Reason Magazine
- reason.com
- reason.tv
- reason.org
- Donate
- Site Search:
Reason on Facebook
Reason on Twitter
Reason on YouTube
Reason RSSGet Reason E-mail Updates!
Manage your Reason e-mail list subscriptionsadvertisements
Obama Concerned About Deficit; Prepared to Do Anything But Cut Spending
Via Drudge comes this Reuters report that President Barack Obama is losing sleep over federal deficits:
"I am concerned about the long-term issue of our structural deficit and our long-term debt because if we don't get a handle on that, then there's no doubt that at some point, whether it's the Chinese, the Koreans, the Japanese, and whoever else has been snatching up Treasuries are going to decide that this is too much of a risk," Obama said.
"That's why it's so important for us to get a handle on our long-term structural deficit," he said.
Obama predicts that unemployment, currently at 9.4 percent (the highest since 1983), will crack 10 percent by year's end. More here.
It's all well and good that Obama has his eye on structural deficits, meaning pay-as-you-go entitlement spending on programs such as Social Security and Medicare, where fiscal apocalypse is just around the demographic corner. Clearly, these programs need to be changed, and fast (here's a hint on a fix: Don't expect a massive government takeover of the health care industry to save a plugged nickel, though it can always make an annoying system even worse). But if that sort of built-in, ever-expanding spending is part of the problem, then why is the president talking about turning Pell grants into entitlements? This fire has enough fuel already, thank you very much.
More to the point, if spending's the thing, how do you square
reports of
Obama's literally being kept awake at night by deficits
with his actual proposed plan for the next 10 years,
which envisions nothing but red ink of historic
proportions:
Recall that Obama, that uber-ironic wag, titled his first-ever budget "A New Era of Responsibility" and delivered a document that was chock full of declamations regarding greedy capitalists and evil marketeers who greased the wheels of commerce with the blood young virgins and puppy dogs—and zero cuts, vision, or guidance when it came to restraining government spending.
The press corps, still in its swoon over Obama, will actually take seriously his claims to want to cut spending and be responsible (by which, of course, he means something orthogonal at best to the concept as Ma and Pa Kettle might understand it). Now that Bushtard is outta the White House, you can hear them whisper, we're all wearing big boy pants now, don't you know, and smart guys like Turbo Tax Tim Geithner really know what they're doing (they got, like, 1400s on their SATs!), not like that idiot Hank Paulson (who was really, really smart, the media were telling us just last fall) and the Texas Leaguers Bush 43 brought to town.
And just like a fairy tale, it will all be totally, absolutely 100 percent true. Except for the part where the government actually reduces a red cent of spending.
|6.17.09 @ 8:56AM|#
Tax revenues will soar, once we get those millions of green jobs on line. Rickshaw pilots make, like, a *shitload* of money.
|6.17.09 @ 9:07AM|#
P Brooks,
If tax revenues don't come up, we are just going to have to break a
few more windows. It is the Chicago way.
Gilbert Martin|6.17.09 @ 9:10AM|#
"I suspect he's lying."
Of course.
It's a long standing pattern with Obama.
He spouts some rhetoric to make it sound like he's not actually
doing what he is actually doing.
Like the nonsense about not wanting to run the auto companies while
simultaneously firing the GM CEO, making sure that GM would not be
importing small Chinese cars, etc.
Obama doesn't give a flip about the deficit or national debt. All
he really cares about is redistributing wealth as fast as he can
get away with it. Any expressed "concern" about the debt is merely
a set up for massive tax increases to further the real
objective.
robc|6.17.09 @ 9:16AM|#
Nick,
You are still posting that fucking graph? We have not run a surplus
since the 50s.
|6.17.09 @ 9:30AM|#
That graph needs to be updated. It errs very significantly on the optimistic side, as it overestimated tax receipts.
|6.17.09 @ 9:31AM|#
Oh, is he lying? Of course. He's teeing up a healthcare bill that will add hundreds of billions of debt per year.
|6.17.09 @ 9:58AM|#
"Oh, is he lying? Of course. He's teeing up a healthcare bill
that will add hundreds of billions of debt per year."
