4 ms·

The government spending grows to fit available revenues, and available revenues grow to fit whatever the taxpayers can still bear.

by xyzzyz 4y ago

lotsofpulp 4y ago
>The government spending grows to fit available revenues This is trivial from the fact that the government is not a for profit entity. >and available revenues grow to fit whatever the taxpayers can still bear This is also trivial because taxpayers and voters sufficiently overlap. However, some governments have borrowed more from the future than other governments, and just like a business with more debt service has less to spend on other expenses and/or has less profit, a government with more debt service has to spend less on infrastructure/services and/or has to increase taxes.
- xyzzyz 4y ago
  > This is trivial from the fact that the government is not a for profit entity. This is not so. Government could use the surplus revenues to pay off debt early, or to reduce taxes. It almost never does these things.
  - lotsofpulp 4y ago
    Oregon does with the infamous kicker rebate. But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection. Although, in reality, governments spend far more than they collect via off the books retirement benefits for government employees.
    - xyzzyz 4y ago
      > Oregon does with the infamous kicker rebate. Haven’t heard about it before, but this sounds great, not sure why it’s infamous. Sadly, though, things like that overall very rare, hence why I said “almost never”. > But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection. I think it’s the other way around: the budget is planned around expected tax revenues, instead of tax revenues being planned around budget. This is actually a huge difference: when there is a revenue windfall, extra funds are spent on pork or vanity projects, instead of returning them to people who they were taken from.
      - swearwolf 4y ago
        As an Oregonian, I think the reason it’s infamous is that Oregon schools are terrible and many people blame the kicker for taking surplus budget that could have been spent on schools and giving it back to the taxpayers instead. It also gets a fair amount of criticism for proportionally distributing funds based on how much a person paid in taxes, so the wealthiest get the most money back. Can’t say how much the kicker really does impact these things, but I can say that when you compare state funded resources between California, Washington and Oregon, Oregon’s usually come out looking worse. For example, if you take a road trip up i5 from Los Angeles to Seattle, you’ll notice that the rest stops in Oregon are far worse than those in California or Washington. It does seem that there’s an austerity in Oregon absent in those two states, and I can’t help but wonder if it’s imposed by the requirement to send back the surplus.
        xyzzyz 4y ago
        There is basically no significant correlation between school spending and performance. If anything, worse performing schools tend to be better funded on average. Thus, there is no reason to expect that increased school funding will translate to better performance. I hope that it makes you feel slightly better about the surplus tax not going to schools. As for austerity, given the between-state variation, what money is spent on is way more important than how much of it is available. As it turns out, Oregon actually rakes in more money (per capita) in state and local taxes than Washington, so one should rather expect Washington to be the austere one. In fact, Oregon could send every resident a check for $1k every year, and still have 10% more money available per capita than Washington. That’s why I’m rather skeptical about governments claiming to need more money in order for X not to suck: first I want to hear an answer to “why X sucks less in state Y, which spends less money on X than you?”.
  - imtringued 4y ago
    That would result in deflation and deflation would require negative interest rates. Germany had a debt brake before the pandemic and their interest rates were the lowest and even negative on government bonds. The same is true of other countries like Switzerland. If you want your government to stop the endless debt expansion you're going to need negative interest rates.

The government spending grows to fit available revenues, and available revenues grow to fit whatever the taxpayers can still bear.

by xyzzyz 4y ago

The government spending grows to fit available revenues, and available revenues grow to fit whatever the taxpayers can still bear.

lotsofpulp 4y ago

>The government spending grows to fit available revenues This is trivial from the fact that the government is not a for profit entity. >and available revenues grow to fit whatever the taxpayers can still bear This is also trivial because taxpayers and voters sufficiently overlap. However, some governments have borrowed more from the future than other governments, and just like a business with more debt service has less to spend on other expenses and/or has less profit, a government with more debt service has to spend less on infrastructure/services and/or has to increase taxes.

xyzzyz 4y ago
> This is trivial from the fact that the government is not a for profit entity. This is not so. Government could use the surplus revenues to pay off debt early, or to reduce taxes. It almost never does these things.
- lotsofpulp 4y ago
  Oregon does with the infamous kicker rebate. But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection. Although, in reality, governments spend far more than they collect via off the books retirement benefits for government employees.
  - xyzzyz 4y ago
    > Oregon does with the infamous kicker rebate. Haven’t heard about it before, but this sounds great, not sure why it’s infamous. Sadly, though, things like that overall very rare, hence why I said “almost never”. > But my point is more that governments (ideally) collect taxes based on projected spending (a budget), so of course spending will roughly match up with collection. I think it’s the other way around: the budget is planned around expected tax revenues, instead of tax revenues being planned around budget. This is actually a huge difference: when there is a revenue windfall, extra funds are spent on pork or vanity projects, instead of returning them to people who they were taken from.
    - swearwolf 4y ago
      As an Oregonian, I think the reason it’s infamous is that Oregon schools are terrible and many people blame the kicker for taking surplus budget that could have been spent on schools and giving it back to the taxpayers instead. It also gets a fair amount of criticism for proportionally distributing funds based on how much a person paid in taxes, so the wealthiest get the most money back. Can’t say how much the kicker really does impact these things, but I can say that when you compare state funded resources between California, Washington and Oregon, Oregon’s usually come out looking worse. For example, if you take a road trip up i5 from Los Angeles to Seattle, you’ll notice that the rest stops in Oregon are far worse than those in California or Washington. It does seem that there’s an austerity in Oregon absent in those two states, and I can’t help but wonder if it’s imposed by the requirement to send back the surplus.
      - xyzzyz 4y ago
        There is basically no significant correlation between school spending and performance. If anything, worse performing schools tend to be better funded on average. Thus, there is no reason to expect that increased school funding will translate to better performance. I hope that it makes you feel slightly better about the surplus tax not going to schools. As for austerity, given the between-state variation, what money is spent on is way more important than how much of it is available. As it turns out, Oregon actually rakes in more money (per capita) in state and local taxes than Washington, so one should rather expect Washington to be the austere one. In fact, Oregon could send every resident a check for $1k every year, and still have 10% more money available per capita than Washington. That’s why I’m rather skeptical about governments claiming to need more money in order for X not to suck: first I want to hear an answer to “why X sucks less in state Y, which spends less money on X than you?”.
- imtringued 4y ago
  That would result in deflation and deflation would require negative interest rates. Germany had a debt brake before the pandemic and their interest rates were the lowest and even negative on government bonds. The same is true of other countries like Switzerland. If you want your government to stop the endless debt expansion you're going to need negative interest rates.