Can YOU Solve the Deficit?

[cpwill]

I can!

Budget Puzzle: You Fix the Budget - Interactive Feature - NYTimes.com

I eliminated farm subsidies, cut foriegn aid, cut federal pay, cut the federal workforce, cut contractors, cut earmarks, cut discretionary funding, cut aid to the states, reduced the military to pre-Iraq size (we don't need a bigger land force, we need a deadlier better utilized land force), canceled the F-35 and Osprey, reduced noncombat compensation and overhead, enacted malpractice reform, raised medicare and social security ages to 70, capped medicare growth, reduced the employer health insurance tax benefit, reduced SS for the rich, and tightened SS growth and eligability. I didn't raise any of the taxes, but I did go with the Bowles-Simpson plan which (since it reduces loopholes) increases revenues despite the fact that it lowers rates and i did reduce the mortgage interest credit. and hooray! i have a surplus by 2015!

 

[MaggieD]

I can!

Budget Puzzle: You Fix the Budget - Interactive Feature - NYTimes.com

I eliminated farm subsidies, cut foriegn aid, cut federal pay, cut the federal workforce, cut contractors, cut earmarks, cut discretionary funding, cut aid to the states, reduced the military to pre-Iraq size (we don't need a bigger land force, we need a deadlier better utilized land force), canceled the F-35 and Osprey, reduced noncombat compensation and overhead, enacted malpractice reform, raised medicare and social security ages to 70, capped medicare growth, reduced the employer health insurance tax benefit, reduced SS for the rich, and tightened SS growth and eligability. I didn't raise any of the taxes, but I did go with the Bowles-Simpson plan which (since it reduces loopholes) increases revenues despite the fact that it lowers rates and i did reduce the mortgage interest credit. and hooray! i have a surplus by 2015!

CP!!! I love this link!!!

In the past, I've thought that the budget is sooooo overwhelmingly complex that no one can wrap their arms around it. This interactive exercise shows that's not true. I would love to see this go further.

An interactive computer model that showed line-by-line expenditures. A committee to identify those programs possibly eligible for cuts. Another committee to interact with those programs to determine "unintended consequences" of cutting their programs.

There is hope.

If anybody has the guts.

 

[Taboon]

I can!

Budget Puzzle: You Fix the Budget - Interactive Feature - NYTimes.com

I eliminated farm subsidies, cut foriegn aid, cut federal pay, cut the federal workforce, cut contractors, cut earmarks, cut discretionary funding, cut aid to the states, reduced the military to pre-Iraq size (we don't need a bigger land force, we need a deadlier better utilized land force), canceled the F-35 and Osprey, reduced noncombat compensation and overhead, enacted malpractice reform, raised medicare and social security ages to 70, capped medicare growth, reduced the employer health insurance tax benefit, reduced SS for the rich, and tightened SS growth and eligability. I didn't raise any of the taxes, but I did go with the Bowles-Simpson plan which (since it reduces loopholes) increases revenues despite the fact that it lowers rates and i did reduce the mortgage interest credit. and hooray! i have a surplus by 2015!

Good show! Just more evidence that it will take more than just cutting "entitlement" programs to get this budget mess fixed. More people need to look at this because we can't just raise taxes and we can't just cut entitelment programs to get the deficit curbed.

 

[DarkWizard12]

CP!!! I love this link!!!

someone say CP?

trollface.jay pey gee

 

[MaggieD]

someone say CP?

trollface.jay pey gee

 

[cpwill]

While nearly every Republican candidate running this cycle highlighted the need to cut spending and reduce the deficit, very few offered much in the way of specifics. Fortunately, Erskine Bowles and Alan Simpson, co-chairs of the National Commission on Fiscal Responsibility and Reform, aren’t running for office, and they have proposed a bold, extensive, and relatively specific “illustrative list” of more than $200 billion in spending cuts and adjustments to help rein in the deficit. For newly elected members of Congress wishing to make good on campaign promises to “restore fiscal sanity” to Washington, it is an appropriate starting point... The plan’s total recommendation of more than $200 billion worth of federal spending cuts may not seem like much when stacked up against a national deficit of $1.3 trillion (and growing). But it’s not insignificant by any means, and, as the report suggests, the list is merely “illustrative.” The Simpson-Bowles plan is at least an excellent icebreaker to a conversation on spending that is desperately needed, one that goes far beyond the vague and guarded rhetoric of the campaign trail.

