Is $900Billion new debt fiscally responsible?

[werepossum]

It's pretty easy to bring back the middle class, werepossum.

Get rid of government's regulations, taxation, and police force. Get rid of the minimum wage.

The middle class will be back in force.

-John

I disagree, John. Setting aside for a moment the potential for creating hell on Earth by eliminating all government regulations - as witnessed by the USSR and it's lack of environmental regulations, or places like Sudan or Somalia with little regulation of any kind - wages would still be either far too high to compete with China, or far too low to be middle class. (Concievably they could be both.) Minimum wage as set now is far too low to be considered middle class (although government hand-outs can turn it into a middle class lifestyle) and this is the rock bottom wage allowed by law. Removing government regulation would allow corporations to pay more for labor, but wouldn't make the labor itself worth more so there would be no reason to pay the workers more. There might well be pressure to pay them less, but no pay scale considered middle class in this country can compete with Chinese wages plus shipping for most products.

 

[ProfJohn]

-edit-
" the package would cost about $855 billion"
-edit-

There are a LOT of issues with the way they are quoting the 'cost' of the bill.

First this 'cost' is for two years or $425 billion a year.

Second is the way they are figuring out the 'cost' in the first place.

If we use baseline budgeting then extending the Bush tax cuts will cost nothing since revenue will essentially remain the same next year as it was this year. So the only real cost of this bill is the new stuff added to get it votes (SS cut and ethanol etc)

Claiming that extending the tax cuts will 'cost' the government money is the same as claiming that turning down a job making $5000 more a year will 'cost' you money when the truth is will keep making the same money you are making now and thus is there is no 'cost' to turning down that new job or to extending cuts that are already in place.

Another way to think of it is this:
Killing the tax cuts will result in a smaller deficit next year. But extending them will NOT result in a higher deficit since next years revenue will not change by extending the cuts.

If we froze all spending at its current level then next years deficit would actually be lower even if we kept the tax cuts in place.

 

[fskimospy]

There are a LOT of issues with the way they are quoting the 'cost' of the bill.

First this 'cost' is for two years or $425 billion a year.

Second is the way they are figuring out the 'cost' in the first place.

If we use baseline budgeting then extending the Bush tax cuts will cost nothing since revenue will essentially remain the same next year as it was this year. So the only real cost of this bill is the new stuff added to get it votes (SS cut and ethanol etc)

Claiming that extending the tax cuts will 'cost' the government money is the same as claiming that turning down a job making $5000 more a year will 'cost' you money when the truth is will keep making the same money you are making now and thus is there is no 'cost' to turning down that new job or to extending cuts that are already in place.

Another way to think of it is this:
Killing the tax cuts will result in a smaller deficit next year. But extending them will NOT result in a higher deficit since next years revenue will not change by extending the cuts.

If we froze all spending at its current level then next years deficit would actually be lower even if we kept the tax cuts in place.

This is the same tortured logic I keep seeing. If you run a business and you have a contract with another company for 5 years, and then they renew it, you count that as new revenue, you don't say 'well I guess we didn't actually secure any new business'.

Similarly, budget projections in government are done several years out, and these are the budget projections that ALL lawmakers rely on when legislating. This legislation is altering the budget outlook that legislation was based on to the tune of the better part of a trillion dollars. There's no way to escape this extremely basic fact.

If the government eliminated all taxation tomorrow for a single day, our country would be fine. By your logic, tomorrow you could then say that government eliminating all taxation forever would simply be a continuation of current tax policy, and therefore shouldn't be looked as a tax decrease. Our country would then not be fine.

This would be an enormously stupid way to argue.

 

[ProfJohn]

Tortured logic?

Eliminating all taxation tomorrow WOULD be a change to the current tax code and current revenue.

Leaving the system that has been in place for nine years alone is NOT a change to the current tax system or revenue of the country.

Revenue in FY 2010 was $2.2 trillion. If we leave the tax cuts in place then revenue in 2011 will be similar (excluding economic gains)

Thus if spending in 2011 stayed the same as 2010 then the deficit would remain the same.

 

[Carmen813]

Tortured logic?

Eliminating all taxation tomorrow WOULD be a change to the current tax code and current revenue.

Leaving the system that has been in place for nine years alone is NOT a change to the current tax system or revenue of the country.

Revenue in FY 2010 was $2.2 trillion. If we leave the tax cuts in place then revenue in 2011 will be similar (excluding economic gains)

Thus if spending in 2011 stayed the same as 2010 then the deficit would remain the same.

