Sometimes you just have to bring it down to the simple things you find around the typical household to make a matter crystal clear.
That’s what letter writer George Peel of Henderson does in his letter to the editor in today’s Las Vegas newspaper. He writes about a family budget thusly:
… pretend these numbers are a typical household budget:
Family income: $24,500.
Family spending: $35,000.
New debt on credit card: $10,500.
Outstanding balance on credit card: $164,000.
Total budget cuts: $120.
Now, add eight zeroes to each of those figures and you have the family known as the federal government.
Thanks, George. Please explain that to President Obama, who told John Boehner, “We don’t have a spending problem,” and to the Democrats in Congress who want to raise taxes by $1 trillion.
Barack Obama, the all-time bunco artist is in residence, the problem is not that the members of the Congress, both houses and both parties, are unaware of the burden placed on taxpayers, they lack the will or power to stop him. The political culture, as practiced for decades by the denizens of Washington DC, and the left leaning media, has now raised the office of the presidency to a level of omnipotence. At the risk of nyp10025 calling me a racist no white man would be allowed the leeway given Obama by the Congress and courts on his politicies, many constitutionally questionable, plus the press remains infatuated, not necessarily because he’s so wonderful but because he stips the pot almost hourly, they have NEWS to report. Four years with no formal budget, debt beyond historical levels, unemployment sky high with statistics manipulated, close to 50% of the population on food stamps, Americans murdered in Benghazi, socialized medicine on coming, on and on, no matter, the president is unfazed, untroubled, what’s a trillion here or there, things are going his way.
Vernon, don’t worry about what NYP thinks, he is a spineless shadow.
Vernon, you need to take a breath and step back, I am afraid you are going to fall flat over the cliff to never never land. And you don’t need nyp to call you a racist, you did that yourself.
I would say it’s not only the remark above, but his constant references to the President as a “street hustler.”
But to get back to the topic at hand: why in the world would anyone analogize the budget of a national government with a reserve currency to that of a family? What sense is that?
And, even if drawing such an analogy were at all useful, where is the figure for the family’s 30-year home mortgage?
So if the currency was not a reserve currency the analogy makes sense?
Vernon, tell the truth now; what were you saying as the Bush administration piled up the greatest deficit ever during GOOD TIMES? I trust that you were lambasting him with the same vigor as for Obama.
I think we all agree that federal spending needs to be reduced, but no one seems to have any specifics about how and where. Let’s hear some suggestions.
I suggest first of all, that Medicare and Social Security be considered as self-funded individual programs, separate from the rest of the budget. We can also reduce defense spewnding by forcing our allies to pay for their own defense, keeping our noses our of other countries’ business, and staying out of stupid wars – or at least fighting them correctly.
Welfare can be reduced by making everyone work for their check, even the disabled. Medicaid can be reduced by refusing to pay for massive expenditures such as liver and heart transplants (rationing)and by taking a variety of measures to reduce medical costs in general (that’s a whole ‘nother discussion).
Don’t “consider” them self funded actually take Social Security Medicare/caid out of the general fund and you have a deal.
What’s the correct way to fight a stupid war?
No, the fact that the United States of America is a superpower that controls its own currency and that the dollar is a reserve currency is only one of many reasons why analogies to Harry and Louise figuring out the household budget over the kitchen table are idiotic and harmful. Public finance is a well-developed branch of economics. No public finance economist would ever use such a misleading analogy.
Funny you would choose Harry and Louise, almost got it. Her name is Landra. And they don’t have to budget like most either.
Perhaps a little more simplicity and clarity is in order for public finance.
Nyp’s right, Steve. The Wile E. Coyote super geniuses got us into this mess, but we’re too stupid to understand it, so we shouldn’t question anything they do.
Wasnt Wile E. Coyote. It was the Bush tax cuts tat created a structural deficit, plus two unfunded wars, plus healthcare cost inflation.
Can’t help but think of the latest Publishers Clearing House sweepstakes prize.
5 grand a week for the rest of your life then the whole life of a “special someone you choose” The prize could last two whole lifetimes.
This is actually really great for Publishers Clearing house. Over the time of the prize the payout is worth less and less as Publishers continues to work with new money, effectively paying out less and less.
This clearly shows the effects of public finance on real money.
“Wasnt Wile E. Coyote. It was the Bush tax cuts tat created a structural deficit, plus two unfunded wars, plus healthcare cost inflation.”
Then I guess the government did the right thing by removing all the Bush tax cuts to eradicate that structural deficit.
Oh wait a minute, the Wile E. Coyote super geniuses didn’t do that, did they?
I guess these numbers are better.
U.S. tax revenue in fiscal year 2012: $2,450,000,000,000.
Federal spending in fiscal year 2012: $3,500,000,000,000.
New debt: $1,050,000,000,000.
