Free Markets, Free People

# Simple Math

Let’s take a minute and look at some simple math about the Federal Budget. Just as a mental exercise to keep some things in mind as we approach the fiscal cliff.

The 2012 Federal budget—a word I use very advisedly, since there wasn’t an actual, you know, budget—as enacted, spent a total of \$3.59 trillion.  Of that amount, total mandatory spending was \$2.252 trillion. Discretionary spending, i.e., those things in the federal budget that can be arbitrarily changed without changing federal law, was \$1.338 trillion. So, 63% of expenditures is mandatory spending which can’t be touched without changing Federal law.

On the revenue side, when you tote up all the taxes, excises, fees, etc., the Federal government collected \$2.469 trillion. So, in 2012, once mandatory entitlements were covered, there was a grand total of \$217 billion to fund the entirety of the remaining Federal government. The result was a deficit of \$1.1 trillion.

So, to boil it down to the simplest terms, our current revenue is just enough to cover our mandatory spending, and about 1/3 of the defense budget. Everything else is funded solely through deficit spending.

When the Bush-era tax rates are raised in January, we will finally stick it to those rich SOBs and get the money they owe us. That will provide a massive influx of tax revenue in the amount of…uh…\$42 billion in 2013. By the Democrats’ estimate. Which means the deficit will be slashed from \$1.1 trillion to \$1.058 trillion.

Ta da!

Every little bit helps, I guess.

Assuming the economy grows, and revenue keeps pace with the increases in mandatory spending. Which I’m not sure I’d bet a lot of money on.

~
Dale Franks

## 38 Responses to Simple Math

• But I was told repeatedly that the Bush tax cuts only benefited the wealthy.   Was I lied to?
Just for fun:  Obama should raise taxes on the middle class.
http://blogs.reuters.com/great-debate/2012/11/08/obama-should-raise-taxes-on-the-middle-class/
Note: that article has holes in its logic big enough to turn the 7th Fleet around in.
For example:  If it does create a recession then revenue will most likely go down.  And if it represents a hardship on the middle class in order to support a safety net for the poor then more of the middle class will find themselves in that safety net.  It is a negative feedback loop.
Econ101, the legacy media fails at it.

• When the Bush-era tax rates are raised in January, we will finally stick it to those rich SOBs and get the money they owe us.
Assuming, of course, they don’t just spend some of that money hiring bankers, accountants, and tax lawyers so they hold onto it anyway.  I’m sure any that hadn’t already were on the phone Wednesday morning doing just that.

• Right now is 100% of SS revenue going toward benifits or is some portion still being double counted as it is also spent as general revenue?

Just trying to get a feel for that deficit, in case it is higher then reported.

• They have been cashing in some of those IOU’s in that cabinet down in West Virginia for at least the last 3 years.  There is no money to go into Al Gore’s “lockbox”

• Who is Bryan Pick?
If this site is going to become a “we must become the idiots to defeat the idiots” type place, count me out.

• Let a thousand flowers bloom.

• Good lord Rick … the man put a few controversial ideas up, nothing more. They’re think pieces. Unless you’re satisfied with the status quo – and that’s what this last vote was, a vote for the status quo – someone needs to be popping ideas out there that at least get people thinking. You may not agree, but instead of throwing up your hands and walking away (and thereby guaranteeing the continuation of the status quo) muster a cogent argument against the ideas. Who knows, in the process of the debate an idea may pop out that everyone can live with. That’s kind of their purpose.

Btw, Bryan has been an author here for almost a decade. And we’re glad to have him.

• “someone needs to be popping ideas out there that at least get people thinking”

It would help if the ideas were not based on false assumptions and faulty logic. That isn’t constructive, that’s recreation.

• Well then point out the flaws and dazzle us with your perfect assumptions and faultless logic.

• Several of us did, and got called names for it.

• We have been pointing out the flaws.

“your perfect assumptions and faultless logic.”

Please. I have been here long enough that we both know perfection and flawless ain’t in my job description.  To be sure*, we can both cite examples, though they might not be the same ones (heh).

* How Erpish of me. Speaking of which, I guess I was wrong about him showing up within 48 hours to gloat. He must have matured.

Nah.

• Anyone can point out flaws … what’s your solution? So far all I’ve seen is full speed ahead, and damn the torpedos that just sunk the last nominee.

• Some of us are waiting for good data and other information, McQ.
SOME of us are more deliberative thinkers, and find Pick’s bullshit less than useful.
Some of us…

• Really? Sort of interesting to see you put yourself in that category.

• Gee, I’d feel really bad at that, except for two things…
It happens to be true of me.  I make a living at it…
and you and I agree so often.

• You may believe that, but I’d guess others would disagree. And they’d most likely be called “morons” for doing that, huh?

