National Debt And Stuff

[Elixir]

Again, CBO estimates are that if Biden's budget plans pass the current deficit of $1.2 trillion will be cut to $500 billion. Again, if not having to battle an utterly incompetent, obstructionist GOP, a balanced budget is possible. But that involves raising taxes, which the GOP will never support. SS could be made sound, but the GOP has opposed the measures to do so for decades now. GOP rat fuckery. Bil Clinton balanced the budget. It can be done. But not with the GOP retaining its current level of power.

That is all.

I fully agree. Weird that Republicans seem to be putting American politics into self-correction mode.
Republican "leaders" are dragging the Party down the abortion rights rabbithole, with Republican judges trying to overrule both science and the laws of the land with their personal religious superstitions. Their "preferred" presidential candidate is twice impeached and will almost certainly be facing multiple felony indictments by election day, and their SCOTUS has utterly disgraced itself.
I can only imagine the criminal shenanigans they are planning for 2024, in order to compensate for the fact that their actions and platforms have the support and approval of 35% of the electorate, if that.

 

[bilby]

The problem with the budget is spending increases are now strongly related to mandatory spending for retirement support. We could strip all non military discretionary spending and be well in a deficit (and recession).

We are stuck with a social security funding problem the GOP gladly helped create since 2004 by refusing to address the issue like adults.

The GOP will, however, address the issue over the next couple of decades, like corpses.

The boomers are the problem (both as the unproductive drain on the economy, and as the counterproductive influence in the electorate), and like the boomers themselves (and indeed us all), it's a problem that is strictly temporary.

 

[Lumpenproletariat]

The problem is the combination of the Red and Blue ideologues dominating society, both of which are equally to blame. The proper solution is to have some tax increases and spending cuts.

But if they're incapable of doing that, as it appears so far, then the fallback solution is for the Congress to fail to pass the debt ceiling raise, so that a crisis is provoked which will force something to change. If then there's a real default on the debt, it will be the President's fault, because he can take steps to ensure that the bondholders get paid even if there's no raise of the debt ceiling.

This is a case where the problem is solved by the decision-makers doing nothing -- unable to agree -- making no decision, and as a result we'll have a better overall outcome than if we keep doing what we've been doing so far (continuing to increase the debt as a % of the economy).

 

[Lumpenproletariat]

You're dishonest to say you want higher taxes (to reduce the deficit) unless you also favor higher gasoline taxes. Also a Wall St. tax. It's phony to name only income tax as the source for extra tax revenue.

Both Repubs and Demos are equally dishonest about taxes and the debt. And equally to blame if there's a debt crisis.

 

[Loren Pechtel]

You're dishonest to say you want higher taxes (to reduce the deficit) unless you also favor higher gasoline taxes. Also a Wall St. tax. It's phony to name only income tax as the source for extra tax revenue.

Both Repubs and Demos are equally dishonest about taxes and the debt. And equally to blame if there's a debt crisis.

You can approve of higher taxes without approving of higher gasoline taxes.

We have too many taxes as it is. Instead, we should have one true tax: income tax. Beyond that we should have "taxes" that pay for what their purpose is--gas taxes pay for roads, property taxes pay for city infrastructure (police/fire/ems/school/library/parks and the like) etc, but there should be few of these. If a tax is not progressive it is in actuality regressive and we should be seeking to minimize regressive taxes.

My understanding is that gas taxes + vehicle registration fees are well above road spending. (And I would move more of the burden to heavy vehicles--road wear is mostly heavy vehicles and weather, light vehicles do almost nothing.)

 

[bilby]

And I would move more of the burden to heavy vehicles--road wear is mostly heavy vehicles and weather, light vehicles do almost nothing.

...except enable literally everything else that happens in the economy.

Heavy vehicles provide public services, and so should be tax exempt. They're infrastructure. Taxes paid by the operators of heavy vehicles just end up in the retail price of goods anyway; So taxing these vehicles is just a way to make tax more regressive. Add the cost to income taxes, weighted towards the higher brackets - those are the people who benefit from the heavy vehicle movements most anyway.

