2016 US Presidential Election

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Re: 2016 US Presidential Election

Postby jestingrabbit » Sun Mar 06, 2016 5:41 am UTC

https://twitter.com/wpjenna/status/706304799294283776

That's a little reminiscent... of things. You know what I mean.
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Re: 2016 US Presidential Election

Postby Lazar » Sun Mar 06, 2016 11:39 pm UTC

Why vote for a New York Nazi when you could have the Texas Taliban?
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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Mar 07, 2016 2:06 am UTC

Lazar wrote:Why vote for a New York Nazi when you could have the Texas Taliban?


I hate Ted Cruz as much as you, but I have to say that that was the worst youtube trash I've ever seen in my life. The scare music and cuts are ridiculous. In any case, I think I can agree with you that "Texas Taliban" is a good description of Cruz, which is why I'm having trouble deciding if Cruz or Trump is worse.

EDIT: Here's a better video. I mean, "Bibles and Guns" is about as "Texas Taliban" as you can get. Bonus points: Phil Robertson is just as anti-gay as the other guy and has the Bin-Laden beard going on if you want a visual comparison. So.... yeah. No need for scare-music or crazy cuts between videos. Ted Cruz has enough crazy that you can just see it live... or in his own videos from his own youtube channel.

Spoiler:
I know there's a better "Bibles and Guns" thing going around somewhere (Phil totally ranted for like 3 minutes solidly about Bibles and Guns, and how it applies to Ted Cruz). Can't seem to find it though.


10% Flat Tax is unsustainable (I know Cruz wants to replace income tax with a VAT-like tax, but a VAT tax is anti-progressive and hurts the poor disproportionately IMO. Income tax is fairer, even if it has a ton of warts). Cruz was the chief guy filibustering in the Senate the past years as well: if you want to know why all the budgets can't be past, Cruz is almost certainly at the center of it.
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Re: 2016 US Presidential Election

Postby ijuin » Mon Mar 07, 2016 8:22 am UTC

10% flat tax is unsustainable not only due to issues with the whole flat-tax paradigm (which I will leave others to argue), but also simply because Federal expenditures already equal 15-18% of the US GDP, so we would need closer to a 20% rate if it is meant to be the One Federal Tax To Replace Them All--unless of course Congress ever agreed to cutting total expenditures by more than a third, which would require a complete gutting of Social Security, Medicare, and/or Defense, which together comprise almost 3/4 of all expenditures.

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Re: 2016 US Presidential Election

Postby bentheimmigrant » Mon Mar 07, 2016 1:20 pm UTC

Yeah, that's fine and all, but I'm pretty sure the republican base is convinced that 70% of the budget goes to funding gay communist special interests, so cutting would be easy, if only they could get a true conservative into power.
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Re: 2016 US Presidential Election

Postby Zohar » Mon Mar 07, 2016 2:19 pm UTC

But what about Red Pride, my communist LGBTQ fanzine funded by government dollars??
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Re: 2016 US Presidential Election

Postby jewish_scientist » Mon Mar 07, 2016 2:22 pm UTC

Mighty Jalapeno wrote:Comprehensive analysis of Bernie's tax plan.

The proposal would raise taxes at every income level, but high-income taxpayers would
face the biggest increases, both in dollar amount and as a percentage of income. Overall, the plan
would raise tax burdens by an average of nearly $9,000, thereby lowering average after-tax
income by 12.4 percent. However, the highest-income taxpayers (the top 0.1 percent, or those
with income over $3.7 million in 2015 dollars) would experience an average increase in tax
burdens of more than $3 million in 2017, nearly 45 percent of their $6.9 million average after-tax
income. Households in the middle quintile of the income distribution would see an average tax
increase of almost $4,700, or 8.5 percent of their average after-tax income. Those in the bottom
quintile would experience smaller tax increases, averaging $165, or 1.3 percent of their average
after-tax income
.


Remarkably, bottom-thru-middle quintile accounts for 84% of the entire population.

I am going to read this whole thing later. My initial reaction to your objection is what I call the $&^@ is the Best Thing Hitting the Fan argument. All of America put together is >$65,000,000,000,000 in debt! The U.S.'s Gross Debt (how much we owe) to Gross Domestic Product (how much stuff we own) ratio is >104%! The Federal Budget Deficit (amount being spent minus amount of money in the budget) is >$448,000,000,000!* The only way we are getting out of this is by having everyone pay more taxes. What is very important though is that "high-income taxpayers would face the biggest increases, both in dollar amount and as a percentage of income."


*All of this comes from here.

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Re: 2016 US Presidential Election

Postby ahammel » Mon Mar 07, 2016 2:41 pm UTC

jewish_scientist wrote:All of America put together is >$65,000,000,000,000 in debt! The U.S.'s Gross Debt (how much we owe) to Gross Domestic Product (how much stuff we own) ratio is >104%! The Federal Budget Deficit (amount being spent minus amount of money in the budget) is >$448,000,000,000!*

Can you explain a) why you think that's bad, and b) what those numbers should be?
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Re: 2016 US Presidential Election

Postby Tyndmyr » Mon Mar 07, 2016 2:47 pm UTC

jewish_scientist wrote:
Mighty Jalapeno wrote:Comprehensive analysis of Bernie's tax plan.

