Do conservatives think massive debt created by upper class tax cuts is okay?

[Luce]

Actually, no you weren’t. You responded to poster who wrote “leaders are lining up to meet” with President Trump to “resolve problems that exist.” Whether these meetings are in person or telephone are inconsequential.

Quite correct. The crawling and begging thing were in another thread. My apologies.

So, what resolution was gained in that phone call?

 

[StillServing]

Quite correct. The crawling and begging thing were in another thread. My apologies.

So, what resolution was gained in that phone call?

A beginning of a process of communication and negotiation.

 

[Econ4every1]

The numbers show moderate revenue increases despite....

If course there were revenue increases in nominal terms, but in fact when accounting for spending, taxes collected declined. Let me explain.

Lets say there were $1000 in spending at a tax rate of 30%, the government would collect $300. Now if we spent $2000 but lowered taxes to 20% the result would be $400 in taxes collected.

When we look at taxes collected as a percentage of spending we see that tax collection went down (when accounting for spending) when compared to the 5 years before tax cuts were put into place in Jan 2018. Source is table 1.2 on this page from the office of management and budget (image below).

 

[StillServing]

If course there were revenue increases in nominal terms, but in fact when accounting for spending, taxes collected declined. Let me explain.

Lets say there were $1000 in spending at a tax rate of 30%, the government would collect $300. Now if we spent $2000 but lowered taxes to 20% the result would be $400 in taxes collected.

When we look at taxes collected as a percentage of spending we see that tax collection went down (when accounting for spending) when compared to the 5 years before tax cuts were put into place in Jan 2018. Source is table 1.2 on this page from the office of management and budget (image below).

View attachment 67546585

A couple issues. First highlighted numbers on the chart you are showing is not a ratio of revenue to spending but revenue to the GDP. While spending is a major component of GDP, they are not interchangeable terms.

Second, while the revenue/ GDP rates were lower 2018-2020, you are ascribing a faulty source of causation for several reasons:
1-this ratio was already declining for two years
2-despite no change to federal tax policy, 2021 and 2022 had high years of revenue/GDP.
3-As I’ve point out several times, A Pearson Product-Moment Correlation of top marginal tax rates and the revenue / GDP ratio since 1950 shows a tiny, negative correlation (r= -0.05, p=.67). While p value and effect size does not allow us to say that as tax rates go up, revenues decline (negative correlation) at a statistically significant level, it clearly refuted the idea that higher tax rates increase revenue/GDP or conversely that lower tax rates reduces revenue/GDP.

 

[Econ4every1]

First highlighted numbers on the chart you are showing is not a ratio of revenue to spending but revenue to the GDP

Good point....(#1 is 2013 though #8 is 2020).



Same issue. The ratio of spending to revenue is higher in the Trump years where higher spending is the cause of increased revenues.

1-this ratio was already declining for two years

Ok?

2-despite no change to federal tax policy, 2021 and 2022 had high years of revenue/GDP.

Sure, fueled by increased spending, where spending to revenue ratios are higher than pre-Trump.

3-As I’ve point out several times, A Pearson Product-Moment Correlation of top marginal tax rates and the revenue / GDP ratio since 1950 shows a tiny, negative correlation (r= -0.05, p=.67). While p value and effect size does not allow us to say that as tax rates go up, revenues decline (negative correlation) at a statistically significant level, it clearly refuted the idea that higher tax rates increase revenue/GDP or conversely that lower tax rates reduces revenue/GDP.

I wasn't arguing for higher taxes as a way to boost Federal income, to the contrary, I'd argue for lower rates, I'm simply pointing out that the devil is in the details. When most of the cuts go to those higher up, it results in increases in investment, as the Dow and S&P 500 seem to reflect, but does not result in increased revenue vis-a-vis increase money circulating the economy. It matters who the recipients are. If you want to boost tax revenues, tax cuts should go to those most likely to turn around and spend the money back into the real economy.

 

[PIPEWRENCH]

Nope. He's already told world leaders what they can expect from him.

