View Full Version : President Obama's speech
I've flip flop with his positions a number of times; that aside, his speech was impressive... raising the pay scale for the military along with other benefits, his statement on the prosecution of the war!!! WOW....
civilian
02-24-2009, 21:42
I've flip flop with his positions a number of times; that aside, his speech was impressive... raising the pay scale for the military along with other benefits, his statement on the prosecution of the war!!! WOW....
Those were in deed the highlights or the flip parts. However, plans for the carbon caps in regard to moving us toward green energy, universal healthcare and free college were the flops.
I watched Girls Gone Wild-Spring Break. It was a toss up--I figured both Barry's speech and the video would show just about the same amount of a**es...I just thought the video would be easier on my hypertension and eyesight. I'll see how the MSM analyzes the speech tomorrow--but I'll bet my instincts were correct. :rolleyes:
Richard's $.02 :munchin
ZonieDiver
02-24-2009, 23:27
I let my government-teaching, left-wing, female, Pittsburgh Steeler-fan, Marine family-related colleague watch it with her class - hearing it through our common wall from time to time as my World History class dealt with the Early Greek civilization. I'm sure she will fill me in tomorrow as to how the world is better after the speech. :)
We'll see...
To relieve the strain on our forces, my budget increases the number of our soldiers and Marines. And to keep our sacred trust with those who serve, we will raise their pay, and give our veterans the expanded health care and benefits that they have earned.
Not to sound cynical, but I'll believe it when I see it.
For those who missed it and are interested, here is the transcript (http://www.foxnews.com/politics/first100days/2009/02/24/raw-data-excerpts-obamas-prepared-remarks-congress/).
RichL025
02-25-2009, 00:08
Actually, I was fairly impressed overall.
A+ for delivery.
B for content ;) - the american public needs to understand that not every Johnnie is going to go to college - this is something the democrats seem to refuse to acknowledge. There's NOTHING wrong with that - we need good plumbers, electricians, etc....
Even though I don't see eye to eye with our C-in-C with several policies, I have to admit, he's got a great stage presence. If the name "The Great Communicator" wasn't already taken, he would probably qualify for it...
(hmm, I should have read the PS ground rules - "blasphemy" is probably a banning offense :D )
I thought Bobby Jindal's response was excellent also. Did a great job of pointing out some points of political differences.
Rich L
(caveat - I'm more middle of the road than most QPs)
RichL025
02-25-2009, 00:10
... as my World History class dealt with the Early Greek civilization...
We'll see...
Shame you weren't discussing the later Romans... would have been a great time to discuss "Bread and Circuses"....
(caveat - I'm more middle of the road than most QPs)
That's an assumption, son. ;)
Richard's $.02 :munchin
Blitzzz (RIP)
02-25-2009, 00:21
The Lemmings got what they wanted. Just another placation of the mental midgets who call him the second coming. I need more antidepressants, just when I thought I was getting better. May the real God bless us all. Blitzzz
ZonieDiver
02-25-2009, 00:22
Shame you weren't discussing the later Romans... would have been a great time to discuss "Bread and Circuses"....
That's tomorrow night! I think the Stimulus Package would be a good lead-in.
I consider myself pretty "middle of the road" as well - but am branded a "right-wing" radical by most colleagues!
My HS is the district's "Vocational Magnet" school, which also houses the Evening School in which I teach. I recommend plumbing, electrician, mechanic, etc. to lots of kids. So far, there is no way to digitalize a Mercedes, send it to India or China to be repaired, and then sent back.
So far...:o
RichL025
02-25-2009, 00:24
That's an assumption, son. ;)
No, unfortunately it's sad experience
Actually, I was fairly impressed overall.
A+ for delivery.
B for content ;) - the american public needs to understand that not every Johnnie is going to go to college - this is something the democrats seem to refuse to acknowledge. There's NOTHING wrong with that - we need good plumbers, electricians, etc....
I agree wholeheartedly with your assessment and as I've listened to all the statements made over the last month on how everyone has the "right" to higher education, the "right" to own a home and the "right" to this, that and the other I wondered where exactly it was that folks forgot that certain things are not guaranteed by the Constitution and that they must in fact be earned by the individual.
And while I don't subscribe to every notion brought about by the right, I am a staunch supporter of fiscal conservatism and personal accountability and that it is the only way to work toward minimizing government and bringing about true "change".
