Community | February 13, 2010 | 54 comments

The Myth of Fiscal Conservatism and Realistic Responses to the Deficit

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peterzylstramoore
Given that since the Carter Administration government spending has increased by 12% per Republican term compared to 9.9% during Democratic Administrations it is a wonder that the term fiscal conservatism carries any weight. This is further established by the fact that the debt has increased 36.4% in relation to GDP under Conservatives, and only 4.20% percent under Democrats.

It is clear that Obama did increase the defecit during the current recession, and I do fault him for merely throwing money at the banks rather than buying into them (like the auto industry) where once the recessions over we will get our money back (It is important they aren't allowed to collapse as they did during the Great Depression and yes we would have had a similar one).

We can get our money back by taxing the banks through Robin Hood Taxes or Financial Speculation Taxes and by increasing the top bracket back to where it was even under Regan when it was 50% (at the very least).

Applicable Year Top bracket
1971-1981- 70.00%
1982-1986- 50.00%
1987--------- 38.50%
1988-1990- 28.00%
1991-1992- 31.00%
1993-2000- 39.60%
2001--------- 39.10%
2002--------- 38.60%
2003-2009- 35.00%

Rich also make most of their incomes of capital gains, which is only taxed at a rate of 15%. This is another reason that Financial Speculation Taxes can be an effective tax.

Finally the US spends double the developed country average on health care for terrible results. The reason neither party is serious about the defecit is that they are not talking about the far more competitive single payer options for healthcare (at the very least they have given up on the public option) and neither party is really serious about cutting military spending which has increased again under Obama. This is where we need to start if the deficit matters.

Lastly, it is the bank bailout that is the other cause of the deficit. The period of regulated banking had almost no expensive bank bailouts and faster economic growth. It hurts to have to bail out the banks this once, but we will have deficit problems if we have to continue to bail them out.

Finally the deficit must be weighed against other concerns. The deficit was at 110% of GDP coming out of the Second World War and what followed was the fastest period of economic growth in US history. Stupid debt is a waste but smart investment in for instance infrastructure or green technology, can leave US industry ahead of the curve, and our children comparably better off.

Again Summarily, the Republicans have no track record about caring about debt taking on debt much faster (36.4% compared to 4.2%) and increasing public spending (12% compared to 10%) much quicker then under Democrats. It is inefficient Healthcare, military spending, falling tax rates for the wealthy, and unregulated banking sectors that lead to deficits. If anyone is talking about deficits while ignoring this, they really don't know what they are talking about.
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    Deficit,  US Federal Deficit
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54 comments // The Myth of Fiscal Conservatism and Realistic Responses to the Deficit

  • tommic
    • +1
      tommic  

    • For people who think they are providing statisics they claim are from the IRS
      news for you the heratige foundation is not the IRS they are a conservative think tank.
      When the top earners in the US pay most of the taxes its because they are making most of the money.

      Warren Buffet one of America's richest men paid less in federal taxes in 2008 than did his secretary did
      Warren Buffet isn't a bad man quite the contrary he is a very good man but tax laws favor the rich and even he said so.
      So if you think that the laws are just you are not a compassionate individual on the other hand Warren Buffet is very compassionate, that why most of his fortune is now part of the bill and melinda gates foudation. to do good.
      Its a matter of differing opinions when some people who earn a lot say their own taxes should be higher when others feel it necessary to avoid taxes at any price.
      ie capital gains taxed at 15 % income tax 35% a 20 point spread & NO FICA
      if you own a company and you wish you can take very small salary then pay yourself in company stock bonuses that are only taxed at 15% hence you are legally beating the system it does not make it honorable

    • 2 years ago
  • peterzylstramoore
  • peterzylstramoore
  • thedirtman
    • +3
      thedirtman  

    • Research and technology is by far the best investment a country can make toward improving its economy because they lead to jobs, industry, and a tax base. America is losing its tax base because people have service industry jobs that pay too little, and end up needing help when the job runs out.

