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"The deal includes no tax increases" This might be a good thing, it could force the government to be creative with their budgeting (and maybe even produce bett

by Jarred 15y ago

"The deal includes no tax increases" This might be a good thing, it could force the government to be creative with their budgeting (and maybe even produce better results)

jeffreymcmanus 15y ago
I guess so, to the extent that laying off cops and teachers is "creative"
- InclinedPlane 15y ago
  Only a tiny fraction of the federal budget goes to cops or teachers.
  - jeffreymcmanus 15y ago
    Education is a significant part of the discretionary budget (the part that can be cut).
    - InclinedPlane 15y ago
      There is no part of the budget that can't be cut except perhaps for interest payments on the debt. If we imagine that it's impossible to cut entitlement spending then we might as well go home right now and declare that the US has had a good run, because the math on that spending does not add up.
      - jeffreymcmanus 15y ago
        Debt service (a large and growing part of the budget) can't be cut, period. Existing entitlements can't really be cut, the best you can hope for in a practical sense is giving a different deal to younger people, which doesn't change the budget outlook immediately. You're right that the math does not add up. It doesn't add up because we insist on living in a fantasyland where revenues are off the table.
antidaily 15y ago
not according to economists.
- webXL 15y ago
  which ones? How would taking more money out of the private sector help the economy right now?
  - jshen 15y ago
    You can't make that statement in a vacuum. Spending cuts now would be worse for the economy than tax increases now. So which do you choose, or do you choose to make changes once the economy improves?
    - webXL 15y ago
      "Spending cuts now would be worse for the economy than tax increases now" According to whom? You do realize that these are cuts to government spending, right? How does government get money to spend? It taxes or borrows (taxes in the future). Therefore, a dollar not spent by the government (in a monopolistic, corporatist manner) is a dollar more for the private sector to spend (in a more competitive, efficient manner). If this wasn't true, the government would be the sole provider of all goods and services. Even if the private sector wasn't more efficient in allocating resources, the economy would only be hurt in the long term by that loss of efficiency, not any immediate loss of economic growth, because the spending just shifted from public to private.
      - latch 15y ago
        Paul Krugman. Edit (my own thoughts): I'm a fiscal conservative. However, I believe that a problem with your point of view is that, while the private sector might be more efficient with that dollar, the fundamental problem is that it might not spend it (or at least, not all of it). In tough economic times, companies reduce spending. They try to wait out the storm. On an individual basis, this makes sense. In these times, the government can help balance this out by actively spending money.
Tsagadai 15y ago
Looking at all of human history, can you see a trend of governments becoming more efficient without money? If you look at the economic history of the last two centuries it is far more likely that a government with less income will just go bust under its weight and default. Government and efficiency is almost an oxymoron. Larger companies generally become less efficient the bigger they become, the same is true for governments. I would like to know why you are optimistic about the situation and why you think this time will be different than other similar (albeit on a smaller scale) situations in history?
- Jarred 15y ago
  When people are forced into an unfavorable situation that they feel needs to be gotten out of, they generally try very hard to do that. This makes it different because the government's kind of been like "We're just going to pretend to have money and not worry about it". Now, they are realizing that they actually have to deal with it. That's what I'm hoping for at least.

by Jarred 15y ago

"The deal includes no tax increases" This might be a good thing, it could force the government to be creative with their budgeting (and maybe even produce better results)

jeffreymcmanus 15y ago

I guess so, to the extent that laying off cops and teachers is "creative"

InclinedPlane 15y ago
Only a tiny fraction of the federal budget goes to cops or teachers.
- jeffreymcmanus 15y ago
  Education is a significant part of the discretionary budget (the part that can be cut).
  - InclinedPlane 15y ago
    There is no part of the budget that can't be cut except perhaps for interest payments on the debt. If we imagine that it's impossible to cut entitlement spending then we might as well go home right now and declare that the US has had a good run, because the math on that spending does not add up.
    - jeffreymcmanus 15y ago
      Debt service (a large and growing part of the budget) can't be cut, period. Existing entitlements can't really be cut, the best you can hope for in a practical sense is giving a different deal to younger people, which doesn't change the budget outlook immediately. You're right that the math does not add up. It doesn't add up because we insist on living in a fantasyland where revenues are off the table.

antidaily 15y ago

not according to economists.

webXL 15y ago
which ones? How would taking more money out of the private sector help the economy right now?
- jshen 15y ago
  You can't make that statement in a vacuum. Spending cuts now would be worse for the economy than tax increases now. So which do you choose, or do you choose to make changes once the economy improves?
  - webXL 15y ago
    "Spending cuts now would be worse for the economy than tax increases now" According to whom? You do realize that these are cuts to government spending, right? How does government get money to spend? It taxes or borrows (taxes in the future). Therefore, a dollar not spent by the government (in a monopolistic, corporatist manner) is a dollar more for the private sector to spend (in a more competitive, efficient manner). If this wasn't true, the government would be the sole provider of all goods and services. Even if the private sector wasn't more efficient in allocating resources, the economy would only be hurt in the long term by that loss of efficiency, not any immediate loss of economic growth, because the spending just shifted from public to private.
    - latch 15y ago
      Paul Krugman. Edit (my own thoughts): I'm a fiscal conservative. However, I believe that a problem with your point of view is that, while the private sector might be more efficient with that dollar, the fundamental problem is that it might not spend it (or at least, not all of it). In tough economic times, companies reduce spending. They try to wait out the storm. On an individual basis, this makes sense. In these times, the government can help balance this out by actively spending money.

Tsagadai 15y ago

Looking at all of human history, can you see a trend of governments becoming more efficient without money? If you look at the economic history of the last two centuries it is far more likely that a government with less income will just go bust under its weight and default. Government and efficiency is almost an oxymoron. Larger companies generally become less efficient the bigger they become, the same is true for governments. I would like to know why you are optimistic about the situation and why you think this time will be different than other similar (albeit on a smaller scale) situations in history?

Jarred 15y ago
When people are forced into an unfavorable situation that they feel needs to be gotten out of, they generally try very hard to do that. This makes it different because the government's kind of been like "We're just going to pretend to have money and not worry about it". Now, they are realizing that they actually have to deal with it. That's what I'm hoping for at least.