Obama’s right: we don’t have a spending problem
Got your attention, didn’t I?
It’s not that I agree with Obama when he said to John Boehner that the US doesn’t have a spending problem.
But it’s all in how you look at it. If you believe certain things, you can really convince yourself we don’t have a spending problem—or at least we wouldn’t if only—if only!—we could implement certain solutions.
For example, a person who had maxed out on his/her credit cards to the tune of twenty thousand dollars would appear to have a spending problem. But if that person could come up with the money, he/she wouldn’t have a spending problem. So you could reframe the whole thing and call it a cash-flow problem, or maybe a revenue-raising problem.
One remedy might be for that person to win the lottery. Another might be to get a really really good job.
Another might be to rob a bank.
If one (or all!) of these things happened, that could mean there wouldn’t be any spending problem at all.
Obama thinks we have a revenue problem. What’s the solution? Well, we could print more money, but that would raise problems of its own. Or, we could stimulate the economy more and more and more, and then (according to a certain school of thought) that would raise employment and productivity and incomes and thus the government would obtain more revenue through taxes without even raising the tax rate—although of course raising the rates would make it even better. The left—and Obama—believe that we could raise the tax rates more and more and more—and have people finally pay their “fair share,” which would be defined as whatever the government needs to take to make up for its non-existent spending problem—and voila! No spending problem.
I know, I know; Obama is ignoring the evidence that there is a very real spending problem, one that can’t be wished or away or banished rhetorically (see this, this—“the US is ‘the healthiest horse in the glue factory'”—and this.)
The real question for Obama is: does he actually believe what he professes to believe? Does he think that if he implements these solutions it will solve our fiscal difficulties, and therefore that there’s no real “spending problem”? Or is he lying, and is it really that he’s just not interested in the spending problem? Is creating a more “fair” society (i.e. income redistribution) his first and greatest priority, and is he intent on seizing this opportunity to do so, calculating that subsequent presidents can just bloody well deal with the deficit if they’re so inclined?
Obama believes in maximizing redistribution of wealth. In that endevour, he is succeeding spectacularly. Nothing else matters (to him and his supporters).
“The left–and Obama–believe that we could raise the tax rates more and more and more–and have people finally pay their “fair share,” which would be defined as whatever the government needs to take to make up for its non-existent spending problem–and voila! No spending problem.”
yeah, but, what kind of taxation level would we need? Considering we don’t only have to close the deficit; we need to payoff the debt / IOU’s in the social security and medicare funds.
I question if it is really possible.
Of course BHO is lying. And, he is not interested in fairness, whatever “fair” is supposed to mean in the twisted vocabulary of the left.
thomass: the articles I linked to in the next-to-last paragraph attempt to explain why it is not possible to raise enough revenue that way.
He is much more interested in maximizing the state role than achieving fiscal health. His opinion (like FDR) was that the economic health of the nation is secondary. Look at the extension of unemployment benefits to what amounts to forever. This keeps the long term unemployed out of the poorhouses and grateful to him and the state. Taxing the rich puts them in line to gain valuable tax exemptions like in the 1960’s. We will become a less important military power like the Europeans in order to pay for some of this. Also in his playbook. People will get tired of this
“I question if it is really possible.”
IMO we passed the point of possible on November 6, 2012.
parker: oh, I do think think that Obama is interested in “fairness,” as he defines it.
It’s not the way you or I would define it, but it is most definitely an interest of his.
What’s more, although I think he indeed may be lying, I’m not sure in this case. I don’t think Obama understands economics at all (in this, he has my sympathy/empathy—but then again, I understand my lack of understanding, and I didn’t run for president and think I know it all). But I think there is at least a fair chance that he really does believe what people on the left tell him about economics.
Neo, I read them and didn’t see what I was interested in.
What kind of tax rates would we need today to not have a spending problem? Keeping in mind mandatory debt pay downs (re: entitlements due, fed retirement funds, et cetera).
