Poll:Deficit Commission Recommendations

[Westernskies]

While everyone can come up with a few self-serving reasons why we shouldn't accept this, there are 13.9 trillion reasons (and growing daily) why we should.

It's like any reasonable compromise in DC , doomed to failure from the start.

Kudos to Alan Simpson and Erskine Bowles; both of them have my utmost respect for taking on this difficult challenge.

 

[HFWR]

Does anyone else have a major problem with calling tax deductions and exclusions 'spending' by the government?

Agreed, though, practically speaking, any amount spent that's not paid for is indeed "spending", and expensive spending at that, since it's borrowed...

 

[Texas Proud]

As with most others I agree there generally are good recommendations in here. But...

Does anyone else have a major problem with calling tax deductions and exclusions 'spending' by the government? This label implies that all of your income belongs to the government and anything less than 100% taxation is 'spending.' Maybe it really is just poor semantics or I'm paranoid, but I certainly don't like reports that even remotely imply all my income is part of the collective until it is distributed to me through the grace of the omniscient federal government.

In a way... it really is 'spending' when something is put in for a particular group...


Say the tax law is everybody pays in 25% of thier income.... no exceptions...

Now.... I argue that we poor slobs in Texas have to drive a LONG way to get anywhere.... and we have to use our AC all the time compared to those people who live in NY/NJ.... so we should get a deduction on our transportation expenses.... and they pass a law allowing a 1% deduction... now, everybody in the US is paying 25% and we down here are paying 24%... did the gvmt 'spend' that 1%

In a way... YES.... if they kept the tax the same for everybody... I would pay 25%... but then they would send me a check for 1%... spending the money on me...

So when it comes down to it... any special tax treatment is in reality just the same as me paying my full tax bill and them sending me a check...

 

[SunsetSail]

In a way... it really is 'spending' when something is put in for a particular group...

I don't really disagree with your point maybe just some of the presentation. I view spending as cash outflow (I would guess most accounting folks would also from the start of the double entry system), so on a very basic level: cash expenditures > revenue = deficit. Tax deductions and exclusions have no impact on the cash expenditure part of the equation. They certainly are a reduction in revenue and can lead to deficits - so I don't disagree about the impact to the government.

I'm really just troubled by what I see as potential manipulations in traditional word meanings to convey positive or negative emotions.

There is a great analogy to personal finance - it seems like most people at large think the way to get ahead is to increase your earnings, but most people here have discovered that they key to financial success is usually to limit the cash outflow.

 

[MichaelB]

In a way... it really is 'spending' when something is put in for a particular group...

So when it comes down to it... any special tax treatment is in reality just the same as me paying my full tax bill and them sending me a check...

Right.

I wonder why the difference between how the UK and the US are responding to this. Our cultural, social and political heritage is much more similar that not, yet our reactions to economic crisis seem almost opposite. UK politicians are attempting to lead a shared sacrifice and the public is supporting the effort - at least for now. The US elected officials are still attempting to gain relative advantage and impede any action that hints of partisan advantage regardless of the overall public benefit.

 

[Rustic23]

The seven commission members who voted against it include: Rep. Jan Schakowsky (D-Ill.); Rep. Paul Ryan (R-Wisc.); Sen. Max Baucus (D-Mont.); Rep. Dave Camp (R-Mich.); Rep. Xavier Becerra (D-Calif.); Rep. Jeb Hensarling (R-Texas); and Andrew Stern, former President, Service Employees International Union.



I live in Texas, and if I lived in Jeb Hensarling's district, I would vote and campaign against him!

 

[Alan]

I agree with the concept that tax credits and deductions should be classed as government spending, it seems an easy concept to understanding.

You give to charity and the government spends money to support that gift (otherwise you would give less).

You borrow money to buy a house and the government spends money to support you (otherwise you would borrow less).

 

[samclem]

I think we should reserve the word "spend" for its traditional meaning: When a party transfers money to another party for a good or service. By this definition, special tax treatments, etc are not spending.

If a tradesman replaces the windows on my home and charges me $3000 instead of $4000, did he just spend $1000? Where would that kind of math stop?

 

[M Paquette]

The seven commission members who voted against it include: Rep. Jan Schakowsky (D-Ill.); Rep. Paul Ryan (R-Wisc.); Sen. Max Baucus (D-Mont.); Rep. Dave Camp (R-Mich.); Rep. Xavier Becerra (D-Calif.); Rep. Jeb Hensarling (R-Texas); and Andrew Stern, former President, Service Employees International Union.

