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You are here: Home / Politics / Domestic Politics / Actual seriousness about the deficit

Actual seriousness about the deficit

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David Leonhardt has an excellent column on the deficit. In it, he suggests that if Congress simply did nothing we would be on a firmer fiscal footing than if we adopted the Ryan budget. With an economic recovery underway, he argues, Obama should refuse to extend the Bush tax cuts when they expire at the end of 2012. If Republicans stick to their all-or-nothing guns and refuse to extend the cuts only for those making $250,000 or less, all the cuts would expire going into 2013.

This change, by itself, would solve about 75 percent of the deficit problem over the next five years. The rest could come from spending cuts, both for social programs and the military.

Over the longer term — 20 years — letting all of the Bush cuts lapse would close only about 40 percent of the budget gap. But 40 percent is a great start. No one is seriously suggesting that all deficit reduction should come from higher taxes. Much of it will have to come from slowing the growth rate of medical spending, which is the main cause of the long-term deficit.

Leonhardt admits there are better ways to raise taxes and reform the tax code, and I agree, but closing popular loopholes is politically difficult. We should also consider making the income tax more progressive by increasing brackets at the top, and making corporate and capital gains taxes progressive. Eventually, in order to make our revenue more recession-proof, we should also consider something along the lines of a national sales tax or a VAT.

But again, 75% of the current deficit problem is solved simply by ending the Bush tax cuts. Bringing down defense spending to pre-Bush levels solves most of the remaining 25%. The ACA begins to address the fundamental flaws in healthcare spending (though by no means does it go all the way…yet.) Why isn’t this considered a Very Serious proposal?

I think it’s because pundits and politicians like drama. Ryan’s plan is dramatic. It’s also horrible and cruel. But it’s just so easy to replace words like “cruel” with words like “bold” when you are insulated from the cruelty.

Reader Interactions

134Comments

  2. 2.

    dmbeaster

    I think a lot of those calling the Ryan plan “bold” also like its cruelty, though they are all about pretending otherwise. They are all for slashing entitlements and preventing any type of serious discussion about allowing taxes to revert to the level in the 90s. Its class warfare, and they are the mouthpieces for the privileged.

  4. 4.

    Bruce S

    I think Ezra K also pointed this out – it needs to take hold as “conventional wisdom,” which is now stuck in “Reagan taught us that if we create large deficits with tax cuts, we can bring down the government like we did that big statue of Saddam! Heeeyaaah!”

  6. 6.

    Social outcast

    We had the chance to get rid of the Bush tax cuts, but the democrats were too worried about the potential political fallout of letting taxes go up on everyone. The chance of a repeat performance in 2012 is pretty high.

  7. 7.

    Matthew Reid Krell

    Okay, E.D., what kind of a national sales tax or VAT are you suggesting? A complete replacement of the income tax, or a small supplement? I think most people can buy the notion of having some form of government revenue derived from non-business cycle sources, but how much you’re asking is going to be very important.

  9. 9.

    Just Some Fuckhead

    David Leonhardt has an excellent column on the deficit. In it, he suggests that if Congress simply did nothing we would be on a firmer fiscal footing than if we adopted the Ryan budget.

    Blogging superstar John Cole already made this point.

    Edit: Sorry, shoulda read the comments first.

  10. 10.

    martha

    Ezra was on Morning Ho this morning discussing this very topic and he slapped down Harold Ford in a way that was so beautiful to behold. Harold (idiot, shill, etc) didn’t believe the “math” of it all. Ezra has a really good poker face because he didn’t get the “you are such an effing idiot” look that I would have flashed…

  11. 11.

    Quiddity

    I said that yesterday (that Obama does not have to come up with an alternative to Ryan). A few hours later Jonathan Chait said the same thing Obama Should Hold Off On A Deficit Deal. Today, it’s Leonhardt.

