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PaperclipPerfector  6mo ago (text post)   26753 thread views

Culture War Roundup for the week of September 1, 2025

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The position I'm responding to is that Trump cracking a few eggs of norms is worth it if that's what it takes to get the debt under control I'm pointing out that we're getting eggs cracked and the debt is not being taken under control. I'm sure we could have some debate about how best to get the debt under control, I agree some reductions in entitlements, particularly the absurd wealth transfer from the young to the old that is medicare and to a slightly less absurd degree social security come to mind. But as far as I can tell we have a bunch of cracked eggs and rather than a balanced budget omelet we have nothing to show for it. Of course the most obvious place to start would be getting rid of the literal trillions of dollars(over a decade) in tax cuts that he passed.

Or, alternatively, explain to the various taxpayers why THEY should be on the hook for programs they generally don't receive a direct benefit from.

I would like the extra costs to be put towards paying down the debt, having a lower debt burden is in fact a way us tax payers are benefiting.

The way deficit hawking works is tax increases are proposed and accepted "to reduce the deficit". Myriad other interests smell the new money (whether it actually materializes or not) and make a play for it. Many of them succeed. Net result: more taxes, more entitlements, deficit goes higher. That's why there are very few deficit hawks left.

Then I guess it cannot, even in principle, be done so I would like to not hear about it as a problem and we shouldn't bonk down norms in order to fail to solve it.

Of course the most obvious place to start would be getting rid of the literal trillions of dollars(over a decade) in tax cuts that he passed.

having a lower debt burden is in fact a way us tax payers are benefiting.

Yeah, so tying tax increases with actual entitlement spending cuts would in theory be palatable. But you're going to piss off the groups who rely on that spending, who can then vote for people who promise to restore the spending and keep the taxes high.

So the promise of "I'm raising your taxes, but don't worry I'm only using it to decrease the debt" is not intrinsically reliable.

That's the Gordian knot, as it were.

You don't have to actually cut entitlements at all. You can just raise taxes and use that money to pay down the debt(or at least close the deficit so you aren't creating more debt). The guy in the the white house can make that call. My point is we're currently breaking eggs and receiving no omelet.

I think various high-tax European countries are showing how that process doesn't really work.

Doubly so if your country's entitlements can be hijacked by racially-motivated interest groups.

Entitlements tend to be 'nonproductive' spending. Taking money out of productive investments to spend on nonproductive ends is... not going to grow GDP, which is going to hurt tax revenues over the longer term.

Don't the very high tax European countries generally have balanced budgets- it's the Latins with their more moderate tax rates that have ridiculous spiraling debt levels?

Europe's problem is strangulating regulation. I should note that I don't love taxes and prefer they be low. My only point is that you can't forgo tax revenue and then bemoan the national debt. You pay for the debt with taxes.

And you pay for taxes with production and you get more production if you don't tax productivity.

Round and round it goes.

And if we're being really technical, they could also pay the debt by selling off various assets, including the millions upon millions of acres of land they hold. This would have possible undesirable impacts, I grant, but its a lever they could indeed pull.

Trump could try to do that. (Oh wait.) If someone really wants to make a 'dent' in the debt crisis that should, honestly, be on the table.

So I'm really not disagreeing with the idea that its hard, and raising taxes will be part of it. I just think the political will to directly impose higher income tax doesn't exist.

So why don't we take your plan to it's obvious logical conclusion, say "who cares about the debt" and just stop collecting taxes all together?

ENDORSED.

Just inflate the debt away to virtually nothing, swap to a Gold and/or Bitcoin standard, and keep rolling.

Man, I'm basically an Anarcho-Capitalist, I will bite those bullets like candy.

And I am not joking. I live in Florida. We have no income tax. We have no estate/gift tax, we have comparatively low property taxes. And we're discussing getting rid of the property taxes altogether. Most revenue is sales tax.

And we've run a $10+ billion dollar surplus in recent years. There's just shy of $5 billion sitting in the 'rainy day fund' for emergencies. Spending is PROACTIVELY being cut just in case we get a recession in the near future.

I fucking love it. I'm actually quite tired of having to deal with the profligate spending of the Federal Government whilst living in an overall fiscally responsible state.

I expect that the U.S. economy would probably survive the FedGov defaulting on its debt. How each state would weather that storm is a bigger question, but the fact that the U.S. can so readily fall back on its constituent political units definitely makes it more flexible.

So hey, I say RETVRN to a system that apportions federal taxes amongst the states and makes said states figure out how to raise that money or, if the burden is deemed too high, acts to get the FedGov to constrain its spending.

But under the current political reality, I'm very interested in seeing how FedGov navigates the current crisis and avoids a default situation.

Just inflate the debt away to virtually nothing, swap to a Gold and/or Bitcoin standard, and keep rolling.

