Do you agree with the Republicans or Obama on the deficit reduction deal?

Submitted by jimmyle on July 12, 2011 - 9:30am
4 trillion dollars cut for 10 years, absolutely no new taxes.
32% (19 votes)
4 trillion dollars cut of which 80% is spending cuts and 20% increase in revenue with taxing the rich and eliminating loopholes.
68% (40 votes)
Total votes: 59
Submitted by jimmyle on July 12, 2011 - 9:40am.

I think the republicans are being very disingenuous. During the Bush years even during the bubble years with large revenues, how many times they voted to increase spending and raised the debt limit ceiling? Suddenly they are spending hawks again. They want large cuts with no cut in the $700 bil defense budget and no revenue increases even though the rich are paying much less tax even compared to the Reagan Era. I think it is completely irresponsible to think that you can reduce the deficit on cutting social security, and Medicare alone.

No I am not an Obama supporter and didn’t vote for him nor did I vote for Sarah Palin. I don’t like Obama’s staunch support for labor unions but I am fully behind him on this budget cutting issue. I think the Republicans are just hope that Obama fails even if it costs the country dearly.

Submitted by an on July 12, 2011 - 9:41am.

This is what Obama said about debt ceiling in 2006 as a Senator:

obama wrote:
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion.That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.

Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006

Submitted by jimmyle on July 12, 2011 - 9:51am.

Speech is speech, reality is different. I totally didn't like Obama giving incentives for home buyers, giving benefits extensions to the unemployed but realistically if you inherit a federal budget with $600 bil (2007) in the red and then revenue dropped by another $400 bil (2008 - now) and plus all the bailouts (that republicans also enthusiasstically signed on) what can you do to reduce the deficit? I think Obama might have spent $100 bil more than he should but the rest was unavoidable.

Submitted by an on July 12, 2011 - 9:59am.

If you want to increase tax revenue, why attack a some group and not others? Why not do real reform and remove most if not all deductions and lower tax rates.

So you're saying that since both party spends a lot, no one can speak up about spending now, since it's hypocritical?

Submitted by jimmyle on July 12, 2011 - 10:34am.

I am all for removing all deductions and lower the tax rate. Why should GE pays no income tax? I and my wife are both Engineers and I think we belong in the group that pay the most taxes (as a percentage of income). The poors in this country don't really pay tax and the rich pays much less tax because most of their income is in capital gain. But I don't think it is feasible to cut government spending 30% (with no cut in defense) and not drastically affect the economy. Why increase tax on the rich. My take is that the rich with their influence on the politicians and government has created a society where the gap between rich and poor is becoming larger and larger. I believe this is not good for America's stability in the long term. If you think that increasing rich-poor gap is not the problem then it is hard for you to agree with me.

[quote=AN]If you want to increase tax revenue, why attack a some group and not others? Why not do real reform and remove most if not all deductions and lower tax rates.
[quote]

Submitted by meadandale on July 12, 2011 - 10:51am.

You don't really think that you can throw his own words back at him now do you?

That was because Bush was in power and he WAS an ineffective leader. Now Obama is in office and since he's so awesome, the need to raise the debt ceiling has nothing to do with his ineffective leadership and everything to do with the Republicans (again).

AN wrote:
This is what Obama said about debt ceiling in 2006 as a Senator:

obama wrote:
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion.That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.

Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006

Submitted by jimmyle on July 12, 2011 - 11:12am.

Actually I think if McCain is the president the deficit might be a little bit lower but not that much lower (might be $1.3 tril instead of $1.4 tril). These Presidents are not Gods and they can't increase nor reduce the deficits much by themselves. What ever harm done to the nation in the past already happened and I believe both Republicans and Democrats are at faults. But I really think to solve the problem you need to be make compromises. You really think polically we can cut social security and Medicare alone? Even if the Republicans agree some increase in tax I am not entirely sure if Obama can convince the Democrats to sign on. But I think with some increase in revenue, there is much better chance that we can make cuts in medicare and social security.

Again, I am not a republican nor democrat. I fully support the California Republicans stance on no increase in tax because I want to see cuts to the public employees pension and pay first.

meadandale wrote:
You don't really think that you can throw his own words back at him now do you?

