The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: DocCyane on November 28, 2012, 05:45:58 AM
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I know just enough about the fiscal cliff to understand there's no good way out of our debt situation. Spending must decrease and taxes must increase. It's just a matter of how much, for whom and when.
As a single person with no kids nor house, I already get hit heavily on taxes. They say we could expect to pay another $3k a year, which would greatly impact my ability to save.
Does anyone have thoughts on the situation? Are you preparing to hand over more of your money in taxes?
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My opinion is that it's unlikely that we will be actually affected by the tax increases, at least for very long. The politicians will delay for as long as possible to haggle over every little thing to get things as much their way as possible, but in the end they will almost surely renew most of the tax cuts (at least the ones that affect the middle class) that are expiring. The specifics on how much you might end up paying extra on taxes varies depending on your situation, wikipedia has a simple chart that should give you a general idea: http://en.wikipedia.org/wiki/United_States_fiscal_cliff#Effects_of_tax_increases
If you are making less that $50k then the tax increases would not affect you very much. If you are making more than $50k then there probably is a lot of room in your life to cut back on things you don't truly need and be happier as a result.
One of the things I really like about MrMoneyMustache over other financial websites is that his philosophy is very flexible and drives me personally to improve my situation in ways I had not considered before. Living below your means gives you an incredible amount of flexibility to handle whatever gets thrown your way, be it additional taxes or anything else. That flexibility translates directly into greater security and greater peace of mind. While I think that the "fiscal cliff" will be a non-issue a year from now, I know I'll be okay regardless of what happens.
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Most of the tax increases are for households making over 250k a year, or singles making over 200k per year (aside from the issue of why a married couple only gets to make 50k more than the single person, which annoys me, we are still under this threshold, as are most people). What's most likely to hit people under that threshold is the expiration of the 2% payroll tax cut, so I do expect my SS deductions to increase again next year. Other than that, a few months back I had some extra to invest, which I put into muni bonds instead of piling more into dividend stocks. I think that was a good move because others seem to be concerned about rising taxes on dividends, so now even though my S&P 500 fund is down, oddly enough the capital gains (!) in my muni bond fund are offsetting those losses right now.
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To be honest, living a fairly mustachian lifestyle (though I could always be better-- I should probably be biking to work more and I do live in a high-cost housing market) and putting away ~65% of my takehome pay, I am salivating at the thought of fiscal cliff chaos, though only short term. I hope that the two parties manage to bumble and argue their way right to the precipice, or even off of it, only averting disaster at the last second, so that I can maximize my benefit as I cram every penny I can scrounge up into the market. I am actually trying to up my timed investments for the rest of the year with every spare penny I can find. For the long term investor, the weak willed and fearful are providing us with a wonderful buying opportunity.
Edit: The above obviously only pertains to the short term uncertainty about the Fiscal Cliff. I personally think a deal will be reached that leaves middle class tax rates at nominally the same level. But for me, the more eleventh hour that deal, the better.
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Most of the tax increases are for households making over 250k a year, or singles making over 200k per year (aside from the issue of why a married couple only gets to make 50k more than the single person, which annoys me, we are still under this threshold, as are most people).
Isn't that what "married filing separately" is for?
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Isn't that what "married filing separately" is for?
I'm not sure that if it works that way or not, but I do know that when I first got married, I discovered that there were a lot of deductions you can't take unless you file jointly (student loans interest, mortgage interest, etc.).
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Being in the defense industry, this sequestration shenanigans really scares me. Might be time for a new career...
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Isn't that what "married filing separately" is for?
I'm not sure that if it works that way or not, but I do know that when I first got married, I discovered that there were a lot of deductions you can't take unless you file jointly (student loans interest, mortgage interest, etc.).
Filing separately is usually for divorce/separation situations and when spouses are trying to keep their tax liabilities separate. Limits are generally the same but there are lower deduction/phase out levels when filing separately. Generally if you are married filing separately is not the way to go.
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Being in the defense industry, this sequestration shenanigans really scares me. Might be time for a new career...
I don't think so, defense isn't going anywhere....although you may need to adjust your expectations for income and benefits a bit.
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Being in the defense industry, this sequestration shenanigans really scares me. Might be time for a new career...
I don't think so, defense isn't going anywhere....although you may need to adjust your expectations for income and benefits a bit.
I think you'd be surprised how much the prospect of a $600B cut will scare off new contracts and give the possibility for job layoffs. It's been a weird setting here for the past 6 months.
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Does anyone have thoughts on the situation? Are you preparing to hand over more of your money in taxes?
I think a deal will be hammered out before the end of the year or shortly after. There will be a lot of hemming and hawing and some wild fluctuations in the market. The market starting to tank might actually force a deal to finalize. Then I think everything will more or less stabilize for the next year or so.
I do expect to hand over a good bit more in taxes, an additional 5-15% of my income depending on how deductions go. Not terribly concerned as I'm saving well above that. What's more disconcerting is that this really won't address the underlying budget concerns. I can't imagine much more than a tip of the hat in terms of tax increases and spending cuts. We'll still be racking up major deficits and have massive liabilities for ever increasing entitlement spending. At some point, 10+ years probably, it's going to become mathematically impossible to make the minimum interest payments on our debt, and that interest rate on new bonds is going to have to go way up as we get less and less stable. The solutions out of that are much higher taxes, higher inflation through printing more money or serious cuts to entitlement.
Politics aside, I think we can all agree that there will have to be some pretty drastic changes in the next few years or we're in serious doodoo.
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Politics aside, I think we can all agree that there will have to be some pretty drastic changes in the next few years or we're in serious doodoo.
Unfortunately I don't think this is the case. We can pull a Greece or Japan and milk things another decade until we are borrowing 200% of GDP and run off a much bigger cliff...
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Politics aside, I think we can all agree that there will have to be some pretty drastic changes in the next few years or we're in serious doodoo.
Unfortunately I don't think this is the case. We can pull a Greece or Japan and milk things another decade until we are borrowing 200% of GDP and run off a much bigger cliff...
Guess it depends how serious doodoo is. I'd consider 25% unemployment or 2 decades of contraction and sluggish growth doodoo. You're right that we could still be solvent in 10 years time, possibly a bit longer.
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The cliff will be temporarily solved, which will result in delaying the inevtible and ensuring further uncertainty in the markets and overall economy. If they raise taxes or cut spending or do nothing and call it long term fine then everybody can adjust and manage to the new norm, but what has been the problem and will be the problem is that nobody can manage to absolute uncertainty every 6-12 months - that is the main issue. Unfortunately the dopes in DC aren't bright enought to screw in a light bulb so if nothing else plan for more uncertainty.
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I've stopped paying attention to this kind of stuff for the most part. It seems like there is always some "big crisis" or catastrophe looming, and the media and politicians talk, and talk, and talk about it and then it just "gets fixed" and everything stays the same. Remember the debt ceiling thing?
After the "Fiscal cliff" (who names these crises anyway?) thing has come and gone, I guaranty some other thing will pop up that is super urgent.
Well said.
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I've stopped paying attention to this kind of stuff for the most part. It seems like there is always some "big crisis" or catastrophe looming, and the media and politicians talk, and talk, and talk about it and then it just "gets fixed" and everything stays the same. Remember the debt ceiling thing?
After the "Fiscal cliff" (who names these crises anyway?) thing has come and gone, I guaranty some other thing will pop up that is super urgent.
Well lets be clear though that the "Fiscal Cliff" was the result of failed negotiations on the "Debt Ceiling" so nothing changed or got fixed and it only resulted in continued uncertainty.
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Isn't that what "married filing separately" is for?
I'm not sure that if it works that way or not, but I do know that when I first got married, I discovered that there were a lot of deductions you can't take unless you file jointly (student loans interest, mortgage interest, etc.).
Don't really know anything about availability of deductions, but the "penalty" is part of the brackets itself, though only if you're at least at the upper part of the 25% bracket as singles (and then it grows with income). For example, for a couple with $80k each of taxable income and standard deductions, as singles they don't break into the 28% bracket, but as a married couple $17.3k of their income is taxed at 28% instead of 25%. Hurray for a tax system that dis-incentivize marriage.
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Hurray for a tax system that dis-incentivize marriage.
It is a dis-incentive for couples where both are earning similar amounts. For couples where one is earning significantly more income than the other (e.g. one is a stay-at-home parent), it's a big incentive to get married.
I know a guy at work who played the system pretty well - he and his girlfriend put off their marriage for years while they were both working high-paying jobs, and then when they decided to start having kids and she would stay home with them they got married. They saved literally tens of thousands in taxes each year that way.
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Hurray for a tax system that dis-incentivize marriage.
It is a dis-incentive for couples where both are earning similar amounts. For couples where one is earning significantly more income than the other (e.g. one is a stay-at-home parent), it's a big incentive to get married.
I know a guy at work who played the system pretty well - he and his girlfriend put off their marriage for years while they were both working high-paying jobs, and then when they decided to start having kids and she would stay home with them they got married. They saved literally tens of thousands in taxes each year that way.
Yeah, I really should have thought about this more before we decided to get married - we make about the same income and are now in the 28% bracket. Boo. I sometimes joke that we should think about getting a divorce for tax reasons.
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Don't really know anything about availability of deductions, but the "penalty" is part of the brackets itself, though only if you're at least at the upper part of the 25% bracket as singles (and then it grows with income). For example, for a couple with $80k each of taxable income and standard deductions, as singles they don't break into the 28% bracket, but as a married couple $17.3k of their income is taxed at 28% instead of 25%. Hurray for a tax system that dis-incentivize marriage.
I wonder if they'll re-design the tax code now that traditional gender rules have evolved somewhat?
As for the fiscal cliff, totally agree with tooqk4u22 that it's the roller-coaster uncertainty that's such a problem for the markets. We saw it last summer with the debt ceiling, and it continues...
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I imagine I have a poor understanding of economics and investing compared to some of the very informed people on here, but whenever I hear of the fiscal cliff, I always think of this article by MMM
http://www.mrmoneymustache.com/2011/08/12/current-events-in-stupidland/
Basically,
"A people who spend so carelessly that they are always within $1000 of doom is going to have a very short-term view of the country’s future. Even a slight change in the price of gasoline, or corn, or other world commodities, or a recession, can send them down in flames."
It seems that everyone wants a quick fix and that is most likely what we will get...followed by another quick fix. Personally, I try not to worry and keep saving and trying to acquire new skills. I have shoes on my feet and ample food. Many people around the world do not have that.
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If you are making less that $50k then the tax increases would not affect you very much. If you are making more than $50k then there probably is a lot of room in your life to cut back on things you don't truly need and be happier as a result.
I find this comment repugnant. What do you know about what does and doesn't bring me happiness? It shows a true naivety about what turns the economic handle. I work my booty off to earn over $50,000 so I can enjoy the things I use my money for. My income is a new accomplishment that I have been steadily working towards since I got out of college. I say no to many things so I can spend my time increasing my earning potential both through working more and accumulating additional skills and building a more impressive portfolio while my friends go out and party and booze it up. Now I make more money then a lot of my peers. But I made the sacrifices necessary to do that. I spend the money on the things that I enjoy. I like a new dress I buy it. I'm sure the retail clerk appreciate that I shop at their store helping to keep them employed. I spend a great portion of my disposable income to keep and ride my horse. I'm sure the barn owner appreciates the board and lesson money that keeps her business going. I'm sure the farrier appreciate my business every six weeks. I'm sure the Vet appreciates my business. My disposable income (and every one else's) is what fuels the economic motor. When and if I get hit with higher taxes I'm going to have to find a way to cut back (as will many people) which is going to SHRINK the economy and hurt jobs. Who is going to have to go out of business? When I have to cut back on the farrier visits to every 9 weeks instead of every 6 weeks for example. The cumulative effect off so many people like me cutting back is going to hurt the economy. That means the hardworking farrier and other businesses people like him will have less money of their own.
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As a federal employee I've already endured three years of frozen pay and reduced retirement benefits. The sequester would cut our agency budget by ten to fifteen percent and continue the current hiring freeze.
We have way too much work and not enough people to do it, and an aging workforce that is rapidly diminishing due to retirements. Morale is low because of looming additional cuts on top of some hard years. I no longer recommend a career in public service to anyone, just because the current political climate makes it so clear that we are not valued.
Respect is the only incentive for federal employees because you make SO much more money in the private sector. Take away that respect and what's left to keep even more people jumping ship?
The current divided Congress already controls what happens to your tax rates. How would you feel if they also
controlled your salary? Here's a hint; they don't care how awesome you are at your job.
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I work my booty off to earn over $50,000 so I can enjoy the things I use my money for.
I think you got off the internet at the wrong station. Complainypants and consumerism are much further down the line.
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If you are making less that $50k then the tax increases would not affect you very much. If you are making more than $50k then there probably is a lot of room in your life to cut back on things you don't truly need and be happier as a result.
I find this comment repugnant. What do you know about what does and doesn't bring me happiness? It shows a true naivety about what turns the economic handle. I work my booty off to earn over $50,000 so I can enjoy the things I use my money for. My income is a new accomplishment that I have been steadily working towards since I got out of college. I say no to many things so I can spend my time increasing my earning potential both through working more and accumulating additional skills and building a more impressive portfolio while my friends go out and party and booze it up. Now I make more money then a lot of my peers. But I made the sacrifices necessary to do that. I spend the money on the things that I enjoy. I like a new dress I buy it. I'm sure the retail clerk appreciate that I shop at their store helping to keep them employed. I spend a great portion of my disposable income to keep and ride my horse. I'm sure the barn owner appreciates the board and lesson money that keeps her business going. I'm sure the farrier appreciate my business every six weeks. I'm sure the Vet appreciates my business. My disposable income (and every one else's) is what fuels the economic motor. When and if I get hit with higher taxes I'm going to have to find a way to cut back (as will many people) which is going to SHRINK the economy and hurt jobs. Who is going to have to go out of business? When I have to cut back on the farrier visits to every 9 weeks instead of every 6 weeks for example. The cumulative effect off so many people like me cutting back is going to hurt the economy. That means the hardworking farrier and other businesses people like him will have less money of their own.
Blah blah blah, you are some damn sensitive - just kidding. Besides none of the matters because you have transcended entitlement so whatever you have the government is entitled to take to give back to the entitled.
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If you are making less that $50k then the tax increases would not affect you very much. If you are making more than $50k then there probably is a lot of room in your life to cut back on things you don't truly need and be happier as a result.
