MENU

Reason.com

Free Minds & Free Markets

GOP's 'Tax Reform 2.0' Will Make It Harder to Balance the Budget

Plan would extend last year's tax cuts past 2025, but spending cuts are still missing.

Joshua Roberts/REUTERS/NewscomJoshua Roberts/REUTERS/NewscomWithout a serious plan to cut spending, extending last year's tax cuts beyond their scheduled expiration in 2025 will require that America enjoys an historically unprecendented—and completely unrealistic—period of growth to balance the budget.

Yet that is exactly the bet that formerly fiscally conservative Republicans appear to be making, as they unveiled a package of bills Monday collectively known as "Tax Reform 2.0" The centerpiece of the proposal is a bill jointly sponsored by all the Republicans on the House Ways and Means Committee that would make permanent the lower individual and corporate tax rates approved in December but set to expire after 2025—something that Republicans planned to do even before last year's tax reform passage. Committee chairman Kevin Brady (R-Texas) says the package could be ready for a committee vote before the end of the week and a full House vote by the end of the month.

Extending the tax cuts, Republicans hope, is a way to extend the economic growth stoked by last year's efforts. It's also a political ploy to bolster the GOP in the coming midterms. But the package seems to completely ignore concerns about the growing federal deficit—which will hit $1 trillion next year—or the long-term consequences that tax cuts, without spending cuts, are having on the national debt.

This is not exactly new. Republicans waved off concerns about how Tax Reform 1.0 would impact the deficit by promising that greater economic growth would fill the gap created by the tax bill—despite the fact that not a single projection, including the administration's own, showed that was possible. Similarly, GOP leaders ignored the debt and deficit in agreeing earlier this year to a two-year budget plan that hiked both domestic and military spending. Cutting taxes and increasing spending is exactly the wrong way to go about balancing a budget.

Can economic growth alone do the trick? It seems to be the only hope. With current spending and tax policies in place (meaning that the tax cuts enacted last year would expire, as planned), America would need 4.8 percent average growth over the next decade to balance the budget, according to the Committee for a Responsible Federal Budget's analysis of numbers provided by the Congressional Budget Office.

While President Donald Trump is rightfully ecstatic to be presiding over an economy growing at better than 4 percent in recent quarters, it's beyond improbable to think that 5 percent growth for an entire decade is possible. We've already enjoyed a nearly unprecedented run of growth since the end of the Great Recession and another downturn is surely due eventually. Even if 4.8 percent growth were possible for the next 10 years, that would merely balance the budget and would do nothing to address the $21 trillion national debt.

Using a more realistic expectation of economic growth, the Congressional Budget Office's "alternative fiscal scenario" (where the tax cuts and spending deal become permanent) envisions America facing a $2.1 trillion deficit by 2028. Closing that gap, the CRFB says, would require average growth of 5.9 percent for the next decade.

It is therefore unreasonable to believe that economic growth alone will close the federal deficit. Against that backdrop, the Tax Reform 2.0 plan appears to be an irresponsible plan that will only add to the bill future Americans must pay.

That doesn't mean the package is all bad, of course. A proposal to created so-called universal savings accounts should be taken seriously by Congress. If passed, the bill would allow Americans to create tax-advantaged savings accounts where they could stash up to $5,000 annually without having to deal with all the restrictions and limitations that come with similarly structured 401(k) and IRA plans now. Encouraging savings—espescially savings that are partially sheltered from the tax man—would be a positive step that helps families plan for the future.

Congress should apply that same lesson to its own budgeting. When times are good, it makes sense to save for the future and pay off debts. Instead, during the current run of economic growth, the debt and deficit are nearing all-time highs.

Tax Reform 2.0 repeats the worst errors the current Republican Congress has made. It mistakes tax cuts for fiscal responsibility and substitutes pie-in-the-sky economics for what's really needed: a sober reckoning with America's worsening budgetary situation.

Photo Credit: Joshua Roberts/REUTERS/Newscom

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

  • Brian||

    That's ok: I hear that balanced budgets are for conservative losers, so pay it no attention.

  • ||

    When times are good, it makes sense to save for the future and pay off debts.

    Fucking conservatives.

  • wreckinball||

    Its a spending problem. So its a liberal problem.

  • Sarah Palin's Buttplug||

    The Bushpigs and the Dotard are spending like drunken sailors (McCain). Of course a partisan dumbfuck such as yourself won't acknowledge that fact.

  • wreckinball||

    So spending reductions are liberal thing. Plug you take dumb to a new level.

  • Sarah Palin's Buttplug||

    There has been one significant spending cut this century - the Budget Control Act of 2011 which was bipartisan and led by Obama and Boehner.

    And yet your precious GOP cannot muster the courage to cut a dime with full control of Congress/White House.

    Fuck you dumbshit partisan motherfucker Trumptards. You lie like he does.

  • ||

    There has been one significant spending cut this century - the Budget Control Act of 2011

    This is only true if you define 'this century' as the 100 yrs. starting in 2000-2001. Otherwise, since 1918, there have been massive budget cuts larger than Clinton/Boehner's cut. The end of The Great Depression and the drawdown after WWI and WWII being notably larger.

    If you cache it as non-emergency or non-military/discretionary spending cut you *might* get to the last century. But, arguably, there isn't a century of discretionary spending as is currently understood, to compare.

  • ||

    Clinton/Boehner's cut

    Sorry, Obama/Boehner's cut.

  • Cathy L||

    This is only true if you define 'this century' as the 100 yrs. starting in 2000-2001.

    Yeah. Like everyone does. Because that's the century we are currently in.

  • ||

    Like everyone does. Because that's the century we are currently in.

    I pity the people who have to care for you.

  • chipper me timbers||

    "There has been one significant spending cut this century - the Budget Control Act of 2011 which was bipartisan and led by Obama and Boehner."

    If you think that was significant. oh boy

  • loveconstitution1789||

    Its Buttplugger 2.0

  • Horny Lizard||

    His powers have grown.

  • Fuck you, Shikha (Nunya)||

    So bigger plug. Are the huge beads next?

  • loveconstitution1789||

    Starve the beast is a good option too.

  • sharmota4zeb||

    Yep, that was Reagan's strategy. It got people thinking that they are entitled to keep their own money, thereby laying the groundwork for the Republican takeover of Congress in the 1990's.

  • chipper me timbers||

    Worked in California

    https://en.wikipedia.org/wiki/2008
    –12_California_budget_crisis

    "On July 24, 2009, the state government passed a budget that included $15 billion in service cuts"

    "On July 1, 2009, Schwarzenegger ordered state workers to take a third furlough day each month"

    "In December 2008, Schwarzenegger ordered mandatory furloughs of two days per month for state employees, as well as "layoffs, reductions and other efficiencies" to achieve savings in the General Fund of up to 10%.[7][8]"

    Not only does "starve the beast" work, it's the ONLY thing that has ever worked to reduce govt spending.

  • Lester224||

    Starve the beast is only a good option if you actually cut spending. GOP has no intention to do so. It just blew up military spending for absolutely no reason.

  • Fuck you, Shikha (Nunya)||

    Sadly true

  • kc75081||

    yes, and now they are looking for a reason. the need for some enemy for political purposes provides a push for the anti-Russia anti-china movement. its remarkable that 1%ers with substantial portfolios of military contractor stocks and trump derangement syndrome left wingers can find common ground here

  • MoreFreedom||

    Exactly, and that libertarian point of view is entirely missing from Boehm's article. Besides, since when do either the Dems or Repubs want to balance the budget? And let's not justify the standard RINO lying rhetoric of promising to do that, then voting otherwise.

    It's easy to balance the budget, provided we elect legislators who choose to limit government and reduce spending. Consider, the RINOs can't even bring themselves to defund Planned Parenthood and get people to pay for their own abortions; thus forcing those who believe abortion is murder to help pay for it (and I'm personally pro-choice). Seems most all of them are in a cabal to always increase spending, and never cut anything out of fear their own personal boondoggles get defunded. Heck from 1776 thru about 1901, federal government spending amounted to less than 3% of GDP while today it's more like 20%. That's money out of our pockets into the pockets of the political class.

  • loveconstitution1789||

    RINOs in Congress feel that they cannot cut entitlements since Reason and every Lefty out there screams at the top of their lungs.

  • loveconstitution1789||

    Democrats are really in trouble now.

    Tax cut 1.0 was really popular and helped get the unemployed employed. They will remember that come election 2018.

    Even more so with another tax cut.

  • Sarah Palin's Buttplug||

    UE has barely budged, you moron.

    The corporate tax cut polls poorly today.

