To Understand Why The US Is Screwed
Here's the link to the story.
And here it is, a link to the companion story: Your Short Course On Why The US Is Screwed, which explains exactly why it is we're screwed.
Judging by what I saw, there doesn't appear to be a way out of this one... Certainly not with Obama at the helm, or any Republican for that matter without balls enough to drastically cut our budget. Including, and especially, entitlements.
Democrats and Republicans both... but especially Democrats... are going to have to man up. We can't continue on this path of fiscal recklessness. We are swiftly ceasing to be a great nation. Some may think that's a good thing, but weak nations don't remain free for very long. They get invaded.
It's a nice little fiction that the reason our budget is out of whack is because of entitlements. But the truth is as so often the case a conglomeration of many factors.
ReplyDelete1. Unemployment assistance need and benefits are expected to grow during an economic slowdown. When our economy recover that slice of the pie will shrink.
2. The growth in Medicare and medicaid has been predicted for a long time because of a) the aging American population which needs more medical care and b) the increasing cost of American healthcare. Eventually the baby boomers die off and hopefully health care reforms will bring medical costs in line with other first-world nations to shrink this slice of the pie.
3. SS is supposed to be self funding though paycheck withholdings. The only reason this program is 25% in the red is again because of EL's aging baby-boomer generation. A few small changes can make this program sound for decades.
4. The biggest mismatch between the two pies is the fact that Republicans keep voting for large tax cuts and tax loopholes while the country's population and defense commitments keep growing.
5. It should also be pointed out that ALL of the proposed Republican cuts in the next budget happen in the Non-Defense Discretionary 12% slice of the expenses. This slice contains the EPA, FDA, SEC, HUD, EDucation, and lots of other vital programs. Does that make sense?
6. The income pie would be a lot larger if there weren't so many loopholes for corporate America. Over the past five years, Boeing paid a total tax rate of just 4.5 percent, according to Capital IQ. Southwest Airlines paid 6.3 percent. Yahoo paid 7 percent. And the list goes on: Prudential Financial, 7.6 percent; Time Warner, 11 percent; General Electric, 14.3 percent. Lots of companies don't pay anything.
Don't forget B of A and Exxon and others that paid little or no tax at all.
ReplyDeleteThere is simply no way to cut our way out of this deficit and debt. Revenues will have to increased one way or another.
BenT, SS will not be 25% in the red until 2037. Check this out.
The idea that you can't cut your way out of a deficit is ridiculous. Even more ridiculous is to say that its corporation's fault for taking tax cuts. Thats the liberal way of saying "you earned my money".
ReplyDeleteThe solution:
Eliminate major federal departments like Dept. of Education, Agriculture, Environment, Labor, then shift their responsibility to the states.
Reform medicare and Social Security so it only applies to retirees, widows and the disabled.
Stop paying unemployment after 6 months, and include a relocation assistance instead of 12 more months of unemployment.
Ditch Obama-Care
This would be a great start to getting our debt under control as well as perpetuating the mindset that in America we are free, a responsibility of that freedom is you have to take care of yourself.
Ben,
ReplyDeleteEntitlements are a logical target of cuts as they are subjective in terms of what constitutes an "entitlement".
1. The growth in need for assistance is due in large part to the policies that have exacerbated the current economic downturn. When it will turn toward the positive direction is slowed by those policies. The extension of assistance does little to benefit those out of work when work is what they need most. You might not be aware, but despite the fact that our current recession is common knowledge, employers do not keep that in mind when considering the gap of unemployment in someone's employment application.
2. The growth in Medicare and Medicaid was never predicted to be this outrageous. Gov't interference in health care is the main culprit in rising costs, so any "predictions" are self fulfilling. Boomers dying is a poor excuse for a game plan. In addition, other first world countries spend a ton on health care. In the UK it is one of the largest industries. The costs of health care are not being addressed with Obamacare and never will, except to cause it to rie even more.
3. SS is supposed to be self-funding int he same way any Ponzi scheme is. But since folks aren't reproducing at the same rate we once were, together with the legal murder of about a million future tax payers per year, the only way to save @@ is to cut bennies or raise contributions. That's not a sign of a good system. And considering that SS was not designed to be anything more than a supplementation to a real retirement plan, there is currently too much reliance upon it.
4. The biggest mismatch is that Dems keep voting for taxes and regulations that compel businesses to flee the country in order to find more business friendly environments in which to conduct their business. Combine this with the never ending push for new and generally unnecessary programs, and what you get is a cluster-f**k of an economy.
