Is "Sooner" Really Going To Be Soon?
 

I've commented that sooner or later the piper will have to be paid with regard to the runaway deficit spending done by our Congresses over the last 10-11 years and the humongous national debt that such fiscal irresponsibility has caused.

But maybe "sooner" will really be sooner. On top of the Chinese beginning to reduce their holdings of U.S. debt, the bond market has gotten very "frothy" in the last week or so. The rates on Treasuries have escalated by almost 4% in a single week. The bond market gurus and traders are now saying that interest rates are on their way up in a big way. In a speech yesterday, Alan Greenspan referred to the interest rates on Treasuries as the "canary in the coal mine"...the predictor of bad things to come.

How does this affect us, you ask? Well, the gross debt of the U.S. is expected to be $14,456.3 trillion by the end of this year. That's about 98% of the total gross domestic product of the U.S. this year. What's most alarming is that the average maturity of all that debt is only 4.2 years! That is, about half of that $14.5 trillion in debt will become due and payable within the next 4.2 years.

The way those simple facts affect all of us is as follows. If our deficit spending continues unabated, economists project that our national debt will be $18.35 trillion by the end of 2014. When that debt comes due and must be repaid or refinanced what happens if...

• Interest rates continue to climb and the U.S. Treasury finds it necessary to replace bills and bonds with interest rates averaging between 2.5-3.5% with new debt instruments carrying rates of 4-5-6%?

• And what happens if China, Japan and Saudi Arabia, the largest holders of U.S. debt decline to buy all the new and increased debt that is needed?

In essence, I'm describing a situation where the U.S. is definitionally bankrupt. It can't pay it's debts when they become due.

What would happen then is that the Treasury would simply print more money--increase the money supply--and use the new money it prints to pay off old debts as well as finance spending that it can no longer finance by selling debt. That would drive the value of the U.S. dollar to unheard of low levels and inflation would skyrocket.

The price of the goods, services and products would increase to reflect the decline in the value of the dollar. The inflation could be pretty bad...$7-8 a gallon gasoline, cars that now cost $20,000 could easily cost $30-40,000, the price of groceries would skyrocket, the cost of services like insurance would escalate to reflect the increased costs of those risks that insurance companies underwrite. Yes, if you think that health insurance is high now, it could appear to be a bargian in only a few years.

If you thought there is public outcry over the healthcare reform bill now, wait until runaway inflation eats away at the purchasing power of every man and woman in the U.S.

Frankly, I thought that these events would occur, but would occur slowly and not really be a problem in my lifetime. I've begun to change my mind. I think these events could easily occur sooner...much sooner than I expected.

Remember that key fact...at least half of the public debt issued by our country becomes due and payable in 4.2 years. The questions are: at what interest rate will be able to refinance that debt as it rolls over? And if the national debt keeps growing as fast as it has, will there be enough money--enough buyers of our debt--to buy all that we will need to sell to finance our spending?

I'll end this note by saying that the situation I've described could actually be a good thing. Given that situation, our elected politicians would have no choice but to drastically cut spending and probably increase taxes. There would be no alternative. No one political party, ideological group or candidate would have to take responsibility for those inevitable actions. The pain resulting from slashing spending and increasing taxes would be less than that resulting from runaway inflation.

The end result might actually be a good thing for the country....really bad for each and every one of us, but good for the country.

The Intolerable Act
 

I heard that the deficit under Obama is already more then the previous 43 presidents combined. Maybe if he had concentrated to putting America to work instead of bankrupting us, the financial picture would be more rosy?
Social Security is dishing out more then it takes in because 20% of Americans are not contributing payroll taxes.
Simple arithmetic. I heard a new name for the health care bill called The Intolerable Act.
Maybe it will catch on?

Wind At His Back
 

Donna, with all due respect, maybe what you heard is actually true. It sounds like kind of a wild statement; I'm not going to bother to research it.

But just think about the allegation. One President and one Congress could actually do all those bad things fiscally, all by themselves, in only 430 days, about 14 months?

I'm certainly not arguing that all of the decisions made since January 20, 2009 were fiscally sound. But some of the current President's predecessors provided a little "wind at his back", not the least of which were the financial crisis and the costs of beginning to clean it up, an economy careening into recession, and the two wars that came along with the job. Whatever the deficit was during Obama's first year in office, $1.2 trillion of it was the result of a budget signed by George Bush.

Having said that, I still believe that things will have to change in a very big way that none of us is going to like very much.