I find this comment repugnant. What do you know about what does and doesn't bring me happiness? It shows a true naivety about what turns the economic handle. I work my booty off to earn over $50,000 so I can enjoy the things I use my money for. My income is a new accomplishment that I have been steadily working towards since I got out of college. I say no to many things so I can spend my time increasing my earning potential both through working more and accumulating additional skills and building a more impressive portfolio while my friends go out and party and booze it up. Now I make more money then a lot of my peers. But I made the sacrifices necessary to do that. I spend the money on the things that I enjoy. I like a new dress I buy it. I'm sure the retail clerk appreciate that I shop at their store helping to keep them employed. I spend a great portion of my disposable income to keep and ride my horse. I'm sure the barn owner appreciates the board and lesson money that keeps her business going. I'm sure the farrier appreciate my business every six weeks. I'm sure the Vet appreciates my business. My disposable income (and every one else's) is what fuels the economic motor. When and if I get hit with higher taxes I'm going to have to find a way to cut back (as will many people) which is going to SHRINK the economy and hurt jobs. Who is going to have to go out of business? When I have to cut back on the farrier visits to every 9 weeks instead of every 6 weeks for example. The cumulative effect off so many people like me cutting back is going to hurt the economy. That means the hardworking farrier and other businesses people like him will have less money of their own.
I don't know about y'all, but I have a strong urge to cross-post this to the "Antimustachian Wall of Shame and Comedy" subforum.
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If you are making less that $50k then the tax increases would not affect you very much. If you are making more than $50k then there probably is a lot of room in your life to cut back on things you don't truly need and be happier as a result.
I find this comment repugnant. What do you know about what does and doesn't bring me happiness? It shows a true naivety about what turns the economic handle. I work my booty off to earn over $50,000 so I can enjoy the things I use my money for. My income is a new accomplishment that I have been steadily working towards since I got out of college. I say no to many things so I can spend my time increasing my earning potential both through working more and accumulating additional skills and building a more impressive portfolio while my friends go out and party and booze it up. Now I make more money then a lot of my peers. But I made the sacrifices necessary to do that. I spend the money on the things that I enjoy. I like a new dress I buy it. I'm sure the retail clerk appreciate that I shop at their store helping to keep them employed. I spend a great portion of my disposable income to keep and ride my horse. I'm sure the barn owner appreciates the board and lesson money that keeps her business going. I'm sure the farrier appreciate my business every six weeks. I'm sure the Vet appreciates my business. My disposable income (and every one else's) is what fuels the economic motor. When and if I get hit with higher taxes I'm going to have to find a way to cut back (as will many people) which is going to SHRINK the economy and hurt jobs. Who is going to have to go out of business? When I have to cut back on the farrier visits to every 9 weeks instead of every 6 weeks for example. The cumulative effect off so many people like me cutting back is going to hurt the economy. That means the hardworking farrier and other businesses people like him will have less money of their own.
Ann, is that you? How is Rafalka these days anyway?
http://www.newsy.com/videos/romney-s-dressage-horse-olympic-bound/
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As a federal employee I've already endured three years of frozen pay and reduced retirement benefits. The sequester would cut our agency budget by ten to fifteen percent and continue the current hiring freeze.
We have way too much work and not enough people to do it, and an aging workforce that is rapidly diminishing due to retirements. Morale is low because of looming additional cuts on top of some hard years. I no longer recommend a career in public service to anyone, just because the current political climate makes it so clear that we are not valued.
Respect is the only incentive for federal employees because you make SO much more money in the private sector. Take away that respect and what's left to keep even more people jumping ship?
The current divided Congress already controls what happens to your tax rates. How would you feel if they also
controlled your salary? Here's a hint; they don't care how awesome you are at your job.
Poor baby, here is a thought - then quit. Why haven't you - because government workers are not paid less than private sector equivelants and get ridiculously good benefits - so another 18 years of pay freezes may equalize that.
Yeah and generally they aren't required to be as productive as the private sector - so hiring freezes and attrition for a few more years may help to....I know it seems like your working your ass off but 1 private sector worker could probably accomplish the same amount as a it takes 3-5 government workers to accomplish in a day.
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If you are making less that $50k then the tax increases would not affect you very much. If you are making more than $50k then there probably is a lot of room in your life to cut back on things you don't truly need and be happier as a result.
I find this comment repugnant. What do you know about what does and doesn't bring me happiness? It shows a true naivety about what turns the economic handle. I work my booty off to earn over $50,000 so I can enjoy the things I use my money for. My income is a new accomplishment that I have been steadily working towards since I got out of college. I say no to many things so I can spend my time increasing my earning potential both through working more and accumulating additional skills and building a more impressive portfolio while my friends go out and party and booze it up. Now I make more money then a lot of my peers. But I made the sacrifices necessary to do that. I spend the money on the things that I enjoy. I like a new dress I buy it. I'm sure the retail clerk appreciate that I shop at their store helping to keep them employed. I spend a great portion of my disposable income to keep and ride my horse. I'm sure the barn owner appreciates the board and lesson money that keeps her business going. I'm sure the farrier appreciate my business every six weeks. I'm sure the Vet appreciates my business. My disposable income (and every one else's) is what fuels the economic motor. When and if I get hit with higher taxes I'm going to have to find a way to cut back (as will many people) which is going to SHRINK the economy and hurt jobs. Who is going to have to go out of business? When I have to cut back on the farrier visits to every 9 weeks instead of every 6 weeks for example. The cumulative effect off so many people like me cutting back is going to hurt the economy. That means the hardworking farrier and other businesses people like him will have less money of their own.
Ann, is that you? How is Rafalka these days anyway?
http://www.newsy.com/videos/romney-s-dressage-horse-olympic-bound/
Give me a break, like Ann Romney frequents these boards. I can appreciate being financially smart and living in a way to retire early and still understand how a capitalist economy world works.
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I work my booty off to earn over $50,000 so I can enjoy the things I use my money for.
I think you got off the internet at the wrong station. Complainypants and consumerism are much further down the line.
I fully understand what this board is about. But I don't see how learning how to use my money to it's best advantage, spending less, working towards retirement means I should be FINE with my taxes being raised. When we tighten our belt because we want to save that one thing, when you're forced to tighten it because of higher taxes that's quite another.
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I work my booty off to earn over $50,000 so I can enjoy the things I use my money for.
I think you got off the internet at the wrong station. Complainypants and consumerism are much further down the line.
I fully understand what this board is about. But I don't see how learning how to use my money to it's best advantage, spending less, working towards retirement means I should be FINE with my taxes being raised. When we tighten our belt because we want to save that one thing, when you're forced to tighten it because of higher taxes that's quite another.
Actually, I think the fact that you spend an appreciable amount on keeping, feeding, and maintaining a horse, as well as the fact that you have a "see it-like it-buy it" attitude about dresses is an indication that you could more easily weather a tax increase than most. I'll totally concede that the spending less affects those who are poor in the end, evidence shows that the majority of the rich in this country accumulate without "distributing it into the economy." It's the people living like they're rich who spread the wealth around by foolishly spending. The majority of the rich in this country, by and large, live comparatively spartan lives*, sit on their wealth once they've got it, and don't indulge in expensive hobbies like cars, boats, travel, or horse ownership.
Disclaimer: I'm a liberal who *does* think the wealthy should be paying quite a bit more in taxes, and that their deductions should be limited. Those same taxes could be applied to me, and I would consider it money well spent to keep our system stable. I believe middle class tax rates should remain the same, and that deduction caps should be kept at a level that it affects few or none of the middle class.
*Ref: The Millionaire Next Door. http://www.amazon.com/The-Millionaire-Next-Door-Surprising/dp/1589795474
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I fully understand what this board is about. But I don't see how learning how to use my money to it's best advantage, spending less, working towards retirement means I should be FINE with my taxes being raised.
So you agree that it's important to manage your own finances responsibly, but you object to allowing the government to do the same? You don't see how that's just a teensy bit hypocritical?
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I work my booty off to earn over $50,000 so I can enjoy the things I use my money for.
I think you got off the internet at the wrong station. Complainypants and consumerism are much further down the line.
I fully understand what this board is about. But I don't see how learning how to use my money to it's best advantage, spending less, working towards retirement means I should be FINE with my taxes being raised. When we tighten our belt because we want to save that one thing, when you're forced to tighten it because of higher taxes that's quite another.
No one (myself included) likes having less money to spend / save because the government decided to take a bigger cut. However the point I was trying to make is that if they *do* take a bigger cut, it's not like I'm going to starve or anything.
Mustachianism is not just about learning financial tricks or frugality methods for the express purpose of being able to spend a ton of money down the road. The frugality goes hand-in-hand with the recognition that *things* in general don't make you happy, and that training yourself to value people, skills, and a simple life can pay off in spades of happiness. It's a topic that MrMoneyMustache has addressed several times, but here is one example if you want to see where I'm coming from: http://www.mrmoneymustache.com/2011/10/22/what-is-hedonic-adaptation-and-how-can-it-turn-you-into-a-sukka/
I'm sorry I offended you, I guess I was assuming that the people on the MMM forums at least generally agreed with the MMM philosophy. No offence intended, and I did not mean to be disparaging against people who make over $50k and choose to spend it. I also make over $50k and lead what many people would consider to be a very comfortable lifestyle, but this blog has woken me up to the possibilities of happiness and self-betterment that are unrelated to how much money you can make or spend.
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I should clarify a little further from my above post: If the argument is that taxing the rich more will affect their spending habits, the fact is that it's (by and large) not true from a statistical point of view. The very wealthy tend to spend less, not more. The fuel of our consumer economy is those in the middle class with out of control spending habits.
If there is a tax increase on the wealthy (those making $250K or more a year), it is on the people who statistically tend to spend *less*, not more.
Those who spend the most actually tend to not be wealthy (and their spending is the reason why) and thus would generally not be the ones with the higher proposed tax rate. Those people can feel free to keep spending unchecked and filling the coffers of the accumulating wealthy.
If one is part of the very small minority of the wealthy who spend their money unchecked, such that a 4-5% tax increase affects their ability to purchase luxuries, this will be a golden opportunity for them to learn how the really rich stay rich-- by modifying their behavior and habits until a bump in the road like 4% on new earnings isn't even a blip on the radar.
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I work my booty off to earn over $50,000 so I can enjoy the things I use my money for.
I think you got off the internet at the wrong station. Complainypants and consumerism are much further down the line.
I fully understand what this board is about. But I don't see how learning how to use my money to it's best advantage, spending less, working towards retirement means I should be FINE with my taxes being raised. When we tighten our belt because we want to save that one thing, when you're forced to tighten it because of higher taxes that's quite another.
+1
Actually, I think the fact that you spend an appreciable amount on keeping, feeding, and maintaining a horse, as well as the fact that you have a "see it-like it-buy it" attitude about dresses is an indication that you could more easily weather a tax increase than most.
Don't recall spending being completely banned by the MMM blog/forum, please correct me if I am wrong. And besides because she can buy a dress she should be taxed more....fuck that. Nevermind that MMM has demonstrated that a family, let alone an individual, can live reasonably well evan at the poverty line. So your argument is a bit disingenuous.
Disclaimer: I'm a liberal who *does* think the wealthy should be paying quite a bit more in taxes, and that their deductions should be limited. Those same taxes could be applied to me, and I would consider it money well spent to keep our system stable. I believe middle class tax rates should remain the same, and that deduction caps should be kept at a level that it affects few or none of the middle class.
I don't think you really needed a disclaimer to state your side. Clearly I don't need a disclaimer to say that I am not on your side....that said I don't think taxes should go up but I do think they can. I also think spending needs to go down - remember the fight going on right now is that liberals want taxes to go up on the wealthy (i.e. middle class and above) and are offering up zero spending cuts. Republicans are now conceding some of this but want to see cuts.
And lets be clear about what both sides considered to be cuts - cutting things out of the growth of future spending. Example if budget today = $1 trillion.....projected budget 10 years from now = $3 trillion then cut so that budget 10 years from now is $2 trillion.....wow they just CUT the budget by a third by their rules.
I SAY NO....a cut would be taking the budget today and making it $900 billion.....point is democrats can't even concede to making cuts that aren't even cuts.
My position is to simplify the tax code, raise revenue with a combination of higher rates and the simplification, and actual cuts.
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I fully understand what this board is about. But I don't see how learning how to use my money to it's best advantage, spending less, working towards retirement means I should be FINE with my taxes being raised.
So you agree that it's important to manage your own finances responsibly, but you object to allowing the government to do the same? You don't see how that's just a teensy bit hypocritical?
The difference is the government spends like a drunk sailor and is completely mismanaging its finances by putting itself into a debt emergency. If anything, the government is is completely anti-MMM.
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Mustachianism is not just about learning financial tricks or frugality methods for the express purpose of being able to spend a ton of money down the road. The frugality goes hand-in-hand with the recognition that *things* in general don't make you happy, and that training yourself to value people, skills, and a simple life can pay off in spades of happiness. It's a topic that MrMoneyMustache has addressed several times, but here is one example if you want to see where I'm coming from: http://www.mrmoneymustache.com/2011/10/22/what-is-hedonic-adaptation-and-how-can-it-turn-you-into-a-sukka/
I'm sorry I offended you, I guess I was assuming that the people on the MMM forums at least generally agreed with the MMM philosophy. No offence intended, and I did not mean to be disparaging against people who make over $50k and choose to spend it. I also make over $50k and lead what many people would consider to be a very comfortable lifestyle, but this blog has woken me up to the possibilities of happiness and self-betterment that are unrelated to how much money you can make or spend.
Yes and no. Buying one dress after another for no reason is anti-mmm, but buying one that you really love, will use many times is not. For crying out loud MMM has a $400k house and plenty of stuff. So yes buying things for the sake of buying things will not make you happy, but deprivation is not the philosphy either.
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Actually, I think the fact that you spend an appreciable amount on keeping, feeding, and maintaining a horse, as well as the fact that you have a "see it-like it-buy it" attitude about dresses is an indication that you could more easily weather a tax increase than most.
Don't recall spending being completely banned by the MMM blog/forum, please correct me if I am wrong. And besides because she can buy a dress she should be taxed more....fuck that. Nevermind that MMM has demonstrated that a family, let alone an individual, can live reasonably well evan at the poverty line. So your argument is a bit disingenuous.
Actually, that wasn't my point at all-- My point is that those at an income level that could be affected by the proposed tax increases, those making $250K or higher PER YEAR (decidedly not middle class), the statistical truth is that those people tend to spend less, not more. The reality is that those driving the "economic engine" with large spending are the real middle class-- under $250K/year in income, and very little savings. An increase in taxes on those who tend to spend less, and need less, is a blip to them. Remember, it's a tax on INCOME, not on wealth. Government agents are not going to break into your house and cart off anything you've already accumulated.
