Newt, The Debt Limit, and Taxes - Or: Are We Going to Destroy Ourselves?

[ReijiTabibito]

Okay, so after watching the Daily Show and the Colbert Report, a couple of questions popped up in my mind.  First up, Newt Gingrich.

In his latest appearance on Meet the Press, Gingrich made several statements distancing himself from the radical right-wing Republicans, and seemingly courting the moderates, which, given the state of the country right now, seems exactly like what we need - we need to get away from radicalism (on both ends), and work together to solve this country's problems.

No sooner had that happened, though, than news media outlets (or rather, outlet, since I noted with some irony that all the programs saying this were Fox News, aka Hotbed of the Radical Right) that Gingrich's statements had compromised his viability as a candidate for the Republican party.  No sooner had that happened than Newt Gingrich made a press appearance saying that his statements on that show (against Paul Ryan and his healthcare plan) were out of context, and anyone using clips of his statements were wrong.

>_<  Number one.

Now, the Debt Limit.  The US hit the debt limit on Monday, and the only reason that we haven't defaulted yet is because the Treasury enacted some emergency measures to clear up enough money for us to keep paying costs until August, when everyone seems to think that the bill to raise the debt limit ceiling will be passed.

So, here's my question: Why didn't Congress, the President, his advisors, the government personnel responsible for this in general, see this coming?  Or, rather: When Obama came into office, our current national debt was X, with a limit of $14.264 trillion.  Proposed spending was Y.  So why didn't anyone do the math and say, "oh, hey!  Spending's going to put us at the debt limit!"  Why is it that this whole debt ceiling thing seems like it's just getting attention now, rather than a few months ago?

>_< Number two.

And lastly, Taxes.  In reading articles about solving the debt problem, financial experts have been consulted on how to fix the problem.  And most of them have gone on record saying one simple thing: Cuttting Spending Isn't Enough.  Now, I'm all for cutting government spending, especially when a significant portion of our budget are useless pork projects, but like they said, you can't just cut spending to solve a debt crisis on this level.  We'd eventually end up undercutting ourselves a lot.  No, we need less expenditures and more revenue.

And yet, despite this, some Republicans are saying no, no new taxes, no increased taxes, nothing that even remotely involves raising taxes, when, according to the Colbert Report's guest tonight, Austan Goolsbee, that taxes, especially for the wealthy, are at a historic low?  ((In the case of the wealthy, the lowest they're been in the past 60 years!)  So how does someone continue to justify keeping potential revenue out of the hands of the government, and leaving it in the hands of people who, quite frankly, don't seem to be using it?

>_<  Number three.


So, all this makes me wonder: is the end of the United States within sight?  Are the persons responsible for the downfall of this country not the Russians, or Germans, or any of the past enemies that we've had...but us?

[Xajow]

]The problem is that unless we get spending under control, the amount of revenue doesn't matter. Because even if we could magically double revenue right now, without getting spending under control the government would be back to spending more than it takes in probably in 12 months or less. The idea that raising revenue will solve the problem is sort of like doubling a teenager's weekly allowance and expecting the teenager to not be asking for more money the next month.

[Sure]

So, all this makes me wonder: is the end of the United States within sight?  Are the persons responsible for the downfall of this country not the Russians, or Germans, or any of the past enemies that we've had...but us?

No, and to some degree every nation's fall comes about due to itself, in that order. Military, not financial, weakness is what signals the end of a global hegemon.

1.) Because, until recently, getting the debt ceiling raised was a fairly easy affair. Nowadays there's a big battle over it, but this will be far from the first time it was raised.
2.) The trouble is that everyone wants cuts to someone else's programs, and everyone wants taxes raised on someone else. People who talk about raising taxes on the wealthy are inevitably not referring to themselves, for example. As for the last, to be honest, the way you phrased that implies some rather odd (to me) views of the government's relationship to the citizenry. I might be reading into it a bit much, though.

As to Gingrich, he did violate the general election strategy of pander to the party for the primaries then become more moderate once you've won the election. As to what's actually going on, I can't really say. I'm not following the 'elections' yet.

[Vekseid]

Okay, so after watching the Daily Show and the Colbert Report, a couple of questions popped up in my mind.  First up, Newt Gingrich.

In his latest appearance on Meet the Press, Gingrich made several statements distancing himself from the radical right-wing Republicans, and seemingly courting the moderates, which, given the state of the country right now, seems exactly like what we need - we need to get away from radicalism (on both ends), and work together to solve this country's problems.

No sooner had that happened, though, than news media outlets (or rather, outlet, since I noted with some irony that all the programs saying this were Fox News, aka Hotbed of the Radical Right) that Gingrich's statements had compromised his viability as a candidate for the Republican party.  No sooner had that happened than Newt Gingrich made a press appearance saying that his statements on that show (against Paul Ryan and his healthcare plan) were out of context, and anyone using clips of his statements were wrong.

Newt handed his wife divorce papers while she was stricken with cancer. What do you expect? The only politician whose status as 'scum of the Earth' rivals his is Rick Santorum.

There are a few Republicans with a sense of personal integrity - David Frum, Ron Paul, etc. These are the sorts of people that should be acknowledged as having a position in the debate, rather than being outright insane.

Not that I consider them to have valid opinions, mind. I just don't have to worry about Ron Paul being a hypocrite, which is a nice change of pace.

Now, the Debt Limit.  The US hit the debt limit on Monday, and the only reason that we haven't defaulted yet is because the Treasury enacted some emergency measures to clear up enough money for us to keep paying costs until August, when everyone seems to think that the bill to raise the debt limit ceiling will be passed.

So, here's my question: Why didn't Congress, the President, his advisors, the government personnel responsible for this in general, see this coming?  Or, rather: When Obama came into office, our current national debt was X, with a limit of $14.264 trillion.  Proposed spending was Y.  So why didn't anyone do the math and say, "oh, hey!  Spending's going to put us at the debt limit!"  Why is it that this whole debt ceiling thing seems like it's just getting attention now, rather than a few months ago?

It was an issue a few months ago. It's been being argued for a long time. Democrats should have handled it last year, but - as with the budget - they punted on it because they were afraid of the upcoming election. Their demotivated base cost them a seven-point swing.

A part of me suspects it's intentional, but it's pretty clear that this sort of idiocy is either going to have to be booted out of Government or the country will far apart. Not for long, mind, but still.

And lastly, Taxes.  In reading articles about solving the debt problem, financial experts have been consulted on how to fix the problem.  And most of them have gone on record saying one simple thing: Cuttting Spending Isn't Enough.  Now, I'm all for cutting government spending, especially when a significant portion of our budget are useless pork projects, but like they said, you can't just cut spending to solve a debt crisis on this level.  We'd eventually end up undercutting ourselves a lot.  No, we need less expenditures and more revenue.

And yet, despite this, some Republicans are saying no, no new taxes, no increased taxes, nothing that even remotely involves raising taxes, when, according to the Colbert Report's guest tonight, Austan Goolsbee, that taxes, especially for the wealthy, are at a historic low?  ((In the case of the wealthy, the lowest they're been in the past 60 years!)  So how does someone continue to justify keeping potential revenue out of the hands of the government, and leaving it in the hands of people who, quite frankly, don't seem to be using it?

Historical government spending.

As the chart above clearly shows, anyone who tells you that the debt is solely because of overspending is a liar - the Government has handled even larger amounts of spending responsibly. Reagan raised taxes on low and middle incomes, cut taxes for the rich, and now we have our debt. We'd actually be sitting fairly pretty right now if it wasn't for that and the Iraq war. And our economy would be stronger, too.

So, all this makes me wonder: is the end of the United States within sight?  Are the persons responsible for the downfall of this country not the Russians, or Germans, or any of the past enemies that we've had...but us?

No. Not for very long, anyway.

The fact of the matter is that most Americans actually understand what the real problem is - the overreach of corporate and special interest power. Some 75-80% of Americans think Corporations have too much influence. And they're pretty set on that regardless of what sort of question you ask them or how you attempt to weasel-word it - excessive corporate influence is rightly seen as the root cause of this nation's problems.

The reason it's being allowed to get so bad is - well, are you starving? Is anyone you know starving?

Things simply haven't gotten bad enough yet that Americans have no choice but to act.

It will happen, eventually. When gas gets to $10 a gallon, when floods, wildfires, and droughts and other severe weather are pounding the nation. When food stamps finally get cut and fifty million people are told to choose between acting up and letting their family starve.

America's been through worse and still ended up on top of the world. I'd say, at least to some degree, it's even because of it.

[Callie Del Noire]

Newt is not my favorite republican. Like Vek's said.. the whole divorce thing with his wife while she was suffering with cancer is typical of his actions in the past. He's an ass and a bit of a rattlesnake.

Honestly though he's right, budget reform is going to take more than cut, cut, and more cuts in the budget. We need to fix the tax code. I hate to say that. I know it's unpopular and a bad word, but we can't give 'stimulus' packets to everyone in the damn country. Encourage folks to invest and put things in savings, and accept that you won't be getting as much back from taxes.. or even paying them.

We have to pay our way. The popular political tact is to lie and say we can keep cutting it.

[Serephino]

That's what is pissing me off about Republicans.  This year they wanted to cut the budget by 60 million.  They got about half that because a lot of pressure was being put on them.  But the budget they want for next year slashes 13 trillion; and they call it the road to prosperity.  It even cuts taxes more for the wealthy!

I get it; they earned it, and they want to keep it.  But they're also the ones that have it.  The ugly truth is that taxes need to be raised, and you can't take it from the poor.  As the saying goes; you can't squeeze blood out of stone.

I do agree that spending needs to be cut too.  It astounds me that the Republicans went after social programs like rabid dogs when doing the budget, but they somehow overlooked all that money they were giving to oil companies who are shooting for record prophets again.  Now, even some Republicans are admitting it might not be a bad idea, but I have a feeling they're only saying that because it's public knowledge and voters are angry.  It shouldn't be an issue now, after the budget was passed.  And a majority of Republicans are STILL blocking it. 

They have also been trying to raise the debt ceiling for months now.  The problem is the Republicans know that it needs passed, so they are trying to attach parts of bills that they couldn't get passed before.  This last time they tried to attach the thing where a woman would have to approve to the IRS she was raped to be able to get funding for an abortion.  As much as they need to do this, the Democrats aren't letting that crap slide.  My fear is eventually they're going to have to, and I'm afraid of what little pet project the Republicans are going to get their way on.  They seem hellbent on making abortions damned near impossible to get, and taking away women's rights in general.

This is what happens when one party has too much power. 

[Callie Del Noire]

It's not one party. I know it seems like it in the media but it's both sides. They are 'tax cut crazy'. Less taxes and such is always a good way to reap benefits in the elections. The republicans have had a bad trend to go to what the most vocal, if small, group of people within the party want to do.

It was the 'Moral Majority' for a while, and now it's the 'Tea Party' groups. The leadership is trying to hold onto control and get behind any faction that will let them keep it. The democrats are doing it by letting the liberal elements in the party take control and run with their programs and the GOP does it by backing folks that will let them stay in control. The growing segment of the party that are more moderate aren't going to let the leadership to stay in place, they know it. To go a bit more moderate means the younger and up and coming groups will have more control.

It, on the party leadership side, comes down to control pure and simple. They want to stay in control. That is why Newt is aiming for the moderates, the folks who pushed him out don't want to back him. He knows it, so he's trying to play to the younger and more moderate segment of the party.

I saw some of the same action when my brother was trying to run for office back a few years ago. FOR YEARS, the party was pushing him to run for a state level office but he went too high. Suddenly he was 'an outsider' or 'inexperienced' because they knew he wasn't going to let them set his path. After they left him and the other candidates for a 'johnny come lately' they tried to get him to run for a seat in the state legislature that Jesus Christ himself couldn't win against the incumbent in office there. And wanted him to pay his own way through it.

Seriously, a 20+ vet in the same seat all those years? Not even in the area that he lived/worked in. The leadership talks the talk, but they are more interested (and invested) in staying in control.

[Jude]

The idea that we can fix the debt problem on the backs of the wealthy and corporations is a fantasy.  If you look at how much we owe and the actual revenues that we make, to do that would require ridiculous tax increases.  Cutting isn't enough either, pork isn't as big of a problem as people make it out to be.  Sure, there's a fair degree of waste there, but it's not like 25% of our country's budget is waste.

