What are Languish's thought about Obama's proposed budget? Here's one view:
Quote
There is something profoundly timid about President Obama's proposed $3.8 trillion budget for 2014. Stripped of boasts about "investments" for the future and a responsible "balance" between deficit reduction and economic growth, the budget is a status-quo document. It lets existing trends and policies run their course, meaning that Obama would allow higher spending on the elderly to overwhelm most other government programs. This is not "liberal" or "conservative" so much as politically expedient and lazy.
The trends are clear. From 2014 to 2023, the administration projects annual spending on Social Security to rise from $860 billion to $1.4 trillion, assuming its proposal for altering the inflation adjustment of benefits is adopted. Over the same years, annual Medicare and Medicaid spending would go from $828 billion to $1.4 trillion. Meanwhile, defense spending would barely rise from $618 billion to $631 billion. Non-defense discretionary spending (a catchall covering everything from Head Start to the weather service) would increase from $624 billion to $647 billion.
But these are all "nominal" dollars; they don't account for inflation. When the figures are adjusted for price and population changes, shifts are more pronounced. Defense and non-defense "discretionary" spending decline by 22 percent from 2014 to 2023. (Defense News reported last week that the Air Force has sharply cut pilot training; there will be more of this.) Social Security rises 25 percent, Medicare and Medicaid 27 percent. (All figures are from Obama's budget.)
What's happening is that savings from shrinking defense and discretionary programs are financing expanded spending for the elderly. As a share of the economy (gross domestic product), non-elderly and non-health programs are rapidly eroding. In 2012, defense and domestic discretionary programs represented 8.3 percent of GDP; by 2023, the administration projects their share at 4.9 percent of GDP. This can't continue indefinitely, because — at some point — these programs become completely ineffective or disappear.
But Obama remains unwilling to grapple with basic questions posed by an aging population, high health costs and persistent deficits. Why shouldn't programs for the elderly be overhauled to reflect longer life expectancy and growing wealth among retirees? Shouldn't we have a debate on the size and role of government, eliminating low-value programs and raising taxes to cover the rest? The "spin" given by the White House — and accepted by much of the media — is that the president is doing precisely this by putting coveted "entitlement" spending on the bargaining table.
It's phony. Compared with the size of the problem, Obama's proposals are tiny. The much-discussed shift in the inflation adjustment for Social Security benefits to the "chained" consumer price index would save $130 billion over a decade; that's about 1 percent of projected Social Security spending of $11.23 trillion over the same period. A proposal to raise Medicare premiums for affluent retirees is more meaningful but would affect only couples with incomes exceeding $170,000, says Obama aide Gene Sperling.
Similarly, the administration also opposes "wasting taxpayer dollars on programs that are outdated, ineffective or duplicative." But it proposed only 215 "cuts, consolidations and savings proposals," reducing spending by an estimated $25 billion in 2014. That's about 0.7 percent of federal spending. No major program is on chopping block.
The work of politics is persuasion. It is orchestrating desirable, though unpopular, changes. (Popular changes don't require much work.) Obama has the intellectual and rhetorical skills to conduct a debate on government's size and role. But it would be a hard and hazardous political task, because it would challenge the assumptions and interests of wide swaths of the public. There is no guarantee that he would succeed in altering attitudes. Already, his small proposed cuts in Social Security benefits have outraged much of the liberal base.
So Obama has taken a pass. He has chosen the lazy way out. He's evading basic choices while claiming he's bold and brave. A more charitable interpretation is that he's focusing his political talents on more promising causes (gun control, immigration). Either way, government is slowly growing larger while — in many basic functions — it's being strangled. This paradox, it seems, will be Obama's questionable legacy.
So: is the path to a better future, or a further step on the road to insolvency?
Quote from: Kleves on April 11, 2013, 02:49:55 PM
Here's one view:
Whose view is it? Yours? Charles Krauthammer's? The Editorial Board of the WSJ? derfetus.blogspot.com?
Use references, please.
Quote from: CountDeMoney on April 11, 2013, 02:56:00 PM
Quote from: Kleves on April 11, 2013, 02:49:55 PM
Here's one view:
Whose view is it? Yours? Charles Krauthammer's? The Editorial Board of the WSJ? derfetus.blogspot.com?