Ok so you want to default on the debt and then switch to a hard currency that would make doing this again impossible and thus you'd have to have higher taxes because you cannot deficit spend. This is a very silly plan.

And I am not joking. I live in Florida. We have no income tax. We have no estate/gift tax, we have comparatively low property taxes. And we're discussing getting rid of the property taxes altogether. Most revenue is sales tax.

Well yes, your state is where a tremendous amount of those social security and Medicare dollars are being funneled to from younger states to retirees. florida is the fifth oldest state

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Of course the most obvious place to start would be getting rid of the literal trillions of dollars(over a decade) in tax cuts that he passed.

Wasn't that an extension of the previous tax cuts? After which tax revenues went up, suggesting we were on the good side of the Laffer curve? Were there different cuts, or do you have a reason to expect no negative consequences to tax hikes?

Yes, they were an extension of the previous Trump cuts, they still create a straightforward reduction in revenue. No it is absurd to suggest we are on the side of the Laffer curve where higher taxes would reduce total tax revenue, we're not even close to that point and no one seriously suggests we are. They are not justified as a means to maximize tax revenue, only on the grounds that people like to have more money and they will if they are taxed less. A position I think is reasonable but it's at direct odds with a desire to pay off the national debt. If we're serious about paying down the national debt we have to raise taxes and there is no real alternative, even if you cut entitlements to the bone.

Yes, they were an extension of the previous Trump cuts, they still create a straightforward reduction in revenue. No it is absurd to suggest we are on the side of the Laffer curve where higher taxes would reduce total tax revenue, we're not even close to that point and no one seriously suggests we are.

It is not clear to me that this is absurd, given that revenues rose after the cuts were initially enacted. The thing about the Laffer curve is that it's only ever a post-hoc explanation. You're expressing a high degree of confidence that tax hikes won't negatively impact the economy. Why?

It is not clear to me that this is absurd, given that revenues rose after the cuts were initially enacted.

revenue was already trending up due to a market boom. Classic economics would say that you should pay down your debts during a market boom, but we opted to run the market even hotter. An argument can be made for this, but not one that pretends to be concerned with government debt load. but this is a slightly different question. It would probably be helpful to look at an actual chart of US tax receipts and a chart of US GDP around the time of the DJT tax cuts(Jan 1 2018) you can see that GDP continue to trend up and the tax receipts stayed stagnant. The GDP trend really doesn't seem to react much if at all to the tax cuts indicating we're not really touching that laffer curve at all.

You're expressing a high degree of confidence that tax hikes won't negatively impact the economy. Why?

Tax hikes do slow the economy, no one really contests that. The question is does it slow it down so much that they actually lower tax receipts, which just there is no real indication of this happening and places with much higher taxes don't really even see this happening. The laffer curve is a theoretical thing and there is no reason to believe we're on the edge of it.

It would probably be helpful to look at an actual chart of US tax receipts and a chart of US GDP around the time of the DJT tax cuts(Jan 1 2018) you can see that GDP continue to trend up and the tax receipts stayed stagnant.

What exactly are you seeing there? It looks rather like GDP kept on a similar trajectory from the end of the global financial crisis until Covid, whereas the tax revenue chart shows movement that basically cancels out from 2015 until 2018. It looks like tax revenues were stagnant until the Trump tax cuts, which started revenue growth that was, if short of the steep climbs during the back half of Bush 2 and post GFC under Obama, still pretty in line with the 90's.

Of course, that only gives us not quite 2 years until Covid throws everything out of wack.

It looks like tax revenues were stagnant until the Trump tax cuts

Tax receipts were stagnant until Q3 2020 nearly 3 years after the tax cuts and GDP growth was steady the whole time. If the tax cuts increased revenues I'd expect GDP to accelerate after the cuts and the tax revenue to track it. I think you're vastly underestimating what exactly it would take for the tax cuts to actually pay for themselves, it's an incredible claim. When you make a nonnegligible cut to taxes you need an immense about of increased total economic activity to happen to offset that. The effect would have to be tremendous. It would show up on the GDP chart and it doesn't.

Yes, they were an extension of the previous Trump cuts, they still create a straightforward reduction in revenue.

...If tax receipts did in fact increase, how is this a straightforward reduction in revenue?

There are many more factors that go into tax receipts than just the tax rate. The economy itself was booming, a trend that predated the tax cuts, and inflation juiced the nominal rate. The straightforward reduction in revenue is that we would have collected substantially more revenue without the cuts to the tune of trillions of dollars.

The straightforward reduction in revenue is that we would have collected substantially more revenue without the cuts to the tune of trillions of dollars.

...I think I understand your argument, and even consider it colorable, but the core of your claim seems unfalsifiable. "Revenue would have been higher in the counterfactual case" is very clearly distinct from "revenue was reduced", and I think it behooves us to respect the distinction.

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