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Balance the budget in 4 years

Posted: 12/8/2012 5:45 PM

Balance the budget in 4 years 


Reduce spending as % of GDP by 1% a year (to 20%).

Increase revenues as % of GDP by 1.25% a year (to 20%).

Hopefully this could be done without derailing the economy.  If the economy continues to grow over that period of time, revenues could increase, in part from improved economic activity and spending could decrease as unemployment, aid to low income families would reduce as a result of improved economy.  The balance, and the bulk probably, would have to come through legislation.
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Posted: 12/9/2012 1:04 PM

RE: Balance the budget in 4 years 


That seems reasonable, but good luck getting Dems to agree to 1% or Rep's to even consider 1.25%. After all, when you attach a dollar amount to those percentages ($135B and $170B, respectively per year) that's too much for either side to agree to.

BTW, the historical average for federal spending WRT GDP is around 18%, so those percentages should really be reversed.
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Posted: 12/9/2012 1:57 PM

RE: Balance the budget in 4 years 


Just curious.  Over what time frame is your 18% average computed?  The average I computed for outlays over the past 50 years was 20.6%.
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Posted: 12/9/2012 3:04 PM

RE: Balance the budget in 4 years 



VUGearhead wrote: That seems reasonable, but good luck getting Dems to agree to 1% or Rep's to even consider 1.25%. After all, when you attach a dollar amount to those percentages ($135B and $170B, respectively per year) that's too much for either side to agree to.

BTW, the historical average for federal spending WRT GDP is around 18%, so those percentages should really be reversed.
Is this a joke?

18% of GDP isn't going to happen, any time soon. Conservative hero and GREATEST PRESIDENT EVAR Ronald Reagan (and George HW Bush) ran government at 22% of GDP. And that was before the largest generation of Americans in history, the Baby Boomers, retired.

"Balance the budget around 19 percent of GDP, Republicans say, and call it a day.


The flaw in this reasoning is that we're on the verge of doubling the number of seniors on Social Security and Medicare. Ronald Reagan ran government at 22 percent of GDP when the United States' population was much younger. Even after we take steps to slow the growth of our health and pension programs (which we must), it's impossible to fund the boomers retirement at historic levels of taxation and balance the budget without decimating government activities devoted to non-elderly purposes—including the R&D and infrastructure that help propel future growth.


Sorry Grover—in an aging America, federal spending, and taxes, are destined to rise."

Indeed.

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Posted: 12/10/2012 7:54 AM

RE: Balance the budget in 4 years 


According to this web site: www.usgovernmentspending.com/s...3s1li011mcn_F0f

federal expenditures did not consistently top 20% of GDP until the mid-70's, under Jimmy Carter, except during times of war. As for Reagan and Bush Sr., Reagans cold war defense expenditures toppled our greatest adversary, the USSR. And Bush Sr. was in power for Gulf War I to free Kuwait. Federal spending even dipped under 20% during the late Clinton years. So federal spending in excess of 20% is a relatively new phenomenon.

Not to start a bashing contest on previous administrations, but we knew the boomers were coming. These services should be prepared to meet their fiduciary responsibilities. If they aren't, then the promises made by previous administrations/politicians aren't worth the tape they were recorded on. And impoverishing future generations to pay for the expectations from an unreasonable promise is ludicrous.

Face it, our politicians from generations past have sold us the Brooklyn Bridge (or waterfront property in New Mexico, or whatever flim-flam you can imagine).
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Posted: 12/10/2012 10:39 AM

RE: Balance the budget in 4 years 



VUGearhead wrote: According to this web site: www.usgovernmentspending.com/s...3s1li011mcn_F0f

federal expenditures did not consistently top 20% of GDP until the mid-70's, under Jimmy Carter, except during times of war. As for Reagan and Bush Sr., Reagans cold war defense expenditures toppled our greatest adversary, the USSR. And Bush Sr. was in power for Gulf War I to free Kuwait. Federal spending even dipped under 20% during the late Clinton years. So federal spending in excess of 20% is a relatively new phenomenon.

Not to start a bashing contest on previous administrations, but we knew the boomers were coming. These services should be prepared to meet their fiduciary responsibilities. If they aren't, then the promises made by previous administrations/politicians aren't worth the tape they were recorded on. And impoverishing future generations to pay for the expectations from an unreasonable promise is ludicrous.

