Meeting the Federal Deficit Challenge Stephen Levy's Economy Blog, posted by stephen levy, a resident of the University South neighborhood, on Apr 9, 2011 at 1:27 pm stephen levy is a member (registered user) of Palo Alto Online
Last night we met the small dollar and ideologically charged challenge of passing a federal budget for the 2010-11 budget year.
Now Americans face the challenge of meeting the tougher big dollar challenges of preventing high deficits and surging interest costs over the next two decades.
Two-thirds of the federal budget is in five categoies--Social Security and defense at aorund $750 billion, Medicare at $500 billion and Medicaid at $300 billion and interest at $200 billion.
Virtually ALL of the growth in the budget and projected deficits over the next decade are in Social Security, Medicare, Medicaid and interest. As the deficits persist, for example, interest payments surge from $200 billion to $900 billion.
Who favors having higher income residents contribute to reducing the deficit through a) raising the tax base that supports Social Security as we have for Medicare, b) increasing payments by higher income residents for part B Medicare benefits--a practice already started under George Bush, c) resinstating the reductions in exemption and dedcutions recently ended for 2010-12 and d) perhaps reducing benefits under Social Security and Medicare for higher income recipients?
As a lcoal example, who favors pension reform that makes the largest benefit reductions go for future higher income retirees as opposed to across the board benefit cuts?
Both of these approaches seem reasonable to me along with many other changes that will have to be made to balance future budgets.
Posted by Fragile economy, a resident of another community, on Apr 9, 2011 at 5:04 pm
A couple quick points:
* Social Security does not, and has not added to the deficit. Any future issues can be solved by removing the cap on wages subject SSI tax, currently capping around $110k, I believe. That makes SS solvent for the foreseeable future at CURRENT benefits.
* A return to the prosperous Clinton era economy with strong revenues would eliminate the deficit in time and lower overall debt to a sustainable percentage of GDP. We must "refudiate" Dick Cheney's philosophy of "Reagan taught us deficits don't matter"
Do so by the PROVEN method: remove the Bush era slashing of the cap gains rate, return to Clinton era tax rates (up a lousy ~4%) for incomes over $250k.
Invest in infrastructure and rebuilding America, and you will see a resurgence of middle class working families, and the resulting revenues will bring America ROARING back!
Tax cuts DO NOT create jobs! If so, why did Bush have the worst job creation record in current times.
Medicare? Paul Ryan's plan does NOTHING to contain costs. He wants to privatize it with VOUCHERS so private, for profit insurance companies can get their mitts on it. It will destroy Medicare. I'd love to see a poll of seniors on this.
ObamaCare started the process of lowering costs in Medicare.
Go the rest of the way with a Single Payer plan. The rest of the industrialized world offers a higher quality service to a broader population with proven better results.
Why do some people think we have to offer reduced quality at a higher price? That doesn't seem like the American way to me.
America can do better than having the most expensive system in the world, yet only achieving a quality index in the mid thirties (as rated by infant mortality and life expectancy.)
Posted by Carole, a resident of the Southgate neighborhood, on Apr 9, 2011 at 5:29 pm
After the ObamaCare bill passed, my medical insurance premiums jumped more than twice the previous rates, and those previous rates were ot of this world! ObamaCare is not the answer. Obmama lower rates, and that is a complete LIE!
Taxing the rich is not the answer. That just kills job creation. My father used to work at Caterpillar, in Illinois. He had a good blue collar job, and my family did OK. Caterpillar is now talking about leaving Illinois, due to high taxes in Illinois, and the USA.
Posted by Fragile economy, a resident of another community, on Apr 9, 2011 at 5:39 pm
I left out the reinstatement of the estate tax in the above post. I see no reason for Paris Hilton to get a free ride, collecting dividend checks at reduced capital gains rates. Much of what gets passed on in large estates these days has never been taxed, due to various loopholes and tricks.
Another cute little idea is a corporate flat tax. While I'm against regressive taxes for working Americans, I'd consider it for the real scoflaws.
Such as Exxon or GE, and a third of the Fortune 500 that pay ZERO taxes. Do a google on GE's 2010 tax bill on $15 BILLION in profit.
If you want to be sick to your stomach, that is...
But the most fun when discussing this subject is using an actual calculator to reduce the deficit, rather than bloviating about farm subsidies or other corporate welfare, or foreign aid, etc...
Saw this on another of Mr Levy's posts:
Published: November 13, 2010
Budget Puzzle: You Fix the Budget
Today, you’re in charge of the nation’s finances. Some of your options have more short-term savings and some have more long-term savings. When you have closed the budget gaps for both 2015 and 2030, you are done. Make your own plan, then share it online.
Missing some things, like removing the SSI tax cap for the wealthiest Americans, and not as current as it could be, but still fun.
Posted by Fragile economy, a resident of another community, on Apr 9, 2011 at 5:47 pm
"Taxing the rich is not the answer. That just kills job creation."
That's a myth.
Bush cut taxes, and we saw employment PLUMMET, and deficits skyrocket, even though his Heritage based "studies" said the opposite. Even Bush's father said the same thing in the 1980's, calling it Voodoo Economics, with the ridiculous Laffer Curve and all that clap.
Paul Ryan is using the same voodoo economics in his plan.
Paris Hilton doesn't create jobs when she invests in mutual funds. She may hire servants, or even buy a slightly bigger yacht (made overseas!) but she doesn't stimulate the economy the way building a school, a bridge or a power plant does.
Studies show that you get FAR more stimulative activity with unemployment benefits than tax cuts for the wealthiest.
Posted by Anon, a resident of Another Palo Alto neighborhood, on Apr 9, 2011 at 7:52 pm
Medical Care is the elephant in the economy room. The cost of providing the poor and elderly medical care is the root of the current budget issue and the growing issue in the future. Corporations are now very mobile and adept at playing off the states against each other, as well as outsourcing to foreign countries, so, I don't see how we can avoid having a national healthcare policy, whether you want to call it ObamaCare or RomneyCare or whatever.
Posted by stephen levy, a resident of the University South neighborhood, on Apr 10, 2011 at 4:18 pm stephen levy is a member (registered user) of Palo Alto Online
There have been a couple of modest proposals from posters that go in the direction I was asking about.
One is to make the Social Security tax base like the Medicare tax base--that is apply it to all incomes.
Another is the idea to require a copay for Medicare. If there were a way I would have a copay for all and one that was higher for higher income seniors following the move by George Bush to make Part B premiums rise with the recipient's income.
I do believe along with all of the bipartisan efforts for long-term budget reform that higher taxes are part of the mix.
I am looking for the fairest way to do this consistent with maximizing incentives for the economy.
I do not think that the federal, state or local budget problems can be solved primarily by raising taxes on businesses although there are reforms in federal/ state deductions and tax breaks and commercial property assessment at the local level that have merit, partly for raising revenues and partly for reducing tax rates.
If you want the rich to invest less in Caterpillar, thus putting additional forcing factors to push CAT abroad, you might have a formula for success. However, this just means fewer jobs for American middle class workers.
Posted by ten18, a resident of Another Palo Alto neighborhood, on Apr 11, 2011 at 9:30 am
It would be interesting to know how many of the posters on this thread actually make over $250K (which isn't a lot of money in this area BTW). It's really easy to spend other people's money. . . Why is it that the only answer is to RAISE taxes on a few, when we should be BROADENING the tax base? The "rich" already pay more than their fair share, while far too many - even in the middle class - pay very little!
