Former Obama economics advisor Christina Romer lays out her plan for "compassionate deficit...


Former 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.
Comments (21)
  • mweaver
    , contributor
    Comments (199) | Send Message
     
    why is she a "former" advisor?
    same "hash" served a different way
    9 Sep 2012, 06:46 AM Reply Like
  • anonymous#12
    , contributor
    Comments (545) | Send Message
     
    Tax the rich with a 90% tax rate, that would balance the budget and would restore equilibrium in the current disparities in income. Romer is right.
    9 Sep 2012, 11:33 AM Reply Like
  • 2MuchDebt
    , contributor
    Comments (406) | Send Message
     
    @ anonymous#12: That is one of the worst ideas I've ever heard. Clearly you're not successful and jealous of those who are.
    9 Sep 2012, 12:21 PM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    She was part of the brain trust that concocted the first 800B stimulus that did nothing but blow a hole in deficit.... then she ran away when it didn't work.

     

    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.
    9 Sep 2012, 08:49 PM Reply Like
  • djoseph
    , contributor
    Comments (111) | Send Message
     
    Enough of Christine Romer and the other economists duped/seduced by the promise of working in an Obama administration. Their tired and heavily made-up socialists theories are downright creepy.
    9 Sep 2012, 07:56 AM Reply Like
  • Papaswamp
    , contributor
    Comments (2241) | Send Message
     
    Starting 2013 taxes will go up on the upper middle class to the wealthy, plus we get nailed with the new healthcare tax. She wants to raise it even more? With an ever shrinking labor force participation, this leaves fewer and fewer to pay for more and more not working (because there aren't enough jobs not because they are just sitting around). Coupled with 50% or wage earners not paying federal taxes we are going to run into a serious problem.
    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.
    9 Sep 2012, 08:00 AM Reply Like
  • davidingeorgia
    , contributor
    Comments (2661) | Send Message
     
    For a Democrat, the solution to ANY problem (real or imagined) is first, raise taxes and raise them a lot. Spending cuts? Oh, sure...there are a bunch of cuts in the 2037 budget.
    9 Sep 2012, 08:04 AM Reply Like
  • YellowLab1
    , contributor
    Comments (136) | Send Message
     
    You're right on all points but one..... We ALREADY ARE IN A SERIOUS PROBLEM ! We need Romney and America to pretty quickly create 10 million or more jobs.
    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.
    9 Sep 2012, 08:13 AM Reply Like
  • robgra
    , contributor
    Comments (1003) | Send Message
     
    Applying for work, is she? Someone please tell her that Obama has not won yet...
    9 Sep 2012, 08:02 AM Reply Like
  • cstauffer
    , contributor
    Comments (542) | Send Message
     
    Romer is an economist and her assessment of how to attack deficit reduction in a way which will do the least harm to the economy of today and tomorrow is commonsense stuff. She is absolutely right that outright deep spending cuts in the near-term will likely do more harm than good. With the market telling us through the low interest rates on our U.S. government bonds that we have time to change our fiscal course, we don't have to make any sharp turns to satisfy those who we rely upon to purchase our debt. However, we have to demonstrate that the course correction that we implement will get us to where we need to be incrementally over time. We absolutely cannot do anything which will place any additional financial strain upon the working age middle class. The very wealthy are more wealthy, as a group, than ever before and the middle class, as a group, are experiencing more financial strain than ever before. It does not take a Phd economist to figure out where it does the least harm to impose additional tax burden.
    9 Sep 2012, 08:19 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    Yes, investors should pay more as they are all rich. What about a 5% tax on all investor transactions? That will hit all those rich guys. {sarcasm off}.
    9 Sep 2012, 10:26 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4911) | Send Message
     
    Romer is a pandering idiot and is incredibly weak. And all the people cherry picking Keynsian economic theory are idiots too.

     

    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.
    9 Sep 2012, 01:31 PM Reply Like
  • Archman Investor
    , contributor
    Comments (3320) | Send Message
     
    Bravo Thomas.
    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.
    9 Sep 2012, 01:46 PM Reply Like
  • cstauffer
    , contributor
    Comments (542) | Send Message
     
    Tomas you miss the forest for the trees because you are focused on what you view as these large, absolute numbers such as $100 trillion of debt and unfunded liabilities and even taking your numbers at face value, the point that you miss is that much of the debt will never be paid off on a net basis. With a perpetual entity such as the United States, we simply replace old debt with new and this is perfectly alright so long as the absolute debt levels remain below a certain threshold which allows us to service the debt and meet our other obligations. Unfunded liabilities are a problem on a case by case basis in terms of pensions and adjustments have to be made on a case by case basis. Unfunded liabilities in terms of entitlements are a problem if action is not taken, but reality is that actions can be taken which will not be draconian in nature which can put SS and Medicare on a sustainable path.
    11 Sep 2012, 11:11 PM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4911) | Send Message
     
    cstauffer

     

    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.
    12 Sep 2012, 12:14 AM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    cstauffer,

     

    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.
    12 Sep 2012, 12:38 AM Reply Like
  • mickmars
    , contributor
    Comments (1312) | Send Message
     
    Federal Compassion = Massive Debts
    9 Sep 2012, 08:20 AM Reply Like
  • Haighty
    , contributor
    Comments (43) | Send Message
     
    Who at SA decides to post such politically partisan NY Times articles in the Market Currents? What's the purpose of doing this? It only generates polarizing, tit-for-tat comment thread wars between liberals and conservatives (or libertarians), which cheapens the site. If you want to attract more people, you would be better served posting articles which generate a more intellectually compelling exchange of ideas.
    9 Sep 2012, 07:41 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    We don't need compassion in the government. That is what charity is for.

     

    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?
    10 Sep 2012, 02:07 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4911) | Send Message
     
    david

     

    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.
    10 Sep 2012, 05:33 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    I'm ok with that too!
    11 Sep 2012, 03:29 PM Reply Like
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