Look where the US is today. Change is needed not rehashed projections of more of the same. Unfortunately change is not coming from the current regime.
Trends in the US do not count for much. US fiscal traditions have been irrational and counter growth for 60 years, and quite damaging to growth for 30.
Why are you going here? Better what is the “vision” behind the implied research questions?
This is the Heritage/Tax Foundation argument from 20 years ago when I began hearing it in military circles complaining about the peace dividend. Your mandatory spending is called entitlements in the older jusification for “if we can afford pensions we can afford a fleet” (Mahan, 1880). The war machine and corporate welfare is called discretionary in that misleading model.
However, one point is worth pursuing: the percent of federal outlays for discretionary spending in other “developed countries”. In the UK their MoD gets a declining 7% of outlays. UK has a higher rate of military spending than the rest of NATO outside the US. US DoD alone is 20% of outlays in 2010 for extravagant programs overrunning 20% and not delivering. Not at all mizerly,and not at all worth the money.
And China……..~70B for.
What is wrong is not that it is mizerly to restrict the war machine, but what sense the empire?
Is the empire paying for itself?
And whose flannel shirt is given up for the war machine?
These questions are irrelevant and only asked by those using undue influence.
I was on the National Mall an August saturday 25 years after Martin Luther Kings historic speech on the steps of the Lincoln Monument. It was a civl and light affair and I took metro in and back to Va.
What about Glenn Beck’s gathering will be worth hearing about?
STRB–At least Elmer Gantry knew he was a conman. I’m not sure that Beck does. He’s not smart enough to think his way through to the end of the road for him. I don’t know what it’s gonna be but he is way to manic to stay up in the stratosphere forever. I hope. Nancy O.
We need to understand Beck more as a brilliant self propmoter much in the same vein as is Rush Limbaugh. They are “entertainers” and they preach to their choirs. They get a loud and positive reception from those who want to believe the reactionary and invalid arguments that they make about every political and social issue in the forefront of the public mind. Beck’s success is measured in dollars, not sense. he is difficult to listen to if you function above the cretin level of intellect, but there seem to be more than enough fools in the country to make him and his ilk very wealthy by pandering to social bigotry and political reactionism. Hitler was popular. So too Mussolini. Panderers to baser instincts usually are successful.
Nancy, i think you misunderstand the Glenn Beck phenomenon. See my reply, above. Beck is crazy like the fox. he certainly seems the bufoon, but I’d guess that he knows his audience well. And let’s not forget that such an entertainment phenomenon is not a single individual. Beck has an entire staff dedicatied to flessing the flock. Check out his receipts. In America you don’t get that rich that fast by being stupid. Dishonest and deceptive are another matter, but not stupid.
What in MG’s long line of quotes do you want us to discuss?
Do you want to discuss ‘the good of the few, or the good of the many”?
Cut discretionary to levels of spending vis a vis the total outlays that you see in the Euro zone. That means cut war department spending for empire and the new Amercian Century to about 25% of todays basic outlays (not including the senseless war supplements).
I have discussed the bloated 40%, discretionary spending that needs gutting and the war profiteers’ role in sucking productivity out of the US economy that create the scarey stats MG ploughs out.
What else would you want to talk?
Change is needed.
And it will start when the few give up some of their government paid largesse, to benefit the many.
ILSM, why not call it what you want it to be, defense spending? You have consistently used an improper term, discretionary spending.
If you remember, I proposed cutting the discretionary budget (that includes defense) by 1/3. Now!!! Freeze entitlement spending and let the Bush tax cuts expire. What that will do is stop the Fed borrowing (balance the budget) within three years.
In the mean time we need to foster the creation and growth of small businesses. That is usually done via tax incentives, and relaxation of regulations so … incentivize. Before you come to the party with the tired, “but that is a loss of revenue….” No!!!! How can you lose revenue that you would never receive. Those simple steps will result in an increase of revenue. They might also improve the economy in time to effect the 2012 elections.
How wrong has the Lib/Dem policies been these past years? Completely!
i hadn’t thought of that as snark. just a way of saying that when you say “no one wants to talk..”
after i have posted a reply to MG, it reminds me of how many times i have “debated” with someone here who is so intent on making his own points, he doesn’t even notice when i have answered them. not that he disagrees with me, but that he doesn’t seem to have even heard me.
as for snark, i imagine i am a bit testy… comes from not being heard. but not more snarky than the general standard for blogs, including your own contributions. another sad fact of life is that those arrows that seem so hard and sharp incoming, look like harmless little feathers when you send them out in the world to run your errands.
Dale’s snark in his response, “just scaring, or depressing, yourself with mountains of data is not the same as analysis.”
and then we had this:
“let the insane right continue to tell us we need to have a big defense budget but can never ever raise the taxes to pay for it, and you can’t solve the problem. ever.”
Beginning and ending with snark is the best way to make a point???? Nope!
The war machine is half of discretionary spending.
The rest: DoE which includes nuclear warheads and interminable research to slow alternative to imported oil, DoT which keeps air transport artificially low and watch bridges deteriorate, NASA for the science welfare crowd, etc.
Thankd for the 1/3, a start.
Cut 2/3 of the war machnie and raise users fees to cut the burden of the rest of discretionary in half.
The UK spends a third of what the US does in terms of funding its ministry of defence, quaint Brit spelling, eh.
Mythology about taxing small business. I do business with a few, heck I have a LLC of my own. I work what happliy I get, worry taxes with my green eye shade guy later.
No, small business is grown by ideas, work and demand for a product. Nothing about taxes fits there.
I party hearty, but you need to find someone else worrying loss of revenue…….
there seems to be a discontinuity between your “end Bush tax cuts” and “tax incentives” for small businesses. but maybe you don’t parse the world the way i do.
when i had a small business i figured my job was to make a profit and then pay taxes on it. i did not ask the government for incentives.
as for freezing entitlements, i guess i need to say, again, that social security has nothing to do with the deficit. in any case the country needs to pay for its current needs, whatever they are, war or unemployment checks. we have plenty of money to pay for both… if that’s what we want. the problem has been that “we” don’t want to pay for what we want.
There are many people out there bombarding us with low quality snark and that gives snark a bad name. So until the government can properly regulate snark, it’s “Buyer Beware”.
Posting a bunch of numbers projecting spending is useful data, but must be reviewed in the context of what all this money was and is being spent on. Even more so if the controller of the purse strings has all the characteristics of a military-banking dictatorship.
And it should easily stretch the credibility of anyone that has received a paycheck in the good ‘ole USofA and has noticed a FICA deduction on it, when the USG presents a pie chart showing a big slice going to pay social security and complains how big it is.
When the USG forms a commission to study the problem, and the answer to the question “what do I get for that FICA deduction?” (and employer half, for the really clued in worker) and a probable answer might be “you get to suck tit.”, then we need to talk. Does anyone recall how inexpensive it was to suck tit back when you were paying your FICA? This is one of the biggest ripoffs of all time!
Cedric gotta be careful. technically the ripoff hasn’t happened yet. and when it does it will be nearly invisible at first.
meanwhile the “ripoff” language just reinforces the psycholgy that the ripoff artists want to encourage: the idea that you can’t trust the government, so you should just give your money to the nice man in the suit who knows of a sure thing on Wall Street.
My proposal on federal aid to states and localities, abolish it all. If the people want the things the fed are providing they can tax themselves at the state or local level. Oh you say people don’t want to pay for it, then they don’t really want it. For disasters the issue might be different but for things like infrastructure upgrades and the like, let the locals pay for it or do without. It would be interesting to see the reaction if someone really proposed this, (i include all earmarks to local NGOs in the mix)
I raised and subsequently answered three key Federal Budget questions that haven’t been addressed on this blog. I referenced one table in the President’s budget proposal.
I simply identified the scale of the problem.
My intention was to put the size of the problem with key budget elements in perspective based on the Administration’s projections for the next ten years. The trend is pretty obvious.
When have you seen the three questions raised on this blog? If one doesn’t understand the scale of the problem, it’s difficult to know how far to go with adjustments if the intent is to stabilize budget relationships and mark down debt financing.
ilsm – “I have discussed the bloated 40%, discretionary spending that needs gutting and the war profiteers’ role in sucking productivity out of the US economy that create the scarey stats MG ploughs out.”
Slashing discretionary spending does not address the cashflow issue related to mandatory spending. There still would be a point during the next decade whereby mandatory spending will consume all cash revenue each fiscal year.
The day-to-day operations of the U.S. Government are at risk of being funded solely by debt financing if the present course is continued. That is the case during this fiscal year, as an example. It’s an understandable example, but it’s a fact, nonetheless.
Yes, changes will occur. And we may not agree with many of them.
and i added that the scale of the problem doesn’t tell us anything until we look at the details.
especially in a political climate in which the “scale of the problem” is being used to promote hysteria and panic to do harm to the people by cutting a program that has nothing to do with the deficit.
your “key budget elements” reminds me of a local problem i ran into a few years back. the usual suspects were proclaiming the usual emergency need for additional school taxes. so i asked for a look at the school budget. a kind person supplied me that budget, but not the seer who could have interpreted it. there was no straightforward list of “equipment”, “salaries,” capital costs… instead it was all broken into vague and overlapping categories from which it was impossible to gain even a remote understanding of where the money was going and why.
meanwhile there is some debate about whether there needs to be more deficit in order to stimulate the economy so that tax revenues will rise and reduce the deficit later. this argument is exactly the same as the Bush argument for tax cuts. only difference is that his deficit went directly to benefit the rich, while arguably the deficit needs to go directly to the poor. note the word “directly.”
in any case, Social Security has nothing to do with the deficit. except of course as a sacrifice victim to appease the Bond Gods.
no. there is no possibility that “mandatory spending” will consume all cash revenue. this is a hysterical projecting made by people who are counting on your not being able to read numbers.
I personally wish Alaska actually quit raking in fed money at such large rates…I am sure the new Tea Party favorite Senator to be will run on the evil of fed money and the virtues of self-reliance and thereby shout out cutting fed funding wickedness to the electorate.
To tackle the deficit question is tricky, because it is more of a political question than an economic one, despite the political rhetoric claiming some kind of legitimacy from economics as a discipline. Being political right before an election makes it even dicier a proposition.
Another question of importance is that even the operational definitions of the economy and government workings are poorly understood by as evidenced by a reader who can’t or won’t grasp basic governmental operational procedure much less theoretical.
For instance, MMT has a solid literature from the last 10-15 years but is still questioned about issues and notions put to rest a while ago…that seems to be true, however, of even less complex schemes than grander theoretical stances.
In the political arena we have examples of an operational ‘deficits don’t matter’ mentality by both parties, as both parties seem to really argue who is foing to pay for spending, not what might be wise and productive spending.
The deficits even as unrealisticly projected by various agencies (everything stays the same, or change this little tax or that) are sustainable, but with what impact and consequences? That is one level of conversation and is taking place but at levels of complexity that take a lot of study and explaining. How to do that at this point in time takes patience it seems few are willing to allow.
If Congress has abandoned notions of responsibility and leaves it to the Fed to handle, then we are in trouble of course, as the Fed has only ‘unconventional’ but maybe effective responses to make, and is also divided in outlook . (and perhaps the executive branch of either party?). Don’t we have a ‘fiscally responsible’ party? NO, we don’t, not even one trying to be responsible for much of anything in Congress, frankly the current Republican leaders the least.
Isn’t sounding the alarm being responsible? Well, for some maybe but not this group. General alarm about big numbers appears to be deliberatly vague so as to be fashioned into policies benefittiing mainly a very privileged group of people with a clear purpose of wealth for themselves and little to share.
Ok, I’ll bite. I know nothing about Alaska’s finances otherr than to know that the US Gov owns a huge amount of Alaska’s land. It also host a few military bases and INdian Reservations. So if you take away the funds supporting these efforts (which are nationwide benefits, just happen to sit in Alaska) just how much Fed dollars is Alaska actually getting?
This is like saying Wyoming gets to much Fed dollars becuase it hosts Yellowstone NP and FE Warren, AFB. Great! Hand Yellowstone back to Wyoming and move FE Warren to the Inland Empire outside LA. Nevada has over 50% of the state owned by the Feds. Do you count this money as cash going to Nevada?
You need to remove Fed Money that is going for Federal activities that just happen to sit in the state.
The trouble with trying to define the best route to better government financial planning is that one man’s waste is another man’s fortune. All those deficit dollars represent spending and spending represents income to someone or to some entity. it is not that the dollars are spent that is important. it is what they are spent to purchase. Some dollars spent go on to recirculate through the economy. Spent dollars that are someone’s earnings become taxable dollars and dollars to spend, which become someone else’s earnings. War dollars are less so though military dollars may be so. The question is, who benefits from the goods or services being received when government spends our dollars (though most of what government spends are borrowed dollars). Discretionary spending is the only real area of savings given that most earmarked entitlement money is funded via dedicated tax dollars, i.e. not borrowed (at least mostly not borrowed).
That’s what makes all the Social Security bashers so obnoxious. They were happy to spend the Trust Fund assets as they accrued. All knew full well what the source of those dollars was intended to be used for in the future. The need for the Trust Fund assets to off set the declining FICA revenues as the source of benefits dollars has been known and understood since its inception. People like Peterson and Simpson are lying to the public about the issue and Peterson with the Koch Bros and the Mellon Scaife clan have the excess personal fortune to fund a host of propagandist stink tanks in order to promote their dishonesty.
I would change the rank ordering from bottom to top in order to show the obligation of payments. In other words, net interest followed by all mandatory spending (the Government doesn’t appear show all of it in the latest charts) with discretionary spending on top. That would be a more realistic graphical display.
I expect that people would flip out if it was displayed in this manner.
I decided not to put forth my opinions for resolving the looming Federal Budget problem until later on. I thought we should capture the size of the problem first and put it in perspective.
I will share some opinions about resolving the expenditure and revenue problems on another open thread
ILSM, you missed the point re: the retirment TFs. There is no revenue stream for them! They are just General Fund (GF) accounting buckets. So, they just move money around in the GF budgetary process. No Special Treasuries, no multi-year interest accounting, etc. To implement them would actually be an accounting trick of no value.
I worry for my Grandkids, me I can do for myself, and each day is kharma.
I have been thinking in terms of a system, I could portray it as a traingular relation, cause and effects flow in a circuit, with feedback. We need to think in two dimensions, but the proble is 3 dimensional. The engineer in me, the framework for a system are so complex, that trillions don’t get there in DoD.
The special treasuries, Government Account Series SECURITIES (GAS) as GAO says are debt instruments: SECURITIES, and have nothing except politics to do with the PAC driven annual political budget and cash needs.
One of the ‘noble lies’, the foundation on circular logic, get you all worried about commitments, obligations and expenditure, budget things, and then conflate them with SECURITIES, which are as good as cash except in a banana republic in default.
If you think of the assets, SECURITIES separate from the annual or bi-ennial budgeting bombastic terrorist worrying PAC fronted blither then you get the circlar logic out of the way.
Defeat the ‘noble lie’ that intragovernment trust funds’ SECURITIES are stuck in the congress’ annual budget lies.
They are not.
All that said twenty odd years ago I worked a system where funds came from a US G trust fund, we were cut off from cash because the congress wanted to make the deficit look good. Very bad management, and poor stewardship!!
The issue is smoke and mirrors insdie the beltway.
This here is less scary than the 70’s, there are no enemies with 10,000 warheads behind 40,000 tanks 800 submarines and a few thousand tactical bombers, none with a GDP, today.
Let’s get back to what got Jimmy Carter in trouble: justify every buck spent, on weapons and corporate welfare. You probably missed the RIF’s and zero based budgeting in pursuit of a peace dividend after Vietnam. Whip inflation, much the same as whip deflation now (what the debt hawks have is not apparent with deflation on the horizon).
Thanks for the link. Look forward to the 2010 version.
Agree, “interest on the new debt” is the problem.
Easy answer: stop making new debt.
Hard issues: How to stop making new debt.
My work in military waste shows a prime area for reducing its 20% to about 8% of outlays. Will free up lots of factory and people to make things to sell, that do not destroy. Need to give up the empire, sorry buff Henry Luce wrote that stuff in June 1941 and he is long gone as are all the bogeymen!
Then there are all those other items: 23% is higher % than I expected, that can be halved. Give back 11% of outlays.
Then a judicious income tax receipt enhancement (raise taxes).
Should handle the rise in new debt servicing, and cut off some of the old debt too.
But then where does all that long money go??
Greenspan will be screaming about low interest returns………………………………..
The idea is look at the spending, justify it against other priorities and stop continuously extending money to unneeded, failing military programs.
It boils down to dividends for the few or cat food for the many.
Carter gored too many corporate interests, refused to build military toads which did not work: B-1 prime example of many. It still don’t work. Took a peace dividend which cut Mc Douglas dividends.
Don, I wasn’t clear enough in my response. The retirees to which I referred were the Fed and Mil retirees not the general populace. Their retirements are funded from the GF, and as such would not meet the test for unfunded obligations any more than ILSM’s wreapons systems expenditures.
That means those retirees are paid at the will of each Congress.
I merely observed that your statement that mandatory spending is entitlements plus interest implies (not strictly) that discretionary spending is everything else. when you say that all the money for discretionary spending was borrowed, that implies that taxes went for mandatory spending. but if mandatory spending is for SS plus interest, and SS pays for itself, that means that taxes, about 3Trillion dollars, went for interest. So I was asking if that’s what you meant.
you can call that ignorant if you want. i suppose it could be ignorant. how would an ignorant person know? but it sure sounds to me like you have been talking through your hat and just hate it when someone asks you to count on your fingers.
ILSM and Dale, your hyper-sensitivity to your issues are preventing you from open mindedly viewing the issue (not sure of how big a problem it is today). Discretionary spending is not just Mil spending and the entitlements are not just SS.
Jack thinks that the legisdlation is paramount, but forgets that the LEGISLATORS are the ones responsible for fixing the issue. They routinely change legislation!
Through a legislator’s eyes, the issue is very clear. They see revenue in and daily expenditures out. Then they see a budget which represents limits on how and where (the accounting buckets) they can write those daily checks. All the rest is political and accounting rhetoric.
WE may be reaching a point where all our Fed borrowing effects the values associated with our treasuries. We are at a point where every discretionary dollar expended is borrowed. If or when our Fed borrowing lowers the values of our treasuries all the rhetoric will be dropped and the basics (revenue in and expenditures out) will be the prevalent concern. We are on the cusp of the treasuries’ values/desirability may be seriously negatively impacted. That is the tipping point that has me and many others most concerned.
Those of you who are passionate about SS/Mil spending/healthcare/ (pick any other issue) certainly have a right to your passion, but you are misssing the point that we are possibly at a point of economic collapse.
Nearly everything this administration has done heightens the risk of that collapse. We can no longer risk the borrowing we are using to support our addictions. There are too few paths to reverse our current economic sourse, but solving the economic issues is growing as the paramount issue. Additional Fed Govt spending that is based upon public borrowing is not one of those best/better economic recovery paths!
well, i see a problem. without carefully defining what you are talking about you end up scaring yourself with words. back aways we had CoRev telling us discretionary spending was paid for entirely by borrowing. then you said that was “projected” for 2020. But it was not clear if the 2020 projection included inflated medical costs and paying for SS by borrowing instead of raising the payroll tax…
at some point it becomes impossible to follow the argument… er, arm waving.
and i think i notice that you all completely ignore the possibility of simply raising taxes and paying for what we have bought.
“….but you are misssing the point that we are possibly at a point of economic collapse.” CoRev.
The sky is falling, the sky is falling. And the only way to prepare for the end of times is to throw the old folks out the door and into poverty inspite of their having been paying into a system that was required of them throughout their working lives. We’re not talking about any Palm Beach denizens in their Lexus cars. We are talking about working class Americans that participated in their country’s legislatively mandated system that was designed to keep them off the welfare rolls in their old age. I keep focusing on the legislation only as a way of pointing out that this system was not dreamed up by some patronizing beaurocrat, but well thought out by our Congress. Over the years the mechanism has been tinkered with by the Congress under the guise of “preserving” its finanacial integrity and promise to its future beneficiaries. Now, at a time when corporations and small businesses alike are offering little in the way of a defined pension plan to workers, Social Security takes on greater importance than ever in its role as the means of preventing abject poverty in old age.
So again I ask, what the devil is the intention of arguing the solvency of Social Security. It has been demonstrated repeatedly that the program is currently solvent and will be for the next quarter century. Its solvency will continue after that by either improved economic conditions in general or by modification of the contributions rate. Workers are living longer, therefore, they need to put in a bit more to assure their own financial well being in retirement. The clearest point is that Social Security does not contribute to the current budget deficit any more so than do bond holders in general. it is disengenuous to claim that the holders of government debt, and that is what the Trust Fund is, are responsible for the deficit and should be made to accept a discounting of their assets by the debtor. Bull shit!!! I don’t think that China, Japan, nor Korea will buy that scenario, and there is no reason that American workers should do so either. If the general budget needs balancing then the Treasury needs to raise its receipts and should be advicing the Congress of same. If the Congress is spending too much on unfunded programs, war and corporate welfare come to mind, then the Congress needs to make adjustments to those spend thrift activities. If your 25 year old girl friend wnats a new Ferrari (or maybe you yourself and your guy friend do so) do you sell, or borrow against, your insurance policy to raise the cash, and tell your kids and wife to screw off? This entire public discussion is being promulgated and stimulated by a handful of extremely wealthy individuals and their paid for sychophants and propagandists. Hopefully the voting public will come to its senses and see this assault on their future for the dirty trick that it is. And for what? What do the One Percenters need more than they already have? We are living in and witnessing a level of personal avaricious greed that knows no bounds. The average working American has to protect his/her own best interests by letting their elected representatives know that they know it’s a scam.
Jack, with your long rant I think you are actually arguing with yourself. But with this part I do agree: “The average working American has to protect his/her own best interests by letting their elected representatives know that they know it’s a scam.”
But, I’m not just talking about SS, or even the entitlements. How about the stimulus? How about the TARP? Both needed to be funded via borrowing. How about EPA, Energy, Education, Agriculture, and even more including ILSM’s one trick pony?
The “feel good” administration is proving beyond doubt that liberal/Dem policies don’t work. The american voters know this and will let them know in Nov.
well, i took the trouble to look up “mandatory spending.” it seems the real distinction is that it is spending that congress would have to pass a law to NOT spend, while “discretionary spending is spending that congress has to pass a law TO spend.
so I think MG and CoRev are getting a little hysterical without quite knowing what they are getting hysterical about.
generally i find it better to break a problem down into what at least looks like relevant pieces… those that have a real world, well defined, referent. talking in abstract categories usually leads to “word solutions” that don’t in fact fit the real world or solve the problem.
that said, it seems pretty obvious to me that all this deficit trouble followed hard on the heels of “tax cuts that will pay for themselves.” and pretty obvious that the “answer” is to rescind the tax cuts until the deficit is reduced to a sustainable level.
running around and shouting words that have no actual meaning only feeds the panic and leads to self-injury.
“Did they state what interest rate assumptions they made?”, he asked, too lazy to wade thru 72 pages of linked documentation.
MG,
Look where the US is today. Change is needed not rehashed projections of more of the same. Unfortunately change is not coming from the current regime.
Trends in the US do not count for much. US fiscal traditions have been irrational and counter growth for 60 years, and quite damaging to growth for 30.
Why are you going here? Better what is the “vision” behind the implied research questions?
This is the Heritage/Tax Foundation argument from 20 years ago when I began hearing it in military circles complaining about the peace dividend. Your mandatory spending is called entitlements in the older jusification for “if we can afford pensions we can afford a fleet” (Mahan, 1880). The war machine and corporate welfare is called discretionary in that misleading model.
However, one point is worth pursuing: the percent of federal outlays for discretionary spending in other “developed countries”. In the UK their MoD gets a declining 7% of outlays. UK has a higher rate of military spending than the rest of NATO outside the US. US DoD alone is 20% of outlays in 2010 for extravagant programs overrunning 20% and not delivering. Not at all mizerly,and not at all worth the money.
And China……..~70B for.
