"It's the Spending, Stupid"
Via Instapundit, here's an excellent col by John Merline on AOL News who points out just where the mega-deficits come from at the federal level: Excessive spending.
As the chart nearby shows, since 1950, tax revenues have been remarkably stable. Despite endless machinations, reforms, tweaks to the tax code, new breaks, tax hikes and tax cuts, tax revenues as a share of the total economy (called gross domestic product, or GDP) have stuck steadily at right around 18 percent.
What has changed is spending....
Deficit hawks pretty much have only one option -- spending cuts. And that means digging into entitlements, particularly Medicare, Medicaid and Social Security, which consume a huge and ever-growing share of the federal budget.
Merline's argument is as airtight as it is unpopular among folks who want to believe that we can spend until the cows come home and still eat steak every night. Or something like that.
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I think its gone well beyond stupid
www.real-anonymity.net.tc
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Very well put.
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"To my business partner Jules, whose only motto was 'Spend! Spend! Spend!' I leave nothing, nothing, nothing!"
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He sold the car, married multiple times, spent it all, and now even his kids don't talk to him...
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You're supposed to spend more when economic times are bad for so many folks.
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You are a certified idiot.
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I think you were trolled by a sockpuppet.
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+1
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Probably. I plead coffee deficiency and a large hangover.
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Every sane person is willing to incur some debt when times are tough.
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Citation needed.
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And when times are tough b/c we've incurred to much debt?
"We've dug this hole too deep, how will we get out?"
"I know, we'll dig our way out!"
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Hey, honey, we're in shitloads of debt, and I haven't had a job in almost a year. What say we take out a couple more mortgages and spend it all on ice cream?
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Ice cream. That is cheap. Fact.
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it depends what you are borrowing for
if it is to create an income producing asset, then yes
if the funds from that debt are wasted, leaving you with the debt and interest payments but nothing to show for it, then it may not be the best approach
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Quit parroting unproven babble.
There is no proof that deficit spending stimulates the economy or that deficit spending creates more wealth than it expends. In fact, by its very nature, additional government spending is wasteful. Extensions in unemployment benefits encourage people to sit on their ass and remain unemployed. In general, government spending is extremely inefficient - bureaucrats do not spend other people's money as well as they spend it themselves.
After this downturn, we'll now have huge debts and deficits which will at best be a major drag on economic growth or at worst push us into bankruptcy.
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"bureaucrats do not spend other people's money as well as they spend it themselves"
Citation needed.
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Here you go:
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Love that book.
Of course you realize Mises argues in that book that many functions must be performed by the government because there is no profit motive involved?
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And of course Mises produces no empirical evidence to support his argument in that book. We are just supposed to get there via deduction from some of his "obvious" axioms.
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Other than defense, courts and law enforcement, what functions of the government could not be and are not performed by the private sector?
There is no profit motive in charity, but the Catholic church seems to be doing a booming business for about 2000 years now.
You really think that profit and only profit determines people's behavior? You really do live in a bubble.
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"what functions of the government could not be and are not performed by the private sector?"
health care -
That will be news to Humana and Price Pfister.
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And St. Judes and every other for charity private hostpital in America. You people really are patheticly stupid.
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"There is no profit motive in charity" and ergo, there is only a profit motive is business-Otherwise known as, not a fucking charity.
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St Jude is for medically eligible patients, and by the way, patient insurance is part of their income.
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And that insurance is from the private sector. Amazingly enough, medical care existed before the government tried to take it over. Existed for 100s of years.
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"And that insurance is from the private sector" Till they dump your ass for having the audacity to be a sick child.
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Medical insurance exists for you to mitigate the risk that you may possibly require costly health care in the future.
When the probability reaches 100%, you're no longer shopping for insurance, you're asking for charity.
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When the probability reaches 100%, you're no longer shopping for insurance, you're asking for charity.
So people's access to healthcare should be dependent on their ability to pay? Some of us just don't believe that to be the best system, morally or fiscally.
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I hope you don't hail from Toronto, and you are silly enough to buy this libertarian bull. We both know, you will never face medical bankruptcy, and will never be forced to ask for charity.
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"I hope you don't hail from Toronto, and you are silly enough to buy this libertarian bull. We both know, you will never face medical bankruptcy, and will never be forced to ask for charity."
I do hail from Toronto, and I am a libertarian.
As for me facing bankruptcy or needing to ask for charity... who knows? But I'll keep doing my best to minimize the probability of either.
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T, then you know medical bankruptcy is non-existent in Canada, and the social service net is well established. The fact that you call yourself libertarian is of little relevance.
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"then you know medical bankruptcy is non-existent in Canada, and the social service net is well established."
Yet despite all our "progressive" accomplishments, the mortality rate here is still stuck at 100%.
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A child's response.
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That's right, you make it moral by using violence to take what you need to pay for the care of others, and using violence to stop them from behaving in ways you don't like.
Nice ethics.
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That's right, you make it moral by using violence to take what you need to pay for the care of others, and using violence to stop them from behaving in ways you don't like.
Where's the violence again? If all you have to argue against univ. healthcare is that it takes taxes to pay for, then you're not being serious. It takes taxes to pay for police too, is it immoral to have police too?
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It is immoral to have police unions that make holding bad cops accountable for their actions impossible.
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"So people's access to healthcare should be dependent on their ability to pay?"
Tony, that wasn't the point at all. You're shifting the discussion rather than facing the argument before you. Torontonian's point was simply about the real purpose of insurance, not a moral statement about who deserves health care.
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"So people's access to healthcare should be dependent on their ability to pay?"
What part of "charity" do you not understand?
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Total health care spending in the US exceeds $2 trillion. Total charitable donations are about $300 billion, and if you haven't noticed, are already used for other things.
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"Total health care spending in the US exceeds $2 trillion. Total charitable donations are about $300 billion, and if you haven't noticed, are already used for other things."
Is this what passes for an argument from you, Chad?
When did anyone suggest that ALL health care should be covered by charity? People who can afford to buy insurance or pay for their own care (the vast majority) have no need for charity.
Disappointing, because sometimes you write intelligent things (and I'll be the first to agree with you when you make a valid point), but this attempt was really beyond idiotic.
This is why you liberal types are annoying. I comment that insurance is only viable for risks, not certainties, and you guys accuse me of wanting to deny care to people who can't afford it.
When I mention that's what charity is for, you then say charity can't work because there's not enough to pay for EVERYONE, as opposed to just the people who can't afford care.
I don't know whether you're intentionally being disingenuous, are really this stupid, or are so blinded by your beliefs that you'll say (write) anything to avoid confronting any idea you don't like.
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Gosh, Tony, when you put it that way... why should we be forced to pay for food, clothing, and shelter?
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Because in some circumstances, it is better than the alternative. If you don't like our rules, you are free to leave.
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Funny how that little axiom never goes the other way. Why don't YOU leave?
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"Because in some circumstances, it is better than the alternative. If you don't like our rules, you are free to leave."
This is basically the leftist version of "America, love it or leave it."
Because, HEY! If you don't like it, why don't you just move to Somalia!?!?!?
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You could (and many people do) say the same thing about food and housing. But most people view such declarations as extreme and Utopian -- not to mention naive -- because markets have done well over the millennia, and especially in this country in more recent centuries, to deliver those necessities of life at affordable prices. It once was that way in health care, too, and can be again. What is falsely claimed to be "market failure" in health care is an illusion. Not the catastrophe -- that's real enough -- but the explanation of it as a "market failure." The dysfunction we see today is actually the foreseeable result of decades of various government interventions in the health care sector. Each one was presented as a "reform" to make things better for the public, but the combined, cumulative effect of the many interventions has been a collapse that is reminiscent of the shortages experienced by the USSR and China during the heydays of their most oppressive communist initiatives. Life may have been improved for certain players in the health care game and some regulators who are supposed to "referee" the system, but for the average patient, and increasingly for the average health care provider, it's hard to say that, on balance, the massive, multi-decade government intrusion into health care has been a good thing.
As far as what should determine people's access to health care, moral transactions between people are based on two types of acts: trading value for value, or the voluntary giving of gifts. Forcing people, against their will, and when they have wronged nobody, to give up their time, effort, or property to benefit someone else, is the antithesis of morality. When you compound this immoral funding approach with bureaucratic central planning -- whether or not the bureaucrats are government employees -- you arrive probably the worst of all possible worlds.
What we need -- and what we can have if we are willing no longer to suffer the forms of health care deprivations to which we have become accustomed -- is a health care system in which insurance assumes its proper role as just one tool among many to expedite care, instead of being the driver of the bus that it is now. It is a health care system in which free market forces of competition and innovation do what they do in all other industries -- drive quality and availability up, and prices down. It is a health care system in which patients purchase the health care they can afford, and in which even a person of modest means can afford most routine or typical health care. It is a system in which unaffordable health care is a rarity, which can be handled by charity or catastrophic insurance.
That's the system we need. And we aren't going to get it from either the faux-"market-bnased" system we have had until recently, or by continuing down the path to socialized medicine that we are firmly on now.
Health care isn't some natural resource that pervades our environment. It consists of goods and services that other people have to provide. Those people should be fairly compensated, ideally by the people who directly benefit. Market mechanisms and forces can facilitate that situation and bring the price of health care into common affordability, increasing our amount of access to it. But only if we let those forces and mechanisms work, and not if we keep dismissing suggestions that we actually TRY a free market, by citing the dysfunction of a stitched-together frankenstein strawman that we have merely LABELED "America's free market health care system."
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You could (and many people do) say the same thing about food and housing. But most people view such declarations as extreme and Utopian -- not to mention naive -- because markets have done well over the millennia, and especially in this country in more recent centuries, to deliver those necessities of life at affordable prices
Let's take food for an example. Yes, I agree that this is something that should largely be left to the market. However, even in this "best case for the market scenario", look at this laundry list of issues that the market DOESN'T solve
1: Food safety
2: Land use
3: Soil erosion
4: Fertilizer run-off
5: Dead zones
6: Odors
7: Pesticides
8: Bio-diversity losses
9: Greenhouse gas emissions
10: Aquifer depletionI am sure there are more, but you get the idea. Even in the best circumstances, markets need regulations that incorporate concerns such as those listed above into its calculations. Anything that lies outside the market's calculus is ignored, and usually destroyed, degraded, or consumed as a result.
