It's so easy, even a politician can do it.
Simply freeze government spending at current levels until the debt is eliminated.
That either means a congress willing to legislate this or a President willing to vocally veto any increase in spending.
Why make the issue more complicated than it is? No base line budgeting. Let tax revenue exceed spending until the problem solves itself.
There are many reasons why fixed rules are a bad idea, but I'll highlight a few:
1) Suppose there was a need for emergency spending: a bad wildfire or hurricane season or a crisis in Iran which required our attention. There will inevidably be something in any given year that will demand an increase in spending.
2) Many excellent social programs rely on spending increases. The needs of education, military, development don't decrease because you decide to focus on killing debt.
3) We only make estimates on tax collection, so government doesn't know ahead of time the size of deficits.
4) Eliminating debt simply isn't a high priority objective. No economist would recommend the complete elimination of debt: that would actually be very bad for a financial system which relies on US treasury bills/notes/bonds as risk free investment. Bringing the deficit to a level where real debt decreases has merit, but this still allows for a deficit which grows the debt slower than inflation. Inflation will act as the natural tax to "payoff" the debt.
5)Bottom line is that the risk the debt poses doesn't justify the costs of freezing spending. That's why the problem isn't simple and attempts to simplify it are naive.
It's where you belong
1. We always overspend on natural disasters, including Katrina, wasting $millions of dollars. Keep in mind that these are almost budgeted separately as emergency spending measures *anyway*.
2. Social programs do *not* rely on spending increases. They're just *used* to it.
3. Perhaps, but freezing government spending means lower deficits, high tax collections and the ability to borrow if we need it.
4. Not necessarily pay it off, but dropping by 50%-75% would make a huge difference. I don't think there's anything *wrong* however, with paying it off, that's just excuse giving.
5. Bottom line, go back to being a Democrat if you can't deal with new ideas.
Let's put it this way. I live on a fixed income, but have lots of debt. I could rob someone, or just resolve to spend less. How would you teach your child to deal with it if he was racking up debts on his $25/week allowances? No wonder we can't solve anything. Who here has gone into massive debt *just* because they didn't get a 5% raise? Anyone? Only the US government is so addicted to spending increases that it can't imagine just spending the same as last year for a 5-10 years.
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
I'm liberal, but I also have a few years of economic training-- the two tend to balance themselves out. If you want a unity party, you'll have to learn to work with progressives. One conservative party is enough for this country.
1) The point was that we always underbudget somewhere. Yes we budget for disaster relief, but it may not be enough in any given year. Effective use of funds is an issue, but it is a red herring in this argument: funds will be "wasted" regardless of spending policies and the fact that funds are wasted does not mean that we shouldn't fund areas which were underfunded.
2) Social programs make long term plans which rely on expectations. Communities, especially struggling communities rely on promises made by social programs. Why cut future funding to programs that are getting postive results? Do you believe that all social programs are there simply to waste your money?
4)Let me say that paying off the debt would hurt the financial markets and banking industry. I think most everyone would be happy with the debt simply not growing. If we can keep a reasonably balanced budget going forward the debt won't be a problem and we will be able to spend money on something that is urgent. Small deficits are important, but paying off the debt shouldn't be considered before the country confronts other social obligations. Using a personal finance analogy, there is no need to pay off the house when you can't cover health insurance.
5)Few ideas are truly new and most "new" ideas are simply bad ideas. My time in academics has taught me that you go through a lot of "new" ideas which aren't that great before you find a "new" idea which you later find out is an old idea. I don't object to your idea because it is new, I object to it because it is bad. If you really want me to go to the democrats, hasn't this whole experiment failed? The point is to come together to find middle ground on crucial issues.
I understand you think that actually freezing the budget is simplistic but my version of Achem's Razor dictates that between two solutions to any problem, the one that is simplest and cost the least amount of money is the correct one, something that no politician seems to like. There's never going to be a "Unity" between Republicans and Democrats or liberals and conservatives. If you're unwilling to give up the mantle of "liberal", then this experiment will fail. I am a registered independent and something between a libertarian and a centrist. That being said:
1. So *what* if we under budget somewhere? I under budget somewhere, sometimes. Pull the money from something else. But the silly thing that you're promoting is "oh well, the government can never have enough money, so why not just keep spending more..." That is senseless. Freezing the budget forces people to do their job better and be more efficient if they want to get more work done. How do we even know most of these folks *need* a budget increase except that it's just a bad habit?