And don't forget cap and trade which will cost hundreds of billions
and further supress tax revenues by reducing growth. Back during
the stimulus debate I pointed out to a couple of liberals I know
that the stimulus and TARP are going to run the deficit so high
that there will be no money for health care reform (a good thing in
my view but not in theirs). None of them ever had an answer beyond
a blind faith in Obama.
Gilbert Martin|6.17.09 @ 10:05AM|#
I heard some someone being interviewed on CNBC this morning
about health care "reform"
He said in 1965 when Medicare was started, the advocates projected
the annual cost in 1990 would be $12 billion. The actual annual
cost for 1990 was over $100 billion.
Anyone who believes Obama's claims that his plan wil be cutting
health care costs is a fool.
Warty|6.17.09 @ 10:11AM|#
Obama is an ongoing disaster. I can't figure out how people haven't realized yet how unhopey and unchangey he is.
|6.17.09 @ 10:14AM|#
Have the people pushing for healthcare 'reform' ever, EVER shown
any willingness to cut govt spending on healthcare programs, or are
they the people who regularly use the amount of others' money
they're willing to spend on govt healthcare programs as a metric of
their moral wonderfulness?
Do I even need to ask why people with that track record should be
trusted when they claim they want to do this to save money on
anything run by the govt?
|6.17.09 @ 10:28AM|#
Yo, Obama's not a very good president.
But he's apparently the World's Greatest Hypnotist.
Kyle Jordan|6.17.09 @ 10:41AM|#
"Obama is an ongoing disaster. I can't figure out how people
haven't realized yet how unhopey and unchangey he is."
You know, part of me thinks that if there starts to be a massive
"awakening" if you will, to the piss poor job Obama and his
administration are really doing, we will have some type of unrest
or even riots.
Now, I think this is HIGHLY unlikely but with how hard some folks
bought in to his bullshit, there may be those who would simply snap
when they realize it's business as usual.
Warty|6.17.09 @ 10:48AM|#
with how hard some folks bought in to his
bullshit
No kidding. All you have to do is say HOPE! CHANGE! with the proper
gravitas and the world eats out of your hand. I don't get it.
As far as an awakening: no chance. Everything that's wrong is
Bush's fault.
|6.17.09 @ 10:54AM|#
As far as an awakening: no chance. Everything that's wrong
is Bush's fault.
Hence the big spending. If they kept the spending small, then Bush
obviously didn't do much damage. The more they spend, the more they
argue that 'proves' how much damage 'deregulation' did.
Mike M.|6.17.09 @ 11:02AM|#
But he's apparently the World's Greatest
Hypnotist.
As personally popular as he still is, there are a lot of signs that
the honeymoon is coming to an end. Many of the the issue-related
polls are swinging away from him rapidly. And the Republicans are
polling generically even with the Democrats a mere seven months
after the voters couldn't sweep their asses out of office quickly
enough.
|6.17.09 @ 11:04AM|#
As far as an awakening: no chance.
Not without some kind of short, sharp, traumatic shock. The
proverbial dead hooker or live boy, something too horrible for even
the Dem Congress to look the other way.
Right now, I give slightly less than even odds that he will get his
healthcare reform bill, and slightly more than even odds that he
will get his global warming bill (probably gussied up as a revenue
raiser to pay for healthcare reform).
If so, he will have succeeded in establishing the Total State's
control of (1) healthcare and, hence, lifestyle; (2) banking and
finance (3) the auto industry; and (4) the energy industry.
The commanding heights, indeed.
Worst. President. Ever.
|6.17.09 @ 11:24AM|#
It would be fun to have Joe back so he could try to defend Obama at this point.
|6.17.09 @ 11:57AM|#
I will give you the long Joe. Obama inherited an economy on the
verge of a second great depression. He acted swiftly and decisively
and saved the banks and got a stimulus program out that got people
spending again and kept a severe recession from becomina
depression. Yes, the debt is bad. But it was our only choice after
8 years of republicans destroying the country. Now Obama will cut
healthcare spending by socializing it and solve the defifit by
raising taxes back to the humane levels of the Clinton
Administration. And then .. ah fuck it I can't even type this
shit.
