AS DEFICIT EXPLODES, GOP DEMANDS EMERGENCY TAX CUT FOR THE RICH

[ZiprHead]

Oh, you don't know the facts.

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

But military spending is the problem?

Might want to rethink what the facts say instead of listening to Democrats lie to you.

WTF???

It's Orange Imaginary Math, its not supposed to have any basis in reality.

Makes you wonder where he come up with such pure, unadulterated BS.

 

[Patooka]

It's Orange Imaginary Math, its not supposed to have any basis in reality.

Makes you wonder where he come up with such pure, unadulterated BS.

Not from reality. Estimates show the US spending anywhere between 15 to 20 percent. Not 3%, a figure that is complete bullshit. Shocking, I know.

 

[laughing dog]

It's Orange Imaginary Math, its not supposed to have any basis in reality.

Makes you wonder where he come up with such pure, unadulterated BS.

Not from reality. Estimates show the US spending anywhere between 15 to 20 percent. Not 3%, a figure that is complete bullshit. Shocking, I know.

I think HL’s numbers are as a share of GDP.

 

[steve_bank]

But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.

Try to focus. Households, businesses and governments can choose to incur debt. Ehen the debt comes due, all three can choose to either repay the debt or try to refinance it, The difference is that households and businesses sources for repayment are saving, or selling assets. Governments have these options plus the options of taxation and printing money (at the national level). So gov’t finance is not the same as household finance.

Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

 

[Horatio Parker]

But it is. The federal government as the business that it is BORROWS MONEY. You can look up how much we owe China. There has been occasions in modern times when the federal international credit rating dropped. That means the cost to borrow goes up. It is the same with the individual states.

Try to focus. Households, businesses and governments can choose to incur debt. Ehen the debt comes due, all three can choose to either repay the debt or try to refinance it, The difference is that households and businesses sources for repayment are saving, or selling assets. Governments have these options plus the options of taxation and printing money (at the national level). So gov’t finance is not the same as household finance.

Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

You're wrong, plain and simple. What business can issue currency to retire its own debt? None. Govts can and do. If it's in the national interest to keep bond rates low, the Treasury can direct the Fed to buy the debt issues. Show me a business that can do that.

Put simply, govts with a sovereign currency are not revenue constrained. Period.

 

[SimpleDon]

<<massive snip>>​

<<massive snip>>​

That is an interesting list. However, there are many questions about these businesses.

If an employee joins, do they immediately get the same ownership of the company as people who have been there since the beginning?

How did they get a business loan?

If someone quits, are they out of all their shares and become broke?

Who is liable for the risk and losses if the company tanks? All employees become broke as a joke?

I can help. I am a professional engineer and have been involved in two employee-owned engineering companies, one that I worked for and one that we set up for my wife who is also a professional engineer. I also was involved in turning a shop that we had owned into an employee-owned business, unsuccessfully as it turned out.

You may not know that our economy depends not just on a market model were goods and services are offered for sale under some degree of competition. It also depends on a professional model where licensed professionals have to answer to a higher standard than profit. The examples are many; doctors, lawyers, pharmacists, teachers, architects, the military, policemen, and my profession, engineering. All of the professions have a higher calling to society than making a profit.

My engineering profession has a duty to provide society with safe and functional products and industrial installations. I would include the government workers in the list of professionals, in spite of their not being licensed because they have a higher obligation to society than making a profit.

Question: If an employee joins, do they immediately get the same ownership of the company as people who have been there since the beginning?

Answer: Everyone has to buy the stock in the company, both legacy employees and the new hires. Most do it with some kind of installment plan. A regular deduction from their paycheck. The money from the stock sales is financial capital for the company.

To buy the stock in the company you have to be an employee. In the professional engineering firms that I was associated with engineers with their PE certificates had five years to buy their own stock in the company if they were available. This was a requirement from our errors and omissions underwriters. If they hadn't bought a sufficient amount of stock after five years.

Question: If someone quits, are they out of all their shares and become broke?

Answer: Employees who leave the company have to sell their stock either to any one of the employees who want it or back to the corporation, usually at a discount.

Question: How did they get a business loan?

Answer: They call the bank and apply. If they have a good business use for the loan, the bank will approve it. Like any other businesses employee-owned corporations own assets and make profits.

 

[steve_bank]

Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

You're wrong, plain and simple. What business can issue currency to retire its own debt? None. Govts can and do. If it's in the national interest to keep bond rates low, the Treasury can direct the Fed to buy the debt issues. Show me a business that can do that.

Put simply, govts with a sovereign currency are not revenue constrained. Period.

Maybe the analogy is not perfect, but owed debt is owed debt. In business it has to be covered by sales, in government it has to be covered by taxes and other govt revenues. Functionally no difference.

Borrowing to an unattainable level is what it is regardless.

Continuing deficit spending is a a like a business trying to expand beyond its revenue capacity to support debt. Eventually the business fails.

Are you arguing increasing debt and deficit spending without bounds is not a problem?

