"I scored Barack Obama as I have said before, based on his INTENTIONS, not on what he has been able to achieve, and not based upon what he intends the result to be but what the actual result will be. He obviously believes that redistribution is somehow compatible with free market capitalism and of course that is utter nonsense. His naïveté and insular ideology put him in a class by himself." J Ewing
"You presume I have no evidence for what Obama's intentions are, but I have all the evidence I need. He has increased federal spending from 20 to 24% of GDP in just one term. He has taken over, or will eventually through Obama care, the healthcare sector, which is another 14% of the economy. He has taken over a portion of the auto industry, something like 3% of GDP. His EPA has effectively assumed control of the energy sector of the economy, and the bailouts and added "oversight" look like a takeover of the financial sector. Total regulatory burden of the federal government is now estimated at well north of $1.5 trillion, or 10% of GDP. Let's see… Carry the two…. I come up with about 51% right now." J EwingObama Goals
Obama's 2013 Budget
CBO Healthcare Penalties
G2A Political Continuum
42 comments:
I mean even the Catholics like him, he can't be that bad... CNN Pew Poll
Though I do agree that Obama seems to be unable to keep things moving with the Congress and Senate. It seems his negotiation skills are somewhat lacking. And gridlock is not a good thing when we are facing a trillion dollar deficit and the fiscal cliff.
I don't understand why everybody complains about gridlock when the solution is so simple. All we have to do is to get the Democrats to agree with the Republicans and the problem is solved. This fiscal Cliff situation could have been avoided a year ago if not for Harry Reid and Barack Obama.
J. Ewing
Of course if the Republicans had their way the deficit may have been even larger... Obama is asking for minor tax increases on a small portion of citizens and willing to make some spending cuts. (Outside of the healthcare disaster, I mean...)
Instead the Republicans aren't willing to even help generate any additional revenue to solve the deficit problem.
The only thing wrong with your formulation is that more revenue will not solve the deficit problem, and will likely make it worse. The kind of tax increases Obama proposes (ignoring Obamacare monstrosity and fiscal cliff issues) – the new revenues – amount to something like 2.5% of the deficit. That's whizzing into the wind at best. The Republicans have offered several full-blown budgets, while Obama's budgets have been defeated unanimously in the Senate and Senate Democrats have refused to even propose one of their own for over three years. There is absolutely no way to claim that the Democrats have been fiscally responsible, IMHO. If the Republicans had their way the Ryan budget would have passed last year and we would now be seeing real deficit reduction, without a tax increase.
J. Ewing
These folks don't seem to agree.
Analysis
John,
Just when I have written you as as too hard line conservative to keep reading your blog, you make some surprisingly reasonable comments. I am curious about what kind of budget deal could have been reached with the GOP by a dem president with extraordinary negotiation skills. I think a deal was impossible.
I view negotiation as an Obama strength if he was dealing with an reasonable opposition party that put the country ahead of partisan politics.
That's funny. I think Obama is a very poor negotiator. I'm not sure what he is missing, but he seems unable to get the job done without his party in the majority. Maybe he let's himself get too emotional or invested in the deal??? Or maybe he gets focused on winning the battle rather than winning the war???
And of course I am still frustrated that he threw all his early political points and majority benefit into getting the healthcare deal done instead of fixing the country's economic problem. (ie adding weight to the boat instead of fixing the hole in the hull...)
I promise to keep working hard to try and surprise you !!!
You didn't answer the question, how can there be a budget deal when tax increases are off the table?
Also, I think your view that it is smart policy to cut spending and raise taxes in the middle of a great recession is foolish enough to make me disregard pretty much all your views on economic policy.
Laurie,
You did not study the Economic theories close enough. Many believe that recessions and booms both serve their purpose. And that many bad things happen when Government's print money or go into debt to try to avoid recessions all together.
Let's say a Parent has an adult child that does well for awhile and then starts making bad decisions. Each time the child gets in financial trouble, the parents take out a loan and give the child money to pay the bills. This happens many times and the parents finally max their credit limit. Then the child comes back to them again....
Did the parents really do the right thing by their child by preventing them from experiencing the consequences of their poor decisions?
If the parents default and lose their home, is it their fault of the child's?
Would it have been easier if the child had learned earlier when the scale was smaller?