Our goal right now is to create a budget which allows us to pay down on the debt.  That requires 3 the budget to be divided into 3 financial portions:  actual spending, interest payments on the debt, and debt payments.  As such, we're going to need to slash spending more and raise revenues higher than if we were trying to put together a functional budget for a debtless country.  That means when it comes to deciding how we're going to organize our government during this time we need to slash spending and raise taxes beyond what we want to do for the regular operation of the country.  Therefore thinking about what can and can't be cut and what taxes should and should not be raised as a normal state isn't really the right way to look at our fiscal situation.  We're not operating under normal circumstances, this is big-debt time and sacrifices have to be made.

Tax the wealthy or corporations too much and they'll leave -- remember that we live in a global economy where it's easy to find another home if your current one is taking too much from you.  That doesn't mean we can't tax some corporations more (like GE, if I recall they paid 0 in taxes this year), we just have to be careful not to disincentivize their presence in America to the point that they leave.

Social programs are going to have to be cut somewhat.  Medicare and medicaid are 43% of Federal Spending on their own; that's over double what we spend on defense.  This is just a fact of life.

[Callie Del Noire]

Tell me how leaving loop holes to companies who bemoan that their 'tax burden' as the primary reason they are moving production overseas at the same time they are getting tax benefits to the rate of half their net gain for that year?

For example GE reporting a 14.2 BILLION world wide and 5.1 Billion in the US total, and paying NOTHING to the government and gaining 3.2 billion in tax breaks.

No need for corporate tax reform? I disagree. There is LOTS of it. First thing we need to do? Make the tax breaks work for us. Encourage infrastructure growth and R&D again. Once upon a time we, the US, were innovators because we invested in our infrastructure and tried to innovate. That went away in the 70s. We need it back. BADLY.

Manufacturing in the US is provably worth it, several companies have shown by innovation and revamping how they support their clients more efficiently than overseas concerns. Granted the companies are operating with standards of performance of 98+% and restricting their service area to a hundred miles or so, but those are jobs we got back.

Lean material management, Six Sigma planning techniques and such along with technical innovation can fix a lot of the 'production shortfalls' that are a primary excuse for moving out of country.

As a business community, the US is short sided. We refuse to meet other countries who hinder commercial competition with restrictions and we do all we can to allow them to set US policy even when it's not in our best interest.

That being said.. the US Corporate Tax Code needs to be fixed. We have the HIGHEST in the first world at 35%, fixing it would do a great deal in making US businesses competitive and actually encourage less creative accounting and perhaps bring some business back. Honestly every politician I've seen in the last 12 years who supported corporate tax reform gets HAMMERED in the polls and that confuses me.

[Jude]

I agree with you that we need to reform our tax codes (for corporations and the wealthy too -- I support universal reform really, so long as we don't toss progressive taxation out completely) so that corporations in the US pay more than they are now, I'm just saying that we have to be careful about it.

As far as manufacturing goes, that's gone and not coming back unless you create protectionist legislation, because American workers just can't compete with the lower wages that people in third world countries get with as cheap as shipping is in today's global economy.  Though I guess the momentum could change if we start valuing energy differently though -- which could happen if we actually did something about global warming legislation.  If it costs more money to ship goods from China, then imported goods from China will have a hard time competing with American made goods.  Right now the cost of shipping is being kept artificially low through the use of fossil fuels, which chances are result in the cheapest energy cost that human civilization will see until we perfect solar technology to the point of approaching Dyson sphere-like concepts (bubbles or swarms).

[ReijiTabibito]

Okay, so, a lot of quality things have been said.  Here's what I think, on those thoughts.

@Sure: 

You mentioned 'odd views of the government's relationship to the citizenry.'  Can you explore/clarify that?  You might not be reading into it too much, after all.

On Weakness: So, as long as our military is strong, then we'll always be a global power?  This might be an extreme example, but I find it hard to believe that that would be the case if everything else were falling apart.

On Comment One: Oh, I know.  I know it's not the first time.  A trillion dollars probably didn't even exist way back when.  And I know that the debt limit ceiling has been raised 10 times since 2001...more on that later.

On Comment Two: You would be correct in the fact that I am not referring to myself when I was talking about raising taxes on the rich.  But, according to some figure I remember reading here on E somewhere, the top ten percent of earners make something like 25% of the economy's money, but only spend 15% of it.  And while it's good to save...that extra 10% is going into their pockets.  The numbers may be wrong, but I'm pretty sure the rich don't spend all of the money that they make, or even a significant portion of it.  Meanwhile, people are out there on food stamps, and middle America is facing a crisis.  Problems which could be solved by increasing the taxes on the rich, since they're not using their wealth.

Regarding Newt, to All Who Commented on His Sleaziness:

Gingrich has never been a favorite politician of mine.  That comment was more about the fact that everyone (IE, Fox News) seems to think that playing to the moderates and ignoring what Callie calls the 'most vocal minority' is political suicide.  Or at least until someone's garnered the party nomination.  My question is, do the radicals of this country really have that kind of power?  Where a small handful of men can steer the nation's course?  If so, then we have a problem.

@Veks

On Newt: See Above.

On the Debt Crisis:  >_<  Of course.  Elections.  Why am I not surprised?  "Well, on the one hand, we've got this really big, country-threatening crisis, and on the other, we've got keeping our party in power.  Let's deal with number two!"

And that is why politicians are number two.

On Idiocy: The problem is that, like in education, Americans seem to have truly undervalued its importance.  By that, I mean the following.  For a long time, the old phrase was "those who can't do, teach," implying that the people who weren't good enough to go into their field of business went into the field of teaching others about that field of business.  Problem is, that just means that all those 'non-good' people end up becoming our nation's teachers.  And then we wonder why our kids hate going to school, and lose their desire to learn.  It's only been in recent history that people have started to realize "Hey!  We need good, qualified college graduates - not necessarily Education majors - to go into primary and secondary schools and teach our kids!"

Politics is the same way nowadays.  Used to be that politicians were some of the most intelligent, well-educated people of their day.  A number of US Presidents in the past were lawyers - Jefferson, Lincoln, FDR (though not his relative Teddy, but Big T was well-educated!) - some of the most educated people of their day!  Nowadays?  This may be an extreme example, but I feel like the attitude is: "Failed at everything else?  Why not try going for a public office?  As long as you say the right things, kiss enough corporate behind, and suck up to enough voter bases, you'll be a shoe-in!"  Politicians, in contrast, seem the least educated these days.

Just Google Michele Bachmann constitutional challenge.

Part II Forthcoming...

[consortium11]

There are a few Republicans with a sense of personal integrity - David Frum, Ron Paul, etc. These are the sorts of people that should be acknowledged as having a position in the debate, rather than being outright insane.

Not that I consider them to have valid opinions, mind. I just don't have to worry about Ron Paul being a hypocrite, which is a nice change of pace.

I have great respect for Ron Paul (and like much of what he says) but there's some distinct rust on his halo.

He has a very bad habit of adding pork to a bill, then voting against it (knowing that he'll be the only one voting against it and that it will pass regardless) and then taking the pork for his home constituency. Essentially he gets to keep his "vote against government spending/pork" reputation intact... while also getting all the benefits for him and his constituents of that self-same pork.

In the muddy puddle that is political hypocrisy it's very much on the small side but it's still there.

[Callie Del Noire]

I'll be honest, and blunt. I trust Newt Gingrich to do the things he promises in the face of adversity and unpopular party opinion about as far as I can throw the USS Nimitz.

He's of the same sort as Vice President Cheney. I do not trust him, I don't believe him and I see this as an attempt to get back into the inner circle of the party. He's been on the outs for the better part of a decade since he left congress. He wants back in and figures that no one else can pull it off.

Sadly he's not too far off, I don't see a lot of hope in the line up of the coming election.

[Asuras]

This is one of my favorite charts ever. They should have it on the news every night.

It basically answers the question, "How the hell did we go from a budget surplus to ballooning debt in ten years?" (it comes from a study by the Pew Charitable Trusts)



In 2000, the CBO (the non-partisan Congressional Budget Office) said that the entire debt would be paid off, and then some by 2011.

One big factor, obviously, is "Technical and Economic Changes." Basically this means that the CBO was too rosy about US economic growth. But even if they'd had a crystal ball, the US debt would still have been halved.

The other two-thirds is because the Bush and Obama presidencies spent way more and cut taxes way more than the CBO projected. If the Bush tax cuts (the "2001/2003 Tax Cuts" in this graph) and the wars in Iraq and Afghanistan had never happened (or taxes had been raised to pay for them), the debt would be the same as in 2000.

But really, whoever wants to balance the budget has to answer a simple question: what taxes do you want to raise and what spending do you want to cut. It's that simple. Medicare, social security, or defense? Everything else is simply not enough.

So this is Obama's 2012 budget (from the White House):



Just looking at that, you can see that if you want to make a big hit on spending, you have to make huge cuts to the big areas of spending: defense, social security, health care, and income security (i.e., welfare and unemployment) Platitudes about pork barrel spending are just that; platitudes. They largely fall into that lower right hand corner of "etcetera" about transportation and the like.

[ReijiTabibito]

Damn.  That chart is damning.  It seems like, on the CBO chart, the two biggest factors in contributing to the national debt we have now are the 2001/2003 tax cuts and the wars we fought in Iraq and Afghanistan.

I seem to vaguely remember something about our country's national debt during the Clinton administration (either at the end or in 1995, I forget which) was only to the tune of $5 trillion.  I think.  Which means that the Bush administration built up almost $10 trillion dollars of debt in eight years.

And it seems like if there are programs to cut, there are 4 categories that it should happen in, according to the second chart: Medicare, Social Security, Ongoing Operations, and whatever Other Defense is.

[Oniya]

Unfortunately, the baby-boomers are hitting retirement age, which means both Medicare and Social Security are going to be hammered just to give people a minimum level of living expenses.

[ReijiTabibito]

Also true.  Which brings me to a point I've always contended about Social Security, which is that the inventor never intended it to last.  Remember, SS came about as part of FDR's New Deal, to help the American people during the Great Depression.

When Social Security was established, 32 Americans were paying into it for every 1 that was getting something out.  Back when I was in high school (about 10 years ago), my US History teacher told me that that figure was now 3 to 1, and that when the baby boomers retired, it was going to go to an inverted pyramid, with 1 person paying in for multiple people paying out.

I hate to say it, but our own programs are punishing us for raising the quality of life we have in this country.

[Asuras]

This would be my plan (and forecast):

Eliminate corporate taxes, raise income taxes

Corporate taxes are stupid. They tax small businesses at the same rate as big business. Except big business can afford getting around it. Small businesses and start-ups can't.

But all businesses pay dividends or appreciate in capital gains. That's income to shareholders; it's the reason people are in business. People are in business to get personal income. Tax that. Why not tax it in one, simple place and invest the hell out of auditing it? Make rich shareholders pay more.

Eliminate tax cuts that were implemented since 2001

They were stupid. Just looking at the CBO chart I posted says that they're responsible for a large portion of the current debt.

Cut social security, medicare, and defense

An across-the-board cut. These are the main factors in spending. Since the danger in medicare and social security is in the medium to long term, phase in these changes. For instance, raise the retirement age as of 2020 two years.

Don't do it immediately.

The economy is still weak. It makes sense to have low taxes and high government spending. But we should commit to a strategy as the economy starts growing (which, actually, it is). i.e, next year we start doing this stuff.

The deficit will improve as the economy improves.

As the economy recovers, the deficit will naturally fall as tax revenues rise. So it's really not like the deficits of 2009-2011 are permanent.

Raise the debt limit yesterday

The fact that we're even toying with this is insane. If we get to July and Congress is still toying with this, you're going to start seeing interest rates rise, stocks falling, and CDSes on US debt skyrocketing all because the teabaggers have no idea what they're playing with.

[Callie Del Noire]

I don't know about eliminating corporate taxes, but we sure as hell need to reform it to bring home all that money the American companies who can do it are hiding overseas. The US has the highest corporate tax rate of any First World nation. It is strange how we can have the most open government to payola from Corps and yet force them to hide their money elsewhere.  It truly boggles the mind at times. Almost every presidential candidate that I've listened to who has gotten elected has IGNORED that.

The dirty little secret that could fix a hell of a lot of problems. Drop Corp Taxes to.. 10% and slap a MAJOR benefit for things like US reinvestment and R&D. Bring our businesses back home as well as our troops folks. Stop doing foolish things like NAFTA and other agreements, stop letting other nations slap protectionism moves in place while we meekly stand there looking shocked. I don't know where the US economy as a consumer basin is anymore but I'm sure it's not far behind China (who is #1). Put up some counters to the protectionist measures that Europe and Japan have done and you'll see some very upset lobbyists on the hill but let's be honest.. they have done it to the North Am nations for DECADES.

