You are forgetting that to balance a budget you need to consider income as well as expenditure.

What is the usual US inflation rate? What is the current annual population increase?

Steve:

If the current budget were cut, we would not have layoffs. Please. I could cut $50B without losing a single job. And, that would take about two days.

I'd like to hear more about that.

There's a graph at the end of this article which shows the CBO forecasted deficits over the next 10 years. Of course, if the economy gets worse, or interest rates change, or if we have another war, it just gets worse.

http://www.msnbc.msn.com/id/43967924/ns ... itol_hill/

danivon wrote:You are forgetting that to balance a budget you need to consider income as well as expenditure.

No, I'm not. It's what we do.

However, it doesn't require a post-doctoral study in economics to realize you can't have a $2.2T income and spend $3.8T. It also doesn't take a committee of economists to know that raising taxes on the rich (if you actually ONLY include the rich) and closing a few loopholes will get you $1.6T.

I would eliminate all government subsidies for oil, corn, and green energy. I would close loopholes. I would raise taxes 4 or 5% on those making a million a year.

Then I would cut like a brand new pair of Fiskars. I would reform military contracts.

$50B? A speedbump, to use the President's word.

What is the usual US inflation rate? What is the current annual population increase?

Both are variable.

Better questions:

1. Are all the programs we have now effective?
2. Are all the programs we have now efficient?
3. Is there overlap that should be cut (inow, several programs allegedly doing the same thing. I know we have a multitude of job-training programs, as but one example).
4. Are there areas in which we spend money and we have little to no idea what is happening to the funds (the number of cell phones, vehicles, buildings, etc. the government owns are almost beyond comprehension)?

Just saying, "Well, we have more people and inflation is a fact of life, so we have to raise our spending" is not an efficient way to run anything.

This law just signed by the Messiah is the worst legislation we could have done. We would have been better off letting us take our 200 billion a month and pay what we can. It covers SS, Medicare, Medicaid, military and interest on the debt.
So lets really look and see what we got out of this as the American people.

1. In the first 2 years the cuts are 67 billion, it is all back ended like it has been historically(Ronaldus Magnus and Bush I) and then never achieved, ever.
2. The Messiah gets his two trillion.
3. United States will still be downgraded from the AAA, increase in interest rates.
4. This can't be discussed again until after the election.
5. The gang of 6 or 12 or whatever it is, are already talking about raising taxes.
6. Medicare, Medicaid, SS are still going to go broke.
7. And finally the DOW dropped 170 points at the time of the signing, we are in happy land now.
How is this any worse then so called defaulting.
I am from Wisconsin and I am disappointed in Ryan and Duffy, Ron Johnson our Senator is the only one who voted NO for us. Where is Cantor in this.


Wise people at Redscape please tell me the benefits to this bill?

Doctor Fate wrote:

What is the usual US inflation rate? What is the current annual population increase?

Both are variable.

I know, but surely we have a rough idea what they are on average and currently?

I'll answer, seeing as you want to avoid the simple questions. Average inflation in the US over the past decade has been about 3%. It was lower in 2008-10 due to the recession, but for June 2011 the annual rate was 3.56%. That's CPI (consumer price inflation). So 3% seems like a reasonable assumption for the next few years. (source http://inflationdata.com/inflation/Infl ... rentPage=0)

The current US population growth rate is 0.977% (source http://en.wikipedia.org/wiki/Demographi ... rowth_rate)

Combined, these would mean an increase in baseline costs of about 4%. That's before, however, you consider that inflation is not the same across the whole economy (medical inflation is higher) or that some demographic changes have a greater effect (such as the imminent baby-boomer retirement leading to a large increase in the number of people over 65).

Better questions:

1. Are all the programs we have now effective?
2. Are all the programs we have now efficient?
3. Is there overlap that should be cut (inow, several programs allegedly doing the same thing. I know we have a multitude of job-training programs, as but one example).
4. Are there areas in which we spend money and we have little to no idea what is happening to the funds (the number of cell phones, vehicles, buildings, etc. the government owns are almost beyond comprehension)?

All of these are indeed areas that can be looked at. It comes under the 'Y' side of the equation - reduce 'Y' and you reduce 'X' this year and 'X+dx' next year. But there will still be an effect from inflation and other growth factors.

Just saying, "Well, we have more people and inflation is a fact of life, so we have to raise our spending" is not an efficient way to run anything.

I'm not saying that you 'just' account for inflation and other predictable growth. What I'm saying is that this is a normal part of baselining before you go into more detail. It's not crazy to. Like you, I've had to budget for a small organisation. Our major outgoing was rent. We would have been crazy not to assume rents would increase year on year (not that this stopped us from looking for cheaper places to hire, but even then the price did not stay static for long).

DEFIANT wrote: How is this any worse then so called defaulting.

Have you ever been declared bankrupt? It's not something that's usually a good idea for a person, a company or a country if they can possibly avoid it.

If the US defaulted, bond rates would rise very quickly. That would increase the cost of borrowing (currently about 3%), making it harder to avoid further defaults. It would likely snowball to the point where you have to do an Argentina.

Argentina is doing ok now, but defaulting was a very painful experience over there.

