RP Budget 2013

[MorGrendel]

http://www.ronpaul2012.com/wp-content/u ... caPlan.pdf

For what it is worth, I don't know too many canidates that have ever posted their actual numbers. I guess like it or hate it, you can't argue numbers . . . well, not the numbers themselves just the effects.

I'd be interested in others thoughts, I know there are a few thinks that surprised me.

[MorGrendel]

For fairness, here is Herman's 9-9-9 Plan:
http://www.hermancain.com/images/economicgrowth.pdf
http://www.hermancain.com/999plan

Of note, my Fed Tax was only around 5.5%. Also my State Sales Tax is only 6%, so I don't see any advantage to this plan.

Also, of note, when I first saw this 9-9-9 Plan, I too thought of SimCity:
http://www.huffingtonpost.com/2011/10/1 ... 08952.html
9-9-9, that's sooooo 2003

If you are wondering, I set Res and High Tech Tax at 7.5, Business and Industry Tax at 8.5, and Dirty Industry Tax at 10.5.

Damn, now I want to play Sim City

[Berserker]

I'll start with Herman Cain as he's easy and short

As Jeff mentioned, it really doesn't seem like it would be all that beneficial for us. Although on paper our federal taxes are high, the effective federal tax is low because everyone deducts everything. Remember that today we deduct our education, our interest, our medication, even our children. Under his plan, this all goes away.

Oh and what about Social Security and Medicare? Today we pay a tax for each of these which is separate from the federal/state tax. How will we pay for that under Cain's plan? Will it be extra? Will it be part of the 9-9-9 tax? Will we simply not have social security and medicare anymore?

[Berserker]

A bit on Perry as he actually has a job's plan: Dig Baby Dig! Think I'm kidding? Here it is:

http://www.rickperry.org/energizing-ame ... r-approach

His plan is all about oil. I wonder who pays for his campaign. He basically wants to have major expansions in drilling on the east coast, west coast and Alaska. That's it. Just drill some more and all our problems will be solved..

I too always wanted to go to the beach and stare at the wonderous, tall, gleaming oil platforms out in the sea. Not to mention how pretty they would look all over Alaska. What a beautifully dark plan.

Fun numbers: http://news.yahoo.com/gov-rick-perry-jo ... 00629.html

Moving on..

[Berserker]

Now I'll focus on Ron's proposal. Sorry for the book. I give him props for having a plan with numbers. Also reading through it, it does seem like Ron is pretty consistent with his previous beliefs. Here's my take on each piece of his plan. This is my opinion, right or wrong:

1. Eliminate five cabinets (Energy, HUD, Commerce, Interior, Education)
I find that both unrealistic and a bad idea. He is saying that what these cabinets do can be better accomplished by the private sector. The very real implication is that if you do eliminate them, you must find replacements in the private sector right away. You simply can't just turn off the lights. If you look at each of these departments, they are tasked with doing a whole lot, which if he closes down, will have to continue to be done by the private sector.

I find this choice irresponsible in my opinnion as he doesn't address how he plans to transfer the duties and responsabilities of these to the private sector. And no, you can't just say, shut them down and the private sector will figure it out.

Note that among the responsabilities of these departments is regulating their sector, which I find quite difficult to picture the private sector doing. What business will self regulate itself from the goodness of its heart?

Another thing they do is investment into basic research. Basic research is the research that is at the core of every new technology that doesn't in itself provide profit, but it critical in order to get to a stage that it can be used in a product that does provide profit. Businesses in general do not perform basic research. That makes sense because businesses tend to only invest in research from which they perceive that they can make an immediate profit. Basic research does not make profit. This is why basic research often falls to the gov't to finance and/or research.

As an example, lets look at the Department of Energy and some of the items that the funding from the department helped research:

- The internet
- MRI
- DNA Sequencing

Here are a few more examples from a number of branches of government, which include my previous examples:
http://www.innovationtaskforce.org/docs ... 0Study.pdf

My point with this last paragraph is that if you simply shut these departments down, the funding for basic research that these departments provide is also shut down. You need to replace it, or move it to another location and you can't stop it as that is foolish. It doesn't seem like Ron thought too deeply about the implications of simply shutting down an entire branch of gov't just like that, or if he did, he's not telling.