Just watch. I bet many of these senators and reps will also be insisting on Tax Breaks for Everyone. Even better, watch what happens next March-June, when the national debt hits the ceiling, and a motion to raise the ceiling comes up.

The same folks who are against hitching up their big boy pants and taking their medicine now will be bloviating next spring.

 

[Alan]

The same folks who are against hitching up their big boy pants and taking their medicine now will be bloviating next spring.

great word (I had to look it up ) and so true.

 

[FinanceDude]

So, the bottom line is that there were "not enough grownups in the room" to do something about the deficit? Say it ain't so, Sam!!!

 

[FinanceDude]

The seven commission members who voted against it include: Rep. Jan Schakowsky (D-Ill.); Rep. Paul Ryan (R-Wisc.); Sen. Max Baucus (D-Mont.); Rep. Dave Camp (R-Mich.); Rep. Xavier Becerra (D-Calif.); Rep. Jeb Hensarling (R-Texas); and Andrew Stern, former President, Service Employees International Union.

Ryan voted against it because it does not address the healthcare issue adequately, according to him. He works on the budget everyday so he must know a little something about it??

 

[Alan]

I wonder why the difference between how the UK and the US are responding to this. Our cultural, social and political heritage is much more similar that not, yet our reactions to economic crisis seem almost opposite. UK politicians are attempting to lead a shared sacrifice and the public is supporting the effort - at least for now. The US elected officials are still attempting to gain relative advantage and impede any action that hints of partisan advantage regardless of the overall public benefit.

I don't really know and have wondered the same thing myself. It happened similarly in the 1980s when the Thatcher government made sweeping reforms and force-fed bitter medicine to the people and pulled the economy around.

It may have something to do with the electoral system. In the UK, MP's are elected for up to 5 years instead of a certain 2 years between elections, and the upper house is composed of voting members appointed for life, plus the Head of State has never exercised her veto. (If it passes both Houses then it is good enough for her to sign). Also, if the government of the day has a large enough majority on bills they pass they can override any veto coming down from the upper house.

I listened to an article on the radio quite a few years ago that pointed out that when the USA gets the chance to set up a democracy in another country they never use their own as a model. The presenter said that this was because they recognized that a young democracy needed decisive, nimble government, and the USA's present arrangement was simply not suitable.

 

[Westernskies]

Ryan voted against it because it does not address the healthcare issue adequately, according to him. He works on the budget everyday so he must know a little something about it??

This wasn't supposed to be an end-all report; health care issues could still be addressed incrementally in subsequent legislation, where they had a better choice of addressing specific issues. I'm most disappointed in those who were more concerned about generating sound bites for their re-election campaigns than making tough choices for the good of the country.

 

[Alan]

This wasn't supposed to be an end-all report; health care issues could still be addressed incrementally in subsequent legislation, where they had a better choice of addressing specific issues. I'm most disappointed in those who were more concerned about generating sound bites for their re-election campaigns than making tough choices for the good of the country.

Exactly.

 

[Gone4Good]

Most folks say the present proposal has $3 in cuts for each $1 in new taxes, but others note that the the ratio is reversed: we'd have $2 in new taxes to $1 in spending cuts if we use the situation of just a few years ago as a more normal base case. These folks want more spending cuts.

What's the ratio we'd get if we started from the 1999 "baseline." Although spending has indeed gone off the rails, we cut taxes pretty significantly too. The "official" cost (or foregone revenue) of the tax cuts over 10 years is $4B. Slightly larger than the $3.8T deficit reduction proposal.

 

[M Paquette]

Ryan voted against it because it does not address the healthcare issue adequately, according to him. He works on the budget everyday so he must know a little something about it??

Good point. Yeah, damn. If only there were some way for him to possibly have some influence on future budget-related legislation. Then he could vote for this as a stopgap starting point, and then address changes he sees as necessary for healthcare in the amendment process, or in subsequent legislation.

Gosh. Poor guy. I suppose this was all he felt that he could accomplish.

 

[MichaelB]

The proposal was approved by 11 of 18 members yet important media, such as WSJ and Bloomberg, reported it was defeated. It is a disappointing outcome.

Todays NYT column by David Brooks is worth reading. Title is "I have a Vision" and it describes one way mature leadership could approach our current economic challenge. One highlight:

On Thursday, I debated Paul Ryan at the American Enterprise Institute on the proper role of government. Ryan is the incoming House Budget Committee chairman and one of the most intellectually formidable members of Congress. I really admire many of the plans he has put forward to bring down debt and reduce health care costs.

