I provided you with CBO data that showed if the tax cuts are allowed to expire revenue and expenditures align pretty closely.
You responded with some hocus-pocus about the AMT and 2035 but the page I cited clearly specifies (and sorry I did not respond in that thread…bolding below is mine):
No mention of AMT out to 2035 in that bit. Note the alignment of the chart by 2015 (and running up to it before that).
This is based on current law. I.E. If no one fiddles with anything, as things stand today, that is what will happen (the Bush tax cuts will expire on their own if no one does anything).
Thinking further, Yorick, I think your picturing the CBO as counting the SS fund as cash when they compute public debt. And thus double counting the money thats put into it. But thats not what they’re doing, the bonds in the fund aren’t counted as “income”, anymore then aircraft carriers or other things the gov’t buys are. The money raised by selling bonds to the fund is counted, but the bonds themselves aren’t, so the money only gets counted once.
Medicare and SS have dedicated taxes that pay for them. If you cut the programs by 50%, I doubt people are going to accept paying those taxes at the previous rates. As a result, I’m pretty skeptical that cutting them would really do much to balance the budget.
I could swear there was a thread a few years ago in which many of the board Republicans responded to criticism of Republicans cutting taxes for the richest Americans while simultaneously instigating enormous, crippling spending by saying that the debt didn’t matter.
Now that their wariness of the debt has been kindled, we will no doubt be able to come to an agreement that both revenue increases from those most able to afford it (increased taxes, closed loopholes, etc) and spending cuts will be needed. And certainly we will agree that we can’t automatically put wars and corporate handouts off the table of things that could potentially be cut. Democrats will of course want to devote 40% of the budget to financing PBS, but I am confident that they realize the situation is too grim for that to pass. With the brain power of both parties working on this, I predict a resounding success.
This notion that debt is necessarily a bad thing is utterly absurd. Especially when there is high unemployment in the nation.
The interest rate on U.S. debt is so low that $1 trillion incurs only $25 billion in interest per year. Borrow $1 trillion and start roads projects and bridge projects and any number of other things the government is actually responsible for doing, and at the end of the year you’ve spent $1,025,000,000,000.00.
The Republican way, we take that $1 trillion and pay it to our creditors. Now we don’t owe $25 billion in interest for the year. YAY - Savings!
Uhm, no.
Now you have 10 million people unemployed who are collecting federal unemployment. Over the course of that same year, no jobs are created, no roads are repaired, no bridges are reinforced, basically nothing gets done. And the cost of 10 million unemployed to the nation is $250 billion.
So now, instead of putting 10 million people to work (and by the way, collecting taxes on that income, which isn’t even figured into this little equation), and spending only $25 billion for interest payments, we have a crumbling infrastructure for the low low price of $1,250,000,000,000.00, or 10 times what carrying that $1 trillion in debt would have been.
We’re fucked because Republicans can’t do math and don’t understand the first thing about macroeconomics. We’re being led around by the nose by a bunch of retards.
It stuns me that after 30 years of empirical data, Republicans flat out refuse to see that supply-side economics is a steaming pile of crap. It was an intentional lie created by one man, Jude Wanniski.
Wanniski was the Grover Norquist of the '70s. Nobody ever elected him to anything – he was a journalist for g-d’s sake. But he wielded great power and control within the Republican party. He invented the “supply-side economics” terminology as nothing more than a craven way to get Republicans to win elections, by turning them into “the second Santa Claus”. The Two Santa Claus Theory
Just once, I would like a Republican on this forum (or anywhere for that matter), to acknowledge that this theory has been tried and has failed – repeatedly. Look at the facts, the cold, hard facts of how “politicized” that entire crap, made-up theory of “supply-side” economics actually is. And admit the truth.
The money from the trust fund was not spent. No money was borrowed from the trust fund. The trust fund continued to grow, because the SS surpluses were invested in the safest investment in the world (at that time).
The government bonds were “deposited” in the trust fund. There was no money taken from the trust fund. It kept getting bigger.
The money the government raised by selling the bonds was used for other things. You cannot claim that Social Security funds are being diverted to other purposes, because the value of the trust fund continues to grow. It’s a simple fact.
