President Obama’s Speech on Reducing the Budget this Afternoon (Full Text)

…here’s the truth. Around two-thirds of our budget is spent on Medicare, Medicaid, Social Security, and national security. Programs like unemployment insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20%. What’s left, after interest on the debt, is just 12 percent for everything else. That’s 12 percent for all of our other national priorities like education and clean energy; medical research and transportation; food safety and keeping our air and water clean.

Up until now, the cuts proposed by a lot of folks in Washington have focused almost exclusively on that 12%. But cuts to that 12% alone won’t solve the problem. So any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget. A serious plan doesn’t require us to balance our budget overnight ”“ in fact, economists think that with the economy just starting to grow again, we will need a phased-in approach ”“ but it does require tough decisions and support from leaders in both parties. And above all, it will require us to choose a vision of the America we want to see five and ten and twenty years down the road.

Read it all.

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

43 comments on “President Obama’s Speech on Reducing the Budget this Afternoon (Full Text)

  1. Kendall Harmon says:

    A huge lost opportunity, terribly lacking in specifics and overly general.

    I also don’t think he has clearly stated the problem, which is that life expectancy has soared since social security started and the % of workers working compared to retirees has sunk (and looks to continue).

    Not one realistic proposal for how to reform Medicare and Social security that is meaningful.

    Makes the heart sad.

  2. Eastern Anglican says:

    I too am disappointed, but not certain I should have expected anything more from one who believes that if he speaks, it happens. I believe in the power of words, but at times like this words must lead to action.

  3. Br. Michael says:

    Blame Bush. Some how it’s the gift that keeps on giving. Obama increases the deficit by trillions all on his own and it’s Bush’s fault. Then he proposes to undo in 12 years, after he is safely out of office and another crop of politicians are in office, what it took him two years to do.

    All this to support a government that pats down a 6 year old in an airport.

  4. Alta Californian says:

    My heart is not sad, it is hopeful. I do not see how either this or the Ryan plan will make it through the legislative process in this political environment. But the government did not shut down on Friday, which gives a glimmer of hope that, as in 90s, they will be able to hammer out something that will work.

  5. graydon says:

    Why do I have the visual of a can being kicked down the road?

  6. Br. Michael says:

    Because that’s what happened.

  7. Stefano says:

    “Makes the heart sad” seems to be a bit more neutral response than the situation may call for. Perhaps something like the phrase “Torpedo in the water” may be more commensurate with the urgency involved.

  8. Nikolaus says:

    Basically, he doesn’t believe a single word that he said – so neither do I. He ignored his own Deficit Redicution Committee recommendations in December, barely mentioned the deficit in his SOU address, presented a budget barely two months ago that had no whiff of budget control. But all of a sudden he’s got religion. Yeah, right Barry!

  9. upnorfjoel says:

    That’s twice he’s gotten religion….and it’s always around the time he’s beginning to campaign.

  10. Peter L says:

    I think it is very regrettable that this blog takes on secular politics like this. It very much undermines the serious discussions on theology that need to take place. For me (as a “liberal” I suppose) it only cements beliefs that I feebly try to enlighten.

  11. MKEnorthshore says:

    Peter L, perhaps this is what you might have in mind…

    When asked by the president, “Who do men say that I am,” the vice president replied, “Some say that you are the eschatological manifestation of messiahship, while others say that you are the son of the ground of all being.” To which the president replied, “Huh?”

  12. Sarah says:

    RE: “it only cements beliefs that I feebly try to enlighten.”

    I don’t know what that means. Which beliefs does it cement for you?

    RE: “I think it is very regrettable that this blog takes on secular politics like this.”

    Oh, my guess is that it wouldn’t bother you at all if the post existed without comments! ; > )

  13. graydon says:

    I’ve been thinking about Col. Joshua Chamberlain and the battle at Little Round Top. He was honest with his troops and asked them to be prepared to sacrifice. Exhausted, resources depleted and facing a seemingly losing position, he took to the offensive. We are also in a dire situation, albeit economically. We must undertake what might seem to be audacious actions. My sense is that many Americans are willing to so, but leadership is weak and sees this battle only in terms of the next election. We need an honest, forthright leader who will level with us, and not one who panders to voting blocks, thinking about the electoral college, and wondering how this will impact fund-raising efforts. The ballot may not reward them, but history will.

  14. Kendall Harmon says:

    # 10, I find that viewpoint strange, in that Jesus is Lord of all, unless you are saying otherwise (and I am not taking you as such).

