Deficits are exploding – and neither party seems to care

[JasperL]

Now we are getting somewhere.

Because we have a unified budget any move made or any change year to year impacts our overall fiscal condition and that includes association to our economy of which the government is an active participant in.

Trump's tax cuts took a portion of revenue out of the equation, the overall fiscal condition of the nation is slightly worse resulting in increased deficits, of which Trump's actions are a contributor to.

Worse, all of this is happening at a time when the economy is doing well and potentially approaching the next economic pullback. This is a time where deficits should be declining, as they were before Trump and the 115th Congress changed a few things.

Now we can argue all day long about a decades old decision on impacts and why we went to a unified budget, argue about the costs of Medicare or Social Security (or any other part of the unified budget.) But at the end of the day all revenue is a source for that unified budget and all outlays are an expenditure for that unified budget. Ideologically we can disagree on any revenue and any spending, but they are all linked and have been for decades now no matter if you agree with those aged decisions or not.

Social Security benefits being more than what was received in a given year, or costs of Medicare going up, or the spending for any area of the government going up does not remove the liability of Tax Cuts changing revenue. It all matters and it is devoid of reality to ideologically decide one change is a fault and another is not when it is all unified.

Yes, basically the unified budget means we're on pay as you go for everything, including Medicare and SS, and have been forever. That's why the right wing talking point - "47% pay no taxes!" is so intellectually dishonest. Anyone working and getting a paycheck pays payroll taxes, and that money funds general expenditures same as income taxes do, and income taxes and payroll taxes fund entitlements like Medicare and SS. They're all government revenues and government expenditures and a unified budget means there is no real distinction between payroll taxes paid by nearly everyone working, and income taxes.

So this thing about the "trust funds" running out is really a distraction. Whatever requirement that SS and Medicare be paid out of current taxes or accumulated "trust funds" is easily changed with legislation. The issue is that for decades, starting in earnest with Reagan, surpluses from payroll taxes have been used to fund general government. That was fine, of course, because it allowed income taxes to remain lower than they'd have been without workers contributing more in payroll taxes than it cost to fund entitlements.

Now that that's reversing, and we'll have to collect MORE in income taxes to reimburse the borrowed 'trust fund' expenditures over the decades, it's a crisis!!! It's not a crisis, it's a problem of political will, what our priorities are. I have no doubt this "crisis" will be solved by either lowering benefits or jacking up payroll taxes so that we again run 'trust fund' surpluses, which again allows income taxes to remain lower than they'd otherwise be.

 

[Conservative]

Lower revenues contribute to the deficit as well.

Revenue minus expenditures = surplus (deficit).

This is really getting old dealing with you. Do you have a solution? We have a choice in 2020, Trump or one of the socialist running for the Democratic ticket, who is your choice?

 

[Conservative]

Of course it is relevant, and you’ve admitted why.

It does not matter how many times you try to divorce revenue sources. Since the late 60s we have gone through periods where Social Security assets went up year on year (took in more intergovernmental debt than cashed out) and other periods where it fell (the exact opposite.) Either way we see general ledger impact as the transactions still occur positive or negative.

What you repeatedly fail to understand is all influences on the nation’s fiscal position are impacted by all choices made by Congress and the President, including changing tax revenue streams.

Praising one choice and chastising the other suggests a fundamental lack of understanding on your part as to what determines the fiscal position of this nation for a given year. We know deficits are going the wrong direction, and we know Trump’s tax cuts added to that reality.

So you have no problem covering for the abuse of the SS and Medicare trust fund money by raising taxes thus never holding bureaucrats responsible for that misuse of funds?

Praising what source? allowing people to keep more of what they earn benefits the people not the bureaucrats and raising taxes doesn't assure that the funds will be used to lower the deficit but as history shows will be used for more social engineering and more dependence. Do you have a solution, of course not you just want the issue. What will raising taxes on the rich do to the deficit? Any consequences in your world for raising taxes?

 

[Conservative]

Correct! But you're conveniently missing the point.

SS and Medicare taxes funded the military, and all that other discretionary spending for decades as we ran big surpluses in the payroll tax accounts and massive deficits in the non-trust fund ledger. In Reagan's last year, we used about $125 billion in trust fund surpluses to offset part of a $250 billion deficit in the rest of the budget. That's because Ronnie lowered income taxes for the wealthy, then jacked up payroll taxes on working people, and used excess payroll taxes to offset his big income tax cuts.

So the government has since then used MY payroll tax contributions to fund lower income taxes. Now that we're digging into the surpluses it's time to raise income taxes to pay back that borrowed money from the trust funds.