Posted by Fragile economy, a resident of another community, on Apr 11, 2011 at 9:58 am
The discussion was on the federal top rate, not state. Caterpillar "suggesting" they "may" move "some" operations to other states is over the state tax issue and probably a negotiating ploy for individual tax breaks or other state giveaways. Maybe they're jealous of what Boeing got for moving to Chicago a while back.
re: investment in Caterpillar stock by uber wealthy folks, the purchase of that stock does NOT benefit Cat. They are already public.
Posted by stephen levy, a resident of the University South neighborhood, on Apr 11, 2011 at 10:44 am stephen levy is a member (registered user) of Palo Alto Online
I think the two large components of federal budget reform are 1) finding ways to reduce the potential deficits in Social Security, Medicare and Medicaid and 2) raising revenues as part of the solution.
For the raising revenue part, I favor a return to the Clinton-era tax rates--a point you have raised above. You make a good point that we had prosperity and job growth with these slightly higher tax rates.
I don't totally agree with Obama that folks making $150,000-$250,000 should be fully insulated from some higher tax rates or limits and deductions.
As for the business tax point you raise, I don't know enough to judge whether GE, for example, is benefiting from some leagl tax breaks that might be reexamined like we should rethink tax breaks for farmers and oil companies.
As for Medicare and Social Security, that was the main point of my post that there need to be reforms (health care cost containment is the biggest and hardest) but in these reforms I think it is reasonable to ask more affluent seniors to take more of the reductions.
FYI, all of these reductions would, if put into place now, affect me. I generally do not feel right about asking people to share in something that I do not or am not willing to share in.
Posted by Anna, a resident of the Downtown North neighborhood, on Apr 11, 2011 at 10:47 am
Fragile says he wants to tax the rich at the Clinton rates to raise One Trillion dollars over 10 years. Even if this static analysis accurately stated the amount of revenue raised by such a tax increase - which almost surely it does not - this would raise only enough to fund about 10% of Obama's projected ($9.5 trillion) deficits over the same 10 year period. Even raising ALL taxes to Clinton era rates - including those of the Poor and Middle Class - would raise only $3 Trillion over 10 years: less than a third of what Obama plans to spend. We can't tax our way out of this spending morass no matter how much socialist-leaning citizens like Mr. Levy would like to do so.
The real question is how and where to cut entitlement spending. Mr. Levy is right that that's where the money is. But he misleads when he pretends that most - or even a significant part - of the deficit gap can be closed through taxing the rich. The real question is how to cut. This tax stuff is a sideshow from an economic standpoint though it may be good fodder for demagogic class warfare rhetoric like that we see here.
Posted by ten18, a resident of Another Palo Alto neighborhood, on Apr 11, 2011 at 12:09 pm
Favoring a return to Clinton-era tax rates is one thing, but Mr. Clinton wasn't dealing with what our current "Present" has referred to as "the greatest economic downturn since the Great Depression." Yeah, Clinton caught the end of the dot-com bust, but that was nothing like this. So, we'll add higher federal taxes to the already increasing hidden taxes of higher energy costs, inflation and a declining dollar. Boy, that'll get those jobs going! Any talk of higher taxes is just crazy . . . Cut the spending. It's unsustainable. Period.
Posted by Fragile economy, a resident of another community, on Apr 13, 2011 at 1:37 pm
"Obama Takes Ryan and the GOP to the Woodshed...He can barely suppress a laugh as he repeatedly points out how unserious (ryan) actually is." Funny. Mr Courageous Workout PX90 Cutie Pie's plan will never see the light of day. The more people crunch the numbers, the more they RUN. Love to see how many GOP rep's run from it at vote time.
Only the ones with seniors in their districts.
Anna: You are wrong about Bush tax cuts and the devastation it has had on the deficit numbers. Throw in a couple ridiculous wars (apologies to the 5,000 families that have lost loved ones,) add the Bush Great Recession, and that accounts for a huge percentage of the damage. Web Link
Let's go back to the Reagan tax rates. Or the Bush 41 tax rates.
Or go back to the Clinton tax rates AND Clinton spending. We have doubled defense spending from Clinton's golden economy because of some boxcutters.
Why in this time of "fiscal emergency" (GOP words) would they defend the top 2% from sharing sacrifice?
Posted by Ok, I will bite., a resident of the Green Acres neighborhood, on Apr 14, 2011 at 1:18 pm
To answer the question about Obama's speech....anyone who believes any of that demagoguery, I have some GREAT beach front property in Nevada to sell you.
Those who "believe" against all reason, history, facts and rational thinking that the way out is to tax more, not spend less, well...there is nothing we can do to help you.
My credit cards maxed out 2 years ago..no more rise in credit for me. My choices? Go bankrupt, or cut WAY back on what I was spending and begin paying off my debt. That meant a lot of sacrifice now, to prevent disaster later. We are very, very, very slowly paying down our credit cards. Of course, our home is under water, but we are paddling.
We made some, in retrospect, very poor choices, no doubt, based on false beliefs about what the future held. And now we are paying the price.
Our country is in the same boat. It is time to pay the price of very poor choices. We are like a family making $50,000/year, spending almost $90,000/year on borrowed money, and at our credit card limit of $350,000/year. ( to borrow from Tom McClintock.
The hilarious thing ( if it weren't so very sad that so many believe this would be the solution) is that we could simply confiscate everything everyone makes in this country above $100,000 this year...and it STILL wouldn't bring our budget into balance. And, of course, everyone would be very, very careful to not earn more than $99,999 next year. I won't go into the math, it is boring. Those of you mathematically inclined, check it out and get back to us.
This makes clear the huge myth that exists, that Obama and Dems keep promoting, that increasing taxes on anyone, let alone "the rich", would make any difference. And, of course, most rational people understand that the less "the rich" have to spend, the worse the economy gets from fewer jobs. Period. Unfortunately, we can't simply just wish jobs into production.
This means cutting our spending. Even cutting it to the level of 2008, when we were all screaming about "debt and deficit", at "only" 1/2 trillion per year ( which is partly what swept Obama and full dem control into office) would be a blessing, compared to the current 3xdeficit spending at 1.6 trillion, and 40% increase in our debt from 9 trillion ( which was already horrifyingly scary) to 14 trillion. The ironic thing is that so many of us conservatives were already completely furious at the out of control spending we saw, with Republican complicity, once the Dems took over the House and Senate in 2006...we were on the same side with the leftists who were angry in 2008.
For all the nauseating fear mongering of the worst kind in Obama's speech, about Down Syndrome and Autistic kids, elderly etc "fending for themselves", basically bringing the same old stupid fears from the same old stupid playbook, trying to play on ignorant kindness, the bottom line is we are on the Titanic heading for the iceberg of bankruptcy if we don't change fast and change drastically.
The speech completely ( and in my opinion irresponsibly) disregarded the effect of a total collapse of the entire system if we don't pare back drastically right now to assure that we have at least a bare minimum for all who need it. I prefer to have a way to guarantee a bare minimum, a roof, food, minimal health care, for the needy in the future, than a guarantee of collapse, leading to nothing for anyone. Yes, many people have family who would band together and help each other out, as we have since the beginning of time, but I worry about those without anyone at all. Yes, we have a very generous mentality in America, one which gives of time and money to help those without, but if we are all struggling, how much will anyone have left to help? Or will we just turn into a 3rd world country?