2. We're not talking about "cutting", we're talking about doing the same thing as last year with the same amount of money. Do I believe social programs are a complete waste of money? No, just a poor, inefficient use of it. Poverty remains the same as it was 60 years ago and social problems have only increased despite all the money spend on social programs. So you tell me? What has been accomplished?
3) So don't pay off the debt entirely. Choose a percentage that makes sense to real economists and set that as the point at which we can return to wasting taxpayers' money. As for social "obligations", the federal government has no constitutional obligations to provide social programs. And I have a smarter, better way of providing "universal" health care, but you will instinctively hate it, yet have real problems shooting holes in the idea.
4. Maybe you academics should *try* an idea before calling it "bad". What you're saying is that you think there is no real limit to the "good" a government should do with other people's money. I don't want you to go back to being a Democrat, you *are* a Democrat. So stay one. You can't be a part of the solution if you won't embrace anything that's not a Democrat idea.
You still haven't shown that freezing the national budget is bad, you've just shown that you don't like it because you like socialism.
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
I do not think you will ever reduce the Federal Debt to zero and even if we could we probably should not. Keeping it at a resonable percentage of the GNP and the Federal Budget is probably the best we will be able to do and shoulddo. But right now Debt (and the anticipated actuarial payouts that will be needed to cover our current entitlement promises) is growing out of control. Right now that actuarial imbalance on entitlement payouts/payins stands at $50 trillion and growing. Our National Debt (mere $8 trillion) pales in comparison but still important (gets more press).
We need some concerted bipartisan effort restructure and to reign BOTH our Debt/Entitlement spendings esp on the Entitlements side (Soc Security, Medicare, Medicaid) is way out of synch with our sustained ability to pay for those programs. That is why in this Unity forum we need to focus on this truly nation-buster issue of Entitlements and some manner of effective entitlement reform tomake those essential programs sustainable to our kids and grandkids. We MUST match out "Ought to dos" with our "Can dos". ThisISthe mother of all the ends-means disconnects and unfunded mandates thsi town DC has foisted upon us inthe last 30 years (with the public's willing complicity BTW).
You want a revolution?? Just wait til those just entering the workforce today see how much their taxes will HAVE to go up to cover the promises made in the last 30 years and esp when they see the kitty for those programs will run dry when they hit retirement. They will be plenty mad and make our whining on taxes now look pretty sad. These programs now are just unsustainable no matter how you slice them.
Check out
http://www.facingup.org
or
http://www.concordcoalition.org
for people and ideas on how to start to resolve this truly nation-buster issue of entitlements as well as the other one on Federal Debt. THESE are the types of groups who we at Unity need to be building bridges/coalitions to inorder to effectively address in a truly bipartisan centrist way this entitlements/debt issue and maybe add a century or two to the life of the Republic! Amost all other issues pale folks if we do not solve this sucker inthe next 4 to 6 years! Our choice!
DC - 3rd ward - milligansstew08@yahoo.com
http://milligansstew.blogspot.com
Obviously difficult decisions regarding the budget must be made during the next presidency. These decisions aren't easy and require sacrifice. Many cuts must be made to achieve a balanced bugdet and these will be difficult decisions. Instead of actively addressing debt issues, simply maintaining feasible budgets going forward will reduce the debt as percentage of GDP.
My objection to the original post was largely to three points:
1)There are simple solutions to difficult problem such as budget priorities.
2)Actively debt cutting (as oppose to deficit management) is a priority.
3)We can achieve unity without working with progresses.
1. No, there isn't because there are way too many political interests in play. That's why we're in this mess.
2. What's the difference between debt cutting and debt management if the debt is too high? Nothing.
3. What are "progresses"? You mean "progressives"? In order to achieve unity, some people will have to *give up* on some of their previous belief systems. You can't make a step forward if you believe in fantasies like politicians will agree on how to "manage" the deficit or which programs need to be cut/changed/deleted. Freezing the budget as it is for the next Presidential term is about the *only* chance we have of doing anything useful. Progressive naivete isn't terribly helpful.