People are complaining about $35 a paycheck due to the cliff deal. What do they really need to pay to not have a spending problem?… forgetting they already are paying via inflation and no raises due to no growth…
thomass: my guess is that it would be at Scandinavian levels or more, with a huge VAT too. I read somewhere (don’t have time to look it up now) that the amount we collect in taxes in this country remains somewhat stable over time if expressed as a percentage of GNP. My guess is that that percentage would have to go up considerably.
Oh, I just found something helpful. This chart enables you to compare the US to countries in Europe and around the world. See the figures for the UK, Germany, France, and Sweden, for example.
The problem with leftists is that fundamentally they believe that markets and profits and prices have absolutely no relation to reality. A free market system may not be perfect, but if you don’t acknowledge that there is at least a rough justice in the necessary balancing of costs and expenditures, you come to believe everything is arbitrary and a matter of political will. The whole system becomes a construct of the ruling class. I think that’s where Obama is. He believes all the left wing fairy tales. Rich people have endless piles of cash they just won’t share. We’ll add 47 million people to the health care system, and bring costs down. Energy is expensive? Put a windmill on your roof. Etc., etc.
Apropos of that chart linked by Neo at 3:23PM, Panama’s 10.6% caught my eye.
Question: This is just anecdotal and may be confined to a very few local instances, but has anyone else been hearing stories about younger (30 somethings) and even older Americans starting to move down to Pamana? What’s up down there?
Yesterday I also read somewhere that retired Americans are now moving to Ecuador, where they can live pretty well on their social security. Hmmm….
“my guess is that it would be at Scandinavian levels or more, with a huge VAT too.”
I’m guessing those wouldn’t cover it. Not even including the shrink in the tax base when we flee.
Neo: Good chart. Note that the percentage for the US does not include state and local taxes. Also, note that Zimbabwe has almost the highest percentage of taxes to GDP . . . which gives an idea of the kind of prosperous and “fair” society Obama is taking us toward.
neo questions and M J R answers:
“The real question for [the incumbent] is: does he actually believe what he professes to believe?”
Very few lefties believe what they profess to believe. They profess what they have to profess in order to further their agenda.
“Does he think that if he implements these solutions it will solve our fiscal difficulties, and therefore that there’s no real ‘spending problem’?”
I don’t think he thinks in those terms. There’s no spending problem, there’s only the “fairness” problem, which today manifests itself in taxing productive people more, and tomorrow — who knows? So in this, I disagree with Parker (2:54PM) — today.
“Or is he lying, and is it really that he’s just not interested in the spending problem?”
In this instance, I think he is neither lying nor not-lying. He’s just not interested. (“He’s not that into you.”) It’s all “fairness” to him.
“Is creating a more ‘fair’ society (i.e. income redistribution) his first and greatest priority, and is he intent on seizing this opportunity to do so, calculating that subsequent presidents can just bloody well deal with the deficit if they’re so inclined?”
Never let a crisis go to waste.
Damn any consequences for any damn one else.
And neo responds to Parker (3:00PM), “I don’t think Obama understands economics at all . . . . But I think there is at least a fair chance that he really does believe what people on the left tell him about economics.”
Now, you’re talking! No, he does not understand economics at all. He “understands” it only to the extent that it supports his agenda.
roc scssrs says, 3:24PM — “The problem with leftists is that fundamentally they believe that markets and profits and prices have absolutely no relation to reality.”
Will you accept the following as a friendly amendment?: to the extent that leftists care about markets and profits and prices, they believe that those ^ought^ ^to^ bear some realistic relation to reality, and the lefties’ job is to see to it that they do, by ramming through whatever fanciful scheme some Krugman-type Nobel Laureate dreams up.
These people are not interested in the way things are, only in the way things ought to be.
[ exhales ]
neo,
You may be correct about BHO sincerely believing in “fairness” and the myths of leftist economics, that is far kinder that my take on his personality.
“This is just anecdotal and may be confined to a very few local instances, but has anyone else been hearing stories about younger (30 somethings) and even older Americans starting to move down to Pamana? What’s up down there?”
If Panama is anything like its neighbor to the north, Costa Rica, it has a low cost of living, beautiful countryside, generally pleasant citizens, decent healthcare, abundant fresh food, and a moderate climate in the highlands.
