Let’s try to ‘splain it this way

Something I read this morning set me to looking for info on the levels of US debt (modern day). Nothing comes close to the WWII levels. But the problem as I understand it is not today’s debt as much as where it’s projected to go.

There are a number of fixes floating out there*, but most of them involve taxes – it seems however, that while we weren’t looking an amendment to the U.S. Constitution was passed saying “thou shalt never discuss taxes unless they are being lowered sayeth someone”.

But look at this. And look at the years – the only years – the debt went up. It’s so friggin’ obvious and yet rarely makes it into the conversation.

UPDATE: Re those ‘small fixes’. Just reading an article by Steven Pearlstein, business writer at The Washington Post, who addresses this very issue today. He proposes a partnership to address both tax increases and spending reductions.

One of his suggestions is also one of my favorite talking points on this subject:

— Raise the eligibility age for Social Security and Medicare by one month for each two-month increase in average life expectancy. At the same time, slowly reduce the cost of living increases on Social Security benefits for wealthy seniors (couples, say, with income over $100,000) while slowly increasing their Medicare premiums. Everyone else’s benefits would remain untouched.

Another of my favorites:

— Reduce the Social Security payroll tax slightly to 12 percent and over time impose it on wages and salary up to $150,000, up from the current cap of about $110,000. Raise the Medicare payroll tax slightly, to 3 percent, and apply it to all income.

Of course, he’s proposing other stuff I don’t like, but the whole thing is worth a  read.

30 responses to “Let’s try to ‘splain it this way

  1. Great post, and important stuff!
    But what confuses the whole fiscal picture is the white house vs. congress mix throughout the decades… Gop controlling house/senate under Clinton, Dems controlling Congress under Bush. Partly in both cases, so I really don’t understand who should get the blame or credit for this..!

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    • I know what you’re saying, but the utter consistency of the pattern suggests to me that the president’s agendas and leadership are key to the performance – not to mention vetoes!

      And now I need to find similar data on the deficit. Yes?

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    • The Center Square

      Great post, Moe. T&P does raise a valid point. And it’s not just that Congress takes a hand, and sometimes the lead, in the direction that spending, taxes and deficits go. It is further true that the mega spending commitments of our day — Medicaid, Medicare, Social Security — do represent the initiatives of Democrats over the decades.

      But for me, that makes the taxation sins of the Republicans even worse. Reagan and B43 fully understood that the government had made those commitments to the middle class when they cut taxes. It is as if we were already committed to a cross-country road trip, and Reagan in Indiana and then B43 again in Kansas decreed, “No more gas for the car!” And did so without doing the hard work of explaining to the American people that, under their policies, we would never reach the ocean.

      Two interesting points for T&P: (1) Clinton served alongside four sessions of Congress. The 1993-94 Congress was the only Democratic majority he had. Federal spending rose at the slowest rate during that Congress of the four sessions. Yes: after Gingrich and the Republicans swept to Congressional majorities in 1995-2001, spending accelerated faster than in Clinton’s first two years.

      (2) Do not forget that G43 enjoyed Republican control of Congress for all except his final two years in office.

      As Moe says in her original post, the chart makes it friggin’ obvious. Here is my simple summary:

      (a) Politicians of all parties and persuasions are addicted to spending growth, because it can be targeted to narrow constituencies which then produce votes.
      (b) Democrats fund their spending with taxation.
      (c) Republicans fund their spending with debt.
      (d) In 2010, we are at historic LOW levels of taxation (lowest in 60 years) and an all-time high in debt. A massive over-reliance on debt and under-reliance on taxation, to the detriment of future generations.

      Check out this USA Today piece, which also makes it friggin’ obvious: http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm.

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      • [(b) Democrats fund their spending with taxation.
        (c) Republicans fund their spending with debt.]

        An important note on those absolute truths. Democrats advocate public spending on public programs. Republicans don’t – they only advocate lower taxes.

        So both give the public what they want, but only one says that’s what they’re doing – which probably makes it easier to sell the idea of actually paying for it.

        Of course, they are way slow in facing up to the probs of SS and Medicare. But they’ll get there. I’m pretty confident of that. It’s just that – as with everything – it’ll be harder and more expensive the longer we wait to apply a fix.

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      • Thanks!
        Point 2b and c seem spot-on.

        Btw; I had a little talk with my neighbor the other day, almost 90 yrs old and born in the 1920s. She has always lived small and put money aside for the bad times. She wondered why younger people borrowed and spent so much in good times? How do they prepare when things change?

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        • She’s so right. I like the phrase ‘live small’, which is how I often like to describe my own life (new pool or not!!).

          I think these people who got caught up in debt grew up in the ‘consumer culture’, in the world of easy credit – not just mortgages either. College students without any independent means of support and loaded with student loans used to be inundated with credit card offers. No qualifications needed.

          When I was growing up, consumer credit was in its infancy. A local department store began offering charge accounts. If the clerk knew you – and they usually did – it was allowed to use your parents’ charge account. (Nobody had actual cards – just the account.) And if anyone failed to pay in full in 90 days, their account was pulled. That was it. No such thing as minimum payments unless it was to pay off your bill after the account had been closed.

          And if you didn’t have an account but wanted something you didn’t have enough money for, you could put it on ‘lay-away’. The store held on to the merchandise – a coat, a dress? – while you made weekly payments until you paid it all and then the new dress was yours!

          The culture changed. They were brought up to think credit and debt were the way to live their lives.

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  2. Pingback: A history of federal debt « From the Center Square

  3. Moe —

    This is simply excellent! Great work on the research — very impressive.