I also agree with Asuras.. we seriously need to reevaluate our tax 'reform' (snort) of the last decade.

[RubySlippers]

I say do nothing save raise the debt ceiling as needed, we can coast along a few more decades maybe. After that if we go bankrupt enact martial law and WW II style rationing. Most people will be content if they get housing, food, clothes and entertainment covered well we can do that ourselves and in time the new life will become accepted by people. Might be a good bump to have real national health care and push green technology so there could be good things that happen. And the Russians showed an internal economy can meet most needs if properly done.

[Jude]

You're using the Russians as an example of a functional economic strategy??? (extra question marks added for emphasis)

[Callie Del Noire]

Newt's response to media criticism (as read by John Lithgow)
John Lithgow gives Newt Gingrich's press release a dramatic reading

And yes, I'm a bit surprised by idea of using the Russian managed economy model. It was broken and they are still paying for it.

[ReijiTabibito]

Okay, more doom mongering from the halls of the Daily Show, with their Tom Hanks guest star broadcast last week.  I'm starting to wonder if we're ever going to get past all this jockeying for political position crap and actually, you know, have the politicians do their damn jobs instead of being the whiny little children that they're mostly being.

Also, a friend lent me a book called The Creature From Jekyll Island, about the Federal Reserve and how it's responsible for a lot of the problems in this country, especially when we went off the gold standard.  He claims that if we don't reverse the trends that we've got running, then we're essentially going to end up being absorbed into some huge globe spanning government body like the UN.

Thoughts, comments, anyone?

[Vekseid]

A lot of the fearmongering about the federal reserve is straight up hoax and conspiracy nut material. Yes, they should be more transparent, but pulling us off the gold standard was not a sin.

[gaggedLouise]

*trying to figure out the size of the headlines that would fit the news of "United States going Bankrupt"*

I read somewhere that the actual amount of state currency reserves held by various nations, including the U.S., is many times bigger than the sum of money that would be equal to all the gold ever mined in the world, if it would be sold on today's sales price for bullion. That sort of shows one reason why the gold standard became obsolete.

[Vekseid]

Well, what would happen is the value of gold would increase to compensate. It's essentially a transfer of wealth to those who currently have gold. So naturally, those who currently have gold want their special type of rock to be the basis for the new world currency.

[ReijiTabibito]

A lot of the fearmongering about the federal reserve is straight up hoax and conspiracy nut material. Yes, they should be more transparent, but pulling us off the gold standard was not a sin.

I'm not disputing that.  One of the more 'eh' parts of the book is about how the US Council on Foreign Relations is deliberately working to take America down from the inside, in exchange for being given places of power in the New World Order.

But, the system being the way it is, the US government will never be able to pay off the national debt, because the way that the system works now demands that there be debt in order to function.

Plus, the original book was written some time ago (1994), what I have is the 5th edition, and a lot of what happened in the book has indeed transpired since then.  Ever heard the phrase "Too Big To Fail"?  This guy was one of the first to say it.

[Asuras]

Well, what would happen is the value of gold would increase to compensate. It's essentially a transfer of wealth to those who currently have gold. So naturally, those who currently have gold want their special type of rock to be the basis for the new world currency.

Which (I think you'll agree) is ridiculous.

The amazing thing to me about gold is that it's not safe. People invest in it because its "safe". And for the last ten years it has been but there's no reason that the thing can't drop like the rock it is at any point, it's a commodity with little intrinsic value.

But, the system being the way it is, the US government will never be able to pay off the national debt, because the way that the system works now demands that there be debt in order to function.

We should always have a national debt. Alexander Hamilton wanted a national debt so this country should build credit. We just need to be responsible about how big that debt gets.

[Revolverman]

We should always have a national debt. Alexander Hamilton wanted a national debt so this country should build credit. We just need to be responsible about how big that debt gets.

Why would you need debt to build credit? and credit with who?

[gaggedLouise]

Which (I think you'll agree) is ridiculous.

The amazing thing to me about gold is that it's not safe. People invest in it because its "safe". And for the last ten years it has been but there's no reason that the thing can't drop like the rock it is at any point, it's a commodity with little intrinsic value.

Absolutely agree - staple gold is no more of a bulletproof value, in the long run, than wine or paintings by famous artists. And if it's set as the only ultimate parameter of value it can skew conflicts in strange ways. Imagine how much more difficult it would have been to bring an end to the apartheid system of South Africa if gold (and, buttressed by it, diamonds) had still been the base of evaluation of assets everywhere. The motivation to foreign powers to support the white ruling classes would have been all but impossible to get around, and it would have been harder to bring out the injustice of it all, because of the need to have a hand on the assets that the rulers of South Africa controlled.

We should always have a national debt. Alexander Hamilton wanted a national debt so this country should build credit. We just need to be responsible about how big that debt gets.

Agree. Few advanced countries really plan on becoming completely free of national debt: what they want is to have a manageable amount of debt relative to taxes and GDP, and that's not the same as a fixed-size debt, but a debt that allows them to be proactive and plan for the future. If the government of a country says "we shall never incur debt" they, and the nation, won't get anywhere, there's only so much you can do from taxes and private initiatives in a country without modern roads, railways, airports, energy infrastructure and so on. And that kind of thing costs huge money to set up in the first place, before you can get to use it.

Keeping the economy going in a modern trading nation, set in a world of competitive and hungry rivals, demands investment programs now and then (or running maintenance) on a scale that no private company is going to be willing to pay for by themselves. And no modern nation tries to pay for that kind of thing simply from the surplus of the budget as it would look if all loans were taken away. Taking up loans (plus raising the taxes a bit) is the way most countries operate if they are planning to expand their railways, invest in education and so on.

[Maxwell Malamute]

I don't think the debt is as bad as people think; the US has vast wealth, and could easily pay the debt down if it wanted to. Wall Street is back to making record profits, and the gap between the rich and poor ans never been greater. The top richest 1% have more money than ever due to tax cuts and loopholes for the rich, and it has not created a trickle-down effect of them investing and creating jobs. For too long, we have let Wall Street and the Super Rich take advantage of the country that brought them the stability that made the accumulation of their wealth possibly; if we rolled back the tax cuts on these elites, held big banks accountable, and brought Wall Street to task, we wouldn't have to be taking it out on teachers and workers and those struggling to get by. The entire debt crisis is a tool of the right to make people think the sky is falling, and to give up even more, so the rich can take even greater advantage of the system. I have seldom seen a movement so blatantly stupid as the Tea Party, in terms of self preservation.

[Jude]

The June jobs report is certainly making me feel more pessimistic.

[Hurricane]

I don't think the debt is as bad as people think; the US has vast wealth, and could easily pay the debt down if it wanted to. Wall Street is back to making record profits, and the gap between the rich and poor ans never been greater. The top richest 1% have more money than ever due to tax cuts and loopholes for the rich, and it has not created a trickle-down effect of them investing and creating jobs. For too long, we have let Wall Street and the Super Rich take advantage of the country that brought them the stability that made the accumulation of their wealth possibly; if we rolled back the tax cuts on these elites, held big banks accountable, and brought Wall Street to task, we wouldn't have to be taking it out on teachers and workers and those struggling to get by. The entire debt crisis is a tool of the right to make people think the sky is falling, and to give up even more, so the rich can take even greater advantage of the system. I have seldom seen a movement so blatantly stupid as the Tea Party, in terms of self preservation.

These are exactly the kind of sentiments that make me furious.

The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?

[Maxwell Malamute]

"The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?"

This does not translate that the top 10% are taxed at a rate of 68%, as you seem to imply. In fact, the rich pay nothing above $100,000 as far as social security goes; as far as federal taxes go, the highest bracket is 35%, and laden with many times the loopholes the middle class are able to take advantage of.

Thus, nobody is coming up to me and asking for 68%, and this would remain the case whether I made $30,000 or $30 million.


So yes, I do think the wealthiest people are not going to be overly burdened by giving back to the nation that maintained the stability and the very environment for them to become wealthy. It sounds perfectly fair to me. Humane and civil, even. When you have people working full time, and still struggling to afford basic things like medical and dental care, I think there is a huge problem.

Let's face facts: tax cuts for the rich have not helped create jobs, nor the average person. They've only helped money become increasingly concentrated in the hands of a few, where it stagnates and fails to circulate and keep the economy moving.

[Vekseid]

These are exactly the kind of sentiments that make me furious.

And your sentiments make me angry. Especially your non sequitur. Please try to refrain from those in the future, as Maxwell addressed.

The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?

In addition to Maxwell's statements, you are also making a lie of omission by avoiding discussion of regressive taxes like sales taxes and fees.

As Maxwell alluded to, most people's basic needs and wants are in the first $70k of their income. This means that income over that, people are happier and more willing to support civilization. Obviously, if you're making less than $70k, you're going to be more stressed. Even when people making $50-80k per year are convinced that they are making a lot of money. I believe it was Thomas Jefferson who argued that an income tax should have a cutoff below which no tax is paid. It's hardly a new concept.

Two-thirds of households making over $200k per year want to be taxed more. This is almost certainly going to include some otherwise liberal folks living in more upscale parts of the country who are on the edge and can't really afford it there. During World War II and the 50's, many of this nation's most lauded entrepreneurs did actually pay around two-thirds of their total income as tax. During this period of the 90% top bracket, the United States, without relying on exports (which were anemic) came to outproduce the rest of the world combined. We fought in several wars, landed a man on the Moon, created the world's fastest plane, the first commercial jumbo jet - a feat which took the rest of the world decades to match. This all with the top bracket between 70% and 94%.

What did dropping it to 20% get us? We had the Great Depression.

The fact is the rich disproportionally benefit from a secure and safe society. To paraphrase Anatole France, the law, in its magnanimous equity, forbids the rich as well as the poor to live in their vehicles on the street. It forbids the rich as well as the poor from declaring bankruptcy unless paying thousands of dollars in fees first. It forbids the rich as well as the poor to rummage through garbage for food. It forbids the rich as well as the poor from doing drugs where they can be seen. It protects the rich as well as the poor from having their goods stolen. In its glorious equality, it mandates that the rich as well as the poor pay the same fines and fees.

The majority of income for the rich is rentier income - interest, rent, and dividends. You are, in effect, paying these people taxes as you speak. Out of nearly every good you buy, out of every service you use, as long as it isn't directly from someone self employed or close to it, they take their cut for doing nothing but help ship your job overseas.

This has reached a point where there is now a net transfer of about ~5% of this nation's wealth from the bottom 85% to the top 5% each year.

That isn't sustainable. Whether you believe in austerity fairies or not, eventually, that house will come crashing down. People in the bottom 85% are getting more and more squeezed for money each year, and eventually, they won't have any more to give.

And then this nonsense ends, one way or another. I hope it is not the end painted by clinging to delusions and spreading them through liberal application of fallacies such as your post there.

[ReijiTabibito]

These are exactly the kind of sentiments that make me furious.

This is a civil discussion thread.  I may not be a god, but I am the one who started this thread, so I can delete and lock it just as much as they can.  Keep things civil.  I don't want anyone to get banned or put in the Pillory because of random statements like this.

The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent of income earners pay 68 percent of the tab.

If I came to you and asked you to pay 68 cents out of every dollar that you earn, would you ever think that was fair?

This is...so erroneous and full of holes that it's not even worth discussing.  Here are a few more things for you.  The wealthiest parts of the country earn far more than they ever spend in the economy.  And that's after taxes, not before.  I heard the disparity between percentage earned by the top one percent and the percentage spent is about ten percent - that is, they're taking ten percent more out of the economy than they're putting into it.  And that money doesn't just come from nowhere, the money that they take and keep out of the economy has to come from somewhere, and that somewhere is the rest of the country.

Maxwell and Vekseid are right.  When you've got a society that has people struggling at the bottom to just take care of their basic needs day after day, and giants at the top who have more money than they spend in a given year, something is wrong.  While some of the statistics and ideas within the book The Creature From Jekyll Island are suspect, a few are quite sound. 

One: fewer and fewer people retire every year at 65.  A family friend of mine is a cardiologist at a hospital, making well over $250K a year, with a spouse and three kids to support.  Ten years ago, when I was in high school, they were going to continue to work past 65, but so that they could keep doing good work, and not for the money.  I talked to this same cardiologist a year ago, and they told me flat out that they're not retiring until the scalpel is taken out of their hands - the economy was too bad, things are getting pricier, and there's no sign of recovery at the moment.

