The Democrats' Plan for Balancing the Budget

I am getting weary of talking about the national debt and deficit.  But until these issues are resolved we will have political, economical, and other issues affecting our everyday lives.

We already know that the democrats do not concern themselves with these problems.

They do, however, take the time to criticize any attempt made by republicans to fix these problems.  Anything you hear from the left about the budget will, almost invariably, be about how bad a particular republican budget balancing plan is.  This may be a good political strategy for them.  They can blame republicans for wanting to cut spending and they present nothing for the republicans to attack.

When I attempted to determine what the democrats' plan to balance the budget is, the only replies that approximated a response were:

• "I already answered that."
• "Tax the Rich of course!"

Despite the lack of helpfulness from those commenters, we know that whenever the democrats admit to what they want to do to balance the budget, they will point out that they want to tax the rich, and cut military spending.

Let's try their plan and see what those numbers look like.

The White House has a page to list the "Historical Tables" for the financial information of the United States. 

Once again I will be using 2011 numbers because that is the most recent year for which the numbers are not estimates.

Table 1.1 shows the total revenues and expenditures (rounded to the nearest billion):

2011 total receipts: $2,303 billion
2011 total outlays: $3,603 billion
2011 total deficit: $1,300 billion

Now I will subtract military spending from these numbers, and then divide the remainder of the deficit by the number of "the rich" to see how much they each need to pay as their "fair share."  Note that the amount "the rich"needs to pay will be in addition to what they already pay to the government (their current payments are already included in the "total receipts").

I have never heard how much the democrats would like to cut military spending. 
Let's see what the numbers look like if we cut 100% of military spending.

2011 spending on "National Defense" (table 3.1): $705 billion

I considered removing all "veteran's benefits" too, but I decided that while the democrats don't like the military, they do not oppose paying for their benefits. ($127 billion, incidentally)

Subtract all military spending from the total budget and we get the following numbers:

2011 total receipts: $2,303 billion
2011 total outlays (minus national defense): $2,898 billion
2011 total deficit (minus national defense): $595 billion

By ending military spending we have halved the deficit.  (A fine point to note next time you talk to a democrat who wants to cut military spending: By eliminating 100% of military spending the federal deficit would still be about $200 billion more than the largest deficit under President Bush, which included military spending. table 1.1)

Now let's divide the amount of the new deficit amongst "the rich" and see how big of an additional check they need to pay each year in order to balance the budget.

According to the U.S. Census Clock (at the time of this writing) the U.S. has a population of: 315,230,903

How many of us are "the rich"?

We heard from many last year that "the 1%" are the problem.  1% of the U.S. population is 3,152,309 individuals.

Let's divide our new deficit by the number of "the rich":

$595 billion/3,152,309 people = $188,750.53 per each "rich" person.

We can use the democrats' budget plan to balance the budget if we end all military spending and each "rich" person would need to pay $188,750.53 each year in addition to what they already pay in taxes.

(This is, admittedly, a lower number than I expected when I started this post.)

How much does someone in the 1% earn each year?

According to this liberal sounding website (I couldn't find the IRS data.), the annual income needed to hit the following top percent marks are (in 2010):

Top 1%: $380,354
Top 5%: $159,619
Top 10%: $113,799
Top 25%: $67,280
Top 50%: >$33,048

According to this Forbes article the average annual income of the top 1% is $717,000.

According to the Tax Foundation (table 8) the top 1% paid 24.01% for an their average tax rate in 2009 (the last year for which they have data).

If the top 1% are going to go along with the democrats' budget balancing plan, then the numbers will work like this.

Average income: $717,000
Less average tax rate @ 24.01%: $172,152
Net current income: $544,848
Less budget balancing number: $188,750
Net income: $356,098

If we eliminate 100% of military spending and charge the top 1% with balancing the budget, then we will be effectively taxing their income at 50%.

The income tax rate in America has been as high as 90% in the past.

It is mathematically possible to balance the budget using the democrats' plan.

Could such a plan work in practice?

Even I, who despises the government and is very open to the idea of anarcho-capitalism, can appreciate that the government [maybe, perhaps, if you insist...] could exist with some merit to do some things.  That list of things are (thanks to Ayn Rand):

1. Protect citizens from foreigners
2. Protect citizens from each other
3. Provide a means of deciding disputes (courts)

If we eliminate national defense, like it seems democrats want, then how would we achive government objective number 1?

I propose a two part national defense plan:

1. Require all adult men (and now women, it seems) to own a fully automatic rifle, in good condition, and with it be able to hit a specified target with it (Note that fully automatics have been illegal since 1934.)
2. Maintain approximately fifty nuclear ICBMs which shall be pointed at the cities in the countries for whom we conclude are the most threatening

We have heard that during WWII the Japanese considered invading America, but were dissuaded from that idea because many Americans were armed.

