Medicare, Medicaid, SS and defense. You don’t tackle those, you haven’t accomplished much. Anyone who says we need to reduce the deficit but not in a way that has any material impact on these 4 is delusional. That’s about 60 or 70 percent of the budget, as I recall.
All that stuff about public television and fruit fly studies, whether or not they’re worthy of funding, is spitting in the ocean. I’m all for eliminating that type of waste (if, in fact, it’s wasteful) where we find it. But that’s more of an “every little bit helps, well, a little” endeavor.
Social safety net programs and infrastructure programs. But they also want massive tax cuts too. The goal is just to starve the beast enough to implement social safety net and infrastructure cuts.
There is also, in my experience, a disconnect between GOP politicians and voters. GOP voters tend to want to keep medicare, social security and usually medicaid (most GOP voters know they couldn’t retire securely without those programs). But GOP politicians do want to cut those programs. GOP voters generally want to cut programs that benefit the poor or indignant. But there isn’t enough money in them to curb the deficit. FWIW, about 3/4 of the deficit is due to the recession. Before the recession it was 100-400 billion a year, not 1.5 trillion. If/when we ever recover it should go back down.
Why do you keep saying that it’s the Republicans who aren’t willing to cut entitlements? Did no one read Paul Ryan’s plan? It’s all about entitlement reform. The Republicans wanted entitlement reform brought up as part of the debt ceiling compromise. Go read National Review, Commentary, Human Events, or any other Conservative Magazine. They’re all talking about entitlement reform.
In fact, the latest news is that Paul Ryan may run for President, and that will put entitlement reform front and center. And he’s wildly popular among Republicans.
Of course there are the old guard Republicans in the House and Senate who have opposed entitlement reform for a long time. But then, so have the Democrats. The politicians who have been around a long time believe that entitlement reform is the third rail of American politics, and any politician who runs on it won’t change the system - he’ll just lose the next election.
But overall, it’s been Republicans who have pushed for entitlement reform for a long time now. Remember the last person to try to elevate it to the level of national debate and attempt to change the system? George W. Bush. He was met by opposition on both sides of the aisle.
The establishment of both parties have their heads in the sand over this issue. Establishment Democrats claim the system can be fixed by just taxing the rich more. Establishment Republicans claim the system can be fixed by cutting the NEA or the Dept. of Education.
But in this election cycle, just who have been the obstructionists? Who has been warning old people that evil Republicans want to take away their Social Security cheques? The Democrats.
Anyone who has studied the budget knows that there’s no way to get anywhere near a reasonable deficit to income ratio without entitlement reform. Tax hikes won’t get you there, and tweaks to discretionary spending won’t get you there. But at least the Republicans are tentatively raising the flag of entitlement reform - the Democrats are demagoguing the issue and trying to scare old people. They deserve the largest portion of the blame at this time.
Cite for Republicans wanting massive tax cuts? I’ve heard some candidates say vaguely that they would want to cut taxes to stimulate growth, but I haven’t seen any numbers. Almost all of their energy is directed at cutting spending.
But if you’re looking for crazy politicians advocating tax cuts…
Cutting taxes AND increasing spending. Where have we seen that before?
This is true. It’s also why fiscally conservative Republicans are disenchanted with the current field - they want someone who can actually take the case for entitlement cuts to the American people and convince them it has to be done. As long as politicians just react to the polls instead of trying to change them, nothing wil happen with entitlements. That’s true of Democrats as well.
It’s true that there isn’t enough money in those programs to balance the budget, or even make a big dent in the deficit. On the other hand, the ‘balanced approach’ Obama is seeking only raises $69 billion per year in new revenue in the best case scenario, so that doesn’t do much either.
That’s not true at all. Revenue is down from an historical average of 18.5% of GDP to about 15-16% of GDP, and down from a high of 20.5% of GDP during an unsustainable economic bubble. Spending, on the other hand, is up around 25.3% of GDP, from an historical average of between 18-20% of GDP. So revenue has gone down by by 2.5 to 3.5% of GDP, while spending has gone up by 5.3 to 7.3% of GDP. Or, if we use the high water mark for revenue and assume the low value for current revenue, the problem is split about 50/50 between revenue and spending.
If the economy bounced back tomorrow to previous non-bubble highs, you’d gain back 2-3% of GDP in revenue, and maybe cut 1% of GDP in spending due to reductions in unemployment insurance and such, but that still leaves a budget gap of maybe 6% of GDP.
