And Now, An Update From Reality

As we head towards either the completely unforced self-immolation of default, or the almost as self-defeating response of belt tightening amidst a recession, it’s worth taking yet one more swing at the piñata:  does the US have a debt/deficit crisis?

There are lots of ways to say “no.”

Here’s Kthug, debunking yet again the myth of out-of-control federal spending.  DeLong reminds us  (yet again)that the bond market thinks our debt is nothing to write home about.  Karl Smith reminds us that the US is borrowing money at a rate that amounts to a negative real return — which is to say that right now it is cheaper for the US to borrow than to pay cash for what it buys.

Now, via Zachary Karabell writing at Time.com, we learn of a new way to parse the blunt truth:  we have real policy challenges facing us — mostly how to get sufficienthell, any — growth going in the economy that could lead to actually getting our fellow citizens back into paying jobs.  But what we don’t have is an unsustainable debt burden, as revealed by perhaps the most direct metric of all:  how much it costs us as a percentage of GDP to service the supposedly unprecedented, unsustainable flood of red ink in which the United States is (not) drowning:

…what matters about the debt isn’t the dollar amount per se, but how much it costs us to service it. And by that measure, the debt isn’t nearly as big a problem as it’s being made out to be.

Yes, the federal debt has grown by nearly $3 trillion dollars in the past three years. And yes, the dollar amount of that debt is quite large (in excess of $14 trillion and headed toward $15 trillion should the ceiling be raised). But large numbers are not the problem. The U.S. has a large economy (slightly larger than that debt number). And, crucially, we have very low interest rates.

Because of those low rates, the amount the U.S. government pays to service its debt is, relative to the size of the economy, less than it was paying throughout the boom years of the 1980s and 1990s and for most of the last decade. The Congressional Budget Office estimates that net interest on the debt (which is what the government pays to service it) would be $225 billion for fiscal year 2011. The latest figures put that a bit higher, so let’s call it $250 billion. That’s about 1.6% of American output, which is lower than at any point since the 1970s – except for 2003 through 2005, when it was closer to 1.4%.

Under Ronald Reagan, the first George Bush, and Bill Clinton, payments on federal debt often got above 3% of GDP. Under Bush the second, payments were about where they are now. Yet suddenly, we are in a near collective hysteria.

Yup…for a debt burden that in budgetary terms is about half of what Saint Ronnie dealt with, we are now contemplating dismantling the safety net and gutting the investment in education, research and infrastructure that are essential for any future economic security for our country and our kids.

The good news is that this comes from an unequivocally MSM source.  The bad news is that the Village, for the most part, has failed to convey to the American people that what we are seeing is simply the smokescreen the GOP is using to hide its pursuit of policies that it could never sustain in the full light of day.  Too much of our government has fallen into the hands of fools and knaves.  And the press — not enough of it, even now — has left it way too late to confront that fact.

And yes, as Karabell and the others have noted, the Democrats have either gone along with too much of this nonsense, or else mounted ineffective opposition to the folly, avarice and/or pure stupidity of their opponents.  But consider the alternative — and, it seems to me, we gotta work, however resentfully, as hard as it takes to hold what we have and to grab the House back fifteen months from now.  “Not that bad” may be cold comfort…but your modern GOP is terrifyingly worse.

Image:  Jacques de Gheyn (II), Vanitas Still Life, 1603.






152 replies
  1. 1
    General Stuck says:

    But what we don’t have is an unsustainable debt burden, as revealed by perhaps the most direct metric of all: how much it costs us as a percentage of GDP to service the supposedly unprecedented, unsustainable flood of red ink in which the United States is (not) drowning:

    Yeah yeah yeah, But the wingnuts have a plan to fix that problem. With default, and increasing that debt servicing to a level they won’t have to lie about when screaming about poor people getting food stamps tax and spend liberals destroying the country with deficit spending by a Kenyan soshulist.

    And never you mind that the trillions of deficit spending by George Bush and his wingnut kapos, was really freedom loans from the Chinese and others. None of it paid for, and never mind dems have used pay go for what they have spent. Just another commie plot to fool us all with.

  2. 2

    Even the most uneducated yokel understands that borrowing 42 cents for every dollar spent is a recipe for bankruptcy. An educated yokel can grasp that entitlement spending on Baby Boomers will swamp the entire U.S. economy.

    Your “oh, but the minimum payments on my credit card aren’t so bad” is just so much whistling past the Federal Reserve.

    Well, off to bed for me! I need to wake up early so I can review the Senate’s and the President’s debt reduction plans.

  3. 3
    Mark S. says:

    It’s all pure insanity. But bossbitch and OzoneR will soon be here to tell us the votes were never there to do anything different and hippies suck.

    Seriously, when did knowing anything about economics turn one into a hippie? Strange days.

  4. 4
    gwangung says:

    Seriously, when did knowing anything about economics turn one into a hippie?

    The point may be that it’s not knowledge about economics, but lack of political wherewithal.

  5. 5
    Violet says:

    From the quote:

    Under Ronald Reagan, the first George Bush, and Bill Clinton, payments on federal debt often got above 3% of GDP. Under Bush the second, payments were about where they are now. Yet suddenly, we are in a near collective hysteria.

    The hysteria is whipped up by the Tea Party, who didn’t care one bit about debt when Bush was President. Which means it’s not about debt, it’s about something else. Black, Kenyan usurper in the White House? Couldn’t be that, could it?

  6. 6
    burnspbesq says:

    @Eric Lindholm:

    Even the most uneducated yokel understands that borrowing 42 cents for every dollar spent is a recipe for bankruptcy. An educated yokel can grasp that entitlement spending on Baby Boomers will swamp the entire U.S. economy.

    Economic illiteracy is an ugly thing. You have no fucking clue how wrong you are.

    ETA: The Scandinavian countries have tax burdens roughly two-and-a-half to three times what we have, measured as a percentage of GDP, and they have thriving market-based economies and robust social safety nets. Care to explain that?

  7. 7

    I got sucked into an argument with Tea Partiers on my Congressman’s Facebook page who simply Can. Not. Grasp that not raising the debt ceiling means not paying bills that have already been incurred. I linked them to this column co-authored by the CEOs of the Chamber of Commerce and Financial Services Forum, and they said “the person who wrote that is misinformed.” I asked where they got their information, and nobody answered. And these are the relatively intelligent and reasonable ones, who write reasonably well and don’t scream abuse.

    It’s really terrifying. How do you talk to people with whom there is no agreed-upon basis of reality?

  8. 8
    opie jeanne says:

    @ Eric Lindholm:

    “An educated yokel can grasp that entitlement spending on Baby Boomers will swamp the entire U.S. economy.”

    Getting a little tired of being beaten up for being part of a specific demographic; it’s like being told by the youngsters to “go off and die already, gramma!”

    You want us to just accept that the money we paid into those trust funds known as Social Security and Medicare, should be spent on other stuff because the Republicans don’t like entitlements?

    The definition of entitlement, according to Merriam Webster:

    1:a : the state or condition of being entitled : right
    b : a right to benefits specified especially by law or contract

  9. 9
    aisce says:

    @ burnspesq

    they don’t have to tie their economy and government in knots to make sure wealth doesn’t actually find its way into the hands of black people?

    that’s really all it comes down to. it’s all it’s ever come down to in this country’s history. we know how to design a society where prosperity is more broadly shared and thus, inherently more stable. it’s that “broader” part we can’t stomach.

  10. 10
    jwb says:

    burnspbesq: I agree with your assessment of EL, but the statement that “even the most uneducated yokel understands that borrowing 42 cents for every dollar spent is a recipe for bankruptcy” is probably a pretty fair representation of how that uneducated yokel understands the situation, with the added fun that debt in considered an inherent vice.

  11. 11
    sfinny says:

    While I find the Government Budget=Family Budget analogies annoying, the whole ‘debt crisis’ argument can be easily rebutted. Say I make $50,000 a year and have a mortgage of $50,000. That actually is a very manageable situation. So a national debt that is 100% of GDP doesn’t seem so scary.

  12. 12

    “Economic illiteracy is an ugly thing. You have no fucking clue how wrong you are.”

    Well, I can’t argue with that incisive reasoning. Sorry for my comments!

    Pursuant to your latter point: these tax rates in Scandinavia are spread more equally throughout the populace so everybody has an interest in the efficiency of government. Here in the U.S.A. – land of crazy Teabaggers – nearly 50% of Americans pay no federal income tax.