  • sharmota4zeb||

    The restaurants and other small businesses in my town have "help wanted" signs in the windows. I don't have national figures, and this is only anecdotal evidence, but people in my area on the lowest rung of the economic ladder can get a minimum wage job even if they've been unemployed for years thanks to jail time or trips to the psych ward ... but enough about my social life.

  • Rev. Arthur L. Kirkland||

    The restaurants in my community have "help wanted" signs out, too, sometimes offering a $12 wage . . . because the young people can make more money hectoring their parents for cash than they could earn washing dishes. Some of those signs have been posted for five years. I do not perceive those signs to be evidence of recent economic improvement.

  • Fuck you, Shikha (Nunya)||

    Blame the parents. You finally got blame correct.

  • loveconstitution1789||

    New sock is here.

  • wreckinball||

    The plug is into the "new math"

  • Sarah Palin's Buttplug||

    A RealClearPolitics average of polls from April to June had opposition to the tax law at 43 percent and approval at 36 percent.

    The Dotard's only legislative accomplishment is about as unpopular as the ACA was three years ago.

  • loveconstitution1789||

    MAGA

  • wreckinball||

    Wow, so this is rally astonishing. You mean few Pols REALLY want to cut spending? Well better half right than not right at all.

  • wreckinball||

    And the "Butt Plug's": comment reinforces that we really need remedial math education in this country,

  • Rev. Arthur L. Kirkland||

    Have you forgotten which side's leader loves the poorly educated and has built a base of half-educated yahoos?

  • FusterCluck||

    That would be your team, hicklib.

  • Ellis Wyatt||

    He's not a Trumptard. So you must be a half-educated yahoo!

  • wreckinball||

    An idea.

    Step 1: Go through all federal $$'s we spend and map them to a constitutionally defined duty of the federal gov't in the constitution.

    Those that don't map have to be justified.

    Step 2: Repeal 16A, return funding of the feds to the state legislatures based on population.

    There is no easy solution.

  • Sarah Palin's Buttplug||

    Only 25 percent of voters said they had noticed an increase in their paychecks as a result of the law, while 52 percent said they hadn't. In the April poll, 22 percent said they had seen an increase and 55 percent said they hadn't.

    (Politico)

    The Dotard's tax cut was too puny for most workers to notice.

    And of course "deficits don't matter" to the GOP. Reagan proved it. Dickless Cheney said so.

  • Fuck you, Shikha (Nunya)||

    But Tip O'Neill was totally a responsible frugaltarian.

  • VinniUSMC||

    The people complaining about increased tariffs being a tax on businesses (and people), are complaining about businesses (and people) paying less taxes. It's almost like it's not about the taxes.

    TDS...

  • sharmota4zeb||

    The corporate tax and income tax paid is proportional to how much value you or your company creates as measured in income or profits. The tariff paid is proportional to how much you spend on imported stuff. Government handouts have to come from some sort of tax. The progressive position reveals how they plan to get money into their bank accounts and spend it.

  • Longtobefree||

    Budget? What budget?

  • lap83||

    Increasing taxes is not an alternative to cutting spending. That just encourages them

  • ShotgunJimbo||

    Agreed, it's like giving a teenager an increased line of credit after they max out the card over and over. More taxes will never be the answer

  • Hamster of Doom||

    This. They'll never reduce the flow of the gravy train, there's nothing in it for politicians. Cut taxes and let the chips fall where they may. Politicians need to learn budgeting, the hard way if no other way presents itself.

  • John||

    If ending the drug war somehow made it harder to balance the budget, would reason be against that? Lower taxes is more freedom. "Making it harder to balance the budget" just means they have to cut more spending, which is a good thing anyway.

    Think about what reason is saying here. They are saying that the government should not take less of our money because doing so will mean they have to cut spending more. That is not how small government is supposed to work.

  • Leo Kovalensky II||

    That's not technically what Eric is saying. He's saying that government should not take less of our money now because doing so will mean they'll have to take more of our money in the future. That is how deficit spending works.

    While cutting taxes is preferable, it's irresponsible if it leads to more deficits. Sure small government is about less taxes, but it's also about less services. Basically, cut spending.

  • Social Justice is neither||

    Given that the D side will never cut spending (or let's face it increases in the rate of spending) what you're effectively saying is we should raise taxes now AND raise taxes in the future because to not increase taxes and spending is irresponsible. If not enabling the tax junkies in DC is wrong then I don't want to be right.

  • John||

    That's not technically what Eric is saying. He's saying that government should not take less of our money now because doing so will mean they'll have to take more of our money in the future. That is how deficit spending works.

    And that is to be frank completely retarded. That statement rests on the assumption that collecting more money now will result in a lower deficit and not Congress just spending more than it already is. And that assumption is completely counter to reality. They are going to spend every dime they get. So giving them more isn't going to lower the deficit. If Congress were capable of not spening money, we wouldn't have a deficit problem in the first place.

    I don't understand people's compulsion to defend the writers at reason. This is a stupid article. Why is that so hard to admit?

  • Leo Kovalensky II||

    That statement rests on the assumption that collecting more money now will result in a lower deficit and not Congress just spending more than it already is. And that assumption is completely counter to reality. They are going to spend every dime they get.

    Correction: they are going to spend MORE money than every dime that they get.

    Listen, I think that cutting taxes is preferable. But the Republicans went on to raise spending immediately after cutting taxes. That's completely ridiculous. If they had any principles, they would cut spending. They have the power to do so without any help from Democrats.

  • John||

    Congress will forever raise spending. So raising taxes does no good. It won't fix the deficit problem. The deficit will be fixed when Congress decides it has to live within its means. And that decision, if it ever happens, will happen independently of whatever the tax rates are. So set the tax rates as low as politically possible. Doing that isn't going to raise the deficit or make it any more or less likely for Congress to finally decide to live within its means. It won't do anything about the deficit but it will get the economy going and let people keep more of their own money.

  • sharmota4zeb||

    Good point. We need to pressure Republicans to cut spending by hammering them with it in Libertarian campaigns. NJ's Senate race has a Libertarian running against candidates from the Republican and Democratic parties with practically identical policies.

  • Sarah Palin's Buttplug||

    Given that the D side will never cut spending

    Another partisan dumbfuck Trumptard pipes in.

    When has your precious GOP cut spending? With FULL control of Congress/White House twice (Bush and then the Dotard).

    Obama supported spending cuts and pushed for Simpson-Bowles which cut spending and balanced the budget (which both parties shit on in Congress).

  • John||

    Hey dumbfuck, who said the GOP cut spending? Sure they won't. And that is why raising taxes is stupid. They are just going to spend it no matter what.

    Go fuck yourself and support robbing people somewhere else.

  • Cyronic||

    Whataboutism. It can be simultaneously true that the Republicans are fiscal hypocrites with a bad record of cutting spending AND that Democrats will never, ever cut spending because they are drunk on cheap debt and welfare votes. SJiN's comment still stands.

  • NotAnotherSkippy||

    Still lying about simpson bowles. Barry rejected it, and he rejected thr hoise budgets which WOULD have balanced and cut spending. None of his budgets ever did that.

  • BYODB||

    Obama wanted to cut spending so badly he expanded spending by orders of magnitude forevermore.

    Make sense yet?

    It's right up there with Bush wanted peace so badly he blew up the middle east.

  • Leo Kovalensky II||

    Given that the D side will never cut spending

    Neither side will ever cut spending. That's the point.

  • Cathy L||

    "Making it harder to balance the budget" just means they have to cut more spending, which is a good thing anyway.

    Lol

    Except they literally will not cut spending and nothing will mean they "have" to do so.

  • John||

    If they literally will not cut spending, then they are going to spend any extra money they collect in taxes anyway. Only someone as dumb as you Cathy could not understand that and think collecting more money is going to solve or even alleviate a problem that is the result of Congress spending every dime it gets.

  • sharmota4zeb||

    It's like the lady who keeps divorcing her husband and then getting back together with him, because she assumes that everyone will give her time and money to rebuild each time. After a certain point, you need to learn that people won't give all the resources you want forever. Then you make difficult choices about what you want to accomplish each year with a limited budget.

  • I can't even||

    He's also completely ignoring the impact on the economy of a massive tax increase in 2025.

    I bet 2 years ago he would have said 4% GDP growth was completely unrealistic.

  • John||

    There is also that. But, how dare you mention incentives or think that letting people keep more of what they earn will cause them to work harder. that is just crazy talk.

  • sharmota4zeb||

    This can have the biggest effect on the lowest end of the economic spectrum. Most people don't like to live off welfare, but when they look at their take home pay and rent, a few dollars more can mean that they keeping trying to support themselves while a few dollars less could mean they want to give up and focus on recuperating the injuries that accumulate from low income work and substandard living conditions.

