Cutting the deficit, post 2017 tax reform

[none]

well, here we go, we need to balance the budget
the deficit has to be cut
but how?

 

[Horatio Parker]

well, here we go, we need to balance the budget
the deficit has to be cut
but how?

We don't need to balance the budget and if inflation remains low, the deficit can stay where it is or even be increased.

 

[none]

interesting policy

 

[Underseer]

well, here we go, we need to balance the budget
the deficit has to be cut
but how?

By increasing the deficit by trillions of dollars with tax cuts for the elites

Don't worry, the trickle-on fairy will cause new money to magically appear out of nowhere and plug the budget gap! Just like it did under Reagan and Bush and Bush II!

 

[bilby]

Why do we need to balance the budget? Is the USA planning for its retirement, or anticipating the possibility of being fired or forced to take early redundancy?

 

[Jason Harvestdancer]

There are reasons why a balanced budget is a good thing, but none of those reasons are considered worthwhile in our current Keynesian paradigm.

As for cutting the deficit, there is not now and there has not been for decades any actual impetus to cut the deficit. Considering that if you look at the whole budget (not just the on-budget items) that the revenues come to about 2/3 of the expenditures, cutting the deficit would be a very difficult task. One option is significant tax hikes, across the board, nobody left out. Another option is significant cuts, including all the large sacred cows, including programs you think are some of the best things the government does. The third option is some mix of the two, but in this option there are still plenty of hard decisions to make and nothing is left off the table.

Raising taxes on only the rich isn't enough. Cutting waste isn't enough (unless, like me, you think over half of what the government does is waste).

There isn't anyone in Washington with the testicular fortitude to even say this, much less act on it.

 

[SimpleDon]

There are reasons why a balanced budget is a good thing, but none of those reasons are considered worthwhile in our current Keynesian paradigm.

As for cutting the deficit, there is not now and there has not been for decades any actual impetus to cut the deficit. Considering that if you look at the whole budget (not just the on-budget items) that the revenues come to about 2/3 of the expenditures, cutting the deficit would be a very difficult task. One option is significant tax hikes, across the board, nobody left out. Another option is significant cuts, including all the large sacred cows, including programs you think are some of the best things the government does. The third option is some mix of the two, but in this option there are still plenty of hard decisions to make and nothing is left off the table.

Raising taxes on only the rich isn't enough. Cutting waste isn't enough (unless, like me, you think over half of what the government does is waste).

There isn't anyone in Washington with the testicular fortitude to even say this, much less act on it.

What are the worthwhile reasons for balancing the budget? The ones that aren't being considered now.

By the way, Keynes argued that we needed to balance the budget. Why do you think otherwise?

 

[Ford]

well, here we go, we need to balance the budget
the deficit has to be cut
but how?

Step 1: Blame the deficit on the Democrats. Seriously...this will happen.

Step 2: Insist that the budget must be cut, except for defense spending and pet projects for each Republican Congressman's district. Seriously...this will happen.

Step 3: Go after Social Security and Medicare until the people who depend on it (older, white Republicans) collectively freak out, then back down. Seriously...this will happen.

Now the next step depends on the 2018 mid terms. If by some chance the House and/or Senate flip, the path is clear.

Step 1: Blame the deficit on the Democrats.

 

[Horatio Parker]

interesting policy

The govt is nothing like a household and doesn't need to balance it's budget, because it creates the money it spends. Think of it as a scorekeeper. Scorekeepers award or take away points, but they don't have nor do they not have points themselves. They simply create them as needed, nobody worries about or cares where the points come from. Money is a social point award system totally from the mind of humans.

The US spends more on imports than we make selling exports, to the tune of over $500B/yr. making our domestic deficit only $100B. If we eliminate that $600B deficit, not only does the private sector have to do without the spending, they have to draw down their savings or go into debt to pay that $500B export bill.

Whenever you decrease the govt's liabilities, you decrease the private sector's assets. Because a dollar is simultaneously an asset and a liability. When the govt spends more than it collects, those govt liabilities remain in the private sector as assets. When it collects more than it spends, the private sector will have less.

Sometimes govt surpluses are called for. Norway is one example. Because Norway earns a large surplus from exports, if they also deficit spent, they would likely inflate their economy.

But our private sector, the bottom 90% anyway, wages and social spending, and local govt, is starved of dollars. We have far more capacity than we're using. There are different estimates, but the figure I recall is an additional $350B/yr could easily be absorbed without inflating. I don't think the tax bill represents any threat of inflation, except for assets such as the stock market and real estate, things the wealthy invest in and are not considered inflationary. It's mostly wasted on people who don't need it.

 

[SimpleDon]

The tax cuts that the Republicans just passed give 83% of the benefits to the top 1%. The benefit that they added in the last minute will give 400 billion dollars to real estate developers.

 

[jonatha]

The govt is nothing like a household and doesn't need to balance it's budget,

It's just like every other household with a press in the basement that churns out $100 bills....

 

[funinspace]

well, here we go, we need to balance the budget
the deficit has to be cut
but how?

Step 1: Blame the deficit on the Democrats. Seriously...this will happen.

Step 2: Insist that the budget must be cut, except for defense spending and pet projects for each Republican Congressman's district. Seriously...this will happen.

Step 3: Go after Social Security and Medicare until the people who depend on it (older, white Republicans) collectively freak out, then back down. Seriously...this will happen.

Now the next step depends on the 2018 mid terms. If by some chance the House and/or Senate flip, the path is clear.

Step 1: Blame the deficit on the Democrats.

