Why Cut, Cap, and Balance fails

[her209]

Under the GOP/Teabaggers's Cut, Cap, and Balance plan, the balance part requires that government outlays not exceed government receipts. If it were in effect today, the federal government would be shutdown since total mandatory government spending is estimated to be 14.5% while government receipts is estimated only to take in 14.4%. That puts the budget for discretionary spending at 0.

Oh yeah, and that's even before the government pays the net interest on the national debt which makes up about 2% of GDP.

Oops.

 

[MooseNSquirrel]

Good luck with that.

The "No taxes over my dead body" crowd (also the "dont touch my SS and Medicare crowd") doesnt understand how much of our current situation is due to a revenue problem.

Hence the need for tax inceases.

 

[thraashman]

I think Tea Party Republicans think math is that evil, crazy stuff witches do.

 

[a777pilot]

The Cut, Cap and Balance will and is failing because there is no need for a Constitutional Amendment. Besides that, there is the "fact" that there are way too many constituents getting "free" things from the efforts of others. Rational and reasonable and limited spending would put an end to that.

 

[EagleKeeper]

How do you get government receipts to be 14.4%

Right now we are borrowing 40% of our needs.
That indicates that the receipts are 60% of our spending.

Income increases and spending decreases need to equal 40% to get to a balance.

 

[her209]

How do you get government receipts to be 14.4%

Page 25
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf

 

[MooseNSquirrel]

The Cut, Cap and Balance will and is failing because there is no need for a Constitutional Amendment. Besides that, there is the "fact" that there are way too many constituents getting "free" things from the efforts of others. Rational and reasonable and limited spending would put an end to that.

Lay it out bro, because empty rhetoric don't solve crap.

 

[chucky2]

Nothing Oops about it. They don't have the resources (without printing $) to fund this years budget shortfall, nor do they have the resources to fund next years. Which means they should be cutting the budget to match income, same as anyone else would need to do that doesn't have a money printing press or "unlimited" credit.

I'd say 'run a deficit and pay it off next year', but since we're already Trillions in the hole there, and we can call agree there is absolutely zero % chance of the gov being revenue positive, so as to pay off the debt they've incurred, they should be doing the proper thing, matching expenditures to revenue.

Why is spending only what you have so hard a concept to grasp?

 

[a777pilot]

Lay it out bro, because empty rhetoric don't solve crap.

Pay attention. I have.

I am one of but a few that actually puts wroth a plan vice just complains.

What is YOUR plan?

 

[K1052]

Nothing Oops about it. They don't have the resources (without printing $) to fund this years budget shortfall, nor do they have the resources to fund next years. Which means they should be cutting the budget to match income, same as anyone else would need to do that doesn't have a money printing press or "unlimited" credit.

I'd say 'run a deficit and pay it off next year', but since we're already Trillions in the hole there, and we can call agree there is absolutely zero % chance of the gov being revenue positive, so as to pay off the debt they've incurred, they should be doing the proper thing, matching expenditures to revenue.

Why is spending only what you have so hard a concept to grasp?

All governments have to borrow for a wide variety of reasons. The trick is keeping the debt level reasonable (within a favorable range of debt to GDP). Also not doing any borrowing at all makes it nearly impossible to do so if extraordinary circumstances arise where the government needs a load of cash quickly.

We can do this without torching most of the federal and state governments with almost no notice. We will probably not default but the collateral damage is going to be enormous.

 

[Jaskalas]

Why is spending only what you have so hard a concept to grasp?

People want money they don't have. Simple as that.

 

[a777pilot]

People want money they don't have. Simple as that.

Yes, two types: Those that have more and still want more and those that have nothing and don't want to work for it.

That about sums it up.

 

[her209]

Nothing Oops about it. They don't have the resources (without printing $) to fund this years budget shortfall, nor do they have the resources to fund next years. Which means they should be cutting the budget to match income, same as anyone else would need to do that doesn't have a money printing press or "unlimited" credit.

I'd say 'run a deficit and pay it off next year', but since we're already Trillions in the hole there, and we can call agree there is absolutely zero % chance of the gov being revenue positive, so as to pay off the debt they've incurred, they should be doing the proper thing, matching expenditures to revenue.

Why is spending only what you have so hard a concept to grasp?

Since you've claim to grasp the concept of spending, explain how you pay a bill that is 14.5% of GDP when you're only collecting 14.4% of GDP.

EDIT: Since you have to pay the net interest on the debt as well or be in default, its 15.9% of GDP.

 

[EagleKeeper]

How do you get government receipts to be 14.4%

Page 25
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf

That is percentage of the GDP.:\ Not income vs spending which is what you are talking about in the OP.

Putting up charts without reading the numbers and what they are does not help your case.

 

[her209]

That is percentage of the GDP.:\ Not income vs spending which is what you are talking about in the OP.

Putting up charts without reading the numbers and what they are does not help your case.

The spending as a percentage of GDP is on page 151.



Put two and two together.

 

[a777pilot]

Page 25
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist.pdf

Your link is a Federal Government document. Why would any reasonable person believe anything this Fool, Bobo, the Post Turtle, had to say. His history is one lie after another.

