7 ms·

Washington will spend $31,406 per household this year vs. $18,276 in taxes

19 points by robg 17y ago

deleted 17y ago
[deleted]
GFischer 17y ago
Maybe they will just print the deficit and devalue your currency, effectively taxing you anyway (you WISH your children would end up paying this - though they will, in part) They love doing that in my third world country (they recently introduced the $ 2000 bill, when the old $ 1000 bill was the highest denomination previously, and the $ 5000 bill has already been printed and awaiting introduction), and the US has rediscovered it as well.
- cynicalkane 17y ago
  Except that Congress lacks the power to do such a thing. The Fed has that power, but no incentive. In fact, the amount of printed currency in circulation has been holding steady for the last year, so money is not being "printed". I wish the printing money conspiracy theory would go away. Edit: Changed 'money in circulation' to 'printed currency in circulation'. I think it should be obvious from the rest of the post as well as the context that I'm talking about printing money, but apparently my use of the word "printed" wasn't enough to convince people, so I added another use of the word.
  - jswinghammer 17y ago
    In a fractional reserve banking system money is created when a loan is made. Thus when Congress takes out a loan for a trillion dollars that money is injected into the economy and as it passes through banks who also make loans there is even more money created. This is considered a feature of fractional reserve lending by the mainstream. Austrian economists consider it a bug.
  - dfranke 17y ago
    The amount of money that is in circulation has been holding steady for the last year This has never been true at any point in recent history: http://research.stlouisfed.org/fred2/series/M2?cid=29 http://research.stlouisfed.org/fred2/series/M2?cid=29 Granted, the uptrend is a lot shallower than it was a year ago. Except that Congress lacks the power to do such a thing. The Fed has that power[...] Also untrue. Congress created the federal reserve through an act of legislation, and congress can just as readily destroy it.
  - watchandwait 17y ago
    The Fed "prints" because it is buying mortgage and Treasury assets with magic new currency. Yes, the new cash is being hoarded as bank reserves and it is not in circulation (yet), but you can be sure it is newly printed money.
    - cynicalkane 17y ago
      I'm aware of the expansion of reserves. My objection is twofold: 1) Don't say "printing money". It's not printing money. The Fed does something called printing money, and this ain't it. Don't even say "printing money" in an obtuse metaphorical fashion, since everyone who isn't aware of the current state of the Fed's balance sheet, including many people on HN, will misunderstand. 2) I doubt most of the newly created Federal reserve liabilities will ever see circulation. Remember, the Fed is controlled by people who do not want inflation to happen. Many top economists--notably Volcker, chairman of the Economic Recovery Advisory Board--would rather see a prolonged recession than inflation (cf. http://en.wikipedia.org/wiki/Paul_Volcker#Chairman_of_the_Federal_Reserve http://en.wikipedia.org/wiki/Paul_Volcker#Chairman_of_the_Fe...). Printing money to erase debts would inspire an economic revolt by just about everyone that isn't Congress.
gjm11 17y ago
Some interesting information, but I could have done without all the spin. (Oh look, surprise surprise, the author works for a conservative think tank.)
- billybob 17y ago
  Where is the spin? I didn't see it. Did he mis-state any facts, or leave out something important? The author clearly has an agenda, but his opinionated-sounding statements (for instance, that this debt will be 'dumped in the laps of our children') are factual: these bills will come due. The statement that taxpayers have to decide if they're getting their money's worth is nearly axiomatic. Really, just the bare statement in the title, "Washington will spend $31,406 per household this year," is staggering. Call it spin if you will, but holy crap - that's about 80 percent of the average person's total earnings. How many people would really say "I'm willing to give 80 percent of my income to the federal government, and some more to the state government?"
  - maukdaddy 17y ago
    It is an opinion article, written by the Heritage Foundation. http://en.wikipedia.org/wiki/The_Heritage_Foundation http://en.wikipedia.org/wiki/The_Heritage_Foundation
    - gaius 17y ago
      Again, which of the facts in it are incorrect?
    - billybob 17y ago
      Ad hominem. Do you have any valid arguments?
      - dgabriel 17y ago
        I don't think identifying the source is exactly an ad hominem. I'm pretty sure you have to attack the source as unreliable or somehow bad. Understanding that the source is conservative can be helpful in understanding biases within the article itself. Note that it contains no sources or methods for evaluating the true or falseness of its claims, nor can we be sure about the broad categories the author presents. Without that information, taking such a list at face value seems like a bad idea.
jcnnghm 17y ago
It's a shame that government spending is decoupled from tax collection. By requiring employers to withhold and make estimated tax payments for employees, employees are unable to quantify the magnitude of taxes. If the average family in the country had to write a check for $18,276 to the federal government each year, people would start demanding a reduction in spending.
- rbranson 17y ago
  This is the way most businesses operate. In reality, businesses often have to spend their way out of losses with innovative R&D and marketing. The fact that credit exists smooths out the ups and downs in revenues is a good thing. Imagine the long-term cost of winding down government services, just to have to wind them up again? There are huge ramping costs to take into consideration, not to mention the impact on the economy. While I agree that government spending is a little ridiculous at times, breaking it down into simplistic terms ignores the vast tasks that even a stripped down federal government must undertake. Also, because of the way most people spend money in reality, the government would go broke if they tried to collect taxes without witholding. Sad but true.
  - jcnnghm 17y ago
