Debt Wrong

Obama bets that the government can save itself.


“From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America’s wealth and prosperity,” President Barack Obama declared in a speech at George Washington University yesterday. “More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.” Judging by yesterday’s speech, that’s a skepticism Obama doesn’t share. The president’s solution to the growing cost of government turns out to be more government.

The speech was the president’s most comprehensive look at the country’s mounting fiscal troubles, and it painted a stark picture of the nation’s unsustainable fiscal trajectory. America’s “rising debt will cost us jobs and damage our economy,” the president said. And that necessitates action: “Doing nothing on the deficit is just not an option. Our debt has grown so large that we could do real damage to the economy if we don’t begin a process now to get our fiscal house in order.”

Obama even paid lip service to an idea first voiced by Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff: “the greatest long-term threat to America’s national security is America’s debt.”

Too bad lip service is all we got. Obama managed a neat trick. He portrayed the nation’s mounting debt as an existential threat that somehow didn’t require any hard choices. “We don’t have to choose between a future of spiraling debt and one where we forfeit investments in our people and our country,” he said. The speech’s nods toward fiscal realism, it turns out, were just a new cover for yet another empty promise that Americans can have it all.

Earlier this year, the president declared that “we have to cut whatever spending we can do without.” It’s never been clear what that really meant. After yesterday’s address, it still isn’t. His speech wasn’t about what we can do without, but what we have to have.

If Obama’s speech is any indication, what he thinks we have to have is everythingâ€"or at least all the most expensive parts of government. Obama has recognized in the past that Medicare and Medicaid are by far the biggest drivers of the long-term federal debt. But in his speech, he singled them out for protection: “I will preserve these health care programs as a promise we make to each other in this society,” he said. “I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry.”

Instead, he’ll leave them at the mercy of unelected, unaccountable Washington bureaucrats. Rather than cap spending on Medicare through a premium support system, as Rep. Paul Ryan (R-Wis.) proposed in last week’s Republican budget proposal, Obama proposed to reduce projected Medicare costs by roughly $500 billion by expanding the power of bureaucratic central planners. 

That means he’s doubling down on one of the most politically controversial parts of the already unpopular ObamaCare. Last year’s health care overhaul called for the creation of an Independent Payment Advisory Board (IPAB) for Medicare. IPAB is a 15-member panel of health care experts appointed by the president. Starting in 2014, it is tasked with recommending Medicare spending reductions each year that the program does not meet predetermined spending targets; Congress can only override its proposals with a three-fifths vote in the Senate or a package of equally large cuts. Obama’s big proposal to squeeze savings out of Medicare is to give IPAB more power and tougher targets.

But IPAB already faces two major hurdles. The first is that it’s politically unstable. The health care industry wants to see IPAB blocked. United industry opposition is a powerful political force, and the administration knows it. That’s why the White House cut deals with every major health care player before passing ObamaCare in the first place.

The industry will have an easy time selling its message to Congress. One of the major reasons IPAB was created was that lawmakers have traditionally been loath to cut Medicare. But legislators on both sides of the aisle are deeply wary of attempts to wrest power from their hands, and bills to gut the board are already in the works

The other worry is that it just might not work. IPAB’s backers hope it will wring efficiencies out of medical providers, encouraging them to find ways to do more with less. But according to both the Congressional Budget Office (CBO) and Medicare’s own chief actuary, Richard Foster, those efficiencies may not exist. In 2009, CBO director Douglas Elmendorf told Congress that "in CBO's judgment, the probability is high that no savings would be realized…but there is also a chance that substantial savings might be realized.” At best, then, it’s a risky bet on reductions that may not be possible.

It’s also a bet that better, smarter bureaucrats can help rescue the country and its most expensive programs from fiscal disaster. Obama is right to recognize the problem posed by mounting federal debt. But too many of his proposed reforms rely on faith in government to fix its own problems. If fiscal self-rehabilitation were that easy, we wouldn’t be facing a crisis. Government got us into this mess. It's not going to get us out. 

Peter Suderman is an associate editor at Reason magazine.

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81 responses to “Debt Wrong

  1. My new budget will lower taxes, preserve entitlements, maintain the military, create a surplus, and pay down the entire national debt in 10 years.

    This imaginary budget game is fun!

