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Rex Nutting's column asserting "Obama's spending binge never happened" has created a buzz in...
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Saturday, May 26, 2012, 10:15 AM ETRex Nutting's column asserting "Obama's spending binge never happened" has created a buzz in some high places, and it's true that the president's spending levels are little changed from FY2009, the last Bush budget. But that was a TARP-inflated one-off, and Obama must take the blame for choosing not to reverse that elevated level of spending... or for not spending enough.
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This news story has 66 comments:
Which begs the question, SA editors, are you feeling OK??? :)
However, it is extremely ignorant to discuss spending without also discussing income/taxation (near record lows), the cost of debt (near record lows), and the VALUE obtained for spending (which is often subjective yet seldom debated).
Regardless, the above articles, as well as this comment thread, should make for some entertaining weekend reading. :)
Another issue is that the tax code is so complicated that it does not engender trust either and the working class is getting hit with AMT which is the biggest "gotcha" kick in the teeth and breeds cynicism.
The only way I believe we can get our government back under control is to downsize it. They play one interest group off against another to maintain their power all the while taking more from the economy. The suckers are the people and especially the working class and future generations that are having a debt load dropped on them along with inflation.
It is debatable if our fiscal condition is already too far gone as our debt and obligations appear to be 2X our GDP and 1X is a trigger point for serious problems but certainly it will not get any better on the current trajectory. And as pointed our already our cost of debt is unbelievably low right now for unsustainable reasons.
The most important observation I can make is that it is critical for large government to maintain its power by obfuscating the real issues and pitting people against each other. Ideally if issues are laid out clearly with balance most people will come to similair conclusions but that does not create a power base for politicians and that is their primary objective.
> they are not willing to pay more taxes while the government
> continues to spend at record levels. They don't trust the extra
> taxes will do anything but add more fuel to the fire.
Is there some poll that shows this? I think you're blatantly making that up. :)
I think that sentiment might come from the investment class, who just want their taxes to go even lower, not the working class who are not in denial about public services requiring public funding.
http://n.pr/LxHioD
And you are crazy if you think working class people are ready and waiting to pay more taxes. I rarely ever hear that sentiment from them and I am around them a lot in many different states. They always think it is someone else who should pay. Bush and Mondale both lost presidential races on raising taxes. That is a lot of people voting against taxes.
IMO people would grudgingly pay more taxes if the government was not out of control. But right now it is good money after bad.
> And you are crazy if you think working class people are ready and
> waiting to pay more taxes.
I don't, and nor are there any proposals on the table for "working class people" to pay more taxes. In fact, I believe most middle class taxes have gone down slightly in the last few years; we will have to wait and see whether or not those cuts will remain in place.
Sure, no one "wants" to pay more taxes, or any taxes at all, really, but most people, working people, realize the common sense of paying for public services that add value. (The two recent wars, most would agree, have /not/ added value.)
A few of the more outspoken wealthy seem to think they shouldn't have to pay for any it, even though they disproportionately benefit from most of it through their businesses.
The "average" man/women finds themselves working 50-60-70 hours a week..... the bureaucrat down the street "works" 35-40 hours on flex-time.
The "average" man/women scrimps and saves and finds additional ways to earn money to make ends meet and provide for their families. The bureaucrat simply gets the next step raise and vacations in the Bahamas.
The "average" man/women goes to the doctor only when needed and factors in the cost when making that decision. The bureaucrat goes anytime Johnny has a runny nose.
The Government is now the enemy of the average man/woman. The triumvirate of the bureaucrats, Politicians, and financial elite have effective seized power and are fiscally ruining the country while enriching themselves.
Their time will come.
Not really. My federal taxes have remained about the same over the past 20 years, percentage of income wise.
However, during that same time my state taxes have doubled, and my sales taxes have gone up 2.5x. I seldom fly because of all the hassle anymore, but things like airport fees have gone up close to 900% since 1990. When I got my first passport in 1976, it cost $8 - now it is close to $200 (I am actually in favor of charging what things cost to process, but it is still one of thousands of fees and charges that have gone up).
There are lies and obfuscations on both sides - for example SS is often called an entitlement by the right, but it really is not. It is (in theory) self supporting. Many of the Medicare plans, such as the prescription drug program however are in fact unpaid for entitlements.
A little truth on both sides would be welcome, but that ain't gonna happen.
