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Tue Jan 1, 2013, 03:52 PM

There are 2 Main Reasons for the Deficit. Tax Cuts and Big War.

So anyone who is actually serious about deficit reduction would want:

1) Repeal of the Bush tax cuts (and even the Reagan tax cuts), Increase is capital gains tax, & other tax increases on those who have more money than God.

2) Drastic reductions in the bloated 'defense' budget.


Any 'deal' that does not fulfill these two requirements is not seriously addressing the deficit issue, that's a fact.



(REF: http://blogs.hbr.org/cs/2012/12/the_fiscal_cliff_is_just_a_lon.html)

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Reply There are 2 Main Reasons for the Deficit. Tax Cuts and Big War. (Original post)
grahamhgreen Jan 2013 OP
jeff47 Jan 2013 #1
grahamhgreen Jan 2013 #5
jeff47 Jan 2013 #9
grahamhgreen Jan 2013 #11
jeff47 Jan 2013 #13
grahamhgreen Jan 2013 #15
jeff47 Jan 2013 #16
grahamhgreen Jan 2013 #17
jeff47 Jan 2013 #18
grahamhgreen Jan 2013 #20
Sarah Ibarruri Jan 2013 #19
Initech Jan 2013 #2
grahamhgreen Jan 2013 #6
mike_c Jan 2013 #3
Dalai_1 Jan 2013 #4
Egalitarian Thug Jan 2013 #7
99Forever Jan 2013 #8
gulliver Jan 2013 #10
grahamhgreen Jan 2013 #12
gulliver Jan 2013 #14

Response to grahamhgreen (Original post)

Tue Jan 1, 2013, 03:55 PM

1. No. There is 1 reason for the deficit: the bad economy.

If unemployment was 5%, 60% of the deficit would be gone.

It's fucking insane to talk about cutting any spending, including defense spending, while the economy is in the toilet.

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Response to jeff47 (Reply #1)

Tue Jan 1, 2013, 04:10 PM

5. Since the Bush tax cuts of the early 2000s, the US federal government has taken in about 18 percent

while spending 25%, the numbers don't add up. Before that, we had a surplus. What changed? Bush tax cuts and unfunded wars and a massive increase in the Big War budget. And, oh yeah.... costly trade agreements began to show their effect!

If you want to get unemployment back to 5%, you're going to have to get rid of the costly trade agreements that moved our jobs overseas. And I don't see that happening in these talks.

It's not insane to talk about cutting Big War.

The money spent on war has a limited, one time benefit. When a bomb is built, once it blows up, it's economic impact is over. However, if we took that 'defense' money and say, built wind farms, or gave people a free education, that money would be returned into the economy in the form of 'free' electricity, or a more educated populace with higher earnings potential.

So big war, IMHO, is a huge part of our problem that must be cut before we can funnel the money into more productive areas.



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Response to grahamhgreen (Reply #5)

Tue Jan 1, 2013, 04:21 PM

9. Your plan has to actually pass Congress.

Before that, we had a surplus. What changed? Bush tax cuts and unfunded wars and a massive increase in the Big War budget.

Which accounts for about 40% of the deficit.

So....we should attack that 40% instead of the 60% - which would actually help people - because......?

If you want to get unemployment back to 5%, you're going to have to get rid of the costly trade agreements that moved our jobs overseas.

Then why was unemployment less than 5% in 2007? There have been no "costly trade agreements" since then. If your view of economics was correct, that isn't possible.

It's not insane to talk about cutting Big War.

It's government spending that can't be outsourced. Yes, infrastructure would be better since we'd get something durable for the money. But defense spending is a shitload of jobs. You don't massively cut jobs during a bad economy unless you want a terrible economy. You cut those jobs when the economy is healthy enough to absorb the job losses.

However, if we took that 'defense' money and say, built wind farms, or gave people a free education, that money would be returned into the economy in the form of 'free' electricity, or a more educated populace with higher earnings potential.

Please explain how you get this plan through the House. They've turned it down over and over again since 2010. And they'll still hold the House until at least 2014, and probably until redistricting in 2020.

So...your plan is to slash jobs in a bad economy and then fail to replace those jobs when Republicans refuse to pass your bill.

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Response to jeff47 (Reply #9)

Tue Jan 1, 2013, 04:34 PM

11. It has passed congress! It's called the Budget Control Act of 2011!

1) Big War ALONE is 60-70% of our budget! Not 40%.

2) I would submit that many of those employed were in the process of physically moving the factories overseas.

3) I think we agree that we are better off shifting our resources from war to infrastructure.

