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What would happen if we balance the budget immediately?

techs

techs

Lifer
Say we balance the budget immediately by eliminating spending. What would be the effect on the economy?
 
The balance of the budget would have little short-term effect on the economy. There would likely be a slight increase in your dollar, which would decrease your oil (and other import) costs, but also decrease demand for your exports. There would be significant long-term effects on economic growth from the effective increase to your saving rate.

The actions that it would take to balance the budget would likely have detrimental effects on your economy. Either a decrease in spending or an increase in taxes would have short-term transition costs as well as possibly small detrimental effects on your economic growth (the extent would depend on which taxes or spending were changed).
 
We're so far in debt and so deep on the hook for the cost of the Iraq fiasco that it isn't possible, no matter how desirable it is as a goal.
 
Just make a 7 trillion donation.

We would not have to pay a very huge debt payment for half of the year just to pay the debt and we would have plenty of money for social projects.
 
Your question is similar to the one about if pigs had wings, would they fly...

Balancing the budget thru spending cuts alone simply won't and can't happen- it'd be similar to cold turkey withdrawal form opiate addiction, except on a national economic scale...

The only way to get close is to reverse the course of events that put us where we are today- a balanced approach to cutting spending and rescinding faux taxcuts, over the same approximate timeframe it took to get us into this mess... Repubs have no intention of doing either in a meaningful way. They're trying to cut current overspending by 10%, $50B, from entitlements and blue state pork so they can declare victory, cut top bracket taxes some more to make up the difference.... and then some...

Total indebtedness will likely increase by ~$650B in 2006... no matter how much of it they succeed in hiding off budget...
 
this would require about a 10% cut across the board. THis is possible and most people would not feel the effects of such a move. There is far more than 10% waste and fraud in the goverment.
 
Originally posted by: charrison
this would require about a 10% cut across the board. THis is possible and most people would not feel the effects of such a move. There is far more than 10% waste and fraud in the goverment.
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depends on how one defines waste and fraud. cut the military bidget in half and you're more than there.
 
Originally posted by: miketheidiot
Originally posted by: charrison
this would require about a 10% cut across the board. THis is possible and most people would not feel the effects of such a move. There is far more than 10% waste and fraud in the goverment.
Click to expand...
depends on how one defines waste and fraud. cut the military bidget in half and you're more than there.
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Of course, waste and fraud exists no where else in the budget...:roll:
 
You would need to change the way government aproaches problems, accountability and their relationships with big business.

That alone cannot happen so I wouldn't even dream of it.

Jhhnn is right as well. Government is an excercise is hiding money off budget.

You fall $2 short on back taxes they hall you off to court/prison and preach how they can't make exceptions because it gives a bad example to the population.

What happens when a government hides over $5 billion in dept in a budget that's found out months after they leave office like it happend here in Canada? A setup for re-election.
 
Originally posted by: miketheidiot
Originally posted by: charrison
this would require about a 10% cut across the board. THis is possible and most people would not feel the effects of such a move. There is far more than 10% waste and fraud in the goverment.
Click to expand...
depends on how one defines waste and fraud. cut the medicare/welfare bidget in half and you're more than there.
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Americans have become used to entitlements and won't give them up. It's easy to bribe people with their own money, and even easier to bribe them with somebody else's money.
 
Originally posted by: charrison
Originally posted by: miketheidiot
Originally posted by: charrison
this would require about a 10% cut across the board. THis is possible and most people would not feel the effects of such a move. There is far more than 10% waste and fraud in the goverment.
Click to expand...
depends on how one defines waste and fraud. cut the military bidget in half and you're more than there.
Click to expand...


Of course, waste and fraud exists no where else in the budget...:roll:
Click to expand...

find me a bigger area of the budget that is more useless? Thanks.
 
Originally posted by: miketheidiot
Originally posted by: charrison
Originally posted by: miketheidiot
Originally posted by: charrison
this would require about a 10% cut across the board. THis is possible and most people would not feel the effects of such a move. There is far more than 10% waste and fraud in the goverment.
Click to expand...
depends on how one defines waste and fraud. cut the military bidget in half and you're more than there.
Click to expand...


Of course, waste and fraud exists no where else in the budget...:roll:
Click to expand...

find me a bigger area of the budget that is more useless? Thanks.
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Pretty much all of the federal goverment is spending. However at least the constitution does say that fed can spend on the military. Very little other goverment spending has the same constitutional backing.
 
A 10% cut, charrison? Dream on. Nearly one third of all non-SS expenditures are currently made with borrowed money, some of it coming from the SS surplus...

Triple that 10% number to come close...

It's one thing to believe in things that aren't true, entirely another to actually claim that they are...
 
Originally posted by: Jhhnn
A 10% cut, charrison? Dream on. Nearly one third of all non-SS expenditures are currently made with borrowed money, some of it coming from the SS surplus...

Triple that 10% number to come close...

It's one thing to believe in things that aren't true, entirely another to actually claim that they are...
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If is funny how you can pick and choose which programs are funded with borrowed money.

a 10% across the board budget cut would bring the budget back into balance.
 
Malarkey, charrison. Federal outlays for 2005 were ~$2.2T, total indebtedness increased by ~$550B. SS expenditures were ~$500B, with an additional ~$150B surplus being part of the total debt increase. Non-SS spending was ~$1.7T.

Cutting 10% is only $220B, and cutting SS outlays won't fly, anyway, seeing as how the program still brings in $150B/yr more than goes out...

Try again, tell us what kind of cuts will be required to reduce debt growth to zero... obviously, the real expenditures will need to be reduced by at least $550B, which is more than twice $220B... which is more like 30% of non-SS spending than your propagandist number of 10% of total spending.

 
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess of the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's great civilizations has been 200 years. These nations have progressed through this sequence:from bondage to spiritual faith;from spiritual faith to great courage;from courage to liberty;from liberty to abundance;from abundance to selfishness;from selfishness to complacency;from complacency to apathy;from apathy to dependency;from dependency back again to bondage.

Sir Alex Fraser Tytler
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It's an interesting quote. I think the Bush admin in many ways reflects this view. "Largess of the public treasury" can mean a couple different things. In America it could be eititlement and assistance programs. Or it could be the act of not pouring money into the treasury in the first place in the form of tax cuts (taking the static view that tax cuts reduce revenues - something I don't believe). If these two interestes are held in balance things seem to roll along fairly well.

When those in power try to appease both sides we have what we are looking at now. The tax cuts would have been fine by themselves, but when you throw in the massive spending increases (even taking aside the Iraq war) a ballooning debt is inevitable.

 
Everytime we have cut taxes, economic growth and an increase to the treasury has occurred. That needs to be clarified to the liberals here.
 


Here is how...don't rebuild NO, take the pork down to $150 million or so, get out of Iraq, and kill either Social Security or medicare and medicaid....Of course that would result in civil war which is very expensive.
 
Originally posted by: IronMentality
Everytime we have cut taxes, economic growth and an increase to the treasury has occurred. That needs to be clarified to the liberals here.
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And there is proof that the economy would or wouldn't have grown thanks to those cuts? I guess business and individuals sit idle waiting for a tax cut to try the next new great idea or start another business.

Laffer curve anyone?

Oh, and IMO, it's not the tax cuts that are truely burying the country in debt (it doesn't help), it's the massive spending by the current administration and Congress. *sigh*


Anyone have the link that was posted within the last 8 months showing tax cuts and the resulting economy after those cuts. There was no distinguishing characteristics of a faster growing economy under the tax cut period than without them. Maybe this rings a bell with the OP of that thread and can be posted again.
 
"Everytime we have cut taxes, economic growth and an increase to the treasury has occurred. That needs to be clarified to the liberals here. "

Cutting taxes at the trough in the economic cycle explains that, rather than attributing any kind of cause and effect relationship. Nor has such a situation ever actually balanced the budget. Reaganomics demands deficits to carry off the illusion of prosperity, to counteract the movement of money from higher velocity channels, the middle and working class, into a lower velocity channel of the wealthy. The increase in revenues doesn't equal the increase in debt- never has, never will, quite by design.

The Clinton Admin and a reluctant congress raised taxes in the early 90's, which was followed by the greatest sustained economic boom in our history... Something the above quote ignores completely...

But I'm not prepared to claim cause and effect, simply because it wouldn't be true...
 
It is absolutely ridiculous to think if businesses or citizens had say $100,000 in there pocket, and they didn't receive a tax cut - that the same economic growth would've ensued from giving those folks say theoretically a 10% tax cut and giving them $10,000 to actively invest, or spend with, and how that would NOT fuel more growth.

The simple fact is there wouldn't be $78 Billion Dollars of an increase in collected capital gains and dividends revenue if TAX RATES stayed the same for the last 4 years.
 
Originally posted by: Jhhnn
Malarkey, charrison. Federal outlays for 2005 were ~$2.2T, total indebtedness increased by ~$550B. SS expenditures were ~$500B, with an additional ~$150B surplus being part of the total debt increase. Non-SS spending was ~$1.7T.

Cutting 10% is only $220B, and cutting SS outlays won't fly, anyway, seeing as how the program still brings in $150B/yr more than goes out...

Try again, tell us what kind of cuts will be required to reduce debt growth to zero... obviously, the real expenditures will need to be reduced by at least $550B, which is more than twice $220B... which is more like 30% of non-SS spending than your propagandist number of 10% of total spending.
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10% cut across the board solve a large portion of the on budget problem, much like it was solved when clinton balanced the budget in the late 90s. Hold the budget flat for a couple years and the off budget cuts will be solved as well.

10% cut across the board will force all goverment agencies to spend their money better and result in very little if any benefit cut.

In the mean time lets get SS back on the books(since LBJ took it off) and reform so congress can not spend its surplusses.

 
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