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How would you solve the US deficit?
November 14, 2010 7:02 AM   Subscribe

How would you solve the US deficit? Interactive US national budget calculator from the NYT.
posted by modernnomad (104 comments total) 19 users marked this as a favorite

 
I'd cut military spending and raise taxes for rich people. How else?
posted by box at 7:05 AM on November 14, 2010 [20 favorites]


I reduced military spending, raised taxes for wealthy people and just solved the $1,355 billion deficit in about 30 seconds. I could be a senator.
posted by pecknpah at 7:15 AM on November 14, 2010 [29 favorites]


I'm all for cutting military spending too, but can it be done without putting a helluva lot of people out of work?
posted by Brocktoon at 7:16 AM on November 14, 2010 [2 favorites]


Using their chart.

Cut foreign aid in half.
Eliminate farm subsidies
cut 250k government contractors
reduce nuclear arsenal and space spending
reduce navy and air force fleets
cancel or delay some weapons programs
reduce number of troops in Iraq/Afghanistan to 30k by 2013
return estate tax to clinton era lvls
millionare's tax on income over 1 million
eliminate tax loopholes but keep taxes slightly higher
reduce mortgage interest deduction by converting to credit
national sales tax
carbon tax
bank tax

problem solved LOL
posted by Max Power at 7:19 AM on November 14, 2010


I'm all for cutting military spending too, but can it be done without putting a helluva lot of people out of work?

And our current policies haven't put a helluva lot of people out of work?
posted by Benny Andajetz at 7:20 AM on November 14, 2010 [9 favorites]


The Guardian did something similar for the UK.
posted by djgh at 7:21 AM on November 14, 2010


Without projected first- and second-order effects, this is really just a "liberal ideology" simulator.

Yeah, I could cut military spending in Afghanistan, but what would that do to foreign aid needs?

Yeah, I could implement a carbon tax, but what would that do to the price of consumer goods and government spending on on welfare and other entitlement programs?

Yeah, I could cut disabilities for veterans who weren't wounded in battle, but won't that just move the burden to Medicare / Medicaid?

I'm sure NYT had good intentions, but this exercise only reinforces over-simplistic views of the economy. It's no better than FoxNews saying that if we would just pull welfare benefits, all those lazy no-good-niks would get off their butts and find jobs.
posted by bpm140 at 7:22 AM on November 14, 2010 [19 favorites]


I notice that ending or reducing the War on Drugs is not an available option.
posted by Faint of Butt at 7:25 AM on November 14, 2010 [62 favorites]


>I'm all for cutting military spending too, but can it be done
>without putting a helluva lot of people out of work?

And our current policies haven't put a helluva lot of people out of work?


Yes, but the goal is to make things better, not just make things suck differently.
posted by bpm140 at 7:25 AM on November 14, 2010 [4 favorites]


bpm140: exactly. Everything is interconnected, and without taking that into account this is a silly exercise. And it's interesting that a lot of things that probably most, if not all, conservatives agree on didn't even make the list: cuts to food stamps, TANF, Head Start, Pell Grants, etc. And what about privatizing social security? Terrible idea with a huge short term cost, but in the long run it would do a lot to save the government money. I'm not saying those are good ideas, but the fact that they're not even on the list of possibilities makes this an overly simplistic feel-good exercise for people with a particular worldview.
posted by notswedish at 7:27 AM on November 14, 2010 [4 favorites]


I fixed it with money to spare.
posted by empath at 7:29 AM on November 14, 2010


I'm all for cutting military spending too, but can it be done without putting a helluva lot of people out of work?

An army of unemployed soldiers on the streets, nothing can go wrong with that.
posted by empath at 7:31 AM on November 14, 2010 [2 favorites]


won't let me cut nukes without cutting NASA. Damn you, NYTimes
posted by volt4ire at 7:31 AM on November 14, 2010 [6 favorites]


They're kind of related. I mean the whole point of the space program was to have a politically viable excuse to build, design and maintain gigantic fucking rockets.
posted by empath at 7:33 AM on November 14, 2010 [1 favorite]


It was pretty easy, cut the military and raise taxes. The only thing I felt bad about was the national sales tax cause that is pretty regressive.
posted by furiousxgeorge at 7:33 AM on November 14, 2010


I too, as an unelected individual, can solve all our problems.
posted by nomadicink at 7:34 AM on November 14, 2010 [3 favorites]


- Earmarks
- Cut 250,000 contractors
- All military except non-combat compensation
- Down to 30,000 by 2013
- Taxes to Clinton-era levels
- Expiration for income above $250,000 a year
- All of the new taxes (not Bowles-Simpson)

Hello surplus!
posted by djgh at 7:35 AM on November 14, 2010



An army of unemployed soldiers on the streets, nothing can go wrong with that.


Hire them to do something, anything. It will be cheaper than invasions.
posted by furiousxgeorge at 7:35 AM on November 14, 2010 [4 favorites]


won't let me cut nukes without cutting NASA. Damn you, NYTimes

Yeah. I'd give a lot more money to NASA, after cutting military funding.
posted by nomadicink at 7:35 AM on November 14, 2010 [2 favorites]


This list of items reads like something out of the appendix of "Budget Cuts: How To Get Yourself Assassinated As An Elected Official."
posted by RobotVoodooPower at 7:36 AM on November 14, 2010 [8 favorites]


The important lesson of the chart is that it's nigh impossible to do the Republican mantra of "cut taxes, cut spending" and still somehow get out of a deficit situation.
posted by mark242 at 7:37 AM on November 14, 2010 [3 favorites]


10 percent on capital gains for low-income households and 20 percent for everyone else, while dividends would again be taxed at the same rate as ordinary income.