Reading the president's speech, I appreciated how he set forth an understandable narrative of the ongoing crisis in a way that lets Americans see the connection between their everyday lives and the economy as a whole. Not only does this represent good presidential leadership, it provides a great extended quote for future historians wanting to capsulize how the president inspired so much confidence in so many Americans. (Disclosure: I am not yet one of those Americans.)
I don't particularly care for the way he presents America as being at the crossroads of history (a theme he rode to the White House). The president presents himself as the solution while insisting that he is in no way a part of the problems of the past nor the consequences of ineffective solutions that failed to solve those issues. Instead, he insists that he has 'inherited' these problems. Yet, he was a senator--albiet an absentee one. He did play a part in that body's inability to address America's current economic crisis.
To me, the president comes across as a guy standing off to the side, laying in the cut, as his teammates try to move a piano. Only after they've failed several times to move the piano (to his whispers of "You're doing it wrong") does he role up his sleeves, walk over, offer a suggestion to his now exhausted colleagues, and help with the heavy lifting. If the piano rises, he'll get the credit for being there in the nick of time. Lost in the thundering applause, the laughs, and the expressions of gratitude is the fact that we'll never know what difference he might have made had he made his best effort sooner.
civilian
02-25-2009, 01:36
I agree wholeheartedly with your assessment and as I've listened to all the statements made over the last month on how everyone has the "right" to higher education, the "right" to own a home and the "right" to this, that and the other I wondered where exactly it was that folks forgot that certain things are not guaranteed by the Constitution and that they must in fact be earned by the individual.
And while I don't subscribe to every notion brought about by the right, I am a staunch supporter of fiscal conservatism and personal accountability and that it is the only way to work toward minimizing government and bringing about true "change".
True! I'll let them keep the change and I'll be content with character gained from paying every dime of my college, healthcare and starting my own business. It started with the fee school lunch program and has progressed to universal healthcare and free college. Somebody has to cook the french fries.
civilian
02-25-2009, 02:55
Reading the president's speech, I appreciated how he set forth an understandable narrative of the ongoing crisis in a way that lets Americans see the connection between their everyday lives and the economy as a whole. Not only does this represent good presidential leadership, it provides a great extended quote for future historians wanting to capsulize how the president inspired so much confidence in so many Americans. (Disclosure: I am not yet one of those Americans.)
I don't particularly care for the way he presents America as being at the crossroads of history (a theme he rode to the White House). The president presents himself as the solution while insisting that he is in no way a part of the problems of the past nor the consequences of ineffective solutions that failed to solve those issues. Instead, he insists that he has 'inherited' these problems. Yet, he was a senator--albiet an absentee one. He did play a part in that body's inability to address America's current economic crisis.
To me, the president comes across as a guy standing off to the side, laying in the cut, as his teammates try to move a piano. Only after they've failed several times to move the piano (to his whispers of "You're doing it wrong") does he role up his sleeves, walk over, offer a suggestion to his now exhausted colleagues, and help with the heavy lifting. If the piano rises, he'll get the credit for being there in the nick of time. Lost in the thundering applause, the laughs, and the expressions of gratitude is the fact that we'll never know what difference he might have made had he made his best effort sooner.
He cites predatory lending causing the hosuing market crash. As a Realtor and builder this doesn't wash. ACORN and others forced lenders, Freddie and Fannie to give loans to people who wouldn't qualify otherwise. I never saw any preditory lending. Just people buying out of emotion and lenders without common sense.
He says schools need reform and more money. You can spend all the money in the world like Fulton County Georgia does and it will make no difference if the child is not set up for success at home. Otherwise, it is just throwing good money after bad.
He said China is making the greatest effort for renewable energy. I would argue it is simply the billion or so Chinese who live in poverty.
He asks for a bipartisan bill for free college tutition sponsered by Orin Hatch and " a man who has never stopped asking what he can do for his country, Edward Kennedy!" Saving a young lady drowning in a car in 4 feet of water wasn't one I guess. He saw fit to protest while our finest were fighting in SouthEast Asia.
He failed to mention how the UAW brought down the American car industry.
Richard, ZD, Sigaba, collectively, thank you for the smile you brought to my life this morning; and Richard before wear out that movie over the next four years , send me a copy.
If you take 50 Billion out of Defense programs I guess you'll have some money to hire a few more troops. Might have to arm them with M1842s.
