4 years of Obama, US deficit cut in half
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  4 years of Obama, US deficit cut in half
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Tender Branson
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« on: February 21, 2013, 06:28:43 AM »

Monthly Budget Review

The federal budget deficit was $295 billion for the first four months of fiscal year 2013, $54 billion less than the shortfall recorded for the same period last year, CBO estimates. Without shifts in the timing of certain payments in both years, however, the deficit for the four-month period would have been about $84 billion lower this year than the amount in fiscal year 2012.

If lawmakers enacted no further legislation affecting spending or revenues, the federal government would end fiscal year 2013 with a deficit of $845 billion, or 5.3 percent of gross domestic product (GDP), CBO estimates—compared with $1.1 trillion, or 7.0 percent of GDP, in 2012.

For more details about CBO’s most recent budget projections, see The Budget and Economic Outlook: Fiscal Years 2013 to 2023.

Total Receipts Were Up by 12 Percent in the First Four Months of Fiscal Year 2013

Receipts in the first four months of fiscal year 2013 totaled $886 billion, CBO estimates, $96 billion more than those in the same period last year. Compared with receipts in the first four months of last year:

    Individual income and payroll (social insurance) taxes together rose by $76 billion (or 11 percent)—accounting for nearly 80 percent of the gain in revenues. Taxes withheld from workers’ paychecks rose by $58 billion (or 10 percent); most of the gains came from a combination of higher wages and salaries and the expiration of the payroll tax cut in January. Nonwithheld tax receipts for the first four months of the fiscal year rose by $15 billion (or 18 percent), mostly owing to the January boost brought about by taxpayers’ shifting of income from calendar year 2013 into late 2012 in anticipation of higher tax rates. Individual income tax refunds fell by $5 billion (or 21 percent), primarily because of the IRS’s delay in processing 2012 income tax returns. Offsetting those gains was a $2 billion drop in receipts from unemployment taxes.

    Corporate income taxes increased by $10 billion (or 16 percent); tax payments rose by $8 billion, and refunds were $2 billion lower than during the same period last year.

    Other revenues rose by $10 billion. Most of the gains came from higher receipts from the Federal Reserve (up $5 billion) and excise taxes (up $3 billion).

Spending Was About 1 Percent Higher When Adjusted for Timing Shifts

By CBO’s estimate, federal outlays—totaling nearly $1.2 trillion—would have been about 1 percent higher in the first four months of 2013 than they were during that period in 2012, if not for shifts in the timing of certain payments. (The year-over-year changes discussed below reflect adjustments to account for those shifts.)

For some major programs and activities, spending increased:

    Social Security, Medicare, and Medicaid—Expenditures for each of the three largest entitlement programs were greater than those in the same period last year. Outlays for Social Security benefits increased by the largest amount—by $16 billion (or 6 percent). Spending for Medicare rose by $14 billion (or 9 percent), and outlays for Medicaid rose by $8 billion (or 11 percent).

    Agriculture—Spending increased by $12 billion, primarily because of higher crop insurance payments owing to drought.

    Disaster Assistance—Spending for the Federal Emergency Management Agency increased by $4 billion, mostly because of Hurricane Sandy.

In contrast, outlays decreased for some major categories of spending:

    Unemployment benefits—Spending declined by $8 billion (or 22 percent), mostly because fewer people have been receiving benefits in recent months.
    Defense—Outlays fell by $9 billion (or 4 percent).
    Fannie Mae and Freddie Mac—Net payments to the government-sponsored enterprises were $14 billion less than those made at the same time last year.

http://www.cbo.gov/publication/43915

...

I've highlighted the important parts.

FY 2009 deficit: 10.1% of GDP
FY 2013 deficit:   5.3% of GDP (projected)
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Franzl
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« Reply #1 on: February 21, 2013, 06:36:39 AM »

How can that be? Republicans assure me that only massive tax cuts and more military funding will reduce the deficit.
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Politico
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« Reply #2 on: February 21, 2013, 07:57:12 AM »

Celebrating deficits of slightly below $1 trillion after four years of $1 trillion+ deficits? Really?

I know European denialism says otherwise, but perpetual deficit spending of 5% of GDP when public debt is about 100% of GDP = Eventual default.

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opebo
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« Reply #3 on: February 21, 2013, 11:24:02 AM »

Celebrating deficits of slightly below $1 trillion after four years of $1 trillion+ deficits? Really?

