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-   -   OK YOU balance the United States Federal Budget (https://www.pokecommunity.com/showthread.php?t=237030)

Netto Azure November 19th, 2010 1:49 PM

OK YOU balance the United States Federal Budget
 

Quote:

Imagine that Democrats and Republicans somehow came together and agreed on a grand bargain to cut the deficit.

They decided to cut the pay of federal workers over the next several years, close military bases, reduce foreign aid, eliminate earmarks, expand the payroll tax and cut Social Security benefits for high earners, as the chairmen of a bipartisan commission recommended last week.

Democrats also accepted the plan from John Boehner, the presumptive House speaker, to make large cuts to social programs. Republicans accepted President Obama’s proposal to let the Bush tax cuts expire on income above $250,000.

If the two parties managed to do all of this, how much of the country’s long-term deficit would they eliminate?

About one-third of it.
Well the whole taxation debate brings us to the other side of the coin. The National Government's Budget. How should government spend it's revenue? Should it keep it's budget balanced or go into debt when necessary?

In terms of the US Budget, economists do point out that if we truly do want to "balance the budget" we have to do one (or more) of 4 things:

1. Cut Medicare Spending
Well, I'm willing to do this. But everytime people actually do try to propose certain things like price negotiation (preferably controls) of prescription drugs, standardized payments for procedures or comparative analysis enforcement you get decried as a.) A Socialist or b.) Wanting to "kill grandma."

2. Cut Social Security

3. Cut Defense Spending
Well at least the United Kingdom's Conservative-Lib Dem coalition is showing some guts over this.

4. Raise Taxes
Either by ending the Bush-era Tax cuts or instituting a VAT. Etc. I mean we give tax cuts but are not willing to pay for it, we just simply borrow the money for that tax cut.

Well none of those are popular at all. And yet it must be implemented if one really wants a budget balanced instead of electioneering.

But even if we do stop all Non-#'s 1-3 spending that wouldn't balance the budget.


It's just that we as a country decided that the federal government leave certain aspects of spending to the states (Which is why there are state taxes) such as most spending on education, police-force etc.

There's also a Deficit Balancing interactive program in the New York Times:
Twas able to balance the budget with a:

87% Tax Increase
Return the estate tax to Clinton-era levels
Return Investment Tax rates to Clinton-era levels
Allow expiration of Bush Era Tax Cuts for income above $250,000 a year
Millionaire's tax on income above $1 million
Eliminate loopholes (Bowles-Simpson Plan), but keep taxes slightly higher
Reduce mortgage deduction and others for high-income households
National sales tax
Carbon tax
Bank Tax

13% Spending Cuts
Eliminate farm subsidies
Cut 250,000 government contractors
Reduce nuclear arsenal and space spending
Enact medical malpractice reform
Use an alternate measure for inflation (Social Security)

Originally it was:

80% Tax Increase
20% Spending cut

But since that had a $150+ Billion surplus over the long term projections I was able to restore most defense spending and Social Security cuts.

Call me tax & spend but our tax levels are the lowest they've been for decades.

Livewire November 19th, 2010 2:00 PM

3. Cut Defense Spending

4. Raise Taxes


First off, these should happen, then consider Social Security and other entitlement program cuts. Getting out of Afghanistan/Iraq, cutting Nuclear arsenals (Which Obama has already worked on) and finally repealing the Bush Era tax cuts would go a long way.

But I concur with your proposed budget. Like seriously, mail that to Washington.

Elite Overlord LeSabre™ November 19th, 2010 2:32 PM

We definitely need to cut our defense spending, and in that vein, also cut down on foreign disaster relief. Not only is it a huge money pit for our nation, but it's also giving other nations the impression that we need to be meddling in everyone's business.We can help alleviate both of these if we begin pulling out of the Middle East and cut down on disaster aid that we send outside of the country.

Then we should focus on raising taxes, with re-aligned tax brackets to make sure the wealthy really do pay more in taxes than those who earn less.

Netto Azure November 19th, 2010 5:09 PM

Yeah "Simplifying the tax code" sounds good but eliminating tax brackets did create such an imbalance in the progressive income tax system. It went from around 20 to 6 so apparently my Gov't teacher is paying the same percentage in taxes as Governor Schwarzenegger!

FreakyLocz14 November 19th, 2010 6:10 PM

I support all your ideas except for Number 4. We need taxes low to stimulate the economy in this recession by giving consumers more spending money.

Melody November 19th, 2010 6:30 PM

Personally I think we wouldn't be considered fools at this point if we moved out of the middle east and called all our troops abroad on home. Then we line up all our ducks and cut defensive spending. Next thing on the chipping block is Social Security. Cut the Social Security spending way down.

Next thing on the chopping block is the tax cuts. We need to severely modify the tax breaks that Bush implemented. Give everyone with an income of less than 150k/yr a tax cut...the poor need not be taxed, only those doing well enough to afford a tax.

Of course this ain't always fair to small business either. So we give companies with less than 25 employees and make less than 1 million dollars a year in total a small tax break too.

Of course, giving the poor and the smallest businesses a break isn't gonna be cheap. So we implement a nationwide 1-3% sales tax. This adds on to the state/local sales taxes and so the cities and states must manage collection of this tax and ensure it gets paid up to the Fed. (IRS?)

This sales tax can be somewhat variable...Food and essentials need not be taxed, but other things can be taxed, and a higher sales tax can be charged on things such as tobacco products and alcoholic beverages. Additionally a higher sales tax can be charged on items which are commodities.

I know that taxes are a hard pill to swallow, but I think America must do so or face it's own slow, agonizing, untimely death. :<

Livewire November 19th, 2010 6:44 PM

Quote:

Originally Posted by FreakyLocz14 (Post 6297366)
I support all your ideas except for Number 4. We need taxes low to stimulate the economy in this recession by giving consumers more spending money.

If that were true, the recession wouldn't be so bad. When we all got the Stimulus checks, many people saved it instead of using it to boost the economy, plus it starves the Federal Government of revenue. No tax revenue means the government gets no spending money, which accentuates the recession and the national debt.

FreakyLocz14 November 19th, 2010 7:10 PM

Quote:

Originally Posted by Live_Wire466 (Post 6297419)


If that were true, the recession wouldn't be so bad. When we all got the Stimulus checks, many people saved it instead of using it to boost the economy, plus it starves the Federal Government of revenue. No tax revenue means the government gets no spending money, which accentuates the recession and the national debt.

The government doesn't need more revenue; the private sector does.
Most American businesses are privately owned and operated, so consumers need more money to spend. Stimulus checks are only effective when employment goes back up. If people are unemployed, of course they'll save the money.

donavannj November 19th, 2010 7:28 PM

I am very partial to 3 as the most necessary, and 4 the second most. Oh, and subsidies to large-scale commercial farmers.

Quote:

Originally Posted by FreakyLocz14 (Post 6297457)
The government doesn't need more revenue; the private sector does.
Most American businesses are privately owned and operated, so consumers need more money to spend. Stimulus checks are only effective when employment goes back up. If people are unemployed, of course they'll save the money.

Actually, the private sector's largely sitting on profits and holding off on hiring. That's a core reason why our recovery has been slow the last 6 months.

NarutoActor November 19th, 2010 7:35 PM

Less taxes to put more money in the hands of the citizens, which creates a pure stimulation of the economy. Also free market principles go a long way, and less government projects that just waist money.

FreakyLocz14 November 19th, 2010 7:40 PM

Quote:

Originally Posted by donavannj (Post 6297482)
I am very partial to 3 as the most necessary, and 4 the second most. Oh, and subsidies to large-scale commercial farmers.



Actually, the private sector's largely sitting on profits and holding off on hiring. That's a core reason why our recovery has been slow the last 6 months.

The private sector will begin hiring when it's business activity increases and it needs more employees to keep up. The good ol' Holiday season should help out with that.

Livewire November 19th, 2010 9:27 PM

Quote:

Originally Posted by NarutoActor (Post 6297493)
Less taxes to put more money in the hands of the citizens, which creates a pure stimulation of the economy. Also free market principles go a long way, and less government projects that just waist money.

If that were true, then there wouldn't be a recession.


Quote:

Originally Posted by FreakyLocz14 (Post 6297457)
The government doesn't need more revenue; the private sector does.
Most American businesses are privately owned and operated, so consumers need more money to spend. Stimulus checks are only effective when employment goes back up. If people are unemployed, of course they'll save the money.

Exxon Mobil posted an 11.7 Billion dollar profit in Q1 of 2008. The money is there.

Netto Azure November 19th, 2010 9:33 PM

Most of the so called "growth" over the past few decades has been fueled by consumption right? How was that consumption funded? Credit and debt. And we don't want that right?

And with wages remaining flat (when adjusted to inflation) and the job market not necessarily adjusted for the former manufacturing worker (re-training is difficult to obtain in the US :/) I doubt we'll be out of the recession without another bubble. 8(

Rich Boy Rob November 20th, 2010 3:27 AM

3. Cut Defense Spending

4. Raise Taxes

Now I don't know too much about the US's budget problems, but these 2 seem to be fairly obvious to me.

FreakyLocz14 November 20th, 2010 10:12 AM

Quote:

Originally Posted by Netto Azure (Post 6297722)
Most of the so called "growth" over the past few decades has been fueled by consumption right? How was that consumption funded? Credit and debt. And we don't want that right?

And with wages remaining flat (when adjusted to inflation) and the job market not necessarily adjusted for the former manufacturing worker (re-training is difficult to obtain in the US :/) I doubt we'll be out of the recession without another bubble. 8(

Recessions are an unfortunate reality of economics. We'll just have to let it runs it course.

Elite Overlord LeSabre™ November 20th, 2010 11:47 AM

Another suggestion would be to force politicians and other high-paid government officials to take significant pay cuts and pay them based on how much they actually do (if they routinely skip meetings/sessions, dock them pay).

The same could be said for executives in the private sector, forcing them to give up the hefty bonuses in order to increase wages for employees.


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