You're not taxing dividends at the same rate as ordinary income?
posted by I_pity_the_fool at 7:38 AM on November 14, 2010


"Spin off" the U.S. government - $9,136 billion
This option would spin off the U.S. government and treasury offices to an business park in Jamaica and establish a new "Treasurey" department in Washington. You have a T-bill you need to redeem? No, this is the "Treasurey"... you want the Treasury. Talk to those guys down in Kingston. They'll print you up whatever dollars you need and hook you up with some grade-AAA ganja. I mean you'll be messing around at the discount lending window trying to take your dollars back to Babylon and they'll go in the back room and haul out that shit in a 55-gallon barrel. JAH BLESS!
posted by crapmatic at 7:39 AM on November 14, 2010 [3 favorites]


"Liberal ideology simulator"? No, no, no. —A liberal would be leveraging bargain-basement interest rates into massive public works programs that reignite the economy and repair our sagging infrastructure and move us toward green(er) power and transit and and transport and agriculture systems, and worry about the fucking deficit later once the wolves howling around the door have been sent packing.

This is just kinder, gentler austerity bullshit. Flag and move on.
posted by kipmanley at 7:44 AM on November 14, 2010 [33 favorites]


Collect alumminum cans.
posted by jonmc at 7:44 AM on November 14, 2010 [2 favorites]


You're not taxing dividends at the same rate as ordinary income?

Well, yeah.

Why do we make charitable giving a tax deduction? Because we want to encourage that behavior?

Why do we tax capital gaines and dividends at a lower rate than ordinary income? Because it encourages direct investment into business, essentially using private capital to job creation.

Given that unemployment is almost 10 percent, this would seem to be worthwhile.
posted by bpm140 at 7:44 AM on November 14, 2010


THERE'S NO SUBMIT' BUTTON!!!

I fixed the budget by killing loopholes and implementing a carbon taxe and a creating a National sales tax and killing the Bush tax breaks, but I'm SINK (single-income, no kids) taxpayer with no car, which would also make me European.

(European, as in Americans ought to start paying real prices for the crap that goes into their cars and figure out how to live in a world without cheap gas. And while we're at it, how about a tax on people who continue to pump crap into the air?)
posted by vhsiv at 7:45 AM on November 14, 2010


My best option isn't on there. I would take the current US debt 13,719,547,683,746.49 and divide it by the current US population 307,006,550 and send everyone a bill for their share. This comes to $44,688.12. If you can't pay it in your lifetime it's passed onto your offspring. This just formalizes what it already occurring.

I'm pretty sure we'd be making different decisions in life if we knew we each held individual responsibility for our debt. There would be greater accountability.

If this doesn't work we ask people to voluntarily pay down the debt. We have a department in the Treasury dedicated to just this (Dept. G). I sent in my $5. (self-link)
posted by cjorgensen at 7:56 AM on November 14, 2010 [8 favorites]


I'm all for cutting military spending too, but can it be done without putting a helluva lot of people out of work?

Is there something special about military spending that concerns you? Cutting virtually any spending will put people out of work. That's why a lot of people argue that austerity measures during a recession are extremely counterproductive. (The counter argument, which I have some sympathy for, is that sure it'd be far better to do it some other time... but no-one ever does). I'm not sure why we should be particularly more concerned about job losses from cutting the military budget than job losses from any other spending cuts.

And a lot of military spending is more or less piling money into a giant hole, pouring gasoline on it, and lighting it on fire. After murdering a few tens of thousands of people. So it could be convincingly argued that cutting the military budget is actually less bad in terms of job losses than cutting a lot of other spending. There aren't a lot of other endeavors which involve spending billions of dollars to build some shit which we then proceed to explode and/or use to cause other things to explode/
posted by Justinian at 8:02 AM on November 14, 2010 [8 favorites]


My best option isn't on there. I would take the current US debt 13,719,547,683,746.49 and divide it by the current US population 307,006,550 and send everyone a bill for their share. This comes to $44,688.12. If you can't pay it in your lifetime it's passed onto your offspring. This just formalizes what it already occurring.

How about we do the same thing but with progressive brackets based on wealth to determine the shares?
posted by furiousxgeorge at 8:04 AM on November 14, 2010 [14 favorites]


REQUEST FOR URGENT BUSINESS RELATIONSHIP by the Financial Times
posted by The Lady is a designer at 8:12 AM on November 14, 2010 [2 favorites]


Dividends being taxed at a lower rate allows the wealthier among us to drive nicer cars and buy bigger houses in gated communities. Conspicuous consumption has gone way up since Reagan and his trickle down cohorts came into office in 1980.
posted by Daddy-O at 8:17 AM on November 14, 2010 [1 favorite]


Billionaires tax
posted by bonobothegreat at 8:21 AM on November 14, 2010


No problem at all - Hell, I had a surplus before I even got halfway down the page or had to make any "hard" choices.

However, laid out like that, this widget really makes it clear where the real problems come from (and nice to have an "impartial" source confirm my bias) - Gut the military, medicare, and social security, and you have the problem 95% solved.

Good luck getting those passed, however... Between the "need" to maintain a military to keep fighting our wars of aggression, and the Boomers-aka-MeMeMe generation gleefully milking the system for everything they can over the next 30 years, doing any of the above amounts to political suicide.

So, we see exactly what you'd expect - Politicians squabble over the low hanging fruit, a few billion here and there but none of it really adding up to enough to matter.
posted by pla at 8:25 AM on November 14, 2010 [1 favorite]


furiousxgeorge : How about we do the same thing but with progressive brackets based on wealth to determine the shares?

Bigger problem - Why the hell should I have to pay my "share" of a bill, the vast majority of which (as I hinted at above) goes to expenses I consider a complete waste of resources?

