2018 Government Shutdown Thread

Well, but I would question how much waste there is in some of those things. At any rate, if we could ditch the new tax cuts for the wealthy and ask each program to find 5-10% cost savings, we could start working to pay down the debt. That interest, at 11% of the total, is a massive amount of money being flushed down the toilet.

Note, I’m no economist. This is just trying to apply common sense, which may be completely unworkable for whatever reason.

Anecdotally, an enormous amount.

While I am sure in some programs there probably is enormous waste, the government is also behind the times in so many things. The government is badly in need of a technology upgrade in so many places.

I do think there are things the government just shouldn’t do. We have grown used to them doing things that maybe, given time and regulations, private industry could do better.

But in the whole I agree. But give a taxpayer a breakdown of items to cut and who those cuts would effect and then ask them what should be cut.

This is like my household budget! I gotta fix my driveway, that’s $6000 how can I pay for it? I’d love to cut my mortgage payment, or stop feeding my children, I’d save so much money! Can’t do it though.

That last 8%… let’s see. I cut Netflix that’s .1% of my monthly budget. No more Xbox Live, I save $5/mo… what else…

On the waste issue, it all depends on what you mean. First off, is there waste due to outdated technology and bureaucratic inefficiency? Almost certainly, but what fraction of the budget goes to tech and bureaucracy, and out of that fraction, how much is inefficient? For example, out of the 28% of the budget paid out in Social Security only a relative 1% to 2% of that goes to admin, which is less than 1% of the total budget. Probably if you look at the whole budget, admin/tech/bureaucracy is probably in the ball park of 5%, maybe 10% of the budget. So the total savings for efficiency are limited.

Second, how does the level of “waste” compare to most human enterprises? I am fairly sure that many of us can tell some pretty crazy anecdotes about dumb-ass wastage in the private sector. If the federal waste level is no higher than private, then, eh.

Third, are you defining “waste” as stuff you don’t like? B/C to many on this board, our massive defense budget is mostly waste by that measure.

When people talk about waste, I think what is really meant is “money we can cut without suffering negatives consequences”. So for example, inefficiency.

I’m all for cutting that sort of thing, but if you look at it honestly, that’s at most a couple of percent of budget, and if you compare federal waste to private waste, there probably is some difference but I’m not sure how big it is.

The reality simply is, due to our desire to take care of the old and the sick, we have a large federal budget, requiring us to tax and spend roughly 33% to 34% of our economy. However, we just refuse to tax at the level required so we just keep piling on the deficit, which in turn increases the debt which in terms jacks up the interest on the debt, and so on.

Realistically, we could cut a few point off of defense spending and still have a mighty military and with a laser focus on efficiency, we could maybe shave a couple of points off of bureaucratic spending. That would still leave us about 20% short of making up the 25% deficit that Trump’s tax cuts are bringing us this year.

Now, there IS one big thing we could do to bring the budget into line down the road which is control the rate of increase of medical prices. One of the big future costs we are facing is the fact that medical prices keep going up much faster than the rate of inflation and we are already spending a quarter of our federal budget on health care including Medicare Medicaid and ACA combined. If we were to bring those prices surges down to the level of inflation, it would not that difficulty to bring the budget into line in a few years.

However, until we are willing to grasp the nettle of medical price reform, and until we are willing to grasp the nettle of increasing taxes, we are going to eat debt. DEBT!! It’s what’s for dinner!

What kind of whine do you serve with debt?

“white” whine of course.

very good :)

What I was getting at was that we could look at existing funding, have everyone do a little more with a little less (asking them to trim budgets by a percentage across the board instead of slashing major programs we would like to keep).do I think that will ever happen? Hell no. That would take actual work on the part of people and raising spending limits is so much easier. I certainly don’t want to define waste as “things I don’t like”.

Given the numbers we have to work with, which “everyone” is going to do a little more with a little less? Senior citizens? Veterans? The military? People too poor to buy their health insurance who also don’t get insurance through their employer? The part of the budget that does not fall into the above list is around 12%. So even if you slash that by a tenth, you are saving 1.2% of the budget.

The math is just not there. I mean sure I am in favor of reducing waste and increasing efficiency but the numbers just won’t support a huge savings via cuts. The numbers just aren’t there.