    • 2 years ago
  • treewolf39
  • kennymotown
    • +2
      kennymotown  
    • thedirtman:

      We need manufacturing jobs and the manufacturing jobs have been shipped over seas. It's time to bring tariffs back and bring em back hard. for 150 years we as a nation did not need a income tax and the country operated fine on tariffs.

    • 2 years ago
  • treewolf39
  • kennymotown
  • bking74
  • bking74
  • tommic
    • +1
      tommic  

    • The anti information, anti liberlal bias is astounding even when backed up with facts nd figures people still deny the fact thet a very small percentage of people control the vast majority of weath. 2helland wait, even if its not 1 percent, maybe its 2 or 3, but they still do control the vast majority of the wealth say 95 percent,
      under your claim that they pay 40 percent of the taxes. well if they own 95 percent of the wealth maybe they should pay 95 percent of the taxes.
      After all they wouldn't be where they are if the poor consumer of services and goods didn't buy them. If they are in financial services we should definitly take 95 percent after all they are the one who brought down the house.

      Now with that said, even I don't agree with what I just wrote just making a point to you.
      If your not in that income bracket, whats your beef?
      If you are, your selfish, just say so you'll have more respect from everyone

    • 2 years ago
  • 2hellnwait
    • 0
      2hellnwait  
    • tommic:

      1.) How is it assumed that the top 1% own own 95% of all the wealth when in actuality it is the total of the top 50% that PAY 97% of the taxes?
      2.) The percentages are not my 'claim' but fact as established by the IRS and the Tax Foundation and other credible entities as well.
      3.) Although at a point in my life I was in the top 50%, that has not been the case for quite some time and I am now retired.
      4.) . . . and finally, no matter what my or your income bracket may be, what we earn beyond our proportionate share of taxes is ours, and how is it selfish to retain as much as we choose?

    • 2 years ago
  • tommic
    • 0
      tommic  
    • 2hellnwait:

      You must be illiterate I said in my post that I did not even agree with what I wrote.

      2nd If you think the United States has been acting like a civilized society for the last decade you must not know that people die without medical care, children go without three good meals a day and preventive medical care, Mental illness is treated as a crime and those with it, when they break the law are sentenced to prison instead of mental health insitutions. Taxes are the price one pays for civilized society--- Supreme Court Justice Oliver Wendell Holmes one of our countries most respected former justices. Statisics can lie when liars pervert them for their own interests.

    • 2 years ago
  • kennymotown
  • 2hellnwait
    • 0
      2hellnwait  
    • tommic:

      Clearly it is your intent to defer with facts, though they are what they are. . . and I fail to see what your point was in refuting your own monologue.

      Then you go off on a tangent about health care and mental illness, leaving me to wonder if possibly you're suffering? I also don't recall saying - or implying that taxes didn't have purpose (certainly if they didn't, why pay 'em).

      Then you and a few other go off about the sources. . . crimminy mate, do yourselves a favor and do a bit of unbiased research, will ya? The stats that I've posted are as reported by the IRS, so you suppose they must have a reason to lie? . . yeah I know, it's all a government conspiracy, eh?

    • 2 years ago
  • occhipij
  • ahiguy
    • 0
      ahiguy  
    • occhipij:

      Our government has been robbing Peter to pay Paul, and using ever other "creative"(i.e.-crooked) measures to float the books of their reckless fiscal economic budgeting... ke-rhist, were you or I to try to manipulate our budgets and finances in the same fashion, they'd jam us in the slammer and throw away the key!

    • 3 months ago
  • peterzylstramoore
    • 0
      peterzylstramoore  
    • Image
    • occhipij:

      IOUSA is one of the most misleading films around. Again CBO has recognized that the shortfall in social security is almost entirely due to rising healthcare costs and if we had healthcare costs comparable to other countries their would be no problem at all. Yes their will be more retired people as our population stabilizes, but economies also grow, and so their will be more money to draw from in looking after our retired persons. Again the directors of IOUSA are using it to push a conservative agenda and are highlighting the debt while not highlighting bailouts that result from unregulated markets, the most expensive healthcare system in the world, irrational military spending, tax cuts to the rich, and the fact that we pay in less to social security as our income comes up. The solutions are simple but are not being presented because behind it is a conservative agenda to lower taxes which simply makes the deficit worse.

