Outside the Beltway

Under Obama, Taxes Are Lower Than Ever

Since Barack Obama took office, federal taxes have been lower for pretty much everyone.

Alex Knapp
100

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The AP reports that since President Obama took office, pretty much everyone has been paying fewer federal taxes.

And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.

Income tax payments this year will be nearly 13 percent lower than they were in 2008, the last full year of the Bush presidency. Corporate taxes will be lower by a third, according to projections by the nonpartisan Congressional Budget Office.

The poor economy is largely to blame, with corporate profits down and unemployment up. But so is a tax code that grows each year with new deductions, credits and exemptions. The result is that families making as much as $50,000 can avoid paying federal income taxes, if they have at least two dependent children. Low-income families can actually make a profit from the income tax, and the wealthy can significantly cut their payments.

In an era of trillion dollar deficits, this is insane.

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100 responses to “Under Obama, Taxes Are Lower Than Ever”

  1. Patrick T. McGuire Avatar
    Patrick T. McGuire

    “In an era of trillion dollar deficits, this is insane.”

    Deficits by definition are caused by spending more than you take in. The insanity is the spending which is higher than any time in history.

  2. JD Avatar
    JD

    1) How do you tax your way out of a 1.6 trillion dollar hole? What tax rates on individuals and corporations would you have to use?

    2) What are these new tax rates going to do to the unemployment rate or new job numbers.

    3) What previous examples do we have of increased revenues to the government resulting in the money not being used to further the size and growth rate of government?

    I’ll hang up and listen.

  3. DMan Avatar
    DMan

    One thing is clear, this proves we need to lower taxes.

  4. Alex Knapp Avatar
    Alex Knapp

    @Patrick,

    When you’re in debt, you don’t quit your second job.

    @JD –

    1) You can’t. You have to both raise taxes and cut spending. I’d favor a return to Clinton-era tax rates along with a phase out of most deductions and credits, including the mortgage interest deduction. I’d cut spending along these lines.

    2) Probably nothing. There’s pretty much no correlation between federal tax rates and economic growth. See my previous posts here and here.

    3) Historically, tax increases lead to spending cuts. See here.

    4) What are you smoking in your profile pic? I’m always on the lookout for new cigars.

  5. Doug Mataconis Avatar
    Doug Mataconis

    Yes, it is insane. Which is why we need to cut spending drastically

    Also, this analysis seems to leave out several factors that contribute to the overall tax burden of the average American including FICA taxes and state and local income and sales taxes.

    In other words, an interesting data point, but not even half the story

  6. wr Avatar
    wr

    JD — If the Republicans hadn’t forced through an extension of the Bush tax cuts for the rich, $700 billion of that $1.6 trillion would have disappeared.

    So yes, you can tax your way out of it.

    1. Doug Mataconis Avatar
      Doug Mataconis

      WR,

      That $700 billion dollar figure was over a ten year period, not in a single year so the impact of on the FY 2011 deficit would have been minimal at best.

      Second, that projection made assumptions about economic growth that were, at best, guesses.

      Third, if you don’t think that Congress would have found a way to spend that money if it did come in you are kidding yourself

  7. reid Avatar
    reid

    “Which is why we need to cut spending drastically”

    Please explain what you think that would do to the economy.

    1. Doug Mataconis Avatar
      Doug Mataconis

      reid,

      The temporary pain of a cut in spending would be far better than what we face if we don’t get the deficit and debt under control. Truth is, there is no way we’re getting out of this without some pain

  8. Alex Knapp Avatar
    Alex Knapp

    Doug,

    Also, this analysis seems to leave out several factors that contribute to the overall tax burden of the average American including FICA taxes

    It’s not state and local, true. But the article makes reference later to the fact that total federal revenues are at their lowest point since 1950, as I mentioned yesterday.

  9. Doug Mataconis Avatar
    Doug Mataconis

    One more point that I missed initially, the reason that tax collections are lower the last three years is because of the simple fact that the economy has been in the toilet. You can’t get blood from a stone.

  10. Alex Knapp Avatar
    Alex Knapp

    Doug,

    That $700 billion dollar figure was over a ten year period, not in a single year so the impact of on the FY 2011 deficit would have been minimal at best.

    According to the CBO, the projected cost of the December 2010 tax deal is $900 billion for the next two years. It took about $450 billion out of the budget for FY 2011.

    Third, if you don’t think that Congress would have found a way to spend that money if it did come in you are kidding yourself

    As I noted above, this doesn’t appear to be the historical case.

    The temporary pain of a cut in spending

    Where do you propose we cut?

  11. Alex Knapp Avatar
    Alex Knapp

    Doug,

    One more point that I missed initially, the reason that tax collections are lower the last three years is because of the simple fact that the economy has been in the toilet. You can’t get blood from a stone.

    That’s part of it, as the article I linked notes. But the other part of it is Obama’s program of tax cuts, culminating in the absolutely absurd tax deal reached in December.

  12. Doug Mataconis Avatar
    Doug Mataconis

    Alex,

    I would start with Rand Paul’s $500 billion and work from there

  13. JD Avatar
    JD

    @Alex,

    1) I’ve read your cuts but I don’t think they go far enough. No mention of Social Security, Medicare or defense (outside of ending the wars). The retirement age will have to go up. I’m with you on ending all subsidies everywhere and I wouldn’t be opposed to gradually increasing the limit on payroll taxes to help firm up SS in exchange for real compromise from Dems. Ideally, I want SS gone… privatized – pie in the sky.

    2) If this is true, why did Obama and the Democrats refuse to let the Bush tax cuts expire?

    3) So increased federal taxes cause ever-decreasing federal outlays? You guys should start shouting that from the rooftops. No republican will ever win another election, if true.

    4) That’s a Cuban being smoked in Prague, CR. I’m not cigar guy but it was good but probably more-so because of the locale and mood.