But I do agree with your idea in spirit - A few (lesser) fat cats getting multi-million dollar bills might make them question whether or not they really want all those government subsidies and tax breaks for their corporations; and perhaps the poor would stop and consider whether they really want to milk the system or if perhaps they can skip the ER-on-US for that little sniffle this time. And for the middle class - As always, we can and would bear our share of the burden, though it would hurt like hell.
posted by pla at 8:32 AM on November 14, 2010


I did it by raising taxes. I can do this because I am not an American. Hah!
posted by KokuRyu at 8:41 AM on November 14, 2010 [2 favorites]


It's an interesting exercise. I don't get why anyone would choose to allow the Bush tax cuts on incomes over $250k to expire but not allow all of the other Bush tax cuts to expire. In many parts of the country $250k isn't a very good cut-off anyway, so why not just return all of the income tax to Clinton-era levels? Things were pretty good then.
posted by The World Famous at 8:50 AM on November 14, 2010 [1 favorite]


An army of unemployed soldiers on the streets, nothing can go wrong with that.

Hire them to do something, anything. It will be cheaper than invasions.
posted by furiousxgeorge at 7:35 AM


Roll them into a modern Civilian Conservation Corps and get them working on our crumbling infrastructure. Bonus: Less people killed.
posted by Ron Thanagar at 8:51 AM on November 14, 2010 [8 favorites]


"Liberal ideology simulator"?

Well, explain how cutting Social Security figures into a deficit calculator. Currently, payments for Social Security (i.e. payroll taxes) are in excess of SS obligations. There is currently no projected SS deficit until ~ 2030-2047, depending on what your witch's cauldron says long term growth in the US economy will be!

The idea that SS has anything to do with the current US budget deficit is a zombie lie propagated by people who think old people should just eat cat food or dumpster dive or work until they die on the job if they can't/don't save enough for retirement.
posted by ennui.bz at 8:57 AM on November 14, 2010 [3 favorites]


I solved the debt without touching entitlements yer barking up the wrong tree ennui.bz.
posted by Max Power at 9:01 AM on November 14, 2010


or maybe not my bad.
posted by Max Power at 9:01 AM on November 14, 2010


I didn;t touch medicare or social security and I ended up with a surplus ..because the Bush-era tax cuts are not just bad, they're fucking surreal.
posted by The Whelk at 9:02 AM on November 14, 2010 [5 favorites]


It's an interesting exercise. I don't get why anyone would choose to allow the Bush tax cuts on incomes over $250k to expire but not allow all of the other Bush tax cuts to expire. In many parts of the country $250k isn't a very good cut-off anyway, so why not just return all of the income tax to Clinton-era levels? Things were pretty good then.

Self-destructive political pandering from the Democrats. The fact is that the government programs funded by the income tax (opposed by conservatives since it's inception) benefit most the middle classes. The main political achievement of Reaganism has been convinced the upper middle classes that these taxes should be cut now, and cut always.

If you are making $250,000 sending an extra $1,000 to Uncle Sam is probably the best investment you can make in your prosperity and the prosperity of your children: education, science, transportation, housing, health care are the bedrock of a middle class existence. Spending it at the racetrack stock market will only give you (at best) a little extra cash.
posted by ennui.bz at 9:03 AM on November 14, 2010 [4 favorites]


I solved the debt without touching entitlements yer barking up the wrong tree ennui.bz.

My point was that SS shouldn't even be on the deficit calculator at all.
posted by ennui.bz at 9:04 AM on November 14, 2010 [1 favorite]


Cut back on the wars.
posted by butcher at 9:06 AM on November 14, 2010


If you think our legislators (on the whole) are capable of thinking this through with any degree of nuance, you're crazy. They are too beholden, and too rich.

The middle class keeps getting screwed over because of this. While they are the economic engine that supports this system, they are the biggest target when it comes to finding money. Congress pretends they are "sharing the pain", but they are slowly starving the engine of fuel.
posted by Benny Andajetz at 9:11 AM on November 14, 2010 [1 favorite]


I'm all for cutting military spending too, but can it be done without putting a helluva lot of people out of work?

—temporarily out of work until they can find productive jobs. People who are designing, building, and learning how to use missiles, for example, are not actually productive and need to have their jobs eliminated.
posted by esprit de l'escalier at 9:20 AM on November 14, 2010 [2 favorites]


I'm pretty conservative, and I think the simulator is a decent one. Cutting welfare and the NEA and the like may be feel-good moves, but they don't mean much for the deficit given their share of federal expenditure.

The social spending that is really ruinous tends to be happening at the state and local level. It used to be paid-as-it-went because of balance budget laws, but once the states and localities figured out how to throw a huge chunk of their social expenditure into un(der)funded pension and health care benefits for public retirees, we are under the gun of massive structural deficits there, as well.

The lower tax rate for dividends applies only to dividends that have already been subject to corporate taxes. Between the tax at the earning corporation and the tax at the dividend recipient, the government is still taking out close to 50% of the profit before it gets to the shareholders' bank accounts.

This brings up a broader point: even with a modest tax benefit of dividends and capital gains, the U.S. continues to have by far the developed world's most punitive tax regime on investment. Liberals who worship at the altar of Western European social policy ought to look carefully at how their tax regimes do a far better job of encouraging local and global investment than U.S. tax laws do.
posted by MattD at 9:22 AM on November 14, 2010 [6 favorites]


What's missing here is an integrated campaign contribution calculator to show us why this isn't happening.
posted by scottreynen at 9:27 AM on November 14, 2010 [7 favorites]


Yeah, I don't see how this is a "liberal simulator". All the choices are between "cut taxes a lot" vs "cut taxes a little". The most aggressive ones have "don't cut them at all".

