Dan Crawford | March 31, 2011 9:08 am
Someone please explain to me WHY the combination of a flat VAT at about 5-8%, with a combined progressive income tax on those making more than 75k per annum would not work. It would capture some federal revenue from those not contributing at all now, and wouldn’t be terribly regressive.
Keep in mind that I am not a PhD economist, but a health policy analyst. Just wondering why the States use a variety of taxes to fund their needs (income, sales, property) and the fed has to get by on only an income tax. It doesn’t make sense. Even FICA is an income tax.
Someone explain to me the negatives to this.
VAT would need a new collection and enforcement infrastructure.
VAT taxes tend to be hidden from consumers/taxpayers.
It is easier to start a tax than end one.
And we already have a progressive tax system (I hope you are not putting 75K and up with the rich).
Seen in comments at Calculated Risk: You Cant Handle the Truth speech Bernanke style: “Ben Bernanke: Son, we live in a world that has Wall Street bankers, and those bankers have to be enriched by men with printing presses. Who’s gonna do it? You? You, Representative Ryan? I have a greater responsibility than you could possibly fathom. You weep for the Middle Class, and you curse the Federal Reserve. You have that luxury. You have the luxury of not knowing what I know. That the US Dollar’s death, while tragic, probably enriched Wall Street bankers. And my existence, while grotesque and incomprehensible to you, benefits Wall Street bankers. You don’t want the truth because deep down in places you don’t talk about at Tea Parties, you want me on that printing press, you need me on that printing press. We use words like debasement, inflation, systematic risk. We use these words as the backbone of a life spent defending banking interests. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very excess liquidity that I provide, and then questions the manner in which I provide it. I would rather you just said thank you, and went on your way, Otherwise, I suggest you pick up a computer terminal, and create a few trillion dollars. Either way, I don’t give a damn what you think you are entitled to.” The fed has on its “balance sheet about $1 Trillion in MBS’ and $1.3T in T Bills.
Also at CR:
Comments about A-10’s engaging Libyan naval targets.
Tom Clancy had the idea in Red Strom Rising in 83. The impulse of the heavy 30 mm on modern ships would serious damage, using explosive or convention armor piercing rounds. Depleted uranium would be too much.
Rustbelt I never much liked the VAT for reasons that you cite, especially the infrastructure and politics. Can you tell me what would be wrong with a small gross receipts tax like several states have? I think federal corporate income taxes now capture perhaps 1.5 percent of receipts; if we lower this tax rate a bit and add a small gross reciepts tax, what would be the positives/negatives?
just some perspective:House votes to cut NPR funding – The House on Thursday voted to strip National Public Radio’s federal funding, a move that followed the release of a “sting” video showing an NPR executive criticizing the Republican Party and saying the station didn’t need millions of dollars in federal money. The measure passed 228-192, mostly along party lines, after a vigorous debate over the merits of public radio and the need for the government to reduce spending in the wake of a $1.3 trillion debt and $14 trillion deficit that threaten the economy. “The object of this bill is to get NPR out of the taxpayer’s pocket,” said Rep. Marsha Blackburn, R-Tenn. “It is time for us to be good stewards and save the money of the American taxpayer.” NPR receives about $90 million in federal funding annually, but the Congressional Budget Office calculated that the net savings from defunding the network would be zero.
ABC: First Week in Libya Costs At Least $600 Million -Over at ABC News, Devin Dwyer and Luis Martinez report that the first week of the U.S. intervention in Libya has cost at least $600 million. According to their sources, the most costly items include191 Tomahawk cruise missiles – $269 million F-15E fighter – $60 million+ Fuel for jets and ships Other munitions
This just in: Noted sexual by-product and former senator Rick Santorum (use the Google) has finally figured out why Social Security is broke…
“The Social Security system, in my opinion, is a flawed design, period. But, having said that, the design would work a lot better if we had stable demographic trends. … The reason Social Security is in trouble is that we don’t have enough workers to support the retirees.
