Rollback to 2008: How Would It Impact Your Personal Life?

[WhoWee]

With a discussion of a $14 Trillion national debt in the US and the need to raise the debt ceiling, coupled with more than $1.5 Trillion annual deficits scheduled, there is talk of rolling back all spending to 2008 levels. I'd like to ask a question of all PF members.

How would a rollback of US Government spending to 2008 levels impact YOUR personal life - would you be affected in any way whatsoever?

I've considered the question and found that I would not sacrifice any benefits personally. Please discuss actual impacts only 2011 versus 2008 - not a promise of some future benefit that is uncertain.

Would you lose a job or funding for a project or a specific benefit?

 

[Jack21222]

So are you going to leave it to me to go back and see how much federal funding my university was receiving (if any, I assume it got some), then figure out what percentage of that went to scholarships and grants, and then compare that to how it was funded last year, subtract the difference, then divide among the current student population to see how it affected me?

That seems like an awful lot of work on my part.

My point is, it's overly complicated to try to pinpoint individual benefits from federal government spending. In many cases, federal dollars go to the states to spend, and how the states choose to spend varying amounts of money is unpredictable.

For example, if the government lowers funding for highway maintenance, will the state lay off highway workers? Will they do a pay cut, hiring freeze, or something else? Will they fully fund highway maintenance at the expense of another public service? Will the state raise taxes to compensate for the decrease in federal funding?

You're asking a loaded question that cannot be easily answered if at all. Asking lowering government spending will impact anyone individual's personal life is completely meaningless and accomplishes nothing. It's like asking how the velocity of one particular nitrogen molecule is impacted when the air temperature decreases.

 

[WhoWee]

So are you going to leave it to me to go back and see how much federal funding my university was receiving (if any, I assume it got some), then figure out what percentage of that went to scholarships and grants, and then compare that to how it was funded last year, subtract the difference, then divide among the current student population to see how it affected me?

That seems like an awful lot of work on my part.

My point is, it's overly complicated to try to pinpoint individual benefits from federal government spending. In many cases, federal dollars go to the states to spend, and how the states choose to spend varying amounts of money is unpredictable.

For example, if the government lowers funding for highway maintenance, will the state lay off highway workers? Will they do a pay cut, hiring freeze, or something else? Will they fully fund highway maintenance at the expense of another public service? Will the state raise taxes to compensate for the decrease in federal funding?

You're asking a loaded question that cannot be easily answered if at all. Asking lowering government spending will impact anyone individual's personal life is completely meaningless and accomplishes nothing. It's like asking how the velocity of one particular nitrogen molecule is impacted when the air temperature decreases.

Again, let's address actual impacts. Accordingly, it sounds as though your employer would be injured by a rollback and it would eventually impact you negatively - that is the point of the question.

 

[Astronuc]

It is clear that the US cannot keep running annual deficits ad infinitum. It's got to stop sometime, and the bigger the debt gets, the worse it will be when it has to stop. And it will have to stop.

Either we land as gently as possible - or we crash catastrophically.

Federal spending should be dropped back to 2000 levels or less. There should be no off-budget expenditures.

http://www.gpoaccess.gov/usbudget/fy06/pdf/hist.pdf

Standard & Poor gave a negative outlook yesterday on the federal budget and debt.

A cut in federal spending will affect everyone, some more than others, and some directly while others indirectly.

 

[WhoWee]

It is clear that the US cannot keep running annual deficits ad infinitum. It's got to stop sometime, and the bigger the debt gets, the worse it will be when it has to stop. And it will have to stop.

Either we land as gently as possible - or we crash catastrophically.

Federal spending should be dropped back to 2000 levels or less. There should be no off-budget expenditures.

http://www.gpoaccess.gov/usbudget/fy06/pdf/hist.pdf

Standard & Poor gave a negative outlook yesterday on the federal budget and debt.

A cut in federal spending will affect everyone, some more than others, and some directly while others indirectly.

You better be careful - Astro 2012 - has a nice ring to it.