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
With all due resepect, the simplist solution is not always the best solution. A solution which requests surrendering our ability to make informed decisions to fulfill the obligations of a rule is almost always a poor decision. I don't need to test this to know it is a poor solution, I just have to sit back and think about what we can expect from such a system.
Liberalism is an ideology that many wear as a badge of honor just as libertarianism is an alternative ideology. While I am not an ideologue, I like many others have fundamenental philosophical beliefs that guide our priorities. Those with an ideology can detract from a party holding similar ideology be a centrist, if they feel that said party is putting politics before country or ideology. Liberals and libertarians can find middle ground: personal liberty, promotion of free markets, reasonable foreign policy and promotion of government efficiency. Government waste hurts the poor as much if not more than it hurts the wealthy. Inefficient programs should be cut and this should be a priority. However this is a difficult task and should be done while protecting those social institutions which are crucial to providing free society. Education, healthcare and social insurance all of which facilitate personal liberty must be actively addressed not passively choked. We should not close the door to libertarian solutions, if they address all the needs of American citizens. We should also no close the door to increasing sponsorship of programs. Each issue should be addressed on merit, not an arbitrary spending rule. Perhaps spending and taxes will increase and perhaps they will decrease, but whatever should occur it should be considered in the light of benefits to the American people.
Democrats have had over half a century to prove that a complex solution is certainly *not* the answer to anything. That simply leaves us with the untried, untested *simple* solution.
Your belief system includes the concepts that 1) the government can't be more efficient, 2) government does more good than harm. I believe the opposite and all the evidence is in my court. What exactly is it that government can do better than the private sector? What kind of solutions do you use in your own life? Complicated ones? Or simple ones? If you gain weight, would you 1) come up with a 500 page book of what foods to eat, when, how based on what day of the week it is, what you did the day before, the phase of the moon, etc, or would you 2) exercise more and eat a little less?
The simplest solution *is* almost always the best answer. Provably so.
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
First, I never stated I was a democrat. I would love to hear an example of this country with the government which follows your philosophy. There are plenty of examples of countries with relatively successful progressive agendas.
Where government can improve the private sector where ever market failure or significant inequality exist. Market failure seems to be obvious and includes excessive market power, natural monopolies, public goods, large externalities. Examples include regulations of a wide variety of markets for standards and requirements, everything from utilities to food services to the stock market. Roads, street lighting, military provision, justice system, police, fire... all these things are better done by the public sector. The other place the market is not good is when it creates significant inequity: poverty traps, income traps... Part of the American ideal is for everyone to have a chance if they work for it. Without freely available education and the ablity to get on your feet if life suprise, this isn't possible. Having markets which favor the wealthy or the brilliant at the cost of poor or average is not a market government should support.
In my own life, I plan my life two steps 5 years out. Sometimes the plan is simple, sometimes it is complicated-- it is never naive or inflexible. Your plan isn't simple it is naive and inflexible. Honestly, when I gain weight the first thing I do is keep track of what I'm eating, drinking and vitamin intake. I could tell you on a given day what I ate and a ballpark number for calorie intake, but I'm weird.
I would like to see you prove that the simplist solution is a GOOD solution. Nowhere in my mathematical, philosophical or economic training have I come across such a proof. Personally, I just think you're naive, ignorant or unintellegent.
1. If it walks like a duck and quacks like a duck......... This has nothing to do with "progressive agendas" and everything to do with simple economic restraint. The solution is certainly not naive. What is naive is expecting government to show restraint while budgeting what they think a program needs.
2. Our public justice and police system is pretty pathetic and inefficient, which is why I had to hire a PI to do what the public services can't or won't. Much of the fire and ambulance services are contracted out, as is most of the road building. Why? It's cheaper and more efficient to pay a private company to do it. It's one thing for the government to *fund* something, but any time it tries to *run* it, it does a very poor job. Even our military is incredibly inefficient, bloated and rife with waste, fraud and abuse. Why do we have Halliburton? Because they're more efficient than the military. If we had a 4 or 5 companies competing to provide armed forces, it would actually cost less and be much better.