On the other hand, we could look at something like health insurance (not health "care"). This is something the market has never adequately provided anywhere, due to some pretty obvious market failure mechanisms. We are the only nation stupid enough to keep trying to pound this square peg into the round hole. We may as well give up.
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Yeah! We need to do it YOUR way, Chad... pound a *round* peg into a *square* hole! It's so simple! Why didn't we think of it before?
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1: Food safety
2: Land use
3: Soil erosion
4: Fertilizer run-off
5: Dead zones
6: Odors
7: Pesticides
8: Bio-diversity losses
9: Greenhouse gas emissions
10: Aquifer depletionActually, the market and liability litigation deals with most of these factors in a fairly satisfactory way. Some of the things that you mentioned are fairly squishy, such as "Bio Diversity Losses."
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"This is something the market has never adequately provided anywhere, due to some pretty obvious market failure mechanisms."
What a bunch of ideological gas baggery. Half of what you say is pure ideology. "Market failure mechanisms?" Because anything that you disagree with is a "Market Failure."
The real issue is whether or not health care is entitled to be something of a guaranteed entitlement to be supported as public good. There are philosophical differences on the subject. Just because something doesn't fit your vision, that doesn't make it wrong.
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it's either dependent on paying for it or it will be dependent on being politically connected. Historically the US offers more people the opportunity to be rich enough to pay for health care than the opportunity to be politically connected enough for health care.
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"There is no profit motive in charity" and ergo, there is only a profit motive is business-Otherwise known as, not a fucking charity.
Tell that to BG, the perennial, publicly traded, private corporation that gives to government like Santa Claus gives to children who were nice enough not to get a lump of coal.
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You are forgetting infrastructure (roads, water, electricity). It is ok for it to be private if there is a lot of government regulation but otherwise it cannot generally be done without significant negative consequences.
Also while there is scientific research in the private sector it tends to be very short-sighted where there is an easy to identify goal. Long-term scientific research where the benefits are not immediately understood or realized has a great benefit to society needs to be government funded.
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I agree.
Given that the private sector spent the last twenty years borrowing like crazy from China so that we could buy primarily
1: oil
2: Pets.com
3: McMansions in the desertI would hardly think that a bureaucrat could do worse, even if they chose randomly.
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Yeah Chad. That is all the private sector produced over the last twenty years. Not computers, airplanes, food and every other thing that allows your sorry worthless ass to live in wealthy you clearly don't deserve and appreciate.
At some point people are just going to get tired of people like you breathing their air.
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But they'll never stop enabling him on H&R.
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Fair enough.
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Thank you, Troll Spotter!!
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We weren't borrowing to buy necessities, as we earned plenty enough money to cover that. We were borrowing in order to buy crap like the junk I listed. Borrowing in order to fuel consumption, rather than investment, is outright stupid.
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because borrowing money to randomly drop from helicopters to stimulate demand isn't "borrowing money to fuel consumption".
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If you think energy is not a necessity in the modern West, I can't even begin to take you seriously. Thanks for playing.
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You completely oversimplified 30 years of history. Anyway, oil can be considered a capital good, as most of our production comes from oil. There is no way to differentiate between necessary and unnecessary consumption in the way that you pretend to. Technically, the production of necessities has been adequate for society for generations. You're just trying to tie reality into your little narrative.
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Every example of over consumption that you gave was really an example of over investment due to excess liquidity, Chad. Oil consumption skyrockets due to speculative investment in the productive sector, not consumption, as most small consumers have been cutting back on miles driven etc. The stock market bubble didn't occur because people were buying lots of goods and services online, but because they were INVESTING too much with dotcoms that didn't have the demand to rationalize the INVESTMENT. Housing did have a consumption element, but the real culprit of the housing bubble was the speculation of people who were trying to "flip" houses as a short term INVESTMENT. IT was not caused by hedonists wanting to live in bigger and bigger houses.
What is the difference between a "McMansion" and a regular house? If you don't live in a mud hut that you built yourself, it could be argued that you have excessive housing too.
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You are a complete idiot, CHad. Every example that you gave was an INVESTMENT bubble. Over investment is the problem, not over consumption.
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So if over INVESTMENT was the problem, than you have to ask yourself, why does this speculative level of investment occur in the first place? Hmmm. Rothbard, anyone?
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Have you even read Rothbard? If you have, you wouldn't be asking that question.
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Are you responding to me? I was defending Rothbard's viewpoint.
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Chad was arguing that we are a nation based on "overconsumption," and he stated that "Borrowing in order to fuel consumption, rather than investment, is outright stupid." However, every example of a "market failure" that he gave was a profound example of overinvestment due to excess liquidity.
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And fuck you if you don't like what people spend their money on. It is their money. How dare you claim to know how best to spend other people's money. Get off your lazy worthless ass and make your own money.
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+ 100,000 (give or take 1000)
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Here I thought they were spending at least some of it on empire and "drug wars".
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Chad - It was the US government that spent the last 20 years borrowing like crazy from China, not the us private sector. (The American debt China is holding is substantially all US government bonds, not private debt.) Additionally, what evidence do you have that borrowed Chinese money was used in any substantial way to fund the purchase of oil, high end residential real estate, or the dot com bubble? None, thats what. Youre making it up.
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Which institutions enabled all of the silly borrowing? Hint hint, they were created by Congress...
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"Extensions in unemployment benefits encourage people to sit on their ass and remain unemployed"
Citation needed.
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Of course, glad to oblige:
Catallactic Unemployment Ludwig von Mises -
MNG, of course UI benefits encourage some people to sit on their butts. I know plenty personally.
But this doesn't affect the economy a whit when there a dozen other capable people waiting in line for any job that the milkers shirk. In times of full employment, these people do cause a minor drag on the economy, but not now.
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Responding yo yourself is not that funny any more.
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"by its very nature, additional government spending is wasteful"
Citation needed.
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Citation needed is apparently pig latin for "I am too stupid to make and arugment or have an indendent thought".
Thanks MNG. You learn something every day.
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What's hilarious is I started my "citation needed" fun when you did it earlier this week on the NIH thread. Some folks you just can't caricature, they don't have even the basic sense of consistency and self awareness of a sock puppet!
Of course what I'm getting at is these assertions are certainly not obviously true.
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Assertions that are obviously true, like the defense budget being a trillion dollars. Since you just make shit up, you, unlike the honest posters on here, actually do need to use citations.
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Posted this below too:
http://www.independent.org/newsroom/article.asp?id=1941
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Thanks shitloads for coming back, MNG.
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Must be a lull in the drag show scene.
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And of cours you have never given a citation to anything. If it comes from you it must be self evidently true. And you can never be bothered to produce a citation to disprove any assertion made by someone else. Nope, just post "citation needed".
You are worse than Max. Worse than Joe. At least tried to make and argument. And at least Max never pretends to be anything but a troll.
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Actually, John, MNG, Tony and myself cite things (relevant things from non right-wing-hack sources) all the time.
MNG was just pointing out that your assertion was not based on any facts. Please provide them. If you can't, why should we put any value on your assertion?
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This is a blog comment section. It's not intended to be a tool for research, so cries of "citation needed" are ridiculous.
Besides, it's not like you or MNG is ever going to be convinced that more government is anything but a net good for society.
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Wrong. We believe that government works well somtimes, markets work well somtimes(if regulated properly), and sometimes a mix of the two work. Which of these is the case can be difficult to determine and often requires experimentation.
YOU, on the other hand, worship the divine market, and no facts or data could ever convince you that it could ever be wrong. No matter how damning the evidence, you will automatically blame the problem on the nearest government program. Hence, the only way that your ideology could possibly be refuted would be for a perfectly 100% absolutely pure libertarian system to be adopted, and fail. Since one will never be adopted, your theory cannot be tested.
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You worship the devine multiplier effect.
The one where stimulus spending works like the Law of Attraction.
Maybe we should all start thinking more positively and the economy will improve.
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"YOU, on the other hand, worship the divine market, and no facts or data could ever convince you that it could ever be wrong. "
No, we prefer non coerced arrangements between individuals.
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We believe that government works well somtimes, markets work well somtimes(if regulated properly), and sometimes a mix of the two work. Which of these is the case can be difficult to determine and often requires experimentation.
And that "mix" just happens to be aligned with the financial interests of unions and trial lawyers. "Experiments" which dispute this, e.g. the DC Voucher program, must be immediately shut down and the data thrown out.
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Have you ever seen me defend unions or trial lawyers?
Does it exceed your ability to comprehend that I may not be in ideological lockstep with the far left?
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You want higher taxes, more government spending, and you buy into that Chicken Little eco-bullshit.
What else COULD you be, Chad?
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I've yet to see any evidence you're not, but here's an opportunity for you to show us.
Do you support card check legislation?
Do you support tort reform?
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I'll note that Chad has posted elsewhere in this thread since my 9:53 PM 7/17/10 post, but he has refused to answer my question. Therefore, he is deemed a union and trial lawyer shill.
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The irony of this is that my view of the proper role of government is probably one of the least restricted around here, but you have to acknowledge it's a real pain in the ass to figure out where government control works better than private control. Even honest "experimentation" on a society is ethically problematic, and it's simply not plausible that the policies liberals advocate are honest attempts to find the right balance. It makes sense to go by the rule of thumb that competitive (not merely private) provision of services is superior to monolithic (not necessarily governmental) provision unless there's some a priori obvious and significant problems with a competitive provision (as in the case of roadways and police forces).
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Sorry, Chad, but posting left-wing-hack-sourced material is no better than posting right-wing-hack-sourced material.
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Of course, you define "left wing" to include government reports, reports from non-partisan organizations, and peer-reviewed academic work. Indeed, anything EXCEPT what comes from Cato or Heritage is "left wing" in your view.
