Talking the Budget to Death

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Zamfir
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Re: Talking the Budget to Death

Postby Zamfir » Thu Mar 03, 2011 9:17 pm UTC

Sure but there is risk that the revenue drys up. Its a lot easier to increase revenue to cover unexpected emergencies when your revenue is low, than it is to gain revenue when your revenue is already high.

But US government debt is pretty much the investment with the lowest yield. Of everything.Investors at large seem about as confident that your scenario will not happen as they are about anything. They might still be wrong of course, but it's not as if the figures about future benefit claims are an obscure piece of knowledge.

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Antimony-120
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Re: Talking the Budget to Death

Postby Antimony-120 » Thu Mar 03, 2011 10:28 pm UTC

Роберт wrote:
Antimony-120 wrote: But most politicians recognize that people freak out when they hear about tax increases to keep up with inflation (meaning it's not really a tax increase at all), and raising taxes to compensate for something that is something like 25% of the budget is going to invovle a large increase.

I'm confused. Why would you need "tax increases to keep up with inflation"? Taxes are already a % of stuff, so inflation is already increasing the amount of money taxed to keep up the inflation rate.

Especially when you consider that several tax bracket items don't account for inflation, so people get bumped into higher brackets solely due to inflation, so and there's capital gains tax... so real value taxed automatically increases with inflation without any tax increases.


Most forms of tax do scale automatically with inflation, nonetheless there are certain taxes and fees that have to be updated on occassion, and that is often a pain. The point wasn't particularly about inflation, it was just that the voting public reacts to the words "tax increase" in a way somewhat similar to how they might if you told them "we're going to eat your babies".
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Dark567
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Re: Talking the Budget to Death

Postby Dark567 » Thu Mar 03, 2011 11:16 pm UTC

Zamfir wrote:
Sure but there is risk that the revenue drys up. Its a lot easier to increase revenue to cover unexpected emergencies when your revenue is low, than it is to gain revenue when your revenue is already high.

But US government debt is pretty much the investment with the lowest yield. Of everything.Investors at large seem about as confident that your scenario will not happen as they are about anything. They might still be wrong of course, but it's not as if the figures about future benefit claims are an obscure piece of knowledge.
Well they don't think it will happen before that debt needs to be repaid, which I tend to agree with them on. I am talking attempting to produce a system that social security doesn't constantly require increases in taxes. So that long into the future we won't have massive amounts of debt.

Taleb basically believes that social security is an institution that is "too big to fail", but if it failed we wouldn't be able to bail it out without catastrophe. He also has recently advised getting out of US debt. http://www.bloomberg.com/news/2011-02-0 ... ate1-.html
...I still have a little bit of hard time determining whether he's a genius(He has almost certainly been the single person to most likely to turn economists on their head in the past decade) or just so bat shit insane no one could have come up with this stuff without being insane.
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Re: Talking the Budget to Death

Postby Griffin » Fri Mar 04, 2011 8:36 pm UTC

we would have to raise taxes indefinitely or raise population indefinitely, neither of which seem very desirable.


You haven't actually supported this at all yet.
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Dark567
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Re: Talking the Budget to Death

Postby Dark567 » Mon Mar 07, 2011 3:25 am UTC

Griffin wrote:
we would have to raise taxes indefinitely or raise population indefinitely, neither of which seem very desirable.
You haven't actually supported this at all yet.

Well, if the current trend continues of the ratio of people receiving social security to the people paying in increasing, the only ways to prevent that from causing a deficit is to raise the payroll tax or reduce benefits. Of course we can also try to reverse the trend by either lowering the population that receives benefits(raising the age) or by increasing the population paying in(there are bunch of ways to do this but I don't like any of them).

Also I think the complete quote of mine is important:
For that matter I am not sure that unless benefits get pushed backto a later age, that we haven't created an unstable system where we would have to raise taxes indefinitely or raise population indefinitely, neither of which seem very desirable.
I claimed I am not sure that situation won't arise....not that its a certainty. I am not claiming social security as an unstable system as fact, just that I think its possible that it is an unstable system.
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Yakk wrote:The question the thought experiment I posted is aimed at answering: When falling in a black hole, do you see the entire universe's future history train-car into your ass, or not?


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