Doing The Math

[Zam-Zam]

This is something that is seldom discussed, which is a pity:


"The president is in the midst of a charm offensive."
-- The Washington Post, referring to President Obama's meetings with congressional Republicans

WASHINGTON -- We don't need a charm offensive; we need a candor offensive. The budget debate's central reality is that federal retirement programs, led by Social Security and Medicare, are crowding out most other government spending. Until we openly recognize and discuss this, it will be impossible to have a "balanced approach" -- to use one of President Obama's favorite phrases. It's the math: In fiscal 2012, Social Security, Medicare, Medicaid and civil service and military retirement cost $1.7 trillion, about half the budget. If they're off-limits, the burdens on other programs and tax increases grow ever-greater.

It's already happening. The military is shrinking and weakening: The Army is to be cut by 80,000 troops, the Marines by 20,000. As a share of national income, defense spending ($670 billion in 2012) is headed toward its lowest level since 1940. Even now, the Pentagon says budget limits hamper its response to cyber-attacks. "Domestic discretionary spending" -- a category including food inspectors, the FBI, the Weather Service and many others -- faces a similar fate. By 2023, this spending will drop 33 percent as a share of national income, estimates the Congressional Budget Office. Dozens of programs will be squeezed.

Nor will states and localities escape. Federal grants ($607 billion in 2011) will shrink. States' Medicaid costs will increase with the number of aged and disabled, which represent two-thirds of Medicaid spending. All this will force higher taxes or reduce traditional state and local spending on schools, police, roads and parks.

The budget debate may seem inconclusive, but it's actually having pervasive effects. Choices are being made by default. Almost everything is being subordinated to protect retirees. Solicitude for government's largest constituency undermines the rest of government. This is an immensely important story almost totally ignored by the media. One reason is that it's happening spontaneously and invisibly: growing numbers of elderly are simply collecting existing benefits. The media do not excel at covering inertia.

Liberals drive this process by treating Social Security and Medicare as sacrosanct. Do not touch a penny of benefits; these programs are by definition progressive; all recipients are deserving and needy. Only a few brave liberals complain that this dogma threatens programs for the non-aged poor. "None of us wants to impose new burdens on vulnerable seniors," write economists Harry Holzer of Georgetown University and Isabel Sawhill of the Brookings Institution in The Washington Post. "[But] for how long will we continue to sacrifice investments in our nation's children and youth ... to spend more and more on the aged?"




Complete text: http://www.realclearpolitics.com/articles/2013/03/18/government_as_old-age_home_117479.html



It would require political courage to address this issue, which is why our elected leaders won't. Anyone brave enough to even suggest looking at this will be beaten over the head with images of grandma digging through a dumpster for her next meal. That;s how the game is played.

Greece was the canary in the coal mine. It is happening here.

 

[OldGaffer]

I know you Wingers discount any Economist that wins a Nobel Prize as being stupid, but lets see what Stiglitz has to say about "austerity" in Europe:

The European project, as idealistic as it was, was always a top-down endeavor. But it is another matter altogether to encourage technocrats to run countries, seemingly circumventing democratic processes, and foist upon them policies that lead to widespread public misery.



While Europe’s leaders shy away from the word, the reality is that much of the European Union is in depression. The loss of output in Italy since the beginning of the crisis is as great as it was in the 1930s. Greece’s youth unemployment rate now exceeds 60 percent, and Spain’s is above 50 percent. With the destruction of human capital, Europe’s social fabric is tearing, and its future is being thrown into jeopardy.

Europe’s talents and resources—its physical, human, and natural capital—are the same today as they were before the crisis began. The problem is that the prescriptions being imposed are leading to massive underutilization of these resources. Whatever Europe’s problem, a response that entails waste on this scale cannot be the solution.



