Who Has the Courage to Get Our Budget in Order?

[Jack Hays]

Here is some straight talk about what we need to do to get our budget in order. Neither GWB nor BHO provided leadership in this area.

https://www.washingtonpost.com/opin...a82-11e5-93b7-5eddc056ad8a_story.html?hpid=z3


A recent Congressional Budget Office report, “The 2015 Long-Term Budget Outlook,” reminds us that the federal government is slowly becoming an agency for taking care of the elderly. Almost everything else is being crowded out. We ignored that during the Obama presidency, and now it seems that the fledgling presidential campaign may do likewise. Hillary Clinton and other Democrats plug fairer economic growth. Jeb Bush and other Republicans are more forthcoming (they talk about raising Social Security’s eligibility age) but concentrate their rhetoric on creating faster economic growth.
Government’s central reality has gone missing. There’s a bipartisan triumph of political expedience over professed beliefs. Liberals shrink many domestic programs, because they won’t acknowledge that unchecked spending on the elderly is partially financed by curbing other activities — from food stamps to highway repairs. Conservatives weaken defense, because they won’t concede that, even with cuts to domestic spending (including the elderly), an adequate military cannot be financed without additional taxes. . . .

 

[DaveFagan]

Here is some straight talk about what we need to do to get our budget in order. Neither GWB nor BHO provided leadership in this area.

https://www.washingtonpost.com/opin...a82-11e5-93b7-5eddc056ad8a_story.html?hpid=z3


A recent Congressional Budget Office report, “The 2015 Long-Term Budget Outlook,” reminds us that the federal government is slowly becoming an agency for taking care of the elderly. Almost everything else is being crowded out. We ignored that during the Obama presidency, and now it seems that the fledgling presidential campaign may do likewise. Hillary Clinton and other Democrats plug fairer economic growth. Jeb Bush and other Republicans are more forthcoming (they talk about raising Social Security’s eligibility age) but concentrate their rhetoric on creating faster economic growth.
Government’s central reality has gone missing. There’s a bipartisan triumph of political expedience over professed beliefs. Liberals shrink many domestic programs, because they won’t acknowledge that unchecked spending on the elderly is partially financed by curbing other activities — from food stamps to highway repairs. Conservatives weaken defense, because they won’t concede that, even with cuts to domestic spending (including the elderly), an adequate military cannot be financed without additional taxes. . . .

We are diametrically opposed on this matter. I think the Military Offense budget is the cause of all the Nation's serious problems.

 

[Khayembii Communique]

Liberals shrink many domestic programs, because they won’t acknowledge that unchecked spending on the elderly is partially financed by curbing other activities — from food stamps to highway repairs.

This isn't true at all. Spending on one program is completely unrelated to spending (or lack thereof) on another.

As the CBO makes clear, an aging population and high health costs will perpetuate this trend for years. Under current law, Social Security and health programs will account for two-thirds of today’s budget levels (measured by GDP) by 2040, estimates the CBO. What’s left for the rest?

What's left is as much as the government is interested in spending on "the rest".

Either the rest of government will shrink dramatically, or Congress will expand government spending sharply. The latter, of course, would require higher taxes or bigger deficits.

He at least gets this right.

But budget deficits are not the problem. They are simply the consequences of the problem, which is that the combination of an aging society and expensive health care threatens many vital government functions.

This is certainly true. Healthcare expenses are a big problem. ACA helped somewhat but not nearly enough.

The young are being forced to subsidize the old through higher taxes and reduced public services.

He contradicts himself here. Why can't the source of funding be larger deficits and not just these two things, as he said a couple sentences ago?

The proper response is to spread the pain.

No, the proper response is to expand the deficits and grow the national debt.

 

[Jack Hays]

This isn't true at all. Spending on one program is completely unrelated to spending (or lack thereof) on another.



What's left is as much as the government is interested in spending on "the rest".



He at least gets this right.



This is certainly true. Healthcare expenses are a big problem. ACA helped somewhat but not nearly enough.



He contradicts himself here. Why can't the source of funding be larger deficits and not just these two things, as he said a couple sentences ago?



No, the proper response is to expand the deficits and grow the national debt.

Do you see a ceiling where debt growth should stop?

