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Wednesday, July 18, 2018

Oct. 28 (Bloomberg) — The U.S. budget deficit is worse than ever. Taxes already have been raised, so efforts to narrow the shortfall should focus only on spending. The only fair deal is a straight trade: relief from the cuts under sequestration in return for reductions to entitlements. Yet there’s no incentive for Democrats to go along.

All of these statements are accepted by the public and important politicians. All are false.

History suggests the new House-Senate budget committee, due to report by December 13, will strike out. The Bowles-Simpson panel’s deficit-reduction proposals in 2010 didn’t lead anywhere, Congress’ two budget committees haven’t met in years, and a special leadership-designated “supercommittee” designed to prevent automatic cuts under sequestration reached a stalemate.

The 29-member panel that convenes this week must contend with this record of failure, a task compounded by misinformation.

A starting — and false — premise of the public, and some politicians, is that the deficit is spiraling out of control. In a national survey by Bloomberg News last month, Americans said, by a margin of 59 percent to 10 percent, the deficit was getting worse; this belief was held by 93 percent of Tea Party supporters.

In fact, the deficit, which reached a staggering $1.55 trillion in the 2009 fiscal year, has declined every year since and is less than half as big today.

There’s a need to cut the deficit, short- and long-term, Republicans say, but not by raising taxes, which were increased this year. President Barack Obama already “got his revenues,” House Speaker John Boehner said this month.

Almost $700 billion in revenue, over 10 years, was raised when the administration and Congress agreed in January not to renew the tax cuts for the wealthy enacted under President George W. Bush.

What the speaker doesn’t say is that recent measures, including the sequestration, would reduce outlays by more than $2 trillion over 10 years, or three times more than the higher taxes would generate. The Bowles-Simpson proposal envisioned a ratio of spending cuts to tax increases of less than 2-to-1.

A few Republicans, including Representative Tom Cole of Oklahoma, recognize that revenue must be on the table to get anything done on entitlements.

Other Republicans insist they can trade some easing of the sequestration for entitlement cuts. Yet the most specific suggestions — adjusting cost-of-living increases for Social Security and other programs and means-testing Medicare — have come from the White House.

47 Responses to Flawed Assumptions Plague Latest Deficit Panel

  1. The statements cited in this article are accepted as Gospel by some of my relatives, friends and neighbors who make no effort to verify whether or not they are true. The truth, however, is the exact opposite. Deficits have been cut in half since President Obama’s Inauguration, unemployment is going down, the economy – including the real estate sector – are rebounding, the number of foreclosures and bankruptcies are back to normal levels, the size of government has been reduced by over 700,000 civil servants, and taxes are at record lows and have not contributed to economic growth or job creation.
    Our biggest problem is the fact that neither the public nor the private sector are investing enough to influence economic growth and job creation. Efforts to invest in infrastructure and R&D failed, not because it is not needed, but because of obtuse ideological convictions. Instead of investing at home, our corporations and the wealthiest members of our society are taking advantage of the lowest tax rates in the industrialized world, loopholes, and subsidies, to invest in China, Bangladesh and just about everywhere except in the USA, to maximize profits and get market share in emerging economies.
    Our problem is not that we are spending too much, our problem is that we are making loopholes available to people who don’t need them, that we are giving subsidies to industries and individual who don’t need them, that we are spending too much in “defense” and foreign aid, and that instead of making adjustments to make our government more efficient – and limit fraud and abuse – some of our leaders remain obsessed with the idea of depriving our economy of the investments it needs for sustainable growth to score points with the most partisan and ignorant members of our society.

    • The statement, “not that we are spending too much” simply invalidates your whole argument, not that any of it was any more than leftist propaganda anyway.

      • Damn – montanabill resurfaces with his fright-winger rhetoric…boring! …and, just for the record billy, Mr. Vila can out think and out write you with his eyes closed….