For that matter, light vehicles probably shouldn't be taxed either.

I'm a supporter of "beneficiary pays" rather than "user pays"; And for infrastructure such as roads, personal income is a prettier good proxy for the degree to which individuals are benefiting from the infrastructure in question.

 

[Lumpenproletariat]

Raise more revenue, whatever it takes. Tax anything and everything.
Whatever works best to raise the maximum revenue long-term.

You're dishonest to say you want higher taxes (to reduce the deficit) unless you also favor higher gasoline taxes. Also a Wall St. tax. It's phony to name only income tax as the source for extra tax revenue.

Both Repubs and Demos are equally dishonest about taxes and the debt. And equally to blame if there's a debt crisis.

You can approve of higher taxes without approving of higher gasoline taxes.

We have too many taxes as it is. Instead, we should have one true tax: income tax.

Not if we care about RESULTS, about trying to produce a good outcome. There's no purpose served by obsessing on income tax as the "one true tax" -- like a religious dogma.

Income tax is the most costly to enforce. That which is the most expensive = more harm than other choices which are less costly.

The super-rich find ways to avoid paying income tax. More income tax = many more tax loopholes and much more resources into pockets of tax lawyers and auditors.

Many other taxes are better and more enforceable = more revenue from the super-rich, some of whom have lower "income" to tax.

And beyond only raising revenue, taxes can serve other legitimate purposes: Gas tax and other taxes on harmful products serve to reduce the damage those products cause, disincentivizing consumers from buying them. This too is a legitimate benefit as long as it does not conflict with the primary need to raise more revenue.

Also taxing luxury items is beneficial, because even if those products are harmless, they are less necessary, and so even if they are reduced (less of them produced), there is little harm, whereas products more necessary should be taxed less or not at all, because taxing them inflicts more harm than taxing luxury items.

Also property should be taxed much more. There is a huge waste of property today, such as luxury homes and apartments going unoccupied because the owners gain more profit by keeping them vacant, using them for investment and loans.

There's much waste and inefficiency because of the over-reliance on income tax which is so easily avoided by the super-rich.

Beyond that we should have "taxes" that pay for what their purpose is--gas taxes pay for roads, property taxes . . .

No, their purpose is also to provide revenue for all public needs, even beyond "roads" or whatever. Designating each tax to pay for a certain designated purpose is wasteful, imposing unnecessary cost to make sure each one is paying the right amount for each intended purpose. No social benefit is served by this extra cost of making sure each tax dollar goes to its intended purpose and nowhere else.

It's better to tax anything that is convenient to tax and yields a good outcome of more revenue (long-term) while inflicting the minimum harm possible, or minimum bad incentives. And not imposing any extra cost such as hiring administrators and analysts to calculate how much of each tax should go to paying for which public need.

. . . property taxes pay for city infrastructure (police/fire/ems/school/library/parks and the like) etc, but there should be few of these.

There should be no designating any tax to go for an assigned public purpose because someone thinks this particular tax exists only to serve this particular purpose and nothing else. Rather, every tax should be designed to produce the maximum revenue, for ALL public purposes -- into the "general fund" -- to get the maximum benefit that can be gained long-term from that tax.

And if it's possible for the state to gain a "profit" from a particular tax, because it's a good "cash cow" for the state, there's nothing wrong with that, because it's the people's money, for the benefit of the whole society -- as long as the state does not suppress private business from serving that need also if it can. There might be some needs not easily served by private business but which the state can serve -- and perhaps at some point even provide that service at a profit. The danger would be a state-established monopoly which excludes private competition. Serving all consumers (such as through competition) has to be the bottom line throughout, including anything which makes the state stronger. It's good only if it makes all the consumers, or all citizens better off -- like the competitive free market makes them better off.

If a tax is not progressive it is in actuality regressive and we should be seeking to minimize regressive taxes.

Not if that tax is on an item doing harm to society, such as fossil fuel. In that case a higher regressive tax is OK. This can be offset by reducing or eliminating income tax on lower brackets. Probably income tax should be eliminated totally on the bottom half of income-earners.