For what it’s worth, I believe Obama believes is he’s right, no matter what the subject is. There is no doubt in his mind he’s right about taxes, the economy, and so on. Yes, he’s an idealogue, but first and foremost, it’s backed up with an ego that barely fits in the Milky Way.
Not even his supporters credit him with studying a problem, or any problem – economics, foreign policy, etc. He’s credited with being so smart, he KNOWS all these things. Instinctively. And he believes these things about himself – he knows he’s right, and even if he’s proven wrong, he still did the RIGHT THING -he has the moral high ground to fall back on — by believing you are doing the greatest good, you are at once forgiven if you are wrong. Well intentions cancel bad results.
Adding to it all is a media and culture that admire and reward stupidity and ignorance as long as it’s packaged as principled stupidity and ignorance.
Even bad results that cause more suffering may be overlooked, as long as he claims to be doing it in the name of fairness. He’s a born Marxist, and in another time or place, he would be a very convincing dictator.
Does he believe these policies are correct — you better believe it. Does he care if he’s right? No, not as long as he tried to be fair.
I believe his deficit spending has a purpose, and he’s well aware what he is leaving for any future president:
Greatly reduced American power through a diplomatic policy of burning our ties with our traditional allies, and an emaciated military that may never be rebuilt because of an entrenched entitlement class.
Arthur Brooks on Obamanomics:
http://tinyurl.com/b9vcyul
Of COURSE he believes we don’t have a spending problem.
I’ve know many drunks that didn’t believe they had a drinking problem.
He’s addicted to spending… other peoples money.
I have corresponded online with one person that moved to Panama to retire: http://onemoregoodadventure.com/ . The main reasons for relocating to Panama have to do with an excellent health care system, low cost of living and stability.
Neo asks, “The real question for Obama is: does he actually believe what he professes to believe?”
I reply, real questions have real answers. This is not a “real question”; it is to apparently stimulate speculation about motives and knowledge. I find such speculation pointless, reminding me of “Why did the chicken cross the road?” or why did the Newtown killer choose an elementary school instead of the high school or another venue.
Speculations are not facts and are not answers to real questions.
One does not ask firemen to speculate about causation when one’s house is on fire. One asks, “Can you put it out, or is the house gone?”
Posing the “real question” to Baraq will never yield a real answer, will it?
Sorry for being crabby.
anyway; the best weapon, imo, against Obama would be examples of what needs to be paid.
He’ll deny it, call it a lie, the media won’t report the whole story… but if it could be broken down into a couple paragraphs and basic math equations I think it could wake some people up were they exposed to it… we all said Math was Ryan’s magic weapon. Well; he failed to deploy it. Doesn’t mean it wouldn’t be devastatingly effective.
A personal aside; things were pretty much the same as now when I was growing up. Left controlled everything. It can cause doubt, having so many cultural levels saying your wrong, an idiot, and worse… 24/7/365. Then I’d look at what they said about taxing and spending (even back in the 80s) and knew they were wrong.
Don Carlos: I find the question interesting nevertheless.
I like to at least try to understand what makes people (or a certain person) tick. It’s a sort of hobby of mine, rather like making model airplanes.
Every now and then it comes in handy, too. You never know.
BHO-Pelosi- Reid axis of ‘evil’ has a rare ability to make rational, informed people crabby 100% of the time. 😉
Subsequent Presidents to deal with the “problem”? The next may well be Cuomo, and he wont deal with it either. The history of Presidential elections is no longer relevant. The landscape has changed permanently, people.
“The landscape has changed permanently, people.”
The landscape has definitely changed, I’m not ready to accept it is permanent. IMO we are a few years away from a global depression. When that happens its all up for grabs.
Neo…
As a First Person Witness I can assure you that Barry is infused with an anti-Numbers Person persona.
Anyone and everyone who tells Barry that the number won’t work is psychologically stepping into the shoes of his hated, hated tutu.
You remember? …
The one who was the head cashier/ numbers gal at the big local bank….
