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.

***

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.

***

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.)

Spring Break 2013 Meetup

I expect to be there, how about you?

Why not an Across the Board Spending Cut?

If there was a budget proposed that would cut spending by, say, 10% from everywhere that the government spends, would that get passed?

I doubt it.

It wouldn't end the deficit.  We'd need to cut all spending bu around 33% to balance the budget, but 10% would be a good start.

What would the arguments against it be?

Its not cutting waste, but punishing "good spending".   This may be true but the democrats and republicans will never agree on which places should be eliminated so an across the board cut would be as fair as it gets.

Right?

This idea would reduce Social Security payments.  Also true.  Very unpopular.  And certainly the reason why cutting everything would never be acceptable.

Any way that I look at it, Social Security, Medicare, Medicaid, and Obamacare need to spend a whole lot less.  Stories about spending, debt, or taxes that do not mention changing radically entitlements are missing the point.

Extremist Politics

Lots of people say that the problem with politics is because there is too much extremism.  Notice that usually when the subject of extremism comes up it is invariably to claim that republicans are extreme.

I disagree.

Partisanship wouldn't be as much of a problem if only both parties were each responsible.  We haven't had any budget in the last 3 years.  And the federal government has had more income than spending in only 8 years since 1950. (table 1)

If we had a balanced budget every year, and we ended all programs that don't work, then I think that many of our political problems would be solved.  Even if we don't like it when the other party gets what they want.

Bobby Jindal 2016

His Thursday speech transcript can be found here.

excerpt:

We as Republicans have to accept that government number crunching – even conservative number crunching – is not the answer to our nation’s problems.

We also must face one more cold hard fact – Washington is so dysfunctional that any budget proposal based on fiscal sanity will be deemed ‘not-serious’ by the media, it will fail in the Senate, and it won’t even make it to the President’s desk where it would be vetoed anyway.

In fact, any serious proposal to restrain government growth is immediately deemed ‘not-serious’ in Washington. The Balanced Budget is deemed ‘not-serious’ in Washington.

Term Limits are deemed ‘not-serious’ in Washington. Capping federal growth by tying it to private sector economic growth is deemed ‘not-serious’ in Washington.
The truth is nothing serious is deemed serious in Washington.

When then-Senator Obama voted against raising the debt ceiling, he said he was doing so because the national debt was at an outrageous 8 trillion dollars…and he clarified for effect, saying that is “trillion with a T.”

Now President Obama has our national debt over 16 trillion dollars and climbing…larger than our entire economy. And he’s not worried about it in the least.

He calls it progress. You remember his campaign slogan, he says it is “Forward.”
I have news for the President – If Washington’s debt is going forward, America’s economy is going backward.

Instead of worrying about managing government, it’s time for us to address how we can lead America… to a place where she can once again become the land of opportunity, where she can once again become a place of growth and opportunity.
We should put all of our eggs in that basket.

Yes, we certainly do need folks in Washington who will devote themselves to the task of stopping this President from taking America so far off the ledge that we cannot get back.
We must do all we can to stop what is rapidly becoming the bankrupting of our federal government.

Talking to the Left

Every so often I watch an interview with the author of nonfiction books on CSPAN's BookTV website. 

One of those books is:  Do Not Ask What Good We Do: Inside the U.S. House of Representatives by Robert Draper

Before I comment on the book talk let me point out a few things as clearly as I can.

1. The U.S. government's debt is over $16 trillion
2. The annual budget deficit has been greater than $1 trillion every year since Obama was first elected (Table 1)
3. We would need to double all taxes paid in order to balance the budget with revenue increases only
4. Annual government spending on Social Security, Medicare, Medicaid alone is more than the entire annual revenue of the government
   Obamacare will increase government spending
5. We have not seen any budget signed into law in over three years

In light of these facts a section of the country formed the Tea Party to say, "let's stop the spending and balance the budget." 

What has happened since 2010, when Tea Party sympathetic congressmen were elected, is:

• The new congressmen have tried to pass budgets
• The new congressmen have tried to avoid raising the debt ceiling
• The new congressmen have proposed changing Social Security

Since 2008 the president has:

Added a new entitlement

Not signed any budget into law

Opposed any spending cuts

What the president, and the left want is more spending and to tax the rich more.  What the republicans want is less spending and lower taxes for everyone.

The house republicans have prevented some of the democrats' legislative goals.  Just like the democrats have prevented some of the republicans' legislative goals.

Now that we've reviewed all of this, let's look at the book in question.

The republicans try to reduce spending and the democrats increase spending.

Guess which of the following the author does:

1. Accepts that the opposing power will oppose, and proposed a balanced bill idea
2. Complains that the opposition party is opposing the democratic goals, while claiming that the republicans prefer no new laws is bad when the democrats have clearly presented plans to tax the rich and increase spending

The republicans, at least claim, to want to balance the budget, and the democrats are doing everything in their power to bankrupt us as fast as possible.  And then the democrats continually complain that the republicans don't go along with their ideas to do the exact opposite of what the republicans want.

Comments

During the last few months several bloggers put up an ultimatum about wanting people who read their blogs to comment or they would stop blogging.  I found that to be irritating.  But I am curious about what those of you who come here come here for.

Leave a comment and let me know if there is something that I post that you find particularly interesting.  I may, or may, not try and do more of that.