Don't you get it? That's the plan!

That's been the kabuki dance plan through every GOP presidency and Congress majority.

What was the last year the US had a true balanced budget?

During Bill Clinton's Presidency? Nope.

During Nixon's Presidency? Nope.

During Eisenhower's? Yep, back in 1957.

Deficits financed by debt? Yes. Other economic policy decisions such as overdue tax reform were good. Revenues increased in the 1980s. Congress, however, spent more than it received. And yes, the Republicans were to blame for being so complicit, and cooperative.

Dems appeal to children's desire not to defer gratification, and like to spend, spend, spend to buy votes, giving people goodies. Republicans have exploited the other side of human nature, procrastinating and avoiding the unpleasant, in this case, taxes. “Don't tax 'em and they won't get angry — and vote Democratic to get more goodies for their money.” The only major exception we've seen to this is the Democratic obstructionism and stasis with Social Security and Medicare.

Of course, other things that are unpleasant are in force this year, including a bloody occupation in Iraq that interferes with Afghan progress, a public tired of this effort (now numb to thousands of casualties), a public also dissatisfied with the Bush administration in general, and finding fault with the GOP in Washington, not only the Democrats. I suspect 2008 will be more anti-Republican (not necessarily pro-Democratic and pro-liberal, so the conceited should be on guard about interpreting any “mandate” the wrong way) than 2006 was as far as the elections go this year.

* * *

“I would be willing to see our military reduced to about 100 billion dollars per year. That alone would balance the budget.”

The first military-reform book by MacGregor, “Breaking the Phalanx,” that I have been reading, was written ten years ago and back then identified $150 billion in military savings. It could be done. The reform of the Army's FCS will likely happen eventually (if not complete termination), but the real savings can be found with the hugely costly Air Force and Navy big-ticket items, which are widely understood to be big costly efforts made in large part at the expense of the Army (which arguably is the most important of our armed forces — ground or land power).

(Hey, Rudi. Read the Rumsfeld RMA-related remark on the following page.)

http://www.cfr.org/publication/12344/#7

Where to cut?

http://mae.pennnet.com/articles/article_display…

http://www.csbaonline.org/4Publications/PubLibr…

http://www.defenselink.mil/comptroller/budget.html

What do you mean, cut?

http://www.heritage.org/Research/NationalSecuri…

“Lets let Germany and France and Canada defend themselves. While we pay down our debt and become financially solvent. It would not hurt me to have a 50 ship navy and 100 jets and 2 divisions of army. 1 division of Marines and 3 airbases in the USA.”

The ideal isolationism would involve missile and air defense here as well as coastal defense and border control coupled with a few long-range weapons to use as we needed.

“When the world suffers disasters then the French or the Germans or the Canadians can send their troops and their money.”

Ah, but in Europe's case, aside from some corrections since Bosnia, they have continued to rely on and expect US protection and force use while they spend their money on even worse time-bomb social-spending programs than we have here.

The Trustees' Reports includes the basic arithmetic you need to know. The changes that would be needed are significant, but are not outrageous at all.

Note that Medicare has an effect on the general budget because so much of Medicare is funded through general revenues. The Conyers-Kucinich bill giving Medicare tto all would have all of its funding appropriated this way, 100% by law. (That bill also includes mention of new kinds of taxes to impose to help pay for it.)

“Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 14 percent in payroll tax revenues (from 12.4 percent to 14.1 percent) or an immediate reduction in benefits of 12 percent or some combination of the two. Ensuring that the system is solvent on a sustainable basis beyond the next 75 years would require larger changes, because an aging population and increasing longevity cause the projected current-law OASDI cash-flow deficits to be substantially larger after the 75-year projection period than they are on average during the period.”

“The Medicare Report shows that the [Medicare HI] program could be brought into actuarial balance over the next 75 years by an immediate 122 percent increase in the payroll tax (from 2.9 percent to 6.44 percent), or an immediate 51 percent reduction in program outlays or some combination of the two. As with Social Security, adjustments of greater magnitude would be necessary if changes are delayed or phased in gradually. Larger changes would also be required to make the program solvent on a sustainable basis beyond the 75-year horizon.”

“Part B of the Supplementary Medical Insurance (SMI) Trust Fund, which pays doctors' bills and other outpatient expenses, and Part D, which pays for access to prescription drug coverage, are both projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet next year's expected costs. However, expected steep cost increases will result in rapidly growing general revenue financing needs—projected to rise from 1.3 percent of GDP in 2007 to 4.1 percent in 2082—as well as substantial increases over time in beneficiary premium charges. “

http://www.ssa.gov/OACT/TRSUM/trsummary.html

* * *

“And stop repeating the lies of we have long term problems with SS. WE DON”T. SS problems are that Congress has been borrowing the money promised to it for years (your SS taxes were replaced with Treasury Bonds) and now has to start figuring out ways to pay it back. Medicare can be fixed if we get serious about a single payer system which shares the cost among the whole population.”

We have long term problems with both Social Security and Medicare, both of which are unsustainable and will fail eventually without intervention. You stand corrected.