No, I meant the 88% included.

Well misguided, you are a person of much greater ethics than any major political figure in the US for decades. Sadly your position would render you un-electable in the US. If a candidate in the US proposed to cut Social Security, Medicare, defense spending and veterans benefits as part of an “across the board” cut, you would be able to hear the screams out on little sad not-planet Pluto. And that’s after the screams crossed 4 billion miles of vacuum; that’s how loud those screams would be.

Oh, I get that. Like I said above, I knew it would never happen. The thing is, if we COULD manage to tighten the belt for a little while and start paying that principal down, the interest would be like “found money”.

My dad once told me that the principal only spends once. The interest of course, you can spend year after year if you manage to save up enough. But in this case it’s the reverse of that. You pay the interest over and over and over again.

As an example that I like to use that maybe people can relate to a bit better, consider a 30-year fixed mortgage. In the first seven years of making payments on that mortgage, only about one month’s worth of money has actually gone toward paying down your debt. The other 83 payments are all interest (it isn’t actually divided that way…a tiny bit of each payment goes toward the principal each time). If you have a mortgage, making a single extra payment at the start can save a massive amount over the long term…of course the bank doesn’t want to tell you that… (I don’t remember the exact figures…this might be off a month or two)

That 11% could pay for almost half of medicare according to the numbers given above. That’s a staggering amount of money we are throwing away year after year that we could be investing into infrastructure and modernization.

What’s sad is that Obama proposed a debt reduction plan a few years back and the GOP pooped on it from a great height.

Obama’s initial position was 1 for 1 spending cuts and tax increases. My recollection is that after the GOP said “talk to the hand” Obama then made some more proposals. At one point, IIRC, he was offering 7 dollars of spending cuts for every $1 of tax increase. The GOP said “what part of TALK TO THE HAND do you not understand?”

I do take issue to people who talk about tackling the deficit only via spending cuts. I understand that is b/c people like to analogize to their personal finances but that’s a bad analogy. In the US, most families don’t have easy options to raise revenue: salaries have been relatively flat, etc. Due to unequal bargaining power, most Americans have gotten jack and squat in terms of household revenue even as the economy has grown. In that circumstance, all a family can do is cut.

But I have two big issues with that. First off, revenue (income) increases for most Americans need to be on the table. That means higher wages, and grasping the nettle of our inflation phobia.

Second, the federal government budget is NOT like a household budget. A national economy of 320 million people with a total GDP of over $20 trillion is not just quantitatively different than a household but also qualitatively different. The federal government can do many things a household cannot: change monetary policy, change trade policy, “quantitative easing”, old fashioned printing money, and of course multiple levels of borrowing at interest rates no family would ever get.

Bottom line is: we need to dispense with the notion that we can only balance the budget via cuts. I am willing to negotiate some cuts as long as there is reasonable balance with some revenue increases. Of course, that kind of plan is dead as the dodo in the US at the moment.

Well, yeah. What I originally said a few posts back was to tighten the spending budget a little and have a little bit of a tax increase. But that would go over even more like a lead balloon. Ideally, you could plan it so you increased taxes for a fixed period, say 10 years, while knocking down the deficit, then give that money back from the “found money” of less interest over the following ten. But even if you could pass something like that, which we both know we couldn’t, someone would come along and screw it up part way through.

I mean, yeah, Bush inherited the Clinton surplus, after years of the hard work of balancing the budget, and he immediately gives it away. Fiscal (ir)responsibility at its finest.

Someone in the media gets it anyway:

The first year of Bush presidency started with the continuation of the dot com meltdown in which the Nasdaq dropped 60% before hitting a low in early 2002, that resulted in a dramatic decrease in capital gains revenue as well as triggering a recession. There was also an event you may remember which happened on Sept 11, 2001 that had a rather significant impact on the economy. These arguably started under Clinton.

Bush did have his own budget busting policy, Medicare part D, no child left behind, and the Iraq War.

The Bush tax cuts and Medicare part D started under Clinton?

#newstome

Ah no this is what I wrote.
“Bush did have his own budget busting policy, Medicare part D, no child left behind, and the Iraq War.”

Bush deserves plenty of blame for turning the surplus into a deficit, just not all of it.