      This chart refers to the size of the deficit if healthcare rises as it is projected. The lower graphs refer to the surpluses if our healthcare costs were the same as other developed countries with better outcomes.

      http://www.cepr.net/documents/publications/IOUSA_2008_10.pdf

      See also Dean Baker, Taming the Deficit:
      http://www.cepr.net/documents/publications/taming-the-deficit-2009-12.pdf

    • 2 years ago
  • jubal
  • SleepDirt
    • +3
      SleepDirt  

    • The right-wing fairy tale of 'fiscal conservatism' is as credible as that of 'liberal media'. Neither have *ever* been even close to the truth.

    • 2 years ago
  • bking74
  • peterzylstramoore
    • +4
      peterzylstramoore  
    • Image

    • Again the US government spends as much per person as most other nations but b/c it goes through an inefficient system you end up with no coverage.
      http://assets.opencrs.com/rpts/RL34175_20070917.pdf (the chart)

      It now over 7200 dollars (6 years later).

      The cost and inadequate care is not accidental: On Feb. 18, 1971 President Nixon announced, "I am proposing today a new national health strategy. The purpose of this program is simply this. I want every American to have the finest health care in the world and I want every American to be able to have that care when he needs it."

      However, Nixon, only one day prior, in discussions with his chief domestic advisor, Jon Ehrlichman, was caught stating that he was “not too keen on any of these damn medical programs,” and agreeing with his advisor on how health care is “a private enterprise [ . . . ]; the less care they give them, the more money they make.”
      See http://www.themanitoban.com/articles/22472 and

    • 2 years ago
  • bking74
    • 0
      bking74  
    • peterzylstramoore:

      Just another example of peter not shooting off at the mouth with fire and brimstone but using cold hard facts to back up his opinions, and while I don't always agree with him I respect his intelligence and integrity.

    • 2 years ago
  • Eddie_Miller
  • peterzylstramoore
  • bking74
  • artemis6
  • tommic
    • +4
      tommic  

    • IPeter one thing you faied to mention regarding the Reagan era tax cuts. The Reagan administration used funny numbers to show their incredible high deficits, that is they counted revenue from social security/medicare into the general revenue to close what was to be the greatest deficits of all time.
      My brother who is one of the foremost tax professors in the country was called on by Donald Regan to institute the tax changes at the Internal Revenue Service.
      In a meeting with then President Reagan and Donald Regan (sec of tres) my brother advised them of the deficits to come and their response was " you don't understand supply side economics. Well not only was my brother right, masters in economics and law graduate degree in taxes, those deficits rose and would have been much higher without the funny number counting.
      My brother did this work even though he knew what would happen as if he didn't do it they would have had someone else do it. Back in 1982 500 bucks an hour was pretty good. Sad but true.

    • 2 years ago
  • treewolf39
  • peterzylstramoore
    • +3
      peterzylstramoore  
    • treewolf39:

      the problem is it's being picked up by many of the other major newspapers and telivion stations. We need to confront this myth and confront it head on so the result is a decrease in military spending, the reregulating of banks, etc rather than cuts to education, healthcare, or industrial policy towards green technology. Fox news is the problem but it's not just Fox news.

    • 2 years ago
  • bking74
  • treewolf39
    • 0
      treewolf39  
    • bking74:

      I have trouble with left and right as well. If we are talking about government ( Congress ) republicans have been repeating all out lies about policies they were for before Obama took office.
      In the media, I think the daily show pointed out the problem with fox news making their own brand of news through out the day.(Fox news promotes or cites Fox news opinion) Countdown seems to be less fact and more opinion. I would point out that liberal media has not given democrats a pass. MSNBC talks smack about Obama and other representatives when they're being hypocritical.
      My favorite lie "Death Panels" . Isn't that what we already have with the insurance companies denying expensive treatments?
      Taxes oh ya. I am not sure how to even measure all taxes paid.