So the plan is, enact the Budget Control Act of 2011 (which just happened), and then pass some jobs and infrastructure bills.

No?

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Response to grahamhgreen (Reply #11)

Tue Jan 1, 2013, 06:02 PM

13. Read more carefully

It has passed congress! It's called the Budget Control Act of 2011!

That's the defense cuts. Where's the infrastructure spending? You know, the part that the House has refused to pass?

How do you plan to get that passed when they've refused for the last two years, and gerrymandering means there's no realistic way to break the Republican majority for many years?

1) Big War ALONE is 60-70% of our budget! Not 40%.

60% of the deficit is caused by the bad economy.

Thus, 40% of the deficit comes from everything else, including defense spending.

Your plan to slash defense spending attacks 40% of our deficit, and makes 60% of our deficit much worse.

2) I would submit that many of those employed were in the process of physically moving the factories overseas.

Well, you'd have to actually provide a source for that. Since it had been many years since a "costly trade deal" had passed.

Additionally, if you think the bad economy is due to offshoring, wouldn't defense spending be better stimulus? It can't be offshored. However, your theoretical wind turbines are likely to be built in China.

3) I think we agree that we are better off shifting our resources from war to infrastructure.

The difference is you're still unable to say how you plan to actually do that. You have to get your plan through the Republican House. That is not going to happen.

The choice is not defense spending or infrastructure spending. The choice is defense spending or no spending. That "no spending" will be extremely bad for our fragile economy.

So the plan is, enact the Budget Control Act of 2011 (which just happened), and then pass some jobs and infrastructure bills.

And as I keep asking you over and over again, how do you do the second part? You know, the part Republicans have explicitly rejected for the last 4 years, and had the power to block for the last 2. They will retain that power for the foreseeable future.

So how, exactly, do you get that done?

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Response to jeff47 (Reply #13)

Tue Jan 1, 2013, 07:49 PM

15. Looks like we might be getting somewhere!

It has passed congress! It's called the Budget Control Act of 2011!

That's the defense cuts. Where's the infrastructure spending? You know, the part that the House has refused to pass?

How do you plan to get that passed when they've refused for the last two years, and gerrymandering means there's no realistic way to break the Republican majority for many years?

You get the money from Big War first, then you HAVE money for infrastructure. You put the Wind turbine factories in districts to get the votes you need to pass the infrastructure bills. It's not rocket science.

1) Big War ALONE is 60-70% of our budget! Not 40%.

60% of the deficit is caused by the bad economy.

Thus, 40% of the deficit comes from everything else, including defense spending.

Your plan to slash defense spending attacks 40% of our deficit, and makes 60% of our deficit much worse.

What this means is if you eliminated our entire national security budget of 1 trillion next year, we would have a 100 billion dollar surplus. It's just math. Obviously we don't need to eliminate the deficit by cutting the entire security state apparatus in one year, but 50% wouldn't hurt. And certainly the 100b/yr in the Budget Control Act is nominal. We'll never get a better chance to cut the big war boondoggle. The deficit was caused by Big War and Tax Cuts.

"Military spending vs. annual deficits, 1981-2010:
(money in Billions)

YEAR MILITARY DEFICIT PCT-OF
---- -------- ---------- ------
1981 157,513 -79,000 199%
1982 185,309 -128,000 145%
1983 209,903 -208,000 101%
1984 227,413 -185,000 123%
1985 252,748 -212,000 119%
1986 273,375 -221,000 124%
1987 281,999 -150,000 188%
1988 290,361 -155,000 187%
1989 303,559 -153,000 198%
1990 299,331 -221,000 135%
1991 273,292 -269,000 102%
1992 298,350 -290,000 103%
1993 291,086 -255,000 114%
1994 281,642 -203,000 139%
1995 272,066 -164,000 166%
1996 265,763 -107,000 248%
1997 270,505 -22,000 1300% (*)
1998 268,207 69,000 *
1999 274,785 126,000 *
2000 294,394 128,000 *
2001 304,759 -128,000 238%
2002 348,482 -158,000 221%
2003 404,778 -378,000 107%
2004 455,847 -413,000 104%
2005 495,326 -318,000 156%
2006 521,840 -248,000 210%
2007 552,568 -162,000 341%
2008 607,263 -455,000 133%
2009 675,084 -1,416,000 48%
2010 689,000 -1,294,000 53%

There is an extremely high correlation between US military spending, and US federal budget deficits and debt. Structural US debt (public) increased about $11 Trillion from 1981-2010; total military spending for the same timeframe is about $10 Trillion. Our military spending is *THE* reason we are having problems with our national debt.