5. There are very few of these programs that can be considered "vital". The EPA certainly isn't. The NEA certainly isn't. The FDA is horribly slow and inhibits people from deciding for themselves what drugs they would risk taking. So yeah, to cut money to all of these (those that aren't axed altogether) makes perfect sense.
6. "Loopholes" for corporate America are generally (note the owrd "generally") to provoke more expansion, hiring, research, etc. Typcially, the tax code used to be set up to encourage all those behaviors that lead to a more prosperous nation. A great deal of risk is involved in starting and running a business. The common worker doesnt't get those tax breaks because he doesn't take those risks. But go ahead. Take away "loopholes". Our foreign friends would love to welcome more of our companies to their countries. The funny part, because I'd rather laugh than cry, is that Dem boneheads, like Obama, seek to punish the companies their policies drove away in the first place.
"Reform medicare and Social Security so it only applies to retirees, widows and the disabled. "
ReplyDeleteWho else gets Social Security besides retirees, widows and the disabled?
"Ditch Obama-Care"
Ditching PPACA will increase the deficit, not decrease it.
"Loopholes" for corporate America are generally to provoke more expansion"
You think Exxon needs a helping hand?
Once again you demonstrate that you do NOT understand Social Security. Without any adjustments SS will pay full benefits for the next 25 years. Beyond that without adjustments SS will pay 75% of expected benefits. The boomers will die off. Learn more here.
its funny (actually sad), Democrats took control in 2007 when the nation was at near total employment, stock market was at a record high and the GDP was good .
ReplyDeleteNow our country is approaching "mad max" times and guys like Jim are still defending the anti-corporation pro spending drivel that got us here.
what's next? more social justice.
(a bit more concrete than mother jones)
http://www.wolframalpha.com/input/?i=stock+market
http://www.wolframalpha.com/input/?i=us+employment
http://www.wolframalpha.com/input/?i=us+debt
http://www.wolframalpha.com/input/?i=us+gdp
Just an FYI the following graph shows (historically) a lower tax rate leads to more taxes collected. But that doesn't really help your "EXXON took my money" theory.
http://www.wolframalpha.com/input/?i=us+tax+rate
"Ditching PPACA will increase the deficit, not decrease it."
ReplyDeleteIf PPACA is Obamacare, I doubt ditching it will do more harm than good. What's more, the causes of rising health care costs would then be addressed. Obamacare was not in the least bit necessary, nor was it ever requested by the American people. What concerned people was the rising costs. People who whined about insurance couldn't afford it. If it was affordable, there'd have been no whining.
"You think Exxon needs a helping hand?"
Depends on what you call a helping hand. If you wish to conflate corporate welfare with the tax code, you won't see things clearly as they relate to sound tax plicy. I don't support corporate bailouts or welfare, but sound tax policy promotes growth.
"Once again you demonstrate that you do NOT understand Social Security. Without any adjustments SS will pay full benefits for the next 25 years. Beyond that without adjustments SS will pay 75% of expected benefits. The boomers will die off."
Once again, you say this as if it is a good thing. In 25 years SS won't meet its obligations and you think it's just dandy that it'll maybe handle 75% of them. Worse, you depend on people dying for the plan to work out. Even if I could get over how creeped out I am by such an attitude, I still don't see how this is an argument with which one would hope to score points.
"Ditching PPACA will increase the deficit, not decrease it."
ReplyDeleteEvidence and proof-positive you can't think for yourself.
This is one of the biggest frauds being perpetrated by the Left today. It's akin to saying, "We can't reform government agencies like the IRS or the DOE because some folks might lose their jobs. People all over this country are losing their jobs right now because of Obamacare (to name just one agency/policy)... but you don't seem to care a whit about them, do you.
And how about THIS dichotomy... Liberals champion the poor when it comes to demanding the rich pay more and more of "their fair share," and yet Liberals are, this very day, defending the rich (i.e., teachers in WI and their Union thugocracy) in their demands that the POOR (the taxpayers of WI) pay more of their fair share to keep union members in a lifestyle they've become accustomed; earning much more than their private sector counterparts. You thieves on the Left are now defending the rights of the well-to-do over the rights of taxpayers who pay those greedy public sector asses. But why should I be surprised by this? You support the the thieves in Washington who are likewise ripping off the American taxpayers each and every day.
You folks on the left? Liars, Hypocrites... just plain confused.
"Worse, you depend on people dying for the plan to work out."
ReplyDeleteUh, ever hear of actuarial tables? That's how pensions, annuities, and all kinds of insurance works.
All this talk of cutting the budget is WRONG in the first place. To follow the republican plan would land a severe blow to the nation's economy.
