Oh my. :smack: These fallacies have been addressed at least as often as 1≠0.99999… Let’s do it One.More.Time.
When you deposit $100 in your bank account and withdraw it a month later, does the bank give you the same $100 bill you gave it? Do life insurance companies or private pensions keep your payments sitting around in a pile for 30-40 years? Or do they work just as SocSec? One Doper, believe it or don’t, wanted the SocSec Trust Fund to keep its money in the form of U.S. banknotes, since that’s “real money” unlike Treasury bonds.
And, while you’re abolishing SocSec, you could at least answer the simple question posed to you:
*In your plan, do workers keep paying their payroll taxes as at present, even though retirees are cut off?*If you answer No; that you will cut off both the checks and the paycheck deductions, then explain how that helps balance the “budget.” The one more-or-less equals the other.
Please start another thread if “Which political party took Social Security from the independent trust fund and put it into the general fund so that Congress could spend it?” is your confusion, and Googling that right-wing meme doesn’t unconfuse you.
Let’s say the United States wants to buy weapons for the Army. How exactly is the United States government supposed to enforce a policy that the price of an M4 Carbine is not subject to inflation? Do they tell Colt Firearms that they must sell the rifles at the same price they cost in 2007? If Colt says they now cost more to manufacture, do you force them to sell the rifles at a loss? If Colt goes bankrupt, do you force other companies to manufacture the rifles at the price you’ve set?
Or do you just buy less rifles? Do you tell some soldiers they won’t be assigned a rifle? Or do you discharge the soldiers you now can’t afford rifles for? Do you expect the remaining soldiers to be capable of the same amount of military strength even though there are now fewer of them?
Figure out some good answers to these questions. Now do the same for everything else the government pays for.
I think you’ve made a good point about US government spending. It’s reasonable for the government to increase spending in line with inflation, to support an increased population, to support an increased number of people receiving social security and Medicare, and to boost the economy during economic downturns. Accounting for all of those, US government spending increases have still blown way past any metric of reasonableness.
I suppose you could consider war spending as a necessary exceptional cost, but even adjusting for that doesn’t make the government spending increases look unexcessive. Here’s the costs for Afghanistan and Iraq, $975 billion and $1,060 billion (through 2016) respectively:
There’s no budgetary sign that the US government is worried about the impact of its debt. I’m not sure where/when the debt crisis point will be, but it does seem like the US government is driving towards that point with its foot on the accelerator rather than the brake.
I’m not an economist (obviously) but inflation is a measure of the increase in price of a basket of goods, no? So, if the M4 Carbine, for whatever reason, outpaces the rate of inflation, then other goods should not rise as much as the rate of inflation making it all even out in the end. If it doesn’t, then our measure of inflation is wrong.
I agree with the prior poster. It’s cheating to put spending into “discretionary” and “non-discretionary” categories. The government can spend whatever it wants or does not want.
But spending is spending and taxes are taxes no matter the legislative label placed on them. This argument only works because a specific tax was assigned to the social spending program called social security.
Why is that important, though? If social security was financed originally through an increased income tax, would that make it less sacrosanct?
How about this. Say some years ago, the neocons introduced a “National Defense Tax” and rationalized that as everyone benefits from a national defense, we will assign everyone who works a 6.2% payroll contribution that is designated for national defense and also require all employers to match that 6.2%. In exchange, people were promised a certain level of military preparedness.
Would it be a good argument against proposed cuts in defense spending that people had already “paid” for it? Would it be a breach of a promise to cut defense spending?
Should we argue that the National Defense Tax and spending program is actually a net positive for the government and that the program is run very well?
Or, as I am arguing, do labels not really matter and overall spending is what is important?
What about paying interest on debt? In your mind, is defaulting an option we should always keep on the table?
As far as social security and Medicaid go, I don’t think it’s politically possible to cut those–not just because you’d get voted out of office immediately, but because the whole economy would be impacted. We are talking about money old people are currently using to survive. Cut those payments, and what do they do? They can’t go get a job. So they move in with family? Die? Same with medical care. There may be tweaks we can make, some amount of means-testing, remove the cap on payroll tax, but we can’t just cut social security checks, or remove access to medical care.
I’m not saying that this should be unfailingly strict down the entire line, and some years may rise higher than others and some years lower than others. Further, my overall plan didn’t suggest “cuts” at all. Spending increases in line with inflation.
If you got $10,000 this year and got $10,200 next year, if you weren’t starving or moving in with family or dying this year, then you won’t next, at least not because of the spending increase in line with inflation.
Maybe X costs way more this year but Y costs way less but Z is in line with inflation. X+Y+Z should = inflation, at least in the near term. If not, then we are measuring inflation wrong.