          • Say, don’t you have some pennies to roll around in or hungry babies in danger of getting fed? You have work to do…

            Look — in the sky! It’s a bird! No, it’s a plane! No — it’s…

            SEQUESTER MAN!!

            Able to squeeze nickels ’till the buffalo shits. More stingy than Republican health care. Able to clench all of his sphincters indefinitely at the sound of Salvation Army bells. Hails from Montana, home of tax-slurping redneck deadbeats.

          • Isn’t it time to go get some more food stamps? You must go through a lot of them by being out-to-lunch so much.

          • Listen, I’m not trying to criticize you or anything, and I realize that it’s been decades since you actually worked. But the day may come when you run out of friends and neighbors to cheat is all I’m saying. You may even have to apply at my company then, so have a care.

          • What Dominick said was, we’re depriving our own Country
            of vital investments. By providing sweetheart tax rates,
            and loopholes to wealthy investors, and multi-national corporations, so they’ll have even more money to invest,
            and enrich the Commies in China, while adding to the unemployment rate here. Then bitch about all the people
            on food stamps.

          • Like I said, propaganda. Those things are true only in a very narrow perspective. Like saying an apple tree is red, if you only look at the apple.

          • MB, if you were right, I’d admit it. I’d love you to be right!
            But, the numbers don’t lie. China will be the dominate world
            power in 20 years or less. If we don’t change our tune.
            They have a near inexhaustible supply of cheap labor. And a government nimble enough to both invest, and take advantage of emerging market trends.
            They believe in government investment. And do so with 10%
            of their GNP each year. We believe we can’t afford it. And
            prefer private investment, as opposed to government.
            As our private investors looks for position in China’s 1.5
            billion sized emerging consumer market. As we sit, for all intents, and purposes, dead in the water. Our political system gridlocked for perhaps years. While, the people that have the most influence in our political system, are being rewarded by tax policies that incentivize their foreign investments. And,
            provide sweetheart tax deals on the returns from those investments. That’s if they bring their profits home at all.
            Now, we might be able to change this, but Grover Norquist says this would qualify as a raise in taxes. So it’s a solid no go. As is changing the lopsided trade deals, that were supposed to help job creation in both Countries. But, have cost us 10 million manufacturing jobs in the decade between 2000, and 2010. And there is little let up in either the investment dollars, the outrageous trade deficits, or in the outflow of jobs, that continues unabated. You heard, I guess China during the last debt ceiling crisis called for the “DeAmericanization,” of the world economy. And a change from the dollar, as the world’s reserve currency, to their own.

          • I think the Japanese had that belief a few years ago. You are right about our economy sitting dead in the water, but that is the direct result of government actions. No amount of more government spending would change that, only a change that encourages private investors to believe that investment in American free enterprise might again be profitable. If all our government can think of is more taxation to pay for ‘income redistribution’ projects, money will look elsewhere for profit.

          • That post was the conversational equivalent of jumping up and grunting out a steaming turd on the dinner table.

            American companies have NEVER seen better profit, and the markets are at historic levels, so just stop your ridiculous lying!

          • Ok, you confirmed it. I’m through browsing for the evening. Chat with you at a latter date, I’m sure.

          • I think you’re looking at the right elements, and I believe
            you’re thinking about some of the things I’m pointing out.
            But, it’s not government action that is the problem. It’s
            dysfunctional government inaction. We have people that
            believe the government is incapable, or that don’t believe investment, yes, spending by the government on improving those things businesses utilize to be more productive, and
            more efficient, is necessary. Yet, that’s exactly what China
            is doing, and they are eating our lunch. And attracting the
            investment dollars our businesses must find to be more
            competitive, and creating the jobs our people need to have
            a life, and raise their families. I don’t understand people that think so little of their County, they would just as soon burn it
            to the ground, as admit there might be a few things they don’t know about the role of government. Like the necessity of funding it, and the essential role it must fill, in partnership with private enterprise, for a strong vibrant economy. And how essential that is to our long term security. As I said, if we believe business and government cannot exist as partners.
            That one of them must rule, and one bow down.
            Because the only kind of system that works is unfettered
            Capitalism, with a tiny little government. So then, go about
            tearing that down, and wreck the Country in the process.
            So damn positive are they. They need to ask themselves, then why is China kicking our ass, with a big old government
            all up in business’ business? And why don’t they seem to care?

