Highly Progressive Approach to Deficit

I too would have preferred universal healthcare. This is exactly what Obama should have done:

Instead of fighting for a new program, work on entitlement reform in his second year. Make SS and both Medis solvent. To do that, enact a public option/single-payer through a Medicare-for-all program. Do this for the purposes of making it solvent (more people paying in) and to shore up gaps in coverage for Americans. Ultimately it works to reduce our deficit and framing it as such makes it less controversial. Also, Medicare is well known and well respected. People will prefer that over a new program.

 

I'm not sure how you come to that conclusion. The 2007 budget deficit was $161 billion. That was with no war tax, two wars going full blast, and the tax cuts fully implemented. I think the recession, and our failed attempts to fix it, had far more to do with our current deficit than the Bush tax cuts. The Afghanistan war has cost $443 billion from 2001 to 2011; or 113 billion in 2011 for example. For 2011, the Bush (actually Obama) tax cuts "cost" 72 billion. So that's a cost of 185 billion out of a 2011 budget deficit of $1.1 Trillion. That makes me think the rest of your calculations are iffy as well.

However, it's good to see someone from the left at least pretending to take the deficit seriously. Most of the discussions here are on the order of "deficits mean nothing" type arguments from your side.

 

Your numbers are correct, but you have to consider two things:

1) President Bush did not include war spending with the DOD bill. It was appropriated separately and not included in the budget. So the deficit and budget grew hundreds of billions of dollars the moment Obama changed that method of accounting. That accounts for a lot of the issue you raised.
2) The 2007 revenue high was right before the bubble burst.

I understand where they're coming from when they say that. Both sides agree that increasing growth is the best way to shrink the deficit and raise revenue and I think we do need some stimulus measures as well as general long term investments in things that we've left unattended for too long (roads, schools, science), but to act as if $1 trillion deficits can be ignored is ridiculous, especially since we're looking at Medicare/caid implosions around the time the debt would begin having negative effects (ten to fifteen years out). That combination would devastate the economy. We need results on it now.

 

True, the OIF/OEF costs were never part of the proposed budgets, they were passed as supplemental spending bills, but they were part of the amount spent each fiscal year, so for the 2007 budget deficit I mentioned, that figure includes all of the spending for that fiscal year, so the deficit still reflects those operational funds. So the money was only hidden at the beginning of the fiscal year, not at the end.

The recession did start in December 2007, so most of the fiscal year was spent in recession, although the actual financial crash didn't begin until September 2008. And that goes to my point: The recession and financial crisis and it's "cures" added far more to the deficit than Bush wars and tax cuts.

We don't seem to see eye to eye on growth. It seems to mean different things to us. To me, growth means higher economic growth, higher GDP, and declining unemployment. In other words, more opportunities. The leftward vision of growth is... as you described it. More stimulus and more government spending. I have to say I've not exactly been wowed by that policy so far.

 

Let's go back in time to 2009. There was a 787 billion dollar stimulus plan. By neutral accounts, 94 % was spent on bribery (i.e. police officers, firemen, teachers UNIONS, etc.) and 6 % was spent on stimulus (i.e. roads, dams, nuclear power plants, STUDENTS, etc.). Why propose another plan? The last plan was clearly corrupted. What makes you think that the next plan will be "anything but the same" (i.e. criminal mischief with the same crooks in charge)? Otherwise, I would agree with you. The problem is that DICKtater Obama is still running the show. You saw what he did last time. What makes you think NEXT time will be different?

 

A representative democracy can only govern in conformity with the consent of the governed. The changing needs of society to which you refer are not part of the agreed bargain under the Social Contract when addressing those needs transgresses the terms of agreement. That's why your side can't govern without buy in from my side. My side isn't buying in.

What happens when someone commits a material breach of contract? From my standpoint I think your side is in breach of contract. That's a dangerous state of affairs.

 

This does not respond to either of my posts I'm afraid.

