Free Markets, Free People


Debt Commission–harsh medicine?

The chairs of the Obama Debt Commission – charged with putting a blueprint together to reduce the deficit and put the government’s finances on sound footing – have released their preliminary recommendations.   And their recommendations are, as most who have monitored this situation should know, harsh.  Of course they must be – because the government has spent itself into a position where harsh and drastic measures are both necessary and called for.

Expect those that compose much of that government, at least on the left, find such austerity “unacceptable” in the words of Nancy Pelosi (whose PAYGO has been so instrumental in preventing this situation from being worse /sarc).  Before we get into the recommendations, let’s get one thing clear:

Those changes and others, none of which would take effect before 2012 to avoid undermining the tepid economic recovery, would erase nearly $4 trillion from projected deficits through 2020, the proposal says, and stabilize the accumulated debt.

That’s $4 trillion from a projected $10+ trillion in projected deficit spending over the next 8 years.  So we’re still talking about years of deficit spending.  And not one dollar will come off the debt – it will only “stabilize” it.

The point is that if doing what is necessary to cut the deficit spending of the next 10 years by 40% is “unacceptable”, imagine what any solution given to tackle the debt will be.  Paul Krugman calls the recommendations “unserious”. 

Really?  Is there anyone out there who doesn’t understand that there is absolutely nothing “unserious” about the problems we face or the fact that to solve them drastic spending cuts are necessary?   Krugman is apparently incensed that the recommendations involve 75% spending cuts and 25% tax increases (the tax increases are essentially the elimination of deductions, the lowering of taxes across the board and the broadening of the tax base).

But how in the world do you stop deficit spending if you don’t drastically cut spending itself?

The commission chairs recommend cuts or changes is all areas – entitlements, defense, non-discretionary spending, discretionary spending.  Some thing sure not to please anyone.   For instance, they recommend raising the retirement age on Social Security for future retirees, as well as cutting benefit increases.  In defense, their goal is 100 billion in cuts.  As I’ve said before, defense cuts can be made and should.  Just so it is fat and not muscle that goes.

The plan is harsh medicine for the minority that believe that government is the answer to everything.  And, as you’ll see (just watch) they will fight these recommendations tooth and nail.  Republicans, on the other hand, have reacted cautiously.  I’m not sure why.  They’ve talked about cuts in spending and simplifying the tax code for years.  Here’s a commission talking about both and recommending they be done.

Politics, fingers in the wind, and ideology begin to emerge.  What the chairmen have done is taken the discussion from a nebulous “we’d like to see spending cuts” to “put up or shut up” with specific recommendations.

It is going to be instructive to see how both parties and the president react.  It is the latter, in particular, I’m interested in watching:

Mr. Obama created the commission last February in the hope it would provide political cover for bold action against deficits in 2011. His stance now, in the wake of his party’s drubbing, will go a long way toward telling whether he tacks to the political center — by embracing such proposals — or shifts to the left and leaves them on a shelf.

Anyone – who votes for “leaves them on the shelf?”

~McQ

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38 Responses to Debt Commission–harsh medicine?

  • Thanks Obama, you just made Paul Ryan’s Roadmap a moderate position in the entitlement debate.
     

  • Good stuff, generally.  Not there yet…by a long shot.  But a good opening move.  They showed more stones than I thought they would.
    It is time to completely revise our tax system.  Some of us cannot be required to pay for government for all of us.  That should be a civic article of faith.  It would revolutionize the way a lot of people think over night.

  • Sarah Palin is concerned that Federal Reserve Chairman Ben Bernanke may cause inflation to shoot up and stay there. But could the greatest potential culprit of wealth-destroying, Germany-1930s-type hyper-inflation be, not the central bank, but Palin and the Tea Party?

