Far East Cynic

So easy even a caveman can do it…..

But not, evidently, a teabagger.

Do simple arithmetic and revamp the federal budget to actually bring the deficit down in any type of meaningful way.

Over at this website, there is an interactive budget simulator that allows you to do puts and takes against the federal budget-with the goal of getting the projected proportion of the deficit down to below 60% of GDP by 2018. Right now, under reasonable assumptions, the public debt of the U.S. is projected to grow to 85% of GDP by 2018, 100% by 2022, and 200% in 2038.

As the committee for a Responsible Budget notes:

Drastic action now would threaten the already fragile economic recovery. But failing to convince markets and creditors that the U.S. is serious about reducing its debt in the longer term would cause interest rates to rise dramatically and likely trigger a fiscal crisis.

We need to establish a fiscal goal and commit as a nation to achieving it. The Peterson-Pew Commission recommends a goal of stabilizing the debt at 60% of GDP by 2018 in the report, Red Ink Rising. We must set an ambitious, yet attainable, goal that Americans can support. See more about the reasoning behind this goal on the FAQ page.

This simulation was designed to illustrate the tough budget choices that will have to be made and to promote a public dialogue on how we can set a sustainable fiscal course. How do your choices stack up? Good luck.

This thing is useful-because in a very visual and easy to understand method-it shows how simplistic the assertions made by the Tea Bag nation really are-and why they  are only focused on anger:  anger at the President, anger at anyone who does not think like them ( or actually thinks at all), anger at anyone who does not subscribe to their orthodoxy. Were they serious, they would understand that -without some means to enhance revenue generation-you simply cannot get there from here. No matter how many lies Glenn Beck or Saint Sarah tell you.

I did two simulations. The first I will refer to as “Teabagger lite”-meaning that it takes what are “concensus” positions from the aggregate of the Teabagger nation. This is tougher than it seems-especially given that they really have not voiced any solid positions, other than they think Obama is the spawn of the devil, and tax cuts are good-no matter how many wars we are condemned to fight for the next decade.

Under “Teabagger lite”  I:

Maintain Current Funding Levels and troop levels in Iraq and Afghanistan

Renew All the Bush Tax Cuts

Grow Regular Discretionary Spending with Inflation (Revenue neutral)

Cut Foreign Economic Aid in Half

Expanded Veteran’s Income Security Benefits

Increased the size of the Army by 46,000

Canceled Unobligated ARRA Funds

Decreased highway funding by 25%

Froze unemployment benefits

Cut federal funding of K-12 legislation

Cut school lunch programs

Repealed health care

Canceled certain NASA missions

Eliminated outdated federal programs

Cut the corporate tax rate and left other misc tax cuts in place

Improved tax enforcement.

Sold Certain Federal assets.

The net result-the deficit percentage JUMPED from 69% of GDP to 81% of GDP. Most of that was due to three things: 1) Extending the Bush tax cuts which punched a big hole in the budget 2) Repeal of health care-which increased federal government costs overall and 3) left other tax cuts unfunded-just like all of their Lafferesque heros want.

IT     JUST    WON’T     WORK.    But then,  the Teabaggers know that already. They just don’t care-they will get what they want, and to hell with everyone else.

Now lets do it my way shall we?

Here are my options-my plan focused on revenue growth in the short term combined with realistic cuts that did not screw average Americans.

I:

Reduce Troops in Afghanistan to 30,000 by 2013. ( All troops in Iraq gone by the end of June 2011.)

Allow All the Bush Tax Cuts, Except for AMT Patches, to Expire.

Grow Regular Discretionary Spending with Inflation

Enact Administration’s Proposed Weapon System Cuts.

Increase Foreign Economic Aid by 50% (the better to not fight stupid wars with-especially in Africa).

Increase spending on homeland security

Increase the Army by 46000

Eliminate the New Markets Tax credit

Gradually reduce Social Security benefits for all people after 2050. Enact a central provident fund scheme and REQUIRE ALL EMPLOYERS AND EMPLOYEES to participate-regardless of how big the business is.

Increase Medicare Cost Share

Establish a Public Option in the Health Insurance exchange

Enact Malpractice reform and Tort Reform

Eliminate outdate programs

Freeze all federal salaries for two years

Expand spending on High Speed Rail, Mass Transit and research and development.

Cut earmarks.

Sell certain government assets

Fully fund NASA’s Constellation program and all other manned Spaceflight programs

Impose Financial Crisis Responsibility Fee

Enact Cap and Trade legislation

Increase the gas tax by 10 cents a gallon.

Enact Five Percent VAT With Partial Rebate

Impose Surtax on Income above $1 million

Raise Social Security Payroll Cap to Cover 90% of Earnings

Improve Tax Collection

Limit Mortgage Interest and Other Itemized Deductions for High Earners

Curtail the State and Local Income tax deduction

Elminate subsidies for bio-fuels

Replace Employer Health Care Exclusion with a Flat Credit (In Place of Excise Tax.)

My results? The debt is reduced to 48% of GDP. The dollar is saved-we get needed investment in things that make jobs and we increase revenue for the purpose of balancing the federal budget.

Of course the problem is that very few of these ideas can survive in the current skewed political climate. So to achieve the success I know is possible-I would need to be free to rule with an iron hand. Which is just fine with me-as long its my hand doing the ruling.  My dream is to be strong enough and have enough power to tell the Teabaggers one simple statement, ” You will not get your way!

And my plan does not even include the potential revenue streams that come from legalizing prostitution and marijuana…………………

Never going to happen-but remember,  Teabag solutions DON”T WORK. Friends don’t let friends think Teabag.

  1. Skippy,
    It seems to me that you are contridicting yourself on some points. You say eliminate subsidies for Bio-fuels, yet you want to enact Cap & Trade legislation.

    Increase fuel taxes by 10 cents a gallon, yet keep the High Speed Rail program. So you are saying that it is the job of the government to force people to give up their cars and take the train.

    So the investments on these new programs, are they private business or government researc? The reason why I ask, I have a solution that could solve the water problems in CA and increase construction business, but if my plans were successful, I would have to face the fact that because I made a “better mouse trap” I have to pay an additional surtax on my income (in addition to the increased tax rates that you are proposing).

    Enact Malpractice reform and Tort Reform – No problems here.

    Increase spending on homeland security – Simple, secure the borders and start deporting those who are found here illegally. Pretty soon the message will be that it is a lot harder to get into America.

    Increase Foreign Economic Aid by 50% – I say decrease it. Instead of my tax dollars going to places like the PI and having Sailors and Marines go there on “Goodwill” visits and build schools and clinics, let the PI government do it themself.

  2. Which programs are you discussing.-for example in my reform of Social Security is both. The federal piece is forcing buisness to and indivduals to participate in the CPF. The actual funds are run privately-there is just no way to withdraw them early.

    With a ten cent gallon surcarge on gas-people can still use their cars. But they are going to be made to understand that their love of cars has a price-as does their love of stupid wars for oil. The idea is to incentivize not using them-and use the level of train service as is found in Europe or Japan.

    The research is government funded.

  3. one of the things I really, really envy the Japanese is their railway system… years of structural underfunding of railways in Poland are showing, and the cars/roads system is not getting much better…

  4. Did you read Warren Buffet again saying “increase taxes on the rich” –

    “Thanks to tax cuts passed under former president George W. Bush, Buffett said he pays the lowest tax rate of anyone in his office, including “secretaries who answer the phone” and the cleaning lady.”

    Huffington. I read it in the Bangkok Post this morning.

  5. “The research is government funded.”
    Skippy, you are a smart man, and I want you to go back to your old USN days during the Cold War and think back on all of the USSR major weapons systems. How they fared against the US systems at the time. Most of our systems were better than theirs, and theirs were mainly copies of ours. Why was that? A little thing called capitalism and the free market. I am not going to say that there were not any excess in the R&D and Ike warned us about the Military Industrial complex, but you have to admit that fielding a weapon system based on a competitive market normally gave you a better product, than the state run monopoly.

    Yes the government should support some funding, but that is not their main job. Private industry should take the lead. If they make a profit, so be it, as long as they aer taxed fairly and the items are made in the USA no problems.

  6. Richard-that’s in there-with improved enforcement.

    Maurice-there are things that require government partnerships with industry. We already have the models for that. However industry will not do the research as long they are focused only on share price and not the long term. Even business leaders such as buffet are saying that.

  7. Remember how the rotund one, no, not Christie, but Al Gore,
    who was tasked by Bubba to tackle fraud and waste in medi are?
    How well did that turn out?
    There is plenty of money. albeit borrowed, but the feds are so corrupt, inept, incompetent and lack the common sense God gave a cow, that unless they can get a handle on spending their resources WISELY, more taxes just means that the connected ones get the money and we the common folk, get the shaft.
    You worked in and for the feds, who knows better than you the ineptitude that is the federal government?

  8. Skippy,
    One way to cut Federal Spending is to revise the way spending is conducted. I hate to have to go through the “mad rush” that occurs towards the end of September, to spend any money you have left from the FY so that it will not be on the books for next FY. Basically, our system is set up so that there is no incentive to save but spend just to spend.

    Why not just go with the policy of saving. If a government agency finds that towards the end of the FY, they have managed to save a few thousand dollars, let them bring that forward to next FY. As long as it is spent properly it shouldn’t be a problem. But what we have now is, many agencies buying useless items in a mad dash to meet a spending deadline.

    That is no way to run a business.

  9. Well, that is only partially true-depending on the color of money involved-you do have two years to spend it-provide it is obligated on time. Obligation and expenditure are two different things.

    But it traces back to the Consititution directly.

  10. Maurice:

    Take a look at the FFRDC’s and their predecessors. The public and private sector partnership has been key in many critical weapons systems. AEW radar and the accompanying video data link (viz. Project CADILLAC) came from one such partnership — between the Radiation Lab, RCA and the Navy. The legacy of that partnership lives on today in the form of the E-2 Hawkeye…
    w/r, SJS

  11. Maurice is onto something.. I remember when S. Shriver was in charge of the Peace Corps and actually RETURNED money he didn’t need/use..No one, of course, could believe it.
    They told him that the next FY he couldn’t ask for more money because of what he did.

  12. Hey, I am not saying that the government shouldn’t help in research. I understand that they have a role in getting the funding started and other roles, but ones research is going, it comes a point where the private sector should take over. But to say that the governement should only be the lead R&D in making a rail system is bit too extreme.