    1. Plus, a unicorn under every pony!

      1. As soon as I read that, I pictured a pony impaled on a unicorn’s horn. What the hell is wrong with me?

        1. I saw a pony boning the unicorn.

          1. I just saw two giant mounds of unicorn/pony sh*t.
            Unfortunately, the unicorns and ponies are wishes, but the two huge mounds of sh*t are real.

  2. I vote for Fatty!

  3. My imaginary budget is the same as Bolger’s, only with flying cars.

    Jet packs would also be acceptable.

    1. This is America! I demand both flying cars AND jetpacks.

      1. How about flying cars that fold up into jetpacks?

        1. Now I gotta fold up my flying car? Why can’t it fold up itself?

          1. Oh, it does. You just have to push a button.

  4. Fatty, why do you hate the children?!

    My budget lowers taxes and the deficit, increases entitlement spending and provides not only “health care” but actual immortality.

    My budget also provides for increasing every American’s wealth by a factor of ten. I will authorize each person holding cash to add a zero at the end of each bill! Viola, one dollar becomes ten! Problem solved!

    1. I see your immortality, and raise you a buffed-out physique for men and a sculpted ass for wimmins.

      1. who will be the sculptor?

        1. I volunteer.

  5. “From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America’s wealth and prosperity,” President Barack Obama declared in a speech at George Washington University yesterday. “More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.”

    This is vintage Obama – ever the con man.

    He pays lips service to the philisophy he opposes to make it appear that he acknowledges and respects it’s validity. But it’s nothing more than a ruse to try and disguise his completely anti-thetical ideas as being something other than that.

    He’s always trying to spin his radical leftism as being centrist pragmatism.

    1. Krauthammer:

      “Watch what the guy does, not what he says.”

    2. With Obama, I don’t think it’s a con. He REALLY doesn’t understand finances or economics.

      1. I agree. If you look for the common thread in what he says and what he does, he seems to believe he can set up a new type of system where the rich and upper-middle class can keep their “capitalism”, while the poorest americans will be cared for under centrally rationed soviet style socialism and that he can cut the budget by raising taxes on the “capitalist class” and by cutting fraud and waste and rationing only to the neediest. He seems to be going for a more quarantined mixed economy which, he believes, would allow the rich to do their capitalism stuff while the poor can opt out of that crude but helpful game. Basically, a public option for the whole of the American economy. I predict that his will be the underlying theme of his 2012 campaign.

        Anybody see anything wrong with my theory?

        1. Aside from the fact that any rational person can see that it makes no sense, no.

          I can totally see this as a political platform within a decade.

  6. Homeopathic financing!

    1. ^^^ THIS ^^^


    1. Hey, we got those, too.

    2. Tell me
      Tell me
      Tell me
      How to be a millionaire!


      The grand plan is to make everyone a millionaire. Of course, a loaf of bread will cost several hundred dollars.

  8. There are those who claim we must choose between a future of flying cars, and one of immortality for all Americans. This is a false choice. Let me be clear: My budget embraces fiscal responsibility and implicitly provides all things to all people. Whether your interest is in hover jets, miracle cures, or free puppies, rest assured – it’s all in there.

    1. I’m in, if it includes the Brazen Bull on my spoofs

    2. Do I have to clean up after my free puppy? Can’t the government provide someone to do that for me? Puppies are… messy.

      1. Puppies are… messy tasty.

    3. This budget it too hard on our most needy and deserving. If I am elected to office, I guarantee that the weather will be 10%…no… 100% better than it is now, so that Americans can truly enjoy their immortality by using their jetpacks and hover cars whenever the mood strikes them.

      No longer will the American public be held hostage to the whims of reality!

      1. Will the rain only fall after sundown? By 8 am will the morning fog disappear?

    4. In a world of false choices, you would be rated +1 for your witty remark.
      But in this new world of no false choices, I rate you +10000000000000000000000000 and to infinity and beyond!

  9. Citizens! In all times, two political systems have been in existence, and each may be maintained by good reasons. According to one of them, Government ought to do much, but then it ought to take much. According to the other, this two-fold activity ought to be little felt. We have to choose between these two systems. But as regards the third system, which partakes of both the others, and which consists in exacting everything from Government, without giving it anything, it is chimerical, absurd, childish, contradictory, and dangerous. Those who parade it, for the sake of the pleasure of accusing all governments of weakness, and thus exposing them to your attacks, are only flattering and deceiving you, while they are deceiving themselves.

    Seems we now have that third system.