          • When you would like to live like the average Chinese citizen, then the government would be free to operate like the Chinese government.

          • It’s already not about how the average American would like to live. It’s about the power of corporations over Americans, and
            their government. What is supposed to protect American’s freedom? Corporations, or the government? Have you thought
            to look at how American based corporations are treating their
            employees in China? And, why they are allowed to treat them
            in such a manner? And, do you believe they would treat their
            American employees any better, if not for our government’s
            regulations, and wage laws? I’m asking you to think, man!

          • Before I created my own businesses, I worked for a couple of Fortune 500 companies, one of which I rose into management. Other than being hidebound by bureaucracy and having the usual people shenanigans, I didn’t find them, at all, trying to control my life. I’m sure you can find examples of companies abusing employees, just as I can find numerous examples of our government abusing our citizenry. In the end, there is one big difference: corporations cannot hold a gun to your head, government can and does.

            The reality for any business is that it is only as good as its management and employees. If either one is bad, the business will not prosper for long.

      • Montanabill…This from someone whose state gets a higher ROI on the federal tax dollar you pay? Who really adds to the deficit? Military industrialists who demand war, war and more war…the same hot shots who push for more and more federal tax dollars to spend on Big Corporate Welfare recipients that keep your state operating?

        MY state taxes pay for those red porker states living too high on the hog. My state gets 61 cents for every dollar we pay in federal taxes. Your state gets $1.37 for every dollar it pays…Do tell..Why is MY state supporting yours?

        • Eleanore, please look behind the numbers. For what and to whom does that money get distributed? Who pays in and what kind of income do they have that supports their contributions? You are looking at talking point numbers without benefit of knowing the whole story.

          • We’ve gone down that particular path before, eh Scrooge? The numbers all point to lying redneck goobers who talk about self-sufficiency but slurp up public benefits like there’s no tomorrow. Say, isn’t your Social Security due on Friday, BTW?

          • Yeah, I’ll bet. Just like you aren’t enraged whenever you hear Warren Buffett talk about greedy deadbeats, yes?

          • Say Montana Bill…My property taxes in NJ are higher than yours…why? Because behind those numbers are YOUR state’s federal tax bite. Warren Buffet admitted publicly HE pays more than his secretary in income taxes. Rip Van Romo admitted he ONLY pays 16% to everyone else’s 28% AND lest you need a serious round of reminders, Romo gets huge tax cuts for his higher than high salary, huge tax cuts for the businesses he owns and huge tax subsidies for those offshore corporations he’s now being investigated for RICO fraud for…So do tell…Is a rich man REALLY paying more? Or do the 99% on Middle and low incomes fork it over every time a slime baller spends more than he earns? TARP remind you of anything? ARRA? The EXXON Valdez spill fine? and the soon to be BP spill fine ..If you are trying to make the case that rich men pay more in income taxes….they damn well should. If you earn a Benmosche salary of $10 mil a year and get another $10.6 million bonus annually, you damn well best pay one whole hell of a lot more than someone in Montana paid a paltry $30,000 a year to live on.

            WE live within our means. We don’t buy $700 Dolce & Gabbanas, a few million on a private jet and a fleet of luxury gas guzzlers which by the way also cost taxpayers in MY state to clean up the pollution the slimeballs of the 1% insist is their privilege to spew about. Take your case to another court…The verdict is in…Guilty of trying to dump on Middle Class taxpayers for Montana’s huge fracking and Big Oi industry ties. Just why did your RED State redneck politicians in the House who are sooooooooooooo deficit minded hand $13 billion this year to Big Oil? When you are broke, you don’t spend money you don’t have to a too profitable industry like Big Oil. Here are numbers you don’t want…$50 billion to corporations who don’t hire and don’t create jobs in the US…not to mention those 4 tax cuts the 1% upped their wealth by 44% since Bushola was soooo generous with OUR tax dollars. If you can’t run a business without taxpayer help, get the hell out of the business.

