If liberals agree to balance the budget, what will they give up?
The next substantive move in the nation’s debt-and-deficits debate is up to liberals. But they’re not going to like it.
That’s because they’ll have to stop pretending they can be all things to all people, and decide which parts of their National Greatness Liberalism vision to give up.
This has more to do with math than politics. But it helps that politics has brought the math into focus.
By rights, House Republicans should not have been able to dictate the terms of the debt-ceiling deal the way they did. If Newt Gingrich couldn’t govern the country from Capitol Hill in 1995, John Boehner shouldn’t have been able to do it from one side of the hill in 2011.
He managed it not due to tea-party terrorism, but because even Democrats must know most of the public finds it silly to decry $1 of cuts in a decade for $1 of new debt in 18 months. There is a limit after all.
Determining what that limit is, and what fits under it, are the next big questions. What’s the limit? Let’s return to math.
Since the income tax’s creation, federal revenues have hit 20 percent of gross domestic product just three times: in 1944 and 1945, at the height of the war effort, and in 2000, when tech stocks were at their most bubblicious. Revenues have never touched 21 percent, no matter how tax rates rise and fall on millionaires or corporate jets.
True, the Congressional Budget Office has one forecast that puts revenue and spending alike at 23 percent of GDP by 2035. But reality won’t match this forecast, for two reasons:
First, as CBO itself acknowledges, lawmakers are unlikely to let tax policy stay on auto-pilot. For example, they’ll probably keep fixing the alternative minimum tax so that it doesn’t suck in the middle class.
Second, CBO forecasts do not try to take account of the ways tax policy affects taxpayers’ behavior. And changes in taxpayers’ behavior have always prevented revenues from rising as high as predicted.
CBO’s alternative scenario has tax revenues settling near their historical average at 18.4 percent. That’s more realistic. To balance the budget, as everyone claims to want, spending must stay around that level.
That brings us to: What fits under the limit? Which is a problem for the big spenders, because neither CBO scenario envisions spending so low.
In fact, spending on entitlements alone — Social Security, Medicare, Medicaid, the children’s health insurance program and Obamacare — is expected to hit 15 to 16 percent of GDP in the years to come as the population ages. Their take has already surpassed 10 percent.
Even if the defense budget shrinks to late-Clintonian levels, that will leave virtually nothing for everything else the federal government now does.
Lately, Democratic leaders in Congress and activists have said “no” to real entitlement reforms. President Barack Obama says he’s open to reforms, but he also wants to spend hundreds of billions on new projects such as high-speed rail.
Which brings us back to National Greatness Liberalism, and its dual themes: that the nation prospers via government “investment,” and that government should use this prosperity to take care of the less prosperous, a group whose membership requirements are forever defined down.
Math is making a fiction of the idea that these themes can co-exist. Politics dictates that liberals begin making some choices. Otherwise, we can settle in for many reruns of the debt-ceiling drama.
– By Kyle Wingfield
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356 comments Add your comment
MarkV
August 6th, 2011
7:35 pm
The truth @7:27 pm:
First of all, I would never say that Republicans are not good people or crooks. That would be the kind of generalization I detest. I was writing about some very vocal people in these blogs.
Why many people vote for Republicans? There are many reasons, but one that has been important lately is that people are uninformed. They see only the surface of things. They see only that there is high unemployment, deficit and debt, and they do not inquire or think much about how it has happened. They just blame the government, and vote against it.
Linda
August 6th, 2011
7:35 pm
The truth@6:50, My perspective is different from yours. My father never walked a step in his life, was deformed, drove a car with a stick, sold products yard to yard (rather than door to door) by a toot of his horn, could not afford a wheelchair until he was 40, never met a person who was less deserving than he was, became one of the most respected businessmen & donors in his town & county, was honored by governors & never received a dime from the govt. until he retired.
There is much blame to go around for the economic crisis & much has been written about it. If you begin in Chapter One, Page One, you will learn that it would have NEVER happened had the Democrats during Clinton had not woke up one morning & said, “Home ownership is a right!” That was the catalyst, the spark, the fuse that started the whole shebang.
What scares me the most is Obama deciding what is fair. Isn’t that for congress or a king to decide?