That was because Bush was in power and he WAS an ineffective leader. Now Obama is in office and since he's so awesome, the need to raise the debt ceiling has nothing to do with his ineffective leadership and everything to do with the Republicans (again).

AN wrote:
This is what Obama said about debt ceiling in 2006 as a Senator:

obama wrote:
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion.That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.

I really worry about my 401K if America defaults. I don't have many options. It is bonds, domestic stocks and a few foreign stocks. I just move most of my 401K to foreign stocks because I think US stocks and bonds will tank if we default.

Senator Barack Obama
Senate Floor Speech on Public Debt
March 16, 2006

Submitted by Coronita on July 12, 2011 - 11:24am.

Give it up people. No good politician. Neither parties can balance a budget, nor to they really want to....

But hey, at least all the predictions about social security not being paid is becoming self fulfilling. Must suck for people that were counting in these entitlement programs that no longer can be paid....

http://www.cnn.com/2011/POLITICS/07/12/d...

"President Barack Obama, in a CBS News interview scheduled to air Tuesday night, warned that, absent a deal, he can't guarantee older Americans will continue to receive their Social Security checks.

"There may simply not be the money in the coffers to do it," Obama said, according to excerpts released by CBS."

Submitted by briansd1 on July 12, 2011 - 11:48am.

jimmyle wrote:
I think the republicans are being very disingenuous.

Yesterday on the Newshours, I heard Peter Roskam, R-IL pretty much say that raising the debt limit is the only compromise Republicans are willing to make (what cockamamie compromise is that?!).

The Republican are not dealing in good faith, plain and simple.

http://www.pbs.org/newshour/bb/politics/...

Submitted by briansd1 on July 13, 2011 - 10:07pm.

I'm loving the brinkmanship on the debt limit.

What should have been a routine thing (the debt limit has been raised 74 times) was turned into a political charade by the Republicans.

Their intrangisence painted the Republicans into a corner and they can't get out.

“Our problem is, we made a big deal about this for three months,” said Senator Lindsey Graham, Republican of South Carolina.

“How many Republicans have been on TV saying, ‘I am not going to raise the debt limit,’ ” said Mr. Graham, including himself in the mix of those who did so. “We have no one to blame but ourselves.”

http://www.nytimes.com/2011/07/14/us/pol...

Anyone want to take odds on the winner out of this impasse?

Submitted by briansd1 on July 13, 2011 - 10:17pm.

AN wrote:
This is what Obama said about debt ceiling in 2006 as a Senator

What Obama didn't say is that he would not vote for a debt limit increase.

Congress has the power of the purse. The debt is money that Congress has spent already, so they should simply live up to their commitments and pay for the spending.

I'm sure Republicans who said that they would not increase the debt limit will eventually have to do quite the opposite.

Submitted by an on July 13, 2011 - 11:56pm.

briansd1 wrote:
What Obama didn't say is that he would not vote for a debt limit increase.

He didn't say it, but he didn't vote for it. What make the debt ceiling more important today vs 2006 that make him want others to vote for it while he didn't vote for it then? The most interesting thing he said in that speech was his opening sentence:

obama wrote:
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure.

briansd1 wrote:
I'm sure Republicans who said that they would not increase the debt limit will eventually have to do quite the opposite.

I'm sure they'll eventually have to vote for it too. They're both the same.

Submitted by jimmyle on July 14, 2011 - 8:32am.

I believe cutting social security and medicare benefits is similar to a tax increase on the middle class because that money come out of my paycheck and yours every two weeks. The cuts will amount to a 10% tax increase on the retirees. The rich on the other hand are much less reliance on social security and medicare so a small tax (1 to 3 percent) increase on them makes it more fair. I think if the republicans really want to solve the debt problem they should sign on to this deal especially when they are getting a 4 to 1 or 5 to 1 ratio on spending cuts and tax. If they don't sign on to this deal it will show to the country that they just want Obama and the country to fail.

Submitted by an on July 14, 2011 - 9:17am.