Switzerland has been neutral in many wars thanks to its mountainous terrain and the fact that all of its adult citizens own guns and practice with them regularly.

related:

Look at Switzerland, for example. Switzerland has a very relaxed concealed carry law. Half the cantons in the country, you don't need a license, you just carry it. The other half, very easy to get a license.
 

They've had three big multiple-victim public shootings in the last 12 years. All three of those are in the very few buildings where guns aren't allowed in Switzerland.

Not only would this satify government objective 1 (protect us from foreigners), it would also help with objective 2 (protect us from other citizens).

The citizens should, if this is the plan, should be required to own a fully automatic weapon, not a lesser weapon, because if we do not, then we would be at a considerable disadvantage if we were invaded by armies that are armed with fully automatics.

I propose that if we eliminate the military and arm all adults with fully automatic weapons we could successfully be protected from nearly all foreign threats.

Maintaining a few nuclear ICBMs should be enough deterrence to prevent another country from using a WMD against us.

The costs of making sure that everyone owns a fully automatic rifle in good order, and maintaining nuclear weapons would cost more than $0, so I would then propose cutting the equivalent of the cost of these two items from elsewhere in the budget.  This plan starts with doing everything that the democrats want, so them giving up on a bit of something elsewhere should be reasonable.

The democrats should also be agreeable to cutting in a few other places.  This plan so far only balances the budget.  So if we cut say $200 billion from elsewhere in the government, we could pay down our national debt.

We should also look into the fact that doubling the taxes paid by the rich would cause them to leave and pay less in  taxes then they do now.  Like is happening in California.  And in France.  Did I mention that people are leaving California?

My attempt to fully flesh out the democrats' budget plan has a good start, and I will leave it to actual democrats to explain how they plan to force "the rich" to pay an additional $188,000 each.

***

If that is what the democrats' plan to balance the budget, then they should be advocating it.

Why haven't they stated their goal more clearly and plainly?

If you are a democrat and want to balance the budget by eliminating defense spending and taxing the rich, then feel free to copy my start at fleshing out a plan.  I realize that none of you have attempted to do so elsewhere.

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What if by "cutting military spending" the democrats mean to only cut some defense spending?

How much would each member of the top 1% need to pay, on top of what they already do, to balance the budget if we cut only some, say 1/3, of current national defense spending?

Current numbers:

2011 total receipts: $2,303 billion
2011 total outlays: $3,603 billion
2011 total deficit: $1,300 billion

Numbers after cutting national defense spending by 1/3:

total receipts: $2,303 billion
total outlays: $3,368 billion
total deficits: $1,065 billion

Total deficit divided by 1% of the population:

$1,065 billion / 3,152,309 people = $337,847.59/ person of "the rich"

We could cut 1/3 of military spending and divide the deficit by the number of "the rich" and each of "the rich" would need to pay $337,847 each year in addition to their current taxes in order balance the budget.

Note that the liberal sounding website I linked to earlier says that someone in the top 1% earns at least $380,354 each year, and the new budget balancing payment is added to what they already pay to the government.  This means that the lower end of the top 1% would need to pay about 113% of their annual income to the government in order to balance the budget, if we apply the deficit amount evenly across "the rich".

The average member of the top 1%, earning $717,000 annually, would need to pay about 72% of their annual income to the government.

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If somebody who reads this is a democrat, would you mind pointing out which option you prefer?

1. Eliminate 100% of national defense spending, tax the 1% at 50%, and require all adults to own and know how to operate a fully automatic weapon. (And cut federal spending a bit elsewhere in order to pay off our debt.)
2. Eliminate 1/3 of national defense spending, and tax the 1% at 72%.  (And cut federal spending a bit elsewhere in order to pay off our debt.)

I notice that whenever we hear about a budget, or other bill, from democrats it includes more government spending.  If we take either budget balancing option above, then that is at current spending levels.  If we spend more, then the rate at which the rich must be taxes will need to go up with the increased spending.  And if we take either option some spending should be cut elsewhere so that we can pay of the national debt.

***

One last note:

I once favored building a big wall, or fence, across the U.S./ Mexican border to prevent illegal immigration.  But the places that have fences across their boarders are there to keep citizens in.  The Soviet Union had a fence to keep its citizens in.  North Korea has a fence to keep its citizens in.

I now oppose building a boarder fences, because if the top tax rate in America goes to 50% or 72%, then many people will want to get out.  (Me included, even if I'm not one of "the rich.)