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We Have a Spending Problem

FieldTheorist said:
Every successful major enterprise (which is vastly distinct from an individual household) is in debt. It's part of how the modern economy works. Amazon is one of the most successful companies in the world, but it is constantly in the red. The reason for this is that while it's taking in huge amounts of cash every year, it is also investing in what is needed to make money next year. This is similar to how some households will go into the red to pay for college, job training, etc, in order to make more money next year. The difference is that a corporation has a totally different scale to it and dynamics. As such, it is continuously re-investing so it will continually be profitable.

A government is no different. People are happily throwing money into the American government, why do you think there's no hardship for the US to take on debt? It's because people believe that it is a safe bet that they will get their money back with interest, and the reason they believe this is because the US is (or rather, really should be, but isn't doing nearly enough of) continuously investing in its economy, its workforce, its infrastructure, its technology, and its expertise. That means that the US will operate in the red in perpetuity --if it hopes to remain a powerful civilization. The only time the US operated in the black and intentionally so was during Jackson's years, and he nearly bankrupted the country because he halted the economy and caused the worst economic crash in US history until the Great Depression (which itself was in no small measure caused by classical liberalism, i.e. the libertarianism or what we now call neoliberalism --in other words, don't invest in your country's work force, education, infrastructure, or social safety nets and instead give massive tax breaks).

So yeah, too much debt is a problem. But the existence of debt in general is not a problem. A much better thing to think about is what should government money be spent on. That's a much more important question.
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400bn in interest is a problem. 30% of that is money taken right out of my paycheck and paid to China. Thats a big problem for my quality of life.
 
jonny5 said:
Lip service, no one is cutting benefits for those nearing retirement. So again, how about we discuss Part B which is unfunded by 235bn a year, or Part D which is unfunded by 80bn. Or medicaid, schip, food stamps, housing, ag subsidies, roads, nasa, and sure, the military.
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What's "nearing retirement?" I'm not nearing retirement, and I've been paying into these programs for twenty five ****ing years. I will vote against anyone who even flirts with the idea of denying me the benefits that I have earned.
 
jonny5 said:
Democrats voted to increase spending too. It sure is clear to me that you argue from the position of blind partisanship and ignorance.
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Democrats negotiated to give the Children’s Health Insurance Program, which until the most recent stopgap budget deal was starved for funding, another four years of cash, bringing its total extension to a full 10 years. Another $90 billion that the Democrats wanted would be pumped into disaster relief. The Senate plan would also devote $6 billion to the opioid crisis and $20 billion to infrastructure. All of those items are reasonable -- but to get them, Democrats had to accept a 14% increase in military spending, which I think is unwarranted.

Even though the overall budget is larger, Trump's proposed budget would slash spending on Medicare, Medicaid, food stamps, transportation and other essential government services, all while increasing the federal deficit. It's one of the greatest transfers of wealth from the poor and middle class to the rich in generations.
 
jonny5 said:
Easy. Cut everything, and raise taxes on the bottom half that dont pay any. Time for them to pay their fair share, especially when theyre the ones benefiting the most from it. As a group they account for 1.5 trillion in gross income and only pay 32bn in income taxes on it.
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There are two things wrong with this post. The first is sliding from the reality that "the bottom ~50% of tax-payers pay no income taxes," to the bottom 50% pay no taxes." The bottom 50% are taxed on payroll taxes for every penny the earn. Mine cap at ~$120,000. So, they do pay lots of taxes.

Second, I always recommend that when people make suggestions that relate to numbers, they actually look at the numbers. In 2014, the bottom 50% only earned $1 trillion and paid $37.7 billion in federal income taxes at average tax rate of about 3.4%. So, if you double this group's taxes, you are only going to yield another $38 billion, while inflicting pain and hardship. These are people who not only earn little don't have very much left over. So, naturally, that's the group that jonny5 targets for higher taxes, instead of the top 0.1%, who are deciding whether to upgrade from a Gulfstream IV to a Gulfstream V.
 
Helix said:
What's "nearing retirement?" I'm not nearing retirement, and I've been paying into these programs for twenty five ****ing years. I will vote against anyone who even flirts with the idea of denying me the benefits that I have earned.
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You havent earned anything. They are not promises. They are services that you are entitled to if you meet the qualifications, and they can be removed at any time. Only the people who met the quals have earned it.