Two: The average income is getting lower.  My wife and I both work, for a combination of around 60 hours a week, and have enough to pay our bills and set aside some for savings, but any huge emergency expense - like fixing a car or a hospital visit - would easily wipe out those savings.  And we don't work minimum wage jobs, either.  Compare this to past generations, where one income earner was enough to supply the needs of a whole family.

Three: In 2006, the amount of tax revenue being spent by the federal government on the interest on the national debt was 39%.  This is not to help pay off the debt.  This is the interest on the debt.  Furthermore, payments in interest on the debt took about 17% of total federal revenue (more than just income taxes).  It is now the single largest expenditure on the budget.  More than defense, and greater than the total cost of running 10 different federal departments, some of which are: Agriculture, Education, Justice, and State.

All the Democrat and Republican arguments over tax boost/spending cuts aren't the real solution.  Even a balanced-budget law isn't the solution.  The solution is that Congress needs to be cut off.  Spending cuts aren't the solution, a spending cap is.  Raising taxes on the rich, and cutting spending for programs that serve no real purpose sound nice, and they need to be done, but neither of those are truly capable of solving the problem, which is Congress' irresponsibility with money.  As long as Congress spends more money than it brings in, or as much money as it brings in, we're not going to see things get better.

Also, and Obama talked about this...entitlements.  They have to be dealt with if we're going to reduce the debt and try and jumpstart the economy again.

And I've kinda lost my train of thought, so I'll stop here.

[Vekseid]

Three: In 2006, the amount of tax revenue being spent by the federal government on the interest on the national debt was 39%.  This is not to help pay off the debt.  This is the interest on the debt.  Furthermore, payments in interest on the debt took about 17% of total federal revenue (more than just income taxes).  It is now the single largest expenditure on the budget.  More than defense, and greater than the total cost of running 10 different federal departments, some of which are: Agriculture, Education, Justice, and State.

Wrong. It has never exceeded our defense budget. Total military spending last year was $685 billion.

All the Democrat and Republican arguments over tax boost/spending cuts aren't the real solution.  Even a balanced-budget law isn't the solution.  The solution is that Congress needs to be cut off.  Spending cuts aren't the solution, a spending cap is.  Raising taxes on the rich, and cutting spending for programs that serve no real purpose sound nice, and they need to be done, but neither of those are truly capable of solving the problem, which is Congress' irresponsibility with money.  As long as Congress spends more money than it brings in, or as much money as it brings in, we're not going to see things get better.

Congress does not have responsibility issues. Federal spending as a percentage of revenue has been remarkably consistent since the end of World War II, tending to hover around 20% of GDP. What we have is a revenue crisis, driven solely by shifting the tax burden from the rich to the middle class. What is interesting is that even though the middle class's tax burden is now greater, their share of overall tax revenues has gone down. The effect has been to hollow out the American middle class.

Which makes Hurricane's point rather amusing - the most sensible way to reduce the tax burden on the rich is to actually raise their taxes.

Because then they'll stop paying themselves as much. Because then they'll invest more. Because then the three trillion dollars that corporations and banks have locked up gets released back into the economy, wages and median income rises again.

[ReijiTabibito]

Wrong. It has never exceeded our defense budget. Total military spending last year was $685 billion.

Last year.  I'm talking 2006, not 2010.  According to figures, the amount spent by the DOD on defense in 2006 was around $406 billion, which is as much as we spent on interest.  The fact that the gap between the two has gotten bigger, in the direction of more defense spending and not less, is not a good sign, especially when it's to the tune of about $280 billion in the past four years.  And this coming from the President who said that he was going to get us out of foreign wars, out of the money sink quagmires that were Iraq and Afghanistan.

Congress does not have responsibility issues. Federal spending as a percentage of revenue has been remarkably consistent since the end of World War II, tending to hover around 20% of GDP. What we have is a revenue crisis, driven solely by shifting the tax burden from the rich to the middle class. What is interesting is that even though the middle class's tax burden is now greater, their share of overall tax revenues has gone down. The effect has been to hollow out the American middle class.

And how do you think that tax burden shift came about?    It's not like Congress got out of bed one day and decided to do things differently.  Congress does have responsibility issues.  Namely, in the fact that being elected to the post of US Congressperson means that you have a duty, an obligation, a responsibility to uphold the laws of the land, and to serve all the people, not just the ones with gigantic pocketbooks and toilets made of gold.  Congress has gotten more concerned with being reelected and accumulating political power for whatever side elected them than actually doing their job.  And if we didn't treat Congress like the throwaway job position it is today, if we actually continued the trends for Congressmen that started way back when this country was first founded, and right up to the Second World War, we might not be in this mess.

Because then they'll stop paying themselves as much. Because then they'll invest more. Because then the three trillion dollars that corporations and banks have locked up gets released back into the economy, wages and median income rises again.

Call me a pessimist, call me crazy, call me whatever you like, but I don't think so.  Corporations and banks and rich people have been figuring out ways to dodge around laws and government agencies and find ways to hold on to their precioussssssssssssssssssss money for a long time.  They have lawyers, they have lobbyists, and they are going to fight tooth and nail to keep that money in their hands, because somehow rich people have it in their heads that they earned it, that they're entitled to it, and they're not gonna let anyone take it away from them.

Do I have a distorted view of the rich?  Maybe.  But that doesn't change the fact that everywhere I seem to look, the rich and powerful seem to be only adding to the misery of the middle class, not helping it.

[RubySlippers]

http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

I'm going to direct you to section four of the 14th Amendment its on Wiki but its verbatim.

[The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.]

As I read it and at least one economist it gives a statutary authority that the US debts to meet vital needs is always in effect even bypassing Congress so couldn't the president just enact one executive order to raise the debt ceiling to "what is needed to pay off active obligations already authorized by Congress" without a vote by Congress.

It would be an interesting option and case for the Federal Courts since can one argue with funding programs costing more like Medicaid were approved by the very structure of these programs. the Federal government pays this much and the states the rest. So if more people have to be covered and it costs more he should simply say its getting funded and order it as an example as the cheif officer of the government?

[Zakharra]

Which makes Hurricane's point rather amusing - the most sensible way to reduce the tax burden on the rich is to actually raise their taxes.

No. That merely increases the percentage of the tax burden they pay. It doesn't reduce it at all. If you want to reduce that, then get MORE people to pay taxes.  Get more of the emkiddle class and lower classes to actually pay incomne taxes and NOT gety a tax return. As it is now about 45-50% of the US working population does not pay any income tax. They get a return from the government every year, which means they aren't paying any income taxes at all.

[Zakharra]

http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_Constitution

I'm going to direct you to section four of the 14th Amendment its on Wiki but its verbatim.

[The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.]

As I read it and at least one economist it gives a statutary authority that the US debts to meet vital needs is always in effect even bypassing Congress so couldn't the president just enact one executive order to raise the debt ceiling to "what is needed to pay off active obligations already authorized by Congress" without a vote by Congress.

It would be an interesting option and case for the Federal Courts since can one argue with funding programs costing more like Medicaid were approved by the very structure of these programs. the Federal government pays this much and the states the rest. So if more people have to be covered and it costs more he should simply say its getting funded and order it as an example as the cheif officer of the government?

By that reasoning, why bother with Congress at all? The President could just issue executive orders taking the money the programs need and fuck the Congress or public opinion polls.

[RubySlippers]

Not really I would make the case in setting up the program or agency they give the authorization and obligation until they say so in the law that made it that its to be funded as a national obligation.

I will note the three words authorized by law, does it say funding bill every year?

Section 8 of the US Constitution:

1:  The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

2:  To borrow Money on the credit of the United States;

Now one could make the case here but save for the 14th Amendment which has equal and as an amendment higher standing that is being a later addition to the document has a higher standing as the states and people of the nation changed this. That in effect the Congress may do these things but if they fail the default is the existing program or agency under the later amendment MUST BE funded if lawfully established. That would fall to the chief officer of the United States the President.

Congress to counter this would have to amend the law creating the agency for example to limit funding to Congress in every case one by one and also every program one by one, this includes funds for active war.

Its never been done before that doesn't mean this would be unconsitutional until the Federal Courts overrule the executive order so he should do it then lets see how the courts fall on this. At least until its decided the Treasury department could add debt until they decided it under a 90 day emergency powers declaration then he could always do another.

[Oniya]

No. That merely increases the percentage of the tax burden they pay. It doesn't reduce it at all. If you want to reduce that, then get MORE people to pay taxes.  Get more of the middle class and lower classes to actually pay income taxes and NOT get a tax return. As it is now about 45-50% of the US working population does not pay any income tax. They get a return from the government every year, which means they aren't paying any income taxes at all.

Incorrect.  Look at your paycheck, and you'll see a section marked 'Taxes'.  There are entries for W/H (with-holding), OASDI (Social Security), Medcar (Medicare) - all for Federal - and a second W/H for the state.  When you fill out your Human Resources forms upon gaining employment, you are telling your employer how much of your paycheck to allocate to your taxes.  At the end of the year, when you get your W-2's from the state and the feds, and fill out all the little boxes on your 1040, you are calculating how much more you paid than necessary - or less, for that matter.  In the latter case, you end up paying out to the IRS and/or state.

[gaggedLouise]

Apparently Boehner and the Tea Party people are bent on sending their country into federal bankruptcy, or as close as possible. Talk about electioneering in the senate.

[Vekseid]

Last year.  I'm talking 2006, not 2010.  According to figures, the amount spent by the DOD on defense in 2006 was around $406 billion, which is as much as we spent on interest.  The fact that the gap between the two has gotten bigger, in the direction of more defense spending and not less, is not a good sign, especially when it's to the tune of about $280 billion in the past four years.  And this coming from the President who said that he was going to get us out of foreign wars, out of the money sink quagmires that were Iraq and Afghanistan.

Your figure for 2006 ignores the wars.

And how do you think that tax burden shift came about?    It's not like Congress got out of bed one day and decided to do things differently.  Congress does have responsibility issues.  Namely, in the fact that being elected to the post of US Congressperson means that you have a duty, an obligation, a responsibility to uphold the laws of the land, and to serve all the people, not just the ones with gigantic pocketbooks and toilets made of gold.  Congress has gotten more concerned with being reelected and accumulating political power for whatever side elected them than actually doing their job.  And if we didn't treat Congress like the throwaway job position it is today, if we actually continued the trends for Congressmen that started way back when this country was first founded, and right up to the Second World War, we might not be in this mess.

Well, for the most part, we are electing fundraisers, rather than the best this country has to offer. The only way to fix that is going to be a constitutional amendment, and the only way to enact that is going to be through a mass effort at the state level, as Congress isn't going to vote it in. After a few more years of this, I think popular unrest could be strong enough to see a new Bill of Rights enacted through this method.

Call me a pessimist, call me crazy, call me whatever you like, but I don't think so.  Corporations and banks and rich people have been figuring out ways to dodge around laws and government agencies and find ways to hold on to their precioussssssssssssssssssss money for a long time.  They have lawyers, they have lobbyists, and they are going to fight tooth and nail to keep that money in their hands, because somehow rich people have it in their heads that they earned it, that they're entitled to it, and they're not gonna let anyone take it away from them.

Like I said, two-thirds of wealthy households want their taxes raised.

To me, that doesn't sound like it's a problem with a rich. It sounds like it's a problem with sociopaths and narcissists being able to game the system.

Do I have a distorted view of the rich?  Maybe.  But that doesn't change the fact that everywhere I seem to look, the rich and powerful seem to be only adding to the misery of the middle class, not helping it.

Bill Gates' Giving Pledge, Warren Buffet has been lobbying for needed economic reforms for a decade. The threat this country faces has money, it does not have all of it.

No. That merely increases the percentage of the tax burden they pay. It doesn't reduce it at all. If you want to reduce that, then get MORE people to pay taxes.  Get more of the emkiddle class and lower classes to actually pay incomne taxes and NOT gety a tax return. As it is now about 45-50% of the US working population does not pay any income tax. They get a return from the government every year, which means they aren't paying any income taxes at all.

As Oniya said, you are wrong. The average income tax burden is quite low, but this is true into the very rich because of the ridiculously low capital gains tax rate.

By that reasoning, why bother with Congress at all? The President could just issue executive orders taking the money the programs need and fuck the Congress or public opinion polls.

Congress authorized the budget. Saying that they won't pay for the budget they passed is petulant and childish.

[elone]

Just a crazy idea, but when it comes to incomes and taxes, everyone seems to focus on percentages. Why not look at the dollar amounts.

For instance, If I make $30,000/yr and pay $2,000 in income tax, I am living on $28,000. Not so easy these days.

