Today, Pres. Barack Obama will give a speech calling for debt reduction and entitlement reform. Forgive me for a bit of skepticism, but haven’t we heard this before?
Just a month after he took office, President Obama hosted a fiscal summit at the White House. The president invited more than 100 lawmakers, economists, policy specialists, and special-interest groups to a daylong meeting designed to “launch a national conversation on how to put the nation on sounder financial footing.”
Advertisement
“We cannot simply spend as we please and defer the consequences,” the president declared, promising to cut the deficit, then $1.3 trillion, in half before the end of his first term. Having made that promise, the president instead went out and increased the budget deficit to $1.4 trillion. He also pushed through a $2.7 trillion health-care bill that adds $833 billion to the deficit over its first decade of full implementation.
Roughly a year later, he appointed a bipartisan deficit commission, warning that “these are tough times and [the federal government] can’t keep spending like they’re not.”
In December, the National Commission on Fiscal Responsibility and Reform issued its report calling for spending cuts, tax reform, and changes to Social Security, Medicare, and Medicaid. The president ignored it. The deficit reached $1.65 trillion.
In this year’s State of the Union address, President Obama again said we have to confront the fact that our government spends more than it takes in. “That is not sustainable,” he said.
He then proposed a 2012 budget that adds $13 trillion to the national debt over the next decade.
One begins to detect a pattern.
In truth, the president’s approach to debt and entitlement reform is not nearly as inconsistent as it seems. The president may or may not be concerned about the size of the national debt, but he clearly is not concerned about the size of the federal government.
Thus, the president consistently calls for tax increases as a solution to our debt problems. Sometimes he talks about reforming entitlements, but the reforms he supports are simply tinkering around the edges, not a fundamental restructuring. He’s happy to try to make government programs more efficient but will not eliminate them.
This is the fundamental difference between the president’s approach to debt reduction and that of, say, Rep. Paul Ryan. Ryan seeks to return government to the roughly 18 percent of GDP that it consumed under Pres. Bill Clinton. President Obama would allow government to continue to grow more or less on the same trajectory that it is now on, rising from 25 percent of GDP today to 42 percent of GDP by 2050. Given that state and local governments consume an additional 10–15 percent of GDP, government at all levels would be consuming well over half of everything produced in this country. Proportionally, we would have a government bigger than France’s.
Thus, when the president calls for raising taxes, he is saying that government should do more and spend more, but that we should pay for it, a marginally more responsible position than simply continuing to borrow the money. And, since part of the projected governmental growth is interest payments on the debt, if we could avoid accumulating any additional debt, the future size of government might be kept down to, say, 35 percent of GDP.
But could the United States economy really survive the burden of a government that big or the taxes necessary to support it? In 2008, the Congressional Budget Office reported that in order to simply pay for spending that was locked in at that time, we would have to raise both the corporate tax rate and the top individual tax rate from their current level of 35 percent to 88 percent, raise the 25 percent tax rate for middle-income workers to 63 percent, and raise the 10 percent rate for low-income Americans to 25 percent. That was before Obamacare and the post-2008 spending binge.
And people say that Paul Ryan’s proposals are unrealistic?
That’s what should be kept in mind as the president makes his latest call for deficit reduction. The real debate is not just about the deficit, the debt, or even entitlement reform. It is about two different visions of government. Do we continue down the road to becoming a European-style welfare state with a much bigger government and much higher taxes, or do we return to America’s roots of constitutionally limited government, lower taxes, and individual liberty?
It's the debt, stupid!
(to paraphrase an old Bush attack)
And unemployment
And inflation
And spending
And growing government
And rising gas prices
And OBoehnerCare
And our foreign policy
And the economy
And the stimulus
And QE1
And QE2
(what the President will open his speech with tonight)
"My fellow Americans, I'm here to take a Mulligan..."
It's truly astonishing that, a) Very few take the POTUS seriously when it comes to budgeting anymore, and b) We have a POTUS that no one takes seriously when it comes to budgetary matters.
You question,
"Do we continue down the road to becoming a European-style welfare state with a much bigger government and much higher taxes, or do we return to America’s roots of constitutionally limited government, lower taxes, and individual liberty?"
We'll get a glimpse of that answer soon enough with the budget battles...the definitive answer will come in 2012!!!
The truth, according to BHO, is what he said last. Kind of the sterotypical politician...how can you tell a politician is lying? His lips are moving.
The sad truth in Washington is nobody is serious about cutting deficit spending, Democrat or Republican.
On the bright side, this big govt, big spending attitude has pretty much reached the point of no return. Kind of like watching an airplane in a flat spin, the only uncertainty is where the wreckage is going to hit.
Like Keynes famously said, in the end we're all dead.
So folks...relax and enjoy the rest of the ride.
I agree with this column, but there is another fundamental DC attitude that has to be changed as well if we're really going to solve these problems.
Everything any of these politicians say points to the fact that they believe that all the money in the country belongs to them. You as the taxpayer are just holding a portion of their money until they can find a way to pry it out of your hands.
