Yes, the economy sucks, and that’s a problem for the Democrats, since they are the incumbents.
I think it’s partly fair, because the Dems did not apply enough stimulus to the economy, and because the Dems have not educated the voters about what’s going on in he economy. However, there’s an element of unfairness in it, too: the Dems had to deal with a situation that was largely created by others (i.e., the real estate boom and bust, the mortgage crisis, and the lax regulation of the banking industry).
The rest of it is the usual spin, but one point is valid.
This is correct - Bush did TARP, Obama did not. But that speaks against the notion that Obama reduced the deficit - TARP is repaid, the stimulus is not.
And ISTM that points 2 and 4 conflict with each other - if 40% of the stimulus was wasted, that would imply that it didn’t work at least 40% of the time, and also that more was not necessary, since so much of it was wasted on tax cuts.
You know, half of the things in that list really don’t have that much to do with Obama. Obama didn’t increase the deficit, or decrease it. Neither did Bush before him. Congress does that. The same with most other things listed.
Now, a fair case could be that as leader of the party, and as wielder of the veto, the President has great influence to get his ideas passed by Congress. Which is perfectly true, although it’s highly questionable on how much Obama does that. He’s tended to take a hands off approach. He’ll introduce ideas, like health care or the stimulus, then let Congress take it and do whatever they want with it. So Obama has even less responsibility for these things than is normal for a modern President.
Granted, that in and of itself is a perfectly valid complaint about Obama. Still, much of the talk both pro and anti-Obama is really about crap Obama didn’t have shit to do with.
That being said, most of the list is either wrong, intentionally overlooks major aspects of the issue at question, or is a flat out strawman argument that doesn’t accurately address the issues Obama’s opponents raise.
The Social Security section is about as disingenuous as it could possibly be. Let’s take the points one by one.
Isn’t that pretty much true of Ponzi schemes? They collect a lot of money at the beginning, but when it comes time to pay out everybody who pays into the later stages, it doesn’t work out? No one is disputing that Social Security has had plenty of money in the past, when the demographics of the baby boom were working for it. They’re saying it’s unsustainable in the long term.
Of government debt. Which we’ll have to pay for with actual money at some point. It’s not like there are any assets saved beyond the US’s ability to collect taxes. It’s an accounting trick.
And after that? Just because our demographics will carry us another few decades before they run out of steam doesn’t make it a sustainable long-term program.
I’m not sure exactly what this means, but I think it stems from a misunderstanding of the fungibility of money. Every expense contributes to the deficit, just like every gain ameliorates it.
The problem isn’t that lifespans are way way longer, it’s that there are (or will be) so many more of them. The ratio of retired to working keeps climbing steadily upward.
I don’t blame Obama for any of this, but the idea that Social Security naysayers are just a bunch of hot air and idiocy is insulting. Points 4,5 (which I agree with, but the argument is bad),6, and 8 also demonstrate a pretty loose understanding of economics, but are not quite as deliberately misleading as point 7.
Even people “in the know” often confuse the one-year measurement of the deficit to the long-term national debt. They often conflate the two as well, depending upon what their ends are. Obama has, in fact, blown up the national debt. If the pundits say that they are absolutely correct.
Really? I would argue that it did nothing of the sort. The United States is not a nation of “savers”. They typically spend it about as fast as they get it and live paycheck to paycheck. That “wasted” money was almost certainly spent on consumer goods and services, which is how a country gets out of a recession/depression.
This is true, and is inarguable. Yet it is arguable that those expenditures propped up the banking system. Did the banks deserve it? Probably not. But their customers did. Which is worse, loans that mostly get paid back or outlays from the FDIC that don’t?
I agree with this.
Going back to point 2, tax cuts give consumers money they would not otherwise have had. Business tax cuts allow businesses to weather the period when they have a dearth of customers. In the short-term they are arguably no less important than personal payroll tax cuts.
I’ve seen that argued. Show me the money.
Yay, my parents, of the generation that helped cause this catastrophe, get the last few sips off the teat. Me? I’m screwed. That point causes me no comfort whatsoever.
This directly contradicts points 2 and 5. If it’s “our money” being spent for “our own good”, who better than us to determine how we should spend it?
Fairly weak arguments all around. More’s the pity. I think Obama is doing a good job, but this isn’t a good argument in his favor.
Even this is open to argument. It assumes that the alternative to what Obama did (i.e., a bigger recession) would have cost less, and it ignores what effect Obama’s policies will have on the debt going forward (i.e., the amount of money that health care reform will save the government).
If you say, “Obama has temporarily added to the debt, and we don’t know the ultimate effect of this spending on the debt going forward, or as compared to doing nothing,” then you can characterize this as “absolutely correct.” It is indisputable. But saying more than that is making assumptions that may or may not be correct.
Gee, if only there was a way to lower business taxes when profits are low. If only they could pay less taxes when they made less money. Oh wait! That’s how it already works!
I don’t know about this reality…specifically that the stimulus raised employment by 1.4 and 3.3 million jobs. That’s quite a range given in their reality.
There’s the infamous forecast that with the proposed stimulus, unemployment (which was ~7.5% at the time) would top out at 8%. In actual reality, unemployment has hovered around 10% for the last year.
If you want to say the stimulus didn’t work because it wasn’t enough, so be it.
Accounting trick? You do realize that federal debt is considered the safest investment in the world, right? You knew that, right?
Without a doubt social security is a problem (its not as bad as our debt and medicare problems but its real), but its a problem that largely goes away if you remove the cap on social security. Once we get past the baby boomer generation, things get a lot easier.
