6 ms·

You mention tax cuts and deficits — isn’t spending equally to blame? Why is cutting government spending viewed by some as not an option? Those who oppose the ta

You mention tax cuts and deficits — isn’t spending equally to blame? Why is cutting government spending viewed by some as not an option? Those who oppose the tax cuts almost never suggest cutting entitlement spending which is the largest percentage of the federal budget — 56% of all federal outlays are from mandatory entitlements. That’s far more significant than any tax cut effects. Besides, even after the tax cuts, the government has collected record revenues this year. We are collecting plenty in taxes — but we are spending it wrong. Here is a list of some of the more ridiculous expenditures: https://www.dailywire.com/news/12309/9-ridiculous-things-government-wasted-money-year-aaron-bandler https://www.dailywire.com/news/12309/9-ridiculous-things-gov...

selectodude 8y ago
Because a huge number of the voters that demand lower taxes are on the dole.
Naga 8y ago
Deficits implies spending, as a deficit occurs when spending is greater than receipts.
gizmo686 8y ago
The general economic principle in play is that the government should act counter-cyclically. That is, it should tax high and spend low during good years, then tax low and spend high during bad years. What the government spends the money on is not particuarly relevent [0]. Hiring an army to fill in ditches that your other army digs would serve this purpose just fine. If you are able to spend this money doing productive work, that is a plus; but not particularly relevant to the core economics. Of course, the problem with this economic philosophy is that it can be difficult to implement given political constraints. During bad years, there is a sense that the government needs to tighten its bootstraps, and during good years there is a sense that the government has the money to invest. While this is a good philosophy for household budgeting, it just turns the government into a pro-cyclic actor, which is the opposite of what we want. [0] As long as the money makes it throughout the economy that is.
adventured 8y ago
Because the majority of American adults pay either no income taxes or very close to that. Which is another way of saying, it's unpalatable to politicians to focus on spending side cuts, in pretty much every regard. Even Republicans have become a party of no spending cuts, they've entirely abandoned the premise (which was a core party pitch for decades). More realistically, problematically, there's very little spending to cut except for military (which neither party will argue for, save for a few outlier politicians). Nearly all of the above-inflation spending growth is in entitlements, debt interest and military. The budget deficit and debt interest are high enough now, that they nearly equal (or do equal) the cost of all military spending. So if you want to balance the budget, you'd have to wipe out the US military; or cut military spending in half (shave $300b-$350b), and very considerably raise taxes on the top 1/3. There's nobody interested in touching the third rail of entitlement cuts. Few are interested in arguing for military spending cuts. There isn't much that can be done about debt interest expenses, US debt per dollar is already historically very cheap (they'll have to go the way of Japan sooner than later, slashing that cost as low as possible with perma low rates, that creep lower with every cycle, reducing economic dynamism and growth along with it, culminating in Japanese style economic stagnation). So in short, all that is left to cut - things that enough people will agree on cutting - is relatively little edge expenses. That's the reality of why spending isn't looked at more often for cutting. It's actually still possible to fix this fiscal mess, there's no will for it however, few are willing to eat the shit necessary to do it. Here's the sane, Save America From Financial Ruin, plan: 1) Slash military spending by $350 billion. Pull back from global policing. Cut almost everywhere as it pertains to the military. This will leave a vacuum for Russia and China, which they will expand into, that has to be accepted. Regional militaries will have to step up to counter that, such as Japan, South Korea, Germany, France, UK, etc. The military is primarily a human employment cost, slashing the military in half would result in two million unemploymend persons, that would have a serious cost initially to it. Over time those persons would become net tax contributors, instead of primarily a net spending cost (soldiers sitting in buildings are epic net cost centers and very poor producers of economic activity and tax contribution). 