Anonymous asked: this doesn't make any sense. 1. if the current tax revenues are more than is needed to run the gov without incurring any debt, than how is 2. if all gov spending was cut, except to pay for entitlements, there isn't enough money. You can't have both, enough money, and not enough money at the same time.
This is in reference to my Taxing, Spending, and Entitlements Explained post, just so everyone knows.
Did you watch the video, Anon? He explains it pretty darn clearly. The entitlement spending eclipses the costs of running the federal government. But here, I’ll try to explain it using small whole numbers and a more basic scenario:
Little Barry has a lemonade stand. Every day, it costs Little Barry $1 for all the supplies he needs to make and sell the lemonade. At the end of the day though, Little Barry makes $2 from people buying his lemonade.
One day, Little Barry sees a kid from the rich part of town enjoying a delicious cookie. Then he notices that the kids from the poor side of town don’t have cookies. Little Barry doesn’t think that’s fair, and the poor kids whine to him that it’s not fair! So, despite the fact that making cookies has nothing to do with the lemonade business, Little Barry decides to start making cookies and giving them away to the poor kids for free. He hopes maybe they’ll buy some lemonade too—but most of them don’t. They just take the free cookies.
Unfortunately for Little Barry, with so many poor kids wanting free cookies, the cost of making cookies every day comes out to $5. This doesn’t bother him at first, because the revenue from Little Barry’s lemonade stand seems to cover it. But soon after, Little Barry’s lemonade stand is running in the red, at a rate of -$4 every day ($2 in revenue - $1 in lemonade costs - $5 in free cookies).
So, Little Barry comes up with a plan—he’ll still charge people for lemonade, but won’t actually have a lemonade stand. What Little Barry realizes then, though, is even without the lemonade stand costs, he’s still spending more on cookies than he’s taking in revenue.
Ultimately Little Barry ends up getting a credit card and just running up charges—never ever intending to pay it back—and simply asking the credit card company to increase his limit every time he reaches it.
Get it now?
$1 for the lemonade stand costs (the running of the federal government).
$2 in revenue (taxes collected).
$5 in free cookies (entitlement spending).
If it weren’t for the $5 in entitlement spending, we’d be just fine. The taxes collected would cover the expenses, and then some (Point #1). However, with the entitlement spending, even if you got rid of the expenses, the taxes collected wouldn’t be enough to cover the spending (Point #2). Even if we cut the $1, we’d still be spending at a rate of -$3.
Not rocket science to understand that’s a problem.
Well, unless you’re a Democrat or other statist, apparently.
