The Fiscal Cliff thread.

[Tulane Skins Fan]

I suspect we disagree over the degree to which a balanced budget should pay down debt versus grow it. I'd pay it down, but true balance isn't required. On that I agree.

Either way, our biggest debt problems are in front of us, not behind us. At some point it would be nice if we had real leadership capable of taking on these problems. I'm cautiously optmistic, moreso than anytime over the last few years. Obama's in legacy territory. He'll want to make some progress on entitlements other than creation of new entitlements, I'd think.

I don't disagree with that generally, but I'm saying the goal of balancing the debt is not a good one. Paying down and balancing are two different things.

[Larry]

It's probably fair to say the Democratic position is "deficits don't matter.. but we can sprinkle in some taxes on the rich 'cause they raked it in under Bush"

Uh, funny, I don;t recall ever reading, at least in Tailgate, a single Democrat so much as imply that raising taxes on the rich will solve our deficits. Or that deficits don't matter. ("Deficits don't matter" has been the Republican slogan, for the last 30 years.)

I will point out that it was Democrats, in the House and Senate, who passed the "pay as you go" rules. And it was the Republicans (including every single one of the Tea Partiers) who altered those rules to "well, tax cuts, (no matter how big) and repealing Obamacare, (no matter how much it costs) don't have to be paid for".

---------- Post added January-2nd-2013 at 04:05 PM ----------

I think they only say deficit reduction so they can claim some kind of success when they pass a bill that does only a tiny amount of deficit reduction. That will work with voters because that's how little most voters pay attention to facts.

Here's a fact:

How to reduce the national debt:

1) Eliminate the federal deficit, and replace it with a surplus.

2) There is no 2.

Method #1 is guaranteed to work. And all other methods are guaranteed to fail.

It's an impossible goal.

(Which is why, when the Republicans are out of power, they attack the Democrats for failing to deliver it. They haven't delivered free unicorns, either, therefore the Democrats are obviously evil.)

(Well, that and the fact that Obama has reduced the deficit. So they can't attack him for that. All they can do is attack him for failing to completely eliminate it.)

(Note: I will point out that, IMO, it's somewhat dubious to blame Obama for how big the deficit is, or for the fact that it's getting smaller. The deficit is huge because the economy sucks, not (primarily) because of any direct policy of Obama, or anybody else. And the deficit has been getting smaller, because the economy is getting slightly better. Not (directly) because of any deficit-reducing policies of either Party. Just as, IMO, you can't (directly) blame Bush for the deficit that Obama inherited, either. Closest you can do, IMO, would be to try to blame Bush for the economy sucking, and the economy caused the deficit. IMO, maybe it's fair to blame him for the sucky economy. But, IMO, proving it would be tougher.)

---------- Post added January-2nd-2013 at 04:11 PM ----------

There's a lot left to be debated, and I'm not sure, but I THINK the "doc fix," (which is basically welfare for doc's.. or at least a government "handout") is in there.

You care to even attempt to support the claim that the "doc fix" is a "handout"?

---------- Post added January-2nd-2013 at 04:14 PM ----------

I suspect we disagree over the degree to which a balanced budget should pay down debt versus grow it.

A balanced budget is by definition, one which neither grows nor pays down debt.

No disagreement is possible.

(Well, no reality-based disagreement is possible.)

I'd pay it down, but true balance isn't required. On that I agree.

It is impossible to pay down the debt without balancing the budget, and then some.

Whether you agree or not.

[Wrong Direction]

It is impossible to pay down the debt without balancing the budget, and then some.

Whether you agree or not.

You're splitting technical hairs for no apparent reason. If that puts you in a good mood, please continue.

I'm reading a review of the act from a tax company. In it I see that the CBO official estimate is this bill will cut tax revenue by $3.63 billion over the next 10 years. I can imagine all R's and D's who voted for it saying they voted for the largest tax cut ever. I can imagine D's saying Bush's tax cuts really were only tax cuts for the rich despite the fact that removal of what Obama insisted was bad still cuts by nearly $4 trillion over the next 10 years. I'm sure there are many ways to spin this stuff.

Oh, and no doc fix, which I agree is not a handout. Sounds like the debt ceiling will come in February as well.

[Larry]

I'd like to see the democrats tackle entitlement reform.

Agree. For several reasons.

1) Entitlements are the 800 lb gorilla in the whole budget-spending-taxation-deficit problem.

And the gorilla is getting bigger. Quickly.

It's not the problem, right now, that the GOP is loudly yelling that it is. But it's guaranteed that it's going to be a problem. And not that far away.

And, if you wait till it is that big a problem, then fixing the problem is going to be devastating. It's much, much, better, to prevent the problem from happening, through proper planning.

2) And because the GOP has made it clear that they don't want to solve the problem. They want to yell real loudly about a problem that hasn't happened yet, and use those claims to justify getting rid of things entirely.

The Democrats are in a "only Nixon could go to China" situation. Either SS and Medicare are going to be fixed, by the Democrats, or the Republicans are going to eventually get enough votes to eliminate them.

----------

Me, I keep thinking that a proposal such as what I've called The Larry Plan:

• For the next two years, no changes are made.
• Beginning in the third year, the "retirement age" for SS and Medicare goes up by six months, every year, until, 13 years from now, it's 70.

would go a long way towards reducing the problem.

It would make SS solvent for the next 75 years.

I don't know what it would do for Medicare. Medicare is heavily subsidized, right now. I assume it would reduce the rate of growth. But I really doubt that it's going to balance it, ever.

----------

IMO, entitlements desperately need to be addressed. And it's been made very clear that the Republicans aren't going to. They don't want to fix them.

