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dmc
7-29-11, 6:08pm
I'm just curious on what is wrong with a balanced budget? Its odd that many are being labeled as extremest for wanting to live within our means.

It's obvious that we can't count on most of the politicians to control spending.

janharker
7-29-11, 8:33pm
I think the problem is two-fold. First, the politicians will lose much of their power to write amendments to bills that get money spent in their own back yard. Second, it's hard to get to being balanced when we're so far in debt, as so many people are personally aware.

Zigzagman
7-29-11, 8:36pm
I think a balanced budget in principle is a great idea but if you are talking about a balanced budget amendment then that is a entirely different story. We only have to look at the states and how well their balanced budget mandate has worked. Example after example of off-budget spending by all of the states, where there is a will politicians will always find a way.

At the federal level we already have lots of example of off-budget examples. SS is the perfect example, military conflicts are often declared off-budget, and on and on. These types of entities would just get larger and larger. Another issue would be the inevitable "constitutional crisis" that would probably be decided ultimately by unelected judges - is this what we really want?

I don't think it is extremest at all to live within our means but the present BBA is nothing more than political grandstanding and everyone knows it.

The only way out of our budget crisis now and in the future is for some sort of balanced approach which means cuts in everything no exceptions and no reason why we can't and also a revenue component which increase revenue - IMO, without that we are pushing a string going nowhere.

But to answer your question a balanced budget should be how we run our country, it is how I run my household because I have absolutely no other option! :)

Peace

Tradd
7-29-11, 8:40pm
I was raised in Michigan. A balanced budget is required by the state constitution.

http://www.michigan.gov/budget/0,1607,7-157-21338-53055--F,00.html

I believe there are other states that require a balanced budget, but I'm not sure.

For years, I've said I wish we could just wipe the federal Dept. of Education off the books in one fell swoop and return education to the states.

ApatheticNoMore
7-29-11, 9:17pm
The timing of the thing of course. Not a good time to negotiate a balanced budget when you're a few days short of defaulting on the debt. Now look everybody knows the U.S. is heading for default in the long run, but noone suspected they would willing bring it on themselves! It's like everyone knows all men are mortal, but its no reason to slit your wrists.

It would be kind of interesting, we might be the only country on earth to try it (some countries are clearly disasters and not at all to be imitated but even those with very sound fiscal policy don't have anything like this as far as I know).

Alan
7-29-11, 9:32pm
The timing of the thing of course. Not a good time to negotiate a balanced budget when you're a few days short of defaulting on the debt. Now look everybody knows the U.S. is heading for default in the long run, but noone suspected they would willing bring it on themselves! It's like everyone knows all men are mortal, but its no reason to slit your wrists.

There's no reason to believe the U.S. will go into default, but there is every reason to believe we'll suffer the consequences of our failure to live within our means. A balanced budget requirement would solve that problem as well in the long run, but I don't think our leaders have the will to do the right thing.

flowerseverywhere
7-29-11, 10:58pm
I watched c-span today and was amazed and looked up a lot of facts that people stated. Holy cow, can some people talk.

The constitution has 27 amendments and if you read them they regard women voting, prohibition then it's repeal etc.

But here is the most interesting. Over 11,000 amendments have been proposed, about 35-40 per year in modern times. They include such things as banning same sex marriage, banning abortion, no citizenship for children born of illegal immigrants.

http://www.senate.gov/pagelayout/reference/three_column_table/measures_proposed_to_amend_constitution.htm

and

http://en.wikipedia.org/wiki/List_of_proposed_amendments_to_the_United_States_C onstitution

the balanced budget amendment has been proposed multiple times in the past (I could not find the exact number, I think someone said around 200 but I have no link)

My problem is the kick the can mentality. Don't make the hard decisions to cut spending and increase taxes this year but make people do it down the road while you continue to spend now. Doesn't seem right.

Mangano's Gold
7-29-11, 11:05pm
I'm just curious on what is wrong with a balanced budget?
If there were a practical way to require balancing over a period of more than a year (say three) then it would have wider support among experts than it currently does. A year is arbitrary. It's how long it takes the earth to revolve around the sun.

More importantly, the current offers effectively take tax increases off the table, and the first one "caps" spending at an unrealistically low level. So they are more political/ideological shams than anything.

loosechickens
7-29-11, 11:58pm
I was reading Time Magazine (August 8 issue, just out) today in Barnes and Noble, and the Curious Capitalist writer had a piece in there regarding this subject, and why it would be a terrible idea for the country, although great for a family, and even reasonable for a state, since the Federal government would still be spending, but not the Federal government.

I tried to link to it, but you can't look at the article online unless you are a subscriber to Time, but the gist of it was that during downtimes is when government NEEDS to spend more to stimulate the economy and make up for private spending that isn't being spent, that having a balanced budget amendment (such as in times of recession or war, etc.) would actually create a feedback loop that has a down economy, lowered spending in the private sector, so less revenue, accompanied by lower spending by government, which increases the downturn, and it would throw us into depression quite easily.

It's one of those things that sounds good on paper, and most don't realize the faulty logic of the comparison between a government balancing its budget and a family doing the same thing. I'm not explaining it well, but hopefully, you'll look for the piece, because it was instructive as to why this would be a very bad idea.

Another thing I read today is that Federal government revenue is 15% of our GNP, which is the lowest rate since the Korean war, so like it or not, and contrary to conservative thinking, what we really need, in addition to some spending cuts is increased revenue in the form of taxes, because many of our problems arose because we've reduced our revenue over and over again, which has made the rich much, much richer, made most of the rest of us stand still financially, or fall backward, and managed to put ever larger proportion of the country's wealth into fewer and fewer hands of the top few percent of citizens.

