This Whole Debt Limit Thing

[Dayan81]

We have the power to correct that in 15 months.

Perhaps we should start having nation-wide referendums, on issues such as raising the debt-ceiling.

 

[AlBell]

When polls show that the great majority of Libertarians and even a majority of Republicans support a compromise solution to the debt-crisis, which includes spending-cuts and increased revenue from the wealthy, and yet the political party that controls the House of Representatives utterly ignores these sentiments, I fear the people are losing control of their government.

Representative Democracy is becoming more of a campaign slogan than an actual principle of our society.

Reminds one of a "healthcare bill" rammed through despite large and ongoing public outcry against it.

 

[BeAChooser]

And what was the overall effective tax rate during each of those years? I can only find data since 1979, and the overall effective tax rate has been fairly constant during that time (19.8 to 22.9).

You are using the first chart in this source, apparently:

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456

or this:

http://www.cbo.gov/ftpdocs/61xx/doc6133/03-01-EffectiveTaxRates.pdf

First of all, the effective tax rate for "all quintiles" (which is what you appear to have cited) is not very meaningful. The lowest and second lowest quintiles don't measurably affect revenues and their effective rate is far less than the values for the highest quintile (the group that democrats want to tax more heavily), which does dominate revenues.

A better picture (for our purposes) can be had by looking at the effective tax rate for the highest quintile, which in 2007 was 25.1% but has been as high as 28% at times over the last 30 years.

But even more significant is the fact that the effective tax rate for the top 1% … the folks that Obama wants to tax more heavily to close the deficit … was 29.5% in 2007 and has been as high as 37% during the past 30 years. So even an 8% increase in the top effective rate of the folks democrats want to tax above what they are currently taxed has not driven revenues over 20% of GDP. In 30 years.

Now, in the years before 1979, perhaps we can get an idea of what the top effective rates were by looking at data like that in this chart (from http://www.freeby50.com/2009/04/history-of-effective-tax-rate-for.html ):

http://3.bp.blogspot.com/_DLIvw6mZGBU/SdPITRQ4aQI/AAAAAAAAAYA/6eVhwM7NAjg/s1600-h/taxhistory.jpg

That figure indicates that between 1945 and 1979, the effective tax rate of the median worker was at least 2 percent higher than it was in 1979 over considerable spans of time. Which likely means that the effective rate of the top 1% of earners was even more than 2% higher than it was for them in 1979. In other words, more than 10% higher than it is now. Yet, revenues as a percent of GDP, still did not exceed 20%. Ever. They mostly averaged 18%.

Here's another source that might be helpful:

http://staff.jccc.net/swilson/businessmath/taxes/fit.htm

Look at the table titled "Highest Tax Bracket". Notice that after 1972, the effective tax rate for the highest bracket was "limited" to 50%. And the "limit" clearly went below that starting in 1987 when the top tax bracket itself dropped to below 40% and never again climbed above that.

In contrast, from 1965 through 1972, the top tax bracket was as high as 77% and only as low as 60%. And from 1945 to 1963, the top rate was between 87-90%, 30%+ above the top effective rate in the 1979 to current timeframe.

Thus, I think it's safe to say that effective rates in the 1945 to 1979 timeframe were considerably higher than just 10% above the current effective rate. Yet revenues did not rise above 20% of GDP. They averaged only 18%.

The lesson is clear. No matter what you do to tax rates, you are not going to get sustained revenues above 18%, much less 20%. But all of a sudden, you and your so-called *experts* have it all figured out and think you'll defy 65 years of history and drive revenues well over 20% of GDP and keep them there … for decades. You and they live in a FANTASY world, Bri.

 

[BeAChooser]

When polls show

Polls run by whom? Polling what segment of society? Polls in this instance are basically meaningless since the majority of those polled are as economically and historically clueless as the liberals on this thread. Of course, the majority were educated by liberal dominated public education so perhaps that explains it.

 

[BeAChooser]

We have the power to correct that in 15 months.

A game made just for you:

http://arcade.svatopluk.com/video_system/pipe_dream/pipe_dream_02.png

 

[johnny karate]

Reminds one of a "healthcare bill" rammed through despite large and ongoing public outcry against it.

Oops.

