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I Put a Deal on the Table
The lack of anything concrete coming from either side on the cliff debacle is troubling. I don't think the process should be as hard as it is made out to be. I have a plan. I try to address all the hot-button issues. I also try to force significant concessions. I attempt to craft something that has a chance of working.
Before the specifics, I have to address the broad topic of "Debts and Deficits". My thoughts on the "big picture" drive some of the details in my proposal(s):
A) It is not possible, nor is it desirable, for the USA to have a balanced budget at anytime in the foreseeable future.
B) It is possible to reduce the deficits to a more manageable percentage of GDP. Achieving this will result in a lower trajectory of the rate of increase in the national debt.
C) All talk of deficits, budgets and taxes is a fools game. There is only one thing that matters. Economic growth will solve the debt problem, or it won't.
It doesn't matter what the tax rate on the top 2% is, or if the retirement age is pushed out a few years. For the next ten-years, it will be grow-or-die. Washington has to focus on that side of the equation. As of today, all the focus is in the wrong direction.
It proved difficult for me to solve all of the crushing economic issues facing the country in 300 words or less. My thoughts are presented first in summary, after that, the details.
SUMMARY
A series of compromise on taxes and spending that results with:
1) Income of $250 - $450 > to 37.5%.
2) Income of $450+ to 39.6%.
3) Income <$250 - Bush tax cuts are made permanent.
4) Long-term Cap. Gains - unchanged.
5) Patch the AMT for one-year.
6) The Payroll tax for Social Security reverts to 6.2% - A 2% increase.
7) Deductions for state and local taxes paid will be capped at $30,000. Deductions for mortgages and charity will be retained.
8) Inheritance tax will be 40% over $4m.
8) The Transaction Account guaranty will be allowed to expire.
9) Emergency unemployment benefits will be extended for one year.
10) The programed cuts in spending (the Sequestered Amounts) will be reduced by 50%.
11) Social Security and Medicare spending will be reduced by $1T from 2014 - 2023. 50% of the savings will come from Medicare, 50% from Social Security. The framework that achieves the savings at Social Security will be applied to both the Military and Federal Workers retirement funds.
12) A four-year, $500b spending program dedicated to infrastructure building will be established. A portion of this program will be funded with new federal excise taxes.
Now the long-winded discussion:
On Taxes
- The Bush era tax breaks for those under $250k should be made permanent. (Both sides can take credit for this)
- The Bush breaks for those >$250 will be increased as follows:
a) $250-450k goes to 37.5%
b) >$450 goes to the full 39.6%
The change in tax rates would be a substantial concession by Republicans. This is nearly 100% of what Obama has demanded. Note the carve-out for the $250-450 set. That actually is a significant portion of the top 2%, so when you look at the reality, the Republicans don't do so bad.
This increase in taxes would fail to achieve the minimum of $800b of increased revenues that Republicans have offered. To bring the revenue number up to $1trillion (Obama now wants 1.4T, but he previously agreed to 800b) I propose that there be limits put on deductions. This is an issue that Republicans have insisted on. Democrats hate this topic as it hurts homeowners (mortgage deduction) and charitable giving (this is about Religion).
To defuse this very tender topic I propose to limit deductions on only one class of deductions. State income and local property taxes deductions would be subject to a cap. The cap would be around $30,000. ALL other deductions would remain as they are today.
Who would win with this cap on "other taxes paid"? Red states like Texas would win very big (no state income tax). NY, California and Illinois would get crushed (all big Democratic states with big income and property taxes). It would drive a stake into the political "prizes" in the country.
All the big-ticket fund raisers for the Democrats on both coasts would pay for this compromise. If Republicans want some additional revenue, and to set themselves up for 2014, they will push for this. The Democrats won't have a leg to stand up on with any opposition.
-AMT would have to be patched over for another year. There simply is not enough time left for this complex topic to be worked out before New Year's Eve.
This is a terrible, stupid, awful, unfair and ill-conceived tax; but some form of it is necessary.