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Every source is going to be bent one way or another, Chad. Sorry, but it's true.
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Everything may be tinged at least a shade of grey, but that doesn't imply all shades of grey are equal.
I am surprised you are making such a lazy argument. I guess it is all you have.
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Dude, you are such a pompous ass. How is is a lazy argument? It is a fundamental truth of humanity that there is no such thing as honest, uninterested opinion. Even statistics can be fudged to say almost anything, when it comes to sociology that is.
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And your argument is basically, "All of your sources are right wing bias, but all of mine are sacred." Pompous gas bag.
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If you seriously believe that all sources of data are equally biased, there is nothing to discuss. You can always find some crackpot argument somewhere to back your view, and since quality doesn't matter, there is no way to refute it.
Yes, I am a "pompous ass" when I am debating fools. When I cite some left-wing organization, feel free to refute it with crap from Cato. But if I am citing non-partisan data, why can't you do the same? Largely because you don't have any that supports you.
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Did I mention I'm a pompous ass?
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I never cite Cato, because I know you'll just take it for a grain of salt. I usually try to use citations from "non partisan" groups, but I keep in mind that there is really no such thing.
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IMO, government information can be biased, depending on the department in question. For instance... I would put the FCC in that category, because they have an interest in controlling speech on the airwaves.
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Strangely, NPR just had a spot on this a week or two ago. They interviewed a bunch of tech companies that were trying to hire people for around 60k IIRC. The people they approached still had unemployment benefits and told the companies to either come back with an offer for 80k or wait until their unemployment benefits ran out.
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Spend more in bad times only works on the assumption that you're saving during good times.
During the boom, we were running deficits that should be reserved for severe recessions.
At this point, we just need to pull off the band-aid.
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I agree. There was absolutely zero excuse for not running a healthy surplus from 2003 through mid 2008.
Unfunded wars, tax cuts, Medicare Part D....
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It is a good thing a majority of Democrats in Congress didn't vote in favor of all of those wars and medicare Part D. Unless and until you are willing to accept your side's support of those deficits, shut up.
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I am not on any "side". I supported the wars to some degree, AND THE DAMNED TAXES TO PAY FOR THEM. I support a fully nationalized health care system, AND THE TAXES TO PAY FOR THEM. I do not support tax cuts, except for a few specific ones that would be offset by higher taxes somewhere else.
You can't pin someone else's political cowardace on me.
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Well, at least it's good to know you've supported an alternative path to economic ruin through higher taxes.
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Sorry, Chad. We've been right around the cusp of the Laffer Curve since about 1983. Raising or lowering tax rates always results in negative feedback forces. We're pretty close to maximum government revenues right now, short of seizing all private property and turning into a communist dictatorship (which history has show also does not work tremendously well in the long run.)
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Top of the Laffer Curve at ~18% tax rates?
lol lol lol lol lol lol lol
Not even close. Do you honestly believe that the rational response to a 5% tax increase is to decrease your income by almost 30%? THAT is what would have to happen, on average, for the Laffer curve to be true at an 18% tax rate.
(PS: Yes, Laffer effects do exist in certain circumstances, primarily with respect to rich people and corporations using tax havens. There are plenty of ways to deal with this, especially if conservatives get the hell out of the way and quit protecting the tax dodgers).
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its kinda funny that basically the only people in the world who actually believe this spend to get growth thing are democrats
every EU state is implementing an austerity program, even the left wing parties
the only debate is how fast to implement themThe whole planet is wondering what the hell the democrats are doing,
Obama was supposed to "make ammends" with the EU for BushNow we're just giving ourselves a collective faceslap as it look like he could cause another depression
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"There are plenty of ways to deal with this, especially if conservatives get the hell out of the way and quit protecting the tax dodgers)."
Of course you define "tax dodger" as anybody who doesn't give the government everything that they want when they ask for it.
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um the tax rate isn't 18%. I think you read the graph wrong.
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The chart doesn't have any bearing on the Laffer curve. The Laffer curve supposes that total tax revenues go down after a certain point because GDP is decreased. The posted chart tracks the ratio of tax revenue to GDP. From this, we can't tell what's happening to tax rates or total tax revenues.
If we want to talk about the Laffer curve, at least do some math involving the top marginal tax rate. Even then, your simple calculation ignores how people can shift their income to lower-taxed endeavors.
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If you want corporations to stop using tax havens, STOP TAXING THEM! It's stupid anyway - we end up paying the taxes anyway. To make up for the loss of tax revenue, we could tax investment income the same rate we tax earned income. I don't see why the two rates should be different anyway.
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"There was absolutely zero excuse for not running a healthy surplus from 2003 through mid 2008."
Except the democrats going on TV every day arguing that "Bush's recession is the worst since Herbert Hoover." You revisionist prick.
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Using the same logic, there was no excuse not to have massive tax cuts in the late 90s, yet any time a Republican suggested it, Clinton demagogued it as one of their "risky schemes".
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You're supposed to spend more when economic times are bad for so many folks.
Thankfully, most of the world has now finally found enough good sense to stop listening to fools like you.
The real wonder is only that it took so long.
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You're supposed to spend more when economic times are bad
When my household income got cut in half, I thought the same thing...
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But they are about helping poor people. Remember that.
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Teachers are the poor. Which makes me essentially homeless.
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Their line of argument was, well, the cost of food relative to what we thought it would be has come down, so people on food stamps are getting a pretty good deal in comparison to what we thought they were going to get.
I would question whether even the Obamorrhoids could be that craven, but then I realized it's essentially the same argument lefties make against allowing big-box stores into inner cities.
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Well, you know there all those hipsters buying organic honey with their food stamps.
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his post is no big surprise. Wake me up when Gallespie comes across something that doesn't confirm his cherished articles of faith.
Personally, I think Paul Krugmam is right. Roosevelt's mistake was not spending enough. Maybe we'll have to wait and see what President Palin does.
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LOL
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Well of course. Who can argue against we didn't go big enough.
My forehead is taking a beating this morning.
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You're doing it all wrong.
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How big should the stimulus be Max?
3 trillion?
5?
9? -
Sweet! Palin props from Max. She would be better than the big O, that's fer sher.
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Keep sucking my cock, Max. There's a good little minion. Watch the teeth.
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President Palin does.
We missed you, Shrike.
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If you even mention cutting entitlement, you are racist. You racist.
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Learn to spell your own name, NAALCP.
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uh... what does the "L" stand for?
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lycanthropic
They adopted the werewolf cause.
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Wait a sec. Are you saying the government budget works just like mine? Who would have thought that?
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The more you spend, the more you save.
If you'll excuse me, I'm going to go drink myself smart(er).
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That only works when things are on sale.
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You are not considering the multiplier effect Suki. If you had a PHD, you would no the complex calculations needed to realize that the more you spend the better of you are, even if you are going "broke" in terms of all that old fashioned redneck mathematics.
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"You are not considering the multiplier effect Suki. If you had a PHD"
I know the requirements are lower than some think, but I'm pretty sure you have to at least exist independently outside some guy named John's head to get a terminal degree...
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It took PHDs in finance and economics to tell us that the housing market would never go down throughout the US at one time. And that loaning money to people to buy houses that they couldn't afford was the road the wealth.
Five years ago there were people in Congress and the Fed and Wall Street who believed those things as an article of faith. As usual, you don't get the joke. It take a tremendous amount of training to convince yourself of this kind of nonsense. It doesn't come naturally.
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I'm not so sure about that.
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I believe the correct spelling is "multipLIAR effect".
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ps- MULTIPLIER MULTIPLIES!
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AND teh externalities!!!!1!!
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This is sort of a threadjack, but not totally. This is the best article I have read in a long time. And it goes a long ways to explaining why are spending is where it is and a lot of other things to.
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"...explaining why are spending is where it is and a lot of other things to."
President Bush? Is that you?
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Max, are you really criticizing someone else's grammar and sentence construction?
Really?
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Max, he likes to be spanked, not criticized
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It doesn't matter how the government spends the money, it just needs to spend lots of it. We would all be better off if Obama paid all unemployed workers $50 an hour to sit around and jerk off from 8 to 5. Then they would go out and spend the money from 5 to 8. And the businesses that receive the revenue would give it right back to the government so it can pay people to sit around and jerk off from 8 to 5.
Get it?
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The multiplier comes in when the unemployed getting paid to jerk off go out after hours and have unprotected sex with a hooker and impregnate her. Multiplying the number of people in Amerika.
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You've been reading my posts ...
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How are you going to find a hooker willing to have unprotected sex?
I suggest drunks in singles bars instead.
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Deficit hawks pretty much have only one option -- spending cuts. And that means digging into entitlements, particularly Medicare, Medicaid and Social Security, which consume a huge and ever-growing share of the federal budget.
I can't take anyone serious who forgets to list defense with Medicare, Medicaid and Social Security.
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I can't take anyone seriously who thinks that the deficit can be solved by cutting defense. Defense, unlike entitlements, doesn't have programed increases. Defense spending is a matter of discretion. Entitlements have become a matter of mathematics.
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The 2009 deficet was around 1.4 trillion dollars and the defense budget was a little over a trillion dollars. John, meet math. Math, meet John.
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So if we gotten rid of any ability to defend ourselves and unilaterally and completly disarmed and renounced all of our commitmments to DOD retirees and veterans, we still would have a four hundred billion dollar deficit.
Math MNG, It is no surpise you don't understand it.
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It would certainly make a rather big dent in the deficet to trim it way back.
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But that would still leave us tens of trillions of dollars in debt to future Social Security and medicare obligations. Broke is broke. You could eliminate it and we still will go broke. Unless you deal with entitlements we are going broke. DOD is just a sideshow.
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Just raise taxes, especially on you rich fucks making more than $99K a year.
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Just watch as all the "rich fucks" up and move to the Cayman Islands (or whatever other tax haven they desire).
If you're offering a shitty social contract, don't be surprised if they turn you down for a better deal.
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And then the rich fucks move the Cayman Islands and invest all their wealth in Asian companies, leaving the US to quietly implode. Nice theory, with just one small problem: It's stupid.