    The budget battle/struggle has profound spiritual implications for our children and grandchildren as well as for our country.

    What I find regrettable is that the threads on such topics cannot be more substantive about the issues in view. There are (sort of) 3 things out there now, the presidents commission, Rep. Ryan’s proposal, and the President’s speech yesterday (in terms of its general thrust). These and similar ideas need to get on the table and actaully be wrestled through going forward.

  15. Br. Michael says:

    I would also hope that we cut through the smoke and mirrors and loose language so that these matters can be discussed honestly. I am tired of hearing about “tax cuts/rises on the rich/wealthy”. Let’s have a number and use it. If you mean persons earning $250K say so.

    Likewise expose the accounting tricks and avoid them. And I mean this for both/all sides. I am tired of the demagoguery on all sides. This is too serious to indulge in this sort of thing anymore.

  16. Mitchell says:

    Kendall,
    I agree with your post at #14 but disagree with your post at #1.
    In #1 you said [blockquote]”I also don’t think he has clearly stated the problem, which is that life expectancy has soared since social security started and the % of workers working compared to retirees has sunk (and looks to continue).”[/blockquote]

    I don’t think anyone needs to restate that problem, because I think everyone understands that is the problem. The reason there are no serious discussions about how to fix Social Security and Medicare has nothing to do with failure to understand the problem. The fact is one side has no desire to fix Social Security and Medicare. They want those programs to fail.

    Social Security and Medicare and to a lesser degree Medicaid have been phenomenally successful programs. They have achieved and surpassed every goal we had for them when the programs were enacted. In fact they are victims of their success.

    When Social Security was enacted 50% of Americans over the age of 65 lived in poverty. They lived hard, sad, short lives. Many were homeless or living in shacks. Since the enactment on Social Security, few seniors live in poverty and generally have fulfilling lives after retirement.

    Prior to the enactment of Medicare, 50% of retired Americans had no health insurance. In rural states, that was much higher. As a result their life expectancy was short. They relied on a patch work of government run hospitals and charity hospitals for their health care. Few if any specialists, no cancer centers, no heart centers, etc. When my grandfather developed cancer in 1965 he was treated by his hometown doctor in a county hospital, where he died. Since the enactment of Medicare and Medicaid all most all senior citizens have basic health care coverage.

    Likewise, prior to Medicare there was no significant funding for research in curing the diseases associated with aging in the US, including heart disease and cancer. There was no market for the cures because those people had no money, no health insurance, and died early.

    The result of the increased financial security and health insurance for seniors has been a dramatic improvement in their lives and health. This has in turn resulted in an dramatic increase in the life expectancy of Americans.

    I believe that unless we stop demonizing Social Security and Medicare, start recognizing them for what they have done for this country and the health and happiness of its people, and acknowledge the importance of keeping these programs we will not be able to fix them. I don’t think fixing them is beyond our ability. Common sense tells us what we need to do to fix the programs, and it will require some sacrifice from everyone. Essentially a combination of retiring later, higher Medicare premiums, and higher taxes. There are even more controversial ideas, like letting younger healthy people buy into the system, to bring down the average cost of care.

    The problem is of course today’s partisan divide in Washington. Essentially the Republicans philosophically disagree with the whole concept of Social Security and Medicare. Consequently, it does not matter whether they work or how successful they have been in obtaining their goals. In fact, when you are trying to kill a program, the more successful it is the more difficult it is to kill. Consequently the current goal of Republicans is to convince Americans these programs cannot possibly work and must be dismantled completely. Which was Ryan’s proposal for Medicare last week. You are not going to get a serious discussion on fixing these programs in that environment.

    Consequently I am not optimistic of a short term resolution. It appears to me Republicans will continue to attack the programs as unworkable, and Democrats will continue to defend the programs essential. Ultimately, the American people will either reject the Republican argument, vote them out of office; and Democrats will attempt to fix the programs; or they will accept the Republican argument, vote the Democrats out of office, and Republicans will kill the programs.

  17. Br. Michael says:

    16, all right. How much would you tax to fully fund these programs?

  18. MKEnorthshore says:

    “Common sense tells us what we need to do to fix the programs, and it will require some sacrifice from everyone. Essentially a combination of retiring later, higher Medicare premiums, and higher taxes. There are even more controversial ideas, like letting younger healthy people buy into the system, to bring down the average cost of care.”