 

[Loren Pechtel]

Only by using inflation which harms the economy.

Inflation has nothing to do with it.

The deficit is a residual indicating govt spending not taxed. That we issue debt and pay interest on it is a policy choice.

If you don't issue debt to fund it you're driving up the money supply. The usual result is a currency that becomes basically worthless and huge damage to the economy.

 

[Horatio Parker]

Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

You're wrong, plain and simple. What business can issue currency to retire its own debt? None. Govts can and do. If it's in the national interest to keep bond rates low, the Treasury can direct the Fed to buy the debt issues. Show me a business that can do that.

Put simply, govts with a sovereign currency are not revenue constrained. Period.

Maybe the analogy is not perfect, but owed debt is owed debt. In business it has to be covered by sales, in government it has to be covered by taxes and other govt revenues. Functionally no difference.

Borrowing to an unattainable level is what it is regardless.

Continuing deficit spending is a a like a business trying to expand beyond its revenue capacity to support debt. Eventually the business fails.

Are you arguing increasing debt and deficit spending without bounds is not a problem?

Operationally, there's no problem. You don't appear to understand that. You still think national govts are businesses.

If spending outpaces production, that's bad. If OTOH there are enough goods and services to absorb the spending, then it's ok.

Greece is a currency user, not an issuer. Borrowing in foreign currency is how countries get into trouble. A sovereign currency issuer can always pay debts denominated in its own currency.

State and local govts are revenue constrained.

 

[Loren Pechtel]

The deficit is a red herring.

Agreed.

It isn't entirely true that the deficit is a red herring, though it may sometimes be overplayed.

The budget for 2019 was $4.45 trillion. Interest and repayment on the debt was about 9% of that budget or better than $400 billion. That means we spent $400 billion servicing the debt that could have gone to either increased services or reducing the budget and so tax burden. For example, that $400 billion is about four times as much as went to education.

And note that that is with very low interest rates. Look at what happens if the interest rates go up.

 

[Loren Pechtel]

The deficit is a red herring.

But we should be using our capacity to deficit spend, i.e. within the limits of acceptable inflation, for something other than making the obscenely rich more obscenely rich and trying to satisfy the insatiable Military-Industrial Complex.

Oh, you don't know the facts.

Really?

3% of our budget is military. 10-15% of our budget is government handouts to the poor.

For 2019 National Defense is 15.3% of the federal budget. I'm having a hard time finding 10% that could be considered handouts to the poor and much of that is medical, not cash.

Might want to rethink what the facts say instead of listening to Democrats lie to you.

Might want to rethink what the facts say instead of listening to Republicans lie to you.

 

[Loren Pechtel]

A lot of it is a mental problem. Homeless people want to be homeless because they have some mental block that prevents them from working. Think about it, those bums you see on off ramps begging cars for money, wouldn't their time be better spent walking around town and begging some places to hire them? Of course it would. But, they'd rather get handouts from people. It's easier than working to them.

I still see tons of people hanging outside 711 begging people for change instead of going inside and begging the manager to work the night shift or something. People hate the night shift. If you can find someone willing to do it, they'd be ecstatic!

And you assume those are the actual homeless? Many of them are not.

And the ones with the mental issues (which are the majority of the homeless) aren't about not working, but an inability to work within society's rules. Nobody will employ them even if they ask for a job. Most of the rest are druggies that can't make enough in a day to feed their habit so they have to resort to illegal means.

 

[Loren Pechtel]

Unfortunately, some politicians think this way too. It has been tried several times in several different countries and has had disastrous consequences for the citizenry. The latest example is Venezuela... their currency, the Bolivar, is now worthless.

The currencies of Germany, France, Italy, Japan, and the USA are doing fine.

The countries you talk about fund government spending with debt, not with the printing press.

 

[Loren Pechtel]

Unfortunately, some politicians think this way too. It has been tried several times in several different countries and has had disastrous consequences for the citizenry. The latest example is Venezuela... their currency, the Bolivar, is now worthless.

The currencies of Germany, France, Italy, Japan, and the USA are doing fine.

That is because they don't print as much money as they want to cover any debt they want to accrue. Their increase in currency in circulation is tied to their GDP growth. Germany after WWI, Zimbabwe, etc. printed money to cover debt and the citizenry suffered because of it as the currency became worthless. Venezuela didn't learn from their example and, apparently, you didn't either.

Not to mention post WWI Germany.

There are also examples of countries that went down that road but backed off in time--Israel and Brazil come to mind.

 

[Loren Pechtel]

Not from reality. Estimates show the US spending anywhere between 15 to 20 percent. Not 3%, a figure that is complete bullshit. Shocking, I know.

I think HL’s numbers are as a share of GDP.

3% of GDP for defense seems close enough I wouldn't question it. However, he gave two numbers, I'm having a hard time finding 10% even in the federal budget, let alone GDP.

 

[skepticalbip]

Not from reality. Estimates show the US spending anywhere between 15 to 20 percent. Not 3%, a figure that is complete bullshit. Shocking, I know.

