Debt ceiling politics

Is this summary basically right?

- Tax rates are the lowest they've been since the 1950s, debt has been increasing at an accelerated rate since 2003's Bush tax cuts that some call one of the most fiscally irresponsible years of our history
- Democrats propose a more aggressive spending cut plan than Republicans, but Republicans pass on this because they say it's not realistic enough, and includes the Bush tax cut repeal
- Republicans want Biden spending cuts
- Middle class wages have been flat for decades, the profits/net worth of the rich have been on the rise during this same period of time

If so, it's a little hard to follow exactly why keeping the Bush tax cuts is such an important thing to do. Just as Republicans rip apart the Obama stimulus package for not producing jobs, have these tax cuts resulted in an increase in jobs?

Can we conclude that tax cuts to the rich don't necessarily yield jobs and bring up the middle class? If so, why do people still seem to support the Republicans dragging their heels on the tax thing? We all agree that spending is out of control, but in the meantime, there is a problem to solve in the here and now that can be bettered (note that I didn't say "solved") by restoring the tax rates to what they used to be. If cutting spending is the name of the game, why do the Republicans favor the less aggressive Biden proposal? Is all of this accurate?

What exactly is going on here?

You've got most of those points very wrong, besson.

I was hoping for a more moderate analysis Big Mac, no offense.

Fixinated.

The reality is as follows:

Our debt / deficits are SOOOO huge, it will take BOTH big spending cuts and huge tax increases to dig us out of that hole. Neither one alone is sufficient to really arrest the runaway debt in this country.

I wish politicians and economists would take a clue from Greece. It's pretty obvious that there is a point where even the steepest cuts and highest tax increases don't yield enought to reduce the debt. Then you are f*cked as a country.

It's 110% guaranteed that the US will end up in a similar clusterf*ck. We have too many dumb and/or corrupt politicians and economists to do what's right.

-t

I differ with you there a bit, turtle. We could get out of our problem with large spending cuts coupled with select tax cuts. That's the optimal scenario. That's what the country used to do to get out of great financial hardships before the radical Progressive market intervention under the cursed FDR.

Let's cut the Federal budget down to $2 Trillion annually within five years, flatten the base and run surpluses based on higher resulting tax revenue from higher growth to pay off the debt. That's what I would do if I were the Benevolent Dictator In Chief.

besson: you ask for moderate replies but your politics aren't moderate. Your analysis is far left of center, and I don't take you seriously enough to try to reason with you in the kinder, more pedantic way you'd prefer. Sorry.

remember obama's debt includes the wars in iraq and afghanistan that were not on the book during bush

also, the debt is money spent already.


how many billionaires own small businesses?

if you give billionaire steve jobs a tax cut, it doesn't mean apple will hire more...steve does not put his money in apple

republicans would rather risk a worldwide crisis because they want to beat a black man ...so childish

That alone will not help if the Fed can't continue to manipulate the interest rates down.
Once interest rates rise, the interest portion paid on government debt will become so huge, no way to tackle w/o tax increases.

Plus, let's not forget that the off-balance "debt", all those entitlement commitments are over $ 120 Trillion.
Again, sorry to be realistic, be we already are past the point of no return.

-t

You're an :censor:, but you already knew that.

-t

Depends. Per the CBO if existing law were simply left in place ... i.e. allowing the Bush Tax Cuts to expire ... then the annual deficit will be erased by 2018. Makes sense since that is the primary driver of the long-term budget deficit in the first place.

http://www.cbo.gov/ftpdocs/120xx/doc...dgetTables.pdf

OAW

We're only past the point of no return if you believe that fundamentally the American people value Empire, Entitlements and Enormous Government in general over financial well being. We're only past the point of no return if the American people, when faced with a clear crisis that will destroy American life as they know it, are so gullible that they will continue to fall into the Left's trap.

You may well be right. The pessimist in me strongly agrees with you. But it doesn't necessarily have to be fait accompli.

Yeah, that's the same jokers that believe interest rates will remain this low for the next 10 years. How realistic is that ?

And again, what about the $120+ Trillion entitlements (Medicaid, Medicare, Social Security, etc...) ?

-t

I think it's a mere academic / theoretical option. In reality, people and politicians kick the can down the road until it's too late. Sure, they regret it later, but you can't just unf*ck 50 years of greed, laziness and living beyong one's means.

We're heading towards a big year of jubilee, where the current economic order collapses and everything resets. If for the beter or worse, we'll see.