What is wrong is not that it is mizerly to restrict the war machine, but what sense the empire?
Is the empire paying for itself?
And whose flannel shirt is given up for the war machine?
These questions are irrelevant and only asked by those using undue influence.
The argument has to be need versus costs.
And empire is not paying its way.
I was on the National Mall an August saturday 25 years after Martin Luther Kings historic speech on the steps of the Lincoln Monument. It was a civl and light affair and I took metro in and back to Va.
What about Glenn Beck’s gathering will be worth hearing about?
Beck is Elmer Gantry reborn.
STRB–At least Elmer Gantry knew he was a conman. I’m not sure that Beck does. He’s not smart enough to think his way through to the end of the road for him. I don’t know what it’s gonna be but he is way to manic to stay up in the stratosphere forever. I hope. Nancy O.
We need to understand Beck more as a brilliant self propmoter much in the same vein as is Rush Limbaugh. They are “entertainers” and they preach to their choirs. They get a loud and positive reception from those who want to believe the reactionary and invalid arguments that they make about every political and social issue in the forefront of the public mind. Beck’s success is measured in dollars, not sense. he is difficult to listen to if you function above the cretin level of intellect, but there seem to be more than enough fools in the country to make him and his ilk very wealthy by pandering to social bigotry and political reactionism. Hitler was popular. So too Mussolini. Panderers to baser instincts usually are successful.
Nancy, i think you misunderstand the Glenn Beck phenomenon. See my reply, above. Beck is crazy like the fox. he certainly seems the bufoon, but I’d guess that he knows his audience well. And let’s not forget that such an entertainment phenomenon is not a single individual. Beck has an entire staff dedicatied to flessing the flock. Check out his receipts. In America you don’t get that rich that fast by being stupid. Dishonest and deceptive are another matter, but not stupid.
CoRev,
What in MG’s long line of quotes do you want us to discuss?
Do you want to discuss ‘the good of the few, or the good of the many”?
Cut discretionary to levels of spending vis a vis the total outlays that you see in the Euro zone. That means cut war department spending for empire and the new Amercian Century to about 25% of todays basic outlays (not including the senseless war supplements).
I have discussed the bloated 40%, discretionary spending that needs gutting and the war profiteers’ role in sucking productivity out of the US economy that create the scarey stats MG ploughs out.
What else would you want to talk?
Change is needed.
And it will start when the few give up some of their government paid largesse, to benefit the many.
CoRev
it’s not that i mind being thought of as “no one.” but i do get tired of talking about stuff with people who can’t hear me.
ILSM, why not call it what you want it to be, defense spending? You have consistently used an improper term, discretionary spending.
If you remember, I proposed cutting the discretionary budget (that includes defense) by 1/3. Now!!! Freeze entitlement spending and let the Bush tax cuts expire. What that will do is stop the Fed borrowing (balance the budget) within three years.
In the mean time we need to foster the creation and growth of small businesses. That is usually done via tax incentives, and relaxation of regulations so … incentivize. Before you come to the party with the tired, “but that is a loss of revenue….” No!!!! How can you lose revenue that you would never receive. Those simple steps will result in an increase of revenue. They might also improve the economy in time to effect the 2012 elections.
How wrong has the Lib/Dem policies been these past years? Completely!
CoRev
i hadn’t thought of that as snark. just a way of saying that when you say “no one wants to talk..”
after i have posted a reply to MG, it reminds me of how many times i have “debated” with someone here who is so intent on making his own points, he doesn’t even notice when i have answered them. not that he disagrees with me, but that he doesn’t seem to have even heard me.
as for snark, i imagine i am a bit testy… comes from not being heard. but not more snarky than the general standard for blogs, including your own contributions. another sad fact of life is that those arrows that seem so hard and sharp incoming, look like harmless little feathers when you send them out in the world to run your errands.
Dale said: “i hadn’t thought of that as snark. just a way of saying that when you say “no one wants to talk..” ” And that’s the problem, isn’t it?
Dale’s snark in his response, “just scaring, or depressing, yourself with mountains of data is not the same as analysis.”
and then we had this:
“let the insane right continue to tell us we need to have a big defense budget but can never ever raise the taxes to pay for it, and you can’t solve the problem. ever.”
Beginning and ending with snark is the best way to make a point???? Nope!
CoRev
one man’s snark is another man’s desperate plea for sanity.
CoRev,
I call things as I see them.
The war machine is half of discretionary spending.
The rest: DoE which includes nuclear warheads and interminable research to slow alternative to imported oil, DoT which keeps air transport artificially low and watch bridges deteriorate, NASA for the science welfare crowd, etc.
Thankd for the 1/3, a start.
Cut 2/3 of the war machnie and raise users fees to cut the burden of the rest of discretionary in half.
The UK spends a third of what the US does in terms of funding its ministry of defence, quaint Brit spelling, eh.
Mythology about taxing small business. I do business with a few, heck I have a LLC of my own. I work what happliy I get, worry taxes with my green eye shade guy later.
No, small business is grown by ideas, work and demand for a product. Nothing about taxes fits there.
I party hearty, but you need to find someone else worrying loss of revenue…….
CoRev
there seems to be a discontinuity between your “end Bush tax cuts” and “tax incentives” for small businesses. but maybe you don’t parse the world the way i do.
when i had a small business i figured my job was to make a profit and then pay taxes on it. i did not ask the government for incentives.
as for freezing entitlements, i guess i need to say, again, that social security has nothing to do with the deficit. in any case the country needs to pay for its current needs, whatever they are, war or unemployment checks. we have plenty of money to pay for both… if that’s what we want. the problem has been that “we” don’t want to pay for what we want.
Great!!
No CoRev
teh problem is that you hear “snark” whenever someone disagrees with you.
There are many people out there bombarding us with low quality snark and that gives snark a bad name. So until the government can properly regulate snark, it’s “Buyer Beware”.
Posting a bunch of numbers projecting spending is useful data, but must be reviewed in the context of what all this money was and is being spent on. Even more so if the controller of the purse strings has all the characteristics of a military-banking dictatorship.
And it should easily stretch the credibility of anyone that has received a paycheck in the good ‘ole USofA and has noticed a FICA deduction on it, when the USG presents a pie chart showing a big slice going to pay social security and complains how big it is.