The wealthy in this country are paying HALF of the taxes that they paid just a few decades ago, and much of the problem stems from the constant transfer of more and more wealth to the few, more and more of a burden on the middle class, and lower classes that have fallen behind steadily over that period. We've been engaged in "class warfare" all right, but in the direction of taking from everybody else and handing over more to the richest of the rich.......

Don't expect THAT to sit well with the conservative contingent here, hahahaha..... ;-)

Gregg
7-30-11, 6:52am
To say that we need to collect additional revenue is absolutely correct. To say that it should all come from the top few percent of earners (not that that's exactly what you said, LC) is also faulty logic. The math is pretty simple: there just aren't enough people in that class to get us to the finish line even if you take everything they have. It's going to require the 200,000,000 or so of us that are somewhere in between vast wealth and poverty to step up to the plate and pay more, too. IMO the tax rates are plenty high enough, we do, however, need to reduce or eliminate some very expensive deductions that effectively subsidize high earners and corporations that don't need them. Corporate subsidies are a far easier and vastly larger target. We should absolutely not go so far as to create an environment in which making a profit is difficult, but the Federal government can no longer afford to INSURE corporate profits.

Back on topic, the writer for Time seems to have the right idea. The Republicans shot themselves in the foot (IMO) by adding constitutional amendment language to their proposal. Not that it isn't worth considering, but to try to do that in the 11th hour is absurd. Having a debt ceiling at all is even more absurd. Budgets and spending need Congressional approval anyway so what does a debt ceiling accomplish? Nothing beyond making us look ridiculous to the rest of the world (from whom we borrow money). It's been raised a couple times a year for the past 40 years so is pretty meaningless anyway. I think this might be a good time for Reagan style budgeting in at least one sense. Three dollars in cuts for every one in increased taxes. Decisions need to be lucid and action needs to come swiftly if we are going to save any face at all. I'm not convinced that ANYONE in Washington has the kahunas to act do that. Probably going to come down to the Fed offering overdraft protection on the checks the Congress will have to continue to write if they want to keep their jobs.

creaker
7-30-11, 9:17am
I'm just curious on what is wrong with a balanced budget? Its odd that many are being labeled as extremest for wanting to live within our means.

It's obvious that we can't count on most of the politicians to control spending.

The problem is we are and have been a much poorer nation than we will admit to. Living within our means will require radical adjustments as a nation. And that does not even address the debt.

I think we would remain in the top 20 as an economic power, but I doubt within the top 5.

catherine
7-30-11, 9:45am
I agree with Gregg... and I also agree with Fareed Zakaria (Newsweek) who said the same thing. He said that not raising the debt ceiling at this point in time, when we have bills to pay, is like saying to Visa when the bill comes due "I don't want the stuff I bought so I'm not paying you." Just doesn't make sense. Step 1: Raise the debt ceiling, pay our bills, and stop looking foolish; Step 2: Get financial house in order.

For sure we need to reduce spending, but that's a whole separate topic. The topic at hand is, let's take care of the expenditures we have already committed to and get on with it.

Mangano's Gold
7-30-11, 2:52pm
..... however, need to reduce or eliminate some very expensive deductions that effectively subsidize high earners and corporations that don't need them. Corporate subsidies are a far easier and vastly larger target. We should absolutely not go so far as to create an environment in which making a profit is difficult, but the Federal government can no longer afford to INSURE corporate profits.
I agree. The tough thing is that all tax preferences have powerful constituencies, which is how they came to be in the first place. Right now would actually be a relatively good time to do big things fiscally. We've got a "crisis", and split government. Politicians could join together, hold hands, close their eyes, and jump off the cliff in unison. But alas, there is political positioning and disagreement on what should be done.

Imagine this scenario in two years: Let's say nothing substantial gets done between now and the 2012 elections (a real possibility). In 2012, Republcians win back the Presidency and Senate, and now control government. Are they going to unilaterally cut Medicare and Socail Security? That is a political nightmare for Republican strategists. They would be back to a minority party pretty swiftly.

loosechickens
7-30-11, 2:59pm
The inexperienced, Republican Tea Party freshmen in the House really seem, to me, almost like angry, destructive children who are determined to burn the house down if they don't get what they want, yet, somehow, seem to expect to sleep in their beds comfortably that night, after doing so, as though the house would still be there.

As many have said, raising the debt ceiling has NOTHING whatsoever to do with authorizing more spending and further deficits. It is agreeing to pay the bill for money already spent. So really IS like refusing to pay the VISA bill after spending on vacation, because you're horrified about how prolifigate you've been.

It is nothing other than an act of economic terrorism, holding the credit of the United States hostage, with the attendant dangers of long term damage to the economy that would hurt a LOT more, to a LOT more people than raising everybody's taxes, and possibly throw us into financial disaster. It is playing Russian Roulette with most of the chambers of the weapon containing bullets.

The Republicans welcomed even the nutcases in the Tea Party, armed them with pitchforks and torches to go after Obama, and now has no control over them, as we watch our country inch closer and closer to a real disaster. And now these people have grabbed power and the establishment Republicans are scared to death to cross them, because they know the Tea Party folks will come after them, and try to defeat them in the next election if they don't knuckle under to the economic terrorism being perpetrated.

Of course we need to reduce spending, AND, as Gregg said, we really need to look at increasing revenue, and while it may be appropriate for all of us to give a bit more, those who can do it most easily could step up to the plate and do so, since they are the ones who have benefitted the most in the past thirty years. Time to give a bit back, for the sake of the country.

But the debt limit is NOT the place to have this discussion. It is something that must be done, raising it, if we are not to lose our credit rating in the world, and that is why these House Republican freshmen have chosen to hold it hostage. Because they can, and they really don't care about the consequences. Very sad, almost criminal, and will hurt the very people they profess to want to protect.

Alan
7-30-11, 3:14pm
The inexperienced, Republican Tea Party freshmen in the House really seem, to me, almost like angry, destructive children who are determined to burn the house down if they don't get what they want, yet, somehow, seem to expect to sleep in their beds comfortably that night, after doing so, as though the house would still be there........

