Obamanation Re-election MegaThread

[Jenksismyhero]

Really, we're losing tax revenue? Compared to the possible situation of several hundred thousand (or if you believe everyone other than Kap, 2k5, and romney) several million people going from employed to unemployed?

 

Tax revenue is the biggest gain out of all of this, except for maybe a few more credit default swap payments out of AIG. Kept enormous numbers of people off the rolls of unemployment and Medicaid and instead kept them as active taxpayers.

 

Well, i'm still in the boat that the world wouldn't have ended if these companies had been allowed to die.

[Balta1701]

Well, i'm still in the boat that the world wouldn't have ended if these companies had been allowed to die.

If the average tax bill for one auto line worker is what, let's say $5000 (10%) for easy numbers, then $25 billion is equal to the tax paid by 500,000 of those workers. If you lose 500k workers by closing auto plants and then spend no money on them, then the loss would be break even.

 

of course, that's not the case. First step is unemployment benefits, which, again for convenience, let's put at $1000 a month (available for 24 months). Then, throw in Medicaid. The average cost per enrolee on Medicaid is over $10k a year because it often gets stuck with the people who are actually sick, but let's assume this group is fairly healthy and say $5k as a base number. Now, all we have to do is put 100,000 people out of work for a period of 1 year to have that $25 billion be less than we'd have spent had we not intervened...and that's with fairly conservative numbers (assuming healthy people, moderate incomes, low tax rates, forgetting about the Social Security tax, and assuming people find work within a year).

 

The world doesn't have to end for that to be a reasonable investment for the taxpayer, it just needs to have saved a small portion of the people in this country who work in the auto industry.

[StrangeSox]

[Y2HH]

 

Using percentages when it comes to this is sneaky and underhanded, even when inflation adjusted.

 

For example, when you have a budget of 50 billion and spend more than that, the % will be way higher based on the smaller numbers, than say...Obama tacking on a few hundred billion to a trillion.

 

A nicer example: If you have 10$, and spend 20$, you just raise the deficit by 100%. But if you have 1 trillion and spend 1.1 trillion, you raised it by only 10%. BUUUUUT, 100 billion dollars is a LOT more than 10 dollars...even if you adjust for 30 years of inflation.

 

Bad.

[NorthSideSox72]

Using percentages when it comes to this is sneaky and underhanded, even when inflation adjusted.

 

For example, when you have a budget of 50 billion and spend more than that, the % will be way higher based on the smaller numbers, than say...Obama tacking on a few hundred billion to a trillion.

 

A nicer example: If you have 10$, and spend 20$, you just raise the deficit by 100%. But if you have 1 trillion and spend 1.1 trillion, you raised it by only 10%. BUUUUUT, 100 billion dollars is a LOT more than 10 dollars...even if you adjust for 30 years of inflation.

 

Bad.

Um, the federal budget has not changed on the order of $50B to $3T, or even close to that. And in fact, I think looking at percentages is one good way to analyze it (but not the only one). Yes, adding $100B is different now than in the 90's. But it isn't 1,000 times different. And if you properly adjust for inflation, it is a pretty solid measure.

 

I don't think anyone is saying that Obama (or really any of these guys) is particularly good at cutting government spending. What it does say in those numbers though, is that the narrative that Dem Presidents tend to spend a lot more than GOP Presidents is basically false.

 

But here is the kicker... what that graph really DOES say, that I've said before, is that you reallu have to look at Congress a lot more than the President to see who spends more or less, and taxes more or less.

 

[Y2HH]

Um, the federal budget has not changed on the order of $50B to $3T, or even close to that. And in fact, I think looking at percentages is one good way to analyze it (but not the only one). Yes, adding $100B is different now than in the 90's. But it isn't 1,000 times different. And if you properly adjust for inflation, it is a pretty solid measure.

 

I don't think anyone is saying that Obama (or really any of these guys) is particularly good at cutting government spending. What it does say in those numbers though, is that the narrative that Dem Presidents tend to spend a lot more than GOP Presidents is basically false.

 

But here is the kicker... what that graph really DOES say, that I've said before, is that you reallu have to look at Congress a lot more than the President to see who spends more or less, and taxes more or less.

 

We disagree. I think using percentages in this manner skews the actual numbers...and makes really large leaps look small in comparison.

 

We agree, however, that congress is responsible, not the President(s). Another reason that graph is useless.

 

In the 80's, average budgets were around 666 billion.

Today, they are around 3.7 trillion.

 

Tacking 200 billion onto 666 billion would result in a higher % than tacking on 200 billion to 3.7 trillion is my point, even when inflation adjusted. It's a common and easy way to play with numbers...they use it in the stock market all the time.

