The Institute for Policy Studies just issued a report saying that America is not broke. They state: “While doomsday calls for drastic spending cuts have dominated this debate, we at IPS have a completely different view. In a new report, “America Isn’t Broke,” we argue that the crisis is an opportunity to harness the country’s abundant resources in ways that will make our economy more equitable, green, and secure.”
“We did not attempt to develop an exhaustive list of possible revenue-raisers or spending cuts. Rather, we focused on 24 fiscal reforms that we believe would go furthest to make the country more equitable, green, and secure. These reforms amount to an estimated $824 billion in potential revenue per year — seven times the total savings the supercommittee was tasked with producing. Continue reading
CNN posted polling results: “Debt ceiling deal should include cuts and tax increases”
The story by CNN’s Rebecca Stewart
“According to a CBS News Poll released Monday, 66 percent of Americans say an agreement to raise the amount of money the nation can borrow should include both spending cuts and tax increases.
More than half of Republicans say the agreement should be balanced and roughly seven out of ten Democrats and independents say the same. More tea party supporters also agree, since 53 percent say any deal should include both spending cuts and tax increases.
Republicans and adults who identify with the tea party are more likely than Democrats or independents to support a plan that only includes spending cuts. Almost four in 10 Republicans favor using spending cuts alone to reduce the deficit and 44 percent of tea party supporters agree. Twenty percent of Democrats would leave tax increases out of a debt ceiling deal and include cuts only; 28 percent of independents say the same.”
Methodology: The CBS New Poll was conducted by telephone among 810 adults nationwide from July 15-17. It has a sampling error of plus or minus four points.
Will Congress reflect these views? We will know soon, as the clock is ticking down.
See article: Debt Ceiling Poll
New York Times: “As President Obama and Congress brace to battle over how to reduce chronic annual budget deficits, Americans overwhelmingly say that in general they prefer cutting government spending to paying higher taxes, according to the latest New York Times/CBS News poll.”
Well, duh! Did we really need a poll to tell us that?
The questions are interesting though.
See Survey questions and results here
The Federal Budget Deficit
Do you think it is necessary to take immediate action to lower the budget deficit or do you think it is possible to wait for better economic times? Most people say it is necessary to lower the budget deficit.
In order to reduce the federal budget deficit, do you think it will be necessary or not necessary to increase taxes on people like you? Most people think it will not be necessary to raise taxes on people like them.
No surprise with those answers. But now it gets interesting.
I received an email from Vice President Biden telling me that the tax deal struck by Obama and the Republicans in Congress is a good deal. If the Bush-era tax cuts are allowed to sunset, it would cost the average taxpayer $3,000.
Really? The tax deal may or may not be good, but I am very wary about averages. When you are in a situation where there is a huge income disparity, the average gives a distorted picture of reality. If the administration is going to be honest about the numbers, they should provide the median rather than the mean (average). And if they are going to use the mean, they should also show the standard deviation.
Now these guys know that. So the fact that they resorted to a statistical distortion to convince people to support their budget deal made me seek better information.
The average monthly social security benefit to retirees is $1,170. But still, most people opt to start collecting it at viagra blindness age 62 even though they will get a reduced benefit, rather than wait until they are 66. But the viagra 200mg argument around raising social security retirement age is about life expectancy. Even simple facts, like life expectancy, turn out not to be simple once you start getting into the details, according to an column by Ezra Klein, September 03, 2010 “Start with the basic rationale for raising the retirement age. Rep. Paul D. Ryan (R-Wisc.) has argued that when Social Security was signed into law, the retirement age was 65 and life expectancy was 63. “The numbers added up pretty well back then,” he said on Fox News. But that’s misleading. That figure was buy cialis online driven by high infant mortality. If you were a white male who’d made it to age 60 in 1935, you could expect 15 more years going forward. If you’re a white male who lives to 60 today, you can expect 20 more years going forward.” “Moreover, those averages conceal a lot of inequality. In 1972, a 60-year-old male worker who made less than the median income had a life expectancy of 78 years. By 2001, he had a life expectancy of 80 cialisonline-storeedtop.com years. Meanwhile, workers in the top half of the income distribution shot to 85 years from 79. Insofar as pharmacycanada-rxedtop the argument for raising the retirement age is that “Social generic viagra online Security beneficiaries live a lot generic cialis online longer today than they did in 1935,” it should be restated as: “Social Security beneficiaries tend to live somewhat longer today than they did in 1935, and that’s much more true of rich beneficiaries than poor beneficiaries.” by Ezra KleinSeptember 03, 2010 http://www.newsweek.com/2010/09/03/we-should-leave-social-security-alone.html
The NY Times has an interactive budget puzzle. You choose the budget cutting and revenue generating options, and it tracks it on a graph.
Of course, it depends on the assumptions used to come up with amount of money that will be cut or generated for each of the options.
A few seem a bit off to me, so they might have different assumptions.
The social security cut is problematic–because there is enough money in the trust fund for more than 30 years, so making any cuts really does not help with the deficit in the near term.
And the amount of money that would come into the treasury if the mortgage deduction was eleminated seems on the low side.
But it’s kind of fun!
This data is standardized to what money is worth in 2010. We can see from the past that the federal government collected enough in revenue to cover the outlays for much of the 1950s-1970s. It is after the 1980s where the federal government began its habit of not collecting enough revenue to meets its spending obligations–and clearly, the gap reaches ridiculous in 2008 and 2009.
The estimates for 2010 and beyond are estimates–and they look very optimistic to me given the economic outlook and the desire by some to continue cutting taxes.
But the data from the past suggest that returning to the tax rates of the 1950s and 1960s might help raise enough money to meet obligations. Alternatively, it might be helpful to cut spending so that the big ticket items are more in line with spending in the 1950s and 1960s. Or perhaps, both increasing taxes and cutting spending are needed if the federal government is to get the budget close to balanced?
The current media hype is that Social Security is on the brink of bankruptcy. Why? Because the economic recession has resulted in reduced revenue for social security this year and more people than expected opted to collect social security.
“CBO projects that revenues from payroll taxes credited to the trust funds will be $12 billion lower in 2010 than in 2009, while benefit payments will be $37 billion higher. This year, for the first time since the Social Security reforms of the early 1980s, benefit payments from the trust funds will exceed the trust funds’ receipts from the public (which consist mostly of revenues from payroll taxes and exclude interest on Treasury securities held by the trust funds).”
However, more money has been collected for social security than spent over time and CBO states that Social Security –also known as the Old Age and Survivors Insurance (OASI) trust fund– had “a balance of $2.3 trillion at the end of fiscal year 2009; CBO estimates that the OASI trust fund will continue to maintain a positive balance for more than 30 years.” This means that that there will be enough money to meet obligations until at least 2040. Continue reading