Obviously everyone knows that I’m generally sympathetic to your viewpoint and I’ll be voting for Rick Waugh on Tuesday, but I’m sick of hearing this sort of claim. Estimates about how many jobs the stimulus “saved” are so crude as to be virtually meaningless. You can’t do a controlled experiment on the point, so all you can do is use economic models, which might or might not be accurate. But suppose, for the sake of argument, that the stimulus package did save that many jobs.
It cost $878 billion. Anyone with a calculator can verify, if the lower estimate of jobs saved is right, the stimuls saved one job for every $627,000. For the upper estimate, one job for every $226,000. Not a terribly good figure either way.
One can argue that in January of '09 we were heading into an economic tailspin and only a massive stimulus package could pull us out. If anyone wants to argue that, go right ahead. But clearly we cannot say that the stimulus money was well-used if the purpose was to make jobs.
The bank bailout was passed in a Democratic congress which included Obama, they share responsibility with the Bush administration for this program.
There is no way of knowing whether the stimulus worked or not. The CBO has a model that increased spending leads to lower unempolyment. Spending was increased and the model said that unemployment was lowered. Whether the model was correct or not, we have no way of knowing. In a global economy it is impossible to seperate one input from the myriad of other factors. The CBO guessed about how the stimulus affected the economy and skepticism of their guess is perfectly rational. The Obama administration had a prediction about how the stimulus would affect the economy. The unemployment after the stimulus was in actuality higher than the administration’s prediction of what it would be sans stimulus. Thus on the Obama administration’s terms it was a failure. What would have happened with a different stimulus package or none at all is unknowable. This person’s attempt to present speculation and guess work as fact is an insult to his reader’s intelligence.
I think you misinterpret the use of “debt” in the original. If you go to the original site and then follow the link under the text “wasted on tax cuts which only create debt”, you’ll see that he’s not talking about personal debt, but the federal government’s debt. Specifically in relation to building infrastructure, which he’s arguing would have been a much better use of funds – not only are jobs supported (in planning, building, etc) but after the projects are done we would have had lasting benefits.
I’m actually unsure of this, so I’d like some clarification if anyone has it. But aren’t the jobs generally not pure labor jobs? If the Stimulus is paying for a road improvement it also has to pay for the materials used in the road? If a bridge is being built the money would need to pay for the steel and whatnot, right?
I assume it isn’t as simple as dividing the cost by the number of jobs.
2.Obama’s tax decreases were in the form of credits, not rate reductions. Credits are not generally stimulative whereas cuts in the marginal tax rates are. This is further evidence that the stimulus was ill designed, and is not a defense of the currentl administration.
How does this person know that there are no businesses which would like to expand but are not financially able to do so? Those types of decisions are based on ROI calculations and changing the tax rates will change ROI. Also lowering taxes would allow businesses to drop prices and lowering prices create higher demand. Businesses want customers, but government has no ability to create customers, but it does create tax rates. This is just trying to change the subject, no address the relevant issues.
It is projected to cost around a trillion dollars over the next ten years. It is projected to reduce the deficit by raising taxes by more than a trillion dollars. Just because a program is paid by taxes and not debt does not make it free. Health care spending projections are notoriously hard to make, in 1966 Medicare was projected to cost 12 billion dollars a year by 1990. The actual cost per year were 107 billion per year. The CBO has already had to adjust the cost of Obamacare upwards by 115 billion. It also assumes that future congresses will make cuts to health care spending that are politically unpopular. Look at the history of the “doc fix” legislation to understand how serious congress is about cutting spending. It had detached from the Obamacare bill and passed seperately because it would have made the whole thing too expensive. This person is trying to cause confusion by responding to a assertion about cost with an answer about deficits.
Social Security does not have a trust fund in any meaningful sense. It has government debt. In order to pay off that debt the government has to raise taxes or cut spending elsewhere. This is identical to what would have to happen if the trust fund did not exist. Also life expentancy has risen for the aged by about seven years since social security was enacted. This is not a huge increase compared to life expectancy at birth, but in terms of percentage of retirement it is quite large.
Government spending does take money out of the economy. This is because taxation causes a deadweight loss as well as a substitution effect. Estimates of the effect of the deadweight loss and substitution effect are generally in the 15 to 25% range. This means every dollar spent by the government takes $1.15 to $1.25 out of the economy. The consumer surplus has to be that much higher in order for it to make sense rather than keeping in the private economy where there are no deadweight losses at all. Also government spending is not allocated based on need but on the political influence of various legislators, this is how bridges to nowhere get built in Alaskan villages while tunnels into NYC are cancelled for lack of funds. The political process also makes government spending more inefficent because of laws such as Davis Bacon which inflate the amount spent in order to please power special interests. Thus, while every private transaction increases consumer surplus, many government projects do not.
Every point of this person’s list is designed to confuse and obsfuscate issues rather than clarify them. As to why anybody would believe this person and his deceptive list, rational ignorance and expressive association. The only way to understand democratic politics are to understand those two concepts.
The CBO is not measuring actual jobs. Oversimplifying somewhat, it has a model that assumes that a certain level of stimulus spending produces a certain number of jobs. Each quarter it plugs current spending into that model. Of course it shows that jobs were created, because the model assumes that jobs will be created. This article is obviously partisan, but it provides the counter-argument to #4.
Healthcare reform adds $1 trillion in costs over the next ten years. It offsets them with spending cuts and tax increases. Some of those spending cuts are arguably unlikely to happen, however. For instance, the reform package calls for cuts in Medicare reimbursement rates, and Congress has usually legislated postponements of such reductions when they have been set to occur in the past.
To be fair, some sources have argued that the projected savings from health care reform will be greater than estimated.
Social Security has reduced the deficit in the past by running surpluses. Now that it is no longer running surpluses, it has to be paid back by the Government and so will now be raising the deficit to that extent.