This doesn't look good...

[chu_bakka]

In the 2000 campaign, Vice President Al Gore said we should sequester the Social Security surpluses in a "lockbox" to prevent appropriators from spending them. Bush agreed in principle. But that commitment went out the window soon after the inauguration. In his first three budgets, Bush (who had the good fortune to take office at a time when the surpluses were growing rapidly) and Congress used $480 billion in excess Social Security payroll taxes to fund basic government operationsÑabout $160 billion per year!

By so doing, Washington spenders have masked the size of the deficit. For Fiscal 2004Ñwhich began in October 2003Ñif you factor out the $164 billion Social Security surplus, the on-budget deficit will be at least $639 billion, rather close to the modern peak of 6 percent of GDP. And according to its own projections (the bottom line of Table 8 represents the Social Security surplus), the administration plans to spend an additional $990 billion in such funds between now and 2008. That year, according to the Office of Management and Budget's projections, the on-budget deficit will be about $464 billion. Only by using that year's $238 billion Social Security surplus does the administration arrive at a total, unified deficit of $226 billion. And the ultimate on-budget deficit will almost certainly be worse. OMB has proven in the past few years that its projections can't be trusted.

The accounting for Social Security surpluses has always been dishonest. But in the past few years, the Bush administration has made this shady accounting a central pillar of its fiscal strategy. The unprecedented reliance on these funds hides the failure of the administration to ensure that there is some reasonable correlation between the resources it has at its disposal and the spending commitments it makes. Bush & Co. have redesigned the tax system so that collections of the progressive taxes that are supposed to fund government operationsÑlike individual income taxesÑhave plummeted. Instead, with each passing year we rely for our current needs more on the regressive payroll taxes that are supposed to fund our collective retirement.

The persistence of the administration and its credulous allies in eliding these facts is flabbergasting. Of course, for the Bush administration to give an honest accounting of the deficits, and of the role that Social Security surpluses play in keeping them down, would be to admit the fundamental bankruptcyÑno pun intendedÑof its adventuresome fiscal experiment.

The rest is at: http://slate.msn.com/id/2093707/


This is crazy! the IMF is even telling us to get a grip.

No Mr. President... our debt was not charged on a "NO HASSLES" card. The budget is a big hassle. The budget fight is going to be UGLY this year.

[Aquafire]

Originally posted by chu_bakka


This is crazy! the IMF is even telling us to get a grip.


The IMF guys even went so far as to suggest that America might become a "third-world-country" due to it's own endemic and inept budgetary policies.

[Northgate]

You guys are crazy! We're on the biggest rebound in history! 2004 is going to show the biggest growth spurt in the last 40 years! What's wrong with you guys? Are you "rooting" for the economy to tank? Typical liberal anti-american swine! Don't you realize how dangerous you guys are?!?!

Oh wait...alternate reality moment... ;)

In all seriousness, politics aside, this is very bad. I have faith we will pull out of this intact, fix the problems and fully recover. Constant and continuous tax cuts cannot be the only policy this country employs, however. We need some new radical ideas to get this economy moving fully. In the end, I think the last two quarters will be considered an anomally created by the The Bush Tax (http://www.thebushtax.com/). Perhaps Q1 will show we're just treading water. Q3 and Q4 could crash.

[zaphod_beeblebrox]

Originally posted by chu_bakka
... This is crazy! the IMF is even telling us to get a grip...The IMF was saying the basically same thing back in 1982. That said, I'm also not happy with Bush's budgets. Yes, we were in a recession and we needed ramp up spending for the military and Homeland Security. Also, as a percent of GDP the deficit isn't all that bad but that doesn't mean we shouldn't be exercizing SOME spending restraint.

[chu_bakka]

I think you missed the point.

If you take the money we're borrowing from SS to pay the bills...

Our Debt as a percentage of GDP is almost at 6%... which stands as the record.

The tax cuts only dug us deeper. And true economic stimulation by spending on small businesses and public works programs do more than
building better bombs.

we're borrowning to pay for what we have now... and we'll be paying for it for a long time... as will our kids.

[Towel]

Don't you feel like the White House has a grand plan to end Social Security? This is the worst possible time to dip so deeply into SS funds. IIRC, 2012 is when outlays will first exceed inflows. From then on (until the boomers all die) the SS IOU that's been building for the last 20 years will have to start being repaid out of general tax funds. But there's no way we're going to be running a surplus again by then. So it's going to be either 1) raise taxes to pay for SS or 2) borrow even more to pay for SS. I guarantee that many people of a certain color will loudly complain that SS is broken, that it's draining us dry, even though that money belongs to SS and ideally should never have been spent in the first place. And even though the "trust find" has been part of the plan since the early 80s, when the last major SS reforms took place under Reagan.

