16 thoughts on “We Need Spending Cuts”

  1. I wouldn’t like to depend on a majority vote of economists. Economics is a corrupt discipline. Economists are rewarded for justifying statist redistribution of wealth with sophistry just as NASA engineers are rewarded for justifying an SDLV with sophistry.

  3. Actually it’s not a majority of economists but a majority of the members of the NABE, which only has 250 members. Now if it was a survey of the members of the AEA (18,000 + members) I would be impressed. As with surveys it’s important to read the fine print before making sweeping statements.

    To put it another it’s like taking a survey of SFF members and finding a majority are in favor of CCDev.

  5. It’s still a sample size over 100 and the question seems straight forward enough so it shouldn’t through the standard deviation too out of whack.

  6. “while 37 percent said they favor equal parts spending cuts and tax increases.”

    I wonder what they think the effects on the economy would be of a $500b a year tax increase. Rolling back the Bush tax rates on the top bracket is only supposed to bring in something like $70-100b a year.

  7. Some finance stats from 2010:

    US GDP = $14.5 trillion (a)
    Federal income tax revenue = $2.16 trillion (b)
    Federal spending = $3.618 trillion (c)

    (a) http://en.wikipedia.org/wiki/Economy_of_the_United_States
    (b) http://en.wikipedia.org/wiki/United_States_federal_budget
    (c) http://www.heritage.org/research/reports/2010/06/federal-spending-by-the-numbers-2010

    Doing the math, 2010 private GDP = $10.89 trillion. Taxes = 19.83% of private GDP, or $14.9% of total GDP. Not knowing how much of those tax revenue comes from public-sector activity, I can’t calculate the ratio between private-sector-generated fed tax revenues and private-sector GDP. But I know it’s somewhere between 15 and 19 percent.

    The 2010 deficit was $1.5 trillion (c). To have erased that budget with tax hikes alone would have required raising taxes by 69.4% (1.5 / 2.16), or over 10% of the overall GDP. How could any economy survive that kind of a jolt?

  8. Josh,

    The members mostly work for Fortune 500 firms. Asking them a question on raising taxes is like asking a Tea Party rally if President Obama has done anything right. Membership in the group is a form of self-selection so all it says is that economists who work for large firms don’t think their taxes should be increased. Actually, the amazing thing is that so many did feel taxes needed to be increased. I am sure you wouldn’t get 37% of Tea Party members to claim that President Obama has good anything right as President 🙂

  9. Alan,

    [[[Not knowing how much of those tax revenue comes from public-sector activity, I can’t calculate the ratio between private-sector-generated fed tax revenues and private-sector GDP. ]]]

    You already answered your question. The total GDP includes government spending and private spending. The private GDP is minus the amount the government is spending. So the percentage of taxes coming from government spending would be roughly equal to the percentage of the GDP from government spending.

    i.e. government employees have the same tax brackets as private industry ones.

  10. I’m still baffled as to why government employees pay income tax. It’s just the stupidest idea in the world. Am I missing something? Is there any sensible reason for the government to withhold tax from an employee and then give it to – itself?

  12. The members mostly work for Fortune 500 firms

    Thomas, your fear and loathing of the Tea Party is impeding your judgement. There is a good reason why one would ask such a question of economists who work for Fortune 500 companies…those companies have made sufficiently good economic decisions over a sustained period of time to be ranked among the 500 most profitable companies on the planet.

    I am sure you wouldn’t get 37% of Tea Party members to claim that President Obama has good anything right as President

    I am sure you wouldn’t get 37& of Americans to claim that President Obama has done anything right as President. There, fixed that for ya.

    You just can’t get over that Tea Party, can you? Why do you give them that much control over your life?

  13. Is there any sensible reason for the government to withhold tax from an employee and then give it to – itself?

    Maybe it is so that civil “servants” can claim they pay taxes too.

  14. My wife is a federal employee. Working for the government doesn’t privilege her over people who don’t.

    That’s why she pays taxes.

  15. The members mostly work for Fortune 500 firms.

    Yes, we can’t trust them because they work for businesses. Everyone knows that only government economists can be trusted because the consequences of error are so severe.

    /sarc

Comments are closed.