 

[Slartibartfast]

I couldn't get there. Some of the tax raises on the rich were too draconian for me to support. I think I found some decent service cuts though.

Plus I can't agree with a cut to the mortgage tax exemption because I believe that home ownership should be encouraged.

 

[cpwill]

even at the expense of the rest of the economy? remember, whenever you distort market signals (through tax exemptions or otherwise) you are potentially creating a bubble like what we just saw, and it certainly creates misallocation of resources. the mortgage deduction is fun (hey, i like getting money back in April too), but it also serves as a subsidy to the housing industry.

 

[Slartibartfast]

even at the expense of the rest of the economy? remember, whenever you distort market signals (through tax exemptions or otherwise) you are potentially creating a bubble like what we just saw, and it certainly creates misallocation of resources. the mortgage deduction is fun (hey, i like getting money back in April too), but it also serves as a subsidy to the housing industry.

We have had market bubbles before we had tax breaks. (the 1800s was full of bank runs and there were things like the tulip bubble). While it is possible to distort markets through policy, they distort themselves already, so I see it as 6 of 1 or half-dozen of another. Ultimately, many things cause bubbles and tax policy is only one of those things. Sometimes its just a bunch of people being stupid, as witnessed in the dot-com bubble for example.

 

[cpwill]

that bubbles can be caused by non-governmental factors doesn't mean that government intervention in the economy can't cause bubbles. the mortgage interest tax break serves nothing more than a subsidy to the housing industry; it's already built into the prices of land and homes, i'm not sure it really helps home-owners all that much at all.

 

[Slartibartfast]

that bubbles can be caused by non-governmental factors doesn't mean that government intervention in the economy can't cause bubbles. the mortgage interest tax break serves nothing more than a subsidy to the housing industry; it's already built into the prices of land and homes, i'm not sure it really helps home-owners all that much at all.

You missed my point I think. While I agree that tax incentives can be harmful, they also can be not harmful and quite helpful.

Also, there is nothing wrong with subsidizing home owners, that behavior helps to produce responsible citizens who have a stake in their community and therefore it should be encouraged.

Also, I would disagree about it being built into the price of homes and land. The average home owner isn't savvy enough to calculate that back out of their mortgage payment. But they still will be attracted to the idea of getting some of the money back after they file.

 

[cpwill]

The average home owner isn't savvy enough to calculate that back out of their mortgage payment.

perhaps not, but the average developer is.

 

[Slartibartfast]

perhaps not, but the average developer is.

Possibly, however, if the consumer isn't than they aren't going to adjust what they are willing to pay.

 

[cpwill]

the price of housing is already adjusted, it is from the first-purchaser onwards.

 

[Slartibartfast]

the price of housing is already adjusted, it is from the first-purchaser onwards.

How is that possible if consumers are not willing to adjust what they are willing to spend?

 

[mpg]

Good show! Just more evidence that it will take more than just cutting "entitlement" programs to get this budget mess fixed. More people need to look at this because we can't just raise taxes and we can't just cut entitelment programs to get the deficit curbed.

I haven't seen or heard of anyone saying that we can balance the budget by only cutting entitlements, but tax increases alone can't come close to balancing the budget, so spending needs to be cut, and entitlements account for the majority of spending, so it's unrealistic to try to balance the budget without touching entitlements.

 

[Psychoclown]

Very cool link. I slashed foreign aid, earmarks, farm subsidies, cut federal salaries by 5%, reduced the federal workforce and contractors, and made other cuts to the federal government. Then I moved on to the military, reducing the number of troops, cutting back on warships and airwings, canceled or delayed weapons programs, and reduced our presnce in Iraq/Afghanistan. In fact, military spending was one of the biggest areas I found savings in, saving 149 billion dollars by 2015. Moving over to entitlements, I raised the age to 70 on SS and Medicare, capped Medicare, tightened SS eligibility, reduced SS benefits for the rich, removed the cap on the payroll tax, and enacted malpractice reform. For a nifty 123 billion dollars in savings by 2015, but by 2030 it balloons to over 1 trillion in savings! And to wrap things up, I went with the Bowles-Simpson tax reform plan.