ReplyDeleteGoldman Sachs says the republican plan would reduce next year's GDP by 2%. Moody's researcher who was a consultant for McCain/Palin says it would mean 700,000 jobs lost. The Pew Center says 850,000. Even Ben Bernanke in testimony this week before the house said hundreds of thousands of Americans fired.
It is rank, childish spite that says we must cut $100-billion from this year's budget. Doing so would send the economy back into depression.
Childish spite... like Democrats' refusal to even curb spending, or propose genuine meaningful reform?
ReplyDeleteGoldman Sachs? You lefties bitch about the right offering all kinds of tax breaks for the likes of Goldman Sachs... you rail about Wall Street being the big evil... now they're the good guys?
700,000 jobs will be lost if we cut $100B from the budget? According to who? The same folks who said the stimulus would create millions of jobs? How many jobs will be lost when our economy collapses? Hmmm? Don't believe it can happen? Or...
You don't care about the lost jobs, or the people who lose them. What you care about is keeping the entitlements we have in place while adding to them where and whenever possible.
You care about the status quo; keeping in place every democratic policy no matter how detrimental it is to fiscal sanity and our future as a nation. But you don't have much to really worry about, do you? You'll qualify for all kinds of public assistance, right. That is, until government runs out of assistance to give. Thanks for saying its okay for America to slip from the top of the economic heap, to slip into second-world status.
So long as government can give you everything you want now, who gives a fuck about tomorrow, is that it?
We're childish? You're irresponsible.
Goldman Sachs is no friend to democrats, they give most of their political money to conservative causes. In fact I actively oppose many of the financial practices and regulations they support.
ReplyDeleteSo when they look at the republican budget cutting plan and say that it would cost 700,000 jobs and probably 2% of GDP and send the economy into a tailspin. I know they are speaking against their own interests. Their numbers are more credible because they are saying something they don't want to say!
"You don't care about the lost jobs, or the people who lose them. What you care about is keeping the entitlements we have in place while adding to them where and whenever possible."
I have no ulterior motives, I have no hidden agenda. I see many of our country's safety net programs as serving vital needs, but that doesn't make me rank them above all the other national priorities I see. Do you blindly rank federal budget cutting above any harm it may cause?
"But you don't have much to really worry about, do you? You'll qualify for all kinds of public assistance, right."
You and I probably qualify for the exact same level of government support. In fact since I'm younger I have more incentive than you to demand fiscal responsibility of the gov't.
"Thanks for saying its okay for America to slip from the top of the economic heap, to slip into second-world status."
The United States economy is three times the size of China's. We are so big, our housing market caused a global economic depression. A slow decade of restrained federal growth will not destroy the American economy, but a sudden hatchet to the budget could.
I find it interesting that you folks bitch about your "hard-earned" tax dollars going to pay the outrageous teacher salaries of $50-$60 maybe $80,000 and you have no problem with the multi-million dollar salaries and bonuses of the CEOs of General Electric, Boeing, Lockheed, Halliburton and others. Talk about hypocrisy!
ReplyDeleteJim,
ReplyDeleteDo you understand the expression "apples and oranges"?
Those CEOs don't generally make their income from our tax dollars. But I'll tell you what: Take gov't out of education entirely and have schools run by private enterprises. Those schools that draw the most students by pumping out the most educated graduates can charge more for their services and those teachers will be paid what the market will bear.
But as long as anyone is paid by our tax dollars, we'll bitch if we feel like it.
"Those CEOs don't generally make their income from our tax dollars."
ReplyDeleteSucked you right into that one!
General Electric doesn't make engines for military aircraft, Boeing doesn't make tankers and other military aircraft? Lockheed doesn't make aircraft, missiles and billions of dollars of other military equipment? Halliburton doesn't make billions supplying food, washing clothes and providing support services for our troops in the Middle East and elsewhere?
Those bonuses are YOUR tax dollars at work, dude! How come no bitching?
On the contrary, as Bugs would say, I have YOU!
ReplyDeleteThose companies are private companies that do business with the government, but don't (at least not all) depend on the government for all their income. At the same time, I have no problem with cuts to the money the gov't spends on them, as the need for their services allow. Even then, I have no doubt that they could do as much or more for less of our tax dollars. I doubt too many of those corporations will tell the feds to go scratch rather than to accept the lowered income.
So yes, to the extent that I'm sure the feds are paying more than they need to to private contractors, I do indeed bitch on that score.
However, this does not have much to do with the topic at hand. Perhaps someone here will do such a post, but this one concerns a specific destination of our tax dollars, and, whether or not the feds are constitutionally justified in such spending. They aren't. So look there first for cuts in spending.
Like most on the right, I favor looking at everything and entitlements are part of it.