If you believe that ss and Medicare benefits are taxes, then all the seniors who are getting them are getting a tax cut compare to their parents because they're living longer today. Also, since everyoneis paying into those programs and everyone expected to be paid from those program, it would be a tax increase on everyone. Last I heard, it was 3 to 1, not 4 or 5 to 1. Both sides have different solutions for this problem and both sides don't even agree on the magnitude of the problem. If your logic is that if you don't vote for the debt ceiling increase is a sign that you want this country to fail, then Obama wanted this country to fail in 2006. BTW, I don't agree with that view at all.

Lets have an analogy to everyday life. It's like a family who bought too much house in 2005 and cars. Then one spouse lost their job. Do you go on and spend as if nothing has changed, or do you file for bankruptcy, or do you cut back on everything else and get a loan mod? Raising the debt ceiling is like getting another credit card, cutting ss and Medicare is like getting a loan mod, and city other things is like reducing your discretionary spending. How would you deal with this problem in your own home?

Submitted by GH on July 14, 2011 - 9:39am.

Seems to me no matter what we do there is not enough money in the universe to pay our debt and obligations.

We print or default - simple as that!

Medicare costs have gone up many times in the last 30 years and seniors are living longer than ever which means are costing many times what they were projected to. This is the basic crux of our current problems today. (I am entitled according to my SS report to many many times what I paid in assuming I live to an average age, and it appears should have been paying some 50%+ of my income just in Social Security tax over my life)

Yeah, I know we don't go there ....

Keep in mind, even IF we tax the daylights out of "the rich" whoever they are, overall taxable revenue is still falling and contrary to popular press, apart from a few high profile billionaires like Bill Gates, the group in the $250k a year bracket is drying up fast. Thus even with tax increases we need to assume overall tax revenue decreases.

A tax I would personally support would be a 100% tax on manufactured imported goods. Sure the cost of a big screen might go up, but then maybe the job making it would return here and we would have a "taxable" worker instead of a 99er.

Submitted by jimmyle on July 14, 2011 - 10:26am.

Not really,

How much is Medicare worths annually for each senior? Lets say $10,000. If you cut this to $8,000 then it is a huge cut for a person with $50,000 annual income compared to a person with $2,000,000 annual income.

In addition, the maximum SS benefit is $2,366/month. If you cut this 10% to 20% it is a real cut for seniors who depend on this. But this is nothing for a rich person who makes most of his money from capital gains.

So essentially this is a huge cut for the middle class and very minimal cut for the rich if there is no tax increase on capital gain.

I already moved all of my 401K money to foreign stocks. I believe US stocks and bonds will tank next month. My 401K account doesn't give me the option of buying precious metals so foreign stocks is the best I can hope for.

AN wrote:
since everyoneis paying into those programs and everyone expected to be paid from those program, it would be a tax increase on everyone.

Submitted by Zeitgeist on July 14, 2011 - 10:31am.

Debt clock live:
http://www.usdebtclock.org/

Submitted by jimmyle on July 14, 2011 - 10:40am.

I believe the rich have brain washed the politicians and many of us in supporting policies that benefit them more and more. Currently top 1% account for 24% of all income compared to 15% in the 1980s and there is nothing to stop this trend. As this trend increases, society will become unstable. US policies that support globalization is one cause of this as companies move production overseas to increase profit while US workers lose jobs. But one incredibly difficult to understand reason is that many in the middle class continue to support tax reduction for the rich as a result they rich as a whole is paying much less tax now compared to the Reagan era. Tax on the middle class is also lower when compared to the Reagan era but there are hidden taxes when you have cuts on schools, and colleges which the middle class rely on much more than the rich.

Submitted by briansd1 on July 14, 2011 - 10:43am.

AN wrote:
How would you deal with this problem in your own home?

The debt limit is an arbitrary construct that's not even legal because by spending, Congress implicitly raised the debt limit. Congress passed the budget so they should appropriate the funds.

At home, households can borrow until the markets decide to no longer lend to them. The markets (lenders) put a limit on the amounts households can borrow.

The free markets, right now are very eager to lend to the US government. There is no debt limit until the free markets demand higher interest rates and refuse to roll-over existing debt.

Submitted by UCGal on July 14, 2011 - 10:49am.