    This is the way most businesses operate. In reality, businesses often have to spend their way out of losses with innovative R&D and marketing. The fact that credit exists smooths out the ups and downs in revenues is a good thing. My comment wasn't related to this, but you're missing a big difference. If a business doesn't get there finances straightened out, they go under. If a business is wasting their money on stupid consulting projects causing their prices to rise, you can stop buying their products. You can't do that with the government. Imagine the long-term cost of winding down government services, just to have to wind them up again? There are huge ramping costs to take into consideration, not to mention the impact on the economy. While I agree that government spending is a little ridiculous at times, breaking it down into simplistic terms ignores the vast tasks that even a stripped down federal government must undertake. You're assuming that it's desirable to ramp them back up. I am totally comfortable doing away with Social Security and Medicare, lowering defense spending back to $3599 from $6071, drastically cutting anti-poverty programs so that everyone has to work to survive, and using the surpluses created by those reductions to pay down the federal debt to eliminate the interest expense. I'd also be for moving the Education and Mass Transit taxes back to the states so a bunch of stupid restrictions don't have to be met, like the 65mph speed limit and No Child Left Behind. While at it, we should drastically reduce our health research funding since the US represents 81% of global health R&D spending, and eliminate future federal employee retirement benefits. The mortgage credits can take a hike as well. Also, because of the way most people spend money in reality, the government would go broke if they tried to collect taxes without witholding. Sad but true. That's a feature, not a bug. If the average family had to write a check for $1,523 every month, it wouldn't be long before everyone was demanding accountability and cost reductions, instead of more services.
deleted 17y ago
[deleted]
applicative 17y ago
"The remaining $13,130 represents this year's staggering budget deficit per household, which, along with all prior government debt, will be dumped in the laps of our children" It's strange these wind-bag budget pseudo-hawks suddenly emerge with Democratic presidents. How much of these -- the figures are from the palpably dishonest writer -- are not due to Bush's wars and recession? Antipoverty programs: $5,466 Interest on the federal debt: $1,585 Unemployment benefits: $1,640 Defense: $6,071. ----- Total: $14,802 People who supported the Bush madness should just be precluded from commenting on these matters.
- gaius 17y ago
  OK, but if your government is going to spend money at all, defence isn't a bad way to do it. You get lots of jobs directly and indirectly, you pay for the development of lots of interesting tech that has civilian/commercial applications (i.e. you are creating wealth), and you get the defence of the realm "for free" on top of all that! (Esp. if you have no wars on, admittedly). Whereas those other programmes you mention, regardless of any other merits they may have, constitute paying people to not create any value. Which seems a bit of a weird way to spend the taxpayer's money.
  - msg 17y ago
    The safety net encourages people to create value by taking on more risk, e.g. starting a business. If you are going to talk about all the economic side effects of creating bombs and surveillance systems, you need to talk about the side effects of entitlements and social programs too.
    - gaius 17y ago
      OK, but there's little or no evidence that that is what welfare recipients are doing. Whereas you and I are having this conversation using a spin-off of defence spending.
      - applicative 17y ago
maukdaddy 17y ago
oh come on! This is an OPINION PIECE, written by the Heritage Foundation, which is a CONSERVATIVE THINK TANK. How about some disclosure on HN?
- rbranson 17y ago
  Yeah, as soon as it started with the "dumped into the laps of our children" hyperbole I checked the source. No bueno.
  - wmeredith 17y ago
    Is there another way you would describe this sort of government spending?
    - alecco 17y ago
      Without rhetoric and hyperbole.
      - SamAtt 17y ago
        How is that statement rhetoric or hyperbole (which are both defined by their use of exaggeration)? Is there anyone (Republican or Democrat) who believes we'll be able to pay off the nation's debt in this generation?
        0x44 17y ago
        Of what generation are you speaking? There are large populations of at least five generations still living: the "Greatest", the "Boomers", "Gen X", the "Millennials", and then whatever they decide to call the kids born after 2003.
        alecco 17y ago
        Appeal to emotion fallacy.
- billybob 17y ago
ojbyrne 17y ago
If you believe in Keynesian economics (many people still do), that's exactly what they should be doing. To quote wikipedia: "Keynes′ theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is policies which acted against the tide of the business cycle: deficit spending when a nation's economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays." You can make an argument about whether that's a valid theory or not, but saying spending more than you're taking is just plain bad, isn't really much of an argument. http://en.wikipedia.org/wiki/Keynesian_economics#Active_fiscal_policy http://en.wikipedia.org/wiki/Keynesian_economics#Active_fisc...
- SamAtt 17y ago
  Yes and No. I don't disagree with the definition but inherent in Keynesian economics is the idea that you shouldn't spend dramatically more than you can compensate for through taxation once the economy recovers. So while Keynesian theories might justify spending the question here is whether too much is being spent and that's not one that is really addressed in the theories themselves
mark_l_watson 17y ago
I think that the article was largely factual except the amount of defense spending quoted in the article seems really low. Some (or a lot) of defense spending is non-essential (depending on your view of which is the greater threat: war/terrorism or a collapsing economy with an ensuing "Road Warrior" life style). I think that it would be more honest to add interest costs to all spending that is not absolutely required to "keep the lights on."

