"Any doubts that this country has an insular, inept, and cataclysmically dysfunctional political class were erased long ago, but it bears repeating that only in certain elite precincts could any of the debt ”deals” discussed over the last month be seen as anything but a juvenile, cosmetic solution to a real and titanic problem. That problem isn’t going away simply
............
"Under the latest “deal,” we are told, federal spending will be cut approximately $2.7 trillion. That’s false. We’re going to pretend to cut $2.7 trillion, which is somehow meant to be a greater achievement than pretending to cut $1.5 trillion, but not as great as pretending to cut $4 trillion, which is what the rating agencies would prefer. In reality (that benighted realm that exists outside the District of Columbia), spending will increase by about $6,000,000,000,000."
The Asian Markets were on the verge of opening and NO ONE wanted to be blamed for the global tanking of the market.....thus a horsesh** deal to
calm the market and claim"victory".......it was what was expected because the GRIDLOCK on the hill will NOT be eased now NOR in November. "get
in,shut up and HOLD ON because it's going down faster than the MSM thought......which is what Digit99 predicted OVER 2 years ago.....anyone who does good research was NOT surprised by this....(Nov. will be no different,SSDD>)JMO
I can't disagree with that. I see a hard crash of our economy. No way can this country ne put back on track to a balanced budget and a surplus that can begin to pay down our deficit without a serious increase in revenue. There are going to be some pain and sacrifices, not just the middle class and seniors and the poor....everybody needs to step up.
Maybe down the road as we get our spending under control, and end the costly wars that were never paid for, we can develop a more equitable and simpler tax code that will provide steady income for the future. This country cannot go in reverse indefinitly.
A SERIOUS and sustained increase in reveune can only come from a lower unemployment rate...tax increases will bring a short boost but will also hurt any chance of recovery imo.
I do agree that we need a more simplified tax code that prevents loopholes and we need to end most if not all subsidies. This whole mess was due to the limitless credit card used by people who know little about economics and care more for their own careers than the economic stability of this country.
The left is angry because they are now being judged by the content of their character and not by the color of their skin.
Revenue isn't the problem archer, spending is. The revenue sent to the DC operation will never be 25% or 33% of the national production for the DC government alone. That can't happen without turning the citizens of the states into nothing more than glorified indentured servants of the DC based government. The revenue from taxation for the DC based operation has averaged 18% over the last 60 years regardless of how high the privilege tax on employment to pay for SS and Medicare has been, regardless of how much income is subject to that privilege tax, regardless of what tax exemptions are or are not part of the tax code, regardless of how high or how low the tax rate is on the next dollar earned - the tax revenue of the DC based operation has averaged 18% for 60 years. It isn't going any higher, that is the taxing capacity of the DC government - that is all it is going to get - an average of 18% of the national production over time.
The revenue isn't going to get any higher than 18% of GDP for DC. There are only two ways for that 18% of GDP to translate into more revenue. Grow the economy and artificially inflate the economy by devaluing the currency. The only healthy way is the first one and that won't happen when you tax the populace, or certain segments of the populace, at a higher rate and take more of the fruits of their labor away from them. That which you want less of you tax more, that which you want more of you tax less or exempt from taxation entirely. If you want more investment into more efficient production, you tax the investment less than you currently are to encourage, or stimulate, that investment.
Revenue isn't the problem, spending is the problem. Spending is the problem because the DC operation is focused on priorities other than those it was created to address. Limiting the access of DC to the national production will help it focus on its primary responsibilities, which are the general welfare and common defense of the union of the states, not the individual citizens that live in those states. As much as the current budget tells us otherwise, the main purpose of the DC government isn't to be a national clearinghouse for the collection and distribution of the nation's charity. The sooner DC and the rest of us acknowledge and understand this, the sooner we can get ourselves out of the hole the attempts to make this the primary responsibility of the DC government has dug for all of us.
PrintSmith wrote: Revenue isn't the problem archer, spending is. The revenue sent to the DC operation will never be 25% or 33% of the national production for the DC government alone. That can't happen without turning the citizens of the states into nothing more than glorified indentured servants of the DC based government. The revenue from taxation for the DC based operation has averaged 18% over the last 60 years regardless of how high the privilege tax on employment to pay for SS and Medicare has been, regardless of how much income is subject to that privilege tax, regardless of what tax exemptions are or are not part of the tax code, regardless of how high or how low the tax rate is on the next dollar earned - the tax revenue of the DC based operation has averaged 18% for 60 years. It isn't going any higher, that is the taxing capacity of the DC government - that is all it is going to get - an average of 18% of the national production over time.
