What Is Obama's Long-Term Plan to Rival the Romney/Ryan Plan?

[ajb]

David Stockman, former Reagan-era director of the OMB, says what I've been saying about the Ryan "plan":

The Ryan Plan boils down to a fetish for cutting the top marginal income-tax rate for “job creators” — i.e. the superwealthy — to 25 percent and paying for it with an as-yet-undisclosed plan to broaden the tax base. Of the $1 trillion in so-called tax expenditures that the plan would attack, the vast majority would come from slashing popular tax breaks for employer-provided health insurance, mortgage interest, 401(k) accounts, state and local taxes, charitable giving and the like, not to mention low rates on capital gains and dividends. The crony capitalists of K Street already own more than enough Republican votes to stop that train before it leaves the station.

In short, Mr. Ryan’s plan is devoid of credible math or hard policy choices.

http://www.nytimes.com/2012/08/14/opinion/paul-ryans-fairy-tale-budget-plan.html?_r=3

[Politico]

http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2011.png

http://www.usgovernmentspending.com/state_spend_gdp_population

Just a little though-experiment here.  In the 2011 federal budget, non-military discretionary spending stood at $646 billion.

The special interests-driven federal budget of Barack Obama is of no interest to Americans who care about limited government. It is certainly not a representative baseline. An appropriate, bipartisan baseline would be the 1996 federal budget of Democrat Bill "the era of Big Government is over" Clinton. Non-defense discretionary spending for FY 1996 was approximately $250 billion, which is approximately $370 billion in 2012 dollars. In other words, we have evidence that the 2011 federal budget is approximately $280 billion of junk that can be eliminated overnight without the world coming to an end, even for social programs and the like (1996 conditions were not the Great Depression; if you don't believe me because you are too young to remember, go check out the election results for 1996).

$370 billion is a hefty amount of money, but it is only about 2.5% of GDP. Surely by shifting this spending back to the state level some states will choose to raise taxes to pay for this spending while others will not. For example, California will surely continue funding the Single Room Occupancy program while Wyoming will probably decide not to, to give an obvious example. In the process, California will do a better job of providing for this program than currently because there is greater accountability when funding comes at the state and local levels as opposed to the federal level. Similarly, the people of Wyoming will no longer be subsidizing a program that they feel they do not need. We cut the middle man out of the picture (i.e., the out-of-touch Washington bureaucrats are reassigned or return to the real world). States that want certain programs they are willing to pay for get what they want and ensure efficiency and a lack of waste. States that just want government out of the way also get what they want. Ultimately, the nation is better off on the whole. Accountability and efficiency are increased on the whole. The nation's fiscal health is restored, since states must balance their budget, and the federal government is able to indefinitely meet its obligations towards Medicare, Social Security, law/order, defense and basic infrastructure after engaging in further restructuring.

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The fact of the matter is that most of the non-defense discretionary spending at the federal level is unwanted by the smaller states. For example, the Dakotas are well-off right now and government intervention has nothing to do with it. They will be voting Republican because they are in favor of limited government, not Obama's special interests.

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California would have to adopt a more realistic property tax scheme, or stop voting for out-of-touch liberals. That's California's problem, not the 49 other states. I would bank on California reverting back towards the way it used to be before the economic liberals ran amok.

 

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Go tell the people of Utah, South Dakota, etc. that the Big Government Way of California is going to lead to prosperity, and watch them laugh in your face. Go tell them that the only reason they can even afford a Greyhound ticket is because of bureaucrats in Washington, DC. There's a reason why most small states vote Republican.

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At least I am offering an alternative to kicking the can down the road. Surely I am not the only one who recognizes that unaffordable promises eventually become broken promises. Unaffordable is unaffordable, and all of the borrowing and accounting gimmicks in the world cannot prevent an unaffordable house of cards from eventually collapsing.

Yes, we need to assist people in need who want to help themselves but are unable to do so at the present for whatever reason(s). Most of our fellow citizens are decent people who will help those in need if we start to see a rise in poverty (either through increased state spending/taxation or charitable activities). But good, decent, hard-working people are not interested in subsidizing those who do not want to help themselves. The free ride is over.

I am extremely confident that this proposal will not lead to an increase in misery. It will produce greater economic freedom, and a stronger degree of accountability and responsibility both at the micro and macro level. No longer will true despair be shrugged off as "the federal government's job," and the level of feigned despair will decline.