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Chad just told us something. He must make $98,900 a year.
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Actually, that was someone spoofing me, but $98k is not an unreasonable guess.
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And anyone making $99K a year needs to be taxed at least in the seventy-five percent bracket. Over $100K, the tax rate should be 95%.
And I'm talking about taxing every penny of that income.
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And anyone making $99K a year needs to be taxed at least in the seventy-five percent bracket
Yes, a single professional mother is supposed to save for her kids' college tuition while taking home $25,000/year after taxes.
Fuck you Chad.
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Cutting Chad's grant money would save a lot.
Chad never notices his privileges over the poor. He considers those people inferiors.
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John entitlements are the sideshow. There are relatively easy solutions to their projected shortfalls. Yes, it involves slightly increasing revenue from the rich. But you guys would rather cut benefits to old people than touch a dime of massively wasteful defense money or raise taxes on the rich a cent. It's not consistent or sensible in any way, it's just freakishly immoral.
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I'm all for reducing our military bootprint on the world, but stripping the US of defense entirely (one of the few legitimate functions of government) is not exactly going to help those old pensioners when those damn Canadians invade and turn us into a slave colony.
And raising taxes "on the rich" is a sure way to tank and already woefully bad economy, leaving your precious "old people" unable to eat or heat their homes.
Economic downturns hurt the poor the most, and "soak the rich" fiscal policies inevitably lead to economic downturns.
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"But you guys would rather cut benefits to old people than touch a dime of massively wasteful defense money or raise taxes on the rich a cent."
Your assumptions are completely incorrect. I don't think that we shouldn't lower defense spending. Most people here would agree to fairly substantial defense cuts. YOu are such a blind, illiterate asshole that you keep hammering away at the defense spending issue when me and others have said a hundred times over that we are in favor of defense spending cuts. How many articles has Reason run about cutting defense spending?
Of course in your mind there is absolutely nothing immoral about robbing people at gun point. Fuck you.
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Actually we are for laying off civil servants and eliminating unnecessary government agencies.
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And the defense budget is not a trillion dollars. It is $663 billion includind the wars. This is one of those "citations" you are always yammering about.
"President Barack Obama today sent to Congress a proposed defense budget of $663.8 billion for fiscal 2010. The budget request for the Department of Defense (DoD) includes $533.8 billion in discretionary budget authority to fund base defense programs and $130 billion to support overseas contingency operations, primarily in Iraq and Afghanistan."
http://www.defense.gov/releases/release.aspx?releaseid=12652
IT is so funny. You spend your whole life demanding citations. And then pull imaginary numbers out of your ass that could be found by a simple google search. First link provided no less.
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http://www.independent.org/new.....sp?id=1941
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That link is bad. And I find it hard to believe you can question the DOD press release on Obama's proposed budget. Maybe Congress will go crazy and add 400 billion to get you to a trillion but I doubt it.
Sorry but leftist policy papers that could farm subsidies as part of the "defense industrial complex" don't count.
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You think the independent organization is a leftist policy paper?
Hilarious John!
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"The Independent Institute is a libertarian[1] think tank based in Oakland, California. Founded in 1986 by David J. Theroux"
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Considering that it did exactly what I said it was going to do, it speaks for itself. I give the actual figures of the budget and you desparately googled and took the first piece of shit you could find that someway in anyway supported you. You are just like Joe. You will never admit you were wrong on anything no matter how obvious it is.
And you will just write dumb ass things like "hillarious" rather than engage the subject. As I said above, even if you got rid of all of that and left the country defenseless and all retirees and disabled veterans totally on the street, we still would have a huge deficit. Yet, somehow defense, and not entitlements which are all in debt to the tune of trillions of dollars in future obligations, is the problem.
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Hey John, what's bigger, the Medicaid budget or Defense budget?
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Which will be bigger in 20 years? It is the programed increases and the future costs that are the problem.
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http://www.ncpa.org/pub/ba662
By 2040, Social Security and Medicare will take up 61% of the budget. That is the problem.
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Get a room, girls.
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2040 John. You're being instructed by your right-wing sources to panic about this. We have less time to fix energy and climate, and that's gonna take a hell of a lot more work than fixing SS and medicare.
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Fixing "energy and climate" is not a lot of work. Something which is impossible isn't much work at all. If we banned all oil and coal use in the US tomorrow, the exact same amount of fossil fuel would be consumed over the next 100 years, it would just be consumed overseas, who would pick up the slack for our inability to manufacture pretty much anything.
Or are you proposing a war with China and India over fuel usage?
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Tara, China is doing more than we are to address the problem. Any rational country would want to address it immediately, and right now China is the more rational.
ANY argument against it, even phony fatalistic ones like yours, do nothing but feed the status quo, which nobody except oil and coal industries should consider the best possible world.
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You are wrong, Tara. First, it is certain that almost all of the western states will go at least as far as we go along a clean energy path. You are now talking about a large fraction of the world's coal and gas reserves, and a non-trivial fraction of the oil reserves. Second, you are simply wrong that developing nations won't follow. They will, for three reasons.
1: It is in their own interest not to choke themselves.
2: Clean energy prices are falling over time. Fossil fuel prices will rise in the long run. It is only a matter of when the lines cross, not if. The developing nations aren't stupid, and know where the money is going to go.
3: Trade wars aren't in their interest, either.
Like a typical conservative, when presented with a prisoners' dilemma, your response is "We gotta keep sure to rat out our partner before he rats us out", rather than figuring out a system which ensures cooperation. The result of your logic is the lose-lose sitution becoming reality.
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It is only a matter of when the lines cross, not if.
"when" is a pretty significant question in itself. If the lines cross 100 years or more from now (which is not an implausible estimate, given the extremely slow progress in "clean energy"), that really doesn't mean anything to a country that has a hungry population that doesn't enjoy being hungry (as most of us don't). When you talk about developing countries, you're dealing first and foremost with stomachs, not brains. Stomachs don't care about the long term.
So when you've figured out a way to "ensure cooperation", we'll talk. You certainly haven't figured one out yet. Until then keep your filthy paws off my global economy.
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You define ignorance Chad. What a pathetic sack of shit you are you little pansy.
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We have less time to fix energy and climate, and that's gonna take a hell of a lot more work than fixing SS and medicare.
And would not allowing the economy to go into the Greatest Depression scale back the use of combustion? -
Yes Michael and all Americans committing ritual Seppuku would seriously cut back on emissions as well.
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Similar to this, Tony?
http://vhemt.org/
Hey, we gotta save the Earth... so, we should just kill ourselves!
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http://www.independent.org/blog/?p=5827
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http://www.usgovernmentspendin.....mp;local=s
Including State, local, federal spending, defense spending was a tad over 700 billion dollars. (2005 dollars)
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Were you counting the nuclear spending in DOE? DHS? FBI? Defense-related spending at NASA? Veterans benefits? Interest on debts related to previous un-funded military spending?
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STOP HAMMERING AWAY AT THE DEFENSE SPENDING ISSUE. BASICALLY EVERYONE HERE AGREES WITH CUTTING THE DEFENSE BUDGET. YOU ARE A FUCKING MORON FOR PRETENDING THAT WE DON'T. PLEASE DROP DEAD.
I don't believe that all of those things are necessarily "defense" spending. THe numbers in the link I gave you are not "MY" numbers. I personally don't know exactly what the government spends on anything, but I don't know of any sources that say that defense spending is as high as you say it is. Regardless, you are just splitting hairs. I would cut the defense budget in half, but it's not like we can exist as a country without defense spending. Even if what you are saying is true, simply cutting defense spending from 1 trillion dollars a year to 400 billion dollars a year would not solve all of our budget problems. Even if it did, I would still suggest cutting other programs, too. You make it sound like it would be okay to wast money in other areas if we cut defense spending, but I believe that waste is waste. It is the people like you who argue that spending money on anything is "stimulative" regardless of what the money is spent on, so I find your enthusiasm for defense spending to be dubious. You are arguing yourself in circles, claiming that deficits are great no matter what the money is spent and then arguing that we should cut defense spending to balance the budget. We should be cutting a lot of things, but the only thing that you care about is defense spending. Truth is that I don't care what we are spending on any one thing, if we could be spending less, we should. Period. Why you split hairs on this issue is a complete mystery to me.
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I think we "agree" that the defense budget can be cut, but I would disagree with your idea that we could cut it drastically, immediately. We have built a world where our military is a major stabilizer, and transforming it to one where it is no longer a necessity will take a couple decades...and some cash. A more realistic option would be to hold military spending flat in nominal dollars and let inflation chip away at it over about twenty years, while using a portion of the savings for international development and law enforcement.
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I think that we could end a large portion of the spending immediately. We could retire our oldest hardware or sell it. We could pull military bases out of countries that don't need them. We could shock the countries that "depend" on our military strength to defend themselves (while supporting the obvious exceptions).
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Stop thinking Chad.
Stop being a hypocrite and give all your money to the poor and take a voe of poverty.
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Don't forget that a lot of money is spent on "defense" projects that benefit some Congressman's district, but that the Pentagon doesn't even want.
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And a lot more of it is vet benefits. I can see the headlines now when politicians following MNG's advice announce they plan to take money away from crippled war heroes to close the budget gap.
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Hmm, linkee no takee
http://www.independent.org/newsroom/article.asp?id=1941
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It counts foreign aid and spending on veterans health care as "defense spending". Yeah MNG if we could just cut all that uneeded defense spending going to take care of people who had their legs blown off in the war, all our problems would be solved.
The defense budget is what it is. Leftist policy papers counting everything they don't like in the DOD budget don't count.
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Maybe we should avoid putting troops in a position to have their legs blown off unless doing so is vital to national defense. That might help with the veterans' health care spending.
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That doesn't change the current spending any.
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That doesn't change the current spending any.
True.But is there any reason to have permanent military bases in Germany?
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no, and you won't get much of an argument against letting Germany pay for their own defense from this crowd. Although having a base in Germany seems to be very useful since everyone I know that became sick or injured in Iraq ended up on a plane to Germany.