 

[Astronuc]

S.&P. States the Obvious
http://www.nytimes.com/2011/04/19/business/economy/19views.html

Interesting picture on that page, where Ali al-Naimi, the Saudi oil minister, says that the oil market is “oversupplied.” So if the oil market is oversupplied, why are prices continuing to increase. Perhaps there is bottleneck (as in artificial/arbitrary restraint) between the suppliers and consumers.


I would like to hear a candidate suggest that the best way to raise revenue (tax income) is to put people to work, i.e., employed people pay taxes instead of receiving unemployment.

Expenditures on Medicare/Medicaid have to be reduced as does overall health care costs. Health care is cost (economic detriment). However, to reduce cost requires a healthier population. People need to stop eating unhealthy food, and need to start exercising. The nation has to reduce the numbers of folks that develop cardiovascular disease and diabetes.

We need to increase domestic energy production, but without increasing pollution of air and water.

And we need to reverse the chronic trade deficit.

 

[WhoWee]

S.&P. States the Obvious
http://www.nytimes.com/2011/04/19/business/economy/19views.html

Interesting picture on that page, where Ali al-Naimi, the Saudi oil minister, says that the oil market is “oversupplied.” So if the oil market is oversupplied, why are prices continuing to increase. Perhaps there is bottleneck (as in artificial/arbitrary restraint) between the suppliers and consumers.


I would like to hear a candidate suggest that the best way to raise revenue (tax income) is to put people to work, i.e., employed people pay taxes instead of receiving unemployment.

Expenditures on Medicare/Medicaid have to be reduced as does overall health care costs. Health care is cost (economic detriment). However, to reduce cost requires a healthier population. People need to stop eating unhealthy food, and need to start exercising. The nation has to reduce the numbers of folks that develop cardiovascular disease and diabetes.

Perception - especially in the era of sound bites - is a powerful tool.

War in Libya doesn't create an oil shortage in the US. Paul Ryan's Medicare proposal doesn't effect anyone over the age of 55. This is why I posed the question about rolling back to 2008 spending levels - perceptions aside - who (among us) will feel the effects and how?

 

[jtbell]

Federal spending should be dropped back to 2000 levels or less. There should be no off-budget expenditures.

And if taxes are also restored to 2000 levels... voilà, a budget surplus like the one Bush inherited!

 

[Office_Shredder]

And if taxes are also restored to 2000 levels... voilà, a budget surplus like the one Bush inherited!

Is that actually true, or are you assuming the economy is in the exact same state as well

 

[WhoWee]

Is that actually true, or are you assuming the economy is in the exact same state as well

If we rolled back to 2000 levels - Homeland Security didn't exist.

 

[BobG]

I would like to hear a candidate suggest that the best way to raise revenue (tax income) is to put people to work, i.e., employed people pay taxes instead of receiving unemployment.

Expenditures on Medicare/Medicaid have to be reduced as does overall health care costs. Health care is cost (economic detriment). However, to reduce cost requires a healthier population. People need to stop eating unhealthy food, and need to start exercising. The nation has to reduce the numbers of folks that develop cardiovascular disease and diabetes.

We need to increase domestic energy production, but without increasing pollution of air and water.

And we need to reverse the chronic trade deficit.

I think putting people to work was Obama's justification for the tax stimulus bill that increased the size of our deficit. Of course, that bill was padded with enough health care reforms that you really couldn't expect it to raise enough jobs to pay for itself (it was definitely a mixed bag vs being all good/all bad).

And I don't think it's possible for 'the nation' to make people healthier. Individuals generally have to do that for themselves. I guess reducing public health care and leaving the private health insurance industry alone could serve to discourage people from unhealthy lifestyles, since it could directly affect how much they pay for health insurance or whether they could get health insurance at all (waiting until they have pre-existing conditions could be very bad for them).

In other words, a more cold hearted approach to health care could also reduce health costs. Of course, it would have to be a much more cold hearted approach than I think Americans could accept. Part of the cost of health care is that losses due to unpaid medical bills wind up getting passed on to those who can pay. I don't think Americans could accept completely denying health care, including emergency services, to those that can't afford it.