Wrong. He told them what will happen if they don't work with our country.

At best he will face indifference. Why bargain with someone who STARTS with tariffs, because that's all he knows how to do?

They heard what he actually said and that is why they are meeting with him.

You didn't speak for other nations.

No. I don't have to. I have a real leader who represents me and all the people of this country when Trump takes office.

 

[StillServing]

The ratio of spending to revenue is higher in the Trump years where higher spending is the cause of increased revenues.


Ok?

Sure, fueled by increased spending, where spending to revenue ratios are higher than pre-Trump.


I wasn't arguing for higher taxes as a way to boost Federal income, to the contrary, I'd argue for lower rates, I'm simply pointing out that the devil is in the details. When most of the cuts go to those higher up, it results in increases in investment, as the Dow and S&P 500 seem to reflect, but does not result in increased revenue vis-a-vis increase money circulating the economy. It matters who the recipients are. If you want to boost tax revenues, tax cuts should go to those most likely to turn around and spend the money back into the real economy.

I am largely aligned with your last paragraph and misunderstood your purpose of the Fed chart.

I do think it is counterproductive to argue “Trump did that and Biden did this” for this topic. While outside of 2020, President Trump had lower annual deficits than President Biden, they both spent way more than they should have. So making that argument is kinda like saying “John is so much a better husband than Jim because he only beats his wife on weekdays while Jim bests his wife every day of the week.”

Having lower taxes isn’t a way to increase revenues anymore than raising taxes are. I think lowering taxes is in principle because I think Americans should be able to keep more of their own money. Additionally, there tends to be an incentive when done right to spur economic growth which in the end benefits everyone. I think we could lower taxes too low at some point where we cut revenue, but so far it seems we have not reached that point.

The real issue that we spend way too much money—across the entire budget and with all parties. We must reduce our the rate of spending increases . I’d be happy with a commitment to only raise the budget by the rate of inflation and population growth. Put Congress on a true budget and then we can argue about priorities within that budget. Otherwise we are setting up a tragic future for our nation. Works history is replete with countries which have crumbled away because of excess spending. We are on that same track.

 

[Luce]

Wrong. He told them what will happen if they don't work with our country.

No, he said he's slapping tariffs down. There was no prior discussion.

They heard what he actually said and that is why they are meeting with him.

They don't seem to be as cowed as Trump expected. Both Trudeau and Steinbaum are discussing retaliatory tariffs.

No. I don't have to. I have a real leader who represents me and all the people of this country when Trump takes office.

He's not a leader, he's a ridiculous old fart with delusions of grandeur and no idea whatsoever how to deal with other, sovereign nations.

 

[Yes_Minister]

No. While Rush Limbaugh was a commentator—mostly on partisan politics—who often discussed some conservative policies and objectives, he very rarely discussed the philosophical foundations of these principals and I know no one who would call him one of the intellectual writers in conservatism.

As for President Trump? Of course not. He is a populist who supports many conservative principles but he is more of a pragmatic figure who sees those principles as a vehicle for political success.

Of course there are conservatives. But there are far more Republicans who are much like Rush and President Trump. The ideas—the bumper stickers—sounds like something they like, but too few have taken the time to read Hayek, Sowell, Locke, Smith, Friedman among others.

This is not unique to those j the Republican Party. Most Democrats know nothing if the writings of Dewey, Keynes, or Rawls, much less of Alinsky, Horkheimer, Adorno, or Marcuse. They too are the bumper stickers. These are those who hear things they feel comfortable with but just as the bumper-sticker Republicans, if you scratch very far you realize they have no understanding of the core principles what they speak. So, thst leaves them with essentially with the argument of: “Your guys are wrong and our guys are right.” This is no more of a debate or learned conversation than two drunk guys in a bar arguing about whose NFL team, both with 5-8 records, are better.

Yours is that type of question which I care not to engage in. I don’t care about the bumper stickers.

