Had Enough Yet?

[Cold Highway]

The current trajectory is unsustainable in the ruling establishment’s own terms. If nothing changes, in perhaps a little more than a decade all the central government’s revenues will be consumed by Medicare, Medicaid, Social Security, and interest on the burgeoning debt, which, at more than $14 trillion, is closing in on 100 percent of GDP. The central government now borrows 40 cents of every dollar it spends. Imagine how upset the ruling elite will be when it can spend money on nothing but so-called entitlements and interest? That would leave nothing for the military-industrial complex, nothing for business and farm subsidies, nothing for all the ways that politicians buy off constituents so they can be reelected over and over. Obviously, they don’t want that to happen. But if they try to keep spending on everything, total government expenditures would have to rise to half or even three-quarters of GDP.

Thus their concern and their various fantasies about fixing things. The problem is they don’t have many options. They could explicitly default on some or all of the debt, but they don’t want to do that because they wouldn’t be able to borrow again. (Jeffrey Rogers Hummel, however, thinks a default is likely.) Inflating their way out won’t work. (See this.) Raising taxes won’t do it either. Revenues as a percentage of GDP have been essentially constant since World War II regardless of tax rates, indicating that people adjust their behavior in response to the tax environment. (Revenues are historically low now because of the recession.)

Couldn’t the politicians cut spending dramatically? The political system doesn’t typically reward spending cutters. People say they want government to spend less – but not on the stuff they’ve come to depend on. Leaving interest aside, the biggest-ticket items are Medicare (with tens of trillions in unfunded promises) and Medicaid, with Social Security placing third. Elderly people, made dependent on the State, vote in high numbers, and they can be counted on to vote defensively, even when the candidate they’re voting against promises not to touch benefits for current and soon-to-be recipients. The special interests that live off a trillion dollars in annual “defense/security” spending won’t let go easily either.

Had Enough Yet? | The Freeman | Ideas On Liberty


In layman's terms; "You cant have your cake and eat it too".

 

[samsmart]

Had Enough Yet? | The Freeman | Ideas On Liberty


In layman's terms; "You cant have your cake and eat it too".

So let's start cutting all the fat in defense spending. I see nothing wrong with that.

 

[reefedjib]

So let's start cutting all the fat in defense spending. I see nothing wrong with that.

The problem is not with defense spending, which is a constant percentage of federal spending, for the most part. The problem is with unbounded, and consistently growing, entitlements: first Medicare, then Medicaid, followed thirdly by Social Security.

 

[samsmart]

The problem is not with defense spending, which is a constant percentage of federal spending, for the most part.

Except when it's also paid for by discretionary spending in times of war without increased tax revenues to pay for it.

 

[reefedjib]

Except when it's also paid for by discretionary spending in times of war without increased tax revenues to pay for it.

War is temporary, so by definition it is discretionary. It costs $100 to $120 billion over normal defense spending...compared to trillions for entitlements, which are NOT discretionary. You are comparing a fraction of the 22% of federal defense budget to the 64% of mandatory spending for entitlements.

The problem is not with the cost of war. The problem is with mandatory spending.

 

[Manc Skipper]

That's a really stupid expression. If you can't eat it, why would you have a cake? There's no point.

 

[washunut]

The problem is not with defense spending, which is a constant percentage of federal spending, for the most part. The problem is with unbounded, and consistently growing, entitlements: first Medicare, then Medicaid, followed thirdly by Social Security.

What I find interesting is that social security is totally funded by payroll taxes. While there have to be fixes to the program to keep it solvent for many years that has been done in the past and is relatively easy. That is 20% of the unified budget and it seems to me to be a red herring for those who do not want to address the parts of the budget that are not self funded. The same is true with Medicare, which will be harder but again is a seperately funded program.

The scary ( and truthful) aspect to this is that these two areas represent about 50% of the budget, more than 1.5 trillion. So when you get down to it, the real shortfall is defense, the discretionary stuff and interest expense.

Politicians from both parties need to say what they want the government to fund and then have the courage to tell the electorate what the tab is and therefore what taxes have to be. Only then will voters have a real choice of what they want our government to spend our money on.