The time for greediness is done. We can no more have the "gimmes" rule the culture and our budget, wanting everything all the time. We have to cut back to only what is necessary.
We are now, in this country, at the point where only 60-70 million of the 300 million living here are producing something that we then pay taxes on to pay for ALL the government, from military to social welfare. The rest of the employed are being paid by...taxes, in government payments ( including me, where all I earn comes from Medicare payments). This can not continue. We are killing the golden-egg laying geese.
Putting all Medicares essentially on HMOs is a good start. ( Ryan's plan). I work with geriatrics..there is a tremendous amount of Medicare waste which is absent in those who chose an HMO style Medicare. Less hassle and less expense, and because the dollars are managed on a local level, much more acceptance of the reality of any given individual situation, instead of pouring dollars from a central Medicare bank down a sinking ship , often. I see no other solution for Medicare than to pare it back down to what is necessary, not what everyone wishes for.
Well, by now everyone is bored with this post, so I will stop.
Posted by Ok, I will bite., a resident of the Green Acres neighborhood, on Apr 14, 2011 at 1:24 pm
Oh, for those who think taxes mean nothing to job growth.
Compare Texas and California. Texas has produced half the increase in jobs of the entire nation this last year..120,000. California has lost about that same amount. Gotta give Jerry Brown credit, he went with Repubs to Texas to find out why business is booming, relatively, there, and why so many jobs left here to go there.
One reason? No state tax. Another? Very friendly business regulations. Another? Cost of living way less.
Follow the flow of jobs to find out what we need to do in our future, not just in our State, but in our nation. We have the blessing of having our own petri dishes here in the USA in the form of States, for those who don't want to learn from out nations's history or the history of countries around the world. Just look at where jobs are growing.
Posted by Fragile economy, a resident of another community, on Apr 14, 2011 at 2:32 pm
Love the tea party false equivalency between family finances and government. Would a family ever reduce their income by choice, giving some of their income to the richest stockholder in their employer's company, when the family finally balanced it's budget? Would a family go into debt just to give money to it's rich relative? In your analogy, that's what George Bush did, he gave away his income stream after Clinton balanced the budget for him.
>>> "..that we could simply confiscate everything everyone makes in this country above $100,000 this year...and it STILL wouldn't bring our budget into balance."
Straw man with a healthy dose of hyperbole. Returning to Clinton era tax rates adds a few percentage points. A 4% increase on incomes over $250k would mean someone who has wages of a half million a year would pay 10 grand more. Hardly confiscatory. Hardly everything.
>>>"for those who think taxes mean nothing to job growth."
If tax cuts mean job growth, riddle me this:
- Clinton raised the top rate in 1993 by a couple points, job growth took off, to the tune of ~25 million jobs
- Dubya cut taxes, mostly benefiting what you might term 'job creators', and job growth TANKED, and is only starting to recover now.
Cuts do not grow jobs. Say it as many times as you want, even try to find the phony data over at Heritage. Paris Hilton will not be employing more servants, or buy a second yacht. A good economy and booming middle class is what does it.
>>>"the effect of a total collapse of the entire system if we don't pare back drastically right now "
Wrong. ***"total collapse"***? Going to miss Glenn Beck, aren't you?
Gridlock and nothing means that the Bush cuts expire for everyone in 2012. That takes care of a huge portion of the deficit: up to 75% in the short term. Try pulling out of the Middle East for a big chunk of the rest. President Obama just wants a return to Clinton rates on those over $250k/year. For an opposing view in the NYT today: Web Link
"A trick question: If Congress takes no action in coming years, what will happen to the budget deficit?
It will shrink—and shrink a lot. This simple fact may offer the best hope for deficit reduction.
As federal law currently stands, some significant tax increases are set to take effect in coming years. The most important is the scheduled expiration of the Bush tax cuts at the end of 2012....
As countries become richer, their citizens tend to want more public services, be it a strong military or a decent safety net in retirement. This country is no exception. Yet our political culture is an exception. It has made most tax increases, even to pay for benefits people want, unthinkable.
This is where the Bush tax cuts come in. They have created a way for inertia to be fiscally responsible....
To be clear, the end of the Bush cuts is not the ideal way to raise taxes. A better approach would be to close some tax loopholes while possibly even reducing rates. The tax code would then become simpler. Businesses and households would have to waste less effort trying to qualify for tax breaks.
Next year, however, the economy should be stronger. When the economy is in good shape, modest tax changes often have little effect on growth. Look at the 1993 Clinton tax increase, which didn’t prevent the 1990s boom. Or consider the Bush tax cuts, which were followed by the slowest decade of economic growth since World War II.
...if gridlock happens and they expire...
And just like that, on Jan. 1, 2013, the Clinton-era tax rates would return.
This change, by itself, would solve about 75 percent of the deficit problem over the next five years. The rest could come from spending cuts, both for social programs and the military.
Over the longer term — 20 years — letting all of the Bush cuts lapse would close only about 40 percent of the budget gap. But 40 percent is a great start. No one is seriously suggesting that all deficit reduction should come from higher taxes. Much of it will have to come from slowing the growth rate of medical spending, which is the main cause of the long-term deficit."
Posted by maguro_01, a resident of Mountain View, on Apr 15, 2011 at 3:12 pm
A good way to lose an argument is to let the other side set the vocabulary, starting point, and general direction. I don't know why that is happening in these discussions.
The US is spending over 17% US GDP on medical care now to be #50 in life expectancy (CIA World Factbook). No market gave us this mess, the Washington and state capitol Pay-To-Play system did. In its context no market system is possible. Indeed, medical care, the financial sector, and the still unsustainable trade deficit add up now to nearly 30% US GDP. That politics driven misallocation is a staggering burden on recovery.
Ryan's proposal would increase medical care to over 20%. That is twice what, say, Germany, Canada, or France spend in percent GDP and they have citizen life expectancies *years* longer. They apparently aren't pulling the plug on Granny.
If you gather and add up the US defense budget to include the wars, the CIA, NSA, and all the other growing alphabet soup, the VA, pensions, R&D, etc, you get around a trillion dollars a year. We are long past the point where more for defense makes us less secure. We are still spending billions in subsidies to Agribusiness, Oil, and the 'military/industrial complex'.
No one speaks of the drivers in medical expenses. We need to. Diabetes 2 is largely preventable but is to be a crushing medical expense ongoing for younger and younger peole. Cancer is largely preventable. Treating these things is an amazingly profitable, somewhat artificial, industry. All three have large, expensive lobbies in Washington. It's not a conspiracy - it's just the way our system works.
Ryan's proposal obviously makes the USA safe for insurance companies as it obliterates any vestige of single payer. But in the above context we see it also proposes balancing distorted US finances by seriously shortening the life spans of older and handicapped Americans. That would qualify as an historic atrocity and leave him in the history of infamy.
I remember when the Republicans put end-of-life councilling in the 2003 drug bill. Then later they did the "Death Panel" campaign against it and the best-practices idea. Gingrich wrote a glowing op-ed praising the concept then, only a month later, was carrying on about Death Panels. We knew that the Republican philosophy of medical care is that people die in net worth order but it has political sense enough to keep quiet. But now the whole party has come out as a Death Panel.
