toldailytopic: Taxing more or spending less? Which is the most wise path to reduce th

Traditio

BANNED
Banned
It isn't the federal budget that got us so far into debt. It's the insane cost of health care, the Iraq war, the Wall Street bail-out, and the Wall Street con-game that crashed the economy. The only reason the media and the politicians are all blaming it on the federal budget, and especially on "entitlements", is because they don't want us to place the blame where it really belongs: on the who have pocketed all those billions and billions of dollars.

Either you're not making sense or I'm not understanding you. What on earth do you mean by saying that the federal budget didn't get us into debt? The way that you get into debt is by spending more money than you have.

Were these expenditures that you listed included in the federal budget or not?

If they were, then, as a matter of fact, the federal budget, along with the corresponding inequality of revenue to expenditures, is precisely what got us into debt!

We shouldn't cut spending at all. We should spend better, and smarter.

Let's go back to my analogy. Suppose that I am a homeowner with a family. I can't afford all of my bills. I put the excess on my credit card. I've racked up a massive credit card debt, and I'm shelling out 7% of my budget on interest payments alone (not even making payments on the principle, mind you; we're just talking about interest). Would it really make sense for me to say: "We shouldn't cut spending at all! We should spending better, and smarter"?

Depending on what my expenditures are, maybe. I don't want to rule it out. But I think that it would still miss the point. The problem is that I'm spending money that I don't have, and, because of this, I'm having to pay a lot more money (that I still don't have!) on interest payments.

Any reasonable person immediately would realize: "Huh. I'd better 1. stop spending money that I don't have and 2. get to paying off this massive debt ASAP! I don't want to pay 7% of my budget on interest payments. That's just ridiculous."

Maybe I'm racking up this debt because I spend $1000 on clothes every month, but can only afford to pay $200, and I actually need much less than that. If that's the problem, I should seriously cut my clothing costs. For example, only spend $50 (or less) on clothes every month, and devote (at least) the extra $150 (which otherwise could have gone to clothes) to paying off my debt instead.

But maybe the problem is that I'm not getting paid enough, even though all of my expenditures are entirely reasonable. Then I need to find a way to make more money.

What does not make sense is to use one credit card to pay the interest on the other one. :plain:

There are a lot of reasons.

It's primarily this one: People tend to hate congress in general. But do you know what? They love their own guy. That's why he keeps getting elected. They hate congress. They love their own congressmen.

And that's one of the reasons why our republic (and democratic systems in general) is so screwed up.
 
Last edited:

Lighthouse

The Dark Knight
Gold Subscriber
Hall of Fame
Four points:

1. The people who are presently on it have paid into it their entire lives. Cutting it would be unjust to them.
Give them back the money they paid into it.

2. There are many who have paid into social security who are not yet on it. Cutting it would be unjust to them.
See above.

P.S.
There are also people collecting SSI who never paid into it.

3. If the above alone were a viable, realistic option that people reliably could be expected to use, then social security would never have been instituted, because there would have been no need for it. Fact is, there are several reasons why this is unworkable.
Nope. Never. :rolleyes:

A. Investments can be risky. This was demonstrated in the 2008 stock market crash.
Investments are the only way to set aside money.:thumb:

:rolleyes:

B. Many cannot be expected to save substantial amounts for retirement either because of a. lack of means or b. because of their own irresponsibility.
Whose fault is that?

4. Social security payments are not inconsistent with saving money on your own. My grandparents did just this. Many older people draw both on social security payments as well as their own investments/savings.
Irrelevant.

Yes. Of all the posters here, there's no reasoning with me. I mean, sure, I've spent several years of study on reasoning properly, but no, there's absolutely no reasoning with me. Somehow, all of that study was just plain lost on me. :plain:
I didn't say you were the only one. And the problem is your conceit.
 

PureX

Well-known member
Either you're not making sense or I'm not understanding you. What on earth do you mean by saying that the federal budget didn't get us into debt? The way that you get into debt is by spending more money than you have.

Were these expenditures that you listed included in the federal budget or not?