So the number of so called real number of so called real conservatives vs. the so called fake Republican conservatives?

Is the so called real conservatives actually so small as it be irrelevant? Whyllll

Why should anyone take the so called real conservatives seriously when they have clearly been overwhelmed by the fake Republican conservatives and failed to capture the narrative? Seems like their movement is a failure.

This really seems like a no true Scotsman argument:

No true Scotsman - Wikipedia

en.m.wikipedia.org

Reducing the debt and increasing revenue are two different topics.

As far as WHY the Republicans did not reduce the debt during those years...they kept spending like drunken democrats! They had no political will to make the spending changes needed. Even a little bit. To their (the republican congresses at the time) forever shame.

Okay, so what should they have cut?

Now, with respect to revenue increase or decrease. The numbers show moderate revenue increases despite the "tax cuts for the rich".

The economic "pie" is dynamic. Growth is paramount as I am sure you would agree. We may disagree on how to spur that growth, but certainly tax policy alone is not gonna significantly lower yearly deficits much less pay down the debt.

Again what corporation could thrive if they cut costs, but also decreased their revenue?


Again this whole argument seems to be ignorant of how debits and credits work on a basic balance sheet.

 

[Yes_Minister]

No new wars, so that's something.

But was the amount of waste and pork in military spending cut during the Trump years?

Not what I said. When you want to be serious, let me know.

Okay, so what are suggesting be done to lower healthcare spending?

I'm not afraid. I don't know what the final outcome will be. Part of the idea of invading Iraq was to set up a democracy as an alternative to islamic fascism.

It is too early to tell, if that will have the intended impact on the region.


IF, Iraq feel tomorrown, I would have no problem stating that it was a failed policy adn that TRump and Vance are right.

If, tomorrow, Iraq...started inspiring say, SYRIA to become a democracy, I would say that it has worked out and that Trump and Vance were wrong.

Dude, the war started over 20 years ago and guess what, Iraq is not free:

Iraq: Country Profile

Access Freedom House reports on Iraq, see recent news and perspectives, and learn about our work in the country.

freedomhouse.org

How many people still think the Iraq War was a good idea?

You really want to have your cake and eat it too when it comes to spending eh?

Neither one of those scenarios, is a problem for me.... Politically speaking.




It's my position on the issue. Nothing is changing or even really challenging it. So... that's my answer till something changes.

Not sure what more you want from me.

Blaming the left for conservatives not following through with their promises treats them like they have no actual agency, it's like you are saying personal responsibility doesn't apply to them.

 

[StillServing]

So the number of so called real number of so called real conservatives vs. the so called fake Republican conservatives?

Is the so called real conservatives actually so small as it be irrelevant? Whyllll

Why should anyone take the so called real conservatives seriously when they have clearly been overwhelmed by the fake Republican conservatives and failed to capture the narrative? Seems like their movement is a failure.

This really seems like a no true Scotsman argument

Well, it’s been a while since I went to a membership meeting, so I’m not quite sure.

Yours is an asinine argument. Conservatism is a philosophy of governance. Just as is liberalism. Just because there are democrat and republican politicians who operate at the bumper-sticker level doesn’t mean there are not liberals and conservatives who understand and discuss issues based upon the precepts of their governing philosophy.

Talking parties when many of both parties cannot actually defend the principles they espouse is so boring to me as it largely devolves into an argument of banal fandom.

I am far more interested in talking about ideas and principles. You seem to be unwilling/perhaps unable to engage in that level. If you want, I can provide a reading list of prominent liberal intellectuals that you can read so you can engage on such a level.

 

[Yes_Minister]

Well, it’s been a while since I went to a membership meeting, so I’m not quite sure.

Yours is an asinine argument. Conservatism is a philosophy of governance. Just as is liberalism.

Talking parties when many of both parties cannot actually defend the principles the espouse is so boring to me as it largely devolves into an argument of banal fandom.

