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Or without CUTTING services...impossible?

A recent REASON magazine article asked:

quote:
Can America really reduce its debt and deficit without raising taxes to job-killing rates or cutting essential services to developing-world levels? The answer is not simply yes, it's that we have to.


Yes, we have to...according to the National Commission on Fiscal Responsibility and Reform report the annual deficit is 9% of GDP at $1.4 Trillion. The federal debt is a whopping 62% of GDP and if we keep our blinders on, and keep going the debt will exceed the entire economy by 2025.

Or as the report says: "America's long-term fiscal gap is unsustainable".

The crazy and ironic thing, the report recommends what seems to be very mild solutions...that Congress "hold spending in 2012 equal to or lower than spending in 2011," "return spending to pre-crisis 2008 levels in real terms in 2013," and "limit future spending growth to half the projected inflation rate through 2020."

If congress would adhere to these very mild spending restrictions our gigantic, bloated, and over bearing federal government could continue on.

But even these "mild" solutions will never be considered, because politicians and special interest groups start throwing around terms like "draconian", "destroy", "old people suffer", and "children die", etc when it is suggested that various agencies and programs do with a 4% increase instead of 5% over 10 years. Please note the report is NOT suggesting cutting programs or budgets...but cutting the INCREASE.

The following graph has been posted by others before. It seems to be an economic truth. Progressives want to raise taxes on the "rich" to get us out of debt, but not only is raising taxes bad policy it's also very hard to get sustained revenue by doing so...Federal government tax revenues have been at 18% of GDP for over 60 years despite jacking up or cutting the income tax rate:




Solution seems to be pretty much common sense, the government needs to keep it's spending at 18% of GDP. But as we know, there's a shortage of common sense in DC.

The CBO offers a pretty good solution. They have produced a long term budget with the Bush tax cuts staying in place. Over the next decade: "government revenues would remain at about 19 percent of GDP, near their historical averages."

quote:
A balanced budget in 2020 based on 19 percent of GDP would mean $1.3 trillion in cuts over the next decade, or about $129 billion annually out of ever-increasing budgets averaging around $4.1 trillion. Note that these are not even absolute cuts, but trims from expected increases in spending.


Once again notice the article mentions "not even absolute cuts, but trims from expected increases in spending"...We are talking about a 3.6% cut each year to get balanced in 10!

Are we really going to give serious consideration to a politician or special interest group that says a frikin' 3.6% cut is "outrageous"?

And I hate to repeat myself...but remember a "cut" in DC is not really a cut, it's a cut in the increase...

The article concludes:

quote:
Are our leaders willing and able to identify and cut just $25 billion in waste and excess out of more than $700 billion in non-defense discretionary spending? Is reducing the $714 billion the Department of Defense received in 2010 by a paltry $25 billion impossible? Can Medicare and Medicaid, two programs that are infamous for waste and fraud and cost well over $720 billion in 2010, find $35 billion in efficiences? The specific cuts should be open to negotiation, but the historical record shows that the available level of government revenue is fixed.

If these sorts of small but systematic trims are impossible over the next decade, then really nothing is possible and debt, deficits, and despair are here to stay.

**************************

The Constitution. Every Issue, Every time. No Exceptions, No Excuses.

 

"When the people fear the government, there is tyranny. When the government fears the people, there is liberty."---Thomas Jefferson

 

"That's what governments are for... get in a man's way."---Mal Reynolds Capt. of Serenity, "Firefly-Class" spaceship

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FWIW, the national debt is around $13.8trillion and the 2009 GDP is about 14.8trillion, which puts the debt to GDP ratio closer to 90%. What an I missing?

I think history will repeat what we saw in 2000: the US had close to a balanced budget, and the opportunity to pay down the debt was near, but the tax rates and subsequent revenues were cut to appease the Repubs, and the rest is history. It will not be sufficient to just balance the budget, there has to be some progress in paying down the national debt.

