The Trillion Dollar Budget: A proposal

[Redress]

There is no strawman here. You claim that the GOVERNMENT, not borrowing money, and not spending money forcibly taken out of the economy through taxes, would reduce demand.

There is no further proof needed then the abject failure of "Stimulus Package". It FAILED to create demand.

There is no further proof needed then the 1929-1940's record of massive government taxation and spending driving down demand, increasing unemployment and wrecking the economy.

History shows you are DEAD WRONG in believing the myth that Government drives demand. The ONLY time that worked, was WWII, and that was a completely different animal.


Did you watch the video I provided, no? Pity you have blinders on. This is what makes you so easy to prove wrong.

And now you change your story after you get called on it. Let me quote you:

The truth is, you believe only GOVERNMENT is the answer

See, I did not say that, nor do I believe that as you state it. That is why it is in fact a straw man.

Reduced demand comes about because you have less money for those who spend the largest share, and you have no access to borrowed money. Show how you can have increased demand under those situation, both of which are a requirement for your plan.

The stimulus did in fact create demand, just not enough nor for long enough. But note the GDP growth during the period when the stimulus was most active(ie last year) compared to now.

Your plan won't work, and would devastate the economy. Even assuming that the private sector could eventually offset the loss of government spending, in the short term you would drive unemployment way up, which would further reduce demand, especially since you can no longer afford to pay unemployment benefits. Further demand reductions from those on SS and Welfare and Foodstamps and Medicare(who now have to spend all that money they would have spent on goods and services on health care). The economy crashes and would be a very long time in recovering. None of these points, which have been pointed out to you already, have you countered in any way.

 

[molten_dragon]

I propose a solution to our budgetary woes:

A limit to spending of $750,000,000,000.00, and $250,000,000,000.00

The $750b would cover Military, CIA, FBI, Diplomatic, Immigration, NASA and basic Federal Spending.

The $250b would go towards debt.

All other spending would cease, all taxes taken in over the year in excess sans INTEREST ON NATIONAL DEBT, would be refunded back to those that were over taxed, tax rates would be lowered until nominal parity with taxation and spending were reached. This would allow lower tax rates as the principle amounts owed dropped.

What would this do?

First it would solidify the national economic situation; we wouldn't be going broke. Over time our debt would eventually zero out. Yes, it would take many years, but those are years we must atone for, and either do it now, smartly, or watch the system implode to the detriment of all.

Secondly, where would that excess money GO? Why into the hands of PEOPLE! The Markets, the economic boom that would follow such a move, as Capital was no longer tied up into the machine that is Government and instead used to CREATE wealth... would be staggering.

Finally, the stable, strong US dollar would help calm world markets, and put the "global economy" back on an upward trajectory.

The only reason such a path is not taken, is there is no political gain to be had from allowing free peoples to use resources. This was the madness that FDR brought upon us, and it's high time we closed the book on his failures, once and for all.

I think this is one of those situations where the cure would be worse than the disease.

I liken our ridiculous government overspending to a drug addiction. We can't keep on this way because it's eventually going to catch up with us if we do, and that's going to leave us in a very bad place. However, much like a drug addiction, going cold turkey can do things just as bad to us. We need to wean ourselves off carefully.

 

[whysoserious]

Fallacy. What, do you think money just goes under mattresses? It get's invested, back into companies to help them grow (that's how hiring expands), into other companies, into banks which use said funds to loan to others for start ups...

They better do more than just hire, they're going to have to give massive raises as well (since you decided that dismantling every social program was important as well). However, considering you also dismantled the unions and took away the minimum wage, I see that as being unlikely. I love the magical trickle-down economic theory. And while you are calling other people's posts "fallacies", let's examine the facts:

1) Your plan eliminates thousands of jobs. I don't know many, but it's a **** ton.
2) Your plan will raise taxes on the lower and middle classes.
3) Your plan will take away funding that the lower class currently counts on.
4) Your plan will remove social security from seniors (with no plan to put in its place).
5) Your plan will remove Medicare and Medicaid as well (with no plan to put in its place).
6) Your plan counts on one unproven economic theory: trickle-down economics.