  • I can't even||

    Hell, if you can get 4% growth for a while and immigration isn't a flood, base wages will start to rise due to labor competition.

  • BYODB||

    Also, for what it's worth the welfare cliff is real so earning a few more dollars is the difference between receiving a lot of money from the government or getting nothing at all. The incentive is almost always to stay below that mark.

  • The Last American Hero||

    -1 New Normal.

    Ooops.

  • chipper me timbers||

    "If ending the drug war somehow made it harder to balance the budget, would reason be against that? Lower taxes is more freedom"

    This is a really good point John

  • The Last American Hero||

    What's so hard to understand about Pot, Mexicans, and Ass Sex?

    I don't see balanced budget anywhere in the Three Tenets of Reason.

  • wreckinball||

    Tax cut 1 primarily solved the problem of corporate tax rates being non-competitive. So the individual cuts were not as significant.

    The plug and I guess a whole lot of other dumb fucks can't seem to understand that the only way you get a raise is if your boss gets a raise. Unless of course you are a welfare sponge or a government worker. Then nothing matters. You always get a raise.

    Now regarding the spending problem. Start with the Ron Paul plan on cutting government federal agencies.

    Eric take notes. This is what an actual libertarian would suggest.

  • The Last American Hero||

    Tax revenues are up about 1 percent over prior year, in spite of the cuts. This would suggest a spending problem.

  • Kenneth Kelly||

    1 percent is less than inflation.

  • Ellis Wyatt||

    And it's both.
    At least LAH admits how badly Trump's spending had crippled us.

  • Brett Bellmore||

    Objection: Balancing the budget is already politically impossible. Anybody who credibly tries to do it will end up in the private sector, outbid for votes by somebody willing to borrow to buy them.

    Degrees of impossibility are irrelevant, we won't be balancing the budget until the crash makes it impossible to borrow.

  • John||

    Since Congress is going to spend every dollar it can collect in taxes or borrow no matter what, balancing the budget is equally hard if not impossible no matter what the tax rate. Raising taxes only reduces the deficit if you assume Congress won't just spend the extra money it receives. And only someone working at Reason could be dumb enough to believe that.

  • lap83||

    "Raising taxes only reduces the deficit if you assume Congress won't just spend the extra money it receives."

    and even if they did, why should we let them decide how much we gjve them? I know it's a crazy notion, but maybe we should stick with the tax rate that's better for the economy and then Congress has to work with whatever that is. None of that waiting for them to say "when"

  • sharmota4zeb||

    New Jersey leaders are proud of sanctuary policies that prevent the feds from catching and deporting illegal immigrants. I favor law enforcement in general, but I'm curious to see the reaction if the LP ran state level candidates who wanted to make NJ a sanctuary state for federal tax evaders. We could get plenty of NYC corporations to move across the Hudson River to NJ.

  • Ellis Wyatt||

    and even if they did, why should we let them decide how much we gjve them?

    Constitution.
    Even Ayn Rand ridiculed your crazy notions

  • The Last American Hero||

    Also note that Federal Revenue as a % of GDP has been very stable since the Eisenhower Administration. Periods of War, Peace, Recession, Boom, Bust, HIGH PERSONAL RATES, more moderate personal rates.

    The issue is spending.

  • Ellis Wyatt||

    The issue is spending.

    Exposing Trump's biggest lie.
    Of so many,

  • sharmota4zeb||

    We won't be balancing the budget until a majority of Americans want the budget balanced and want it bad enough to argue for balanced budgets on the local level at town hall meetings.

  • Ellis Wyatt||

    Nobody's proposed how to do that, except crazy wackos named Paul.
    "Repeal the income tax. Replace it with nothing. Run the entire government on FICA revenues."
    Oh wait, he never said the FICA part, or even his cult of bobbleheads would have puked.

  • ShotgunJimbo||

    If only we could just act like adults and do what every household has to face. Make more money (cut taxes) and stop spending so much fucking money (cut the entitlements, cut down on the military waste). But we have elected children in congress who have no principles or basic financial savvy.

  • wreckinball||

    16A and the ability to print money breeds irresponsibility. But it is a SPENDING problem.

  • The Last American Hero||

    and to spend is to tax, no matter what Team Red likes to say.

  • Weigel's Cock Ring||

    Yes, the out of control spending is a massive issue, but you cut taxes because taxation is theft.

    Of course, a left liberal Obama momma pretending to be a libertarian like Boehm isn't even capable of understanding this, much less believing it.

  • Ellis Wyatt||

    Yes, the out of control spending is a massive issue, but you cut taxes because taxation is theft.

    Right-wing wacko DEMANDS HIGHER DEFICITS ... so Trump delivers!
    (Even Ayn Rand said that was crazy as fuck)

    Left - Right = Zero

    Democrats borrow trillions to provide free stuff.
    Republicans and faux libertarians borrow trillions to provide free tax cuts.
    Both supported by goobers, now less than 40% of voters combined. And shrinking.

    Your time has expired.
    Go away.

  • sarcasmic||

    They don't even have to cut spending. Just cut the rate of increase.

  • Dillinger||

    fuck you cut the rate of increase?

  • Chipper Morning Baculum||

    Haha, perfect. "Fuck you, cut the rate of increase in spending" is the new motto.

  • Cyronic||

    Technically, sure. If the rate of economic growth hovers around 3% and the rate of government spending increases at only 1%, in theory the economic growth would eventually catch up. But the odds of both of those working out that way over a couple decades (or several) seems low. Cutting spending would be far faster, but political suicide.

  • The Last American Hero||

    Over the long term, 3% per year isn't that outlandish (Obama administration aside).

  • NotAnotherSkippy||

    Which means cuts to entitlements. You can't slow growth your way out of this.

  • loveconstitution1789||

    This will force more members of Congress to cut spending, since they cannot borrow indefinitely.

    Either that or they will have to pass tax increases which are hugely unpopular.

  • Juice||

    This will force more members of Congress to cut spending

    LOL

  • Dillinger||

    one is more.

  • John||

    If Congress will never cut spending, then what reason is there to believe they won't just spend any extra tax money that they get? There isn't.

  • Cyronic||

    You're not necessarily wrong, but it's a bit infuriating when the argument comes down to "We have to push them all the way to the edge of the cliff so that they'll finally walk away from it!"

  • John||

    That is not the argument. The argument is as Lap83 puts it above that we set the tax rates for what is best for us and the country as a whole. It is congress' job to figure out how to spend that money. They don't get to extort more money from us because they have a spending problem. Taxes and spending are two different things.

  • sharmota4zeb||

    Yep, if you don't draw a line in the sand, Congress starts acting like that middle child who gets a $100,000 loan from the bank of mom and dad to make his documentary that never brought in a dime and consisted of vacation video of hanging out with a British band ... but enough about the people I know.

  • blondrealist||

    Why can't they borrow indefinitely? The federal government has been in debt through out its entire history, except for a brief time under president Andrew Jackson, when the federal government achieved a true surplus (and the country plunged in to a deep economic depression 2 years later).

  • Sarah Palin's Buttplug||

    Interest on the debt will eventually crowd out entitlement and defense spending.

    Then chaos.

  • blondrealist||

    Yes -that is a concern I share. Harmful inflation -meaning harmful to our living standards, is the risk (in my opinion). Having said that, there's nothing saying the Treasury can't keep interest payments lower by issuing short term paper. As to debt-to-GDP ratios, I think it's interesting to note that Japan's ratios have been much, much higher than the USA for a long time - and the widely predicted hyperinflation in Japan hasn't occurred.

  • Ellis Wyatt||

    Evasion

  • loveconstitution1789||

    I stopped investing in US treasuries. If more people do, less and less people are loaning the USA money.

    Americans wont tolerate runaway inflation. Even Lefties know that which is why America's debt is backed by loans not simply printing more money.

    Venezuela has run away inflation. When you need a wheel barrel full of cash to buy bread, you're in trouble.

  • Ellis Wyatt||

    Thanks for describing exactly why Trump is a rapidly escalating threat to us all!
    That and HBS, Hillary Derangement Syndrome.

  • sharmota4zeb||

    Why can't we simply cancel the debt? If a company's business model was taking money from some people under the threat of force and giving it to others in exchange for permission to use force, and it hadn't balanced it's budget in about 200 years, libertarians would have little sympathy for investors who loose their investments when the company defaults on its company bonds.

  • loveconstitution1789||

    Only certain debt could be canceled. War with China would allow the USA to cancel all debt with them.

    If you cancel all debt, people will stop buying US treasury notes to "loan" the US government money. Its pretty much stealing money since the people who bought US debt are legally entitled to the debt plus interest.

  • Ellis Wyatt||

    Especially when Trump is already the worst President on debt since forever.