 

While the word trillion has been totally watered down the last few years, that's a HUGE change in spending, and I'm not blaming Obama or the current administration any more or less than the previous one(s). Our budgets are growing massively, and they all promise to stop the bleeding...only to make it even worse than the guy/gal before them. They'll talk about tax loopholes, tax reform, and whatever else...and none of it happens.

 

Also, let me add that it's ok to spend 5 trillion dollars when you take in 5 trillion dollars. It's not the numbers that bother me when it comes to budgets, it's how they simply ignore the word budget and spend whatever they want anyway.

Edited March 15, 2012 by Y2HH

[NorthSideSox72]

We disagree. I think using percentages in this manner skews the actual numbers...and makes really large leaps look small in comparison.

 

We agree, however, that congress is responsible, not the President(s). Another reason that graph is useless.

 

In the 80's, average budgets were around 666 billion.

Today, they are around 3.7 trillion.

 

Tacking 200 billion onto 666 billion would result in a higher % than tacking on 200 billion to 3.7 trillion is my point, even when inflation adjusted. It's a common and easy way to play with numbers...they use it in the stock market all the time.

 

While the word trillion has been totally watered down the last few years, that's a HUGE change in spending, and I'm not blaming Obama or the current administration any more or less than the previous one(s). Our budgets are growing massively, and they all promise to stop the bleeding...only to make it even worse than the guy/gal before them. They'll talk about tax loopholes, tax reform, and whatever else...and none of it happens.

 

Also, let me add that it's ok to spend 5 trillion dollars when you take in 5 trillion dollars. It's not the numbers that bother me when it comes to budgets, it's how they simply ignore the word budget and spend whatever they want anyway.

I particularly like your last, bolded part there. The funny thing is, some of the true liberals like Kucinich have said before they want balanced budgets, but they want to balance it in a way that includes raising taxes. Republicans want to balance by cutting government.

 

However, the Republicans don't actually make any real cuts, even when given the chance. And they make things worse by cutting taxes, which is absurd when the government is running such huge deficits. The liberals, on the other hand, can't raise taxes because it isn't politically viable.

 

[Balta1701]

The other thing that happened there is that the expansion with growing government spending was much stronger than the expansion without growing government spending. And this is not a coincidence.

[caulfield12]

Obama has talked vaguely about tax reform. He has acknowledged the need for entitlement reform and major deficit reduction. But he has never thrown himself All In. He has never displayed an inner passion, a sense that these projects are his life mission, or a willingness to bear the pain that taking on these challenges necessarily entails.

 

It will be interesting, over the course of this campaign, to see what’s underneath the cageyness. It will be interesting to see what, if anything, arouses Obama’s passion to go All In.

 

 

David Brooks, NY Times

[StrangeSox]

The other thing that happened there is that the expansion with growing government spending was much stronger than the expansion without growing government spending. And this is not a coincidence.

 

Bingo, that was the point of the graph.

[StrangeSox]

Obama has talked vaguely about tax reform. He has acknowledged the need for entitlement reform and major deficit reduction. But he has never thrown himself All In. He has never displayed an inner passion, a sense that these projects are his life mission, or a willingness to bear the pain that taking on these challenges necessarily entails.

 

It will be interesting, over the course of this campaign, to see what’s underneath the cageyness. It will be interesting to see what, if anything, arouses Obama’s passion to go All In.

 

 

David Brooks, NY Times

 

lol David Brooks.

[Y2HH]

I particularly like your last, bolded part there. The funny thing is, some of the true liberals like Kucinich have said before they want balanced budgets, but they want to balance it in a way that includes raising taxes. Republicans want to balance by cutting government.

 

However, the Republicans don't actually make any real cuts, even when given the chance. And they make things worse by cutting taxes, which is absurd when the government is running such huge deficits. The liberals, on the other hand, can't raise taxes because it isn't politically viable.

 

If raising taxes balances the budget, and they stick with that budget, I'd have no problems with it.

 

But the fact is, they won't stick to that budget...and we already know that. I'm against raising taxes, as I believe the taxes we currently pay are already insanely into the double-triple-quadruple dip territory (federal, state, township, county, sales, property, gas, water, soda, gas, entertainment, blah, blah, blah), it's not for the same reason Republicans are against it. My issue with them raising taxes is that I already know -- because they've shown it over years and years and years -- if you give them more...they'll simply spend more. Sure, they'll blame low taxes on the fact they don't have enough revenue right now...but even if they did have enough revenue...they'd still be running massive deficits.

 

We do it backwards...it's counter to the way the system was set up to begin with...

