The social rot of Greece and the politics of dependence

There is a word which European socialists, and their American admirers, invoke in their calls to come together for the greater government — er, good. That word is “solidarity.”

Here’s what solidarity looks like in Greece, where three bank workers died Wednesday after rioters threw Molotov cocktails into their branch:

“Witnesses said that protesters marching past the building ignored the bank employees’ cries for help and that a handful even shouted anti-capitalist slogans,” the English-language Kathimerini newspaper reported.

A columnist for the paper wrote that the man who started the fire “flipped [the bank employees] the finger when he saw them choking on the smoke of his firebomb.” Other media outlets reported that the mob blocked firefighters from reaching the burning building.

Kumbaya.

The proximate cause of these protests was the Greek government’s $38 billion plan to cut public spending and raise taxes. This “austerity package” was a precondition of the $140 billion that other members of the euro currency, plus the International Monetary Fund, are lending to Athens so that it won’t default on its debts and possibly trigger a second global financial panic in two years.

The threat that such a panic would spark a double-dip recession, or worse, is well-documented. So is the cautionary tale Greece offers to Americans about the unsustainability of ever-greater debt.

But there is also a social rot evident here, one that necessarily comes from policies that promise interdependence but deliver only dependence.

There’s no doubt that Greek civil servants fear losing their jobs, and that retirees are angry about losing the pensions they were promised. And while it’s hard to sympathize with those who vent their fear and anger by taking others’ property or even murdering them, there’s a lot of fear and anger to be had.

One in seven Greeks holds a government job, which pays them for 14 months a year — no typo there — until they retire, many of them before age 60. During most of their careers, it is virtually impossible to fire them.

If this system worked, the country would not be on the brink of bankruptcy. But try to take it away, and you get firebombed banks and sneers for the victims.

A politics of dependence such as this one does not emerge by chance. It was the conscious decision of, ironically enough, the father of Greece’s current prime minister, who in the 1980s sought to ensconce himself and his Socialist party in power by adding to public employment rolls and doling out subsidies.

Some of the loot was used to buy off the rich, some to buy off the middle class (very little, in Greece or anywhere else, ends up with the truly poor). It hardly matters; the rot is the same.

Greece is an extreme case, but the problem of politicians’ spending taxpayer funds to buy votes is universal, as is the rot. There is only one way to stop it, and it has nothing to do with favoring one political party over another. It is to limit government’s reach in the first place.

Otherwise, your eventual choices are between ugly (taking away the public trough) and uglier (dealing with the fallout from a default).

Sooner or later, you find out that, no matter how rich your nation, and no matter how clever the people running it, there isn’t enough money in the world to buy what you can’t pay for.

141 comments Add your comment

arnold

May 7th, 2010
7:17 pm

Of course it’s messed up and needs change. But conservatives, by definition, don’t embrace change. What to do, Oh, what to do??? Send the Tea Party to Greece. Problem solved!!!

Ragnar Danneskjöld

May 7th, 2010
7:36 pm

Chauncey probably thinks it was a Michigan militia that fire-bombed the Greek bank, but I suspect associates of Bill Ayers.

JKL2

May 7th, 2010
7:53 pm

Don’t forget the fact we’re locked in for 17% of that IMF loan too.

It’s just a vision of our future when our current $119T in unfunded liabilities comes due. Obama’s union friends are already starting to riot. Can’t wait for things to get bad.

As someone due one of those government pensions, I’m starting to doubt if I’ll ever see a dime when I retire in 8 years.

JKL2

May 7th, 2010
7:57 pm

Kyle,

nice work again. I would give you a pulitzer, but if it’s been watered down so much Cynthia can get one I’m not sure I would want it. Maybe we should just go for a Nobel Peace Prize Your more deserving than Obama.

Bruno

May 7th, 2010
8:12 pm

Kyle–Excellent article. I saw another article recently highlighting how much the Greeks cheat on their taxes. It’s sad that the birthplace of democracy has become so devoid of character. Thirty years of socialism tends to do that.

http://www.nytimes.com/2010/05/02/world/europe/02evasion.html

mmm, mmm, mmm, Barack the LIAR Obama

May 7th, 2010
9:30 pm

From AOL:
(May 7) — The Obama administration argued last year, for instance, that the stimulus bill was needed to keep unemployment from rising above 8 percent. More than a year later, the jobs report released today puts national unemployment just a whisker below 10 percent.

The health care bill provides an even clearer example. Those who followed the health care debate closely will recall, for instance, that many of us said businesses would drop coverage and pay fines rather than comply with extensive new mandates.

Well, this week it was reported that some of the nation’s biggest employers — such as AT&T, Verizon, Caterpillar and Deere — have been seriously considering cutting employee health care and paying the lower-cost penalties instead. This not only undercuts the claim Democrats made that employers wouldn’t drop employees, it undercuts one of the president’s most oft-repeated vows — namely, that “if you like the plan you have, you can keep it.”

This is just one of the arguments we heard from the administration that’s turned out to be as hollow as a CT scanner. Another was the claim that the health care bill would “slow the growth of health care costs for families, businesses and government,” as the president put it in one of his most high-profile speeches on the topic. Here’s the reality: An analysis last month by Richard S. Foster, Medicare’s chief actuary, found that this bill will actually increase costs, and that national spending on health care alone could go up by $311 billion.

Want another?

The president and Democrats in Congress said time and again that their health care bill would strengthen Medicare. Yet the administration’s own experts now say it could drive nearly one in six hospitals into debt and threaten access to care for seniors on Medicare. Proponents said the bill wouldn’t raise taxes. Yet now the Joint Committee on Taxation, Congress’ own bipartisan scorekeeper on legislation, says middle-class taxpayers will pay billions more in taxes as a result of this bill. Millions more will get hit with a fine for choosing not to buy government-approved insurance.

mmm, mmm, mmm Barack the LIAR Obama, BEND OVER, HERE COMES THE CHANGE!

@@

May 7th, 2010
9:38 pm

The fallout from Greece is spreading throughout Europe, especially in Germany.

The tabloid newspaper Bild has assailed the bailout plan in blaring headlines for the past two weeks. “What Will It Costas?” a headline said recently, making a play on a common Greek name. “Euroland is Burning,” said German news magazine Der Spiegel. “What will Happen to Our Money?” asked the high-brow weekly Die Zeit.

Friday’s front page of the Frankfurter Allgemeine Zeitung, an influential voice of German conservatism, said Europe’s usual method of papering over cracks with German money “has reached its limits now that the issue is the bankruptcy of whole states and the clash of cultures.”

The aid plan faces a court challenge filed Friday by a university economist, Joachim Starbatty, and by other prominent critics of the euro. The challenge is taken quite seriously, because the EU treaty that created the euro outlaws bailouts except under extraordinary circumstances.

http://online.wsj.com/article/SB10001424052748703686304575228051536744986.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird

This is going to get real ugly really fast.

And to think, all the American people asked of Obama and his administration is that they slow down, think things thru. He wasn’t even willing to do that.

Bill

May 7th, 2010
10:12 pm

Kyle for a Pulitzer!! You have got to be kidding. Even if Cynthia did “cheapen” the award, Kyle for a Pulitzer!! Why don’t we just go all the way and give it to Sarah!! Man, what are you thinking??

Bill

May 7th, 2010
11:27 pm

There is going to be another world war. Plan for it now…while you still have the chance.

Real Athens

May 7th, 2010
11:32 pm

Pulitzer? Consider the source. A nomination coming from someone who doesn’t know the difference between your and you’re? Talk about “cheapening”.

Real Athens

May 7th, 2010
11:32 pm

Pulitzer? Consider the source. A nomination coming from someone who doesn’t know the difference between your and you’re? Talk about “cheapening”.

allen981

May 7th, 2010
11:57 pm

Kyle, great article, but there are significant differences between Greece and the U.S., most notably the depth and quality of the U.S. economy. Yes, we have shipped jobs everywhere, but we still make stuff, produce stuff, and our people work. Greece is bankrupt because it produces nothing.

Do we need a change in direction? Yes, and it will happen. All the doom and gloomers need to look back about 40 years to a time when this country really was on the skids. Inflation of 15 percent or more; price controls (yes, the government told retailers how much a loaf of bread should cost) instituted by a Republican president; riots in the streets (was this a race war? Many believe it was); rising debt and a housing/real estate industry that had collapsed.

Today’s nation is different, but the challenges are far more manageable. We are increasing debt too fast, and we need to stop, but unlike Greece, we have a dynamic, working economy.

Now all we need is a hard working, smart, realistic conservative president to make a slight course correction…

Michael H. Smith

May 8th, 2010
2:28 am

Love the optimism Allen, as usual reality gets in the way of utopia. We make very little stuff anymore, and we grow very little stuff anymore. What we do grow is government, dependence on government and government debt. We really aren’t too far removed from being like Greece in those aspects. (oik, oik)

Nixon caught hell for imposing wage controls to cool down inflation, guess a good old fashion market driven labor shortage really is better at raising incomes than government raising minimum wages?

