OT: U.S. Debt in Laymen terms

[verticaldoug]

If the US Government was a family, they would be making $58,000 a year. They spend $75,000 a year and are $327,000 in credit card debt.

They are currently proposing "BIG" spending cuts to reduce their spending to $72,000 a year.

These are proportions of the federal budget and debt that I can actually understand. But what is a few trillion amongst friends.

[dave thompson]

A trillion here, a trillion there, pretty soon it starts to add up.

[Louis]

Do I have to hear about this here also?

Give me an f'n break. PLEASE.

[dave thompson]

Do I have to hear about this here also?

Give me an f'n break. PLEASE.
If you'd get off the interweb and focus on getting your new Kirk built, you wouldn't have to put up with this.

I thought you were banned.

[Louis]

I thought you were banned.

It's not as easy to get rid of me as you might have hoped. ;)

[MattTuck]

Thread lock in 3... 2... 1...

I'll make some observations. we spent 5 times as much on senior citizens (that contribute very little productive energy to the economy) as we do on children (that both literally and figuratively are the future, but also can't vote).

Taking on debt to invest in productive assets (ie. improving infrastructure so more commerce can take place) is generally a 'good' idea. taking on debt to pay operating expenses not covered by cash flows is generally a 'bad' idea.

Problem is primarily related to the fact that in elected officials' eyes, donors are more important to being elected than the constituents they are supposed to represent. It's a perverse system, and now that system has created a monster.

[Lifelover]

If the US Government was a family, they would be making $58,000 a year. They spend $75,000 a year and are $327,000 in credit card debt.

They are currently proposing "BIG" spending cuts to reduce their spending to $72,000 a year.

These are proportions of the federal budget and debt that I can actually understand. But what is a few trillion amongst friends.

Or

If the US Government was a small child, they would be making $58 allowance a year. They spend $75 a year and are $327 in grand parent debt.

They are currently proposing "BIG" spending cuts to reduce their spending to $72 a year.

Same numbers but not nearly as bad.

[FlashUNC]

I'm getting tired of the conflation of U.S. government budgeting and spending with personal finance.

[dave thompson]

It's not as easy to get rid of me as you might have hoped. ;)
Don't you have an airplane to build or something? There's a Marine pilot waiting.

[nahtnoj]

Are you getting tired of it because it is a comparison of two things that have absolutely nothing to do with one another? Because that is why I'm tired of it.

[verticaldoug]

Or

If the US Government was a small child, they would be making $58 allowance a year. They spend $75 a year and are $327 in grand parent debt.

They are currently proposing "BIG" spending cuts to reduce their spending to $72 a year.

Same numbers but not nearly as bad.

actually, the grandparents are using the grandchild's credit card to spend the money.

[Louis]

Don't you have an airplane to build or something? There's a Marine pilot waiting.

I can't comment on that.

[Bob Ross]

I'll make some observations. we spent 5 times as much on senior citizens (that contribute very little productive energy to the economy) as we do on children (that both literally and figuratively are the future, but also can't vote).

Taking on debt to invest in productive assets (ie. improving infrastructure so more commerce can take place) is generally a 'good' idea. taking on debt to pay operating expenses not covered by cash flows is generally a 'bad' idea.



So wait, you're saying Old Folks® are a drain on society, a money pit that we shouldn't be supporting? Next you'll be advocating a Soylent Green and/or Logan's Run-type solution!

[Dlevy05]

Not to go off topic, and not to start arguments, but....

The whole outlook on debt in this country is just stupid. It comes from the controlling mindset of keynesian economics, policies which our country has blindly adopted. The world would be very different today if people thought along the lines of the Austrian school of thought.

[dave thompson]

Old Folks® are a drain on society, in a strictly monetary way but are not used by society to use collective wisdom and experiences of us Old Folks® to enhance the society.

IMO, it's typical United States short-sightedness, much as 'we' pay attention to quarterly reports instead of 5 or 10 year goals.

It's the Wal Mart-ization of America; what's cheapest, not what's best.

[1happygirl]

Case in point as a student, I can relate value for $$$ spent.

I see that scores are down, money is up. I want the peeps in my study group from other places that are smarter and from places that don't spend near as much.

http://nces.ed.gov/fastfacts/display.asp?id=66
Current expenditures per pupil in fall enrollment in public elementary and secondary schools: Selected years, 1961-62 through 2007-08
School Year
Current expenditures in unadjusted dollars

Current expenditures in constant 2008-09 dollars

1961-62 $393 $2,808
1970-71 842 4,552
1980-81 2,307 5,718
1986-87 3,682 7,105
1990-91 4,902 7,857
1995-96 5,689 7,904
1996-97 5,923 8,002
1997-98 6,189 8,214
1998-99 6,508 8,490
1999-2000 6,912 8,765
2000-01 7,380 9,048
2001-02 7,727 9,309
2002-03 8,044 9,482
2003-04 8,310 9,586
2004-05 8,711 9,754
2005-06 9,145 9,865
2006-072 9,679 10,178
2007-08 10,297 10,441

People were smarter in the '60s* and now as I see on this forum, peeps are smarter in their 60s.
My parents IQ went up 100 points last yr. Are they smarter, or am I older?

*in general and SAT scores/entrance stuff
Annual budget US$32 billion (2009)
US$56 billion (est. 2010)
US$71 billion (est. 2011)
ARRA Funding:
US$102 billion (2009)
US$51 billion (est. 2010)
US$23 billion (est. 2011)

[Ahneida Ride]

Once upon a time in a town very much like yours there was a casino. Actually, several casinos. But not too many. Just enough to make a nice living entertaining the local gentry.

Tradesmen in town watched the well-heeled come and go from the casinos wishing they could be like them.

Casino owners, never satisfied, lamented at their regular Sunday luncheon. "Making a living off the gentry is fine but there are too few of them. How do we get the many tradesmen in town to come to our casinos?"

One of them hit on a plan. "Why don't we pay our servants in chips? We can put their wages into the kitty to ensure they can cash them but perhaps a few might linger at the tables?"

Lo and behold, this worked. Most servants had never set foot in a casino but few could resist the allure of wagering a few chips before exchanging the rest for wages. Smart casino owners learned that if they clustered their low stakes tables near the exchange booth even more would play. Like the gentry, everyone who played carried vivid memories of their winnings and conveniently forgot about their losses.

The casinos expanded and all was well.

One payday a servant ran out of money while shopping, though he had a pocket full of chips. The grocer, who had never been to a casino, was happy to take them. He and his wife had a grand time. Before long chips were circulating all over town.

The casinos expanded and all was well.

Then one casino owner noticed that with so many chips in circulation there was no need to keep an equal amount of real money in the kitty to redeem them. Why not lend some of that real money out at interest? Who would ever know? Another casino owner realized that if he paid his servants in chips but only put half their wages in the kitty, none would be the wiser. A third found that it cost him nothing to express his gratitude to the mayor with a bag of chips after the mayor helped him with a zoning problem. The mayor, who never seemed short of chips, found that spreading these around to supporters worked wonders on Election Day.

Before long all of the real money in all of the casinos' kitties only covered ten percent of the chips circulating.

All was well until a terrible storm knocked down many homes in the town. Long lines of tradesmen formed at every casino looking to cash in their chips so they could afford to make repairs. But there wasn't enough money on hand to pay them all. What to do?

Casino owners gathered in the town hall. As crowds outside grew angry and the mayor cowered under his desk the richest casino owner stood up. "My friends," he said. "We must hang together or we will surely hang separately. Each of you must reach into your own pockets and come up with money to redeem these chips. I would be happy to cover any of you that are short in return for a mortgage on your casino."

And so the crisis passed. In time the big casinos gobbled up the little casinos, and all was well.

It turns out that many towns across the land had casinos just like this town, with owners just as clever and chips just as bountiful. When they learned of the run on the casinos' exchange windows they realized that the same thing could happen to them. So the largest and most powerful casino owners arranged a secret meeting on a secluded island.

"It's all well and good that a few wealthy casino owners had both the will and the resources to weather the chip run. But what if it happens on a larger scale? Only a national solution will keep all of our casinos solvent in times of panic. Gather up your chips, boys, it's time to visit our friends in the capital."

And so a National Casino Reserve was formed to assure the people that a lender of last resort always stood behind every casino guaranteeing that their chips could be redeemed. The government also proclaimed that all taxes must be paid in chips instead of real money, passing a modest new tax on the incomes of only the most wealthy. Chip use exploded.

To protect people from fraud a law was passed making it illegal for casinos to manufacture their own chips. Only the National Casino Reserve Board could do that. The total number of chips in circulation would be controlled by the National Casino Reserve Board Chairman, who would also tell every casino how much real money they had to keep on hand to redeem chips.

A wise and prudent National Casino Reserve Board Chairman was chosen who swore a mighty oath guaranteeing that there would always be plenty of chips to keep every tradesman employed, every casino owner wealthy, and every politician happy.

And they all lived happily ever after.

[veloduffer]

So wait, you're saying Old Folks® are a drain on society, a money pit that we shouldn't be supporting? Next you'll be advocating a Soylent Green and/or Logan's Run-type solution!

Yeah but think of the surge in the Serotta Classified section - more to choose from! Of course if we use the Logan's Run age standard, I'd already be out of here. :bike:

[dave thompson]

Yeah but think of the surge in the Serotta Classified section - more to choose from! Of course if we use the Logan's Run age standard, I'd already be out of here. :bike:
In dog years, I'm dead!

[dgauthier]

While I agree with the posters who say equating home finance and government economics is an oversimplification, I wish to take issue with one part of your example: the government does not pay anything close to the onerous 18-20% interest on its debt that consumers pay on credit card debt.

Change that $327,000 in credit card debt to $327,000 in various loans and mortgages with an average interest rate of less than 2%. Add to that the fact that your "family" can increase its income any time it wishes, and that doesn't look so bad. In fact, it looks, as Obama said recently, "eminently solvable".

Ride more.

If the US Government was a family, they would be making $58,000 a year. They spend $75,000 a year and are $327,000 in credit card debt.

They are currently proposing "BIG" spending cuts to reduce their spending to $72,000 a year.

These are proportions of the federal budget and debt that I can actually understand. But what is a few trillion amongst friends.

[Onno]

Add to that the fact that your "family" can increase its income any time it wishes, and that doesn't look so bad. In fact, it looks, as Obama said recently, "eminently solvable".

Ride more.

YES! This is what makes the 'family' analogy bogus. The government is not on a fixed income. If the economy improves, revenue does too. So too if taxes were increased. Think of taxes as rent for living in what could be the best country on the planet, or something like that.

Hatred of government is a peculiar kind of self-loathing, imo.

[goonster]

I like Robert Reich's analogy:

Imagine your house is burning. You call the fire department but your call isn't answered because every firefighter in town is debating whether there will be enough water to fight fires over the next 10 years, even though water is plentiful right now. (Yes, there's a long-term problem.) One faction won't even allow the fire trucks out of the garage unless everyone agrees to cut water use. An agency that rates fire departments has just issued a downgrade, causing everyone to hoard water.

While all this squabbling continues, your house burns to the ground and the fire has now spread to your neighbors' homes. But because everyone is preoccupied with the wrong question (the long-term water supply) and the wrong solution (saving water now), there's no response. In the end, the town comes up with a plan for the water supply over the next decade, but it's irrelevant because the whole town has been turned to ashes.

[rugbysecondrow]

I like Robert Reich's analogy:


I like the analogy even if I don't agree 100%.