I know European denialism says otherwise, but perpetual deficit spending of 5% of GDP when public debt is about 100% of GDP = Eventual default.

Yeah, it is probably impossible to fix what Bush did, but the point is that Obama has made huge progress.
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King
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« Reply #4 on: February 21, 2013, 05:28:34 PM »

Celebrating deficits of slightly below $1 trillion after four years of $1 trillion+ deficits? Really?

I know European denialism says otherwise, but perpetual deficit spending of 5% of GDP when public debt is about 100% of GDP = Eventual default.



These deficits are not perpetual, though.  They're only during times of economic distress.  If we planned on running a deficit for the next 100 years solid, then yeah, we'd probably be heading toward a default.
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Politico
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« Reply #5 on: February 23, 2013, 12:27:03 PM »
« Edited: February 23, 2013, 12:50:31 PM by Politico »

Celebrating deficits of slightly below $1 trillion after four years of $1 trillion+ deficits? Really?

I know European denialism says otherwise, but perpetual deficit spending of 5% of GDP when public debt is about 100% of GDP = Eventual default.



These deficits are not perpetual, though.  They're only during times of economic distress.  If we planned on running a deficit for the next 100 years solid, then yeah, we'd probably be heading toward a default.

WHAT? We've been running a deficit virtually ever single year over the past half century! Our debt is over 100% of GDP now. Your attitude was fine in 1970-something, but we are way past that point.

It's a myth that deficits are eliminated during booms. That is what should happen, but it does not happen because politicians have an incentive to ALWAYS deficit-spend regardless of the shape of the economy. We need some sort of mechanism to ensure deficits only exist during downturns and quickly evaporate during subsequent recoveries. Of course, that is much easier said than done. Bringing back the line-item veto as a Constitutional Amendment comes immediately to mind. Another key is voters forcing politicians from both parties to adhere to fiscal responsibility like they did in the late 1990s. Celebrating near-trillion dollar deficits because we were previously running above-trillion dollar deficits brings to mind the delusional rhetoric of the Politburo in the late 1980s.
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Torie
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« Reply #6 on: February 23, 2013, 12:28:38 PM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.
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All Along The Watchtower
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« Reply #7 on: February 23, 2013, 02:20:45 PM »

"Reagan proved that deficits don't matter."
-Dick Cheney
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opebo
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« Reply #8 on: February 23, 2013, 03:00:04 PM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.

So, are you advocating a 70% tax rate for yourself?
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King
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« Reply #9 on: February 23, 2013, 03:32:30 PM »
« Edited: February 23, 2013, 03:38:56 PM by King »

Celebrating deficits of slightly below $1 trillion after four years of $1 trillion+ deficits? Really?

I know European denialism says otherwise, but perpetual deficit spending of 5% of GDP when public debt is about 100% of GDP = Eventual default.



These deficits are not perpetual, though.  They're only during times of economic distress.  If we planned on running a deficit for the next 100 years solid, then yeah, we'd probably be heading toward a default.

WHAT? We've been running a deficit virtually ever single year over the past half century! Our debt is over 100% of GDP now. Your attitude was fine in 1970-something, but we are way past that point.

I'm not talking about deficits in general.  I'm talking about deficits in excess of 5% of GDP, which is what you were complaining about.  The federal budget never needs to be balanced, but it does need periods where it is outpaced by growth of GDP.

Thank you for bringing up the 1970s.  1950s-70s we ran deficits virtually every year, but our debt declined because our GDP grew to the point where that debt was chump change.

You are correct that 5+% of GDP deficit perpetually will lead to default, because the GDP will never grow 5% perpetually, in fact it rarely does in a single year.  However, the federal government can run deficits infinitely if it keeps it around and below that threshold.  A deficit locked in at 2.5% of the GDP can last for an eternity without ever being balanced.  The nominal number that is the national debt can be $20, $50, $100 trillion dollars, as long as we have a GDP of $21, $51, $101 trillion.  We'll be okay.

Right now, we're about $1 trillion behind on nominal GDP with our nominal debt (15.6 to 16.6).  The debt is expected to grow to $18.4 trillion by the end of 2016.  If we grow our nominal GDP by 18% over the next four years, guess what? We'll be back in the green at 18.45 trillion GDP and thus a shrinking Debt-to-GDP ratio, and we won't have a debt problem.