Gen. Eric Shinseki
"We need to have enough forces on the ground to deter and hold crises where they are. You can't fall into the trap of organizing for specific missions and then being unable to perform other missions when the conditions change very quickly — and in places like Kosovo, they can change in 20 minutes. You may find yourself having to go very quickly, intellectually and physically, from what was a peacekeeping mission to fighting a war — and preparing the troops for this [shift]. And with the missions multiplying, you cannot go on fighting a 12-division war with only 10 divisions Army."
I believe the DOD is now recognizing the General was right Again, as they are in the process of adding two divisions to the force!!! We’ll have to wait and see what part of the DOD budget is being affected.
No, unfortunately it's sad experience
"...than most QPs." is still an assumption...based solely upon your sad experience...but my not so sad experience over the last 40 years gives me a different 'opinion.' Give it time; the breadth of experience changes many things. ;)
Richard's $.02
Whyzzit, that when "The Annointed One" wants to motivate the public, he adopts a Republican/Conservitive stance. Even his press sec. said that he would approach this speech with a "Reaganesque" point of view.
And his remarks that he's a "Union kinda guy". And quotes a 1930s act (Davis-Bacon)(Herbert Hoover) that promises workers the "Prevailing Rate". An act whose true purpose is still being debated.
Just some questions floating around in a FOG foggy mind.
I don't believe it's been linked on this site, and I don't know how the QPs view Jeb Bush, but I was intrigued by a proposal he made in this article (http://online.wsj.com/article/SB123457271366086479.html). Namely, his desire to transform K-12 education into a credit system like college. Too often I saw people skating by on what Mr. Bush calls "seat time" while students who would have benefited from more intensive instruction (myself included) were bored senseless. It wasn't until I was able to take AP classes as an upperclassman in high school (AP classes are classes taught at a college level which most colleges award credit for, assuming one scores well on the accompanying standardized test) that I found material that was truly engaging, and my sister is experiencing the same difficulties. As such, Mr. Bush's plan is one that I wouldn't mind our current Messiah to adopt, given his large amount of political capital and ability to sell sand to a Bedouin.
I don't believe it's been linked on this site, and I don't know how the QPs view Jeb Bush, but I was intrigued by a proposal he made in this article (http://online.wsj.com/article/SB123457271366086479.html). Namely, his desire to transform K-12 education into a credit system like college. Too often I saw people skating by on what Mr. Bush calls "seat time" while students who would have benefited from more intensive instruction (myself included) were bored senseless. It wasn't until I was able to take AP classes as an upperclassman in high school (AP classes are classes taught at a college level which most colleges award credit for, assuming one scores well on the accompanying standardized test) that I found material that was truly engaging, and my sister is experiencing the same difficulties. As such, Mr. Bush's plan is one that I wouldn't mind our current Messiah to adopt, given his large amount of political capital and ability to sell sand to a Bedouin.
MOO--AP (College Board) is a for-profit business and one doesn't need to take a 'class' to challenge an exam (similar to a CLEP). As far as 'true' challenge, a number of schools allow their motivated and capable students to modify their schedules and take dual-credit (HS + college credit) at a local college. In Texas, this is free and also earns a motivated student the privilege of 'tasting' college expectations, creating a 'transferable' college transcript, and beginning college as a 2nd semester freshman, sophomore, or even a junior. Here in Texas, many public and private high schools don't use the program (I did because of its benefit to students) because it affects their ratings by the state ed agency (TEA) or takes $$ away from the school who generally earns more for a fuller class load.
Just something to consider in the plan mentioned. ;)
Richard's $.02 :munchin
BHO does alot better at these staged speeches then the townhall meetings he has held in the past month. I'm still holding my breathe to see if any of this will work.
The most disturbing thing about his speech was Pelosi sitting behind smiling and cheering at his every word. It reminded me of the parent louding cheering for their kid in right field, who instead of racing over to catch the fly ball, was too busy sticking grasshoppers up their nose to care about the game......
bandycpa
02-25-2009, 11:44
The most disturbing thing about his speech was Pelosi sitting behind smiling and cheering at his every word. It reminded me of the parent louding cheering for their kid in right field, who instead of racing over to catch the fly ball, was too busy sticking grasshoppers up their nose to care about the game......