No one in this country is starving & no one is denied health care. As long as the fed. govt. is paying people not to work, giving them food stamps & giving them free health care, the economy will continue to stagnate but those recipients will vote Democrat. It’s a lose/lose situation, both for them & for our country.
Mama Says
August 6th, 2011
7:41 pm
As a conservative I will give you libs this. I will give you 800 billion off the defense budget if you give me 800 billion in tax cuts. Or better yet I will give you 800 billion off defense if you give me 800 billion out of the department of education. In the 2nd option the money taken from each state can stay in the state where they can spend it on education and Washington dosen’t even have to touch it. Heck you can even keep your federal regulations on how each state has to spend it, as long as it is on education.
Lil' Barry Bailout (Revised Downward)
August 6th, 2011
7:41 pm
“Woodstock Dem”? Ain’t no such thing.
MarkV
August 6th, 2011
7:45 pm
Mama Says (7:31 pm) sings the familiar tune about how the government should be like individual people and families. There are many things wrong with these comparisons, but let’s look at it in that perspective. Why would increasing revenue not be at least one of the choices? In terms of the family, it would be working another job. In terms of the government, it is asking people who can afford it to pay more taxes.
Stop spending? What if that spending gets you more education and therefore more income, even if you have to go more in debt now? For a business, why not invest with borrowed money to make more profit later? Why not go more in debt if your roof is leaking to prevent the house getting destroyed – which is what investing in infrastructure is an equivalent of in terms of the government?
Linda
August 6th, 2011
7:46 pm
The truth@7:13, Are you for real? “Dems. who want to pay off that pile of Rep. debts?” Where have you been for the last 2 1/2 yrs., especially for the last few weeks? Our debt crisis is not racial!!!!!!!!
Lil' Barry Bailout (Revised Downward)
August 6th, 2011
7:47 pm
Seems to me we might have fixed the roof with some of the nearly $4 trillion we spend every year.
MarkV
August 6th, 2011
7:48 pm
“No one in this country is starving..”
If you want to see the blindness of some conservatives expressed in five words, this is it.
Mama Says
August 6th, 2011
7:49 pm
Oh yeah, (I lost focus fro a min) You libs that yell and scream about rich paying taxes. when are you gonna get on Obama for letting GE pay $0.00 in taxes ?
Boy you guys are really hot about that ain’t you ?
Obama puts the CEO of GE on a board to keep jobs in the U.S. as that CEO is shipping dollar after dollar off shore to avoid taxes all while cutting 10,000 jobs in the U.S.
COME ON GUYS GET MAD ! oh wait you only do that if it is republicans doing that stuff.
By the way who pays the higher amount of taxes ? the rich or the poor ? if any of you actually believe it’s the poor you shouldn’t be allowed to come out of your mental wards
marko
August 6th, 2011
7:51 pm
The economy is in ruins, millions are out of work and senior citizens face a less secure future. At least Kyle seems to be enjoying himself. Congratulations government is wasteful, inefficient and incompetent. Anything else we can’t do Kyle? We elected men and women that didn’t believe government could do anything and they’ve pretty much proven their point. I can hardly wait until we discover the next thing We the People can’t do. Normally, given the rather dire situation we’re in , I’d suggest that somebody something. On the other hand, we can’t do anything right so maybe we shouldn’t do anything at all. At least Rick Perry is praying for us. God I hope that works out better for us than ghost dancing did for Sitting Bull.
Mama Says
August 6th, 2011
7:52 pm
Mark I can answer you if you really want to talk about the problem, or are u baiting me ?
Mama Says
August 6th, 2011
7:55 pm
Mark V where are u
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
August 6th, 2011
8:00 pm
Would someone do me a favor and please name one socialist government that hasn’t ended in economic ruin and shambles?
Just being nostalgic now that the United States has become another failed attempt at it.
Thanks, I’ll be patient in waiting for your answers.
clem
August 6th, 2011
8:03 pm
what’s a matter barry, have degree envy…..
The truth
August 6th, 2011
8:07 pm
Linda
“No one in this country is starving & no one is denied health care.”
Wow!…SMH
And you never answered my question, If a Hard working person is laid off due to the economy, do they deserve food stamps and unemployment?
