U.S. Budget & OBBB | OCT 1 - Gov’t Shutdown Begins

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finesse said:
Yes and directly or indirectly, as when Obama had to pay for the Shrub's military mistakes, the Republicans are responsible for the greatest part of it by far. Reagan almost tripled it and was the one to first really put us behind the eight ball. You're like the guy who killed his parents and asked the judge to have mercy on him because he's an orphan.
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The Republicans are responsible alone for a 56% increase in expenses 2019-2024?
 
HintonJamesHeel said:
The Republicans are responsible alone for a 56% increase in expenses 2019-2024?
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I didn't say that. I just said they set the table ,picked the menu and the cooks. Who's controlled the legislature and the courts through any means possible? Eat it and choke on it. There are all sorts of studies that show the economy has consistently done better until Democrats. Not that they haven't made mistakes but, frankly, plus is better than minus and not the first thing good has come out of the Republican Party for the nation as a whole since Eisenhower.
 
finesse said:
I didn't say that. I just said they set the table ,picked the menu and the cooks. Who's controlled the legislature and the courts through any means possible? Eat it and choke on it. There are all sorts of studies that show the economy has consistently done better until Democrats. Not that they haven't made mistakes but, frankly, plus is better than minus and not the first thing good has come out of the Republican Party for the nation as a whole since Eisenhower.
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Ok but none of that goes into why we have seen a 56% increase in the federal government expenses in 5 years.
 
HintonJamesHeel said:
Ok but none of that goes into why we have seen a 56% increase in the federal government expenses in 5 years.
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This is from a pretty conservative source but does a good job of showing why and how expeditures shot up in 2020. You are correct that they have stayed at those elevated levels, largely because of the multi-year impact of the Covid spending bills, but this at least answers a lot of the "why."

www.pgpf.org

13 Charts That Show the Stunning Impact of 2020 on Our Fiscal and Economic Outlook

Our fiscal situation was already unsustainable, but COVID-19 certainly did not help.
www.pgpf.org www.pgpf.org

Reasonable people could disagree as to whether we need to address spending or revenue or both, but I agree the current deficit and projections for where it will go from here is a problem that must be addressed.
 
lawtig02 said:
This is from a pretty conservative source but does a good job of showing why and how expeditures shot up in 2020. You are correct that they have stayed at those elevated levels, largely because of the multi-year impact of the Covid spending bills, but this at least answers a lot of the "why."

www.pgpf.org

13 Charts That Show the Stunning Impact of 2020 on Our Fiscal and Economic Outlook

Our fiscal situation was already unsustainable, but COVID-19 certainly did not help.
www.pgpf.org www.pgpf.org

Reasonable people could disagree as to whether we need to address spending or revenue or both, but I agree the current deficit and projections for where it will go from here is a problem that must be addressed.
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Revenue has stayed right at 17% of GDP, which has been the 50 year average. The issue has been expenses.
 
HintonJamesHeel said:
Revenue has stayed right at 17% of GDP, which has been the 50 year average. The issue has been expenses.
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Other than in 2020-22 (the main years for the Covid bills), expenses have been pretty consistent with the 50 year average as well.

fred.stlouisfed.org

Federal Net Outlays as Percent of Gross Domestic Product

Graph and download economic data for Federal Net Outlays as Percent of Gross Domestic Product (FYONGDA188S) from 1929 to 2024 about outlays, federal, Net, GDP, and USA.
fred.stlouisfed.org
 


Meanwhile, Thune has people trying to entice Fetterman to switch parties (and provide a vote for the BBB).
 
HintonJamesHeel said:
Revenue has stayed right at 17% of GDP, which has been the 50 year average. The issue has been expenses.
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Sigh. Here we go again. D = A-B, but somehow the value of A can't be touched because the problem is B.

1. real federal spending increased about 29% from 2019 to 2024. 56% or whatever number you quoted was nominal. So the increase of 2.4T in nominal spending was actually about 1.5T in real terms.

2. Mandatory expenses --i.e. SS, Medicare and to a lesser extent Medicaid -- rose by 1.4T.
3. Interest on the debt rose $550B.

So of the nominal spending about 2T of the 2.4T was mandatory expenses plus interest. Another $100B from veterans affairs, because medical care for wounded vets is also becoming more expensive. There was also an increase in defense department.

4. So that's pretty much all of the increase: interest, inflation, SS, Medicare, Medicaid and VA.

5. The idea that tax receipts aren't at issue is laughable. Maybe if we hadn't cut taxes in 2017, we'd have been working with a baseline deficit of $100B instead of $1T. Maybe if we hadn't cut taxes so many times, the total debt -- and thus the interest paid on it -- wouldn't be so large.

It's not as if the increases in SS and Medicare were unforeseen. Everyone knew it was coming. The GOP slashes taxes anyway.

6. I am always amused when the "gotta run government like a business" folks somehow fail to comprehend the revenue side of things. Like, if my company is losing money, the first thing to do is increase my revenues if I can. If I'm instead laying off employees while letting 15% of my receivables go uncollected, I'd say the employees should be pissed. What do you think?
 
superrific said:
Sigh. Here we go again. D = A-B, but somehow the value of A can't be touched because the problem is B.

