I really dislike writing about national politics, as it is too polarizing and tends to induce meaningless partisan debate. Sometimes though, you just cannot avoid it, and this week really is about the national calamity that faces this nation.
Still, history will judge Obama on how he reacted in a time when the nation was at a low point. I am not going to tell others what to think of Obama, I think like anyone he is complex and a mixed bag. But I know how I will judge him.
I will judge him on the debt ceiling crisis. He had a choice: he could solve the problem of the debt ceiling as Harry Truman had and simply raise it. Or he could bargain and eventually capitulate. That is what he did. What we now see, in this nation with teetering financial markets and gloomy forecasts, are the result of that capitulation.
The problem I face is that I do not exactly have anywhere good to go. I am fundamentally opposed to the other side of the aisle. I think most third parties are naïve at best and dangerous at worst.
The crisis was in every single way self-inflicted and I am reminded of Star Wars I, in that this was the phantom menace and I am not even sure who was pulling the strings behind the stage on this one. It may have been stupidity matched with sheer stupidity.
Because, while the President may go down as Capitulator in Chief, Republicans are just plain reckless.
I can see my conservative friends and readers saying, here we go, blame the Republicans. The truth is, I blame both sides and I just laid out exactly where and how much blame Obama gets. Now it’s the Republican’s turn to take their lumps.
I saw the comment from someone lamenting on how horrible it was trying to balance the budget. I think I have established myself as a guy who would be pretty fiscally responsible. I agree we need to move back toward the balanced budgets we had 20 years ago in the 1990s.
But I am not sure that in the depths of the worst recession since the great depression is really the time to be cutting spending in massive amounts. And I am very much believing that you do not risk the full faith and credit of the United States of America to do this.
That is what happened. It is a fact. We will be paying for this, perhaps forever.
Last night the S&P (Standard & Poor’s) removed the United States government from its list of risk-free borrowers for the first time ever. It’s not exactly clear what that means other than symbolically.
As the New York Times reports this morning, “It described the decision as a judgment about the nation’s leaders, writing that ‘the gulf between the political parties’ had reduced its confidence in the government’s ability to manage its finances.”
“The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenge,” the company said in a statement.
What does that mean? Well it could mean that investors would demand higher interest rates from the federal government which would raise costs of borrowing. That’s not a good thing.
“What’s changed is the political gridlock,” said David Beers, S.& P.’s global head of sovereign ratings. “Even now, it’s an open question as to whether or when Congress and the administration can agree on fiscal measures that will stabilize the upward trajectory of the U.S. government debt burden.”
However, experts say that the fallout could be relatively modest and “because Treasury bonds have always been considered perfectly safe, many rules prohibiting institutions from investing in riskier securities are written as if there were no possibility that the credit rating of Treasuries would be less than stellar.”
This pales in comparison to what would have happened had there not be a raising of the debt ceiling. The message has been sent.
As one columnist wrote, “I still think it was terribly wrong for the Republicans to use the threat of default to insist on massive spending cuts, though President Obama also deserves blame for playing his hand so poorly.”
He added, “Putting on my pragmatist hat again, I also think Congress could not have chosen a worse time to rein in spending. Yes, the country’s enormous debt – and the entitlement programs that are driving the federal deficit – needs to be brought under control.”
You have to consider how poor the economy is and then ask whether “choking off spending” will make matters worse. That is what we have done.
Again, this is not just about blaming Republicans. They had the wrong policy, but Obama mishandled the crisis, which he could have put a stop to immediately.
From the left, the criticism has been deafening. Liberal economist Paul Krugman wrote that the Obama administration has insisted that the economy was on the mend.
“But,” he wrote on Thursday before this mess reached full-force, “the economy wasn’t on the mend. Yes, officially the recession ended two years ago, and the economy did indeed pull out of a terrifying tailspin. But at no point has growth looked remotely adequate given the depth of the initial plunge.”