My understanding is that gas taxes + vehicle registration fees are well above road spending.

The gas tax should be higher because of the extreme damage being done by the carbon emissions. It should be much higher than to just pay for roads.

(And I would move more of the burden to heavy vehicles--road wear is mostly heavy vehicles and weather, light vehicles do almost nothing.)

Tax heavy vehicles more if it's convenient. But for all of them, the point is to get the maximum revenue possible, not make them pay each for their proper share of road wear.

 

[Swammerdami]

"Most of us believe that the Sun and all the other planets orbit around the Earth; but it is possible that Venus and Mercury orbit the Sun, with the Sun and other planets still orbiting the Earth."​

The above could be heard from a well-informed intelligent man in the late 16th century. But if we heard it today we'd ... be surprised.

The problem is the combination of the Red and Blue ideologues dominating society, both of which are equally to blame. The proper solution is to have some tax increases and spending cuts.

I was going to compare this peculiar view with the Braheistic view above. But the analogy fails because even in the late 20th century, it was the GOP specifically which consistently strove to increase the federal debt. Reagan, Bush-43 and Trump all increaed the debt hugely with their tax cuts on the rich. Obama, Biden and especially Clinton made much progress on deficit reduction.

I'm curious about Lumpenproletariat's understanding of the two political parties.

The Blues want to provide poor schoolchildren with nutritious lunches. The Reds want to ban cartoons depicting girls in boys' clothing. Same-same?

The Blues want to increase taxes on the rich, though these higher rates will still be lower than any rate in the previous century. The Reds want to reduce taxes on the rich even further, despite record-setting income inequality already. Same-same?

The Blues have proposed a budget which reduces the deficit sharply. The Reds haven't even proposed a budget since the "Burn it down" faction led by Boebert, Gaetz and MTG may veto whatever blackmail scheme the "moderates" come up with. Same-same?

I have an American acquaintance in his 30's who is an intelligent and high-paid software engineer. Recently I learned that He had never heard of the January 6 Insurrection!

There seem to be some gaps in Mr. Lumpen's knowledge as well.

- - - - - - - - -

You can approve of higher taxes without approving of higher gasoline taxes.

We have too many taxes as it is. Instead, we should have one true tax: income tax. Beyond that we should have "taxes" that pay for what their purpose is--gas taxes pay for roads, property taxes pay for city infrastructure (police/fire/ems/school/library/parks and the like) etc, but there should be few of these.

I strongly disagree.

A major purpose of gasoline tax should be to encourage transport alternatives that emit less CO2. We'd want that tax even if no roads needed repair. Similarly, revenue from tobacco taxes need not be spent on cancer research -- its purpose is to discourage smoking. The funds should be spent according to society's needs.

The income I get from my pet chipmunk videos need not be spent on the chipmunks -- I can use it to buy my car a new set of tires. Why should government income and spending be any different?

Would a gas tax be regressive? Of course. That's why I propose to fund SocSec with the gas tax receipts and use this revenue to rebate the first $3000 of individuals' payroll tax.

 

[Loren Pechtel]

And I would move more of the burden to heavy vehicles--road wear is mostly heavy vehicles and weather, light vehicles do almost nothing.

...except enable literally everything else that happens in the economy.

Heavy vehicles provide public services, and so should be tax exempt. They're infrastructure. Taxes paid by the operators of heavy vehicles just end up in the retail price of goods anyway; So taxing these vehicles is just a way to make tax more regressive. Add the cost to income taxes, weighted towards the higher brackets - those are the people who benefit from the heavy vehicle movements most anyway.

For that matter, light vehicles probably shouldn't be taxed either.

I'm a supporter of "beneficiary pays" rather than "user pays"; And for infrastructure such as roads, personal income is a prettier good proxy for the degree to which individuals are benefiting from the infrastructure in question.

No, it will encourage business to operate in ways that cause less road wear. You put the tax at the point where the decision is--the person whose behavior can be altered.

 

[Loren Pechtel]

My understanding is that gas taxes + vehicle registration fees are well above road spending.