What I don't get - why isn't either side saying "hey, lets go with the Simpson Bowles bi-partison plan!". It spreads the pain pretty evenly - everyone got hit.

You've got the dems saying the entitlements are untouchable. You've got the GOP saying anything on the revenue side is untouchable... It's unresolveable.

But there's this plan out there that can save face for everyone if they'd just vote on it. It makes cuts to social programs and entitlements. (Painful to the dems). It restructures taxes (painful to the GOP)... In other words - it's a compromise that no one loves - but makes some moves in the right direction.

Neither side will get what they want and solve the problem.

Submitted by jstoesz on July 14, 2011 - 10:53am.

UCGal wrote:
What I don't get - why isn't either side saying "hey, lets go with the Simpson Bowles bi-partison plan!". It spreads the pain pretty evenly - everyone got hit.

You've got the dems saying the entitlements are untouchable. You've got the GOP saying anything on the revenue side is untouchable... It's unresolveable.

But there's this plan out there that can save face for everyone if they'd just vote on it. It makes cuts to social programs and entitlements. (Painful to the dems). It restructures taxes (painful to the GOP)... In other words - it's a compromise that no one loves - but makes some moves in the right direction.

Neither side will get what they want and solve the problem.

I would support that.

Submitted by briansd1 on July 14, 2011 - 10:55am.

UCGal, Obama said that he is willing to consider painful cuts to programs dear to Democrats.

The Republicans are unwilling to budge even on closing tax loopholes for corporate jets. They claim that raising the limit in itself is enough of a concession.

Maybe while on vacation you did not follow the politics.

Actually, Boehner was willing to deal and a grand bargain that's good for the country.... but Cantor is the just-say-no guy.
http://www.washingtonpost.com/business/e...

Submitted by Aecetia on July 14, 2011 - 11:06am.

This says it all:
"Just a little reminder to those of you still fooled by the congressional and presidential sideshows: Neither the Democrat nor the Republican plan cuts the deficit."
http://letteradicorsa.wordpress.com/2011...

Submitted by an on July 14, 2011 - 12:27pm.

UCGal wrote:
What I don't get - why isn't either side saying "hey, lets go with the Simpson Bowles bi-partison plan!". It spreads the pain pretty evenly - everyone got hit.

You've got the dems saying the entitlements are untouchable. You've got the GOP saying anything on the revenue side is untouchable... It's unresolveable.

But there's this plan out there that can save face for everyone if they'd just vote on it. It makes cuts to social programs and entitlements. (Painful to the dems). It restructures taxes (painful to the GOP)... In other words - it's a compromise that no one loves - but makes some moves in the right direction.

Neither side will get what they want and solve the problem.

I totally with their proposal.

Submitted by jimmyle on July 14, 2011 - 12:49pm.

I think Obama is saying that he is willing to make cuts in social security and medicare but Republicans are not willing to make any compromise.

AN wrote:
UCGal wrote:
What I don't get - why isn't either side saying "hey, lets go with the Simpson Bowles bi-partison plan!". It spreads the pain pretty evenly - everyone got hit.

You've got the dems saying the entitlements are untouchable. You've got the GOP saying anything on the revenue side is untouchable... It's unresolveable.

But there's this plan out there that can save face for everyone if they'd just vote on it. It makes cuts to social programs and entitlements. (Painful to the dems). It restructures taxes (painful to the GOP)... In other words - it's a compromise that no one loves - but makes some moves in the right direction.

Neither side will get what they want and solve the problem.

I totally with their proposal.

Submitted by briansd1 on July 14, 2011 - 1:57pm.

UCGal wrote:
What I don't get - why isn't either side saying "hey, lets go with the Simpson Bowles bi-partison plan!". It spreads the pain pretty evenly - everyone got hit.

This is what Alan Simpson (the Republican co-chair fo the commission) had to say about raising the debt limit:
http://washingtonexaminer.com/news/2011/...

UCGal wrote:

You've got the dems saying the entitlements are untouchable. You've got the GOP saying anything on the revenue side is untouchable... It's unresolveable.

It's not like you said it.

Obama is willing to cut social security and other programs dear to his base.
http://thehill.com/homenews/administrati...