My mind is not complex or deep enough to grasp the conversation in real terms and any solution I could offer is too simple to be taken seriously, so it is even hard to discuss. What we can discuss is the importance of people discussing the problems AND coming up with solutions. I don't know how to solve the problem, but I think I can see a problem.

I get that it might be necesary to run a deficit in some years or to carry debt, but it seems that mentality has been adhered to far too long with no real willingness to agree that maybe we need to address it. Shortsightedness is partly to blame, put unwillingness to have a hard discussion and behold hard solutions is the real problem. The House members are elected every two year, they think no further than that. The public thinks no further that yesterday, Presidents and Senators are no better. I don't want a monarchy, but we should have established policies and maybe constitutional amendment that is overarching that forces the elected officials to think longer than their elected term and past their professional intersts.

[nahtnoj]

I don't want a monarchy, but we should have established policies and maybe an amendment that is overarching that forces the elected officials to things longer than their term.

I think the flaw in your thinking here at it relates to the spending issue is that thinking long term might (or perhaps does) under certain circumstances require deficits.

[goonster]

I think the flaw in your thinking here at it relates to the spending issue is that thinking long term might (or perhaps does) under certain circumstances require deficits.
I don't think he's advocating a balanced budget amendment, but perhaps rather something along the lines of campaign finance reform, i.e. an attempt to protect lawmakers from acting only with the next reelection campaign in mind.

[rugbysecondrow]

I think the flaw in your thinking here at it relates to the spending issue is that thinking long term might (or perhaps does) under certain circumstances require deficits.


Sure, and I am not certian what the solution would be, maybe not necesarily a balance budget amendment, but something tangible. I am not soley against a deficit, the problem is when we have years compounded, we have had a deficit every year since 2001. That is just not sustainable, especially with no legit plan for managing the problem. Maybe there is and I just don't get it, but I have very little faith in either party or Congress as a body to actually do anything to solve this now. It will have a bandaid solution, somthing that allows them to reelected.

I don't think he's advocating a balanced budget amendment, but perhaps rather something along the lines of campaign finance reform, i.e. an attempt to protect lawmakers from acting only with the next reelection campaign in mind.

Agreed, it will have to be multi facited. What I like about Reich's quote is that that house is burning and WILL burn to the ground, I think my view of what is the house is different that others though.

Dangerous ground friends.

[MattTuck]

So wait, you're saying Old Folks® are a drain on society, a money pit that we shouldn't be supporting? Next you'll be advocating a Soylent Green and/or Logan's Run-type solution!

I'm not saying that we need to cut all support. Just saying that because of our system & the way geriatrics turn out to vote, they control (and benefit from) a disproportionate share of government spending.

It's the same way that Iowa's disproportionate influence on presidential elections leads to ridiculous subsidies on corn based ethanol.

I think government spending should reflect the priorities of the 'people', and I don't pretend to know what exactly those priorities are or should be. But sooner or later, the people who are going to pay the bills are going to find fault with policies that aren't allocating 'public' resources to the most productive uses.

[dave thompson]

I'm not saying that we need to cut all support. Just saying that because of our system & the way geriatrics turn out to vote, they control (and benefit from) a disproportionate share of government spending.

It's the same way that Iowa's disproportionate influence on presidential elections leads to ridiculous subsidies on corn based ethanol.

I think government spending should reflect the priorities of the 'people', and I don't pretend to know what exactly those priorities are or should be. But sooner or later, the people who are going to pay the bills are going to find fault with policies that aren't allocating 'public' resources to the most productive uses.
To which I lay the blame at the feet of the spineless cowards on both sides of the aisle who put party politics above the good of the country. I'm so pissed off about their latest debacle and feel so helpless because there's nothing substantive that I, or anyone else, can do.

[veloduffer]

To which I lay the blame at the feet of the spineless cowards on both sides of the aisle who put party politics above the good of the country. I'm so pissed off about their latest debacle and feel so helpless because there's nothing substantive that I, or anyone else, can do.

To paraphrase Churchill: democracy is a terrible form of government, but it's the best government that exists.

[veloduffer]

So wait, you're saying Old Folks® are a drain on society, a money pit that we shouldn't be supporting? Next you'll be advocating a Soylent Green and/or Logan's Run-type solution!

Folks forget that capitalism is an economic model, not a social model.

[Climb01742]

I think government spending should reflect the priorities of the 'people', and I don't pretend to know what exactly those priorities are or should be.

this is something i've been thinking a lot about lately. as a nation, we can't afford to do everything. (actually, we haven't been able to for quite awhile now.) we must make choices. we must fund some things and not fund others.

as our system now works, special interest groups of all stripes and pet projects will have their voices heard. they'll somehow get their thumbs on the scale and tilt the argument in their favor.

but how will regular people be heard? how could you actually take the temperature of, say, 250 or 275 million americans, to get a sense of what people really prioritize as important to them? as things they'd truly want their taxes spent on?

as now constituted, elections are frauds and shams; they are theatre put on by vested interests with only two choices, and both choices are beholden to the vested interests.

i have no answer but if google has any spare bandwidth, i wish they'd figure out how to let all american vote on a list of national priorities...vote in such a way that lobbyists couldn't cook the results...PACs couldn't pressure voters...and the digital ballot-box couldn't be stuffed by zealots on either extreme.

right now, washington is an insider game, untethered to our real concerns, and unaccountable to anyone without a checkbook.

how do we give 'average' american a voice again in what problems we tackle...and what problems we leave for other nations to, at long last, pull their fair weight on.

yo, google. get on that, would you? ;)

[Ralph]

During my working years, I paid more than $130,000 to SS and medicare. My emplorer matched that......otherwise they could have paid me more.

In retirement now....age 70.....I still pay Fed income taxes, some even on the SS, local real estate taxes, and local sales taxes. IRA and 401K withdrawals. Plus all the other taxes such as fed gasoline taxes, alcohocol taxes, etc. IE....I pay plenty of taxes.

Am I a drain on society? Yet? Until I get back $260,000 plus some return....how can you say you support me in my old age?

Not all of us seniors suck from society! Plenty just like me.

And sure....I agree....medicare can be trimmed back some, maybe it's a little too easy to get some medical procedures done. SS can start a tad later for those of you will even live longer than me.

Every senior I know is willing to be part of the solution. We want you to also have a secure and healthy future as you age.

BTW....write your congressman....demand that they make some more cuts, close some tax loop holds....such as ones that prop up industries that no longer need help. There are cuts that can be made, and ways to increase revenues without sending us into another recession. Demand that our congressmen and senators work together and do this. Amen!

[schneiderrd]

I'm not saying that we need to cut all support. Just saying that because of our system & the way geriatrics turn out to vote, they control (and benefit from) a disproportionate share of government spending.

It's the same way that Iowa's disproportionate influence on presidential elections leads to ridiculous subsidies on corn based ethanol.

I think government spending should reflect the priorities of the 'people', and I don't pretend to know what exactly those priorities are or should be. But sooner or later, the people who are going to pay the bills are going to find fault with policies that aren't allocating 'public' resources to the most productive uses.

Dude, If it were not for the old timers who worked hard during their youth, there would not be any country. Who do you think built all of this? They contributed to and earned their retirement, so it is pay back time. A better place to look for savings is from the slackers who never contribute. I'd start with Congress.

[flydhest]

Dude, If it were not for the old timers who worked hard during their youth, there would not be any country. Who do you think built all of this? They contributed to and earned their retirement, so it is pay back time. A better place to look for savings is from the slackers who never contribute. I'd start with Congress.

I'd start with the voters.

[biker72]

During my working years, I paid more than $130,000 to SS and medicare. My emplorer matched that......otherwise they could have paid me more.

In retirement now....age 70.....I still pay Fed income taxes, some even on the SS, local real estate taxes, and local sales taxes. IRA and 401K withdrawals. Plus all the other taxes such as fed gasoline taxes, alcohocol taxes, etc. IE....I pay plenty of taxes.

Am I a drain on society? Yet? Until I get back $260,000 plus some return....how can you say you support me in my old age?

Not all of us seniors suck from society! Plenty just like me.

And sure....I agree....medicare can be trimmed back some, maybe it's a little too easy to get some medical procedures done. SS can start a tad later for those of you will even live longer than me.

Every senior I know is willing to be part of the solution. We want you to also have a secure and healthy future as you age.

BTW....write your congressman....demand that they make some more cuts, close some tax loop holds....such as ones that prop up industries that no longer need help. There are cuts that can be made, and ways to increase revenues without sending us into another recession. Demand that our congressmen and senators work together and do this. Amen!
+1
Thank you Ralph... :)
As a 73 year old retiree I'm finding it increasingly difficult to find doctors that will take a Medicare patient.

Back in 2007 I had a rather lengthy procedure done at a local hospital. As it turned out the anesthesiologist was a cyclist. We had a nice chat before the surgeons arrived. He billed Medicare around $1900. Medicare paid him $425.

[MattTuck]

Dude, If it were not for the old timers who worked hard during their youth, there would not be any country. Who do you think built all of this? They contributed to and earned their retirement, so it is pay back time. A better place to look for savings is from the slackers who never contribute. I'd start with Congress.


The 'old timers' working in their youth are the same as the young people working in their youth today, it's just that if we don't make changes now, the folks today will have literally nothing when they retire. When Social Security was started, the life expectancy of people in this country was 66 years old, retirement age of 65, it was never meant to be a 'retirement', it was a modest cash flow for those that had nothing, and hadn't saved enough for their retirement. It was never meant to be a retirement system.

Add to that, there's fewer workers today and going forward to pay into the system for the folks that are receiving benefits. So that's an issue.

As far as MediCARE, the average person puts in ~$100,000 in contributions into the system over their working life, and receives ~$300,000 in benefits.
So, it's a hard argument to make that people 'earned' their benefits.


I'm not insensitive to the plight of older Americans, I truly wish that everyone could enjoy a comfortable and healthy retirement... I really do. But at some point, we as a culture must accept the reality that the government cannot shoulder the responsibilities that it has created for itself in terms of taking care of our older population. It is sad, it means a lower standard of living for those folks, it means more burden on family, etc.

[Ralph]

Tuck.....Maybe some of what you say is already happening. People are mosly now responsible for their own retirement income. Very few companies, or even municipalities, offer new workers defined benefit plans. Most will offer some matching to 401K type plans to encourage people to save for themselves.

And unless you maxed out on SS wages while working, most Americans drawing SS aren't drawing the maximum payments either. Most retirees aren't collecting as much as some people think. Also....maybe putting some larger co-payments on medicare would reduce some frivolous claims. Lots can be done without destroying the system.

It's true the number of folks paying VS the number of folks receiving is out of balance. With longer life spands, that needs addressing IMHO. You are correct the original intent was for a lesser system.

I'm even in favor of a bill requiring the government to balance it's books in peace time....with say 10 years to get there. Begin paying down the debt like under Clinton. Maybe figure a way to also make some concessions in recession times. Don't want to tie Government's hand to work out of recessions like if on gold standard. Would still like to see balanced Federal budget requirement for most years.

[GregL]

People are mosly now responsible for their own retirement income. Very few companies, or even municipalities, offer new workers defined benefit plans. Most will offer some matching to 401K type plans to encourage people to save for themselves.