    So then a question: would you support “shared sacrifice” if it meant everybody paid, say, 2% more in taxes? Or should we just play the class warfare card and demonize those “corporate jet owners” who already pay for a quarter of all taxes?

  13. 13
    Non-Existent Patricia says:

    Why don’t we let the market decide? Are people still willing to buy US Treasury bonds at low interest rates? Then, we don’t have a debt problem.

  14. 14
    dww44 says:

    But consider the alternative—and, it seems to me, we gotta work, however resentfully, as hard as it takes to hold what we have and to grab the House back fifteen months from now. “Not that bad” may be cold comfort…but your modern GOP is terrifyingly worse

    This is exactly what I’ve been thinking. My working won’t be resentful. We have to display the sort of unity we witness from the Republicans, as the only solution is to vote them out. It’s gonna be hard.

    Just remember that close to a majority of folks don’t tune in closely and them that does are Fox watching/Limbaugh listening addicts. Seriously, I have relatives who have lost their mind because they don’t think the debt ceiling is any big deal and, after all, you know, that’s what Obama deserves cause he created this debt all by himself. They do not even listen to logic anymore and now McConnell is going to filibuster. Time for Obama to go to a fall back plan and take some unilateral action.

    Listened to NPR all the way home late afternoon on a 75 mile drive. They had 2 conservatives on for every 1 liberal. It’s like when Dems hold the Presidency, the air time is given over to the Repubs. Even all the Wall Street guys keep talking about disfunctional Washington. None of them have the guts to lay the blame where it truly belongs.

    Do you suppose that out of all this that Obama just might have realized that Republicans are NEVER going to give him any sort of victory? They don’t hate him for his policies, they hate him because he is who he is.

    Is this how the American century ends? Not with a whimper, but with a great big stupid bang?

  15. 15

    @burnspbesq: Shush, Eric is a manly man, who has no need for such things. He is the Viking Pundit.

  16. 16
    gwangung says:

    Pursuant to your latter point: these tax rates in Scandinavia are spread more equally throughout the populace so everybody has an interest in the efficiency of government. Here in the U.S.A. – land of crazy Teabaggers – nearly 50% of Americans pay no federal income tax.

    Economic illiteracy is an ugly thing. But you seem to exhibit it at the slightest encouragement.

    One item that argues against your rhetoric. is that wealth distribution is much more concentrated. if 1% holds 99% of the wealth, then they WILL pay most of the taxes

  17. 17
    Non-Existent Patricia says:

    @Eric Lindholm @12

    OK, sure I’ll play your game. I’ll submit to the “shared sacrifice” of those countries if the wealthy will submit to the wealth distribution of those countries.

    ETA: Or what gwangung said.

  18. 18

    @Non-Existent Patricia: I’ll see this comment, and raise you a broccoli mandate repudiation.

  19. 19
    jinxtigr says:

    Yup. Let’s see the same wealth distribution. What we’ve got here is not productive.

  20. 20

    @TooManyJens:
    Hah. I’ll top you all by refudiating Lenin, Trotsky, and Stalin!

  21. 21
    Jager says:

    Galtian venture capitalists will loan money at 15 to 20% times cash flow, care to figure that ratio out against the US economy? Better yet, try to explain it to a congressman.
    I’ve worked with funds that were seeded with 200 million dollars and all they ever did was borrow at bank rates against it, never touched the cash. That’s how Romney made his money for fuck’s sake!

  22. 22
    jwb says:

    Eric Lindholm: Seems to me the man has never studied a US paycheck stub.

  23. 23
    eemom says:

    for a debt burden that in budgetary terms is about half of what Saint Ronnie dealt with, we are now contemplating dismantling the safety net and gutting the investment in education, research and infrastructure that are essential for any future economic security for our country and our kids.

    but the “debt burden” is NOT why “we” are contemplating such dismantling and gutting. Surely you know that.

    “We” are contemplating those things because “we” are a nation ruled by the few, drunk with greed and devoid of humanity — enabled by the contemptible, rock-stupid ignorance of the many.

  24. 24
    Villago Delenda Est says:

    This entire charade, from 4 Nov 2008 on, has been about getting the usurper–the near usurper–out of the GOP’s private property, 1600 Pennsylvania Ave.

    All along, that’s what it’s been about.

  25. 25
    Delia says:

    Well, everybody’s already pointed the problem of our wealth distribution to the teabagger with the Swedish name.

    I’ll just say that Tom is right. We don’t have an economic problem. We have a mental illness problem. We seem to live in a society that’s gone insane and I don’t know what can be done for that.

    I was looking for Dylan and The Band’s version of Too Much of Nothin but this was the best I could find. Anyhow, it’s the song I’m thinking of tonight.

  26. 26
    Jager says:

    Two bourbons on the rocks an I stuck a percentage sign in my comment…I’ll revise it after I have the 4th

  27. 27
    Non-Existent Patricia says:

    @eemom: sic semper erat, et sic semper erit

  28. 28
    Violet says:

    @dww44:

    We have to display the sort of unity we witness from the Republicans

    You mean like the unity they showed this week in the House? How they all just fell in line behind Boehner and did as they were told?

    See, I think the script is actually flipping. It used to be that “Democrats fall in love, Republicans fall in line.” But these days Republican unity is not what it used to be, while Nancy Smash had 100% of her Dems falling in line. Harry Reid knew he could count on his Dems to be disciplined enough not to pass the House bill. The Dems may not be as disciplined as Republicans of old, but they seem to be better than they were.

  29. 29
    FlipYrWhig says:

    @ sfinny : There are plenty of people who make $50K a year, owe $200K on their mortgage, $10K on their credit cards, and $10K on their car, and managing to pay their bills… through the magic of monthly payments over time.

    And some of them are probably tea partiers, upset that the government owes too much money and should really handle its budget more like a prudent taxpayer does.

  30. 30
    Little Boots says:

    there is a kind of conservative that loves to quote Whittaker Chambers: What makes you think the West is worth saving?

    I’m starting to see what they mean, though not as they mean it.

  31. 31
    opie jeanne says:

    I’m gonna go look for an ice floe.

    Too bad for his Baby Boomer parents, who paid into those programs all of their lives. Do you suppose he tells them they are a burden on the rest of society?

  32. 32

    I know numbers scare you guys but here’s something to chew on: if you set an income tax of 100% of the “rich” (everybody earning >$500,000) it would bring in an extra $1.3 trillion in taxes, although I doubt the “rich” would keep on working at a seizure rate of 100%.

    The current yearly deficit, just what we’re OVERspending is $1.6 trillion/year. So even if we dunned those awful heart surgeons for all their cash, there wouldn’t be enough to pay off just what we’re borrowing.

    You want to couch this debate in moral terms. Well, personally, I think it’s a travesty to pass this untold debt onto future generations and younger workers. I think it’s a crime to doom our children to a lower standard of living by adding thousands of new debt onto the national credit card.

    But, hey, if you want Scandinavian levels of taxation and income redistribution, then let the Democrats propose it and let Obama sign it into law. But they don’t, either out of cowardice or a crazy realization that it won’t fly here in America. I guess that’s why the Democrats in the Senate haven’t passed a budget in over 800 days in violation of federal law.

  33. 33
    Little Boots says:

    define “working” eric. por favor.

  34. 34
    jwb says:

    Jager: Yes, but if you took the US debt in $1 bills and piled them up it would reach to the moon and back twice, or you could make $20 million dollars every day since Baby Jeebus walked the earth and still not be able to pay down the debt. Tell how do you argue against such vivid but contextually nonsensical statements?

  35. 35
    opie jeanne says:

    Eric, I don’t think numbers scare Mr Levinson at all.

  36. 36
    jwb says:

    EL: Got your training on how to cherry pick numbers from Heritage, I see.

  37. 37
    Non-Existent Patricia says:

    @Eric Lindhom @33: Name the 20 richest people in the US and how they “earn” their money. Most of their “earnings” are not subject to the income tax.

    ETA: And I guess it would be silly to get into a discussion of marginal tax rates and how they fucking work.

  38. 38
    Little Boots says:

    so, let’s say, just for fun, everything over 1 million dollars is taken by the government, just this once. national emergency and all that. are you saying that nobody will ever work again? cause I think most people will hardly notice, and a few people will get over the terrible, terrible pain of only being millionaires and not multimillionaires or billionaires and then get back to doing whatever probably fun job they were doing before, assuming they were doing anything besides just collecting dividend checks.

