Obama Warns Trillion-Dollar Deficit Could Lead to Extensive Government Budget Cuts

[balantz]

Run time: 10:06 https://www.youtube.com/watch?v=oT-MkVE-gVI   Posted on YouTube: January 07, 2009 By YouTube Member: Views on YouTube: 0   Posted on DU: January 07, 2009 By DU Member: balantz Views on DU: 1584

 

[slipslidingaway]

1. Important point IMO...

http://www.democracynow.org/2009/1/7/obama_warns_trillion_dollar_deficit_could

"ARUN GUPTA:

And I think there is an important subtext. Larry Summers, who—he’s the one who’s really going to be in charge of the economic plan. He had an opinion piece in the Washington Post a couple months ago, where he said we need to address entitlements. And what that is, is codeword for “We need to cut Social Security and Medicare.” And that’s a terrible idea. Now, if you need to cut money, cut it from the military. You’re talking about a budget that’s almost a trillion dollars, if they need to talk about cutting spending...



DEAN BAKER:

"...On the other issues, the entitlements, absolutely, we don’t need to cut entitlements. Social Security, we’ve paid for. Anyone who talks about Social Security, we’re basically defaulting on bonds held by the Social Security Trust Fund. If we think we have to default on bonds, let’s default on the US government debt more generally. I really don’t understand why we should default on the bonds held by workers, but not on the bonds held by Citibank. So, you know, that’s kind of ridiculous. The real problem with entitlements, as, you know, everyone really knows who’s looked at it, is healthcare, our healthcare system, because if we fixed our healthcare system, we don’t have an entitlements problem. So, we should be talking about fixing the healthcare system. Then we could tell Larry Summers we don’t have to worry about entitlements. He knows the numbers as well as anyone, and that’s really just garbage to talk about entitlements..."

[ProfessorPlum]

2. Agreed - those two points really stuck out for me as well.

[slipslidingaway]

7. Hoyer made mention of the entitlement programs as well after

the election, I'll look for the statement later.

We should remember what Bush said in 2005...

http://www.epi.org/content.cfm/bp156

"Some in our country think that Social Security is a trust fund--in other words, there's a pile of money being accumulated. That's just simply not true. The money--payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust. We're on the ultimate pay-as-you-go system--what goes in comes out. And so, starting in 2018, what's going in--what's coming out is greater than what's going in. It says we've got a problem . And we'd better start dealing with it now. The longer we wait, the harder it is to fix the problem.

-- President George W. Bush, February 9, 2005


http://mediamatters.org/items/200502040009

"...Similarly, Princeton economist and New York Times columnist Paul Krugman explained on December 7, 2004, that claiming that the General Fund does not truly owe its apparent debt to the Social Security trust fund amounts to arguing for a large income transfer from working-class Americans to the wealthy:

Right now the revenues from the payroll tax exceed the amount paid out in benefits. This is deliberate, the result of a payroll tax increase -- recommended by none other than Alan Greenspan -- two decades ago. His justification at the time for raising a tax that falls mainly on lower- and middle-income families, even though Ronald Reagan had just cut the taxes that fall mainly on the very well-off, was that the extra revenue was needed to build up a trust fund. This could be drawn on to pay benefits once the baby boomers began to retire.

<...>

If the trust fund is meaningless, by the way, that Greenspan-sponsored tax increase in the 1980's was nothing but an exercise in class warfare: taxes on working-class Americans went up, taxes on the affluent went down, and the workers have nothing to show for their sacrifice."

[bananas]

3. I hope we don't have to fight Obama over Social Security

Thanks for posting that.

[Mithreal]

4. If we do, there's gonna be a brawl on DU. nt

[Chisox08]

5. As much as i like Obama

He'll have to cut SS over my dead body

[Mithreal]

6. Same here. The sides are drawn. nt

[awoke_in_2003]

16. Brawl may be a tame description. nt

[slipslidingaway]

8. Me too, we just have to be informed :) and YW n/t

[slipslidingaway]

9. Here is the WP article by Summers...

A Bailout Is Just a Start

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/28/AR2008092802232_pf.html

"...Fourth, it must be emphasized that nothing in the short-run case for fiscal stimulus vitiates the argument that action is necessary to ensure the United States is financially viable in the long run. We still must address issues of entitlements and fiscal sustainability..."


Also found this in my search for the above article...from 2006

http://delong.typepad.com/sdj/2006/08/dean_baker_on_t.html

"Dean Baker on the *Washington Post*
Via Angry Bear:

Angry Bear: Dean Baker continues to beat up on the Washington Post coverage of fiscal policy matters:

Yet again the Post reports on the threat posed by "entitlement" spending, referring to Social Security, Medicare, and Medicaid. To quickly repeat myself, this is dishonest. There are modest and manageable increases in projected Social Security spending due to the aging of the population. There are unmanageable projected increases in Medicare and Medicaid expenditures due to a projected explosion in health care costs. If the projected explosion in health care costs proves accurate, then it will devastate the economy, and cause serious budget problems. Honest people respond to these projections by examining ways to prevent the explosion in health care costs. Less honest people talk about the need to cut entitlement spending, including Social Security..."