If they were, then, as a matter of fact, the federal budget, along with the corresponding inequality of revenue to expenditures, is precisely what got us into debt!
The federal government has obligations that it is expected to fulfill. And we are expected to supply the government with the resources it need to fulfill those obligation. That's the "federal budget".

Unfortunately, we have slowly and steadily allowed wealthy special interests to take control of our government through legalized bribery , and with that control, they have been funneling massive amounts of money to themselves. OUR money. They want us to believe that all this misappropriated money (much of it borrowed) is part of the "federal budget", meaning that it is just the inherent cost of the government doing what it has been obligated to do, by us. But this is a lie. The massive expenditures that have driven us so deeply into debt were not part of the natural cost of our government meeting it obligations. They were really the result of illicit schemes intended to funnel hundreds of billions of our tax dollars into the hands of a small number of very wealthy and powerful people. And the schemes worked. Those people got VERY rich, and we are very deep in debt because of it.

Now, they want us to blame ourselves for charging our government with too many obligations (like helping us when we're sick, or unemployed, etc.), and therefor over-spending and causing this big debt. But that wasn't really what happened at all. It's a lie. If all those hundreds of billions of dollars had not been stolen from us through the the perversion of government through legalized bribery, we wouldn't be experiencing all this debt, and the government could easily meet it's obligations to the people it was created to serve.
Let's go back to my analogy. Suppose that I am a homeowner with a family. I can't afford all of my bills. I put the excess on my credit card. I've racked up a massive credit card debt, and I'm shelling out 7% of my budget on interest payments alone. Would it really make sense for me to say: "We shouldn't cut spending at all! We should spend better, and smarter"?
This is not a very accurate analogy. If the reason you are in so much debt is because one member of your family stole most of the family's money, then I would think your first course of action would be to retrieve as much of that money as you can, and implement security measures to stop them from stealing it, again.

But our "family" is insanely dysfunctional, so we are not doing the obvious. In fact, we can't even acknowledge what we have allowed to happen, let alone determine a reasonable response.
The problem is that I'm spending money that I don't have, and, because of this, I'm having to pay a lot more money (that I still don't have!) on interest payments.
Sure, but there is more to it then that.
Any reasonable person immediately would realize: "Huh. I'd better get to paying off this massive debt ASAP! I don't want to pay 7% of my budget on interest payments. That's just ridiculous."
No, a reasonable person would want to know why they are suddenly out of money. And when they discover that they have been robbed, would try to retrieve what was taken. They would also want to be sure that they are taking in enough to cover their obligations, and if not, either increase their income or limit their obligations.

Also, this "debt" is not sacred. As I tried to point out in another thread, "debt" is itself a bit of a scam. There is no such thing as a guaranteed loan, except in the human imagination. Therefor, a loan is really an investment, and sometimes, investments just don't pay off. So it's not outrageous that we might decide to tell our "investors" that we simply can't/won't pay anymore "dividend" on their investment until we "right the ship", so to speak. And in reality, there isn't a thing they can do about it. Nor should we feel especially guilty about it.
What does not make sense is to use one credit card to pay off the other one. :plain:
Well, that depends. If doing that buys us the time we need to "right the ship", then why not. All that's changing is the name on the "debt" agreement. And as you have probably gathered, I'm not all that concerned about them getting their expected "dividends".
It's primarily this one: People tend to hate congress in general. But do you know what? They love their own guy. That's why he keeps getting elected. They hate congress. They love their own congressmen.
No they don't. You're way over-simplifying it. I certainly don't love my congressman. And I know many of my neighbors who don't either.
 

genuineoriginal

New member
The federal government has obligations that it is expected to fulfill.
Yes, the Federal government has obligations TO UPHOLD THE CONSTITUTION. This means that it is a criminal act to spend Federal money on anything not authorized in the Constitution.
And we are expected to supply the government with the resources it need to fulfill those obligation.
There is no expectation that the people of the United States must aid and abet the Federal government in criminal acts.
 

rexlunae

New member
No, the shortfall was what the budget was based on.