So there is the only true choice for Americans other than say let's spend now and send the bill to our kids and grandkids, just like we have done for the last thirty years. We are stealing the next generation's productivity and selling it overseas so that this current generation of freeloaders can have a better life than they can afford.

 

[reefedjib]

What I find interesting is that social security is totally funded by payroll taxes. While there have to be fixes to the program to keep it solvent for many years that has been done in the past and is relatively easy. That is 20% of the unified budget and it seems to me to be a red herring for those who do not want to address the parts of the budget that are not self funded. The same is true with Medicare, which will be harder but again is a seperately funded program.

The scary ( and truthful) aspect to this is that these two areas represent about 50% of the budget, more than 1.5 trillion. So when you get down to it, the real shortfall is defense, the discretionary stuff and interest expense.

Politicians from both parties need to say what they want the government to fund and then have the courage to tell the electorate what the tab is and therefore what taxes have to be. Only then will voters have a real choice of what they want our government to spend our money on.

So there is the only true choice for Americans other than say let's spend now and send the bill to our kids and grandkids, just like we have done for the last thirty years. We are stealing the next generation's productivity and selling it overseas so that this current generation of freeloaders can have a better life than they can afford.

In 1935, Social Security and Medicare represented 0% of the federal budget. I don't really care what the funding category is for SS, as if it being taxed separately funds it in a way that doesn't affect the funding of other budgetary items. The taxation is one sum. The fact that the transfer of tax dollars from one acct to another proves it. Not only does SS eat away at it's surplus, changing its benefits are required to keep it within those boundaries. This is all nonsense. The truth is that SS is growing consistently.

The scary aspect of this is that SS is the third worst offender. Medicare is the first. As they consume greater portions of the budget year-to-year, less money is available for true responsibilities of the federal tax dollars. That those uses are to be considered by you as the culprit in overspending is laughable.

Entitlements were 0% of the budget in 1935. Today they are over 60% of the budget, or 15% of total GDP. Federal spending has gone from 9% of GDP, in 1935, to 23% of GDP, in 2011. So we have entitlement spending that goes from 0% to 15% of GDP and other federal spending has gone from 9% to 8% of GDP. Entitlements are putting budgetary pressure on all other federal spending.

 

[washunut]

In 1935, Social Security and Medicare represented 0% of the federal budget. I don't really care what the funding category is for SS, as if it being taxed separately funds it in a way that doesn't affect the funding of other budgetary items. The taxation is one sum. The fact that the transfer of tax dollars from one acct to another proves it. Not only does SS eat away at it's surplus, changing its benefits are required to keep it within those boundaries. This is all nonsense. The truth is that SS is growing consistently.

The scary aspect of this is that SS is the third worst offender. Medicare is the first. As they consume greater portions of the budget year-to-year, less money is available for true responsibilities of the federal tax dollars. That those uses are to be considered by you as the culprit in overspending is laughable.

Entitlements were 0% of the budget in 1935. Today they are over 60% of the budget, or 15% of total GDP. Federal spending has gone from 9% of GDP, in 1935, to 23% of GDP, in 2011. So we have entitlement spending that goes from 0% to 15% of GDP and other federal spending has gone from 9% to 8% of GDP. Entitlements are putting budgetary pressure on all other federal spending.

I am not sure if you are a student or are a current taxpayer. But here goes. Americans pay income taxes and then payroll taxes. Included in payroll taxes are Social Security, Medicare and unemployment taxes. Social Security tax is capped on the first 106,000 of ordinary income. The tax is a bit less than 8% and is imposed on Both the worker and his/her employer.

You are correct that for a long while social security was a seperate bucket of gvernment intake. Very much like an annutity set up for retirement which it is. In 1968, under LBJ social security was added as a component to the "unified Busget". This was done at the time because of the heavy costs of the Vietnam war, so the SURPLUSES brought in made the overall budget look better. This scam by our politicians of both parties was very convienient for the last 40 years as social security took in more than it spent. This surplus totals around 4 trillion annually and is part of the 14 trillion debt as the social security department atually has IOUs from the government.