*cough* Inflation/Deflation *cough*

 

[fskimospy]

Tortured logic?

Eliminating all taxation tomorrow WOULD be a change to the current tax code and current revenue.

Leaving the system that has been in place for nine years alone is NOT a change to the current tax system or revenue of the country.

Revenue in FY 2010 was $2.2 trillion. If we leave the tax cuts in place then revenue in 2011 will be similar (excluding economic gains)

Thus if spending in 2011 stayed the same as 2010 then the deficit would remain the same.

You didn't understand my post. You could probably convince people to have a single day tax holiday in the US. You can also convince them to have a 10 year tax holiday on a smaller set of tax cuts. No one would ever try to argue that the tax rates going to zero on a single day were indicative of 'normal' tax rates, because any such legislation would be specifically denoting the limited time of these. Similarly the Bush tax cuts were passed with a 10 year limit on them. This was done for many reasons, but one of them was that they were so fiscally irresponsible that to push them out longer would have triggered a bunch of problems with Congressional rules against expanding the debt too much.

When something is explicitly passed with a time limit on it, attempting to argue that those time limited features are actually the new norm is breathtakingly dishonest.

 

[irwincur]

If the government would just reduce spending appropriately to reflect this 'lost' revenue, then it would not be an issue. The issue here is not that the government is letting US keep more of OUR money, but that they think they are entitled to it without responsibility. In all reality, if we could ever hold government responsible and get them spending correctly, we would all have a lot more money in our pockets.

But that is impossible, because the government feels entitled to our money. It is easy for them to take, but never to give back. Until this attitude changes, spending will always be out of control. When taxes were originally levied, they were for specific projects of tasks, now it is just assumed that the government needs the money. Worse yet, the government never shrinks itself, it is like a living, breathing, money monster.

 

[chucky2]

This is the same tortured logic I keep seeing. If you run a business and you have a contract with another company for 5 years, and then they renew it, you count that as new revenue, you don't say 'well I guess we didn't actually secure any new business'.

Similarly, budget projections in government are done several years out, and these are the budget projections that ALL lawmakers rely on when legislating. This legislation is altering the budget outlook that legislation was based on to the tune of the better part of a trillion dollars. There's no way to escape this extremely basic fact.

If the government eliminated all taxation tomorrow for a single day, our country would be fine. By your logic, tomorrow you could then say that government eliminating all taxation forever would simply be a continuation of current tax policy, and therefore shouldn't be looked as a tax decrease. Our country would then not be fine.

This would be an enormously stupid way to argue.

Except in the business world, when real and projected revenues fall short, guess what happens?

The business cuts projects/investing/whatever so they don't go negative/not as good as projected...unless they view going forward with planned operations as higher priority than running negative/not as good as projected.

What the governments do is, not get the same revenue, know they're not going to get the same revenue, but, Shazam!!, they spend the same or more.

Unless you're the federal government, then you can fire up the magic money printing press, and/or borrowing (against a magic number), then you can keep on keepin' on w/o having to cut anything.

That's why all you politicians are super smart political guys, amirite?

Chuck

 

[Patranus]

If the government would just reduce spending appropriately to reflect this 'lost' revenue, then it would not be an issue. The issue here is not that the government is letting US keep more of OUR money, but that they think they are entitled to it without responsibility. In all reality, if we could ever hold government responsible and get them spending correctly, we would all have a lot more money in our pockets.

But that is impossible, because the government feels entitled to our money. It is easy for them to take, but never to give back. Until this attitude changes, spending will always be out of control. When taxes were originally levied, they were for specific projects of tasks, now it is just assumed that the government needs the money. Worse yet, the government never shrinks itself, it is like a living, breathing, money monster.

Yup

 

[fskimospy]

Except in the business world, when real and projected revenues fall short, guess what happens?

The business cuts projects/investing/whatever so they don't go negative/not as good as projected...unless they view going forward with planned operations as higher priority than running negative/not as good as projected.

What the governments do is, not get the same revenue, know they're not going to get the same revenue, but, Shazam!!, they spend the same or more.

Unless you're the federal government, then you can fire up the magic money printing press, and/or borrowing (against a magic number), then you can keep on keepin' on w/o having to cut anything.

That's why all you politicians are super smart political guys, amirite?

Chuck

I don't know what your post had to do with my point. Maybe your salt of the earth Real 'Murrican wisdom can aid me. 🙂

 

[chucky2]

"Similarly, budget projections in government are done several years out, and these are the budget projections that ALL lawmakers rely on when legislating. This legislation is altering the budget outlook that legislation was based on to the tune of the better part of a trillion dollars. There's no way to escape this extremely basic fact."

