Wednesday, July 27, 2011

The Truth... Ain't It a Bitch?



Five Facts About the Debt,
Setting the economic record straight.

Ira Stoll | July 25, 2011

"Five under-appreciated points about the federal budget and debt ceiling:

1. Whenever I need to get my bearings in the debate over the debt, the deficit, or the debt ceiling, I go to the web site of the White House Office of Management and Budget and download historical table 1.3. The story it tells, in very round numbers, is as simple as 2, 3, 4. The federal government spent about $2 trillion in 2000, at the end of the Clinton administration. It spent about $3 trillion in 2008, at the end of the Bush administration. And it is going to spend about $4 trillion in 2011, three years into the Obama administration.

You can fool around with inflation and with the percentage of GDP and with the revenue side of the equation, but the bottom line is that the federal government is spending about double what it was at the end of the Clinton administration. For all the clamor on the left to bring back the Clinton-era top tax rates, there are few, if any, politicians in Washington talking about bringing back the Clinton-era spending levels."

This article was on Reason online and I have looked at the link to the White House OMB and found it very interesting. "Should I be surprised that the (insert Reason here)fucking Online disagrees? Really?"

The lefties in power and the righties in power do not have the answer. Thank goodness Independents ARE the fastest growing portion of the electorate. In Arizona, Independents now outnumber Democrats and the Republican rolls are down also. This is where I am placing my faith.

BTW, I did not see any attribution for the graph in this thread. Can you rectify this?

csm said...

I can. It is from The Atlantic.


Not a lot of argument from me on the chart you provided. A couple of things though...

1. Most people forget the reason behind the original tax cuts. If we open up our history books, when Bush (the Terrible) came to office we supposedly had a surplus(which every good Progressive loves to talk about but had more to do with the arcane business of government accounting practices which the private sector would go to jail for, i.e. not accounting for future government employee benefits and retirement)which Mr. Terrible wanted to give back to the taxpayers. Unfortunately for the shitty President, the world intervened and he just couldn't control his neocon desires, along with the desires of much of his neocon staff to keep us out of any major war with other countries which should always be rare.

Add to this the discovery that Republicans were just as prone to build up a strong and powerful federal government as the other side, instead of toeing to their supposed mantra of small government, and we see the fallacy of the tax cuts. So the tax cuts weren't evil in and of themselves; it is just that the federal government run at the time by Republicans didn't follow through by cutting the spending which is the real problem.

2. Throughout our economic history of the last several decades our federal government averages about 19% of GDP in tax revenue collection(please look at the chart the story referenced). This has been pretty consistent in high tax rate eras and lower tax rate eras. In high tax rate eras, people in the upper brackets either sheltered(legally, as government is always manufacturing loopholes to satisfy some perceived need or persons) more money or purposely didn't try to make as much as they could(who wants to wave goodbye to 91% of the bulk of their "excessive" earnings). Even in low tax eras, tax revenue averaged 19%. So the main problem we have today isn't tax revenue(even if we were to get significantly more than 19%, the fuckers will spend it as fast as it comes in) it is spending; spending by Republicans and Democrats alike.

3. In many ways the federal government is the same as that boogeyman, the middle man. For example, when I pay my federal income tax along with everyone in my state and everyone else in all the 49 other states and our territories, some of that money goes to the Dept. of Education. What does the Dept. do with the money but send it back to the states. The feds don't run our schools, they don't teach our kids. So what we have here, my friend, is a fucking middleman and no one really likes a middleman, do they?

csm said...

1. Makes a lot of sense. I was not for the tax cuts for the rich then, and I am not for them now. I am for a complete revamping of the tax code. I'd do away with all loopholes and all deductions (like for a mortgage and for kids).

2. The problem is always what spending to eliminate. Everyone crows about the gov't spending too much but then when the rubber meets the road and their favorite item is on the block (be it social security, military, corn subsidies or health care) then it becomes a different tune.

