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Thursday, December 02, 2010

The Moment Of Truth

The final report of the Deficit Commission is here. 66 pages, pdf.
We do not pretend to have all the answers. We offer our plan as the starting point for a serious national conversation in which every citizen has an interest and all should have a say. Our leaders have a responsibility to level with Americans about the choices we face, and to enlist the ingenuity and determination of the American people in rising to the challenge.
We propose a six-part plan to put our nation back on a path to fiscal health, promote economic growth, and protect the most vulnerable among us. Taken as a whole, the plan will:
• Achieve nearly $4 trillion in deficit reduction through 2020, more than any effort in the nation’s history.
• Reduce the deficit to 2.3% of GDP by 2015 (2.4% excluding Social Security reform), exceeding President’s goal of primary balance (about 3% of GDP).2
• Sharply reduce tax rates, abolish the AMT, and cut backdoor spending in the tax code.
• Cap revenue at 21% of GDP and get spending below 22% and eventually to 21%.
• Ensure lasting Social Security solvency, prevent the projected 22% cuts to come in 2037, reduce elderly poverty, and distribute the burden fairly.
• Stabilize debt by 2014 and reduce debt to 60% of GDP by 2023 and 40% by 2035.
I can't truthfully claim to be thrilled with all this. I do think it ought to be discussed in detail. They are trying hard.

I think it is very important to broaden the tax base. A key to doing so is to lower tax rates, which will paradoxically result in wealthier paying more taxes. I am not sure it is possible to get spending below 22%.

Beginning on page 33 you will find proposals for corporate tax reform, which do broaden the base somewhat. This is absolutely essential if we want to create more jobs.

As time permits, I would like to go through this thing and publish some analysis and numbers for reference purposes. I cannot say when I will get this done, because currently I am scheduled for Medical Care, which I am not happy about.

For some strange reason I'm reminded of a song.

"Face to face with my demons
Tearing apart everything I've done
And I don't have a parachute"

That's from the song "Moment of Truth" from Terri Nunn's "Moment of Truth" CD.
VERY appropriate!
They have done nothing but further shift
the burden of pain onto the working poor and
middle class. No tariffs ? You gotta be kidding
me. Do they suggest rebalancing our economy
away from FIRE ? Without those changes their
prescription is grinding poverty for the bottom
80 percent. At least the top 1percent can keep
their 40 percent of the nations wealth.
The important thing is they are actually talking about ways to reduce, yes, reduce spending. The Dems will of course scream bloody muder. What about the CHILDREN?? I am so sick of that mantra. The Department of Education has been around since Jimmy Carter and, after trillions of $$ spent, education is still under achieving.
The Energy Department likewise. Under Obama the increase in government employees going into new agencies and bureaus to further strangle commercial activity has been breathtaking.

My problem is that they seem to expect moderate or little growth of the economy. If they decide to raise taxes that is what they'll get.

I maintain that if the $18 trilion that is sitting in savings, CDs, money markets, company treasuries, and cans in back yards was to get back in the game, we could see a nice four year run of growth that would heal a lot of the wounds the economy has received.

But the money's not getting back into the game until there is confidence that the government won't continue to run businesses into the ground and regulate everything jot and tittle of "unfairness" that comes into their field of view.
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