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Title: The Deficit We Want
Source:
NY Times
URL Source: http://economix.blogs.nytimes.com/2011/01/20/the-deficit-we-want/
Published: Jan 22, 2011
Author: David Leohardt
Post Date: 2011-01-22 22:04:25 by go65
Keywords: None
Views: 2460
Comments: 8
We have come to believe a story about the deficit that is largely not true. It’s a comforting story, to be sure. It holds the promise of a painless solution, because it suggests that the country’s huge looming deficits are not really our fault. Instead, they seem to stem from weak- willed politicians, wasteful government programs that do not benefit us and tax avoidance by people we have never met. In truth, the coming deficits are a result, above all, of the fact that most Americans are scheduled to receive far more in Medicare benefits than they have paid in Medicare taxes. Conservative and liberal economists agree on this point. After Medicare on the list of big, growing budget items come Social Security and the military. The three programs are roughly as popular as tax increases are unpopular – which is precisely why solving the deficit problem will be so difficult. The new Times/CBS News poll highlights the problem, by asking more specific questions about taxes and spending than many previous polls have. (See questions 33 through 45 here.) Not surprisingly, when given a straight-up choice between broad spending cuts and tax increases, Americans say they would prefer to reduce the deficit mostly through less spending. It’s not even close: 62 percent for spending cuts, 29 percent for tax increases. A few questions later, though, our pollsters offered a different choice. Would people rather eliminate Medicare’s shortfall through reduced Medicare benefits or higher taxes? The percentages then switch, becoming nearly a mirror image of what they had been. Some 64 percent of respondents preferred tax increases, while 24 percent chose Medicare cuts. The same is true of Social Security: 63 percent for higher taxes, 25 percent for reduced benefits. Herein lies the political problem. We want to cut spending. We just don’t want to cut the benefits that the spending pays for. “The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans,” Doug Elmendorf, the director of the Congressional Budget Office, has said, “and the tax revenues that people are willing to send to the government to finance those services.” In fact, the Congressional Budget Office’s grim forecasts assume, realistically or not, that almost all forms of spending other than retirement spending will grow more slowly than they have been growing. So even if Congress does become more disciplined about the spending it controls, the big, looming deficits will still arrive. They come almost entirely from Medicare, Medicaid and Social Security. (The current deficit — a product of the wars in Iraq and Afghanistan, the Bush tax cuts, the new Medicare drug benefit, the Great Recession and the stimulus program – is indeed likely to shrink as the economy recovers in coming years.) From a purely economic perspective, the deficit remains a manageable problem. Some smaller government programs truly are wasteful and could stand to be cut. Relatively modest changes to Social Security – like raising the eligibility age or starting to subject some income above $106,800 to the Social Security tax – would eliminate its shortfall. Military spending could be cut significantly and still be much greater than in the past or much greater than in any other country. Even Medicare and Medicaid don’t look intractable. After all, every other country in the world, including some that get medical results as good as ours over all, spends far less on health care than we do. It is possible. And if you really want to find reasons for optimism, you can do so in the public opinion data. When Americans are given a set of realistic choices, they are perfectly willing to prioritize. The poll’s respondents, for example, said they would rather cut military spending than Medicare or Social Security (and several bipartisan groups have made specific suggestions for doing so). If Medicare and Social Security must be changed, people prefer increasing payroll taxes on high-income households or raising the Medicare eligibility age – not cutting back on Social Security paychecks or Medicare treatments. Within the tax code, a reduced tax break for mortgage interest looks more palatable than a reduced tax break for health insurance. But none of these narrow, technocratic questions is the first one that needs to be answered. The crucial question today is, simply: Would you rather have your taxes increased or your Medicare and Social Security benefits reduced? “All of the above” is a reasonable answer. “None of the above” is not. If there any politicians who can get us to accept this reality, they haven’t done so yet.
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#1. To: jwpegler, lucysmom, ferretmike, skip intro, godwinson (#0)
PIng, interesting read.
Since January 3, 2011, Republicans have controlled the power of the purse.
Thanks for the ping.
