Here’s why Obama and the Tea Party are both right
The horrible train wreck that just consumed America’s political system — and nearly devoured our economy — has been largely cast as a collision of two rigid ideologies.
Republicans want to cut spending sharply, in an effort to bring the Federal deficit down to manageable levels. Democrats want to hike taxes and other forms of revenue, to curtail the dangerous debt gap while sustaining social programs.
But the ugly reality, one that both parties are afraid to tell their constituents, is that to close this gulf we will have to take the most painful parts of both plans and merge them together.
Currently, we spend nearly two dollars for every dollar taken in by the IRS and the Treasury.
The most progressive economists will tell you that that disparity needs to be slashed pretty quickly, though some would argue that cuts shouldn’t begin until the recession is over.
The most ambitious conservative plan — known broadly as “cut, cap and balance” — would gradually phase spending back from current levels, which hover around 22.5% of America’s GDP.
The goal would be to spend around 19.9% of GDP by 2021. That may not seem like a huge change, but it means that roughly ten percent of total Federal spending would be eliminated.
When you’re talking about a government as big as ours, that’s huge.
This has been characterized by some on the left as draconian, tea party driven crazy talk. And there is no doubt that cuts of this size will be painful. But in fact that 19.9% figure is about the norm for the post-World War 2 era.
If it was good enough for the Kennedy and Johnson administrations, surely our Federal government can live within those same means now?
But if liberals need to accept the reality of some common-sense belt-tightening, conservatives need to face an even tougher reality when it comes to taxes.
Currently, Federal taxes account for only about 15% of GDP. Which means that even if we hit the tea party’s goal for shrinking government, we would still be running enormous and unsustainable deficits into the future.
Some on the right insist that taxes can’t be hiked, even to the levels we saw during the Clinton years. (The post-War average for Federal taxes is roughly 18% of GDP, well above current levels.)
They pretend that we can close the gap simply by cutting government and supercharging the economy. But it’s exactly that kind of easy-answer fantasy that got America into this trouble in the first place.
So here’s the simple, fiscal reality: In order to pay for the size of government that even tea party activists say they want (again, 19.9% of overall GDP) Federal revenues will have to rise at least as much as President Obama has requested.
Tags: politics
NO! GAH!
Brian, I said the same thing at the other post, when I yelled at ATC for the stupid “both sides do it” storyline media folks fall back on, regardless of the facts on the ground.
Obama started at a center-right position, offering much more spending cuts than tax hikes. Nowhere was a millionare’s tax discussed, or anything that is a ‘traditional’ tax hike. About as close as a tax hike got were the closure of tax loopholes. Only in this current political climate would a takeback of government money be called a ‘tax hike’.
What did we end up with? No tax increases, all cuts.
Democrats do NOT have a rigid ideology. Liberals and progressives, that’s a better argument. But the current Dem leadership in DC work from a position of cowardice, afraid to do anything that the GOP can use to attack them of being socialist/communists. There is no one from “the left” in a a position of power in any of these negotiations.
Brian M. “…liberals need to accept the reality of some common-sense belt-tightening…”
I am really sick and tired of hearing that sort of bogus statement. I have been attending monthly meetings of liberals on and off for about 8 years and discussion often revolves around how to reduce spending. There is no debate on that.
It is a Satan Sandwich that the Right has been serving up about liberals for a long time and the Media keep repeating it until most people believe it is true.
I don’t mind a little baloney, but stop with the Satan Sandwiches.
Brian – It is not “some would argue that cuts shouldn’t begin until the recession is over”. It is most economists. That is – virtually everyone agrees the deficit needs to be reduced, but many believe that the big mistake during the depression was to focus on debt reduction too soon, and that we are making the same mistake.
Also – with the aging population with the baby boomers entering retirement, the percentage of GDP that has to go to government social services (medicare and social security) has to increase over previous levels just to stay the same.
The tea party ideology that insists on third world size government…. well you get what you pay for.
Also – Harry Reid said he is willing to appoint Senators to the committee who are open to dealing with entitlement reform, but the Republicans so far claim to be unwilling to appoint anyone will even consider any tax increases on anyone.