 

In bad times, the government is supposed to do exactly what it's doing now (and has been doing).

 

In good times, the government is supposed to do the opposite of that, tighten down spending, and PAY OFF DEBT. Clinton gets credited for balancing the budget and creating a surplus...but the problem is, he never paid down a dime of debt with that surplus...and it vanished the second he left office.

[StrangeSox]

[Y2HH]

 

Congress spends, not presidents.

[StrangeSox]

Either way it's a stark refutation of the idea of Obama being some sort of big-government socialist commie, especially when paired with government employment numbers.

[Y2HH]

Either way it's a stark refutation of the idea of Obama being some sort of big-government socialist commie, especially when paired with government employment numbers.

 

He's spending a lot because he has too...but that said, the question has long been, who will stop the spending? So far, 1 president did for a very short period of time (Clinton), without paying down debt, I might add...and that's pretty much that.

 

Also, Presidents "control" spending, they don't do the actual spending...congress/senate does that...the President just has to allow it by signing the budget or spending, etc...

 

Our debt level is at a tipping point now...and nobody seems to give a s***, be they democrat or republican...and that's the issue.

Edited March 19, 2012 by Y2HH

[Balta1701]

Our debt level is at a tipping point now...and nobody seems to give a s***, be they democrat or republican...and that's the issue.

There really is zero reason to believe that "The debt level is at a tipping point" right now. Demand for US debt is strong. Demand for safe assets in the global financial markets are strong, and has probably outstripped supply for at least a decade, and definitely since fall of 08. And since the U.S. has its own currency and can adjust the value of that currency in response to any hypothetical shocks in debt demand, a tipping point is very hard to come up with anyway.

[NorthSideSox72]

There really is zero reason to believe that "The debt level is at a tipping point" right now. Demand for US debt is strong. Demand for safe assets in the global financial markets are strong, and has probably outstripped supply for at least a decade, and definitely since fall of 08. And since the U.S. has its own currency and can adjust the value of that currency in response to any hypothetical shocks in debt demand, a tipping point is very hard to come up with anyway.

I tend to agree with the idea that a "tipping point" is hard to really pin down. At least, not until later.

 

But, the problem is, look at what the interest load is going to do to future budgets. That is a problem increasing with alarming speed.

 

[Y2HH]

I tend to agree with the idea that a "tipping point" is hard to really pin down. At least, not until later.

 

But, the problem is, look at what the interest load is going to do to future budgets. That is a problem increasing with alarming speed.

 

That's what I meant by tipping point...I don't mean it's going to tip and fall off a cliff and the world will end or anything, it will take a while to catch up to us. The numbers their dealing with now, in interest alone, are astronomical...and getting worse by the day...that's the tipping point I was speaking of...

 

But when that tipping point comes...it will be quite the fall.

Edited March 20, 2012 by Y2HH

[Y2HH]

There really is zero reason to believe that "The debt level is at a tipping point" right now. Demand for US debt is strong. Demand for safe assets in the global financial markets are strong, and has probably outstripped supply for at least a decade, and definitely since fall of 08. And since the U.S. has its own currency and can adjust the value of that currency in response to any hypothetical shocks in debt demand, a tipping point is very hard to come up with anyway.

 

Unfortunately the way that market works, of course demand for US debt is strong...we've never defaulted on a payment. Here is where the "unfortunately" comes in...when and if we do default on a payment, it will be an epic collapse, especially in light of what people just witnessed happen in Greece...everyone will begin cashing in bonds...at the same time...overnight.

 

However, until we begin missing payments, or begin asking for restructures, that demand you speak of will be strong.

 

So basically, what I'm saying is this...

 

Demand will be strong...until the day it's suddenly not.

[StrangeSox]

[Balta1701]

For NSS...the New York Times, a month or so behind those hippy blogs I like to link to, has finally caught on to the idea that the settlement in the mortgage mess gives banks credit for stuff they do anyway.

In February, JPMorgan Chase donated a home to an Iraq war veteran in Bucoda, Wash., and Bank of America waived the $140,000 debt that a Florida man still owed after the sale of his foreclosed home. Over the last year, Wells Fargo has demolished about a dozen houses in Cleveland.

 

Banks do things like this — real estate transactions that do nothing to prevent foreclosure — all the time. But beginning this month, they can count such activities as part of their new commitment to help people stay in their homes.

 

That commitment comes under the landmark $25 billion foreclosure abuse settlement between the government and five major banks announced last month. The settlement promises that of the $25 billion, the banks will give $17 billion “in assistance to borrowers who have the intent and ability to stay in their homes,” according to a summary of the settlement. But more than half of that money can be used in ways that will not stop foreclosures, including some activities that are already standard bank practices.

