How to reduce the deficit

[Ugmo]

Okay Vinnie, here's the deal: I maintain that the current budgetary woes are largely Dubya's fault, and I'm sticking with it. You maintain Obama should display more fiscal responsibility and work toward eventually balancing the budget and paying down the debt. It's pretty obvious neither of us is going to budge, and I can absolutely see us still arguing about this next February. I therefore propose a truce of sorts and suggest we shift the discussion to more productive ground.

As you are adamant that Obama should do something about the deficit, what is your proposal for reducing it? Keep in mind that tax revenues are way down due to a) the economy and b) Bush's tax cuts. Looking at the following graph of the 2010 budget (couldn't find a nifty graph of the 2011 budget just proposed by Obama), and presuming you are not in favor of raising taxes, where do you think cuts can be made to reduce the deficit?





My understanding is that social security, unemployment, Medicare, Medicaid and servicing the debt are mandatory expenses that the president has no immediate power to make cuts on. That basically leaves defense and a whole bunch of other areas that each account for around 2 percent of the budget or less. If defense amounts to 20 percent of Obama's proposed 3.8 trillion dollar budget (I know he increased defense spending a bit), that would be 760 billion. You could completely eliminate defense spending and all non-mandatory spending, and you still wouldn't wipe out the 1.6 trillion dollar deficit.

Now, I personally would agree that defense spending ultimately ought to be reduced, as U.S. defense spending absolutely dwarfs that of any other country, but with two wars still ongoing I don't know that defense spending should be radically reduced at the moment. Eventually it can be, but I think that's still way down the road. As far as the 20 percent of the budget spent on all the little shit, each of those things on their own do not really account for much of the budget. You could slash all of them in half and maybe save 300 billion - still nowhere near enough to even think about balancing the budget. What you are left with is entitlements, and - without looking this up - I would guess it would take some kind of Congressional bill to overhaul that stuff. How likely is that when Obama couldn't even get a health care deal through Congress?

The ball is in your court dude - let's hear how you'd balance the budget!


(By the way, let's forget the other two threads and discuss this issue right here.)

Edited to say I'm not entirely sure where the stimulus package and war expenses fit into this particular budget graph. Stimulus might be on top of what is depicted here, and the war spending also might not be there.

[vanitybinge]

Social Security, 19.63%
Department of Homeland Security, 2.22%
Interest on the deficit 4.63%
Housing & Urban Development 1.34%
National Science Foundation 1.32%
Deaprtment of Defense by 50% 9.82%
There goes 37.96%

War budget is covered under Department of Defense.

[Ugmo]

Social Security, 19.63%
Department of Homeland Security, 2.22%
Interest on the deficit 4.63%
Housing & Urban Development 1.34%
National Science Foundation 1.32%
Deaprtment of Defense by 50% 9.82%
There goes 37.96%

War budget is covered under Department of Defense.

Social security is an entitlement:

A book "The Complete Idiots Guide to Economics" written in 2003 cites the U.S. Government budget as reporting that entitlements make up approximately 65 percent of our budget, distributed as follows:
Social Security: 23%
Medicare: 12%
Medicaid: 7%
Other Means-tested entitlements: 6%
Mandatory payments (pensions, etc.): 6%
Net interest on debt: 11%

http://wiki.answers.com/Q/What_percenta ... titlements

That was seven years ago - don't know what the percentage is now. Don't think you're allowed to not pay the interest on the debt either.

If that 65 percent figure still holds anywhere near true, the president currently only has the power to reduce spending by 1.33 trillion dollars on the proposed budget for 2011 by completely eliminating all non-mandatory spending - not enough to eliminate the deficit.

[thejuggernaut]

Tax cuts.

[Ugmo]

Tax cuts.

So those awesome Bush tax cuts that inflated the deficits in the first place need to be expanded?

[thejuggernaut]

Tax cuts.

So those awesome Bush tax cuts that inflated the deficits in the first place need to be expanded?

Great.

Another one who doesn't understand the difference between a tax cut and a tax break.

[Ugmo]

Rather than fuck around with your cryptic posting style and try to deduce what you consider the difference to be between tax cuts and tax breaks, I'll once again offer this awesome graph to demonstrate that Bush's "tax cuts" fucked up the budget:

[thejuggernaut]

Rather than fuck around with your cryptic posting style and try to deduce what you consider the difference to be between tax cuts and tax breaks, I'll once again offer this awesome graph to demonstrate that Bush's "tax cuts" fucked up the budget:

There's nothing cryptic about it.