3. If you gain weight, keeping track of your calorie intake is one thing, but coming up with 2 hours of daily complex systems to figure out what you should eat that day would be far less efficient than jumping on a stair master for half an hour.
4. I can prove that a simple (and least expensive) solution is the best one in almost every situation, but generally, no one will try it. The main reason is that complex solutions require oversight, management, paperwork which invariably leads to waste, fraud, abuse. Unfortunately, since the federal government took over management of all 50 states, it is difficult to try anything but the complex solutions provided by politicians.
5. If you're going to call someone unintelligent, learn to spell the word, brainiac. You might want to get your money back for your " mathematical, philosophical and economic training".
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
I can't spell, you caught me and have invalidated all of my points.
You asked where government is better than the private sector: I provide a list of areas which are better when publically provided. They may be privately managed under a public contract, but they would not exist if there wasn't public funding, standards and oversite. Realize that many of these public contractual relationships are open to many of the same abuses of there publically managed counterparts.
Also realize, I never said that government was doing a good job, just that the services are better than if they were privately financed. Imagine if fire departments were funded by insurance companies, can you conclusively say that this is a better system? Economic theory seems to indicate that there would be significant problems with that situation and a single no-profit insurer (government) is the best solution (search for "adverse selection and insurance" in an econ text").
There is a false belief that inefficiencies in government administration are best solved by privatization. While private contracting is part of the answer, the "simplist" solution is better administration. What can we do to have a better police system? Elect a better police chief! If things are going poorly in a private contract (and they do), the only solution goverment has is to fire the business you contracted and start over searching for replacements.
The ultimate irony here is that you state that government is only responsible for funding, so that doesn't count when our whole discussion is about funding. Government funding does count. If we had purely private companies going in to help after Katrina, whould our costs have still increased above the baseline? Is it possible for businesses to take advantage of the situation and waste the governments money? Was there time to put out bids for alternative private aid organizations? Government funding is at the core of the questions here.
4) I'm still waiting on that proof. Remember, I lowered the bar asking only for you to prove that a good simple solution exists for a problem. Oversight is expensive and provides opennings for abuse, however the lack of oversight provides opennings for abuse. Manangement is expensive, but it is more expensive not to have good management. Paperwork is expensive, but not having paperwork leaves more opportunities for corruption. A simple solution like any other solution must be judged on its merits, not its simplicity. That is why I'm arguing that your solution is a bad solution.
Furthermore, what teeth would your solution have? What happens if everyone agrees that something else is more important than cutting the debt?
Obviously, I feel that budget management is important, however cutting the debt isn't a priority. I would be happy with a small deficit given the variety of other needs our country faces at the moment.
The government is only "better" at providing services that business don't want to provide because nobody wants to pay for them! That's what we call a "win by forfeit". Like public transportation. It's a losing proposition, a handout, a feel good. We have 1-3 people using our buses for $1 each at any given time. No business is that stupid, but the government is. That's what's so inefficient about it. It would be cheaper to give poor people a car.
Yes, if people actually were to pay a fee for the fire department of their choice, I'm pretty sure it would be better. Related - If you want the police to show up when your alarm goes off, prepare to wait an hour or so. But there is a pay service for $100/month or so that will have an armed ex-police officer there in under 5 minutes.
Inefficiency is easily solved by the power of greed. When there is an incentive to be efficient, you get efficient. When there is none, you automatically get inefficient. Did you *actually* pass economics? How do you just "have" better administration? What is the benefit to government? Your own example of "elect at better police chief" shows your incredible naivete. It doesn't work like that. If it did, we'd live in paradise. Now, elect a CEO as police chief and give him bonuses for crimes being solved or low crime rate and watch what happens. Simple solution. Reward success. The problem with public hiring private is that the public system has no rewards for efficiency so they often don't care about the results made by the private company. And often, there are "favors" going on. But that's the fault of......government, not private industry. Private industry isn't altruistic. If it can make more money for less work, it will. The system under which things operate is the key.
As for Katrina, public companies wouldn't have given money to criminals and conmen like the government did. They might have *kept* the money, but they wouldn't have thrown it away. The government did a HORRIBLE job with Katrina as they do with almost EVERYTHING. They could barely tie their shoes.