 

[BeAChooser]

Perhaps we should start having nation-wide referendums, on issues such as raising the debt-ceiling.

There was a reason our Founders didn't do that. Perhaps they had people like you in mind.

 

[Biscuit]

Brilliant! Reframing the argument so as to respond to make the argument look silly.

Your first error was to not see that there are both for-profit and not-for-profit businesses.

Wait...why should I point out your errors? They were not errors, they were essential to enable reframing the argument. That would work if people overlooked your mistaken premises.

Can you show me where republicans have stated they want the government to be run like a not for profit business?

I have always assumed they meant for profit when referencing business. Being in business not for profits are very quick to identify themselves as such, all others are assumed to be for profit.

I didn't reframe anything I pointed out one of the many absurdities of treating government like a for profit business. I suppose the military could be your loss leader if that makes you more comfortable.

I don't know if you are a business owner or have every been one but the realities of it are much different than that of government. Its a nice simple metaphor that conservatives like to use but it has no place in reality. Even conservatives I know that own businesses think this is silly.

 

[Biscuit]

mhaze,

Even if they do mean not for profit can you kindly explain the purpose of a not for profit state department or Department of Defense?

Just from a business point of view it wouldn't make sense to have any type of business dealing with as many disparate facets as the U.S. Government does. The only efficient method would be to create hundreds of not for profit businesses all independent. Not for profit is most effective when it has a singular goal or mission.

 

[Corsair 115]

All I can say is that anyone who thinks the debt can be tamed by spending cuts alone should take a look at the GAO report on the 2010 fiscal year I linked to back in post #331. In particular, look at pages 58-60 (PDF numbers) which contain what is essentially the financial statement for the nation for that fiscal year. It shows the amount spent on each department as well as the revenue earned from each basic source type.

The net operating deficit for the 2010 fiscal year was $2,080.3 billion. Thus to balance things for that fiscal year would have required some $2 trillion in spending cuts. For that one year. Where would folks like to start trimming? The Department of Defense was top of the list for net costs ($889.2 billion); second was the Department of Health and Human Services ($857.7 billion); and third was the Social Security Administration ($753.9 billion). Rounding out the top five were the Department of the Treasury ($372.9 billion) and the Department of Veterans Affairs ($235.5 billion).

 

[BeAChooser]

Originally Posted by AlBell
Reminds one of a "healthcare bill" rammed through despite large and ongoing public outcry against it.

Oops.

You bet one poll, I raise you two, or three, or four.

Two day later, a CBS (i.e., liberal poll):

http://www.cbsnews.com/8301-503544_162-20001117-503544.html

A CBS News poll released Wednesday finds that nearly two in three Americans want Republicans in Congress to continue to challenge parts of the health care reform bill.

Also from that CBS poll:

For the new poll, CBS News re-interviewed 649 adults interviewed just before the House vote in a CBS News poll conducted March 18-21. The findings suggest an improvement in perceptions of the legislation: While 37 percent approved of it before the vote, 42 percent approved afterward.

In short, CBS said that the Gallup poll was wrong. That most people (48% to 37%) disapproved of the Health Care Bill just before the vote.

Here's another article …

http://thecaucus.blogs.nytimes.com/2010/03/25/new-polls-public-still-skeptical-of-health-care-law/

Voters disapproved of the bill, 49 percent to 40 percent, in a Quinnipiac University poll taken this week after the House vote on Sunday. Just before the measure passed, a poll showed that opponents outnumbered supporters by 18 points, or 54 percent to 36 percent.

What was Rasmussen polling back then?

http://www.rasmussenreports.com/pub.../healthcare/september_2009/health_care_reform

It’s Time to Decide, and 54% of Voters Oppose the Health Care Plan

March 21, 2010

Gee, it seems your Gallup poll was somewhat of a flyer (i.e., WRONG).

In fact that Rasmussen link … consistent with the other sources … shows that opposition to the health care bill prior to the vote was consistently in the 50% vs 40% range for 6 months before the vote.

And the more people learned about the bill, the less they liked it.

Indeed, after the vote, that opposition continues:

http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law

Seems that about 2/3rds of Americans still want the bill repealed.

Oops back!