“Well, a third of of all the young people in America are not in America today because of abortion — because one-in-three pregnancies end in abortion.”
That’s right folks it’s an open thread twofer – Abortion and Social Security together at last in one incoherent Republican argument! It was only a matter of time before these two cherished causes found each other. Thanks Senator Santorum!
To cause the federal government to default on its debts (including intragovernmental debt such as the SS TF) is a violation of the 14th amendment to the Constitution, according to the lawyer who wrote this article. The Constitution cannot defend itself, however. I wonder what branch of the government has the power to do so if the Congress passes laws which could cause a default: the Executive or the Judiciary? NancyO
a classic econ lesson:
this ‘shutdown’ thing is such a canard. i suspect there’s more than enough monthly income to service the debt first and pay everyone else later.
I don’t understand who the defendants would be in such a case. Who would get the Tort for causing the federal government to default? BO for not signing a budget? Boehner and Reid for not passing one? GE for not paying their taxes?
Speaking of shutdowns, I was wondering what items on this list would most harm the economy, in short- and medium-terms. Human costs and political impacts are related but different important questions. The copied/pasted list below, and sourcing, is at Political Language and addresses what happened in the last shutdown. Back then, as I recall, the press focused on observable effects, like ruined school trips to D.C., but many individual voters were displeased by less public, personal economic impacts on them and their families, friends, and customers. http://ilyagerner.tumblr.com/
For each day the shutdown continued, the Department of Health and Human Services had to turn away 10,000 new Medicare applicants.
The Social Security Administration was forced to turn away claims for tens of thousands of applicants; requests for new or replacement Social Security cards couldn’t be met, individual office visits, and phone calls for information and assistance went unanswered.
New patients could not be accepted into clinical research at the NIH clinical center; an average of 170 patients enter each week.
The CDC ceased disease surveillance; information about the spread of flu, hepatitis, HIV, and other infectious diseases was unavailable.
“Deadbeat” dads got a holiday, since the HHS Parent Locator Services to which 15-20 thousand cases were referred every day was shut down.
Hot line calls to the NIH concerning diseases could not be answered
OSHA staff was reduced to 250, with no child labor inspectors left on the job
Taxpayers who needed answers to key tax questions to pay their taxes found phones unanswered. The IRS did not pursue investigative activities unless they were in preparation for actual trial proceedings
Veterans Benefits offices were closed to “walk-in” veteran clients, pending claims for compensation, pension, education and vocational rehabilitation were not processed, and payments of GI Bill education checks and insurance death claims were not processed. Over 400,000 veterans were affected
More than 80,000 visas to visitors who spend an average of $3,000 on their trips were delayed with a negative impact on airlines, hotels, and tourist facilities. 200,000 U.S. applications for passports went unprocessed
Because verifications of Social Security numbers (at SSA) and immigrant status (at INS) could not be carried out, processing of Federal college aid applications were delayed for thousands of students and families
Access to military cemeteries was curtailed, Board of Veterans Appeals case processing and hearings were delayed
$800 million worth of mortgage loans for moderate-and low-income working families nationwide were delayed by the closing of the Federal Housing Administration
368 National Park Service sites closed, along with national museums and monuments, with communities near the sites losing an estimated $14.2 million per day in tourism revenues from the estimated 9 million lost visitors
Cities and states relying on federal funds had to draw down their own reserves
LOL! Let’s fire up the time machine, prevent all abortion and increase the number of unemployed by 50%!
That is a good question and I suspect somebody would have to sue the Secretary of the Treasury. The Executive would not have to defend the constitutionality of the law that it had to execute, but Congress can defend it if it wishes. Good luck with that defense. Best legal strategy: stalling tactics? But Jeff in indy is correct not to worry–we’d pay debts to Saudi princes before feeding our troops in the field and other such things.
This list rather amazingly fails to notice the elephant (iceberg? mountain?) in the room: People who receive paychecks from the treasury buy a lot of groceries. They repay a lot of mortgages and car loans. They use a lot of telecom services and other utilities.
