Federal Deficit

[carpedm9587]

I am all for a balanced budget. But congress won't do it. Too much pork. They all want to please their constituents and get a piece of the pie, and nobody wants to trim the fat.

Congress has more to do with the budget than Trump does - remember them holding the budget hostage? Cut spending instead of complaining about not enough taxes. We have enough taxes.

We do not have enough taxes if we are not paying our bills. I may be a social moderate, but I am a fiscal conservative. Congress should be functioning with a balanced budget. If you're going to spend - then tax. If you're going to cut taxes, then cut spending. Cutting taxes and increasing spending is a formula for disaster. And although Congress sets the budget, it requires the president's signature for it to take effect. So, IMO, they are both complicit. Currently, they are both Republican. So our "fiscally conservative and responsible" Republicans are proving to be no more conservative or responsible than the Dems.

[Bill the Cat]

Yes - income tax cuts...focused on the spenders. The tax cuts the Reps passed were focused on the businesses and the top earners. Business used the vast majority of the gains to pay dividends and buy back stock - all of which went to the top earners. A small fragment went to bonuses (a one time hit) and a minuscule slice went to salary increases.

If you're going to make a long-term impact on the economy - you're going predominantly cut taxes to the 99% and increase their spending power. That increases demand, and drives the economy. That did NOT happen with the last tax cut.

I disagree. While the personal income tax cuts were only as good as Congress could make them, they were definitely impactful. But we shouldn't punish success. I really feel a flat tax would be the best solution. That and eliminating April 15th...

[carpedm9587]

I disagree. While the personal income tax cuts were only as good as Congress could make them, they were definitely impactful. But we shouldn't punish success. I really feel a flat tax would be the best solution. That and eliminating April 15th...

I have always been a fan of a flat tax, and continue to be. But until that is a reality, rewarding the top 1% while punishing the bottom 99%, all the while ignoring that the top 1% made their money on the backs of the bottom 99% is not a just economic system. I do not wish to punish success - but I am perfectly willing to tax success that comes at the expense of others.

[carpedm9587]

Naturally, with the deficit ballooning, we should go after programs that support the 99% and not those that support businesses and the 1%.

It continues to amaze me how successful the Republican party is in getting people to vote against their own best interests.

[Super Cow]

The tax rate is mostly irrelevant. Regardless of the rate, the tax receipts ratio to GDP doesn't change much. Tax changes cause temporary aberrations, and people and corporations react to it in the way that is most beneficial to them. Over the long term it tends towards 17% or so regardless.

The only way to get to a balanced budget is to cut spending. And unfortunately both Republicans and Democrats have core spending priorities that don't overlap, so every time power changes they have to make up for what the other side supposedly took away. If you look at the historical tables (Either 1.2 or 1.3) from the government web site below, you can still see the same GDP ratio for times when the top tax rate was 90% in the 40s and 50s, down to 70% in the 60s and down to 50% and then 28% in the 80s, and floundering around 35-40% since the 90s. That's why Republican economists always try to target raising GDP over anything else, because nobody is willing to do the necessary thing which is to cut spending. (At least not since the Truman years right after WW2)

https://www.whitehouse.gov/omb/historical-tables/

[carpedm9587]

The tax rate is mostly irrelevant. Regardless of the rate, the tax receipts ratio to GDP doesn't change much. Tax changes cause temporary aberrations, and people and corporations react to it in the way that is most beneficial to them. Over the long term it tends towards 17% or so regardless.

The only way to get to a balanced budget is to cut spending. And unfortunately both Republicans and Democrats have core spending priorities that don't overlap, so every time power changes they have to make up for what the other side supposedly took away. If you look at the historical tables (Either 1.2 or 1.3) from the government web site below, you can still see the same GDP ratio for times when the top tax rate was 90% in the 40s and 50s, down to 70% in the 60s and down to 50% and then 28% in the 80s, and floundering around 35-40% since the 90s. That's why Republican economists always try to target raising GDP over anything else, because nobody is willing to do the necessary thing which is to cut spending. (At least not since the Truman years right after WW2)

https://www.whitehouse.gov/omb/historical-tables/

Now THIS is an interestingly refreshing perspective. I can't dig into it now - but I plan to do so. Thanks for providing this POV.

