A presidential panel set up to help trim the US budget deficit has called for steep spending cuts and tax rises.
The proposal would cut defence, social security and other spending, slashing a total of $4.1tn (£2.62tn) from the budget deficit by 2020.
But analysts say the panel is unlikely to ratify the plan with a vote, calling into question whether the US Congress will act on its recommendations.
“The solution will be painful,” the plan reads. “There is no easy way out.”
The US had a budget deficit of $1.3tn in the year to September, and critics have said the government should do more to narrow the gap.
Social Security pays for itself for another twenty years and its surplus is used in the U.S. to fund things like defense. Social Security taxes are only taken out of the first, 100,000 dollars or so out of income. If we raised the limit even slightly the fund would be intact for many decades.
Why is social security under attack? It’s doctrinal. Friedman economics says that government can do nothing right. Therefore, social security must by its very government nature be a failure. The numbers, the facts, the experience, – mean nothing. It’s very similar to a religion.
It’s why instead of the military rebuilding the Iraqi infrastructure, we used private firms. By the Friedman doctrines, this colossal incompetence and theft of government funds would have been much worse if the government had done the job.
Private and public means to accomplish ends are choices. There is no complete superiority of one over another. There never will be. There are just tools to accomplish things, no more.
That people are able to build a strange worshipful doctrine toward “free enterprise” is a symptom of larger moral and ethical problems. But above all, it’s the result of a successful sales job paid for over decades with millions and billions of dollars and preached by dozens of well financed foundations and other advocacy organizations.
Let’s read another section from the BBC coverage –
The panel’s chairman, Mr Bowles, said the panel’s work had – at the very least – made America engage in substantive debate on the deficit issue.
“The era of debt denial and the denial of its consequences is over,” he said. “We have started an adult conversation that will dominate the debate until the elected leadership in Washington does something real.”
This is nonsense. These measures have been preached for decades by “free market” conservatives.
Besides the real issues aren’t even on the table. Why do we allow companies based and operating in the United States to offshore their tax burden? What is fair tax code and what do we need to do to enforce it? I could go on.
But if you want to quickly discover the intellectual and moral absence in the committee’s recommendations, you only have to examine the question of a bank tax.
What is a bank tax, you say?
It is the phrase that must not be spoken.
Formerly, the United States was a manufacturing giant, so it gathered its taxes from a well paid middle class and by taxes on goods. Now we live in a nation based on finance and “play” money. Financial speculation is the rule of the day. Since our economy is now based on finance, doesn’t it make sense to change the nature of our tax structure to reflect our current realities? What we have now is a shrinking manufacturing base and a deteriorating middle class. We also have a banking and financial industry wedded at the hip to tax rescues and government guarantees. That merits taxation. Yet, a tax to raise a mere twenty billion dollars to help pay for another bailout was defeated in the middle of this year.
Let’s try another phrase, financial transaction tax.
No one seems to talk about this one either. Did the debt commission talk about this for page after page? You’re going to read more about it here.
A report on this kind of tax suggests that even a small, simple tax will produce 100 billion dollars in revenue each. Obviously, a trillion in a decade.
That’s deficit reduction.
There is much more to talk about. But there seems little likelihood of a genuine discussion outside of the limits established by the beltway pundits. We can only talk about Medicare, Social Security and a PR campaign of little significance to rein in defense spending. I see nothing else in the proposals likely of actual action except the mortgage deduction.
President Obama stacked the committee with those who had long wanted to attack social programs. Those programs that benefit the middle class are those that will be successfully attacked. The middle class has been targeted for four decades with continued success. There is no reason for Washington to stop now.