The proposal would raise taxes at every income level, but high-income taxpayers would
face the biggest increases, both in dollar amount and as a percentage of income. Overall, the plan
would raise tax burdens by an average of nearly $9,000, thereby lowering average after-tax
income by 12.4 percent. However, the highest-income taxpayers (the top 0.1 percent, or those
with income over $3.7 million in 2015 dollars) would experience an average increase in tax
burdens of more than $3 million in 2017, nearly 45 percent of their $6.9 million average after-tax
income. Households in the middle quintile of the income distribution would see an average tax
increase of almost $4,700, or 8.5 percent of their average after-tax income. Those in the bottom
quintile would experience smaller tax increases, averaging $165, or 1.3 percent of their average
after-tax income
.


Remarkably, bottom-thru-middle quintile accounts for 84% of the entire population.

I am going to read this whole thing later. My initial reaction to your objection is what I call the $&^@ is the Best Thing Hitting the Fan argument. All of America put together is >$65,000,000,000,000 in debt! The U.S.'s Gross Debt (how much we owe) to Gross Domestic Product (how much stuff we own) ratio is >104%! The Federal Budget Deficit (amount being spent minus amount of money in the budget) is >$448,000,000,000!* The only way we are getting out of this is by having everyone pay more taxes. What is very important though is that "high-income taxpayers would face the biggest increases, both in dollar amount and as a percentage of income."


*All of this comes from here.


While this might all be true, this doesn't quite match up to tax increases. Larger taxes are not what increases the federal debt, it's larger spending that's the issue.

Sure, it's valid to point out that spending above taxation levels is still inevitibly paid for in other ways, but it seems that Bernie is proposing increased spending primarily paid for by increased taxation. So, one would think that the increased taxation would be the bit to be concerned about, not the mostly unrelated deficit(which in any case would be pretty much the same problem for any other candidate).

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Re: 2016 US Presidential Election

Postby Yakk » Mon Mar 07, 2016 3:07 pm UTC

The U.S.'s Gross Debt (how much we owe) to Gross Domestic Product (how much stuff we own) ratio is >104%! The Federal Budget Deficit (amount being spent minus amount of money in the budget) is >$448,000,000,000!* The only way we are getting out of this is by having everyone pay more taxes. What is very important though is that "high-income taxpayers would face the biggest increases, both in dollar amount and as a percentage of income."

No, that is "how much stuff the US owes" (including to other citizens of the US, and to people who owe to the US), vs Gross Domestic Product (how much stuff the US *produces* per year) is >104%.

A direct comparison is like comparing current price of apple stock to annual coal factory output tonnage.

Information can be gathered from it, but most likely if you do it you are going to be bullshitting.

It is an easy to make measure, because both values are well known for many nations. It is an *easy* measure, not a good one.
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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Mar 07, 2016 3:53 pm UTC

ahammel wrote:
jewish_scientist wrote:All of America put together is >$65,000,000,000,000 in debt! The U.S.'s Gross Debt (how much we owe) to Gross Domestic Product (how much stuff we own) ratio is >104%! The Federal Budget Deficit (amount being spent minus amount of money in the budget) is >$448,000,000,000!*

Can you explain a) why you think that's bad, and b) what those numbers should be?


I don't think its bad actually.

But I think that we need to be closer to ~60% GDP so that when the NEXT recession hits, the US Government will have enough credit to go back up to 100% GDP for stimulus spending.

As it is right now, if another 2008 recession happens, we're going to shoot up to 150% to 200% GDP, and that starts looking mighty unsustainable. If "stagflation" happens or some other situation which causes interest rates to skyrocket, the US Debt alone will become one of the biggest expenditures of the US Government.

In any case, Bernie's economic plan does NOT help the deficit at all. It is 100% accounted for by new government programs: free college, single-payer health care, and the like. Bernie has absolutely no motivation to actually create a sustainable budget. All in all, to actually start balancing the budget (after Bernie's plans are implemented), you'll have to raise taxes above and beyond his proposed 54% rate income tax / capital gains tax rate.


Yakk wrote: Information can be gathered from it, but most likely if you do it you are going to be bullshitting.


On the contrary: there is a theory that there is a maximum % of the GDP that you can efficiently tax. (and to make it clear: I think we can easily increase taxes in this country, especially on the higher end). Furthermore, due to the law of compounding interest, a debt (which grows at a rate of the deficit) grows exponentially at the rate of credit.

Granted, the 10-year US Treasury is below 2% currently, so credit markets are begging for people to borrow money. But I'd rather have the US in the position where we are borrowing money because its efficient. Besides, we're currently in a boom year economically speaking. Unemployment AND underemployment have dropped for like 80+ consecutive months. The stock market continues to trend upward. Now is the time to raise taxes, cut growth a bit, pay off the debt and begin preparing for the next economic disaster.

