Remember that money is power. If you’re trying to make those who perform services to the state do it for less compensation in the name of the public good, rather than raise taxes, you’re saying you want less power & less compensation for those who serve the public interest, & more for those who do not.
This is one reason I don’t really support plans like, “Make them take of the poor pro bono instead of raising taxes for welfare.” You can bloody well have the nation chip in for the public good.
If our health care were as efficient as what you find in europe you could easily pay off the debt. We spend about 18% of GDP on health care, so about 2.5 trillion of our 14 trillion economy. Other OECD nations spend 8-11%. If we had a system that cost 11% of GDP (high by OECD standards) and was 1.5 trillion instead, and invested that 1 trillion extra into paying off the debt then we’d be set and our standards of living wouldn’t really decline (there would be lower revenue for health professionals though).
Long term health care is behind most of our debt problems. Short term the recession is the problem.
It isn’t really that insolvent. It is a 12.4% tax on the first 100k or so in income, and people pay it for about 40 years then collect for roughly 20 years in retirement.
So if you are paying 12.4% of your income for 40 years, then collecting 50% of your income for 20 years you need roughly 2 workers per retiree. Since there should theoretically be 2x more people age 20-65 than 65-85, it shouldn’t be a problem.
My math is probably totally wrong. Either way, the tax rate has been raised when this issue came up in the past. They can do that again, I read raising the rate from 12.4% to about 15% would keep it solvent until the 22nd century. Raising the cap would likely do the same thing.
He did. He called for a 10% reduction in defense spending.
Of course, the courts have held time and time again that this kind of spending is in line with Article I Section 8, so everything following from this premise is flawed. Moreover, as the last few years have demonstrated, “let the states pay for it” doesn’t eliminate the debt, it just shifts the burden from the federal government to the states that have to raise college tuitions and cut jobs to make up the difference.
Right you are, my mistake. I just saw the “Homeland Security” part.
Just so I’m clear, you think it’s a good idea to eliminate the U. S. Navy and trim the military by 95%?
If that’s your argument, just put them all on some kind of welfare. After all, if they are only being employed by the military to prop up the economy, then they already are on welfare; just a very expensive and inefficient version of it that get people killed.
Excessive military spending is an expensive and inefficient version of welfare. I couldn’t agree more. I hate making “+1” posts, but that statement deserved quoting.
Yes, he really does.
I think he would view it as reducing capitalist imperialism by 95%.
But seriously, this whole idea of eliminiating the debt in 8 years is as absurd as asking what needs to be done to pay off your 30 year mortgage in 18 months. One might be able to do it if one got a much higher paying job, but that would also mean eliminating food from one’s household budget.
Any budget that dramatically increases taxation and dramatically decreases spending is going to have HUGE effects on the economy, which would be far, far, FAR worse than the disease of having a large debt. The economic effects of huge cuts in Social Security, health care, education, roads, science and technology, and so on would not only produce an immediate recession, it would have ripple effects for decades.
Let’s keep in mind that our debt now is somewhere in the ballpark of 90% of our GDP. In the roaring 90s, the debt was somewhere around 60% of GDP – and it wasn’t a problem. There is no reason to take such drastic measures to eliminate the debt all at once, when all we really need is a long term plan to bring the debt down to more reasonable levels.
Again, it’s like a diet: you don’t need to go on a crash diet of 500 calories a day if you weigh 300 pounds. Make a plan to lose one or two pounds a week that you can sustain for the long term, and shoot for weighing 190 pounds – not foolishly trying to get to 105 in the next three months, and ending up in the ICU.
Any money spent on waste is a waste. As much as I despise the Grover Norquist crowd and their flawed and deceptive arguments, money really is better off left in the hands of taxpayers than spent on waste in a normal economy.
We don’t have to get rid of the debt and it would hurt the financial markets to lose the only risk free investment in the world.
What we have to do is get it under control. We can do that by raising (and reforming) taxes, cutting defense and reforming medicare. That is literally all we have to do to get ourselves on track to a balanced budget and eventually with the passage of time the 14 trillion dollar debt will look paltry compared to the size of our economy.
My biggest issue is that there’s no direct tie between spending and revenue and attempting to pay off the debt without addressing this, while potentially possible, is putting the horse before the cart. So, I really think a balanced budget amendment is more or less a requirement.
Here’s how I’d do it. Ideally, I’d eliminate the current tax code, going to something much simpler that can be relatively easily modeled (specific type of taxation isn’t relevant, but both sales taxes and income taxes would work fine). Every bill that would cost money would then be required to determine the cost associated with it and how to adjust it up or down. So, for instance, it would say that this bill would add some amount of money, and there would be a formula used to convert it to adjust the tax rate. Thus, the spending will always roughly equal the revenue, and every time there’s a deficit it’s added to the next year’s budget, and when there’s a surplus it’s subtracted from the next year’s, and if it repeatedly comes up on one side or the other, that formula is adjusted.
After that is done, obviously, there’s need to be a complete review of the costs of all existing programs, but once it’s done, we’d have now completely eliminated any running deficit and we can directly see the impact of a bill and, we also would be unable increase spending without increasing taxes, or similarly, we would also be unable to cut taxes without cutting spending.
From there, eliminating the debt is trivial. We can see a set of plans like say 10, 20, 50 year pay-offs and see exactly how they will effect taxation and then the people can decide just how badly we want to pay it off.
That all said, I do agree with a lot of the proposed cuts, particularly defense spending, even as a defense contractor myself. I’m also in favor of cuts to Social Security, if not outright elimination, but in a way that doesn’t affect people who are dependent on it. The problem is, that because it’s paid by people who are currently in the system, someone is going to get hurt by it and it’s irresponsible to keep shrugging that burden onto later generations; we should bite the bullet, give people who have paid into it benefits equal to what they’ve paid in, and everyone thereafter should be out of it, and the taxations for it end when the benefits end.
But, seriously, the biggest problem seems to be that whenever they make “budget cuts” they cut relatively small items, but leave the big ones untouched. We simply cannot get a balanced budget without cuts to major items.
The problem is that you can search the entire federal budget and you’ll never see any item that authorizes funding for waste.
Nobody sets out to waste money or any other resource. It’s just an inevitable by-product of trying to do anything. Try too hard to stop waste and you end up hurting productivity. (One telling anecdote is the WWI generals who forbid pilots to wear parachutes. The theory was that if they had the option of jumping out of a damaged plane, they might abandon a plane that could have made it back to the base.)
The surplus is reinvested, and the actuarial assumptions are well defined. As for growing economy, please check out a chart of the GNP over time. Except for a few recessionary hiccups, our economy has indeed grown for the past 200 years and more.
Not to mention that, unlike any actual Ponzi scheme, everything about Social Security is public and can be examined by anyone who wants to.
See the million other threads about how SS is not a Ponzi scheme for more details.
It’s both, actually. If the population stopped growing, there would be fewer to pay in. If the economy stopped growing, those working would be making less and thus paying less, and there would be fewer people working, making the situation worse. The current deficit comes from the economy, not from population. I believe the forecasts use both as input variables.
You forgot the spending on things that blow up. Odd how people object to making window glass to break, but find that building $100K bombs to blow up is cool.
Actually, military spending enables things like free trade, and so some fairly high level is cost effective. But it could be a lot more efficient.
Some of the waste is a natural side effect of civilian oversight of the military, such as having parts of each system manufactured in as many congressional districts as possible. A friend of ours, who worked on helicopters, noted that the bloat of the system came from the contractors adding features to satisfy all kinds of overseers.