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CaliAtenza
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"Defusing The Debt Bomb"

Tue Mar 16, 2010 6:24 am

http://www.newsweek.com/id/234277

Seems pretty radical to me, but also something that could work..thoughts?
 
baroque
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 4:11 pm

Quoting CaliAtenza (Thread starter):
Seems pretty radical to me, but also something that could work..thoughts?

Non Americans are going to say "told you so" and Americans are mostly going to say OMDB.

Just wish it was a more useful topic to discuss, after all, none of us profit from having the US turn into a basket case. Not even those who think they are dodging taxes.

We had a guy from the US on our TV this week, was a fin guru during Clinton times and he gave the most plausible explanation of how the Sub P crisis came about. Wish I could remember his name and I would cite his interview which will be somewhere on the ABC site.

Good luck with the thread..
 
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Dreadnought
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 4:47 pm

I wouldn't mind, but no Statist Democrat will ever agree to lower income taxes on the rich while putting in a VAT. It's "not progressive".

But the proposed rates are too high. We need to reduce spending, and a vast majority of federal spending is taken up by entitlement spending. Another thing that Statist Democrats will never vote to decrease.
Democrats haven't been this angry since we took away their slaves.
 
Arrow
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 5:11 pm

Quoting Baroque (Reply 1):
Non Americans are going to say "told you so" and Americans are mostly going to say OMDB.

Nice little summation, Baroque,and right on the money. It is encouraging, though, to see someone with a pragmatic approach to what seems like an insoluble problem.

Dreadnought has a point about the rate. Our national sales tax (GST) started at 7% and, interestingly, was implemented at a time when Canada was also mired in horrendous debt and running annual deficits. It worked (combined with spending cuts), and as the country's economic fortunes improved, the tax was knocked down first to 6% and now to 5%. There are those who think it should now be jacked back up to 6% or even 7% because of course once again we are in deficit territory.

The US, unfortunately, is governed by one party that can't see the need to reduce spending and another (in opposition) that can't see the value in raising taxes. Zakaria alludes to this in his last line. Canada finally saw the light when the Wall Street Journal ran a scathing commentary on our debt/deficit situation and called the Canadian dollar the "Northern Peso." That woke a few folks up. I have no idea what it will take to wake Americans up -- a US dollar in the tank maybe?
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StarAC17
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 5:30 pm

Quoting Dreadnought (Reply 2):
We need to reduce spending, and a vast majority of federal spending is taken up by entitlement spending.

I agree but cut this in the right places such as the massive pork that goes to private military contractors that basically get a blank check from the federal government. I have heard that 51 cents to every dollar in federal taxation goes to the US military industrial complex (I'm skeptical of this) and that needs to be cleaned up immensely. I'm not suggesting shrinking the military but if any government thing should be run like a business that one should be.

Also cut out the war on drugs (or at least on pot) and tax the hell out of it, or let the states do it without federal interference. The DEA also gets a blank check to fight this 30 year war which has done nothing to curb drug use and has only succeeded in making the US the country which has the highest incarceration rate in the world, something else that has to cost a boatload in government spending.

Also if the US legalized or decriminalized pot then Canada would likely follow in a heartbeat which helps us get needed tax revenue as well. I think the reason we haven't yet is because if we did we would essentially be treated like an enemy state to the US and I believe the DEA has said basically "Don't you dare" to Canada doing this when it was proposed in 2004.
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Dreadnought
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 5:48 pm

Quoting starac17 (Reply 4):
I agree but cut this in the right places such as the massive pork that goes to private military contractors that basically get a blank check from the federal government. I have heard that 51 cents to every dollar in federal taxation goes to the US military industrial complex (I'm skeptical of this) and that needs to be cleaned up immensely. I'm not suggesting shrinking the military but if any government thing should be run like a business that one should be.

You should be skeptical... Military procurement, research, development, test and evaluation makes up only 6% of the budget. I don't know where you got that 51% number but they are lying.

Quoting starac17 (Reply 4):
Also cut out the war on drugs (or at least on pot) and tax the hell out of it, or let the states do it without federal interference. The DEA also gets a blank check to fight this 30 year war which has done nothing to curb drug use and has only succeeded in making the US the country which has the highest incarceration rate in the world, something else that has to cost a boatload in government spending.