The gas tax should be higher because of the extreme damage being done by the carbon emissions. It should be much higher than to just pay for roads.

The answer here is a carbon impact fee. (pseudo-tax in my earlier post.) I think that's how all pollutants should be handled--forget this crap of "acceptable" levels, there are no acceptable levels to pollute. Rather, look at the harm and set the cost appropriately. Don't give a free pass to existing industries that pollute--that discourages disruptive technologies that don't pollute.

 

[Cheerful Charlie]

Heavy taxes on forever chemicals and other pollutants.

 

[bilby]

No, it will encourage business to operate in ways that cause less road wear. You put the tax at the point where the decision is--the person whose behavior can be altered.

That's a lovely hypothesis, but it's not how heavy vehicles are managed in reality.

Businesses operate in ways that cause less road wear because they are required to do so by legislation. Regulations specify the axle loads, wheel loads, load distribution, and braking requirements for various vehicles and trailers, and businesses comply or get penalised.

Beyond compliance with these regulations, there's very little a heavy vehicle operator can do to limit road wear, that they're not already doing, to limit fuel consumption.

Taxes scaled to the amount of damage a given vehicle does to the road infrastructure would be essentially impossible to calculate; At best you can use proxies such as numbers of axles and/or gross mass, which don't change with the behavioural changes that could limit road damage.

Making operators pay for the infrastructure they use in order to get them to treat it with care is a nice idea, but it's not actually effective, and it's not the best way to fund infrastructure maintenance.

The benefit each citizen gets from the existence of infrastructure is very closely reflected in that citizen's income. So tax that. In a highly progressive way.

 

[Loren Pechtel]

No, it will encourage business to operate in ways that cause less road wear. You put the tax at the point where the decision is--the person whose behavior can be altered.

That's a lovely hypothesis, but it's not how heavy vehicles are managed in reality.

Businesses operate in ways that cause less road wear because they are required to do so by legislation. Regulations specify the axle loads, wheel loads, load distribution, and braking requirements for various vehicles and trailers, and businesses comply or get penalised.

Beyond compliance with these regulations, there's very little a heavy vehicle operator can do to limit road wear, that they're not already doing, to limit fuel consumption.

Taxes scaled to the amount of damage a given vehicle does to the road infrastructure would be essentially impossible to calculate; At best you can use proxies such as numbers of axles and/or gross mass, which don't change with the behavioural changes that could limit road damage.

Making operators pay for the infrastructure they use in order to get them to treat it with care is a nice idea, but it's not actually effective, and it's not the best way to fund infrastructure maintenance.

The benefit each citizen gets from the existence of infrastructure is very closely reflected in that citizen's income. So tax that. In a highly progressive way.

Yeah, you look at things like mass per axle and miles driven.

 

[Swammerdami]

Yeah, you look at things like mass per axle and miles driven.

Or, Since both those parameters correlate strongly with carbon-fuel consumption, you can save a round of guesstimation by just increasing the carbon-tax. Yes, hydrogen-fueled trucks won't be paying their fair share for road repair, but no system is "perfect."

 

[Loren Pechtel]

Yeah, you look at things like mass per axle and miles driven.

Or, Since both those parameters correlate strongly with carbon-fuel consumption, you can save a round of guesstimation by just increasing the carbon-tax. Yes, hydrogen-fueled trucks won't be paying their fair share for road repair, but no system is "perfect."

The relationship is very non-linear.

 

[Cheerful Charlie]

Yeah, you look at things like mass per axle and miles driven.

Or, Since both those parameters correlate strongly with carbon-fuel consumption, you can save a round of guesstimation by just increasing the carbon-tax. Yes, hydrogen-fueled trucks won't be paying their fair share for road repair, but no system is "perfect."

Since gasoline and diesel fuel taxes pay for road maintenance, electric vehicles don't pay those taxes. Some states are begi ning to consider taxes on electric vehicles to make sure these vehicles pay their fair share to keep roads in good repair. Some ideas are to track milage and bill car owners based on that. With some states pushing EVs hard, this will some day be an issue. I suspect we will see right wing crazies make a wedge issue over this.