It may have been Democratic strategy to let their opponents have enough rope to hang themselves. We can hope so.
Posted by Ok, I will bite., a resident of the Green Acres neighborhood, on Apr 16, 2011 at 5:45 am
Fortunately, Ryan's budget passed the House this week.
Now to the Senate. I am sure it will fail there, and even if it passes, I am certain Obama will veto it.. but at least there will be public dialogue on the reality of "Which part don't you understand that we are broke?" discussion.
I am delighted that there is a REAL BUDGET to discuss, not just dreams of our teleprompter.
3 years ago, I had dreams of my life continuing as it was. It didn't, it still isn't. We lost our business, we hit our credit limit trying to keep it afloat..and failed.
Reality bites. We have had to cut back severely in our spending, to the bare minimum, drop liabilities, drop dreams, and just hang on...slowly, slowly, slowly paying down our debt. Maybe another 5 years we'll be lucky enough to finally be out of debt. And then, time to keep working to restore at least a small percentage of the retirement we lost, that we had put into our business in order to try to keep it afloat. We hated laying off 50 employees, but we finally ran out of blood to bleed, so there we are.
America is in the same boat. We have spent frivolously for 40 years, steadily borrowing more and more, regardless of party in power ( though the last 2 years have accelerated the deficit spending to the speed of light, up from really fast the prior 2 years.) We have pulled a Hoover to FDR moment in history.
I hope we learn faster than we did in the '30s. Then, Americans didn't have access to real information, now we do. Most of us learned that more borrowing and spending and regulation just kills the economic return longer and deeper. Unfortunately, the Democrat leadership didn't learn this. Or perhaps the lesson they took away is that they just want more power over you and the way to do it is the way FDR did it, and then Johnson...scare you, then promise to save you. Where the cure makes the disease even worse, but they are counting on us being too stupid to know that.
Time to tighten our American belt, cut our spending WAY back, don't raise our credit card, and start paying down our debt.
Ryan's plan at least makes a stab at it. I don't think it is severe enough, we will still be in debt for many years, but at least it is the first budget to come out of the House in my over a half century life to actually propose trying to pay down our debt.
Posted by Fragile economy, a resident of another community, on Apr 16, 2011 at 10:40 am
Sorry about your business. Sincerely. That said, see the comment above about the false equivalency between running a government and running a business or family. Again: Bush chose to drastically lower revenues by giving it away to the top 2%. Did your business decide to give away revenue to your competition at no gain to your bottom line?
Ryan's plan is NOT a real budget, other than having used the word. So many of your claims are false that I'll just address the major two: Ryan, the Great Depression and America's recovery, and your ridiculous deficit and debt claims.
First: Ryan passed because Pelosi forced a vote. Notice she rallied almost all the dems, except 14 blue dogs who voted no, all voted "present" forcing Boehner to have all the R's to take a vote privatizing medicare and a tax cut for the wealthiest. It was brilliant political strategy for 2012. Seniors will get to choose between an R that wants to privatize medicare and give away money to the ultra rich, and a D that supports medicare for seniors. Good luck with that commercial.
If the GOP is dumb enough to fall into that trap again, Nancy will force votes like that all day long and twice on Sundays.
your: "Maybe another 5 years we'll be lucky enough to finally be out of debt"
Ryan does not balance the budget until 2041, according to the CBO. If you want a balanced budget within 5 years, try a return to Clinton era tax rates and dropping the war(s) costs will take care of most of it. A jobs bill and getting America back to work will take care of the rest.
It gives a HUGE tax cut to the most well off, and cuts services and "reforms" the tax code to harm most others. And it privatizes medicare with coupons. If we are so bad off, why does he give away money to the top 2%, again? Don't they have to sacrifice like working families?
Your Great Depression comments are off base as well. FDR "built" America out of Hoover's depression by borrowing and returning top brackets to where they were before Hoover. It worked. It set up America and our infrastructure to be the powerhouse we were for the rest of the century, along with beloved safety net programs. You are listening to Rush and beck rewrite history.
Where would America have been without that infrastructure, like the TVA and the Hoover dam?
your: "We have spent frivolously for 40 years, steadily borrowing more and more, regardless of party in power..." Very selective of you.
Forgetting a few things, aren't you? Clinton created a new bracket for the top 2%, just a couple points higher, balanced the budget and LEFT BUSH A SURPLUS.
As has been pointed out on these forums by others, Bush let Cheney take that SURPLUS and turn it into massive deficit, effectively double our debt from 5 trillion to over 10 trillion, citing "Reagan taught us that deficits don't matter."
Your statement above also conveniently leaves out who started this mess in the biggest way: Reagan TRIPLED the national debt, from 1 trillion to 3 trillion (okay, to $2.7T.)
your: "but at least it is the first budget to come out of the House in my over a half century life to actually propose trying to pay down our debt."
ARRRGGGHHH! It happened 11 years ago! You don't remember it? It was the great Clinton economy that your former business probably prospered under in the 90's!
Rush and glen got to you. Why else would you fabricate such a patently false statement?
- - - - - - -
Web Link President Clinton announces another record budget surplus
September 27, 2000
President Clinton announced Wednesday that the federal budget surplus for fiscal year 2000 amounted to at least $230 billion, making it the largest in U.S. history and topping last year's record surplus of $122.7 billion.
"This represents the largest one-year debt reduction in the history of the United States," Clinton said Wednesday morning.
- - - - - - -
Compare that to Cheney: "Reagan taught us deficits don't matter"
Posted by stephen levy, a resident of the University South neighborhood, on Apr 16, 2011 at 11:30 am stephen levy is a member (registered user) of Palo Alto Online
I do think history is impoortant and we all have to accept that, whether we like it or not, the economy and federal budget did pretty well in the Clinton years with slightly higher tax rates than we have today.
Going forward, though, the serious debate and I hope we all agree that reducing the deficit and debt is a serious challenge, the final compromise will recognize and be shaped by three pretty strong facts.
1) A budget bill must pass the Senate, which means at some point it must get 60 votes.
2) ALL of the bipartisan efforts include three components in various amounts--a) reducing the rate of growth in Medicare, Medicaid and Social Security, b) reducing defense spending and c) increases in tax revenues by reducing deductions, raising some rates or a broader package of tax reform.
3) Congress folks are not the only or main challenge. All polls of the public favor deficit reduction mostly as long as the "shared scarifice" is not much shared by them. The problem ain't only "them"; it is also "us".
I am willing to have my deductions capped, pay a bit more for Medicare, see a modest reduction in the rate of growth of my Social Security payments in combiantion with reductions in defense spending and a really serious effort at cost containment including higher co-pays (skin in the game) for public health care programs.
I prefer base broadening and elimination or capping of deductions to overall rate increases but, in addition, I think we should go back to the Clinton era tax rates with some reform of capital gains taxation to eliminate taxing inflation gains.
I think Ryan's plan flunks all three crtieria above and Obama's talk was in the right direction but not asking enough of the "shared sacrifice" he calls on us to come together around. Obams's math is a little short of what is needed, possibly to leave room for compromise later..
Does anyone want to share ideas in the middle along the lines of the gang of six or deficit commission ideas?
