There is something Twilight Zonish about Obama’s recent pronouncements on the economy and social issues. It is almost as if he is getting daily emails from his Columbia University professors who “never worked a day (at least in the real world) in their lives”.
On a personal note this thread is “a grim milestone” for me as it is my 1,000th thread since I became a contributor to Blogmoc way back in December 2009. I never intended to do so many threads and all I was interested in at the time was taking some of the pressure off of Rodan, m, and others from having to carry the load, by occasionally posting two or three threads weekly on the blog. However once you start posting thread after thread it sort of snowballs and you become a de facto regular contributor and the job is thrust upon you. I keep telling myself that I will be cutting back as work and personal pressures mount but it is hard to do when you see an interesting story and automatically say to yourself that this should be a thread. Personally I enjoy the history and music threads more and more.
by Michael Tanner
Deconstructing one of President Obama’s speeches can be a bit like taking a trip to an alternate universe. Take his remarks last week to the Associated Press, contrasting his budget vision with that of Paul Ryan and Republicans. All that was missing was a Rod Serling voice-over announcing, “You’re traveling through another dimension, a dimension not only of sight and sound but of mind; a journey into a wondrous land whose boundaries are that of imagination.”
For instance, the president denounces the Ryan budget as “thinly veiled Social Darwinism.” One would think that Social Darwinism would mean actually cutting the budget. But in reality, Ryan’s budget increases federal spending by more than $1 trillion over the next 10 years.Ryan does spend roughly $352 billion less over 10 years on domestic discretionary spending than would the president. The president suggests that this means that children could no longer go to college, the weather service would be abolished, and roads and bridges would crumble into dust. In reality, the largest gap between the president’s spending plans and Ryan’s would occur in 2016, when Ryan would spend $43 billion less on domestic discretionary programs than the president. That amounts to roughly 1.1 percent of projected total federal spending that year. Ryan would, in fact, slightly increase discretionary domestic spending from $1.170 trillion in 2013 to $1.212 trillion in 2022. Social Darwinism should be made of sterner stuff. And, of course, what presidential speech would be complete without a denunciation of Ryan for wanting to “end Medicare as we know it.” The president’s rhetoric raises the specter of seniors being wheeled out of their hospital beds tomorrow morning. But Ryan has not proposed any changes to the program for current recipients. It is true, of course, that Ryan would restructure Medicare for those under age 55 to give recipients a choice between the traditional program and a voucher that would allow them to purchase private insurance. But, his plan, drafted together with Democratic senator Ron Wyden of Oregon, hardly slashed Medicare spending — in 2022, it would spend just $21 billion less than the president’s budget.
The president manages to leave out his own proposal for Medicare, which is to have an unelected 15-member board further reduce payments to physicians. Even Medicare’s own actuaries warn that those cutbacks could lead to hospital closures and reductions in access to care or the quality of care.
Given that estimates of Medicare’s unfunded liabilities run from a low of $25 trillion to as much as $90 trillion, the program is clearly going to have to change. The president may believe his changes are better than Ryan’s, but to pretend that he would leave the program exactly as it is while Ryan would leave sick seniors in the streets to die is simply unstuck from reality.
Of course, taxes are another area where the president has difficulty squaring rhetoric with reality. For example, the president continues to sell his proposed tax hikes as being about people like him or Warren Buffet paying a little bit more. In reality, his proposed tax increases fall on families and small businesses earning as little as $250,000 per year. In fact, according to economists Kevin Hassett and Alan Viard, “fully 48% of the net income of sole proprietorships, partnerships, and S corporations” would be subject to the president’s tax hike.” At the same time, the president latest big idea for deficit reduction is the so-called Buffett Rule, a new 30 percent minimum tax on the rich, based on the misleading claim that Warren Buffett pays a lower tax rate than his secretary. Actually, the Buffett Rule would raise less than $3.2 billion per year on average according to the Congressional Budget Office, enough to pay for eight hours of federal spending. Alternatively, the revenue from the Buffett Rule could lower the budget for this month from $196 billion to just $193 billion. Obama truly is a deficit hawk.
Cue Mr. Serling: “We’ve moving into a land of both shadow and substance, of things and ideas. We’ve just crossed over into the Obama Zone.”
Read the rest – The President of the Twilight Zone
The original term There Is No Such Thing As A Free Lunch – TINSTAAFL – comes from Robert Heinlein’s book The Moon Is A Harsh Mistress. Dr. K. writes that a “free lunch” is exactly what Obama is proposing.
by Charles Krauthammer
Here we go again.
At the beginning of his presidency, Barack Obama argued that the country’s spiraling debt was largely the result of exploding health-care costs. That was true. He then said the cure for these exploding costs would be his health-care reform. That was not true.
It was obvious at the time that it could never be true. If government gives health insurance to 33 million uninsured, that costs. Costs a lot. There is no free lunch.
Now we know. The Congressional Budget Office’s latest estimate is that Obamacare will add $1.76 trillion in federal expenditures through 2022. And, as one of the Medicare trustees has just made clear, if you don’t double count the $575 billion set aside for the Medicare trust fund, Obamacare adds to the already crushing national debt.
Three years later, we are back to smoke and mirrors. This time it’s not health care but the Buffett Rule, which would impose a minimum 30 percent effective tax rate on millionaires. Here is how Obama introduced it last September:
Okay. Let’s do the math. The Joint Committee on Taxation estimates this new tax would yield between $4 billion and $5 billion a year. If we collect the Buffett tax for the next 250 years — a span longer than the life of this republic — it would not cover the Obama deficit for 2011 alone.
As an approach to our mountain of debt, the Buffett Rule is a farce. And yet Obama repeated the ridiculous claim again this week. “It will help us close our deficit.” Does he really think we’re that stupid?
Hence the fallback: The Buffett Rule is a first step in tax reform. On the contrary. It’s a substitute for tax reform, an evasion of tax reform. In three years, Obama hasn’t touched tax (or, for that matter, entitlement) reform, and clearly has no intention to. The Buffett Rule is nothing but a form of redistributionism that has vanishingly little to do with debt reduction and everything to do with reelection.
As such, it’s clever. It deftly channels the sentiment underlying Occupy Wall Street (original version, before its slovenly, whiny, aggressive weirdness made it politically toxic). It perfectly pits the 99 percent against the 1 percent. Indeed, it is OWS translated into legislation, something the actual occupiers never had the wit to come up with.
No matter. Obama had famously said in 2008 that even if that’s the case, he’d still raise the capital gains tax — for the sake of fairness.
For Obama, fairness is the supreme social value. And fairness is what he is running on — although he is not prepared to come clean on its price. Or even acknowledge that there is a price. Instead, Obama throws in a free economic lunch for all. “This is not just about fairness,” he insisted on Wednesday. “This is also about growth.”
Growth? The United States has the highest corporate tax rate in the industrialized world. Now, in the middle of a historically weak recovery, Obama wants to raise our capital gains tax to the fourth highest. No better way to discourage investment — and the jobs and growth that come with it. (Except, perhaps, for hyperregulation. But Obama is working on that too.)
Three years ago, Obama promised universal health care that saves money. Today, he offers a capital gains tax hike that spurs economic growth. This is free-lunch egalitarianism.
The Buffett Rule redistributes deck chairs on the Titanic, ostensibly to make more available for those in steerage. Nice idea, but the iceberg cometh. The enterprise is an exercise in misdirection — a distraction not just from Obama’s dismal record on growth and unemployment but, more important, from his dereliction of duty in failing to this day to address the utterly predictable and devastating debt crisis ahead.
Read the rest – Free-lunch egalitarianism