If I make $20,000,000/yr and pay $15,000,000 in income tax, I am living on $5,000,000. I think I could manage that. The rich just might have to cut down on their lavish expenses. Things like CEO pay versus hourly wage for employees has become totally unbalanced. Not only that, but the middle class in this country is disappearing, a large part because we have lost so much of our manufacturing ability to outsourcing and wage stagnation.

We have too many problems for politicians to focus on "No New Taxes." We also need to stop being the world's policeman and cut defense spending. I think we spend more on defense that the rest of the world combined, a lot of it just waste, I've seen it.

And as said before, even the poor pay taxes, they are deducted from their paychecks. There are also all types of fees, gas tax, sales tax, to name a few.

I have a t-shirt that says "Quit your bitchin'. start a revolution"  At some point when people get so sick of living hand to mouth while others live in luxury it will happen, unless our politicians see the writing on the wall and start doing what is good for the country, instead of doing what they need to do to get reelected. The two party system is totally out of control and unworkable. We need to rethink the hold they have on government thru either term limits or more open access in elections for third and fourth parties.

Of course we can always get China to bail us out and restore order.

I know I have rambled all over the place here, it is late and I'm tired.

[Zakharra]

As Oniya said, you are wrong. The average income tax burden is quite low, but this is true into the very rich because of the ridiculously low capital gains tax rate.[/qupte]

  Look at what I was responding to. Aside from the Medicare and those taxes, the poor do NOT pay income tax. they get everythng back and a large portion of the middle class does to. My mate makes just over $10,000 a year and she gets over $3,000 back from the federal govermnent ever year. That means she isn't paying a single cent in income tax. True she does pay in her paychecks, but when tax time rolls around, she gets is ALL back. Alot of the lower middle class get full refunds too.

Raising the taxes on the wealthy will only make the percentage of the tax revenue they pay even larger. Unless you add more people to the tax rolls, the number of tax payers doesn't change.

Congress authorized the budget. Saying that they won't pay for the budget they passed is petulant and childish.

Look at what I was responding to;

As I read it and at least one economist it gives a statutary authority that the US debts to meet vital needs is always in effect even bypassing Congress so couldn't the president just enact one executive order to raise the debt ceiling to "what is needed to pay off active obligations already authorized by Congress" without a vote by Congress.
It would be an interesting option and case for the Federal Courts since can one argue with funding programs costing more like Medicaid were approved by the very structure of these programs. the Federal government pays this much and the states the rest. So if more people have to be covered and it costs more he should simply say its getting funded and order it as an example as the cheif officer of the government?

  That was reading that it might be legal for the President to completely bypass the Congress to fund a 'neccessary' program or to raise the debt ceiling without Congress's approval.

[ReijiTabibito]

If I recall history, Jefferson needed to raise money to buy the Louisiana Territory (though originally, all he wanted was New Orleans and the Mississippi River, the rest got thrown in as part of the deal), and when Congress refused to budget him the monies to do it, he threatened to hold a national lottery in order to raise the funds to do so.  Congress, of course, not wanting to be undermined, immediately put it in the budget...

[Zakharra]

Like I said, two-thirds of wealthy households want their taxes raised.

I'm calling bs on that.  Right now, there is nothing keeping every one of those households from writing a monthly check to the government for any extra money they feel they have. If they wanted to have higher taxes, they can voluntarily send anything they don't need to the government and it will be glad to take it.  The fact that they aren't is suggestive that if higher taxes were enacted, a lot would find ways to not pay them.

Basically, they are not putting their money where their mouth is.

[Asuras]

I'm going to go to what the writers at The Economist (the smartest guys in the room) have to say about this:

IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.

There is no good economic reason why this should be happening. America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political. Under America’s elaborate separation of powers, Congress must authorise any extension of the debt ceiling, which now stands at $14.3 trillion. Back in May the government bumped up against that limit, but various accounting dodges have been used to keep funds flowing. It is now reckoned that these wheezes will be exhausted by August 2nd.

...

This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.

And the closer you look, the more unprincipled the Republicans look. Earlier this year House Republicans produced a report noting that an 85%-15% split between spending cuts and tax rises was the average for successful fiscal consolidations, according to historical evidence. The White House is offering an 83%-17% split (hardly a huge distance) and a promise that none of the revenue increase will come from higher marginal rates, only from eliminating loopholes. If the Republicans were real tax reformers, they would seize this offer.

Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans. Independent voters should take note.

This is what David Brooks says, a (sane) conservative: (excerpted)

If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.

The members of this movement do not accept the logic of compromise, no matter how sweet the terms.

The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.

The members of this movement have no economic theory worthy of the name.

If the debt ceiling talks fail, independent voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right.

As a Canadian and a New York Times columnist, he is not given to strong language, so this is about as close to profanity as he is capable of.

I had a longer post, but, Christ...

On August 2, the Treasury will be forced to choose between: Do we fund soldiers in the line of fire? Do we pay seniors their social security checks we promised them? Do we fund medicare recipients who need this to get the health care treatment we promised them?

And at the same time, credit markets will freeze. People and businesses won't be able to get loans or mortgages because treasuries are tanking. And then people lose jobs. Lots of people.

How did we get to the point where the Republican Party is threatening this? This is terrorism. They're threatening to blow up the American economy - hell, the world economy - to get what they want.

I'm not a Democrat because I love the party - I'd love to have two choices. But right now, I have to move to New York City to find a Republican congressional candidate that isn't insane. Do you remember when there was discussion about Democrats defunding Bush's war in Iraq? The Democrats made the right choice, and now what are the Republicans threatening. Defunding half of everything, why aren't more people pissed off with this?

The scary thing is that people who actually trade and understand US government debt are already afraid of what happens after August 2, so people are taking out bets that we will default.

The nightmare scenario is that Congress will vote down a bill at the eleventh hour. They did it before in 2008 and it sent the stock market spiraling into oblivion but no one has bothered to blame them for that.

[ReijiTabibito]

If the Republicans are paying any attention to what guys like The Economist and Brooks are saying, then they're going to have to realize that continuing to stonewall is not in their best interest.  Asuras, you made the point that if there is no deal, then the US government would have to stop paying someone.  Two of the groups you mentioned are the military and senior citizens, both groups that have long been voter bases for the Republican party.  Now, call me crazy, but if this doesn't go through, and someone has to stop being paid, even for a couple of months, then that someone is going to demand to know who is responsible for this, and undoubtedly the truth that the GOP was unwilling to negotiate, despite the Dems trying their hardest, will come out.

And how do you think whoever got shafted is going to respond?  By voting, by voting out of power the people who were responsible for their misery.  This is not the time for the Republicans to be pulling off this sort of crap.  I can understand the psychology of wanting to make it seem like Obama has accomplished nothing over his term, and that such a thing would make it easier for them to put their candidate in office, but as I said, this is not the time for that.  This is the time for people to put their goddamn differences aside, stop worrying about political influence and capital, and start doing their damn job.

Because, as far as I can see, Republicans have two choices, and its a question of who they want to suffer.  If they let the bill go on by, yes, they can't claim that Obama did nothing during his career, he will probably win the upcoming election next year, and the GOP will have to go another four years without a person in the White House, and potentially lose a lot of seats in Congress over this whole deal.

If they don't let the bill go on by, and people suffer from a result of it, then no doubt the truth of their unwillingess to compromise (despite being given an amazing concession) will come out, and you can take it to the bank that Obama will win next year, and the Dems will surge into Congress on the premise that Brooks leveled - that the GOP is no longer a group that can truly govern, because they've lost touch with reality and reason.

So, who does the GOP want to suffer?  Themselves?  Or themselves and the American people?

One can only pray that they have enough common sense for the former and not the latter.

[gaggedLouise]

Reading this thread and the news reports makes one think of the Kreuger Crash, the archetypal bonds and businesses collapse, following on the heels of the murder or suicide (which one is still a matter of debate) of the "matchstick king" one of the richest tycoons of his age; the panic that ensued when it turned out some of his companies' issued papers were fake and others just worthless spread into all sides of business life. The idea that any major political party would want to deliberately provoke that kind of collapse (and quite possibly a bigger one) is amazing.

[Vekseid]

Raising the taxes on the wealthy will only make the percentage of the tax revenue they pay even larger. Unless you add more people to the tax rolls, the number of tax payers doesn't change.

No, their burden can go down if the median income increases. That's the reason their burden was lower in the past, after all.

  That was reading that it might be legal for the President to completely bypass the Congress to fund a 'neccessary' program or to raise the debt ceiling without Congress's approval.

They already authorized the program. The only thing the debt limit is is a law saying that the treasury can't go into debt past a certain point to fund such measures. Its constitutionality is questionable.

Reading this thread and the news reports makes one think of the Kreuger Crash, the archetypal bonds and businesses collapse, following on the heels of the murder or suicide (which one is still a matter of debate) of the "matchstick king" one of the richest tycoons of his age; the panic that ensued when it turned out some of his companies' issued papers were fake and others just worthless spread into all sides of business life. The idea that any major political party would want to deliberately provoke that kind of collapse (and quite possibly a bigger one) is amazing.

The question is, will that collapse be enough to shock Americans into action. Part of this country's problem is there is so much wealth that people are stressed, but not despondent. I'm afraid that we might not get anywhere until that changes, for a lot of needless suffering.

[Asuras]

So, who does the GOP want to suffer?  Themselves?  Or themselves and the American people?

One can only pray that they have enough common sense for the former and not the latter.

One can indeed pray, and apparently you, me (although I'm an athiest) and The Economist are praying on that.

But I remember 2008, and before the Tea Party even existed, their ilk voted down a bill that would have saved trillions of dollars in the financial system and prevented a stock market crash, and now there are more of them in Congress. And they really might do it again.

Reading this thread and the news reports makes one think of the Kreuger Crash, the archetypal bonds and businesses collapse, following on the heels of the murder or suicide (which one is still a matter of debate) ofthe "matchstick king" one of the richest tycoons of his age. The idea that any major political party would want to deliberately provoke that kind of collapse (and quite possibly a bigger one) is amazing.

I don't think it's deliberate honestly. I think the Republicans are beholden to a very vocal and, frankly, psychotic portion of their voters and those voters don't understand what the debt ceiling is.

I mean, there are polls showing that 47% of Americans don't want to raise the debt ceiling but I don't think those people know what that means. There is no reason on God's green earth not to raise the goddamn debt ceiling. A lot of that 47% will lose their jobs if we don't.

[ReijiTabibito]

I don't think it's deliberate honestly. I think the Republicans are beholden to a very vocal and, frankly, psychotic portion of their voters and those voters don't understand what the debt ceiling is.

Hey, now, let's watch what we say.  Calling those people psychotic is an insult to psychotic people.  Because even someone suffering from psychosis can have moments of rationality and lucidity.

[Oniya]

Hey, now, let's watch what we say.  Calling those people psychotic is an insult to psychotic people.  Because even someone suffering from psychosis can have moments of rationality and lucidity.

I think a more appropriate term would be sociopathic, assuming they aren't just plain ignorant.  Because, if they know what the consequences of their actions are, and they are still trying to go through with it to further their own personal ends, they have shown that they have absolutely no sense of empathy.



*mandatory disclaimer:  I am not a psychologist, nor do I play one on TV.  This is not intended to be a medical diagnosis, or anything more than a frustrated attempt to compare people who would rather see their country's economy implode than cooperate with 'the other side' to people like Ted Bundy.  If you feel I owe Mr. Bundy an apology, I'll break out the Ouija board.

[RubySlippers]

I'm sick of this bullshit in Congress. Okay they want to play the president has to get a pair, invoke the 14th amendment authority to raise the debt limit 90 days as an emergency power with a nice legal defense for this ready for court. Its a later amendment it should amend any language in the core document regarding funding. He has a case like this:

1. The 14th amendment grants the executive office of the nation the duty to pay off general debts unless the Congress in ordering the program or agency directs funding from a tax or special fee or limits it this comes from general revenues.

2. The 14th amendment as its an amendment passed later overrides the core document in the funding and operations of any government agency or program to be done jointly with Congress with the day to day operations the office of the executive brance and the Treasury both working together.

3. I'm ready to fight this out in court, my legal team is ready so BRING IT until the courts decide this matter I will assume this authority is valid under my executive order.

Then see what happens we have a pansy in office we need a Truman someone to say I head the executive branch, the buck stops at my desk and I will do what I have to for the best interest of the nation and you (Congress) are in the way of that.

Just because no one has done this doesn't mean its unconstitutional all the wordling in the 14th amendment, section 4 clearly gives this statutory constitutional power on par with any expressed power earlier in the document, and should take precedent being a AMENDMENT. It doesn't say it overrides the original powers but it doesn't have to do that.

