Krugman How 30 years of Anti-Government Ideology Have Ruined Us

isn't the salient question "why" is government revenue lower? the chart should also tell you it's not because taxes are too low. what happened in 2008 to cause a precipitous fall in revenues?

 

Just a minor correction: basso's not a conservative; he's a Republican.

 

i'm neither.

 

Read the actual text I quoted from the article which somehow linked the the lack of infrastructure spending to the reduction of taxes for the wealthy. I pointed out that even if all wealthy people were to be taxed at a very high percentage, it still wouldn't make up for the revenue shortage since income tax only accounts for 43% of government revenue. Thanks for repeating my own argument and trying to use it against me.

I never discussed about reducing the deficit in any detail. That was not my point. The $1.54 trillion figure is used to show that the government can and will spend beyond its revenue to pay for all the spending. Since Krugman makes the failed assumption that our infrastructure is crumbling because of not taxing enough of the wealthy. My argument is that if the government spent $1.54 trillion above its means and still can't pay for roads and highways then what does that say about our government overall competence?

Krugman continues to play the idea that the government can't build roads because the rich won't pay for it. I just pointed out his fallacy that our government can always pay for things without having the money or revenue through borrowing. So in that sense Krugman is misleading the reader into thinking the rich are the cause of the decline of America.

You're partially right, revenue is down from 10 years but spend has gone way up so the "balanced budgets" of the 90s were the result of finding a equilibrium between revenue and spending. In his article, Krugman continues to hammer only one side of the issue without ever shedding light on the fact that spending has outstripped revenue. Furthermore the revenue decline from 2007 to 2010 is the result of the recession. So that further proves Krugman is using false logic in trying to connect to the loss of revenue to lowered taxation of the wealthy.

My argument still remains up for discussion, please explain how a tax increase for the wealthy helps pay for the lack of infrastructure considering that if the government spent $1.54 trillion above its means and still can't pay for roads and highways then what does that say about our government's overall competence level?

 

Can you please explain if the government spends $3.69 Trillion in 2010 with a deficit of $1.54 Trillion and it still can't pay for teachers and paved streets then where did all the money go? Furthermore what does that tell you about the competence level or our government?

My argument still holds: it's not a revenue problem but a management problem.

 

Rent is a false analogy. Outside of government subsidized housing, rent is the same for everyone who wants to live in a given place. Landlords can't charge you rent based on your income, and certainly cannot charge a larger percentage of your income if you make more. All Americans get to use the same road system, same military, same fire department.

This much is true. We do in fact have a progressive tax system (despite the assertions of some).

No, you are not effectively "giving" me money. You would be lowering my rent. While I would certainly like that, it is a far cry from giving me money. Even if you handed me cash after I paid my rent, that would be returning money that I paid in rent, a rebate, and not a gift.

It is silly, it was meant to show the absurdity of believing that taking less = giving. I never said that taxation was stealing, so of course it was not meant to be perfectly analogous.

There are those to whom the government gives money. Every person that receives more value in services than they pay in taxes is being given money by the government. I assure you, the top earners are not in this category. The top earners are subsidizing the rest of us. The police and fire departments protect everyone, but they get more money from the rich than from the poor.

The chart also shows that spending is more than half again what it was ten years ago - the highest it has ever been. If spending was at 2000 levels, the current revenue stream would produce minor deficits. At 1997 levels (when Clinton started his second term, hardly a time when everyone was being squeezed by a spendthrift government) we would be running a small surplus with current revenue levels. Maybe the revenue stream is not the cause of lack of funds to maintain roads and light streetlamps.

 

The quote right before the part you quoted is relevant:


But Washington is providing only a trickle of help, and even that grudgingly. We must place priority on reducing the deficit, say Republicans and “centrist” Democrats. And then, virtually in the next breath, they declare that we must preserve tax cuts for the very affluent, at a budget cost of $700 billion over the next decade.


Congress is working under pay-go rules for all these smaller bills. He's saying that Congress is picking deficit control and tax cuts over infrastructure spending. And that the money from that tax increase could pay for all the infrastructure spending. But my original point in reference to this:

That, to me, suggested you were arguing that Krugman said the tax increase would fix the deficit.

