Big Government Fact Of The Day

Big Government Fact Of The Day

Neal Boortz
March 18, 2011

Here's one of those statistics that I will throw at you .. your eyes will glaze over .. and you will skim until you get to something mildly entertaining. But try and wrap your brain around this. On Tuesday of this week, the House passed another continuing resolution, which includes $6 billion in cuts. Six billion? That's all they could muster.

On the same day the Republicans passed this bill and cut $6 billion from our budget, the national debt jumped $72 billion. CNSNews has another way for you to put it in perspective....

If Congress were to cut $6 billion every three weeks for the next 36 weeks, it would manage to save between now and late November as much money as the Treasury added to the nation's net debt during just the business hours of Tuesday, March 15.

I don't know how else to stress this: we are operating at unsustainable levels. Unless somebody in Washington grows gonads of steel, it may be that we lead to our own destruction.... well, maybe not for me, I've outlived this thing. But for your grandchildren. They're screwed. Here's some light reading for your weekend: Already too late to stop debt crisis?

If we want to fix the budget, we will need to dismantle our military and scrap Social Security, Medicaid, and Medicare.

kronos wrote:If we want to fix the budget, we will need to dismantle our military and scrap Social Security, Medicaid, and Medicare.

We wouldn't have to come even close to this. We could fix our budget problems by simply cutting discretionary non-defense spending levels back to 2007 levels, increasing the retirement age to 68 (though I'd go further) and introduce means testing for Social Security benefits. These actions alone would balance our budget within 5-10 years.

Of course, we could do so, so much more than this to solve our budget deficit and national debt woes - and I have written about this many, many times. But my solutions would involve a transfer of power from the government to the people that most politicians would never agree to - to the point of blatantly lying about that solution (a bill that has been being introduced as HR 25 in the House for at least the last 15 years, if not more).

I don't know how you arrived at that conclusion, but if you're right and the solution is that easy, then the deficit is really not that much of a nightmare after all.

I'd support raising the retirement age to 68. 65 isn't the ripe old age it was in 1932. These days you're still a spring chicken at that age. Of course, I have no illusion that the system will be there at all when I hit 65.

kronos wrote:Of course, I have no illusion that the system will be there at all when I hit 65.

It probably won't be. That's just my guess. If that is so, we can all blame the politicians from both party's for plundering it in the last 40+ years.

I can't remember the exact stats but it went something like this; 20 years ago, one tax payers S.S contribution for a month paid for 7 retirees S.S. checks. Today, it's one for 3 retirees. That's scary because that number will drop when the baby boomers start retiring en mass..... which we're seeing the start of.

Again, we can blame the good ol' gov't for fucking it all up.

TexasBlue wrote:

kronos wrote:Of course, I have no illusion that the system will be there at all when I hit 65.

It probably won't be. That's just my guess. If that is so, we can all blame the politicians from both party's for plundering it in the last 40+ years.

I can't remember the exact stats but it went something like this; 20 years ago, one tax payers S.S contribution for a month paid for 7 retirees S.S. checks. Today, it's one for 3 retirees. That's scary because that number will drop when the baby boomers start retiring en mass..... which we're seeing the start of.

Again, we can blame the good ol' gov't for fucking it all up.

Actually, it's the other way round... there were 7 taxpayers for every retiree... now it is 3 or fewer taxpayers for every retiree. And the boomers are only now beginning to reach retirement age. As this was the single largest generation in the nation's history, you can see the writing on the wall from here.

dblboggie wrote:Actually, it's the other way round... there were 7 taxpayers for every retiree... now it is 3 or fewer taxpayers for every retiree. And the boomers are only now beginning to reach retirement age. As this was the single largest generation in the nation's history, you can see the writing on the wall from here.

That's what I meant. It didn't come out of my fingers right. The thought was exactly what you said.

kronos wrote:I don't know how you arrived at that conclusion, but if you're right and the solution is that easy, then the deficit is really not that much of a nightmare after all.

I'd support raising the retirement age to 68. 65 isn't the ripe old age it was in 1932. These days you're still a spring chicken at that age. Of course, I have no illusion that the system will be there at all when I hit 65.

I forget where I got this tidbit, and sadly didn't bookmark it, but as I recall, it was something like a cut of all spending to 2007 levels would balance the budget immediately, cutting all spending to 2008 levels would balance the budget in something like 4 or 5 years (and as I recall, the math worked out on these two). And then there were various permutations on this basic idea, cutting all non-military spending to 2007 levels, increasing the Social Security retirement age, means testing for SS retirement benefits, and so on.

The take-away here is that we could balance our budget and start making inroads on our national debt if only there were the political will to do so.

But politicians routinely engage in a great wailing and gnashing of teeth when faced with proposals to simply suspend the automatic increases in spending to adjust for inflation. To hear them tell it, you'd think such proposals were tantamount to ordering the systemic slaughter of children, old people and minorities. It is such utter nonsense as to seem like something from a comedy routine, and yet I've witnessed this dialogue myself countless times.

