U.S. National Debt: Deficit Hypocrisy 19 comments
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There’s something scary about big numbers. It’s one reason we in the media often like to put the biggest number we can find into a headline.
So it was no surprise that most media outlets went gaga over the Obama administration’s projection that the nation’s debt will grow by $9 trillion over the next decade. And sure enough, critics of the administration’s efforts to reform healthcare were quick to seize on that scary number as another reason to advocate doing nothing.
But without wading into the muck of the current debate over healthcare reform, it’s worth taking stock of just how much hypocrisy there is when it comes to the subject of government spending and those big bad deficits.
Let’s start with the Republicans. They talk a good game about reining in federal spending, but they bear as much responsibility as the Democrats for the nation’s $11 trillion in total debt.
It’s sometimes hard to remember that when President Clinton left office in January 2001, the federal budget actually was in surplus. Yet by the time President Bush left town, the federal government was running a nearly a $1 trillion deficit thanks to spending on the wars on Iraq and Afghanistan, the bank bailout and increased spending on prescription drug coverage for Medicare beneficiaries.
But the Republican deficit hawks didn’t really start squawking about government spending until President Obama took office and proposed a $700 billion stimulus package for the ailing economy.
In reality, no political party can claim title to being prudent fiscal managers. All that talk about reducing the deficit often is just a wedge issue that gets used by politicians — both Republican and Democratic — to score points and torpedo legislative proposals they oppose.
So while I’m no proponent of profligate government spending, the current budget deficit shouldn’t be used as excuse to squelch a potentially worthy government program that could benefit generations of Americans.
A proposal like health care reform should be judged on its own merits and not shelved simply because government spending is currently out-of-whack largely because of a need to stave off the worst economic crisis since the Great Depression.
In considering something like health care, there’s a need to take a long-term view-not the just impact on the federal budgets for the next few years.
And don’t be fooled by conventional media wisdom that the average American is concerned about the deficit. Sure, in an abstract polling question most Americans will say big federal deficits are bad. But the truth is most Americans don’t mind government spending when it provides a useful service or puts money in their pockets. If that was the case, the cash-for-clunkers program wouldn’t have run out of money so soon.
The current financial crisis is in large part due to the fact that we’re a society that loves to live beyond its means. It’s the American way to buy more home than is necessary and run-up the credit card bill to pay for a family vacation.
Credit became way too easy during the run-up to the financial crisis, but credit isn’t going away. It’s simply taken a breather. That’s because everyone in the federal government and on Wall Street is rooting — almost urging — for Americans to start spending again.
For good or ill, credit and spending is the lifeblood of a consumer economy. Yet sadly, the only real solution policymakers have for ending the economic crisis is to encourage people to starting living off their plastic cards again.
And that’s why deficit spending by the federal government is probably here to stay for a long time. The government is only doing its part to help.
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"Dad, my republican brother got to overspend! I should get to, too."
The real health care reform needed, tort reform, will never happen b/c the trial lawyer lobby is too powerful. And yes, the deficit does need to be considered when our gov't never, ever, makes things better when they gain more control of anything. I would agree with you if they actually made reform suggestions that would work. You think Medicare is bad.....Can you imagine the fraud and waste involved with the hugely massive program that a national health service would be??
It points out that without medicare surpluses - which are no guarantee ion the future but which have saved us and will save us till boomers retire - even Clinton's surplus was actually a deficit.
It really highlights why healthcare reform is so critical,it makes me wonder exactly what are we going to do and who are we going to blame when the SHTF and the only thing we can fund is interest on our debt...
In NY metro area I checked to see where build america bonds are going it's all highways. Meanwhile suburban NYC is looking at outstripping its electrical supply within the decade and there are no plans even on drawing board to find the energy.
Why build america is going to roads and not real infrastructure improvements like the electrical grid, rail, and mass transit is beyond me...
You Democrat me Republican? ..Duh!..Is that how it is? Get a life!..the so called two party system is nothing but a scam, taught to high school kids.
