Who repays the debt???

[Embar Angylwrath]

Let me throw this out there for some general comments...

With the enormous deficit spending the US is doing, how will all that debt be repaid? (Deficit spending is borrowing, they just call it deficit spending to avoid calling it borrowing). I've seen reports from several economists (or groups of economists) that US spending will exceed GDP. That isn't a death shot per se... as long as the spending is 1) realted to an economically isolated event (this is), and 2) isn't largely directed towards non-infrastructure spending (oops, here we go). Both conditions have to be met in order to climb out of the deficit hole.

So what has to happen in order to eliminate deficit spending?

[Lurker]

The economy needs to recover and grow again. Investments in future technologies, education, and infrastructure are vital.

We need a sound revenue stream which means we can't push for unaffordable tax cuts or wacky flat tax schemes as soon as a surplus appears again. Surplus revenue needs to go into debt repayment, growth related investments (see above) or towards lowering health care costs (see below).

We need to lower health care costs. Lowering health costs requires a focus on preventative care coupled with coverage for everyone. I don't consider cutting coverage/benefits to be a viable way to achieve lower costs.

And we need an honest budget where spending isn't off the books and revenue meant for other programs isn't secretly diverted.

[Kulaf]

So your plan doesn't include any tax increases? You plan to pay for the increased spending by offsetting it with growing the tax base?

How exactly is that different than paying for tax cuts by increasing the tax base? Which you said was not a sound strategy?

[Lurker]

Heh. I didn't mean for that post to be some all inclusive plan forward. Tax increases such as restoring the top marginal rate to 39%, eliminating corporate tax loopholes, cap and trade revenues... all already proposed or implemented by Obama, are part of a sound revenue stream.

Did you need me to explain how that's different from the Republican policies where there is little or no federal investment and taxes are cut to absurd levels under the false claim that tax cuts pay for themselves?

[Kulaf]

But again....I see nothing in Obama's plan that is going to reduce the deficit. At best it might break even if a whole lot of things go as planned, and at worst the deficit grows more.

I think the question was how are we going to reduce the deficit.

[Ddrak]

So what has to happen in order to eliminate deficit spending?

Realistically?

The general population needs to vote for someone who will take more money from them than they give back in benefits. Until the mounting debt actually affects people in tangible ways this is unlikely to happen. It's probably the central failing of democracy - the average voter.

Dd

[Trollbait]

The general population needs to vote for someone who will take more money from them than they give back in benefits

How about spending less money than they take in.

I know, another one of those insane things Lurker is talking about.

[Lurker]

The insane part, Jecks, is when the Republicans advocate cutting taxes to absurd levels while either lying to people that tax cuts pay for themselves or lying to people that they are going to cut spending enough to make up the difference. By absurd levels, I mean the point where tax revenue -even with a growing economy- isn't enough to pay for programs and services that people want and need.

We always come back to the question of what spending you are going to cut and nobody ever has an answer that means anything in the real world.

[Ddrak]

The general population needs to vote for someone who will take more money from them than they give back in benefits

How about spending less money than they take in.

Isn't that exactly what I said?

Dd

[Trollbait]

Isn't that exactly what I said?

Yes. Yes it is.

As you can see, however, when I say it then somehow makes Lurker all frothy...

isn't enough to pay for programs and services that people want and need.

what spending you are going to cut and nobody ever has an answer that means anything in the real world

"I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on the objects of benevolence, the money of their constituents."

-- James Madison

[Lurker]

Isn't that exactly what I said?

Yes. Yes it is.

As you can see, however, when I say it then somehow makes Lurker all frothy

Nice try. You obviously thought you were giving a counter argument to Ddraks. That's why you started out with, "How about". Claiming you were trying to agree with Ddrak highlights your own dishonesty.

Anyways, I clarified what I consider "insane". I wasn't arguing against the concept of taking in more than we spend (Ddraks suggestion), or spending less than we take in (your brilliant counter argument).

"I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on the objects of benevolence, the money of their constituents."

Ohhhh... a Founding Father quote! As I said, "We always come back to the question of what spending you are going to cut and nobody ever has an answer that means anything in the real world." Thanks for proving my point.

[Trollbait]

Claiming you were trying to agree with Ddrak

Where did I do that? I made no such claim. If I was making such as claim I would have said: "I was agreeing with you, Ddrak"

I read Ddrak's statement wrong as I think you are reading too much into my response to him. We are all entitled to that now and again.