G2A Recession Revisited
G2A Recession
G2A Crisis of Credit
And these children play rough when they are finally faced with reality that there is no unlimited money tree out there.
Spanish learning Video
Greece Learning Video
French Learning Video
Do you also bail out your kids every time they step in it?
As for what Obama could have done... He may have sacrificed his signature healthcare program for a tax increase on the upper income folks? If he was a good negotiator I am sure there are other things that the GOP also wants. Instead he plowed away towards making history by passing Obamacare. Choices, choices...
And I thought the Liberals said that taxing the Rich will not negatively impact the economy. In fact Obama is pushing for that right now. (ie extend all cuts except on the wealthy) Would you make up your mind???? Just joking...
All we have to do is to get the Democrats to agree with the Republicans and the problem is solved.
Not even the Republicans agree with the Republicans. There is no reals Republican support for what their policies require. The GOP doesn't want to cut defense spending, they don't want to cut medical care, they don't even want to cut Social Security. They want the stuff they want, they are just against paying for it.
--Hiram
hiram, if your formulation is correct about Republicans, then what can you say about Democrats? That they want everything under the sun and don't think it has to be paid for at all?
J. Ewing
As for the CBPP analysis, I got through the first two paragraphs before my bias meter said "tilt." Anybody that tells me that a tax increase produces the exact revenue increase predicted, or that a tax cut produces the exact revenue loss predicted by" static scoring" – that is, assuming that people do not change their behavior because of tax policy – loses all credibility in the simple light of history and a little common sense about human nature. Heck, even Congress believes that people change their behavior in response to tax policy; why else would they create 7000 pages of credits, deductions, incentives and disincentives?
And when they tell me "this plan is far less a blueprint for addressing deficits and far more a proposal to redistribute large amounts of resources from those at the bottom to those at the top" I stopped reading, because it is absolutely impossible to redistribute wealth upwards, from people who have none, and it overlooks that the "Bush tax cuts for the rich" had the largest percentage reduction at the bottom of the income scale, resulting in the top 1% paying a GREATER percentage of the total income taxes.
J. EWING
CSM 5 Sources
Well here are 5 more sources of information. Maybe they are less biased.
Both Laurie and yourself are correct and wrong in my opinion. Gov't spending and tax policy both have consequences. However I just think it less than you think.
Lowering tax rates in hopes of growing the economy and increasing revenues to compensate for it is kind of silly to me. Imagine if the the economy grows at 3%/yr instead of 2%/yr. because we give everyone a 10% tax reduction... Does that mean we wait 10 yrs before revenues are back to where they were? (ie 10%/(3%-2%)) What am I missing?
Or thinking that the "rich" will change their behavior significantly because the top rate changed from 36% to 39%. You've got to be kidding...
When Obama took office the economy was in free fall. That's why it is referred to as the GREAT recession (or even the lesser depression.
I didn't have time or energy to read any links in your posts on the economy and right now I don't have the interest. I am quite certain that there was widespread agreement that the stimulus spending, which included tax cuts, was needed when Obama took office. Now that the economy has been adding jobs for two or three years, a small tax hike on the wealthiest 2% percent seems reasonable to me. If I were in charge I probably raise taxes on the top 10-20 percent.
Btw, I changed my mind about Obama being a good negotiator, though I don't think any dem would have been successful in reaching a deal. Obama probably could have pushed immigration reform through rather than healthcare his first two years, but it was the wrong time for a big budget deal that included entitlement reform.
The president may not be the best negotiator in the world, but the key to any successful negotiation is the relative power position of the respective parties. Romney could negotiate successfully and even punitively, in his business career because he had access to big time financing. The president was in a much more difficult position because what he wanted was entirely in the control of his adversaries, who themselves had a sense that if they did wreck the economy, the president would be blamed for it. Much as I would have liked the president to have taken a tougher line, it was never going to be my Social Security check that was going to be withheld, or my doctor who was going to go without payment.
In terms of the cliff that's coming up, the situation is different. President Obama will never run for re-election again. It's house and senate Republicans who will be up again in a very short two years. If they succeed in wrecking the economy this time, it will be much harder for them to escape the blame in 2014.
--Hiram
--Hiram
All that work learning about Economic Theory and you did not read it... Oh well... I can tell by your answer...
