How would you fix the United States' budget problem?

[AiliailiA]

I would fix the US budget, by slashing spending, loosening regulations, gutting welfare programs and completely abolishing income and corporate taxes. Furthermore I would support an amendment paying off 20 % of all tax revenue to paying off our debts, and then have the entire Obama administration tar and feathered on live tv for their incompetence. It would be called the tar & feather big budget spenders amendment.

Do you even have one foot in the pool of reality?

Ah, I see you have met Yandere Schoolgirls.

YS must be homeschooled. It's the only possible explanation.

[Neu Leonstein]

Well, what's the problem facing the US?

A massive drop in government spending, which the CBO estimates could be enough to trigger another recession. So that's the budget problem which needs fixing.

I'd probably go ahead and let the Bush tax cuts expire, and instead slash personal income taxes on lower rates while particularly working on smoothing transitions from one tax bracket to the next. I'd spend money on infrastructure, fixing bridges, expanding airports and improving state university access while lowering study fees. I'd invest some money in space exploration, just because I like it. I'd expand unemployment benefit programs and food stamp issuance while the economy is struggling. I'd try and spend some more money on trying to get the housing crisis fixed - ie aiding people in negative equity with refinancing and so on.

Then I'd also look to put together a single-payer system for old-age related medical expenses, with the aim to replace the current healthcare system for old people. I'd also relax rules on everyday medical services, looking to introduce 'Wal-Mart Clinics', run by the private sector using more nurses than doctors, looking to make a profit by providing low-cost medical services.

I'd encourage private savings rather than public pensions. I'd probably look to introduce a system more like the Australian one, where there are tax advantages to locking your money up in private superannuation investment funds, encouraging people to create an asset base that could take the pressure off the public social security system. To aid with that I'd consider things like pushing public retirement benefits back to, say, 72 years or something like that. If you want to retire before then, you'll want to do some saving yourself. Public retirement benefits could also be frozen, such that they get reduced due to inflation over time.

As for how I would fund the immediate expenses? Borrowing, for one thing. The expiration of the Bush tax cuts, and return in tax revenue as the economy recovers, will help a great deal too.

[Faith Hope Charity]

Kill public sector unions, medicare, medicaid, foreign wars, welfare, foreign aid, all subsidies and special interests, hell... that's just starters.

Kill income tax, replace with consumption tax (fair tax).

[Parpolitic Citizens]

Kill public sector unions, medicare, medicaid, foreign wars, welfare, foreign aid, all subsidies and special interests, hell... that's just starters.

Kill income tax, replace with consumption tax (fair tax).

A consumption tax is not a fair tax. It is a regressive tax. The poor and middle class HAVE to spend a higher percentage of their wages on basic needs like housing, transportation and food. Now, I could agree with a consumption tax if those at the top were required to spend at the same level as the median person.

[Freiheit Reich]

Kill public sector unions, medicare, medicaid, foreign wars, welfare, foreign aid, all subsidies and special interests, hell... that's just starters.

Kill income tax, replace with consumption tax (fair tax).

A consumption tax is not a fair tax. It is a regressive tax. The poor and middle class HAVE to spend a higher percentage of their wages on basic needs like housing, transportation and food. Now, I could agree with a consumption tax if those at the top were required to spend at the same level as the median person.

A common arguement against fair tax. However, people have choices in how much they spend and it will encourage people to be more frugal. Tax on food too high? Grow a vegetable garden and raise chickens (if you are in a rural area). Tax on housing too high? Live in shared housing to decrease expenses. There are poor cheapskates and people with great jobs living paycheck to paycheck. We can find people to support and oppose that common idea. The bottom line is that flat tax (either consumption or income) is the only fair tax. The bottom 20% of Americans pay very little taxes, many pay none. Is this fair? The poorest people use govt. services the most and pay the least-this sounds unfair to me.

From each according to his ability, to each according to his need (or needs) is a slogan popularised by Karl Marx. Very dangerous statement and the progressive tax follows Marx's philosophy. We all know what happened to countries that follow Marx's ideas as cosely as possible.

[Parpolitic Citizens]

A consumption tax is not a fair tax. It is a regressive tax. The poor and middle class HAVE to spend a higher percentage of their wages on basic needs like housing, transportation and food. Now, I could agree with a consumption tax if those at the top were required to spend at the same level as the median person.

A common arguement against fair tax. However, people have choices in how much they spend and it will encourage people to be more frugal. Tax on food too high? Grow a vegetable garden and raise chickens (if you are in a rural area). Tax on housing too high? Live in shared housing to decrease expenses. There are poor cheapskates and people with great jobs living paycheck to paycheck. We can find people to support and oppose that common idea. The bottom line is that flat tax (either consumption or income) is the only fair tax. The bottom 20% of Americans pay very little taxes, many pay none. Is this fair? The poorest people use govt. services the most and pay the least-this sounds unfair to me.

From each according to his ability, to each according to his need (or needs) is a slogan popularised by Karl Marx. Very dangerous statement and the progressive tax follows Marx's philosophy. We all know what happened to countries that follow Marx's ideas as cosely as possible.

Sure, you can live in the cheapest place possible, eat the cheapest food, and and take the cheapest mode of transportation, however, the poor would still be paying a higher percentage of their income. Marginal utility is the most effective way to determine the tax rate. The poor need the largest portion of their to function. The rich do not.

[Keronians]

· Have the Federal Reserve subsidise the US Treasury in the short-term should it need it. Given current climate, and the state of equity markets, I doubt that this will be needed.

· Encourage the Chinese, and other major foreign bond holders, to hold on to their bonds, and not sell them.

· Further centralise education, and increase the power of the department of education.

· Implement a hybrid single payer healthcare programme. Insurance is provided by the government to each and every citizen. Hospitals are run privately, and charge their own fees. Given that price competition is difficult, given the monopsonic nature of this market, there is no inbuilt price control mechanism in place. Hence, the State should set a fees ceiling. Up until that ceiling, the State will insure the citizen. Beyond the ceiling, private insurance / own money needs to be used. Now, the problem, again, is that it still does not prevent massive price escalation. Quality control is inbuilt, but the hybrid system sacrifices the price control mechanism in exchange for universal access. Invisibile price inflation will likely lead to escalating costs to the government. So, limit net profit margins at a maximum of 30%. This forces cost control, as well as skimming price strategies.

· Cut defence expenditure by 50% in real terms over a period of 10 years.

· Sell off some 25% of the nuclear arsenal.

· Tax capital gains at the same rate as other sources of income are taxed.

· Raise taxes on all income groups by 5% over a period of 3 years.

· Reduce corporate tax rates on all earnings groups by 10% over a period of 5 years.

· Close all tax loopholes.

· Cut government contractors.

· Carry out major infrastructure overhaul.

· Synchronise consumption taxes at a 5% level, with all proceeds going to the individual states.

· Promote free trade, and reduce customs. Expand certain key ports.

· Raise awareness and funding for microfinancing schemes.

[Freiheit Reich]

A common arguement against fair tax. However, people have choices in how much they spend and it will encourage people to be more frugal. Tax on food too high? Grow a vegetable garden and raise chickens (if you are in a rural area). Tax on housing too high? Live in shared housing to decrease expenses. There are poor cheapskates and people with great jobs living paycheck to paycheck. We can find people to support and oppose that common idea. The bottom line is that flat tax (either consumption or income) is the only fair tax. The bottom 20% of Americans pay very little taxes, many pay none. Is this fair? The poorest people use govt. services the most and pay the least-this sounds unfair to me.

From each according to his ability, to each according to his need (or needs) is a slogan popularised by Karl Marx. Very dangerous statement and the progressive tax follows Marx's philosophy. We all know what happened to countries that follow Marx's ideas as cosely as possible.

Sure, you can live in the cheapest place possible, eat the cheapest food, and and take the cheapest mode of transportation, however, the poor would still be paying a higher percentage of their income. Marginal utility is the most effective way to determine the tax rate. The poor need the largest portion of their to function. The rich do not.

If this was true why are there many millionaires that have gone bankrupt? MC Hammer spent a higher margin of utility than many poor people which proves even if there was a flat tax there are many wealthy people that would spend a high percentage of their income. Wealthy people tend to buy bigger homes, bigger cars, and name brand foods. The idea the rich don't need all their money and the poor have a right to the surplus is also taked about in "Atlas Shrugged." When there are no wealthy people than the poorest people will want to have a TV like you have, should we give them your TV because they need it more? Who determines if you are wealthy and deserve to have money stolen from you? A McDonald's crew manager is wealthy compared to a Somali farmer. Should the McDonald's worker have to send the Somali farmer his radio and CD collection since the Somali farmer is poor? Progressive tax is dangerous.

[Fr33domland]

The budget will never be balanced for as long as the dollar is the world's reserve currency.

[Parpolitic Citizens]

If this was true why are there many millionaires that have gone bankrupt? MC Hammer spent a higher margin of utility than many poor people which proves even if there was a flat tax there are many wealthy people that would spend a high percentage of their income.

They go broke because they were financially irresponsible.

Wealthy people tend to buy bigger homes, bigger cars, and name brand foods.

Yes, and they spend an infinitesimally small percentage of their income doing so.

When there are no wealthy people than the poorest people will want to have a TV like you have, should we give them your TV because they need it more?

If there is a permanent shortage of televisions then we must share access to the technology the best we can. Other wise we make more so more people can have access to it.

Who determines if you are wealthy and deserve to have money stolen from you?

The government elected by the people of a given territory.

A McDonald's crew manager is wealthy compared to a Somali farmer. Should the McDonald's worker have to send the Somali farmer his radio and CD collection since the Somali farmer is poor?

Yes, if there was a world wide democratic socialist government.

Progressive tax is dangerous.

Randianism allows for far more suffering.

[Keronians]

The budget will never be balanced for as long as the dollar is the world's reserve currency.

Why not?

Is this based on a lack of incentive to balance it, or saying that it physically cannot be balanced?

If the former, then I see your argument (it's valid), but I still think that there is enough of an incentive to make the effort to, at the very least, reduce the deficit to lower levels. Like 3%.

[Fr33domland]

The budget will never be balanced for as long as the dollar is the world's reserve currency.

Why not?

Is this based on a lack of incentive to balance it, or saying that it physically cannot be balanced?

If the former, then I see your argument (it's valid), but I still think that there is enough of an incentive to make the effort to, at the very least, reduce the deficit to lower levels. Like 3%.

No incentive, of course. Print the money.

[Keronians]

Why not?

Is this based on a lack of incentive to balance it, or saying that it physically cannot be balanced?

If the former, then I see your argument (it's valid), but I still think that there is enough of an incentive to make the effort to, at the very least, reduce the deficit to lower levels. Like 3%.

No incentive, of course. Print the money.

And distort the exchange market, as well as forcing foreign central banks to adopt monetary policies to suit the new dollar position. Also, force cash rich nations to purchase US bonds in an effort to stabilise the dollar.

Yes, no doubt. But I still think that the incentive to lower the deficit exists, if only due to the fact that foreign central banks are opting to not follow suite on Federal Reserve policy due to malaise in their own nations, requiring a different plan of action, as well as other nations running out of cash / willing to take risks in order to stock up liquid collateral should they need it.

[Parpolitic Citizens]

Why not?

Is this based on a lack of incentive to balance it, or saying that it physically cannot be balanced?

If the former, then I see your argument (it's valid), but I still think that there is enough of an incentive to make the effort to, at the very least, reduce the deficit to lower levels. Like 3%.

No incentive, of course. Print the money.

The budget was balanced in the late 90s before 9/11 super charged military spending. We need only to raise income taxes to Clinton levels, cut military spending and eliminate the fica cap.

[Fr33domland]

No incentive, of course. Print the money.

And distort the exchange market, as well as forcing foreign central banks to adopt monetary policies to suit the new dollar position. Also, force cash rich nations to purchase US bonds in an effort to stabilise the dollar.

Yeah, well, exactly. The US can do whatever the hell it wants, and there is no incentive for the US to balance the budget when it can just export the costs.

[Szentes]

• End all wars
• Cut the size of the military
• cut military spending by 50%
• legalise prostitution, create government ran brothels, &c.
• Legalise marijuana, create taxes
• redo the education system, so the nation can compete with foreign competitors in the future
• Close all tax loopholes
• increase taxing on the rich
• Invest in solar, wind, geothermal
• Invest in a green, self-sustaining future

[Keronians]

And distort the exchange market, as well as forcing foreign central banks to adopt monetary policies to suit the new dollar position. Also, force cash rich nations to purchase US bonds in an effort to stabilise the dollar.

Yeah, well, exactly. The US can do whatever the hell it wants, and there is no incentive for the US to balance the budget when it can just export the costs.

I did say why there's an incentive to reducing the deficit immediately afterwards.

Further, even if that were not the case, such a system isn't even domestically sustainable. It requires the Federal Reserve to divert resources towards subsidising the US Treasury. Policies like this are often the opposite of what the general economy needs.

[Keronians]

Well, what's the problem facing the US?

A massive drop in government spending, which the CBO estimates could be enough to trigger another recession. So that's the budget problem which needs fixing.

I'd probably go ahead and let the Bush tax cuts expire, and instead slash personal income taxes on lower rates while particularly working on smoothing transitions from one tax bracket to the next. I'd spend money on infrastructure, fixing bridges, expanding airports and improving state university access while lowering study fees. I'd invest some money in space exploration, just because I like it. I'd expand unemployment benefit programs and food stamp issuance while the economy is struggling. I'd try and spend some more money on trying to get the housing crisis fixed - ie aiding people in negative equity with refinancing and so on.

Then I'd also look to put together a single-payer system for old-age related medical expenses, with the aim to replace the current healthcare system for old people. I'd also relax rules on everyday medical services, looking to introduce 'Wal-Mart Clinics', run by the private sector using more nurses than doctors, looking to make a profit by providing low-cost medical services.

I'd encourage private savings rather than public pensions. I'd probably look to introduce a system more like the Australian one, where there are tax advantages to locking your money up in private superannuation investment funds, encouraging people to create an asset base that could take the pressure off the public social security system. To aid with that I'd consider things like pushing public retirement benefits back to, say, 72 years or something like that. If you want to retire before then, you'll want to do some saving yourself. Public retirement benefits could also be frozen, such that they get reduced due to inflation over time.

As for how I would fund the immediate expenses? Borrowing, for one thing. The expiration of the Bush tax cuts, and return in tax revenue as the economy recovers, will help a great deal too.

Borrowing? Is that really... possible? The kind of expenditure needed to carry out much of what you propose would likely be in the hundreds of billions of dollars. Financing most of that via issuance of new bonds is a bit... risky, is it not, given the already 100% debt-to-GDP ratio?

[Fr33domland]

Yeah, well, exactly. The US can do whatever the hell it wants, and there is no incentive for the US to balance the budget when it can just export the costs.

I did say why there's an incentive to reducing the deficit immediately afterwards.

Further, even if that were not the case, such a system isn't even domestically sustainable. It requires the Federal Reserve to divert resources towards subsidising the US Treasury. Policies like this are often the opposite of what the general economy needs.

I know it's not sustainable. Join the club my friend.

[Dragonia Re Xzua]

Do away with the current government and install a government chosen by the people, NOT by the elite. Oh, and do away with the elite as well, they don't do anything except horde money from the HARD WORKING taxpayers and laugh at those who WORK for their money.

[Keronians]

I did say why there's an incentive to reducing the deficit immediately afterwards.

Further, even if that were not the case, such a system isn't even domestically sustainable. It requires the Federal Reserve to divert resources towards subsidising the US Treasury. Policies like this are often the opposite of what the general economy needs.

I know it's not sustainable. Join the club my friend.

Ha.

Sad, isn't it?

[New Chalcedon]

A consumption tax is not a fair tax. It is a regressive tax. The poor and middle class HAVE to spend a higher percentage of their wages on basic needs like housing, transportation and food. Now, I could agree with a consumption tax if those at the top were required to spend at the same level as the median person.

A common arguement against fair tax. However, people have choices in how much they spend and it will encourage people to be more frugal. Tax on food too high? Grow a vegetable garden and raise chickens (if you are in a rural area).

So possible when you're living in an apartment block. Really.

Tax on housing too high? Live in shared housing to decrease expenses.

I, for one, already do - I share with 3 other people. Mostly so that I don't spend most of my (limited) income on rent. And I think that, for all of your casual advancement of this idea as if it's a novel one, you'll find most poor people already do find ways to cut expenses such as sharing accommodations.

There are poor cheapskates and people with great jobs living paycheck to paycheck. We can find people to support and oppose that common idea.

The first part is irrelevant to your argument, the second universal to any idea.

The bottom line is that flat tax (either consumption or income) is the only fair tax.

Incorrect. Roads, rail, ports and airports built with public dollars move the goods of the very wealthy. Power plants built by the public purse generate the electricity their companies use with such abandon. Their workers are educated largely at the expense of the State, their property defended by the police in the employ of the State and their contracts enforced by the judiciary of the State. The rich benefit more from the infrastructure and services the government provides, both directly and indirectly - it is both just and fair that they pay more than the poor, who gain far less benefit from these services and infrastructure.

The bottom 20% of Americans pay very little taxes, many pay none.

Of income taxes, perhaps - and that's only because their incomes are so low that they don't have any taxable income under current law. Of sales taxes - well, most States already levy sales tax, and I can guarantee that the poor pay those.

Is this fair? The poorest people use govt. services the most and pay the least-this sounds unfair to me.

What sounds "unfair" to me is that you're going to reverse-Robin Hood, by forcing a big tax hike on the poor (who are worse off than they've been for at least 30 years) to pay for huge tax giveaways to the already-rich - who are already better off than anytime since 1929.

From each according to his ability, to each according to his need (or needs) is a slogan popularised by Karl Marx. Very dangerous statement and the progressive tax follows Marx's philosophy. We all know what happened to countries that follow Marx's ideas as cosely as possible.

Yaaaawn. And now you are dragging the Reds out from under the bed, the better to scare us ignorant peasants into accepting the way Things Were Meant To Be. I'm profoundly unimpressed, if only because I have the fortune to live in Australia, a nation which - for all its many flaws - actually does live by the idea that those who can afford it chip in, and those who are down get a hand up.

And you know what? It rocks. Our rich are richer than your rich. Our poor are richer than your poor - and many of your "middle class", too. Our entrepreneurs are unafraid to take a risk, because they know that if they lose, they don't lose everything - and more importantly, their kids don't lose healthcare or education because Mum or Dad's startup folded. I'll quote directly from the relevant part of my source:

How many Americans are locked into jobs they hate by the fear of losing health benefits? No Dane ever has to worry about losing her right to medical care by quitting her job to go it alone. Norwegians could in conservative theory decide that work isn’t worth it and live comfortably off the dole, but in practice they don’t. In New Zealand, the insurance principle has been largely abandoned: most benefits have nothing to do with contribution records.

Sure, to pay for all of this requires higher taxes - but everywhere in the Western world other than America, we're willing to make that bargain. We grumble and gripe about actually paying the taxes, and we dislike governmental waste and excess in administering this safety net, but when tax time rolls around, we pay up - because we know that we all benefit.

Overall, your absurd reverse Robin-Hoodism smacks of a profound disconnect with reality, as well as a badly-flawed understanding of human nature.

*snips*

Borrowing? Is that really... possible? The kind of expenditure needed to carry out much of what you propose would likely be in the hundreds of billions of dollars. Financing most of that via issuance of new bonds is a bit... risky, is it not, given the already 100% debt-to-GDP ratio?

I thought that myself. But being me, I wanted to check all the data, and here's what I found:

(1) The Federal Government - as distinct from the State and local governments - is not at 100% debt/GDP ratio. It's at 65% - the other 35% being money the Federal Government owes itself.

(2) The Federal Government has sustained significantly higher levels of debt in the past. Specifically, net debt peaked at around 110% of GDP at the end of World War Two.

(3) Presently, the interest rate on 10-year Treasury bonds is effectively negative. That's right - people are so eager to get into safe havens that they're willing to pay a premium to do so. In laymans' terms: when the Treasury sells a 10-year T-Bill with a face value of $1,000 , it's getting more than $1,000 for it after expected inflation is taken into account. If you can't borrow to fund economic expansion when the interest rates are effectively negative, when can you borrow?

(4) Presuming that these things were done halfway-wisely (i.e., to repair and update crumbling infrastructure, build new schools, hire teachers, policemen and firefighters, and other things that actually generate jobs and growth rather than throwing yet more public money at the "job creators"), the increased growth would more than pay for the increased cost of servicing the debt.

