Fiscal Discipline for the American Dream

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4 responses to “Fiscal Discipline for the American Dream”

1. 

   Ronald D. Hunt

   2010-01-14

   “Support a balanced budget amendment.”

   Deficit spending is a legitimate risk management tool, we shouldn’t make it illegal but it definitely needs reform. Attaching debt directly to tax’s so that increases in debt increase tax’s to pay for said debt would be the best approach, This would eliminate Bush style debt and spend foolishness.

   “No longer can we run this government on a credit card.”

   As far as the numbers go we could run a $300 Billion dollar yearly deficit for the next 100 years and it would actually lower the percent of debt to GDP to 4%. Given I am not advocating that we do this, An understanding of the numbers is important.

   “# Require 2/3 majority vote for any tax increase.”

   Worked great for California, their insane tax passage rules are leading the state to a socialist revolution. Their’s a good chance that next year CA will have democrat super majority in both their houses which means the passage of single payer, and an end to the republican lead circus of government cuts no matter the cost.

   Nothing quiet like the tyranny of the minority to rial the people up. This rule will work no better then TABOR and other similar measures have. It ties the hands of the government and makes it hard for the government to change when it needs to.

   “Cut non-defense discretionary spending by inflation minus 3% across the board.”

   This is unnecessary if you implement the below, This issue is a symptom and attacking it will only hide the real problem.

   “Impose a moratorium on all appropriations earmarks until the process is reformed legislatively. Work to maximize openness and transparency with filters, to ensure only expenditures with a federal nexus, and prohibit allocations to for-profit companies.”

   I agree.

   “Reduce the capital gains rate to 10%. This will lead to increased receipts to the federal treasury and will also increase investment in the USA.”

   Capital gains tax was never a good idea in the first place, Its income and should be taxed as such. Right now money made this way is shielded from FICA(social security/medicare) tax’s. And this would not lead to more investment in the USA, it would only lead to increased trading volume on wall street and that only helps the bankers.

   Better approach would be to replace Corporate tax’s with a national sales tax. This would help to keep jobs in America as well create real investment in the states not just increase trade volumes.

   “Engage in entitlement reform.”

   The Corporation needs to be reformed out of the welfare state entirely. Big Business in health care, retirement, etc was is and continues to be a bad thing for the US economy as a whole.

   401K’s, Pension funds, Health insurance have all turned into a tool to steal from the Middle class and corrupt the government through massive amounts of money in Washington.

   I would add to the List Public Funding of campaigns, and the outright abolition of corporate money in the political process.

   Back to CA’s insane tax rules, this is actually an interesting thing to look at, in CA its illegal for property tax’s to increase greater then 2% per year(from what the tax was the previous year not from current property value), new tax’s can’t be passed without a 2/3 majority of both houses and (big one)state budgets can’t be passed without 2/3 majority of both houses. This is due to prop 13 that passed in the 1970’s.

   Now California’s annual budget in 2006 was around $120 Billion dollars, that may seem high but consider that the city’s don’t have large property tax revenues like in most states so the state has to distribute funds to districts in CA for the running of services that would normally be paid for by the city’s. When Arnold toke office their the republicans given their minority control of the budget/tax started cutting things out of the CA budget, in 2010 the CA budget has shrunk to around $86 Billion dollars. However in the process of the forced attrition the Districts and City’s have had their distributions from the state slashed pretty much alienating City and district governments from the State level government and they blame the Republican party for it.

   Their is a very very good chance the CA Democrats will have enough seats to over come the 2/3 majority requirement after 2010, This is going to be interesting to watch one way or the other.

   Reply
   1. 

      David

      2010-01-15

      Thanks for your thoughts Ron, especially related to the 2/3 majority for tax increases idea. I knew there was something about it that did not pass the smell test. I also like that you pointed out that reducing the capital gains tax was likely to increase trading more than really increasing investing. That might not be a bad thing (it might allow investors to more freely move their money from one place to another by lowering the threshold for when it becomes economically advantageous) but we should definitely approach the idea with open eyes.

      I do worry about your suggestion that the corporation should be reformed out of existence. It seems to me that there is a place for corporate entities even if their existence is currently being rampantly abused. So reform, yes; out of existence, not so much.

      Reply
2. 

   Ronald D. Hunt

   2010-01-15

   “I do worry about your suggestion that the corporation should be reformed out of existence.”

   No No that’s not what I meant. I only want them removed from the running of anything related to social welfare, health insurance, retirement, etc. When I use the term “Welfare State” I am merely referring to all types and source of welfare spending(health insurance, retirement, etc) without respect to funding source public or private.

   The health and financial industry, have done nothing but grossly and blatantly steal from the American people, while at the same time using OUR money to manipulate the Politics to further enable this theft. Our 401K’s, Pensions, savings, and Health insurance pools have become the personal piggy banks of the corrupt corporate elite.

   Reply
   1. 

      David

      2010-01-16

      Thanks for the clarification – that makes more sense to me.

      Reply