Interesting how you suggest that Republicans will get the blame if we go over the fiscal cliff and wreck the economy, when as you say presidents get the blame good or ill for what happens to the economy during their watch. That is unless they are Democrats. Then, the facts that the Republican House repeatedly passed budgets that avoided the fiscal cliff and that the greatest heights of the fiscal cliff are Obamacare's 18 new taxes, plus the taxes called the "Bush tax cuts" that have been in place for 10 years and therefore now constitute a tax increase, plus the end of the FICA tax reduction, which is a tax increase on everybody that still has a job. Many Obamacare regulations also kick in, meaning fewer jobs, plus higher costs and lower availability of actual health care.
Frankly, I would much rather fix the problem than fix the blame, but then I obviously don't understand Washington politics.
J. Ewing
Interesting how you suggest that Republicans will get the blame if we go over the fiscal cliff and wreck the economy, when as you say presidents get the blame good or ill for what happens to the economy during their watch.
There are three equal branches of government and the president can't sign a bill that Congress hasn't passed. In any event, there is little point in blaming Obama because he won't be running for office in 2014 or probably ever again. It should also be noted that while Republicans are in favor of spending limits, the aren't actually in favor of limiting spending. I know, I don't understand it either.
--Hiram
The sad reality is:
The DFL (Liberals) and its supporters will be indignant and blame the GOP (Conservatives) for their bull headed and irrational behavior. All the while claiming that they had been open minded, rational and could have had the problem solved.
and
The GOP (Conservatives) and its supporters will be indignant and blame the DFL (Liberals) for their bull headed and irrational behavior. All the while claiming that they had been open minded, rational and could have had the problem solved.
Or maybe just maybe they all may grow up and accept responsibility for their role in the collusional conflict. Oh who am I kidding...
hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha !!!
Now J, Anything else about Obama's intent and past you want to get of your chest before we move forward?
If you intend to move "forward" as in the Obama campaign slogan, no thanks. I'm still trying to figure out how to survive all that hope'n'change that has befallen us already. Face it, Obamacare is going to kill people, if they don't die in poverty first.
J.
Now that's the spirit.
I can understand that full blown socialized medicine could result in more people dying. With the smartest avoiding the field, roving euthanasia squads, limited care, bureaucratic nightmares, etc. But come now, why do you see this simple form of ensuring everyone is insured will result in deaths?
It may be expensive, however I can't make the connection to more deaths... Unless someone looks at their tax bill and it results in a massive coronary episode.
I think we are willing to move on Social Security and health care costs. Is the GOP willing to move on taxes? But I don't see Republicans at all interested in really addressing Social Security, and they seem to feel any effort at all to deal with health care costs is tantamount to creating euthanasia squads. They want to do nothing, except spend even more on defense, and given our political system which depends on compromise to work, nothing ever gets done.
--Hiram
The Washington Post article talks about how Mitt doesn't understand why he is perceived as having little empathy for less fortunate. The theater anecdote provides insight into that. Mitt just doesn't think. He doesn't understand that the movie theater business is a terribly difficult one, and that the people who and run it are just scraping by. It doesn't seem to occur to him to think about the economics of movies, or how he benefits from that overpriced bag of popcorn that for the theater operator is the difference between a small profit, and a large bankruptcy. And he doesn't understand the economics of the situation in that if all moviegoers did what he did, there wouldn't be any very nice theaters to take his family to on Saturday nights.
--Hiram
John,
I have read enough about macro economics to have a sense of the mainstream consensus on things such as the need for stimulus spending during a recession. In fact The U.S. Economic Policy Debate Is a Sham. If you were to pick only one (not to long) source that supports your outside the mainstream views on economic policy I will read it.
Also, I am going to try harder not to insult people in my comments here, even when I know I am right.
This gentleman also teaches at Chicago Booth with the Keynesian Economists that wrote the opinion piece you linked to. He does a pretty good job of explaining the small differences in belief that add up.
Bloomberg CBO Leap of Faith
Chicago Booth Cochrane
The reality is that there are several "main stream" schools of thought. Keynesian's on one end think a gov't can tax and spend the country out of trouble. (ie Kruman) The Austrian's on the other end want the Gov't to stay out of it. And in the middle are many many Economists like Cochrane.