19 points by robg 17y ago

deleted 17y ago

[deleted]

Maybe they will just print the deficit and devalue your currency, effectively taxing you anyway (you WISH your children would end up paying this - though they will, in part) They love doing that in my third world country (they recently introduced the $ 2000 bill, when the old $ 1000 bill was the highest denomination previously, and the $ 5000 bill has already been printed and awaiting introduction), and the US has rediscovered it as well.

cynicalkane 17y ago
Except that Congress lacks the power to do such a thing. The Fed has that power, but no incentive. In fact, the amount of printed currency in circulation has been holding steady for the last year, so money is not being "printed". I wish the printing money conspiracy theory would go away. Edit: Changed 'money in circulation' to 'printed currency in circulation'. I think it should be obvious from the rest of the post as well as the context that I'm talking about printing money, but apparently my use of the word "printed" wasn't enough to convince people, so I added another use of the word.
- jswinghammer 17y ago
  In a fractional reserve banking system money is created when a loan is made. Thus when Congress takes out a loan for a trillion dollars that money is injected into the economy and as it passes through banks who also make loans there is even more money created. This is considered a feature of fractional reserve lending by the mainstream. Austrian economists consider it a bug.
- dfranke 17y ago
  The amount of money that is in circulation has been holding steady for the last year This has never been true at any point in recent history: http://research.stlouisfed.org/fred2/series/M2?cid=29 http://research.stlouisfed.org/fred2/series/M2?cid=29 Granted, the uptrend is a lot shallower than it was a year ago. Except that Congress lacks the power to do such a thing. The Fed has that power[...] Also untrue. Congress created the federal reserve through an act of legislation, and congress can just as readily destroy it.
- watchandwait 17y ago
  The Fed "prints" because it is buying mortgage and Treasury assets with magic new currency. Yes, the new cash is being hoarded as bank reserves and it is not in circulation (yet), but you can be sure it is newly printed money.
  - cynicalkane 17y ago
    I'm aware of the expansion of reserves. My objection is twofold: 1) Don't say "printing money". It's not printing money. The Fed does something called printing money, and this ain't it. Don't even say "printing money" in an obtuse metaphorical fashion, since everyone who isn't aware of the current state of the Fed's balance sheet, including many people on HN, will misunderstand. 2) I doubt most of the newly created Federal reserve liabilities will ever see circulation. Remember, the Fed is controlled by people who do not want inflation to happen. Many top economists--notably Volcker, chairman of the Economic Recovery Advisory Board--would rather see a prolonged recession than inflation (cf. http://en.wikipedia.org/wiki/Paul_Volcker#Chairman_of_the_Federal_Reserve http://en.wikipedia.org/wiki/Paul_Volcker#Chairman_of_the_Fe...). Printing money to erase debts would inspire an economic revolt by just about everyone that isn't Congress.