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Am I the only one who finds it funny how the torture supporting warmonger Glenn Reynolds suddenly is so concerned with fiscal discipline?
Sure, he had a token pet-project under Bush (porkbusters), but he is obsessed with it now.What a hack.
/Jay -
Fuck you Jay. Porkbusters was its own organization. Reynolds just linked to it. And Reynolds was all over Congress about spending when the Republicans were in control. Just shut the fuck up if you don't know what you are talking about.
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I challenge you to find critique of Bush/Republican controlled congress' spending.
He's nothing but a torturesupporting warmongering partisan hack.
/Jay
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Do your own google work troll.
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I already searched instapundit.com and oddly enough any reference to spending before republicans lost the white house and congress was in references to Pork. Suddenly, when the black man is in office, it's the most important issue.
What a hack.
/Jay
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But how are they supposed to track how fat every single american is without trillions of dollars?
Fat. It's the new Black.
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How much have we spent to get results like this?
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Spending is not really driven by Social Security, it's debt projection is relatively stable once the baby boomers are taken into account. It's Medicare and Medicaid that truly drive our deficit. And that's why health care reform was, and remains, so sorely needed in this country. Now that we've got people covered the difficulty will be to control costs without sacrificing service to an unacceptable degree.
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You are right that SS is not much of a problem. A few tweaks (retirement age indexing, some means testing, and perhaps a bit more tax) will secure it indefinitely. You are also right that after the boomers pass through the system, it stabilizes. Actually, it gets a bit BETTER in the 2040s and thereafter than in the 2030s.
Everything else is in gross imbalance. Medical spending needs to be controlled, and every other rich nation on earth has figured out how to spend 50-75% (as a fraction of GDP) as we do: insure everyone all the time. Nothing will change until the right accepts this.
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SS is still a shitty savings plan, if you can even consider it that. Even if the spending wasn't a problem, it would still be a shitty program that can really only benefit you if you barely make any money at all. For anybody making more than 20 grand a year, it is the worst savings option of all.
Oh, that's a relief, if we can just sit tight for 30 years, everything will be right as rain. Huzzah.
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Actually, the returns on SS are just fine. They are great, actually, for the working class and poor (6-12% real return. They are mediocre for the middle class, and about zero (after adjusting for inflation) for those paying near the cap.
On the other hand, the real return on 401k's sucks.
http://www.slaughter401k.com/w.....he-market/
The money quote: 1.Over the 20 years ending December 31, 2008, equity mutual fund investors had average annual returns of only +1.87% while the S&P 500 Index averaged +8. 35% over the same time period
Expecting normal Joes to hold their own vs hyper-traders with their T1 lined super-computers stuck straight into the market's heart, who know all the insiders, and who have paid off every ref in sight....yeah, that'll be a fair fight.
Sorry, but your ideology fails yet again.
One more point: SS revenues and payouts ultimately increase in proportion to GDP. So do corporate profits, which are the fundation of stock prices. Ergo, both systems will have approximately the same return in the long run.
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So... if we outlaw private investments... we'll all be able to retire fat'n'happy on Social Security, which will always be there even after our Sun goes super-nova millions of years from now.
Got it.
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Did you read the study and actually understand what it was saying? Because per your M.O. you left out all context. Like the behavioral aspect of chasing profit on past performance, a common mistake from investors.
You are majically assuming that the "normal Joes" are only being out done by the evil traders. When the reality is they are shooting themselves in the foot.
Fuck me that was disingenuous shitball of an attempt make your argument. Either that or you're a fucking moron.
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Why the hell should we leave out "behavior aspects"? That's precisely the point!
Real people are not homo economicus, and you guys need to quit basing your ideology on the assumption that they are.
You are wrong about the normal Joes being irrational, though. When the market crashes and you are playing with large amounts of other peoples' money, you double down (and probably win). If you are playing with money that is the difference between having a roof over your head at age 75 or living under the bridge, you may be forced to pull it out, as you can no longer take big risks.
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I never said they were homogeneous in their decisions? I never said they were irrational, and I never would. They suffer from limited or asymmetric information, different needs, different horizons, different goals, and different resources.
Your use of the study to support your argument is out of context and disingenuous.
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"out of context"
wtf?
It precisely IS the context that matters: what REAL people get, not some mythical "market".
SS provides similar returns with minimal risk, and distributes them more evenly. Indeed, without SS, most people would have to be ultra-conservative with their retirement investments, as a 30-40 year career is NOT enough time for things to even out.
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"SS provides similar returns with minimal risk, and distributes them more evenly."
What if you die at 70? If you die early, SS doesn't pay jack to anybody. Whereas your private account would go to your relatives.
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Did I say anything about 401k's?
Anyway, let's assume that somebody makes 20,000 a year from age 20 to 72. That's 52 years of having 3,000 dollars a year taken out of their paycheck. True, SS will kick them extra money for inflation, but let's also assume that the income of this person rises at about the rate of inflation and so there contributions will increase over time balancing out any extra benefit from inflation adjustments. They would insert about 156,000 dollars into the SS system. Assuming that this person receives SS from the age of 70 to 80 of about 10,000 dollars a year, they would lose 56,000 dollars over just putting the money into a 0 percent interest savings account. Considering there are plenty of 4% interest rate CD's that one can place their money into, that doesn't look very promising.
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Okay, my numbers weren't very good in my last post. True, not all of that 15% is just SS but also medicare. Luckily I found a website with a SS benefits calculator. According to this calculator, somebody who makes 20,000 dollars a year (single male) would earn about a 3% rate of return. Not terrible, but not that great either.
http://politicalcalculations.b.....te-of.html
The fact of the matter is that you have to make a really low amount of money before SS makes much sense, and considering the negative impact of payroll taxes on hiring, SS could very well be making the situation worse. Payroll taxes basically incentivize employers to fire their workers.
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True, mutual funds are shit, but that is not the only investment option.
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Umm, someone who only makes $20,000 a year makes out like a bandit with SS.
Your numbers are simply 100% fantasy. Why don't you dig around at the SS website and figure out how much such a person would really make?
Note that the article I cited was about mutual funds, not 401ks specifically.
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Mutual funds are shit, I agree. I never said that they weren't. Most smart people suggest index funds for long term investing. According to the calculator on this site:
http://politicalcalculations.b.....te-of.html
Somebody who only makes 20,000 a year only receives a return of about 3 percent. YOu can get that same return over the same time period by putting your money into a number of other areas. The returns just get shittier the more money that you make. By the way, the numbers I used were for somebody born in 1986, ie ME! Even the return that relatively poor people receive is below the market return that they could receive elsewhere.
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The fact of the matter is that somebody making 20,000 grand a year is better off putting their money into an index fund then they are putting their money into SS. The truth is that SS only benefits the really poor, and the negative effects of the payroll taxes probably make life worse for them.
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ALso, if people took their SS benefits and invested them in the real economy, the return for society would be higher than it is under the current transfer payment system.
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I said the person earned 6%, your site says 3% real return. That's the same thing. I am glad I can do math. 3% real return is way better than real investors are getting either in stocks or bonds.
You are right, the higher your income, the worse your return. People paying at the cap are getting
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I also admitted that the numbers in my original post were not very good. I however have no reason to disbelieve the calculator at the website I referred you to.
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Btw, I ran the calculations for you, becaus I know you are lazy and won't do it.
Someone earning $20000 for 36 years and retiring at 66 gets $1562/month. This is in return for 10.4% of his earnings (you need to subtract Medicare and disability), which is a total of $74880 in contributions.
To purchase an inflation-adjusted annuity with spousal benefits and the same payout, one would need about $450000, which would require a 9% rate of return.
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Okay, pompous fuck face. Except most people don't start putting money into SS at age 30. Also, I would like to see the calculator that you are using.
http://www.calculatorweb.com/calculators/savingscalc.shtml
If I were to invest the same monthly amount of 166.66 dollars a month (approximately) from age 18 to 66, I would have 290,000 dollars upon retirement. I would also continue to draw interest from this principle over time (about 11,600 dollars a year). I could therefore spend that 18,000 dollars a year in social security benefits from your example and still have money left over after I died 14 years later (probably sooner). Whereas, in your example, the person would only get 18,000 a year until the day that they died. Assuming they live to be 80, that is about 252,000 dollars total, and they would have nothing to give to their family once they passed on. Considering that my generation won't even be able to reap any benefits from SS till we are in our 70's, the numbers look even worse.
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Even if you lived in a box till the age of 30, by the age of 66, you'd have 161,000 dollars if you invested 10 percent of your income at a 4 percent interest rate for that period. That is substantially less than 252,000 dollars, but if you add on the yearly interest, one could live on 18000 dollars a year for 11 years, before running out of money. Sure, that isn't quite as good as SS, but it isn't significantly worse either. The difference is a mere 3 years of 18000 dollars a year income. IF you die at 77, it's a push.
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Actually, a private savings plan is even better in comparison once you zero out the effects of inflation. For example, you can assume that somebody who makes 20,000 dollars a year will see their income rise at about the rate of inflation, so you can zero out the inflationary effects by assuming that their contributions will stay the same. Thus if somebody invests 2,000 dollars a year at a 4% interest rate, you can zero out the inflationary effects simply by assuming that their contributions will not increase while maintaining the interest rate at 4%. Thus 30 years of investment at a 4% interest rate will yield about 160,000 dollars if you don't include the increases in contributions due to inflation. If you zero out the inflationary effects on SS benefits, the real benefit after paying 2,000 dollars a year into SS for 36 years will be a mere 7,900 dollars a year, or 110,600 dollars over a 14 year period.
SO that gives somebody earning 20,000 dollars a year 160,000 dollars in a 4% interest index fund for 36 years vs 110,600 dollars for somebody who contributed the same amount into SS for 36 years, once you zero out the inflationary effects.
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http://www.bankrate.com/calcul.....lator.aspx this was the SS calculator that I used.