These good times aren't going to last forever, some economic issue will happen in the next 10 years (law of cycles: economic busts just happen eventually). Gotta have a healthy balance sheet so that crazy deficit spending can help prop up our economy at that time.
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Re: 2016 US Presidential Election

Postby Mighty Jalapeno » Mon Mar 07, 2016 4:07 pm UTC

KnightExemplar wrote:In any case, Bernie's economic plan does NOT help the deficit at all. It is 100% accounted for by new government programs: free college, single-payer health care, and the like. Bernie has absolutely no motivation to actually create a sustainable budget-
- in the first four years, because he thinks it would be a good idea to fix the gigantic holes in the Titanic before worrying about what how much luggage survived the impact.

... sorry, just felt your comment needed a little completing there.

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Re: 2016 US Presidential Election

Postby leady » Mon Mar 07, 2016 4:10 pm UTC

in a dream world outside of war or recession you'd want a debt / GDP ratio down at 20% and a neutral or surplus :)

basically gives you 5 years of 20% state spending in emergencies - depending on where your nation stands in the acceptable debt league

Bernie's plans will just deepen the hole (taxation in general decreases GDP growth, there is no low fruit left and increased consumptive spending of the poor is not economy expanding over the medium - long term)

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Re: 2016 US Presidential Election

Postby Thesh » Mon Mar 07, 2016 4:30 pm UTC

There is no correct level of debt relative to GDP, and unless you are trying to get inflation under control, then you want to be running a deficit. A surplus can actually hurt your economy by reducing the money supply. Also, you should look at debt held by the public ($13.8 trillion), not the total national debt, since the total national debt includes intragovernmental debt which is money the government owes itself, which exists only for accounting purposes.

leady wrote:Bernie's plans will just deepen the hole (taxation in general decreases GDP growth, there is no low fruit left and increased consumptive spending of the poor is not economy expanding over the medium - long term)


Bernie's plan mostly just changes how we pay for things we are already paying for, and for most of the poor and middle class there would likely be an increase in income as it shifts the burden to the wealthy. Given our current economy, there is little evidence that more taxes on the wealthy is harmful (considering previous tax cuts on the wealthy didn't give us the massive growth we were promised, and high wealth and income inequality is not leading to strong economic growth, there is no reason to believe increased taxes on the wealthy are going to have a noticeable effect on GDP growth).
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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Mar 07, 2016 4:41 pm UTC

Mighty Jalapeno wrote:
KnightExemplar wrote:In any case, Bernie's economic plan does NOT help the deficit at all. It is 100% accounted for by new government programs: free college, single-payer health care, and the like. Bernie has absolutely no motivation to actually create a sustainable budget-
- in the first four years, because he thinks it would be a good idea to fix the gigantic holes in the Titanic before worrying about what how much luggage survived the impact.

... sorry, just felt your comment needed a little completing there.


US Citizens can't even agree that teaching Statistics in high school is a good idea (ie: Common Core), how the hell are you going to enforce college standards so that the "free college" you're handing out is actually worth a damn?

If you are going to be fixing the education system, you fix it at the baseline. We don't even have a standard curriculum in this country across high schools (well we do: Common Core. But the backlash against it has been massive, and many states are rolling it back), and Bernie is sitting over there talking about free college. Its utterly insane. I'm not inclined to just throw money at the problem. I want to see the issue fixed. The issue with American education is actually the political environment right now. Until people are willing to accept a new education system, I don't think it is wise to move forward with a progressive agenda.

---------

I have confidence in Obama's Affordable Care Act. Oklahoma has begun medical tourism, taking advantage of the new regulatory environment that the Affordable Care Act provides. Now that people give a damn about health care prices, people are beginning to notice that the prices in Oklahoma are significantly cheaper than the rest of the country. A plane ticket to Oklahoma for some surgery, surgery, and then a plane ticket back is going to be cheaper than getting the same care in New York city... for a large number of procedures.

1. The Affordable Care Act guarantees out-of-network coverage. Everyone is allowed to travel to anywhere in the country for medical care. Out-of-network coverage may have higher deductibles or co-pays, but your insurance is now mandated to still have coverage for you there.

2. The Affordable Care Act greatly incentivizes high-deductable health care plans. This means that instead of a $50 co-pay for everything, you are responsible for the first $1300+ in payments. The mindset of the American is changing: instead of ignoring health care costs, we as a country have become aware of them. Now we're beginning to look across different hospitals and seeing the different prices they pay.

3. Hospitals in Oklahoma have noticed these two trends. By publishing prices online, they've attracted a number of price-conscious Americans seeking surgeries. And since they're still covered (albeit at a lesser degree... but some degree nonetheless), Oklahoma remains an option that competes against local prices.

