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If Trump wins again

Discussion in 'North American Politics' started by Riders, Mar 18, 2019.

  1. Dan From Smithville

    Dan From Smithville Well-Known Member
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    So you are saying that the tax cuts will have no impact on the deficit, the debt or our spending.
     
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  2. ManSinha

    ManSinha Active Member

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    The deficits are not "required" - they are created as a result of spending more than intake (I am sure you know this) so I am puzzled by your initial statement

    And deficits can be solved by

    1. Increasing intake (taxes)
    2. Decreasing output (services / defense / welfare programs)

    I am sure you know this as well

    And are you happy with tax increases or decreasing services? We can have a separate thread on that
     
  3. Dan From Smithville

    Dan From Smithville Well-Known Member
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    So you are saying that your previous statement that it has nothing to do with the president was incomplete?
     
  4. Shaul

    Shaul Well-Known Member

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    They will or will not, as much as Congress chooses to allow it to happen.
     
  5. Dan From Smithville

    Dan From Smithville Well-Known Member
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    I was a little confused on his wording as well. Why would a deficit be required? That does not make sense.
     
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  6. Dan From Smithville

    Dan From Smithville Well-Known Member
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    If it is a Republican congress they would not be responsible and if it is a Democratic controlled congress, they would?
     
  7. ManSinha

    ManSinha Active Member

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    Sorry for being off topic @Riders

    @Dan From Smithville
    IF you get a chance at your local library or on the Internet - take a gander at these - they are in a word - hilarious
     
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  8. Shaul

    Shaul Well-Known Member

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    Not really. Congress has the responsibility for all U.S. government debt. The rest of us, including Presidents, bear the responsibility to hold Congress responsibile for their spending. When we don’t, we all must pay the consequences.
     
  9. Shaul

    Shaul Well-Known Member

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    I never said that. I wrote that every Congress bears the responsibility for its own spending. That is true for both Republicans and Democrats.
     
  10. Dan From Smithville

    Dan From Smithville Well-Known Member
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    How does all this prevent the cost of the tax cuts from impacting the debt? What is intrinsic to a party that effects how the party of the president or congress alters how much money is added to the debt?
     
  11. Dan From Smithville

    Dan From Smithville Well-Known Member
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    Still, I am wondering how this relates to his original point about changes to the deficit or the debt? What difference does it make who controls congress when something costs so much, it costs so much. Is there some mechanisms I am missing that allows congress to change how much we owe. Why don't they just legislate the debt and deficit out of existence then?
     
  12. Shaul

    Shaul Well-Known Member

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    You are overlooking the aspect of diminishing returns of taxation. The Tax reform act passed by the Republican Congress and signed by President Trump simultaneously decreased taxes and increased revenue received by the government. IOW the Tax cuts actually would have reduced the deficits, except for one thing. Congress increased spending way beyond the increased revenue. The tax cut is not the cause of the deficits. Bipartisan spending by Congress is.
     
  13. Shaul

    Shaul Well-Known Member

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    Of course there is a mechanism for debt creation. Congress controls both spending and borrowing for the U.S. government. Once they authorize a debt that is an obligation. In theory they could vote to renege on the debt. In practice they really can’t do that. First off those that hold the debt could sue in court to be paid, and according to law they would be paid first before other obligations of the government. Plus it would so chill future lenders that the U.S. would have trouble ever borrowing again. That can in no way be allowed.
     
  14. Dan From Smithville

    Dan From Smithville Well-Known Member
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    I did not say debt creation. You alluded to the ability of government to prevent the cost of tax cuts from showing up on the ledger as either debt or deficit. I guess they could increase revenue by raising taxes. That does not make much sense in this instance though. We could borrow, but again, that would show up as debt. What I wanted you to explain was how tax cuts would not show up as a cost to the budget or be added to the debt. That mechanism.
     
  15. Shaul

    Shaul Well-Known Member

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    You are making a false assumption. Reducing taxes do not necessarily reduce government income. So there were no “cost of tax cuts”. Actually the opposite happened. The tax reform bill both increased revenue while decreasing individual taxes. Research the topic Laffer curve.
     
  16. Stevicus

    Stevicus Well-Known Member
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    It'll probably be more of the same. But he's got to get reelected first. That's far from certain at this point.

    One thing to always keep in mind is that Trump didn't really "win" the election. The Democrats lost. They blew it. They could have been running against a bucket of used kitchen grease, and they still would have lost.

    We'll see who they nominate next year. If the Democrats pick another clinker, then it'll be their own fault.
     
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  17. Dan From Smithville

    Dan From Smithville Well-Known Member
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    No. Not my point at all. If there was a cost, you alluded that congress could make it go away and not show up on the debt. That mechanism. I understand that tax cuts would not add to debt if they paid for themselves.

    Adding to the debt is not a wild flight of fantasy that I invented and was cited as reason to object to them by opponents of the cuts. I am not even claiming that happened.

    I will review this tomorrow.
     
  18. ManSinha

    ManSinha Active Member

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    That makes very little sense - the same Congress passed the Tax cuts and reduced as well as increased spending?
     
  19. Shaul

    Shaul Well-Known Member

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    In the case of some other tax cut that increased debt the mechanism that Congress has to eliminate that is simply to change the taxes yet again.
     
  20. ManSinha

    ManSinha Active Member

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    "It's also a theory which has been widely discredited, both on a theoretical level and in practice. Because with the Laffer curve – perhaps unusually for economics – we have a historical instance of it being implemented by a direct proponent. Laffer was an associate of the Reagan administration, which had a staged cut in the marginal higher rate of personal income tax from 70% to 28%. The effect on the budget deficit was also striking. Reagan doubled it to $155 billion and tripled government debt to more than $2trillion. His successor, Bush senior, was forced to raise taxes as the deficit doubled again."

    Done and done - it espouses similar principles to "trickle down economics" - doesn't work
     
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