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Tax cuts or balance budget

What is more important?

  • A balanced budget (no growth in debt)

    Votes: 39 88.6%

  • Tax cuts

    Votes: 5 11.4%
  • Total voters
    44
American said:
How are you getting to the balanced budget?
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For the discretionary budget, the main target area should be the Department of Defense, because it has by far the most wasteful spending. The DoD has a huge number of programs that do absolutely nothing to keep us safe, and that the DoD itself doesn't want, but which some congressperson wants because they bring money to his district. We could also get rid of agriculture subsidies while we're at it due to their gross distortions of global food prices and trade balances, although they won't put much dent in the deficit.

The real money is in entitlements. For social security, we should raise the retirement age by 2 months per year into the indefinite future. We should means-test social security so that people earning more than $200K don't collect it. We should index starting benefits to price inflation instead of wage inflation, and we should index annual increases to a more accurate measure of inflation than the CPI.

We can rein in the costs of Medicare/Medicaid by busting the AMA monopoly on medical licensing. This creates an artificial shortage of medical professionals, which drives the costs up for everyone. We should also allow the government to negotiate the prices that it pays for drugs. The government should impose universal standards for medical documents and fund digitization efforts, since a disgustingly large fraction of each dollar of medical care goes toward paperwork. We should tax health benefits as regular income, to break the link between employment and insurance. And we can nudge people toward high-deductible plans, so that people are protected from major medical expenses but feel the costs of smaller procedures. Also, the government should pay people to get semiannual checkups (and mammograms for women). While it may sound silly for the government to pay people to do something that benefits themselves anyway, this will save money in the long run by avoiding some complicated procedures that will cost the taxpayers money.

And we should raise taxes selectively, in the places it's least likely to cause harm. One good place to start would be to end the home mortgage interest deduction, which is a horrendous distortion of the market and detrimental to the economy as a whole. We could raise $130 billion a year by doing this. Or better yet, it could be part of an overall simplification to the tax code. We should also raise taxes a few percent on the top bracket, and raise estate taxes significantly for the wealthiest estates. As mentioned before, we can also raise revenue by taxing health benefits as income. Finally, we can increase the tax on gasoline.
 
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A balanced budget, hands down. There are things we want, and we have to pay for them. I don't really care what percent of my earnings are paid in taxes. It's all going to get spent on something eventually anyway. I just care about getting what I pay for. If a public program for something like healthcare is more effectively done than the private alternative, I vote for public. I want the best deal for my buck.
 
cpwill said:
it's not a cutting bill; it's just a balanced budget bill. the "how" is TBD, just the "You Must" is to be set into law.
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Oh, I understand. I tend to oppose mandated balanced budgets, since it takes away flexibility from the government. There are times when it is highly beneficial to deficit spend. Spending does benefit the economy, and so when the economy turns down, some short term spending to boost it back up is a positive. This of the situation with this recession we are recovering from: if the budget had been balanced going in, the spending done to help us get out would have been no big deal.
 
Kandahar said:
We can rein in the costs of Medicare/Medicaid by busting the AMA monopoly on medical licensing. This creates an artificial shortage of medical professionals, which drives the costs up for everyone. We should also allow the government to negotiate the prices that it pays for drugs. The government should impose universal standards for medical documents and fund digitization efforts, since a disgustingly large fraction of each dollar of medical care goes toward paperwork. We should tax health benefits as regular income, to break the link between employment and insurance. And we can nudge people toward high-deductible plans, so that people are protected from major medical expenses but feel the costs of smaller procedures. Also, the government should pay people to get semiannual checkups (and mammograms for women). While it may sound silly for the government to pay people to do something that benefits themselves anyway, this will save money in the long run by avoiding some complicated procedures that will cost the taxpayers money.
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Don't forget to allow insurance companies to compete across state lines. Also, removing the requirement that prescription drugs can only be prescribed by MDs will drastically lower medical costs. They got the market cornered.
 