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http://apps.finra.org/Calcs/1/Savings
Okay, using this calculator, I was able to figure out what the nominal return would be assuming that each deposit increased at the rate of inflation. So if somebody earned 20,000 dollars a year for 36 years, and their income increased by the rate of inflation, and they deposited 10 percent of their income into an index fund that saw a modest 4% annual return, they would have 250,000 dollars by the end of the period. SInce their principle would keep bearing interest, they would be able to live on 24,000 dollars a year for 13 more years and die at the age of 79. If this same person contributes that same 10 percent a year to SS, and they faced the exact same rate of inflation, and their income increased at the rate of inflation, they would receive about 24,000 dollars a year until they died, even if they died before the 13 year mark. In fact, if they died before the age of 70, they would have nothing to pass on to their family, unlike the person with a private investment.
http://www.bankrate.com/calcul.....lator.aspx
So to beat SS, all you have to do is earn more than 20,000 grand a year or find an investment with greater than a 4% interest rate. Assuming that your income rises at about the rate of inflation, SS is a mediocre long term investment. It is even worse if you include savings beyond the 36 year mark, and if you are unable to receive SS benefits until after you are 66, like most of my generation.
Basically, SS only pays if you make less than 20,000 dollars a year or live a long time.
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Oops, change 24,000 to 25,000 in every instance in my last comment.
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Oh yeah, and I assumed a 3% inflation rate.
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tkwlge, only your 35 highest income years (inflation adjusted) count for SS. So the $2000 you earned one summer as a teen at the burger joint probably doesn't impact your final payout at all.
You are giving numbers for a single-person, flat rate annuity. SS is inflation adjusted and has a spousal benefit, so you would need more cash to generate the same monthly payouts.
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Someone earning $20000 for 36 years and retiring at 66
He started working at 30?
Tack on another 12 years of earning $20,000/year and then redo your math, including the extra compound interest earned on 12 earlier years.Also, $1500 a month is more than comfortable for someone used to living on $20,000. If that's the base payment, then it's merely an illustration of how much room to cut there is. $1,500/month is luxury to a lot of 20-somethings I know.
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"He started working at 30?
Tack on another 12 years of earning $20,000/year and then redo your math, including the extra compound interest earned on 12 earlier years."Yeah, I mentioned that above.
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tkwelge, we have to be careful here. SS only counts your 35 best years (which is bad for your "return"). However, unlike the market, it is agnostic to when those years occur. The market punishes most people because they do most of their savings after their mid-forties. Our assumption of someone earning a flat amount of money is actually highly suspect and favors bonds.
In any case, your own calculator shows that most people get 1-3% real returns on SS, and the poor get much more. This at least matches anything that real people are getting in the much more risky markets.
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I'm sorry, but a ran the numbers on what SS would pay a single male who earned 20,000 a year for 36 years and what a modest 4% Index fund would pay out to that same person who deposited an equal amount into the index fund. Even at a low income level, such as 20,000 a year, SS isn't any better than alternative investments. I added in the effects of inflation. Use the calculators that I used, and it will bare out everything that I said. YOu are the one monkeying with numbers. I don't deny that SS probably pays out a decent amount to those who earn no money or happen to live a long time, but to anybody else, it is a money loser.
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"In any case, your own calculator shows that most people get 1-3% real returns on SS, and the poor get much more. This at least matches anything that real people are getting in the much more risky markets."
Most index funds offer a better yield than 1-3%, and they continue to bare interest after you retire. You didn't include that factor in your Bullshit statements. You also ignore the fact that if somebody drops dead early, say at the age of 73, they don't have hundreds of thousands of dollars to leave to their family like somebody with a private savings account. You also ignore the fact that my generation will not even be able to earn SS till we are 72.
"The market punishes most people because they do most of their savings after their mid-forties."
I took that into account in my example. Also, we are talking about the alternative of placing our SS contributions into a private savings account. Even 18 year olds are forced to pay into SS.
"So the $2000 you earned one summer as a teen at the burger joint probably doesn't impact your final payout at all."
No, but if I earned 10,000 dollars a year from 18 to 30, which isn't a difficult prospect, that adds 16,000 dollars to one's initial savings after interest of 4%. This interest will continue to compound from age 30 to retirement, adding tens of thousands of dollars to one's savings.
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I don't consider making 30,000 grand a year to be that much money at all, but once you earn 30,000 dollars a year, SS is a complete money loser.
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So Chad, if I ever see you making your BS argument that SS is a GREAT investment, I will call you out on it again. SS is only a great investment if you make under 20,000 dollars a year, earn no money from 18 to 30, and inflation is high. Getting married to a nonworking spouse helps too, but anyone else is not seeing a much of return from SS than they would see from alternative savings plans.
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SS is an investment just like Bernie Madoff's hedge fund was an investment.
It's a pure and simple Ponzi scheme, so don't waste your time calculating what investment returns you're being promised. You'll only get anything if there are enough people still paying in when you're hopefully cashing out.
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I just showed the graph to my twelve-year-old son, and asked him what the government should do and he said, "cut back". There, now if we just replace all of the congressmen with smart twelve-year-olds, problem solved.
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Ahh, but your 12 year old is unlikely to understand that
1: There are a lot more retirees now then back then
2: A large part of the "new" spending is paying the interest on the "old" debts.
3: Government has been taking an increasing role in health care, because it works better than the alternative. This is expensive.
4: In general, the government provides services, not goods. Inflation has been much higher for services than goods, and therefore, all else being equal, providing the same amount of services would require an increasing portion of GDP over time.
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Government has been taking an increasing role in health care, because it works better than the alternative.
In general, the government provides services
[citation needed]
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Google "international health system comparison" and read to your heart's content.
We spend far more than everyone else for mediocre results. For everything that we are good at that you can cherry-pick, one can find several where we are mediocre and a couple more where we out-right stink.
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The only reason that Internationally national healthcare systems have been successful at lowering cost is due to rationing of the most expensive services. The US has government funding for healthcare that doesn't ration nearly as much if at all, and the government segment of US healthcare is not "cheaper." Their is nothing inherent about Universal Healthcare that makes costs lower. The only reason costs are lower is because of rationing.
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The only reason that Internationally national healthcare systems have been successful at lowering cost is due to rationing of the most expensive services
That's one reason, but surely not the only one. They tend to pay their medical professionals less, have less (and more streamlined) paperwork, either cut out the insurance middle-men entirely, or at least give them a lot less to do (no spending big $$$ trying to boot sick customers), and avoid many of the worst costs via prevention rather than waiting for people to show up at the emergency room.
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avoid many of the worst costs via prevention rather than waiting for people to show up at the emergency room.
google "massachusetts health care system".
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I am not interested in the MA system. It is just a slightly less wing-nutty version of the crap system we have had for decades.
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...whereas OUR wing-nutty crap system will ensure that no on ever dies again.
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I am not interested in the MA system.
I wouldn't be either if I were trying to push single-payer in the US. In fact, I would try to pretend it doesn't exist.
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The only reason that Internationally national healthcare systems have been successful at lowering cost is due to rationing of the most expensive services. The US has government funding for healthcare that doesn't ration nearly as much if at all, and the government segment of US healthcare is not "cheaper." Their is nothing inherent about Universal Healthcare that makes costs lower. The only reason costs are lower is because of rationing.
If we imposed a system of price controls on health care, that would cut medical expenses greatly. -
Correct. Japan serves as proof.
Good job, Michael, of proving a liberal point!
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Google "decade by decade health system comparison" and you'll see that the bang for our buck has gotten worse as the government role in health care has increased.
Please don't pretend that the modern US health care system is some Wild West laissez faire rule of the jungle dog eat dog ... thing.
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1. Retirees have had their entire working life to save. If they didn't, that's not anyone else's problem but theirs.
2. So more debt is the solution? You're pretty stupid.
3. Oh, I see - you are a reality denier. Government got into healthcare just before health costs started skyrocketing - coincidence? I think not (this is something acknowledged (sort of) by PBS - not exactly a right wing source).
4. If Government supplies services and there has been more inflation on services than goods, you just proved the point that Government is an inefficient user of resources - thank you.
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Chad - what's your plan to lower doctors' remuneration? Currently US doctors get paid twice as much as euro doctors. THAT's the primary reason we pay more for health care.
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Tell your 12 year to stop watching television. Problems are never solved in 30 minutes.
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No. But the simpliest and hardest sollutions are often the only ones available.
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Problems are also not solved by continuing the actions that caused the problem.
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it just occurred to me: that's what went wrong with you libertarians-too much tv. No wonder your concepts are not based in reality
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Like cutting taxes on the wealthy?
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Chad, see above. Tax revenue barely changed despite "tax cuts." What did fluctuate was spending. If one thing remains constant and the other changed, what do you think caused the problem?
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Sorry, I'm so steeped in wealth-envy, I can't help but bitch about it all the time.
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NO! I hate the wealthy more than you do, Chad!
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Wealth is the source of all homophobia.
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My minions are doing My bidding here on this forum thingy. Well done!
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I would love to have Chad, Max, and Tony on my show. It would triple my audience.
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I need the ratings more than you do, Olbermann. I have to keep the image of being the 180-degree opposite of Limbaugh to peddle; you just have to maintain a semblance of sanity to keep your hundreds of viewers.
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What's a couple hundred billion a year among friends, heller? Tax revenues dropped notably in the 00's, and only go back up in the 10's because it assumes the expiration of the Bush tax cuts.
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Cut wasteful spending, trim a bit off everything else - military included - implement a spending freeze for a year or two, and keep the tax rates right where they are.
This ain't rocket surgery, Chad.
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High taxes and lots of spending =/= low taxes and prudent spending. The two are not polar opposites in terms of equality of outcome, which is guaranteed by the Bill of Rights.
This beer makes my beard smell yeasty.
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I can lick that clean for you, Master!
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Like cutting taxes on the wealthy?
I actually think that the cutting taxes without equal or greater spending cuts was a bad move, but it was hardly the cause of the economic collapse.
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Exactly. Tax-and-spend is just as bad as tax-CUT-and-spend.
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No, the latter is worse because it balloons the deficit.
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Sorry, but I firmly believe if taxes are kept at a reasonable level AND spending is kept in check, things will work out just fine.