I am far more interested in talking about ideas and principles. You seem to be unwilling/perhaps unable to engage in that level. If you want, I can provide a reading list of prominent liberal intellectuals that you can read so you ca. engage on such a level.

Except politics is about the exercise of power, some increasingly obscure conservative intellectual has no real actual effect on the world, if the levers of power are wielded by individuals like Trump or Rush or any of their acolytes. Whether you think they are conservatives or not is irrelevant, they wield far more power in the conservative movement than anyone you have named. By the metrics of who actually wields power and is important, Trump and his followers matter far more than anyone you have named.

You want to debate a theoretical academic exercise that has no actual basis regarding the policymakers the conservative movement almost constantly elects.

 

[StillServing]

I’ll be honest, to hear someone keep invoking a talk show host that has been dead for nearly 4 years as if he has relevance now makes me chuckle and realize how in your head he still is.

Policy should be based upon guiding principles. It is the guiding north arrow of the political compass. Both parties generally want to go to their respective north poles. Unfortunately varying levels of ignorance of the where these north stars are means that our politicians stray off course. But that shouldn’t mean that we shouldn’t continue to point out where our respective north stars lie.

Anything short of that is wasted time on shallow partisan bickering that is no more noble than arguing about whose respective sports team is better.

We all should hold ourselves to a higher standard. And I’m not just talking about shallow “liberals” such as yourself. I think the bumper-sticker “conservatives” need to do the same thing. Take time to find your North Star by doing the intellectual homework that provides depth behind your ideas.

Once we rediscover how to talk about ideas and policies from a basis intellectual inquiry, we’ll begin to remove the vitriol from our political discourse.

Anything short of that is mindless banter.

 

[SuperDS77]

Okay, so what should they have cut?

That is a very long list. Hard to know where to start. The recently formed advisory group DOGE captained by Musk and Ramaswamy have a great deal of good ideas in this regard.

Do you stipulate that there is indeed room to cut in many areas?

Again what corporation could thrive if they cut costs, but also decreased their revenue?

First while there are similarities, the US government is not a corporation or business per se.

Also, you seem to be under the fallacious notion that lowering tax rates necessarily results in decreased revenue to the federal government. The economy is not a static "pie" where if more is distributed to one aspect there exactly that amount less for the rest. It is just not true.

Growing the economic pie is the true key, along with cost reductions and regulatory efficiency.

Again this whole argument seems to be ignorant of how debits and credits work on a basic balance sheet.

See above.

 

[MAGAnificent]

It’s mathematically impossible to increase something by collecting a lower percentage of it.

That is an ignorant claim. It is based on the false librul belief that economics is a zero sum game and there is only a set level of econmic activity and a static number of taxpayers. The reality is that economic activity and investments determine how much taxable income exists. Let's take the wealthy for instance. The more money they make from investments, the more they invest, with the motivation of making yet more money. That investment creates more businesses, more jobs, more taxpayers. For instance, if McDonalds makes more profit, they invest those profits and open more McDonalds restaurants and hire more people to run them and work at them. If the wealthy are overtaxed, they instead hide money they would otherwise in tax shelters. In any case, they are less likely to invest.

Every single tax cut in the last 40 years has resulted in less revenue than should have been collected, while not increasing economic output to offset the reduction.

Now you are making it up as you go along.

 

[MAGAnificent]

The additional tax receipts came from higher government spending, not from tax cuts.

Bwahahahahahahahahahahahashahahahahahahahahahahahahahahahahaha!

 

[rahl]

That is an ignorant claim.

It’s an indisputable mathematical fact.

It is based on the false librul belief that economics is a zero sum game and there is only a set level of econmic activity and a static number of taxpayers. The reality is that economic activity and investments determine how much taxable income exists.

There has been no magical increase in economic output following any of the right wing tax cuts in the last 40 years. GDP kept right on going at the same rate. Had there been a magical bump in output, then your theory would be sound. We know empirically, that it isn’t.

