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Scott Adams, like the politicians in Washington DC, is living in a dream world. Cut all discretionary and defense spending to 0, and we would still be running

Scott Adams, like the politicians in Washington DC, is living in a dream world. Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit. On the left, politicians make it sound as though we're just a few tax hikes and some defense cuts away from a sound federal budget. On the right, they make it sound as though all we need are some cuts to programs like the UN or foreign aid and some tax cuts to spur economic growth. They are both in a DREAM WORLD. Some taxes will have to go up, but most importantly, Social Security and Medicare will have to be substantially reduced. Whether it means privatization, defined contribution, or some combination of solutions, no one in my generation (I am currently 24) will see either of these programs as our parents did. In fact, current retirees and soon-to-be-retirees will also probably need to have their benefits reduced. There is just no way around it.

ryanf 16y ago
> Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit. Do you have some numbers for this?
- harryh 16y ago
  http://en.wikipedia.org/wiki/United_States_federal_budget http://en.wikipedia.org/wiki/United_States_federal_budget In 2010 Total income was about 2.1T and total expenses were about 3.5T. Defense was about 23% of spending and discretionary spending was about 12%. 3.5T * (100% - 23% - 12%) = 2.275T So thats still about a 175 Billion dollar deficit. Admittedly 2010 was a below average year in terms of the US economy. In better years things might not look as bleak.
  - abrenzel 16y ago
    Thanks for supplying those numbers harryh!
  - ryanf 16y ago
    OK, so that covers the first sentence, except maybe "because of entitlements." (Although you'll note that without TARP we'd be just about breaking even in that scenario.) It doesn't cover the second half, which claims that taxing "the rich" at 100% wouldn't cover the deficit even though the total income of the richest 1% of Americans is almost as much as the entire federal budget. (23.9% of income, GDP is 14.27T, 14.27 * 0.239 = 3.41T)
- anorwell 16y ago
  It's not far off. The US deficit in 2010 was $1.42 trillion, while discretionary spending was $1.36 trillion [1]. The total household income in 2006 was ~$7 trillion [2], of which the top 1% ("rich") make over 20%, which would be around $1.4 trillion in 2006. Presumably the number is lower in 2010. Additionally, we couldn't really take 100% of that money in taxes, because they are already being taxed at 40% or so. It's not clear to me how to calculate total corporation income, but the deficit is about 10% of the GDP, so it's probably not true. As far as I can tell, none of these numbers are exceptional (percentage-wise) compared to other countries. [1] http://en.wikipedia.org/wiki/2010_United_States_federal_budget#Deficit http://en.wikipedia.org/wiki/2010_United_States_federal_budg... [2] http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Mean_income http://en.wikipedia.org/wiki/Household_income_in_the_United_... - mean income*number of households [3] http://www.huffingtonpost.com/2010/11/06/us-income-gap-rich-poor-stats-_n_779985.html http://www.huffingtonpost.com/2010/11/06/us-income-gap-rich-... [4] http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt http://en.wikipedia.org/wiki/List_of_sovereign_states_by_pub...
Vivtek 16y ago
no one in my generation (I am currently 24) will see either of these programs as our parents did. You're gonna laugh, but I thought the same thing when I was 24 (twenty years ago) and Social Security is still solvent for the next thirty. That system ain't broke. It's just that they really, really, really want that money. If they manage to get us to break it for them, your pessimism is - quite literally - a self-fulfilling prophecy.
- abrenzel 16y ago
  These things often take longer to unwind themselves than you'd expect. Still, the CBO projections are pretty clear, and we now know that Social Security is officially in deficit this year. Medicare has been so for a long time. In truth, Medicare is where the real troubles lie. I have only seen a handful of politicians try to address this honestly. Chris Christie and Paul Ryan are who come to mind. They are both Republicans, so if there are any Democrats out there talking about it, please excuse me for not remembering their names.
  - aamar 16y ago
