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Comment by valleyer | Hacker News Reader

Oy. I'm no fiscal conservative, but the US federal government absolutely needs to balance its budget. Otherwise, it's bound to either choke on interest payments, devalue the dollar, or both.

Unlike most Trumpists, I see the the problem as a revenue issue, not expenditures; unlike many non-Trumpists, I doubt "tax the rich" is going to be enough to plug the hole.

Government healthcare payments would be a good start -- it seems likely that the amount most employees already (effectively) pay for health insurance could fund equivalent government coverage with some money left over to help pay for other government expenses.

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I'm unconvinced that "balance the budget" is the issue here.

Interest rates are a function of inflation and joblessness. Both of which the current administration has created via terrible (for the country; great for the family members of the administration) policies.

The terrible policies are destroying jobs and causing the prices of goods to go up, thus increasing interest rates. The administration could balance the budget, but that would not correct the interest rate problem unless they also stop enriching themselves at the expense of the rest of the country.

How are interest rates a function of joblessness? Do you mean inversely?

My amateur understanding is that prevailing interest rates are more directly a function of supply and demand for capital; I agree that higher prices increase demand for capital. Joblessness would seem to be correlated with lower demand; the unexpected combination of high employment and persistently low interest rates in the 2010s was a source of a lot of commentary, as I recall.

I'm sure jobs are an important aspect here, but I kind of doubt that we can fix this without also finding a way to refocus our efforts on endeavors that most people approve of. As it is, letting the US succeed is bad and letting it fail is worse. That's unlikely to remain stable forever.

What I mean is, that the organization responsible for setting the interest rate, has two mandates: full employment and low inflation. Jobs are an important aspect for that reason.

A reasonable capital gains would also solve the problem. the idea that money you don't work for gets taxed less than money you do is absurd

Taxing the rich would easily be enough to plug the hole, and it wouldn't even affect them in a meaningful way.

https://m.youtube.com/watch?v=AmzadQE9UD4&pp=ygUKQmlsbGlvbmF...

It is absolutely a spending problem. The Department of Agriculture has 100k employees and a $500B dollar budget. That’s just one department of many. Throw a dart at the MTS [1] report and you’ll find dozens of other agencies with similar levels of spending.

There are plenty of places to cut spending before we start raising taxes on the W2 wage earners that are contributing the most to federal tax receipts.

How would nationalizing health insurance even make a dent in spending? Ultimately the same amount of healthcare will be consumed. You are truly clueless about the federal fisc if you think these are even remotely serious ideas for fixing the federal budget deficit.

1. https://fiscaldata.treasury.gov/static-data/published-report...

I am getting way too old for this. No more "both sides." Look at the data. If you want a balanced budget, there is one party to avoid.

I don't feel like I "both sides"ed it that much, but I guess reasonable minds can disagree. But: neither party has balanced the federal budget, or even made (sane) noises about doing so, since the Democrats in the 90s. I haven't heard much about it from Democrats this election cycle -- perhaps reasonably so since there are much more critical issues at the moment.

If you look at the record, republicans out match democrats 3 to 1 for balanced budget years.

But it doesn’t matter. Those historical parties have nothing in common with their namesake parties today.

The last Republican to balance the budget was Eisenhower. Yeah, Clinton is pretty old today too, but almost no one alive today was of voting age during the Eisenhower administration.

So, I agree with your conclusion.

https://fred.stlouisfed.org/series/FYFSD

Sorry, I was not aiming that directly at you, more like an old man yelling at clouds. I kinda give up on all of this. Nobody wants to hear or debate actual policies in the public. Politics is now just an exercise in campism. Nobody plays that game better than the current party.

Yeah, it sucks. Thanks for clarifying :(

Since Bill Clinton and Lyndon B Johnson were the only two presidents to see a balanced budget I can guess which party you mean.

Sorry for misspeaking. What I should have said is that "If you want anything approaching a balanced budget in modern times..."

The facts are that surpluses were routine before the 1960s, under both parties. Since then, not so much.

1998 was the first year the United States government recorded a budget surplus since 1969 [0] (Clinton with a GOP Congress).

Since 1981, the deficit deepened under Republican administrations and shrank under Democratic ones [1]

That aligned with the creation of a right-specific media system where "Republicans don't fight Republicans" - so there can never be any internal accountability.

[0] https://clintonwhitehouse3.archives.gov/WH/New/html/19981028...

[1] https://www.yahoo.com/news/articles/fact-check-us-deficit-gr...

There hasn’t been a balanced budget for 25 years. Today’s parties aren’t the same.

What’s the point of one party balancing the budget if the next party just blows it up? That’s been the pattern since Clinton.

A good faith cooperate tax would solve most if not all of our deficit, and arguably increase our GDP growth.

A 5% revenue tax on the fortune 500 would get us half way there. I could not quickly get a number for total revenue of more than the fortune 500, but I would not be surprised if a 3% VAT would cover the entire deficit. We lose so much tax revenue due to all the loop holes deliberately left in the corporate tax code.

On top of that, ban stock buy backs entirely, that way more of the record breaking profits have to go to wages or other means of investing in the business.

"A 5% revenue tax on the fortune 500 would get us half way there."

Given that ~20% of that group have net income margins below 5%, how much of such a tax policy would simply be an inflationary tax on consumers? I.e., we know Walmart cannot simply pay a 5% revenue tax, that would instantly make them deeply unprofitable. So they would have to raise prices to afford the tax. And if they know Target, Kroger, Costco, and Amazon also need to pay the same 5% tax, there is less competitive pressure to eat into margin. Even with zero collusion, there is perfect information symmetry regarding the tax.

At their present 3.1% net margin, if Walmart passed a 5% gross-revenue tax entirely to consumers while all else stayed equal, prices would have to rise MORE than 5% -- about 5.44% just to preserve its existing margin. Of course, some of the tax burden likely gets shared between Walmart, its customers, supply chain, vendors etc... In a world where the Fortune 500 (Walmart) has to pay the 5% revenue tax but a supplier of some SKU (not a Fortune 500) does not pay it, I imagine Walmart would lean extra hard on them to eat some of the tax. It all seems like a very messy and inefficient tax.

On the VAT, the CBO has actually studied a 5% VAT tax and modeled that it would raise $330B. That's 16% of the current $2.1T deficit.

https://www.cbo.gov/budget-options/58637

Right there’s a lot of easy answers mechanically but they are challenging politically. The longer we wait to do anything the better they’ll look though that’s for sure.

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