CBO to Obama: Your budget deficit numbers are off by 1.2 trillion

[Torie]

Yes, CBO says that the budget deficit under Obama's proposals would be with us for the rest of my lifetime, and 1.2 trillion higher over the next 10 years than Obama estimates. And that is before the CBO double count in scoring the health care bill, and assuming that 500 billion in medicare cuts comes to pass, which if it does, will cause me to suspend my disbelief in miracles.

All of this just isn't sustainable folks. Something is going to snap. It is just a matter of what, and when, and how.

[opebo]

All of this just isn't sustainable folks. Something is going to snap. It is just a matter of what, and when, and how.

Yes, they need to triple your taxes.  (I believe many of us have suggested this solution before on this forum)

[Torie]

All of this just isn't sustainable folks. Something is going to snap. It is just a matter of what, and when, and how.

Yes, they need to triple your taxes.  (I believe many of us have suggested this solution before on this forum)

That would get my average (yes average, not marginal) tax rate, above 100%.  

[Sam Spade]

You'll get no disagreement here.

[Lief 🗽]

-Raise taxes
-Cut military spending
-Institute strict medical price controls

Problem solved.

[Torie]

-Raise taxes
-Cut military spending
-Institute strict medical price controls

Problem solved.

Lief, do you think price controls will have any impact on the services provided over time?  I emphasize over time, because price controls take time to cause the economic actors involved, or who would have considered becoming involved, to change their behavior, if you get my drift.

Same with taxes, although the tipping points are subject to some disagreement of course. It would be nice if one could get more in your party interested in shutting  down a slew of more military bases, but pork is pork. The problem with the modern military, and cost,  is that all those high tech toys that help to keep the body count down, are hideously expensive. It is sort of like all those new medical technologies that keep being invented, that everyone of course wants, that are also astronomically expensive in so many instances.

[Lief 🗽]

If you look at the countries that have been able to keep healthcare costs under control, they've done it only through strict fee schedules, where the government decides and enforces a set cost for every single procedure and service. In Japan, for example, where the government has been most stringent in doing this, healthcare costs as a percentage of GDP have actually fallen in some recent years, staying more or less constant long-term. A similar system has been enacted in Maryland, and costs there have also stayed relatively stable in the past few decades.

[○∙◄☻¥tπ[╪AV┼cVê└]

Bush was off by more than that. There was supposed to be a $5.6 trillion surplus over the period 2001-2010. Instead, the national debt increased by around $7 trillion.

[Bo]

Bush was off by more than that. There was supposed to be a $5.6 trillion surplus over the period 2001-2010. Instead, the national debt increased by around $7 trillion.

The 2000 projections did not factor in a recession and jobless recovery in 2001 and 2003, which Bush could have done nothing about (not to mention the current recession). Also, 9/11 changed the dynamic of things.

[opebo]

All of this just isn't sustainable folks. Something is going to snap. It is just a matter of what, and when, and how.

Yes, they need to triple your taxes.  (I believe many of us have suggested this solution before on this forum)

That would get my average (yes average, not marginal) tax rate, above 100%.  

Well, I said 'triple your taxes', not triple your tax rate.

I'm wondering why you pay such an enormously high rate?  You do realize that the federal government can only increase your federal taxes, not state or local (to which I was not referring).  Anyway the top tax rate is only 35%, which I'm sure anyone with an understanding of economics would agree is extremely low.

[Obnoxiously Slutty Girly Girl]

All of this just isn't sustainable folks. Something is going to snap. It is just a matter of what, and when, and how.

Yes, they need to triple your taxes.  (I believe many of us have suggested this solution before on this forum)

Are you going to pay your share? Obama better go after foreign tax evaders like yourself.

[Torie]

All of this just isn't sustainable folks. Something is going to snap. It is just a matter of what, and when, and how.

Yes, they need to triple your taxes.  (I believe many of us have suggested this solution before on this forum)

That would get my average (yes average, not marginal) tax rate, above 100%.  

Well, I said 'triple your taxes', not triple your tax rate.