    Common sense tells us that the problems with big government cannot be fixed by spending and taxing, but by eliminating irrelevant spending (e.g., Departments of Energy/Education, etc., etc.) and providing incentives to businesses to grow (resulting in more people paying their fair taxes). In a mere two years, the current administration boondoggled “stimulus” programs, and raised our debt by trillions. They now want to cure their self-created fiscal crisis by raising the taxes of the people who can create jobs. Ridiculous, but typical.

  19. Br. Michael says:

    Mitchell while you are working out your tax rates, here is something to reflect on:
    [blockquote]This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It’s not even yacht and Learjet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there’s a problem because there are 224 more days left in the year.

    How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits. Since leftists think profits are little less than theft and greed, Congress might confiscate these ill-gotten gains so that they can be returned to their rightful owners. Taking corporate profits would keep the government running for another 40 days, but that along with confiscating all income above $250,000 would only get us to the end of June. Congress must search elsewhere.

    According to Forbes 400, America has 400 billionaires with a combined net worth of $1.3 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August. The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress’ voracious spending appetite. They’re going to have to go after the non-rich.[/blockquote]

    http://econfaculty.gmu.edu/wew/articles/11/EatTheRich

    So how much of incomes below $250K do you intend to tax and at what rate?

  20. Sarah says:

    The mind boggles at the list of inaccuracies and revisionist history that Mitchell above has produced. One would have to address the falsehood in practically every sentence.

    Just to take one section, which typifies the use of faulty logic by implying “correlation equals causality”, of several dozen: “Prior to the enactment of Medicare, 50% of retired Americans had no health insurance. In rural states, that was much higher. As a result their life expectancy was short.”

    Uh . . . no. People’s “life expectancy” — longer by far in the US at that time then any other country — was *comparatively short* to today because we were in the midst of soaring advancements in healthcare having absolutely [i]zilch[/i] to do with “health insurance” or “Medicare.”

    Rather obviously, the first half’s astounding advances in medicine occurred prior to “health insurance” and “Medicare.” And despite the State’s attempt at central planning and control of the industry over which they have far far too much control, the free market has staggered on developing incredible advancements, despite the burden and ball and chain of the State’s practices and bureaucracy.

    Obviously, a collectivist as Mitchell has demonstrated himself to be over the years won’t agree because he operates from an utterly antithetical foundation worldview regarding individual freedom, the free market, the Constitution, and the role of the State. But such a string of unbelievably false premises, faulty syllogisms and fallacies, and revisionist history at least needs to have one small portion addressed for the rest of the readers.

  21. Alta Californian says:

    Kendall, I can’t speak for Peter L but I sympathize with what he is saying. I for one often avoid your posts about secular politics because I don’t like the assumption, made by many of your loyal readers, that to have an orthodox position on theology and ecclesiology, one must also be a conservative Republican politically. Like NT Wright I believe that some (though clearly not all) liberal policies are valid for Kingdom people to hold. And it can be distressing to face shockingly strong disagreement from our colleagues in the faith. I have always found Sarah, for example, to be one of the best voices out there when it comes to the state of Anglicanism and what each of us can do about it. On posts about theology I am in almost entire agreement with her. But here on this thread I am shocked to be confronted by her comment at #20. She treats Mitchell’s position not as a legitimate political disagreement, but as a character flaw involving deceit and tyranny. And for saying so, Sarah will probably recall our previous debates and say that my pattern is of a deceitful collectivist who hates freedom (why just yesterday I was defending Abraham Lincoln of all people). That saddens my heart more than anything the President said. But that is my problem (and Peter L’s) and not yours or even Sarah’s. The answer for us is clear, just don’t read the comments on political posts. Or take a deep breath and not let ourselves be so easily offended.

  22. Boniface says:

    21. Alta Californian .
    I agree. I too feel uncomfortable with the assumption that orthodox theological postions are connected to specific politic positions(idealogies). I’m so glad that St. Paul in his epistles did not comment on the political intrigue of Imperial Rome. Paul was Political without the political.
    Peace.

  23. Boniface says:

    I apologize for the typos.

  24. KingDavid says:

    #21-22, I also agree with what you say It’s stunning how the tone darkens as soon as we get to some political topic. And this monetary discussion is mild compared to the rhetoric I’ve seen affirming radical military solutions in the Middle East, even though some of these solutions have hurt and even dispelled Christian communities. I do not accept the idea that orthodox religion equates to all aspects of conservative Republicanism. (With the present priorities regarding abortion, I do certainly agree with Republicans. But there are other issues where I don’t think one’s religious orthodoxy requires political agreement or justifies sarcasm to those who accordingly don’t agree.)