The revenue isn't going to get any higher than 18% of GDP for DC. There are only two ways for that 18% of GDP to translate into more revenue. Grow the economy and artificially inflate the economy by devaluing the currency. The only healthy way is the first one and that won't happen when you tax the populace, or certain segments of the populace, at a higher rate and take more of the fruits of their labor away from them. That which you want less of you tax more, that which you want more of you tax less or exempt from taxation entirely. If you want more investment into more efficient production, you tax the investment less than you currently are to encourage, or stimulate, that investment.
Revenue isn't the problem, spending is the problem. Spending is the problem because the DC operation is focused on priorities other than those it was created to address. Limiting the access of DC to the national production will help it focus on its primary responsibilities, which are the general welfare and common defense of the union of the states, not the individual citizens that live in those states. As much as the current budget tells us otherwise, the main purpose of the DC government isn't to be a national clearinghouse for the collection and distribution of the nation's charity. The sooner DC and the rest of us acknowledge and understand this, the sooner we can get ourselves out of the hole the attempts to make this the primary responsibility of the DC government has dug for all of us.
The left is angry because they are now being judged by the content of their character and not by the color of their skin.
When you are in a hole, like we are, it's a lot faster to use more than one shovel to fill it in. We need both spending cuts and revenue to make a dent in the huge debt we have accumulated.....there should be no tax breaks for ANYONE until we get our fiscal house in order. Why prolong the process? Get er done, then determine how much tax is needed to sustain a leaner government and adjust the tax code accordingly.
What we have learned from the current situation, or should have learned anyway, is that the baseline spending of DC can't be allowed to increase by a growth rate that is substantially more than the actual increase of the national production without getting ourselves into a mess.
Spending on so called "mandatory" programs other than SS, Medicare, Medicaid and the interest on the national debt rose nearly 60% between fiscal 2009 and fiscal 2010 - and this is the baseline from which we are now working in determining how much has been "cut" from the future deficits. Department of Commerce funding is up over 40% in 2010 from 2009. HUD about 19%, EPA about 35%, Corporation for National and Community Service up 22% and the killer, interest on the national debt increased 18% in a single year - mostly as a result of so much new debt being added, to which another $2 Trillion plus looks likely to be added very soon. How much will that drive up the cost of servicing the debt archer? Another double digit percentage jump? We are spending nearly a quarter of a trillion dollars annually servicing our existing debt, it is the fastest growing expenditure on the DC books at a time of record low interest rates. There is one thing driving us to the abyss - deficit spending by DC. There is no practical means of raising the tax revenues by 50%, or even an additional 10% above what they are right now. Revenue in fiscal 2011 is going to be around $2.2 Trillion dollars, even if we were to raise the tax burden and realize an additional 10% that would bring us to about $2.4 Trillion - against a budget that plans on spending upwards of $3.8 Trillion. Now I will grant you that $200 Billion or so less in deficit spending is a good thing, but it still leaves us digging the budget hole nearly $1.5 Trillion deeper. We have so many shovels digging the hole deeper that we have no hope of putting enough shovels on the task of filling it in at the present time. The difference between a $1.5 Trillion deeper hole and a $1.7 Trillion deeper hole isn't worth noting. Before the shovels attempting to fill the hole in have any chance of making an impact, we have to stop digging it deeper with 8x as many shovels. That is why spending, not revenue, is what needs to be addressed in an urgent manner. Pretending that $200 Billion worth of dirt being thrown down a $17 Trillion (and growing at minimum $1 Trillion deeper every year until 2021) well is going to help at this point is quite simply a denial of reality as it exists.
We don't need to slow the increase at which the DC spending grows between now and 2021 - we need to reduce the actual amount that DC spends from one year to the next every year until 2021. Cutting the rate at which the spending increases every year isn't going to help us at this point, we need a smaller actual budget - from $3.8 Trillion this year to $3.6 Trillion the next, to $3.5 Trillion the next, to $3.3 Trillion the next and so on and so forth until revenue and spending meet.
Revenue receipts will increase as the economy grows under the current tax structure, even if the percentage of GDP that they represent stays the same. If our economy grows about 3% a year, from the current $14.5 to $15 Trillion, the current 15% of GDP that the 2011 revenue represents, $2.2 Trillion, will increase $50 Billion all by its lonesome, no help needed at all. A return to more historical norms of around 17%, which will happen with an expanding economy and lower unemployment, will result in revenue of $2.55 Trillion, all without raising a single tax or eliminating a single exemption. If we lower the spending every year from its current level by the same amount the economy is growing; not slow the growth rate, actually reduce the spending from one year to the next; those two figures, spending and revenue, will meet in the next decade and we will be on a path to fiscal solvency from there on out. The key is cutting the budget, not the growth of the budget, until those two figures reach parity with each other. Spending has increased too rapidly and slowing the rate of growth from current levels will not get the job done, even if you raise the national tax burden an additional 10% above what it is now. The actual physical dollars spent by DC has to go down, not up at a slower rate.
