Washington Post Fact Checker Questions Paul's plans.

[ConstantineX]

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The individual income tax accounts for about $1.3T out of a total Federal budget of $3T. Removing it would leave you with a budget of $1.7T, the Federal budget of 1999. Your mileage might vary, but not by much.


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See here you talk about income (tax-revenue) in 2008, and that the 1999 budget which would be covered by tax-revenue excluding revenue from the income tax. If your 1999 budget is not adjusted for inflation those numbers dont add up, because 1.7T in 1999 might be =2T now.

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Inflation is irrelevent.

Let's say that in 1999 I spent $100 on food, clothing, and shelter, and another $100 on hookers and blow, for a total of $200 in 1999.

Now, 8 years later, due to inflation, I am spending $200 on food, clothing, and shelter, and another $200 on hookers and blow, for a total of $400 in 2007.

Then I decide I don't need to spend on hookers and blow anymore, and can cave $200, leaving a total of $200 in 2007.

Hence I can return to 1999 spending levels by cutting current spending despite inflation.

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Oh comeon. You are missing the essential argument that one being subconsciously raised when arguing for "returning to 1999 spending levels". Why the hell would we be cared about nominal dollars raised? The argument is about raising the same amount of real wealth in 1999 to fund the government.

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NO IT ISN'T.

Jumping Jesus Christ, how can so many people miss the frigging point so completely? [img]/images/graemlins/confused.gif[/img]

We're talking about cutting a trillion dollars in spending NOW. That leaves us at the same NOMINAL spending level of X years ago when the stuff that we would be cutting NOW was still being bought.

How is this difficult to understand?

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$100 for 1 unit of food, clothing, and shelter, and $100 for hookers and blow in 1999. Now it's $200 for 1 unit of food, clothing and shelter and $200 for hookers and blow in 2007. Inflation (100%), right?

So I cut $200 proportionally from my budget to "return to 1999 spending levels". So now I spend $100 dollars for 0.5 units of food, and $100 for 0.5 units of hookers and blow in 2007.

What I am missing here in saying the government has less real wealth (100% less)?

[Borodog]

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And AGAIN you are playing fast and loose. Tax revenues do not cover spending *right now*. Where does the extra money come from *right now*? Why do you insist on comparing the spending level to *only* tax receipts when that isn't a relevent comparison?

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Of course it's a relevant comparison. The amount of money the government takes in vs. how much it needs to spend isn't relevant to what kind and amount of taxes should be collected? Come on. It's the comparison to the current state of affairs that is fallacious. Ron Paul is planning a revolutionary change (it's on the T-shirts!). He then goes around and justifies it, not on absolute numbers, but on a pay-as-you-go projection, like you would for a 3% cut in the income-tax rates?


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Dude, as far as I can tell your argument against Paul's statements that you could eliminate the individual IT and return to 199X spending levels amounts to this:

3 - 1.3 != 1.7

It isn't hard. Current spending level - individual income tax receipts = spending level from 199X.

This is trivially, obviously true.

The rest of your mumbo jumbo just seems designed to avoid losing an argument on the internets.

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And do you really think the government could finance a quarter-trillion a year (minimum) on an income base of a trillion dollars, most of which is earmarked for social-insurance programs that are themselves projected to head into deficit soon?

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Yes. Do you see why?

You're really missing a much, much, much larger picture. Current obligations of the US Federal government (not debt, obligations) are at least $60T. There is no way that is going to be paid unless the government just prints enough money to destroy the currency. In short, something has to give somewhere, whether you like it or not, no matter who gets elected. Somebody is getting [censored] out of what they have been promised. This is not Ron Paul's fault. What has caused the problem is out of control spending on welfare and warfare, and Ron Paul is the only one not only pointing this out, but that has a plan to actually do something about it. 3 things contribute to out of control spending: taxation, debt issuance, and inflation. The US's credit rating is about to go into the toilet, so that is going to leave taxation and inflation. Paul wants to radically reduce the former and eradicate the latter.

Will that allow the Federal government to continue to consume a quarter of the productivity of the nation? No, but then again that's the [censored] point, isn't it?

So Paul's plan is to reduce the Federal level of taxation by around 50%, which will allow that wealth to be put back into economic recovery. He will do this by saving roughly 40% of current spending. That leaves the current entitlement programs untouched. You would probably also have to freeze benefit levels, although I've never heard Paul comment on this one way or the other. You allow young people to opt out of those plans, which immediately wipes out a large chunk of the projected future obligations.

That still leaves inflation. You have to get rid of the Fed. But that's ok, because the Fed is going away no matter what, whether you want it to or not. The world fiat currency system is unstable and has required multiple radical interventions to save it in the past, and those kinds of interventions (gold dumping by central banks and the IMF for example) are simply no longer available. At least 82% of the world gold stock is now in private hands, and possibly as much as 91%, after 45 years of gold dumping. Even if they manage to avoid a collapse with another massive gold dump, where does that leave them for the next time? Eventually the flight from inflation cannot be stopped by dumping, because there isn't enough gold to dump, and at that time, gold remonetizes, whether you like it or not.

So the REAL question is:

When you can no longer issue debt because the nation's credit rating is shot, and you can no longer print money because the fiat currency system has collapsed, and you cannot tax the remaining productive 2/3 of the population at 100% to pay the 1/3 of the population that are feeding off of them, how do you maintain the system?

The answer is that you can't. So do you try to bring the system down in a controlled landing, or do you let it nose dive into a corn field?

Ron Paul is the only candidate that has ANY understanding of what's coming, and the only one with ANY sort of plan for a non-disastrous transition. ALL of the rest of them have their heads stuck into the sand.

Wake the [censored] up.

/participation

[ConstantineX]

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You're really missing a much, much, much larger picture. Current obligations of the US Federal government (not debt, obligations) are at least $60T. There is no way that is going to be paid unless the government just prints enough money to destroy the currency. In short, something has to give somewhere, whether you like it or not, no matter who gets elected.



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First, the unfunded liability figure you give is grossly exaggerated. Most reliable claims I've seen range from 30-45 trillion dollars.

Second, this claim is empirically false:
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There is no way that is going to be paid unless the government just prints enough money to destroy the currency.


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There exist plans that do address the long-term funding problems of our liabilities, most of which involve hiking payroll taxes to unprecedented levels. Inflation is not the only method by which the government can solve its problem, it just seems to be the Paulite pet issue. We could also rather easily fix the Social Security issue by slightly delaying benefits.

[AlexM]

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I don't get why people aren't more troubled about this. Getting rid of the IRS is one of the centerpieces of his campaign, as well as one of the hugest policy changes in the last 50 years. Many of the arguments he's using to support it are misleading at best, and false in a lot of cases. When I started a thread about this a month ago, a lot of RP supporters believed that the IT could be completely eliminated just by cutting some discretionary funding. Probably better than 90% of RP supporters now still believe that. And we still have no specifics on what "Dr. Paul" would replace the income tax with.

It's really kind of frightening. Just because the guy says he loves the Constitution doesn't mean you should automatically trust him when he makes vague, misleading statements to explain why he should be given an enormous amount of power.

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Completely eliminating the income tax would only cut our spending back to 199X levels. Ron would cut more spending than that. No need to replace it with anything.

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NO IT WOULDN'T!! RON PAUL IS LYING WHEN HE SAYS THIS!! (and I guarantee when he says that he's planning to tax 2009 dollars and spend them in 1998)

Look at the numbers. Setting payroll taxes and SS aside, money raised from non-income tax sources wouldn't cover interest payments.

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Ok, I've seen mainstream media confirm this, but Ron is lying.