March 7, 2010

"If a federal budget that is 25% of GDP is too low, what is about right?"

A big "if."

25 comments:

The Drill SGT said...

No more than 20%.

and yes, I know you didn't ask that question.

Florida said...

Look, as long as we're borrowing money we're never going to pay back, who cares? Right?

It's not our money we're spending ... it's China's money that we sent over for all that junk we got at Wal-Mart.

If they're stupid enough to loan it back to deadbeats like us that's their fucking problem. I didn't agree to borrow it and I'm certainly not going to vote for any Congressman who tells me I have to pay more in taxes to pay it back.

We do not have a budget problem in the United States. If we did, wouldn't there be:

* Salary freezes on federal workers?
* Cuts in benefits and pension caps?
* A hiring freeze?
* Layoffs of non-emergency personnel?
* A freeze on Congressman getting raises?

The Federal Government is made up of people ... crooked people who are making a fucking fortune. There are 2,000 people in the Transportation Department alone making over $170,000 a year and their union negotiates with itself for raises - so, naturally, they get them frequently.

They're fucking thieves.

We have no obligation to pay China back for this thievery of our money.

Pogo said...

Looks like they're aiming north of 125%.

kentuckyliz said...

God only asked for 10% (the tithe). I don't think government should be so arrogant as to think it's bigger and better than God.

The Drill SGT said...

For the record Florida:

Federal civil service employees no longer have a large defined benefit plan.

Since 1987 the bulk of the benefits are in the form of SS and the Thrift Savings Plan (TSP) aka a 401k

edutcher said...

If you asked garage or Montagne, they'd say about 99.99%.

I'd say around 10 - and that may be too high. Enough to pay for a strong defense and the services enumerated in the Constitution. Oh, yes, and some competent people to administer it.

NewHam said...

"God only asked for 10% ..."

No, it's the pastor's manse which demands that 10%.

God only wants your soul. He could care less about your money.

NewHam said...

Some federal civil service employees no longer have a large defined benefit plan. Many, however, still enjoy massive pensions.

FIFY.

kentuckyliz said...

NewHam, you are very ignorant of the Bible. Go OT and you see it even pre-Temple.

The Drill SGT said...

NEWHAM,

which Feds do you think collect massive pensions? other than perhaps Congressmen?

kentuckyliz said...

Drillie, NEW federal employees have that arrangement. They didn't change the terms on those who already had the fat pension benefit plan in place.

I don't have a pension, myself. I'm all 403b and IRA. Mine, all mine, baby. All I want the government to do is be business friendly so I actually have something. Obama is killing my future.

Old Dad said...

It's a question of leverage, and the math is pretty simple. It makes sense for high margin-high volume businesses to be highly leveraged so long as profit margins exceeds cost of money.

On the other hand, businesses in deficit will be lucky to get any credit, let alone highly leveraged positions. It's a formula for bankruptcy.

In the short term, you can bet on the come--that volume and margins will return in the near term if I can just cash flow through this rough spot.

Here's our choices. Continue to cash flow the deficits by printing money eventually leading to inflation and interest rate hikes that will cripple the economy.

Raise taxes and cripple the economy.

Cut spending.

We'll pick the first because its the easiest in the short term. Our kids and grandkids are completely screwed because we don't have the courage or self discipline to mind our national business. We're going broke and don't give a damn. What's worse, the kids won't be able to clean up the mess. The runa away train will be too big to stop. There will be a world wide depression that will make the 30s look like a golden age, but the world economies will eventually reset, and in a generation or three some semblance of normalcy might return, but there will be nothing resembling the good old USA.

kentuckyliz said...

Question--if anyone can answer it--what diseases and conditions are currently automatically Medicare (Disability not Old Age) eligible? There's like 50 or 60 some odd diseases that are.

Maybe the solution is to refine the list of those that get automatically defaulted over into Medicare because it's too expensive for insurance groups to afford premiums on. That makes insurance much more affordable for businesses and individuals.

kentuckyliz said...

Orrin Hatch said that he was in the Gang of Seven that was working on Health Care Reform, and that the Democrat leadership SO RESTRICTED the Democrats in their discussions and attempts to work with the Republicans in a bipartisan way, that Hatch felt he had to leave out of honor. He said it was take it or leave it--Republican input and ideas were not welcome. He said this very emphatically and it got David Gregory in a kerfuffle desperate to wrap and move on.

The truth comes out...that we knew all along.

So much for the post-partisan Obama. EPIC presidential FAIL.

WV spertmen
another name for male actors in pornographic films.

AJ Lynch said...

Kentucky Liz:

The Dems ued the exact same method to craft the Spendulus. It seems to be their SOP.

AJ Lynch said...

Let's aim for no more than 20% of GDP and encourage every American to give at least 5% of their income to a well-run, effective, efficient charities.