    Sadly, I agree with Kain that the press loves drama. Will the professorial president be able to outflank the plucky congressional kid from the Midwest? Will Obama bring charts to his speech the way Ryan did on Meet the Press? Who has the best narrative that touches the heart of real Americans? Will Joe Klein, after writing that Wisconsin governor Walker’s demands were “modest requests”, render a judgment? Will David Brooks, after reading Sullivan and emailing the AEI, go bonkers and check himself into Bellevue?

    UPDATE: I was unaware that John Cole beat everyone to this concept. Kudos for being first.

  12. 12.

    Rick Taylor

    I doubt that if the Democrats stood firm, the Republicans wouldn’t compromise and agree to tax cuts only on the first $250,000 of income. And I think no one will dare to propose eliminating the Bush tax cuts entirely.

  13. 13.

    Joe Beese

    Well, we all reemember how this played out the last time.

    Obama paid lip service to keeping that campaign promise, the Republicans threatened not to extend some unemployment benefits, and Obama piously claimed he could not allow Americans to be harmed.

    It will be different this time why?

  14. 14.

    joes527

    Yeah. The tax cuts are going to be allowed to expire. That’s gonna happen. In an election year.

  15. 15.

    Redshift

    Our current deficits are caused by the unfunded Bush tax cuts, the unfunded Bush wars, and the economic crash. We know this because we had a surplus before those. Anyone who says that it’s very complicated and we need to change all sorts of other things to fix it is taking advantage of it to push another agenda.

    I’m lookin’ at you, Simpson-Bowles and Gang of Six!

    (And long-term, we need to deal with healthcare costs at large, not “entitlements.”)

  16. 16.

    cleek

    the trick is to extend them again, but for an odd number of years. that way, they don’t expire during an election year.

  17. 17.

    Joe Beese

    Note how the Catfood Commission will have gone from “draconian” to [Obama’s soundbite of the day] “balanced”.

    If Paul Ryan didn’t exist, Obama would have had to invent him.

  18. 18.

    Chris

    @dmbeaster:

    I think a lot of those calling the Ryan plan “bold” also like its cruelty, though they are all about pretending otherwise. They are all for slashing entitlements and preventing any type of serious discussion about allowing taxes to revert to the level in the 90s. Its class warfare, and they are the mouthpieces for the privileged.

    Yep. It may not be polite to say, but most of the people who watch Fox News or read PJM truly do get a thrill of happiness from the idea of stomping on the faces of all those lazy, undeserving poor people, union workers, immigrants, minorities and uppity city folk.

  19. 19.

    Joe Beese

    @Redshift:

    I’m lookin’ at you, Simpson-Bowles

    “Simpson-Bowles” = Obama

    The Catfood Commission is his baby. In fact, it may prove the most enduring legacy of his administration.

  20. 20.

    OzoneR

    @Redshift:

    Our current deficits are caused by the unfunded Bush tax cuts, the unfunded Bush wars, and the economic crash

    Simpson Bowles says that

    We know this because we had a surplus before those.

    Also, a booming economy

  21. 21.

    mclaren

    Everyone here seems to be fantasizing that Obama is a progressive and that the Democratic party actually wants to reduce the deficit and help the average working stiff.

    Nonsense.

    Obama and the Democratic party want to increase the deficit. They want to give more tax cuts to billionaires. They want to shut down Medicare and Social Security. They love the idea of endless pointless unwinnable wars. They dote on the prospect of cancer patients dying because they can’t get chemotherapy. They swoon with delight at the notion of tearing up all America’s roads because we can’t afford to pave them anymore, selling off our public parks and muncipial water facilities to foreign for-profit companies, turning off the streetlights because we don’t have the money to pay for them, letting garbage rot in the streets because there’s no money to pick it up:

    Plenty of businesses and governments furloughed workers this year, but Hawaii went further — it furloughed its schoolchildren. Public schools across the state closed on 17 Fridays during the past school year to save money, giving students the shortest academic year in the nation.