Increasing energy production without increasing pollution requires some radical new technology, as these are generally contradictory goals. However, I guess the net pollution level could be decreased by placing stricter environmental controls on the entire energy industry. That would have the side effect of reducing how much energy people use since stricter environmental controls usually raise the price of energy.

The chronic trade deficit will eventually correct itself even if we do nothing, since accepting a lower standard of living is preferable to being chronically unemployed (i.e. - the cost of American labor will decrease).

Still, it would probably be preferable to encourage corporations to relocate within the US instead of overseas and our tax policies should reflect that. In other words, having corporations outsource to North Dakota is a better option for Americans than corporations outsourcing to India, China, etc.

Or, we can lower the cost of American labor by importing workers (legally or illegally) that will work for lower wages. I guess that wouldn't do much for getting American workers back to work, but it would at least lower prices for American goods.

 

[Office_Shredder]

If we rolled back to 2000 levels - Homeland Security didn't exist.

I'm not sure what your point is. Its budget is only about 50 billion dollars, so cutting it certainly won't solve a trillion+ deficit. And if you're suggesting cutting to 2000 levels is dangerous because the department would be destroyed, Homeland Security absorbed departments and jobs from departments when it was created, so it could still get their funding.

Obviously returning to 2000 levels doesn't mean reset the government to the year 2000, and damn the consequences

 

[BobG]

With a discussion of a $14 Trillion national debt in the US and the need to raise the debt ceiling, coupled with more than $1.5 Trillion annual deficits scheduled, there is talk of rolling back all spending to 2008 levels. I'd like to ask a question of all PF members.

How would a rollback of US Government spending to 2008 levels impact YOUR personal life - would you be affected in any way whatsoever?

I've considered the question and found that I would not sacrifice any benefits personally. Please discuss actual impacts only 2011 versus 2008 - not a promise of some future benefit that is uncertain.

Would you lose a job or funding for a project or a specific benefit?

Is that the basic 2008 spending level or does it include the TARP funds and supplemental spending bills for the wars in Iraq and Afghanistan?

That's not a knock on either (in fact, the net cost of TARP will not be anywhere remotely close to the $700 billion we initially forked out in 2008-2009), but, if we're talking about rolling back spending levels, we should at least be talking about what we actually spent; not some fictional number.

 

[WhoWee]

Is that the basic 2008 spending level or does it include the TARP funds and supplemental spending bills for the wars in Iraq and Afghanistan?

That's not a knock on either (in fact, the net cost of TARP will not be anywhere remotely close to the $700 billion we initially forked out in 2008-2009), but, if we're talking about rolling back spending levels, we should at least be talking about what we actually spent; not some fictional number.

Pre-Tarp and any supplemental war spending - those are one time expenses (supposedly?). You've touched upon a very important point - permanent spending should be separated from temporary spending in any discussion (IMO).

 

[Char. Limit]

If we rolled back to 2000 levels - Homeland Security didn't exist.

Good. Homeland Security is the center of the TSA, the only administration authorized to grope children.

EDIT: And lest you think my claim is unsourced, here's a relevant news article.

http://www.wbtv.com/global/story.asp?s=13526724

 

[ParticleGrl]

It depends on how the roll back is accomplished. The majority of the growth in spending between 2008 and today was medicare (which should underscore the fact that we don't have a deficit problem so much as a health care problem. Costs are bankrupting people with private insurance, and causing tremendous public spending).

How do we spend less on medicare in your proposal? Do we give everyone less service, or not let new seniors in? One of my neighbors recently reached medicare age (although I can't remember if it was 2008 or 2009), and she would certainly be effected if we didn't allow new enrollment in medicare.

Also, people in healthcare would be effected, though I haven't thought out about how. Two of my sisters work in medicine.

 

[Al68]

It is clear that the US cannot keep running annual deficits ad infinitum. It's got to stop sometime, and the bigger the debt gets, the worse it will be when it has to stop. And it will have to stop.

Either we land as gently as possible - or we crash catastrophically.

