Can you balance the budget?
 

We have heard a lot about balancing the budget. However, we haven't heard a lot about reducing social security and/or Medicare, or raising taxes. Here is an interactive budget calculator.

Budget Puzzle: You Fix the Budget - Interactive Feature - NYTimes.com

Play around with this a bit and see how you can balance the budget. It will be pretty hard to balance the budget without some major changes. So what changes would you make?

---------- Post added at 12:48 AM ---------- Previous post was at 12:37 AM ----------

Here is an interesting configuration. If you remove all of Bush's tax cuts you completely balance the 2015 but only reduce the 2030 deficit by half. I know the right would howl about loosing jobs but it appears that Bush's tax cuts didn't help jobs at all. In fact, during Bush's two terms the economy shed an unprecedented number of jobs.

Cut military spending by 40%.

Done.

Here's how I did only spent about 10 mins on it. Came up with 70% in saving/spending cuts and 30% increases in taxes.

---------- Post added at 06:58 PM ---------- Previous post was at 06:56 PM ----------

Might lead to another situation like the 1920's where a bunch of men returning from war couldn't find work. If you cut the military spending by 40% there's going to be much higher un-employment, how do you deal with that?

I came up with this, with the only tax increase being the bank tax
Budget Puzzle: You Fix the Budget - Interactive Feature - NYTimes.com

Military budget is under 700 billion. The deficit is around 400 billion in 2015. At 40% you are still over 150 billion short.

I tried to do it. Actually, I did do it, but I didn't like what I came up with for a variety of reasons. The options given are either simplistic, vague, or both. The option to "cap the Medicare growth at GDP growth plus 1 percentage point, starting in 2013" was quite tempting, but I found myself wondering... what exactly would that entail? The NYT tool gave no clues. So, I set out to research the issue and came across this analysis of the NYT deficit tool:

The NYT’s attempt to fix the budget | Analysis & Opinion |

I just hope the government can balance the budget.

there's no benefit for the politicians in balancing the budget. It means they lose some ability to dole out goodies.

True, very true.

I looked at this again this morning giving it more thought and time. I'm not sure it can be done without serious problems. You cut here and people lose jobs, you tax more there and more jobs are likely sent over seas. Every action has a reaction.

In down times no one ever thinks it's going to get better and in booming times no one sees the bust coming. But I wonder what it's going to look like on the other side of this.

while it's a fun little play tool, it's useless unless it actually lets you eliminate entire agencies.

Are you more concerned about eliminating a particular agency than you are about balancing the budget?

i'm more concerned with reducing both the size and the spending of government. The best way to do that is to literally disband certain agencies and gut the crap out of others. Like I said in another thread, it's amazing that all of these 'bipartisan' politicians are really looking forward to cutting spending on entitlements, but are adamantly refusing to look at cutting spending where it's needed and wanted most....their own budget.

And what do you do with the thousands of people you just sent to the umemployment line?

i'll be as responsible for them as they were for me during my times of unemployment.......meaning they can enter the job market and compete with me. at least this way they can start producing in an economy instead of sucking away millions of our dollars.

Well that certainly sounds like a good thing to do in some of the toughest economic times times ever.

I think the desirable thing is a balanced budget and a stable society.

No, no- come on let's just tell millions of unemployed people "fuck you, when I was out of work I had to go find a job now it's your turn." Never mind reports show currently there are jobs available for about 1 out of every 5 unemployed.

Maybe we could come up with "A Modest Proposal" part II.

Oh, here I thought they were just being lazy.

and why are we in some of the toughest economic times ever? partially, a big part, is outrageous government spending.

seriously, did you know in the last 4 to 6 years, the number of people at the pentagon making over 150k a year jumped from 9 to just over 900? 150k a year. that's 133.5 million a year + some.

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desperate times require desperate measures. we're all making huge sacrifices in our own homes, why should we leave an entire class of people untouched, simply because they work for uncle sam?

Like others have pointed out the problem with balancing the budget is that anything you do is going to have a major backlash somewhere, be they lost jobs, lost benefits, higher taxes or reduced role as a world superpower it really feels like a no win situation. With a society that thrives on instant gratification nobody wants to sacrifice anything for the sake of an overall better society down the road couple that with politicians having little other recourse but kissing ass to get votes they have almost no incentive to sacrifice their political career for the sake of the future.