He attacks both sides. First the Republicans: “Republicans won’t stop screaming about the deficit because they weren’t sincere in the first place: Their deficit hawkery was a club with which to beat their political opponents, nothing more – as became obvious whenever any rise in taxes on the rich was suggested. And they’re not going to give up that club.”
Then Obama: “But the policy disaster of the past two years wasn’t just the result of G.O.P. obstructionism, which wouldn’t have been so effective if the policy elite – including at least some senior figures in the Obama administration – hadn’t agreed that deficit reduction, not job creation, should be our main priority.”
He also blames the Fed: “Nor should we let Ben Bernanke and his colleagues off the hook: The Fed has by no means done all it could, partly because it was more concerned with hypothetical inflation than with real unemployment, partly because it let itself be intimidated by the Ron Paul types.”
The weirdest part, as pathetic as Obama looked in this crisis, he came out okay. Writes the Washington Post Friday, “Through the wreckage of the last month emerges Obama. Battered and bruised, for sure. But still standing.”
Perhaps it is just good by comparison. The Post reports, “Compared to Congress, Americans liked his handling of the debt-ceiling negotiations: 46 percent approve, 47 percent not so much. They trust him more to make the right decisions on the economy (47 percent) than congressional Republicans (33 percent). And they like job he’s doing, again relatively speaking. Obama’s approval rating rests at 48 percent.”
Meanwhile, Congress is at an all-time low, and considering they have been low for the 25 years I have watched politics, that is saying something. “At 82 percent disapproval, Congress has the highest negative rating in the history of the poll. Boehner’s job performance got a thumbs down from 57 percent of those surveyed. His approval rating is just 30 percent. Folks were none-too-pleased by the debt-ceiling mess. They didn’t like how anybody behaved. Not Republicans (72 percent). Not Democrats (66 percent).”
Those of you defending the Tea Party, you are a vast minority in this country, “And the disapproving view of the Tea Party, which has members of Congress who profess to do its bidding, continues to grow. The Times poll from April put the approve-disapprove at 26 percent-29 percent. Today, it’s 20 percent-40 percent. Not only that, now 43 percent think the Tea Party has too much influence on the GOP. In April, it was just 27 percent.”
Despite it all, President Obama may survive and gain reelection not because he has been a good President, but because the Republicans have been worse. They have focused on stupid things like the “birther” controversy. And they were reckless and nearly plunged the country into economic disaster for no good reason.
Moreover, the cast of characters that are lining up to take on the President next year are, shall we say, “challenged.” And that’s being kind. When Michelle Bachman is taken as a serious candidate, you are not about to unseat a sitting president.
Unfortunately, I take no solace in these numbers. I see a needless crisis and a void in leadership, and a Washington that has no idea what real people have to deal with on a daily basis.
They don’t feel our pain, they are simply playing a game. As Simon and Garfunkel once said, “Anyway you look at this we lose.” It is the Phantom Menace and the politicians have conspired to create a fake crisis because they want to distract us from focusing on the real one.
—David M. Greenwald reporting
Before the debt debacle even got rolling S&P had already warned in April that they might downgrade our credit rating. The ratings agencies wanted a 4 trillion cut package and Congress didn’t get anywhere close to that because the Democrats refused. This lowering of our credit rating falls largely on Obama’s shoulders as he has escalated the borrowing and spending and dug this hole much deeper that our nation is in now. Under Obama’s watch we’ve now suffered the first downgrade of our debt in our country’s history. Sorry, liberals can try and deflect the blame, but this happened 3 years into his presidency. Obama the community organizer is incompetent and has never run anything in his life. He’s now out campaigning and still muttering the same old tired cliches but is weakness as a leader is apparent unless you’re still blindly drinking his koolaid.
You completely whiffed on your read of this column if that’s your response.
David, you’re the one that completely whiffed on this column. It’s your usual headline, “I’m fair and blame both sides”, then you almost completely go on the attack of the GOP. You’re only problem with Obama is that he should’ve just raised the debt ceiling and not capitulated to any cuts. Are you kidding? That’s why we’re in this mess.