[Politico]

David Stockman, former Reagan-era director of the OMB, says what I've been saying about the Ryan "plan":

The Ryan Plan boils down to a fetish for cutting the top marginal income-tax rate for “job creators” — i.e. the superwealthy — to 25 percent and paying for it with an as-yet-undisclosed plan to broaden the tax base. Of the $1 trillion in so-called tax expenditures that the plan would attack, the vast majority would come from slashing popular tax breaks for employer-provided health insurance, mortgage interest, 401(k) accounts, state and local taxes, charitable giving and the like, not to mention low rates on capital gains and dividends. The crony capitalists of K Street already own more than enough Republican votes to stop that train before it leaves the station.

In short, Mr. Ryan’s plan is devoid of credible math or hard policy choices.

http://www.nytimes.com/2012/08/14/opinion/paul-ryans-fairy-tale-budget-plan.html?_r=3

Romney's vision is a federal government that does not overstep its bounds. Romney is in favor of a fundamental restructuring of the federal government. He favors a government committed to meeting obligations towards Social Security, Medicare, national defense, law/order and some basic infrastructure. In other words, Romney will end the era of Big Government. Clinton promised the end of Big Government; Romney will deliver it.

[ajb]

David Stockman, former Reagan-era director of the OMB, says what I've been saying about the Ryan "plan":

The Ryan Plan boils down to a fetish for cutting the top marginal income-tax rate for “job creators” — i.e. the superwealthy — to 25 percent and paying for it with an as-yet-undisclosed plan to broaden the tax base. Of the $1 trillion in so-called tax expenditures that the plan would attack, the vast majority would come from slashing popular tax breaks for employer-provided health insurance, mortgage interest, 401(k) accounts, state and local taxes, charitable giving and the like, not to mention low rates on capital gains and dividends. The crony capitalists of K Street already own more than enough Republican votes to stop that train before it leaves the station.

In short, Mr. Ryan’s plan is devoid of credible math or hard policy choices.

http://www.nytimes.com/2012/08/14/opinion/paul-ryans-fairy-tale-budget-plan.html?_r=3

Romney's vision is a federal government that does not overstep its bounds. Romney is in favor of a fundamental restructuring of the federal government. He favors a government committed to meeting obligations towards Social Security, Medicare, national defense, law/order and some basic infrastructure. In other words, Romney will end the era of Big Government. Clinton promised the end of Big Government; Romney will deliver it.

He's not going to deliver it, or anything else, without some credible math. You clearly know that, or you'd respond more effectively.

[anvi]

Politico,

To use two states you give as examples of being willing to let discretionary dispersements from the feds go, in FY2012, South Dakota is faced a budget shortfall of $127 million, representing 11% of its budget, and Utah a $390 million shortfall, a little over 8% of its budget.  See the chart about halfway down this essay.

http://www.cbpp.org/cms/index.cfm?fa=view&id=711

In order to address its shortfall, South Dakota drastically cut funding for state schools and reimbursements to hospitals caring for the poor.  But this year, the state, with the Republican governor's blessing, decided to boost its spending back up to the tune of just under $4 billion to meet the needs that accrued from these rollbacks, and $1.75 billion (almost half) of that money was federal money, and a pretty big percentage of that, especially the money devoted to shoring up the schools, came from federal discretionary spending.

http://www.necn.com/03/16/12/Gov-Dennis-Daugaard-signs-4-billion-SD-b/landing.html?&apID=6011bfee347f4720aafa74427502b483

In the case of Utah, take a look at the state budget pie charts on page 5; note that, as indicated in the top chart, federal dollars make up 25.1% of the state budget, a larger share than any other source of revenue.  Then glance down at the bottom chart and note that the state's biggest budget item is public education.  Federal discretionary spending dollars make up a sizable portion of that spending, particularly since Utah has made a point to not fund public education through nearly as much bonding as other states.  

http://governor.utah.gov/budget/Budget/Budget%20Summaries/FY%202012_SumBk.pdf

If I was president, and I told governors and state legislators in South Dakota and Utah that very large chunks of federal discretionary dollars were going to abruptly disappear for good, they would do a lot things to my face, but laughing wouldn't be one of them.

[Politico]

Eliminating No Child Left Behind is key in those particular instances. It is a worthless Kennedy/Bush experiment that does far more harm than good.

 There is no doubt that federal discretionary spending is like a bad drug habit, especially the past decade. Eventually you kick your habit or it kicks you.