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 Calling the Bluff on DeficitsPosted on Nov 22, 2010Ronald Reagan (bless his sense of humor) loved to say that the problem with his administration was that the right hand didn’t know what the far right hand was doing. Something of that sort is happening among conservatives on the supposed urgency of closing the federal budget deficit. On the near right is the preliminary proposal of the co-chairs of the president’s deficit commission, Erskine Bowles and Alan Simpson. It is a deeply conservative document that would make sharp reductions in Social Security, Medicare and Medicaid while also cutting and flattening income tax rates. As is, it would do a lot of harm, but at least it takes the deficit seriously. Then there are Republicans in Congress whose top priority is to force through legislation making the Bush-era tax cuts for the best-off Americans permanent, thus expanding the deficit by about $700 billion over the next decade. So on the one hand, we have to cut, cut, cut because fiscal catastrophe is looming. On the other, we have to make the problem worse by shoveling more money to the rich because ... well, because taking care of those with tidy incomes is contemporary conservatism’s highest purpose. Advertisement I have doubts any plan can get 14 votes, partly because the Republican House members on the commission, Dave Camp, Paul Ryan and Jeb Hensarling, may not want to put the new Congress on the spot. But the only way to create pressure for agreement by the commission’s Dec. 1 deadline is if its members know that getting to 14 would force congressional consideration. Boehner should show he has Pelosi’s courage in committing to a vote before knowing what the commission will produce. In the meantime, the Bowles-Simpson proposal will have to change a lot if progressives and moderates are to come on board. One test will be how open they are to elements of an alternative put forward by Rep. Jan Schakowsky, D-Ill. One of the commission’s most progressive members, she leans more on revenue increases and defense cuts to get toward balance. Good for Schakowsky for showing that liberals embrace fiscal responsibility and that biting hard into programs that benefit the middle class and the poor is not the only way to do so. And all who reject her military cuts need to make clear what they would cut instead, or which taxes they would raise. As for the Bowles-Simpson plan, its problems include an unrealistic 21 percent limit on revenues as a share of gross domestic product. And as the Center on Budget and Policy Priorities has pointed out, the proposal’s excessive cuts in Social Security would rather substantially reduce benefits for Americans earning as little as $43,000 a year, hardly rich people. That’s a bad idea. In a sharp but even-tempered critique, the center—a liberal group deeply committed to deficit reduction—also notes that the plan’s health cuts “could harm vulnerable people” by creating “widespread health care access problems.” This is the last thing we need. And why is a deficit reduction commission in the business of reducing tax rates for the wealthy and corporations? Bowles and Simpson propose to cut the top income tax rate from 35 percent, under current law, to 23 percent? Yes, they get there by eliminating all deductions—and would treat capital gains and dividends like other income, a sensible tax reform. But even if certain popular tax benefits are restored, the top rate would still come down to 28 percent. Why do that when the deficit is so big? Some conservatives are smart enough to know what a Trojan horse looks like. Wall Street Journal columnist Daniel Henninger wrote an ecstatic column last week (“8-14-23 or Fight!”) praising the commission for the rate cuts. If the main purpose of this exercise is to cater to the supply-siders on The Wall Street Journal’s editorial board, many of us will fall by the wayside. But shouldn’t conservatives want to debate all this? Will Speaker Boehner be serious about deficits or not? E.J. Dionne’s e-mail address is ejdionne(at)washpost.com. © 2010, Washington Post Writers Group  TAGS:
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Say ‘Hi-Ho!’ as They Strip-Search You
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By garth, November 29, 2010 at 5:54 pm Link to this comment
Balancing the budget
Up till W’s years, the common understanding was that we owed ourselves so what’s to worry about.
Then along came Jones with his wars and his transfer of wealth and his transfer of manufacturing jobs and look what we have left.
In W’s world outside government he was an abject failure. He tried selling food to airlines but failed miserably. They had to let him go.
Arbusto and the baseball team that was all his father’s legacy.
George kicked off the fight against Social Security in 2005. What they really wanted was to cancel the debt to the Social Security Fund, approximately 2 and a half Trillion dollars.
You see they borrowed from the Social Security Fund to make it look like the budget was balanced. That’s where the IOUs came in.
You remember when W was in West Viginia in front of an empty safe saying, “See, there’s no money in here.”
Well, there really are IOUs. And those IOUs just like all other US IOUs, are backed by the US Constitution. (Tell that to the Tea Baggers.)
The Government has to pay them back.
But back to my original point: If any change to Social Security goes through we will have made George W. Bush a winner.
He deserves to have his nose rubbed in shit.
And George and Barbara you should be ashamed of yourselves.
A baby in a big mayonnaise jar in formaldehyde? You admit that much.
