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Sun Dec 2, 2012, 08:57 AM

Krugman: What Defines A Serious Deficit Proposal?

What Defines A Serious Deficit Proposal?

Just a thought: if you follow the pundit discussion of matters fiscal, you get the definite impression that some kinds of deficit reduction are considered “serious”, while others are not. In particular, the Obama administration’s call for higher revenue through increased taxes on high incomes — which actually goes considerably beyond just letting the Bush tax cuts for the top end expire — gets treated with an unmistakable sneer in much political discussion, as if it were a trivial thing, more about staking out a populist position than it is about getting real on red ink.

On the other hand, the idea of raising the age of Medicare eligibility gets very respectful treatment — now that’s serious.

So I thought I’d look at the dollars and cents — and even I am somewhat shocked. Those tax hikes would raise $1.6 trillion over the next decade; according to the CBO, raising the Medicare age would save $113 billion in federal funds over the next decade.

So, the non-serious proposal would reduce the deficit 14 times as much as the serious proposal.

- more -

http://krugman.blogs.nytimes.com/2012/12/01/what-defines-a-serious-deficit-proposal/

Obama offers GOP an ambitious, progressive debt-reduction plan
http://www.democraticunderground.com/10021905787

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Reply Krugman: What Defines A Serious Deficit Proposal? (Original post)
ProSense Dec 2012 OP
Sheldon Cooper Dec 2012 #1
ProSense Dec 2012 #2
The Magistrate Dec 2012 #3
n2doc Dec 2012 #4
gulliver Dec 2012 #6
CTyankee Dec 2012 #17
ProSense Dec 2012 #5
RobertEarl Dec 2012 #12
ProSense Dec 2012 #7
Electric Monk Dec 2012 #10
ProSense Dec 2012 #21
TheKentuckian Dec 2012 #8
hfojvt Dec 2012 #9
ProSense Dec 2012 #11
hfojvt Dec 2012 #13
muriel_volestrangler Dec 2012 #14
hfojvt Dec 2012 #18
muriel_volestrangler Dec 2012 #19
hfojvt Dec 2012 #20
great white snark Dec 2012 #15
riderinthestorm Dec 2012 #16

Response to ProSense (Original post)

Sun Dec 2, 2012, 09:12 AM

1. Krugman is a national treasure.

I can't think of anyone in recent history who is so consistently right.

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Response to Sheldon Cooper (Reply #1)

Sun Dec 2, 2012, 09:24 AM

2. Krugman's point about

the ratio, 14 times, crushes the RW nonsense.

Still, consider that the President's proposed Medicare savings is $400 billion, four times as much as the RW attempts to raise the age.

Krugman defines it as a savings of "$113 billion in federal funds over the next decade," and on top of that it's a cut in benefits for Medicare recipients.

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Response to ProSense (Original post)

Sun Dec 2, 2012, 11:00 AM

3. 'Serious', Ma'am, Is Code For 'Hurts Poorer People'....

Mr. Krugman doubtless knows this, and like a good teacher leaves the point for the class to derive for themselves, but the matter is clear as spring water....

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Response to The Magistrate (Reply #3)

Sun Dec 2, 2012, 11:03 AM

4. Exactly. His final paragraph:

I guess we have to understand the definition of serious: a proposal is only serious if it punishes the poor and the middle class.

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Response to The Magistrate (Reply #3)

Sun Dec 2, 2012, 12:45 PM

6. Yup, the more it hurts, the better it must be.

A whole lot of people think someone has to suffer for anything good to happen. It's an epidemic of foolishness, cloaked as wisdom.

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Response to The Magistrate (Reply #3)

Mon Dec 3, 2012, 11:18 AM

17. And the whole point is that the only way to get the American people to give up Medicare is

to reduce its funding so that people think it's no longer "worth it" to keep.

P.S. I SO love that poster! It must just KILL republicans that Krugman gets "merged" with George Clooney.

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Response to ProSense (Original post)

Sun Dec 2, 2012, 12:14 PM

5. Republican Senator Demands ‘Very Painful Cuts To Medicare’

Republican Senator Demands ‘Very Painful Cuts To Medicare’

<...>

Indeed, Republicans have dismissed President Obama’s opening offer of $600 billion in reforms and savings to health care and other government programs, insisting that they are not “painful” or “serious” enough to lower spending. The Democrats’ proposal identifies specific inefficiencies and waste from providers and drug manufacturers and asks wealthier seniors to pay more for health care. But Republicans — and some in the media — are only interested in “serious” plans that directly reduce benefits or substantially increase out of pocket spending for seniors and poor Americans who rely on Medicaid. The cuts are designed to shrink entitlement programs and consequently cause very real pain to the people who benefit from them.

http://thinkprogress.org/health/2012/12/02/1269211/republican-senator-calls-for-very-painful-cuts-to-medicare/

The Republican clown show continues.

