I don’t disagree with the idea of living with decisions that one does not like. I merely think that this particular mechanism (BBA) is one which will help bring about a commonly desired goal.
Maybe I misunderstood you when you wrote that “Your personal objection to items of spending I’m afraid isn’t relevant if you accept our overall system.”
The problem is that each person (and interest group) feels that deficits are bad but feels that their particular area of interest deserves additional spending. The result is that it is difficult to avoid increases in spending, even if the overall cumulative impact contradicts the will of the people. (This ties in with the argument that others have made in this thread about the eighties. The Republicans wanted defence spending, the Democrats wanted social spending, and between them the deficit got blown out of proportion.)
Bottom line is that, IMHO, the present surplus situation is the temporary result of a spending/revenue lag, due to the Bush (Sr) and Clinton tax increases combined with an extraordinarily long economic expansion. I agree with {b]Elvis’** statement in his OP that the deficit will go back up. Only difference is that I think it will go up in any event, due to either increased spending or tax cuts. Given this choice, I’d opt for the latter.
Much as I hate to disagree with you (I’m planning to put a shrine to you next to the quince plants I now have as a result of your suggestion in the thread about what you can’t find on the Internet; explaining this to the neighbors may be a bit dicey, but wotta hey?), that’s not exactly what I said.
I figure that the Clinton tax increase was needed at the time for two reasons:
1 - The deficits were spiraling out of control. We were really in an almost emergency situation, with the deficit in the last year of the Bush administration exceeding 300 billion dollars, if I recall correctly.
2 - The economy was already recovering. Given that, it was a perfect time to solve the deficit problem, since the prosperity that was already coming on at the time would allow people to afford the increased taxes, and since any slowdown caused by the tax increase would barely be noticed.
Something like the opposite conditions are in place today. We have no deficit, thanks to the management of the economy and taxes over the past eight years. Also, the economy is demonstrably slowing, even if it’s not technically in a recession, so people today are going to be less able to afford the current tax burden than they were even last year.
So, a tax cut is needed and can be afforded, IMO. Now the structure of the cut is where the Democrats should be making their point. It’s a little hard, without bringing payroll taxes (Social Security and Medicare) into play to give any tax cut to the poorer people, but it should be possible to structure it so that middle-class people (around 50k or so per year in household income, which for a lot of people involves both husband and wife working) get a large share of the benefit. I haven’t studied the tax plan in excruciating detail, but the fact that elimination of the estate tax is part of the package is enough to show which way it’s skewed.
Pantom, that was YOU asking for the quince? Well, glad to help (and thanks to Google, btw).
I do understand your argument, but I don’t see any mention in it of the role of the national debt, or its effects on fiscal policy, or the basic responsibility of paying it off. All you’re referring to is current-year tax revenues versus current-year budgets.
We do NOT have a pay-as-you-go system, which IMHO would be the best, as long as there are outstanding obligations from previous years. The consequences of all those decades of deficit spending cannot be ignored, but that’s where most of the risk seems to lie.
Drifting from the topic a little, I would like to hear any refutation of the statement that stopping inflation is truly the best way for “people to keep more of their own money”. The rush for current-year tax reduction doesn’t seem to take that into account at all.
Re quince: yeah, that was me. I was truly desperate.
Re inflation: if you’re a debtor, inflation can be a beautiful thing, since you get to pay off your debt in money that’s worth less than it was when you received it and, presumably, put it to good use.
Between the Scylla(!) and Charybdis of inflation and unemployment, I’ll take inflation, thank you.
And we do so have a pay-as-you-go system. Medicare and Social Security have “trust funds”, but they can only invest in government debt. So you have the government investing in the government in order to meet the future obligations of that self-same government. Which is why you have a reported surplus even though the actual overall indebtedness of the government isn’t declining, because these two systems are papering over so much of the debt.
So, in budgeting you get to deal with today’s problems today. Since we can well afford it, and since the economy is looking a tad green around the gills right now, I believe we can afford to give ourselves a tax break.
Hey, 'Lucidator, can you find some official cites for those quotes on supposed Republican positions? Seems to me that I recall predictions of a recession dating back to a couple years ago, when people first started discovering that Dotcom companies aren’t exactly a Garden-of-Eden goldmine.