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Sunday, May 16, 2010

More about Government et al; What is to be done?

Continuing the transcribed e-debate begun below.

Paul
"Who can have compassion on the ignorant, and on them that are out of the way; for that he himself also is compassed with infirmity"
Hebrews 5:2

"Now faith is the substance of things hoped for, the evidence of things not seen"
Hebrews 11:1

I think that the majority of Americans would agree that the moral rejuvenation of our nation is desirable so let’s start a movement, we’ll call it the Moral Majority.  No, that one’s taken.

I think we started off with "what’s going to get done about healthcare?"  That morphed into "nothing because of the corruption of our government; what are we going to do about that?"  This became "nothing until we undertake the complete moral rejuvenation of our nation."  A laudable and worthy goal.  So, what’s going to get done about healthcare?

Returning to our habit of quotations, "Politics is the art of the possible." (Bismarck 1867).  Or how about "What Is To Be Done?" (Lenin 1902) which starts with "Where To Begin".  Would electing more Democrats just mean more hogs at the trough?  I firmly and truly believe it would.  I also believe that the result would be better healthcare for most if not all Americans.

As to the desirability of founding our moral crusade on the precepts of Christianity, well ….  I spend several hours a week engaged with other folks attempting to make their approach to and engagement with life have a more spiritual basis.  At one time I was regularly in a small group where (at least) three faiths were represented and at some point a representative of each faith stated that it was clear that the spiritual principles we were studying originated in their belief system.  From this I took it that valid spiritual principles are universal or as Buddhists say "there are many paths up the mountain."  As to the utility of the Judeo-Christian precepts I note that their "Big 10" includes things like "you shall not kill".  Can you say, if you didn’t kill anyone today, that today I am a moral person?  I rather like the more granular 12 tire tools that I’ve been given which say things like,  we make "a searching and fearless moral inventory of ourselves" and "when we were wrong we promptly admitted it".  A little more "day to day" I would say.

So much for my discursus.  I note that another thread has been introduced into this conversation; our imbalanced budget, with various side notes on the two parties.  First I would note that the last time we had a balanced budget (setting aside for a moment the national debt) was under a Democratic administration.  This was immediately followed by a budget-balancing tax-cutting two term Republican administration and we have the largest national budget deficit in our history.  Judging by results, which party is the fiscal hawk?  When I’m in charge I’ll cut the military to what is sufficient to protect our shores and eliminate the cap on Social Security payments.  I’m not sure that a tax hike would be in that case required. ("Vote for Me" on the Pragmatic Progressive ticket)

Respondant SB
I not only have no problem with your 12 tire tools; I heartily support you and them. 

The verse you quote about not having compassion unless one senses one's own infirmity may provide an answer of where to begin.  Perhaps if we the people rose up and demanded the removal of healthcare benefits from all personnel of all branches of government, they would begin to feel the national healthcare infirmity born by so many and act accordingly. The only infirmity politicians and lobbyist seem to sense now is their own electability.


As to having the military have a bake sale to raise money, leaving us to direct our tax dollars to help the infirm, if only it were that simple - the Department of Defense base budget in 2010 is $533.7 billion

The CBO outlook for mandatory spending on just Soc. Sec, Medicare & Medicaid for 2010 is $1.5 trillion and increases to a cumulative $8.7 trillion 2011-215.  If military spending were eliminated entirely it wouldn't make a decent dent in the spending the federal government, by law, is obligated to under these entitlements. 

However politically unpopular & painful on either side, it seems impossible that the budget curves will not be bent into line without serious changes on both the revenue and cost side…a position I believe held by Obama’s new Bipartisan Deficit Commission.

As to our morphing conversation, how can a gigantic national overhaul like healthcare reform be considered apart from budget and the guiding values of those authoring the bill and those to whom they owe allegiance?  (not to mention particulars of what is therefore in and not in such legislation)

If you can do that, I certainly will vote for you on any ticket for any office you wish ;-)

Paul
Re DoD budget:
For the 2010 fiscal year, the president's base budget of the Department of Defense rose to $533.8 billion. Adding spending on "overseas contingency operations" brings the sum to $663.8 billion.

When the budget was signed into law on October 28, 2009 the final size of the Department of Defense's budget was $680 billion, $16 billion more than Obama had requested.  Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff expected an additional supplemental spending bill, possibly in the range of $40-50 billion, by the Spring of 2010 in order to support the wars in Iraq and Afghanistan. Defense-related expenditures outside of the Department of Defense constitute between $216 billion and $361 billion in additional spending, bringing the total for defense spending to between $880 billion and $1.03 trillion in fiscal year 2010.