“Single-payer” [sic; WHO'S THE PAYER?] is no magic solution to Medicare. Only believers in the tooth fairy believe that. What cost savings would be realized by a replacement of the private sector with standard (non-insurance-company-based) Medicare would be absorbed by growing costs in the following years. Going to Medicare for everyone raises numerous issues, but insofar as costs are concerned, it's little different than raising or eliminating the payroll tax cap for Social Security that the magic-wand children believe will instantly “solve” the Social Security financing problem. It won't; it will simply buy time (postponing deficits by a few years, that is all, for Social Security). Medicare as it exists today has problems; even very-liberal NPR has presented a show which explained some of the problems (the procedure-based nature of payment rather than rewarding results, i.e., reduction of disease), and Medicare doesn't pay enough to many doctors, and people don't have “Medigap” insurance for nothing, for that matter. Addressing these problems will result in a more, not less, expensive program. (In fact, it's probably beyond the grasp of many childish “there is no problem, and it's easy to solve anyway” types, but a refinement of an Obama approach to Medicare could involve the decision whether to extend standard coverage to more people or groups now, or try to improve Medicare first, then extend coverage.)

What about the following from the Trustees' Report Summary are people unable (or worse, able but unwilling) to read and understand?

“Concern about the long-range financial outlook for Medicare and Social Security often focuses on the exhaustion dates for the HI and OASDI Trust Funds—the time when projected finances under current law would be insufficient to pay the full amount of scheduled benefits. A more immediate issue is the growing burden that the programs will place on the Federal budget well before the trust funds are exhausted. …

During 2008-18 for HI, general revenues … must be used to cover the interest earnings and asset redemptions required to offset the shortfall of HI tax revenues. Similarly, general revenues cover these offsets for the OASDI deficits during 2017-40 … . In addition, general revenues pay for roughly 75 percent of all SMI costs under current law … .

In 2019 and later for HI, and in 2041 and later for OASDI, there is no provision in current law that would enable full payment of benefits, once the trust funds are exhausted. If asset exhaustion actually occurred, benefits could be paid only up to the amount of ongoing dedicated revenues. Further general fund transfers could not be made to finance the deficits. …

The initial negative amounts … for OASDI indicate that tax income exceeds cost (which occurs during 2008-16) and represent net cash flow to the Treasury that results in the issuance of special Treasury bonds to the trust funds. Those OASDI net revenues are more than offset by the Medicare general revenue requirements under current law. For instance, in 2008 the Social Security tax income surplus ($79 billion) is estimated to be significantly smaller than the statutory Medicare Part B and Part D general revenue transfers, resulting in an overall cash requirement of $117 billion (0.8 percent of GDP) from the general fund of the Treasury.

The combined difference grows each year, so that by 2017, net revenue flows from the general fund will total $449 billion (2.0 percent of GDP). The positive amounts that begin in 2017 for OASDI, and in 2008 for HI, initially represent payments the Treasury must make to the trust funds when assets are redeemed to help pay benefits in years prior to exhaustion of the funds. Note that neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public. …

Beyond 2030, the difference continues to increase nearly as rapidly due primarily to health care costs that grow faster than GDP. After the trust fund exhaustion dates (2041 for OASDI, 2019 for HI), the increasing positive amounts for OASDI and HI depict the excess of scheduled benefits over projected program income. When the statutory SMI general fund revenue requirements are added in, the projected combined Social Security and Medicare deficits and statutory general fund revenues in 2082 equal 9.3 percent of GDP, indicating the magnitude of the potential effect on the Federal budget if general revenues were used to ensure payment of all scheduled program benefits. A similar burden today would require more than 80 percent of all Federal income tax revenues, which amounted to 11.2 percent of GDP in 2007.

To put these magnitudes into historical perspective, in 2007 the combined annual cost of HI, SMI, and OASDI amounted to 38 percent of total Federal revenues, or about 7 percent of GDP. That cost (as a percentage of GDP) is projected to double by 2060, and then to increase further to nearly 17 percent of GDP in 2082. It is noteworthy that over the past four decades, the average amount of total Federal revenue as a percentage of GDP has been 18 percent, and has not exceeded 21 percent in a given year. Assuming the continued need to fund a wide range of other government functions, the projected growth in Social Security and Medicare costs would require that the total Federal revenue share of GDP increase to wholly unprecedented levels. “

WASHINGTON (CNN) – President Bill Clinton said Monday that the United States would pay off $216 billion in debt this year, bringing to $355 billion the amount of the nation's debt paid down in the three years since the government balanced the budget and began running surpluses.

IT CAN BE DONE. WE JUST NEED THE WILL TO DO IT>

As I've said before as far as looking “backwards” is concerned:

And to that old Republican “saw” of lets not look back at whose to blame, let look forward to solving the problem, well as an engineer I can tell you most times when it comes to solving a problem knowing who caused the problem goes a loooong way to helping you determine a fix and more importantly not repeating that problem in the future (i.e. not extending tax cuts while you’re in the middle of two wars).