  39. 39

    @Eric Lindholm:

    The current yearly deficit, just what we’re OVERspending is $1.6 trillion/year. So even if we dunned those awful heart surgeons for all their cash, there wouldn’t be enough to pay off just what we’re borrowing.

    It’s too bad that your GOP pals ran up so much debt in the 2000s with their wars and tax cuts, then. If they hadn’t, we’d be in a much better position to be able to afford deficit spending in a recession/slow recovery. Contractionary policy isn’t going to get us out of this bad economy any faster, and the bad economy is one of the big drivers of the debt. People who don’t have jobs can’t pay income taxes.

  40. 40
    gwangung says:

    I know numbers scare you guys

    This is from someone whose grasp on wealth distribution around the world is a bit weak.

    This is also from someone whose monomaniacal focus on a specific tactics is blinding him to alternatives.

  41. 41
    JPK says:

    @Eric Lindholm:

    You want to couch this debate in moral terms. Well, personally, I think it’s a travesty to pass this untold debt onto future generations and younger workers. I think it’s a crime to doom our children to a lower standard of living by adding thousands of new debt onto the national credit card.

    My problem with these arguments is you were never making them eight years ago when most of this debt was being run up and your objections might have carried some weight in your own party. Or maybe you can point to some of your statements expressing such a level of concern then?

    You’re just an opportunist, politically motivated.

  42. 42

    Opie Jeanne – The average retiree receives much more of what he/she paid in taxes even adjusting for interest and inflation. A typical 65+ person receives over $26,000 in benefits (SS + Medicare) from the government every year.

    Younger workers are going to pay into these programs until the moment they go bankrupt in 2020 and 2037 (if memory serves). I wonder how you feel about THOSE workers paying into the system “all their lives” only to see their benefits disappear?

  43. 43
    Little Boots says:

    you know what’s really funny about the conservatards. we are actually trying to save them from madame defarge and the guillotine. but they are determined to march up those steps and put their heads in the circle.

    okay, it’s just funny to me. but really. they are so determined to push this whole thing to its only logical conclusion.

  44. 44
    jwb says:

    I wonder if EL is part of the long promised troll upgrade package. And if that is the case, maybe the reply button will be returning as well.

  45. 45
    jwb says:

    Little Boots: It would be great to watch if we didn’t have to live it.

  46. 46
    Little Boots says:

    eric, nobody’s benefits need to “disappear.” that is purely voluntary, on the part of Republicans. be honest, bitch, you just hate the idea of anyone helping anyone. you don’t actually give a shit about those poor, poor workers cheated out of their hard earned money, don’t ya?

  47. 47

    Patricia: “Name the 20 richest people in the US and how they “earn” their money.”

    Let me relate a story: several years ago I was at a technical conference where a guy was giving a presentation about a blood monitoring system that would dramatically increase the screening rates for AIDS in sub-Saharan Africa. At the end of his presentation, it was revealed that his research was funded by the Bill Gates Foundation.

    So here’s the deal: Bill Gates dropped out of Harvard to form a company that has provided untold jobs and riches to thousands of people, and also made him a rich man to pay taxes and still fund worthy causes. Read the history of how Jonas Salk discovered the polio vaccine. (Hint: it wasn’t from a government grant).

    It’s fun and oh-so-satisfying to vilify those awful “rich” but they’re the ones taking the chances and providing the jobs.

    But if you want to tax them at 100% and seize their wealth, well, have at it.

  48. 48

    Too Many Jens: “It’s too bad that your GOP pals ran up so much debt in the 2000s with their wars and tax cuts, then. If they hadn’t, we’d be in a much better position to be able to afford deficit spending in a recession/slow recovery.”

    Would that include the surge in Iraq that Obama initiated or the war in Libya he started? Would it include the Bush tax cuts he just extended? As you know, I get confused by little details like that.

  49. 49
    Belafon (formerly anonevent) says:

    @Eric Lindholm:

    You want to couch this debate in moral terms. Well, personally, I think it’s a travesty to pass this untold debt onto future generations and younger workers.

    I personally think it’s a travesty to force young people to pay for their own secondary school and college, and the fact that we are going to force them to pay for the infrastructure – roads, bridges, water and sewer systems – that we have failed to properly maintain because it might cost some wealthy people a few extra bucks out of their undertaxed stock earnings. This whole needing to do fund-raisers in order to pay for school supplies just to get a minimal education is crap.

  50. 50
    Little Boots says:

    and yet, jwb, you and I would actually hate that, I suspect, and try to stop it. that it what is nuts. we actually do care about the erics of this world. maybe we shouldn’t but I just know we do. and would actually like to save them from themselves. that is what is so fucked up about this whole thing these days.

  51. 51
    Non-Existent Patricia says:

    @Eric Lindholm @49: What is Bill Gates’ salary and how is he funding the Gates Foundation?

  52. 52
    Belafon (formerly anonevent) says:

    @Eric Lindholm: For a war that Bush started, and tax cuts extended in order to keep helping the unemployed, or did you conveniently forget about that. Another one of those Republican hostage taking strategies.

    I love people who never quite got how to do two step math problems.

  53. 53
    Non-Existent Patricia says:

    @Belafon @55: Hell, I’m not sure he ever mastered simple addition.

  54. 54
    The Sheriff's A Ni- says:

    The signal to troll ratio continues to increase the closer we get to Gotterdammerung. The trolls find themselves faced with their worst fears – the American people discovering just what ‘living within your means’ truly means – and start to flop sweat, yet much like a German officer in 1914 still unable to turn away from their march of folly. Its even more entertaining than watching the GOP collectively lose its shit after November 2008.

  55. 55
    Little Boots says:

    goddam, I hope so, sheriff. we have an enormous opportunity in wisconsin to deliver a massive fuck you to the assholes that be. I really hope we take advantage of it. we’ll know in just a few weeks.

  56. 56
    Quincy says:

    @Eric Lindholm: I loooooove the future generations argument. Think of our kids and grandkids! How can we leave them so much debt? You refuse to tax yourself enough to pay for your own wars, health care, roads, social security, border patrol, etc. So your solution is to pay for all of that stuff by eliminating medicare and social security for your kids (The Ryan plan). But you’re doing it for them! Because you care!

  57. 57

    Class warfare and profanity.

    It’s like boxing with hobbits here.

    OK, kiddies, I’m out of cheap wine so you can call me names until morning.

  58. 58
    opie jeanne says:

    Lindholm, Bill Gates and his father sponsored a state income tax in Washington, which currently has none. It would have only affected people earning above $250k per year, and only that part above that amount.

    Gates is more than willing to pay more in taxes and has said so.

  59. 59
    Non-Existent Patricia says:

    @efgoldman @58: So, you’re telling me, humans didn’t ride dinosaurs? My mind, it is blown.

  60. 60
    Little Boots says:

    yes, we are. there is a huge effort, and it is awesome.

  61. 61
    jwb says:

    EL: I know! I know! The favorite argument by anecdote. Impressive.

    Cocksure, aggressive tone; mysterious, slightly exotic background; cherry-picking lying with statistics; able to deploy argument by anecdote—this troll comes fully equipped. John seems to have put real money into this troll.

  62. 62
    opie jeanne says:

    No, Eric, for us it’s like talking to a person with their fingers in their ears who keeps singing “LALALALALACAN’THEARYOU”.

  63. 63
    jwb says:

    EL: Five point penalty for rightwing troll deploying firebagger talking point.

  64. 64
    opie jeanne says:

    Where your Social Security tax dollars go
    When you work, 85 cents of every Social Security tax dollar you pay goes to a trust fund that pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. The other 15 cents goes to a trust fund that pays benefits to people with disabilities and their families.

    From these trust funds, Social Security also pays the costs of managing the Social Security programs. The Social Security Administration is one of the most efficient agencies in the federal government, and we are working to make it better every day. Of each Social Security tax dollar you pay, we spend less than one penny to manage the program.

    The entire amount of taxes you pay for Medicare goes to a trust fund that pays for some of the costs of hospital and related care of all Medicare beneficiaries. Medicare is managed by the Centers for Medicare & Medicaid Services, not Social Security.

  65. 65
    Non-Existent Patricia says:

    And profanity was used! To the fainting couch!

  66. 66
    opie jeanne says:

    Not understanding how a trust fund operates is really premium.

    Not understanding that $26k is not exactly a princely sum: priceless.

    With Eric it’s really a matter of “I’ve got mine, etc,”

  67. 67

    Note to self: last post #60.
    Post #61 cited income tax initiative voted down in Washington State.
    Post #65 questions my background, easily confirmed via Google.