There is nothing in your post VK that is surprising. I posted a few days ago that Social Security is going into deficit this year, and first of all, allow me to say that BOTH parties have raided this account for years for social programs and war. I say that so that folks dont say I am blaming Obama for this situation directly...that, of course is not true.

HOWEVER, this congressional leadership...these people who brought us "bail outs" and now a large political boondoogle with an health care bill that doesnt even address cost control (and in fact pawns off the paying of the bill until someone else is in office while they pat themselves on the back), just will not stop spending and recall in Jan of 2005 right after Bush asked for ideas on Social Security and offered his own of privatization because as he said later it was a problem that future generations will need to address...didnt make much news...Pelosi on the other hand did make news with this in Jan of 2005 "“That tradition is embodied in the Democratic Party’s commitment to Social Security.

“Social Security is the most visionary example of what President Franklin Roosevelt called ‘bold, persistent experimentation.’ Its goal was to ensure that the prospect of retirement was not met with the specter of poverty.

“It has been an incredible success. It has enabled our seniors to enjoy independence. And it has enabled our country to obey the commandment: “honor thy father and thy mother.”

“Not only does Social Security improve the lives of the more than 33 million senior citizens who receive its benefits, it also provides a measure of independence for workers who have become disabled, and the children and spouses of those who have become disabled or passed away.

“Social Security does face problems down the road. We need to solve them. But we have the time to do it right.

“We can solve this long-term challenge without dismantling Social Security, and without allowing this Administration’s false declaration of a crisis to justify a privatization plan that is unnecessary, unaffordable, and unwise.

“To be sustainable, any long-term solution must be bipartisan. And as a first step, we must work off the same set of numbers.

"The President talks about a crisis, but according to the nonpartisan Congressional Budget Office, Social Security will be solvent for nearly 50 years.

This is the mindset we are faced with. We continue to give unions breaks...we continue to talk about more spending....and yes, I am talking about all Democrats....that does not mean I do not understand that Republicans have raided this account also, but I am speaking of who is in control RIGHT NOW.

Folks, they are going to have to raise the age of retirement again, while reducing medicaire benefits...what do these people think is going on out here in the real world.

Sorry....I am ranting...lost focus and just mumbling now but still going to post this and just hope that people see what is going on in this country right now. The perfect storm (This President and this congress) at the totally wrong time in history from my perspective and I see NO chance of let up.

This President, as he has done his entire career, will CREATE another crisis to involve our government spending and controlling and he will then have this congress act on it !

Sorry...shouldnt post it but going to anyway and then just back off. But be aware of Social Security !

Sorry VK...I did not address your post very well, but whats new :)

VK...I will not get into a who did what when....seems it all is Bush's fault, BUT MY POINT IS THIS...

This President is the one in office NOW....this congress is in office NOW and they dont seem to understand what they are doing to this country !

Reagan cut taxes and revenues to the federal government almost doubled. The situation you describe doesn't have to be that way. The current administration is putting us in that situation... on purpose I believe.

STOP SPENDING AND GET THE PRIVATE SECTER HIRING AGAIN.

Ain't gonna happen with these crooks.

You hit the proverbial nail right on the head. There will be another created crisis (non-crisis) and they will act on it. What was that expression they got caught saying? "don't let any crisis go to waste" or some thing like that.
Darn, this administration makes my stomach tie up into a big knot.
I really feel that they don't have the USA in their best interests.

Based on performance to date Obama, his WH staff, congress and senate
 

are not inclined to pay much attention to anything that is not on their agenda. And perhaps an America in melt down is his means to an end. Is there any other explanation for the continuation of big spending with absolutely no regard for where the money will come from.....just schmooze, wheel and deal, back room dealing and prostitution of principals.
So now he is out campaigning once again trying to convince we the people that we will like the bill we said we did not support. Does he think he wields some sort of magic by coming out to visit us?
These are not numbers people. They could care less. Haven't heard much about un employment or the wars the last few weeks....too busy on his health care reform agenda......


Yes Captain Obama is rearranging the deck chairs on the Titantic....he is personally conducting the orchestra, while making wonderful speeches about the bump we just experienced was not an ice berg.....

btk

Boy ain't the truth.

Yes Donna
 

You are correct Donna. I have done the research.

VK always tries to lump Bush With Obama and always suggests raising taxes.

People continue to loose their jobs because people quit buying things. What's the best way to get people consuming again? Tax the crap out of them so they have even less money to spend. Now there's an idea!

Yea Mr. dklassen. And we can take more money out of circulation by penalizing people (especially the young) for not buying insurance. But on the bright side, we may have to hire more prison guards for the people who refuse or can not afford to pay the fines.