I'm wondering why you pay such an enormously high rate?  You do realize that the federal government can only increase your federal taxes, not state or local (to which I was not referring).  Anyway the top tax rate is only 35%, which I'm sure anyone with an understanding of economics would agree is extremely low.

You forgot 1) fica taxes, including the 2.9% bit that goes on forever, and 2) the phase out of itemized deductions.  Anyway, after opening up my 2008 return on turbo tax, I see that I paid 31% of my adjusted gross income in federal taxes, so if you triple that, the total take would be 93% of AGI. For 2009 the percentage will be higher.

[Beet]

Keep in mind, the CBO's record in predicting future budget numbers has been atrocious. In 1995 they were predicting deficits as far as the eye could see. In 2001 they were predicting surpluses as far as the eye could see. In a February 2006 report to Congress, the CBO stated, "the budget deficit totals $270 billion (2.0 percent of GDP) in 2007 and continues to fall thereafter, essentially reaching balance in 2012..."

That said, by far the most feasible first steps would be to allow the Bush tax cuts to expire, followed by a withdrawal of troops from Iraq and then Afghanistan.

[Conservative frontier]

Obama is a moron.

[muon2]

If you look at the countries that have been able to keep healthcare costs under control, they've done it only through strict fee schedules, where the government decides and enforces a set cost for every single procedure and service. In Japan, for example, where the government has been most stringent in doing this, healthcare costs as a percentage of GDP have actually fallen in some recent years, staying more or less constant long-term. A similar system has been enacted in Maryland, and costs there have also stayed relatively stable in the past few decades.

Maryland and Japan essentially treat hospitals and other health care providers like utilities. The key to regulating private utilities is a well understood model for local costs. That's why utilities like electricity have broadly regulated continental markets, then specific regulatory and cost oversight at the state and sometimes even local level.

At this point I don't see Washington willing to set up that sort of structure. If they were serious about a Maryland-style cost containment plan, then there would need to be serious discussions about crafting a cost-control role for the states. The current bill is organized in a way that seems too centralized to move in that direction.

[opebo]

You forgot 1) fica taxes, including the 2.9% bit that goes on forever, and 2) the phase out of itemized deductions.  Anyway, after opening up my 2008 return on turbo tax, I see that I paid 31% of my adjusted gross income in federal taxes, so if you triple that, the total take would be 93% of AGI. For 2009 the percentage will be higher.

Well, 93% would be a pleasing top rate, but certainly not reasonable as an overall percentage.

Its funny you pay such high rates though - you must have an truly enormous income.  As and old lady I used to know used to say when we talked about capital gains tax rates - 'you should be so lucky'.

[Torie]

Muon2, why do you consider the feds (as opposed to the states) micro managing costs (aka in my view in large part cannibalizing medical infrastructure assets unless a system is put in place to make consumers more cost conscious, but that is another matter), as violating some law of well, to pick an analogy at random, say physics? 

[Torie]

You forgot 1) fica taxes, including the 2.9% bit that goes on forever, and 2) the phase out of itemized deductions.  Anyway, after opening up my 2008 return on turbo tax, I see that I paid 31% of my adjusted gross income in federal taxes, so if you triple that, the total take would be 93% of AGI. For 2009 the percentage will be higher.

Well, 93% would be a pleasing top rate, but certainly not reasonable as an overall percentage.

Its funny you pay such high rates though - you must have an truly enormous income.  As and old lady I used to know used to say when we talked about capital gains tax rates - 'you should be so lucky'.

My income is not out of line for a small firm lawyer in a high cost zone in California, who is in his peak earning years, and considered a very competent lawyer, and I guess I have "fooled" enough clients into believing that. Well actually, starting this year, I have been cutting my practice back to about half time, so my peak years are essentially over. I will be effectively Obama proof, at least until he goes after the more prosperous half of the middle class (as opposed to the top end of the upper middle class and the rich) with higher taxes, which may be inevitable perhaps. Timing is everything I guess.

[muon2]

Muon2, why do you consider the feds (as opposed to the states) micro managing costs (aka in my view in large part cannibalizing medical infrastructure assets unless a system is put in place to make consumers more cost conscious, but that is another matter), as violating some law of well, to pick an analogy at random, say physics? 