Face it, our politicians from generations past have sold us the Brooklyn Bridge (or waterfront property in New Mexico, or whatever flim-flam you can imagine).
The website you are citing for information is run by this guy:

"I am a member of the international capitalist conspiracy. Both my grandfathers owned and operated import/export businesses in the early twentieth century, one in St. Petersburg, Russia, where my father was born, and the other in Kobe, Japan, where my mother was born.

I was born in India and raised and educated in England. I immigrated to the United States in 1968 and worked for many years designing and implementing utility control systems and software in Seattle.

Despite 35 years living in Seattle, I instinctively revolted against the suffocating left-coast culture of the Soviet of Washington, and came to revere the four great Germans who helped inspire the Reagan revolution: Ludwig von Mises, F.A. Hayek, Leo Strauss, and Eric Voegelin."

rolleyes

I'd suggest finding your news elsewhere, but it's up to you whether you want to establish any credibility.

Last edited 12/10/2012 10:40 AM by Dore2004

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Posted: 12/10/2012 12:06 PM

RE: Balance the budget in 4 years 



VUGearhead wrote: According to this web site: www.usgovernmentspending.com/s...3s1li011mcn_F0f

federal expenditures did not consistently top 20% of GDP until the mid-70's, under Jimmy Carter, except during times of war. As for Reagan and Bush Sr., Reagans cold war defense expenditures toppled our greatest adversary, the USSR. And Bush Sr. was in power for Gulf War I to free Kuwait. Federal spending even dipped under 20% during the late Clinton years. So federal spending in excess of 20% is a relatively new phenomenon.

Not to start a bashing contest on previous administrations, but we knew the boomers were coming. These services should be prepared to meet their fiduciary responsibilities. If they aren't, then the promises made by previous administrations/politicians aren't worth the tape they were recorded on. And impoverishing future generations to pay for the expectations from an unreasonable promise is ludicrous.

Face it, our politicians from generations past have sold us the Brooklyn Bridge (or waterfront property in New Mexico, or whatever flim-flam you can imagine).
And they were under 10% in the '30's.  No way we are going back to the '50's or '60's.

Do you REALLY think we can reasonably reduce spending from 24% of GDP to 18% in this world/economy?
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Posted: 12/10/2012 12:10 PM

RE: Balance the budget in 4 years 


This website www.usgovernmentspending.com/s...3s1li011mcn_F0f wrote: ...Reagans cold war defense expenditures toppled our greatest adversary, the USSR...
I am always happy to debate this revision of history. Did the renewed arms race help keep the Russians in economic straits? Yes. Were they solely responsible? Only to the partisan-minded who are interested mainly in dumbing down history, rather than in understanding its complexities.

Fundamentally, the USSR lost the Cold War because, as we warned them for 60 years, they were relying upon an inferior and ultimately unsupportable economic system. It (their economic system) was actually as close to feudalism as it was to Karl Marx' communism. 

I still keep a framed poster on my office wall, which my Mom brought back from her tourist visit to the USSR, circa 1980. It's a honeybee returning to his hive, the cells of which morphs upwards into a New Socialist Housing Development. At the top, the slogan exhorts in Russian, "Work!--as if for yourself!"

No human in the history of the world ever has, or ever will, work for the State with the same diligence as they will work for themself. That's the doom of the USSR in a nutshell. People want to be free people, not drones.

I cannot understand why right-wingers are so eager to award all the credit for the USSR's demise to Ronald Reagan. It's as if, in their hearts, they don't actually believe that our capitalism defeated their communism, economic system versus economic system. I understand they love the Gipper, but a single President does not outweigh historical forces. Do Democrats ever pretend that FDR won WWII single-handedly? That would be beyond silly.

I'm happy to discuss the USSR's fatally flawed reliance upon oil production & export, if anyone's crazy enough to ask. Ultimately, the USSR economy relied far more upon extraction of cheap, abundant oil than it ever did upon communist ownership of the means of production. I considered writing a book about this stuff at one time, but an un-refusable job offer rendered that impractical.
They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 12/10/2012 1:04 PM

RE: Balance the budget in 4 years 


Did I say RR was the sole instigator of the downfall of the USSR? No. But I definitely believe that the circumstances he established in his presidency, coupled with who I believed to be a weak Soviet leader (Gorbachev) accelerated the inevitable. You certainly did not see the level of Soviet weakness during Carter's presidency that you did under Reagan's.