          • So rather than discuss your original contention, you jump to another issue based on equally partial truths.

          • My original contention is your original contention. I jump to nothing. All ripples in a stream begin with a single rock thrown.

  2. If that idiot…Lyin’ Ryan, is on the panel, then that is their first flaw. Ryan is probably the stupidest person in Washington…a town full of stupid people.

  3. There is no subject outside of religion perhaps, that lends itself more to demagoguery, than economics. For the Republican Right, who’s entire political strategy has been to obstruct, their instrument of choice has been the economy, and the National Debt. Despite the enormous debt they were racking up under
    Bush, in a healthier economy. Before it was flattened by the worst economic calamity since the Great Depression. Now, Republicans are running around, screaming, hair on fire, Henny Penny, the sky is falling, making their dire warnings, of the horrible consequences of spending money we don’t have, on things their wealthy constituents don’t need. The truth about the Radical Right continues to be, that since they do not run the government, they will not support the government. Or allow a recovery on the opposition’s watch, if they can stop it. That unless a recovery advances their political standing, their policies, or their agenda, they see no advantage in it happening at all. I think to truly understand the place where Republicans reside, is to consider the last time a Democratic President turned a collapsing economy around, they were a minority for more than 20 years! So, governing aganist a robust economy, from their perspective is what they believe they must do. They will deny this, of course. But the facts say different. Exhibit One, is the remedy heretofore used by all parties, Conservatives, Middle of the road, Loony Lefties, whoever, Ronald Reagan. To address, and staunch a contracting economy, or recession, calls for governments to support their troubled economies, and break the downward spiral, of job losses driving down wages, constraining demand, and stalling the economy. So, it’s not by economics, it becomes all about the, “spending problem.” It is only by Republican politics, that it becomes so.
    And, it makes for some outlandish assertions. Such as businesses are not hiring,
    or investing, because of high government debt. I can just hear that business owner who hasn’t made a sale in two weeks, saying, “Gosh if only the National Debt weren’t so high!” It’s ridiculous. But so is balancing the books at the expense of everyone else, except the sector that has raked in 90% of the profits since the Obama recovery began. What we must do, what needs done is, we must put the salve on the sore! Alright, that was gross. Put another way,, whatever is purposed, if it doesn’t put money into the pockets of working people, it’s the wrong idea. And Republicans have been full of wrong ideas for working people, for a long time now.

    • I agree with what you and Dominick have written. I have a simple solution to get the ball rolling: raise the minimum wage to $10.00 an hour over a year and up to $12.00 and hour in two years. That will put more money in the pockets of those that spend everything they earn and will help the lower and middle class which are the groups that have not seen virtually any improvement in their income in 30 years.
      Our economy will never fully recover until the middle and lower class gets a bigger piece of the pie.

      • The minimum wage will not be discovered by Republicans as a tool for helping the economy until the next Republican is elected to the presidency – then it will be gospel.

        They won’t do anything to help our current president improve the economy, even at the expense of the country. Unfortunately, for many of them its “get the black man out of office, then we’ll talk.”

        • That is exactly right….and these very same obstructionists wanted the poster boy for vulture capitalism (Romney) to be elected President…imagine, just imagine, where we’d be had that occurred….beyond frightening….and, as for Ryan I just wish he’d go home to his uber wealthy wife and leave the rest of us out of his ridiculous antics.