Ignoring the impact of that missing payroll nationwide would probably harm the economy short and long-term I daresay.
PJR said: “But Jeff in indy is correct not to worry–we’d pay debts to Saudi princes before feeding our troops in the field and other such things.” And that’s the point we fiscal conservatives have trying to make. MG’s comments show how bad our fiscal future appears.
But you folks keep up the misdirection such as NanO’s reference. What happens when buyers dry or interest dramatically increases for our debt?
And you keep ignoring the data. 10 year T-Bill rate: 0.33% 30 year rate: 4.5%
Who are these investors who keep undermining your talking points? Are they all in cahoots with Soros? Some new plot by the evil Chavez?
sorry that should be 3.43% for 10 year rate.
AS, and you ignore the impacts of QE I/II/III/IV, etc.
Wow Queen Elizabeth is in on it!?!? This is more astounding than The Da Vinci Code!
Amateur Socialist, how come you and I see the elephant, but many others here and elsewhere don’t?
One way or the other, without the good ole federal govt pumping out all those payroll, interest, subsidy, tax refund, new benefits and medical provider checks not to mention contract payments and contractor paychecks, the economy takes a header. It’s a lot of money, alright. And, it won’t be where it ought to be out there buying food, fuel, shelter and clothing, among other things. Maybe it won’t instantly cause a recession, but it will sure show a blip on the charts. It’ll hurt lots of people, for sure. And, I suspect that won’t help the political fortunes of some now in Congress. That, however, is their problem. NancyO
Cheez, AS, I hope you are just kidding! You brought up treasury interest rates, and unless you are joking you do not understand how the QE buys impact them?
“and wouldn’t be terribly regressive.” MH
That’s one heck of an endorsement for a tax policy. It shouldn’t be at all regressive. It should only be progressive because income and wealth distribution in our economy is grossly skewed.
Right AS. Political Landscape also noted, above its list, that “The first shutdown, November 14-19, 1995, resulted in the furlough of an estimated 800,000 federal employees. The second, longer shutdown, included the furlough of 284,000 workers.” There are maybe 5 contractors for every government worker, too, so this list probably should explicitly include an item for “Paychecks delayed or not paid.” (Also, in the 1990s I think social security checks did not go out–this year, automated deposits are more common and supposedly will go out.)
Oh good your sense of humor still has some marginal utility. Congrats on that.
Whatever the impacts of QE buys (since neither you or I have the actual ability to measure that impact) the fact remains that every global scare or panic sends buyers straight to good ole US Treasuries. If the Fed were the only buyer of that paper you might have a point. But they just aren’t.
Your scaremongering on behalf of these scary and as yet unseen bond vigilantes doesn’t change that. The question I keep asking: Where are the deflation vigilantes?
Worse than that the net effect would likely be the next leg downward breaking the trendline of this pitifully weak “recovery”.
But hey it might save us from another Obama term so maybe it wouldn’t be all bad.
Google ‘Santorum’ and you will understand why his arguments are mixed up and frothy. And maybe something you don’t want to waste time separating and examining.
He does represent low hanging fruit as we say and I am slightly embarrassed by the cheap joke at Senator Santorum’s expense.
I’d quit making them if he’d just quit making speeches!
I hope this may reduce Dan’s water fears:California governor to declare end to drought
From here: http://wattsupwiththat.com/2011/03/29/california-governor-to-declare-end-to-drought/
One problem with a gross receipts tax is that companies losing money still pay taxes. It also whacks statups when they least need it.
There are many states that use this as or in place of a franchise/charter type tax.
Thanks Nancy. I’m glad someone mentioned the 14th. I have asked many people about the 14th and Social Security but everyone I mentioned it to went away needing to see just what the 14th was so I have never once had a response. Years ago, the first time I heard the phrase “IOUs”, the 14th amendment popped into my mind so I went to check the wording. Sure ’nuff, I chuckled. Ah, but, I told myself, the courts decide if it applies. My amusement kinda moderated.
