Right Wing Nut House



Filed under: Deficit reduction, Entitlement Crisis, Government, Politics — Rick Moran @ 11:13 am

I have an article up at FrontPage.com critiquing the president’s speech from yesterday. Needless to say, we were not amused.

As sample:

As for his own plan, the president proposed massive tax increases on the “rich,” cuts in defense spending, Medicare and Medicaid “reform,” and closing tax loopholes, while continuing to “invest” in clean energy, education, medical research, and transportation. He would leave Medicare and Medicaid relatively untouched, while claiming that his plan would cut $4 trillion over the next 12 years.

Yet, the president offered no specifics on the cuts he was advocating except broad, unrealistic dollar amounts. For example, the president believes we can realize budget savings by cutting $1 trillion from interest payments on the debt over the next 12 years. But interest rates are near zero now, and it is highly unlikely that they will remain that low for the next 12 years, especially given the fact that inflation is rearing its head. Some analysts are predicting debt service payments to rise from its current $196 billion to a whopping $800 billion by 2016 as a result of rising interest rates.

The president’s Medicare proposal is equally unclear. Obama proposed that the Independent Medicare Advisory Board can keep costs down. The president said he would do this by “chang[ing] the way we pay for health care — not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results.” Obama clearly believes he can slow the growth of Medicare by strengthening the advisory board, which will recommend the best ways to reduce spending while still providing seniors with adequate care. The president claims that these measures will save an additional $500 billion by 2023. If this number is as real as his $1 trillion in Medicare “savings” to come out of Obamacare - savings that are dubious in the extreme - the result will be little or nothing done about an entitlement program that is going broke and could sink the US economy by itself eventually.

Obama offered no specific cuts in defense beyond savings that would occur in winding down the wars in Iraq and Afghanistan and a promise to look into more cuts. He will do this by conducting a “fundamental review” of our “role in a changing world” and examine our mission and capabilities. Practically speaking, he will look to reducing our readiness, which is the easiest and least painful part of the military budget to cut, but the one which is the most dangerous to skimp on.

The president’s plan was claimed to have been based loosely on the report issued by his Deficit Reduction Commission, which recommended broad cuts in government programs and smaller tax increases. Both parties rejected the findings of the commission as unrealistic and unworkable.

Perhaps most disturbingly, the president seems to believe he is scarcely culpably for the deficit crisis himself. Obama’s long, misleading narrative on how the deficit was created at the beginning of his Wednesday speech, completely absolved him of any responsibility for the $4.5 trillion in debt his administration has piled on in just two years. At times, it was a surreal performance, as the president talked about problems with the deficit as if his administration’s increase of nearly 40% in federal spending never happened. He placed the entire blame for our fiscal woes on his predecessor - something he has been doing since he was sworn in.

Obama had no intention of making this speech a statement of policy. It was a red meat, brutally partisan, dishonest, misleading hash that “poisoned the well” as Paul Ryan remarked, for any kind of bi-partisan negotiations. Extraordinarily irresponsible in its tenor and intent, one could almost hear his liberal base screaming “Yes! Hit ‘em again!”

Senior editor at the Atlantic Clive Crook:

My instant unguarded reaction, in fact, was to find it not just weak but pitiful. I honestly wondered why he bothered.

There was no sign of anything worth calling a plan to curb borrowing faster than in the budget. He offered no more than a list of headings under which $4 trillion of deficit reduction (including the $2 trillion already in his budget) might be found–domestic non-security spending, defense, health costs, and tax reform. Fine, sure. But what he said was devoid of detail. He spent more of his time stressing what he would not agree to than describing clear proposals of his own.

His rebuttal of the Ryan plan was all very well–I agree it’s no good–but the administration still lacks a rival plan. That, surely, is what this speech had to provide, or at least point to, if it was going to be worth giving in the first place. His criticisms of Ryan and the Republicans need no restating. And did the country need another defense of public investment in clean energy and the American social contract? It wanted to be told how fiscal policy is going to be mended: if not by the Ryan plan, with its many grave defects, then how?

Good question. The answer is, as my radio guests all agreed on Tuesday night, was that serious reform will only come when we have already been pushed over the precipice and are on the way to disaster. Only when fixing things won’t do a bit of good will the Washington establishment bestir itself and act.

This point will probably be reached sooner than any of us can imagine. It may come as a result of service on the debt skyrocketing to the point that we won’t be able to fund much of anything else. Or some other time bomb - pensions, another financial crisis, global depression - goes off and we are left staring at fiscal Armageddon. Maybe the Chinese will simply decide we aren’t worth the trouble and take the hit by dumping their US Treasuries.

The point being, there are so many land mines out there, it is inevitable that we’re going to step on one eventually. God help us when we do.

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