When the USG forms a commission to study the problem, and the answer to the question “what do I get for that FICA deduction?” (and employer half, for the really clued in worker) and a probable answer might be “you get to suck tit.”, then we need to talk. Does anyone recall how inexpensive it was to suck tit back when you were paying your FICA? This is one of the biggest ripoffs of all time!
Cedric
gotta be careful. technically the ripoff hasn’t happened yet. and when it does it will be nearly invisible at first.
meanwhile the “ripoff” language just reinforces the psycholgy that the ripoff artists want to encourage: the idea that you can’t trust the government, so you should just give your money to the nice man in the suit who knows of a sure thing on Wall Street.
coberly
Yes, makes you wonder how the Big O administration will beat around the Bush on that one.
My proposal on federal aid to states and localities, abolish it all. If the people want the things the fed are providing they can tax themselves at the state or local level. Oh you say people don’t want to pay for it, then they don’t really want it. For disasters the issue might be different but for things like infrastructure upgrades and the like, let the locals pay for it or do without. It would be interesting to see the reaction if someone really proposed this, (i include all earmarks to local NGOs in the mix)
Do you want the States to pick up the full tab on Medicaid and all other social services?
Coberly,
I raised and subsequently answered three key Federal Budget questions that haven’t been addressed on this blog. I referenced one table in the President’s budget proposal.
I simply identified the scale of the problem.
My intention was to put the size of the problem with key budget elements in perspective based on the Administration’s projections for the next ten years. The trend is pretty obvious.
ilsm,
When have you seen the three questions raised on this blog? If one doesn’t understand the scale of the problem, it’s difficult to know how far to go with adjustments if the intent is to stabilize budget relationships and mark down debt financing.
ilsm – “I have discussed the bloated 40%, discretionary spending that needs gutting and the war profiteers’ role in sucking productivity out of the US economy that create the scarey stats MG ploughs out.”
Slashing discretionary spending does not address the cashflow issue related to mandatory spending. There still would be a point during the next decade whereby mandatory spending will consume all cash revenue each fiscal year.
The day-to-day operations of the U.S. Government are at risk of being funded solely by debt financing if the present course is continued. That is the case during this fiscal year, as an example. It’s an understandable example, but it’s a fact, nonetheless.
Yes, changes will occur. And we may not agree with many of them.
That has been done, Bush II already cut aid to states.
Let’s see where those states go when their war profiteers are shut down.
The depot, defense industry caucuses use jobs in districts as aid to these states, and there is nothing more to sell the military spending.
Cut the war machine while you cut “aid to states” for police fire fighters and eductaion.
MG
very well, you did that.
and i added that the scale of the problem doesn’t tell us anything until we look at the details.
especially in a political climate in which the “scale of the problem” is being used to promote hysteria and panic to do harm to the people by cutting a program that has nothing to do with the deficit.
your “key budget elements” reminds me of a local problem i ran into a few years back. the usual suspects were proclaiming the usual emergency need for additional school taxes. so i asked for a look at the school budget. a kind person supplied me that budget, but not the seer who could have interpreted it. there was no straightforward list of “equipment”, “salaries,” capital costs… instead it was all broken into vague and overlapping categories from which it was impossible to gain even a remote understanding of where the money was going and why.
meanwhile there is some debate about whether there needs to be more deficit in order to stimulate the economy so that tax revenues will rise and reduce the deficit later. this argument is exactly the same as the Bush argument for tax cuts. only difference is that his deficit went directly to benefit the rich, while arguably the deficit needs to go directly to the poor. note the word “directly.”
in any case, Social Security has nothing to do with the deficit. except of course as a sacrifice victim to appease the Bond Gods.
MG
no. there is no possibility that “mandatory spending” will consume all cash revenue. this is a hysterical projecting made by people who are counting on your not being able to read numbers.
I personally wish Alaska actually quit raking in fed money at such large rates…I am sure the new Tea Party favorite Senator to be will run on the evil of fed money and the virtues of self-reliance and thereby shout out cutting fed funding wickedness to the electorate.
The savings can be returned to my state, which overpays a bit.
To tackle the deficit question is tricky, because it is more of a political question than an economic one, despite the political rhetoric claiming some kind of legitimacy from economics as a discipline. Being political right before an election makes it even dicier a proposition.
Another question of importance is that even the operational definitions of the economy and government workings are poorly understood by as evidenced by a reader who can’t or won’t grasp basic governmental operational procedure much less theoretical.
For instance, MMT has a solid literature from the last 10-15 years but is still questioned about issues and notions put to rest a while ago…that seems to be true, however, of even less complex schemes than grander theoretical stances.
In the political arena we have examples of an operational ‘deficits don’t matter’ mentality by both parties, as both parties seem to really argue who is foing to pay for spending, not what might be wise and productive spending.
The deficits even as unrealisticly projected by various agencies (everything stays the same, or change this little tax or that) are sustainable, but with what impact and consequences? That is one level of conversation and is taking place but at levels of complexity that take a lot of study and explaining. How to do that at this point in time takes patience it seems few are willing to allow.
If Congress has abandoned notions of responsibility and leaves it to the Fed to handle, then we are in trouble of course, as the Fed has only ‘unconventional’ but maybe effective responses to make, and is also divided in outlook . (and perhaps the executive branch of either party?). Don’t we have a ‘fiscally responsible’ party? NO, we don’t, not even one trying to be responsible for much of anything in Congress, frankly the current Republican leaders the least.
Isn’t sounding the alarm being responsible? Well, for some maybe but not this group. General alarm about big numbers appears to be deliberatly vague so as to be fashioned into policies benefittiing mainly a very privileged group of people with a clear purpose of wealth for themselves and little to share.
Rdan,
Ok, I’ll bite. I know nothing about Alaska’s finances otherr than to know that the US Gov owns a huge amount of Alaska’s land. It also host a few military bases and INdian Reservations. So if you take away the funds supporting these efforts (which are nationwide benefits, just happen to sit in Alaska) just how much Fed dollars is Alaska actually getting?