  14. reid Avatar
    reid

    Doug: Maybe you’re right, but you’re speaking flippantly as if those are obvious facts. Drastic cuts in spending would no doubt lead to huge government and private industry layoffs; sort of a massive anti-stimulus package. Who’s to say that wouldn’t push our fragile economic recovery into another long-lasting recession?

    And on the other side, the debt is a pretty abstract concept to me. How much of a problem is it really? How do you quantify the decision of cutting spending vs. negatively affecting the economy? Most of what I read (including you) seems to be driven by ideological assumptions and goals.

  15. reid Avatar
    reid

    By the way, I’m not against the idea of reducing spending in selected areas, since I believe the debt is at the least a long-term problem, but this talk of making drastic cuts immediately sounds rash.

  16. JD Avatar
    JD

    “And on the other side, the debt is a pretty abstract concept to me. How much of a problem is it really?”

    Ask Portugal, Ireland, Italy, Greece and Spain about the “abstract concept of debt.”

  17. reid Avatar
    reid

    No need to be snide. We aren’t any of those countries. You ask an honest question….

  18. Alex Knapp Avatar
    Alex Knapp

    @Doug,

    I would start with Rand Paul’s $500 billion and work from there

    I’m holding you to that. 🙂

    @JD –

    1) I’m leery of raising the retirement age. For a cushy white collar worker like me, it’s no big deal, but I worry about the effect of such a hike on people who work much more strenuous jobs than I do.

    I think it’s better to work to lower health care costs than just willy-nilly cut Medicare. I agree that Medicare costs need to be curtailed. I’m less worried about Social Security because if we stop raiding the trust fund, it’s a non-issue, debt-wise.

    The financial crisis makes me leery of privatizing social security. Especially now that we’re getting to the point where the first 401(k)s are maturing and we’re discovering that they’re woefully insufficient for retirees.

    2) Because they’re politicians, and extending the tax cuts was popular.

    3) It’s not a magic thing. It’s just tha tmost tax hikes tend to come in conjunction with spending cuts as part of a budget control package. That’s what happened under Reagan, Bush I, and Clinton. I don’t see any tax hike package passing without spending cuts — that’s pretty much just the political reality of it.

    4) A Cuban in Prague, huh? I’m jealous on both counts.

  19. JD Avatar
    JD

    @reid

    I wasn’t intending to be snide. Those countries are not us, sure, but they’ve made promises in the form of entitlements that their governments can no longer pay for. We’re on the same course and the American people have a similar mindset: “Sure, we need to cut spending. But don’t take away [i]my[/i] goodies…”

  20. largebill Avatar
    largebill

    This is basically nonsense. Best analogy for current situation and bragging about lower taxes (even if true) would be my wife saying “Honey, I’ve maxed out the credit cards, but don’t worry it isn’t costing anymore because I stopped paying them off.” In other words every penny of government spending is a tax. We just haven’t figured out when and who will pay it. Beyond that the future tax bill is actually increasing exponentially every day we don’t pay interest on the debt. Nothing is more powerful than compound interest.

  21. reid Avatar
    reid

    JD: I agree to some degree, but the question is does that justify drastic cuts in the budget NOW? And what would be the effect on the economy of those cuts? People on the right often just casually toss that out as if it’s obviously a wonderful, virtuous thing to do, if we could just find the resolve.

  22. JD Avatar
    JD

    @Alex

    1) The fund is raided annually and spent as general funds. And if you stop raiding it, you’re just going to have to borrow more money. Reps and Dems both have put SS on a collision course with insolvency because they spent the money. What’s done is done and eventually we will all pay the price by getting less money or the same amount at an older age.

    Individual retirement accounts absolutely demolish the rate of return of social security. And the 401k issue is different. SS is supposed to be a supplement for all but the poorest. The 401k issue is that retirees don’t have enough to maintain their lifestyles – which are far above those who subside on SS alone. So individuals under-saved. Others will learn from their mistakes. Politicians spent the SS Trust Fund… so let’s keep trusting government to help us in retirement?

    2) This is a bipartisan problem – governing by popularity polls

    3) We need a “budget control package” ASAP. But again, politicians don’t have the fortitude since Americans aren’t ready to confront the realities of our past and present spending chickens coming home to roost.

    4) Friends of mine that smoke cigars say Cubans are overrated. The Dominican Republic makes just as good cigars. I wouldn’t know. However, Prague is not overrated, thought I’ve never heard anyone suggest that it is.

  23. JD Avatar
    JD

    @reid

    The effect of cutting spending now would mean borrowing less now, which means in the future, interest payments on the debt would be smaller, allowing for that money to be spent on something more virtuous than “debt service.”

  24. reid Avatar
    reid

    JD: I understand that; it’s not what I mean. That’s clearly a benefit to cutting spending now. But what are the risks? Proponents of drastic budget-cutting never mention the effects on the economy. It seems clear to me that cutting $100B or more from the federal budget will result in massive layoffs, both in the government and in government contractors. That would no doubt hurt the economy. Is the benefit of reducing debt worth it? Why not implement some modest reductions now and do more later when the economy is stronger?

  25. mantis Avatar
    mantis

    If this is true, why did Obama and the Democrats refuse to let the Bush tax cuts expire?

    Is that how it happened? Interesting memory you’ve got there.

  26. wr Avatar
    wr

    JD — The reason that Ireland can’t fulfill its promises to its citizens is that its (now ex) government decided to protect their friends in the banking system who had all gotten obscenely rich making stupid gambles in crooked securities. The government chose to bankrupt the country and guarantee these banks’ debts rather than telling their bondholders they’d made a bad investment.

    It’s a question of choices and priorities. You stand for the citizens or you stand with the billionaire bankers.

    Iceland chose to stand with its people. They told the bondholders to go screw. And that country has rebounded quite nicely.

  27. Steven Plunk Avatar
    Steven Plunk

    It’s funny that when times are tough businesses lose money or barely break even yet we see our government weathering these tough times by spending more like they are making a profit.