It depends what is the cause of the $1.54T deficit. For example, if it's structural and comprised of out-of-control programs, then yes, that's incompetence. If it's temporary measures or a sudden drop in revenue, that's not really as much incompetence as temporary factors. I would argue that the current deficit is a mix of those two.

Actually, he's saying the current Congress won't build roads because they are putting deficit reduction and top 2% tax cuts as higher priorities. He also mentions that government can borrow a 1% net interest rates and he has no problem with that option as well. I don't think he at all believes that government can't do it - he's arguing that government is wrongly choosing not to do it.

That's true for the 2007-2010 decline. However, you also had a big decline from 2000-2004 that was in large part a result of the tax cut. If not for that - even if you just assume flat revenues - then the deficit is much smaller now, though that doesn't account for whatever growth may have occurred as a result of the tax cut.

 

Except spending can't realistically be at 2000 levels. Revenue and expenses are expected to grow - that's the nature of the country. Our economy grows, inflation occurs, population grows, etc - so the numbers increase. Spending can certainly grow more slowly as it did in the 1990s, but some of it is out of anyones control: debt spending, for example. You can say we need entitlement reform - I'd agree - but neither party has engaged in that. Actual discretionary spending - the part that Congress has easy control over - has actually not moved much over the last decade outside of the one-time stimulus effects.

I would ideally like Congress to tackle entitlement spending, or better yet, have done so years ago. But Krugman is arguing from the reality of where the country is today and what the choices are that Congress faces right now.

 

there is another option.

 

The population has increased about 10%. Inflation between 2000 and 2010 is about 25%. At most that would account for what, a 40% increase in spending? Just eyeballing the chart, there appears to be about a 70% increase in spending. That is a significant gap.

Just because neither party is willing to make the hard choices (entitlement reform) does not mean that it is not the foundation of the problem. Also, I disagree that debt spending is out of anyone's control. Run a surplus and debt spending should decrease as the debt is payed down. Run deficits and debt spending will increase. A certain amount will be due on a given date based on the debt at the time, but the debt at the time is not some divine proclamation.

Krugman is talking about following up the massive bailouts of various financial sectors with massive bailouts of state and local governments. Why not just have the state governments raise taxes to pay for their shortfalls in education and road maintenance? Surely not all of the states were as stupid as mine in locking in "low" tax levels ("low" because California actually has some of the highest state taxes in America) and high spending. Not to mention the further erosion of Federalism represented by national tax increases to fix state budget shortfalls.

Looking at discretionary spending is a distraction. It is what the politicians point out to try to sway voters. Trying to keep promises made in a different contextual environment (What percent of GDP was spent on healthcare at the foundation of Medicare and Medicade? How many years of retirement was Social Security paying for when it was established?) is the problem. The rest of it is an argument about what color to paint the bedroom while the house is on fire. A 2% increase on taxes on the wealthy is not a solution, and may or may not even help.

 

i dont think that is why ron paul is upset.

actually, in the interview i was referring to he specifically said that he would not want to cut such programs. his point is that if you want to cut spending you have to start w/ the military and our foreign interventions. if he was president that is where he would make cuts. not in social programs.

its pointless to talk about cutting 10% from a health care fund when you continue to ignore the elephant in the room, so to speak. i dont think paul is the extremist, hardline, no compromise libertarian that many make him out to be. ive also heard him say that he would not cut social security, as he thinks at this point it is too popular to take away. he has also spoken to the absurdity of tax cuts for the wealthy in a time of war.

lots of people talk about paul taking away welfare and aid to the poor - he talks much more about taking away welfare from corporations.

republicans really have no room to talk though - we had 8 years of out of control spending, waste and corruption. it was cheney who said "deficits dont matter". bush spent more than all presidents before him (in 3.5 years). but republicans/conservatives loved it at the time and attacked anyone who dared criticize.