  10. As I see it, the Ryan plan is now the de-facto ceiling for budget cuts. Yet, the Ryan plan seems inadequate as a fiscal constraint mechanism, if not woefully so. Do we just accept the Ryan plan for now and hope that the next election brings in another wave of fiscal discipline hawks? If we do, then we risk that the Ryan plan will be further diluted during negotiations with Democrats and old-school GOP. Do we just shoot down the Ryan plan immediately? What happens after that? I seriously doubt the GOP is willing to replace Ryan’s vision with Ron Paul’s vision…

    1. I was thinking that Ryan’s entitlement reform plus Rand Paul’s other half trillion in cuts get us to about $1.05T in cuts. SLD, but $450B/yr until revenues come back under current tax rates is not a culture destroying event. At least we’d shift from free-fall to unpowered flight and have a little room to manuever.

    2. The political class is already frightened to touch entitlement programs. I’m sure everyone remembers how the GOP treated W’s Social Security reforms like the ugliest guy at a leper colony.

      If Ryan’s plan doesn’t get support, then how likely is it that we see anyone else willing to propose reforms to entitlements, when the most recent attempts ended in disaster?

      Ryan’s plan doesn’t address Social Security, but he has talked about the need to address it. If the Ryan plan can get enough public support, then hopefully other elected officials will stop simply paying lip service to limited government, and actually do something about it.

      1. As much as I hate to say it, SS is a can we can still afford to kick down the road. Getting the rest of the spending and Medicare under control is much more important.

        1. SS is a can we can still afford to kick down the road.

          It won’t reallly be a problem. Government will ultimately just inflate away the SS benefits.

  11. “I will preserve these health care programs as a promise we make to each other in this society.”

    So GWB was The Decider, and now we have The Promiser.

    Well, I say: go to hell. The promises I keep are the promises I make — not those which you pretend to make on my behalf — and I’ll bleed my eyeballs out to make them good. That’s called honor, and you have none. It gets you respect, and you deserve none. You’re nothing but pathetic.

  12. “Obama bets that the government can save itself.”
    Yeah, so Obama is a stupid fuck…this is news?

  13. “More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.”


    1. It’s sad…not fuuny.

    2. Does anybody even buy this cock-gobbling bullshit anymore?

      1. Yes, most! 60% believe taxes should be raised on the rich.

        1. The rich NEVER pay enough taxes.
          How do we know this? They exist.

          If they paid their fair share then they wouldn’t be rich anymore!

          1. How do we know this? They exist.

            If there were paying enough taxes, they wouldn’t be rich. Duh.

      2. Oooops misread your post.

      3. Does anybody even buy this cock-gobbling bullshit anymore?


        1. That’s actually pretty clever. Because you’re a homosexual (I think, at least, from what I’ve read of you in several articles’ comments containers), performing fellatio on men is no more abnormal than performing vaginal oral sex is for a straight man. So you found a loophole to the insult. Gotta hand it to you.

          It’s still bullshit, though.

  14. When I was a kid, we would make Christmas lists, and we would just add stuff to the list as we thought of them, or as the catalog pages turned. It never occurs to children that there is only so much money in the Christmas budget.

    The problem with liberals such as Obama is that they have a cognitive distortion (or a set of them) that causes them to see other people who disagree with them as evil, crazy, or retarded. Just like kids see someone who told them that they need to make a shorter list.

    They never get that their opponents are not people who want children to starve or the sick and homeless to up and die on the streets, rather people who simply get that we only have so much money and we can’t keep setting up budgets that are like children’s letters to Santa Claus.

    We can’t set up a program that will grow exponentially as we may not have the money tomorrow. Same with non-entitlement spending. At some point Elmo needs to make it on his own.

    1. It’s honestly that simple.

    2. The difference between the kids and the socialists is that kids act out of innocent ignorance. The socialists, on the other hand, have all the information available to them, but refuse to discover it or act upon it.

  15. The whole “let me restate my opponents’ positions and appear to agree with them before arguing for the exact opposite” is such a genius rhetorical strategy on Obama’s part, I wonder why no one on the other side has tried to copy it. Here, let me help you out: “We all hate millionaires and billionaires, and we know that massive wealth redistribution is the key to long-term success. But desperate times call for desperate measures, and that’s why I’m proposing that we immediately end Medicare and Social Security, and lower everyone’s taxes.”