[Zakharra]

No, their burden can go down if the median income increases. That's the reason their burden was lower in the past, after all.

How does that make sense?  If the only tax increase in on the wealthy, then the percentage they pay goes up. They'll be paying an even larger share of the income tax than ever before. Their burdon would only go down if new tax payers were added to the rolls. IE, more people actually paying taxes.  Just making the wealthiest pay more will not make the wealthiest burdon go down.

[Oniya]

If the median income goes up, then more people will come out of the poverty level.  If more people come out out of the poverty level, that means there are more people earning taxable income.  The more people that are earning taxable income, the more people have to pay taxes on that income.

[Revolverman]

Wouldn't that just mean more tax money for government, rather then lowered tax burden on anyone?

[Zakharra]

If the median income goes up, then more people will come out of the poverty level.  If more people come out out of the poverty level, that means there are more people earning taxable income.  The more people that are earning taxable income, the more people have to pay taxes on that income.

How does that raise people out of poverty? If the wealthy are paying more, that does not mean the poor are getting jobs.  More taxes doesn't mean more tax payers.

Wouldn't that just mean more tax money for government, rather then lowered tax burden on anyone?

*nod* As I see it, all it means is the wealthy end up paying even more of the tax burden. The 1% and 10% most wealthy now end up paying an even larger share of the income tax  than before.

[Zakharra]

  I have a question. If the debt ceiling isn't raised and we 'default', why are they saying that social security checks would stop? I thought Soc Sec money was in a fund by itself and not in the general fund.  If the checks do stop, I guess thaty means that the Soc Sec lock box/trust fund doesn't exist and all of the monet that comes in for Soc Sec is immediately spent on other things.

[Oniya]

How does that raise people out of poverty? If the wealthy are paying more, that does not mean the poor are getting jobs.  More taxes doesn't mean more tax payers.

The median income going up has nothing to do with the wealthy paying more, and everything to do with the low-to-middle incomes earning more.  The median of a group is a measure of the central tendency.  It's not the most common income (that would be the modal income), or the sum of everybody's income divided by the number of people (that would be the mean income).  It's what you get when you line up all of your data in increasing order and look at the very middle number.  If you have only a few high numbers, and a lot of low numbers, the median is going to be lower than the average or mean.

IF a data set changes, and the median goes up, it's because you have fewer people below your starting median value.  In the case of incomes, that would be more people earning more.  As more people can contribute in taxes, the overall burden, percentage-wise, of the wealthy goes down. 

[Vekseid]

  I have a question. If the debt ceiling isn't raised and we 'default', why are they saying that social security checks would stop? I thought Soc Sec money was in a fund by itself and not in the general fund.  If the checks do stop, I guess thaty means that the Soc Sec lock box/trust fund doesn't exist and all of the monet that comes in for Soc Sec is immediately spent on other things.

Social security is supposed to be considered actual debt and not mere appropriation so it more clearly falls under the 14th amendment provision. Roughly three trillion of the debt is owed to the social security fund.

Thing is social security + interest + pensions account for some 75% of our revenue. At a minimum, either half of defense (including the wars) or half of medicare doesn't get paid, even if everything else doesn't get cut. Nearly the entire budget is insurance + interest + army.

How does that make sense?  If the only tax increase in on the wealthy, then the percentage they pay goes up. They'll be paying an even larger share of the income tax than ever before. Their burdon would only go down if new tax payers were added to the rolls. IE, more people actually paying taxes.  Just making the wealthiest pay more will not make the wealthiest burdon go down.

A lot of economics 'doesn't make sense' at first glance. There are many game theory (the study of rational agents in competition) traps that groups of people can get into, and ideally, laws where they exist should guide us out of these traps, and not into them. The current liquidity crisis is one such trap, and if we remain in it, America will simply cease. It's not a question of what your opinion is. America, as a nation, simply will not continue this way. You can beg and bleat and claim that that it's wrong to raise taxes, but it is synonymous with the fall of America. Go look up why the South didn't have any money in the Civil War. It's hilarious that the slaveowners who drove that war guaranteed its own failure by refusing to pay for it.

It worked great in the short term. In the end, they lost everything.

Anyway. Just because you take in a billion dollars, does not mean you have to pay it to yourself. You can, alternately, take everything that comes in over the top tier and immediately reinvest it. On top of actually getting wealthier, in real terms, faster, it means that all the people who benefited from your investment are also getting wealthier, faster. We don't call the era of 70-90% taxes the long boom for nothing.

[Zakharra]

The median income going up has nothing to do with the wealthy paying more, and everything to do with the low-to-middle incomes earning more.  The median of a group is a measure of the central tendency.  It's not the most common income (that would be the modal income), or the sum of everybody's income divided by the number of people (that would be the mean income).  It's what you get when you line up all of your data in increasing order and look at the very middle number.  If you have only a few high numbers, and a lot of low numbers, the median is going to be lower than the average or mean.

IF a data set changes, and the median goes up, it's because you have fewer people below your starting median value.  In the case of incomes, that would be more people earning more.  As more people can contribute in taxes, the overall burden, percentage-wise, of the wealthy goes down.

Which has nothing to do with this question I asked about  raising taxes on the wealthy. By all means, tax more people, but -just- raising the taxes on the wealthty, as some  here have suggested will do absolutely nothing towards easying the tax burdon.  Because right now, the wealthy are paying a huge portion of the income tax burden. raising their taxes just increases the amount of that burden.

[Zakharra]

Social security is supposed to be considered actual debt and not mere appropriation so it more clearly falls under the 14th amendment provision. Roughly three trillion of the debt is owed to the social security fund.

Thing is social security + interest + pensions account for some 75% of our revenue. At a minimum, either half of defense (including the wars) or half of medicare doesn't get paid, even if everything else doesn't get cut. Nearly the entire budget is insurance + interest + army.

Or parts of other programs are cut. It doesn't automatically have to be sliced out of the defense budget.

Anyway. Just because you take in a billion dollars, does not mean you have to pay it to yourself. You can, alternately, take everything that comes in over the top tier and immediately reinvest it. On top of actually getting wealthier, in real terms, faster, it means that all the people who benefited from your investment are also getting wealthier, faster. We don't call the era of 70-90% taxes the long boom for nothing.

But they end up with less money anyways since it's taken from them in taxes. Any gain would be minumal at best.  If I made alot of money and had 70-90% of it taken away in taxes, that would motivate me to do one of three things. Either find every single tax loophole I could to lower my tax rate, move my business oversees to avoid US tax law or just stop making as much.

A question then.  What would the money reinvested in?  With the current Legislative and Executive branches, I cannot see them doing anything intelligent with if. Nor do I see them reigning in any spending. What I can see them doing is spending even more money since more is coming in.

[Oniya]

Raising the taxes on the wealthy will only make the percentage of the tax revenue they pay even larger. Unless you add more people to the tax rolls, the number of tax payers doesn't change.

No, their burden can go down if the median income increases. That's the reason their burden was lower in the past, after all.

How does that make sense?  If the only tax increase in on the wealthy, then the percentage they pay goes up. They'll be paying an even larger share of the income tax than ever before. Their burdon would only go down if new tax payers were added to the rolls. IE, more people actually paying taxes.  Just making the wealthiest pay more will not make the wealthiest burdon go down.

If the median income goes up, then more people will come out of the poverty level.  If more people come out out of the poverty level, that means there are more people earning taxable income.  The more people that are earning taxable income, the more people have to pay taxes on that income.

How does that raise people out of poverty? If the wealthy are paying more, that does not mean the poor are getting jobs.  More taxes doesn't mean more tax payers.

*nod* As I see it, all it means is the wealthy end up paying even more of the tax burden. The 1% and 10% most wealthy now end up paying an even larger share of the income tax  than before.

The median income going up has nothing to do with the wealthy paying more, and everything to do with the low-to-middle incomes earning more.  The median of a group is a measure of the central tendency.  It's not the most common income (that would be the modal income), or the sum of everybody's income divided by the number of people (that would be the mean income).  It's what you get when you line up all of your data in increasing order and look at the very middle number.  If you have only a few high numbers, and a lot of low numbers, the median is going to be lower than the average or mean.

IF a data set changes, and the median goes up, it's because you have fewer people below your starting median value.  In the case of incomes, that would be more people earning more.  As more people can contribute in taxes, the overall burden, percentage-wise, of the wealthy goes down. 

Which has nothing to do with this question I asked about  raising taxes on the wealthy. By all means, tax more people, but -just- raising the taxes on the wealthty, as some  here have suggested will do absolutely nothing towards easying the tax burdon.  Because right now, the wealthy are paying a huge portion of the income tax burden. raising their taxes just increases the amount of that burden.

This is the context that I was responding in and to.  I expanded on Vekseid's comment that if the median income were to go up, that it would lower the tax burden on the rich.  You quoted my post and asked how that raised people out of poverty and I explained how the median income would be a consequence of people being raised out of poverty.

[Vekseid]

Or parts of other programs are cut. It doesn't automatically have to be sliced out of the defense budget.

Err, I meant if everything else was cut. Everything else is a paltry sum. So yes, defense has to be cut, or revenue has to be raised. A part of the problem is we can no longer 'put off' interest when this happens.

But they end up with less money anyways since it's taken from them in taxes.

Hint: Money isn't wealth. Money is not meant to be hoarded. Money is meant to be exchanged for goods, services, and investments. When money is being hoarded, as it is now, the result is a liquidity crisis - interest rates remain low, unemployment remains high, the rich get richer because even though the rest of the country is not earning any more, they are producing more for the rentier class.

Any gain would be minumal at best.

A brief glance at history shows that you are wrong. Libertarians cite the Long Depression as their ideal society. The Long Depression gave us robber barons, oil monopolies, company towns and scrip.

The Long Boom, which Keynsians cite
- Gave us the computer
- Gave us the Internet
- Landed a man on the moon
- Saw the establishment of the Middle Class
- Saw the greatest rise of standard of living in world history

  If I made alot of money and had 70-90% of it taken away in taxes, that would motivate me to do one of three things. Either find every single tax loophole I could to lower my tax rate,

I've pointed out the perfect, legally accepted loophole each and every time we've had this discussion. And each and every time, you have ignored it.

move my business oversees to avoid US tax law or just stop making as much.

Then good riddance to bad rubbish. Someone more respectable will take your place.

Name one brilliant inventor that started with billions.

The people with money are not this nation's best and brightest. The conservative movement, as a whole, has in fact been about denigrating this nation's best and brightest. Those who sacrifice of themselves to do great things for this nation and this world. Especially in the military. They happily cut armor for troops and veteran's benefits, hamper their ability to vote all the while going on a warpath.

There is nothing honorable about that. It's deplorable, disgusting. I find the fact that people on the right, even on these forums, even tolerate that shit with their silence is disgusting. How much more of this before we get a Pol Pot or Great Leap Forward in America? An actual war on the 'intellectual class'? Do you seriously think that that is a good thing, and if not, why tolerate it?

A question then.  What would the money reinvested in?  With the current Legislative and Executive branches, I cannot see them doing anything intelligent with if. Nor do I see them reigning in any spending. What I can see them doing is spending even more money since more is coming in.

In Keynesian practice, the idea is yes, pay down the debt after the economy recovers. Take a look at the big ticket items
- Universal Healthcare. Every insurance is just another form of tax. This actually saves the nation as a whole about $400 billion per year. Not doing it is crazy.
- Reducing reliance on fossil fuels. These are, largely, initial investment expenses. You invest directly in various startups and nuclear power stations. I would prefer keeping nuclear power production out of private hands and in an easily audited local public level, though, to prevent another e.g. Fukushima.
- Rebuilt ailing infrastructure. Roads, bridges, etc. Again, these are mostly one-time expenses.
- I would be happy to see a reinvigorated space program with a real budget more comparable or even exceeding the military's. At least it would be something to be truly proud of, rather than spending $700 billion per year and gloating about how efficiently we can kill brown people.

And the simple solution to making sure that they do in fact pay down the debt when it is done is to stop electing liars who claim to be conservative.

[Asuras]

When money is being hoarded, as it is now, the result is a liquidity crisis - interest rates remain low

A quibble...

When people hoard money, interest rates are high, because the people hoarding money won't lend money unless they get a lot of interest for it. That's generally the case.

We have low interest rates right now because of a very strange situation - banks are rolling in it because the Fed gave it to them, but they aren't lending it because A) higher lending standards, B) a general suspicion of lending aggressively, C) the poor shape of private and corporate credit, D) the banks are still paying off the hangover from 2008 and they need to build up cash before they have the base to start lending again, and E) real concern about future instability that makes loans doubtful.

