For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation's credit card.
I love how 2 and a half years after taking office he still wants to tell people "it's not my fault, it was the other guy". As if Obama has been the picture of fiscal restraint, with his payoffs to his union thug buddies and desire to nationalize our healthcare system. On to the text itself. I love the phrasing, "money was spent on trillions of dollars in new tax cuts". That's a nice big government socialist way of saying we let people keep more of their hard earned money. A tax cut is not government spending. You would think someone with a Harvard education would get that, but then again, he has never released his transcripts. Then he comments on the two wars. So is he admitting that if he were President he wouldn't have done anything after 9/11? 3,000 Americans would die and he would just make some speeches and send missiles into empty tents like Clinton did after Americans were killed? I guess we all know the answer to that question. He can't even get rid of Qaddafi in Libya despite having a 4 month long intervention. The quip on the prescription drug program is completely disingenuous. I mean he just rammed Obamacare down our throats, our we to believe that he would not have subsidized prescription drugs for seniors? Puleeeeese. Now, I'm not saying W is blameless. If you remember he was a "compassionate conservative" which meant that he was not as free market as I would like and therefore did not control spending as much as he could. This is why if he were running for the GOP nomination today, he would be probably be polling single digits with his "compassionate conservative" schtick. No way the Tea party or other true believers would go for that now.
As a result, the deficit was on track to top $1 trillion the year I took office. To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more – on tax cuts for middle-class families; on unemployment insurance; on aid to states so we could prevent more teachers and firefighters and police officers from being laid off. These emergency steps also added to the deficit.
The deficit for 2008 was $458 billion. The deficit for 2009 was $1.4 trillion. The deficit for 2011 is estimated to be over $1.6 trillion. So the deficit was on track for $1 trillion and he tacked on another $400 billion and then continued his wild spending spree. Remember his $862 billion stimulus package which cost about $1.3 million per job created? Wasn't the complete and utter failure of that program his fault? Couldn't he have thought of a better use of cash? Well, he probably could have but then he wouldn't have been able to pay off his union buddies, both inside and outside of government.
Because neither party is blameless for the decisions that led to this problem, both parties have a responsibility to solve it. And over the last several months, that's what we've been trying to do. I won't bore you with the details of every plan or proposal, but basically, the debate has centered around two different approaches.
What does he mean "we"? Just 4 weeks ago he said he has been too busy to deal with the debt ceiling issue. And he doesn't want to bore the American people with the details of the plans because he doesn't want to point out that he has never actually submitted a plan that cut the deficit. His 2012 budget plan, which was defeated unanimously in the Senate, actually made spending worse!
The first approach says, let's live within our means by making serious, historic cuts in government spending. Let's cut domestic spending to the lowest level it's been since Dwight Eisenhower was President. Let's cut defense spending at the Pentagon by hundreds of billions of dollars. Let's cut out the waste and fraud in health care programs like Medicare – and at the same time, let's make modest adjustments so that Medicare is still there for future generations. Finally, let's ask the wealthiest Americans and biggest corporations to give up some of their tax breaks and special deductions.
This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much. It would reduce the deficit by around $4 trillion and put us on a path to pay down our debt. And the cuts wouldn't happen so abruptly that they'd be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right now.
There's a plan that cuts domestic spending to Eisenhower levels? Where? The entire Federal budget in 1960 was $92 billion, which in current dollars is about $700 billion (why did we get off the gold standard again?) while the current budget is $3.8 trillion. I guess this all depends on what he means by "domestic spending" and "lowest level" and, of course, "is" (sorry, couldn't resist). Also, didn't Obamacare already cut the waste and fraud from Medicare? How can you cut the same thing from the same program twice, I realize that we are talking about a government program but if it were so easy to cut waste and fraud, we would have already done it. On asking the wealthiest Americans to give up tax breaks, aren't the Bush tax cuts already expiring at the end of 2012? Aren't there special excise taxes in Obamacare that the rich are going to be paying? We already have the most "progressive" tax system in the world and you want to loot "wealthy" people's bank accounts even more? I also love the "cuts wouldn't happen so abruptly" line as that means that all the cuts are basically smoke, mirrors and hand waving with almost no actual cuts in 2012. So basically this approach would definitely raise people's taxes in exchange for a promise of lower spending. We've seen this movie before, we know how it ends.
This approach is also bipartisan. While many in my own party aren't happy with the painful cuts it makes, enough will be willing to accept them if the burden is fairly shared. While Republicans might like to see deeper cuts and no revenue at all, there are many in the Senate who have said "Yes, I'm willing to put politics aside and consider this approach because I care about solving the problem."
Has nobody told him that the Reid plan doesn't include tax hikes and is cuts only and therefore, according to Obama, "unbalanced"? I guess this speech was written before it came out and Obama didn't want to bother to fix it.