It is not true that liberals and conservatives are equally to blame for this situation. Obama and the Tea party are not both right. (unless you mean right of center :-)
“Democrats want to hike taxes and other forms of revenue, to curtail the dangerous debt gap while sustaining social programs.”
Geez, didn’t we just have the discussion about journalists botching the debt ceiling story? In my world Democrats were offering large cuts in spending with a little increase in revenue. It’s Democrats that are saying we need cuts and revenue increases, not Republicans or the TEA party. Isn’t one group “more right” than the other?
While reading this I couldn’t help but think about your post from a few days ago, “How Journalists have botched the debt ceiling story”
Spending: The Dems know that cuts are needed, accept that cuts are needed, have offered cuts, and want to make cuts. The only debate between the GOP and the Dems when it comes to spending is over what should be cut.
On the other hand…
Revenue: The GOP refuses to consider ANY revenue solutions. They refuse to consider eliminating tax breaks for the wealthy, they refuse to close loopholes for profitable mega-corporations. They have signed pledges saying they will never do this.
Implying, in any way, that these two sides have been equally stubborn, or guilty in creating this crisis, is simply not fact.
Brian, you’re great, but a big fail here. As pretty much every comment above points out.
No I agree with him on this one!
Nobody wants the truth and that is why we get fed the fantasy. We do need both tax increases and pretty severe spending cuts.
Both of those actions are reductions in aggregate Demand in the short run for an economy, both would cause more unemployment right now, which is not what we need.
The bizarre thing is that most Republicans understand a need for some sort of tax increases and most Democrats I think understand the need for some cuts.
We have two options do it ourselves and make some choices or let the international credit markets do it for us, either way this is going to happen, we will in the end borrow less it is just a matter of when and how.
I think posters here who are suggesting that Democrats are being entirely realistic about budget balancing are cherry picking.
Yes, President Obama has staked out a fairly fiscally conservative position, even putting entitlements on the table.
But he’s not the entire Democratic Party.
I read a lot of progressive blog posts suggesting that if we just eliminate the Bush-era tax cuts everything will be fine.
And we still have Senate majority leader Harry Reid making noises about Social Security and other big entitlements being “off the table.”
Finally, it’s simply a fact that a lot of people on the left have characterized shrinking the Federal government to 19.9% of GDP as tea party zealotry.
But as I say, 19.9% is the norm for American society.
I’m no fan of falsely equivocal journalism.
But pointing out that Democrats and Republicans both made this deficit (and have both contributed to the societal fictions that perpetuate the deficit) is simply the truth.
–Brian, NCPR
“President Obama has staked out a fairly fiscally conservative position, even putting entitlements on the table. ”
The only mention Obama made about entitlements was a foggy reference to increasing the age of Medicare. He’s clueless beyond that.
We don’t have a revenue problem. We have a spending problem.
The only way to cure it is to limit access to more $$. The US government (and State governments, too) are addicted to spending. They need to go through withdraw.
We could increase taxes and close every loop hole and still have a major problem, it would not be enough. In addition we already have the highest corporate tax rate in the industrial world, the corporations simply leave or report their profits elsewhere, US corporations end up paying less than countries with lower corporate tax rates; raising corporate taxes does not work in a global economy.
Brian – “equating” the Democrats and progressives who don’t want to touch entitlements with the Tea Party Republicans is silly journalism. They are still going to call you biased.
JDM – we have a very serious revenue problem.
“Finally, it’s simply a fact that a lot of people on the left have characterized shrinking the Federal government to 19.9% of GDP as tea party zealotry.”
A lot? How many? Name them please.
I don’t care to pay one more $ in taxes. In fact, I am rather willing to see my tax payments go down.
The only references I have heard with respect to raising taxes is “tax the rich”. In other words, tax someone else.
As soon as someone else stands up and volunteers their OWN money, I will listen to the revenue problem. Until then, it’s strictly spending.
I’m more than willing to have my taxes go up to pay for things the American people say they want.
The fact of the matter is that the poor and the middle class (those making under $250,000) are being blackmailed by the rich, the Republicans, the Tea Party and large corporations, including the banks and stock market.
They demand their “entitlements” while at the same time they demand everyone else give up theirs. If they don’t get theirs and we don’t give up ours, they threaten to move out of the country.
