Machiavellian said:
1. This site you listed does not validate their numbers. The do not list any of their sources on how they get their calculations. Also when I say list I mean a link that I can go to to verify their data. Without the links those numbers are pretty much made up. 2. If we waste so much money in the government then we do not need to spend so much like 65% just on our Military. With the amount of money we spend on the Military right now we could improve every school in America twice over. Hell, we could give free rides to any college for all kids so all our children has a chance to have a higher education which would put them all to work, creating Jobs improving the economy. I have no problems with improving the tax code, I have a problem just giving the rich a free ride and believe somehow they will put back into the US. This has already been done multiple times and each time the corporations just repurchase their stock, pay their CEOs more and just purchase bigger items and still move their assets to even cheaper countries. |
I actually have a little bit of insight in a few of the things you guys are discussing if you don't mind me jumping in.
1) So I did a bit of reading on how military spending affects GDP a few weeks back. Obviously being an economic question, theres a lot of disagreement as to the effects (economists never agree on anything), but the common consensus that I found was that, in the USA, military spending has a close to neutral effect of GDP. Some papers show it with a slight negative effect (dampening GDP due to increased federal debt) while others show it with a slight positive effect (increasing GDP due to the economic contributions of military development and R&D).
What this largely means, is that while the effect of the spending itself is relatively neutral, it is inefficient. Spending a portion of that money elsewhere (say, education or infrastructure) would likely produce a greater positive effect on GDP (without ballooning the federal debt which would be the effect of increasing spending everywhere).
Sources:
http://journals.sagepub.com/doi/abs/10.1080/07388940490463906 - "Findings are robustly substantiated and reveal that military spending and growth have neither a statistical nor an economic impact on each other. This suggests that current U.S. political debates opposing or favoring military spending on the grounds of its economic merit are irrelevant."
https://www.mercatus.org/publication/defense-spending-and-economy - "The existing studies found that a dollar increase in federal defense spending results in a less-than-a-dollar increase in GDP when the spending increase is deficit financed. Combining this with a tax multiplier that is negative and greater than one, the authors estimate that over five years each $1 in federal defense-spending cuts will increase private spending by roughly $1.30. "
2) Illegal immigrants do cost the government much more in output than they pay in taxes. However, the question is a lot more complicated than that when you take in the effects of how they spend their money.
First of all, the cost to taxpayers. Yes, there is a cost. What that number is however, isn't quite as clear. What was provided above (roughly $100billion after factoring in taxes paid) is pretty much the highest estimate out there. Other estimates range from $6billion to $50billion to $85billion (after roughly adjusting for population changes). So yeah, there is a cost, but I'd say an average estimate would be closer to $70billion than $130billion.
Next comes unemployment. The typical logic is that immigrants take jobs, but that isn't factoring in the demand they create. Because of this, the impact on unemployment is basically null.
Finally, wages. Again, the effect isn't as strong as many people think. Most studies find a small decrease in wages of the high school dropout demographic and basically no impact, or even a slightly positive impact elsewhere.
Then there are the positive effects. Most notably, illegal immigration helps keep costs down. This goes for pretty much everything from food to houses. Because of this, the spending power of American families increases, meaning their earnings go further. This leads to overall, illegal immigration largely being a wash. You have slightly higher government spending but reduced consumer costs, increasing spending power and helping businesses. Because of this, high cost efforts to reduce illegal immigration largely are harmful economically.
Sources:
http://www.politifact.com/truth-o-meter/statements/2016/sep/01/donald-trump/donald-trump-says-illegal-immigration-costs-113-bi/ - Presents numerous estimates for taxpayer cost of illegal immigration.
https://www.brookings.edu/blog/jobs/2012/05/04/what-immigration-means-for-u-s-employment-and-wages/ - Summary from Brookings about the effects of immigration.
3) I don't have any real academic information to share about this last point, but I want to say that reducing government waste would be great. However, that needs to come before or alongside tax decreases. Decreasing taxes without also reducing unproductive government spending inflates the budget which creates longterm woes far outweighing short term gain (that information is from a CBO report somewhere but I can't remember which one and it seems like common sense so I don't think I need to source it).
4) Finally, quick note about the Laffer curve. It is a full parabola. That means just decreasing taxes doesn't necessarily increase revenue. There is a sweet spot somewhere in the middle. Proof needs to be put forward to show that decreasing taxes will increase revenue in order to use the Laffer Curve in your argument (assuming anyone puts any stock in the Laffer Curve at all).
