One reason why the fiscal cliff negotiations haven’t gotten very far, at least in public, is that Republicans are hung up on the matter of exactly what they’re trying to achieve. It’s not that they don’t know the answer — they want deep cuts to entitlement spending — but rather they don’t want to advertise it, since cutting Medicare, Medicaid, and Social Security is unpopular and therefore politically costly. But it’s hard to move forward if you’re not willing to state your demands, and so things have bogged down since President Obama opened the negotiations by asking for $1.6 trillion in tax increases and deduction caps.
For Republicans, entitlement cuts are a long-sought-after prize, but one that’s difficult to openly acknowledge. Over the years, Democrats have reliably pursued a strategy known as “Mediscare” — frightening seniors by dramatizing how such cuts would affect them. Last year, for instance, television ads attacking supporters of the Republican House budget famously showed a congressman shoving a wheelchair-bound granny off a cliff.
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Another liberal pundit pushing the same falsehood: A choice between tax increases on the rich, or cuts in entitlements. How stupid do the these liberals think you are? There is no way that raising taxes on the rich would add more that a rounding error's worth of revenue. The Trilllion dollar deficit is there because of the Obama spenfing binge that began in 2009, and continues to this day, coupled with a flatlining economy. Spending cuts, and economic growth are the only serious ways to reduce the deficit. Tax hikes are anathema to economic growth; it is politics which are pushing the tax hike agenda. NEW PARAGRAPH: Entitlements represent the future of our deficit. Structurally, it is a looming disaster, and without ways to fund the wave of baby boomers entry into medicare, we will go bankrupt. But again, politics will drive the debate, as any attempt to fix this problem will create a new chance for "mediscare" advertising.
Richmond's comments make perfect sense. Taxes could be raised on the rich (and everyone else) and the increased revenue wouldn't be nearly enough to solve our long-term fiscal problems. Entitlements must be addressed or we're going to end up like Europe.
If the Republicans believe entitlement cuts are necessary then they should be willing to lay on the table what cuts they desire. If they believe the defense dept. is untouchable they should say why. The same is true for the Dems.? The problem for the Republicans is that they are promoting an idea that they like but the public despises. Rather than be true conservatives and express an argument that says either one must pay for entitlements or reduce them they hide behind the overall federal budget.
"Richmond" makes a factual statement. Tax increases for the wealthy are not enough to reduce the deficit over the long term. Naturally he goes on an Obama binge that fails to recognize other issues but his basic premise is true. However, the public does not wish to see these cuts. So either caps on taxation must be lifted or means testing implemented. He and the Republican Party can argue all day for "cuts" and these cuts will be rejected all day and night. So the time has come to sing a different song. The Republicans need to find a new tune.
The 2010 defense budget was $694billion. Medicare, Social Security, and Unemployment in 2010 cost the US $1.984 TRILLION and were over 58% of annual expenditures. If you think cutting the defense budget is as important as reforming entitlements, you're nuts. What if we cut 10% off of both, saving $198billion in entitlements and 68billion in defense.
bos-guy22, take 20% off your entitlement spending. Social Security has its own dedicated funding source, same for most of Medicare. Too often the Republicans want to use revenue dedicated for a particular program and use it for a totally different purpose.
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Taxes must go up across the board. low income, middle income, upper income tax. Raising taxes on the top two % is not going to do much of anything raise revenue.
Raising taxes on the rich is but one piece of the puzzle. We need to add marginal rates and make the tax code strongly progressive, close tax loopholes that shelter income, raise capital gains taxes, raise estate taxes on the super wealthy, end tax loopholes for corporations, end absurd tax subsides for Big Oil, Big Ag, etc., place a rising fee-and-dividend tax on carbon, tax financial transactions, and most of all, get money out of politics.
So you're ok with not curtialing spending at all? Just letting entitlement programs chug along as they are?
There are a lot of things Republicans find "difficult to openly acknowlege." Ha, ha. Their whole platform and entire political strategy is an attack on ordinary people, sane public policy, freedom, and democracy itself. Hence the fun in watching their pretzel logic where "right-to-work" is Orwellian for "destroy unions to disempower workers," the amazing absurdity of witnessing Mitch McConnell filibuster his own bill, or Barton apologizing to BP for the government's attempt to get some restitution for the tragedy of the Gulf oil spill.
This is their essential problem: "For the time being, Republicans are ignoring this dissonance between their own desire and what the public is likely to accept." That because public well-being is not what they serve, and CEOs, hedge fund managers, and the uber rich are their real constituency. Think about what that means, that our elected officals DON'T serve the public. This "dissonance" effects many issues and reveals the increasing gap between what the public wants, like action on global warming, and what the GOP's corporate masters want, which is externalizing costs onto the public. This "dissonance" is the difference between democracy and fascism.
