Because we are supposed to be making more money with enough money; we have an official Mint at our disposal. Got Capitalism?
According to the CBO, deficit spending between now and 2021 is on average ~$700 billion per year (revenues minus outlays). This is SOP which IMO is political BS, self-serving and greedy. This would be another $5.6 trillion in debt by 2021. Yes there are other budgetary items which can reduce the deficit spending but IMO these are just pie-in-the-sky guesses to make the balance sheet look better than it actually is. Being more fiscally responsible certainly is the answer but politicians are scared (*)(*)(*)(*)less to do this because their constituents will vote them out of office. So in order to balance a budget, we would need paradigm shifts from politicians and most American voters...and the likelihood of this happening is about equal to Oprah passing up a ham sandwich! I don't agree with simply cutting regulations, etc. for business, but I do support government doing everything imaginable to maximize US business which 'might' include adjusting regulations, tax rates, etc. I have never agreed with the US taxing profits earned offshore. This is stupid and in most cases double-taxation since host nations collect taxes. Money earned in the USA--tax it appropriately. Money earned outside of the US--none of our business. Drawing the line for deficit spending regarding for example Sandy...well...it should be mandatory for local, county and state governments to create rainy-day funds to deal with these emergencies. If the event requires more resources than any reasonable rainy-day fund, then let the federal government provide loans to those municipalities.
Keep in mind this represents an estimated added cost, for business and the next two years I feel sure added much more, with emphasis from Obamacare. Then consider what the cost is for establishing a new business, from various studies (environmental), to local/state regulation. It just makes building that factory someplace else and shipping back into the US more practical. I do agree with the "rainy day fund", adding making States/People pay for their own Congressional representatives, payroll to perks. The problem here is most States are not financially better off than the Federal. Shanty; How so, would it increase deficits and debt, more importantly why wouldn't it create more jobs or increase GDP?
I should qualify my statement. I do want to see spending cut eventually. I just want it to be cut after the economy is truly recovered. And regardless of the economy, the US needs a serious infrastructure building and maintenance upgrade. But, at the moment, even with the economy showing signs of life, I'm not wanting to see spending cut at the moment. It would be good to increase revenues, and with top marginal rates being low, and not enough brackets, I'd like to see a few more additions to the brackets, topping out at 50% on income over around $1,000,000. Add to that, raising the capital gains rate would also be a good way to raise revenues to reduce deficits and the national debt.
The OP question seems to assert a belief that Federal deficits are, by their very nature, good AND that surpluses are bad. Since the Federal government produces more deficit budgets than balanced ones and even in the rare instances where a surplus occurs the Federal debt keeps rising with the noted exception after the end of WWII, why not discuss from the reality of what exists?
Fair enough and I do understand your argument. The question then is what would get an economy moving in that right direction, or at a rate when slowing it down wouldn't be detrimental to the future economy. I'm suggesting under major deregulation and certain tax relief polices, industry would by nature begin expansion, further more start up business would take off. I've watched it down here in SE NM, where our energy resources have created an economic boom. State and local deregulation the primary reason and the premium basin is primarily private property, meaning much of Federal Regulations do not apply or are being ignored. Five years ago this was not the case under Gov. Richardson's control, changed by Martinez and it was seen with in weeks of her taking office. It's not always energy, where in Florida, no oil, the Ft. Worth/Dallas area it's high tech or even Lubbock/Amarillo where its Medical. As for the so called rich, 100K$ in NYC or San Francisco is barely enough to live on, but in most States, including SE NM, that's a pretty good income, if talking taxable income. The problem with trying to get over the current 24-35% Federal Tax, are the local and State Taxes already being imposed and where the combination is already over 50% of their net income. What might work is some short of Fair Tax system, where every one pay X amount over the poverty level of their family.
After thirty years or more of that approach, we got the largest economic calamity since the Great Depression. I'm not seeing the benefit of doing the same thing and expecting different results. I seriously doubt there has been any kind of deregulation that promoted an energy boom. Areas like that (my state is experiencing one now) boom because they have oil, gas, coal deposits. It's never about the taxes or regulations with that. Highly regulated states see the same booms. on $100k taxable income, with no deductions, filing single, with standard deductions, the Federal effective tax rate, combined with the state tax is 30% http://www.tax-rates.org/income-tax-calculator/?action=preload
Truly, I don't understand how anybody can feel that up to maybe 2006 we were headed for some kind of a calamity or even that the current one can't be reversed. I've been alive since that "Great Depression" and all things in general have been terrific, sure we have had up and down turns but nothing like today. Innovations from the private sector have generated a worldwide boom for all other nations and its been the US Capitalist system, alone IMO, that has allowed 7 BILLION people to today exist on this planet. Oh yes it has been deregulation or in some cases simply not enforcing old regulation. We don't require barbers to have a license or thousands of other laws, used elsewhere just to get that permit fee. Think you know this though... Think your forgetting other than Income taxes, when adding up total local and State Taxes, such as property, school, sales, user (gasoline/toll roads) which easily takes many people over 50%. However the 22% FIT, that is today, your suggesting should go to 50%, then making some folks paying a combined 75% of their taxable income, in taxes. For the millions of workers using the GW Bridge the daily cost is 26$/D if cash is used, or a truck can cost a couple hundred each day. That "user tax" alone cost 6500.00/y if used only once per day for 50 weeks, and for trucks with the same schedule 50,000$$/y. While in many cases these are deductible expenses, to others or in other places they are not....
In my area already doing business is Amy's Kitchen, they have been very successful, employing lots of workers, and recently they wanted to expand their manufacturing facilities. After submitting their plans to the City or County, they responded by saying it would cost Amy's $34 million just for the water/waste study and permits. Of course Amy's gagged at the response! http://blogs.esouthernoregon.com/so...n-theres-always-more-room-in-southern-oregon/ Don't know how many other examples there are across the USA like this in which governments are simply bonkers...
We have the economy we have and we need to stop pretending like everything is going to get better. There is nothing that points to growth greater than 2-3% so accept this and start adjusting appropriately instead of doing nothing. We need to stop blaming everything on a recession that happened 5+ years ago! This nation and it's people need to live in the moment instead of constant excuses about the past...get over it...move on...and accept the reality we have in front of us...
Deficit adds to the debt. Servicing that debt takes away money from other programs and is now around 1/2 trillion dollars. The government can print money and create inflation (which they have been trying to do) which makes the debt less costly but then it takes more money to buy things, which of course hurts the poor the most.
Giving deregulation and tax relief to business will not spur the economy. The economy grows when consumers consume. The question should be how do we increase demand of US products and services? Seems to me there are only three options; 1. personal consumption. 2. government spending in the private sector. 3. Expansion of exports. We can assume personal consumption is already near it's peak and too many people are living pay check to pay check and on credit purchases. Government spending can increase however it will be with more debt money so there is intense pressure in government to reduce it's spending. Expansion of exports makes sense because there are 23 times more consumers outside of the USA than inside the USA. But in order to export more US business must be able to compete in the global marketplace...
I believe we need public sector, potable and waste water and even industrial waste management more than we need a War on Drugs. There should be no need for environment permits, in that case.
There's no problem having design reviews and permits, however, it is unconscionable to charge a business $34 million when the entire project costs are $40-$50 million...how can a City government possibly spend $34 million creating permits? Something has run amok...big time!!
Dean Baker was the first using economic modeling to predict the housing bubble and shock to the economy in the aftermath of it bursting back in 2002. Yes, but capitalism depends on government. And what we've seen in recent decades is the right become a bunch of socialists for the 1%, while the real capitalists are the Keynesians. Barbers aren't drilling for natural gas. effective tax rates would never get over 50%, even if marginal rates for the Federal taxes on top income and capital gains earners were up to 50%. And those GWB drivers have the option to relocate into the city they work in, or use the PATH trains to get into the city. Even people in the Poconos who commute often use buses to get into the city on a daily basis. The same from. Boston, Philadelphia, Washington DC, etc. it's not my fault those dopes moved out to the burbs and away from their jobs. If they want bridges to drive over, there's a cost that they took on of their own volition.
But, the recession will effect us for years to come. The GOP blocked recovery, and we saw lost opportunities as a result. You can stick your head in the sand over that, or you can accept reality and work to solve the problems. The choice is yours and mine and everyone's. I choose to live in reality and deal with it via my vote and activism.
A positive multiplier effect can "make more money" with enough money, in macroeconomics. I believe we should insist our elected representatives claiming to be for capitalism, have more Faith.
Having started or run for others, many small and medium size business ventures, from 1960 to 1995, I've watch the progressive interference of new or expanding business. In fact it's those start up ventures, IMO that are currently being held back, that hold the future for any economy, much less when real unemployment is at 13% or the participation rate is less than 2/3rds. Your example above, likewise could never have received the needed credentials today and basically WAS turned down in California. If advising them, I'd suggest heading to Mexico, where 34M$ would not only get the permits, but build a factory to replace the CURRENT production then the desired added amount and probably pay all their employees for some time. Below is another testimonial, but I could give examples no one would believe... I've written on Sam Walton's history many times, from a poor farming family, to building an empire that now employs a couple million people directly and responsible for hundreds of successful ventures, by selling their product. Obamacare will take out more business than anyone expects, even if it's just the fines a couple years out...
More excuses! The economy does not and never will have steady growth as everyone believes it should...ain't going to happen! Therefore, logic and reality dictates that anyone effected by the peaks and valleys of the economy need to adjust accordingly. The economy we have today has zero to do with the GOP or Dems or any politics so blaming a political party is nonsense. If there is demand or demand can be created, business-minded people and/or corporations are going to meet those demands no matter how screwed up government might be. You can't identify anything the government can do to take control of the economy and give you and others what you believe it should be? Sure government can make small adjustments but they're not going to increase the GDP by $1-$2 trillion or more! Good luck with your activism...
We must accept that society and government and the economy today are much different than in past decades...some of this is good and some not so good. If the root issue is to increase demand of US products and services, what precisely are the areas in which government can help? I think CA governor Brown just signed a bill to give Tesla a $400+ million tax credit to build batteries in CA and I'm guessing there could be other concessions at the local levels...none of this increases demand but just competes with other states for the future jobs. Tesla could go bust in five years...who knows? Government cannot reduce personal and corporate taxation because we have deficit budgets for years to come...they must reduce government or all taxes are going to increase. If you gave Walmart a federal credit for the entire added cost of Obamacare, IMO this won't increase demand on Walmart's products...
First "Capitalism" is simply the idea that an economy is based on private ownership and money or capital. The antonym is socialism, which means State ownership, both inferring control of...I guarantee you "Keynesian's" are not capitalist, suggesting socialist advocates a better definition. I understand no economy can exist under 100% Capitalist Policy, but then the US Constitution specifically limits what those limits are for this central government. It's still a tax and all of them are already paying State/Federal User taxes when then buy gasoline to drive over the bridge. On average its 50 cents per gallon and for trucks it's mandatory to pay a mileage tax, unless they buy diesel in there State. For the most part Capital Gains are from money where taxes were already taxed, in some cases several times, as profits are diverted....come on, why not make investments illegal or maybe just let the Federal take over all money period, then give each of us what the Cuban Government gives their worker...35.00 per month.