If you wanted to end SS, the administration's policies over the last three years would be the perfect plan for laying the groundwork. I just don't understand why?

[giant]

Originally posted by Towel
If you wanted to end SS, the administration's policies over the last three years would be the perfect plan for laying the groundwork. I just don't understand why?

Private investments.

He's been promoting it since the campaign.

[curiousuburb]

Originally posted by Towel
IIRC, 2012 is when outlays will first exceed inflows. From then on (until the boomers all die) the SS IOU that's been building for the last 20 years will have to start being repaid out of general tax funds.

Maybe Bush has Mayan advisors telling him the world will end Dec 2012, so nobody will need SS after?

[SDW2001]

Comical. Just utterly comical. That's what AO has become.

[BRussell]

Originally posted by Towel
If you wanted to end SS, the administration's policies over the last three years would be the perfect plan for laying the groundwork. I just don't understand why? That seems to be the prevailing theory about why Republicans run up debt: that their ultimate goal is to starve the beast, to bankrupt government in the future.

I personally think that's attributing too much to them. I think there's nothing more than vote-getting behind it. Cut taxes and people like you. No conspiracies. Just banal short-term suck-upping at the expense of future generations.

[zaphod_beeblebrox]

Originally posted by chu_bakka
I think you missed the point.

If you take the money we're borrowing from SS to pay the bills...You do realize this isn't the first time we've borrowed from SS? Hint: the ONLY thing surplus SS revenue can used for is to purchase government bonds. That's the law.

[mcsjgs]

Don't cry for me, Argentina

[finboy]

Originally posted by SDW2001
Comical. Just utterly comical. That's what AO has become.

No...sad.

[SDW2001]

Originally posted by BRussell
That seems to be the prevailing theory about why Republicans run up debt: that their ultimate goal is to starve the beast, to bankrupt government in the future.

I personally think that's attributing too much to them. I think there's nothing more than vote-getting behind it. Cut taxes and people like you. No conspiracies. Just banal short-term suck-upping at the expense of future generations.

It's not taxes...it's spending. The level of taxation in the country on the whole is still unbelievably high.

[bunge]

Originally posted by SDW2001
It's not taxes...it's spending. The level of taxation in the country on the whole is still unbelievably high.

Tax on the lowest classes are unbelievably high, but most business owners can get away with tax write-off murder.

[BRussell]

Originally posted by SDW2001
It's not taxes...it's spending. The level of taxation in the country on the whole is still unbelievably high. What benchmark are you using to decide that taxes are unbelievably high? Federal income tax revenues are now at a post-WWII low (as a % of GDP). I'm not sure where to find the data exactly, but I believe the US has one of the lowest tax burdens of any industrialized country. I think Japan may be lower, and that's it.

[trumptman]

Originally posted by bunge
Tax on the lowest classes are unbelievably high, but most business owners can get away with tax write-off murder.

Tax write off murder? That is only because certain folks like yourself consider all money changing hands to be "income" even if it hasn't earned a profit.

I buy some ground beef, buns, cheese, condiments, etc. for $100. I use them to sell $200 worth of product. In your view, you would tax the whole $200 that came into my hands because it is "income" that changed hands. The government (and proper view with regard to write offs) would allow me to write off the $100 it cost to buy the materials and pay taxes on the $100 profit.

Why is that so terrible? I'll be happy to listen as to why you think the whole $200 should be taxed. Businesses are taxed on profits after expenses. Could you imagine how expensive things would be if businesses could not write off the cost of the materials? On my rentals for example I already pay property taxes, plus income tax on all the profits. Why should I pay taxes on the money that pays the mortgage, fixes the furnace, etc?

Nick

[trumptman]

Well I would say the problem should involve taxes, and spending. So who is willing to toss out what spending should actually be cut in addition to taxes being raised?

Do we honestly need PBS in the age of satellite and cable television? Couldn't the department of education get the heave ho? How about widening the tax base? Right now the bottom 50% pay 4% of all tax revenues. That is why part of why the revenues swing so broadly. When the top stops earning, the incoming taxes are just gone since the tax base is so narrow.

Toss out some spending cuts instead of just decrying tax cuts you wannabe politicos.;)

Nick

[bunge]

Originally posted by trumptman
Tax write off murder? That is only because certain folks like yourself consider all money changing hands to be "income" even if it hasn't earned a profit.

I just don't consider the 4 cars an ex-boss owned 'company expenses' since his household could only potentially use 2 of the four in the first place. And the computers put in his home, that weren't used for business, but were tax write offs, that's not right either. And the lunches that we all eat, that he could write off even though they were simply lunches, yeah, that's bad.

It goes on and on.

How about running your own business and paying yourself a 'salary' so your business loses money and thus doesn't have to pay taxes? You pay income tax on the salary, but the business gets off scott free. No, that's not right.

And why shouldn't a business pay tax on the $200? If I spend $10,000 on hot dogs, buns and mustard to feed me and my family every year, why can't I write that off like your hypothetical business does?

[bunge]

Originally posted by trumptman
Why is that so terrible? I'll be happy to listen as to why you think the whole $200 should be taxed. Businesses are taxed on profits after expenses.

To be more direct: If businesses are going to get this benefit, individuals should get this benefit as well. I don't believe our government should put the interests of business ahead of individuals.

[trumptman]

Originally posted by bunge
I just don't consider the 4 cars an ex-boss owned 'company expenses' since his household could only potentially use 2 of the four in the first place. And the computers put in his home, that weren't used for business, but were tax write offs, that's not right either. And the lunches that we all eat, that he could write off even though they were simply lunches, yeah, that's bad.

It goes on and on.

How about running your own business and paying yourself a 'salary' so your business loses money and thus doesn't have to pay taxes? You pay income tax on the salary, but the business gets off scott free. No, that's not right.

And why shouldn't a business pay tax on the $200? If I spend $10,000 on hot dogs, buns and mustard to feed me and my family every year, why can't I write that off like your hypothetical business does?

Why can't you? Hey you are preaching to the choir here bunge. You shouldn't have to pay income tax that comes out of your check before you even get to touch it. If there were a law passed tomorrow that people had to write quarterly income taxes and send them in to the government instead of having them withdrawn before they had even seen the cash, we would have the biggest tax revolt in history.

I would be more than happy to abolish the income tax. Of course I would be more than happy to write off about 75% of what the government does including Bush's prescription drug plan, and much of his governmental growth in spending.

I assure you I will gladly blast Bush in a second for the direction spending has taken under him.

Nick

[bunge]

Originally posted by trumptman
I assure you I will gladly blast Bush in a second for the direction spending has taken under him.

Does...not...compute....

Seriously though, I'm vehemently against breaks for business that individuals don't get first.

[BRussell]

Many large corporations get net tax rebates - they don't pay any taxes at all.

Check out this page (http://www.ctj.org/itep/corp00pr.htm). It shows 24 of the largest corporations that paid 0 taxes in recent years, and in fact received tax rebates. Look at number 4, CSX. That was the company run by our current Treasury Secretary. He was able to get $102 million of our money given to his business, despite the fact that they made a $387 million profit.

trumptman:
Right now the bottom 50% pay 4% of all tax revenues.
I don't believe that number. That may be federal income taxes, but there are lots of other taxes, most of which are much less progressive than federal income taxes. The payroll taxes, for one. And sales taxes. In addition, even if one accepts that number, maybe the reason is that the upper 50% have so much of the wealth in the country. Maybe a good way to widen the tax base is to have less of a disparity between the upper and lower half, rather than taxing the lower half more?

I found that info about the US taxes compared to other countries (http://www.ctj.org/html/oecdtax.htm). Of the 30 largest industrialized countries, we are 27th. Mexico, S. Korea, and Japan have lower taxes.

[bunge]

Originally posted by BRussell
Many large corporations get net tax rebates - they don't pay any taxes at all.

Check out this page (http://www.ctj.org/itep/corp00pr.htm). It shows 24 of the largest corporations that paid 0 taxes in recent years, and in fact received tax rebates.

trumptman,

Feel free to look over those numbers and respond in context to my original post.

[Chinney]

Originally posted by trumptman
Well I would say the problem should involve taxes, and spending. So who is willing to toss out what spending should actually be cut in addition to taxes being raised?

Do we honestly need PBS in the age of satellite and cable television? Couldn't the department of education get the heave ho? How about widening the tax base? Right now the bottom 50% pay 4% of all tax revenues. That is why part of why the revenues swing so broadly. When the top stops earning, the incoming taxes are just gone since the tax base is so narrow.

Toss out some spending cuts instead of just decrying tax cuts you wannabe politicos.;)

Nick

Tax the poor? Reduce spending? The U.S. already has a huge gap between the rich and the poor, and many Republicans apparently want to make it worse.

There was an interesting statistic in the newspapers over the holidays. The U.S. has often portrayed itself as the land of opportunity...a country without a real class system and where anyone can get rich. Recent studies on class mobility in the United States show differently. While there are a number of ways to measure class mobility statistically, no matter which way you choose to measure it, the U.S. comes in way behind Canada. The measures, on average show that U.S. class mobility is about half that of Canada's. Perhaps it is time for the U.S. to increase its very low taxes, increase social services, and offer the poor a better hand up.

[jimmac]

Originally posted by SDW2001
Comical. Just utterly comical. That's what AO has become.



He, he, he, he, he!

Aw, cheer up SDW!

It'll all be over in a few months and you can sling mud at the new president!:lol: