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Tax Cuts and Deficits

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  • Tax Cuts and Deficits

    So this came across my news feed this morning. When the tax cut was passed, the promise was "so much growth that federal receipts would actually climb and the cut would pay for itself." (I'm paraphrasing, of course) Instead what we have is a soaring deficit - at a time of comparative fiscal health - and it is due to a combination of reduced receipts and increased spending. I was particularly interested in the table just below the "Tax Cuts and Spending" table. The picture is not a good one.

    We hear so much about "taxing the rich is just stealing," but we apparently have no problem with stealing from our children and grandchildren. After all - that is what the national debt represents: money we have taken from the future to pay the costs of the present. When we do that and keep the debt to what we can pay in our lifetimes - no problem. When we continue to spend to a degree that the debt will have to be paid by the next two or three generations - we are stealing from those future generations. There is simply no other way to see it.

    We need a balanced budget law or amendment - and we need it badly. Political leadership needs to be forced to live within its means - across the board.
    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

    I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

  • #2
    It's funny how you claim to be unbiased, yet the only stories that "come across my newsfeed" that you think are worth discussing come from liberal sources. So either your "newsfeed" is liberally biased, or you are.

    Also, your source does not use official numbers but a Congressional Budget Office "estimate", so the entire story is based on a guess by one of the most notoriously unreliable agencies in Washington.
    Some may call me foolish, and some may call me odd
    But I'd rather be a fool in the eyes of man
    Than a fool in the eyes of God


    From "Fools Gold" by Petra

    Comment


    • #3
      Originally posted by Mountain Man View Post
      It's funny how you claim to be unbiased, yet the only stories that "come across my newsfeed" that you think are worth discussing come from liberal sources. So either your "newsfeed" is liberally biased, or you are.
      Bloomberg is fairly widely rated as having a left-center bias, which aligns with my own experience of reading them. They number among the set of publications I most turn to for that reason, because they are probably as close to nonpartisan as modern media outlets are likely to get. They are essentially the left-leaning equivalent of the WSJ, which I also read.

      Originally posted by Mountain Man View Post
      Also, your source does not use official numbers but a Congressional Budget Office "estimate", so the entire story is based on a guess by one of the most notoriously unreliable agencies in Washington.
      The article analysis aligns with several others I have encountered over the last few months. It simply was the more thorough of them and best written (IMO), hence my selection of it for my post.
      The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

      I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

      Comment


      • #4
        Originally posted by carpedm9587 View Post
        the promise was "so much growth that federal receipts would actually climb and the cut would pay for itself." (I'm paraphrasing, of course)
        As Paul Krugman has been pointing out, this promise was always ludicrous and based on zero actual economic research. That such claims are widely believed by many people speaks to a deficient media environment, and propaganda influencing the gullible.

        Instead what we have is a soaring deficit - at a time of comparative fiscal health - and it is due to a combination of reduced receipts and increased spending.
        Indeed, if the economy is doing well, now is exactly the time to be running a surplus and reducing debt. Because, if and when another recession occurs the government needs to be able to address the issue and if the government is as bankrupt as the rest of the economy when it happens, that's a terrible situation.

        but we apparently have no problem with stealing from our children and grandchildren. After all - that is what the national debt represents
        Well some of us do have a problem with what the Republicans are doing.

        We need a balanced budget law or amendment
        That's not the right solution, it's like cutting off your nose to stop your nose from ever bleeding. Governments need the freedom to control the economy by helping out in recessions by running deficits, and conversely in good periods trying to stop bubbles forming by running surpluses. This has been a core tool in governments' economic toolboxes for decades and taking it away is a terrible idea.

        Market economies have a tendency to self-reinforce, so if there's a bubble developing they massively inflate the bubble, and then when a crash happens they massively increase the size of the crash. The government, whose spending constitutes ~20-50% of the entire economy depending on country, is thus in a really good position to put brakes on in both directions by controlling its expenditure. Leaving things entirely to market forces alone would be... unpleasant at best.
        "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
        "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
        "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

        Comment


        • #5
          Originally posted by Starlight View Post
          As Paul Krugman has been pointing out, this promise was always ludicrous and based on zero actual economic research. That such claims are widely believed by many people speaks to a deficient media environment, and propaganda influencing the gullible.