Since those who really fuel our economy with spending are those which *neither* side intends to increase taxes on, the net economic result will be little to none.
If you haven't read The Millionaire Next Door, I highly recommend it. US Millionaires tend to drive old, used cars, drink Budweiser when they drink at all, wear a $30 Timex, and spend very, very little. In other words, they're mustachians.
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Actually, that wasn't my point at all-- My point is that those at an income level that could be affected by the proposed tax increases, those making $250K or higher PER YEAR (decidedly not middle class), the statistical truth is that those people tend to spend less, not more. The reality is that those driving the "economic engine" with large spending are the real middle class-- under $250K/year in income, and very little savings. An increase in taxes on those who tend to spend less, and need less, is a blip to them. Remember, it's a tax on INCOME, not on wealth. Government agents are not going to break into your house and cart off anything you've already accumulated.
Since those who really fuel our economy with spending are those which *neither* side intends to increase taxes on, the net economic result will be little to none.
If you haven't read The Millionaire Next Door, I highly recommend it. US Millionaires tend to drive old, used cars, drink Budweiser when they drink at all, wear a $30 Timex, and spend very, very little. In other words, they're mustachians.
I agree with this premise that wealth do not spend more and more...but this is the part is was resonding to ......the fact that you have a "see it-like it-buy it" attitude about dresses is an indication that you could more easily weather a tax increase than most.. Although I disagree on the $250k threshold, it may not be decidedly middle class but it is definitely not wealthy - especially in high COL areas.
And I have read the millionaire next door and one part is they live a lower lifestyle then would be expected as you indicate but the other part is they are dispraportiantely willing to take risk by investing and being entreprenuers. I don't beleive that they will stop investing overall but how they do it may change - it is all about risk vs. return and no sense taking the risk if the return is not there.
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I don't beleive that they will stop investing overall but how they do it may change - it is all about risk vs. return and no sense taking the risk if the return is not there.
You've been repeating this one a lot lately. Why would the return not be there? Corporations get butthurt about taxes and stop producing things of value? Foreign governments stop investing in their nations' needs and don't issue any more bonds?
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I fully understand what this board is about. But I don't see how learning how to use my money to it's best advantage, spending less, working towards retirement means I should be FINE with my taxes being raised.
There are people in this world who aren't as fortunate as you. It's just money, and you would be perfectly fine spending a little less of yours. I might not clear $14,000 this year and I have room in my budget for wind power, taxes, and even a little bit of charitable giving. Maybe instead of bitching that you can only make it to the farrier five times in 2013 instead of eight, you could try and take the big picture view and realize that taxes have an important societal function and are a necessary evil that prolongs our civilization and allows our prosperity? Or recognize that for your modest tax payment (dramatically lower than in any similar nation, of course), you get to participate in a dynamic and exciting society with unbelievable extravagance all around you?
Nah. Much easier to complain.
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Anyone that thinks more taxes will solve anything should work for a large government agency for a year. Money is not the problem. Waste, mismanagement and fraud are the problems. We need less government, not more taxes. I would be fine with paying more taxes if doing so would actually accomplish anything. It would not.
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Fiscal cliff? More like fiscal curb. And nobody ever got hurt falling off a curb.
Like my boy Flav likes to say, don't believe the media and political hype.
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Fiscal cliff? More like fiscal curb. And nobody ever got hurt falling off a curb.
Like my boy Flav likes to say, don't believe the media and political hype.
My grandmother and my mother-in-law both were injured falling from crumbling curbs. It's costly and painful to have aged bones reset and rehabilitated. My MIL actually lost her ability to play the piano from her injury and my grandmother could no longer play her guitar or crochet.
Repercussions from failure to act on this "Fiscal Cliff" will hurt the vulnerable. We here may be snug in our financial preparedness and knowledge but we should not ignore the life changing potential for many other people out there.
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Repercussions from failure to act on this "Fiscal Cliff" will hurt the vulnerable. We here may be snug in our financial preparedness and knowledge but we should not ignore the life changing potential for many other people out there.
I like the metaphor, but I don't think that you've really demonstrated that that's the case. Besides tentative, uneasy asset pricing for investors, how is this affecting the general population?
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Besides tentative, uneasy asset pricing for investors, how is this affecting the general population?
If a deal is not reached on December 31, 2012, payroll companies will be legally required to deduct based on the then-expired tax cuts. So it will affect the general population because . . . no more payroll tax holiday (SS back to 6.2% for employees) and all Bush tax cuts are no longer applicable = much lower paychecks on January 1, 2013.
Given how Washington likes to do their negotiations that is a very real possibility and one that I bet most people don't realize.
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So I should be concerned about a colossal 2% tax increase crushing the life out of blue-collar America?
Uh-huh.
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So I should be concerned about a colossal 2% tax increase crushing the life out of blue-collar America?
No, it's not colossal, but that wasn't your question. The bigger difference would be the complete expiration of Bush era tax cuts, which adjust the federal withholding tax table. It won't affect those who live below their means, but it very well might affect the insane amount of Americans who live paycheck to paycheck and don't realize the guaranteed paycheck reduction if a solution is not found in time.
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Yes, it was my question. Kolorado said that repercussions would hurt the vulnerable and that the cuts would have life-changing effects. I quoted those statements in the same post as my question. Literally the same post -- they're like 30 pixels apart!
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Or you could realize that I was simply stating how a failure to reach any kind of consensus would affect the general population. There is no need to get all snippy about it.
Your question = Quote from: grantmeaname on Today at 09:12:38 AM
Besides tentative, uneasy asset pricing for investors, how is this affecting the general population?
My answer = How it affects the general population.
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It's not a problem with your post, and that's a good and specific example of the affects. What I was asking for in response to kolorado's post was a reason that it was absolutely significant, though, and that's what everyone seems to be unable to provide.
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Anyone that thinks more taxes will solve anything should work for a large government agency for a year. Money is not the problem. Waste, mismanagement and fraud are the problems. We need less government, not more taxes. I would be fine with paying more taxes if doing so would actually accomplish anything. It would not.
The way you describe it, taxes aren't the issue. Government is. If they spent the money better, then more taxes would be fine.
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Government does not need more money, at any level. Government is probably the least "mustachian" enterprise in existence. The people in government need to be more efficient and frugal. I would be fine with paying more in taxes if a need could be demonstrated, after every effort to operate efficiently was made.
Anyone that thinks money, i.e. taxes, is the answer should be forced to work in a couple of agencies to see the waste and mismanagement in action. It's sickening to see the waste of resources, which if properly used, might actually accomplish something.
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It's just super that those are your political beliefs, but the thing about living in a democracy is that solutions that only consider the wishes of one of the many groups at the table are infeasible. So when we're discussing what actual legislators with limited political capital should be doing about fiscal reform, you saying "government is bad because I saw it once!" and vehemently denying any solution but dramatic spending cuts is really not a workable model for moving the nation forward.
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The nation is not "moving forward." It is a sinking ship.
Tax the producers enough, and they either leave or stop producing. There are lots of historical examples of this, some of which I'm sure you will run into in your studies.
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The nation is not "moving forward." It is a sinking ship.
Tax the producers enough, and they either leave or stop producing. There are lots of historical examples of this, some of which I'm sure you will run into in your studies.
On the contrary, some of the most prosperous periods in the country's history coincide with the periods of highest taxation (the post-WWII era and the 80s and 90s)
http://taxfoundation.org/article/us-federal-individual-income-tax-rates-history-1913-2011-nominal-and-inflation-adjusted-brackets
The highest tax rate in the early 50s was over 90%. In the mid 80s it was over 50%. In the 90s it was the 39% the democrats propose to allow it to revert to in 2013. The country was obscenely productive and prosperous at those times, and we're *still* talking about allowing it to go back to a tax rate that is lower than most of the last century. People who think a 39% top tax rate will wreck the economy need to get some perspective.
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The nation is not "moving forward." It is a sinking ship.
"moving forward" was not a comment on the current state of affairs but on the goal of the fiscal negotiations. So are you nihilistic about any plan being a possible solution, then?
Tax the producers enough, and they either leave or stop producing. There are lots of historical examples of this, some of which I'm sure you will run into in your studies.
So many that you could even name one if you tried, I bet.
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The folks in Washington may come to some agreement that kicks the can down the road a few years. They lack the ability and interest to come up with any real solutions.
The historical tax rates are meaningless out of context. What did people actually pay as a percentage of their income? And not just in income tax. What was the total tax burden? As someone that actually remembers the 1950's, I can tell you there was a heck of a lot less government back then.
As for educating Grant, well, that's his job, not mine.
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The historical tax rates are meaningless out of context.
So provide a more meaningful number that tells a different story. Wikipedia's full of them.
What did people actually pay as a percentage of their income? And not just in income tax. What was the total tax burden?
Well, even the lowest bracket in the fifties was at least 26% every year, so it's hard to imagine the total tax burden being lower. But I guess you were there, so you already knew that.
As someone that actually remembers the 1950's, I can tell you there was a heck of a lot less government back then.
Yeah, the 30% of GDP that the government spent in the mid-1950s is dramatically different from the 34% that the government was spending in the 2000s until the 2008 recession hit.
(http://upload.wikimedia.org/wikipedia/en/d/d9/Us_gov_spending_history_1902_2010.png)
As for educating Grant, well, that's his job, not mine.
It's good to see that your position has any substance behind it, and even better to see that you've managed to turn this into an ad hominem rather than try and participate productively in the discussion.
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Tax the producers enough, and they either leave or stop producing. There are lots of historical examples of this, some of which I'm sure you will run into in your studies.
So many that you could even name one if you tried, I bet.
[/quote]
Actually yes. This one quite recently. 60% of those making more than a million pounds a year disappeared from Britain it introduced a 50% tax rate on million pound incomes from 2010 to 2011, to the point that less tax revenue was actually collected than before the high rate was introduced. http://online.wsj.com/article/SB10001424127887323751104578148820012847656.html?mod=googlenews_wsj
We can argue whether this was due to them leaving the country, working less, taking steps to avoid or evade taxes or a poor economy in general reducing returns. But the UK GDP has been recovering since 2009 and the richest usually tend to recover faster than the rest of the population, so it seems unlikely that an economy like that could really account for 60% of those making a million pounds disappearing. I'd say it's pretty strong evidence that a big tax hike could be self-defeating. There's probably some optimal rate of taxation but it's very difficult to determine it.
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It must be one of those psychological things that push a lot of people over the edge to finally pull the plug and move out of the country. As an ex-Londoner, I find it baffling that it took anyone that long to skip town with a £1m annual income.
Do I love London as a city? Absolutely.
Would I live there with this sort of money in the bank? Hello no!
Or it could just be that people started paying attention and shuffled money around. Knowing that a lot of wealth in London has connections to foreign countries, people have ways to get creative.
Note that roughly a quarter of Switzerland's population is foreign. There's also Belgium next door, already widely used amongst the rich French to establish residency for a preferred tax rate.
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Don't you see the slope of that curve as somewhat ominous? The federal government is spending a higher percentage of GDP today than at any time since WWII. The parasites in Washington are eventually going to drain every drop of blood out of our economy.
Also, a lot of the current expenditures are not coming from revenues received. Rather, the federal government is relying on cheap and easy credit to borrow and spend. That might be necessary in wartime. It should not be in peacetime. Spend less money and leave the wealth with those that earned it. Looking at who actually pays the bill, a lot of that wealth would stay with you and me, the middle class.
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Don't you see the slope of that curve as somewhat ominous?
The government is certainly not headed the direction I want it to, but it's not like prosperity and high government spending are incompatible: look at Europe, Australia, Canada... Ominous may be too strong a word choice.
Also, a lot of the current expenditures are not coming from revenues received. Rather, the federal government is relying on cheap and easy credit to borrow and spend. That might be necessary in wartime. It should not be in peacetime.
Part of the problem is that government operation and investment are conflated in the way government spending is reported. I think that the government's operating spending shouldn't be much higher now than in better economic times, but when it comes to investment, the government absolutely should be borrowing as much as possible: it can do so for less than inflation! It's better than free -- the time value of money is negative! That's a no brainer.
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In response to Grant, I was specifically thinking of lower and middle income people being asked to shoulder more taxes when they haven't figured out how to handle or rise from the downturn from 4 years ago. I was thinking of the increase in participants in the food stamp program over the last 4 years. Even college educated, middle income people are signing up for food stamps. Everyone who is living paycheck to paycheck right now and is not on food stamps or government programs will either have to make some serious life changes or ask for assistance if the tax cuts aren't extended. The ease of qualifying for assistance makes the life changes option less appealing. Many people are on a fixed income or dealing with a catastrophic event and cannot reasonably make changes.
http://online.wsj.com/article/SB10001424127887324851704578131413033855182.html
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Don't you see the slope of that curve as somewhat ominous? The federal government is spending a higher percentage of GDP today than at any time since WWII. The parasites in Washington are eventually going to drain every drop of blood out of our economy.
Well you have had two recent wars and a recession, something has got to give...
And aren't we taking about, in the "worst case" a highest marginal income tax rate increase from ~35% to ~40%? This is hardly earth shattering, and puts you on par with many other developed nations. As with all things it'll work out to a compromise of some tax increases and some spending cuts.
Also, a lot of the current expenditures are not coming from revenues received. Rather, the federal government is relying on cheap and easy credit to borrow and spend. That might be necessary in wartime. It should not be in peacetime. Spend less money and leave the wealth with those that earned it. Looking at who actually pays the bill, a lot of that wealth would stay with you and me, the middle class.
I take it you don't buy Keynesian economics?
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The only low-income individual in that article would go from a -13.3% tax rate to a -8.3% tax rate, and she's only "low-income" because she's working part time while in grad school. Sorry, but that plus one unsupported and vague statistic from a think tank are not enough to convince me that the fiscal cliff will crush anybody. There's a pensioner making $200,000 a year who's worried that he may have to reduce spending by 2-2.5% and I'm supposed to feel sorry for the guy?
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Here's a hint; they don't care how awesome you are at your job.
Poor baby, here is a thought - then quit. Why haven't you - because government workers are not paid less than private sector equivelants and get ridiculously good benefits - so another 18 years of pay freezes may equalize that.