So we have low interest rates for anyone who can get it, but people aren't lending. Still. And that's why we still don't have jobs.

[Oniya]

Not to mention the fact that many people have ended up with credit ratings that look more like batting averages.  Even when the economy was good, a credit rating like that would be considered a bad risk.

[Vekseid]

A quibble...

When people hoard money, interest rates are high, because the people hoarding money won't lend money unless they get a lot of interest for it. That's generally the case.

We have low interest rates right now because of a very strange situation - banks are rolling in it because the Fed gave it to them, but they aren't lending it because A) higher lending standards, B) a general suspicion of lending aggressively, C) the poor shape of private and corporate credit, D) the banks are still paying off the hangover from 2008 and they need to build up cash before they have the base to start lending again, and E) real concern about future instability that makes loans doubtful.

So we have low interest rates for anyone who can get it, but people aren't lending. Still. And that's why we still don't have jobs.

That is hardly the entire picture. A big part of why interest rates are so low is because people are already too indebted and aren't asking for more loans in the first place.

[Asuras]

Oh, and now Moody's, one of the big three credit agencies, has put the US under review for a ratings downgrade

[gaggedLouise]

Oh, and now Moody's, one of the big three credit agencies, has put the US under review for a ratings downgrade

Junk rating is the new black.

[Revolverman]

Side supply really fucked us good, didn't it?

[Asuras]

Side supply really fucked us good, didn't it?

First, it's supply-side...

Second....no, we really can pay this off. We just had the president offer a $4 trillion plan to get the deficit under control that would do it and the only reason we're facing a downgrade is because Congress is so intransigent.

[Zakharra]

Hint: Money isn't wealth. Money is not meant to be hoarded. Money is meant to be exchanged for goods, services, and investments. When money is being hoarded, as it is now, the result is a liquidity crisis - interest rates remain low, unemployment remains high, the rich get richer because even though the rest of the country is not earning any more, they are producing more for the rentier class.

Hint: Money IS wealth. It's not the only indication of wealth but it is what defines mostly defines wealth.  Property, businesses, anythng else means nothing if you do not have moeny to pay for it.  Taxes are paid with money. You buy goods and services with money. Everything and I mean -everything- ,in this world is measured by how much is it worth in monetary value.

The rentier class also includes retired people, the elderly and anyone that has stock.

Then good riddance to bad rubbish. Someone more respectable will take your place.

Raise taxes to the 70-90% you seem to want then at and watch damned near every single one of those people scream at the pain. You'd see a flow of wealth out of the US as many of these people would find it suddenly painful they didn't have the money they used to have. Make it less costly for businesses to have mafucatoritng plants in the US and they will be more inclinced to stay.

As I've said, pretty much every one of them is a friking hypocrite if they do not give their money to the government now voluntarily.

Name one brilliant inventor that started with billions.

I cannot, but every one of them has the money they earned. As faras I know, not one is giving away every penny they do not need.

The people with money are not this nation's best and brightest. The conservative movement, as a whole, has in fact been about denigrating this nation's best and brightest. Those who sacrifice of themselves to do great things for this nation and this world. Especially in the military. They happily cut armor for troops and veteran's benefits, hamper their ability to vote all the while going on a warpath.

There is nothing honorable about that. It's deplorable, disgusting. I find the fact that people on the right, even on these forums, even tolerate that shit with their silence is disgusting. How much more of this before we get a Pol Pot or Great Leap Forward in America? An actual war on the 'intellectual class'? Do you seriously think that that is a good thing, and if not, why tolerate it

The liberals/Democrates are also very willing to cut military spending by large amounts. They'd likely cut things like armor, medical, weapons and weapon development.  Every time something comes up to be cut, the military is the first thing I ever hear mentioned.  Intellectuals are also some of the stupidist p[eople.  I would rather have someone with rteal world experience in charge, not am ivory tower person who wants to make his theories reality.

Their prefered method  of solving a problem is to also throw even more money at it. A program is failing? Give it several billion more and if that doesn't work, give it even emore money. And they are very unlikely to want to discuss any of their sacred cows like Soc Sec, Medicare or those programs. 

Look at how they fought against changing Welfare.  Even now, they will very likely want unemployment extended when it runs sout and it's been extended how long now? How many months has the government been paying people for not working? 20, 24, 36? How long should unemployment last before it ends? How long can it last before it runs into economic trouble?

[Vekseid]

  Intellectuals are also some of the stupidist p[eople.

I had a much longer post written out, but I feel this needs to be highlighted first. Especially when I referenced Pol Pot and the Great Leap Forward - the two previous attempts at bringing down the intellectual class in their respective nations.

With this, along with your 'hypocrites' comment, you have insulted many members here. Myself included. If all you are going to do is to call the best of this community hypocrites and stupid, there is no rational basis for discussion with you, because you are no longer speaking from a rational platform.

You making light of the deaths of tens of millions is not appreciated. There is not one nation on this planet, in all of history, that has not been grievously wounded by its anti-intellectual movement. And you with this, and putting your ideology before facts, are aligning yourself with that movement.

It isn't healthy. It's deadly dangerous.

And I would ask you, kindly, to stop.

[Alsheriam]

Hey, look. It's a silly trickle-down person. Let's laugh at her.

[Oniya]

Hey, look. It's a silly trickle-down person. Let's laugh at her.

That isn't any more 'right'.  However, I would point out that Bill Gates, Warren Buffet and George Lucas - people that are indisputably brilliant and have 'earned everything that they have' - are among the nations top charity donators (i.e., giving away money that they don't need).  So there's three.  And here's more.

[Zakharra]

I had a much longer post written out, but I feel this needs to be highlighted first. Especially when I referenced Pol Pot and the Great Leap Forward - the two previous attempts at bringing down the intellectual class in their respective nations.

With this, along with your 'hypocrites' comment, you have insulted many members here. Myself included. If all you are going to do is to call the best of this community hypocrites and stupid, there is no rational basis for discussion with you, because you are no longer speaking from a rational platform.

You making light of the deaths of tens of millions is not appreciated. There is not one nation on this planet, in all of history, that has not been grievously wounded by its anti-intellectual movement. And you with this, and putting your ideology before facts, are aligning yourself with that movement.

It isn't healthy. It's deadly dangerous.

And I would ask you, kindly, to stop.

  Wait..  am I wanting the deaths of intellecuals? No. I never said that in any way, Vekseid. You have to stretch what I actually said pretty far to get close to what Pol Pot and those types did.

I mean no insult. I  should have clarified that intellectuals are just as capable of making the same stupid mistakes everyone else does. Just because they are an intellectual does not mean they're good at everything and theories often have a way of running into the real world and crashing.  Intellectuals don't necessarily mean they are the best.  That is what I meant.

As for hypocrisy, I was pointing out in your comment that 2/3 or so of the wealthier households wanting to be taxed more, those ones are hypocrites if they are not voluntarily giving the government more of their own money voluntarily.  If you're doing it already, then more power to you, but I feel that if you are not doing it already voluntarily, then yes, you are a hypocrite. "I want to government to raise my taxes, but until they do, I won't give them anymore of my money."  And I can bet most of them would scream if they were taxed at the levels you want. 70-90%

[Synecdoche17]

The rentier class also includes retired people, the elderly and anyone that has stock.

How does it include retired people and the elderly? That makes no sense, unless you somehow believe social assistance programs are the same as rentier income (which they aren't, especially in the US, because most of them are based on workers' input into the system).

Raise taxes to the 70-90% you seem to want then at and watch damned near every single one of those people scream at the pain. You'd see a flow of wealth out of the US as many of these people would find it suddenly painful they didn't have the money they used to have. Make it less costly for businesses to have mafucatoritng plants in the US and they will be more inclinced to stay.

Oh God, I actually cringed when I read this. You really don't have any idea how this post makes you look, do you? Just do yourself a favor and google income tax rates in the US before you post. Marginal income tax rates were at 92% in the 1940s and 1950s, the hey-day of Ford, GM, and the other great American manufacturers. Today, the top tax rate in the US is at a pathetic 35%, and we're watching our jobs ebb away. If low taxes are so great, why aren't the Caimans Islands so rich? All low taxes do is turn a country into a haven for tax evaders and family heirs.

I cannot, but every one of them has the money they earned. As faras I know, not one is giving away every penny they do not need.

Does Paris Hilton deserve the money she has? Do the Kardashians? It's very ironic that most of the people who actually DO earn the money they have are all in favor of giving it away - Oniya pointed out a few of the most prominent examples, but check out anyone who's taken Gates' Giving Pledge.

The liberals/Democrates are also very willing to cut military spending by large amounts. They'd likely cut things like armor, medical, weapons and weapon development.

We spend more on military than the next fourteen nations combined. Every year. We repeatedly use billion-dollar destroyers to take out a handful of Somali pirates on a cheap dinghy, or pick off tribal leaders in the boonies of Pakistan with flying robots equipped with heat-seeking missiles. At some point, possibly the point where we acquired the power to eliminate all life on Earth repeatedly, we should probably have started reducing spending on it.

You know the best part about US military spending, right? We are subsidizing all of our allies' LACK of spending. I.e., there are many countries right now who are enjoying low tax rates and gov't spending because they trust in Uncle Sam to save them from the country next door if things go wrong. Everybody who supports current levels of military spending is effectively supporting free welfare for the French. Savor that, please.

Intellectuals are also some of the stupidist p[eople.  I would rather have someone with rteal world experience in charge, not am ivory tower person who wants to make his theories reality.

Scuse me if I'm being rude, but the next time you call someone stupid on the Internet, I think it would be a good idea if you double-checked to be sure you spelled "stupid" right. It doesn't make you look good.

Their prefered method  of solving a problem is to also throw even more money at it. A program is failing? Give it several billion more and if that doesn't work, give it even emore money. And they are very unlikely to want to discuss any of their sacred cows like Soc Sec, Medicare or those programs.

If you are on a sinking ship, and despite furious bailing the ship continues to sink, should you just stop bailing entirely? Or get the rest of the passengers to help bail?

Look at how they fought against changing Welfare.  Even now, they will very likely want unemployment extended when it runs sout and it's been extended how long now? How many months has the government been paying people for not working? 20, 24, 36? How long should unemployment last before it ends? How long can it last before it runs into economic trouble?

It never runs into economic trouble. In fact, it prevents economic trouble. Look, we're both on this website so we can play pretend, right? So play pretend with me for a moment and imagine we're laid-off factory workers in one of those Michigan towns that got hit hard by outsourcing. There's 5,000 people just like us who got laid off simultaneously and no one in town who's willing to hire. What's the first thing you're going to do, besides look for a job? Me, I'm going to start cutting costs. No more movie tickets. No more ice cream, or magazine subscriptions. When you have no income, you have to save. When we all do that, it kills the movie theater, it shuts down the ice cream parlor, it shutters the magazine. That's what a depression does - it kills healthy businesses because their customers stop buying in order to save money. Welfare doesn't just help unemployed people - it saves businesses and keeps jobs going.

[Alsheriam]

You know the best part about US military spending, right? We are subsidizing all of our allies' LACK of spending. I.e., there are many countries right now who are enjoying low tax rates and gov't spending because they trust in Uncle Sam to save them from the country next door if things go wrong. Everybody who supports current levels of military spending is effectively supporting free welfare for the French. Savor that, please.

*Puts on his former Army man beret*

While I do know my fair share of economics, the economics part of the argument are pretty much settled and established and I don't particularly feel the need to whip the same ol' horse over and over again, but I reckon I ought to provide a bit more detailed insight into the military side of things.

I think there's nothing particularly wrong with cutting military spending. It's indeed true that US military spending is subsidizing the defense costs of significant swathes of NATO. Particularly, Europe. Whilst Britain has been pulling their own respectable weight in Afghanistan, Iraq and most recently, Libya, the rest of NATO's EU member states have been less than impressive. Case in point: 3 weeks into the bombing campaign of Libya, the EU side ran out of munitions. That's right, folks. They ran out of bombs after just 3 weeks. For one, the US ought to pull their bases out of nations that no longer require the troop presence, such as Germany. There is no existing conventional security threat against Germany nor the rest of the West, what with the Russians having problems with their own military apparatus. The German military, the Bundeswehr all things considered are a well-trained and well-equipped force. Their lackluster performance in Afghanistan and Iraq were not at fault with the troops themselves, but the politicians who imposed Rules of Engagement that bordered upon the silliness of tag played by Kindergartners.

