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> We need the Federal government to stimulate aggregate demand at the consumer level. How? Investing tax dollars in a smarter manner. How do you get 535 people

> We need the Federal government to stimulate aggregate demand at the consumer level. How? Investing tax dollars in a smarter manner. How do you get 535 people (congress) to spend $3 trillion smarter? It's an impossible task. A fools errand. Even if we elected the 500 smartest people to congress, the results wouldn't be much better. We need less of the economy flowing thru the federal government, not more.

Frondo 11y ago
Nah, it's actually pretty easy. The 535 people just need to assign general priorities, like spend a third our country's money on health care and education, a third of it on infrastructure, a little bit on funding pure research, and whatever's left over, the military can have. They're not in charge of deciding how each individual dollar is spent, and they shouldn't be.
- bpodgursky 11y ago
  This is super naive. For much of the past decade, congress could have removed the entire discretionary budget (yes, including the military) and still had a deficit. The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those.
  - dragonwriter 11y ago
    > For much of the past decade, congress could have removed the entire discretionary budget (yes, including the military) and still had a deficit. Two fiscal years in the past decade (2010 and 2011) had deficit exceeding discretionary spending. That's not "much of the past decade". (The highest deficit was in 2009, but discretionary spending was actually higher.) > The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those. The deficit is driven by a shortfall of revenue vs. spending. Even if your portrayal of the spending side was accurate, ignoring the revenue side is not. If you want to balance the budget [0], you probably shouldn't ignore one side of the balance. [0] The question of whether you should want to is one which is rarely addressed directly, merely assumed.
  - guelo 11y ago
    Social Security runs a surplus.
  - toomuchtodo 11y ago
    > The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those. Or increase taxes? Social security taxation is limited to the first ~$120K of someone's income. Why?
    - binarycrusader 11y ago
      Because taxing those people won't solve the real issue? I pay more in taxes every year on my income than many millionaires do because my income is primarily salary instead of stocks, etc. 120k may seem like a lot, but it isn't in several parts of the US now (e.g SF Bay Area, New York).
      - toomuchtodo 11y ago
        > 120k may seem like a lot, but it isn't in several parts of the US now (e.g SF Bay Area, New York). And national tax policy shouldn't be dictated by ~2 major urban metros. I agree that tax policy needs to encompass more than just the salary of the working class, but let's not joke ourselves. Medicare already taxes your entire wage base, there's no reason Social Security shouldn't. We keep kicking the can down the road, and its time to own up to the liabilities we've created.
        someguydave 11y ago
        >We keep kicking the can down the road, and its time to own up to the liabilities we've created. I'm afraid it's quite impossible to 'own up' to those liabilities. Look at the debt clock: http://www.usdebtclock.org/ http://www.usdebtclock.org/ The GAAP liabilities of USG amount to $100 trillion, yet the net assets of the entire US are only $116 trillion. Nearly all of the assets in the entire country would need to be sold to pay for the liability to be incurred. I'm afraid the only solution is to reduce benefits, primarily reducing social security payments (particularly when most of the boomers are drawing on them) and cutting medical spending - probably by instituting controls on what the government will pay for in terms of end-of-life care.
  - gohrt 11y ago
    Why bother? social security, medicare, and medicaid generate quality of life improvements. Money redistributed isn't hurting anything, and a future govt can inflate away that debt
    - lintiness 11y ago
      Increasing taxes and redistribution for "quality of life" necessarily decreases savings and investment. investment is where long term quality of life is determined.
deleted 11y ago
[deleted]
- maratd 11y ago
  > Billionaires? Individuals. Regular people. When billionaires spend money, who do you think earns it? And who taxes those earnings?
jdc 11y ago
The 500 smartest people? They simply delegate and entrust a small committee of the five most qualified people with the resources they need to get the job done.
- beambot 11y ago
  Five people controlling the collective spending of the world's 1st or 2nd largest economy... that sounds like a scary amount of power for any small number of individuals. No thanks.
  - undersuit 11y ago
    Put cameras on them 24/7, you get a 300 million person watchdog service and create quite a few jobs with CSPANs 4-8.
Shivetya 11y ago
The Federal Government's expenditures needs to be a lot lower than it is across the board. It needs a serious dose of efficiency. The borrowing alone impacts all business and individuals simply because it removes money from individuals directly and indirectly which slows the economy, puts pressure on future governments to raise taxes furthering the loss of spending by individuals, and lastly leads to uncertainty in the future. The truly sad part is they could balance the budget and operate with a surplus by doing two simple things, getting rid of baseline budgeting and keeping spending increases under inflation. Some projections put doing those two items as righting the budget in less than 10 years Look up the term dead weight losses to get an idea of how bad government spending is for the economy versus private spending.
- xxpor 11y ago
  >Look up the term dead weight losses to get an idea of how bad government spending is for the economy versus private spending. Look up the term Fiscal Multiplier to get an idea how good government spending is for the economy vs private spending.
  - adventured 11y ago
    We have indeed seen it in action since 2008, to horrific results. $9+ trillion in new public debt added in eight years, to go with ~$11 trillion in additional government spending, boosting federal spending by nearly 1/2, to achieve the slowest average growth in non-recessionary times in US history, and the slowest employment recovery in US history. More typically you get examples like the governments of Japan and China, which over-spent by the trillions of dollars and misallocated resources on purpose to fake economic prosperity that doesn't really exist so their citizens don't get upset. To say nothing of the favor and bribe based system large governments always operate by - so eloquently demonstrated by the entirely worthless American Recovery and Reinvest Act - in which they choose to allocate resources to their favorite causes (or to build things that aren't even needed) instead of to the most productive outcomes. China is providing an amazing example of how incompetent command spending always is in an economy. Inevitably when the tide goes out, the fraud begins to reek. In the case of China, they've been busy arresting people to make it look like they're doing something about the vast corruption they've caused through distorting the economy to a truly massive degree. They caused the problems, and then arrest people for their own incompetence. The big difference with the US, is the US doesn't arrest its executives based on the mistakes the Fed made in intentionally creating asset bubbles that inevitably collapsed.
jbooth 11y ago
Well, it starts with a fundamental belief that they can and should do a good job.

Frondo 11y ago

Nah, it's actually pretty easy. The 535 people just need to assign general priorities, like spend a third our country's money on health care and education, a third of it on infrastructure, a little bit on funding pure research, and whatever's left over, the military can have. They're not in charge of deciding how each individual dollar is spent, and they shouldn't be.

bpodgursky 11y ago
This is super naive. For much of the past decade, congress could have removed the entire discretionary budget (yes, including the military) and still had a deficit. The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those.
- dragonwriter 11y ago
  > For much of the past decade, congress could have removed the entire discretionary budget (yes, including the military) and still had a deficit. Two fiscal years in the past decade (2010 and 2011) had deficit exceeding discretionary spending. That's not "much of the past decade". (The highest deficit was in 2009, but discretionary spending was actually higher.) > The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those. The deficit is driven by a shortfall of revenue vs. spending. Even if your portrayal of the spending side was accurate, ignoring the revenue side is not. If you want to balance the budget [0], you probably shouldn't ignore one side of the balance. [0] The question of whether you should want to is one which is rarely addressed directly, merely assumed.
- guelo 11y ago
  Social Security runs a surplus.
- toomuchtodo 11y ago
  > The deficit is driven by social security, medicare, and medicaid. If you want to balance the budget, you have to reform those. Or increase taxes? Social security taxation is limited to the first ~$120K of someone's income. Why?
  - binarycrusader 11y ago
    Because taxing those people won't solve the real issue? I pay more in taxes every year on my income than many millionaires do because my income is primarily salary instead of stocks, etc. 120k may seem like a lot, but it isn't in several parts of the US now (e.g SF Bay Area, New York).
    - toomuchtodo 11y ago
      > 120k may seem like a lot, but it isn't in several parts of the US now (e.g SF Bay Area, New York). And national tax policy shouldn't be dictated by ~2 major urban metros. I agree that tax policy needs to encompass more than just the salary of the working class, but let's not joke ourselves. Medicare already taxes your entire wage base, there's no reason Social Security shouldn't. We keep kicking the can down the road, and its time to own up to the liabilities we've created.
      - someguydave 11y ago
        >We keep kicking the can down the road, and its time to own up to the liabilities we've created. I'm afraid it's quite impossible to 'own up' to those liabilities. Look at the debt clock: http://www.usdebtclock.org/ http://www.usdebtclock.org/ The GAAP liabilities of USG amount to $100 trillion, yet the net assets of the entire US are only $116 trillion. Nearly all of the assets in the entire country would need to be sold to pay for the liability to be incurred. I'm afraid the only solution is to reduce benefits, primarily reducing social security payments (particularly when most of the boomers are drawing on them) and cutting medical spending - probably by instituting controls on what the government will pay for in terms of end-of-life care.
- gohrt 11y ago
  Why bother? social security, medicare, and medicaid generate quality of life improvements. Money redistributed isn't hurting anything, and a future govt can inflate away that debt
  - lintiness 11y ago
    Increasing taxes and redistribution for "quality of life" necessarily decreases savings and investment. investment is where long term quality of life is determined.