There is only one party ('an they are "partying" on our tab) Observe how smooth the transition has been from Bush (the warmonger) to Obama, (the kind and sweet gentle guy) who says "Yes..we can!..Can what?... The sentence is never completed..'cause it's just PR for the politically inept pie in the sky crowd ) he has managed in his short tenure to extend war into two additional countries Pakistan & Columbia. Not bad, for a guy who wrote a book, made little contributions as a Jr. senator..but, was sent up from "central casting" to match the changing demographics in america but with the same script ...A Bush ..."light"....more acceptable one..to some.
But, the beat goes on, bomb our enemys further into the stone age than they already are, while trying to help suffering america. Will the real Obama, please stand up..the warmonger or sensitive and helpful savior,..who by the way will have to bankrupt america in order to accomplish his goals.
gato
No....unsustainable systems tend to stop running. We already have two stacks under water and three propellers in the air.
Our representatives are like that certain deadbeat relative that's always sticking you with the check. It's time for them to pay for the lobster and steak they keep ordering. Let the Congressmen and Senators personally make good on the deficits; let the credit card borrowers pay off their own purchases; and let the banks, auto companies, and insurance companies stand or fall based on their own poor decisions.
Unlike President Truman who said that "The Buck Stops Here," President Obama believes that while the buck starts in our pockets it doesn't stop at the White House - it keeps going to all of his pet projects. I would love to see the buck stop anywhere nowadays - that would be change I can believe in.
It is so grossly inefficient that it is entirely possible to provide health care for the entire population instead of just part of it, and save a substantial percentage of GDP.
To those who complain that this would mean nationalisation, the best alternative is not the British National Health service, but the Swiss or French system, which are private but those who can't pay get their dues paid for them, whilst still going private.
They still cost far less than the American system.
The issue then has nothing to do with the deficit.
The real problem is that Obama is totally unwilling to confront any interest group, and they don't come bigger than the ludicrously inefficient American healthcare system.
This system is also a primary cause of the uncompetitiveness of American companies, as they must bear huge healthcare costs.
Until people in the US fully realise just how bad much of their systems have become, from a larcenous banking industry to a captured legislature and grossly over-rewarded executives, then meaningful reform is not possible.
Unfortunately the public at large is far less informed than many readers of this forum
There are a lot of clunkers still on the road, perhaps because their owners knew they couldn't afford to take on new debt, even at a lower value. Those are the ones I trust. The clunker program may have benefited people more if it was just a purchase program rather than a trade. Give the people that money, and they would have brought in ALL the old clunkers. Then let them decide what they wanted to spend the money on. They may have decided to pay their past due taxes with it...
On Aug 27 12:52 AM Dave Wrixon wrote:
> You have to laugh when the Cash for Clunkers program ends up supporting
> the Japanese Car industry more than the US car industry. No wonder
> they pulled the plug on that!
The fact remains though that it costs vastly less than the US spends on healthcare, and the poor are far better of on it than in the US - I have no doubt that many US physicians and nurses are generous with their time, but the folk who queued all night for free health care when it was briefly on offer did not do it for fun.
For the better off you can take out private insurance in the UK to supplement the NHS,a nd still be paying far less than in the States.
Just the same, comparisons between the US and UK systems are pretty beside the point, as both the French and Swiss systems are far better, provide universal care, cost much less than in the States, and use private medicine in a way far more compatible with US traditions.
Discussion of the UK system has been introduced as a diversionary tactic from the manifestly bloated and disfunctional US healthcare system.
Whatever may be the shortcomings of the NHS, the US in spite of spending much more of it's income on healthcare is falling down the table for longevity, and to the extent that that is due to poor healthcare perhaps demonstrates the limits of relying on private charity by doctors and nurses to meet the needs of millions of uninsured people.
en.wikipedia.org/wiki/...
Note the proud position of the US immediately above Albania!
The UK comes in ten places ahead of the US at no 25, whilst France is at number 7, with female life expectancy a staggering 4 years greater than in the US.
This is a very poor argument based on incorrect and incomplete facts supposedly to justify your desires that the Democratic administration and its followers should be allowed to be hypocritical deficit spenders. Color me completely unimpressed.
"Let’s start with the Republicans. They talk a good game about reining in federal spending, but they bear as much responsibility as the Democrats for the nation’s $11 trillion in total debt."
This is true if one chooses to look only at the debt levels at the end of a respective administration. W inherited a debt of @ $5.5T and boosted it to @ $11T. So, at a cursory glance, this is true. I wonder if any of W's deficit spending was on programs passed by Democrats in years or decades prior?