I don't agree with this plan.

2. Eliminate the TSA
Really? Who will take their place? Will it be a different company in each state, in each airport? Will I feel safe flying out of DC, but fear for my life once I land in Florida because the company there has different guidelines then the one running DC? What about international flights? Will flying to different places have different requirements? Who will define these requirements?

If something should go wrong, how can you mobilize every airport if every airport has different standards of security because they are run by different companies? Standardization is good! When you get rid of TSA, you lose all the standardization.

Who will supervise the companies running security in airports? The governor? The cops? Another private company? Where will the funding come from? State taxes? Will the feds still need to pay up? What if the state is poor and can't afford to hire a competent company to protect the airport?

If the states should control this, how can you guarantee a good national security? How can you possibly claim safety when every airport does whatever they want with no clear baseline or regulations to follow?

I don't agree with this plan.

3. End foreign wars.
I would very much like that too, but I don't think it's going to be that simple. Look at the draw down in IRAQ. We're still getting our people back and the war ended 2 years ago technically.. There are so many factors including ensuring that the places where we "won" will stay on our side, otherwise what was the point of us going there in the first place?

I can only hope, but I don't think this will be achieved in the short term or maybe not even long term. That means it won't actually give Ron Paul the budget spending reductions he expects and factored in his chart.

But props to him for trying to stop the wars.

As a side note, I recall a month or two ago the RNC adamantly saying that Obama's savings claim from the withdrawal of troops from Afganistan are a budget gimmick. How come this one counts then? tsk tsk.

4. Stop foreign aid
We don't give that much foreign aid (44 billion in 2009) compared to our GDP so this won't have that big of a monetary impact on our deb. Of course, any little bit helps.

However I think it will have large negative political impact. We will be perceived negatively by the world. Perhaps we don't care about that, and we can stop the aid, but it will certainly have a negative effect on us and our businesses in the long term. Remember, we are not the only country that gives foreign aid and favor in the world is bought with hard cold green cash.

http://www.census.gov/compendia/statab/ ... n_aid.html

5. Return spending to 2006 levels.
Yes, this may be good, though it's going to be hard as you need to convince congress to cut spending in lots of places. Afterall, it is not the president that legislates, it is congress.

The words "draconian cuts" come to mind which have been very plentyfully used by both sides. And who knows, perhaps congress is correct this time? Perhaps making such big cuts all at one time will destabilize this fragile economy? Perhaps not. I'm not an expert on this, and I'm not sure what to believe at this point..

6. Reduce workforce by 10%
Hmm, so you just fired 200,000 employees, and unemployement went up by another point, and they are all in line for unemployement benefits straining the states even more. Could this happen?

Well, who knows what will happen, as he doesnt actually specify how he wants to achieve these reductions or how long it will take (1 year, 10 years)? How will he choose who gets fired? The 5 departments that get shut down in his plan? Or is this retirement attrition? Will he simply not hire anyone for the next 5 years?

And why 10%? What's the reason behind that number? Are those 10% the bad employees that don't do their work? Are they the ones that work on projects that are meaningless and draining the economy? Did he calculate that the gov't with 10% less employees will run better? Why? Seems very arbitrarily chosen.

One note is that by reducing the work force, you also reduce the amount of work they do! So things that people take for granted may take longer now, or be canceled. The federal employees are people too and they need to sleep sometimes as well..

Again, it doesn't seem to be very well thought out, or at the least, he doesn't provide his reasonings on why he chose this avenue.

7. Lower coporate tax to 15%
Ok, that's good. I agree. However, just lowering it to 15% won't do anything except put us more in debt. Rememeber that any tax cut is a short-term (and potentially long-term) increase in debt!

As long as the loop holes that corporations use to pay in some cases no taxes at all still exist, lowering the corporation tax won't have a positive effect. If you close the loop holes so the corporations actually pay the tax they are supposed to, then it's good that you lower the taxes as you will have increased revenue and lower taxes compared to other countries (the competition) will incentivize businesses to come here.