Yes I blamed both sides, this should have been stopped months ago, instead it was allowed to go to the brink, that’s on Obama. I never said was going to agree with the Republicans on the issue itself. If your primary concern is the deficit, then it should be carved into more equitably, but I think this is a very bad time to take money out of the economy.
Rusty49
Are you really asserting that our current fiscal state is a direct consequence of the Obama presidency? If so, I would suggest that you have misread not only David’s blog, but the entire history of the bilaterally poor decision making that preceded Obama’s election by many years.
David,
As I was reading your post this morning I recalled a management training session I attended in which one session centered around the strategy game “Win all you can”. This is a game of group collaboration vs competition in which you can work together as a group to earn points by always playng “Y”cards or you can sabotage the members of your own team and steal their points to increase your individual score by playing an “X” card. There are two major learnings from this game. The maximum number of points will be accrued by a group if no one ever plays an X card and the individuals scores, while all the same, will top those of any other group. The second learning is that you cannot be a “Y” card ( or collaborative player ) in an “X”card driven game without being taken advantage of. I think Obama’s major failing is that he is a “Y” card player in an “X”card game. I think he, rather naively believes, even after three years that he is dealing with other individuals who are ultimately reasonable. After three years of listening to Republican leadership who stated outright that their major goal was not jobs, or the deficit, or he overall well-being of our country, but rather the defeat of Obama, I am hard pressed to see how he could still believe this, but I suppose we all have our delusions . After all, I played my Y cards all the way to the end.
Medwoman, would you like some ice with that koolaid?
Obama’s “capitulation” is strategic and reflects his basic political thinking.The Republican House Speaker was in serious danger of being rejected by the more radical Republican House elements and probably replaced with Cantor, giving the Tea Party control of the House and guaranteeing permanent political gridlock for the rest of Obama’s first term. Obama’s “capitulation”, touted by House Speaker Boehner as giving him “”95% of what he wanted(whether really true or not)” has silenced, for now, this threat to remove him as Speaker. Obama feels that he can work with Boehner if the House Speaker is not politically “on the ropes”.
“Medwoman, would you like some ice with that koolaid? “
You’re already conceding logic? The day is still early.
Davisite: As Medwoman points out in her cards game analogy, the dominant strategy now is not compromise, it’s isolating the Republicans, that’s how he wins. At such, Boehner’s deposed would have helped. I find the idea that Boehner is now a voice of moderation appalling.
A question to all you fairminded? liberals:
If a plan had passed that either led to a cut of 4 trillion dollars or eventually led to a balanced budget would our credit rating have been cut?
Political analysis of the national scene is always problematic as it is short on information of what goes on behind closed doors. It generates a feeling of frustration that we, the voters, have extremely little control and input into the decisions that will effect our lives. Local politics is another story entirely, especially in Davis, where we CAN have a major say in the decisions that will impact our community. Proceeding with the surface water project NOW is such a decision.Let’s collect the signatures required to put this issue directly before the Davis voters.
[quote]I really dislike writing about national politics, as it is too polarizing and tends to induce meaningless partisan debate[/quote]
Indeed–enough said, but since we are on the topic a couple of comments:
1. I voted for Obama in the primaries and general election (voted McCain in previous primary so I am not a knee-jerk democrat). Some of my friends told me Hillary would have been a better President. Of course we will never know but I think they were right. We need a tough MF to deal with Congress; Obama isn’t.
2. The S and P AA rating is a joke. Italy has a AA rating. Our debt is denominated in dollars which we control, so while we may print our way out of the problem we will not technically default. Italy probably will imho since the ECB will eventually get bailout fatigue. These are the same clowns who rated toxic mortgage debt AAA. Some of the smart money is betting that treasury yields may actually fall Monday (opposite of what ought to happen)–we’ll see.