 

[Elixir]

I thought some States factor GVW into registration fees … ?

 

[Lumpenproletariat]

The problem is the combination of the Red and Blue ideologues dominating society, both of which are equally to blame. The proper solution is to have some tax increases and spending cuts.

. . . even in the late 20th century, it was the GOP specifically which consistently strove to increase the federal debt. Reagan, Bush-43 and Trump all increased the debt hugely with their tax cuts on the rich. Obama, Biden and especially Clinton made much progress on deficit reduction.

Cherry-picking facts: Both Obama and Biden had a roller-coaster ride downhill following a crisis which drove up deficits during a severe crisis. And Clinton was aided by the high-tech boom of the '90s, which he was no more the cause of than Al Gore was the inventor of the Internet.

I'm curious about Lumpenproletariat's understanding of the two political parties.

The Blues want to provide poor schoolchildren with nutritious lunches. The Reds want to ban cartoons depicting girls in boys' clothing. Same-same?

So the only issue is: Which crusade of fanatics is nastier -- the Republican Demagogues or the Democrat Demagogues? And how does answering this question solve the debt crisis?

Overall maybe the Repubs have been nastier than the Demos. So what?

The Blues want to increase taxes on the rich, though these higher rates will still be lower than any rate in the previous century. The Reds want to reduce taxes on the rich even further, despite record-setting income inequality already. Same-same?

The Blues have proposed a budget which reduces the deficit sharply.

Only in one year, 2021 (or 21-22), after the sharpest deficit increase in history. Otherwise Biden's budget(s) keep the deficit the same or increase it slightly, even though it has not recovered from the record-high 2020 level.

The Reds haven't even proposed a budget since the "Burn it down" faction led by Boebert, Gaetz and MTG may veto whatever blackmail scheme the "moderates" come up with. Same-same?

Let's agree that Repubs are a little nastier. But this Blue partisan talking-points propaganda doesn't answer how the debt problem is to be solved.

If all the above partisan talking points are accurate, then the facts would show that spending today is a smaller % of the economy than it was 20 / 50 / 80 years ago. And only the debt or deficits are a higher % of the total economy (debt/GDP or deficit/GDP), meaning all this higher debt is due only to tax decreases, or revenue loss, so that the same level of needed spending has been paid for with less and less revenue. So this is claiming that total spending has not increased (as a % of the economy), but the taxes have decreased (as a % of the economy).

Here are 2 graphs which probably tell the truth about what's causing the higher debt -- tax cuts or spending increases (though there are other sources for this which might give the data more accurately, in which case someone can provide it):

Federal Net Outlays as Percent of Gross Domestic Product

Graph and download economic data for Federal Net Outlays as Percent of Gross Domestic Product (FYONGDA188S) from 1929 to 2023 about outlays, federal, Net, GDP, and USA.

fred.stlouisfed.org

Federal Receipts as Percent of Gross Domestic Product

Graph and download economic data for Federal Receipts as Percent of Gross Domestic Product (FYFRGDA188S) from 1929 to 2023 about receipts, federal, GDP, and USA.

fred.stlouisfed.org

One graph shows the ratio of tax receipts to GDP (as a % of GDP), while the other shows the ratio of outlays/spending to GDP (as a % of GDP). You could argue that the taxes/GDP was lower before WW2, and after that was virtually flat, because it rose sharply for WW2 and then never decreased back to the pre-War level.

Both graphs are flatter than one might expect. But both rise (taxes have not decreased (as a % of the economy)), and of the two, the taxes to GDP graph is a bit flatter (or zero rise overall since the War). Meaning both taxes and spending have increased as a % of GDP (as a general pattern, not for every single year), and the spending has increased at a faster rate than the taxes have increased.

So the Blues partisan rhetoric makes sense only if it's proved that the spending increases (as a % of the economy) are necessary, so spending on gov't programs has to become an ever larger and larger percent of the economy, and so it follows that taxes to pay for it must also become an equally larger and larger part of the economy, and those tax increases (as a % of the economy) have not been enough. But taxes have increased (as a % of the economy), not decreased, as Swammerdami implies.


higher taxes on the rich?