Maybe we should threaten not to buy any stocks,bonds or products made by large corporations who are moving their manufacturing out of the country anyway.
Maybe we are near a French Revolution moment where the best investment will be in guillotines designed for the rich so that their heads can be put back on straight.
JDM – President Obama has frequently cited himself as someone who should pay more taxes. Many many liberals are in the income brackets that would go up the most. Bumper sticker thinking is frequently wrong.
Congratulations, Brian. You’re to the right of David Frum. You’re safe from the next James O’Keefe sting operation:
http://www.cnn.com/2011/OPINION/08/01/frum.debt.republicans/index.html
Comparing “progressive bloggers” and “people on the left” to the elected leaders and official position of the GOP…
Talk about cherry picking.
Does that really strike you as an accurate or meaningful way to discuss this issue?
In what I can only assume is an effort to seem unbiased, you continually stretch and reach to find liberal positions that seem as radical or off center as those on the right.
The problem is that in order for you to find those comparable positions you end up searching in the left’s fringe. Does anyone find it reasonable to compare the fringe of one party… or a few people from one party… to the official positions of the elected caucus of the other?
Peter Hahn: “President Obama has frequently cited himself as someone who should pay more taxes.”
The hypocrite-in-chief pays back taxes on the Rezko property, and other dubious personal dealings, I’ll believe his rhetoric.
When President Obama holds tax-cheat Geithner to the same standard as you and me, then I’ll believe his phoney rhetoric.
He has no intention of paying “the right amount” let alone one penny more.
I am not going along with his rhetoric, or any other tax-cheating liberal.
Lemming thinking is typically wrong.
When discussing who’s ‘left’ and who’s right we should bear in mind that 95% of the people in Washington are on the right. David Kucinich and Bernie Sanders are the only ones I can think of that are clearly on the left. It’s really a question of how far right the rest are. If they are anywhere near the middle they are probably being characterized as “socialists”. Take a look at PoliticalCompass.org to get a realistic picture of what it means to be on the left or the right, in particular look at some of the past election charts.
As for the debt, of course we need to increase revenues AND reduce spending. When you have a gap the size that we currently do one or the other isn’t enough. The notion that lowering taxes on corporations and the rich increases revenues by spurring economic activity (trickle down) has been shown to be wrong. We’ve been doing that in varying degrees for 30 years and it shan’t worked. The notion that you can spend your way out of deficits without pain has also been proven not to work. We need to raise taxes on those who have benefited most (if you’ve benefits disproportionally, you should contribute disproportionally) and invest in carefully targeted areas that are shown to contribute to growth.
Let’s see. Raising taxes on the rich, according to the Obama numbers, raises $700B over 10 years, or $70B per year, or about 17.5 days of funding the deficit.
The other 348 days would have to be funded by people out-of-work. Because raising taxes on the rich will destroy the already-weak economy.
Last January, Obama said that raising taxes is the “last thing you want to do in a recession”.
Obama also signed the bill to lower taxes on corporate jet owners.
Obama is quite the leader.
That Frum article is excellent. Thanks for posting the link oa.
“They pretend that we can close the gap simply by cutting government and supercharging the economy. But it’s exactly that kind of easy-answer fantasy that got America into this trouble in the first place.”
Both the left and the right want to increase revenue. The left wants to increase it by increasing the amount of taxes that some people pay. The right wants to increase it by increasing the number of people paying taxes. Income tax, capital gains tax, etc.
Paul – that’s incorrect. The goal of the right is to shrink revenue. Remember Grover Norquist’s mantra: government so small you can drown it in a bathtub
JDM,
let’s see you take that math and apply it by eliminating all non-military, non-discresionary spending. betcha a nickel it comes up short as well.
Whatever…The markets are speaking, and going into the tank. Turns out a lot of smart people with money are saying the deficit isn’t a big deal right now, but unemployment and low demand are. Maybe Obama and the Tea Party are actually both wrong.
verplanck:
I actually agree. I think the penny plan, or cutting 1% across-the-board (on average) will work.
I agree with Paul’s assessment and I am in favor of raising taxes by increasing the number of tax payers, rather than the amount-per-payer.
Brian – you probably could equate the left-wing radicals of the 60’s with today’s Tea Party Republicans. I have often wondered if they are the same people, just older.