The Republican response: they won't even agree to close loopholes for useless corporate tax breaks.

Boehner: Only concession is vote on debt ceiling
Read more: http://www.upi.com/Top_News/US/2011/07/1...

This is a pattern of Republican intrangisence.

Another example: In hindsight, we now know that the auto bailout was good for the nation and saved American jobs. Obama demanded concessions from the industry in exchange for a bailout. The Republicans said no, hell no.
http://www.komonews.com/news/national/42...

This is an interesting article in the Atlantic (a non-partisan publication) on the end game for Republicans:
http://www.theatlantic.com/business/arch...

Submitted by SK in CV on July 14, 2011 - 3:28pm.

UCGal wrote:
What I don't get - why isn't either side saying "hey, lets go with the Simpson Bowles bi-partison plan!". It spreads the pain pretty evenly - everyone got hit.

As I've mentioned before, the commission never issued a report. It was ignored, and rightfully so, because it didn't meet the commission's charter. Had they timely and properly issued a report, it would have (theoretically anyway) been a proposed bill before congress. They did neither. Nor did the untimely recommendations issued by the commission chairs, which did not have the required support of the commission members to meet their charge anyway, include the sufficient detail needed in a bill before congress.

So, they failed to file a timely report. Failed to get the required number of votes. And failed to produce a document sufficient to be voted on by Congress.

And probably more importantly, it was bi-partisan. Despite my disdain for the ignorance of Alan Simpson, I really don't think they did a bad job with their report. But in the current political environment, there is no chance of either side proposing bi-partisan legislation. For whomever proposed it, it would be a starting point, from which to move backwards. That's the legislative process. Every proposal moves towards the opposite side.

Submitted by UCGal on July 14, 2011 - 4:22pm.

SK in CV wrote:
UCGal wrote:
What I don't get - why isn't either side saying "hey, lets go with the Simpson Bowles bi-partison plan!". It spreads the pain pretty evenly - everyone got hit.

As I've mentioned before, the commission never issued a report. It was ignored, and rightfully so, because it didn't meet the commission's charter. Had they timely and properly issued a report, it would have (theoretically anyway) been a proposed bill before congress. They did neither. Nor did the untimely recommendations issued by the commission chairs, which did not have the required support of the commission members to meet their charge anyway, include the sufficient detail needed in a bill before congress.

So, they failed to file a timely report. Failed to get the required number of votes. And failed to produce a document sufficient to be voted on by Congress.

And probably more importantly, it was bi-partisan. Despite my disdain for the ignorance of Alan Simpson, I really don't think they did a bad job with their report. But in the current political environment, there is no chance of either side proposing bi-partisan legislation. For whomever proposed it, it would be a starting point, from which to move backwards. That's the legislative process. Every proposal moves towards the opposite side.

I think you're somewhat, but not entirely, mistaken.

You mean this report was never issued?
http://www.fiscalcommission.gov/sites/fi...

The commission voted on the plan, and it passed with a majority. But it needed 14 of the 18 commissioners to be automatically sent to congress. 5 members voted against it - 13 voted for it.
http://www.bloomberg.com/news/2010-12-02...

So to say they never issued the report is inaccurate. The report was issued.

To say it didn't have enough votes is accurate. But it had majority support. It was one vote shy of being automatically referred to congress. 13-5 in favor of the report. Unfortunately, it needed at least 14-4.

Submitted by wooga on July 14, 2011 - 5:05pm.

GH wrote:
Seems to me no matter what we do there is not enough money in the universe to pay our debt and obligations.

We print or default - simple as that!

Default is only if we don't pay our interest payments. There is plenty of money coming in to pay all the interest, social security, active troops, and on and on. This idea of "if the debt limit isn't met we default" is crap. The treasury has discretion to prioritize payments, and -- unless Obama is so politically craven that he would deliberately starve seniors to score political points -- if Congress fails to raise the debt limit by August 2 the gov't will simply shut down, as it has before.

On the bright side, we at least finally have an admission from Obama that Social Security is not a trust fund, but rather only a traditional ponzi scheme. The money we've paid in Social Security taxes has already been spent, there is nothing left, and we only get money if new people pay in the future. Ponzi FTW!