8.Allows American companies to repatriate capital without additional taxation, spurring trillions in new investment.
Yes.

9. Abolishes the Death Tax.
Yes.

10.Ends taxes on personal savings, allowing families to build a nest egg.
Yes.

11.Extends all Bush tax cuts.
I don't agree at this time. Generally I'm all for lower taxes, but as of late I've decided that I will only agree to lower taxes if the tax code is revamped and the rich and powerful no longer get to use the myriad of loopholes to get out of their taxes (tax deductions for personal airplane comes to mind). Once that is done, sure, lower the taxes.

12.Repeals ObamaCare, Dodd-Frank, and Sarbanes-Oxley.
No. I happen to believe in ObamaCare. I don't want it repealed. Note that if they repeal ObamaCare and Kevin comes back from Australia, he will no longer be allowed to have health insurance. Why? Because he has a pre-existing condition based on which he would be denied healthcare prior to the ObamaCare act passage.

But on a more important note, just repealing is very foolish. There is no way that everything in every one of these bills is so broken that they must completly remove it all. That's stupid. Instead, the parts that are deemed not good should be changed and improved. Ron should have instead said that he wanted to change these bills to something he felt would work, not just simply get rid of them.

This whole get rid of legislation and move on doesn't fly with me because once they repeal nothing will get done. Congress is way too at eachother's throats to get anything this big passed again. No new legislation will replace this one, and we will be back to square one, facing the issues we were supposed to have fixed already.

13. Audit of the Federal Reserve
Yes, it is good to know what they do.

14. Implements competing currency legislation to strengthen the dollar and stabilize inflation.
How? What is this legislation? What are these new regulations? Without details this is just empty air.

---------------------------

I think I got through all of this points. If I missed any let me know.

[Berserker]

I stumbled over Obama's deficit plan from September. I don't know if there is a newer one or any changes to
it. I have not read it yet. I will when I get the chance and comment on it.

http://www.whitehouse.gov/sites/default ... report.pdf

[MorGrendel]

My bad, There was a press conference to go along with the plan. That may go some distance in explaining some details. http://youtu.be/s-2Zs0-N1dA

1. Eliminate five cabinets (Energy, HUD, Commerce, Interior, Education)
I find this choice irresponsible in my opinnion as he doesn't address how he plans to transfer the duties and responsabilities of these to the private sector. And no, you can't just say, shut them down and the private sector will figure it out.

RP does not plan to unemploy all of the people of those departments. The plan would be to combine them with the other cabinets, and eliminate redundancy. No backfill on retirees.

Note that among the responsabilities of these departments is regulating their sector, which I find quite difficult to picture the private sector doing. What business will self regulate itself from the goodness of its heart?

Comic Books and Professional sports come to mind as business that enjoy self-regulation. Do not all new ventures start off as unregulated? Were not oil and automobiles, coal and railroads, heroin and sugar at one time unregulated? Sugar regulations make us pay the most in the world for sugar so that a few people can get rich. Should we always have laws that pertain to how to run a business for a product that does not exist for yet? Can regulation move at the speed of the market, or moreover, at the speed of innovation? I don't think it can. So rather than regulate everything, I would suggest actual punishments for law breakers. Charge Madoff and Lay with treason on the account that they directly destabilized the economy. That will fire a shot across the bow of greed. Business people have no reason to follow regulations (heck, even submit ledgers), because there is no penalty when you get caught. As you propose, "goodness of its heart", is in itself a corrupt idea; regulations have zero effect on law-breakers.

Another thing they do is investment into basic research.

Agree. Govt research is important, and paves the way to innovation.

. . . the Department of Energy . . . helped research:
- The internet
- MRI
- DNA Sequencing

Should we not ask why the Department of Energy is tasked with homeland security, or why the research funding for the Department of Science has little to do our current energy concerns? I agree we need to fund innovations like lasers, even if we have no use for them; however, I can’t help but think that there may be a more logical way to distribute funding. I too was shocked to see whole cabinets dissolved, but after I thought about it for a while and I decided that there must be gross redundancy in govt as cabinets outgrew their initial function and expanded so as to stay relevant. To me this is govt largess. I see no reason why Department of Science and the moneys that fund it cannot be a part of a different cabinet.