Gail ‘Haddock’ of the Christian Science Monitor ought to be labelled a Nooz Disgrace.
The CSM, a paper that’ll harm no man, depending on your definition of man.
This all is disgusting.
Report thisI think I’ll go lie down.
By Tesla, November 23, 2010 at 10:02 am Link to this comment
I think I feel the rumblings of a very angry mob coming
this way.
July 14th 2011 would be a very appropriate date for the
Report thisstorming of the Congress Building (Capitol), White
House and Pentagon, non?
By Lafayette, November 23, 2010 at 7:39 am Link to this comment
MONEY, MONEY, MONEY ...
... makes Uncle Sam go round.
It would help, in this discussion, to actually know what the budget expenditures actually looks like. So, see the FY2010 budget pie here.
Compare items two (Medicaid and State Children’s Health Insurance Program) and five (DoD). Uncle Sam spend twice as much on the latter than the former. Which is just fine by the Replicants, after all children don’t give to electoral campaigns, do they?
And the budget debate will always be this way. For as long as the M-I-C is up and running marvelously well spitting out profits that can help get Replicants and BlueDogs and Moderate Dems elected.
And the idiocy of it all is that the DoD can’t do much about terrorism. Finding Obama in the mountains of Western Pakistan will not stop terrorism. Defeating the Taliban in Afghanistan, although a good thing for the Afghanis, will not stop al Qaeda. The US Army is incapable of fighting an insurgent guerrilla war. (Mao tse-Tung had got it right from the beginning.)
What we can do is be concerned for American security on American soil – and that’s the job of the Homeland Security. That’s item 12 on the pie at 1.32%. So, why not take two percent from DoD and send it over to the people in HS? Then we reduce DOD a further 5% (of the total) and all those laid off from DoD can try to find a job at HS!
And we have a DoD budget at a far more reasonable 5% of the total.
But, don’t expect such logic to prevail. Logic, people, is not the primary ingredient to politics in LaLaLand on the Potomac. Money is, however …
POST SCRIPTUM
Any top manager, responsible for the bottom-line and profits, would implement the above budget manipulation overnight. It makes better sense as regards the utility of resource expenditures in line with corporate objectives.
But, hell, what does sense have to do with it? Nada, niente, rien, zip, nichts ...
Report thisBy Lafayette, November 23, 2010 at 5:58 am Link to this comment
BALANCING THE BUDGET
There are not 53,000 ways to eradicate the deficit.
In fact, there is probably no way to do away with it entirely. To diminish it, one must look at wheere it is spent and how that fits policy objectives to which Americans can subscribe. (If they give a damn at all, that is.)
So, any reflection on the budget deficit requires looking at its causes. Here, for example:
• The cost of Medicare/Medicaid
• The cost of Military Might prepared to fight an aggressor that does not exist. (Our military force is not prepared to fight terrorists, which is the preoccupation of other services.
• The cost of subsidizing exorbitantly priced Health Care insurance contracts from private industry.
• The cost of maintenance of our present deficit by the sale of T-Notes (meaning we become a debtor nation for as long as Sovereign Accounts (foreign countries; read China) are willing to hold dollars – with its highly speculative risk (of dollar devaluation).
• The cost of Social Security and UI – both of which are considered untouchables (except by the incumbent Replicants in Congress).
As regards budgets, the notion of “entitlement” is not sacred. Except for political parties that want to get reelected – and, there, they best tread carefully. To seriously diminish Medicare services or the reimbursement of costs will gravely upset senior citizens who have little better to do than to make their way to the polling booths.
And that is the problem. Replicants think that tax breaks have become an entitlement. So, the incumbent Replicants will pander to that notion, since a great deal of electoral funding is on the line.
A POSSIBLY INNOVATIVE SOLUTION
What could save the budget is, yet again, an idea that comes from Europe. It is the Value Added Tax, which helps take taxation off Income and put it upon Consumption. (One Frenchman in two pays any income tax, once deductibles are accounted for.) It is a national tax, the same in all states and it replaces state sales taxes.
Meaning that any such tax, nominally in the range of 15 to 20%, must be shared with the state. And the beauty (for the state) of it is that the Treasury could assume the costs of collection. The tax is applied to all Consumption of all product and services that is made by the final consumer. Thus, all tax spent in the process of making and delivering a product or service by companies are reimbursed them. It is not therefore a tax upon industry/commerce. The tax is only paid by end-consumers. (And, yes, it will result in a Tobin Tax on all Financial Transactions, except those abroad, since VAT is paid only by national residents of the source of the tax.)
If the US were to adopt the Value Added Tax, it would have a source of revenue that is far more stable than Income Tax, since consumption tends to remain far less variable than Income. It would be necessary, however, to share VAT revenues with the states, but this should not be Mission Impossible.
