U.S. Budget Simulator: Can You Set a Fiscal Policy that will Stand the Test of Time?

[Leoreth]

There were no options to pile into the longships and set sail in search of Frankish booty. Invalid exercise.

This is how the Nordic welfare states are funded.

 

[metatron]

You want to tax people more to provide less? Bold choice.

Erm, that's the point, isn't it?


Anyway. Here's what i did:

• Reduce Troops to 45,000 by 2015
  -$840B
  Renew the Tax Cuts Available at Lower Incomes and Continue AMT and Estate Tax at 2009 Level
  $2,660B
  Grow Sustainable Growth Rate at Medicare Economic Index
  $380B
  Increase Foreign Economic Aid by 50%
  $90B (100%? 150?)
  Expand Veteran Income Security Benefits
  $40B
  Reduce Spending Related to the Nuclear Arsenal
  -$80B
  Reduce US Navy Fleet to 230 Ships
  -$170B
  Increase Homeland Security Spending
  60B
  Reverse "Grow the Army" Initiative
  -$110B
  Enact Increased Transportation Funding
  $260B
  Double Funding on Adoption and Foster Care
  $80B
  Increase Education Funding by $10 Billion Each Year
  $130B (option "per month" missing. seriously: wrong order of magnitude)
  Raise the Normal Retirement Age to 68
  -$160B
  Progressively Reduce Benefits, Protecting Low Income Earners
  -$90B
  Reduce Spousal Benefits from 50% to 33%
  -$20B (how about zero?)
  Increase Years Used to Calculate Benefits
  -$50B
  Include All New State and Local Workers
  -$100B
  Institute a Minimum Benefit
  $200B
  Establish a Public Option in the Health Exchanges
  -$100B
  Increase Medicare Retirement Age to 67
  -$140B
  Block Grant Medicaid and Grow With Inflation Plus Population Growth
  -$300B
  Reform Federal Retiree Benefits
  -$70B
  Reform Fannie Mae and Freddie Mac
  -$30B
  Reduce Farm Subsidies
  -$100B
  Expand Spending on Federal Research & Development
  $110
  Reduce Funding for the Arts & Humanities
  -$10B
  Increase Mass Transit Funding
  $60B
  Raise Tax Rates on Capital Gains
  -$60B
  Sell Certain Government Assets
  -$80B
  Impose a Financial Crisis Responsibility Fee
  -$80B
  Repeal LIFO Accounting Methods and Eliminate Oil and Gas Preferences in the Tax Code
  -$150B
  Enact Carbon Tax or Cap-and-Trade
  -$410B
  Increase Gas Tax by 10 Cents per Gallon
  -$120B (can we make it a dollar?!)
  Enact Five Percent VAT with Partial Rebate
  -$490B
  Impose a 5.6% Surtax on Income above $1 million
  -$540B
  Enact the "Buffett Rule"
  -$160B
  Raise Cap to Cover 90% of Earnings
  -$410B
  Reduce Corporate Tax Rate to 30%
  $410B
  Improve Tax Collection (Reduce Tax Gap)
  -$10B
  Tax Fringe Benefits as Regular Income
  -$80B
  Gradually Phase Out Mortgage Interest Deduction
  -$240B
  Eliminate Life Insurance Tax Benefits
  -$280B
  Curtail the Deduction for Charitable Giving
  -$180B (How about "eliminate"?)
  Make Research & Experimentation Tax Credit Permanent
  $40B
  Reinstate $400/person Making Work Pay Credit
  $530B
  Cut the EITC and Child Tax Credit
  -$80B
  Extend American Opportunity Tax Credit
  $50B
  Accelerate and Modify Excise Tax on High-Cost Health Plans in 2013
  -$60B

That's 64%. I don't freakin care about the remaining four.
Note that i left the bulk of deductions intact and passed on several excellent opportunities to stick it to the rich to the tune of 9 figures.
The Bush tax cuts have to go though. They're just useless and frivolous.

There were no options to completely abolish social security and all other unwarranted federal entitlement programs. Invalid exercise.

The relevant policy "ideas" (using the term liberally here) are frankly pipe dreams based on magic market thinking.
A Medicare voucher for example isn't inherently better than just making a direct cut of corresponding size. The "market" (insert church choir) will not make a X voucher worth 1.5 X. On the contrary.