Yes, that is true, does that make it right? Why should the taxpayers fund the abuses of the Congress and misuse of the taxdollars received? Your solution is what? This argument of tax cuts for the rich is old but seems to resonate with radicals like you. those evil rich people pay 40% of the FIT dollars collected and 44% of income earners pay zero. Lowering payroll contributions has nothing to do with funding tax cuts because tax cuts aren't an expense.

 

[OrphanSlug]

So you have no problem covering for the abuse of the SS and Medicare trust fund money by raising taxes thus never holding bureaucrats responsible for that misuse of funds?

Praising what source? allowing people to keep more of what they earn benefits the people not the bureaucrats and raising taxes doesn't assure that the funds will be used to lower the deficit but as history shows will be used for more social engineering and more dependence. Do you have a solution, of course not you just want the issue. What will raising taxes on the rich do to the deficit? Any consequences in your world for raising taxes?

Before we get into the partisan dribble all over the rest of your post, define “holding bureaucrats responsible for that misuse of funds.” By doing what?

 

[JasperL]

This is really getting old dealing with you. Do you have a solution? We have a choice in 2020, Trump or one of the socialist running for the Democratic ticket, who is your choice?

LOL, I could not agree more!

 

[Conservative]

Before we get into the partisan dribble all over the rest of your post, define “holding bureaucrats responsible for that misuse of funds.” By doing what?

Oh, I don't know how about term limits like the states have?

 

[Conservative]

LOL, I could not agree more!

No could I, same tired old rhetoric totally ignoring the issue

Do you have a solution? We have a choice in 2020, Trump or one of the socialist running for the Democratic ticket, who is your choice?

 

[JasperL]

No could I, same tired old rhetoric totally ignoring the issue

Do you have a solution? We have a choice in 2020, Trump or one of the socialist running for the Democratic ticket, who is your choice?

:2wave:

 

[Conservative]

:2wave:

Good choice on your part as you aren't looking very good in this debate. We all know that liberals are whiners and complainers never having or offering any solutions to the problems. Always wanting the issue then running when challenged.

 

[Kushinator]

Good choice on your part as you aren't looking very good in this debate.

:lamo

You actually believe you're holding your own.

 

[Kushinator]

Lowering payroll contributions has nothing to do with funding tax cuts because tax cuts aren't an expense.

When the Obama administration did a payroll tax moratorium... you undoubtedly had no problem with such a measure because tax cuts aren't an expense.

 

[Conservative]

When the Obama administration did a payroll tax moratorium... you undoubtedly had no problem with such a measure because tax cuts aren't an expense.

SS and Medicare ARE!!

 

[Kushinator]

SS and Medicare ARE!!

So is funding to the Department of Education, the military, or... the wall!!!!

Your hypocrisy has been exposed once again. Thanks for playing Conman!:2wave:

 

[Conservative]

So is funding to the Department of Education, the military, or... the wall!!!!

Your hypocrisy has been exposed once again. Thanks for playing Conman!:2wave:

Show me a line item in the budget for tax cuts? Medicare and SS are funded by FICA and are a long term obligation thus an expense. Federal Income Taxes don't fund SS and Medicare as that wasn't the intent of FIT. You obviously have no idea what taxes you pay or their purpose

 

[OrphanSlug]

Oh, I don't know how about term limits like the states have?

I have no issue with that, however for now reality means realization that Trump's tax cuts had a budget impact (as all other things do for a unified budget.)

 

[Conservative]

I have no issue with that, however for now reality means realization that Trump's tax cuts had a budget impact (as all other things do for a unified budget.)

So you honestly believe we would have had 3.2% GDP growth, 2 trillion dollars added to GDP, 5 million jobs created, record state and local revenue, record charitable contributions without the tax cuts?? Do you understand the components of GDP especially the number one component that generates approximately 2/3 of GDP growth?

 

[OrphanSlug]

So you honestly believe we would have had 3.2% GDP growth, 2 trillion dollars added to GDP, 5 million jobs created, record state and local revenue, record charitable contributions without the tax cuts?? Do you understand the components of GDP especially the number one component that generates approximately 2/3 of GDP growth?

Just so I am clear... now you are saying adding to deficits is okay so long as the economy gets the boost?

 

[Conservative]

Just so I am clear... now you are saying adding to deficits is okay so long as the economy gets the boost?