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Response to ProSense (Reply #5)

Sun Dec 2, 2012, 10:04 PM

12. I got a frame for that

Call it the "Kick 'em while they're down" Republican plan for Medicare.

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Response to ProSense (Original post)

Sun Dec 2, 2012, 05:13 PM

7. The Full McConnell (Krugman does more math)

The Full McConnell

In his interview with the Wall Street Journal, Mitch McConnell finally mentioned a few sort-of specifics about what spending cuts the GOP wants: raising the Medicare age, charging higher premiums to affluent Medicare recipients, and changing the price indexing of Social Security. But how much does all this amount to?

I’ve already noted that the CBO has estimated the fiscal savings from raising the Medicare age at $113 billion over the next decade. A study of health care options (pdf) from a few years ago put the savings from expanded premiums at $20 billion (Option 91) – that number would be somewhat higher now, but still small.

I haven’t found a 10-year estimate of the Social Security indexing idea, but we can roll our own. The idea is to replace the CPI with a “chained” measure that typically rises about 0.3 percentage points less per year. Apply this to the CBO projections of Social Security spending under current policy and I get 10-year savings of $186 billion.

So, if we take all of McConnell’s ideas together, we get a bit more than $300 billion. Getting this would, by the way, impose substantial hardship – seniors would be forced into inferior private insurance, and there are good reasons to believe that the true inflation rate facing seniors is actually higher, not lower, than the CPI. Still, what we’re looking at overall is a saving equal to only about one-fifth of what Obama is proposing to raise by higher taxes.

- more -

http://krugman.blogs.nytimes.com/2012/12/02/the-full-mcconnell/



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Response to ProSense (Reply #7)

Sun Dec 2, 2012, 07:38 PM

10. k&r

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Response to ProSense (Reply #7)

Thu Dec 6, 2012, 09:04 AM

21. Kick! n/t

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Response to ProSense (Original post)

Sun Dec 2, 2012, 06:35 PM

8. Serious is becoming little more than do nothing douchebaggery in hot pursuit of Social Darwinism.

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Response to ProSense (Original post)

Sun Dec 2, 2012, 06:52 PM

9. what constitutes a tax increase?

Following several links, I find this.

"He (Obama) also wants the estate tax to be levied at 45 percent on inheritances over $3.5 million, a step several Democratic senators balked at. The Senate bill made no changes to the estate tax, which currently taxes inheritances over $5 million at 35 percent. On Jan. 1, the estate tax is scheduled to rise to 55 percent beginning with inheritances exceeding $1 million."

So under current law - Obama does nothing, estates over $1 million will be taxed at 55%.

Instead of "doing nothing" Obama is offering estates over $3.5 million a $1.375 million tax cut on the first $3.5 million and then a 10% cut on every dollar after that.

This is called an "increase".

Would we still call it an "increase" if that bill was passed on January 2nd?

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Response to hfojvt (Reply #9)

Sun Dec 2, 2012, 09:10 PM

11. It's a

Following several links, I find this.

"He (Obama) also wants the estate tax to be levied at 45 percent on inheritances over $3.5 million, a step several Democratic senators balked at. The Senate bill made no changes to the estate tax, which currently taxes inheritances over $5 million at 35 percent. On Jan. 1, the estate tax is scheduled to rise to 55 percent beginning with inheritances exceeding $1 million."

...tax increase relative to the current structure.

"Would we still call it an 'increase' if that bill was passed on January 2nd?"

After December 31, Democrats do not have to entertain tax cuts for the rich. This is what the GOP fears most of all.

Here's the link to the piece you cited.

G.O.P. Balks at White House Plan on Fiscal Crisis
http://www.nytimes.com/2012/11/30/us/politics/fiscal-talks-in-congress-seem-to-reach-impasse.html

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Response to ProSense (Reply #11)

Mon Dec 3, 2012, 12:15 AM

13. Why not wait until January and get a better deal?

Why not start by asking for a better deal?

Because, Obama is not really asking for a tax increase here. He's really giving a tax cut to some very rich people. What are we getting for that? Here's what we are giving up.