All I know is that the last thing I want is to hire potheads in my company. All you are going to do is ensure that an even larger part of the population are perpetually unemployable.
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StarAC17
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 6:34 pm

Quoting Dreadnought (Reply 5):
All I know is that the last thing I want is to hire potheads in my company. All you are going to do is ensure that an even larger part of the population are perpetually unemployable.

The notion that the legalization of a drug will increase the usage is not a correct one, if people want pot now they will get it anyways. The rate of casual use might increase but a casual pot user is far less of a danger to society in general than a casual drinker.

Look at the success that Portugal has had when it decriminalized everything, usage went down and HIV infections from hard drugs like heroin dropped as well.
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Dreadnought
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 6:53 pm

Quoting starac17 (Reply 6):
The rate of casual use might increase but a casual pot user is far less of a danger to society in general than a casual drinker

There is a difference. A guy stepping outside to smoke a cigarette can still come come back inside a drive a train, or negotiate a contract. Not so when he goes out and smokes a joint. The fact that people are forced to keep it at home or off-duty ensures that people don't bring it to work.

And before you talk about booze being legal, the idea of it being forbidden to bring liquor to work has been around for centuries, and a vast majority of people obey that. Most of the pot-smokers I know feel no guilt about a splif at school or at work if they feel they can get away with it.
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lowrider
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 7:49 pm

I don't like the idea of having both a VAT and an income tax. We need to choose one or the other. They each have thier benefits and problems. If we don't, over time, everyone will eventually be paying both. Another problem I have with the article is it doesn't address cutting government spending. Zakaria uses words like "adjusting" or "changing", but not reducing. When you are getting behind on debt, the first thing you do is start cutting expenses and diverting that money to paying off the debt. Ultimately, I see the goals as being 1. Debt elimination, 2. a reduction in tax revenues with 3. the ultimate goal of reducing the size and scope of the federal government. I would also like to see a Constitutional amendment requiring a 2/3 majority to create, or increase, tax rates or fees.
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gatorfan
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 7:56 pm

A VAT has tremendous policy benefits as taxing consumption rather than income encourages savings and long-term investment.

However, if we allow a VAT tax in addition to an income tax, no matter how low the initial rate is set at the size of government will grow because elected leaders have no ability to control spending. This isn't a democrat or republican thing, it's a politician thing.

The fact of the matter is that one gets elected in the United States promising people stuff. That stuff costs money. The more money the gov't has, the more it's going to spend. Think about this - if the US gov't reduced spending to 2007 levels, it would be within a stone's throw of balancing the budget. That's 2007 (including both wars and the surge).

Politicians are crack addicts. You don't wean a crack addict off the stuff - you force them through rehab.

You'll never get Congress to agree to replace our income tax with a VAT because the tax code is the greatest mechanism the US Congress has to either favor or punish industries and players in them. To eliminate the income tax code is to reduce the power of Congress by more than 50%. Do you really think either party would go for that? I don't.
 
Arrow
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 8:04 pm

Quoting lowrider (Reply 8):
I would also like to see a Constitutional amendment requiring a 2/3 majority to create, or increase, tax rates or fees.

California, here we come. There's one ungovernable state in the Union, why not make 50?
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lowrider
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 8:19 pm

Quoting arrow (Reply 10):
California, here we come. There's one ungovernable state in the Union, why not make 50?

Could you expound on that a little? I simply want to make it more difficult for the government to confiscate other people's money. I also want the higher ranking, more prominent political figures to have to vote on these increases. You will never see a Representative or Senator who has higher political aspirations at a vote which will directly raise taxes. They are all off giving speeches that day and leaving the dirty work to the relative unknowns. If that means Congress has to learn a little fiscal discipline, so be it. Surely you are not going to argue that Congress has been doing a good job of living with thier means?
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Arrow
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 8:44 pm

Quoting lowrider (Reply 11):
Could you expound on that a little?

Sure. California's inability to get a budget passed is the result of a similar provision in the state legislature -- and it's the only state that does this. How many times were they on the verge of having no money to run the place? It is a rare jurisdiction indeed where you'll be able to generate a 2/3 vote, these days, in favour of anything. It effectively gives the minority party (Republicans in this case) a veto over anything proposed by the majority party. I don't see that as democracy.

You want a 2/3 majority? Fine, apply it to everything, not just money bills. See how government functions then. Or better yet -- get rid of the government entirely and just run initiatives/propositions every time you want to do something. Wonder how long that would last. Sorry, but I've always been a believer in representative democracy.

