Good lord... at 18% (the historical rate of income), for Revenues = Expenses, GDP would have had to have been $20 trillion last year. Good luck getting regulations to bring in an extra $5 trillion into the economy.
1. While there's a huge deficit problem, there's no need for the deficit to be $0. It just needs to be increasing the debt slower than the GDP is growing for the country. 2. Without a massive financial crash, not only are revenues higher but expenses are lower, so it addresses both sides of the equation to some extent. 3. You are correct that neither the Buffett rule or regulations don't solve the problem alone. Which is why the Obama admin has proposed lots of spending cuts too. The idea that we dismiss things because they don't fix the whole problem is silly - no single area is going to solve the whole problem by itself. By doing small changes in lots of areas, you help create a solution where the whole burden doesn't fall on one group.
BTW, 2007 GDP was $13.8 trillion. At 3% real growth and 2% inflation, the 2011 GDP would have been $16.7 trillion without a crash. If $20 trillion would be no deficit, then that would suggest a deficit of $594 billion. If you take out all the expenditures related to the crash (lower taxes, higher social services, new debt service, etc), you'd have a fairly reasonable and sustainable deficit level.
Don't flatter yourself, you know nothing about America, please tell us" wise one" what utopia you are currently reside in?
I'm an US citizen residing in the US, and frankly I agree a lot with what Northside and other Post-Keynesians have to say. I invite you, basso, or anyone else to provide evidence refuting these three operational facts: 1. Primary dealers (20 of the largest banks in the world) are required to bid on T-bills/bonds sold at Treasury auctions. This requirement ensures that auctions are always over-subscribed and every single bond is sold so that the government can "fund" its spending. In the extremely unlikely event the entire banking system doesn't have enough reserves to cover the auction, the Fed provides additional reserves to the primarily dealers with a keystroke. 2. Sectoral balances: Taxes by the public sector (government) drains assets from the private sector. Likewise, public sector spending credits the private sector with assets. If a government always runs surpluses, it's will continually reduce the amount of financial assets held by the private sector. 3. The private sector is currently deleveraging from large amounts of debt they shouldered during the housing boom. In light of these facts, how is reducing the deficit helpful? The government doesn't operationally need to collect taxes to fund its spending. Yet in the name of fiscal austerity, we want the government to run a surplus, effectively removing financial assets from the private sector just when we need those assets the most to deleverage. Maybe we should all go out and kick some puppies too? Buy hey...if you can show me evidence to the contrary, they'll I'll gladly admit that my economic worldview is wrong.
why do people who pretend or want to be rich fully support rich people not paying the same as the middle class?
I'm in the brave new world of 2540 AD London right now, but I might be looking to check in to Rapture, as soon as that Andrew Ryan guy leaves.
The CBO says the effective tax rates are as follows Lowest Quintile - 4.3% Second Quintile - 10.2% Middle Quintile - 14.2% Fourth Quintile - 17.6% Highest Quintile - 25.8% Average - 20.7% Top 10% - 27.5% Top 5% - 29% Top 1% 31.2% Oops, looks like rich pay more taxes than the poor. Do you still think they should pay the same rate? I'm sure the highest quintile would love to be lowered to to middle quintile rates.
Two problems here: 1. This is an average. Many middle class people pay more, and many rich people pay less. 2. This is an income tax rate, and only the portion that is credited to the person. When you add payroll taxes paid by both the employee and the employer - which, for all practical purposes, is a tax on an employee's income (and thus an income tax), the numbers change dramatically.
I'm still waiting for someone to explain to me why deficit reduction is on anyone's radar right now when: - The government isn't operationally bound by a need for taxes when the Treasury, Fed, and Primary Dealers have been doing the roundabout money creation dance since 1988. - A government surplus reduces the financial assets held by the private sector (which should be common sense but also happens to be mathematically illustrated by Wynne Godley's sectoral balances equation). - The private sector, but more specifically households (the main driver of the economy), are still deleveraging. No takers?
Just like to add to the above--- http://pragcap.com/debt-deleveraging-fisher-minsky-koo-approach “In this paper we have sought to formalize the notion of a deleveraging crisis, in which there is an abrupt downward revision of views about how much debt it is safe for individual agents to have, and in which this revision of views forces highly indebted agents to reduce their spending sharply. Such a sudden shift to deleveraging can, if it is large enough, create major problems of macroeconomic management. For if a slump is to be avoided, someone must spend more to compensate for the fact that debtors are spending less; yet even a zero nominal interest rate may not be low enough to induce the needed spending." as a personal lark of mine, the definitive post-Keynesian perspective on the topic. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=161024 The Financial Instability Hypothesis Hyman P. Minsky