I'll address your saying I'm in the bag for the Democrats by giving you the benefit of the doubt of not seeing my follow-up comment.

As far as the rest goes; it's kind of surprising to read your comment on the 1990s as not one single Republican voted for president Clinton's first budget, you know the one that attempted to balance the budget and pay down the debt and by the way led to the best economy since WW2. In fact that was one of Newt Gingrich's Contract points in order to get a Republican (ongress in 1994.

And stop repeating the lies of we have long term problems with SS. WE DON”T. SS problems are that Congress has been borrowing the money promised to it for years (your SS taxes were replaced with Treasury Bonds) and now has to start figuring out ways to pay it back. Medicare can be fixed if we get serious about a single payer system which shares the cost among the whole population.

And no it didn't suddenly appear with Bush, I think we can all agree that Reagan was the first one to practice this form of economic policy (i.e voodoo economics, piss down economy), Bush just perfected it.

Lets let Germany and France and Canada defend themselves. While we pay down our debt and become financially solvent. It would not hurt me to have a 50 ship navy and 100 jets and 2 divisions of army. 1 division of Marines and 3 airbases in the USA.

When the world suffers disasters then the French or the Germans or the Canadians can send their troops and their money.

By the way, Obama once had a Pay as you Go piece to his platform, though one never hears about it, including from Obama, since other issues are considered more important by most voters. Is it only there to look good fiscally, or is it a genuine goal but not currently emphasized because it doesn't help him with many voters? Can't say. I only saw this when comparing Clinton and Obama several months ago. Clinton's lack of such a notion was one of the reasons I went with Obama in the end. I haven't studied McCain's position yet, but his speeches mostly talk about cutting and growing out of the deficit.

I apologize.

Since you were being sincere, I'll respond in kind.

Its not ALL……….ALL………..ALL the Republicans fault.

I believe the Democratic Party is also to blame for our economic problems, just not on an equal level with the Republican Party and it irks me to no end when people apportion the blame equally. Also the blame on the Democratic Party’ side is more due to their caving into the Republicans demands for constantly lowering taxes and tax breaks for their corporate friends, however the Democrats have become more Republican like in their economic policies lately (see DLC)

That said, I agree with your comment above. It is a good place to start on solving our economic problems; we can first begin by stopping our military adventures abroad (maybe not Afghanistan, I would need to study that further before agreeing to that one) and then substantially cut the military's budget of gee whiz devices (most not needed for today’s low level insurgent type conflicts). Once that is done we can then focus on the “fat” within the government and the social programs.

For those of you screaming NOOOO; of Bush's 2009 budget request of $2,700,000,000,000 (2.7 trillion) approx. 25% of it is for Defense (515.4 billion for Defense, 145. 2 billion for the GWOT) and this does not include any of the usual non-budgeted war supplementals that the congress has been passing pretty regularly the last 7 years.

United States federal Budget, 2009

However I'll give it a shot.

First off, in the 1990's (1995-2001) the REPUBLICANS were in charge of Congress and the DEMOCRATS were in charge of the White House so any credit for the balanced budgets there is bipartisan (unless the Democrats are so amazing that as a minority party they ran Congress).

In addition, as I pointed out, the supposedly balanced budgets of the 90's were fueled largely by the tech boom which boosted the income side much higher than it would be realistic to expect over the long term.

As to the current problems I think I made it clear that part of the problem is both Iraq and the stimulus package and if it will make you feel better for me to lay all of that on Bush and the Republicans then I'll throw you that bone (despite the fact that many Democrats supported both measures).

But we also have long term structural problems with things like SS/Medicare/etc which are a pox on both houses. Republicans have pandered to the voters by supporting more and more social spending and Democrats have (as was pointed out by DLS) fought efforts to index Social Security and/or to raise the retirement age.

So I'm sorry but this is not some problem that suddenly appeared with Bush. He has caused a good amount of it and I blame him for that. But both parties have been bulding (and ignoring) this problem for decades.

Further, even if I went your route and blamed one party for everything that went wrong, it's still not going to solve the problem and I think the more important issue right now is solving the problem.

I hope more Americans finally learn about this. They prefer to remain ignorant and believe in Washington as their fairy godmother, Santa Claus, etc. instead.

http://www.ssa.gov/OACT/TRSUM/trsummary.html

Better indexing was fought bitterly by the Democrats and would be fought again.

Lifting the income cap to increase Social Security payroll taxes only postpones the onset of deficits by a few years. This is no solution at all in and of itself. There is no magic in Obama's magic solution.

This is not true. The bonds held by Social Security in the “trust funds” are worth absolutely nothing. More importantly, they constitute future claims (which don't have to be fully honored or honored at all, but which will be honored at least in large part) on other, new federal revenues.

Well then we'd better hope the Chinese don't catch wind of this.

The answer will be the liberal reversion (once they are power) to “deficits don't matter,” that we should ignore “the great deficit hype” or “deficit scare,” or that deficits are stimulatory, so they're a goooooooood thing.

The two groups of people have never been the same.