 

[ludin]

Here is some straight talk about what we need to do to get our budget in order. Neither GWB nor BHO provided leadership in this area.

https://www.washingtonpost.com/opin...a82-11e5-93b7-5eddc056ad8a_story.html?hpid=z3


A recent Congressional Budget Office report, “The 2015 Long-Term Budget Outlook,” reminds us that the federal government is slowly becoming an agency for taking care of the elderly. Almost everything else is being crowded out. We ignored that during the Obama presidency, and now it seems that the fledgling presidential campaign may do likewise. Hillary Clinton and other Democrats plug fairer economic growth. Jeb Bush and other Republicans are more forthcoming (they talk about raising Social Security’s eligibility age) but concentrate their rhetoric on creating faster economic growth.
Government’s central reality has gone missing. There’s a bipartisan triumph of political expedience over professed beliefs. Liberals shrink many domestic programs, because they won’t acknowledge that unchecked spending on the elderly is partially financed by curbing other activities — from food stamps to highway repairs. Conservatives weaken defense, because they won’t concede that, even with cuts to domestic spending (including the elderly), an adequate military cannot be financed without additional taxes. . . .

I do.

first act is gut the department of education. it isn't needed. states can handle their own education. the department would be reduced to nothing more than a few people to ensure
the money saved was going to education.

next is to changed SS. it is not longer a Ponzi scheme.
what you pay into SS is yours. the government will pay a flat interest rate on the account.
if you are 55 or older there is not enough time to correct the problem so you will stay on the current system.

next total redo of the tax system making it easier and simplier to read.

 

[Jack Hays]

I do.

first act is gut the department of education. it isn't needed. states can handle their own education. the department would be reduced to nothing more than a few people to ensure
the money saved was going to education.

next is to changed SS. it is not longer a Ponzi scheme.
what you pay into SS is yours. the government will pay a flat interest rate on the account.
if you are 55 or older there is not enough time to correct the problem so you will stay on the current system.

next total redo of the tax system making it easier and simplier to read.

Fair enough.

 

[JohnfrmClevelan]

Do you see a ceiling where debt growth should stop?

Full employment or high inflation, whichever comes first.

 

[Jack Hays]

Full employment or high inflation, whichever comes first.

We'll have to disagree.

 

[JohnfrmClevelan]

We'll have to disagree.

That we will. Certainly, if you cannot point to real economic damage that can be logically blamed on federal deficits. Because we all know that unemployment is damaging.

 

[Glen Contrarian]

I do.

first act is gut the department of education. it isn't needed. states can handle their own education. the department would be reduced to nothing more than a few people to ensure
the money saved was going to education.

next is to changed SS. it is not longer a Ponzi scheme.
what you pay into SS is yours. the government will pay a flat interest rate on the account.
if you are 55 or older there is not enough time to correct the problem so you will stay on the current system.

next total redo of the tax system making it easier and simplier to read.

Yes, I can agree that you would want the tax system to be easier and 'simplier' to read. :doh

Snarky remarks aside, do you understand the economic importance of standardization in industry and business? It's crucial - standardization is one of the keys to success, in everything from 8.5x11 paper to the size of gas pump nozzles to limits on what can be carried on aircraft. Anyone in the least familiar with business should understand this instinctively.

Likewise, what do you think would happen if all fifty states set their own educational standards? "I'm sorry, Mr. Jones, but we in Kansas don't accept high-school diplomas from Montana - we disagree with the curriculum taught therein." Anyone who's ever experienced having to retake college courses because the new college you're going to doesn't recognize the courses you've already taken should understand precisely what I mean.

This is why we have NATIONAL standards, to make it easier for the graduates of schools in any particular state to be more readily accepted in other states.

 

[Jack Hays]

That we will. Certainly, if you cannot point to real economic damage that can be logically blamed on federal deficits. Because we all know that unemployment is damaging.

By the time debt/deficits produce high inflation the damage has already been done. As for unemployment, I believe most economists consider 4% unemployment optimal.

 

[ludin]

Yes, I can agree that you would want the tax system to be easier and 'simplier' to read. :doh

Snarky remarks aside, do you understand the economic importance of standardization in industry and business? It's crucial - standardization is one of the keys to success, in everything from 8.5x11 paper to the size of gas pump nozzles to limits on what can be carried on aircraft. Anyone in the least familiar with business should understand this instinctively.