    Government spending is financed by two mechanisms, taxes revenues and borrowing. Both of those remove capital from the private sector where it is managed much more efficiently. While huge cuts will cause government layoffs and some private sector layoffs the benefits of keeping more money in the hands of the private sector should come close to making that a wash in the short term and a definite bonus over the long term.

    Cuts in Social Security and Medicare will be necessary so better to get them done now and let people like me prepare for them.

    We have proven we can’t spend our way out of this recession so the logical choice is to allow the private sector to grow us out of it. Stable tax rates, lower regulatory burden, and cuts in government spending will allow that to happen.

    The true insanity is the decades of deficit spending that preceded where we are now. It’s not Obama and it’s not Bush, it’s government’s insatiable appetite for ever more. Those who seek to blame individuals or business in the private sector are completely wrong.

  28. wr Avatar
    wr

    JD — Millions of people lost everything in their IRAs when the stock market and real estate market tanked thanks to the criminal activities of the country’s biggest banks. What do you tell those people when you get rid of their Social Security? Sorry, you bet on the wrong horse, try to die quietly?

  29. JD Avatar
    JD

    @reid

    $100 in cuts is not drastic. The deficit sits at $1.6 trillion dollars. Will less government spending mean fewer government employees? Absolutely. Is not wanting to fire government workers a valid excuse for continuing to borrow $1.6 trillion annually? No.

    @mantis

    Which branches of the government were controlled by Dems when this happened? Was Obama’s veto pen out of ink?

  30. Alex Knapp Avatar
    Alex Knapp

    Steve,

    Both of those remove capital from the private sector where it is managed much more efficiently

    Hokum. First of all, I’ve worked in the private sector in many different companies. And if you think the private sector is “efficient” then I am the Queen of Romania.

    Second, explain to me how you have capital without a government to enforce laws, contracts, and property rights in the first place.

  31. reid Avatar
    reid

    SP: It’s not so funny if you understand that the government is fundamentally different from a business.

    Sorry, I’m not convinced that the benefits of keeping money in the hands of the private sector will offset massive layoffs. That sounds like fantasy thinking to me, especially since putting more people out of work will just reduce demand for products all the more.

    If I remember correctly, we’ve been out of recession for awhile, and the economy is actually growing at a decent (not great) rate. I suspect neither you nor I really knows how much credit for turning things around should be given to government stimulus spending, despite your confident proclamations that it did nothing. I’m probably asking too much for unbiased, quantitative support for these positions, but repeating dogma isn’t going to change anyone’s mind.

  32. JD Avatar
    JD

    @wr

    You argue from bad faith. If banks committed crimes, put the managers on trial. If people but all their eggs in one basket and lose it all, choose something with less risk next time. I want to allow an 18-35 year old to put money away into index funds (out of the government’s hands) so when they turn 65, they’ll have a sizable retirement to call their own. Has the market ever ended lower over a 30-45 year period?

    p.s. Social Security is on a pace to end itself. Sorry, America. – Politicians

  33. reid Avatar
    reid

    JD: I can’t argue that $100 is a drastic cut! Assuming you meant $100B, though, then that is getting to be a large part of the budget. Proponents usually talk about shutting down entire departments (that they happen to dislike on ideological grounds, of course), so we’re talking large numbers of people affected. Surely someone suggesting this plan has thought about it and could tell me how many people would be affected?

    “Not wanting to fire government workers” is a heck of a loaded phrase. In any case, if doing so means sending the economy into a depression, then yeah, I think it’s something we shouldn’t do.

  34. mantis Avatar
    mantis

    Which branches of the government were controlled by Dems when this happened? Was Obama’s veto pen out of ink?

    Here’s what you wrote:

    If this is true, why did Obama and the Democrats refuse to let the Bush tax cuts expire?

    They didn’t refuse. That’s what they wanted (most of them, anyway). They compromised with the Republicans so they could get something done. Your characterization of events was a lie. You can try to wriggle out of it if you like by pretending not to understand how the Senate works, but that’s less than convincing.

  35. Herb Avatar
    Herb

    “Will less government spending mean fewer government employees? Absolutely.”

    Ah, but if you think fewer government employees means less government spending, let me introduce you to Raytheon, GeoGroup, Haliburton, etc.

    Likewise, the federal payroll is a very SMALL piece of that $1.6 trillion annual budget.

    “I want to allow an 18-35 year old to put money away into index funds (out of the government’s hands) so when they turn 65, they’ll have a sizable retirement to call their own. ”

    They’re not allowed to now?

  36. Brummagem Joe Avatar
    Brummagem Joe

    It is completely insane but then you have economic illiterates making statements like thiis completely oblivious of the public demand for spending or the overall state of the economy.

    “Deficits by definition are caused by spending more than you take in. The insanity is the spending which is higher than any time in history.”

    A pound weighs more than an ounce…so what?

  37. JD Avatar
    JD

    @reid

    If letting go of some sort of “critical mass” of government workers can cause a depression, it’s not a stretch to say that your government is entirely too big. I don’t think firing 1/3rd of all non-military government employees would do this but I don’t know how many people that is off the top (or bottom) of my head.

    @mantis

    They compromised with the Republicans because doing nothing would have caused the tax cuts to expire. Having them expire, per Alex’s 12:40 post point #2 would have had no effect on economic growth. My contention was that that wasn’t correct – otherwise there wouldn’t have been the action taken to make sure the tax cuts stay intact.

  38. wr Avatar
    wr

    JD — I’m not arguing from bad faith. I’m arguing from the real world, not from some fantasyland libertarian paradise.

    The banks committed fraud. The ratings agencies colluded with them. And none of them will ever be put on trial because they’ve got enough money to buy “justice” for themselves.

    As has happened in Ireland, where the financial elite and the political elite all work together to protect themselves and each other.

    But that could never happen, because markets are perfect, right?

    What’s the weather like in Galt’s Gulch?

