The major media outlets are all a-twitter at our president’s new deficit reduction plan. Here’s the WaPo headline: “Obama’s debt-reduction plan: $3 trillion in savings, half from new tax revenue”
Note to the editors: If you take money from one person, or a group of people, and give it to another person or group of people – first having passed it through the sticky hands of the bureaucracy – that is no sense any kind of “savings”. Deficit reduction it may be (and only will be if not used in the traditional way, i.e. to bankroll ever new unfunded entitlements) but it’s certainly not savings. Saving is virtuous, and occurs when an entity economizes by not spending. In ordinary usage, taking someone’s property from them and coloring that as “savings” would land you in jail for theft.
(It’s not theft when governments do it because they have a monopoly on organized violence. This makes all the difference.)
I just thought we should be clear on that.
It is the same grasp of economics that has the media nodding in sage agreement when someone natters on about how the damage caused by Hurricane [insert name here] will boost the economic recovery because of the jobs created and materials used in rebuilding. It never seems to occur to them that perhaps that money might come from cars not purchased, clothes not bought and vacations not taken. Ditto the increase in insurance rates following Hurricane [insert name here].
GOP nominee will have a ready made campaign commercial based on the largest tax increase in modern histrory.
The idea that this will “solve” anything is ridiculous. Until the fools in Wash DC stop spending like there is an endless supply of $$$ from taxpayers, this tax increase will solve nothing.
The President keeps bleating about his “Jobs” bill and it is pure BS….it is more $$$$$ for his union buddies and a deeper hole for all of us to repay.
It is no surprise the media is wetting themselves over this….they propped up the worst President ever and clearly want voters to repeat the mistake they made in 2008.
F&€K them and the horses they rode in on.
The House would have to be insane to pass such a tax increase. The bill to do so has to originate there, and I can’t see the GOP, stupid as they are, doing it.
Word is that ‘liberals’ will be mounting a primary challenge against the worthless character currently occupying the White House.
Which of course would give them a shot at another possible 8 years of occupation, rather than having their best case be only 4 years more of the current dingbat.
Seeing as damn near anyone (and I include preschoolers and the mentally infirm in that sum) could show better performance than the clown du jour, this may be a strategy to worry on some.
Hey, you left out Larry, Moe and Curley.
Tell the jobless that they each will get $50,000 each from the government next year.
But they will have put up $25,000 first in order to attain that $50,000 goal.
Same math.
I’m still wondering how increasing taxes creates a job other than at the IRS level…..
Owebama, Obummer, whatever. Bring back Jimmy Carter….
People who think it’s a “savings” are the same people who are gullible and/or ignorant enough to think SS is a “retirement” and/or “insurance” plan.. Bob Edwards of NPR’s old morning show and a Louisville native once described Louisville’s civic-culture as “neither especially Southern, nor especially mid-western–but especially neither” The same applies to SS: It is neither (technically speaking) a retirement plan nor an insurance plan–but especially neither. Same for Obama’s shell-game: NEITHER a debt reduction plan NOR real “savings” of any kind–but especially “neither.”
Fraudulent language. I just wonder how much is self-deception whilst self-serving. I’ll take some ‘neither’ please. Still scary how much support will be shown for a merit-less ’3rd times a charm’.
I’m also sick of the Orwellian language-twisting that comes out of congresscritters’ mouths. Someone please explain how one can “pay for” budget cuts?
Ah, yes. The term “cut” really means, “reduction in spending increase”. Baseline budgetting has to go!
P.S. I love the new headers in the mix. Particularly the A-4 shots.
That A-4 has a BAD, nearly terminal case of the jaggies, I prefer the F-5 myself. …and I just noticed the EA-18G, but I don’t think the Cap’n ever strapped that one on.
you whiny bitter clingy barbarians need to stop being racist and pay your fair share.
I assume you’re being facetious, but you bring up an important point. Has anyone on the left actually defined what the wealthy’s fair share is? How much of the government should the top 20% pay for?
Until I get an answer “fair” is going to join “um”, ” uh”, ” like”, and “justice” on the list of sounds someone makes while waiting for their brain to catch up. ( it’s a long wait for some)
Don’t worry Jeff. Red is a whiny bitter clinger racist barbarian his ownself. He’s just trying to camouflage his predilections.