"It’s sometimes hard to remember that when President Clinton left office in January 2001, the federal budget actually was in surplus."
A typical Democratic argument, which is illustrative of the hypocrisy. So, debts are bad; Clinton was better than any Republican because he "balanced" the budget and paid down the "public debt"; now I'm gonna abandon that argument in favor of increased deficit spending and debts. First of all, dig a little deeper. For example, if your article was entitled "Why did the national debt increase every single year under Clinton when he said he balanced the budget?" it might provide for better reading. Look it up, then try to convince yourself that it's true. It is not true, it involves political double speak and some legal mumbo jumbo about public debt vs intragovernmental debt, "off-budget" spending, extra spending through appropriations, changing where the SSTF excesses were placed, and a huge unsustainable bubble in technology stocks where companies like IceForEskimos.com reached market caps rivaling GE, despite the fact that many never turned one cent in profits.
"Yet by the time President Bush left town, the federal government was running a nearly a $1 trillion deficit thanks to spending on the wars on Iraq and Afghanistan, the bank bailout and increased spending on prescription drug coverage for Medicare beneficiaries."
Be honest here. W had the largest deficit in the history of civilization
at what, about $489B two years ago. Remember, $169B of this was for the $300 and $600 checks the Treasury mailed us to be "good little consumers". The deficit was on track to be substantially lower than that, even including the wars and Medicare changes. The only thing that escalated it to these levels were the bailouts. Funny you blame Bush for the bailout here; and then in the next sentence you give credit to Obama. You are aware that per Obama's laughably entitled "New Era of Responsibility" he lays out his ten year budget plan with the ends of the wars, a reduction in military spending, and a return to Clinton-era growth levels; and still projects that every one of his deficits would be larger than Bush's largest. Who thinks we're gonna return to those GDP and revenue levels anytime soon?
"But the Republican deficit hawks didn’t really start squawking about government spending until President Obama took office and proposed a $700 billion stimulus package for the ailing economy."
Actually, the Republican deficit hawks-- purely motivated by self interests, not fiscal responsibility-- openly opposed the bailouts as soon as W and Paulson proposed them. I have video of the likes of Bush, McCain, Pelosi, Reid and Frank pleading with the House Repubs not to oppose Bush's bailout plan. They did anyway, to the tune of over 80% voting "No".
"In reality, no political party can claim title to being prudent fiscal managers. All that talk about reducing the deficit often is just a wedge issue that gets used by politicians — both Republican and Democratic — to score points and torpedo legislative proposals they oppose."
This statement is true. I agree completely. This does not mean we should abandon fiscal responsibility; just that both parties have abandoned it. I think we should abandon them BOTH. You take the [myusername] in a "when in Rome" type approach. Deplorable!
"So while I’m no proponent of profligate government spending, the current budget deficit shouldn’t be used as excuse to squelch a potentially worthy government program that could benefit generations of Americans."
Profligate government spending is exactly what you're a proponent of. That's what this entire article is about. "Generations of Americans?" I have my doubts that our foreign creditors feel the need to fund another program of a bankrupt government that "benefits" "generations" of citizens that aren't even theirs. I'm sure their taxpayers feel the same way. Actually, our creditors have succinctly stated that they won't, and are now taking steps to get themselves out of this predicament where they feel like they have to loan us money so we can buy their stuff, thereby giving them jobs. Where oh where will China find 100M consumers?
"A proposal like health care reform should be judged on its own merits and not shelved simply because government spending is currently out-of-whack largely because of a need to stave off the worst economic crisis since the Great Depression."
True, any proposal should be judged on its own merits. The financial side of that should be considered to. The financial side makes it a lose-lose proposition. Those of you advocating a French, or similar style, would be advised to look at just how bad the finances are for the French system.
Z is govt healthcare spending. Z = WXY, where W is the number of citizens receiving govt healthcare, X is the units of healthcare one citizen requires and Y is the cost of one unit of healthcare. If the cost, Z, is the problem-- that is, it's too high-- how does proposed legislation remedy this situation. (HINT: The fact that the proposal costs more money should be an indication that this does exactly the opposite of what all the politicians say needs to be accomplished.)