Nearing retirement would mean 10-15 years. Certainly we can change the 'promise' to those under 18.
 
MTAtech said:
Democrats negotiated to give the Children’s Health Insurance Program, which until the most recent stopgap budget deal was starved for funding, another four years of cash, bringing its total extension to a full 10 years. Another $90 billion that the Democrats wanted would be pumped into disaster relief. The Senate plan would also devote $6 billion to the opioid crisis and $20 billion to infrastructure. All of those items are reasonable -- but to get them, Democrats had to accept a 14% increase in military spending, which I think is unwarranted.

Even though the overall budget is larger, Trump's proposed budget would slash spending on Medicare, Medicaid, food stamps, transportation and other essential government services, all while increasing the federal deficit. It's one of the greatest transfers of wealth from the poor and middle class to the rich in generations.
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Democrats just voted for a 2 year spending bill which increases spending by 300bn per year.
 
MTAtech said:
There are two things wrong with this post. The first is sliding from the reality that "the bottom ~50% of tax-payers pay no income taxes," to the bottom 50% pay no taxes." The bottom 50% are taxed on payroll taxes for every penny the earn. Mine cap at ~$120,000. So, they do pay lots of taxes.

Second, I always recommend that when people make suggestions that relate to numbers, they actually look at the numbers. In 2014, the bottom 50% only earned $1 trillion and paid $37.7 billion in federal income taxes at average tax rate of about 3.4%. So, if you double this group's taxes, you are only going to yield another $38 billion, while inflicting pain and hardship. These are people who not only earn little don't have very much left over. So, naturally, that's the group that jonny5 targets for higher taxes, instead of the top 0.1%, who are deciding whether to upgrade from a L].
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Youre confusing income tax with payroll tax. Payroll tax only pays for Social Security and HI. INCOME TAX pays for everything else, about 2.5 trillion worth of spending (actually only part it, the rest is borrowed). And the bottom 50% pay nearly nothing for that.

And B, its not inflicting pain and hardship. Unless you think this is hardship. Everyone needs to pay their share of taxes, and clealy most of america is not.

https://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017-06-28

40% of America’s lowest-income families’ consumption goes on luxuries
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jonny5 said:
You havent earned anything. They are not promises. They are services that you are entitled to if you meet the qualifications, and they can be removed at any time. Only the people who met the quals have earned it.

Nearing retirement would mean 10-15 years. Certainly we can change the 'promise' to those under 18.
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Yes, I have earned these benefits. I've paid into the programs for my entire career. I also don't support modifying them to make them useless for younger workers.
 
jonny5 said:
Youre confusing income tax with payroll tax. Payroll tax only pays for Social Security and HI. INCOME TAX pays for everything else, about 2.5 trillion worth of spending (actually only part it, the rest is borrowed). And the bottom 50% pay nearly nothing for that.

And B, its not inflicting pain and hardship. Unless you think this is hardship. Everyone needs to pay their share of taxes, and clealy most of america is not.

https://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017-06-28
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A large part of federal spending is Social Security and Medicare. So, it is appropriate to count the revenue collected from the bottom 50% as government revenue. Conversely, the top 0.1% pay almost nothing toward Medicare and Social Security.
 
jonny5 said:
You havent earned anything. They are not promises. They are services that you are entitled to if you meet the qualifications, and they can be removed at any time. Only the people who met the quals have earned it.

Nearing retirement would mean 10-15 years. Certainly we can change the 'promise' to those under 18.
Helix said:
Yes, I have earned these benefits. I've paid into the programs for my entire career. I also don't support modifying them to make them useless for younger workers.
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As Helix said, these are long-term promises. We employees pay into Social Security and Medicaid and the government promises to provide us with monthly payments and health care when we retire.

What the Republicans want to do is steal keep all the contributions paid in by workers and then shave the benefits. Why? Because Republicans are addicted to giving their rich donors tax-cuts -- so reducing outlays makes it easier to cut their taxes and to hell with the needs of the working class.