....But the debt limit is NOT the place to have this discussion. It is something that must be done, raising it, if we are not to lose our credit rating in the world, and that is why these House Republican freshmen have chosen to hold it hostage. Because they can, and they really don't care about the consequences. Very sad, almost criminal, and will hurt the very people they profess to want to protect.
You may not have noticed but the Republican House has passed several measures which will raise the debt ceiling, thus averting the disaster you want to blame on them. Unfortunately, the Democratic Senate and the Office of the President have refused to even consider them.

When our nation's credit rating is damaged and we inch closer and closer to a possible default, remember who blocked the legislation that would have prevented it.

loosechickens
7-30-11, 3:39pm
Alan, you KNOW that is hooey, smoke and mirrors......yeah, they were willing to raise the debt ceiling, in exchange for a balanced budget amendment, which was impossible and would have taken a 2/3 majority of both house, taken YEARS to accomplish, and may have required amending the Constitution, and have to be ratified by 3/4 of the states. Get REAL.

Yep, I suspect theAmerican people are going to understand who is doing this, despite the propaganda machine.

remember, that we always had the choice of simply passing a bill to raise the debt limit, clean, as has been done countless times in the past, just a three sentence, one page bill that gives permission for the debt limit to be raised.

The House Republicans were determined to hold that debt limit hostage, and are committing economic terrorism in order to do so. I think the American people will understand that.

I'm getting far too p*ssed off to be online talking about this.....time for lunch and nap. I'm gritting my teeth, always a bad sign. You, of course, are just getting warmed up. You LOVE this stuff, don't you, Alan?

We shall see. We'll go over the cliff or we won't. The correct people will be blamed or they won't. In a cosmic sense, it doesn't mean much, I guess.

But there are times when I'm glad to be nearly 70 years old, not leaving grandchildren behind, and with enough money that we could probably manage to live through old age, frugally, with only a small fraction of our money left, after a major economic collapse. Wouldn't be fun, but we wouldn't starve. I wish I had the same sense of security for many others.

Alan
7-30-11, 3:58pm
I'm getting far too p*ssed off to be online talking about this.....time for lunch and nap. I'm gritting my teeth, always a bad sign. You, of course, are just getting warmed up. You LOVE this stuff, don't you, Alan?



I do enjoy a good discussion, one that is based on reason rather than emotion. Too bad those are few and far between.

Catwoman
7-30-11, 4:48pm
The freshman, Tea-party Reps., acting on principle and passion resemble to me - our founding fathers. The British probably referred to them in much the same way as you did, LC.

The angry, destructive, child-like behavior appears to be coming from the President. Pay no attention to the man behind the curtain...He needs to raise the debt ceiling so he can hand out the goodies in time for the Nov. election.

The reason they are rejecting the two-step measure proffered by the Rep. House is that the issue will have to be re-visited with the bright light of truth shining on it right at election time. Obama can't have that.

Catwoman
7-30-11, 5:45pm
Everyone has such short memories...Where was the "compromise" when the health care bill was rammed down our throats when literally half of the populace vehemently objected?

dmc
7-30-11, 6:19pm
Everyone has such short memories...Where was the "compromise" when the health care bill was rammed down our throats when literally half of the populace vehemently objected?

The tea party is a result of Obamacare. Nancy called them names and said they really didn't exist. But they got voted into office anyway.

Zigzagman
7-30-11, 7:07pm
The freshman, Tea-party Reps., acting on principle and passion resemble to me - our founding fathers. The British probably referred to them in much the same way as you did, LC.

The angry, destructive, child-like behavior appears to be coming from the President. Pay no attention to the man behind the curtain...He needs to raise the debt ceiling so he can hand out the goodies in time for the Nov. election.

The reason they are rejecting the two-step measure proffered by the Rep. House is that the issue will have to be re-visited with the bright light of truth shining on it right at election time. Obama can't have that.

The truth of the matter is that this is nothing more than a political ploy by the Tea-Baggers. They would like to make people think that the debt ceiling has something to do with our deficit - it is simply about paying our existing bills. Amazingly the GOP has tried to play like they had no part in the budget deficits but the facts show that for the most part Reagan, Bush I, and Bush II are responsible for almost all of it. Trickle-down economic, supply side economics what ever you would like to call it and then on top of that two totally unfunded wars while cutting taxes.



Everyone has such short memories...Where was the "compromise" when the health care bill was rammed down our throats when literally half of the populace vehemently objected?

The healthcare bill (or Obamacare if you prefer) was a compromise by Congress because of absolutely no other choice in the matter. If we had had any sense at all we would have supported single-payer healthcare like the rest of the world. This will not stand because the simple economics will not support only a portion of the populous paying their fair share - it is simply a matter of time.

In my opinion once the GOP is recognized as the party of the "dumbasses" then we can move on.

Peace

Alan
7-30-11, 7:46pm
In my opinion once the GOP is recognized as the party of the "dumbasses" then we can move on.

Peace

Move on to what? Government annually spending 30% of the nations GDP? 40%? 70%?

Catwoman
7-30-11, 10:17pm
That remark about the Republicans being recognized as the party of the @@#@# really encapsulates the spirit of civility and cooperation, dontcha think?

Alan
7-30-11, 10:55pm
That remark about the Republicans being recognized as the party of the @@#@# really encapsulates the spirit of civility and cooperation, dontcha think?
It's been apparent for a long time that civility and cooperation is a one way street.

Tenngal
7-31-11, 10:32am
there is nothing wrong with wanting a balanced budget. However, no one agrees on what should be cut. In the state of TN, so many cuts have been made, if you have someone in your family with a disability or mental health disorder, you are in deep trouble. Services which have contributed to the future independance of those they serve have been hatched. This means the only people left to pick up the pieces are family members, sometimes a single parent who has no choice but to work. In today's work place anything which causes you to miss work is considered a weakness and you are on the chopping block. Ultimately, when some of these folks endup on welfare, foodstamps, etc. it will be because of the first cuts. Just an example, but this list could go on and on.