Point being, if you want a strong military, you darned well need to pay for it - with much, much higher taxes. If you want less government debt, you're going to have to cut military spending.

It's also easy to see the run-up in military spending since 2001. It's a good indicator of just how much the "war on terror" has cost us as a nation: our military budget has more than doubled over the last 10 years. Did the roughly $2 Trillion spent over the last 10 years above baseline military spending trends buy anything anyone really wanted? Exactly what is that, anyway? " http://www.twitlonger.com/show/ijorf6


2) I would submit that many of those employed were in the process of physically moving the factories overseas.

Well, you'd have to actually provide a source for that. Since it had been many years since a "costly trade deal" had passed.

Additionally, if you think the bad economy is due to offshoring, wouldn't defense spending be better stimulus? It can't be offshored. However, your theoretical wind turbines are likely to be built in China.

Defense is the worst stimulus as the products of defense are useless to society. They blow up, they are gone, they have no additive effect like, say, giving everyone free electric cars would. The point of passing any stimulus is to produce goods here, not in China, you don't pass stimulus without a "buy American" provision, it's a no-brainer.

3) I think we agree that we are better off shifting our resources from war to infrastructure.

The difference is you're still unable to say how you plan to actually do that. You have to get your plan through the Republican House. That is not going to happen.

The choice is not defense spending or infrastructure spending. The choice is defense spending or no spending. That "no spending" will be extremely bad for our fragile economy.

No that is the choice. And the spending money you don't have for things that are not investment in our future with a guaranteed return (such as big war), is foolish. The CBO says, "However, eliminating or reducing the fiscal restraint scheduled to occur next year without imposing comparable restraint in future years would reduce output and income in the longer run relative to what would occur if the scheduled fiscal restraint remained in place. If all current policies were extended for a prolonged period, federal debt held by the public—currently about 70 percent of GDP, its highest mark since 1950—would continue to rise much faster than GDP. Such a path for federal debt could not be sustained indefinitely, and policy changes would be required at some point. The more that debt increased before policies were changed, the greater would be the negative conse- quences.3 Large budget deficits would reduce national saving, thereby curtailing investment in productive capi- tal and diminishing future output and income. Interest payments on the debt would consume a growing share of the federal budget, eventually requiring either higher taxes or a reduction in government benefits and services. In addition, rising debt would increasingly restrict policy- makers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or international crises. Growing debt also would increase the likelihood of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget and the gov- ernment would lose its ability to borrow at affordable rates. Moreover, the longer the necessary adjustments in policies were delayed, the more uncertain individuals and businesses would be about future government policies, and the more drastic the ultimate changes in policy would need to be."

So the plan is, enact the Budget Control Act of 2011 (which just happened), and then pass some jobs and infrastructure bills.

And as I keep asking you over and over again, how do you do the second part? You know, the part Republicans have explicitly rejected for the last 4 years, and had the power to block for the last 2. They will retain that power for the foreseeable future.

So how, exactly, do you get that done?

We only need 17 R congress members to pass a bill. You simply give them stuff they want in exchange for their votes. Like a giant wind turbine factory in their district. It's politics 101. Like this:

http://3.bp.blogspot.com/_HyyDHyAwI6k/SFvjO-Xm2JI/AAAAAAAABRs/Xd4xT_BLnsw/s1600/donkeys+spine.jpg

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Response to grahamhgreen (Reply #15)

Wed Jan 2, 2013, 01:25 AM

16. No, we're not. You are utterly ignoring the problem.

The house will not pay for wind turbines. Period. They were given the opportunity over and over again to do exactly what you propose, and they rejected it.

Over and over again.

So your claim is "This time it will work! Just ignore the last 2 years of the utter failure of my plan".

I'm not willing to ignore that your plan has utterly failed for two years. Not because of defense spending, but because the Republican House does not believe in stimulus spending.

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Response to jeff47 (Reply #16)

Wed Jan 2, 2013, 01:09 PM

17. Dang it! Look at it this way, part one, recouping monies from the boated big war budget

and the Bush tax cuts, is enacted if we had done nothing.

That is not utter failure, that is success of the first part of the plan.

Then, once you free up those funds, there is a different dynamic for passing infrastructure and jobs bills.

We only need 17 R's, and the bill on the floor. There is more than one way to pressure the House.

To me, the entire Fiscal Bluff debate has been Kabuki theater designed to protect the Big War industry from cuts, which is absurd in any deficit debate, since it is 60-70% of the deficit.

