Today I heard an interview with the US Comptroller General David Walker.

I knew our national debt was in the trillions but I had thought it was in the 2-3 trillion dollar range

I wasn't even close.

Question for debate.

1) Is this level of debt survivable, given that the baby boomers are getting ready to bankrupt SSI?

2) What steps need to be taken before the US is "foreclosed" and given a junk bond rating?

Not to be a pill here - but do you have a link that backs up that number? A transcript of the interview? I can't find anything near that number. Are you sure you're not getting your number mixed up? I have read a few article that state that the deficit will reach 9 trillion or 54% of the GDP.

The number I keep finding is $9,187,584,466,089.71

Whew! I'm glad we're not in financial trouble!


I found one interview here, and while it doesn't mention $54 trillion, it is clear that Walker is talking about the future in some respect - the thrust of his warnings is that while we won't really feel the deficit right now, things are going to be untenable if we don't change.

Maybe I am using the wrong verbage total national debt.



http://www.gao.gov/cghome/d08371cg.pdf

Well here's the thing about 54 Trillion dollars... it's make believe. It could happen, absolutely, no question. However there's as good a chance that it won't so it makes debating this a lot like debating the civilian death count in Iraq. If you extrapolate the numbers to their nth degree and then want to debate them it skews the debate horribly. It also forces the questioning of the under pinnings of the debate because the very premise is based on the fantastic.

So I'm going to throw away the number 54 trillion and answer your questions:

1) Is this level of debt survivable, given that the baby boomers are getting ready to bankrupt SSI?
It depends greatly on how the US handles SSI going forward. If it does nothing it is very likely that it will bankrupt. No one ever really expected it to last forever or for it to be paying out the way it does. That's another debate though.

2) What steps need to be taken before the US is "foreclosed" and given a junk bond rating?
I think that it's easier for the US Gov to actually hurt the economy with "steps" than it is to help it. One of the best things the US Gov can do at any time for an economy is leave it alone and let it do what it is going to do. The truth is that you can't control the economy anymore than you can control water - it eventually goes where it is going to go no matter what.


**

With that said if you buy into the number above then all of this looks terrifying, if you don't this looks like another Chicken Little moment.

The unfunded future burden of Social Security is currently estimated at $11 trillion. The unfunded future cost of Medicare is around $32 trillion. Those numbers right there should tell you how important reform of these programs is.

These programs are a money transfer from current workers to the wealthiest. The elderly are what are deemed income poor, but wealth rich, which makes sense.

1.) Certainly no. As has been established, the forty-four trillion baby-boomers will leave to the rest of us coupled with however much the government lands us in between now and then is break-neck.

2.) The free market is a beautiful thing and if it's left alone for awhile, it always reaches equilibrium. Ceilings always get broken and floors are always surpassed, so that eliminates two big powers of the Congress in fiscal matters. Naturally the panic button needs to be hit, but it'll take reinvention of the current system to an epic proportion. If programs are established to get people out of the systems [be it Medicare, etc.], that'll certainly help, but it won't begin to solve the problem.

No, the national debt was about 5.7 trillion before the first time Congress had to raise the ceiling for the national debt under the Bush Administration - something it has had to do five times since Bush took office. At the rate it's climbing, it will have almost doubled during Bush's presidency. This is, of course to the amount it went up during the Clinton Administration... from 4.5 to 5.7... And Clinton actually started paying it down. The YoY increase was actually negative his last term. Thank god for Bush's tax cuts. .

On what basis do you think these numbers won't 'happen'? These are actual estimated future obligations for current programs. Our government certainly has no track record to point to for cutting such programs, so the only real reason to assume they aren't going to happen is that they are so absolutely horrendously large that we can't possibly pay them and will be forced to cut them...which is kinda a backwards argument, given that the whole point is that these are indeed so large.