THIS is how the market gets fixed, and that is the American way. I don't believe Americans will accept the government bargaining prices on behalf of them, because that is the way towards Socialism. If medical tourism begins to take off, hospitals will realize the potential and more of them will start publicly posting prices to their services.

The Affordable Care Act's solution to the Health Care issue just got started. Not only are people tired of health care changes, but the current laws haven't been active long enough for the market to adjust to the new regulations.
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Re: 2016 US Presidential Election

Postby sardia » Mon Mar 07, 2016 4:49 pm UTC

leady wrote:in a dream world outside of war or recession you'd want a debt / GDP ratio down at 20% and a neutral or surplus :)

basically gives you 5 years of 20% state spending in emergencies - depending on where your nation stands in the acceptable debt league

Bernie's plans will just deepen the hole (taxation in general decreases GDP growth, there is no low fruit left and increased consumptive spending of the poor is not economy expanding over the medium - long term)

Most candidates have badly written plans that don't make economic sense. The GOP candidates all depend on the economic multiplier of tax cuts going higher and higher. After a certain point, you should start questioning their legitimacy. Like if I told you that cutting taxes on Bob by 1$, Bob would then go on to create the next Google and generate a trillion dollars in new activity, you'd be right to consider me crazy. But when a Republican does it, conservatives eat it up.

Bargaining only works if you're willing to let people die. If you threaten to drive pharmaceuticals into the red by refusing to pay for drugs and prove it with an actual body count, then the drug companies will decrease their prices. Right now, the companies know the US isn't willing to publicly let elderly people die, so the US has no leverage.

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Re: 2016 US Presidential Election

Postby Dauric » Mon Mar 07, 2016 4:56 pm UTC

KnightExemplar wrote:I'm not inclined to just throw money at the problem. I want to see the issue fixed. The issue with American education is actually the political environment right now. Until people are willing to accept a new education system, I don't think it is wise to move forward with a progressive agenda.


Federal government is already throwing money at the problem with Federal backed and subsidized loans, for-profit colleges are already feeding at the trough of federal education dollars. Now I'l agree that throwing -more- money at the problem isn't going to be helpful, but a President pushing a big agenda -might- be able to get a relatively small shift out of Congress (ie: Healthcare reform as proposed by Obama was supposed to address all aspects of the U.S. healthcare system, but what we got was restricted pretty tightly to health insurance and not a lot more than that.)

So in that regard I'm fine with a hypothetical President Sanders pushing for free college, it might direct enough public attention to the issue to make Congress look at reforming how we finance higher education.
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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Mar 07, 2016 5:01 pm UTC

Dauric wrote:
KnightExemplar wrote:I'm not inclined to just throw money at the problem. I want to see the issue fixed. The issue with American education is actually the political environment right now. Until people are willing to accept a new education system, I don't think it is wise to move forward with a progressive agenda.


Federal government is already throwing money at the problem with Federal backed and subsidized loans, for-profit colleges are already feeding at the trough of federal education dollars. Now I'l agree that throwing -more- money at the problem isn't going to be helpful, but a President pushing a big agenda -might- be able to get a relatively small shift out of Congress (ie: Healthcare reform as proposed by Obama was supposed to address all aspects of the U.S. healthcare system, but what we got was restricted pretty tightly to health insurance and not a lot more than that.)

So in that regard I'm fine with a hypothetical President Sanders pushing for free college, it might direct enough public attention to the issue to make Congress look at reforming how we finance higher education.


Student loans are actually bundled up into SLABs (Student Loan Asset Backed Securities) and then sold into the greater debt market. The federal government's job is helping Sallie Mae facilitate those loans and hand them out to the public. The Federal Government enforces those loans IIRC, but beyond that, the money is actually coming from investors / Wall Street.

Which goes back to why I say Bernie Sanders taxing the bond market is a dumb-ass idea. He literally has no fucking idea how America works. The Bond Market is where student loans come from right now. Federal government simply is a program that sets some prices and provides the guarantees that Wall Street wants to make SLABs a nice commodity. Yeah, lets tax student loans, that's a brilliant idea Bernie. Utterly brilliant. /s

EDIT: Yes, FAFSA is handled by a private Wall Street company, and packaged as bonds and sold to the market. Then these bonds are then packaged again into financial instruments at other banks (CUSIP 78448PAA8 is from Sallile Mae in this example)
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Re: 2016 US Presidential Election

Postby leady » Mon Mar 07, 2016 5:07 pm UTC

sardia wrote:Bargaining only works if you're willing to let people die. If you threaten to drive pharmaceuticals into the red by refusing to pay for drugs and prove it with an actual body count, then the drug companies will decrease their prices. Right now, the companies know the US isn't willing to publicly let elderly people die, so the US has no leverage.