Quoting lowrider (Reply 11):
You will never see a Representative or Senator who has higher political aspirations at a vote which will directly raise taxes.

That's because the "masses" don't like to be told the truth -- much as they say they would. The politician these days who levels with the people -- i.e. he points out that you can't have low taxes and high services -- won't get elected to dogcatcher. This is not just an American phenomenon.
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lowrider
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 8:58 pm

Quoting arrow (Reply 12):
Fine, apply it to everything, not just money bills. See how government functions then.

I believe the term overkill was invented to describe this sort of thinking.

Quoting arrow (Reply 12):
Or better yet -- get rid of the government entirely and just run initiatives/propositions every time you want to do something. Wonder how long that would last. Sorry, but I've always been a believer in representative democracy.

Again, missing the forest for the trees. We have different levels of agreement required for different functions. Some things only need a simple majority because they are a relatively minor functions. Other things, like taking money from the citizens or changing the Constitution, should be difficult, lest the be subject to the whims of what ever party can put together 51% of the votes present. That is not a representative democracy, and it is not rule of law. It is rule of politcal whim.

Quoting arrow (Reply 12):
That's because the "masses" don't like to be told the truth -- much as they say they would.

Maybe not, but that doesn't mean we have to make it easy for politicians to hide. If these people are to represent us, we should be in favor of means to hold them accountable and measure how well they are representing our interests.
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MD11Engineer
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 9:21 pm

Quoting Dreadnought (Reply 7):
And before you talk about booze being legal, the idea of it being forbidden to bring liquor to work has been around for centuries, and a vast majority of people obey that.

Not really. Up to a few decades ago, it was quite customary here in Germany and also in the UK and Ireland to have a bottle of beer with your lunch at work (or a few glasses of wine in France, Italy and Spain). Ok, you were not supposed to be drunk at work.
Back in the late 1980s I used to work on German construction sites and having a bottle or can of beer while working was quite normal (we made jokes about the one thing we learned on the job was to be able to open a beer bottle with about any tool, from yardstick through cigarette lighter to a carpenter´s clawhammer. The common stereotype of a bricklayer showed him with a bottle of beer besides his mortar tub).

Jan
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Arrow
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 9:22 pm

Quoting lowrider (Reply 13):
Some things only need a simple majority because they are a relatively minor functions. Other things, like taking money from the citizens or changing the Constitution, should be difficult,

I agree that changes to a Constitution should be difficult and require more than a simple majority. But just about everything else done in a legislature has a money component and if you hold those to a 2/3 vote, you'll get paralysis -- just like in California. And you get the tail wagging the dog.

You see setting taxation levels as "confiscating money from citizens." That's a somewhat loaded, and fairly cynical, description of the process. I see it as funding services that, presumably, people want. If you don't like that, then you have to elect people who won't fund services you don't think should be funded. If you can't succeed on that score, setting up arbitrary voting rules -- like requiring a 2/3 majority -- is just a means of the minority opinion frustrating the majority opinion. Explain how that is democratic.
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FlyDeltaJets87
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 9:37 pm

Quoting Baroque (Reply 1):
Non Americans are going to say "told you so" and Americans are mostly going to say OMDB.

This American has been agreeing with the dropping of the federal income tax in favor of the national sales tax (known as the "Fair Tax" and called the VAT in this thread) here in the US for quite some time, as have many others.

Quoting Dreadnought (Reply 2):
I wouldn't mind, but no Statist Democrat will ever agree to lower income taxes on the rich while putting in a VAT. It's "not progressive".

But the proposed rates are too high. We need to reduce spending, and a vast majority of federal spending is taken up by entitlement spending. Another thing that Statist Democrats will never vote to decrease.

Well I think we summed up everything that needs to be summed up by post 2.
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lowrider
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 10:05 pm

Quoting arrow (Reply 15):
But just about everything else done in a legislature has a money component and if you hold those to a 2/3 vote, you'll get paralysis

But I only said I would require it for raising or creating taxes and fees. Not spending them. And it is the spending that makes up the vast majority of the bills. California-crippling budget bills included.

Quoting arrow (Reply 15):
You see setting taxation levels as "confiscating money from citizens

Yes I do. You go and engage in some activity to generate money. The government steps in and says, "you will give us X amount" under threat of force. If you refuse, you get fined, and possible imprisoned. How is that not confiscation?