    Many transit systems have cut service to make ends meet, but Clayton County, Ga., a suburb of Atlanta, decided to cut all the way, and shut down its entire public bus system. Its last buses ran on March 31, stranding 8,400 daily riders.

    Even public safety has not been immune to the budget ax. In Colorado Springs, the downturn will be remembered, quite literally, as a dark age: the city switched off a third of its 24,512 streetlights to save money on electricity, while trimming its police force and auctioning off its police helicopters.

    Source: “Governments Go to Extremes as the Downturn Wears On,” New York Times, 6 August 2010.

    Outside this speck of a town, pop. 78, a 10-mile stretch of road had deteriorated to the point that residents reported seeing ducks floating in potholes, Mr. Zimmerman said. As the road wore out, the cost of repaving became too great. Last year, the county spent $400,000 on an RM300 Caterpillar rotary mixer to grind the road up, making it look more like the old homesteader trail it once was.

    Paved roads, historical emblems of American achievement, are being torn up across rural America and replaced with gravel or other rough surfaces as counties struggle with tight budgets and dwindling state and federal revenue. State money for local roads was cut in many places amid budget shortfalls.

    Source: “Roads to Ruin: Towns Rip Up the Pavement
    Asphalt Is Replaced By Cheaper Gravel; ‘Back to Stone Age,” Wall Street Journal, 17 July 2010.

    Obama and the Democratic leadership are thrilled with the idea of privatizing the police and the fire departments. They swell with pride, like weenies on a grill, at the likelihood that and if you get threatened by a home invasion or your house catches on fire, too bad — if you didn’t pay for a subscription to the for-profit private police department or the for-profit private fire department, too bad: your house will burn, or the home invaders will torture and rape and kill you and steal everything you own.

    Firefighters in rural Tennessee let a home burn to the ground last week because the homeowner hadn’t paid a $75 fee.

    Gene Cranick of Obion County and his family lost all of their possessions in the Sept. 29 fire, along with three dogs and a cat.

    Source: “No pay, no spray: Firefighters let home burn,” msnbc.com, 6 October 2010.

    These are now the goals of the leadership and the Democratic party. Privatize everything, turn America into a third world Somalia-style hellhole, bust the budget with endless foreign wars, cut taxes for the rich until the wealthy pay no taxes at all and everyone else subsists in debt slavery.

    Welcome to the 21st century, suckers.

  22. 22.

    OzoneR

    @Joe Beese:

    The Catfood Commission is his baby. In fact, it may prove the most enduring legacy of his administration.

    Well, it’s not, it was created through a Congressional compromise, but if it’s his most enduring legacy, I’d think that’s a good thing.

  24. 24.

    Culture of Truth

    The GOP, on our terribly urgent debt problem, today:

    “I think the president heard us loud and clear.
    If we’re going to resolve our differences and do something meaningful, raising taxes will not be part of it,” Speaker Boehner said.

  25. 25.

    SIA

    Isn’t Obama about to give his fiscal speech I have it on whitehouse.gov. Maybe we can have a Hysteria Live Blog to see how he’s selling us out this time.

    /snark-a-palooza

  27. 27.

    danimal

    @Rick Taylor:

    And I think no one will dare to propose eliminating the Bush tax cuts entirely.

    That’s not how the game should be played. All that is needed is for the Dems to propose a plan that leaves the tax increases for the rich intact.

    The rest writes itself. The GOP balks, no one is able to pass anything or beat back the other side’s filibuster, and, voila, the Clinton tax rates are the law of the land.

  28. 28.

    Culture of Truth

    “The only concrete proposal in the President’s plan that he’ll roll out today is his plan to raise taxes. And I find that very unacceptable given we’re several days out from Tax Day in this country,” said Rep. Cantor.

  29. 29.

    Skipjack

    I think the boldest yet most essentially Obama maneuver would be to do nothing. I just wonder if he is trying to figure out how to squirm out of his promise not to raise taxes on the middle class by somehow making it the House’s fault if there’s no tax deal reached in 2012, and the tax cuts sunset.

