Monday, November 15, 2010

In Defense of Bipartisanship and the Deficit Commission

As we peer into society's future, we -- you and I, and our government -- must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

--President Dwight Eisenhower, January 17, 1961.
When President Eisenhower voiced these words at the end of his presidency, he did so from the vantage point of experience and historical insight. Sixteen years earlier, he helped lead U.S. military forces to victory in the European theater and oversaw the occupation of post-war Germany. As president, he ended our involvement in the Korean conflict, stood up to McCarthyism, and oversaw the development of the interstate highway system. He had seen firsthand America’s capacity to set aside partisan differences to fulfill a sense of national purpose, in defeating tyranny, in mobilizing a war effort, and in building a modern economy. With the nation then on the verge of a New Frontier, about to inaugurate an idealistic, young president, our history was replete with examples of liberals and conservatives, the religious and non-religious, the working class and the educated elite, coming together for the common good. Presidents Eisenhower and Kennedy each understood the viability of American resolve, that when we commit our energies and resources to problems of national import, when we work together towards a common goal, there is little we as a people cannot accomplish.

In confronting the economic and budgetary crises of today, we once again need a bipartisan appeal to the national interest, a serious effort at compromise and problem solving. Although the rising tide of national debt is less understood, and often perceived as less urgent, by policy makers, the media, and the public, the long-term threat to our economy is real and substantial. It is a problem that affects us all, with the burdens particularly hard on future generations. According to the Congressional Budget Office (CBO), this year’s deficit alone is expected to be $1.3 trillion (that’s $1,300,000,000,000). The total federal debt is now at approximately $14 trillion and growing. Absent major adjustments, we will pay over $1 trillion a year, or nearly 40% of every tax dollar, on nothing more than interest on the national debt by 2020. The CBO estimates that an additional $8 trillion will be added to the national debt in the next decade absent significant budgetary reform.

Over time, persistently large deficits of this magnitude will only increase national debt as a share of the economy, push up interest rates, crowd out productive investments, retard economic growth, and cause serious long-term damage to the economy. As the country borrows more money to finance the debt, increasing amounts are loaned by foreign investors who collect the interest payments and siphon much of our economic output. According to the Center on Budget Priorities and Policy (CBPP), absent positive adjustments, “the national debt will climb from 53 percent of GDP in 2009 to 314 percent of GDP by 2050, or more than three times the size of the U.S. economy.” It does not take a degree in mathematics to understand that this is unsustainable in the long-term, that our ability to repair our declining infrastructure, sustain a strong national defense, protect the environment, aid the poor, and provide medical care to the elderly, will become increasingly difficult.

It is true that the events and policies that have created the record deficits were largely outside of President Obama’s control. There is little disputing that a decade of Bush tax cuts and the expenditure of hundreds of billions of dollars on the wars in Iraq and Afghanistan, coupled with the worst economic slump since the Great Depression, are almost exclusively responsible for the current deficits. But while President Obama may have inherited the present mess, that fact does not lessen his responsibility to address the fiscal imbalance and use the prestige and influence of his office to propose solutions.

Unless we wish simply to pass along the debt burden to our children and their children, it is time to set aside partisan differences and develop real solutions to what is a very real problem. Of course, there is no way to balance the budget and to unburden future generations from the mountains of debt that we have bequeathed them without some combination of (1) tax increases, and (2) spending cuts. Yet these are the very things that politicians most hate to do, because they make everyone unhappy. No one, especially those with partisan passions, enjoys the art of compromise and making hard choices. It is, however, essential to governing. For this very reason, President Obama established the National Commission on Fiscal Responsibility and Reform by Executive Order in February 2010.

The Deficit Commission, co-chaired by Erskine Bowles (former Chief of Staff to President Clinton) and Alan Simpson (former Republican Senator from Wyoming), is made up of a respected mix of bipartisan experts who aim to offer politically realistic and economically viable solutions to the debt crisis. As Jonathan Chait of The New Republic notes, the premise of the Deficit Commission is that “reducing the long-term deficit is very hard. All the options are unpopular. If you try to do it while imposing your party’s ideal vision of federal priorities, the other party will demagogue you to death and you’ll fail. So you need to find some way to reduce the deficit that falls short of your ideal while constituting an improvement over a status quo of letting the deficit run unchecked.” Or as President Obama said recently, "If people are, in fact, concerned about spending, debt, deficits, and the future of our country, then they're going to need to be armed with the information about the kinds of choices that are going to be involved."

Unfortunately, the initial reaction to a draft proposal put forth by Bowles and Simpson has been decidedly chilly. Conservatives opposed to any type of tax increase, including most of the Tea Party movement and anti-tax advocate Grover Norquist, are unhappy, while the Wall Street Journal editorial page is skeptical. The biggest outcry, however, has been from liberals. commenced a campaign to tell the President “that Americans will not stand for this Deficit Commission report and he must reject it immediately.” Paul Krugman of the New York Times has said that “the deficit commission should be told to fold its tents and go away.” House Speaker Nancy Pelosi called the Bowles-Simpson plan “simply unacceptable.” AFL-CIO President Richard Trumka stated that the proposal essentially tells “working Americans to drop dead.” This is disappointing.

To be sure, there is much wrong with the Simpson-Bowles proposal, but to reject it out of hand is irresponsible and short sighted. First, the Bowles-Simpson proposal is not the Deficit Commission’s report – that will come later and will need the support of at least 14 of its 18 members; Bowles-Simpson is nothing more than a 50-page power point presentation of key talking points. It is a discussion starter, nothing more, nothing less. Second, liberals are ignoring a fundamental principle of democracy – politics is the art of the possible. Unless they can successfully accomplish deficit reduction on their own (good luck with that, especially after the midterm elections), they will need to work with Republicans, independents, and moderate and conservative Democrats to achieve meaningful long-term deficit reductions. Third, some of the ideas presented by Bowles-Simpson on trimming $3.8 trillion in debt by 2020 are very good and should be embraced by Democrats.