Current national debt: $16,400,000,000,000.
“Fiscal cliff” budget cuts: $12,000,000,000.
But they tell the same story.
Didn’t remove enough of them.
“Didn’t remove enough of them [Bush tax cuts].”
Nyp on December 27: “I look forward to Congress passing the Obama tax cuts in early January.”
Are you an economist, Nyp? I’m wondering if you were the guy who prompted President Truman to say, “I wish I could find a one handed economist,” because they all had a penchant for saying, “On the other hand…”
Ahh yes, the Obama tax cuts.
I noticed those in my take home pay last Thursday.
I don’t make 450,000 but I am paying more in taxes now than I was last year. Thanks for the cut Mr. President!
Street hustler is good and I’ve added “all-time bunco artist” to my description. As for George Bush piling up debt, the Progressive/Liberal/Democrts had both houses of the Congress in his last two years. His problem was that he didn’t ignore the Congress as Obama has been doing, I have to hand it to Obama, he has made the Congress and Supremene Court defunct, something the previous 43 presidents couldn’t do.
Steve, that increase in your payroll tax was because the republicans turned down Obama’s request that the 2009 payroll tax cut from the stomulus be extended.
Sure, Nyp. And Obama publicly fought to keep that rate the same… Stop your one sided argument, no side was going to “extend” the Social Security rate.
If the libs would open up their “open” minds things could actually get changed. But you guys spend so much time with the “my way or the highway” attitude and blaming everyone else for not compromising with you, you can’t see its you being obstructionist to your own ideas!
He did publicly fight to keep the rate the same. But he folded on it in order to avoid going over the fiscal cliff. For myself, I would rather he stood firm on keeping the payroll tax holiday, but required the lost revenues to be offset by reducing the income threshold to $250k for the rollback to Bill Clinton tax rates.
But the GOP was insistent that the payroll tax rates go up.
Obama fought really hard: http://www.huffingtonpost.com/2012/11/26/payroll-tax-cut-obama-administration_n_2194356.html
That one sided view Nyp, you guys need to knock it off.
1. The Obama Administration didn’t dig in its heels against Republican insistence that the payroll tax holiday put in place by the 2009 Obama stimulus plan not be extended.
2. Therefore it is the Obama Administration’s fault that the payroll tax holiday has ended and people’s payroll taxes have gone up.
Puh-lease Nyp! It was all sides that did nothing to “extend” that particular rate. You guys just can’t let go of your one sided point of view. You should use the point happily nestled under your cap and think for a change.
I thought we already had this tax cut business settled. You guys have to stop ignoring history. In recent history, revenues after tax cuts have never climbed back to the pre-tax cut levels. They do rise after tax hikes every time. http://en.wikipedia.org/wiki/File:CBO_-_Revenues_and_Outlays_as_percent_GDP.png
Milty, the “correct way to fight a war is to follow the Powell doctrine, be prepared for post war management, and don’t get into a simultaneous second war unless there is no other choice.
Vernon, your claim that Obama ignores Congress rings hollow in light of the fact that Obama has used his veto only 2 times. Reagan used his 78 times. So WHO ignored Congress?
Obama cut payroll taxes as part of the stimulus. He wanted the tax cut to continue. Republicans insisted that the payroll tax cut come to an end.
It’s that simple. You are reduced to arguing that that Obama the is responsible for increasing payroll taxes because he acceded to the Republican demands.
That’s a funny kind of logic.
“That one sided view Nyp, you guys need to knock it off.” He can’t, Steve. That’s not how his side plays the game. And they all look at it very much like a game of who can win, and who loses.
They’re still blaming Bush! Wow. Even more removed from reality, some liberals are still blaming Reagan.
They’re natural, God given, self preservation instinct is tragically missing. And with the big ø we have in the White House, AND Mr. crook/ senile old man as Senate majority leader; they’re really feeling their oats.
Even if they burn the whole country down.
I used the wrong “their”. Please excuse the edit and carry on!
Those that ignore history are doomed to repeat it, Athos. Unfortunately, reality has not supported your theory, so you appear to discard reality. Are you claiming that the historical facts I’ve pointed out are irrelevant or incorrect or do you merely choose to ignore facts that are inconvenient?
CEO Rod Davis said it was necessary to reduce the payroll as reimbursements from Medicare, Medicaid and private insurance companies continue to tighten. “This is a reality every hospital and health system in the U.S. is facing and it is a particular challenge for not-for-profit organizations like ours,” Davis said in the statement.
This is NOT what ACA was touted to for. But it IS what ACA IS doing. They first go for the admin and support. Next are the providers already in short supply.
http://www.lvrj.com/business/st-rose-dominican-to-eliminate-100-positions-at-three-hospitals-185719071.html
That is exactly what ObamaCare was designed to do – tighten up payments to doctors and hospitals, the major source of healthcare cost inflation.
