Right now, current law says we don’t have a long-term deficit problem. On the books, everything adds up. The reason we expect enormous future deficits is because we expect Congress will not follow current law:
So why does anyone believe that future Congresses 20 years in the future will actually implement the unpopular tax increases and spending cuts from a “grand bargain” in 2011? Here’s James Kwak on why it is a mistake to use the ten-year baseline:
The big policy uncertainty that hangs over the ten-year baseline is the Bush and Obama tax cuts of 2001, 2003, and 2009, which were extended in December 2010 and now expire at the end of 2012. If we extend all of those tax cuts, we will add $612 billion to the 2021 deficit (on top of $137 billion for patching the AMT). That’s real money. To which my answer is: let them expire. Let all the tax cuts expire, and there is no ten-year deficit problem.Instead, the Gang of Six plan proposes to cut taxes by $1.5 trillion (over ten years) relative to the CBO baseline — which means $1.5 trillion in unnecessary spending cuts.
The real problems come after the ten-year horizon, when Medicare spending accelerates due to an aging population and increasing health care costs. Those problems need to be solved sooner or later, and sooner is better than later, since every year of high health care cost inflation that goes by makes the problem worse. But the Gang of Six plan is the wrong way to solve those problems (although it is admittedly far better than the Ryan Plan, which only makes them worse). Does anyone really think that the middle class’s paltry 2001/2003 tax cuts will make up for a lower Social Security cost-of-living adjustment and a cap on federal health care spending?
Name one person working in local, state or Federal Government who has contacted YOU for advice, as you claim.
Please provide some proof, as well.
Thank you in advance as your cooperation is greatly appreciated and should you have any questions or require additional assistance, please call the Kremlin.
ERICH MIELKE
Name one person running as a candidate for any office, anywhere who is not afraid to go on record as having contacted YOU for politcal advice?
Please provide some proof, as well.
Thank you very much in advance as your cooperation is greatly appreciated and should you have any questions or require additional assistance, please contact the Kremlin.
E.M.
Wait a minute…you spent months defending 10 and 20 year projections as being gospel. Now you're admitting they aren't worth anything at all and that you can't trust politicians to do what they say they're going to do.
Points I made about a million times.
Either you're learning or you're betting on no one remembering what you wrote. Which is it?
Anon 11:50,
Definitely the latter.
This is why audience participation is so indispensable here at this "Independent" blog 'serving' the Lehigh Valley.
TOFIK BAKHRAMOV
I think 10 year projections are useful to a limited extent, for projecting the impact of specific legislation. but for a grand bargain on the deficit its pretty useless.
Got any names to share with us at this point in time, Chief?
A political candidate not afraid to publically state they ask YOU for advice?
A local, state or Federal government worker not afraid to state publically they ask YOU for advice?
We can wait and continue to ask forever … you ran your mouth.
And we call.
Lay down your cards.
Aces and 8's … or what?
E.MIELKE