seriously, i know no one really keeps up with the government anymore. we all get so frustrated with it--the politics, the back-biting, the he said-she said--wait then why the hell do we have reality tv like "jerserylicious"? oh right, we're just tired of knowing where our money goes instead of where bimbos spend theirs. but i've been a little concerned about the O-budget. i mean i wasn't very happy about his new healthcare package that managed to increase my out of pocket costs. i was thrilled that we as a group voted out the morons that followed him down that little yellow brick road that might be gold for the unemployed but crap for those that actually are employed. so regardless of my normal apathy to the budget and my tax money, this time i'm worried. is he going to do away with my tax breaks? is he pushing for tax increases? how important is the damn deficit? ok...so here's the facts (ok, with a little of my opinion following):
the good news:
his budget proposes dropping the deficit to $1.01T in 2012. don't get impressed. the media is saying that's a 5% reduction of the deficit. the current deficit is $14.15T (by usdebtclock.org), it's actually closer to 7%, but the truth is that is an approximation based on the budget going through as it is with interest added back in.
the President's plan supposedly will reduce the deficit-to-GDP ratio from 10.9% to 7% by the end of the year. (GDP for my laymen friends is gross national product--which is a fancy way of saying how much our economy produces.) this sounds like good news too.
or is it? the bad news:
1. to really payoff the deficit, taxes will have to rise. no way around it. conservative or liberal, all those politicians know it. we, as Americans, need to know it. the deficit is never getting paid off without an increase in taxes. when they say 10.9% it's actually a fancy dancy way of presenting it to confuse you if you want to compare to say other countries. economists will tell you that our debt is a percentage of our GDP. what our politicians mean is that our GDP is only 10.9% (2010) of our debt. (hahaha. don't you love it?!?! ok back to my point...) but unlike what our slanted media will tell you (always per their agenda), other countries debts are equally, if not more, shocking. yes, really--and not just 3rd world countries.
a. japan: 192% (these numbers are in economist way)
b. italy: 115%
c. greece: 108%
d. belgium: 99%
e. canada: 72%
f. uk: 68%
g. spain: 60%
h: brazil: 47%
i. mexico: 43%
j. USA: 40%
in fact, the countries with the lowest deficits are, drum roll please, some of the most impoverised countries in the world:
a. trinidad: 27%
b. mozambique: 26%
c. peru: 26%
d, honduras: 24%
e. uganda: 19%
f. china: 18%
g. nigeria: 18%
in fact, the most impoverished countries almost all fall down at the bottom of the deficit map. shouldn't be surprising that most of these countries are not known for taking care of their impoverished--we, us and the europeans, send millions of dollars in donations (private, organizational, and of course, our tax money) to help people in these countries, because many of them can't (or won't) help their own. (all data is available at www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html. i don't even want to venture why this would be important to the cia. we can only imagine, and i'll avoid speculating since i don't want to be put on a watch list of some sort.)
my point: yes, the debt is a problem. but compared to our counterparts--nominal at best--compared to our other woes. i mean seriously, wouldn't you hate to be japanese at this point?!?!
2. increase all (yes, ALL) of our taxes. no more mortgage interest write-offs. no more low income tax cuts or freebies for the below poverty level with credits like EIC (earned income credit)--yes, for all the "tax the rich" crap, EIC is for low income families and O-budget will eliminate it. for some people that are below poverty level, this will actually mean that they can collect more on welfare than they can by working and getting EIC. the obama plan includes raising all of our taxes to full state within 10 years. they're not telling you that part. it's all glossed over with the fact that we got a reprieve from congress at the end of the year. obama's plan takes all that away for 2011 taxes, and then takes the rest of the reductions over the next 9 years.
i know, i know, he probably won't be in office. he's pulling a billy boy here. bill clinton was told over and over and over that raising the minimum wage would increase the cost of living but not the overall compensation of the middle class. it was a ten year plan--raising minimum wage from $3.35 per hour to $7+ per hour. how many of us benefited? those of us that were making minimum wage perhaps got a little initially, but it was eaten up relatively quickly with the increases in prices. so anyone fooling themselves into thinking that this can be repealed later--congress never even flinched again about the subject. a ten year plan on taxes could be permanent.
worse yet, at this point, most of us really reigned in our spending over the last couple of years. fears of increased taxes and a continued drop in the economy scared all of us--from big business to investors to middle class to low income. we all started wondering how we could survive if the economy completely tanked. more taxes means a lot of us will continue to tighten our belts, keep our money close, and refrain from spending and/or investing. is that what our economy needs right now? ok, obama's agenda--the one he's been pitching since the giddy up--paying off debt for long term posterity--all sounds good. but if no one is working, the debt will be the least of our problems. companies are just starting to feel good about hiring again. if they think their tax bill is going up, they will act like the rest of us. that new tv can wait--and so can them re-hiring those standing in the unemployment lines (or worse yet, those no longer eligible for unemployment). the agenda aside--it won't help the economy right now.