Federal spending should be dropped back to 2000 levels or less. There should be no off-budget expenditures.

http://www.gpoaccess.gov/usbudget/fy06/pdf/hist.pdf

Standard & Poor gave a negative outlook yesterday on the federal budget and debt.

A cut in federal spending will affect everyone, some more than others, and some directly while others indirectly.

I think you're dead-on: 2008 spending levels are way too high.

If we can't change the climate that is capable of viewing the Ryan budget as "cutting too much", despite the fact that it actually increases spending, continuing the same old game of both parties referring to spending increases as "cuts", do we have any hope of preventing disaster?

And even if we pass something very close to the Ryan budget, and if future congresses stick to it (fat chance), government will be about a third bigger (in real dollars) in 10 years than it is now. Seriously, that's what the GOP has to offer?

We need at least one party to get serious, instead of incessantly saying "we need to get serious."

 

[WhoWee]

Other than possible cuts to (Jack's) university budget - would anyone else feel the specific impact (personally) of a rollback to 2008 spending levels?

 

[ParticleGrl]

Other than possible cuts to (Jack's) university budget - would anyone else feel the specific impact (personally) of a rollback to 2008 spending levels?

As I said, it depends on how the rollback is accomplished. Let's say we cut medicare spending back by restructuring medicare advantage plans- then I would guess you (working in insurance) might be affected.

If we roll back spending by reducing benefits for all, then everyone receiving any medicare benefits would be affected. How many over 65 or on dialysis are on the board? I imagine the over 65 are under-represented on web-boards.

 

[WhoWee]

As I said, it depends on how the rollback is accomplished. Let's say we cut medicare spending back by restructuring medicare advantage plans- then I would guess you (working in insurance) might be affected.

If we roll back spending by reducing benefits for all, then everyone receiving any medicare benefits would be affected. How many over 65 or on dialysis are on the board? I imagine the over 65 are under-represented on web-boards.

Would you be impacted by a rollback?

 

[turbo]

Roll back to pre-Bush spending levels. Keeping wars, bribes to foreign leaders, intelligence costs, etc all off-budget is not only dishonest, it imperils our national security and the financial stability of the world (not just the US). Bush's unpaid-for Medicare drug expansion was expensive, yes, but it pales in comparison to the costs of his wars. Add in tax cuts to the super-wealthy, and the fiscal irresponsibility is staggering.

 

[BobG]

Roll back to pre-Bush spending levels. Keeping wars, bribes to foreign leaders, intelligence costs, etc all off-budget is not only dishonest, it imperils our national security and the financial stability of the world (not just the US). Bush's unpaid-for Medicare drug expansion was expensive, yes, but it pales in comparison to the costs of his wars. Add in tax cuts to the super-wealthy, and the fiscal irresponsibility is staggering.

I could live with supplemental bills to pay for temporary expenses, such as a war, as long as there were a temporary supplemental tax to pay for those expenses that would expire when the temporary situation ended.

But, yes, saying we could have both tax cuts and a war was a bit delusional. (Not to mention the delusion that we could have a war and support Rumsfeld's transformation of the military. Especially during Bush's first term, he was a person that couldn't say no to anyone.)

 

[turbo]

I could live with supplemental bills to pay for temporary expenses, such as a war, as long as there were a temporary supplemental tax to pay for those expenses that would expire when the temporary situation ended.

But, yes, saying we could have both tax cuts and a war was a bit delusional. (Not to mention the delusion that we could have a war and support Rumsfeld's transformation of the military. Especially during Bush's first term, he was a person that couldn't say no to anyone.)

Exactly right. There was absolutely no attempt to pay for the wars nor to even acknowledge the costs of the wars. Bush was a very pliable patsy who wanted to be a "war president" and was easily manipulated by Cheney and other hawks.

Since Cheney didn't divest himself of his holdings in Halliburton and its subsidiaries, he was a major beneficiary of the wars. How convenient.