Wrong. The projection is what the budget was based on, kinda, although only loosely, since we expected to run a budget deficit. The shortfall is the amount below the projection we ended up.

And the vote in Nov. is bringing taxes based on the same static model. It is saying in the same way, "This hose ran too slow and didn't fill the tank the way we expected. We will now try to fill a bigger tank using the same hose."

No. The vote in November raised tax rates...the analog of using a wider hose.

Au contraire. When people have money to invest and no regulation in their way they are able to wind up the economy's engine. Imagine if they had the same barriers to fracking that Vermont has?

If it were true that low taxes and weak regulation lead to economic prosperity, Nevada would be right up there with Texas. But that isn't happening. Texas and some other states are succeeding in large part because of an energy boom. Nevada is still trying to recover from the real estate crash, and therefore it has one of the worst balance sheets in the country right now.

The Laffer Curve affects everything, some directly and some indirectly, and some in smaller ways and other in bigger ways. They way to maximize investment by the private sector and have the highest revenue for government is a flat tax according to the Laffer Curve.

The problem, for supply-siders, is that they always have to argue for indirect effects because when you look at the evidence, it doesn't really bear what they claim. For instance, in 2001, and again in 2003, President Bush lowered taxes. If we were on the right side of a Laffer Curve, the model predicts that revenue should have increased. So did it?

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

No, it didn't. Both years, tax revenue dropped. This proves that either there is no applicable Laffer Curve, or we were on the left slope of the Laffer Curve, not the right slope. I tend to suspect the former, but even if you chose to believe the later, it pretty much overthrows any argument for cutting taxes.

The fact is that wealth does not trickle from the top down, but it flows from the middle out. A broad middle class lifts people out of poverty, and provides the basis for the success of commerce and thus the so-called "job creators". The middle class does not need tax cuts as much as it needs robust social institutions and opportunities for advancement.

Thus, CA is in trouble with higher taxes, and TX would be wise to cut spending, and cut/flatten the tax rates to do even better than they are.

I have a standing challenge with a couple of the conservative members on this very point. I have predicted that with the new supermajorities in the state legislature, popular support for raising taxes, and a Democratic governor, we actually stand a chance of making real progress on the state budget problems. So I guess the real answer here is to stay tuned.

You have to admit, raising rates does not always mean more revenue, and specifically in this case CA will end up shorter than they based their budget on.

There may be a few marginal cases where that is true, but taxes do not really impact investment all that much because we tax the profits. Most people, given the option of making a share of a dollar or making nothing at all will still want to make a share of the dollar. You're assuming that the economy is going to contract as a result of the taxes, but that isn't a given, and while it is possible for any projection to be too optimistic, it's just as likely for it to be too pessimistic. Either way, we'll find out soon enough.
 

PureX

Well-known member
Yes, the Federal government has obligations TO UPHOLD THE CONSTITUTION. This means that it is a criminal act to spend Federal money on anything not authorized in the Constitution.
But that's stupid, because the Constitution cannot possibly cover all the things that we need the government to regulate. The Constitution, for example says nothing at all about owning and operating motor vehicles, yet it is essential that we do regulate this, and that the government spend the money necessary to do so. The Constitution is a set of guiding principals, not the sum total of all U.S. law.
 

genuineoriginal

New member
But that's stupid, because the Constitution cannot possibly cover all the things that we need the government to regulate. The Constitution, for example says nothing at all about owning and operating motor vehicles, yet it is essential that we do regulate this, and that the government spend the money necessary to do so. The Constitution is a set of guiding principals, not the sum total of all U.S. law.

What a truly uninformed objection.
Regulation of owning and operating motor vehicles is held by each of the Individual States, not the Federal Government.
This was covered in the tenth amendment, which states:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
It is up to each Individual State to regulate what happens inside of that State, with the Federal Government overseeing the protection of all the states from foreign powers and regulating the interactions between the Individual States.
 