Anyway it would end with something about obama riding off into the
sunset on his unicorn in 2017
mark|6.17.09 @ 1:26PM|#
Seriously. I haven't read anything since The Road to Serfdom that better explains socialism, especially the socialism that is practiced today. Read it, grok it, share it.
Chad|6.17.09 @ 1:49PM|#
Raise taxes. My taxes. Your taxes. Everone's taxes.
Grow up, pay your bills, and quit being whiny little babies.
And no, we are going to scuttle our military, throw grandma on the
street, and shoot any poor person who shows up at the hospital,
which are the type of cuts that would be necessary to pay for the
holes we keep digging.
Mike M.|6.17.09 @ 1:55PM|#
Raise taxes. My taxes. Your taxes. Everone's
taxes.
And thanks to Obama's cabinet we now know why left wing scumbags
like you are always pushing for higher taxes: because you don't pay
them anyway!
Sean W. Malone|6.17.09 @ 2:03PM|#
Yeah, I can see Chad saying the first bit - as he has a dozen times... but any admission that we're "digging holes" at all is just not his style.
Chad|6.17.09 @ 3:40PM|#
Sean W. Malone | June 17, 2009, 2:03pm | #
Yeah, I can see Chad saying the first bit - as he has a dozen
times... but any admission that we're "digging holes" at all is
just not his style.
Since when have I ever argued anything other that our debt is
massive and unconcionable?
The problem is not that we are running a deficit this year. Running
a deficit during the bad times is perfectly logical. The problem is
that we have deficits during the GOOD times, when we should be
saving for times like today.
Sean W. Malone|6.17.09 @ 3:59PM|#
Running deficits during the "bad times" is the least logical
thing you could possibly do Chad.
It may happen as an unfortunate consequence of bad financial
planning, but the last time you were unemployed, or had some kind
of financial emergency and your response was "Oh hey, I know... I
should spend more!!"
C'mon man. It's the antithesis of "perfectly logical".
You don't ramp up spending when you're doing bad, you figure out
where to tighten the belt, live on Ramen for a couple months and
get yourself back in the black. There's nothing but logical fallacy
& bad reasoning behind what Obama's doing right now - led by
some of the worst economists in the world... as evidenced by them
also being the ones who've A. been in charge for the last 20 years,
B. created the mess, C. didn't the mess, D. actively campaigned on
the idea that everything was perfectly fine, E. stuck their heads
in the sand until well after the crash and F. blame everyone but
themselves, even though... A.
This is just nothing but a nightmare of stupid.
mark|6.17.09 @ 4:57PM|#
Why defend capitalism against trolls? Because it's easy!
scuttle our military - So anything less than a huge
increase in funding is just plain un-American right?
throw grandma on the street - You must be referring to
Social Security. Please compare return on investment for your
average low-risk pension vs. Social Security over time. In a more
sober moment I might agree that SS is a good thing, but even then
I'd say you should increase the retirement age. Now, if
possible.
shoot any poor person who shows up at the hospital - Hah.
One hah, that's all you get. Even the Patients' Choice Act
preserves Medicaid pretty much entirely. Poor people show up at the
hospital all the time and they are treated as well as everyone
else.
I know we have different opinions on the nature of government. You
think that if only we funded programs x, y, and z, we could solve
problems (or "crises" in Washington-speak) a, b, and c. I think
that most of the problems we usually think of as requiring
government intervention are usually created by earlier
interventions; thus it's very hard to justify giving them more
money. Where will the two positions meet?
Chad|6.17.09 @ 5:54PM|#
Sean W. Malone | June 17, 2009, 3:59pm | #
Running deficits during the "bad times" is the least logical thing
you could possibly do Chad.
It may happen as an unfortunate consequence of bad financial
planning, but the last time you were unemployed, or had some kind
of financial emergency and your response was "Oh hey, I know... I
should spend more!!"
No, but the last time I had some "rough times", I did deficit
spend. So would just about any other rational person in that
situation. The difference is that, being logical and rational
(unlike the median voter), I save when things are going
smoothly.
And under certain circumstances, it actually makes sense to spend
MORE during bad times, even for individuals. For example, if I were
to become unemployed due to an illness, only a fool would argue
that I should not take care of my health issues because it is too
expensive, even though not taking care of them would mean I would
never get back to work. That is essentially an analogy for what is
happening at the national level now.