 

Yes, making sure our schools are staffed and streets patrolled by police is bribery. In the real world, it's called "doing your (*)(*)(*)(*) job" and keeping government up and running.

 

Do you have a source that the $161B figure does contain the war spending? You could be right about that, but I believe that the $2.8 trillion in expenditures did not include the war spending for that year. That would just about double the deficit right there. Still, relatively small, I can accept.

I should clarify that the increase in defense spending, the wars, and the tax cuts were the largest policy contributions. The recession certainly decimated revenues, no doubts there. But the defense budget is twice the size now than it was in 2000. That's 35% of our deficit alone. Obama's stimulus is a relatively small part of the picture and given that a third of it was tax cuts and the other two thirds relatively helpful funding of important programs, I'd say it was worth the cost.

No, growth means the same thing to me. I simply realize that properly funded schools and well built roads are a large part of whether people have those very opportunities you described or not.

 

I don't know of any source that breaks down the deficit as to where the expenditures come from. There are sites to pretend to do an analysis to make a similar claim that you do; that the wars and tax cuts are the primary source of the deficit. However they move funds and assign them around arbitrarily to get results they want, but I believe I've shown that just based on dollar amounts, even if the loss from the tax cuts and the war funds were the all assigned to the deficit, it's a small part of our annual deficit.

 

The government keeps excellent records of the budget and deficits each year. If you don't have a source, how do you know this information?

I disagree. With the wars costing in the hundreds of billions of dollars per year for several year, they have contributed significantly to our debt and deficit. Keep in mind our deficit stands at around $1 trillion. $350 billion from doubling our defense budget and another $100 billion from the wars would be almost half of our deficit. How is that not significant?

 

Furthermore, I'd like to hear a deficit cutting proposal from lil mike and dudeman. I've put forward mine. Mine ends the deficit entirely, whether you like my methods or not. What would you do?

 

The reason why there are no sources is because what you are asking for just isn't tracked. There just isn't any assignment of part of the deficit to a particular program or not. So any such arbitrary assignments, like you deciding that the entire defense budget is part of the deficit, are just ridiculous. And I include my calculations for the cost of the war and the tax cuts. Although the combined cost of 185 billion for 2011 is accurate, there is no accounting for what percentage of that is assigned to the deficit and which is considered "paid" by tax revenue.

As close as you could come to that is to account funds that were spent without Congressional approval as being applied to the deficit. For example, the Defense budget which has you so upset, is all voted on as part of the budget, including any supplemental spending. But for entitlement programs like Medicare, if the amount of spending exceeds the budgeted amount in a given fiscal year, Congress doesn't have to do any supplemental bill to continue funding; the money will just continue to roll out of the Treasury regardless.

So when you say that the cost of the wars and the defense budget come to almost half our deficit, you're basically just making that up and assigning costs you don't like to the deficit and costs you do like to charges that were paid for by tax receipts that year. It's an arbitrary, and therefore meaningless distinction.

 

I'm made some critiques to your proposal, but it's biggest flaw is dealing with healthcare. You think that some sort of medicare for all would enable us to control health care costs. If that were true, the place to start demonstrating that would be Medicare. History so far shows we have not figured out how to control health care costs in an arena in which the federal government already controls most of the spending. And that goes for Medicaid too. That's important because that's largely what our long term debt issues are: Health care spending. If health care spending isn't fixed, none of the other spending controls are going to make much difference. So although I think it's possible to cut 100 billion from defense and 50 billion from executive branch spending, none of that means anything unless health care costs are brought under control. So I don't see how having the government take over all healthcare spending let's us control the budget since our biggest drivers of our deficit are our government controlled healthcare spending.

So I don't see your plan is workable.

So to control the budget, we have to control federal healthcare spending. I suppose I could develop some plan from scratch but I think with all it's flaws, Ryan II is probably what I would go with.