Also, IAW the comment above about infrastructure investment and would like to add education to that. We could remove a lot of problems of 20 years from now by doubling (at least) teacher salaries and other educational investment, plus making college free.
posted by DU at 9:31 AM on November 14, 2010 [1 favorite]


It seemed like a contradictory viewpoint initially however what seems quite plausible would be to 1) reduce active deployment of troops in Iraq + Central Asia, whilst 2) keeping current military development and R&D spending.

Even thinking about reducing the second category of spending has far-reaching implications that are not as simple as "cut weapon systems programmes" or "reduce xxx spending." Primarily that cutting anything associated with military R&D will result in a negative economic impact. Stop the stupid spending (pointless wars) and keep the functional spending.
posted by nickrussell at 9:32 AM on November 14, 2010


Any thoughts or info on the proposal to cap Medicare to 1% + GDP? That one seems like it would have quite an impact on the future deficit.
posted by jpdoane at 9:33 AM on November 14, 2010 [1 favorite]


Something I've been wondering about the suggested national sales tax - can anyone tell me what kind of effect that might have state budgets that rely on state sales taxes? Does it vary too much state to state? Would states need to reduce their sales taxes if a national sales tax was enacted or will I be paying an 11.25% sales tax?
posted by maryr at 9:35 AM on November 14, 2010


They're kind of related. I mean the whole point of the space program was to have a politically viable excuse to build, design and maintain gigantic fucking rockets.

Nevertheless, NASA spending remains less than 1% of the entire budget. Cutting NASA altogether would be a drop in the deficit bucket. (Also it would make space nerds like me really grumpy.)

Previously, the projected 2011 budget.
posted by elizardbits at 9:41 AM on November 14, 2010


The ease of the exercise illustrates how broken our political system has become.
posted by LarryC at 9:49 AM on November 14, 2010 [3 favorites]


An army of unemployed soldiers on the streets, nothing can go wrong with that.

The military is not composed of just soldiers (there are sailors and pilots and marines) and most of the military is support personal for the active fighters.

Cutting NASA altogether would be a drop in the deficit bucket. (Also it would make space nerds like me really grumpy.)

Whereas putting people to work building new and better rockets and ships and space stations and lunar bases would be cheaper, result in less killing and deaths and propel the US forward instead of keeping it mired into various hot spots around the world.
posted by nomadicink at 9:54 AM on November 14, 2010


I'm sure NYT had good intentions, but this exercise only reinforces over-simplistic views of the economy. It's no better than FoxNews saying that if we would just pull welfare benefits, all those lazy no-good-niks would get off their butts and find jobs.

No, it would be like saying that cutting welfare will lead to a cut in government spending. The idea that reducing welfare would cause more people to get jobs is a completely reasonable point, and one I'd say is more sophisticated than this NYT exercise. But that's not really the topic of this thread.
posted by John Cohen at 9:57 AM on November 14, 2010


well that was a fun exercise in feeling like you've done something without actually leaving the couch.
posted by fuzzypantalones at 10:01 AM on November 14, 2010 [2 favorites]


So by rolling taxes back to their 1996 levels, cutting some military bloat, and adding a few sane new taxes I created a $250Billion surplus in 2015, and got rid of literally 90% of the projected over-run for 2030 without cutting pay to any employees, reducing benefits to anyone or firing anyone except mercenaries. And a 5% national sales tax gives me a $300B surplus in 2015 with a $200B surplus in 2030.

That was so goddamned easy that it depresses the shit out of me.
posted by paisley henosis at 10:07 AM on November 14, 2010


for some context...
posted by kliuless at 10:11 AM on November 14, 2010


An army of unemployed soldiers on the streets, nothing can go wrong with that.

So the US is already in the late-stage Roman Empire bit where the rest of the nation subsumes its interests to the fear that the Legions will show up at home if they aren't bribe generously enough?

I'm all for cutting military spending too, but can it be done without putting a helluva lot of people out of work?

I could be wrong, but the US government seems happy for H1-B's to compete US citizens out of work, for software companies to move development to India, for manufacturing to go to China, and so on. Why should bomb-makers be subsidised?
posted by rodgerd at 10:21 AM on November 14, 2010 [2 favorites]


Looks like the right way to fix the deficit is to put it back the way it was before we fucked it up.

Tax income over a large number at a high tax rate. Reduce graft and unnecessary military spending. Reduce bullshit loopholes. Reduce subsidies to companies that don't fucking need it. Leave the social safety intact, but cowboy up and negotiate with the companies about the actual costs of things.

Not rocket science. Essentially, run the country like any normal, grown up fucking country is run.
posted by Lord_Pall at 10:22 AM on November 14, 2010 [3 favorites]


People see a strategic advantage to doing weapons dev in house. But not so much for your every day LOB apps.

Also comparing immigrants who plan to make a life here and pay taxes to offshore workers is kinda xenophobic.

Yes it seems easy but as a wise man once said, the hard part is making sure everyone hates the plan equally.
posted by Ad hominem at 10:33 AM on November 14, 2010


kinda xenophobic. - Ad hominem

Eponysterical.
posted by rodgerd at 10:39 AM on November 14, 2010


I feel like they put something like this out every couple of years any everyone putting it out continues to pretend that they and we are all idiots.

