Financial News

[Balta1701]

Sorry for the lack of clarity (again), we disagree on the necessity of cuts going forward once the economy has recovered.

Medicare still needs to be improved/overhauled somewhat although the PPACA helped the projections significantly, the defense department needs to be cut back significantly, the wars need to end. Those are cuts you'd agree to, right?

[StrangeSox]

Medicare still needs to be improved/overhauled somewhat although the PPACA helped the projections significantly, the defense department needs to be cut back significantly, the wars need to end. Those are cuts you'd agree to, right?

 

I do not know enough about Medicare to comment, yes to the other two. I was referring to the very large gap between mine and ss2k5's vision of the proper size and scope of government.

[Balta1701]

I do not know enough about Medicare to comment, yes to the other two. I was referring to the very large gap between mine and ss2k5's vision of the proper size and scope of government.

That's the thing, if you look at his last post, you and I would probably both agree with everything in it. The government should be no larger than is necessary for appropriate regulation, maintenance, and defense of the nation and its population. We disagree on the things the government should do, but I don't think anyone here would sensibly argue that government should be larger for the sake of having a larger government, rather than government should be a tool to accomplish a certain goal

[southsider2k5]

That's the thing, if you look at his last post, you and I would probably both agree with everything in it. The government should be no larger than is necessary for appropriate regulation, maintenance, and defense of the nation and its population. We disagree on the things the government should do, but I don't think anyone here would sensibly argue that government should be larger for the sake of having a larger government, rather than government should be a tool to accomplish a certain goal

 

Well unless you were one of the millions of governmental employees...

[clyons]

It's either a hard rule and thus terrible policy or you neuter it such that it's essentially meaningless. Especially given the perpetual state of war we find ourselves in.

 

Agreed.

 

Plus, I've always thought the whole concept is based on a cop-out: "Oh we can't balance the budget now, its just too hard (but we would if the Constitution said we had to)."

[StrangeSox]

That's the thing, if you look at his last post, you and I would probably both agree with everything in it. The government should be no larger than is necessary for appropriate regulation, maintenance, and defense of the nation and its population. We disagree on the things the government should do, but I don't think anyone here would sensibly argue that government should be larger for the sake of having a larger government, rather than government should be a tool to accomplish a certain goal

ss2k5 and I obviously disagree on the definitions of "no larger than is necessary for appropriate regulation, maintenance, and defense of the nation and its population," that's all I was getting it. That a conservative and a left-liberal who have substantial philosophical differences on the role of government can recognize the negative impacts of the policies that are being pushed.

[Balta1701]

Well unless you were one of the millions of governmental employees...

If one is employed by the public sector and thinks the government should be bigger, we shouldn't count their opinion. If one is employed by the private sector and thinks the government should be smaller, therefore, we similarly should discount their opinion.

[Y2HH]

If one is employed by the public sector and thinks the government should be bigger, we shouldn't count their opinion. If one is employed by the private sector and thinks the government should be smaller, therefore, we similarly should discount their opinion.

 

One benefits financially from a larger government through job stability/availability, the other gains nothing financially from the smaller government.

 

Apples to Oranges.

[Balta1701]

One benefits financially from a larger government through job stability/availability, the other gains nothing financially from the smaller government.

 

Apples to Oranges.

So, there's no benefit to the private sector from smaller government or lower taxes? Well, I'll make sure to remember that.

[Y2HH]

So, there's no benefit to the private sector from smaller government or lower taxes? Well, I'll make sure to remember that.

 

Just because the government is smaller doesn't necessarily mean taxes are lower. It just means they're spending less money. So, yes, you should be sure to remember that.

 

Maybe you should remember that in 1998, the government was smaller -- yet taxes were higher. OMG HOW'D THAT HAPPEN?!

 

Edited July 29, 2011 by Y2HH

[Balta1701]

Maybe you should remember that in 1998, the government was smaller -- yet taxes were higher. OMG HOW'D THAT HAPPEN?!

We were running a much smaller deficit.

[Y2HH]

We were running a much smaller deficit.

 

Means nothing in regard to my point.