 

Are you crazy? Have you summed up the savings from the first 15 posts or are you taking Huffington Post numbers for the actual value assigned to "welfare programs"? Hint- take a look at other names. There might be 75 programs called "Bo diddley" that might actually be "food stamps" to confuse the stupid or disinterested reporter.

 

I apologize, I phrased my question poorly. When I asked for a source on the war spending and the $161 billion deficit, I meant to ask whether or not that was a year that the war spending was budgeted with the DOD and therefore was on paper for that year's deficit, versus us spending it but not really accounting for it as we had done previously. It is my understanding that the 2007 budget and deficit did not account for war spending as it hadn't previously.

You misunderstand me. I'm not trying to say what is paid for and what isn't. The budget doesn't work that way. We total up our expenditures and authorize them, and then whatever money we take in we take in. The difference is our deficit or surplus. We don't decide what things to spend money on and what things to borrow for.

When I say the cost of the wars and the increase in defense spending touch roughly half of our deficit, I mean the amount of money we spent/spend on that equals approximately half our deficit. Not that we actually spend the money that way. The implication I am making is that not having done those things over the past decade would have resulted in a much lower deficit. Of course you can apply that to anything we spend money on, and I invite you to do so. I just find that telling because Iraq was a complete waste of money and lives and doubling our defense budget in less than a decade seems excessive given the military might we already possessed. Since excessive war and military spending made/makes up such a large portion of our deficit, why don't we focus on that instead of cutting the elderly's medicare payments in the future?

 

The thing I don't understand is how Ryan II controls healthcare spending either? You can argue that single-payer doesn't control healthcare costs (though every other industrialized nation that has tried it successfully controlled costs with it), but then you certainly can't say Ryan does anything to control healthcare costs. You're basically calling for the same unsustainable situation we have now, except that seniors pay more for it. That doesn't control the costs. It might ease the burden on the government some, but it increases the burden on seniors and everyone else as well because they keep having to pay higher and higher premiums.

And let's say we accept the argument that it won't result in cutting benefits for seniors, which is what Ryan emphasizes. First off, every study I've seen proves that wrong. But ignoring the study, common sense proves that wrong. If you're arguing that the seniors will be receiving the exact same amount of benefits each year, then how the hell are you cutting anything off the budget? The same amount of cash is being transferred.

I would also say that looking at Medicare as an example of what single-payer would look like is wrong for two reasons: 1. Seniors require costly care; 2. It still operates in a market with tons of for-profit insurance companies. To look at single-payer, I'd look at other countries that have enacted plans like what I propose. They pay far, far less for similar quality of care.

But let's accept that it's true for whatever reason. What happens as costs continue to rise? What in his proposal actively reduces the cost of healthcare itself? Nothing that I'm aware of.

Lastly, can you be more specific? Healthcare costs, okay. But the Ryan proposal doesn't really end the deficit. Puts a dent in it, but hardly ends it. There is a lot of unspecified spending cuts in there. Where would you make the spending cuts?

What are you talking about? I'm interested in hearing how you'd close the budget deficit. Food stamps do not come close to closing the deficit. Barely a fraction. So lay out a detailed plan. I want to hear it. With numbers.

 

Oh and about the Ryan budget and how much it closes the deficit:

The plan evaluates revenue at 19% of GDP without raising revenue. In fact, it lowers tax rates. Even with elimianted deductions and so on the best you could hope to do is balance it out. That's four percentage points above where we are. Using 2011's GDP figure, that means $600 billion per year of Ryan's "savings" come from revenue increases that have no mechanism to create them. Using today's or 2020's GDP numbers would mean even more cash. As the economy improves, revenue improves, yes, but the percentage of GDP isn't really why - the GDP grows with the economy, so whatever percentage revenue is increases as well.

I did not even see that until investigating the budget further tonight. So again: how would you actually balance the budget? Since the Ryan plan does an even worse job than we thought.