PureX

Well-known member
What a truly uninformed objection.
Regulation of owning and operating motor vehicles is held by each of the Individual States, not the Federal Government.
This was covered in the tenth amendment, which states:
It is up to each Individual State to regulate what happens inside of that State, with the Federal Government overseeing the protection of all the states from foreign powers and regulating the interactions between the Individual States.
Oh, there's lots of other examples: disease control, disaster relief, the FBI, interstate commerce, market regulation, environmental protection, food safety, drug safety, product safety, media regulation, airline regulation, ... on and on.
 

genuineoriginal

New member
Oh, there's lots of other examples: disease control, disaster relief, the FBI, interstate commerce, market regulation, environmental protection, food safety, drug safety, product safety, media regulation, airline regulation, ... on and on.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
If all of the things you are mentioning need to be regulated by the Federal Government and are not specifically covered in the Constitution, then there are provisions for amending the Constitution to grant the Federal Government those powers.

Until that happens, the Federal Government is illegally assuming powers reserved to the States or to the people.
 

PureX

Well-known member
If all of the things you are mentioning need to be regulated by the Federal Government and are not specifically covered in the Constitution, then there are provisions for amending the Constitution to grant the Federal Government those powers.

Until that happens, the Federal Government is illegally assuming powers reserved to the States or to the people.
So sayeth genuineoriginal, so then it must be.
 

Yorzhik

Well-known member
LIFETIME MEMBER
Hall of Fame
Wrong. The projection is what the budget was based on, kinda, although only loosely, since we expected to run a budget deficit. The shortfall is the amount below the projection we ended up.
Quite right. So this shows you should realize the problem. The current projection had a shortfall, and the same people are supporting the next projection. Therefore, the second projection will also be a shortfall.

No. The vote in November raised tax rates...the analog of using a wider hose.
The taxpayers supplying the first projection are the same ones providing the next.

When you have a shortfall in the revenues in the context of the latest tax increase, I want you to come back and admit you were wrong, that higher tax rates did not get you the money you expected.

If it were true that low taxes and weak regulation lead to economic prosperity, Nevada would be right up there with Texas. But that isn't happening. Texas and some other states are succeeding in large part because of an energy boom. Nevada is still trying to recover from the real estate crash, and therefore it has one of the worst balance sheets in the country right now.
Nevada had a real estate crash because of regulation.

The problem, for supply-siders, is that they always have to argue for indirect effects because when you look at the evidence, it doesn't really bear what they claim.
I'm not a supply-sider, and I'm not arguing the implementation of their ideas. If there are supply-siders that happen to follow my ideas, then to whatever extent they follow them they will be right. So please stay on topic and understand what the Laffer Curve is before you dive into the bad examples of history using supply-side economics.

The Laffer Curve is only concerned with tax rates. Your statement that the Laffer Curve claims tax rates are the only effect gov't can have on the economy is wrong.

For instance, in 2001, and again in 2003, President Bush lowered taxes. If we were on the right side of a Laffer Curve, the model predicts that revenue should have increased. So did it?

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

No, it didn't. Both years, tax revenue dropped. This proves that either there is no applicable Laffer Curve, or we were on the left slope of the Laffer Curve, not the right slope. I tend to suspect the former, but even if you chose to believe the later, it pretty much overthrows any argument for cutting taxes.

The fact is that wealth does not trickle from the top down, but it flows from the middle out. A broad middle class lifts people out of poverty, and provides the basis for the success of commerce and thus the so-called "job creators". The middle class does not need tax cuts as much as it needs robust social institutions and opportunities for advancement.
Thanks for going on ad nauseum about the bad government policy that I'm arguing against in this thread. We both get it and you can stop now.

I have a standing challenge with a couple of the conservative members on this very point. I have predicted that with the new supermajorities in the state legislature, popular support for raising taxes, and a Democratic governor, we actually stand a chance of making real progress on the state budget problems. So I guess the real answer here is to stay tuned.
So can they collect as soon as you see the expected revenue falls short of the actual revenue? When will that information come in?