And herein lies one of the biggest problems: we US citizens are lousy at saving for our future. Multiple sources agree that we aren't putting enough away for our retirement. Just Google "average 401K savings" to find many articles from reputable news sources. A large percentage of our ever aging populus expects Social Security to bail them out. How do we get personal responsibility back into the common vernacular?!? As far as my retirement planning goes, I'm paying into Social Security to support my mother. I'm not expecting any for me or my wife...

-Greg

[1centaur]

we must make choices. we must fund some things and not fund others.

Why, isn't the house burning?

Quote from a political science major:

"Imagine your house is burning. You call the fire department but your call isn't answered because every firefighter in town is debating whether there will be enough water to fight fires over the next 10 years, even though water is plentiful right now. (Yes, there's a long-term problem.) One faction won't even allow the fire trucks out of the garage unless everyone agrees to cut water use. An agency that rates fire departments has just issued a downgrade, causing everyone to hoard water.

While all this squabbling continues, your house burns to the ground and the fire has now spread to your neighbors' homes. But because everyone is preoccupied with the wrong question (the long-term water supply) and the wrong solution (saving water now), there's no response. In the end, the town comes up with a plan for the water supply over the next decade, but it's irrelevant because the whole town has been turned to ashes."

Really, why think about tomorrow when your house is burning, and why not consider any decent-sounding idea a burning house (especially if it gets you votes)?

Sarcasm off: Yes, making choices is what grown-ups do, and some of those choices are about long-term vs. short-term realities. If all you do as a government is live for today you don't have a sustainable system, to use a current buzz word, and your village (it takes one) burns down, with certainty, over time. If more is promised than the economy can deliver over the long run, promises will be broken, whether through debt default or massive and destructive inflation. The family budget with a printing press analogy does not recognize that fact. Ultimately the printing press must reflect real underlying value, and that value comes in part from knowing the difference between a burning house (very rare and totally critical) and paying for anything that sounds good.

Debt/GDP now and in the future under current promises, vs. sustainable tax revenue given human nature/incentives, given what our debt can be funded for, understanding that wars and crises come up now and then. Can our voting population really understand all that when they vote? The combination of a necessary great (and empathetic) communicator and collective will to support the long-run seems unlikely to me. Inflation it is.

[rounder]

That is actually happening. A crisis appeared and Congress announced that they were going on vacation until school was back in session. The President is attending fund raisers. The stock market tanks and no one was minding the store. Sorry...lost my thought. I like serotta and kb with continental tires.

[Lifelover]

this is something i've been thinking a lot about lately. as a nation, we can't afford to do everything. (actually, we haven't been able to for quite awhile now.) we must make choices. we must fund some things and not fund others.

as our system now works, special interest groups of all stripes and pet projects will have their voices heard. they'll somehow get their thumbs on the scale and tilt the argument in their favor.

but how will regular people be heard? how could you actually take the temperature of, say, 250 or 275 million americans, to get a sense of what people really prioritize as important to them? as things they'd truly want their taxes spent on?

as now constituted, elections are frauds and shams; they are theatre put on by vested interests with only two choices, and both choices are beholden to the vested interests.

i have no answer but if google has any spare bandwidth, i wish they'd figure out how to let all american vote on a list of national priorities...vote in such a way that lobbyists couldn't cook the results...PACs couldn't pressure voters...and the digital ballot-box couldn't be stuffed by zealots on either extreme.

right now, washington is an insider game, untethered to our real concerns, and unaccountable to anyone without a checkbook.

how do we give 'average' american a voice again in what problems we tackle...and what problems we leave for other nations to, at long last, pull their fair weight on.

yo, google. get on that, would you? ;)

Do you really want average americans making policy or priority based on the limited info the get from the media? I don't question the average americans ability to perform a job they are versed in, I just question their judgement on subjects they have no real knowledge of.

I have no clue what kind of work you do/did but would you want the average american prioritizing you work day?

[1happygirl]

+1
Thank you Ralph... :)
As a 73 year old retiree I'm finding it increasingly difficult to find doctors that will take a Medicare patient.


yep. If we cut out the um let's see (see my other post) we wouldn't have to touch Medicare, SS, etc.
When you take your friends kids out on a boat with your kids and your boat capsizes, you will reach for your own kids first. You can only save so many. America needs to concentrate on its own stuff first. Just my opinion and I'm tired. If I'm having trouble believing all what's going on now, I can imagine my poor old parents are shaking their heads in disbelief now.

[Climb01742]

Do you really want average americans making policy or priority based on the limited info the get from the media? I don't question the average americans ability to perform a job they are versed in, I just question their judgement on subjects they have no real knowledge of.

I have no clue what kind of work you do/did but would you want the average american prioritizing you work day?

on one level, yes i do. you see, i believe in democracy.

every politician, of every ilk, is always claiming to 'speak for the american people.' to know 'what the average american' thinks, cares about and dreams for. i call BS. they know what their largest campaign contributors think, care about and dream of achieving without anyone noticing.

as america grapples with an era of limitations, i think it's important that the american people have a true voice in setting our priorities; that it not be left to a bidding war, as it now is, between well-funded PACs and lobbyists.

listening to many politicians_they_are the clueless ones. they mangle american history, they mange economic theory, they mangle understanding foreign cultures, they mangle science. whether their mangling is out of a willful distortion or stupidity hardly matters, does it?

i'm not advocating that policies or laws be put to a vote each and every time, because i do believe that implementation of broad priorities_is_better left to 'experts' (whoever the heck they are these days.) for example, i'd rather 1centaur or flydhest be making economic policy instead of me.

but i would like to know if americans favor job creation over debt reduction in the short-term; whether they favor spending a billion dollars a day in afghanistan or a billion dollars a month here on bridges and roads and schools; whether they would accept raising the age on SS and means testing it.

i know there is no magic bullet out there. but i do believe one of the, if not the greatest, canards in politics is..."i know i speak for the american people when i say..."

creating a way to know more clearly and accurately what americans really do care about, what our actual priorities are, is important i think. right now we have government by lobbyist and campaign dollars. we know what they care about. how about what we care about?

[jblande]

listening to many politicians_they_are the clueless ones. they mangle american history, they mange economic theory, they mangle understanding foreign cultures, they mangle science. whether their mangling is out of a willful distortion or stupidity hardly matters, does it?



thank you for saying this. i am deeply worried about the quality of public discourse in the united states.

this most recent cat fight might as well have been professional wrestling.

[skijoring]

...never mind...to the barricades comrades.

[93legendti]

Nowhere to Cut?

Immediately before the current recession, Washington spent $24,800 per household. Simply returning to that level (adjusted for inflation) would likely balance the budget by 2019 without any tax hikes.

The federal government made at least $98 billion in improper payments in 2009.

Washington spends $92 billion on corporate welfare (excluding TARP) versus $71 billion on homeland security.

Washington spends $25 billion annually maintaining unused or vacant federal properties.

Government auditors spent the past five years examining all federal programs and found that 22 percent of them—costing taxpayers a total of $123 billion annually—fail to show any positive impact on the populations they serve.

The Congressional Budget Office published a “Budget Options” series identifying more than $100 billion in potential spending cuts.
Because of overstaffing, the U.S. Postal Service selects 1,125 employees per day to sit in empty rooms. They are not allowed to work, read, play cards, watch television, or do anything. This costs $50 million annually.

Washington will spend $2.6 million training Chinese prostitutes to drink more responsibly on the job.

Stimulus dollars have been spent on mascot costumes, electric golf carts, and a university study examining how much alcohol college freshmen women require before agreeing to casual sex.

Examples from multiple Government Accountability Office (GAO) reports of wasteful duplication include 342 economic development programs; 130 programs serving the disabled; 130 programs serving at-risk youth; 90 early childhood development programs; 75 programs funding international education, cultural, and training exchange activities; and 72 safe water programs.

A GAO audit classified nearly half of all purchases on government credit cards as improper, fraudulent, or embezzled. Examples include gambling, mortgage payments, liquor, lingerie, iPods, Xboxes, jewelry, Internet dating services, and Hawaiian vacations. In one extraordinary example, the Postal Service spent $13,500 on one dinner at a Ruth’s Chris Steakhouse, including “over 200 appetizers and over $3,000 of alcohol, including more than 40 bottles of wine costing more than $50 each and brand-name liquor such as Courvoisier, Belvedere and Johnny Walker Gold.” The 81 guests consumed an average of $167 worth of food and drink apiece.

Improper or fraudulent Medicare spending now totals $47 billion annually—12.4 percent of its budget.

New York distributed $140 million in stimulus money into the individual accounts of families on welfare, yet neglected to mention it was intended for school supplies. Local ATMs were depleted, and much of the money was reportedly spent on “flat screen TV’s, iPods and video gaming systems” as well as “cigarettes and beer.”

Washington will spend $615,175 on an archive honoring the Grateful Dead.

Federal employees owe more than $3 billion in income taxes they failed to pay in 2008.

The Legal Services Corporation, which is supposed to provide legal services to the poor, has repeatedly ignored warnings to stop spending its money on alcohol. It also funds limousines, first-class airfare, and “death by Chocolate” pastries for its executives.

The Department of Energy spent nine years and $153 million on an obsolete cyber-security project that was supposed to safeguard America’s nuclear weapons information.

The stimulus set aside $350 million for a national broadband coverage map—even though one private firm stated it could create one for $3.5 million.
Fannie Mae—now backed up by taxpayers—paid $6.3 million in legal defense costs for ousted executives such as Franklin Raines. An additional $16.8 million was spent defending Fannie Mae’s regulators in litigation against the former executives.

The Census Bureau spent $2.5 million on Super Bowl ads, and on-air mentions by sportscasters.

New documents reveal that the Department of Homeland Security (DHS) lost 1,000 computers in 2008. Not to be outdone, Homeland Security officers lost nearly 200 guns in places like restaurant restrooms, convenience stores, and bowling alleys. Several of the guns ended up in the hands of criminals.

The State Department will spend $450,000 on art shows in Venice, Italy.

During a recent three-day conference, NASA spent $62,611 on “light refreshments” for its 317 attendees—$66 per day per person. NASA officials said such expensive snacks were needed to keep its officials from wandering away from the conference.

NASA spent $500 million constructing a 355-foot steel tower to launch a rocket that is now unlikely to ever be built.

The Congressional Research Service has confirmed that the new health care law may subsidize Viagra and other sexual performance drugs for convicted rapists and sex offenders.

Federal agencies are delinquent on nearly 20 percent of employee travel charge cards, costing taxpayers hundreds of millions of dollars annually.

The Securities and Exchange Commission spent $3.9 million rearranging desks and offices at its Washington, D.C., headquarters.

Over half of all farm subsidies go to commercial farms, which report average household incomes of $200,000.

A GAO audit found that 95 Pentagon weapons systems suffered from a combined $295 billion in cost overruns.

The refusal of many federal employees to fly coach costs taxpayers $146 million annually in flight upgrades.

Washington spent $126 million in 2009 on projects associated with the Kennedy family legacy in Massachusetts. Additionally, Senator John Kerry (D–MA) diverted $20 million from the 2010 defense budget to subsidize a new Edward M. Kennedy Institute.

The federal government owns more than 50,000 vacant homes.

The Federal Communications Commission spent $350,000 to sponsor NASCAR driver David Gilliland.

More than $13 billion in Iraq aid has been classified as wasted or stolen. Another $7.8 billion cannot be accounted for.

Washington has spent $3 billion re-sanding beaches—even as this new sand washes back into the ocean.

The Defense Department wasted $100 million on unused flight tickets and never bothered to collect refunds even though the tickets were refundable.