Paschendale said:
A balanced budget, hands down. There are things we want, and we have to pay for them. I don't really care what percent of my earnings are paid in taxes. It's all going to get spent on something eventually anyway. I just care about getting what I pay for. If a public program for something like healthcare is more effectively done than the private alternative, I vote for public. I want the best deal for my buck.
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Except Public Programs have a record of 0-11,586.......in terms of providing anything more effectively than the private alternative.
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Badmutha said:
Except Public Programs have a record of 0-11,586.......in terms of providing anything more effectively than the private alternative.
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I'd love to see where you're getting that number from. It kinda looks like you just made it up. Besides, a public program is more efficient by definition. A privately owned company needs to turn a profit. A public one need only break even. Given the same capital, a public program can produce a better profit. And wouldn't be motivated to try and dupe the public through advertising, since there's no personal gain in moving more product.
 
Redress said:
Oh, I understand. I tend to oppose mandated balanced budgets, since it takes away flexibility from the government.
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see, i tend to look at it more as taking away alcohol from an alcoholic.

There are times when it is highly beneficial to deficit spend.
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and this bill allows for that, but requires larger than a simple majority to approve of it. so in emergency situations, yes; but in situations where the 51% majority party wants pork, no.

Spending does benefit the economy
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no, it doesn't. specifically it removes capital from productive functions and funnels it into less productive functions.

and so when the economy turns down, some short term spending to boost it back up is a positive. This of the situation with this recession we are recovering from: if the budget had been balanced going in, the spending done to help us get out would have been no big deal.
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on the contrary, had we reduced spending and tax rates while balancing the budget in response to this downturn, we would likely already be well and clear out of it; with something closer to the historical growth rates out of a recession and significantly reduced unemployment.
 
cpwill said:
yes that's the POINT. when you cut tax rates you boost economic growth; and you do it even more so when you reduce government spending as well.
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That's what you haven't demonstrated though. Ergo, post hoc ergo propter hoc. The economy did grow, but there is no reason to suspect that had anything to do with the tax cuts. A lot of that "growth" was in real estate, financials, etc., which ended up being pretty disasterous.
 
Paschendale said:
I'd love to see where you're getting that number from. It kinda looks like you just made it up. Besides, a public program is more efficient by definition.
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Only in imaginationland.....

Everything from the DMV to Public Sector Union Slobs represent the antithesis of efficiency........

A privately owned company needs to turn a profit.
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.....and thus delivers a superior product and service. The private sector attains customers via Free Choice and Free Markets......the public sector relies on a monopoly of brute force to get its customers.

A public one need only break even. Given the same capital, a public program can produce a better profit. And wouldn't be motivated to try and dupe the public through advertising, since there's no personal gain in moving more product.
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....thus there is no reason to move any product.....or improve the product.....its why government always delivers a turd sandwhich.
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What about "states rights" though? :(
 
Badmutha said:
Only in imaginationland.....

Everything from the DMV to Public Sector Union Slobs represent the antithesis of efficiency........
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SS has been so efficient it helped fund the US Government.
 
Paschendale said:
Besides, a public program is more efficient by definition. A privately owned company needs to turn a profit. A public one need only break even. Given the same capital, a public program can produce a better profit. And wouldn't be motivated to try and dupe the public through advertising, since there's no personal gain in moving more product.
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This had me on the floor laughing. Ahh, the innocence.

The truth is, a private program has competition. In order for a private program to turn a product, they need to deliver quality service at a lower price. This means there is strong, profit-based incentive to reduce costs.

A public program finds itself in the opposite situation. There is no competition, in a public program. A public program has no incentive to reduce costs and operate efficiently. In fact, a public program has an incentive to acquire more funding and does so be being inefficient and performing poorly to increase staff. It creates work for itself, through increased bureaucracy.
 
Catawba said:
SS has been so efficient it helped fund the US Government.
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and helped leave us with an unfunded liability larger than world GDP. SS is a notoriously bad return.
 
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reefedjib said:
This had me on the floor laughing. Ahh, the innocence.

The truth is, a private program has competition. In order for a private program to turn a product, they need to deliver quality service at a lower price. This means there is strong, profit-based incentive to reduce costs.