 

thats not what libertarianism represents to me, but if this is the case i dont think you can call paul a true libertarian.

you seem to be describing the teabagger/neocon platform, which leads to the whole other issue of fox news/conservatives aligning themselves w/ libertarianism. glenn beck calls himself a libertarian, which is a joke. the republican party was so discredited by 8 years of bush that all these neo-cons just started calling themselves libertarians.

 

How much of that is a one time stimulus?

True - if you're talking about long-term planning of the country. If you're talking about what needs to be done in the short-term to fix a short-term problem, then things that can't be fixed in the short term are not really the focus.

Honestly, I am not exactly sure what you're suggesting here. To clarify, when I said "debt spending" there, I was referring to interest payments which are taking up more and more of the budget. That is not in the control of politicians - they can't just stop paying interest on outstanding debt.

First off, you'd have to get agreement of all the states. If only some states did it, it wouldn't really address the continue the problem of getting the country back on track. And politically, it would be far more difficult than managing it at the federal level - both in terms of revenues and then allocating those revenues in whatever way Krugman thinks is best.

Eh - we're long past the days of federal and state budgets being truly independent. With all the different federal monies that already go into state and local budgets, I don't think this would have any real effects in that area.

It's also what can be controlled in the here and the now. Entitlement and health spending is something where you can change the curves over time, but you can't just shut it off tomorrow in practice. You can cut discretionary spending, which is why it often is the focus.

Again - all definitely relevant and necessary for long-term planning for the country, but not really relevant to the immediate "how to fix a recession" issue that Krugman is addressing.

 

glynch-

You are so obviously wrong concerning Ron Paul's economic views and beliefs. I mean, you're straight talking out of your ass and the funny thing is people here probably believe you when you spew your ignorance. Before you make up any other mistruths, take 4 hours and read his book, End the Fed. You are horribly mistaken about what Ron Paul's economic stances are. Hell, I'll even send you my copy.

For someone so hell bent on economic equality and pointing out the missteps of our federal government ( which I am as well), I think you'd find it a great read.

 

When real life events threaten to destroy your credibility, you have to come out hard to try and explain it away.

If someone like Mitch Daniels were to come in and cut spending, lower taxes, balance the budget, and increase economic growth (all of which he did in Indiana), Krugman's entire life's work would be discredited. It's understandable that he's doubling down now.

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You're drawing circles on a damp glass table, glynch, looking for answers. The table was exposed to the sun, which darkened it, so the owners drug it into the house and closed the shutters, barred the door, leaving you with an opake view. So you are stuck with that view. A view that's left it difficult to see and to know what action to take. So you've decided to glom on to Ron Paul, regardless of his radical ideology that would destroy much I've seen you defend here. At the end of the day, are you left with believing nothing? Or is this just an off-season flirtation with a man who, when taking time off from saying odd things, has produced a son, an adult now, who's flying around flapping his lips incoherently.

I have to smile. Let us know when you've processed and filtered Paul and Paul, and have the entire PP Philosophy figured out, with a manifesto of PP Politics for our purusal. Thanks! PP Politics, PP Policy... will it be morphed into a Paul, Paul, and Palin Policy, Politics and philosophy? Will you still find much to like about those folks then? Let us know!

 

Let's assume for a second that the asinine assumption that state governors are able to exert massive influence on their local economy is true. Mitch Daniels took over Indiana's governorship in 2005.

Since then, Indiana's budget surplus of $300 million has morphed into a $1 billion deficit and its per capita and nominal GDP, which was already low to begin with, has continued it's historic lagging trend, ranking in the bottom 10 of states, shrinking faster and growing slower than its neighbors.

Are you deliberately lying or just uninformed?

Or was it a typo, when you said "all of which he did" but actually mean to say "all of which he did not come remotely close to accomplishing and instead did the exact opposite"

The courtesy of a reply is requested.

 

The GOP has really led us down a terrible path of massive budget deficits and crumbling foundation in order to give the wealthy a few more bucks.

The worst part is I think they are completely clueless to the train wreck they are creating and use blame everything on abortions, gays, terrorists, and illegal immigrants.

Then they attack others for a budget deficit and financial mess they created.

If it didn't hurt this nation so much, it would be comedy.