The president’s deficit-reduction speech was a flop. Either he does not really get the scale of the problem or he has decided to punt.
Even if we took his plan seriously — and it is hard to — $4 trillion in forgone deficits over twelve years does not amount to very much in the absence of a restructuring of the entitlement programs. This is what Paul Ryan gets and Barack Obama does not: The scale of those unfunded entitlement liabilities is shocking, in the neighborhood of $100 trillion. Obama is talking about eliminating some deductions for 2 percent of U.S. households and squeezing some phantom efficiency out of the Pentagon, but he adamantly refuses to address the three things that absolutely must be addressed: Social Security, Medicare, and Medicaid.
Oh, wait, he’s going to have a committee of experts. Never mind, problem solved!
Not surprising. After all he's the entitlement president.
Reply to this commentLinkReport AbuseAnother committee of experts he will ignore completely if there's any hint of actual reform.
But as political theater, have to disagree, Kevin, unfortunately. I think it's gonna persuade, because he basically talked (credibly, to the layman's ear) about fiscal responsibility and promised little pain except to the rich. Which is an exact fusion of two of the strongest consensuses in public opinion.
Clintonism, all over again. Except he won't have Dot.Bomb and a flood of cap gains revenue to make it look successful.
Reply to this commentLinkReport Abuse"Either he does not really get the scale of the problem or he has decided to punt."
Both! I think his main concern is to thread the needle so that he can get reelected; do just enough to convince independents that he 'gets it', while doing as little as possible so that he doesn't get challenged from the left.
If that is his intent, I hope he fails miserably. If he gets a serious third party challenger from the left in the general election, he's toast. Of course, the GOP could still blow it by nominating someone who will only generate enthusiasm from tea partiers. We need a candidate who is conservative enough for the tea partiers but has a style that will attract independents and Reagan Democrats.
Reply to this commentLinkReport AbuseLiberalism is all about intentions. Specifics are for suckers, er, I mean conservatives.
Reply to this commentLinkReport AbuseThis may qualify as a bona fide rant but I am surprised by the genuinely smart people who continue to expect something of substance from Obama and are surprised and disappointed when it does not materialize. The man has been a demonstrable fraud since his arrival on the political scene and reasonable people should conform their expectations and behaviours to that reality, not what they hope will happen. Furthermore - Obama does not care about what any of us care or think. He cares only about his own power capacity and comfort. He scheduled this speech away from the White House in the middle of normal business hours because no one watches him on TV any longer. This was a campaign speech - the actual action relative to government will be handled by any of those Democrats who drive power in the field and have desire and energy. Obama knows what they will do - push hard for higher spending and taxes - and will go about his business of doing precisely nothing remotely resembling adult work. He does NOT CARE about the health and well being of any other human being, much less the United States of America. Republicans who "negotiate" in good faith with this man are fools.
Reply to this commentLinkReport AbuseThe speech was a "flop?" I'm pretty sure Williamson would have come to that conclusion regardless of anything Obama might have said - even if he'd improbably (and irresponsibly) endorsed Ryan's fantasy budget proposals.
Reply to this commentLinkReport AbuseIt's true that we don't need another committee. Simpson & Bowles gave us a complete set of proposals. As usual neither "party" is even noticing the set of proposals; instead you're just squabbling about numbers. Playing poker for pennies.
This lets the people know for certain that neither "party" has any intention of reforming anything. You just want the game to go on all night and all day.
If either of you "parties" wants to be taken seriously by the people, you'd start by adopting the Simpson & Bowles agenda AS IT STANDS. Nothing is perfect, but this one is pretty good.
Reply to this commentLinkReport AbuseI wish that we could etch on the mind of every American two simple factoids: 1) over the course of the last 60 years we have never been able to generate tax revenues to the federal government in excess of 21% of GDP (usually in the range of 17-19% of GDP) and 2) even 21% will not pay for spending in the range of 24-25% of GDP.
Over that period of time we've had top marginal tax rates ranging up to 90+%, but revenues to the Treasury remain pretty well fixed as a share of GDP. Why, oh why, are we stuck with the idiotic system in which CBO scoring is based on the assumption that changing tax rates do not alter human behavior in response? As a retired tax attorney, I'm here to tell you they do!
It's really hard to solve the problem, folks, but it's pretty easy to grasp that we're not going to solve it by just increasing taxes -- especially by just raising taxes on "the rich." It truly is depressing to see the POTUS take such a fundamentally unserious approach to the most critical problem of our time. Does he really not know better, or is he just trying to get past 2012?
Reply to this commentLinkReport AbuseAem Jeff,
I will consider everything Obama does a flop until:
1) He makes a full, televised, prime-time apology to President Bush for everything he is doing now that he cheaply criticized Bush for then. Everything.
2) He renounces all of his Marxist memtors, their worldview, ideology, and methods.
4) He apologizes to Americans for assuming the worst of them and the best of himself.
3) He embraces Hayek, Burke, and free-market liberalism.