Are we decreasing W? No, the plan is to add millions to this number. Are we decreasing X? According to the deliverers, "No", there will be no rationing. Are we decreasing Y? No. There are no true market reforms or tort reforms or any such thing, hence the added costs. Of course, like France and other European models, we will inevitably find costs continually spiraling out of control and the age old discussion of rationing vs wage and price controls will appear.
Also, consider our high rates of obesity, sloth, smoking, drinking, drug use as evidence of the poor health of Americans; not as evidence of the superiority of another health system. After all, in order to pay for their "free" healthcare, the prices are so much higher on many of the things that we love (and they would love) that they cannot afford to indulge in those things (which are bad for them). Tell the people here that they can have their "free" healthcare; but a Big Mac is going to cost about $6. In order to save $130, you are going spend twice that as the costs of goods and services increase. Leaving you less money for discretionary spending, which is the lifeblood of your consumer economy, which leads to less revenues and even higher deficits.
"In considering something like health care, there’s a need to take a long-term view-not the just impact on the federal budgets for the next few years."
In 1967 the Dems gave us Medicare, calling its opponents racists, hypocrits, fact-averse, ignorant and fear-mongers for suggesting that the costs could spiral out of control. They stated that in 1990, the costs of Medicare would not $12B, despite the wacko claims of the fiscally responsible that it might run double or triple their estimates. In 1990 $110B was spent on Medicare-- 2 or 3 times higher than the estimates that we were told were completely untrue. Never so much as an "oops, our bad" or a "we forgot to carry the one". The CBO states that HR3200 will see a budget SHORTFALL of twice the total costs of proposed legislation, even if the economy becomes as rosy as the administration hopes, adding that the likely costs will be 2 to 3 times higher than these estimates in less than 20 years unless the bubble economy returns.
"And don’t be fooled by conventional media wisdom that the average American is concerned about the deficit. Sure, in an abstract polling question most Americans will say big federal deficits are bad. But the truth is most Americans don’t mind government spending when it provides a useful service or puts money in their pockets. If that was the case, the cash-for-clunkers program wouldn’t have run out of money so soon."
True, the average American is too preoccupied with his chicken tenders and iPod and doesn't think about economics too much; but our current and upcoming predicaments are changing that somewhat. Actually, I would say the arbitrary line in the sand is between those that pay taxes and those that receive the redistribution of income. If I'm a taxpayer and receive a $4500 rebate from the government, it and the compounded interest must be paid by that same taxpayer. Just like Hazlitt said-- you can't see the forest for the trees; and you can't see the hangover coming later for the partying you're doing now.
"The current financial crisis is in large part due to the fact that we’re a society that loves to live beyond its means. It’s the American way to buy more home than is necessary and run-up the credit card bill to pay for a family vacation."
True. This is bad. Why are you advocating this?
"Credit became way too easy during the run-up to the financial crisis, but credit isn’t going away. It’s simply taken a breather. That’s because everyone in the federal government and on Wall Street is rooting — almost urging — for Americans to start spending again."
You forget that our credit is someone else's saved capital. When you don't pay back the credit lent to you, don't expect to keep getting more credit. That's why we're printing money to buy our own IOU's, because no one will lend us all the money we "require".
"For good or ill, credit and spending is the lifeblood of a consumer economy. Yet sadly, the only real solution policymakers have for ending the economic crisis is to encourage people to starting living off their plastic cards again."
The consumer economy is the addiction, and credit and spending are the drugs. That's like saying stabbing yourself is bad; but I'm gonna do it anyway-- now please give me another knife.
"And that’s why deficit spending by the federal government is probably here to stay for a long time. The government is only doing its part to help."
Deficit spending by the government is no help, no panacea-- just a short-term sugar rush with deleterious consequences in the long run. Unless you purchase Treasuries, you get no say in deficit spending.
I would suggest that you save this vitriolic drivel for the Huffington Post; but I don't believe nonsense such as this should be fed to those that do not truly understand its effects.
Winston Churchill once said "The best evidence against Democracy is a two minute conversation with a voter." Was he talking about you?
'True, any proposal should be judged on its own merits. The financial side of that should be considered to. The financial side makes it a lose-lose proposition. Those of you advocating a French, or similar style, would be advised to look at just how bad the finances are for the French system. '
Based on what figures?