To keep the discussion somewhat real here are some figures to keep in mind-
Deficit when Bush entered offce $5.7 tril
Deficit when Bush left office $10.4 tril – and of course when Obama started
Current Deficit (under Obama) $14.3 tril
So under Bush the deficit increased $4.7 tril
and so far under Obama the deficit has increased another $3.9 tril
What are some of the contributors toward the $8.6 tril (combined Bush and Obama cumulative deficits)
Unfunded wars $1.5 tril
Tax cuts $2.2 tril
Stimulus packages $1.6 tril (Bush and Obama each had stimulus packages of almost equal size)
Increased debt service $1.0 tril (interest costs)
Down Revenue (due to recession) and other spending $2.3 tril (under both Administrations)
The problem is the national debt is rising at an increasing rate, the economy is still sluggish and people are saving instead of spending.
If you look at this picture it is obvious both parties contributed to the problem and both parties need to fix the problem.
correction–voted McCain in 2000 primary
[quote]The problem is the national debt is rising at an increasing rate, the economy is still sluggish and people are saving instead of spending.
If you look at this picture it is obvious both parties contributed to the problem and both parties need to fix the problem. [/quote]
Alphonso: Well said.
I’d also add that many people expect something for nothing. Tax revenue as a percentage of gdp is only 15%–as low as it has been in postwar era, while govt spending is at 25%. that is a 10% gap. The only way to meaningfully change this is to cut entitlements (in particular Medicare) and probably raise taxes.
But during the big kabuki that has become our Congress, citizens were writing, calling and emailing their congresspeople 99 to one–don’t touch Medicare. We have met the enemy and he is us (pardon the grammar).
“If a plan had passed that either led to a cut of 4 trillion dollars or eventually led to a balanced budget would our credit rating have been cut?”
We could also argue whether if the situation had not been pressed to the brink whether we would be here. To me you are ignoring a lot. Republicans wants to get there without any sort of notion of compromise.
I happen to believe that the policy is exceedingly stupid. Republicans are against taxes because they argue it takes money out of the economy. Most of the time it merely transfers money within the economy. But it’s also not clear to me why Republicans believe that taxes are worse than spending cuts. In essence, you are taking money out of the economy. In this case, you are taking money out of the economy and not sending it anywhere. So you are advocating contracting the economy by $4 trillion during a time when we may be growing at a rate of .5 to 1% – are you really trying to create a depression? Because that is what it appears to be doing.
I’m going to say this early in the discussion so people aren’t shocked when their posts get pulled:
Do NOT attack other blog participants directly. Stick to the topic.
[quote]He added, “Putting on my pragmatist hat again, I also think Congress could not have chosen a worse time to rein in spending. Yes, the country’s enormous debt – and the entitlement programs that are driving the federal deficit – needs to be brought under control.”[/quote]
You cannot have it both ways – “could not have chose a worse time to rein in spending; the federal deficit needs to be brought under control”…
[quote]”But,” he wrote on Thursday before this mess reached full-force, “the economy wasn’t on the mend. Yes, officially the recession ended two years ago, and the economy did indeed pull out of a terrifying tailspin. But at no point has growth looked remotely adequate given the depth of the initial plunge.”[/quote]
The media spin that has been going on has been disgraceful. There is no way the recession was ever over, no matter what the media said, or the economic indicators (which are largely a joke), etc. I watched what was going on in CA, knew it must have been going on in every other state – the horrible budget cycles with horrendous drops in tax revenue. Anyone w an ounce of brain knew the recession was not over. But the political spinmeisters for the liberals, who so desperately want Obama re-elected, refused to stop their obfuscation, deception. Paul Krugman was one of the worst in this regard…
[quote]The weirdest part, as pathetic as Obama looked in this crisis, he came out okay. Writes the Washington Post Friday, “Through the wreckage of the last month emerges Obama. Battered and bruised, for sure. But still standing.”