No shit. We need to raise taxes and cut military spending. Also, cocaine addicts. Hey, I think what they can do is, like, not do cocaine. Problem solved!
posted by XQUZYPHYR at 10:45 AM on November 14, 2010 [1 favorite]


I suddenly have more respect for conservatives...it was really hard making choices that would simultaneously lower the deficit *and* enact only taxes that would crush the working class.
1. Cut foreign aid in half
2. Cut pay of civilian federal workers by 5 percent
3. Reduce the federal workforce by 10 percent
4. Other cuts to the federal government
5. Cut aid to states by 5 percent
6. Reduce noncombat military compensation and overhead (I know, I know, but I needed to cut just a little more.)
7. Enact medical malpractice reform
8. Increase the Medicare eligibility age to 70 (since eliminating it warn't an option)
9. Cap Medicare growth starting in 2013
10. Raise the Social Security retirement age to 70 (given the longevity differences between rich and poor that were discussed earlier, this would probably save a lot more than estimated)
11. Tighten eligibility for disability (we'll call it the Wheelchair-To-Work program!)
12. Use an alternate measure for inflation
13. Allow expiration for income below $250,000 a year
14. National sales tax

(Don't worry, poor people! No one actually cares about cutting the deficit!)
posted by mittens at 10:47 AM on November 14, 2010


The idea that SS has anything to do with the current US budget deficit is a zombie lie propagated by people who think old people should just eat cat food or dumpster dive or work until they die on the job if they can't/don't save enough for retirement.

It's also a very convenient tool to pad how insane the defense budget is. Throwing in Social Security and Medicare to dilute the percentages of discretionary spending (i.e. the actual budgeted stuff that isn't required by law to be paid for, like Medicare and Social Security) helps sneak around the reality that the discretionary budget of the U.S. is about 50-60% going to the military.

I'm likewise sick of hearing about how Social Security, perfectly safe for the next century with only a minor adjustment in twenty years or so, is "facing crisis" when we have to include war funding in separate bills every year so the CBO doesn't collectively shit itself.
posted by XQUZYPHYR at 10:49 AM on November 14, 2010 [8 favorites]


My point was that SS shouldn't even be on the deficit calculator at all.

Tell that to HITLER!
posted by blue_beetle at 10:56 AM on November 14, 2010 [1 favorite]


Nah I didn't say "you are x so therefore all your ideas are bunk" just pointing out that immigrants and offshore workers are different things.Legal Immigrants have roughly the same expenses as I do and command roughly the same salary.
posted by Ad hominem at 11:02 AM on November 14, 2010


Something I've been wondering about the suggested national sales tax - can anyone tell me what kind of effect that might have state budgets that rely on state sales taxes? Does it vary too much state to state? Would states need to reduce their sales taxes if a national sales tax was enacted or will I be paying an 11.25% sales tax?

I'd guess 1)Not much 2)The national tax would be the same in each state, but combined with state sale taxes it would vary quite a bit, and 3)You'd probably be paying 11.25% since the new tax would be going to the Federal government.

When Canada implemented a 7% national sales tax in 1991, it got added onto existing sales taxes, so if your province had a 5% sales tax it went up to a combined 12%. Though in most countries that have implemented this type of tax, a Value-added tax, they did it so the price was included (thus hidden) in the advertised price (there's some was some obscure constitutional reason this couldn't be done in Canada).

The problem with a national sales tax is, while there are a lot of economic reasons that it's a more efficient tax for balancing the budget, the public in Canada hated it and it utterly destroyed the Progressive Conservative party, it was reduced from a majority of 169 seats in parliament to 2.

I think if a national sales tax were implemented in the U.S., even with bi-partisan support, it would end the careers of nearly every member of congress that voted for it.
posted by bobo123 at 11:11 AM on November 14, 2010 [1 favorite]


What's remarkable about this NYTimes budget simulator is how narrow the permitted choices are.

I mean, those options run the entire gamut of possibility, all the way from A to B.

Notable for its absence - the withholding for Social Security. (SS isn't even a progressive tax: it's actually regressive, in that rich people pay a lower percentage of their income than do poor people.)

A reasonable solution would be to ENTIRELY REMOVE the withholding ceiling: you draw a salary, your salary is taxed for Social Security. A compromise position might be: "Well, let's raise the withholding ceiling a little."

Even the compromise position is entirely off the table for discussion. Solutions for solving Social Security's problems cannot include taxing rich people.
posted by AsYouKnow Bob at 11:34 AM on November 14, 2010 [2 favorites]


VAT would also end the careers of a lot of people trying to run a small business -- the cost of their entire stock and supplies would go up 5%, but it'd be hard to pass that difference on to the customer because the business' own prices also went up 5%. Meanwhile, I bet Wal*Mart can bully their suppliers into eating that 5%. The same goes for the guy with a $100 paycheck to buy food and the guy with $100,000 to buy a boat: the first guy is going to feel the loss of 5 pounds of chicken or vegetables a lot more than Mr. Yacht will miss his $5000.

Sales taxes are incredibly regressive. We can do better than that. It's worth noting that just running a ctrl-f for "bush" and then "clinton" gets you more than halfway to a balanced budget for 2015...
posted by vorfeed at 11:39 AM on November 14, 2010 [2 favorites]


Looks like the right way to fix the deficit is to put it back the way it was before we fucked it up.

This is what I noticed as well. Kick spending and taxes back to Clinton-era levels -- the most prosperous period of the last 50 years, btw -- and the "problem" disappears.

Then we can start talking about farm subsidies and other foolishness.
posted by coolguymichael at 12:08 PM on November 14, 2010 [3 favorites]


It's much easier if you start from the bottom. The real savings come from all the opportunities to tax rich people, their estates, and banks/investments at higher rates. Once you do that, you don't even really have to cut much in the way of important stuff like social security, medicare, or even defense. In fact, the way I had it set up, those cuts were not necessary at all to balance the budget in the short term. The only reason capping medicare was necessary was to keep long-term deficits in check.