I think that killed me during the speech. The prevailing attitude (at least to me) was "We won. It's our turn now. Sit there and like it!". The sight of Pelosi orgasmically clapping for everything the Anointed One said absolutely made it hard for me to hear what was he was actually saying.
Actions speak louder than words. Last night, the actions said "It's our time now, Republicans. Get used to it!".
Bandy
I liked it for the most part, regardless of intent, since its far too soon to be judging him on what he can actually do, as he has done nothing yet really, but atleast he is a good orator. As for the content, well, some good, some bad,some ugly(like pelosis rabbiting), I'm still very wait and see on Saint Barry, so I guess I will do more of that.:munchin
I think many people are merely overcome by the Dopeler Effect when confronted with such effluvial pandering to an adoring crowd.
Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.
We have some preachers down here in Texas who are experts at using it to fill their faux temples with believers and pocket books with their believer's donations. Washington, DC, seems to attract the same crowds.
Richard's $.02 :munchin
Here's how his other band of community organizers viewed the speech last night--as a green light to push ahead.
Richard's $.02 :munchin
Dear MoveOn member,
Wow. Did you see President Obama's speech? Last night he laid out a bold and ambitious agenda to totally transform our economy. As he said, "it begins with energy."
Think about what Obama's vision would mean for our country: solar panels on our roofs. Wind power in our heartland. Thriving communities. Millions of people put back to work building our future.
If we want it, we need to build a grassroots movement to make it happen. Even with Obama making clean energy a priority, it's going to be tough. Big oil and coal companies are already preparing to block real reform and conservatives want Obama to fail.
We've got to show an overwhelming public mandate for this change. So we've launched a huge new campaign to make it happen. We'll triple our organizing capacity and send top-notch organizers to key states and congressional districts, run hard-hitting new ads on television and radio, and mobilize hundreds of thousands of new MoveOn members.
But we need to raise another $250,000 this week to get started. Can you chip in $15 a month to make it happen? Our system makes it easy and you can cancel at any time:
https://pol.moveon.org/donate/green_go.html?id=15676-13679562-XDaSsOx&t=3
We've never done anything like this before. It'll be a $3 million year-long program. To win a huge victory, we'll need to:
* Build diverse coalitions of small-business owners, green-collar workers, faith communities, and many more to show widespread support for a clean-energy economy.
* Organize locally to make sure members of Congress hear our message everywhere they go.
* Combine creative grassroots and paid advertising efforts to grab the attention of local and national media.
* Hold a massive wave of local events where MoveOn members will reach out to neighbors and involve them in the campaign.
* Partner with innovative groups like Green for All and the Apollo Alliance who have led the way on this issue. They've worked for years to let Americans know that a good economic policy is based on a new energy economy.
It's an unprecedented commitment. But that's what's required to break through the status quo and enact bold change.
And we've got no time to waste. As President Obama said last night, "now is the time to act boldly and wisely—to not only revive this economy, but to build a new foundation for lasting prosperity."
It won't happen unless all of us stand together. Can you help out with a donation of $15 a month?
Here's how his other band of community organizers viewed the speech last night--as a green light to push ahead.
Richard's $.02 :munchin
Dear MoveOn member,
Sir--
Would it be possible to give an alert when a post is going to include "information" from moveon.org?:eek: That way, I'll know to put on my tin foil hat before reading on.;)
Those guys...:mad:
Those guys...:mad:
I view MoveOn.Org as just another example that the bozone layer, unfortunately, shows little sign of breaking down in the near future. :rolleyes:
Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating.
Richard's $.02 :munchin
It's better to know what Moveon.org is up to than to be surprised.
That said - they're doing an effective job of advancing their agenda. They're also providing free lessons on how to do so. To change the present path, perhaps we need to study their methods, improve on them, and start winning in the marketplace of ideas.
Let's single out this statement: "Think about what Obama's vision would mean for our country: solar panels on our roofs. Wind power in our heartland. Thriving communities. Millions of people put back to work building our future."
It's a vision that many will support. To fight that vision, either some counter-vision must be created, or their vision must be subsumed.
As for the speech...clearly, he communicates effectively. He also knows how to appeal to the vast majority of the voters. He is offering ideas and programs that will appeal to many. The speech itself did the job he seems to have wanted it to do. But although promises may win friends, it is performance that will keep them. I think it is still very early in the game.