    Or maybe he’ll actually run on this. Either way, I don’t mind him telling people that that promise was from a different era, before the bottom dropped out of the economy. If we want nice things we’ll have to pay for them. I guess we’ll find out tonight.

    ETA: don’t forget the 2012 election will be over by the time the drop dead deadline on a tax deal will happen.

  31. 31.

    joes527

    @cleek:

    the trick is to extend them again, but for an odd number of years. that way, they don’t expire during an election year.

    Now THERE’s some courage.

    Pro tip: Anyone too afraid to take on the tax cuts in an election year will be too afraid to transparently line them up for expiration in an election year.

  32. 32.

    The Political Nihilist Formerly Known As Kryptik

    Speech starting, yo.

    Front pagers, you’re falling behind, no open thread already? geez. :P

  33. 33.

    Villago Delenda Est

    Much of it will have to come from slowing the growth rate of medical spending, which is the main cause of the long-term deficit.

    The parasitism in the health care industry is totally out of control. Start with the utterly useless for-profit health “insurance” industry that extracts money from people and returns…nothing.

  34. 34.

    TenguPhule

    Plenty of businesses and governments furloughed workers this year, but Hawaii went further—it furloughed its schoolchildren. Public schools across the state closed on 17 Fridays during the past school year to save money, giving students the shortest academic year in the nation.

    Screw you mclaren. That was under Republican governor LINDA LINGLE. The Sarah Palin with a higher IQ.

  35. 35.

    Martin

    For the record, in order to save the nation from being unable to pay its bills, the Republicans have come up with the incredibly clever solution of refusing to pay the nations bills.

  36. 36.

    TenguPhule

    the trick is to extend them again, but for an odd number of years. that way, they don’t expire during an election year.

    The trick is to insert a popular poison pill into the bill. Something subtle like “every friday, a random CEO billioniare gets hanged on Wall Street until they agree to treat cap gains and stock offers as earned income for tax purposes”.

  38. 38.

    4tehlulz

    From TPM:

    >Strengthening the Independent Payment Advisory Board, created by the health care law to recommend and implement cost savings reforms to hold down the cost-per-Medicare-patient.

    DEF PANELZ

    >Obama will propose using Medicare’s purchasing power to reduce prescription drug costs for seniors

    SUCK IT RYAN

    >Reductions in agricultural subsidies

    YEEEEAAAHHHHH

    /cruise control

  40. 40.

    TenguPhule

    SUCK IT CHOKE ON IT AS HE FORCES THE LARGE PACKAGE DOWN YOUR THROAT RYAN

    Improved.

  45. 45.

    Wag

    @E.D. Kain:

    You could even have it only on ‘sin’ items.

    Like Gasoline. All those people driving thier hummers are sinning like ther’s no tomorrow

  49. 49.

    Culture of Truth

    “One vision has been championed by Republicans in the House of Representatives and embraced by several of their party’s presidential candidates. It’s a plan that aims to reduce our deficit by $4 trillion over the next ten years, and one that addresses the challenge of Medicare and Medicaid in the years after that.

    A 70% cut to clean energy. A 25% cut in education. A 30% cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s what they’re proposing. These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget. These aren’t the kind of cuts that Republicans and Democrats on the Fiscal Commission proposed. These are the kind of cuts that tell us we can’t afford the America we believe in. And they paint a vision of our future that’s deeply pessimistic.”

  54. 54.

    Studly Pantload, Vibrant Trollbot for Obama

    @Corner Stone:

    You would think *some*one would have mentioned to him by now that the mics pick it up every time he does that, which is almost with every sentence.

    Anyhoo, keep the reports comin’ for us firewall-blocked worker bees!

  55. 55.

    Bulworth

    I’m reasonably sure I pointed out that doing nothing was far preferable to the Ryan plan last week and was mocked by the very serious Sully. Glad the NY Times caught up to speed with me.