Likewise, what do you think would happen if all fifty states set their own educational standards? "I'm sorry, Mr. Jones, but we in Kansas don't accept high-school diplomas from Montana - we disagree with the curriculum taught therein." Anyone who's ever experienced having to retake college courses because the new college you're going to doesn't recognize the courses you've already taken should understand precisely what I mean.

This is why we have NATIONAL standards, to make it easier for the graduates of schools in any particular state to be more readily accepted in other states.

You don't need a whole department that consumes 50b+ dollars in waste a year to do that. as an aside that is just waste.
you need about 10 people maybe 15.

the fact is there is government waste and the department of education is a waste of space.
the commerce clause prevents what you say from happening anyway.

that is the difference you think it takes a whole department and billions and billions of dollars. it doesn't.
yes the states know better how to educate their populace than Washington does.

 

[Glen Contrarian]

You don't need a whole department that consumes 50b+ dollars in waste a year to do that. as an aside that is just waste.
you need about 10 people maybe 15.

I suggest you go find out what the DOE does.

the fact is there is government waste and the department of education is a waste of space.
the commerce clause prevents what you say from happening anyway.

Yes, there's government waste - always has been, always will be. Thing is, ALL sizable organizations - government, public, private, business, religious, sports, whatever - have waste and fraud and abuse. Why do ALL sizable organizations have waste? Because they're full of HUMANS. What's more important to remember is that just because there is waste doesn't mean that organization has to go.

It's sorta like having a car: when you operate any car, not all the gas is used - some of it's wasted. Same goes for the oil. But just because there's some waste doesn't mean it's a bad car.

So it goes with governments and all other human organizations - just because there is waste doesn't make it bad. What's important is to MINIMIZE the waste that there is.

that is the difference you think it takes a whole department and billions and billions of dollars. it doesn't.
yes the states know better how to educate their populace than Washington does.

Mm-hmm, and so Texas and MS and several other states can get rid of the teaching of evolution and just teach creationism. What a wonderful example of how states know better than the feds....

 

[imagep]

Full employment or high inflation, whichever comes first.

Wouldn't those normally come at about the same time?

 

[imagep]

We'll have to disagree.

Why would you disagree with that?

 

[imagep]

By the time debt/deficits produce high inflation the damage has already been done.

What damage, and to who? And wouldn't a freeze on government deficit spending nearly instantly stop this damage that you speak of?

And do you believe that this damage is more damaging than people who desire to work not being able to find work?

As for unemployment, I believe most economists consider 4% unemployment optimal.

Yea, most economist consider the full employment rate to be around 4-5% unemployment, although in some countries, like Japan, that would still be considered high unemployment. I guess it's a cultural difference.

 

[Jack Hays]

Why would you disagree with that?

Please see #11.

 

[imagep]

Please see #11.

Please answer #16.

 

[Jack Hays]

What damage, and to who? And wouldn't a freeze on government deficit spending nearly instantly stop this damage that you speak of?

And do you believe that this damage is more damaging than people who desire to work not being able to find work?

No, I don't think a freeze on deficit spending would do anything except sow panic. Neither inflation nor unemployment is desirable, but the former causes more general problems.

1. [h=3]Costs of Inflation | Economics Help[/h]www.economicshelp.org › ... › Economic Essays on Inflation
   
   
   
2. When inflation is high people are uncertain what to spend their money on. Also, when inflation is high firms may be less willing to invest because they are uncertain about future profits and costs. This uncertainty and confusion can lead to lower rates of economic growth over the long term.
   
   
   
3. [h=3]The Costs of Inflation - Boundless[/h]www.boundless.com › ... › Defining, Measuring, and Assessing Inflation
   
   
   
   
4. In economics, a menu cost is the cost to a firm resulting from changing its prices. With high inflation, firms must change their prices often in order to keep up with ...
   
   
   
5. [h=3]Economic Costs of Inflation | Economy Watch[/h]www.economywatch.com/inflation/economic-costs.html
   
   
   
   The Economic Costs of Inflation deal with and measures the marginal costs of ... Disorder and improbability: With high inflation, the inhabitants of a country ...
   
   
   

 

[imagep]

No, I don't think a freeze on deficit spending would do anything except sow panic. Neither inflation nor unemployment is desirable, but the former causes more general problems.

1. [h=3]Costs of Inflation | Economics Help[/h]www.economicshelp.org › ... › Economic Essays on Inflation
   
   
   
2. When inflation is high people are uncertain what to spend their money on. Also, when inflation is high firms may be less willing to invest because they are uncertain about future profits and costs. This uncertainty and confusion can lead to lower rates of economic growth over the long term.
   