gjm11 17y ago

Some interesting information, but I could have done without all the spin. (Oh look, surprise surprise, the author works for a conservative think tank.)

billybob 17y ago
Where is the spin? I didn't see it. Did he mis-state any facts, or leave out something important? The author clearly has an agenda, but his opinionated-sounding statements (for instance, that this debt will be 'dumped in the laps of our children') are factual: these bills will come due. The statement that taxpayers have to decide if they're getting their money's worth is nearly axiomatic. Really, just the bare statement in the title, "Washington will spend $31,406 per household this year," is staggering. Call it spin if you will, but holy crap - that's about 80 percent of the average person's total earnings. How many people would really say "I'm willing to give 80 percent of my income to the federal government, and some more to the state government?"
- maukdaddy 17y ago
  It is an opinion article, written by the Heritage Foundation. http://en.wikipedia.org/wiki/The_Heritage_Foundation http://en.wikipedia.org/wiki/The_Heritage_Foundation
  - gaius 17y ago
    Again, which of the facts in it are incorrect?
  - billybob 17y ago
    Ad hominem. Do you have any valid arguments?
    - dgabriel 17y ago
      I don't think identifying the source is exactly an ad hominem. I'm pretty sure you have to attack the source as unreliable or somehow bad. Understanding that the source is conservative can be helpful in understanding biases within the article itself. Note that it contains no sources or methods for evaluating the true or falseness of its claims, nor can we be sure about the broad categories the author presents. Without that information, taking such a list at face value seems like a bad idea.

jcnnghm 17y ago

It's a shame that government spending is decoupled from tax collection. By requiring employers to withhold and make estimated tax payments for employees, employees are unable to quantify the magnitude of taxes. If the average family in the country had to write a check for $18,276 to the federal government each year, people would start demanding a reduction in spending.

rbranson 17y ago
This is the way most businesses operate. In reality, businesses often have to spend their way out of losses with innovative R&D and marketing. The fact that credit exists smooths out the ups and downs in revenues is a good thing. Imagine the long-term cost of winding down government services, just to have to wind them up again? There are huge ramping costs to take into consideration, not to mention the impact on the economy. While I agree that government spending is a little ridiculous at times, breaking it down into simplistic terms ignores the vast tasks that even a stripped down federal government must undertake. Also, because of the way most people spend money in reality, the government would go broke if they tried to collect taxes without witholding. Sad but true.
- jcnnghm 17y ago
  This is the way most businesses operate. In reality, businesses often have to spend their way out of losses with innovative R&D and marketing. The fact that credit exists smooths out the ups and downs in revenues is a good thing. My comment wasn't related to this, but you're missing a big difference. If a business doesn't get there finances straightened out, they go under. If a business is wasting their money on stupid consulting projects causing their prices to rise, you can stop buying their products. You can't do that with the government. Imagine the long-term cost of winding down government services, just to have to wind them up again? There are huge ramping costs to take into consideration, not to mention the impact on the economy. While I agree that government spending is a little ridiculous at times, breaking it down into simplistic terms ignores the vast tasks that even a stripped down federal government must undertake. You're assuming that it's desirable to ramp them back up. I am totally comfortable doing away with Social Security and Medicare, lowering defense spending back to $3599 from $6071, drastically cutting anti-poverty programs so that everyone has to work to survive, and using the surpluses created by those reductions to pay down the federal debt to eliminate the interest expense. I'd also be for moving the Education and Mass Transit taxes back to the states so a bunch of stupid restrictions don't have to be met, like the 65mph speed limit and No Child Left Behind. While at it, we should drastically reduce our health research funding since the US represents 81% of global health R&D spending, and eliminate future federal employee retirement benefits. The mortgage credits can take a hike as well. Also, because of the way most people spend money in reality, the government would go broke if they tried to collect taxes without witholding. Sad but true. That's a feature, not a bug. If the average family had to write a check for $1,523 every month, it wouldn't be long before everyone was demanding accountability and cost reductions, instead of more services.