Then again, replacing over paid American workers with the cheapest labor obtainable in the world is the preferred means of imposing government wage controls today. Awww, so much for Nixon’s “little man”, the common people so despised by the liberal elites from both left sides of the liberal left, socialist Democrats and corporatist Libertarians respectively. Outsourcing the wealth of a nation by means of idiotic trade agreements and absurd unconstitutional immigration policies hasn’t been easy for these sleazy culprits to accomplish but they’ve managed quite well over the past two decades to succeed in rendering this country impotent.

A real conservative Congress and President will have to make more than a slight course correction in order to correct the direction of this nation back to its’ founding principles and Constitution that made it the greatest and once most prosperous nation on earth.

We conservatives need to “ERASE the CHANGE” not embrace it!

Mrs. Norris

May 8th, 2010
2:33 am

As goes Greece, so goes the world… No wait, make that Rome…. or is it the United States? …. never mind.

robyn

May 8th, 2010
6:03 am

1 in 10 people in the US have some sort of government job…… Federal, state, city, county, civil service. They all are guaranteed retirements also.
1 in 7 people draw Social Security benefits.
People that live in glass houses should not throw stones.

John S.

May 8th, 2010
7:13 am

I get more depressed every time I read a column like this and then the replies. I hate to say it, because I sound like a reject from the 60’s, but why can’t we all just get along? I am a true political independent. Neither of the two major parties have workable solutions. The Dems push forward unsustainable social programs, and the GOP screams bloody murder, but funds those same programs while they’re in power because no party has enough political support from the electorate to tell the truth and still get elected or re-elected.

The truth is that we (the government) needs to both cut costs and raise revenue. About two thirds of the Federal budget is made up of entitlements (Social Security, Medicare, and other social welfare programs) and the defense budget. I don’t think anyone can make an argument for cutting defense at a time like this, so that leaves us with the social programs. I don’t care whether you’re a Democrat, a Republican, or a card carrying (do they have cards yet?) member of the Tea Party, you’re not going to get a majority of the people to voluntarily vote to cut their own government handouts. The country is made up of too many people like the guy who shouted “keep your government hands off my Medicare!”

We need to make a decision as a country to be more fiscally responsible. Fiscal responsibility requires sometimes choosing not to buy what you can’t afford, but, as has been proven over the past couple of years, we as a people do not like being told we can’t have stuff we want.

Del

May 8th, 2010
7:55 am

Kyle, you’ve written an excellent piece. It should resonate with all who read it. Unfortunately, the Greek model that is know falling apart, appears to be the same one that Obama and far left Democrats in congress seem to want to build in this country.

jconservative

May 8th, 2010
8:10 am

So Greece is going to cut spending and raise taxes. Sounds simple. So simple we in the US should give the idea a shot.

You know if the government brings in $1.00 and spends $1.25, eventually the “you know what” will hit the fan. This is what Greece has been doing. And this is what the US has been doing since 1981.

But the problem Greece has and the problem the US has is that you now have a generation raised on the idea that the voters have the right to raid the treasury in the form of tax cuts. And if the voters had cut spending when they cut taxes we would have a small manageable problem.
But spending did not get cut, did it? Spending was increased at the same moment taxes were cut. And that spending was at a greater rate than the tax cuts. The idea is that you can have your cake and eat it too.

So we have the average US citizen believing he is “entitled” to low taxes, high cost government services, all to be paid for my some “magic economic formula” that says if you keep taxes low enough eventually the public treasury will be bursting at the seams with money.

And after 30 years of this “magic economic formula” we now have a public debt of $0.00 and enjoy a surplus of $12.9 trillion dollars in the treasury!

Oh, darn! I got the numbers backward didn’t I?

Oh well, so much for “magic economic formulas”. How do you say bankrupt in Greek?

swampjacket

May 8th, 2010
8:44 am

Government jobs and the merits or problems of “socialism” have nothing to do with the those riots. It’s the same problem here with the anger at banking institutions and the fear of lost pensions. Also no system works with massive corruption. Throwing Molotov cocktails? We have “TERRORISTS” that fly planes into buildings. Does your duty to right-wing perspective leave no room for honesty. Typical of your light-weight journalism.

brother bill

May 8th, 2010
8:51 am

Where are the deficit hawks when it comes to making war? We spend 3 Trillion on Iraq and Afghanistan and not one peep about burdening our offspring.

In the same way that crime can be managed, not eliminated, folks who fanatically believe in their mission will eventually succeed. See Eric Rudolph, Mark Burton, etc.

Spending a huge amount of our budget on defense is like a home-owner spending a third of their budget on guns and security, but not having food on the table.

Empires are never overthrown from outside forces. It is always destroyed from within.

The die is cast. 47% of Americans do not pay INCOME TAX. They do pay Social Security, Medicare and State Sales Tax. Once 51% of Americans do not pay INCOME TAX, and they vote, they will vote to RAISE the Income tax on those who DO pay it.

Gordon

May 8th, 2010
9:10 am

Cut the spending, THEN raise the taxes. We all know what happens if you raise the taxes first. It’s probably too late anyway.

And by the way, brother bill, this deficit hawk leaves nothing off the table, including defense.

DannyX

May 8th, 2010
9:24 am

What happened? Did Greece use the George W Bush plan?

You know, the one the lets you increase spending, increase deficits and pay for it all with tax cuts!

Maybe Greece needs some more tax cuts. Tax cuts fix everything.

Tax cuts!!!

Del

May 8th, 2010
9:25 am

Gordan@9:10am,

That would be the logical way to approach it. Unfortunately, many in government are driven more by ideology than logic.

OpinionsMatter

May 8th, 2010
9:43 am

More fear tactics from the Right. You admit that Greece is an extreme case, but not until nearly the end of the article. If Republicans had constructive alternatives to the serious issues facing our country, I would listen. But they don’t. That’s why the Republican Party is gradually becoming irrelevant.

DannyX

May 8th, 2010
10:14 am

Greece should invade Italy.

They could then pay off their debt with Italian olive oil revenue.

zeke

May 8th, 2010
10:25 am

Change is here alright! Obama, democrats, progressives, socialist and liberals are changing us into just another third world slum! If we do nothing , we must do these things!

1)- DEPORT ALL ILLEGALS AND THEIR ILLEGAL BRATS
2)- STOP PENALIZING THE MAJORITY IN FAVOR OF MINORITIES
3)- STOP EXPANSION OF ALL GOVERNMENTS AND INFACT REDUCE THEM NOW
4)- LEGALLY FORCE GOVERNMENTS TO STAY WITHIN THE MANDATED AUTHORITY
GRANTED TO THEM BY THE CONSTITUTION
5)- STOP ALLOWING CHANGES TO THE INTENT AND MEANING OF THE CONSTITUTION
INCLUDING FREE SPEECH, GUN OWNERSHIP, FREEDOM OF, NOT FROM
RELIGION, LIMIT GOVERNMENT OWNERSHIP OF PROPERTIES, FORCE
THE FED’L GOVERNMENT TO ABIDE BY THE CONSTITUTION AND
ESPECIALLY THE 10TH AMENDMENT
6)- REVERSE HEALTH GRAB FIASCO
7)- DEFINE THE MEANING OF SO CALLED CIVIL RIGHTS-WHAT A FIASCO THAT IS
8)- GET THE GOVERNMENT OFF THE BACKS OF, AND OUT OF THE LIVES OF, THOSE
WHO ARE THE PRODUCERS IN THE ECONOMY AND SOCIETY

norbit

May 8th, 2010
10:30 am

Yeah! Socialism unlike cowboy Capitalism, where GW goes off half-cocked and stars a pre-emptive war of choice over oil and oedipus hubris, leading to the slaughter of hundreds of thousands of innocents, blood on Anerica’s hands, all while you, Kyle, sit in your ivory tower throwing conservative stones at glass houses…..

swampjacket

May 8th, 2010
10:38 am

Is there a reason why my previous post was Censored or deleted?

Nash

May 8th, 2010
10:46 am

Same things happening here under the bed wetters in charge, welcome to Obamanation !

American Pride

May 8th, 2010
10:47 am

Zeke @ 10:45

You lose all credibility with the way you started the cracked-out tea party rant…put down the pipe and articulate based on some real solutions to complex problems and stop homogenizing our complex national issues with the Beck/Palin talking points

jimbo

May 8th, 2010
10:52 am

mmm i bet you’re a huge enemy of the israeli settlement enterprise and the US defense industry–both of which perfectly fit in with your tirade against the “politics of dependency”. it’s called “democracy” and it aint perfect.

American Pride

May 8th, 2010
10:56 am

The fundamental problem with our two-party political system is that we treat politics as if it’s a spectator sport where sides must be chosen and the other side is completely wrong.

