Taxes and the GOP walkout of debt ceiling negotiations.

[KitemanSA]

There's a lot of talk about how "I learned xyz back in my day" which simply isn't the case anymore in public education. The curriculum has been stripped down to what many believe are the bare necessicities of education due to lack of funding.

Excellent! Maybe now the kids will get educated and not indoctrinated.

[KitemanSA]

I have a suggestion on how to resolve the philosophical divide between Democrats and Republicans over the budget. Eventually, the IMF, and the large foreign stakeholders of US debt, will come calling to tell the congress they are in default. They will present a new budget in the manner of, "you have 24 hours to agree to these terms or all credit is cut off."

So, maybe have a congressional fact finding mission go to these people and ask them what the financial ultimatum will look like, then use it as a reference frame for doing it to themselves before having it imposed.

So you have noticed that we are Greece writ large?

[choff]

Not yet, but if the parties can't agree to a debt reduction plan you'll see the IMF knocking on the door to congress within 5 years. What would really hurt, would be if the US government does put together a hard fought out plan, only to have it blown out of the water by banksters coming for a $3-5 Trillion bailout in another 3 years.

[Giorgio]

There's a lot of talk about how "I learned xyz back in my day" which simply isn't the case anymore in public education. The curriculum has been stripped down to what many believe are the bare necessicities of education due to lack of funding.

Excellent! Maybe now the kids will get educated and not indoctrinated.

That's quite a deep truth, but I m not sure many will understand and think it over as deeply as it should deserve.

[hanelyp]

I'm among those who believe that tax rates, at least for middle class and higher incomes, is already at or past the futility rate. Any attempt to boost government revenue by raising tax rates is at best a VERY short term solution, which would quickly implode what remains of the economy, reducing tax revenues.

The only way to grow tax revenues is to grow the private sector economy, which will not happen so long as the threat of more higher taxes, more oppressive regulation, and inflationary fiscal policy remain.

[ScottL]

Kiteman, I disagree with your assessment of entitlement programs not being an investment. The idea behind them is not to provide for "freeloaders" as some of you have put it, but to lend a helping hand when times are down for certain families. I am from one of those families and I do view what we received as an investment towards my siblings and my own future decisions. Without these initial programs I would have never made it to college nor to the state of being capable of requesting investment in my education.

I view the original intent of these programs as nothing more than a way to lend a helping hand or perhaps to watch over seniors who made their contributions to society....etc.

As for tax rate hike scares, we've had 8 years of Bush pre-economic collapse and we still couldn't pull it up. Add another 4 years with Obama and ....still nothing. I don't think we're at the right rate yet, but....I have faith things will sort themselves out.

[ladajo]

I view the original intent of these programs...

And there-in lays the wub.

[Roger]

Number of rates has nothing to do with flatness.

I saw that too.

And no real mention of effective tax rates either... Ok.

A factoid, we currently have 6 Income tax brackets, we used to have as many as 67.

[choff]

In Canada a few years ago we had the situation where the IMF was ready to board a plane to Ottawa and deliver the bad news to the government. Instead we went through a few years of self imposed fiscal pain. New Zealand had to go through a major restructuring, the British have a new plan in place.

The U.S. can get through this and come out stronger, it won't be easy but it can be done. The caveat is that the longer you put it off the harder it is.

[krenshala]

Kiteman, I disagree with your assessment of entitlement programs not being an investment. The idea behind them is not to provide for "freeloaders" as some of you have put it, but to lend a helping hand when times are down for certain families.

If this is the case, why would I make more money on welfare than I do at my $16/hr job? Hell ... my (apartment) rent has doubled in the last four years, but in the last two years my health "insurance" costs have increased five-fold and are now MORE than my current rent payment (about 40% of my take home pay is eaten by health insurance that I have to have, just in case myself, my wife or son get sick/injured).

[Diogenes]

Kiteman, I disagree with your assessment of entitlement programs not being an investment. The idea behind them is not to provide for "freeloaders" as some of you have put it, but to lend a helping hand when times are down for certain families.

If this is the case, why would I make more money on welfare than I do at my $16/hr job? Hell ... my (apartment) rent has doubled in the last four years, but in the last two years my health "insurance" costs have increased five-fold and are now MORE than my current rent payment (about 40% of my take home pay is eaten by health insurance that I have to have, just in case myself, my wife or son get sick/injured).

