Spending like drunken sailors

[PostmodernProphet]

and if people started making money again so that tax revenue wouldn't collapse like it has.

in the real world, when your revenue goes down it's a signal to spend less, not more......

 

[Cancel 2018. 3]

There haven't really been many intentional increases in spending programs in the past few years, besides TARP and the Stimulus. So almost all of the growth is due to the growing population of elderly drawing on SS and Medicaid, the fact that medical prices have been rising at several times the rate of inflation for the past few years, the huge increase in laid off workers who need unemployment insurance, and a dramatic decline in revenue due to the recession.

What do you propose we do? Cut SS? Good luck. How are we supposed to reduce medicare and medicaid prices? We can't just put a cap on it. That's like trying to balance your budget by only sending the power company part of the power bill. Medicare and medicaid already pay below market rates, and it's eventually going to get to a point where doctors have to stop accepting those patients. Even to the extent that such a policy would be successful (in the years before doctors simply give up and stop accepting the patients), it's main effect would simply be to cause them to raise prices for other patients. Unemployment is going to go down with time, and revenue will as well. However, to seriously attempt to balance the budget at the current moment would be insanity.

do have a source for - almost all of the growth is due to the growing population of elderly drawing on SS and Medicaid

how about we stop raiding SS? i never said cut SS, nor have i ever advocated it. medicare and medicaid can be reducted. mott and i talked about this the other day. streamline them. there is so much waste at every level and so much bureaucracy it is ludicrious. i don't recall anyone ever taking a look at our healthcare in terms of streamlining it. all i've seen is either; 1. cut funds; or 2. create a whole new bureaucracy that, i obama, bless you with.

 

[Cancel 2018. 3]

in the real world, when your revenue goes down it's a signal to spend less, not more......

not always. many businesses borrow more money and try various strategies, like expanding or investing in R&D. if the donald lived by this method everytime, he would be broke.

 

[Bonestorm]

Fair enough. Valid point.

So we see you used the anomaly of 2000. Might we have cherry picked the high? Me thinks you did.

The average of the tech boom period of 1990-2000 was 18.68. So you selected the outlier. Imagine that. I should have expected as much.

In 2008 it was back to about the average. Just under at 18.5.

Of course I picked the high, it was a "wouldn't it be nice if . . ." post.

Can't help but notice a couple other things from those tables...

1) Corporate income tax as a percentage of GDP went UP under Bush to the highest levels since the 1970s and we ended up with a shitty economy... just like back then. (table F4)

I'm not sure what point you're trying to make here. Of course corporate income taxes were historically high. Corporate profits were historically high. Here's a chart of corporate taxes as a percentage of corporate profits before taxation:

So the idea that corporate taxes were high under Bush is ridiculous. The top marginal corporate tax rate may be high, but corporations are pretty good at not paying it.

2) As we came to the peak of revenue as a percentage of GDP, OUTLAYS as a percent of GDP were coming down to their LOWEST levels of that period 1970-2009. Hmmm... imagine that.

That's what you get have relatively high GDP as a result of prolonged growth, relatively low mandatory spending and several years of significant defense cuts (in 1990 defense was 5.2% of GDP, in 2000 3% of GDP).

I wonder what would happen to our economy today if we reduced taxation on corporations (encouraging job growth) and lowered our federal spending as a percentage of GDP (means future tax rates won't have to be increased as much). hmmm... I bet that wouldn't have any positive effect though, because we all know the government's only way out of their spending problem is to spend more.

Corporate taxation is not dragging down the economy. Lowering government spending will drag the economy further down. The problem is high unemployment and low aggregate demand. Increased government spending helps to fix that, particularly when the government can borrow money for historically low interest rates.

And, frankly, the idea that potential tax rate increases in the future is a bigger problem for the economy that the very real prolonged period of high unemployment right now, is asinine.

 

[Cancel 2016.2]

Of course I picked the high, it was a "wouldn't it be nice if . . ." post.

I'm not sure what point you're trying to make here. Of course corporate income taxes were historically high. Corporate profits were historically high. Here's a chart of corporate taxes as a percentage of corporate profits before taxation:

You really aren't too bright are ya? Corporate taxes as a PERCENTAGE OF GDP were at their all time high.

So the idea that corporate taxes were high under Bush is ridiculous. The top marginal corporate tax rate may be high, but corporations are pretty good at not paying it.

Corporate tax revenue as PERCENTAGE OF GDP was at an all time high.

That's what you get have relatively high GDP as a result of prolonged growth, relatively low mandatory spending and several years of significant defense cuts (in 1990 defense was 5.2% of GDP, in 2000 3% of GDP).