So imagine the dialogue that would fly when trying to get an ACTUAL cut in spending through Congress and the White House. We are already seeing this dialogue play out over trying to cut what remains of the 2011 FY budget.

The Republicans are proposing an extremely modest $60 billion in cuts and the Democrats are squealing like stuck pigs, characterizing such a tiny cut as "irresponsible."

And that $60 billion cut is $40 billion short of the $100 billion the Speaker of the House said that he would put forward! Imagine the hue and cry if an ACTUAL $100 billion had been proposed.

Bottom line, the deficit and national debt will remain a nightmare until we can get some fiscally responsible politicians elected to office who have the balls to take a principled stand to gore all oxes equally.

TexasBlue wrote:

dblboggie wrote:Actually, it's the other way round... there were 7 taxpayers for every retiree... now it is 3 or fewer taxpayers for every retiree. And the boomers are only now beginning to reach retirement age. As this was the single largest generation in the nation's history, you can see the writing on the wall from here.

That's what I meant. It didn't come out of my fingers right. The thought was exactly what you said.

I thought as much...

dblboggie wrote:Bottom line, the deficit and national debt will remain a nightmare until we can get some fiscally responsible politicians elected to office who have the balls to take a principled stand to gore all oxes equally.

Chris Christie.

TexasBlue wrote:

dblboggie wrote:Bottom line, the deficit and national debt will remain a nightmare until we can get some fiscally responsible politicians elected to office who have the balls to take a principled stand to gore all oxes equally.

Chris Christie.

But he's not running for national office... which is great for New Jersey, but a loss for us.

dblboggie wrote:

TexasBlue wrote:

dblboggie wrote:Bottom line, the deficit and national debt will remain a nightmare until we can get some fiscally responsible politicians elected to office who have the balls to take a principled stand to gore all oxes equally.

Chris Christie.

But he's not running for national office... which is great for New Jersey, but a loss for us.

But he's the only one with gonads to do something. That was the point of my short statement.

TexasBlue wrote:

dblboggie wrote:

TexasBlue wrote:

dblboggie wrote:Bottom line, the deficit and national debt will remain a nightmare until we can get some fiscally responsible politicians elected to office who have the balls to take a principled stand to gore all oxes equally.

Chris Christie.

But he's not running for national office... which is great for New Jersey, but a loss for us.

But he's the only one with gonads to do something. That was the point of my short statement.

True, but we do have Scott Walker, the governor of Wisconsin, with the gonads to do something. And he's doing something that Christie is not, he is not only insisting state union members take on some of the costs of their healthcare and retirement packages, he is taking on their collective bargaining rights on top of that! Now that takes some real cojones!

dblboggie wrote:True, but we do have Scott Walker, the governor of Wisconsin, with the gonads to do something. And he's doing something that Christie is not, he is not only insisting state union members take on some of the costs of their healthcare and retirement packages, he is taking on their collective bargaining rights on top of that! Now that takes some real cojones!

Christie also has a Dem legislature. He could try to do what Walker did but it wouldn't see the light of day.

I think raising taxes to the point taxes were in place in 1994 would get us out of debt sooner than any cuts proposed to date. Also, let's just have the government put back into Social Security what it's taken out to balance the budget, or make an attempt to have the debt look less than it is. Paying back into the "trust" fund would keep it going. As it is now, it has enough to sustain itself until 2031. Keep making all these wars, and I doubt it.

Also, penalize corporations for taking American jobs overseas. Corporations pay currently little (5%) to no taxes. Put taxes on those who take jobs from here and give breaks to those who stay here.

TexasBlue wrote:

dblboggie wrote:True, but we do have Scott Walker, the governor of Wisconsin, with the gonads to do something. And he's doing something that Christie is not, he is not only insisting state union members take on some of the costs of their healthcare and retirement packages, he is taking on their collective bargaining rights on top of that! Now that takes some real cojones!

Christie also has a Dem legislature. He could try to do what Walker did but it wouldn't see the light of day.

Ah... a very, very good point. I forgot about that.

dblboggie wrote:

TexasBlue wrote:

dblboggie wrote:

TexasBlue wrote:

dblboggie wrote:Bottom line, the deficit and national debt will remain a nightmare until we can get some fiscally responsible politicians elected to office who have the balls to take a principled stand to gore all oxes equally.

Chris Christie.

But he's not running for national office... which is great for New Jersey, but a loss for us.

But he's the only one with gonads to do something. That was the point of my short statement.

True, but we do have Scott Walker, the governor of Wisconsin, with the gonads to do something. And he's doing something that Christie is not, he is not only insisting state union members take on some of the costs of their healthcare and retirement packages, he is taking on their collective bargaining rights on top of that! Now that takes some real cojones!

And lowering wages, stopping affordable health care and robbing from pensions helps this nation and its debt, how? Lower wages pay lower taxes which mean housing is giving up so property taxes stop giving even less revenue.

Cookie Parker wrote:And lowering wages, stopping affordable health care and robbing from pensions helps this nation and its debt, how? Lower wages pay lower taxes which mean housing is giving up so property taxes stop giving even less revenue.