    Can’t we all just agree that we have a monumental Debt Crisis and that taxes can never be raised on anyone, ever?! We don’t have a taxing problem, we have a spending on hammocks for the poor people problem.

    Also, too, you got to feel it for the Media Villagers. They loves them some Debt Crisis. They loved them some Iraq Wars and Bush Tax Cuts, too. But they really loves them some Debt Crisis. The Clinton Presidency left the Village Elite in dire straits. The Debt was all but wiped out. So the Media Village was left to complain about missing “W”‘s on the keyboards and how Clinton and his ilk had merely “messed up the place”, according to the late David Broder.

    But now, thanks to the Bush Tax Cuts and Wars Without End around the globe, the Debt Crisis is back, and somebody Serious, Paul Ryan, is telling the Village Elite what it wants to hear.

  57. 57.

    Corner Stone

    “A fundamentally different America than we’ve known”
    That’s their point!!

  58. 58.

    Culture of Truth

    “Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes? They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.”

  60. 60.

    SIA

    Good, he is eviscerating the Ryan plan, without also praising it unduly. That’s a relief.

    These are the kind of cuts that tells us we can’t afford the America that I believe in.

  66. 66.

    Sentient Puddle

    We still have yet to get into the meat of the speech, but thus far, one big thing is on my mind: Why the hell didn’t they schedule this for primetime?

  67. 67.

    Just Some Fuckhead

    @Corner Stone:

    Obama is adultly taking the Ryan Budget Plan apart. Limb by limb.

    I agree, but he has this odd habit of shooting his own side whenever he feels it necessary to criticize Republicans. So I am going to wait before breaking out the confetti.

  69. 69.

    HyperIon

    @cleek wrote:

    the trick is to extend them again, but for an odd number of years. that way, they don’t expire during an election year.

    I’m tired of tricks.
    Couldn’t we just do the right thing?
    Or the reasonable thing?
    Or (as has been suggested) NO thing?

  72. 72.

    Rick Taylor

    The rest writes itself. The GOP balks, no one is able to pass anything or beat back the other side’s filibuster, and, voila, the Clinton tax rates are the law of the land.

    That’s the thing, I don’t think the GOP will balk. They were prepared to compromise last time, until they found they could bargain for more. I suspect that either the tax cuts will continue in their entirety, or if the Democrats stand firm, the Republicans will take what they can get.

  75. 75.

    Chyron HR

    @Sentient Puddle:

    Why the hell didn’t they schedule this for primetime?

    Because that might cut into CSI or American Idol or Kirstie Alley falling on her ass again. You know, IMPORTANT stuff.

  76. 76.

    Dave

    And remember: Any tax hikes he talks about here already include expiring the Bush tax breaks above 250K in the baseline.

  77. 77.

    Jules

    Favorite Tweets so far:

    AngryBlackLady “THE BASE” CROW-EATING TO BEGIN IN 3… 2… 1… #p2 #obama

    RepWeiner why im not president. my version : “the gop plan is a disaster and ill chew my arm off before i sign it”

  78. 78.

    Culture of Truth

    OH SNAP

    “The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America. As Ronald Reagan’s own budget director said, there’s nothing “serious” or “courageous” about this plan. There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. And this is not a vision of the America I know.”

    “Those motherfuckers!!” *

    * possibly edited out of final version

  80. 80.

    artem1s

    Why isn’t this considered a Very Serious proposal?

    I think it’s because politicians and pundits make more than $250K a year. Especially pundits.

  84. 84.

    Corner Stone

    He’s having problems with those teleprompters.

    Not a critique about “teleprompters” just a statement. He’s hit some glitches in delivery.

  86. 86.

    Elia Isquire

    2.24 pm. This speech is getting more defiantly liberal as it goes along. He uses the v-word (“vouchers”) to describe what the GOP wants to do to Medicare. Putting “seniors at the mercy of insurance companies” is a politically potent piece of fear-mongering.

    lol

  90. 90.