  68. 68
    opie jeanne says:

    Yes, the income initiative was voted down by people OTHER THAN BILL GATES. How is this relevant to your previous comments?

  69. 69
    Monkey Business says:

    So, we have the National Debt, all $14 trillion of it. Our goal, as a nation, should be reducing that to zero, at some point. I think we can all agree on that, right?

    Now, how do you reduce a debt like that? You have to pay it down. That means money has to come from somewhere. You can’t cut your way to freedom, and you can’t tax your way there either. You have to attack it from both sides.

    You can eliminate all the discretionary spending in the budget, and we’re still running a deficit, so let’s throw that out as a non-starter. Also, that tends to be the most helpful and useful stuff to the economy as a whole, but never mind that.

    To bring the deficit under control, you have to look at Defense, Social Security, and Medicare/Medicaid.

    Social Security can be fixed by eliminating the income tax cap. You can fund it in perpetuity by taxing all of a person’s income. This would affect maybe one in ten Americans, if not less.

    Defense is tricky, because we obviously need defense. However, the Department of Defense is bloated, and needs an army of auditors to pour over their books to determine how much we can save just through efficiency, like not building a goddamn airplane in 48 states, and through eliminating grift. I’d be willing to bet you could slash a quarter to a half of defense spending without seriously affecting our national security.

    So, that leaves Medicare and Medicaid. The costs in these programs is primarily driven by a healthcare system that values reimbursement over actual healthcare. We spend a fortune on end of life care that, in many cases, only delays the inevitable by days or weeks. Now, we can completely nationalize healthcare and go full on single payer, but I don’t think that is going to happen in our lifetimes. The public option here would reduce overall healthcare costs significantly by forcing insurance companies to be as efficient as Medicare, which is the most efficient insurer in America. Also, end of life counseling and investment in preventative care would help, as that would reduce both end of life costs and emergency costs, two of the larger costs in American healthcare.

    While we’re at it, let’s draw down the wars in Iraq and Afghanistan, and eliminate the Bush Tax Cuts. All of them, for every income level. Lets expand the SEC and IRS to go after corporate tax cheats that incorporate offshore and don’t pay a time in taxes. Let’s eliminate subsidies for dirty energy companies and programs like ethanol that just don’t work. Let’s create an infrastructure bank to replace roads, bridges, hospitals, schools; really everything that needs fixing in this country. That, by the way, would put a lot of Americans back to work, and working Americans pay taxes. That, by the way, is how you expand the tax base. For shits and giggles, let’s legalize, tax, and regulate marijuana and provide illegal immigrants a path to tax paying citizenship.

    You want to fix the budget and federal deficit? Okay. There’s your blueprint. That’s how you do it. The solutions are six inches in front of our collective faces but we refuse to see them.

  70. 70
    Little Boots says:

    oh, eric, you don’t actually give a shit about any of this do you? it’s all about having money, loving money, screwing every one else, isn’t it? just admit it. that’s the first step toward the healing.

  71. 71
    Non-Existent Patricia says:

    Note to Eric, still waiting to hear what Bill Gates’ salary is and how he funds the Gates Foundation. For extra credit, an explanation of marginal tax rates and how they work.

  72. 72
    Non-Existent Patricia says:

    @MonkeyBusinees @74: Yes, we need defense, but do we need so much offense? And at some point, you can cut spending so bare bones you’re actually reducing receipts, which at best leaves to at square one.

  73. 73
    opie jeanne says:

    Non-Existent Patricia, He lives right down the road from me, so should I go ring his doorbell and ask him?

    (I wouldn’t get past the front gates…. oh wait, I do know someone who could possibly get me past them but whether he’s home at this time of year is a good question.)

  74. 74
    Non-Existent Patricia says:

    @Little Boots @75: You have to admit, though, that “Fuck you, I’ve got mine,” is a compelling world-view.

  75. 75
    jwb says:

    Little Boots: I was actually thinking in terms of fiction. The current situation has many elements of a good scenario for a book or film, half farce, half tragedy. That’s what I meant by it being interesting to watch. But it’s no fun in real life, and, yes, I worry about what will happen to everyone. I especially worry whether the teabaggers will be able to come to terms with their guilt if they do manage to run the country into the ground.

  76. 76
    Non-Existent Patricia says:

    @opie jeanne @78: I appreciate the willingness to put in the effort, but it was more a mental exercise homework assignment for our dear friend Eric (bless his heart). Apparently, he’s more of the physical exercise type (what with all the gymnastics he was doing).

  77. 77
    opie jeanne says:

    Monkey Business:
    “….Also, end of life counseling and investment in preventative care would help, as that would reduce both end of life costs and emergency costs, two of the larger costs in American healthcare….”

    But but but DEATH PANELS!!!1!

    Yeah, we were glad to have “end of life” counseling when Mom was dying a few years go, and Mom helped guide us by having an Advance Directive/Living Will because she was in a coma and not going to wake up before she got to heaven.

  78. 78
    Stillwater says:

    And yes, as Karabell and the others have noted, the Democrats have either gone along with too much of this nonsense, or else mounted ineffective opposition to the folly, avarice and/or pure stupidity of their opponents.

    Well, they’ve gone along with the nonsense to some degree, of course, but I’m not sure they had much choice in the matter. And I’m not sure you’ve exhausted all the options in the above dichotomy. I think a third choice is that the Dems gave the GOP just enough rope to hang themselves, that is, the Dems put forward a bill that was at the lowest threshold they could tolerate and vote for, all the while believing that the TP would reject it anyway. Politically, everyone takes a beating. But the Dems will come out of this looking better. Remember, when Reid introduced his bill, it was received as a huge concession to the TP and a bill they ought to support.

    You heard it here first.

  79. 79
    opie jeanne says:

    @ 81 Non-existent Patricia, glad you realized I meant Bill Gates and not EL, bless his heart.

  80. 80
    opie jeanne says:

    I’m sorry, but Karabell respells itself to Clarabell in my head. It’s late.

  81. 81
    Little Boots says:

    i actually do too, jwb, not so much the psychological come to jesus moment crap, but what happens when teabaggers do actually get that they really fucked up. they will have to blame somebody else for their fucking bullshit. it’s the only way. and then, well, it won’t be pretty.

    and again, you and I and a lot of people on this thread will be trying to make it better, which will only make them more insanely, ridiculously angry. it is all so fucked.

  82. 82
    Non-Existent Patricia says:

    @ opie jeanne @84: I assumed if you lived down the street from our dear friend Eric (bless his heart) you would have already dropped some knowledge on his ass.

  83. 83
    Non-Existent Patricia says:

    @Little Boots @86: Yes, we are all enablers. Its the price you pay for having basic human decency.

  84. 84
  85. 85
    Little Boots says:

    and I’m not sure there’s an answer.

  86. 86
    Little Boots says:

    exactly patricia, and it’s a good thing, but it’s still so fucked.

  87. 87
    eemom says:

    you know what’s really funny about the conservatards. we are actually trying to save them from madame defarge and the guillotine. but they are determined to march up those steps and put their heads in the circle.

    would that it were true.

    No, sadly, these human scum are all too well aware that the grotesque mass of doped up, moronic self-delusion that is the American electorate will never get its shit together like the French and other revolutionaries did.

  88. 88
    Chris T. says:

    “How to fix it” is actually pretty obvious. Here’s a simple four-step method, ordered by “amount saved”.

    Step 1: cut “tax expenditures”. Probably the most important is treating dividends and capital gains as ordinary income. The mortgage deduction might have to go as well.

    This step saves somewhere between $300 and $1000 billion a year now (depending on which of these you cut and how much).

    Step 2, soçialized medicine. This cuts Medicare expenses roughly in half, and by getting rid of the huge (roughly 30%) hidden tax of private insurance on working individuals and families (who mostly get health insurance through employers), cuts their medical expenses by about 65%. (Something over half the savings goes to the business, though, depending on medical plan.)

    This step saves roughly $400 billion a year now (by improving medical care while cutting the dollars expended in half).

    Step 3 (if needed): restore the Clinton-era tax rates. Note that we are already at $1.4 trillion a year, if you go whole hog on step 1, so we have already solved the entire deficit, and have started paying down the debt. Raising the marginal tax rates adds roughly $400 billion a year (I didn’t look this one up so I might be wrong), so let’s say we’re now at $1.8 trillion per year.