Red Flag 1
02-25-2009, 18:15
I've flip flop with his positions a number of times; that aside, his speech was impressive... raising the pay scale for the military along with other benefits, his statement on the prosecution of the war!!! WOW....
Did not feel well last night. Did not want to push things, so I did not watch the "address". Just could not stomach it!
Woke up this morning....turned on the "news"...had a relapse....turned off the "news" after a trip to the bathroom....and went back to bed. Just could not stomach the coverage at any level!
RF 1
The Reaper
02-26-2009, 12:52
Well, lets see how far you get before you have to gag.
http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf
TR
Well, lets see how far you get before you have to gag.
http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf
TR
I got to: A NEW ERA OF RESPONSIBILITY before I started rolling my eyes.
I started feeling my lunch come up with this one: INHERITING A LEGACY Of
MISPLACED PRIORITIES
Tell how placing the blame on others is taking responsibility? Who was it again who just approve 1.5 TRILLION in bailout?? :rolleyes:
TrapLine
02-26-2009, 13:33
I got to: A NEW ERA OF RESPONSIBILITY before I started rolling my eyes.
I started feeling my lunch come up with this one: INHERITING A LEGACY Of
MISPLACED PRIORITIES
Tell how placing the blame on others is taking responsibility? Who was it again who just approve 1.5 TRILLION in bailout?? :rolleyes:
Unfortunately, it seems that in this "New Era of Responsibility" someone else is always responsible:mad:.
Dozer523
02-26-2009, 14:12
Well, lets see how far you get before you have to gag.
http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf
TR Well it was quite a read. At least the first 35 pages. As readable as it was -- we are looking at a budget! So I probably better take it in portions or I will be overwhelmed. The graphs really rocked me back on my heels. Nothing like a picture to see how ugly something is. I'll defer analysis of the graphs to NMAP.
Pages 30- 34 were particularly interesting. DOD and VA spending. 20 items listed to help service members and veterans. Looked good to me.
Promising everything to everyone is not realistic and I'm a strong believer in looking at patterns in life. The pattern in Obama's record is that he will expand government spending and a very leftist/socialist agenda that consolidates power within the Exectutive Branch. Regardless of what he verbally expresses to the public, its his actions that define who he is and what he really wishes to accomplish. He promised transparency with the Stimulas package, yet the bill was passed and signed into law without anyone in the public or even the Congress that voted on it getting a chance to read/debate it. It is even more interesting that Senator Byrd is calling him out on this. Our country was made great by everyday Americans making extraordinary things happen within their own small spheres of influence and hard work. It wasn't made great by government intervention and the Federal government micro-managing our capitalist economy.
Some people like to refer to American history and how the New Deal was a "success" or that Lincoln got the ball rolling towards expansionist government control in times of crisis, but that is ignoring the finer details and events of those points in history. If you really look at the New Deal programs it can be argued that it prolonged the Great Depression and that only WWII brought us out of it. Lincoln's actions during the Civil War were meant to preserve the Union in a time of domestic warfare as was his constitutionally appointed duty, he never gave any indications in public or private that he wanted to continue Federal power consolidation and oversight beyond the war, it was his succesors that made that decision after his assassination.
Obama and his followers have made references to these points in history in order to justify what they are doing now. They are taking things out of context and the general American public is eating it up because our school's don't teach us to evaluate context. Obama, like many other astute politicians before him, is doing an excellent job of spreading a simple message to the general public that they can understand based on their limited knowledge of history. Too many people are ignorant of the true lessons history teaches us about these times in history; they are failing to take these historical events into context and understanding what the true cause and effects were of these programs.
Virtute Non Verbis
It's better to know what Moveon.org is up to than to be surprised.
That said - they're doing an effective job of advancing their agenda. They're also providing free lessons on how to do so. To change the present path, perhaps we need to study their methods, improve on them, and start winning in the marketplace of ideas.
And here's the latest from MoveOn.Org. :eek:
Richard's $.02 :munchin
Dear MoveOn member,
In his speech, President Obama made it very clear that he wants Congress to pass health care this year. But did you see today's Wall Street Journal headline?
Lobbyists Line Up to Torpedo Speech Proposals
WASHINGTON—Industries from health care to agribusiness to mining that stand to lose under President Barack Obama's policy agenda are ramping up lobbying campaigns to derail or modify his plans.1
Yikes! If these lobbyists drown out the voice of the American people, we're through. And right now, our elected officials are hearing a lot more from them than from us.