 

[Biscuit]

Yeah, one should be easier given the ability to tax and not having to accomplish anything versus the stated goals.

The federal government doesn't have to accomplish anything? What?

You realize that in the republican government as business model that the product would be government funded projects. Everything from Damns to social security. Anything the government did would be its "product" and taxes would be what the consumer paid for those products. As all business seeks to grow and raise more revenue so to would the federal government. In fact you would be creating a creature that would demand more taxes or stop providing services. Didn't pay your taxes...no police for you and get off the highway too! In order to raise more revenue the government would be forced to charge more for what it was supplying or supply more and charge more! It could cut costs but in the end all business seeks to grow and cutting costs alone will not do that.

You see you don't have to shop at the GAP but you do have to pay taxes and the government can force you to. Right now taxes are our responsibility one we should take seriously. Turning taxes into a businesses revenue that you have to "shop" at is just insane

But you see the government doesn't sell products the government is a structure not a factory or a business. Trying to treat it as a business is a hopeless effort.

 

[BenBurch]

Reminds one of a "healthcare bill" rammed through despite large and ongoing public outcry against it.

The outcry was manufactured.

 

[Kestrel]

All I can say is that anyone who thinks the debt can be tamed by spending cuts alone should take a look at the GAO report on the 2010 fiscal year I linked to back in post #331. In particular, look at pages 58-60 (PDF numbers) which contain what is essentially the financial statement for the nation for that fiscal year. It shows the amount spent on each department as well as the revenue earned from each basic source type.

The net operating deficit for the 2010 fiscal year was $2,080.3 billion. Thus to balance things for that fiscal year would have required some $2 trillion in spending cuts. For that one year. Where would folks like to start trimming? The Department of Defense was top of the list for net costs ($889.2 billion); second was the Department of Health and Human Services ($857.7 billion); and third was the Social Security Administration ($753.9 billion). Rounding out the top five were the Department of the Treasury ($372.9 billion) and the Department of Veterans Affairs ($235.5 billion).

Or try to solve the New York Times budget puzzle published last fall. It's not really that hard to do with a combination of revenue and cuts. It may be impossible to do so with cuts alone.

 

[BeAChooser]

All I can say is that anyone who thinks the debt can be tamed by spending cuts alone should take a look at the GAO report on the 2010 fiscal year I linked to back in post #331. In particular, look at pages 58-60 (PDF numbers) which contain what is essentially the financial statement for the nation for that fiscal year. It shows the amount spent on each department as well as the revenue earned from each basic source type.

The net operating deficit for the 2010 fiscal year was $2,080.3 billion. Thus to balance things for that fiscal year would have required some $2 trillion in spending cuts. For that one year. Where would folks like to start trimming? The Department of Defense was top of the list for net costs ($889.2 billion); second was the Department of Health and Human Services ($857.7 billion); and third was the Social Security Administration ($753.9 billion). Rounding out the top five were the Department of the Treasury ($372.9 billion) and the Department of Veterans Affairs ($235.5 billion).

How about a sensible plan (rather than a radical one)?

How about the Paul Ryan plan?

Here's a great little video that explains:

http://conhomeusa.typepad.com/video/2011/05/ryan-medicare-dan-mitchell.html

And some sources to dispell some of the disinformation promoted about it by liberals:

http://budget.house.gov/SettingtheRecordStraight/

http://budget.house.gov/SettingTheRecordStraight/Medicare.htm

And one more source ...

http://townhall.com/columnists/kevi...ity_stakes_gop_claim_to_fiscal_responsibility

Paul Ryan's "Path to Prosperity" Stakes GOP Claim to Fiscal Responsibility

Representative Paul Ryan (Wisc.-1) and the House GOP released their ten-year budget entitled "The Path to Prosperity" [http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf ] to much fanfare on Capitol Hill yesterday, laying out an alternative to President Obama's proposal. Compared to baseline numbers, the Path to Prosperity spends $5.8 trillion less, and $6.2 trillion less than the President's budget over the next ten years.

The largest spending cuts come from the discretionary budget, both defense ($830 billion) and non-defense ($1.6 trillion). Rep. Ryan's defense budget accepts the proposals laid out by defense Secretary Robert Gates and endorsed by President Obama, but cuts spending in every other category. The Path to Prosperity lays out radically different reform plans for both Medicare and Medicaid, and in the case of Medicaid finds significant savings ($771 billion).