So if this has altered the budget outlook that other legislation was based on, then, surely, since they're super smart political guys like you, and not just "Real 'Murrican's" (whatever that is) like me, they're going to chop back their expenses to account for the dip in "revenue" (aka taxes), Right?

This is what The Dem's, who are in control, will be doing, Correct? And since you'll absolutely say Yes to that, since you and they are "super smart political guys", I know that means they'll be introducing their revised cut back budget, since they - the super smart political guy Dem's (just like you) - campaigned on being Transperant.

I must have missed the Transperent memo released by the super smart political guys on the Dem side. Could you link me to that? When did they say they were committing to getting that revised budget out to US "Real 'Murrican's"?

Chuck

 

[Zorkorist]

I disagree, John. Setting aside for a moment the potential for creating hell on Earth by eliminating all government regulations - as witnessed by the USSR and it's lack of environmental regulations, or places like Sudan or Somalia with little regulation of any kind - wages would still be either far too high to compete with China, or far too low to be middle class. (Concievably they could be both.) Minimum wage as set now is far too low to be considered middle class (although government hand-outs can turn it into a middle class lifestyle) and this is the rock bottom wage allowed by law. Removing government regulation would allow corporations to pay more for labor, but wouldn't make the labor itself worth more so there would be no reason to pay the workers more. There might well be pressure to pay them less, but no pay scale considered middle class in this country can compete with Chinese wages plus shipping for most products.

Labor alone, used to be a middle-class income, thus blue-collar workers. We have a distinct advantage over emerging markets like the Chinese, and that is that our economy is at its hey-day, and local labor, local manufacturing is, or should be competitive with any foreign economy.

Unless our economy is inflated by Government regulation, and taxation, and spending.

This is the answer you are looking for, when looking to see how we can compete with the Chinese. Today we can pretty easily compete against the Chinese, when Government regulation, taxation and minimum wages are repealed.

It's not going to turn us into a third-world country, it should expand our economy, expand industry, employment, and everything else that makes America great.

-John

 

[Throckmorton]

It's fiscally responsible because cutting spending during a recession is counter-productive. We need STIMULUS not anti-stimulus.

 

[Zorkorist]

That's like saying we need to spend more on unemployment, to stimulate the economy. 😀

-John

 

[JulesMaximus]

I think its going to be real hard for republicans to honestly run on a platform of fiscal responsibility in the future. The democrats actually want to let the tax cut expire to help with the national debt and the republicans obviously don't care about debt.

Republicans? Fiscal responsibility? BWAHAHAHAHAHAHAHAHA!!!! Oh man, you crack me up...you really do.

 

[rudder]

Only in 'liberal land' is not raising taxes the same as increasing spending.

/end thread

Any time Americans get to keep more of THEIR money... that is a good thing. Would people rather that taxes gets raised so the government can spend to keep jobs which cost the taxpayer $150,000/job at least

 

[matt0611]

/end thread

Any time Americans get to keep more of THEIR money... that is a good thing. Would people rather that taxes gets raised so the government can spend to keep jobs which cost the taxpayer $150,000/job at least

If we raised taxes they will only spend more anyway, it won't help the deficit at all.

They need to actually attempt to control spending before we even think about raising taxes, especially in a recession.

 

[fskimospy]

If we raised taxes they will only spend more anyway, it won't help the deficit at all.

They need to actually attempt to control spending before we even think about raising taxes, especially in a recession.

What you're arguing there is a reverse form of 'starve the beast'. This is a fiscal doctrine that has been widely discredited from both the left and the right, and there's absolutely zero support for it in the evidence.

Let's also be honest here. This isn't about raising taxes 'especially in a recession'. If the economy were doing just fine then the response would be 'don't mess up a great economy with more taxes'. Can you tell me a situation in which you would support raising taxes?

 

[matt0611]

What you're arguing there is a reverse form of 'starve the beast'. This is a fiscal doctrine that has been widely discredited from both the left and the right, and there's absolutely zero support for it in the evidence.

Let's also be honest here. This isn't about raising taxes 'especially in a recession'. If the economy were doing just fine then the response would be 'don't mess up a great economy with more taxes'. Can you tell me a situation in which you would support raising taxes?

Yes, the key word is "especially", I wouldn't support raising the taxes at all considering how much the federal government takes in.

When would I support raising taxes for the federal government?
If there was a military emergency where the future of country was at stake perhaps?

