Wednesday, January 03, 2007

Back on Track

Bush Wants Balance Budget by 2012


Robert C. said...

A balanced budget would be great! Who does President Bush suggest we tax to accomplish this worthy goal?


paul said...

Why do we have to increase taxes? Why can't we cut spending?

Robert C. said...

Why can't we cut spending? That's Steve's usual question, too.

Is there a war you wanted to stop fighting? Should we end Medicare, Medicaid, or Social Security?

I don't think President Bush has shown much interest in cutting spending. Medicare Part D, for example, is a big new cost that's he's signed into law. Earmark reform should help cut some discretionary spending, but non-defense discretionary spending isn't really the central problem here. We should still cut wasteful discretionary spending, of course, but it won't fix the deficit by itself.

Personally, I don't want to end Social Security--and privatizing SS wouldn't make a (positive) difference in the budget deficit. And I think we need to make our military decisions based on our military needs and national interest, apart from budgetary concerns. So we're left with Medicare/Medicaid. Those programs are big, and will need to be changed -- but I can't see those programs going away altogether, or becoming much cheaper than they are. The most likely scenario is that the Federal government would put more costs onto the states.

So we're left with a budget deficit, or with increased taxes. Are the budget deficit and the national debt harmful to US interests? I think that's the consensus.

For individuals, it's usually better to pay of debt sooner rather than later, right? Because the interest is a killer. Obviously, the economics of our country are more complex. But it might be better for us to raise taxes rather than go deeper in debt.

I just don't see what serious spending we can cut. Even assuming you had all the political will in the world, what should we cut?

paul said...

How about ending the war on poverty?

this is funny. liberals bequeath us social programs (SS, medicare) that bust the budget and then wonder how we're going to pay for them. Bush cut taxes and revenue to the treasury increased. that money could have been used to pay down the debt/ reduce the deficit. the problem was when pols (of both parties) got their hands on that revenue and spent it to buy votes.

there's plenty to cut from the budget. just check

Robert C. said...


You're right to think that there's plenty to cut from the budget. But everything we "can" cut is non-defense discretionary spending, and it's drop in the bucket. CAGW identified $29 billion in pork in 2006. That's a lot -- but not compared to the size of the deficit. Yes, we should cut that wasteful spending, but we can't end the deficit--much less pay down the debt--by cutting that spending.

You'd like to cut Social Security and Medicare? That's a tenable position; we could cut those programs, eliminate the deficit, and ease the tax burden on all Americans. I don't think it's politically feasible, and I don't think that's what Americans want, but that's a reasonable position.

Personally, I'd like to keep those programs around, and keep our military strong, and pay down the deficit as well. Maybe we can't do all those things without raising taxes back to Clinton-era levels. I think higher taxes might be lessor of two evils here--provided we can get Congress to cut pork, reform the appropriations process, and stick to a balanced budget. Raising taxes doesn't make sense if it's simply going to fund profligate Congressional spending (the Bridge to Nowhere being the most well-known example). The new Congress has taken a step in the right direction with earmark reform.

Anonymous said...

Er, what do we mean by the "War on Pverty"? That was LBJ's label for his program. But you cannot actually go to the budget and look under the file that says "War on Poverty.?

Want to cut programs? then have the politicians who represent you get up and say "I want to cut social security," "I want to cut medicare," "I want to cut madicaid," "I want to cut AFDC," "I want to cut school lunch programs." If this is what conseravtive politicians want, they should get up and honestly propose such things. But few conservatives want to do so. It is much better to use these prigrams as whipping boys than honestly to confront them and lose badly.

I do not see how the math works, at least in a time of war, simply to cut taxes. And I have no idea what the problem is with paying taxes -- I'm old fashioned: if I want something, I feel like I mought to pay for it. So you either tax and also spend, or you do not tax but you also don't spend. Conservatives rail on the former, yet have never accomplished the latter even when they have had control of either the White House, the Congress, or both. i assume that we all agree that the other options: tax and don't spend and don't tax but spend are irresponsible. Oh wait -- this latter has been precisely our approach for the last six years. Cunning.


paul said...

just so there's no confusion and the argument doesn't continue on for 40 posts, I am a small government advocate. that means no federal fraudulent, forced retirement schemes, no federal government buying lunches for people (kids or adults), or paid medical care. I would run on that platform and yes I would lose. because the American people have been conditioned to think that the federal government is responsible for those things. Where does it end? when will the government start paying for car insurance, hi-def tvs, computers...?

I don't measure compassion by how much government (other people's) money I can advocate spending.

I'm happy you like to pay taxes. maybe you should volunteer to pay more.

Anonymous said...

Paul --
Yours is an admirable stance in a way, though why you would want poor children not to get free lunches is a little perplexing. And I'm not quite sure what is "fraudulent" about any of the programs we have mentioned in this discussion. Please explain -- does "fraudulent" simply mean "stuff Paul does not like"? Because you do not seem to be using the word right.

I guess I could offer to pay more in taxes just as I guess you could offer to take less in federal (and state) services. Did you go to a state university at any point in your life? Massively subsidized. Have you ever driven on an interstate? Massively subsidized. Have your parents or grandparents ever cashed social security checks? I could go on and on.

Again -- I think your stance is idealistic, but the majority -- the overwhelming majority -- of the American people think you are worng. I'll offer to pay more taxes if you offer to refuse any of the services for which those taxes pay. Tellingly, in almost all cases, blue states subsidize the hell out of red states, so those of us who willingly support paying our taxes and are willing to pay more are at least not working out of sheer self interest. So not only should you take fewer public services, you should encourage the people in a huge number of conservative states to do the same in toto. Do that, and I'll start turning this into an idiot's babbling match about whether individuals in this disvussion ought to pay more taxes on their own, which really is utterly irrelevant.


paul said...

Yeah, I want to starve children and old people. You got me. Assuming that's what would happen if the wonderful, benevolent federal government didn't provide those things.

The point about me using federal government sevices was moot (and an insult to my intelligence). The real issue is this: are these legitimate Constitutional functions of the FEDERAL government? I happen to think they aren't. Maybe that makes me an uncompassionate monster. Or maybe it makes me an advocate of a small federal government.

Fraudulent: taking 15% of a person's income and a.) paying them a pittance in return if they live to 65 (or maybe older, if the retirement age is raised b.) paying their next of kin nothing if they die before they reach that age or c.)redistributing it to other people in the name of compassion.

"I'll start turning this into an idiot's babbling match ..."
You did this when you posted your first comment on this thread.

I made three simple points and I will not waver on them: I want the federal government to be as small as possible, revenue to the tresury increased when taxes were LOWERED (Kennedy, Reagan, Bush 43) and I think spending should be cut before taxes are raised. I will NEVER agree with big government socialism no matter how many insults you hurl or no matter how many snide, snotty, know-it-all comments you make.

Robert C. said...

Paul, if you're a regular reader of bigtent you may be familiar with dcat's particular style. I agree that your use of government services is irrelevant to the situation. Let's assume that dcat was just attempting to mirror your suggestion that he pay more taxes.

I don't think that revenue always increases when taxes are lowered. I think there's a sweet spot where taxes will generate the most income, but that sweet spot changes.

The simplest explanation to me seems to be that advocates of small government always say that lower taxes generate more revenue, while advocates of big government say that higher taxes generate more revenue. I just assume that profligate spenders have a greater interest in generating revenue, so I trust their explanation that higher taxes = higher revenue. (The small-government advocates, on the other hand, have an inherent interest in lower taxes, so it's rather convenient for them to claim that their lower taxes will actually increase revenue.) If lower taxes meant higher revenue, then big-government policy wonks would be in favor of low taxes.

Sometimes, when we raise taxes, revenue increases, yes?

We can decide -- as a society -- that we want to redistribute 15% of everyone's incomes. That doesn't make the redistribution fraudulent, does it? I understand your use of that term -- I just don't think it's a particularly useful term for describing the situation accurately, or for convincing opponents of your claims.


Maybe you're right -- maybe we should end social security. It does seem expensive. You don't get much. We'd be better off investing the money ourselves--even in a simple savings account.

Why should we keep it around? Somebody tell me.

paul said...

I agree with most of your points, RC.

"I don't think that revenue always increases when taxes are lowered. I think there's a sweet spot where taxes will generate the most income, but that sweet spot changes. "
Yes, I am familiar with the Laffer curve. I teach economics. And I guess fraudulent was not the best word to use to describe SS. But robbing Peter (current taxpayer) to pay Paul (SS recipient) and then scaring the hell out of Paul doesn't seem to be the most viable way to run a government program. Like you said, it has become an instrument of income redistribution and we would get more of a return from a simple savings account. The worst part about SS is that it has become a political tool used to scare old people into thinking that they will starve in the streets without it. That fact backs up the point I made about the American people being conditioned to think that the federal government should
handle these sorts of things.

Stephen said...

Paul, meet Robert. Robert, meet Paul. You are both friends of mine. I am happy to read the exchange between you two. If you were to ever meet, you would like one another. I think your exchange shows a basic decency and honesty that would be very productive in public life were it practiced more often.