The Coming Battle Over Spending Cuts And National Debt
http://thedianerehmshow.org/shows/2013-01-03/coming-battle-over-spending-cuts-and-national-debt
The last-minute deal between Congress and the White House prevented the drastic spending cuts and tax increases known as the “fiscal cliff” from taking effect this week. But it also set the stage for even fiercer battles over spending and debt in the months ahead. The automatic spending cuts have been postponed for two months. That’s about the same time as the government's legal authority to borrow money expires. The federal debt ceiling will need to be raised to avoid default. And in March, the budget resolution that funds the government expires. what’s up next for the nation’s finances, and what that could mean for you. Jared Bernstein from the Center on Budget and Policy Priorities, David Wessel of the Wall Street Journal and Chris Edwards from the Cato Unstitute join guest host Susan Page to discuss the nation’s short- and long-term spending and debt challenges.
Guests
Jared Bernstein
senior fellow at the Center on Budget and Policy Priorities, and former chief economist and economic policy adviser for Vice President Joe Biden.
Chris Edwards
economist and editor of DownsizingGovernment.org, Cato Institute.
David Wessel
economics editor for The Wall Street Journal and author of "Red Ink: Inside the High-Stakes Politics of the Federal Budget."
Comments
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These T-Party/Republicans should scare the weebee jeebies out of every American. Between Corporations cutting the quality of the goods we buy,raising prices,or reducing the size of the goods we buy and pay for. Here are the T-Party/Republicans demanding we cut the things we`ve paid for as well. I paid 50 years into Social Security,40+years into Medicare and Medicaid,and these jerks want to cut,downsize,or reduce the quality of what I/WE have paid for. At the same time they want to protect he real waste. The bloated military. The largest government teat there is.Something like 52% of all spending goes there. Where is that deduction from paychecks?The privatization of the military has nearly tripled the cost in only a decade. My/our enemy is the NRA gun nut.Put the army at schools,not around the globe. Let the Corporations pay for their own security. Don`t need the largest navy on the planet for the protection of Chinese made goods. WE don`t need the bloated navy for goods made in the U.S.of A..
Reagan raised the debt limit 17 times in his eight years.Where was the outrage....THEN OR NOW ?
All I hear is the NeoNutzi outrage at Obama.Anything Obama does the NeoNutzi`s oppose,including the recovery from the 'Great Bush Recession'. These radicals have done everything including creating the reason to downgrade our credit rating,for NO good reason,and creating the "Fiscal Cliff". A 100% politically manufactured crisis made by the NeoNutzi`s.
Modern "outrage" is so overrated. Americans suffer from Outrage Fatigue.
Every pronouncement from politicians and media, especially applied to Congress should be met with a resounding "Ho Hum".
I agree that the military-industrial complex takes more of its share of our budget and needs to be cut-back drastically. America's future conflicts need to be fought with brains - not brawn. Starting with the Korean War, we have either lost (Vietnam) or be taken into a stalemate (Korea, Afghanistan, Iraq) in any war of consequence. Skirmishes in the Balkans don't count.
HOWEVER, for those, such as Clifford, who think that what they have paid into Medicare is equivalent to what the average elderly American receives in return during the last years of medical care is erroneous. Neither Social Security or Medicare was designed for our society of octogenarians demanding that they be taken care of in their latter years. Simply put, it is an unsustainable system.
How did we get in this mess? The reasons are endless: (1) a folly that the government is responsible for taking care of you in your old age despite this never being the case in any society until the 19th century; (2) an unrealistic belief that retirement is "golden" which never existed except for a generation of Americans lucky enough to retire from 1950 - 1990, (3) skyrocketing medical costs due to the inability of many to accept that death is inevitable therefore seeking medically inappropriate care or even futile care - anyone willing to talk about PSA and mammogram screening futility? , . . . . . .
Life is tough. The end of life is even tougher. We should care for our fellow man, but to fully ENTRUST that care into the hands of government or our neighbor is foolish. For those still young, plan ahead wisely.
Obama should hold the line on the rich (who even at the Clinton era tax rates are paying less than half what they paid in America's economic hey day period 1940's-1970's).
The poor and working classes should not carry the burden for the ultra rich and finance captitalists who got us into this deep recession, and government should be more interested in protecting the common man rather than the billionaire.
Tax the rich, regulate the banks, close tax loopholes (collect the trillions from tax shelters), de-fang the oil company lobbyists, and end these expensive military safaris. And while we're at it, we should incentivize national industry to stay in this country to protect the prospect of jobs, and increase spending on education so that we can grow our own future.
It's time to say goodnight to Milton Friedman and the absurd economic policies of the Reagan/Clinton/Bush era.
What a pessimistic, not to say cynical, view of life and death. I guess we should just set up those death panels and decide whom we want to save and whom we can flush out of life.