  39. Brummagem Joe Avatar
    Brummagem Joe

    Steven Plunk says:
    Tuesday, February 22, 2011 at 13:42
    “Government spending is financed by two mechanisms, taxes revenues and borrowing. Both of those remove capital from the private sector where it is managed much more efficiently. ”

    Does Steven Plunk know that US corporations are sitting on the greatest cash pile in their history? Does Steven Plunk know that vast amounts of cash are parked in US debt because it’s perceived to be safer and offer a better return relative to risk? Probably not but then it wouldn’t make a blind bit of difference to his thinking because he hasn’t the remotest idea of what he’s talking about.

  40. Brummagem Joe Avatar
    Brummagem Joe

    JD says:
    Tuesday, February 22, 2011 at 14:09
    “I don’t think firing 1/3rd of all non-military government employees would do this but I don’t know how many people that is off the top (or bottom) of my head.”

    I’ve no ideas what the numbers or costs would be but I know what the outcome would be. Who would employ this man in any position of responsibility one wonders? The Republican approach to govt.

  41. JD Avatar
    JD

    @Herb

    Sure they can… on their own. And they should on their own because SS in its current form won’t be there when they retire. They will get less than they put in if anything.

    But of course you know I meant to allow that instead of the government taking 10.4% of their check and spending the entire 10.4% and borrowing an additional 4.6% now, putting an IOU into the “Trust Fund” and telling me everything is fine.

  42. reid Avatar
    reid

    “If letting go of some sort of “critical mass” of government workers can cause a depression, it’s not a stretch to say that your government is entirely too big.”

    That’s debatable. For one thing, we already have a weak economy. particularly in terms of unemployment and demand. It’s pretty easy to imagine how adding large numbers of unemployed under those conditions could cause a severe problem.

    Second, of course the government is big and employs a lot of people. It’s kind of crazy to assume anything from the sudden firing of large numbers of them. If a large company goes out of business, it wreaks havoc on the local economy, but it doesn’t necessarily mean companies shouldn’t get that big.

  43. reid Avatar
    reid

    JD, I appreciate you sticking around to discuss things. I hope Doug at least thinks twice before parroting the party line that “bigger cuts are better”. Or he’s welcome to explain to me why that’s the case, addressing the concerns I’ve brought up.

  44. reid Avatar
    reid

    BJ: Conservatives do seem to have an unerring belief in their absolute correctness that blinds them to risks and alternatives. See Bush/Iraq for another example.

  45. Herb Avatar
    Herb

    “I meant to allow that instead of the government taking 10.4% of their check and spending the entire 10.4%…..”

    No doubt…but here’s the problem with that: Most 18-35 year olds don’t save for retirement….period.

    They don’t do it now when they can do it and get SS later in life, but we’re going to take SS out of the equation and suddenly they’ll smarten up? No, they won’t. If having access to more funds later doesn’t provide enough incentive, then having access to less won’t either.

  46. mantis Avatar
    mantis

    They compromised with the Republicans

    There you go then. Thank you for admitting to your earlier lie. The Democrats and Obama did not refuse to let the tax cuts expire. They wanted the tax cuts for highest earners to expire, but the Republicans refused, and the Democrats compromised with them.

  47. Rob in CT Avatar
    Rob in CT

    Doug brings up FICA taxes. Doug, are you unaware that FICA was cut this year (FY2011)? Instead of paying 6.2% towards SS, employees pay 4.2% this year.

    Tax cuts! The cause of and solution to all of our problems (Simpsons reference, in case anybody thinks I’m serious).

    The difference between revenues in 2007 and now is roughly $400B, last I looked. That suggests that economic recovery can close 1/4th of the gap. That leaves a deficit of $1.2T. I say $400B in military cuts, $400B in “butter” cuts and $400B in tax increases.

    Even that isn’t enough, because what we need to do (medium-term) is run some surplusses and get the debt service costs down.

  48. JD Avatar
    JD

    @Rob

    I could probably get behind $800 billion in tax cuts and $400 billion in tax increases. But I don’t think you can get there from military and “butter” (discretionary). Cuts that large lie in entitlement reform.

  49. charles austin Avatar
    charles austin

    Alex, because rates are lower or because the economy is tanking? Your seem to be purposeully trying to use relative tax revenue numbers to make a point about absolute tax rates.

    Too clever by half.

  50. charles austin Avatar
    charles austin

    Since Bill Clinton left office federal spending is up 70% and yet you continue to claim that the problem is that we aren’t paying enough taxes.

    Sorry to keep bringing this up.

  51. An Interested Party Avatar
    An Interested Party

    We are constantly told by certain people that tax increases will hurt the economy as well as all those people whose taxes are raised…yet these same people are arguing to cut, cut, cut the budget…why won’t such cuts not also hurt the economy as well as the people who lose the services and benefits that would be lost from those cuts? I ask this question as someone who realizes that the budget is only going to be balanced with a combination of tax increases and spending cuts, but too many people seem to live in a fantasy world where only one or the other will seemingly work…

  52. charles austin Avatar
    charles austin

    Sorry about the typo in the first post. Insert an f before the u to get purposefully.

    And no, it wasn’t planned nor I mean it to be as insulting as it reads.

  53. charles austin Avatar
    charles austin

    Sorry, but I can’t get over the headline. Taxes lower than ever? Really? Ever?

  54. Alex Knapp Avatar
    Alex Knapp

    @Charles – On a federal level, the overall effective tax rate is at its lowest point since 1950.

  55. Alex Knapp Avatar
    Alex Knapp

    @Charles –

    Re: Clinton’s spending.

    I would be happy to go back in time and stop the Iraq War, Medicare Part D, and the Bush tax cuts.

    However, the Republican Party is dead set against reducing funding for any of these three. They control the House, and they put these policies into motion.

  56. charles austin Avatar
    charles austin

    I appreciate the qualifier “overall” in your statement. I’m guessing my tax rate wouldn’t have been lower in 1950, but then again, how dare I complain I guess.