A public program finds itself in the opposite situation. There is no competition, in a public program. A public program has no incentive to reduce costs and operate efficiently. In fact, a public program has an incentive to acquire more funding and does so be being inefficient and performing poorly to increase staff. It creates work for itself, through increased bureaucracy.
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Further to your point: Let's say there are two people making Product 'X'. Person 1 is better than Person 2 at making 'X'. The government is looking for help making product 'X' in a public program. Person 1 has practically unlimited profitability by making 'X' in the private sector, because he is the best. So he refuses to work for the government, understandably. Person 2 will have a difficult time keeping afloat making product 'X' in the private sector, especially with Person 1 as competition. So person 2 works for the government.

The government will always be hiring the second best. They can never have efficiency like the private market does because those that are the best in their fields will never work for the government.
 
cpwill said:
and helped leave us with an unfunded liability larger than world GDP. SS is a notoriously bad return.
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Only because the money the money that was taken from it was never repaid. Too bad we didn't listen to Gore and put the funds in a lock box. We decided to go with the beer drinker instead. Actions have consequences. Fortunately, we can still lock those funds from being used offset other government spending like our optional wars, and raise in the FICA cap is all that is required to fix that problem.
 
reefedjib said:
This had me on the floor laughing. Ahh, the innocence.

The truth is, a private program has competition. In order for a private program to turn a product, they need to deliver quality service at a lower price. This means there is strong, profit-based incentive to reduce costs.

A public program finds itself in the opposite situation. There is no competition, in a public program. A public program has no incentive to reduce costs and operate efficiently. In fact, a public program has an incentive to acquire more funding and does so be being inefficient and performing poorly to increase staff. It creates work for itself, through increased bureaucracy.
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There is not a single insurance company that operates with less cost for management than M/M.
 
Catawba said:
There is not a single insurance company that operates with less cost for management than M/M.
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First off, you got a link to go with that claim?

Secondly, you talk about management. Nice strawman.

Thirdly, if service overhead is lower for for-profit, allowing more money to pay for quality management reimbursement and still make a profit and still offer lower premiums, sounds like a win to me. As fredmertz points out, the best and brightest do not look to get hired by the government.

Fourthly, is the service commensurate?

Finally, looking at Medicare, the future finances are a complete wreck, as the dominant factor in the future of federal budgets.

Costs and funding challenges

The costs of Medicare doubled every four years between 1966 and 1980. According to the 2004 "Green Book" of the House Ways and Means Committee, Medicare expenditures from the American government were $256.8 billion in fiscal year 2002. Beneficiary premiums are highly subsidized, and net outlays for the program, accounting for the premiums paid by subscribers, were $230.9 billion.

Medicare spending is growing steadily in both absolute terms and as a percentage of the federal budget. Total Medicare spending reached $440 billion for fiscal year 2007 or 16% of all federal spending and grew to $599 billion in 2008 which was 20% of federal spending. The only larger categories of federal spending are Social Security and defense. Given the current pattern of spending growth, maintaining Medicare's financing over the long-term may well require significant changes.

According to the 2008 report by the board of trustees for Medicare and Social Security, Medicare will spend more than it brings in from taxes this year (2008). The Medicare hospital insurance trust fund will become insolvent by 2019. Shortly after the release of the report, the Chief Actuary testified that the insolvency of the system could be pushed back by 18 months if Medicare Advantage plans that provide more health care services than traditional Medicare and pass savings onto beneficiaries were paid at the same rate as the traditional fee-for-service program. The New York Times wrote in January 2009 that Social Security and Medicare "have proved almost sacrosanct in political terms, even as they threaten to grow so large as to be unsustainable in the long run."

Spending on Medicare and Medicaid is projected to grow dramatically in coming decades. While the same demographic trends that affect Social Security also affect Medicare, rapidly rising medical prices appear a more important cause of projected spending increases. The Congressional Budget Office (CBO) has indicated that: "Future growth in spending per beneficiary for Medicare and Medicaid—the federal government’s major health care programs—will be the most important determinant of long-term trends in federal spending. Changing those programs in ways that reduce the growth of costs—which will be difficult, in part because of the complexity of health policy choices—is ultimately the nation’s central long-term challenge in setting federal fiscal policy." Further, the CBO also projects that "total federal Medicare and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in 2050 and 19 percent in 2082—which, as a share of the economy, is roughly equivalent to the total amount that the federal government spends today. The bulk of that projected increase in health care spending reflects higher costs per beneficiary rather than an increase in the number of beneficiaries associated with an aging population."

