The math gets fuzzier

Great Debates
1

Lessee here, Quincy says he’s going to slash taxes, raise spending, and pay off the debt all at once, with this all happening because of the incredibly-quickly-growing economy that will at last be freed from the shackles of the Democrats’ taxing and irresponsible spending. Not only that, but no reasonable interpretation of the election results allows one to claim that it’s what We the People voted for.

That voodoo approach sounds awfully familiar, doesn’t it? Been there, done that, didn’t work, still paying for it, they didn’t learn from it. Move your savings into inflation-protected securities NOW, folks - it’s coming back, just like deficits, and the debt is going back up.

Santayana didn’t go far enough. Even those who DO remember the past can STILL be condemned to repeat it.

2

Yeah, that sounds like Reganesque years where democrats raised the spending where Regan cut taxes. Now if we could get a bigger majority of republicans we wouldn’t have this problem

3

I would actually favor paying down the debt, if the Democrats had gone along with the Balanced Budget Amendment. As it is, I think getting it payed off is only an opportunity to run it back up again. So its better to keep taxes lower and keep some downward pressure on spending.

4

Izzy I fail to see the logic here. It’s rather like saying I won’t pay off my credit card debt because I might run it up again.

Re the Balanced Budget Amendment, you should thank your lucky stars it wasn’t passed. Staggeringly stupid idea when it comes right down to it. Treating the symptoms rather than the problem. In any case, deficit spending is not necessarily bad, any more than occasional use of credit by businesses or consumers. It all depends on what use its put to. I wouldn’t want to take away one very useful policy tool just because of a relatively recent phenomena of undiscipline.

5

More like saying I won’t pay off your credit card because you might run it up again. Unfortunately, while we pay the bills, Congress gets to make the decisions.

I think lack of financial discipline is the problem. Deficits are the symptom. A person who habitually runs up large credit card debt that he cannot afford does not need an additional source of income. He needs greater commitment to financial discipline.

Agreed.

That’s where we differ.

6

In case I wasn’t clear, which is probably the case, of course I think it’s the most responsible thing to pay the debt down, or off, just as we’ve been doing in the last few years. That reduces the portion of tax revenues needed just to pay interest, freeing more capital for private-sector investments and the resulting economic development, and reduces pressures on the government (whoever’s in charge) to inflate the currency with all of the badness that THAT causes. I do understand a desire to ignore all that complicated stuff in favor of simple pandering to one’s constituencies and ideologies, though, and to blame the other guys for anything that goes wrong.

To nip the unreconstructed Reagan-worhiping arguments in the bud: How do you think the deficit-laden budgets he submitted to Congress in the first place would have been different if he’d had a balanced budget amendment in place?

7

Hmm, last time I checked Izzy Congress represents us, presuming you vote. Delegation of authority. Collective compromises and collective desires in all their wonderful coherence. Ergo, it is indeed our debt. We got all those wonderful roads, and tanks, and airplanes etc. Your personal objection to items of spending I’m afraid isn’t relevant if you accept our overall system.

Certainly, and political pressure is the way to do it, not engraving a policy in stone per the Constitution. It’s not the right tool, just like prohibition was not the right tool for another problem. Indeed, oddly enough it strikes me that current opinion runs strongly for deficit reduction. If some folks would lose their obsession with tax cuts and apply some good old selective pressure, we might get different results. However, all I hear is talk about indiscipline instead of… discipline.

All in all, I oppose solutions like the amendment for the same reasons I think dollarization is a bad idea for countries suffering financial indiscipline – it simply avoids the roots, undermines the institutions charged with the responsibility and results in a sort of infantilization of politics. Same position I’ve had on term limits. Non-solutions all.

One either tackles the problem or not.

8

Collounsbury

This is an idealistic view, but not necessarily a realistic one.

The central question is if the best way to address an issue is Method X, but this is unlikely to be done for practical reasons, does one apply Method Y or insist on doing it right? I would opt for the former.

It can frequently happen that an organization must be geared along lines which render it unlikely to be most efficient in a particular area. The form of government that we have is the product of many considerations. We cannot simply assume that because we believe in this form of government it follows that this form of government is capable of addressing every problem in the most efficient and constructive manner possible.

It is the nature of our government that as people come to look to government for more and more aspects of their lives, there is an upwards pressure on spending. This is due to the fact that many interest groups have champions who believe strongly in their particular causes. And each region of the country has representatives who have as a priority getting spending for their particular area. By contrast, no individual Congressman or Senator will be held responsible for balancing the budget. So while many are in principle committed to balancing the budget, there is always a pressure to overspend. (The president is an exception to this, but his power is limited compared to that of Congress).

9

I can’t believe that you actually claim that republicans are the ones that are constantly spending. What I was saying is Regan cut a deal with the democrats, the democrats got to spend while Regan got to cut taxes. Course, if Gore had been in office you would have praised spending to great degrees.

10

What speech were you watching, Elvis?