Perhaps it is just good by comparison. The Post reports, “Compared to Congress, Americans liked his handling of the debt-ceiling negotiations: 46 percent approve, 47 percent not so much. [/quote]
Sure Obama came out okay, just like the recession was over 2 years ago. LOL I don’t believe these statistics for one minute…
[quote]Those of you defending the Tea Party, you are a vast minority in this country, “And the disapproving view of the Tea Party, which has members of Congress who profess to do its bidding, continues to grow. The Times poll from April put the approve-disapprove at 26 percent-29 percent. Today, it’s 20 percent-40 percent. Not only that, now 43 percent think the Tea Party has too much influence on the GOP. In April, it was just 27 percent.”[/quote]
Had it not been for the Tea Party (and I am no lover of the Tea Party for a number of reasons), we would have had serious consideration of another round of stimulus money going out Congress’ door… that seemed to be the Democrats solution to the jobs problem – I could not believe it, after the abysmal showing of the last round of stimulus money. The one thing the Tea Partiers did that was positive is insist that we start addressing fiscal responsibility – something both sides of the aisle have not really been willing to tackle in a serious way.
As far as taxing the wealthy, I would have let the Democrats have that bone, if only to prove it would not make a dent in the national deficit. The bigger issue is why companies like GE are paying no tax and getting tax credits…
[quote]Despite it all, President Obama may survive and gain reelection not because he has been a good President, but because the Republicans have been worse. They have focused on stupid things like the “birther” controversy. And they were reckless and nearly plunged the country into economic disaster for no good reason.[/quote]
And you are not blaming Republicans? LOL The fact of the matter is Obama never would stick his neck out and put a plan on the table. He wanted others to do his dirty work for him, so that he could stay above the fray and point fingers elsewhere. Obama loves to play President, he just doesn’t want to BE PRESIDENT – w all its attendant risks and responsibilities. He did the same thing with ObamaCare – no plan himself, just left it up to Congress to somehow work it out. Same thing w banking regulation. And now his lack of leadership has come home to roost. Parts of the Dodd-Frank regs have been declared unconstitutional. Parts of ObamaCare are trickling out that are truly frightening… particularly the costs.
Obama has never understood that by over-regulating business and the health care industry, he has frightened business (or given them the excuse they need) to horde money rather than create jobs. Meanwhile he has not done a single thing to stop robo-signing; robo-courts or other disgraceful myriad evil practices of the banking industry and Wall Street. And healthcare is very unlikely to improve under Obamacare, but be much more expensive, as favorite businesses with union ties are being allowed to be exempted from Obamacare.
[quote]Unfortunately, I take no solace in these numbers. I see a needless crisis and a void in leadership, and a Washington that has no idea what real people have to deal with on a daily basis.[/quote]
What has happened is the moderates have left Congress. What we are left with is polarized opposites who act much like children in a sandbox throwing things at each other, and a feckless leader who hasn’t a clue what to do. In part, I blame the media, for glorifying 60 second sound bites of the extremists, while largely ignoring the moderates. Most of the country is in the middle, not on the extreme left or right.
[quote]The problem is the national debt is rising at an increasing rate, the economy is still sluggish and people are saving instead of spending.
If you look at this picture it is obvious both parties contributed to the problem and both parties need to fix the problem.[/quote]
AMEN! But you also have to look at what underlies the problem. Obama keeps villifying business, as he allows companies like GE to get off scott free with paying no taxes. I don’t begin to understand why GE is paying no taxes and actually getting tax credit. Something is very wrong w this picture. If someone can explain this to me, please do…
Another problem this country is having w jobs is the outsourcing problem. Businesses are in front of Congress as we speak, begging to be allowed to hire qualifies employees FROM OTHER COUNTRIES, BC THERE ARE NOT ENOUGH QUALIFIED EMPLOYEES HERE. Microsoft is one of the companies making this pitch. We have a sea of unemployed, and yet we are going to go overseas to hire? We are outsourcing basic services like computer and telephone assistance to India and other third world countries. This is a dangerous precedence – this is very much a part of why there are no jobs here – they are being outsourced…
A few points:
1. I agree with ERM, the recession hardly ended when obama took office. Krugman’s take on this is horse do do.
2. Let’s not forget all the stimulus that was injected into the economy to turn it around, which clearly has not done so. It seems spending increases are not exactly the answer.
