Biden brings the goods again.

You realize that many of the calculations showing blue states “pay more” and get back less includes SS and many retires retire to red states to collect SS and no longer pay large amounts of taxes right?

 

That’s for clearing that up..

You first post wasn’t clear that you were talking about what “states pay to the Feds”

 

we spent quite a bit less during the Clinton years.

 

Robin Hood is alive and well. What program has been “cut” in the last 50 years? Likely none.

The budget is currently $100 million for XYZ program.
New budget projects $110 million for same program.
Republicans argue to only increase program by $5 million, resulting in $105 million budget but a $5M increase instead of a $10M increase.
Headline next day: Republicans cut key program by 50%

Kabuki theatre all. Politicians, media, social media.
Caveat emptor.

 

They don’t actually have to cut programs to get rid of them, all they really need to do is to stop funding them so they “wither on the vine” as former Speaker Newt Gingrich used to say.

 

Like less than half as much per year if memory serves me correctly.

 

I think spending was around 18% of gdp, which was historically low, primarily due to positive worker demographics and post Cold War “peace dividend”. I think it is now low/20’s percent to gdp once things post pandemic sort out and will slowly rise due to demographics.

 

https://www.cbo.gov/publication/58340

• Spending. In CBO’s projections, outlays in 2022 are 23.5 percent of GDP—less than last year’s total—and they continue to decline in 2023 and 2024 as federal spending in response to the pandemic diminishes. Outlays then steadily increase, reaching 30.2 percent of GDP in 2052. Rising interest costs and growth in spending on the major health care programs and Social Security—driven by the aging of the population and growth in health care costs per person—boost federal outlays significantly over the 2025–2052 period.

 

Yeah the spending as a % of GDP is in my mind a bit of a trick. Spending gets set and then if GDP slumps or crashes it’s a bigger %. Part of the reason we are so in debt.
The other Trouble is the federal budget never seems to go down it grows and grows. That makes it hard to reduce in lean tax revenue times(recessions). As you note in you second post it appears spending as a % of GDP is set to swell due to some of the reasons you mention(increased SS/Medicare outlays being foremost ).

 

No we didn’t. Revenue increased faster than spending increased. Every single Clinton budget was higher than the preceding year including his predecessor’s.

Edit: saw the later posts talking about as a % of GDP. Yes, it was lower back then but it fell by 3% during Clinton’s 8 years because the increases did not keep up with GDP growth. His term started at 20.4% and finished at 17.7% despite spending 27.4% more per year in year 8 compared to year 1.

 

Thanks for confirming what I posted after first denying what I posted. Comparing federal spending on an absolute dollar basis 8 years apart is completely meaningless.

 

This mind trick is the way pretty much any macroeconomist on earth looks at it. You have inflation and population growth. Of course taxes and spending will increase as time goes on.

 

DOA

 

Pesky details...

 

Nonsense. No serious person or media would frame it that way (50%).

It should also be pointed out, the economy grows every year. The population grows every year. Thus, by default, govt spending is inclined to grow. A better gauge to track govt spending over the long term is as a % of GDP. While your 50% number would be misleading, in a 7% inflation environment, it’s possible a 5% increase would actually be a “cut” of govt services, and it wouldn’t be misleading. Actually, that’s pretty much just how economists look at real wages. If inflation is 7% but your pay increases only 5%, you actually fell behind by 2%. In terms of govt, if they had to increase pay keep with inflation (which they do), then if the budget is less than inflation (5% vs 7%), it’s quite likely that would represent a cut in services. All other things being equal.

edit: guess i_boy beat me to it above.

 

Pro tip for THFSG. Politicians red or blue view any legislation first and foremost thru the lens of does this help or hurt my chances at re-election, not debt or deficit or what may be 'good' for the country...period, end of story, you're welcome.

 

While that’s true often the “projections” ignore any slow downs in growth which we know happen.
While is hard to predict Black Swan events we also know they happen as well.
Wars, pandemics, capital market issues, etc

 

I had to google that word. Interesting the example usage they give. Apropos to this thread.

derp
/dərp/

INFORMAL
exclamation

1. used as a substitute for speech regarded as meaningless or stupid, or to comment on a foolish or stupid action.
   "Lower tax rates and far lower job creation. Derp"