Concise summary of the US budget problem

[snousle]

In 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.

Comments

[bitterlawngnome.livejournal.com]

where "interesting" = "tragic"

[fogbear.livejournal.com]

Yeah. Sorry. I don't trust an anti-tax organ like Forbes for a balanced answer. Suddenly "every" taxpayer faces an increase of the same amount, even though a small proportion of taxpayers faced huge decreases over the past thirty years?

Someone whose salary is $10 million a year pays exactly the same dollar amount in payroll taxes as someone who makes $110,000. Not the same rate, the same dollar amount.

Someone whose salary is $10 million a year pays the same marginal rate on the ten-millionth dollar as he/she does on the three-hundred-thousandth dollar.

This "crisis" could be solved by abolishing the payroll tax ceiling and and instituting new income tax brackets for the obscenely high levels of income. And don't get me started on corporate tax loopholes and miscellaneous tax breaks for unearned income, including estate taxes.

Crap, I thought I was logged in.

[h0gwash.livejournal.com]

I haven't read the Forbes ad, I've only kept loose track of the debate. It would seem that taxes for the not so poor should increase by a similar amount that medicare and social programs for the poor would be decreased. But obvious solutions only create an opportunity for furious spinning.

[broduke2000.livejournal.com]

I can't wait for them to privatize Medicare and Medicaid.

Just think: Thousands of new, loud and obnoxious TV ads all promising you the kitchen sink. And then when you finally get sick, they find a loophole not to pay it.

I'm waiting for the Geico Gecko with a stethoscope around his neck. YES! You can save thousands of dollars more on health insurance!