Back in the early seventies a lot of businesses in San Diego were treating U.S. Navy sailors like 2nd class citizens, with kind of a No Dogs, Irish or Navy on the Lawn attitude. So the Admiral in charge of the whole Navy District put out an order that all sailors get paid in dollar coins. Which gave just about every merchant in town visible and in fact weighable evidence of the actual economic effect of all of those underpaid sailors in aggregate. Maybe they still didn’t want their daughters dating a squid, but there were a lot more welcome mats at the store fronts.
When it comes to federal spending just about every city and town in the country is the equivalent of a Navy Town, the indirect impact on service industries being potentially devastating. I mean how many federal workers buy at least SOMETHING on their lunch hour.
Nancy/ASIt’s called the game of chicken. First to flinch loses, but in this case both apparent players are on the same side and the viewing public is expected to flinch and thereby be declared the chicken. The result is to eviscerate Social Security and Medicare in a just in time scenario. “Oh my god, a government shut down is about to happen. Quickly, revise the entitlement programs. Increase the retirement age. Eliminate the COLA. Take the Trust Fund assets. The sky is falling.” But leave the marginal tax rate where it is. Don’t tax huge estates. Prefer capital gains. Sanctify military spending of any and all forms.
Get with the program. The Corporate Party of America will preserve wealth, but not for everyone. Only for those with enough wealth and income to contribute to the health and welfare of the political class. There will be no shut down. There will be only a shut out of the middle class and the poor. Shut out of their earned retirement benefits and their health care. Shut out of their voice in governement. But the government will not shut down. Too many corporations are at the trough. Too many wealthy people and banks are expecting their interest income on their T-Bills. The SS Trust Fund should be so safe as theirs.
SS recipients don’t have to pay back for the tax cuts and borrowed war waste of the past 11 years.
I would not take MG too serioius either MG don’t mention that CBO assumes (as does the catfood commission) that the DoD will continue to spend like drunken airmen through 2021, more in real terms than in Vietnam, and twice in real terms than during Carter and Clinton administrations.
Stop sending the checks for the $235B a year going to defense acqusition contracts which are high risks of wasting the money anyway; not ilsm GAO-11-233sp, 29 Mar 2011. Then stop the overpayments to the $300B in operating and suppport contracts which are ‘after delivery of past waste and fraud procurements’, wasting the money on the expensive low quality, untested high risks of waste out there in the military now.
The DoD spends 20% of expenditures much of it for risky payments for time and materials, level of effrto, best effort, nothing to do with what really is needed to deal with any existential adversary.
Where you get the idea that old people will go cold and hungry before they fix DoD I do not know. Nor why you neglect the possibility that the FR will buy up the 2.4T and make cash available. Right now the FR has 1T iin MBS it took over sending that kind of dough around the economy since 2008. It also has $1.3T in Treasury notes the result of QE since 2008.
The threat is that congress is bought in to letting their PAC money donors keep the waste and fraud going.
So much for the tea party!
Wait there is hope: “I’m amazed as I stay here longer how much we actually waste,” Sen. Scott Brown (R-Mass.) said in response at the federal financial management subcommittee hearing March 29.” Reported on Aviation Week site, 29 Mar 211.
I am not worried.
The hydrology records in the US Northeast go back to the 1940’s. The trend is rising water tables.
I do not live in the southeast where the folks in Atlanta a year or two ago were getting close to having to limit bathing, already a dicey place for sweat!
As to global warming there is alway s soylent green.
Droughts/lack of normal rain does strange things to available water. But, as for CA, their problem will change shortly due to the heavy snow cover this year and the fast diminishing population.
Oh, yeah, CoRev? Not so you’d notice down on the Coast or in the Bay Area. I am shaking my head. Water evaporates and it’s not a sure thing that the snow melt produces full reservoirs on the Coast. Which includes Monterey, SLO, and SB. Don’t assume, friend. NancyO
No one in the GOP is advocating defaulting on any debt. This is just a strawman and scare tactic. The reason is not because of the Constitution, it is because the US needs to keep borrowing/rolling over the debt. Now the SSTF may be another matter, since it is not a debt owed to a third party and “defaulting” on it would not affect its credit rating. If the SSTF is “modified” it will be through a bipartisan commission thingy. No one wants to have their fingerprints on this.
i have to chuckle everytime i hear the term “non-essential personnel.” i’ve always wondered, if they’re non-essential, why do “we” employ them?
The wording of the 14th amendment regarding the possibility of Congress et al causing a federal default had to do with the former Confederate states forcing a default on the various federal debts acquired, I think, during the Civil war. I suspect the notion still applies should the Congress fail to honor the total federal debt incurred up to the point it decided not to pass a budget. We’ll see. I suspect that no one with brains in DC wants to get involved in a dispute about whether a failure to pass a budget would actually force a debt default. The government can stop working, but the bonds have to be paid. Oh, well, it hasn’t been done before. So if it’s necessary, we’ll find out how it’s done. NancyO
PERHAPS the sentiments contained in the following pages, are not yet sufficiently fashionable to procure them general favor; a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defence of custom. But tumult soon subsides. Time makes more converts than reason.
As a long and violent abuse of power is generally the means of calling the right of it in question, (and in matters too which might never have been thought of, had not the sufferers been aggravated into the inquiry,) and as the king of England hath undertaken in his own right, to support the parliament in what he calls theirs, and as the good people of this country are grievously oppressed by the combination, they have an undoubted privilege to inquire into the pretensions of both, and equally to reject the usurpations of either.In the following sheets, the author hath studiously avoided every thing which is personal among ourselves. Compliments as well as censure to individuals make no part thereof. The wise and the worthy need not the triumph of a pamphlet; and those whose sentiments are injudicious or unfriendly, will cease of themselves, unless too much pains is bestowed upon their conversion.The cause of America is, in a great measure, the cause of all mankind. Many circumstances have, and will arise, which are not local, but universal, and through which the principles of all lovers of mankind are affected, and in the event of which, their affections are interested. The laying a country desolate with fire and sword, declaring war against the natural rights of all mankind, and extirpating the defenders thereof from the face of the earth, is the concern of every man to whom nature hath given the power of feeling; of which class, regardless of party censure, isTHE AUTHOR.(Thomas Paine)Philadelphia, Feb. 14, 1776.
From the pamphlet (Common Sense)
Yes the Federal Government has the taxpayer (us) over quite the barrel. If you want your SS check/student loan/Yellowstone ride you have to send us more taxes.
And realize that this whole shutdown brouhaha is over the first (read “easiest”) $60B in spending cuts in a $3.7 T budget with a $1,5T deficit.
Sammy says they’re looking to increase our taxes. Whose taxes are undifferentiated. I say it’s SS and Medicare that’s on the block. Sammy, I hope that you’re right this time around, but the Bush tax holiday extension passed in October doesn’t support your contention. Might the Congress really raise taxes on only the first $100,000 in earned income? Are they really that cynical? I almost can’t wait to see who loses the most, out of sheer curiosity about the extent of the audacity of our elected representatives and their leader, our President.
ilsm – “I would not take MG too serioius either MG don’t mention that CBO assumes (as does the catfood commission) that the DoD will continue to spend like drunken airmen through 2021, more in real terms than in Vietnam, and twice in real terms than during Carter and Clinton administrations.”
Back up your claims.
If you want to challenge information I have posted previously, do so but cite the specifics.
I haven’t posted much information in the past few months. I wanted to see if new participants would be attracted to AB without an overload of comments from those who have been here for a long time. I have a few major comment posts prepared for future Open Threads which deal with Federal Budget matters and projections, but I will post them later when some of this other stuff is out of the way.
I haven’t wasted a lot of time talking about DoD spending as it is frequently confused on this blog with Security spending. Besides, I have not publicly drilled down into program details outlined in FY2012 Federal Budget proposal very much other than to present General Fund outlays including Net Mandatory expenditures, which I believe is a better way to analyze deficit spending from the General Fund.