    Culture of Truth

    “And in early May, the Vice President will begin regular meetings with leaders in both parties”

    oh no he didn’t

  91. 91.

    Benjamin Cisco

    “…scholarships that I wouldn’t be here without, and many of YOU wouldn’t be here without…”
    __
    BOOM goes the dynamite!

  93. 93.

    Benjamin Cisco

    “…scholarships that I wouldn’t be here without, and many of YOU wouldn’t be here without…”
    __
    BOOM goes the dynamite!

  95. 95.

    Butler

    So its a classic re-branding, meant to flip Republicans rhetoric on its head:

    Tax increases for the wealthy = spending in the tax code

    And since Republicans want to cut spending, this should work for them!

  97. 97.

    chopper

    so, has he advocated slashing SS and medicare yet, like everyone on the wreck list was screeching about?

  99. 99.

    Chyron HR

    @chopper:

    Just wait, once everyone has started to leave he’ll go “coughcoughsocialsecurityisabolishedforevercough”.

  101. 101.

    SIA

    Also, he didn’t criticize his own party. I don’t see a lot of ammunition for the firebaggers here. If looking reasonable was his aim, that’s been achieved.

    I like having a smart guy as president.

  102. 102.

    Just Some Fuckhead

    so, has he advocated slashing SS and medicare yet, like everyone on the wreck list was screeching about?

    Yes, but he was characteristically vague about it.

  104. 104.

    Paula

    @chopper:

    Of course he did. No matter what you read anywhere else, Barack Obama has a secret plan in cahoots with the conservatives to de-fund our social safety nets. This speech is Words, just Words, pretty pretty words.

  105. 105.

    comrade scott's agenda of rage

    @Dave:

    “Others” meaning the usual FDL crowd and their sock puppets that dominate the GOS’s Wrecks List.

    Ah, to be so Pure Left and so wrong all the time. In words of Robin Williams:

    “ASSHOLES DOOOOO VEX MEEEEEEEEEE!!!’

  108. 108.

    chopper

    well, if you collect every third word in the speech you’ll find a hidden code advocating ending social security and medicare as we know it. oddly enough, if you go with every 5th word you end up with a rickroll.

  109. 109.

    Corner Stone

    Something else is obvious. Omnes Omnibus stole quite a few commas from the speech as written for delivery. Because the delivery had a bunch more commas in it.

  113. 113.

    chopper

    @Paula:

    i’m almost afraid to read the comments at GOS on the speech, or see what garbage is gonna stick on the rec list tonight.

  114. 114.

    Paula

    @SIA:

    Yeah he did. He mentioned Democrats and Republicans IN THE SAME PARAGRAPH, ERGO FALSE EQUIVALENCE, ERGO BOTH SIDES DO IT ERGO HIPSTER DAVID BRODER ZOmg g … g …

  118. 118.

    Bob Loblaw

    @Dave:

    This conflict will never ever make sense to me. It seems like both sides are intent on remaining stupid and angry forever.

    Obama just did exactly what “unserious, unpragmatic, bully pulpit fetishist libruls” wanted. Clear lines of partisan division, overwhelming use of rhetorical force, etc. And what do we know will happen?

    1. The people who called for this tactic will not acknowledge it, and continue blaming him for something else. Even though he isn’t looking to sell anybody out.

    2. Obama’s diehard supporters will also not acknowledge that he is actually living up to those leftier critiques and changing his governing pattern. They weren’t baseless.

    Whatever.

  119. 119.

    FlipYrWhig

    I missed it. Catching up on comments…

    Corner Stone, what’s your final verdict? Your running commentary was surprisingly positive.

  120. 120.

    mclaren

    @cleek:

    not actually listening to it, cause i got a fucking job.

    Wait a while. That’ll change…courtesy of your hero, Obama.

  122. 122.

    Just Some Fuckhead

    You’d think the President was 5 years old the way the Balloon Juice moms feel like they have to protect him. The most powerful man in the world, who can have you disappeared or deleted with a word, needs some minimum wage hacks on the internet being proactively outraged on his behalf.