  25. Kendall Harmon says:

    #21, I don’t share the assumption. What you are then saying is that you pass by the thread because of certain comments/commenters. The blog is much more than that, indeed mostly more than that.

    But also if those who disagree in that area simply bypass it out of exasperation then the comments get ceded by default to some of a particular view. I find this quite vexing.

  26. Sarah says:

    Hi Alta, I’m confused by your comments.

    RE: “I for one often avoid your posts about secular politics because I don’t like the assumption, made by many of your loyal readers, that to have an orthodox position on theology and ecclesiology, one must also be a conservative Republican politically.”

    Who has vocalized or even implied such an assumption? The fact that most of those who are traditional in theology and ecclesiology and who also comment on this blog are also conservative politically seems to make those who are political liberals who comment here deeply uncomfortable. Why? I have never seen anyone say — or imply — that “if you are orthodox in theology you must also be a political conservative” — much less a Republican, which I am not. So it seems to me that it is the political liberals who are making such an assumption and are also deeply vexed that most of those who comment here are *both* theologically traditional and politically conservative [to one degree or another].

    RE: “She treats Mitchell’s position not as a legitimate political disagreement, but as a character flaw involving deceit and tyranny.”

    I have to disagree here. I treat Mitchell’s position as irrational and deeply logically flawed. But it is very possible for someone to be irrational and to fill his comments with logical fallacies and revisionist history and not have any character flaws at all, much less be practicing “deceit and tyranny.”

    Further — the fact that I point out that Mitchell’s foundational political worldview is antithetical to my own, in particular “regarding individual freedom, the free market, the Constitution, and the role of the State” also has nothing to do with either of our characters. It is what it is.

    Millions of people have worldviews of one sort or another which are antithetical to mine. For instance, I am friends with pagans [their own self-description], agnostics, and many other types of people who do not share my philosophical/religious worldview. That does not make their character suspect. It simply . . . is.

    When I say that Mitchell and I do not share the same political worldview and in fact that they are mutually opposed, I merely acknowledge cold, hard reality. It is why our country is where it is, and why elections will continue to be so bitterly polarized [as they rightly should be.] Why are things so heated? Because Mitchell and those of his political worldview [naturally] support candidates which support their political worldview, and I an those of my political worldview mine.

  27. Sick & Tired of Nuance says:

    In an odd way, I find this encouraging. They are doing nothing to fix Social Security, so it remains broken and as time progresses, it will cause us to default. Poof! No more Social Security ponzi scheme. Insert Medicare in place of Social Security and the same holds true. Insert all stupid, crazy, idiotic (cow methane studies, NPR, National Endowment for the Arts, attacking Libya, etc.) government spending in place of Social Security and the end remains the same.

    Poof! They go away when we hit the wall of default…currently scheduled to occur at the end of May. You see, I have long viewed these things as oppressive and enslaving issues forced upon me by the power of a govenment that rules by the barrel of a gun rather than the consent of people like me. About half of America pays no income tax…none. Corporations like GE pay no income tax…none. Folks like me, that work hard, try to provide for our families…and oddly enough, still give the most to charities to voluntarily help our fellow man…have been carrying the weight for as long as I can remember. It’s like the man that they were trying to force to confess witchcraft in salem. They kept putting stone after stone on him…until they crushed him. We, the middle class, are like that. The nation is finally about to crush us. The odd satisfaction is that it will all come to an end. All the moochers, nanny-staters, and corporate frauds will be standing around with their hands in their pockets…just staring down at their dead financial cash cow, and wondering what to do now.

    Poof…all this injustice goes away…

    Total unfunded US liabilities: $113 Trillion
    Total US national assets: $78 Trillion
    Total current US debt: $14.2 Trillion
    Total current US GDP: $14.6 Trillion
    Total current US budget: $3.5 Trilloin
    Total current US revenue: $2 Trillion
    Total current US deficit: $1.3 Trillion

    Date the debt ceiling must be raised in order to avoid default: 16 May 2011

    Poof!

  28. Mitchell says:

    #19 I was discussing whether or not we are likely to find a solution to the Social Security or Medicare Program problems. I have no idea what tax rates need to be to pay for all our debt. As far as what tax increases we would need to save Social Security and Medicare, if that is what Americans decide to do, I suppose it depends on how long we delay retirement, and how much we increase the Medicare premium.

