Quote:Of course, the other choice is to raise taxes like 250%. Simply put, we are spending 4 trillion (and growing), and income is now a little under 2 trillion.These last two years are wildly exceptional. Stimulus does not work without increasing spending or cutting taxes - that's what stimulus *is*. Current expenditures will not continue, and existing one-off tax cuts with expire. This is not "4 trillion and growing".
For that matter, it's not even 4 trillion - Wikipedia has 3.518 trillion for expenditures, and 2.105 trillion revenue, FY 2009. That's a 1.413 trillion gap, which is a hell of a lot of money, but it's not the 2 trillion plus you're talking about. (Projected 2010 is about a 1.2 trillion deficit. We'll count the chickens after they hatch, but 800 billion is a hell of a lot to go missing.)
Raising tax revenue by 250% would increase federal revenues to seven trillion dollars. Perhaps you mean 150%? Even then, that's totally unnecessary. Once the stimulus spending ramps down, taxes can be raised by a much more moderate amount. Just letting the Bush tax cuts expire would itself fix a very large portion of the medium-run budget problem.
In the long run, you need to take a long, hard look at entitlement spending, for sure. But even that scary looming crisis is based on the idea of perpetually increasing health care costs, based on current levels and rates of growth. I would argue that current levels could be brought closer in line with OECD average expenditures with sensible reform, and that there is no reason this rate of cost increase must go on forever. Eventually, sharp diminishing returns from health care kick in. Surely it's not worth bankrupting the nation to give people an extra 15 minutes of life after age 110.
Quote:We have about 63.3 trillion in unfunded liabilities to spend on the baby boomers for their Social Security and Medicare costs, but the government spent all the money and there is not enough income to keep those promises anymore.If only there was some well-known, internationally tested method of reducing health care costs...
Quote:Yeah, tax my tomatoes. I'll deal in the commodity of food, rather than my rapidly depreciating US currency.If I recall from my fridge, tomatoes depreciate rather rapidly themselves. :lol:
As for the savings idea, I'm all for the creation of tax-free savings accounts for socially beneficial things like education and health care. Sounds great. However, a 5000 dollar deductible would eliminate almost all of the beneficial effects of the program. The poorest would not end up with savings, but rather, in the hole, unless they got damn lucky. For those earning a median income, that's a deductible of 10% of their annual income. For those at the bottom, that might be as high as 30% of their income. Heaven help you if you have kids. Thus, this becomes a regressive tax - if everyone gets sick equally, the poorest pay exactly the same, not as a proportion of their income, but as an absolute amount. But, of course, the poor get sick more than the rich, not less.
The system would create a strong perverse incentive to never go see your doctor until you have something truly crippling, which, from a medical standpoint, is crazy. You could at least sort of solve the problem with a buffer system - say, the first 1000 dollars of medical costs are free, then the next "X" dollars are yours to pay (preferably fixed on an income formula), and then then everything over that sum (catastrophic costs) are free.
Should this not be its own thread?
-Jester
Afterthought: If you see him at the Gulch, say hi to Andrew Ryan for me.