Re: Obama to keep pushing for $4 trillion debt deal even a...

[Guest guest]

The problem is that Obama wants the tax increase deal first and the spending cuts later. Reagan fell for that and the Democrats ramped up spending instead. Bush I fell for that and raised taxes, costing himself re-election, and the Democrats ramped up spending instead of cutting it.

The Republicans aren't going to fall for that again. The cuts should come first, then maybe tax increases. But given the tax burden the US is already under, adding another trillion will be very bad for the economy. What really needs to happen is to cut the capital gains tax and the corporate tax to the European levels of about 15%. That will also be lower than China. That will help tremendously. At the same time, regulation should be cut as well. After that, tax rates and regulation should be frozen for several years to allow business to plan, something it can't do now because everything changes all the time.

But that won't happen. I think there is an element in government that wants the US to tank. Some in this administration have not only disparaged the Constitution but expressed a desire to get rid of it and draft a new one. I think they are working toward that and government default would be a step in that direction.

In a message dated 7/10/2011 6:00:49 P.M. Eastern Daylight Time, no_reply writes:

President Barack Obama is pressing congressional leaders to accept a $4 trillion debt reduction deal that Republicans have rejected for its tax increases and Democrats dislike for its cuts to programs for seniors and the poor, administration officials said.

[Guest guest]

"The problem is that Obama wants the tax increase deal first and the spending cuts later. Reagan fell for that and the Democrats ramped up spending instead. Bush I fell for that and raised taxes, costing himself re-election, and the Democrats ramped up spending instead of cutting it."

As you know, I am no fan of Obama, but in this case I find myself in the odd position of having to defend his tactics, although this defense assumes Obama has brains. There are three good reasons the government would be unwise to promise cuts immediately.

1) At this point in time, government has grown to such a degree that it isn't even aware of some arms of its tangled existence. In some cases it's got three or four organizations fulfilling the same mandates. None of these organizations are aware of each other. So the first thing that needs to happen is a comprehensive audit to find out what departments actually exist, and what their mandates are. The surplussage can be omitted.

2) Having a plan to cut now is a great idea, except doing so makes no provisions for what is going to happen down the road. The government was already supposed to be cutting the budget and then it had those cash stimulus things and all the subsequent monetary props to bail out the financial and auto industries.

3) No law that exists at this very moment prevents pork barrel spending and "riders" on bills. You can submit a budget that clears up all of our problems in a year, and in the meantime someone can submit a bill for anything -say a bill that protects an endangered salamander- and attached to that bill is spending for a infrastructure improvement plan that will cost 500 million dollars. So within a year, if the House and Senate pass enough of those bills, we are back to square one.

Still, cutting needs to be done. And as you say, it needs to be done first. A huge lumbering government is one of the primary reasons the government is in a near state of default. Obama should have been working on cutting government the moment he took office.

"The Republicans aren't going to fall for that again. The cuts should come first, then maybe tax increases. But given the tax burden the US is already under, adding another trillion will be very bad for the economy. What really needs to happen is to cut the capital gains tax and the corporate tax to the European levels of about 15%. That will also be lower than China. That will help tremendously. At the same time, regulation should be cut as well. After that, tax rates and regulation should be frozen for several years to allow business to plan, something it can't do now because everything changes all the time.'

Republicans are just as guilty for this as the Democrats are. Nearly everytime Republicans get into office, the skyrocket the defense spending. There is good reason for this of course. We need to keep our military up to date and equipped, especially in light of Democrats cutting the Defense budget every time they take office. The thing is, there is wastage that comes along with the cut-raise-cut-raise cycle. One government pays out all kinds of money for research and development, the next one cuts the program, and so all that money is wasted. The next government after that revives the program, but by this time, technology has advanced, so the whole thing has to be done from scratch, and now everything is more expensive than it was because of inflation and other factors. Then the next government cuts the program again.

The thing to do is leave defense alone, but cut/revise PROGRAMS in other areas which simply are not working. Revamp Medicare for example. Simplify the tax system. Fund Social Security.

"But that won't happen. I think there is an element in government that wants the US to tank. Some in this administration have not only disparaged the Constitution but expressed a desire to get rid of it and draft a new one. I think they are working toward that and government default would be a step in that direction."

I think what's happen is that every election, people are voting as though they are trying to elect a homecoming king and queen instead of a public servant. People should scuitinize candidates as though they were hiring a butler and nanny for their homes.

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