  • ||

    because people still need to eat.

  • ||

    What the hell is the 'other' category?

    Farm Subsidies? Student Loans? Could we get a more detailed breakdown of that because there is a damn lot of crap to trim there.

  • Old Mexican||

    In the "takes the cake" department:

    Re: Tony,

    The key to solving deficits is increasing revenue through a growing GDP.

    The key to solving my wife's spending is by me getting a higher paying job!

    Wee! This Keynesian shit is easy!!!

  • Tony||

    Maybe you should work harder. You do have bootstraps, do you not?

  • GMT II||

    Hey Toni, I am male; straight; white; married with many kids; healthy; under-educated; middle aged; an evil 2%; and pay those taxes that you keep telling me is not my "fair share". Hopefully I will become a 1% soon as the difference is an added zero on my K-1s.

    I have the means to help the poor, and our family does in ways you could only dream of, but you of course do not have the means to help anyone as it would take a lot of your own time and money.

    In summary, it must suck to be you!!

  • Realist||

    Another thread where Tony and MNG are "argued" with endlessly as if they had a point or they could be reasoned with!

  • ||

    Security payments represent about 40 percent of “the income of the elderly” and in 2010, the average payment was $1,170 a month.

    That is not half bad.

    But here's an idea. How about reducing social security payments to people who are married or cohabitating with a partner? An Average of $1,100 may be just enough for a single person living alone, but $2,200 if more than confortable for two people living together.

    Other proposals ... immediately cut off social security payments to individuals who are wealthy enough to afford their own retirement AND have already received back more in payments than they contributed, adjusted for inflation.

  • Brian D||

    Way to encourage NOBODY to save for retirement, Hazel.

  • Yadda||

    Why/when did Social Security become a retirement program? Its original purpose was to provide for a safety net if individual could not provide because of a REAL disability.

  • Bucky||

    i thought it was for single mothers and orphans?

  • non||

    Because they are closer to the actual beneficiaries, more knowledgeable about regional differences in the target population, and more responsive to local needs, state and local governments are better suited to take care of poor people.

    Not to mention the downward pressure from the "race to the bottom."

  • ||

    Here are some thoughts on balancing the budget, no guarantees but I believe they would go a long way in the right direction.

    1. Defund Fannie Mae and Freddie Mac, they caused the present recession in the first place.
    2. Eliminate all forms of welfare including corporate, farm, housing and direct payments to states for traditional welfare. Welfare is the real reason most people are worried about illegal immigration, before the rampant welfare's society, illegal immigration was not a problem. Social Security could be retained.
    3. Those unnecessary military bases overseas, this would include bases such as the ones in Germany and Japan. These bases may have been a military necessity at one time but, in my opinion, no longer are. The costs of maintaining these bases are extremely high and the pay received by personnel overseas stays in the economy of that country. Even without reduction in personnel their pay being spent in this country would stimulate the economy more than anything the government has done recently.

  • Yadda||

    1: yes but then get ready for house price to reduce by another 20-30%.

    2: yes but politicians depend on these players to stay in power and change happens slowly. Too bad it wasn't done in 1994.

    3: yes but huge vested interest. More likely the US military will start large war to keep funding.

  • Yadda||

    I am so sick of seeing debt figures quoted many different ways depending on the article. Do global investors only care about "debt held by public"? I believe US individuals and associations still hold most of this followed by China, Japan, etc. But is not internal debt between government entities not debt? Add that in and the debt is over $14 Trillion now and will soon be be greater than 100% GDP. Now investors also care about future obligations so let's add that in and then the US is around $50 Trillion in debt obligations. This could easily shoot to $70T in the next 9 years. And it doesn't look like either party nor the President will provide leadership as they are too concerned about poll numbers. So expect a rude interest rate shock within the next 2-4 years after the election cycle FED puppetry show ends.

