Not necessarily. The more we deregulate, the more tax revenues the government will gain. Eliminating a few small agencies and freeing up a few markets (health care being one) would basically act as a HUGE tax cut on individuals and businesses, thereby speeding up capital accumulation, economic growth, and increasing tax revenues.
The thing about health care is that health care waste is estimated to be between $500bn and $800bn. Imagine that for a second: if the government deregulated the health care industry, it would be equivalent of cutting income or payroll taxes by half, and it would be better than completely eliminating corporate taxes, estate taxes, excise taxes, AND capital gains taxes. If the $800bn number were true, then real health care reform would be basically as large a tax cut as completely eliminating payroll taxes.
Now think what would happen if we deregulated in other industries: the effects probably wouldn’t be as large, but the boost to the economy would be huge. Think, for example, what would happen if we eliminated the Department of Energy, allowed nuke power plants to use/reuse more of their fuel, allowed more energy extraction in the US, etc. Energy prices would fall almost immediately, while energy profits would rise, creating a huge boost for the US economy.
So if the government really wanted to balance the budget, it would have to cut spending, but not by as much as some would expect. If it simply cut the most harmful (in terms of regulation) areas of government, it would provide a huge boost to the economy, which would in turn benefit the government with higher tax revenues.
The Democrats’ approach to addressing the annual budget deficit is to raise taxes, not reduce spending. They’ve already chosen the path to greater short term and long term Government spending, and they want to double-up on that. There’s a built-in tax increase by simply not renewing the existing tax reductions from the Bush administration. They’ll use existing regulations to squeeze as much out of the populace - this CO2 ruling and threat by the EPA is just one such example. They will avoid direct tax increases in legislation, unless they can pair it up with some obvious benefit (obvious to their targeted electorate) - for example, massive taxation embedded in the Health Care Bill. They will raise taxes on the “rich” in a variety of ways, and may even pass legislation on the most rich - whatever they can get away with without impacting their chances for re-election both in 2010 and 2012. They think they have their bases covered, but there are other factors and unintended consequences that make the math extremely fuzzy if not absolutely wrong.
As for long term debt, they are playing a Keynesian gambit. Just as this play didn’t work in the 70s stagflation period, it won’t work for the upcoming storm of what I’ll just call hyper-stagflation (you could even call it economic collapse or the Bust, but there is a remote chance we come out of the current crisis and delay the bust to a later date). Some predict this storm to hit as early as the 2nd Quarter of 2010. We may see it earlier if other countries or one or more of the States has a default. I can see this thing snowballing very rapidly.
The Democrats are doing exactly the opposite of what they should be doing to get out of the mess they created (with help from Republicans). Some conspiracy theorists might say this was their plan all along - cripple the economy to present the opportunity to seize power, and then save the economy while creating a nearly invicible political structure (immune from democratic elections since the majority is dependent upon the state, and therefore dependent on Democratic control over the Government). Big problem there is that they’ve used Keynes as the model for saving the economy, and thus are doomed.
Kaju, I’m not disagreeing with you. Deregulation would be a good way to go about fixing the fiscal situation. But we’re seeing the Dems move in the opposite direction. More regulation. Lots more regulation. Increases in entitlement spending. New entitlement programs.
I just don’t see a new wave of deregulation coming any time soon. I actually think they’re going to give more power to the Fed too.
If they haven’t sort of intended this all along, it certainly looks like they have. But I tend to think it’s not one man or group that planned this but in fact all the variables working together based on the rules of the game. The rules of the game have determined the way the players have played this game. But the game may be over soon.
The United States is coming to a significant turning point, the interest payments on the debt are going to go up and up, the dollar is tanking, the baby boomers are retiring, healthcare is going to be taken over, the entire market is being absolutly stifled and filled up with toxic assets and investments, companies aren’t responding to the ressession in actually helpful ways which is going to doom the markets structure of production, taxes are going to have to be increased further hampering the market, the afghan war is being escalated and isn’t going anywhere, and the will to cut spending doesn’t seem to exist.
The mere existance of social security and medicare/medicade NOW is going to doom us, and that’s not considering what the state is going to do in future.
And Bloomj, you do know that there’s a way to edit your posts so you don’t have to post 4 messages at once right?
“As a head of state sworn to protect and defend my nation, I cannot be guided by their examples alone. I face the world as it is and cannot stand idle in the face of threats to the American people. For make no mistake: Evil does exist in the world. A nonviolent movement could not have halted Hitler’s armies. Negotiations cannot convince al Qaeda’s leaders to lay down their arms. To say that force is sometimes necessary is not a call to cynicism — it is a recognition of history; the imperfections of man and the limits of reason. So let us reach for the world that OUGHT to be — that spark of the divine that still stirs within each of our souls. [APPLAUSE] … We can acknowledge that oppression will always be with us, and still strive for justice. We can admit the intractability of depravation, and still strive for dignity. We can understand that there will be war, and still strive for peace. We can do that — for that is the story of human progress; that is the hope of all the world; and at this moment of challenge, that must be our work here on Earth.”
"Hamid Karzai told reporters yesterday that Afghanistan won’t be able to pay for its own security until 2024! That’s 15 years, for the mathematically challenged. Gen. Petraeus says the U.S. could get stuck with $10 billion in security costs annually. So, timetable or not, the U.S. could be on the hook for a $150 billion security force, 7,000 miles away. "
Such pretty language, but they know they’re gonna be there for a while. And even if the troops aren’t over there en force, we’ll have to back then financially. You think security is all they’ll need help with? I doubt it.