But Ryan and I differed over President Obama and the prospects for compromise in the near term. Ryan believes that the country faces a clearly demarcated choice. The Democratic Party, he argues, believes in creating a European-style cradle-to-grave social welfare state, while the Republicans believe in a free-market opportunity society. There is no overlap between the two visions and very little reason to think they can be reconciled.

I argued that Obama and his aides are liberal or center-left pragmatists and that nothing they have said or written suggests they want to turn the U.S. into Sweden. I continued that Ryans sharply polarized vision is not only journalistically inaccurate, it makes compromise and politics impossible. If every concession is regarded as an unprincipled surrender that takes us inexorably farther down the road to serfdom, then nothing will get done and the nation will go bankrupt.

http://www.nytimes.com/2010/12/03/opinion/03brooks.html?_r=1&ref=opinion

 

[Gone4Good]

The proposal was approved by 11 of 18 members yet important media, such as WSJ and Bloomberg, reported it was defeated.

Yup, where I come from 11/18 is a solid majority . . . even a super-majority by Senate standards. Seems to me the current leadership of both houses should submit this to the floor and see how it goes.

 

[M Paquette]

Everybody, sing along!
​

YouTube - I'm against it!.wmv

[Groucho]
I don't know what they have to say,
It makes no difference anyway,
Whatever it is, I'm against it.
No matter what it is or who commenced it,
I'm against it.

Your proposition may be good,
But let's have one thing understood,
Whatever it is, I'm against it.
And even when you've changed it or condensed it,
I'm against it.

I'm opposed to it,
On general principle, I'm opposed to it.

[chorus] He's opposed to it.
In fact, indeed, that he's opposed to it!

[Groucho]
For months before my son was born,
I used to yell from night to morn,
Whatever it is, I'm against it.
And I've kept yelling since I first commenced it,
I'm against it!

 

[MichaelB]

Ryan voted against it because it does not address the healthcare issue adequately, according to him. He works on the budget everyday so he must know a little something about it??

Ryan voted against it and gave an explanation. As did the others. I suspect most that voted against have a long list of easily articulated reasons to explain their actions.

Yup, where I come from 11/18 is a solid majority . . . even a super-majority by Senate standards. Seems to me the current leadership of both houses should submit this to the floor and see how it goes.

+1

 

[Westernskies]

Yup, where I come from 11/18 is a solid majority . . . even a super-majority by Senate standards. Seems to me the current leadership of both houses should submit this to the floor and see how it goes.

+1

 

[Alan]

Yup, where I come from 11/18 is a solid majority . . . even a super-majority by Senate standards. Seems to me the current leadership of both houses should submit this to the floor and see how it goes.

Totally agree.



From the NYT article Michael quoted, I think this sums up where we are and it's difficult at present to see how it will change.

If every concession is regarded as an unprincipled surrender that takes us inexorably farther down the road to serfdom, then nothing will get done and the nation will go bankrupt.

 

[Texas Proud]

Right.

I wonder why the difference between how the UK and the US are responding to this. Our cultural, social and political heritage is much more similar that not, yet our reactions to economic crisis seem almost opposite. UK politicians are attempting to lead a shared sacrifice and the public is supporting the effort - at least for now. The US elected officials are still attempting to gain relative advantage and impede any action that hints of partisan advantage regardless of the overall public benefit.

From what I read/heard.... in the UK the Prime Minister and the Cabinet make the budget... it is NOT voted on by the Parliment... so much easier to do what you want...

Now, if you do something that is so horrible... then they can have a vote of no confindence and 'collapse' the gvmt.... not exactly sure how this works.... just some of the things I heard when there.... Parlimentary gvmt is a lot different than what we have...

 

[Texas Proud]

I think we should reserve the word "spend" for its traditional meaning: When a party transfers money to another party for a good or service. By this definition, special tax treatments, etc are not spending.

If a tradesman replaces the windows on my home and charges me $3000 instead of $4000, did he just spend $1000? Where would that kind of math stop?

The problem is that we are talking REAL MONEY... sure, they did not 'spend' the money as it is defined... and in fact it does not even show up as spending on the Federal books...

So the $8K tax credit for buying a new house is not 'spending', but the $4K cash for clunkers is... but if I had bought a house, I would have $8K in my pocket... if I bought a new car with a clunker... I would not... I just would have paid less for the car...

So, which is spending and which is not

Your example with a tradesman misses the mark.... he does not have any ability to TAX you just because he wants to....