(If the argument is not that taxes generally have decreased, but only taxes on the rich, you still cannot deny that spending increases are also a cause of the higher debt. Also, just because you can show some higher tax rates at certain points, this does not show that there were higher tax payments from the rich. You need a graph or chart showing the actual amount of revenue received from the higher-income taxpayers, and take account of the enforcement or non-enforcement of the tax law. Furthermore, those clamoring for higher taxes on the rich must stop obsessing on higher income tax only, but must recognize other forms of taxing the rich which are less costly to enforce.)


So the accurate Blue partisan rhetoric cannot be that taxes have decreased (as a % of the economy) due to tax cuts and have thus caused the increased debt. It is the higher spending (higher as a % of the economy) which has caused the higher debt, or higher spending not accompanied by enough higher taxes to pay for it.

And no one has made the case from any empirical evidence that the public spending has to increase faster than the economy grows, which is basically Swammerdami's argument.

(Unless someone has data to show that taxes/GDP has actually decreased.)



It's not about
the Sons of Light (Demos?) vs. the Sons of Darkness (Repubs?).

So therefore, the only resolution to the debt crisis comes from those who recognize the need for both spending cuts as well as tax increases. Partisan fanatics on either side, insisting on NO SPENDING CUTS or on NO TAX INCREASES are both to blame for the crisis and for whatever bad consequences are going to come from this. (Also to blame are those fanatics who say there is no waste which can be cut from the spending programs. Cutting waste (or finding new ways to cut waste) is also a necessary part of the solution. There are ways to do this, but the partisan Blue and Red fanatics on both sides are oblivious to any serious possibility to address this point, further showing that these two groups in combination are to blame, and only when they are replaced by something better can there ever be any real solution to the budget issues.)

You cannot prove that the spending needs today are greater (as a % of the economy) than they were 20 or 50 or 80 years ago. The need is to equally cut the spending and increase the taxes to pay for the programs. All those who insist that it's only one or the other are the culprits who are unpatriotically preventing this impasse from being resolved -- i.e., the Blue partisans and Red partisans, insisting on NO SPENDING CUTS and on NO TAX INCREASES respectively. Since both are insisting emphatically, without compromise, on having their absolutist demands met, they are both equally to blame.

Repeating the worn-out talking-points, Blue or Red, about which Party was the nastier of the two 50 years ago is totally irrelevant. As long as the only point you can make is that the other Party is nastier, you're part of the problem rather than the solution.

 

[Lumpenproletariat]

Here is an excerpt from a chatroom. Zlad ran away, but can someone pick up the argument, and explain why it's appropriate for spenders to run up the bill however high they want before there's a decision on how much debt money is available.

Zlad: you realise they already voted on the budget that would go over the debt ceiling. They knew it was going over it when they voted on it. Arguing about the debt ceiling is just political theatre.

Zlad: Left the room

Lumpenproletariat: The money should be borrowed first, before voting what to spend it on, or how much of it to spend. Don't spend money before it is first acquired, through borrowing or taxing.

Lumpenproletariat: The decision to borrow it has not been made yet.

Lumpenproletariat: Don't give spenders a blank check to spend trillions of $$$$ without limit before the money is available to spend.


The proper order of events could be:

1. The decision is made to borrow a certain amount.

2. The spenders make decisions how much to spend up to the limit made in the decision to borrow.

3. The money is borrowed and spent according to the earlier spending decision (in 2. above).



But it's improper for the spending to be decided before the decision how much to borrow, as raise-the-debt-ceiling crusaders are insisting.

 

[Copernicus]

Lumpenproletariat, I think we can all respect Zlad's decision to run away. Perhaps he felt further conversation with someone willing to crash the US economy, not to mention the rest of the world, was futile. They look on in horror as we ponder whether to renege on our debt to our creditors, since many of them had been putting their full faith and trust in the reliability of the US dollar. After a default, they may not be so foolish as to invest in us in the future. Congress has never before refused to pay its debts, so this is going to be a new experience.