Anyway, Happy New Year, looks like we'll wind up somewhere in the middle-right (even though the country is middle-left!), personally I consider it a victory for your point of view! Thanks for the debate!


And here are a couple charts on free trade vs jobs for you:

http://3.bp.blogspot.com/-HpZrVJh8NnU/T1-OpXU6OjI/AAAAAAAAAGI/0zxs_-ICz_g/s640/Manuf+Jobs+and+Trade.jpg

http://1.bp.blogspot.com/-L7WePKA5aU8/T1-VosPfPKI/AAAAAAAAAGQ/RPje-6njL34/s1600/IT+jobs.jpg

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Response to grahamhgreen (Reply #17)

Wed Jan 2, 2013, 01:36 PM

18. No, it's not success

Because those defense cuts mean losing a lot of jobs. You can't replace those jobs because insane Republicans control the House.

Then, once you free up those funds, there is a different dynamic for passing infrastructure and jobs bills.

No, you have a reason to pass more tax cuts. Because insane Republicans control the House.

We only need 17 R's, and the bill on the floor. There is more than one way to pressure the House.

No, you need 218 Republicans, because the insane Republican house leadership follows the Hastert rule except in very extreme cases - this isn't one of those cases.

And you had just as many ways to pressure the House for the last two years. And the insane Republicans that control the House did not respond to such pressure.

To me, the entire Fiscal Bluff debate has been Kabuki theater designed to protect the Big War industry from cuts, which is absurd in any deficit debate, since it is 60-70% of the deficit.

No, it was about tax cuts and low taxes for the wealthy in order to starve social spending.

In addition, money is fungible. No particular dollar of spending is part of the deficit. The combined total of those dollars is the deficit. Someone who wants defense spending can count DoD spending first, and claim all social spending is the source of the deficit.

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Response to jeff47 (Reply #18)

Thu Jan 3, 2013, 01:45 AM

20. What those defense cuts really mean is less dead children, less drone attacks,

less war profiteering, less torture, less lying us into illegal acts of aggression and war, less money into the hands of those that hate American values and want the country to run on a war economy; A police state that feeds off of violence and repression.

That's the beast we need to starve. The war machine. Not the elderly.

IMHO.

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Response to jeff47 (Reply #1)

Wed Jan 2, 2013, 02:55 PM

19. jeff, I hope you're putting the blame for this where it belongs -

corporations.

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Response to grahamhgreen (Original post)

Tue Jan 1, 2013, 03:55 PM

2. Don't forget the subsidies...

Big Oil (just one industry at that) gets billions in free money from our government when they make money hand over fist... Right. Time to end this bullshit once and for all.

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Response to Initech (Reply #2)

Tue Jan 1, 2013, 04:12 PM

6. As well as these other subsidies....

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Response to grahamhgreen (Original post)

Tue Jan 1, 2013, 03:58 PM

3. agreed, 100 percent....

This "deal" is a bad bargain that serves only to give republicans further control over the outcome. I think the country is better off with the full sequester and complete repeal of the Bush tax cuts. For starters.

There is no way other than the sequester that meaningful cuts to military spending will ever occur. THAT'S what I'd like to see drowned in a bathtub-- the MIC!

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Response to grahamhgreen (Original post)

Tue Jan 1, 2013, 03:59 PM

4. Chart Below in support of the OP

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Response to grahamhgreen (Original post)

Tue Jan 1, 2013, 04:14 PM

7. It is also true that this is the time for a blizzard of targeted spending across the nation.

 

Unfortunately, there are far too few progressive/liberal representatives to get anything positive done.
& R

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Response to grahamhgreen (Original post)

Tue Jan 1, 2013, 04:15 PM

8. K&R

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Response to grahamhgreen (Original post)

Tue Jan 1, 2013, 04:30 PM

10. I would rather see taxes raised on the wealthy to pay for defense.

That bloat is stimulus. I don't want to see it just cut, because it pays paychecks. If that bloat money can be diverted to other, more productive investment, I am all for it. Absent that, we should hit up the Republicans to pay for the "extra-super-duper" Defense spending they say we need by ponying up more money from the wealthy.

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Response to gulliver (Reply #10)

Tue Jan 1, 2013, 05:57 PM

12. It's not just paychecks, it's dead children, drone attacks and blowback.

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Response to grahamhgreen (Reply #12)

Tue Jan 1, 2013, 07:49 PM

14. Talking about the bloat part.

Drones would be among the last things to go, whatever your opinion of them.

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