    I also, never said I supported increasing taxes only on the rich. Politically, I am a moderate independent. I think we should start by returning taxes to where they were under Clinton. I think that means a little more for the rich and the middle class alike, and I believe that was the only time in the last 30 years we were not increasing the deficit. I also agree we need spending cuts. The tough part is where. To bad we can’t get back the one trillion dollars we spent on the Iraq and Afganistan wars. That would solve a lot of our problems.

    #20 I don’t really know how you define a collectivist, but I suppose that makes you a segregationist. In any event, you are quite accomplished at the art of political name calling. Carl Rove is adept at that as well, it makes for a good political operative.

    None the less, I have no desire to revise history so, I checked my facts. In 1965 56% of seniors had health insurance. That means 44% had no insurance and I think that is fairly close to the 50% I said earlier. I stick by my assessment the percentage uninsured was significantly higher in rural states as the percentage of unionized factory workers was higher in large industrial states, and they were the workers far more likely to have retiree health insurance plans.

    As to life expectancy, in 1960 the life expectancy of Americans was less than the life expectancy of the citizens of almost every nation in Europe. That does not seem to jive with your assessment that life expectancy was “longer by far in the US at that time then any other country.” To be precise, we were 16th in the world.

    As to whether medical advancements in the treatment of diseases related to aging occurred more rapidly before or after Medicare, you are free to argue what you will as am I. I contend the advances occurred more rapidly after, and I do not believe you can back up your argument that health insurance and Medicare had no impact on the health of senior citizens, advancements in the treatment of age related disease, or increase in life expectancy.

    I concede I believe Social Security, Medicare and Medicaid have been good for America. I do not believe they are unconstitutional, and neither do most Republicans; unless they are lying. That said, I am fully open to any suggestion that would bring down the cost of health care. After all, I run a small business with 5 employees and the cost of their health insurance is killing me.

  29. Sarah says:

    RE: “I checked my facts.”

    I see that you do not understand the meaning of the fallacy of “correlation implies causality.” Here is a link so that you can understand it:
    http://en.wikipedia.org/wiki/Correlation_does_not_imply_causation

    RE: “I don’t really know how you define a collectivist, but I suppose that makes you a segregationist.”

    Lol.

    RE: “In any event, you are quite accomplished at the art of political name calling.”

    I’m quite accomplished at knowing the words used to describe ideas — ie “collectivism.” Probably you should look that one up too.

  30. Alta Californian says:

    Taken together, Kendall and Sarah, you make a good point. Part of what discomfits is the appearance of uniformity. Come on a thread like this and the vast majority of comments are politically conservative in nature. Sarah, maybe that does make me question myself and maybe it does make me unduly defensive. Kendall, maybe that uniformity does appear because people like me do not want to comment here, and so by default I’m contributing to that problem.

    The trouble is that political debate by blog can be a nasty business and I for one do not like to play the troll. Sarah is absolutely right that politics is getting more polarized and I would add that this creates hard feelings. Just as I wouldn’t want to get in a fiery political debate with Sarah in person at Sunday coffee hour, neither do I particularly desire to go online and make hard feelings of someone I do admire (she, in fact, still has a standing invitation to dinner if ever she’s in Northern California). I also question the usefulness, as I doubt anything I can say would change her mind. It becomes a duel that serves no purpose but to alienate a sister in Christ. But I will give it some thought, perhaps people like me can step in and offer a different perspective without getting drawn into too much rancor. For starters, Sarah, how about a substantive debate without throwing labels (appropriate or not) at people. You’re very fond of the “oh, well you’re a liberal so what do we expect” sort of snark, which serves to try to shut down debate rather than to address content. For example you could have told Mitchell you felt his argument was a correlation fallacy without labeling him a deceitful revisionist. For my part I regret saying yesterday that Southerners hate the United States, I need to live up to my own standards of proper discussion.

  31. Br. Michael says:

    Mitchell, you could tax everyone at 100% from dollar 1 and still not be able to pay for all the spending. That’s the problem. Then why don’t you define rich and middle class? We could completely stand down the military, break up all our capital ships and dismantle the military infrastructure and the $700 billion or so saved would not eliminate this years deficit. Our deficit for this year is 1.65 trillion.

