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Regarding the Deficit

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April 27, 2010 – Comments (12)

Regarding gaining control over the looming federal budget deficits:

Obama said that getting the job done is "going to require the people of both parties" to put politics aside. (link)

Ummm, Mr. President?  When was the last time that happened, exactly?

Regards,

Russell (a.k.a. TMFEldrehad)

 

12 Comments – Post Your Own

#1) On April 27, 2010 at 12:37 PM, JakilaTheHun (99.93) wrote:

The bigger problem is that neither party is willing to touch one of the big three:

(1) Military spending

(2) Social Security

(3) Medicare/Medicaid

#3 got tinkered with a bit during the whole Obamacare thing, but then we added new spending in that bill, so it won't put a dent in the deficit.  

The Democrats are totally unwilling to touch #2.  The GOP would be more likely to do something to it, but they are likewise, unlikely to do so. 

The GOP is totally unwilling to touch #1.  Just as above (but inverted), the Democrats would be more likely to do so, but it's unlikely. 

Neither party will raise gasoline taxes so that the Highway Trust Fund's expenditures are fully funded, either. (Imagine --- a system where prices are set so that receipts and expenditures are equal!  Unheard of!)

All in all, politicians mostly seem to live in a fantasy land until reality finally forces them to act (as it did in Greece).  The only exception to this rule seems to be in New Jersey, where the new Governor, Chris Christie, has aggressively sought cuts in spite of strong opposition.  

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#2) On April 27, 2010 at 12:47 PM, Melaschasm (55.51) wrote:

Most likely Obama is talking about the 'need' for republicans to abandon their principles and increase taxes.  That happened during both Clinton and Bush Sr. Administrations. 

What are the odds that the republicans go along with a tax increase right now? 

My best guess is about a 30% chance of republicans voting to increase taxes.  If the Tea Parties were not getting so much attention right now, I would give a 70% chance that republicans would vote for tax increases.

 

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#3) On April 27, 2010 at 1:29 PM, outoffocus (23.09) wrote:

What are the odds that the republicans go along with a tax increase right now?

Neither party is going to increase taxes outright. However taxes will go up. How you say?  They will remove or reduce the deductions, credits and adjustments on the tax return.  The tax code is just convoluted enough for taxes to go up with relatively few people noticing. Who will get hit with these tax increases first? The middle class. And not just the people who make $250k and up.  The entire middle class will feel it as they see their refunds get smaller and smaller and they begin to owe.

Taxes have been going up already.  Republicans "raised" taxes in 2006 when they set the AGI limit on student loan interest deductions at $55000.  Expect more of these "changes" in the coming years.  I expect to see the most changes happen in the schedule A, or what I call, the poor man's schedule C.  I fully expect the mortgage interest deduction to go away (either directly or indirectly).  I expect more people to be hit with the AMT.  Some of Bush's tax cuts will go away (e.g.dividends and capital gains).

I fully expect both parties to raise taxes, but only on the most underrepresented demographic in the US, the middle class.  The rich and poor will remain untouched (at least into most of the middle class ends up poor.  God forbid that happens).

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#4) On April 27, 2010 at 1:37 PM, Melaschasm (55.51) wrote:

#3)  you make a compelling case that I have underestimated the chances of republicans voting for higher  taxes.

I disagree with your assement of the mortgage interest deduction.  I expect this to remain for most people, although the top limit might be reduced.  For some reason both parties seem to think they should use taxes and spending to push people to buy houses they can not afford.

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#5) On April 27, 2010 at 1:48 PM, outoffocus (23.09) wrote:

 I expect this to remain for most people, although the top limit might be reduced.

I think we are somewhat on the same page here.  What I meant by  mortgage interest deduction to go away (either directly or indirectly) is that they will make it so that either fewer people qualify for it (see medical expense deduction) or the deduction will be so small its no longer beneficial (see the rest of the schedule A deductions).  Remember in order for people to use the schedule A, their itemized deductions must be higher than the standard deduction.  Congress can change the law so that people are forced onto the standard deduction, thus "removing" the mortgage interest deduction without removing it.

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#6) On April 27, 2010 at 1:53 PM, USNHR (32.06) wrote:

#2) I'm not against tax increases, if they are used responsibly. However Medicare, medicaid, obama care and other social justice programs are not responsible spending in my opinion. If you want social justice, persue it through your church or the United way.

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#7) On April 27, 2010 at 3:44 PM, blake303 (29.25) wrote:

Ummm, Mr. President?  When was the last time that happened, exactly?

Iraq?  That turned out well. Frankly, you would be complaining if he said he was going to implement financial reform unilaterally because the anti-government CAPS lemmings are generous with their recs. 

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#8) On May 25, 2010 at 4:47 PM, MikeMark (29.42) wrote:

Jakila,

Loved your comment. Right on target!

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#9) On May 27, 2010 at 12:34 PM, Oldmangene (< 20) wrote:

Blake303

"anti-government CAPS lemmings are generous with their recs."

 

What is this?  Sarcasm?  We are headed for more than Iraq.  We have crazies in our own country.  So do we do away with police and let them have their way?  That would be good for the NRA folks.

 Real issue:  Get out of debt! Save!  Invest!   Save during good times and bad, there is always a rainny day comming!  These are good times compared with the 30's.  Dems/Repubs can either SAVE, or get OUT.  Those who like entitlements will always be with us!

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#10) On June 10, 2010 at 9:37 AM, glfor (73.18) wrote:

No,

The Big Three issues (problems) are:

Obama

Pelosi

Reid

Vote the bums OUT!!! Get rid of government employee entitlements. Get rid of government employees; period! Get rid of gov't sponsored corporations; Fannie, Freddie to name two. Give tax credits not tax increases. Enforce the laws, not "monitor the laws" (e.g. immigration, SEC, banking).

Most important, get rid of Obamacare. It will cost us Trillions and nobody gets care; only insurance.

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#11) On June 12, 2010 at 9:03 PM, gs8212 (< 20) wrote:

Quick fact - tax receipts for 70 years have been about 18% of GDP.  This is regardless of whether the incremental tax rate was 90% or the much lower level under the Reagan tax cuts.  

Want to raise Federal revenue?  Raise GDP.  How do you do that?  Not by continuing to spend more and more on ineffective programs and pretend the private sector can just print money to send to Washington.

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#12) On June 12, 2010 at 9:13 PM, gs8212 (< 20) wrote:

Full disclosure - I'm diehard republican/conservative.  But the republican party has become as much of the fiscal problem as the Dems.  Last time we had any hope of reeling in spending was under the Gingrich Congress but he got run out of town on a BS book deal "scandal."

 I;m losing hope that anyone in Congress cares about the fiscal condition of our country because it would take so much courage to bring the truth, you'd have to lie throughout your campaign to get elected, and then start off immediately trying to do something about it, without clout or connections, and hope you get something done before you are tossed out again by the electorate whose ox got gored.  

there is no mystery about what has to be done - there is simply a lack of courage in congress, and a general lack of knowledge among the electorate.

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