Balancing the US Budget
December 5th, 2010 at 12:00 pm by David FarrarBarack Obama established a National Commission on Fiscal Responsibility and Reform to come up with ways to reduce the huge fiscal deficit. They have 18 members – 10 Democrats and 8 Republicans on it.
So what has this bipartisan group recommended:
- $200 billion of domestic and defence savings by 2015
- Tax reform that reduces rates, simplifies the code and broadens the base to reduce the deficit
- Measures to control long-term health cost growth
- Mandatory savings from farm subsidies, military and civil service retirement
- Ensure social security solvency for next 75 years
This would achieve $4 trillion in deficit reduction by 2020, reduce the deficit to 2.2% of GDP by 2015 and caps revenue at 21% of GDP (note NZ is well over 30%).
Obama, to his credit, has not rejected it. Sadly Congressional Democrats look likely to – which will impose future generations with horrific levels of debt and interest on the debt.
The situation in NZ is not so dire, but we still need bold measures to stop borrowing $250 million a week.
December 5th, 2010 at 12:17 pm
Note in NZ we don’t have states, with all their associated spending and taxes.
Vote:December 5th, 2010 at 12:22 pm
What interested me and stopped me reading to make this comment was this.
” Reducing farm subsidies by $3 billion per year by reducing direct payments and other subsidies. ”
This might be good news for us. Next the French.
Vote:December 5th, 2010 at 12:25 pm
No, we have councils, with all their associated spending and taxes.
Vote:December 5th, 2010 at 12:27 pm
“..we still need bold measures to stop borrowing $250 million a week.”
However, Key waffles and refuses to address the issues concerning the staggering debt. For example, days ago he said his government plans to keep the student loan scheme interest free, while at the same time had the gall to say that “economically, the student loan plan did not really stand up.”
The two-faced Janus would be proud.
Vote:December 5th, 2010 at 12:39 pm
Manolo, don’t forget pledging to keep “communism by stealth”
Vote:December 5th, 2010 at 12:56 pm
The only real problem with it was a plan to utimately raise spending permanently to 21% of GDP, including Obamacare and raise taxes.
I don’t believe for a second that Democrats will ever stop expanding the government’s role in the US.
Taxes need to be cut and simplified, spending cut (including entitlement programmes) and regulations cut and Obamacare must go. That is the only way the US economy will start to reduce unemployment, grow the economy and reduce the deficit.
Vote:December 5th, 2010 at 1:15 pm
nickb – In the USA, there are federal taxes, state taxes (income and/or sales), and local body taxes as well.
Vote:December 5th, 2010 at 1:38 pm
I am well aware of that Scorpio.
Vote:December 5th, 2010 at 3:07 pm
Hopefully people are aware of the real size of the bailout and the fact the Fed didn’t want to tell anyone about it?
Why, anyone would think they weren’t behaving like a govt agency, wouldn’t they.
(that’s a speech from Sen. Bernie Sanders)
Vote:December 5th, 2010 at 3:28 pm
So maybe someone should tell that smiling, waving buffoon to stop the fuckwittery and call Don Brash, beg him to come back as Deputy and Finance Minister and fix the problems caused by successive Liarbore and BlueLiarbore governments over the past 20 years.
Vote:December 5th, 2010 at 3:49 pm
Heard from Bill English that it is $256 000 000 a week
But what is another $312 mill per ann. ??..
How much per week are we paying in interest ??
Vote:December 5th, 2010 at 3:50 pm
They just don’t get it do they. Of course blame all manner of factors when the budget blows it’s arse out but for Gods sake don’t look at the shiny arses who sign the cheques. Everyone must diet while the state adds to it’s ever expanding waist line.
Vote:December 5th, 2010 at 4:16 pm
We’ll never get these bold measures because of the argument that whatever reforms are made will simple be undone by Labour “unless we bring the people with us”, or whatever other drivel applies.
That belies the fact that the reforms of the 90′s weren’t undone.
Interest free student loans weren’t “undone”. Working for Families hasn’t been “undone”. Kiwirail wasn’t “undone”. The government owing our national airline hasn’t been “undone”. Youth rates haven’t been “undone”…and so on, and so on.
Frankly, the argument that they will “be undone by Labour unless we bring the people with us” is a big fat porkie. It’s just an excuse to be weak and hold onto office simply to keep “them” out. And it’s worrying.
Vote:December 5th, 2010 at 5:14 pm
“And it’s worrying.”
It sure as hell is. Key has tremendous political capital but he won’t spend it.
What’s he waiting for?
The Next Coming?
He demonstrated his inexperience when he ruled out various things merely to keep the unpopular Liarbore at bay, which he later found out when the results came in, he didn’t have to.
Thus big-ticket things like WFF and interest-free student loans were left to fester throughout their first term. They’re a cancerous corrosive tumour which we can’t afford.
Even if he starts bleating about these important issues in the lead-up to the next election, who’s going to believe him if he says he’ll do something about it.
Vote:December 5th, 2010 at 7:37 pm
Obama isn’t interested in reducing spending or the deficit, he’s doing what his socialist masters put him there to do, and that is wreck the US economy from the inside.
