gut;933237 wrote:While I mostly agree with what you wrote, I'd challenge the above assumption. Middle men (which the US govt is basically) always extract non-value added wealth. The sheer amount of waste and inefficiency could probably remove 100's of billions of govt spending with no adverse impacts on the economy. And only deficit spending is accretive to GDP, which itself is a bit misleading because, in fact, taxes are dilutive to GDP. Technically, deficit spending is not "stimulus" but just deferred future taxes. We need to be careful about a shock adjustment to the economy, but it is always better for the economy to leave $1B in the hands of consumers and business than for the govt to confiscate it to spend on pet projects.

Basically what I would argue is that while a meat-cleaver approach to cut $1T would negatively impact the economy, a calculated approach would offset a significant amount of the impact by cutting waste and inefficiency. I think there's easily more than 20% waste and inefficiency, which would be something like $750B. Getting the economy healthy and getting back to a historical 18.2% revenue as a % of GDP would easily close the remainder of the gap.

I don't know, you think there's $750 billion in waste and inefficiency? There are Republicans on the deficit commission...why can't they find it? Not even Rand Paul had that much in his proposed budget. I hope there's that much because it should make deficit reduction easy. I'm just skeptical because we have all kinds of budget experts working on this problem and they don't seem to find that much waste and inefficiency. Maybe you're right. It sounds good and I hope you're right but I have my doubts. The federal government is wasteful but I'm not sure it wastes 20% of its tax receipts. Rob Portman is on the deficit commission and if there's that much he ought to be able to find it.

But, as to your assertions that it's always better for GDP to leave money in the hands of private citizens and that deficit spending is always offset by future taxes...

I disagree that it is Always better to leave $1B in the hands of consumers than for the government to spend it. MOST of the time this is true but in a situation like right now where interest rates are at the zero bound and monetary policy isn't working like it normally would because consumers and businesses just hoard the $1B, instead of spend it, the government can spend and will do so more effectively than private consumers. Money has to be spent for it to do any good, whether it's a corporation you taking the cash in exchange for stock and investing it, a bank lending money from your Savings Account to a new business or you spending it yourself in the Apple Store.

I don't think we should increase taxes on the wealthy, but decreasing them and leaving more money in their pockets (as in the 9-9-9 plan for example) will not likely boost private spending in our current slump. They already have everything at Apple, the banks they put their money in don't have customers to lend it to, and the corporations they buy stock in don't have customers to enter contracts with. If they purchase stock with it, there's still no new demand for that companies goods and services so there's really no reason to see why that will lead to capital investment or hiring it seems to me. Raising taxes on the wealthy and spending it, although the money will actually be spent instead of saved, won't be good though either because there's dead weight loss so it would make more sense for the government to borrow at the historically low rates if it wants to be the one demanding goods and services.

For instance, the AJA is projected increase growth by 1.25% in the short term and we can borrow at rates lower than that for two years. BHO wants to pay for it with a tax on millionaires but it'd be more prudent to borrow it so there's no dead weight loss.

In these rare instances like our current situation, the government can spend and be the one making contracts, filling orders, etc. without taxing individuals and it could pay off if we did it right. For instance, we got 651,000 miles of highway, 8,000 parks and a beautiful bridge during the New Deal. http://www.slate.com/articles/news_and_politics/history_lesson/2011/10/new_deal_accomplishments_do_conservatives_who_attack_the_new_dea.html

But of course, the New Deal was too small and thus the real deficit spending was WWII which increased GDP by 19% in 1941 and lowered the unemployment rate from 20% down to 2%.

Thus, if you can increase growth and productive employment like that, deficit spending also doesn't have to mean deferred taxes down the road. FDR's massive tax increases (which were a mistake) didn't pay down the WWII debt, it was economic growth. Even with increasing the debt to 120% of GDP, the debt was cut in half in 10 years despite bringing in around the historical average of tax receipts. And government doesn't have to stay big indefinitely and history says it won't. the WPA was disassembled afterward and non-defense discretionary federal spending dropped a lot.

Also, because we have our own currency (unlike Greece), there is always the possibility of inflation to mitigate debt which would also mean that deficits now don't mean higher taxes down the road. Ronald Reagan ran deficits in the 80's but was able to "prove deficits don't matter" and not raise taxes immensely because we had much higher inflation than we do now. (No CB, the Fed isn't hiding true inflation from you...Headline tracks Core as I've linked before).

More important than anything, taxation or deficit spending, is we could use a little inflation like we had in the 80's to eliminate the real burdens of the debt strapping our homeowners and our college graduates, that's preventing them from spending money on goods and services. I mean wages are steadly and slowly dropping still despite not being in a recession. That trend has to stop more than anything else.

