Obama to Create Panel to Study Deficit

• believer

  

  ^^^I agree.
  
  I think the answer to SS is privatization (or some sort of option to do so) and a gradual, incremental phase out over time
• Cleveland Buck

  

  If this panel was going to give them the leverage they need to slash spending then I would be all for it. Unfortunately, we know what they are going to use this panel for. They are going to use it to come up with fantasy projections and imaginary numbers to show that their massive new entitlements will not add to the deficit. They figure that this will be good enough to alleviate fears about the exploding size of the federal government among the voters.
• gut

  Cleveland Buck wrote: If this panel was going to give them the leverage they need to slash spending then I would be all for it. Unfortunately, we know what they are going to use this panel for. They are going to use it to come up with fantasy projections and imaginary numbers to show that their massive new entitlements will not add to the deficit. They figure that this will be good enough to alleviate fears about the exploding size of the federal government among the voters.

  Yep. They are going to show a projection for a balanced budget leading to surplus AFTER Obama leaves office. And they will blame the mess they inherited from Bush as the reason for not doing it sooner.
  
  We need to get rid of 90% of the clowns in Washington.
• IggyPride00

  

  I like the idea of privatization of SS. The real reason the govt doesn't want to do this is because that program has partly served as the banker buying it's treasuries to fund the deficit.
  
  If you privatized SS, this would be a boom for capital markets because much of that money would find its way into various investments. Of course, that type of risk runs counter to the idea of a "secure" social program. That sort of stimulus would ultimately be good for the economy, which could help offset some of the hits to entitlement programs. Balance the budget and you don't have major need to hit up the social security surplus for govt loans.

  I am a big free market guy and all, but just like I don't think banks should be able to gamble with FDIC insured bank deposits (I.E proprietary trading), I think that everyone should have to have a retirement benefit like Social Security that is completely risk free and not subject to the whims of the market.
  
  There are alot of people I am sure that could do more with the money invested right than S.S will return, but we need to protect those who couldn't by not even giving them the opportunity.
  
  I believe in personal responsibility, but I am also in tune with the reality that we can't have people lying in the streets because they have absolutely no retirement benefit of any kind because what would have been their S.S was piddled away with bad investments. The "tough luck" idea is just not realistic.
  
  Besides, can anyone imagine the chaos that would have happened last year if S.S had been subject to the market correction we experienced? People at the very least always have piece of mind that they know for the most part what their benefit will be and it should always be there with the current system.
  
  The government has certainly mismanaged the trust fund and used it as a slush fund, but at its core S.S has worked well the past 75 years in that it has been stable and offered people a safe nest egg they are forced to save for a later day. Without it, there would be alot more people than there already are that would be burdens on society because they were destitute, so in that respect S.S is an example of government doing good. Now if they had only put a lock box around the trust fund instead of putting IOU's in it.
• majorspark

  

  IggyPride00 wrote:To anyone poo-pooing this, this is exactly the framework Reagan used in the 80's when he used the Greenspan Commission panel to develop a plan to save social security because Congressional members would never take the heat for cutting benefits or raising taxes on their own. In the framework of acting on the panel's recommendations though they actually got something done.

  These panels may create "cover" for weak leadership, but they will never produce solid lasting solutions. They are not void of politics and as the weak politicians that created them, they will produce weak solutions. As is well known today true sustainablility of social security was not attained. What is needed is strong leadership by leaders confident in their solutions with the ability to communicate them to the people.
  

  IggyPride00 wrote: Everyone can agree we need to make major budget cuts. This is the only way to do it because it would eliminate the ability for either side to demagogue and use cutting entitlement benefits as a political weapon.

  Here is a very simple solution to avoid political demagaugery:
  
  Federal budget expenditures must be X% less than expected tax revenues. That same X% is applied directly to the principal of our national debt. Interest payments on the debt are a part of the federal budget and are not subject to cuts. One budget addition would be an annual contribution to an emergecy fund that could only be accessed under very limited means. The cuts needed to achieve X% would be divided equally as a percentage of expenditure across all federal budget items, from defense to medicare/social security. Everyones pet budget items shares equally. Basically the federal government operates finacially as its average citizen.
  