Members of the working class, who have any brains, should feel rightly betrayed by Trump, who vowed not to cut Social Security, Medicare or Medicaid -- but whose budget cuts all three. Now you know what a Trump University student feels like.
 
wellwisher said:
The Stock market added over $8 trillion in wealth, minus the stock market correction. This surplus of net wealth was based on Trump's promise for a tax cut and tax reform. Trump is in the plus, if you combine the entire country. This is the type of bold investment we need. A new business, when starting out, will run a deficit for several years, until they turn the corner, then they run a profit. They anticipate better times are ahead and will take the risk. The business world saw Trump as a man of his word, and reacted to his promises, even before they were cast in stone. This is sort of how the stock market works; speculation based on anticipated improvements that will reap future profits.

Trump from the beginning, wanted to trim the waste in government. After a year of 100% Democrat obstruction and negative propaganda, to anything Trump does, cutting government waste and fat, although good for the country, would lead to a congressional and senate stalemate. The Republicans do not have the lock step votes, like the Democrats, to make it happen. The only budget deal he could get from the Democrats, so everyone is involved, requires continued waste and higher deficits. Democrats are more comfortable with waste, since that means skim. Trump has not signed any budget into law, yet. This is the opening bid in the negotiations. Trump will trim it back, until he just gets the votes he needs.
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Kindly provide a link that shows a single credible economist that has documented that tax cuts, particularly when executed in a full employment economy are revenue neutral. When you do that, I will produced five to ten times as many cites from economists that will tell you its pure fantasy. Your observations are completely irrelevant because it does not show causality. You just assume (likely wrongly) that there is causality.

When you are done with that, we can go through a similar challenge that tax cuts lead to investment.

There can be a stimulus effect to a tax cut, but one does not try to stimulate a full employment economy with fiscal tools as it can lead to overheating of the economy with consequences that may include interest rate hikes, cost increases, inflation... and perhaps recession.
 
jonny5 said:
And if you want to go off on taxes, the real issue is the half the country that isnt paying ANYTHING towards what general revenue funds. How can we move forward if you're focused on the standard talking points?
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The irony is strong with this one.
 
jonny5 said:
400bn in interest is a problem. 30% of that is money taken right out of my paycheck and paid to China. Thats a big problem for my quality of life.
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A 30-year Treasury purchased in 1996 would have lost about 1.8 points from its 6-7% yield to inflation alone.

$1,000 in 1996 is worth $1535 in 2016. $535 divided by 30 years is $17.83. $17.83 per $1,000 equals 1.78% Yield. The Yield rates in 1996 were between 6-7%. On average over the life of the Treasury, the purchaser would have been paid about $65 per $1,000, but $18 of it evaporated due to inflation, so we were really only paying $47 each year. So about 27% of the yield of those 1996 Bonds is paid for us by inflation, because we were paying back the principal with inflated dollars each year.
 
Helix said:
Yes, I have earned these benefits. I've paid into the programs for my entire career. I also don't support modifying them to make them useless for younger workers.
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No, you havent earned them. There is no legal contract that you are entitled to anything until you qualify for the benefit. All laws and programs and services can change at any time according to the whim of the people.
 
MTAtech said:
A large part of federal spending is Social Security and Medicare. So, it is appropriate to count the revenue collected from the bottom 50% as government revenue. Conversely, the top 0.1% pay almost nothing toward Medicare and Social Security.
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A large part of revenue is payroll tax which pays for that spending, thus its appropriate to cancel it out and ignore. Furthermore, the top .1% pay more than most everyone else towards social security. The average salary is about 40k. Thus their payroll tax contribution is about $3800. The top .1 % caps out at about 120k, thus their contribution is about 8000. So thats TWICE as much as the average person is paying for social security. And the benefit is relative to whats paid in, so its the most fair program out there.
 
MTAtech said:
As Helix said, these are long-term promises. We employees pay into Social Security and Medicaid and the government promises to provide us with monthly payments and health care when we retire.

What the Republicans want to do is steal keep all the contributions paid in by workers and then shave the benefits. Why? Because Republicans are addicted to giving their rich donors tax-cuts -- so reducing outlays makes it easier to cut their taxes and to hell with the needs of the working class.