    The numbers are staggering and only getting worse. It’s almost to the point that the only way out is to repudiate the debt.

  32. Sick & Tired of Nuance says:

    31. Br. Michael,

    I think we are already at that point. Poof! I don’t want to imagine what happens afterward. Today has enough trouble of its own. I will encourage all to hang on, its likely to get bumpy.

  33. Mitchell says:

    Br. Michael, I am not arguing we don’t need to cut spending. I agree we need to cut spending. As I said above, that is not the question. The question is which spending to cut. That is always the question.

    Ryan had a new proposal today. Take it from middle class by eliminating Medicare. Leave the very rich and the very poor out of it. That is one answer. I think we need a combination of spending cuts and a return to taxes at the level they were under Clinton, that is another answer.

    If things are as bleak as you and Sick and Tired say, which I don’t think most economist agree with, then why worry about it at all. We are already doomed. Lets borrow as much as we can from other countries before we default. (a joke)

    I am not in Congress nor am I President, consequently I cannot do what I would really like to do, which is force Iraq and Afghanistan to pay back the 1 trillion dollars we dumped in the desert to fund a war we were told would be paid for by those countries. Something Iraq, can easily afford to do.

  34. Br. Michael says:

    33, I ask you again, what is the rich, the very rich. Give a number, please. Right now rich seems to be defined as $250K and up. That’s not rich at all if you are a small business.

  35. Mitchell says:

    #33 why do you keep asking me for a number. There is no taxable income number that determines rich. Rich, like time, is relative. By world standards I am rich, by US standards I feel I am upper middle class. I.E. the life style I can afford is better than the life style the average American can afford, but not luxurious. I have an above average house, I have above average income, I have below average debt to income, I have above average net worth.

    Further while rich generally correlates with real income, it does not necessarily correlate with taxable income at all. It always correlates with net worth. If I had no debt and 20 million dollars, and invested all of it in tax free municipal bonds, I would still be rich, my real income would be high, but I would have no taxable income.

    For some reason you keep trying to pull me back into Obama’s promises regarding taxing the rich. I am not concerned with Obama’s definition of rich or even Obama’s plans. What does 250K have to do with anything I have said?

    For purposes of my statement regarding medicare, I will rephrase to delete the offending nouns. Ryan had a new proposal today. Take it from those whose lifestyle will be negatively affected by a loss of Medicare benefits. Leave those whose asset and income structure is such that their lifestyle will not be affected by a loss of Medicare benefits out of it.”

    Finally, what does any of this have to do with small business or large business. Businesses are not rich or poor, only the owners of businesses are rich, poor, middle class, above average, below average, significantly above average, etc. Corporations are not alive, they have no need to accumulate money for later conversion to food, clothing, shelter and luxury goods. If a business grosses 1 million a year but only nets $200,000 to its owners, the owner will be taxed on $200,000.

  36. Kendall Harmon says:

    In # 16 Mitchell wrote:

    I don’t think anyone needs to restate that problem, because I think everyone understands that is the problem. The reason there are no serious discussions about how to fix Social Security and Medicare has nothing to do with failure to understand the problem.

    Sorry, but I have to disagree very strongly with this view.

    Consider for example a recent piece by piece by David Leonhardt which I posted. It included this important section:

    Eugene Steuerle, a former Treasury official in both Democratic and Republican administrations, says simply, “We have a budget for a declining nation.”

    Mr. Steuerle — along with his Urban Institute colleague Stephanie Rennane — has done some of the most careful work comparing Medicare taxes and benefits. They added up all the taxes people at different points on the income spectrum would pay over their working lives and then translated these amounts into a single sum, expressed in today’s dollars. Mr. Steuerle and Ms. Rennane likewise added up the value of Medicare benefits (net of premiums) that men and women could expect to receive.

    Their results show that no cohort of Americans, with the possible exception of the very affluent, pays enough Medicare taxes and premiums to cover their costs. The gap is growing over time, too.

    Two married 66-year-olds with roughly average earnings over their lives will end up paying about $110,000 in dedicated Medicare taxes through the payroll tax, including the portion their employers pay. They can expect to receive about $340,000 in benefits. Two average-earning 56-year-olds will pay about $140,000 and get back about $430,000 in benefits.

    Why? By law, Medicare taxes cover mainly hospital bills, not doctors’ bills or the cost of drugs. These costs instead must be covered by the general government revenue, but there isn’t enough of that revenue. Instead, the government is running deficits — which is to say, it’s borrowing money from individuals and foreign governments and promising that future taxpayers will pay it back.