In the one I saw, the president spent three-quarters of his talking time pointing to new, vastly increased spending on our highest-priority items, raising the rest of the budget over the rate of inflation, PAYING $2 TRILLION OFF THE DEBT - INCLUDING PAYING OFF ALL OF THE DEBT THAT IS AVAILABLE TO BE PAID OFF WITHIN THE NEXT DECADE, leaving $1 trillion as a contingency fund and still having enough for the tax cut he proposes for all taxpaying Americans. All while not touching the Medicare and Social Security surpluses.

Do you have evidence that this isn’t so? I’d be legitimately interested in seeing it.

And allow me to be preemptive: anyone that wants to enter the thread with “richest 1 percent” mantra may want to also note what percentage of our nation’s income taxes those folks pay as well.

It was a skillful speech - as noted by everyone from the Washington Times to Salon.com Bush rather stole the thunder from Democrats who say the federal government can’t afford these “risky cuts.”

Just what’s being cut here? The 8-percent-growth-per-year federal budget of Clinton? Good! I’d rather pay down some of my own debt than trust my friends in Washington to hold the money and not spend it. Their track record isn’t so good.

I did enjoy Daschle’s and Gephardt’s knee-jerk responses immediately following. What a shock! Don’t you just love it when they say the tax cut is too “expensive?” As though giving people back their money that they overpaid beyond the federal government’s needed funds is an expenditure.

A better attitude was sounded by Democratic Senator John Breaux of Louisiana. (And I do hope this guy’s star continues to rise in his party. He seems to be a reasoned pragmatist that is unafraid of pulling his toes off the party line. He reminds me a lot of John McCain in that respect.)

Anyway, Breaux said of Bush’s budget proposal, “I liked it. The question is, does it add up? If it does, sign me up.”

I would ask no more than that from any other member of Congress. As opposed to rejecting it out-of-hand because it would be perceived as another blow for the Democratic Party if it went through without dramatic alteration.

11

Just out of curiousity, how do you resolve this piece of revisionist history with the popular conservative notion that “Reagan won the Cold War by outspending the evil oppressive Russkies”?

Any child knows you can’t accumulate money if you spend more than you take in. The GOP clings to this pipe dream only because it benefits their stock holdsings and business interests, not because it makes sense.

12

Milossarian, you’re right about asking if the numbers add up. But you said they do before even asking the question. It’s good that you’re asking Congress to do that. But are you asking yourself the same thing? Remember that you can make any numbers add up if you depart sufficiently from reality. You’re asking for “evidence” of what’s going to happen in the future, but in the real world we’ll have to insist on experience and best-, worst-, and most-likely-case projections from the likes of the Congressional Budget Office. Experience says Bush’s projections are overoptimistic.

You might also explain how Bush’s speechmaking technique is relevant. I insist that content is what matters, not pronunciation.

Asmodean, I’m mystified why you would think I would “praise spending” under a Gore administration. Where did you get THAT idea? I do know it’s hard for a knee-jerk partisan to understand how anyone else could hold more nuanced views, though.

IzzyR, I have to chime in with Collounsbury on this. The government isn’t “them”, it’s We the People. That comes from our being a democratic republic. The national debt is ours, not “theirs” - and even if there were an identifiable “them”, they’d be getting the money from us. The people who have to take responsibility can be seen in any mirror.

13

Elvis

I don’t see how you’ve addressed my previous post. To reiterate, the people bear the consequences but don’t directly make the decisions. The Congresspeople who do so frequently have narrower interests that supercede their general commitment to budgetary responsibility. And whomever the “responsibility” lies with, you have to consider the likely outcome of different scenarios in making decisions, instead of focusing on moral “whose responsibility it is” considerations.

14

**
My attitude would be the same as Breaux’s. I like what I hear, and if it adds up, I’m all for it. I supported Bush in the campaign because of his ideas about tax reform and reducing the rate of federal government expenditure wherever possible, so this is what I’ve been waiting to see.

You, Elvis, are the one who started a thread panning it without seeing if it adds up and makes sense. You compare it to Reagan’s actions, and I’m not sure that’s a very good comparison. What were the surpluses when Reagan made tax cuts? And we were in a Cold War then, and involved in deficit spending at least in large part to present and maintain a vast, threatening military presence to the Soviets.

**
Sen. Pete Domenici, A Republican on the Appropriations Committee, said on “Meet the Press” Sunday that the projected budget surpluses over 10 years have two projected economic downturns factored in. He didn’t go into details (good way to lose a television audience).

The deficit apparently isn’t some out-of-leftfield-myth, as Democrats keep upping the amount of the far smaller tax cut they propose, according to this article:

The details of Bush’s plan will now begin to come out, and will be analyzed by far better economic thinkers than you or me. I will be interested to see what economists of varying political stripes and middle-of-the-road members of Congress in both parties, have to say about it going into the weekend.

I’m not ready to pan it because it’s my obligation to, like Gephardt, Daschle and you.

15

I am glad you admit that your a knee-jerk partisan, I do think you are too partisan too understand republicans views.