[Dave From Canada]

10. Why not just extend the retirement age, phased in, at say 67 for people born after 1970, and 70 for

people born in after 1990? Just something simple like that, would make a huge difference. And with the average life expectancy continually growing, I don't understand what the problem would be.

[awoke_in_2003]

18. Or how about doing what Al Gore...

suggested- putting the SS funds in a lock box, only to be used for SS. For some time, the gov't has been borrowing SS surplus to spend on other things. How this differs from Jimmy Hoffa lending pension fund money to mobsters is beyond me.

[Dave From Canada]

22. Because that wouldn't solve the SS problem. With life expectancy continually growing, there's more

and more retirees supported by less and less workers, like an inverted pyramid.

[glitch]

26. I have a feeling the next census will show life expectancy is no longer growing here in the US. nt

[Doremus]

27. What SS problem?

Even if they start to tap into the trust fund in 2012 as some have forecast, the fund won't be exhausted until 2040.

I've read that simply raising the salary cap, i.e. making millionaires pay their fair share, would be all that's necessary to assure the longevity of SS.

Let's try not to so readily buy into RW hype, especially when it comes to SS, because they want nothing more than to trim it out of existence.

RW Hype:
SS is in crisis; let's cut it, chop it, slice it, dice it

Reality:
SS needs adjusting; let's do some tweaking to make sure it's around for a long, long time

[Leftest]

29. Fuck It.... Why not just extend retirement age when one drops dead.

Why is it always the working people who are targeted and not the greedy ass fucks where all the wealth keeps getting concentrated to? Fuck it, why don't we just all work as slaves and not get paid jack shit and stand in soup lines so more of our wealth can be concentrated.

:eyes:

[slipslidingaway]

11. Steny Hoyer's Agenda for 2009

http://www.democrats.com/steny-hoyers-agenda-for-2009

"...Finally, we have a window to truly set our fiscal house in order, ensuring the public and the markets that, even as we make necessary investments today, we are prepared for the years to come. A key priority in the next Congress must be entitlement reform, as well.

The term itself is a little bit misleading. When it comes to health care, we can no longer think of entitlement reform and expanded access as two separate issues. In fact, they are two facets of the same issue.

We will never be able to cut the cost of Medicare and Medicaid as long as they are serving unhealthy patients, as long as they are the first consistent source of insurance for tens of millions of Americans. But even with expanded access to health care and even with savings on Medicare and Medicaid, we still will have to make tough choices on entitlements. But making them we must. The longer we put these choices off, the more our priorities and our possibility -- and possibilities will be constrained, year after year. So let us face those choices sooner rather than later.

On Social Security, the path of reform is, relatively speaking, more easily defined, but we will need a bipartisan consensus to move forward. But now that privatization is essentially off the table, that will be, I hope, possible.

Helping to reform Social Security would be an excellent way for Republicans, in my opinion, to demonstrate that they’re serious about working towards solutions that are politically doable and fiscally responsible, not just ideologically defining..."

[mmonk]

12. The biggest entitlement is defense contractors.

But they provide the oil for the political machinery. Tell me why we must continue to spend more on the military than the rest of the world combined and have over 800 military bases in foreign countries but any spending for the commonwealth must always be cut. It's all garbage, don't let them fool you.

[balantz]

13. In a nutshell. And what we all should be strongly focusing on. n/t

[slipslidingaway]

14. Anyone who has tried to address those issues is labeled a nut. n/t

[mmonk]

15. So. It's time to fight the plunderers.

We're going to end up being a third world status country with the largest gap between rich and poor before too long. I'm tired of living in a country where it's people are the lowest priority.

[balantz]

17. If we don't address this biggest of our problems

then what we see meted out on Iraqis, Afghanis, Palestinains and etc. could be meted out on us if that was action necessary to further the agenda of the ruling elite.

[slipslidingaway]

20. Agree and that is why the people need to stay informed on the

subject. Projected Medicare costs are a big problem and that is because the tax payers fund those who need the most care while the private insurers make a profit from the younger population, that is where we need to focus our attention IMO.

[cooolandrew]

19. Extensive cuts well that's the end to the Afghan war then. Secret operations can deal with anything

else.

[democracy1st]

21. If anyone including Obama or his administration even thinks about

cutting SS or medicaid then we will without a doubt know that he's a corp prop

[Libertas1776]

23. politicians can say what they want...

but if any of them (Obama included) actually tried to do away with SS or other like entitlements, they and their party would never be heard from again. Conservative Republican President Eisenhower said that!

[Politicalboi]

24. Let's get rid of

Homeland Security. That alone would probably feed the whole country for a month or more. I guess Bush appointed some 40 positions to his goons and that is where the they should start cutting.

[mmonk]

25. I'm with you on that.

[cynthia]

28. Some very important perspectives here

Love Amy Goodman, intelligence on the radio