Washington spends $60,000 per hour shooting Air Force One photo-ops in front of national landmarks.

Congress has ignored efficiency recommendations from the Department of Health and Human Services that would save $9 billion annually.

Taxpayers are funding paintings of high-ranking government officials at a cost of up to $50,000 apiece.

The state of Washington sent $1 food stamp checks to 250,000 households in order to raise state caseload figures and trigger $43 million in additional federal funds.

The National Institutes of Health spends $1.3 million per month to rent a lab that it cannot use.

Congress recently spent $2.4 billion on 10 new jets that the Pentagon insists it does not need and will not use.

Medicare officials recently mailed $50 million in erroneous refunds to 230,000 Medicare recipients.

Audits showed $34 billion worth of Department of Homeland Security contracts contained significant waste, fraud, and abuse.


The Conservation Reserve program pays farmers $2 billion annually not to farm their land.

[skijoring]

"pay no attention to what our right hand is doing, but here in our left hand is a 6,000 dollar toilet seat"

...

[Ahneida Ride]

and let's not forget the actions of our nation's private central banking cartel.
16 Trillion with a T ... created outa thin air !

From Senator Bernie Sanders.

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3


The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

[Chance]

"pay no attention to what our right hand is doing, but here in our left hand is a 6,000 dollar toilet seat"

...
Time to amputate both hands? Power to stop spending already exists. Vote spenders out.

[Chance]

Inflation it is.
Did Fed statement suggest low inflation rate for next two years?

Seniors have more savings. Other than home value, does inflation dilute their life style more than that of younger working class?

[dekindy]

Yeah, except you/we have already spent the $260,000 + $45,000 (national debt per person) with no end in site.

During my working years, I paid more than $130,000 to SS and medicare. My emplorer matched that......otherwise they could have paid me more.

In retirement now....age 70.....I still pay Fed income taxes, some even on the SS, local real estate taxes, and local sales taxes. IRA and 401K withdrawals. Plus all the other taxes such as fed gasoline taxes, alcohocol taxes, etc. IE....I pay plenty of taxes.

Am I a drain on society? Yet? Until I get back $260,000 plus some return....how can you say you support me in my old age?

Not all of us seniors suck from society! Plenty just like me.

And sure....I agree....medicare can be trimmed back some, maybe it's a little too easy to get some medical procedures done. SS can start a tad later for those of you will even live longer than me.

Every senior I know is willing to be part of the solution. We want you to also have a secure and healthy future as you age.

BTW....write your congressman....demand that they make some more cuts, close some tax loop holds....such as ones that prop up industries that no longer need help. There are cuts that can be made, and ways to increase revenues without sending us into another recession. Demand that our congressmen and senators work together and do this. Amen!

[93legendti]

http://www.cbo.gov/doc.cfm?index=12212

In President Clinton’s last year of 2001, revenues were abnormally high at 19.5 percent of GDP as a result of the booming economy. Over the last four decades, federal revenues as share of GDP have fluctuated around about 18 percent of GDP...

Some people complain that the Bush tax cuts drained the Treasury, but note that revenues were 18.2 percent of GDP in 2006 and 18.5 percent in 2007, when the economy was growing and the Bush cuts were in place...

In sum, CBO projections reveal no shortage of revenues. The problem is on the spending side, as the red bars in the chart illustrate. As a result of the Bush/Obama spending boom, federal outlays soared from 18.2 under President Clinton to 24.1 percent this year. With no reforms to entitlement programs, outlays will be 33.9 percent of GDP by 2035, which is 86 percent higher than the Clinton level.http://wac.0873.edgecastcdn.net/800873/blog/wp-content/uploads/201106_blog_edwards231.jpg

[Ahneida Ride]

What is the definition of rich?

Let's say it's more then 250K per year ....

If you live in NYC .... well
Let's run some approx numbers
30% federal
7 % Social Security
10 % state
5 % NYC
7 % federal reserve note dilution tax
7 % sales tax ..

right there is 66% tax.... (assuming I can add correctly)

An apartment is 3K per month ...
parking a car is 500. (assuming you can afford a car)
a Saturday night date with a play and diner is 400.
and the list goes on ...

If you have kids .... you have to think about college ... 100K per kid.

[1happygirl]

What is the definition of rich?

Let's say it's more then 250K per year ....

If you live in NYC .... well
Let's run some approx numbers
30% federal
7 % Social Security
10 % state
5 % NYC
7 % federal reserve note dilution tax
7 % sales tax ..

right there is 66% tax.... (assuming I can add correctly)

An apartment is 3K per month ...
parking a car is 500. (assuming you can afford a car)
a Saturday night date with a play and diner is 400.
and the list goes on ...

If you have kids .... you have to think about college ... 100K per kid.

Yikes iiiiiiii eeeeeeee AR!!!!!
I had no idea, thanks. I wanted to live there some years ago but didn't want to have to work all the time to do it. How does one person afford it by themselves? Serious question? (I mean without kiddos)
Nice place to visit but......

[dekindy]

The marginal federal rate may be 30% or 28% but the average, percentage of income actually paid, is probably closer to 10-15%. I don't know anything about the state and local income taxes, whether progressive or flat, so someone else will have to address them.

What is the definition of rich?

Let's say it's more then 250K per year ....

If you live in NYC .... well
Let's run some approx numbers
30% federal
7 % Social Security
10 % state
5 % NYC
7 % federal reserve note dilution tax
7 % sales tax ..

right there is 66% tax.... (assuming I can add correctly)

An apartment is 3K per month ...
parking a car is 500. (assuming you can afford a car)
a Saturday night date with a play and diner is 400.
and the list goes on ...

If you have kids .... you have to think about college ... 100K per kid.

[goonster]

Nowhere to Cut?
It's been said often enough before, but you need to at least attribute the source of the long passages you cut and paste into the forum.

[veloduffer]

What is the definition of rich?

Let's say it's more then 250K per year ....

If you live in NYC .... well
Let's run some approx numbers
30% federal
7 % Social Security
10 % state
5 % NYC
7 % federal reserve note dilution tax
7 % sales tax ..

right there is 66% tax.... (assuming I can add correctly)

An apartment is 3K per month ...
parking a car is 500. (assuming you can afford a car)
a Saturday night date with a play and diner is 400.
and the list goes on ...

If you have kids .... you have to think about college ... 100K per kid.


Sales tax is 8.875% in NYC
You forgot the cost of car insurance in NYC. Add another $100-200 per month (depends which borough - Brooklyn is the worst).

And if you're lucky like me to work in NYC but commute from the 'burbs, add another $400-$550 per month for commutation costs.

[goonster]

If you live in NYC .... well
Let's run some approx numbers
30% federal
7 % Social Security
10 % state
5 % NYC
7 % federal reserve note dilution tax
7 % sales tax ..

right there is 66% tax.... (assuming I can add correctly)

It doesn't work that way, and if you pay taxes I would hope you'd know this.

Social security contributions are capped to somewhere around the first 100k income
Inflation is nowhere near 7% annual
Not all purchases (never mind the entire income) are subject to sales tax
You are not considering any exemptions, which are considerable for anyone who has a family or mortgage.

Your math is correct, but your accounting is poor.

[jimcav]

Nowhere to Cut?

A GAO audit classified nearly half of all purchases on government credit cards as improper, fraudulent, or embezzled. Examples include gambling, mortgage payments, liquor, lingerie, iPods, Xboxes, jewelry, Internet dating services, and Hawaiian vacations. In one extraordinary example, the Postal Service spent $13,500 on one dinner at a Ruth’s Chris Steakhouse, including “over 200 appetizers and over $3,000 of alcohol, including more than 40 bottles of wine costing more than $50 each and brand-name liquor such as Courvoisier, Belvedere and Johnny Walker Gold.” The 81 guests consumed an average of $167 worth of food and drink apiece.

I want to call BS on that, having been in the military these many years, and dealt with purchases and gov't travel cards and having had to justify and get approval for everything and knowing how both the travel and supply departments get audited, unless the rest of the "gov't" is operating under completely different rules, there is simply no way that is true. My guess is nearly all of that is going to hinge on "improper" ie you need to get 3 quotes from differnet vendors before purchasing, and they didn't, you are supposed to use prime vendors and not purchase direct from walmart, even though that may be faster, cheaper, etc--sometimes to get a job done such things are done, and will trigger an "improper" label. And I have seen some swanky command Christmas parties for example--which likely had a high bill--but what you don't see on an audit is all the fund raisers held year round to raise the money for that party...

anyway, not saying there is not waste all over--any time i see guys painting rocks on base i have to wonder about the cost of the paint and the time involved etc, but it would be nice to know where some of those facts came from for those of us who like to learn things.

jim

[SamIAm]

The idea of defining rich based on income is silly. Let's say I am rich at 250k a year. I may have a lifestyle that requires 250k. So if you raise my taxes, you force me to cut my lifestyle, assuming I am unwilling to engage in deficit spending. So the government is essentially requiring me to do what they cannot seem to do, make necessary cuts.


What is the definition of rich?

Let's say it's more then 250K per year ....

If you live in NYC .... well
Let's run some approx numbers
30% federal
7 % Social Security
10 % state
5 % NYC
7 % federal reserve note dilution tax
7 % sales tax ..

right there is 66% tax.... (assuming I can add correctly)

An apartment is 3K per month ...
parking a car is 500. (assuming you can afford a car)
a Saturday night date with a play and diner is 400.
and the list goes on ...

If you have kids .... you have to think about college ... 100K per kid.

[skijoring]

The idea of defining rich based on income is silly. Let's say I am rich at 250k a year. I may have a lifestyle that requires 250k. So if you raise my taxes, you force me to cut my lifestyle, assuming I am unwilling to engage in deficit spending. So the government is essentially requiring me to do what they cannot seem to do, make necessary cuts.

That's hilarious. Civilization costs money, some of which, yes, needs to be extracted as taxes. That battle, however, has already been won and now the new battle is entitlements.

Would you build your own roads, sidewalks, highways, water lines or is that a different line item in your lifestyle budget?

[goonster]

hold the phone--where is this from?

That is an excellent question!

A GAO audit classified nearly half of all purchases on government credit cards as improper, fraudulent, or embezzled

Sounds ludicrous to me too. Google will tell you where it came from, but I have yet to see where the GAO said any such thing.

[zap]

That's hilarious. Civilization costs money, some of which, yes, needs to be extracted as taxes. That battle, however, has already been won and now the new battle is entitlements.

Would you build your own roads, sidewalks, highways, water lines or is that a different line item in your lifestyle budget?

Absolutely. The earnings (side walk would be a freebie) would be most excellent. I'm sure I and other business people could cut costs by 75% and improve quality.

[Aaron O]

Not the right forum.

[skijoring]

Absolutely. The earnings (side walk would be a freebie) would be most excellent. I'm sure I and other business people could cut costs by 75% and improve quality.

Who is John Galt?

[Aaron O]

Who is John Galt?

A character written by a doofus who people take far too seriously.

[SamIAm]

Who is John Galt?

You cannot possibly believe the government operates with any degree of efficiency.

[mgd]

You cannot possibly believe the government operates with any degree of efficiency.

no, of course not. it only operates with any degree of efficiency when compared directly to the private sector.

[JMerring]

A character written by a doofus who people take far too seriously.

And who people mistakenly believe was actually a capitalist (the author, that is).

[Aaron O]

You cannot possibly believe private industry does better.