Use references, please.
http://www.washingtonpost.com/opinions/robert-samuelson-obamas-lazy-budget/2013/04/11/9956e56a-a2c5-11e2-9c03-6952ff305f35_story.html
I am a bit confused about the US budgetary process since it appears your government can operate without one.
Quote from: crazy canuck on April 11, 2013, 02:59:07 PM
I am a bit confused about the US budgetary process since it appears your government can operate without one.
We did for quite a long time. Forged a nation, fought a civil war and two world wars without one.
But bean counters need love, too.
We need to invest in more green jobs.
I am disgusted...but not surprised.
Obama has been a rather huge disappointment.
Sad that the Party of Stupid couldn't come up with anyone better.
In fact, it is really sad.
Quote from: Berkut on April 11, 2013, 03:08:36 PM
Obama has been a rather huge disappointment.
I told you people once before: starting in the 80s every major city had to elect a token black dude to prove it wasn't racist... nearly all of these mayors were horrible (Dinkins, Goode, Barry, Kilpatrick....) Maybe Obama is America's token black mayor. :)
Quote from: CountDeMoney on April 11, 2013, 03:00:14 PM
Quote from: crazy canuck on April 11, 2013, 02:59:07 PM
I am a bit confused about the US budgetary process since it appears your government can operate without one.
We did for quite a long time. Forged a nation, fought a civil war and two world wars without one.
But bean counters need love, too.
Thats the thing I dont get though. Under our system failure to successfully pass a budget brings down a government. In your system it seems to have become par for the course.
Quote from: crazy canuck on April 11, 2013, 02:59:07 PM
I am a bit confused about the US budgetary process since it appears your government can operate without one.
For the government to stay open either they need to pass a budget or they a Continuing Resolution. I think we've been running on Continuing Resolutions, which are typically good for a few months, for some time now.
Terrible article in OP - full of unexplained assumptions ("the elderly" are growing more "wealthy"? really - by how much? how distributed? what is the basis for the claim?) and arbitrary or meaningless judgments (why is incrementalism bad? in what sense is can a budget be called "lazy" - do the numbers not add up? Are there spelling errors?).
Spending on programs for the elderly are budgeted to rise because we are now entering the period where the Boomers are retiring. This is a demographic issue that has been known about for decades, and its effect on causing Social Security and Medicare spending to rise during this exact period of time has been thoroughly known and understood (and quanitified) since the Greenspan Commission in 1983. So why the sudden running around with heads cut off about an annual rate of increase (after inflation) in the low 2 percent range?
Meanwhile, Samuelson says nothing, absolutely nothing specific about what "dersirable, but unpopular changes" Obama should be boldly championing or what "major progams" should be on the "chopping block". talk about lack of courage - if some clod of columnist can't summon together 2 cahones to say something of susbtance, what can Obama reasonably expect from Congress (i.e. the body under our Constitutional system that is actually responsible for spending decisions)?
If you want to talk about the budget fine. If you want to engage in some empty tsk-tsking exercise where the object is to show off moral superiority, count me out.
Quote from: The Minsky Moment on April 11, 2013, 04:20:20 PM
If you want to engage in some empty tsk-tsking exercise where the object is to show off moral superiority
Duh. Of course that's what we want to do.
He should balance the budget and move to the gold standard. This isn't rocket science.
Quote from: The Brain on April 11, 2013, 04:41:12 PM
He should balance the budget and move to the gold standard. This isn't rocket science.
Another thing he should do is stop being racist against gun owners.... oh and also be less black. :)
I'm a skin half white kind of guy. :)
Quote from: Caliga on April 11, 2013, 03:11:44 PM
Quote from: Berkut on April 11, 2013, 03:08:36 PM
Obama has been a rather huge disappointment.
I told you people once before: starting in the 80s every major city had to elect a token black dude to prove it wasn't racist... nearly all of these mayors were horrible (Dinkins, Goode, Barry, Kilpatrick....) Maybe Obama is America's token black mayor. :)
Dinkins wasn't horrible. Anyway, I thought the UK demonstrated that deep cuts don't actually decrease deficit spending.
Quote from: The Brain on April 11, 2013, 04:47:49 PM
I'm a skin half white kind of guy. :)
And pretty fly too.