One of the pillars of Rep. Ryan's reform plan is the complete repeal of the Patient Protection and Affordable Care Act, known infamously as Obamacare. Obamacare's repeal saves the government over $1.4 trillion in spending between 2012 and 2022. While the Congressional Budget Office has consistently reported that Obamacare repeal would increase deficits, Rep. Ryan noted this. "We retain the Medicare savings [from Obamacare] and, instead of double-counting the Medicare savings... re-apply those savings to Medicare to advance its solvency."

One of the subtler items in the Path to Prosperity is the reform of budget process rules. The budget will impose mandatory reviews of mandatory spending programs along with statutory limits on discretionary spending that will be accompanied by automatic across-the-board cuts if those limits are violated.

Or we can keep on doing what we've been doing and ignore what history says about taxes and revenue ... and fall off the cliff.

 

[mhaze]

Or try to solve the New York Times budget puzzle published last fall. It's not really that hard to do with a combination of revenue and cuts. It may be impossible to do so with cuts alone.

One problem is that "increasing revenue" is sort of a "hoped for outcome" which is perceived as enabling operations in excess of current revenue.

Efforts to increase revenue can easily backfire or produce little or no results. Anyone who has ran a marketing campaign in business, or tried to penetrate a new business segment, knows this.

In many cases spending cuts are firmer numbers with no such consequences.

 

[BeAChooser]

The federal government doesn't have to accomplish anything?

Well has it?

The Stimulus failed (and may even have pushed us into a depression now).

Social Security, a program with a massive unfunded liability, has continued to grab more and more of people's wages. What started out at 2% is now at 15% and the system is still going broke so they are talking about raising the tax even higher on future generations.

Medicare is bankrupting us. Even Obama had to admit that given that its current unfunded liability is in excess of $60 trillion dollars. In fact, by 2020, the Social Security and Medicare alone will consume more than one-fourth of all federal income taxes. By 2030, about the midpoint of the baby boomer retirement years, the two programs will consume more than half of federal income taxes. And by 2050, when today's college students will reach retirement, they will consume more than three-fourths of all income taxes.

The War On Poverty didn't accomplish it's stated goals, despite 15 trillion in spending. It can be rationally argued that the only thing the WOP actually did accomplished was to slow and then stop the fall in poverty rates that was going on prior to its enactment. In other words, it made people poorer than they otherwise would have been.

The War on Drugs hasn't worked. But it cost the nation trillions, destroyed our inner cities, built huge legal/enforcement/detainment bureaucracies/unions that are now demanding constant feeding, and may be the reason the cartels grew so strong … armed with weapons our own government supplied.

The US Postal Service is failing. Their rates have risen while they're busy curtailing service. Yet Obama points to the success of it's private company competitors as a reason to turn over Health Care to the government. Go figure.

The Public School System, despite costing trillions over the last few decades, can't even graduate 50% of the students in the largest 50 districts on time. And many of those it does graduate seem ... well ... less educated … if only given the fact that we've had to rescale national tests. It's a system that produces students, who if they do attend college, have to take remedial courses just to pass the most basic courses. A system that produces loads of psychologists and sociologists, community organizers, sports figures, leeches (I mean lawyers), starry eyed media and entertainment flunkies, and department store clerks ... rather than loads of engineers and scientists.

The highway infrastructure is a mess (and who was responsible for keeping it maintained? The government).

The borders are sieves that are allowing millions of illegals to enter the country every year. Illegals who stress every aspect of our society.

So seriously, Biscuit … what has government accomplished … especially through social engineering of the sort promoted by Obama and democrats?

 

[Gaetan]

To reduce your deficit you got to cut in what republican and tea party sherish: Wars, bomb production, weapons, firearms, income tax reduction to rich.

 

[BenBurch]

To reduce your deficit you got to cut in what republican and tea party sherish: Wars, bomb production, weapons, firearms, income tax reduction to rich.

Last time I looked, we outnumber the rich...

 

[Kestrel]

Last time I looked, we outnumber the rich...

We outnumber the rich when people are counted, but politicians seem to count dollars instead.