Medicare Benefits
 

I still would remind all that Medicare is not free for those already on it, either. Everyone pays a Medicare premium out of their SS which continues to rise.....the same people that paid into it year after year while they were working or still do.

Tell Us How
 

I'm not trying to lump anyone with anyone. Our elected political leadership over a long time has gotten us into this financial mess. But the facts can't really be avoided. At the beginning of George Bush's first term the federal budget was not only balanced, but generating more revenue than was being spent. Alan Greenspan was very concerned that the national debt would actually be completely paid down in only a year or two and he was diligent in avoiding pointing out to Congress that they would actually have a lot more money to spend...because he believed that they would!

Eight years later, when Bush left office, the national debt was $10.7 trillion, the federal budget was creating year-over-year deficits that were growing dramatically, the economy was careening into recession, we were fighting two wars, and even the Republican candidate for President observed that Congress was "spending like drunken sailors". The national debt right now is about $12.6 trillion and economists project that it will grow to $14.6 trillion by 2014. Each year we are spending more than a trillion dollars than the government takes in in taxes. That deficit is growing each year.

For the first six years of Bush's term the Congress was controlled by the GOP, and for the final two and into the present, it's been the Democrats. And yes, the Democrats seem to be spending at a rate not seen during even the most profligate years of GOP controlled Congresses.

Those facts are unassailable. And they demonstrate what I've been trying to say--but folks like you seem to think I have a liberal agenda. Read that into my forewarnings if you wish. But the federal budget cannot be balanced with only cuts in spending. I've pointed out before that even if ALL spending by the federal government other than defense, Social Security, Medicare and the interest on the national debt was eliminated we would still be almost $1 trillion short of a balanced budget. Even if we then completely eliminated all spending by the Defense Department, we still wouldn't have a deficit-free budget.

Do you think I want to pay more taxes? No way. But I'm telling you all that the arithmetic tells us that taxes will have to be increased, and probably fairly substantially. The arithmetic shows that it's unavoidable.

Study the numbers yourselves, folks. It doesn't take a college degree in math. But to just keep ranting that by electing conservatives who will cut spending, the problem of the deficit and the national debt will be solved is just plain incorrect. BOTH the liberals and those who called themselves conservatives got us into this mess. That includes George Bush as well as Barack Obama and Congresses lead by Denny Hastert and Bill Frist as well as the Reid-Pelosi duo.

Read a recent statement by a well-known former GOP Presidential candidate who is known to be more conservative than middle of the road, Pat Buchanan. In his column last month in the conservative online publication The American Cause entitled, "Obama's Problems--And Ours", he concludes his review of the shortcomings of several previous administrations and the Obama administration by saying...

"... in 2012, the party of Sarah Palin, Mitt Romney and Ron Paul will have to tell the country how it proposes to end these wars without losing them, how to bring manufacturing back and how to cut spending by $1 trillion a year, if taxes are off the table.

That Republicans failed under George W. Bush few Republicans today deny. That Obama and his White House are failing today few Democrats will privately deny.

The question raised by the successive failures is whether either party has a cure for the maladies that afflict America. Or are those maladies beyond the power of politics to heal?

Have we become a people incapable of accepting the sacrifices previous generations made, and of producing leaders with the vision and strength of character that our leaders of old possessed?"

Again, I implore you all to look at the numbers, just as Pat Buchanan has. See if you can figure out how ANY candidate from ANY party can cut $1 trillion out of the federal budget...how ANY candidate or party can begin to resolve our fiscal crisis without raising taxes.

If you can find a way, please post your ideas here. We're headed for a trainwreck and there's no way any of us can get off. We keep changing engineers and one is worse than another.

You can read Buchanan's entire column at http://www.theamericancause.org/inde...t01returnid=29 Or, you can read all of his columns in The American Cause at http://www.theamericancause.org/index.php

OK. Kahuna has been beating the drums to raise our taxes.

Any other ideas on how to solve our money problems?


Seems like the USA keeps on giving and giving money to the world and we get nothing back. Maybe call in our chips and have other countries pay us back?

Sell some land ? Any ideas beside raising our taxes?

Another nice try
 

You wrote a very long post without convincing evidence that we need to raise income taxes.

Look we need more revenues along with spending cuts to eliminate deficits. This is common sense.

It is also common sense that raising income tax rates and adding new taxes will reduce revenues.

It is also common sense that Liberals are aware of this, certainly clinton was. The reason Liberal Progressives now want to raise taxes is unrelated to revenues it is related to wealth distribution.