Sadly, this represents the majority of registered voters.

Voice of Reason 2011

May 8th, 2010
11:09 am

Dependence such as farming subsidies, pork spending, tax credits for the rich and business, tax credits for the middle class, corporate welfare such as bailouts, etc. Let’s not blame the poor for this one. They are a small population considering America’s population. The demise of the Roman Empire is a classic example of how the rich and the middle class raided the treasury and thereby caused the decline of the empire….Wonder who is raiding the American Treasury….IT SURE AINT THE POOR.

somewhereinga

May 8th, 2010
11:11 am

Ya gotta love the title “Social rot of Greece…” Kinda lets ya know it’s going to be a one sided article…but then again, this is an “opinion” page.

I keep hearing Brother Bill’s comment that “47% of Americans do not pay INCOME TAX.” I sure would like to see a breakdown of those statistics someday. How many of them are wealthy and have good tax men working for them and good deductions and out of the country tax havens? How many are the millions that are over 65 and retired and on limited income, Social Security or whatever? Somehow I doubt that they are all welfare “queens” driving around in their Caddies buying their lottery tickets (as is sometimes, although not this time, inferred).

Michael H. Smith

May 8th, 2010
11:12 am

Article 4 Section 4 Clause 1

“The United States shall guarantee to every State in this Union a Republican Form of Government ”

This clause, sometimes referred to as the Guarantee Clause, has historically been a part of the debate about the rights of citizens vis-a-vis state governments. The Constitution offers no explanation as to what constitutes a republican government, however the Federalist Papers give us an insight as to the intent of the Founders. A republican form of government is distinguished from a pure democracy, which the Founding Fathers wanted to avoid; as James Madison wrote in Federalist No. 10, “Democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths.”

http://en.wikipedia.org/wiki/Article_Four_of_the_United_States_Constitution

Nice to be a Representative Republic without the fatal flaws of a democracy.

pig trough

May 8th, 2010
11:30 am

The social rot of the USA occurred when so-called Christian conservatives supported cowboy capitalism with the pre-imptive war of choice over oil and oedipus hubris, leading to the slaughtering of hundreds of thousand civilian innocents, so Kyle, sit in your ivory tower with your pious neocons and throw conservative rocks at socialist glass houses….God bless America and forgive her for her sins….

Dusty

May 8th, 2010
11:36 am

Well, THANK YOU, Kyle. This is one great sensible commentary. If only our government would listen to the voice of reason. But I fear they are deaf to any moderate voice. The reduction of debt by stringent sensible means does not seem to appeal to Democrats. It obviously does not appeal to Greeks.

We are not to the firebomb stage. Let us hope we never are. We are the sensible and smart Americans. Let’s prove it!!

Michael H. Smith

May 8th, 2010
11:37 am

What a treble waste of good glass.

It's Greek to me

May 8th, 2010
11:47 am

Greece is the gateway to Europe for immigrants, legal and illegal. Many of those in Greece now are immigrants from Turkey and other Muslim countries. Like here in the USA, the violence is IN LARGE PART IMPORTED AND ISLAMIC.

Gerald West

May 8th, 2010
12:30 pm

Kyle, the “socialist”, “liberal” name-calling seems to cloud your thinking and pollute your writings.

Greece’s problems have nothing to do with socialism or capitalism. Greece has always been a corrupt, irresponsible, and ungovernable country. It’s part of the heritage: an unfortunate cross of Balkan and Mediterranean.

You disparage “European socialists”. The prosperous countries of northern and western Europe are social democracies, not socialist states. They provide citizens with social services similar to our Social Security, Medicare, Medicaid, unemployment compensation programs, and various healthcare plans. But, they do it more efficiently and effectively, and show better results. World-wide evaluations of “quality of life” rank these countries and Canada at the top of the list, ahead of the USA. World-wide evaluations of freedom of enterprise and international competitiveness rank these countries at the top, along with the USA.

In theory, a socialist state is one in which property and the means of production are owned by the “people”, i. e. the government. This is a discredited notion that is clung to only by two countries: North Korea and Cuba. (The Chinese government gives lip service to the theory while overseeing the world champion of free enterprise.)

Kyle, when you use “socialism” as a term of disparagement you’re just beating a dead horse. There are no modern socialists. There are, however, many people, even some Americans, who think that an important function of government is to “promote the general welfare”. That’s even in our Constitution!

Now there’s something of substance that can be discussed and debated.

the truth

May 8th, 2010
1:11 pm

What is happening in Greece could likely begin hitting states such as CA and NY….you know states that are bankrupt and have such high tax rates that they’ve driven a lot of the tax base elsewhere. States, like Greece, can’t just up and print their own currency. You’ve already seen the college students (and some of the teachers) in CA take to the streets when funding got cut. The rest of us will be looked upon to bail out these states.

I don’t care what you call it….spin it however you want….when you are out of money you are out of money. Back in the day when I took economics, what Greece is was called socialism. Like I said, you can slice and dice it and call it whatever you wish…you can argue about that and lose site of the fact that the country is bankrupt. Can’t deny that. CA is bankrupt. NY is close. And when people get something pulled from them by the government (who in turn gets it from taxpayers) they start crying and moaning and eventually take to the streets.

DawgDad

May 8th, 2010
1:49 pm

Most western European countries have extensive deep traditional bases of extreme leftists and anarchists the likes of which America has rarely if ever witnessed on our soil, not to mention the inherently socialist leaning societies and governments. Often these groups become very violent; this is nothing new, many of these agitators are stirred up by professionals and academics who wait patiently to exploit opportunities like this. They have right-wing extreme groups, too, no mistake, but this leftist anarchist stuff is endemic.

This is why conservatives and many independents are so concerned about the transformation in our own national politics. Few Georgians want Georgia to become let California, let alone Greece or France or the UK or (on and on). Make no mistake, the leftists and anarchists would not hesitate one bit to rip this country to shreds and create an opportunity for them to step in and grab power. Americans must remain ever vigilant against people and policies moving us ever closer to tyranny, increment by increment.

DawgDad

May 8th, 2010
2:00 pm

‘There are, however, many people, even some Americans, who think that an important function of government is to “promote the general welfare”. That’s even in our Constitution!’

Gerald: The key word is “promote”. Looking at Webster, I see definitional words like “raise, further, launch, advance”, not words like “grab, confiscate, tax, mandate, control, manipulate, corrupt”. Seems our government is more leaning to the latter set of verbs.

Dusty

May 8th, 2010
2:23 pm

Gerald West 12:30 You said:

“You disparage ‘European Socialists’. The prosperous countries of northern and western Europe are social democracies, not socialistic states.”

Well, Gerald, let us nitpick your high minded estate.

Whether a swan or a duck, if it walks like a socialist, talks like a socialist, we might say it is socialistic fowl no matter what.

As to the prosperous countries of Europe, I think they are shaking in their shoes. The next thing to go will be some of the expensive socialistic endeavors.

In other words, debt will kill expensive socialism or the country that expands it.. If you do not have the money, you cannot support socialism. no matter what name you call it.

pat

May 8th, 2010
2:31 pm

I just look at education here in Georgia as to why it’sbad to cede control of things to the governement. Buget falls, education is getting cut and there is not a damn thing we can do about it. We gave control to the governement and so a program is only as good as the idiot holding office.

At the ratethis governement spends, we aren’t far from beng Greece.

Michael H. Smith

May 8th, 2010
2:32 pm

Federal Spending Grew More Than Eight Times Faster Than Median Income

When federal spending grows faster than people’s paychecks, the government’s burden on taxpayers becomes greater. Over the past few decades, middle-income Americans’ earnings have risen 29 percent, while spending has increased 242 percent.


Entitlement Debt Dwarfs Other Spending, Including Bailouts

The nation cannot afford the Medicare and Social Security benefits that have been promised to future retirees. These long-term unfunded obligations dwarf spending on other expensive government programs, including the Troubled Asset Relief Program (TARP) and the 2009 economic stimulus bill, and vastly outweigh the entire national debt.

Net Interest Spending Will Quadruple over the Next Decade

As the national debt grows, interest payments will consume more and more of the federal budget. Under the President’s budget, the national debt would nearly double and real net interest costs would quadruple over the next decade.

http://www.heritage.org/BudgetChartBook/contents

Chris Broe

May 8th, 2010
3:12 pm

Earnings are good here in the good ol’ USA. However, we are in unchartered territory. Never before have so many financial catastrophes occurred at the same time and been so widely distributed across every theater on the globe. The banking bandaid is more troubling than the wounds. Every economists agrees that we haven’t solved the problem, we’ve only postponed the consequences. Maybe.

Social rot is the last of our problems. Greek cultural intrusions on their productivity will make a great book and I look forward to reading that book, but more relevant is the survival of capitalism itself. Every bombshell that hits us is about some sort of cluster of crooks at the top of the social food chain. The logic that motivates the Greeks to riot exists in every country. The social and economic elite are taking advantage of the very laws that constrain the rabble. The profits are privatized, but the liabilities are nationalized.