Posted by Ok, I will bite., a resident of the Green Acres neighborhood, on Apr 16, 2011 at 11:31 am
It is not a "false equivalency". Bottom lines are bottom lines. As a society or as a family, we make bets on our earning potential vs. our debt load.
Sometimes we lose, sometimes we win.
We are losing right now. 14 Trillion in debt, and about to raise the credit card limit...with no plan for cutting our spending addiction.
All blaming aside, it is too late for "blaming"..we simply have to face reality:
To put it into perspective, we could simply take everything from anybody who earns anything at all this year, what is called our GDP, which happens to be 14 trillion. That is what is meant by we are now at 100% GDP debt..the first time since WW2, when we were 200% GDP debt.
Ok, now, think of it this way. Even the EU had chided France for many years for being at above 32% GDP debt, considered "unsustainable" even by European Socialist EU standards.
And we are at 100%.
Anyone who can't understand anything else, can simply understand that owing as much as your entire GDP is extremely precarious, a recipe for total bankruptcy. If China alone wanted to collapse us, all it would have to do is call the debt, much like banks not renewing mortgages on people they no longer trust to pay the mortgage payments.
By contrast, Greece went into bankruptcy at 160% GDP to debt,...massive riots throughout, GDP plummeting, near collapse, rescued by Germany. Who would 'rescue' us? And why would we want to be put in a situation where we are dependent on an outside nation to "monitor" us like naughty children?
That is the bottom line. We are at a very, very high risk situation, a grave threat to our national security in all ways. We are at the edge of collapse. I would rather fix it now, turn the ship away from the iceberg, probably scraping it horribly but at least keeping it afloat, than hit it and sink. A little bit of "social welfare" is better than collapse, and nothing.
Posted by Fragile economy, a resident of another community, on Apr 16, 2011 at 12:09 pm
Ignored the Clinton economy & SURPLUS facts when presented, didn't you? Glad to see you not bother to defend your previous falsehoods. Funny that now you prefer we ignore who is to "blame", when presented facts that show it's obvious it started with Reagan and went over a cliff with Cheney/Bush.
Where to start?
- your GDP definition is incorrect, it's not "earnings". def: (GDP) refers to the market value of all final goods and services produced within a country in a given period
- again, it IS a false equivalency: bottom lines are NOT the same; we see you also ignored the Bush analogy about a family or business giving away revenue. It's easy to be simplistic, to talk in black/white bumpersticker sound bites, it's harder to be accurate and concise. Revenues count. It's not all about slashing services to middle class working families.
- "with no plan for cutting our spending addiction. " nice sound bite, but there are plenty of plans. Weren't we just talking about Ryan's? Ryan's supposedly balances the budget in 30 years with giveaways to the wealthy; the congressional progressive causcus plan does in 10 years without giving away the ranch to the uber wealthy. Want some more plans? Did you even bother to listen to the President's whole speech without your Fox filter on?
- "We are at a very, very high risk situation, a grave threat to our national security in all ways." Funny you didn't say so in a loud voice when Bush borrowed $5T from communist China, etc..
Yes, it is a national security situation, but some argue it's not as grave as you love to paint out in such stark, beckian word pictures.
As pointed out by others, even gridlock fixes much of the problem in a couple years. The Bush tax cuts expire in 2012. That cuts the deficit in half almost immediately. Cut war costs, reduce the DOD by the same amount you want to cut services for the elderly, middle class and poor. Get America back to work and the resultant increase in revenues take care of a bulk of the rest.
You are awesome at painting bleak, end of the world, beck says buy gold, scenarios. But most of the rest of us believe in our country. We are better than Greece. We also have the luxury of learning from Greece, Britain, etc.. which measures work better than a GOP austerity plan. The best way out of any big recession/depression is to BUILD our way out. Get America working again.
Starve the country? Or rebuild the country? You need to listen to the President's speech with an open mind, if possible.
- - - - - - -
Stephen: I take offense with the constant Social Security meme. Social Security has NEVER added a dollar to the deficit. We do not need to cut benefits for our seniors, nor raise retirement ages.
You've acknowledged in past threads that simply removing the current income cap on SSI tax (over ~$110K) keeps Social Security solvent into the next century. As it currently stands, it is a highly regressive tax against middle class, working families. Years ago, Al Franken (noted socialist - not!) even proposed having a tax free donut hole for the moderately wealthy, say from $125K to $250K. Everything above $250K a year is then taxed at the same rate as the middle class.
Please don't fall into the beltway echo chamber about social security. You're too thoughtful and well read to do so.
Posted by stephen levy, a resident of the University South neighborhood, on Apr 16, 2011 at 12:44 pm stephen levy is a member (registered user) of Palo Alto Online
Yes, fixing Social Security for several more decades is relatively easy compared to other budget challenges.
But it is also an opportuntiy for some modest shared sacrifice as in removing the current income cap on Social Secuirty taxes as we both have suggested. I think a little bit more is needed and favor either raising benefits each year by a smaller amount as is presently scheduled by using a different inflation adjustment or doing so for higher income recipients.
I think raising the retirment age works for professionals like myself but is unfair to people in occuaptions where working past the current retirement age is difficult--so i don't see that as the best approach.
I don' think the math of only asking for more from higher income families, corporations and defense gets the budget deficit all the way to where we need it.
Of course, as always our success in reducing the growth in health care costs will determine how much budget reduction comes from elsewhere.
Posted by Fragile economy, a resident of another community, on Apr 18, 2011 at 10:17 am
Mr Levy: happy tax day...
your: "Yes, fixing Social Security for several more decades is relatively easy" SS is solvent into the 2030's, and after that can still pay 80% ad infinitum. So your statement about fixing it "for" the next two decades has me perplexed. It isn't broken like the right wing echo chamber claims. Raise the cap now, and no one gets cuts in the 30's and beyond.
your: "I don' think the math of only asking for more from higher income families, corporations and defense gets the budget deficit all the way to where we need it."
Above, I mentioned letting the Bush cuts expire cuts the deficit in half by itself.
It's not hard to do the math just on the costs of our wars alone, let alone asking GE, Exxon and the other highly PROFITABLE tax scoflaws to pay some tax like working families do.
Would you like links showing the numbers?
Now, for our happy tax day - from the AP:
"The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
... Plus, the top rate on capital gains is only 15 percent."
Average income of $345 million a year.
Average income of $345 million a year.
Average income of $345 million a year.
Average income of $345 million a year.
Average income of $345 million a year. Sorry, letting that sink in. It's proven that they are not job creators as the soundbites claims. Why on earth, in a time of war, did we decide to blow up the American economy by lowering their rate 4%?
And the thing almost no one talks about: why on earth did we cut revenue from capital gains in half. Those aren't even wages, as if someone is actually WORKING for them!
The poor schlub who busts his butt for a living is one thing. Paris Hilton, sitting by the pool, talking to her accountant on a cell while he opens brokerage statements for her, telling her how much she made pushing stock around.
That income? She pays half the rate and she didn't work for it.
Posted by Fragile economy, a resident of another community, on Apr 18, 2011 at 10:22 am
Sorry, here's a nice bit of his column this weekend, on why it's so important. I wonder if this is part of the thought process of Buffet or Gates when they say we need to repeal the Bush tax cuts. or maybe they just have a conscience.