Again simply said When you raise income tax rates you reduce tax revenues and lose jobs, period, and you take resources away from the job producers.

You wrote a very short post without convincing evidence or math showing us how you eliminate the deficit without raising taxes. Show us some assumptions on revenues and taxes and spending that eliminates or reduces the deficit without raising taxes and reducing entitlements. Show the math!!!!

Common Sense - Some people (such as the authors of Merriam-Webster Online) use the phrase to refer to beliefs or propositions that — in their opinion — most people would consider prudent and of sound judgment, without reliance on esoteric knowledge or study or research, but based upon what they see as knowledge held by people "in common".

I Could, But I Won't
 

I've posted so many analyses on the federal budget that my fingers tire from typing. I could do it again to reply to your criticism that I've haven't provided any evidence, but why should I bother? People will come up with other inane arguments why the analysis is wrong without providing any analytical proof themselves.

So here is a link to another thread that I posted here on TOTV which addresses your request for "evidence". If you differ with any of the facts or conclusions, let us all know. But if you do, please provide your own corroborating evidence, not just the standard rants that all we need to do is take back our government, go back to the way it was when the Constitution was written in 1776, get rid of the liberals, cut spending, join a tea party group, get rid of Reid and Pelosi, and yadda yadda. The problem is a lot more serious than can be resolved with a bunch of soundbite-sized hooey.

Here, argue with these facts...come up with a plan...let us know what it is...put some numbers behind your ideas. Don't call it either a liberal or a conservative plan. I'll settle for any kind of a plan. Just let us know how you would go about balancing the budget and beginning to pay down the almost $13 trillion we owe to other people who financed our spending.

https://www.talkofthevillages.com/fo...illages+kahuna

How About This For An Idea?
 

OK, here's one that's different from either cutting spending or raising taxes, the traditional ways of balancing a budget.

How about privatizing several government-provided services?

George Bush had that idea with regard to letting people invest on Wall Street rather than continue Social Security in the same form it had been for years. We all know how flat on it's face that idea fell.

What about privatizing some of the following government functions? The idea is that decisions regarding the level of service that would be provided as well as the funding of the cost of the service would become the responsibility of the private sector. I present this list, a very abbreviated list, not because the elimination of their cost from the federal budget would have meaningful impact, but rather just an idea on how the cost of certain functions could be eliminated from government funding. So, in no particular order of importance...

• Let go back to the Bush idea of privatizing Social Security. Instead of the government guaranteeing some sort of income for the lifetime of the recipients, the government would make a once a year contribution to a fund which would then be owned and managed by the beneficiary. The contribution would be calculated using a discount rate comparable to a reasonable investment rate of return, which should provide the beneficiary with income until his/her actuarial life expectancy. While this plan would shift all of the risk to the individual, it would also remove the obligation of the government to meet the increased costs that come from extended life expectancies and inflation. People might not like to assume such risks, but that is the true free market.

• How about privatizing Medicare and VA health insurance? There is a groundswell of resistance to government-run healthcare, so shifting health insurance totally to the private sector should be a political win-win. We could simply flip-flop the party paying the premium and the insurer. The government could provide each Medicare-eliglible person or veteran with a stipend in the amount of the Medicare/VA premium they currently pay. Then the individuals could go into the private insurance market and buy whatever kind of policy they could get for that amount. The government would have no further responsibility to pay healthcare bills and would be indifferent to the inflation of healthcare costs if their rate of inflation was grossly more than the CPI. The stipend wouldn't even have to be a cash payment to individuals--it could be provided in the form of a tax deduction or a tax credit. But to keep people from simply taking the stipend and not buying insurance with it, the rules requiring hospitals to provide emergency room care to people who have no insurance would be changed. If someone who is Medicare-eligible under my proposed plan attempts to get ER service but has failed to buy insurance, he/she would be turned away. That shifts the responsibility to the individual and removes the cost of the uninsured having to be borne by the rest of us. For Medicare eligible people--no insurance, no healthcare, a pure free market proposition.

• Privatize the air traffic control system. Why is the government in this business anyway? The beneficiaries are the airlines flying in U.S. airspace. Let a private company be formed to provide the service and let them negotiate with the airlines for the level of service they desire and what they might be willing to pay for it.

• Eliminate all government funding for university research. Too many colleges are too reliant on government funding to make their budgets work. Colleges may have to downsize and a few might have to close as the result of the withdrawal of such funding, but why should the federal government be keeping inefficient colleges open with public funds anyway?