So the debate right now isn't about whether we need to make tough choices. Democrats and Republicans agree on the amount of deficit reduction we need. The debate is about how it should be done. Most Americans, regardless of political party, don't understand how we can ask a senior citizen to pay more for her Medicare before we ask corporate jet owners and oil companies to give up tax breaks that other companies don't get. How can we ask a student to pay more for college before we ask hedge fund managers to stop paying taxes at a lower rate than their secretaries? How can we slash funding for education and clean energy before we ask people like me to give up tax breaks we don't need and didn't ask for?
Why is he harping on the corporate jet owner thing so much, seriously. First, his family goes on vacation on the ultimate corporate jet for free and secondly, even liberal commentators have agreed the corporate jet depreciation schedule is a drop in the bucket compared to the real changes we need. And are hedge fund managers paying taxes at a lower rate than secretaries? Really? How is that even possible? Does he actually have any data to back that up? Or is it just a stupid throw away line? Considering that according to IRS data the bottom 90% of incomes pay an effective tax rate of under 10%, I'm going to think it is the latter.
We all want a government that lives within its means, but there are still things we need to pay for as a country – things like new roads and bridges; weather satellites and food inspection; services to veterans and medical research.
Somehow I bet we can pay for all of those and live within our means at the same time. How about cutting salaries and benefits for government employees so they are more in line with the private sector? I don't see why there should be premium pay for a bureaucrat. Also, don't the pharma and biotech companies make enough money to do their own medical research? It's obviously a profitable endeavor so I don't see why the government needs to be involved.
Keep in mind that under a balanced approach, the 98% of Americans who make under $250,000 would see no tax increases at all. None. In fact, I want to extend the payroll tax cut for working families. What we're talking about under a balanced approach is asking Americans whose incomes have gone up the most over the last decade – millionaires and billionaires – to share in the sacrifice everyone else has to make. And I think these patriotic Americans are willing to pitch in.
In the same paragraph he talks about those making $250,000 a year and millionaires and billionaires in the same breath. Those are not the same thing. You're going to be taxing a lot of small business owners at the $250,000 a year level and if they have less money, they will be hiring less. Also, as I mentioned above, their taxes are already going to go up substantially after 2012. So you want to loot them some more? Sounds like a recipe for a never ending recession. And I'm sorry, what sacrifice is everyone else making? Most Americans don't get any direct government payments, other than tax refunds? Sorry, Barry, your SEIU friends don't count as "everybody". And who says they are willing to pitch in? You? If they were so willing they would already be doing so. There is nothing stopping anyone from giving money to the government. The fact that they aren't means they don't want to.
Understand – raising the debt ceiling does not allow Congress to spend more money. It simply gives our country the ability to pay the bills that Congress has already racked up. In the past, raising the debt ceiling was routine. Since the 1950s, Congress has always passed it, and every President has signed it. President Reagan did it 18 times. George W. Bush did it 7 times. And we have to do it by next Tuesday, August 2nd, or else we won't be able to pay all of our bills.
That's not true, it does allow Congress to spend more money and if they raise it, they definitely will. Also, remember how Obama kept insisting on at least an 18 month debt ceiling extension? Well if you look at the numbers he has quoted, Reagan had to increase the debt ceiling on average every 5.3 months of his term while W raised it every 13.7. So why is it such a big deal for him to have to raise it again next year? Oh yeah, I forgot, it would get in the way of his campaigning and fundraising and we can't have that.
First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road.
But there's an even greater danger to this approach. Based on what we've seen these past few weeks, we know what to expect six months from now. The House will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions. Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way.
Again, Reid has a cuts only plan out there right now, so it's not just Republicans with this sort of plan. Also, the Republicans are only suggesting a short term deal because you have been so unserious about actual spending cuts. It's all back end loaded and might not translate into real savings, like the budget deal for 2011 which had a headline cut of $38 billion but actually was just a bunch of gimmicks. They can't do that again. Maybe if Obama was more honest the first time, the Republicans would trust him more. He's kind of like the guy in the bus station who always needs just a few dollars to get his bus ticket home. You might be fooled once...
History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self, and set personal grievances aside for the greater good. We remember the Americans who held this country together during its most difficult hours; who put aside pride and party to form a more perfect union.
Didn't Lincoln have a "rigid" ideology for his day? Didn't he go to war rather than compromise on slavery? If one side is right and the other is wrong, why compromise the right to make it less right? Taxes are already scheduled to go up massively in 2013, do we really want them to go up any more? We will never get out of this recession if that happens, that is pretty clear. Obama's former Chair of the Council of Economic Advisers, Christina Romer, found that the multiplier on taxes is 3. So for every $1 in tax cuts, $3 is added to the economy. It doesn't take a rocket scientist to realize the reverse is true. For every $1 in tax increases, $3 is taken from our economy. And as Robert Barro points out, the multiplier on government spending is probably less than 1. So for every $1 in government spending only $0.80 gets into the economy. That seems true doesn't it? If it were greater than 1, our economy probably would be zooming right now given the level of stimulus. Instead we are still in the doldrums. So doesn't it make more economic sense to cut spending and not raise taxes?
Anyway, another speech, another heap of festering bullcrap. Hasn't Obama noticed that his approval rating has been suffering more now that he continues to spew his garbage publicly on an almost daily basis?