2) Raise several hundred billion dollars per year by increasing taxes on the top 1/3. Needs to be at least $300 billion, ideally more. 3) Abuse the USD global reserve standard while we have it, and while the dollar is relatively high. Use it to cheaply refinance our debt to as low of an interest cost as we reasonably can. Every $100 billion per year we can shave off of the annual debt interest cost, is a big plus. 4) Freeze entitlement spending increases for ten years. This will involve pain, nobody will be happy about it. It's better than cuts, which is even more ideal. Slightly increase worker contributions to these programs to shore them up further. 5) Freeze nearly all other government spending for ten years, no matter what. It will be painful, that's part of the process. Raise the gasoline taxes by quite a bit, that all goes into infrastructure to offset that that segment isn't going to get any inflation adjustment for ten years. 6) Hammer down costs in education and healthcare, which will free up capital for economic investment and wages. The top 1/4 income bracket receives an income / wealth transfer in the form of the outsized US spending on healthcare. Redistribute that back to the bottom 3/4, by slashing healthcare costs by a lot. This will push up wages for the bottom 3/4, and reduce wages for the top 1/4 (who are the overwhelming beneficiaries of healthcare spending). Doing this right, can both broaden healthcare access/coverage, and offset the hit the bottom 3/4 will take from various freezes on spending increases. The first five items will get you to a balanced budget, plausibly a modest surplus. After a decade of freeze, relax spending increases to something modest, 2% max, for another decade. You'll be at a budget surplus, the economy will hopefully be larger in real terms, and your ratio of debt to GDP will rapidly begin to decline, as you both outgrow it and modestly pay down some of it. You can also continue to somewhat abuse the USD reserve to have the Fed buy and cancel out the most expensive US debt (effectively debasing some of the wealth held in USD, by slightly debasing the currency, but that wealth is overwhelmingly held by the top 1/3, so it's really a stealth tax on the wealthier block of the population).
cthor 8y ago
The list of "maddening" items in this article are so comically low-budget it's hard to take this complaint seriously. None of the 9 listed in the article sound particularly egregious. Almost all are grants to research institutions, which as a process has a lot of flaws, sure, but unilaterally cutting all grant funding is definitely not the solution. The report totals at $5 billion, but the supposedly most egregious are not even in an order of magnitude near that cost. Meanwhile, federal income is measured in trillions. If you want to actually cut federal spending, you have to cut pensions or military spending—political suicide.
- ngngngng 8y ago
  A few thousand facebook, twitter and reddit bots and we could get trump fans to start asking for this.
1stranger 8y ago
Because nobody agrees what to cut. Democrats don't want to cut social programs like Medicaid and Medicare. I mean, everybody needs health care so those costs are not avoidable. Unfortunately, health care costs too much because the industry overcharges. So what does that leave us with? Well mostly military, and the Republicans (and probably many Democrats) only want to increase it. It's over $700B a year now. If I could wave a magic wand I would: 1) Tweak social security witholding rates to ensure continued solvency. Probably the easiest thing to do. 2) Bring health care costs (ie what providers charge) down to developed world standards. 3) Either raise taxes enough and/or lower defense spending enough to balance the deficit. It seems simple to me. But it means some people in healthcare and the defense contractors will make less. They would fight it so that's why everything stays the same.
- taysic 8y ago
  I think doctors / nurses / etc would be very resistant to making less. Not sure if it can be avoided but I think we're not in a good situation where someone could make it big being a video game developer but not being a doctor.