The American ruling class is failing us — and itself.
At other moments in our history, the informal networks of the wealthy and powerful who often wield at least as much influence as our elected politicians accepted that their good fortune imposed an obligation: to reform and thus preserve the system that allowed them to do so well. They advocated social decency out of self-interest (reasonably fair societies are more stable) but also from an old-fashioned sense of civic duty. “Noblesse oblige” sounds bad until it doesn’t exist anymore.
Posted by Fragile economy, a resident of another community, on May 12, 2011 at 12:04 pm
Think about this the next time the numbers whiz by as you pump four plus dollar gas: Exxon gets four billion dollars in corporate welfare.
The most profitable company in the HISTORY OF THE WORLD is Exxon. They make more money than any company in history, followed closely by the other big oil companies.
Exxon's 2010 profits allowed them to lead Fortune 500’s annual ranking of most profitable firms for the eighth time in a row. Web Link
Yet you, as an average American, pay a higher tax rate than Exxon.
Exxon Mobil registered an average 17.6 percent federal effective corporate tax rate on its annual earnings in the three years spanning 2008 to 2010. (xls file) Web Link
The average American paid 20.4%.
Meanwhile, Exxon Mobil and other big oil companies continue to exploit tax loopholes for nearly $4 billion in subsidies each year. These subsidies include write-offs for drilling costs and a deduction for domestic production that was intended for manufacturers, not big oil producers. Web Link
Democrats want to eliminate the billions in corporate welfare to the most profitable company in US history.
Republicans do not want to eliminate that welfare, instead, adding it to our deficit, simultaneously threatening to destroy our economy by not raising the debt ceiling. Web Link#
Exxon & the republicans, a marriage made in heaven.
Posted by Perspective, a resident of the Meadow Park neighborhood, on May 14, 2011 at 5:05 am
Gee, 21% of all FAMILIES make over $100,000 per year.
Just take everything above 100,000/year that any family or corporation makes, and see what happens.
Oh, while you are working through how great that would be, ask yourself how many people, families, and corporations would bother to earn over $100,000 the year after. Ask yourself what would happen to the value of all the stockholders investments in those big, evil Oil companies. ( or any other big, evil corporation which, btw, houses stockholders' returns)
Posted by Perspective, a resident of the Meadow Park neighborhood, on May 14, 2011 at 5:30 am
Math checkers, can you check this out, please?
If we took everything above $114,000/year, we still wouldn't even be able to pay for THIS YEAR's proposed Obama 'budget".
Hilarious...just take everything above $114,000 this year, and see what happens next year. And STILL have to borrow to pay for all the pipe dreams of Dems. And have nothing to take next year. Collapse.
“As Americans we needn’t seek the world’s friendship or to proselytize the virtues of our society.
Neither do we seek to bully, intimidate, cajole, or persuade others to accept our unique values or to share our national objectives.
Rather, we will let others draw their own conclusions based upon our actions.
Our domestic and foreign policies will reflect unity of effort, coherency and constancy of purpose.
We will pursue our national interests and allow others to pursue theirs,----never betraying our values.”
We need jobs in America and we need to reduce our debt and build our human capital.
In the end our power and influence depends far more on having a healthy, highly educated, politically loyal, and energetic society here at home than it does on shaping political outcomes in far-flung corners of the world.
No more handouts to alien nations in AfPak and MENA.
It is time to bring our treasure and our troops home and invest in Americas fundamental social and economic interests--- at home.
Posted by Fragile economy, a resident of another community, on May 14, 2011 at 11:40 am
Other than you and the fringies, who has offered such a plan? It's a STRAW MAN FALLACY. Plus, your whacko idea has no link, and you hope someone will do the math for you - why? It's an insane idea.
Oddly, it follows a post about corporate welfare for the most profitable industry the world has ever known.
Do you support your taxes going to Exxon and other oil companies that have $35 billion in PROFITS in the last three months, with your gas at $4.25 a gallon?
"The CEOs from the five major oil companies -- which together booked $36 billion in profits in the first quarter of 2011 alone -- went to the Senate on Thursday to try to justify the $4 billion in tax giveaways they're receiving this year."
Here's a "funny" bit from the meeting, ha, ha, ha, sob...
"With the CEOs of the five largest oil companies sitting... played a video of a 2005 congressional hearing in which oil company executives said they didn't need generous tax breaks because oil was selling at $55 a barrel. (now) the price per barrel (is at) $100." Web Link
Forget your freaky tax at $114k fantasy, look at the real world around you:
Please note...Medicare, MediCal, and Social Security are 1.4 trillion per year..discretionary and "other mandatory" 1 Trillion per year. In other words, more than 2/3rds of our spending, Defense: 1/5th
Ain't gonna fix this sucker by cutting out the foriegn aid, though it sticks in my craw mightily to send anything to countries that hate the USA.
Bottom line: When are we going to stop spending so much, and stop borrowing money to get our "fix"?
Posted by Perspective, a resident of the Meadow Park neighborhood, on Jun 7, 2011 at 8:54 am
BTW fragile, not sure where your sheer hatred of oil companies comes from, but perhaps you don't know that Exxon et al make about 2 cents/gallon profit..State and Fed govt make between 40-60 cents per gallon. PLUS the taxes that they normally pay in years when they don't lose their shirts over having their drills shut down by the Emporer ( hard to understand this, but in years with huge losses, we businesses don't pay as much or any taxes to help offset the huge losses, trust me, the decrease in tax payments doesn't even come near the losses).
So..umm..who is the greedy profiteer?
BTW, might want to check out the left's hero, GE, for amount of taxes paid last year..and they didn't even have losses to write off from, say, hurricanes and explosions and business shutdowns by Emperors!!
Back to point: Rather than looking how we can extort more money from those who produce jobs, ( killing what little energy independence we have as well as more jobs in the process, which kills off more tax revenue..).....we need to cut our spending addiction.
I am not happy with our house alone owing over $300,000 in unfunded promises.
Ryan's plan is a start. I actually would prefer more "draconian", but at least it is a shift of the Titanic in the right direction.
Posted by Fragile economy, a resident of another community, on Jun 7, 2011 at 10:21 am
pers - quite a rant, feel better now? Let's start where you started, with the debt ceiling:
As Colbert explained last week, belittling the arguments over the ceiling: arguing about the ceiling is "so" George Bush.
As in, we raised the debt ceiling in 2002.
And again in 2003, 2005, 2006, and twice in 2008. All with votes from Boehner, Cantor, McConnell, etc..
America needs to fix it's economy first, create jobs, etc.. and then tackle the trillion dollar deficits (first created by Bush.)
Also note the the GOP Ryan House passed budget bill requires two more debt ceiling extensions. The Ryan plan that all GOPers voted FOR (sans four) adds 9 trillion in debt. Web Link
Your statement: "might want to check out the left's hero, GE, for amount of taxes paid last year"
You're a little late on that one, bucky, you should really try to read the posts above, like this one:
"Posted by Fragile economy, a resident of another community, on Apr 9, 2011 at 5:39 pm
While I'm against regressive taxes for working Americans, I'd consider it for the real scoflaws.
Such as Exxon or GE, and a third of the Fortune 500 that pay ZERO taxes. Do a google on GE's 2010 tax bill on $15 BILLION in profit.
If you want to be sick to your stomach, that is..."