This is like saying Wyoming gets to much Fed dollars becuase it hosts Yellowstone NP and FE Warren, AFB. Great! Hand Yellowstone back to Wyoming and move FE Warren to the Inland Empire outside LA. Nevada has over 50% of the state owned by the Feds. Do you count this money as cash going to Nevada?
You need to remove Fed Money that is going for Federal activities that just happen to sit in the state.
Islam will change
The trouble with trying to define the best route to better government financial planning is that one man’s waste is another man’s fortune. All those deficit dollars represent spending and spending represents income to someone or to some entity. it is not that the dollars are spent that is important. it is what they are spent to purchase. Some dollars spent go on to recirculate through the economy. Spent dollars that are someone’s earnings become taxable dollars and dollars to spend, which become someone else’s earnings. War dollars are less so though military dollars may be so. The question is, who benefits from the goods or services being received when government spends our dollars (though most of what government spends are borrowed dollars). Discretionary spending is the only real area of savings given that most earmarked entitlement money is funded via dedicated tax dollars, i.e. not borrowed
(at least mostly not borrowed).
That’s what makes all the Social Security bashers so obnoxious. They were happy to spend the Trust Fund assets as they accrued. All knew full well what the source of those dollars was intended to be used for in the future. The need for the Trust Fund assets to off set the declining FICA revenues as the source of benefits dollars has been known and understood since its inception. People like Peterson and Simpson are lying to the public about the issue and Peterson with the Koch Bros and the Mellon Scaife clan have the excess personal fortune to fund a host of propagandist stink tanks in order to promote their dishonesty.
Note charts 8 and 9.
I would change the rank ordering from bottom to top in order to show the obligation of payments. In other words, net interest followed by all mandatory spending (the Government doesn’t appear show all of it in the latest charts) with discretionary spending on top. That would be a more realistic graphical display.
I expect that people would flip out if it was displayed in this manner.
ilsm,
I decided not to put forth my opinions for resolving the looming Federal Budget problem until later on. I thought we should capture the size of the problem first and put it in perspective.
I will share some opinions about resolving the expenditure and revenue problems on another open thread
No! It means your question is so ignorant to make an answer nearly impossible.
ILSM, you missed the point re: the retirment TFs. There is no revenue stream for them! They are just General Fund (GF) accounting buckets. So, they just move money around in the GF budgetary process. No Special Treasuries, no multi-year interest accounting, etc. To implement them would actually be an accounting trick of no value.
I worry for my Grandkids, me I can do for myself, and each day is kharma.
I have been thinking in terms of a system, I could portray it as a traingular relation, cause and effects flow in a circuit, with feedback. We need to think in two dimensions, but the proble is 3 dimensional. The engineer in me, the framework for a system are so complex, that trillions don’t get there in DoD.
We need to stop thinking linear.
The special treasuries, Government Account Series SECURITIES (GAS) as GAO says are debt instruments: SECURITIES, and have nothing except politics to do with the PAC driven annual political budget and cash needs.
One of the ‘noble lies’, the foundation on circular logic, get you all worried about commitments, obligations and expenditure, budget things, and then conflate them with SECURITIES, which are as good as cash except in a banana republic in default.
If you think of the assets, SECURITIES separate from the annual or bi-ennial budgeting bombastic terrorist worrying PAC fronted blither then you get the circlar logic out of the way.
Defeat the ‘noble lie’ that intragovernment trust funds’ SECURITIES are stuck in the congress’ annual budget lies.
They are not.
All that said twenty odd years ago I worked a system where funds came from a US G trust fund, we were cut off from cash because the congress wanted to make the deficit look good. Very bad management, and poor stewardship!!
The issue is smoke and mirrors insdie the beltway.
Presently, mandatory spending is 60% of outlays. Better put the discretionary side on the table., fast.
In OEDC countries discretionary is closer to 15% of outlays. But none are militarist empires.
Tipping point? No.
But default on SSTF and tipping point is too mild as a statement for the effects.
MG,
Thanks.
This here is less scary than the 70’s, there are no enemies with 10,000 warheads behind 40,000 tanks 800 submarines and a few thousand tactical bombers, none with a GDP, today.
Let’s get back to what got Jimmy Carter in trouble: justify every buck spent, on weapons and corporate welfare. You probably missed the RIF’s and zero based budgeting in pursuit of a peace dividend after Vietnam. Whip inflation, much the same as whip deflation now (what the debt hawks have is not apparent with deflation on the horizon).
Thanks for the link. Look forward to the 2010 version.
Agree, “interest on the new debt” is the problem.
Easy answer: stop making new debt.
Hard issues: How to stop making new debt.
My work in military waste shows a prime area for reducing its 20% to about 8% of outlays. Will free up lots of factory and people to make things to sell, that do not destroy. Need to give up the empire, sorry buff Henry Luce wrote that stuff in June 1941 and he is long gone as are all the bogeymen!
Then there are all those other items: 23% is higher % than I expected, that can be halved. Give back 11% of outlays.
Then a judicious income tax receipt enhancement (raise taxes).
Should handle the rise in new debt servicing, and cut off some of the old debt too.
But then where does all that long money go??
Greenspan will be screaming about low interest returns………………………………..
The idea is look at the spending, justify it against other priorities and stop continuously extending money to unneeded, failing military programs.
It boils down to dividends for the few or cat food for the many.
Carter gored too many corporate interests, refused to build military toads which did not work: B-1 prime example of many. It still don’t work. Took a peace dividend which cut Mc Douglas dividends.
Etc.
Don, I wasn’t clear enough in my response. The retirees to which I referred were the Fed and Mil retirees not the general populace. Their retirements are funded from the GF, and as such would not meet the test for unfunded obligations any more than ILSM’s wreapons systems expenditures.
That means those retirees are paid at the will of each Congress.
CoRev
i guess that doesn’t rise to the level of snark.
I merely observed that your statement that mandatory spending is entitlements plus interest implies (not strictly) that discretionary spending is everything else. when you say that all the money for discretionary spending was borrowed, that implies that taxes went for mandatory spending. but if mandatory spending is for SS plus interest, and SS pays for itself, that means that taxes, about 3Trillion dollars, went for interest. So I was asking if that’s what you meant.
you can call that ignorant if you want. i suppose it could be ignorant. how would an ignorant person know? but it sure sounds to me like you have been talking through your hat and just hate it when someone asks you to count on your fingers.
no. they could raise taxes. just enough to pay for the tax cut that didn’t pay for itself.