[mgd]

thank you for saying this. i am deeply worried about the quality of public discourse in the united states.

this most recent cat fight might as well have been professional wrestling.

professional wrestling: completely scripted; atrocious acting; preplanned outcome.

[93legendti]

http://www.heritage.org/Research/Commentary/2009/11/Congressional-Spenders-Ignore-Deepening-Government-Waste

http://www.heritage.org/Research/Reports/2010/10/How-to-Cut-343-Billion-from-the-Federal-Budget

Appendix

Additional Reading on Spending Recommendations

1. Congressional Budget Office, Budget Options, Vol. 1, Health Care, December 2008, at http://www.cbo.gov/doc.cfm?index=9925 (October 19, 2010).

2. Congressional Budget Office, Budget Options, Vol. 2, August 2009, at http://www.cbo.gov/doc.cfm?index=10294 (October 19, 2010).

3. Brian M. Riedl, “50 Examples of Government Waste,” Heritage Foundation WebMemo No. 2642, October 6, 2009, at http://www.heritage.org/Research/Reports/2009/10/50-Examples-of-Government-Waste.

4. Republican Study Committee, “A Balanced Budget for America,” May 2010, at http://rsc.tomprice.house.gov/UploadedFiles/RSC_FY11_BUDGET_BOOKLET—FINAL.pdf (October 19, 2010).

5. Paul Weinstein Jr. and Katie McMinn Campbell, “Return to Fiscal Responsibility II,” Progressive Policy Institute Policy Report, April 2007, at http://www.ppionline.org/documents/Fiscal_Responsibility_04302007.pdf (October 19, 2010).

6. Scott A. Hodge, ed., Balancing America’s Budget (Washington, D.C.: The Heritage Foundation, 1997).

7. Brian M. Riedl, “How to Get Federal Spending Under Control,” Heritage Foundation Backgrounder No. 1733, March 10, 2004, at http://www.heritage.org/Research/Reports/2004/03/How-to-Get-Federal-Spending-Under-Control.

8. David B. Muhlhausen, “Why Would COPS 2.0 Succeed When COPS 1.0 Failed?” Heritage Foundation WebMemo No. 1903, April 28, 2008, at http://www.heritage.org/Research/Reports/2008/04/Why-Would-COPS-20-Succeed-When-COPS-10-Failed.

9. David B. Muhlhausen, “Congress Spends Billions on Ineffective Job-Training Programs,” Heritage Foundation Backgrounder No. 1597, October 1, 2002, at http://www.heritage.org/Research/Reports/2002/10/Congress-Spends-Billions-on-Ineffective-Job-Training-Programs.

10. Robert E. Moffit, “The Prospects for Ending Obamacare: Learning from Health Policy History,” Heritage Foundation Backgrounder No. 2424, June 21, 2010, at http://www.heritage.org/Research/Reports/2010/06/The-Prospects-for-Ending-Obamacare-Learning-from-Health-Policy-History.

11. Matt A. Mayer, “An Analysis of Federal, State, and Local Homeland Security Budgets,” Heritage Foundation Center for Data Analysis Report No. CDA09–01, March 9, 2009, at http://www.heritage.org/Research/Reports/2009/03/An-Analysis-of-Federal-State-and-Local-Homeland-Security-Budgets.

12. Ronald Utt, “Will a Bigger Role for States Improve Transportation Policy Performance?” in Wendell Cox, Alan Pisarski, and Ronald D. Utt, eds., 21st Century Highways (Washington, D.C.: The Heritage Foundation, 2005).

[93legendti]

Show references in this report
[1]U.S. Department of the Treasury, “Final Monthly Treasury Statement of Receipts and Outlays of the United States Government: For Fiscal Year 2010 Through September 30, 2010, and Other Periods,” October 2010, at http://www.fms.treas.gov/mts/mts0910.pdf (October 27, 2010). Each year’s deficits are a record in nominal dollars and higher than any year since World War II as a share of the economy.

[2]See Brian M. Riedl, “The Three Biggest Myths About Tax Cuts and the Budget Deficit,” Heritage Foundation Backgrounder No. 2423, June 21, 2010, at http://www.heritage.org/Research/Reports/2010/06/The-Three-Biggest-Myths-About-Tax-Cuts-and-the-Budget-Deficit. Absent a return to peace and prosperity, the projected deficit for FY 2020 would be higher. The deficits for FY 2009 and FY 2010 reflect the net result of increased federal spending, including war costs, and decreased federal revenues, including decreases due to reduced national economic activity.

[3]See Riedl, “The Three Biggest Myths About Tax Cuts and the Budget Deficit.”

[4]Cuts to spending will not harm economic recovery. Harvard economist Alberto Alesina recently showed that any effects of government spending would actually reduce economic growth. Alberto Alesina and Silvia Ardagna, “Large Changes in Fiscal Policy: Taxes Versus Spending,” revised October 2009, at http://www.economics.harvard.edu/faculty/alesina/files/Large%2Bchanges%2Bin%2Bfiscal%2Bpolicy_October_200 9.pdf (October 27, 2010). See also Daniel J. Mitchell, “The Impact of Government Spending on Economic Growth,” Heritage Foundation Backgrounder No. 1831, March 15, 2005, at http://www.heritage.org/research/budget/bg1831.cfm, and Brian M. Riedl, “Why Government Spending Does Not Stimulate Economic Growth: Answering the Critics,” Heritage Foundation Backgrounder No. 2354, January 5, 2010, at http://www.heritage.org/Research/Economy/bg2354.cfm.

[5] Brian M. Riedl, “50 Examples of Government Waste,” Heritage Foundation WebMemo No. 2642, October 6, 2009, at http://www.heritage.org/Research/Budget/wm2642.cfm.

[6]Public Law 111–148, as amended by Public Law 111–152.

[goonster]

Brian M. Riedl, “50 Examples of Government Waste,” Heritage Foundation WebMemo No. 2642, October 6, 2009, at http://www.heritage.org/Research/Reports/2009/10/50-Examples-of-Government-Waste
Yep, that is the source of that line about the gov't credit cards which, at best, demonstrates the author's inability to understand and paraphrase an executive summary. But really, it's a lie.

[mgd]

really? that's the best you can do? really?

[forrestw]

If the US Government was a family, they would be making $58,000 a year. They spend $75,000 a year and are $327,000 in credit card debt.

They are currently proposing "BIG" spending cuts to reduce their spending to $72,000 a year.

These are proportions of the federal budget and debt that I can actually understand. But what is a few trillion amongst friends.
Ohh thanks for explaining to this dumb layperson.

As I read the numbers you're talking about a family with 58k of income and a 270k mortgage. Even if *your* figures are the correct ones a 327k mortgage (at far better rates than you or I pay for a mortgage) isn't unreasonable.

In terms of recent history debt as a fraction of GDP the US is currently sitting at a little over half of the debt level we took on during WWII, which took about 12 years to bring down to 'normal' levels. Qualitatively of course we spent a good deal of this money on a war that was based on a lie.

Today as far as I can see the only people who continue to subscribe to the Ayn Rand 'philopsophy' that instigated the economic policies largely responsible for the current financial mess are the so called 'tea party' and possibly some libertarians.

Lastly, deregulated investment banks leveraged 30:1 look a lot to me like the investors operating on margin in '29.

We will come through this, the level of political vitriol is aimed at scaring people, nothing more or less.

Can we go back to talking about bikes now? Can some mod whack this thread?

[Chance]

That's hilarious. Civilization costs money, some of which, yes, needs to be extracted as taxes. That battle, however, has already been won and now the new battle is entitlements.

Would you build your own roads, sidewalks, highways, water lines or is that a different line item in your lifestyle budget?
Compromise is needed. Government has a strong role to play as long as it can remain focused on big picture of improving standard of living.

When Floridians pay for Colorado sidewalks, and Coloradans for Florida sidewalks, chances are both will be overbuilt. Decentralization of many government functions (not all) is more cost efficient. Left to themselves, Coloradans may build ski lifts and Floridians beach cabanas instead. When paying directly for themselves sidewalks may not seem as necessary. Defining appropriate role of federal government is a must.

Horse trading in Washington over what should be local issues will lead to sidewalks, ski lifts, beach cabanas, and more debt.

[1centaur]

Did Fed statement suggest low inflation rate for next two years?

Seniors have more savings. Other than home value, does inflation dilute their life style more than that of younger working class?

Both inflation and the deficit/entitlement debate must be engaged in well before we get to a tipping point or the consequences will be much more dire. For example, better to raise eligibility on SS to 75 starting 25 years from now than next year so that savers can adjust their expectations. I expect inflation to be politically easier than giving up stuff because it's less visibly targeted. Print enough money and debts can technically be repaid even if economic growth does not support the real value of such repayment.

Inflation is often viewed as a tax on savers, particularly old people on fixed incomes. Young people theoretically can get wage increases with inflation and invest in stocks, which can help. The COLA on SS reflects the importance of inflation for that program. Note that inflation will not solve SS because of COLAs, so program limitations (age; means) are needed there. Repaying Treasuries with inflated dollars works to stave off default, but with inflation comes higher rates on Treasuries, and that becomes a very difficult juggling act as debt/GDP rises - go too far and even money printing can't stop default. Better to get debt/GDP down too early rather than too late.

As I see the basic debate to be had in Washington over the next decade, it is this: entitlements will grow faster than any GDP-encouraging tax rates can afford thanks to demographics, better health care, and ability of our mature economy to grow. Raising taxes on the rich to Clinton levels or beyond, even if that had no effect on GDP, would not solve that problem. Minor cuts and Clinton+ tax rates will not solve that problem with reasonable GDP growth assumptions. Redefining rich to $100k might not help much. GDP growth is by far the most powerful force for funding government, but we don't face great growth rates. So we have to work through some combo of taxes, very major cuts, inflation (which by the way raises taxable income into higher tax brackets), and GDP growth to get to a sustainable program. Cuts alone could fix it, which is not true of taxes, but that won't happen politically. This is a very tough balancing act that will be accompanied by misleading sound bites from both sides, incessantly. We start this process without even a clear and agreed on arithmetic understanding of the problem within the voting population. It will be gruesome because most people will have to give up something they earned or expect to get and they won't be sure the math has not been skewed against them for political reasons. Resentment city.

[skijoring]

Both inflation and the deficit/entitlement debate must be engaged in well before we get to a tipping point or the consequences will be much more dire. For example, better to raise eligibility on SS to 75 starting 25 years from now than next year so that savers can adjust their expectations. I expect inflation to be politically easier than giving up stuff because it's less visibly targeted. Print enough money and debts can technically be repaid even if economic growth does not support the real value of such repayment.

Inflation is often viewed as a tax on savers, particularly old people on fixed incomes. Young people theoretically can get wage increases with inflation and invest in stocks, which can help. The COLA on SS reflects the importance of inflation for that program. Note that inflation will not solve SS because of COLAs, so program limitations (age; means) are needed there. Repaying Treasuries with inflated dollars works to stave off default, but with inflation comes higher rates on Treasuries, and that becomes a very difficult juggling act as debt/GDP rises - go too far and even money printing can't stop default. Better to get debt/GDP down too early rather than too late.

