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Meeting the Federal Deficit Challenge
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by stephen levy, University South,
on Apr 9, 2011
Last night we met the small dollar and ideologically charged challenge of passing a federal budget for the 2010-11 budget year.
Now Americans face the challenge of meeting the tougher big dollar challenges of preventing high deficits and surging interest costs over the next two decades.
Two-thirds of the federal budget is in five categoies--Social Security and defense at aorund $750 billion, Medicare at $500 billion and Medicaid at $300 billion and interest at $200 billion.
Virtually ALL of the growth in the budget and projected deficits over the next decade are in Social Security, Medicare, Medicaid and interest. As the deficits persist, for example, interest payments surge from $200 billion to $900 billion.
Who favors having higher income residents contribute to reducing the deficit through a) raising the tax base that supports Social Security as we have for Medicare, b) increasing payments by higher income residents for part B Medicare benefits--a practice already started under George Bush, c) resinstating the reductions in exemption and dedcutions recently ended for 2010-12 and d) perhaps reducing benefits under Social Security and Medicare for higher income recipients?
As a lcoal example, who favors pension reform that makes the largest benefit reductions go for future higher income retirees as opposed to across the board benefit cuts?
Both of these approaches seem reasonable to me along with many other changes that will have to be made to balance future budgets.
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Posted by Ok, I will bite.
a resident of Green Acres
on Apr 14, 2011 at 1:18 pm
To answer the question about Obama's speech....anyone who believes any of that demagoguery, I have some GREAT beach front property in Nevada to sell you.
Those who "believe" against all reason, history, facts and rational thinking that the way out is to tax more, not spend less, well...there is nothing we can do to help you.
My credit cards maxed out 2 years ago..no more rise in credit for me. My choices? Go bankrupt, or cut WAY back on what I was spending and begin paying off my debt. That meant a lot of sacrifice now, to prevent disaster later. We are very, very, very slowly paying down our credit cards. Of course, our home is under water, but we are paddling.
We made some, in retrospect, very poor choices, no doubt, based on false beliefs about what the future held. And now we are paying the price.
Our country is in the same boat. It is time to pay the price of very poor choices. We are like a family making $50,000/year, spending almost $90,000/year on borrowed money, and at our credit card limit of $350,000/year. ( to borrow from Tom McClintock.
The hilarious thing ( if it weren't so very sad that so many believe this would be the solution) is that we could simply confiscate everything everyone makes in this country above $100,000 this year...and it STILL wouldn't bring our budget into balance. And, of course, everyone would be very, very careful to not earn more than $99,999 next year. I won't go into the math, it is boring. Those of you mathematically inclined, check it out and get back to us.
This makes clear the huge myth that exists, that Obama and Dems keep promoting, that increasing taxes on anyone, let alone "the rich", would make any difference. And, of course, most rational people understand that the less "the rich" have to spend, the worse the economy gets from fewer jobs. Period. Unfortunately, we can't simply just wish jobs into production.
This means cutting our spending. Even cutting it to the level of 2008, when we were all screaming about "debt and deficit", at "only" 1/2 trillion per year ( which is partly what swept Obama and full dem control into office) would be a blessing, compared to the current 3xdeficit spending at 1.6 trillion, and 40% increase in our debt from 9 trillion ( which was already horrifyingly scary) to 14 trillion. The ironic thing is that so many of us conservatives were already completely furious at the out of control spending we saw, with Republican complicity, once the Dems took over the House and Senate in 2006...we were on the same side with the leftists who were angry in 2008.
For all the nauseating fear mongering of the worst kind in Obama's speech, about Down Syndrome and Autistic kids, elderly etc "fending for themselves", basically bringing the same old stupid fears from the same old stupid playbook, trying to play on ignorant kindness, the bottom line is we are on the Titanic heading for the iceberg of bankruptcy if we don't change fast and change drastically.
The speech completely ( and in my opinion irresponsibly) disregarded the effect of a total collapse of the entire system if we don't pare back drastically right now to assure that we have at least a bare minimum for all who need it. I prefer to have a way to guarantee a bare minimum, a roof, food, minimal health care, for the needy in the future, than a guarantee of collapse, leading to nothing for anyone. Yes, many people have family who would band together and help each other out, as we have since the beginning of time, but I worry about those without anyone at all. Yes, we have a very generous mentality in America, one which gives of time and money to help those without, but if we are all struggling, how much will anyone have left to help? Or will we just turn into a 3rd world country?