Socio-economic injustice cannot continue without destroying what little respect we have for our economic institutions. Revolution is contagious. It gets into the zeitgeist and then there’s no stopping it.

Our funding fathers have trumped our founding fathers. And that wasn’t in the brochure.

A CONSERVATIVE

May 8th, 2010
4:06 pm

THE stupid COMMENTS BY THE IGNORANT LIBERAL…SOCIALISTS CLASS IS MIND-BOGGLING..GO BACK TO SLEEP LIBERALS..

luckydog

May 8th, 2010
4:30 pm

Greece way overspent on the Olympics, most of them pay no property taxes, they are the biggest cheaters on thier income taxes and they think olive oil will solve any problem.
The problem with socialism is that sooner or later you run out of OTHER PEOPLE’S MONEY.

joan1

May 8th, 2010
7:49 pm

Why is it only the minorities riot in this country? Like the Hispanics when a few American kids wore flag shirts to school? Like the Hispanics over the Arizona law, which is no more draconian that the federal (except they assume the state law may be enforced). It is about time for the taxpayer to riot before we are like Greece.

jm

May 8th, 2010
8:33 pm

I wonder if Mr. Wingfield is including “corporate dependence” when referring to the politics of dependence. Mr. Wingfield has made his position on the bailouts of Chrysler and GM well known but I would be interested in his opinion of the “incentives” given to Kia. I would also like to hear his opinion regarding price floors for agricultural goods. We all know where Saxby and Johnny stand on those issues (with hat in hand).

neo-Carlinist

May 8th, 2010
9:31 pm

Dusty, we have reached the “firebomb” stage (see: Joe Stack. see: Tim McVeigh. see: eco-terrorists burning new subdivisions and SUVs). we’re just a larger country (larger economy), so the “fire-bombings” are rarely the lead story on the 6:00 news. You need to let go of the Fox News talking points; “Obama wants to enact the European Socialist model…” He wants to enact a “model” that is left-heavy, but we need to worry about the USA and not what’s happening in Greece.

Working Mom

May 8th, 2010
10:12 pm

Real Athens……commented on the writing ability of another poster…….while he/her can not figure out how to post a comment only once. Yes, Real Athens, you are the smartest person alive. But we all know why you atteck the poster…….because you can not debate the facts.

luangtom

May 9th, 2010
12:30 am

On Saturday, one of the pundits on Bloomberg gave a synopsis of the Greece financial downfall, in his opinion. He certainly asked a valid question when he stated,”Why is the Greek financial dilemma having such an impact on the US stock-market? To put their default vs. GDP into perspective, the annual GDP of Greece is equal to that of Philadelphia, PA or Boston, MA. So, why is it so much of an impact on the US economy?” Well, experts, why is it? Why are we spending so much time analyzing the Greek economy when we need to revamp our own?

Michael H. Smith

May 9th, 2010
1:45 am

but we need to worry about the USA and not what’s happening in Greece.

Obumer and Democrat company are definitely socialist, leading this country toward socialism as they increase the size, scope and cost of government. This has nothing to do with Fox News; like it or not it has everything solely to do with their actions. We have a great deal to worry about over what is happening in Greece, not so much in the global distributive sense as now national economies are so intricately interwoven that they scantly maintain any economic sovereignty to provide any national immunity to a single one them. Point in case: Our federal reserve is moving in concert to what is happening in Greece, unbeknownst to most of us, whereas otherwise the fed would be taking different monetary actions presently based solely on our national economy.
Time and place serve little importance in the “Flat World”: Gone are the days of undulating economic terrains.

Why are we spending so much time analyzing the Greek economy when we need to revamp our own?

If this were a serious question it might require some time to depose of in a less abrupt manner: Very simply, it is our insatiable SPENDING, primarily on entitlements and government.

Michael H. Smith

May 9th, 2010
2:28 am

Expanding the trough: (oik, oik)

How do socialist deal with the runaway costs of entitlements: Create another entitlement of course.

How do socialist deal with the financial crisis: Create another government regulatory agency to aid the other failed regulatory agencies meant to prevent the financial crisis.

Isn’t the crony capitalism of socialism a wonderful thing?

Wonder why the Greeks are rioting in over in paradise?

“When the people find that they can vote themselves money, that will herald the end of the republic.”

~ Ben Franklin

Dave from GT

May 9th, 2010
9:13 am

Money in – Money out >/= 0 is ok. the amount > 0 is the subject of the debate, also where Money out goes to.

Money in – Money out < 0 is not OK and is unreal unless you factor in an institution like slavery.

CJ

May 9th, 2010
10:56 am

Sooner or later, you find out that, no matter how rich your nation, and no matter how clever the people running it, there isn’t enough money in the world to buy what you can’t pay for.

Words that carry little weight from somebody who supports Republican borrow-and-spenders to occupy the White House and lead the Congress.

AntiBoortz

May 9th, 2010
11:23 am

The problem in Greece isn’t that the Greeks are socialist but that they have been Something-for-Nothing-ists. Something-for-Nothing-ism is also modern America’s problem. Americans may disagree as to the proper role of government, and thereby disagree on the proper size of government, but Americans are practically unanimous in their belief that they shouldn’t have to PAY for government.

American take notice: pay up or shut up!

Michael H. Smith

May 9th, 2010
11:39 am

Something-for-Nothing-ists sums-up socialism very well.

Ninja

May 9th, 2010
11:40 am

I suppose the facts that Greece exports practically nothing and has a long history of governmental instability (almost as bad as Italy) have zero to do with the fact that they are collapsing. Oh wait, that’s EXACTLY why, and exactly why we will too. Not some socialist boogeyman. Your hackitude is showing again. But hey, the conservatives who lap up this drivel will never bother to look deeper, so why would you bother?

AntiBoortz

May 9th, 2010
11:56 am

MHS: Socialism may or may not be Something-for-Nothing-ism from the macroeconomic perspective. The question is whether society pays for what it gets?

Certainly from a microeconomic perspective in almost any system there will be some who are net receivers of benefits and others who are net providers. That is not the measure of what is socialism.

Net providers of benefits in America DO receive something of value. First among them may be domestic tranquility. Is a pacified underclass not a requirement of a peaceful capitalist system? I think that it is. The cost of this tranquility is really just another example of how in a capitalist society one must spend money to make money.

Michael H. Smith

May 9th, 2010
12:44 pm

The question is whether society pays for what it gets?

The answer is no. Additionally society cannot afford to pay for what you would want us to get as American society.

One that is wise and desires tranquility should never spend more than one is actually capable of paying for, which is what this blog has correctly stated. The Soviet Union tried getting more than it could pay for and it failed, Greece now has tried much the same thing and it cannot pay for what it is getting – everybody or nearly everybody has a union GUB’MENT job and everyone has entitlements.

How many times does socialism have to fail before people realize it is a failed system of value that can never sustain itself?

Now cut the entitlements down to size based on sound finance not a ponzi scheme. Put the entitlements in the hands of the people and not the government. Cut federal government down to appropriate size scope and cost.

Rev Al Sharptongue

May 9th, 2010
1:58 pm

I say cut the military budget in half, we spend more than the next top ten combined for defense.

If America would stop trying to spread its brand of white supremacy democracy around the world, most people would not want to attack us and no need to spend so much.

No one likes a bully and the U.S. is a bully thinking they can tell everyone how to run their country all the while stealing assets from those countries and working to destabilize them

Amerikkka, the great White Satan

Linda

May 9th, 2010
2:31 pm

Rev.@1:58, According to the terrorists themselves, they are attacking us because of who we are & what we represent, not because of where we are. Proof is that they are attacking innocent civilians on trips in countries where we have no military presence. They are attacking infidels, not merely soldiers.
As long as I, a woman, can drive a car, alone, sing, dance, vote, inherit, go to school, show my hair & legs, etc., they will continue to attack. Other than the 2 wars, we are present in no country that did not invite us.
We are not a “white” country. Where are all these countries where we “tell everyone how to run their country all the while stealing assets from those countries and working to destabilize them”? You can do better.

Michael H. Smith

May 9th, 2010
3:08 pm

Spending on the entitlements as a percentage of GDP is 9.9%. While spending on National Defense as a percentage of GDP is only 4.9%. Obama’s budget will reduce National Defense spending as a percentage of GDP to 3.5%

Defense Spending Has Declined While Entitlement Spending Has Increased

Spending on national defense, a core constitutional function, has declined significantly over time, despite wars in Iraq and Afghanistan. Meanwhile, spending on the three major entitlements—Social Security, Medicare, and Medicaid—has more than tripled and is rapidly crowding out other programs.

http://www.heritage.org/BudgetChartBook/defense-entitlement-spending

Robert

May 9th, 2010
3:57 pm

“When the people find that they can vote themselves money, that will herald the end of the republic.”