The NHS has a body set up to do just this - its called NICE... (I'm pretty sure NICE goes into the same category as law creation and sausage makers)

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Re: 2016 US Presidential Election

Postby Chen » Mon Mar 07, 2016 5:36 pm UTC

Thesh wrote:Bernie's plan mostly just changes how we pay for things we are already paying for, and for most of the poor and middle class there would likely be an increase in income as it shifts the burden to the wealthy. Given our current economy, there is little evidence that more taxes on the wealthy is harmful (considering previous tax cuts on the wealthy didn't give us the massive growth we were promised, and high wealth and income inequality is not leading to strong economic growth, there is no reason to believe increased taxes on the wealthy are going to have a noticeable effect on GDP growth).


I'd like to know what projections were done trying to determine how people change their behaviors when the taxes go up, if any. I mean did he just run purely the numbers and said if all else remains the same and I change these tax rates we're going to get X more dollars which will be used to fund all these things? Because that's usually pretty wrong. It just happened up here in Canada. The Federal government reduced the tax rate on the middle income earners by 1.5% and created a new upper bracket 4% higher than the previous one to compensate. The initial reasoning was it was going to be revenue neutral and would help the middle class. Turns out while the middle class does get helped with a reduced tax rate (though by a piddling amount for those who really need it), the higher tax bracket doesn't actually cover it all. It's actually a fair bit under resulting in an additional deficit of around $9 billion over the next 6 years. A lot of what I've read seems to indicate this is because those higher earners will modify their financial behavior to get around needing to pay that tax either through whatever loopholes they can or just plain leaving the country.

Now granted the US taxes you even if you leave so maybe that aspect won't be as problematic, but to just assume you're actually going to bring in all that revenue is not a good idea. Spending that money before you have it is even worse.

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Re: 2016 US Presidential Election

Postby Dark567 » Mon Mar 07, 2016 5:42 pm UTC

Chen wrote:Now granted the US taxes you even if you leave so maybe that aspect won't be as problematic, but to just assume you're actually going to bring in all that revenue is not a good idea. Spending that money before you have it is even worse.
Well, right. This is the one of the reasons using a financial transaction tax to pay for college education won't work. As soon as an FTT is implement trading is going to plummet and the estimated revenue isn't going to be there.
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Re: 2016 US Presidential Election

Postby Tyndmyr » Mon Mar 07, 2016 6:04 pm UTC

KnightExemplar wrote:
Dauric wrote:
KnightExemplar wrote:I'm not inclined to just throw money at the problem. I want to see the issue fixed. The issue with American education is actually the political environment right now. Until people are willing to accept a new education system, I don't think it is wise to move forward with a progressive agenda.


Federal government is already throwing money at the problem with Federal backed and subsidized loans, for-profit colleges are already feeding at the trough of federal education dollars. Now I'l agree that throwing -more- money at the problem isn't going to be helpful, but a President pushing a big agenda -might- be able to get a relatively small shift out of Congress (ie: Healthcare reform as proposed by Obama was supposed to address all aspects of the U.S. healthcare system, but what we got was restricted pretty tightly to health insurance and not a lot more than that.)

So in that regard I'm fine with a hypothetical President Sanders pushing for free college, it might direct enough public attention to the issue to make Congress look at reforming how we finance higher education.


Student loans are actually bundled up into SLABs (Student Loan Asset Backed Securities) and then sold into the greater debt market. The federal government's job is helping Sallie Mae facilitate those loans and hand them out to the public. The Federal Government enforces those loans IIRC, but beyond that, the money is actually coming from investors / Wall Street.

Which goes back to why I say Bernie Sanders taxing the bond market is a dumb-ass idea. He literally has no fucking idea how America works. The Bond Market is where student loans come from right now. Federal government simply is a program that sets some prices and provides the guarantees that Wall Street wants to make SLABs a nice commodity. Yeah, lets tax student loans, that's a brilliant idea Bernie. Utterly brilliant. /s

EDIT: Yes, FAFSA is handled by a private Wall Street company, and packaged as bonds and sold to the market. Then these bonds are then packaged again into financial instruments at other banks (CUSIP 78448PAA8 is from Sallile Mae in this example)


This is totally a valid criticism of Bernie's plan...but yeah, I agree that "but he's not paying down the deficit" really isn't.

Honestly, I don't see the deficit as a big delta between most candidates anyways. Republicans talk a good game about how big government is bad, and when given the opportunity to demonstrate it, promptly do.

It's more of "these changes will throw a wrench in this system, and here's how". Frantic talk about the deficit, devoid of the actual numbers, is a really old tactic by doom and gloomers, but...it's not as if nobody noticed the deficit. It's not really some unexpected surprise, just a routine part of how things work. Nobody is really doing a massive change to THAT, so who cares, really?

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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Mar 07, 2016 6:11 pm UTC

Fair enough. I think every presidential candidate is running a deficit in their tax plans.

I'm just less inclined to support Bernie's deficit, after he plans to raise taxes so dramatically. Ideally, we raise taxes a bit to sustainable levels. I agree with a lot of Bernie's principles: increase capital gains tax to income tax (I never believed the capital-gains tax was a "double tax", unlike a lot of other Republicans), increase the top-end of the tax brackets, create a $10,000,000+/year tax bracket (because the elite-of-the-elite really should be taxed differently IMO). But he just goes so severely overboard that I can't support him.

There's plenty to like about his tax plan and I'm glad he's contributing to the discussion. But a lot of the details are straight up ignorant (ie: financial transaction tax), and despite the major tax increases, it still isn't a sustainable plan in my books, since the deficit will continue to grow due to increase government spending.
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Re: 2016 US Presidential Election

Postby Mighty Jalapeno » Mon Mar 07, 2016 6:16 pm UTC

So what is your option for getting rid of the deficit without cutting essential programs or increasing tax revenue?

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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Mar 07, 2016 6:21 pm UTC

Mighty Jalapeno wrote:So what is your option for getting rid of the deficit without cutting essential programs or increasing tax revenue?


Increasing tax revenue. The problem with Bernie's plan is that he doesn't increase it enough, once you factor all of the programs he's arguing for. And once you realize that his top-tier tax rate changed from 15% (capital gains) to 54%, you start to wonder if Bernie's plan already goes too far.

I mean, he'd probably have to increase taxes to 60% or something to actually have a sustainable budget. Which is fine, his tax plan already is such a dramatic increase that my eyes begin to glaze over. The problem is that its such a huge new tax burden (including new ways of taxing people: like the financial transaction tax) and it still doesn't actually cover what he wants to do.
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Re: 2016 US Presidential Election

Postby sardia » Mon Mar 07, 2016 6:23 pm UTC

Mighty Jalapeno wrote:So what is your option for getting rid of the deficit without cutting essential programs or increasing tax revenue?

Assume aka pull out of ass, the multiplier effect of anything you're doing is really really high. And like magic, the budget numbers work. For example, assume the country will grow at 10%a year because of your plan or assume your tax cuts will have a 20 to 1$ return. I may sound crazy, but that's how the politicians are making their proposed books work out to "reasonable".

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Re: 2016 US Presidential Election

Postby Thesh » Mon Mar 07, 2016 6:25 pm UTC

Inflation is well below target and deflation concerns are real, so I think worrying about decreasing the deficit now is kind of silly. That doesn't mean you will get anywhere by decreasing taxes for the rich; I'm of the opinion we should increase taxes for the top 20% by $200bn, cut taxes for the bottom 80% by $100bn (starting with reducing the bottom tax bracket to 0%), and increasing infrastructure spending by $200bn to increase cash for the poor and middle class and directly create a high demand for labor.
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Re: 2016 US Presidential Election

Postby Tyndmyr » Mon Mar 07, 2016 6:31 pm UTC

KnightExemplar wrote:
Mighty Jalapeno wrote:So what is your option for getting rid of the deficit without cutting essential programs or increasing tax revenue?


Increasing tax revenue. The problem with Bernie's plan is that he doesn't increase it enough, once you factor all of the programs he's arguing for. And once you realize that his top-tier tax rate changed from 15% (capital gains) to 54%, you start to wonder if Bernie's plan already goes too far.

I mean, he'd probably have to increase taxes to 60% or something to actually have a sustainable budget. Which is fine, his tax plan already is such a dramatic increase that my eyes begin to glaze over. The problem is that its such a huge new tax burden (including new ways of taxing people: like the financial transaction tax) and it still doesn't actually cover what he wants to do.


I suspect the reason nobody has yet tried the "raise taxes a crapton to end the deficit" is because the voters do not actually want that. I mean, it's a pretty obvious solution, if that's your goal. Essentially every politician ever has to have thought of it.

Taxing the deficit away is simple, and would work, but would be horribly, horribly unpopular as a plan, because people do not value abstract long term financial theorizing nearly so much as they do other things, such as their more immediate financial well being.

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Re: 2016 US Presidential Election

Postby Thesh » Mon Mar 07, 2016 6:33 pm UTC

Taxing away the deficit could potentially send us into recession anyway. It's just not sound policy.
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Re: 2016 US Presidential Election

Postby Yakk » Mon Mar 07, 2016 6:41 pm UTC

Taking takes money out of circulation in the general economy. (note that the taxed money can be spent: this is a separate step). This is deflationary.

Paying off a bond (or having a bond not roll over) with tax money turns a long-term savings asset (government debt, which returns interest) into cash. This is inflationary.

Cash is worthless. People who owned bonds probably want a safe place to park their assets that is better than cash. So this will lower government bond yields until the marginal purchaser buys something else they deem has more return (corporate or state bonds, mortgages, stocks, real estate, whatever).

The returns on said investments will be depressed due to higher taxation (as we tend to tax profits, either individual (income) or other).

So you'll get more cash chasing less profits. Asset price per return goes up, which means anything not subject to the above tax increase gets an asset value increase: actually finding things that produce and produce good returns is harder (as higher taxes + more money chasing it), and chasing bubbles is easier (it is really easy to swim with the tide), so money goes into the bubble.

