While it is true that we have added a little under $5 trillion to the debt since Obama took office, it is important (and fair) to remember that most of the massive spending policies implemented by the previous administration did NOT cease to exist the day Obama was inaugurated. The wars, the ridiculous tax cuts for the wealthiest Americans, Medicare Part D (boondoggle for Big Pharma) all continue to contribute to the debt to this day, while adding to the amount of interest that has to be paid on the debt.
The fact is, as a percentage of GDP, new spending by the Obama administration is actually lower than it has been since World War II — lower than the rate of inflation for the past two years. Obama’s actual “new” spending has amounted to about $900 billion over the last 3 years. This, despite the fact that government spending routinely goes up during economic downturns regardless of who is in the White House because more people have to depend on unemployment benefits, welfare, food stamps and Medicaid in order to survive.
According to CNN.Money, it has now been determined that more jobs have been created since the economy tanked than were lost. Obama has managed to achieve this net gain in jobs since 2009, despite having to deal with the lowest rated, least productive and most obstructive Congress since the Civil War, not to mention the fact that this country lost more than 50,000 factories between 2000 and 2009.
Mitt Romey’s and Paul Ryan’s plan would cut taxes 20% and allegedly keep those cuts “revenue neutral” by eliminating loopholes and certain deductions which they have both refused to identify. Most economists agree that their tax cuts would cost about $5 trillion over the next 10 years, and they also agree that eliminating every single loophole and write-off would NOT pay for them. In other words, they are making stuff up as they go along, refusing to provide any details because those details would expose the problems with their ideas.
Romney and Ryan also say that they want to “widen the tax base”. There is only one way to interpret this: they want families to start paying federal income tax who have, until now, made too little money to pay any federal income tax. So, according to Romney and Ryan, low income families would be subject to paying taxes they’ve never had to pay before, while the wealthy would get an average of a $250,000/year tax cut.
Obama 2012 –– Because the alternative is UNTHINKABLE!
Four years ago, this country was on the precipice of a second Great Depression. That’s an economic state where more than a quarter of the population is unemployed, half of all businesses close their doors, banks stop lending, and the government has to go into massive debt to keep the population from starving. It is a time when the majority of the country has to do without basic necessities. The only thing that got us out of the Great Depression was government spending on World War II.
Fortunately, the second Great Depression didn’t happen. In fact, less than three years after the recession bottomed out in 2009, the country has had a net gain in jobs relative to the jobs that had been lost. We have had 32 straight months of job growth in the private sector. The DOW has more than doubled, which has been good news to anyone with a 401K. We did NOT have to turn our auto industry over to foreign manufacturers two years ago, which saved more than a million jobs. Our exports are near record levels and we are less dependent on foreign oil than in the last 20 years. Home prices are finally headed up again. In Los Angeles, home values posted their highest gains in more than 6 years. Taxes have actually gone down since Obama took office, and more than 30 million people now have medical insurance who couldn’t get it before.
By any measure, the economy is trending upward.
Has it been fast enough? Of course not. You don’t recover from the loss of more than 50,000 factories (between 2000 and 2009) in just 3 years. New industries have to be generated. More people need new training for those jobs. It requires a national investment. The problem is, we now have the lowest rated, least productive, most obstructive Congress since the Civil War, whose primary objective has been to ensure that nothing President Obama proposes or supports passes or is adequately funded. It is politics of self-destruction.
Obama’s and Biden’s economic plan has been simple enough to grasp for anybody who has bothered to pay attention. The American Jobs Act was a great bill that would have been paid for while creating 3 million jobs. Guess who blocked it.
Undecided voters have no excuse. And no option.
Obama 2012 –– Because the alternative is UNTHINKABLE.
Both Romney and his running-mate have repeatedly stated that their intent is to cut taxes 20% for everybody who pays federal income tax. The cost of such a cut over a ten-year period is approximately $5 trillion, yet Romney now denies having ever said anything about this tax cut.