But don’t let that number fool you into thinking the problem will fix itself, because no one expects growth to come back to previous levels. They were unsustainable then, which is why we crashed, and now it’s worse because all the money spent to cushion the impact of the downturn will now be a perpetual drag on the economies of the world. After all the dust is settled, world GDP growth will probably be 25% or more lower than it was before. Previous growth was driven by borrowing, and now there has to be a transition to paying off debt.
In addition, we’re heading for a demographic crunch - a greater percentage of people leaving the work force and entering retirement, becoming revenue consumers instead of revenue generators. That will also slow down growth. So you can’t just wait for this problem to fix itself - it won’t. And you can’t maintain a government sized under the assumption that the economy will grow 3-4% per year, when it’s more likely to grow at 2-2.5%
Cites for these numbers are available in the 'Why do Republicans oppose tax increases on the rich?" thread.
One other point: The spending imbalance and current deficit doesn’t really reflect the entitlement problem, which doesn’t start impacting the budget in earnest until after 2020. At that point, even if you manage to raise taxes and grow the economy enough to get revenue back to its all-time high, the deficits will start building again and they will grow completely out of control unless you reform Medicare.
This sounds about right. So reasonable people should be advocating for a solution that splits to 50/50 between tax increases and spending cuts.
I recall during the last debt ceiling kerfuffle, the Democrats were proposing to do away with some of the Bush tax cuts (therefore a tax increase???), and cut some spending. Probably not at the ideal 50/50 ratio, but at least they had the concept right about the need to do both things to solve the problem.
The Republicans, on the other hand, took tax increases (or letting the Bush cuts expire anyway) completely off the table.
Oh, its “entitlement reform”, then? Well, that’s very different, isn’t it? Reform means you fix it, so it works better. Gosh, when you put it that way, it becomes clear that the Dems are just making a big pile of nothing, talking about cuts! Why, its about repairs and improvements!
Was Orwell Canadian? English, I always thought.
And you and Euphone can keep yer damn “cheques”, but I by God better get my damn money!
I think **Sam **is mostly right this time. Paul Ryan got majorly skewered as the guy who was going to end Medicare as we know it. And maybe that was correct. But to say that no GOP politician has advocated for cutting entitlements simply doesn’t square with current events. But it’s also true that the establishment GOP and Democrats don’t want to touch that issue with a 10 ft pole. As if any of them have 10 ft poles to begin with…
And after all, the US is currently #22 on the list of most generous countries as a proportion of gross national income - lets see if we can get that to #97!
So let’s see - approx 27 billion/year on foreign aid… Our hypothetical 50,000/year family would be stopping the payments to the orphan they sponsor in the Sudan.
Ya, so the child won’t get meals or an education anymore. But on the other hand, they’ll be saving $25/month towards their $12,000/year deficit!
Let’s add up the savings so far:
Cut off the orphan in Sudan: $300
Stop donations to your local church food bank in the middle of a recession: $840
Cut consumer magazine - take your chances on food and medicine: $35
Lose the air purifier - suck it up, asthma boy! $100
So yay! You’ve saved $1275 toward your goal of $12,000. Keep on cutting!
And who would those reasonable people be? Certainly not the Democrats: They are almost universally opposed to ending the Bush tax cuts on anyone except the top 2%. According to the White House, that will result in $69 billion dollars a year in revenue.
So congratulations: The ‘balanced approach’ with Obama’s ‘revenue enhancement’ has succeeded in reducing the deficit from 1.6 trillion dollars to 1.53 trillion dollars.
Maybe they want to go after the rich for some more? Perhaps rescind the Bush tax cuts on the top 2%, and then add in new taxes equal to the cuts, essentially doubling the new taxes on the rich over what Obama proposes? That’ll get them to only 1.46 trillion in the hole. The error in estimation of this year’s deficit from the CBO’s report of just a few months ago was bigger than that. It’s a trivial amount compared to the size of the fiscal imbalance.
This also assumes that those tax increases won’t hurt GDP growth, cause more tax avoidance activity, or create dead-weight losses - which they will. So the real income will be somewhat less.
If the US is serious about raising revenue to that degree, the only way they are getting there is to do what we did in Canada and raise taxes on everyone. A VAT would be the best way to do that. Do you think there’s any will in either party for a broad-based tax hike of that magnitude?
This is why S&P downgraded the U.S.: The fiscal imbalance is so big, and the political willpower to change so small, that they don’t see any way out short of the U.S. government being forced to take action through a default.