Please link us to where you are getting your data. Thanks.

Corporate taxation is not dragging down the economy. Lowering government spending will drag the economy further down. The problem is high unemployment and low aggregate demand. Increased government spending helps to fix that, particularly when the government can borrow money for historically low interest rates.

LMAO... no, it does not. Taking more money from the future to spend today does not help. It adds to the future tax burden that corporations KNOW you are going to stick to THEM and the 'wealthy'.... you know... the actual JOB creators.

LMAO... you are fixated on the borrowing at low interest rates. Let me guess, you max out your credit cards when you get the 0% financing for six months? What happens at the end of the six months if no one will let you have 0% again and you don't have the cash to pay off the balance?

And, frankly, the idea that potential tax rate increases in the future is a bigger problem for the economy that the very real prolonged period of high unemployment right now, is asinine.

Yet when you talk to business leaders, with the uncertainty of the future tax code and future regulations... Government IS the biggest concern.

Four straight years of TRILLION+ deficits has done what for the economy Dung? how has that excessive spending helped jobs dung? Are we better off or worse off that we were when Obama took office? Are things projected to get better or worse over the next six-nine months?

 

[Bonestorm]

You really aren't too bright are ya? Corporate taxes as a PERCENTAGE OF GDP were at their all time high.



Corporate tax revenue as PERCENTAGE OF GDP was at an all time high.

Sadly, no:

And again, corporate profits were at historic highs in the 2000s. Here are corporate after tax profits:

Please link us to where you are getting your data. Thanks.

I already gave you the link. It's in the same series of tables that I linked to previously.

LMAO... no, it does not. Taking more money from the future to spend today does not help. It adds to the future tax burden that corporations KNOW you are going to stick to THEM and the 'wealthy'.... you know... the actual JOB creators.

On this we disagree.

LMAO... you are fixated on the borrowing at low interest rates. Let me guess, you max out your credit cards when you get the 0% financing for six months? What happens at the end of the six months if no one will let you have 0% again and you don't have the cash to pay off the balance?

The comparison between an individual and the world's largest economy is not a good one.

Yet when you talk to business leaders, with the uncertainty of the future tax code and future regulations... Government IS the biggest concern.

Four straight years of TRILLION+ deficits has done what for the economy Dung? how has that excessive spending helped jobs dung? Are we better off or worse off that we were when Obama took office? Are things projected to get better or worse over the next six-nine months?

I'm not going top bother arguing these things with you again. We disagree. I'm OK with that.

 

[FUCK THE POLICE]

in the real world, when your revenue goes down it's a signal to spend less, not more......

While that's a sound strategy for individuals, that doesn't make it a sound strategy for society itself. This is the compositional fallacy. A whole is not bound by the rules of it's members. That's like saying that, since a wall is composed of bricks which are all 6" x 2" in dimension, the wall itself is necessarily 6" x 2".

Cutting spending can make the overall problem worse, harming overall growth in the long term. It's also not good government policy to overreact to short term variations in revenue like this either. That's why we, for instance, apportion social security checks based on the need for them. We don't tie the size of SS checks to tax revenue from the payroll tax; the sustainability of the system is a long-term issue, of course, but we don't want the income of seniors jumping around like that in the short term.

 

[FUCK THE POLICE]

do have a source for - almost all of the growth is due to the growing population of elderly drawing on SS and Medicaid

Well, SS and medicare/medicaid are really long term issues. The primary growth has probably been in unemployment insurance and military, SS and especially Medicare/Medicaid be long-term issues. You can blame that on Obama, I guess. However, I think the UU extensions were necessary and a huge reason we don't see Obamavilles cropping up, and the rise in unemployment itself wasn't his fault. And I'd probably say that the biggest issue overall has been the reduction in revenue. But all of it piled on top of each other is what creates the problem.

Anyway, here's a source that states that spending on this programs has indeed been going up dramatically:

how about we stop raiding SS? i never said cut SS, nor have i ever advocated it. medicare and medicaid can be reducted. mott and i talked about this the other day. streamline them. there is so much waste at every level and so much bureaucracy it is ludicrious. i don't recall anyone ever taking a look at our healthcare in terms of streamlining it. all i've seen is either; 1. cut funds; or 2. create a whole new bureaucracy that, i obama, bless you with.

Yes, if it's possible to effectively streamline the bureaucracy, we obviously should. That's a no-brainer. However, even a medicare program that was totally efficient and had no overhead at all would be hideously expensive.