I don't agree with a lot of what we have spent on wars either but that is not driving the debt to a material extent. We need to cut military but that is not going to do the trick so calling it out continously distracts from addressing the lumbering elephants in the room.
Working class people will have to pay more taxes or suffer serious inflation which is a hidden tax if we are ever going to get our debt down. The fact that nothing is on the table speaks to the fact nobody is serious and that politicans just want to get elected. The election machine is connected to government transfer payments and telling the majority of the people that they don't have to pay any more taxes. The government needs to be downsized and everyone needs to pay more.
If you can give the long list of the "outspoken wealthy" that think they don't have to pay more then I would like to see it. WB is the most vocal and the Dems love to trot him out as a higher tax proponent even though he sheltered most of his money from taxes. Should they pay more? Yes but it cannot be ridiculous sums that discourage them from working or make them change their behavior where they move or remove capital from the system. For example if I am taxed at 80% on investments then I will not make investments in the US.
It is fair to say the discourse is completely corrupted by the players but the numbers are objective and they are saying government is too big and needs to come down and people are going to have make up for the drunken spending either through inflation or taxes. Nobody is going to escape the impact of high government spending and the sooner everyone realizes this reality the quicker we can start to pull together solutions.
in the words of Robert DeNiro............."you talking to me"
To those who say they haven't received a federal income tax break, perhaps you're in a much higher tax bracket then I am. I've had two in past couple years. (Each time I've noticed the increase in my check I yell "Thank you President Obama" to which the bookkeeper rolls her eyes, cynical NJ native that she is!!) I suppose this sounds silly to all you high rollers out there, but to me a little goes a long way, and I do appreciate it. It's the damn health insurance companies hurting small businesses. Raising premiums nearly 10% annually preventing increases in salaries while struggling out of the recession. This is what really irks me more than anything. I only hope the President is re-elected, and pushes through a Public Option! Don't get me started.
Obama has done nothing but screw up healthcare because he is so incompetent and knows so little about the economy it is scary but many people just cannot see the emperor wears no clothes. I finally have come to the conclusion that he is a smooth talking huckster and an idiot. Point all the fingers you want 360 degrees but he is they guy who is glibly incompetent and people mistake that glibness for well placed confidence. Everyone deserves better but on second thought maybe we don't. We elected this idiot.
Have a great week!!! More moronic things to come along with broken promises and bad news.
At work so writing fast. You need to be specific.
Warren Buffett made his fortune from investing. Since it’s a global economy how is it he owes the U.S. anything besides the usual taxes, which he’s all for paying more, and his desire for the wealthy to pay more is acknowledging that we here need a fair shake, not handouts! You judge him when he’s giving his fortune away after death? So you think he’s all about “foreigners fawning over them as they trot around with their billions”? Boy, you don’t know anything about Warren Buffett, who still lives in the same town, and low key lifestyle he always has. Bill Gates also. He and his wife do plenty for education in the U.S.A. So which of the uber-rich do you respect? Koch Brothers? Sheldon Adelson? Mittens Romney? Oh yeah, now those guys are caring.
Bet you hated former President Jimmy Carter for his helping those in Africa suffering from “river blindness.”
Curious what you would do for the “needy” if you were in Warren Buffett’s shoes?
As for healthcare, I disagree with you wholeheartedly and believe you are being unfair. I think President Obama made a good faith attempt to keep his promise to reform healthcare (the largest budget drain we have), but those who shouted the loudest about "death panels" and all the other misrepresentations freaked out the country so he had no choice but to bargain with insurance companies and pharmas to get at least a smidgen of what he wanted. I was very disappointed, but understood he used up his valuable political capital on this issue, because he deeply cared about it and keeping his promise to us. Perhaps such an unimaginable idea: a president wanting to keep his promise -- that you can only see it as insincere.
Overall, you sound like a bitterly angry man. You’d better mellow out – don’t want to end up like Andrew Breitbart!
I am not bitter but I know a lot about WB and BG beyond just the BIO's and books and general press and have plenty of education in income tax accounting so let's go beyond the headlines and it might make you a little more cynical and not just another wide eyed groupie going with the flow.
They have not done anything illegal but they have built their fortunes in the US primarily and are now only riding the global economy to expand their fortunes. Meanwhile they both have protected their assets from taxation by leaving them for global charitable work primarily outside the US and then in WB's case have the nerve to tell everyone else to pay more taxes with the full knowledge that does not include them. Gates lives in the state of WA which has no state tax and has saved himself a few billion in the process.