ILSM and Dale, your hyper-sensitivity to your issues are preventing you from open mindedly viewing the issue (not sure of how big a problem it is today). Discretionary spending is not just Mil spending and the entitlements are not just SS.
Jack thinks that the legisdlation is paramount, but forgets that the LEGISLATORS are the ones responsible for fixing the issue. They routinely change legislation!
Through a legislator’s eyes, the issue is very clear. They see revenue in and daily expenditures out. Then they see a budget which represents limits on how and where (the accounting buckets) they can write those daily checks. All the rest is political and accounting rhetoric.
WE may be reaching a point where all our Fed borrowing effects the values associated with our treasuries. We are at a point where every discretionary dollar expended is borrowed. If or when our Fed borrowing lowers the values of our treasuries all the rhetoric will be dropped and the basics (revenue in and expenditures out) will be the prevalent concern. We are on the cusp of the treasuries’ values/desirability may be seriously negatively impacted. That is the tipping point that has me and many others most concerned.
Those of you who are passionate about SS/Mil spending/healthcare/ (pick any other issue) certainly have a right to your passion, but you are misssing the point that we are possibly at a point of economic collapse.
Nearly everything this administration has done heightens the risk of that collapse. We can no longer risk the borrowing we are using to support our addictions. There are too few paths to reverse our current economic sourse, but solving the economic issues is growing as the paramount issue. Additional Fed Govt spending that is based upon public borrowing is not one of those best/better economic recovery paths!
Those are my views, now have at them!
MG
well, i see a problem. without carefully defining what you are talking about you end up scaring yourself with words. back aways we had CoRev telling us discretionary spending was paid for entirely by borrowing. then you said that was “projected” for 2020. But it was not clear if the 2020 projection included inflated medical costs and paying for SS by borrowing instead of raising the payroll tax…
at some point it becomes impossible to follow the argument… er, arm waving.
and i think i notice that you all completely ignore the possibility of simply raising taxes and paying for what we have bought.
Let’s do something!
Sign up to this and stop the military madness part:
http://capwiz.com/fconl/issues/alert/?alertid=15852531
Barney Frank (D-Ma) and Ron Paul (R-Tx) see a clear and large amount of funding in the war machnie to fix things like the deficit.
Go sign up to include excess war spending in the deficit commission.
“….but you are misssing the point that we are possibly at a point of economic collapse.” CoRev.
The sky is falling, the sky is falling. And the only way to prepare for the end of times is to throw the old folks out the door and into poverty inspite of their having been paying into a system that was required of them throughout their working lives. We’re not talking about any Palm Beach denizens in their Lexus cars. We are talking about working class Americans that participated in their country’s legislatively mandated system that was designed to keep them off the welfare rolls in their old age. I keep focusing on the legislation only as a way of pointing out that this system was not dreamed up by some patronizing beaurocrat, but well thought out by our Congress. Over the years the mechanism has been tinkered with by the Congress under the guise of “preserving” its finanacial integrity and promise to its future beneficiaries. Now, at a time when corporations and small businesses alike are offering little in the way of a defined pension plan to workers, Social Security takes on greater importance than ever in its role as the means of preventing abject poverty in old age.
So again I ask, what the devil is the intention of arguing the solvency of Social Security. It has been demonstrated repeatedly that the program is currently solvent and will be for the next quarter century. Its solvency will continue after that by either improved economic conditions in general or by modification of the contributions rate. Workers are living longer, therefore, they need to put in a bit more to assure their own financial well being in retirement. The clearest point is that Social Security does not contribute to the current budget deficit any more so than do bond holders in general. it is disengenuous to claim that the holders of government debt, and that is what the Trust Fund is, are responsible for the deficit and should be made to accept a discounting of their assets by the debtor. Bull shit!!! I don’t think that China, Japan, nor Korea will buy that scenario, and there is no reason that American workers should do so either. If the general budget needs balancing then the Treasury needs to raise its receipts and should be advicing the Congress of same. If the Congress is spending too much on unfunded programs, war and corporate welfare come to mind, then the
Congress needs to make adjustments to those spend thrift activities. If your 25 year old girl friend wnats a new Ferrari (or maybe you yourself and your guy friend do so) do you sell, or borrow against, your insurance policy to raise the cash, and tell your kids and wife to screw off? This entire public discussion is being promulgated and stimulated by a handful of extremely wealthy individuals and their paid for sychophants and propagandists. Hopefully the voting public will come to its senses and see this assault on their future for the dirty trick that it is. And for what? What do the One Percenters need more than they already have? We are living in and witnessing a level of personal avaricious greed that knows no bounds. The average working American has to protect his/her own best interests by letting their elected representatives know that they know it’s a scam.
Jack, with your long rant I think you are actually arguing with yourself. But with this part I do agree: “The average working American has to protect his/her own best interests by letting their elected representatives know that they know it’s a scam.”
But, I’m not just talking about SS, or even the entitlements. How about the stimulus? How about the TARP? Both needed to be funded via borrowing. How about EPA, Energy, Education, Agriculture, and even more including ILSM’s one trick pony?
The “feel good” administration is proving beyond doubt that liberal/Dem policies don’t work. The american voters know this and will let them know in Nov.
coberly
well, i took the trouble to look up “mandatory spending.” it seems the real distinction is that it is spending that congress would have to pass a law to NOT spend, while “discretionary spending is spending that congress has to pass a law TO spend.
so I think MG and CoRev are getting a little hysterical without quite knowing what they are getting hysterical about.
generally i find it better to break a problem down into what at least looks like relevant pieces… those that have a real world, well defined, referent. talking in abstract categories usually leads to “word solutions” that don’t in fact fit the real world or solve the problem.
that said, it seems pretty obvious to me that all this deficit trouble followed hard on the heels of “tax cuts that will pay for themselves.” and pretty obvious that the “answer” is to rescind the tax cuts until the deficit is reduced to a sustainable level.
running around and shouting words that have no actual meaning only feeds the panic and leads to self-injury.