We as a nation need to accept that we can't have our cake and eat it too, something has to give somewhere and unless people are willing to accept making some sacrifices the the budget is probably never going to be balanced.

People need to be okay with higher taxes, a reduced govt and a smaller military amongst many other things or we're going to eventually just collapse.

First I don't know anything about the increase in salaries at the DOD. Do you have a source? I mean if a bunch of folks went from making 147K to 151K then I wouldn't be surprised. From my experience working for the government, something I did for roughly 25 yrs., isn't the cake walk cushy job people think. I know when I retired, at a very reduced rate of pay, they were begging folks topped out on the pay scale to retire so they could hire lower paid new people. I was lucky that I had a side business that augmented my ability to retire.

As for the job itself I worked parole and probation for the last 18 or so years. Our dept. worked 4 10 hr shifts per week... on paper. I rarely worked less then 50hrs a week in reality. Anything over 40hrs a week was counted as comp. time and after you acquired 80hrs of comp time you began to lose it. Every year I lost comp time because there was no way to take it. It's stressful work and you're on call pretty much 24/7. No one calls you in that job with good news. Every time the phone rings you can be pretty sure it's some crisis.

Second as for having an unaffected class from speaking to former co-workers I really doubt government workers are unaffected. In my former dept. they are not hiring new people to replace those retiring, work load is simply increasing.

If there is an unaffected class in the US I'd bet it's the wealthy and upper middle class.

Federal bureaucrats earning $150K up tenfold in past five years Hot Air

having worked with federal employees before, i'm aware of the comp issues, but did you have any union representation?

I don't think that article gives enough info to actually understand the entire situation. The example given regarding Dr's seems like they might have been under paid in the past. I just don't know. I know when I looked at balancing the budget I choose cut federal pay across the board. So I guess to some degree I agree it's a problem or at least should be part of the solution. Is it fair to blame it all on Obama and the Dems, I don't know. Is it possible these pay increases where already bargained for, you know like the tax cuts were set to expire before Obama was ever elected and now he's getting blamed for wanting to increase taxes?

Yes, I was in two unions Afscme and Opeu. I worked in a very rural area and my position was partially funded by the state of Oregon and partially funded by a federal grant. Most of the time when I had an issue, such as constantly losing comp time the unions fought over who was responsible for me. They both had no problem taking mandatory dues out of my check. After working there less then 2-3 years I gave up on trying to gain back any lost time. Myself, like most of my co-workers just stopped keeping track when called at in the middle of the night.

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Here's an article I found on Obama and federal/military pay raises-


Source

Sounds more like reality then the other article to me.

really? so the USA article link inside the article I posted is one big pile of shit and lies?

There's a difference between stating "soared tenfold" and "increased to 3.9%." (Yes, ten times a fraction of a percent.)

Going from 9 to 900 or so out of over 25,000 employees (or whatever the number is) isn't quite "soaring," especially when you consider that the federal government has increased the amount of lower-cost labour they outsource to the private sector.

Come on did I call it a pile of shit? I just read it and it seems to play with some numbers. Saying "the biggest pay hikes have gone to employees who have been with the government for 15 to 24 years. Since 2005, average salaries for this group climbed 25% compared with a 9% inflation rate." Probably doesn't paint the entire picture in my opinion. People getting close to the top a pay scale, private or public tend to get larger increases.

Look at the portion you highlighted-

By reading that it seems like "Wow! Obama has doubled the number in 22 months!" But read it more carefully and the picture becomes more clear. Kind of skips, certainly doesn't mention by name, that it tripled under the previous 50 months with Bush. Just that it increased fivefold over the past five years and you can thank "Barack Obama and Democrats." Seems like we should be, even with this writers numbers, thanking Bush and the GOP even more so.

Plus it doesn't really say what these newly well to do folks were making prior to passing the 150K mark. If, again, they were making 147k I would think this wouldn't be big news.

Articles written like this make me question their honesty.

Edit-

Ok now my math is messed up too. That should be 36 months of Bush not 50. Sorry.