[Terraceth]

So, the numbers continue to show that the federal deficit is ballooning. In 2009, the deficit ballooned - but we were in the grips of the worst recession since the Great Depression. Now we are in economic good times. The economy is humming. So can anyone explain why the deficit is ballooning. Could it possibly have anything to do with the Tax Cut plan...? What on earth happened to "fiscal responsibility?

I feel the deficit is like being obese. It's something it seems almost everyone agrees is a bad thing and should be fixed, but much like how losing weight requires some painful concessions to accomplish (eating less, exercising more), the actual things required to knock down the deficit (cutting spending, raising taxes) tend to be unpopular, so both Democrats and Republicans shy away from actually doing things to fix the problem (of course, Republicans are the ones currently in power and therefore more deserving of current blame).

Unfortunately, I don't see anyone as actually willing to take the necessary measures to eliminate the deficit, so we're probably going to get some diabetes in our future (metaphorically).

[carpedm9587]

I feel the deficit is like being obese. It's something it seems almost everyone agrees is a bad thing and should be fixed, but much like how losing weight requires some painful concessions to accomplish (eating less, exercising more), the actual things required to knock down the deficit (cutting spending, raising taxes) tend to be unpopular, so both Democrats and Republicans shy away from actually doing things to fix the problem (of course, Republicans are the ones currently in power and therefore more deserving of current blame).

Unfortunately, I don't see anyone as actually willing to take the necessary measures to eliminate the deficit, so we're probably going to get some diabetes in our future (metaphorically).

Agreed. This is a problem both parties have and need to address. I doubt they are going to so anytime soon. The American political system is broken in so many ways. Money. Extreme partisanship. Gerrymandering. The list goes on. It makes me wonder how long it can survive, and just what legacy we are leaving to our children.

[Mountain Man]

It continues to amaze me how successful the Republican party is both parties are in getting people to vote against their own best interests.

I think that's probably more accurate.

[Mountain Man]

It would seem that our President is neither ignorant nor naive.

Source: Donald Trump Urges Cabinet Members to Deliver Five Percent Cuts

President Donald Trump announced Wednesday that he would ask each member of his cabinet to cut five percent from their annual agency budgets.

“We’re going to ask every Secretary to cut five percent for next year,” Trump said.

The president spoke to his cabinet members during a meeting at the White House on Wednesday afternoon, noting that some agencies could cut more than five percent.

“Get rid of the fat, get rid of the waste,” he said.

The federal deficit jumped 17 percent in the last fiscal year by $779 billion.

The president defended recent dramatic spending in order to restore military funding, admitting that he had to give Democrats “waste money” to get them on board.

“We had to do that in order to get the votes because we don’t have enough Republican votes without them,” he said.

He said that military funding would probably be around $700 billion in the next budget instead of the earlier price tag of $716 billion.

https://www.breitbart.com/politics/2...-percent-cuts/

© Copyright Original Source

[Sparko]

Naturally, with the deficit ballooning, we should go after programs that support the 99% and not those that support businesses and the 1%.

It continues to amaze me how successful the Republican party is in getting people to vote against their own best interests.

Well social security is paid for by the workers, so it is not tax funded. Cutting that is just stealing money from people who paid into it all their lives. That won't fly.

But if we want a balanced budget, some cuts will need to be made on spending of tax dollars. Either military, or welfare programs, or infrastructure. None will be popular. But there is also a lot of pork projects out there that can be cut too. like art projects, paying farmers not to grow things and the like.

here is a site dedicated to calling out pork

https://www.cagw.org/reporting/2017-hall-of-shame

[carpedm9587]

I think that's probably more accurate.

Not really. The Democratic party is definitely guilty of being beholden to big money in the same way the Republican party is. But they tend to get behind programs that support the 99% rather than those that support the 1%.

[carpedm9587]

It would seem that our President is neither ignorant nor naive.

Source: Donald Trump Urges Cabinet Members to Deliver Five Percent Cuts

President Donald Trump announced Wednesday that he would ask each member of his cabinet to cut five percent from their annual agency budgets.

“We’re going to ask every Secretary to cut five percent for next year,” Trump said.

The president spoke to his cabinet members during a meeting at the White House on Wednesday afternoon, noting that some agencies could cut more than five percent.

“Get rid of the fat, get rid of the waste,” he said.