   
   
3. [h=3]The Costs of Inflation - Boundless[/h]www.boundless.com › ... › Defining, Measuring, and Assessing Inflation
   
   
   
   
4. In economics, a menu cost is the cost to a firm resulting from changing its prices. With high inflation, firms must change their prices often in order to keep up with ...
   
   
   
5. [h=3]Economic Costs of Inflation | Economy Watch[/h]www.economywatch.com/inflation/economic-costs.html
   
   
   
   The Economic Costs of Inflation deal with and measures the marginal costs of ... Disorder and improbability: With high inflation, the inhabitants of a country ...
   
   
   

For the unemployed, inflation doesn't really make a difference. It doesn't really matter what something costs, if ya aint got no money.

For the employed, inflation doesn't really matter either because when we have inflation, one of the things that goes up is wages.

The only people that inflation causes signficant damage to are those who hold large amount of cash. But that's their choice, no one forces another to make poor financial decisions. We all know that inflation exists, deal with it.

Anyhow, in theory inflation wouldn't be caused by government deficit spending util we got to the full employment level (whatever that is). So all a government has to do is to have a full employment policy, meaning that it will do whatever is needed to keep employment at around X%, and any inflation would be minimal.

If government deficit spending by itself was inflationary, then in 2009 we should have had record inflation. We didn't. Without looking it up, I seem to remember a couple or three negative inflationary quarters during that fiscal year.

Anytime that a theory is found to not match actual historic reality, it's time to seek a theory that fits the evidence better.

 

[Jack Hays]

For the unemployed, inflation doesn't really make a difference.

For the employed, inflation doesn't really matter either because when we have inflation, one of the things that goes up is wages.

The only people that inflation causes signficant damage to are those who hold large amount of cash. But that's their choice, no one forces another to make poor financial decisions. We all know that inflation exists, deal with it.

I disagree, and I think the links I provided support my view.

 

[Winchester]

Here is some straight talk about what we need to do to get our budget in order. Neither GWB nor BHO provided leadership in this area.

https://www.washingtonpost.com/opin...a82-11e5-93b7-5eddc056ad8a_story.html?hpid=z3


A recent Congressional Budget Office report, “The 2015 Long-Term Budget Outlook,” reminds us that the federal government is slowly becoming an agency for taking care of the elderly. Almost everything else is being crowded out. We ignored that during the Obama presidency, and now it seems that the fledgling presidential campaign may do likewise. Hillary Clinton and other Democrats plug fairer economic growth. Jeb Bush and other Republicans are more forthcoming (they talk about raising Social Security’s eligibility age) but concentrate their rhetoric on creating faster economic growth.
Government’s central reality has gone missing. There’s a bipartisan triumph of political expedience over professed beliefs. Liberals shrink many domestic programs, because they won’t acknowledge that unchecked spending on the elderly is partially financed by curbing other activities — from food stamps to highway repairs. Conservatives weaken defense, because they won’t concede that, even with cuts to domestic spending (including the elderly), an adequate military cannot be financed without additional taxes. . . .

Wait... I thought Obama was trying to get some death panels in place.

 

[Fenton]

That we will. Certainly, if you cannot point to real economic damage that can be logically blamed on federal deficits. Because we all know that unemployment is damaging.

Wow......Greece, Spain, Venezuela, Japan, Argentina...Lol.

Really ? What's its called when your'e so ideological loyal you ignore reality ?

 

[MTAtech]

What Samuelson is doing is blaming seniors for deficits. Of course, the major cause of our debt is tax-cuts that turned surpluses into deficits. Had we just not lowered taxes in the 2000s, the budget would balanced and the debt paid. We'd have much more had we kept the tax-rates that we had under Reagan.

 

[Fenton]

Mass Delusion among Greece

Good article. Mass delusion indeed. Syrzia's solution for the consequence of years of unsustainable deficit spending is for Greece to keep spending.

And on Public Sector jobs no less.

It would appear that the longer a Nation suffers economically, the more receptive their citizens are to destructive fringe concepts.

A large percentage of Syrzia's supporters are avowed Marxist.

In America Bernie Sanders is gaining steam. Desperation breeds envy and hatred and apparently naivete and unfortunately there are Politicians who will use that to gain power.