  All existing federal taxes are increased by .5X% across the board equally. Although I disagree personally with the federal tax code at this point, the solution I am proposing here is to avoid political demagaugery. Thus I play with percentages applied equally to existing federal policy.
  

  IggyPride00 wrote: That is why it is vital to ultimatley get an independent 3rd party to basically make the hard decisions for them. Reagan realized we needed to reform Social Security, but with a split Congress they would never have the political will to do it. So by taking the process out of their hands, it took heat off the members who ultimately voted to implement the final recommendations which weren't terribly politically popular.

  Is a third party is necessary to bring about fiscal responsibilty? No. Am I against a 3rd party? No. I will ride whatever vehicle gets us to the finish line. Revolutionary change through strong leadership is what is needed. Party structure is not vital to that. In that I mean a 3rd party can be just as shitty as the two we have now.
  
  I have stressed strong leadership is what is needed. Leadership that is able to communicate to Americans that we must all sacrifice so future generations can be assured the financial security we have enjoyed. Just as strong leadership has convinced us to sacrifice our most precious treasure throughout our history (the blood of hundreds of thousands) in the name of the security of future generations, it is needed today to bring Americans to the realization that financial sacrifice is also necessary.
  
  ***I add this note as to my personal beliefs concerning the intent of the founders in the constitution. I do not believe they allowed centralized control of social policy in Washington. I hold federal power to those enumerated in the constitution. All remanining power defaults to the people and the states under the 10th amendment. My arguement is in the context of todays reality in light of the federal governments violation of constitutional principles.
• Footwedge

  believer wrote:

  IggyPride00 wrote:The key is that at some point someone needs to put that proposal on the table and have it properly explained. A blue ribbon panel of Republicans/Democrats that were seen as a credible entity by the public would at least make it politically viable for our politicians to make the sure to be tough choices that will get the budget under control.

  Can't disagree but even if this happens or if a viable third party comes along and takes ownership of the draconian measures that would be necessary to right the ship, there are certain "entitlement" programs that will be hard to touch.
  
  For example, as a conservative I believe these things need to happen, but when I retire Social Security better damned well be there. I've been paying into the system for 38 years and counting. The way I see it, I AM entitled to it...it's my friggin money. I have a hunch there are millions of other people out there who would agree with me.
  
  I didn't create Social Security nor do I necessarily agree with it, but I also - by law - didn't have any CHOICE but to participate. Drastic reductions in Social Security and Medicare for those of us who've been forced to pay into the system for decades would - shall we say - not be a pretty thing in many, many ways.

  Spot on Believer. What's a real shame...all of the "premiums" that you paid were spent on other things. The whole thing blows.
• Footwedge

  I have no idea, I was less than 5 during the 80s. You can't seriously believe that Obama and the Democrats are going to cut the SS/Medicare/Medicaid budget or the Defense budget. That is what needs to be cut, it's not going to happen though.

  In my lifetime, neither party has significantly reduced the military spending (Clinton--non wartime the exception), and none of the social safety nets have been cut either. (Again, the only exception was Clinton and the Congress reforming welfare mid-90's).
  
  Our problems regarding balancing a budget are now much more difficult due to the failing overall economy...i.e. less tax receipts.
  
  Bush left office with horrible ratings. Obama will do the same. Neither one had/have cutting anything in mind, and both are/were in office during a terrible economic time.
• believer

  

  Footwedge wrote:Spot on Believer. What's a real shame...all of the "premiums" that you paid were spent on other things. The whole thing blows.

  The fact that they spent my SS "Premiums" on other things is fine....as long as when I file my first benefit claim they'd better start coughing up a monthly check!
  
  You're right it does blow and am glad you and I actually agree on something!
• chs71

  Spend less. Problem solved.
• Footwedge

  believer wrote:

  Footwedge wrote:Spot on Believer. What's a real shame...all of the "premiums" that you paid were spent on other things. The whole thing blows.

  The fact that they spent my SS "Premiums" on other things is fine....as long as when I file my first benefit claim they'd better start coughing up a monthly check!
  
  You're right it does blow and am glad you and I actually agree on something!

  We don't disagree on everything...it just appears that way. For example, you and I are both Christians, we are both pro life, and we both share the thinking that reducing the government size is a good thing. We also believe that a tight family is a good foundation for the success of our children. We believe in promoting good values to our kids.
  
  After that...we would be on opposite sides of the high school debate teams..
• believer

  

  Footwedge wrote:We don't disagree on everything...it just appears that way. For example, you and I are both Christians, we are both pro life, and we both share the thinking that reducing the government size is a good thing. We also believe that a tight family is a good foundation for the success of our children. We believe in promoting good values to our kids.
  
  After that...we would be on opposite sides of the high school debate teams..

  Fair enough!
• bman618

  I think foot and believer should kiss now!
  
  This country is basically bankrupt and there are no perfect solutions. I think we have to reduce both military and welfare spending and try to curtail these welfare programs just to the needy. It's a shame some people are going to lose benefits they paid into but they are also partly to blame for it as they've voted for these bozos who spend all their payments into socialist security for general expenditures.
• gut

  Footwedge wrote: Unfortunately, the resolution to the SS crisis was to increase payroll taxes.
  
  My guess is that the comittee will come to the same conclusion. At this juncture, raising taxes is just as unfeasable as letting the runaway debt continue.

  I have to believe they will come to the same conclusion again. Another 1% from you and your company (which is "invisible" to many people) would represent @ 15% increase in SS taxes. It's going to be the only solution (well, I suppose something like a federal sales tax would do the same thing) because it will be political suicide for anyone to cut benefits.
• tk421

  

  Well, guess you can kiss the committee goodbye. Figured it wouldn't go anywhere.
  
  http://www.msnbc.msn.com/id/35077901/ns/politics
• CenterBHSFan

  

  You beat me to it, tk. I was just going to put up something similar.
  

  The budget deficits facing Obama and Congress are large and intractable, and the CBO prediction for 2010 is roughly equal to last year's record $1.4 trillion ocean of red ink. That means the government is borrowing to cover 40 percent of the cost of its programs.
  
  The report predicts a sluggish economic recovery and continued high unemployment — which presages big political problems for President Barack Obama and his Democratic allies heading into the midterm elections.

  We're soooooo screwed!!!
• derek bomar

  

  Next election, I'd vote for Hitler if he promised to reduce the deficit and I could actually see it happening
• IggyPride00

  

  The big problem is that Congress has gerrymandered districts so bad they have become literal safe zones for Republicans or Democrats.
  
  What has happened then is Congress has to push further and further to the fringe to keep their base happy, or be threatened with a primary challenge they will lose.
  
  Grover Norquist (Americans for tax reform) came out and threatened any Republican that votes for the panel commission idea with a primary challenge this year because they will have been complicit in a bill that could potentially one day lead to tax increases.
  
  On the Democrat side you have the same type of groups on the Democrat side that are backed by the Moveon.org's of the world that threaten any Democrat complicit in cutting entitlement programs will be thrown out on their butts for doing the same thing.
  
  Given that we have these 2 intractable sides, how in the world can we ever expect to see these problems addressed when you have groups like these telling congressional members they will be thrown out on their ass for doing what is right for the American people.
  
  We are 12 trillion dollars in debt, it is completely unrealistic for anyone to think that solving the problem is not going to take a combination of both spending cuts and tax increases. The problem is just too big to grow our way out of, or tax our way out of without cutting back on spending.
• IggyPride00

  

  The special deficit panel would have attempted to produce a plan combining tax cuts and spending curbs that would have been voted on after the midterm elections. The measure went down because anti-tax Republicans joined with Democrats who were wary of being railroaded into cutting Social Security and Medicare.

  "Yet another indication that Congress is more concerned with the next election than the next generation," said Sen. Judd Gregg, R-N.H., a sponsor of the plan.

  The Congress could use more Judd Gregg's and Kent Konrads. How only 53 out of 100 senators had the common sense to realize it was time to begin thinking about how we were ever going to get the budget deficit under control is beyond me.
• Footwedge

  IggyPride00 wrote: The big problem is that Congress has gerrymandered districts so bad they have become literal safe zones for Republicans or Democrats.
  
  What has happened then is Congress has to push further and further to the fringe to keep their base happy, or be threatened with a primary challenge they will lose.
  