Quoting arrow (Reply 15):
is just a means of the minority opinion frustrating the majority opinion.

Let me answer it by asking you this, is the majority always right? Must we always go with what 51% wants? Consider that a minority of Americans pay the majority of the income tax. This means that the majority of Americans can vote for candidates who would further tax this minority. Do minorities deserve protection from being trampled by the majority?
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StarAC17
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 11:37 pm

Quoting arrow (Reply 10):
California, here we come. There's one ungovernable state in the Union, why not make 50?

  

This system has made it impossible in any circumstance to either raise taxes or cut spending no matter who's in charge.

Quoting lowrider (Reply 17):
Consider that a minority of Americans pay the majority of the income tax. This means that the majority of Americans can vote for candidates who would further tax this minority. Do minorities deserve protection from being trampled by the majority?

That same minority has a far greater percentage of the wealth in the US than the taxes they pay. The top 2% in the US have more money than the entire bottom 50%.

Quoting lowrider (Reply 17):
Let me answer it by asking you this, is the majority always right?

Not always but when a certain party is elected to a majority representation they should in a democracy get to call the shots and if that majority starts messing stuff up like the GOP did 4-7 years ago, or the dems in 1992-93. They get turfed by the ballot. Simply paralyzing the government may be politically the smart thing for the opposition, but it fails in actually getting anything done.
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baroque
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 11:47 pm

Quoting arrow (Reply 3):
I have no idea what it will take to wake Americans up

   I suppose one dare not say a bomb underneath them these days, but it used to be a fashionable saying. Trouble was some groups took it literally.

Quoting arrow (Reply 3):
a US dollar in the tank maybe?
Quoting arrow (Reply 15):
You see setting taxation levels as "confiscating money from citizens."

The Fin Ed of the SMH is always on about humans and their asymmetry of perception. As in if I give you $50 is is about 1% as significant as TAKING $50 from you. So the good that you receive is considered less than the money taken to pay for that good. Well one way or another, with our less tense view of paying tax, Aus seems in a better position in terms of Fed debt than the scrooges of the US. The trouble is that as with most things, US influence re tax is becoming larger and larger with the most likely election slogan later this year being (for both sides) "A great big new tax on everything". Totally meaningless in the end. Somebody has to bloody well pay unless we all decide to want nothing all of a sudden.

Quoting FlyDeltaJets87 (Reply 16):
Quoting Baroque (Reply 1):
Non Americans are going to say "told you so" and Americans are mostly going to say OMDB.

This American has been agreeing with the dropping of the federal income tax in favor of the national sales tax (known as the "Fair Tax" and called the VAT in this thread) here in the US for quite some time, as have many others.

I did say "mostly". If you do get a nat sales tax, or VAT, do not expect federal income tax to disappear entirely though.

Our version callled a Goods and Services Tax, GST seems to have proved relatively easy as long as you are not in the food business - there it is complicated because uncooked food is GST exempt and cooked is not, or something close to that. Otherwise for business GST is just fine, although this quarter I think I have a larger whack than normal to pay. But the GST on your invoices is offset against GST paid - of course you need to keep receipts.
 
MoltenRock
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RE: "Defusing The Debt Bomb"

Tue Mar 16, 2010 11:51 pm

Quoting Dreadnought (Reply 5):
You should be skeptical... Military procurement, research, development, test and evaluation makes up only 6% of the budget. I don't know where you got that 51% number but they are lying.

Then provide a link, which will be impossible for you since you are DEAD WRONG! "6%"?!? LOL! Get real!



[Edited 2010-03-16 16:58:07]
 
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RayChuang
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 12:15 am

How about a more radical solution: FairTax (H.R. 25/S. 296).

Here's a huge problem: American citizens and companies have taken US$15 TRILLION out of the US financial system, either by participating in the underground economy or using tax loopholes to funnel American-owned liquid assets to financial institutions beyond US borders, all in the name in income tax avoidance. That's US$15 TRILLION that if returned under better tax circumstances would go a long way towards curing America's economic ills.

