Economic Collapse is Inevitable
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I Wear Pants
You switched from talking about debt in your last reply to isa to talking about deficit in this one.jmog;1331426 wrote:One simple graph proves isadore wrong, since he likes to go with things vs GDP....
http://www.deptofnumbers.com/misc/debt-revenue-and-expenditures-as-a-fraction-of-gdp/
Halfway down the page look at the graph labeled "Government Receipts and Expenditures as a Fraction of GDP"
No matter the tax rates over the years the revenues vs GDP has pretty much been constant, hovering between 15-20% mostly around 17-18%. So change the taxes all you want, you won't bring in more money (as % of GDP).
The problem is obvious to anyone who can pass a math class, up until the late 60s/early 70s spending as a % of GDP was always about the same as revenues. Then all the sudden (and it is even wose now) no one cared anymore and boom, spending has been consistantly above 20% ever since (25% now).
We are currently bringing in our "average" of around 17-18% of GDP, so tax revenues is not the problem. But math with graphs always did cause many people problems for some reason.
Isa is an idiot, but I just thought I'd point that out. -
isadore
government has collected more than 18% of gdp, have collected over 20% and when they did, we got control of the deficit. raise taxes on the rich.gut;1331384 wrote:It's a nice theory, but again you ignore the reality of what is really driving things. The govt still only collects about 18% of GDP regardless of what the tax rates have been. So revenue growth is correlated mainly with GDP growth, not tax rates. This means, again, that the deficit/debt over the longer term is driven exclusively by changes in spending. -
gut
LOL, ok, where do you think Obama is going to come up with another 5% to close the gap to his 25% spending levels? His completely lackluster recovery hasn't even been able to hit 18% revenues yet, has it?isadore;1331756 wrote:government has collected more than 18% of gdp, have collected over 20% and when they did, we got control of the deficit. raise taxes on the rich. -
isadore
well gosh a ruddies he has begun the process, if you examine the government spending, the trend over the last three years is decreasing in the government percentage of the gdp. the problem has been the low revenue caused by the tax cuts for the rich.gut;1332387 wrote:LOL, ok, where do you think Obama is going to come up with another 5% to close the gap to his 25% spending levels? His completely lackluster recovery hasn't even been able to hit 18% revenues yet, has it? -
jmog
You failed again, try reading the graph I stated one more time.isadore;1331754 wrote:gosh a ruddies when you look at that chart what you see is when the tax cut come in the last 30 years and revenues decline as a % of gdp, our debt climbs. But gosh when those taxes go up to 20% of gdp our deficit comes down. raise taxes on the rich.
No matter what we do to the tax rates, revenues as a % of GDP hardly changes at all, stays around 17-18%.
Try again, because you just failed. -
isadore
gosh a ruddies what do we see off your chart in the late 1990s up until the bush tax cutsjmog;1332435 wrote:You failed again, try reading the graph I stated one more time.
No matter what we do to the tax rates, revenues as a % of GDP hardly changes at all, stays around 17-18%.
Try again, because you just failed.