If Buffet and Gates want to show some real investment then address child poverty and abuse in the US. Go down to the inner city in Chicago, NY, Philadelphia, Miami and look at the conditions in those homes and see first hand how those children have very little chance of being successful. And create jobs in those inner cities so they can pay their own bills and have a future. WB and BG direct massive amounts of capital around the world and they have done nothing material in our inner cities and nothing really innovative.
The fact is it is much more glamorous for many of our high profile people to fly to foreign lands and try to get your name known internationally as the savior of the world when kids living within the same country don't have a real opportunity to escape dysfunctional homes and pathetic school systems. You can also fly home back to the US and not have to get your hands dirty with too much hands on work.
Jimmy Carter invests himself and is sincere. The worst that can be said about JC is that he might make a mistake but one can never doubt he cares and is committed. Don't you wonder why a lot of rich people don't get behind JC? He is right down in the muck and mire and would be great to work with. IMO it is not glamorous enough and it is too dirty which is why I find these rich globe-trotting, tax avoiding, headline-seeking billionaires disgusting. Even the Godfather was donating to the Catholic Church by the end of his life. It is a very well known behavior. Total acceptance of this type of behavior is just stupid. They can do it but I am not naive about the motives.
Obama just does not understand the issues to the depth necessary to make these kinds of changes. His depth is questionable, his cabinet is weak and his strategies are non-existent. Health care has its problems to be sure but how that is prioritized and changed really reflects the experience and the wisdom of the leader. The verdict unfortunately is coming in and he looks really inexperienced and unsophisticated in what he has been doing. This is a waste of 4 years.
I say cut military in half and I am sure I am more conservative than you. You are too hung up on stereotypical political labels and need to look at the truth. Obama spends like Bush or Bush like Obama so not sure what is the real difference. Obama has ordered more drone strikes than any president before him. So what to conclude now?
The military complex is not the issue it is the American public falling for the left versus right paradigm as defining us as a country. That needs to be broken.
The "frugal" President Obama -- the "tough on terror" President Obama -- not working for the typical GOP challengers. What's a party to do to gain back power? Not pushing back on “birthers” a strategy that is working -- 38% Republicans believe Pres. Obama is foreign born and/or a Muslim (pork eating, liquor drinking, gay supporting Muslim!! LOL) --Romney/Trump! ;-)
With that logic I am going out right now to buy a Ferrari. I am sure by the end of the day I will have more money.
>
> With that logic I am going out right now to buy a Ferrari. I am
> sure by the end of the day I will have more money.
This is indeed the key. More precisely, you have to spend money WISELY to make money.
Much of our spending is arguably wasted: defense/wars, tax cuts for the wealthy, some types of welfare, etc.
When it could be an INVESTMENT: education, infrastructure, reform, and so on.
I don't mind significant spending if that spending 1) is not overly leveraged via debt and 2) efficiently creates VALUE for the country.
pork eating, liquor drinking, gay supporting Muslim!
No he is not Muslim. Why you have it in your head
India spend much less on education and gets much better results. They are kicking our tail right now.
> results. They are kicking our tail right now.
To digress a bit, this is very much a cultural issue, and is difficult to address via spending or not spending.
Also, India only educations a small portion of their population compared to the U.S., and has other issues:
- 25% of its population is still illiterate
- only 15% of Indian students reach high school
- just 7%, of the 15% who make it to high school, graduate.
- India's colleges offer seats for only 7% of the college-age population
- 25% of teaching positions nationwide are vacant
- 57% of college professors lack either a master's or PhD degree
(http://bit.ly/JLP5yA)
The Indian students who kick butt on test scores are a small minority -- not unlike the U.S.
So the average American is probably much more educated than the average Indian, but it's also fair to say that the average American high school graduate is far less educated than the average Indian high school graduate.
As with most things in America, we know how to do Education well -- America's top high schools and colleges are among the top in the world -- but we don't know how to do it cheaply or in a scalable fashion. And it seems India is having similar problems.
Some estimates, such as CAGW put the waste at close to 35% and the actual ROI even worse, and even the most spendthrift will admit that it is at least 5-10%.
You are correct it is cultural. The believe in education and put huge effort into it regardless of investment size. It is a value for them. Until we change that mindset pouring more money into the schools is going to have limited results. So if we put $1 in and get back $.10 then it is time to work on the cultural issue first which is not about money it is about changing minds and that needs leadership.
> border with Mexico and compare that to similair people in India
> they still kick us.
I still call apples-and-oranges on that one.
If you're literally only educating 1% of your population through high school (i.e., India), of course your scores will be higher, because you only get the most capable, driven students in the first place.
When you educate ~85% of your population through high school, there is bound to be some inefficiencies in the scaling that bring the averages down.
I'm not saying we don't need to do better (much, much better), but I am saying that it's not fair to pretend it's so easy by looking at a country like India.
Context matters. :)
I think the same could be said of the U.S. :)
America's best and brightest can easily compete with the best and brightest of anywhere else in the world.
Where we struggle is scaling that success to the next 10%, or the next 50%. China and India have similar problems in this regard. Germany, Sweden, Finland, etc -- you know, those failed socialist nations -- do much better on scalability.
I agree with your most recent statement but that is not what you said in your prior statement. I would go further and say our top 1% might be the best in the world and there are environmental factors that play into that.
She wrote that Pres
"pork eating, liquor drinking, gay supporting Muslim!"
if you disagree with her why you are replying to me
I think 90% of the public knows the second Bush administration was a disaster. We know that the economy was a wreck when Obama came into office.
So tell me what you've done?
1. 800 Billion spending giveaway to political cronies. 800 Billion and what do we have to show for it? For 800 Billion we could have built 5 Nuclear Power plants, a new electric grid for half the country, and natural gas infrastructure to allow for vehicles to have NG readily available. AND we'd still have some money left for R&D into all the GREEN stuff that folks keep dreaming about.
Instead we got - tax cuts for the folks that still had jobs, 100's of Billions for public unions, and the repaving of some roads.
2. Deficit Spending - DC seems to now think Trillion dollar deficits are the standard norm. Our debt as a percentage of GDP has basically doubled. Not a single reform to SS, Medicare/Medicaid, or Defense spending. NONE, ZILCH, NADA..... simply COWARDLY.
3. Freedoms continue to shrink. More and more regulation, Bureaucrats openly hostile to those they supposedly "serve".
4. Health Care - President openly campaigned on single payer and he gave that away.... and now we will have basically the same system only its going to be run by bureaucrats.
5. National spirit - I don't know about anyone else, but I've grown way tired of being lectured to by our president. The most obvious things that are wrong aren't fixed - they are "used". Carried Interest - its wrong for men shuffling papers to pay 15%. WHY ISN"T IT FIXED?? You've had 3-1/2 years Mr President.
Our government is simply disgusting. Fire the bureaucrats by the 10's of thousand. Get rid of entire agencies. Gut the regulatory structure and focus on the environment - all the rest of the stupid paperwork BS goes. Get our troops out of the 100's of countries they are currently in. Buy fewer weapons - keep developing but buy less. And stop telling people that the government is there to take care of them - we don't need programs for the "middle class" - the middle class can take care of themselves!!!!
Plenty of blame to go around. :)
That said, there is also a different between something being someone's "fault" and something being someone's "problem". It is sheer ignorance to think our economic woes are Obama's "fault" -- however they most certainly are his "problem" (to solve), and have been since he took office.
Where is the president going on TV to address the nation to force the Senate to pass a budget????
Where is the president sending a balanced budget (or at least something close) to the Congress for debate?????
Where is the president Vetoing legislation that contains hundreds of add-ons that don't belong in the legislation - and then going on TV to educate the people as to how this type of thing can't continue???
Where is the president telling people the TRUTH. We can't continue all the programs we have. We have to scrimp and save, and we have to cut large numbers and amounts of programs. Otherwise our children and grandchildren will face a much lesser future.
WHERE IS HE??????
Sorry, he's had his chance. Turns out voting present doesn't really cut it in the White House.
You're delusional. In today's environment where hundreds of fillibusters are used every term, one typically needs 60 votes in the senate to pass anything meaningful. And the president doesn't have a cohesive political party behind him, all he has is the Democrats. :)
> Where is the president going on TV to address the nation to
> force the Senate to pass a budget????
Don't you people always say he goes on TV too much already? Make up your minds.
> Where is the president sending a balanced budget (or at
> least something close) to the Congress for debate?????
Balanced budgets are difficult in recessions...
> Where is the president telling people the TRUTH.