 

[GuitarDaddy]

That is percentage of the GDP.:\ Not income vs spending which is what you are talking about in the OP.

Putting up charts without reading the numbers and what they are does not help your case.

Try and keep up, the chart and the OP are comparing receipt as a % of GDP, to expenses as a % of GDP. Its called using GDP as a basis to compare spending to income. Pretty simple concept really what don't you understand

 

[her209]

Your link is a Federal Government document. Why would any reasonable person believe anything this Fool, Bobo, the Post Turtle, had to say. His history is one lie after another.

Why should I believe anything you say?

 

[EagleKeeper]

Since you've claim to grasp the concept of spending, explain how you pay a bill that is 14.5% of GDP when you're only collecting 14.4% of GDP.

EDIT: Since you have to pay the net interest on the debt as well or be in default, its 15.9% of GDP.

Are you going to pay all the bill or budget it out month to month? At present, they have been paying it month to month. That did allow them to reduce expenditures to under the income over time, if they chose to. No one wanted to; in good times or bad. Now some think that a different strategy needs to be taken; The medicine may taste horrible; but it is better than suffering with the illness.

Government spending as it relates to GDP is a great picture - less spending mean greater private growth.

Government spending for the sake of spending when it sucks up the GDP is not good.

Cutting government spending to stay within its income levels is what is needed. Not saying that it can wait. That time that one has been waiting for has never come. Event he last budget crisis was solved using smoke and mirrors. It was cuts from proposed increases; not cuts on existing spending that was accomplished.

 

[a777pilot]

Why should I believe anything you say?

Hopefully you never will.

 

[her209]

Hopefully you never will.

I never have.

 

[GuitarDaddy]

Your link is a Federal Government document. Why would any reasonable person believe anything this Fool, Bobo, the Post Turtle, had to say. His history is one lie after another.

How did he personally produce this document from on top of that post?

Your contempt for anything government plus your claim of being an ex marine kinda puts you firmly in whako militia territory. I would watch out for unmarked suburbans with dark tint, they are watching you

 

[chucky2]

All governments have to borrow for a wide variety of reasons. The trick is keeping the debt level reasonable (within a favorable range of debt to GDP).

I have no problem with that, if there's an actual drive to pay it back along with a plan that it will actually be done. There isn't. There never is. Which makes this suggestion a non-starter. It's like having a crack (money) addict (gov), and you (taxpayers) finally wake up and say, Wow, we need to get the addict some help, he's injecting, snorting, and now eating like 5 lbs. of pure (that would be massive unfunded/printing press spending) a day! One side wants to take the addict completely off crack, which is bad. The other wants to give him 6 lbs. with the stern words and soundbites that it's bad to do drugs and Just Say No, and that hopefully the temporairily sated crack addict will come to his senses. We all know, crack addicts don't give two F's what people say, think or want...and will lie, cheat, steal, and kill to keep that crack coming. We need people in charge that are going to take all the 5 lbs. away (no more deficit spending, no more printing press), and give the addict carefully measured doses (balanced budget, tax increases and only when a true ((such as Katrina, mag 11 earthquake in CA, supervolcano in WY)) national emergency deficit spending) to control the addiction.

Also not doing any borrowing at all makes it nearly impossible to do so if extraordinary circumstances arise where the government needs a load of cash quickly.

See above.

We can do this without torching most of the federal and state governments with almost no notice. We will probably not default but the collateral damage is going to be enormous.

There is 'no notice'. They have been seeing this play out along with the public and the rest of the world for months now. Anyone remotely involved with budgeting already knows the score long before that. There are no surprises here, only politics.

Chuck

 

[chucky2]

Since you've claim to grasp the concept of spending, explain how you pay a bill that is 14.5% of GDP when you're only collecting 14.4% of GDP.

EDIT: Since you have to pay the net interest on the debt as well or be in default, its 15.9% of GDP.

Easy. I make sure I know what bills I have coming in, and match my expenditures with net income to cover them. I run a surplus savings account for emergencies, which I rarely if ever use because I keep my finances in order.

That is, I do everything the Gov should have been doing for the past 40 years.

See how easy that is/was?

Chuck

 

[K1052]

There is 'no notice'. They have been seeing this play out along with the public and the rest of the world for months now. Anyone remotely involved with budgeting already knows the score long before that. There are no surprises here, only politics.

I used the wrong word. Drawdown is what I should have said.

To use your analogy...cutting off the drug supply cold turkey can be damaging or even fatal. A gradual reduction in spending over a number of years is highly preferable to throwing the country immediately into a balanced budget via refusal to raise the debt ceiling or even discuss and potential revenue increases , yet the tea party seems to want that to happen. Given how long this spectacle has gone on a credit downgrade is almost certainly on the way, which will increase our borrowing costs (within the ceiling to roll over the existing debt) by billions.

The feds won't default on the federal debts but but real question is who won't be getting paid. Seniors? The military? Federal agencies? States? College students?

Both parties are steering the country into uncharted political and economic waters for the sake of politics. I'm not sure anyone will fare that well if they loose the economy in a craps game to see which party can eke out a political advantage using this crisis.