Concise summary of the US budget problem
Apr. 25th, 2011 08:33 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
snousleIn a nutshell, from Forbes:
...taxpayers are on the hook for Social Security and Medicare by these amounts: Social Security, 1.3% of GDP; Medicare part A, 2.8% of GDP; Medicare part B, 2.8% of GDP; and Medicare part D, 1.2% of GDP. This adds up to 8.1% of GDP. Thus federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.
This one paragraph explains 90% of the hysteria in politics today. One might call it the "failure of socialism", except to the Tea Party, socialism is all the other programs. You know, the ones that they don't need themselves, and which aren't busting the budget. Hence the grousing over such things as Planned Parenthood and "foreign aid", which comprise such small portions of federal spending that they're lost in the noise. By moving the fight to issues that are completely irrelevant, conservative leaders solve the difficult problem of opposing "socialism" without scaring the shit out of their fan base.
To be fair, I greatly admire 60 year old conservatives who are willing to say outright that they want Medicare abolished. Right there, that's a few hundred grand out of their own pocket. Nothing like putting your money where your mouth is. Especially when they don't have the money and face going without medical treatment entirely.
Unfortunately, the US is caught between a rock and a hard place. Americans can do this the easy way, by facing up to reality and making a choice, or the hard way, through a debt crisis that would leave millions of senior citizens literally starving on the streets. Personally, I favor splitting the difference, which means a 50% tax increase coupled with substantial benefit reductions. The fact that this compromise is, simultaneously, radically liberal and radically conservative means that it's going to be done the hard way. It will be interesting to see how this ends.
...taxpayers are on the hook for Social Security and Medicare by these amounts: Social Security, 1.3% of GDP; Medicare part A, 2.8% of GDP; Medicare part B, 2.8% of GDP; and Medicare part D, 1.2% of GDP. This adds up to 8.1% of GDP. Thus federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by these programs under current law over and above the payroll tax.
This one paragraph explains 90% of the hysteria in politics today. One might call it the "failure of socialism", except to the Tea Party, socialism is all the other programs. You know, the ones that they don't need themselves, and which aren't busting the budget. Hence the grousing over such things as Planned Parenthood and "foreign aid", which comprise such small portions of federal spending that they're lost in the noise. By moving the fight to issues that are completely irrelevant, conservative leaders solve the difficult problem of opposing "socialism" without scaring the shit out of their fan base.
To be fair, I greatly admire 60 year old conservatives who are willing to say outright that they want Medicare abolished. Right there, that's a few hundred grand out of their own pocket. Nothing like putting your money where your mouth is. Especially when they don't have the money and face going without medical treatment entirely.
Unfortunately, the US is caught between a rock and a hard place. Americans can do this the easy way, by facing up to reality and making a choice, or the hard way, through a debt crisis that would leave millions of senior citizens literally starving on the streets. Personally, I favor splitting the difference, which means a 50% tax increase coupled with substantial benefit reductions. The fact that this compromise is, simultaneously, radically liberal and radically conservative means that it's going to be done the hard way. It will be interesting to see how this ends.
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Date: 2011-04-25 07:50 pm (UTC)From one perspective, maybe - but progressive tax rates (like we had before Reagan) have other beneficial effects. By making it fiscally unrealistic to pay corporate executives ludicrous sums, or for private owners to pull vast amounts of money out of the company, that money stays in the corporation where it is far more likely to be used in a way more useful to the wider economy - hiring people, updating/expanding equipment, etc. We only saw the explosion in executive salary after the Reagan tax cuts.
For example - does it make any sense for former General Motors CEO Rick Wagoner to have made more money than Honda's ENTIRE executive board combined, when the two companies are roughly the same size? (At least in 2006, the only year I found numbers for both.) Especially since the latter live in/near Tokyo, one of the most expensive cities in the world; I doubt even the most upscale area near GM's headquarters can compare.
While it's not the greatest example because of the huge pile of cash Apple is sitting on, as I heard someone remark in response to the R's demand for even further personal tax cuts - "Steve Jobs doesn't hire people - Apple does."