The comparison that Greg Mankiw's blog gives is that this would be cutting out a $3 latte if you are a family living off an annual income of $100,000. Really tightening the belt, huh.
And what about the deficit? FY 2010 includes a deficit of about $1.2T (or $1.1999T) hopefully will add to the national debt currently sitting at about $11.1T. Fantastic.
I'm sorry, Forlorn Conservative, but that post is just silly. Yes, it's a small amount in the grand scheme of things, but since when do we punish people for getting started on taking responsibility? I highly doubt that President Obama intends to stop with the $100M and forget about the rest of our spending. Here is the President's response to your criticism, per First Read:
ReplyDeleteWhen asked after his cabinet meeting whether the $100 million was just a drop in the bucket, Obama agreed. "Cumulatively, they would make an extraordinary difference because they start setting a tone," he answered. "And so what we're going to do is line by line, page by page, $100 million there, $100 million here. Pretty soon, even in Washington, it adds up to real money."
Also in his meeting, Obama announced that his administration plans to cut at least 100 current programs "so that we can free up those dollars in order to put them to use for critical areas like health care, education, energy, our foreign policy apparatus."
I am not surprised that a political operative would whine about the small size of this first cut because I understand spin, but I expect more from you, FC. It makes for a cute talking point, but I thought you might be able to appreciate that someone is trying to take the lead on curbing some spending, any spending, even if it is just a little at a time.
Also, any budget is going to add to the deficit because based on the past decade, taxes have been too low and spending has increased across the board. With the current structure, if we wanted to keep our spending within our means, we would have to shut down the whole Federal government. (I ignore anyone who honestly believes that would be a good idea.) Just as the market is in reset mode, the Federal government needs to do the same by increasing taxes and cutting spending.
The talking points are great spin, but it still sounds like the Republicans are using the Democrats' 2004 playbook. They don't like what's going on, but they really can't offer any alternative. Suddenly, on January 20, 2009, the Republicans remembered fiscal responsibility, and when someone makes the effort at attempting to start such a thing, he gets criticized with little jokes. Politically effective, but intellectually cheap.
The President is behaving like an adult, and he's doing exactly what he promised to do during the campaign. Anyone who thinks the American people don't like his ideas were not paying attention on November 4.
P.S. I have a suggestion for how to raise some revenue. Close the tax gap! The tax gap measures the difference that should be paid and the taxes that actually are paid. In 2001, the gap was estimated to be between $312 and $353 billion. About $100 billion of it is estimated to be from people keeping income in illegal offshore accounts. That's a good chunk of money, n'est-ce pas? Of course, they would need to hire more people to collect that money. I know of a few budding lawyers looking for work...
ReplyDeleteI'm not sure how this became about the lack of a Republican alternative, but my only point was that $100M is nothing. It's barely symbolic.
ReplyDeleteBut obviously that's right now. I think we need to cut much more than that, and I plan on continuing to make that point until we do, rather than just saying "we're moving in the right direction."
And I do agree with you, Mama Z, about the tax gap.
Obviously, $100,000,000 is a drop in the bucket in this context but I don't think it is a bad thing to try to cut where you can. I do think it is pretty rich for Greg Mankiw to be criticizing Obama when he was one of Bush's top economic advisers: the administration that took a huge surplus and turned it into huge deficits. Over an 8 year span we accumulated more debt than ever in history and have nothing to show for it.
ReplyDeleteNow I am no economic expert, but it seems to me that in this economic environment, spending on infrastructure and things that will realize great benefits such as investments in clean energy, health care and education isn't necessarily the worst thing. It may not be able to be sustained over the long term, but in the short term it can have a great stimulating effect and accomplish real tangible goals now and into the future.
Simply cutting spending right now isn't going to cut it to get us out of the whole we are in. We need to spend money to turn this ship around and I for one think the priorities they have chosen to center their budget around are ideal.
Deficit spending on infrastructure is like buying mutual bonds with your credit card.
ReplyDeleteObviously just cutting spending won't solve anything, so I'm not against spending increases in principle, especially at a time when it's hardest to make those cuts, but spending isn't going to get us out of the recession. We need to target the cause: the shrinking credit market. And reaching into the Chinese credit market by selling treasury bonds isn't going to help. Not blaming that move on Obama--we've been stuck in this cycle for decades.
Isn't "illegal offshore account" just another way to say "bitchin' tax shelter"? (I kid...)
ReplyDeleteI had a friend in high school whose dad was an oncologist - a fine profession in which to practice....except he owned clinics which treated patients that he referred from his hospital post. This, allegedly, is REALLY illegal. They had a really big house, and what I would imagine was an even bigger bank account in the Caymans. They also had a Picasso.
I totally should have taken her to the prom...
So. Wow. That is so incredibly illegal and some reverse Robin Hooding. I just wrote 25 pages (and plenty more to go) on physician self-referrals...I wish I knew said person's name, because I would have zero qualms about reporting his ass. I am, after all, a dirty sympathizer of the Centers for Medicare and Medicaid Services (CMS).
ReplyDeletePlus, I must add...this person is getting rich off our tax dollars and hastening Medicare insolvency. A little qui tam suit sounds pretty effing good...if the government takes the case, I'd still probably get enough to cover law school loans and start prosecuting thieves like this guy myself...and if the government lets me handle it, it'd probably cover law school and my first home.
ReplyDelete