    You suggested that you need to find data on deficits, but I think those are pretty clearly implied by the debt-levels; deficits cause them to go up, surpluses cause them to go down.

    More interesting to me would be #’s on the overall level of taxation. CenterSquare’s link to the USA Today piece is helpful, but federal taxes are only part of the picture, particularly inasmuch as there’s a constant interplay between federal, state and local finances (both taxes and expenditures). I have a sneaking suspicion that we’d find that Republican administrations tend to push more of the burden away from the feds and onto the locals. If that true, it means that the #’s in your table actually understate the picture (that is, in the years that the debt goes up the Republican administrations have also cut domestic expenditures, so they’re running bigger deficits at the same time that they’re paying for fewer services). Begs the question of where the money goes, but my bet is military, lower tax collections on corporations, foreign adventures and the kind of pork that sits outside of “normal” government operations (that is, “special items” which fall out of any effort to do a longitudinal study of government services over time). For Dubya, one huge obvious item was Medicare Part D (a/k/a the greatest giveaway to any industry by any government in the history of the known universe….)

    Keep up the GREAT work!!

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    • Well, kind words abound from some of my very favorite bloggers!

      T: remembering the floor fight in the Congress when they took the vote on Medicare Part D. Denny Hastert held the vote open for over three hours (unheard of!) while Tom DeLay and Billy Tauzin went around twisting arms to get Republicans to vote for the bill. One year later, Tauzin took the job as head of PHARMA, the drug lobby org. I think his starting salary was a million.

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  4. Pingback: Absolutely the Single Most Compelling Exhibit Chart on the National Debt I’ve ever seen « conscience of a progressive

  5. Nice work moe! I like it.
    Like I’ve always said when Repugs talk about the “tax and spend Dems”, It’s a helluva lot better than the borrow and spend republicans! And the Dems don’t lie to your face about it. (much)

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  6. Hey thanks CL! I noticed that you had that video of Lewis Black (Beck has Nazi Tourette’s), one of the very funniest of all time. I tried to post it a few days ago but for some reason the embed wouldn’t take. It’s a mystery. Sometimes stuff works; sometimes it doesn’t. I have given up trying to figure out why!

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  7. I like the chart! I also took a look at the Post article you referenced. Why did this guy not consider any military spending cuts, or are those lumped in with discretionary? Military expenditures have increased 100% since 9/11. Maybe we should start looking there for savings.

    Check out
    http://www.usatoday.com/news/washington/tax-rates-spending.htm

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    • That’s really quite cool. I find soc securtiy to be so bizarre. From 10K to 100Ks the same dollar amount is contributed. Or am I looking a this wrong?

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    • The Center Square

      @ Jeffrey: Right you are. Interestingly, the administration has been signalling this for a while now. Here’s a good piece (albeit editorial) form the NY Times on some of Gates’s recent pronouncements: http://www.nytimes.com/2010/05/17/opinion/17mon1.html?scp=3&sq=robert%20gates&st=cse.

      Unfortunately, the dorkwads in Congress again can’t seem to follow Obama’s pragmatic, centrist lead. They keep pushing military spending up, even past where the Pentagon wants it.

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      • As long as defense contractors spread their manufacturing facilities across forty or so states, they can count on those congressional votes. Because congress critters worry about one thing above all else – re-election.

        And that forty state strategy? Brilliant.

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        • The Center Square

          Moe: Social Security is paid at a flat percentage of wages up to the ceiling. So, it’s not the same gross amount.

          And I pray you are blogging POOLSIDE with your wireless laptop!

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  8. Pingback: The Final Nail in the Coffin of Voodoo(doo) Economics « conscience of a progressive

  9. Mike Blackburn

    All appropriations originate in Congress. Assigning spending or savings to Presidents is as nonsensical as thinking jobs are created by the Executive Branch. This problem is so easy to fix, I continue to be amazed. Obviously, it is almost impossible to find ‘leadership’ among the professional politician class.

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    • The Center Square

      @ Mike: I think Pres. Obama should immediately start working this idea into how he responds to criticism that he is spending and borrowing this country into oblivion.

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  10. I’m no fan of the political class Mike. Not at all. I once did but that’ s long gone.

    As to the chart, yes, of course appropriations origninate in Congress but much more affects an economy. Policies and regulations don’t all rise ot hte Congressional level.

    And leadership counts. Presidents have agendas and they pursue them. Their own party members in Congress usually support them.

    And Presidents have vetoes.

    And welcome!

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  11. Mike — I agree about the lack of leadership, but I think you need to look past the individuals at the system. Our electoral system functions as a mediocrity machine; the need to constantly raise money — and, with the Citizen’s United decision the need to ensure that you don’t provoke a slap-down from monied interests — creates a system in which the more important a piece of legislation is the more difficult it is for a legislator to take a courageous stand. Under the principle that survival is job #1 (because if you lose your seat you can’t do anything, even mediocre things that might help the cause), the system both demands and rewards cowardice.

    Look at the UK — they keep their campaign periods to six weeks, sidelines big money. As a result the Members of Parliament can go at one another hammer and tongs when they get their dander up.

    The answer is to undo the heinously wrong-headed notion that money equates to speech, and to publicly fund elections. If the Tea Party can do anything positive for the country, that would be it.

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  12. Pingback: Another Episode Of “Political Philosophy Matters” « The Erstwhile Conservative: A Blog of Repentance

  13. Pingback: Let’s try to ‘splain it this way (via Whatever Works) « The Conservative Lie

  14. Kudos, great stuff.

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  15. Pingback: Eighty three point four | Whatever Works

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