Under FairTax, we no longer impose taxes on the process of earning money. That means no more incentives to take money out of the US financial system as a means to reduce income taxes (since income taxes no longer exist!), and that could mean our banks are made whole again, many distressed companies are made whole again, and because of no more payroll and corporate income taxes, it means American companies can bring back millions of outsourced jobs, drastically lowering the unemployment rate.
 
lowrider
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 12:21 am

Quoting starac17 (Reply 18):
That same minority has a far greater percentage of the wealth in the US than the taxes they pay. The top 2% in the US have more money than the entire bottom 50%.

Consider that the top 1% of the country in 2006, approximately our most recent economic peak, earned about 18.4% of pre-tax income. This same 1% paid approximately 26.2% of federal income taxes. If they paid 18.4% of federal income tax, then I would agree that they paid a representative share. This is not the case however. The numbers do not get better as you progress through the quartiles. For example, the top 50% of wage earners brought in 87.17 percent of the income, but paid 96.37% of federal income tax. The bottom 50% earned 12.83% and paid 3.07%. That means those who paid in 3% +1 can indirectly control how the other 50% is taxed and how that money is spent.

This is why the message of "vote for me so I can raise taxes on those rich guys works so well.

Quoting starac17 (Reply 18):
Simply paralyzing the government may be politically the smart thing for the opposition, but it fails in actually getting anything done.

It would handicap both sides equally. Both major parties have screwed the pooch in recent history when it comes to responsible spending of the public monies they are entrusted with. Since they have proven themselves generally unworthy of the amount of trust they have been given, maybe it is time to take a little away. We make it harder for them to get thier allowance, and maybe they will apprciate what they have a little more, and not be so quick to piss it away.
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FlyDeltaJets87
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 12:32 am

Quoting MoltenRock (Reply 20):

What's the source for this pie chart? Oh here, I found it:
http://www.warresisters.org/pages/piechart.htm

Nah, that's not biased at all!   

Now let's look at the Pie Chart from the Federal Government:

Federal Pie Chart
Yes, it's linked to Wikipedia, but Wikipedia cites it to the Federal Government.

Yea, those numbers look a little different than the CRAP you post.    Is military spending high? Yes. But not the 50 % you post.
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cptkrell
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 12:53 am

Yeah, FlyDeltaJets...according to the Congressional Budget Office; White House Office of Management and Budget, as a percentage I read (verbage; haven't accessed a chart yet) the figures tallied on '09 were 21% of the budget went to defense spending, 21% to Social Security and 20% for Medicare, Medicade and children's health. I won't go through all the list, but amazingly, only 2% fo education.

Anyhoo, it ain't near what the War Resisters League sez. regards...jack
all best; jack
 
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Dreadnought
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 1:01 am

Quoting MoltenRock (Reply 20):
Then provide a link, which will be impossible for you since you are DEAD WRONG! "6%"?!? LOL! Get real

Molten... No, I won't say it.

Here was the source of my data.

http://www.gpoaccess.gov/usbudget/fy11/sheets/hist03z2.xls

That's the official budget for FY 2011. I think it's more authoritative than your so-called source.

Quoting cptkrell (Reply 24):
Yeah, FlyDeltaJets...according to the Congressional Budget Office; White House Office of Management and Budget, as a percentage I read (verbage; haven't accessed a chart yet) the figures tallied on '09 were 21% of the budget went to defense spending, 21% to Social Security and 20% for Medicare, Medicade and children's health. I won't go through all the list, but amazingly, only 2% fo education

Because nearly all education is paid for at the state and local level, not the federal government.

[Edited 2010-03-16 18:03:37]
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cptkrell
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 1:08 am

Ahhhh...Dreadnought; I stand informed. Thanks....jack
all best; jack
 
FlyDeltaJets87
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 1:30 am

Quoting Dreadnought (Reply 25):
That's the official budget for FY 2011. I think it's more authoritative than your so-called source.

When it comes to MoltenRock, are you honestly shocked though? Because I'm not...
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texan
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 3:25 am

Quoting Dreadnought (Reply 2):
I wouldn't mind, but no Statist Democrat will ever agree to lower income taxes on the rich while putting in a VAT.

The Repubs controlled Congress for, what, 12 years? Had a Republican President for six of those? And they failed to pass anything like it or even seriously consider it. Neither party would dare pass something like this, regardless of its merits or lack thereof, even though some individual members have been advocating for it for years.

Texan
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Dreadnought
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 3:31 am

Quoting texan (Reply 28):
The Repubs controlled Congress for, what, 12 years? Had a Republican President for six of those? And they failed to pass anything like it or even seriously consider it. Neither party would dare pass something like this, regardless of its merits or lack thereof, even though some individual members have been advocating for it for years.