• Eliminate the National Highway & Transportation Safety agency. Why do we need this oversight of car manufacturers? Based on the level of recalls, it doesn't seem to have worked very well anyway. And why do we have to have a "ready team" to go visit every crash that occurs involving airplanes or trains? It seems to me that the public would determine soon enough which airlines or railroads were unsafe and stop using them. Let the free market determine these safety issues. If the airlines or railroads or car companies want to continue this sort of oversight on themselves, let them form a company to provide it and pay for it themselves.

• Sell off the national parks to private investors. The investors could operate those parks which enjoy large visitation frequency for a profit. Public lands that are relatively vacant and unvisited could be developed, mined or explored for natural resources.

• Sell all government-owned buildings to private investors. The government could then rent space in the buildings rather than to continue to assume the risks and costs associated with building ownership.

• Eliminate all agricultural subsidies of any kind. The time has come for American farmers to either compete effectively in the world commodity markets or go out of business. Continuing to subsidize farmers is a politically-driven policy that does little more than disguise our non-competitiveness in the free markets.

• Privatize NASA completely. There have been some steps in this direction anyway, but what purpose is served by the public continuing to fund a space exploration program? If some value is created, the private sector and the free market will assure that it continues. If the free market sees no benefit, the space program will simply die a natural death.

• Eliminate any funding for an interstate highway system or local transportation of any kind. Why is the federal government funding the construction of local highways, bridgs, tunnels, light rail or subway systems? If they are needed, let local governments or the private sector finance them. If that means there aren't enough people to finance highways and bridges in areas of low population--the plains states, the Texas panhandle, the southwest desert, the mountain states--so be it. Why should the federal government be paying for those facilities anyway?

• Sell off Amtrak to private investors. Again, why should the federal government be providing funding of any sort to a railway system which has proven to be inefficient and non-competitive with other forms of transportation? If no private investor(s) are willing to buy Amtrak assets and its business, then the free market will have determined it's value.

• Privatize Fannie Mae and Freddie Mac. That has been partially done already. But the federal government stands behind both the companies and particularly the debt they issue to stay in business. Sell the businesses off to private investors and eliminate any government guarantees of their debt. Let the housing industry compete for capital just like any other business in the U.S. Why should every American be subsidized to buy a house by the federal government?

• Eliminate FDIC insurance of bank deposits. Too many banks survive solely because the public deposits their money with them only because they know the federal government will make good on their deposits even if the bank is badly managed. Why should the government take this risk? Let the public figure out which banks are well-managed and which are not. There may be some bank failures and some people will lose their savings, but in time the free market will identify the remaining reliable and well-managed banks where depositors can feel safe placing their savings without the guarantee of the federal government.

So, there you go. There's some ideas that could provide meaningful savings to federal government spending without either slashing spending or increasing taxes. While this is a long post, the list of other potential government services that could be privatized is a whole lot longer, I'm certain.

Anyone got any other ideas? What do you think?

Good post
 

IAUDIT VK has just given you my answer. Well done VK.

Already answered
 

Repeating old postings won't make me answer differently than I did on March 14 because my consevative values do not change.

How about a very simple answer regarding reducing the deficit
 

without raising taxes? Reduced spending sufficient to offset ANY new programs or initiatives.
Only those in Washington and their supporters continue to accept new programs as additive to an already bleeding bottom line.
This is not an Obama phenomonem, nor is it in the ever popular lump it all in again on Bush era.
It has been the operating mode for far too many years.

The only way to reduce the deficit is to stop the spending. Very simple, obvious answer that does not seem to garner ANY interest from any administration including the current one that is setting records with it's monstrous spending programs with only words (rarely) about where the funding will come from.

The most reliable, guaranteed way to fix an ailing business is to strangle spending to a minimum. A very unpopular approach even in corporate America, where at least some have accountability and responsibility and a concept of an income statement. In Washington there is no accountability or responsibility to reduce spending....and there certainly is no concept of an income statement.

It is a very simple concept....but foreign to wealthy political lawmakers who have no knowledge or desire to implement.

btk

I'll demonstrate my opposition to the 'privatize everything' idea with one example.

Roosevelt started our national parks SPECIFICALLY because of the risk of corporate exploitation. Corporations have no loyalty other than to the stockholder. Privatize the parks and, even if they still exist, only the most profitable 'guests' will be allowed in.

Carry that attitude to other areas. Do you want Veterans who are no longer profitable to be kicked off the VA plans? Do you want gridlock when several million more cars are added to our rush hours when subways, busses and Amtrak suddenly stop serving people and selling off assets to benefit the shareholders?

Even though I make a decent living, that's not the America I want to live in.