The simplistic diagnosis of Europe’s woes—that the crisis countries were living beyond their means—is clearly at least partly wrong. Spain and Ireland had fiscal surpluses and low debt/GDP ratios before the crisis. If Greece were the only problem, Europe could have handled it easily.


An alternative set of well-discussed policies could work. Europe needs greater fiscal federalism, not just centralized oversight of national budgets. To be sure, Europe may not need the 2-to-1 ratio of federal to state spending found in the United States; but it clearly needs far more European-level expenditure, unlike the current miniscule EU budget (whittled down further by austerity advocates).

http://www.slate.com/articles/business/project_syndicate/2013/03/italian_elections_results_show_that_european_austerity_is_not_working.2.html

So lets take a policy that has been a massive failure and adopt it here. And you wonder why RMoney did not win the election?

 

[OldGaffer]

 

[OldGaffer]

 

[MaryAnne]

View attachment 5689

5 stars for that one!

 

[OldGaffer]

Another Nobel prize winner, Krugman on Austerity:

With unemployment at Great Depression levels and with erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far. And this means that there may not be a deal after all.

Much commentary suggests that the citizens of Spain and Greece are just delaying the inevitable, protesting against sacrifices that must, in fact, be made. But the truth is that the protesters are right. More austerity serves no useful purpose; the truly irrational players here are the allegedly serious politicians and officials demanding ever more pain.

Consider Spain’s woes. What is the real economic problem? Basically, Spain is suffering the hangover from a huge housing bubble, which caused both an economic boom and a period of inflation that left Spanish industry uncompetitive with the rest of Europe. When the bubble burst, Spain was left with the difficult problem of regaining competitiveness, a painful process that will take years. Unless Spain leaves the euro — a step nobody wants to take — it is condemned to years of high unemployment.

But this arguably inevitable suffering is being greatly magnified by harsh spending cuts; and these spending cuts are a case of inflicting pain for the sake of inflicting pain.

First of all, Spain didn’t get into trouble because its government was profligate. On the contrary, on the eve of the crisis, Spain actually had a budget surplus and low debt. Large deficits emerged when the economy tanked, taking revenues with it, but, even so, Spain doesn’t appear to have all that high a debt burden.

Part of the explanation is that in Europe, as in America, far too many Very Serious People have been taken in by the cult of austerity, by the belief that budget deficits, not mass unemployment, are the clear and present danger, and that deficit reduction will somehow solve a problem brought on by private sector excess.

Beyond that, a significant part of public opinion in Europe’s core — above all, in Germany — is deeply committed to a false view of the situation. Talk to German officials and they will portray the euro crisis as a morality play, a tale of countries that lived high and now face the inevitable reckoning. Never mind the fact that this isn’t at all what happened — and the equally inconvenient fact that German banks played a large role in inflating Spain’s housing bubble. Sin and its consequences is their story, and they’re sticking to it.

Worse yet, this is also what many German voters believe, largely because it’s what politicians have told them. And fear of a backlash from voters who believe, wrongly, that they’re being put on the hook for the consequences of southern European irresponsibility leaves German politicians unwilling to approve essential emergency lending to Spain and other troubled nations unless the borrowers are punished first.

Of course, that’s not the way these demands are portrayed. But that’s what it really comes down to. And it’s long past time to put an end to this cruel nonsense.

If Germany really wants to save the euro, it should let the European Central Bank do what’s necessary to rescue the debtor nations — and it should do so without demanding more pointless pain.

http://www.nytimes.com/2012/09/28/opinion/krugman-europes-austerity-madness.html?_r=0

Republicans cant wait to bring on the pointless pain.

 

[Zam-Zam]

I know you Wingers discount any Economist that wins a Nobel Prize as being stupid, but lets see what Stiglitz has to say about "austerity" in Europe:






http://www.slate.com/articles/business/project_syndicate/2013/03/italian_elections_results_show_that_european_austerity_is_not_working.2.html

So lets take a policy that has been a massive failure and adopt it here. And you wonder why RMoney did not win the election?

