Reality-Based Deficit Numbers

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People: please stop believing we "need" tax increases. At best, they won't even make a serious dent in the budget deficit. While they could help in a small way (let's assume they won't harm the economy, or slow further recovery), they won't really do anything significant. At best it would be less than 10% of the annual deficit. It would likely be significantly less, but at that very optimistic assumption, it would still take more than ten years just to pay off one year of deficit. We need massive spending cuts, much more than we "need" tax increases.

Also recall that the last deficit before the recession, before the Democrats took control of the budget, was a mere $160 billion, and that was with the same tax rates and essentially the same deductions we have now. But then the recession knocked revenues way down, and the Democrats had the two biggest single-year spending increases since WWII (in FY2008 and FY2009).

The deficit problem is caused almost entirely by those two things: spending, and a still-weak economy. Unless you take on those two things, tax increases -- at best -- are meaningless, except as symbolism to an increasingly reality-denying left that believes you can have high spending and a balanced budget if only everyone paid their "fair share," and that paying an increasingly greater share of all tax revenues and a higher effective rate than everyone else means that somehow you're not paying your "fair share."

Math, people. Math. It's your friend. Don't be afraid of it.

Here's the bottom line: we would actually "need" ten dollars of spending cuts to every one dollar of tax increases (at best). And I would actually be willing to raise taxes, if the spending cuts were that serious, to close the gap, if we had triggers or other guarantees that spending would not increase. But I have absolutely no reason to think the Democrats -- nor the Republicans, for that matter -- would be willing to actually cut spending, let alone by that amount, let alone with guarantees. So there is, therefore, no reason to think we "need" tax increases, not until we are able to close the deficit gap with those increases.

Also, please stop believing the lie that Social Security doesn't add to the deficit. Senator Durbin said this on a Sunday show recently, as other Democrats have, and they are asbolutely wrong. We are currently taking in less money in Social Security taxes than we are paying out in benefits. The difference is paid out of the Trust Fund, which sounds like a fund of money set aside, but it's not: it comes straight out of the general fund, which -- whatever number-shuffling you use to account for it -- adds to the deficit. Medicare is the same deal. In 2011, over $100 billion -- which is more than the amount of revenue expected from the proposed tax increases -- came from the General Fund into Social Security trust funds. For Medicare, it was almost $225 billion.

It's a spending problem. It always has been, except now, as the spending problem has become more pronounced than ever before, the Democrats are -- more loudly than ever before -- denying it. When the deficit was a mere $400 billion under Bush, the Democrats agreed spending was the problem, and few talked about tax increases, and even when they did, they recognized it was much more about spending than revenues. But now with the deficit at nearly three times that, suddenly tax increases are the one thing they want to talk about, even though it is a much smaller part of the solution than it has ever been.

I note with some irony that the Democrats told us, whenever we explained how voter integrity measures would not actually hurt anyone, that they were still bad because stopping voter fraud doesn't really fix anything, because the problem is small and the difference made would be small, and we should spend time on bigger problems. While they had a point about it being pretty small (though it is bigger than most of them would admit), it is still important, because every incidence of voter fraud robs someone else of their right to vote. But I just wish they would apply the same logic here and not hyperfocus on tax increases, which literally won't solve anything, and help the rest of us find ways to cut spending and improve the economy.

And no, spending government money in general, and especially on "picking winners and losers" with subsidies, doesn't help the economy: allowing the market to work, while protecting the actual rights of the people, is what helps the economy.

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<pudge/*> (pronounced "PudgeGlob") is thousands of posts over many years by Pudge.

"It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt."

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This page contains a single entry by pudge published on November 28, 2012 9:10 AM.

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