But that was not the point, so please try to stay on the subject. THE POINT, was that federal spending was higher under Reagan due to his policy tactic of placing economic pressure on the Soviet Union by pushing the arm's race (remember Star Wars?) that they couldn't sustain. Bush Sr. had Gulf War I. We're talking federal spending relative to GDP, remember?

Clinton had no major conflicts. Bush Jr. had to respond to 9/11, remember? (I'm not touting his economics, but just offering a reason why federal expenditures were higher under his administration). Starting to see the pattern?

We should be able to maintain federal spending at 20% or lower of GDP - as long as we are not prosecuting any military excursions somewhere around the world.
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Posted: 12/10/2012 1:37 PM

RE: Balance the budget in 4 years 



VUGearhead wrote: According to this web site: www.usgovernmentspending.com/s...3s1li011mcn_F0f

federal expenditures did not consistently top 20% of GDP until the mid-70's, under Jimmy Carter, except during times of war. 
Pathetic. You can't even read your own chart. It wasn't "under Jimmy Carter" -- it was under Gerald Ford, who was president in '75 and '76. Spending actually declined under Carter 3 straight years.

And of course, Carter never outspent Reagan.
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Posted: 12/10/2012 2:10 PM

RE: Balance the budget in 4 years 


VUGearhead wrote: Did I say RR was the sole instigator of the downfall of the USSR? No...But that was not the point, so please try to stay on the subject...
I knew it was your website's words, & not yours, that I was refuting. I never intended my rebuttal to be directed solely at you.

I (sometimes) like sticking to the point, too. But if your quotes wander away from the point, & state as fact something that I believe to be untruthful, I'm not going to let it slide. Sorry if that bugs you.

The simple solution, of course, is for you to post only those portions of your quoted sources that are themselves TO THE POINT. Edit a bit for pertinence. Then I will feel no compulsion to defend Truth, Justice & the American Way of Getting Off on Tangents.
They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 12/11/2012 1:16 AM

RE: Balance the budget in 4 years 


"I'm happy to discuss the USSR's fatally flawed reliance upon oil production & export, if anyone's crazy enough to ask."  Careful, comrade.  Gazprom and Rosneft know where you live and how you remain warm.
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Posted: 12/11/2012 10:46 AM

RE: Balance the budget in 4 years 


BigHatchie wrote: "I'm happy to discuss the USSR's fatally flawed reliance upon oil production & export, if anyone's crazy enough to ask." Careful, comrade. Gazprom and Rosneft know where you live and how you remain warm.
I've got a lengthy -- if not quite boffo -- response to this, but out of respect for Gear's admonishment to stick to the Budget Balancing point, I am voluntarily self-stifling.

So for pertinence's sake, allow me to suggest the most important tie that the Oil Bidness has back to the current US portion of the global economic downturn: fundamentally, until & unless the unrelated-to-federal-spending portion of our national economy improves, we cannot really ease our budgetary woes, we are merely debating about whether particular choices will make things worse or merely be indifferent.

The Oil Bidness, or the energy business in general, represents the sole major exception to our current economic doldrums, & as such it therefore represents our best hope for getting the economy growing again, in the absence of a housing construction boom. Oil Patch booms are often out of phase with the rest of the US economy, but they're not unrelated. And if you're looking for good economic news in today's continuing bleak economy, the Oil Patch is the place to look.

Quoting from the investment analyst John Mauldin: "As I noted a few weeks ago, shale gas will add about 0.5% to the growth of US GDP next year, in a year when we will be lucky to get 2% [growth]. This is a huge driver of jobs and growth. And it is not just in North Dakota; there are shale gas plays all over the US and Canada. Continental Resources announced a major new shale gas field in Oklahoma in October, comparing its geology to that of the Bakken.

The US will be exporting natural gas within 3-4 years from McAllen, Texas, and other LNG ports are in various stages of permitting. Natural gas in Japan is over $15, compared to $3.78 this morning in the US. Europe is in double digits ($11.83). There is an arbitrage available here. Even an economist can do the math.

But our real advantage may not come in exporting raw gas but rather in the chemical products you need gas to make. Not just fertilizers but feedstocks for plastics and other organic chemicals.

The Financial Times wrote last Saturday, "Europeans are already complaining that cheap US gas is encouraging a flight of energy intensive businesses [to the US]. How can, say Europe's chemical producers – buying expensive Russian gas – compete with US rivals guaranteed access to cut-price feedstock?”...