This is what Romney's economic adviser advocates (at least he used to be before he had to lament inflation once he teamed up with Romney) http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auyuQlA1lRV8

BoatShoes;933226 wrote:In order to balance the budget under 9-9-9, we would have to cut $1.5 trillion in federal outlays, an amount equal to social security and the defense budget, combined. /

PURE POPPYCOCK. This is what happens when spending is not put into context. During the 3 years before the meltdown average outlays were $2.618 trillion. The average for the years '08,'09,'10 vaulted to $3.406 trillion, a massive 30% increase in spending, and obviously included all the tarp, stimulus etc..etc... which should have been 'one-time'. To simply roll back spending to where we were a few short years ago should not be difficult at all (except in D.C. land). Thus if we went back $2.6 trillion in spending (which means not even implementing ANY REAL CUTS) we would be within $400 billion of revenues (and probably even less in '11). Thus the media's claim, which you are trumpeting, is total bull#@$%, as they continue to completely disregard the incredible and unparallelled increase in spending in just the last 3 years. And that disregard has now completely skewed the baseline for the argument and is a disservice to all. It is amazing that so few in the media refuse to acknowledge these historic spending increases.

QuakerOats;933413 wrote: And that disregard has now completely skewed the baseline for the argument and is a disservice to all. It is amazing that so few in the media refuse to acknowledge these historic spending increases.

Amen! Of course the media loves sensationalism and a good class warfare debate. All about the ratings. Same reason Obama is constantly attacking the rich and Wall Street. It plays on the irrational fears and hopes of the majority of voters, and it distracts them from the real fundamental problem.

BoatShoes;933363 wrote:I don't know, you think there's $750 billion in waste and inefficiency?

I do. As mentioned, there's been a MASSIVE increase in just the last few years. Some of that is SS & medicare, but it's mostly fat and pork. On top of that, the Washington machine HAS NEVER been held accountable to real forced efficiencies. Their budget "challenges" consist primarily of dealing with marginal YoY increases. I've seen businesses take out 5% of cost year after year after year. It's a mentality and cultural shift that has to happen. I'd bet money you could slash budgets 5% across the board and no one would miss it. 10% might actually START to force some tough decisions, before you even get into asking the questions of how can we operate more cheaply and efficiently?

FICA is still the big one. A 15% cut in benefits combined with a 15% increase on the payroll tax (=1% more for you and your employer) patches up a huge hole in the budget and makes those programs solvent for decades more. The pain would be shared for all. But no one will touch this because, of course, everyone favors tax increases and spending cuts as long as its someone else paying for it.

gut;933434 wrote:On top of that, the Washington machine HAS NEVER been held accountable to real forced efficiencies. Their budget "challenges" consist primarily of dealing with marginal YoY increases. I've seen businesses take out 5% of cost year after year after year. It's a mentality and cultural shift that has to happen. I'd bet money you could slash budgets 5% across the board and no one would miss it. 10% might actually START to force some tough decisions, before you even get into asking the questions of how can we operate more cheaply and efficiently?

FICA is still the big one. A 15% cut in benefits combined with a 15% increase on the payroll tax (=1% more for you and your employer) patches up a huge hole in the budget and makes those programs solvent for decades more. The pain would be shared for all. But no one will touch this because, of course, everyone favors tax increases and spending cuts as long as its someone else paying for it.

This.

Every year my company's financial geniuses come to the department heads and demand at least 5% efficiency gains either through budget cuts or process improvements. If we don't we have some serious "splainin'" to do and could even lose our jobs.

For the gubmint it's always a matter of "spend it now so we can spend more later" proposition. If we ran our business like that we'd be closing down operations PDQ.

Just another reason my undies get in a bunch when politicians and bureaucrats "seek to raise revenues" because that usually means more spending upon established inefficiencies.

Blows my mind.

believer;934192 wrote: Just another reason my undies get in a bunch when politicians and bureaucrats "seek to raise revenues" because that usually means more spending upon established inefficiencies.

And the idea to exit bad initiatives is more than a completely foreign concept in Washington. The de-facto response to an ineffective initiative is to throw MORE money at the problem. The inmates run the asylum - if someone at the top isn't saying "this is a failure, we're ending it" the person running the program is NEVER going to put themselves out of a job proposing to write-off said failure.

http://online.wsj.com/article/SB10001424052970204002304576632794287744706.html?mod=WSJ_hpp_PhotosModule_1

I Wear Pants;934732 wrote:http://online.wsj.com/article/SB10001424052970204002304576632794287744706.html?mod=WSJ_hpp_PhotosModule_1

The mob IS Rome.