Think that's impossible?  Our nominal GDP grew by 12% over the last four, during "economic malaise."  18% nominal growth over a four year period can be done, in fact it will be.  Now, after 2016 the debt will start rising at a ridiculous pace again, but we don't need to start slashing entire programs to fix that.  All we have to do is move things around to bring down below growth.

This is why it is not a myth but FACT that booms lower the debt.  The debt was shrinking by the early 90s, not just when the surpluses happened, and parts of the mid-1980s during the Reagan deficits because the Debt-GDP ratio was declining aka the REAL debt.  The surpluses just switched things into turbo drive.

And if we get some minor spending cuts done, such as to the military, it'll make the goal GDP even smaller.

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Torie
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« Reply #10 on: February 23, 2013, 04:27:10 PM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.

So, are you advocating a 70% tax rate for yourself?

I understand your preference opebo for an unbalanced approach, as opposed to a "balanced approach" (where have I heard that phrase before?), but that aside, it would be next to impossible to reach that figure actually. I can explain why if you are interested enough in the lacunaes of the tax code.
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DC Al Fine
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« Reply #11 on: February 23, 2013, 05:47:11 PM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.

So, are you advocating a 70% tax rate for yourself?

I understand your preference opebo for an unbalanced approach, as opposed to a "balanced approach" (where have I heard that phrase before?), but that aside, it would be next to impossible to reach that figure actually. I can explain why if you are interested enough in the lacunaes of the tax code.

Opebo lives in a magical world where the rich never hire accountants or lawyers.
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LastVoter
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« Reply #12 on: February 24, 2013, 03:57:55 AM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.

So, are you advocating a 70% tax rate for yourself?

I understand your preference opebo for an unbalanced approach, as opposed to a "balanced approach" (where have I heard that phrase before?), but that aside, it would be next to impossible to reach that figure actually. I can explain why if you are interested enough in the lacunaes of the tax code.
How about a wealth tax? No tax accountant is going to dodge this.
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Adam Griffin
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« Reply #13 on: February 24, 2013, 05:55:25 AM »

We need a real financial transaction tax, not the silly 0.003% that currently exists. Something like 0.25%/0.25%, forward/swap would bring in around $140 billion in revenue. Another raise in capital gains for those making over 400k/450k to 25% (actually, 28.8% when you factor in new Medicare surtax) and 20% for everyone else; another $110 billion in revenue.
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opebo
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« Reply #14 on: February 24, 2013, 06:20:13 AM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.

So, are you advocating a 70% tax rate for yourself?

I understand your preference opebo for an unbalanced approach, as opposed to a "balanced approach" (where have I heard that phrase before?), but that aside, it would be next to impossible to reach that figure actually. I can explain why if you are interested enough in the lacunaes of the tax code.

Obviously the IRS and tax law would need to be made reasonably effective rather than the joke your party has made them, in order to effectively implement a 70% rate.  The point is we need to get the money out of your class, one way or another.  I would prefer the guillotine, but failing that, no doubt, over time, there would be ways to increase the take.

Regarding 'balanced' - what utter rot!  Your class has benefited from stealing the labor of those beneath you.  If you are allowed anything it is imbalanced.
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« Reply #15 on: February 24, 2013, 09:37:03 AM »

2009 was an exceptionally high deficit, so it's an odd point of comparison.   5% of GDP is still higher than any pre-Obama deficit since the 1980s.
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DC Al Fine
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« Reply #16 on: February 24, 2013, 04:40:10 PM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.

So, are you advocating a 70% tax rate for yourself?

I understand your preference opebo for an unbalanced approach, as opposed to a "balanced approach" (where have I heard that phrase before?), but that aside, it would be next to impossible to reach that figure actually. I can explain why if you are interested enough in the lacunaes of the tax code.
How about a wealth tax? No tax accountant is going to dodge this.

Actually plenty will. I'm studying accounting, and there are many simple, legal ways to write down the values of assets. Investment choices would also change to make the values of investments more ambiguous.
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Snowstalker Mk. II
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« Reply #17 on: February 24, 2013, 07:21:10 PM »

Clearly his big-spending socialist policies are failing.
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Antonio the Sixth
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« Reply #18 on: February 24, 2013, 07:37:54 PM »

If the sequester triggers a new recession, all this data will be meaningless and deficit will go up again.
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Torie
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« Reply #19 on: February 24, 2013, 08:02:19 PM »

Yes, we are going down from catastrophic levels, to just chronically toxic levels.