           Accounts Receivable Tax
                   Building Permit Tax
                   CDL license Tax
                   Cigarette Tax
                   Corporate Income Tax
                   Dog License Tax
                   Excise Taxes
                   Federal Income Tax
                   Federal Unemployment Tax (FUTA)
                   Fishing License Tax
                   Food License Tax
                   Fuel Permit Tax
                   Gasoline Tax (currently 44.75 cents per gallon)
                   Gross Receipts Tax
                   Hunting License Tax
                   Inheritance Tax
                   Inventory Tax
                   IRS Interest Charges IRS Penalties (tax on top of tax)
                   Liquor Tax
                   Luxury Taxes
                   Marriage License Tax
                   Medicare Tax
                   Personal Property Tax
                   Property Tax
                   Real Estate Tax
                   Service Charge T ax
                   Social Security Tax
                   Road Usage Tax
                   Sales Tax
                   Recreational Vehicle Tax
                   School Tax
                   State Income Tax
                   State Unemployment Tax (SUTA)
                   Telephone Federal Excise Tax
                   Telephone Federal Universal Service FeeTax
                   Telephone Federal, State and Local Surcharge Taxes
                   Telephone Minimum Usage Surcharge=2.0% Tax
                   Telephone Recurring and Non-recurring Charges Tax
                   Telephone State and Local Tax
                   Telephone Usage Charge Tax
                   Utility Taxes
                   Vehicle License Registration Tax
                   Vehicle Sales Tax
                   Watercraft Registration Tax
                   Well Permit Tax
                   Workers Compensation Tax

    • 2 years ago
  • peterzylstramoore
  • kennymotown
  • fun_size
    • +3
      fun_size  

    • What? These facts and figures must be skewed. I mean cmon everybody knows that Democrats love to waste money feeding the hungry and sheltering the poor. We need more tax cuts for the uber rich! That always solves our economic troubles! /sarcasm

    • 2 years ago
  • SleepDirt
    • +2
      SleepDirt  
    • fun_size:

      Yes, republicans keep repeating their schoolboy slander like 'tax and spend democrats' till their sheep base start repeating the mantra. It's always worked and it still works.

    • 2 years ago
  • kennymotown
    • +4
      kennymotown  
    • SleepDirt:

      The dumbest people in the voting public, those that actually work for a living and vote for repugs. Please tell me one bill the repugs have ever passed for the benefit of the workers. I'm waiting........

    • 2 years ago
  • kennymotown
    • +2
      kennymotown  

    • Tax cuts for the wealthy have destroyed the American dream and the lying Republican party have conned millions of hard working people into believing that tax cuts for the wealthy creates jobs. This just in........it's a lie and it costs jobs with the debt rising every day. Get rid of the Bush and Reagan tax cuts for the rich and raise the ceiling on the social security tax.

    • 2 years ago
  • 2hellnwait
    • 0
      2hellnwait  
    • kennymotown:

      George Orwell once said, “During times of universal deceit, telling the truth becomes a revolutionary act.”

      Percentiles Ranked by AGI > 2007; Percentage of Federal Personal Income Tax Paid: (Source: IRS)

      The top 1% - paid 40.42 % of all taxes, up to the to the top 25 % which paid the other 46.17 % of taxes, equaling 86.59 % of all tax revenues paid.
      The remaining 25 % (from top 25 to 50 %) paid an additional 10.42 % totaling 97.11 %. . . those below the top 50 % only paid 2.89 %

      Stop with the class warfare shit, okay?

    • 2 years ago
  • kennymotown
    • +2
      kennymotown  
    • 2hellnwait:

      Class war, is alive and well and a smarter person than you has admitted it. His name is Warren Buffet, now you can quit with the fake stats and go back too your mind numbing existence.

