The deficit is going down

[Charles]

Originally Posted by Wasillaguy

I think it's a political characterization to imply that the average conservative would deny citizens benefits they have paid for. That said, the government is the worst bank there is. I'm all for phasing these programs out so people can make free decisions in a competitive market about how to finance retirement and healthcare.
I try to be realistic myself. If it goes to the government, the union, or my wife, I never expect to see a penny of it again.

Go easy on your wife, she can't be THAT bad.

Chas

[Charles]

Originally Posted by BlueStreak

Then, what's up with the Ryan plan to eliminate Medicare? Is that not a program for the elderly? Are we planning to replace it with anything? The language I hear coming from the right, for the last thirty years, paints anyone who recieves anything from the government as a "freeloader" even when they paid into it, or worked for it.

Am I wrong in that?

Dave

I'm not familiar with the Ryan plan. It really doesn't matter what his plan is at this moment.

The fact that someone is willing to touch the 3rd rail of politics is long overdue.

In a way, the Democrats deserve some credit for having the guts to address healthcare with PPACA, although they handled it like the dumbest, shade tree mechanic in existence.

Had they have done it right, they and Obama would be guaranteed reelection. The Republicans couldn't even block what they did, and they for sure couldn't have blocked them if they had a plan which gathered public support.

Just some thoughts,

Chas

[Oerets]

What I have seen from family experience with Medicare and Tricare is that they in effect have been given a cut in benefits and pay have not made it back up. But on the other hand those who can already afford any increases in the costs of living and healthcare have been getting their taxes cut.




Barney

[BlueStreak]

Originally Posted by Wasillaguy

I think it's a political characterization to imply that the average conservative would deny citizens benefits they have paid for. That said, the government is the worst bank there is. I'm all for phasing these programs out so people can make free decisions in a competitive market about how to finance retirement and healthcare.
I try to be realistic myself. If it goes to the government, the union, or my wife, I never expect to see a penny of it again.

I think it's an accurate description of conservatives to say they think others are "stealing" from them, if one red cent of their money ends up in anyone elses pocket by any means, especially if it is by taxation. If you want to make copper wire, drop a penny at the Republican Convention.

People already have the ability to choose retirement and healthcare plans in the freemarket. However, the only thing more unstable and unreliable than the government is the so-called freemarket. This is why social safety nets are necessary and why they must be kept as separate from the freemarket as possible. This was the lesson your party failed to learn from the great depression. And the reason why their ideas set us, the common folk, up for disaster. We've already had that system once before. It didn't work. The market tanked, people starved. The reason Republicans want to kill the social safety nets and give more tax cuts to the wealthy, (Not us.), is because that's what they get paid to do.

Isn't it becoming more obvious by the day?

Dave

[whell]

Originally Posted by d-ray657

Are we still relying on the Laffer curve?

Regards,

D-Ray

We still want to refute an entire idea with 1/2 the argument?

It is about revenue, and it is about spending. Our government is currently being dishonest about both. They understate revenues, they refer to a "loan" as revenue for purposes of declaring a balanced budget while having zero intention of making payments on the loan principle. They declare a budget plan a success if if fixes a current problem 6 to 8 years hence.

If we can't agree on fundamental principles of economics when we discuss government financing, then the argument is lost before it starts between us, and the winner is the the guy in Washington who keeps us distracted with an argument while he continues to steal us blind.

So, let's try some fundamental principles, at least one to start with.

When a particular activity is penalized do you get more or less of that activity?

When a particular activity is subsidized, do you get more or less of that activity?

The answer, of course, is that subsidies increase the occurrence of an activity, while penalties decrease it.

Are taxes a penalty or a subsidy when engaging in an activity? They are, of course, a penalty.

So, which do you think would be the best fuel for economic activity: an increase or decrease in the penalty? If we can agree that a reduction in penalty, or subsidy, increases the likelihood that a particular activity will be repeated, then should the goal of encouraging economic growth focus on increasing subsidy or increasing penalty? Hopefully, we're still on the same page at this point, and can a agree that a subsidy encourages growth.

So, if the economic value of producing one widget is $1.00, and the widget is currently taxed at 50%, the government takes home $0.50. While, on its face, the government might be satisfied with retaining that $0.50, that $0.50 must also abide by the fundamental principles of economics.