Well when there are no good answers everyone is mad and upset and looking for someone and something else to blame.
Maybe we are just going to have a depression and it is something that is going to happen regardless of what any policy makers do or don’t do?
The period we are in resembles the 1930’s more than other periods, combine that with a misguided attempt to cut government spending right now, and you get a worse depression. The real criminals if you want to blame someone are all of the policy makers and citizens on the Left and the Right who continued to run deficits during the good times when there was no need to but everyone demanded their goodies. Now when we need spending we have blown the bank already.
Clinton spent $547 million a day.
Bush spent $1.5 billion a day.
Obama is spending $4.1 billion a day.
We have a spending problem plain and simple.
Yes Democrats are often guilty of over spending. But Clinton left a huge federal surplus. Bush and Greenspan deliberately wanted to reduce the surplus. However, the Bush tax cuts overshot the mark and along with starting two wars we grew the deficit. Instead of correcting and raising taxes like Reagan did, Republicans during the Bush administration said deficits don’t matter. Now they are consumed with the issue because there is a Democratic President and they see it as a way to reduce government spending on SS, Medicare and other social programs their ideology despises.
Progressive alternative budget proposals have been presented but the press ignores them because of their conservative bias. Here is a budget that eliminates the deficit in 10 years:
http://cpc.grijalva.house.gov/index.cfm?sectionid=70§iontree=5,70
verplanck, which political office is it that Grover Norquist holds again? I imagine that even he supports adding more private sector employees to the payrolls. If you support that, then you support increased revenue. Do the math, you will raise more revenue, more quickly, by adding taxpayers as opposed to raising tax rates.
myown, interesting that budget cuts spending by just about what this recent deal did. So you are on your way?
The cuts have to precede the revenue moves, otherwise they will never happen that is just human nature.
“they see it as a way to reduce government spending on SS, Medicare and other social programs their ideology despises” That is really the kind of angry (and false) rhetoric that has lead to the kind of deadlock we see in Washington.
Paul – as Verplank said above, Grover Norquist does not support raising revenue, because he wants to shrink government. He wants to decrease revenue to force government to shrink. He probably does support increasing private sector employment, and may believe that a smaller government will lead to more private sector employment.
Paul I disagree, this is the position of Rand Paul, Paul Ryan, Kyl, DeMint, etc and many other Republican politicians, to say nothing of the conservative think tanks funded by wealthy Republicans, Grover Norquist and on and on.
And how do you add more private sector employees to the payroll when there is little demand from consumers do to their overhanging personal debt problems from the housing/mortgage bust. Giving tax cuts to business will not create jobs if there is no demand. Corporations already have huge sums of cash but won’t hire until demand picks up. What they are doing is buying equipment that will make US unemployment worse and outsourcing their labor needs to foreign countries.
We bailed out Wall Street and the Big Banks but forgot about the little guy. Without a program to reduce private debt there will not be enough demand to increase employment. And without some additional temporary government programs to increase employment there will not be enough demand to increase private sector jobs.
Paul – also “they see it as a way to reduce government spending on SS, Medicare and other social programs their ideology despises” is a true statement. It is possible that an ideology can’t really despise something, but that doesn’t make the statement false.
If myown had said simply “they see it as a way to reduce government spending on SS, Medicare and other social programs” you couldn’t have complained or said
“That is really the kind of angry (and false) rhetoric that has lead to the kind of deadlock we see in Washington”.
Peter, I respectfully disagree. What I think she meant and she can clarify is that these republicans she is describing despise these social programs. That is blatantly false. Just because a group of political leaders feels that major changes (similar to those described by the presidents commission) need to be made to these programs to preserve them and bring them in line with the realities of the twenty first century does not mean that they despise the programs by any stretch of the imagination, quite the contrary in some respects.
Paul – You are focusing on whether or not myown was justified in implying that the people who adhere to the “tea-party ideology” (if thats the right term) despise medicare and social security etc. Thats probably hyperbole – poetic license. They are trying to reduce tax-payer (government) support for social services. That is a fact. some “despise” the government involvement in social services, others just want to spend less, still others think it is part of the nanny state etc.