John Doe wrote:
"Obama should hold the line on the rich (who even at the Clinton era tax rates are paying less than half what they paid in America's economic hey day period 1940's-1970's). "
False. The high rates during some of that 40 year period were published rates but no one actually paid them.
"The poor and working classes should not carry the burden for the ultra rich and finance captitalists who got us into this deep recession"
False. The housing bubble started by the FG meddling in the housing market and the repeal of Glass-Steagall got us into this mess.
"Tax the rich"
No. Tax everyone. Everyone should pay something.
"regulate the banks"
To a degree, yes.
"close tax loopholes (collect the trillions from tax shelters), de-fang the oil company lobbyists, and end these expensive military safaris."
Yes, yes, and yes.
"And while we're at it, we should incentivize national industry to stay in this country to protect the prospect of jobs,"
The only way to do that is to cut taxes to businesses. Unless you think we sould give them subsidies to stay here?
"increase spending on education so that we can grow our own future. "
If it would work, sure. But it hasn't. Department of Education is a protection racket for the AFT and a miserable failure. Return the responsibility for education and the money for it to the states.
Ernest wrote:
"How did we get in this mess? The reasons are endless: (1) a folly that the government is responsible for taking care of you in your old age despite this never being the case in any society until the 19th century; (2) an unrealistic belief that retirement is "golden" which never existed except for a generation of Americans lucky enough to retire from 1950 - 1990, (3) skyrocketing medical costs due to the inability of many to accept that death is inevitable therefore seeking medically inappropriate care or even futile care - anyone willing to talk about PSA and mammogram screening futility? , . . . . . .
Life is tough. The end of life is even tougher. We should care for our fellow man, but to fully ENTRUST that care into the hands of government or our neighbor is foolish. For those still young, plan ahead wisely."
Brilliant post, Ernest. Thank you. Brutally honest, but starkly true. Great insights.
Clifford wrote:
The bloated military. The largest government teat there is.Something like 52% of all spending goes there.
In 2011, 19% of spending went to the Department of Defense. 43% went to Medicare, Medicaid, and Social Security.
Broken Record Time?
. Social Security: eliminate the cap on FICA taxes and Social Security is solvent for 75 years or so (my source is Senator Sanders.) And that will not hurt the lower and middle class!
. Medicare - I guess we need to raise money there, but raiding the eligibility age should be a non-starter. People that work with their bodies - miners, roofers carpenters, electrician etc - should be able to retire and receive medicare.
. Defense - surely we can find some cuts, as many others suggest.
. Foreign Aid - though it always prompts NPR and others to say: "Do you know how little our Foreign Aid is . . .? " I recommend a cut - say of 10 billion/year!
. Mortgage deduction: cap it but do not eliminate it.
. Charity: Cap it as well, say at 25,000 per year.
. And if we can't do the above: across the board cuts are fine by me. At least some "good" will come of it. Critics say it is mindless to make a cut that way: yet no other cuts have been forthcoming. . . . Maybe just do it?
Done for now!
Steve
"Old people screwing young people more and more..." ???
Really? We've paid in $481,000 over 38 yrs of working through 2012, we're still working and paying in, and we've yet to collect a dime of that money.
Who exactly is "screwing" whom here?
Rather than "Burning the Furniture" with across the board cuts why not apply a more contemporary approach to cost containment by applying "Lean" principles to spending.
Re-visit all contracts to endure competitive terms. Look at how money is spent and the behaviors which lead to waste. It may sound like this would make a small impact but many companies have employed this approach and seen as much as 10% reductions in cost. This before looking at reducing human capital and/or reducing capabilities.
This is certainly important, but how about also covering the fact that the House let the Violence Against Women Act expire? I had to find out about it on Twitter. I know the Republicans want spending cuts, but is the Act that helps battered women/spouses, rape victims, etc, really the place to start?
I respectfully disagree with Mr. Edward's thesis - that government spending is the main/only issue.
First, the typical federal individual tax rate has been around 18% for the past 50+ years. In the past 10 years the rate has been significantly less than 18%. That tax deficit must be made up. Indeed, as the age of our population increases, there will even more need for health care and retirement support.
Second, health care spending - private and public - has been rising at about 6% per year for the past 20+ years (with GDP rising at 3%). That is the major spending issue. We can't continue to spend on health care at a rate higher than our incomes' increase. The solution is not to cut back on health care for our citizens - it is to cut back (drastically) on the rate of health care spending increases and to trim existing health care costs.
We have been fed on the ideas of "trickle-down economics", "less is more", and "the best things in life are free", that we have come to the conclusion that they are true.
They aren't.
"You get what you pay for" is the reality. The reality is also that we must pay more taxes. The people who believe we can cut taxes (and everything else) and maintain our current standard of living are very badly deluded. But that's so typical of people in this era; our desire to believe even lies if they make us feel good.