  57. charles austin Avatar
    charles austin

    Oh and the Bush tax cuts expired last year. They are now the Obama tax cuts.

  58. mantis Avatar
    mantis

    They are now the Obama tax cuts.

    So you’ll praise the president for his tax cuts, then?

  59. Brummagem Joe Avatar
    Brummagem Joe

    reid says:
    Tuesday, February 22, 2011 at 14:39
    “BJ: Conservatives do seem to have an unerring belief in their absolute correctness that blinds them to risks and alternatives.”

    Well that’s because they’ve largely lost the ability to reason. Probably because as someone said reality has a liberal bias so coming up with workable solutions is kinda tough. It’s truly astounding to me how they are able to separate out one factoid as if it was in a vacuum and keep repeating it as if all these things aren’t a) connected b) enormously complex . They simply have a problem dealing with the real world and its complexities. I wouldn’t employ these guys to run a pretzel stand on Broadway if they applied the same level of reasoning to the process. They wouldn’t of course. They keep the blind inanity for the propagation of their political faith as if the normal rules of life don’t apply.

  60. steve Avatar
    steve

    ” Cuts that large lie in entitlement reform.”

    Our long term debt is largely with medical care, which really means Medicare. Cut everything else to zero, assume that magic ponies keep the country running, and we still go broke. That is why Rand Paul’s proposal was BS. If you do not address Medicare, you are not addressing the long term debt.

    There are several ways to address Social Security. I would suggest means testing until age 70. Also since it was set up to be funded with taxes from 90% of income, adjust it up. We have become much more a two tiered society. If so much of our income is going to be tied up in the hands of so few people, we need a way to make things work acknowledging that change.

    Steve

  61. MBunge Avatar
    MBunge

    “Since Bill Clinton left office federal spending is up 70%”

    Let me see if I can put this in a way that even the most Pavlovian conservative can understand.

    1. Spending needs to be reduced.

    2. Taxes need to be increased.

    3. If you obsessively focus on 1 and stupidly refuse to even consider 2, you are forced to argue for spending cuts that are so massive and draconian that they are political impossible to achieve.

    Mike

  62. Steven Plunk Avatar
    Steven Plunk

    MBunge,  I see your point but taxpayers don't trust the government to actually make that deal and stick to it.  Maybe if they cut first and held the line some of that trust would be restored.
     
    Alex,  We have a difference of opinion on who manages money more efficiently but everytime I hear the phrase "public-private" partnership is the public sector crowing it to give it the air of a well managed project.  The stereotype of government inefficiancy didn't materialize from nowhere.  It's well deserved and accurate.
     
    BJ,  Your facts are immaterial to the argument and I know what I'm talking about.  Do better my friend, I know you have it in you.

  63. MBunge Avatar
    MBunge

    "MBunge,  I see your point but taxpayers don't trust the government to actually make that deal and stick to it"
    There's plenty of polling data that shows the public could and would support some tax increases.  For example, I'm pretty sure the majority favored allowing the Bush tax cuts for those making over $200,000 to expire.
    Mike

  64. Brummagem Joe Avatar
    Brummagem Joe

    BJ,  Your facts are immaterial to the argument and I know what I'm talking about. 
    On the basis of the evidence you presented I'd say not. Rather silly vicarious comments don't really count as knowledge. 

  65. charles austin Avatar
    charles austin

    Alex, sure, I think we'd all be happy to go back to September 10th, 2001, but that's not an option now is it.  Let's not forget that Democrats insisted on yet another vote to demonstrate that they wanted to go to war too.
    mantis, as I have noted before, no one does everything wrong.  I think extending the tax cuts was a much better use of the money than say, another failed stimulus package or, say, a high speed rail line for cough, cough, $53B, but what do I know?
     

  66. charles austin Avatar
    charles austin

    Spending cuts so massive and draconian that, um, Bill Clinton managed to get by on quite nicely.  Sorry, perhaps something got lost in translation.  Not that much has changed in eleven years that required a 70% F*CKING INCREASE IN SPENDING.
    Sorry to yell, but jumpin' bejeebus, just how draconian was it in 1999?

  67. An Interested Party Avatar
    An Interested Party

    "Not that much has changed in eleven years that required a 70% F*CKING INCREASE IN SPENDING.
     
    I'd be curious to know how much of that spending is related to the "War on Terror" and medical costs…of course, anything related to the former would be where we are after September 10, 2001, eh?  As for the latter, how do we cut medical costs?  Without instituting death panels, that is…

  68. Matt B Avatar
    Matt B

    @Brummagen

    Probably because as someone said reality has a liberal bias so coming up with workable solutions is kinda tough.

    That phrase is a pet peeve of mine… Reality/Facts tends to have a non ideological bias — I've heard enough liberals play fast and loose with the facts as well. And this isn't a false equivilance, though Conservative Media does, more often than not, make it an issue of scale.
    @Steve P

    The stereotype of government inefficiancy didn't materialize from nowhere.  It's well deserved and accurate.

    I'd hope you then agree that "Corporate Greed and Waste" and "Profit over people"  are other stereotypes that didn't emerge from nowhere either. Having worked almost ten years in the private sector, most of that time inside of a corporation, I can cite chapter and verse on that before I even have to get to the all too public cases of this.
    This of course doesn't cancel out your arguement, but rather suggests that both sides in this agreement are not angels. Acknowledging the problems of one without confronting the issues with the other is a fundamental act of ideology over reality — see above.

  69. An Interested Party Avatar
    An Interested Party

    "This of course doesn't cancel out your arguement, but rather suggests that both sides in this agreement are not angels. Acknowledging the problems of one without confronting the issues with the other is a fundamental act of ideology over reality — see above."
    Exactly right…although government does have its defenders around here, no one is claiming that it isn't flawed and contains its own set of issues…but far too often, many of those who complain about government and champion the private sector fail to realize that both arenas have their problems…

  70. charles austin Avatar
    charles austin

    I have stated repeatedly that I don't think there is a good answer to the escalation in health care costs.  Either we, as you like to say, let people die or we spend like you want and go bankrupt at which point people start dying anyway, but I guess we'll feel better about it then since there won't be as many rich bastards left, or any middle class.  There are no magic solutions.