          Indeed, if the economy is doing well, now is exactly the time to be running a surplus and reducing debt. Because, if and when another recession occurs the government needs to be able to address the issue and if the government is as bankrupt as the rest of the economy when it happens, that's a terrible situation.

          Well some of us do have a problem with what the Republicans are doing.

          That's not the right solution, it's like cutting off your nose to stop your nose from ever bleeding. Governments need the freedom to control the economy by helping out in recessions by running deficits, and conversely in good periods trying to stop bubbles forming by running surpluses. This has been a core tool in governments' economic toolboxes for decades and taking it away is a terrible idea.

          Market economies have a tendency to self-reinforce, so if there's a bubble developing they massively inflate the bubble, and then when a crash happens they massively increase the size of the crash. The government, whose spending constitutes ~20-50% of the entire economy depending on country, is thus in a really good position to put brakes on in both directions by controlling its expenditure. Leaving things entirely to market forces alone would be... unpleasant at best.
          You observation about a balanced budget law or amendment makes sense. I do think we do need to have some form of law or amendment to force this issue since law makers are unwilling to do so themselves. It has to have safeguards, however, that allow a government to dip into deficit spending when needed, and it needs to be structured so that an unscrupulous leader cannot use it to achieve their own ends (as with the current discussion around "declaring a national crisis"). Unfortunately, the very leaders who cannot manage our finances responsibly would have to create such a law or vote for such an amendment - so the solution to the problem is the very problem that requires a solution.

          Sadly...
          Last edited by carpedm9587; 01-13-2019, 09:36 AM.
          The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

          I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

          Comment


          • #6
            Originally posted by carpedm9587 View Post
            We need a balanced budget law or amendment - and we need it badly. Political leadership needs to be forced to live within its means - across the board.
            When your outgo exceeds your income
            your upkeep becomes your downfall

            The trick is to keep your expenditures below your income. Our government seems incapable of grasping that concept.
            The first to state his case seems right until another comes and cross-examines him.

            Comment


            • #7
              Originally posted by carpedm9587 View Post
              You observation about a balanced budget law or amendment makes sense. I do think we do need to have some form of law or amendment to force this issue since law makers are unwilling to do so themselves. It has to have safeguards, however, that allow a government to dip into deficit spending when needed, and it needs to be structured so that an unscrupulous leader cannot use it to achieve their own ends (as with the current discussion around "declaring a national crisis." Unfortunately, the very leaders who cannot manage our finances responsibly would have to create such a law or vote for such an amendment - so the solution to the problem is the very problem that requires a solution.

              Sadly...
              Let it be known that I amen'd this post on purpose - it was not an attempt to report.
              The first to state his case seems right until another comes and cross-examines him.

              Comment


              • #8
                Originally posted by Cow Poke View Post
                When your outgo exceeds your income
                your upkeep becomes your downfall

                The trick is to keep your expenditures below your income. Our government seems incapable of grasping that concept.
                Because it's "free money" to politicians. They just have to take more of our money to cover any budget gaps. I don't think I've seen a government body yet at the local, state, or national level that I would consider fiscally responsible.
                Some may call me foolish, and some may call me odd
                But I'd rather be a fool in the eyes of man
                Than a fool in the eyes of God


                From "Fools Gold" by Petra

                Comment


                • #9
                  Originally posted by Mountain Man View Post
                  Because it's "free money" to politicians. They just have to take more of our money to cover any budget gaps. I don't think I've seen a government body yet at the local, state, or national level that I would consider fiscally responsible.
                  I work with our city and county officials quite a bit, and I think they try to be much more responsible than our federal leaders --- I think the more 'local' the control is, the better the results can be.
                  The first to state his case seems right until another comes and cross-examines him.