Danivon,
So if it makes it harder to borrow, then we would have to live within our means, correct? Currentlhy, this could snowball into a Greece, we are showing no fiscal responsibility, we either default early or later, we cannot continue this spending spree, it has to come in line. Our AAA rating will suffer and interest rates will go up, so it is either a slow decline or quick. The only true reason that I can see for not defaulting is it is in the constitution that we pay our debts and also it is not fair to the Chinese, who I also blame helping getting us into this, but we did it eyes wide open.

But you would have to agree that we cannot spend like a drunken sailor and we are taxed enough, between Fed, State, Local, Sales we are already paying 50% in taxes and that's not what our forfather's envisioned. So spening has to come down, or default is inevitable.

DEFIANT - you are not paying 50% in taxes. The tax burden in the USA is about 25%. Apparently, it's lower than it has been for 50 years: http://www.usatoday.com/money/perfi/tax ... -low_n.htm

Sorry to interrupt your rant with some facts.

danivon wrote:

Doctor Fate wrote:

What is the usual US inflation rate? What is the current annual population increase?

Both are variable.

I know, but surely we have a rough idea what they are on average and currently?

I'll answer, seeing as you want to avoid the simple questions.

I'm not avoiding anything other than a really simplistic (at best) and tangential point. Yes, inflation exists. Yes, population increases.

However, that does not answer efficiency or effectiveness questions. Who cares what inflation is if all the money, or most of it, in a given program might as well be thrown into the ocean? Who cares that the population increases if the program being funded has no measurable impact?

Our government is on an unsustainable path. What part of "you can't borrow 40% of what you spend on a permanent or semi-permanent basis" do you not understand?

It's not crazy to (baseline).

Well, I suppose that's true--if all expenses have been measured and found to be effective and necessary. Has this ever been done in the history of the United States?

The obvious answer is "no." If it was "yes," we would not have duplicative programs. We also would not be studying the sexual issues of prostitutes in China, the work ethic of shellfish, and the effects of pornography on women. These are all actual expenditures of the US government.

What I am saying is that "baselining" without first examining everything in the budget is a recipe for disaster. It's one of the reasons why we are where we are--no one holds these programs accountable.

Why should next year's State Department budget go up 10% (as it is scheduled)? Does Hillary need all new pantsuits?

It's all well and good to insist on taxing the rich, etc. But, as American taxpayers, don't we have a right to expect our money to be well-spent? If so, the current blind "baselining" is, in fact, idiotic. It guarantees we will waste money--many billions.

Like you, I've had to budget for a small organisation. Our major outgoing was rent. We would have been crazy not to assume rents would increase year on year (not that this stopped us from looking for cheaper places to hire, but even then the price did not stay static for long).

Good example. If you were the US government, you would budget for an 8% increase. If it went up 3%, you would go on the evening news and pronounce that you had cut your expenses 5%. Actually, if you were the government, they would know you budgeted an 8% increase, so they would raise it 10% and you would borrow the other 2%.

Our government is not run like a business or like a home. It is run as if there are no limits on what is reasonable to spend. It is fiscal insanity to run any organization the way our government is run.

Governments are not businesses or homes, and there are major differences. Still many households are comfortably at a debt level of 300%, and businesses will often start out with large debts and negative profits.

As for the rest, you have totally ignored me. I said that you can and should look at savings.

danivon wrote:Governments are not businesses or homes, and there are major differences. Still many households are comfortably at a debt level of 300%, and businesses will often start out with large debts and negative profits.

We are not starting out. We are not buying a house.

There is no reason for a government to borrow 40% of what it spends and to plan for $1T deficits as far as the eye can see.

As for the rest, you have totally ignored me. I said that you can and should look at savings.

Democrats, and the President, are reflexively incapable of cutting anywhere but the Pentagon.

I agree with your first point. Perhaps the fact that tax revenues are at a 50 year low is a place to look as well?

Oh, no, because no business or household would ever look at ways to increase income if it had financial problems, that way lies madness!

Danivon,
Don't quite know what to make of the USA today stats but I did a little research at my level from my tax returns.
This is what it looks like:
Federal 9.0%
Fica 4.0
Medicare 1.4
State 5.1
Property 9.0
Sales tax 5.5 on anything except food
Total 34.0

This does not include all the tax vultures coming in on Cable, Internet, Phone, Cell Phone, Gasoline, Energy every month. All things to run a household and I think you can see how edging in on 50% of your income. Also I live in Wisconsin, not states like California, New York or Illinois. I also don't have many deductions, house is paid for, all but one vehicle is paid for and kids out of college. These rates of course are after the Bush tax cuts, if revoked, goes way higher, marriage penalty tax and such. I think your USA article needs to live in realsville not some hand picked average.

"I agree with your first point. Perhaps the fact that tax revenues are at a 50 year low is a place to look as well?"

Danivon, maybe the reason for the 50 year low would be a 9.2 U3 Unemployment rate or better yet the all inclusive U6 unemployment rate of 17-18%, I love how liberals right away go after those that are paying taxes indicating we are not paying enough, how about making the tax base broader so there is more revenue coming in. Worked for Ronaldus Magnus.
You know, encourage business, let them do what they do and start employing people.