I believe that your CBO claim is a lot of hot air if you’re referring to CBO’s review of the FY2012 Federal Budget proposal. Apparently, you must be referring to another CBO document, perhaps the CBO report, Reducing the Deficit: Spending and Revenue Options, released on March 10.
CBO stated the following in its March 18 report, Preliminary Analysis of the President’s Budget for 2012:
“For defense discretionary programs, budget authority would decrease by $37 billion, or 5.0 percent, from 2011 to 2012 under the President’s budget. Most of that decrease stems from a reduction in funding for war-related activities in Afghanistan and Iraq, which would decline from $159 billion this year to $118 billion in 2012. Appropriations for other defense activities would increase by $5 billion (or 0.8 percent) in 2012. After that, the Administration’s budget includes a placeholder of $50 billion a year for war-related activities, while proposed funding for other defense programs grows by an average of 2 percent a year through 2021. As a result, the total budget authority for defense proposed in the President’s budget drops from $696 billion in 2012 to $646 billion in 2013 and remains below the 2012 amount until 2017. Outlays for defense would decline from 4.7 percent of GDP last year to 3.1 percent in 2021, CBO estimates.”
In the same CBO report, this information was provided in Table 3:
(Billions of dollars) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Defense 4 13 -36 -71 -85 -95 -100 -107 -115 -124 -133
The above CBO statements and data do not appear to support your claim, though it is obvious that additional reductions in DoD spending are likely to occur under any serious attempt to further reduce publicly held debt spending.
Your general hatred of DoD is obvious, but you can do better than claiming that CBO said something you have not supported. As for your personal attempt to discredit me, watch out for the […]
Non essential is the defintion of discretionary spending, which in peace is the entire pentagon.
That is why congress used to have to “raise an army”, except since the unwarranted influence took over.
Wars of choice forces for profits.
All non essential.
amateur socialist – “And you keep ignoring the data. 10 year T-Bill rate: 0.33% 30 year rate: 4.5%” …”sorry that should be 3.43% for 10 year rate.” amateur socialist – “Whatever the impacts of QE buys (since neither you or I have the actual ability to measure that impact) the fact remains that every global scare or panic sends buyers straight to good ole US Treasuries. If the Fed were the only buyer of that paper you might have a point. But they just aren’t.” amateur socialist – “Your scaremongering on behalf of these scary and as yet unseen bond vigilantes doesn’t change that.” Ignorance. Yes, there are probably plenty of ill-informed people who apparently think that interest rates are locked in stone. Many of these same people ignore the details of Federal Budget projections and related CBO analyses which indicate significant growth in Debt Held by the Public and rising Net Interest costs, without any consideration of a spike in interest rates. These people appear to be ignoring as well the shift in China from purchase of U.S. Government securities to other nation’s securities. Same story for the likely loss of Japan’s near and medium term purchase of U.S. Government securities. Both countries’ governments are major buyers of such securities. U.S. Federal Budget projections paint an important picture worth noting, unless one’s head is buried in the sand. U.S. Government Debt Held by the Public is projected to jump from $9.02 trillion in 2010 to $19.56 trillion in 2020 based on CBO’s recent analysis of the FY2012 Federal Budget proposal. It more than doubles. Debt Held by the Public as a percentage of GDP jumps from 62.1% in 2010 to 85.7% in 2020. CBO projects that the U.S. Government will pay $5.5 trillion in Net Interest payments on the Debt Held by the Public from 2010 to 2020. Net Interest payments ramp up from $196 billion in 2010 to $886 billion in 2020. Comparison of fiscal year Net Interest obligations for 2010 and 2020 represents a 441.84% increase without any consideration of a surge in interest rates. While the U.S. Government Debt Held by the Public doubles, Net Interest payments jump more than fourfold from 2010 to 2020. This is likely to happen again in the next decade, at a