Yeah and generally they aren't required to be as productive as the private sector - so hiring freezes and attrition for a few more years may help to....I know it seems like your working your ass off but 1 private sector worker could probably accomplish the same amount as a it takes 3-5 government workers to accomplish in a day.
Not all government agencies pay better than their private sector counterparts, but some certainly do. The problem with the gov compensation system is that somewhere in the last 10-15 years the promotion system was bastardized from its original design. The original system was based on common sense, a job had a pay scale that you could move up by performing well and by gaining experience, much like the private sector in general. So someone could be hired into a job as a "7" that was classified as a "7/9/11", which equated to a given pay range with each number representing a higher grade within the range, and through gaining knowledge and skills (experience) and quality performance be awarded raises to each higher grade topping out at an 11.
Hopefully I haven't lost you in that crappy attempt at describing the system in general. Now here is what has actually been happening for the last 15-20 years. Using the same scale, someone is hired as a 7, as soon as they have hit "time in grade" they automatically bump to a 9 and then to an 11. Automatic, rubber stamped, performance and abilities not taken into consideration. This is what is expected and "how things are done" now. And don't even get me started on how hard it is to fire a government employee for performance issues! Not to mention budget priorities, etc.
Sol, I'm sure you know "the government game". I know there are hard working government employees who are fairly compensated and are being drug down by the others. I have several immediate family members who work for land management agencies, but the system needs fixed because as a whole it is broken.
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In the 1950's we had two recent wars and some smaller recessions from which to recover. And yes, we were paying off what was borrowed to wage those wars. However, we were not paying for nearly as much on-going government as we are today.
The nominal tax rates may have been higher in the 1950's, but incomes were much lower. A lot of folks did not make more than the $4,000 that defined the lowest bracket. And there is no information about what folks actually paid, after considering deductions and exemptions, nor does this take into account taxes other than income tax.
If I am on a par with other developed nations in the taxes I pay, then I want the same benefits. You know, the socialized medicine, free or low cost education, old age pension, railroads that carry passengers and run on time, etc.
With regard to borrowing, there has to be a lender from whom to borrow. When inflation appears, the debt will not be renewed on such easy terms. I don't see a lot of investment being made with those borrowed dollars. I see a lot of money going to fight wars that can't be won (been there done that with Vietnam) and writing a lot of checks for true entitlement programs, such as welfare. No interstate highways or other infrastructure, little scientific research, and not much of anything that would constitute an investment.
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it's not like prosperity and high government spending are incompatible: look at Europe...
Currency on the edge of collapse, a slowing economy, massive debt with skyrocketing interest costs, record unemployment of 11.7% exceeding 25% in some countries, with youth unemployment nearing 50%. Tell me again how Europe's a good example of high government spending and prosperity being compatible?
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If I am on a par with other developed nations in the taxes I pay, then I want the same benefits. You know, the socialized medicine, free or low cost education, old age pension, railroads that carry passengers and run on time, etc.
This is really fair. You look at place like Sweden, and they've got a massive amount of free welfare, government services, healthcare, free university education, efficient public transportation, etc, hardly any debt, a decent economy and low unemployment. But you'll pay around 60% of your income to the government if you're making anything over poverty level wages, gas is about $8/gallon because of the taxes and even a Big Mac goes for around $10. It's a matter of tradeoffs that most Swedes I spoke to seemed pretty content with. But it involves a fundamentally different conception of the size and role of government that most Americans are comfortable with. Government spending is actually referred to as "the public economy".
I feel like Americans keep getting pushed these have-you-cake-and-eat-it-too promises- more jobs, benefits, protections all while keeping inflation and taxes low. In the end that money keeps getting borrowed and the can getting kicked down the road because it would be politically unpopular to tell voters that they can't have everything.
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Government does not need more money, at any level. Government is probably the least "mustachian" enterprise in existence. The people in government need to be more efficient and frugal. I would be fine with paying more in taxes if a need could be demonstrated, after every effort to operate efficiently was made.
Anyone that thinks money, i.e. taxes, is the answer should be forced to work in a couple of agencies to see the waste and mismanagement in action. It's sickening to see the waste of resources, which if properly used, might actually accomplish something.
As government employee, I take offense at this. Your broad brush is simplistic and insulting.
Fortunately, the opinions of ignorant strangers from the internet don't mean that much to me, and I would only be demeaning myself by sinking to your level to denigrate your professional competence. So I think I'm done here.
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MWstubble/Sol - my statement was not to imply that there is anything wrong with the quality of people in government but more what NWstubble says about the system of government employees. I am no different, it is human nature, if I am will have the same job security and income as the lowest performer then what is my incentive for doing things better and more efficiently. And yes there are agencies that are underfunded and not compensated as well but overall as you say it is the government game - it is winning propostion for the government employee- that is until one day it is not because the bang for the buck is not there.
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The highest tax rate in the early 50s was over 90%. In the mid 80s it was over 50%. In the 90s it was the 39% the democrats propose to allow it to revert to in 2013. The country was obscenely productive and prosperous at those times, and we're *still* talking about allowing it to go back to a tax rate that is lower than most of the last century. People who think a 39% top tax rate will wreck the economy need to get some perspective.
Marginal rates were higher but it makes no sense to compare that number to today. First of all it applied to incomes above $200k, which inflated by 3% today gets to $1.2M today and back then that was only 0.1% of the population. Also capital gains taxes were 25% so that didn't apply to the 90%. The rules were also different as for deductions and corporate income. It is not a fair comparison - you really would have to take the rules and apply them side by side. Effective rates matter much more than marginal rates and what is included or excluded matters a lot as well.
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Yeah, the 30% of GDP that the government spent in the mid-1950s is dramatically different from the 34% that the government was spending in the 2000s until the 2008 recession hit.
(http://upload.wikimedia.org/wikipedia/en/d/d9/Us_gov_spending_history_1902_2010.png)
34% in the 2000's is not a correct picture as the economy was oversaturated with consumer and corporate debt so GDP was effectively overstated and the current spending to GDP is not a great depiction either because of the recession and GDP being depressed - so it is best to blend those two periods and the chart will show the continued increase in spending.
Also in the 1950's we got more quality out of the spending - it was for infrastructure and other societal improvements and not as much about social programs.
But I also agree with Grant that the going over the fiscal cliff will mean impending doom...do I want it to happen - no, would I prefer it over the status quo - yes. It would result in a recession and adjusting to a new normal (which is fairly common nowadays) and it might take a few more years of stagnant growth - but that would be a better outcome then perpetually increasing the debt.
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it's not like prosperity and high government spending are incompatible: look at Europe...
Currency on the edge of collapse, a slowing economy, massive debt with skyrocketing interest costs, record unemployment of 11.7% exceeding 25% in some countries, with youth unemployment nearing 50%. Tell me again how Europe's a good example of high government spending and prosperity being compatible?
The only places its compatible are where this is a high amount of natural resources per capita or relative to the size of the economy - Canada and Australia fall into this category, Europe is a disaster and the direction our politicians want to take us.
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And don't even get me started on how hard it is to fire a government employee for performance issues! Not to mention budget priorities, etc.
This reminds me of what a (federal) government college recruiter said regarding job security at a recruiting session I attended:
"Short of not showing up, it'd be very hard for you to get fired."
I thought to myself, "And you're proudly advertising this?!?"
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Actually, that wasn't my point at all-- My point is that those at an income level that could be affected by the proposed tax increases, those making $250K or higher PER YEAR (decidedly not middle class), the statistical truth is that those people tend to spend less, not more. The reality is that those driving the "economic engine" with large spending are the real middle class-- under $250K/year in income, and very little savings. An increase in taxes on those who tend to spend less, and need less, is a blip to them. Remember, it's a tax on INCOME, not on wealth. Government agents are not going to break into your house and cart off anything you've already accumulated.
...
US Millionaires tend to drive old, used cars, drink Budweiser when they drink at all, wear a $30 Timex, and spend very, very little. In other words, they're mustachians.
Let me get this straight. Most of us on these forums agree that people in general can live quite well with much less than they actually spend.
You're saying that statistically, the people earning more pends less because they actually need less. And you're saying that people earning less are usually ones spending more
Those who spend the most actually tend to not be wealthy (and their spending is the reason why) and thus would generally not be the ones with the higher proposed tax rate. Those people can feel free to keep spending unchecked and filling the coffers of the accumulating wealthy.
If one is part of the very small minority of the wealthy who spend their money unchecked, such that a 4-5% tax increase affects their ability to purchase luxuries, this will be a golden opportunity for them to learn how the really rich stay rich-- by modifying their behavior and habits until a bump in the road like 4% on new earnings isn't even a blip on the radar.
And your acceptance of the 'soak the rich' tax plan is because they can afford it? And the wealthy ones who would be affected should take this opportunity to learn to modify their behavior?
I ask this then:
Why can't the tax increases be extended over even into the middle class (since we know people tend to over-consume), so that even they too can take this opportunity to learn some mustachian habits, since the philosophies espoused on this site is clearly not exclusive to the wealthy.
I'm not saying the wealthy shouldn't pay taxes (or in this case, additional taxes). What I have issues with here, is the implication that the wealthy should bear all the additional tax burden and the middle class should be spared additional taxes because they can't afford them because they have bad spending habits, while the wealthy should have no issues with paying more because they tend to have better spending habits and therefore spend less anyway. Isn't it a bit perverse to, in a way, reward bad behavior?
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Really?? "Soak the rich?" Again, let's get some perspective here. We're talking about reverting from the *most* preferential tax system to the rich in the history of our country to the *second most* preferential tax system to the rich in the history of our country. I'm not about punishing success-- But the Bush era tax cuts were designed to favor the wealthy, and they're not sustainable. If you look at Grant's chart above, there's actually a nice downward trend beginning in the 90s, the Clinton era, when the exact tax rate the democrats propose to restore was in effect. It ratchets back up in time with two wars paid for on credit, and ill-advised tax cuts passed in 2001 and 2003.
Yes, we need to cut government spending (IMO predominantly in the area of defense). But we can't do it while also choking off our income. People act as though the expiration of the Bush tax cuts will suddenly launch us into uncharted territory-- they won't. Taxes are not a perpetually diminishing entity. They rise and lower in relation to our fiscal needs. Our current needs call for greater revenue, and restoring the exact same system we had before the current one is a pretty trivial step in that direction.
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Really?? "Soak the rich?" Again, let's get some perspective here. We're talking about reverting from the *most* preferential tax system to the rich in the history of our country to the *second most* preferential tax system to the rich in the history of our country. I'm not about punishing success-- But the Bush era tax cuts were designed to favor the wealthy, and they're not sustainable. If you look at Grant's chart above, there's actually a nice downward trend beginning in the 90s, the Clinton era, when the exact tax rate the democrats propose to restore was in effect. It ratchets back up in time with two wars paid for on credit, and ill-advised tax cuts passed in 2001 and 2003.
Yes, we need to cut government spending (IMO predominantly in the area of defense). But we can't do it while also choking off our income. People act as though the expiration of the Bush tax cuts will suddenly launch us into uncharted territory-- they won't. Taxes are not a perpetually diminishing entity. They rise and lower in relation to our fiscal needs. Our current needs call for greater revenue, and restoring the exact same system we had before the current one is a pretty trivial step in that direction.
You're missing the point of my question. And also note that I also put quotation marks on the 'soak the rich' label. I'm exaggerating (the grain of truth in it) and saying that tongue-in-cheek, sorry if it's not clear.
I don't disagree that for this current debt problem, taxes should go up. But I also believe cuts and reforms need to be made. We may disagree on what should go up, what should be cut, etc, but that's not what I'm here to discuss.
Your arguments, as quoted above, at least, as I understood it (hence the "Let me get this straight" preface), was that the wealthy could afford the additional taxes because they have room for it in the budget anyway. And of the wealthy who don't, well, they could learn to cut their spending and be a little more mustachian. You also said the less wealthy who spend more could continue "to spend unchecked."
The main point of my question is, "So why not apply the tax rate increase to this second group of people as well?" Then they too can have their "golden opportunity" to learn to save more of their money and become rich!
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It ratchets back up in time with two wars paid for on credit, and ill-advised tax cuts passed in 2001 and 2003.
I am tired of people blaming the wars - the cost of which in total over the 10 or so years is less than the deficit we have each year right now.
Setting aside whether anybody is for or against the bush tax cuts expiring - it only adds up to $1 trillion over 10 years and that is if ALL of the bush tax cuts expire. So again this doesn't even solve the deficit of single year, let alone over 10 years. Setting aside economic challenges it may cause I am more in favor of letting all the bush cuts expire - you know shared sacrifice.
This all such BS - the general population, and maybe even the MMM population, doesn't get it. We have a spending problem, can the rich be taxed more - yes, but we need to address spending in a large way.
Only in washington is it considered a spending cut if you spend $1trillion now and had planned to spend $3trillion 10 years from now but then reduce it to $2.5trillion and call it a cut - NO IT IS NOT - it is increasing spending and lower rate. Of course Obama and his camp believe that adding spending above what was planned now somehow counts as a cut as well.
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Only in washington is it considered a spending cut if you spend $1trillion now and had planned to spend $3trillion 10 years from now but then reduce it to $2.5trillion and call it a cut - NO IT IS NOT - it is increasing spending and lower rate.
And only in Washington do they compare 'savings' over 10 years to a deficit of 1 year.
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Your arguments, as quoted above, at least, as I understood it (hence the "Let me get this straight" preface), was that the wealthy could afford the additional taxes because they have room for it in the budget anyway. And of the wealthy who don't, well, they could learn to cut their spending and be a little more mustachian. You also said the less wealthy who spend more could continue "to spend unchecked."
The main point of my question is, "So why not apply the tax rate increase to this second group of people as well?" Then they too can have their "golden opportunity" to learn to save more of their money and become rich!
Not exactly what I meant. I was addressing the "don't tax the poor job creators, it's their money that runs the economy and creates jobs" argument. Treating the very wealthy (and let's face it, > $250K a year is as shitton of money) as though they were a protected class is silly. So yes, the wealthy *can* afford it, they *have* afforded it, and in general it hasn't prevented them staying wealthy in the past. Having lower taxes on the wealthy hasn't been proven to have any tangible effect on the economy, or in making wealth more accessible to the middle class. It hasn't grown the middle class. It hasn't had any net positive effect on society at large. So, at a time when we need revenue to help address our defecit (and I fully acknowledge spending cuts should be a huge part of a fair plan too-- let's start with our ability to destroy the world hundreds of times over, shall we?), getting it using a system we have used to great effect in the past, from a group that stands to lose the least as a result, makes perfect sense to me.
