From a 2013 Baltimore Sun piece, “Cut tax breaks, not food stamps”, how U.S. executives can save more in taxes in a single dinner than poor families can receive in food stamp money in a month:
Imagine that the tab for dinner and drinks for 10 executives comes to $1,600. Current tax law allows companies to deduct half of the cost of business meals — in this case, $800. With a corporate tax rate of 35 percent, each dollar of deductions yields 35 cents of tax savings — so that $800 deduction saves $280 in taxes. This means one dinner for 10 people provides more public food assistance than the $279 an average household receives in food stamps for the whole month.
But somehow we can’t possibly afford such programs.
I suspect I’m going to have a lot more to say on this particular topic of tax savings that cost more than social program expenditures in future posts and episodes of the radio show. Particularly after I started reading through various Corporation for Enterprise Development (CFED) reports on tax subsidies to the wealthy, including their 2014 report “Redeploying $540 Billion in Federal Spending to Help All Americans Save, Invest, and Build Wealth” (PDF – updated link). Spoiler alert: Hundreds of billions of dollars in revenue is lost each year to Federal tax credit programs disproportionately (and needlessly) benefiting wealthy households.
Nate and Greg join Bill to talk about the lawsuit alleging the NCAA violates anti-trust laws, Chuck Hagel’s reshaping of the U.S. defense priorities through budget changes, and the Crimean annexation referendum.
A majority of the House Republicans (169 of them) voted in favor of the Ryan-Murray budget deal in December — a deal which was not debt-neutral in the short term — but today only 28 of them voted to raise the debt limit.
I think these people must have been hit in the head too many times or something. You can’t vote through a package that increases the debt and then vote against raising the debt limit to accommodate that increase you already approved.
The debt ceiling is a limitation set by Congress on the executive branch’s ability to borrow money to pay for expenses Congress has already authorized. Failure to raise the debt limit does not prevent these authorized expenditures happening because the executive branch is constitutionally required to spend the money Congress has ordered to be spent.
Again, no new money is being spent when the ceiling is raised so this doesn’t somehow rein in the spending. It’s merely a cap on the ability to borrow to pay for expenditures Congress already directed the executive branch to make.
To recap: Six times more House Republicans voted to raise the debt itself last year than voted to raise the limit on that debt today.
Thank goodness the Democrats in the minority were allowed to vote through a debt ceiling increase in the absence of people who can add two and two.
Word on the street is that we’re supposed to be excited about the not-yet-passed budget deal between Democratic Sen. Patty Murray of Washington and Republican Rep. Paul Ryan (the 2012 VP nominee) of Wisconsin.
Not because it’s a good deal. It’s still bad on its internal merits, relative to the fiscal direction we need to take the government and the economy. It’s being hailed as a good deal more because:
it’s relatively long-term (through fall 2015, not another short fix),
and it’s not quite as horrendous as the 2011 Budget Control Act, known commonly as “the sequester.”
The latter was a haphazard across-the-board slash-and-burn measure, rather than a thoughtful targeting that took into account economic conditions. This is a somewhat more considered set of cuts that partially considers economic conditions.
The budget deal that Sen. Patty Murray (D) and Rep. Paul Ryan (R) announced Tuesday night could be good news for the U.S. economy in 2014. Not for what it contains. Rather, for what it doesn’t contain — and for the fact that it exists at all.
In other words, at a time of high unemployment, falling deficits and low interest rates, budget-cutting is still making the economy worse than it otherwise would be. But with this deal, Washington policy will be less counterproductive than it otherwise would be.”
Congress really seems to be facing some “soft bigotry of low expectations” from the American public and media these days. But I’m not sure why we’re supposed to throw a parade when they fulfill their minimum required duties — such as passing budgets and funding the operations of our national government — like they’re supposed to (and kind of still do a bad job even when they do that).
I understand that it’s seen as “progress” that we’re close to getting an actual budget passed for the first time since 2010 — though let’s not count our chickens before they’re hatched — but it’s a dangerous path to travel too far down because it both emphasizes value in reaching any deal no matter how bad, and because it only encourages marginal cooperation rather than actually policy engagement by the Republicans.
We’re getting a deal that will continue to put a major drag on the economic recovery — just a little less of one — and we’re still making huge cuts in vital areas. Is it better than nothing or further artificial fiscal crises? Probably. But not by a lot.
This video was on the front page of Daily Kos mainly to highlight what the author saw as betrayal by Sen. Evan Bayh on FOX News, where he explained why he planned to vote against the Federal spending bill that runs budget programs. I’m not, however, posting it here for that reason, as you’ll read below the video.
If he and other deficit hawks stopped for a moment to consider what they are actually saying, they might realize they were making the case FOR increased deficit spending. He cites the Civil War and WWII as the only times when he thinks the deficit-to-GDP ratio was higher than now (Bayh thinks it’s 12% of GDP right now, and by the end of WWII it was over 100% of GDP).
Ok, setting the Civil War aside because that brings up unrelated issues, let’s examine the issue of citing World War II deficits. Right now, we’re in a major recession. It’s the worst since the Great Depression (1929-1942ish). Now, we trundled along from 1929 to the US entry to war worrying about deficits and not spending too much compared to the national GDP, which was much smaller then than it is now. No amount of New Deal programs worked until 1942, when the New Deal went on Allied War Effort steroids. That doesn’t mean the New Deal failed because it was useless, it means it didn’t succeed because it didn’t go far enough.
World War II came along and we went WAY into debt and spent at a federal budget deficit exceeding the entire gross domestic product of the United States. This money went to buy and build weapons, pay factory workers, expand the bureaucracy, pay soldiers, overhaul the manufacturing industry, and increase government control over the American Total War Economy. Our long malaise and stupor finally broke and we emerged out the other side of the war on an economic crest (which temporarily dampened as spending and price controls were slashed rapidly by a Republican-run Congress). But the Great Depression was finally over and we didn’t go back to it. Without the extreme wartime spending, though, it’s probably safe to say the Depression would have continued longer.
While the debt was never entirely paid off, the deficit and debt levels were both brought reasonably quickly back under control, and they largely remained that way for the rest of the 20th century. By the time President George W. Bush took office, we were still paying down the national debt, but the spending was close to par with the revenue. No harm done.
Obviously, in the very long run, World War II-level spending would be unsustainable, but it was only meant for the short-term. Evan Bayh clearly makes an exception to his deficit concerns “rule” when he cites World War II…which came after/during the Great Depression and ended it permanently. That means that he knows it’s critical to act by massive government spending for a few years. There are exceptions to his rule, and he knows it, but doesn’t connect the dots.
Aren’t we in exceptional times right now?
This post originally appeared on Starboard Broadside.