Among other things, although the proposal calls for simplification of the tax code involving a reduction in overall rates, it also calls for eliminating many tax deductions and credits that mostly favor the affluent, thus preserving, even enhancing, the progressive nature of the tax structure. While the proposal to eliminate the mortgage interest deduction will prove politically infeasible, one alternative (based on a proposal by Democratic Senator Ron Wyden of Oregon and Republican Senator Judd Gregg of New Hampshire) would eliminate mortgage interest deductions on second homes and mortgages exceeding $500,000, while retaining the deduction for all other homeowners. This should receive serious consideration from Democrats. That someone should be allowed a tax deduction for mortgage interest on a second home in the Hamptons (or even Ocean City), while those who pay rent (generally the less affluent) receive no tax deduction, is unfair, regressive, and serves no rational policy interest. I understand that the real estate industry and its powerful lobbyists will be upset, but without some political courage and economic common sense from members of Congress, no progress on the deficit and budgetary reform will ever occur. As a Democrat, I am unwilling to allow my children’s future to rest on outdated assumptions and narrow special interests.

There are a number of other proposals in the Bowles-Simpson plan that liberals in particular should embrace. Reducing farm subsidies is long overdue, and the fifteen cent per gallon gasoline tax will simultaneously raise revenue and help reduce our dependence on foreign oil, encourage conservation and protect the environment. To its credit, the Bowles-Simpson proposal attempts to prevent cuts aimed at assisting low-income Americans and makes clear in principle that future budgets must protect the most vulnerable citizens.

Bowles-Simpson also refuses to treat the defense budget as sacrosanct and calls for tens of billions of dollars in cuts to unnecessary weapons programs and other wasteful military spending. Preserving our nation’s military strength does not require squandering billions of dollars on wasteful, largely useless Defense contracts and Pentagon programs. We spend almost as much on our military as the rest of the world combined. Including non-Pentagon, defense-related expenditures (e.g., Veterans Affairs, Homeland Security, interest attributable to past debt-financed defense outlays), total defense spending in 2010 falls somewhere between $880 billion and $1 trillion. Even by more traditional measures, total spending on the Pentagon, including the wars in Iraq and Afghanistan, will exceed $700 billion. There is simply no way to get a handle on the deficit and national debt without ensuring, at a minimum, that we pay for these outlays, and better yet, reduce them. The Deficit Commission appears to recognize this.

My biggest problem with the Bowles-Simpson plan is its failure to take on the Bush tax cuts, which according to the CBPP account for $1.7 trillion in extra deficits from 2001 to 2008. If extended, these same tax cuts will add $3.4 trillion to the debt by 2019. This is no way to reduce the debt. Maintaining the Bush tax cuts, especially for those making more than $250,000 per year, is particularly galling, as eliminating only these tax cuts (which merely puts the top marginal rates back to 39% over the present 36%) would save us $700 billion over the next ten years.

I also am not satisfied with the manner in which Bowles-Simpson addresses the long-term budgetary concerns underlying Medicare and Medicaid (which make up the bulk of long-term deficit projections due to demographic changes and increasing life expectancies of the American population). But there will be plenty of time to debate these issues. For liberals to refrain from the discussion, to take their ball and go home, serves no purpose, and undermines our concern for the nation’s future.

Speaking to the nation from the Oval Office in 1979, President Jimmy Carter declared, "What you see too often in Washington . . . is a system of government that seems incapable of action. You see a Congress twisted and pulled in every direction by hundreds of well-financed and powerful special interests. You see every extreme position defended to the last vote, almost to the last breath by one unyielding group or another." Are we really that selfish and short-sighted a nation that we cannot find ways to compromise and agree on deficit reduction? Although Carter lacked the leadership skills to overcome the paralysis of democracy that he described, his description is nevertheless as accurate now as it was in 1979. If the President and the Congress, Republicans and Democrats, cannot succeed where Carter failed, if they cannot summon the nation to embrace a sense of national purpose and to work for the common good on behalf of future generations, then they will be leaving a shameful legacy and forfeiting the right to govern.


  1. Mark,

    I’m beginning to lose hope. But still, I refuse to believe that you pour so much energy into this blog simply to preach to the choir; after all, you could do that over wine and cheese and revel in the unison head nodding. Your purpose must be, as it is for any writer, to sway opinion, to win converts, to demolish falsehoods, and, at the end of the day, to advance a cause.

    But still… Our current financial mess has many causes, including, but certainly not limited to, an intrusive government that forced banks for years to make idiotic loans; unconstitutional and massively out of control entitlement programs; a Ponzi scheme known as Social Security; wasteful pork barrel spending; bailouts of businesses; pointless stimulus spending; the imposition of ObamaCare; and the uncertainty of what’s next.

    Yet you write: “It is true that the events and policies that have created the record deficits were largely outside of President Obama’s control. There is little disputing that a decade of Bush tax cuts and the expenditure of hundreds of billions of dollars on the wars in Iraq and Afghanistan, coupled with the worst economic slump since the Great Depression, are almost exclusively responsible for the current deficits.”

    In other words, we’re in this mess because the government didn’t seize enough money from hard working Americans.

    And in case anyone has forgotten, you write that President Obama “inherited the present mess,” from President Bush, while forgetting the other (spending) branch of government controlled by Democrats of which President Obama was a member, albeit for a long weekend, before becoming president. In other words, President Obama inherited his own mess, and while he wasn’t in the Senate long enough to learn anything but to vote “present” so as to not leave a record, he was thought important enough by the two villainous institutions, Fannie Mae and Freddie Mac, to make him their first or second favorite recipient of campaign contributions.