Are Americans shaking off the spell of rhetoric and spin, and seeing the truth? I hope so.
(And I hope there aren't too many typos and misspellings: spellcheck is not working is this comment box)
I am more concerened with capital gains taxes - that will dampen investment and this money has alreqady been taxed once.
Also, Obama's tax increases are not going towards debt reduction but rather MORE spending. This means these programs grow even bigger and will be harder, if not impossible, to curtail in the future.
Capital gains are betting on the stock market and winning. They are NOT taxed more than once. They are not corporate profits that MAY have been taxed already. They should be taxed like any other income.
Let me clear this up for you, GBV. When an investor buys a stock, he or she buys it with after-tax money. In other words, they've already paid taxes on the money they'll use to buy the stock. If they sell the stock at a profit, they'll pay taxes on the gain (usually 15%). So in fact, capital gains taxes are an example of double taxation.
"begolfing" Come on seriously? You will stop investing or cut back on your investments if the rate goes up. I won't. I make money on them whether they are taxed at 5 percent, 10 percent or 20 percent, it really doesn't matter. Regardless of the tax rate I have more money than I had when I started. So dampen investment? I don't think so we still make money, like making money and it won't change what I do.
I have never understood that argument. You won't try to make more money because it will cause you a little more to make it? Really? So you'll take in less income in order to pay less in taxes. Well,not me I still like the gains.
But wherw is the growth going to come from? The economy is awful. Plus, tax revenues INCREASED every time Cap gains were reduced.
and yet - the US accumulated a $292 billion budget deficit compared to $236 billion a year ago - Zerohedge
:) http://www.investors.com/editorial-cartoons/michael-ramirez/636717
"begolfing" What economy is terrible? Just because you say it is terrible it doesn't make it so. The market is doing just fine. Unemployment is coming down, perhaps not as fast as we'd like but it is moving forward. If both parties get off the stick it will grow even faster. Raise the rates, get some stability there and get moving. Enough with the political nonsense. My federal taxes are the lowest they have been in my lifetime, a slight increase won't kill me.
There is political yacking and economic reality and right now they don't match up. The tax increase won't cost jobs nor investments. Nor will tax increases fix the deficit, sp lets just quit with the silly season and get it on.
our economy is awful. Unemployment only went down due to the participation rate. Growth is anemic (see Bernakes GDP forecast from today), the baltic dry index at 2008 lows, small business outlook, manufacturing and consumer confidence, and on and on and on. Obama's answer raise taxes and incxrease spending.
Well "begolfing" we won't agree on the state of the economy, that seems obvious. I didn't read Bernanke calling it a disaster. He expressed his concerns regarding the effects of current actions. We all know if we settle this particular issue the economy will pick up even further.
But you avoided my question. Will you not invest becasuse of increased capital gains tax. I certainly will continue.
And what are Democrats are trying to achieve, Joshua? Actually help the economy, or just score political points? Ben Bernanke and the Federal Reserve's actions to day at the FOMC meeting today tells everybody thst the economy will be in a shamblesand there will be few newjobs for a long, long time.
"bos-guy22" 10 percent off of defense, medicare and discretionary works for me. I tend to seperate out SS even though it was erroneously dumped into the total budget. But sure ten percent works for me.
Joshua and the Globe say "For Republicans, entitlement cuts are a long-sought-after prize, but one that’s difficult to openly acknowledge. Over the years, Democrats have reliably pursued a strategy known as “Mediscare” — frightening seniors by dramatizing how such cuts would affect them. Last year, for instance, television ads attacking supporters of the Republican House budget famously showed a congressman shoving a wheelchair-bound granny off a cliff"
Ok, so the purpose of this uncalled for Globe opinion is to say that Democrats actually have NO plan to help seniors, and they don't need a plan. Rather the Democrats Plan" is to remain in "Campaign Mode" for the next 4 years, and blame Republicans for everything. If there's no snow this winter, blame the GOP. If there's too much snow, blame the GOP. You voters gave us a "Mandate" to go golfing.
And the Globe's "Plan" is to PRETEND to offer advice to Republicans. To which the GOP should tell the Globe "We don't need your "Advice". If in the unlikely chance that we want some advice, we'll ask you for it".
And, on another note, after the FOMC meeting minutes today, it was apparent that the FEd was trying to help Obama by "juicing up" the economy, by announcing that it will continue to "Buy" Treasury bonds that itself created, in a money printing scheme. Markets briefly went up, then the S&P fell back BELOW the start of the day. Wall Street (whose stock is owned by everybody, including the "Middle Class) said The White House's economic plan is nothing but Smoke and Mirrors. Just tax everybody. Fed income tax, state tax, sales tax, property tax, energy tax, ObamaCare tax. And if you have anything left, the estate (or death tax).