So, are you advocating a 70% tax rate for yourself?

I understand your preference opebo for an unbalanced approach, as opposed to a "balanced approach" (where have I heard that phrase before?), but that aside, it would be next to impossible to reach that figure actually. I can explain why if you are interested enough in the lacunaes of the tax code.

Obviously the IRS and tax law would need to be made reasonably effective rather than the joke your party has made them, in order to effectively implement a 70% rate.  The point is we need to get the money out of your class, one way or another.  I would prefer the guillotine, but failing that, no doubt, over time, there would be ways to increase the take.

Regarding 'balanced' - what utter rot!  Your class has benefited from stealing the labor of those beneath you.  If you are allowed anything it is imbalanced.

Well one of the revisions will need to be to get rid of the tax free feature of Muni bonds. Good luck.

Regarding the wealth tax, putting aside the wisdom of it, how is it going to be enforced? What would happen, is that a lot of wealth would go into expensive jewelry and precious metals, that cannot be traced, and out of publically traded securities and real estate, that can. And for non publically traded assets, you have a valuation problem, and tons of litigation, with appraiser experts and all. It would be a nightmare. It would distort the economy, lead to huge enforcement costs, and massive untraceable tax evasion. It will never happen. It's tough enough to do it once in a lifetime with the estate tax, for those few who are subject to it.
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Franknburger
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« Reply #20 on: February 24, 2013, 08:51:15 PM »

We need a real financial transaction tax, not the silly 0.003% that currently exists. Something like 0.25%/0.25%, forward/swap would bring in around $140 billion in revenue. Another raise in capital gains for those making over 400k/450k to 25% (actually, 28.8% when you factor in new Medicare surtax) and 20% for everyone else; another $110 billion in revenue.

Ther are a few other, simple ways to raise revenue. Legalise marihuana, tax it like alcohol and tobacco. Annual revenue might increase by some 20 bn USD.

Fuel taxes: Current US fuel retail prices are somewhere around 1 USD / litre, while most European states  have prices above 1.50 € / litre, without facing poverty and starvation. Annual gas consumption in the US is around 140 bn gallons. Introduce a 50 ct/gallon fuel tax (of course, gradually, with pre-announcement, so motorists can in advance switch to low-consumption models). Fuel prices will still be far below European levels, but  there is some 50-70 bn. additional revenue (depending on the consumption reduction triggered by the tax). Positive side effects: CO² reduction, innovation pull and demand boost for the car industry,  increased competitiveness against imports (which become more costly to be transported), and possibly quite some re-location of manufacturing from China and Mexico back into the US.
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opebo
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« Reply #21 on: February 25, 2013, 04:51:40 PM »

Positive side effects: CO² reduction, innovation pull and demand boost for the car industry,  increased competitiveness against imports (which become more costly to be transported), and possibly quite some re-location of manufacturing from China and Mexico back into the US.

What now?  How would raising costs (fuel costs) increase competitiveness?
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Franknburger
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« Reply #22 on: February 25, 2013, 07:42:29 PM »

Positive side effects: CO² reduction, innovation pull and demand boost for the car industry,  increased competitiveness against imports (which become more costly to be transported), and possibly quite some re-location of manufacturing from China and Mexico back into the US.

What now?  How would raising costs (fuel costs) increase competitiveness?

Because it gets more expensive to transport imports to US consumers (especially in the case of Mexico, where transport to - say - New York or Chicago would typically go over land).
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jaichind
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« Reply #23 on: March 02, 2013, 07:29:11 PM »
« Edited: March 02, 2013, 08:11:38 PM by jaichind »

Well, under Obama the debt went up by $6 trillion already.  Under 8 years of Bush II the debt went up by $4.9 trillion.  Not that I endorse the Bush II record but Obama is way worse.
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Politico
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« Reply #24 on: March 02, 2013, 08:07:11 PM »

Well, under Obama the debt went up by $6 trillion already.  Under 6 years of Bush II the debt went up by $4.9 trillion in 8 years.  Not that I endorse the Bush II record but Obama is way worse.

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