Again, what is there to not buy into about these numbers. Keep in mind that it is precisely the 'chicken little' perception that allows these debts to continue to exist...until that goes away, nobody is going to do anything to fix it. Why fix it when its easier to simply wish it away?


1) Is this level of debt survivable, given that the baby boomers are getting ready to bankrupt SSI?

I don't like the term 'survivable'. Almost any financial disaster is 'survivable'. The government can alway come it with money...if it needs to it can simply print it. The question is how much damage would having to meet these obligations bring. I don't think there's any question it would be absolutely disastrous. There are several things they could do, but the scope of problem makes them all horrendous. The government will have to either massively raise taxes or massively cut programs...neither of which will be good for the economy on the scale they would have to be done. So, it will lead to a loooooonnnnggg period of economic hardship, and a complete upheaval of our government. The sad thing is that these were known enough in advance so that they could have been addressed in small increments spread over many years. This is what our social security surplus tax was supposed to do. But Congress can't keep its hands off any money it has access to, so that is gone...we've spent it every year we've collected it. It's just a great big stack of IOU's...which isn't really a good way to pay off this even bigger stack of IOU's. Anyway, so we've now wasted this 30+ year fund we were building to at least deal with the SS problem. Further, we're not doing anything currently to address it. So, its clear we're going to wait until the problem gets REALLY big, and then scramble unfunded obligations on top of it that dwarf the SS problem (Medicare/Medicaid/Prescription Drugs). There's really only one explanation for this...we're complete and total idiots.

2) What steps need to be taken before the US is "foreclosed" and given a junk bond rating?

Practice Fiscal Sanity. So simple, yet so unachievable. Our government should NEVER pass ANY program that isn't FUNDED, except in times of national emergency (War). As programs grow and needs increase, then FUNDS should be allocate to them, or the programs should be cut to meet available funding. NOTE: Debt is NOT funding. This would be like saying getting a mortgage is paying for a house. No...paying off the mortgage is paying for a house. Our Congress forgets that nasty second part. This is why we need to stop voting for people that keep spending as if there's a money tree out there whose fruit will spoil if they don't get rid of it. Then, we need to start voting for people who actually recognize the problem and will do something about it. Note that NONE of the current Presidential candidates is really saying anything at all about these issues. Neither is anyone currently in Congress. Yet we'll probably vote most of them back in. We're nothing if not consistent.

It wasn't the tax cuts, we have more money going into Washington than ever before. It was being attacked on 9/11 that has caused the increase in spending, and the subsequent wars. Nice little dance you have there, though.


I am curious how more tax-funded programs being established is going to solve our national debt?

Perhaps I should have clarified: Programs like the Red Cross, Salvation Army, United Way, etc. Programs that are not necessarily government-controlled or fully-funded; organizations that can sustain and help put people on the right track if they require.

Um, no.

http://www.reason.com/news/show/34112.html

The federal pie has two parts, each accounting for about 50 percent of outlays. "Mandatory spending" includes entitlement programs such as Medicare and student loans that are provided by law rather than by annual appropriations. Then there is discretionary spending, comprising most defense spending, homeland security, and programs such as farm subsidies and education. Discretionary spending is what the president and Congress decide to spend each year through appropriations bills. Because discretionary spending can theoretically be zeroed out each year, it is generally regarded as the clearest indicator of whether a president and Congress are serious about reducing government spending. Some major entitlement programs—most notably Social Security—are "off-budget," meaning they are not accounted for in either the mandatory or discretionary figures.

and:

Total real discretionary outlays will increase about 35.8 percent under Bush (FY2001-06) while they increased by 25.2 percent under LBJ (FY1964-69) and 11.9 percent under Reagan (FY1981-86). By contrast, they decreased by 16.5 under Nixon (FY1969-74) and by 8.2 percent under Clinton (FY1993-98). Comparing Bush to his predecessors is instructive. Bush and Reagan both substantially increased defense spending (by 44.5 and 34.8 percent respectively). However, Reagan cut real nondefense discretionary outlays by 11.1 percent while Bush increased them by 27.9 percent. Clinton and Nixon both raised nondefense spending (by 1.9 percent and 23.1 respectively), but they both cut defense spending substantially (by 16.8 and 32.2 percent).

Bush and LBJ alone massively increased defense and nondefense spending. Perhaps not coincidentally, Bush and LBJ also shared control of the federal purse with congressional majorities from their own political parties. Which only makes Bush's performance more troubling. Like a lax parent who can't or won't discipline his self-centered toddler, he has exercised virtually no control whatsoever over Congress. In the wake of massive new funding for the Gulf Coast in the wake of Hurricane Katrina, Bush did timidly suggest that some of the new money be matched by reductions in pork projects embedded in the just-passed transportation bill. The Republican response to such efforts is summed up by Alaska Rep. Don Young's reply to critics of a $223 million "bridge to nowhere" in Ketchikan. Proponents of budgetary "offsets" can "kiss my ear," Young told the Fairbanks Daily News-Miner, adding that paying for Katrina-related measures by trimming transportation pork is "the dumbest thing I've ever heard."

It's no surprise that Reagan, who cut nondefense spending significantly, emerges as the only recent president to have sharply curtailed government outlays during his tenure. Clinton's performance may be a little more surprising: During his first five years, real nondefense spending increased by less than 2 percent. Interestingly, nondefense spending declined during his first two years and only started its upward drift in his third fiscal year—when the Republicans took over Congress.

So Scubatim- Bush likes to argue it is "all about defense"- well, that is a bald faced lie.

When confronted by its spendthrift ways, the Bush administration argues that much of the increase in nondefense spending stems from higher homeland security spending. It's true that most homeland security spending is tallied under nondefense discretionary spending. Yet when homeland security spending is separated out, the increase in discretionary spending is still huge: 36 percent on Bush's watch.

So only a part of recent increases are related to 9/11. And that's leaving aside the real question of whether even homeland security money—which has gone to pay for items such as Kevlar vests for police dogs in Columbus, Ohio—is being spent wisely. A substantial portion of Bush's increase in discretionary spending stems from new domestic spending initiatives. For a ready example, look no further than the Department of Education, one of three departments targeted for elimination by Republicans in 1994, when Tom DeLay and his budget-cutting friends first took control of Congress. In the last five years, Education's budget has grown by a stunning 79.9 percent.

With that said, I can agree with you. I am a firm believer that private organizations can do so much better taking care of the poor and providing welfare than the government can.


And we see where that has gotten us....Care to compare test results between various countries? But that is for another thread.

Well Scuba- I have mixed feelings on this- if you can compare bad programs and bad goverment spending to good goverment spending- well, we probably have a debate. But idiocy based on a lie, like the NCLB law- well, that is just bad spending. When talking about education in the US, and our expenditures- you are not really looking at a spending problem, but a societal ill ( I can't think of what else to call it)- it is not the education system that is to blame, but the parents- but like you said- another subject.

But you kinda let ol' GW off the hook on his spending, don't ya think?

I have seen privatization, and know it is very bad in certain cases, corrupt and a bad way to keep the public safe. I believe in regards to infrastructure projects- you bet- privatization is the way to go, no doubt about it. It works and is obviously a good thing, in most cases (corruption is still a major issue) - but the private prison system, well, that is a bust, big time. Many times, there is rampant corruption in privatization- the people writing the terms for bidding often tailor it so that thier campaign supporters, or cronies, get the big money, and then we get substandard work. A classic case is when we "privatized" the kitchen in my hospital- it didn't save a dime, and there was only one bidder.

We just had one lawmaker go to jail for accepting bribes offered from a private prison entity, and I believe that in "service" industries that are doing work through contracts with the goverment are completley and utterly corrupt, and don't do a better job of serving the public. We have been "privatizing" for over 20 years in our state, being the leading edge of this movement, as a big libertarian and conservative state, and are starting to move away from it, because it just didn't work out so well.

I think a hard look needs to be the first order of business when thinking about privatizing, with some serious checks and balances, and a real hard look if a profit motive is going to be a good thing for certain things-

for instance- you want your police force privatized? Cops working for very low wages, protecting only those that can afford the service, and "cost cutting" every corner so the firm can make a profit? This has happened in more service industries, many of them dealing with public safety, than I can count with my shoes off.

cheaper is not always safer or better. Shopping at Wal-mart should educate some people on this subject.

Which demonstrates that the editors of reason magazine are way off base. Defense spending is one of the few items in our budget that is indeed required spending. It is entitlement and all the other programs that are completely discretionary. Where in the Constitution, for example, does it dictate that the federal government is responsible for providing for Social Security? Ain't there. It is the growth in entitlements and other programs that dictates how fiscally responsible a particular administration or Congress has been. (Note: this is NOT a defense of the Bush administration...with the Prescription Drug program they would woefully fail this test as well). It is exactly the mindset that all these 'entitlement' programs are mandatory that has led to the fiscal crisis being discussed in this thread. All of the $54 trillion was completely discretionary---none of the programs causing it were something the government was mandated to provide. Defense, on the other hand, is one of the obligations of the federal government.

For anyone that cares to dispute this, please don't bring up 'promote the general welfare' without also discussing how creating a $54 trillion liability, and the unavoidable massive economic upheaval, promotes the general welfare.

Uh, it wasn't really my point that the consitution provides for social security or whatever- the point was that GW is the biggest spender in history- and even without the Iraq fiasco- he still is the biggest in history, not having to do anything with the security of the nation.

Otherwise, I pretty much agree. My bigget problem with the rest, is how do we get rid of it, or scale it back, at the least? I mean, how do we wean folks off this system, without destroying the country? How can we even touch social security, when that is a #1 issue of the "super voter" senior citizens? I mean, the first politician that tries to really fix this will be out of a job- real quick.

It is a shame that we have begun to see social security as = to retirement- rather than for what it was intended- INSURANCE against disaster- you have your retirement, and if we have some sort of economic or physical calamity that wipes out your retirement- our old folks don't have to die from starvation and exposure.

I feel that most of the time, the ideologues on the right- the republicans that have held office since Reagan, have not really been interested in fixing any of this, but rather, getting pork projects for constituents and making bleating noises about the problem, with no serious attempt to fix the problem.

Really? More money going in? How exactly does that work when the national debt has almost doubled?

And the war hasn't cost a trillion dollars yet, so... how does just over $600 billion dollars in spending between 2001 and 2008 on the War on Terror (including the war in Iraq) translate into an increase of 4 trillion dollars in the national debt? Is there some bizarre 6:1 national debt to WoT spending ratio that I'm unaware of? Every dollar spent on the WoT adds roughly six to seven dollars to the national debt? What fuzzy maths are you using to arrive at that conclusion?

Scubatim- reading entspeak's post, and your own, is where we get the term "borrow and spend republican"- the only thing worse than a "tax and spend" democrat.

These aren't mutually exclusive - ask my wife. I make way more than I ever did (so we're taking in more) but her spending has gone up in a proportion far exceeding the increase in my pay. Seriously - it's totally possible.

Chart Image

1) Is this level of debt survivable, given that the baby boomers are getting ready to bankrupt SSI?

There's a lot of history here that gets overlooked in all the stupid Reagan vs. Bush vs. Clinton rhetoric. If you look at the graph above there's a huge drop in national debt after WWII, especially during the Eisenhower, Kennedy, and Johnson administrations. Unfortunately during the 60's (Great Society) the government started expanding. New programs were added to the already fiscally unsound Social Security entitlement. This trend continued with Nixon and taxes increased as a result. Larger government meant higher taxes and the economy suffered. Since Reagan was elected our tax rates have pretty much stayed the same. Clinton and Bush have tinkered a bit with the brackets, but not quite like Reagan did in the early 80's.

