What caused our debt, and can we eliminate it?

Discussion in 'Politics, Religion, Social Issues' started by classicaliberal, Jun 5, 2012.

  1. classicaliberal macrumors regular

    classicaliberal

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    #1
    'mcrain' asked a question in the middle of another thread, and I thought it deserved it's own post...

    Here's my answer, what's yours?

    Lots of things.
    • Reversed and slowed economic growth.
    • More and more people on welfare/medicare/medicaid rolls.
    • Fighting between 2-6 wars across the world (depending on how you count them)
    • "Economic Stimulus"
    • Troops stationed in thousands of bases around the world for apparently no reason. (Germany, Australia, to name a few)
    • Baby-boomer generation reaching maturity, Social Security distribution system not designed for more payees than payers
    • Lower incomes equals lower taxation revenue
    • General attitudes of Americans of entitlement - that government should do anything and everything to help them with relatively less willingness to pay for such services.
    • Tax cuts during war time.
    • Welfare system not designed first-and-foremost to get people off of welfare via self-sufficiency.
    • Complacency and ignorance of the populous
    • Government bureaucracy/inefficiency
    • Convoluted tax system results in unnecessary complexity and favortism of specific tax payers over others
    • Prescription Drug Program
    • No Child Left Behind
    • Ever expanding role of federal government in every aspect of our lives. Larger government is generally less efficient.

    Can we undo those things? I don't think you want my answer on that, it's not very positive.
     
  2. leekohler macrumors G5

    leekohler

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    #2
    Ronald Reagan. That's where it started. His policies turned us from the world's biggest creditor to the world's biggest debtor in 8 short years. If you don;t believe me, look it up. It's where borrow and spend started, along with the disastrous trickle down theory. And we still have yet to learn our lessons.
     
  3. classicaliberal, Jun 5, 2012
    Last edited: Jun 5, 2012

    classicaliberal thread starter macrumors regular

    classicaliberal

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    #3
    In 'mcrains' original post (I should have quoted him more fully) he pointed out that we had a surplus in the Clinton/Gingrich years... and that since we've had a massive increase in debt. In order to narrow the scope of the conversation (as much as I'm sure many would like to talk about Reagan/Carter or even W. Wilson... maybe we should just keep the convo to POST year 2000?

    Basically, conversation should be about everything AFTER the green line went above the red line. ;)

    [​IMG]
     
  4. leekohler macrumors G5

    leekohler

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    #4
    That would be dishonest. And you're talking budget deficit and surplus. I thought you wanted to talk about debt.
     
  5. classicaliberal thread starter macrumors regular

    classicaliberal

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    #5
    You're exactly right that a large chunk of the 'debt' is prior to 2000, and that drawing a distinction between deficit and debt is very important (thank you) - I just thought it would be more beneficial to put some sort of 'focus' on the things we were discussing?
     
  6. Huntn, Jun 5, 2012
    Last edited: Jun 5, 2012

    Huntn macrumors G5

    Huntn

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    #6
    I agree with your list. However I'd like to point out that if SS had not been robbed since it was created, it might of actually had enough accrued funds to power through the BabyBoomer retirement years. This fund has been consistently robbed by both parties.

    And us humans are rather stupid creatures easily persuaded to reward ourselves. Wars, we don't pay for, what a deal! At the end of WWII, the top tax rate was in the vicinity of 95%, no kidd'n. Those days of responsibility seem to be long gone, when we paid for the things we consumed. I support the idea of a "no child left behind" program as long as it is paid for.

    This is the real problem. We have politicians who say "elect me and I'll lower your taxes". We will never get anywhere until we have leaders who agree to hold a mature discussion about what we want government to provide to us and how we will pay for it... I sincerely believe that government can be effective if we have the right people making the decisions. And no that does not mean eradicate government as the GOP rhetoric seems to indicate.

    Honestly I am not hopeful. With elections every 4 years, I see us spinning our wheels driving off the economic cliff as our leaders are more obsessed with infighting and seizing the reigns of power versus actually governing and accomplishing something meaningful.