NASA, I think, has the right idea. They set the rules and are contracting out to see if they can get services more efficiently (I'm a big fan of SpaceX, as an example). The flip side of that is MY job where the company that employs me makes more money from the government than I do. In other words, the government pays $X/year for my position. Of that money, I see less than half (less still after taxes) as my employer takes over 50%. (In software contracting this is NOT the norm) This is why the government is eventually converting my got to 'organic' - i.e. to be filled by a civilian employee of the Air Force. They're going to save money.

Privatization is a good thing in many cases - let's just not throw the baby out with the bathwater.

OK, No Plan
 

Fair enough. You have conservative values, but no plan for solving the budget crisis and reducing the national debt. Got it.

It's Only Arithmetic
 

You're right. Strangling spending is a way to reduce the deficit. But there's no way that will actually result in a deficit-free budget.

Unfortunately, even if all discretionary government spending were eliminated, we would still generate substantial annual deficits and additions to the national debt.

The federal budget for FY 2011 is $3.6 trillion. Tax revenues amount to $2.4 trillion. The resulting deficit is $1.2 trillion.

The total of "discretionary" items in the budget is $1.4 trillion. That is, less than half of federal spending is truly controlled by annual appropriations bills. The balance of $2.2 trillion must be spent as the result of prior legislation, such as for Social Security, Medicare, Medicaid, TARP, and the recently-approved jobs bill.

So, very simply--I'm repeating this yet another time--in order to balance the annual federal budget, virtually ALL discretionary government spending would have to be eliminated--86% of the total discretionary budget. I should point out that the largest item in the discretionary budget is that of the Defense Department which is $549 billion of the $1.4 trillion discretionary budget. So using a ridiculous example to illustrate the problem, if ALL discretionary government spending was eliminated and the balance used to only fund the Defense Department, even defense would have to take a 64% cut to it's budget.

Obviously, that leaves the Congress to consider changes in existing laws to reduce "mandatory" budget items--Social Security, Medicare, Medicaid and the interest on the national debt are the largest items. Or, if they don't have the guts to slash those expenses, then the only alternative is to raise taxes.

The math isn't hard--it's only arithmetic.

No Other Way Out
 

I don't disagree with you at all, DJP. As much as anything, I posted that list to demonstrate how much balancing the federal budget will affect our way of life. If we don't do something like "privatize", then we're back to trying to solve the problem with cutting expenses and/or raising taxes.

In another post right above, I demonstrated the impossibiity of balancing the budget by cutting costs. I've concluded that there is no other alternative to solving our problem than a combination of deep spending cuts--including cuts to Social Security, Medicare and Medicaid--plus some substantial tax increases.

I can't see any other way out.

I understand that some national parks, I don't know where they are, no longer accept the national park Golden Passport, or whatever it is called. Those parks at the ones managed by contractors.

There it starts.

$$$$339 Billion Saved
 

By reducing wages paid to government employees. If government employees earned the same percentage as private sector employees, 339 billion dollars could be saved annually. No small potatoes. Seems there is a privileged class here in America?

http://online.wsj.com/article/SB1000...ctions_opinion

Yes
 

I have it.

Cut spending across the board and take the lumps.

When a business is dying does it raise its prices (as in tax increases) or does it slash its costs and prices.

I am getting the idea that you just like to disagree and write lots of quotes from left wingers with a little carrot thrown in once in awhile to confuse we conservatives.

I honestly think part of our problem is our overall method of taxation. It's a "divide and conquer" approach. I pay tazes to so many different jurisdictions, it's laughable. I pay more KINDS of taxes than I can shake a stick at. Each one of these agencies and jurisdictions have their own set of rules, their own legions of employees and their own bank of lawyers. We're bleeding to death from papercuts.

We look at Europe and see that they pay higher income and fuel taxes. But how many other taxes do they pay - and to how many agencies? How much is lost due to 'overhead'?

Off the top of my head, I pay Federal income, FICA and Medicare taxes. Then there's state income tax, property tax, sales (when I'm in MA) and meals taxes. Excise taxes, registration fees, gas taxes, tolls, innumerable taxes piled on my electric and phone bills, travel taxes piled on my airline tickets for my daughter to visit me, hotel taxes, car rental taxes, "user fees", "imputed income" taxes on my life insurance premiums. If I save money I may have capital gains taxes. If I sell my house or buy one I have transfer taxes, municipal and state fees, recording fees. Unless they're included in my property taxes I may have taxes on my water and sewer bills (though in my town they're not). IN NH they just passed (and are about to repeal) a tax on campground sites, similar to the hotel rooms tax. If I ran a business here in NH, I might be subject to the Business Profits Tax. If I did exporting or importing, I'd have various treaties and tariffs that I'd have to abide by. In MA and other states, I can be taxed just on the things I OWN - "personal property tax", so that I keep paying and paying taxes on stuff I already bought.