The classic example is Mitt Romney. He made $10m and paid 11% tax. Sorry, there has to be a minimum. The current minimum level for AMT is an absurdly high 28%. I think it should be 20%. A new minimum tax has to be part of a deal; it broadens the base, it raises revenues and insures that fat-cats like Warren Buffett finally pay their "fair share" (I want Warren to get what he's been saying).
Let's be clear about the implications of a minimum tax. Yes, it does some good things, but it will also have the effect of reducing charitable giving. Mitt would not have given $4m to the Mormon Church if he'd been faced with a 20% minimum tax. The "tax-efficiency" of his giving would have capped out his charity at only $2m. (It's about the money, after all)
Anyway, we're talking budgets and taxes; hard choices have to be made. Last I heard, there was something about Church and State anyway.
-The 2% reduction in payroll taxes will be eliminate. Sorry. Either Social Security (SS) is a self-funded program that doesn't add to the deficit (as so many liberals have claimed), or it is an entitlement program that sucks down $170B a year from the general tax payers. Those who love SS can't have their cake and eat it too.
Note: The 2% increase on payrolls is a very regressive tax increase. Come January, it will be felt by 155m workers. They will all hate that. This is a perfect opportunity for Republicans/Conservatives to swing popular opinion away from SS. This "mind change" of the voters away from SS is the only hope that Republican's have.
-The current low tax rates on dividends and capital gains will be retain. However, the establishment of a minimum tax (see above) will raise the effective tax on capital to 20% for those who have incomes/deductions that make them subject to the minimum. Again, this is a compromise that both sides should be willing to accept.
-Inheritance taxes will be set at 40%, the threshold for the tax will be set at $4m. (another compromise)
Okay, that solves all the tax matters that people have been fussing about. Now the rest of the issues:
Regulatory
- Do not extend Transaction Account Guaranty (subsidy for banks, TBTF issue - Trust me, the world will not end when this happens).
- Extend unemployment benefits for yet another year.
These trade-offs are on political lines. No one should argue about this horse-trade.
Sequestered Spending
IMHO, the cutback amounts that were agreed to as part of lat year's Budget Control Act were draconian. They were more of a "show-pony" to prove to the public that D.C. was serious. Recall that a lot of the maneuvering on this was driven to placate the likes of S&P. The motivations for setting the sequestered amounts were misguided. If there is to be a deal before the end of the year, a very big concession has to be made by both sides on spending.
Time does not permit much finesse in this important area. My simple solution is to cut the sequestered amounts in half.
Multi Year Stimulus Program
The problem, and the solution, is staring us in the face every day. The country needs a big investment in infrastructure. All our "stuff" is falling apart. Want construction jobs? Build things. Want high paying jobs? Build complicated things. Want economic growth? Build things that will have a long-term return on the investments. The list of things that need fixing/new is endless. The only question is, "Where does the money come from?"
I propose doing something radical. I would like to establish a national sales tax. The tax would be 1/2%; it would be applied to all retail sales EXCLUDING autos. The tax would be collected by the individual states. Washington would put up an additional $5 for every dollar of federal sales tax.
The retail sales number (again- ex-autos) is nearing $4T. A 1/2% national tax would raise only $20b. Such a small amount would not have a significant negative consequence to the economy. D.C.would contribute 5Xs the amount collected; bringing the total in year one to $120B. I would create borrowing authority for up to 75% of the next few years of anticipated revenues (this borrowing is secured by a dedicated source of revenue. This is a different type of debt, it gets paid back.) Borrowing will facilitate/accelerate the timing of the new infrastructure investments. 100% of all of this is spent on infrastructure - no leakage permitted. The states choose the projects.
$120b is a decent sized stimulus (equivalent to the 2% payroll cut). To be effective, there would have to be a commitment to do this for a minimum of four years. Every year, there would be an obligation of Congress to either extend it for an additional year, or let it die in the remaining three.
This would help the broader economy. Jobs would come fairly soon after inception; every month the demand for labor would rise. The results would be visible in a matter of years (new roads, bridges, airports, seaports, water projects etc.)
What I am proposing is very modest. By itself, it will not create a boom. Economically, it is a step in a direction that must be taken. Remember, it's grow or die. There will be opposition to any new tax, especially a federal consumption tax. It will add to the bill at the grocery store, gas pump and Wall-Mart.