Catwoman
7-31-11, 10:39am
Tenngal, all the things you mentioned as a result of budget cuts are sympotmatic of a much, much deeper societal problem. There comes a point when you have to stop just throwing money at problems and creating new programs to spend taxpayer money. I know a return to a time when families took care of their own is not possible or desirable - but ultimately - I mean pennultimately - where does the solution and the responsibility lie? With the individual...the destruction of the American family is but one aspect of the social/economic/welfare programs issues we have. It is painful, painful, painful to stand up for principles and change course...we are going to have to do that or go bankrupt..or surrender our soveriegnty to someone else (? don't know who - China maybe). This deal they are making in Washington right now is but a band-aid.

Mangano's Gold
7-31-11, 1:36pm
The freshman, Tea-party Reps., acting on principle and passion resemble to me - our founding fathers. The British probably referred to them in much the same way as you did, LC.
I have no doubt that the people who support the Tea Party see it this way. However, I suspect that it has not even crossed their minds that maybe THEY are the ones who are now protecting the King.

Zigzagman
7-31-11, 1:52pm
I know a return to a time when families took care of their own is not possible or desirable - but ultimately - I mean pennultimately - where does the solution and the responsibility lie? With the individual...the destruction of the American family is but one aspect of the social/economic/welfare programs issues we have. It is painful, painful, painful to stand up for principles and change course...we are going to have to do that or go bankrupt..or surrender our soveriegnty to someone else (? don't know who - China maybe). This deal they are making in Washington right now is but a band-aid.

It IS just a band-aid. I think our biggest problem in this nation are the use of taxpayer dollars to fund business or business interests in-lieu of individuals. As Mangano Gold pointed out the wealth distribution in this nation has changed so dramatically in the last 30 years that it has negatively affected over 90% of the population. The middle class has shrunk and the American Dream has all but disappeared. Not only have the people lost any direct input into the direction of this nation (instead corporate lobbyists control Washington) but as opportunities continue to move to the emerging markets we are rapidly becoming a "Banana Republic".

America has changed - the traditional family of the 50 and 60's does not exist as it once did and we have to realize that the idea of trying to go back will never happen. I think it is time to deal with our problems from a progressive point of view that recognizes that jobs and social services are directly related - the less we have of one the more we have of the other.

We can never go back and that is one of the main reasons that "conservatism" is such a dead end street.

Peace

loosechickens
7-31-11, 2:17pm
"I have no doubt that the people who support the Tea Party see it this way. However, I suspect that it has not even crossed their minds that maybe THEY are the ones who are now protecting the King." (Mangano's Gold)

---------------------------------------------
Ahhhhh.....SO well said. Yet so impossible to see, by so many.

iris lily
7-31-11, 4:09pm
... As Mangano Gold pointed out the wealth distribution in this nation has changed so dramatically in the last 30 years that it has negatively affected over 90% of the population. ...

Peace

Did Mangano Gold also point out that the top 1% of earners pay almost 40% of the entire IRS take? That is:

1%

and

40%

That's a pretty big spread.

Zig, what spread would you like to see in these numbers?

Alan
7-31-11, 4:15pm
"I have no doubt that the people who support the Tea Party see it this way. However, I suspect that it has not even crossed their minds that maybe THEY are the ones who are now protecting the King." (Mangano's Gold)

---------------------------------------------
Ahhhhh.....SO well said. Yet so impossible to see, by so many.

That's because it's bull. Capitalism and Free Markets have been the best means of advancing people out of poverty and subsistence lifestyles that the world has ever known. Government cannot replace it without destroying the long term well being of the masses. I think that's what's impossible to see, by so many.

Zigzagman
7-31-11, 4:15pm
Did Mangano Gold also point out that the top 1% of earners pay almost 40% of the entire IRS take? That is:

1%

and

40%

That's a pretty big spread.

Zig, what spread would you like to see in these numbers?

I'd personally like to see everyone contribute - that would mean a dramatic change in our tax code or throwing the whole thing out and starting afresh. The idea of exemptions for mortgages, children, capital gains at a lower rate, business expenses, and god only knows what else in the almost 2500 pages of the present tax code. Our tax system is designed to accommodate special interests and is stupid.

BUT - I'll believe it when I see it.

Peace

Catwoman
7-31-11, 5:33pm
Our tax system is also designed so that at present 50% of Americans are receiving payment of one form or another from the government. So I find that to be the stupid component of the structure. 50% of us are supporting the other 50%. I favor the "man don't work, man don't eat" approach myself. I know there will be people who need a hand up or have times of difficulty, yada, yada, yada. But we have built a system where 46% of our citizens pay no income tax at all and generally wait with their hands out. There is no way to support this ad infinitum. It will require more and more and more of the few until it collapses in upon itself...hence...our current dilemma. I'm really fed up with seeing people driving new model expensive cars, talking on their cell phones and paying for their groceries with a Lone Star (food stamp) card...and it isn't a temporary situation, it is a strategy...don't get married, live together....you don't want a spouse's income to count in with yours and keep you from getting all you can get for free.

Mangano's Gold
7-31-11, 7:51pm
Did Mangano Gold also point out that the top 1% of earners pay almost 40% of the entire IRS take? That is:

1%

and

40%

That's a pretty big spread.

Zig, what spread would you like to see in these numbers?
Iris, your big, bold, and black statement isn't true. I believe that you repeated this supposed fact in good faith, but your source was almost certainly intentionally misleading you. Federal revenues come from two primary taxes: The Federal Income Tax and FICA. The former is progressive, the latter isn't. You quoted only the former, and left out the latter entirely. Roughly speaking, the tax you quoted represents ~45% of federal revenue, FICA is ~36%.