deleted 17y ago

[deleted]

applicative 17y ago

"The remaining $13,130 represents this year's staggering budget deficit per household, which, along with all prior government debt, will be dumped in the laps of our children" It's strange these wind-bag budget pseudo-hawks suddenly emerge with Democratic presidents. How much of these -- the figures are from the palpably dishonest writer -- are not due to Bush's wars and recession? Antipoverty programs: $5,466 Interest on the federal debt: $1,585 Unemployment benefits: $1,640 Defense: $6,071. ----- Total: $14,802 People who supported the Bush madness should just be precluded from commenting on these matters.

gaius 17y ago
OK, but if your government is going to spend money at all, defence isn't a bad way to do it. You get lots of jobs directly and indirectly, you pay for the development of lots of interesting tech that has civilian/commercial applications (i.e. you are creating wealth), and you get the defence of the realm "for free" on top of all that! (Esp. if you have no wars on, admittedly). Whereas those other programmes you mention, regardless of any other merits they may have, constitute paying people to not create any value. Which seems a bit of a weird way to spend the taxpayer's money.
- msg 17y ago
  The safety net encourages people to create value by taking on more risk, e.g. starting a business. If you are going to talk about all the economic side effects of creating bombs and surveillance systems, you need to talk about the side effects of entitlements and social programs too.
  - gaius 17y ago
    OK, but there's little or no evidence that that is what welfare recipients are doing. Whereas you and I are having this conversation using a spin-off of defence spending.
    - applicative 17y ago

maukdaddy 17y ago

oh come on! This is an OPINION PIECE, written by the Heritage Foundation, which is a CONSERVATIVE THINK TANK. How about some disclosure on HN?

rbranson 17y ago
Yeah, as soon as it started with the "dumped into the laps of our children" hyperbole I checked the source. No bueno.
- wmeredith 17y ago
  Is there another way you would describe this sort of government spending?
  - alecco 17y ago
    Without rhetoric and hyperbole.
    - SamAtt 17y ago
      How is that statement rhetoric or hyperbole (which are both defined by their use of exaggeration)? Is there anyone (Republican or Democrat) who believes we'll be able to pay off the nation's debt in this generation?
      - 0x44 17y ago
        Of what generation are you speaking? There are large populations of at least five generations still living: the "Greatest", the "Boomers", "Gen X", the "Millennials", and then whatever they decide to call the kids born after 2003.
      - alecco 17y ago
        Appeal to emotion fallacy.
billybob 17y ago

ojbyrne 17y ago

If you believe in Keynesian economics (many people still do), that's exactly what they should be doing. To quote wikipedia: "Keynes′ theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is policies which acted against the tide of the business cycle: deficit spending when a nation's economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays." You can make an argument about whether that's a valid theory or not, but saying spending more than you're taking is just plain bad, isn't really much of an argument. http://en.wikipedia.org/wiki/Keynesian_economics#Active_fiscal_policy http://en.wikipedia.org/wiki/Keynesian_economics#Active_fisc...

SamAtt 17y ago
Yes and No. I don't disagree with the definition but inherent in Keynesian economics is the idea that you shouldn't spend dramatically more than you can compensate for through taxation once the economy recovers. So while Keynesian theories might justify spending the question here is whether too much is being spent and that's not one that is really addressed in the theories themselves

mark_l_watson 17y ago

I think that the article was largely factual except the amount of defense spending quoted in the article seems really low. Some (or a lot) of defense spending is non-essential (depending on your view of which is the greater threat: war/terrorism or a collapsing economy with an ensuing "Road Warrior" life style). I think that it would be more honest to add interest costs to all spending that is not absolutely required to "keep the lights on."