If the government decided to test the Laffer curve, and drop tax (penalty) on producing that widget to $0.40, the widget will now cost $1.40 rather than a $1.50 in the marketplace. The law of supply and demand suggest that the widgets demand level will increase at the lower price point. We now have to produce more widgets to meet demand.

Increasing productive output has a whole host of positive effects beyond just the production of the widget. Certainly Widget Inc. will now be operating with potentially increased efficiency / capacity to produce more widgets. Widget Inc will be buying more raw materials to make more widgets, they may have to add to the workforce to increase demand, converting capital into product and wages.

Let's say the demand in creases by 50%: Widget incorporated must sell 1.5 widgets for every one widget that they sold previously. Well, the government used to collect $0.50 for each widget sold, now they're collecting $.40 for each widget, but more widgets are being sold. At a 50% increase in demand, that's $0.40 on the first widget sold, and an extra $0.20 on the additional 1/2 widget sold due to increased demand. So, now the government is collecting $0.60 when it used to collect $0.50.

You can start to put other names on this: Laffer curve, Reaganomics, whatever. Those names refer to government economic policies and budget law: Of course, the old joke about not wanting to see either sausage or laws get made has to apply here as well. But in a classic economic sense, the principles are sound.

The reverse is also true. If you increase the penalty for widget production, you will get less widgets. If you tax an activity, you will get less of it, and therefore antcipated revenue from the tax increase will fall as well (tax policy projections are typically based on an assumption of static demand, which doesn't exist in economics).

Therefore, making bold economic projections about balancing the budget by increasing taxes (whether its just on the "1%" or more broad-based) is Fantasyland to me. Further, those folks in the "1%" who have the means to do so will be particularly adept at changing their tax strategy to avoid a tax. Its the 99% for don't have the means - or the expert tax advice - who typically become collateral damage when Washington plays with tax policy.

Of course, if we can't agree on the application of fundamental economic principles in these discussions, then what's the point?

[d-ray657]

How much more will the widgets cost when the manufacturer has build it's own school to educate it workers, build its own infrastructure to transport it's product and receive its supplies, hire private security to protect its plant, hire mercenaries to protect the shipping lanes for any products it might export, and pay private contractors for every other government service that it takes for granted. Or we could look at the tax as part of the cost of doing business instead of a penalty.

Regards,

D-Ray

[djv8ga]

Originally Posted by BlueStreak

I see homes selling again.
Dave

Really? WTF do you know about the real estate game besides doing flips during bubbles?
You have a license...correct?

[whell]

Originally Posted by d-ray657

How much more will the widgets cost when the manufacturer has build it's own school to educate it workers, build its own infrastructure to transport it's product and receive its supplies, hire private security to protect its plant, hire mercenaries to protect the shipping lanes for any products it might export, and pay private contractors for every other government service that it takes for granted. Or we could look at the tax as part of the cost of doing business instead of a penalty.

Regards,

D-Ray

Doesn't matter how we "look at it" when we have no control over how its spent, what's its spent on, or whether or not it ever goes towards its stated purpose. The penalty or subsidy simply "is".

Also, if you're going down that road, then I'd offer this:

If the tax is really a "cost of doing business", then the business should be able to allocate those costs exactly. But can you confirm for me that the there is a dollar for dollar accounting of the money that the business spends in profit taxes, property taxes, use taxes, sales taxes, payroll taxes, capital gain taxes, transportation fees/taxes, asset taxes, license fees, etc. against those direct expenses? If not, and it the business pays more in taxes then it gets back in services (very, very likely the case), isn't this a subsidy? And who is the beneficiary of that subsidy? And what activity is stimulated with that subsidy?

[BlueStreak]

Originally Posted by Oerets

What I have seen from family experience with Medicare and Tricare is that they in effect have been given a cut in benefits and pay have not made it back up. But on the other hand those who can already afford any increases in the costs of living and healthcare have been getting their taxes cut.




Barney

Of course "pay has not made it back up". That's the whole idea. Daddy Warbucks wants his tax cut. He wants us little pissants to stop oppressing him. We can't give it to him if we compensate like that, the cuts have to be real. You see, the man with the knife at your throat doesn't care how you make up for the money he took, that's your problem. Go out and get a third job and work until you die if you have to. Praise be to Ayn Rand, and pass the collection plate Brother Breitbart. The Plutocracy won't be satisfied with a mere pittance, we must be generous and humble in our submission.

[Bigerik]

The unregulated free market has shown over and over again that, given the freedom to do what they want, they will always cut their own throat for some short term gain.