-t

hello sunshine!

you know i'm right

It's funny you put that way - a Jubilee. I don't want to derail this thread and make it into a religion one like the other I have been participating in most recently, but the Talmud records a number of opinions that before the final Redemption, the economies of the world will have to completely collapse. And I may be wrong, but IIRC I think similar claims may be found in Christian scriptures.

Haha, we know you're full of it.

You may be narrowly right in the limited area that war spending was a major driver of our deficits, but at its costliest defense is still only a fraction of Entitlements, and Defense is actually a constitutional function of the federal government. Medicare, Medicaid and Social Security are flagrantly unconstitutional, illegal programs that should have been long ago abolished, no matter how well-intentioned they may have been originally.

It is if the US continues to pay on time. But of course, with the GOP playing chicken with the debt ceiling the bond markets could very well get spooked causing interest rates to rise sharply. The thing is ... some in the GOP don't think that's necessarily a bad thing when it comes to short-term politics because the resulting economic damage could be laid at Obama's feet come 2012. Then again, cooler heads in the GOP realize that it could also be laid at their feet ... and more importantly the long-term economic damage to the nation isn't worth the risk.

Entitlement reform is a must. But again, that's a long-term deficit driver. And the fundamental underlying cause for that is out-of-control healthcare cost inflation. That is the issue. And even if Medicare/Medicaid were ended tomorrow and the government was off the hook for the bill that issue would still exist.

OAW

And the Dems aren't playing chicken on their end with Nanci Pukelosi acting like she's still Speaker and making all kinds of demands about no real spending cuts? They're both playing to their bases right now, and in truth the Republicans are being far more moderate than they're being portrayed as, at least in comparison to true spending hawks like me.

But ultimately the GOP will cave and get something much less than they were supposedly fighting for, just like with the fiscal 2010 continuing resolution (or whatever it was that ended up cutting much less than they claimed).

I'm glad you agree Entitlement reform is a must. That's huge coming from someone of your political orientation. But as for Entitlements being long term deficit drivers, that implies they don't drive the deficits right now. Medicare certainly does right at this moment drive the deficit. And if Social Security isn't yet running deficits I'd be very surprised.

As for the continually rising cost of health care being the central problem as opposed to the Entitlements, I think that's only half true. I believe it's undeniable that the Entitlements, government regulation and other third party distortions cause much of the inflation in health care goods and services. And if we were to phase out Medicare and Medicaid tomorrow, not only would those costs be off the backs of government and tax payers, I believe it would result in less market distortion and lower prices as a result of a healthier, more robust form of competition. And that's especially true if the market for health insurance was expanded beyond state lines back act of Congress.

Ultimately, I care much more about the individual Constitutional rights and liberties of American citizens (including their economic soundness based on a sound dollar) than I do about providing any American citizen with government pensions and government health care benefits. As cold and as heartless as it may sound, I'd rather see Americans who through no fault or multiple faults of their own suffer economically or medically than to see the complete destruction of the Republic.

This is yet another example of you making sweeping right-wing ideological assertions that have no basis in legality. The fact of the matter is that the constitutionality of Social Security was decided in Helvering vs Davis, Steward Machine Co. vs Davis, and Carmichael vs Southern Coal & Coke and Gulf States Paper. All in the affirmative. Medicare is a amendment to the Social Security Act which had already been ruled constitutional way back in 1937. The constitutionality of these entitlement programs is a matter of settled law.

Now you have every right not to like it. You can disagree with the decision. But you can't claim that it is unconstitutional when the Supreme Court has already ruled that it is on multiple occasions. :hmm:

OAW

Why do you have to have tax cuts? What is so unaffordable about taxes as they are now? I make a pittance every year, but taxes don't put me on the street. And I realize our government needs to run. I completely agree that spending needs to be cut dramatically in all areas, but I think that tax cuts will aggravate the situation. Not make it all better. I will gladly pay an increase in tax if it can actually reduce the national debt to a manageable level.

Don't you see, without those tax cuts those poor billionaires will be out on the street, living out of their Maybachs...

lets put things in perspective at how large the debt is.

If the government slapped on a 2.00 tax on every gallon of fuel, added a $1000 level on every house and collected 10% more individual tax and 30% more corporate tax this would generate about 630 Billion Dollars a year, at 10 years this would equal 6 Trillion dollars. Still wouldn't be enough to cut the debt in half.

The debt is freaking massive....