There may be a few marginal cases where that is true, but taxes do not really impact investment all that much because we tax the profits. Most people, given the option of making a share of a dollar or making nothing at all will still want to make a share of the dollar. You're assuming that the economy is going to contract as a result of the taxes, but that isn't a given, and while it is possible for any projection to be too optimistic, it's just as likely for it to be too pessimistic. Either way, we'll find out soon enough.
This is not correct. I'm assuming there is a flat tax rate that will be the best for expanding the economy. But regulation and spending, including the threat of regulation and spending, obviously affects the economy more than taxes. And, one thing to note, a progressive tax rate includes government regulation within it. If you'd like me to explain this let me know.
 

Nick M

Plymouth Colonist
LIFETIME MEMBER
Hall of Fame
Trad, welfare then refers to "faring well". Socialism doesn't do that, and welfare as you like didn't exist then for us. AFDC is not faring well.
 

rexlunae

New member
Quite right. So this shows you should realize the problem. The current projection had a shortfall, and the same people are supporting the next projection. Therefore, the second projection will also be a shortfall.

Any projection based on averages and downright guesses can be wrong. All projections about the revenue from taxes depend on guesses about any number of economic factors, and therefore it isn't surprising when some specific factor doesn't turn out the way we expect. For instance, earlier and lower than expected sales of Facebook stock from the first investors in the IPO were one of the reasons given for the shortfall.

The taxpayers supplying the first projection are the same ones providing the next.

It's a projection. We don't know yet how accurate it will be, but it's probably better than a blind guess.

When you have a shortfall in the revenues in the context of the latest tax increase, I want you to come back and admit you were wrong, that higher tax rates did not get you the money you expected.

We may well have another shortfall, that being tax revenue lower than expected. What I've said, what's been projected by the government is that we'll see increased revenue as a result of the new taxes. So yes, please do keep me honest about that prediction.

Nevada had a real estate crash because of regulation.

Do explain.

I'm not a supply-sider, and I'm not arguing the implementation of their ideas.

Um, ok, I don't want to put words in your mouth...but supply side economics argues that the best economic outcome is achieved by removing the barriers to production, such as taxes and regulation. It's basically defining for supply-side economics. Is that not exactly what you have been arguing for?

Also, the Laffer Curve was designed by supply-siders.

If there are supply-siders that happen to follow my ideas, then to whatever extent they follow them they will be right. So please stay on topic and understand what the Laffer Curve is before you dive into the bad examples of history using supply-side economics.

I think it's more accurate to say that you're following their ideas without realizing it.

The Laffer Curve is only concerned with tax rates. Your statement that the Laffer Curve claims tax rates are the only effect gov't can have on the economy is wrong.

Only, I didn't say that, and it isn't logically drawn from my arguments either.

Thanks for going on ad nauseum about the bad government policy that I'm arguing against in this thread. We both get it and you can stop now.

It's a strange thing to cite the Laffer Curve as a reason to draw a conclusion, and then when I disprove the impact of the Laffer Curve on the situation that we are discussing, to act as if you completely agree with me and I'm boring you for even bringing it up.

I really don't know what your point was in bringing it up now.

So can they collect as soon as you see the expected revenue falls short of the actual revenue? When will that information come in?

Well no. I haven't argued that the projections are perfect. What I have argued is that we will see an increase in revenue as a result of the taxes. So we can compare the tax revenue to the previous year to see if my prediction is correct, and then look and see if there are confounding factors that deflect the numbers one way
or the other.

This is not correct. I'm assuming there is a flat tax rate that will be the best for expanding the economy.

0%? Are we allowed to go negative?

But regulation and spending, including the threat of regulation and spending, obviously affects the economy more than taxes.

Do explain.

And, one thing to note, a progressive tax rate includes government regulation within it. If you'd like me to explain this let me know.

Please do.
 

resurrected

BANNED
Banned
No, it was directed back towards Trad

IIRC, we were engaged in a conversation elsewhere regarding government funding of health care and the absurdity that more basic immediate needs weren't being provided first.
 
Top