With whom he deliberately triggered temper tantrums…
The same gal who’s daughter was in fulsome rebellion?
Far more than the MSM can tell — Barry lives his life in total rebellion to the numbers ethos of his Grandmother.
The MORE anyone tells him otherwise, the more Barry is compelled to “punch back twice as hard.”
This battle is flowing up out of his subconscious.
One should not, ever, get lulled into thinking that Barry is driven by anything other than his reactive-dependent nature.
This is so pronounced in his case, that the MORE he is told that such and such will blow up, the MORE he wants to bull ahead.
For, he is fighting the demon tutu in his head.
—————
In the bubble world, Barry’s tread worn in the pursuit of the ‘Bling of Power.’
It’s a big, long, rainbow out there…
So it takes a jumbo jet to get him thence.
And with each landing, he gets his pot…
Choom, choom, cherrie….
=================
For those slow on the uptake:
In a fiat financial environment a government does not borrow money to make up for ordinary tax shortfalls…
It debt-prints the balance.
This tic debases the currency – – it’s a WEALTH TAX.
So, the ONLY debate is whether the government is going to cover its spending by conventional taxes or by debasing all financial assets in whatever guise.
True taxation, in a fiat environment, always equals government spending.
If you want government interference in the economy/ taxation to abate — one must ask the Congress to stop helping so much.
———–
The fact that the financial press and most of Ivy insists that MMT is true does not make it so.
It was but a few centuries ago that the best and brightest insisted that the galaxy revolved around the Earth.
We’re still stuck with the zany notion that our everything revolves around Big Government.
===========
Which brings me back to my youth…
And my Jewish neighborhood.
Of whom all the adults bewailed the follies of big government — and their horror of its intrusions…
Promptly followed by solutions that stipulated even more government on an even larger scale…
Compounded by a well neigh universal assumption that human beings morph into angels once in office — or apart of the civil service…
The other ambit — heard even from my kin — was for pre-emptory rules and regulations which would, magically, make it impossible to commit acts — which were already fulsomely outlawed — felonies, in fact.
==========
Like Barry, all of the above are instances of Magical Thinking — as an analyst would term it.
Such fantastic pipe dreams fly forth, un-vetted by the travails of experience, as the infantile mind projects a naé¯ve hyper-confidence in its supreme judgments.
Yes: “This time it’s different.”
That about covers it.
“Enlightened statesmen will not always be at the helm.”
James Madison, Federalist No. 10, November 23, 1787
parker:
I most sincerely wish I was wrong. But a good captain cannot right a capsized ship. This capsize is permanent. Haed to accept. Yes, there may be some tweaking around the edges, but a 90% capsize is still capsized.
It is a great national tragedy; all I can do is to take care of my kids, preparing them for their duration under this pile of sh*t that the USA has become. Federalism is the only hope, but that requires great men with great convictions and courage, which will be fought tooth and nail by the Beltway crowd and the Imperial Prez.
I think if we taxed everyone at 100%, we would still have a spending problem.
The only things O believes in: Kona Gold and Maui Wowie. The dude is a puppet. Cleaned up and taught to read a prompter.
Don Carlos,
I understand your POV, sometimes I lapse into that mindset, but mostly I am an incurable optimist. I am of the never give up mindset. Conversely, I may be a fool soon to be targeted by a drone.
“Federalism is the only hope, but that requires great men with great convictions and courage, which will be fought tooth and nail by the Beltway crowd and the Imperial Prez.” I completely agree. It now seems the only option for a sane, relatively peaceful solution rests with (some of) the states asserting their sovereignty. Otherwise we will see the 3rd box as the only recourse.
First we take the FED, then we take the DC. 😉
http://www.youtube.com/watch?v=yA16lsLbwU0
Its all about spirit, our spirit is stronger when it all comes down to dust. “You loved me as a loser, but now you’re worried that I just might win. You know the way to stop me, but you don’t have the discipline.” If I did not believe that I would be cashing in every asset and moving my children and grandchildren to Costa Rica or perhaps NZ.
http://www.youtube.com/watch?v=m78cSts3tJw
This is wisdom.