Government spending should be counter-cyclical. It really isn't
hard to understand.
Chad|6.17.09 @ 5:57PM|#
Mark: Pick one of the three. Any one of these would more or less
balance the budget going forward
1: The complete elimination of the military.
2: The complete elimination of Social Security
3: The complete elimination of Medicare and Medicaid
THAT is the scope of the cuts that you would have to make in order
to balance the budget. Whining about little $3 million projects is
childishness.
mark|6.17.09 @ 6:09PM|#
How about just rolling back all three? Every year, all
three increase. How about a few years with a decrease?
And while most of the people to blame for this are dead, most of
our tax dollars go to interest payments on past military spending.
So most of the problem lies with the military.
Chad|6.17.09 @ 6:26PM|#
Mark, to balance the budget, you would have to cut all three of
these items by a third. How are you going to choose which grandma's
get tossed? Which poor people to boot from the hospital? What
military programs to cut.
Remember, 1/3. Not chump change. Be explicit, and provide
convincing, politically viable arguments.
Sean W. Malone|6.17.09 @ 6:59PM|#
Or Chad, you can actually realize that rolling back EVERYTHING
less than 1/3rd is far easier and is actually going to wind up with
the same result - but your argument is framed in a way that
disallows anyone from choosing Option D. Convenient for you, not
very honest though...
When you deficit spend, as I have many times in my life as well, I
recognize it as a consequence of my previous bad
decision-making/lack of savings. I then attempt to compensate by
lowering my expenditures as much as possible and digging my way out
through personal sacrifice & savings. What I explicitly
don't do, however, is drive to the
nearest mall and go on a spending binge.
Now, once I've corrected for my poor planning and subsequently poor
results, I'm back on track and can do what I want - within the
limits of my budget of course. Governments with fiat currencies
basically do the opposite, if you haven't noticed... And holy shit,
it leads to problems. Shocking!
Anyway, if you want a cut-back solution, I have one for you:
1. Bring troops home immediately from Iraq and perhaps Afghanistan.
Bring troops home from Japan, Germany, and everywhere else they're
stationed that is not American soil. When the soldiers return home,
release them from service and immediately return all of the money
being spent on military for those purposes to the American
taxpayers in the form of widespread cuts.
2. Eliminate Homeland Security. Return their duties to the FBI
& CIA respectively. Again, return money to taxpayers.
3. End the drug war immediately, make Marijuana & other
low-level narcotics legal - treat them like alcohol &
cigarettes. Save billions on cops & prisons, increase revenue
to states from sales tax.
4. Re-focus federal spending to prioritize education & services
for the very poor, then cap congressional/executive spending at 10%
less than projected revenue by cutting departmental budgets
throughout every area of government. Some will need to be closed
down.
5. Eliminate corporate taxes (which are paid by consumers anyway)
and sales tax and any other tax that would be applied to capital
development purposes. Make America a business-friendly environment
again... People want to live here for social reasons, there's no
reason they shouldn't want to live here for economic ones as they
used to.
Those 5 steps right there should save a few hundred billion, and in
the process leave more money in the private sector for capital
development. Suddenly we have businesses actually leaving China
& India to set up offices here, more money in savings for banks
to loan out to small business owners/venture capitalists and a
balanced budget with a built-in surplus year to year.
|6.17.09 @ 7:05PM|#
You are still posting that fucking graph? We have not run a surplus since the 50s.
robc, I take it you have simply not bothered to read the numerous
times that I have explained this paradox.
One more time. The Federal Government really did take in more than
in taxes than it spent in 1999 and 2000.
However a big chunk of those taxes were Social Security taxes the
portion of which was not paid out to beneficiaries was
"lent" by the SSA to the Treasury.
That loan increased the portion of the debt that the Government
"owes itself" (as though this had any meaning). The debt which the
government owes to the public went down, but not enough to offset
the increase due to the SS fraud.
I keep harping on this because i think it's important for people to
really understand how utterly bogus US Government accounting
is.