 

For example, the banks can wipe out more than $2 billion of their obligation by donating or demolishing abandoned houses. Almost $1 billion can be used to help families that have already defaulted move out.

 

“The $17 billion is supposed to be the teeth of this settlement,” said Neil M. Barofsky, the former inspector general for the Treasury’s bank bailout fund known as the Troubled Asset Relief Program. “And yet they are getting all this credit for practices that they do every day.”

 

 

 

....

The government officials who brokered the agreement estimated that a million borrowers would receive relief under the $10 billion-plus for debt reduction and another $3 billion to help borrowers who are current on their mortgages refinance at lower interest rates. Mark Zandi, the chief economist at Moodys.com, estimates that the total will be closer to 700,000 borrowers — 250,000 for refinancing, and 450,000 for principal reduction. That is partly because there are homeowners who owe so much more than their homes are worth that even the deal’s average aid of $30,000 or so of principal reduction will not make them less likely to default.

 

“After looking at the data in detail, I’m beginning to wonder if you’re going to find enough homeowners where principal reduction works in a meaningful way,” Mr. Zandi said.

[NorthSideSox72]

For NSS...the New York Times, a month or so behind those hippy blogs I like to link to, has finally caught on to the idea that the settlement in the mortgage mess gives banks credit for stuff they do anyway.

That is not the same argument we had - which is that HAMP counts towards this.

 

Also, looking at the implied math in the article... About $9B of the money can be used as credits for things that don't directly help people stay in their homes (but still needs to go towards homeowners in some fashion), and SOME of that can go towards things they already do. So... what exactly are you arguing against here? That some 10% of the settlement may involve requiring activities that the bank is likely to do anyway? You can look at that two ways, either it is a backstop, or a give-away. I tend towards the latter, so do you probably. So yes its annoying. But not the $25B give-away to banks you seemed to think it was before.

 

 

[StrangeSox]

I enjoyed Obama's speech to the AP yesterday:

 

(long, but worth copying in toto)

MR. SINGLETON: Thank you, Mr. President. We appreciate so much you being with us today. I have some questions from the audience, which I will ask -- and I'll be more careful than I was last time I did this.

 

Republicans have been sharply critical of your budget ideas as well. What can you say to the Americans who just want both sides to stop fighting and get some work done on their behalf?

 

THE PRESIDENT: Well, I completely understand the American people’s frustrations, because the truth is that these are eminently solvable problems. I know that Christine Lagarde is here from the IMF, and she’s looking at the books of a lot of other countries around the world. The kinds of challenges they face fiscally are so much more severe than anything that we confront -- if we make some sensible decisions.

 

So the American people’s impulses are absolutely right. These are solvable problems if people of good faith came together and were willing to compromise. The challenge we have right now is that we have on one side, a party that will brook no compromise. And this is not just my assertion. We had presidential candidates who stood on a stage and were asked, “Would you accept a budget package, a deficit reduction plan, that involved $10 of cuts for every dollar in revenue increases?” Ten-to-one ratio of spending cuts to revenue. Not one of them raised their hand.

 

Think about that. Ronald Reagan, who, as I recall, is not accused of being a tax-and-spend socialist, understood repeatedly that when the deficit started to get out of control, that for him to make a deal he would have to propose both spending cuts and tax increases. Did it multiple times. He could not get through a Republican primary today.

 

So let's look at Bowles-Simpson. Essentially, my differences with Bowles-Simpson were I actually proposed less revenue and slightly lower defense spending cuts. The Republicans want to increase defense spending and take in no revenue, which makes it impossible to balance the deficit under the terms that Bowles-Simpson laid out -- unless you essentially eliminate discretionary spending. You don't just cut discretionary spending. Everything we think of as being pretty important -- from education to basic science and research to transportation spending to national parks to environmental protection -- we'd essentially have to eliminate.

 

I guess another way of thinking about this is -- and this bears on your reporting. I think that there is oftentimes the impulse to suggest that if the two parties are disagreeing, then they're equally at fault and the truth lies somewhere in the middle, and an equivalence is presented -- which reinforces I think people's cynicism about Washington generally. This is not one of those situations where there's an equivalence. I've got some of the most liberal Democrats in Congress who were prepared to make significant changes to entitlements that go against their political interests, and who said they were willing to do it. And we couldn't get a Republican to stand up and say, we'll raise some revenue, or even to suggest that we won't give more tax cuts to people who don't need them.

 

And so I think it's important to put the current debate in some historical context. It's not just true, by the way, of the budget. It's true of a lot of the debates that we're having out here.