                  Comment


                  • #10
                    Originally posted by Cow Poke View Post
                    When your outgo exceeds your income
                    your upkeep becomes your downfall

                    The trick is to keep your expenditures below your income. Our government seems incapable of grasping that concept.
                    Yes it does. When Democrats are in power - expenditures tend to climb, and taxes with them. When Republicans are in power, taxes tend to drop, but expenditures tend to continue to climb. It appears that the only party that actually cares about the deficit is whichever party is not currently in power.
                    The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                    I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

                    Comment


                    • #11
                      Originally posted by Cow Poke View Post
                      I work with our city and county officials quite a bit, and I think they try to be much more responsible than our federal leaders --- I think the more 'local' the control is, the better the results can be.
                      True 'dat. When you have to look people in the face - it is harder to be irresponsible. It also helps when the tax payers get to directly vote on the things the money is going to, and can see a detailed budget breakdown of how the money is spent.

                      But the over-wide generalization that "politicians see it as free money" is grossly inaccurate. Yes, there are irresponsible politicians. There are also very responsible ones. What is missing appears to be a strong degree of accountability - which has to start at the top. So far, we have not had any president that is willing to challenge the status quo and require fiscal responsibility from the various government departments. There is a LOT of fat that could be squeezed out of government.
                      The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                      I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

                      Comment


                      • #12
                        Originally posted by Cow Poke View Post
                        I work with our city and county officials quite a bit, and I think they try to be much more responsible than our federal leaders --- I think the more 'local' the control is, the better the results can be.
                        One of the reasons I'm in favor of shrinking the Federal government as much as possible and turning social services completely over to state and local governments.
                        Some may call me foolish, and some may call me odd
                        But I'd rather be a fool in the eyes of man
                        Than a fool in the eyes of God


                        From "Fools Gold" by Petra

                        Comment


                        • #13
                          Originally posted by carpedm9587 View Post
                          True 'dat. When you have to look people in the face -
                          That's a HUGE part of it... I run into our county commissioners and city officials on a regular basis, and they live in the same communities they "govern". AND, they are subject the rules and regs they produce. Not so, in so many case, with Congress.
                          The first to state his case seems right until another comes and cross-examines him.

                          Comment


                          • #14
                            Originally posted by Mountain Man View Post
                            One of the reasons I'm in favor of shrinking the Federal government as much as possible and turning social services completely over to state and local governments.
                            Block grants with appropriate safeguards would level funding across states by population (rather than having disproportionately resources based on the wealth of the state), while ensuring local control of programs so they can be tailored to meet local needs. I have long advocated for such a system - but the current model is seriously flawed.
                            The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                            I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

                            Comment


                            • #15
                              Originally posted by Cow Poke View Post
                              That's a HUGE part of it... I run into our county commissioners and city officials on a regular basis, and they live in the same communities they "govern". AND, they are subject the rules and regs they produce. Not so, in so many case, with Congress.
                              Agreed. Indeed - it would seem to me fairly obvious that the people who create situations like the shutdown should also be impacted by the results. Congress and the Executive branch should see salaries stop until the impasse is resolved.

                              Unfortunately, that would be an unbalanced result with this president. As best we can tell, he and his family receive FAR more income from the various ways that they are benefiting from this role as president than he is receiving as salary. Indeed, I believe he made the show of reducing his salary to $1 per year. What a grand gesture. Give up $400K and then reap potentially millions in business gains. So much for the "pay to play" fuss made during the election. I sincerely hope the Democrats take that mantra up for 2020. Trump has taken "pay to play" to all new levels.

                              As a consequence - shutting down salary for Congress would incent one side to compromise - while doing nothing to incent the other side of the dispute.
                              The ultimate weakness of violence is that it is a descending spiral begetting the very thing it seeks to destroy...returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars. Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that. Martin Luther King

                              I would unite with anybody to do right and with nobody to do wrong. Frederick Douglas

                              Comment

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