I think HL’s numbers are as a share of GDP.

3% of GDP for defense seems close enough I wouldn't question it. However, he gave two numbers, I'm having a hard time finding 10% even in the federal budget, let alone GDP.

He is probably combining all the programs under social security and all the programs under healthcare as a percentage of GDP.

 

[funinspace]

3% of GDP for defense seems close enough I wouldn't question it. However, he gave two numbers, I'm having a hard time finding 10% even in the federal budget, let alone GDP.

He is probably combining all the programs under social security and all the programs under healthcare as a percentage of GDP.

That is a lot of assumptions regarding Orange Imaginary Math and Orange English, but certainly possible...pissing in the wind sounds like a less stupid idea. The US GDP is about $19 trillion. 10-15% would be $1.9 to $2.7 trillion, and SS is still under a trillion dollars. And WTF regarding Social Security being "hand outs to the poor"? So a half whit would still need to explain a lot of categories...

 

[funinspace]

Unfortunately, some politicians think this way too. It has been tried several times in several different countries and has had disastrous consequences for the citizenry. The latest example is Venezuela... their currency, the Bolivar, is now worthless.

The currencies of Germany, France, Italy, Japan, and the USA are doing fine.

The countries you talk about fund government spending with debt, not with the printing press.

News flash:
https://www.ft.com/content/ae19e60e-81b0-11e7-94e2-c5b903247afd

In total, the six central banks that have embarked on quantitative easing over the past decade — the US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England, along with the Swiss and Swedish central banks — now hold more than $15tn of assets, according to analysis by the FT of IMF and central bank figures, more than four times the pre-crisis level.

Of this, more than $9tn is government bonds — one dollar in every five of the $46tn total outstanding debt owed by their governments.

OTOH: National currencies don't change or crash on a dime. It took a long time fore the British pound to give way to the dollar. I find the idea that 'the ripple affects of the central banks responses to the 2008/9 crisis is over' to be a bit rosy and short sighted.

 

[Patooka]

Not from reality. Estimates show the US spending anywhere between 15 to 20 percent. Not 3%, a figure that is complete bullshit. Shocking, I know.

I think HL’s numbers are as a share of GDP.

Which would mean the US government spends 3 to 5 times as much on the poor than it does on its military according to Half-life's "facts". Which is also a bullshit claim.

 

[SimpleDon]

Six of one half a dozen of the other. Incurred debt is debt regardless, which is owed and on which interest accrues.

Debt, deficit, and inflation are structural parts of the system which is based on growth. In a healthy economy there is a balance between debt, wage growth, inflation, and GDP growth.

Trumps bossiness history has all been maximize short term profit ignoring debt and revenue, managing to escape with cash while it falls apart. That is how he views stoking the economy hot with large tax cuts ignoring debt which have the effect of high short term gains for the wealthy.

You buy a T bill assuming the economy and government revenue will grow in the future such that you will get your money back plus interest. Trump is messing with that with his tax cuts.

If we default to China then it goes to international courts like any bankruptcy.

I'd have to look it up, I believe in the 90s a state was close to or went bankrupt.

When a business needs to fund a project and is short of cash it borrows or issues stock.

The federal government is a business. It has employees, revenue, and delivers goods and services. To finance project like roads or a war it must raise cash. T bills as a form of stock, or loans.

Local, state, and federal governments issue bonds to raise cash. American bonds and T bills have always been consider low return but safe investments. Take that away that faith by projections of becoming unable to sustain debt and problems occur.

It is all based on future revenue business or government.

You're wrong, plain and simple. What business can issue currency to retire its own debt? None. Govts can and do. If it's in the national interest to keep bond rates low, the Treasury can direct the Fed to buy the debt issues. Show me a business that can do that.

Put simply, govts with a sovereign currency are not revenue constrained. Period.

Coupled with the simple fact that the sovereign government can't pay off their debt. The national debt is unique in that it is equal to the entire savings of the nation. An attempt to pay it down can only result in a financial disaster. As it has every time it has been tried.

We should call it the national savings, not the national debt. What do we have to do to pay off the national debt? The federal government has to run a surplus, they have to take in more in tax revenue than they spend back into the economy to buy all of the shiny new military arms, and recently to finance the tax cuts for the rich.

Fun fact: It is impossible for tax cuts for the rich to generate any new funds for business investment. This is because the decrease in revenue from the tax cut has to be financed by selling a T-Bill, dollar for dollar. And where does the money come from to buy the T-Bill? It comes from the funds available for business investment! Dollar for dollar. Why do the rich like it so much? It is because someone ends up with a spanking new T-Bill add to their net worth. Money created by the Treasury. The exact same as if they ran the printing press to create currency, which would be cried about in any other context. The only difference is that it will always exist as part of the national debt. Just as the original Liberty bonds sold during the world wars to control inflation from the high wages with nothing to spend it on of the wartime workers.

And don't get me started on the insanity of increasing our national debt in order to ship a large part of our jobs to communist China.