BTW, partially privatized SS accounts would have avoided this risk...

Submitted by SK in CV on July 14, 2011 - 7:48pm.

UCGal wrote:

So to say they never issued the report is inaccurate. The report was issued.

The recommendations were issued by the two chairmen of the commission and signed onto by 11 others. The commissions term, as a matter of law, expired on December 1st. The vote was taken and the recommendations were issued on Dec. 3. The commission never issued a report. On Dec. 3, the commission no longer existed. So even if it had the 14 votes, it would have had no legal status to be referred to congress for a vote. That was not an accident.

Submitted by sreeb on July 14, 2011 - 8:14pm.

I don't really want to hear about a 4 trillion cut in 10 years.

How about a $500 billion cut (below this years spending) next year.

If they are going to agree on a bunch of lies, it could at least be adequate lies.

Submitted by svelte on July 14, 2011 - 9:23pm.

This is really pretty hilarious to watch.

The Republicans have backed themselves into a corner...they've let the Tea Party take control of the Republican Party and dictate unreasonable litmus tests - if they vote for a tax increase, or now even raising the debt limit, they can kiss re-election goodbye.

Doesn't seem to matter that the debt limit has been raised 74 times in the last 50 years, if we raise it this time we'll all go to hell in a handbasket according to Tea People.

So now the Reps are in a tight spot. Lose their job, or be held accountable when the well runs dry on August 2nd, which will no doubt tick the independents off and make it difficult for them to get re-elected anyway. Talk about a catch-22!

I think Boehner is a good, smart man actually. He's just in a hell of a pickle. McConnell's proposal to let Obama decide is actually a very smart move...it gets the Reps off the hook. I think he made that proposal this week to test the waters, see how the public reacts. I hope they react well, as it is really the best option at the moment.

And why the Republicans have been okay with reducing taxes this past decade - thereby giving us a deficit - but now seem to be aghast at the word deficit is the clearest example of hypocrisy I've seen in quite some time.

We do need to reduce the deficit for sure, no doubt about it. But returning taxes to a slightly higher level has to be part of the equation.

Submitted by Eugene on July 15, 2011 - 12:13am.

Balancing the budget right now is not only unnecessary, but extremely dangerous.

The right thing to do for any sensible government right now would do a clean lift of debt ceiling with no strings attached, and then pass a $1T short-term stimulus, composed of a variety of infrastructure construction projects spread throughout the country. (As compared to the fairly ineffective 2009 Obama stimulus, which was, for the most part, composed of tax cuts and transfer payments.) Once that stimulus takes full effect, it will by itself reduce the deficit by about two thirds, and the rest of the gap can be balanced through defense cuts and tax loophole closures.

It is extremely instructive to compare the effect of the financial crisis on the United States and on China.

The United States went for a mild stimulus, followed by more tax cuts, followed by a whole lot of doing nothing (except debating whether it's OK for its citizens to choose not to buy health insurance.) We are still stagnating. Contrary to the right-wing propaganda, government employment is down by something like 500,000 since Obama took office.

China went on an infrastructure spending spree. By now, Chinese economy is not only back at full employment, but it's overheating. They have recently unveiled a new high speed rail line, roughly as long as the distance from San Diego to Portland, whose construction took place almost entirely during the post-Lehman period. The trip takes under 4 hours.

Submitted by CA renter on July 15, 2011 - 1:30am.

AN wrote:
If you believe that ss and Medicare benefits are taxes, then all the seniors who are getting them are getting a tax cut compare to their parents because they're living longer today. Also, since everyoneis paying into those programs and everyone expected to be paid from those program, it would be a tax increase on everyone. Last I heard, it was 3 to 1, not 4 or 5 to 1. Both sides have different solutions for this problem and both sides don't even agree on the magnitude of the problem. If your logic is that if you don't vote for the debt ceiling increase is a sign that you want this country to fail, then Obama wanted this country to fail in 2006. BTW, I don't agree with that view at all.

Lets have an analogy to everyday life. It's like a family who bought too much house in 2005 and cars. Then one spouse lost their job. Do you go on and spend as if nothing has changed, or do you file for bankruptcy, or do you cut back on everything else and get a loan mod? Raising the debt ceiling is like getting another credit card, cutting ss and Medicare is like getting a loan mod, and city other things is like reducing your discretionary spending. How would you deal with this problem in your own home?