  16. “Doing nothing on the deficit is just not an option.”

    Doing nothing on Libya is just not an option.
    Doing nothing on bank failure is just not an option.
    Doing nothing on housing crisis is just not an option.
    Doing nothing on Iraq is just not an option.
    Doing nothing on Afghanistan is just not an option.
    Doing nothing on drugs is just not an option.
    Doing nothing on Vietnam is just not an option.
    Doing nothing on alcohol is just not an option.

    1. ….and twirling, twirling, twirling towards freedom!

    2. The authoritarian’ dipstick’s phrase book is sold out. Care to send me a copy?

    3. “Doing nothing on drugs is just not an option.”

      “Doing nothing on alcohol is just not an option.”

      Sobriety is always an option. Whether it’s likely to be chosen is another matter…

  17. Ever since he had that speech where he pulled out his Reverend Wright impression using that revivalist tone and tempo like we were all at some big baptist convention and declared that “This was the moment when the rise of the oceans began to slow and our planet began to heal.” I’ve noticed that he doesn’t even realize how full of shit he is at all.

    It’s actually quite fascinating. This is the kind of guy that if he got some crazy idea in his head that he was impervious to electricity he would go and try and prove it by grabbing an open socket or something.

    Maybe someone needs to go tell him that he’s impervious to electricity…..just sayin’..

  18. Obama: Debt is a serious problem … that I can’t figure out how to deal with.

    1. Default on the debt and you won’t have to worry about government borrowing again for a long time.

  19. How can anyone seriously talk about improving healthcare affordability without going after the real elephant in the room, the FDA?

    1. Because they’re authoritarian asshats. The FDA is just one of an infinite list of federal departments and agencies that simply DEMAND utter and immediate annihilation.

      Let’s drink to that! *Sips Four Loco, chambering round in case ATF tries a raid in search of “assault drinks”.*

      1. They let you have four loco in your padded cell? And Internet??

  20. I liked Hugh Hewitt’s description of that speech: It’s a million straw man march. I get tired of this guy always telling us we can’t do what no one suggested we do.

  21. Obamunism is merely plagiarized 19th century industrial/agricultural class warfare ideology + debunked Keynesian spending tactics. Obama offers nothing new, just the same old big government lunacy that got us into the mess.

  22. As a Democrat, I know that is only as long as it takes to get re-elected, then he will continue taking freedom away, and enacting his political agenda.

    He now apologizes for his votes in the Senate, saying “they were political?”

    Since he was senator for only over a year before he started campaigning for president, he along with everyone else admitting their votes were purely “political,” should be fired by all of us.

    They were hired to “represent” us, not play political games with our lives, and livelihoods.

    If anything, their rhetoric shows We the People of the United States of America still have much cleaning out of corruption in Washington to do.

  23. Obama promises a chicken and pot.

  24. Just when will ALL politicians get this thru their heads ? the AMERICAN PEOPLE will never SUPPORT MORE TAX INCREASES until it is FACTUALLY PROVEN that ALL SPENDING has been TRUTHFULLY AUDITED (by an outside non-governmental, non-partisan entity) and all WASTE, FRAUD, ABUSE, REDUNDANCIES, FAILING PROGRAMS and FAVORS TO SPECIAL INTERESTS have been ELIMINATED. Of course, these SPENDING PROGRAMS need to PASS CONSTITUTIONAL MUSTER too ? only then, we can talk.
    We need to be quite thankful to the Tea Party folks. After all, without them there would have been NO GOP TAKEOVER of the HOUSE, therefore, the IDEA OF CUTTING SPENDING, DEALING WITH OUTRAGEOUS DEBT and DEFICITS wouldn’t even be on the table. OBAMA and the DEMS would just still be SPENDING this GREAT COUNTRY into OBLIVION.
    I am also heartened to read more and more right-thinking folks making their ideas and feelings known on what used to be mostly LEFTIST websites. We need to be totally UNITED in 2012 AGAINST the DEMOCRATS and OBAMA. We can argue about the possible GOP candidates running for the GOP nomination, but in the end, must SUPPORT THE GOP NOMINEE, no matter who it ends up being. THIS IS WAR, folks ? a war for the continuation and prosperity of the world’s GREATEST NATION in history.

      you are WAKING UP my NEIGHBORS.

  25. ty rights, etc. seem like a more accurate measure of freedom than democracy.

  26. This plan has no merit

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