Here are the comparisons:
itsyourtimes.com/?q=no...
'84.1% are satisfied with the French health care system.
French male life expectancy is 81 years.
99% of the citizens of France are covered by universal health care.
Payroll tax of 12.8% paid for by employers, employees pay 0.75% in taxes for health care.
Less than 33% of the French people believe some change is needed.
The French have 1 doctor per 294 people. That is 3.4 doctors per 1,000 people.
French universal health care is 11% of French GDP.'
In comparison the US:
'The U.S. government pays for 45% of health care costs in the US. That is far les than ANY OTHER nation in the developed world and is equivalent to what Mexico spends. The industrialized world government average contribution to health care is 72%.
Private insurance accounts for 37% of all health care in the US. That is FAR MORE than any other nation. The US, Canada and France are the only nations where private insurance accounts for more than 10% of GDP spending on health care.
Since 1980 US health care in respect to GDP has risen more than 7% (from 9% of GDP to 16% of GDP), compared to an average 2.3% (from 7.7% of GDP to 10% of GDP) rise in respect to GDP in ALL OTHER industrialized nations.
The United States IS THE ONLY nation in the industrialized world that DOES NOT guarantee health care for its citizens.
How many doctors? In the U.S., the average number of doctors is 1 doctor per 416 patients.
In other developed nations the average is 1 doctor per 323 patients.
What is the greatest driver of health care costs? Medical technology upgrades is the greatest cost driver. Pharmaceuticals are the second greatest driver of increasing health care costs. Pharmaceutical costs an average of 17% of total health care costs, the HIGHEST in the industrialized world.
Health Care FRAUD (double billing, erroneous charges, non-existent procedures) is responsible for nearly $200 BILLION of health care cost EACH YEAR. FRAUD DOES NOT include excessive prices charged for common items like aspirin (at $5 per pill or Lipitor at $30 per pill).
What is the percentage of health care costs to GDP? The U.S. spends fully 16% of GDP on health care costs. The average cost per person is $7,290 per year. There are 2.3 doctors per 1,000 people in the US. On average there are 3.7 doctors per 1000 people in other industrialized nations. There are 7.9 nurses per 1000 people in the United States. The average in other industrialized nations is 8.2 nurses per 1,000 people.
There are 2.8 hospital beds per 1,000 people in the United States (In 1980 there were 4.4 beds per 1,000 people in the United States) There are an average of 4.1 beds per 1,000 people in the other industrialized nations.
Other nations spend less on health care. Denmark spends 9.8% of GDP on health care. Germany spends 10% of GDP. Canada spends 10% of GDP. Great Britain spends 8.4% of GDP. France spends 11% of GDP on Health care.
THE GREATEST LIE is that the United States has the “best health care in the world.” The United States ranks somewhere between 16th and 24th in the world for excellence in health care. The United States has a HIGHER infant mortality rate than almost ALL OTHER industrialized nations and has LOWER life expectancy than ALMOST ALL other industrialized nations. The United States has LONGER wait times for most procedures and treatments than the other industrialized nations. (There are NO waiting lines or rationed health care in the other industrialized nations except Great Britain)'
This is not a description of a successful system.
A real reform of the US system could result in both better care for ALL it's people, AND very large cost savings.
The pity is that Obama avoids taking on the vested interests which would make real reform possible.
As for the Republican/Democrat thing, most of us outside the US really can't see much difference, as they both seem pretty well captured by the same interests, notably the banks and health care industry.
All the deficits hawks who were Bush supporters in '04 need to take a LONG look in the mirror and ask themselves where their fiscal outrage was then.
Ron Paul's '08 GOP bid was all about fiscal conservatism (unlike McCain, who didn't find religion on the issue until it was clear he was going to lose), yet he was getting single-digit percentages in most of the primaries.
Yes, Obama is running up mind-boggling deficits. But that's what has always happened in modern D.C., except for the later Clinton years. ALWAYS. ONLY ONE EXCEPTION, AND IT WAS DURING A DEMOCRATIC ADMINISTRATION.
Thus we can conclude: the sudden concern for fiscal responsibility from the GOP is pure unadulterated hypocrisy.