  71. Brummagem Joe Avatar
    Brummagem Joe

    Matt B says:

    Tuesday, February 22, 2011 at 20:12

    " because as someone said reality has a liberal bias so coming up with workable solutions is kinda tough."
    "That phrase is a pet peeve of mine… Reality/Facts tends to have a non ideological bias"
    Well of course they do, that was rather the point of the aphorism. And of course at times both sides tend to bend the truth a bit but with Republicans it's most of the time and often they even deny the truth. I was long a sort of desultory Republican but when people start losing touch with reality on issues from invading countries to economic management I jumped ship.       —

  72. Brummagem Joe Avatar
    Brummagem Joe

    charles austin says:
    Tuesday, February 22, 2011 at 20:43
    "I have stated repeatedly that I don't think there is a good answer to the escalation in health care costs.  Either we, as you like to say, let people die or we spend like you want and go bankrupt"
     
    There is a very straightforward answer. Bring our costs of healthcare provision in line with our peer group of societies from Japan to Sweden who are able to provide uniiversal access at half our cost in GDP. If we did this our long term Medicare funding problems would largely disappear. But Republicans aren't interested in this they just want to restrict and drive up the cost of care to consumers.   

  73. charles austin Avatar
    charles austin

    B Joe., trying to compare Sweden or Japan in these matters to the US is not possible.  First of all, the US has acheived a level of diversity on many levels that doesn't in those countries.  Secondly, and here I'll limit my comments to Japan as I am much more familiar with the situation there — having a Japanese mother-in-law after all, they have an even worse problem than we do with an impending demographic nightmare of an aging population, and an economy about to collapse due to deficit spending.  You're going to have to find a better example for the US to emulate.

  74. Matt B Avatar
    Matt B

    @B Joe

    with Republicans it's most of the time and often they even deny the truth.

    Joe, again, I would say with Conservative Inc, that's most often the case. Look I'm a lapsed Republican too, and I know seem like I'm splitting hairs here. But I can also rattle off the Liberal/Dems who've told whoppers. Not surprisingly, the closer one gets to punditry the more this seems to happen.
    I will say, that in general, folks accused of "left" bias here at OTB, deal much better with facts (vs truths) and open arguing than the folks making those accusations 

  75. Brummagem Joe Avatar
    Brummagem Joe

    CA:I took just Japan and Sweden because they are on opposite sides of the world as illustrative and you obviously missed the bit where I said "peer goup" which means every westernized industrial society. Without exception they are able to provide universal access to healthcare at half the cost we do. Most of these socieities have similar problems with an aging population but in fac the US has the immense advantage of much higher birthrates. I don't know what much higher diversity means in this context, in most essentials we're exactly the same. There's no sound economic or social reason why our costs should be twice as high. The fact they are is entirely political, a state of affairs you're trying to rationalize.

  76. Alex Knapp Avatar
    Alex Knapp

    Charles –

    What on Earth does diversity have to do with health care costs?

  77. Brummagem Joe Avatar
    Brummagem Joe

    Matt B: I thought I'd acknowledged Democratics shaded the truth from time to time. The problem with the Republicans of today is its reached epidemic proportions and is culturally reinforced by wholesale denunciations of elitists, higher education, science, legality, teachers, government bodies like EPA,  etc etc. Ultimately its deeply retrogressive and doesn't provide a sensible foundation for effective governance (as perhaps Boehner is currently finding out). Apart from a bit of mild humor I personally always try to underpin any comments I make here with some facts and logic (in fact I'm anal about it) but they're largely disregarded by conservative. Even people like JJ whose obviously a bright guy continually seeks refuge in obfuscation.       

  78. Brummagem Joe Avatar
    Brummagem Joe

    AK: diversity or ethnicity which is what CA is driving at has perhap has a bit of relevance but it's marginal. The reason healthcare in the US is so costly is because of how we organize it's funding and even more important the cost of delivery. To give an example using Japan since CA's outlaws come from there…in Japan the govt pays providers $100 for a cat scan… In the US Medicare and insurance companies pay around $1000. 

  79. reid Avatar
    reid

    charles austin: Please prove that the stimulus "failed".  I think i saw a reference to a NYT article that showed that the US weathered the economic downturn better than other countries that went the austerity route, such as England.  This is another one of those conservative reality-denying memes, I'm afraid.

  80. reid Avatar
    reid

    BJ: Well stated, that conservatives today are less interested in pragmatic solutions and more interested in pushing an ideological agenda whether it actually solves problems or not.  It too often is at odds with reality (see Steve P's matter-of-fact claim that the public doesn't support the WI protesters) and is all about attacking the other team.

  81. Brummagem Joe Avatar
    Brummagem Joe

    reid: presumably Plunk was quoting the ridiculous well poisoning poll from Rasmussen. The questionaire is a joke if you've seen it. On the other hand there are two polls up (one in WI and the other a national USA Today/Gallup)  both showing oppositon to removal of workers bargaining rights in the low sixties. Walker has already lost the PR battle.
    The NYT article you refer to is by David Leonhardt their highly respected economics writer. He looks at Germany (mild austerity but had a program to keep workers in jobs), the UK (severe austerity) and the US (stimulus). Both Germany and the UK have not returned to pre recession GDP, whereas the US has, and the UK looks headed into a double dip recession. Any questions? The problem is mindless conservatives like CA and Plunk aren't interested in empirical evidence because it's reality not their version of it.   