  • Ellis Wyatt||

    Trumptard blames CONGRESS!

    U.S. expects to hit $1 trillion deficit earlier than planned

    The U.S. deficit grew by $222 billion from this time last year — reaching a total of $895 billion, according to the nonpartisan Congressional Budget Office.

    Why it matters: This increase was due mostly to the new Republican tax law and Congress' routine decision to increase spending, which grew by 7% compared to revenue growth of only 1%. The CBO now says the deficit will approach $1 trillion by the end of this fiscal year, but in April the agency didn't expect the deficit to reach $1 trillion until 2020.

    Don't forget, Trump campaigned on paying off the entire debt in 8 years! From his tariffs!
    Breitbart Do the math.

    Tariff revenues of (19/8=) $2.4T per year ... vs Revenues of $3.3T per year!

    Tariffs are paid by consumers. So Trump PROMISED to increase consumer prices by the equivalent of a 73% tax increase! ... which says all you need to know about the "mental capacity" of Trumptards. (smirk)

    Do the math: $895 deficit, 10 months FY = $89.5 billion per month
    2 months at $89.5 = 179B + 895B = $1.074T.

    Duh

  • Dillinger||

    i appreciate you getting through several paragraphs w/o an actually.

  • blondrealist||

    The smart people at Reason still don't understand the operational realities of our fiat currency system, so there's no explanation of why or how balancing the federal budget would be good. I'm not suggesting the federal debt does not matter, but Reason clings to the context of currency users (individuals, businesses, states) versus currency issuers (the federal government).

  • Sarah Palin's Buttplug||

    fiat currency system

    A term always followed by loads of bullshit.

    Go buy some shitcoin.

  • sharmota4zeb||

    Fiat currency is like a wall hanging or a PhD. The value is rather subjective.

  • The Last American Hero||

    The value of all currency is rather subjective, be it Bitcoin, US Dollars, boxes of laundry detergent, or Seashells.

  • blondrealist||

    "Fiat currency system" is what we have in the USA. The term can be followed by bullshit - or, an thoughtful discussion of the operational realities of such a system using the proper contexts.

  • Ellis Wyatt||

    Fiat currency, like the gold standard FAILED to provide stable prices.
    Fiat = non-stop inflation. Gold = non-stop DEflation, which forced wages down, thus helping Marx sell his exploitation of the working class. So gold legitimized Marxism

    Economics 101: According to the Law of Supply and Demand, stable prices REQUIRE Supply and Demand to remain in balance. (For the uneducated, that means ALL prices, including the price of money)

    Milton Friedman knew how to achieve that. Do you?

  • blondrealist||

    Yes, Friedman said "inflation is always and everywhere a monetary phenomenon" - and he believed that as long as central banks get the money supply right, there will be no inflation.

    History has repeatedly shown that isn't quite right. I love Friedman's Libertarian views for the most part, but his monetarist theories, while still influential, have not all held up very well.

  • Ellis Wyatt||

    Yes, Friedman said "inflation is always and everywhere a monetary phenomenon" - and he believed that as long as central banks get the money supply right, there will be no inflation.

    Sneaky bastard lies about what Frieidman said, thus making a total fol of yourself.

    For any other fucking liars (or the uneducated), Friedman said the money supply should be increased at the same rate at the demand for money. That's alway an estimate, thus adjust to actual as reality occurs. Thus, the price of money -- determined by the Law of Supply and Demand would be stable. double-fucking-duh.

    History has repeatedly shown that isn't quite right.

    History has shown the law of Supply, and Demand "isn't quite right!"
    Thank you for confirming the innate dishonesty (or stupidity) of gold nuts. (deep bow)

  • Ellis Wyatt||

    P.S. And windbags,

  • blondrealist||

    History has shown that Friedman's monetarist theories have not been quite right. I never suggested the simple law of supply and demand wasn't valid. Having said that, Friedman's view that the central bank could carefully control the money supply doesn't fit well in an endogenous fiat money system. The banking sector creates much of the money in our system, not the Fed.

    I would wager that Friedman's opinion on QE would have been wrong too. The Fed's massive asset swap - which is really what QE was - put huge amounts of money in bank reserves. It didn't improve liquidity and didn't stimulate lending, because banks don't lend reserves (except to other banks).

  • Ellis Wyatt||

    Call out a liar ... more lies! But NOW reveals his CORE ignorance on money.

    History has shown that Friedman's monetarist theories have not been quite right.

    STILL says the Law of Supply and Demand isn't quite right!

    I never suggested the simple law of supply and demand wasn't valid.

    SAME LIE about Friedman, now supported with gobbledegook!

    Having said that, Friedman's view that the central bank could carefully control the money supply doesn't fit well in an endogenous fiat money system.

    NOT IF SUPPLY AND DEMAND ARE KEPT IN BALANCE!
    It's called the Law of supply and Demand! And you denied it AGAIN

    The banking sector creates much of the money in our system, not the Fed.

    ALSO TRUE IN THE GOLD STANDARD!
    THAT is the ignorance that allows you to be BRAINWASHED by greater fools.

  • blondrealist||

    Whether you believe it or not, we have an endogenous fiat monetary system - which is certainly impacted by supply and demand - but the Fed cannot precisely control either the supply or demand for money. Here's an article you might find interesting:

    www.pragcap.com/the-myth-of-th.....tral-bank/

  • Ellis Wyatt||

    Now you've forgotten you own issue.
    ONE MORE TIME #4

    The Law of Supply and Demand states that prices move -- up or down -- to keep Supply and Demand in balance. If Supply is greater than Demand, then prices fall. Ummm, there is more demand at cheaper prices, The prices fall until Supply and Demand are equal.

    If Demand is greater than Supply, prices rise, There is less demand. Demand shrinks until Supply and Demand are equal,

    You say both are impossible! Equilibrium cannot exist in your private universe.
    Because prices CANNOT be stable, in your own private universe

    Thus, no offense, this issue is beyond your comprehension,
    I tried.

  • blondrealist||

    I get the basic supply/demand bit - but you don't seem to understand how our monetary system works - at least as how much (or how little) direct control the Federal Reserve has over controlling the money supply.

  • David Nolan||

    The Fed (if them) need not "control;" the money supply, merely know what it is.
    Banks created most of the money under the gold standard and there was no inflation, there was DEflation except for wars (Civil and 1812) where government pumped up the money supply.

  • blondrealist||

    Friedman's monetarist theories have not all held up- I didn't say the law of supply and demand "isn't quite right".

    Not sure why you mentioned "gold nuts". I have never suggested returning to the gold standard.

  • Ellis Wyatt||

    didn't say the law of supply and demand "isn't quite right".

    MORE mind games?

    I'm done with you..

  • David Nolan||

    Friedman's monetarist theories have not all held up- I didn't say the law of supply and demand "isn't quite right

    You did it here!. Friedman's theory, relevant to this entire thread, are ENTIRELY applied Supply and Demand.-- which you say have not held up - when they've never been tested.

    You also said NOT ALL Friedman's theories have held up, which is simply dishonest of you, because only one theory has been discussed in this thread.

    You also said

    History has repeatedly shown that isn't quite right

    There is no history to judge. And you're talking about Supply and Demand being not "quite right."

    Does history say that cars fueled by oxygen haven't been quite right?

  • blondrealist||

    Friedman's writings cover a lot of ground - I am specifically pointing to his monetarist theories about the power of central banks over the money supply.

  • Ellis Wyatt||

    YOU GOT HIM NOLAN! Now he ADMITS changing the topic that HE attacked you with ... and you crushed him on!

    He (or she) is a blond joke.

  • blondrealist||

    Changing the topic? I brought up Friedman's monetarist theories as they relate to the Fed's ability to control the money supply - and I mentioned that from the onset. You keep mentioning simple supply/demand stuff and gold - which I never mentioned. Open your mind a little and read some the articles available here:

    https://www.pragcap.com/?s=milton+friedman

  • Ellis Wyatt||

    YOU GOT HIM NOLAN!

    Now he changes the subject a second time, in apparent desperation. He (or she) is a blond joke,

  • Ellis Wyatt||

    Open your mind a little and read some the articles available here:

    "Inflation is NOT a monetary phenomenon"
    WORSE than a blond joke???

  • ||

    blondrealist doesn't realize that the distinction between currency users and currency issuers being proles vs. fiat or proles vs. anonymous person/DAO.

    If you don't understand why balancing the federal budget is a good idea, which you do because you yourself say you're suggesting that it matters, then whether the money is held by a knowing fiat or DAO is immaterial. The topic of a different article at least.

  • ||

    That is: the distinction between currency users and currency issuers being proles vs. fiat or proles vs. anonymous person/DAO doesn't matter.

  • Ellis Wyatt||

    None of that has anything to do with the price of money, which, like all prices, requires Supply and Demand to remain in balance.

    Any questions?

  • blondrealist||

    By "proles", I assume that's short for proletarian - a term for the working class. Not sure what that has to do with the operation of our monetary system.

    What I think we can agree on is that the federal government tries to do too much and often fails at being effective. Shrinking the federal government could (should) certainly mean less spending and less federal debt - and making the case for turning over lots of "government" functions to the private sector is what Libertarians generally focus on.

    Federal debt isn't necessarily bad, what is important is what is the debt being used for. We don't want more inefficient, unproductive government spending and we certainly don't want government spending to contribute to high inflation and reduce our living standards.

  • Social Justice is neither||

    Get back to me when you're writing about the need to demolish the spending structure instead of whining about how are we going to pay for the wastrel habits of congress.

  • Sarah Palin's Buttplug||

    Jeez, why don't you try shilling for a party that wants to demolish spending?

  • Ellis Wyatt||

    YEAH! Including Rand Paui''s TREASON on deficits.!

  • ||

    Wait, so we have a situation where freedom from taxation could cost money and hurt the economy? Where freedom isn't an intrinsic economic boon? This is unpossible! I have the highest of assurances from posters on this very forum that freedom is the Philospher's Stone of economic success; that a person or people imbued with even the tiniest fraction of freedom can overcome any number of untold hordes of less free people. I would only expect that a single American millennial janitor, living out of his parent's basement, equipped with these tax cuts could take on the whole economy of China single-handedly.

    I mean, otherwise, I might have to consider that a more oppressive society/economy could overpower (in any number of forms) a more free economy and that free economies might have to take steps, other than just handing over money, to defend themselves.

  • Tony||

    How much more free did you feel after each successive deficit-exploding tax cut of past and current Republican administrations? Were you able to fuck more women, snort more coke, frolic more in the streets? How much actual freedom is this for you? Does the word freedom even mean anything to you?

  • ||

    Does the word freedom even mean anything to you?

    Hard to tell. It started with people distinguishing economic freedom from social freedom and went downhill from there.

  • sharmota4zeb||

    Were you able to fuck more women,

    That's not how opposite-sex dating works, and most men can enjoy sex with a woman without snorting coke. Heck, some of them even manage to do it indoors instead of frolicking in the streets with some chick who was living on a park bench when he met her ... Do I even need to say it?

  • sarcasmic||

    Basically what you are saying is that Chinese central planning is kicking our free-asses up and down the world stage, so we need to abandon freedom and embrace central planning ourselves. Is that about it? The only way to beat the commies is to become commies?

  • ||

    Weird how I point out that freedom isn't an intrinsic economic boon or necessarily always an advantage and you're response is "Our only option is to go full on communist dictatorship, right?" Like history is completely defined by either absolute anarchy or totalitarianism and economics is summarily defined by laissez-faire or socialism.

    I haven't said China is kicking our asses, yet, and the idea that they will surpass us isn't pie-in-the-sky. Ultimately, the numbers are in their favor. Moreover, it wouldn't be such a problem if they weren't a rather overt communist dictatorship and actively hostile to much of what the West regards as fundamental liberty. Unilateral free trade, a.k.a. trade managed on their terms, isn't the solution. It's better than inventing markets artificially (like solar) and handing those over to them, but it's still not any sort of guarantee of current or future liberty.

  • sarcasmic||

    If trade is mutually beneficial as Adam Smith observed, then there are no losers. China can't kick our asses economically because in trade everyone's a winner. Just like first grade sports. Only for real. It's that premise that there are winners and losers in trade that leads to lost freedom, because taking freedom away is the only way to fix that problem that doesn't exist.

  • ||

    If trade is mutually beneficial as Adam Smith observed, then there are no losers.

    Wow. That's a lot of bullshit packed into one sentence. Tell me, how many socialist dictatorships did Adam Smith observe?

    Just like first grade sports.

    The first grade sports I played in people got their asses kicked. The first grade sports my kids played, people got their asses kicked. Not keeping score and handing everyone a trophy doesn't mean you didn't get your ass kicked. The only first grade sports people played and didn't get their asses kicked aren't rightly called sports. People don't get their asses kicked jumping in puddles or painting pictures for their Mom.

    It's that premise that there are winners and losers in trade that leads to lost freedom, because taking freedom away is the only way to fix that problem that doesn't exist.

    This sentence is half right. Again, if the goal is solely to produce as much shit as cheaply as possible, then there are no losers in trade. If producing as much shit as cheaply as possible means jailing dissenters, the trading parties just pretend the obvious losers don't exist. OTOH, if the goal is to maximize individual liberty, producing as much shit as cheaply as possible is *not* the (only) goal.

    I know it's hard to give up your religion of 'money = freedom always' but it's a belief system whether espoused by Adam Smith himself or Karl Marx.

  • sharmota4zeb||

    Dang, mad.casual, remind me to never go hiking in the desert with you.

    "Who ever survives this trip wins! Teamwork is for pussies!"

  • sarcasmic||

    I suppose economics is a belief system, though I wouldn't call it a religion.

    Kinda sad that people reject it when it conflicts with their politics.

  • BYODB||

    Jesus Christ, economics is a soft science not physics. That doesn't mean economics has no value, it just means that maybe don't raise up economists as anything other than reasonably successful observers and guessers.

    The very fact that economics doesn't make value judgements about who specifically wins, or who specifically loses, should tell you a lot. It's not win/win as some idiots will claim, it's a win in aggregate for each party. If you can't see how that might be a difference, than you really shouldn't call other people stupid.

  • John Galt is back||

    U.S. expects to hit $1 trillion deficit earlier than planned

    The U.S. deficit grew by $222 billion from this time last year — reaching a total of $895 billion, according to the nonpartisan Congressional Budget Office.

    Why it matters: This increase was due mostly to the new Republican tax law and Congress' routine decision to increase spending, which grew by 7% compared to revenue growth of only 1%. The CBO now says the deficit will approach $1 trillion by the end of this fiscal year, but in April the agency didn't expect the deficit to reach $1 trillion until 2020.

    Don't forget, Trump campaigned on paying off the entire debt in 8 years! From his tariffs!
    Breitbart Do the math.

    Tariff revenues of (19/8=) $2.4T per year ... vs Revenues of $3.3T per year!

    Tariffs are paid by consumers. So Trump PROMISED to increase consumer prices by the equivalent of a 73% tax increase! ... which says all you need to know about the "mental capacity" of Trumptards. (smirk)

    Do the math: $895 deficit, 10 months FY = $89.5 billion per month
    2 months at $89.5 = 179B + 895B = $1.074T.

    Left - Right = Zero

  • Sarah Palin's Buttplug||

    You know I hear wingnuts say (accurately) that "we don't have a revenue problem - we have a spending problem".

    Hooray! We agree on that!!!!!

    So why won't the GOP of Bush/Trump actually, you know, PROPOSE a spending cut? What fucking good is the GOP?

    Seriously? It is the only goddamn thing they could get right.

    BUT NOOOOOOO! No spending cuts from the GOP Congress/White House.

  • Dizzle||

    Trumps budget proposal last year actually requested 10% cuts across the board except military. Congress shit the bed on that one.

  • loveconstitution1789||

    Reason was against those cuts too.

  • John Galt is back||

    MOAR bullshit by the King of Trump Trolls

    Reason was against those cuts too.

    SHAME on you.

  • John Galt is back||

    Liar

  • sharmota4zeb||

    Hey, America does not pay tribute. We have a foreign aid program based on charity to Egypt and Pakistan to prevent those countries from becoming hotbeds of terrorism. If we had let them into NATO instead, we would have to give them votes on NATO policies and a guarantee to help them if someone invades them. Can you imagine what the debate over America's policies towards Syria, Iraq, and Iran would look like if progressives could open a map and find a NATO member bordering those countries?

  • Tony||

    As long as Trump is literally humping the American flag, we can be sure it's not a wholesale looting of the wealth of America for a few oligarchs. He's fucking the flag, after all. What could be more patriotic?

  • sarcasmic||

    Dude, the poor can't be robbed because by definition they have nothing to steal.

  • Tony||

    The vile Norquistian goblins explicitly want to use lower revenue as an excuse to cut services to poor people (because poor people suck and rich people are awesome). There's plenty to steal from poor people. It's just that suckers like libertarians think the poor are the ones getting away with something and the rich are their victims.

    I know, it's ludicrous, but it's rhetoric with some fucking legs in this country.

  • sarcasmic||

    Oh I get it. It goes back to "not giving is taking and not taking is giving," right? So if you aren't taking money from Peter to pay Paul, you're actually taking money from Paul and giving it to Peter. Doesn't matter that Paul doesn't have any money. He would have had money if you had stolen it from Peter and given it to him. So by not stealing money from Peter, you're actually stealing money from Paul. Fuck I'm getting dizzy.

  • Sarah Palin's Buttplug||

    Tony, if we taxed "the one per cent" at 100% (everything - which would not last long) we wouldn't close half annual deficit. And these nitwits like Bernie Sanders want to spend much much more.

    We spend too much. Seriously.

  • Tony||

    And one of our biggest expenditures is tax cuts.

  • sarcasmic||

    And one of our biggest expenditures is tax cuts.

    Yes. Because not-taking equals giving.

  • Cyronic||

    Reduced revenue is LITERALLY not an expenditure, you nitwit.

  • Dizzle||

    So does the donation line on your income tax form equal your gross income?

  • sharmota4zeb||

    mmmm Expenditures are delicious with some peanut butter spread on top of them.

    Tony, words have meanings and you can find them at www.m-w.com if you want. That's why I got so frustrated directing the Hackensack Gay Men's Choir this summer. I told the guys to take it from the top, and they all disappeared for 2 hours.

  • ||

    It's just that suckers like libertarians think the poor are the ones getting away with something and the rich are their victims.

    Poor people and people asking for handouts are not the same thing.

  • Tony||

    Right. Lots of rich people ask for handouts too.

  • sarcasmic||

    Yep. Like the farm bill or defense budget.

  • ||

    Lots of rich people ask for handouts too.

    In the name of equality no less!

  • sharmota4zeb||

    The bank bailout and university professors who fly to Africa to count the cats there.

  • sharmota4zeb||

    Tony, how did people on medicare pay for the conversion therapy their families forced them to try back when hospitals were involuntarily committing people for being gay? It happened in my parents' lifetimes. It's possible to alleviate the suffering of disadvantaged people by refusing to pay for their oppression.

  • Ellis Wyatt||

    Oppression ordered bt fascist Republicans.
    And you're laughably ignorant of what Medicare is, si likely a Trumptard.

  • Ellis Wyatt||

    Dude, the poor can't be robbed because by definition they have nothing to steal.

    Dude, why so massive a fucking lie on what he said?

  • Ellis Wyatt||

    Dude, the poor can't be robbed because by definition they have nothing to steal.

    Dude, why so massive a fucking lie on what he said?

  • sharmota4zeb||

    It depends on how you hump the American flag. You have to incorporate it into a well written music video that makes poignant social commentary about our lost of liberty while at the same time encouraging a joyous sarcastic defiance of tyranny like this guy did.

    Oh, that reminds me, I have to get to a County Freehold meeting soon to complain about that cop who refused to give a young man his shirt back. Guys in the LGBT community say that the biggest haters are the men who worry about their own urges getting the best of them.

  • The Last American Hero||

    Funny, the narrative this morning was he hated America because he was catching up on yesterday's news instead of sitting on the back porch of the White House staring thoughtfully at a brick taken from the WTC wreckage or some such nonsense.

    Now he's humping the flag.

  • John Galt Jr||

    This is neither the issue nor the time for such satire. Too many will think you're serious., and most of THEM are already in hysteria. Why fan the flames?

    It's like the President said, his supporters will invent excuses, even if he commits cold-blooded murder,
    Scary.

  • chipper me timbers||

    It's not MY budget it's THEIR budget.

    If they squander it and end up servicing debt as 50% of their future budgets, that's an improvement on what they spend the money doing today . win win!

  • John||

    You make a valid point. I would rather have a federal government that can only afford the national defense and servicing debt than the one we have today. Indeed, that is the only reason these people care so much about the debt; they can't stand seeing all that money they have stolen going to pay the interest on bonds instead of being used to pay off their cronies like it was intended.

  • John Galt Jr||

    (yawn) Authoritarians always want to cut the other guy's programs.
    Selfish greed masquerading as fiscal responsibility.
    Even Ayn Rand ridiculed the notion. But she was MORAL philosophy. And moral principles are not Politically Correct to either tribe these days.

    Left - Right = Zero

  • sharmota4zeb||

    +1 To John and Chipper me timbers

  • Let freedom ring||

    The only way to stop the spending is to cut off the money. The US Income tax is an excise tax. It is also a classical liberal public office duty. Hamilton told us in federalist 42 that excise taxes are like a river. This river can be cut off at the source, by not engaging in the privileges and activities that are taxable by Congress. Congress can only tax that which flows from its powers in Article One. The only exception is a direct tax on property subject to apportionment, only levied a half dozen times in history. To levy such a tax now to pay the massive federal debt would lead to riots in the street.
    The right to work for a living is not a taxable activity. Only labor directly connected to the federal treasury is a privileged and therefore taxable activity. A "trade or business" in the IRS code is even defined as "the functions of a public office". No one pays attention to this fact except a few hundred thousand constitutional Patriots, but for decades they used the wrong legal tactics, ie don't file, don't pay, make them prove their jurisdiction in court. This didn't work, the federal judges were too timid to make the IRS follow the law.

    ,

  • John Galt Jr||

    The US Income tax is an excise tax

    The rest of this is also wrong.
    Let us know when you become emperor.

  • Let freedom ring||

    But for fifteen years now, since 2003, one Patriot figured out that the correct way to stop the river of money to the state was yes file yes participate in withholding, but simply ask for a refund of all withheld funds, including payroll taxes. This procedure is simple, it is easy to do, and the IRS has conceded it is legal. It is sometimes a little less convenient, you will receive a check not direct deposit. You may get a single letter to see if you know what you are doing that you will have to reply to. Refunds take longer to arrive, but the IRS is nice enough to pay interest due to the delay.
    All this is documented on the website www.losthorizons.com. There are examples of filings and you tube testimonials from grateful recipients of full and complete refunds of all withholding, state and federal. People say they no longer fear the IRS.
    You cannot petition the Lord with prayer. Congress will spend whatever money you send them, and borrow even more. Wouldn't you, if you could? Th e only way to force them to stop is to stop sending them the money. It is the check and balance built into thr constitution. Don't work for the feds, and ask for your money privately earned back. Uphold the law. Be a patriot.

  • loveconstitution1789||

    Just dont let the government withhold so much out of your paycheck.

    You are only required to pay taxes, not give the government an interest free loan every year.

  • Ellis Wyatt||

    You are only required to pay taxes, not give the government an interest free loan every year.

    That is so profoundly stupid, you can only be a Trumpster.

    That no law requires withholding taxes is insane. And it's not an interest-free loan unless you think all the government spending waits for April 15th. Each month's withholding finances that month's spending. duh

    I'm not defending how we do it now. But it doesn't help to spout nonsense that the vast majority of voters know is bat-shit crazy, and/or has them peeing their pants with laughter.This is why we've been losing for decades.

  • John Galt Jr||

    One Patriot figured out that the correct way to stop the river of money to the state was yes file yes participate in withholding, but simply ask for a refund of all withheld funds, including payroll taxes. This procedure is simple, it is easy to do, and the IRS has conceded it is legal. It is sometimes a little less convenient, you will receive a check not direct deposit.

    You're also a Birther, aren't you?

  • BYODB||

    Look, why should Republicans care about the deficit? Honest question. The entire Democrat party doesn't care, and most of the Republican party doesn't care, so what incentive could there possibly be to be the 'adult' party that wants to push grandma off a cliff in her wheelchair while telling poor people to fuck themselves?


    And, never forget, that if you want to cut even the rate of growth you're literally murdering old people and the poor. You won't win as long as the other side paints you as a murderer every time you try to constrain spending.

  • loveconstitution1789||

    Trump doesnt care as much as most politicians, so he might be able to pull it off.

    Congress will blame Trump and Trump is fine with 'blame' as long as he can cut spending and get tax cuts for American voters.

  • BYODB||

    It's hardly surprising that a Democrat like Trump would shill for tariffs and more spending, but notably this isn't about Trump. It's about Congress claiming that higher taxes will somehow magically balance a budget when we have empirical proof that it won't.

    And, again, as long as Democrats claim that Republicans are trying to kill grandma by cutting spending and the public keeps swallowing it hook, line, and sinker it's a curious claim to think that it's at all good for the Republican party to care about deficits.

    Factually speaking, it's only good for the Republican party if they go the same way Democrats have gone already. Therefore that is what they will most likely do.

    I know there's something of a fad of 'late stage' this or that, but it is honestly true that we're in the late stages of a Republic. Buying votes using the treasury is the death-knell of a Republic, but thanks to fiat currency it drags out longer than it probably should.