~ Ben Franklin

ABSOLUTELY!!!!!!

Linda

May 9th, 2010
3:58 pm

NJ Govt.Chris Christie said, “One state retiree, 49 yrs. old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension & health benefits. What will we pay him? $3.3 million in pension payments over his life & nearly $500,000 for health care benefits–a total of $3.8 M on a $120,000 investment. Is that fair? A retired teacher paid $62,000 toward her pension & nothing, yes, nothing for full family medical, dental & vision coverage over her entire career. What will we pay her? $1.4 M in pension benefits & another $215,000 in health care benefit premiums over her lifetime. Is it ‘fair’ for all of us & our children to have to pay for this excess?”

Our cities are broke & asking for bailouts from our states.
Our states are broke & asking for bailouts from the fed. govt.
States whose residents & leadership were prudent are bailing out (with their tax dollars) states whose residents & leadership were reckless.
The fed. govt. is broke & owes $13 T plus $106.6T in unfunded liabilities & continues to spend $ it does not have, for junk, prints money & borrows money from China & from the futures of our unborn children & grandchildren.

All the Progressives/Socialists/Marxists have to say is that the Tea Party participants are racists.

turpitude

May 9th, 2010
4:03 pm

God hates America…..

Jess

May 9th, 2010
5:48 pm

Linda,

Amen to your 3:58, but not to worry. Pay as you go is now the law of the land, and Obama’s deficit commission will rescue us from our excesses. We are in good hands.

No More Progressives!

May 9th, 2010
5:50 pm

pig trough

May 8th, 2010
11:30 am
The social rot of the USA occurred when so-called Christian conservatives supported cowboy capitalism with the pre-imptive war of choice over oil and oedipus hubris, leading to the slaughtering of hundreds of thousand civilian innocents,

Hundreds of thousands of civilian innocents? Where, pray tell, oh great sage. Methinks you’ve been reading the tabloids in the check-out line for too long.

Morrus

May 9th, 2010
6:42 pm

Curiously, in a supposed anti-incumbent year, most of the departing are not retiring but seeking higher office. We may recycle more than we replace. The bad news is that a frustrating 114 seats still have but one contestant. Two of them aren’t even incumbents, meaning they will affect state policy without being vetted by voters. And I have to think that we’d be better off if many had run instead for the Legislature — and cut down on the number running unopposed. Georgia’s problems are numerous. They aren’t going away. There’s too much stale thinking at the Capitol, on both sides of the aisle. New voices would be welcome.

Linda

May 9th, 2010
7:14 pm

Jess@5:48, Hogwash!

Michael H. Smith

May 10th, 2010
12:00 am

It is not so much what the President’s “deficit commission” will do as much as it will be how willing the Congress is to accept what the commission says must be done to bring federal government spending under control. That is the making of another blog topic suffice it to say.

On another topic: The supreme court justice selection of Elena Kagan was a wise choice, by far a better candidate and future justice than President Obama’s the last choice.

PS. No More, the worthless individuals in this country who cry “war of choice over oil” have no credibility and worse even less any “moral standing”, when these same worthless individuals decry any attempts of drilling for and using our own oil resources to transition from a foreign oil dependency in leading to an eventual transition to cleaner renewable sources of energy. Anyone who says Spill Baby, Spill has no moral right to cry “war of choice over oil” when it is they, YES THEY, who are most responsible for having made that immoral choice for all of us.

Drill Here, Drill Now; Drill Baby, Drill!

david wayne osedach

May 10th, 2010
8:36 am

We should learn from Greece’s problems. Someday we may be facing the same.

Horrible Horrace

May 10th, 2010
9:07 am

Splavistic

May 10th, 2010
9:48 am

The right-wing say they believe in being fiscally conservative…until it comes to a fat, bloated defense budget. Then, they’ll wreck the economy for the sake of the military industrial complex. Please, tell me ONE republican president who was truly fiscally conservative? I do believe it was Clinton who actually balanced our budget, finally. You just can’t spell conservative without ‘con’.

Jess

May 10th, 2010
10:21 am

Splavistic,

Clinton only balanced the budjet with Newt and company holding a gun in his back.

CJ

May 10th, 2010
10:58 am

Clinton only balanced the budget with Newt and company holding a gun in his back.

When Republicans both occupied the White House and dominated the Congress, they proved beyond a shadow of a doubt that their claims of fiscal conservatism were equivalent to the false claims of snake oil salesmen. When Cheney asserted that deficits don’t matter, Republican politicians sought to prove him right.

Complaints about necessary deficits under Obama ring hollow from those who consistently vote Republican since these voters couldn’t have cared less about unnecessary deficits and debt when a Republican occupied the White House.

Kyle Wingfield

May 10th, 2010
11:57 am

That’s right, CJ. Keep acting as if magnitude (i.e. http://bit.ly/awaJhl) doesn’t matter.

Boo got shot

May 10th, 2010
12:07 pm

Tucker and Bookman told me that Greece is doing great.

Horrible Horrace

May 10th, 2010
12:25 pm

Stinkin EuroTrash.

CJ

May 10th, 2010
2:10 pm

That’s right, Kyle. Keep acting as if the Republican president (i.e. Republican voters) was not responsible for the economic crisis that triggered the loss of revenue amounting to hundreds of billions plus necessary, temporary, and deliberate deficit spending to fill the gaping hole in private sector spending that resulted from supply-side economics.

Any suggestion that TARP/Recovery deficit spending is somehow the default position of Democratic administrations, even during stable economic times, grossly misrepresents which party is truly fiscally conservative and which party isn’t.

By the way, dismissing unnecessary deficits during under Republican rule as somehow small or inconsequential speaks volumes.

Kyle Wingfield

May 10th, 2010
3:04 pm

Your nonsensical attribution of the global financial/housing crisis to supply-side economics nothwithstanding, CJ, the biggest problem with your response is your use of the word “temporary.” As the chart shows, Obama’s budget plans would lead to deficit spending *every* year at levels that would have been record-setting in *any* year before 2008.

If you can read a chart, you can see that the “new normal” thanks to the Obama budget is deficit spending of a greater magnitude than even those awful Republicans achieved. Anyone who knows the difference between the words “bad” and “worse” can see the difference between Bush-era spending and Obama’s plans.

Linda

May 10th, 2010
3:20 pm

CJ@2:10, Keep acting as if the Dems were not responsible for the economic crisis. The Dems used Fannie Mae (& Freddie Mac) to promote Affordable Housing by:
‘91 initiated $10 B Opening Doors to Affordable Housing,
‘92 became the largest issuer & guarantor of Mortgage Backed Securities,
‘93 succeeds the Opening Doors goal of producing $10 B in purchases for low- & moderate-income & other special housing needs by July, more than 16 mts. ahead of time,
‘94 expanded the Opening Doors campaign by launching the Trillion Dollar Commitment by pledging $1 T in targeting housing finance that was to serve 10 million low- to moderate-income families,
‘98 announced natl. availability of Flexible 97, a new mortgage product designed to expand home ownership through a low 3% down payment requirement & reached $1 T in mortgage books of business outstanding,
‘99 changed its mission statement to “tear down barriers, lower costs & increase the opportunities for home ownership & affordable rental housing for all Americans because having a safe place to call home strengthens families, communities & our nation as a whole” (yeah, right), &
‘01 launched the American Dream Commitment, a 10-year, $2 T pledge to increase home ownership rates & serve 18 million American families, a project based on the:
Mortgage Consumer Rights Agenda
Natl. Minority Home Ownership Initative
Opportunity for All Strategy
America’s Living Communities Plan
eHomeownership
Affordable Rental Housing Leadership Initiative

ALL BEFORE BUSH!

retiredds

May 10th, 2010
3:39 pm

Yes, I agree, Kyle. There is an old adage, “you can’t have guns and butter”. You need to pay for one or the other. Also you shouldn’t cut taxes when waging war, much less two wars, with the pie in the sky notion that another’s oil will pay for the whole thing. Also a nation can’t keep funding “earmarks” (buying votes) forever as if the money grows on trees. Oh, my, as I write this I see the US of A (Republicans and Democrats) written all over it. I guess this leads to the other old adage, those who don’t read (or can’t comprehend) history are doomed to repeat it.

CJ

May 10th, 2010
5:17 pm

As the chart shows, …

We’ve been through this in a previous thread Kyle.

During the first years of the Clinton presidency, deficits were predicted for as far as the eye could see. Those predictions turned out to be wrong. For the first years of the Bush presidency, surpluses were predicted for as far as the eye could see. Those predictions turned out to be wrong. Yet you continue to treat such prognostications as if they’re as reliable as predictions of the sun coming up.

In short, you’re seeking to pin deficits on Obama and Dems that necessarily resulted from Bush’s Great Recession in addition to blaming them for deficits that simply do not exist.

