The “Penny Plan” to Trim Government Spending

[nems]

Which candidate for President has a history of working with the other party to pass difficult legislation?

[Huskerwirejay]

What cuts will be made to reduce federal spending by approximately 30% in order for the penny plan to work?

Specifically, where are the spending cuts going to come from?

Jay, my major was in engineering, not math - but I'm still having trouble understanding your claim - that to "reduce federal spending (excluding interest payments) 1 percent a year for five years", which is what the Penny Plan advocates, that we must "reduce federal spending by approximately 30%?" Interesting math indeed!

I certainly am not a math major. You engineering studied most likely included plenty of math work.

I have read that for every $1 in revenue, the federal government spend about $1.3. If we reduce the spending by 1.3 cents (1%) a year of 5 years, that would come to about 6.5 cents. That would put spending in 5 years at $1.23 for every $1 of 2012 revenue. To get balanced, revenue would need to grow by 23%.

I am skeptic of a plan that is based on growing revenue more that reducing spending by a 4:1 ratio.

I thought we needed to cut spending not increase revenue.

[Huskers57]

I have been buying the same brand of bread from the same store for over 3 years now. 3 Years ago it was $1.29, yesterday it was $2.99...milk cost a lot more than gas...

and the population is growing too, demand is increasing, the resources are getting fewer....need I go on? There's many variables involved. we ain't gonna see 99 cents loaves anymore.

[FLA4NEB]

and the population is growing too, demand is increasing, the resources are getting fewer....need I go on? There's many variables involved. we ain't gonna see 99 cents loaves anymore.

Bought a loaf yesterday and it was 3.19. That is a .20 jump in about 2 weeks. The inflation we are seeing isn't from demand But from our exploding money supply.

[Huskerwirejay]

Wow. I just bought one for 1.19. Where do you shop, Dean and Delucca's?

[Huskers57]

Bought a loaf yesterday and it was 3.19. That is a .20 jump in about 2 weeks. The inflation we are seeing isn't from demand But from our exploding money supply.

i agree inflation plays a role in it but you can't deny the points that I made above also plays a role in the pricing.

[McKinneyTXHusker]

I certainly am not a math major. You engineering studied most likely included plenty of math work.

I have read that for every $1 in revenue, the federal government spend about $1.3. If we reduce the spending by 1.3 cents (1%) a year of 5 years, that would come to about 6.5 cents. That would put spending in 5 years at $1.23 for every $1 of 2012 revenue. To get balanced, revenue would need to grow by 23%.

I am skeptic of a plan that is based on growing revenue more that reducing spending by a 4:1 ratio.

I thought we needed to cut spending not increase revenue.

We can (and have repeatedly here) debate the cut spending vs. increase revenue debate. That's a different issue. I'm just correcting your specious question about how we should cut spending by 30% to implement "The Penny Plan" which calls for spending to be cut 1% per year. The answer to that silly question is pretty simple. To implement "The Penny Plan" we don't need to cut spending 30% as you falsely claimed. Is "The Penny Plan" a good one? Again, that's debatable, just don't try to ridiculously spin it by asking people who claim to support it how they would propose to cut spending by 30% to implement it. Simple math, Jay - grade school math, no engineering or math degree needed.

[Huskerwirejay]

Thanks for your suggestion. I want to be open-minded not one of those people that were criticized in the pew study.

Also thank you for acknowledging that the penny plan may not be a good one. To me it seems like the numbers don't add up. If we only reduce spending by 1% a year over five years, then our spending will be not 130% revenue but 123% of revenue. That assumes to be flat revenue over the next five years.

Of course revenue will not necessarily be flat. it can increase or decrease based on the economy.

If the budget can be balanced in five years under the penny plan, it would appear to me that we need 4% or more revenue growth each year the next five years.

Given the outlook that many Republicans have for the economy expecting tax revenue to grow at 4% year over the next five years seems quite optimistic. Do you believe the average American's taxable income will increase by 4% each year for the next five years?

If revenue cannot grow organically – through growth of our economy – that quickly, then the revenue increase must come from higher taxes or new taxes for some part of the population.

To me any plan to balance the budget that is accomplished with 80% increased revenue and 20% reduce spending doesn't seem to be a plan consistent with the idea that we don't have a revenue problem we have a spending problem.

By asking the obviously over-the-top question of how are you can reduce spending by 30% in a plan that only calls for a 1% reduction in spending, most people can understand that there are is some other detail to the plan that just doesn't add up.

I hope by now that you have come to realize this fact regarding the penny plan. I suspect many other people have figured it out long before now.

Since as a pew study pointed out many GOP supporters are very open-minded, I'm sure they're able to understand the mathematical shortcomings the result in the penny plan just not adding up.

Of course I could be wrong about this. I would invite anyone to point out why the penny plan is not advocating for four dollars of increased revenue for every one dollar of spending cuts in its efforts to balance the budget in five years.

Personally I think we need to go far deeper with spending cuts and look at tax increases or increase revenue far less as we find a solution.

[McKinneyTXHusker]

By asking the obviously over-the-top question of how are you can reduce spending by 30% in a plan that only calls for a 1% reduction in spending, most people can understand that there are is some other detail to the plan that just doesn't add up.

I hope by now that you have come to realize this fact regarding the penny plan. I suspect many other people have figured it out long before now.

Ah, see Jay, there you go. What you REALLY meant was that you don't think the Penny Plan is a good one. But instead, in typical HWJ style, you ask what you yourself admit was an "obviously over-the top question" which simply didn't add up at all, as I pointed out. If you'd have simply said that you think the Penny Plan is flawed at the beginning of the thread and said why you thought so, we could have had an intelligent debate about it. But as we've all come to know, that simply isn't your style. Hopefully you've learned something here - but color me skeptical.

[ChitownHusker]

By asking the obviously over-the-top question of how are you can reduce spending by 30% in a plan that only calls for a 1% reduction in spending, most people can understand that there are is some other detail to the plan that just doesn't add up.

One solution to this problem, which seems to crop up repeatedly, would be to stop asking "obviously over-the-top questions" and instead just say what you mean.

[Huskerwirejay]

One solution to this problem, which seems to crop up repeatedly, would be to stop asking "obviously over-the-top questions" and instead just say what you mean.

Sometimes it is better for people to figure out for themselves why something (like the Penny Plan) isn't likely to work than it is to tell them. If you just tell them, they might take--what did you call it--an ad hominen point of view to re: the person that is saying the plan will not work.

On the other hand, if you ask them to explain how it will work--how a certain flawed feature can possibly work--then can see for themselves that it doesn't add up.

But, hey, I am open minded and if "GOP-sympathizers" are getting behind a plan that balances the budget using increases in revenue to get us 80% of the way their and cuts to spending to get us 20% there, I'd love to hear more. For me, that is too much $$ coming from more tax revenue and not enough coming from spending cuts, but I am trying to be "better informed, more intellectually consistent, more open-minded, more empathetic and more receptive to criticism."