Both Romney and Ryan say that these cuts would be deficit neutral because, at the same time, their plan would eliminate certain unspecified loopholes and write-offs currently in the tax code. The problem is, even if they eliminated every single write-off, including charitable donations and home mortgage interest, it still wouldn’t come close to covering the cost of the $5 trillion tax cut.
HOWEVER, they also say that they would increase revenue by “broadening the tax base”. The only way to interpret this is that they intend to tax low and middle income families who, until now, have no earned enough to qualify for paying federal income tax. Therefore, their stated intent is to cut taxes on the wealthiest Americans and raise taxes on the middle class. You can’t get around that.
By the way, cutting taxes does NOT stimulate economic growth. In fact, quite the opposite is true. Low taxes encourage profit-taking. Periods of higher tax rates show more re-investment. Business owners take less profit out of their companies if they know they’re going to pay higher taxes on that income. In any case, the last eleven years has provided ample proof that tax cuts boost nothing but the wealth of the top 1% of the population. 93% of all gains in the economy over the last two years have accrued to that small group of highly fortunate people.
Romney has also stated numerous times that he wants to increase defense spending by a $1 trillion over the next ten years and $2 trillion over the next 20 years. He would also add more than 100,000 more personnel to the armed forces. He has vowed to do this despite the fact that the Pentagon has said it doesn’t need the additional people or extra money. Romney just wants to be seen as a pro-military leader by his right-wing base. It is a completely disingenuous position.
All that said, I also have doubts about President Obama’s debating skills (although I don’t know what that has to do with being President of the United States). I wish he had been more energetic and assertive in the debate. I also wish that he called Romney on all of his lies and half-truths. That was a major mistake.
Ryan’s speech was a well-written, well-executed pack of lies. This is the same guy who voted FOR every single one of George W. Bush’s big spending policies — both unfunded wars, all of the unpaid for tax cuts, the Medicare Part D boondoggle for Big Pharma, and TARP. Yet HE’S calling Obama a big government spender. (By the way, all of these policy decisions continue to contribute billions to the national debt every year. They didn’t just go away when George W. Bush left office).
Ryan stated that Obama took $716B out of Medicare and gave it “too someone else”. Two responses: First, Obama SAVED $716B in Medicare by eliminating waste and fraud, and discontinuing the tax-payer funded subsidies to private insurance companies that were “administering” the Medicare Advantage program; Second, Obama used that savings to close the drug “donut hole” for seniors and having wellness visits covered. Mr. Ryan’s plan also cuts $716B out of Medicare, but he uses that money to help pay for tax cuts for the wealthy.
Ryan’s plan, which Mitt Romney has embraced, gives seniors the “option” of using “premium support” (vouchers) to go out and buy their own insurance from private insurance companies. This assumes that seniors could even find an insurance company that would be willing to give them coverage when they are older and more likely to become ill or injured. If they could find such a company, it would cost them an average of $6500 out-of-pocket to get coverage equal to what they currently have with Medicare. Of course, just by offering this option, Ryan strangles an already threatened Medicare program by taking people out of the mandated system. The obvious objective here is to end Medicare for EVERYBODY.
Ryan also took a shot at Obama for walking away from the Simpson Bowles Commission. This remark was the height of hypocrisy as Ryan himself turned his back on the commission’s recommendation to reduce the debt in a balanced fashion by cutting spending AND increasing revenue by raising taxes. Obama walked away from it because he knew the House would NEVER pass it. Subsequently, Obama asked congressional leaders to form the Super Committee, which the Republicans in Congress agreed to follow and which they are now threatening to back out on.
Ryan’s entire speech was riddled with falsehoods and half-truths and it made me sick every time that audience cheered what it was hearing. These people are supposed to be well-educated, moderately well-informed adults, yet they were jubilant about the load of garbage Ryan was feeding them.
“A downgraded America.” Ryan blamed the president for the nation’s credit downgrade in August 2011 after Republicans threatened to allow the government to default on its debt for the first time in history. But the ratings agency explicitly blamed “Republicans saying that they refuse to accept any tax increases as part of a larger deal.”