  Grover Norquist (Americans for tax reform) came out and threatened any Republican that votes for the panel commission idea with a primary challenge this year because they will have been complicit in a bill that could potentially one day lead to tax increases.
  
  On the Democrat side you have the same type of groups on the Democrat side that are backed by the Moveon.org's of the world that threaten any Democrat complicit in cutting entitlement programs will be thrown out on their butts for doing the same thing.
  
  Given that we have these 2 intractable sides, how in the world can we ever expect to see these problems addressed when you have groups like these telling congressional members they will be thrown out on their ass for doing what is right for the American people.
  
  We are 12 trillion dollars in debt, it is completely unrealistic for anyone to think that solving the problem is not going to take a combination of both spending cuts and tax increases. The problem is just too big to grow our way out of, or tax our way out of without cutting back on spending.

  The laws of mathematics say that the debt cannot be dealt with with traditional ideas. There was hope back in the late 70's early 80's. But the politicians didn't want to hear it then...and they don't want to hear it now. Some form of repudiation is the only logical solution.
  
  A couple that has 25K in assets and 125K in liabilities...and both have lost their jobs...you cannot solve the dilemma by "cost cutting". Bankruptcy is the only logical solution.
• Footwedge

  IggyPride00 wrote:
  We are 12 trillion dollars in debt, it is completely unrealistic for anyone to think that solving the problem is not going to take a combination of both spending cuts and tax increases. The problem is just too big to grow our way out of, or tax our way out of without cutting back on spending.

  Don't forget the unfunded liabilities....appx. 55 trillion with a t. gain....the laws of compounding interests and other mathematical rules make reolving the issues unattainable.
  
  As long as you have band aids at the ready (printing press of c-notes), nothing will change. The system will just fundamentality implode.
  
  If those that eally run things wanted it a different way...then it would have been dealt with in a different fashion.
• BoatShoes

  Some ideas I've heard people suggest...Not my own ideas so don't shoot the messenger. I don't know if any of them would work so the more insightful posters than myself can correct me.
  
  1. Hike rates back up to JFK levels of 70% or so. During that time the rates were high but there was still very strong economic growth like we haven't seen yet. We also didn't trade as freely and didn't have to worry about people jumping ship to avoid taxation as much.
  
  2. Hike Capital Gains rates up. There a lot of reasons I hear tax people give to raise capital gains rates, one of which being to avoid arbitrage and games playing as they're so much lower than the marginal rates for ordinary income. Also, the effective rates of the richest americans are lower than many middle class americans after payroll taxes, etc. The Capital Gains rates were higher in the 60's and we still acheived strong economic growth.
  
  3. A consumption tax in the form of a High Tariff. This would be a protectionist economic policy and also be a form of consumption taxation that would favor American made products and people who bought foreign made products would have to pay the additional cost.
  
  4. Removing the military from it's bases around the world. Even strong defense conservatives seem to know that defense spending has to be cut and this could be one way. Some argue that there really is no good reason to still have soldiers and marines stationed in places like Germany and Japan and that our Navy could establish a sufficient global military presence.
  
  5. Make a law making it illegal to borrow against the Social Security Trust Fund.
  
  6. Contract the Active Duty Army and focus more on a Ready Reserve Force to be activated when necessary.
  
  7. Repudiate intra-governmental debt as opposed to debt owned by foreign countries.
  
  7. Inject the Human Immunodeficiency Virus into Home Country Buffet so that all of the Old Baby Boomers will die and therefore reduce the burden on Medicare and Social Security.
• tk421

  

  I vote #7. Better yet, mandatory death age of 70. Save our country, take your life.
• Footwedge

  BoatShoes wrote: Some ideas I've heard people suggest...Not my own ideas so don't shoot the messenger. I don't know if any of them would work so the more insightful posters than myself can correct me.
  
  1. Hike rates back up to JFK levels of 70% or so. During that time the rates were high but there was still very strong economic growth like we haven't seen yet. We also didn't trade as freely and didn't have to worry about people jumping ship to avoid taxation as much.
  
  2. Hike Capital Gains rates up. There a lot of reasons I hear tax people give to raise capital gains rates, one of which being to avoid arbitrage and games playing as they're so much lower than the marginal rates for ordinary income. Also, the effective rates of the richest americans are lower than many middle class americans after payroll taxes, etc. The Capital Gains rates were higher in the 60's and we still acheived strong economic growth.
  