Andrew Exum from CNAS (Center for a New American Security) reported receiving "warnings" from European civilian officials during recent meetings that if the US continued to show weak performance for security in the Middle East, the EU might have to build up their own capabilities. To which, Exum replied was an excellent idea. He, too thinks that the US is overextending itself with its colossal military spending. If the EU would develop their own capabilities to deal with threats in the Middle East, whilst allowing the US to cut back their losses it'd be a double boon for both of them.

That's just one of the ways military spending can be cut. Another way is by forcibly shutting down incredibly expensive pet projects that have no real use. Case in point again, the F-22 and F-35 jet development debacles. Both planes have been bleeding billions and years beyond schedule, and for the past 10 years have showed no real capability advantage over 40 year-old design planes like F-16 or F-14 that have been delivering air strikes effectively over the skies of Iraq and Afghanistan. Outgoing Defense Secretary Robert Gates was wise in putting his foot down on those two stupidly expensive projects, and many more.

We repeatedly use billion-dollar destroyers to take out a handful of Somali pirates on a cheap dinghy, or pick off tribal leaders in the boonies of Pakistan with flying robots equipped with heat-seeking missiles.

I think I'll have to take issue with that. Destroyers, missile frigates, submarines and the like were designed and deployed to mainly serve as escorts for carriers, which have been the main avenue of power projection by the US Navy since the post-WWII era. These destroyers were built for conventional conflict and to shoot down and chase after Somali pirates are considered OOTW (Operations Other Than War), and hence a secondary purpose. There's still plenty of use for billion-dollar destroyers: look at China. They have recently launched their first aircraft carrier, and carrier-launched jet. While they are yet to be fully operational and integrated into the PLAN (People's Liberation Army Navy), it's only a precursor for what is to come. Those destroyers need to stay.

As for the "flying robots", they too, serve a purpose. UAVs (Unmanned Aerial Vehicles) are proving more and more indispensable to ground troops as they provide treasure troves of information that satellite photos could never hope to reveal, and they serve as a cost-effective method to taking out threats and high-value targets (e.g. Taliban commanders, Osama bin Laden's aides, et al.) without needing to insert and deploy troops on the ground. Trying to send an expeditionary force into Pakistan's tribal regions is suicide not just for the troops who will get dogpiled by the tribal fighters and Taliban combined, but also political and diplomatic suicide.

Hope the insight helps.

[Oniya]

Oniya pointed out a few of the most prominent examples, but check out anyone who's taken Gates' Giving Pledge.

That's actually the list I linked to.  :-)

It never runs into economic trouble. In fact, it prevents economic trouble. Look, we're both on this website so we can play pretend, right? So play pretend with me for a moment and imagine we're laid-off factory workers in one of those Michigan towns that got hit hard by outsourcing. There's 5,000 people just like us who got laid off simultaneously and no one in town who's willing to hire. What's the first thing you're going to do, besides look for a job? Me, I'm going to start cutting costs. No more movie tickets. No more ice cream, or magazine subscriptions. When you have no income, you have to save. When we all do that, it kills the movie theater, it shuts down the ice cream parlor, it shutters the magazine. That's what a depression does - it kills healthy businesses because their customers stop buying in order to save money. Welfare doesn't just help unemployed people - it saves businesses and keeps jobs going.

Exactly.  Right now, my work depends on government contracts, so it's dicey at the moment.  Mr. Oniya is working the Ren Faire, because he actually found a job opening there (unlike the local businesses who are only interested in hiring the people who will work at minimum wage because they still live at home, and don't have to support anyone), and brings in about $100/week.  Our housemate is on Workman's Comp, which is constantly trying to cut her off despite the fact that her doctors say she'll never get better than 50% mobility with ongoing therapy. 

We do not go out for meals.  We don't go to movies.  We buy the cheapest brand of everything.  I even hesitate before buying a skein of embroidery floss for 37c.  Everything we earn goes towards the mortgage (which is in forbearance), food, and utilities (which I still have to juggle - Internet is necessary for work, though).  We don't provide any support for local businesses because we can't.  Therefore, they close.  Therefore, they don't hire.  Therefore, there are more people out of work.

[Zakharra]

How does it include retired people and the elderly? That makes no sense, unless you somehow believe social assistance programs are the same as rentier income (which they aren't, especially in the US, because most of them are based on workers' input into the system).

Pension plans, money placed in the stock market, places like that.  If I remember right, money being earned without actually working for it.

Oh God, I actually cringed when I read this. You really don't have any idea how this post makes you look, do you? Just do yourself a favor and google income tax rates in the US before you post. Marginal income tax rates were at 92% in the 1940s and 1950s, the hey-day of Ford, GM, and the other great American manufacturers. Today, the top tax rate in the US is at a pathetic 35%, and we're watching our jobs ebb away. If low taxes are so great, why aren't the Caimans Islands so rich? All low taxes do is turn a country into a haven for tax evaders and family heirs.

There's also the economy of the area to take into account too. The '40s and 50s were a completely different culture too. Soc Sec and Medicare weren't the massive burdens they are now and there wasn't the world economy that exists now.Things have changed a lot and it's more or less impossible to make them like what they were in the 40-50s. At the technological, economic and communications-wise, the world is connected at a level unprecedented back then. The auto makers also did not face the competition with foreign auto makers they do now. Plus as it came up, how many of the pensiosners were the companies supporting? Over time that built up until they were able to get the government to take on that support (I believe).

Does Paris Hilton deserve the money she has? Do the Kardashians? It's very ironic that most of the people who actually DO earn the money they have are all in favor of giving it away - Oniya pointed out a few of the most prominent examples, but check out anyone who's taken Gates' Giving Pledge.

She inherited it. Unfortunately for some, you cannot take away money like that. Those who earn it seem more willng to give it to charities where they know it will do good.

We spend more on military than the next fourteen nations combined. Every year. We repeatedly use billion-dollar destroyers to take out a handful of Somali pirates on a cheap dinghy, or pick off tribal leaders in the boonies of Pakistan with flying robots equipped with heat-seeking missiles. At some point, possibly the point where we acquired the power to eliminate all life on Earth repeatedly, we should probably have started reducing spending on it.

You know the best part about US military spending, right? We are subsidizing all of our allies' LACK of spending. I.e., there are many countries right now who are enjoying low tax rates and gov't spending because they trust in Uncle Sam to save them from the country next door if things go wrong. Everybody who supports current levels of military spending is effectively supporting free welfare for the French. Savor that, please.

Uumm..  yes. We're the world's police and Search and Rescue. We built up that power competing against the USSR.  It would have been folly to not keep a strong military at that time.  That's allowed the European nations to spend more money on other things than the military. I do agree we should reduce some military spending, close some bases and such. How much though is more difficult to say.

Alsheriam says it better than I do.

If you are on a sinking ship, and despite furious bailing the ship continues to sink, should you just stop bailing entirely? Or get the rest of the passengers to help bail?

I'd ask them to bail.

It never runs into economic trouble. In fact, it prevents economic trouble. Look, we're both on this website so we can play pretend, right? So play pretend with me for a moment and imagine we're laid-off factory workers in one of those Michigan towns that got hit hard by outsourcing. There's 5,000 people just like us who got laid off simultaneously and no one in town who's willing to hire. What's the first thing you're going to do, besides look for a job? Me, I'm going to start cutting costs. No more movie tickets. No more ice cream, or magazine subscriptions. When you have no income, you have to save. When we all do that, it kills the movie theater, it shuts down the ice cream parlor, it shutters the magazine. That's what a depression does - it kills healthy businesses because their customers stop buying in order to save money. Welfare doesn't just help unemployed people - it saves businesses and keeps jobs going.

That money has to come from somewhere, and added on top of the additional spending it adds up. Unemployment was never intended to be used for years. How long should it last then? At what point should it end? If the situation doesn't improve, where will they get the money from to continue to pay unemployment?

A side question, is unemployment taxable income?

[Alsheriam]

I will still have to point out that conservatives and Republicans who demand that the military deserves a blank check is utter folly, and crying about liberals and Democrats wanting to slash military spending is even greater stupidity. One of the fundamentally basic economic questions always lies in butter vs guns, and you cannot simply want both and get your cake and eat it. The US is no longer a tremendously prosperous nation with lots of additional economic capacity to spare.

In other news, yes, unemployment income is passively taxable income. It pays sales tax whenever something is bought, and the revenue received by retailers taking in unemployment income pays for property tax which the landlord/landlady has to pay.

[Oniya]

Pension plans, money placed in the stock market, places like that.  If I remember right, money being earned without actually working for it.

Pension plans are worked for. 

From Investopedia: 

What Does Pension Plan Mean?
A type of retirement plan, usually tax exempt, wherein an employer makes contributions toward a pool of funds set aside for an employee's future benefit. The pool of funds is then invested on the employee's behalf, allowing the employee to receive benefits upon retirement.

In many ways, a pension plan is a method in which an employee transfers part of his or her current income stream toward retirement income. There are two main types of pension plans: defined-benefit plans and defined-contribution plans.

In a defined-benefit plan, the employer guarantees that the employee will receive a definite amount of benefit upon retirement, regardless of the performance of the underlying investment pool.

In a defined-contribution plan the employer makes predefined contributions for the employee, but the final amount of benefit received by the employee depends on the investment's performance.

If you don't work for an employer that offers a pension plan, you don't get one.

[RubySlippers]

Okay lets get real here our nation has hungry people, homeless people, poor working people and many critical obligations how are we supposed to pay for these AND cut taxes. Its the stupidest thing I ever could consider it not like we have a happy citizenship all bloated on the fat of the land and housed here with the poor all provided for.

How does tax cuts and program cuts affect this, usually a jackboot on the heads of the poor and needy.

[AndyZ]

I'm not very good at this (which has already been proven) but I wanted to try to weigh in for a bit if nobody minds.  If I goof up somewhere, please point it out.

People who inherit insane amounts of money like Paris Hilton aren't affected by the current tax system.  Progressive Income Tax.  You can raise that amount all the way to 99% and it's not going to affect them whatsoever if they don't even make any income.  However, you will affect small businesses which only make around $250,000 which is the highest tax bracket, which will kill more jobs when people can't make ends meet.

In order to tax people who sit on all their cash and don't actually work, you'd need to completely get rid of the progressive income tax and replace it with something else.  Some have suggested the national sales tax instead of the progressive income tax, which would hit heirs and heiresses if they buy anything in America.

The usual argument for this is that it would strike the poor as well, but if we already don't pay taxes on food, I would imagine that we can figure out various necessities which would not be taxed.  Maybe other people would have ideas for this as well.

Maybe there's something that would work better than a national sales tax, but I have no idea what it is.  Attempting to tax someone just on how much money they currently have would either force everyone to constantly spend their money or else hide it in precious metals, stocks and the like.  However, if you bring up people like Paris Hilton, don't use her as justification for increasing the progressive income tax.  That only hurts the people who actually earn an income.

---

Alsheriam, no argument from me that we need to cut military spending, but that doesn't mean that we don't have to cut other things.  The entire department of defense is only 20% of the budget.  So let's agree that many things need to be cut, including defense.

http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png

Link provided in case the picture is too tiny.  I pulled it from here: http://en.wikipedia.org/wiki/Military_budget_of_the_United_States

---

Maybe I have some mistakes on all of this, but people can let me know where.

[Oniya]

The usual argument for this is that it would strike the poor as well, but if we already don't pay taxes on food, I would imagine that we can figure out various necessities which would not be taxed.  Maybe other people would have ideas for this as well.

One thing that hit me as 'new' when I moved to Ohio is that certain food items are not taxed.  Virginia taxed everything at 4.25% when I lived there.  After analyzing my grocery receipts for a couple months, I determined that something that is an 'ingredient' (meat, dairy, produce, flour, sugar, etc.) falls into the 'tax-free' zone, and prepared foods (frozen meals or 'meal mixes') got taxed.  Something like this setup would ensure that the necessities would be available at a minimal tax, as well as encouraging healthier eating (have you looked at the labels on some of those prepared meals?)

[elone]

http://www.ssa.gov/history/tftable.html

For those who think Social Security is a budget problem, look at the numbers. Social Security is still taking in more money than it pays out. As baby boomers age, this may be a problem but for now that should not a problem. The problem is that the government takes your social security payments and uses that money to buy government bonds. When SS needs money they sell the bonds, therefore the government owes that money and it has become a big part of the debt. SS is actually a money maker. (so far)

By the way, the rich don't pay social security taxes on all of their income, there is a limit on that. Just another perk for the wealthy.