Call me a fool, but I believe that everyone should have some skin in the game. Yes, the cost of a quart of milk for a family already living on the poverty line will go up by a penny. And the cost, all in, for those new spiked heels, will be $2.50 extra. But the fact is, the milk is probably being bought with food stamps, and who cares about the cost of those stilettos (or a boat for that matter).
I say to D.C., "Suck it up!" and get this done. If there is no movement on this front in 2013, then you can kiss off any chance for digging out of an economic hole for the rest of the Obama years.
The politics of this are interesting. I would like to hear a Pol say that this (or some/any version) is "off the table". That legislator would get their picture in the paper, for being a fool.
The deficit hawks will not like this. It would add $100b a year onto the deficit ledger. To this, I say that there are two kinds of debt; one is bad, the other is okay. NYC's Triborough Bridge has paid for itself 50Xs over. Same with the Golden Gate,the airports, the interstate, the water clean up/availability investments etc.
Who would love this plan? All fifty Governors would cheer. The states would have a pot load of money to spend. Yes, this will create its own set of problems, but governors can be held accountable a lot easier than some technocrats in D.C. If money has to be spent (it does) then I think it is better spent by the states.
Another group that would cheer, would be the 1,000,000 small business's (and their employees) who would benefit. What needs building requires steel, aluminum, concrete; it needs welders, masons, truck drivers, architects, engineers and designers.
So far I've covered all of the critical variables (including a nifty stimulus idea), save two. What remains are the thorniest of all issues. What to do with the debt limit and what to do about entitlements (Social Security/ Medicare/all other federal retirement plans).
The Debt Limit
The debt limit is one of the dumbest things ever created. It is an issue that, at the extreme , could send the country into a depression in a matter of months. (We came fairly close a year ago.) The debt limit creates the opportunity for a self inflicted wound that could lead to a systemic implosion. With these things in mind, it's easy to say "Fix this!".
But, sadly, the debt limit is a speed bump that must exist in some form. The US debt trajectory is simply unsustainable. Something has to exist that acts as a "check" in the system. That check is not coming from the White House, Congress or the Federal Reserve. The only thing left holding back exponential growth of red ink is the debt limit. So, as flawed as it is, the concept of a debt limit has to be retained.
This would be a big concession by Obama. In exchange for giving in on this, the Republicans would be forced to set a new debt limit that would cover the country through the 2014 elections. The debt limit agreement would be held hostage to a resolution of the final, and most difficult of all issues, entitlement reform. There is not a chance in a million that there can be any agreement on entitlements in the next 17 days; the issue is too complicated and too emotive.
Entitlements
There would be a framework for reforms as part of a deal to get over the cliff. In order for all of the tax fixes and other compromises I've described to get inked before the lights go out, there would have to be a deal that outlined the scope of the cuts in entitlements. Both sides would know what has to be accomplished, and be committed to the process.
Legislators would have a short window to complete a final agreement. If there is no deal on what gets cut to achieve the agreed target by April, then everything falls apart in a very big way. The debt ceiling extension (required in April) will be contingent on a final agreement on entitlements. The targets for entitlement cuts that will be agreed to in December and made into law by springtime:
2014 - 2023 Cuts in Social Security and Medicare = $1,000,000,000,000.(The Big T)
The cuts will come 50% from Medicare, 50% from Social Security.
I can hear the screams already. Obama wins the election, then turns on his base and guts America's favorite social programs? Not a chance! Hear me out.
- Over the ten-year period, Medicare (Does not include Medicaid and CHIPS) will pay out 4% of GDP. In real dollars that comes to $9T. $500B (5.5%) of savings/cuts has to be found as part of the final deal.
- Social Security will pay out $11 Trillion. Both sides of the aisle will have to find ways to cut $500b (4.5%).
What I'm proposing is by no means "gutting" these programs. If the folks in D.C can't agree on cutting $1T out of $20+T over ten-years, the country would deserve the consequences (Shutdown, default, downgrade). To get the complete package of a cliff saving deal, all of the parties would have to agree to the $1t, and sort out the details in 90 short days.