Get another job/source of revenue (increase taxes to Clinton-era levels, at the least).

Submitted by sreeb on July 15, 2011 - 1:40am.

Eugene wrote:

The right thing to do for any sensible government right now would do a clean lift of debt ceiling with no strings attached, and then pass a $1T short-term stimulus,

Who on earth would lend us $1T so we can stimulate ourselves?

There will be immediate pain if we cut spending now.

There will be a complete disaster if our government had to pay the same rates as Italy is facing.

Submitted by CA renter on July 15, 2011 - 2:05am.

jimmyle wrote:
I believe the rich have brain washed the politicians and many of us in supporting policies that benefit them more and more. Currently top 1% account for 24% of all income compared to 15% in the 1980s and there is nothing to stop this trend. As this trend increases, society will become unstable. US policies that support globalization is one cause of this as companies move production overseas to increase profit while US workers lose jobs. But one incredibly difficult to understand reason is that many in the middle class continue to support tax reduction for the rich as a result they rich as a whole is paying much less tax now compared to the Reagan era. Tax on the middle class is also lower when compared to the Reagan era but there are hidden taxes when you have cuts on schools, and colleges which the middle class rely on much more than the rich.

Agreed.

Submitted by Eugene on July 15, 2011 - 4:16am.

sreeb wrote:

Who on earth would lend us $1T so we can stimulate ourselves?

There will be immediate pain if we cut spending now.

There will be a complete disaster if our government had to pay the same rates as Italy is facing.

Our country is awash in excess savings. Thirty-year inflation indexed securities trade at 1.62%. The market would swallow $1T in new federal bonds without as much as a hiccup.

http://delong.typepad.com/sdj/2011/07/ri...

At this point, for us to be afraid of spending money on stimulus because we worry about having to pay Italy's rates, is about as meaningful as it is for a person in the middle of Sahara desert to be worried about drowning.

Submitted by ocrenter on July 15, 2011 - 7:41am.

I think deep down everyone knows that 4T cut in 10 years is the best solution for everyone. Right now the rest of the world needs assurance that we are capable of cleaning up our mess and this 4T cut will restore their faith. And essentially bend the curve.

Problem is this thing is going to be historic. The president will be viewed once again as someone who can rise up to the occasion and make the tough and painful decisions. This will elevate this president and he will become undefeatable in 2012. Therefore, for the GOP, this 4T cut MUST NOT BE ALLOWED TO PASS, PERIOD.

Submitted by briansd1 on July 15, 2011 - 9:58am.

ocrenter wrote:

Problem is this thing is going to be historic. The president will be viewed once again as someone who can rise up to the occasion and make the tough and painful decisions. This will elevate this president and he will become undefeatable in 2012. Therefore, for the GOP, this 4T cut MUST NOT BE ALLOWED TO PASS, PERIOD.

It's clear the Republicans are not for a long-term solution.

They know that the debt limit must be raised... but they want to use it as election fights by holding several votes between now and the elections.

So much for reassuring the markets that we, as country, have the resolve to put our financial house in order.

And so much for shared sacrifice and doing what's right by the country.

http://thecaucus.blogs.nytimes.com/2011/...

Submitted by sreeb on July 15, 2011 - 9:49am.

Eugene wrote:

Our country is awash in excess savings. Thirty-year inflation indexed securities trade at 1.62%. The market would swallow $1T in new federal bonds without as much as a hiccup.

http://delong.typepad.com/sdj/2011/07/ri...

At this point, for us to be afraid of spending money on stimulus because we worry about having to pay Italy's rates, is about as meaningful as it is for a person in the middle of Sahara desert to be worried about drowning.

If we can borrow as much as we want, forever, at nearly zero interest, then there is a easy solution. We should stop collecting any taxes and just let the federal government borrow all its funds. Nothing to it.

Two years ago, the Greeks were happily borrowing money at 3%. Now they can't borrow at any price.

There is a limit. We aren't there yet. When we get there, it will be like falling off a cliff.