minimum, if major changes in Federal revenues and expenditures do not occur. U.S. Government Debt Held by the Public is projected to increase $1.37 trillion in 2011; $1.27 trillion, 2012, $1.08 trillion, 2013; $856 billon, 2014; $843 billion, 2015; $933 billion, 2016; $962 billion, 2017; $996 billion, 2018; $1.14 trillion, 2019; and $1.19 trillion, 2020. These additional debt obligations are based on an optimistic Federal Budget revenues and expenditures proposal. Hence, the problem may be larger. U.S. Government Intragovernmental Holdings increase from $4.51 trillion in 2010 to $6.58 trillion in 2020. That’s an increase of over $2 trillion in additional debt. Gross Federal Debt, a combination of both debt sources, is projected to increase from $13.53 trillion in 2010 to $26.14 trillion in 2020. It almost doubles. Yes, there are people who have no clue as to the magnitude of the Federal debt problem. Some of these people think that raising taxes on the upper income earners will magically solve the problem. Again, they have no clue as to the scale of the problem. Tax increases alone will not get the job done. Not even close. Maybe more people will get it during the next decade when Net Interest payments soar well beyond $1 trillion per fiscal year. That, again, is without any consideration of a spike in interest rates. […]
http://www.cbo.gov/ftpdocs/120xx/doc12085/03-10-ReducingTheDeficit.pdf Pg 5 on the print or 21/256 of the .pdf Tell us why DoD needs that much. And print page 70 is disengenuous in the main. Defense other is mostly RDT&E which GAO lumps rightly with procurement to call acquisition costs.The pentagon cuts are meaningless. They keep wasteful the 2 and half war infrastructure for forces to deal with threats which do not exist.
I go to more than GAO. CBO is much easier to find fault with than the GAO’s trained auditors. You could learn by studying GAO 11-233sp 29 Mar 2011.
ilsm, The CBO analysis of the FY2012 Federal Budget proposal doesn’t support your claim.
The other CBO report titled Reducing the Deficit: Spending and Revenue Options identifies 105 options for reducing federal spending and increasing revenues. The report includes 32 options for reducing Mandatory spending, 38 options for reducing Discretionary spending, and 35 options for increasing Federal revenues. Six additional options are identified which will increase Federal spending. CBO’s spending reduction recommendations include 1 option for Defense in mandatory spending and 13 options in discretionary spending. Mandatory Spending DefenseOption 1 Introduce Minimum Out-of-Pocket Requirements Under TRICARE For Life Discretionary Spending DefenseOption 1 Reduce the Growth in Appropriations for the Department of Defense Option 2 Cap Increases in Military Basic Pay Option 3 Increase Medical Cost Sharing for Military Retirees Who Are Not Yet Eligible for Medicare Option 4 Limit the TRICARE Benefit for Military Retirees and Their Dependents Option 5 Increase Cost Sharing for Pharmaceuticals Under TRICARE Option 6 Consolidate the Department of Defense’s Retail Activities and Provide a Grocery Allowance to Service Members Option 7 Replace the Joint Strike Fighter Program with F-16s and F/A-18s Option 8 Cancel the Navy and Marine Corps’ Joint Strike Fighters and Replace Those Aircraft with F/A-18E/Fs Option 9 Cut the Number of Aircraft Carriers to 10 and the Number of Navy Air Wings to 9 Option 10 Cancel the Expeditionary Fighting Vehicle Option 11 Delay Fielding of the Army’s Ground Combat Vehicle Option 12 Terminate the Medium Extended Air Defense System Program Option 13 Terminate the Precision Tracking Space System Program I don’t see a problem with CBO’s recommendations. I can identify other reductions that could be added, but this is a good start. I view the CBO report as a valuable reference document for budget discussions. I have the GAO report as well. I do not share your opinions about the future defense needs of the United States. You don’t have a magic ball. I fully support major expenditure reductions and reorganizations in the Department of Defense, but I am not inclined to buy into your approach of gutting the department or its capabilities.
ILSM said while wildly waving his arms: “ Defense other is mostly RDT&E which GAO lumps rightly with procurement to call acquisition costs.” Who cares other than you? It’ll ALL be spent, and ~ +$40 of every $100 will still be borrowed!
