National Debt And Stuff

[Cheerful Charlie]

If a frog had wings, he'd not bump his ass when he hops. What should be ran off the rails 40 years ago with Reagan and supply side economics. Tax cuts do not pay for themselves. ALEC with Arthur Laffer as chief ALEC economist is still peddeling that snake oil.

 

[Cheerful Charlie]

This should start some nice fireworks.

....
As congressional Republicans threaten to cut Social Security and other key federal programs, progressive Sens. Bernie Sanders and Elizabeth Warren led a group of lawmakers Monday in unveiling legislation that would increase Social Security benefits by at least $200 per month and prolong the program's solvency for decades by finally requiring wealthy Americans to pay their fair share.

The Social Security Expansion Act, introduced by Sanders (I-Vt.) and Warren (D-Mass.) in the Senate and by Reps. Jan Schakowsky (D-Ill.) and Val Hoyle (D-Ore.) in the House, would put an additional $2,400 in beneficiaries' pockets each year and ensure the program is fully funded through 2096.
...

Sanders-Warren plan would tax the rich to increase Social Security by $2,400 a year

As congressional Republicans threaten to cut Social Security and other key federal programs, progressive Sens. Bernie Sanders and Elizabeth Warren led a group of lawmakers Monday in unveiling legislation that would increase Social Security benefits by at least $200 per month and prolong the...

www.rawstory.com

 

[Lumpenproletariat]

Here's the reason to eliminate the debt ceiling:

The debt ceiling should NOT be raised.

It should be eliminated completely, as it serves exactly no useful function or purpose.

It will serve a purpose if and when finally Congress votes to keep it low and not raise it. That will then put in motion some new steps to put limits on spending and to increase taxes as an alternative to always raising the debt without limit.

But if you're against higher taxes on the rich, then it's understandable that you'd be in favor of eliminating the debt ceiling (or in favor of raising the ceiling higher and higher) so the rich can continue to get their lower taxes.

With no debt ceiling and thus no limit on the debt going higher and higher, there's no need for higher taxes, because the gov't can pay for all its favorite corporate welfare and pork and waste by just raising the debt still more, without tax revenue to pay for it.

Good logic. No doubt you're a member of the Grover Nordquist fan club. Who needs taxes when all we have to do is just raise the debt higher and higher?

 

[bilby]

you're against higher taxes on the rich, then it's understandable that you'd be in favor of eliminating the debt ceiling (or in favor of raising the ceiling higher and higher) so the rich can continue to get their lower taxes.

With no debt ceiling and thus no limit on the debt going higher and higher, there's no need for higher taxes, because the gov't can pay for all its favorite corporate welfare and pork and waste by just raising the debt still more, without tax revenue to pay for it.

Good logic. No doubt you're a member of the Grover Nordquist fan club. Who needs taxes when all we have to do is just raise the debt higher and higher?

Yeah, clearly I am against higher taxes on the rich. Why else would I have written:

The problem with large tax cuts for the rich isn't the deficit or debt that they cause, it's the redistribution of wealth. Tax cuts are inherently inflationary, and so they make everyone who didn't get a cut poorer, while those who did become richer.

They are bad because a healthy economy is one in which the maximum number of people have a strong influence, and such tax cuts serve to increase the influence of a smaller number of already influential individuals, while reducing the influence of a larger number of already marginalised individuals.

Of course, if you're a wealthy person, you're not likely to see this as a major problem.

Insofar as money is speech, tax cuts to the rich get them a bigger megaphone, while turning down the voices of the poor to inaudible levels.

Taxes should be highly progressive, to reflect the benefits society grants to the rich, by placing the burden of providing that society on the shoulders of those who gained most from its existence.

Progressive taxation is democracy. Tax cuts, particularly those that target the rich, are aristocracy. We already decided that it's best to give votes to everyone, rather than just have a king or emperor who imposes his decisions on the rest of the population. Now we need to decide that what applies to votes applies also to dollars - everyone needs them, or their opinions will be utterly disregarded.

If you can reach a diametrically incorrect conclusion about what others believe, when it's literally spelled out right in front of you, it's not surprising that you manage to be completely wrong about bloody near everything.

You apparently wouldn't know logic if it bit you on the arse.

 

[Cheerful Charlie]

Google for "starve the beast".

"All I want to do is downsize the government so I can drag it off to a bathtub and drown it.
- Grover Norquist

Runing up the deficits with big tax cuts for the wealthy to force cuts on programs like Social Security and Medicare is not an accident. It has been a long term game by the radical "small government" Republicans. The problem is, many Americans do not want this. And the GOP is now having a hard time selling this ratfuckery.