You may remember that Al Gore during the 2002 election talked about a "lock box" for social security savings. People scoffed at it then but are not laughing now.

So the reality is that all monies paid out of social security today are paid from funds paid into the system. Does the system need to be tweaked ( as it has in the past) to keep up with changes in life span and the aging of the public yes, is it a true user of any tax dollars not paid in to the government for this specific purpose, no.

Very important to under this distinction in my view.

 

[cpwill]

So let's start cutting all the fat in defense spending. I see nothing wrong with that.

the Air Force. we don't need it, and can plausibly fight wars better without it.

but generally, Defense is somethign the federal government is supposed to do; and not a little bit of the rest of our economic system depends on the global stability it provides.

 

[cpgrad08]

the Air Force. we don't need it, and can plausibly fight wars better without it.

but generally, Defense is somethign the federal government is supposed to do; and not a little bit of the rest of our economic system depends on the global stability it provides.

cpwill you should know that by know every time a branch of the military is tried to be destroyed it's always the Marine Corps.

 

[Utility Man]

"Defense spending" reminds me of this video.

 

[reefedjib]

I am not sure if you are a student or are a current taxpayer. But here goes. Americans pay income taxes and then payroll taxes. Included in payroll taxes are Social Security, Medicare and unemployment taxes. Social Security tax is capped on the first 106,000 of ordinary income. The tax is a bit less than 8% and is imposed on Both the worker and his/her employer.

You are correct that for a long while social security was a seperate bucket of gvernment intake. Very much like an annutity set up for retirement which it is. In 1968, under LBJ social security was added as a component to the "unified Busget". This was done at the time because of the heavy costs of the Vietnam war, so the SURPLUSES brought in made the overall budget look better. This scam by our politicians of both parties was very convienient for the last 40 years as social security took in more than it spent. This surplus totals around 4 trillion annually and is part of the 14 trillion debt as the social security department atually has IOUs from the government.

You may remember that Al Gore during the 2002 election talked about a "lock box" for social security savings. People scoffed at it then but are not laughing now.

So the reality is that all monies paid out of social security today are paid from funds paid into the system. Does the system need to be tweaked ( as it has in the past) to keep up with changes in life span and the aging of the public yes, is it a true user of any tax dollars not paid in to the government for this specific purpose, no.

Very important to under this distinction in my view.

How pedantic of you.

The source of the taxes spent does not matter. The accounting for them is smoke and mirrors. The key on the income side is to look at the change in total income historically. It is roughly fixed at 18% (+/- 2%) of GDP, since 1950. That this used to be 95% income tax and 5% payroll tax in 1950, versus 56% income tax and 44% payroll tax in 2010 does not matter in the slightest.

The key is to look at the growth in spending for the various purposes. SS/Medicare/Medicaid/Welfare are the worst offenders.

• In 1950, these entitlements were 1.22% of GDP, or 8% of total spending, while the entire remainder of government spending was 14.03%, or 92% of total spending. Total spending is 15.25% of GDP.
• In 2011, the entitlements are 14.4% of GDP, or 56% of total spending, while the entire remainder of government spending is 10.92%, or 44% of total spending. Total spending is 25.32% of GDP.
• Total spending has increased from 15.25%, in 1950, to 25.32%, in 2011. That is a 166% increase in total spending.
• Entitlements are sucking budget at a consistently increasing rate, from 8% to 56% of total budget.
• So the percentage of entitlement spending has increased its percentage on top of an increase in total spending. That is an increase on top of an increase.
• GDP has steadily increased from $293.7 billion, in 1950, to $15079.6 billion, in 2011. So not only has the percentage of GDP for entitlements increased, but since the GDP has been increasing, Each percent of GDP spent on entitlements has increased in real value. It is an increase on top of an increase on top of an increase.
• To pay for it, taxes have been added/increased, so total revenue is a higher percentage of GDP. Another increase on top of an increase.
• Tweaking the funding accounting, to remain solvent, does not eliminate the fact that the cost is steadily increasing and sucking budget.