Now, we are stuck with "how do we pay for this?" Can US voters ever be educated to the point at which they won't vote for candidates that say what they want to hear without parsing the viability of the promises? We can't keep voting in "trickle-down" candidates that cut taxes and spend and spend and pass the costs on to lower-income taxpayers and future taxpayers.

 

[Vanadium 50]

This is not a simple question, for two reasons (and please let's not rehash the Iraq war).

One is that there were line items in 2008 that are now complete. What happens to that money? Once the bridge is built, they don't need another one. We can have endless debates on the most logical way to handle this, but we may never agree.

The other is an even more general "2008 is not 2011". The payment on the debt in 2008 was $261B. The debt held by the public is 85% larger today, so there's an extra $220M that needs to come from somewhere. If it comes out of non-defense discretionary, that's a 35% across the board cut.

The other way to look at it is to ask, what's the deficit if we only return to 2008 spending levels. 2008 had a deficit of $240B (8.3%). To that add $220B (interest on additional debt) and another $280B (income tax revenues fell) and you get a deficit of $740B (26%). That's more than the entire non-defense discretionary budget.

One feature of a progressive tax code that is often overlooked by legislatures and their advisors is that the richer you are, the more variation there is in your income year to year. Income tax revenues become increasingly volatile as they become increasingly progressive. This isn't necessarily a problem - provided that the government builds this into their planning.

 

[ParticleGrl]

The other is an even more general "2008 is not 2011". The payment on the debt in 2008 was $261B.

Also, 2008 was a particularly low year revenue wise, because of the recession. As we recover, GDP will (hopefully) return to trend. Sadly, trend isn't growing as fast as healthcare expenditure, which is the long-term problem.

 

[Al68]

Bush's unpaid-for Medicare drug expansion was expensive, yes, but it pales in comparison to the costs of his wars.

Yes, it does. But both, and the rest of the Bush-era drunken sailor spending, pale in comparison to the massive growth in spending since.

Add in tax cuts to the super-wealthy,...

Even if we accept the most extreme of left-wing assumptions (that the overall economic benefit of lower tax rates is equal to zero), the dollar figure associated with that is still tiny relative to the budget. There is a reason Democrats didn't and won't ever offer a stand-alone tax proposal that increases taxes only on the "super-wealthy": such a proposal would expose their fraud.

...and the fiscal irresponsibility is staggering.

The fiscal irresponsibility during Bush was inexcusable, and overwhelmingly dwarfed by the current fiscal irresponsibility of Obama and Democrats. Why is it that so many people talk as if they are completely unaware of the monstrous increase in spending relative to the already bloated Bush budgets?

 

[ParticleGrl]

Why is it that so many people talk as if they are completely unaware of the monstrous increase in spending relative to the already bloated Bush budgets?

The majority of the increased spending was one time stimulus spending to prop a failing economy up. The increased deficits were also due to dramatically lower revenue. Unemployment is still way up.

Much of the current budget woes are directly related to the worse recession since the great depression.

Its one thing to run a deficit in a depression (revenues are down, but the government still has commitments), its quite another thing to run deficits during the boom period.

 

[Al68]

The majority of the increased spending was one time stimulus spending to prop a failing economy up.

Yes, initially. But what was sold as a one-time stimulus was then added to the annual spending baseline. That's a big part of the problem. They added that to the baseline, then added annual increases, then added other spending increases, and new spending programs, then refer to anything less than all that plus more increases they want on top of it as "draconian cuts".

If the worst happens, it will be mostly because Democrats have been so successful at selling their fraud to the general public. It's not too late to save this country: the fraud of Democrats is the only barrier.

 

[ParticleGrl]

Yes, initially. But what was sold as a one-time stimulus was then added to the annual spending baseline.

What parts of the stimulus were added to the baseline?

If you look at charts you can find here http://www.usgovernmentspending.com/ you'll see that 2009 sending was higher than expected from the long term trend, but 2010 is back near the trend. The reason that the deficit has exploded is mostly the drop in revenue, not massive new spending- apart from the stimulus, the growth of spending of this administration has been near trend.

 

[Al68]

What parts of the stimulus were added to the baseline?