From Jan Hatzius, chief economist at Goldman Sachs:
http://www.calculatedriskblog.com/2013/04/the-rapidly-shrinking-federal-deficit.html
QuoteThe federal budget deficit is shrinking rapidly . . . In the first three months of calendar 2013--that is, since the increase in payroll and income tax rates took effect on January 1--we estimate that the deficit has averaged just 4.5% of GDP on a seasonally adjusted basis. This is less than half the peak annual deficit of 10.1% of GDP in fiscal 2009.
There are three main reasons for the sharp reduction in the deficit:
1. Lower spending. On a 12-month average basis, federal outlays have fallen by a total of 4% in the past two years, the first decline in nominal dollar terms over a comparable period since the demobilization from the Korean War in the mid-1950s.
2. Higher tax rates. The increase in payroll tax rates in January 2013 has boosted federal receipts by around $120 billion (annualized), or about 0.8% of GDP.
3. Economic improvement . . ..
We expect the deficit to continue to decline and are forecasting a deficit of 3% of GDP or less in fiscal 2015 . . . In our view, the most important implication from the reduction in the budget deficit for the near-term economic outlook is reduced pressure for further fiscal retrenchment. Partly for this reason, we expect the drag from fiscal policy on real GDP growth to decline sharply from around 2% of GDP in 2013 to around 0.5% in coming years. This is a key reason for our expectation that real GDP growth will accelerate from around 2% (annualized) in Q2/Q3 2013 to 3%-3.5% in 2014-2016.
The case for extreme fiscal retenchment in the US is not evident to me.
Shouldn't 2009 be excluded from being used as any kind of benchmark? I mean that year was a big anomaly.
Quote from: The Minsky Moment on April 11, 2013, 05:39:20 PM
The case for extreme fiscal retenchment in the US is not evident to me.
Agreed, the situation is much better than I thought. I missed a couple points of deficit reduction somewhere since Teh Fiskal Kliff talks. Then it looked like we were reducing from 8% of GDP to 7%. All of a sudden we're at 4.5% seasonally adjusted (The Economist said 5.5%--I assume unadjusted).
So now we're no longer hurtling towards Italy status. Instead we're France.
That being said, I believe that still leaves unresolved the *future* deficits that will be caused by Baby Boomer retirements.
Quote from: Admiral Yi on April 11, 2013, 05:55:48 PM
So now we're no longer hurtling towards Italy status. Instead we're France.
That being said, I believe that still leaves unresolved the *future* deficits that will be caused by Baby Boomer retirements.
We are france with the world's preeminent reserve currency in our control, which is an advantage.
And while I realize the WH budgets present plans for 10 years out, it's hard to take those seriously, especially when there are only 3 years left in the term. The part of the budget proposal that actually matters is the proposal for the coming fiscal year. And without examining any specifics, the aggregate looks reasonable to me.
I suppose there might have been confusion about Obama's messianic pretensions back in 09, but anyone who might have thought that had plenty of time to be disabused. We still re-elected him. I don't think it is fair to attack him now for failure to live up to the messianic promise: either by resolving all problems through divine miracles or by happily climbing up on a political cross and handing his opponents the nails.
Quote from: Razgovory on April 11, 2013, 04:58:37 PM
Dinkins wasn't horrible.
:yeahright: He paved the way for Giuliani. That by itself is unforgivable.
I don't get the critique here. Surely by its nature mandatory spending rises (or falls) in a certain way based on the laws establishing those programs. There'll be the odd varying assumption about how many people will choose to work for longer or how much healthcare inflation can be reduced but that's just different assumptions (or dodgy accounting). But if you want to spend less on Social Security or Medicare you reform them, until then any budget has to account for them based on the current law?
Obama proposes more money for cybersecurity.(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fforum.backupot.com%2FSmileys%2Fdefault%2FUntitled-1.png&hash=c8751ffe13043f2764a0e9fffef5529152d2d72d)
The US Army has created new military occupation called "Cyber Network Defender". I am going to sign up.
Quote from: DGuller on April 11, 2013, 06:32:04 PM
Quote from: Razgovory on April 11, 2013, 04:58:37 PM
Dinkins wasn't horrible.
:yeahright: He paved the way for Giuliani. That by itself is unforgivable.
So you and Spiess are in agreement then. :hmm: