The spending the Democrats want to cut: ...nothing.

[GenuineRisk]

Originally Posted by joeydb

The key thing is that the Democrats don't care what the math says. The fact that they want the tax hikes "on the rich" (repeated ad nauseum like a reflex) and will not talk about cutting non-defense spending is symptomatic of that reality.

The revenue produced by raising taxes will amount to about 8 or 9 days of federal spending @ $10B per day.

With defecits over $1T, or 100 days annually of unfunded spending on average, it doesn't take a rocket scientist to see that an aversion to cutting spending is absurd.

it's because Defense is the only major spending we could actually cut. Non defense discretionary spending is less than ten percent of total budget.

Raising Medicare eligibility will cost more than it will save.
Social Security doesn't contribute to the deficit.
If we don't pay interest on our debt, we go into default.
Cutting Medicaid pushes the additional cost onto the states. Or people starve. One is not cost effective and the other is immoral.

So that leaves Defense.

[Danzig]

Originally Posted by GenuineRisk

it's because Defense is the only major spending we could actually cut. Non defense discretionary spending is less than ten percent of total budget.

Raising Medicare eligibility will cost more than it will save.
Social Security doesn't contribute to the deficit.If we don't pay interest on our debt, we go into default.
Cutting Medicaid pushes the additional cost onto the states. Or people starve. One is not cost effective and the other is immoral.

So that leaves Defense.

yes, it does. i know with the convoluted accounting practices the gov uses that it's argued it doesn't, but it really does. we pay less in than will be taken out. then there's the iou's.

[GenuineRisk]

Originally Posted by Danzig

yes, it does. i know with the convoluted accounting practices the gov uses that it's argued it doesn't, but it really does. we pay less in than will be taken out. then there's the iou's.

Right, but that is money that has been lent out to the government. If we're saying that that money was a gift, not a loan, then we're saying the US government isn't good for its debts, in which case we're really screwed.

It's not convoluted accounting- SS, thanks to the changes instituted by Reagan and Tip O'Neill's Congress back in, what, 1982? 1983?, started running a surplus, which was then LENT to the government's general operations funds, via purchasing Treasury bonds. SS, if I understand, is required to lend out surpluses so that it can generate interest on the surpluses and contribute to its stability. Now, admittedly, the changes were instituted with the intent of creating a surplus so that they could justify slashing taxes on the wealthy, but it still is a loan, not a gift.

Fun fact- much like the Bush tax cuts, the big Reagan tax cuts on the wealthy were also supposed to be temporary- Greenspan said they'd be okay for about 30 years, and then taxes would have to go back up on the wealthy because the low tax rate wouldn't be sustainable. Aaaannd... let's see..... 30 years from 1982 would bring us to when?

Social Security contributes to the deficit only if you think the USA isn't good for its debts. Otherwise, SS taking in less money than it pays out is actually good for the US, as it requires the US to pay back some of the money borrowed from SS, and that actually reduces our debt.

[Danzig]

i'm hoping everyone has to come to the realization that there is no such thing as a temporary tax cut or hike.

i'm one of those wondering just what will happen if we go off this fiscal 'cliff'. is it a cliffs of dover height, or two foot retaining wall cliff? if the bush 'temporary' tax cuts expire, and defense spending cuts go in-will it really matter?
i'd rather they let all the cuts expire than keep extending them for everyone. now, had the cuts to the rich resulted in the job growth they were touting would be a result, i'd be all for continuing them. except, that's a lie. or a damned lie.

[GenuineRisk]

Originally Posted by Danzig

i'm hoping everyone has to come to the realization that there is no such thing as a temporary tax cut or hike.

i'm one of those wondering just what will happen if we go off this fiscal 'cliff'. is it a cliffs of dover height, or two foot retaining wall cliff? if the bush 'temporary' tax cuts expire, and defense spending cuts go in-will it really matter?
i'd rather they let all the cuts expire than keep extending them for everyone. now, had the cuts to the rich resulted in the job growth they were touting would be a result, i'd be all for continuing them. except, that's a lie. or a damned lie.

So true about the job growth from cuts on the highest levels of income being bunk. Why we based economic policy on something drawn on the back of a cocktail napkin I'll never understand Then again, I came from a state that elected Rick Santorum to the Senate, so stupidity knows no bounds.

The full repeal of the Bush tax cuts may actually have somewhat of a negative effect on the economy, as middle-class people will have less spending money, and as there are a lot of middle-class people, that will affect consumer spending and make the economy contract somewhat.

The best course, from what I've read, would be at this point to extend the rates on income under $250,000, as middle-class people are likely to spend that money, which is good for the economy. There's no benefit to cuts on income above that, as it's not likely to be spent and in fact, would be better off taken in tax because the government will spend it on things that do drive the economy.

Essentially, you want the money being spent, not hoarded. And middle class are more likely to spend.

[jms62]

They should compromise at say 500-750 K

[GenuineRisk]

Originally Posted by jms62

They should compromise at say 500-750 K

Fixing the AMT thing would also be nice, while they're at it. We are nowhere near $250,000, and we've gotten smacked by the AMT.