I'll remind you that there is a very sizable movement among conservatives to eliminate the current monstrosity we call a tax system with something similar to what has been proposed here, but have been unable to build enough of a majority to do it. Maybe once the Dems are booted from office and we are faced with having to fix this gawd-awful mess we might be able to pull it off. Wanna join us?
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texan
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 3:46 am

Quoting Dreadnought (Reply 29):
Wanna join us?

If I thought the Repubs had a plan and could actually do anything about it, I probably would. But neither party has shown the ability to do a damn thing about it. So while we agree that the Dems aren't doing anything about it, the Repubs haven't been either, and I highly doubt they will anytime in the near future (next 5-10 years). I'll go for someone else.

Texan
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TheRedBaron
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 4:42 am

Quoting Dreadnought (Reply 5):
All I know is that the last thing I want is to hire potheads in my company. All you are going to do is ensure that an even larger part of the population are perpetually unemployable.

You assume that if pot is legal EVERYONE and their dog will go buy tons of weed. That is not the case.

Quoting starac17 (Reply 6):
The notion that the legalization of a drug will increase the usage is not a correct one, if people want pot now they will get it anyways. The rate of casual use might increase but a casual pot user is far less of a danger to society in general than a casual drinker.

Correct.

I always find it amusing that a country so rich is now in the tank and cannot drive itself out of the financial mess. But hey I live in Mexico and we are even worse, one word POLITICIANS.

TRB
The best seat in a Plane is the Jumpseat.
 
MoltenRock
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 4:59 pm

Quoting Dreadnought (Reply 25):
Molten... No, I won't say it.

Here was the source of my data.

Ok, using YOUR source how in Hades did you come up with "6% of the budget"???

Let's go thru it. Defense department is: $750 billion, $125 billion on the Veterans Administration to pay for the military members, and $499 billion to pay interest on the debt, which experts cite anywhere from 30% to 60% belong to the military and unpaid for wars, missiles, planes, etc... that haven't been paid for yet. Let's use 35% for our example. $499 x's 35% = $175 billion. So we have $750 billion, + $125 billion, + $175 billion which equals $1.05 trillion for 2011. (This does not include the military dollars the US "gives" as foreign aid which are military purchases, various aspects of the CIA and NSA, scientific research done using civilian funds for the military, plus others).

How does $1.05 trillion equal 6% of $3.255 trillion total spending when it's about 1/3? Or as the pie chart I posted above used discretionary spending which is closer to 50% of all spending??? How do you come up with 6%?
 
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Dreadnought
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 5:28 pm

Quoting MoltenRock (Reply 32):
Ok, using YOUR source how in Hades did you come up with "6% of the budget"???

This was the original charge:

Quoting starac17 (Reply 4):
I have heard that 51 cents to every dollar in federal taxation goes to the US military industrial complex

By "military industrial complex", that typically means the corporations that develop and supply military hardware, like Boeing and Raytheon. Those would be covered by lines 8 and 9 in the spreadsheet, about $226 billion this year. Divide by total outlays of 3.2 trillion = 6%, a rate which is pretty consistent over the past several years.

If you want to argue that other line items, including salaries paid to military personel, belong in the same category, I don't care. But the grand total of ALL military spending is still 692 billion, or just over 20% of the budget - a LONG way from 51%.
Democrats haven't been this angry since we took away their slaves.
 
MoltenRock
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 6:27 pm

Quoting Dreadnought (Reply 33):
If you want to argue that other line items, including salaries paid to military personel, belong in the same category, I don't care. But the grand total of ALL military spending is still 692 billion, or just over 20% of the budget - a LONG way from 51%.


So you're saying that 6% of all taxes raised by the government went towards purchasing military equipment from companies like Boeing, Lockheed, Rockwell, et al? So contracts for military construction don't count in that 6%? Nor does any maintenance for which Boeing and many others get multi-billion contracts to carry out on behalf of the US military? What about all those planes, ships, bases, tanks, satellites, etc... that the US government bought under Reagan / Bushes that were paid for with IOUs? How can you not count the interest on those IOUs as "military spending"? What about the direct spending budgeted under the "foreign aid" section that are trade credits to buy US military hardware from Beoing, Lockheed, et al? (To me the "military industrial complex" is the standard definition of it, which is: the armed forces of a nation together with the industries that supply their weapons and materiel. It includes the military's budget plus the other portions you mention.

