I realize ending the subsidies to ADM won't fix the budget. Neither will cutting foreign spending, or increasing efficiency or any number of the usual ideas that are floated as painless fixes to the impending budget crisis.

The only thing that will fix the budget is reform of entitlement spending.

I use subsidies to ADM as a litmus test (budget turing test?)

A relatively small number of policies benfit ADM, chiefly ethanol mandates, sugar tariffs, and farm programs that lead to overproduction and cheap prices of their feedstocks (corn). These policies benefit only ADM and the corn growers. They increase costs to every food consumer in the US, and they cause economic destruction and human suffering in many parts of the third world.

If the spenders can't stop funding something that benefits so few at the expense of so many the spenders clearly don't have enough responsibility to be trusted with any new tax generated revenue.

They have failed the budget turing test.

We agree on the problem which is

You can’t enforce fiscal restraint on the part of government that controls the purse strings, at least not with the current set of institutions.

The graph in this article by Robert Samuelson Illustrates the problem nicley. Entitlement spending was 22 percent of the budget in 1956, it was 60 percent of the budget in 2006. Defense spending was 60 percent of the budget in 1956, it was 20 percent of the budget in 2006.

The response of Bush and the appropriators to the bloating entitlement spending and the impending bankruptcy of social Security and Medicare was to pass the medicare prescription drug plan which worsens a bad situation.

Given those facts it should be obvious that the response of the spenders to increased revenue from higher taxes will be to spend all of the additional revenue and then spend even more. Thereby increasing future liabilities and making a bad budget situation worse. They have always done this and have never shown any fiscal restraint.

The spenders can get away with it because they can maintain the illusion that SS and Medicare are adequately funded.

Financial restraint will only be shown when they have to start using current revenues to pay for entitlement spending. At that point they won't be able to pretend that entitlements are adequately funded.

Then and only then will there be any chance of responsibility (means testing, etc) being shown with entitlement spending.

Increasing taxes before then (for example reagan's "fix" of social security by raising taxes) just kicks the can down the road and makes the current (economic slowdown because of increase taxes) and future (much larger but still bankrupt entitlement spending) financial destruction worse.

Cheers,

TJIT

TJIT,

Fine, but waiting to raise taxes simply means that when taxes are raised they will have to be higher. There is pretty much no easy way out of this mess. You can't enforce fiscal restraint on the part of government that controls the purse strings, at least not with the current set of institutions. Eventually something will be done and the best guess is taxes will go up.

Oh and subsidizing ADM wouldn't make a dent in the fiscal problems we face. As Dave Schuler pointed out, even if we eliminated everything save the military, Medicare and Social Security we'd still have a problem.

Saying that someone is “trying to get us to lose the war” is childish,. You argue like someone is trying to take your toy away.

No, laura. My COUNTRY.
That you get those two mixed up, explains much to me about why you don't seem to understand the value of each.

So, let’s say Congress raises taxes to “save” SS and/or Medicare. Wait 12-18 months and they will spend the increased revenue on some other entitlement not authorized by the Constitution and be back whining about needing even more money to save SS and Medicare.

Until congress show spending restraint raising taxes

1. Does not fix the problem
2. Makes life more difficult for taxpayers

Bottom line: Until congress shows some spending restraint the best policy is to not raise taxes.

Or to put it another way: Until congress has sufficient fiscal restraint to stop subsidizing ADM by ending sugar tariffs and ethanol mandates they have no moral standing to ask for more money from individual tax payers.

Democrats, on the other hand are honest in their discussions of taxes and budgets. Democratic politicians say that people can’t get what they aren’t prepared to pay for. Democrats don’t promise to make cuts that no one wants and don’t lie that we can afford tax cuts that we can’t afford.

Previous generations of conservatives realized that taxes had to match spending. But today's conservatives are so vehemently against any and all taxes and so vehemently for spending that one would think they have an agenda to destroy America.

Liberals have remained grounded in reality knowing that the best fiscal policy it to raise enough money to pay for what the people say they want.

Director Mitch, we could eliminate the entirety of the federal government other than the military, Medicare, and Social Security and it would still go into default.

That pretty much sums it up. The problem isn't that there is waste, fraud, and abuse, but that the U.S. government is on a completely unsustainable growth path. We could cut out all of the waste, and it wouldn't solve the long term fiscal imbalances.

If the solutions are government default, 50% taxes, or cutting these two programs, guess which one will happen?

50% tax rates or higher.

Nothing will happen until things have reached crisis levels.

Every other comment is pretty much just nonsensical.

Democrats, on the other hand are honest in their discussions of taxes and budgets.

That must be why Social Security has earned the moniker "the third rail" of politics.

Republicans have been discussing budgets and taxes dishonestly for decades. The typical Republican line is to tell the voters that taxes need to be cut, that money is being wasted, but to also commit to supporting whatever the pork is for his/her district and whatever federal subsidies are popular in his/her district. The Republican then goes to Congress, cuts the taxes, and keeps right on delivering goodies to the folks back home. Republicans are the "cut taxes and keep on spending party". Republican voters want government money for themselves but they want the funds to come out of someone else's pocket.

Democrats, on the other hand are honest in their discussions of taxes and budgets. Democratic politicians say that people can't get what they aren't prepared to pay for. Democrats don't promise to make cuts that no one wants and don't lie that we can afford tax cuts that we can't afford.

That's why red states are more federally subsidized than blue ones: hypocritical Republican politicians and voters who want someone else's federal tax dollars to be spent on them.

And add to it, all the war "supporters" who think that the war can be supported by magic.

The Republicans, on the other hand, finally gave in and became "republicrats" and tried to buy votes, the same way, by handing out money.
They figured that when it came time to pay the piper, it would land in the Democrat's lap.
Losing the Congress might just help that little fantasy come true.

What to do?
Raise taxes and kill off the economy, thus harming the most number of people.
Ruthlessly cut entitlements, harming a lesser number of people.

One BIG thing: Government employees (I never use the word worker, here)and their pension and medical obligations.

Take a blow-torch to the federal government (and their average $100k employee) and yhou save a few dollars AND show the rest of the country that the sacrifice is not totally lopsided - like it usually is.

Why not just admit you're trying to get us to lose the war by cutting off the funding? At least then you'll have the advantage of being honest.

If the solutions are government default, 50% taxes, or cutting these two programs, guess which one will happen? But this entry title was "Should Taxes be Raised". Seemed to me it should be "Cutting SS and Medicare to Save the Budget".