“More debt than any other president before him, and more than all the troubled governments of Europe combined.” Romney has made the almost identical claim, that Obama has amassed more debt “as almost all of the other presidents combined.” But their mathdoesn’t add up: when Obama took office, the national debt was $10.626 trillion. It has increased to slightly above $15 trillion.
Shuttered General Motors plant is “one more broken promise.” Ryan described a GM plant that closed down in his hometown, Janesville, Wisconsin, and blamed Obama for breaking his promise to keep the plant open when he visited during his campaign. But Obama never made that promise, and the plant shut down in December 2008, before Obama even took office.
“The greatest of all responsibilities is that of the strong to protect the weak.” Ryan closed the speech with an invocation of social responsibility, saying, “The truest measure of any society is how it treats those who cannot defend or care for themselves.” However, numerous clergy members have condemned Ryan’s budget plan as “cruel,” and “an immoral disaster” because of its devastating cuts in social programs the poor and sick rely on. Meanwhile, Ryan would giveultra-rich individuals and corporations $3 trillion in tax breaks.
Finally, the recent ad being run by the Romney/Ryan campaign asserts that President Obama took the job requirement out of the welfare reform law that was passed during the Clinton administration. It has been debunked by every fact checking organization on the net and several major newspapers, yet the RNC has doubled down and continues to run the TV spot. Clearly, the decision has been made by the RNC that lying is perfectly acceptable as long as it works. Unfortunately, it does appear to be working in a couple of crucial swing states. Again, this demonstrates a willingness by some people to believe any lie that is spoken against this president, no matter how blatant or disproven by facts.
Obama 2012 — Because the alternative is unthinkable.
Making large spending cuts while the country is still struggling to climb out of the deepest recession since the Great Depression is NOT a smart idea. Here’s what I would do:
1. Cut defense spending immediately by 5%, and 10% over the next 5 years, by closing a few bases in Europe and Asia. Make all defense contracts subject to mandatory competitive bidding, and empower the OMB to audit all defense expenditures. Eliminate the development and production of out-dated weapons systems. (Secretary Gates has already endorsed most of this).
2. Institute means-testing for all Medicare recipients. Benefits should decrease as our income increases. Giving free medical care to a millionaire who makes almost $3,000 per day is obscene. Everybody should get some benefits, but we have to stop throwing money at people who are made of money. (Leave Medicaid alone! The poor, low-income families and the elderly are having a difficult enough time already). Finally, empower Medicare administrators to negotiate drug prices with Big Pharma. This would save seniors and the Medicare program billions of dollars, yet Republicans in Congress are obstructing any move to do this.
3. Raise the retirement age for Social Security to 68, not 70. The current retirement age is not reflective of the world we live in, with people living and working longer. Payroll deductions for Social Security should NOT have a cap for wage earners. Lower the annual tax to 5% from 6.2%, but remove the wage base cap (currently at $106,000) for employees. Retain the wage base cap for employers so that their matching contribution requirement ends when the employee reaches $110,000 in gross wages. Finally, take Social Security out of the General Fund, so that it can’t be stolen from again.
4. Do not touch discretionary spending, which only accounts for about 16% of the budget. I would actually increase this percentage, so that it includes infrastructure projects that would create jobs. All programs should, however, be subject to annual audits to ensure money is being spent where it’s supposed to be spent and there is no fraud or waste.
5. Implement a transactional tax on hedge fund managers and Wall Street speculators that will bring their real tax liability up to the top bracket where they belong. Some of these people are earning 12-figure incomes, contributing nothing to the economy but higher costs for commodities, and their current tax rate is about 11%.
6. Eliminate the tax loophole created by George W. Bush in 2005 which allows corporations to write-off the cost of training foreign workers in this country, as they out-source American jobs to foreign countries. This loophole actually incentivizes out-sourcing.
7. Keep current individual tax rates where they are for people earning between $50,000/year and $300,000/year. Those earning less should also be given a ‘payroll tax holiday’ for the next two years. Those earning more than $300,000/year should see an increase in their tax rate from 35% to 39%. (These rates can all come down over the next 10 years if we’re serious about ending many of the tax avoidance loopholes in the tax code).