Therefore, they are equally evil.
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No, but the tax cuts are a large part of the deficit.
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Only because of overspending, Chad. Had we not gone to war and done other unnecessary spending... well, you'd STILL be bitching about the tax cuts.
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Screw you. Sometimes solutions are obvious, just not to reality denying, logically challenged, compassionless liberals.
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It's that "holistic economy" claptrap they peddle, Mokie. That's the really dangerous shit.
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If one thing remains constant and the other changed, what do you think caused the problem?
This is a trick question, right?
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Given that the private sector spent the last twenty years borrowing like crazy from China
Que?
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Instead of being petty about wanting an extra nickel on the dollar (the coming tax hike), why not cut all spending, across the board, by that same nickel?
That's EVERYTHING, Chad... including the military budget.
Take the entire budget - ALL spending - and cut it by five percent. Keep taxes right where they are. Eventually, it will work itself out.
But, hell, we can't even talk about not INCREASING spending from one year to the next. Fucking liberals just can't stand the idea of NOT spending more next year than at this moment. They hate it so much, they call it "slashing the budget".
Even worse... if Department of [insert whatever] was slated to get a 4% budget increase next year, but will only get 3.5% increase instead... same thing - fucking liberals call it "slashing the budget". Just as disingenuous as not calling the coming tax increase a tax increase - no, it's "rolling back the tax cuts". Same thing, just Orwellized.
Tax-and-spend is just as bad as tax-cut-and-spend. When are politicians and most Americans, going to wake the fuck up about this?
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HERETIC!!! BURN THE NON-BELIEVER!!!
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Do you want me to kill him, Master, or should I just keep sucking your cock?
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Won't cutting 5% across the board just reward wasteful programs (those that should be cut by more than 5%) and punish efficient ones? Unless you're willing to tackle the real budget problems that are mostly Republican pet boondoggles then you're not serious about it. You're peddling starve the beast rhetoric, which means you can countenance no tax increase, ever, which is just absurd. For all the talk of old-fashioned homestyle fiscal prudence around here, where is the call to simply pay for the things we buy?
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Okay, Tony, I'll amend that to "cut wasteful programs by ten percent".
Happy now? Or are you still in "we can only tax our way out of this mess" mode?
As for "simply pay for the things we buy", your fucking Democrats abandoned PAYGO and went straight back to the "rich people suck" economics strategy.
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And the only way I'd ever advocate a tax increase, would be to offset by cutting taxes in other areas so the net effect is revenue-neutral.
But NEW taxes? Fuck, no. The pointless tanning tax is one example of how not to do it. But I'm sure you'll tell us why a ten-percent tax on tanning is a *good* idea - IOW, it's good because it's a new tax, and you liberals love creating new taxes more than you love jacking existing taxes up, especially on those hated wealthy people.
I'm talking to a wall, though. A wall that believes the pabulum spewed forth by the Saint John Maynard. At least you, Tony, don't have the power to implement his misbegotten theories.
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So you agree we should not extend the Bush tax cuts? The only thing they accomplished was to further transfer wealth upward, right before a major recession. They were useless and they weren't offset, so I presume you're in favor of letting them expire.
A tanning tax sounds good to me. We tax other things because they cause cancer.
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Of COURSE you'd say that, Tony.
No, keep the "Bush tax cuts on the wealthy" - gotta love that rhetoric! - and cut spending across-the-board. More where it's being wasted, less elsewhere.
Still not good enough, though, is it...
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Don't you DARE call us tax-and-spenders! You uneducated bumpkins don't understand the nuances of macroeconomics!
And don't you dare call us elitists, either, you inbred gun-licking racists!
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Don't mean to indulge in friendly fire here, but why are libertarians wedded to the Bush tax cuts again?
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Because getting rid of them is just a sop to the leftist vote-buying scheme, Tulpa.
Don't tell us you're in favor of higher tax rates...
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If I'm forced to choose between higher taxes and higher deficits, then yes, I'll take the taxes.
Just because liberals support something doesn't automatically mean it's a bad idea.
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Liberals are trying to sell us on "five cents more on the dollar is all we want, and it'll fix all our problems anyway"... until they put the squeeze on by increasing OTHER taxes, or creating new ones.
We ordinary people have to budget and live within our means. So should government.
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So stop bitching about deficits or anything else for that matter TLG. If you can't entertain the notion of letting tax cuts, which will cost 3 trillion in ten years, and which have proven to be useless for the economy, all because of slippery slope paranoia, then what's your advice worth?
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Tony, the only reason you and pretty much every other liberal want to raise taxes - the only REAL reason - is so you can get back at the wealthy bastards.
Just as with most causes - being against drug legalization or gay rights, from (mostly) the right-wing, or global warming, or pretty much any social concern - most people are only in those causes so they can wield power over others... not for the good of society.
Thus, left-wingers who salivate at the anticipation of higher taxes on Teh Wealthy are almost to the man/woman in it just for the power kick. Any benefit to society - if there IS any benefit - is ancillary. Prohibitionists in the Drug War are, similarly, only in it so they can control people... not to "save the children", which to them is just a side benefit.
Social engineering via tax policy only breeds contempt for anyone over an arbitrary income level. It makes people FEEL better to hate the Scrooge McDuck stereotype, but it does nothing to fix problems.
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Example:
"A tanning tax sounds good to me. We tax other things because they cause cancer."
The latter part is just icing. What YOU are drooling over, in this case, is the tax itself - because you view tanning as a frivolous activity, and likely you view it from a class angle - only rich people go to tanning salons, so fuck 'em and make 'em pony up some dough.
Of course, this tax won't do Jack Shit to actually FIX anything... but it'll make you feel better, Tony, and in the end that's all it's really about.
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Another example:
People who are in favor of banning smoking in private businesses - for them, for the most part, clean air is just a side benefit; what REALLY motivates them, is getting their agenda imposed. Some of these freaks even compare their cause to the civil rights struggle of the 60s.
Similarly, those who push for higher tobacco taxes are only in it to get more tax revenue... health is just a side order, not the heartfelt reason for supporting the increase.
Cynical, perhaps. Realistic, definitely.
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Wow TLG I didn't know you were such a brilliant psychoanalyst--nay, mindreader.
I argue for paying for the things we buy and you descend into childish accusations of wealth envy because you refuse to address the issue. Your dogma forces you to be against any tax or tax hike, no matter how big the deficit is, then you bitch about the deficit. I want people to pay as little in taxes as are necessary to fund the things we buy. What's wrong with that?
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I want people to pay as little in taxes as are necessary to fund the things we buy.
I want assholes like you to stop buying worthless shit like "healthcare reform," first.
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only filthy guidos and guido lovers go to tanning salons.
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Tony, the only reason you and pretty much every other liberal want to raise taxes - the only REAL reason - is so you can get back at the wealthy bastards.
Truth. The emotional appeal the Democrats constantly use is basically revenge against the "rich". That's why they are constantly going on about "fat cats" and "wall street" and such. Pushing people's envy button.
Always, always the talk about how "the rich are getting richer", and the less rich need to "get theirs", mostly by taking from those who have more.
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And libertarians would never engage in such behavior. Your rhetoric on government is so judicious.
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The emotional appeal the Democrats constantly use is basically revenge against the "rich".
Maybe economic conservatives should stop giving them ammunition for that appeal by lowering taxes on the rich while we're running a gigantic deficit.
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Tony, I really need to reward you for peddling the "feed the beast" rhetoric. You know, show how much I care about the little people out there doing My Work.
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For all the talk of old-fashioned homestyle fiscal prudence around here, where is the call to simply pay for the things we buy?
I agree that that's a start. The next step is to only buy what we can reasonably pay for, and that's where I have a feeling I'm going to lose you and your copartisans.
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Ah, LG....let's have a back-to-school math lesson:
When you drop your spending from ~23% of GDP (current spending) to 18% of GDP (projected revenue if we let the Bush tax cuts expire), that's a 5/23 cut, or 22%, not 5%.
So, are we just going to shoot a fifth of the old people who show up at hospitals? What's your plan there?
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Shooting old people is unnecessary, Chad.
Note that YOU came up with that "solution", not me.
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You just want to kill old people and children! Ninety-percent tax rates were good when we had them, and we should have them back now! Tax hikes ALWAYS fix things!
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Uhh, LG, what IS your solution then?
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Already laid out, Chad. Cut all spending - more on the wasteful programs, less elsewhere - and keep taxes right where they are.
Less spending = less need for revenue. Bam, problem solved.
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You have yet to lay out anything.
How are you going to cut Medicare 22%? Be specific. Who are you going to deny care, specifically? Who decides?
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Assuming - as you liberals have been doing - that raising taxes by five percent will fix all our woes... cut spending by fiver percent, across-the-board. More - as I've said several times now - on the more wasteful, and especially unnecessary, expenditures. Eliminating the latter would be far better, but that's damned hard to do.
Nice how you keep focusing solely on Medicare, in an attempt to make me look like I "want" people to die. Typical liberal heartstring-pluckage.
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But the symbolism of rescinding the Bush tax cuts isn't the ONLY thing you want, is it, Chad... no, you fuckers want more and more, and want to *spend* more and more. Choke off the private sector. Choke off private autonomy. More government = better living.
Not buying the bullshit, Chad.
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Don't deny anybody. Cut the administrators pay.
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Chad, you twits on the left REALLY want that five-percent increase (it is not a fucking "rollback", it's an increase) in taxes by way of letting the tax cuts expire.
Is that five cents on the dollar going to fix everything, or are you fuckers going to hold your hands out for MORE money?
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I'm curious, if there was a program that liberals liked that had its budget increased for a five year period, and that increase was allowed to expire, would you refer to that as a rollback or a spending cut?
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A spending cut. Anything going from a higher to a lower amount, is a cut.
Liberals, however, use the shiny-object term "rolling back" to hide their orgasm-inducing zeal for tax hikes on Teh Wealthy.
If Company X made widgets and sold them for #39, then cut the price to $34... and then sold out to Company Y, which then decides to jack the price back up to $39... that, Tulpa, is a price increase. Company Y can yelp and deflect about how they're just "rolling back the price cuts of the previous company", but the result is the same... a lower amount going to a higher amount.