Because while Regan and the Democratic congress did it together Regan gets all the credit or the blame. Regan did it, with the help of the democrats, contrary to popular belief things get done when people work together.:slight_smile:

16

I don’t have any of the figures in front of me, however the Democratic line runs something like this:

1 - Yes we have a surplus.
2 - That surplus mostly comes from Social Security and Medicare, and only a small piece of it, if any, comes from the operations of the Federal Government ex these two programs.
3 - Given that, a tax cut will eat into the trust funds of these two programs at precisely the time that we should be building up surpluses to pay for the retirement of the Baby Boomers.
4 - Finally, a tax cut will increase payments on interest on the debt, and it has to be remembered here that these compound, so that the benefits of paying off the debt faster compound in the same way as when you prepay your mortgage.

The Republican line is as follows (not a Republican, and I didn’t vote for the man, but I do agree with Bush on the need for a tax cut, if not on the structure of it, which I believe gives me some small amount of objectivity. In my own mind, of course.):

1 - Any surplus is an indication of overpayment of taxes.
2 - To the extent that there is an overpayment, this is unnecessarily slowing down the economy.
3 - Therefore, given that the economy is currently slowing down, a tax cut is indicated in order to get it going again.

IzzyR and others, feel free to add to the Republican line obviously, as it appears that’s the side you’re on.

Myself, I have my own reasons for being for the tax cut, to wit:

1 - The Clinton tax increase was needed to get rid of the deficit.
2 - It did its job, beautifully. The reason why was simple: since the economy was already on the road to recovery when the increase was voted in, it added to the revenues that otherwise would have been paid in, thereby rapidly decreasing the deficit, until, by today, there is no more deficit.
3 - While it’s true, as the Democrats contend, that there is no real surplus outside of Medicare and Social Security, it’s also true that if the economy slides into a recession, the future surpluses will disappear anyway. So, paradoxically, if you want the budget to be in surplus, you have to take the chance on a tax cut to get the economy rolling again and get the budget into surplus. It may not work, but it’s a chance that IMO is worth taking.

There’s a lot of small details that go into why I think this way, but this post is long enough by now.

17

Before you buy into the ‘risky tax cut’ argument, you should remember that the Democrats aren’t proposing to save that money in case the surpluses come through - they plan on SPENDING it. Specifically, they want to trim Bush’s tax cut to 900 billion, and add 700 billion in NEW program spending (over and above increases to existing programs).

Now ask yourself - which approach is riskier? If Bush gives the people their money back, and the economy falters, he can always raise tax rates again. But if the Democrats keep the money and spend it, and THEN the economy goes sour, do you really expect that they will cut the funding for those programs? Not on your life. They will become entitlements, and untouchable.

So just which plan is going to hurt more if the economy tanks? Which one offers the most opportunity for the government to recover their funding if they need it?

For that matter, why weren’t the Democrats raising these ‘fiscal prudence’ arguments ten years ago when they controlled the CBO and used highly inflated numbers to justify raising government expenditures far quicker than the rate of inflation?

What I don’t like about the Democratic response is that it is basically a lie to hide their true motives. They should just come out and say, “We want to spend the money on these cool new programs we think you’d like or need”. But they’ve decided that this would be a bad strategy, so instead they’re trying to wrap the debate around class warfare and ‘fiscal responsibility’, which make for better sound bites but are fundamentally dishonest arguments.

18

While Congress may have added on a little spending to Reagan’s budgets, the facts are:

(1) Reagan never submitted anything even remotely resembling a balanced budget to Congress.

(2) The numbers coming out of the White House budget office were incredibly optimistic because they overestimated revenues, either because they believed in supply side economics, or (if the implications of some here on SDMB who have read Stockman’s book are correct) because they were pretending that they believed in it.

(3) Discretionary non-defense spending increases during the Reagan years were not very large at all. I can’t remember if they did or didn’t keep up with inflation…I thought not. Someone gave the figures in the recent thread on Reagan a few weeks back.

19

I think I’m going to bail on this thread since it seems to be descending into boring Republican vs Democrat sniping.

It would be nice to see an examination on the numbers. But…

Last word then, Izzy, I can’t agree in any shape way or form with your Them attitude towards the government. This is a democratic government in which one delagates authority to your reps. Often that means living with decisions you may not like, but such is concensus.

A few added comments:

Hmm, not often called idealistic, me. Usually I’m accused of cynicism.

I fail to see the idealism. Rather, I’m looking for practical fixes. I see major problems with the quick-fix of a balanced budget amendment, including inappropriately eliminating an important policy tool because of what may be a transitory problem. If it is a problem.

Strikes me that if some folks **really do ** want fiscal discipline, they would use highly evident public support for it now to exert pressure. That’s how the system works.

I simply disagree with your judgement that method X is unlikely to work. Seems like self-justifying pessimism to me.

I’m unaware of ever assuming the above so I’m afraid I don’t regard this as relevant.

Will of the people. If that’s what a democratic majority feels is appropriate, what’s the problem? You don’t like it, well tough. I don’t like – big expensive military budgets but I live with em.

It all depends on mobilization. Your hyper-negative evaluation has a grain of truth, certainly, I don’t see it as precluding the normal operation of our system in achieving debt reduction. Unless one has in fact entirely given up on it.

20

That’s paradoxical, all right. You’re saying the economy boomed during the Clinton years because of debt reduction enabled by higher taxation, so now we need to do the opposite?