And let's expand on number 6. Since you probably doubled the poor's expenses in favor of less spending and stimulus for big business, that means not only would there have to be more jobs, but also all lower and middle class jobs would have to pay substantially more. Are you guaranteeing that would occur? If so, what evidence do you have to base that on (besides the obvious rhetoric)?

 

[Renae]

And now you change your story after you get called on it. Let me quote you:



See, I did not say that, nor do I believe that as you state it. That is why it is in fact a straw man.

Reduced demand comes about because you have less money for those who spend the largest share, and you have no access to borrowed money. Show how you can have increased demand under those situation, both of which are a requirement for your plan.

The stimulus did in fact create demand, just not enough nor for long enough. But note the GDP growth during the period when the stimulus was most active(ie last year) compared to now.

Your plan won't work, and would devastate the economy. Even assuming that the private sector could eventually offset the loss of government spending, in the short term you would drive unemployment way up, which would further reduce demand, especially since you can no longer afford to pay unemployment benefits. Further demand reductions from those on SS and Welfare and Foodstamps and Medicare(who now have to spend all that money they would have spent on goods and services on health care). The economy crashes and would be a very long time in recovering. None of these points, which have been pointed out to you already, have you countered in any way.

The stimulous wasn't big enough? And you claim you don't believe Government is the answer, quite laughable.

 

[Renae]

They better do more than just hire, they're going to have to give massive raises as well (since you decided that dismantling every social program was important as well). However, considering you also dismantled the unions and took away the minimum wage, I see that as being unlikely. I love the magical trickle-down economic theory. And while you are calling other people's posts "fallacies", let's examine the facts:

1) Your plan eliminates thousands of jobs. I don't know many, but it's a **** ton.
2) Your plan will raise taxes on the lower and middle classes.
3) Your plan will take away funding that the lower class currently counts on.
4) Your plan will remove social security from seniors (with no plan to put in its place).
5) Your plan will remove Medicare and Medicaid as well (with no plan to put in its place).
6) Your plan counts on one unproven economic theory: trickle-down economics.

And let's expand on number 6. Since you probably doubled the poor's expenses in favor of less spending and stimulus for big business, that means not only would there have to be more jobs, but also all lower and middle class jobs would have to pay substantially more. Are you guaranteeing that would occur? If so, what evidence do you have to base that on (besides the obvious rhetoric)?

Public Sector only. Private sector unions are fine. And minimum age hurts, far more then it helps, but people dont' seem to grasp this fact.

Imagine, if you will, there was no minimum age. Companies would have to hire at wages the market dictates. Now, unless every company gets together and agrees to only offer jobs at say $5/hr... workers will have power to demand higher wages for their efforts simply by refusing to work for lower wage. However, Government, by FORCING a minimum wage, kills market competition for wage earners. ALL companies can offer the same low wage for the same work, regardless of what you the employee may believe your time is worth.

 

[Redress]

The stimulous wasn't big enough? And you claim you don't believe Government is the answer, quite laughable.

And again with the twisting words while avoiding the entire content of the post, which you have still failed to counter in any way. Do you want to actually defend your idea(hint: you are not doing so), or are you just going to twist peoples words and create straw men?

 

[vvx]

Imagine, if you will, there was no minimum age. Companies would have to hire at wages the market dictates. Now, unless every company gets together and agrees to only offer jobs at say $5/hr... workers will have power to demand higher wages for their efforts simply by refusing to work for lower wage. However, Government, by FORCING a minimum wage, kills market competition for wage earners. ALL companies can offer the same low wage for the same work, regardless of what you the employee may believe your time is worth.

If the market rate for the wage is higher than minimum wage, the minimum wage wouldn't affect anything. If the market rate is below minimum wage, that would reduce wage. Minimum wage doesn't say "you have to pay this rate", but rather "you can't pay below this rate." If the former was true, you'd have a point.