A dunce like P13 can figure out the difference between a cut and a break.

[tin00can]

[Ugmo]

There's nothing cryptic about it.

A dunce like P13 can figure out the difference between a cut and a break.

Then either explain what you think the difference is or stop fucking up the thread. Or preferably both.

[thejuggernaut]

LOL

http://www.youtube.com/watch?v=XOSUKnnLXQg

[thejuggernaut]

There's nothing cryptic about it.

A dunce like P13 can figure out the difference between a cut and a break.

Then either explain what you think the difference is or stop fucking up the thread. Or preferably both.

Since you either don't get it, or are intent on crying "cryptic" the way p13 cries "troll" I'll do you a favor this once.

Taxes serve what purpose ? To pay for services provided by the government.

By default, a "tax cut" has to result in a spending cut, since taxes are supposed to be tied to services.

If you are not removing (cutting) the item that requires money from the people, you aren't "cutting" the tax, you are simply giving them a break on how much they are paying, ie a tax break.

Politicians have done a wonderful job in replacing the word "cut" with the word "break".

Bush didn't give people a tax cut; he gave them a tax break.

Cut out services (the things that require spending) and reduce the contribution from the people (the tax). There's less obligation by the government ergo there's less need to take from the people.

The people have more money, they buy things.

Reagan and Bush didn't "cut taxes" - they reduced commitments to some services and eliminated others but then ramped up/reallocated spending on other services.

As I said in another thread, off the top of my head, Clinton is the one I can remember who came closest to cutting taxes.

The fix is simple - stop committing to any new spending, let Bush's tax breaks expire for a few years, then actually cut taxes ie spending.

All will be well.

[Ugmo]

Yeah, well thanks Adam Smith, but that's called PAYGO, as the tax cuts have to be balanced out by corresponding spending cuts. And if they're not balanced out, they are "unfunded tax cuts."

So since the deficit is already 1.6 trillion dollars, maybe you'd like to actually contribute to the thread and let us know what expenses you would eliminate from the budget to pay for your tax cuts, which was the original question.

[thejuggernaut]

Yeah, well thanks Adam Smith, but that's called PAYGO, as the tax cuts have to be balanced out by corresponding spending cuts. And if they're not balanced out, they are "unfunded tax cuts."

So since the deficit is already 1.6 trillion dollars, maybe you'd like to actually contribute to the thread and let us know what expenses you would eliminate from the budget to pay for your tax cuts, which was the original question.

No, that's called a tax CUT.

Not these breaks that politicians are passing off as cuts.

Oh, and the topic of the thread was HOW to reduce the deficit, not "what specific spending would you cut".

In light of your VAGUE title, I'll offer one example. God forbid you start crying "cryptic" again.

The third item on the list is pretty good starting point due to the sheer laughability of it.

[Ugmo]

Juggy, you just made up some bullshit distinction between "tax cut" and "tax break" that doesn't exist anywhere except in your head.

A tax cut is a reduction in taxes.

http://en.wikipedia.org/wiki/Tax_cut


Or from the White House itself (they've been dealing with this topic a little of late):

In recent years, spending bills and tax cuts for the wealthy were approved without paying for any of it, leaving behind a mountain of debt.

http://www.whitehouse.gov/omb/assets/bu ... essage.pdf



The third item on the list, eh? "Unemployment/Welfare/Other mandatory spending."

How is Barry O supposed to cut "mandatory spending" when he has no authorization to do so? Use your noggin man.

[Ugmo]

Hey look, 450 more dunces like P13 who don't understand the difference between tax cuts and tax breaks!

http://en.wikipedia.org/wiki/Economists ... h_tax_cuts

[Ugmo]

We haven't had a real tax cut since Carter.

How ironic is it that Carter reduced both spending and taxes? He should be a Tea Party icon.

[thejuggernaut]

Juggy, you just made up some bullshit distinction between "tax cut" and "tax break" that doesn't exist anywhere except in your head.

A tax cut is a reduction in taxes.

http://en.wikipedia.org/wiki/Tax_cut


Or from the White House itself (they've been dealing with this topic a little of late):

In recent years, spending bills and tax cuts for the wealthy were approved without paying for any of it, leaving behind a mountain of debt.

http://www.whitehouse.gov/omb/assets/bu ... essage.pdf



The third item on the list, eh? "Unemployment/Welfare/Other mandatory spending."