Taking apart the federal budget (washingtonpost.com)

 

[washunut]

How pedantic of you.

The source of the taxes spent does not matter. The accounting for them is smoke and mirrors. The key on the income side is to look at the change in total income historically. It is roughly fixed at 18% (+/- 2%) of GDP, since 1950. That this used to be 95% income tax and 5% payroll tax in 1950, versus 56% income tax and 44% payroll tax in 2010 does not matter in the slightest.

The key is to look at the growth in spending for the various purposes. SS/Medicare/Medicaid/Welfare are the worst offenders.

• In 1950, these entitlements were 1.22% of GDP, or 8% of total spending, while the entire remainder of government spending was 14.03%, or 92% of total spending. Total spending is 15.25% of GDP.
• In 2011, the entitlements are 14.4% of GDP, or 56% of total spending, while the entire remainder of government spending is 10.92%, or 44% of total spending. Total spending is 25.32% of GDP.
• Total spending has increased from 15.25%, in 1950, to 25.32%, in 2011. That is a 166% increase in total spending.
• Entitlements are sucking budget at a consistently increasing rate, from 8% to 56% of total budget.
• So the percentage of entitlement spending has increased its percentage on top of an increase in total spending. That is an increase on top of an increase.
• GDP has steadily increased from $293.7 billion, in 1950, to $15079.6 billion, in 2011. So not only has the percentage of GDP for entitlements increased, but since the GDP has been increasing, Each percent of GDP spent on entitlements has increased in real value. It is an increase on top of an increase on top of an increase.
• To pay for it, taxes have been added/increased, so total revenue is a higher percentage of GDP. Another increase on top of an increase.
• Tweaking the funding accounting, to remain solvent, does not eliminate the fact that the cost is steadily increasing and sucking budget.

Taking apart the federal budget (washingtonpost.com)

This is getting boring. Can't debate with people who do not have a basic understanding of a topic.

 

[reefedjib]

This is getting boring. Can't debate with people who do not have a basic understanding of a topic.

No, you just can't make any worthwhile point given the facts I posted.

Do you question that entitlements are sucking budget at a consistently increasing rate, from 8% to 56% of total budget, between 1950 and 2011, while the budget has increased from 15.25% of GDP to 25.32% of GDP, while GDP has grown from $293.7 billion, in 1950, to $15079.6 billion, in 2011?

That means entitlements cost $3.6 billion, in 1950, and cost $2.138 trillion, in 2011.

That is a 59,393% increase in the cost of entitlements between 1950 and 2011.

The numbers do not lie and you cannot argue with them. Goodbye.

 

[washunut]

No, you just can't make any worthwhile point given the facts I posted.

Do you question that entitlements are sucking budget at a consistently increasing rate, from 8% to 56% of total budget, between 1950 and 2011, while the budget has increased from 15.25% of GDP to 25.32% of GDP, while GDP has grown from $293.7 billion, in 1950, to $15079.6 billion, in 2011?

That means entitlements cost $3.6 billion, in 1950, and cost $2.138 trillion, in 2011.

That is a 59,393% increase in the cost of entitlements between 1950 and 2011.

The numbers do not lie and you cannot argue with them. Goodbye.

Screaming does not make your arguement any stronger, or you any smarter.

Perhaps this site should have a subsection where only people with only an IQ above lets say 120 can enter. Then I would not have to put up with this trash.

 

[reefedjib]

Screaming does not make your arguement any stronger, or you any smarter.

Perhaps this site should have a subsection where only people with only an IQ above lets say 120 can enter. Then I would not have to put up with this trash.

That's right, ignore the content, which you cannot challenge on its merits, and make a personal attack. You got nothing to offer here. Goodbye.

 

[justabubba]

Screaming does not make your arguement any stronger, or you any smarter.

Perhaps this site should have a subsection where only people with only an IQ above lets say 120 can enter. Then I would not have to put up with this trash.

be assured, were that the case, you would not be subjected to it

 

[haymarket]

The OP is extremely typical of a libertarian/right wing approach to it all and is terribly dishonest in its presentation.