    Step 4 (as appropriate): shrink the military budget. Savings range from $100 to $400 billion a year depending on the achieved shrinkage. Let’s use the high end of this number too; we’re now at $2.2 trillion a year.

    Subtract the current 1.3T deficit from 2.2T; this gives us a debt paydown rate of 0.9T/yr. Even without any improvement in the economy (which is quite likely within another 7 or so years) and we pay off the entire debt by 2027. (Well, not really, because this again uses a linear projection for medical expenses, which are going to grow even with Step 2 in place. However, the economic recovery and boom will help more, and the actual payoff would happen sooner.)

    (PS: “simple” does not mean “easy”, or even “has a snowball’s chance in Hell of ever occurring”. It’s just “simple”, that’s all.)

  89. 89
    Little Boots says:

    but politically, chris t, how does any of that really sensible stuff ever happen?

  90. 90
    Non-Existent Patricia says:

    @eemom @92: I see it slightly differently. They think they’re putting our heads in the circle, they just don’t realize they’re one of us.

    Edited to correct a typo.

  91. 91

    i really don’t get why anyone is blaming the dems for putting a deal on the table the gop had to refuse, as a matter of politics.

    they are after all, playing politics with the debt ceiling in the first place. they were not going to go along with a harder stance, the only win for the dems is to convince the amazing ever illusive middle, that the gop is that hard bitten, that the gop is more than the customary half to blame for the overall problem of governing through this mess.

    there is no win on the issue of taxes vs spending policy wise because that was never really in play, this is and always has been pure politics.

  92. 92
    jwb says:

    I thought for sure that EL was DougJ trolling us until this, which makes me think he’s confused about how the numbering changes when a comment comes out of moderation.

  93. 93
    opie jeanne says:

    Non-Existent Patricia:

    Possibly, but where I live now it’s a sea of wealthy white Republicans who spout nonsense barely indistinguishable from EL’s, bless his heart, so it’s an uphill battle. I had to stop going to the neighbor ladies’ monthly coffee klatch or risk biting my tongue right off. I have my work cut out for me.

    On the other hand, the local tea party is having a very difficult time getting anyone interested in attending their meetings, and they’re holding them in the public library. Soshulism!

    You did know that I have been registered as a Republican all of my life, but I saw the light when St Ronnie ran for Prez; we knew him quite well in California and were a bit startled by the 180 he did on so many key issues when he announced his candidacy. Over the years I noticed that it became harder and harder to find Republicans that I considered to be sane and honest. Had a couple of state assemblymen and senators that we liked but who were outspent by what we considered crazies back then, hard-liners and “bomb-throwers” (see Curt Pringle, who was their leader in Sacto at one time). No wonder nothing got done.

  94. 94
    Little Boots says:

    that would be so funny, jwb, now I’m kinda disappointed.

    doug, come on, tell us it’s you.

  95. 95

    And yes, as Karabell and the others have noted, the Democrats have either gone along with too much of this nonsense, or else mounted ineffective opposition to the folly, avarice and/or pure stupidity of their opponents. But consider the alternative—and, it seems to me, we gotta work, however resentfully, as hard as it takes to hold what we have and to grab the House back fifteen months from now.

    Actually, this is something that’s been bugging me for a while.

    *FUCK* the Democrats. They are politicians. No politician sticks his or her neck out.

    If you want change, you have to do what the Republicans did, and build up a set of policies that people believe in. A safe haven of things to work with.

    The Republicans can always pledge to “cut taxes” and “protect gun rights” and “oppose abortion” because they know they have large, excited groups of people who will support them. Elected Republicans aren’t out there pushing the boundaries; they’re taking on a platform that they’ve made super-safe because it’s been engineered to be super-safe.

    You want to change that?

    Well, first, you have to push to elect non-crazy people. But second, and more importantly, you have to build up the same kind of support for other ideals.

    You want true balance in the news? You have to make the news media scared to report “Crazy Republicans say X, Less Crazy Republicans say almost-X; opinions differ”. You want them to think “oh, god, if we don’t actually report that the Crazy Republicans said something that’s completely fucking nuts, and point out that every sensible human being believes not-X, we’re going to be creamed with letter writing campaigns, angry bloggers, and endless mockery.”

    That’s how the Republicans worked it, screaming about the liberal media until they turned most of them into Republican sounding boards.

    That’s what you need to do if you want to effect change in the country.

    Or, if you want to, I suppose you can just whine about how politicians are acting like *politicians* and trying to play it safe.

  96. 96
    Martin says:

    @Chris T.:

    (PS: “simple” does not mean “easy”, or even “has a snowball’s chance in Hell of ever occurring”. It’s just “simple”, that’s all.)

    Works okay for cutting the deficit, but you’re going to wipe out millions of jobs. Mortgage deduction will cost some jobs, but the private sector medicine, for all of their excess costs, employs a shitload of people that wouldn’t be needed in a full single payer/soçialized method system.

    An easier, and even likely to pass solution on the jobs side is a 100% corporate tax deduction for all offshore profits repatriated in order to pay salary+benefits for new hires. Costs the government nothing, it’s a tax cut (against taxes that aren’t getting paid, so no revenue loss), and there’s ballpark of a trillion dollars waiting to be repatriated, and the tax deduction can only be used for domestic jobs.

    Knock the unemployment rate down to 5% and you save $250B per year in unemployment benefits, and collect about half a trillion more in income and payroll taxes.

  97. 97
    Non-Existent Patricia says:

    @opie jeanne @98: I get where you’re coming from (see: our good friend Eric – bless his heart). I don’t have the history you have (born in 1980, so my political awareness really started with the Iraq war – against from the beginning and the only reason I even pay attention to politics), but I live in Ron Paul’s district and work in the oil and gas industry, so you get some idea of the kind of idiocy I’m constantly bombarded with.

  98. 98
    OzoneR says:

    But second, and more importantly, you have to build up the same kind of support for other ideals.

    and therein lies your problem. There’s no reliable viable constituency willing to stand on a united platform of “no cuts to Medicare/Social Security” “No war” “Civil Rights” and “Green Energy.” There’s a constituency for each, but they don’t overlap. One constituency will find a reason to vote against the other.

  99. 99
    Non-Existent Patricia says:

    @Martin @101: If you don’t mind my asking, what do you do for a living? I ask because you’re more knowledgeable than I would assume a mere observer would be (although maybe I’m just not trying hard enough :).

  100. 100
    Little Boots says:

    even if it’s not you, doug, say it is. give us a laugh.

    it’s 1:00 in the fucking a.m.

    you bastard.

  101. 101
    jwb says:

    longhairedweirdo:

    “oh, god, if we don’t actually report that the Crazy Republicans said something that’s completely fucking nuts, and point out that every sensible human being believes not-X, we’re going to be creamed with letter writing campaigns, angry bloggers, and endless mockery.”

    Ew, that sounds suspiciously like work.

    Actually, we do the angry blogger, endless mockery thing fairly well for all the good it does (not very much), though it’s quite entertaining. It’s the other stuff, the organizing protests, writing letters, pushing political memes on social networking sites, etc., that we’re not so good at. I look at my conservative relatives’ FB pages, for instance, and compare them to those of my liberal friends and relatives, and the basic political content is much, much higher on the conservative pages.

  102. 102
    Xenos says:

    @eemom:

    No, sadly, these human scum are all too well aware that the grotesque mass of doped up, moronic self-delusion that is the American electorate will never get its shit together like the French and other revolutionaries did.

    If they had cable TV back in the 18th century the French would still be living under a monarchy today.

  103. 103
    Little Boots says:

    come to wisconsin, jwb. but really, i hope it works. I’m not sure, but if it does, it may change a lot of things around the country.

  104. 104
    jwb says:

    Little Boots: I rarely click on the names of trolls, but you can follow EL back to his site (Viking Pundit), and it appears legit. Something about his writing struck me more as a character than as a real person.

  105. 105
    Mnemosyne says:

    @Eric Lindholm:

    Would that include the surge in Iraq that Obama initiated or the war in Libya he started? Would it include the Bush tax cuts he just extended? As you know, I get confused by little details like that.

    You do seem quite easily confused judging by your blatherings in this thread. You don’t know what a marginal tax rate is, you don’t know that different kinds of income are taxed at different rates, and now you seem to think that Obama’s surge was in Iraq when it was actually in a different country altogether.

  106. 106
    jwb says:

    Little Boots: I’m supposed to train with OfA and the local Dems next week. OfA has really been pushing lately: I’ve been contacted twice by phone in the last week for different events after not having heard from them since just before the election. I’m not convinced they really have a plan, however, which worries me.

