Spend less. Tax more. Sooner than later. And for the love of John Maynard Keyenes stop running big deficits during boom cycles.
Mr. Brightside's Wednesday Report
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I've been saying this since Obama's second term. In times of economic boom you raise taxes, raise rates, and lower spend. You do this for a lot of reason mainly being 2 things. You can pay down past debt. See Clinton in late 90s. And the biggest one is you then have triggers to pull to offset a recession when they happen. Economy slumps? Lower taxes, lower rates, and put together a spending bill. Economy all better.
W, then Obama, then Trump and now Biden have failed econ 101. Powell at least gets it now and he raises rates to where they should remain for the foreseeable future. About 10 year late though. Had Trump never pushed that ****ing stupid tax cut and pressured Powell to lower the already basement level rates he would have made through COVID pretty unscathed and probably would have won in a landslide. Instead the greedy dumb **** ****ed us.
No they don't. That literally the Keynesian theory. I.E. Clinton in the 90s. The last Keynesian president.
People who claim to be Keynesians, hence the quotes in my post, are all half of that equation, the spending and taxing, but the spending never goes down after things trend up and the tax cuts are always the result of non-Keynesians taking office. Clinton's balanced budget is the outlier, and most of the spending cuts were the result of having to deal with the GOP-controlled Congress and the contract with America. Clinton had to end up submitting multiple budget proposals (4 or 5) in 95 to get close enough to the GOP plan to get a deal done. One of the rare times a "bipartisan deal" means something other than both sides are screwing us.
That would require reasonable politicians and voters. We have neither. Also, I’ll take the over on the deficit prediction.
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Can't do that!
They should implement a baby boomer tax.
The Boomers had to live through the horrible no good very bad early 70s when minimum wage was only $3,200/yr. Of course the median home price then was only $26k (8x).
Of course by mid 2019, us softy millennials were buying up median homes at $265k against a federal minimum wage of $14,500/yr (18x).
Thankfully our parents told us to go to college! I mean, they went in the early 70s for like $400/yr tuition and it worked out for them. Hell, it was damn hard to work a minimum wage job through the summer and come up with that kind of money in 1970 (hint, 12 weeks would more than cover it)? Good thing they didn't eff up the system when they took over and make that tuition payment more like $9,000 a year where you'd have to work a full time job almost year round to make the payment! Whew, we dodged a bullet there.
Gen X says "Hold my Bartles and Jaymes"
You didn't even mention the best part - they enjoyed the lowest taxes in history, are the least prepared for retirement and are a significant driver of the increased expenses.
Huh.
They should implement a baby boomer tax.
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I am a huge proponent of slashing spending during boom cycles. It is crazy that we haven't.
But there is a math, deficit spending ramps up the economy. Politicians know a little boom is good for them, a bigger boom is better.
Until it isn't...
But your point is - they only care about power and influence when they are in office. Kicking the can is beneficial to one's career.
There's a great story in one of Chris Matthews's books, Hardball I think. He was talking about working as a Congressional staffer back in either the 70s or 80s and they were voting on like a social security COLA or something and someone suggested making it automatic when a Congressman yelled at them because then they wouldn't get credit for voting for something every time it came up. They'd only get credit for it the one time they did it. Real inspiring insight into politicians' minds.
Good story. That's why Americans have such low trust in politicians and, even if you hate him, Trump's "drain the swamp" mentality isn't such a bad thing.
Your point also illustrates the despserate need for term limits.
I would be surprised if there are not a couple.
As an early Gen X'er, every time I see a Millennial complaining about the sorry state of the world that Boomers left them, I'm reminded of the song lyrics:
Clowns to the left of me
Jokers to the right
Here I am stuck in the middle with you
Clowns to the left of me
Jokers to the right
Here I am stuck in the middle with you
Here is a term limits idea, limited to 4 years of running deficits (House) 8 years for the Senate. Once, in their career, the number has been exceeded, boom, term-limited.
How about some performance bonuses for surpluses?
Sure, I'll gladly take 10% of all surpluses for my idea. Thanks!
I don't want government running a profit. First, it has a job to provide services as its priority not running a profit. Second, if we did, we'd have really high taxes and no spending at all. Massive profits to be shared by congress.
Sheesh. You wanted a 100-page thesis on how this would work and be structured?
Sheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeet
no.
He's all revenue. ROI is low considering his..............entanglements. I keed I keed.
If you invest in enough failing businesses you can eke out a living cobbling together all of their crumbs
Don't forget Daddy Bush breaking his "no new taxes" pledge which later helped bring about a budget surplus along with a good economy while Clinton was president.
Totally agree. That's what was so frustrating with Obama's second term and now Biden. At least W and Trump have an excuse as tax breaks and spendaholics in the name of the farce that is "trickle down". Obama and Biden have no excuse. They are supposed to be of the same cloth as Clinton.
I'm fuzzy. But I thought even Clinton's/Dems initial proposals included cuts but Newt wanted more. They met in the middle on that and tax increases. It was a pretty amazing time that seems like it will never be replicated.
The balanced budget didn't happen until 97. Dad Bush did bite the bullet and raise taxes like he should. He lost a lot financial support because of it. Clinton 93 omnibus budget which passed through Congress with zero Republican support really got things going though. And that bill, by the way, cut discretionary spending and also some mandatory spending. Also raised taxes on the top 1%. Put us in the right path towards the 97 agreements.
Apparently they didn’t last very long as being not automatic. I knew they were auto now but I didn’t know when that happened.
Cost-of-Living Adjustment (COLA) Information | SSA
Cost-of-Living Adjustment (COLA) Information
