Can you balance the federal budget?

Well now you get the chance to try!

http://www.federalbudgetchallenge.org/budget_challenge/sim/budget_master.html

I say don't even pay attention to the numbers at first, do what personally you'd like to if you had the power, then see how screwed your budget is at the end.


Hmm, my first go at it had an ending deficit over 10 years of $11,535,000,000,000, so I'm running up about a trillion a year.

 

Show me a "real" budget and I could accomplish something. Let Thomas Sowell, or someone like him have a crack at creating the budget for a few years and you might be surprised at what could be accomplished. Assuming the U.S. continues to exist for another 100 or 200 years, what would one expect the national debt to then be? Already some of the coins are worth more than the value imprinted. Once the same occurs for the paper bills, you're going to be in deep trouble. Of course that could never happen to America. Could it?

 

On the other end of the scales, may be all the average Joe's should be more careful with the levels of private dept they have been encouraged to amass in the greed is good and seemingly unbeatable credit and dept conditions of the last two decades.

 

If the Federal government were to confiscate every dollar in existence at the beginning of each fiscal year, and spend accordingly, how much could they spend? Without creating debt?

 

I believe there's about $9 trillion in United States currency circulating around the world, so if we confiscated every dollar we could actually pay off near the whole debt.

 

legalize it. tax it. allow non violent criminals to work and pay their taxes.

whats so hard to understand Govenment?

 

That's the way I see it. Confiscate all the money. A little less painful method might be to first cut all to the salaries of every congressmen and senator in half and don't give them a raise until they have reduced all other spending in half. Freeze taxes at the current rates, require that for every $100 dollars in revenue raised $30 must go to reducing the national debt.

 

Taxing marijuana will not solve the government's financial issues, it'd only bring in anywhere from $15-30 billion a year to the feds. Nice sum of money, but pocket change of a budget that's almost $3 trillion.

 

You might wish to check your figures once again. According to the NY Fed reserve, the total actual U.S. currency in circulation worldwide in 2004 was $733B, in 2007 it was $829B, and in 2010 it is now about $1.7T, and more of something is not always a good thing.
Perhaps it's time for someone to explain in detail, just what wealth redistribution means, as equally dividing the currency used would only provide each American citizen, man woman, and child, with about $6000 each. Would that make everyone equally wealthy? And confiscating all the existing currency would fall far short of financing the current years budget. We need to recognize that currency by itself is not wealth, but is only a means of producing wealth, which in reality are the things we need or desire, and wealth is the accumulation of things which have lasting value.

Here's a little story a friend sent me some time ago, which might give some insight on how things work.

It's a slow day in a little East Texas town. The sun is beating down, and the streets are deserted.
Times are tough, everybody is in debt, and everybody lives on credit.....
On this particular day a rich tourist from back east is driving through town. He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night. As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.
The hooker rushes to the hotel and pays off her room bill with the hotel owner.
The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.
At that moment the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money and leaves town.
No one produced anything. No one earned anything.
However, the whole town is now out of debt and now looks to the future.

 

Well in terms of "currency" in circulation, remember most of it isn't actual physical currency, I was going by the M2 number:
http://en.wikipedia.org/wiki/M2_(economics)#United_States

 

Which is why I added the little story in addition to my post. There is not $9T in actual currency that can be accumulated at one time. The same currency has to be recycled numerous times in order for government to spend what their budgets demand. Printing more money to be placed into circulation eases the governments ability to procure the necessary amount without forcing an increase in recycling, but does so by reducing the relative value of the currency in existence.

Balancing a budget is very easy, you simply live within your means. We seem to have come to accept that government can live beyond it's means perpetually and remain solvent. When economies crash completely, everyone is affected, but not all are devastated completely.

 

Well there is in theory $9 trillion in circulation, and it is actual money remember most money is done digitally these days. The M2 counts money such as saving accounts, CODs and such that is easily available on demand, it's just we can assume everyone isn't going to cash in their bonds, saving accounts, market accounts, ect all at once. It's like a bank, there may be $2.5 million in theory deposited at your local neighborhood bank in savings accounts, but there sure is hell actually isn't $2.5 million in hard currency there.

But balancing the budget isn't easy, it's not easy at all, you can't compare it to personal finances. It has broad implications on the entire working of the government, country, and services that over 300 million Americans use. Not to mention the fact the only way to balance it is either raise taxes or cut services, both are which political suicide. A politician who says we should raise taxes has basically just lost his job come next election. But there's no other choice. Social security is the single largest payment in the federal budget, but that's mandated to be paid and is only going to grow proportionally as the baby boomers retire. The defense budget is the single largest discretionary budget item, about 45% of the discretionary budget. If you removed the entire defense budget, all of it, it'd even cut the deficit by only half.

 

Nice theory, but perhaps it's best that we begin to face reality.