  107. 107
    Little Boots says:

    okay, but I love the idea that it’s doug. some weird twisted part of me wants to tease doug. i don’t understand it, but i can’t fight it. anyway, yeah, he seems like an honest troll, if that is not a contradiction.

    viking pundit? ew. given recent events, that’s unfortunate.

  108. 108
    Little Boots says:

    i am guardedly hopeful. all the money can make a difference, and they are going to dump a ton on this state. but if we can recall 3 or 4 senators and change the makeup, that could really change the whole dynamic. we do have numbers, but money still matters, a lot, sadly. still, I’m guardedly hopeful, the enthusiasm in this state is all on the left.

  109. 109
    Martin says:

    If you don’t mind my asking, what do you do for a living?

    I work in higher ed. Nothing related to any of this stuff, as it turns out, I just process and remember information very well. Mainly my job is to solve really big nasty problems with lots and lots of variables – hundreds to thousands usually. Because I can remember thousands of bits of data at once, I’m pretty efficient at it. A big part of my job now is writing software to take these problems and distill and focus the various parts of them down enough that people can tackle them as readily as I do.

  110. 110
    FlipYrWhig says:

    @LongHaired:

    You want them to think “oh, god, if we don’t actually report that the Crazy Republicans said something that’s completely fucking nuts, and point out that every sensible human being believes not-X, we’re going to be creamed with letter writing campaigns, angry bloggers, and endless mockery.”

    But, here’s the thing: media people don’t get upset when liberals yell at them. It’s like a badge of honor to them. They say, “We’re getting it from both sides, so we must be doing something right.” I’m not quite sure why they ever got upset in the first place that _conservatives_ were often less than nice to them, but I assume that had a lot to do with their bosses’ social circles and advertising revenues.

  111. 111
    jwb says:

    Little Boots: I saw one WI poll that had Walker’s approval rating in the mid-40s and only slightly lower than Obama’s in the state. That made me sad. I really hope the unions coming out will be enough to make the difference.

  112. 112
    Svensker says:

    I know numbers scare you guys but here’s something to chew on: if you set an income tax of 100% of the “rich” (everybody earning >$500,000) it would bring in an extra $1.3 trillion in taxes, although I doubt the “rich” would keep on working at a seizure rate of 100%.

    El Rushbo must have had this on recently, cuz I heard the eggzack same regurge from a couple of other wingers today.

  113. 113
    Little Boots says:

    i do too. and really, people are definitely stirred up. hopefully enough to overcome the stupid and the inertia that follows any really intense advertising campaign. and I still think we can. i do.

  114. 114
    Chris T. says:

    @Martin:

    Works okay for cutting the deficit, but you’re going to wipe out millions of jobs. Mortgage deduction will cost some jobs, but the private sector medicine, for all of their excess costs, employs a shitload of people that wouldn’t be needed in a full single payer/soçialized method system.

    True. Ultimately this would be good; temporarily it would be bad. These kinds of things would really need to be phased in. As I noted in my edited-in postscript, they are all tremendously unlikely to occur at all, though. We might eventually get some part(s) of some of them if enough Democrats win enough elections.

    An easier, and even likely to pass solution on the jobs side is a 100% corporate tax deduction for all offshore profits repatriated in order to pay salary+benefits for new hires. Costs the government nothing, it’s a tax cut (against taxes that aren’t getting paid, so no revenue loss), and there’s ballpark of a trillion dollars waiting to be repatriated, and the tax deduction can only be used for domestic jobs.

    I’m not against this, but I suspect it would be largely ineffective. Companies don’t hire because they can, they hire because they have to: they need more warm bodies occupying seats (or wherever) in order to bring in the money from the demand they see Out There for their services and products.

    The immediate problem is lack of demand, and it’s close to world-wide. The only big economy with a lot of demand right now is in China, and it is fairly tough for US companies to sell to China (they prefer, by far, to sell to us, rather than the other way around). (Australia is still booming, but it’s largely due to raw-material exports to China. It’s not impossible for US exporters to export to China, it’s just hard.)

  115. 115
    jwb says:

    Svensker: Could be Rushbo, could be that viking pundit is a paid troll with an assigned identity and a set of talking points to push who is paid to troll. As far as I can determine, his site has one month’s set of archives (from March) and then another set from July. The posts are fairly perfunctory. The blog seems oddly restrained given the amount of diarrhea he splattered over this thread.

  116. 116
    Svensker says:

    jwb —

    He also has the “Obamacare has tripled our deficit!” thing in one of his posts. Do the wingers think there’s already been a whole bunch of money spent on O-care? They’re not talking future budgets, far as I can see.

  117. 117
    Martin says:

    I’m not against this, but I suspect it would be largely ineffective. Companies don’t hire because they can, they hire because they have to: they need more warm bodies occupying seats (or wherever) in order to bring in the money from the demand they see Out There for their services and products.

    No, I agree. But right now, companies segregate their earnings – domestic and foreign. Their foreign earnings will be taxed at 35% if they need to bring it home to hire. However, if they hire overseas, they won’t be taxed. So for a company with foreign profits to use, US labor is 35% more expensive than foreign labor, right from the start. Simply eliminating that discrepancy may help shift jobs back from overseas. If it works, it can be expanded into other areas – capital infrastructure in the US, etc.

    I think we overlook how much growth foreign economies have seen over the last half century and how much US corporations have shifted into those markets. Our tax policy has created a barrier against money flowing back into the US from US companies that are successful overseas.

  118. 118
    Bruce S says:

    Others have probably made this point, but the only long-term problem in our federal budget that isn’t subject to any easy fix – such as a reasonable tax code or bringing the upper end of wages into the social security tax pool – is Medicare payments. And this isn’t a problem of Medicare – which is more cost-effective than private insurance – but of inflation in a health care system that is full of perverse incentives and will be eating into our GDP whether the bill is paid privately or through social insurance. Overall reform of an out-of-control system driven by profits rather than cost-effective care is the issue. And, of course, the models for correcting this problem exist. Posing “deficits” as the central problem is mostly diversion and deliberate disinformation. This current sorry spectacle is a clumsy attempt at denouement in the Starve-the-Beast scenario concocted over decades by the Norquists who have long dreamed of subverting our government by creating a phony “fiscal crisis.”

  119. 119
    Yutsano says:

    @Svensker:

    By the twitching of my thumb;

    Something wicked this way comes.

  120. 120
    Chris T. says:

    @Bruce S: Just so. But it’s nice to have a “simple four step program” for those who think that deficits are The Problem. :-)

    @Martin: Interesting point. The dollar is also dropping against most other currencies (those that are not tied to the dollar anyway), which helps make US workers cheaper in relative terms. And of course, all hiring (or any other change) occurs, by definition, “at the margin”.

  121. 121
    Bruce S says:

    The Brilliant Mr. Lindblom: “But, hey, if you want Scandinavian levels of taxation and income redistribution, then let the Democrats propose it and let Obama sign it into law. But they don’t, either out of cowardice or a crazy realization that it won’t fly here in America.”

    The source of the deficits in this country are that the GOP has been too cowardly and/or crazy to run on the spending cuts and elimination of programs that would justify the tax cuts they have pushed through by pandering to people’s economic ignorance (the Big Lie that tax cuts always pay for themselves.) Tax cuts sound great – put being honest about ending an honestly articulated list of social programs to justify cutting revenues doesn’t – unless it’s racially coded or some such. The GOP has pushed their agenda through the back door with a Big Lie and rank deception about their ultimate aim. Bush ran against “surplus” and – after Reagan became the first post-war President to massively increase the national debt as % of GCP – Democrats and Republicans had both bring bringing it down – put us on a deficit track again. It’s the sickness of these cowards and cranks. The GOP owns this shit. Only economic and historical illiterates deny that these deficits began with the Reagan and Bush tax-cuts mania. Now Obama is dealing with huge revenue gaps caused by the worst economic crash since the depression – which of course also happened on Bush’s watch. Deal with it or STFU. GOPers are the biggest liars and hypocrites on the political terrain.

  122. 122
    Dennis SGMM says:

    @Svensker:

    The conservative noise machine has lately achieved deafening levels of misinformation. One of the commenters upthread mentioned that the wealthy already pay 20% of the taxes, the implication being that they already pay plenty. He carefully neglected to mention that the same wealthy also have 80% of the money.

    Conservative opposition to science is no accident. It was only by first turning their backs on the conclusions of Geology, Climatology, and Physics, that they could proceed to turn their backs on basic math.