The "TRUTH" would get him crucified in the next election, by your people. Only campaign finance reform would help in this, and that would also get him crucified in the next election, also by your people.
Remember, this is America. You don't get to vote for someone you like, you get to vote against someone you dislike more.
I'd like you to describe how Romney and his "don't tax and spend anyway" conservatives would do any better than Obama and those pesky "tax and spend" liberals?
And lets be clear - answers like "you folks say he's on tv too much already" are exactly the problem. YOU know the answer and instead of admitting the truth you spew crap.
He's on TV lecturing, trying to look "cool", doing lots of things we don't need our president doing. A prime time address holding Democrats in the Senate responsible for meeting their constitutional duties is nothing like what he does currently.
Balanced budgets are difficult....... Boy oh, boy - its difficult Dad to mow all the grass this week because it rained a lot. That got real far when I was 10 years old. The guy is simply not up to the job.
Its difficult? Its the President of the United States for crying out loud. Go back to Easy and community organize or something.
Everyone points to their favortie prez in past history and says "see how good he did!!". But the fact is, presidents seldom have much control over the economy, that is more congress' job (which they have utterly failed at, of course). But instead of pointing at one single fact - usually with Reagan or Clinton - instead look at what else has changed since then.
Hundreds of thousands of new regulations (nearly all aimed at the "last war"), a gridlocked government now for almost a decade, and an education system that seems to be falling further behind despite record spending.
> much larger percentage of GDP just in interest payments on
> the massive debt.
Correct me if I'm wrong, but treasuries are fixed-rate (for now: http://on.wsj.com/JErO8e), so anything borrowed at low rates stays at low rates. Specifically, the interest on current debt remains unchanged as rates rise, but certainly we need to stop borrowing *more* when rates go up.
Just like a business, borrowing when rates are low (like now) can be a good thing -- within reason. Borrowing when rates are high (like in the 80s), is less of a good thing. :)
Regardless, yes, debt must go down or we will be Japan.
> presidents seldom have much control over the economy, that
> is more congress' job
True, but that doesn't make for good campaigning for presidential challengers and their supporters. :)
Maybe when people see the actual results of huge bureaucracies, overpaid bureaucrats, and massive corruption they'll decide its time for a different path in the US.
Add to that the fact that much of the current borrowing is short term - 2, 5, 10 years, and it could get ugly real fast.
It doesn't matter how low the rate is or remains, as long as we continue to add debt we continue to increase the amount of interest paid and to be paid. We're not paying off the debt as it comes due, just rolling it over.
Spending under Obama remains relatively constant.
Spending as a % of GDP increased 4 percentage points under Obama.
Remember that spending under Bush was driven by two wars and low taxes.yes?
Remember that since the Dems lost both houses of Congress nothing was done.
Remember that the GOP does not want to increase taxes at all, because they all signed a "pledge". Not even 10% for every 1.00 of spending cuts. Remember ? It is reasonable?
Did government become big only during the last 3 years under Obama? And before it was not? Did the bureaucracy increased only in the last 3 years?
Why is it so difficult to cut spending and increase taxes ( not extend the tax cuts of the Bush years). Where are the pay- fors for the Bush wars? If they did not exist then, should not we pay for them now ( not extending the previous tax cuts)?
Obama made a mistake by not accepting the Simpson-Bowles suggestion. The radicalization of politics now makes it more difficult. But that seems to be the only rational approach.
What the GOP wants from the government is equivalent to a CEO of an indebteded company to cut expenses, and do that only. But not ALL expenses: just salaries of the employees. And then, he finds out years later, that he cut people and salaries to the bone, so much that he does not have the manpower and ability to grow the business when the market returns. All the experience of laid- off workers is lost and now his company cannot grow.
A more responsible action is to cut expenses, absolutely. But with care and judiciousness. But also he will need to invest in plant and equipment ( I.e. education, infra-structure, etc) in order to enable the company to grow , generate more sales , generate cash flow and pay off the large indebtedness created before.
So, it is a balanced approach. Cut expenses and grow sales ( I.e. revenues - I.e. taxes, from a government point of view) Taxes, means: equitable tax rates, less loop holes,
To sum it: rational, balanced. Work on both sides of the equation: expenses and revenues.
This guy can assert "no spending" all he wants, question is, how would he really know since no budget bill has been passed since then?
And at the end of the day, what's $4T between debtors and lenders really, eh?