Thus Romney has the support of so many. Economists for Romney
By they way, I do not deny that we can borrow and buy our way out of recessions. My question is should we and what consequences will result in the long run.
So would you write out a check every time your adult child gets in financial trouble, even if they do not pay you back? It certainly would reduce their pain in the short term.
Laurie, I don't feel insulted by your comments, just challenged. I hope you can accept my disagreements in the same vein.
John, my kids HAVE gotten into financial trouble, more than once, and they know me well enough to come for help only as a last resort. On that basis, I help out as best I can and usually with no judgments, because I KNOW they have tried/are trying to get their financial house in order.
J. Ewing
John, I had to look back several pages of comments to see the rationale for asking about kids in debt trouble. I think your analogy is flawed because government, as useful as the analogy is, is not like people in all ways. For example, the ability to print money is unique, and perhaps the most dangerous.
You must start with the recognition that government cannot spend one dime that it does not first take out of the private economy, through taxes, borrowing (against future taxes) or printing money-- inflation and the cruelest tax of all. It can also depress the private economy through unnecessary regulation, so that could be seen as a "hidden tax" as well. For example, if government were to openly buy up a coal-fired power plant to shut it down, that would constitute government spending that would have to be covered by real tax revenue (taxes, borrowing or inflation), but doing the same thing through regulation has the same cost to the private economy but doesn't show up on the books.
Now here is where the Ron Paul groupies actually have something right, though their solutions seem awkward or even unworkable. They object to the Federal Reserve system in toto. I say that one simple change would solve the problem, and that is denying the Fed the authority to create money out of thin air by "buying" US treasury bonds that do not sell on the open market, and putting them on the books. When that money flows into the economy, there will be massive inflation-- unavoidably. Thus my suggestion that Congress simply selectively repudiate debt held by the Fed. It was never real money, and should be returned to the thin air it was coined from before it gets out. No harm, no foul.
J. Ewing
Really? You really don't believe that socialized medicine will result in more deaths? I don't think is even arguable otherwise.
http://www.powerlineblog.com/archives/2012/09/bailing-out-obamacare-sarah-palin-was-right.php
J.
J,
It seems you and the PL writer missed the point of the article. I read the author as noting that no matter what happens people will be dying. The healthcare cost rate increase and the larger number of older people will ensure this.
The rationing is coming with or without Obamacare. Now will it be the size of someone's net worth that will ensure or deny treatment. Or the insurance company's spending limits or "approved" treatments. Or "limits" that "society" sets.
Maybe if the wealthy are held to the same life/death limitations as the poor, they will be more invested in solving the problem. If they are not, they will take care of themselves and wonder why the unfortunate are complaining about limited care.
NYT Healthcare
PL Bailing Out Obama
Something has to be done about the drivers if we want to fix the system and reduce the cost. Spending $1 million to extend an 80 yr old's life is likely a poor economic decision for the USA. Or saving an infant who will never have full brain function, and will need life long care.
G2A American Healthcare Drivers
Just because we have the capability to save or extend most people's lives doesn't necessarily mean we should. Maybe it was easier when people just died and we had no idea why? It allowed us to not have to address this medical ethics question.
As for bailing out the kid's and my analogy. I am assuming that Liberals and Keynesians believe that the "economy, businesses, workers, consumers" have tried everything (like your kids) and that it is time for the gov't to take out the loans and bails us all out. No questions asked.
My kids are still in the house, so we will have to wait and see what I do in the future. I am guessing though that I will make it so painful through "remedial money management lectures and training" that they will likely get a second job before asking me for money.
Your link from the Cato, Hoover guy didn't persuade me. Aren't those institutions known to be quite right wing? My previous link shows that in a survey of 40 leading economists 48% agree that the benefits of the stimulus will end up exceeding its costs while only 12% disagree.
I did, however, find the list of 600 economists for Romney slightly persuasive in that I am now willing to consider there may be some good ideas mixed in with Romney's plan.
The debate Wed. should be interesting as I am sure Obama will challenge Romney to explain how the huge cut in rates doesn't add to the deficit or lead to tax increases on the middle class.
The challenge is that we do not know the make up of those 40 Economists. If the majority are of the Keynesian ilk, the results are skewed. I think I'll pass on researching the theory each of the 40 uses and take it as an interesting data point.