  123. 123
    Bruce S says:

    #126 – that’s “GDP” not “GCP” of course.

  124. 124
    Bruce S says:

    One more thing that’s never mentioned by the idiots who claim that cutting eligibility or privatizing Medicare will help “balance the budget” is that when the CBO scored “Ryancare” they noted not only that the costs out-of-pocket to seniors would increase, but that the total cost of providing equivalent care would increase dramatically. Yes – “Ryancare” increases the cost of health care provided to seniors (via, of course, the “magic of the market”, i.e. total privatization which costs more than “socialized insurance” in every actually-existing instance known to humankind – even in the US, despite the Magic Ponies they have corralled over at the Cato Institute.)

  125. 125
    Chris T. says:

    Also: re Dennis, Martin, Bruce S, everyone else: my favorite idea is a sort of geometrically increasing “net worth” tax, along the lines of sqrt(1 – (v^2^ / c^2^)) (Einstein’s formula for speed of light limitation). Roughly speaking, at very low net worth levels, your “net worth tax” is tiny, but the closer you approach to “all of it” (all the world’s/country’s/whatever) wealth, the closer you get to having 100% of it taken away every year.

    Fundamentally, what this does is make force those who hold lots of money to make it grow as fast as possible. In real terms this means funding lots of start-up companies with wild ideas, and so on.

    Practically speaking, I have NFC, er I mean “no idea”, how one could actually implement such a thing. But if it were possible, it would prevent dynastic wealth accumulation, the way the estate tax does now. Or perhaps I should say, the way the Death Tax used to, but doesn’t anymore….

    [edit to fix wordpress weirdness]

  126. 126
    Bruce S says:

    Chris T – unfortunately your formula isn’t some combination of dishonest and overwhelmingly advantageous to the economic elite, so there’s little chance you can write it on a napkin, hand it to some crank congressman or the WSJ editorial board and watch it unfold as “policy” within a decade.

  127. 127
    Samara Morgan says:

    the Democrats have either gone along with too much of this nonsense, or else mounted ineffective opposition to the folly, avarice and/or pure stupidity of their opponents.

    there is no way for the left to combat pure stupidity.
    America is an experiment in representative government. It worked pretty well as long as the conservative elites attempted to educate and guide their base, and as long as the electorate was +90% white (NHC) conservative christian. But since white conservative christian is declining in the electorate, the social compact of the conservative elite has become exploiting the base’s religious convictions to win elections.

    all men are created equal, all genes and memes are not.

    what is happening in america is happening to all western democracies. the electorates are gradually being colonized by immigrants and the minority chidren of immigrants. in 2008 NHC children became a minority in children under five for the first time, and in 2021 those children begin aging into the electorate.
    This change to electoral demographics of western democracies is now spawning the rise of extremist nativist movements, like the counterjihaadism that influenced Anders Breivik.
    The Tea Party is a nativist movement, as is the British EDL.
    Fiscal conservatism is merely cover for nativism at this point.

  128. 128
    Samara Morgan says:

    @Monkey

    While we’re at it, let’s draw down the wars in Iraq and Afghanistan

    we are getting kicked out of Iraq in December. Under the terms of the SOFA we cannot even leave enough troops there to protect the billion dollar embassy complex we built, and will have to hire contractors.
    The Iraqi government has adamently declared that the contractors will NOT have diplomatic immunity. At least Iraqis LEARNED from Blackwater/Xe.
    Does leaving Iraq and A-stan fix the deficit on its own?
    This is what we are spending.
    Is that enough?

    And before Cole starts wailing about Libya, please note Libya is actually super cheap– the old tomahawks were sunk cost (already paid for), the carriers, jets, and mil personnel were already there.

  129. 129
    kay says:

    Bruce S – July 30, 2011 | 2:47 am · Link

    And this isn’t a problem of Medicare – which is more cost-effective than private insurance – but of inflation in a health care system that is full of perverse incentives and will be eating into our GDP whether the bill is paid privately or through social insurance. Overall reform of an out-of-control system driven by profits rather than cost-effective care is the issue. And, of course, the models for correcting this problem exist.

    I agree with everything you wrote except “the models for correcting this problem exist”. They don’t. Exist.

    Well-intentioned people who are not corrupt or intent on destroying Medicare have tried for 30 years to bring down ever-increasing medical costs re: Medicare and they have failed. They fail because Congress intercedes, and many, many members of Congress are in whole or in part protecting the for-profit health care industry. It’s not just Republicans (although it’s ALL the Republicans) and it can be difficult to determine who is working for whom.
    Here’s an example. The Independent Payment Advisory Board was a mechanism inserted into PPACA to control costs in Medicare. They set up an independent board because (again) Congress has failed at resisting the charms (and bundles of cash) of provider lobbyists for thirty years.
    All Republicans are opposing this cost control mechanism. But there’s a specific group of Democrats who are opposing it too, the “New Democrats” who are the group who also opposed financial regulation.
    The New Democrats aren’t trying to “save Medicare”. They don’t give a shit if it goes bankrupt. They’re acting on behalf of provider lobbyists to keep unlimited amounts of money flowing to for-profit providers.
    It’s complicated. Some supposed “allies” of Medicare are not allies at all.
    It’s going to be really, really hard to fix the cost problems in Medicare. And if you want single payer (and I do) hand-waving on bringing down costs in Medicare isn’t sufficient. Its not a good enough answer to say “Medicare for all”.
    You have to say how you’d bring down costs. Because it’s HARD to do, with a broken and corrupt Congress, and sadly, we have a broken and corrupt Congress.
    Not all of them, not by a long shot, but enough of them to make it difficult.

  130. 130

    I’m back! Sorry for my delay this morning, my valet was late! Then the caviar I have flown in from the Ukraine was served at the wrong temperature…well, you know how it is.

    A couple of recap facts, easily confirmed via Google:

    We are running record, unsustainable, deficits and borrowing 42 cents for every dollar spent. This debt is being piled onto future generations.
    Taxing the rich cannot possibly close this deficit.
    Discretionary spending accounts for only 12% of the U.S. budget; we could wipe out all of it and still not close the gap on just what we’re overspending.

    I know you’re enamored with this idea that (What we want) – X = 0, where “X” is “all the wealth that the rich have.” But there is no way – NO WAY – our budget deficit can be closed without reforming entitlements. It matters not what you “paid into the system” since both Social Security and Medicare are on a glide path to bankruptcy.

    These are the facts presented, ironically, on a thread called “An update from reality.”

  131. 131
    Omnes Omnibus says:

    @ Eric Lindholm:

    Wow, one would have hoped that after sobering up you might have put some thought into things, but it was not to be. Perhaps, however, I spoke too soon and the sobering up has not yet occurred.

  132. 132
    wrb says:

    I find my position on extending the upper-income tax cuts has changed over the last week. Long-term, yes I think our tax system should get much more progressive, and especially eliminate the ability to inherit significant wealth. A free market is great, as long as people start from a level playing field. Increasingly we have feudalism. However, I’m increasingly concerned that the economy is about to spin in to a depression, and as the original post points out, we really don’t have a deficit problem. We need all the stimulus we can get, now. The upper income tax cuts provide some stimulus and their extension for a few years it the best carrot available to get some more stimulus, probably in the form of middle and lower income tax cuts.

  133. 133
    wrb says:

    @Eric Lindholm:

    Your post is a collection of unsupported statements of faith, none of which are true. Starting with the word “unprecedented.” They are running at less that half of their highest level.

    The growth in medical costs is a problem, however.
    Universal coverage as cost effective as that available to our competitors is the solution if we are to run this country with the minimum competence one would expect in running a business.

  134. 134
    Omnes Omnibus says:

    @ wrb:

    Your post is a collection of unsupported statements of faith, none of which are true.

    That saddest thing about your statement is that EL is an improvement on many of the trolls we have been seeing recently. Why, back in the day, there used to be trolls one could do battle with… Now, one almost needs to make sure the trolls don’t trip over their own shoe laces. Now get off my lawn.

  135. 135
    jinxtigr says:

    Eric, I could dig up my mortgage payments and tell you how much of it is to the principal and how much is servicing the interest, only it would be depressing.

    This is just how debt works, calm down.

    I’m seeing people explaining how at these interest rates the government is getting a better deal on incurring debt than on actually spending money directly, and I’m inclined to listen to those sensible people. We don’t have inflation. We don’t have a deficit problem. We have unemployment problems, we have ‘all the money goes to a few guys who take it overseas and don’t spend it within the country’ problems.