8. Leave corporate taxes where they are, but provide some tax incentives for companies who move their manufacturing facilities back into the US. We have lost nearly 60,000 factories in the last decade and our economy will not fully recover until we can get manufacturing back on its feet in this country.
9. Raise the Estate Tax on estates valued in excess of $10 million. Estates valued at less than $2 million should pay no Estate Tax.
10. End the subsidies to the wealthiest industries on the planet — big oil and big agra. It is absurd that US tax payers are helping to finance the operations of these mega-businesses).
None of these ten ideas alone is perfect, but we have to do something. I believe that taking the above ten steps would drastically reduce our deficit with the least amount of pain for everybody. More importantly, it would serve to buttress the middle class, which is the engine that drives our economy.
In concert with these ten steps, we need to address the trade imbalance and its underlying causes. India and China in particular, need to implement worker protections and an acceptable minimum wage. China needs to stop manipulating the value of its currency and subsidizing its so-called ‘private industry’, so the playing field is more level. Otherwise, their exports should face tariffs.
Then again, how is asking people who earn over a half million dollars a year to pay a couple of thousand dollars more in taxes destroying them? A person making $500,000/year gets a bimonthly paycheck that grosses roughly $21,000, or +$40,000/month. If they’ve invested wisely and take advantage of the kinds of tax shelters that are available, he or she can adjust that taxable income considerably. So, the notion that a $2,000 or even a $5,000 annual surcharge on that amount of income would dramatically impact that person’s lifestyle is preposterous. We’re talking about approximately $200/paycheck on a +$20,000 check to provide every American with quality health care. The result would be that no child of the wealthy would be taken out of private school. No mansion or Bentley would have to be sold. No second or third vacation home would be put on the market. No vacations to the Riviera would be cancelled. And no pools would go unheated. Those who say they would have to cut back on charitable giving are just looking for an excuse to do so.
Some would say that asking the wealthy to shoulder some of the costs of health care reform is unAmerican, or even socialistic. That might be true if there wasn’t any return on investment for the wealthy. The fact is, that providing health care for every American would resolve one of the biggest obstacles that our economy faces. Small businesses, which suffer the most with exhorbitant health care costs, would find immediately relief and be able to hold on to experienced workers longer. Wouldn’t a healthier economy with a healthier labor force enhance the investment opportunities for the wealthy, while creating a more stable financial foundation for the country as a whole? Years ago, there was a comic strip that had a blowhard millionaire corporate tycoon named General Bullmoose. The motto of this character was “What’s good for General Bullmoose is good for the USA.” Today, the reverse of that phrase is the reality of the situation. What’s good for the USA is the best way for General Bullmoose to hold onto his wealth. Otherwise, the whole system is put at risk.
While it’s true that the top 5% of the nation pays more than 50% of the taxes, it is also true that this same 5% also holds more than 90% of the nation’s wealth. The top 1% hold half the nation’s wealth. With the various loopholes and shelters provided by our obsolete tax code, most of these people pay less taxes than those in the middle class. Warren Buffet has publicly stated that he thinks it is obscene that he pays approximately 18% in taxes, while his secretary is paying a full 30%. The screams we hear from the wealthy about President Obama’s health care reform are fueled by inexplicable greed, ideological obstinance, and a total lack of compassion for those who are less fortunate.
It’s true. You can’t help the poor or the middle class by “destroying” the rich. But nobody is suggesting that destroying any level of our economy would help any other level. The point is that wealthy people in the United States have been existing in a protective bubble since the Reagan administration that was designed to preserve their wealth at the expense of the middle class. Those of us in the midsection of the economy have fewer hospitals, deteriorating public schools, bridges and highways, and almost zero access to government. To preserve the standard of living and health of the population as a whole, and keep this country from sliding into Third World status, it is high time that the wealthy in this country paid their fair share, which they have not. The claim that doing so would destroy their way of life is a fatuous argument.