How is Barry O supposed to cut "mandatory spending" when he has no authorization to do so? Use your noggin man.

1. A bullshit distinction ? So in YOUR head, removing something is the same as temporarily reducing something ?

Cutting taxes is removing the financial obligation. A tax break break is leaving the obligation but reducing the people's commitment to it. There's nothing bullshit about other than the fact that you , like the Republicans, have bought the "tax cut" line.

2. Good job referencing wiki.

3. Good job referencing politicians. You know, the people who I already said have done a wonderful job in replacing the word "cut" with the word "break".

4. I am laughing at the fact that welfare and unemployment are considered mandatory spending.

5. Use YOUR noggin.

[thejuggernaut]

Hey look, 450 more dunces like P13 who don't understand the difference between tax cuts and tax breaks!

http://en.wikipedia.org/wiki/Economists ... h_tax_cuts

Hey look, a liberal as dense as Republicans who buy into buzz words.

[Ugmo]

Good job derailing the thread with your bullshit semantics.

Dude, let it go. You dismissed wiki, but wiki got it right and you got it wrong. Or do you have an issue with 450 economists - including 10 Nobel Prize laureates - referring to them as tax cuts?

Laugh all you want, but Obama has no power over entitlements in his budget. Welfare and unemployment benefits are automatically included in the budget untill the president and Congress take joint action to reduce them. That simply is not going to happen any time soon, even if Obama wanted it to.

I started this thread to evoke realistic proposals from people who are upset about Obama's "overspending." Cutting entitlements isn't realistic.

[thejuggernaut]

As I said in another thread, off the top of my head, Clinton is the one I can remember who came closest to cutting taxes..

Except Clinton raised taxes. The last President to cut taxes and reduce the Federal Debt was Carter. He cut taxes in 77 and 78 and reduced the Federal Debt from 36% of GDP to 33% of GDP.

I agree with you though that when you have a "tax cut" and mounting deficit, there is no tax cut. Maybe they should call it a tax postponement. Tax break sounds too much like tax cut. We haven't had a real tax cut since Carter.

Carter was before my time, hence Clinton is the one I can remember who came CLOSE to cutting taxes. Clinton did reform/reduce programs, hence magic.

Sure, postponement works. Call it anything except a "cut" because it's not a cut.

And I agree, a break does sound a lot like cut, but there's enough of a distinction.

What's truly astonishing is the doctrinaire Republican types who actually buy into the tax cut nonsense.

Their politicians tell them they're "cutting taxes" and they gobble it up and, for whatever reason, it doesn't seem to matter if they triple the spending on something involving weapons; so long as fewer pennies go to those dang titlebelt progrims.

Besides, "tax cut" sounds better, it sounds more permanent, and it hits home harder than " tax postponement" or "tax moratorium" (assuming half the toothless folks don't think a moratorium is where the Cowboys are playing)

[thejuggernaut]

Good job derailing the thread with your bullshit semantics.

Dude, let it go. You dismissed wiki, but wiki got it right and you got it wrong. Or do you have an issue with 450 economists - including 10 Nobel Prize laureates - referring to them as tax cuts?

Laugh all you want, but Obama has no power over entitlements in his budget. Welfare and unemployment benefits are automatically included in the budget untill the president and Congress take joint action to reduce them. That simply is not going to happen any time soon, even if Obama wanted it to.

I started this thread to evoke realistic proposals from people who are upset about Obama's "overspending." Cutting entitlements isn't realistic.

Weird how you were the one who used to cry "you're changing the goalposts".

[Ugmo]

Eh?

[VinnieKulick]

Okay Ugmo, fair enough. Here's what I would do. List all the things that are an absolute MUST HAVE. Defense, Social Security, medicare, medicade, and veterans benefits. I'd freeze those sectors at current levels.
Then, I'd take the the budget deficit amount, divide it by 8, and reduce spending by that much, for an 8 year period, granted, it wouldn't pay off interest, but it would be close enough to zero to have a jumping off point.
Then, I'd not submit a budget that spent at deficit levels.

Not to mention how I'd LOVE to change the tax codes to eliminate the IRS and go with a nation wide sales tax instead of income taxes/breaks/etc.
I am not sure exactly how to do corporate taxes, so I can honestly say I wouldn't know what to do with them.