Linda
August 6th, 2011
8:08 pm
Like I said hours ago, the progressives’ answer is to spend even more money, to go into more debt to receive “more education,” when the Dept. of Education has never improved education in any way, shape, manner or form, from its inception. All it has done is dumb down Americans. That was its intent. We removed the Pledge of Allegiance, the display of the American flag & the right of the morning prayer. Progressives changed the history books. George Washington is known for his cherry tree episode rather than the Father of our Country & FDR is characterized as ending the Great Depression with spending rather than what actually ended it, the onset of WWII. Schools are now teaching union history, homosexuality, social justice, ecological justice & economical justice. Progressives have gotten here by nudges.
It’s time to take our country back from the progressives.
Mama Says
August 6th, 2011
8:12 pm
Ok I will argue with myself.
As a man who was 30,000 in debt I had to adjust. The wife and I cut out Fast Food, vacations (for 4 years), cable TV, shared one car, cut our phone service, our internet service and our grocery list. We stopped buying cheese grits and soft drinks. We drank tap water instead of bottle water and I refinaced the house and 20,000 of the credit card debt.
I am still not out of debt but I have reduced it to 16,000 over the last 5 years. That reduction allowed to actually (true story) put a new roof on our house and replace the construction grade carpet with hardwoods. Because I saved money and paid for them—I DID NOT FINANCE THE NEW PURCHASES. NOR did I get a 2nd job. I did not want to miss my child grow up so I gave up the extras, spent only on what I had too.
The government can do that as well. The Department of Education takes money from each state in taxes and then gives it back to the states in the allottments it wishes. Why can’t the states keep that money.. I understand that would cut 1.4 trillion out of the federal need. I will give u another. The Department of Defense—–I will give you 1 trillion in cuts, we would still be the biggest spender on the military in the world.
Meet me half way–cut your federal education department—-make the state education dept’s bigger (with their own money) and I will give you the 1 trillion that goes to the military BUT you can only spend that 1 trillion on deficit reduction, it goes nowhere else until the debt is retired. When it is retired you give me that 1 trillion in tax breaks for ALL OF US.
THE DEBT IS PAID OFF, More eduction money stays home and we all get tax breaks—is that cool ?
Linda
August 6th, 2011
8:13 pm
The roof leak is a great example. The Dems. “fix” the leak by placing a bucket on the floor. The fed. govt. repairs the ceiling before addressing the real problem. Reps. remove the tree off the roof & then repair the hole in the roof before repairing the sheetrock.
Obama’s leadership has NOT addressed the real problem nor offered any solutions.
marko
August 6th, 2011
8:15 pm
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin, France, Germany, Sweden, Norway, the Netherlands. Are you really serious?
the red herring
August 6th, 2011
8:15 pm
tea party is 100% correct—the liberals and Rhinos are spendaholics and must be brought under control. until spending is reigned in we have no chance at running this country in a fiscally sound fashion. people who are paid not to work will not work. people who are given free meals and health care will not work for their food and health care. we in the u.s.a. were given the right to pursue life, liberty, and happiness—we were not given the right to free food, free health care, and to pay no taxes as 50% of the nation now does.
MarkV
August 6th, 2011
8:18 pm
Mama Says @7:55 pm: Sorry, I had to go away from the computer. Can be here a little while now.
Mama Says
August 6th, 2011
8:19 pm
K, well what do you think
Linda
August 6th, 2011
8:21 pm
Truth@8:07, The fed. govt. should take care of orphans, the disabled & veterans. The fed. govt. should provide a safety net for the unemployed, but for 2 yrs.? Are you kidding?
The truth
August 6th, 2011
8:25 pm
Mama Says
August 6th, 2011
8:12 pm
I think you over spent just like Bush did!
Linda
i guess you don’t want to answer my question because it could make you look like a very bad person!..I changed it up for you
If a WHITE man lost his job does he deserve Food stamps and unemployment benefits until he finds a job?
The truth
August 6th, 2011
8:26 pm
Linda
August 6th, 2011
8:21 pm
Even if the person is loking for a job and can’t find a job?..WOW!..you are an angry mean battered women!