Let's take the wealthy for instance. The more money they make from investments, the more they invest, with the motivation of making yet more money. That investment creates more businesses, more jobs, more taxpayers. For instance, if McDonalds makes more profit, they invest those profits and open more McDonalds restaurants and hire more people to run them and work at them. If the wealthy are overtaxed, they instead hide money they would otherwise in tax shelters. In any case, they are less likely to invest.

Yes, this is the voodoo that republicans have been parroting for 49 years. The data shows this never happens.

Now you are making it up as you go along.

You understand we keep track of this data right?

 

[StillServing]

Okay, so what should they have cut?

Perhaps the best place to start is simply to put a cap on federal budget INCREASES matching CPI and population increases. Using last 20 years of historical data, our deficit spending would be $1.56 Trillion less in 10 years.

This would also reframe how Congress frames its budget conversions (levels largely because we would actually have a budget) from an attitude of how much more we increase and to a discussion of priorities.

Second, the GAO estimates that fraud costs the US government between $222 billion and $521 billion each year. Largely this is due to reactive instead of proactive policies, needed technology, staff training, and enhancing whistleblowing protections. The GAI estimates this would cost about $2.1 billion to install. For a 100-250x return, let’s give this a try.

If we stop there, we have reduced the deficit by $1.76-$2.08 Trillion each year without any budget item cuts.

Then we can start having a conversation on those items that we due to the 10th Amendment the Federal government does have any business funding—a topic for another day

Again this whole argument seems to be ignorant of how debits and credits work on a basic balance sheet.

And again, your answer would be absolutely correct if we were talking about a mechanistic system. But what we are talking about is human behavior which is a complex system where lifting a lever here will not give you a simple reaction there because as a organic system, it adapts and changes to the stimulus that is introduced. This is why there is no correlation between tax rates and revenue / GDP.

 

[SuperDS77]

Perhaps the best place to start is simply to put a cap on federal budget INCREASES matching CPI and population increases. Using last 20 years of historical data, our deficit spending would be $1.56 Trillion less in 10 years.

This would also reframe how Congress frames its budget conversions (levels largely because we would actually have a budget) from an attitude of how much more we increase and to a discussion of priorities.

Second, the GAO estimates that fraud costs the US government between $222 billion and $521 billion each year. Largely this is due to reactive instead of proactive policies, needed technology, staff training, and enhancing whistleblowing protections. The GAI estimates this would cost about $2.1 billion to install. For a 100-250x return, let’s give this a try.

If we stop there, we have reduced the deficit by $1.76-$2.08 Trillion each year without any budget item cuts.

Then we can start having a conversation on those items that we due to the 10th Amendment the Federal government does have any business funding—a topic for another day

And again, your answer would be absolutely correct if we were talking about a mechanistic system. But what we are talking about is human behavior which is a complex system where lifting a lever here will not give you a simple reaction there because as a organic system, it adapts and changes to the stimulus that is introduced. This is why there is no correlation between tax rates and revenue / GDP.

I see you are new here and just wanted to compliment your posts thus far. Very well done.

 

[Econ4every1]

Perhaps the best place to start is simply to put a cap on federal budget INCREASES matching CPI and population increases.

You'd also have to add labor productivity to this. Your solution is budget focused, not economy focused. It's like deciding how much gas you should put in your tank based on external variables, rather than just measuring it's capacity and filling it up.

But then I have a question. If you have an economy that has the labor and real resources to do work that needs/ wants to be done, why leave that potential productivity unused? Even if you believe that CPI is a function of spending relative to available or potential supply, generally speaking, if money created finds real productivity, doesn't that real productivity create the justification for creating the money?

Or said another way, if the government supplies the money to create a factory that makes baby food and that creates 1000 jobs and fills a need for baby food, if the demand for baby food increases by 50%, will the price of baby food increase or if the factory was made with expansion in mind, can't the factor just hire more people and machines to make more baby food?

The real productivity of the factory creates the value that justifies the value of the dollars used to create it. Dollars don't lose value if the real resources and labor are available to create real goods and services.