The people of the United States are faced with some decision that I'm not sure they're smart enough to understand. A government big enough to give us everything we want is strong enough to take everything we have.

Here are our options:

• Raise taxes to pay down the debt, but this eventually lead to the economic problems we had in the 70's. It would be an ugly economic scenario.
• Stay the present course and go bankrupt. The current tax rates are probably the most economically efficient but we have too many financial obligations to stay on this road.
• Really reduce the size of the federal government. This is the least likely solution for politicians and Americans to embrace.

2) What steps need to be taken before the US is "foreclosed" and given a junk bond rating?

I go with the unpopular option. We need to think seriously about what the government can and can't do. We can't afford SS, Medicare, and universal health care. We have the FBI, CIA, and Homeland Security. Couldn't we consolidate that mess? Look at all the government agencies? Do we need an entire agency devoted to the Interior? Does the Vice President really need a chief of staff? The VP doesn't do anything.

All of these agencies are built on self preservation and it's going to take some political willpower that I don't see in either party. Unfortunately most liberals believe we should just create more government, and raise the taxes to pay for it. Conservatives just want to cut taxes and blame liberals.

Uh, Nemov, no "conservative" leader has cut goverment. As posted above, Clinton was the only "fiscal conservative" we have ever had in office, period. Well, maybe Calvin Coolidge.

Your comparison makes no sense. A closer analogy would be if you claimed that you got a pay cut and said that you had more money coming in than before.

Are we married to the same woman?

Huh? What are you referring to from my post? If you're using the graph that I posted to define "fiscal conservative" you'll have to add Kennedy, Johnson, Nixon, and Carter to the list. I don't see how your response is either relevant to what I wrote or even constructive.

Oh, sorry, I did misunderstand your post, mostly the last sentence- but you clarified with your last post, and I agree.

Laurence J. Kotlikoff is a professor of economics at Boston University and a research associate at the National Bureau of Economic Research. The link is to a paper he did for the Federal Reserve Bank in St. Louis, and he argues that the accrued debt total is actually closer to $66 trillion:


http://research.stlouisfed.org/publication...7/Kotlikoff.pdf

If you read that last paragraph with any understanding, you now begin to realize the magnitude of the problem we are facing. Some of the equations in the early portion of the paper are a little slow-going, but Kotlikoff makes the point well.

It could be solved, as Kotlikoff says, by doubling all personal and corporate income taxes, with no Earned Income Credits, and no deductions. But then we'd liable to be in a deeper hole when companies and people who could afford it, moved out the country.

It could also be solved by slashing promised benefits in Social Security and Medicare by two-thirds (and more likely, three-quarters). But if you think there wouldn't be riots in the streets over that, your are delusional.

And none of these solutions are likely to occur, as politicians like staying alive and in office.

So, without some other kind of drastic reform leaves only one other solution: hyperinflation. The U.S. will have to print more money to escape the financial consequences of its unbridled spending. The only problem with that solution, is that it is even more destructive of the economy.

$4 dollars for a loaf of bread you pay $1 for now. $10 for a pound of hamburger. $100 or more for a tank of gas in your Honda Civic. Think Germany after WWI. And, it's only going to get worse from here:

Kotlikoff recommends a set of solutions he believes will fix the problem long term, although even he admits that it may be more painful than what we are currently experiencing in the short-term. His solutions come in the form of three basic changes:

1. Eliminate the Federal income tax, and FICA taxes: Replace them with a Federal sales tax at 33%, and lavied on all final retail sales. This he argues, would be enough, if employed with his additional reform measures to cover current Social Security, and healthcare obligations, as well as to pay for all of the government's other obligations.