Financial viability

Richard W. Fisher, President of the Federal Reserve Bank of Dallas has remarked that in order to "cover the unfunded liability" for the Medicare program today over an infinite time horizon,[clarification needed] "you would be stuck with an $85.6 trillion bill" which is "more than six times the annual output of the entire U.S. economy", and noted that "Medicare was a pay-as-you-go program from the very beginning."
The present value of unfunded obligations under all parts of Medicare during FY 2009 over an infinite horizon is approximately $36 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the shortfall assuming the program continues indefinitely.

Aging of the population

The fundamental problem is that the ratio of workers paying Medicare taxes to retirees drawing benefits is shrinking, and at the same time, the price of health care services per person is increasing. Currently there are 3.9 workers paying taxes into Medicare for every older American receiving services. By 2030, as the baby boom generation retires, that is projected to drop to 2.4 workers for each beneficiary. Medicare spending is expected to grow by about 7 percent per year for the next 10 years. As a result, the financing of the program is out of actuarial balance, presenting serious challenges in both the short-term and long-term.

Fraud and waste

The Government Accountability Office lists Medicare as a "high-risk" government program in need of reform, in part because of its vulnerability to fraud and partly because of its long-term financial problems. Fewer than 5% of Medicare claims are audited.
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cpwill said:
and helped leave us with an unfunded liability larger than world GDP.
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GDP is a snapshot of one year. Social security's liabilities are a snapshot of 30-50 (or more) years. Comparing them is meaningless. Social security solvency is manageable with a few minor changes.

cpwill said:
SS is a notoriously bad return.
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It certainly is. But in terms of our nation's balance sheet, it's not going to bankrupt us. Whether or not it's a worthwhile program is a separate argument.
 
reefedjib said:
First off, you got a link to go with that claim?

Secondly, you talk about management. Nice strawman.
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You disputed the claim that, "a public program is more efficient by definition." The greater efficiency of the Medicare program provides evidence to back up that claim.

Medicare vs. Non-Government (Private) Health Insurance - Health Care Reform - ProCon.org



Finally, looking at Medicare, the future finances are a complete wreck, as the dominant factor in the future of federal budgets.
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That is the same problem we have been dealing with under private insurers, health care costs. That is why we need a single payer system like the rest of the First world nations.

It has nothing to do with Medicare's lower administrative costs.
 
Catawba said:
You disputed the claim that, "a public program is more efficient by definition." The greater efficiency of the Medicare program provides evidence to back up that claim.

Medicare vs. Non-Government (Private) Health Insurance - Health Care Reform - ProCon.org
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Not when you look at admin cost per beneficiary, which is the correct way to look at it.

Medicare - $509
Private insurers - $453

That is the same problem we have been dealing with under private insurers, health care costs. That is why we need a single payer system like the rest of the First world nations.

It has nothing to do with Medicare's lower administrative costs.
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Medicare covers the elderly. The ratio of elderly to workers is increasing. the cost of healthcare is increasing and the number of problems the elderly have is increasing. Medicare costs are increasing faster than private insurer costs.

This does not mean single payer is the solution.
 
Catawba said:
And pumpkins are available in October.
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His comment was relevant, yours was not.

Do you not realize that since that the "return rate" on SS is from US treasuries, the interest paid on it is not actually a return, but rather the us taxpayer just paying it off via FIT.
There is no return rate on SS that isn't paid for by taxpayers, in one form or another.
 
reefedjib said:
Not when you look at admin cost per beneficiary, which is the correct way to look at it.

Medicare - $509
Private insurers - $453
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I provided evidence from 5 different studies of the issue and you provided your opinion. I think I will go with the studies but thanks for your opinion.
 
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