year, quarter, debt % gdp, revenue%gdp, spending%gdp, surplus2001 Q2 55.59% 20.26% 19.10% 1.16% 2001 Q1 56.80% 20.68% 19.11% 1.57%
2000 Q455.90% 20.57% 18.81% 1.77% 2000 Q3 56.64% 20.61% 18.80% 1.81% 2000 Q2 57.15% 20.58% 18.82% 1.76% 2000 Q1 59.46% 20.94% 18.82% 2.11% 1999 Q4 60.12% 20.31% 19.10% 1.21% 1999 Q3 60.14% 20.24% 19.14% 1.10% 1999 Q2 60.94% 20.24% 19.20% 1.04% 1999 Q1 61.78% 20.25% 19.38% 0.86% 1998 Q4 62.19% 20.18% 19.59% 0.59% 1998 Q3 62.46% 20.30% 19.71% 0.59% 1998 Q2 63.78% 20.24% 20.00% 0.24% 1998 Q1 64.44% 20.16% 20.07% 0.09%
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jmog
Nice, you obviously are amazing at statistics, you pick the absolute highest point ever in the revenue (around 20%) department and say "see, this is the way it should be". When everyone that knows anything about statistics and averages realizes that you need to look at the whole trend, 20% in that era was the outlier, it was that high BECAUSE the economy was doing so well.isadore;1332471 wrote:gosh a ruddies what do we see off your chart in the late 1990s up until the bush tax cuts
year, quarter, debt % gdp, revenue%gdp, spending%gdp, surplus2001 Q2 55.59% 20.26% 19.10% 1.16% 2001 Q1 56.80% 20.68% 19.11% 1.57%
2000 Q455.90% 20.57% 18.81% 1.77% 2000 Q3 56.64% 20.61% 18.80% 1.81% 2000 Q2 57.15% 20.58% 18.82% 1.76% 2000 Q1 59.46% 20.94% 18.82% 2.11% 1999 Q4 60.12% 20.31% 19.10% 1.21% 1999 Q3 60.14% 20.24% 19.14% 1.10% 1999 Q2 60.94% 20.24% 19.20% 1.04% 1999 Q1 61.78% 20.25% 19.38% 0.86% 1998 Q4 62.19% 20.18% 19.59% 0.59% 1998 Q3 62.46% 20.30% 19.71% 0.59% 1998 Q2 63.78% 20.24% 20.00% 0.24% 1998 Q1 64.44% 20.16% 20.07% 0.09%
I notice that you cut off Q3 and Q4 from 2001...I wonder why? Oh yeah, 9/11 crippled the economy sending revenues from 20% down to 16% by 2003.
That's when the Bush tax cuts were issued and from there it went from 16% to 19% by 2007.
No matter what, you picked the highest point in the graph and it STILL is ONLY 20%, so therefore we can NOT EVER get revenues up to 25% which is WHAT WE ARE SPENDING RIGHT NOW!
So, once again, you liberals actually prove our conservative point, the problem is spending is too high, not that tax revenues are too low.
Get spending below 20% and then we can talk extra tax revenues to actual have a surplus to pay down the debt. -
isadore
Gosh a ruddies really, what did write.jmog;1332511 wrote:Nice, you obviously are amazing at statistics, you pick the absolute highest point ever in the revenue (around 20%) department and say "see, this is the way it should be". When everyone that knows anything about statistics and averages realizes that you need to look at the whole trend, 20% in that era was the outlier, it was that high BECAUSE the economy was doing so well.
I notice that you cut off Q3 and Q4 from 2001...I wonder why? Oh yeah, 9/11 crippled the economy sending revenues from 20% down to 16% by 2003.
That's when the Bush tax cuts were issued and from there it went from 16% to 19% by 2007.
No matter what, you picked the highest point in the graph and it STILL is ONLY 20%, so therefore we can NOT EVER get revenues up to 25% which is WHAT WE ARE SPENDING RIGHT NOW!
So, once again, you liberals actually prove our conservative point, the problem is spending is too high, not that tax revenues are too low.
Get spending below 20% and then we can talk extra tax revenues to actual have a surplus to pay down the debt.
seems like it went up to 20.9% to produce a surplus. We had a whole trend of raising taxes on the rich for that period in the 1990s into the beginning of the Bush Presidency with this great revenue flow. Gosh a ruddies and then what we get Bush cutting taxes while fighting two wars on credit pushing us into increasing debt. And what do we get by the end of the bush presidency a collapsed economy and a snowballing national debt. Thank you tax cuts.jmog wrote: No matter what we do to the tax rates, revenues as a % of GDP hardly changes at all, stays around 17-18% -
jmog
Around 17-18% is the average, average doesn't mean the forever trend will be a flat line, there are peaks and valleys that typically coincide with unemployment rates and the economy.isadore;1332528 wrote:Gosh a ruddies really, what did write.
seems like it went up to 20.9% to produce a surplus. We had a whole trend of raising taxes on the rich for that period in the 1990s into the beginning of the Bush Presidency with this great revenue flow. Gosh a ruddies and then what we get Bush cutting taxes while fighting two wars on credit pushing us into increasing debt. And what do we get by the end of the bush presidency a collapsed economy and a snowballing national debt. Thank you tax cuts.