All this foreign aid, farm subsidy crap is chump change. You could reform that stuff purely for policy reasons, but it doesn't actually make a dent in either the short or long term.
posted by Sara C. at 1:15 PM on November 14, 2010


The World Famous: "I don't get why anyone would choose to allow the Bush tax cuts on incomes over $250k to expire but not allow all of the other Bush tax cuts to expire. In many parts of the country $250k isn't a very good cut-off anyway, so why not just return all of the income tax to Clinton-era levels? Things were pretty good then."

Plus, we'd gain a few dozen jobs from the new sister network Fox would set up to broadcast President Obama's State of the Union "If your family earns less than $250,000 a year, you will not see your taxes increased a single dime" pledge on a 24-hour loop, with the word "LIAR" blinking underneath in a 36-point font.
posted by Rhaomi at 1:19 PM on November 14, 2010 [1 favorite]


Nobody ever talks about dismantling the Dept of Homeland Security. That's $52 Billion, right off the bat. They don't do anything that the DOD, CIA, and FBI can't handle.
posted by CarlRossi at 1:25 PM on November 14, 2010


I reduced military spending, raised taxes for wealthy people and just solved the $1,355 billion deficit in about 30 seconds. I could be a senator.

Not with that attitude you couldn't.
posted by Rykey at 1:26 PM on November 14, 2010


for those saying this is rather overly simplistic - it is.

but the presentation is far, far more nuanced and detailed than the majority of the current debate on taxation and government spending.

the exercise does not allow for the full range of budgetary options, nor does it properly articulate the consequences of the options offered.

it does, however, present the relative cost of many options being currently discussed in a way that will be enlightening for many people. it also effectively demonstrates that the issue of the deficit can be solved through a variety of *relatively* non-controversial tax increases and budget cuts.

it puts the deficit into a [particular] perspective that people can understand, without resorting to the truly glib red versus blue oversimplifications.

while imperfect, the exercise increases the detail and nuance brought to this issue. that's a good thing.
posted by striatic at 1:45 PM on November 14, 2010 [2 favorites]


My best option isn't on there. I would take the current US debt 13,719,547,683,746.49 and divide it by the current US population 307,006,550 and send everyone a bill for their share. This comes to $44,688.12. If you can't pay it in your lifetime it's passed onto your offspring.

So Businesses would not have to pay anything for the benefits they gain?
posted by WhackyparseThis at 2:05 PM on November 14, 2010


VAT would also end the careers of a lot of people trying to run a small business -- the cost of their entire stock and supplies would go up 5%, but it'd be hard to pass that difference on to the customer because the business' own prices also went up 5%.

Sales tax doesn't apply to wholesale transactions. I'm not sure the same applies to VAT, but most businesses are not buying goods at retail to re-sell.

However, the added 5% or whatever would add a psychological disincentive to spend at first, but pretty soon people would just get used to the higher amount. The bigger problem is that sales tax tends to be regressive, because those at the top brackets can afford not to spend, but those at the bottom can't just put their money away, as it all gets spent anyway. So those at the bottom are hit with a much bigger burden as a percentage of their income. But many states like CA and NM have allowed food to be sold without added sales tax (in NM it's actually a gross receipts tax, but that's another subject). It's still not progressive, but a national tax may be a politically necessary way to fund social welfare programs.

Nobody ever talks about dismantling the Dept of Homeland Security. That's $52 Billion, right off the bat. They don't do anything that the DOD, CIA, and FBI can't handle.

That's a great idea. Unfortunately, any moves to dismantle or cut back any programs or agencies set up since 9/11 to "fight terrorism" has become the hottest third rail in politics, second only to cutting military programs of any kind (even those that are unnecessary).
posted by krinklyfig at 2:21 PM on November 14, 2010


I'm pretty conservative, and I think the simulator is a decent one. Cutting welfare and the NEA and the like may be feel-good moves, but they don't mean much for the deficit given their share of federal expenditure.

Yup. It's like the people who talk about earmarks in the context of the deficit. Yeah, earmarks are just slimey ways of grabbing money that you otherwise wouldn't get, but in terms of deficit reduction it's a non-starter. Harping on them (I'm looking at you McCain) implies that you don't have any other ideas.
posted by It's Never Lurgi at 2:22 PM on November 14, 2010


If the media narrative version of McCain was the real McCain, he would be a great politician.
posted by furiousxgeorge at 2:33 PM on November 14, 2010


Here's my solution - another combination of higher taxes and less military spending.

Several of the tax increase options involve a "return to Clinton-era levels": In all of these cases, Obama's proposal is somewhere between the post-Bush status quo and a return to Clinton-era levels: So the Obama administration seems to favor a middle ground on taxes, somewhere between Clinton and Bush. Full reversal of Bush's tax cuts is apparently not an option.

As far as I know, no one is considering reversing the Bush tax cuts on income below $250K - only on income above $250K. Personally I think the 4.3% of American households with incomes from $150K-$250K can afford to pay the same taxes now that they paid in 2000. But apparently that idea is out in left field.

I wish it were politically possible in America to say that taxes can be a good thing. As Oliver Wendell Holmes said, "I don't mind paying taxes; they buy me civilization." But if Republicans keep cutting taxes and Democrats can't restore them, there'll be less and less civilization to buy.
posted by problemspace at 2:41 PM on November 14, 2010 [1 favorite]


Eat the Rich!
posted by charlesminus at 3:23 PM on November 14, 2010


Sales tax doesn't apply to wholesale transactions. I'm not sure the same applies to VAT, but most businesses are not buying goods at retail to re-sell.

VAT does apply to wholesale imports, at least in the EU (EU->EU wholesale has no VAT as long as both nations are VAT-registered, but you have to pay VAT on your imports if they're from outside the EU). So I guess a VAT would only ruin the businesses of people who mainly buy stock from overseas... or, of course, the businesses of folks who spend a lot on supplies (at Costco, Office Depot, restaurant supply stores, etc.) rather than goods for resale.