[Wrong Direction]

IMO, entitlements desperately need to be addressed. And it's been made very clear that the Republicans aren't going to. They don't want to fix them.

SMH. I think we have a different opinion of "fix."

[Tulane Skins Fan]

You care to even attempt to support the claim that the "doc fix" is a "handout"?

Giving doctors a raise for doing the same things they've done? Its more government money to the pockets of doctors.

[Prosperity]

the Baby Boomers would sacrifice food stamps, national defense, and public education before letting the retirement age go up to 70 or even include a means test.

[Larry]

Giving doctors a raise for doing the same things they've done? Its more government money to the pockets of doctors.

Ah. I see. Apparently, at least one of us doesn't know what it is.

At least as I understand it, the "doc" fix isn't a raise. It's countermanding a scheduled cut.

Present law says that every year, the amount of money Medicare pays to doctors will go down. The problem is that a lot of providers currently say that they're already losing money when they take Medicare patients, right now, and they are threatening to stop taking Medicare patients if it's cut any further. (And, from what I've read, the claims are at least believable. Supposedly, it's at least debatable whether providers lose money on Medicare patients.)

Congress' solution is to leave the law alone, so that the law says that the payments are going to go down, next year (and every year after that). (This means that, when the CBO predicts future spending, the CBO is required, by law, to pretend that the payments will go down next year, and every year.). And then every year, Congress countermands that law, and keeps the payments the same.

(It's kind of like pretending that a tax cut is temporary, so that you can claim that "over the next 10 years, it will only cost . . . ", and then voting not to let it expire, every year.)

---------- Post added January-2nd-2013 at 06:40 PM ----------

the Baby Boomers would sacrifice food stamps, national defense, and public education before letting the retirement age go up to 70 or even include a means test.

I'll point out that I, myself, recently turned 55, and I've been supporting this idea for at least 5 years. So your opinion obviously doesn't apply to all Boomers. (Whether it applies to enough of them, I suspect neither of us knows.)

[isle-hawg]

What a shocker - our elected officials kick the can down the road once again - shameful, spineless bastards!

[Gallen5862]

http://reason.com/blog/2013/01/02/th...er-that-congre


The Doc Fix: Another Reminder That Congress Can't Stick to its Own Deficit Reduction Plans
Peter Suderman|Jan. 2, 2013 1:47 pm



Another year, another doc fix—and another reminder of how lobbying pressure and Congressional skittishness can defang measures intended to reduce the deficit.

The fiscal cliff bill passed in the House yesterday includes once again includes a “doc fix”—a provision designed to avert big cuts in Medicare’s physician reimbursements called for by the Sustainable Growth Rate (the SGR). The SGR, which ties physician’s payment rates to the economy, was put in place as part of a 1997 deficit-reduction deal, and was intended to help restrain the growth of Medicare spending on payments to doctors. But after the SGR resulted in a 4.8 percent reimbursement cut in 2002, doctors put pressure on Congress to never let the cuts go into effect again.

It worked. Since 2002, Congress has never let the cuts go into effect, and some years it’s given doctors a small raise. And because the SGR formula is designed to hold physician payments to a growth trend, the distance between what doctors are supposed to be paid under the formula and what they are actually paid has grown ever larger. This year, the formula called for a 26.5 percent cut. The cost of overriding it was about $30 billion

[Tulane Skins Fan]

http://reason.com/blog/2013/01/02/th...er-that-congre


The Doc Fix: Another Reminder That Congress Can't Stick to its Own Deficit Reduction Plans
Peter Suderman|Jan. 2, 2013 1:47 pm



Another year, another doc fix—and another reminder of how lobbying pressure and Congressional skittishness can defang measures intended to reduce the deficit.

The fiscal cliff bill passed in the House yesterday includes once again includes a “doc fix”—a provision designed to avert big cuts in Medicare’s physician reimbursements called for by the Sustainable Growth Rate (the SGR). The SGR, which ties physician’s payment rates to the economy, was put in place as part of a 1997 deficit-reduction deal, and was intended to help restrain the growth of Medicare spending on payments to doctors. But after the SGR resulted in a 4.8 percent reimbursement cut in 2002, doctors put pressure on Congress to never let the cuts go into effect again.

It worked. Since 2002, Congress has never let the cuts go into effect, and some years it’s given doctors a small raise. And because the SGR formula is designed to hold physician payments to a growth trend, the distance between what doctors are supposed to be paid under the formula and what they are actually paid has grown ever larger. This year, the formula called for a 26.5 percent cut. The cost of overriding it was about $30 billion

Exactly.

[Hersh]

They say deficit reduction because debt reduction is not a good goal for a country. It would be better to have deficit reduction and allow GDP to catch up to your debt.

You don't want your government profiting off its people (feudalism style), which is what would be necessary for debt reduction. That would not be good for the private sector and the economy as a whole.

So we never pay down any debt?

[Tulane Skins Fan]

So we never pay down any debt?

I'm. Ot sure. But I think the better goal is to pay down debt as a percentage of GDP, so that as our economy grows the amount of debt is not as significant compared to the production of the economy.

I'm not an expert but that's how I nderstand it.

[Jumbo]

the Baby Boomers would sacrifice food stamps, national defense, and public education before letting the retirement age go up to 70 or even include a means test.

You're intelligent enough to not make such sweeping false generalizations. Many baby boomers I know, including me, support extending the age, as well as making cuts to medicare and medicaid (before we even get to improving efficiency and reducing fraud).

[Elessar78]

TSF, all you're saying is don't add any more to the debt but grow the economy so while debt to GDP is at 95%, in 10 years it could be down to 85%, 75% and so forth?