  82. reid Avatar
    reid

    BJ: Yes, I'm sure that Ras poll is what Plunk was referring to.  When it's pointed out that he's very selective in propping up his alternate reality, he gets indignant and defensive.  Too bad, because he does seem quite civil.
    Thanks for the info on the NYT article.  Since the evidence conflicts with the conservative agenda, I'm sure the author will be ridiculed and called an elitist spendy liberal a la Krugman.  It's frustrating that this "stimulus failed" meme has taken such hold.  I'm afraid we'll all suffer as a result.

  83. charles austin Avatar
    charles austin

    BJ – Uh, no.  The reason our halth care costs are so much higher has a lot to do with our standard of living being higher and that we mostly choose to spend a lot of that money on healthcare, sometimes because of bad incentives, but that's another story.  The US has the best healthcare in the world, and you completely bypass the free rider problem that the rest of the world gets with US research by for profit companies.  I'm afraid that you endanger that with the various schemes put forward to date to provide health care for all that necessarily require flattening the top and rationing care by need rather than price, especially as it relates to new inventions and medications.  You also need to factor in that the US still has a greater allegiance to freedom that most places, and sometimes freedom means people make bad choices.  I also know that many believe health care is somehow different than other things people buy and that makes it immune to the fundamental laws of economics.  I disagree.  It really is a philosophical difference, but if you are more comfortable saying "I cant' handle the truth!", to terminate discussion —note: truth, not facts — well, not much more I can add.  Is calling me a mindless conservative meant to further discussion or perhaps convince me somehow of the wisdom and thoughtfulness of your position?  Can you accept that someone might have different foundational assumptions and is arguing from those in good faith or is every disagreement about the other person being stupid, malevolent, or both?
     
    Alex, sorry but I lost the context or your question.
     
    reid, well, no.  I think the burden is on those who want to say the Stimulus worked, and quoting an article from the sycophants at the NY Times as proving it doesn't cut it any more than Obama saying it has saved or created 2 million jobs.  What utter horsehit.  I don't see it and think more deficit borrowing to support it was nuts.  Sadly there isn't any reliable way to measure it, so we'll just have to agree to disagree.  Incidentally, the economic authorities in Germany recently published something that said that their research has the fabled Keynesian multiplier at 0.6 rather than at 1.6 as the administration claims.  If that's true than 40% of every stiimulus dollar might as well be rolled up and used to light the cigars all of Tim Geithner's friends are smoking these days.  I also have never got a reasonable answer to what the divisor is, after all that money had to come from somewhere, even if it is the ether.  You might want to check out how well Germany's economy is doing if you want to look at Europe.  They explicitly rejected the Stimulus apporach.  Your use of England as an example is rather hollow as the change in their government happened less than a year ago.  I'll happily give up the "stimulus failed meme" when it succeeds or when Keynesianism is fully discredited in polite company, whichever comes first.  A philosophy partially predicated on "in the long run we're all dead" doesn't instill a sense of bedrock stability to me.  But I digress.

  84. reid Avatar
    reid

    "sycophants at the NY Times"?  That's really lame, charles.  The burden of proof is on anyone that wants to make any kind of claim, whether it's a failure or success.  For you to just cavalierly state that it failed is just as ridiculous as if I claimed it was a rousing success.  At least an expert at the NYT has attempted to analyze things and conclude that it worked to a degree, but since he works for the NYT, I guess it's rendered null and void.  Now that's horseshit.

  85. charles austin Avatar
    charles austin

    reid,  Read it again.  I said if that's your standard of proof, it's pretty weak.  I don't think I claimed that being in the NY Times automatically invalidates anything, though I have no problem whatsoever with claiming the NY Times can't help itself when it comes to making Obama look good.  Obama took the money to spend on the Stimulus.  It goddamned well is his responsibility to prove it was a worthwhile "investment" by doing more than making fatuous claims and jobs created and saved.

  86. reid Avatar
    reid

    charles: Your clear implication was that anything published at the NYT was biased (and you still are with the Obama-fluffing remark). Are you not saying that now? Because an article by an expert there concluding that the stimulus helped is going to carry a lot more weight than some obviously partisan blog commenter insisting it was a failure. As I said, it’s also your responsibility to explain why it was a failure if you’re going to make that claim. At least I’m keeping an open mind. I suspect nothing Obama could say would convince you it was worthwhile.

  87. charles austin Avatar
    charles austin

    reid, with all due respect, stop trying to project what you think your opponents think onto what I write. I try to to be clear and not depend on the wink of an eye or the necessity to read between the lines. If I want to insult somebody, I’ll just come out and do it, not leave you wondering if that’s what I really meant. As to the veracity of an article in the NY Times, well, you can find an expert to say anything, absolutely anything, so I take the “news” as narrative these days, whatever the source. I admittedly have no respect for the Gray Lady as an objective news source any more than you believe Fox News is an objective news source. Are you going to tell me that the NY Times doesn’t have a worldview that is perhaps a little more in line with Barack Obama than, say, Governor Christie or Governor Walker, or that it doesn’t color their reporting of “news?”

    I will claim the Stimulus Package is a failure because you (and others) seem to have nothing to offer in its support other than the mealy-mouthed and utterly ridiculous “jobs created and saved..,” or “an expert quoted in the NY Times says…”. I mean if there were real identifiable proof, it shouldn’t be that hard to come up with, should it? And given that every single dime was defecit spending when the deficit is already at catastrophic proportions, you better have a damn good reason and demonstrable, measureable metrics to spend another $800B plus the annual interest payments as far as the eye can see.

  88. mantis Avatar
    mantis

    You might want to check out how well Germany’s economy is doing if you want to look at Europe. They explicitly rejected the Stimulus apporach.

    That was the whole point, genius:

    Remember the German economic boom of 2010?

    Germany’s economic growth surged in the middle of last year, causing commentators both there and here to proclaim that American stimulus had failed and German austerity had worked. Germany’s announced budget cuts, the commentators said, had given private companies enough confidence in the government to begin spending their own money again.