3. I think spending cuts are problematic, but so is debt ceiling raising. What are we prepared to do? Borrow and spend forever?
4. I take issue with the statements “now its the republicans turn to take their share of the blame” as if they haven’t been blamed numerous times already. George W. Bush is still often a target, and its almost three years since he has been out of office.
[i]”But I am not sure that in the depths of the worst recession since the great depression is really the time to be cutting spending in massive amounts.”[/i]
We have not yet had any massive cuts. According to the plan agreed to last week, we will not have any massive cuts in the next 10 years. The plan calls for $900 billion in reductions in planned increases over a decade. In other words, our borrowing is going to continue apace.
The problem in our economy is not a lack of federal spending. The problem in our economy is a massive build-up of housing inventory, one which keeps getting worse as banks try to sell off foreclosed properties.
The problem in our federal budget for the long-term is threefold:
1. We spend too much on healthcare for the elderly (Medicare) and the poor (Medicaid);
2. We spend too much on weapons systems and defense personnel; and
3. Social Security. Even though it is true that the taxes collected to pay for SS have exceeded the amounts spent up to now, we are already running a pretty large SS deficit this year ($45 billion) and it is going to grow exponentially for the next 20 years.
I don’t know all the answers to these 3 problems, but I think part of the overall solution should include:
1. Reducing the amount we spend on old people for medical care in the last year of their lives. Keeping people breathing, as opposed to living well, is a huge part of the cost of Medicare;
2. Get out of Libya, Iraq and Afghanistan as soon as possible, and then cut the defense appropriations in half and then a few years later in half again.
3. Gradually ratchet up the age for which a person qualifies for Social Secruity. As the elderly form a larger percentage of our national population and as they live longer, that starting age needs to slowly rise until we meet a point of equilibrium.
[i]”Reducing the amount we spend on old people for medical care in the last year of their lives. Keeping people breathing, as opposed to living well, is a huge part of the cost of Medicare;”[/i]
For anyone interested in my claim, I found this number: 27% of the Medicare budget goes to patients for the last year of their lives. The source is the USA Today in 2006 ([url]http://www.usatoday.com/money/industries/health/2006-10-18-end-of-life-costs_x.htm[/url]): [quote]”There’s a tremendous opportunity for both improving quality and enhancing efficiency in the care of people with very serious illnesses at the end of life,” says geriatrician Joanne Lynn, who spent much of her career at think tank RAND studying end-of-life care.
She says substantial progress could be made in slowing rising costs if the U.S. health system could find better ways to reduce hospitalizations for people at the end of life, such as providing more in-home services.
[b]The Estimates show that about 27% of Medicare’s annual $327 billion budget goes to care for patients in their final year of life.[/b] [/quote] In my personal experience with one of my aunt’s dying from cancer, I have a stark memory of how much money her doctor’s were trying to waste in her final days. Rose was two or three days from death and her oncologist in Palo Alto ordered an MRI, which at the time cost more than $1,000. Fortunately, her oldest son was a medical doctor himself and knew enough to say no, to say the MRI was medically unnecessary. I later tried to figure out why that doctor ordered an MRI for a patient so close to death. I don’t know, but my guess (having spoken with my cousin who made the decision to not have it) is that the doctor was doing what so many doctors do: he was making a financial decision, not a medical decision. Either he believed that not ordering an MRI would put him at risk for a malpractice lawsuit or he made money from the radiologists when he ordered MRIs and other such tests.
Rich
I had to respond right away since we have the unique situation where I agree with you, almost completely. On all counts ! With a couple of caveats.