---------- Post added at 07:34 PM ---------- Previous post was at 07:16 PM ----------

Anytime you take an arbitrary number like 150K and use it as your baseline it's pretty easy to paint a less then realistic picture. What if you used dollars per hour? You could say after "X" date the number of people making more then 7.50 an hour increased 20,000%. You don't have to mention that minimum wage went from $7.35 to $7.55 on that day. You'd still be telling the truth, just omitting a major factor.

It didn't take me 10 mins to figure out. The bottom line is this - if I was charge of this "economy", I wouldn't have a problem. It's not rocket science, and I'm glad about that.

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But here's the thing - how do we make it matter?

Ok, but that doesn't explain your seemingly simple solution(s.)

OK, done. Eliminate all non-humanitarian foreign aid, even if that doesn't get us the full 17 billion in savings we should be able to pick up the difference by taxing all capital gains as income.
Budget Puzzle: You Fix the Budget - Interactive Feature - NYTimes.com

The whole problem with this is that any of us could go balance the budget with plans both radical and reasonable, but no matter what, you have to do something, or some combination of things, that will be unpopular. The people in control of the purse strings simply aren't going to do that.

I keep wondering when we'll wind up like post WWI Germany; or modern day Zimbabwe... rampant inflation, massive unemployment, because we didn't tackle the problem when we could have.

Or will we do as Argentina did and repudiate the debt? It was disastrous at the time, but they are sure doing fine now.

There's the published military budget and the real military budget.

For example (and correct me if I'm wrong) the following are not included in the Pentagon's budget

1. Cost of operating all ICBM silos (That's the Department of the Interior - yep, really)

2. Cost of the War in Iraq and Afghanistan.

3. Cost of all the "free money" that is given to the Military Industrial complex in the name of Research and Development. (Corporate Welfare)

4. Cost of Vetran's Hospitals.

---------- Post added at 06:19 PM ---------- Previous post was at 06:10 PM ----------

It's very simple how to balance the US Federal Budget.

1. Cut spending

2. Increase taxes

Or better yet, a bit of both.

The one thing I've noticed about Americans is that they truly believe in the concept of the Free Lunch. You want to have all the government goodies - but you don't want to pay for them and you figure that someone else should pay for them. I laugh when I hear all sort of people talking about reforming income tax, or flat tax - everyone seems to have an agenda. It would seem that everyone believes that they pay too much and the other guy pays too little tax and if they just rejigged it this way or that way, I could pay less - you could pay more, and all would be right in the world.

I watch CNN and people keep talking about keeping the "Bush Tax Cuts". Fuck, you couldn't afford them under W for crying out loud, in supposed good times. He just went out and borrowed 500 billion a year in order to finance a tax cut and look like a hero to the population who must be fucking on glue or something. I mean, really, if I was you I'd be saying, "Don't borrow money to finance a tax cut - keep the fucking taxes where they are and balance the budget"

But you NEVER EVER hear ANY American say that. Instead, they just keep crossing their fingers and praying for another tax cut so they can go out and buy more shit that they don't need. Of all the Industrialized Countries, America already pays the least in taxes.

I contrast that to Canada where people were UPSET when they cut the national sales tax (G.S. T. from 7% to 5%) because it would mean that the gov't would have less money for social programs, or that the gov't would have to go into debt and people (myself included) were saying, keep the fucking GST at 7% thanks very much and balance the damn budget.

Americans would sooner eat glass and die than ever think that way.

Its not always that black and white though Kirk, a lot of people that want lower taxes also believe that social programs (for example) should be slashed to the bone or eliminated all together. You wont find many people in the "my taxes are too high" crowd that also support getting as many government goodies as possible...unless it benefits them directly and then they usually don't mind paying (roads, military or police for example). Most of those folks want a smaller govt, less social programs ect ect and believe they are either wasteful or unnecessary and therefore the taxes they pay to support them are wasteful and unnecessary leading to all sorts of ideas and theories about who should have to pay for what.

Its not always as simple as Americans just wanting something for nothing.

Now it looks like congress is going to take a big step towards not balancing the budget. If they simultaneously extend unemployment insurance and extend the tax cuts for everyone in the same bill my head my just explode...

Rekna: Haven't you learned? Deficits are totally OK when Republicans have power. And when they don't, they just make sure that anything the Democrats want to do can't be paid for and then complain about it.