Now, you may argue that a progressive system of taxation is inherently unfair, but that's a different argument and it's no more or less compelling now than at any time before. The fact is that we have a progressive system of taxation and it is supposed to scale in relation to wealth. The Bush tax cuts made the system less progressive.
My principle argument here is that there are some who see the expiration of the tax cuts as a revelation, as uncharted territory-- it's not. The expiration of the Bush tax cuts simply puts us back at a tax code that was in effect for years beforehand, and which in turn is more favorable to the wealthy than any tax code before it.
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My principle argument here is that there are some who see the expiration of the tax cuts as a revelation, as uncharted territory-- it's not. The expiration of the Bush tax cuts simply puts us back at a tax code that was in effect for years beforehand, and which in turn is more favorable to the wealthy than any tax code before it.
I agree that reverting the Bush tax cuts isn't going to bring us to uncharted territory. I guess my main argument is that it's true for all the tax brackets, not just the top one. I'm with tooqk, I'd rather see the tax cuts expire for all the tax brackets. And I say that despite it being more beneficial (at least in the short term) for me if it expires only for the top bracket.
What I'd much rather see is if they actually simplify the whole tax system so it doesn't look like swiss cheese to people who can most afford to game the system, and upping revenue from across the whole income spectrum that way. But hey, one can dream, right?
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34% in the 2000's is not a correct picture as the economy was oversaturated with consumer and corporate debt so GDP was effectively overstated and the current spending to GDP is not a great depiction either because of the recession and GDP being depressed - so it is best to blend those two periods and the chart will show the continued increase in spending.
Bring the numbers and we'll talk. The picture is quantitatively very similar, so if you think it's qualitatively different you better be prepared to bring the numbers.
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Here you have 50 years of US Gov spending courtesy of NPR:
(http://www.npr.org/news/graphics/2012/05/pm-budget/gr-pm-budget-462-03.jpg)
(http://www.npr.org/blogs/money/2012/05/14/152671813/50-years-of-government-spending-in-1-graph (http://www.npr.org/blogs/money/2012/05/14/152671813/50-years-of-government-spending-in-1-graph))
Gaining efficiencies is important, but nothing new. I think you'd be hard pressed to find any real life "Ron Swanson's" who will give you all the gains you are looking for. I've worked for both public and more recently private employers and I haven't noticed a large difference in work ethic. In my experience, the small team dynamic impacted work ethic much more so than any monetary motivation or threat of job loss. This is not to say you shouldn't try chasing efficiencies or improving the system, but in many cases you start running into diminishing returns.
I think the better question is one of prioritization. What do people value and hence want to continue spending on? What specific programs do they want to cut?
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In the 1950's we had two recent wars and some smaller recessions from which to recover. And yes, we were paying off what was borrowed to wage those wars. However, we were not paying for nearly as much on-going government as we are today.
Support your argument.
The nominal tax rates may have been higher in the 1950's, but incomes were much lower. A lot of folks did not make more than the $4,000 that defined the lowest bracket. And there is no information about what folks actually paid, after considering deductions and exemptions, nor does this take into account taxes other than income tax.
"There is no information" means "the information doesn't exist", not "I can't find numbers that contradict the US government's economic data which you produced, so I'm going to will yours out of existence".
If I am on a par with other developed nations in the taxes I pay, then I want the same benefits. You know, the socialized medicine, free or low cost education, old age pension, railroads that carry passengers and run on time, etc.
You're not on par with other developed nations in the taxes you pay.
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34% in the 2000's is not a correct picture as the economy was oversaturated with consumer and corporate debt so GDP was effectively overstated and the current spending to GDP is not a great depiction either because of the recession and GDP being depressed - so it is best to blend those two periods and the chart will show the continued increase in spending.
Bring the numbers and we'll talk. The picture is quantitatively very similar, so if you think it's qualitatively different you better be prepared to bring the numbers.
The chart says it all....private was to the moon until 2008-2009 -private includes personal and corporate and public is government.
(http://static.cdn-seekingalpha.com/uploads/2012/5/10/saupload_428250-13363801587809994-Michael-Clark.png)
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Shit, that's way more dramatic than I would have thought.
What do you think the implications are for the economy in the long term, and for investors like you and I?
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Shit, that's way more dramatic than I would have thought.
What do you think the implications are for the economy in the long term, and for investors like you and I?
What it means is that we are in slow growth mode for a while, the ramp up in private sector debt which fueled purchases, asset prices, stocks, etc is in deleveraging mode (some of it forced through foreclosures/bankruptcties), which is why the endless spending/stimulus programs had little effect on the economy (look at the chart you can see the government spending picked up some of the slack but not all of it). The government can't fix the problem, and in some regards it has hindered it over the last two years. And if the government goes too far with trying to fix it with spending then the imbalance shifts again causing inflation due to the eroding dollar and increased borrowing costs. Clearly I have been critical of washingtion (both sides) but that doesn't mean it is an easy task that they have.
It results in demand being way down, companies will not invest in capital equipment or people in any meaningful way until demand picks up. Individuals won't buy stuff until they are more confident. Its very circular but I believe that two things will get us to the crossover point naturally - (1) the replacement cycle - companies and indviduals can only delay/defer things so long before things NEED to be replaced (we are seeing some of that already) and (2) the relationship between inflation vs. deleveraging vs. asset prices - if incomes grow at 2% and inflation is 1% then the debt is theoretically reducing by the difference each year at no cost on top of actual reduction of debt (paying it down,foreclosure,bk). The wider the gap the better it is, but the problem is that the gap is not that wide right now and we are in very sensitive position right now where incomes are barely moving, inflation is low but could increase, and there is a lot of uncertainty - there is always uncertainty leading up to an election but I can't recall so much political uncertainty after an election.
Things can't really get better until balance sheets get better, which they have but there is more to go. Of course this can go to far as well, look at Japan.
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I don't think you really needed a disclaimer to state your side. Clearly I don't need a disclaimer to say that I am not on your side....that said I don't think taxes should go up but I do think they can. I also think spending needs to go down - remember the fight going on right now is that liberals want taxes to go up on the wealthy (i.e. middle class and above) and are offering up zero spending cuts. Republicans are now conceding some of this but want to see cuts.
And lets be clear about what both sides considered to be cuts - cutting things out of the growth of future spending. Example if budget today = $1 trillion.....projected budget 10 years from now = $3 trillion then cut so that budget 10 years from now is $2 trillion.....wow they just CUT the budget by a third by their rules.
I SAY NO....a cut would be taking the budget today and making it $900 billion.....point is democrats can't even concede to making cuts that aren't even cuts.
My position is to simplify the tax code, raise revenue with a combination of higher rates and the simplification, and actual cuts.
Please cite sources for this assertions as it seems to be patently false based on non-biased sources such as the actual Federal Budget Outlays and the CBO. While there is a difference in where the Democrats would like to make cuts, to say they aren't offering any is hyperbole at best and flat out lying at worse. For your perusal I will provide the historical Federal Budget outlays (which are available for free by the way); Pg. 144 includes data on debt increases which, contrary to the opinion of some, have been fairly common within the past decade or so. Beginning at page 148-149 you can actually see the outlays and what money goes where; as expected Defense, Medicare, and Social Security make up a good bit of our "debt."
Since Medicare, Medicaid, and Social Security are "sacred cows", the aim of some is to cut spending in areas that are already underfunded; infrastructure, education, public health, and the sciences , instead of cutting spending in defense, no-bid government contract work, and corporate subsidies. While some are in favor of raising revenues (tax increases), cutting loopholes, cutting defense spending and corporate subsidies, while investing in the programs mentioned above. You also have to bear in mind there are "on the books" expenses and "off the books" expenditures; so both sides could say they're "making cuts" when they're only chopping off chunks of discretionary spending (as was the case during the massive expenses of two wars and a bail out program. FUN FUN FUN!).
Basically, you cannot run a nation like a household and that's something many economists are having to learn the hard way and many pundits are banking on Americans NOT being aware of because most of us are keeping our head to the ground just trying to make it. Hell, when you look at the data, often times there has been a lot of compromise between what the majority has offered, what the minority has countered, and what actually became.
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I forgot to put in the links. LOL!
http://www.washingtonpost.com/wp-srv/special/politics/documents/2012budget-full-summary.html (http://www.washingtonpost.com/wp-srv/special/politics/documents/2012budget-full-summary.html) Federal 2012 Budget Outlays
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/budget.pdf (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/budget.pdf) Potential Federal Budget 2013 Budget Outlays (I wish I could find the primary source data for the plans to *gasp* shrink the government by combining redundant agencies)
http://www.cbo.gov/publication/43735 (http://www.cbo.gov/publication/43735) This is just to the analysis of the unemployment insurance program which makes up a pittance of our total budget, but people hate it because the poor and unlucky deserve to starve in rat infested nests filled with death and disease amirite?
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dionysiandame - I am not sure if you are for or against my comments but you clearly take offense to my comment about democrats, so got it - anything against the democratic machine is sacrilegious.
Call me what you will - but focus on the second paragraph of my comments, I really don't care about individual line items if the whole thing is still going up - there are not cuts if it is increasing. Republicans have and still are playing the same game - does that make you happy, as I have made clear both political parties are out of control with spending (albeit on different things, but both seem to be getting it done) and are completely disfunctional and incompetent and not interested in anything other than protecting themselves and the compromise you elude to often results in more of the same and nothing getting addressed.
And those sacred cows.....well IMO they should be shot and eaten.
As for the CBO, I am not sure you understand how that works but it is not based on any real analysis. If a budget and its changes are submitted to them for review their job is not to say whether or not it is reasonable and its assumptions are reasonable its job is merely to attest to whether the math works or not. Lets say a budget is presented that says GDP will grow by 200% a year for five years and it will result in a $500trillion dollar surplus based on the tax revenue and therefore we can spend another $500trillion today and have a balanced budget....guess what they would stamp it as acceptable but clearly it is not reasonable.
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And those sacred cows.....well IMO they should be shot and eaten.
Best line in this thread so far.
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And those sacred cows.....well IMO they should be shot and eaten.
Ain't that the goddamn truth? Here on a forum about self-sufficiency, we're against welfare to those who clearly have plenty. Preach, tooqk, preach.
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dionysiandame - I am not sure if you are for or against my comments but you clearly take offense to my comment about democrats, so got it - anything against the democratic machine is sacrilegious.
More hyperbole. Okay, I'm game.
Call me what you will - but focus on the second paragraph of my comments, I really don't care about individual line items if the whole thing is still going up - there are not cuts if it is increasing. Republicans have and still are playing the same game - does that make you happy, as I have made clear both political parties are out of control with spending (albeit on different things, but both seem to be getting it done) and are completely disfunctional and incompetent and not interested in anything other than protecting themselves and the compromise you elude to often results in more of the same and nothing getting addressed.
Okay, so I'll call you a liar and raise you a willfully ignorant liar and call it a day. "I don't really care about individual line items..." translates into "I don't feel like looking at the actual math but damn it I'm pissed because someone told me I should be." Cute.
And those sacred cows.....well IMO they should be shot and eaten.
Was...was this a zinger? Well played Sir.
As for the CBO, I am not sure you understand how that works but it is not based on any real analysis. If a budget and its changes are submitted to them for review their job is not to say whether or not it is reasonable and its assumptions are reasonable its job is merely to attest to whether the math works or not. Lets say a budget is presented that says GDP will grow by 200% a year for five years and it will result in a $500trillion dollar surplus based on the tax revenue and therefore we can spend another $500trillion today and have a balanced budget....guess what they would stamp it as acceptable but clearly it is not reasonable.
Hmm, as someone who works in Data Analysis, I will have to say that I generally have to "analyze" the data before I can come to any conclusions. I don't know, maybe all of that math is just an illusion...a soul crushing illusion, but I can't "attest" to anything that hasn't been crunched, pulled, and mashed into something comprehensible and useful. When my VP looks at my data, it's not my job to say "Oh this is great! Look we've hit all of our metrics! Now, let's go snort some coke in the restroom!" I present the data and then my internal customers (VP and management) make their moves from there.
So when I see that unemployment could range between $3-30 billion, and I compare that against our other expenditures, and then I look at the risk of NOT extending said benefit; including how it could effect household demand, etc; I would, personally, rather extend said benefit. I was giving you that data so you could see where our elected officials budget plans are partially coming from when they're not based on political positioning, emotional triggers, or privilege.
Is anyone else increasingly turned on by sovereign currency and public debt?
Marinate with that image.
You're welcome.
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And those sacred cows.....well IMO they should be shot and eaten.
Ain't that the goddamn truth? Here on a forum about self-sufficiency, we're against welfare to those who clearly have plenty. Preach, tooqk, preach.
Welfare for those who have plenty? Do you mean corporate welfare or like, welfare welfare, an exceedingly difficult and humiliating program to go through which was majorly reformed, but that states have the ability to modify requirements if they absolutely need to?
http://www.factcheck.org/2012/08/santorums-distorted-dependency-claims/
http://www.factcheck.org/2012/08/does-obamas-plan-gut-welfare-reform/
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I am tired of people blaming the wars - the cost of which in total over the 10 or so years is less than the deficit we have each year right now.
4 trillion and counting:
http://costsofwar.org/
And I'm tired of faux fiscal conservatives who fail to acknowledge that this nation's military (i.e., waste) spending is out of control. When you spend more than the next 20 largest military forces combined, you have a "war" problem.
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Do you mean corporate welfare or like, welfare welfare, an exceedingly difficult and humiliating program to go through which was majorly reformed, but that states have the ability to modify requirements if they absolutely need to?
No, neither. I mean social security and medicare, which currently are not means tested and both target the single richest demographic in the country.
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Spoken like a true 20 year old!
Social Security is not an "entitlement" and payments into it are not a tax to create a welfare system for poor retirees, which is what it would become with means testing. I was forced for decades to pay into a retirement annuity I did not select and would not have selected. Never the less, the money was paid. That annuity had better be paid as well. The 55 plus crowd will be out in force if it is not.
Medicare is a different story. It's a bloated mess full of waste and fraud. The overhead is ridiculous. Privitization makes a lot of sense here.
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I am tired of people blaming the wars - the cost of which in total over the 10 or so years is less than the deficit we have each year right now.