I think political suicide might be preferable to national suicide. Social security is a fine example of how government implements a pyramid scheme, which at the same time is illegal for an individual to do as they are proven to be unsustainable. It's time that both citizens and politicians begin to face reality. Until that time problems are not being solved, but only being made more difficult to solve by passing them on to future generations.

 

Social security is very sustainable, step 1, tax all income for social security tax, not only up to the just over $100,000 it is. Step 2, increase the number of working age immigrants so we don't face the demographic issue that is causing the problem. And sorry, the M2 is reality, if you want to get into an argument over the vast increase in the supply of money overall and it's inflation effects that's one thing. The M2 doesn't even take into account actual money supplies created, it's a direct representation of easy access physical currency and real money in liquid accounts that are easily accessible. The US dollar the international currency, $9 trillion is spread around the world.

 

I'd like to see you get Congress to even begin talks of a Social Security tax on ALL income.
Currently there are about 40 million first generation immigrants in the U.S. population, and you only assume that more immigrants would produce a positive cash flow, ignoring the possibility of an increase in the welfare roles necessary as an offset.
The M2 is a reality, recognizing just what it is, and it does take into account the actual currency and coins in existence, along with other inclusions which are not currency but redeemable as currency. As such an attempt to cash them all in at once would create economic havoc. Didn't you earlier tell me that while a bank may have $2.5 million on record as deposits, "there sure as hell isn't $2.5 million in hard currency there."? Well, the M2 contains those savings deposits, among others.
Even accepting your figures, $9 trillion of existing currency, along with a population of about 300 million, redistribution of the money (wealth?) would only amount to about $30,000 per person, or $120,000 for a family of 4 and I hardly think even a simple majority would consider themselves wealthy by years end.
And even I still have some U.S. currency I keep as it may someday have value as a collectors item.

 

It's not "my" figures, it's the federal reserve figures unless you don't believe them either. And yes, the bank analogy was my point, most "currency" is in fact only existent on paper, especially since the biggest moves of it are through various forms of government and blue chip trading.

And no, your analogy for wealth is right for all the wrong reasons. Many family assests are in things that are not part of the M2, wealthy people have investments in capital and other things that can are not readily available as monetary savings, in fact this is true for normal people. The largest two investments most people own are a car and house. Per capita income is in fact about $45,000 using purchasing power parity for the GDP, and considering the vast income inequality in the US your number is in fact pretty accurate.

And no really for immigrants. Citizenship takes years to receive which excludes people from numerous possible benefits. By the time most people become citizens they already in fact don't need welfare. Immigrants is a cheap shot too since the factors that keep many poor immigrant families poor are the same factors that keep native born American families poor for generations, it's not an immigrant issue, it's an American issue. People say immigrants will ruin the economy, wrong, the American people are doing that fine by themselves.

 

The hotel proprietor, the butcher, pig farmer, and the guy at the Farmer's Co-op each paid about $20.00 in taxes, and if prostitution was legal, so would the prostitute, making government the biggest winner here.

So, if the "rich tourist" was instead a man who worked for the government and left the $100 at the motel, it could have made it's way around town again, and again, and again; making $100 in tax revenue each time.

Who says government spending doesn't pay?

.

 

It's only a case of accepting what the figures are actually telling me.
I assume you are talking about illegal immigrants? Legal immigrants have no wait I'm aware of in order to avail themselves of any benefits they are entitled to as a legal resident. Even those here illegally can and often avail themselves to services which cannot be denied based on the legality of there being in the U.S. Put the economy aside, there are laws on the books which like most every country state the rules which must be followed in order to enter the country legally, for temporary as well as permanent residence status. Of what use are laws when they are not enforced?

 

money = debt. equally and perpetually. the transactions in an economy is just the rearranging of where the debt is.
to get rid of government debt, is to take money from everywhere else, making it a bad government.
to balance, imo, is to equalize wealth class pretty much.

 

But did they really pay taxes? The majority of persons who file taxes have no tax liability, and some even get an "earned income" credit to boot.

Government has no money of its own to spend, it can only spend others money. And even when it borrows to spend, it is creating debt which is passed on to those who actually produce something of value.

If government spending was so efficient and beneficial, we could solve all our problems by allowing the government to employ everyone, or is that what you would like to see?


There are some other ways of looking at your response as well. If taxes were paid as you indicate, the Hotel owner would begin with a $100 bill, paying the butcher in full who would lose $20 to the government in taxes (20%?), and then only have $80 to pay the pig farmer, who would in turn pay $16 in taxes, leaving him with $64 to pay the Co-op, who again would pay $12.80 in taxes leaving $51.20 to pay the prostitute who could then only return that amount to the hotel owner, leaving him to have to make up the difference of $48.80 from his own pocket in order to return the original $100. I would assume that none of them reported the income to the government. It appears that eliminating taxes makes life better in the long run. Then everyone could pay their own bills.