Here's the thing:

Those "Tax cuts for the rich?" The ones that supposedly just benefited people making $250,000+ per year?

Those cuts also affected something close to 50% of the small businesses in the country: "S" Corporations I believe they're called. If those tax cuts expire, the taxes paid by those types of small corporations will more than double. I know: I work for a small family business, and my Boss is running around like a chicken with its' head shot off trying to figure out how we can possibly afford to stay in business paying 35%-plus taxes (US Corporate taxes are the 2nd highest in the world, behind only Japan, who is only 1/2 of one percentage point higher), PLUS paying for Obamacare. Since almost any small business capable of keeping the doors open "makes" more than $250,000 per year, guess what? The only sector of this economy which can expert any meaningful growth over the next five years is getting ready to get with a -huge- increase in the cost of just doing business. Do you think this makes it easy to hire new employees, invest in new technologies, open expansions/franchises or take the risks needed to actually grow the economy and generate income for working people and entrepreneurs?

His math says, and I believe him, that it can't be done. If those tax increases occur, and Obamacare is implemented as written, we will close. Period. The End. No discussion. I will lose my job, my family's business will close, and that will be the end of it. And trust me: there are a -LOT- of small business and family shops who are doing the same math and coming to the same conclusions.

Mr. Obama says that small businesses are the engine of our economy, and crucial for recovery? Horseshit. Bunkum. LIES. He and his backers have it in for us every bit as much as they do for BP or Berkshire Hathaway or any other "big evil" business. If they didn't, they wouldn't be trying to tax us out of business or drive us into penury with insane paperwork requirements (like filing a Form 1099 for every purchase we make over $600.00, or the insane passage of SB 510).

Obviously, businesses couldn't possibly have succeeded during the Clinton administration.

Under the Clinton Regime, they weren't being simultaneously hit with a mandate for cartelized, overpriced, Nanny-stated healthcare payments and taxes. They weren't faced with paying to support both their employees -and- the jackoffs down my street who can, but won't, get a job.

Matt Tiabbi's book "Griftocracy" had an insight which I liked. He said, quite rightly, that one reason the Tea Party enjoys such support from small business owners is that for us, -any- interaction with the government is bad. It always ends up costing you money, frequently money you can't really afford to lose even in a -good- economy, and draws the attention of other bureaucrats who then figure out -new- ways to cost you money. It brings an army of inspectors with checksheets for obscure retarded things: in my little University town there was a law -requiring- open drains in restaurant kitchens. The sinks had to empty down into a funnel which led into the main drainage pipe: the pipes from the sinks had to be X size and Y far away from the funnel, which had to be Z wide by A tall, with a main drain-pipe that was B wide...

...the end result was a system, near-universal in my town, which caused the drains to back up and flood kitchens and make an horrendous, unsafe, unsanitary mess. Did any of the morons down at City Hall think about this when they wrote this insane law? No. Of course not. And it cost my bosses (and therefore me), to say nothing of every other resteraunteur, waitress, and busboy in town, a lot of aggravation and productivity and money.

People wonder why there aren't any jobs? This is why. When employers have to spend all their money paying for everything imaginable, from wars to subsidies to every benefit their employees or some legislators demand to keeping up with insane and expensive and contradictory laws, they don't have enough money to stay open. Then they go out of business, and all the people who used to work there are fucked. When they anticipate a huge financial skullfucking in the near future (as a result of the aforesaid costs), they sit on their cash so they can try to weather it, and all the people they might have hired are fucked. Both are happening or beginning to happen as we speak. This is why there's no liquidity anywhere, why credit is -still- tied up (this and the approaching Commercial Mortgage time-bomb) after two years of useless "stimulus:" nobody wants to turn loose of their ready cash reserves before they have a handle on just how much this is going to hurt financially.

And business-owners who trust the establishment Republicans who still make up most of Red Washington to relieve them anytime soon are utter, damned fools. That crowd of shills will keep the most onerous regulations (like the 1099 requirement) around until at least after 2012's Elections. Those things are just -too- handy a stick to beat the Dems with, especially once the results start to become manifest. And in the meantime, a lot of people and businesses will go clean under as a result.

And you think the Tea party would be any better? It might be better for the business people, but not for the consumers, workers, and society as a whole. And the local people and state people write the codes for whatever reason. Some of it's to make sure 'professionals' do the work, a lot of it is really dirty bribes and favors.