Again, this is just off the top of my head!

We need top-to-bottom, coast-to-coast, manufacturer-to-retail TAX REFORM. We need to streamline the number and types of taxes and the methodology for collecting them.

How many people are in favor of the Flat Tax? I know I am. How many people would consider switching over from an Income Tax to a National Sales Tax? A *simple*, FLAT, easy-to-collect tax that makes it REALLY difficult to cheat at taxes (to say nothing of doing away with April 15th for ordinary citizens).

I'd at least consider it. It's clear that our current system of "we'll raise THEIR taxes so YOU'RE ok" followed up by the reverse the next time around - is NOT working. The legislooters divide us up into little pidgeonholes so that one group can be hit without it hurting the politician in the next election. How many times have car rental and "airport access fee" rates along with hotel room taxes been hiked with their 'sales pitch' being "it'll hit OUT OF STATE people"?

Reform the tax structure in this country. Make the net WIDE so that you can't escape with your little Special Interest Clause. Pass a Constitutional Ammendment to force a balanced budget with VERY few exceptions. MAKE us live within our means.

Now that health care will be extended in a more equitable and civilized manner, I too would like to move toward reducing the budget. Besides attempting to cut spending, and my goal here would be to get out of Afghanistan and Iraq as quickly as possible, I would also turn loose lots of federal employees and pay commission on uncovering medicare, welfare and social security fraud.
But my real focus would be on raising taxes. That's right, the most hated and politically courageous solution. Let's write tax legislation to destroy the bonus payment structure for financial institutions and other institutions which has placed thousands of nouveau riche into the lap of luxury. Let's sharply increase the percentage of taxes paid on high annual incomes, with, for example, dollars over 1 million 'earned' taxed at at least 50-60%. Beyond that I can support a progressive tax up to 90%. Let's sharply increase estate taxes, not for those passing on the family farm or business, but those for those who have amassed huge piles of cash and securities. Ask Warren Buffet and Bill Gates to design the model. I'm not talking about 'taking everything away from those who worked so hard for it', but I believe our nation is corrupted by, and will eventually be destroyed from within if we continue to allow a privileged elite to contribute nothing more than another larger generation of elite living off of great-grandpa's fortune.
OK, so I'm not making many friends here, but for the long term benefit of our nation, temporary, targeted increases in the tax structure is a big part of the answer.

Pick Your Poison
 

Do the math, Cashman.

To create a balanced budget would require the elimination of ALL discretionary government spending and about 2/3 of the defense budget. Not possible, agreed?

If we cut "discretionary" spending by 30%, then we would have to cut entitlement payments--Social Security, Medicare and Medicaid--by 35%.

Are you on board for these kinds of cuts? The alternative, of course, is somewhat lesser spending cuts and increased taxes. Pick your poison.

Frankly folks, in my opinion, with the passing of the TOTAL MESS of a healthcare bill, we have lost any chance of doing anything about anything for many years.

First of all, this bill is such a mess and so politically put together that our future congress's will be spending pretty much all of their time discussing required legislation that this bill calls for ! So much of this bill calls for the increase in many taxes not to happen until 2018. Now think about it....the congress of that year has to vote in these new taxes...one is the cadillac tax. So lets assume that politicians will find a way NOT to add those taxes, thus the CBO report is smoke and mirrors, and the cadillac tax was/is important in the

Remember that the CBO when they announced to the glee of the Democrats that this would reduce the deficit, they said a lot of IFS.

Also in this bill, a 3.9 percent medicaire tax on investments and capital gains...anyone think tihs will deflate our economy and growth...think another bailout of some kind. This should totally stunt growth and wages.

The states are getting beat to death with this boondoogle of a bill and will need help quickly.

And insurance premiums are going to skyrocket, and you MUST buy insurance, or get penalized...think government help in that area.

This bill will NOT reduce the deficit...because all the IF's in the CBO report are not going to happen.

Our congress and future congress's are going to spend all their time on THIS ONE SINGLE STUPID POLITICAL MESS and are not going to be able to address all the things you folks are talking about !

Now that health care will be extended in a more equitable and civilized manner, I too would like to move toward reducing the budget. Besides attempting to cut spending, and my goal here would be to get out of Afghanistan and Iraq as quickly as possible, I would also turn loose lots of federal employees and pay commission on uncovering medicare, welfare and social security fraud.
But my real focus would be on raising taxes. That's right, the most hated and politically courageous solution. Let's write tax legislation to destroy the bonus payment structure for financial institutions and other institutions which has placed thousands of nouveau riche into the lap of luxury. Let's sharply increase the percentage of taxes paid on high annual incomes, with, for example, dollars over 1 million 'earned' taxed at at least 50-60%. Beyond that I can support a progressive tax up to 90%. Let's sharply increase estate taxes, not for those passing on the family farm or business, but those for those who have amassed huge piles of cash and securities. Ask Warren Buffet and Bill Gates to design the model. I'm not talking about 'taking everything away from those who worked so hard for it', but I believe our nation is corrupted by, and will eventually be destroyed from within if we continue to allow a privileged elite to contribute nothing more than another larger generation of elite living off of great-grandpa's fortune.
OK, so I'm not making many friends here, but for the long term benefit of our nation, temporary, targeted increases in the tax structure is a big part of the answer.

Right On!
 

I'd be onboard for the Flat Tax. I'm less enamored with the Fair Tax. Instead of that, the idea I like best is the Value-Added Tax (VAT). That's the tax system most common in Europe. It's simply a tax levied at every level of the economy based on the value added at the time of sale of goods. Suppliers of raw materials would collect a tax from, say a distributor of those materials. The distributor would collect a tax when the material was sold to the manufacturer. The manufacturer would collect a tax when he sold his manufactured item to a wholesaler. The wholesaler to the retail re-seller, then again when it was sold to the consumer. The tax rate itself is quite small, but in total enough to pay for the desired level of government-provided services. Read more about it at...http://en.wikipedia.org/wiki/Value_added_tax

But the problem with any single overall scheme of taxation is how do the tax revenues get split up between the various levels of government providing services...township, town, county, state, school district, fire district, park district, federal, etc. Wow! What a negotiation that might be.

You are absolutely right. This boondoogle of a bill will be the straw that broke the camel's back. After November and the Republican takeover of congress, the first duty will be to repeal this BOGUS bill and try to do something to stimulate the economy. We need to put the 20% of people that are unemployed back to work. This will be one of many years of more money leaving social security then coming in if unemployment stays at this huge rate.
Remember. vote them all out. (except Scott Brown)

ijusluvit: You *do* realize that it was getting RID of the 90% tax brackets that contributed to the greatest economic expansion thic country ever saw, yes? When you make it so that dollar earned has the government taking MORE THAN HALF, you have provided two major disincentives - One, the disincentive for making it (why bother if the government is going to take half?). Two - drive the economy underground so as to evade taxation.

This is why Reagan's tax cuts provided such a jolt.

And as far as the problems you have with 'the bonus structure', let me tell you something. You may have an argument with 'the fatcats', but speaking as one of the lower-level employees of Fidelity Investments in the 1990s, I can tell you that a lot of middle class people DEPENDED on those bonuses. At least at Fidelity, they were paid out in early December. If you were really good, you could get as much as a month's pay in one lump sum. Let me tell you, that made Christmas shopping a lot easier :) I certainly was NO millionaire - I didn't even make $50,000 back then, and had a wife and two kids that I was supporting.

VK: I've heard of the VAT and although I'm not fond of it, I'm certainly willing to listen. One of the knocks against it (again, from what I've heard) is that the government can bury tax hikes, hiding them, in effect.

In my opinion, even if the Republicans do not take over congress, future bodies are going to spend so much time "fixing" this total disaster of a bill, and I cannot wait until the groups come in that HAVE TO mandate tax increases.

This bill is such a political hodgepodge, soon everyone will forget that it was supposed to be for the uninsured. When you HAVE to buy it, and it is expensive for on thing.

I posted my thoughts here because those posting about deficits and balancing are all going on the assumption that the CBO number floated around was 100% correct...that ALL the maybes come true, which even the Democrats admit wont. They are discussing this as if this bill is paid for....my oh my, there is a long road ahead to pay for this bill !

When you backload something because you want to try and difuse the political fireworks, you just ask for trouble and this bill will haunt us for quite sometime.

Don't know if this is the kind of taxes to which you refer (VAT), but I once worked for a wholesale liquor distributor. He had a sign in his office that read:

"We collect taxes: State, county, and federal. Sideline: We also sell whiskey."

Unbelievable
 

What is it that you do not get in the following statement:

Yes we need more revenue from federal taxes which we get by decreasing rates. Increasing rates reduces revenues. if you disagree with these facts say so and get this debate over with.