Considering the amount of money the federal government takes in right now, other than that, I would NEVER support raising taxes any more than they are right now.

In fact, I would LOWER taxes even more. But we need to cut spending to do that. And thats what we need to do next.

 

[Darwin333]

If the government would just reduce spending appropriately to reflect this 'lost' revenue, then it would not be an issue. The issue here is not that the government is letting US keep more of OUR money, but that they think they are entitled to it without responsibility. In all reality, if we could ever hold government responsible and get them spending correctly, we would all have a lot more money in our pockets.

But that is impossible, because the government feels entitled to our money. It is easy for them to take, but never to give back. Until this attitude changes, spending will always be out of control. When taxes were originally levied, they were for specific projects of tasks, now it is just assumed that the government needs the money. Worse yet, the government never shrinks itself, it is like a living, breathing, money monster.

I have never understood this argument. If they reduced spending to offset the costs of this bill we would still have an absurdly huge deficit. Hardly what I would call "fiscal responsibility".

 

[Darwin333]

What you're arguing there is a reverse form of 'starve the beast'. This is a fiscal doctrine that has been widely discredited from both the left and the right, and there's absolutely zero support for it in the evidence.

Let's also be honest here. This isn't about raising taxes 'especially in a recession'. If the economy were doing just fine then the response would be 'don't mess up a great economy with more taxes'. Can you tell me a situation in which you would support raising taxes?

And the left have it completely wrong as well.

As you stated, lets be honest here. The tax cuts in question (those on the rich) will cost us $70B a year in revenue we would otherwise get if we let them expire on JUST the rich. That amount of revenue is a pimple on the ass of our deficit and will make almost no difference to our fiscal situation.

If you want to talk about not extending ANY of the cuts then we are getting somewhere, still not even close to a reasonable deficit but it would be a decent start. Since no one is even remotely willing to do that though I am not sure its worth even discussing.

 

[fskimospy]

Yes, the key word is "especially", I wouldn't support raising the taxes at all considering how much the federal government takes in.

When would I support raising taxes for the federal government?
If there was a military emergency where the future of country was at stake perhaps?

Considering the amount of money the federal government takes in right now, other than that, I would NEVER support raising taxes any more than they are right now.

In fact, I would LOWER taxes even more. But we need to cut spending to do that. And thats what we need to do next.

Exactly my point. Mentioning the recession is not useful, because your opinion is always to lower taxes. That makes you hard to take seriously.

 

[fskimospy]

And the left have it completely wrong as well.

As you stated, lets be honest here. The tax cuts in question (those on the rich) will cost us $70B a year in revenue we would otherwise get if we let them expire on JUST the rich. That amount of revenue is a pimple on the ass of our deficit and will make almost no difference to our fiscal situation.

If you want to talk about not extending ANY of the cuts then we are getting somewhere, still not even close to a reasonable deficit but it would be a decent start. Since no one is even remotely willing to do that though I am not sure its worth even discussing.

I'm very comfortable with not renewing the tax cuts on anyone, but so long as we're running a deficit to cut taxes, cutting them on the rich is about the least worthwhile 'use' of those deficit dollars available to us. If we're trying to stimulate the economy, that's a very poor way to do it. Tax cuts for the middle class are more effective stimulus because they are more likely to recirculate the money.

 

[matt0611]

Exactly my point. Mentioning the recession is not useful, because your opinion is always to lower taxes. That makes you hard to take seriously.

My opinion is to always lower taxes at our current level of federal revenue (which is extremely high) until its down to level I find acceptable.

If people think we really need to spend money on something (such as unemployment benefits) we need to find that money from somewhere else, not taxes (because they are too high) and not borrowing (because the deficit is already too high).
Its pretty simple.

Knowing that you think that raising taxes at our current level of revenue makes sense makes it hard to take you seriously.

 

[fskimospy]

My opinion is to always lower taxes at our current level of federal revenue (which is extremely high) until its down to level I find acceptable.

If people think we really need to spend money on something (such as unemployment benefits) we need to find that money from somewhere else, not taxes (because they are too high) and not borrowing (because the deficit is already too high).
Its pretty simple.

Knowing that you think that raising taxes at our current level of revenue makes sense makes it hard to take you seriously.

Well then I'm sure you have a hard time taking basically every other industrialized nation on earth seriously. Taxes in the United States are extremely low compared to other similar countries, being about 9 points below the OECD average.

http://www.taxpolicycenter.org/briefing-book/background/numbers/international.cfm