My point always has been spending causes deficits not tax cuts and the tax cuts stimulated enough economic growth and revenue to pay for the line items that Federal Income taxes are supposed to pay for, not items they weren't like SS and Medicare, highway funding with the missing link being debt service which increased due to 7 interest rate hikes since Trump took office. FIT funds interest expense as well and there wouldn't be an "exploding" deficit if the items to be funded by FIT were indeed the only items funded by FIT

 

[Visbek]

It has been obvious to me that it’s going to be a mess trying to bring down the debt. The best place to start is to shut down some government agencies. The only other way is to inflate our way out if it. Other than that, gutting entitlements is the last resort to save the USA.

Oh, really?

Let's start with some basics. Namely: Government debt is not always a problem. In fact, the world's economy would be completely up the creek if the US government wasn't issuing tons of debt, because US securities are considered one of the safest investments in the world. Also, conservatives have been screaming about the awfulness of debt since the 80s, and yet the disaster never actually happens.

Debt is really only an issue if it becomes so large that we can't pay off the interest. In 2017, we spent $262 billion on net interest. Since total receipts were around $3.3 trillion, it's pretty clear we don't have to worry about defaulting any time soon.

This does not mean we should just spend whatever we want and never worry about the debt. But it does mean that, well... most of the complaints are just BS, and really an excuse to cut social programs or try to shrink government, and that never works -- as should be obvious from decades of failures to do just that. (See below)

Anyway. It looks like quite a few people have already pointed out that you're ignoring revenues. Seems pretty obvious that should be on the table as part of the solution.

Another key element you've overlooked is: What is the federal government actually funding?

Defense: $600 billion (15% of total federal spending)
Social Security: $944bn (24%)
Medicare: $600bn (15%)
Medicaid and other health spending: $533bn (13%)
VA: $176bn (4%)
Interest: $262bn (4%)

That's $3.1 trillion or 75% of federal spending, and there is very little interest in cutting any of it. We could literally slash everything else the federal government does and it would STILL take 110 years to pay off the debt.

In fact, when you ask Americans, most of them don't want to cut anything.
Little Public Support for Reductions in Federal Spending | Pew Research Center

There is one teeny, tiny, bright spot. The trade deficit with China is falling. That is about all.

In case no one corrected this nonsense already:

1) No, the trade deficit with China is not falling.
2015: -$367bn
2016: -$346bn
2017: -$375bn
2018: -$419bn

2) Foreign trade deficits have pretty much nothing to do with the federal deficit or debt.


Feel free to grind your teeth and fume at federal spending, but in the long run, it's pretty much pointless. Republicans don't want to raise taxes, and no one wants to cut spending. It's not happening.

 

[OrphanSlug]

Just so I am clear... now you are saying adding to deficits is okay so long as the economy gets the boost?

My point always has been spending causes deficits not tax cuts and the tax cuts stimulated enough economic growth and revenue to pay for the line items that Federal Income taxes are supposed to pay for, not items they weren't like SS and Medicare, highway funding with the missing link being debt service which increased due to 7 interest rate hikes since Trump took office. FIT funds interest expense as well and there wouldn't be an "exploding" deficit if the items to be funded by FIT were indeed the only items funded by FIT

That is not the question at all, so I'll repeat it.

Just so I am clear... now you are saying adding to deficits is okay so long as the economy gets the boost?

 

[Conservative]

That is not the question at all, so I'll repeat it.

Just so I am clear... now you are saying adding to deficits is okay so long as the economy gets the boost?

The answer is simple, deficits wouldn't happen if the tax money allocated for a specific line item wasn't used for other purposes leaving a shortfall in that category such as was done with SS and Medicare over the past few decades. Deficits aren't okay when the funding is in place for specific items such as highways, SS and Medicare. I suggest you stop playing games here, pay attention to the taxes you pay and their purpose before placing blame.

 

[OrphanSlug]

The answer is simple, deficits wouldn't happen if the tax money allocated for a specific line item wasn't used for other purposes leaving a shortfall in that category such as was done with SS and Medicare over the past few decades. Deficits aren't okay when the funding is in place for specific items such as highways, SS and Medicare. I suggest you stop playing games here, pay attention to the taxes you pay and their purpose before placing blame.

You went this direction, all on your own... so why are you avoiding the question?

 

[Conservative]

You went this direction, all on your own... so why are you avoiding the question?

Not avoiding the question at all, addressing the so called exploding deficits that have absolutely nothing to do with tax cuts but rather abuse of the tax dollars by career politicians who get power from people like you who never questions the abuse and always supports raising taxes to fund that abuse

 

[OrphanSlug]

Not avoiding the question at all, addressing the so called exploding deficits that have absolutely nothing to do with tax cuts but rather abuse of the tax dollars by career politicians who get power from people like you who never questions the abuse and always supports raising taxes to fund that abuse

... and yet again you straddle the fence on what it means to have a unified budget, that you also brought up all on your own.