    Exactly right. Reagan wanted to lower both spending and taxes. However he could not get Congress to agree to less spending, but was still able to push through tax cuts because it's so appealing. His policies, Republican policies, caused the first major deficits since WWII. It's been down hill ever since.
     
  7. mcrain macrumors 68000

    mcrain

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    #7
    Military spending has obviously increased at the same time our economy has been decimated. (See 15 facts that will make your head explode).

    We had tax cuts that were sold the public as a temporary reduction in revenue because the government was taking in too much, that resulted in 3 trillion in additional debt (and interest on that debt). We can't get rid of the temporary tax cuts because supposedly reducing revenue creates jobs (anyone else notice all the jobs we lost?).

    One of the largest and fastest growing expenses in this country is healthcare, and the GOP wants to undo the closest thing we have done to reduce those costs. The result will be billions in additional debt.

    We far outspend our competitors on healthcare and get far less for the money. We need major overhaul, and all the some people care about are reducing taxes for people who earn almost all the money in this country, and drilling for oil.

    (edit) (Debt when it is used in our country for our purposes and to our advantage is not a bad thing. It increases our GDP, and can set us up for future advances. However, debt that is used to fund zero-gain endeavors is nothing more than lost money. We lost 11 billion in Iraq and the GOP is complaining about a tiny fraction of that amount invested in a failed US business. Unbelievable.)
     
  8. jnpy!$4g3cwk macrumors 65816

    jnpy!$4g3cwk

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    #8
    Absolutely correct. Reagan. It started with Reagan. Bush II helped a little - until the 2007-2009 financial crisis hit, which again was a huge hit.

    [​IMG]

    [​IMG]

    It seems like this gets published and posted every single day, but, the conservatives/teapublicans are just not capable of processing it. Just remember, Ronald Reagan proved that (according to Dick Cheney) deficits don't matter.
     
  9. rdowns macrumors Penryn

    rdowns

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    #9
    Au contraire. According to Karl Rove, they matter now. :rolleyes:
     
  10. ThisIsNotMe macrumors 68000

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    #10
    Tax cuts do not cause deficits.
    Spending is the only thing that can cause a deficit.
     
  11. leekohler macrumors G5

    leekohler

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    #11
    We have things that need to be paid for. If we cut taxes, we need to know how we finance things things that need to be paid for, now don't we?
     
  12. hafr macrumors 68030

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    #12
    But if the tax cuts implies a bigger loss of governmental income than increased incomes from the synergy effects, it can most definitely be a reason to the deficit.
     
  13. rdowns macrumors Penryn

    rdowns

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    #13

    When you cut taxes twice while starting 2 wars, go on a federal workwer hiring spree to hide weak jobs growth and enact a new entitlement program, yes, they are a cause of the deficit.
     
  14. classicaliberal thread starter macrumors regular

    classicaliberal

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    #14
    These types of charts are unfortunately very misleading. For instance, who controlled the congress when Clinton balanced the budget? Who was running the congress between 2006 and 2010 when we had the fastest debt growth in history? Simply coloring in the chart with red or blue based on who's in the presidency at any given time doesn't represent any significant value, the issues are much more complex... and any suggestion that EITHER of the major American political parties is actually fiscally conservative and anti-debt-deficit... is provably false.



    Funny how they always seem to matter most to those not in power at any given time, eh?



    While I agree with the sentiment (we clearly have a spending problem, and not a too-low-of-taxes problem), tax cuts can obviously cause deficits.



    This. Anyone who suggests George W. Bush or Barack Obama was/is a fiscal conservative is completely misinformed.
     
  15. hafr macrumors 68030

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    #15
    Not all taxes imply a negative impact on the total income for the government when lowered, or vice versa.
     
  16. mcrain macrumors 68000

    mcrain

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    #16
    Government economics are not the same thing as household economics, nor the same as business economics. Governments control both sides of the revenue/spending equation. As such, we have a very simple equation.

    Spending = revenue and revenue = spending. That is how you balance a budget.

    Anyone who thinks you can cut revenue and not add to the deficit without equal spending cuts is a fool. Speaking of fools, we have had three Republican presidents in a row who increased spending and cut revenue.