No pictures of protests in China? Oh, wait...Kind of ironic though, no?

I Wear Pants;934732 wrote:http://online.wsj.com/article/SB10001424052970204002304576632794287744706.html?mod=WSJ_hpp_PhotosModule_1

I would bet cold, hard cash that the same anarchists who like to do this sort of thing at any opportunity (especially G8 summits) make up a decent portion of those mobs. Throw in the communists and hardcore socialists, and that should pretty much give you the makeup of the European groups.

Writerbuckeye;935127 wrote:I would bet cold, hard cash that the same anarchists who like to do this sort of thing at any opportunity (especially G8 summits) make up a decent portion of those mobs. Throw in the communists and hardcore socialists, and that should pretty much give you the makeup of the European groups.

Now what would you say if I stereotyped the Tea Party like you just did here?

I Wear Pants;935171 wrote:Now what would you say if I stereotyped the Tea Party like you just did here?

You mean like the "gun-toting, mean-spirited narrow-minded ignorant racist redneck" comments we were hearing from the left during the peak of the Tea Party gatherings?

If these "freedom fighters" really wanted to protest corporate intrusion into politics, they would be protesting and marching right in front of the White House. Obama is the biggest corporate stooge we've ever had, he's received more money from corporations than any other President. Of course, these idiots protesting get their ideas from MSN and are too stupid to realize that the very President they idolize is the personification of what they claim to hate.

tk421;935310 wrote:If these "freedom fighters" really wanted to protest corporate intrusion into politics, they would be protesting and marching right in front of the White House. Obama is the biggest corporate stooge we've ever had, he's received more money from corporations than any other President. Of course, these idiots protesting get their ideas from MSN and are too stupid to realize that the very President they idolize is the personification of what they claim to hate.

blasphemy! he is the chosen one.

tk421;935310 wrote:If these "freedom fighters" really wanted to protest corporate intrusion into politics, they would be protesting and marching right in front of the White House. Obama is the biggest corporate stooge we've ever had, he's received more money from corporations than any other President. Of course, these idiots protesting get their ideas from MSN and are too stupid to realize that the very President they idolize is the personification of what they claim to hate.

Obama should know better, but he, like many of his predecessors, is the product of a corrupt system that allows him to do this.

O-Trap;935343 wrote:Obama should know better, but he, like many of his predecessors, is the product of a corrupt system that allows him to do this.

Uh huh. Informed voters knew this all along, but the blind/ignorant/Kool-Aid sycophants drank from the:
"most transparent administration of all time" cup
"Hope and Change" mantra
"Change we can believe in" lie
"We are the ones we've been waiting for" self-annointing blasphemy.

The yoke around his neck is that he said these things and he is likely the most corrupt President of my lifetime. You can't pay-off your supporters, unions, Solyndra-owners, etc. in the political dark alley when you are paying them with taxpayer money.

I Wear Pants;935171 wrote:Now what would you say if I stereotyped the Tea Party like you just did here?

I'd say you'd need some proof. You published a photo of a burning car with an angry mob. I didn't pull my judgment out of my ass like the media (and other leftists) did regarding the Tea Party when they first started.

BGFalcons82;935364 wrote:The yoke around his neck is that he said these things and he is likely the most corrupt President of my lifetime. You can't pay-off your supporters, unions, Solyndra-owners, etc. in the political dark alley when you are paying them with taxpayer money.

True. That $800 billion Porkulus Sammich will come home to roost.

believer;935451 wrote:True. That $800 billion Porkulus Sammich will come home to roost.

that's giving too much credit to the 47%....they love them some tasty, free pork.

gut;935460 wrote:that's giving too much credit to the 47%....they love them some tasty, free pork.

Served up with some slaw and a side of progressive tax structure.

I've got a question. If there are no more corporations, where will everyone work? For the government, is that what we will become?

tk421;935589 wrote:I've got a question. If there are no more corporations, where will everyone work? For the government, is that what we will become?

Karl Marx is smiling.

believer;935260 wrote:You mean like the "gun-toting, mean-spirited narrow-minded ignorant racist redneck" comments we were hearing from the left during the peak of the Tea Party gatherings?

If that was stupid to do then why would you do the same thing and stereotype these people?

I thought the Democrats were the party of tolerance. Why would they call the Tea Party members stuff like that if they are the party of tolerance?

Writerbuckeye;935368 wrote:I'd say you'd need some proof. You published a photo of a burning car with an angry mob. I didn't pull my judgment out of my ass like the media (and other leftists) did regarding the Tea Party when they first started.

What I heard about the Tea Party was not that they were a mob or rioting. But that they were incredibly conservative in their views. Which is absolutely true.