All 4 of Trump's budgets demanded massive cuts to SS and Medicare. 4 years ago, Mitch McConnell supported this. Now the GOP is getting gunshy. For now. But cannot be trusted in the future. If they can retake the Senate in 2024 and hold the House. All bets are off.

The budget numbers do not work. The U.S. cannot balance the budget with cuts alone. And won't drop the Norquist pledge to never raise taxes for any reason. And want to make expiring massive Trump tax cuts permament. Adding $300 + billions to yearly deficits according to the CBO. What these clowns demand we cut to offset these new deficits is not mentioned.

Our only hope is the the Democrats place these facts, the numbers, before the nation again and again, and again. Until everyone. Including stupid people like Tucker Carlson understand the Republican way is dead and impossible.

And the GOP has no plans to pay down any of the $31 trillion national debt.

 

[Lumpenproletariat]

you're against higher taxes on the rich, then it's understandable that you'd be in favor of eliminating the debt ceiling (or in favor of raising the ceiling higher and higher) so the rich can continue to get their lower taxes.

With no debt ceiling and thus no limit on the debt going higher and higher, there's no need for higher taxes, because the gov't can pay for all its favorite corporate welfare and pork and waste by just raising the debt still more, without tax revenue to pay for it.

Good logic. No doubt you're a member of the Grover Nordquist fan club. Who needs taxes when all we have to do is just raise the debt higher and higher?

Yeah, clearly I am against higher taxes on the rich. Why else would I have written:

The problem with large tax cuts for the rich isn't the deficit or debt that they cause, it's the redistribution of wealth. Tax cuts are inherently inflationary, and so they make everyone who didn't get a cut poorer, while those who did become richer.

They are bad because a healthy economy is one in which the maximum number of people have a strong influence, and such tax cuts serve to increase the influence of a smaller number of already influential individuals, while reducing the influence of a larger number of already marginalised individuals.

Of course, if you're a wealthy person, you're not likely to see this as a major problem.

Insofar as money is speech, tax cuts to the rich get them a bigger megaphone, while turning down the voices of the poor to inaudible levels.

Taxes should be highly progressive, to reflect the benefits society grants to the rich, by placing the burden of providing that society on the shoulders of those who gained most from its existence.

Progressive taxation is democracy. Tax cuts, particularly those that target the rich, are aristocracy. We already decided that it's best to give votes to everyone, rather than just have a king or emperor who imposes his decisions on the rest of the population. Now we need to decide that what applies to votes applies also to dollars - everyone needs them, or their opinions will be utterly disregarded.

If you can reach a diametrically incorrect conclusion about what others believe, when it's literally spelled out right in front of you, it's not surprising that you manage to be completely wrong about bloody near everything.

You apparently wouldn't know logic if it bit you on the arse.

The fact still remains that raising the debt ceiling higher (or eliminating the debt ceiling) results in lower taxes on the rich, because there's less need for that tax revenue.

So your crusade against the debt ceiling is favorable to the rich who want lower taxes.

I did make one mistake though -- I misspelled Norquist's name.

 

[Lumpenproletariat]

The budget numbers do not work. The U.S. cannot balance the budget with cuts alone.

What is needed is a combination of spending cuts and tax increases. Everyone who opposes either of these is part of the problem, not the solution.

And won't drop the Norquist pledge to never raise taxes for any reason. And want to make expiring massive Trump tax cuts permanent. Adding $300 + billions to yearly deficits according to the CBO. What these clowns demand we cut to offset these new deficits is not mentioned.

Every spending program which was passed in order to "create jobs" should be cut by 50% or so (or cut completely). There is no need to "create jobs" -- this is code language for pork and corporate welfare.

Or cuts could be done across-the-board. Put all spending on the block, nothing exempted, and do a meat-ax Whack!!!! to it.

Maybe as much as 5% cut across everything.

Or, if something of substance could be done to stop the increases, impose some reasonable slowdown for next year, and get a reasonable reduced deficit for this year (including some tax increase), perhaps then the debt ceiling could be raised and the meat-ax cuts could be only 1% or 2%.

And the GOP has no plans to pay down any of the $31 trillion national debt.

What's realistic is to reduce the annual deficit down to under 1.0 trillion for now, and still further in the future.

The debt problem can be fixed without reducing the total national debt figure. The need is to have something to prevent it from increasing, or from increasing so fast. Just slowing down the increase might be sufficient, if the debt/GDP ratio can be brought back down to 90% or 80%. There at least needs to be a consensus to set the debt/GDP at a maximum, like 80%, not to be exceeded (except in extreme emergency).

 

[bilby]

The fact still remains that raising the debt ceiling higher (or eliminating the debt ceiling) results in lower taxes on the rich, because there's less need for that tax revenue.