It's though I spent money on booze and then pretended I had a bank
account because I wrote down the outlays in a notebook. "I still
have the money," I'd tell you, "I lent it to myself, I'm even
paying myself interest on it!"
If I get no response I'll quit harping on it. Clearly this
fraudulent behavior doesn't bother other people as much as it does
me.
as paradoxical as it seems, BOTH the graph above and the table
showing the debt increasing ARE CORRECT.
I mean, seriously, does no one understand this? Are my
comments getting translated into Farsi between my keyboard and your
screens?
Oh, and what Sean Malone just said.
Chad|6.17.09 @ 7:23PM|#
Sean W. Malone | June 17, 2009, 6:59pm | #
Or Chad, you can actually realize that rolling back EVERYTHING less
than 1/3rd is far easier and is actually going to wind up with the
same result - but your argument is framed in a way that disallows
anyone from choosing Option D. Convenient for you, not very honest
though...
Sean, SS, Medicare, Medicaid and defense ARE just about everything,
nearing 80% of the budget. Half of the remainder is interest on the
debt, which we can't cut. So including "everything", that 1/3
figure is still almost a third.
So let's throw in "everything else", and make 30% cuts.
You will quickly realize that there is no way you are going to cut
30% across the board that would be remotely politically viable.
Chad|6.17.09 @ 7:26PM|#
Isaac, I agree with you about the bogus Social Security
accounting.
The fact that intelligent people cannot distinguish an IOU from an
IOMe just blows my mind.
A trust fund full of notes saying "We, the American people, owe the
American people trillions of dollars! Don't worry, we have AAA
credit!" is beyond worthless.
|6.17.09 @ 7:30PM|#
Of course, it's worth noting that if Off-Budget items were
counted the 99-00 "surpluses" would disappear and the deficits
would be even bigger.
I'm not actually sure what Off-Budget even means, but I don't think
anyone would blame a simple man like me for wondering if it was
something like what Federal Prosecutors are going after all those
fellas from Enron, WorldCom and HCA for.
Sean W. Malone|6.17.09 @ 7:41PM|#
Chad,
If I was worried about the sheer "politics" of it, we can't make
any cuts at all... No politicians like cuts to anything, bad press
and all. Regardless, that's what we need.
Also, not to quibble, but the CBO has "other" as almost 30% of the
Federal Budget... See
chart
I don't think you need to slash 1/3rd from everything, but more
like - axe about 66% of military spending, leaving us still well
ahead of the rest of the world in that dept., then limit all future
SS payouts, say to anyone under the age of 30 as of today to only
encompass the bottom quintile of wage earners - allowing and
encouraging the rest of us to save for our own retirements, etc.
and shave away at everything else. It doesn't have to be perfectly
even.
I'm 100% with ya Isaac. Mindblowing.
Sean W. Malone|6.17.09 @ 7:47PM|#
I forgot, also remove trade restrictions & loosen immigration policy significantly.
Sean W. Malone|6.17.09 @ 10:32PM|#
Includes more than the Iraq War, but yes, it also includes the Iraq War, regardless... That chunk should be removed 100%, so either way, you're taking an even bigger bite out of "Other" and still a 50-66% bite out of "Defense".
Chad|6.17.09 @ 11:51PM|#
The "other" also includes Health and Human Services and Veterans
Affairs.
http://en.wikipedia.org/wiki/File:Fy2008spendingbycategory.png
My point is that health care, defense, and Social Security are
essentially 75% of the budget, and interest around 10%. Worrying
about the remaining 15% is almost pointless - ANY meaningful cut
will be a cut to at least one of the big three. Worrying about the
1.2% of the budget that goes to the State Dept, or the .4% that
goes to the Dept. of the Interior isn't addressing the
problem.
Defense is probably the only one were sustained cuts are
likely.
jtuf|6.18.09 @ 7:57PM|#
I can see the Onion article now: "Obama Holds Banquet to Honor Young Americans, Heads Out to Answer His Cell Phone Right Before the Check Arrives."
Site comments/questions:
Media Inquiries and Reprint Permissions:
(310) 367-6109
Editorial & Production Offices:
3415 S. Sepulveda Blvd.
Suite 400
Los Angeles, CA 90034
(310) 391-2245