You have touched on two topics of which I have long been interested. Rent and medical Insurance. I'll leave off talking about rent for now, but it's my contention that Medical Insurance is CAUSING the problem of Medical Insurance. Believe it or not, it is all the Government's fault! (of course, what else would you think I would say? )

If I recall correctly, the problem started during Nixon with his wage and price controls. Companies wanted to offer good workers more compensation, but were unable to do so because of prohibitive federal regulations during the Nixon era. As a result, they started offering "benefits" among which were "free" Health Insurance. Since it wasn't money, it didn't raise their taxes or run afoul of the Federal price and wage freezes.

What it DID do was to establish the practice as acceptable for people to agree to "Cadillac rates" and seek out medical care for the least complaint because the individuals receiving the service wasn't paying for it. As a result, demand for services increased, because Who cares? The Insurance is paying for it! This attitude infected the medical establishment as well. Expensive test? No Problem! Insurance is paying for it! Want extra weeks in the Hospital? No Problem! Insurance is paying for it! Hospital bed only costs $50.00/ day? The Insurance companies have PLENTY of money! Let's raise the cost to $1,000.00/ day! They have to pay it anyway!

Well, no company can exist if losing money. They can't even exist unless they are making at least some threshold level of profit, so when Insurance companies found themselves in loss or at the low threshold of profit, they raised costs. So then it became a contest between the medical establishment and the Insurance companies to see who could get the better of the other. Each kept raising prices to offset the greed of the other, till now prices are ridiculous, even for simple procedures.

The system has become unstable because there is no negative feedback. Neither recipients of medical care, nor the providers of medical care have any (or not much) incentive to control costs. They have incentives to splurge because someone ELSE is paying the bill! (Same problem we have with Government services.) The problem is that Insurance is no longer used for rare and catastrophic medical problems, but is now used for virtually every visit to a doctor or hospital. As a result, there is so much markup of costs, it makes health care (and therefore insurance) Insanely expensive.

I know from personal experience that most medical facilities will offer HUGE discounts for cash payment, (often 50%) because one of the defensive tactics of the insurance companies has become making the medical people walk through a gauntlet of paperwork before a claim is paid. Cash payment gets the money immediately and without hassle. The only way to get either insurance or medical costs under control is to add negative feedback to the system. Recipients of medical care need to constrain their appetite to what is necessary and scrutinize and question their medical care providers on costs. I have personally been involved in disputes with medical care providers who made serious mistakes on bills.

Insurance needs to go back to catastrophic needs, and people need to pay their ordinary medical care out of their own pockets. A reduction in demand caused by people rationing their own money will do much to reduce costs in the Medical business.

Also Legal reform would help. I know a Doctor that pays $150,000.00 per year just for malpractice insurance.

[ScottL]

If this is the case, why would I make more money on welfare than I do at my $16/hr job? Hell ... my (apartment) rent has doubled in the last four years, but in the last two years my health "insurance" costs have increased five-fold and are now MORE than my current rent payment (about 40% of my take home pay is eaten by health insurance that I have to have, just in case myself, my wife or son get sick/injured).

Welfare - $800/month (based on 1997 rate for 4 kids)
If you aren't making more than that with 16/hr, then you aren't working 40/hrs a week.

Taxes - By all means vote for persons looking out for your interests, but be aware of all the options. Republicans want to lower taxes across the board, Democrats want to lower taxes for those under $250,000/year, so for you krenshala, it sounds like it'd be the same.

[ScottL]

Also Legal reform would help. I know a Doctor that pays $150,000.00 per year just for malpractice insurance.

All depends on specialty/field. I know several doctors who don't and only make $110,000/yr. I definitely don't agree with the level of mal-practice suits and insurance required, but at some reasonable level patients should be covered as well as the doctor.

[KitemanSA]

Kiteman, I disagree with your assessment of entitlement programs not being an investment. The idea behind them is not to provide for "freeloaders" as some of you have put it, but to lend a helping hand when times are down for certain families.

This is what CHARITY is all about. Charity is voluntary. Charity works fairly well.
"Entitlements" are NOT voluntary. Johansen's first law... people have the right to voluntary action (with its corollary.. it is wrong to involve someone in an action involuntarily). Thus entitlements (where government TAKES money involuntarily) is wrong and from the second law, you can't do good by doing wrong. Thus, being wrong, entitlements will wind up bad.

[KitemanSA]

If I recall correctly, the problem started during Nixon with his wage and price controls. Companies wanted to offer good workers more compensation, but were unable to do so because of prohibitive federal regulations during the Nixon era.

Your story is correct but the timing is off. That is what FDR did during the W&P controls of WWII, no? It may have been exacerbated by the Nixon W&P controls.