Obama has said that he would have a discussion on entitlements, "sometime next year". That doesn't work, it's not what most Americans want. It's asking for a fight. Obama, a number of Democrats, and the House Republicans, have to do what the have already promised.
I'm certain there is a political consensus to take a walk in this direction. No "new thinking" is required. The tools to achieve this have been discussed to death. Age and COLA adjustments, means testing, more taxes on benefits, higher fees. A beat down on the providers, blah, blah blah.
It would not be difficult to suck $1t out of these two very big pieces of the pie. To a significant extent, this would have to be born by those with both means and/or income. We are headed in the direction where medical benefits will be priced at 100% of the Social Security checks for those who have done well for themselves. Sorry.
Liberals will hate this. Their opposition is ideological, not economics. I think they have no argument at all. The objective of the changes in entitlements is to strengthen these programs so that they can achieve what they were intended for. An insurance safety net, not a retirement program will free medical.
70+% of the people who get these benefits are heavily dependent on them for basic necessities. The goal is to ensure that the 70% get what they need, the 30% who are less dependent (or don't really need it at all) have to pay a price.
One can't take a more liberal position than this. So folks like Krugman, Pelosi and all of the other defenders of "the safety net" will have to stand by and watch this happen.
Conservatives won't be pleased either, by and large, this is money out of their pockets. What they (and the country) get in return is an economic plan that has a chance, and a very important directional change for entitlements. That result would be worth the cost.
If Obama wants a legacy he will have to solve the fiscal cliff in a way that addresses the real problems the country faces. That means he has to take on entitlements. If Obama chooses to extend the Roosevelt Dream, there will be no fiscal cliff deal, and he will have no legacy at all.
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Bruce.
Just how are you going to get growth with the Govt. stangling businesses with
regulation woven from the cloth of increased taxes ?
Either Obummer is a total loser or that is his plan.
The result is the same either way.The loss of confidence in all thing American,
including the dollar, is rushing towards us.
We don't have ten years to grow out of this which IMO would be impossible even
with someone else at the helm.With Obummer give it two years.
The best is at least Obummer has given us some new windmills to chase.
For a start, tax unemployment benefits, food stamps, value of Section 8 benefits, WIC program benefits, and welfare payments at the top rate of 39.6%.
Sorry Bruce, generally love your stuff. This is just more bullshit can kicking on the backs of the productive.
I give Bruce props for this. He probably did more work than the Republicrats have for the last couple of weeks....and pro bono too! Of course, any fiscal compromise about anything in the National budget is going to piss off libetarians, like myself, but I don't need to tell Bruce that.
""The problem, and the solution, is staring us in the face every day. The country needs a big investment in infrastructure. All our "stuff" is falling apart. Want construction jobs? Build things. Want high paying jobs? Build complicated things.Want economic growth? Build things that will have a long-term return on the investments. The list of things that need fixing/new is endless.""
This is the one point I wanted to highlight. Building more stuff AND even repairing our old stuff is counterproductive, economically and environmentally. All of the "stuff" has created an unsustainable socio-economic model. Cars, roads, bridges, rails... are all so 20th century. If we really want to focus on the future, and the government HAS to take and spend our wealth (which I am definitely against, don't get me wrong here), the best they could do is install top tier fiber and wireless Internet capability around the country. Let the 20th century "stuff" be handled on the state and local level, or just fall apart. As a society, if we want to lead, we should be moving away from the automobile-centered society.
This was a bitch to write. It took too long.
And yes, I bet I have put more thought into this than most of the legislators in D.C.
I gave an uptick for being thought-provoking. There's definitely no lack of honest effort here.
Any talk of a "death tax" sets my teeth on edge. What right does the government think it has to my labor, taxed already all my life, just because I was stupid enough to croak? It reaches in heavy-handedly for the lion's share, one last time. Just the thought makes me fighting mad.
>>>Building more stuff AND even repairing our old stuff is counterproductive, economically and environmentally.<<<
>>>Let the 20th century "stuff" be handled on the state and local level, or just fall apart.<<<
Sonny, you are just an idiot.
I've been doing environmental politics for 30+ yrs. WTF do you think happens to the environment when you don't repair coal ash dams, sanitary and storm water systems, etc...???