  • ShotgunJimbo||

    The republican party should at least stop running and branding itself on fiscal responsibility. Because as long as they do everyone can see they are liars and hypocrites plain as day. They should just be honest about their bullshit and stop saying they are for responsibility and balancing the budget.

  • ShotgunJimbo||

    Though I am all for large tax cuts as a tool to motivate the washington slime to take some responsibility in their spending. Maybe once the interest bill on the debt starts to eclipse our other major expenditures they will get serious about being fucking adults.

  • Ellis Wyatt||

    Though I am all for large tax cuts as a tool to motivate the washington slime to take some responsibility in their spending.

    Why not just repeal the entire income tax? Just as crazy, but bigger deficits. While smirk at sucking the gummint teat, paid for by your children and/or grandchildren, libertarians have always known that spending must come FIRST.

    Look how Trump's policies have already destroyed our debt. We will now have a trillion-dollar deficit THIS year, (ends this month), which was originally forecast for 2020. Our deficit was nearly $900 billion, with two months left to go.

    This is Trump's New Deal. Government debt gives the ILLUSION of GDP growth. That's why GDP growth averaged near 9% during the Great Depression. So Trump must think the 1930s were our greatest boom of the 20th century. (lol)

    Here's what the goobers never tell you. Obama's deficit was under $600 billion. Trump ran it up to a trillion, in TWO YEARS. That's 1,000 billion. A near 70% increase in deficits. Compare with Obama;s for a yuge laugh.

    Make America DEBT Great Again.

  • Uncle Jay||

    What good are tax cuts if the out of control spending isn't stopped?

  • ThomasD||

    You mean other than the people who produce the wealth get to keep their wealth?

    The idea that Congress will not spend us into oblivion, regardless of the tax rate, is a joke.

    Default was baked into the entitlement cake(s).

  • I am the 0.000000013%||

    Just from a tactical perspective it's a great move for the Republicans.

    If they keep cutting taxes, then the next Democrat administration is going to have to cut spending (which won't happen) or spend all their political capital raising taxes, meaning that can't do more stupid things like the ACA or a national minimum wage.

  • Charles Barr||

    The DEBT is not the DEFICIT. And the DEFICIT is not the DEBT.

    Government BORROWING drives up the debt, not government SPENDING.

    The solution to our debt problem is simple: STOP ISSUING DEBT-BASED MONEY! Begin issuing pure "unbacked" fiat money to fund the deficit, rather than going further into debt. The inflationary impact of unbacked dollars is no worse than the inflationary impact of the same amount of debt-backed dollars. Issuing unbacked dollars will halt the increase in the national debt and its crushing $430 billion in annual interest. Paying off part of the maturing debt each year and rolling over the rest will eventually bring the national debt (and its taxpayer-financed interest payments) down to zero. See www.fixourmoney.com .

  • John Galt Jr||

    They BOTH do.

  • blondrealist||

    The private banking system creates most of the money in our system. We operate in a credit based economy, so in the aggregate, I don't see how we can get rid of "debt-based money". Loans create deposits.

    The "crushing" annual interest payments are not crushing anything now, but I understand your concern. Having said that, throughout this thread it seems nobody is talking about the other side of the balance sheet. People, pension funds, insurance companies, etc. are holding those government bonds on their balance sheets as assets and collecting the interest. I'm not saying all is fine because we "owe it to ourselves", but we still shouldn't forget that the federal debt instruments are assets to the holders.

  • Ellis Wyatt||

    The private banking system creates most of the money in our system. We operate in a credit based economy, so in the aggregate, I don't see how we can get rid of "debt-based money". Loans create deposits.

    Precisely like the gold standard.

    but we still shouldn't forget that the federal debt instruments are assets to the holders.

    Who are also borrowers -- and subsidized by the poorer. That's why you want MORE debt, to make the banks and the rich even richer? Worse than a proggie!

  • blondrealist||

    I didn't mean to suggest I want more federal debt - I was just hoping to engage in a discussion about operational realities of fiat currency systems like ours. I'm all for a smaller federal government - which would lead to less federal debt, but the notion that balancing the federal budget is necessarily good (or bad) prompted me to get this dialog going. The context on federal spending and federal debt is often wrong - meaning people forget the differences between currency issuers and currency users.

  • Charles Barr||

    Interest payments on the national debt amount to a steep $2,000 per year for each person in the U.S. over the age of 18. It's much more for each person who works and pays income taxes. Maybe you don't consider that "crushing", but I do. And if government bonds were no longer available to investors, much of their money would instead flow to bonds issued by private companies that actually contribute something to the economy.

  • Ellis Wyatt||

    Are you saying we should default on all our (public) debt?

  • blondrealist||

    We are in agreement that a lot of stuff the federal government does or tries to do should be turned over to the private sector.

  • Ellis Wyatt||

    HOW?
    Or are you as USELESS as the entire libertarian establishment.?

    No anti-gummint babble. Goobers yelling "Git gummint out" are NOT a solution.

  • John Galt Jr||

    U.S. expects to hit $1 trillion deficit earlier than planned

    The U.S. deficit grew by $222 billion from this time last year — reaching a total of $895 billion, according to the nonpartisan Congressional Budget Office.

    Why it matters: This increase was due mostly to the new Republican tax law and Congress' routine decision to increase spending, which grew by 7% compared to revenue growth of only 1%. The CBO now says the deficit will approach $1 trillion by the end of this fiscal year, but in April the agency didn't expect the deficit to reach $1 trillion until 2020.

    Don't forget, Trump campaigned on paying off the entire debt in 8 years! From his tariffs!
    Breitbart Do the math.

    Tariff revenues of (19/8=) $2.4 Trillion per year ... vs Federal Revenues of $3.3 Trillion per year!

    Tariffs are paid by consumers. So Trump PROMISED to increase consumer prices by the equivalent of a 73% tax increase! ... which says all you need to know about the "mental capacity" of Trumptards.

    (smirk)

    Do the math: $895 deficit, 10 months FY = $89.5 billion per month
    Two more months at $89.5 = 179B + 895B = $1.074T.

    By Republicans.
    Left - Right = Zero

  • Chris Paige||

    Tax cuts cost nothing because it's not the government's money to "give" back to us; stealing less $ from us isn't "giving" us anything. Whether you pay for government spending with taxes, debt (aka future taxes), or inflation, it's the spending, not the financing, that matters, so - even if you were to raise taxes so as to eliminate deficits - you'd still have the economic effects of a "deficit" because there's no economic consequence to deficits other than the consequences of the spending. Spending is the problem; financing is meaningless.

  • John Galt Jr||

    Tax cuts cost nothing

    Hundreds of millions of Americans, in future generations, will pay the costs that you refuse to see,

    Whether you pay for government spending with taxes, debt (aka future taxes)

    Same blunder. Taxes are paid by current taxpayers, for their own stuff, Debt is how both parties buy votes with free stuff and/or free tax cuts. And there are plenty of suckers like you.

    Left - Right = Zero

  • Charles Barr||

    Re: "Debt is how both parties buy votes with free stuff and/or free tax cuts." This is true only if the government borrows the money instead of issuing it directly. Issuing debt-free money can cause near-term inflation, but it does not burden future generations with unchosen obligations.

  • David Nolan||

    This is true only if the government borrows the money

    As he said. The alternative could be far worse

    near-term inflation,

    No. Unlike debt, that inflation continues forever, robbing purchasing power from countless generations,

    What if the inflation becomes deflation? That deflation still causes lost purchasing power, and if the government is buying votes (creating deficits) with INflation, then later DEflation means borrowing the same money that would have been originally borrowed, but delayed -- leaving those future generations screwed either way.

    Back to basics, the notion that tax cuts cost nothing is contradicted by his own words. (Paige)
    The claim of "keeping more of my money" is belied by admitting the tax cuts must be paid for. It's not YOUR money you're getting.

    This may have been Rand Paul's latest blunder. He would shut down government over higher spending, citing the impact on debt. Then he voted FOR tax cuts with FAR WORSE new debt. I'm not aware of him explaining the blatant, and massive, contradiction, but his followers repeat the "my own money back" fairy tale.

  • David Nolan||

    Correction: Technically, it's the EFFECT of this year's inflation continues forever.. If prices rise 2%, they will always be 2% higher than ANY future action, forever.

    If we had even 10% deflation, that STARTS from the original 102%, thus leaving us 2% higher than otherwise. Even a hypothetical 1000% deflation, would leave prices the same 2% higher. than otherwise..

    Unless I run for Congress!

  • Charles Barr||

    Re: "Unlike debt, that inflation continues forever . . . " No, the loss of purchasing power long-term is the same whether the money is "borrowed into existence" or "printed into existence". It's the same amount of money in either case. The difference is that taxpayers are not on the hook for generations of crippling interest payments if the money is "printed into existence".

