Friday, February 24, 2012

The Candidates offer up a budget fantasyland

“If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?”
- Alice, from Lewis Carroll’s Alice's Adventures in Wonderland & Through the Looking-Glass, 1865

Alice could have been talking about the budget fantasyland conjured up by the 2012 presidential candidates.

Recall that in his Republican response to President Obama’s State of the Union address, Governor Mitch Daniels (R-IN) promised that if the GOP prevails in the election, 2012 will be “the year we strike out boldly not merely to avert national bankruptcy but to say to a new generation that America is still the world's premier land of opportunity.”

So you might assume then that the Republican presidential candidates have plans to reduce the debt, right?

You might, but you would be wrong.

“The national debt would balloon under tax policies championed by three of the four major Republican candidates for president,” according to an independent study by the bipartisan Committee for a Responsible Federal Budget (CRFB), reported in yesterday’s Washington Post. Former Pennsylvania Senator Santorum would add $4.5 trillion and former House speaker Newt Gingrich would add $7 trillion to the debt by 2021, “pushing the portion of the debt held by outside investors to well over 100 percent of the overall economy,” writes the Post.  Former Massachusetts Governor Mitt Romney's plan would add about $2.6 trillion.

The only Republican with a plan to lower the debt is Congressman Ron Paul, who proposes even bigger cuts in government programs than the revenue that would be lost from lower taxes, bringing down the debt by $2 trillion over the next decade. But Paul assumes a wholesale dismantling of most federal agencies and an end to entitlements—cuts that are not likely to be accepted by a majority of voters or ever be enacted by Congress.

The fact that three of the four GOP candidates would add trillions to the debt doesn’t let President Obama off the hook. In a separate analysis, CRFB finds that the under the President’s proposed FY 2013 budget request, “deficits would total $6.7 trillion (3.3 percent of GDP), with debt reaching $19.5 trillion (76 percent of GDP)” by 2022.

This, from a president who said that “if we don’t act, the growing debt will eventually crowd out everything else, preventing us from investing in things like education, or sustaining programs like Medicare.”

To recap, this is the year when:

the country will elect a new President from a Republican party that promises to “avert national bankruptcy”


we will re-elect a President from the Democratic party who said “if we don’t act, the growing debt will eventually crowd out everything else”

and this is how much more their tax and spending plans would add to the public debt:

Romney: +$2.6 trillion

Santorum: +$4.5 trillion

Obama: +$6.7 trillion

Gingrich: +$7 trillion

“If [they] had a world of [their] own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't. And contrary wise, what is, it wouldn't be. And what it wouldn't be, it would. You see?

Today’s question: Will the voters see through the candidate’s budget fantasyland and demand real answers on taxes and spending?


Harrison said...

There is a shock and awe campaign with the numbers.
Of course they are big.
And yes they are even big as compared historically against our GDP.
But they should be.
In 2008 we had recession numbers that we haven't seen since the 1930s. And we are fighting wars over seas, just like in the 1940's.

Instead of worrying about how big the numbers are, why can't we have a substantive debate about what the money is buying.
What is okay to buy now with a goal of investing in our future?
And what is it that we shouldn't be spending now?

Cuts in government spending will result in job loss.
Is that a smart thing to do now?
There is no precedent to show the private sector picking up after job losses in the public sector.
The only historic precedent is for this to be the other way around.

If we want to cut government support to people who receive benefits, then we will cut the jobs of those administering the benefits, and we will put millions of people at the mercy of a weak market place for jobs and income.

If we want to do that and support a candidate such as Ron Paul, then I think physicians better get used to much much lower salaries. Half or less.


Steve Lucas said...

I was pleased that last week two Democrats spoke about the need to eliminate the cut in the payroll tax. Social Security has a number of problems and the continuation of underfunding will only make them worse. This shows leadership on the part of the members of Congress not the Congressional leadership.

Also we are hearing about using one; take your choice, of the well thought out deficit reduction plans as a starting point for discussion, again not by the leadership.

Additionally the class warfare ploy is not gaining traction. People are aware that depending on where you live in the country $250,000 may not be such a large number for a working couple. People understand that if you take all the money from the rich this will still not balance our budget.

People are also aware that the Administration’s budget is a political document picking winners and losers and promoting a way of life many, myself included, do not wish to finance.

What we do understand is that 10% of our local electric company’s production capacity has been taken off line due to EPA regulations. There is now a tariff (tax) at a low usage level and the utility has requested a large rate increase.

Deficit reduction and fiscal responsibility are very much at the top of conversations in my community, a community that saw the beginning of the union movement. People are not happy paying off their home, watching their neighbor default, remain in their house and receive a bailout while their taxes go up.

Deficit reduction and fiscal responsibility are major issues, and the only people not getting it, are the political leadership of both parties.

Steve Lucas

ryanjo said...

"Everything is changing. People are taking their comedians seriously and their politicians as a joke." -- Will Rogers

Arvind said...

If the voters see through the fantasyland of the candidates or the current president, they would vote in droves for Dr. Paul. Wouldn't they? Which is why the media shuns Dr. Paul. So do you, Bob. Somehow you find it so easy to say that his plans will never be passed by Congress. So, you belong to the rest of the population that does not want to see reality, just stay in fantasyland. Enjoy your fantasy, Bob.

Steve Lucas said...

ryanjo”s comment may best describe our current situation. On Tuesday my wife and I return to France for our annual trip (22d). Last year I asked a friend about how close the US and France were coming in terms of political and social programs and he made it very clear, the French do such things, that we were the same.

France is a wonderful place that is burdened with high taxes, excessive government regulation, and in an effort to be inclusive, has lost much of what it means to be French. They are having much of the same debate we are concerning government involvement in their lives.

Canada, considered by many in the US to be liberal, has a booming economy, lower tax rate, with only 33% of Canadian’s not paying taxes, and is not suffering the housing slump due to higher lending standards and tax treatment.

Germany is simply the engine driving the EU.

As I look around the world I see economic growth, including a social net, with lower taxes, but a clearly defined limit to what government will do for its citizens.

Here in the US we want to give everyone everything, pick you party, in an effort to remain in power through the ballot box. We need to start the process to redefine what government will do for us and lower expectations across the board about the government safety net.

Canada, Germany, and the UK have all done this, taking about ten years; we need to do the same.

Steve Lucas