      • Kevin Phillips, a former Republican political strategist for Richard Nixon,
        turned columnist, author, and critic of radical Conservatism, uses the term financialization to describe how the U.S. economy has been radically restructured from a focus on production, manufacturing and wages, to a
        focus on speculation, debt, and profits, since the 1980s. Phillips reveals in
        his best selling book, “American Theocracy,” the Right’s long term strategy
        of intentionally running up huge sums of unsustainable debt, to undermine
        the two crown jewels of Progressive Populism, Social Security, and Medicare. Which they vehemently oppose, but realize they will never garner the political support to take them head on, and eliminate them. So the plan is to break the bank, so to speak. Then, come to voters and make the case they must be cut back, until they gradually wither on the vine, until dead. I think if we look at the policies of Reagan, and George W. Bush, in particular, we can begin to see a pattern of proliferate spending, unfunded obligations, and liabilities, with extraordinary and unprecedented, tax cuts
        to corporations, and the wealthiest 1%. Now, these policies may only be judged as failures, when looked at through a lens that assumes the goals of public policy is to improve the economic condition of the Country. However, if the success of Republican economic policy is viewed in the terms of a long range strategy of creating large sums of debt, while essentially strangling the broader economy, for a political goal. Then, we must conclude their policies have been by and large, a roaring success.

        • You might also include in this strategy the idea of a balanced budget amendment. Under a balanced budget like the states, what does the federal gov’t then do when face with a terrorist attack or natural disaster or any number of unknowns? Why squeeze out the entitlement programs, of course.

          • The Balanced Budget Amendment the T-Party was demanding in 2011 debt ceiling standoff, is one of those terrible ideas that low information, and flat tax supporters, love to rally around. Where would we be today if such an amendment existed in in 2008, when the world banking system was nearing collapse? To override the Amendment called for a majority resolution in the House, and a 2/3 majority in the Senate. Then, a separate resolution by the same margins, to recapitalize the financial system before it began coming apart. I think we have to ask, if we want people that think a default on our debt would be no big
            deal. Or would actually improve the markets, as one said earlier. Deciding if it would be worth the money to prevent economic calamity. Or if economic calamity would be a
            good thing too. What it would do, is hamstring the Federal Government, and force States to abandon their Balanced Budget Amendments in their State Constitutions. That are only possible because the Fed has the ability to print, and borrow money. That, or allow their State agencies to essentially fail, and then suffer the enormous financial repercussions of that. One of the results of the GOP’s lurch to the Right has been, to bring these long dreamed of, yet terribly irresponsible pet policies to the forefront as legitimate, or desirable pieces of legislation.

          • I was trying to recall the year, about 1895, after one of those boom, bust cycles that were happening at that time, about every 7/8 years in the Country, And the Federal Government had essentially run out of money, and was forced to come, pretty much hat in hand to a group of New York bankers, and financiers. John D. Rockafeller being the most prominent. And of course J.P Morgan, The Rothchilds, The Plutocrats of that era. It had been the case since the founding of the U.S. That outside the issue of slavery, an issue the framers opted to set aside. Was the failure of those first Americans to create an equatable, and dependable income stream with which to fund the Federal Government. One of Washington’s first acts as President, was to send in troops to put down a rebellion staged by a group of whiskey makers, that didn’t see eye to eye with the Federal Government’s tax policy. And a popular cause within the T-Party today, is to shut down the IRS. And the balanced budget supporters are probably not aware, the Revolutionary War itself was fought on borrowed money. But, I doubt somehow if it would make the least bit of difference to them.

    • Taxes on the uber-rich need to be increased proportionately, (their taxes are not graduated relative to their income) and many of the more arcane tax loopholes need to be closed. The defense budget could be reduced by about 25% (we would still spend more on defense than the next 10 nations in the world, combined!) and responsible social programs increased, to give the working poor an assist to become wage earning tax paying contributors. As my daddy used to say “you’ve gotta spend money to make money”.

      • No doubt about it. This Country needn’t lope along like it has been.
        Unfortunately, only one of our two political parties is functioning
        at all right now. The Right Wingers, never ones to put much store
        in intelligence, have really outdid themselves, and invited in a bunch
        of brain dead, bottom feeders who don’t have the slightest idea
        where they’re at most of the time. Brain rot, dementia, whatever
        they have, it’s making the Country sick. So, first they gotta go.
        Then we can all start picking up the pieces, and cleaning up the
        mess. A lot is riding on the 2014 mid terms.