Unlike you, who didn’t even read what you provided me, I quoted for you what was in the report verbatim. That wasn’t some ‘hocus-pocus’; that was a simple copy and paste. Just because you don’t like what the report says, doesn’t mean you can dismiss it-- especially since you, initially, brought it up. Just because you skipped over pages 3 and 60, doesn’t mean they don’t exist.
Edit: The baseline scenario assumes the Bust Tax Cuts end.
I’m not sure what your reasonable definition is. Intragovernmental debt is not a wash simply because we owe money to ourselves. That money is owed to current and future trust fund recipients just like regular debt is owed to someone at a later date.
The simple fact is that national debt increased during every year Clinton was in office. Why would we need to borrow money if we are running a surplus?
I’m not sure I can explain it any better then I did in post #39. Maybe you can tell me if something from that post doesn’t make sense and I’ll try and clarify?
Yes, I think it does need to be explained. Government bonds are debt. The SS fund is flush with IOUs from the federal government. The SS trust fund is required by law to buy bonds with any excess revenue. Where does that money go? Into the general fund.
You didn’t explain it in post #39. We can argue all day about intragovernmental holdings and public debt. The bottom line is total national debt which takes both into account. That number increased every year.
But we agree total gov’t revenue was greater then total gov’t expenditures, right? From my example in that post, the gov’t still took in 5 more dollars then it spent. Again, I don’t think you can reasonably say there wasn’t a surplus then, regardless of the state of the gov’ts internal book-keeping.
If they aren’t already, I’m fairly sure that SS and Medicare pay out more than they receive or will be soon in the next 10 - 15 years. Therefore, limiting the amount paid out by SS and Medicare would balance the budget (or capping the amount on can receive). Sure, people wouldn’t be happy about it, but it’s necessary.
No, total revenue was less that total expenditures as should be clear from the fact that total national debt increased. You are getting bogged down in the internal bookkeeping which shows that public debt, which is only one part of total debt, decreased.
In my example in post #39, total debt increased by zero dollars, while revenues exceeded expenditures by 5$. In that case, are you denying there was a surplus?
Republicans and conservatives are entirely responsible for the debt crisis. They’re only about ninety percent responsible.
Here’s the Presidents who increased the national debt as a percentage of the GDP: Ford, Reagan, Bush, Bush, and Obama. Here’s a list of Presidents who lowered the national debt as a percentage of the GDP: Truman, Eisenhower, Kennedy, Johnson, Nixon, Carter, Clinton.
As you pointed out, Democrats would prefer not to cut government spending. But they’ve offered to do so. Republicans would prefer not to raise government revenue. They refuse to consider it.
As far as government spending, the biggest percentage increases in the federal budget occurred during Reagan’s and Bush’s administrations.
Current law-- if everything is left alone-- will align revenue and spending pretty closely in part by extending the AMT to affect 50% of households (something you’ve yet to acknowledge). Just how well do you think subjecting an extra 47% of households in the U.S. to the AMT will go over with Democrats and their base, who adamantly scream about how only the rich should be taxed and decry tax increases on the middle class?
It’s funny how that works. People don’t want to cut the entitle programs, but they don’t want to pay tax increases for them, either.
Here’s a more accurate example, with (very) approximate real numbers. In 2000, the US gov’t got 1.4 trillion in income tax and 600 billion in SS tax for a total revenue of 2 trillion. Total SS spending that year was 400 billion, while the general fund spending was about 1.5 trillion. So the gov’t took in about an extra 100 billion dollars. Hooray!
So the general fund decided to pay down 100 billion dollars worth of debt. But first it has to get money to cover its own deficit, plus its mandated by law to buy off the entire SS surplus anyways. So it sells SS 200 billion in bonds, and uses the 100 billion left over after its own expenditures to pay down the pre-existing debt from previous years.
So the intra-govermental debt goes up by 200 billion dollars, but the debt to the public goes down by 100 billion. By Yoricks accounting, then, we’ve increased the debt by 100 billion dollars, but in reality, the gov’t took in 100 billion dollars more then it spent, and now owes that much less then it did the previous year. By pretty much any definition then, there was a surplus.
AMT could be easily modified to exclude people below a certain income if they wanted to.
Yes that would pull the alignment of revenue and expenditures out of line but then that graph was not made with current budget cuts which just happened in mind. I doubt exempting people of moderate means from the AMT would have a dramatic impact anyway on that graph.
And please list the “entitle” programs you think should be reduced or cut entirely.