The federal deficit jumped 17 percent in the last fiscal year by $779 billion.

The president defended recent dramatic spending in order to restore military funding, admitting that he had to give Democrats “waste money” to get them on board.

“We had to do that in order to get the votes because we don’t have enough Republican votes without them,” he said.

He said that military funding would probably be around $700 billion in the next budget instead of the earlier price tag of $716 billion.

https://www.breitbart.com/politics/2...-percent-cuts/

© Copyright Original Source

And he continues to pump money into the one part of our federal government that has successfully resisted a comprehensive audit - pretty much ever, as best I can tell. If that is not naive - I don't know what is. But then again, the same has been true of pretty much all presidents. Any challenge to the military is considered "unpatriotic," so it doesn't tend to happen.

[Mountain Man]

Not really. The Democratic party is definitely guilty of being beholden to big money in the same way the Republican party is. But they tend to get behind programs that support the 99% rather than those that support the 1%.

Meaning that you think it is in the people's best interests to be dependent upon and beholden to the government.

On that point, we emphatically disagree.

[carpedm9587]

Well social security is paid for by the workers, so it is not tax funded. Cutting that is just stealing money from people who paid into it all their lives. That won't fly.

Well - not exactly. The way Soc Sec is structured, it's pretty much a huge Ponzi scheme. It is called a FICA tax - so it is paid for by tax dollars. And the tax dollars paid today pay the recipients of today. Soc Sec is not a "savings" program.

But if we want a balanced budget, some cuts will need to be made on spending of tax dollars. Either military, or welfare programs, or infrastructure. None will be popular. But there is also a lot of pork projects out there that can be cut too. like art projects, paying farmers not to grow things and the like.

Yeah - and everyone loves to go after the unpopular programs, but they just won't cut it - and neither will Trump's 5% call.

here is a site dedicated to calling out pork: https://www.cagw.org/reporting/2017-hall-of-shame

Let's do a bit of math. The revenue for this year is expected to be $3.654 trillion dollars. We are currently projected to have a deficit of at least $779B. That means we are going to exceed the revenue by $21.3%. Total spending is likely to be around $4.433T, and 17% of that is deficit spending. This means we would need to have a 17% cut in spending across the board to balance the budget. The big ticket items are Social Security (19.63%), DOD (18.74%), Unemployment/Welfare/Other Mandatory (16.13%), Medicare (12.79%), Medicaid and Childrens health Ins (8.19%), and interest on the debt (4.63%). Everything else combined (including all the cabinet positions except defense) comprises the remaining 19.89% (about the same size as Soc Sec alone). If Trump cuts this entire segment by 5% (not just cabinet positions), he reduces the deficit by $44B - so it goes from $779B to $735B. Not such a big deal - and more a political ploy than anything else.

I can't do much with the site you linked. Adding it all up gets the number $1.5B, most of which is one program (the tank) and it goes back in some cases to 1992, so it's not an annual number. Even if all of this money was spent in 2018 (which it wasn't), eliminating this pork reduces the deficit from $779B to $777.5B. More likely it doesn't even drop it a couple hundred million. Chump change.

As you note, Soc Sec is a reasonably closed system (or its supposed to be). If we take that out of the equation ($870B), what remains is $3.563B. The deficit represents 21.8% of this number. That means every single department should see this kind of cut, if we are not willing to raise taxes and wish to balance the budget.

The math tells me that the solution needs to be a combination of both. We need to cut fat everywhere. We need to get the military audited so we can see where all that money is going and how it is being spent. We need to be smarter about how we spend our money. And we need to raise taxes to pay those things we continue to want our government to do for us. Personally, I think we should have a simple, flat tax. No deductions. No exceptions. A single per-person exemption for up to a family of 4, probably in the neighborhood of $20K/person. Then a flat tax for all income above that from any source for any person. Businesses should be tax free because the profits from these businesses will either be used to build the business, or they will be distributed to owners as dividends and will be taxed then. All capital gains should be considered "income" and taxed at the same flat rate. And that flat rate should be set, annually, to cover the cost of the federal budget and begin paying down the debt.

My $.02.

ETA: and we need to change SocSec to function as an individual retirement savings program, so that each individual gets out what they pay in with reasonable interest/gains. THAT will require a one-time massive infusion which will swell the debt - once.