An average of 18% of course means that sometimes the revenues would be as high as 20 and as low as 15-16.
However, you STILL haven't addressed the fact that the spending is currently almost 25%.
Never, in the history of the USA (well, since we have been tracking it) has tax revenues been anywhere near 25% of GDP, so no matter what we do with tax rates we will NOT get anywhere NEAR there.
So, taxing the rich sounds like a great idea until you actually start using math and realize it gets you no where close to closing the deficit gap.
Please show me what the democrats plan is to get spending down to under 20% where there is at least a chance that the tax revenues match the number. -
isadore
1. 20% expenditures should not be sacrosanct, if it does not fulfil the needs of the american peoplejmog;1332555 wrote:Around 17-18% is the average, average doesn't mean the forever trend will be a flat line, there are peaks and valleys that typically coincide with unemployment rates and the economy.
An average of 18% of course means that sometimes the revenues would be as high as 20 and as low as 15-16.
However, you STILL haven't addressed the fact that the spending is currently almost 25%.
Never, in the history of the USA (well, since we have been tracking it) has tax revenues been anywhere near 25% of GDP, so no matter what we do with tax rates we will NOT get anywhere NEAR there.
So, taxing the rich sounds like a great idea until you actually start using math and realize it gets you no where close to closing the deficit gap.
Please show me what the democrats plan is to get spending down to under 20% where there is at least a chance that the tax revenues match the number.
2. according to your own chart expenditures as a percentage of the gdp have been falling the last 2 years, the problem is revenue is too low. solution raise taxes on the rich. -
jmog
So, expenditures are around 24% of GDP, revenues have NEVER been higher than 20-21% and the problem is revenue is too low?isadore;1332568 wrote:1. 20% expenditures should not be sacrosanct, if it does not fulfil the needs of the american people
2. according to your own chart expenditures as a percentage of the gdp have been falling the last 2 years, the problem is revenue is too low. solution raise taxes on the rich.
You can't be serious, history, math, statistics, economics, and most importantly REALITY all disagree with you.
Do you really believe having perpetual deficits constantly adding to the debt, is feasible? -
gutThe solution is to come up with more taxes on the poor that they are too stupid to realize they are paying. You know, stuff like the lottery (lmao, they DOUBLED the price of a Powerball ticket), and I see Ohio finally got in the game on casinos.
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BoatShoes
1. Because income tax revenues have averaged 18% in the United States means nothing really. In fact, many tax reform plans have been crafted in order to hit that target...regardless of the marginal rate with offsetting deductions etc. You yourself have alluded to this point when you've suggested that the 90% marginal rate didn't really reach that level of income.jmog;1332604 wrote:So, expenditures are around 24% of GDP, revenues have NEVER been higher than 20-21% and the problem is revenue is too low?
You can't be serious, history, math, statistics, economics, and most importantly REALITY all disagree with you.
Do you really believe having perpetual deficits constantly adding to the debt, is feasible?
Several OECD countries bring in more than 18% of gdp because they believe in a stronger social safety net. There is no law of the universe that suggests we cannot breach the historical norm of 18% of gdp. If America chooses this, they're going to have to choose more revenue as a percentage of gdp probably through more unique taxes than an income tax. And, for that matter, the CBO projects that the additional taxes from Obamacare (many of which are consumption oriented and not as easy to dodge as income taxes, etc) could breach the 20% threshold at full employment even without riding the wave of a housing or stock bubble. So, take that for what it's worth. We'd probably need a VAT or something similar but that is a choice Americans have to make.
Some good options might be pigovian taxes that target behavior that is harmful...i.e. fat taxes, carbon taxes, sugar taxes, gas taxes, etc.
Also, you keep saying "the problem is spending."
Our immediate large amount of spending at 25% of gdp is all emergency spending that rose without appropriations from congress for the most part. It's not built in for the long term and will drop automatically when we reach full employment and return to about 21-22% of gdp. So deficit scolds are using temporary increases in spending to justify their claim "the problem is spending" and as an excuse to cut these programs in the name of getting back at moochers and the like.