POST SCRIPTUM: The real issue
The real issue is one of moral interpretation, which is the perpetual disconnect between the Right and the Left. The Right believes that all income earned is sacrosanct and belongs only with its Individual earner. The Left is more Collectivist and beliefs that all income is the fruit of a collective labor and therefore its taxation as well should address collective needs.
At the center of this divisive argument is only one principle: Greed. The channeling of riches in America to the top echelons of society can only increase the class divide. And history shows us all too well, such divisions are the source of many a societal cataclysm.
Report thisBy greenuprising, November 22, 2010 at 9:34 pm Link to this comment
Debate it? It should be thrown out the window. If we have to depend on the Repugs to do it, so be it. Cut the deficit? Let the Bush tax cuts expire. Period. OK, let the middle class off the hook, if you can do it. But non-action (or a veto) will do the trick. After that, it’s all uphill, because no one will acknowledge the elephant in the parlor, the so-called Defense budget.
Report thisBy qusiba, November 22, 2010 at 7:21 pm Link to this comment
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Report thisBy garth, November 22, 2010 at 6:43 pm Link to this comment
In general, I don’t like E,J, Dionnes’s articles. He’s a mealy-mouthed left-winger, and they sound a lot like ‘let’s get back to the right-of-center thinking. This crap is an anathema to 21st century Americans who want to move, baby move.
We’ve seen it all before, thrice. For the past thirty years.
Social security does not add one whit to the Deficit. It’s known and by now it’s understood, or it should be.
Tell it like it is, tell it like it is, for chrissakes. Social Security pays for itself.
And as you’d expect from these flotsam and jetsam with shiny-clothed suits; these tobacco smoking, booze-drinking bums, Social Security pays a lot towards the debt itself.
That’s right! The government owes billion if not trillions to the Social Security Fund. They took out the cash and threw in IOUs.
All of them guaranteed by the Constitution.
Yes, you mackerels, debt was important to the founders of this union as it is to us.
So, don’t listen or believe any of this crap of Bullshitography that Ivan von ShitHead and Richard the Wolffe, and the like are selling.
They are the newly arrived. They didn’t live through the Depression.
My older brother told me that in 1961, he paid Social Security up to $9,000 of his income per year. He made about $2.65 an hour working 3rd shift.
Now, funny as it might sound to Alan ‘the Wyoming Rancher’ Simpson et al, he wants it back.
In closing: Social Security is paid for. It does not add to the debt nor does it add to the deficit.
So forget about cutting it. Unless of course, you want trouble.
Report thisBy Sharkie, November 22, 2010 at 6:33 pm Link to this comment
(Unregistered commenter)
How bankrupt a nation we’ve become when our social security program that by law does not contribute one penny to federal deficits, and never will, becomes a bargaining chip to lure Republicans into a grand deal on raising taxes. The braincases in charge of reducing federal deficits, some of who were around when another blue ribbon commission jacked payroll taxes to over-pay in advance boomers trust funds,
should be looking elsewhere for their comeuppance. If logic should ever dictate reality, reforming the rights of man by gutting social contracts with the economically vulnerable would in fact expose these ugly distortions for a disturbing version of the six o’clock news. Instead we have baby boomers singled out as the chief culprits of their continuous admonition of insolvency and a populace cowered by proposals of absurdity against their common good.
How any committee can now take a compulsory social welfare scheme providing a pension from a fund to which workers and their employers have contributed throughout their working lives, and use it to pay down deficits created from tax cuts, war, bank bailouts, and any other thing they didn’t collect enough revenue for disgusts even the most malleable mind.
Suddenly, the social and cultural rights that were once indispensable for our dignity have become nothing more than entitlements destined for reduction and postponement. Bankrupt indeed.
Report thisBy dihey, November 22, 2010 at 6:17 pm Link to this comment
(Unregistered commenter)
Mr. Dionne. When will you wake up from your deep deep slumber, if ever? This commission was appointed by your idol, President Obama who has not yet let out a peep in opposition to this reactionary product.
Report thisBy who'syourdebs, November 22, 2010 at 2:23 pm Link to this comment
How can we expect members of Congress to protect our interests anyway? 261 of them are millionaires. 1 in 5 has a calculated wealth of more than 10 million dollars. 8 of those 261 have more than 100 million. The median wealth of a House Representative is $765,000; for a Senator it is an astounding 2.27 million. Darrell Issa (R-Calif.) is worth an estimated 303.5 million. Members of both houses collect a salary of $175,000 per year, not to mention the perks. Mind you, the average yearly household income in the US is $50,221. Which side of the issue are Congress members logically going to line up on? Duh…their own? This is class war, all right, but these wealthy “soldiers of fortune” have been hiding that fact since the Reagan era. Workhouse, anyone? Free kool-aid.
Report this