Either way, there's no reason to claim that a regressive VAT is a "politically necessary way to fund social welfare programs", as long as we're not taxing estates and/or the rich. VAT is not necessary, it's just easy... and it's only easy because the powers that be view the poor and middle class as a piggy bank they can afford to break.
posted by vorfeed at 3:41 PM on November 14, 2010


The linked to NY Times chart of the proposed 2011 budget is disingenuous. As others have pointed out, putting Social Security up there as if it is just as big as the military is crazy. But the reason the military is so big and we don't know it is lots of it is "paid" for outside of the normal budget process. Plus, things like the Veterans Administration don't count as part of the military, even though the 2011 budget is basically 1/7 of the cost of Social Security! Now, I don't disagree that we should take care of Veterans, but we shouldn't pretend that isn't part of the cost of our miltary and should be considered as part of same. If you told people more than half our national budget, even including non-discretionary items like Social Security and Medicare, was due to past or current military expenditure, would not more people consider mliitary spending less sacrosanct?
posted by R343L at 3:53 PM on November 14, 2010 [1 favorite]



My best option isn't on there. I would take the current US debt 13,719,547,683,746.49 and divide it by the current US population 307,006,550 and send everyone a bill for their share. This comes to $44,688.12. If you can't pay it in your lifetime it's passed onto your offspring. This just formalizes what it already occurring.

...

How about we do the same thing but with progressive brackets based on wealth to determine the shares?


No, the opposite! There's this guy who wanders around my neighborhood talking to himself and gathering recyclables. I say we bill the whole thing to him.

(13.7t - 13.7t = 0 IT'S MATH)
posted by Bokononist at 4:08 PM on November 14, 2010


bobo123 writes "they did it so the price was included (thus hidden) in the advertised price (there's some was some obscure constitutional reason this couldn't be done in Canada)."

Some of the justification for the GST was elimination of a hidden 12.5% manufacturers tax. The GST was supposed to be transparent. Besides a hidden tax is a pain in the ass for interprovincal shopping. Imagine the price on Amazon.ca changing depending on where you are.
posted by Mitheral at 4:12 PM on November 14, 2010


This is fun. Reminds me of something I read somewhere that the best possible kind of leader a nation can have is the benevolent dictator. Ladies and gentlemen, I am just that person. Let me be in charge, I'll be good. Promise.

But ultimately this is a very, very simplistic game, and just clicking on one section should then change all the other options based on the effects of that cut/tax/whatever. Now that would be an impressive simulator.
posted by zardoz at 4:29 PM on November 14, 2010


Taxing dividends at the same rate as taxing regular income makes no sense at all. In essence, you are saying if you have a $100 bucks to spare and blow the money fine, no tax, but if you invest it we will tax you (remember you already paid tax on the money the first time you earned it) . Rewards the exact kind of stupid behavior that got many consumers in the mess they are in in the first place. I think what most people WANT when they say they want dividends taxed at higher rates is higher tax brackets for the wealthy, or a higher dividend tax for the wealthy...
posted by jcworth at 4:37 PM on November 14, 2010


jcworth: except people who spend their money immediately *are* taxed. In my state it's about 10% and there are no deductions or credits to reduce the amount taxable.

Also, I want to echo what someone else said about the limited options -- why aren't things like the drug war on the table? It probably doesn't cost *that* much technically, but the costs at the state level and in the welfare system must be huge.
posted by R343L at 4:42 PM on November 14, 2010


jcworth : Taxing dividends at the same rate as taxing regular income makes no sense at all. In essence, you are saying if you have a $100 bucks to spare and blow the money fine, no tax, but if you invest it we will tax you (remember you already paid tax on the money the first time you earned it)

Sorry, but wrong, wrong, wrong.

You NEVER pay taxes on your basis cost, you pay taxes on your gains from your investments (and can write off your losses, as well).

When you pay taxes on dividends or capital gains, you do so on 100% pure income, plain and simple. And, to add insult to injury, you pay a LOWER rate (presuming you meet the holding requirements, which you would only fail to do in a dire emergency need for liquid assets) than Joe sixpack does on money he actually earns.

And to make it even MORE insulting, when you claim an actual loss for the year, that goes against your regular income, making this a very lopsided equation - Gain, and you pay 15%; Lose, and you save %35. Fair, eh?
posted by pla at 4:57 PM on November 14, 2010


Abolish cash. All transactions - ALL transactions - go through a personal magnetic card with the gummint taking a nominal cut. Don't lose it!

You may say I'm a dreamer....
posted by IndigoJones at 5:05 PM on November 14, 2010


Building on a couple of comments above, I'd love to see this developed into more of a turn-based scenario game to help people understand the consequences of various budget decisions. It would be great not just for students but for anyone.

For example, when you submit a budget that cuts military and veteran benefits, you should have a little riot icon pop up with a crowd roar sound effect and a word bubble that explains how all of the various lobby groups come out hard against you in the next election and how you are tarred and feathered by your opponent for not being a patriot and selling out those who have made great sacrifices in service of the nation etc etc. A few eviscerating campaign ads using your name should play while the chart of your poll numbers plummets. Same for anything affecting senior citizens. Same for anytime you raise a tax. Same for if you try to reinstitute the estate tax. Same for if you do something that would seem to penalize wealth creation. Same for if you "sell out" education or health or the environment. Etc. etc. etc. And when you try to pick certain items, you should get a big red X and a wrong answer sound because in the current make-up of congress (programmed in to be current at any given time), it absolutely would never pass. When you try, faces of the key people opposed should pop up with word bubbles trashing you in mock media statements.