    AGW must be dead .. now that the culprit of all culprits is now the “Tea Party”

    • “Momma Grizzlies Doing Monetary Policy”…another fantasy of the Collective.
      ERP…!!!!  Magenta caterpillars over here…!!!  Amply boosumed, too…

      • Well, I just can’t respond to these silly things because I’m busy writing posts on my own blog. And it’s not either true that they are read only by a handful of people who suck up to me because I’m a wise leftist pragmatic moderate professor with godlike powers of political science. We have raging debates! Sometimes we get six or more comments per post!

        As for the caterpillars, it is “bosomed” rather than “boosumed” though I would not expect dense righties to appreciate such nuances. Besides, the blue pills have made them much more tolerable, and I even think their bosoms have shrunk a little. I even saw a couple without naughty librarian glasses.

        And it’s definitely not true that I’m in withdrawal because my prediction from one month before the election that the GOP would only get 25 house seats and two or three senate seats was obviously wrong. I also predicted around 60 house seats and six or seven senate seats. It was just in a different post, so I have a multiple truth that I predicted the election correctly. Suck on it. In a few months or years, there will be a socially constructed consensus multiple truth that we wise political scientists knew exactly what was going to happen and why. We’ll have to invest some time making it come out that way, but when you understand the holy writ of post-modernism, you recognize the call to duty of investing the time for the greater cause of our glorius march to leftist utopia.

        Of course, I worry about economic collapse, as I have been discussing in many posts recently. I discuss how it all began with Reagan. Stop laughing! It did too begin with Reagan! Not Carter! No, Carter wanted us to sacrifice for the greater good, and if we had re-elected him and followed his lead, we would definitely not be in this mess. I’m working on that socially constructed multiple truth in my latest book “Why Dense Righties Are Always Wrong: An examination of all the decisions in my life where wise leftists were ignored and dense righties screwed things up”

        Yes, if economic collapse comes, as looks increasingly likely now that the nasty Republicans, some with ties to the extremist tea parties, block the agenda of Obama, PBUH, it will definitely not be the fault of wise leftists, except maybe the tiniest bit when they let their wonderful intentions go just a wee bit overboard. So don’t bring up the subprime stuff or the stimulus or my prediction that Obama was going to cut spending. Just don’t even start.

        If you think my analysis is wrong {analysis, analysis, analysis}, then you doth protest too much. LOL {chuckle} {giggle} {eyes rolling}

        Anyway, got to go because I just don’t have time for you guys these days, and it’s not true that I’m staying away because I have nothing to crow about and you guys proved to be much more correct about the election than me, starting at least a year ago. Not true at all. Stop saying that.

    • Just scanned the idiot piece in the idiot Time.
      Big take-away (the even bolded it for us)…Lower taxes cause inflation.  Hmm…  Wonder if they could cite a model for that that…you know…actually existed anywhere…???

      • It’s true Rags – there are many ills produced by lowering taxes – plague, famine, Fall of the Roman Empire,  Conquest of Saxon Britain by Vikings masquerading as Norman French, Loss of Amelia Earhart, WWII (well, okay, maybe just the European bits of it….), the Long March in China and the Maoist purges, the break up of the Beatles,  I could go on, but you get the idea.

         

        • Just look at the current play of the Dallas Cowboys … nothing there that a 50% tax bracket couldn’t fix

          • Tax free bus rides to events like Jon Stewart’s ‘sanity’ rally, or tax union dues (the union, not the members), maybe insist that Air Force flights for Congressmen and Senators be counted as taxable income.

      • http://hindenblog1.blogspot.com/2010/11/crash-idiot-time-reveals-true-cause-of.html

        Idiot Time (nominally called Time) has a piece posted under The Curious Capitalist which is WAY the hell past “curious”.  It is…as we would expect…anti-capitalist, and simply loopy.

        Thought some here would like that…

      • Almost half of all American have the lowest taxes .. none.
        It must be their fault … tax their X-box, tax their phone calls to “Dancing with the Stars”

  • Does anyone know how big the ‘Commission’ actually is?  I know they have 18 members, but how many staff etc?

  • Wait… so cutting to the bone and making hard sacrifices and restoring fiscal sanity amounts to… lowering annual deficits into the $700-850 billion range?  Really?  And this results in anger from the left and quiet caution from the GOP because it’s too controversial?

  • Several bloggers are stating that the commission is not cutting anything.  Rather, they are limiting the growth of the federal government.

    If true, our taxes will go up to codify in stone the spending of the last several years.

    • True, and a point Rush made strongly today.  The panel assumes a higher percentage of GDP going to government than is historically justified.  WERE we to buy into that, it would only (in my case) be with a ROCK-SOLID commitment to LOWERING the debt.  That would pretty much have to be an amendment, given past outlawry by the Congress.
      We can never trust these people…not for a long time with honest performance.  Which may mean never

  • Those changes and others, none of which would take effect before 2012 to avoid undermining the tepid economic recovery…

    Yes, because we all know that government spending is what keeps the economy humming along, right?

    / sarc
    McQ and Tonus both put their fingers on the central problem (farce?) of the recommendations:

    THEY DON’T DO SH*T TO ELIMINATE DEBT, BUT MERELY SLOW THE RATE OF DEBT ACCUMULATION.

    Putting a bandaid on a sucking chest wound…

    Is it surprising to anybody that the panel, comprised of politicians who have spent their careers growing government, isn’t really shrinking the government?  Rather, they are asking the American people to take it in the shorts to keep all the spending The Dear Golfer has been doing essentially intact.  Homeowners will pay higher taxes on their underwater homes when the mortgage deduction goes away.  Seniors will lose benefits on the Social Security.  Older Americans who were thinking of retiring will find that the goalposts got shifted*.  But so long as the Congress gets to keep all the programs they’ve created to funnel money to their pet special interests and pay off people to reelect them, well!  That’s a good thing!
     —-

    (*) I am a little conflicted on this.  While I would retire today if I could afford it and therefore understand why people look forward to reaching the magic date, when did it become some sort of a holy, unalienable right to be able to spend perhaps the last third of one’s life in government-sponsored idleness?  If one wants to retire at a certain age with some confidence that he will be able to afford a decent lifestyle, then let him prepare for that himself by saving, investing, avoiding debt, and making other preparations instead of expecting me and other working Americans to pay for his end-of-life vacation.

  • Expect those that compose much of that government, at least on the left, find such austerity “unacceptable”

    Yes, the next minority leader would, wouldn’t she?
    After all, austerity measures are politically toxic.  But what of the new incoming majority?
     

    And newly empowered Republicans, who believe voters last week sent them to Washington to slash spending and reduce the deficit, and House GOP leaders were hardly more enthusiastic.

    When POLITICO reached out to the top Republican leaders, at first they said they needed to talk to other key committee chairmen. Then House Minority Leader John Boehner (R-Ohio) and Minority Whip Eric Cantor (R-Va.) had no direct comment on the proposals and deferred to Reps. Paul Ryan of Wisconsin, Jeb Hensarling of Texas and Dave Camp of Michigan, who were exceedingly careful in their comments.

    “We appreciate Alan Simpson and Erskine Bowles for their leadership on the fiscal commission and their shared commitment to help address our pressing fiscal challenges,” a joint statement from the trio read. “This is a provocative proposal, and while we have concerns with some of their specifics, we commend the co-chairs for advancing the debate. We will continue to work toward solutions that help spur economic growth and restrain the explosive growth of government spending.”


    I’m sorry, but “advancing the debate”???  Congressional code-speak for “we aint sayin’ sh!t.”
    And they’re likely to do the same.

    Every time someone asked the republican candidates during the election, if cuts to medicare and SS were on the table, they danced as though they had ants in their pants.

    This whole “at least on the left” is total BS.  Do you really expect the new majority to embrace cuts in entitlement spending?  No?  Even the new Tea Party generation of Republicans?  No?  I didn’t think so.

    I trust you’ll have another kick-ball to punt around come next February.

    Cheers.