View attachment 5688

I rather expected to be attacked, so I'm not surprised by this. The idea I suppose is to stop, at all costs, the notion of even discussing this.


I think we have choices, at least for now. If we are going to treat everything as a sacred cow, however, those choices will be made for us. You can vilify anyone in favor of at least looking at the issue if you want to, but that will not alter the math.

 

[OldGaffer]

Here is the math that needs to be altered:

 

[OldGaffer]

Taxes are at historical lows, and need to be raised, that fixes over half the problem. Defernse spending is at historical highs, and needs to be cut, that completes the equation without massive cuts to social programs.

Obama won on that platform, Democrats gained seats in the House and Senate, and would have won the House compltely less massive Republican Gerrymandering, and in fact got 1.2 million more votes on that platform. But by all means continue to pound the drum of massive cuts to social security and medicare, that will take your party to Whigdom faster than the blink of an eye.

 

[OldGaffer]

Lets keep this simple, Europe has tried your economic policy for the last 3 years and is now a basket case, and you want us to adopt that same policy here, knowing it is a failure everywhere it has been tried? Hell, give me one good reason, just one?

 

[Zam-Zam]

Let's see what two former Clinton economists have to say on the subject:

At the same time, those who argue that we can put off any serious discussion of debt reduction for a number of years — because of the temporarily stable debt-to-GDP ratio projected for 2015 to 2022 — understate the dangers that loom just beyond this period. The aging population and the growth of health-care costs make enacting reforms to entitlements imperative. Enacting them now would help the economy by reducing uncertainty. This would also instill more confidence in government, give people time to adjust and release the pressure on the small portion of the budget that so far has absorbed virtually all of the cuts.

The reluctance of our fellow progressives to consider sensible reforms to entitlement programs is puzzling. None of us wants to impose new burdens on vulnerable seniors or those who are about to retire. But any new provisions can be phased in gradually and structured in a way that protects the oldest and most fragile members of the population in addition to those with limited incomes.

With these caveats, progressives must begin to acknowledge a hard fact: Our very expensive retirement programs already crowd out public spending on virtually all other priorities — including programs for the poor and those that strengthen the nation’s future — and will do so at even higher rates in the next decade and beyond unless we reform these large programs.


Complete text: http://www.washingtonpost.com/opinions/payments-to-elders-are-harming-our-future/2013/03/08/08c9030c-82bd-11e2-b99e-6baf4ebe42df_story.html




The piece is critical of both Republicans and Democrats, as it should be. It makes the case, however, that those that favor not addressing these issues at all are doing no favors to ritirees or the economic future of this country. Kicking the can down the road again is a very bad strategy.




I hope those who like to respond with posters and slogans instead of an actual argument will continue to do so. Unwittingly, you're making my point for me.

 

[OldGaffer]

So calling you out on your lack of a viable answer, hell any answer at all, to the problem is just sloganeering? Stiglitz and Krugman have addressed this budgetary problem at length, austerity is not the answer, gutting the social safty net is not the answer. The answers are much easier than putting millions of seniors and poor at risk. Here is another slogan for you:



Have fun trying to win an election on that platform.

 

[Zam-Zam]

So calling you out on your lack of a viable answer, hell any answer at all, to the problem is just sloganeering? Stiglitz and Krugman have addressed this budgetary problem at length, austerity is not the answer, gutting the social safty net is not the answer. The answers are much easier than putting millions of seniors and poor at risk. Here is another slogan for you:

View attachment 5692

Have fun trying to win an election on that platform.

You'll note that I did not propose a remedy, only that this issue be discussed on addressed in some way. You seem to want any possible discussion stifled. That's not a healthy approach, and is certainly anti-intellectual.

I've presented the views of one conservative and two liberals who are saying much the same thing. You present slogans. You're helping my cause more than yours.

