A feeble offering from the president; but there are a few signs of hope

I think the Economist is being a bit anemic with its credit to Obama. I think Obama & Gates may actually cut military expenditures, which have been largely untouched for years. True, the cuts could be larger (I believe it's $78B) but Obama might actually get Tea Party support on this, which would be something in itself.

Not cutting/reforming the three major entitlement programs: social security, medicare and medicaid is like trying to treat a gunshot victim with a bandaid. My point is the budget is a joke and both the democrats and republicats are spineless for not educating the American people about why entitlements need to be cut and then taking action accordingly. There is no leadership in Washington. Period. Just a bunch of empty suits.

In order to achieve such agenda, there needs to be a bi-partisan support from both parties. We hope that both these parties find a common ground to achieve a win win economic policy.

Here's a very simple solution, increase the retirement age for people who plan to retire within next 5 years by 6 months, same thing for people in the next 5 years.

To tackle the deficit its pretty obvious it will only be achieved through spending cuts (especially non-discretionary) as well as tax increases. Because of this I have very little confidence that any progress will be made until the country is on the verge of economic collapse.

the budget problem would be solved if the rich people/corporations paid their fair share of taxes. sad for america that they are not.

Any signs of a U.S. (and, by extension, world) recovery could be thrown off track in the next two to three months as Congress wrangles over raising the country's debt limit. In 1995 - 1996, a partisan Congress under Newt Gingerich refused to raise the debt ceiling which resulted in a shutdown of government and a massive impact on the United States economy.



Here is an examination of the issue showing just how frequently the debt ceiling has been raised in the past decade and how the entire situation has reached the point of absurdity under both Republicans and Democrats:



http://viableopposition.blogspot.com/2011/01/united-states-debt-ceilings...

Sir:

Of the three big "entitlements" referenced, two are funded through ear marked tax revenue (Social Security and Medicare) which makes them far from entitlements (i.e., would one consider the UK NHS or Canadian health to be entitlements?).

Social Security has a pot of surplus funds adequate to last about 20 more years-- although if one wanted reduce the financial outlay by the Social Security program one could terminate payments for people who were not the actual wage earner (spouses and dependents) as well as the "death benefit". If the receiver is dead, why spend more money on them?

Medicare has a lesser problem with frills added in the past by profligate legislators, but still there are quite a few that could be dropped off the rolls as not being in the original target class. Another possibility is to simply say that anyone over a certain age uses only Medicare-- or if they have some other private plan (or their own funds) to pay more, the additional payments made are subject to a very steep tax reflecting the patient's obvious wealth.

Medicaid is harder to address, since the alternative is basically to allow poor people to die in the gutter. Perhaps The Economist has a suggestion? Stop funding foreign wars... oh wait, those are paid for using debt...

Medical is one of the larger problems, since medical is generally not an optional service one can simply do without and not endure severe consequences. Legislators deserve the electrifying consequences of touching the third rail when they attempt to unreasonably cut services already funded by taxpayers.

I think that the sad truth is that in general Americans like the idea of a small state that that doesn't tax them too much, but don't want to lose their benefits that come with a big state (i.e. Medicare and Medicaid). This seems clear by the fact that Republicans are willing to cut $100 billion from only 15% of the budget and exempt those areas along with the military. I really don't believe Congress will be serious about any of this until the USA has it credit downgraded (which both fortunately and unfortunately seems a way off).

Expect the lack of leadership on entitlement reform to continue. The federal government simply wasn't designed to reach consensus on issues like these (because it was never supposed to handle them in the first place.)

My favored solution is to simply break them up, hand responsibility for them back to states, and simply get rid of all the federal taxes that were funding them. Let each state decide how to make its own entitlements viable.

The options are all painful, but the most painful of all involves allowing Washington to continue to mismanage these programs with a one-size-fits-all approach that suits no one well.

It's the ultimate passing of the buck. Democrats can claim they aren't cutting anything; they're just handing these programs off to the states (that'll be hard for the technocratic elites to swallow, but what's the argument against it? We're more competent than they are? A mountain of evidence says otherwise.) The Republicans get to claim credit for saving the federal fisc.

And while they're at it, they should go ahead and end the ~$660 billion in Aid-to-States programs and those taxes too.

This task is clearly beyond Washington. Restore the general police powers of the states and watch as policy innovation in 50 different labs of democracy saves the day.

John Boehner can be SO refreshingly honest: “Americans don’t yet know that entitlements are the problem.” = “It’s not my job to educate the American voters about anything that might tarnish my re-election campaign...” So, John, that education stuff is ONLY for the Texas Board of Education? ;-D

Each side must give up some of thier sacred cows. The leftists (aka the modern Democrat party) need to support dumping health care, increasing the age for social security, dumping the teachers union, reduce regulations (the regs hurt more than the taxes) and reconfiguring medicare into a form of locally managed vouchers/subsidies.