 

What you are saying about the the wars and tax cuts accounting for half the deficit don't seem to make sense. Or at least I'm not understanding it. I get that they were massive expenditures, but those funds would now be part of the national debt, not the current deficit. Are you maybe getting those terms confused? Our deficit is all Obama spending now. The Bush tax cuts expired in 2010 anyway. These current tax cuts are Obama's.

 

Ryan's health care cost control comes from the competition between the rival plans. It's not just theoretical Ryan's plan treats health care in the same way that Medicare Part D treats prescription drug costs. There are multiple plans competing. In fact, if you want a good idea of how Ryan's plan would work in practice, look to Medicare Part D. Ryan's plan is modeled on it. And... it does seem to work in controlling costs.

I guess you are going to have to be clear what sort of plan you are talking about for healthcare if you are not using a version of Medicare for all. I'm not sure why for profit plans make a difference in the senior health care market since mostly the only for profit plans are supplemental plans, and Medicare's provider reimbursement rates are well below private health insurance rates. Are you thinking of a NHS model?

 

Well, I'm making a couple of different points about the deficit. The point is kind of muddled because I'm referring to different ones without specifying which I mean. I'm going to try and separate it out:

1. It's been discussed in this thread and elsewhere that in 2007 the deficit was only $161 billion. But in 2007 the war spending, which at the time included large amounts of money sunk into Iraq still, was not included in the deficit. It was added on to the debt, yes. But it was not recognized as an expenditure. So it's dishonest for people to act like Obama has caused all of this deficit when, in 2007, we didn't include a the wars and the economy was at the peak of a bubble about to crash.

Wait, you acknowledge that Obama has cut taxes?!?!?! :O I don't know how to feel. Every conservative I've spoken to thinks that Obama has enacted crushing tax hikes on the middle class.

Those very tax cuts are one of the largest contributors to both the debt and the deficit. And you can give Obama some responsibility for them, yes. He signed the agreement. He can't be let off the hook. But he did not want to. He wanted to let some of it expire but Republicans weren't going to let it happen. And Republicans want to let them be extended even further. I don't think any of that can be denied.

2. When I say that x amount of defense spending composes up y percent of the deficit, I'm just referring to dollar amounts. For instance, $100 billion of the defense budget is equivalent to around 10% of the deficit, just like $100 billion of Medicare is also 10% of the deficit. It's just me putting forward ideas for cuts. Example:

We have doubled our defense budget since 2000. It has gone from $350 billion per year to $700 billion per year. This is excessive considering we already had a massive military. So that $350 billion spent every year equals 35% of our deficit. Just like $350 billion from any part of the budget equals 35%. Do you see what I mean? You can put forward your own cuts like that. I want to bust the deficit completely. I think Republicans and Democrats both are being weak by only shooting for moderate cuts to it. Let's go for 100%. So if you think cutting food stamps is one way, put forward how much you'd cut 'em by. So $10 billion from a program like that would be 1% of the deficit.

So let's do it.

Okay, that makes more sense. Wouldn't a public option for all create competition between differing plans? If Ryan's plan would do a good job of controlling costs, a public option should do the same.

I'm pretty flexible in the sense that I'll support anything that I can find evidence in favor of it working. NHS models have been relatively successful. I wouldn't mind a Medicare-for-all. In fact, that's probably my first choice because it would be easy to implement. Following that, I'd prefer a public option healthcare plan that people can choose. This is pretty similar to Ryan's plan for healthcare cost, right? It's also pretty similar to the public option that Obama wanted to be in the ACA...but Republicans heartily opposed. What's the difference?


Anyways, hopefully that cleared things up. Merry Christmas to you and yours, by the way.

 

you forgot about the interest on the debt for ten years,,you your probably not even 10% of it in ten years at that rate

 

I'm not sure what the second half of your statement meant, but interest is included in our budget already. By capping the debt at $16 trillion and reducing it by a trillion over ten years with my plan, our interest payments would come down, freeing up even more money.