1. real federal spending increased about 29% from 2019 to 2024. 56% or whatever number you quoted was nominal. So the increase of 2.4T in nominal spending was actually about 1.5T in real terms.

2. Mandatory expenses --i.e. SS, Medicare and to a lesser extent Medicaid -- rose by 1.4T.
3. Interest on the debt rose $550B.

So of the nominal spending about 2T of the 2.4T was mandatory expenses plus interest. Another $100B from veterans affairs, because medical care for wounded vets is also becoming more expensive. There was also an increase in defense department.

4. So that's pretty much all of the increase: interest, inflation, SS, Medicare, Medicaid and VA.

5. The idea that tax receipts aren't at issue is laughable. Maybe if we hadn't cut taxes in 2017, we'd have been working with a baseline deficit of $100B instead of $1T. Maybe if we hadn't cut taxes so many times, the total debt -- and thus the interest paid on it -- wouldn't be so large.

It's not as if the increases in SS and Medicare were unforeseen. Everyone knew it was coming. The GOP slashes taxes anyway.

6. I am always amused when the "gotta run government like a business" folks somehow fail to comprehend the revenue side of things. Like, if my company is losing money, the first thing to do is increase my revenues if I can. If I'm instead laying off employees while letting 15% of my receivables go uncollected, I'd say the employees should be pissed. What do you think?
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You do understand part of the deficit now in this bill is because the baseline assumed tax rates would expire? It’s a bit of fuzzy math. When the tax rates were implemented, expectation was the tax revenue would fall but they rose.
 
Looks like the CBO number is +$2.4T.

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www.cnn.com

I'm happy to use that number going forward rather than the $4T that has been bandied about.
 
HintonJamesHeel said:
You do understand part of the deficit now in this bill is because the baseline assumed tax rates would expire? It’s a bit of fuzzy math. When the tax rates were implemented, expectation was the tax revenue would fall but they rose.
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1. You are again mistaken. Nobody was expecting tax revenue to fall in absolute terms. People were expecting tax revenue to decrease as compared to what would have happened without the tax cuts. And actually the tax cuts proved even a little worse than projected based on this measure.

2. Tax revenues always go up, except in recessions. Economic growth and inflation are enough to cover even huge decreases in tax rates or tax collection %. Nobody predicts declining tax revenue; projections are almost always done in terms of % of GDP, etc.

3. The baseline has to assume tax rates will expire. That's because the tax cuts initially were premised on a 10 year sunset, which is what kept the total deficit impact within the bounds of the Byrd Rule. If, after expiration, you can ignore the sunset then you're just printing money at that point. Don't give me "fuzzy math" bullshit. The math is clear. The GOP is decadent and corrupt.

Imagine if you could run government this way:

2025: This bill will provide a one-time benefit to Americans in the amount of $100B in extra spending this calendar year.
[bill passes]
2026: We wouldn't want to take away that $100B, so we'll measure our deficits based on current baseline. Keep the $100B -- it's free!

You're the guy who is talking about reducing deficits. Surely you'd agree that is complete bullshit and is not a serious attempt at financial stewardship.
 
HintonJamesHeel said:
Federal income tax rate can absolutely be 0%. I guess it’s actually negative. As a lot get credits back after paying 0% income tax.
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That doesn't make the tax rates negative.

If the tax I owe is calculated as r*I -C, where r is my tax rate, I is my income, and C are credits that I'm due, then my tax could be negative. My tax rate, though, plainly is positive. All that has to be true is C > r*I.

You're getting confused by the idea of a tax expenditure. The types of tax credits you're talking about don't really have anything to do with taxes at all. The child "tax credit" is actually just a cash handout to people, given that it's refundable. It's styled as a tax credit to make the delivery easier. Rather than send out separate checks, the credits are paid through tax refund checks. That doesn't make it a tax cut. It's a tax expenditure.

The reason that the budget uses so many tax credits was chicanery from the GOP in the 1980s and 1990s. They were stymied by a) the political demands for social safety net expenditures and b) their own strident rhetoric about government spending. They papered over this contradiction by embedding the expenditures within the tax code, allowing them to claim, "we're not handing out money; we're just collecting less in taxes" which was true only in a formal sense. Economically speaking, it's just a handout in different form. Which isn't necessarily bad; I support many types of "handouts."

I'm not going to argue about this, because it's a fact. If you want to argue with arithmetic, be my guest but I'm not indulging you. The formula above, T = r*I - C is indisputable. It clearly demonstrates that people who get money back on their taxes are nonetheless paying a tax rate greater than 0%. End of story.
 
Referring to the comments that so many people don't pay taxes and tax expenditures that was referred to above.

This is the system we have, and it requires that the tax code do much more then it should which is why so many folks hate it. Therefore, to treat everyone fairly (and somewhat equally) there is one big problem that has to be reconciled. That's child dependents. To reconcile it, the tax system hands back a great deal of tax credits in the form of the child tax credits and the Earned Income Tax Credit. So yes, it looks like many people are not paying taxes, but its because of this reconcilement issue

Then you have the other problem of the standard deduction which is getting rather high. And I believe the Republicans under this bill are again increasing it.
 
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