2. Social Security reform: Eliminating the retirement portion of SS by paying only those retirement benefits accrued at the time of the reform. Current retiriees would receive full benefits, but future retirees would only get benefits based on their covered wages as of the date of the reform. The sales tax would pay the accrued retirement benefits, which would eventiually be reduced to zero.

To replace, SS, he advocates a "Personal Security System". Indiviaual accounts, with a required wage percentage contribution. All PSS accounts would be "private property", meaning congress couldn't get their hands on them, but they would be administered by the current SSA department, who would invest the funds received into a globally indexed market fund.

Because of the required contributions, the Government would guarantee that workers could not lose what they contributed. But if the investments are sound, the accounts could increase for workers dramatically. And since they are now "private accounts", they can be passed onto surviving spouses or children upon the death of the account holder.

3. Healthcare Reform: Replacing not only Medicare and Medicaid payment systems, but a general reformation of private insurance-based healthcare as well, by issuing vouchers each year, based on the previous years total healthcare spending. Someone relatively healthy would receive a smaller voucher than someone, say with a heart condition or cancer. Perhaps, much smaller. bThe vouchers, are then used to pay for insurance for the next calander year, based on the previous years spending.

The insurance companies would take these vouchers in exchange for paying out all related basic healthcare costs - medical care, prescriptions and even long-term care. If the insured person costs the company more than the cost of the insurance, the company eats the difference. However, if the insured costs them less, the company gets to keep the difference.

All Americans would get coverage, and the voucher program would cost the government much less than the current fee-for-service arrangement currently in effect under Medicare/Medicaid. The added benefit, of course, would be that insurance companies and medical facilities would actually have to compete for customers - insurance companies for the vouchers, and hospitals and doctors for the insurance companies. This should add to the savings realized.

I'm not certain that Kotlikoff's solutions are necessarily the only viable one's out there, but he seems to be one of the very few actually talking about the magnitude of the mess we've gotten ourselves into, and looking at realistic ways to get ourselves out of it.

Well, thank you for asking. It is my fault for not providing a source for my claim, and I intend to fix that. According to the Tax Foundation, the tax cuts have done this country a lot of good.

Here is the report used by the Tax Foundation.

Now that the economy is taking an obvious dive, I suspect the Fed is going to take measures to put a shot in the arm of the economy, and I hope to see a upward turn to follow the direction things were going in 2005 and 2006.

No. My analogy makes sense. Scubatim says it WASN'T the tax cuts and in fact, there's more money going into the US Gov and that the problem is that there's more spending by the US Gov (thanks to 9/11). YOU say "More money going in? But we're deeper in debt!" To which I replied, in reference to YOU, those things aren't mutually exclusive... meaning You can take more in AND be deeper in debt.

And barnaby2341 if we are it would explain why I never have any clean socks!

What it appears you don't understand is that when consumers have more money in their pocket, they spend more money in the American economy. When the people are taxed less, they spend more. When they spend more, corporate revenue increases. When corporate revenue increases, the volume of dollars that goes to Washington increases. If the percentage of dollars the consumer earns is taxed is lower, but the corporate tax rate, stays the same, the consumer with more money in his or her pocket spends more, the volume of money going into the corporate coffers increases, and thereby increases tax revenue for the country.

As the people get taxed more, less money goes into the actual economy, and in turn to Washington. If you are taxed at a higher rate, you have less money to spend. With less money to spend, America's businesses make less money. When the businesses make less money, they send fewer tax dollars into Washington, then the federal government then decides to increase income taxes again.

Another reason decreasing income taxes benefits America is the economy gets stronger. As spending increases, demand also increases. When demand increases, the supply must also increase. To increase the supply, jobs must grow. In order to do that, people need to get hired. When more people are working, you can actually tax at a lower rate, which increases the number of people being taxed, which will increase the volume of dollars going into Washington.

When looking at supply/demand, and increasing taxes, the opposite is true. If the people have less money in their pockets to spend, the businesses see a lower demand from the consumers, which lowers the need to create a supply, which lowers the need to employ people, which lowers the number of people getting taxed, which increases the need to increase the taxes of those that are employed.

The problem in a nutshell. Our government has been enacting, over a period of decades, programs that it can't possibly pay for. Why? To get our votes, of course! See, it's very easy to promise something now that won't become a problem until long after you're out of office. Human nature, I guess. Imagine the things we'd probably all get if companies were so lenient giving us such credit? That's the problem with all these programs...they're like a deadly cancer hidden in candy. Everybody wants to eat it, and no one is much concerned about effects some 30 or 40 years down the road. Just keep this in mind...every time a politician talks about giving any group anything...they're adding to the problem, not fixing it. It's always very easy to argue for the need or benefits of any of these programs, but no one ever talks about the cost or where the money is going to come from. That's why I stated that we should NEVER pass any legislation that doesn't contain details on how that program is going to be paid for throughout the life of the program. This would force the politicians to come to grip with fiscal reality. I would add again that acquiring new debt is NOT paying for anything, just as getting a mortgage is NOT paying for a house. To follow up on that analogy and tie it in with Niteguy's excellent post, remember that currently our government has provided each and every one of us with a $455,000 mortgage, only there is no associated house. Yet no one seems to care. If a note showed up in your mail obligating you to pay off a $455,000 mortgage (with no associated asset in your name), would you just shrug your shoulders, start making the payments, and do nothing about it? Of course not...you'd be up in arms, demending to know how this happened. Well...that's exactly what has happened here...you no one is concerned at all. Baffling. I wonder then just exactly what is the 'mortgage' threshold that will finally draw attention? How many more new unfunded programs will we continue to let Congress put in place that will have such a disastrous impact on our economy?

We do all understand the basics, scuba.

The problem this time, is that a one-shot tax rebate isn't going to help. A recent poll of people across all economic levels indicated that instead of going out and spending this rebate if and when it occurs, they are going to either save it, or spend it paying down debt, none of which will "stimulate" the economy.

But, what I really see here that's disheartening, is that most folks here are arguing about rather petty amounts of money. A few billion saved here or there isn't going to do anything to solve our long-term problem. And that problem as Hobbes so eloquently put it, is that our politicians have put every man, woman and child in this country into a nearly $500,000 hole, with no practical way to get us out.

Quite simply, this country is bankrupt. Period. We just haven't realized it yet. But the day of reconning is coming, and the longer we put off doing anything about it, the worse the real fall will be once it comes.

So, any suggestions?

Not me. I'm going to take my rebate check and buy a Chinese-made TV, thereby increasing tax revenue. How's that for stimulating the economy?

Ah, how's that Kool-Aid taste? It's easy to look at the positive side of the equation for particular months and claim that the whole thing works. You have to look Year over Year and include the expenditures to see the real effect.

Take a look at the file you provided.

Before Bush took office receipt + expenditure resulted in a surplus. Starting in FY 2002, there has been a rather dramatic deficit every year.

Sure an increase in revenue, but that increase has come nowhere near to even matching the increased expenditures. In fact that revenue is much less capable of reducing the deficit than it ever was. So, in terms of helping, tax cuts have not helped... they have hurt.

Don't accuse me of being a Kool-Aid drinker if you think raising taxes is going to solve the problem, you have no clue what you are getting into with that.

I have provided evidence of tax reciepts, I have never denied that the spending is out of control. Don't change the subject, and you might learn something. The tax dollars that have been coming in have been doing so at a record pace. The problem we have in our government is that our legislators have been spending the money even faster. Reciepts and outlays are two different issues. My point is that increasing taxes will only hinder the process of getting out of this record debt. The only solution is to stop spending money faster than it is coming in. And currently the money is coming in faster than ever, but our Congressmen are spending it at record paces too. Taking money out of consumer's pockets by increasing their taxes will only compound the matter, not solve it.

Oh GOOD GRIEF!!!!