And by charities I mean those that help the poor, sick, etc. I don't mean colleges, prep schools, partisan think tanks, etc.

Joe said...

19.6%

Joe said...

One problem with this question is that we live in a federalist system. States take care of several things. Thus government budgets of all levels should be factored in when looking at the cost of government.

edutcher said...

kentuckyliz said...

Orrin Hatch said that he was in the Gang of Seven that was working on Health Care Reform, and that the Democrat leadership SO RESTRICTED the Democrats in their discussions and attempts to work with the Republicans in a bipartisan way, that Hatch felt he had to leave out of honor. He said it was take it or leave it--Republican input and ideas were not welcome. He said this very emphatically and it got David Gregory in a kerfuffle desperate to wrap and move on.

The truth comes out...that we knew all along.

So much for the post-partisan Obama. EPIC presidential FAIL.


That's because The Won said, "I won". This also was the Russians' definition of peace during the Cold War. Funny who the Demos mimic.

WV spertmen
another name for male actors in pornographic films.


I'm glad I wasn't drinking anything when I saw that. I love my monitor.

Calypso Facto said...

Since Keynes himself thought “25 percent [of GDP] as the maximum tolerable proportion
of taxation” to correct the Depression, I'd say we need to adjust downward from that craziness.

lemondog said...

Need to have accounting for feral....er,...federal off balance sheet funding.

traditionalguy said...

This academic sounding speculation is not an economics question with an economics answer. The question is more properly directed to what is the Critical Mass or Tipping Point after which the remaining number of powerful citizen capitalists can be purged and their businesses expropriated with no political blow back? Mikhail Khodorkovsky of Yukos Oil in Russia arrived at just such a percentage dividing line and came up wanting.. not in economic terms but in basic political power terms. All of Obama's actions are being played out in that same ballpark.

Ari Tai said...

Perhaps we should try to define what a required size is by examining other institutions' overhead - how does the headquarters staff (and costs) of say, Wal-Mart, compare to government. Or the most efficient local government of a recently incorporated, well-run city. Corporations drastically downsized their headquarters staff's in the 70s and 80s - when IT made most central services redundant to what the divisions were doing and the CEO and a small staff could do for themselves (when did CEO salaries sky-rocket? When automation allowed them and a small staff to match if not better the work of 1000s of accountants, planners, paper-pushers required by information-challenged Sloan and Carnegie command-and-control organizations).

Since it's going to take a lot of effort to reset the black-hole and corrupting effects of D.C., shouldn't we aim a bit higher, perhaps a restructuring of the republic so we don't have this or an equivalent issue for another 200 years? Consider that almost all of government is one service or another, most can be automated especially if the law and regs are restructured to ease automation (and a service industry will emerge to support the non-literate).

With 22 million government workers, we should aim to come up with a design that reduces this number to 10% or less (2 million sounds like 1 million too many). This by itself (moving 20 million from a below-the-line cost to an above-the-line economic add) might just pay for social security, especially after we write down the excessive pensions, double-and-triple dippers on the public tit.

I'm thinking radical restructuring. Something true to the founders but with the "misunderstandings" restated in absolute form, federalism and subsidiarity defined concretely, with local control (and local responsibility) pre-eminent, in the form of "new" states along the lines of the original - perhaps regularly redrawn, opt-in, state political boundaries of ~300,000 citizens, drawn by algorithm and elections, with an absolute right to vote with your feet and tax and regulation competition guaranteed between the new states. Where rent-seekers have to convince 100s-1000s of state governments, not 1 that their needs be met, and/or settle for a few states where their argument makes sense and encourage like-minded citizens to vote with their feet.

Does anyone know of a current on-line effort to define something similar, including principles, terms and even documents? Federalist Papers Version 2010?

Call it an end-goal, something that we can point the political class at as a statement of what we-the-people will do if they don’t return to the founders’ intention for limited and small (< 10% of a citizen’s life) government, where the free citizen and their enterprise are largely left alone by those who would use coercion (the power of government) and not civil society (including the market, ability to vote with a wallet) to change their behavior.

AST said...

I've resolved to respond to all discussions of federal spending with "IT'S OUR MONEY AND WE WANT IT NOW!" or a variation on it.

I'd limit it to 5%.

Mick said...

The real equation is the one used by banks (or should have been used, but I digress). Debt To INCOME. GDP is stated in inflated dollars, and would be like if a bank decided whether to give you a loan based on the ratio of your debt to the income of your city. Just the interest on the national debt takes up a large portion of the Government's income (tax receipts). As government tax receipts have fallen by 11%, outlays have tripled. Does this sound like sound fiscal policy? We pay interest to the Private bankers at the Federal Reserve when they Unconstitutionally create our money from debt.
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