[Ugmo]

reform welfare and reduce the amount spent on it by the government. don't eliminate it but make it a more efficiently-run program.

i can't pick up which percentages are attached to what figures as the colors are hard to make out, but..

get rid of HUD
make cuts in dept's of energy & agriculture
cuts in space program... waste of money
ixnay the "national science foundation"

naturally in times when the deficit wasn't so large these wouldn't be issues, but when the deficit is growing as it is, things like this that aren't absolutely necessary gotta go.

pull out of iraq already. stop meddling.

and with all this, you guys really think dumping a shit ton more money into a public health option is a great idea?

All those things with the exception of welfare are relatively small parts of the budget (the list at the right starts with social security in the top right and moves clockwise), meaning reducing them even by a lot wouldn't dent the deficit much.

Any meddling with welfare and unemployment benefits when the unemployment rate is around 10 percent would be political dynamite. Congress will never pass that - not any time soon anyway.

The CBO says the public option would actually reduce federal health care expenditures in the long term.

[Ugmo]

Okay Ugmo, fair enough. Here's what I would do. List all the things that are an absolute MUST HAVE. Defense, Social Security, medicare, medicade, and veterans benefits. I'd freeze those sectors at current levels.
Then, I'd take the the budget deficit amount, divide it by 8, and reduce spending by that much, for an 8 year period, granted, it wouldn't pay off interest, but it would be close enough to zero to have a jumping off point.
Then, I'd not submit a budget that spent at deficit levels.

Thing about that is you have entitlement spending which increases automatically, right? That's social security, Medicare, Medicaid, veterans' benefits AND welfare (but not defense). That's 62.85 percent of the budget by my calculation, or 2.39 trillion dollars at the current level. Cutting or even freezing any of those things would be really messy in Congress, especially in this economy in an election year. I don't think there is even a remote chance of that happening.

So that leaves you with 1.41 trillion bucks than you can realistically make cuts on, with a current deficit of 1.6 trillion. See the problem? Especially considering that the cost of entitlements will increase sharply as the baby boom generation retires. Now I think tax revenues will eventually increase as the economy gets better, but not nearly enough to offset the cost of rising entitlements while paying down a deficit of 1.6 trillion.

I don't see how you do it without tax increases - and obviously at some point something is going to have to be done about the rising cost of Medicare and Medicaid (a public option that drives down insurance and drug costs would probably help there). But it's unlikely to happen any time soon.

[bane]

I'll sidestep the cuts vs breaks debate and offer a few specific spending cuts:

1. Defense: End the wars, both of em. They're quagmires in which nothing meaningful is being accomplished. We can stay in Afghanistan another 15 years and the situation won't be much different than it is today. We should increase CIA and black ops type activities as well as select bombing missions when necessary to combat terrorism, but deploying troops is a waste of time, money, and man power. Doing that alone would save billions.

2. New spending: That big healthcare package that the dems want? Now isn't the time. You don't tackle a new expensive program while the country is broke and unemployment is 10%. A more modest approach would be more prudent at this juncture.

3. Increase revenue: Let the Bush cuts (excuse me, I meant, breaks) expire and look at a modest increase on the extremely wealthy. Do NOT however institute any more "hidden" taxes, like sin and luxery taxes. They're the result of politicians trying to weasle their way around being honest with the public, and they piss me off.


That's a start.

[thejuggernaut]

I'll sidestep the cuts vs breaks debate and offer a few specific spending cuts:

1. Defense: End the wars, both of em. They're quagmires in which nothing meaningful is being accomplished. We can stay in Afghanistan another 15 years and the situation won't be much different than it is today. We should increase CIA and black ops type activities as well as select bombing missions when necessary to combat terrorism, but deploying troops is a waste of time, money, and man power. Doing that alone would save billions.

2. New spending: That big healthcare package that the dems want? Now isn't the time. You don't tackle a new expensive program while the country is broke and unemployment is 10%. A more modest approach would be more prudent at this juncture.

3. Increase revenue: Let the Bush cuts (excuse me, I meant, breaks) expire and look at a modest increase on the extremely wealthy. Do NOT however institute any more "hidden" taxes, like sin and luxery taxes. They're the result of politicians trying to weasle their way around being honest with the public, and they piss me off.


That's a start.

Looks like you need some longer legs there Brainy Smurf.

[bane]

Oh come on dude, I couldn't resist.

[thejuggernaut]

Oh come on dude, I couldn't resist.

Nor could I.