I think Paul lives in a bunker. She apparently does not pay attention to history or the words of current right wing politicians. Here is an article by Republican Bruce Bartlett that clearly states right wing Republicans have longed to repeal New Deal/Great Society programs.
http://www.thefiscaltimes.com/Columns/2011/07/22/Barack-Obama-The-Democrats-Richard-Nixon.aspx#page1
And the most recent Bush proposed to change SS to individual 401Ks. There are current Republican proposals to eliminate the EPA and many other federal agencies. This is plainly a radical plan to reduce of the federal government according to a right wing political philosophy that despises “big government”, especially social programs. Also, read Ayn Rand who is revered by right wing Republicans. It couldn’t be clearer that these people want to radically remake the US government by reducing or eliminating programs that regulate business or provide services or security to individuals. To say otherwise is just ridiculous.
A depression may be no more political than an earthquake or a tornado. Sometimes we all look for someone or something or some “other” to blame.
Part of the problem is that instead of looking to solve problems everyone is looking for an evil force to blame, that is where Beck was coming from and I think that is where some of the Left is coming from. The Koch brothers don’t have an impact on our lives anymore than Soros does or the trilateral council and on and on.
If government spending alone was the answer than states with relatively high levels of government spending and taxes should have less poverty than those who have less government spending, and that is not the case in the US.
Mervel, the Koch brothers fund all sorts of rightwing think tanks that do have an impact on the average person’s life. They funded the start of the Tea Party and look at how that is affecting us. Check out these articles:
http://www.iwatchnews.org/2011/04/06/3936/kochs-web-influence?utm_source=publicintegrity&utm_medium=social_media&utm_campaign=twitter
http://www.inthesetimes.com/article/11603/publicopoly_exposed/
Merval, I suggest you read “Merchants of Doubt”. There are a select few right wing individuals that have definitely had an unfortunate impact on our lives.
Sure and there are a select number of Left wingers doing the exact same thing, big deal. The tea party is not new, I have a couple of relatives who are into it, they are not influenced by the Koch brothers they were and are cultural conservatives who are isolated from society to some degree, they don’t like change and they feel America is going down the toilet since the 1960’s cultural revolution, they and many others have felt that way for 50 years. The fact is they should not be Republicans if they acted in their self interest. They should be conservative Democrats, but for some reason the Democrats lost this group of people and are only making it worse by talking down to them. I do think the Liberal Left has lost the culture war for the Democrats.
Depressions are not an evil plot, they may be made worse by bad policy but I honestly think always hunting for the ultimate enemy, the “plot” is part of our problem and our inability to try to solve our problems. I am not being myopic, yes there are people who are greedy they want to keep what they have and to make sure they get more, but I don’t think they have the influence that we may think. That goes for the Left and the Right.
So Brian Mann went on vacation in, uh, Europe, yeah…Europe, that’s it. And that giant pod next to his bed, nothing to worry about. Yes, the fact that Brian went away a seemingly normal, reasonable guy and came back with a distorted idea of what is going on probably has nothing to do with the just-soak-in-water-FoxNews-sponge-pod he found in his mailbox.
Don’t you worry, your sponge-pod is coming soon. Check your mailbox. Nighty-night!
So really how bad would it have been to invest in your own 401K?
Some of us will never see the SS we and our employers have paid into for years. At over 15% per year they pissed away alot of my money where did it go?
roady, SS is perfectly safe. The danger is that a bunch of reactionary hoodlums have been eyeing the trillions of dollars in the SS system. They want to get their greedy mitts on that money and put it into Wall Street where they can use it as their own slush-fund for doing dirty deals.
People have been lying to you about 401k’s. They are NOT as safe as the SS system.
As we have seen lately, a person can retire today and the bottom can drop out of the Market tomorrow and all that money you thought you had will disappear like Saddam’s weapons of mass destruction.
Ah, the battle over the debt ceiling. What I find most bizarre about this entire escapade is all the while this drama was unfolding in Washington, very little attention was paid to one of the biggest drains on our treasury that is causing our fiscal problems in the first place. That would be, of course, our funding for wars. Here’s a little article that explains much better than I can what exactly I’m referring to:
Lowering America’s War Ceiling?
By Tom Engelhardt
August 2, 2011
http://www.amconmag.com/blog/lowering-americas-war-ceiling/