Debt would swell under Republican candidates' tax plans: study
66 replies, posted
[release][IMG]http://s1.reutersmedia.net/resources/r/?m=02&d=20120224&t=2&i=574594888&w=460&fh=&fw=&ll=&pl=&r=BTRE81M1GFA00[/IMG]
[B](Reuters) - The U.S. national debt will swell further under tax-cut plans floated by three of the top four Republican presidential candidates, [/B]according to an independent analysis of their fiscal policy proposals released on Thursday.
[B]Plans put forth by Newt Gingrich and Rick Santorum would pile up the largest increases in debt[/B], while [B]Mitt Romney's initial plan, since revised with bigger proposed tax cuts, would increase it by a smaller amount over the next decade.[/B]
[B]Only Ron Paul's plan to drastically shrink government and cut taxes would produce a reduction in debt levels through 2021.[/B]
The report from U.S. Budget Watch, a project of the Washington-based Committee for a Responsible Federal Budget, benchmarked the candidates' proposals against a baseline that assumes tax policies implemented by President George W. Bush are kept from expiring at year-end.
But the bipartisan group, made up of former White House and Congressional Budget Office officials and other fiscal policy veterans, said[B] it will need to revise its analysis of Romney's results to take into account his call on Wednesday for a new 20 percent cut in all individual tax rates.[/B]
Romney's new tax plan, which matches the 28 percent top rate proposed by Santorum, promises to be revenue neutral, but does not offer any specifics on how to make up for lost revenues.
All the Republican candidates jockeying for their party's nomination for the November 6 election have promised tax cuts will spark an explosion in economic growth that will fill federal coffers with sufficient revenues to shrink deficits when paired with deep spending cuts.
[B]Their assertions that tax cuts can pay for themselves is often met with skepticism by economists.[/B] The study's authors came to similar conclusions in a report that aims to impose a reality check on claims being made on the campaign trail.
[B]"Are they making proposals that risk making the debt problem worse?"[/B] said Alice Rivlin, a former head of the Congressional Budget Office and Federal Reserve vice chairman who now serves on the group's board.[B] "On that score, all of these candidates fail. They all reduce the revenue that is available to the government over time."[/B]
The group offered three scenarios for each candidate's proposals - the most optimistic gives them credit for all vague, non-specific spending cut percentage goals they have put forth. The most pessimistic excludes non-specific and politically doubtful proposals, while a middle scenario puts a dollar value on unspecified percentage goals for discretionary spending cuts.
[U]ANALYZING THE PLANS[/U]
The group said the middle path for [B]Gingrich would add $7 trillion to the national debt by 2021[/B] versus the baseline, largely [B]because he has proposed deep tax cuts for individuals and corporations, including an alternative 15 percent "flat tax."[/B]
[B]This would boost debt as a share of the overall economy to 114 percent in 2021 from the current level of about 70 percent, compared with an anticipated 2021 baseline level of 85 percent.[/B]
The middle scenario for [B]Santorum's plan would add $4.5 trillion to the debt, also due to tax cuts.[/B] The scenario excludes a pledge by Santorum "to commit to cut $5 trillion in federal spending within five years" because these cuts were not specified. [B]The debt-to-gross domestic product ratio would rise to 104 percent under Santorum's plan.[/B]
The middle-path analysis of [B]Romney's plan, before his pledge for deeper individual tax cuts, would have seen a modest $250 billion increase in debt by 2021[/B] as more of his spending cuts were specified. These included deep cuts to the federal workforce and the Medicaid health care program for the poor. [B]The debt-to-GDP ratio would have ended up at 86 percent under this plan, 1 percentage point above the baseline.[/B]
[B]The middle scenario for Paul was the only one to reduce debt below the baseline - by $2.2 trillion [/B]- largely due to spending cuts on healthcare programs and Social Security and elimination of five federal departments and many State Department programs. [B]This would cut debt to 76 percent of GDP by 2021.[/B]
[B]The debt trajectory under Paul's plan is actually similar to that of President Barack Obama's fiscal 2013 budget plan as analyzed under a separate report by the group.[/B]
[B]But instead of cutting government to the bone, Obama proposes a vastly different path, raising taxes on the wealthy, boosting near-term spending on infrastructure and education and making only minor health care spending cuts.[/B]
[B]The group estimated the debt-to-GDP ratio would rise to 78 percent by 2014 under Obama's plan, but settle back to 76.5 percent by 2022.[/B] [B]Overall debt would be reduced by about $2 trillion over this period [/B]compared with the same baseline used to gauge the Republican tax and spending plans.