 

Cap and trade was originally proposed by conservatives and Republicans as a market-based solution to solving environmental problems. The first President to talk about cap and trade was George H.W. Bush. Now you've got the other party essentially saying we shouldn’t even be thinking about environmental protection; let's gut the EPA.

 

Health care, which is in the news right now -- there's a reason why there's a little bit of confusion in the Republican primary about health care and the individual mandate since it originated as a conservative idea to preserve the private marketplace in health care while still assuring that everybody got covered, in contrast to a single-payer plan. Now, suddenly, this is some socialist overreach.

 

So as all of you are doing your reporting, I think it's important to remember that the positions I'm taking now on the budget and a host of other issues, if we had been having this discussion 20 years ago, or even 15 years ago, would have been considered squarely centrist positions. What's changed is the center of the Republican Party. And that’s certainly true with the budget.

 

In response to yet another debt-obsession question:

I said this a few months after I was elected at the first G20 summit. I said the days when Americans using their credit cards and home equity loans finance the rest of the world’s growth by taking in imports from every place else -- those days are over. On the other hand, we continue to be a extraordinarily important market and foundation for global economic growth.

 

We do have to take care of our deficits. I think Christine has spoken before, and I think most economists would argue as well, that the challenge when it comes to our deficits is not short-term discretionary spending, which is manageable. As I said before and I want to repeat, as a percentage of our GDP, our discretionary spending -- all the things that the Republicans are proposing cutting -- is actually lower than it's been since Dwight Eisenhower. There has not been some massive expansion of social programs, programs that help the poor, environmental programs, education programs. That’s not our problem.

 

Our problem is that our revenue has dropped down to between 15 and 16 percent -- far lower than it has been historically, certainly far lower than it was under Ronald Reagan -- at the same time as our health care costs have surged, and our demographics mean that there is more and more pressure being placed on financing our Medicare, Medicaid and Social Security programs.

 

So at a time when the recovery is still gaining steam, and unemployment is still very high, the solution should be pretty apparent. And that is even as we continue to make investments in growth today -- for example, putting some of our construction workers back to work rebuilding schools and roads and bridges, or helping states to rehire teachers at a time when schools are having a huge difficulty retaining quality teachers in the classroom -- all of which would benefit our economy, we focus on a long-term plan to stabilize our revenues at a responsible level and to deal with our health care programs in a responsible way. And that's exactly what I'm proposing.

 

And what we've proposed is let's go back, for folks who are making more than $250,000 a year, to levels that were in place during the Clinton era, when wealthy people were doing just fine, and the economy was growing a lot stronger than it did after they were cut. And let's take on Medicare and Medicaid in a serious way -- which is not just a matter of taking those costs off the books, off the federal books, and pushing them onto individual seniors, but let's actually reduce health care costs. Because we spend more on health care with not as good outcomes as any other advanced, developed nation on Earth.

 

And that would seem to be a sensible proposal. The problem right now is not the technical means to solve it. The problem is our politics. And that's part of what this election and what this debate will need to be about, is, are we, as a country, willing to get back to common-sense, balanced, fair solutions that encourage our long-term economic growth and stabilize our budget. And it can be done.

 

One last point I want to make, Dean, that I think is important, because it goes to the growth issue. If state and local government hiring were basically on par to what our current recovery -- on par to past recoveries, the unemployment rate would probably be about a point lower than it is right now. If the construction industry were going through what we normally go through, that would be another point lower. The challenge we have right now -- part of the challenge we have in terms of growth has to do with the very specific issues of huge cuts in state and local government, and the housing market still recovering from this massive bubble. And that -- those two things are huge headwinds in terms of growth.

 

I say this because if we, for example, put some of those construction workers back to work, or we put some of those teachers back in the classroom, that could actually help create the kind of virtuous cycle that would bring in more revenues just because of economic growth, would benefit the private sector in significant ways. And that could help contribute to deficit reduction in the short term, even as we still have to do these important changes to our health care programs over the long term

[NorthSideSox72]

(long, but worth copying in toto)

 

 

In response to yet another debt-obsession question:

He makes some good points there, and I agree with a lot of it. But some of it, he is also choosing to paint a skewed picture. He says the problem isn't out of control discretionary spending - and he's right about that... he says that the problem is revenue that has decreased by 15 to 16%. Well, really, what both he AND the GOP are in denial about is that the real and problematic cost growth is in three specific areas: Social Security, Medicare/caid, and Defense. BOTH parties are ignoring that.

 

That said, his overall point that the GOP is clearly being less willing to compromise, that their crusade against discretionary spending is missing the larger point, and that some revenue increases will be necessary to get us back to neutral, are all right on the money.