ACA is supposed to make people lose their jobs. Great.
Like the way Amazon made people lose jobs at Borders.
So the answer is to close all the competition by putting them out of business.
The answer is to make healthcare as cost efficient as it can be.
Good news, Steve. Time Magazine has an article titled “Ten Ways to Fight Back Your $1,000 Payroll Tax Hike.” You’ll love some of the great suggestions they have to offer.
http://business.time.com/2013/01/08/10-ways-to-fight-back-your-1000-payroll-tax-hike/
By putting all the competitors out of business?
What if we already do all those things, Milty?
I’m glad you’re pleased with the current state of the Union, Rinny. I’m not. I can’t find anyplace or anytime in history where “spreading the wealth around” by government redistribution actually worked.
But there are many places and times where Ø’s policies have utterly destroyed great countries.
And given the congress he’s had to work with, why would Dr. Utopia have to veto anything? Now, compared to who was running Capitol hill in Reagan’s day, it’s small wonder he didn’t veto more than 78 times. But then Ronnie Reagan had conviction, and truth on his side. (one of those was sadly missing during W’s watch, but that’s the way it is)
How sharp was that veto pen during BJ’s watch, eh? (and if you’re too lazy to look it up, the number was 37)
Maybe our Immaculate leader will get busy during his second term. But with THE CROOK controlling the Senate, there won’t be much to veto, will there?
Athos, Harry Reid is becoming the irrelevant one, specially if he keeps on claiming his way is the only way while everything that finally gets done is between McConnell, Boehner and Obama! As has been the truth on every major issue since ACA.
Reid has a nice office with a view.
Efficient? Like in the Soviet Union?
Free markets operate efficiently. Socialism creates shortages and long lines and strangles innovation.
We have known for decades that free markets often act efficiently, but do not always do so. Air pollution is the the classic example. It costs me nothing to send smoke up the chimney of my factory. The dispersed costs to all the families that live around me are not entered into my economic calculations. Yet the costs exist. Marshall and then Pigou developed this more than a century ago to show that markets sometimes produce inefficient results, and must be modified by some form of government intervention.
Healthcare is the other classic example of a market in which a completely unregulated free market does not produce optimal results. Unregulated markets work quite well for purchases of bread, or high-definition TVs. Not so much for coronary stents.
You know, instead of blathering about this, you guys ought to sit down and read Kenneth Arrow’s famous paper on the subject, “Uncertainty and the Welfare Economics of Medical Care”. It takes some time and effort to read, but it is worth it:
http://www.who.int/bulletin/volumes/82/2/PHCBP.pdf
So before ACA the government controlling 1/3 of health care made it better?
Made it better for everyone over 65. Under a completely unregulated free-market system, how does a 65 year-old person purchase health insurance?
Made it better for everyone who is despertely poor, and can’t afford expensive individual insurance packages.
And, or course, it is better in all of our peer group countries, where universal health insurance has been around for decades, and where people have better health statistics and the country spends a fraction per capita on healthcare compared to the US.
At what cost?
France, Germany, UK, Canada, Australia, etc., etc. spend a small fraction per capita of what we spend. Their health statistics are comparable or better. And no one who comes down with cancer in those countries, or whose child has a birth defect faces financial catastrophe simply because of medical condition.
Try the 1950′s, ’60′s and ’70′s in the U.S., Athos. The top tax bracket was 70% (which I agree was too high), capital gains was, I believe, 25%, and the “death tax” was alive and well. During that time, the nation and it’s middle class thrived. I note that you STILL haven’t managed to find a tax cut that actually produced extra revenues long term. Maybe because you can’t?
Dogma doesn’t suit you, Thomas. Yes, free markets are efficient, but often not, as Rockefeller proved. He priced gasoline low until he drove competitors out of the market, and then priced it very high, using the muscle of his monopoly to keep competitors out. Insider trading is also part of an unregulated free market. Do you think it should be allowed? Adulterating and practicing poor sanitation with food was rampant in the unregulated free market as was selling of snake oil and other medical quackery. So was polluting air and water. You’re so used to regulation that you no longer recognize it’s necessity.
Nyp shows the way to heaven, pure socialized medicine.
I have friends in Alberta. I know a different story.
Comparing Obama to Reagan in any category is a weak argument, Obama’s veto of two bills is offset by the multitude of executive orders he rules us by. Next up, firearms!
I have friends in Adelaide and Melbourne. I also play soccer with players of just about every nationality. The stories I know a differ from yours, Steve.
So playing with soccer celebs from other countries gives one an insight to the average lives of real people.
Hardly celebs, Steve. Just clods like me, but there are more than a hundred and we often hang out after games. The subject comes up every now and then and those from OECD countries have few complaints. But we have no Canadians. Maybe their system isn’t as good as those of the Western European nations and Australia?