This ^^^

Or...
*Cut the military bloat back to about $400B; we were able to start 2 invasions/occupations when the military only had a $300B budget.
*End the ME domination games; and phase out 50-75% of our foreign bases.
*Cut the State Dept back to 2001 funding levels, plus a CPI adjustment. It jumped up about 300% after 911.
*Cut about $20B out of the spying agencies, and return our rights of privacy back to where they were before we had so many snowflakes.
*Phase out all farm subsidies as 80% go to the well off anyway.
*Uncap the FICA cutoff that is around $114k and raise minimum age for early SS benefits to 64.
*Add a hefty tax on raw petroleum and coal until gas pump price get to $5-6 a gallon over 8 years; but spent the money on infrastructure.
--Seriously, this will NOT happen.

 

[Jason Harvestdancer]

What are the worthwhile reasons for balancing the budget? The ones that aren't being considered now.

I'll get to that a bit later, I'm busy right now, but I wanted to address this next part.

By the way, Keynes argued that we needed to balance the budget. Why do you think otherwise?

Keynes himself did say that. His adherents seem to be of a different mind. It is worth noting that Keynes concerned himself with fiscal policy only, thinking it had the key and trying to manipulate other areas didn't work all that well. He blamed the Crash of 1929 and the ensuing depression on failed monetary policy. A modern follower of Keynesian economics embraces fiscal policy, monetary policy, regulatory policy, etc. Krugman is far more activist than Keynes.

 

[dismal]

The govt is nothing like a household and doesn't need to balance it's budget,

It's just like every other household with a press in the basement that churns out $100 bills....

Right, this is why the Trump tax cuts don't go far enough. We can just print the money we need. Or want.

 

[Horatio Parker]

The govt is nothing like a household and doesn't need to balance it's budget,

It's just like every other household with a press in the basement that churns out $100 bills....

Or changes numbers up or down on a computer screen.

The real analogy to a household would be one where the head of household credits points for chores and debits
them for rent. Household members get a point or whatever for washing the dishes or sweeping etc, and are then periodically debited to pay their rent. The rent is a tax and the tax is incentive to earn points. The points themselves are just abstractions or symbols.

 

[Loren Pechtel]

1) Arrest a bunch of the 1%ers for the bribery they did to get this abomination passed. Fine them the costs of the tax bill.

2) Elect a bunch of Democrats who run on a basis of repealing this abomination.

 

[Trausti]

1) Arrest a bunch of the 1%ers for the bribery they did to get this abomination passed. Fine them the costs of the tax bill.

2) Elect a bunch of Democrats who run on a basis of repealing this abomination.

Abomination? Nah. Trump may have just secured his reelection.

AT&T, Comcast giving $1,000 bonuses to hundreds of thousands of workers after tax bill

Telecom giant AT&T was quick to respond to news of U.S. tax reform, announcing it would give some employees bonuses once the legislation is signed into law.

AT&T said in a press release Wednesday that it would give more than 200,000 of its U.S. workers who are union members a special bonus of $1,000. The company also increased its capital expenditures budget by $1 billion in the U.S.
*
Later in the afternoon, cable and media company Comcast NBCUniversal (CNBC's parent company) made a similar move: it announced it would give special $1,000 bonuses "ased on the passage of tax reform and the FCC's action on broadband." Those bonuses would apply to more than 100,000 employees that are eligible and not in executive roles.

The company also made a big spending commitment to bolster its broadband plants, television and film production, and theme parks, pledging an outlay of at least $50 billion over the next five years.

Wells Fargo, Fifth Third Bancorp unveil minimum wage hikes after tax bill passage

Fifth Third Bancorp will pay more than 13,500 employees a bonus and raise the minimum wage of its workforce to $15 an hour after the passage of the Republican tax plan that will cut the bank's corporate tax rate.
*
Cincinnati-based Fifth Third, the fifteenth largest U.S. bank by asset size, said the tax cut allowed it to re-evaluate its employee pay and pass along some of the windfall. Nearly 3,000 workers will see hourly wages rise to $15. The $1,000 one-time bonus is expected to be paid by the end of this year, the bank said, assuming President Donald Trump signs the bill into law by Christmas.

Senior managers and top executives are excluded from the special payments. "It is good for our communities, employees and Fifth Third Bank," said CEO Greg Carmichael in a statement.

Boeing CEO promises increased investment after GOP tax bill passes

Aerospace giant Boeing quickly praised passage of the GOP tax bill, promising $300 million in new charitable investments and workforce development.

 

[Jimmy Higgins]

Yeah, AT&T gives back 10% of their tax savings to the workers. OMFG! $1000 bonus. Fuck yeah! $20 for every week.

 

[Harry Bosch]

The govt is nothing like a household and doesn't need to balance it's budget,

It's just like every other household with a press in the basement that churns out $100 bills....

Or changes numbers up or down on a computer screen.

The real analogy to a household would be one where the head of household credits points for chores and debits
them for rent. Household members get a point or whatever for washing the dishes or sweeping etc, and are then periodically debited to pay their rent. The rent is a tax and the tax is incentive to earn points. The points themselves are just abstractions or symbols.

Ford is absolutely correct. The deficit is expected to explode due to SSN and Medicare growth. This coupled with the decrease in tax revenue from republican cuts will create the psychological need to cut programs in the future.

 

[dismal]

Or changes numbers up or down on a computer screen.

The real analogy to a household would be one where the head of household credits points for chores and debits
them for rent. Household members get a point or whatever for washing the dishes or sweeping etc, and are then periodically debited to pay their rent. The rent is a tax and the tax is incentive to earn points. The points themselves are just abstractions or symbols.

Ford is absolutely correct. The deficit is expected to explode due to SSN and Medicare growth. This coupled with the decrease in tax revenue from republican cuts will create the psychological need to cut programs in the future.

Everyone here knows we have the Magick Bonds in the Unicorn Trust Fund to take care of that. Stop being such an alarmist.