Dems must think we're all fucking stupid.
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At least you're consistent, but I disagree on the terminology. If a store has 15% discounts for the first hour they're open on Black Friday, it doesn't seem right to say they had a "price increase" after the first hour. It was a temporary change with a fixed, known duration when it started.
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Not a good analogy, IMO.
The tax cuts were one of the few good things Bush did. Not being fiscally responsible on the spending side, however, was one of his many faults.
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Add "not making the tax cuts permanent" to the list of Bush fuckups.
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Lay off civil servants and eliminate grant money to faggots like you!
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Given that the private sector spent the last twenty years borrowing like crazy from China
See, China buys treasury notes offered by the US government.
The private sector borrows (mostly) from US banks. I suppose also from Chinese banks but not so much.
China holds about $900 billion of the US government's debt. Less than 10% of our overall debt. (link: http://www.ustreas.gov/tic/mfh.txt)
That's too much but it's not paralyzing.
Yet.
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Money is fungible, silly goose.
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debt is not fungible you little devil
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China buys treasury notes offered by the US government.
Which was my point; the Chadbot made an erroneous assertion. The "private sector" is not borrowing from the Chinese; they are buying products manufactured in China. The Chinese government ends up with those dollars, and then buys U S Treasury bonds because the returns are slightly better than burying the money in coffee cans.
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Ah, the silly geese are multiplying.
When the feds borrow from China, that prevents them from eating up American capital, and driving up our interest rates.
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That is the whole point, Chad. It is the government that is largely borrowing from China. IF the government were borrowing less, there would be no necessity to borrow from China.
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And my point is that it doesn't matter who the private sector borrows from directly, because one way or the other, the money is coming from lender nations, most of whom are not friendly to us.
I think you under-estimate how big consumer, corporate, and financial debt is relative to federal debt.
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I'm really not, but you are also forgetting that the major cause of the indebtedness of the private sector is the slashing of interest rate at the fed level. People wouldn't be borrowing huge amounts of money if federal reserve banks weren't constantly pumping excess liquidity into the system.
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But we have to stop shopping at Walmart, because that sends money to China instead of keeping it here. And then they use that money to buy US government debt, which...
OK, I admit I'm having a hard time following Chad's overarching logic here.
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My logic is pretty simple: Americans borrowed lots of money, both publically and privately. That money came mostly from China, Saudi Arabia, and other nasty nations. It is irrelevant which money flowed exactly where, because it is all fungible anyway.
What did the private sector spend its money on? Oil to power our SUVs as they hauled cheap Chinese shit from WalMart to our McMansion. Borrowing money to pay for crap like this is an outright sin.
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Yeah! Everyone owns McMansions, SUVs, and shops at Wal-Mart.
You are such a tool, Chad. Just shoot yourself already, as that is the only way you can REALLY care about the future of mankind.
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It is irrelevant which money flowed exactly where, because it is all fungible anyway.
Actually, no. Government debt is even more sinister because of the implicit guarantee behind it. If the Chinese government was lending directly to private interests in the US, they would have been far more selective about loaning us money than they were about getting T-bills. So the government is (again) the supremely bad actor here.
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Are you trying to argue that chinese shit at walmart is equivalent to us government debt because it's fungible?
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When the feds borrow from China, that prevents them from eating up American capital, and driving up our interest rates.
Sorry, you are completely incoherent on this subject.
You said the private sector was borrowing "like crazy" from China but now you acknowledge it was the public sector.
And now you say it's a good thing because it doesn't crowd out American capital.
Even though most of the US debt is financed by US capital.
You're not just moving the goal posts, you're changing sports.
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Ah, the silly geese are multiplying.
When the feds borrow from China, that prevents them from eating up American capital, and driving up our interest rates.
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Ah, my silly posts are also multiplying.
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"buying bonds" = "lending"
Just in case Chad is befuddled.
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What this chart says to me is to stay away from Republican presidents.
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AND Democrat ones, Tony.
If you were intellectually honest, you wouldn't trust Obama any further than you trusted Bush.
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That's RACIST, you fucking cracker! Where your babies at?
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Everyone in the Tea Party is racist. Because we said so, that's why.
But there are no racists in OUR organization!
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Yeah! I personally screen every Tea Party applicant, and weed out the ones that don't hate all non-whites!
I just wish they hated Jews, too, but we kinda need them now and then.
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Jews are the devil's accountants!
Say, anyone know Cynthia McKinney's number? I would be a lot less cranky if I got a blowjob now and then.
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I'll blow you, Minister Farrakhan!
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Next Sunday on Meet The Press we ask the President of the NAACP if the organization has long passed its relevancy and do they regret their pathetic ploy to smear the Tea Party Movement.
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Yes, those Republican presidents of the 90s and 10s.
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"And that means digging into entitlements, particularly Medicare, Medicaid and Social Security."
Sure, but why no mention of defense spending? Or prison spending? Or the War on Drugs?
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Do you liberals truly believe that ONLY Republicans are to blame? Honestly, both major parties are knee deep in the metaphorical bullshit.
I fear that everyone is already forgetting the PI(I)GS of Europe. Massive tax revenue, massive spending, massive entitlements, and massive regulation absolutely did not work.
We've been attempting to decrease poverty using these tactics since the 1960's, and there has been no meaningful trend in that direction.
You can have coerced income equality or economic growth. You simply cannot have both.
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Yes, the old egalitarian argument SOUNDS pretty, but it's more Utopian than anything Team Red/Team Blue accuses libertarians of wanting.
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No way dude now thats what I am talking about.
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MNG, Tony and Chad. You did such great work on my half earlier today. Now get on your knees and help yourself to six heaping fist fulls of my cock!
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The commentariat ascend to new heights of creativity. Cock-sucking jokes aren't just for high school any more.
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You know what, government isn't so bad. Some parts of our system are broken, some aren't... that doesn't mean we should erase the system.
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Who here is seriously talking about "erasing the system"?
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*raises hand*
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I'd go with a massive overhaul, with at least a fifty-percent reduction right off the top... but not shitcanning the entire system.
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What did the private sector spend its money on? Oil to power our SUVs as they hauled cheap Chinese shit from WalMart to our McMansion. Borrowing money to pay for crap like this is an outright sin.
Standard limousine liberal blather: "People are SO STUPID; they want things they shouldn't want. I must control their choices, because only I can properly judge what's good for them."
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I think that is true-for men;-)
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Spend all you want... we'll make more.
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Let's get married
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This graph pegs things to GDP. During recessions, GDP goes down and at the same time many government programs find greater demands placed on them (e.g., unemployment, food stamps, etc.). In terms of the airtightness of the argument, ignoring this causal structure makes the situation seem far more simple than it really is.
In the current debate to talk only of short term spending cuts without also discussing taxes and their potential to reduce the deficit over the long run is 12 year-old thinking. Reducing long-term spending trends can and should be discussed at the same time we discuss short-term needs. There is no inherent logical/economic problem with the approach. The political problem is not getting congress to think about the right-now...it is getting them to have real discussions about real solutions to the long-term problem. Indeed, the long-term problem is congress's tendency to think short term. The current republican "cut-spending-and-taxes" approach is aimed a short-term political gain without considering the dynamic between short-term and long-term planning.
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In addition, this graph ignores the years that we had zero deficits or surpluses...Those years did not result, primarily from spending cuts, but from a combination of tax increases and spending cuts. Any long-term solution would likely mirror those approaches to some degree.
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Revenue increases brought about the 90s surpluses, not tax increases.
When the economy is booming, you don't need to raise taxes to increase revenue. Unfortunately, an economic boom is a hard thing to legislate.
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Indeed, the economic boom played an important role in the Clinton years surplus. Revenue was not hurt by the fact that the income generated by that boom was taxed at a higher rate, however. To ignore that difference in the tax rate to argue that the boom was solely responsible seems a bit disingenuous.
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Arguing for raising tax rates to 90s levels without arguing for cutting spending to 90s levels is even more disingenuous. But that's what I expect from the Santa Fe Sophist.
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I did not argue for raising taxes without cutting spending. How do you get that from what I wrote? Amazing.
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For Tulpa: from my post just above...
...a combination of tax increases and spending cuts. Any long-term solution would likely mirror those approaches to some degree.
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I would primarily advocate reform to the budget process such that Congress-critters were required to return to pay-go with some mechanism to leverage longer-term planning of the budget...
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And, of course, pay-go should be real pay-go, not the current anemic version.
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I think it pretty much speaks for itself
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You mention 3 entitlements that need to be cut, namely "Medicare, Medicaid and Social Security." Let's look at them. Social Security has a trust fund that contains enough money to pay the beneficiaries in full till some time in the 2040's, which is as far in the future as it's reasonable to look. The fund was built up from the surplus of Social Security taxes over the amount that had to the beneficiaries. This surplus was used to reduce the taxes paid by the richest taxpayers, while the money was paid mostly by ordinary taxpayers. (Currently only income up to $106,800 is taxed.)
Now the bill is due, and it has to be paid by somebody; to do otherwise is national bankruptcy. Who should pay it? Surely not the people who created the surplus in the fund, by reducing their benefits. The fairest place to get the money is from the people who benefited when the fund had a surplus. It's not possible to tax those very people, but it is reasonable to tax the same kind of people, namely those earning the highest incomes.
Medicare and medicaid are both aspects of health care. Something is plainly wrong with our health care system. The U.S. pays about $4,271 per capita per year, Canada pays about $1,939 (2002 figures). U.S. life expectancy is about 78.14 years; Canadian is about 81.16 years. It's not reasonable to expect changing from the U.S. system to the Canadian system to give the U.S. the Canadian life expectancy because of Canada's superior life style and climate, but it might help a little. If the U.S. could adopt the Canadian health system (Medicare for all), it could reduce U.S. spending on health care by about
(4,271-1,939)*304,000,000 = 708,900,000,000
about $700 billion per year, which could be used to reduce the U.S. Government deficit a little. -
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