[Keronians]

Borrowing? Is that really... possible? The kind of expenditure needed to carry out much of what you propose would likely be in the hundreds of billions of dollars. Financing most of that via issuance of new bonds is a bit... risky, is it not, given the already 100% debt-to-GDP ratio?

I thought that myself. But being me, I wanted to check all the data, and here's what I found:

(1) The Federal Government - as distinct from the State and local governments - is not at 100% debt/GDP ratio. It's at 65% - the other 35% being money the Federal Government owes itself.

(2) The Federal Government has sustained significantly higher levels of debt in the past. Specifically, net debt peaked at around 110% of GDP at the end of World War Two.

(3) Presently, the interest rate on 10-year Treasury bonds is effectively negative. That's right - people are so eager to get into safe havens that they're willing to pay a premium to do so. In laymans' terms: when the Treasury sells a 10-year T-Bill with a face value of $1,000 , it's getting more than $1,000 for it after expected inflation is taken into account. If you can't borrow to fund economic expansion when the interest rates are effectively negative, when can you borrow?

(4) Presuming that these things were done halfway-wisely (i.e., to repair and update crumbling infrastructure, build new schools, hire teachers, policemen and firefighters, and other things that actually generate jobs and growth rather than throwing yet more public money at the "job creators"), the increased growth would more than pay for the increased cost of servicing the debt.

1) I see. A much better figure, then.

2) I realise this, but conditions are much different today than they were at the end of WWII. There are investment opportunities other than the US.

3) Yeah, the real return is negative. But this, IMO, is temporary. Not that the US shouldn't take advantage of the situation (in my own plan, I did actually recommend the US fund some of the measures I proposed in the short-term, via issuance of bonds), but it shouldn't expect for the situation to last more than a year tops. It's a direct result of the equity markets being in the toilet, and the uncertainty arising from the Eurozone crisis.

Basing any sort of plan on expecting the real interest rate to be negative is faulty at best.

[Our Most Resplendent Goddess Sen]

A consumption tax is not a fair tax. It is a regressive tax. The poor and middle class HAVE to spend a higher percentage of their wages on basic needs like housing, transportation and food. Now, I could agree with a consumption tax if those at the top were required to spend at the same level as the median person.

A common arguement against fair tax. However, people have choices in how much they spend and it will encourage people to be more frugal. Tax on food too high? Grow a vegetable garden and raise chickens (if you are in a rural area). Tax on housing too high? Live in shared housing to decrease expenses. There are poor cheapskates and people with great jobs living paycheck to paycheck. We can find people to support and oppose that common idea. The bottom line is that flat tax (either consumption or income) is the only fair tax. The bottom 20% of Americans pay very little taxes, many pay none. Is this fair? The poorest people use govt. services the most and pay the least-this sounds unfair to me.

From each according to his ability, to each according to his need (or needs) is a slogan popularised by Karl Marx. Very dangerous statement and the progressive tax follows Marx's philosophy. We all know what happened to countries that follow Marx's ideas as cosely as possible.

You know what's unfair? A percentage-based tax, since it punishes the rich for being rich. A truly flat tax is clearly needed, where everybody pays the exact same amount.

[Mr Bananagrabber]

A common arguement against fair tax. However, people have choices in how much they spend and it will encourage people to be more frugal. Tax on food too high? Grow a vegetable garden and raise chickens (if you are in a rural area). Tax on housing too high? Live in shared housing to decrease expenses. There are poor cheapskates and people with great jobs living paycheck to paycheck. We can find people to support and oppose that common idea. The bottom line is that flat tax (either consumption or income) is the only fair tax. The bottom 20% of Americans pay very little taxes, many pay none. Is this fair? The poorest people use govt. services the most and pay the least-this sounds unfair to me.

From each according to his ability, to each according to his need (or needs) is a slogan popularised by Karl Marx. Very dangerous statement and the progressive tax follows Marx's philosophy. We all know what happened to countries that follow Marx's ideas as cosely as possible.

You know what's unfair? A percentage-based tax, since it punishes the rich for being rich. A truly flat tax is clearly needed, where everybody pays the exact same amount.

That's not a flat tax, that's called a lump sum tax. Good luck getting any support for that.