Here’s the thing: Democrats did what they always do. They propose a mixed bag of spending cuts and tax increases. But the tax increases are always very specific and are always implemented first. The spending cuts are usually framed as “we will start a process to start evaluating where the government spends money and determining where to cut.” And that never happens. Or they create a budget that has a whole bunch of new spending in it, then negotiate away half the new spending and declare that that is their ‘cut’.
Now they’ve formed another commission to take the decision-making away from the congress. Of course, this is the second such commission - Obama already formed one, and they came back with recommendations which he completely ignored because he didn’t like their answer. And this new commission has already been poisoned - both sides put their most dogmatic members on it, guaranteeing gridlock.
I don’t blame Republicans one bit if their response to Democrat’s demand to raise taxes along with spending cuts is to say, “Okay, you first. You propose specific cuts to specific agencies. Then AFTER those cuts have been made, we’ll form a tax committee to evaluate the tax system and determine the most effective way to raise rates in two or three years.”
Think Democrats would go for that? Or would they assume they’re being played?
This is the dysfunction in the system. Neither side trusts the other anymore. No one is bargaining in good faith. It’s all games and political one-upsmanship, with enough smoke and mirrors to kick the can to the next Congress. They’ve all been doing it for decades, which is why the U.S. is in this mess. The Republicans are every bit as much to blame as the Democrats.
Errrr… The Liberals under Jean Chrétien with Paul Martin as finance minister?
I would say though, that the political system as it stands down south does not lend itself to the same solutions that Canada adopted. The Democrats do not really have a chance to put any programs in place, since it is impossible to get the same party-line obedience we have here.
It might suck sometimes to have so much power in the PMO, but on the other hand, when the shit hits the fan, critical financial decisions can be made.
ETA:
[QUOTE=Sam Stone]
This is why S&P downgraded the U.S.: The fiscal imbalance is so big, and the political willpower to change so small, that they don’t see any way out short of the U.S. government being forced to take action through a default.
[/QUOTE]
Yes, and also I believe they noted the uncertainty caused by the Republicans going right to the brink of default with the recent “unpleasantness” with the debt ceiling.
2 We have reached the tipping point where instead of the general fund borrowing from SS, funds that might otherwise be spent elsewhere, have to pay SS back.
"On a significant and related front, Obama will also present a specific plan to cut the suffocating long-term national debt and to pay for the cost of his new short-term economic ideas.
His debt proposal will be bigger than the $1.5 trillion package that a new “supercommittee” of Congress must come up with by late November.
The president will then spend his fall publicly pressing Congress to take action as the economic debate roars into its next phase. Both the economic ideas and the plan to pay for them will be part of Obama’s speech, although the address will focus mainly on the jobs components."
Yep. You’re preaching to the converted. The literally converted. I used to be a knee-jerk liberal basher in my younger days. But I had to sit and and look hard at the numbers, and I eventually concluded that the Martin government and the Chretien government with Martin as finance minister was the most reasonable, fiscally conservative government Canada has had in my lifetime. I regret not giving them my support an election earlier.
This is exactly the problem. The U.S. government just does not function well at the federal level. The entire system is set up to prevent large government by tying the government’s hands when it reaches too far. But the U.S. government has relentlessly struggled at the bonds of the constitution, especially in areas that give the federal government more power. Legislatively, judicially, and at the executive level, pressure is always put on the boundaries of the constitution, and now the federal government is a gigantic behemoth, trying to operate a functioning economy under a set of rules that virtually guarantee pork and influence peddling, while throwing roadblocks in front of attempts to govern responsibly.
In a parliamentary system, it may be easier for government to grow in some ways, but it’s also easier to govern once it is large.
Er, until you consider Britain…
The big difference is that party discipline acts as a political shield around MP’s, allowing them more freedom to vote their conscience. In addition, because individual votes cannot be bought, lobbying activity is much reduced. It is much harder to peddle influence in our system than in the U.S.'s. And if a member has to vote against the desires of his own constituents for the greater benefit of all, he can do it without paying as heavy a price for it politically as his American counterpart would.
It makes all the difference. It also makes the government less representative of the people, however, so you’d better hope that you elected people who know what they’re doing.
I did, but they described it as indicative of a larger problem - that America was becoming increasingly polarized and politically dysfunctional. So it was more like the fight over the debt ceiling ripped the scab off a festering wound and exposed it for everyone to see.
Yeah, I read that. Same old same old. We’re going to raise spending now and cut taxes, but don’t worry - we’ve got a super-secret plan that’s going to make it all better. We’re only a commission or two away from Nirvana.