“… extension of unemployment benefits to what amounts to forever. This keeps the long term unemployed out of the poorhouses and grateful to him and the state.”
So many right on m*ther f&cker comments! We, after the dust and ashes settle will prevail.
Teri Pittman from 7:14PM on 1/8:
Thanks for the link to the site of that expat living in Panama.
Ten bucks a month for electricity sounds pretty good right about now….
Redistribution I would say.but not his and his crony’s. Who really benefits from leftist redistribution theory? Those in control of the redistribution. It truly separates the ‘leaders’ from the masses.
It is true, we don’t have a spending problem, THEY have a spending problem!
Steve D Says:
“I think if we taxed everyone at 100%, we would still have a spending problem.”
Or close to it.
This trillion $ idea which is being floated by the clever people who are miles above us commoners:
If we knew beans about anything we’d realize that (as St Keynes saideth) money is the creation of the state, so it can create as much as it wants, including a single coin stamped with $1,000,000,000,000 on it.
My question is, then why the hell do you need us tax payers? Either this coin is just the last desperate fraud of a bankrupt or we can close down the IRS. Happy days are here again!
parker@11:36pm:
Fleeing the USA is actually not so easy, Going as a tourist is fine, but getting a permanent residency permit is much more difficult.
Costa Rica and NZ are appealing to the Green crowd. Both have national health insurance schemes. CR has just banned all forms of “recreational” hunting. A coming ban on personal gun ownership is therefore not unlikley.
I do not want to trade one stifling, know-it-all government for another.
A few years ago, when I was doing some work for a NZ company, I looked into moving there and found that I, then a 30-something with a 4-year degree, some amount of available assets (if I sold everything I had, including my house), perfect credit and clean record, with a job in the country and having already even paid my small share of NZ income taxes for a couple of years, had no reasonable chance at permanent residency. Certain events in this country had me recently checking immigration rules elsewhere and I found situations like awarding points on WHICH college degrees you have, to go toward consideration on whether to let you in. Apparently only the US is obligated to let everyone move in.
Don Carlos Says:
“I do not want to trade one stifling, know-it-all government for another.”
I’m thinking Uruguay. They have national healthcare; but unlike here you can buy your own insurance and there are private hospitals (ours will be absorbed in ACO’s and not be independent).
Sane tax levels, sustainable spending, private gun ownership is allowed, you can show up as a tourist and apply for citizenship… et cetera…
The prez is a socialist but he seems reasonable. He is even the kind that leads by example… he donates most of his salary to charity.
by own insurance I mean not controlled by the government insurance. Once we have to buy on the exchanges we won’t be able to pick what our policies cover.
With regard to retiring in Panama: I was stationed there in the army so I know why people are retiring there. It is due to the fact that prostitution and gambling are legal.
Expat paradises? New Zealand? You can’t just pick up and move to New Zealand. To get a green card you have to have a job skill that is lacking there. If you want to retire there, you have to have a suitable income (not sure how much that is – but prices are high there) and be able to deposit $4 million dollars with the government for each person moving there. That’s to take care of all the healthcare and other benefits you may receive and didn’t pay for when you were younger. The Kiwis cannot support a bunch of ne’er do well immigrants and they know it. Thus the rules. Being an isolated group of islands in the South Pacific they don’t have much problem with illegal immigration.
Costa Rica is a socialist country that is becoming more socialist with the passing years. (They nationalized most of their private companies some years back.) Their newest scam is selling carbon credits to countries as a way to increase national income. You can retire there fairly easily but beware of the private property laws. Especially as to real estate. You may be sold land and not receive a real title. You may buy land and find squatters moving on it with no way to remove them. There are many pitfalls that we Yanks may not see until too late. Not my cup of tea.
Panama has a tropical climate – with all the issues that entails. Cheap and possibly exciting place to live as long as you are healthy and have a certain amount of vigor. Visited there and saw nothing that attracted me. But your mileage may vary.