 

OK you seem to be really confused as to the accounting of the war spending. The expenses from the war were from supplemental spending bills, not part of the original budget request for the DOD, but the money didn't vanish from all accounting because of that. We have supplemental bills all year long for all sorts of issues. That doesn't make the money free and off the books. The 161 billion deficit for 2007 is still the deficit for that year. Just because the money wasn't requested at the beginning of the fiscal year doesn't mean it vanished. It still applied towards the total spending for that fiscal year.

First you say that Obama cut taxes, then you say that he only gets some responsibility for them? This is another myth that has to constantly be debunked. This was a deal that was made at the end of 2010 by a Democratic House and a Democratic Senate. Boehner was the House minority leader at the time. In fact, Boehner has already agreed to go with whatever tax deal the Democrats come up with months before, since they were in the minority. So the idea that Obama was bulled into this deal by the minority leader is ridiculous. Obama lost his nerve and was afraid to yank those tax cuts because he wanted to be re-elected. It's as simple as that.

Private plans compete on price because they make a cost benefit analysis of what can be cut and by how much and what can't in order to still maintain a competitive product. I'm unclear how a public option would determine that. And if we are subsidizing a public option, where's the savings? Financing that blows your savings out of the water. I'm getting the feeling that your "progressive approach to the deficit" wasn't really about the deficit at all, but just another way to justify a national healthcare. If you don't care whether it's the NHS or Medicare for all model, it's pretty clear you're not interested in the costs associated for each. You just want a universal government healthcare regardless of the price tag.

 

We know it was tacked on to the debt, but it's my understanding that emergency supplemental bills are not included with the budgeted deficit. That's been my assertion this whole time and I've seen nothing contradict that. This means that Bush's "reasonable" deficits were much higher than they appeared. Obama's larger deficits come from him taking responsibility for war spending and the reduced revenues from the crisis. He has largely maintained the same level of spending, even reduced it slightly in some areas.

Do you have a source on that? The minority leader was the soon-to-be Speaker of the House and had considerable political clout. You also forget that a subtantial number of Democrats are in fact very conservative themselves. Grouping Blue Dog Democrats in with the Republicans has always given conservatives a majority in the House, meaning that all of Obama's legislation has required a conservative slant to get passed. There is no way in hell House Republicans would have agreed to "whatever tax deal Democrats come up with".

Obama has always supported keeping those cuts in place for those making less than $250K. What do you mean "afraid to yank those tax cuts". Whose vote would that earn? Presumably ones making more than $250K? They already know his policy position. He didn't do it to trick anyone, he did it as part of the tax compromise that year.

Then why do you support Ryan's approach to Medicare? You just said that his plan reduces costs via competition. Medicare would be a public option for seniors and then they would have private plans that they could choose from. Competition between the plans and the public option would supposedly push costs down. If you're questioning the logic of competition reducing expense, why do you support Ryan's plan again?

Public plans don't require a 30% mark up for profit and "administrative overhead". They're inherently cheaper than private plans. Presumably, one of two things would happen: private insurance companies would have to drive down costs to compete and the problem is fixed, or everyone will jump ship to the public option and the problem is fixed. Either way, you get significant savings from the healthcare system.

Not true. Financing it is what provides the revenue. People will have to buy into the public option. That boosts Medicare revenue significantly. It also does so through younger people than its traditional crowd (seniors), which means that they're require less services. It broadens the pool. Medicare is expensive because it consists of our highest consumers of healthcare, seniors.

Nothing about my statements construe a lack of concern about the costs. I'm open to all models and ideas, even yours. Especially yours, actually, since we're having this discussion. I prefer a medicare-for-all option. Failing that, I would consider a public option or a NHS model. I see a NHS model as simply unnecessary, however, which is why I seem indifferent. Medicare-for-all would do a great, simple job. There is no need for a NHS.