Friday, October 15, 2010

The U.S. Budget 2010

In stunning coup of outrageously manipulative BullSh*!, the Rolling Stone Magazine claims that Corporate Interests funded the Tea Party.  Let me begin by saying the Tea Party is as FOS as the Left... but the Left is just soooo disingenuous in that their reasons for rejecting even the worthy portions part of the Tea Party message is that the Tea Party folks are no more interested in addressing Social Security, Medicare, and the Military Budget than anyone else... so since they aren't going to be prudent... their argument seems to be "allow us to stay in power so that we can continue to be equally imprudent".  While that is absurd in the extreme, the Tea Party/Republicans are just as absurd - because this is simple, Junior High School math.

The U.S. Government says it spent $3.46 TRILLION $$$ in 2010.

The U.S. Government says it took in $2.16 TRILLION $$$$ in 2010.

The U.S. Government says that the deficit "dipped" coming in at only $1.29 TRILLION $$$.

(The only funny thing about this is that its probably time to buy the US$... but with no patience for losses - if I am wrong, I AM GONE.)

Too many economists and members of our illustrious press (snicker!!) refer to the budget deficit in terms of its annual percentage relative to GDP.  A better way might be as a percentage of revenues - nearly 60% (I guess as a percentage of expenditures is OK, too - over 37%). In other words, in order to balance the budget the U.S. Federal Government would need to cut the size of the government by 37%.

"But wait!"  An economically challenged moron writing for Rolling Stone Magazine might say... "Why not just increase taxes on the rich by $1.29 TRILLION??!!"  To which I would respond to the nitwit from Rolling Stone: "Per annum? You mean you think we should increase taxes by $1.29 TRILLION per annum for ever and ever??!! (never mind that you would have to increase the whole kit-and-kaboodle at some exponential growth rate because the budget does not stay static).  Do you know what that means, dearest Rolling Stone Jag Off?"

The problem is this: The slapped-ass from Rolling Stone has NO IDEA.  He doesn't need to know. That's the advantage of know-nothing positions.

Governments (that have their own currency like the U.S.) do not even NEED taxes.  They can always print money or create deposits out of thin air.  So, why go thru the pretense of taxes?  There are a number of reasons... the PRIMARY reason is that taxes are a vehicle for siphoning money out of the system to control inflation/deflation (but really inflation... who would siphon money during deflation? A-hem!  The U.S.).  If we were to follow the Rolling Stone's clever strategy... the U.S. would remove $13 TRILLION $$$ form the money supply over the next decade - at the same time the U.S. is in the grips of a credit contraction (deflation) not seen since the 1930's (and the only thing that stopped that was WWII... don't know about you, but I want to pass on WWIII)... do those great economic minds from Greenwich Village have any idea what that means!!???!!??  Do they even have the slightest idea that tax extractions by the U.S. Federal Government over the years has averaged 18.5%, + or - 1%, of GDP since the end of WWII?  And that what they are suggesting is increasing the governments take/decreasing the money supply to the tune of 10% of GDP (bringing the total takes to roughly 29%) per year, every year, for now M*ther ^%^$&ing on? Do you know what that would mean?

It would mean the end of the world.

So thanks, Rolling Stone Magazine, for continuing your propaganda effort and the farce we call the American Body Politic.... NOW F*%! Off.


bureaucrat said...

This is all pretty simple .. it is too bad the Tea Party is such a crock of ... brownies ... that we continue to ignore reality ... for some of you, this is old news ..

1) 80% of Federal spending is on Social Security, Medicare, Medicaid, Interest on the Debt and Defense (for the states, 90% of spending is on education, human services, Medicaid and pensions -- usually for teachers). The next five Federal programs eat up most of the rest of the Federal budget (Veteran programs, agriculture supports, food stamps, unemployment, and tuition defaults.)

2) Everyone agrees these programs are needed and they are wildly popular, and they will never be cut. They will be funded.

3) So, instead of borrowing to fill the budget gap, as we've done for 30 years, we need more tax revenue. Who has the money? The top 20% ... the wealthy. Hell, they/we should be PROUD to pay taxes for such useful programs. I'm serious.

4) But, realistically, everyone is going to have to take a haircut after this borrowing orgy since Reagan. As a Federal employee, I could see me not filing for social security at all, as I should get a nice pension. I could see my pay frozen for awhile also. I would really like to try single-payer health care in the U.S., for the efficiencies, but thats political.

Everyone, from the top to the bottom, is going to have to contribute something, other than plans for Armageddon, and guns and gold worship.

Dextred1 said...


The tea party in not a monolithic group. Many of the candidates backed by them (Angle, Miller, Rand) and many of the house candidates are plain libertarians. I think it is disingenuous to act as if people that have much different views are the same. The tea party is not a formalized political movement, they are a bunch of independent people that see things going wrong and are trying to fix them. The possibility that everyone leaves out is that they squeeze all the discretionary spending money from the budget to balance it. When that is done It will be much easier to take aim when that is all that’s left.