PolitiFact Virginia | Eric Cantor says expiration of Bush tax cuts will raise small business taxes

This story looks at the reality of the 'small business owner' in America. The people who hire accountants to find all the loopholes and schemes to try and find a .5% lower rate because it will make them more money. And now they are upset that the debt is $14 trillion, but don't want to be the ones who have to pay anything to bring it down.

Fix the system, if it is even possible (including pay rates, oversight, and punishment for breaking laws). But, it is a shame that the 'debt commission' barely touched some big ticket items (0.15 cent gas tax...and everyone on the McLaughlin Group said it would never pass... try 0.75 cents to $1.50), while going after others that are too small and provide a necessary service.


Anyway, yes I could balance the budget. People might not like it, but not paying 14% of your taxes in interest would be a better system. (And I would like to see unemployment changed in a big way. Yet, society is changing too since we don't need all of the workers we have. Computers, the Internet, and robots are taking over.

More money so they can hire new employees, or invest in new technologies, or maybe (here's a thought) stay in business in the fucking first place! Ever heard of inflation, or Rates Of Exchange? In order to keep up with these two things (inflation keeps getting worse, and the Dollar keeps taking a shit) any business (especially one which deals in imports) -must- continue to expand and -must- be able to maintain cashflow. "Making more money" isn't just about putting it into the Owner's pockets, it's about keeping the damned doors open. When a product costs $130/unit -more- than it did 3 months prior, that cost has to be covered somehow. How? You guessed it; by making more money!

They're upset because the $14T debt (and $70T worth of liabilities) is for shit they didn't do. That $14T debt is from things like asinine wars, bloated "welfare" schema, a Federal workforce almost entirely beholden to Unions who always demand moreMOREMORE! nevermind the cost, and a "public service" sector that has never yet learned to live within its' means because the Gov't will just steal, print or borrow whatever money they decide they need. They're upset because they didn't do this shit, but now they're on the hook for it and being blamed for it by a bunch of professional gabblers who have never held a productive, private-sector job in their entire lives and have no idea what reality is for people who actually work for their livings or how the most basic ground-level economics work. They're upset because they're being tapped for the cash to pay for every manner of giveaway imaginable, cash which they can ill spare and giveaways which primarily go to the grifters, welfare cheats (Personal and Corporate), and "gamers" whose primary contribution to the economic life of this or any country is to buy cheap liquor and scratch-off tickets. They're sick of being told they have to pay for bridges to nowhere, wars in countries that haven't hurt us (and "aid" to countries which have), ever-faster-rising wages for semi-sentient and essentially untouchable Gov't workers (who then raise an unGodly shitstorm when Mr. Obama talks about freezing their raises; when's the last time you got any kind of raise?), and perks for useless worthless helpless hopeless morons like my neighbors. They're sick of being demonized for their resistance to having their savings and investments raped by a pack of clueless clowns who think being a Community Organizer and a one-term no-show kinda-sorta-Senator makes a person qualified to not only control the Big Red Button but also the largest and most complex economy on Earth.

No, they don't know if the Tea Party Republicans will be any better. But most small-business owners are having a very hard time figuring out how they could be any -worse-.

Deflation is a bigger risk factor in the U.S. right now than inflation.

In 2009, the U.S. had a net deflationary period. In 2010, there were a few months of inflation below 3%, while most of the year it was below 2% (mostly at nearly 1%, which is low). Maintaining inflation at around 2% is desirable.

You want to know what isn't desirable? A deflationary spiral during an economic downturn/trough. It shoots recovery in the head. If the U.S. returns to a deflationary period again (which is a real risk), then corporate profits will tank and it will force them into holding onto their money instead of spending it for future growth.

How long do you want to stay in the trough?

And here's a newsflash: small businesses are suffering globally, not just in the U.S. It's a shitty time to be doing business and small businesses are more susceptible than larger ones. Until we see an economic recovery worldwide, you can't expect the business environment in the U.S. to magically go to booming.

Economies are globalized; that means economics is globalized. Look at the big picture, not just within U.S. borders. The tax environment is just one factor. If returning to previous tax levels is going to be ruinous, then there is clearly something else wrong with the environment.