  • David Nolan||

    No,

    I see you reversed yourself.

    the loss of purchasing power long-term is the same whether the money is "borrowed into existence" or "printed into existence"

    "Long-term" was my point. Yours was short term. You also reversed yourself on borrowing vs inflation, which you originally said were different

    Re: "Debt is how both parties buy votes with free stuff and/or free tax cuts." This is true only if the government borrows the money instead of issuing it directly.

    I count four different (and contradictory) points since you joined this thread.

    I'm done with you..

  • Charles Barr||

    Inflation can be short-term while its effects can be long-term. If inflation is 5% in year 1 and there is no further inflation thereafter, prices will stabilize at the 105% level going forward. My point is that this is true whether the money is borrowed into existence or printed into existence. So financing the government deficit by issuing bonds (and forcing taxpayers to pay interest on these bonds) makes no sense.

    The amount of borrowing and the amount of inflation are not related to each other IF a country prints its money directly rather than issuing bonds or other debt instruments.

  • David Nolan||

    Borrowing means it gets paid back.. Or it's not borrowing.

  • Charles Barr||

    If the government creates inflation by financing its deficit with debt, it can reverse that inflation by running a surplus and paying down that debt. Likewise, if the government creates inflation by financing its deficit with "printing-press" money, it can reverse that inflation by running a surplus and retiring some of the "printing-press" money it created.

    The end result is the same, but the second method is superior because it does not stick taxpayers with a bill for interest on the government debt between the time this debt is created and the time it is paid off.

  • Ellis Wyatt||

    That's not how inflation is created And Nolan is correct about -- he says reversals, I see diversion.
    Incredibly, you began by supporting the right-wing fantasy that tax cuts cost nothing. presumably to defend this administration's truly shameful failures on the debt,

    If we compare the 10-year forecast of debt, with Obama's mostly actual, Trump has increased the debt mote, in a year and a half, than Obama did in his entire 8 years.

    But Obama inherited the 2nd worst recession since the 1930s, and handed Trump the longest recovery EVER for an incoming President - over seven years

    So ... Trump, handed the longest recovery ever (at inauguration), has added the most DEBT ever. And he campaigned on paying it off! in 8 years! Using the latest forecast, he'll miss that promise by roughly 30 TRILLION dollars, And he's trained his puppets to say that tax cuts cost nothing! They're all in a Clown Car.

    Now they're about to add even more debt! Trump was a Democrat most of his life. This is his New Deal.

  • Charles Barr||

    The only "truly shameful failure on the (national) debt" is that it exists at all. The only reason it exists is because the government insists on "borrowing" money (and saddling taxpayers with the interest payments) rather than "printing" it.

    I couldn't care less which administration takes the credit (or blame) for today's economy and its associated national debt. I didn't mention Trump or Obama once. I do care that the federal government still insists on financing the deficit by increasing the national debt, when a much better alternative is available. See www.fixourmoney.com .

  • Ellis Wyatt||

    I KNEW you'd link to a wacko web site. THIS is where you got all your zaniness

    Issuing pure fiat money freezes the national debt at its current level.

    OMFG
    That's even crazier than Alex Jones!!

  • Charles Barr||

    If the government stops issuing bonds, the national debt will no longer rise.

    If you don't agree, please explain why.

  • Ellis Wyatt||

    THIS retarded!

    If the government stops issuing bonds, the national debt will no longer rise.

    If you don't agree, please explain why.

    OMFG
    You don't know WHY the bonds are issued!
    STOP DEFICIT SPENDING is the ONLY way to stop increasing the debt!
    YOU DIPSHITS ARE DEFENDING FIAT MONEY ... WITHOUT THE SLIGHTEST IDEA HOW AND WHY ITS CREATED ... AND BY WHO!!

    No-o-o-o, federal deficits are NOT even a minor reason the Fed creates money.
    Deficits would increase debt even under a gold standard and NO Fed

    I was gonna ask who balances your checkbook but ....
    When you're buying something with cash .... who counts out the cash for ya?

  • Charles Barr||

    Deficits do increase debt under a gold standard because the government cannot "print" money. It has to borrow the money instead.

    Deficits do not increase debt under a pure fiat system because the government can and does "print" money, but does not issue any bonds. Hence, no additional government debt is created.

  • vek||

    This is one of those areas where I've always been torn... I do believe there is something to the idea that if you give the government less money, they will tend to spend less. They'll still spend more than they have of course, but less than they would if the had more coming in the door.

    Also, you WILL increase real growth and spending power in the here and now, and likely into the future with the lower taxes. This is an unambiguous good.

    But you're piling on debt that will have to be dealt with eventually one way or another. As a 30 something, I will be one of those people dealing with it...

    However, I have also always believed the only 2 ways we're likely to actually get out of debt are 1. To have a total collapse, issue a new currency, etc. 2. We'll hit a rough patch economically, and inflate our way in REAL TERMS out of the debt being as big an issue.

    Technically we could try 2 on purpose when the economy isn't otherwise bad... But that itself could make it bad.

    If we were run by sane adults I expected to stay the course, I'd probably opt to not lower taxes, and to actually pay this shit off... But since it's a spending problem anyway, and we're not run by adults, I think I lean towards cut the taxes now, and deal with the fallout in the future. At least we'll have a bigger economy to deal with the problem then...

  • vek||

    The nonsense thing about it all is how easy it would be to balance the budget, and let even regular 2-3% a year inflation basically turn the debt into a non issue.

    If we just limited all programs, including the useless ones, to saaay .5-1% increases a year, we'd be in a pretty decent spot in a decade. If we did some wise trimming first, and then limited it as such, we would be doing pretty good. The REAL value of the debt would be reduced by 30-40% from just normal inflation, and revenues could be balanced out or turned into a surplus easily in such a scenario.

    We should also be able to maintain the current level of services anyway, as they should be able to squeeze a MERE 1% in productivity gains a year out of government agencies as automation and better technology comes into play for things.

    So basically not pain, and we get on the level...

    Yet we can't even manage to do something that simple and painless!

  • Ellis Wyatt||

    Yet we can't even manage to do something that simple and painless!

    Which is why it would fail -- to elect a Congress.-- and to cut spending,

  • vek||

    It's pathetic.

  • Ellis Wyatt||

    Yes. Your "simple and painless" solution is pathetic,at best.
    Pathetic is an understatement.

    Any fool can criticize, condemn and complain, and most fools do.
    --Benjamin Franklin
    Complaining about a problem, without posing a solution, is whining.
    -Theodore Roosevelt
  • vek||

    LOL

    You're so tricky! Sometimes you'll act like a sane human being... Then go off the rails.

    My suggestion of keeping EVERY stupid program we have, but merely limiting the growth in its budget to less than inflation is NOT a bad idea. It's a way to easily reduce spending. And yes, it'd be painless. As I said if they can't eek out 1% per annum increases in productivity, they're idiots. The private sector does more than that, often times MUCH more. To expect the government to vastly under perform private industry in efficiency gains isn't too crazy.

    If we'd maintained the exact level of government we had saaay 30 years ago, with efficiency gains from computers and other things, we'd have a budget dozens of percent smaller in terms of cost. And a balanced budget. Every time their budgets get increased, because they ARE making efficiency gains, they just take on new pointless projects. If their budget didn't increase, they wouldn't have the money to do this, and eventually we'd balance things out. Without a single program stopping, let alone trimming obvious fluff.

    You're a moron. I don't even know why I type responses to you.

  • Ellis Wyatt||

    I do believe there is something to the idea that if you give the government less money, they will tend to spend less.

    Have you ever MET the Easter Bunny?

    Cut spending first, which wingnut cowards refuse to accept.

  • vek||

    That would be fine with me... But in lieu of that, lower taxes are okay in my book. Keep in mind Hihn, I'm one of the young people who will be stuck holding the bad... I'm not some boomer saying this just because it benefits me and has no downsides. I'll get both sides of that coin...

  • Longtobefree||

    With or without taxes 2.0, balancing the budget is child's play. Lay out a copy of the US Constitution, and the current cabinet level positions. Whack the entire budget of any cabinet level office not specifically authorized in the constitution.
    If that alone does not eliminate the deficit, raise income taxes on democrats and lawyers until it does.
    Done.
    Whew, that was a lot of work.
    (OK, what you really meant, surviving the politics of balancing the budget, is a bit more complex.)

    Next task on the list?

  • Ellis Wyatt||

    GREAT Satire!!!!

  • kc75081||

    the deficit is like a drug addiction, there's a long period where increasing the dosage makes everything better. our republic is getting old and needs a little help with the aches and pains. just a little more debt and aahhh the economy is jumping like a young buck.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online