    Now such posts as this would or should cause eye rolling by even the most sycophantic fan of President Obama and the most venomous detractor of President Bush. But after a year of prodigious blogging I understand why you have such an inability to think critically regarding President Obama. It stems from a serious case of hero worship. It’s a problem we have in common but we are affected by it in opposite ways. I recognized it in myself after the primary battle between Bush and McCain. I voted for McCain because many years before, while being tortured by animals, he refused to accept their insidious offer of early release. I was, and still am, simply in awe of such courage and I made the mistake, and not for the first time (hint: Giant Sucking Sound) of thinking that such honorable behavior would translate into a life of honorable conduct and a successful presidency. I allowed myself to be blinded by my own personal prejudices; I refused to look beyond that one shining moment and judge the whole of the man.


  2. You, on the other hand, are blind to moral failures, some unimaginable, if the person committing them shares your overall personal and political philosophy. One result was a hagiographical post on a man who not only allowed a woman to die a slow and terrifying death, but then spun his actions to save his own skin and then spent the rest of his life making jokes about it when not feeding his voracious appetite for booze, broads and biscuits (with gravy no doubt). Along the way we have also been treated to: an uncritical post on a man who was an accessory after the fact to manslaughter; a puff piece on a man who released and pardoned terrorists for political advantage; a love letter to a president who, when not interning Americans in relocation camps, was putting in place programs that endanger our very survival today; a wet kiss on the cheek of a hypocrite who wants to limit the choices of Americans by overburdening every company but his own with endless regulations; a press release for a corrupt institution filled with the world’s most evil men; and a petition of leniency for a despicable man who defiled that which he held most sacred. None of these, of course, match the last 15 months worth of posts that practically deify our current president, so for you to be taken seriously by anyone beyond the hardcore cultists will require a conscious effort on your part to reexamine your beliefs and develop more seriously your critical thinking skills.

    My own rehabilitative efforts took a big leap with Bush’s final days when he “abandoned free-market principles to save the free-market system." I may love him to death for keeping my family safe for seven and half years and for letting Americans keep more of what they earn, but I’m now able to view his accomplishments and failures more dispassionately. I can admire his McCain-like will in pressing ahead with the surge against enormous pressure while at the same time believing that his final act as president was a betrayal of the very country he valiantly defended.

    I have serious doubts however, that you will be capable of doing the same. The reason for this doubt can be found in your post: “…our history was replete with examples of liberals and conservatives, the religious and non-religious, the working class and the educated elite, coming together for the common good.”

    Do you see it? When conservatives use the word it is to ridicule the class warfare mentality of the left, but for progressives it is a natural statement of fact: There is a select group of people who are smarter than the rest, and that education entitles them to make decisions for the rest of the population (ObamaCare being the latest example). The “elite,” in fact, believe it is their birthright to rule and they are genuinely offended when their judgment is questioned. (“You would think they should be saying thank you,” the president said regarding the Tea Party rallies that he found “amusing.”)

    Sadly, I do believe that you think you are more intelligent than your plumber, wiser than your trash man, better educated than the owner of your favorite coffee shop. This belief is supported by your writing: “It is true…,” “There is little disputing…” “…almost exclusively responsible…” (and that’s just one paragraph!). And this superior intellect has brought you to the conclusion that the president, a man with demonstrably fewer qualifications to be president than Governor Palin, possesses, somehow, the wisdom of the ages. Having pronounced judgment, you seem as incapable as (soon to be former) Speaker Pelosi to grasp the fact that plumbers, trash men, coffee shop owners and millions of other non-elites have fundamentally rejected Obama and company’s transformation of America.


  3. You began with President Eisenhower’s farewell address and you would do well to reread it. He speaks from the grave about our current dilemma: “…there is recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties.” He warned against “unrealistic programs to cure every ill…” and urged balance between, among other things, “the private and the public economy, balance between cost and hoped for advantage -- balance between the clearly necessary and the comfortably desirable…” There is more wisdom in this one speech than in two years’ worth of speeches from our current president. I doubt President Eisenhower ever uttered a phrase such as “educated elite” and he likely never consider himself one, but he spoke with the wisdom earned from a life of measurable accomplishments.

    Now Mark, I write all this not to annoy you but to point out that you are writing yourself into a corner. I almost passed on this post because the great (but not perfect!) Ronald Reagan kept jumping into my head as I read you: “There he goes again!” But in the end I didn’t because you have accomplished a heck of a feat with your blog, continuing it for over a year, and I’d hate to see it devolve into a knee-jerk, blog version of Robert Gibbs, defending the president as if you were on his staff (you’re not bucking for that, are you?). And I keep thinking how much more interesting it would be if there was some real soul searching on your part. As died in the wool as you may be, I can’t imagine there is nothing about the president that really pisses you off. From my own correct political perspective I can tell you that watching Bush hawk his book has been bittersweet. Although it reminds me how much I love the guy (“Let’s talk about water boarding!”) it also reminds me of his great failures (bailouts, immigration, Medicare, Harriet Miers, etc…).

    While I may be losing hope I haven’t yet lost it. Whittaker Chambers, Ronald Reagan, Michael Medved, Christopher Hitchens, David Horowitz and David Mamet, the playwright and screenwriter of one of the best movies ever made, “The Edge” (“They die of shame.”), are just a few examples of liberals who have seen the light. And it’s these and other examples that offer for me the only convincing proof that man evolved from apes. So if you want this Catholic to join you evolution nuts, then meet me halfway; maybe start out slow, like with his ears, they’re ridiculous, right? And the exclamation point he puts on the end of every sentence, as annoying as George’s laugh -you can feel me on that, can’t you?

    And what about his mistress, the teleprompter?


    Rich R.

  4. Rich,

    Well, at least you believe in evolution.