According to a Bloomberg poll three days ago 44% of the people are open to the possibility of privatization. Do you think that these are Democrats?

PioneerPreppy said...

The Tea Party is the conservative catch up game. It has reached out and jumped previously uncrossed borders of political ideology. It is the counter reaction to the progressive allied block made up of feminist, affirmative action cronies, green religious nuts and socialists wealth redistributionist.

Libertarians now stand with and cross support constitutionalist, anti-abortionist are locking arms with MRM leaders. Moderate spineless republicans are finding some will power and being told to get in line or cross over the field.

Not everyone agrees with the welfare spending especially items like abused food stamps, section 8 housing, over paid government employees, outrageous pensions, domestic violence shelters, racially biased education... the list is endless the pie as it turns out isn't.

The left isn't gonna budge an inch regardless of November outcomes. The right is finished giving in. Let the games begin November 3rd.

bureaucrat said...

The Tea party correctly states that something is wrong, but they have no realistic way to address or correct it. All the government money they complain about being "wasted" on programs are programs FOR THEM! The deficits are to provide benefits FOR THEM! The big government is to allow for big programs FOR THEM! Call a spade a spade. If you want to help your country, achieve liberty, get the government off your back ... PAY THE NECESSARY TAXES!!!! Otherwise, you are just farting in the wind.

PioneerPreppy said...

For them?

That dog don't hunt bud...

The Tea Party is made up (whether they know they are in it or not) of those who have been supporting your system. All of those who have had to suffer through the Social engineering of your "everybody".

It's coming to an end and I can smell your fear through the computer monitor. It drips off your made up fantasy in huge drops. You hope that by calling social security a part of the entitlement pie you can drag those cheated old folks into the entitlement hell with you. I got news for you, out here away from the rat infested cities even the old folk are willing to go without and stand on their own work and the repayment in kind of their children.

Best of all even if the progressive conglomerate parades false voters around like they did in 2008. Even if they go to court and dig up "lost" ballots ala AL Frankin. Even if they stand outside polling places with clubs and steal this election they have already lost.

Its getting more interesting everyday.

Anonymous said...


I would disagree with you that Defense spending is "wildly popular".

Why is it necessary or "popular" that we spend more money on "defense" than the rest of the world combined? And with no credible enemies that could pull off any kind of military attack on the homeland?

Military spending is unrealistic and will contribute to the coming collapse in a big way.

Cheers, Marshall

bureaucrat said...

One of these days I'm gonna have to create a pool where I can bet the "collapsers" and the "end of the worlders" to make their silly fantasies either come true or pay up. In exchange, I will pay them when the world indeed comes to an end. Cause frankly, unless you are ignoring what everyone can see, anyone can make juvenile, baseless, nonsense predictions. :)

Yes, the awful government is indeed trusted by the people no matter what election is coming. And yes, they want all the spending that is proposed .. Social Security, Defense .. all of it.

Maybe we can create some kind of "Hoping For Apocaylapse" CDOs or something.

PioneerPreppy said...

The only end of the world scenario I see coming is a decrease in cheap energy and a more locally oriented society with less social engineering.

Won't change my world much at all except to lessen the burden of supporting your kind of entitlement and affirmative action policies.

Since it is really only your world that will collapse I can understand your reluctance to accept it.

Greg T. Jeffers said...


Regarding your item #3:

The rich do not have the ability to fund the deficit -that was my point. If you strip that 1.3 Trillion from them per year... well, it would not even be 1 year before you completely collapsed the economy with a deflationary hurricane. THe mirror image of which is collapsing the economy via cutting spending by the same amount - it has the same effect.

Hence the term "rock and a hard place".


Never said they were Monolithic... what I said was none of them have been willing to say that they are willing to do what must be done... I sincerely hope that Pioneer is correct... because we CAN get through this, especially if you good people work within local communities to help their neighbors make the adjustment... but planned or forced, this shock is going to be a "holy sh#!" moment.

The answer is a Constitutionally respectful, much smaller Federal Government... with the slack being taken up on the local (however that might be defined) level... but sooooo many Americans simply are not accustomed to the reality of that.

Pioneer: I think your analysis is essentially correct... my fervent prayer is for a reemergence of the spirt of '76.

bureaucrat said...

Jeffers, my man,

So let me get this straight ... we can't tax the rich because ... we can't tax the rich.

1) B of America puts out a report this summer that says the top 20% income-earning Americans can essentially keep the economy going all by itself for now, with no help from the remaining 80% who are being adversely impacted by today's Depression. In short, only 1/5th of Americans can mathmatically carry the entire country for awhile.

2) Europe, with higher taxes and benefits, manages to tax their people highly just fine. And they like it.

3) The separation between the rich and poor in the U.S. now hasn't been this wide since the 1920s, and the voters are starting to yell loudly -- TAX THE MONEY-GRUBBING RICH!!