As for "proof", make me CEO of one Missouri, generally the poorest state in the nation. Keep the federal government out for 10 years and I could make it the richest per capita state in the nation in those ten years. Or your money back. There was a situation where a judge put a town into receivership. This was the smartest judge in the world because he hired a retired CEO to take over the town. In something like 18 months, he had fixed all of the major problems in the town and put it in the black. This is how private industry works where public cannot.
As for the budget having "teeth" as long as the government freezes the total budget at existing levels it will kill off the debt as much as you want. It doesn't matter *how* the money is spent as long as there is no increase in the expenditure. Simple economics. It would also massively increase the private economy and wealth of the country as it happened.
If you think cutting the debt shouldn't be a priority, you need to watch the news and do a little reading. We're putting ourselves in big trouble at this point, not the least of which is being in debt to China. It's actually at the point of being a national security issue, not just important. I don't think there is a single more important thing going on right now than our ever growing federal budget and the collateral damage it is having on nearly every aspect of our lives.
I invite you to stay with the Democratic Party, they love you there.
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
Gah lost a long thing I did, so very quickly:
-Greed doesn't necessarily create efficiency. Monopolies are formed out of greed and they are provably inefficient. Go back to your economic text books and read about "Market Failure". Here is the wikipedia version, it states the mainstream view which is what is taught in most graduate econ courses and what I teach my students.
-Political economics provides interesting analysis as to what can be done to decrease inefficiencies of goverment.
-You'd turn Missouri into the state of misery.
-Teeth are things that would keep congress from "unfreezing" the budget when they saw fit.
-Regardless of what happens to the debt, china isn't going to decrease their foreign reserves until they decide the time is right. If they dump their holdings, it will kill our ability to borrow for a while as prices dive but it would be a great time to buy back bonds cheaply and for investors to buy bonds. China could make it very difficult for our government to borrow. That said, what China is really interested in is maintaining currency levels to support their exports. In many ways, China has been subsidizing our consumption of cheap imports for many years. While this is something we should continue to watch, the size of the problem is overstated. Continued growth of the debt is potentially alarming, but as a percentage of income it isn't problematic.
Simply maintaining a balanced budget makes much more sense than freezing the current budget.
1. Properly managed greed certainly *does* create efficiency. Why do you think the Soviet Union collapsed? If there is no ability to gain from your work and intellect, you simply do the minimum required and that is inefficient.
2. Perhaps, but when has it actually been put to use? When Congress hires a CEO to go through all the laws and fix the system, *then* you may have a point, but they won't do it.
3. Exactly upon what basis could you possibly make that assumption?
4. The "teeth" is to actually a) make it a law that the budget can't increase unless the debt is under a specified percentage of the budget or b) a President who had balls.
5. There is another reason to freeze the budget - forcing an increase in government efficiency. If they know they will automatically get more money, they will just figure out ways of wasting it. Even then, if I had my druthers, I'd cut every social program in the government to zero because they're all inherently unconstitutional. Besides, there's simply nothing magical about having a debt. If the economy is huge and bustling and we had no debt we'd be able to borrow what we needed when we needed it because someone will always be glad to lend money in return for interest. Nothing can stop that except bad credit.
Please go back to the Democratic party where you belong. Is this Paul Krugman?
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
1. The key is proper management. Communism doesn't work, but neither does unbridled capitalism. If government can properly manage greed, all is good. Management is not always possible, so at times direct government involvement is necessary. (Ironically the Soviet Union did provide incentives to workers to increase productivity).
2. I'm all for reasonable government reform. A freeze isn't reasonable because it does not provide flexiblity for good governence.
3. I'm pulling your chain, didn't you get the pun. I have about as much crediblity as you regarding what you could do in a given state. You boast, I laugh.
4. When the going gets tough, laws get rewritten. There is no crediblity that a freeze would survive its first impass, then it is officially dead.
5. Remember how the Bush tax cut was suppose to force efficiency? How did that work out for you. Efficiency can't be forced top down, it must be imposed bottom up. If social programs are unconstitutional, than you should take it up with the courts. Please provide the case law which shows that all social programs are unconstitutional.
Come on, the democrats hate me just as much as you do. I'm equally critical of stupidity when it comes from liberals. You don't have to continue to stroke my ego, with generous comparisons. Remember that Unity08 involves working with members of the majory party: success requires meeting in the middle.