That's not true. The debt ceiling has nothing to do with it; Voting to reduce taxes on the rich is what results in lower taxes on the rich.

The "need" for tax revenue is largely mythical; taxes aren't needed to have something to spend, spending is needed to have something to tax.

Taxes support the value of money. They don't support the spending of money by government.

 

[bilby]

your crusade against the debt ceiling

Recognition that something is fucking stupid isn't a "crusade". I am not an American, so whether your nation continues to be stupid about economics, or wakes up to itself and stops playing dumb political games with things that genuinely affect people's lives, is of only passing interest to me.

I dislike idiocy in all its forms, and your absurd beliefs about the nature of money certainly appear to fall into that category. The most charitable thing I can say about them is that your basic premises are a century out of date.

National debt is a complete irrelevance to the economy. An economy which has a very large debt to GDP ratio could be in terrible shape, or in great shape. It's not relevant how much debt there is, only what it was spent on, and whether taxation was sufficient to offset the portion of spending that didn't lead to sustainable and real growth.

Anyone who worries about national debt without reference to the reasons for its existence is a fool. Anyone who thinks the debt to GDP ratio measures something fundamentally important is likewise.

 

[bilby]

The U.S. cannot balance the budget with cuts alone.

The US cannot balance the budget by any means, without causing a massive recession.

Deficit spending is an essential component of economic growth, unless your economy is a net exporter, which the USA is very much not.

Any serious attempt to balance the budget in the US would cause significant and completely unnecessary hardship for millions.

There's an important conversation to be had about the need for both spending and taxation to increase, to improve the quality of life for all Americans; But you can't have it, because the imbeciles who want to treat the budget of a currency issuing nation state as though it were the budget of an ordinary household, won't stop insanely demanding that the budget should balance.

It shouldn't, it can't, and attempting it would be an entirely pointless evil.

 

[laughing dog]

Not if it's cutting government programs, gov't spending, entitlements -- Which is what this is about. It's not "crime" when a program is cut.

Not paying legal wages us a crime. Cuts that do not follow the legislated process are illegal. The POTUS has limited authority to unilaterally cut expenditures.

You're probably distorting the facts about this, because if that's all there is to it, then the "debt ceiling" is irrelevant to anything and no one would be making a fuss over it……

The only distortions here is your straw men. The Treasury routinely retires debt that is due and replaces it with new debt. That leaves the level of debt unchanged but may provide a bump in cash flow depending on circumstances.

 

[Elixir]

The Treasury routinely retires debt that is due and replaces it with new debt. That leaves the level of debt unchanged but may provide a bump in cash flow depending on circumstances.

This ensures that America remains a solid investment. Which is why the debt ceiling is a stupid political gimmick, not any kind of control mechanism.

 

[Loren Pechtel]

The interest buys us nothing.

It also costs you nothing.

So...

The interest payments most certainly cost something.

Pretending it has no cost leads to hyperinflation.

 

[Elixir]

The interest buys us nothing.

It also costs you nothing.

So...

The interest payments most certainly cost something.

Pretending it has no cost leads to hyperinflation.

That’s a self-correcting “problem”. Hyperinflation would gut the value of foreign debt.

 

[bilby]

The interest buys us nothing.

It also costs you nothing.

So...

The interest payments most certainly cost something.

Pretending it has no cost leads to hyperinflation.

Nah, failing to recover the fraction of it that only adds ephemerally to GDP as tax, leads to inflationary pressure, but that's not a cost, it's a response to spending, and it applies to all spending, it's not in any way specific to interest payments.

And hyperinflation is something completely different. It requires the collapse of productivity, or the forced export of the products of an economy without payment.

Hyperinflation requires the rapid printing of vast amounts of money, but that's an effect, not a cause, of hyperinflation.

The cost of US dollars to the US government is zero. The rate at which they produce those dollars is unlimited. The ideal NET rate of [production minus destruction] (taxation being the destruction of money) is defined by policy, and is a combination of the growth in demand for money (which is largely outside policy control), and the target rate of inflation (which is purely a matter of policy).

However, other inflation controls, such as interest rates, have far greater influence on money supply than interest paid to bond holders, so interest payments on the national debt are of fairly trivial importance even for historically high levels of national debt:GDP ratio.

 

[Loren Pechtel]

The interest buys us nothing.

It also costs you nothing.

So...

The interest payments most certainly cost something.

Pretending it has no cost leads to hyperinflation.

Nah, failing to recover the fraction of it that only adds ephemerally to GDP as tax, leads to inflationary pressure, but that's not a cost, it's a response to spending, and it applies to all spending, it's not in any way specific to interest payments.

And hyperinflation is something completely different. It requires the collapse of productivity, or the forced export of the products of an economy without payment.