We're not going to be a war forever. We're not going to spend like this forever. Didn't you JUST say you can't look at a few months and declare it all works? I mean, for Pete's Sake take your own advice!

Should the US Gov draw down spending? Yes. Undeniable. However let's not all throw our hands up and declare it's so broken we need to give up and welcome our Chinese Overlords.

I agree completely, the tax rebate is too little, too late. What we need in our government is a group of people that are supposed to represent us that won't spend money faster than it is coming in. Tax revenue isn't the issue, it is the spending that is the issue, and we have had spend happy politicians in Washington much longer than the current cycle of Bush/Clinton regimes. The wars are one issue I will admit, but there are others that have been going on much longer than Iraq that still need solving. What we need is a revolution and oust the majority of those currently in Washington and find someone that actually gives a damn about something other than getting re-elected.


Just the response I would expect.

Who said anything about raising taxes. How about just removing the tax cuts.



I didn't change the subject. I showed you the entire subject... you were only showing pieces of the subject.

It seems that tax cuts have hindered the process. Even though revenue has increased, so has expenditures. If taxes hadn't been cut, there would be less of a deficit. Are you saying that's not true?

If you remove the tax cuts, then the taxes go to previous rates, also known as raising them. Do you have another way of explaining it? Would the taxes not go up?


What piece did I leave out? I covered both revenue and expenditure. The problem is with the expenditure. You are hung up on these tax cuts, and are avoiding the fact that Washington is spend happy. They are spending money faster than the record flow of the revenue that is coming in. Why is it that so many people can't see the giant purple elephant standing in the middle of the room?

Again, the tax cuts have increased revenue. That has been established. Revenue isn't the problem. Expenditures are. If you raise taxes (or remove the tax cuts-means the same thing BTW) that is not going to curb the spending or increase the revenue. With raising taxes, you only double the trouble. What is needed isn't any adjustments to the taxes, the adjustment needs to take place with the people spending the money. That includes every politician in Washington, not just one party or one president. Everybody.

Show me how tax cuts have increased revenue? You have shown increased tax receipts, but, logically, tax receipts would increase if taxes had not been cut... right? So, show some evidence that tax cuts have, in fact, increased revenue.

And let's remember, we are talking about a decision to "temporarily" cut taxes. Later Bush sought to make those cuts permanent. If the decision had been made to leave taxes as they were, taxes would not have been raised. When I first referred to the tax cuts, I was referring to that decision... a decision, not to raise taxes, not to leave them as they were, but to cut them. So, had the tax cuts not been instituted, taxes would not have been raised... they would've remained the same.

The link I provided shows the increase in tax revenue since the Bush Tax Cuts. In this discussion, receipts and revenue are the same. I don't know where you come up with "tax receipts would increase if taxes had not been cut". What are you talking about?


He did so because the actual dollars coming into Washington had increased, showing the positive affect of the tax cuts.


Taxes haven't been raised. What are you talking about?


Again, the cuts are still in affect today, and are scheduled to be in affect until 2012. No tax increases have occurred to my knowledge, unless you know something I don't.

The actual dollars coming into Washington also increased every single year of Clinton's presidency (link). Were those due to tax cuts also?

What you've established is a correlation and not a cause. There could be other reasons why revenue increased over the time period you cited such as: higher capital gains, improved efficiency, cheaper imports, lower interest rates, easy debt and so on.

What you've engaged in is known as the Faulty Causation Fallacy or cum hoc ergo propter hoc. Here's a good example from the wiki page:

If you wish to establish a claim of causation, you need to isolate all your variables. This you have not done.

So, if I am wrong, point out exactly how. I have made my claim, and provided evidence supporting my point. You seem to disagree, but so far have only provided theory, but no proof that the tax cuts have not increased tax revenue. Until you do, this discussion is pointless.


I don't know, maybe it was the e-business boom creating more revenue. If you would like to explore that point and get bac