I used to be a Rush Republican too, but then I grew a brain and a conscience. I sympathize with your desire to limit government, but this should be done by limitting responsiblity. Simply putting a budgetary cap on congress avoids making all of those important decisions regarding the welfare of the American people. If you believe government is too big, tell us where it should be cut and we can discuss that.
Honestly, you seem like the type of guy who whould enjoy serious economic training. I really invite you to hit the books and learn a bit of the dismal science. It will nuture and mature your approach to policy.
Quote - "The simplest solution *is* almost always the best answer. Provably so."
Occam's Razor: Every thing else being equal, the simplest solution is usually the best solution.
The first part of the sentence is relevant; there is a difference between the simplest solution for a given set of circumstances, and simplistic thinking, which is generally incapable of solving any problem.
Jeff C
leikec@yahoo.com
A democracy will only survive until the people realize they can vote themselves funds from the public treasury. FDR started us down that road.
That is one of the reasons we are supposed to have a Republic instead of a democracy.
If the fed gov't would adhere to the Constitution, there would be little to no debt, rarely a deficit, and no need of an income tax.
The fed gov't is constantly looking for ways to circumvent the Constitution, in order to increase their power over the citizens of this nation. Where the Constitution says "regulate interstate commerce", the fed gov't says, regulate anything that may possibly have an EFFECT on interstate commerce. Practically EVERYTHING has an effect on interstate commerce. Should we conclude that our constitution empowers the fed gov't to regulate EVERYTHING? Where the Constitution says "promote the general welfare", the fed gov't says, pay for it. Each of us having our own private physician would promote our general welfare, until we had to fund it. These are just the top two abuses, which are far more than enough to account for the national debt, and the annual deficit.
The fed gov't has even gotten the individual states playing this game. I live in Missouri, and we actually have a law on the books called the "USE TAX". What it is, is a sales tax on intestate purchases. The reason they don't call it a "SALES TAX" is because the constitution forbids states to tax interstate commerce. However, once the purchased item is in the state, they think it's OK to tax our USE of the item.(they are not having much success collecting it)
The only reason for the state to run a budget deficit, is for the purpose of buying votes.
If you listen carefully, what MOST politicians promise is FREE MONEY. TANSTAAFL. Not a conservative, a radical libertarian.
Education and healthcare are two prime examples of the Feds sticking their nose into something they have no legal or Constitutional authority over, stealing money from the People to fund it and making it worse than the very thing they were trying to fix. Big pharma, the insurance companies and the politicians get fat off the stolen funds of the People and the People are worse off.
The Revolution is not being televised but it is being youtubed!
Join the Ron Paul Revolution and get a free country!
Hello From Iowa - Land of the Buttercow! IMHO The biggest Social Engineering Project is not Dept of Ed or HUD, etc but rather the Federal Tax Code. At 20,000 pages and growing - it makes the Fed Departments pale in comparison and complexity. THAT is where the big intervention in State/Local/Personal affairs lies folks. The Fed government, as overreaching as it may be in many areas, is small Potatoes to the thousands of interventions (under the radar) by the Fed tax code. Any wonder that is where the K-Street/Lobbyist/PAC efforts focus most?? THAT is where we need to focus!! Follow the money!!
DC - 3rd ward - milligansstew08@yahoo.com
http://milligansstew.blogspot.com
In a world where we pay a billion dollars a day just in interest payments on the existing debt (and that's with a record low interest rate) and where many central banks in nations who hold large portions of our national debt are selling our bonds, not buying them (such as Japan), because of our so-called "twin-deficit" it is essential to balance the budget and begin to pay down the debt before the interest payments alone break the bank.
1. It's a simple platform that will work and could get even [maverick] politicians to agree and rally
2. It's easy for the masses to understand as it isn't economic double speaker a la Greenspan.
This party is going to need actual planks that people will support, not just ideals and hope.