Next week, Congress will gather for President Obama's health care summit to make plans for the year—they need to hear from real people who want health care reform in 2009! Our goal is to collect at least 200,000 petition signatures and comments to deliver right before the summit.2
But time is short—can you help us reach at least 200,000 petition signatures before the big summit next week? We'll deliver your comments before they meet. Click here to add your name:
http://pol.moveon.org/thisyear/?rc=reg&id=15682-13679562-bnOEHOx&t=3
After you sign, please forward this to friends and family who support health care reform. The petition says: "Don't let the insurance lobbyists delay health care any longer. In this economic crisis, we can't afford NOT to pass quality, affordable health care for all this year."
:confused: Shades of the comment that if you think health is expensive now, wait until you see how much it costs when it's free!
The lobbyists are fighting health care tooth and nail. And so are Republicans in Congress.3 They say we can't afford health care right now. But with health insurance costs driving employers out of business or overseas, we can't afford NOT to pass health care for every American this year!
Right-wing opposition almost derailed Obama's economic stimulus plan. And passing health care will be much harder.
At the President's health care summit next week, members of Congress and policymakers are going to talk about what kind of reforms are possible this year. We have to show them that Americans don't want anything short of quality, affordable health care for everyone with the option of a public health insurance plan. But we need to act fast.
If you sign our petition today, we'll make sure Congress hears from you right before they head into this important health care summit. Click here to add your name:
http://pol.moveon.org/thisyear/?rc=reg&id=15682-13679562-bnOEHOx&t=4
–Noah, Lenore, Justin, Marika and the rest of the team
The last person in America who should be decrying "irresponsible...choices" made in Washington D.C. (or made anywhere else in the United States) is the current occupant of the White House.
ETA: I'd much prefer it if the president did not spend so much effort trying to make the argument that he 'inherited' today's issues and that he had little, if anything, to do with their development.
ZonieDiver
02-26-2009, 18:55
If you want to see great prognosication, go back and read the Senate floor debate transcripts from the early 60's when Medicare was being debated, as to the effect its passage would have on medical costs in the future.
I can't wait for the new proposals to become effective. It'll "fix" everything! :(
President Obama's first speech to a joint session of Congress was stuffed with signals about the new direction his budget will take and meant-to-be reassuring words about the economy. But it was also peppered with exaggerations and factual misstatements.
* He said "we import more oil today than ever before." That's untrue. Imports peaked in 2005 and are substantially lower today.
* He claimed his mortgage aid plan would help "responsible" buyers but not those who borrowed beyond their means. But even prominent defenders of the program including Fed Chairman Bernanke and FDIC chief Bair concede foolish borrowers will be aided, too.
* He said the high cost of health care "causes a bankruptcy in America every 30 seconds." That's at least double the true figure.
* He flubbed two facts about American history. The U.S. did not invent the automobile, and the transcontinental railroad was not completed until years after the Civil War, not during it.
* He claimed that his stimulus plan "prevented the layoffs" of 57 police officers in Minneapolis. In fact, it's far more complicated than that, and other factors are also helping to save police jobs.
The president also repeated some strained claims we've critiqued before.
http://www.factcheck.org/politics/fact-checking_obamas_speech.html
Richard's $.02 :munchin
Instead of looking at the graphs, I think I'll focus on the numbers - and on the underlying assumptions that drive those numbers.
The real problem with the president's budget plan is less a matter of specific programs than of assumptions. As we can see within the postings on this forum, the various programs face both support and opposition. Fundamental beliefs will tend to determine individual positions on the programs; however, whatever the merit of individual initiatives, questions of cost and available revenues remain.
On page 114 of the budget blueprint, we can see sharp increases in the deficit in 2009, 2010, and 2011, followed by substantial reductions from 2012 forward. We also see an increase in the public debt from 5.8 trillion in 2008 to 10.985 trillion in 2012. Two questions assert themselves at this point. The first question is who will purchase the debt. This is not trivial. We do not have sufficient domestic savings to accomplish this, and nations around the world face their own economic dislocations. How long will they choose to purchase our bonds, thus supporting US stimulus spending, in preference to spending on their own infrastructure and stimulus programs? The second question is whether the underlying assumptions involved in the deficit reductions from 2012 and beyond are reasonable or otherwise.
