It's been widely reported that ChatGPT has on a number of occasions been subject to "hallucinations." (I love that euphemism for "getting stuff totally wrong.") For instance, several attorneys contesting recent tort suits have been sanctioned by the courts for submitting AI-generated or augmented briefs that cited wholly fictitious cases.
Nonetheless, I applaud pxmcc for taking a stab at having AI run a quasi-simulation on what a true deficit reduction plan might look like. (I've done this myself several times late last year; it's an interesting exercise.)
However, the chatbot whiffed in a couple of key areas here, I'm afraid. Perhaps the most glaring is the assumption that raising the capital gains tax to the top-bracket rate on ordinary income would raise additional revenue. That's a very bad idea and would almost certainly
reduce revenue substantially relative to current policy. That's been well-known in policy circles for at least 45 years now.
Also, the reference to a 12.5% "effective rate" carbon tax is a rather unusual way of quantifying it. (12.5% of what? The cost of the fuel or whatever it is that produces the carbon?) Actually, carbon tax rates are described as a price in dollars per metric ton. For instance, one widely promoted plan calls for a $50/ton carbon tax, which would likely be estimated to raise around $100 billion annually and raise the cost of gasoline by about 50 cents per gallon.
But, since a carbon tax would be highly regressive, its promoters typically pair it with some sort of "rebate" to middle-class and working class households so that they could reasonably expect to get back as much as they would pay in increased costs. (Otherwise, the whole thing would be a political non-starter.) Generally, then, fans of the carbon tax see it not so much of a revenue-raiser but as a way to disincentivize activities that produce greenhouse gases.
As I see it, the biggest challenge is that total spending on Social Security, Medicare, and Medicaid has gone up over the past 25 years by close to four percentage points of GDP. The population is aging and health care costs have skyrocketed. In addition to this, we now have the added burden of rapidly increasing interest payments on our ballooning national debt.
Thus, total federal government spending, which had declined to about 18% of GDP at the end of the 1990s, is now around 23% -- and climbing.
Just over 10 years ago, I started a thread simply entitled "Who Pays for Big Government?" I suggested at the time that the article and graph in the opening post might be quite an eye-opener for some of our progressive friends.
https://eccie.net/showthread.php?t=1325605
AOC, Bernie Sanders, and a few other uber-liberals seem fond of extolling the virtues of big-spending social democracies such as Norway and Sweden, but how do you think it would go for them if they introduced the tax systems that middle-class households are subjected to in those countries?
Those little ponderables may point up the enormity of the fiscal challenge.