    When I read your comments, I could not help but wonder if you had actually read my latest essay, the essence of which was an appeal to bipartisanship and compromise on a very important issue confronting this country. I am particularly confounded by your comments because most of my essay was critical of liberals (Pelosi, Krugman, Trumka, and for their knee-jerk reaction in opposing the Deficit Commission’s draft proposal (Bowles-Simpson). I praised the concept of the bipartisan commission and made a strong case for why we need serious long-term deficit reduction so as not to burden our children and grandchildren with mountains of debt. This is an issue, I contended, that should be as important to liberals and Democrats as it is supposed to be to Republicans (well, except for the past thirty years). The essay was essentially an argument to liberals as to why the much maligned Bowles-Simpson plan is not as bad as they contend and actually contains some good, progressive ideas that Democrats (and Republicans) should support. Since my position is not the “liberal” position on this issue, I fail to see how this essay was preaching to the choir. I frankly expected, naively I now realize, that you and other conservatives would actually appreciate, and agree at least in principle, with my expressed fiscal conservatism, that we could find some common ground on this issue.

    You instead focused (quite predictably) on one paragraph and, rather than attempt to refute the factual premise of that paragraph, you attack me personally for being Obama’s lapdog; for being so blinded by hero worship that I write puff pieces on a murdering Senator who laughed about his victim’s demise for the rest of his life (don’t worry about being fair or true, it sounds good), a terrorist-loving Attorney General (yeah, that’s a really thoughtful statement, we should all take you very seriously here), and all sorts of evil mongers (you know, Franklin Roosevelt, Kofi Annan, Ralph Nader, even that “despicable man” Pete Rose – despicable, maybe, but his 4,256 hits is more than anyone who ever played the game).


  5. Rich (cont'd):

    “It is true” that the current deficits are mostly explained by the Bush tax cuts (which according to the CBPP, based on CBO’s data, accounted for $364 billion of the $1.4 trillion deficit in 2009; $336 billion of the $1.3 trillion deficit in 2010), combined with two unfunded wars (adding $178 billion to the 2009 deficit and $191 billion to the 2010 deficit); and the effects of the recession (which resulted in unplanned reductions in revenue -- $418 billion in 2009 and $455 billion in 2010 -- and added spending due to TARP ($245 billion in 2009, and a reduction in the deficit of $32 billion in 2010) and the economic recovery measures ($200 billion in 2009 and $412 billion in 2010). If you want to see for yourself, click on the underlined phrase “according to the CBPP” in the third paragraph from the end to read “Critics Still Wrong on What’s Driving Deficits in Coming Years,” CBPP, June 28, 2010; or just look at the numbers as reported by the CBO and many other sources. Yet, rather than suggest alternative or better budget data, you merely suggest that I lack “critical thinking skills,” that I am “blind to moral failures,” and that I “sadly” think I am “more intelligent than [my] plumber, wiser than [my] trash man, better educated than the owner of [my] favorite coffee shop.” (That you would say these things only proves you don’t know anything about me. My plumber, by the way, is a staunch Democrat and Obama supporter – and he loved Bill Clinton. He is, indeed, a very smart man.) And you admonish me to engage in “soul searching” because I apparently never do that in this blog.

    It is sad, really, that you so despise the human race (or at least the 99.9% of human beings who do not think exactly as you do). If one thing is clear from your comments these past sixteen months, it is that you cannot handle civility and appeals to bipartisan compromise. I’ve noticed that some of your most vociferous reactions have been to my essays that call for moderation and civility (e.g., this piece; “Does America Need a Civics Lesson?”; “Where Have the Moderate Republicans Gone?”; “American Demagogues and the Decline of Civility”). You are so dogmatically right-wing, you cannot even see moderation when it is smacking you in the face! And your belief that I am Obama’s unthinking, reflective defender ignores my past criticisms of his policies regarding Afghanistan and drone missile attacks in Pakistan (“Obama’s War: Books vs. Bombs”; “Growing Doubts on Afghanistan”; “A Presidential Moment, A Foreign Policy Dilemma”); of his failure to push for a public option (“A Good Start to a Very Steep Climb”); and over his energy policy (“America and Energy: A Failure of Vision”), in which I questioned whether Obama “has the political will and courage to truly lead our nation in the direction it needs to go”, noting critically that he “pushed for expanded offshore oil drilling (much to the chagrin of environmentalists, who can now honestly say, ‘I told you so’) . . .”

    But do I like Obama? Yes, very much, and I will continue to defend him from unjust and unfair attacks. Do I engage in hero worship? I don’t think it is hero worship. But I do like to write about the people and things that inspire me, that give me hope about a better world and future. That is my cause, which I hope is reflected in my writing. I may not persuade you, my friend, but I will continue to try.

  6. Mark,

    I’ve just reread your post and I must admit, you have a point, dull though it may be, there is no disputing that the end tapers in and forms a cone. The problem I have is that when you start with clichés (“It’s all Bush’s fault!”) you make it hard for a reader to focus on the substance of what follows. Your post began with the typical liberal belief system: The government must spend X amount. If enough money is not seized from those who work for a living, the government must still spend X. In order to raise enough to make up the debt incurred by spending X, the government just needs to raise taxes. This will work because people are like turkeys and will not change their daily habits even as Thanksgiving Day approaches.

    The truth, of course, is that human turkeys begin digging escape tunnels in October and storing grain for the tough times ahead in the wild. When Thanksgiving comes around, the liberal farmer is shocked to discover that he’s lost a lot of turkeys.

    So your essay started with the wrong economic philosophy and the tired talk of “inheritance.” I focused on that because one must start on a firm foundation. But I will admit that my characterization of your post as preaching to the choir was not accurate. You lured the choir in with liberal standbys, but you did then swerve dangerously close to progressive heresy, which I will address momentarily. But first, I did refute your premise by giving you a list of reasons why we are in this mess. One of them deserves further elaboration considering your belief that George W. is some sort of economic antichrist.