  123. 123.

    FlipYrWhig

    @chopper:

    i’m almost afraid to read the comments at GOS on the speech, or see what garbage is gonna stick on the rec list tonight.

    “BREAKING: Why Bradley Manning Needs a Public Option”

  124. 124.

    Corner Stone

    @FlipYrWhig: Great speech. I tend to enjoy all Obama’s speeches. He surprised me with the repeated, yet understated eviscerating of the Ryan Plan. You could tell he wanted to say, “Come the fuck on! Really?” at a couple points.
    And as usual, the overarching theme was vaguely positively vague. Which was what I actually did expect. He’s not going to set policy at G-dub. Kinda hokey in spots, as he tends to be.
    IOW, He sold me out(tm) !!

  126. 126.

    srv

    @Corner Stone: Y’all lost:

    The good news—and the bad news—for America is that the nation’s own super-elite is rapidly adjusting to this more global perspective. The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled.
    __
    I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

  127. 127.

    pragmatism

    E.D., really enjoying your forbes work. keep it up man. warmest regards,
    idiot who unsuccessfully tried to troll you

  128. 128.

    mclaren

    Boy, is this ever discouraging. Now that Obama has come out strongly in favor of the Republican plan, we’re all screwed.

    “How can you say that?” you ask. “Obama is speaking out against the Republican deficit-cutting plan!”

    Exactly.

    History shows that whenever Obama speaks out against a plan, he acts strongly in favor of it.

    Candidate Obama spoke out strongly against mandates in health care reform — so naturally, President Obama worked hard in favor of individual mandates in his HCR bill. And that’s what we got: individual mandates.

    Candidate Obama spoke out vehemently against more tax cuts for the rich — so, of course, President Obama made sure to sign a bill in favor of more tax cuts for the rich.

    And now Obama has spoken out against the Republican plan that slashes medicare and social security in favor of even more tax cuts for the rich.

    What does that tell us?

    Three guesses, folks.

  129. 129.

    FlipYrWhig

    @Corner Stone: Good to know. I just read it. I’m not in love with the “there are those on this side who say this, and there are those on the other side who say the other” structure, but presidential speechwriters always dig it.

  130. 130.

    Calouste

    @srv:

    “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”

    Of course no such thing applies to people who demand 10,000 times the paycheck, because by their Galtian heroics they deliver 10,000,000 times the value. In fact, they are grossly underpaid, almost working for free even.

  132. 132.

    Ruckus

    @E.D. Kain:
    What’s sin to you may not be at all sinful to others.

    ETA and what about that part of no laws concerning religion. Calling something (ie:alcohol) a sin imparts someone’s religion on drinking.
    I’m not against the tax but I think the wording is important

  133. 133.

    mclaren

    Yet more of Obama’s deficit speech translated into plain English!

    To meet this challenge, our leaders came together three times during the 1990s to concoct ever more outlandish Ponzi schemes. They forged historic scams: first, by lowering taxes on the rich in the 1980s and paying for it with increased revenue from the stock market bubble that ended with the S&L implosion and the stock market crash of 1987; next, an even more audacious Ponzi scheme to cut taxes on capital gains and elminiate financial oversight and regulation, including shutting down the Glass-Stagall oversight on banks, and pay for that giant scam with all the phony revenue generated by the dot-com bubble: and last but far from least, cutting taxes on the rich even further and creating a giant feeding trough for a military-industrial-police-terror bubble that was all based on the lie that America was in any serious danger from terrorist — and this last Ponzi scheme was paid for with the largest bubble in history, the historic housing bubble. Perpetrating these three historic Ponzi schemes required tough decisions made by the first President Bush and President Clinton; by Democratic Congresses and a Republican Congress. Many lies had to be told, many scams had to be covered, and vast amounts of money had to be transferred to the rich without the middle class realizing it. All three agreements asked for shared lies and shared Ponzi schemes, but they largely protected the rich while savagin the middle class and the poor, and they preserved the control of the wealthy over American society and the American economy for the foreseeable future.”