We do have a long run health care cost problem that is going to increase spending gradually as a percentage of gdp even after our emergency spending returns to normal levels and this will continue until disaster unless we control those costs. Just taking those costs off the gubmint balance sheet ain't gonna do the trick, bro.
The best way to hold down those costs is powerful bargaining power for medicare. -
gut
They do so thanks in no small part to a "FICA" roughly 50% higher on average than in the US and a 19% VAT. Some have tried higher VAT's and found - shockingly - revenues start to decrease.BoatShoes;1332663 wrote: Several OECD countries bring in more than 18% of gdp because they believe in a stronger social safety net.
http://www.oecd.org/newsroom/2401707.pdf
That's an interesting table for you. It's the second one - taxes on income and profits as a % of GDP. Note the US at 14.2%. Many Western European countries are around or below that rate.
Table 3 is also interesting - look at some of the leaders in increases in tax as a % of GDP from 1985-1999: Greece, Italy and Spain...as 3 of the top 5. Hmmmm....
The last table (Composition of Revenue) pretty much crystallizes the story - our poor and middle class don't pay enough for their social insurance and consumption. Many other countries - particularly most of the socialist models in Europe so many want to emulate - collect a much higher % of revenues from SS and Goods & Services (VAT). The US gets some of that back with higher than average property taxes. -
jmog
How surprising a Keynesian would suggest keeping spending levels the same and just adding things like a VAT on top of our income taxes (not in place of).BoatShoes;1332663 wrote:1. Because income tax revenues have averaged 18% in the United States means nothing really. In fact, many tax reform plans have been crafted in order to hit that target...regardless of the marginal rate with offsetting deductions etc. You yourself have alluded to this point when you've suggested that the 90% marginal rate didn't really reach that level of income.
Several OECD countries bring in more than 18% of gdp because they believe in a stronger social safety net. There is no law of the universe that suggests we cannot breach the historical norm of 18% of gdp. If America chooses this, they're going to have to choose more revenue as a percentage of gdp probably through more unique taxes than an income tax. And, for that matter, the CBO projects that the additional taxes from Obamacare (many of which are consumption oriented and not as easy to dodge as income taxes, etc) could breach the 20% threshold at full employment even without riding the wave of a housing or stock bubble. So, take that for what it's worth. We'd probably need a VAT or something similar but that is a choice Americans have to make.
Some good options might be pigovian taxes that target behavior that is harmful...i.e. fat taxes, carbon taxes, sugar taxes, gas taxes, etc.
Also, you keep saying "the problem is spending."
Our immediate large amount of spending at 25% of gdp is all emergency spending that rose without appropriations from congress for the most part. It's not built in for the long term and will drop automatically when we reach full employment and return to about 21-22% of gdp. So deficit scolds are using temporary increases in spending to justify their claim "the problem is spending" and as an excuse to cut these programs in the name of getting back at moochers and the like.
We do have a long run health care cost problem that is going to increase spending gradually as a percentage of gdp even after our emergency spending returns to normal levels and this will continue until disaster unless we control those costs. Just taking those costs off the gubmint balance sheet ain't gonna do the trick, bro.
The best way to hold down those costs is powerful bargaining power for medicare.
The thing that surprises me though is that you, as a known liberal, supports a VAT to pay for the current spending levels even though a VAT typically hurts lower and middle class families more than it does the rich. This is the case as the poor and middle class since a higher percentage of their income is used to buy things rather than savings. -
BoatShoes
Installing a VAT now would be very bad...just like the expiration of the payroll tax cut at the end of the year will cause a lot of pain and start contracting the economy. We should really now not be so concerned with the high levels of spending as it goes up automatically. It'll go back down when we get to full employment.jmog;1332751 wrote:How surprising a Keynesian would suggest keeping spending levels the same and just adding things like a VAT on top of our income taxes (not in place of).
The thing that surprises me though is that you, as a known liberal, supports a VAT to pay for the current spending levels even though a VAT typically hurts lower and middle class families more than it does the rich. This is the case as the poor and middle class since a higher percentage of their income is used to buy things rather than savings.