    The current bank/mortgage mess has its roots in the Carter Administration with the establishment of the Community Reinvestment Act, which addressed alleged racism in lending practices by banks. Subsequent studies determined that banks didn’t care what color the borrower was, just what his chances were of paying the loan back. By then, however, we had yet another government agency which wasted money, but for years did not do too much damage. But then the Clinton Administration unleashed Janet Reno who threatened bankers with prosecution if they did not make ridiculously unsafe loans. The bankers, knowing that Fannie Mae and Freddie Mac would buy up the bad loans, didn’t challenge the Attorney Gladiator, and so the sub-prime nightmare began.

    In 2005, Republicans on the Senate Banking Committee tried to address the looming crisis by establishing tougher regulations that would prevent the two F-ing agencies from assuming bad mortgages. All Republicans voted for the reform; all the Democrats voted against it. It was during this era of bipartisanship, you may recall, that President Bush also weighed in, trying to avert disaster. He had as much luck. Meanwhile Senator Obama was defending the status quo, saying in 2007, “Sub-prime lending started off as a good idea, helping Americans buy homes who previously couldn’t afford to.” (Think about that: It’s a good idea for government to concern itself with helping people buy homes, and not just any people, but those people who can’t afford to buy homes.)

    So President Bush “inherited” the sub-prime mess from President Clinton. We know that because George W. was forever reminding us of that fact. He said it so often that the American people almost forgot that Senator Kerry served in Vietnam… wait… President Bush is a gentleman from the old school, so I might be wrong about that. Although Kerry did serve in Vietnam. And earned three purple hearts.


  7. Now onto tax increases being necessary for economic growth (it even hurts to type such silliness). History shows that tax cuts spur economic growth and history shows that when times are tough the two best things to do are to cut spending and cut taxes. Professor Alberto Alesina at Harvard, where the elite go for enlightenment, studied 21 countries during a 37 year time period and came to many conclusions including, “…expansionary adjustments were based mostly on spending cuts, while recessionary adjustments were based mostly on tax increases.” (See, we can learn from other countries, especially those circling the same drain as us.)

    Studies have also shown that over the past 20 years all tax changes, cuts (good) and increases (bad) have “increased the share of taxes paid by the wealthiest Americans” (just as well, it’s not like they earned their money anyway). In fact, the top one percent of income earners pay a third of all taxes collected by the IRS. By 2004, these greedy Wall Street-types were shouldering 36.9 percent of the income tax burden, while the bottom half contributed 3.3 percent.

    Regarding Bush, his tax cuts were in response to a recession. He had a crazy idea that if people kept more of their money they would spend it more wisely than the government and the economy would improve. The recession ended in November 2001 (and this despite the giant hole in Manhattan).

    The economy was still sluggish though (by today’s standards it was the roaring twenties) so President Bush gave back even more money in 2003. The result? The richest one percent went from paying 25 percent of all income taxes to paying 39 percent. And the richest five percent went from paying 44 percent of all income taxes to paying 60 percent.

    Now here is all you need to know about the power of tax cuts: In 1980 (think Jimmy Carter/hell on earth), the top tax rate was 70 percent and the richest one percent paid 19 percent of all income taxes. Now, at 35 percent, the richest pay 39 percent. Additionally, in the decade after 1980 (and after Reagan’s tax cuts) the yearly revenue to the government increased and was greater for eight of the ten years. The average yearly increase for the decade of greed was $102 billion.

    So why the deficits? Give me an S, S! Give me a P, P! Oh hell, it’s SPENDING!

    The problem, to return to Professor Alesina, is not tax cuts, but spending. Tax cuts increase money into the treasury. Unfortunately, too many politicians, both Dems and the good guys, act like the extra income is found money to be spent in furtherance of their next campaign victory.

    Now back to your “It is true…” statement. You rely on CBO figures despite having been burned by CBO before (ObamaCare will save money!), but let’s go with it for a moment. According to the Heritage Foundation’s analysis of the CBO figures, the budget crisis has several causes and Bush’s tax cuts account for only 14 percent. “…33 percent was economic and technical revisions, arising from CBOs understandable failure to anticipate two recessions and two major stock market corrections over the next decade.” Other causes of the lost surplus were the 2009 stimulus (6 percent), other new spending (32 percent), new net interest costs (12 percent), and other small tax cuts and tax rebates (3 percent).”

    There’s that spending again. Of course relying on the CBO is silly, as I highlighted posts ago. Let’s not forget where this concept of a Clinton surplus came from, as pointed out by Heritage: The trillions of dollars in surplus never existed and in fact peaked at $236 billion in 2000. The surplus everyone uses as a mallet to bang poor George over the head with was a projection by the ObamaCare Will Save Money Office in early 2001. It assumed (what happens when you assume?) that the “1990’s economic and stock market bubbles would continue forever… It assumed no recessions, no terrorist attacks, no wars, and no natural disasters.”


  8. You, and (soon to be former) Speaker Pelosi also trust in the analysis of the CBPP, a “left-liberal advocacy group,” that was discredited by PolitFact, which discovered that Bush’s tax cuts resulted in the “rich” receiving only 35 percent of the benefits, while the other 95 percent of taxpayers got 70 percent of the benefits.

    Now what does all this mean? That whatever you believe, you can find evidence to support it, leaving you with common sense and personal philosophy. The two main issues at the core of today’s problems are taxes and spending. Fortunately for America, the Tea Party has reminded Republicans of their fiscal conservatism and scared the Democrats with the loss of their cushy jobs if they don’t fake concern. The result, maybe, is some common ground on government spending and it can be hoped that serious cuts will result. In that vein, the Heritage Foundation has a list of numerous federal agencies that should be eliminated and the powers they usurped returned to the states.

    Common ground, will not, however, be found regarding taxes. Taxes are a form of government control and therefore very important to Progressives, who seem to have no issues with tax rates above 70 percent. Conservatives value freedom above social engineering and believe freedom is only possible with a tax rate that pays for only those programs allowed by the Constitution. If Democrats insist on prosperity killing tax increases then Republicans should block every effort while trying to advance a further reduction in taxes.