I bet that you have heard some version of what you quoted many many many times over the years by various media and pundits. If these folks don't heavily qualify what they are telling you, then you can be sure they don't have your best interests in mind. They aren't trying to inform the public, they are trying to misinform the public.

Mangano's Gold
7-31-11, 7:57pm
Our tax system is also designed so that at present 50% of Americans are receiving payment of one form or another from the government. So I find that to be the stupid component of the structure. 50% of us are supporting the other 50%. I favor the "man don't work, man don't eat" approach myself. I know there will be people who need a hand up or have times of difficulty, yada, yada, yada. But we have built a system where 46% of our citizens pay no income tax at all and generally wait with their hands out. There is no way to support this ad infinitum. It will require more and more and more of the few until it collapses in upon itself...hence...our current dilemma. I'm really fed up with seeing people driving new model expensive cars, talking on their cell phones and paying for their groceries with a Lone Star (food stamp) card...and it isn't a temporary situation, it is a strategy...don't get married, live together....you don't want a spouse's income to count in with yours and keep you from getting all you can get for free.
Catwoman, first, see my post to Iris.

Second, if you want to change the structure of the Federal Income Tax so that more pay, here are the two biggest changes you can make:

--Lower the Standard Deduction and Personal Exemptions

-- Do not allow any exclusion for Social Security benefits. In other words, treat the oldtimers' Social Security check the same you would treat it if it were income from working at Wal-Mart.

Various other credits remove people from the tax roll, but in much smaller numbers than the factors I mention above.

Zigzagman
7-31-11, 8:10pm
Catwoman, first, see my post to Iris.

Second, if you want to change the structure of the Federal Income Tax so that more pay, here are the two biggest changes you can make:

--Lower the Standard Deduction and Personal Exemptions

-- Do not allow any exclusion for Social Security benefits. In other words, treat the oldtimers' Social Security check the same you would treat it if it were income from working at Wal-Mart.

Various other credits remove people from the tax roll, but in much smaller numbers than the factors I mention above.

What would be the downside of a consumption based tax that utilized progressive rates in order to maintain "fairness"? The more that someone spends on consumption, the more that the person would be taxed. With various tax brackets much like today but without all the special exclusions and exemptions.

Peace

iris lily
7-31-11, 8:12pm
Iris, your big, bold, and black statement isn't true. I believe that you repeated this supposed fact in good faith, but your source was almost certainly intentionally misleading you. Federal revenues come from two primary taxes: The Federal Income Tax and FICA. The former is progressive, the latter isn't. You quoted only the former, and left out the latter entirely. Roughly speaking, the tax you quoted represents ~45% of federal revenue, FICA is ~36%.

I bet that you have heard some version of what you quoted many many many times over the years by various media and pundits. If these folks don't heavily qualify what they are telling you, then you can be sure they don't have your best interests in mind. They aren't trying to inform the public, they are trying to misinform the public.

I didn't hear it, I looked it up. Those numbers are from 2008 and they wouldn't include FICA, but my wording was poor, mea culpa.

Since Federal income tax and Fica are separate, I'm not sure why you are compelled to roll them into one number. But you may, I won't stop you.

I won't even make you read or comment on the bigger number: 5% of taxpayers pay 70% of income tax revenue.

Mangano's Gold
7-31-11, 8:27pm
What would be the downside of a consumption based tax that utilized progressive rates in order to maintain "fairness"? The more that someone spends on consumption, the more that the person would be taxed. With various tax brackets much like today but without all the special exclusions and exemptions.

Peace
I think it should be part of the mix, much like other advanced countries VAT's. As a full replacement, I wouldn't support it. Viability aside, I don't believe it could be stuctured in a way that I deem fair. Folks at the top of the top would be the big beneficiaries, as they make way more than they could possibly spend. In any major tax change, there are winners and losers. The upper middle class would be the group getting killed in this example (and with the so-called "Flat Tax" as well).

On a secondary note, this sort of tax would be subject to the same legislative pressures as the income tax. Every producer will have some reason why their product should be excluded, or treated at a lower rate. Lobbyists wouldn't just disappear. Ditto with a flat tax. Just my opinion.

Mangano's Gold
7-31-11, 8:31pm
Since Federal income tax and Fica are separate, I'm not sure why you are compelled to roll them into one number.
?

Because you're more likely to draw the wrong conclusion if you are only looking at a subset of the data.

Zigzagman
7-31-11, 8:42pm
I think it should be part of the mix, much like other advanced countries VAT's. As a full replacement, I wouldn't support it. Viability aside, I don't believe it could be stuctured in a way that I deem fair. Folks at the top of the top would be the big beneficiaries, as they make way more than they could possibly spend. In any major tax change, there are winners and losers. The upper middle class would be the group getting killed in this example (and with the so-called "Flat Tax" as well).

On a secondary note, this sort of tax would be subject to the same legislative pressures as the income tax. Every producer will have some reason why their product should be excluded, or treated at a lower rate. Lobbyists wouldn't just disappear. Ditto with a flat tax. Just my opinion.

Yep, reality is a mutha! I just cannot get excited about the proposed deal that includes a "Super Congress" to deal with the budget deficits - I'm immedately thinking who will be the "deciders" and who anointed them as our economic saviours? As usual this is just more Washington politics with more concentration on elections that the real issues. I just cannot see how this can end well but probably will result in a big market rally come tomorrow. Extended hours SPY futures anyone?

Peace

Alan
7-31-11, 8:50pm
?

Because you're more likely to draw the wrong conclusion if you are only looking at a subset of the data.

Then why not lump in state/local/sales/property/excise/estate/gift & unemployment taxes along with duties and special use fees as well? We normally don't because they are not part of the federal income tax, which is what Iris Lily was referring to.