(Should be doing more to get to full employment but that is a non-starter in the deficit obsessed world as we'll just allow long term potential gdp to continue to drop but I digress).
But, since we are deficit obsessed...it may be the best thing to just go over the fiscal slope and then pass laws that counteract the contractions that are more harmful than others (i.e. continue payroll tax cut, lower marginal rates for middle and lower class).
However, you're right...in the long term...if we're to achieve budget balance and keep the promises to the baby boomers, a VAT will probably be in order. You could probably have better consumption taxes that discourage bad behavior but a VAT will do. I think you'd find that most Americans would trade a bit more out of consumption for a secure retirement and secure, good health insurance that is powerful enough to bargain for better deals (nevermind that VATs regressive effects can be reduced through tax credits and the like). The U.S. is already a duel income/consumption tax regime anyway as the payroll taxes would qualify as consumption taxes reaching labor income only and not additions to savings.
But, worth nothing again, that if we had the health care costs of France...we probably could get away without having a VAT since our welfare state is paltry compared to theirs.
We're worried about the wrong things.
We need to be worried about 1. Getting to full employment as soon as possible which will take care of most of our current trillion dollar deficits and 2. controlling long term health care costs.
Worrying about cutting spending now for the sake of cutting spending or for closing the deficit or raising revenue now for the sake of raising revenue or closing the deficit both miss the point IMHO. -
jmog
I agree 100%, unfortunately the current administration spent 4 years doing nearly nothing about this. Instead, they try to fix your item #2 first and completely botched that making the costs continue to rise (not slowing down one bit).BoatShoes;1332827 wrote:Installing a VAT now would be very bad...just like the expiration of the payroll tax cut at the end of the year will cause a lot of pain and start contracting the economy. We should really now not be so concerned with the high levels of spending as it goes up automatically. It'll go back down when we get to full employment.
(Should be doing more to get to full employment but that is a non-starter in the deficit obsessed world as we'll just allow long term potential gdp to continue to drop but I digress).
But, since we are deficit obsessed...it may be the best thing to just go over the fiscal slope and then pass laws that counteract the contractions that are more harmful than others (i.e. continue payroll tax cut, lower marginal rates for middle and lower class).
However, you're right...in the long term...if we're to achieve budget balance and keep the promises to the baby boomers, a VAT will probably be in order. You could probably have better consumption taxes that discourage bad behavior but a VAT will do. I think you'd find that most Americans would trade a bit more out of consumption for a secure retirement and secure, good health insurance that is powerful enough to bargain for better deals (nevermind that VATs regressive effects can be reduced through tax credits and the like). The U.S. is already a duel income/consumption tax regime anyway as the payroll taxes would qualify as consumption taxes reaching labor income only and not additions to savings.
But, worth nothing again, that if we had the health care costs of France...we probably could get away without having a VAT since our welfare state is paltry compared to theirs.
We're worried about the wrong things.
We need to be worried about 1. Getting to full employment as soon as possible which will take care of most of our current trillion dollar deficits and 2. controlling long term health care costs.
Worrying about cutting spending now for the sake of cutting spending or for closing the deficit or raising revenue now for the sake of raising revenue or closing the deficit both miss the point IMHO.
If the economy/unemployment had been his main focus and he worked with the Rs instead of just saying "do what I want or we do nothing" (yes, I know the Rs have a similar mantra now) I guarantee we'd be at or below 6% right now (or full employment).
If he had the economy 1st on his mind during the first time and crossed the aisle (very much like Clinton did after his first 1-2 years of his Presidency) he would have won this past election in a Reaganesque landslide. Only a few southern states would have gone to Romney.
However, his lack of action on the economy and worrying about other social issues and a debacled health care law, made him beatable in November.
He should have worried about the economy first, since in his own words "the worst recession since the great depression" then he goes and does so little about it (and please don't bring up stimulus, that worked about as well as a prohibition did to stopp drinking. -
isadore
gosh a ruddies our first African American President has set a trend have seen a nearly 2% decline in expenditures in 2 years under Obama now the revenue can be increased by a true tax high on the rich in our society, a raise in income tax, coupled with setting capital gains tax at the same rate as income tax, and ending the ceiling on fica tax then we will eliminate the defiict and put medicare and social security on sound footing.jmog;1332604 wrote:So, expenditures are around 24% of GDP, revenues have NEVER been higher than 20-21% and the problem is revenue is too low?