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
A flat tax of 17% federal on all earned salaries and wages of those legitimately working in the United States alone would bring us over $1 trillion dollars revenue annually. I am uncertain as to what corporations, luxury and inheritence taxes or tariffs and levies bring in on a current adjusted tax rate, but I'm willing to believe it's well over a trillion dollars, too. I know as a nation we're in constant need of revenue, but we really need to get out of the taxation mentality. There should be no such thing as people being imprisoned for tax crimes, especially since federal taxes weren't supposed to be a permanent thing from the get go. It is common knowledge that from the time of the American Revolution until I believe it's 1913, when the first federal income taxes were taken, the inflation had only exceeded 10% in all of thoses decades. Basically, you could still get alot from a penny. However, after that time an endless and ever growing menace on our economy and a rapid depreciation of the dollar that's not going anywhere for now. The federal government has become obsessively overdependent on income taxes. How many businesses can't flourish let alone survive because they too, are being taxed just to pay off the inflation from other taxes?
Flat taxes can settle the excess of revenue stagnation while rebuilding the value of our currency. Also, the lower cap will give people their money back for saving or spending thus allowing a stronger economy to prevail and with the extra value of the dollar we could make the minimum wage an affordable, living wage. The extra growth of value will greatly diminish deficit expansion and keep interest rates lower to further investments and exchange. Instead of retaining so much of our income to build revenue,we would be increasing sales and therefore acquire additional sources of taxable income. Look at it this way, instead of taking $1 dollar out of $ten dollars a piece from only ten people, we would only need to take 10 cents from one hundred people with ten dollars each The one hundred people wouldn't even know they were paying taxes! This could very well be the result of a very simple and painless flat tax.
Flat tax--no thanks. Your 17% rate will raise my fed income tax and lower Steve Forbes'. I would rather do the paperwork thanks anyway. Figure it out. Go through your tax return.
Think also of the comfort and rights of others
DV.
It has already been proven in many countries around the world that a flat tax is fairer and generates more revenue than the American system. With all the loop holes and deductions the"so-called rich" pay less taxes than the average middle class family. If every citizen paid 17% of every dollar over a minumum of around 40K. THe government would be swimming in money and be able to spend it on all those liberal black holes like universal healthcare.
I'm all for - just as long as it is revenue neutral and funds aour present and future exependitures. I say keep it simple and on a postcard. Deep six the Fed Tax Code. The biggest perpetuator of the K-Street Lobbyist power grip on DC (and the entitlement mentality) is the 20,000 page and growing Federal Tax Code that even the accountants can't figure out.
DC - 3rd ward - milligansstew08@yahoo.com
http://milligansstew.blogspot.com
Not if you utilize the MRSA program I outline in the health care section. In fact, it will lower them.
On the other hand, this thread wasn't supposed to be about the flat tax at all.
A Democrat seeks complex solution to simple problems
A Republican seeks simple solutions to complex problems
A reasonable person seeks simple solutions for solvable problems
You say that the flat tax brings over a trillion dollars, well let's do some budgeting.
ONLY interest payments on our EXISTING national debt is ~400 billion a year, that of course goes way up when the interest rates go up from where they are now, which is at an historic low.
Defense Department: 661 billion
That's already over the trillion dollar mark.
The federal budget is a higher per cent of GDP than that today and you are only considering peoples with higher than mean income which is only a small part of the GDP. See other tax topics for extensive discussion of alternatives.
Bill"for what we are together"
bill713.unity08@sbcglobal.net
It really doesn't matter who controls the white house or congress....The problem of taxes is only a big math problem......
The real problems has always been a problem of accountability or more appropriately in the last 6 yrs.....the lack of it...
Anyone remember the $700.00 hammers that were in the news 30 yrs ago.....for some of you....that would mean you had to read the paper or watch the news.....It was a big deal....there was a part of our government who watched how the money was spent.....and when they found something off the wall....they reported it and we all got to hear about it.....
Now theres nothing.....wheres all the reports about excessive spending for iraq....wheres the reporters beating down doors to find out who leased Cadillac Escalades in Iraq....no where.....there are literally billions of dollars being wasted on a weekly basis in our government.....And no one is being held accountable.....
Pass all the laws you want....write all the tax code you want.....none of it matters if criminals are allowed to steal from our government on such a grand scale without any consequences....
Please consider this:
Wealth is Power,
Power is Control,
Control is the Opposite of Freedom.
Tax Wealth not Work.