1) Amount of health care spent upon keeping the extremely elderly and terminally ill alive is a futile and exorbitant cost. I have a few suggestions for lowering these costs : 1) Invest in prevention. Since the bulk of our medical costs is devoted to the sequelae of a relatively few,and largely preventable conditions ( cardiovascular disease, diabetes, cancer and chronic respiratory conditions) prevention would save us trendous amounts of money. 2) Provide care outside of the Emergency room and keep patients out of the hospital. again, a little bit of money spent on early intervention would save us huge and unnecessary expenditures in the long run especially by preventing hospital acquired infections and other complications of over treatment. 3) Seriously take on the issue of tort reform. Defensive medicine is still very much with us.
I am relatively protected because of the group within which I work. But, this is a huge source of unnecessary testing and “just in case” treatments in the fee for service world. 4) Provide universal palliative and hospice care so that the elderly and terminally I’ll never have to make distasteful and expensive decisions out of fear of or actual suffering.
2) Complete agreement on this one
3) Agree with the goal overall, but am not so sure about the unintended consequences. A limited example from my field.
As recently as four to five years ago we had a nursing shortage which was so acute and severe that we, and most hospitals, were casting around desperately for nurses. We were bringing in fliers for short term stints for however long they would stay, recruiting new nursing grads from the Phillipines and other foreign nursing schools, and, most pertinent to this discussion were encouraging basically anyone educable and with so much as a glimmering of interest to go in to nursing. Move forward 4 years and one major recession and what has happened is that many nurses who were planning to retire didn’t , others who had gone to part time increased their hours. This has happened in nursing in California to the degree that one recent applicant, known to me personally applied for one of 3 opening along with 2,000 other completely qualified applicants. I don’t know if these kind of numbers would be representative of the wider economy, but they are certainly sobering.
[quote]1. We spend too much on healthcare for the elderly (Medicare) and the poor (Medicaid);
2. We spend too much on weapons systems and defense personnel; and
3. Social Security. Even though it is true that the taxes collected to pay for SS have exceeded the amounts spent up to now, we are already running a pretty large SS deficit this year ($45 billion) and it is going to grow exponentially for the next 20 years. [/quote]
1. One of the problems w healthcare costs is all the unnecessary tests that are done…
2. Ironically the two things that drive our economy are DEFENSE SPENDING (DEVELOPING AND BUILDING WEAPONS) and CHRISTMAS. Don’t believe it? 50% of most retail companies’ sales profits are from Christmas. Defense spending is much like the oil industry – it provides jobs, jobs, jobs, and not just for the defense industry itself, but all the offshoots like the restaurants that surround the R&D companies, etc.
3. Social Security is NOT AN ENTITLEMENT PROGRAM, IT WAS EARNED. But unfortunately previous administrations (e.g. Clinton) have raided SS using it as a slush fund, put IOUs in the place of the funding they took, and never paid the funds back.
But it’s also not clear to me why Republicans believe that taxes are worse than spending cuts. In essence, you are taking money out of the economy. In this case, you are taking money out of the economy and not sending it anywhere.
David, that borrowed money has to be paid back with interest. Where do you think the money comes from to pay the debt back. OUT OF THE ECONOMY
“2. Let’s not forget all the stimulus that was injected into the economy to turn it around, which clearly has not done so. It seems spending increases are not exactly the answer. “
That conclusion is over used. The stimulus did not do everything that was hoped for, but it kept us from falling off a cliff. Companies like GM and CITI would have gone under and the housing market would have been worse without stimulus. Remember both Presidents spent about $800 bil each on their stimulus packages. Also more money escaped as a result of the tax cuts than the stimulus programs and that also was intended to stimulate the economy and increase opportunities for more jobs. Have tax cuts worked any better than the stimulus plans?
Good summary of the current situation, David. With the addition of Rich’s (and others’) excellent research, we get a good handle on how we got here and why.
No need to be concerned about the polarizing debate associated with national politics–politics is partisan. And your local topics, including almost every Judicial Watch story, expose an even wider philosophical/partisan gap amongst readers.
I would, however, fire your headline writer. She almost never gets you right. She misunderstands the points you’re making in an article, sensationalizes beyond believability and misleads readers into a story that’s nothing like what she’s promised. She should be all out of second chances.