You also make a claim that GAO may be more valid than CBO, but I find the GAO is mostly a political effort for the requesting Congress critter, while CBO is at least attempting to be apolitical.
It’s interesting that there isn’t any acknowledgment on this thread that the Democrat U.S. Senators are the ones who are likely to cause the Government crash. Trying to lay that off on the Congressional Republicans at this point would be a joke.
The news media may provide the Congressional Dems further cover, but that won’t wash in the end. The action is over in the U.S. Senate.
CBO has suggestions, nickle and diming the issue. It has neither authority, role nor mission to fix the DoD boondoggle budget process.
They propose to go from 10 carriers to 9, the US Navy has the only active 100000T ships in the world, once the RN carrier goes into extended reapirs.
The solution is a radical change from profiting the industry to sensible weapons and order of battle that are enough but not hugely overburdening. Did I mention 2 and a half wars?
Check these out and then let’s talk:
The annual report on Major Weapons Systems mismanagement:
Report on Nunn McCurdy breeches which are overruns:
Look at it this way, cuts to SS and medicare are as if a tax were taken from the folks’ SS and medeicare whose excess payroll taxes bankrolled the profitable wars of choice and tax cuts for the rich
CBO says that DoD procurement is 19% of defense outlays, and there are 19% outlay called “other”. In 2010 procurement was $131.2B, and RDT&E was $80.6B roughly of the “other pie”. RDT&E is 11.6% of DoD budget why hide that in the “other” catagory?GAO worked their audits and gives certified opinions. GAO has Generally Accepted Government Auditing Standards (GAGAS) and also certifies every agency’s financial each year.The only exception is DoD whose books cannot stand scrutiny and re=earn a “certification”.
Should read, Those taxes…..
What is most frustrating about all this bull about the budget deficit is that I hear not one elected official making reference to the billions being spent on war and the asses just extended the tax cuts for the richest Americans. They gave workers a holiday from adding to their own retirement. Great. Next they’ll be telling us that now there’s even less money for SS benefits. And the idiots who call themselves conservatives don’t see the contradictions in it all. We’re spending too much on war, the military, corporate welfare and tax cuts and tax holidays for the wealthiest one or two percent. Then they tell us there’s a deficit and we need to cut back on Medicare and Social Security. Are these people really that dense?
Ill informed people who are putting up Billions. Every day of the week.
It’s worse than that. Ezra Klein on the senate GOP’s proposed balanced budget amendment:
“Every single Senate Republican has endorsed a constitutional amendment that would’ve made Ronald Reagan’s fiscal policy unconstitutional. That’s how far to the right the modern GOP has swung.”
The senate GOP is advocating an amendment to the constitution that would have made every single Ronald Reagan budget illegal. Every GW and HW Bush budget illegal. Only 2 clinton budgets would have passed this requirement. Strategery!
Jack, which party, and which politician proposed limiting budget cuts to non-defense discretionary spending? Here’s a hint: “Politico is reporting that President Barack Obama will call for a freeze on non-defense discretionary spending in the run up to his State of the Union address to Congress on Wednesday:…” That was last year’s State of the Union. There was much talk that the action was to set up future confrontations with the Republicans who had campaigned upon cutting the budget deeply. Dunno about you, but it looks to me like the Republicans are just playing within the Democrat’s proposed rules. Your disappointment should be aimed at the Democrats.
It’s going to get interesting. The gates on those golf course estates only go so high.
God I hate to admit CoRev is right. But hey a stopped clock etc.
With the GOP off in John Birch Land you might have thought this administration represented a real chance at a progressive agenda. But the triangulators and the fundraisers (okay the same team, see Jim Messina ) own the game. Great legacy Mr. Clinton.
AS, to balance the budget it doesn’t take a constitutional amendment. Just stop raising the debt limit. The snark, yours or Klein’s, is unneeded. The debt hole is being dug deeper as we sit here typing.