The time for greediness is done. We can no more have the "gimmes" rule the culture and our budget, wanting everything all the time. We have to cut back to only what is necessary.
We are now, in this country, at the point where only 60-70 million of the 300 million living here are producing something that we then pay taxes on to pay for ALL the government, from military to social welfare. The rest of the employed are being paid by...taxes, in government payments ( including me, where all I earn comes from Medicare payments). This can not continue. We are killing the golden-egg laying geese.
Putting all Medicares essentially on HMOs is a good start. ( Ryan's plan). I work with geriatrics..there is a tremendous amount of Medicare waste which is absent in those who chose an HMO style Medicare. Less hassle and less expense, and because the dollars are managed on a local level, much more acceptance of the reality of any given individual situation, instead of pouring dollars from a central Medicare bank down a sinking ship , often. I see no other solution for Medicare than to pare it back down to what is necessary, not what everyone wishes for.
Well, by now everyone is bored with this post, so I will stop.
Looking forward to rational thoughts.
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Posted by Perspective
a resident of Midtown
on Jun 7, 2011 at 6:01 pm
Perspective is a registered user.
I think you, ANS, need to understand the term "net"...and think about what the "net" number is so far under full Democrat rule..and even more, what it will be in another 2 years. It ain't gonna be pretty, is it?
I agree, the RINOs and Bush spent too much, and we lone conservatives were ignored or laughed at.. increased Medicare with MedD, the first big govt no-no, rolled over too easily on TARP, the second big no-no of bigger govt, didn't fight hard enough to stop the madness of Frank/Dodd's Community Reinvestment Act perversion, setting up the collapse of the financial market, didn't overturn the Clinton hyperregulations of banking that caused the absurd bundling of good and bad debt into virtually untraceable ill..ok..that said,... what will it take for us to learn that to quadruple down on all of the above errors means only to make it all even worse? ( which we have in piles and piles).
So, back to the point of my posts...
Every household now owes over $500,000...this Admin has increased YEARLY
entitlement promises by over a trillion alone..that is yearly, and not quite 1/2 of our yearly revenue. Yes, we agree, the prior admin increased spending also, which is one reason people were mad...and here we are..
Put it another way..we owe 61 Trillion dollars in unfunded promises, just to Medicare and Social Security, that is more than the entire WORLD's economy.
What plan does anyone have to preserve at least SOMETHING for anyone under 55 when THEY retire? At this rate, there will be no there, there. It will be completely broke. The only other plan, the plan the Democrats have it seems, is to pretend there is no problem in order to get reelected...knowing they will be gone when it collapses, and the NEXT group will "take the blame" as Americans with short vision are apt to do.
No plan is a plan for collapse.
I am 54, and I support Ryan's plan. I will be in the first wave of "new Medicare" recipients. I am the tail end of an extremely selfish "me" generation of baby boomers who cared not one whit about the financial future for generations behind them, nor one whit about the effect on our kids as the burden for caring for us becomes crushing. I have known, as have many of us, that there would be NO medicare or social security there by the time I was 65, and have saved and worked and invested my whole life, knowing it was a big ponzi scheme. Unfortunately I took all that savings and borrowed more for a business..then lost it.
Oh well, my problem, not the next generation's. Time to stop lying to people, time for us to fix this mess.
It is time for the "next" in line, the "post baby boomers" to suck it up, and try our best to give the next generation a fighting chance at a life.
Like I have said before, I think Ryan's plan is too generous. Changing nothing for those 55 and over is absurd. At the least, everyone should work until 70 years old for a start. That would help. And, social security needs to be liberalized to allow younger people to invest at least SOME of their social security payments instead into a private stock fund..which is theirs to use or pass on if they die.
But, at least Ryan's plan is a start. Until someone comes up with something even more fiscally sustainable, and ALSO we make being in private business and RICH legal again, building up the trust of investors and business owners again in our govt to not mess with the rules willy nilly, not simply decide to take what has been earned, so that we have a chance at building back up our economy in order to pay the taxes we all want to come in ... well..until then, I am all for Ryan's plan and anyone who will get the government the hell out of our way.
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