In addition, the Pentagon has access to black budget military spending for special programs which is not listed as Federal spending and is not included in published military spending figures
So the real DoD budget is roughly twice the "line item" of $533.7 billion.

In 2009 Social Security receipts were roughly $807 billion; expenditures $670 billion, which is the "top line" number in the reference of the forwarded email.  Inadequate for projected needs but not quite the avalanche it appears.  To this I note "Removing the Social Security earnings cap virtually eliminates funding gap":
This shortfall is less severe than is often presented by proponents of Social Security privatization. SSA's projections show that a 1.9 percentage-point increase in the existing payroll tax dedicated to Social Security would close the projected funding gap over a 75-year period.  Using slightly less pessimistic economic assumptions about the next 75 years, the Congressional Budget Office (CBO) has estimated the gap could be closed over the next 75 years with just a 1.0 percentage-point increase. Currently, all earnings up to $90,000 are taxed at 12.4% to fund Social Security. Each dollar earned over and above this cap is completely exempt from Social Security taxes.

This cap affects benefits as well: calculation of Social Security benefits are based on a formula that does not take earnings over the cap into account. Since higher income during one's working life translates into higher Social Security benefits, removing the cap on the benefit side would increase Social Security payments to high-wage earners.

The figure below shows the current actuarial shortfall faced by Social Security under both the SSA and CBO estimates, and the effects of removing the earnings cap on taxes and benefits, based on a 2005 memo by the Office of the Actuary for the SSA. Removing the earnings cap on taxes and benefits improves the 75-year actuarial balance by 1.7% of payroll, thereby eliminating 90% of the funding deficit forecast by the SSA. Removing the cap would completely eliminate the deficit forecast by the CBO with its more plausible economic assumptions.

Respondant SB
Here are a couple of paragraphs that put the US budget into perspective from an article here (not agreeing or disagreeing with his suggestions, just found the description compelling):

Let's look more closely at budget revenues and outlays. In a normal year, our federal tax system takes in around 17% of GDP -- less in the current recession and more in years of financial bubbles, when capital-gains-tax collections are high. It's important to understand what those revenues buy us. Military spending accounts for around 5% of GDP. Health spending (including Medicare, Medicaid and veterans' health) is around 5% of GDP, as is Social Security (retirement, disability and veterans' benefits). Interest payments on the debt will soon reach 2% of GDP. In short, the Federal Government collects tax revenues sufficient to cover just four budget items. The rest of the budget is funded by borrowing.
Here are some of the things not covered by government revenues that we are currently borrowing to pay for: homeland security, unemployment compensation, job training, support for state and local governments, federal higher-education outlays, satellites and manned space missions, the National Science Foundation, the National Institutes of Health, the National Oceanic and Atmospheric Administration, community development, food stamps, low-cost housing, roads, bridges, environmental protection and conservation, emergency relief and reconstruction (such as for New Orleans), the judicial and penal systems, international diplomacy and poverty reduction, renewable energy. These aren't temporary programs or things we can do without. They are core public services needed for an efficient and fair economy.

Based on a similar general view, former comptroller general of the United States and head of the Government Accountability Office (GAO)"the nation's top auditor" - David Walker in his recent book Comeback America asserts that our nation's financial condition is worse than advertised and it's deteriorating with each passing day. We face a $56 plus trillion dollar financial sinkhole that is growing rapidly. 

He computes this as $13.5 trillion 2010 federal debt, plus $49.9 trillion in total long range"fiscal exposure" of all federal debts, obligations, mandatory payments and entitlements, etc. that are on the books and by law must be paid to various holder and beneficiaries.  The sinkhole grows because the hard wired obligations continue to rise while revenue shortfall (the annual deficit) continues to grow.  By 2040, Walker believes federal tax revenues will only cover interest on the debt, and Medicare + Medicaid - if nothing changes.

Based on the GAO's latest long-range budget simulation, this country's single largest federal expense within 12 years will be interest of the federal debt. And that assumes interest rates won't rise which is totally unrealistic given expected borrowing levels

He’s pretty equally hard on Republicans and Democrats for this and outlines a broad set of solutions, including tight federal budget control laws; raising the Soc Sec cap and pushing out retirement age, etc.; rationalizing Medicare; reigning in and rationalizing military spending and a host of other things.  A bulleted summary of some main points can be found here:

http://www.pgpf.org/newsroom/oped/combackamerica/

He not posit these number just to frighten, but, whether you agree or disagree with his exact conclusions or particular proposals, to bring into focus the reality of our situation which is far more serious when you look at the whole forest than might appear when looking at the individual trees, according to this top CPA.

I have bought the book...I might (possibly) attempt to provide a better summation/critique after I have read it.

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