Of course, this is a just-so story. The point is that macroenomics is *hard*, and so is microeconomics. If it was easy, everyone would be a billionaire. Anyone who sells you a simple solution to a problem is full of it.
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Re: 2016 US Presidential Election

Postby morriswalters » Mon Mar 07, 2016 6:46 pm UTC

sardia wrote:Bargaining only works if you're willing to let people die. If you threaten to drive pharmaceuticals into the red by refusing to pay for drugs and prove it with an actual body count, then the drug companies will decrease their prices. Right now, the companies know the US isn't willing to publicly let elderly people die, so the US has no leverage.
Since it has never been allowed exactly how would you know? Bargaining doesn't imply that you will always get your way. But its lack, guarantees that pharmaceutical companies will be able to charge whatever. As has already been demonstrated, over and over again.
KnightExemplar wrote:The problem with Bernie's plan is that he doesn't increase it enough, once you factor all of the programs he's arguing for.
The problem with his tax plan as stated, is that it has no chance of hell of ever being passed, even by a democratic congress. What I believe is that new spending should be only be allowed if it has an integral guaranteed funding plan which pays for it. Without that, the coffers are a money machine waiting to be abused.

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Re: 2016 US Presidential Election

Postby Quizatzhaderac » Mon Mar 07, 2016 6:53 pm UTC

So they've started running anti-Trump ads here in Florida. At first I though one was an anti-domestic violence ad. It feels kind of weird because I'm used to political ads that negative being obvious BS (like the swift-boat veterans) but the condemning attitudes seem well placed in this case.

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jewish_scientist wrote:All of America put together is >$65,000,000,000,000 in debt! The U.S.'s Gross Debt (how much we owe) to Gross Domestic Product (how much stuff we own) ratio is >104%! The Federal Budget Deficit (amount being spent minus amount of money in the budget) is >$448,000,000,000!*

Can you explain a) why you think that's bad, and b) what those numbers should be?
Looking at the ratio of debt to GPD: They key ratio of 1:1 isn't some special tipping point, but it does provide some sense of scale. There are better comparisons (as was mentioned), such as debt to total capital (18.69 / 225 = 8.3%), interest payments to GDP (223 / 18,700 = 1.2%), deficit to income (439 / 3,337 = 13%), or interest payments to federal income (223 / 3,337 = 6.7%).

Those numbers aren't so terrible, although they've reached the point of being non-trivial. It'd be nice if that 8.3 percentage points was put into actual capital. The deficit to income ratio (+13%) is a little worrisome because it's been positive at all points in the economic cycle, which means the de facto plan is to just keep growing the debt indefinitely. At some point growing the debt relative to the economy forever is obviously unsustainable, and the US political system does seem capable of simply ignoring a problem for decades. I'd much prefer this be addressed before the in-sustainability becomes obvious, because that's likely to be after we cross some tipping point.

There's another relevant number that's really good right now. 1.19%: the ratio of our debt to interest payments. Our long term de facto strategy depends on that number remaining roughly as awesome. But here's three important non-linear effects of our debt that can change this.
  1. The debt is big enough to affect the bond market as a whole and expanding the market means increasing interest rates on bonds.
  2. Decreased confidence means a particular bond needs to offer higher interest rates. This forms something of a vicious cycle because the higher interest rates make getting ahead more difficult for the borrowing party.
  3. The US benefits from the (somewhat justified) belief that US treasury bonds are a magical-can't-possibly-go-wrong investment. This belief is helpful and stable in the short term. The only problem with this is that beliefs change rapidly, and under unpredictable circumstances. In an idealized economy, the vicious cycle in (2) would manifest as smooth geometric increase in debt. Because of this idea, a reduction in confidence will be delayed. When/if it comes there may be something of a bubble to burst. I'm not talking about prep/gold hoarder changes in confidence, just the belief that US T-bills are the second most secure investment in the world.

I doubt that any bubble burst would cause our society to crumble or anything, just that our wake up call might be suddenly having to pay an extra 5% of our budget maintaining the debt.
Tyndmyr wrote:...it's not as if nobody noticed the deficit. It's not really some unexpected surprise, just a routine part of how things work. Nobody is really doing a massive change to THAT, so who cares, really?
Enough people are obviously aware of the deficit/debt on an intellectual level. But in another sense, if a fact doesn't affect any of someone's actions, are they really aware of it?

It's like living in a village with an oncoming glacier. It's not that there isn't plenty of time to react, or plenty of good ways to react. It's that most people aren't willing to address the issue in any way shape or form, and keep building stuff right up against the glacier. My analogy breaks down at two points: First, you are hit by a glacier or not; we're already having small effects from our debt that are growing. Second, glaciers hit at very predictable speeds we can't predict where/ when confidence in T-bills would drop, so I'd rather not be anywhere near there.
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Re: 2016 US Presidential Election

Postby Zohar » Mon Mar 07, 2016 6:56 pm UTC

morriswalters wrote:
sardia wrote:Bargaining only works if you're willing to let people die. If you threaten to drive pharmaceuticals into the red by refusing to pay for drugs and prove it with an actual body count, then the drug companies will decrease their prices. Right now, the companies know the US isn't willing to publicly let elderly people die, so the US has no leverage.
Since it has never been allowed exactly how would you know? Bargaining doesn't imply that you will always get your way. But its lack, guarantees that pharmaceutical companies will be able to charge whatever. As has already been demonstrated, over and over again.

Chiming in with some input from a former Israeli - healthcare there is about 20 times cheaper than here in the US (for instance a specific drug I take costs $85 here without insurance, $4 in Israel, even with my insurance here it's still around $10). An eye surgery I had done in Israel a few years ago cost me exactly zero dollars (all covered by insurance) and even without insurance, my husband went through (different) surgery and paid ~$5500 out of pocket, after insurance.

One of the main reasons there's such a big difference is because Israel's insurance companies do bargain against the pharmaceutical companies. And it's not the only one, many other countries do that same. And yet we don't have a higher mortality rate (at least for medicinal reasons) compared to the US.
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Re: 2016 US Presidential Election

Postby Thesh » Mon Mar 07, 2016 6:57 pm UTC

Yakk wrote:Paying off a bond (or having a bond not roll over) with tax money turns a long-term savings asset (government debt, which returns interest) into cash. This is inflationary.

Cash is worthless. People who owned bonds probably want a safe place to park their assets that is better than cash. So this will lower government bond yields until the marginal purchaser buys something else they deem has more return (corporate or state bonds, mortgages, stocks, real estate, whatever).


It's mostly financial institutions, not people, who hold Treasury bonds, and paying those would likely not be inflationary as the bonds are already treated like cash.
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Re: 2016 US Presidential Election

Postby Dark567 » Mon Mar 07, 2016 7:01 pm UTC

Thesh wrote:It's mostly financial institutions, not people, who hold Treasury bonds, and paying those would likely not be inflationary as the bonds are already treated like cash.
That's true, but it is often with capital provided by everyday people. That savings or checking account you have? Bank is probably putting most of it into T-Bills.
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Re: 2016 US Presidential Election

Postby LaserGuy » Mon Mar 07, 2016 7:27 pm UTC

morriswalters wrote:
sardia wrote:Bargaining only works if you're willing to let people die. If you threaten to drive pharmaceuticals into the red by refusing to pay for drugs and prove it with an actual body count, then the drug companies will decrease their prices. Right now, the companies know the US isn't willing to publicly let elderly people die, so the US has no leverage.


Since it has never been allowed exactly how would you know? Bargaining doesn't imply that you will always get your way. But its lack, guarantees that pharmaceutical companies will be able to charge whatever. As has already been demonstrated, over and over again.


Other countries do this all the time. In practice, I think what ends up happening is that the companies are willing to bargain for less money because they'd rather have a market for their drug rather than no market, and then just up the prices in countries where the government is too stupid to bargain to make up the difference. So, in effect, the US taxpayer (primarily) is subsidizing all pharmacare programs of a good portion of the rest of the world.

There's other levers that countries can pull if companies aren't willing to play along--in the extreme case, they can refuse to honour the drug companies' patents and let local generic companies make them for a fraction of the cost. This is pretty much the standard practice in India.

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Re: 2016 US Presidential Election

Postby Zohar » Mon Mar 07, 2016 7:42 pm UTC

LaserGuy wrote:So, in effect, the US taxpayer (primarily) is subsidizing all pharmacare programs of a good portion of the rest of the world.

How... does that make sense? If a company isn't making a profit in one country, why should they sell there? Obviously the companies are still making a profit, regardless of how much more profit they're making in other countries.
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Re: 2016 US Presidential Election

Postby Thesh » Mon Mar 07, 2016 7:44 pm UTC

The argument is that most of the costs are in R&D, not manufacturing. So if the R&D costs are recouped in the US market, then sales outside the US are almost pure profit.
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Re: 2016 US Presidential Election

Postby Quizatzhaderac » Mon Mar 07, 2016 7:46 pm UTC

It makes a marginal profit there. Which is to say the cost of manufacturing, shipping and marketing the medicine there is less than their income. They are not necessarily able to recoup the research cost there and have to do so in other markets.
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Re: 2016 US Presidential Election

Postby Zohar » Mon Mar 07, 2016 7:54 pm UTC

That would make sense if the costs of drugs that have been around for 30 years and bought by different companies two or three times in their lifetime were the same in Israel and the US. But they're not - the drug I mentioned ($85 in the US, $4 in Israel) went to market almost 20 years ago, I'd be surprised if they haven't broken even by now. We all know about Shkreli raising costs of medicine hundred-fold after purchasing it, and he's obviously not the only one doing it. Not to mention, a lot of drugs aren't developed in the US nor marketed primarily toward the US. They charge that amount of money in the US because they can, not because they need to to stay afloat.
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