• Um, no.  As to both your baseless assertions.  In fact, if you actually READ my posts…with Tom Perkins, for instance…you will find you are 180 degrees off base.  I ascribe that to your temper speaking.

• Then you should be able to cite an example.  Right?

• An example of you calling people a “moron”? Really?

• No, McQ.  I use it as a short-hand and admittedly dismissive means of responding to nonsense.
I reserve it to a select few people here, including Tad, Erp, Poque, and Citizen Whatever, who you SEEM to hold in the same low esteem.  I don’t think I applied it to Pick, who I don’t put in that category.

Yeah.  Outside that select population.  Go!

• Sorry, I don’t find it appropriate for any population. I find it offensive, juvenile and non-responsive. And if what I hear in a whole bunch of emails that have urged me to ban you (for quite some time now, btw … I have quite a collection), many others do too. One of the reasons we started this blog was so reasonable people could discuss controversial ideas without being subjected to abuse from those who disagree. And abuse, as I’m sure you’re aware, isn’t just confined to the word “moron”.

That’s because the whole premise upon which the authors of this blog base their ideology is controversial. We know that. So we’re kind of in tune with how that sort of abuse works, trust me.

Have a strong opinion? Fine. Want to express it with passion? No problem. But belittling others who attempt to do the same because you disagree isn’t what I expect from a reasonable adult who believes others have the same right as he or she to freely express their opinion. Somehow Elliot, for example, seems quite capable of gutting Erb’s pseudo-arguments without resorting to name-calling or dismissive abuse. I just ignore him. Others seem to manage it with humor or even a little sarcasm. You don’t have to be a choir boy, but it would be nice if you at least didn’t cross that line where the obvious intent of the remark was to belittle and humiliate.

Maybe it’s my fault for not stepping up before now. I mostly try to stay out of the comments. But given this latest outburst, I’m damn tired of it.

• Golly, McQ, the burdens you have borne for me.
Let me suggest this: I will call a liar “liar”.  I will term someone like Tad a moron, because they are.
You can recommend to your email correspondents who take offense that they direct their comments to me, instead of behind my back.
All honest and above-board.  Man-to-man, so to speak.  AND you are relieved!  See…?

• You do what you want Ragspierre, because that’s the type person you are … but be aware, everyone knows it and weighs what you say accordingly.

• Some time in the next few days, McQ, read yesterday’s threads again.
I think you’ll find you engaged in a little fit of pique.

• “Anyone can point out flaws … what’s your solution?”

Almost anyone. And I have no solutions. I very seldom (I almost said never, heh) pretend to have a solution to any particular problem. Some problems don’t have a solution. some do, and some only have a choice of two or more imperfect solutions. Ask me a particular question and I will answer it. Or, if I don’t want to spend the time doing what I would consider to be the necessary homework to propose even a tentative solution, I will decline on the grounds of ignorance.

• Where does sequestration get us? I think it only cuts 500 billion. Still not enough, but maybe enough to show trajectory.
Obama is going to demand a lot because he has sequestration in his pocket. He hates being on the hook, so I bet he sets up negotiation to fail so he can blame sequestration on the GOP.
Also, we don’t need to cut the full deficit. You can run a deficit slightly under GDP growth. So there is that.
But I don’t see how you cut spending and raise taxes and don’t get a recession either.

• “I think it only cuts 500 billion.”

In which case we will still have a deficit of over \$600 billion, and will still be spending more, and have a bigger deficit, than when O came into office.

“But I don’t see how you cut spending and raise taxes and don’t get a recession either.”

Easy. We just have another stimulus package. I actually heard some political hack seriously suggest that on the radio yesterday. I almost ran off the road I was laughing so hard.

Personally, I think all the hysteria about sequestration is just that, hysteria. The political class is terrified they will have to make an actual decision.

• What we could do is cut regulation. Obamacare, Dodd-Frank and all the toxic anti carbon energy EPA bullshit. Of course there is no way Obama will gut Obamacare or Dodd-Frank, but he could cut the war on energy.

• Obama is going to demand a lot because he has sequestration in his pocket. He hates being on the hook, so I bet he sets up negotiation to fail so he can blame sequestration on the GOP.

Heh, No bet. Of course that’s what he’ll do.

• “Of course that’s what he’ll do.”

Shoot, that’s ANOTHER hoping kangaroo picture.     Hop Hop Hop.
THAT is as certain as sunrise tomorrow.

• Yes, every bit does help.  When conservative of talking out of one side of their mouths, the analogize it to a family budget—when every little be counts during tightening the budget and being frugal; at other times, they deny this precept.  And reasoned person can clearly see that we cannot get out of this fiscal crisis without increases in revenue, in addition to decreasing spending.

• The tax increase will raise revenue very little, the Donkey party estimate is based upon static analysis. The real increase will be lower, since the rich will minimize their impact and invest less in American buisness.