Vote:December 5th, 2010 at 7:44 pm
What do you expect when you put a bloody Kenyan in charge of the US.
Vote:December 5th, 2010 at 8:04 pm
Oh don’t give me that rubbish TCrwdb, Bush was proposing similar economic ‘bail-out’ plans, or have you conviniently forgotten that?
Vote:December 5th, 2010 at 8:05 pm
Or a bloody Texan for that matter Fale.
Vote:December 5th, 2010 at 9:30 pm
Bush was no shining light when it came to his handling of the US economy, but Obama has turned up the volume four-fold. You’ll struggle to find any tea-party proponents that will defend how Bush ‘managed’ the economy.
The bail-outs are the least of Obama’s sins, he has merely used these as a means to nationalise whole sectors of the economy. Obama-care and the growth of big-government will place a sustained long-term drain on productivity and the US economy that will make the bail-outs seem very minor in comparison.
The US economy is headed for a melt-down and the solution they have conjured now is to monetize the debt by printing cash. Name me one example in the history of the world where that solution hasn’t led to hyperinflation and economic armageddon.
Read the situation for what it is. List down what you would do if you wished to destroy an economy from the inside out. Then compare that list with what the Obama/Pelosi/Reid troika have done over the last two years.
Scary huh?
Vote:December 5th, 2010 at 9:52 pm
And what exactly were your precious tea party associates doing as Bush was running the Clinton surplus into the ground?
Vote:December 5th, 2010 at 10:37 pm
Andrew needs to look at this graph and come to the conclusion that Obamanomics don’t work tout de suite.
Vote:December 5th, 2010 at 10:38 pm
Everyone in the US knows what they need to do, but they wont:
- Their tax code is an absolute mess, the Fair Tax Act is the best, actually possible, reform in that area…
Vote:- They need to radically reform Social Security, Medicare and Medicaid by reducing entitlements…
- Bring troops stationed in friendly countries home, and find backrrom Defense savings…
- Disband the Departments of Education, Homeland Security, Housing, DEA and Energy…
December 5th, 2010 at 11:02 pm
Hurf, it would help if your link was active.
Vote:December 5th, 2010 at 11:06 pm
And I don’t even know why you’re bothering Hurf Durf. I haven’t been advocating for Obamanomics at all, I’ve simply recognised the hypocrisy of the American FAR RIGHT.
They sat back and swallowed all of Bush’s spending sprees, and suddenly cry ‘communism’ when Obama attempts to place restriction on such habbits.
I couldn’t care less either way, my investments are in China now.
‘What goes up, must come down’.
Vote:December 5th, 2010 at 11:20 pm
The link does work, and it should be pointed out that the groundwork for the TP started after the Bush bailout and gathered steam after the “Obama as tax-cutting moderate” lie (yes, it was a lie) fell apart. If the baby boomers can redeem themselves for it, good for them. If not, like they care. They’ll be dead before the consequences really bite.
Indeed. Especially that property bubble of theirs.
Vote:December 6th, 2010 at 9:58 am
Fale, the Tea Party is essentially a rejection of mainstream republicanism from people who were always going to dislike Obama’s policies anyway. It’s the Republican party that they’re trying to change. At least on economic policy, they are a reaction to Bush, not Obama. They were silent only until they were angry enough to start forming a movement, not because they approved of what Bush was doing.
Vote:December 6th, 2010 at 10:25 am
Not just the Tea Party either. You can find copies of one of the mainstream, conservative magazines – National Review – from as early as 2003/2004, that get stuck into Bush’s expansion of government.
Of course they still voted for him, with the usual political excuse that the alternative would be worse. But what do know – it was worse.
But there is some of the usual re-writing of history going on here. The Democrats finally won in 2006, and they and the media (but I repeat myself) claimed it was mainly because of the Iraq War. That was a major factor for Bush himself – but the GOP was booted from the Senate and House because a lot of GOP voters saw no point in supporting them any longer. The Democrats targeted that faction directly with all the nonsense implying they’d be fiscal conservatives, which is largely why Barry got the GOP and conservative Democrat votes he did in 2008.
Not until it became obvious that Barry and co. had simply lied through their teeth about being fiscally conservative, did people finally start going back to the GOP – only this time with an agenda that’s not going to allow pricks like McConnell and the rest of the dinosaurs to simply regain power so that they can return to their pathetic, hedging trimming of an ever-expanding government, greased by local pork.
I’m not confident of the outcome even so. Already there are GOP members who have spoken out in favour of earmarks continuing and I doubt many have the stomach to actually fix Social Security, Medicare and repeal Obamacare.
As is often the case, only outright bankruptcy will fix this mess, and unfortunately the world’s largest economy can probably drag that out for decades longer than the likes of Ireland. Balancing the budget? Pffft. They’d need to run surpluses for a decade to pay down the growing debt – that’s rapidly going to become the real issue.
Vote:December 6th, 2010 at 12:12 pm
Fale – have a good read of what tom hunter said, tea party is NOT extreme right, tea party is opposed to all forms of big government, earmarks, bailouts etc etc etc
Also, China ain’t no safe haven, when the US economy goes, so does China and then so do we all… and we won’t even mention the Chinese property bubble which is like a beach ball compared with NZ’s marble.
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