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Topic: How do you think the US economy is doing right now?

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betarhoalphadelta

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Re: How do you think the US economy is doing right now?
« Reply #28 on: July 09, 2024, 03:24:22 PM »
Cutting spending by a third sounds nice, but a LOT of government spending is mandatory and cannot be cut, no matter what, things like debt service.

The largest nonmandatory spending is for defense.  The other spending items are relatively small potatoes, usually under $100 billion (which is a rather large tater).
Exactly. You can't get to 30% without absolutely massive cuts to Social Security and Medicare/Medicaid benefits, and to defense. 

In fact, mandatory spending + interest on the federal debt combines to 73% of Federal spending, so you'd have to eliminate the ENTIRE discretionary spending budget, including slashing defense to zero, and you'd still only reduce it by 27%. 


FearlessF

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Re: How do you think the US economy is doing right now?
« Reply #29 on: July 09, 2024, 03:30:29 PM »
how about no cuts, just cap the budget at current.
No increases for next year.
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betarhoalphadelta

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Re: How do you think the US economy is doing right now?
« Reply #30 on: July 09, 2024, 03:36:43 PM »
how about no cuts, just cap the budget at current.
No increases for next year.
Can't with SS/Medicare/Medicaid. Those benefits are defined by law and you can't just "decide" not to pay them. 

Technically Congress could cut benefits, of course... Good luck with that!

847badgerfan

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Re: How do you think the US economy is doing right now?
« Reply #31 on: July 09, 2024, 03:39:39 PM »
I don't think the 30% was meant across the board.

I think that was meant for Federal employee volume cut. Could probably cut 2/3 of them and not notice a thing.
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FearlessF

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Re: How do you think the US economy is doing right now?
« Reply #32 on: July 09, 2024, 03:43:44 PM »
Can't with SS/Medicare/Medicaid. Those benefits are defined by law and you can't just "decide" not to pay them.

Technically Congress could cut benefits, of course... Good luck with that!

just pay the same as last year

no cuts, but no increases
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betarhoalphadelta

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Re: How do you think the US economy is doing right now?
« Reply #33 on: July 09, 2024, 03:44:17 PM »
I don't think the 30% was meant across the board.

I think that was meant for Federal employee volume cut. Could probably cut 2/3 of them and not notice a thing.
Yeah and cutting 2/3 of them would make very little change to federal spending, too. 

847badgerfan

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Re: How do you think the US economy is doing right now?
« Reply #34 on: July 09, 2024, 03:47:29 PM »
Yeah and cutting 2/3 of them would make very little change to federal spending, too.
Agreed. But it would make life a lot better for a lot of people.
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betarhoalphadelta

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Re: How do you think the US economy is doing right now?
« Reply #35 on: July 09, 2024, 03:49:01 PM »
just pay the same as last year

no cuts, but no increases
Two problems:

  • Cost of living increases are defined by law. So Congress would have to actually CUT out the CoL. They don't dare.
  • The bigger problem is that there are more people taking SS/Medicare every year compared to the previous. So even if you didn't increase the benefits per person in a given year, you'd still increase spending as the pool of eligible recipients increases in size. 




MaximumSam

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Re: How do you think the US economy is doing right now?
« Reply #36 on: July 09, 2024, 04:08:22 PM »
In the Columbus area they are building an Intel chip factory, which everyone is excited about. As part of that they have a series of loads of materials that come up to the area, past my mom's house. So every other day my mom is posting about the "super Loads." I can't even make a joke.

NorthernOhioBuckeye

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Re: How do you think the US economy is doing right now?
« Reply #37 on: July 09, 2024, 04:21:02 PM »
Cutting spending by a third sounds nice, but a LOT of government spending is mandatory and cannot be cut, no matter what, things like debt service.

The largest nonmandatory spending is for defense.  The other spending items are relatively small potatoes, usually under $100 billion (which is a rather large tater).
The mandatory spending on the government could be reduced by cutting the number of government emloyees and by extension, the infrastructure and other assets they use in their jobs. 

The first thing I would do is eliminate a few Federal Departments starting with Education and Energy. That could save a few BILLION per year alone. 

Currently, our debt is about 100% of GDP. We CANNOT sustain that. We have to make drastic changes or we will bankrupt the nation. You have to start somewhere and to me, the most logical place is wiping out entire, worthless departments. It doesn't solve the problem, but starts us in the proper direction. Its like the old question, how do you eat an elephant? One bite at a time. 

betarhoalphadelta

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Re: How do you think the US economy is doing right now?
« Reply #38 on: July 09, 2024, 04:32:17 PM »
The mandatory spending on the government could be reduced by cutting the number of government emloyees and by extension, the infrastructure and other assets they use in their jobs.

But you can't. The amount of benefits that SS/Medicare/Medicaid and the other entitlement programs must be paid are completely unrelated to the number or cost of government employees. 

If you can administer those programs with fewer people--and I think you CAN--then it's a good thing. But it's a drop in the bucket compared to the amount spent, and reducing the people won't reduce the amount spent. It'll just be done more efficiently. 