So we are left w/ a situation where the price of everything is going up due to poor (or no) energy policy, bad agricultural policy and uncertainty due to government regulations, as well as gas prices doubling during the current administration (see energy policy), and their answer is to take more of the money that we are holding for them.
As far as they are concerned, it's our job to pay and produce more little taxpayers to sustain their Empire.
I spent 20 years in the USAF, and I still love America--but I grow more certain by the day that this will only be fixed by some kind of horrible total collapse of the system. The kind of thing that leaves people dead and hungry and ready for another revolution.
I pray that we can see this catastrophe before it overcomes us--in fact we may be looking at it now. The light at the end of the tunnel is a train.
Sadly, this entire article and all the comments are continuously focused on a past reality that no longer exists. Had this been any prior President all would be relevant.
Obama and his entire life history and those he has associated and surrounded himself with are doing exactly what has been planned and desired all along.
They do not want to correct the problem or reduce the debt and cut spending. They need to collapse the entire U.S. economy so they can redesign America in their Open Society vision as dictated and determined by George Soros.
It would not just be America that would collapse economically, it would collapse the entire world economy. China would not own or take over America, they would simple collapse along with everyone else as no other economy would remain as they exist currently.
I do not desire this plan myself, but at least I can appreciate the reality of what is taking place, and view and deal with Obama and his agenda as it exists, unlike the GOP, media, Americans, and the rest of the world.
It is my hope that whoever is going to run against Obama in 2012, they deal with him based upon this reality as opposed to considering him a President along the general lines of a Bill Clinton or Jimmy Carter. He has little to nothing in common with either. Obama is not incompetent, he simply has an agenda that is counter to everything main stream America stands for and represents. He is in fact an evil President with an evil agenda, and is truly anti-American, just as he is anti-Colonialism in how he views all of our allies.
Others have mentioned anti-colonialism and this will only make sense when they read the book, "Obama's Rage" by Dinesh D'Souza.
I read this book and I'm truly astonished that the left somehow pushed this man into office. I understand how, but it shocks me that mainstream America doesn't know anything about Obama's beliefs.
Read the book and vote accordingly in 2012.
My brother and father are both more "anti George Bush" than they are true Democrats and both were fervent in their belief that the wrong man was in the WH. Before the election, they thought the messiah had come with Obama. They chanted CHANGE, CHANGE right along with all the other uninformed's out there.
Now, the chorus has dwindled down to a murmur and the disillusionment has set in. Neither my brother or my father will discuss the current political situations regarding BO and his so called "CHANGE". They cringe at the directions and conditions we're under and I feel so bad for both of them.
America, in general, LESS IS ALWAYS BETTER THAN MORE. We need more govt and less GOVERNMENT.
Help spread the word! Reduce the size of GOVERNMENT back down to govt where it belongs!
Writers, start using this metaphor! We want more govt and less GOVERNMENT!
Good article that succinctly outlines the hypocrisy and ridiculousness of Obama's teleprompter rhetoric of "deficit reduction" that equates to massive, historic deficit increases in ObamaLand.
Now if only Cato would stop peddling deficit-increasing open borders and amnesty for millions of illegal aliens, I might actually join them.
Obama's call to raise taxes is simply raw meat to his unhappy base. The chances of tax hikes are slim. But the mere possibility is destabilizing to small business and investors. These wealth-makers thought that they had at least a two year window in which to plan in a stable tax environment. When Obama asked business leaders why big companies were sitting on cash hoards, and small businesses were not creating jobs, they said they needed stability and room to breath and plan.
Face it. The guy talks jobs but his motivation is retaining power and "spreading it around".
It's what he learned in his only real job...community organizer.
All of you who complain that Obama doesn't mean what he says? You're not listening.
He says, "We cannot spend as we please, and just defer the consequences."
He MEANS, "I intend to spend as I please, and I want the consequences - confiscation of more of YOUR money - NOW."
He says,"Our current fiscal situation is unsustainable."
He MEANS,"I need more of your money."
He says, "We cannot continue to spend more than we take in."
He MEANS, "We need to take in more."
The average person hears Obama's words, and assumes - like most rational people - that what he MEANS is that we cannot SPEND any more. And so they are baffled when his budgets (ha) do not meaningfully cut any spending at all.
But if you listen carefully, that is NOT what he is saying. He is very careful to couch his speeches in terms of the correct balance between spending and income. And this comports completely with his real objective, which is to TAKE more money from those who have it, and use the federal government to redistribute those monies to those in Obama's favor - those who merit it in his America-loathing narrative of oppression and exploitation.
You see, those of us who have to tighten our belts think that we cannot come up with any more money unless we earn it.
But Obama knows that he can use the power of government to simply TAKE it.
And it's really that simple.
Republicans trying to negotiate with Obama need to understand what he is saying, and then force his hand, every time.
With Obama, you don't need a teleprompter. You need a translater.