 

Government can be smaller while taxes are higher...so back to my original point, just because a government is smaller, doesn't necessarily mean the private sector gains from tax breaks or anything of the sort. They COULD gain from that, but there is nothing guaranteeing that they do. Small government and lower taxes do not necessarily go together.

Edited July 29, 2011 by Y2HH

[Balta1701]

Means nothing in regard to my point.

 

Government can be smaller while taxes are higher...so back to my original point, just because a government is smaller, doesn't necessarily mean the private sector gains from tax breaks or anything of the sort.

And if you want to nitpick this much, then someone working a desk job at the FBI doesn't benefit all that much if the government funds a new highway...and therefore, the original statement that government employees shouldn't have their opinion counted on the size of the government is rendered bunk. As I was doing anywayl

[Jenksismyhero]

It's either a hard rule and thus terrible policy or you neuter it such that it's essentially meaningless. Especially given the perpetual state of war we find ourselves in.

 

Why is a hard rule terrible policy? Why on earth does a government need to spend more money than it brings in, except in emergent situations like war. Don't even define it, just say that Congress has to vote in a special session at a super majority or something.

[Jenksismyhero]

I'd have to see what the qualifications were for those kind of things. Philosophically I HATE things that limit the ability of the government to govern when it is most important. The reality is if our leaders governed with some sense of responsibility for the future, we wouldn't need these kinds of amendments.

 

Nothing in our 230+ year history supports the idea that this would ever actually happen. When your job depends on making people happy, and making people happy entails bringing some money back to your district/state, there's zero incentive to not spend as much as you can grab.

[Balta1701]

Nothing in our 230+ year history supports the idea that this would ever actually happen. When your job depends on making people happy, and making people happy entails bringing some money back to your district/state, there's zero incentive to not spend as much as you can grab.

This flows quite well both ways though.

 

Remember...hypothetically, let's say we balance the budget tomorrow. However we do it, don't care. That still doesn't mean that in next year's election, the Republican candidate won't propose $1.6 trillion in tax cuts, get the Dems to agree to $1.3 trillion, and destroy any semblance of a balanced budget. You can't hamstring a future Congress just by passing certain tax laws now.

[Y2HH]

And if you want to nitpick this much, then someone working a desk job at the FBI doesn't benefit all that much if the government funds a new highway...and therefore, the original statement that government employees shouldn't have their opinion counted on the size of the government is rendered bunk. As I was doing anywayl

 

I do want to nitpick this much, and since I'm in the nitpicking mood...

 

That someone working that desk job at the FBI benefits from the government funding that new highway because when the inevitable nationwide manhunt that the FBI conducts, to find you for financial fraud and multiple counts of insider trading, they will send that very desk agent out on field duty to capture you...and this is not a coincidence, but that agent catches you by using that very highway to solve the case! This leads to a huge book deal/movie deal, and therefore he/she DID benefit from that new highway!

 

Oh, and you end up in prison for life. Sorry.

Edited July 29, 2011 by Y2HH

[StrangeSox]

Why is a hard rule terrible policy?

 

A hard rule would mean no exceptions.

 

Why on earth does a government need to spend more money than it brings in, except in emergent situations like war. Don't even define it, just say that Congress has to vote in a special session at a super majority or something.

 

Well, you can run deficits in perpetuity as long as they don't eclipse a certain ratio of GDP growth. And as you've recognized, there are plenty of situations in which it may be necessary for government to outspend what it brings in. To handcuff the ability to respond to a crisis with either positive action or simply letting automatic stabilizers kick in with the requirement of a supermajority vote of Congress is to essentially have a hard cap in place. Imagine if we had another financial crisis 20 years from now, GDP plummets and bring revenues along with it. In order to let the safety net spending occur or, god forbid, enact fiscal stimulus, one party could hold the entire economy hostage to demand radical (and largely tangential) policy changes. Now, I know that doesn't seem likely...

[Balta1701]

I do want to nitpick this much, and since I'm in the nitpicking mood...

 

That someone working that desk job at the FBI benefits from the government funding that new highway because when the inevitable nationwide manhunt that the FBI conducts, to find you for financial fraud and multiple counts of insider trading, they will send that very desk agent out on field duty to capture you...and this is not a coincidence, but that agent catches you by using that very highway to solve the case! This leads to a huge book deal/movie deal, and therefore he/she DID benefit from that new highway!