 

[Emperor Giulio]

I got it to 60%, below is how I did it:

Reduce Troop Levels to 45,000 by 2015-$840B
Allow All the Tax Cuts to Expire, Except for AMT Patches and Estate Tax at 2009 Level$1,130B
Adopt the Bowles-Simpson Fiscal Commission Recommendations for the Sustainable Growth Rate$280B
Cut Foreign Economic Aid in Half-$90B
Expand Veteran Income Security Benefits$40B
Increase Number of Troops by 46,000$80B
Limit Highway Funding and Increase Fees for Aviation Security-$130B
Block Grant Food Stamps and Reduce to 2008 Levels-$180B
Cut Temporary Assistance to Needy Families (TANF) Program-$30B
Cut School Breakfast Programs-$40B
Raise the Normal Retirement Age to 68-$160B
Use an Alternate Measure of Inflation for COLA-$110B
Include All New State and Local Workers (in paying for social security) -$100B
Repeal Insurance Mandate-$330B
Raise Medicare Premiums to 35% of Costs-$190B
Enact Medical Malpractice Reform-$50B
Increase Medicare Retirement Age to 67-$140B
Use the Chained CPI for Other Indexed Programs-$70B
Reduce Farm Subsidies-$100B
Sell Certain Government Assets-$80B
Raise Cap to Cover 90% of Earnings-$410B
Improve Tax Collection (Reduce Tax Gap)-$10B
Cut the EITC and Child Tax Credit-$80B


You reduced the debt to 60% of GDP in 2021, and kept it at a sustainable level through 2030.

Everyone took a punch in the stomach, but other than reducing troops in Iraq and Afghanistan, I was able to expand the military.

That sounds like a good idea for a campaign slogan, "Everyone is going to get a punch in the stomach".

 

[GhostWriter16]

Not until 2027 for me.

My solutions would have been more radical than they allowed though, for instance, an immediate withdrawal from Afghanistan, drastic cuts in... everything, and slashing taxes more than Bush ever could have dreamed of (For just about everyone.)

 

[Murky]

It wasn't too difficult. They need to add an option to tax the rich at 70% or higher. Then add another option to have another 20% added on for years declared to be in crisis for a max of 90%.

We should probably return to New Deal era tax rates until the debt reaches 0% of GDP.

 

[Traitorfish]

Why not just shoot them and take everything?

(tongue firmly in cheek, for the record)

 

[Murky]

Why not just shoot them and take everything?

(tongue firmly in cheek, for the record)

Let's hope it doesn't come to that.

There are several instances where scenes like that happened in history. It usually was during a calamity.

 

[AlpsStranger]

There were no options to completely abolish social security and all other unwarranted federal entitlement programs. Invalid exercise.

Are you describing the simulator or the reality of modern life?

 

[Ondskan]

Tax the people and cut their services!
How to run a country into revolution in by 2020

 

[MagisterCultuum]

I gave up when I saw the first question. A simulator that will not allow you to reduce troop levels to less than 45,000 in 1215 almost certainly does not include many of the kind of fixes that the budget really needs. It is probably just a propaganda tool meant to favor specific policies, and does not deserve to be taken seriously.

If someone finds a simulator that includes options like implementing land value taxes and replacing all the safety net programs with a simple citizens' dividend then I'd be interested.

 

[Emperor Giulio]

I gave up when I saw the first question. A simulator that will not allow you to reduce troop levels to less than 45,000 in 1215 almost certainly does not include many of the kind of fixes that the budget really needs. It is probably just a propaganda tool meant to favor specific policies, and does not deserve to be taken seriously.

http://crfb.org/about-us

The Committee for a Responsible Federal Budget

The Committee for a Responsible Federal Budget is a bipartisan, non-profit organization committed to educating the public about issues that have significant fiscal policy impact. The Committee is made up of some of the nation's leading budget experts including many of the past Chairmen and Directors of the Budget Committees, the Congressional Budget Office, the Office of Management and Budget, the Government Accountability Office, and the Federal Reserve Board.

Oh boy, look at that last contributor, I wonder what the libertarians here are going to say about that.

 

[Skwink]

This is really easy, all you have to do is click the blue ones. Someone tell that to Congress.

 

[GhostWriter16]

It wasn't too difficult. They need to add an option to tax the rich at 70% or higher. Then add another option to have another 20% added on for years declared to be in crisis for a max of 90%.

We should probably return to New Deal era tax rates until the debt reaches 0% of GDP.

Are you kidding me with these insane tax rates?

You are proposing practical slavery to the government when you tell someone they have to give nine tenths of what they earn to the government, it essentially means they work a full day but only an hour of it goes toward their own benefit.

Also, it hurts the economy to tax that high. Discourages investment.

I gave up when I saw the first question. A simulator that will not allow you to reduce troop levels to less than 45,000 in 1215 almost certainly does not include many of the kind of fixes that the budget really needs. It is probably just a propaganda tool meant to favor specific policies, and does not deserve to be taken seriously.

