Market Currents
Former Obama economics advisor Christina Romer lays out her plan for "compassionate deficit...
-
Sunday, September 9, 2012, 6:34 AM ETFormer Obama economics advisor Christina Romer lays out her plan for "compassionate deficit reduction," which includes higher taxes on the rich and lower tax breaks for them, as well as increased medicare contributions. But she's also in favor of increased tax breaks for firms that hire more people, as well as cuts in defense, agriculture, high-speed rail and healthcare where there's inefficiency.
Other date
Latest Macro Articles
This news story has 21 comments:
same "hash" served a different way
Now she's talking reducing spending... compassionately - which kinda sounds like Bush "compassionate conservative".
These people can't simply do what works - stop regulation hell, lower spending, and provide a fair, predictable tax system.... stop playing politics.
It would be nice to see the govt cut waste and spend responsibly BEFORE asking for more money. Pumping into an already inefficient machine makes no sense.
Obama's plans take us right down the road to more and more social welfare programs and California, New York, Illinois, and Greece like bankruptcy with free markets choked to strangulation.
In Spain unemployment among young healthy adults is over 50 %. After four years of Obama we're working our way quickly to that model and those numbers.
This well balanced approach is only for appearances. Fact is we have over $100 Trillion in debt and unfunded liabilities at the federal level which is about $1 million per household or $2 million per working person. The numbers are so big you don't even have to fine tune them. We are past time to fix this problem as inflation is already here because of this unsustainable debt which causes the Fed to have to print money. Households are losing buying power every year which is a hidden tax caused by excessive debt. And by the way this is a terribly regressive tax for any idiots who think Americans are not paying already.
All tax breaks need to be eliminated across the board including muni exemption which the filthy rich and many congressmen hide their wealth. Filing taxes needs to be as simple as a postcard if possible. SSA needs to be reformed as it is a fraud and is incredibly racist..........it might be the most fraudulent program the government runs. The federal government needs to be downsized to 20% or less of GDP so state and local budgets have room to breathe. Military spending cut in half. Move capital gains taxes up a bit although I would be hesitant to make them the same as marginal tax rates or capital formation will be challenging and capital will only invest in the most sure things. Reform medicare and remove the fraud which is ridiculous.
Review the trajectory of Obamacare as it will likely over promise and under deliver like every other government program and which we cannot afford. It makes no sense that anyone can bend a cost curve if there is truly cost in the curve. Certainly we can eliminate cost by doctors just dropping out of the system but then health care quality goes down the tubes. Shift foreign investment from the State Department to inner cities. We have our poor too.
Wealthy have to pay more and so does the middle class because the problem is just too big for the wealthy to pay.
High speed rail? Give me a break. So we want to own GM and the rails? Only exception might be high speed rail between major cities and mostly on the coasts.
I have used the word "idiots" a lot in this comment but the shoe fits. Does anyone think that Greece got to be a mess because they were sober and realistic about their condition? That is the problem we are having now. Honest discussion is very scarce.
Truth and the medicine needs to be taken. No one wants to take it or hear it.
The simple fact of the matter is no one is willing to sacrifice anything.
Problem is: They will be forced to take the medicine at some point no matter what.
Solution: Ignore the phony news, lying politicians and prepare accordingly.
Your head is deep in the ground or you don't know what you are talking about. You should not be managing money but asset gathering is really about charging fees not making clients money so whatever.
I only point out the large numbers because trying to rationalize it as you are doing is pointless. I am not talking trees when I give out one big number that is the entire forest so your metaphor really applies to you not me. Or you are on a hope and change fantasy.
This is an over leverage story which everyone thought they learned with the latest financial fiasco of over leveraged firms. Can a $14 Trillion economy carry over $100 Trillion in debt? Especially with an anemic growth rate that is really spurred by inflation and government deficit spending not strong organic growth? And government representing over 20% of that $14 Trillion number? And the workforce shrinking? And 50% of the population not willing to pay taxes? And another majority thinking that it can all be solved by just taxing the heck out of 1% of the population when it will not make a dent? All the vectors are pointing in the wrong direction which would help us manage it and there is no case study showing it can be done without dramatic dislocations. Our fiscal policies, tax policies, economic policies, employment policies, education policies are all a disaster with respect to this problem.
Already the impact is being felt including the Fed monetizing our debt and driving inflation. At some point we will realize rising rates and we could enter a DEBT SPIRAL which would be catastrophic. Our carrying cost now is very low but will not remain so. I doubt we have the political will or collective intellect to ever fix these issues because votes are attached to each program and SSA and Medicare always comes off the table which is the biggest problem. And people like you will only appreciate it once rates double and quadruple and our debt is spiraling upwards while services are being cut and the economy is tanking. So Ben Bernanke will just inflate it away the best he can because it is the lesser of all the evils that we are doing to ourselves.
The debt will be paid off to some degree as a normal course of business as the obligations should drop when the baby boomers die off and money shifts from the older generation to the younger. If not then we are doing something wrong. I am not sure we will get to that point though without extreme pain. The perpetual entity point is pointless and does nothing for people hammered by high inflation or a government bankruptcy/restructuring.
There is an old Scottish saying which goes:
He that lives upon hope has a slim diet.
Unfortunately your statement about "reality is that actions can be taken....." was true 10 years ago and 20 years ago.
And exactly what action has been taken?
Folks keep saying we can't balance the budget because of the "shock"to the system. Well, they've been saying that for more than four years now. How is that working out for our country? A slow steady decline is ENSURED if we keep spending trillions more than we take in. I'll take my chances with the big shock and telling people to take care of themselves, their families, and their communities.
Our current fiscal policy is draconian in nature and its sure as heck not a good draconian!
If what I read today is true... the Chicago public education system has 71% of money being spent on retirees and the current pensions and health care for the teachers. That is almost three out of four dollars being given to the BUREAUCRATS and Teachers!!! And we wonder why only 15% of current fourth graders in that school system are reading proficient!! And only 50% of students ever graduate high school!!!
Think about that. If you worked for a business where you failed your customer 50% of the time - how long would you be in business? Let alone get paid an average of $74K plus benefits (bringing compensation to over 100K) and get gold plated retirement plans.
Its unfreaking believable what is going on in this country and it all starts with the government. We went from of the people, by the people, for the people - to of the bureaucrat, by the politician, for the financial elite.
Its time to simply cut down all the damn trees in government so we can get rid of the ridiculous crony capitalism, corruption, bureaucrats, handouts, fake disabilities, far too big military, far too many "intelligence analysts", etc, etc. Actually the time was a long time ago. We are well on our way to a financial calamnity and its our children and grandchildren that will suffer through large decreases in standards of living and reduced opportunities.
And its ALL self inflicted.
Slash it all. We need someone that isn''t very good with people. Someone that doesn't want to be on TV. Someone that just doesn't give a damn frankly what is said about him/her.
Cut every damn program. Eliminate several cabinet agencies. Downsize our military and tell the rest of the world to police themselves. Raise the retirement age for SS and Medicare to 70 and do it tomorrow. Three tiered tax structure with no exemptions for anything. No mortgage deductions. No education deductions. No nothing. Just pay your taxes.
Unless we take our medicine now (and I've been saying this for years) we'll continue to see our standard of living decline. Get the government out of our lives as much as possible, tell people to take care of themselves, their families and their communities. And balance the damn budget next year! All this nonsense about how it will be a "shock"to the system better think about how much more debt we've got than just a few years ago - think now that maybe a shock a few years ago would have been better?
If we are going to raise the retirement age then take it to 200 and just get rid of it. We will all be better off.