Comments on: Charts of the day, CBO testimony edition A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: TFF Fri, 16 Sep 2011 00:16:43 +0000 “Offer to pay the college educations for all doctors and nurses that stay in the profession for ten years, to limit expected future shortages of these professionals.”

Are trained doctors leaving the profession? I know that many are reluctant to enter general practice, due to income disparities between the specialties, but I haven’t heard of any leaving for other fields.

And isn’t the supply constrained primarily by medical school acceptances? There are many more hopeful applicants than seats. Those denied admission may be weaker students, perhaps, but are still generally very bright people.

By: Farcaster Thu, 15 Sep 2011 22:52:01 +0000 These guys can’t seem to get through their heads what the experts tell them over and over: Take action now to reduce future deficits. Do not lower the deficit now.

Since the Republicans have ideological blinders on, they don’t know how to take this advice. And since the Democrats refuse to lead on this issue, we are in a bind.

These are the basic steps; things that reduce future deficits without hurting the recovery today.

1) Gradually raise the retirement age to 70.

2) Reduce the cost of living adjustment formula for Social Security. If the old formula would give 2% inflation, give 1.5%.

3) Offer to pay the college educations for all doctors and nurses that stay in the profession for ten years, to limit expected future shortages of these professionals.

4) Freeze defense and non-defense discretionary spending at today’s levels. Let inflation whittle away at these.

5) Help homeowners reduce their debt, by using Fannie & Freddie to buy mortgages and write them down 30% using printed money. This debt is what is keeping folks from spending.

6) Set a date certain for letting the Bush tax cuts expire on those earning over $100,000. Remove the cap on the payroll tax, which is at 106,800. This brings in revenue from wealthier folks, which has the bare minimum impact.

7) Attack offshoring, via tax and trade policies that do not reward companies for sending labor overseas and pocketing the wage differential. This has killed our jobs engine, which generated 2 million jobs the past decade vs. 20 million in each of the prior 3 decades. Our $650 billion goods trade deficit is 10-15 million jobs, nearly 2/3rds of our unemployment problem.

By: FifthDecade Thu, 15 Sep 2011 18:35:22 +0000 Ignore the war cost label, look at the annual Defence Budget spending and see how it doubled during the Bush years when the public debt doubled in size from $5 trillion to $10 trillion. Granted it’s gone up 40% more since 2008, but Bush had no global financial crisis to fix – he just fancied an unnecessary war in Iraq (nothing to do with 911) and wanted tax cuts.

But of course, the US has never been anything other than a debtor Nation, ever since 1791 according to Wikipedia. Looks like an addiction from where I’m sitting.

By: TFF Thu, 15 Sep 2011 16:43:51 +0000 Also, Danny_Black, note that eliminating a tax deduction is very similar to a tax increase. The biggest difference is that eliminating deductions removes economic distortions while a tax increase creates them. (Separate from the question of whether the distortions are themselves positive or negative.)

It isn’t terribly insightful to observe that massive tax increases could in theory eliminate the deficit. Cut those big four and the federal income tax for my household would nearly double. And many lower-income households (e.g. $50k-$70k household incomes) would see a proportionately greater increase, since their present income tax bill is so low.

By: Danny_Black Thu, 15 Sep 2011 16:01:28 +0000 so over 1 year, that is 500billion. Lets take the fake 3 trillion figure for the war and we get another 430billion per year add it together and you are only another 500 billion more to match the DEFICIT – not the debt.

By: FifthDecade Thu, 15 Sep 2011 02:34:42 +0000 Wow, you people get all those exemptions from tax? Over the five years they add up to two and a half trillion dollars! Take out the Bush era defence budget increases too and that’s close on five trillion dollars in five years. Deficit? What deficit! That could pay off the deficit and make a significant cut in income tax rates as well. Not only that, but by simplifying the tax code you cut the cost of tax collection, and reduce the size of government too.

As for the comment about socialism, Im sure that contributor is getting confused with communism. Socialism is like a wagon train where you all keep your own wagons and goods but work together to cross the mountains, leaving nobody behind; communism is where you all live in a hippy commune and never cross the mountains because you decide the first one across gets an unfair advantage over the others so nobody does anything. I suspect that poster’s idea of a free market economy is where the strongest cattle baron takes everything and shoots everyone else.

By: junkcharts Wed, 14 Sep 2011 22:14:47 +0000 klhoughton: are those people you listed counted in the 16% statistic not in the 9% statistic?

By: TFF Wed, 14 Sep 2011 20:12:16 +0000 “Not sure I understand how you need to “take deductions” to get the benefit of the retirement savings tax break?”

There may well be 25 million people who don’t contribute to retirement accounts at all. I agree that Felix phrased it poorly, though.

“There’s no evidence that it increases saving; much of the academic literature shows that higher income people are simply moving investments they would have made anyway [in taxable accounts] to a tax-preferred account.”

A few thoughts on this point…
(1) The spending of working-class households is likely more sensitive to incentives than the spending of investor-class households. Don’t assume that conclusions based on the one group translate to the other group.

(2) Our total savings exceeded our mortgage balance in 2004, yet 3/4 was locked away in retirement accounts. Only recently has our mortgage balance dropped below our taxable savings. Remove the distinction between “retirement accounts” and “taxable accounts” and we likely would have paid off the mortgage a decade earlier. ESPECIALLY if you simultaneously strip the mortgage-interest deduction.

Definitely worth exploring the economic distortion of these tax policies, but it is also worth questioning whether the distortion might be desirable?

By: klhoughton Wed, 14 Sep 2011 19:19:49 +0000 Who are the 5%? People in transition (between jobs, laid off, leaving or returning to school or the military).

People whose old job paid enough to cover the cost of child care, but now it doesn’t make sense for him to work too.

People who worked for a small business, the LARGE majority of which fail.

People who are trying to start a small business, but don’t have capital or access to it.

People who are injured and/or disabled, and got laid off because of it.

People who are pregnant, and got laid off because of it.

People who worked 90-hour weeks for so long they became physically and mentally exhausted, and got canned for being slackers.

Journalists and others who work in “industries in transition.” (The glories of “creative destruction,” which is rarely the first.)

By: junkcharts Wed, 14 Sep 2011 18:27:47 +0000 I keep getting confused by the notion of a long-term unemployement rate (5% you referred to). Since this chart uses the unemployment rate definition that excludes discouraged workers not looking for a job, etc., how is it that there should still be another 5% who should be unemployed? Who are these people?