    • Talking to yourself AGAIN, Poque…???
      When you ask a question, you might allow for an answer.

      • Go ahead and answer them, Rags.
        Just because I feel comfortable in predicting how McQ would answer those questions, doesn’t mean that you can’t answer them yourself.

        So tell us.  Do you believe that the new Republican majority would embrace entitlement spending?
        Not should they, mind you, but will they.

        • Moving a nation in a direction requires building an idea into a majority notion.  That can take the work of a relative few dedicated people.  Those are seldom political people.
          But, in this instance, we do seem to have people starting to move the herd.  “Building consensus” is how it is sometimes depicted.
          We have people actually talking about doing some of the things we (here) might all agree are needful.  Necessary, but not sufficient.  “Advancing the debate” is not useless gassing…provided the momentum builds rather than dissipates.
          There is a growing recognition here and abroad that the welfare state cannot be sustained.  I do not expect most pols to get out in front of the herd on this.  That would be expecting dogs to meow.  Still, Ryan and Hensarling and now others have put themselves at the vanguard in ways that it would be wrong to poo-poo.  You’ll recall that Bush did the leader thing with SS and got murdered for it, arguably because he did not lay the groundwork…or because the nation simply was not sufficiently scared spitless.  I think we are getting there.
          Talking is good here…provided that talking is coupled with other action.  The pols know they have a new thing with which to deal, and that is an activist voter and worker segment called the TEA Party.

          • Moving a nation in a direction requires building an idea into a majority notion.

            Wow, that sounds a whole lot better than “advancing the debate.”  Who knew you were so talented in congressional code-speak?  Because for all of your complaining that I didn’t allow for an answer, you still didn’t answer the question.  So I’ll ask again.
            Do you believe that the new Republican majority will embrace cuts in entitlement spending like medicare and SS?

            Oooh, ooh, can I answer it for you?
            I’m going to guess judging by your skill at congressional code-speak, you don’t really want to answer that question.  So I’ll save you some time.

            NO, they’re not going to embrace cuts in entitlement spending.
            They know, as well as you know, that it would be politically suicidal.  After all, there is another election in two years.  So why rock the boat when you can keep blaming the other party?

            Talking is good here…provided that talking is coupled with other action.

            Yes, let’s have another Contract with America, shall we?

        • My bad.  I should never try to dialog with an idiot.

          • Oh, yeah.  Good one.  Well done.

            Doesn’t change the fact that you still didn’t answer the question you were so worried about me not allowing for one.

          • Yes.  Poque.  I believe they will embrace cuts in entitlements.
            Just as the people in general will have to realize that those are necessary.
            Just as I knew that decades ago, and in my own case planned on never applying for them.
            WHEN they do is an open question, but as I said…  If you had the wit to comprehend…

    • Well, who got us hear? It was the left, with social security, medicare, medicaid, and now obamacare. Sure, the Republicans helped some, with medicare part D, but the Democrats even expanded on that as part of obamacare.

      The left created the problem. They stand in the way of any effort to fix the problem. This is even hinted at in your “Every time someone asked the republican candidates during the election, if cuts to medicare and SS were on the table, they danced as though they had ants in their pants.” comment. The Republicans were asked this question because leftist “reporters” wanted to hang them with it, so as to preserve Democrat seats. The failure to respond in a manner you (and the leftist “reporters”) want was in fact smart.

      Will the GOP move us far enough in the right direction? Maybe not, but at least they will move in the right direction.

      • The Republicans were asked this question because leftist “reporters” wanted to hang them with it, so as to preserve Democrat seats. The failure to respond in a manner you (and the leftist “reporters”) want was in fact smart.

        OMG!!
        The same questions that “leftist reporters” asked them are the very same questions this bi-partisan commission are now asking… that we need to cut SS, medicare, and the like.  Is this commission out to “hang” republicans?  It’s all one big conspiracy, huh?
        According to you, they were “smart” to dance around those questions.  I agree with you there, but will they be smart to dance around them now?  Smart politically?  Probably.  Smart conservatively?  Not so much.
        Oh, there I go again answering my own questions.