Lower wages pay lower taxes and those very people get back everything they pay in. Some even get tax credits. A tax credit isn't something they paid in to get back. It's money given by the gov't.

Property taxes are a state issue. The issue is national debt.

Cookie Parker wrote:I think raising taxes to the point taxes were in place in 1994 would get us out of debt sooner than any cuts proposed to date. Also, let's just have the government put back into Social Security what it's taken out to balance the budget, or make an attempt to have the debt look less than it is. Paying back into the "trust" fund would keep it going. As it is now, it has enough to sustain itself until 2031. Keep making all these wars, and I doubt it.

Also, penalize corporations for taking American jobs overseas. Corporations pay currently little (5%) to no taxes. Put taxes on those who take jobs from here and give breaks to those who stay here.

Actually, raising taxes in an economic trough (a recession) is counter to the expansionary fiscal policy we should be enacting according to Keynesian economic theory (the current economic theory we are operating on). According to that theory, our fiscal policy should be for cutting taxes and/or increasing government spending. Our monetary policy should be some combination of buying government securities from the banks and the public, lowering the legal reserve ratio, lowering the discount rate and increasing reserve auctions (all of which are aimed at increasing excess reserves in the commercial banking system and lowering the federal funds rate).

Let’s examine what the current Administration has done in keeping with currently accepted economic policies under the Keynesian model.

Well, the Administration increased government spending enormously. Sadly, none of that spending has been on those things which actually stimulate growth, lower unemployment and increase consumer spending. Rather, the massive “bail-out” bill was nothing more than monster-sized series of “earmarks” kludged together from the long-standing wish list of pet projects of congressional politicians for their states. None of the so-called “shovel-ready” projects said to be funded by this “bail-out” bill were, in fact, either “shovel-ready” or funded.

As for lowering taxes, I think we all know what went down there. Obama was forced, at the last minute, from actually raising taxes... a move universally held to be the very worst move one can make in a recession.

Now under the Keynesian model, all moves made by the government are supposed to be designed to encourage spending and investment. You want consumers to buy stuff, and businesses to invest through expanding their businesses and hiring more people. That’s why you lower taxes and interest rates... you’re trying to prime the pump of enterprise – you want to give people and businesses some confidence and predictability in what their future costs will be so they get back to buying and producing.

But this is not what our government is doing. First of all, not only did this administration not cut taxes, they effectively increased them for businesses with the passage of Obamacare and the “financial reform” bill. This makes it nearly impossible for businesses to determine what their future costs for capital and labor are going to be. When you then add the uncertainties of whether or not “cap-and-trade” is going to be administratively enforced (this is nothing more than a massive carbon tax on businesses) and “card-check” is likewise going to be implemented administratively, then you create a perfect storm of uncertainty in the business sector that is going to paralyze growth and keep the economy stagnant and unemployment high.

What you propose, would only make things even worse than they are now.

As for Social Security, just moving money around is not going to fix anything. Let’s face it, when that program was introduced in the 30’s, life expectancy was about 64 years (1 year after retirement age) and there were far fewer older people drawing on it. Life expectancy is now in the mid-80’s, and there’s a massive generation of boomers set to retire right now, much larger than any generation past. We have to face facts here, we just cannot afford a program that was designed at a time when people lived to 64 on average and retired at 65. The retirement age is going to have to be raised to avert the bankruptcy of Social Security. And that’s not our only problem, Medicare and Medicaid are also seriously overstretched and costing us more every day.

Finally, the idea of raising taxes on corporations (we have the 2nd highest corporate tax rates in the industrialized world – it is 35%, not 5%) would not only drive us into a double-dip recession, it would do nothing to bring jobs back to America. In fact, it would drive even more jobs from our country.

But this misses the larger truth here; and that is the fiction that businesses pay taxes at all! It is impossible for a business to pay taxes because they don’t print money – they make money by selling goods or services. All the money they get comes from someone buying what they’re selling. It is that money, given to them by consumers of their goods and services, which they use to pay all their bills – including tax bills.

So raising the corporate tax rate only makes them less competitive to foreign producers and suppliers, the increase in taxes is passed on to consumers of their goods and services – which hits lower income persons proportionately harder.

Cookie Parker wrote:Also, penalize corporations for taking American jobs overseas. Corporations pay currently little (5%) to no taxes. Put taxes on those who take jobs from here and give breaks to those who stay here.

Your figures are wrong on corporate taxes. Dbl beat me to it above.

Also, raise those corporate taxes more than they are guarantees consumers paying more at the register. Corporations don't pay taxes, per se. They recoup what they pay via the prices of their goods. Pay less corporate taxes and you'd see lower prices at the store.

Update. Japan has now lowered their corporate tax rate from 40% to about what ours is in an attempt to "spark corporate activity" (as the New York Times put it).

So, it would appear that we are now in a tie for first place with Japan in the category of highest corporate tax rates amongst industrialized nations.

Ain't that grand?