3. To me, it depends a great deal on what, exactly, the middleman is up to.


1. The only moral way to fund the federal government is to stop taxing people for putting into society(starting a business, working at your job, investing(which creates jobs and businesses)and to tax when people take out of society, when they purchase goods and services. This does two things, it puts the decision to get taxed in the hands of the taxee(man do I love personal liberty) and makes the government live with what the citizenry decides to do, especially when times are bad. If the federal government was only doing what it should do and stayed away from indiscriminate warfare, this wouldn't be much of a problem.
The usual retort is that this is very regressive. To combat this, I would exclude food from the tax and as I mentioned earlier, I would tax services like lawyering and doctoring. Rich people use lawyers more then the poor. Rich people don't go out and buy Chevy Aveos, they buy Lexus' and Mercedes and they always will. A National Sales Tax does poorly in polling, but I wonder about the question asked, as I feel the respondents aren't actually envisioning a drastic reduction and even eradication of the federal income tax when answering this question.

2. When we can get serious people who only want the federal government the country needs(I squint my eyes and let my mind wander a bit I can see a Congressional session lasting a month at most and a President who wouldn't get us into any war not specifically intended to protect our sovereign lands and JUST enforces the laws the one month Congressional session enacts)there would be no corporate welfare, no farm subsidies(blast! I am redundant), no bailouts, no Depts of Education, Commerce, Transportation, Health and Human Services, no Fannie Mae or Freddie Mac, none of this shit. There is a ton more which could be cut and most people would hardly notice. I have been saying for years that the separate branches of the military could be combined into a simple U.S. Armed Forces; imagine how much that would save getting rid of much of the military hierarchy.

3. Please explain to me a situation(especially in this Internet Age)when a middle man is a good thing. Getting advice and paying for it is not what I am talking about. Somebody taking a cut of the final purchase price just to facilitate the purchase, especially when it is mandated by a governing authority, is not a good thing. When the Dept. of Education receives federal tax revenue just to send it back to the states, after taking it's cut(how else do these bureaucratic salaries get paid), is a textbook definition of a middleman to me.



Social Security- tax every dollar earned(I believe people aren't taxed on any earnings after $82,000. I could be wrong on that figure, but I know there is a point when wages don't get taxed), means testing and a slow faze out of the current system replaced by private savings accounts(why we keep trusting politicians with this pot of money when they have proven time and again they can't be trusted to keep their hands off is beyond me) will keep SS solvent for enough time to transition to the private accounts.

2. Medicare-I have talked ad nauseum about Health Care Savings accounts so I won't go into detail here, but even with the poor who we could just give them the yearly sum to take care of their health needs, anything left over(by their own decisions, more personal liberty)will help build wealth unlike the total control method our federal government uses. Helping people to get the health care they need with a chance for them to build wealth yearly, hmmmm, a win-win situation to me.

Medicaid- Block grants to the states until we cut out the middle man for good and then the states take care of their poor, which should be easier when they are able to stop sending so much money to Washington. With 50 states working on the problem, think of all the potential solutions to helping the poor. And if you think about it every state's needs in this area aren't always the same as other states. One size fits all solutions rarely satisfy the most people, just the bureaucrats in Washington who can go to bed at night thinking they know what is best even if their heads are in the clouds.

Truth said...

The truth truly is, however this chart is one no economist lays claims to. Some anonymous blogger posted this joke.

If only this complete failure of a POTUS could live up to this chart.

csm said...

Truth, you're gonna have to change your moniker to liar. The "anonymous blogger" is James Fallows. He is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. At one point he also worked as President Carter's chief speechwriter.

csm said...

Additionally, the data behind the chart comes from the Congressional Budget Office and the Center on Budget and Policy Priorities.

Truth said...

Then post the link. I have yet to find it and seeing where we are in the debt crisis, it just is not possible. I believe you are withholding information to make this POTUS look good.

Have you not come to grips with the total failure this guy has been? he has got to go.

csm said...

csm said...