    Personally, I favor a Dick Armey-style flat-tax, with everyone paying the same amount proportional to their income, above a certain tax-free allowance. It allows progressives to claim the tax is progressive, while giving most wage owners a stake in their country. Now the rate is another thing. I support ten percent because I don’t think the government should be taking more of my money than God wants for Himself, but ten is unlikely, since Liberals have a much higher opinion of themselves.

    You’re correct that I ignored the merits of Bowles-Simpson and as a firm believer that a thing can be judged by its enemies, the B.S. proposals (maybe they should have called it Simpson-Bowles) must have some good points given that it is being criticized by the evil, the NYT’s Krugman, the truly out of touch Pelosi and the greedy unions. But still, B.S. must be viewed skeptically considering that it ignored the elephant in the room, ObamaCare, and failed to strike preemptively against the elephant’s wicked step-parents, Cap and Trade. And of course they call for the raising of taxes ($8,000 per family), which is odd because at the same time they recommend a reduction of the corporate income tax rate. They foolishly believe raising taxes on citizens will help the economy while correctly believing that reducing the taxes on business will do the same. Is this what bipartisanship achieves?

    So to conclude (stop it Andrea), I was unfair in my initial response and I’ve come up with a solution. From now on I will apply a three strikes and you’re out approach: “It’s all Bush’s fault!”: Strike One!; “Obama is without guilt!”: Strike two!; is wrong!: Strike – wait a minute, what’s this? A base hit? “Unions are insane!” (I paraphrase): A double! “Nancy Pelosi eats worms!” (you know that’s what you meant): Another base hit! Bases loaded and so what if you struck out quoting Jimmy Carter, at least I made it to the end!


  9. Now some housekeeping: Regarding my unfair and untrue assertion about the Senator: “After Kennedy’s death, his friend, Newsweek Magazine editor Edward Klein, revealed that one of Teddy’s “favorite topics of humor was, indeed, Chappaquiddick itself and he would ask people, ‘Have you heard any new jokes about Chappaquiddick?'”

    I have never accused the Attorney General of loving terrorists. I’m quite certain he hates them as much as you and I, which makes his actions all the more reprehensible. I would prefer that he believed them to be unjustly persecuted freedom-fighters because then his actions would have some nobility. If there is another explanation for what he did, I’m all ears. I don’t like believing that Mr. Holder released killers for political reasons or simply to keep his job.

    “It is sad, really, that you so despise the human race (or at least the 99.9% of human beings who do not think exactly as you do).” I’m not sure where this came from, considering that 99.9 percent of human beings are not French. Isn’t my position, after all, that the American people are quite capable of managing their own affairs without the government butting in? Isn’t it, in fact, my belief that 300 million Americans know better than a bunch of power mad politicians? And have I not cheered the recent liberation of 50 million people? And wouldn’t there be a million more “despised” people allowed to be born each year if I had my way? What you could have claimed was that before the last election I thought that maybe 50 percent of American citizens had their heads up their asses, but I certainly didn’t despise them; pity yes, but only 50 percent. But since the election I’m quite happy to know that many heads have been dislodged and I am quite proud of the millions who have reclaimed their responsibilities as American citizens. In fact, I get the warm fuzzies just thinking about it.

    Rich R.

  10. Rich,

    These are the facts: The tax cuts and the two wars accounted for more than $2.6 trillion of national debt as of the end of 2008. If these policies continue, they will together add another $7 trillion in debt by 2019, including $450 billion in interest payments associated with those policies. That Obama “inherited” this budgetary circumstance is a fact – he did not create the deficits or the debt. It is his responsibility, however, to find a way to deal with the current deficits and the rising national debt and eventually to bring them to manageable levels. The future of our economy depends upon it.

    That Obama also inherited the worst economic recession since the Great Depression is also a fact. This recession started in December 2007. The economy, which had been steadily losing hundreds of thousands of jobs leading up to the 2008 elections, lost 750,000 jobs in November 2008; 700,000 jobs in December 2008; 800,000 jobs in January 2009 (Obama was not inaugurated as President until January 21, 2009); 750,000 jobs in February 2009; and 770,000 jobs in March 2009. Although the American Recovery and Reinvestment Act was signed into law on February 17, 2009, the added tax cuts and initial expenditures did not take affect until April at the earliest. Since then, however, job losses have steadily declined, and recently have become job gains (although I continue to believe that not enough effort was put on job creation, and I partly fault Obama for this – see “The Lingering Great Recession: Jobs Needed”). I think even you, Rich, would acknowledge that Obama cannot reasonably or accurately be blamed for the loss of nearly 4 million jobs between the election and his first nine weeks in office.

    I did not say that Bush is entirely to blame for the current deficits, the recession, and the full extent of the national debt. But he was the president for eight years when all of these things became worse, and he must therefore accept a significant share of the blame. I understand that the economy is cyclical and that many factors having nothing to do with government policies often affect its performance. But just as the performance of the economy is now on Obama’s shoulders, the results of the previous eight years must fall on Bush’s shoulders. This includes the recession. That Bush “inherited” eight years of peace and prosperity and a $236 billion surplus, which he almost immediately and irresponsibly wasted, only makes matters worse. Nevertheless, my essay concerned the problems our country is facing from the deficit and the growing national debt, regardless of who is to blame.

    Your contention that tax cuts stimulate the economy is historically true, at best, only in the short term, and the extent of the benefits are difficult to measure. But ten years of sustained tax cuts failed to prevent the worst recession since the Great Depression and have done little to help us out of the recession. In any event, the Bowles-Simpson proposal appropriately recognizes that its deficit reduction provisions should not begin until 2012, to provide further time for the tax cuts and stimulus spending to assist with the slow, but progressing economic recovery.