If you look at charts you can find here http://www.usgovernmentspending.com/ you'll see that 2009 sending was higher than expected from the long term trend, but 2010 is back near the trend.

The "near trend" spending increases you notice are increases on top of those stimulus expenditures. That's what I was talking about. We're increasing spending "near trend" over and above the budget that included that "one-time" stimulus spending.

I'm too lazy to research and tell you the details of which parts were added to the baseline. But the big picture is pretty clear: the "trend" is a trend toward insolvency that has existed for a long time. It's just more accelerated now.

And of course revenues are a factor, and you're right that they depend on the health of the economy, ie the tax base. Notice that by today's standards, the deficit problem was all but fixed until the mortgage/banking crisis hit.

What is obviously not true, looking at the numbers, is that the loss of revenue was caused by the tax rate reductions over 10 years ago. Revenues increased every year after that until the recession hit. And a growing economy is the key to future revenues.

 

[ParticleGrl]

The "near trend" spending increases you notice are increases on top of those stimulus expenditures. That's what I was talking about. We're increasing spending "near trend" over and above the budget that included that "one-time" stimulus spending.

No, they aren't on top of those stimulus expenditures, which is my point.. If spending grew at its average rate from before Obama was president, and we never had a stimulus, 2010 would still cost about the same. The biggest reason that spending is growing so rapidly is health care costs. As such, the single deficit reducing measure in the last decade was the health care bill.

What is obviously not true, looking at the numbers, is that the loss of revenue was caused by the tax rate reductions over 10 years ago. Revenues increased every year after that until the recession hit. And a growing economy is the key to future revenues.

What numbers are you talking about? Revenues increase in normal time because GDP grows- but tax cuts can change the rate-of-increase. If you look at the Bush tax-cuts they very dramatically changed the trend. PART of the loss of revenue DOES come from the Bush tax cuts. Much more from the ridiculous unemployment rate we have right now. Also, allowing the estate tax to lapse almost certainly cost a substantial amount of money.

Also, there isn't any evidence that the Bush tax cuts did anything to grow the economy.

 

[Al68]

No, they aren't on top of those stimulus expenditures, which is my point.. If spending grew at its average rate from before Obama was president, and we never had a stimulus, 2010 would still cost about the same. The biggest reason that spending is growing so rapidly is health care costs. As such, the single deficit reducing measure in the last decade was the health care bill.

Now that's just too silly. Too silly for me to bother with.

What numbers are you talking about? Revenues increase in normal time because GDP grows- but tax cuts can change the rate-of-increase. If you look at the Bush tax-cuts they very dramatically changed the trend.

I just looked at those charts again, and I don't think so.

PART of the loss of revenue DOES come from the Bush tax cuts.

Sure, since they included far more than "tax cuts for the super-rich".

Also, there isn't any evidence that the Bush tax cuts did anything to grow the economy.

Are you really going to claim that confiscating capital from capitalists isn't harmful to capitalism?

Sounds silly when it's worded in plain English instead of fraudspeak, doesn't it?

 

[Vanadium 50]

Also, 2008 was a particularly low year revenue wise, because of the recession.

Income tax revenues for 2008 were $1.25T. The highest they have ever been.

 

[mugaliens]

The biggest reason that spending is growing so rapidly is health care costs.

http://www.thirdway.org/taxreceipt" .

As such, the single deficit reducing measure in the last decade was the health care bill.

Not even close.

Much more from the ridiculous unemployment rate we have right now.

It's normally around 6%, but lately has been averaging around 9%. That's not a "ridiculous" difference.

 

[WhoWee]

Roll back to pre-Bush spending levels. Keeping wars, bribes to foreign leaders, intelligence costs, etc all off-budget is not only dishonest, it imperils our national security and the financial stability of the world (not just the US). Bush's unpaid-for Medicare drug expansion was expensive, yes, but it pales in comparison to the costs of his wars. Add in tax cuts to the super-wealthy, and the fiscal irresponsibility is staggering.

OP - would a rollback to 2008 have an impact on you?