Some of these items make perfect sense to me and I also know they'll never happen because it would be too costly to whoever voted for them. So some things I wanted to choose, I didn't choose, because it's not realistic to think that anyone will do them. I came up $35b to $50b short by 2030 for that reason, depending on a few smaller items. And that's definitely being very very charitable on the tax hikes and some other things that the coming House wouldn't even let onto the floor.

Most of us have almost no context behind the political ought-to's we spout and this would give everyone a real appreciation for the difficulties and backlash involved in making any of these decisions. And seeing the math would yank people out of fantasyland and show them that the money has to come from somewhere, and to the degree that it doesn't, things have to be cut. Make people walk a virtual mile in elected officials' shoes and the debate would become a lot more civil and thoughtful and solution-oriented. It's easy to shoot your mouth off and demonize a person or party or program when you have no idea how it fits in with everything else or the tradeoffs involved in changing it. But hand you the gavel and suddenly you're the bad guy with only tough choices and with blood lost no matter what you choose.

I think this is an excellent tool to give people perspective and cut through a lot of the party BS. Made more thorough and interactive and video-gamish, it could be even better. Maybe it could be its own website and everybody plays and the choices tabulate to produce the average preference profile of the total user base and/or of self-defined user groups such as a class.
posted by Askr at 5:54 PM on November 14, 2010 [4 favorites]


For example, when you submit a budget that cuts military and veteran benefits, you should have a little riot icon pop up with a crowd roar sound effect and a word bubble that explains how all of the various lobby groups come out hard against you in the next election and how you are tarred and feathered by your opponent for not being a patriot and selling out those who have made great sacrifices in service of the nation etc etc.

I see I'm not the only one who thought of the budget sections of Sim City while doing this.
posted by Sara C. at 6:16 PM on November 14, 2010


My best option isn't on there. I would take the current US debt 13,719,547,683,746.49 and divide it by the current US population 307,006,550 and send everyone a bill for their share. This comes to $44,688.12. If you can't pay it in your lifetime it's passed onto your offspring. This just formalizes what it already occurring.
...

How about we do the same thing but with progressive brackets based on wealth to determine the shares?


Our social structure creates and maintains the wealth, so fair enough to share it that way.

If you go by this measure, according to wikipedia: By the fourth quarter of 2009, the household net worth had recovered by a growth of 1.3 percent to a total of $54.2 trillion. That means each household owes just about 25 cents on every dollar of net worth.

Computing your share under this formula is left as an exercise for the reader.
posted by meinvt at 6:21 PM on November 14, 2010 [1 favorite]


See, the problem is in a country of 300 million people living in diverse geographic areas that span a wide array of economic conditions, you get a riot bubble for literally anything. Honestly, it kind of makes you think that the libertarians have the right idea when it comes to being less federalist and putting more power back in the hands of the states. What would Europe look like if the EU was an uber-powerful central body and elections were continent wide?
posted by furiousxgeorge at 7:36 PM on November 14, 2010


I religiously listen to the excellent History of Rome podcast. In the most recent episodes, barbarians are tearing in at every border but Rome is holding together because of the efforts of several different Roman generals/kings at each frontier, acting either without the authority of the central government or with only the barest shred of authority from it. Sometimes to hold the whole together you need to delegate out and let everyone handle their own problems.
posted by furiousxgeorge at 7:42 PM on November 14, 2010


Democracy 2 is a wonderful little game that I might have once seen on the blue that does give its players some surprising insight into how difficult it is to implement change in politics. I might give it a spin again after reading this thread!

You basically get a randomly generated (or predefined) voter population of various demographics and leanings, an opponent or two, and a whole raft of policies, which you have to tailor to try to win a majority. Then there's election time, where you make promises in order to win the votes, then a period of years after that where you decide if it's politically viable to keep those promises.

I seemingly recall balancing the budget was one of those things you had to do and yes it wasn't easy at all because it was easy to balance the budget at the expense of you losing the next election.
posted by xdvesper at 8:12 PM on November 14, 2010


See, the problem is in a country of 300 million people living in diverse geographic areas that span a wide array of economic conditions, you get a riot bubble for literally anything. Honestly, it kind of makes you think that the libertarians have the right idea when it comes to being less federalist and putting more power back in the hands of the states.

Except your first sentence explained why the second is completely wrong and would be, analogies to ancient Rome notwithstanding, horrific for half the country.

Yeah, we have a diverse country. In that "diverse" also means areas that are almost desolate in terms of population density, don't have the necessary resources to be self-sustaining and thoroughly dependent on the excess resources of its neighbors. Libertarians love to whine about the power of the states and then shut up right quick when you ask what half the states in this country who take in more federal tax dollars to fund their roads, schools, libraries, hospitals than they give out plan to do. Mississippi has schools because New Jersey pays for them.
posted by XQUZYPHYR at 5:36 AM on November 15, 2010 [1 favorite]


As long as the dollar is not pegged against something else (euro, yen, gold, baskets of wheat) then the deficit is not the issue. Inflation is. Get it right.
posted by wuwei at 9:08 AM on November 15, 2010


It would be interesting if a list like this could be voted on directly in elections. At least it would force people to face facts.

The top two in terms of size were surprising to me- fixing medicare growth to inflation without changing benefits and then eliminating tax loopholes. I figured loopholes were small potatoes like earmarks are.
posted by efbrazil at 2:05 PM on November 15, 2010


It would be interesting if a list like this could be voted on directly in elections. At least it would force people to face facts.

If this were the case, the deficit would never, ever decrease, as any state that allows ballot initiatives (or worse, requires voter approval on any tax increase) can tell you.
posted by kagredon at 11:31 AM on November 16, 2010


default
posted by ogallalaknowhow at 5:33 PM on November 29, 2010


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