    I run into people (and, yes, some of them are leaders) who fail to understand these basic facts. Americans are living longer. Health Care costs more, especially for those who are older. There are far fewer workers per retiree than when Social Security was started. Most people are paying far less in than they are getting out.

    THIS IS A HUGE PROBLEM. How to solve it begins by understanding that it is and why it is. The center of this is massive unfunded liabilities from programs people have been afraid to touch. Period.

    When I hear those from far different perspectives tackling this head on and proposing real solutions with teeth then we will be getting somewhere. I don’t expect people to agree to solutions I would completely agree with. Politics is the art of the possible. But the possible starts by not running away from the depth of the problem, or the statement of where it actually comes from.

  37. Kendall Harmon says:

    I should further add a reminder of this piece on Politico which I posted on March 3rd:

    Americans have no idea where the federal government spends its money, a new poll suggests.

    Among likely voters surveyed late last month by the Tarrance Group, “[t]here are widespread misperceptions about the state of the federal budget,” the Republican pollsters concluded. Sixty-three percent of those surveyed said they believe the federal government spends more on defense and foreign aid than it does on Medicare and Social Security. In fiscal 2010, spending for those two social programs totaled more than $1.1 trillion, while the Pentagon’s budget was about $660 billion and the State Department’s total spending was just under $52 billion.

    A majority of those surveyed by Tarrance also have “incorrect” views on how to cut the federal deficit, with 60 percent saying the federal budget’s problems can be ameliorated by eliminating waste, fraud and abuse. The Government Accountability Office on Tuesday released a report detailing several billion dollars’ worth of “duplication” in government spending that could be cut. But even if the totals reach the tens of billions of dollars, they would still be a drop in the bucket of President Barack Obama’s proposed $3.73 trillion in spending for fiscal 2012.

    That shows beyond any doubt to me that Mitchell’s contention about uunderstanding the problem is not correct.

  38. Larry Morse says:

    No it is not hard to define the rich. A quarterback who makes 10 million dollars a year for ten year is rich. Is this hard to grasp. A wall street greedbag who’s bonus is over a million a year is rich. Is this har to grasp. One percent of the population controls something in the order of 85% of the wealth. This is called rich. Is this hard to grasp? I have been a Republican for a long time, but the present Republican gambit of making the really rich richer, is as astounding as it is dishonorable; and POTUS’s demand that we tax them is absolutely essential if we are to have anything like economic justice. But it’s all going the other way, isn’t it? Larry

  39. MKEnorthshore says:

    It is the Gospel that liberates; not a bigger tax refund.

  40. Sick & Tired of Nuance says:

    Here is a novel idea…why don’t we tax everyone at 20% AND cut spending. Right now, nearly half of US workers pay ZERO tax. They have no “skin in the game”, so they keep voting for more and more government handouts. Large corporations, like GE, have managed to pay ZERO tax and billionaires like Warren Buffet have enough tax breaks to end up paying less in taxes than their secretaries. At both ends…they force the middle class to pay for it all. But here is the thing, there isn’t enough to pay for it all, because we are spending so much more than we take in in taxes. Joseph placed all Egypt under a 20% tax scheme. From all accounts, he was a pretty smart fellow and merciful as well as kind. Rich and poor, individuals and businesses all pay into the system, so they ALL have skin in the game. And then, we can start cutting from the budget.

    It will never happen, but imagine if it did. There, I got that bit of optimism out of my system. A congress that would shut down the entire government over Planned Parenthood is incapable of compromise by May 16th. If they cannot defund Planned Parenthood, how will they ever tackle Medicare and Social Security? Answer: they won’t. Oh yes…bring the boys home! That’s about a third of the deficit…but far short of solvency. Eliminate the Bush tax cuts and pull all the troops home and we still have a crushing debt and a huge continuous deficit as far as the eye can see. So repeal the evil Bush’s perscription drug benefit…nope, sorry…still a crushing deficit and no debt reduction. We will still be funding things like NPR and the NAE and Planned Parenthood, and a million other tiny little things that are still crushing us under a mountain of debt.

    Hyperinflation to the Left of us and currency collapse and default to the Right of us. What to do? Well, whatever it is, we cannot defund Planned Parenthood or tamper with Social Security or tinker with Medicare…that is just evil and anyone that does that is Hitler and wants women to die of cancer and old people to starve to death an a gray homeless existence.