Note, Cochrane's day job is as faculty at the University of Chicago Booth school, the group that did the survey. And he did his Doctorate work at Berkeley, so don't write him off as too Conservative. (probably a dead head even...) Cochrane's Bio
But you are correct that he does seem to agree with the Keynesians.
This was an interesting example that he raised. It looks like we can double our GDP if we just borrow and spend enough money.
"How does the CBO come up with these numbers? Its projections are Keynesian. If the government borrows $1 billion and spends it, the CBO will project that this action raises gross domestic product by $1.5 billion. Government workers are counted as “producing” what they cost, so borrowing money to keep them employed generates the same GDP as building a bridge. If the government just gives the money to people, this also raises the CBO’s GDP estimate. Reducing government spending and transfers has the opposite effect.
If, like me, you think that spending less money on useless projects is good for the economy, or that taking money from A and giving it to B has little overall effect, you would come to much different conclusions from the CBO’s. "
Kind of like raising your household income by borrowing more. Sounds good doesn't it?
"Spending $1 million to extend an 80 yr old's life is likely a poor economic decision for the USA." -- John
EXACTLY RIGHT! That is why such decisions should not be made by "the USA" but by ME, when my 80-year old dad needed a heart operation that extended his life for 6 more wonderful years. We got to travel together as he has always wanted. He died because Medicare ran into its "limit" and I was not permitted to pay for his additional care. Socialized medicine be damned.
J. Ewing
You'll have to define "was not permitted" a bit better.
I find it hard to believe that our current "non-govt operated hospitals" would turn down Grandpa and a pile of cash.
"If, like me, you think that spending less money on useless projects is good for the economy, or that taking money from A and giving it to B has little overall effect, you would come to much different conclusions from the CBO’s."-- John
Are you really trying to tell me that this is the way CBO does its "scoring" of bills and budgets??? If so, they have just lost all credibility with me. I find it impossible to believe that government can take one dollar out of A's pocket and give it to be – a welfare recipient or bureaucrat – and then count that dollar as part of Gross Domestic PRODUCT. The GDP should consist of real goods and services PRODUCED, should it not? Now, if I take money out of my own pocket and buy groceries for poor B, that adds to GDP because the groceries have to be produced. But if the government takes it out of my pocket and throws 90% of it down the sewer, as a little simple math demonstrates, then I don't see how that $1 becomes $1.50. Seems to me like it should be more like $0.10.
I will say it again: Since every dollar that government spends must first come out of the private economy, the only way that government spending can contribute to that private economy is the degree to which that spending coincides with what the individuals from whom it was taxed would have spent it on given the choice (you may assume perfect knowledge if you wish). If you want to argue that our current federal or state budget is like that, feel free.
J. Ewing
"I find it hard to believe that our current "non-govt operated hospitals" would turn down Grandpa and a pile of cash."
Believe it. I said "please care for him a few more days; I will pay for it." They said, "Sorry, but Medicare will not permit us to accept cash payments." and that was that.
Does anybody else think these "prove you're not a robot" things are getting harder? Sometimes I have to go through most of a dozen before I can find one I can read.
J. Ewing
Yes the CBO's method seems odd.
Sorry about your Dad, but after talking to a coworker who had a similar experience, I think you were at the wrong hospital. Did you try another?
I stay signed in, so no robot questions for me. I suppose as the robots get smarter the tests get harder...
Did I try another hospital? Like socialized medicine (which it is), Medicare rules apply everywhere. And of course moving him would have been fatal.
J.
I am still puzzled, but I'll trust what you say.
Did that experience give you any empathy for all the uninsured, under-insured and uninsureable out there that run into this on a regular basis?
They often don't have a son, father, mother, daughter, etc that can offer to pick up the bill... It seems you would want to help resolve their problem after hearing your story. Thoughts?
That gives me a great deal of empathy for all of those trapped in systems of socialized medicine. Were it not for the fact it is not permissible under such systems, yes, I would be willing to contribute for the less fortunate. I already have, but for those in other countries, and I suppose that through taxes, however grossly inefficiently, in this country as well. It just makes me boiling-over angry at those that think still MORE of this poison will be curative.
J.
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