Mangano's Gold
7-31-11, 9:30pm
Yep, reality is a mutha! I just cannot get excited about the proposed deal that includes a "Super Congress" to deal with the budget deficits - I'm immedately thinking who will be the "deciders" and who anointed them as our economic saviours? As usual this is just more Washington politics with more concentration on elections that the real issues. I just cannot see how this can end well but probably will result in a big market rally come tomorrow. Extended hours SPY futures anyone?

Peace
After watching 30 minutes of Cable News since the announcement, It still isn't clear (to me) what the deal is. It looks like it could have been worse, though.

Mangano's Gold
7-31-11, 9:36pm
Then why not lump in state/local/sales/property/excise/estate/gift & unemployment taxes along with duties and special use fees as well? We normally don't because they are not part of the federal income tax, which is what Iris Lily was referring to.
If you want to get a full picture you should, or at least include all federal taxes like the CBO does in some of its reports.

Conservative media is being intentionally dishonest with its consumers.

An analog would be if it was reported: 70% of income is earned by the top 1%. But it turns out they are just talking about Capital Gains.

Mangano's Gold
7-31-11, 10:15pm
If anyone is interested, here is the most recent CBO report I could find that includes all federal taxes. It is in pdf format. The main chart is on p.6. A few highlights:

-- Top 1% earns 19.4% of all income and pays 28.1% of all federal taxes. This is progressive, but not THAT progressive.
-- The overall federal tax rate is 20.4% (Total Income Tax/Total Income)
-- Most people pay more in FICA than the federal income tax
-- The most progressive tax is the Corporate Tax, the most regressive are the excise taxes

http://www.cbo.gov/ftpdocs/115xx/doc11554/AverageFederalTaxRates2007.pdf

Dharma Bum
7-31-11, 10:42pm
If you want to get a full picture you should, or at least include all federal taxes

I've always had a little trouble with including FICA in the analysis. You pay into a system for the purpose of getting a benefit back. Granted it's indirect, but it is at least somewhat related. We all benefit to some degree from govt spending, but the issue is who is paying in more than they get back and who gets more than they pay. I confess it's a muddled situation and hard to draw the line on what's a direct benefit back but paying in to system that pays you back is not really the same as paying to provide benefits to go disproportionately to others (I get the ponzi scheme that is SS, but it's close enough). Most people in my cohort assume we won't see nearly the money back we will have to pony up for the boomers, but the focus should really be on the taxes that go into the wealth redistribution pool, not the nationalized services charges.

Dharma Bum
7-31-11, 10:45pm
The most progressive tax is the Corporate Tax

That's debatable.

Mangano's Gold
7-31-11, 11:05pm
That's debatable.

I agree. There are different views on who really pays this tax. The CBO analysis, I believe, assumes the owner does. If it is the customer, or employee, or some mix, then the system would be a marginally flatter.

On FICA/FedTax, I see the distinction as purely an accounting treatment. In other words, I see the revenues as fungible. For example, I don't believe in the SS Trust Fund. IMO, it has all been treated as one pot so far, and I'm guessing that we'll continue to do so. No doubt, it gets more muddled when you layer in outflows. But if you strip out FICA outflows, then our budget problems are pretty manageable.

Dharma Bum
8-1-11, 10:08am
For example, I don't believe in the SS Trust Fund.

Makes 2 of us bro. I was thinking just in terms of the payback. Let's say we have to all pitch in to fund the SL website and decide to have a fundraiser dinner to do it. Alan puts in 20 and you and I put in 10 each. You could say Alan put in twice as much as you and I did, but if in return for our contribution we all get to go to the group dinner and hear Vicki Robin speak and get served a $9.99 dinner from Longhorn, then you and I basically got our money back and Alan kicked in an extra 10 that goes to the general forum expense fund. So really Alan is carrying all of us, not just paying twice what you and I are.

Mangano's Gold
8-1-11, 10:33am
Makes 2 of us bro. I was thinking just in terms of the payback. Let's say we have to all pitch in to fund the SL website and decide to have a fundraiser dinner to do it. Alan puts in 20 and you and I put in 10 each. You could say Alan put in twice as much as you and I did, but if in return for our contribution we all get to go to the group dinner and hear Vicki Robin speak and get served a $9.99 dinner from Longhorn, then you and I basically got our money back and Alan kicked in an extra 10 that goes to the general forum expense fund. So really Alan is carrying all of us, not just paying twice what you and I are.
I can see the headline now: Deadbeats enjoy steaks, only 1/3rd pay bill.

Alan
8-1-11, 11:23am
I can see the headline now: Deadbeats enjoy steaks, only 1/3rd pay bill.
And the liberal view would be, Alan's not paying his fair share. Charge him more.

Zigzagman
8-1-11, 11:38am
Personally I just wish that we had someone representing the liberal view in congress. It seems that they are becoming as scarce as hen's teeth.

Peace

Dharma Bum
8-1-11, 11:48am
Buck up Ziggy, Congress is still crawling with them. Maybe you should sign up here to get a daily pick me up: http://twitter.com/#!/senatorsanders

Zigzagman
8-1-11, 2:23pm
Buck up Ziggy, Congress is still crawling with them. Maybe you should sign up here to get a daily pick me up: http://twitter.com/#!/senatorsanders (http://twitter.com/#%21/senatorsanders)

Not into tweeting but already follow Bernie Sanders. I often think how lucky the people of Vermont are to have Patrick Leahy and Bernie Sanders while I'm faced with John Cornyn and Kay Bailey Hutchinson and then to top it off Rick Perry.