 

[trapdoor]

Taxes are at historical lows, and need to be raised, that fixes over half the problem. Defernse spending is at historical highs, and needs to be cut, that completes the equation without massive cuts to social programs.

Obama won on that platform, Democrats gained seats in the House and Senate, and would have won the House compltely less massive Republican Gerrymandering, and in fact got 1.2 million more votes on that platform. But by all means continue to pound the drum of massive cuts to social security and medicare, that will take your party to Whigdom faster than the blink of an eye.

I disagree that the Republican control of the House is based on gerrymandering. Thirty of the 50 governors in the United States are Republican -- gerrymandering would have no impact on the Republican majorities that elected them.

The solution to the problem IS increased taxes PLUS program cuts -- and the reason conservatives like myself won't "give" on revenue is simple. We don't believe the additional revenue will be used to address the problem. We think any additional revenues will simply be used to expand the existing programs as they have in the past. If you don't like that reality, give Republicans the cuts they want up front, and then we can talk revenues. The last "deal" the president offered, the one with four dollars of cuts for each dollar of revenue front-loaded the revenue, and put the cuts so far down the road that they didn't kick in until after he's out of office.

 

[OldGaffer]

Trap, Dems got over a milllion more House votes than Repubs. The House repubs hold a majority of seats with a minority of votes, and you say its not gerrymandering?

 

[OldGaffer]

You'll note that I did not propose a remedy, only that this issue be discussed on addressed in some way. You seem to want any possible discussion stifled. That's not a healthy approach, and is certainly anti-intellectual.


I've presented the views of one conservative and two liberals who are saying much the same thing. You present slogans. You're helping my cause more than yours.

Your party has presented a solution, and their solution was rejected by the voters, that is why we dont have President RMoney and VP Lyin Ryan.

 

[OldGaffer]

Our Budget Eliminates the Deficit and Raises a $31 Billion Surplus In Ten Years
Our budget protects Social Security, Medicare and Medicaid and responsibly eliminates the deficit by targeting its main drivers: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession.

Our Budget Puts America Back to Work & Restores America’s Competitiveness
• Trains teachers and restores schools; rebuilds roads and bridges and ensures that users help pay for them
• Invests in job creation, clean energy and broadband infrastructure, housing and R&D programs

Our Budget Creates a Fairer Tax System
• Ends the recently passed upper-income tax cuts and lets Bush-era tax cuts expire at the end of 2012
• Extends tax credits for the middle class, families, and students
• Creates new tax brackets that range from 45% starting at $1 million to 49% for $1 billion or more
• Implements a progressive estate tax
• Eliminates corporate welfare for oil, gas, and coal companies; closes loopholes for multinational corporations
• Enacts a financial crisis responsibility fee and a financial speculation tax on derivatives and foreign exchange

Our Budget Protects Health
• Enacts a health care public option and negotiates prescription payments with pharmaceutical companies
• Prevents any cuts to Medicare physician payments for a decade

Our Budget Safeguards Social Security for the Next 75 Years
• Eliminates the individual Social Security payroll cap to make sure upper income earners pay their fair share
• Increases benefits based on higher contributions on the employee side

Our Budget Brings Our Troops Home
• Responsibly ends our wars in Iraq and Afghanistan to leave America more secure both home and abroad
• Cuts defense spending by reducing conventional forces, procurement, and costly R&D programs

Our Budget’s Bottom Line
• Deficit reduction of $5.6 trillion
• Spending cuts of $1.7 trillion
• Revenue increase of $3.9 trillion
• Public investment $1.7 trillion



Support for the People's Budget

President Bill Clinton

"The most comprehensive alternative to the budgets passed by the House Republicans and recommended by the Simpson-Bowles Commission"

"Does two things far better than the antigovernment budget passed by the House: it takes care of older Americans and others who need help; and much more than the House plan, or the Simpson-Bowles plan, it invests a lot our tax money to get America back in the future business"

Paul Krugman

“genuinely courageous”

“achieves this without dismantling the legacy of the New Deal”

Dean Baker

"if you want a serious effort to balance the budget, here it is."