4 trillion and counting:
http://costsofwar.org/
A lot of fluff in those numbers, a lot....and I think is not just for the wars in Iraq and Afghanistan it includes the war on terror in overall and it includes costs for the next 10-50 years - ok. But it has not cost that in the last 10 years - so the current deficit has not been caused by this, it is simply part of it and the future costs (soft or not) will be part of future deficits, again I was talking about from the start of the wars until now, which is what most comments are about.
http://costofwar.com/ (http://costofwar.com/)
http://www.cbo.gov/latest/national-security/iraq-and-afghanistan (http://www.cbo.gov/latest/national-security/iraq-and-afghanistan)
And I'm tired of faux fiscal conservatives who fail to acknowledge that this nation's military (i.e., waste) spending is out of control. When you spend more than the next 20 largest military forces combined, you have a "war" problem.
Ok.....please go back and remind me where I said we should increase defense spending and by under no circumstance should it be cut, please please show me. Actually, I think I said it could be cut and run more efficiently. Actually, I also think it was part of the sacred cows comment.
That said, defense is an important role of the government and we should spend more than any other nation for a number of reasons - population, geography and economically we are significantly larger than most other countries and we have been playing global police officer (although not always requested). Is this for the better or worse, I don't know, but it seems worse because any time we signal that we may sit something out the world gets mad, any time we want to get involved the world gets mad. Either way someone is pissed at us.
Should we stay the hell out of others business - again I don't know. Would I like to - yes, but what are the consequences. 9/11 happened because we didn't keep to ourselves and our support of Israel (mostly because of this) - but if we stayed out of it then Israel may not exist today. The US has muted its support of Israel under the current administration - which is fine as long as we don't hang them out to dry, I am all for letting them handle their own business for a while, but when they take actions on things we can't then tell them to back off.
Our defense helps with this - it may be schoolyard tactics but some times the fact that "I am bigger than you" is enough. The cold war was "We are both big and will both die if we fight, so lets not". I wouldn't want to be on the other side of the coin where another country is threatening us with those terms. It is not good for anybody if Iran does go nuclear - although there is no need to rush into it either, we know how that works out - can you say WMD - but you can't wait to long either. Politicians suck IMO, but for these types of decisions I am so glad I am not a politician - these are some tough f'in calls to make.
Why have we not completely exited Iraq and Afghanistan - because it is not that simple.
Somalia is a major issue and while the regime there tears apart the country and its people it really is of little consequence to the US. Diplomacy first but at some point (maybe it has passed, maybe it hasn't) there are many people there suffering that need help - and we have the resources to do that if and when the time comes.
So yes defense is important and should be heavily funded, but it doesn't mean it can't be cut.
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Spoken like a true 20 year old!
I feel like we've been over this part once already (https://forum.mrmoneymustache.com/antimustachian-wall-of-shame-and-comedy/'you're-working-for-gas-now'-insanity-on-cnn/msg29783/#msg29783). Just a friendly reminder that us young folks can have well-reasoned opinions too.
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The 55 plus crowd will be out in force if it is not.
To make this thread a little more light-hearted, I got quite a laugh out of this quote thinking of a scene of a mob of 65yr-old greybeards trying to fight it out with Riot police.
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Okay, so I'll call you a liar and raise you a willfully ignorant liar and call it a day. "I don't really care about individual line items..." translates into "I don't feel like looking at the actual math but damn it I'm pissed because someone told me I should be." Cute.
Wow - again not sure what your issue is. Maybe you should look at the numbers - look at p. 244 where the assumption is that GDP will grow 4.5% for 2012, 4.7% for 2013, and up and up from there.......hmmmm, isn't the US growing at <2%. I guess a 2.5% swing is no big deal, afterall it is pittance given the size of the US economy. Who cares, what is a few percent on such a small economy mean anyway? p. 246 shows the debt continuing to increase and assumes that the budget is passed, which is yet to happen under the current administration, so this is the best case scenario and as I have already pointed out is behind plan right out of the gate. Also look at inlation - assumed to remain low. So on one hand we assume that GDP is growing at a healthy clip, debt is still increasing AND inflation remains low. Sounds realistic.
Hmm, as someone who works in Data Analysis, I will have to say that I generally have to "analyze" the data before I can come to any conclusions. I don't know, maybe all of that math is just an illusion...a soul crushing illusion, but I can't "attest" to anything that hasn't been crunched, pulled, and mashed into something comprehensible and useful. When my VP looks at my data, it's not my job to say "Oh this is great! Look we've hit all of our metrics! Now, let's go snort some coke in the restroom!" I present the data and then my internal customers (VP and management) make their moves from there.
I agree with this approach, so clearly you must not work for the CBO. And given above comments maybe you should find a new field or go and work for the CBO.
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Spoken like a true 20 year old!
Social Security is not an "entitlement" and payments into it are not a tax to create a welfare system for poor retirees, which is what it would become with means testing. I was forced for decades to pay into a retirement annuity I did not select and would not have selected. Never the less, the money was paid. That annuity had better be paid as well. The 55 plus crowd will be out in force if it is not.
Medicare is a different story. It's a bloated mess full of waste and fraud. The overhead is ridiculous. Privitization makes a lot of sense here.
Your are correct on both accounts - the were both designed as safety nets and everybody pays into them. SSI was originally intended to ensure that that people wouldn't be destitute once they were unable to work any longer (retirement really didn't exist when SSI was formed) and people generally died within three years of stopping. The the program evolved in mid-century and later into being part of a retirement plan (1/3rd each from SSI, Pension, Savings) but the life expectacy was aproximately 5-8 years http://mappinghistory.uoregon.edu/english/US/US39-01.html (http://mappinghistory.uoregon.edu/english/US/US39-01.html) beyond standard retirement age. Now people expect it to be their full retirement plan because there are few pensions left and nobody saves coupled with the largest population in history starting to retire (remember that SSI is a pyramid scheme) and life expectancies that are now much higher - see table people age 50-65 are expected to live to 81-83 http://www.census.gov/compendia/statab/2012/tables/12s0104.pdf (http://www.census.gov/compendia/statab/2012/tables/12s0104.pdf) - full retirement age for the boomer generation is 66 years so - a 15-17 year gap from life expectancy.
You are right that you paid/me and even Grant have paid and/or are paying into the system and those benefits should be there.
Unfortunately due to poor assumptions upfront and changing inputs over time both need to be changed. But the fact that the 55+ crowd shouldn't be affected is just wrong - there is no reason why benefits age can't be increased by a few year even for them right now - most of which can't retire anyway. It won't happen purely because boomers are the largest block of voters that actually vote - so no politician will even think about this, but that doesn't make it right especially when younger generations generally feel that it won't exist at all (I don't feel this way, but don't count it out either).
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20 year olds can have well reasoned opinions but their opinions inevitably will be tempered in the future by experience. I would be very interested in having Grant report back his opinions in 20 or 30 years. My bet is they will have changed.
With decades of such experience, I have learned to view academic and political compilations of numbers and statistics as interesting and supportive of various positions, but inferior to common sense. Searching through them to make arguments for and against how to spend tax dollars deflects the discussion away from common sense approaches.
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20 year olds can have well reasoned opinions but their opinions inevitably will be tempered in the future by experience. I would be very interested in having Grant report back his opinions in 20 or 30 years. My bet is they will have changed.
With decades of such experience, I have learned to view academic and political compilations of numbers and statistics as interesting and supportive of various positions, but inferior to common sense. Searching through them to make arguments for and against how to spend tax dollars deflects the discussion away from common sense approaches.
There is an absolute void of common sense in politics so you won't get any disagreement from me on this.
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edit: premature post.
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I don't want to derail the thread but being dismissive of someone's opinion because their opinion may change is still being dismissive. Grant's future opinion is unknowable. You could start with maturely discussing his current opinion instead.
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20 year olds can have well reasoned opinions but their opinions inevitably will be tempered in the future by experience. I would be very interested in having Grant report back his opinions in 20 or 30 years. My bet is they will have changed.
With decades of such experience, I have learned to view academic and political compilations of numbers and statistics as interesting and supportive of various positions, but inferior to common sense. Searching through them to make arguments for and against how to spend tax dollars deflects the discussion away from common sense approaches.
And younger people could just as easily say you old geezers' opinions are formed because you've grown jaded with age.
See....just as pointless.
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Generally, people with more experience are paid more because of.......their experience! In other words, experience has value.
My point is common sense and wisdom are generally accompanied by experience. Not all experience leads to common sense and wisdom (which is different than knowledge, by the way). It depends on the mindset of the person. Occasionally you will find a person that puts it all together at a fairly young age. I think MMM is a good example of one. Grant is an example of someone trying to speed the process up through reading lots of books. Since he's a really smart, analytical guy, he understands and analyzes what he reads. However, in my opinion reading alone cannot make a person wise or give them common sense. It takes experience.
My suggestion to the younger people here is that they sit down with their parents and grandparents and talk about what this country and its government were like in the 1940's, 50's, 60's, 70's and 80's. Get a really good feel for the place of government then vs now. Then ask those folks if they think we are better off with the amount of government we have now. And ask them what we have accomplished with the trillions government has spent over their lives. I'd be interested in hearing their answers.
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My suggestion to the younger people here is that they sit down with their parents and grandparents and talk about what this country and its government were like in the 1940's, 50's, 60's, 70's and 80's. Get a really good feel for the place of government then vs now. Then ask those folks if they think we are better off with the amount of government we have now. And ask them what we have accomplished with the trillions government has spent over their lives. I'd be interested in hearing their answers.
Experience can also come with biases, nostalgia, (unintentionally) selective memory and the like - so there are issues with that approach as well.
But that's not the point... the point is that when comments like "spoken like a true 20 year old" are made - it's just a flippant marginalization of someone's (or a group of someone's) input based on a demographic line item in their profile. Remarks like that do nothing to promote productive and interesting discussions and, often, will have the reverse effect of derailing the conversation all together.
If your point was meant to be the above suggestion - fine, but can you just start with that? I think everyone would appreciate it.
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Generally, people with more experience are paid more because of.......their experience! In other words, experience has value.
But does experience actually have value or does it really have a price? This makes me think of the Benjamin Graham quote:
'Price is what you pay. Value is what you get.'
One profession that comes to mind is teaching. In many districts pay is almost entirely based on years experience and not on quality of teaching. Of course, that is changing (at least here on the frozen front range, from what I understand). Another, is active mutual fund managers of huge mutual finds who are shown to have a very difficult time beating the averages after cost. Many have a large amount of tenure yet they have a very difficult time producing the value they are paid for.
I agree that real experience is valuable. But, as a huge proponent of life long learning, I cringe when I hear people dismissing others who are younger because they are trying to use books to get ahead. Heck look at guys like Charlie Munger. Probably one of the most well rounded human beings to walk the earth in the last 100 years, or dare I say ever. His grand kids say he is like a book with legs.
Anyway, I will take my devil's advocate hat off now as this doesn't really pertain to the conversation.
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Call me what you will - but focus on the second paragraph of my comments, I really don't care about individual line items if the whole thing is still going up - there are not cuts if it is increasing. Republicans have and still are playing the same game - does that make you happy, as I have made clear both political parties are out of control with spending (albeit on different things, but both seem to be getting it done) and are completely disfunctional and incompetent and not interested in anything other than protecting themselves and the compromise you elude to often results in more of the same and nothing getting addressed.
And those sacred cows.....well IMO they should be shot and eaten.
I think this is it right here. We (as in broadly the public) are, by and large, attached to one of two political parties that pretend to offer two different view points that we have to choose between. However - when you look at the end result - there really isn't much difference between the two. Their primary concern is getting reelected so they pander to whatever symptom happens to be the hot topic of the day and never really solve anything or even really work towards a long-term real solution. As long as we keep rewarding this behavior by leaving them in office, we'll just continue to see band aids to get us through to the next term. Eventually it will catch up to us, someway, somehow.
Personally - I'm a libertarian who, generally, wants smaller government all around. However - I'm willing to set that aside and say the more important thing is to get the fiscal ship in order. If no one is willing to give up any of their public services - let's stop half-assing it and properly fund it. Stop shifting the costs to the future. If we, the public in general, want healthcare, comfortable retirement once you hit 67, safety nets, education and whatever else to all be entitlements and we want to police the world, protect our interests locally and abroad, and fund foreign aid. Fuck it. Let's do it. We really are wealthy as hell as a nation and can probably afford to do it all. But let's also pay for it, now. And let it all come out of everyone's paycheck, dividend returns, and capital gains so they can directly see it, feel it, and, ultimately, decide if it really is worth it. A trillion dollar debt is just an uncomprehendable line item on a federal report or bullet point on a news channel. 10%, 25%, 50% (or whatever it ends up being) less in their paycheck every month is something they'll get.
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I'm totally in favor of well rounded. In fact, that's my point. Well rounded includes experience, and Charlie's got lots of it.
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I'm sorry, maybe my post wasn't as clear as I thought. It would have been more accurate for me to say "us young folks can have valid opinions too," but since well-reasoned and valid go hand in hand for me I made the substitution. Earlier you tried to counter the validity of Grant's argument by saying "yeah, but you're young". Now you've revised that to "yeah, but you're inexperienced". While I agree that past experiences can give one a good intuitive sense of a problem and its solutions, the declaration of one's opinions as invalid due to a lack of age or experience is still an ad hominem, does not prove or disprove anything, and does not further the discussion.
My suggestion to the younger people here is that they sit down with their parents and grandparents and talk about what this country and its government were like in the 1940's, 50's, 60's, 70's and 80's. Get a really good feel for the place of government then vs now. Then ask those folks if they think we are better off with the amount of government we have now. And ask them what we have accomplished with the trillions government has spent over their lives. I'd be interested in hearing their answers.
That's a super idea! I'll get back to you on it. It's been a while since I've had a good chat with my Grandma, and I'm curious to see what she thinks.
Anyway, sorry everyone for derailing the thread. My bad.
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Sadly, the typical American wants the impossible (polling has demonstrated this). They want:
- The debt to go down
- Taxes must not go up for anyone (or maybe only for those earning more than them)
- Don't cut any programs they care about, particularly the big ticket items like defense, social security and medicare.
So, their wants are incompatible, something must give. It's no wonder our dysfunctional government behaves like the average consumer, pulling the CC out to pay for things it can't afford and continuing to kick the problem down the road. Ridiculous.
I wish they'd go for everything: Let the previously enacted (Bush) tax cuts expire, let the payroll tax cuts expire, reign in all spending including defense, medicare, social security, come up with an overall tax code that makes sense and is less than 1 million pages, you name it. And I don't just mean "going off the [current] cliff." I mean reign it all in for the future as well, so that the debt can be wiped out in 10 years or less.