3. after last year, obama's hit squad has realized that attacking social security or medicaid is OUT. but look where he wants to hit now--no more student grants for college and a reduction in student loans. in the scope of associates or better for 25 to 34 year olds:
a. russia: 54%
b. canada: 48%
c. israel: 44%
d. japan: 41%
e. new zealand: 41%
f. USA: 40%
ok, so education is possibly a place to cut...but, then consider that most pell grants and federal subsidized student loans are to people that couldn't finance a college education otherwise. the low income kid who wants a better life. the parents that can't afford to send their kids to school because they literally live paycheck to paycheck. military families. we perpetuate the lower class and their plight if we won't reward and assist those that want and can earn a better life. the irony, and hypocrisy, is that obama and his wife both went to school on student loans. seriously. so is it that he wants to cut out people like himself?!?! he himself is a shining example of the success of the Reaganomics plan to educate all Americans for the improvement of the whole. how can someone who benefited from those want to be the one to cut them out?
4. increase the age of social security for full social security benefits. according to current life insurance guidelines, the average live expectancy for men born in 1970 is 67 and women is 74. right now, our age bracket (generation x--approximately born between 1963 to 1983), will be allowed to retire at 67. good news. most of you men will be dead. not collecting any benefits. awesome, right? raise the social security age? really...well, obama's not worried because as a former President he gets to collect a paycheck for the rest of his life. secret service, money for his future presidential library, medical, yep. but for the rest of us working schlubs: work til you die, and for the other half of you, til you are damn close.
but that's not all folks:
5. increase insurance premiums for retired military. got news for you--those of us that joined right before desert storm were only entitled to 75% of base (base only) pay. the food money, cost of area living money, not included. so really that equates to around 50% of our actual pay. now for those brave enough to stay that joined in the early 90s after desert storm, they are only entitled to 50% of their base pay--which will really equate to 37% of their pay--and for those joining now, it can be as low as 25% when they, if they, retire. really?!?! increase insurance premiums on retired military? thank you for your service, but we're going to make more cuts to your retiree benefits--adding to the already drastic cuts from the clinton era.
6. cuts from federal retraining programs for older workers. fancy wording right? we all know this probably could be viable--except he specified "older" workers. so those of you that are unemployed right now and needing help to get training for a new job because yours went overseas or because you only have a high school diploma from 1980, forget it. you're going to be deemed completely unemployable.
7. reduction in the ability to claim mortgage taxes for the rich. well, ok he said rich--how many of us think $80K per year for a married couple is rich???? $40K for an individual??!?! hmmm....next...
8. oh, and a tax increase on the rich. again $80K is a married couple's line in the sand, $40K for an individual. do we really think people in those categories are rich?!?!? how many of us think making $21,660 for an individual is outside of poverty level?!?!? the federal guidelines do though. in fact, the average household income in the USA in 2009 was $61K according to the census bureau--based on income tax filings, of course. does $80K still sound rich?!?!
worse yet, his economic plan literally to be successful must exceed the highest estimates by up to 30%. most economists expect our recovery to be somewhere around 3 to 5% this year. excellent considering. o-budget needs a minimum of 7% this year alone. it needs our economy to grow at the rate it was growing in the early 2000s--never taking into account that the reason the economy was growing exponentially like that was because of poor lending practices, an exasperated real estate market, and ponsi-like investment practices of banks and wall street. we hope that doesn't happen again, and yet, o-budget is counting on it. nice.
9. most of his plan doesn't specify where the cuts are going to come from. he wants congress to take out that axe. i was impressed by a 5% cut to all of their offices' budgets. i'd be really thrilled if they did that for 3 years in a row. an overall 15% cut in the congressional budget would be awesome over 3 years--especially if they maintained it permanently. but that money, in fact any money that they cut right now, should be justification for keeping our tax cuts and reductions in place, shouldn't it?
so what do i think? after the research:
1. shut up about the damn deficit. we aren't as far in debt as it sounds. it sucks, but worrying about it today isn't going to change the fact that now it not a good time to worry about it.
2. if o-budget is worried about the poor and unemployed, why are a lot of the cuts being suggested custom made to keep them there?
3. if $80K a year is rich for a family of 4, well, perhaps if they have no debt, no house payment, and no taxes. a family of 4 at $80K, still pays an average of 38% taxes overall, with approximately 30% going to federal, medicaid and social security alone. the feds get plenty. it's not our taxes that need to increase; it's their spending that needs to decrease.
obama's book paid him millions in bonus--as a former (God i hope) President, he will be able to charge $100K or more per speaking engagement. he and his family are well taken care of now--and for the rest of their lives. he's got all kinds of things that the rest of us should give up, so how about he gives up his $400K salary this year and next toward the deficit? he wants us to pay more, but give up none. he wants random cuts, but no idea where. and he wants us to pour our money into failures like the healthcare bill, the debacle "cash for clunkers", and more and more extensions for unemployment.
my suggestion: cuts to budget go to the deficit. if they find fat cat, pork bellies (and we all know they can without even looking) in the current spending, cut those and use that money to the deficit. but NO more taxes. we can barely handle what we have now.
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