Hacker News Reader

Comment by tibbon | Hacker News Reader

That wasn't too hard: http://t.co/Ex8OHv7

In short, return taxes to Clinton era levels. Cut defense spending massively. Cut some gov't contractors. Cap medicare growth. Eliminate tax loopholes. National sales tax, carbon tax, bank tax.

Results? 56% savings from tax increase, 44% savings from spending cuts. Gives us a pretty clear surplus that we could invest in education, real healthcare improvements, infrastructure (trains), etc. With this plan, we could actually make the US #1 for many things in the world instead of just military spending.

It honestly wouldn't hurt me that much if my taxes overall went up by 10%. My income is probably low/average for the HN crowd.

View on HN

I didn't think it was hard either, and although my solution differed from yours in a few particulars, the core remained the same, as you mention: defense cuts, and returning taxes to pre-Clinton levels. If you have those two things in place, the rest becomes a pretty simple Chinese menu to pick and choose from.

The retirement and Medicare options also give you huge savings in the long run.

(They should probably index the retirement age to life expectancy. That way you wouldn't need to fight huge political battles every decade.)

Right. If we're living longer, why do we need to leave the workforce so early? I'd argue that with the rise of technology, there is less and less of a need to retire even if your body isn't doing as well. Unless my hands and eyes give up, why would I need to stop programming?

Extra benefit to indexing government pensions/retirement to age as well (both requiring longer time in service to be eligible, and to start collecting at a later age). Right now military and law enforcement are largely 20 years and out, and it's easy to do 20 years in the military and then 20 years in law enforcement and double dip.

> why would I need to stop programming?

Age discrimination, unfortunately. Though that might decrease in an increasingly aging U.S.

I concede that staying relevant is difficult, even for younger people, and that people employing others may have age discrimination- yet people who are doing awesome programming don't have to worry about those things. People like Notch or John Resig will always have work available to them. For all I know, Notch is 80 years old. Doesn't matter though, as he still got my money for Minecraft.

The dis-incentive to retire earlier will leave that person in the job market, and younger people will find it harder to get into the market. I have no proof, but I think this will lead to lower quality of goods in the long run, since the younger people will not have had the as much time to hone their craft as the previous generation of young people did. We'll see soon enough in real life: http://www.calculatedriskblog.com/2010/11/labor-force-partic...

Right. From my perspective the Clinton-era 90's was pretty great economically. It wasn't a terribly climate that hurt companies. Nor did it stop people from investing heavily in companies or growing awesome companies.

Stock prices from 1992 to 2000 (approx numbers):

Microsoft: $2 to $58 Apple: $15 to $28 Cisco: $.50 to $50

Add in hundreds of companies going public, innovation moving faster than ever up to that point, thousands of jobs created. Small businesses (startups) were not killed by higher taxes.

And I have no idea why our defense spending needs to be so high.

Wasn't there some sort of bubbly thingamajig in tech that ended right about at the end of Clinton? Those numbers sound bubbly.

disclaimer, I agree with you, Clinton was great, I'm just not sure the tech market is what to focus on

My solution: http://t.co/sQ3yuns (36% from tax increase, 64% from spending cuts)

Tried to take on the challenge of solving it without needing to let the Bush tax cuts expire. No national sales tax, no closing of tax breaks on mortgage interest payments (saying it's a loophole is bullshit, it's a tax deduction, not some shady offshore money funnel), lots of military cuts except for compensation & benefits.

You ignored the law of unintended consequences.

If you cut defense spending you also shrink a massive section of the economy, this will have a large ripple effect and you will end up with less tax receipts, and unemployment.

If you add a carbon tax you are taxing literally every single thing in the economy, this will reduce growth by exactly the amount of the tax, making the whole business a wash in terms of budget. (You'll convert some energy to other sources, but not much, if it was so easy we would do it already.)

Adding a sales tax would do about the same, and would also end up as a wash.

"If you cut defense spending you also shrink a massive section of the economy, this will have a large ripple effect and you will end up with less tax receipts, and unemployment."

This doesn't even make sense. If defense spending pays my salary and my salary pays my taxes, my taxes can't be any higher than 100%, and if my taxes are 100% then me losing my job due to cuts in defense spending can't cost the government more in tax receipts than it's gaining back by paying my salary.

"You'll convert some energy to other sources, but not much, if it was so easy we would do it already."

Why? People respond to incentives. (First rule of economics.) Carbon tax is an incentive.

> "cuts ... can't cost the government more in tax receipts than it's gaining back by [not] paying my salary"

Not exactly true. Your salary doesn't disappear once it's been paid to you. You spend it, someone else gets it, they spend it, and so on. At each step, taxes get paid, which the government spends, following the same pattern. Over the course of the average year, each dollar changes hands some number of times between about 6 and 12 (google for "velocity of money" for more info.) As a result, the aggregate taxes on your salary and its "inheritors", as it works through the economy, can (in some circumstances) actually end up being more than your salary itself.

Note this is not an argument either for or against any particular bit of government spending. I'm merely noting that both tax increases and spending cuts can have counter-intuitive effects, and that those effects need to be accounted for when trying to understand how a change in government policy will affect the economy.

There already is an incentive: You have to pay for energy. Adding a carbon tax just means you have to pay a bit more.

It's not possible to switch from hydrocarbon fuels to other types in any large amounts (every type we can do we already are).

Say you want more windmills - sounds easy, make non-windmill energy more expensive (tax it). One problem, making windmills costs energy. But now energy is more expensive, so windmills are also more expensive. Since windmills are more expensive windmill energy is also more expensive, making the increase in non-windmill energy prices meaningless since windmill energy ends up being just as expensive.

All you did was make ALL energy more expensive, but you did not switch people to other types.

So now what will you do with all this extra carbon tax money? You'll either give it back to people as a rebate, or you'll reduce income taxes. End result? Nothing. It's a total wash.

>"With this plan, we could actually make the US #1 for many things in the world instead of just military spending."

US is also #1 in primary school spending per capita, most years. That's something to be proud of. If you measure outcome in expenditure, then we are the most educated, healthy, and defended country on the planet.

My solution: http://t.co/SFInPFT

53% Tax Increases 47% Spending cuts

But as someone else posted, this doesn't take into account the feedback loops some of the changes have on the other measures, also with the current political climate I doubt these measures would pass.

"Why do you hate our military?" "Why do you hate our seniors?" "You like spending other people's money!"

Those are the talk radio/cable news responses to your proposals...

This web tool is cool, but there should be a way to incorporate the political realities of these actions, like cutting defense spending.

Reply on news.ycombinator.com