Seriously, pers, you're more than a little late, two months late on GE.
Your rant about Exxon is pretty funny. Please show where you think I said I hated oil companies. I didn't. I do detest that they don't pay much in taxes, while taking my tax dollars as corporate welfare.
You play with numbers, but no where do you state that big oil currently is the MOST PROFITABLE industry in history. Exxon leads the pack.
And you fail to offer an opinion on why they deserve billions in tax breaks and corporate welfare as they post record profits.
Perspective: do you support giving taxpayer dollars as corporate welfare to the most profitable industry on earth?
your: "Rather than looking how we can extort more money from those who produce jobs..."
Tax cuts for the ultra wealthy don't create jobs. Period. If they did, why did Bush have the worst job creation record in American history? President Obama has already created more jobs in two years than Bush did in eight.
Bush's tax cuts for millionaires adds $36 billion to the deficit this year.
You spent most of two large posts moaning about the deficit, yet:
- you support deficit busting tax breaks for the wealthiest
- you support billions in corporate welfare to Exxon and big oil
- you support Ryan which adds trillions to the deficit and requires debt ceiling extensions
Come back again in a few weeks and when you feel the need to post another rant.
Posted by Perspective, a resident of the Meadow Park neighborhood, on Jun 7, 2011 at 1:38 pm
Fragile, I think you are too steeped in your football team attitude ( go team!!) to sort truth from fiction. All I had to see was Bush "worst job creation record in American history" to know that nothing you say is credible.
You are too steeped in class envy and the belief that what other people earn is yours to take and do with as you please.
Sorry, that is not this nation, you have us mixed up with someplace else.
I think it must be very hard to always want what others have. The ones I know like you are truly unhappy all the time, coveting the cars, houses, jewels and vacations they see others with.
I am fortunate in that I was born without that envy gene, I guess. I am happy with what I can earn myself, and congratulate anyone who is able to do better. And I have no desire to take from others what doesn't belong to me.
Posted by Perspective, a resident of the Meadow Park neighborhood, on Jun 7, 2011 at 1:52 pm
Here are 2 great pieces, one by Wash Post and the other by WSJ on why the govt intervention in the auto industry was more costly than is being touted right now by this Admin and far more costly than is ever discussed.
The first makes the excellent point that the biggest problem with the auto bailouts was, effectively, destroying what used to be corporate contract law, making it clear that our govt is now one which can and will step in, and change the order of "people in line" to get their money out in case of bankruptcy. Our govt put union pensions ahead of investors...and that will make future investors extremely wary.
This second is the true cost, and not nearly as hard to understand in impact, re: the Auto bailout. Gotta give Wash Po Fact checker credit, they are doing a good job of getting facts out, not just political campaign speeches.
Bottom line is that the long term bottom line with government intervention is always worse than promised. Better to face the music and get the worst over, play by the rules, let the failures fail and arise again if they are able, than to mess with the markets and shoot them full of mistrust and uncertainty. We are seeing the effects of this Admin's constant and unending interference in the private business arena, from destroying contract and bankruptcy law to shutting down entire businesses ( like oil drilling), all illegal or unconstitutional, but it is like a tree falling in the forest with nobody around..nobody cared, nobody noticed ( in the mainstream..just a few of us prophets on the sides).
The rest of the nation is waking up..it ain't pretty
Posted by al norte sm, a resident of another community, on Jun 7, 2011 at 2:20 pm
pers: "All I had to see was Bush "worst job creation record in American history" to know that nothing you say is credible."
Nothing credible except HISTORY and FACTS.
According to the Wall Street Journal, read it and weep. The only one near as bad for job creation was dubya's daddy.
Really looking forward to your palin-esque refudiation of historical fact.
"By WSJ Staff
President George W. Bush entered office in 2001...
His job-creation record won’t look much better. The Bush administration created about three million jobs (net) over its eight years, a fraction of the 23 million jobs created under President Bill Clinton‘s administration and only slightly better than President George H.W. Bush did in his four years in office.
Here’s a look at job creation under each president since the Labor Department started keeping payroll records in 1939. The counts are based on total payrolls between the start of the month the president took office (using the final payroll count for the end of the prior December) and his final December in office." Web Link
Once you stumbled with simple facts, the rest of your rant about envy seems rather silly.
Your following rant about saving 3 million American jobs in a key manufacturing segment during a recession also sounds like your tin-foil hat is being worn a little too tight. That was a slam dunk decision for America.
I noticed you completely ignored my prior response that took apart your other factually challenged points. The GE thing was fun - thanks! The GOP raising the debt ceiling all those times for Bush was pretty interesting too, eh?
You also neglected to answer this about your buddies in big oil: "Perspective: do you support giving taxpayer dollars as corporate welfare to the most profitable industry on earth?"
Envy. That's funny. The fringies only envy one thing: they desperately wish they had facts on their side - they don't - so they make 'em up!!
Bush was the worst at job creation. Whine, moan, cry and lie about it all you want, you just step in it and prove "nothing you say is credible."
Posted by Perspective, a resident of the Midtown neighborhood, on Jun 7, 2011 at 6:01 pm Perspective is a member (registered user) of Palo Alto Online
I think you, ANS, need to understand the term "net"...and think about what the "net" number is so far under full Democrat rule..and even more, what it will be in another 2 years. It ain't gonna be pretty, is it?
I agree, the RINOs and Bush spent too much, and we lone conservatives were ignored or laughed at.. increased Medicare with MedD, the first big govt no-no, rolled over too easily on TARP, the second big no-no of bigger govt, didn't fight hard enough to stop the madness of Frank/Dodd's Community Reinvestment Act perversion, setting up the collapse of the financial market, didn't overturn the Clinton hyperregulations of banking that caused the absurd bundling of good and bad debt into virtually untraceable ill..ok..that said,... what will it take for us to learn that to quadruple down on all of the above errors means only to make it all even worse? ( which we have in piles and piles).
So, back to the point of my posts...
Every household now owes over $500,000...this Admin has increased YEARLY
entitlement promises by over a trillion alone..that is yearly, and not quite 1/2 of our yearly revenue. Yes, we agree, the prior admin increased spending also, which is one reason people were mad...and here we are..
Put it another way..we owe 61 Trillion dollars in unfunded promises, just to Medicare and Social Security, that is more than the entire WORLD's economy.
What plan does anyone have to preserve at least SOMETHING for anyone under 55 when THEY retire? At this rate, there will be no there, there. It will be completely broke. The only other plan, the plan the Democrats have it seems, is to pretend there is no problem in order to get reelected...knowing they will be gone when it collapses, and the NEXT group will "take the blame" as Americans with short vision are apt to do.
No plan is a plan for collapse.
I am 54, and I support Ryan's plan. I will be in the first wave of "new Medicare" recipients. I am the tail end of an extremely selfish "me" generation of baby boomers who cared not one whit about the financial future for generations behind them, nor one whit about the effect on our kids as the burden for caring for us becomes crushing. I have known, as have many of us, that there would be NO medicare or social security there by the time I was 65, and have saved and worked and invested my whole life, knowing it was a big ponzi scheme. Unfortunately I took all that savings and borrowed more for a business..then lost it.
Oh well, my problem, not the next generation's. Time to stop lying to people, time for us to fix this mess.