The group attributed part of the Obama plan savings to previously enacted spending caps, and called it "just a first step" towards a sustainable fiscal path.[/release]
[URL="http://www.reuters.com/article/2012/02/24/us-usa-campaign-plans-idUSTRE81M1QE20120224"]Source.[/URL]
I thought that most people who could think about things for more then a minute already knew this.
The only thing I see a republican president doing is starting another war.
[QUOTE=RainbowStalin;34840441]The only thing I see a republican president doing is starting another war.[/QUOTE]
[IMG]http://abcnews.go.com/images/Politics/gty_ron_paul_faces_1_thg_110927_wblog.jpg[/IMG]
Oh, they plan to pay for it.
By repealing [i]Medicare, Medicaid and Social Security.[/i]
Personally, I think of taxes as pie. Say someone has a HUGE pie, someone has a normal sized pie, and someone has a really, really tiny pie. 30% of the huge pie will give you quite a bit of pie, while the normal sized pie and really, really tiny pie will give you barely anything.
Besides, even if you take a crazy amount like 50-70% of the huge pie, they'll still be left with a lot of pie, while comparing that to the other two sizes, they'll have only tiny bits of pie left (and probably just crumbs for the really, really tiny pie).
I don't understand why people can't understand this concept.
[QUOTE=Used Car Salesman;34840631]Oh, they plan to pay for it.
By repealing [i]Medicare, Medicaid and Social Security.[/i][/QUOTE]
I find it equally sad and hilarious at how they've convinced the people who rely on it the most to be against it.
[editline]24th February 2012[/editline]
[QUOTE=Penultimate;34840643]Personally, I think of taxes as pie. Say someone has a HUGE pie, someone has a normal sized pie, and someone has a really, really tiny pie. 30% of the huge pie will give you quite a bit of pie, while the normal sized pie and really, really tiny pie will give you barely anything.
Besides, even if you take a crazy amount like 50-70% of the huge pie, they'll still be left with a lot of pie, while comparing that to the other two sizes, they'll have only tiny bits of pie left (and probably just crumbs for the really, really tiny pie).
I don't understand why people can't understand this concept.[/QUOTE]
Because people would rather buy everything they set their eyes on.
[QUOTE=Penultimate;34840643]Personally, I think of taxes as pie. Say someone has a HUGE pie, someone has a normal sized pie, and someone has a really, really tiny pie. 30% of the huge pie will give you quite a bit of pie, while the normal sized pie and really, really tiny pie will give you barely anything.
Besides, even if you take a crazy amount like 50-70% of the huge pie, they'll still be left with a lot of pie, while comparing that to the other two sizes, they'll have only tiny bits of pie left (and probably just crumbs for the really, really tiny pie).
I don't understand why people can't understand this concept.[/QUOTE]
socialist
[quote]Only Ron Paul's plan to drastically shrink government and cut taxes would produce a reduction in debt levels through 2021.[/quote]
[QUOTE=Stick it in her pooper;34840693][/QUOTE]
That's what happens when you take out most things that are vital to living and cut defense.
[QUOTE=RainbowStalin;34840441]The only thing I see a republican president doing is starting another war.[/QUOTE]
Ron Paul doesn't want to go to war. Ron Paul makes a lot of sense.
The only thing I disagree with him is his views on creationism and that controversy with him about gays going back to being a closet homosexual.
[QUOTE=Shiftyze;34840741]Ron Paul doesn't want to go to war. Ron Paul makes a lot of sense.
The only thing I disagree with him is his views on creationism and that controversy with him about gays going back to being a closet homosexual.[/QUOTE]
And the fact that state rights is a fucking terrible concept and would screw this country over for generations.
[QUOTE=Shiftyze;34840741]Ron Paul doesn't want to go to war. Ron Paul makes a lot of sense.
The only thing I disagree with him is his views on creationism and that controversy with him about gays going back to being a closet homosexual.[/QUOTE]
Those are huge things for me, though, so I think I'll stick with Obama. Thanks though.
Does anyone else feel like this is some kind of ploy to have some of the worst craziest candidates just so Obama has a for sure win?
[QUOTE=Shiftyze;34840810]Does anyone else feel like this is some kind of ploy to have some of the worst craziest candidates just so Obama has a for sure win?[/QUOTE]
Honestly? Yeah, I've thought of that. Still going to vote for him, though, even if I'd be playing right into the Devil's/Illuminati's/Socialist Communist Nazi's hands.