  3. A consumption tax in the form of a High Tariff. This would be a protectionist economic policy and also be a form of consumption taxation that would favor American made products and people who bought foreign made products would have to pay the additional cost.
  
  4. Removing the military from it's bases around the world. Even strong defense conservatives seem to know that defense spending has to be cut and this could be one way. Some argue that there really is no good reason to still have soldiers and marines stationed in places like Germany and Japan and that our Navy could establish a sufficient global military presence.
  
  5. Make a law making it illegal to borrow against the Social Security Trust Fund.
  
  6. Contract the Active Duty Army and focus more on a Ready Reserve Force to be activated when necessary.
  
  7. Repudiate intra-governmental debt as opposed to debt owned by foreign countries.
  
  7. Inject the Human Immunodeficiency Virus into Home Country Buffet so that all of the Old Baby Boomers will die and therefore reduce the burden on Medicare and Social Security.

  I agree with all of these including number 7. Execute the baby boomers for the collective grand larceny.
• Cleveland Buck

  

  BoatShoes wrote: Some ideas I've heard people suggest...Not my own ideas so don't shoot the messenger. I don't know if any of them would work so the more insightful posters than myself can correct me.
  
  1. Hike rates back up to JFK levels of 70% or so. During that time the rates were high but there was still very strong economic growth like we haven't seen yet. We also didn't trade as freely and didn't have to worry about people jumping ship to avoid taxation as much.
  
  2. Hike Capital Gains rates up. There a lot of reasons I hear tax people give to raise capital gains rates, one of which being to avoid arbitrage and games playing as they're so much lower than the marginal rates for ordinary income. Also, the effective rates of the richest americans are lower than many middle class americans after payroll taxes, etc. The Capital Gains rates were higher in the 60's and we still acheived strong economic growth.
  
  3. A consumption tax in the form of a High Tariff. This would be a protectionist economic policy and also be a form of consumption taxation that would favor American made products and people who bought foreign made products would have to pay the additional cost.
  
  4. Removing the military from it's bases around the world. Even strong defense conservatives seem to know that defense spending has to be cut and this could be one way. Some argue that there really is no good reason to still have soldiers and marines stationed in places like Germany and Japan and that our Navy could establish a sufficient global military presence.
  
  5. Make a law making it illegal to borrow against the Social Security Trust Fund.
  
  6. Contract the Active Duty Army and focus more on a Ready Reserve Force to be activated when necessary.
  
  7. Repudiate intra-governmental debt as opposed to debt owned by foreign countries.
  
  7. Inject the Human Immunodeficiency Virus into Home Country Buffet so that all of the Old Baby Boomers will die and therefore reduce the burden on Medicare and Social Security.

  The first three would be completely disasterous (except for the idea of a consumption tax, but obviously not in a tariff). The rest are fine.
  
  First of all, what is the point of raising taxes if you aren't going to collect more revenue anyway? Second of all, can someone please tell me how punitive tax rates contribute to economic growth? (Saying it worked in the 1950s doesn't prove anything.)
• BoatShoes

  Cleveland Buck wrote:
  The first three would be completely disasterous (except for the idea of a consumption tax, but obviously not in a tariff). The rest are fine.
  
  First of all, what is the point of raising taxes if you aren't going to collect more revenue anyway? Second of all, can someone please tell me how punitive tax rates contribute to economic growth? (Saying it worked in the 1950s doesn't prove anything.)

  Well, we also have to keep in mind that most tax reforms have aimed at being revenue neutral. In order to pay off our debt, we're going to have increase tax revenue. Higher rates in the past had more available deductions and made the effective rates over the years relatively the same; HenceThe overall tax receipts have remained generally the same but we've seen that increases in the payroll taxes can result in more receipts from the payroll taxes...Thus, we might conclude that raising tax rates and limiting available deductions could increase tax revenue. also, we have a 14 trillion gross national income, we have the income to pay off of our debt if we really wanted to.
  
  Also, many economists might argue why they're not "punitive tax rates" as they're an attempt to make all taxpayer's feel the same loss of utility across the income spectrum.