Repeal the income tax and flat tax net worth. Tax all inheritance over a limit($10M?)at a high rate and apply it solely to the National Debt.
The goal is to decrease the class difference between the aristocracy of wealth and the remainder of the population. The rational is that inordinate privilidge begets inordinate responsibility.
Thanks.
I offer that instead of congress budgeting a fixed dollar amount to each line item that congress allocates a "percentage point/points" to each line item and then budget to 100% of the federal revenue. Congress could establish major catagories, i.e. Defense, Federal Debt, Social Security, etc. and assign a primary percentage and subdivide each as it sees fit. Any earmark would have to come out of a catagories share not some unlimited "pot".
I have never been able to understand why politicians and the citizenry cannot embrace the concept of a value-added, aka sales tax as the most fair, reasonable, easily administered system of taxation. Those who spend the most pay the most taxes. It encourages saving, investment, and modest living. Wealthy folks who demand great luxury pay the most and cannot take advantage of complex tax law "loopholes" to get out of paying their fair share. European countries such as Germany have used the sales tax as their primary source of revenue for years with excellent results. The current income tax system is little more than another battle ground between the haves and have nots, and it is slowly but surely squeezing out the middle class.
I Totally agree John! We need to reorient our tax policy (and other govt policies for that matter) to encourage savings and investment rather than consumption. I would not have a sales tax for basic items like food, medicine. But the others would start the reorientation of our unsustainable borrow-borrow-spend-spend entitlement mentality that is driving our country into fiscal oblivion public and private!
See: http://www.facingup.org
and http://www.concordcoalition.org
And NOTHING wouldbe better inthe diminution of the PAC K-St Lobbyist influence who run this town than deep-sixing the 20,000 page Federal Tax Code!
DC - 3rd ward - milligansstew08@yahoo.com
http://milligansstew.blogspot.com
Here's the most SIMPLE solution of all. ABOLISH THE FEDERAL RESERVE AND TELL THEM TO STICK THEIR "DEBT" WHERE THE SUN DON'T SHINE.
We supposedly OWE the PRIVATE Federal Reserve Bank over $9.5 TRILLION. Since this deficit was created ILLEGALLY and only exists on paper anyway we could (SHOULD) just tell them TOO BAD WE'RE NOT PAYING YOU. Then we start printing and regulating our own money just like the CONSTITUTION says we should.
Once you eliminate that "debt" there is virtually no need for any income tax...which by the way is also UNCONSTITUTIONAL.
All the looneys are out in force. I know, lets bomb Canada while we're at it.
Seriously, abolishing the Fed and defaulting on debt would destroy the banking system. Loans would be impossible to get, commerce would grind to a stop, savings would disappear and we would relive what our grandparents and great grandparents experience. Good plan.
There seems to be some confusion between the "fair tax" which is a national sales tax, a value added tax which is added on every time something is sold starting with the raw materials and a flat income tax similar to the Pennsylvania income tax which is 3% with almost no deduction.
Below is my comment and an idea.
A national sales tax or a value added tax is counterproductive. They both add a layer (tax collection and recordkeeping) to a business model and causes business owner to increase prices to maintain a margin of profit that makes being in business worthwhile. Hourly wages would also need to increase so lower and middle income people could afford goods. A rebate sounds great until you need to float your costs until rebate check arrives. Eastern European countries (Croatia, Georgia area) have had a flat tax for many years and also have cut taxes because of the influx of taxes is much higher than expected as well as full employment. Meanwhile Western European countries (France, Germany etc.) have a value added tax and economies are stagnant and unemployment is out of control. If every one in America paid taxes on every dollar over a minimum say around 40k most middle class families would get a break and lower income would still pay nothing. Our current system is out of control and if you have a good accountant you could make millions a year and pay less tax than the average lower income family. Under a flat tax (at 15% tax rate) scenario a family that makes 60K a year (with no deductions) would pay $3000 in taxes (60K-40K= 20K taxable). A family that makes $500K would pay $69000 in taxes (500k-40k=460K taxable). I consider that a lot more fair than a sales tax.
I know this is a completely over simplistic approach to the problem, but why not just require a budget that is less than the expected annual tax collected. This budget could include a reserve for emergency spending. I know this seems really out there, but several states have taken this approach with great success. Thoughts?