Jeffrey Sachs

“A bolt of hope…humane, responsible, and most of all sensible”

Robert Reich

"modest and reasonable"

The Economist

“Courageous”

“Mr Ryan's plan adds (by its own claims) $6 trillion to the national debt over the next decade, but promises to balance the budget by sometime in the 2030s by cutting programmes for the poor and the elderly. The Progressive Caucus's plan would (by its own claims) balance the budget by 2021 by cutting defence spending and raising taxes, mainly on rich people.”

The New Republic

“...something that's gotten far too little attention in this debate. The most fiscally responsible plan seems to be neither the Republicans' nor the president's. It's the Congressional Progressive Caucus plan…”

The Washington Post

"It’s much more courageous to propose taxes on the rich and powerful than spending cuts on the poor and disabled."

Rachel Maddow

“Balances the budget 20 years earlier than Paul Ryan even tries to”

The Guardian

“the most fiscally responsible in town… would balance the books by 2021“

The Nation

"the strongest rebuke...to the unconscionable 'Ryan Budget' for FY 2012."

Center for American Progress

"once again put requiring more sacrifice from the luckiest among us back on the table"

Economic Policy Institute

"National budget policy should adequately fund up-front job creation, invest in long-term economic growth, reform the tax code, and put the debt on a sustainable path while protecting the economic security of low-income Americans and growing the middle class. The proposal by the Congressional Progressive caucus achieves all of these goals."

The Washington Post

“The Congressional Progressive Caucus plan wins the fiscal responsibility derby thus far."

Rolling Stone

"This is more than a fantasy document. It's sound policy."

Forbes

"instead of gutting programs for the poor like Medicaid and Medicare, food stamps, and the new healthcare law, the People’s Budget focuses on cuts in defense. It also doesn’t scrap new financial regulations designed to at least partly stave off another massive financial collapse like the one that put us in this mess in the first place."

I like this solution.

http://cpc.grijalva.house.gov/the-peoples-budget/

 

[fairsheet]

The top post goes to "doing the math". Speaking SPECIFICALLY of Social Security, "the math" isn't even remotely as daunting and intractable as some either continue to feel or continue to shout. So..."candor, my ass", at least in terms of what's currently being spewed.
"Candor", would be telling the people the TRUTH as to the Social Security math, proposing the remarkably simple AND painless solutions that math suggests, and just getting the godamned Social Security thing off our table.

And as I have before, I BLAME both the GOP and the Dems for this. The GOP has been salivating over the Social Security pot of dough, almost since Social Security was conceived. It's a good thing we have the Dems to keep those foxes out of our chicken coop. But, why don't the Dems just be honest about how pissant the "Social Security problem" is, and fix the damned thing? They refuse to do so, because Social Security is perhaps, the Dem's most useful wedgie.

 

[EatTheRich]

Taxes are at a historic low and there's still almost no capital investment going on. Raising taxes could kick the problem down the road a few decades at great cost to the economy, but fundamentally the U.S. can no longer afford guns and butter, as they could throughout the 1950s. That they will choose low taxes on the rich, high taxes on the poor, a bloated military, and austerity is inevitable. What we are seeing here are the death throes of an obsolete empire.

 

[OldGaffer]

Taxes are at a historic low and there's still almost no capital investment going on. Raising taxes could kick the problem down the road a few decades at great cost to the economy, but fundamentally the U.S. can no longer afford guns and butter, as they could throughout the 1950s. That they will choose low taxes on the rich, high taxes on the poor, a bloated military, and austerity is inevitable. What we are seeing here are the death throes of an obsolete empire.

If the policies of the republicans continue to dominate the economy, you are absolutely correct. Enacting the progressive caucus budget has a chance of turning it around.