 

Oh, and you end up in prison for life. Sorry.

And the person in the private sector benefits from the smaller government because he can come up with models saying that Housing prices never go down and convince all sorts of fools to invest trillions based on those models then walk away with a severance package worth millions while never having to worry about being investigated for financial fraud.

 

Oh, and the economy is screwed for a decade. Sorry.

 

I'm enjoying this.

[Jenksismyhero]

This flows quite well both ways though.

 

Remember...hypothetically, let's say we balance the budget tomorrow. However we do it, don't care. That still doesn't mean that in next year's election, the Republican candidate won't propose $1.6 trillion in tax cuts, get the Dems to agree to $1.3 trillion, and destroy any semblance of a balanced budget. You can't hamstring a future Congress just by passing certain tax laws now.

 

Then make a rule about timing that wouldn't allow that kind of maneuver to happen. I dunno, just on a basic level I don't see any good reason why we shouldn't have a balanced budget every year, with any surplus either going back to the American people or going to pay down the deficit.

[Y2HH]

And the person in the private sector benefits from the smaller government because he can come up with models saying that Housing prices never go down and convince all sorts of fools to invest trillions based on those models then walk away with a severance package worth millions while never having to worry about being investigated for financial fraud.

 

Oh, and the economy is screwed for a decade. Sorry.

 

I'm enjoying this.

 

Very nice move, Balta...but you haven't seen the last of me!

 

God damned meddling kids.

[Jenksismyhero]

A hard rule would mean no exceptions.

 

 

 

Well, you can run deficits in perpetuity as long as they don't eclipse a certain ratio of GDP growth. And as you've recognized, there are plenty of situations in which it may be necessary for government to outspend what it brings in. To handcuff the ability to respond to a crisis with either positive action or simply letting automatic stabilizers kick in with the requirement of a supermajority vote of Congress is to essentially have a hard cap in place. Imagine if we had another financial crisis 20 years from now, GDP plummets and bring revenues along with it. In order to let the safety net spending occur or, god forbid, enact fiscal stimulus, one party could hold the entire economy hostage to demand radical (and largely tangential) policy changes. Now, I know that doesn't seem likely...

 

Well no one is proposing a hard rule. And I think you could clearly spell out what to do in situations like that without upsetting the general rule that the budget needs to be balanced.

[StrangeSox]

Well no one is proposing a hard rule. And I think you could clearly spell out what to do in situations like that without upsetting the general rule that the budget needs to be balanced.

 

Here's something from the Washington Post that explains some of the potential problems and lack of any real benefits.

 

I don't have a problem with balanced budgets when we're at or near full employment in principle. You shouldn't be running substantial deficits when the economy is performing well because it'll leave you unable to respond adequately to a crisis, both fiscally and politically.

 

 

[StrangeSox]

Then make a rule about timing that wouldn't allow that kind of maneuver to happen. I dunno, just on a basic level I don't see any good reason why we shouldn't have a balanced budget every year, with any surplus either going back to the American people or going to pay down the deficit.

 

Those surplus tax cuts somehow end up being structural tax relief for job creators.

[Jenksismyhero]

Here's the balanced budget amendment that was 2 votes away from passing Congress in 1995:

 

SUMMARY AS OF:

1/26/1995--Passed House amended. (There are 2 other summaries)

 

Constitutional Amendment - Prohibits total outlays from exceeding total receipts for a fiscal year, unless three-fifths of the members of each House of Congress provide by law for a specific excess of outlays over receipts by a roll call vote.

 

Sets a permanent limit on the amount of the public debt. Prohibits an increase in such amount unless approved by a three-fifths majority in each House by roll call vote.

 

Directs the President to submit a balanced budget.

 

Prohibits a bill to increase revenue from becoming law unless approved by a majority in each House by roll call vote.

 

Waives the provisions of this amendment for any fiscal year in which a declaration of war is in effect, or if the United States faces an imminent and serious military threat to national security as declared by a joint resolution which becomes law.