    • 2 years ago
  • jubal
  • 2hellnwait
  • treewolf39
  • jubal
    • +2
      jubal  
    • 2hellnwait:

      Well honey child, if the top 1% who owns 99% of the wealth only paid 40.42% of the all the taxes than they have been fucking raping us all. They need to pay their fair share based on their wealth.

      The next 25% should also be fucking pissed because the top 1% is fucking them too.

      So much for your statistics and your point that the rich are paying the lions share of taxes. That is just not so.

    • 2 years ago
  • kennymotown
  • Lurkistan
    • 0
      Lurkistan  
    • 2hellnwait:

      2hell, you've got your numbers mixed up, the chart is saying the amount of taxes each group pays as a percentage of THEIR income, not as a whole of all taxes paid. Plus most of the tops earnings are capital gains not income, which is only 15%, so on average the guy that makes billions is taxed less, as a percentage, than the guy that makes 50Gs a year. So unless your a billionaire you're fighting against yourself bucko.

    • 2 years ago
  • 2hellnwait
    • 0
      2hellnwait  
    • treewolf39:

      For crying out loud, do your own research, there is a ton of information out there, dig around, do your own thinking instead of being led around by liberal judas goats. . . baa-baa-baa

    • 2 years ago
  • 2hellnwait
    • 0
      2hellnwait  
    • jubal:

      My gawd you liberals are slow, if the top 1% were to actually own 99% of all the wealth, then by your logic, 99% of the US populace would be living on the remaining 1%. . . prove that it does and I'll concede your point.

    • 2 years ago
  • 2hellnwait
    • 0
      2hellnwait  
    • Lurkistan:

      Dude, the percentiles are Adjusted Gross Income, and no matter how you attempt to slice it, the percentage of federal personal income tax 'PAID' by the top 1% still was 40.42% of tax revenue received by the government, where-as only 2.89% of tax revenue received by the government was paid by the bottom 50%

      Under the US income tax system, most of the taxes collected are supposed to be paid by the people who make the most money. . . and they are.

      To put this in perspective, the top 1 percent is comprised of just 1.4 million taxpayers and they pay a larger share of the income tax burden now than the bottom 134 million taxpayers combined.

      P.S. . . Some in Washington say the tax system is still not progressive enough. However, the recent IRS data bolsters the findings of an OECD study released last year showing that the U.S.—not France or Sweden—has the most progressive income tax system among OECD nations. We rely more heavily on the top 10 percent of taxpayers than does any nation and our poor people have the lowest tax burden of those in any nation.

    • 2 years ago
  • bking74
  • jubal
    • +1
      jubal  
    • Image
    • 2hellnwait:

      2hellnwait, here is a good source of information because it links to many different charts and graphs that will illustrate my point.

      I will concede that it appears I did exaggerate a little but not by much. The more accurate figure seems to be the top 3% owns 80% of the wealth, but those figures are more like from the 90's, it hasn't been adjusted for Bush Jr's impact.

      There was a huge increase at the beginning of the last decade in the income of the top 3% earners due to the huge Bush Jr tax cuts that had a "trickle up" effect. Money moved dramatically from the middle class to the upper class. Unfortunately, when the economy is doing really well is when the job market is more heavily invested in Small Business, but so many small businesses are floundering because of the tanked economy.

      American today are twice as productive as American in the 70's and they actually earn less money when adjusted for inflation.

      Can I ask you a question? Did you ever take a sociology class in college? Ever heard of stratification? You should look into it.

      http://www.inplainsight.info/Topics/Tax%20Reform/wealth.htm

      http://www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/stratification/inc...&wealth.htm

      http://www.northwestern.edu/ipr/jcpr/workingpapers/wpfiles/hao_immigrants_wealth...

      This last link is interesting because it discusses wealth stratification by ethnicity, which I think is fascinating.

    • 2 years ago
  • peterzylstramoore
  • peterzylstramoore
  • peterzylstramoore
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