On page 115, we can see large increases in taxes derived from those in the upper tax brackets. It might be worthwhile to consider the Wall Street Journal (2) article appended at the end of this posting with regard to the practicality of such an approach. It is worth noting on page 128, table S6, that higher income workers will pay higher medical and Medicare costs than do others. Thus a substantial amount of increased tax burden is applied to a select group. Some decades ago, while the United Kingdom had very high tax rates, they experienced a "brain drain", in which the more capable earners departed from the high tax venue to other lower tax venues; we might wish to consider whether a similar pattern could develop here. Efforts toward tax avoidance and evasion tend to increase as the cost of paying taxes goes up. In addition, creation of an operating company in an offshore location facilitates tax avoidance. Such an effort is both inexpensive and legal. As long as the company is in fact an operating company, one can effectively avoid US taxation of the corporate earnings. This could well mean a further transference of US jobs to other countries. As a matter of policy, we must ask ourselves what tax rate applied to entrepreneurs and other wealth generators produces optimal results.
On page 132, table S8, we come to the heart of the problem of underlying assumptions. According to the table, the most adverse projection is created by the Congressional Budget Office which suggests we will see a 2.2% decline in real GDP in 2009. It then follows with a 1.5% positive growth in 2010, followed by 4.2% growth in 2011. In contrast, the budget blueprint proposes a decrease in GDP for 2009 of 1.2%, followed by a 3.2% growth in 2010, 4.0% growth in 2011, and the 4.6% growth in 2012. These seem wildly optimistic. We must ask ourselves where the growth will come from. Some $90 trillion in global wealth has been destroyed by the declines in prices in real estate and securities markets (1). It seems likely that this will impair both consumer and business spending for quite some time, even if recovery begins in 2010. In addition, capital formation for large projects may be impaired. Furthermore, both individuals and businesses may be reluctant to spend aggressively when they have so recently experienced significant declines in their net worth. For some years, Americans used their appreciating homes as a sort of ATM, and withdrew money for other consumption. This contributed to the overall economic growth, both in the US and globally. It seems unreasonable to suppose that this pattern of behavior will so quickly resume. Furthermore, we must ask ourselves whether it is prudent to encourage it to do so. In addition, such an increase in growth seems to imply stabilization of the real estate market; however, government efforts to reduce the price of loans seem to suggest that Americans are not earning high enough wages to support the houses they now possess. None of this forms a stable foundation for rapid upward growth of the economy, and so there seems to be little basis to suggest that we will see strong growth in tax revenues, as in the budget blueprint. This reasserts the question of where the money to fund the trillions of dollars in new debt will come from. From whom will we get these vast sums, and at what cost?
(1) "Total equity losses across the globe are mind-blowing. The figure I hear is $30 trillion, and this doesn't include the much higher losses in real estate values, which I understand are running $60 trillion."
Dow Theory Letters, Feb 25th edition
(2) WSJ (http://online.wsj.com/article/SB123561551065378405.html#printMode)
The 2% Illusion
Take everything they earn, and it still won't be enough.
President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."
This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.
Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.
But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.
Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.
Mr. Obama is of course counting on an economic recovery. And he's also assuming along with the new liberal economic consensus that taxes don't matter to growth or job creation. The truth, though, is that they do. Small- and medium-sized businesses are the nation's primary employers, and lower individual tax rates have induced thousands of them to shift from filing under the corporate tax system to the individual system, often as limited liability companies or Subchapter S corporations. The Tax Foundation calculates that merely restoring the higher, Clinton-era tax rates on the top two brackets would hit 45% to 55% of small-business income, depending on how inclusively "small business" is defined. These owners will find a way to declare less taxable income.
The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well.
On that point, by the way, it's unclear why Mr. Obama thinks his climate-change scheme won't hit all Americans with higher taxes. Selling the right to emit greenhouse gases amounts to a steep new tax on most types of energy and, therefore, on all Americans who use energy. There's a reason that Charlie Rangel's Ways and Means panel, which writes tax law, is holding hearings this week on cap-and-trade regulation.
Mr. Obama is very good at portraying his agenda as nothing more than center-left pragmatism. But pragmatists don't ignore the data. And the reality is that the only way to pay for Mr. Obama's ambitions is to reach ever deeper into the pockets of the American middle class.