Once upon a time Americans so favored paying down the debt and securing Social Security and Medicare over tax cuts that Republicans perceived it as a problem to be overcome. WASHINGTON - Tax cuts aren't selling like they used to, and that has many conservatives worried. snip Bush, campaigning in New Hampshire Tuesday, was asked why he's made tax cuts a centerpiece of his message despite its lower ranking in the polls. "I believe tax cuts are important because they will be an insurance policy against a downturn in the economy," the governor said. "I don't need a poll or a focus group to tell me what to talk about." Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains. Thomas Jefferson
This special kind of stupidity is independent of inherent intelligence. In this case brain power is overpowered by psychological deficiency, namely self-delusion. This delusion is not genetically produced, but is a result of external influences, notably political, government, media and corporate propaganda intentionally designed to produce delusional beliefs and thinking. Who does this? All sorts of commercial and political interests. The result is a series of biases and blocks, such as cognitive dissonance, to objective facts and information that creates denial about very important conditions affecting the planet, the nation and individuals. People afflicted with this deadly combination appear stupid to those outside their mental ghetto that they gladly inhabit, along with similarly afflicted people. National unity breaks down with countless mental ghettos that span economic, political and geographic boundaries.
Wrong. well over 50% now of our debt comes from war. Past. Present. and Future. In 1998, Bill Clinton presented the first balanced federal budget (with no annual deficit) since 1969 ...and that via CNN... is not even true: As of July 17, 2008, the current US Government Debt is nearly 9.518 Trillion dollars(now $14 trillion. just sayin';}. From the Budget of the United States historical tables (pg 31), the United States tax revenue for fiscal year 2007 was only 1.86 Trillion dollars when the social insurance and retirement receipts are subtracted out. For those of you who think that your money is 100% safe in United States treasuries, consider the fact that the debt to revenue ratio of the United States treasury is over 5 to 1! (9.518 trillion total debt divided by 1.86 trillion in tax revenue). Looking back, here are the historical US government debt numbers from 1986 through 2007: Chart showing ghastly things ;} The United States Has Not Had A Balanced Budget Since 1957! http://www.geldpress.com/2008/07/us-budget-reporting-deception/.
And once again, you'll look long and hard for the word 'oil' in the above. And don't Even think about declining energy per capita. ;}
The three programs are roughly as popular as tax increases are unpopular – which is precisely why solving the deficit problem will be so difficult. I missed that poll on keeping the military sacrosanct. Last time I looked Afghanistan had a 65% + disapproval rate. They don't Even poll Iraq or how many foreign bases do you think we need. ;}
It's not as much interesting, as a sad indictment of where we are as a society. Basically, it says that 64% are unwilling or unable to take care of themselves, and want the nanny-state to pay them their retirements. As always, the ponzi scheme will continue, until such time that it finally collapses under its own weight. Two very good quotes are appropriate, here: AND It is only a matter of time...
ME: Thanks for admitting that you ARE trying to spin this (AZ shooting, and terrorism) onto Palin, and conservatives in general. "There will be no more money when the U.S. dollar has no value, until that time we can keep printing more." -- go65, LF's resident mental giant --
#2. To: go65 (#1)
#3. To: go65 (#0)
“The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans,” Doug Elmendorf, the director of the Congressional Budget Office, has said, “and the tax revenues that people are willing to send to the government to finance those services.”
#4. To: go65 (#0)
#5. To: go65 (#0)
(Edited)
They come almost entirely from Medicare, Medicaid and Social Security. (The current deficit — a product of the wars in Iraq and Afghanistan, the Bush tax cuts, the new Medicare drug benefit, the Great Recession and the stimulus program – is indeed likely to shrink as the economy recovers in coming years.)
#6. To: All (#5)
#7. To: go65 (#0)
After Medicare on the list of big, growing budget items come Social Security and the military.
#8. To: go65 (#1)
(Edited)
interesting read.
“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship”
-- Alexander Tyler, 1787 -- “The problem with socialism is that you eventually run out of other people’s money.”
- Margaret Thatcher
Brian S(ocialist): I have never hidden that fact...
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