        My apologies.  I’m just so used to you guys not answering those questions.

        • Are you seeing anyone forcing the Dems to answer how they will fix it?
          no. They just say “no cuts” and “tax the rich.”
          Let’s see specific taxes and tax rates. Let’s see them announce it proudly.
          Whut? They don’t want to do that? Hmm, why not?

    • You didn’t read the whole thing did you Pogue?

      If so, you might actually have noticed this:

      Republicans, on the other hand, have reacted cautiously. I’m not sure why. They’ve talked about cuts in spending and simplifying the tax code for years. Here’s a commission talking about both and recommending they be done.

      Politics, fingers in the wind, and ideology begin to emerge. What the chairmen have done is taken the discussion from a nebulous “we’d like to see spending cuts” to “put up or shut up” with specific recommendations.

      You’ve been reading me long enough to know I was taking just as hard a shot at the GOP as I did Peolosi. Well, you’ve been reading me long enough when you actually do read. Quit stopping after the first paragraph and you’ll probably look less foolish when you go off on a tirade.

      • No.  Read it again.
        Expect those that compose much of that government, at least on the left, find such austerity “unacceptable”

        It is not “at least on the left” that finds such austerity “unacceptable.”
        My point is that throughout the campaign, no Republican – not even the Tea Party republicans – addressed cutting entitlement spending such as SS and medicare.  Not one.  You know as well as I do that they danced around it hoping for rain.
        So, yes, they too, find some of these austerity measures as “unacceptable.”  Not merely “cautious.”

        Unless, of course, you believe that such dancing was merely a courting ritual to get elected, and once in office, they will take the knife to SS and/or medicare.  But you don’t believe that, do you?  Hell, even Ragspiere isn’t stupid enough to believe that.  And Don here thinks that it was smart not to fall into some sort of “leftist reporter” noose.
        And you’ve been reading my comments long enough to know that this isn’t really one of my tirades.

        Just… constructive criticism.  ;)

        Cheers.

  • 1. Full SS benefits age = life expectancy at birth – eight years
    2. Dept of Education – gone
    3. Dept of Energy – gone
    4. Fannie, Freddie – gone
    5. Agriculture subsidies – gone
    and I’m just getting warmed up here

    • If that’s just a warm up, I’d love to see your A-game!  Good places to start.  Indeed, it seems to me that we might eliminate every cabinet department created since 1961.  I mean, honestly: what does Health and Human Services DO???

    • 6. Foreign aid to Egypt, Saudi Arabia, and the Palestinian Arabs — gone.
      7. NEA — gone.
      8. UN fees — gone.

       

  • Touching SS will be a 3rd rail for a while as both parties have used it as a cudgel. IIRC, didn’t lefty pundits claim SS’s finances were fine and dandy when Bush wanted to allow private accounts?
    My suggestion would be for both parties to agree to a symbolic beginning of raising the retirement age slight. Both parties should attempt to get full votes for that. Then pass it as a stand-alone bill to alert the public that there is a problem, and that its not going to go away.
    The fact is that the Democrats could demagogue this one more time. Then they get re-elected, but the problem persists. What are they going to do, raise taxes? Then they will lose again, and so on, until finally the public figures it out. In this game of musical chairs, no party can be certain they won’t be the last party in power that has to actually be the bastards to cut it.

  • But doesn’t the commission also recommend locking in 2010 spending levels?

  • So tell me again after the most current elections, when did we begin trusting what are essentially Washington and Big Government insiders say we must do?

    The problem is not taxes, the problem is spending.

  • Funny thing, all these fancy plans would not amount to a fraction of the savings gained by actually cutting spending.  Like for instance a one time 5% across the board cut in everything, combined with a five year freeze on increased (actual) spending.

    That, along with moderate growth would just about take care of all of the deficit, you could cut some programs even more.

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