Mama Says
August 6th, 2011
8:29 pm
Mark V,
I will even give you seasonal work visa’s on immmigration if you give me a flat or fair tax so we all share in the tax burden AND those illegals who are here now can naturalize upon reporting—I don’t even want to fine them for coming in illegally in the first place. But they do have to swear to the nation and take a course in English
MarkV
August 6th, 2011
8:31 pm
Mama Says @ 8:12 pm:
Sorry, mama, but I do no think much of your ideas. First of all, using anecdotal evidence – what your family did – as a recipe for the country economics is, to be generous, simplistic. I used some simplistic comparisons myself, but they had a general meaning as well.
I will say openly that I have no opinions regarding the Dept. of Education. I do not know enough on the subject. And therefore I will not comment. As for the defense budget, my heart would be with you. “I will give you 1 trillion in cuts, we would still be the biggest spender on the military in the world.” But realistically, it would not work. While I am in principle for reducing the US military involvement in the world, I also realize that much of the defense money actually goes to Americans. Something should be done with that budget, but in a way that will not do more harm than good.
Mama Says
August 6th, 2011
8:33 pm
No, “The Truth” I lost my wifes salary when she wrecked her car and had quit her job because she couldn’t take medication and work—–and we have been denied benefits 4 times because of my salary. Of course we could divorce and she would be elligible
MarkV
August 6th, 2011
8:35 pm
Mama Says @8:29 pm:
Again, I am half way with you, half way against. I agree with what you write about illegals. I think both flat and fair tax are bad ideas. That would be a subject of a long discussion, which I will not be able to do tonight.
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
August 6th, 2011
8:36 pm
France, Germany, Sweden, Norway, the Netherlands. Are you really serious?
That’s what I thought, dummycrats really do see a turnip in every pot as some kind of economic success story.
They have no freaking idea what the American dream is, well, other than an 88 Buick LeSabre with 24″ wheels.
How did Germany get on your failed state list, stooge?
Linda
August 6th, 2011
8:38 pm
Mama@8:12, What peaked my interest was your reference to bottled water, most of which is labeled as coming from municipal water sources, that sells for many times the cost of tap water. What is Evian spelled backwards? Do you also buy organic vegetables & free-range chickens?
Mama Says
August 6th, 2011
8:41 pm
Mark, as a conservative I too want to help people but my arguments are based on the beliefs that we help by taking less. If you cannot even agree with me in cutting the military b/c it will hurt those employed in it, then you cannot make an argument to cut anything b/c your baseline is based on who gets the money rather than the need for the service provided. I guess this is a bottom line difference between parties
Mama Says
August 6th, 2011
8:44 pm
linda,
i would eat free range chickens but most of them pearch on top of my house. Since Iam afriad of heights I cannot catch them to pluck them
Mama Says
August 6th, 2011
8:46 pm
Naive, Linda are saying I would believe anything ? I just got that
MarkV
August 6th, 2011
8:48 pm
Mama Says @8:41 pm: I did not say I would not want to cut the miltary – as a matter f fact, I would. All I was saying was that just throwing in a number, such as 1T for such a cut, was hardly sensible without some analysis, and that the effect on employment must be at least taken into consideration.
Got to go.
Mama Says
August 6th, 2011
8:48 pm
Niave, Linda are you saying I would believe anything ? That hurts my feeling
Mama Says
August 6th, 2011
8:51 pm
Mark The # comes from he proposal which is part of the budget agreement. Failure to cut more spending will trigger 800 million in military cuts—-I rounded up since we will still be twice as bigger spender than China the 2nd highest spender now–behind us
Mama Says
August 6th, 2011
8:53 pm
goodbye all—-you too Linda
Linda
August 6th, 2011
8:54 pm
The truth@8:25 & 8:26, I answered your question from the bottom of my heart. When you start insulting me, as all liberals do when they cannot argue the facts, begin calling me a “very bad person” & an “angry mean battered women (woman),” you loose the privilege of discussing a critical problem in our nation in a rational exchange of ideas with those whom you disagree with.
The debate has absolutely nothing to do with skin color & everything to do with problem-solving, which Obama has no clue to & neither do you.