There might be a few real liberals in Congress but there are a lot of people that go which ever the smoke blows. Obamocratic politics is destroying what was left of checks and balances in American politics, thus leaving all non-wealthy Americans more and more undefended against the class war perpetrated by the corporate robber barons and the gangsta bankers. This president bears no resemblance to progressivism, populism, leadership, backbone, or to express Democratic Party values. Many of us who supported this Trojan horse in the election of 2008 are waking up to the truth about the political fraud that sucked us in. To those who say, “But oh my gosh, he is the only alternative to the right-wing conservative Republicans,” I say: “Give me an opponent who tells me straight up that he opposes me and doesn’t pretend otherwise. A Trojan horse pretending to my friend is the greatest danger of all because he co-opts my defenses and opens the city gates against me from the inside.”

Peace

Alan
8-1-11, 2:50pm
Not into tweeting but already follow Bernie Sanders. I often think how lucky the people of Vermont are to have Patrick Leahy and Bernie Sanders while I'm faced with John Cornyn and Kay Bailey Hutchinson and then to top it off Rick Perry.

There might be a few real liberals in Congress but there are a lot of people that go which ever the smoke blows. Obamocratic politics is destroying what was left of checks and balances in American politics, thus leaving all non-wealthy Americans more and more undefended against the class war perpetrated by the corporate robber barons and the gangsta bankers. This president bears no resemblance to progressivism, populism, leadership, backbone, or to express Democratic Party values. Many of us who supported this Trojan horse in the election of 2008 are waking up to the truth about the political fraud that sucked us in. To those who say, “But oh my gosh, he is the only alternative to the right-wing conservative Republicans,” I say: “Give me an opponent who tells me straight up that he opposes me and doesn’t pretend otherwise. A Trojan horse pretending to my friend is the greatest danger of all because he co-opts my defenses and opens the city gates against me from the inside.”

Peace

So, do you think the Democrats should field a primary opponent to oppose his upcoming nomination?

Mangano's Gold
8-1-11, 4:00pm
And the liberal view would be, Alan's not paying his fair share. Charge him more.
Touche!

stuboyle
8-1-11, 5:08pm
What would have been the implications of approval of the Republican's Cut, Cap and Balance plan? I don't see where that was ever explained.

Would we have had to end Seniors prescription drug program? Would we have to moth-ball 2 aircraft carriers? Would it cut Federal Highway spending so our roads would begin deteriorating? Before I would get behind a plan like that I would like to know what we are getting ourselves into. I just don't think there are enough "bridges to nowhere" to balance the budget.

Zigzagman
8-1-11, 7:31pm
So, do you think the Democrats should field a primary opponent to oppose his upcoming nomination?
It's not really a question of what I think is it? I seriously doubt that anyone other than maybe Ralph Nader of some such candidate will dare simply because of the money considerations. I'm disgusted at the direction that my country that I served has sunk to such a low level and all because of greed, ignorance, and religious dogma. But it is what it is.

Peace

Alan
8-1-11, 8:08pm
It's not really a question of what I think is it?
Peace

Sure it is. Just look at what the Tea Party has accomplished in just a couple of years.

jp1
8-1-11, 9:56pm
Then why not lump in state/local/sales/property/excise/estate/gift & unemployment taxes along with duties and special use fees as well? We normally don't because they are not part of the federal income tax, which is what Iris Lily was referring to.

Except that, like Mangano said, FICA and federal income tax all go to the same place. The federal budget. Through SS's entire history the federal gov't has simply 'borrowed' all the fica money and spent it. Now Republicans are balking at the idea that the gov't needs to pay this money back in the form of SS benefits. And in all likelihood they won't. We'll have SS benefit cuts and means testing and whatever else they need to do to reduce the outflow to pay SS benefits. At the end of the day we may as well acknowledge that all along the FICA tax was just a regressive federal gov't tax that went to pay for current spending.

jp1
8-1-11, 10:00pm
Tenngal, all the things you mentioned as a result of budget cuts are sympotmatic of a much, much deeper societal problem. There comes a point when you have to stop just throwing money at problems and creating new programs to spend taxpayer money. I know a return to a time when families took care of their own is not possible or desirable - but ultimately - I mean pennultimately - where does the solution and the responsibility lie? With the individual...the destruction of the American family is but one aspect of the social/economic/welfare programs issues we have. It is painful, painful, painful to stand up for principles and change course...we are going to have to do that or go bankrupt..or surrender our soveriegnty to someone else (? don't know who - China maybe). This deal they are making in Washington right now is but a band-aid.

Personally I blame our federal reserve banking system on the destruction of the american family. Their creation of excessive money has resulted in too much money chasing speculative investments since they have simultaneously kept interest rates low enough that one can't protect one's wealth unless one gambles in the stock market and other investments with their savings. The result is that necessary costs like housing have risen far faster than average wages, so now most families need two wage earners to make ends meet. Sure, we could say that giving women equal opportunities in the workplace is good, but if that also means that they HAVE to enter the workplace in order for their families to survive have we really achieved much?

Rogar
8-1-11, 10:15pm
So, do you think the Democrats should field a primary opponent to oppose his upcoming nomination?

After the embarassing budget ordeal, seems things are ripe for some third party candidates. It would be interesting to see New York mayor Michael Bloomberg throw his hat in the ring. From what I've read, he's probably the best third party choice.

Alan
8-1-11, 10:29pm
After the embarassing budget ordeal, seems things are ripe for some third party candidates. It would be interesting to see New York mayor Michael Bloomberg throw his hat in the ring. From what I've read, he's probably the best third party choice.
I think there's enough division within the two parties already to crowd out the third party field. In my mind, the question is whether or not the far left wing of the Democrat party will attempt to primary the President in protest.

Gregg
8-8-11, 3:26pm
I think there's enough division within the two parties already to crowd out the third party field. In my mind, the question is whether or not the far left wing of the Democrat party will attempt to primary the President in protest.

For some real fun lets get the Donald to run as a Dem and primary the President thereby forcing Mr. Obama farther left. Yea, I know, not realistic, but sure fun to think about.