"KLEIN: So how much does this cost? With a $1 million exemption and a 55 percent rate—in other words, what will happen if we do nothing—the estate tax would raise about $700 billion over the next 10 years. The Lincoln-Kyl version would raise less than $300 billion. And the compromise most Democrats have coalesced around—which was the 2009 level, with a $3.5 million exemption and a 45 percent rate—would've brought in a bit less than $400 billion." via the Daily Howler http://www.dailyhowler.com/dh121610.shtml

http://journals.democraticunderground.com/hfojvt/138

So, Obama is giving up $300 billion in tax cuts to the very wealthy. Again, what are we getting in return?

Why should we settle for $400 billion when we can get $700 billion by doing nothing?

Again, since Obama's plan still gives rich people tax cuts on their first $250,000 in income, I do not consider it very progressive at all. It gives average tax cuts to the top 1% of $28,000 and average tax cuts to the middle quintile of a mere $1,350. Let them expire and make the case to the American people for something better, something fairer, something more progressive, and something better than the accursed payroll tax cut that Obama is still pushing.

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Response to hfojvt (Reply #13)

Mon Dec 3, 2012, 09:05 AM

14. Because, by making a proposal, Obama can now say he tried to keep the middle class tax cut

If he had said "I have no proposal - let's let everything expire and then start negotiating after Jan 1st", he, and the Democratic party, would be blamed jointly with the Republicans for middle class taxes increasing. This way, the Democrats can say "we very clearly made a proposal, but the Republicans wanted tax cuts for the rich so turned it all down". $1,350 may be 'mere' to you, but it's a sizeable amount for the middle quintile.

You should also remember that the 'do nothing before Jan 1st' option is expected to put the US economy back into recession, and increase unemployment by about 1%. That will hurt people. It's (a) worth avoiding, and (b) worth making clear the Republicans are to blame if it happens.

Finally, we've seen the Republicans are willing to hurt the US economy for political gain, over the past 4 years; they have gerrymandered House seats that make it very difficult to throw them out if the public blames both them and Democrats for a new recession. They may be calculating that their seats will hold up enough to retain the House in 2016, and a general "all politicians are responsible for the recession" feeling would help them in the Senate and presidency. They may well feel just as stubborn about negotiating anything meaningful in 2013.

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Response to muriel_volestrangler (Reply #14)

Mon Dec 3, 2012, 11:53 AM

18. except that the so called middle class tax cuts

also actually favor the wealthy.

That was my point $1,350 IS "mere" compared to the $28,000 that the 1% gets - from the Obama proposal.

My question is - where are the frigging progressives? Where is anybody, (outside of an obscure poster on DU that almost nobody reads) who are saying bullcrap to keeping 78% of the Bush tax cuts?

Where is Kucinich? Where is Baldwin? Where is Warren? Where is Franken? Sheldon Brown? Doesn't anybody know the meaning of progressive taxation?

Why can't the public hear about options like these -

We have other options. Democrats should be proposing, promoting and fighting for better options. For possibilities like these

1. Increase the standard deduction by $5,000 per couple. This will save people at the bottom about $750 a year without being a windfall for the rich.

2. bring back the making work pay credit (without the extra damn form). That was a refundable $400 per person, $800 per couple, phased out for higher incomes.

3. increase the personal exemption by $500. Unfortunately the rich will benefit from that, but not by much more than the poor. It means $75 for the poor and only $197 for the rich. It would be a $2,000 automatic deduction for a family of four.

4. Re-introduce lower brackets. Say, a 5% bracket on the first $3,000 and a 10% bracket on the first $7,000 for individuals. The first would be a $300 tax cut for most taxpayers and the second would be another $200 for most taxpayers.


You know, options that would give $1,500 to the middle quintile WITHOUT also giving $28,000 to the top 1%. Options that favor the bottom 70% over the top 30%. Why isn't THAT possible in a supposed democracy?

Because the people will not demand it, because they will not hear about it, because according to the national conversation the debate is about only two choices - keep 100% of the Bush tax cuts or keep 78% of the Bush tax cuts. Those are both crappy choices. Somebody, somewhere, (besides me that is) should be fighting for, should be demanding better choices in the name of WE, THE PEOPLE.

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Response to hfojvt (Reply #18)

Mon Dec 3, 2012, 12:29 PM

19. As a matter of interest, where does your $28,000 figure come from? (nt)

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Response to muriel_volestrangler (Reply #19)

Mon Dec 3, 2012, 01:18 PM

20. from Citizens for Tax Justice

http://www.ctj.org/pdf/taxcompromise2010.pdf

Note how the "original Obama plan" gives about 50% of its benefits to the top 20%.

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Response to ProSense (Original post)

Mon Dec 3, 2012, 09:07 AM

15. K&R

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Response to ProSense (Original post)

Mon Dec 3, 2012, 10:40 AM

16. K&R nt

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