Members of the working class, who have any brains, should feel rightly betrayed by Trump, who vowed not to cut Social Security, Medicare or Medicaid -- but whose budget cuts all three. Now you know what a Trump University student feels like.
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No govt service is a promise except whats written in the constitution. Federal Code of Laws change. During your lifetime of paying in the amount you pay in, the benefit you receive compared to when you started, will have changed, usually it increases. For example

-cost of living adjustments in 1972
-lower retriement age in 1961
-changes in earnings quals in 2000
-taxing benefits in 1984

All changes made to the promise, which is thus not a promise.
 
Critter7r said:
A 30-year Treasury purchased in 1996 would have lost about 1.8 points from its 6-7% yield to inflation alone.

$1,000 in 1996 is worth $1535 in 2016. $535 divided by 30 years is $17.83. $17.83 per $1,000 equals 1.78% Yield. The Yield rates in 1996 were between 6-7%. On average over the life of the Treasury, the purchaser would have been paid about $65 per $1,000, but $18 of it evaporated due to inflation, so we were really only paying $47 each year. So about 27% of the yield of those 1996 Bonds is paid for us by inflation, because we were paying back the principal with inflated dollars each year.
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But its still being paid. By taxes. Money that could go back in my pocket or reduce borrowing.
 
jonny5 said:
But its still being paid. By taxes. Money that could go back in my pocket or reduce borrowing.
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Correct. I just wanted to show that there's a mitigation factor for debt caused by inflation.
 
upsideguy said:
There can be a stimulus effect to a tax cut, but one does not try to stimulate a full employment economy with fiscal tools as it can lead to overheating of the economy with consequences that may include interest rate hikes, cost increases, inflation... and perhaps recession.
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we have a full employment low wage economy after liberals shipped so many jobs off shore and invited in 30 million illegals to bid down our wages so we are in the odd position of still needing to stimulate. Do you understand?
to raise wages
 
jonny5 said:
So, another way to look at it is, we have more than enough general revenue (2100bn) to pay for all the main functions of govt (1200bn), and enough payroll taxes (1200bn) to pay for Social Security and Hospitals (1200bn), and even a little left over (900bn) to pay for Veterans, Federal Pensions, and interest, but we have to borrow to pay for welfare.
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Oh jonny, what happened to you man. You used to get mad when people who never talked about balancing the budget didn't balance the budget.

jonny5 said:
So there you go, Obama has no interest in balancing the budget. And that is wrong, and nothing can be done about it except voting out congress in 2 years.
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Now you have people who talked about balancing the budget making the deficit worse. And you voted for them to balance it. Don't you feel foolish? Well at least you don't believe President Obama added a trillion to bush's last budget deficit in 2009 anymore. You don't believe that right? right!?
 
Vern said:
Now you have people who talked about balancing the budget making the deficit worse.
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Wrong of course! Politicians are flexible based on the spirit of the times if they want to stay in office. When voters change so must politicians. Nevertheless, Rand Paul, a Republican, stood up for fiscal responsibility and sustainability as did other Republicans while no Democrats did. More importantly, every Republican will stand up the second there is enough support to do so. Do you understand?
 
James972 said:
Wrong of course! Politicians are flexible based on the spirit of the times if they want to stay in office. When voters change so must politicians. Nevertheless, Rand Paul, a Republican, stood up for fiscal responsibility and sustainability as did other Republicans while no Democrats did. More importantly, every Republican will stand up the second there is enough support to do so. Do you understand?
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Yes, I understand perfectly that you're making excuses rather than admit republicans are flaming lying hypocrites concerning deficits. And I understand your excuses are quite pathetic. Republicans wanted to cut spending in the worst recession since the depression, the Great Bush Recession but now that they are in full control thanks to an ignorant base that believed their lies about deficits, the deficit is shooting up.

And what makes your post factually incorrect (in addition to pathetic) is they sent up balanced budget bills when we had a democratic president. So they had no problem "standing up" when they knew nothing would pass. Now they are hypocritically sitting down
 
Vern said:
Yes, I understand perfectly that you're making excuses rather than admit republicans are flaming lying hypocrites concerning deficits.
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You are pretending to yourself that Republicans in office are concrete and don't change as their constituents change. Politicians are inherently flexible representatives particularly when the nation they represent is perfectly flexible and split 50-50 with the center, where the deciding votes are, always shifting. Nevertheless, Rand Paul stood up as did others and everyone will the second there is enough support to do so. Do you understand now? Too subtle for you?
 
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