There are no longer any easy answers. There aren't even any good answers.

Submitted by poorgradstudent on July 15, 2011 - 10:36am.

Obama is offering a legitimate compromise. The Republicans have shown no willingness to give at all. It's really not fair for one party to completely fail to negotiate in good faith when the stakes are this high. And the idea you can eliminate the deficit without raising taxes at all is a laughable joke. We have a small spending problem (mostly due to defense and SS spending) and a large revenue problem thanks to the Bush tax cuts.

I don't love either package, I don't think either is perfect. But compromises rarely satisfy anyone. Obama is being the grown up in the room. Boehner and especially Cantor are being children and playing a very dangerous game of chicken.

Submitted by Coronita on July 15, 2011 - 10:43am.

Ah who gives a sh!t. Let's talk about more important questions that many people in our nation is more concerned about...

What's going on with Charlie Sheen, and what's he thinking?

Submitted by sreeb on July 15, 2011 - 10:51am.

poorgradstudent wrote:
We have a small spending problem (mostly due to defense and SS spending) and a large revenue problem thanks to the Bush tax cuts.

If only this was true.

Without borrowing, we can fund only 56% of our expenses in August. To balance our budget (interest only on the debt), we would need to increase revenue (taxes) by 79%.

This isn't due to the Bush tax cuts and it isn't going to solved but raising taxes on private jets.

Submitted by briansd1 on July 15, 2011 - 12:30pm.

poorgradstudent wrote:
We have a small spending problem (mostly due to defense and SS spending) and a large revenue problem thanks to the Bush tax cuts.

I believe that you are correct.

We should remember that by the end of the Clinton presidency, surpluses were predicted into the future.

Submitted by ocrenter on July 15, 2011 - 12:34pm.

in general, on this forum, whenever politics come into play, there would be a whole lot of Obama bashing.

I'm not seeing that this time around.

I think finally the Republicans have overplayed their hand.

Submitted by briansd1 on July 15, 2011 - 1:22pm.

poorgradstudent wrote:

I don't love either package, I don't think either is perfect. But compromises rarely satisfy anyone. Obama is being the grown up in the room. Boehner and especially Cantor are being children and playing a very dangerous game of chicken.

I agree that this is what compromise is all about.

The national debt is a problem that Congress needs to fix. It's an accumulation of decades of deficit spending. Obama doesn't own the problem, Congress owns the problem because Congress spent the money over the years.

Holding the country hostage and threatening financial crisis is highly irresponsible.

The debt limit a national issue. It's not a bargaining chip that belongs to Republicans.

Submitted by SD Realtor on July 16, 2011 - 11:08am.

Wow brian I guess the debt ceiling wasn't a national issue in 2006 when every single dem senator voted against raising it. Whew I am glad it is national now though.

Submitted by Arraya on July 16, 2011 - 2:29pm.

Oh, it's just theater to keep you all entertained. The economy is now run by Skynet, it's all going according to plan

Submitted by briansd1 on July 16, 2011 - 4:23pm.

SD Realtor wrote:
Wow brian I guess the debt ceiling wasn't a national issue in 2006 when every single dem senator voted against raising it. Whew I am glad it is national now though.

When it come to an issue of national interest, one must not obstruct doing what must be none.

It's one thing to register a vote to make point when you're in the minority. It's another thing altogether to throw our country into a financial crisis.

You know what, SDR, the Republican house will raise the debt limit after refusing to do so.

This whole crisis shows how Republicans are willing to gamble with the well-being of our country for the sake of power.

Submitted by meadandale on July 16, 2011 - 5:21pm.

briansd1 wrote:
poorgradstudent wrote:
We have a small spending problem (mostly due to defense and SS spending) and a large revenue problem thanks to the Bush tax cuts.

I believe that you are correct.

We should remember that by the end of the Clinton presidency, surpluses were predicted into the future.

The Bush tax cuts are purported to be costing us about $530 billion over 2 years. We are spending $1.7 trillion per year more than we are taking in.

If we immediately rolled back the Bush tax cuts we'd still be spending almost a trillion and a half dollars more per year than we are taking in.

In what universe is that a 'small spending problem'?