Its a nice tool because it demonstrates what I've been saying to some folks for a while. The only way we can even hope to balance the budget is to cut entitlement and military spending. It's impossible to balance the budget if 2/3 of the budget is off limits.

 

[Mustachio]

I can!

Budget Puzzle: You Fix the Budget - Interactive Feature - NYTimes.com

I eliminated farm subsidies, cut foriegn aid, cut federal pay, cut the federal workforce, cut contractors, cut earmarks, cut discretionary funding, cut aid to the states, reduced the military to pre-Iraq size (we don't need a bigger land force, we need a deadlier better utilized land force), canceled the F-35 and Osprey, reduced noncombat compensation and overhead, enacted malpractice reform, raised medicare and social security ages to 70, capped medicare growth, reduced the employer health insurance tax benefit, reduced SS for the rich, and tightened SS growth and eligability. I didn't raise any of the taxes, but I did go with the Bowles-Simpson plan which (since it reduces loopholes) increases revenues despite the fact that it lowers rates and i did reduce the mortgage interest credit. and hooray! i have a surplus by 2015!

Too bad you wouldn't make it to 2015 without a revolt. The Republicans would call you a traitor for slashing the military, Sean Hannity would say that you want old people to die because you raised requirements and slashed social security payouts, and Democrats would compare you to Hitler. You would be the least popular President in the history of the United States.

 

[tryreading]

I got a surplus of $114 billion by 2015, and a surplus of $230 billion by 2030.

 

[Taboon]

I haven't seen or heard of anyone saying that we can balance the budget by only cutting entitlements, but tax increases alone can't come close to balancing the budget, so spending needs to be cut, and entitlements account for the majority of spending, so it's unrealistic to try to balance the budget without touching entitlements.

That's the problem, nobody is giving specifics of what should be cut and/or where to raise taxes. Earmarks and welfare seem to get the brunt of the spin but completely cutting those two things will only be a small fraction of what needs to be done to curb the deficit.

 

[donsutherland1]

CP!!! I love this link!!!

In the past, I've thought that the budget is sooooo overwhelmingly complex that no one can wrap their arms around it. This interactive exercise shows that's not true. I would love to see this go further.

An interactive computer model that showed line-by-line expenditures. A committee to identify those programs possibly eligible for cuts. Another committee to interact with those programs to determine "unintended consequences" of cutting their programs.

There is hope.

If anybody has the guts.

I did it, too, with a mix of 66% spending reductions/34% tax hikes. However, while the mathematical exercise is relatively straightforward e.g., entitlement spending needs to be reformed, the political calculus to build consensus is difficult. For example, I suggested slowing the growth of Medicare spending. Yet, if that requires rationing, how much public support will there be? I suggested raising the SS and Medicare eligibility age to 68 (even as 70 might make more sense given life expectancy changes), but that also would generate significant political backlash.

 

[tryreading]

I did it, too, with a mix of 66% spending reductions/34% tax hikes. However, while the mathematical exercise is relatively straightforward e.g., entitlement spending needs to be reformed, the political calculus to build consensus is difficult. For example, I suggested slowing the growth of Medicare spending. Yet, if that requires rationing, how much public support will there be? I suggested raising the SS and Medicare eligibility age to 68 (even as 70 might make more sense given life expectancy changes), but that also would generate significant political backlash.

I left retirement age alone. 68 or 70 seems very extreme to me. Many people are very tired well before that age, and they have already been paying in for so long, it seems unfair to me. Maybe that's because I'm pushing 50, though, and have selfish reasons.

 

[cpwill]

maybe so; but 68-70 doesn't mean that they have to be working as hard as possible in those times; at that point (hopefully) you've paid off your house, and have a significant chunk of retirement savings. part time or an easier work load ought to cover your expenses for a couple of years if you don't want the pressure of your highest-paying position.

as for selfish reasons; think selfishly for a moment. opposing reforming medicare/social security means that these systems will go belly up and be turned into straight welfare programs; for the poor only (and even then probably with reduced benefits), and unless you fall into that category, you won't see a red cent. the notion that someone 'pushing 50' can hope to have SS and Medicare the way his folks did is a pipe dream, and you are selfishly going to be better off if you reform it so that something is left for the middle class.

68 or 70 is still further away from life expectancy than 65 was when SS was instituted; entire generations drawing 25 years of benefits off of 45 years of working was never considered, and now needs to be accounted for.