Thanks for responding.

[MorGrendel]

2. Eliminate the TSA

Really? Who will take their place? Will it be a different company in each state, in each airport?

You just went to a soccer game (Woot!) and were corralled through security there. That was the private sector. That was not the govt. Crazy, how it still worked. TSA was an overreaction. At that time, did we need heightened security? Yes. Did the airlines require govt assistance? Yes. Is the TSA the only possible security option 10 years later? No. The hijacking worked partly because we saw no danger from within our borders; we will not make that mistake again soon. TSA failed to stop the shoe and underwear bombers, so the question might be asked, is it real security, or just the illusion of security?

What about international flights? Will flying to different places have different requirements? Who will define these requirements?

When you fly into Israel, you, the passenger, are treated different than if you fly into France or Canada. I imagine it is defined and will continue work like it works today. Moreover, there was screening before 9/11, hence why the hijackers chose national flights. International flights are more prepared for the worst.

If something should go wrong, how can you mobilize every airport if every airport has different standards of security because they are run by different companies? Standardization is good! When you get rid of TSA, you lose all the standardization.

By that logic, homogeny is the only solution. Should only people of a certain age, religion, and race fly as they are the only ones responsible enough to do it right? In addition, each state has a police force, and they all figured out a standard operating procedure that allows them to communicate; moreover, as bands tour the country they bring with them their own security which seems to get the job done, no matter which state they are in. Also, why do you assume it is all or nothing? I can see the govt setting standards and saying, “this worked and this didn’t.” Moreover, I see the private sector (see airport operators) hiring the already indoctrinated workforce, so standards should remain the same.

Who will supervise the companies running security in airports? The governor? The cops? Another private company?

The companies would supervise themselves. Owners and managers are not mindless automatons, and they do not need the govt to tell them how to run their day-to-day business.

Where will the funding come from? State taxes? Will the feds still need to pay up? What if the state is poor and can't afford to hire a competent company to protect the airport?

Where does the money come from now? The tax payer. I pay for the security for a mode of transportation I don’t use. Put the costs where they belong. It costs X amount to run an airport, that cost is spread out to all the airlines that rent terminal space, then that cost is spread out to the passengers that buy tickets. I think the airline model is broken. I think it needs to more closely resemble ZipCars or LightBike Kiosks. Does that mean fewer flights to Wyoming and Alaska? Ya betcha.

If the states should control this, how can you guarantee a good national security? How can you possibly claim safety when every airport does whatever they want with no clear baseline or regulations to follow?

Baselines and the TSA are two separate things. Moreover, when a govt agency inappropriately touches a person that casts a negative reflection on our govt. These “touching scandals” wreck our moral legitimacy abroad. The advantage the govt has over private enterprise is that govt agencies generally have carte blanche and are not held to the same penalties as the private sector. This means no one person is ever held responsible for the ills of the system. Private sectors do not have that luxury; if the consumer does not approve, they will take their business elsewhere. Speaking of elsewhere, we use our roads every day, with no call for the TSA to step in, why should air travel be so different?

[Berserker]

Ok, I listened to the youtube and that does explain a few things. For the 5 departments, he does say he wants to move the pieces that he thinks are still important to other departments, and he expects people will not be fired but leave through attrition. He claims it would save 1 trillion.

I would agree to trying to remove redundancy and put together departments that do the same thing so we don't repeat work, but not to completely remove departments if they have work that is specific to them. For example, I do believe the department of education is useful and there is no other department that does that work so completely getting rid of it, I'm not sure I buy. Same with Energy. Perhaps they should merge energy with the nuclear department. That could save some redundancy, but completly removing it, I don't see that either.