Quote
The first thing I would do is eliminate a few Federal Departments starting with Education and Energy. That could save a few BILLION per year alone.

You're using all-caps on BILLIONS when we're talking about problems numbering in the TRILLIONS of dollars. 


Quote
Currently, our debt is about 100% of GDP. We CANNOT sustain that. We have to make drastic changes or we will bankrupt the nation. You have to start somewhere and to me, the most logical place is wiping out entire, worthless departments. It doesn't solve the problem, but starts us in the proper direction. Its like the old question, how do you eat an elephant? One bite at a time.

Listen, I'm not saying that we shouldn't wipe out entire, worthless departments. What I'm saying is that you eliminate 100% of every discretionary spending department, including defense, that will basically get you to zero deficit. 2023 we spent $6.1T, and took in $4.4T in taxes. The difference is $1.7T, or the entire Federal discretionary spending budget

You can [and should] keep taking bites out of the elephant, but the "elephant in the room" is entitlement spending. 

847badgerfan

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Re: How do you think the US economy is doing right now?
« Reply #39 on: July 09, 2024, 04:36:09 PM »
The tax system needs an overhaul. A massive one.

Flat tax everyone, including taxing unrealized gains for those making $X Million and up on those gains. I dunno. Just an idea.

No loopholes, no deductions.

The IRS could be almost eliminated.
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medinabuckeye1

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Re: How do you think the US economy is doing right now?
« Reply #40 on: July 09, 2024, 04:37:58 PM »
@betarhoalphadelta 
Looking at this back-and-forth between you, @847badgerfan , and @FearlessF I had to laugh.  I especially laughed because I assume that you, as a Libertarian, probably generally agree with them on cutting Federal Employees but you realize that it wouldn't materially impact the budget so your argument isn't "Oh my god we can't do that" but rather "Yeah, so what."  

Working around local government has given me some insight into how legislators think and how legislatures operate.  

The first thing to understand is that they think in terms of things they can understand.  As it relates to money (I think I've used this example here before) that means something like this:

  • I say $25k, they think cheap car
  • I say $50k, they think nice car
  • I say $75k, they think really nice car
  • I say $100k, they think REALLY nice car or (in OH anyway), REALLY low-end home
In CA you can go higher because housing is so expensive but here in OH that really only works up to about $500k-$750k.  At that point (in OH) you've probably reached the point of "the most expensive house anyone I know owns" and after that they (legislators) have nothing to grasp.  Beyond that it just becomes "A LOT".  Once you reach "A LOT", nobody really seems to notice how big that actual "lot" is.  Ie, they'll argue like crazy over saving $5k on a $50k purchase but when you are asking for $5M, nobody asks any questions.  

This is really stupid because saving 10% on a purchase of $50K is only $5k, big deal but saving 10% on a a $5M purchase is HALF-A-FREAKING-MILLION DOLLARS.  


The next thing is that people on the accounting side of things have a saying that whenever cuts need to be made, Councils (municipal legislatures so like Congress but for your City instead of the US) almost always focus on "Paperclips and Overtime".  

I've seen this literally dozens of times.  Some budget needs cut and you and bet that some Council Member will say "You have $2,850 budgeted for office supplies, couldn't you get by on $2,500?  The unfortunate accountant working for that body will be sitting in his/her chair thinking "Yeah, but we need to cut $500 K, WTF are we doing talking about $350?  

In local government, payroll is usually the dominant expense.  For schools it is often around 75% or more.  For Cities it is usually somewhat lower but still frequently around half or more.  Then, the "rest" is typically made up of things like Utilities, Insurance, Debt Service, and other things that really can't be cut.  

The bottom line (for local Govn't) is that if you want to cut the budget in any appreciable way, you HAVE to reduce employee count.  

In a Federal context what you pointed out is accurate and the employee compensation portion is barely more than a rounding error.  

I always laugh when someone says we need to cut Congressional salaries.  On the scale of the chart you provided, a dot representing Congressional salaries wouldn't be visible.  

I frankly think that we should probably cut a LOT of defense spending but I also realize that this wouldn't even have a material impact on the overall budget.  Per your chart Defense spending was just over 0.8 Trillion out of a budget of $6.1 Trillion.  Ie, defense represents around 13% of total expenditures so even a drastic 25% cut in defense spending would only reduce the overall budget by around 3%.  

Also note that per CBO, last year the US brought in $4.4 Trillion and spent $6.1 Trillion for a deficit of $1.7 Trillion.  To balance the budget you would need to cut almost the entirety of both Nondefense AND Defense "discretionary" spending of $917 Billion and $805 Billion respectively.  That adds up to $1.722 Trillion.  That would only BARELY balance the budget.  

medinabuckeye1

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Re: How do you think the US economy is doing right now?
« Reply #41 on: July 09, 2024, 04:42:35 PM »
@betarhoalphadelta , you said a lot of things that I was typing but I didn't see that until after I posted.  

 

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