    So the band plays on…

  41. Kendall Harmon says:

    As for who is rich, to think Christianly is to think globally–our God is a global God. That means that the vast majority of Americans are in the top one percent of the top one percent of people’s wealth/income in the world. So all the comments in the Bible–especially from Jesus–about the rich–is about US.

  42. Sick & Tired of Nuance says:

    The House just passed a budget for 2012 that is supposed to cut spending by $5.8 Trillion over a 10 year period.

    “Every Democrat voted “no.”

    Democrats in a press conference after the vote made much of their unified opposition to the bill, saying that in defense of Medicare the party speaks with one voice. “The battle lines are drawn,” Rep. Kathy Castor (D-Fla.) said.

    The bill will now be considered by the Senate, where it is considered dead on arrival.”

    http://thehill.com/blogs/on-the-money/budget/156379-house-clears-ryans-2012-budget-plan-conservatives-want-more-cuts

    With an over $14 Trillion debt and with us going further into debt by over $1 Trillion each year…we cannot muster the political will to stop the insanity.

    Here is another interesting quote from the same article:

    “Republicans closed their arguments for the Ryan proposal by saying that the government is broke and that the $14 trillion government debt must be brought down in order to assure companies, families and the world that the government is taking steps to manage its finances and [b]reduce the risk of higher inflation in the future.[/b]” (Emphasis added.)

    So that tells us that the method of our economic demise has already been chosen…we will print money to pay these debts, and so we will suffer hyperinflation if we continue on this path.

  43. Sarah says:

    Hi Alta Californian — I only just returned to this thread, 10 days later, so I don’t know if you’ll get this.

    I want to let you know that I don’t get hard feelings over folks disagreeing with me politically — I hoped I had made that clear earlier. I’m just fine with people who don’t share my political foundational worldview.

    You are right when you say that you could probably not say anything that would change my mind — but remember, that’s because we don’t share the same foundational principles regarding the Constitution, individual freedom, the free market, and the role of the State. Thus, with those disparate foundational principles in play, neither I nor you could change one another’s minds about the “small things” of politics, if we do not agree about far more important, deep foundational principles. Nevertheless, your different political worldview does not alienate me — you would be amazed at how casual and laissez faire I am about those things.

    RE: “For starters, Sarah, how about a substantive debate without throwing labels (appropriate or not) at people.”

    Now see — this may represent yet another huge difference. Labels are merely word categories — shorthand for describing clusters of ideas. I’ve always adored labels because I adore words and classification systems.

    And the reason why I don’t engage in much debate about politics is precisely because people start from antithetical political foundational principles, which have been nicely labelled for us all already! If someone believes ardently in central planning, it does no good whatsoever for me to engage in “substantive debate” with such people. They don’t believe the things I believe about the role of the State, human nature, individual liberty, the Constitution and so much more. It is as hopeless to debate them as for those who value individual property rights to debate Marxists. There is too little agreement on the foundation to move further into debate.

    Most of my *real* political arguments take place with those who already share my foundational political worldview about the Constitution, individual liberty, the role of the State, and the free market. It’s with those people that I engage in substantive debate, because one can have profitable exchanges with those people, just as I am sure that you have your most profitable exchanges about politics with those who share your own political foundational principles.

    RE: “You’re very fond of the “oh, well you’re a liberal so what do we expect” sort of snark, which serves to try to shut down debate rather than to address content.”

    I agree that the appropriate labeling of clusters of ideas and political worldviews effectively demonstrates the hopelessness of debate.

    RE: “For example you could have told Mitchell you felt his argument was a correlation fallacy without labeling him a deceitful revisionist.”

    Once again — and hopefully for the last time — I *did* point out his correlation fallacy in my first comment regarding his assertions and I did not label Mitchell as a “deceitful revisionist.” Not. One. Bit. Pointing out *actions* within rhetoric is not the same thing as labeling a *person* a deceitful revisionist.

    For example, above you said that I was fond of pointing out and naming people who hold clusters of certain ideas [you call it “labeling people”]. That is an action that you believe that I take — and pointing out *actions* of people is not calling names. There is nothing wrong with your pointing out things I do nor is there anything wrong in my pointing out what Mitchell did. Of course, people may disagree with the assertions of what various people did or did not do — that’s another matter.

    Just to reiterate — I’m don’t have hard feelings nor am I alienated by folks disagreeing. I’m matter of fact about it.