It is a given that you believe your pov is correct. Well, I disagree, as does Mr. Williamson. We will praise what is praiseworthy, just as I am sure you did for President Bush.
Reply to this commentLinkReport AbuseAemJeff, it would be really keen if you guys could make up your minds. You want to argue Ryan's cruel for achieving solvency solely with spending cuts and not tax increases, go right ahead.
But you guys are really sounding silly by blasting him for cutting too much AND not cutting enough, all at the same time.
Reply to this commentLinkReport AbuseNo real leadership or suspense in this speech. Still a socialist regardless of the rhetoric he tries to cloak it in. But I must admit there was an interesting new phrase added to the political lexicon “tax expenditure”. As a former budget director and financial analyst I could have used a derivation of it. Whenever we evaluated reducing price discounts in the budget I suppose I could have said we are reviewing our “revenue expenditures”.
Reply to this commentLinkReport AbuseWhen I read the word "punt" in the post above my eye changed it to "pout" - and either is apt. Speaking of a fantasy budget proposal! How is Obama's proposal to not do much of anything except "tax the rich" in any way other than irresponsible?
THERE IS NO MONEY.
Taxing the "rich" will still not pay for even the remainder of this year (2011's) government spending - did anyone watch the voodoo economics video that was posted on NRO a week or so ago? Pretty simple and informative. Not only will taxing the rich not work, that proposal doesn't even begin to address entitlements down the road. Do lefties not have to balance their home budgets? Is this why they fail to understand that there is a finite amount of money to address ongoing entitlements and runaway government spending?! We have an aging population that has not reproduced itself at a level to sustain us.
Reply to this commentLinkReport AbuseI disagree Kevin. I am pleased with the speech. After at least 19 years of BS obfuscation by the Dem party that they are not really Leftists (see gore, clinton, bob kerry ca 1992) it's now out in the open that we have a left-wing party and a right wing party. Let the voters choose. Personally, I think guys like AemJeff and Barry O will be very disappointed when the voters choose. Anyways, events will soon overtake this Barry O speech nonsense. In Mid - May, the debt limit is reached; barry o will again do the cha cha and sign off on spending cuts as a condition for a one year debt extension. THEN THE BIG ONE-- JUNE 30th, Ben's Fed stops buying treasuries and stops monetizing the debt. Little Turbo Timmie Geithner will then have to peddle the T-Bills without the $60 Billion/Month boost from the Fed. Timmie will look like a worn out Willie Loman, a beaten down salesman with a hole in his shoe and no customers. Who'll buy those worthless T-Bill chits from Turbo Timmie? And what rate will they demand? Who knows, but Long-term rates will skyrocket and debt service costs will explode. The game ends and Barry O pitches a tantrum because"nobody told me this would happen!!!" As I said, I am pleased with the speech.
Reply to this commentLinkReport AbuseAt least he said, in PLAIN ENGLISH for all to hear:
2/3 of our Budget is Social Security, Medicare and Defense..
Rational people will have to surmise that "this" is where the majority of cuts needs to come from.
For SS and Medicare: Wait Longer, Pay More, Receive less.
Some combination of that mix is the groundwork for a solution.
Now...if only that registers with rational Americans..
Reply to this commentLinkReport Abuseit was a punt. punt to yet another commission/panel/failsafe mechanism; punt to joe biden; punt to 2014; stretch it out over 12 years instead of 10...
Reply to this commentLinkReport Abusethe man is completely unserious. next!
"How is Obama's proposal to not do much of anything except "tax the rich"
He wants to tax my employer more?
Wotta dope.
Reply to this commentLinkReport AbuseShawn, it's not clear to me where I've argued in regard to whether Ryan's budget proposal cuts too much or not enough. I will say that it's pretty easy to see how one could argue both of those things coherently, given the complexity of the proposal. I did call it a fantasy, by which I mean it's not enactable (an assertion with which I'll bet Ryan would agree) because it's both politically untenable and because numerically it's based on risible assumptions. Since I'm a liberal I also believe it's immoral, but that's not why I say it's a fantasy.
Reply to this commentLinkReport Abuse"Either he does not really get the scale of the problem or he has decided to punt."
No. That's wrong. He understands the problem, and he's not punting. He simply has different goals; he is not playing the same game that we are.
His goal is to destroy American capitalism. Exacerbating the problems facing us, as he is deliberately trying to do, is a sure way to meet his goal. After all, Reagan was able to win the Cold War with hardly a shot by causing the Soviet economy to implode; Obama is attempting to do th esame here.
That 50% of the Congress and of the American people are with him on this is a tragedy of epic proportions.
Reply to this commentLinkReport AbuseNo suprises in the speech. Serious cuts in entitlements would help prevent financial crisis. But crisis creation is the goal folks; it's not something he's trying to prevent.
Reply to this commentLinkReport AbuseAemJeff: If you feel that Obama's speech wasn't a flop, please demonstrate how. Outline for us actual proposals that were made, and give us facts a figures demonstrating that the proposals being made were realistic.
If you can't, it would be safe for us to assume that you will attack anyone who doesn't love other people's money as much as you do.
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