Again it's semantics. It is 50% +/- of discretionary spending, and more like 33% vs. 20% because the 20% figure doesn't include nuclear weapons, the VA, and additional funds that were used to fight optional wars. Iraq is the biggest example of an optional war. Iraq had nothing to do with the 9/11 attacks. But how can you not include the Veteran's Administration for giving care to injured war vets who receive billions of dollars in care every year due specifically to their war injuries, be they mental, emotional, or physical? What about paying for the disability payment for those wounded soldiers, and in 4,000+ cases paying out survivor's payments for a wfie/husband/mom/dad/etc for giving their lives to fight in these wars?

You cannot propose "cutting spending" without looking seriously at slashing the military budget less than 35% or more. This canard of cutting taxes more (lol) and cutting spending aren't grounded in reality. When I hear many American's (usually of the Republican bend) claim the US needs to cut spending and yet in the same sentence say that the military, non-discretionary spending, and paying the interest on the debt as "off the table" in cutting it makes me chuckle. Taking those off the table means you are taking about 85% of all spending "off the table", much less than claiming tax cuts are in order.



[Edited 2010-03-17 11:34:54]
 
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Dreadnought
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 6:57 pm

Quoting MoltenRock (Reply 34):
Again it's semantics. It is 50% +/- of discretionary spending

Maybe it's semantics to you, but the whole idea of "discretionary" spending bothers me, because of the implication of "non-discretionary" spending.

ALL government spending is discretionary to some extent. National defense is the first duty of any government, so I would consider military spending to be required to a great extent. The other extreme, pork barrel projects and income redistribution programs like welfare are to me highly discretionary. I consider it brutally dishonest how politicians create an expensive program like Medicare, and then say it's non-discretionary - "You can't touch it!". Sorry, but if the government overpromised an entitlement, the entitlement will have to be trimmed down or eliminated - a simple fact that our government has yet to come to grips with. We the taxpayers refuse to be left holding the bag for very much longer.

Quoting MoltenRock (Reply 34):
You cannot propose "cutting spending" without looking seriously at slashing the military budget less than 35% or more.

I will consider that once Welfare, Medicare, and Medicaid are cut by 35% or more.

Quoting MoltenRock (Reply 34):
This canard of cutting taxes more (lol) and cutting spending aren't grounded in reality.


It has been proven again and again by imperical evidence that cutting tax rates in a high-tax environment (and we are in one) creates higher tax revenue. Every time it's been done. It also means that increasing tax rates leads to a drop in revenue.

It's quite simple - if you tax something, you will get less of it. Economics 101.

[Edited 2010-03-17 11:57:53]
Democrats haven't been this angry since we took away their slaves.
 
CaliAtenza
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 7:30 pm

Quoting starac17 (Reply 4):
Also cut out the war on drugs (or at least on pot) and tax the hell out of it, or let the states do it without federal interference. The DEA also gets a blank check to fight this 30 year war which has done nothing to curb drug use and has only succeeded in making the US the country which has the highest incarceration rate in the world, something else that has to cost a boatload in government spending.

I support the drug war against hard drugs like cocaine, heroin, etc, etc. Pot will prolly end up being legalized soon...then the govt can tax the hell out of it and then earn revenue from that. Getting back to the topic though, how is it that India, a nation of 1 billion + with a middle class larger than the entire population of the US can have a 12.5% VAT, but the US cant??
 
FlyPNS1
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 7:46 pm

Quoting Dreadnought (Reply 35):
We the taxpayers refuse to be left holding the bag for very much longer.

If only what you say were actually true. I want you to go and tell all the old people that you are going to cut their medicare benefits 35%. See how fast they turn on you. Everyone likes to say they want less government until its they who are taking the cuts.

Quoting Dreadnought (Reply 35):
National defense is the first duty of any government, so I would consider military spending to be required to a great extent.

Except that most of the spending is for the DoD which is INCAPABLE of defending America. That may sound like a harsh claim on my part, but it is validated by the fact that so-called "conservatives" created an entirely new branch of government (Dept of Homeland Security) to try and defend America because our massive DoD couldn't.

Our DoD is mostly built around fighting enemies that do NOT exist or fighting enemies that pose no real threat to us.