    As a result of these bipartisan efforts, America’s finances were in great shape by the year 2000. We went from deficit to surplus. America was actually on track to becoming completely debt-free, and we were prepared for the retirement of the Baby Boomers.

    TRANSLATION: “As a result of these bipartisan Ponzi schemes, America’s finances seemed as though they were in great shape by the year 2000. We went from deficit to surplus, on paper, even though all the bubbles threatening America (higher education costs, military-industrial complex, Peak Oil, Global Warming, health care costs) remained out of control and unsustainable. America look as though it was actually on track to becoming completely debt-free, even though the bubbles were all growing bigger and bigger and about to burst, and 330 mllion gullible foolish American actually believed we were prepared for the retirement of the Baby Boomers even though it was all a giant scam.”

    But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program – but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts – tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.

    TRANSLATION: “But after Democrats and Republicans colluded in to destroy financial regulation and gut financial ovefrsight and shutdown the historic agencies and laws that had been enacted to prevent gross fraud after the Great Deression, and when we did this is an act of suicidal bipartisan folly and greed during the 1990s, we lost our way even more badly in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program – but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts – tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.”

    To give you an idea of how much damage this caused to our national checkbook, consider this: in the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

    TRANSLATION: “To give you an idea of how much damage both Democrats under Clinton and Republicans under Reagan had already caused to our national checkbook even before the year 2000, consider this: in the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, those 6 giant unsustainable bubbles of unaffordable medical cost increases and insanely unaffordable tuition increase and the costs of skyrocketing oil prices due to Peak Oil and crop loss and drought due to global warming and American students’ inability to compete with the rest of the world due our shitty educational system and our completely unsustainable bloated military-industrial complex had already balloon to historical levels in the coming years. So even if Dubya hadn’t trashed our finances and even if the Republican congress hadn’t colluded in his irresponsibility, America’s finances would still be in the shitter today.”

    Of course, that’s not what happened. And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place. When I took office, our projected deficit was more than $1 trillion. On top of that, we faced a terrible financial crisis and a recession that, like most recessions, led us to temporarily borrow even more. In this case, we took a series of emergency steps that saved millions of jobs, kept credit flowing, and provided working families extra money in their pockets. It was the right thing to do, but these steps were expensive, and added to our deficits in the short term.

    TRANSLATION: “Of course, that’s exactly what happened. And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place. When I took office, our projected deficit was more than $1 trillion –but that was a phony number because it doesn’t include all our out-of-control military spending and our spiralling college debt and our collapsing middle class and our economy wrecking its own tax base by offshoring all our middle class jobs. On top of that, we faced a terrible financial crisis caused by both Democrat and Republican deregulation and a recession that, unlike most recessions, is now permanently destroying the American middle class, leaving us a nation of dog groomers and pizza deliverymen. In this case, we took a series of emergency steps preserved the wealth of the billionaires while throwing millions of average Americans out of work, but I don’t give a shit beacuse billionaires fundmy campaign while average Americans don’t have any money worth speaking of. It was the expedient thing to do and will insure I get re-elected with support from the top 1%, but these steps were expensive, and added to our deficits in the short term. So I’m going to stick it to the middle class and crush them even further, lest I risk offending my billionaire buddies.”

  134. 134.

    tomvox1

    No one is seriously suggesting that all deficit reduction should come from higher taxes.

    Why the fuck not? The top .1% of earners have made out like Genghis Khan over the last 30 years. Just create a super-wealth bracket that taxes at 42% for the top .1% and allow the next highest bracket to return to 39.6%. After all:

    Most amazing of all, the top 0.1% — that’s one-tenth of one percent — had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).

    That should fix some goddamn balance sheets and those folks sure won’t miss it. What is that to them, one less diamond encrusted Rolex a month?

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