As I see the basic debate to be had in Washington over the next decade, it is this: entitlements will grow faster than any GDP-encouraging tax rates can afford thanks to demographics, better health care, and ability of our mature economy to grow. Raising taxes on the rich to Clinton levels or beyond, even if that had no effect on GDP, would not solve that problem. Minor cuts and Clinton+ tax rates will not solve that problem with reasonable GDP growth assumptions. Redefining rich to $100k might not help much. GDP growth is by far the most powerful force for funding government, but we don't face great growth rates. So we have to work through some combo of taxes, very major cuts, inflation (which by the way raises taxable income into higher tax brackets), and GDP growth to get to a sustainable program. Cuts alone could fix it, which is not true of taxes, but that won't happen politically. This is a very tough balancing act that will be accompanied by misleading sound bites from both sides, incessantly. We start this process without even a clear and agreed on arithmetic understanding of the problem within the voting population. It will be gruesome because most people will have to give up something they earned or expect to get and they won't be sure the math has not been skewed against them for political reasons. Resentment city.

LOL at 'savers' - good luck saving at ZIRP.

It's the Wall/Broad roulette wheel for all.

This thread needs to be nuked(like my entitlements). :) ;)

[93legendti]

You cannot possibly believe the government operates with any degree of efficiency.
+1

Anyone remember "shovel ready projects"???

http://www.cbsnews.com/8301-503544_162-20019468-503544.html

Obama: "No Such Thing as Shovel-Ready Projects"

With unemployment hovering near 10 percent nearly two years after President Obama signed his economic stimulus package, Mr. Obama is acknowledging that, despite his campaign promises, "there's no such thing as shovel-ready projects."
The president gave that remark in an hour-long interview with the New York Times.

...When the president campaigned for the stimulus package at the start of his presidency, he and others in his administration repeatedly insisted the investments would go to "shovel-ready" projects -- projects that would put people to work right away. As recently as August, however, local governments were still facing delays spending the money they were allocated from the stimulus, CBS News Correspondent Nancy Cordes reported...

[veloduffer]

+1

Anyone remember "shovel ready projects"???

http://www.cbsnews.com/8301-503544_162-20019468-503544.html

Obama: "No Such Thing as Shovel-Ready Projects"

With unemployment hovering near 10 percent nearly two years after President Obama signed his economic stimulus package, Mr. Obama is acknowledging that, despite his campaign promises, "there's no such thing as shovel-ready projects."
The president gave that remark in an hour-long interview with the New York Times.

...When the president campaigned for the stimulus package at the start of his presidency, he and others in his administration repeatedly insisted the investments would go to "shovel-ready" projects -- projects that would put people to work right away. As recently as August, however, local governments were still facing delays spending the money they were allocated from the stimulus, CBS News Correspondent Nancy Cordes reported...

That is true - there are no shovel ready projects. Any projects currently being performed were approved and funded a couple of years ago. Between permits, designs, bidding, obtaining surety, etc., it takes a couple of years before the project gets off the ground.

Using construction projects as a means of stimulus seems ineffective in an services-based economy. It only targets a select portion of the labor market, and I don't think the projects bring any economic uplift to an area.

[Ralph]

Who is John Galt?

I know. First read that book in the 60's.

[hookookadoo]

Change that $327,000 in credit card debt to $327,000 in various loans and mortgages with an average interest rate of less than 2%. Add to that the fact that your "family" can increase its income any time it wishes, and that doesn't look so bad. In fact, it looks, as Obama said recently, "eminently solvable".


If you have a buddy in Greece ask how well the "we can tax our way out of this" and "at 2% interest who cares how much you borrow" thesis worked out.

[JMerring]

If you have a buddy in Greece ask how well the "we can tax our way out of this" and "at 2% interest who cares how much you borrow" thesis worked out.

We aren't Greece. However, inasmuch as Greece also was once a great empire, it looks like one day we will be.

[oldpotatoe]

Thread lock in 3... 2... 1...

I'll make some observations. we spent 5 times as much on senior citizens (that contribute very little productive energy to the economy) as we do on children (that both literally and figuratively are the future, but also can't vote).

Taking on debt to invest in productive assets (ie. improving infrastructure so more commerce can take place) is generally a 'good' idea. taking on debt to pay operating expenses not covered by cash flows is generally a 'bad' idea.

Problem is primarily related to the fact that in elected officials' eyes, donors are more important to being elected than the constituents they are supposed to represent. It's a perverse system, and now that system has created a monster.

Since I am older(60) and you are younger, how about a 'balanced' approach? You know, entitlement reform, real reform and a fix to the tax code that will increase revenues. No that doesn't mean the people in NYC making $250,000 per year will be put onto the streets and it doesn't mean Grandma will be living in her 1978 Buick.

But when repubs state all they want for Xmas is a one term president and the dems say no entitlement reform, ever...well, it didn't happen, ain't gonna happen.

In January of 2013 we'll all be forced to say Christian prayers and fast to fix the economy, add more $ to the defense budget, remove ALL regulations on everything...watch to see what the 'free market' can do and then we will see real anarchy..gonna be interesting...I just cleaned my shotgun.

The 'average' US citizen will get exactly what they deserve, at least for 4 years anyway.

[zap]

snip

In January of 2013 we'll all be forced to say Christian prayers

As it currently stands plus one more..........the trend will be broken.

[93legendti]

If you have a buddy in Greece ask how well the "we can tax our way out of this" and "at 2% interest who cares how much you borrow" thesis worked out.

Same with the UK...unemployment benefits for life, "free healthcare". BUT they have 50% income tax on top earners, 42.5% dividend tax, 18-28% capital gains tax, 50% savings tax and 20% VAT tax-and they are broke.

http://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom#Income_tax.

Anyway, we would never raise taxes now. The President said in July 2009 and December 2010 that raising taxes in a recession would hurt the economy...

[Kevan]

Really? All of'm do? Would hitting them a small percentage more really stop their business drive and spending habits?

Frankly, it frosts me the considerable incomes some people get for batting a ball, killing villains in 3D, sucking on market fluctuations, or by getting the board to agree to a golden parachute just before the plane begins its nose dive. We all end up playing for their jollies. But let's not tax them, because they create jobs.

[93legendti]

Really? All of'm do? Would hitting them a small percentage more really stop their business drive and spending habits?

Frankly, it frosts me the considerable incomes some people get for batting a ball, killing villains in 3D, sucking on market fluctuations, or by getting the board to agree to a golden parachute just before the plane begins its nose dive. We all end up playing for their jollies. But let's not tax them, because they create jobs.
http://www.usatoday.com/news/opinion/editorials/2010-04-16-editorial16_ST_N.htmhttp://i.usatoday.net/news/graphics/2010/0415-editgrf16/editgrf16.jpg

The news came just in time to surprise and anger taxpayers sweating to get their 1040s done by Thursday's deadline: Almost half of individuals and households owe no taxes for 2009. Could that be true?

Contrary to what you might have heard on talk radio or TV, it's not quite that simple. What's true is that the Tax Policy Center, a well-regarded think tank, calculated that 47% of Americans would owe no federal income taxes for 2009, up from the usual 38% who typically owe no income tax on April 15. ..

So they're paying taxes, but the fact that 47% pay no federal income tax is nonetheless disturbing — not for what it says about the non-payers but for what it says about the nation's broken tax system and how hard it will be to fix it.

~1/2 of all Americans pay no federal income tax-and they aren't the "rich". That's the definition of "unfair".

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.

[SamIAm]

Really? All of'm do? Would hitting them a small percentage more really stop their business drive and spending habits?

Frankly, it frosts me the considerable incomes some people get for batting a ball, killing villains in 3D, sucking on market fluctuations, or by getting the board to agree to a golden parachute just before the plane begins its nose dive. We all end up playing for their jollies. But let's not tax them, because they create jobs.

This stuff is fluid. Back in 2007, there was a local company here that was in Chapter 11, moving quickly to 7. I knew some people that worked there and they convinced me that the product was good, but the management was not.

I stepped in and bought that company with my hard earned money, more than 50% of everything I had at the time. I added working capital, jobs, products etc. Today, in addition to the 25 jobs, that were saved at the time of purchase, we have added 20 more and bought a new facility. Things are good for me and for my employees.

Now at the time, I didn't base this decision on existing tax code. I mean if my nominal rate was +/- a percentage point or two, it would not have changed my decision. But the business climate felt more favorable then than it does now. I know its an intangible, but I would not have made the same decision in today's climate. It just doesn't feel the same. In 2007, I figured the upside was my reward for risking half of everything I had, but in 2011, I just see outstretched hands inflamed by class warfare rhetoric. I see endless regulations and government imposed requirements about how to run my business from people who just don't get it.

To quote Bernie Marcus of Home Depot:

"Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we'd tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It's become stifling."

So no, a percentage point or 2 wouldn't matter, but an anti-business climate does.

The other thing that gets missed is the accumulated effects of all the efforts to soak the "rich". Higher tax rates + Phased out Schedule A deductions + Exclusion from Roths etc. etc. Then add in the initiatives to remove the income cap on SS payments while not increasing the ultimate SS payout. Add in the real probability of means testing for SS and Medicare, programs and you have just hung another 6+% tax on for good measure.

It all just seems too much sometimes.

[CunegoFan]

Who is John Galt?
John Galt and his followers turned out to be moochers.

[flydhest]

add in payroll taxes and recompute. add in state income taxes and recompute. Those numbers are likely completely accurate, but are intentionally misleading.

http://www.usatoday.com/news/opinion/editorials/2010-04-16-editorial16_ST_N.htmhttp://i.usatoday.net/news/graphics/2010/0415-editgrf16/editgrf16.jpg

The news came just in time to surprise and anger taxpayers sweating to get their 1040s done by Thursday's deadline: Almost half of individuals and households owe no taxes for 2009. Could that be true?

Contrary to what you might have heard on talk radio or TV, it's not quite that simple. What's true is that the Tax Policy Center, a well-regarded think tank, calculated that 47% of Americans would owe no federal income taxes for 2009, up from the usual 38% who typically owe no income tax on April 15. ..

So they're paying taxes, but the fact that 47% pay no federal income tax is nonetheless disturbing — not for what it says about the non-payers but for what it says about the nation's broken tax system and how hard it will be to fix it.

~1/2 of all Americans pay no federal income tax-and they aren't the "rich". That's the definition of "unfair".

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.
The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment.

"We have 50 percent of people who are getting something for nothing," said Curtis Dubay, senior tax policy analyst at the Heritage Foundation.

[goonster]

I know its an intangible, but I would not have made the same decision in today's climate. It just doesn't feel the same. In 2007, I figured the upside was my reward for risking half of everything I had, but in 2011, I just see outstretched hands inflamed by class warfare rhetoric. I see endless regulations and government imposed requirements about how to run my business from people who just don't get it.
I sympathize with this. I really do. No matter where we go from here, the U.S. has to encourage entrepeneurship and promote healthy growth.

But this talk of intangibles seems a bit overwrought. Are these endless regulations and impositions something new since 2007 that you can enumerate? What, specifically, in terms of public policy, other than anxiety and rhetoric, makes this a business-unfriendly climate today?

'Cause talk like "50% of the population are getting something they are not paying for" sounds like class warfare to me too . . .

[93legendti]

add in payroll taxes and recompute. add in state income taxes and recompute. Those numbers are likely completely accurate, but are intentionally misleading.
u can add a lot of things...

BUT, if the discussion is federal income taxes paid, the graph seems neutral. It was from USA Today, not really known as a conservative paper, afaik. Why would USA Today intentionally mislead?

[93legendti]

I sympathize with this. I really do. No matter where we go from here, the U.S. has to encourage entrepeneurship and promote healthy growth.