Uruguay is a possibility. They are looking for well heeled retirees to move there. Their primary industries are cattle ranching and fishing, so they see expat retirees with a decent income as a source of capital. It has escaped the progressive excesses of Argentina, has a pleasant climate, no earthquakes, and the people are relatively welcoming. Decent Spanish skills would be a plus. It is, however, a long way from the U.S. and, being a South American country, could be subject to government instability without notice.
Canada might be a better bet for most Americans. Of course the weather there is colder than down here, and other than Alberta, they are a high cost of living nanny state with a bilingual culture and a separatist province. They have their problems just like we do.
IMO, it is better to try to change things here than to escape. But that’s just me.
J.J.: it’s not easy to move to Canada permanently either, as far as I know.
I’m with you. There’s no country I’d want to live out my twilight (golden?) years in other than right here. Of course, if things get worse, I could change my tune.
Another thing is that if all the older conservatives move away, the country will move even further to the left.
I’ve been to Panama, Costa Rica, and Argentina (not Uruguay). Not for me at all.
Mention of Uruguay makes me think of this.
neo, “J.J.: it’s not easy to move to Canada permanently either, as far as I know.”
That was true in the past, however, I live just 60 miles from the B.C. border. We have Canucks by the thousands down here gobbling up our low priced goods. In our local Costco half the license plates in the parking lot are from B.C. On the inside of the store a great many of the shoppers are Chinese/orientals who don’t speak much English. When we see them out in the parking lot they always get into cars with B.C. plates. The conclusion I draw is that the Canucks are accepting a lot of orientals. Canada used to have a rule much like New Zealand about only accepting occupations that they needed. Are these orientals in needed occupations? My guess is no. But it could be they have enough money to support themselves or deposit with the Canadian government to be admitted. I guess I need to do more research on that one.
Neo-neocon says:
…”The real question for Obama is: does he actually believe what he professes to believe? Does he think that if he implements these solutions it will solve our fiscal difficulties, and therefore that there’s no real ‘spending problem’?” …
southpaw says:
…”Does he believe these policies are correct – you better believe it. Does he care if he’s right? No, not as long as he tried to be fair.”
I think it’s a mistake to assume that BHO does anything to make a better America. His sole motivation is to enhance his Great Man status, and part of accomplishing that is to speak of wanting to make society “fair”.
His goal is, as we know, to transform the United States, but what he hasn’t let us know so far is the extent of the desired transformation. If, when he leaves office, America has become one monolithic, top-down bureaucratic state, with hundreds of thousands more federal workers and of course with a single payer health care system, he will have succeeded.
Also, since he is bent on taking down our defenses and reducing America’s military and economic status in the world — in short, make us as unexceptional as possible — I assume he wants America’s humiliation; all this in service of showing him to be the Great Power he believes he deserves to be. In his own mind, he’s always been greater than the country he purports to serve.
When circumstances have shown him to have made a mistake, sometimes you can glimpse his anger, but he seems to sweep aside any notion that he’s wrong. I know only one other person I would call a narcissist, and she (like Obama) will never blame herself for anything or take responsibility for a serious mistake, is incapable of self-deprecating humor but does enjoy jokes at the expense of others, and loves the spotlight.
I’m no expert on narcissism, that’s for sure, but I can’t look at Obama without seeing him or interpreting his actions in that light.
Maybe I’ve finally gone off the deep end…
J.J. formerly Jimmy J. Says:
“In our local Costco half the license plates in the parking lot are from B.C. On the inside of the store a great many of the shoppers are Chinese/orientals who don’t speak much English.”
Because Hong Kong was to be turned over to Chinese control in 1997, from 1991 to 1996 “about 30,000 Hong Kongers emigrated annually to Canada, comprising over half of all Hong Kong emigration and about 20 percent of the total number of immigrants to Canada.”
…”The great majority of these people settled in the Toronto and Vancouver areas, as there are well-established Chinese communities in those cities.”
See:
http://en.wikipedia.org/wiki/History_of_Chinese_immigration_to_Canada
You did get my attention. I thought you were just another mindless follower.. Good Blog..
Jan, thanks for the link. Interesting info.