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Sadly, the typical American wants the impossible (polling has demonstrated this). They want:
- The debt to go down
- Taxes must not go up for anyone (or maybe only for those earning more than them)
- Don't cut any programs they care about, particularly the big ticket items like defense, social security and medicare.
So, their wants are incompatible, something must give. It's no wonder our dysfunctional government behaves like the average consumer, pulling the CC out to pay for things it can't afford and continuing to kick the problem down the road. Ridiculous.
I wish they'd go for everything: Let the previously enacted (Bush) tax cuts expire, let the payroll tax cuts expire, reign in all spending including defense, medicare, social security, come up with an overall tax code that makes sense and is less than 1 million pages, you name it. And I don't just mean "going off the [current] cliff." I mean reign it all in for the future as well, so that the debt can be wiped out in 10 years or less.
I'm no economist, so I have no idea what the ramifications would be, but I've had extremely similar thoughts.
If this debt crisis is as serious as they want us to believe, then go all out. Cut no corners. Cut all spending on everything, tax everyone more. For say 10 years.
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Lots of things can be well reasoned and just plain wrong. Every scientific hypothesis over the centuries given credence and later proven incorrect was well reasoned enough to convince highly educated and experienced folks of its validity.
My point is unchanged. All the pretty charts and the discussion of percentages of GDP undermine the application of common sense to the problem. We have too much government. We can't afford it nor, if we thought about it, do we really want it. We have a huge amount of debt that needs to be paid. The folks in Washington and in every state capitol should be running around like their hair is on fire. Instead they are playing brinksmanship games with each other while reaching into our pockets for the credit card.
DoubleDown is on the right track. Maybe we will find going off the fiscal cliff won't be the fatal tumble it is made out to be. Some real pain might galvanize resistance to the buy now, pay later politicians. We can only hope.
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Social Security is not an "entitlement"
hmm (http://en.wikipedia.org/wiki/Entitlement). "An entitlement is a guarantee of access to benefits based on established rights or by legislation." Looks like an entitlement to me.
and payments into it are not a tax to create a welfare system for poor retirees, which is what it would become with means testing. I was forced for decades to pay into a retirement annuity I did not select and would not have selected. Never the less, the money was paid. That annuity had better be paid as well.
If your payments were of a sufficient amount that you were paying for your entire annuity, I might have slight respect for what you're saying. Since your payments are coming out of my paycheck, and your benefits will be dramatically higher than your payments (barring a tragic young death, of course), I don't.
Your are correct on both accounts - the were both designed as safety nets and everybody pays into them. SSI was originally intended to ensure that that people wouldn't be destitute once they were unable to work any longer (retirement really didn't exist when SSI was formed) and people generally died within three years of stopping.
If you make or have enough money that means testing would prevent you from receiving your social security benefits, then you are not destitute. Therefore means testing is in keeping with the original intent of SS.
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20 year olds can have well reasoned opinions but their opinions inevitably will be tempered in the future by experience. I would be very interested in having Grant report back his opinions in 20 or 30 years. My bet is they will have changed.
God, I so thought we were past this by now.
Since he's a really smart, analytical guy, he understands and analyzes what he reads. However, in my opinion reading alone cannot make a person wise or give them common sense. It takes experience.
Right, and since I'm 20 I must have no experiences. I've never done things like working on Habitat for Humanity homes and soup kitchen drives to see the scars poverty leaves on the poor, leading people different from me who I disliked to meet a goal on time and in an effective fashion, running a household on a shoestring budget, seeing firsthand the remains of history and piecing together an interpretation of the past from them, touring my city and seeing how things got the be the way they are and how they are changing today, analyzing a business to determine how to turn it around... Turns out, every single insight I've got about the world around me is pieced together from the Bureau of Labor Statistics website! You've convincingly and effectively proved I'm an intellectual charlatan with a mere three sentences! Ass.
My point is unchanged. All the pretty charts and the discussion of percentages of GDP undermine the application of common sense to the problem.
Common sense is not an answer. Common sense is an excuse to be divisive and play "my way or the highway" politics. None of the things you say is demonstrated by common sense, except for the comment about debt (which, by the way, is wrong, because you're conflating the functions of households with the functions of government). Seriously, have you actually demonstrated a single one of these things? Can you even make a logical argument for them, or are we back in "here's the way I misremembered the 1950s so that's the way it's always got to be" mode again now that you're done with your offensive dismissal of people with ideas different than yours?
We have too much government.
That's a normative statement, not a positive one. Try again.
We can't afford it
I'm sure we could. Germany collects 40% of its GDP in taxes and the country hasn't even fallen into the ocean yet. I bet we could collect an amount equal to our spending.
nor, if we thought about it, do we really want it.
The American people are not unequivocal about that. Not even slightly. How many elected officials in this nation wouldn't expand a single item in the budget? Who doesn't have a pet project?
We have a huge amount of debt that needs to be paid.
Or not paid, and kept around, like the rest of the free world does. Again, the US government is not a 47-year-old trying to retire.
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For shits sake, why must the age card always be pulled when someone younger has a differing opinion? Enough people have weighed in on this topic that I will leave it at that.
Or not paid, and kept around, like the rest of the free world does. Again, the US government is not a 47-year-old trying to retire.
I disagree with the notion that we can just keep raising the debt ceiling, keep our debt around and everything will be just fine. The rest of the free world is also having debt issues (Europe anyone?), so I am interested to hear your examples with regards to that.
I think increasing revenues, improving efficiencies, cutting in areas that are being served by the private sector, and some form of entitlement reform is urgently needed.
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And I'm tired of faux fiscal conservatives who fail to acknowledge that this nation's military (i.e., waste) spending is out of control. When you spend more than the next 20 largest military forces combined, you have a "war" problem.
Ok.....please go back and remind me where I said we should increase defense spending and by under no circumstance should it be cut, please please show me. Actually, I think I said it could be cut and run more efficiently. Actually, I also think it was part of the sacred cows comment.
That said, defense is an important role of the government and we should spend more than any other nation for a number of reasons - population, geography and economically we are significantly larger than most other countries and we have been playing global police officer (although not always requested). Is this for the better or worse, I don't know, but it seems worse because any time we signal that we may sit something out the world gets mad, any time we want to get involved the world gets mad. Either way someone is pissed at us.
Should we stay the hell out of others business - again I don't know. Would I like to - yes, but what are the consequences. 9/11 happened because we didn't keep to ourselves and our support of Israel (mostly because of this) - but if we stayed out of it then Israel may not exist today. The US has muted its support of Israel under the current administration - which is fine as long as we don't hang them out to dry, I am all for letting them handle their own business for a while, but when they take actions on things we can't then tell them to back off.
Our defense helps with this - it may be schoolyard tactics but some times the fact that "I am bigger than you" is enough. The cold war was "We are both big and will both die if we fight, so lets not". I wouldn't want to be on the other side of the coin where another country is threatening us with those terms. It is not good for anybody if Iran does go nuclear - although there is no need to rush into it either, we know how that works out - can you say WMD - but you can't wait to long either. Politicians suck IMO, but for these types of decisions I am so glad I am not a politician - these are some tough f'in calls to make.
Why have we not completely exited Iraq and Afghanistan - because it is not that simple.
Somalia is a major issue and while the regime there tears apart the country and its people it really is of little consequence to the US. Diplomacy first but at some point (maybe it has passed, maybe it hasn't) there are many people there suffering that need help - and we have the resources to do that if and when the time comes.
So yes defense is important and should be heavily funded, but it doesn't mean it can't be cut.
Exactly. That said....
What follows is a litany of ideologically charged justifications for U.S. global hegemony, which is precisely the point.
To repeat, the faux fiscal conservatives talk a good game about cutting waste spending, but when it comes to the military budget -- and unlike most, I find all spending on weapons and such to be "waste" spending, i.e., completely worthless for the purposes of bettering and improving society -- they'll give you a million reasons why it shouldn't be slashed to the bone. At least with the social security check I know granny has a little coin to buy some food and pay some rent. The lefty inside me is okay with that. I'm still not sure what the social utility of a carrier battle group is, or why we have 11 of them when most (of the few countries that do) have 1 if any at all. For defense? Yeah, right!
When the clowns in charge are willing to take military expenditure down to 2-2.5% of GDP while relinquishing this silly desire to "police" the world -- and you're right, nobody asked us to play cop -- then real progress can be made toward rectifying our national budgetary issues. Until then, I view the recent "fiscal cliff" media show as just another ploy by the one percenters to grind the social welfare system into a Randian pulp.
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Spoken like a true 20 year old!
You know what? I can't stand 20 year olds. No, seriously. I mean, I'm 40, got a wife, two kids, a crazy business, slight weight issues, elderly parents who need assistance, dysfunctional in-laws, confused nephews, divorced friends, etc. Basically, I have absolutely nothing in common with any of these fucktards and their dumb ass ideas and silly problems.
That said, Grant is a different breed of cat. I know he'll get pissed and try to defend his generation. But he really shouldn't. They're completely fucking lost. He's not.
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I have been ignoring this thread because it doesn't interest me much.
However, mods have been asked to lock this thread as it has gotten out of hand.
I am loathe to do this, but also don't care for the personal attacks and negativity here, quite unbecoming of the people posting.
I understand political discussions always get a bit tetchy, but can we return to civility? Otherwise, if we're done here, just let me know and we can move on to less sensitive areas. :)
Cheers!
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If you make or have enough money that means testing would prevent you from receiving your social security benefits, then you are not destitute. Therefore means testing is in keeping with the original intent of SS.
I don't have a problem with that, I absolutely think it should revert back to what was orginally intended - in which case the payments would be small enough to just to cover basic living needs (and this doesn't mean a single family home and vacations) and the retirement age should be increased to 75 now. I wonder how that would go over.
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Spoken like a true 20 year old!
You know what? I can't stand 20 year olds. No, seriously. I mean, I'm 40, got a wife, two kids, a crazy business, slight weight issues, elderly parents who need assistance, dysfunctional in-laws, confused nephews, divorced friends, etc. Basically, I have absolutely nothing in common with any of these fucktards and their dumb ass ideas and silly problems.
I've retyped my response to this a number of times and can't come up with anything that doesn't make me sound like a complainypants, so I'll leave it at the fact that I understand your view, but find it bordering on ageist(similar to racist.)
I'm not offended, but if I typed something that came off how this comes off to me, I would like to be made aware of it so I could work on expressing my opinions in a better manner.
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Exactly. That said....
What follows is a litany of ideologically charged justifications for U.S. global hegemony, which is precisely the point.
To repeat, the faux fiscal conservatives talk a good game about cutting waste spending, but when it comes to the military budget -- and unlike most, I find all spending on weapons and such to be "waste" spending, i.e., completely worthless for the purposes of bettering and improving society -- they'll give you a million reasons why it shouldn't be slashed to the bone. At least with the social security check I know granny has a little coin to buy some food and pay some rent. The lefty inside me is okay with that. I'm still not sure what the social utility of a carrier battle group is, or why we have 11 of them when most (of the few countries that do) have 1 if any at all. For defense? Yeah, right!
When the clowns in charge are willing to take military expenditure down to 2-2.5% of GDP while relinquishing this silly desire to "police" the world -- and you're right, nobody asked us to play cop -- then real progress can be made toward rectifying our national budgetary issues. Until then, I view the recent "fiscal cliff" media show as just another ploy by the one percenters to grind the social welfare system into a Randian pulp.
We will agree to disagree on this. Having a strong military is absolutely essential, it is foolish to think otherwise - how it is deployed and how much it is funded is a different story, not playing global police and reduce spending to 2.5% of GDP may be ok, maybe not - I don't know but it is worth exlporing.
And why do we have 11 carriers when other coutries have only one if any - partly as we discussed is that we play police officer so they don't feel the need to invest in this (it is not a coincidence that Canada spends little on defense), partly we are dealing with a lot of small nations that couldn't afford it, and partly because a lot of these countries are land locked. Eliminating the roll of police officer would likely reduce the amount of defense spending that is needed (maybe we would only need four carriers then) - I bet by simply doing this we could cut the spending in half or more.
But this also would have consequences that may not be acceptable such as when tyranny is happening elsewhere then we have to accept it as not our problem so those moments of genocide would be tragic but deemed an acceptable loss because we wanted to spend less. The liberal in you should view this as the reason why it is important to have a military that is 2-3x more than what is needed to protect the US directly.
It would also result in about 500,000+ fewer jobs (direct military personnel and defense contractors) but that is different argument.
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If no one is willing to give up any of their public services - let's stop half-assing it and properly fund it. Stop shifting the costs to the future. If we, the public in general, want healthcare, comfortable retirement once you hit 67, safety nets, education and whatever else to all be entitlements and we want to police the world, protect our interests locally and abroad, and fund foreign aid. Fuck it. Let's do it. We really are wealthy as hell as a nation and can probably afford to do it all. But let's also pay for it, now. And let it all come out of everyone's paycheck, dividend returns, and capital gains so they can directly see it, feel it, and, ultimately, decide if it really is worth it.
I wish they'd go for everything: Let the previously enacted (Bush) tax cuts expire, let the payroll tax cuts expire, reign in all spending including defense, medicare, social security, come up with an overall tax code that makes sense and is less than 1 million pages, you name it. And I don't just mean "going off the [current] cliff." I mean reign it all in for the future as well, so that the debt can be wiped out in 10 years or less.
There it is.
Couldn't be summed up better.
I read this whole thread, was happy to see many things I would have said get expressed, so I don't have to (where were you guys in the Opinions on the 99% thread??!?), so only a couple comments from here and there.
-This was alluded to, but never simply stated outright: no one is proposing any tax increases. Allowing a temporary tax reduction to expire is not an increase. If a store has a sale, and the sale ends, they didn't just raise all their prices, they ended the sale.
-Am I the only one who noticed Tooqs chart?
(http://static.cdn-seekingalpha.com/uploads/2012/5/10/saupload_428250-13363801587809994-Michael-Clark.png)
Think about that for a moment. Think about in the context of the common claim that government has too much debt, too much deficit spending, too much waste and inefficiency and therefore jobs done by the government should be turned over to the private sector.
I could see that argument being made between about 1943 and 1952 - when government debt was used to pay private industry for the war effort.
At any other point in time, before or since?
Then there is Swiper's:
(http://www.npr.org/news/graphics/2012/05/pm-budget/gr-pm-budget-462-03.jpg)
that says that DOD, SS, and Medicare alone account for more than 50% of the entire budget - which means that if anyone is serious about reducing the "size of government" or the deficit, that is where the focus needs to be, period.