But this talk of intangibles seems a bit overwrought. Are these endless regulations and impositions something new since 2007 that you can enumerate? What, specifically, in terms of public policy, other than anxiety and rhetoric, makes this a business-unfriendly climate today?

'Cause talk like "50% of the population are getting something they are not paying for" sounds like class warfare to me too . . .
http://newsbusters.org/blogs/brad-wilmouth/2011/01/20/cbs-highlights-negative-impact-federal-regulations-small-businesses

Below is a complete transcript of the report from the Wednesday, January 19, CBS Evening News :

KATIE COURIC: For a small business owner, they’re a huge pain in the neck and the bottom line - page after page of government rules and regulations. Now, President Obama is ordering a top to bottom review, and Dean Reynolds reports many business owners are saying it’s about time.

DEAN REYNOLDS: At Red Hen Bread near Chicago, owner Robert Paqueti says he’s seen regulatory reform come and go.

ROBERT PAQUETI: The end result tends to be more government, more regulations, more cost to the business owner.

REYNOLDS: ...According to a Small Business Administration study last year, federal regulations cost companies with fewer than 20 workers an average of $10,585 per worker, compared to $7,755 an employee for large firms.

http://www.usnews.com/opinion/blogs/peter-roff/2011/04/12/study-confirms-cutting-federal-regulations-lowers-unemployment

In Regulatory Expenditures, Economic Growth and Jobs: An Empirical Study, the center finds that reducing the size of the federal regulatory budget by even modest amounts will have significant positive effects on both GDP and private sector growth.

“In particular,” the group says, “even a small 5 percent reduction in the regulatory budget (about $2.8 billion) would result in about $75 billion in expanded private-sector GDP each year, with an increase in employment by 1.2 million jobs annually.”

“On average,” the Phoenix Center says, “eliminating the job of a single regulator grows the American economy by $6.2 million and nearly 100 private sector jobs annually. Conversely, each million dollar increase in the regulatory budget costs the economy 420 private sector jobs.” [Check out cartoons on the economy.]

“Our statistical analysis of historical data indicates that federal expenditures on regulatory activity have a significant impact on the size of the private-sector economy and private-sector employment,” says Dr. George S. Ford, chief economist of the Phoenix Center. “While the entire federal budget must be cut to address the deficit problem, the evidence indicates that reductions in the overall federal regulatory budget may substantially impact the growth of economic output and employment.”

[flydhest]

u can add a lot of things...

BUT, if the discussion is federal income taxes paid, the graph seems neutral. It was from USA Today, not really known as a conservative paper, afaik. Why would USA Today intentionally mislead?

You are right. My only point was that those numbers are intentionally inflammatory and exaggerate the point. The basic story doesn't change--higher income people in this country pay more on average than lower income people. It just seems that one can make the point in an intellectually honest way without exaggerating things by selectively quoting statistics.

[93legendti]

You are right. My only point was that those numbers are intentionally inflammatory and exaggerate the point. The basic story doesn't change--higher income people in this country pay more on average than lower income people. It just seems that one can make the point in an intellectually honest way without exaggerating things by selectively quoting statistics.
I don't agree. I don't see the exaggeration or dishonesty.
The issue is the federal deficit/US debt, at least US Debt is in the name of the thread.
First, how do you compute all those items to compare? Every state has different tax rates.
Second, how do state income taxes enter into a discussion on federal income taxes paid?
Third, the top earners and fed income tax payors also pay state income tax, etc.

If the issue is revenues collected via fed income tax and people say "the rich need to pay more and start paying their fair share", USA Today's article and graph seems to counter that (what I would describe as a) false argument.

If you know of a study comparing the total amount of all taxes we pay, i.e. fed and state income taxes, payroll taxes, sales taxes, estate taxes, property taxes, etc., I'd love to read it.

[flydhest]

I don't agree. I don't see the exaggeration or dishonesty.
The issue is the federal deficit/US debt, at least US Debt is in the name of the thread.
First, how do you compute all those items to compare? Every state has different tax rates.
Second, how do state income taxes enter into a discussion on federal income taxes paid?
Third, the top earners and fed income tax payors also pay state income tax, etc.

If the issue is revenues collected via fed income tax and people say "the rich need to pay more and start paying their fair share", USA Today's article and graph seems to counter that (what I would describe as a) false argument.

If you know of a study comparing the total amount of all taxes we pay, i.e. fed and state income taxes, payroll taxes, sales taxes, estate taxes, property taxes, etc., I'd love to read it.


For the first point, the rate doesn't matter as much as it seemed the bottom line was that the dollars paid by the higher incomes is significantly higher than that paid by lower incomes. Regardless, the data exist to present the same statistics you cite.

For your point about revenues, I think your are making my point about payroll taxes. Those are taxes like any other in the way they affect the government's cash position and need to borrow. It is a federal tax, so it is directly comparable.

My real point, however, is not to argue with the assertion that the higher incomes do (do not) pay their fair share. My only point is that political debate in this country is poor and it is enflamed by people (on both sides of the argument) intentionally or otherwise using statistics or "facts" somewhat out of context to make a point, but with exaggeration. In this case, I was simply offering that the point that (I think) you want to make, that the higher incomes pay a lot more, is borne out without having to resort to what everyone in the policy debate knows to be intentionally contrived statistics. Everyone in the policy debate knows this and rolls their eyes when the issue comes up. What bugs me, I guess, is not the argument (which I think is a valid position to hold) but the way that it gets made undermines useful debate.

[verticaldoug]

(this is old, but thought I'd post it since we are now discussing jobs, regulations and the gov. Btw, I am amazed the thread is still going strong. I guess after last week, we are no longer neither Donkeys nor Elephants but just Americans)

The Objective Standard Blog

Monday, May 15, 2006
The Little Dictators

Posted by John David Lewis at 3:49 pm

Little DictatorAmerica is the land in which productive individuals were largely set free of the coercive power of the government. The result was the most prosperous nation the world has ever seen. But, over the past two generations, our freedom has been subordinated, in myriad ways, to the “Little Dictators” among us. The language of despotism is proper to them, for they wield the force of the government and demand obedience to their commands. To disobey them is to risk loss of career, property, and even life.

Who are the Little Dictators? Here are some real examples I have known; you can probably think of others. The local building inspector is one; he decides whether I can live year-round in the cottage I bought. Others include the fire inspector who decides whether a small day-care center—barely able to stay open—has to spend $10,000 for a fire door to cover a residential-type kitchen stove; the planning commission that decides whether I can build a house on my lot; the bureaucrat who collects money for permission to drive a car; the health inspector who says he is not sure whether he will allow a house to be built in this part of town; the zoning board that decides a restaurant is OK on this lot, but not on that one.

Their names are friendly; their power immense. One I knew, “Jim,” had final say over whether a 42-story office building in a major city could open. Another, “Marty,” said he did not care that his failure to read a blueprint had cost a small business $10,000—”that don’t matter” were his words. Another, an inspector named “CJ” (the initials have been changed to protect his victims) was asked whether building requirements had changed “in his town”; he said, “I haven’t decided. I’ll let you know.” Another, “Frank,” showed up smelly and unshaven at the final inspection of a new high-tech manufacturing plant, and delayed its opening for three days pending a test of the fire alarm system’s batteries.

Some personalize everything. “I ain’t gonna allow it,” I heard one decree, as he told a contractor to tear down a stone chimney and start over because the hearth was an inch too narrow. Another told me, “I ain’t lettin’ no more cottages be converted to year-round use. There’s too many now,” as he slapped a red tag on my neighbor’s door. Once I was doing a project at a very remote site, which took hours to get to, including a boat trip. An offical said, to my face, that he’d require our technicians to return as often as he saw fit: “Not everyone can work in my town.” Another made similar demands at a major state university; his son was our competitor, and had lost the bid.

These Little Dictators have the power of government guns to enforce their decisions. To avoid their wrath, a productive individual must suppress his rational judgment, and go by the rules they enforce. They are enemies of independent thought and comrades of conformity. Their whims and their rules coercively substitute for reality in the minds of their victims.

Americans should be up in arms about this tyranny in their midst. But they are not. Many have come to see the world as the Little Dictators wish it to be. Without the security of their decrees, many people would feel dread at the thought of making their own decisions. But this is dictatorship—the dictatorship of petty bureaucrats for sure, but dictatorship nonetheless—and it is growing by leaps and bounds. When Americans regain their understanding of liberty, they will feel a proper sense of outrage against these tin-badge despots, and the legislatures that empower them. But, first they must regain that understanding.

[SEABREEZE]

My layman terms how things are:

This is a story about 4 people named Everybody,Somebody Anybody & Nobody.There was an important job to be done and Everybody was sure Somebody would do it. Anybody could have done it but Nobody did. Everybody got angry about that, because it was Somebodys job. Everybody thought Anybody could do it, but Nobody realiaed that Everybody wouldn't do it. So Everybody blamed Somebody when Nobody did what Anybody could have done.

[93legendti]

For the first point, the rate doesn't matter as much as it seemed the bottom line was that the dollars paid by the higher incomes is significantly higher than that paid by lower incomes. Regardless, the data exist to present the same statistics you cite.

For your point about revenues, I think your are making my point about payroll taxes. Those are taxes like any other in the way they affect the government's cash position and need to borrow. It is a federal tax, so it is directly comparable.

My real point, however, is not to argue with the assertion that the higher incomes do (do not) pay their fair share. My only point is that political debate in this country is poor and it is enflamed by people (on both sides of the argument) intentionally or otherwise using statistics or "facts" somewhat out of context to make a point, but with exaggeration. In this case, I was simply offering that the point that (I think) you want to make, that the higher incomes pay a lot more, is borne out without having to resort to what everyone in the policy debate knows to be intentionally contrived statistics. Everyone in the policy debate knows this and rolls their eyes when the issue comes up. What bugs me, I guess, is not the argument (which I think is a valid position to hold) but the way that it gets made undermines useful debate.
OK, got it.

[1centaur]

For your point about revenues, I think your are making my point about payroll taxes. Those are taxes like any other in the way they affect the government's cash position and need to borrow. It is a federal tax, so it is directly comparable.

As long as we're in full disclosure mode, the commonly held view on the right is that payroll taxes primarily are dollars in and dollars out for the lower income cohorts, and in that way not directly comparable when it comes to the notion of paying in one's earnings to support the state (income taxes). Otherwise, why not make payroll taxes into income taxes?

And given that notion, which is as commonly stated on the right as the equivalence of payroll taxes to income taxes is on the left, are there any sources who have tried to approximate the algebra of the right's notion, and roll it forward yearly for 20 years as entitlements get larger? To be specific, have the debits and credits been lined up, and the payroll taxes in from and related payments out to the 47% who don't pay income taxes then been X'd out on both sides of the ledger to look at a pro forma balance of what the income tax payers pay for and how that burden is shared? Perhaps the time shifting of SS is too difficult to attribute fairly?

If we're going to debate "fair share" of taxes and whether people who don't pay income taxes should be able to vote for more benefits for themselves paid by other people's money, this kind of open arithmetic needs to be on the table so we don't keep saying the same words to each other.