If someone finds a simulator that includes options like implementing land value taxes and replacing all the safety net programs with a simple citizens' dividend then I'd be interested.

To the bold, I know right? Why can't I reduce them to zero, TODAY? That's what I would do anyhow.

What's a citizen's dividend? If they can actually do the social safety net in a way that would NOT get people to argue for restricting people's personal choices to make it cheaper to pay for, I'd be interested in it as a possible compromise.

This is really easy, all you have to do is click the blue ones. Someone tell that to Congress.

 

[MagisterCultuum]

What's a citizen's dividend? If they can actually do the social safety net in a way that would NOT get people to argue for restricting people's personal choices to make it cheaper to pay for, I'd be interested in it as a possible compromise.

A Basic Income Guarantee is a simple social security scheme where every citizen is entitled to the same sum of money from the state without condition. There is no means testing, which reduces bureaucratic administrative costs and prevents the sort of perverse incentives where the poor are afraid to take jobs that don't pay enough to risk losing their welfare checks. It also means that those who don't actually need the money (including billionaires) could claim it too, although there is reason why collecting the funds would have to be mandatory. I imagine that many (although certainly not all) would have too much pride to accept a handout if it was recorded in an easily accessible public registry.


Restricting individual's choices would not be of much use in making the system cheaper, because everyone gets the same amount regardless of their choices. The only individual choices (apart from some people choosing not to collect their entitlements) that would effect the cost of the program are those that change the number of citizen's living in the country. I'm afraid a lot of people probably would use it argue for harsher naturalization laws, but they already use the current welfare system to argue for harsher immigration laws. If parents are allowed to collect the dividends for their children it could have serious implications for family planning, but the current welfare programs do too. In general though, individuals would still bear the consequences of their own bad decisions. The income guarantee would make this a bit easier, but if they has made better decisions it would have been pure profit.


A Basic Income Guarantee could be funded by any form of taxation, but I would not support funding one with taxes on wages or commerce.

A Citizen's Dividend is another term for a Basic Income Guarantee that is funded exclusively through Geoist means, like land value taxes and mineral royalties, rather than through taxing the wages of anyone's labor.

Probably the best known real world example of a Citizen Dividend is the Alaska Permanent Fund, which redistributes a portion of the state's oil revenue to each of its residents.

http://en.wikipedia.org/wiki/Citizen's_dividend
http://en.wikipedia.org/wiki/Basic_income

 

[Murky]

Are you kidding me with these insane tax rates?

The alternative is much worse.

You are proposing practical slavery to the government when you tell someone they have to give nine tenths of what they earn to the government, it essentially means they work a full day but only an hour of it goes toward their own benefit.

No. This would only affect people who, even if they were taxed at 90%, would still be millionaires and billionaires after they paid taxes. Millionaires usually don't have to work hard since by having that much money you can earn more by investing than working.

Also, it hurts the economy to tax that high. Discourages investment.

No it doesn't. One of the most prosperous times was following FDR's and Dwight D. Eisenhower's high tax rates. FDR used the revenues to help end the Great Depression. Eisenhower use them to fund the interstate highways and other critical infrastructure projects. America's golden age was from about 1955-1975 when prosperity was shared by nearly everyone.

 

[Traitorfish]

Are you kidding me with these insane tax rates?

You are proposing practical slavery to the government when you tell someone they have to give nine tenths of what they earn to the government, it essentially means they work a full day but only an hour of it goes toward their own benefit.

Wouldn't calling it "slavery" imply that they are compelled to work whether they like it or not? Which I'm not sure is strictly true of this scenario.

 

[Winner]

I did a few fairly socialist adjustments, boosted investment into education and science (because I believe that's where future revenue is hiding), cut spending on useless foreign wars and macho military toys, and taxed the hell out of the filthy rich. And shifted some responsibilities on the states, so that the state-rightists can have a field day with that.

Problem solved.

(Where is the option to establish European-style public healthcare system?)

 

[Antilogic]

There were no options to completely abolish social security and all other unwarranted federal entitlement programs. Invalid exercise.

I was quite disappointed I could only increase revenues with the limited options available. Why couldn't I see what would happen if I increased the top marginal rate to 55% instead of the Buffet Rule + Surtax max around 45-46%?

Agreed. This exercise sets up anyone not willing to soak the rich to fail. It also does not compensate for increased economic activity and thus, increase tax revenue (regardless of the rate).

"The American Republic will endure until the day Congress discovers that it can bribe the people with the people's money."