The Republicans need to shave defense and scare the RINOs into voting for serious gov't reconfigurations. If Republicans don't shave defense the leftists won't move an inch. Oh yeah, keeping personal religious thoughts private will help too. Let's not "Terry Shivo" away the cutting momentum.

What is the amount of cuts??? Who knows. I suspect the USA could shave 10% off of the defense budget and arrive at the same product.

One of the dirty secrets the leftists fear is that the USA could reduce descretionary spending by 75% and it would have little impact on the economy or society.

I suspect the only way to right the USA is for the Republicans to gain the House, Senate, and POTUS and cut cut cut us back into a free market.

$3.7 budget and 1/3rd of the money is borrowed? What a joke.

Pure and simple: SS is paid for by taxes. Any financial woes it faces would be fixed by replacing all those IOUs congress added when they borrowed against the trust fund.

The next thing is fairly simple: Invert the taxation system funding SS. Tax all income above $50K at %1. Bonus points: tax all those fancy golden parachutes and million dollar bonuses at 40%.

Cap payouts to no more than $50K a year + rate of inflation.

*poof* Now rich, average joe's and poor can expect a decent retirement.

Next thing with Medical: Make it a universal system paid from corporate heads money. Construct the system so the amount they pay depends on how well they figure out how to keep people healthy for the best price. I'm sure they can find the best people to work the problem.

Pure and simple: SS is paid for by taxes. Any financial woes it faces would be fixed by replacing all those IOUs congress added when they borrowed against the trust fund.

The next thing is fairly simple: Invert the taxation system funding SS. Tax all income above $50K at %1. Bonus points: tax all those fancy golden parachutes and million dollar bonuses at 40%.

Cap payouts to no more than $50K a year + rate of inflation.

*poof* Now rich, average joe's and poor can expect a decent retirement.

Next thing with Medical: Make it a universal system paid from corporate heads money. Construct the system so the amount they pay depends on how well they figure out how to keep people healthy for the best price. I'm sure they can find the best people to work the problem.

Obama's budget is the greatest failure of Presidential leadership in the history of the U.S. Obama's massive corrupt spending and Mountains of debt are taking the nation to finacial collapse. His budget does nothing to stop it. Obama has surely overtaken Jimmy Carter as the worst President in at least 100 years!

I feel that the US problem is political rather than fiscal. Eg, social security is easily and painlessly fixed. Gradually raise retirement age, increase private contribution over life time and strengthen safety net provisions. This is what every other modern country is doing and the 3 part option recommended by UN inquiry into such matters. Defence; why does the US still thousands of aircraft, hundreds of ships, etc, when the Cold war is long over? Let alone thousands of nuclear weapons - a few hundred is more than adequate for deterrents effect. It is telling that the Americans are factoring in ending of the wars in SW Asia as cost savings. Do they actually see such wars as discretionary undertakings? Have they consulted Iran or Nth Korea about their budget issues? Farm subsidies also need to be cut, universal health care implemented and taxes raised, etc. But why can't the US political system reach any political consensus on these matters? Worse is at local level where basic services like street lighting, fire protection, primary heath care and schooling are experiencing slash and burn response. From the outside the outside this all seems madness. For how long can the American polity withstand this situation?

Many people are upset with Obama's budget and the deficit, but it is republican fiscal policy during Bush's presidency (and let's not forget the recent tax cut extension) that has placed the US in this difficult situation. The GOP is deviously ingenious. It would be laughable - if it wasn't so tragic - that their starve the beast strategy has worked to such perfection. How easily people forget that Bush inherited a $236 billion surplus and turned it into a $400 billion deficit. Sure it's gotten worse during Obama's term, but that's what happens when you inherit policies that have been spiraling the budget into deficit for 8 years while simultaneously having a recession dumped in your lap. It takes a special kind of amnesia/blindness to ignore the GOP's culpability in all of this.

Seriously, the GOP is devious. First they cut taxes to reduce government revenue despite the fact the economy was performing well and running a surplus in the 90s. Then they wail and shout about the "Obama-caused deficit crisis" and eagerly take the ax to programs they are ideologically opposed to... but only because there's no money in the coffers. Goodbye public radio, family planning, foreign aid (we'll keep the aid for Israel, of course), and Mr. Obama's teleprompter.

The obvious starting points to reduce the deficit are politically unpalatable in general and completely off the table with a republican majority in the house. 1) a small tax increase; 2) get serious about reducing health care costs; 3) cut defense spending - there is probably more fat to trim there than in any other section of the budget.

In short, the republicans would like you to trust them with fiscal matters. They want you to forget their insidious policies over the last 10 years that led us from surplus to deficit. They claim they'll do better this time around. I say, yeah right.