It is time for the "next" in line, the "post baby boomers" to suck it up, and try our best to give the next generation a fighting chance at a life.
Like I have said before, I think Ryan's plan is too generous. Changing nothing for those 55 and over is absurd. At the least, everyone should work until 70 years old for a start. That would help. And, social security needs to be liberalized to allow younger people to invest at least SOME of their social security payments instead into a private stock fund..which is theirs to use or pass on if they die.
But, at least Ryan's plan is a start. Until someone comes up with something even more fiscally sustainable, and ALSO we make being in private business and RICH legal again, building up the trust of investors and business owners again in our govt to not mess with the rules willy nilly, not simply decide to take what has been earned, so that we have a chance at building back up our economy in order to pay the taxes we all want to come in ... well..until then, I am all for Ryan's plan and anyone who will get the government the hell out of our way.
Posted by Perspective, a resident of the Midtown neighborhood, on Jun 7, 2011 at 6:14 pm Perspective is a member (registered user) of Palo Alto Online
By the way, though it was a good try, posting a blogger's link to one private company's take on the job growth under Bush is not really a
Wall Street Journal analysis.
It is also simply one data point. Taken into context of jobs "created" excluding automatically all self-employed, and adding the context of unemployment rate maintaining between 5-6%, meaning anyone who wants a job can have one, since 5% is roughly what is needed to maintain a mobile job market, this posting of yours is silly.
Jobs can't be created if there aren't enough people who want them. How do you think our vast illegal immigration issue began? It wasn't because there was no work here, ..there was no work citizens wanted to do.
Connecting economic dots is really, really hard, and requires seeing a big picture. I am a neophyte at this, but I am old enough and wise enough now to understand that one data point does not a "point" make.
I will be happy if we just make it back to 6% unemployment..and my house gets back above water...and I can start putting money into replacing all my lost retirement again..
Posted by Perspective, a resident of the Midtown neighborhood, on Jun 10, 2011 at 5:29 am Perspective is a member (registered user) of Palo Alto Online
I wanted to comment on your comment, Mr. Levy, written several posts ago
:"Of course, as always our success in reducing the growth in health care costs will determine how much budget reduction comes from elsewhere."
I wanted to clarify your statement. This would only be true if ALL HEALTH CARE COSTS WERE TAXPAYER FUNDED. For private health care insurance and private pay health care, it is nearly completely irrelevant how much an individual chooses to pay for his/her medical care or health care. I know individuals choosing to pay for weekly counseling, massages and Physical Therapy visits out of their pocket to the tune of $300/week, $1200/month..plus their private health insurance rates.
These are the choices of the individual, and under no need for control from the rest of us because their pocketbooks are theirs.
The focus of your statement should be on GOVT FUNDED health care..through Medicare, MedicAid(CAL), etc. This is the health care dollar that has become the leviathan in the room, and the one needing addressing.
If you want to address private health care costs, that is not really our business in my opinion, that is a private market decision, and if left unmandated for insurance coverage, usually plummets in cost as demand grows, much like the cost of the body scans ( through ultrasounds to find aneurysms and blockages) have come down to a mere $120 from thousands a few years ago.
If you want to help lower insurance costs, then please support taking most of the mandated covered services off their backs. This would lower the cost of the insurance premium to the buyer, and lower the cost of the services to the out-of-pocket consumer.
To use the scans as an example: If these scans had been mandated to be covered under insurances
1) The cost of insurances would have gone up
2) The price of the scans would not have dropped as much since the insurances would pay a lot more by mandate.
Posted by Perspective, a resident of the Midtown neighborhood, on Jun 10, 2011 at 5:39 am Perspective is a member (registered user) of Palo Alto Online
Hi Mr. Levy:
Addressing another comment of yours, I suspect we are closer in thinking that it may appear:
You said "I think raising the retirment age works for professionals like myself but is unfair to people in occuaptions where working past the current retirement age is difficult--so i don't see that as the best approach."
I think we absolutely must raise the retirement age, and raise it drastically and rapidly. Having a "too disabled to keep working in your job" opt-out for earlier retirement would be fine, like we already have, but not a blanket opt-out by profession.
For example: IMO we need to
Anyone 60 -64 now has to work until 66
56-59 to 67
52-55 to 68
48-51 to 69
44-47 to 70.
Set the standard for "older", and there is always opting for disabled earlier, as we already have in place.
There are far too many of us in professions that would appear to be too difficult for older folks, like waitressing, nursing or Pilates instructors ( just reaching for highly physical professions) who already have 69-70 year old women still going strong in them to believe that somehow some professions are too hard on everyone.
I, personally, though older than my own set-points, am planning to work until I am 70 (more if I can) in order to try to recover at least some of all my lost retirement..so I am still expecting less from others than I am from myself.
Raising retirement age would help out the next generation at least some..they are going to need all the help to unburden them that we can muster.
Posted by stephen levy, a resident of the University South neighborhood, on Jun 11, 2011 at 11:14 am stephen levy is a member (registered user) of Palo Alto Online
On Social Security
First, a couple of facts
Social Security has not been a cause of the federal deficit to date but it is entering a period where the revenues in are less than the benefits being paid. If nothing is done this gap will grow and the system will not be able to pay the full benefits.
I believe in planning ahead and that we should modify the system now so that it is sustainable into the future.
Currently the retirement age for people born in 1954 and before is 66. For people born in 1960 and afterwards the full benefit retirement age is 67. For people born between 1954 and 1960 the retirement age goes up by two months each year.
There are three main approaches being discussed and some combination is required to achieve sustainable balance.
The three major options are:
1) raise the retirement age
2) have benefits grow more slowly by using a lower inflation rate
3) tax wage earners on wages above the current limit of $106,800.
I favor options 2 and 3 and am open to considering option 1 with some caveats.
Although Perspective in the post above makes a case for raising the retirement age, I take issue with the use of the word "disabled" to describe people who might be really disadvantaged by such a change.
There are many occupations where skills or physical capability deteriorates with age. It is simply not reasonable to expect people to continue working or companies to hire them if age interferes with skills. Do we have the same expectations for a surgeon or construction worker or a pilot as we do for economists or lawyers (waiting for someone to suggest that economists and lawyers should "retire" at 25--just kidding)?
A retirement age of 70 for economists might make sense. I am not so sure it applies equally to all people in the workforce. Peopel can always work longer if they want or need to.
Posted by stephen levy, a resident of the University South neighborhood, on Jun 11, 2011 at 11:38 am stephen levy is a member (registered user) of Palo Alto Online
With regard to public versus private health care costs
It is true that the first budget beneficiaries of reducing health care costs would be federal and state budgets as costs in Medicare (federal) and Medicaid (state/federal) would go down.
But reducing health care costs generally would reduce costs for companies providing insurance coverage and for individuals and that would soon show up in higher incomes and profits (and associated tax revenues). Reducing health care costs helps can help most everyone depending on how it is done.
We have mostly a private system of medical care provision that has experienced rapidly rising costs and lower levels of private insurance coverage.
I am happy to try and improve this system by encouraging productive competition among providers and by requiring patients to have a larger financial stake in care costs (skin in the game). I think there are probably some reforms to the malpractice system that are worthwhile in the quest to have care determined by best practice, not the potential cost of a lawsuit.
But I think that system must operate under public rules--whether care is funded publicly or through private insurance.