Like many of the same ilk on these parts, they refuse to consider raising taxes on those who have got the biggest cuts over the last thirty years corporations and the rich. Until that happens, there will be a revenue problem when only half of the budget is addressed.

from the article in the OP

Raising taxes won’t do it either.

That is like telling your spouse "sure I could go out and get a second job increasing our income, but thats really not going to help our families financial situation".
Do you think she will buy the line you are trying to sell? Of course not. But the right wing asks us to buy the same line here everyday.

The view of the lead article borders on intellectual fraud.

 

[deltabtry]

So let's start cutting all the fat in defense spending. I see nothing wrong with that.

Actually according the constitution we should have no standing army for longer than 2 years.

 

[deltabtry]

The problem is not with defense spending, which is a constant percentage of federal spending, for the most part. The problem is with unbounded, and consistently growing, entitlements: first Medicare, then Medicaid, followed thirdly by Social Security.

The defense spending has to be cut severly, we do have weapons that can handle any attack, the only question is do we have the will to use it.

 

[reefedjib]

The defense spending has to be cut severly, we do have weapons that can handle any attack, the only question is do we have the will to use it.

The biggest defense spending comes from payroll and procurement. These are not items that are growing unbounded. We could stop R&D, which brings parity with China, who are consistently increasing their military spending percentage. We could shrink the size of our forces, reducing payroll and procurement. But the fact remains that defense spending is not unbounded.

Entitlements are unbounded, growing expenditures. From 8% of federal budget to 56% of federal budget, from 1950 to 2011. and growing. That is a 59,393% increase in the cost of entitlements between 1950 and 2011. and growing. This growth is putting pressure on the rest of the budget, including defense. We borrow 40% of our spending. and growing.

We could increase taxes, hurting our economy.

We could cut defense and other budget items, as entitlements grow to 70+% of our spending.

The real problem lies with entitlements. We have to cut entitlements. No SS for those under 50 years old. Privatize. Significantly increased premiums on Medicare and caps on eligible services. Make health insurance competitive by allowing insurance companies to compete across state lines.

 

[deltabtry]

The biggest defense spending comes from payroll and procurement. These are not items that are growing unbounded. We could stop R&D, which brings parity with China, who are consistently increasing their military spending percentage. We could shrink the size of our forces, reducing payroll and procurement. But the fact remains that defense spending is not unbounded.

Entitlements are unbounded, growing expenditures. From 8% of federal budget to 56% of federal budget, from 1950 to 2011. and growing. That is a 59,393% increase in the cost of entitlements between 1950 and 2011. and growing. This growth is putting pressure on the rest of the budget, including defense. We borrow 40% of our spending. and growing.

We could increase taxes, hurting our economy.

We could cut defense and other budget items, as entitlements grow to 70+% of our spending.

The real problem lies with entitlements. We have to cut entitlements. No SS for those under 50 years old. Privatize. Significantly increased premiums on Medicare and caps on eligible services. Make health insurance competitive by allowing insurance companies to compete across state lines.

I agree completely with your post. Although defense spending is way over board and inflated deliberately by those who supply us with the weapons and material. I am all for a strong military but our founding fathers warned us about having a constant standing army, which by definition states we are in a perpetual state of war.

 

[deltabtry]

"Defense spending" reminds me of this video.

I wonder if I told the IRS I am not paying anymore and I want a refund because I will not subsidized corruption, plundering, misadventures and a complete breach of contract between the American people and it's government...LOL nope I don't think so, they will lock my ass up in a heart beat..a free country we say..lol.

 

[reefedjib]

I wonder if I told the IRS I am not paying anymore and I want a refund because I will not subsidized corruption, plundering, misadventures and a complete breach of contract between the American people and it's government...LOL nope I don't think so, they will lock my ass up in a heart beat..a free country we say..lol.

Could they lock up half the country if half the country decided to stop paying taxes?

See Civil Disobedience, by Henry David Thoreau.