The united states of America has spoken

[WillisNYC]

Spending is the problem. Government baseline spending mentioned in a post above that automatically increases spending by 7-8% per year is the biggest culprit. Pols claim a 'cut' if they don't increase spending by the baseline amount! A real 1% a year across the board cut balances the budget in 6-7 years according to the proponents of the 'Penny' plan! If Dems would agree to these real cuts, then the GOP can cave and allow some tax increases. However it sounds like Lucy is going to fool Charlie Brown again. GOP sounds like they are agreeing to tax increases with only a promise of spending cuts! Will they ever learn? Real spending cuts must be part of the deal. No smoke and mirrors or the GOP should walk away.

[Action Vending]

Heres a question? We cant even balance the annual budget every year, so how can we get out of our total debt ever? It is like trying to drain a overflowing bath tub with the water still running. When they talk about debt and the 16 trillion, they are reffering to our national debt. Many states and cities have a bunch of debt too.

[lurtsman]

The issue I have with social security isn't getting a return that is less than inflation. I believe my generation (I'm 28) will see a negative return. Not after inflation (which will be very high), but before inflation. I believe every thousand dollars paid in will provide less benefit than a thousand dollars stuffed under a mattress. My generation will also be paying to build schools and roads. It isn't unique to one generation, and I don't fault the people wanting their pay out from social security. However, it is an entitlement. Entitlement reform must be comprehensive.

I was born into a world with roads, that's true. I was also born into the first generation in American history that is projected to have a lower standard of living than their parents. Real wages (inflation adjusted) are lower now than they were twenty years ago, but productivity has doubled. The increase in wealth is all flowing into the upper class, which doesn't receive their income as "wages".

I study economics a great deal, but there is one important flaw to understand.

Consider this hypothetical scenario. It isn't realistic, but it demonstrates the math and logic required to understand what is happening. Sam is a very rich man. He owns 90% of the wealth in America. For simplicity sake, he has 90 super dollars. The other hundreds of millions share 10 super dollars. Now clearly dollars are just a form of keeping track of wealth, so this reflects other assets. Factories, houses, cars, etc. The next year Sam does an incredible job dealing with other countries and selling intellectual rights. Since he is selling rights to things he already has, he lets several of the factories go idle and when he needs physical things he orders them from China. At the end of the year Sam has 140 super dollars and the rest of the country has a combined 7 super dollars. When the economists look at that year it will be the most massive increase in GDP in the history of the country. It will be a boom the likes of which no one had ever seen. However, millions might be starving to death.

While the example is far fetched, the point is correct. An increase in wealth allocated only to the super rich is not the same as an increase in standard of living for everyone. I'm not a communist, I'm a libertarian. I'm on the far other side of the scale, though when I lean it is usually to the left. Enormous tax cuts and preferential treatment for the compounding of entrenched wealth creates a statistical boom in the economy that does not necessarily improve life for anyone but the super rich. The idea that a man selling bonds deserve a lower tax rate than one selling toys, fillings, medicine, or vegetables is absolutely absurd and indicative of the corruption within our system. I would love to see a comprehensive tax reform, but the idiots in our senate are simply to greedy to serve the American people.

Side note: Barney Frank was mentioned. I wanted him locked up for his crimes against America.

The buffet rule occasionally gets some press. I agree with the president about implementing that. I don't think it goes far enough. I'm tired of the John Galt philosophy. You can beat a dentist to death with taxes over 50%, but if you raise them on a bond trader he'll let you all die. The entire argument is stupid. "If you raise my taxes, I'll have to fire employees!!!" The employees are paid before taxes. If firing employees returns RoI after taxes, it would do the same before taxes. If it is done for spite, I have no compassion for people suffering retaliation. If the arguement is against federal fees and mandates on providing coverage, that is NOT A TAX. It is a regulation, it is a fee, but it is not a tax. The system needs reform. I strongly believe health insurance should be supported by federal dollars and the burden should be entirely removed from the employer to lower the "cost" of hiring American workers. The current system tells business they can avoid taxes by simply firing their employees after the employees have generated record amounts of wealth for the company.

People do not want to give up their government hand outs. Sometimes those handouts are dollars directly from the government. Sometime it is the government offering preferred tax treatment of certain types of income. If the government actually collected the same tax rates from executive payouts that they do from dentists, can you imagine the Americans screaming when they witnessed trillions of dollars over the next decade being handed back to those executives as a cash payout? That is why the payout is done as a reduction in taxes through classifying some income as being sacred and deserving of a lower rate.