I'm saying that a utility is best regulated at the most local level that can be sustained. I think that is likely to make it most responsive to local cost variations and the consumers in the local area. For federal law that typically means involving the states, who would then determine what, if any, local involvement would take place.

My post was intended to put more thought into the what-if suggested by Lief's post. In that case, I believe that if health care is to be looked at as a utility as it seems Maryland does, and if a utility can be better regulated at a level lower than a national one as I have suggested, then a federal health care bill needs to go in a very different direction than what is currently discussed.

[Ban my account ffs!]

You forgot 1) fica taxes, including the 2.9% bit that goes on forever, and 2) the phase out of itemized deductions.  Anyway, after opening up my 2008 return on turbo tax, I see that I paid 31% of my adjusted gross income in federal taxes, so if you triple that, the total take would be 93% of AGI. For 2009 the percentage will be higher.

Well, 93% would be a pleasing top rate, but certainly not reasonable as an overall percentage.

Its funny you pay such high rates though - you must have an truly enormous income.  As and old lady I used to know used to say when we talked about capital gains tax rates - 'you should be so lucky'.

My income is not out of line for a small firm lawyer in a high cost zone in California, who is in his peak earning years, and considered a very competent lawyer, and I guess I have "fooled" enough clients into believing that. Well actually, starting this year, I have been cutting my practice back to about half time, so my peak years are essentially over. I will be effectively Obama proof, at least until he goes after the more prosperous half of the middle class (as opposed to the top end of the upper middle class and the rich) with higher taxes, which may be inevitable perhaps. Timing is everything I guess.

So, what's your fix?  How will the party you support balance the budget with no tax increases (and even further tax cuts) and no cuts to social security, medicare, or defense?

You'd essentially have to gut the entire budget except those items.  I guess that magic libertarian fairy dust would build our roads and poverty and poor people would magically disappear!

[Torie]

Medical subsidies need to be rationed (and rationalized), medical consumers need to be made more cost conscious through encouraging catastrophic health insurance backed up by HSA accounts, druggies emptied out of prisons, public employees, and contractors via Davis Bacon, need to stop being overpaid, Social Security benefit increases tied to the CPI rather than wage increases, federal educational subsidies tied to performance along with vouchers, many more military bases closed, and certain tax loopholes closed, like the deferral of taxation of foreign subsidiary profits, ethanol and all other agricultural subsidies ended, and student loan subsidies means tested. We also need to stop subsidizing home mortgages and failed big corporations, like GM. Banks need to be better capitalized and regulated to avoid another bailout of them, via direct dollars, or via allowing them to charge 7% for loans to uber high credit borrowers, or get 3% for buying treasury bills, while obtaining funds for a tenth of one percent.

How is that for a start? I had a longer list in another post.

[useful idiot]

-Raise taxes
-Cut military spending
-Institute strict medical price controls

Problem solved.

That would require the president and congress to have some small iota of courage, they don't...

[Free Trade is managed by the invisible hand.]

I wonder if the CBO adds the bailouts to their estimate, and this is an important factor because the BAILOUTS WERE LOANS AND THUS OUR GOVERNMENT MAY PROFIT FROM IT. For example we bailed mexico in the 90's,and our treasury department gained an extra 500 billion.

[opebo]

I'm afraid the only real answer possible is increasing taxes on people like Tory and above.  Federal spending is already incredibly parsimonious outside the untouchable military budget.

As Tory ably pointed out my suggestion of 'tripling' his (and his class's) taxation was verging on hyperbole, but doubling them seems to be the solution.  After all, the non-cyclical or structural deficit has arisen since 1981 solely because of tax cuts on this class.

[MODU]

-Raise taxes
-Cut military spending
-Institute strict medical price controls

Problem solved.

Raising taxes would be the only practical recommendation off of your list.  Medial price controls would only help the payee, but will lead to subsidization of the medical industry due to costs associated with insurance, lawsuits, student loans, and medication (where most of the medical costs come from and isn't something you can artificially cap).