deleted 11y ago

[deleted]

maratd 11y ago
> Billionaires? Individuals. Regular people. When billionaires spend money, who do you think earns it? And who taxes those earnings?

jdc 11y ago

The 500 smartest people? They simply delegate and entrust a small committee of the five most qualified people with the resources they need to get the job done.

beambot 11y ago
Five people controlling the collective spending of the world's 1st or 2nd largest economy... that sounds like a scary amount of power for any small number of individuals. No thanks.
- undersuit 11y ago
  Put cameras on them 24/7, you get a 300 million person watchdog service and create quite a few jobs with CSPANs 4-8.

Shivetya 11y ago

The Federal Government's expenditures needs to be a lot lower than it is across the board. It needs a serious dose of efficiency. The borrowing alone impacts all business and individuals simply because it removes money from individuals directly and indirectly which slows the economy, puts pressure on future governments to raise taxes furthering the loss of spending by individuals, and lastly leads to uncertainty in the future. The truly sad part is they could balance the budget and operate with a surplus by doing two simple things, getting rid of baseline budgeting and keeping spending increases under inflation. Some projections put doing those two items as righting the budget in less than 10 years Look up the term dead weight losses to get an idea of how bad government spending is for the economy versus private spending.

xxpor 11y ago
>Look up the term dead weight losses to get an idea of how bad government spending is for the economy versus private spending. Look up the term Fiscal Multiplier to get an idea how good government spending is for the economy vs private spending.
- adventured 11y ago
  We have indeed seen it in action since 2008, to horrific results. $9+ trillion in new public debt added in eight years, to go with ~$11 trillion in additional government spending, boosting federal spending by nearly 1/2, to achieve the slowest average growth in non-recessionary times in US history, and the slowest employment recovery in US history. More typically you get examples like the governments of Japan and China, which over-spent by the trillions of dollars and misallocated resources on purpose to fake economic prosperity that doesn't really exist so their citizens don't get upset. To say nothing of the favor and bribe based system large governments always operate by - so eloquently demonstrated by the entirely worthless American Recovery and Reinvest Act - in which they choose to allocate resources to their favorite causes (or to build things that aren't even needed) instead of to the most productive outcomes. China is providing an amazing example of how incompetent command spending always is in an economy. Inevitably when the tide goes out, the fraud begins to reek. In the case of China, they've been busy arresting people to make it look like they're doing something about the vast corruption they've caused through distorting the economy to a truly massive degree. They caused the problems, and then arrest people for their own incompetence. The big difference with the US, is the US doesn't arrest its executives based on the mistakes the Fed made in intentionally creating asset bubbles that inevitably collapsed.

jbooth 11y ago

Well, it starts with a fundamental belief that they can and should do a good job.