  11. Rich (cont'd):

    Your relentless and tiresome ridicule of health care reform, while offering no positive solutions, other than, “You’re on your own, Grandma. I don’t give a shit if you don’t receive medical care…”, is getting old, as is your failure to acknowledge the long-term cost savings measures and reforms in hospital cost containment scheduled to take effect over the next several years, none of which would apply if the Tea Partiers have their way.

    Social Security, Medicare and Medicaid are not part of the current deficits – the problem with these programs is that, due to an aging population and the projected growth in per capita health care costs, the entitlement programs (particularly Medicare and Medicaid) will grow way beyond what we can afford at present. This is a real problem for the future, and it is why true debt reduction efforts will need a bipartisan solution. Simply proposing that we do away with these programs, as you seem to suggest, only proves that you are not interested in finding real solutions.

    Now, I don’t know how Ted Kennedy and Eric Holder got inserted into this discussion – oh,yeah, it was your graceless way of putting down my entire blog and fifteen months worth of effort – but I really am tiring of your constant harping on the Chappaquiddick incident, particularly when it has nothing to do with what I write about (the only thing I have ever said about it was that it was a tragic incident that resulted in the loss of a wonderful human being and that Kennedy had exercised incredibly bad judgment in the whole affair). You, of course, take at face value (actually, at less than face value, but more on that shortly) the word of a man (Edward Klein) whose credibility and concern with the truth is non-existent. As you are probably aware, Klein authored a book a few years back on Hillary Clinton (“The Truth About Hillary . . .”) that was so bad that even Fox News and other anti-Hillary folks disowned it. The book was repeatedly exposed as a sloppily researched, factually challenged hit piece that merely recycled long-debunked and dismissed criticism of Clinton. Former Reagan and Bush Sr. speechwriter Peggy Noonan, who authored her own Hillary book (“The Case Against Hillary Clinton”), called Klein's book "poorly written, poorly thought, poorly sourced and full of the kind of loaded language that is appropriate to a polemic but not an investigative work." New York Post columnist John Podhoretz branded it "one of the most sordid volumes I've ever waded through. Thirty pages into it, I wanted to take a shower. Sixty pages into it, I wanted to be decontaminated." The book's tone is clear from the second page of Chapter 1: "Was it true they slept in separate beds? Were there any telltale signs on the presidential sheets that they ever had sex with each other? For that matter, did the Big Girl have any interest in sex with a man? Or, as was widely rumored, was she a lesbian?" And this is the guy you want us to believe concerning Kennedy? By the way, when you wrote that Kennedy “spent his life making jokes about it”, you failed to acknowledge that even Klein added, “It’s not that he didn’t feel remorse about the death of Mary Jo Kopechne, but that he still always saw the other side of everything and the ridiculous side of things, too."


  12. Rich (cont'd):

    You have often lectured me to go straight to the source, rather than rely on biased sources and third parties. Here is what Senator Kennedy said about the incident in his memoirs shortly before his death: “That night on Chappaquiddick Island ended in a horrible tragedy that haunts me every day of my life. I had suffered sudden and violent loss far too many times, but this night was different. This night I was responsible. . . . I am aware that there are many who are skeptical of my [past] explanation[s]. And I am aware that there are others who are contemptuous, with the unchecked chatter in the blogosphere even going so far as to spin totally false, bizarre, and evil theories that do not deserve to be repeated here. . . . But whatever attacks and misrepresentations I have suffered as a result of Chappaquiddick, I know that they have been nothing compared to the grief endured with dignity by Mary Jo’s father, Joe, who died on Christmas Eve 2003, and her mother, Gwen, who died in 2007. I know that my public discussion of that terrible night would only have caused them more pain. . . . What I said and did in the ensuing hours [following the accident] has been copiously recorded, examined, disputed, and debated for decades: my devising and rejecting scenarios with Joe and the others that flashed compulsively through my feverish thoughts; swimming across the channel to Edgartown; delaying in reporting the accident. I am not proud of these hours. My actions were inexcusable. Perhaps I have not made my acknowledgment of this clear enough over the years. . . . Mary Jo Kopechne was an innocent young woman who had done nothing more than been loyal to my brother and his cause. And she lost her life in an accident when I was at the wheel. I’ve had to live with that guilt for forty years. But my burden is nothing compared to her loss and the suffering her family had to endure. She also didn’t deserve to be falsely linked to me in a romantic way. She deserved better than that. And God knows her parents did.”

    Now, I know this means nothing to you, because you have the unverified statement of a proven bucket of pig vomit. Whatever. Believe what fantasies you want. I fail to see how this has anything to do with the Deficit Commission and my, futile in your case, appeal to bipartisanship. Maybe it’s because Ted Kennedy was one of the best Senators, one who knew how to work with the opposition, who was widely admired and respected for his legislative skills in achieving great things for the country. Somehow, getting Democrats and Republicans together to work out a compromise and solutions to real problems always seems to get under your skin. Get over it.

  13. Mark and Rich, I enjoyed your debate about making sure our generation does not impoverish the next. I do not want future generations thinking of us as "The Greediest Generation". But neither of you actually addressed the real issue. It does not matter if you are a liberal or a conservative, you need only to be able to do basic arithmetic which shows that Social Security and Medicare cannot be sustained at the levels they are and are projected to be.

    Plain arithmetic shows we must raise the age and lower the benefits of Social Security. We must also make deep cuts into Medicare by any means necessary. Compassion is wonderful but it does not pay the bills. Tort reform is one example of how this could be done.