Mebee he confused transferal with transference?
Projection. That’s what it is.
I am getting mo’ bitter and mo’ clingy about the thieving SOBs in Washington, on both sides of the aisle, but most especially the narcicist in chief and his gang of Chicago corruptocrats.
Going Galt is looking more attractive all the time.
Don’t even get us started about the trial ballons being floated to cut military retirement pay, now being worded to include CURRENT recipients!
Any Republican in 2012!
Well I’m a whiny bitter clinger–who paid my share and more. I was fortunate in my working life and always managed to stay at around the 95th percentile in family income. Oh frabjous day, I once got it all the way up to the 96th percentile. (Making $32K a year in 1974 would do that for you). So Obama says I’m wealthy–but the 95th percentile of family income in Los Angeles never felt like wealth. There are too many limousine liberals living over on the Westside and in Hollywood who demonstrate what real wealth looks like–while writing checks to Obama.
And now I look at my underemployed daughter–20 years out from a UCLA degree, and wonder how the world is going to work out for her. It’s not a pretty picture.
But that said, there are still progressives out there fighting the good fight as they see it. Their latest triumph is on behalf of the UAW at Government Motors. Now the unemployment rate in Detroit is somewhere north of 25% You would think that GM would not have a particularly hard time finding people ready, willing and able to come fill any new job that GM creates.
Au contraire mon cher! The new GMC-UAW contract, just negotiated, provides that any new hire will be given a “signing bonus” of $5,000. Now a signing bonus may be appropriate in a tight job market–but in Detroit today–for an auto worker–it’s way the heck and gone past stupid on stilts.
My wife and I worked hard to become one of Obama’s millionaires and billionaires (i.e., $200k combined income). How come I still drive a 16 year old car, and don’t have a yacht or a plane? Yeah, we hire maids to clean every other week, and a landscaping service to mulch and prune a couple times a year.
Guess what happens when he makes me pay for his “savings.” No more maids or landscapers. OK, who got hurt? Not the millionaires and billionaires.
For the most part the ‘rich’ don’t pay taxes. It’s a cost of doing business. Just like increased energy costs. WE pay the tax. Maybe not tomorrow, but soon and for the rest of our lives – in increased prices for goods and services as well as more tax money going to the unemployed from removing employer payroll power. Taxing ‘the rich’ in the 1930′s turned a recession into the Great Depression.
Democrats are either trying to destroy the American way of life – They’ve done major damage already – Or they’re dumber than pelosi while she’s sleeping.
And what everyone else said.
And Mr Meyers – yea, a Signing bonus to attract people to easy jobs with lots of bennies in this environment. Unreal.
Well, everything oblabber and the dems have spent so far (1.5 trillion) has been all union payback money.
Not to insult anyone’s intelligence…
a million seconds is 12 days
a billion seconds is 32 years
a trillion seconds it 31,687 years.
From my soapbox I’ll say that standard issue republicans won’t do any more than delay at best. Note even the Great Ronald Reagan did not turn back a single liberal abject failure department. Though he did have a democrat congress so what he did accomplish is respected.
Tea Party.
Beer Party, I don’t care, as long as it isn’t same old.
Find out who the MFM hates and vote for that person.
“Find out who the MFM hates and vote for that person.”
Uh…that would be Sarah Palin….
True that ! I’m leaning Michele Bachmann who vows to repeal oblabbercare though at present. Long way to go.
I’m with Byron.
Navig-you hit a sore spot… I had a 14 year old Volvo with about 12 things broken on it that didn’t qualify for “cash for clunkers.” The reason it didn’t qualify is it got good gas mileage, relatively speaking. So, as a taxpayer, I got to subsidize people that drive SUV’s for them to buy new SUV’s that got worse gas mileage than my 14 year old Volvo.
My Volvo died last summer. The dealer wouldn’t even take it as a trade in. I donated it to charity and the value was stated as $500.
This type of selective insanity has to stop. Am I annoyed, you bet!
Babs, if you had put an Obama sticker on the damned thing you’d be in fat city. Car’d be gone and you’d counting your cash. That program took most of the cars with Obummer stickers off the road.
And upon further review…Dear Leader’s enlightened leadership is also proposing a user fee for General Aviation: To the tune of $100/flight! Way to kill an industry, Mr. President. You Putz.