The interest on the debt which is the third largest component of the fedgov budget will eclipse defense spending in 3-5 years, that is $600-700billion dollars annually of juice as the loan sharks call it, just to stay even.
quote:
Originally posted by JuanHunt:
FWIW, the national debt is around $13.8trillion and the 2009 GDP is about 14.8trillion, which puts the debt to GDP ratio closer to 90%. What an I missing?


I don't know, here's a LINK TO THE REPORT

quote:
Originally posted by JuanHunt:
I think history will repeat what we saw in 2000: the US had close to a balanced budget, and the opportunity to pay down the debt was near, but the tax rates and subsequent revenues were cut to appease the Repubs, and the rest is history. It will not be sufficient to just balance the budget, there has to be some progress in paying down the national debt.


Yes we need to pay down the debt...but the point of the article and my post wasn't about Dems or Repubs...

It's an absolute distortion of reality and history to say "if we just would do what the democrats want" all would be rosy...which you always seem to imply.

That's why I included the chart...the Bush tax cuts or any tax cuts or tax increases havenn't caused anything...historically, no matter the rate, government revenues hit about 18% GDP.

But for arguments sake, if you look at the chart, it is clear where 2 of the high points of tax revenue are located.

That's the reality the federal government and their future budgets need to reflect...revenues will not be more than 18% GDP.
Here is a pie chart of the 2009 budget (although I admit it is a site with a stated agenda)
http://www.warresisters.org/pages/piechart.htm

If you were king of the country, what would you cut that would make a significant difference in the expenditure, and yet still maintain enough to keep this country in the 21st century ?
WHAT WOULD YOU CUT ??

Truth is that it takes BOTH frugal budget AND sufficient revenue to support our country.
If all of the things most people whine about were completely cut out of the budget it would make very little difference. YOU GOTTA HAVE BOTH MORE REVENUE AND REDUCED SPENDING.
quote:
Originally posted by seeweed:
Truth is that it takes BOTH frugal budget AND sufficient revenue to support our country...YOU GOTTA HAVE BOTH MORE REVENUE AND REDUCED SPENDING.



Did you read the CBO projection linked above?

Bush tax cuts stay in place...3.6% cut in the approx $4 trillion annual budget...that's about $129 billion out of $4 trillion and that gets us balanced in 10 years.

And the 3.6% cut is a "Washington" cut...that is not an absolute cut...but a cut in the increases.

3.6%.

And look again at the chart of the history of tax revenue. This chart has been posted many, many times, but historical fact remains ignored.

No matter what the tax rate is...sky high...or moderately lower...tax revenue does not go higher than about 18% of GDP.
I more or less did scan it.
If you read it it says just about what I have been saying, it is necessary to raise taxes and lower spending.
I am somewhat confused how you can add $0.15/gal to the cost of gas in taxes and not call that a tax increase .
I am also confused how you eliminate virtually all deductions from taxes and not call that a tax increase.
There are several other things there like that, but I think you get the point.
BTW, I would support both those.

And what is there to cut? The recommendation is to cut what has long been called "waste, fraud, and abuse" (WFA). Well, I'm all for that also, but we have been trying to ferret out those things for years and have not succeeded yet, although Al Gore did an excellent job when VP of downsizing the federal gov. This is so difficult because most people, like many of you on this forum, seem to think WFA are like fat on a hog, in big slabs that can be hacked off with an axe. The truth is that it is like fat in a rib eye steak, in little veins all through the lean meat, and that is much more difficult to get out.
One thing that sticks out like a sore thumb is either the ignorance, or more likely the long standing Republican hatred of TVA, and their agenda to "give" it to private industry, that is demonstrated by this report. In Recommendation 4.9 it alludes to the out and out lie that TVA sells power below production cost and is supplemented by US taxpayers. That is an out and out lie from the pit of hell. TVA has by law, never taken taxpayer money to support the power program. (There was a part of TVA that at one time was taxpayer supported that had the mission of improving the life of the people of the US. This was done by the introduction of chemical fertilizer and improved farming methods, and has not been funded by appropriations for some number of years now), but it was illegal for any money from power to support that part, and it was illegal for appropriated dollars to support the power program.
Blatant lies like that make me question the whole thing's validity.
But, back to the point: there are a lot of things it mentioned cutting out, most of which I support like agriculture supplements, and a few more, and though it DOES mention defense, unless defense is seriously cut (and it could be without hurting our security), all the rest is just fly doo doo out of pepper, since defense is the majority of the budget. (check out my last post)
Just like at your own household, if you are in serious debt, you must cut spending and get another job (increase income). It will take both. Cutting taxes on the super rich has had it's chance for the last 10 years, and has proven a major failure, else, why are we not in a booming economy ?
quote:
Originally posted by Renegade Nation:
quote:
Originally posted by seeweed:
Truth is that it takes BOTH frugal budget AND sufficient revenue to support our country...YOU GOTTA HAVE BOTH MORE REVENUE AND REDUCED SPENDING.