    (edit) Personally, I'd like to see taxes go way up and domestic spending be moderated and defense cut drastically until the debt is gone. 10-20 years or so. Then, and only then, should taxes ever go back down.
    (edit2) Anyone who wants to be called a fiscal conservative MUST agree with ^ or they aren't fiscally conservative. Maybe something else, but not conservative.
     
  17. ThisIsNotMe macrumors 68000

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    #17
    The things you listed are what cause deficits not tax cuts.

    You act like government is entitled to 100% of our money and we should be happy they let us keep a cent. In reality the government should be grateful we allow them to take a single cent from us.
    (Well, then we get into the fact that 47% pay no federal income tax and can vote themselves benefits but that is another issue)
     
  18. rdowns macrumors Penryn

    rdowns

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    #18

    What an absurd statement. Where the hell did I say the govt. isn't taxing us enough? I simply pointed out that if you cut taxes twice, you need to cut spending in line with the reduced revenue. Please spare me the lower taxes will lead to increased revenues. Lastly, taxes are lower today than at any time in decades.
     
  19. classicaliberal thread starter macrumors regular

    classicaliberal

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    #19
    ThisIsNotMe, I'm sure everyone realizes that the 'government's money' is actually 'the taxpayer's money', but when talking about the government's financial situation, it's just easier to talk about it in these terms.

    It's very important to recognize that raising taxes by X% does not = an increase in government receipts by X%. Raising taxes and even the threat of raising taxes effects the real or perceived perception of risk in the market place, reducing total gov't receipts. (Hauser's Law)

    [​IMG]

    Overall economic health has a far greater effect on gov't receipts than the rates themselves.
     
  20. Huntn macrumors G5

    Huntn

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    #20
    A very myopic view. Revenues are half the equation, spending is the other half.
     
  21. jnpy!$4g3cwk macrumors 65816

    jnpy!$4g3cwk

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    You can say that again. Barack Obama inherited a huge deficit and negative momentum when he took office-- can't blame him for that. On the other hand, when it came to financial deregulation, he was a johnny-come-lately, like the rest of Congress (except for the part of Congress that still doesn't get it), so, he shares in the blame for the debacle, like the rest of them. Oh, but, if you mean the charts are misleading about debt under Reagan -- they aren't. People just don't want to hear it.

    I agree with you that red and blue don't work. In fact, that is part of the message! You are making it much too difficult. Every president from Truman to Carter was responsible (don't forget -- Ford had the fallout from the first oil shock to deal with, Carter the second oil shock, and yet, debt only ticked up slightly in each case). If you think in terms of Republicans and Democrats, you have to draw a line with Reagan, because he was not a fiscal conservative, unlike every post-WWII President, Republican or Democrat, before him. In this case, the graph doesn't lie.
     
  22. Macky-Mac macrumors 68030

    Macky-Mac

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    #22
    no, that's just the same old sloganeering.....they're both part of the same problem and that's an unwillingness to face up to the responsibility of balancing spending with tax revenue.

    pretty much.
     
  23. shinobi-81 macrumors 6502

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    #23
    I totally agree with you on this, although I'm tempted go as far as saying that it was Richard Nixon who sealed the fate of America's economy when endorsing the end of the gold standard in 1971.
     
  24. rdowns macrumors Penryn

    rdowns

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    #24

    No, Reagan was the start. He's also the first one who gave Wall. St. the Treasury Dept. when he appointed Donald Regan.
     
  25. ThisIsNotMe macrumors 68000

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    #25
    And why exactly should spending be balanced with tax revenue when the federal government cannot figure out how to spend my money correctly in the first place?

    Why should my taxes as a resident California be increased when California only received something like $0.70 back for every dollar it sends to D.C.?

    Why should my federal income taxes be increased when 47% of the country pays absolutely no federal income tax or gets a tax credit (IE PAID) back?

    You wonder why these billionaires who advocate for more taxes are giving their money to the Gates foundation instead of simply voluntarily paying more taxes. They know that the government is just going to piss it away.
     

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