selectodude 8y ago

Because a huge number of the voters that demand lower taxes are on the dole.

Naga 8y ago

Deficits implies spending, as a deficit occurs when spending is greater than receipts.

gizmo686 8y ago

The general economic principle in play is that the government should act counter-cyclically. That is, it should tax high and spend low during good years, then tax low and spend high during bad years. What the government spends the money on is not particuarly relevent [0]. Hiring an army to fill in ditches that your other army digs would serve this purpose just fine. If you are able to spend this money doing productive work, that is a plus; but not particularly relevant to the core economics. Of course, the problem with this economic philosophy is that it can be difficult to implement given political constraints. During bad years, there is a sense that the government needs to tighten its bootstraps, and during good years there is a sense that the government has the money to invest. While this is a good philosophy for household budgeting, it just turns the government into a pro-cyclic actor, which is the opposite of what we want. [0] As long as the money makes it throughout the economy that is.

adventured 8y ago

Because the majority of American adults pay either no income taxes or very close to that. Which is another way of saying, it's unpalatable to politicians to focus on spending side cuts, in pretty much every regard. Even Republicans have become a party of no spending cuts, they've entirely abandoned the premise (which was a core party pitch for decades). More realistically, problematically, there's very little spending to cut except for military (which neither party will argue for, save for a few outlier politicians). Nearly all of the above-inflation spending growth is in entitlements, debt interest and military. The budget deficit and debt interest are high enough now, that they nearly equal (or do equal) the cost of all military spending. So if you want to balance the budget, you'd have to wipe out the US military; or cut military spending in half (shave $300b-$350b), and very considerably raise taxes on the top 1/3. There's nobody interested in touching the third rail of entitlement cuts. Few are interested in arguing for military spending cuts. There isn't much that can be done about debt interest expenses, US debt per dollar is already historically very cheap (they'll have to go the way of Japan sooner than later, slashing that cost as low as possible with perma low rates, that creep lower with every cycle, reducing economic dynamism and growth along with it, culminating in Japanese style economic stagnation). So in short, all that is left to cut - things that enough people will agree on cutting - is relatively little edge expenses. That's the reality of why spending isn't looked at more often for cutting. It's actually still possible to fix this fiscal mess, there's no will for it however, few are willing to eat the shit necessary to do it. Here's the sane, Save America From Financial Ruin, plan: 1) Slash military spending by $350 billion. Pull back from global policing. Cut almost everywhere as it pertains to the military. This will leave a vacuum for Russia and China, which they will expand into, that has to be accepted. Regional militaries will have to step up to counter that, such as Japan, South Korea, Germany, France, UK, etc. The military is primarily a human employment cost, slashing the military in half would result in two million unemploymend persons, that would have a serious cost initially to it. Over time those persons would become net tax contributors, instead of primarily a net spending cost (soldiers sitting in buildings are epic net cost centers and very poor producers of economic activity and tax contribution). 2) Raise several hundred billion dollars per year by increasing taxes on the top 1/3. Needs to be at least $300 billion, ideally more. 3) Abuse the USD global reserve standard while we have it, and while the dollar is relatively high. Use it to cheaply refinance our debt to as low of an interest cost as we reasonably can. Every $100 billion per year we can shave off of the annual debt interest cost, is a big plus. 4) Freeze entitlement spending increases for ten years. This will involve pain, nobody will be happy about it. It's better than cuts, which is even more ideal. Slightly increase worker contributions to these programs to shore them up further. 5) Freeze nearly all other government spending for ten years, no matter what. It will be painful, that's part of the process. Raise the gasoline taxes by quite a bit, that all goes into infrastructure to offset that that segment isn't going to get any inflation adjustment for ten years. 6) Hammer down costs in education and healthcare, which will free up capital for economic investment and wages. The top 1/4 income bracket receives an income / wealth transfer in the form of the outsized US spending on healthcare. Redistribute that back to the bottom 3/4, by slashing healthcare costs by a lot. This will push up wages for the bottom 3/4, and reduce wages for the top 1/4 (who are the overwhelming beneficiaries of healthcare spending). Doing this right, can both broaden healthcare access/coverage, and offset the hit the bottom 3/4 will take from various freezes on spending increases. The first five items will get you to a balanced budget, plausibly a modest surplus. After a decade of freeze, relax spending increases to something modest, 2% max, for another decade. You'll be at a budget surplus, the economy will hopefully be larger in real terms, and your ratio of debt to GDP will rapidly begin to decline, as you both outgrow it and modestly pay down some of it. You can also continue to somewhat abuse the USD reserve to have the Fed buy and cancel out the most expensive US debt (effectively debasing some of the wealth held in USD, by slightly debasing the currency, but that wealth is overwhelmingly held by the top 1/3, so it's really a stealth tax on the wealthier block of the population).

cthor 8y ago

The list of "maddening" items in this article are so comically low-budget it's hard to take this complaint seriously. None of the 9 listed in the article sound particularly egregious. Almost all are grants to research institutions, which as a process has a lot of flaws, sure, but unilaterally cutting all grant funding is definitely not the solution. The report totals at $5 billion, but the supposedly most egregious are not even in an order of magnitude near that cost. Meanwhile, federal income is measured in trillions. If you want to actually cut federal spending, you have to cut pensions or military spending—political suicide.

ngngngng 8y ago
A few thousand facebook, twitter and reddit bots and we could get trump fans to start asking for this.

1stranger 8y ago

Because nobody agrees what to cut. Democrats don't want to cut social programs like Medicaid and Medicare. I mean, everybody needs health care so those costs are not avoidable. Unfortunately, health care costs too much because the industry overcharges. So what does that leave us with? Well mostly military, and the Republicans (and probably many Democrats) only want to increase it. It's over $700B a year now. If I could wave a magic wand I would: 1) Tweak social security witholding rates to ensure continued solvency. Probably the easiest thing to do. 2) Bring health care costs (ie what providers charge) down to developed world standards. 3) Either raise taxes enough and/or lower defense spending enough to balance the deficit. It seems simple to me. But it means some people in healthcare and the defense contractors will make less. They would fight it so that's why everything stays the same.

taysic 8y ago
I think doctors / nurses / etc would be very resistant to making less. Not sure if it can be avoided but I think we're not in a good situation where someone could make it big being a video game developer but not being a doctor.