Consider what a game-changer it will be if the U.S. becomes energy self-sufficient once again. Absent that, we are to a large degree merely debating how to postpone the country's inevitable economic decline for as long as possible, when we debate how best to get the budget back under control (or whether this is the time right now to do that). If we do achieve energy self-sufficiency, much becomes possible that really isn't right now.

It will not make us instantly solvent once again, but it will give us the economic breathing space to make that solvency possible, if we're wise enough.
They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 12/11/2012 11:02 AM

RE: Balance the budget in 4 years 


Excellent post, vebilt. What portion of our trade deficit does foreign oil currently represent? 40%, more?

Imagine if all that capital (sp?) remained in house rather that shipping it to the Middle East or South America?
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Posted: 12/11/2012 11:12 AM

RE: Balance the budget in 4 years 


VUGearhead wrote: Excellent post, vebilt. What portion of our trade deficit does foreign oil currently represent? 40%, more?...
Close to 60%! Check out the second graph down in this Census Bureau website.

This is why I don't have the usual knee-jerk liberal reaction against the very high tax credits that go specifically to the oil industry. Although I do imagine that those breaks could be directed more accurately, in a way that better encourages job growth & expansion within the industry.

Saying "Drill, baby, drill!" doesn't approach the issue, because the nation's drill rigs have effectively been fully employed for the past 8 years or more. But I expect that tax credits could be directed toward accelerating the construction of new rigs, platforms, etc. We don't need to direct tax credits toward incentivizing drilling, 'cause the economic incentive there is fully sufficient unto itself.
They laughed when I said I was going to be a comedian. They're not laughing now. -Bob Monkhouse (1928-2003)
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Posted: 12/11/2012 11:13 AM

RE: Balance the budget in 4 years 


Classy, Bruin. Ford also had to deal with the last democratic supermajority in the House this government had. Where do appropriations originate in our form of government again?
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Posted: 12/11/2012 11:38 AM

RE: Balance the budget in 4 years 



VUGearhead wrote: Classy, Bruin. Ford also had to deal with the last democratic supermajority in the House this government had. Where do appropriations originate in our form of government again?
If pointing out that you misrepresented the facts of your own source isn't "classy" -- then I'm guilty.

"Spending went up to 20% of GDP for the first time ever in peace time under big-spending librul Jimmy Carter!" WRONG. Fail. Embarrassing. As you would've known, if you'd bother to read your sources.

Geez.

And please, give us a break with all of these caveats. Unless you're willing to extend them to Barack Obama as well.
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Posted: 12/11/2012 11:54 AM

RE: Balance the budget in 4 years 


Misrepresentation? Why would you put quotes around something that aren't my words? If you want to paraphrase, then paraphrase. I'm fully aware that both Ford and Reagan had budgets over 20% GDP. I take it that I am not allowed to shade my points in my favor, whereas you are? That double standard would be the pathetic part.

The classy part is how you fold in personal attacks in your rhetorts. I luv u 2, babe.
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Posted: 12/11/2012 1:03 PM

RE: Balance the budget in 4 years 


Misrepresentation?

Yes. Do you deny that you claimed, incorrectly and in contradiction of your own citation, that:

federal expenditures did not consistently top 20% of GDP until the mid-70's, under Jimmy Carter, except during times of war. 

Who wrote that?

Why would you put quotes around something that aren't my words? 

Because your "mistake" just happened to coincide with the clumsy and inaccurate partisan point you were making, ie., that things were going along just fine until that free-spending librul Jimmy Carter wrecked everything. That's why.

I take it that I am not allowed to shade my points in my favor, whereas you are?

You didn't "shade" anything. You simply made something up. You posted "x" and claimed it was "y."

Again, pathetic.
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Posted: 12/11/2012 2:04 PM

RE: Balance the budget in 4 years 


Again, you mis-represent my words. Just because you prefer to interpret my words as meaning ONLY Jimmy Carter just tells me you have a sensitive nerve there. I could say that Ford was dealing with Vietnam as well, but since his predecessors also had to deal with that and were still able to keep spending under 20% GDP, that also didn't support my position, so I left it out. Of course that '74 mid-term election brought in that Democratic supermajority that also, coincidentially cut off funding for Vietnam. Yet, somehow spending still climbed. But if you insist, yes, I missed the last two years of Ford's administration spending above 20% GDP. Happy?

HOWEVER, that does not take away from the fact that annual federal spending above 20% of GDP is still a relatively recent peacetime phenomenon.
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