Linda
August 6th, 2011
8:59 pm
Mama, I can tell you that you are wasting your time. Many on this blog have been there, done that. It’s hopeless & helpless. You are being set up. You will be insulted like you have never been before.
The truth
August 6th, 2011
9:03 pm
Linda
August 6th, 2011
8:59 pm
you represent what’s wrong with America..your main objective in life to blame everything on the poor!..good luck in life, I will not be responding to you any more!..i do not talk with bad hearted people!
Linda
August 6th, 2011
9:16 pm
Mama@8:44 & at your other posts. Bless your heart over & over again. I know you are not for real, but real you are. I know I didn’t hurt your feelings. Go girl, whoever you are.
Thanks for setting up that liberal & for contributing to this blog.
Linda
August 6th, 2011
9:23 pm
The truth@9:03, Good riddance! Did you expect me to cry in my sleep over loosing the hassle of communicating with a racist/socialist/progressive/fascist/Communist?
Chiqueena
August 6th, 2011
9:30 pm
“This has more to do with math than politics. But it helps that politics has brought the math into focus.”
And Standard&Poor’s REALLY brought it into focus. I love it that the Obama administration stupidly tried to talk S&P out of downgrading our debt. S&P is concerned with reality, not phony baloney political spin and bogus projections.
If the other two big rating agencies follow suit and downgrade U.S. debt the s##t will hit the fan like we’ve never seen.
Shovel Ready Jobs and other Tales
August 6th, 2011
10:09 pm
From the wiki: Economist Joseph Stiglitz stated: “I view the rating agencies as one of the key
culprits…They were the party that performed the alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the rating agencies.” Without the AAA ratings , demand for these securities would have been considerably less. Bank writedowns and losses on these investments totaled $523 billion as of September 2008.
S&P had a clear responsibility in selling America on bad goods. Here’s an idea everyone: S&P is owned by Mcgraw-Hill. I suggest a nation-wide boycott of all their products and let’s put this “ratings
agency” out of business. Pass it along and let’s get a movement going. There’s no question the US has been fiscally irresponsible, but S&P having the audacity to downgrade our credit worthiness is pure hypocrisy which WE THE AMERICAN PEOPLE SHOULD NOT TOLERATE. Burn their house
down!
Rafe Hollister
August 6th, 2011
10:13 pm
Question for the Obama supporters. During the 2010 election, Barry often spoke of how the car was in the ditch when he was sworn in. He said we got the car out of the ditch and we are moving forward and the other folks want to get back in the front seat, “but we ain’t letting em”. We are driving this thing.
Well, as best I can tell, we are back in the ditch and the other folk had to sit in the back seat like he commanded. I think a new driver might be best for all concerned.
Lil' Barry Bailout (Revised Downward)
August 6th, 2011
10:27 pm
Shovel Ready Jobs and other Tales
August 6th, 2011
10:09 pm
—————————-
Wake up and smell the coffee. Obozo has accelerated spending and blown up the deficit to such an unprecedented level that it threatens our whole economy. You’re in denial and wish to shoot the messenger.
Lil' Barry Bailout (Revised Downward)
August 6th, 2011
10:45 pm
Central planners love to trot out the Great Depression as evidence of market failure, but massive tax hikes by Herbert Hoover (including new tariffs) and a central bank veering erratically from easy money to tight conspired to doom the economy. Franklin Roosevelt’s public works programs did little to reinvigorate the “animal spirits,” merely misallocating more resources to the government. By 1938, unemployment was still hovering near 20 percent. Moreover, FDR’s horse trading of industry cartels for federal collective bargaining rules froze an already uncertain business community.
But, hey, you can always blame it on the market.
http://www.startribune.com/opinion/otherviews/126863368.html
bill
August 6th, 2011
11:10 pm
Democrats are the ones who put most of the loop holes int he tax codes. You want to tax business democrats? Let’s start with the UNIONS!
No more tax exempt status for unions!
Unions rake in billions and pay nothing.
Almost every business that is buddy buddy with Obama is either getting tax dollars or not paying.
Aug 7th 2011 | Rebellion News
August 7th, 2011
1:03 am
[...] If liberals agree to balance the budget, what will they give up? [...]