[1happygirl]

Hey, what about putting the Dept of Education and some others off of cabinet level and zero based budgeting. Just like when I had my allowance, I had to justify each time why I needed more. I didn't just get more every year. Why (I know I'm probably simplistic but) is this not common sense? Also, I'm sorry but I have volunteered with organizations helping others that have broken the law. Why not control what we have here for the people that haven't and then we wouldn't have to touch the benefits for the people that already have them? It's an honest question.
Anyway, the idea that some people here won't do certain jobs is bogus. My friends have kids that need extra medical care. The kids were born with Type I diabetes as was one parent. The parents both have jobs with insurance AND mow yards on the weekends just to make ends meet. Stop paying and playing with peeps that won't put forth the extra effort but definitely don't touch the peeps benefits that have or are paying to play. Stop with the new/non effort working peeps.
I'm obviously nt a student in economics, but I just see common sense. Stop spending. Flat tax everyone (incl. corp/GE -Where's Steve Forbes when ya need him). Make the IRS form 2 lines you made _______ x % = ____ and send it in. Bring the money back from offshore and scale down the IRS for one.
Economists are like weather forecasters, there is no penalty if you are wrong.
Wait---I'm changing my major. (eeeeee ???? screams heard from parents)
The thread did say laymen's terms.

[oldpotatoe]

Really? All of'm do? Would hitting them a small percentage more really stop their business drive and spending habits?

Frankly, it frosts me the considerable incomes some people get for batting a ball, killing villains in 3D, sucking on market fluctuations, or by getting the board to agree to a golden parachute just before the plane begins its nose dive. We all end up playing for their jollies. But let's not tax them, because they create jobs.

The Bush tax cuts have been in effect for almost 10 years but the unemployment rate is around 10%.

Absolutely, hit the entitlement programs and let GE pay zero tax.

Mitt Romney in Iowa said to a person in his audience, when asked who to tax(guy in audience said 'corporations), Romney responded 'corporations are people'...yikes...

[skijoring]

The Bush tax cuts have been in effect for almost 10 years but the unemployment rate is around 10%.

Absolutely, hit the entitlement programs and let GE pay zero tax.

Mitt Romney in Iowa said to a person in his audience, when asked who to tax(guy in audience said 'corporations), Romney responded 'corporations are people'...yikes...

Yep, personhood granted by the Supremes (more or less). But they already have better than voting rights, they have deep pockets to purchase the most favorable tax treatments and status.

Gilded Cage.

[rugbysecondrow]

Professionally, it has been my experience NOT to trust the GAO. They are not truth seekers but objective substantiaters meaning they start with an objective and find info exclusively to substantiate it, even to the exclusion of info pertiant info that is contrary to their objectives. Trust, it is NOT a study, it is a political document.

As a government traveler and card user, you are to use your card while on travel orders for ALL purchases; incidentals, airlines, meals, expenses etc etc etc. If one wanted to only look at purchases of clothing as a misuse, but not reference whether a travelers luggage was lost enroute (happend to me) then a study could reflect that shopper purchase as misuse. If I stop for dinner at a restaurant, but the bill is classified as a "Bar", then that will reflect something different than it actually is.

Like I said, GAO will exclude pertinant info and include only that which meets their objective and then, viola! A study is born. :crap:



Now, people do misuse governement cards, but it seems a mischarectorization.

That is an excellent question!

A GAO audit classified nearly half of all purchases on government credit cards as improper, fraudulent, or embezzled

Sounds ludicrous to me too. Google will tell you where it came from, but I have yet to see where the GAO said any such thing.


I want to call BS on that, having been in the military these many years, and dealt with purchases and gov't travel cards and having had to justify and get approval for everything and knowing how both the travel and supply departments get audited, unless the rest of the "gov't" is operating under completely different rules, there is simply no way that is true. My guess is nearly all of that is going to hinge on "improper" ie you need to get 3 quotes from differnet vendors before purchasing, and they didn't, you are supposed to use prime vendors and not purchase direct from walmart, even though that may be faster, cheaper, etc--sometimes to get a job done such things are done, and will trigger an "improper" label. And I have seen some swanky command Christmas parties for example--which likely had a high bill--but what you don't see on an audit is all the fund raisers held year round to raise the money for that party...

anyway, not saying there is not waste all over--any time i see guys painting rocks on base i have to wonder about the cost of the paint and the time involved etc, but it would be nice to know where some of those facts came from for those of us who like to learn things.

jim

[oldpotatoe]

Yep, personhood granted by the Supremes (more or less). But they already have better than voting rights, they have deep pockets to purchase the most favorable tax treatments and status.

Gilded Cage.

Or purchase the next POTUS.

Reality, what a concept(and scary too).

[SamIAm]

Mitt Romney in Iowa said to a person in his audience, when asked who to tax(guy in audience said 'corporations), Romney responded 'corporations are people'...yikes...

Romney was right. You think I am going to absorb a tax increase and not pass it on to customers of my product if I can and historically, I usually can.

[rugbysecondrow]

This is not necesarily correct. If you mean people stand at the ready with shovels, then you are correct. If by shovel ready you mean scoped, estimated, approved, vetted and still programatically viable, then there were and are PLENTY of shovel ready projects. One inparticular I managed, money was obligated, construction started, and the space occupied in one year. It takes time to get contracts awarded, hire people, get them to pass background checks etc. But, the money did go out pretty quickly, at least in the projects that I am very familiar with, and done in an unprecedented way.

What people need to realize is that even though there is money, there is still due dilligence in how contracts are awarded and laws that govern the process. This is to help protect against fraud and favortism in government contracts.

In addition, just because shovels are moving doesn't mean other people aren't. Project managers, architects, enginneers, admin folks, etc etc are all working behind the scenes. The shovel moving is often the culmination of years of work, what shovel ready mean is that the years of work is essentially complete and poised to take off.






+1

Anyone remember "shovel ready projects"???

http://www.cbsnews.com/8301-503544_162-20019468-503544.html

Obama: "No Such Thing as Shovel-Ready Projects"

With unemployment hovering near 10 percent nearly two years after President Obama signed his economic stimulus package, Mr. Obama is acknowledging that, despite his campaign promises, "there's no such thing as shovel-ready projects."
The president gave that remark in an hour-long interview with the New York Times.

...When the president campaigned for the stimulus package at the start of his presidency, he and others in his administration repeatedly insisted the investments would go to "shovel-ready" projects -- projects that would put people to work right away. As recently as August, however, local governments were still facing delays spending the money they were allocated from the stimulus, CBS News Correspondent Nancy Cordes reported...

[oldpotatoe]

Romney was right. You think I am going to absorb a tax increase and not pass it on to customers of my product if I can and historically, I usually can.

It would be a shame if ExxonMobil made $22 billion NET profit instead of $23 billion. Or if GE paid .1 of the tax rate I did..say 1%, instead of 0%. By all means give corporate farmers, those who's owners average $200,000 per year personal income a subsidy to not grow corn. And please, reduce entitlements for those nasty old people, what a DRAIN, while allowing those poor people in NYC to pay $5000 per month for their apartment..poor dears...

Try to remember tax revenues today are at 1950 levels. Ya don't think the tax code is in need of change?

Ya know all this talk about taxing the 'job creators' such a nasty idea. Yep, they have created jobs, in China. And Jobs in banks cuz their cash on hand has gotten so large.

I hope Romney is elected and he will be handed the same mess as Obama and we'll see how he does. Maybe with Michelle as a running mate for the evangelical vote. Or Sarah..those debates will be interesting.

[goonster]

Professionally, it has been my experience NOT to trust the GAO.
OK, fair enough, but that's not even the point.

The point is that the "article" plainly misstates what the GAO found in its audit. I highly encourage you to skim the first couple of pages of that GAO report, and decide for yourself.

[rugbysecondrow]

OK, fair enough, but that's not even the point.

The point is that the "article" plainly misstates what the GAO found in its audit. I highly encourage you to skim the first couple of pages of that GAO report, and decide for yourself.


Agreed, I misread. The article is vague in its quote. The GAO report reads about like I expected.

[93legendti]

This is not necesarily correct. If you mean people stand at the ready with shovels, then you are correct. If by shovel ready you mean scoped, estimated, approved, vetted and still programatically viable, then there were and are PLENTY of shovel ready projects. One inparticular I managed, money was obligated, construction started, and the space occupied in one year. It takes time to get contracts awarded, hire people, get them to pass background checks etc. But, the money did go out pretty quickly, at least in the projects that I am very familiar with, and done in an unprecedented way.

What people need to realize is that even though there is money, there is still due dilligence in how contracts are awarded and laws that govern the process. This is to help protect against fraud and favortism in government contracts.

In addition, just because shovels are moving doesn't mean other people aren't. Project managers, architects, enginneers, admin folks, etc etc are all working behind the scenes. The shovel moving is often the culmination of years of work, what shovel ready mean is that the years of work is essentially complete and poised to take off.
I was just posting Obama's October 2010 admission that his February 2009 claim of shovel ready projects that "would put people to work right away" was misleading.

When the president campaigned for the stimulus package at the start of his presidency, he and others in his administration repeatedly insisted the investments would go to "shovel-ready" projects -- projects that would put people to work right away. As recently as August (2010), however, local governments were still facing delays spending the money they were allocated from the stimulus, CBS News Correspondent Nancy Cordes reported.

[JMerring]

I was just posting Obama's October 2010 admission that his February 2009 claim of shovel ready projects that "would put people to work right away" was misleading.

When the president campaigned for the stimulus package at the start of his presidency, he and others in his administration repeatedly insisted the investments would go to "shovel-ready" projects -- projects that would put people to work right away. As recently as August (2010), however, local governments were still facing delays spending the money they were allocated from the stimulus, CBS News Correspondent Nancy Cordes reported.

thank you for pointing out the first time a politician has said something misleading. none of that went on last night, btw - so very refreshing.

[flydhest]

OK . . . teetering along the edge.

[jblande]

let's keep this respectful (according to common parlance a synonym for submissive).

[JMerring]

fair enough, but rugby gave a cogent and eminently sensible explanation, and the response was disingenuous at best. i can bite my tongue only so much.

[akelman]

Dear 93legendti,

I'm willing to bet that you're a good guy. I'm willing to bet that you're good to your family, that you're honest and hardworking, and that you're a valued member of your community.

I also know that, given the chance, I'd love to ride with you. You have excellent taste in bikes, and I bet you're a gentleman on the road. But I have to tell you, with all due respect, that your tendency to inject partisanship into thread after thread has really begun to get under my skin. I suspect that maybe the right thing to do here would be to tell a moderator this. Honestly, though, I'd feel lousy doing that, like I was talking behind your back. So, instead, I'm writing you this, a kind of open letter, and asking you please to stop.

I make that request because we're heading into another electoral cycle, and there will be plenty of temptation for all of us to share our opinions about the various candidates. And, frankly, I don't want to hear it (just as you very likely don't want to hear what I have to say on these subjects).

Truly, there are bunches of people here with whom I know I disagree about politics. But as is the case with you, I still respect these people, assume good faith on their part, and would like to ride with them. The thing is, though, the more I hear about their politics (and about yours), the less I feel that way, the more I begin to suspect bad faith, the more I find myself annoyed.

And that's why, as you well know, talking about politics is forbidden here. So, again, I'm asking you to please consider self-censoring a bit. We all know where you stand. Some of us agree with you. Others don't. Let's leave it at that and hope that, one of these days, we can all get together for a long and safe ride. And let's hope for the best for this nation, regardless of who its leaders might be.

Thanks for listening,

Ari

[flydhest]

with that, I am closing the thread. It seems beyond dispute that 93LegendTi voices partisan views. It is also beyond dispute, however, that many others do as well. one could easily take akelman's comment as a respectful plea or one could take it as singling someone out. I see it as the former, but to avoid the reaction by those who may take it as the latter, this thread is closed.