  • ||

    Your comment that "Some major entitlement programs—most notably Social Security—are “off budget,” meaning they are not included in the official spending numbers...." is off base. Social Security is the only such entitlement program and the only other off-budget program of any kind is the Postal Service, which is self-supporting. In fact, Social Security is included in the official numbers, as demonstrated in chart immediately below the quote. Inclusion of the Social Security surplus in the official numbers makes the deficit look smaller than it really is. The only meaning of off-budget is that these two programs are not subject to sequester if other programs have to be reduced as a result of exceeding their budget act allocations.

  • kosmodisk||

    Cosmodisc, all the back and low back pain for people, designed to reach active çözüm.Bu universal comfort, fully adjustable and suitable for use with clothing ... Cosmodisc a vital investment for your health! Reliable, efficient

  • ||

    so, what you're advocating is replacing all federal taxes with a 19% sales tax, correct?

  • منتدى العرب||

    Thank you

  • alan||

    Since health care is the major problem for the country, why don't you focus on the process of cutting the cost of health care? Our country is floundering around because we don't have a process. Health care is failing because of economics, specifically because of the pricing structure. Change the pricing structure and health care costs go down. But in the meantime, our country needs a process that focuses on: increasing the supply of health care providers; increasing competition; an ounce of prevention versus a pound of cure; reducing demand for services; and reducing waste. Waste, according to the book, "Lean Accounting", is any activity that does not add value to the customer. So all of the billing, rebilling, checking of billing, and litigation are pure waste. They add nothing of extra value to the patient. When our country starts a process focused on these areas, then we can start cutting the cost of health care.

  • ||

    Repealing prescription laws would be a good start! All these laws do is increase the cost of US health care which is the highest cost health care on Earth! As a Libertarian I oppose these sort of laws as "statism"!

  • ||

    FairTax anyone?

  • ||

    Prof. Cote. Lee. Cough etal
    "usgdp $14t/yr, total pvt pub debts
    $188t trillion twelve zero" (out
    to cover boomers future _ years).
    "West go v's borrow to pay only
    interest, cant pay down prin.
    " (unless w/ inflated$ =lost purchasing
    power).

  • jerbigge||

    If you make a list of how many wars were fought by every country on Earth in the last century, the US will be #1. Take Gulf War One: Did Iraq threaten the US? No. Did Saddam refuse to sell oil to the US?
    No. So why the US fight this war?

    Gulf War Two: Did Saddam or Iraq have anything to do with 9-11? No. So why did the US attack Iraq? Weapons of mass destruction? Russia has weapons of mass destruction, China has weapons of mass destruction. We didn't attack them. So it isn't a case of weapons of mass destruction. Who was responsible for 9-11? Osama bin Laden. Plus the largest number of terrorists actually came from Saudi Arabia. Next largest from Egypt if memory serves. We didn't either one of these countries. We went into Afghanistan to hunt down Osama bin Laden. One man. We've been killing people in Afghanistan for the last ten years. We did finally kill Osama bin Laden. But we're still fighting in Afghanistan...

    The total cost of these two wars runs into the trillions of dollars. There are also long term costs that we will be paying until the last veteran from these wars dies of old age. Being the world most war like nation is expensive. We spend just about 1/2 of all the money spent in the entire world on "defense". Why?
    Just "who" is threatening us? And why? Maybe we need to start "minding our own business" and stop trying to "police" the world. We are 5% of the world's population. It really doesn't make sense that the other 95% of the world's population needs to be "policed" by the USA. And we can't afford it either!

  • قبلة الوداع||

    thank u

  • قبلة الوداع||

    ThaNk U

  • ||

    The US spends 18% of GNP on health care. 50% more than any other nation. Canada is about 12%. In life expectancy the US rates below the rest of the developed world yet we pay 50% more than they do? Why?

  • ||

    Keep in mind that life expectancy is not simply a matter of health care outcomes -- violent crime, car accidents, eating habits, smoking rates... all these things contribute to lower life expectancy. And since a significant portion of health care expenditures are consumed in the last couple of years of life, there's a big spending uptick with a small payoff in terms of life expectancy, but an arguably big payoff in terms of end of life quality.

  • ||

    Ron Paul wants to repeal all drug laws including prescription laws. This would save us hundreds of billions of dollars a year, both in law enforcement and keeping people in prison for drug law violations.

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