    I will give you an example of how far doctors have to go to protect themselves. I recently had cataract surgery in one eye. This is a simple outpatient operation. However the doctor insisted on an anesthesiologist being there to administer a mild intravenous sedative even though doctors can do so without an anesthesiologist. And a sedative is not even needed in an overwhelming majority of the cases. The anesthesiologist insisted on me having a complete physical including an EKG and blood work done before he would administer the sedative. The complete physical had to be within 30 days prior to the cataract surgery. The cataract surgery did not go as well as expected so the eye doctor had to replace the first lens. But he had to do it within 30 days because, if he did not, I would have to get another complete physical including another EKG and blood work. My health plan covered this because I have chosen not to get Part B of Medicare. But if I had been a Medicare patient, Medicare would have had to pay for all these expenses. And the ironic part is that in the Commonwealth of PA even a dentist can use the same anesthesia without an anesthesiologist.

    In my case the eye doctor was protecting himself by using an anesthesiologist. The anesthesiologist was protecting himself by insisting on the complete physical thus shifting any blame to the family doctor.

    And if I choose to have my other eye done, I will have to go through the same process.

  14. Mark and Rich, oontinued)
    As far as the military budget is concerned, I agree it is way too high and could easily be cut by at least 20%. Every company in America has cut cost using computers and other modern technology. The military should also be able to do so.

    We could easily cut a lot of our defense budget if we stopped being Israel's big brother. A billion Muslims hate or, at least resent, us because of our relationship with Israel. We should treat Israel just as we treat any other country but not better. Our unwavering support of Israel even when she is wrong (e.g. building housing in an area in which the US has asked them not to) is the main reason we have so many problems in the middle east. We did not have any problems in the Middle East before 1949. Maybe 9-11 and the two current wars would not have occurred if we were not so despised in the Arab world for our support of Israel.

    We correctly criticize Iran for secretly building a nuclear weapon. Yet, Israel did the exact same thing in the mid-1950's when they developed their nuclear weapons in secret with the assistance of the French and against the wishes of the United States and Great Britain. They repaid the French by supporting them in the Suez crisis. I have read a book written by one of the Israeli scientists who worked on the project and outlined how they avoided the USA knowing they were building nuclear weapons. In 2001 Shimon Peres, Israel's then foreign minister, went on record in a TV documentary acknowledging the scheme (The Bomb in the Basement; Israel's Nuclear Option)

    Concerning income taxes, I think everyone should have to pay something. It does not seem fair to me that 49% of households don't pay any federal income tax. However, they are protected by the same military as a taxpayer and they use the same government services. Why should they get a free ride? If they can afford cars and cable TV and other necessities, they can surely contribute something to keep this country from bankruptcy. I believe everyone should have to pay a minimum of at least 2% of their adjusted gross income in income taxes.

  15. Bill,

    I agree with you on tort reform, trial lawyers be damned. I would absolutely place strict limits on punitive damages and medical malpractice awards. The fact is, medicine involves risks and, while we need health and safety guidelines and regulations, and proper licensing and disciplinary boards, your example should be entirely avoidable. Pennsylvania has a shortage of doctors, particularly in certain specialties, because of extremely high malpractice premiums.

    I also agree with you concerning the need to do something about social security and Medicare. Social security is relatively easy to fix - I would raise slightly the age of eligibility (with some exceptions) in the long-term, given our higher life expectancies, and if necessary, raise slightly the salary limits on SS taxes. As for Medicare, I worry about reducing coverage, because for most of us, Medicare is the only health coverage we can count on when we will most need it. My parents, for example, could not survive without Medicare. But there is no question that something will need to be done to make the numbers work.

    I also agree in principle with the need to reduce defense spending - it certainly has to be on the table with everything else. How much we can cut without sacrificing our national security is the big question, but there is no doubt that substantial savings can be found. What cannot be cut, in defense and everything else, must be paid for, so if that means higher taxes, so be it. I do not see how we can reduce our national debt without some combination of spending cuts and tax increases. It is simple mathematics.


  16. Bill (cont'd):

    As for Israel, as you know from our past exchanges, I cannot agree with you here. First, although Israel is indeed a major recipient of U.S. aid, it totals $3 billion - all of it in military aid, 75% of which must be spent with U.S. military contractors. So, even if we cut our aid entirely to Israel, it would not make a dent in the national debt.

    Second, next only perhaps to the United Kingdom, Israel is by far the most important ally of the United States. While we have our disputes with Israel over its handling of West Bank settlements (I do wish they would put a stop to them), Israel has proven to be our most trusted and reliable friend. It is a major strategic asset in the most volatile region of the world, and unlike virtually every other country in the Middle East, Israel shares our values of liberty, democracy, and human rights. In the UN,Israel votes with the US over 90% of the time, while most Arab countries, virtually all of them also recipients of US aid, reflexively vote against the US in most instances.

    Israel also is invaluable in terms of the military intelligence and logistical assistance it offers us. During Desert Storm, for example, Israel provided valuable intelligence, air cover for our military cargo, and it had personnel planted in the Iraqi deserts to pick up downed American pilots. Gen. George Keagan, former head of U.S. Air Force Intelligence, has stated publicly that "Israel is worth five CIA's" regarding the quality of intelligence turned over to the US. Moreover, while Israel effectively secures NATO's southeastern flank, not a single American serviceperson needs to be stationed in Israel, which by most estimates saves us over $5 billion a year (it costs approx. $200,000 per serviceperson, including backup and infrastructure, to be stationed overseas). Israel not only has a superb harbor, excellent air and sea lift capabilities, and sophistical equipment readily at hand, it is the only country that makes itself available to the US in any contingency.

    Yes, Israel has nuclear capability, but they face threats to their very survival every day. And while our relationship with Israel is often blamed for the radical Islamists' hatred of the United States, that hatred goes far deeper than any of our alliances. If we ceased all relations with Israel tomorrow, we would still be hated by Al-Qaeda and the radical Islamists. It is our wealth, our Western values, our culture, that they hate. Our relationship with Israel is only an excuse, proven by most Arab countries' disdain for and disinterest in actually assisting Palestinians.

    Thanks for commenting. As with Rich, it is always good food for thought.