I ended up reading a bit more about his plan, and it seems he also wants to do away with the student federal loans.
http://www.politico.com/news/stories/1011/66645.html

However, being able to go to college is very important to being able to compete with the world today. A college education is now what a high school education used to be 20 years ago. It is mandatory if you want any sort of success in life. With college tuition being very high and growing, I find federal loans (which give better terms to students) as a mandatory item to helping improve the quality of our workforce. For him to say that federal loans should not be given to students I find it irresponsible. That alone is a deal breaker for me.

Second, I found that he also wants to allow people under 25 to opt out of social security. He even states that he has not found one person under 25 that wants to pay the social security tax in his youtube video. Of course! Who would want to pay 6% tax on something they won't benefit from for another 40 years? Everyone when they are young and can work expect that they will never need help when they are old. If he gets that passed, there will be no Social Security at all! This program cannot work if only some of the people participate. It either has to be all or nothing.

Social Security was made for the elderly, to provide a safety net for when you retire because the elderly ended up in poverty. Without social security it is estimated that 44% of retirees would live in poverty. That's huge! That means 4 in 10 people will end up in poverty.

This seems to me to simply be a backwards way of getting rid of social security. What happened to trying to fix it, or strengthen it?

Here's some studies on social security and poverty:

http://www.globalaging.org/elderrights/ ... reform.pdf
http://www.americanprogress.org/issues/ ... verty.html
http://www.nber.org/aginghealth/summer04/w10466.html
http://www.socialsecurity.gov/policy/do ... 10/3e.html

[MorGrendel]

3. End foreign wars.

I would very much like that too, but I don't think it's going to be that simple. Look at the draw down in IRAQ. We're still getting our people back and the war ended 2 years ago technically.. There are so many factors including ensuring that the places where we "won" will stay on our side, otherwise what was the point of us going there in the first place?

Why did we go to Iraq again? What did we win? For that matter, why are we still in Germany, Japan, and Korea? It time to say been there, done that. Leaving is simple, you just leave.

But props to him for trying to stop the wars.

End wars. Let’s give diplomacy a try. Pretty sure it was us that installed Hussain, Kaddafi, and the Taliban into power. War and world policing are not a simple science, and we should stop the expensive practice.

As a side note, I recall a month or two ago the RNC adamantly saying that Obama's savings claim from the withdrawal of troops from Afganistan are a budget gimmick. How come this one counts then? tsk tsk.

RP voted against both wars. Also, if the RNC liked RP, they would not run other Republican against him in his own district. BTW, O’Malley just redistricted Maryland and Roscoe Parrish found himself in a much smaller and different district. Kinda like RP. I really despise redistricting.

[MorGrendel]

4. Stop foreign aid

We don't give that much foreign aid (44 billion in 2009) compared to our GDP so this won't have that big of a monetary impact on our deb. . . .However I think it will have large negative political impact. We will be perceived negatively by the world.

It's pretty well documented that much of the forien aid we give goes to the rich and to warlords, not the poor and starving. Our aid perpetuates problems in Africa, it does not help. "Oil for food" is just one example, and it involved the UN Head dipping his hand into the money dish. This is not to say organizations like the red cross are not effectual; moreover, I think their model is far superior.

Will it have a negative political effect globally? Hell yeah, but why to we send food aid to Germany, Japan, and China when they have the money to buy what they need? We should protect our food and water resources and sell a far superior product to a world that has strip mined its natural resources.

When water is scarce and there is starvation here at home, are we not ethically obligated to stop aniquated habits, even if it means we might lose favor in the eyes of other world leaders. A stong leader makes tough choices, they do not continue the status quo.

[MorGrendel]

5. Return spending to 2006 levels.
Agree. But you have to cut, and you have to pick a number, so why not 2006? Reganomics teaches the number should be bigger, like 2000-2001.

6. Reduce workforce by 10%
See video. I think we are good.

7 -10. Agree

11.Extends all Bush tax cuts.
Agree, must get rid of loopholes. I'm not opposed to the tax cuts while the economy is bad, and would not be opposed to paying more if it gets better, so long as the money is spent wisely. Otherwise, I say cut more spending.