Stupid real numbers getting in the way of our rhetoric!

Not until 2027 for me.

My solutions would have been more radical than they allowed though, for instance, an immediate withdrawal from Afghanistan, drastic cuts in... everything, and slashing taxes more than Bush ever could have dreamed of (For just about everyone.)

But that won't work. Even if you have no spending and no revenue (absolutely zero!), you still have the current debt load. Unless you want to default on the current debt too?

No it doesn't. One of the most prosperous times was following FDR's and Dwight D. Eisenhower's high tax rates. FDR used the revenues to help end the Great Depression. Eisenhower use them to fund the interstate highways and other critical infrastructure projects. America's golden age was from about 1955-1975 when prosperity was shared by nearly everyone.

Agreed--we have plenty of data from several different tax regimes to look at, and the history doesn't seem to match up with what the low-tax advocates claim.



(For the record, I got to 55% by 2020. It was largely due to draw-downs in wars abroad, reducing defense spending, holding as many welfare benefits as possible (I added the drug rebate thing, the public option in exchanges, and spousal benefits options), did a few minor policy things like upping education and cutting farm subsidies, and then aggressively raising revenues. And I mean aggressively--I didn't take the VAT option, but that was about it.)

 

[Arakhor]

I managed to slash the debt to 60% as well, though I did have to make some unpleasant choices, whilst still protecting the lower and middle classes as much as possible.

 

[GhostWriter16]

A Basic Income Guarantee is a simple social security scheme where every citizen is entitled to the same sum of money from the state without condition. There is no means testing, which reduces bureaucratic administrative costs and prevents the sort of perverse incentives where the poor are afraid to take jobs that don't pay enough to risk losing their welfare checks. It also means that those who don't actually need the money (including billionaires) could claim it too, although there is noreason why collecting the funds would have to be mandatory. I imagine that many (although certainly not all) would have too much pride to accept a handout if it was recorded in an easily accessible public registry.

Was it a typo that the bolded "No" wasn't in the original quote because that sentence didn't seem to read right otherwise.

That said, I think that might actually be a pretty good solution to the whole thing. I'd vote for it.

Restricting individual's choices would not be of much use in making the system cheaper, because everyone gets the same amount regardless of their choices. The only individual choices (apart from some people choosing not to collect their entitlements) that would effect the cost of the program are those that change the number of citizen's living in the country. I'm afraid a lot of people probably would use it argue for harsher naturalization laws, but they already use the current welfare system to argue for harsher immigration laws. If parents are allowed to collect the dividends for their children it could have serious implications for family planning, but the current welfare programs do too. In general though, individuals would still bear the consequences of their own bad decisions. The income guarantee would make this a bit easier, but if they has made better decisions it would have been pure profit.

Well, I would hope that you'd actually have to be a citizen to be able to collect, right? Or at least a legal resident?

Regarding immigration, I'm fine with relaxing the laws on immigration as long as its feasible to do so but I'm against illegal immigration because they work off the books which means they don't pay taxes and it screws with the market.

I don't want to make it so easy to the point where it will hurt American workers substantially though. If that point doesn't exist, great. I'd also rather not become as packed as China too

I do know you mentioned that "It only hurts high school dropouts and the like." I'm not sure that that's a great argument, since our government should be protecting all of our citizens and not just the more well-off.


A Basic Income Guarantee could be funded by any form of taxation, but I would not support funding one with taxes on wages or commerce.

A Citizen's Dividend is another term for a Basic Income Guarantee that is funded exclusively through Geoist means, like land value taxes and mineral royalties, rather than through taxing the wages of anyone's labor.

Probably the best known real world example of a Citizen Dividend is the Alaska Permanent Fund, which redistributes a portion of the state's oil revenue to each of its residents.

http://en.wikipedia.org/wiki/Citizen's_dividend
http://en.wikipedia.org/wiki/Basic_income

I'll have to look at that because its sounding like a pretty decent solution.

Wouldn't calling it "slavery" imply that they are compelled to work whether they like it or not? Which I'm not sure is strictly true of this scenario.

True, but its very similar.

But that won't work. Even if you have no spending and no revenue (absolutely zero!), you still have the current debt load. Unless you want to default on the current debt too?

I imagine the reprecussions of doing that would be pretty awful, so I wouldn't in spite of the fact that its fundamentally unfair that my generation is going to have to pay for the previous ones' (I'm against borrowing out of principle except in an extreme emergency.)

I get that its going to take time to get taxes down to where they need to be. But we darn right better not add more. The government is spending out of control and they need to learn to do with less. And far less than this simulator will allow for.