  4. Al, you’ve drunk the Beltway poison. Entitlements ARE NOT THE FREAKIN’ PROBLEM!!!! The GOP is the problem. The refusal to seek and discuss innovative ways of raising revenue and then investing in infrastructure, education, and securing Social Security, Medicare and Medicaid is what is killing America. What the hell planet are you living on? Why every time is it the least among us that must pay for the grievous sins of those who caused this disaster? Screw you and your pathetic attempt to once more put the burden on those least able to bear it. How about a penny tax per stock transaction? How about getting those Hedge Fund managers to pay full bore on their income rather than the meagre 14%; how about we discard the cap on Social Security taxes, eh? What the hell is wrong with you?

  5. The GOP solution, rob the poor to protect the rich. Cut SS even though it is self sufficient, maybe they just don’t want to pay back what they robed from it in the past. Isn’t it funny how they can continue to give themselves raises every year along with cost of living, but feel seniors don’t need any raises or they need to be reduced, but don’t try to make the rich pay their fair share.

  6. Although the “false equivalency” or “both parties are the same” meme annoys me greatly and it’s pathetic, I’m going to do the unthinkable and use it. Mainly, I’m using it because this Non-Affiliated voter knows it to be true: both parties have some funny ideas about balancing the budget.
    While we know that the greedy and Fascist GOP want to continue to give tax cuts to the wealthy and big corporations and cut or eliminate social welfare programs to balance the budget (which would never happen, btw), the Democrats seem to have the idea that cutting Social Security and Medicare is part of a “balanced” way to cut the deficit. SSMDH…
    Social Security and Medicare are funded through the FICA (payroll) tax we pay while working. The money deducted from your paycheck goes into the Social Security Trust Fund (SSTF), not the general revenues of the federal government, as federal tax payments do. Therefore, and allow me to state this fact in the strongest possible terms I can, SOCIAL SECURITY AND MEDICARE HAVE NOTHING TO DO WITH THE DEFICIT! Please, people, get that last fact through your thick skulls, especially if you’re a GOPer. If anything, SS and Medicare need to be STRENGTHENED, NOT CUT! How you do this is by significantly raising or completely abolishing the income tax “cap” on FICA taxes. Right now, the cap stands at $113,700—-all income past that point is not subject to the FICA tax. This needs to be raised to AT LEAST $250,000 a year if not completely abolished….And, don’t get me started about how the Bush 43 administration “borrowed” $2.75 TRILLION from the SSTF in early 2003 to finance their wars and other deficit spending….
    Here’s the other thing that REALLY needs to happen: the remaining Bush 43 tax policies (and, there are thousands of them, in the form of exemptions, loopholes and corporate welfare) need to be REPEALED! You see, simply raising the rates on the wealthy back to the Clinton-era levels isn’t nearly enough. If the rest of the Bush 43 policies were repealed, a little more than $2 trillion in annual tax revenue would be realized. This would eliminate the annual deficit and create a SURPLUS, which could be used to start paying down the debt. If you cut the highly bloated defense budget in half, that would make the surplus even bigger, providing for more debt payoff..
    Both the Republican and Democratic parties need to get on board with this…while I expect the GOP to continue to rant and rave and insist on the Fascist, Reverse Robin Hood and upward wealth redistribution tax policies of the Bush 43 administration, I’m quite disappointed in the Democratic Party for buying into that BS… SSMDH

    • Amen! I wish the Dems would grow a set and tell it like is and state plainly what truly needs to be done and hands of the “entitlements”!! I honestly don’t know who is dumber! It is so exasperating!!

  7. I don’t think today’s GOP will be happy until they’ve recreated the nineteenth century. Then we will discover, all over again, why so many people worked so hard to create the twentieth century.

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