Kyle Wingfield

May 10th, 2010
5:27 pm

CJ, I’m talking primarily about the years after 2012. That’s when the higher-than-before-2008 deficits become a way of life.

You’re right that those are predictions — predictions made by the CBO, based on the Obama administration’s own budget documents, and incorporating more-realistic assumptions about economic growth than the White House uses. So, tell us why we should expect the post-2012 deficits to fall even back down to Bush-era levels.

CJ

May 10th, 2010
5:51 pm

So, tell us why we should expect the post-2012 deficits to fall even back down to Bush-era levels.

Assuming Obama gets re-elected? Because where public policy is concerned, most Dems are, in fact, fiscally conservative and most Republicans are, in fact, not — as evidenced, in part, by the surpluses under Clinton and deficits under Bush.

With regard to the chart you linked to, I noticed that it’s already outdated. Your chart shows the CBO predicting a $1.85 trillion deficit for the fiscal year ending in ‘09 (if I’m reading it correctly), but the deficit turned out to be more than 20 percent less (approximately $1.4 trillion). http://bit.ly/a5hDFI

So with regard to the ‘09 deficit, whose assumptions where more realistic?

CJ

May 10th, 2010
5:57 pm

Correction. Whose assumptions were more realistic?

Kyle Wingfield

May 10th, 2010
6:22 pm

This contemporary Reuters report suggests the difference for FY09 resulted from lower-than-expected TARP spending: http://bit.ly/1dXs6A

The difference between WH and CBO projections for 2010 onward, OTOH, relate in largest part to projections of economic growth: http://bit.ly/cRMKLM

george

May 10th, 2010
6:47 pm

I wouldn’t look to Greece as a model of socialism, if there is such a thing. Of course I wouldn’t look to the U.S. in the last couple of years as a model of how “perfect” capitalism is. What has happened in Greece is most definitely a failed attempt at some idea of socialism but it certainly is not what international socialism aspires to. Elected officials in Greece are as corrupt as any and if we dug deeper in our own government I am sure we would find corruption aplenty. Greece’s difficulties seem to be a lack of unity and consistency. Lots of accommodations for businesses to escape their share of taxes, a strong underground economy that evades taxes, political appointments that create a bloated government, an economy that is simply not robust enought to support spending. Socialism does and can work where it is democratic and responsible. Look to socialist leaning societies of northern Europe for more successful implementation. Greece’s failures cannot be used to say that socialism won’t work just as our own failure cannot be used to say that capitalism won’t work. It isn’t that simple. If you are really interested in what socialism is really all about see:

http://socialistinternational.org/viewArticle.cfm?ArticleID=31

I am sure that in the U.S. we don’t want the kind of capitalism we have had in recent years. We want something better. The socialist world is not different.

joan1

May 11th, 2010
11:11 am

All I know is this. I am a 69 year old taxpayer, self-employed, paying about 50% of my income in taxes, including those self employment taxes. My back is breaking from this load and it just doesn’t seem fair to me that others live as well as I do, because they are subsidized by my work. I think it makes sense to retire.

CJ

May 11th, 2010
11:38 am

For Joan1’s benefit:

“Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman’s presidency, a USA TODAY analysis of federal data found…

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.”

http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm

Kyle Wingfield

May 11th, 2010
12:25 pm

CJ, these are aggregate numbers. What does the fact that a lot of people have lost their jobs or had their pay cut — thus moving them into lower tax brackets — have to do with the amount of taxes that joan1 pays?

CJ

May 11th, 2010
12:43 pm

It’s highly unlikely that joan1 pays 50 percent of her income in taxes. That’s the same figure that all Fox News addicts claim to pay because, well, they believe everything they hear on Fox News.

She’d have to be in the top income tax bracket to come anywhere close to that figure, and if she were, her back would not be “breaking from this load”, as she claims. To the contrary, she’d be doing quite well.

With regard to others being subsidized from her work, I assume she’s talking about agricultural subsidies, bloated military spending, nuclear subsidies, and investment tax breaks that increase the burden on those who make most of their income through employment.

Kyle Wingfield

May 11th, 2010
12:54 pm

joan1 is a big girl and can answer that argument — a wholly different one from your original one — if she wants. My point was that the USA Today article is irrelevant to her situation.

CJ

May 11th, 2010
1:05 pm

My point is that her situation, as described above, is one of make believe.

George Washington

May 11th, 2010
5:14 pm

The meltdown we are witnessing in Europe is only the tip of the iceberg.

The money isn’t real. We are witnessing the precursor to financial armageddon.

Ron Paul was right all along.

"Information becomes a distraction, a diversion, a form of entertainment"

May 11th, 2010
5:22 pm

Net Neutrality is government control, regulation and censorship of the internet. Oppose it with everything you can do. If you value your right to speak, read and communicate then call your Congressman and Senators. Call the White House. Call the FCC.

Tell them NO ! Hell No !!!

CJ

May 11th, 2010
5:53 pm

Food for thought:

“…19 months after Congress voted to spend $700 billion on the Troubled Asset Relief Program, we’re starting to get a long-term sense of the effort’s true cost, and its effect. And when you look at the amount of money that the government now stands to make back — not to mention the widespread expert view that the bailout succeeded in its prime purpose of stabilizing the economy — it could just be that we’ve been able to rescue our economy from the brink of a depression for a relatively low price. And so, an unlikely question arises: Was the bailout, far from being a disastrous, dishonest failure, really more like one of the most successful programs ever?”

http://tpmmuckraker.talkingpointsmemo.com/2010/05/could_much-maligned_bailout_be_more_like_a_stunnin.php

Oil Leak and Global Financial System

May 11th, 2010
6:25 pm

My Name says it all. They are identical.

joan1

May 12th, 2010
8:56 am

CJ: I spoke with my accountant today and she said that I was paying 50% due to the self employment tax as well as income tax, and you can add to those taxes, property and other taxes I pay. Yes, maybe taxpayers generally are paying less, but there are a few of us, and yes, we are the overachieving workaholics, who support an awful lot of people. You can quibble with this if it makes you feel better, but I am telling the absolute truth. If everyone worked as successfully and as long, and paid my taxes, we wouldn’t be in a ditch in this country. Well, I take that back. Congress would find a way to piddle off even a motherlode.

Kyle Wingfield

May 12th, 2010
10:44 am

Sorry, joan, but CJ said it’s not possible, so I’m afraid you’ll have to fire your accountant and hire CJ.

CJ

May 12th, 2010
11:06 am

I was paying 50% due to the self employment tax as well as income tax, and you can add to those taxes, property and other taxes I pay.

Sorry joan1. Not possible. Kyle’s absolutely right. You should fire your accountant.

CJ

May 12th, 2010
11:45 am

Incidentally Kyle, I gotta say that I’m disappointed that you would condone joan1’s ignorance. She dug in deeper by limiting the 50 percent figure to income/payroll taxes — something she didn’t do in her original post.

As you are well aware, or should be, the top income tax bracket for households is 35 percent (2009). Of course, assuming that only the standard deduction is applied (a generous assumption), households in this tax bracket would have an effective income tax rate that is somewhat lower. In addition, households in this tax bracket have income well in excess of the cap on social security taxes, thereby significantly reducing the effective rate on the self-employment tax.

50 percent? As I said. Impossible. You know better.

Kyle Wingfield

May 12th, 2010
1:28 pm

(Sighing) Ok, CJ, let’s do it as you say: only payroll and income taxes, and only the standard deduction. Let’s assume a single taxpayer, 69 years old, earning $200,000 a year (i.e. $189,250 taxable income after the standard deduction).

Self-employment tax ($200,000 x 15.3 percent) = $30,600
Federal income tax ($189,250 x 33 percent) = $63,083
State income tax ($189,250 put through Georgia’s ridiculous six brackets) = $11,182

$30,600 + $63,083 + $11,182 = $104,865, or 52.4 percent of $200,000

But as you say, it’s unlikely that someone earning $200,000 would only take the standard deduction. Let’s say she took twice the standard deduction, making her taxable income $178,500.

Self-employment tax still = $30,600
Federal income tax ($178,500 x 33 percent) = $59,500
State income tax = $10,537

$30,600 + $59,500 + $10,537 = $100,637, or 50.3 percent.

Oops! I forgot the president’s BIG middle-class tax cut! Make that tax figure $100,237.

Are these figures exactly right? I don’t know for sure; I’m not an accountant. But are they “impossible”? I doubt it.

Derek

May 12th, 2010
1:56 pm

WOW.

The AJC continually day after day pursues a culture of Race baiting, class warfare and irresponsible reporting ( if it can be called that). I will not allow myself to think that there are actually people out in Atlanta who harbor such ill will towards each other and even more so to the least of these among us. Call it socialism redistribution of wealth whatever, most good southern folks call it compassion.

I choose to believe that there is a system of bloggers employed by the AJC to write these horrible comments in an effort to get more activity on their site i.e. increase the number of clicks and amount of time spent on ajc.com. So please take these comments with a grain of salt Atlanta, GA is not full of class hating, racist, Corporate KKK members as the current discussion ( and almost every discussion on ajc.com) would have you believe.