[QUOTE=Nikota;34840759]And the fact that state rights is a fucking terrible concept and would screw this country over for generations.[/QUOTE]
[IMG]http://4.bp.blogspot.com/-RdVxt5imc58/TvLL0kj6vjI/AAAAAAAAAPA/3281I3HsApY/s1600/ron-paul-states-rights.jpg[/IMG]
[QUOTE=Shiftyze;34840810]Does anyone else feel like this is some kind of ploy to have some of the worst craziest candidates just so Obama has a for sure win?[/QUOTE]
Maybe some megacorporation secretly took over the US Government and is using our politicians and news for the biggest comedy / hidden camera / reality show ever, and the entire world is the victim / audience.
[QUOTE=Mr. Someguy;34841141]Maybe some megacorporation secretly took over the US Government and is using our politicians and news for the biggest comedy / hidden camera / reality show ever, and the entire world is the victim / audience.[/QUOTE]
"All the world's a stage..."
Pretty hard to reduce debt when the framework the economy and monetary systems run on has it built in as a prime component...
I think its time we had something more real - not gold standard but something better representative of reality and with limitations.
Well I do believe the idea is to cut taxes which "encourages growth" and then people make more money and thus more taxes.
That's the general idea anyways, not that it is certain to work
I've always liked Ron Paul, but I don't think he should be president. He's a good symbol, but in the end, a lot of his policies are a little kooky. Yeah, it's good that he's the only Republican candidate who's proposed budget would lower debt, but it's at the cost of stuff we really need. His economic policies are, honestly, laughable since going back to the gold standard is absurd.
[QUOTE=JustExtreme;34841741]Pretty hard to reduce debt when the framework the economy and monetary systems run on has it built in as a prime component...
I think its time we had something more real - not gold standard but something better representative of reality and with limitations.[/QUOTE]
The thing is that it's hard to get an idea of true value without getting all philosophical. Karl Marx gives an interesting perspective on this in his famous "Das Kapital", while his efforts at crafting a government have been unsuccessful, the grain of truth from his economic viewpoint still remains.
This study doesn't take into account the effects tax cuts have on economic behavior, so this is pretty much invalid
Plus the study was conducted by former Whitehouse and CBO employees lol
[QUOTE=SomeRandomGuy16;34841951]This study doesn't take into account the effects tax cuts have on economic behavior, so this is pretty much invalid[/QUOTE]
Personally, I think that'd be pretty hard to pin down. Sure, someone might spend the cash they're saving from not paying as much in taxes, but another person might just save the money. It's a little bit arbitrary. Pure numbers is easier to work with than guesses about what people might do.
Besides, and please correct me if I'm wrong on this, but wouldn't the money they would assumably be spending be in public funds, so to say, instead of government funds?
[QUOTE=Hidole555;34841859] his efforts at crafting a government have been unsuccessful[/QUOTE]
Marx never crafted a government.
[QUOTE=Penultimate;34842005]Besides, and please correct me if I'm wrong on this, but wouldn't the money they would assumably be spending be in public funds, so to say, instead of government funds?[/QUOTE]
They'd most likely be spending it in the private sector on products
[QUOTE=SomeRandomGuy16;34842041]They'd most likely be spending it in the private sector on products[/QUOTE]
Okay. Thank you. But, I guess I'm still pretty confused on how that'd help the deficit go down.
[QUOTE=Penultimate;34842046]Okay. Thank you. But, I guess I'm still pretty confused on how that'd help the deficit go down.[/QUOTE]
Spending drives the economy. Without spending, the economy cannot function.
The better the economy functions, the more money there is to tax
But if people are still pushing for lower and lower taxes, or I guess even a steady rate of low taxes, then how would that help? I'm not trying to be a dick or anything, I'm just honestly curious, and I've been very interested in economics.
[QUOTE=Penultimate;34842091]But if people are still pushing for lower and lower taxes, or I guess even a steady rate of low taxes, then how would that help? I'm not trying to be a dick or anything, I'm just honestly curious, and I've been very interested in economics.[/QUOTE]
It depends on your school of thought:
Keynesian economics (Most liberal economists are part of this school of thought) say that the best way to to get out of a recession or promote economic growth is to hire all the unemployed on government jobs, spend money on infrastructure, and bail out the failing companies.
Supply-side economics (Most conservative economists are part of this school of thought) say that the best way to promote economic growth is to lower the barriers preventing people from producing their goods and services, and promote as much spending as possible. This is typically done by optimizing regulations and lowering taxes. They cite the Laffer Curve and the Rahn Curve as proof that lower taxes and government spending can boost the economy and actually produce greater governmental revenue.
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