I'm old enough to have known people who were born and lived in the 19th century. They didn't worry about health care, or Social Security, or Medicare; there wasn't any. The didn't worry about buying a home; they built their own homes. They didn't worry about the cost of groceries; they had to grow everything they ate. When they got sick, they knew that they would either get well, stay sick, or die. How many people today have had to live in a house, in the winter, where there was no heat at night?
If we aren't willing to PAY for what we have, then this is what we have to look forward to in the future. These people who tell you differently are LIARS!
But there's no law that I know of that requires you to believe the truth. But you will believe it when it happens to you!
Stop calling Social Security an "entitlement." it's an earned benfit. We all paid into it. It's an entitlement only to the extent we're entitled to it. Calling it an "entitlement" links it in the public consciousness like welfare and that's neither accurate nor fair.
Why has nobody ever mentioned the idea of a WAR TAX dedicated to completely fund our (currently unfunded) wars?
How different would the budget look if 100% of our war costs were paid? Perhaps we'd be less eager to enter into wars of choice if we actually had to be responsible and PAY FOR THEM?
Some of these comments are totally stupid. Only an idiot would believe that people can save for the future with minimum wages. Get Real!
Kudos to all your guests, You have all pretty clearly outlined the problem. Now, how can we get the Congress to enact the neccessary measures to get it done?
The flip side of budget costs is the economy. Has anyone approached cutting programs that have less effect on the economy?
It's not just the amount we save by making a cut. If the program cut reduces future revenue by more than it saves by stifling the economy then that cut will do more harm than good.
Countries like Canada are more able to balance their budgets because they didn't start two wars to the tune of a couple of TRILLION dollars and pay for it by cutting taxes by a couple TRILLION more!!!!!!!
Great show. The guests are very good with the exception of Chris Edwards who undermines his arguments with his continued comments about the US going the way of Greece.
Chris Edwards, exactly how do you expect young people to save enough money to retire without a safety net? Those who are not think tank pundits, who do physical labor jobs often cannot work much past the age of 60. The people who landscape your yard, clean your house, cut your hair, assemble your car/plane/train all have ergonomic related problems from years of constant use. And if you make the median wage of around $50k and have a family it's nearly impossible to save enough to retire. Do you really expect people to work until they die, because that's what will happen without social security.
as far as SS if they removed the cap and controlled benefits to need (horrors the rich would pay more) that would be a wonderful start OH and don't include SS in the general budget
1. Cuttting Social Security would hurt the economy by taking money away from consumers. Consumer spending accounts for about 70% of our economic activity.
2. As a "young person" who is currently working and funding Social Security for my elders, I don't understand how cutting their benefits would help me.
Would I not become personally responsible for shouldering the costs of supporting my retired grandmother and my four retired parents/in-laws???? For those of us who live paycheck to paycheck (unlike these guests), that isn't a helpful solution.
what has happened to the billions of dollars that has been paid in payroll taxes in the past? it is trillions more than has been paid out to the beneficiaries. if benefits are cut it is nothing more then I transfer from the working people to the rich
I say that if you want to balance the budget and have a surpluss in no time at all without having to cut a lot of spending we should start taxing all conturbutions to our represenatives in Washington.
Then put a tax on the money when they spend it on their campains. We just had the most money ever spent on campaings ever.
Kelly, Conservatives NEVER want to talk about that war of choice and the tax cuts Bush gave to pay for that war..Yep a war tax and having a draft and requiring eligible member of Congress families serve would put an end to wars based on lies and hubris
HonestAbe said, "Modern "outrage" is so overrated. Americans suffer from Outrage Fatigue. Every pronouncement from politicians and media, especially applied to Congress should be met with a resounding "Ho Hum"."
HonestAbe: No, we should stay outraged, which should be spurring us to action, because the things Congress does or does not do affect us so negatively. Chris on this program has made outrageous remarks about the old getting much too much versus the young. He is wrong, but he is part of the party that wants to get rid of Medicare and Social Security, and if this party is able to hold sway, you will see the end of these programs. The American people don't want this to happen, but it will if they are not outraged enough to protest.
Chris Edwards is one of those who isn't subject to what you mention; just one more person out of touch with reality.
The amazing thing is there are those who believe what he says. But what else can you expect from the Cato Insulated-from-Reality Institute.
Steve on Plum Isle wrote:
"Social Security: eliminate the cap on FICA taxes and Social Security is solvent for 75 years or so (my source is Senator Sanders.) And that will not hrt the lower and middle class!"
False. Estimates for SS liability during that time period are between 60T and 100T+. My source is Rep. Ron Paul.
Who's going to pay for that?
By the way, DR Show has started doing some heavy-duty censoring of content which is why you see so few posts from folks with conservative viewpoints. A few posts is about it based on login and IP address.