I also know enough about life, Georgia and Atlanta to believe some of these comments are true and that is scary. Growing up in south GA I encountered racism / classism at an early age. Ironically enough the KKK and hate mongers stayed away from the minorities. They knew who we were we knew who they were, we knew what they were capable of and they knew what we were capable of. And my family was middle class, 2 – parent household, as were many of my friends, (don’t believe the stats about black men not being there a lot of the are were and will be in the future.) We (african American community in SE GA) were outnumbered by “poor” whites. But in Atlanta everyone acts like they harbor no ill will but get online and let the hatred fly. Some of these comments are eligible for prosecution under the hate crime statue!

A lot of things are wrong in this world, country, state but one thing that will not fix it is business as usually. Be it modern day slavery of black men with corrupt laws and enforcement coupled with slave labor ridden private controlled for profit prison systems. Or the vilianization of the Mexican immigration after we destabilize their country and in actuality stole their land from them at the same time “American” were stealing slaves from african, india and china. Business as usual from the same politician sometimes in the same family with the same mindset, that has not worked in three centuries. We have to have a positive outlook on life and how we approach the problems we face no matter what they are, for a time is coming when we will have to make an account. To our maker, to our family to our fellow man to ourself.

In His service!

Linda

May 12th, 2010
2:48 pm

Kyle, Whenever you are doing whatever you do when you are not doing it here, would you please pencil (or type) an article on the Chicago Climate Exchange. I have not verified what I have heard about it, but even if half of what I have heard is true, it’s not only a climate scandal that makes the UK’s Climategate a mere bump in the road, but will be the largest scandal in the history of the world.

It involves the president, a former vice president, the unions, Goldman Sachs, Fannie Mae, just about everybody except the pope & trillions & trillions of dollars.

It was reported in a Canadian newspaper a year ago & a newspaper in Cypress, Fla. has recently hit on it. Have you looked into it yet?

Pay Attention

May 12th, 2010
3:20 pm

Viva la revolution to Derek the Communist. Che Gavarra, Fidel Castro and Hugo Chavez are such great role models.

No wonder you whine and complain so much. Obviously, you can’t make it on your own merits so someone else owes you.

CJ

May 12th, 2010
4:37 pm

You forgot to run your fictional taxpayer’s income through the fed’s tax brackets. You also forgot to cap the amount ($106,800) to which social security taxes are applied. Running the calculations correctly, you should be able to reduce the total taxes in your standard deduction scenario by over $23,000 and reduce the effective tax rate by almost 12 percent.

As an aside, when a so-called conservative dismisses the significance of $275+ billion in tax cuts proposed and passed by Dems, one might reasonably infer that double standards are at play.

Linda

May 12th, 2010
4:47 pm

My grandson is in a 75% tax bracket since he will be required to pay back trillions of dollars in stimulus, health care, bailouts, 2-year unemployment extensions, mortgages, cars, caulk, etc. & he’s not even born yet.

Kyle Wingfield

May 12th, 2010
5:11 pm

That’s what I get for playing accountant while I’m doing something else.

So, the amount of income required to hit 50 percent payroll/income taxes is higher than $200,000 — probably closer to $400,000. At which point you would probably tell joan, “serves you right.” But that word “impossible” is still incorrect.

As for tax cuts, I have been very consistent in saying that not all tax cuts are equal. In fact, when I was applying for this job I wrote one of my unsigned columns about that very idea and those very tax cuts.

No incentives change in any meaningful, predictable or even measurable way when taxes are cut in this way. It’s no different from dumping cash out of a helicopter. It will have *some* impact, but it’s doubtful that the impact is significant.

For instance: What did you do with your $8 a week? And which of the recipients do you suppose anticipated that extra money and made any changes to their business accordingly?

Kyle Wingfield

May 12th, 2010
5:15 pm

And fwiw, I have no idea why your last comment didn’t go through the first few times you tried.

CJ

May 12th, 2010
5:55 pm

…not all tax cuts are equal.

On that we agree. For stimulative purposes, tax cuts tailored for stimulative purposes should be limited to households where the “marginal propensity to consume” is relatively high (which is why the Earned Income Tax Credit is so effective, as Ronald Reagan would attest). So, you’re right. A significant chunk of taxpayers receiving that “$8 a week” tax cut, including me, didn’t fall into that category.

That said, that $8 per week tax cut grew the economy by, give or take, about $8 per week (times millions of recipients) . Not as much “bang for the buck” as some of the other Recovery Act components (e.g, increase in food stamps, unemployment benefits, infrastructure spending, aid to states), but not as bad as other tax credits included in the Recovery Act either.

I could run the numbers on the $400,000 scenario, but I’ll spare us both. Just keep in mind that as income grows, the effective tax rate on payroll taxes falls.

Mahatma Gandhi

May 12th, 2010
6:12 pm

It is my firm conviction that if the State supressed capitalism by violence, it will be caught in the coils of violence itself, and will fail to develop non-violence at any time. The State represents violence in a concentrated and organized form. The individual has a soul, but as the State is a soulless machine, it can never be weaned from violence to which it owes its very existence.

I look upon an increase of the power of the State with the greatest fear, because although while apparently doing good by minimizing exploitation, it does the greatest harm to mankind by destroying individuality, which lies at the root of all progress. We know of so many cases where men have adopted trusteeship, but none where the State has really lived for the poor.

“Love thy neighbor as thyself” is no counsel of perfection. The capitalist is as much a neighbor of the laborer as the latter is a neighbor of the former, and one has to seek and win the willing co- operation of the other. Nor does the principle mean that we should accept exploitation lying down. Our internal strength will render all exploitation impossible.

It can be easily demonstrated that destruction of the capitalist must mean destruction in the end of the worker and as no human being is so bad as to be beyond redemption, no human being is so perfect as to warrant his destroying him whom he wrongly considers to be wholly evil.

Michael H. Smith

May 12th, 2010
6:26 pm

Kyle just fire CJ and have done with it. Democrats more fiscally responsible on public policy… oh hooey!

Democrat fiscal public policy irresponsibility in a word: Entitlements.

What are the unfunded liabilities facing Social Security, Medicare and Medicaid? There is your Democrat public policy fiscal responsibility and now, NOW, the numbers are not adding up on the newest Democrat entitlement: ObumerCare.

Oh one other thing Kyle, the latest mantra on Greece is “Too Big To Bail”. Watch out U.S. taxpayers we’re probably getting ready for the mother of all bailouts: The EU.

Peter

May 12th, 2010
6:28 pm

Funny stuff Dusty…….

Dusty

May 8th, 2010
11:36 am

Well, THANK YOU, Kyle. This is one great sensible commentary. If only our government would listen to the voice of reason. But I fear they are deaf to any moderate voice. The reduction of debt by stringent sensible means does not seem to appeal to Democrats. It obviously does not appeal to Greeks.

Bush is the ONLY American President to Cut taxes, and start a WAR…..

Please do not ever say Republican’s are Fiscally responsible, unless you cross your fingers, or pray to God about your lies.

Peter

May 12th, 2010
6:30 pm

Hey ….. Michael H. Smith…… When the cost Plus contracts for Haliburton and the like were written in Cheney’s office……that was not Entitlement ?

HA HA HA……funny stuff you write !

Michael H. Smith

May 12th, 2010
6:37 pm

Hey Peter, you are the funny stuff. Compare the costs of entitlements.

Michael H. Smith

May 12th, 2010
6:48 pm

Defense Spending Has Declined While Entitlement Spending Has Increased

Spending on national defense, a core constitutional function, has declined significantly over time, despite wars in Iraq and Afghanistan. Meanwhile, spending on the three major entitlements—Social Security, Medicare, and Medicaid—has more than tripled and is rapidly crowding out other programs.

http://www.heritage.org/BudgetChartBook/defense-entitlement-spending

Peter

May 12th, 2010
6:54 pm

Hey Michael H. Smith…..so what did a 3 trillion dollar war do to help the average American ? 3 Trillion dollars…….you compare the costs.

Michael H. Smith

May 12th, 2010
6:58 pm

Peter that is not the actual cost as Brucie Wilcox stated and has been corrected many times in the past with actual government figures.

By the way Peter the unfunded liabilities of the entitlements far exceeds $ 3 Trillion.

Michael H. Smith

May 12th, 2010
7:01 pm

Budget Office Clarifies Health Care Costs Update

Earlier this week, the Congressional Budget Office released an analysis listing at least $115 billion in spending under President Barack Obama’s health care law that was not fully accounted for at the time Congress passed the legislation.

http://abcnews.go.com/Business/wireStory?id=10630665

Michael H. Smith

May 12th, 2010
7:17 pm

Social Security and Medicare Projections: 2009

The 2009 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programs has reached nearly $107 trillion in today’s dollars! That is about seven times the size of the U.S. economy and 10 times the size of the outstanding national debt.