Disaster, catastrophe, environmental degredation...that's what happens.
How is an ambulance gonna take you to the hospital if the roads are impassible after I kick your ass for being such an unmitigated moron???
Or are you gonna squeeze your near lifeless body through the fiber optic to get to the hospital???
fiber and wireless internet; yeah that'll take care of everything alright.
"All of the 'stuff' has created an unsustainable socio-economic model. Cars, roads, bridges, rails... are all so 20th century."
You were making so much sense until you decided to veer hard-left. What does that mean? Like America is going to give up driving cars? Trucks? Semis? Trains?
What Bruce is talking about has to be done now. There is no way we can throw in a massive cultural shift just to give the tree-huggers something fuzzy to take home. That doesn't even add up. What are we supposed to do build high-speed trains from Paducah to Abilene?
How about instead making the roads and bridges smarter and stronger and harder; lessen congestion on major highways; reduce smog by re-routing traffic in a smarter way; decrease the amount of fuel used by people sitting on the highway for three hours a day...
See? That's better already.
:D
Your fundamentally negative response to him is correct; he's clinically insane; he's so acculturated that he thinks we can put 6,000 tons of basic foodstuffs through a fiber optic line from Kansas to Ohio. A typical mind-set now a days. It's interesting to note that we can do this with American Coal and steam locomotives; for over 200 years; but of course it would make smoke. So, I guess we'll just starve instead.
There's no such thing as a smarter, stronger or harder, road or bridge. you're substituting culturally approved buzz words for knowledge. "Decrease the amount of fuel used by people sitting on the highway for three hours a day" How? Be specific. It's possible you need to try de-caf. slower thinking is usually more accurate.
I'm an IBM'er.
OH ORLY, YOU ARE MUCH TOO SMART FOR THIS CROWD.
MUST BE AN INDUSTRIAL ENGINEER.
No, she's not an engineer; and she's only about 1/4th. as smart as she thinks she is. She's good at modern flippant commentary, and buzz-words.
Modern flippant commentary and buzzwords? Really? Wow.
Like what, for instance?
And I am only 1/8th as smart as I want to be, that's why I keep learning every day. Can you say the same, or does having an SAT of 800 mean you already know everything?
I think there is a bigger picture, Its called New World Order we will be one of the Austerity Countries like it or not
Don't you have to ask the people that control the world's monetary system what they are going to do first before trying to figure it out?
Bruce, why does the government get 40% of the fruits of my life's labor as an inheritance tax? Why do you call this a compromise? I call it an ass fucking. It is immoral.
Well, that kicks in over $4m.
Now if you've got more than $4m, and you are worried about taxes, stop worrying.
There are about a hundred ways around this.
Buffett kicks off tomorrow, him worth $40B?? No tax will be paid by Mr. B when he checks out.
So don't sweat this one too much.
It's a compromise because the two sides are now 30% vs 45%. I chose the high side of middle.
There can be no compromise with a death tax. It is the ultimate government predation---ghoulish, vulture behavior you'd expect from fairy tale monsters or carrion feeders. The government betrays its evil character in how it treats the memory and wishes of its dead.
Only a few government overreaches incense me more than a death tax. Obamacare is one of them. "Gun control" is another.
BK,
How long are you giving congress to respond until you withdraw your "help?"
<SARCASM!!!>
Perhaps it has to do with necrophilia?
Go to the Von Mises Institute website and start reading in their on-line library. Tax and spend government started in America with Abe Lincoln and the Trans Continental Railroad; (a federal pork barrel and boon doggle). You are not alone. There is a whole philosophy and economic theory built around the indisputable fact that governments exist primarily to steal from their citizens. It is certainly immoral. At one time, citizens had muskets and government troops had muskets; now citizens have muskets, and government troops have airpower. Un-fortunately this is what morality comes down to today.
DOA:
"11) Social Security and Medicare spending will be reduced by $1T from 2014 - 2023. 50% of the savings will come from Medicare, 50% from Social Security. The framework that achieves the savings at Social Security will be applied to both the Military and Federal Workers retirement funds.