Did you read the CBO projection linked above?

Bush tax cuts stay in place...3.6% cut in the approx $4 trillion annual budget...that's about $129 billion out of $4 trillion and that gets us balanced in 10 years.

And the 3.6% cut is a "Washington" cut...that is not an absolute cut...but a cut in the increases.

3.6%.

And look again at the chart of the history of tax revenue. This chart has been posted many, many times, but historical fact remains ignored.

No matter what the tax rate is...sky high...or moderately lower...tax revenue does not go higher than about 18% of GDP.


Liberals will never learn.
quote:
Originally posted by seeweed:
I more or less did scan it.
If you read it it says just about what I have been saying, it is necessary to raise taxes and lower spending.
I am somewhat confused how you can add $0.15/gal to the cost of gas in taxes and not call that a tax increase .
I am also confused how you eliminate virtually all deductions from taxes and not call that a tax increase.
There are several other things there like that, but I think you get the point.
BTW, I would support both those.

And what is there to cut? The recommendation is to cut what has long been called "waste, fraud, and abuse" (WFA). Well, I'm all for that also, but we have been trying to ferret out those things for years and have not succeeded yet, although Al Gore did an excellent job when VP of downsizing the federal gov. This is so difficult because most people, like many of you on this forum, seem to think WFA are like fat on a hog, in big slabs that can be hacked off with an axe. The truth is that it is like fat in a rib eye steak, in little veins all through the lean meat, and that is much more difficult to get out.
One thing that sticks out like a sore thumb is either the ignorance, or more likely the long standing Republican hatred of TVA, and their agenda to "give" it to private industry, that is demonstrated by this report. In Recommendation 4.9 it alludes to the out and out lie that TVA sells power below production cost and is supplemented by US taxpayers. That is an out and out lie from the pit of hell. TVA has by law, never taken taxpayer money to support the power program. (There was a part of TVA that at one time was taxpayer supported that had the mission of improving the life of the people of the US. This was done by the introduction of chemical fertilizer and improved farming methods, and has not been funded by appropriations for some number of years now), but it was illegal for any money from power to support that part, and it was illegal for appropriated dollars to support the power program.
Blatant lies like that make me question the whole thing's validity.
But, back to the point: there are a lot of things it mentioned cutting out, most of which I support like agriculture supplements, and a few more, and though it DOES mention defense, unless defense is seriously cut (and it could be without hurting our security), all the rest is just fly doo doo out of pepper, since defense is the majority of the budget. (check out my last post)
Just like at your own household, if you are in serious debt, you must cut spending and get another job (increase income). It will take both. Cutting taxes on the super rich has had it's chance for the last 10 years, and has proven a major failure, else, why are we not in a booming economy ?


The tax cut resulted in six years of a growing economy, low unemployment, and increased tax revenues. Unfortunately, the stupidity of encouraging loans and unsecured derivatives did more to end that run. The tax cuts no more causes the recession than wet sidewalks cause rain. Logic and reason -- beyond the ken of the left.

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