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Tag Archives: Deficit

In 2010, Republicans took control of both the North Carolina Senate and the North Carolina House for the first time since 1898.  That’s more than 100 years.

And guess what happens when taxes are reigned in while spending is cut:

Raleigh, N.C. — North Carolina’s revenue collections are still ahead of projections set when legislators drew up the state government budget this year.

The General Assembly’s top economist told lawmakers Tuesday the state’s coffers have taken in $115 million above the roughly $6 billion expected through Oct. 31, the first four months of the fiscal year.

The presentation by Barry Boardman to a legislative oversight committee said the amount of taxes withheld from worker paychecks is improving and corporate income tax collections are above targeted levels.

The revenue surplus was about $150 million through September.

The fact that we have a spending problem can only be denied if you are a die hard Statist or a liar.

You can pick any significant number of consecutive years you want.  Any, say 10-15 years.  And compare the receipts from one year to the prior year.  See what ya get.  For example, I’ll pick the most recent set of years; 2000 through the estimates for 2016.  Look:

There are 16 possible opportunities for receipts to go up or down.  Of those 16, they go up for 12 of ’em.  The time frames when they are going down is after the recession of 2000 and the shock of the 9/11 attacks.  The second time frame is during the most recent recession.  Other than that, the tax receipts increase.  In fact, if you go back further than 2000, the next most recent decrease in revenues comes in the 1982-1983 year.  That’s 17 consecutive years of tax growth.

So, what does this tell us?

It tells us that those who are calling for tax increases in order to satisfy the “increase revenue” meme aren’t looking at the full picture.  Left alone, taxes will deliver year over year growth.

In fact, if you take the historic annual tax receipt increase since after the war and assume that going forward, you can easily balance the budget.  For example, if we allow the budget to GROW, that is no cuts, but only grow by 2%, we have a balanced budget in 2023:

Easy.

Limit spending.  Don’t raise taxes.  Balance the budget in 12 years.

It’s spending people, spending.  W do NOT have a taxing problem.

So, the bi-partisian debt committee Has admitted to failure; they are unable to reach an agreement on the gap they were to address. A couple of things:

1. There is no one that seriously thinks we have a revenue problem. If they say that they are died in the wool Statists or they are lying.

2. The committee was never really considering realm cuts to spending. They were talking about cutting the amount they were gonna increase spending. Never, ever, was the idea to spend less next year than this year.

3. Failure to reach an agreement isn’t the end of the world; we still get 1 trillion in cuts.

4. Republicans running around claiming they can’t cut the Pentagon’s budget are acting like Democrats.

5. With that said, defense spending IS called for in the constitution. Food stamps and section 8 are not.

All the talk has been about how we are going to reduce our debt and cut into our deficit.  Indeed, much debate has occurred over the proper way to accomplish this.  Those on the right are more willing to see a solution that attacks this problem only through reduction in spending.  More centrist folks want a raise in the tax revenues to be part of that solution.

I happen to fall in the middle.  While I really want spending to be the only method we use, I’m willing to compromise and agree to small tax increases.  But only because I don’t think the taxes being proposed are meaningful and amount to a political win only for the Democrats.

In other words, give ’em there trophy so that we can get to the business of fixing this mess.

But then I saw this:

Democratic leaders in the Senate are scrambling to avoid defections on President Obama’s jobs package, which appears headed for defeat on Tuesday.

Lieberman opposes the bill because the 5.6 percent surtax on millionaires is being used for new spending instead of reducing the deficit

This is why you can’t negotiate with these people.  And this is why this problem may never get fixed.

Some time ago I stumbled on the CATO Institute’s Dan Mitchell.  He has an awesome video on how to balance the budget; a concept I’ve taken a liking to:

He also has his own blog that he regularly contributes to.  The other day he referenced a great post of his where he links economic freedom to prosperity:

What’s responsible for the turn-around in each of these nation’s welfare?

As Mr. Mitchell says:

— Chile’s score jumped from 5.6 in 1980 to 8.0 in 2008, and the country now ranks as the world’s 4th-freest economy (ahead of the United States!).

— Argentina’s ranking has improved a bit, rising from 4.4 to 6.0 between 1980 and 2008, but that still only puts them in 94th-place in the world rankings.

— Venezuela, by contrast, is embarrassingly bad. The nation’s score has dropped from 6.3 to 4.4, and its ranking has plunged from 22nd-place in 1980 to 121st-place in 2006.

Chile was the poorest and is now the most wealthy of the three.  Venezuela has seen just the reverse.

Fascinating.

The government’s credit rating was cut today.  For the first time in the history of the planet the United States of America is no longer a sure bet on it’s credit.  To be sure, AA+ isn’t nothin to sneeze at, but it’s not, ahem, Money.

The impact:

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government’s budget deficits and rising debt burden. The move is likely to raise borrowing costs eventually for the American government, companies and consumers.

And the why:

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement.

The deal reached by Congress and signed by the President doesn’t do anything about our fiscal woes.  Cries from the Left that we aren’t raising revenue ring hollow as the United States regularly see year over year revenue gains of over 7%; revenue is NOT the trouble.

Spending is the problem.

And the liberal Left will not listen and take action.  They continue down the path that somehow someone isn’t paying their fair share yet irresponsibly care to put pen to paper and define what that fair share really is.

What we are seeing now is the natural result of the kind of quasi socialism that exists in the world today.

The Tea Party is right.

The talk of the town is the debt limit.  Raise it or not raise it; and what it would take TO raise it.

Reasonable people can agree on a couple of things:

  1. We are in debt and it’s getting worse.
  2. To balance the budget, there needs to be a combination of an increase in revenue and a decrease in spending.

I honestly feel that if you were to ask this question, hidden in such a way as to bypass the normal political partisanship, every single American would agree.  If the checking account is overdrawn, a second job becomes something to consider and a review of the household spending becomes a priority.

But, how do we agree on such a combination when the discussion changes from the household budget to the federal budget?  How can we get folks who demand that we raises taxes together with folks who demand we don’t?  How do we get people who refuse to cut spending to shake hands with those who feel we HAVE to cut spending?

I propose that we do it by doing neither.

Watch:

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The debt ceiling rhetoric is really building steam.

As we get closer and closer to the date when the debt rises above the debt ceiling, the guys on each side continue to ratchet the discourse.

Of course I don’t think that we’ll not raise the limit.  And, even if we don’t, there is no way that we don’t pay our debt servicing.  So this whole thing is a little silly.

But I like the debate and I like the discussion being had in the offices and the coffee houses and the dance studios.

When we have Obama claiming that he can’t guarantee that old people will get their Social Security check.

“I cannot guarantee that those checks go out on August third if we haven’t resolved this issue,” says Obama.

“There may simply not be the money in the coffers to do it,” said the President.

Interesting thins are gonna be said by the everyday people.

But, back to the discussion.  I still don’t get the Left’s rallying cry that the rich “have to pay their fair share!”

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There is a gap.

The United States brings in some amount of money.  And the united States spends some other amount of money.

There is a difference between those two amounts of money; and right now, the bigger amount is the amount we spend.

We’re in debt and getting debt’ier.

All the talk ’round town is that we have to fix this problem pretty soon and the deadline that’s looming is the debt ceiling.  Everyone is looking at August 2nd and working to build a plan by then.

In it’s simplest form, the debate is about narrowing the gap of the spending and the revenue.

How are we gonna do that?

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