Hyperinflation requires the rapid printing of vast amounts of money, but that's an effect, not a cause, of hyperinflation.

The cost of US dollars to the US government is zero. The rate at which they produce those dollars is unlimited. The ideal NET rate of [production minus destruction] (taxation being the destruction of money) is defined by policy, and is a combination of the growth in demand for money (which is largely outside policy control), and the target rate of inflation (which is purely a matter of policy).

However, other inflation controls, such as interest rates, have far greater influence on money supply than interest paid to bond holders, so interest payments on the national debt are of fairly trivial importance even for historically high levels of national debt:GDP ratio.

It's the cost of the interest that keeps governments from simply spending and causing hyperinflation.

And it's not just the spending. Spending adds to the money supply, taxes subtract from the money supply. The more out of balance they are the more it will cause inflation.

 

[bilby]

The interest buys us nothing.

It also costs you nothing.

So...

The interest payments most certainly cost something.

Pretending it has no cost leads to hyperinflation.

Nah, failing to recover the fraction of it that only adds ephemerally to GDP as tax, leads to inflationary pressure, but that's not a cost, it's a response to spending, and it applies to all spending, it's not in any way specific to interest payments.

And hyperinflation is something completely different. It requires the collapse of productivity, or the forced export of the products of an economy without payment.

Hyperinflation requires the rapid printing of vast amounts of money, but that's an effect, not a cause, of hyperinflation.

The cost of US dollars to the US government is zero. The rate at which they produce those dollars is unlimited. The ideal NET rate of [production minus destruction] (taxation being the destruction of money) is defined by policy, and is a combination of the growth in demand for money (which is largely outside policy control), and the target rate of inflation (which is purely a matter of policy).

However, other inflation controls, such as interest rates, have far greater influence on money supply than interest paid to bond holders, so interest payments on the national debt are of fairly trivial importance even for historically high levels of national debt:GDP ratio.

It's the cost of the interest that keeps governments from simply spending and causing hyperinflation.

And it's not just the spending. Spending adds to the money supply, taxes subtract from the money supply. The more out of balance they are the more it will cause inflation.

No shit, Sherlock.

Not one word of that stands in contradiction of anything I said.

Apart, perhaps, from your persistence in declaring that hyperinflation can be the result of high deficits - it probably could, if a government were absolutely determined to cause a collapse in the value of its currency, but absent such determined and deliberate sabotage, the economy requires massive structural problems, such as a collapse of productivity, or the uncompensated export of a large fraction of productivity, in order to achieve such a disaster.

No hyperinflation in history has been preceded by massive increases in money supply; Such increases are the response to, not the cause of, hyperinflation.

Obviously, that's not the popular consensus, but it's better than just popular - it's true.

 

[Loren Pechtel]

It's the cost of the interest that keeps governments from simply spending and causing hyperinflation.

And it's not just the spending. Spending adds to the money supply, taxes subtract from the money supply. The more out of balance they are the more it will cause inflation.

No shit, Sherlock.

Not one word of that stands in contradiction of anything I said.

Apart, perhaps, from your persistence in declaring that hyperinflation can be the result of high deficits - it probably could, if a government were absolutely determined to cause a collapse in the value of its currency, but absent such determined and deliberate sabotage, the economy requires massive structural problems, such as a collapse of productivity, or the uncompensated export of a large fraction of productivity, in order to achieve such a disaster.

No hyperinflation in history has been preceded by massive increases in money supply; Such increases are the response to, not the cause of, hyperinflation.

Obviously, that's not the popular consensus, but it's better than just popular - it's true.

In a world where you aren't repaying the borrowing there is no adequate countering pressure to spend more! Thus hyperinflation.

 

[laughing dog]

In a world where you aren't repaying the borrowing there is no adequate countering pressure to spend more! Thus hyperinflation.

There are plenty of unstated assumptions in your analysis. For example if debt (no net rep payment of debt)stays constant while GDP grows, there is no reason to expect an increase in inflation, let alone hyperinflation. If the rate of increase in real production exceeds the rate of growth in debt, there is no hyperinflation.

 

[bilby]

Taxation is the thing (perhaps the only thing) that gives fiat money value. Taxation without adequate spending - and "adequate" must inherently mean greater than the amount of taxation in a growing economy - is deflationary, and deflation is economically disastrous.

So both taxes and spending are needed; And spending must exceed taxes: That is, deficits are an essential characteristic of a growing fiat money economy.

That "fiscal conservatives" want to eliminate deficits and slash taxes is simply an indication that these are clueless morons who should under no circumstances be permitted to run anything as financially complex as a lemonade stand, much less to influence policy in a modern fiat currency issuing nation state.