    Well, it turns out the German boom didn’t last long. With its modest stimulus winding down, Germany’s growth slowed sharply late last year, and its economic output still has not recovered to its prerecession peak. Output in the United States — where the stimulus program has been bigger and longer lasting — has recovered. This country would now need to suffer through a double-dip recession for its gross domestic product to be in the same condition as Germany’s.

    Don’t you wingnuts ever get tired of being wrong? About everything?

  89. mantis Avatar
    mantis

    As to the veracity of an article in the NY Times, well, you can find an expert to say anything, absolutely anything, so I take the “news” as narrative these days, whatever the source.

    Are you saying that the NYTimes is making up Germany’s GDP stats? Prove it, wingnut.

  90. reid Avatar
    reid

    charles: With all due respect, that was just a lot more horseshit, so I’m done. See mantis’s replies if you have any interest in looking at the issue with an open mind.

  91. reid Avatar
    reid

    By the way, it’s pretty sad that Fox and other “news” sources have so tainted the journalism profession that you and lots of others just assume it’s all driven by an agenda. I understand that you’re eager to believe it and want to think organizations like the NYT are just the “Fox of the left”, but it ain’t true.

  92. charles austin Avatar
    charles austin

    Yes, I am always wrong. Perhaps I should offer stock tips for you. Here’s one: GE. Make the most of it.

    Output in the US has recovered? Really? Guess I missed the talking points memo. I’d like to read the article and comment but I don’t have a login to the NY Times. Their “news” is too precious for me.

    Ha, the objective “news” was tainted beyond repair before Fox News ever existed. I swear, the genes for projection must be in your DNA.

  93. anjin-san Avatar
    anjin-san

    > Output in the US has recovered? Really? Guess I missed the talking points memo

    GDP is at pre-sept 2008 levels. What standard are you using to measure output?

  94. Brummagem Joe Avatar
    Brummagem Joe

    charles austin says:
    Wednesday, February 23, 2011 at 13:04
    ‘BJ – Uh, no. The reason our halth care costs are so much higher has a lot to do with our standard of living being higher’

    Our standard of living is higher than Switzerland or Germany? Unfortunately your ignorance is so vast there’s no cure. I got new for you our standard of living is not higher, it’s about the same as Germany and lower than Switzerland Even it were true our standard of living would have to be twice that of Germany to justify a health bill twice as large.

    ” I said if that’s your standard of proof, it’s pretty weak. I don’t think I claimed that being in the NY Times automatically invalidates anything, ”

    The NYT didn’t make up these numbers in the local bar last night, they’re drawn from the official stats for the US, Germany and Britain.

    CA you would probably benefit from a year’s visits to Berggasse 19 but your health insurance probably wouldn’t pay for it

  95. charles austin Avatar
    charles austin

    Sorry for the typos, I should have said “a reason”, not “the reason.” Got any suggestions on what we do to get the homogeneity and density that Germany and Switzerland have? Hmm…, better not answer that one. Or perhaps you have some other statistic you’d like to offer and infer that everything else doesn’t matter.

    FWIW BJ, the insulting personal things you are making up about me are more wrong than you can imagine. But I’m the one making shit up. Got it.

  96. Alex Knapp Avatar
    Alex Knapp

    Charles,

    Sorry for the typos, I should have said “a reason”, not “the reason.” Got any suggestions on what we do to get the homogeneity and density that Germany and Switzerland have?

    What’s the relevance of either of these when it comes to health care costs?

    For what it’s worth, though, both Switzerland has a higher foreign-born population than the United States, as a percentage of population. 20.56% to the United States’ 13.4%. Germany’s proportion is slightly smaller at 9%, although they have a higher percentage of citizens born of at least one foreign-born parent than the United States does.

    As for density, you’re dealing with a significant difficulty in comparison, as vast portions of the United States are unpopulated, especially in Alaska and the west. However, one thing we CAN compare is the number of doctors per 1,000 people in all three countries — which is a better comparison than population density, anyway. Switzerland has 3.6 doctors per person. Germany 3.4. America 2.4. Now that probably has something to do with health care costs for sure. For nurses, it’s Swiss – 10.7, Germans – 9.6, United States – 8.8.

    Now, does the access to doctors affect health care prices? Almost certainly! However, given that something like 20-30% of the population in the United is uninsured, the difference isn’t nearly enough to account for the U.S. health costs’ being almost doubled.

    One big reason that we have fewer doctors is that unlike Switzerland or Germany, we don’t have 1 licensing regime. We have 50! Which is why I advocate both centralizing and liberalizing physician licensing. We also need to get more medical students into med school to get them practicing and accelerate the licensure of immigrant doctors.

    But that won’t close the gap all the way.

  97. charles austin Avatar
    charles austin

    Alex, I agree, though I’m not sure we are talking about the same things.

    Considering the US’ long hostory of immigration, I’m not sure those stats are meaningful, and do they include illegal imigrants? Hmm…, do they speak Austrian in Switzerland? I still think you have to be careful about these kinds of comparisons for lots of reasons discussed previously.

    I’m all for what we can do to break the monopolies, but I’m not sure I want to chuck federalism so readily.

  98. Rob in CT Avatar
    Rob in CT

    “I could probably get behind $800 billion in tax [I presume you mean spending] cuts and $400 billion in tax increases. But I don’t think you can get there from military and “butter” (discretionary). Cuts that large lie in entitlement reform.”

    Well obviously. If you exempt Medicare (that’s where nearly all of the future problem is), you’re dodging THE issue. Which pretty much everyone is (though I for one think the ACA will help a little bit). Apparently we can’t manage to mimic the health systems of so many of our fellow Western countries who provide roughly similar (not identical, of course) healthcare to their citizens at something like 1/2 to 2/3 of the cost (by % of GDP). Because that means grandma dies or somesuch.

    And obviously we’re not going to get $400B in military cuts. Such an idea is, sadly, “beyond the Pale.” It’s politically impossible (like many other sane things).

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