But inflation assumes all things being held equal. So that only works if you hold medical care static. The cost of medical care has gone up way in excess of inflation, because it has profoundly changed. The same with the military–the military we have now is not the military we had in 1980, so you can’t use inflation to measure what it “should” cost. .
It’s not possible to tell people “once you hit 65, you won’t have access to any developments in medicine”. Medical costs just aren’t connected to inflation because the product itself is changing. So if you want to put discretionary and non-discretionary in the same pool, it means that other spending will have to be cut. Because inflation is never going to measure changes in medical costs.
We can have other discussions about ways to cut medical costs. But inflation just isn’t relevant.
But doesn’t that apply to a lot of things, though?
The TV I bought in 1999 is about the same price, adjusted for inflation, that I would buy today. But the TV I get today is far superior, not even close really, than the one I bought in 1999.
The laptop I bought in 2016 is far superior and costs less in real dollars than the desktop computer and monitor I bought in 2002.
Maybe medical care is unique. I’m not sure, and I really do come to this board to learn and also debate. My opinion is not fixed. However, it seems to me that medical care, from the dawn of civilization to the present could be grouped in five categories at any moment in time: 1) Piss Poor, 2) Below Average, 3) Average, 4) Above Average, 5) The Best of the Best.
I fail to see why any of these categories should rise above the cost of inflation. Yes, we can have debates and make policy choices on what level of care that a particular citizen, any citizen, or all citizens should have, but the costs shouldn’t be out of whack with inflation even as technology advances.
But they aren’t the same thing. That’s not how they calculate inflation. Take a car, for example. Inflation measures what it would cost you to buy a 1985 Toyota in today’s dollars. When they calculate what that would be, they calculate improvements in the car separately from inflation–they don’t compare base trim to base trim, they adjust for the fact that the modern car has power locks and windows and a back up camera and air bags and all that. That’s not inflation, that’s added value.
I don’t understand, and I am truly asking. You are saying that when the government measures for inflation and uses a car as one of the items in the basket of goods, it uses the value of a car with no a/c, cassette tape deck, knob radio, carbureted fuel, etc. but then adds for things like bluetooth at current sticker price separate from inflation?
How would that even work? You take the price of a 19 inch tube TV in 1999. It must be worth zero today even if in the box new and we assume it hasn’t aged. You can’t say that the value of a 1999 TV was zero and therefore TVs have suffered infinity inflation.
IOW, if inflation is measured by some half-assed calculation of what I could buy a car with a tape deck, no a/c, knob radio and a carbureted fuel system in 2020, then the inflation calculation is horrifically wrong and we should correct that. Please fight my ignorance.
First note that the U.S. government maintains multiple different inflation measures. The CPI is considered to best reflect actual consumer purchases of services and new goods. (It also includes other spending, e.g. some taxes paid for services like sanitation useful to consumers.) I think the USG makes a sincere effort to make CPI an appropriate measure but it isn’t easy.
Two of the other most popular inflation measures are (1) PPI which reflects pricing pressure on industry from commodities and intermediate goods and is a better indicator than CPI for profitability prediction; and (2) “core” inflation used by the Fed to set interest rates. Core inflation ignores food and fuel since price hikes there generally do not result from overheating of the domestic economy.
For CPI they try to match a 2020 product with its 2019 equivalent and so on, making adjustments, though this can get complicated as features and consumer preferences change. Because the quality of smartphones increases so rapidly, some kind of scaling is done (which may give that component a falling-price trend); I’m not sure whether such special scaling is applied to products other than smartphone.
200 years ago Best of the Best medical care was probably more dangerous to the patient than Piss Poor medical care. Homeopathy was a pretty good solution back then since giving a patient water was safer for him than bleeding.
The “problem” with medical care now is that there are more options for care, some of them expensive. How to you relate inflation in medical costs with better survival rates? And better outcomes.
That’s why the basket changes. A laptop is not really a substitute for a typewriter.
I know someone who worked for CPI, and I’m pretty sure an M4 Carbine was not in the basket, by the way.
Non-discretionary spending makes up 70% of the US budget. In a discussion of controlling US government spending, why would I ignore a category 2 1/3 times the size of its counterpart?
(Calculation is 1 – 1.438/4.79, percentage applied)
Is your point that US government discretionary spending isn’t out of control? You’re right, it isn’t. It’s fluctuated a lot, so the analysis depends on which numbers you use, but for the 2007-2020 timeframe of the OP, discretionary spending is in a range of 28%-33% higher now than in 2007. That’s slightly higher than the cumulative inflation rate over that period of 24.5%, but as noted earlier, costs also would have expanded to serve an increasing population, and per-capita real costs of discretionary spending would be down.