    The 2011 SS deficit is expected to reverse in 2012 and does not represent a short-term crisis. It would be much more sensible to bring up dates like 2025 -- when SS is projected to start dipping into principal -- and 2037 -- when the principal would be exhausted, if no policies are changed [1]. I support long-term planning to remedy the situation, but it seems to hinder productive discussion when someone implies SS will be unable to send out checks tomorrow or in the next decade. Medicare: Chris Christie is a state governor so has no meaningful relationship to Medicare; you are probably referring to proposals to cut Medicaid benefits for the poor/indigent. This is not very similar to issues affecting Medicare. Paul Ryan does have a legitimate proposal for limiting Medicare growth (I suspect it will increase inefficiency and decrease health outcomes overall, maybe disproportionately for the poor), but it is a legitimate approach. But: the stimulus & healthcare reform both already contain several very serious efforts to improve Medicare efficiency long-term, especially IPAB. Its short term savings are relatively small, but this is a deeply good (Democrat-associated) proposal. [1] http://economix.blogs.nytimes.com/2010/11/26/the-social-security-deficit/ http://economix.blogs.nytimes.com/2010/11/26/the-social-secu...
kenjackson 16y ago
"Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements." That's not true. See: http://en.wikipedia.org/wiki/2010_United_States_federal_budget http://en.wikipedia.org/wiki/2010_United_States_federal_budg... Our revenue is about $2.4T. Entitlements are $2.0T. Taxing the rich at 100% would generate about $2T in additional revenue each year. Which would pretty much cover entitlements. Of course its absurd to do that -- and its not as if people will continue to generate revenue if all of it is taxed, but lets not spread myths, even in hyperbole.
- abrenzel 16y ago
  Maybe not this year, but according to the CBO Social Security enters a deficit this year (originally projected to be 2016). And in any case, cutting discretionary and defense spending to 0 is an unobtainable watermark, as is taxing the rich at 100% as you point out. The deficits being run by Social Security and Medicare will only expand as the Baby Boomers retire. Can we agree there is no budget solution that does not include entitlement reform?
Quarrelsome 16y ago
Wait, wha? I thought the US was one of the nations that paid the least in social benefits in the western world. I mean France _really_ need to look at their social spending, but the US? I figured they barely bothered (relatively speaking).
- abrenzel 16y ago
  The US certainly pays out fewer of the sort of benefits we would call "welfare" (unemployment, food stamps, EITCs, etc.) than most nations in the Western world. Our pension systems are as generous as anyone's though, particularly Medicare. That is the real source of the trouble.
  - anorwell 16y ago
    Medicare is for health coverage, and most countries give this to everyone, all the time, for nominal cost. Unless I'm missing something here. Although, US public per capita health expenditure is about equal to other countries. It just happens that they get far far less for what they pay. [1] [1] http://www.oecd.org/document/39/0,3746,en_2649_34111_36157799_1_1_1_1,00.html http://www.oecd.org/document/39/0,3746,en_2649_34111_3615779... - see health chart
    - deleted 16y ago
      [deleted]
      - anorwell 16y ago
        I don't believe that, and I didn't say that.
    - rskar 16y ago
      "It just happens that they get far far less for what they pay." The health chart is titled "Public and private health spending as percentage of GDP in selected countries, 2002." This relates the spending to GDP, not as a per capita rate. The reference does not support your statement about others ("they get far far less for what they pay"). See: http://ucatlas.ucsc.edu/spend.php http://ucatlas.ucsc.edu/spend.php, "The Cost of a Long Life." Quote from that: "In 2000, the United States spent more on health care than any other country in the world: an average of $ 4,500 per person. Switzerland was second highest, at $3,300 or 71% of the US. Nevertheless, average US life expectancy ranks 27th in the world, at 77 years. Many countries achieve higher life expectancy rates with significantly lower spending." See also: http://www.oecd.org/dataoecd/46/2/38980580.pdf http://www.oecd.org/dataoecd/46/2/38980580.pdf. Be sure to read section "Health status and risk factors" - it is an eye opener. Quote from that: "The United States spent 7,538 USD on health per capita in 2008, two-and-a-half times greater than the OECD average of 3,060 USD (adjusted for purchasing power parity). Norway spent 5,000 USD per capita, and Switzerland 4,627 USD per capita. Americans spent more than twice as much as relatively rich European countries such as France, Germany and the United Kingdom. "
derleth 16y ago
> Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Defense spending is an entitlement program for weapons makers.
- ars 16y ago
  Defense spending is a jobs program: There are about 1.5 million people in the armed forces! (Down from over 2 million 15 years ago.) And an even large number are employed indirectly.

ryanf 16y ago

> Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Tax "the rich" at 100%, and we would still be running a deficit. Tax corporations at 100%, and we would still be running a deficit. Do you have some numbers for this?

harryh 16y ago
http://en.wikipedia.org/wiki/United_States_federal_budget http://en.wikipedia.org/wiki/United_States_federal_budget In 2010 Total income was about 2.1T and total expenses were about 3.5T. Defense was about 23% of spending and discretionary spending was about 12%. 3.5T * (100% - 23% - 12%) = 2.275T So thats still about a 175 Billion dollar deficit. Admittedly 2010 was a below average year in terms of the US economy. In better years things might not look as bleak.
- abrenzel 16y ago
  Thanks for supplying those numbers harryh!
- ryanf 16y ago
  OK, so that covers the first sentence, except maybe "because of entitlements." (Although you'll note that without TARP we'd be just about breaking even in that scenario.) It doesn't cover the second half, which claims that taxing "the rich" at 100% wouldn't cover the deficit even though the total income of the richest 1% of Americans is almost as much as the entire federal budget. (23.9% of income, GDP is 14.27T, 14.27 * 0.239 = 3.41T)
anorwell 16y ago
It's not far off. The US deficit in 2010 was $1.42 trillion, while discretionary spending was $1.36 trillion [1]. The total household income in 2006 was ~$7 trillion [2], of which the top 1% ("rich") make over 20%, which would be around $1.4 trillion in 2006. Presumably the number is lower in 2010. Additionally, we couldn't really take 100% of that money in taxes, because they are already being taxed at 40% or so. It's not clear to me how to calculate total corporation income, but the deficit is about 10% of the GDP, so it's probably not true. As far as I can tell, none of these numbers are exceptional (percentage-wise) compared to other countries. [1] http://en.wikipedia.org/wiki/2010_United_States_federal_budget#Deficit http://en.wikipedia.org/wiki/2010_United_States_federal_budg... [2] http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Mean_income http://en.wikipedia.org/wiki/Household_income_in_the_United_... - mean income*number of households [3] http://www.huffingtonpost.com/2010/11/06/us-income-gap-rich-poor-stats-_n_779985.html http://www.huffingtonpost.com/2010/11/06/us-income-gap-rich-... [4] http://en.wikipedia.org/wiki/List_of_sovereign_states_by_public_debt http://en.wikipedia.org/wiki/List_of_sovereign_states_by_pub...

Vivtek 16y ago

no one in my generation (I am currently 24) will see either of these programs as our parents did. You're gonna laugh, but I thought the same thing when I was 24 (twenty years ago) and Social Security is still solvent for the next thirty. That system ain't broke. It's just that they really, really, really want that money. If they manage to get us to break it for them, your pessimism is - quite literally - a self-fulfilling prophecy.

abrenzel 16y ago
These things often take longer to unwind themselves than you'd expect. Still, the CBO projections are pretty clear, and we now know that Social Security is officially in deficit this year. Medicare has been so for a long time. In truth, Medicare is where the real troubles lie. I have only seen a handful of politicians try to address this honestly. Chris Christie and Paul Ryan are who come to mind. They are both Republicans, so if there are any Democrats out there talking about it, please excuse me for not remembering their names.
- aamar 16y ago
  The 2011 SS deficit is expected to reverse in 2012 and does not represent a short-term crisis. It would be much more sensible to bring up dates like 2025 -- when SS is projected to start dipping into principal -- and 2037 -- when the principal would be exhausted, if no policies are changed [1]. I support long-term planning to remedy the situation, but it seems to hinder productive discussion when someone implies SS will be unable to send out checks tomorrow or in the next decade. Medicare: Chris Christie is a state governor so has no meaningful relationship to Medicare; you are probably referring to proposals to cut Medicaid benefits for the poor/indigent. This is not very similar to issues affecting Medicare. Paul Ryan does have a legitimate proposal for limiting Medicare growth (I suspect it will increase inefficiency and decrease health outcomes overall, maybe disproportionately for the poor), but it is a legitimate approach. But: the stimulus & healthcare reform both already contain several very serious efforts to improve Medicare efficiency long-term, especially IPAB. Its short term savings are relatively small, but this is a deeply good (Democrat-associated) proposal. [1] http://economix.blogs.nytimes.com/2010/11/26/the-social-security-deficit/ http://economix.blogs.nytimes.com/2010/11/26/the-social-secu...

kenjackson 16y ago

"Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements." That's not true. See: http://en.wikipedia.org/wiki/2010_United_States_federal_budget http://en.wikipedia.org/wiki/2010_United_States_federal_budg... Our revenue is about $2.4T. Entitlements are $2.0T. Taxing the rich at 100% would generate about $2T in additional revenue each year. Which would pretty much cover entitlements. Of course its absurd to do that -- and its not as if people will continue to generate revenue if all of it is taxed, but lets not spread myths, even in hyperbole.

abrenzel 16y ago
Maybe not this year, but according to the CBO Social Security enters a deficit this year (originally projected to be 2016). And in any case, cutting discretionary and defense spending to 0 is an unobtainable watermark, as is taxing the rich at 100% as you point out. The deficits being run by Social Security and Medicare will only expand as the Baby Boomers retire. Can we agree there is no budget solution that does not include entitlement reform?

Quarrelsome 16y ago

Wait, wha? I thought the US was one of the nations that paid the least in social benefits in the western world. I mean France _really_ need to look at their social spending, but the US? I figured they barely bothered (relatively speaking).

abrenzel 16y ago
The US certainly pays out fewer of the sort of benefits we would call "welfare" (unemployment, food stamps, EITCs, etc.) than most nations in the Western world. Our pension systems are as generous as anyone's though, particularly Medicare. That is the real source of the trouble.
- anorwell 16y ago
  Medicare is for health coverage, and most countries give this to everyone, all the time, for nominal cost. Unless I'm missing something here. Although, US public per capita health expenditure is about equal to other countries. It just happens that they get far far less for what they pay. [1] [1] http://www.oecd.org/document/39/0,3746,en_2649_34111_36157799_1_1_1_1,00.html http://www.oecd.org/document/39/0,3746,en_2649_34111_3615779... - see health chart
  - deleted 16y ago
    [deleted]
    - anorwell 16y ago
      I don't believe that, and I didn't say that.
  - rskar 16y ago
    "It just happens that they get far far less for what they pay." The health chart is titled "Public and private health spending as percentage of GDP in selected countries, 2002." This relates the spending to GDP, not as a per capita rate. The reference does not support your statement about others ("they get far far less for what they pay"). See: http://ucatlas.ucsc.edu/spend.php http://ucatlas.ucsc.edu/spend.php, "The Cost of a Long Life." Quote from that: "In 2000, the United States spent more on health care than any other country in the world: an average of $ 4,500 per person. Switzerland was second highest, at $3,300 or 71% of the US. Nevertheless, average US life expectancy ranks 27th in the world, at 77 years. Many countries achieve higher life expectancy rates with significantly lower spending." See also: http://www.oecd.org/dataoecd/46/2/38980580.pdf http://www.oecd.org/dataoecd/46/2/38980580.pdf. Be sure to read section "Health status and risk factors" - it is an eye opener. Quote from that: "The United States spent 7,538 USD on health per capita in 2008, two-and-a-half times greater than the OECD average of 3,060 USD (adjusted for purchasing power parity). Norway spent 5,000 USD per capita, and Switzerland 4,627 USD per capita. Americans spent more than twice as much as relatively rich European countries such as France, Germany and the United Kingdom. "

derleth 16y ago

> Cut all discretionary and defense spending to 0, and we would still be running a deficit due to entitlements. Defense spending is an entitlement program for weapons makers.

ars 16y ago
Defense spending is a jobs program: There are about 1.5 million people in the armed forces! (Down from over 2 million 15 years ago.) And an even large number are employed indirectly.