Ohhhh... a Founding Father quote! As I said, "We always come back to the question of what spending you are going to cut and nobody ever has an answer that means anything in the real world." Thanks for proving my point.

So you can't find that Constitutional Article either? Gotcha.

[Lurker]

You need to research that Madison quote some more. It had nothing to do with Federal spending on American citizens.

Your misuse of the quote aside, we'll put you down for the totally not insane suggestion that we eliminate most federal programs. What a great, not insane, real world solution.

[Kulaf]

He couldn't find Article 1 sec 8?

[Trollbait]

You need to research that Madison quote some more. It had nothing to do with Federal spending on American citizens.

I am aware. It had to do with money for foreign aid. I do not see the relevance of your snarky elitism. The quote still applies. Benevolence is benevolence no matter how applied.

we'll put you down for the totally not insane suggestion that we eliminate most federal programs. What a great, not insane, real world solution.

So we will put you down for a willful and continued violation of the Constitution (Broad and incredible interpretation of the term "general welfare" notwithstanding) as long as it fits your political and social agenda.

Are there programs that work? Yes.

Do most programs waste money? Yes.

The simple fact is that Congress has discovered how to bribe the public with the public's own money.

How sane is that?

[Lurker]

Rather than debate whether it's constitutional for the government to spend money the way it has for hundreds of years, why not tell us which programs you want to eliminate? Maybe even tell us how we get there from here. You know... real world stuff.

[Trollbait]

Rather than debate whether it's constitutional for the government to spend money the way it has for hundreds of years

First of all they have not spent money this way for "hundreds of years".

We would not have survived this long if they had.

The first department to get significant cuts is one of the few that is a specifically authorized government expenditure by the Constitution. The Defense department. The DoD is typically well behind the curve in their war think and future planning. I have never seen as much waste as when I was in the military. You could cut 15 to 20% from their budget and see a significant immediate savings.

Secondly, make Social Security untouchable. Every account should be individualized and each person should be able to track their investment online. It should earn a minimum return of 4%. I do not know which way for investment is best but that can be debated. An individual should only be able to take from Social Security what they paid into it.

Thirdly we need to untie health care insurance from employment. A mixture of price regulation and tort reform is needed to rein in out of control costs. If you can bring down the costs then it becomes a simple formula of those that can afford health insurance must buy it and those that cannot afford it will be subsidized. I know some of you will say "Hey that is not Conservative". Technically you are right but the government must step in at certain times and those times are indicated by people behaving badly. It is selfish and bad behavior that got us into the health care mess.

Fourth I would completely revamp the way farm subsidies are handled. The government does an extremely poor job at it currently.

That is where I would start. In the real world.

[Embar Angylwrath]

California may be the model for how and what to cut.

The voters here rejected a bunch of weird reveneue generating schemes, leaving California with about a $23 billion dollar deficit. So now, the only way for California to balance the budget is through cuts. No program is off the table. It will be interesting to see how California approaches this, and also see how much the cuts will affect the citizenry.

[Partha]

First of all they have not spent money this way for "hundreds of years".

We would not have survived this long if they had.

Indeed. What killed us was the massive increase in Defense and foreign spending in the postwar and 50's aftermath. Half of all discretionary spending is defense related. In 1940, military spending was less than 2 percent of GDP. Now it's almost 5, and in the '50's it was well over 10%. With the lack of a large foreign threat, keeping it that high cuts off a lot of our options.

[Partha]

California may be the model for how and what to cut.

The voters here rejected a bunch of weird reveneue generating schemes, leaving California with about a $23 billion dollar deficit. So now, the only way for California to balance the budget is through cuts. No program is off the table. It will be interesting to see how California approaches this, and also see how much the cuts will affect the citizenry.

By the way, this is also not well understood by most. California is the ONLY state in the union that requires a 2/3 majority to increase budgets by 5% or more. California's Prop 13 also does not allow for increases in property tax by more than 1%. Therefore, it's hammered by the double whammy of the land speculation dropping the bottom out of revenue and it requiring a supermajority to increase the budget during lean parts. As Lurker says, in rough times (New Deal is the best example), growth comes from the government. Unfortunately, California does not allow it's government to do the growing it needs in a recession.

Go ask people in California - the vast majority don't want services cut. They understand that government has to grow. But as long as more than a third of the gerrymandered Legislature says no, there is no way for California to deal with it. California is the solution to a question that no sane person would be asking.