dagblog - Comments for "No Deficit of Ideas for Lowering the Deficit."

True and well said. And I

AmericanDreamer — Mon, 15 Nov 2010 19:52:54 +0000

True and well said. And I doubt anyone here underestimates what a long-term proposition that would be if there were political will even to start down that road on display. Which there is not.

the ones who can only see

artappraiser — Mon, 15 Nov 2010 18:30:19 +0000

In reply to Okay, just throwing this out

the ones who can only see dollar signs and never get beyond that.

Isn't that the case with any government contractors? I doubt most people who bid for any type of government contracts are doing it because of patriotism or to "serve" the country--they're looking for jobs and money. If they weren't, they'd be applying for a government job rather than bidding for a contract.

Chalmers Johnson's argument is about empire wherein one of the down sides if you are into pumping the U.S. economy is that the foreign country gets some of the benefit of the economic stimulatiion of our military projects there.

I recall that Rumsfeld wanted to close bases in Germany and bring them to the U.S., and kept pushing to do it, but after he resigned, the generals convinced Bush to put it off until 2012-2013. I remember reading about how local Germans were reacting--despite the regular protests by some against our presence there, most locals were freaking out about losing the "business," and were lobbying to keep us there I haven't kept up with what the Obama administration has done with that.

But simply cutting defense because one is against our warmongering ways, without having a plan in place to immediately replace all the related civilian jobs means people losing work, no two ways about it.. Cmaukonen is correct to point this out. Closing a military base can kill an entire town as surely as closing an auto plant can, whether it's in Germany or Colorado. The "miliitary industrial complex," as people like to call it, provides lots of civilian work.

This is actually why libertarian types who don't like Federal government spending of any kind can find some agreement with liberals who are anti-defense. But those types are not going to go along with replacing the Dept. of Defense with a CCC or a WPA or Federally-run health insurance or Feds building train systems or whatever.

Are ye for big government or aren't ye? That's the question the deficit cutting of any kind gets you into. Not liking certain types of spending is a different matter.

It's not who you have to talk

stillidealistic — Mon, 15 Nov 2010 17:30:51 +0000

In reply to Those numbers are pretty

It's not who you have to talk to, Ramona, it's who you have to (Orlando's favorite word.) They don't listen to talking, and you don't have enough money.

Well... I guess interest

Michael Maiello — Mon, 15 Nov 2010 17:19:48 +0000

In reply to Agreed that situations such

Well... I guess interest payments on existing debt are a drag, right? So cutting those expenditures would at least free up money for more productive purposes.

ooh the deficit game!Here's

Obey — Mon, 15 Nov 2010 17:05:39 +0000

In reply to No Deficit of Ideas for Lowering the Deficit.

ooh the deficit game!

Here's my centrist proposal

I don't think the goal should be closing the current deficit, it should be closing the long-run structural deficit - i.e. the deficit that there'd be when the economy is running at full capacity. which is probably something like

800 billion

And the goal shouldn't be closing it completely. As long as the debt grows at equal to, or less than, the sustainable growth rate of the economy, the debt/gdp ratio won't go up. So conservatively the sustainable growth rate is 2%, which is about 300 billion dollars a year. So the gap that ACTAULLY needs to be closed ismore like

500 billion.

That looks much easier. So hiking marginal rates on the rich at a rate - say 10% - that doesn't hamper growth can give around

- 150 billion

Then there is the low hanging fruit of tax evasion. The IRS estimates a sum equal to 30% of what the federal government actually collects in taxes, i.e. about 350 billion dollars in uncollected taxes. If you dedicate more resources to enforce tax law better, you should be able to recoup, say, a bit more than half of what is missing, i.e.

- 200 billion dollars

Then reinstate the old financial transactions tax of 0.25% that got repealed in the seventies

- 100 billion dollars

Then a Federal Bank solvency guarantee fee on the TBTF banks of 0.5% of assets

- 50 billion dollars.

And then...

oh, I'm done.

It just seems too easy, right? It's almost as if this whole idea of a deficit commission is an elaborate sham. Or a not so elaborate sham.

Agreed that situations such

AmericanDreamer — Mon, 15 Nov 2010 16:49:25 +0000

In reply to No Deficit of Ideas for Lowering the Deficit.

Agreed that situations such as this provide rare opportunities (in theory, if we weren't dealing with a GOP House that has the priorities it does) to look at things that should be cut because they are not good expeditures, but which are normally off the table. I can also enjoy your post as mainly meant TIC to make a point, if that is your intent.

Is the goal to reduce the deficit if that means reducing aggregate demand (consumption plus investment)? Does reducing the deficit necessarily entail reducing aggregate demand (it is the latter, as I understand it, that the economists who make sense to me say is counterproductive in getting the economy moving again)? Obviously some reductions of the deficit will have less contractionary effect than others. Are there some that might actually have a stimulative effect?

What's great is that you

Michael Maiello — Mon, 15 Nov 2010 16:39:35 +0000

In reply to No Deficit of Ideas for Lowering the Deficit.

What's great is that you don't actually have to do anything beyond the military part. Why? Because the $1.2 trillion deficit is a function of the recession. High unemployment has killed the tax base. We can't grow fast enough to take out $1.2 trillion in deficits but if we can grow fast enough to close half that gap. Big defense cuts get us halfway there, growth gets us the rest of the way and you can keep or even increase Social Security benefits.

Might work. But what we

cmaukonen — Mon, 15 Nov 2010 16:12:30 +0000

In reply to Okay, just throwing this out

Might work. But what we actually need to do is to get back to actually making things which will require subsidies. What our biggest global competitors have been doing for years.

Okay, just throwing this out

Ramona — Mon, 15 Nov 2010 16:04:13 +0000

In reply to Well there is a bit of a snag

Okay, just throwing this out there, but how about firing the private contractors and putting those newly unemployed soldiers back to work as civilian government workers? They could fan out all over the world and actually represent us for a change. We already have their loyalty--something seriously lacking in those other guys, the ones who can only see dollar signs and never get beyond that.

Well there is a bit of a snag

cmaukonen — Mon, 15 Nov 2010 15:25:49 +0000

In reply to Those numbers are pretty

Well there is a bit of a snag with the closing the bases and bringing the troops home. All these ex-soldiers become newly un-employed the minute they are mustered out.

Bit of a sticky wicket there, what.