Economics Community
Support Pay As You Go Legislation
I'm a big fan of pay as you go legislation. PAYGO would require lawmakers to offset any new tax cuts or spending increases with equivalent tax increases or spending cuts.
I know there are times when some deficit spending is necessary. I'm not opposed to having a flexible plan that allows a certain amount of deficit spending, but in general, I want the government to operate in a fiscally sound way.
It was a pay as you go philosophy that allowed the United States to get back to balanced budgets in the 1990's. It was a belief in massive deficit spending that exploded our national debt during the Bush Administration.
The Obama Administration has been a mix of both sides so far. They are spending a lot of money to fix the economy, but they are supporting pay as you go legislation. We'll see how it plays out over the next four or eight years.
One of the biggest reasons I want PAYGO legislation is to stop Republicans from rising our national debt every time they are in office. My belief is that Republicans don't like the government so their operating philosophy is to strap the government with as much debt as possible so government programs are harder to justify. They achieve this by slashing taxes while increasing spending on their favorite pet projects.
Politicians don't like to make the hard choices. It is much easier to tell everyone they are getting a tax cut while also getting more services and benefits from the government. As citizens, we need to make sure we are forcing politicians to make the wise decisions instead of just the easy decisions. PAYGO legislation would be a step in this direction.
I know there are times when some deficit spending is necessary. I'm not opposed to having a flexible plan that allows a certain amount of deficit spending, but in general, I want the government to operate in a fiscally sound way.
It was a pay as you go philosophy that allowed the United States to get back to balanced budgets in the 1990's. It was a belief in massive deficit spending that exploded our national debt during the Bush Administration.
The Obama Administration has been a mix of both sides so far. They are spending a lot of money to fix the economy, but they are supporting pay as you go legislation. We'll see how it plays out over the next four or eight years.
One of the biggest reasons I want PAYGO legislation is to stop Republicans from rising our national debt every time they are in office. My belief is that Republicans don't like the government so their operating philosophy is to strap the government with as much debt as possible so government programs are harder to justify. They achieve this by slashing taxes while increasing spending on their favorite pet projects.
Politicians don't like to make the hard choices. It is much easier to tell everyone they are getting a tax cut while also getting more services and benefits from the government. As citizens, we need to make sure we are forcing politicians to make the wise decisions instead of just the easy decisions. PAYGO legislation would be a step in this direction.
Replies to This Discussion
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Permalink Reply by James Scott on -
I saw Obama's announcement yesterday about PAYGO.
Here's some information I found on Wikipedia about it:
"These rules were in effect from FY1991-FY2002 [2] and are widely seen as having assisted the US Congress in maintaining budget discipline. In FY 1991 the Federal deficit was 4.5% of GDP, by FY 2000 the Federal surplus was 2.4%. [3] Total Federal spending as a percentage of GDP decreased each and every year from FY1991 through FY 2000, falling from 22.3% to 18.4%. [3]
Nice to see political leaders who want this type of budget policy put back in place after the Republicans got rid of it in 2002.
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Permalink Reply by Sjur Herman Zeiner-Gundersen on -
To fix the economy there has to be a change in the world and not just sweeping things under the carpet.
a) The world can't go on thinking a carriare is the plan
b) We can't just count on politicians and be under control by people that are randomly choosen by the in this case the USA. The universe is not random
c) And the national debt of the USA has to be put in neutral. Other countrys have to understand the positions the US is in and look at their economy and show some understanding and not just some randomness.
d) The world also have to get rid of all nuclear "defence" no one needs "defence" if there is noone to defend against.
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Permalink Reply by Nathan Andover on -
The House passed PAYGO legislation yesterday with no Republican support.
Now the legislation goes to the Senate and then hopefully to the President to be signed.
Not the complete answer, but at least it puts into law that we can't just throw spending onto the national debt as was done during the Bush Administration.
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Permalink Reply by OICUAM2 on -
I support PAYGO as a general operating principle, but I have some hesitations about it because I think it is sometimes necessary to go into debt.
For example, many states have balanced budget acts in place (the same a PAYGO???). When the recent economic crisis hit, states with these laws were forced to massively cut programs.
Instead of cutting educational programs or health benefits for the poor, maybe it would be better if states or national governments could take on a reasonable amount fo debt to help them get through the crisis situation.
So maybe a PAYGO law with some sort of clause allowing for debt to be taken on in emergency situations?
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