12) A four-year, $500b spending program dedicated to infrastructure building will be established. A portion of this program will be funded with new federal excise taxes."
No way any Entitlement cuts can happen. Any politican that suggests will get the boot come November. Your living in a Dreamworld if you think there is even a remote chance of cuts happening. What is going to happen is a lot of printing, and a heavy tax burden on the working class. Of all the entitlment cuts that should not happen, is Military. These people put their lives on the line. Many of the Soldiers need assistance caused by injuries while serving. Any you want to take that away?
On issue 12. Read our collective Lips: No more F*CKING Spending. We don't need more spending we need much less of it. We don't Spending programs over and over and over. It doesn't work and almost always causes economic Bubbles that always ends in Tears.
"1) Income of $250 - $450 > to 37.5%. " 2) Income of $450+ to 39.6%"
In 1913 the Federal Income tax was going to be permanently capped at 7% for the top rate. So how did we get to 39.6 in less than 100 years? The Federal gov't is a 100 Ton Obesity. The more you feed it the bigger it gets, ever needing a larger portion of income to satify it. Eventually 100% won't be enough. In addition, Most states have much higher Income and Sales taxes adding to the burden. Then there is soaring Healthcare costs, energy and food costs. Yet you feel its just to increase tax burdens.
Virtually every Socialist state always targets the Rich, which results in a severe economic crunch a few years down the road as the Rich stopped investing, cut costs, Shutdown and Liquidate business assets, or move offshore. For recent examples, See Venezuela (Happened) and France (underway)
8) Inheritance tax will be 40% over $4m.
Good God Man! I guess you want all of the remaining family business and Farms to go out of business. Why does the gov't derserve 40% of families inhertance? Did the Gov't go out and til the fields, spend 100+ hours working to build a business that probably took 20+ years to build? What right does the Gov't have to take away 40% of a families assets? if you should die tommorrow, would it be OK if the gov't took 40% of your assets and life insurance from your family. Why make it $4 Million? Why not $400? You think because its a Farm or business has $4 Million or more in equipment and real estate that the gov't is entitled to take 40% of it way? You think a Company can sell off 40% of its Real Estate and Equipment and remain in business? What freak'n fantasy world do you live on? Are you high Drugs or something?
If you have a four million dollar family farm and you don't have it in a trust to escape the taxes you deserve to have .gov take nearly half of it. If you have enough money to get hit with Bruce's highest levels you have enough money to dodge the taxman. These rules were built to give an out for the rich and powerful to escape the IRS. Use the myriad of loopholes. Just don't get caught in the upper middle class where your job is to pay for everyone else in the system.
'Sorry' Bruce but this article was a pointless waste of time. The focus needs to be on the cuts first to entitlements and defense and then cutting the Federal govt interference in the lives of people. Increasing taxes just takes GDP out of the real economy. Sure it increases the govt spending component of GDP but in sustainable economies that should a very small part.
I put a "T" of entitlement cuts on the table and you say it's pointless??
That's a monster number.
The only tax increase I proposed is that on the top 2%.
Trust me, that is no big deal.Won't change the outcome one bit.
In this piece I was trying to shape things that had a chance of getting passed. That means compromising. So this is about compromises. I never said this would work. I said that something has to happen, or it surely will end bad.
b
BK,
You stayed a little too long at the GOP Kool-Aid bar.
Absolutely a non starter. All income should be subject to 39.6% and the income subject to the SS tax must be raised to at least $500,000. Trickle down economics is a horrible myth.
"economcis is a horrible myth"---there, fixed it for ya. economics is a kind of social studies dept. where all the professors just keep defending their pet perversions forever; and bend the data and cherry pick the statistics to suit their particular obsession. Look up how much the Federal Government in Switzerland gets paid. The problem is the government; feeding the damn thing isn't going to make it go away.
Nothing will change until we wake up one morning and find no one will take our now worthless Dollars.
The 1981 Movie Rollover describes what will happen when that happens.
Then everyone ignores Washington D.C. and it's laws just as everyone did when the Soviet Union collapsed.
The USA will breakup into loosely associated regions. Texas will get the ball rolling by declaring independence followed by the Confederate States give or take a few.