The unfunded liability is the difference between the benefits that have been promised to current and future retirees and what will be collected in dedicated taxes and Medicare premiums. Last year alone, this debt rose by $5 trillion. If no other reform is enacted, this funding gap can only be closed in future years by substantial tax increases, large benefit cuts or both.

http://www.ncpa.org/pub/ba662

Peter

May 12th, 2010
7:24 pm

Yes….. the unfunded SS debt, is money stolen from the account by past Presidents…….American’s are mandated to pay that money in, and personally I have paid in over 200K…..will I see most of that money ?

Please do not ever state the Republican’s are Fiscally responsible……. So what was the War for ?

Answer…. so oil companies can get at the Iraq Oil, since they were not able to bid on the oil when Saddam was in power.

So why did Bush cut taxes and start a war…answer because he was not fiscally responsible.

What did his dad say…..”Read my lips I will not raise taxes.” Then he did…….

Why did Cheney’s office write cost plus contracts ? Because he didn’t mind Bilking American’s.

Michael H. Smith

May 12th, 2010
8:10 pm

Please do not ever state the Republican’s are Fiscally responsible……. So what was the War for ?

Peter, you need reading comprehension lessons, as well as correcting at this moment, I rebutted CJ’s comment about Democrats being MORE fiscally responsible on public policy. I said nothing about Republicans. Go find where I did Peter, now that you have misspoken – again.

And this particular blog subject is not a debate on Iraq, or Bush raising taxes, get a clue. It is about government dependency like that which has taken place in Greece and threatens to destroy that country.

Neither political party gets a pass from me on spending but these socialist Democrats are not fiscally responsible on public policy in the least.

Linda

May 12th, 2010
10:06 pm

According to costofwar.com, the wars in Afghanistan & Iraq have cost us almost a trillion dollars. The cost of both wars for 15 years total as of 2/09 when the economic stimulus bill was passed was equal to the cost of the stimulus bill. It seems to me that the legislators that voted for the single most expensive piece of legislation passed in the history of our country, probably in the entire world, could have at least read it.

As long as we’re buying oil from the Middle East, we’re actually paying for both sides of the war. Does that make common sense?

Peter

May 13th, 2010
8:47 am

Hey Michael H. Smith I agree neither party is fiscally responsible…… Republican’s the least.

They have created the largest government ever, and failed miserably at keeping spending down over the last 8 years.

joan1

May 13th, 2010
10:36 am

What is wrong with this country is exemplified by the 4th Congressional district race here. The Dems have Hank Johnson and Vernon Jones running, and the Repubs have a couple of guys (names unknown to me). But it doesn’t matter who the Repubs run, the Dems will win because they are black and this is Dekalb. And both the candidates are either idiots or crooks. Go figure how our government got so bad.

Michael H. Smith

May 13th, 2010
3:47 pm

Socialist Democrats are the least fiscally responsible!

john

May 13th, 2010
4:29 pm

Great article Kyle: I know, it is exhausting arguing with Democrats…

Thanks for actually presenting facts, unlike Democrats who just blatantly lie and spew “talking points.” One poster on here mentioned how the US has murdered “hundreds of thousands” of innocent civilians…were they referring to World War 2? No, they were actually talking about Iraj and Afghanistan….Of course, civilian casualties are far, far, far less than than…but again, forget those silly little facts

Peter

May 13th, 2010
7:41 pm

Hey Michael H. Smith….Republican’s the worst Fiscally responsible folks.

Please tell us how the Iraq war helped American’s.

Thank you.

Michael H. Smith

May 13th, 2010
7:48 pm

Peter tell us how you think Iraq has anything to do with government dependency and out of control government spending on entitlements.

Thank you.

PS. Oh and be sure to vote @ YouCut http://republicanwhip.house.gov/YouCut/

J. D. W.

May 14th, 2010
7:31 am

Your last comment was, if possible, the most true—-”you can’t buy what you can’t pay for”—and something taken but not payed for is just stolen…nothing fancy there.

Kyle's Korner

May 14th, 2010
10:15 am

no.. No. NO!

Derivatives are necessary for growth. The market cannot betray itself. The market does not play dice with hedge bets. The markets provided the global economy that has been dealing with the bailouts. The markets have already discounted the corruption and the incompetence. Human nature is built into the market cycle. Have faith.

That the trillions of dollars in derivatives is a human construct doesn’t mean that it’s not real. Time is a human construct, yet try being late for a job interview, and see how you fare.

The global market is going to reveal even more bizarre financial anomalies that are as organic as the exotic particles we find in nature as we look ever-larger (and smaller) into the universe.

So why don’t you all just go scratch your lottery tickets and howl at the moon, and leave the complicated issues about our economy to the cool people like moi?

morons

CJ

May 14th, 2010
10:57 am

Paul Krugman posted on the silly comparisons between Greece and the U.S. today:

“…investors see a high risk that Greece will eventually default on its debt, while seeing virtually no risk that America will do the same. Why?

One answer is that we have a much lower level of debt — the amount we already owe, as opposed to new borrowing — relative to G.D.P. True, our debt should have been even lower. We’d be better positioned to deal with the current emergency if so much money hadn’t been squandered on tax cuts for the rich and an unfunded war. But we still entered the crisis in much better shape than the Greeks.

Even more important, however, is the fact that we have a clear path to economic recovery, while Greece doesn’t.

The U.S. economy has been growing since last summer, thanks to fiscal stimulus and expansionary policies by the Federal Reserve. I wish that growth were faster; still, it’s finally producing job gains — and it’s also showing up in revenues. Right now we’re on track to match Congressional Budget Office projections of a substantial rise in tax receipts. Put those projections together with the Obama administration’s policies, and they imply a sharp fall in the budget deficit over the next few years…”

http://www.nytimes.com/2010/05/14/opinion/14krugman.html?ref=opinion

CJ

May 14th, 2010
11:16 am

Kyle: “Sooner or later, you find out that, no matter how rich your nation, and no matter how clever the people running it, there isn’t enough money in the world to buy what you can’t pay for.

Actually, it looks like Krugman read Kyle’s post (or posts by others distributing right-wing talking points) –

“‘We demand more than we’re willing to pay for,’ is the usual line. Yet that line is deeply misleading.

First of all, who is this ‘we’ of whom people speak? Bear in mind that the drive to cut taxes largely benefited a small minority of Americans: 39 percent of the benefits of making the Bush tax cuts permanent would go to the richest 1 percent of the population.

And bear in mind, also, that taxes have lagged behind spending partly thanks to a deliberate political strategy, that of ’starve the beast’: conservatives have deliberately deprived the government of revenue in an attempt to force the spending cuts they now insist are necessary…

…we should ignore those who pretend to be concerned with fiscal responsibility, but whose real goal is to dismantle the welfare state [e.g., Social security and Medicare]— and are trying to use crises elsewhere to frighten us into giving them what they want. ”

http://www.nytimes.com/2010/05/14/opinion/14krugman.html?ref=opinion

Michael H. Smith

May 14th, 2010
1:23 pm

Yeah who is the “WE” and what do they not trust ?

Nearly 80 percent of Americans say they can’t and they have little faith that the massive federal bureaucracy can solve the nation’s ills, according to a survey from the Pew Research Center that shows public confidence in the federal government at one of the lowest points in a half-century.

http://www.msnbc.msn.com/id/36629520/ns/politics/

Time to cut, cut, cut, cut and cut some more BIG GUB’MENT. Restore fiscal responsibility and then perhaps the nearly 80% of Americans will have a reason to trust government when it is no longer the beast that consumes their wealth, takes their liberty and rightly earns their angst.

When government fears the people there is liberty, when the people fear their government there is tyranny!

Peter

May 17th, 2010
10:36 am

Another example of Republican thrift…..

Gov. Perry’s temporary digs costs Texas big bucks

By JAY ROOT, Associated Press Writer Jay Root, Associated Press Writer – Mon May 17, 5:35 am ET
AUSTIN, Texas – With the state facing a budget shortfall of at least $11 billion, Texas Gov. Rick Perry has spent almost $600,000 in public money during the past two years to live in a sprawling rental home in the hills above the capital, according to records obtained by The Associated Press.

It costs more than $10,000 a month in rent, utilities and upkeep to house Perry in a five-bedroom, seven-bath mansion that has pecan-wood floors, a gourmet kitchen and three dining rooms. Perry has also spent $130,000 in campaign donations to throw parties, buy food and drink, and pay for cable TV and a host of other services since he moved in, the records show.

The public spending on Perry’s rental comes as the state grapples with a budget shortfall forecast to reach at least $11 billion over the next two years. Perry has asked state agencies to cut their budgets by 5 percent and the Republican House speaker has begun to consider furloughs and shortened workweeks for state employees.

The Great Republican lie is all about us…..

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