You can't be serious, history, math, statistics, economics, and most importantly REALITY all disagree with you.
Do you really believe having perpetual deficits constantly adding to the debt, is feasible? -
jmog
lol, the first 2 years when he had full democratic control what happened?isadore;1332840 wrote:gosh a ruddies our first African American President has set a trend have seen a nearly 2% decline in expenditures in 2 years under Obama now the revenue can be increased by a true tax high on the rich in our society, a raise in income tax, coupled with setting capital gains tax at the same rate as income tax, and ending the ceiling on fica tax then we will eliminate the defiict and put medicare and social security on sound footing.
The last 2 years the republicans had the house. Coincidence?
The last 3/4 of your one long run on sentence is laughable at best.
History has proven over and over again that the capital gains tax revenue actuall goes DOWN when the rates are higher. I'm not even going to comment on the rest of that babbling. -
isadore
gosh a ruddie you have certain memory lapses don't you. Upon taking office our First African American President had problems to solve beyond those present to any other President since FDR. He had two wars to turn around and conduct, he had an economy broken. He turned those wars around, and took the attack to Al Queda, he turned our economy around with his stimulus package. That was much more than most presidents do in 8 years and he did it in 2. Now he can concentrate on fighting the deficit if he can raise the needed revenue by taxing the rich at fair level.jmog;1332868 wrote:lol, the first 2 years when he had full democratic control what happened?
The last 2 years the republicans had the house. Coincidence?
The last 3/4 of your one long run on sentence is laughable at best.
History has proven over and over again that the capital gains tax revenue actuall goes DOWN when the rates are higher. I'm not even going to comment on the rest of that babbling. -
jmog
That's about as much revisionist history as can possibly be put into just a few seconds.isadore;1332884 wrote:gosh a ruddie you have certain memory lapses don't you. Upon taking office our First African American President had problems to solve beyond those present to any other President since FDR. He had two wars to turn around and conduct, he had an economy broken. He turned those wars around, and took the attack to Al Queda, he turned our economy around with his stimulus package. That was much more than most presidents do in 8 years and he did it in 2. Now he can concentrate on fighting the deficit if he can raise the needed revenue by taxing the rich at fair level. -
gut
Yeah, it was such a dire mess that Obama but Biden in charge of the stimulus and then turned his attention to Obamakare. Just over a month into office and a robust recovery was all teed-up, and so Obama turned to his pet projects.jmog;1332886 wrote:That's about as much revisionist history as can possibly be put into just a few seconds. -
isadore
read and learn, the truth will set you free.jmog;1332886 wrote:That's about as much revisionist history as can possibly be put into just a few seconds. -
lhslep134
Why do you guys respond to isaidiot?
I've seen some pretty healthy debate between the right and the left, and none of it is coming from isaidiots rambling incoherent nonsense. Stop responding to him. -
Classyposter58
This. Just wrote a paper for school on this. So here's my quote...ccrunner609;1333083 wrote:Flat tax would solve the problem...both sides get what they want. Claim a victory.
Taxing the rich more isnt "fair". The top 10% already pay something like 90% of the taxes. If you cant see that its not working, why would you do more of it?
Revenue is fine, its spending.
The first question we should all ask is how much do certain tax brackets pay? According to the Internal Revenue Service in 2008 the top 1% of earners paid 40 percent of the total income tax bill. So the other 99 percent only have to cover a little over half the tab. In fact the top 10% of earners paid a grand total of 71 percent, leaving the other 90 with only 29 percent of the bill. I get that they make more money and a progressive tax rate is fair, I will not dispute that, however almost the entire income tax bill is paid by only a tenth of our country. Even more dramatic is the fact that the entire bottom half of earners in this country pay only three percent of the total income tax, despite making 13 percent of the income. So the top half of the earners in this country, or 120 million adults, pay 97 percent of the bill.