Continuous growth is not sustainable. It's really that simple. Believing that we can endlessly grow is one of the greatest propaganda achievements in the history of modern economics.
When we can make consuming less a profitable venture, then we'll be on our way to fixing a whole lot of problems.
"Continuous growth is not sustainable. When we can make consuming less a profitable venture, then we'll be on our way to fixing a whole lot of problems."
Does that also apply to Gov'ts, Taxation, spending and deficit spending? I don't know of any entitity or individual that suffers the same level of glutty and Central govt's.
Yes, that applies across the board...Starting with the Military. The relentless expansion of the US Military is not only unsustainable...it is outright dangerous economically, politically, ethically and morally.
I would cut the military budget in half. That's $350B right there.
It could easily be cut to 20% of what it is now; fire thousands of officers; and tell them to collect social security; never mind the O grade "pensions". Nobody in their right mind thinks this mess is defending anything. The CIA could used to be de-funded too; they're not that good at functioning as a de-facto state department. They;re not much good at anything, really.
$600B if you count the entire Mil/Sec complex.
I live in New Jersey ...I wouldn't mind a cap on the property tax deduction if it ment that my town couldn't charge me anything higher ....I'm already close to the limit now @ 27K .....
No matter how cynical I get, it's hard to keep up.
27K... that's a little over four times what my father paid for the house I grew up in, but there's no inflation, right?
Right?
A real estate bubble caused by reckless lending because the bankers got the government to guarantee all their losses isn't exactly the same thing as "inflation."
Actually, it's exactly the same thing as inflation, because inflation is an increase in the supply of money and credit. Bankers relying on guarantees expanded credit, which people used to bid up the price of housing, spending that credit into the economy and creating inflation.
I can see why you'd say that, but you're not following through. The markets aren't interchangeable. Government underwritten loans for housing require recipients to "spend" a lot of the credit on housing--only extremely specific and fairly restricted groups of individuals and businesses can be affected.
I'm curious though: if you're committed to the Austrian definition of "inflation" and want to count bad loans as "money," does that make you a deflationist? Do you think the recent decrease in total credit outstanding over the past few years has been deflationary?
Because for sure, my dollars are buying LESS today than they did in '08, but we've gone through considerable "deflation" (using what would appear to *your* definition) since then.
You're working way too hard at this, Bruce. This would work.
Cut all federal salaries by 10%, benefits by 20%.
Repeat each Jan 1, until the US has a balanced budget based on GAAP.
The weasels can fight out the details among themselves.
lamppost or tree
rope
The only problem with a nat'l sales tax is that it will follow the pattern of the income tax, which initially was 1% on all incomes >$6k, I think (about $300k today). If i nat'l sales tax starts at 0.5%, Congress will happliy jack it up as it pleases. History does repeat itself.
As others have said, exactly right. The asshats out east can never be allowed to have a new tax kitty. 1/2% will last for what, 6-9 months before Maxine Waters, who believe it or not is now the ranking member on the house Financial Services committee (I nearly lost it when I first heard this), is telling the cameras how we need to raise it to 2%. Then Chuck Schumer will say how the rich are not paying their fair share and the sales tax has to go to 5% (yes I understand it is regressive, they will carve out income deciles to fix it somehow) and within the decade it will be 10%. The m0therf0#$rs in Washington must NEVER EVER EVER EVER be allowed to institute a national sales tax EVER, with the SINGLE exception that the 16th Amendment is rescinded and a sales tax is a replacement for the income tax, which ceases to exist.
Exactly right. The whole discussion is based on a fallacy of equivocation.
Private spending tends to be efficient, meet real needs, and give the economy the right signals.
Government spending is never efficient, usually counter-productive, and increasingly is some form of bribe.
100% truth.
Noone will work efficiently if he can just steal money legaly from others (taxes)...
There is no motivation to even start to innovate or make progress if you never have to worry about your budget!
They borrow from our children and tax our asses...
They do legally the biggest evil in our time!
Yes, Mr. President. That will solve the problem. But it won't be done. President Obama will act like Michael Jackson, going on a tour, and leaves everything to his managers. At the end of the day, blame others.
Why try to preserve the status quo? It's time for a reset.