If a person drives a leased 2011 GMC Yukon 50 miles to work everyday, they don't become Mustachian by clipping coupons.
Even anti-big-government tooqk is defending having 4 carrier groups! Sorry, but you are falling under that "poll finds American's unrealistic, want it all" category the DoubleDown mentioned. The military IS our "big government". What do we do when a tyrant does bad things somewhere? We send a few troops, along with every other country in the UN peacekeeping force. That's what the UN is for. Our "interests" are being threatened overseas? Well, then our intervention is no longer being a cop. Its being a bully.
-Just in general, when people say they want "smaller government" or to "cut spending", do they ever have any specific idea what that means? Nothing the Republicans say officially or on record ever seems to be specific. These discussions rarely are specific (though thankfully some here agree that military, SS, and medicaid should be "killed and eaten" - even if the person who originally said it now wants to just put the largest cow on a diet afterall).
Exactly what evidence is there of a massive level of waste and inefficiency, over and above what happens to ANY bureaucracy of a certain size? We aren't going to have a government the size of a single-location-independantly-owned-and-operated small business. We aren't even going to have one the size of a regional limited liability partnership. We might come close to a federal government the size of a mid-size international corporation - IF we divided all 50 states up into their own country (perhaps not a terrible idea, but noones suggesting it as a means to reduce waste). In case you hadn't noticed, this is a BIG FREGGIN COUNTRY. With a whole lot of people. Any large bureaucracy, public or private, inherently ends up with some level of waste and inefficiency. What reason is there to think that simply slashing budgets would automatically make it all go away? What percentage of the total budget do you think is being wasted? 1%? 5%? 10%? That's a still whole lot less than the military, SS, or medicare, less than all of the "safety net" programs combined, even less than "everything else" combined. So, eliminating waste is not going to "shrink government" by any significant amount, and will not solve any problems. What's left? You have to start actually cutting programs. Ones which are large enough to have an impact. Which takes us back to the first two quotes.
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Even anti-big-government tooqk is defending having 4 carrier groups! Sorry, but you are falling under that "poll finds American's unrealistic, want it all" category the DoubleDown mentioned. The military IS our "big government".
Well down from 11 currently would be a pretty big cut, would it not? We do have a lot of coasts/ports/etc to protect. So no I don't think it falls under the category of "want it all". Also nevermind the fact that I am not a military or defense expert - so maybe we need 11 or 0 or 5, who the heck knows.
What do we do when a tyrant does bad things somewhere? We send a few troops, along with every other country in the UN peacekeeping force. That's what the UN is for. Our "interests" are being threatened overseas? Well, then our intervention is no longer being a cop. Its being a bully.
I agree with this and I am ok with that, which is why I said we could cut our defense spending significantly if we simply focused our defense efforts solely on defending the US. My points earlier weren't intended to suggest that I want it all, it was quite the opposite and intended to say you can't have it all - there are always choices and consequences for those choices - you can't expect to cut the defense budget in half AND still be able to protect the world (if that is your desire). I also said that I don't know if our protecting the world results in a net positive/negative/neutral to US or the world, and if we stopped what would the unintended consequences (positive or negative) be - like I said I don't know.
Also agree that we shouldn't be protecting our interests overseas, because we shouldn't and don't any actual interests overseas.
-Just in general, when people say they want "smaller government" or to "cut spending", do they ever have any specific idea what that means? Nothing the Republicans say officially or on record ever seems to be specific. These discussions rarely are specific (though thankfully some here agree that military, SS, and medicaid should be "killed and eaten" - even if the person who originally said it now wants to just put the largest cow on a diet afterall).
Come on! The killed and eaten comment was more to the aspect of eliminating them AS sacred cows and not to disband the programs - as I said above a strong defense is critically important but so to is having safety net programs, but they can all be cut.
And read my other comments about what both sides consider cuts - they are just slower spending rates - I want to see actual cuts as in our spending overall next year is lower than this year, shit I would even settle for flat.
Exactly what evidence is there of a massive level of waste and inefficiency, over and above what happens to ANY bureaucracy of a certain size? We aren't going to have a government the size of a single-location-independantly-owned-and-operated small business. We aren't even going to have one the size of a regional limited liability partnership. We might come close to a federal government the size of a mid-size international corporation - IF we divided all 50 states up into their own country (perhaps not a terrible idea, but noones suggesting it as a means to reduce waste). In case you hadn't noticed, this is a BIG FREGGIN COUNTRY. With a whole lot of people. Any large bureaucracy, public or private, inherently ends up with some level of waste and inefficiency. What reason is there to think that simply slashing budgets would automatically make it all go away? What percentage of the total budget do you think is being wasted? 1%? 5%? 10%? That's a still whole lot less than the military, SS, or medicare, less than all of the "safety net" programs combined, even less than "everything else" combined. So, eliminating waste is not going to "shrink government" by any significant amount, and will not solve any problems. What's left? You have to start actually cutting programs. Ones which are large enough to have an impact. Which takes us back to the first two quotes.
You are absolutely right, but that doesn't make it right not to try to curb it. Also, lets say there is 10% waste in government - why wouldn't it help to say every department has to cut actual spending by 10% - to your point there would still likely be waste (probably less than 10%) but the overall spending would be down 10%.
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Come on! The killed and eaten comment was more to the aspect of eliminating them AS sacred cows and not to disband the programs -
If it's any consolation, that's how I understood your statement. IMO, considering the magnitude of our financial issues, there should not be any sacred cow, in the sense that everything should be on the table. Reading the other comments in response to the 'shot and eaten' comment, my interpretation seems to have been in the minority.
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Exactly what evidence is there of a massive level of waste and inefficiency, over and above what happens to ANY bureaucracy of a certain size? We aren't going to have a government the size of a single-location-independantly-owned-and-operated small business. We aren't even going to have one the size of a regional limited liability partnership. We might come close to a federal government the size of a mid-size international corporation - IF we divided all 50 states up into their own country (perhaps not a terrible idea, but noones suggesting it as a means to reduce waste). In case you hadn't noticed, this is a BIG FREGGIN COUNTRY. With a whole lot of people. Any large bureaucracy, public or private, inherently ends up with some level of waste and inefficiency. What reason is there to think that simply slashing budgets would automatically make it all go away? What percentage of the total budget do you think is being wasted? 1%? 5%? 10%? That's a still whole lot less than the military, SS, or medicare, less than all of the "safety net" programs combined, even less than "everything else" combined. So, eliminating waste is not going to "shrink government" by any significant amount, and will not solve any problems. What's left? You have to start actually cutting programs. Ones which are large enough to have an impact. Which takes us back to the first two quotes.
You nailed it. In my opinion - this is the primary source of the problem right here. This country is too big to be efficient at the federal level. I won't go so far as to say that we should divide into 50 countries - but I do think that a small federal government (provide for national defense, foreign trade agreements, decide on interstate disputes, coordinate inter-state law enforcement, enforce the constitution, etc) should be the goal and then let each state decide and implement, individually (or collectively I suppose if say some of the smaller states in the north east wanted to combine to offer state run medical care to their residents/citizens) their own policies, public services (social security, medicare, etc), moral policies (abortion, gay marriage, drug legalities) as their citizens decide.
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You nailed it. In my opinion - this is the primary source of the problem right here. This country is too big to be efficient at the federal level. I won't go so far as to say that we should divide into 50 countries - but I do think that a small federal government (provide for national defense, foreign trade agreements, decide on interstate disputes, coordinate inter-state law enforcement, enforce the constitution, etc) should be the goal and then let each state decide and implement, individually (or collectively I suppose if say some of the smaller states in the north east wanted to combine to offer state run medical care to their residents/citizens) their own policies, public services (social security, medicare, etc), moral policies (abortion, gay marriage, drug legalities) as their citizens decide.
I think you just described the EU.
I'll pass.
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Or rather he described the US system before federal government got so much power via stuff like interstate commerce clause rulings.
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Or rather he described the US system before federal government got so much power via stuff like interstate commerce clause rulings.
And before that Civil War thingy...
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Do you mean corporate welfare or like, welfare welfare, an exceedingly difficult and humiliating program to go through which was majorly reformed, but that states have the ability to modify requirements if they absolutely need to?
No, neither. I mean social security and medicare, which currently are not means tested and both target the single richest demographic in the country.
Aha! Okay I see, I see. So you've totally just given me some delicious thought meats and I hope you'll go down this rabbit hole with me? Feel bad for my husband, imagine how terrible it must be to be married to a neo-hippy turned data nut.
Okay so say we do implement some kind of means testing; where exactly where we draw the lines for qualifications? Would we, say, nullify contributions from those who make over a certain figure? Maybe $250k? Once they reach that mark could they receive payments from the government, with interest, on their contribution?
But if we only rely on those who make mid to low income for Social Security, the program risks becoming severely underfunded, while also ignoring that thing that so many people hate to admit exists; luck. (O, Fortuna, velut luna, statu variabilis) So where do we draw the line? And who gets to decide who meets the "means" and who doesn't? Are we willing to admit that the needs of the Republic (most Roman citizens understood this concept, alas it seems it has been lost on their American children) may outweigh the base needs of the Equestrians?
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I think this may be unprecedented:
I just checked the responses to something I wrote in a political / economic discussion board, there were several replies to it and...
There is nothing that I disagree with in any of them! I have no follow up comments. Now if only this thread could get the attention of congress....
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...
The problem with your question is that we as the citizenry have two schizophrenic expectations for SSI, and like most people who discuss the matter you're equivocating between the two. With one set of rhetoric, it's like a 401k: you pay into it, you draw out of it an amount related to what you paid into it, and you're 'entitled' to it because it's "your" money. But on the other hand, we also talk about it as a form of welfare guaranteeing that no citizen should have to die destitute. It can't be both: it fails miserably, as evidenced by the horrible fiscal state its now in. You have people on one hand demanding that means testing not be implemented into it because it's their right to draw out of their SS that they paid into, and on the other demanding that the program not be cut and benefits not be changed because it will impoverish the elderly poor.
My preference would be to means-test the shit out of SS and increase the tax expenditures subsidizing retirement savings. Then SS would lose the dual nature, and it would be only the welfare for the poor, and individual retirement savings would really be yours and nobody could take them away while the government still supported our attempts to save and retire both fiscally and morally.
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YOU talk about Social Security as if it were a form of welfare. The problem with that idea is Social Security evolved into something else not that long after it was created. It has been sold to the American worker and taxpayer as one of the three legs of the retirement stool at least since the 1970's. None of the folks that are retired or have paid into the system for many years agreed to pay for yet another welfare system from which they would not benefit. They were paying into a system from which they expected a defined benefit.
This sort of rationalized, revisionist history-based proposal of theft should be an object lesson to the younger folks reading this forum. One of the biggest benefits of ER is getting out of wage based taxation schemes. Asset based income is not subject to FICA and the Medicare tax. Even if the tax cuts expire, asset based income, especially real estate income, will continue to be preferentially taxed.
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Wait, why is this my fault?
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YOU talk about Social Security as if it were a form of welfare. The problem with that idea is Social Security evolved into something else not that long after it was created. It has been sold to the American worker and taxpayer as one of the three legs of the retirement stool at least since the 1970's. None of the folks that are retired or have paid into the system for many years agreed to pay for yet another welfare system from which they would not benefit. They were paying into a system from which they expected a defined benefit.
This may be true, which was part of what I said above, but it was based on poor assumptions or factors that changed dramatically over time, so there is no reason why it can't or shouldn't be changed now - means testing may make sense at some time but right now the best change and least favorable would be to up the retirement age to 72 (even for boomers).
This sort of rationalized, revisionist history-based proposal of theft should be an object lesson to the younger folks reading this forum. One of the biggest benefits of ER is getting out of wage based taxation schemes. Asset based income is not subject to FICA and the Medicare tax. Even if the tax cuts expire, asset based income, especially real estate income, will continue to be preferentially taxed.
Exactly - don't rely on current or future politicians to determine your fate.
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Generally, people with more experience are paid more because of.......their experience! In other words, experience has value.
Spoken like a true 55+ year old ;-)
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Exactly - don't rely on current or future politicians to determine your fate.
Couldn't agree more!
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I think the takeaway from all this is that Grant shouldn't have exposed his age in his public profile. :)
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I wish they'd go for everything: Let the previously enacted (Bush) tax cuts expire, let the payroll tax cuts expire, reign in all spending including defense, medicare, social security, come up with an overall tax code that makes sense and is less than 1 million pages, you name it. And I don't just mean "going off the [current] cliff." I mean reign it all in for the future as well, so that the debt can be wiped out in 10 years or less.
One semantic point about "reign in all spending including defense." The way that sequestration is currently written is on January 3rd there is a 10% cut to budgets. In order to meet that lower budget level requires more than just "no new programs." Some programs would need to be cut. The problem arises from the way that defense contracts are written with cancellation fees.
Imagine you sign a contract with some painters to paint your house. In your contract it will say "If they do a shitty job, you don't have to pay them" but it also will say "if you decide you no longer want them to paint it before they are done, you still have to pay 50% as a cancellation fee." All defense contracts (for the most part) have a cancellation fee.
If sequestration happens the way it is currently written, there will be HUGE cancellation fee's paid by the government to defense contractors. I work for a defense contractor and even I'll say this is in NO ONE's best interest. The government pays money for non-delivered items so they pay more and get less and have 10% less budget for the year to fix the problem.
So, if congress fixes nothing else, can they please change sequestration to a ramp down schedule? How about budget levels go down 2% every year for the next 10 years or something like that? That way, we wont have the huge amounts of waste and inefficiencies that a 10% cut in one year will cause.
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Also a while ago, someone was saying that you can't compare historical marginal tax rates because different things were taxed. Instead one would need to look at historical effective tax rates which fortunately the Congressional Budget Office has done this for 1979 - 2005 : https://www.cbo.gov/publication/41654
In summary, effective tax rates on the poor have steadily gone down, and effective tax rates on the rich have wavered a little but we are currently on one of the lower effective rates (and the 90's were one of the higher effective rate times)
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Get your cash ready! The ride is about to begin.
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Get your cash ready! The ride is about to begin.
Congress just killed Santa's rally! lol.
When did compromise become such a dirty word in the hallowed halls of Congress?
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2010.
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And the winner is.... The political class
Taxes up $600 billion
Spending up $4 trillion.
Full steam ahead and damn the torpedoes
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(http://www.collectivedata.com/blog/wp-content/uploads/2012/06/dont-kick-maintenance-down-the-road.jpg)
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Well said.