This tax cut religion is what I want to try to understand, particularly what evidence exists to support the idea that these particular tax cuts have benefited the middle class or created jobs?

mitchell, do you know what the top tax rate was when the income tax was first instituted in 1913-1915? The top rate was 7%, which kicked in above $500,000. And when it was instituted the country was assured that the rate would never go higher. :lol:

I know that the federal government is an enormous beast compared to what it was back then, but why is it your presumption that taxes need to be anywhere near the rates they're currently at? Why is it your presumption that legalized theft backed by the hugely coercive force of government that can deprive you of your liberty if you don't comply is such a wonderful thing? Why do you believe it's right for your government to take from your wealthy fellow citizens at very high rates, as opposed to your government cutting itself back down to its constitutionally appropriate levels of spending, commensurate with its constitutional duties? Do you think that because you make a pittance every year it's right to rob your neighbor who makes a great or even astronomical living? What gives you that apparently arbitrary right to disproportionately punish other people's success and profit motives? And if you personally don't have that right as an individual, what makes you believe government collectively has that right?

Also, what makes you believe higher tax increases on the so-called "rich" is the most effective way at closing our deficits? We bring in hundreds of billions of dollars more in revenue to the federal government than we did ten years ago, but we sadly spend about $1.3 trillion more than we did back then. It's not a revenue problem because we're collecting more revenue under the Bush rates than before. It's a spending disease. And yet higher taxes on a small subet of our population isn't going to solve the spending disease we have. You could take the so-called "rich" (those making $250,000 and above) at 100% top marginal rate and you still wouldn't close a single year's current budget deficit.

There is, in fact, widespread agreement that tax hikes are in general the wrong way to deal with the deficit/debt crisis. Look at the Simpson-Bowles commission recommendation to simplify the tax code (remove deductions), lower the marginal rates and flatten the tax base (have more of the country pay some kind of income tax again). This was the recommendation of a bipartisan group of lawmakers that President Obama assembled. And this commission did not call for higher taxes on the "rich."

Oh, right, long-term. :rolleyes:

Obama already started fear-mongering that social security checks might not be sent if the debt ceiling isn't raised by Aug 2. That's long-term for you, 3 weeks.

The Fearmongering At The Top Begins: Obama Says "Can Not" Guarantee Social Security Payments Without A Debt Ceiling Hike | zero hedge

-t

Because he is pragmatic, and lives in this decade?

If you want to start comprehending the "tax cut religion" start with my post below. If you just want to say silly things and listen to the lefty echo-chamber, you can do that.

If you ask me more needs to be collected from Social Security and Social Insurance. If you pair things up to create a balanced budget in a proportional way

Current spending for Social Security is $701 Billion and Medicare and Medicaid is $793 Billion for a total of $1.494 Trillion. Whats collected from Social Security and Social Insurance is $865 Billion. That's a different of $629 Billion that needs to be collected from and for Social Security and Social Insurance and im lumping Medicare and Medicaid in here because its part of the social net.

Mandatory and Defense Spending is 1.105 Trillion and this should be paid for by income tax collected from Individuals and Corporations. Which works out to be 1.090 Trillion which means only 15 billion more needs to be collected from Income taxes

Discretionary spending and Interest is at $857 Billion and the excise tax and other income only makes up $207 Billion. So another $650 billion needs to be collected to even out the Discretionary spending and Interest payments.

So collect more from Social Security, raise taxes a little bit to make up the 15 billion and add a consumption tax to pay for discretionary spending and it is a balanced budget. Still does not address cutting the debt.

Is the absence of a post below a facet of this religion?

Just ribbing you... :)

You clearly don't want to have substantive debate. Your politics are in line with the type that are helping to seal the fate of this country, besson. The great unwashed masses who believe as you do are dooming us. I'm sorry I try to engage, against my better judgment, in a rational discourse with you on political topics like these. Why should I try to argue in a serious manner with the town jester of the MacNN Forums?

FUD.

Your lack of pragmatism and overblown rhetoric is tiresome. I know all of your philosophical theories and beliefs, what I want is some evidence that the Bush tax cuts have created jobs and/or benefited the middle class. You can't cry for a lack of evidence of the stimulus bill creating jobs while giving the tax cuts a free pass.

To you, perhaps. That's all you see my words on the subject as - lack of pragmatism and overblown rhetoric. Meanwhile, I see our country careening toward an economic cliff and judgment day very near for our collective financial future (not just in the US but worldwide), and the solutions I advocate for are actually infinitely more pragmatic than anything you're inclined to believe in. You're asleep besson. You're in the Matrix. You call me extreme, but I'm only extreme in proportion to your lack of sense on the topic.