Quoting Dreadnought (Reply 35):
It has been proven again and again by imperical evidence that cutting tax rates in a high-tax environment (and we are in one) creates higher tax revenue.

But that's only been true when the lower tax rates have been paired with heavy government spending, heavy consumer debt spending, little to no consumer saving and temporary speculative bubbles (tech, housing). So sure, lower tax rates do create more revenue AS LONG AS we indulge in a whole host of other bad behaviors (racking up massive debt and ramapant speculation) at the same time.
 
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Dreadnought
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 8:04 pm

Quoting FlyPNS1 (Reply 37):
If only what you say were actually true. I want you to go and tell all the old people that you are going to cut their medicare benefits 35%. See how fast they turn on you. Everyone likes to say they want less government until its they who are taking the cuts.

You are right - people can be incredibly selfish. That does not make it right to bow to their selfishness just because they control a voting block.

Quoting FlyPNS1 (Reply 37):
But that's only been true when the lower tax rates have been paired with heavy government spending, heavy consumer debt spending, little to no consumer saving and temporary speculative bubbles (tech, housing).

I think you are confusing cause and effect. I would say that lower tax rates create new economic growth that can lead to bubbles, such as real estate. For a more pure study, I suggest you look up the Depression of 1920, when a severe downturn (worse than the current one) turned around very quickly after taxes were slashed and government downsized. On the other hand, the 1929 depression lasted for over a decade after government expanded dramatically. Today, the economy is not going anywhere, and the government is growing dramatically. What comes next?
Democrats haven't been this angry since we took away their slaves.
 
FlyPNS1
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 9:01 pm

Quoting Dreadnought (Reply 38):
I think you are confusing cause and effect. I would say that lower tax rates create new economic growth that can lead to bubbles, such as real estate.

Maybe, but lower tax rates shouldn't lead to people being buried under increasingly higher debt loads and near zero savings rates. Yet, even as tax rates have fallen, this is exactly what we've seen happen.

Quoting Dreadnought (Reply 38):
That does not make it right to bow to their selfishness just because they control a voting block.

It may not be right, but what can you do. The elderly are a dominant voting block and any politician hoping to get elected/reelected will cater to them.

Quoting Dreadnought (Reply 38):
For a more pure study, I suggest you look up the Depression of 1920, when a severe downturn (worse than the current one) turned around very quickly after taxes were slashed and government downsized.

It also gave us an impotent government and set us up for the Great Depression of 1929. Much of the 1920's economy was a house of cards and the government was well aware, but couldn't do anything about it. And since there was little for safety net programs in place, the Great Depression of 1929 was magnified as many were literally left as beggars on the street.

I'm not so sure most people want to pursue a small-government policy that means having a Depression every decade or so as was common in the "small goverment" days of the late 1800's-early 1900's.
 
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Dreadnought
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RE: "Defusing The Debt Bomb"

Wed Mar 17, 2010 9:18 pm

Quoting FlyPNS1 (Reply 39):
Maybe, but lower tax rates shouldn't lead to people being buried under increasingly higher debt loads and near zero savings rates. Yet, even as tax rates have fallen, this is exactly what we've seen happen.

Because we have a tax system that disincentivizes savings?

Quoting FlyPNS1 (Reply 39):
It also gave us an impotent government and set us up for the Great Depression of 1929. Much of the 1920's economy was a house of cards and the government was well aware, but couldn't do anything about it. And since there was little for safety net programs in place, the Great Depression of 1929 was magnified as many were literally left as beggars on the street.

I'm not so sure most people want to pursue a small-government policy that means having a Depression every decade or so as was common in the "small goverment" days of the late 1800's-early 1900's.

We'll just have to agree to disagree on your interpretation. I really don't feel like spending an hour on a macroeconomic dissertation right now.

Quoting FlyPNS1 (Reply 39):
It may not be right, but what can you do. The elderly are a dominant voting block and any politician hoping to get elected/reelected will cater to them.

It's still wrong. Social Security and Medicare are nothing more than Ponzi schemes, using current revenue to pay commitments made to others. Defending that system is like defending Bernie Maddoff's scheme - there is no difference, and every time the government increases payouts, we just get deeper in the hole.

The whole thing should be scrapped and started over from scratch with a proper trust fund that the politicians can't touch.
Democrats haven't been this angry since we took away their slaves.

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