The reality with wages is the two parties of the transaction are not on equal footing. Many wage earners work to put a roof over their head and food in their stomachs. If one had to go six months with no income homelessness is not unrealistic, and people generally will take whatever they can get before they go to that extreme. On the other hand, if one of your "producers" who has the capital necessary for investing in business goes six months without employees or a business, they might not earn as much as they otherwise could but homelessness isn't on the table, not for them.

 

[Jetboogieman]

The stimulous wasn't big enough? And you claim you don't believe Government is the answer, quite laughable.

With the amount of value the economy lost during the crash no it wasn't actually big enough.

It merely put a cushion on further economic contraction.

 

[Renae]

With the amount of value the economy lost during the crash no it wasn't actually big enough.

It merely put a cushion on further economic contraction.

Actually, the negatives outweighed any good done, and the expectation of "Government will bail us out" set a bad precedent. It didn't work during the Great Depression, it didn't work this time, it WILL NEVER WORK.

 

[Redress]

Actually, the negatives outweighed any good done, and the expectation of "Government will bail us out" set a bad precedent. It didn't work during the Great Depression, it didn't work this time, it WILL NEVER WORK.

Except that the data available shows it did do some good. Just claiming mindlessly that it failed is silly. You have no evidence of that. However, I have evidence it did do some good: http://www.cbo.gov/ftpdocs/120xx/doc12074/02-23-ARRA.pdf

This is what we call backing up our claims.

And are you ever actually going to make an attempt to defend your proposal or counter anything any one is telling you here?

 

[Renae]

Except that the data available shows it did do some good. Just claiming mindlessly that it failed is silly. You have no evidence of that. However, I have evidence it did do some good: http://www.cbo.gov/ftpdocs/120xx/doc12074/02-23-ARRA.pdf

This is what we call backing up our claims.

And are you ever actually going to make an attempt to defend your proposal or counter anything any one is telling you here?

It did do some good, short term. I'm talking the long term negatives!

Guess what Redress, that's the bigger issue. LONG TERM recovery was hampered, just like the Great Depression. Sure, it made the fall "softer" but longer. Quick political points, but long term harm. It would have been far far better to let the system hit bottm, and promote pro-growth policies that would have helped the system self correct then try to hold the falling system up.

 

[Redress]

It did do some good, short term. I'm talking the long term negatives!

Guess what Redress, that's the bigger issue. LONG TERM recovery was hampered, just like the Great Depression. Sure, it made the fall "softer" but longer. Quick political points, but long term harm. It would have been far far better to let the system hit bottm, and promote pro-growth policies that would have helped the system self correct then try to hold the falling system up.

I am not convinced it had any significant long term negatives, assuming(and we both know about that word) that spending is cut going forward when the economy recovers.

 

[Kernel Sanders]

The system is going to implode. You can either say it's "too hard to fix" and pray you aren't around for the implosion, or be a part of the solution.

Don't put words in my mouth. It's fixable, but it is going to take a very long time. As a young employed man I'd be just fine if you instantly gutted the entire budget. I asked before and I'll ask again. What happens to the millions of Americans relying on medicare to get the drugs they need to live out the next month? The seniors who rely on Social security to eat? How is the lumbering bureaucracy that comprises the military going to make the radical adjustment that such budget constraints would entail? Pulling the entire budget out from underneath the military would leave it severely weakened for years while it adjusts. Are you okay with that?

 

[Black_Zawisza]

Don't put words in my mouth. It's fixable, but it is going to take a very long time. As a young employed man I'd be just fine if you instantly gutted the entire budget. I asked before and I'll ask again. What happens to the millions of Americans relying on medicare to get the drugs they need to live out the next month? The seniors who rely on Social security to eat? How is the lumbering bureaucracy that comprises the military going to make the radical adjustment that such budget constraints would entail? Pulling the entire budget out from underneath the military would leave it severely weakened for years while it adjusts. Are you okay with that?

Meh, I think we'll live.