Elaine ,
“You cannot have it both ways- ‘could not have chosen a worse time to rein in spending : the federal deficit needs to be brought under control”
this is not a matter of having it both ways. it is a matter of recognizing that there is another option which many of us think would be a necessary part of a balanced approach which would be to increase taxes or at least close loopholes. Would this solve the problem?
No, not alone. But then no one is proposing “tax and spend “alone although that is what many of the Tea Party persuasion would like to claim.
“As for taxing the wealthy, I would let the Democrats have that bone, if only to prove that it would not make a dent in the national deficit”
I would like to quote you on this one. “Every penny counts”
“Obama would never stick his neck out” This has been a major disappointment for me on many fronts. I wanted a single party payer option, the immediate end to the discriminatory anti gay policy of the military, a prompt start on the winding down of all foreign wars, a commitment to a comprehensive immigration policy …… So many disappointments ! However, I do not pretend to have inside knowledge of why he does what he does and I doubt that you do either. As I posted earlier, I believe it is because he genuinely believes in amoretti collaborative form of government with a less directive executive. I believe this based on his words prior to his election, and his actions since. I am aware that this is not what you believe, but I doubt that either of us have a direct “in” to his thought processes.
[i]”Companies like GM and CITI would have gone under and the housing market would have been worse without stimulus.”[/i]
You are confusing the TARP with the Obama stimulus package in this example.
[i]” previous administrations (e.g. Clinton) have raided SS using it as a slush fund”[/i]
I’m interested to hear an actual case where this occurred.
The unfortunate fact is that the outlays for Social Security are now higher than the amounts paid in. The deficit this year is $45 billion. That deficit is going to grow and grow.
So we have a few choices: we can just print money and make it worthless; we can slowly ratchet up the age of eligibility; we can lower the benefits; and we can take some or all of it away from wealthier old people.
My own view is that, as the elderly are a larger share of our total population, moving the age of eligibility up a few years (toward 70) is the most reasonable change. (For equity purposes, we could have a lower number for those who worked most of their lives in jobs like farm labor, mining, ditch digging and so on, which they cannot do past age 65 and lack skills to change over to softer jobs.)
I am also not against the idea of making Social Security more of a welfare program than it already is. For those of you who don’t understand how the payments work, the return on investment for Social Security recipients is almost double for those on the low end than it now is for those on the high end. In other words, the people who pay the most in get back at age 65* a return which is far lower as a percentage of the amount paid in than those who paid in the least, even though in absolute dollars the higher end payees get checks which are higher. That makes it a wealth transfer program to some extent.
I am all for a wealth transfer program. That helps us get rid of poverty among the elderly. It seems to me we could make this transter in the future even greater. One way to do that would be something like a wealth test: disqualifying all seniors with a total wealth of $2 million or more from receiving any Social Security payments. The percentage of seniors with $2 million or more is probably under 20 percent. That leaves more money for the 80% who are poorer.
I realize, of course, that conservative Republicans are never going to accept a wealth test. I am simply advocating it because it is a way to keep Social Security afloat for those who need the money the most.
[i]”the people who pay the most in get back at age 65* a return which is far lower as a percentage of the amount paid”[/i]
*There is a mitigating factor in this. How much of a difference in makes collectively, I do not know. The mitigating factor is that wealthier people live longer.
If you divide our population into five quintiles, the bottom (poorest) quintile lives the shortest, the second from the bottom lives a bit longer, the middle longer than the lower two and so on.
As such, because those in the highest income quintile live the longest, it is possible that they end up getting as much or more of a return on the money they pay into Social Security than those whose percentage return is higher.
To see this on a small scale you can take two people: the first never made much money and gets a Social Security check which represents for him a 6% ROI beginning at age 65. Say he dies at 72; the second person made a lot more money (and for that paid in more to SS and gets a check worth an ROI of 3%. Say the second person lives to age 95.
Even though the second person’s checks would have been higher at the start if SS were not a wealth transfer program, she certainly will get a much better ultimate return on Social Security just by living that much longer.