A Picture that Says it All

July 24th, 2011 at 7:38 pm

Source: Washington Post

Well, they’re meeting, I read, but no point in trying to round up all the rumors swirling around.

I’ll stress only two points here.

First, the President is unquestionably correct to insist on an increase in the debt ceiling that takes us to 2013.  This impossible Rubik’s-cube-of-a-negotiation only gets harder if we have to go through it again in the context of a presidential election.

Second, there are few words I’ve come to disdain more in this debate than, “which baseline?”  Playing fast and loose with the prospective budget path of your choice makes the numbers impossible for normal people to follow, even if they were crazy enough to try.

But that said, I must stress that I, for one, would not consider revenue raised from ending the high end Bush tax cuts to be “new” revenue—around $800 billion over 10 years—to be claimed by either side as adding balance to a deal that will already clearly be tilted towards spending cuts.

I get that this sunset is no slamdunk, and would of course be happy to see it.  But it is widely expected and was embedded in the baselines of most major plans discussed so far, including the fiscal commission and Gang’o’6.

And, to be fair and balanced, spending-cut-freaks have a right to say the same thing about claiming $1 trillion over 10 in savings from drawing down the wars.  Those fully-expected savings should be in the baseline too.

 

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6 comments in reply to "A Picture that Says it All"

  1. Fr33d0m says:

    Even if they granted new revenue, what would we be able to do with it? I’ll settle for the old revenue thank you.


  2. dougfir says:

    Why not look into the family budget example a little more? When there is not enough money coming in to keep the kids fed, the roof repaired and the minivan running, you don’t eliminate one of those, you start working more hours, make the older kids start mowing lawns, maybe get a second job. In other words, you increase revenue to cover necessary expenses.


  3. Geoff Freedman says:

    Apparently no one can do math regarding the deficit. Lets assume defense spending and all our other spending for our safety and to support our foriegn policies is sacrosanct. As of 2010 the military budget was 695 billion.

    The other discretionay funding amounts to a total of 680 billion (approx). Of that 680 billion, 52 billion is allocated for Dept of State and Foriegn Expenditures, 42 Billion on Homeland Security, 53 billion for Dept of Veterans Affairs. Another 80 billion is spent on funding intelligence activities(that adds up to 932 billion per year on defense and foriegn policy spending – and this does not account for the supplimental spending for the wars nor for all the services that were contracted out for the military).

    Assuming all the specific funding mentioned above is sacrosanct for conduct of our defense and foriegn policies, Thet leaves about 450 billion in descretionary spending to cut.

    Medicare is about 793 billion.

    Social Security is about 701 billion. In fact social security did not create the deficit. Since the Regan reforms of 1983, Social Security ran a surplus (at least until 2010) and those surplus funds were used to finance other government operations. In fact between 4 and 5 trillion of the total national debt is owed to the social security fund and other federal pensions as these trust funds have been raided by the Federal Government to cover government operations. In fact Social Security is solvent until 2036. Although there are longer term problems that need to be addressed, Social Security is really not part of the current problem.

    For the sake of argument, lets include the social security as part of the problem. We have a 1.6+ trillion deficit now per year. If you cut other descetionary spending in half 225 of 450, Medicare in half 397 of 793 and 350 of 701 for social security. You have cut 972 billion. That still leaves an annual deficit of almost 700 billion dollars.

    That doesn’t take into account any TARP funding (which has expired) Obama’s recovery act which has expired, nor the supplimental funding for the wars.

    In other words even if you don’t take out my artificial inclusion of ALL social security benifits, you can’t balance the budget even if you cut 50% from all our foriegn and defense spending with raising taxes. Its mathematically impossible.

    And remember, since 2001, and on a yearly basis, we have increased spening on defense and foriegn affairs by close to 600 billion per year, at a time when the Bush tax cuts reduced revenues by 300 billion per year.

    Just do the math. Neither Republicans nor Democrats will do that so you have to do it for yourself. I guess they think we are too stupid to understand. Or they just want to maintain our status as the great empire of the world.


  4. Geoffrey Freedman says:

    The damage to our reputation has already been done. As the world looks at us in amazement, if they can’t trust us to make big decisions how can they look to us as the leader of the world. How could they possibly have faith in our political system after this public spectacle?

    Moody’s and S&P are talking about downgrading us because they have seen our inability to deal effectively with the big economic issues and wonder if we can truly tackle our problems and effectively deal with them. This from the rating agencies who gave us AAA ratings the mortgage junk bunds issues by Wall Street.

    Not only have we given China a great head start for duking it out the next century as the economic leader of the world. We have to have given the entire world pause for continuing to have the U.S. dollar as the reserve currency for the world.

    We cannot look at our spending objectively. Not only our we spending too much for our military, we are unable to look at our problems with our health care system, which are the underlying issue with Medicare expenses.

    We are quickly becomming a laughing stock to the rest of the world and I have to assume that we have immeasurably damaged our world reputation.


  5. Democrat says:

    I am a life-long Democrat who is involved in my party organization and has enough of a profile that I am asked to comment in state news outlets. Right now I am rather frustrated with President Obama.

    At this point, the president could invoke the 14th amendment and end this imbroglio. Instead, he is pursuing grand bargains which appear to undermine the legacies of Franklin Roosevelt, Lyndon Johnson, and other Democratic presidents of the 20th century.

    I will vote for him in November 2012 but ,if he should agree to raise the age for when people get Medicare or otherwise limit fundamental social programs, I will not do any campaign work or donate to him. And if he does such things and there is a progressive primary challenger, I will work for and donate to that candidate.


  6. Michael says:

    It’s pretty obvious at this point that Obama wants to use the Repubs as cover to gut Social Security, and the real fight is over whether or not they’ll let him.

    A clean debt limit bill is unacceptable to either Obama or Boehner.


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