4) The rich benefit from everything America offers, including having a couple million young (poor) people in the military that protect the wealthy from being screwed over a la the Russian Revolution.

I know my total Federal tax burden on $100,000 income is about 12%. Given a little time, there is LOTS of room to pay more tax. And as for the superich, if this country is threatening to deny you your Saturday morning squash game ... please, I beg you, get the hell out.

PioneerPreppy said...

You are pretty much correct Greg even the rich don't have enough money to finance the nanny state of America.

Also the rich have always been extremely hard to tax. They have the resources and contacts to fight back or flee. A rich family of four which pull in a million a year will very quickly become four families making 240K a year with a huge paper trail who just happen to all have the same last name. A simple example but we all get the idea.

Besides Americans love the rich and always have as long as they don't get too uppity.

What we are seeing here is the progressive block failing and falling back on their own form of troop rallying. Blame the rich. Yelling racism isn't working anymore so they have to find a new target.

Greg T. Jeffers said...


There is IN FACT a maximum limit to federal tax receipts beyond which the economy collapses in a deflationary spiral... that point is well established - 18.5%, + or- 1%. I don't make the rules nor establish phenomenon - I merely make the observation and state the obvious. Denying reality is NOT a sustainable vehicle for running a political, economic, or social system.

Greg T. Jeffers said...


The percentage of GDP that the Europeans take is only marginally higher than the U.S. - and without 5% for defense (because the U.S. is the world's policeman and these folks are happily nestled under the U.S. nuclear shield). And they, too, are going thru their own austerity issues.

But you can keep making claims about things that don't exist - the is a prerequisite of membership in the Left.

Dextred1 said...


If your tax burden is 12% you are a tax cheat yourself.

PioneerPreppy said...

But you can keep making claims about things that don't exist - the is a prerequisite of membership in the Left.

Actually after the 100K a year 12% tax rate statement coming from someone claiming to be a Fed employee I am beginning to think there are more "made up claims" than anything else going on in his posts.

And the latest polls show 60 to 66% of Americans do NOT trust the government. So there is another false statement.

bureaucrat said...

(12% is my effective tax rate at the Federal level, due to deductions for rental property and the usual schedule A deductions. Last year I paid $12,307 on $97,004 in income. Stick with me, boys, and I'll learn you something. :))

bureaucrat said...


Last graph I saw (I'll see if I can find it) had 18.5% as what Federal revenues have averaged as a percent of GDP for the last 30 YEARS! (Outlays are obviously larger, generating the deficit). How can 18.5% be a maximum? We've been there for decades!

Where's that damn graph ...

bureaucrat said...

Lying and fabricating information takes a lot of energy I don't have. I am trying to save my country -- the only place I've ever lived. You all may not agree with my opinions or conclusions, but I'm pretty good with putting data together and collecting lots of observations. ;)

And yes, it is easy for some blowhard trying to get attention saying that he doesn't trust the (Federal) government. But when you're eligible for Social Security and Medicare, you get it. When the creeks rise and you are expecting a Federal bailout (Riverside, Illinois, expected FEMA to pay for flooding this summer), the horrible, non-trustable Federal government comes thru .. not always, but a lot. ;)

You're welcome.

PioneerPreppy said...

So now you are not only a commodities investor but also a slum lord?

Ok whatever...

What you seem unable to GROK, and this doesn't surprise me, is that the people outside the welfare cities do not like being forced to use such things as medicare, social security and the like.

The current system forces many people to use it whether they want to or not. The real difference is those out here know they won't starve if the system is shut off.
By ignoring this simple fact the urban bred progressives are signing their own death warrant.

Dan said...

Your effective tax rate is:
•Social Security 6.2% of the first $102K of earned income
•Medicare 1.45% of all earned income
•Your 12% effective federal tax rate
•Your state effective tax rate, Illinois isn’t cheap.
•The property tax, tags, etc you deducted on schedule A, expressed as a percentage of income.
•Sales tax expressed as a percentage of income. (Probably simplest to take your net pay, subtract your savings and multiply the resultant by the local rate.)
•Uset tax expressed as a percentage of income. (if you order something through the mail or internet and don’t pay sales tax you are supposed to pay use tax = to the sales tax rate on it.)
•Etc, etc, etc.

12% effective tax rate NAFC , you don’t earn enough to manage that. One needs to make millions per month in unearned income (investment income) to come anywhere close to the 15% long term capital gains tax rate.

bureaucrat said...

Here it is .... Federal revenue is 18.5% of GDP, and has been so for 50 years ...

bureaucrat said...

I was speaking only of my Federal income tax (from the beginning). That does not include all the taxes you mention (state, property, sales SS, Medicare, etc), that is true. It is a small price to pay to sleep well at night in the U.S. And while I have no graph for it, the majority of people in this country do sleep well at night. :)

bureaucrat said...

I have a 100 year old two-flat with two rental apartments, but I am hardly a slum lord!!! :)