And I've given them to you, but you're too blinded by your own left-wing partisan extremism to objectively look at what I've posted. Your blind faith in Socialistic, enormous government is equivalent to ebuddy's blind faith in trinitarian Christianity over in the other thread. You are probably just as dogmatic as he is. Sometimes you're more reasonable, but when I tell you the honest truth you fly off the handle, just like people became irate at me in the other thread for simply telling the unvarnished truth.

This is your idea of rational discourse?

do you have anything to back this up?

oh and how's iraq doing?

You closed the door on civil debate in this thread, besson, (at least between the two of us) because of your narrow-mindedness.

Cool...

So, can anybody else answer my question so that I can understand this argument?

If you want to have a debate, besson, please tell me the following: Why don't you want to follow the Constitution? Why do you mock me as being not of this decade because I want to restore it as the true highest law of the land by phasing out or abolishing outright if necessary the bankrupting Entitlements and federal bureaucracies that are killing the Constitution and the Republic it created? I also support massively cutting Defense spending to get us to that goal, which the Left supposedly supports. Why are you so dogmatic that you reject out of hand what I propose?

I mock because all of this is not actionable, it's pretty much the same sort of argument as saying "this is immoral because the Bible says so" - this only resonates with people that agree with your interpretation, or believe that we should be putting as much stock into the source as you.

The decision about the debt limit is looming, having some constitutional argument is best saved for another time. What I want to know is how the Bush tax cuts have helped the middle class and whether or not they have created jobs. If you don't want to answer this question and would rather have some sort of constitutional debate, why don't you post stuff to the other thread? I did not ask whether the Bush tax cuts are constitutional or not.

Focus.

So living by the standard of the highest law of the land isn't actionable. I beg differ, especially when not living by the Constitution is precisely what has put us in this mess.

If you massively cut or abolish the Entitlements, what will happen? Let's think about it. The vast majority of them are targeted at seniors who, while they do have a lot of lobbying power, aren't going to riot in the streets. The thug unionists and anarchist scum may pull out all the stops and set the country ablaze in many different areas, but that's what we have police and military power (as necessary) for to quell. Perhaps a president obeying the Constitution and not the dictates of a citizenry corrupted by government handouts would temporarily have to impose martial law before restoring the Constitution to a level of supreme authority it hasn't had for at least 80 years.

We're going to go the way of Greece and Italy and possibly Weimar on our current course. The country and then the world's financial systems will collapse if we don't get things in order. You say it's impossible to do anything like what I propose. I say we don't have any other choice. And even Obama has clearly opened the door to some notion of Entitlements reform, even if it's a crass partisan ploy. He has rightfully said the longer we wait the harder it will be to act. That's true.

Obama could be one of the greatest presidents in history if only he would reverse course and become loyal to the Constitution he swore to protect and defend. I would vote for him and become his biggest cheerleader if he were serious about reversing the fiscal doomsday we've been on, which he has gravely worsened with most of his policies up to this point. I can dare to dream the impossible dream. Why not you, besson?

So, the question?

Okay, what's your solution, besson? I assume it involves tax hikes. What economic argument do you have to support that policy?

reagan raised taxes before the boom of the 80s... as a matter of face he raised taxes 11 times

How about we start with answering the question first, if you wish to do so?

cut medicare because old people can't fight back

You would rather maintain the status quo in unconstitutional, bankrupting Entitlements and ruin the country financially than radically reform or abolish them to save the country and our liberties. Got it.

The question?

I gave you an answer to your question above. Under the Bush tax rates and even in an ailing economy, we take in substantially more federal revenue today than we did in 2000. Also, the Bush tax cuts were credited by one of the federal accounting agencies (can't tell you off hand with it was CBO or GAO) with getting us out of the short recession early in Bush's first term. In fact, we had robust growth for years after that until $140/barrel oil popped the sub-prime housing bubble.

Anyone else notice that Big Mac continues to declare Entitlement Programs to be "unconstitutional" even though I already rebutted that notion? :rolleyes:

OAW

I find the politics of this whole situation fascinating. The Tea Party Republicans are rejecting any tax hike or tax credit repeal out of hand, but the non-tea-party Republicans can't pass a budget on their own without their votes. It's a stalemate, entirely within the Republican party. (Can w even call them a party anymore, or are they a coalition government?)

Obama knows this, and is offering budgets with all sorts of cuts to entitlements -- but also tied to tax increases -- that he knows the Tea Party Republicans can't accept. Expect Obama to remind us of this repeatedly during the next election.

I think the Tea Party movement is doing more harm than good to Republicans: Boehner probably would prefer that he had the same Majority, but with congressmen who weren't so dogmatic.

source for your first point, Big Mac?