Actually I’m pretty sure that if they hadn’t messed up the versailles treaty it wouldn’t have been necessary. It is also arguable that you shouldn’t have fought hitler because too many people die that way. Just let him do his thing and even if he kills all the jews and gypsies, you still come out about 20 million people ahead of WWII. Not counting all the factories and capital destroyed…
Anyway ^ debatable. The point is that when you have a hammer, everything’s a nail. When you have the world’s largest military, everyone’s a dictator and a tarrist.
I mean is this war really worth it? 3000 of our folks die so we get to kill ~100,000 of their dudes, 75% of them who are civilians, and then half a million more die because of the deteriorated health care in Iraq. Is it worth it? For what? How do you see Iraq coming out of this.
It is one thing to accept just war. It is another thing to be a hawk.
Actually I’m pretty sure if we didn’t support isreal and overthrow their governments all the time they’d hate us a lot less. If Osama really hated materialism, he would bomb the rich royal families. If Osama really hated christians he would kill the plethora of christians in the middle east. The philosophy of terrorists presented in the news is completely wrong. Personally I’m inclined to support anyone who is innocent and defends themselves against US imperialism.
Isreal has no right to exist. Period. How do people support isreal? Because it gets good press?
No, it is a recognition of a Statist’s version of history. You never hear about all the conflicts that have been averted peacefully. We should be ashamed of the times we opted for violence, and instead highlight when countries have successfully avoided conflict with one another. Don’t buy their rhetoric.
By the way, I don’t agree with you on the letting the Jews die in death camps. I also think we should support Israel. But this is a convo for another time. The point is that we’re not going to see movement out of the Middle East for some time.
Well, with Iraq the explicit time table given to us is that combat troops will be out by the end of next year and that 50,000 marines would remain in Iraq until the end of 2011. All of this is before the end of Obama’s first term in 2013. Considering the Iraq War to date has cost over $100 billion per year, that alone would make for a significant deficit reduction.
With Afganistan it is less certain, but the President has said that we would begin transferring troops out of Afghanistan in July of 2011. It is unclear now how quickly the draw down will move after that. But I don’t think it would be impossible for the vast majority of troops to be out of Afghanistan in January 2013.
Will the number of troops remaining be 0? Maybe not. But considering the War in Afghanistan currently costs us $3.6 billion per month now, even modest reductions from current levels would likely result in significant deficit reduction.
Of course, none of us can see the future. So there may be some unforeseen reason that would keep us there longer. But I think the Obama administration has given pretty clear signs that they don’t want to be involved any longer than they have to be. And I think that is good news for people concerned about the deficit.
No need for a crystal ball to observe that history is repeating itself.
What makes you think the “recession” (depression?) is over or will be over so soon? Taking the massive amount of money the Fed has “loaned” out to banks (yet to be loaned out, I believe), the absurd amount of “stimulus” spending, medicare expansion and “health care reform”, coupled with the fact that many New Deal programs are still here (and will be self-destructing soon-- Social Security etc) along with much, much more regulation than we had during the 15 year (into WWII) depression…
And all that is assuming some real economic disruption doesn’t occur like a Chinese revolution or a staggering oil production problem, etc.
Is there any reason to be so optimistic? The recent reports coming out to claim “the recession is ending” seem to be riddled with lies and fabrications.
Didn’t the Bush admin tell us similar fairy tales? They didn’t want to be in there “any longer than they have to be” either. (I’m sure you recall what it did to their approval ratings…) There’s no change in policy at all. Possibly some changes in strategy but for all we know it could be worse than the previous strategy.
Afghanistan has some significant issues. First, it’s not really even a nation. It’s a collection of tribes living on a moon-like environment where the best thing they have going is the opium trade (guess that won’t help the War on Drugs, another miserable failure). The U.S. under Bush went in to destroy Al-Queda’s operations and overthrow the Taliban. Given that most of these guys fled to Pakistan, one of the nations the U.S. used to launch it’s attack, I’d say the operation was pretty ineffective. The next step was an attempt to democratize the country, in the belief that this would either earn us sympathy or better the lives of the people who live there. In some respects this was successful, but it’s also unsustainable. You can declare that women have rights, you can build schools, you can modernize the infrastructure, but if the people do not choose to do this themselves, then it will never last. The most recent elections have demonstrated a high level of corruption. Which is better, a corrupt state led by Democracy or a corrupt state led by religious fanatics. I don’t really see that much of a difference.
Now Obama comes along, who has said that the real war is in Afghanistan. He’s taken over 10 months to make up his mind on what to do, and has finally decided to sent in tens of thousands of troops without a mission or achievable goals, and promises that they’ll come home when the job is done. It appears to me that they’ve gone from a misguided policy under Bush to no real policy at all under Obama. Perhaps as the casualties mount Obama will explain why he sent people to die and/or kill for no reason.
Both sides say we must win in Afghanistan, but no one has really defined what that means. If you go by Obama’s Nobel Peace Prize speech, then the U.S. won’t win in Afghanistan until everyone there has achieved equality of results (which to me suggests that everyone is either a slave or dead; the only human conditions where equality of results are guaranteed).