    I say fix things by incurring way more deficit through building new bridges and highways for everyone in the USA before our old ones all fall over. And if you’ve seen a highway fall over, it ain’t pretty ;) it’s actually really hard to do, because it starts out so flat, but then you don’t burden me with your problems so… no, wait, you do ;)

  136. 136
    Samara Morgan says:

    @Eric

    Taxing the rich cannot possibly close this deficit.

    you answer my question then.
    Can leaving Iraq and A-stan close the deficit?

  137. 137
    Samara Morgan says:

    Here is what we are spending Eric.

    This isnt some hypothetical savings in Unicorn farts, this is reality. The Iraq cost is going away in December, and the A-stan cost will go away by 2014…or as soon as Obama can quietly and gracefully fold our tents and still get re-elected.
    We may be forced to leave A-stan sooner if the Arab Spring rolls into AfPak.
    But then we will be leaving via helos from Kabul rooftops in a reinactment of the Fall of Saigon, with the Taliban playing the part of the North Vietnamese army.

    How did America miscalculate so badly, one may ask?
    Because no one expects the Arab Spring.

  138. 138
    kay says:

    Eric Lindholm
    This debt is being piled onto future generations.

    This is a great talking point, but it’s a silly statement.

    The whole future generations argument relies on people living isolated, within a snapshot of years, and that isn’t true.
    Future generations benefit from spending, because they benefit from public investment when they arrive.
    Do the as-yet-not-born great grandchildren benefit from Medicare spending on their now-existing (future) great grandparents? I would argue that they will.
    Do as yet-not-born children benefit from federal investment in infrastructure, education and health care? Of course they do. They aren’t born into some isolated bubble of time and place. They’ll be paying interest on the debt but they’ll also be benefitting from the upside of the original investment, because the upside accrues over time.

  139. 139
    kay says:

    Eric Lindholm

    If the federal government borrowed money to care for my great grandparents, and I had to pay interest on that debt when I arrived at adulthood, did I benefit from that investment? Or do I only get the downside of the interest on the debt?
    If the federal government borrowed money to pay for my grandmother’s Pell grant, and I was born later, into that family, do I get any upside from that investment in her education? Sure I do. It’s potentially huge, if she took the whole gang out of poverty with her education. The benefit accrues like the interest payments on the debt. I’m not born into some Randian loner-individual fantasy. I exist within a family and system. Spending on that is spending on me.

  140. 140

    I’m sure glad nobody spent us into huge deficit spending to defeat the axis in world war 2 because it would put all that debt burden on future generations.

  141. 141
    kay says:

    arguingwithsignposts
    I’m sure glad nobody spent us into huge deficit spending to defeat the axis in world war 2 because it would put all that debt burden on future generations.

    And what did THEY get out of it? Huh?

    Conservatives are the people that arrive at a public college and never, ever consider that it existed prior to their birth, because someone made an investment.

    It then disappears when they graduate. Until their kids, who of course benefited from the public investment made in their parents, arrive and register for that college, then the structure re-appears. In conservatism, investments don’t pay off over more than their individual lifetime.

  142. 142
    wrb says:

    I’m sure glad nobody spent us into huge deficit spending to defeat the axis in world war 2 because it would put all that debt burden on future generations.

    The decades of prosperity that resulted from all that investment in infrastructure, technology and education were awful for succeeding generations.

    We sure wouldn’t want to do that again.

  143. 143
    kay says:

    arguingwithsignposts

    I watched the clip of Michele Bachmann arguing that she has not benefited from farm subsidies that go to her in-laws.
    It’s jaw-dropping. Michele Bachmann is a Randian island even within her own immediate family.
    She cannot play out a benefit over two generations. She means it, too. It’s self-absorption to the point of mental illness.
    She’s incapable of looking even to her children for a benefit over time. No one in the Bachmann family benefited other than the individual who endorsed the check, and then the money was “spent” and the asset disappeared completely, apparently, and she’s whining about being stuck with the interest payment, because she, personally, did not spend that money.

  144. 144
    Mnemosyne says:

    @kay:

    No one in the Bachmann family benefited other than the individual who endorsed the check, and then the money was “spent” and the asset disappeared completely, apparently, and she’s whining about being stuck with the interest payment, because she, personally, did not spend that money.

    And yet imagine the wailing and gnashing of teeth from Bachmann if the farm had been sold off because her in-laws had never received that subsidy from the government to keep it running.

    I really think that’s what drives me the most nuts about right-wingers: not only do they refuse to admit they benefited from government spending, they whine if they don’t get the government subsidy they think they deserve.

  145. 145
    eemom says:

    I honestly don’t understand how you good people have the stomach to argue with insects like the one on this thread, or watch clips of Michelle Bachmann.

    At this point, watching what they are doing to this country, I have zero capacity to endure them at all.

    It’s like living in a house being devoured by termites. I don’t want to try to reason with the little fuckers or examine them under a microscope. I just want to get the hell OUT.

    At that point the analogy collapses because, unfortunately, there is no where I can feasibly emigrate to at present.

  146. 146
    grandpajohn says:

    I’m seeing people explaining how at these interest rates the government is getting a better deal on incurring debt than on actually spending money directly, and I’m inclined to listen to those sensible people.

    This. Now i am no economic expert by any means, but I do listen to people that are. I currently have an IRA and am of the age that I must take yearly withdrawals,but the earnings on the account almost match the withdrawals, and since I don’t need the money currently, it is re invested. I also have a line of credit with the bank With a low interest rate. In looking at those accounts I find that it is to my benefit to use the credit line for major expenditures, rather than take money out of the IRA and have to pay taxes on it because the net result is that I am using the banks money at a cost of about 2% to me and my money is still there. Now if this works out as a good deal for me, then why is it not a good deal for the Government ? Maybe EL can find a talking point to explain this to me.

  147. 147
    grandpajohn says:

    Taxing the rich cannot possibly close this deficit.

    Really? Nice sidestep to a new strawman.Perhaps you can link us to a factual source for this statement.
    You have now reduced yourself to displaying stupidity, of course it can help reduce the deficit, since the tax cut is one of the main sources of the deficit. No in itself it cannot totally eliminate the deficit but it can certainly lower it.

  148. 148
    Martin says:

    Fundamentally, what this does is make force those who hold lots of money to make it grow as fast as possible. In real terms this means funding lots of start-up companies with wild ideas, and so on.

    Taxing wealth is fraught with problems. But there’s something just as good: capital gains. Do it there instead with something comparable in the estate tax. And yeah, we’re getting on time to eliminate ‘brackets’. They only exist in order to create tax tables, which were needed before calculators were invented. Now – you only run up against math illiteracy, which is vastly too widespread – ask Yutsy, but we should at least for incomes/gains over a certain amount switch over to a continuous function. If you’re pulling down half a mil, either you know how to do 5th grade math, or you can hire someone who can.

  149. 149
    Bruce S says:

    Kay at #133 – when I say models exist, I don’t mean to suggest that they exist within our system. They do, however, exist in other countries that have been far more successful in both providing effective universal coverage for care and keeping costs relatively low. That said, given the advances in medicine, it is likely that all countries will be seeing increases in health care costs, which is probably a good thing if it’s delivering significantly improved results. I fully agree that the screwy politics in this country will make reform of our system in a more rational direction extremely difficult and protracted. But since “present trends” can’t continue, over the long term, they won’t. At some point – I guess I have to say “I hope” – people will wake up and collide with reality.

  150. 150
    Samara Morgan says:

    will none of the balloon juice economic wizards answer my question?
    Will withdrawing from Iraq and A-stan close the deficit gap?

  151. 151
    Chris T. says:

    @Samara Morgan (154): No, not by itself anyway. It will save several hundred billion dollars a year, but today’s deficit is bigger than that.

    The #1 achievable item that would help is to restart the economy. The odd thing about this is that the way to do that is to make the deficit worse in the short term!

    Edit: (by the way I think this thread is dead anyway) get economy back to where it “should be” = roughly $200B in support payments that stop happening plus roughly $200B in additional tax income, or roughly $400B. Let Bush tax cuts expire also = roughly $400B. I view the latter as “less achievable” than the former, though.

  152. 152
    TenguPhule says:

    Taxing the rich cannot possibly close this deficit.

    Taxing the poor won’t get you any money.

    Pay taxes or face a French style Reign of Terror the likes of which you can’t possibly imagine in your worst Randian Nightmares.

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