Zigzagman
8-8-11, 4:34pm
For some real fun lets get the Donald to run as a Dem and primary the President thereby forcing Mr. Obama farther left. Yea, I know, not realistic, but sure fun to think about.

I so hope you are correct (Obama further left) - if that is the case and his opponent just happened to be Rick Perry we would see the battle of the righteous!! And I predict a overwhelming Obama victory! Can you imagine a debate between Perry and Obama. Heck Perry even refused to debate in the last governors race :laff:

I just think that most Americans are not ready for the type of government that we have here in Texas. The polls have shown that only 4% of Texans would vote for Perry at the national level. I guess that means they don't mind a moron locally but not on the national stage?

I think once the SHTF economically those that used to think austerity was a good idea will soon realize it sounds good until it affects them.

Peace

Alan
8-8-11, 5:34pm
I so hope you are correct (Obama further left) - if that is the case and his opponent just happened to be Rick Perry we would see the battle of the righteous!! And I predict a overwhelming Obama victory! Can you imagine a debate between Perry and Obama. Heck Perry even refused to debate in the last governors race :laff:

I just think that most Americans are not ready for the type of government that we have here in Texas. The polls have shown that only 4% of Texans would vote for Perry at the national level. I guess that means they don't mind a moron locally but not on the national stage?

I think once the SHTF economically those that used to think austerity was a good idea will soon realize it sounds good until it affects them.

Peace
I've spent the last week in the great state of Texas, specifically in and around Dallas. Based upon your posts over the years, I'm truly surprised to see such a wonderful state filled with intelligent, hard working, industrious and happy people. And to think that those same people have not only elected, but twice re-elected Governor Perry.

I'm beginning to doubt your outlook Ziggy, although I'll give you the benefit of doubt since you're from Austin. I hear that's a whole nother state.

Zigzagman
8-8-11, 6:05pm
I'm beginning to doubt your outlook Ziggy, although I'll give you the benefit of doubt since you're from Austin. I hear that's a whole nother state.

I am assuming that you like Gov. Perry - if that is the case fine but tell me what you like about him. As far being "different" from most of the people in Texas, I take that as a compliment. Perry was elected with 37% of the vote in a 3-way race.That in no way makes him representative of the whole state. As far as Austin - next time you this way let me know and I'll show you why it is such a wonderful city - as cities go!!

I've told you before Dallas is actually part of Oklahoma! Not really into the Jerry Jones/JR Ewing (Dallas character) and Simple Living is not a Dallas thing, as far as I have experienced.

Peace

dmc
8-8-11, 6:10pm
I think there's enough division within the two parties already to crowd out the third party field. In my mind, the question is whether or not the far left wing of the Democrat party will attempt to primary the President in protest.

They are already turning on their own.

http://www.thedailybeast.com/articles/2011/08/07/hillary-clinton-2012-calls-grow-with-anger-at-obama-debt-capitulation.html

Catwoman
8-8-11, 6:40pm
Alan, Ziggy is just a contrarian. He still boasts like a Texas but only in reverse. Yes, bring it - Obama vs. Perry....I'm so ready!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Zigzagman
8-8-11, 6:49pm
Alan, Ziggy is just a contrarian. He still boasts like a Texas but only in reverse. Yes, bring it - Obama vs. Perry....I'm so ready!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Hey, it would probably be the best thing to happen in this country. It would be the battle of ideology. Good vs Evil, Black vs White, Business vs Workers, and Progressive vs Conservative, Peace against War.

Peace

Catwoman
8-8-11, 7:32pm
Well Ziggy, Who has the black hat and who has the white hat? On the one hand, I should have the white hat cuz I'm a nice little old lady school teacher...On the other hand, I have a bad@$$ attitude so black kinda feels right. I'm ready to take names and kick @$$. But you seem like a mellow kinda guy ....so I don't know...

Zigzagman
8-8-11, 8:01pm
Well Ziggy, Who has the black hat and who has the white hat? On the one hand, I should have the white hat cuz I'm a nice little old lady school teacher...On the other hand, I have a bad@$$ attitude so black kinda feels right. I'm ready to take names and kick @$$. But you seem like a mellow kinda guy ....so I don't know...
As long as I stick to weed and wine I'm pretty mellow but if I get off into the rum and coke or JD then I get radical.

Considering the fact that we really have very little to do with it, it could be fun unless they bring up the racial issues and you just know they will.

I wonder if we are making the same mistake that we made during the Great Depression? After the market crashing we had a very robust stock market until around 37 and then FDR pulled back in favor of austerity. I think we are doing the same. The only thing that will pull us out of debt malaise is increased revenue (changes in the tax code) and full employment. I don't think we want to go to through a long period of economic downturn - bad things happen during those periods.

http://www.thereformedbroker.com/wp-content/uploads/2011/08/DJIA-during-the-1938-Recession.png

Peace

jp1
8-8-11, 9:56pm
Hey, it would probably be the best thing to happen in this country. It would be the battle of ideology. Good vs Evil, Black vs White, Business vs Workers, and Progressive vs Conservative, Peace against War.

Peace

Rick Perry is for peace? I can only assume that's what you mean since the only indication that Obama is for peace is that he won an award with Peace in its name.

When I think of presidential candidates for peace I think of JFK's American University speech. I haven't seen any sign of any even remotely similar conviction from Obama.

Zigzagman
8-8-11, 10:12pm
Rick Perry is for peace? I can only assume that's what you mean since the only indication that Obama is for peace is that he won an award with Peace in its name.

When I think of presidential candidates for peace I think of JFK's American University speech. I haven't seen any sign of any even remotely similar conviction from Obama.

True - I will have to take that back. I never thought of Obama as a war monger but he ain't exactly a Dove. I guess it might be "compared to what"

Peace

Mangano's Gold
8-8-11, 10:25pm
Rick Perry: AKA Obama's best shot at being President until 2013.