Discretionary spending: Historical Tables | OMB | The White House Table 5.4
Inflation: https://www.usinflationcalculator.com/inflation/current-inflation-rates/
Now that we’ve covered discretionary spending, let’s look at the actual two biggest US government costs, Social Security and health benefits (Medicare and Medicaid), plus additional non-discretionary spending. From 2007 to 2019, the number of Social Security recipients increased from nearly 50 million to a bit over 64 million, an average increase of 2.11% a year and timespan increase of 28.5%. Social Security Beneficiary Statistics Adjusting for inflation, Social Security costs should have increased by 35.5%.
2007 Social Security spending: $581 billion FY 2007 U.S. Federal Budget and Spending
Expected 2020 Social Security spending: $1,092 billion FY 2006 U.S. Federal Budget and Spending
That’s an 88% increase. 52% higher than the calculated expected percentage increase. That’s $305 billion above the expected amount increase.
Other mandatory spending 2007: $302 billion
Other mandatory spending 2018: $569 billion
(Same sources) $267 billion increase, or 88.4%. Using Medicare baseline, $131 billion above calculated expectation. Given “Other” is the second biggest increasing subcategory behind Social Security, I’m wondering how much of this subcategory should really be in the discretionary category.
So based on some quick Internet research, current non-discretionary spending is roughly $583 billion higher than the calculated expectation based on the increased number of beneficiaries and inflation. Calculating that against the 2020 US government budget figure, the budget is 14% higher than the calculated expectation based on demographics and inflation.
TLDR; US government spending increases have still blown way past any metric of reasonableness.
By the way, the earlier post you should have cited was #10. Maybe you should investigate your browser’s zoom function.
Improvements in medical care are like anything else; a responsible party, whether the government or otherwise, needs to decide if the new product is cost effective, whether they want to pay for the new product or not, and if they are willing to incur the cost, how they’re going to pay for it. If the government decides that a 5% above inflation increase in the health budget will be beneficial to overall national health by providing new medical treatments, that’s great. But that increase needs to be funded. Either take that amount away from other programs, or raise taxes. But if the US is looking to control the national debt, which it will have to do sooner or later, then it has to have the government be responsible when it comes to spending in all categories. Hard decisions suck, and they especially suck when it comes to something like limiting medical treatment. But ultimately whatever the government is spending on now, even if it’s through borrowing, will have to be paid for. Deciding that medical costs are out-of-bounds for fiscal restraint just creates problems for the budget in other areas. And it’s not like the health budget is the only category people care deeply about. People want the government to supply more of almost everything. That’s the problem.
I’ll also note that the government needs to ensure that the costs of existing medical products aren’t increasing at a rate that exceeds inflation. I’ve not done any extensive reading on the subject, but from reading scattered news reports, I get the impression that just keeping costs of existing medical treatments under control is a big part of the problem.
I for one agree that we should slash defense spending and raise taxes on the wealthy (for real this time). Which is to say that we shouldn’t blindly balance the budget, but of course the budget can be balanced. It’s happened before, and if we get democrats into office if can probably happen again.
In many ways a laptop is not a substitute for a typewriter, but in many ways it is. In 1985 if I wanted to send a resume to a business, for example, I would have to buy a typewriter, typing paper, envelopes and stamps.
Today, I would have to buy a laptop, purchase Microsoft Word, and purchase internet services so I could email the resume to the business.
Further, if we assume that this place only accepts online applications, buying a typewriter like in the good old days, simply is not an option for me. In that context, the laptop is a substitute for the typewriter.
Of course, the laptop does thousands of other things that the typewriter could not do and should be compared to those other functions as well. However, how do compare those functions that did not exist in 1985? Do you analogize researching a topic online with a trip to the library?
I think if you totaled everything together, “inflation” in this context is minimal and probably deflationary. I can do all of the tasks that I had to do in 1985 much easier and with less cost today, which is really the figure one is after.
Using the example of a cereal which increases in price 5% but also added more vitamins and minerals, any measure of inflation must account for the unavailability of the prior product. If the USG decides that 2% of that increase was inflation and 3% was me getting a better cereal, then that 2% number seems meaningless except as an accounting gimmick.
Nobody can buy the old cereal without the additional vitamins. Every person has just seen their cereal costs increase by 5%, not 2%. 2% is not a number that anyone is affected by and seems meaningless.
But it also has to account for the fact that now that cereal costs 5% more, I might just make pancakes instead. I don’r have to buy the new product. Inflation is really hard to measure, and they make a lot of estimates and adjustments. But added value is not and has never been considered inflation.