Now I realize there are a lot of unstated variables here and there are cases where what I've said might not apply, but as you consider your answer the question is, are there cases where what I've said is true, from there we can evaluate the variables.

 

[Econ4every1]

Second, the GAO estimates that fraud costs the US government between $222 billion and $521 billion each year. Largely this is due to reactive instead of proactive policies, needed technology, staff training, and enhancing whistleblowing protections. The GAI estimates this would cost about $2.1 billion to install. For a 100-250x return, let’s give this a try.

This is a good idea, but it has the problem of a rate of diminishing return. As a guy who works as a Sr Engineer who has worked for government in various roles I can tell you, eliminating waste costs money. That said, I think there is low hanging fruit that would bear results for minimal spending. I even think the low hanging fruit would be significant, but you cannot eliminate all $220 billion without spending more than you're saving.

If we stop there, we have reduced the deficit by $1.76-$2.08 Trillion each year without any budget item cuts.

And reducing spending by that amount would reduce revenues in the private sector by that amount, in fact it would reduce revenues by even more as each dollar spend is spent more than once. I'm not arguing that we should accept the status quo and shouldn't do anything, rather, I would rather spend that money on other things that are needed.

You cannot save your way to prosperity, what we can do is spend less in wasteful areas and redirect that spending to areas of greater efficacy. That is, unless you can explain how not spending ~$2 trillion dollars won't eliminate $2 trillion dollars in revenue somewhere in the economy.

 

[Econ4every1]

Bwahahahahahahahahahahahashahahahahahahahahahahahahahahahahaha!

That's the most cogent and well articulated responses you've had to one of my posts.

 

[StillServing]

You'd also have to add labor productivity to this. Your solution is budget focused, not economy focused.

I’ll have to break this up a bit. But, sure. I can see tying spending increases to CPI + population growth - labor productivity. In theory this makes sense as when labor productivity increases it make’s government services more efficient and provides economic growth which increases wages reducing need for government services.

A few problems with this is that labor productivity is not uniform across the economy and is far more volatile. This could needlessly complicate the process. However you could maybe have a 5-year review process that would assess a reduction to federal spending based upon how labor productivity has increased. Interesting idea.

 

[StillServing]

This is a good idea, but it has the problem of a rate of diminishing return. As a guy who works as a Sr Engineer who has worked for government in various roles I can tell you, eliminating waste costs money. That said, I think there is low hanging fruit that would bear results for minimal spending. I even think the low hanging fruit would be significant, but you cannot eliminate all $220 billion without spending more than you're saving.

With this type of thinking I can understand you work in government.

First of all, the fraud involved has a low estimate of $221 billion. The high figure is $300 billion MORE

Second, I already noted, GAO estimated that to install all recommend would cost only $2.1 billion

Even if the GAO was off by a magnitude of 10, $21 billion would be nearly the entire budget of NASA ($25 billion) and twice what is used to run the entire FBI ($10 billion)

 

[Corbell]

But was the amount of waste and pork in military spending cut during the Trump years?

Probably not. He had other priorities. Not to mention having to deal with various levels of RESISTS from you guys.

Okay, so what are suggesting be done to lower healthcare spending?

I've made no suggestions on that. I don't really have an overall answer. I have a few ideas, that could help, such as fighting degree inflation.

Dude, the war started over 20 years ago and guess what, Iraq is not free:

Iraq: Country Profile

Access Freedom House reports on Iraq, see recent news and perspectives, and learn about our work in the country.

freedomhouse.org

How many people still think the Iraq War was a good idea?

You really want to have your cake and eat it too when it comes to spending eh?

Twenty years? NOthing releative to the life span of a nation and to change the culture of a region. Like I said, too early to tell.

Blaming the left for conservatives not following through with their promises treats them like they have no actual agency, it's like you are saying personal responsibility doesn't apply to them.

Admitting when we lose is not denyihng agency. YOu might want to actually address what I say, instead of making shit up. I'm pretty good at not falling for that one.