Yah, and no one would be filing flight plans, talking to ATC and take to flying off of little grass strips in Class G airspace. That is, except for the exceptionally rich. No one in the middle class could afford to participate in GA.
There goes my idea of retirement, teaching people to fly. Oh well, I’ll have to live off the 401k. Wait, that tanked when O got elected, and hasn’t come back since. Maybe Social Security? Nope, I’m under 55 so no soup for you! I guess I’ll just work until I die. Wait, who will hire an old guy, with unemployment in double digits? Where does that leave me? I guess I can grow vegetables in the yard until the bank takes it away.
Saving does not begin when spending is stopped. Even if there is zero spending, their still can be no way to “save” without revenue. Saving can only occur when Revenue exceeds Spending, and generates a Surplus.
While not all spending is necessary, adequate revenue to cover whatever that spending amounts to, is still absolutely necessary to produce a surplus and to save.
Having said that, Saving is not always virtuous. While it may be for a family, it is not virtuous for a nation. Some debt is always necessary for a nation to prosper. It is when the deficits rise astronomically causing debt to soar, that a nation’s economy suffers.
Everything in moderation. But economies and governments without a governor to restrict their economic motors…. without government regulation in a totally free market will ricochet wildly between boom and bust, until it disintegrates.
Oh yes. Whether you need water or an improved economy: You must not your small but precious resource, but rather boldly spend it – whether it use to prime the old water pump, or revive a faltering economy.
Absolutely true. And for anyone who likes to read – http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 – Click on One Click Download to get the PDF. It states that government spending is necessary but it must be balanced and it must be directed at productivity. In obama’s case, the spending has all been union payback and paying people to sit on the couch. But I repeat myself.
Flit- So far, there is nothing from any of the Democrats that even looks like an actual halt in spending, let alone reduction in spending. (I do not count the phoney schemes claiming “x” will be cut over the next 10 years, or that we will suddenly fix gazillions of waste fraud and abuse that has escaped notice.)
We must cap actual spending (budget and appropriations- both!) at some fixed figure less than it is now, or projected in the future. Take FY 2009 at worst, or preferably FY 2001 or earlier. End the automatic increases every year.
Then prioritize and fight out what to fund with the $$$$ available, and when the money runs out, the programs stop.
Once that is in place, then we can discuss if there should be any “revenue increases” by any method other than that which naturally comes from a vibrant economy.
Merely confiscating all earned, inherited or accumulated wealth is a one time shot and the unintended consequences are unfathomable to the liberal mind. But it means drastic cuts in jobs and spending in all areas, and a shocking decline in revenue the following year(s).
As Reagan said, we do not have a taxing problem, we have a spending problem. And it has reached near terminal seiousness.
GDP is only stimulated by deficit spending. When budgets are balanced the G term is cancelled out by the -tC term. If your deficits are too large you run the risk of making the problem worse by pulling money out of the private capital market and into the government securities market. Not to mention the destruction of economic activity as marginal actors are priced out of the market by taxes. Then there is the issue of accumulated debt. At some point it must be dealt with. Either by government surpluses which depress the economy for the same reason deficits stimulate it, by inflation which is essentially a hidden tax on everyone, or by default. TANSTAAFL.
To coin a phrase, a liberal is someone who has read Keynes, a conservative is someone who understands Keynes.
A conservative is someone that read Keynes, understands, and realizes it won’t work. Even Keynes confessed after WW2 that he was wrong.
As usual, well said
Jerry Pournelle at Chaos Manor had a great suggestion – the 1% cut, across the board, every year. Fat chance of it actually happening, though.
My old Saturn won’t qualify for a cash (payola) for clunkers, either, as it still gets 34-36mpg highway. 210K miles and about four-five recurring things wrong with her that’ll wait until she stops moving. GM really screwed the pooch getting rid of Saturn.
Phalanx my friend… Why on earth would you want to turn your Saturn into junk when it still runs and gets 34 mpg on the highway? Sell it to a used car dealer, my friend.
I have a precious to me 1991 Volvo station wagon which I bought new, and which still runs grandly to the grocery store, the doctor’s office and various friends’ homes. The ‘cash for clunkers’ program was a typical academics’ clever idea, poorly researched and destructive of wealth. The automobile market has long had a good solution to used cars which can be defined as a diminishing asset. When you trade in the old car for a new one, the dealer bundles these vehicles into a trade to a used car dealer. The ones that are cream puffs like mine sell quite easily and continue to run. The others, less well cared for, the dealer sells to the guys who run car auctions. The auction organizations sell these cars off to folks without much money but with enough ingenuity to keep them operating. Thus the car is passed down through owners until it is all used up, so to speak.
That’s the proper ‘free enterprise’ way to handle a diminishing value asset. It about broke my heart when I saw what the cash for clunkers folks did to those perfectly good cars that could still be used as transportation, totally destroying their usefulness in the economy by destroying their engines so they could never be driven again. What a dumb thing to do, and wasteful too. Typical, I’m afraid, of those impractical spendthrifts in the White House.
Marianne
Flit you got me with this qoute:
“Some debt is always necessary for a nation to prosper”
I assume–from the context–that you mean some government debt is necessary for a nation to prosper.
I’ve got an undergraduate degree in economics, 40 years or so as a transactional lawyer, am widely read in political econmy (an avocation–not part of my profession) and have been to three goat ropings and a rodeo or two. And for the life of me I can’t recall any credible economist saying that some government debt is ALWAYS necessary for a nation to prosper,
But you may have found somebody who makes a credible argument for that proposition, and if so, could you let me know who it is? It’s never too late to be exposed to new arguments.
Debt–and government debt–does happen, but there are some 20 plus states here in the USA who have balanced budget reguirements, and they seem to be doing okayk.
Not so much do I care about your resumé, albeit noted and appreciated. I do care about your questioning, which is relevant in incisive, and establishes bona fides.
But It’s late. I’ll be brief, and rambling. Will have to follow up later.
More correctly stated than I did previously, some debt is preferable (although not necessary) to no debt, for a nation to prosper. But a no-debt nation will fall behind a mildly debtor nation economically… all else being equal.
The business that sells no bonds (debt) will fall behind the business that sells bonds to expand economically, within reason. Nations that allow a certain amount of debt (as long as that debt is used productively, and not siphoned off by fraud waste and abuse) will have a higher GDP than the debt free nation.
However there is the law of diminishing returns, being on the backside of the power curve, and foolishly believing more is less. The fact remains, a little is a lot and good; even if more is bad.
I forget the recommend amount of national debt for any advanced country to prosper. I will look for it. And remember, deficit spending and national debt are entirely different animals. But you know that.
Cites, please?
Bonds can be useful for one-time or short-term increases in expenditure, such as building a new power plant, or financing a war (bonds). Creating debt just for the sake of it is not economically intelligent.
On the other hand, what you are discussing is very different from running annual deficits, ensuring a monstrously-growing national debt. Since the Democrats took over Congress in ’08, deficits have skyrocketed. The national debt is the “debt” to which WaPo refers, and has little or nothing to do with your post.
Casey – “Cites, please?”
No, not this time. I could but I’ve played this fallacious game of yours before.
I cite a reference. You and others attack the referred source, rather than discuss honestly, the issue at hand.
Perhaps I should ask you to cite your references for your specious statements, and twisting of my words. But you cannot, so I will help you:
Bonds are not only short-term. Ever hear of a 30-year bond?
Debt is never done “just for the sake of it.” It is always done with purpose in mind.
Nothing I stated would ensure “a monstrously-growing national debt.” Quite the opposite.
My source is economic theory, study and training, not WaPo as you rudely imply.
It is accepted among virtually all economists that some government debt, sometimes, is a good thing. Whenever you hear someone say, “The government should be run like a company: Your revenues have to exceed the amount you spend,” you should stop listening, because that’s not how companies are run. On the other hand, government makes no distinction between expenditures that are productive investments bound to grow the tax base — roads, bridges, schools, school loans, basic research, etc. — and expenditures like entitlement programs.
Next week lets talk about Ricardian Equivalence Tell me why it is a valid theory, or not.
(Or maybe should pound-sanders make minimum wage?)
Um, Flit? We “attack the referred source” because most of the time your links are complete BS. Sorry if you get upset when we point out that elemental fact, but you need to provide better citations. One of my favorites was when you cited a freakin’ google link to the search phrase “bush tax cuts debunked.” Said search didn’t support said position, but merely cited the number of times the phrase “bush tax cuts debunked” had occurred on the web. As I recall, I pointed out that the phrase “Obama is a muslim” provided nearly twice as many hits, hence proving that Obama is a Muslim, but you never responded. I wonder why. {/sarc}
Virtually all of your cites are fatuous (as above) or link to pure opinion pieces (as opposed to genuine research/reporting), or indirectly link to said poorly-researched materiel. It’s not our fault you post lame cites, so don’t whinge when we call you out.
I would also like you to cite {snerk} your claim that my statements are “specious,” or how I have “twisted” your words. Looks like you’re falling back on the basic Obama strategy: when in doubt, call the other guy a liar. {/snerk}
As for bonds, 30 years can be considered short term, especially considering the near-permanent national debt staring us in the face today. As for “twisting words,” I never used, implied, nor linked to any phrase referring to “for the sake of it.” As for references to WaPo, I never rudely (or in any other way) imply anything. I just pointed out that the WaPo article referred to national debt, while your original post did not. This is “rude?”
See, Flit, when you lay down BS claims like that, that’s the time you have to back up your BS with (I dunno) …facts; something remarkably absent your recent posts on economics here. Even then -as I pointed out in my first reply, which you deliberately ignored in your reply- there’s a huge difference between “government debt” and “national debt,” and the latter is what causing all the fuss. Which you ignore. Again.
You seem to have this tremendous inability to grasp the basic fact that going into long-term debt -AKA national debt- is (generally) not a good idea, absent specific goals which I cited in my original reply, and that there’s a very big difference between issuing relatively short-term debt (that’s called “nuance,” in case you didn’t know) intended to fund a specifc project.
But, hey, keep ducking the real questions, spewing innuendo, and ignoring real-world economics all you want. The only person you’re fooling on this blog is yourself.
Arrgh. just went back to my original reply, and saw “for the sake of it.” Feh. Brain fart. Time to got to bed.
Still, my claim “Creating debt just for the sake of it is not economically intelligent” is still relevant, to the extent that you defend national debt, and insist upon conflating specific debt (e.g. incurring a specific debt for a specific project, such as a power plant. new stadium, or freeway) with the overall national debt.
You still haven’t differentiated between incurring a specific debt for a specific need, and overall national debt. Can’t wait for that one.
The only reason for debt, is to acquire something you cannot pay for out of pocket. Say a house. The average person cannot afford a house at the outset. If you wish to own one, makes more sense to borrow and pay down the debt (hey, roof over the head here!) than try save for one, while paying rent to someone else. The problem is making sure you stay within your means. We elect a lot of folks that have a problem with that last part.
Flit:
It’s all BS unless you can quantify the scale, and the rate, and the trend, and the practical working tolerances. To test the validity of the theory, test it with research into how similar systems work over time and under stress.
Otherwise it’s just a substitute for a religion which revolves around faith, unquestioning belief, and trust in a single prophet.
Flit,
Think of the economy as a five gallon bucket full of water. The government takes two gallons out, let’s call this taxes. Then they put one and a half gallons back in, call this stimulus. Where does that leave us?
Its working over here. In these times of high unemployment there were 2000 new jobs announced yesterday. The Inland Revenue want more tax inspectors – Yippee, we’re saved.
Are you sure that Obama is not PM? That sure sounds like the Tax guys Obama wants to hire.
Jim Collins—the answer to your question is, “about two quarts short”.
As Obama said, it’s not class warfare, it’s math.
Wanna guess where that two quarts went?
Expecting this bunch in Washington to understand economics is sort of like expecting the American Federation of Astrologers to understand how stars are created.
Remember that budget surplus we had during President Clinton’s administration? Remember all the budget bills recently that claim they’ll reduce the deficit by X amount over the next 10 years or the next 20 years? There was no surplus, and there is no deficit reduction, unless a set of assumptions used in those predictions come true. The assumption that the dot-com bubble would never implode, or GDP would increase at 8% continually, or the assumption that raising taxes would not change the amount of money subject to that tax.
By that measure my house is paid for, since I’m not planning on missing any mortgage payments. The mortgage holder isn’t impressed.
Did you hear about the assumption that housing prices always rise?
Why on earth we continue to believe the words coming out of their mouths is quite beyond me.
– Max