After raising the annual budget deficit to $1.5 trillion (about 2.5 times the all-time high deficit), Obama finally decided to get tough. He’s had enough with rising deficits in his administration, which is why he’s decided to “freeze” the deficit at $1.5 trillion.
Yes, ladies and gentlemen, Obama is taking a no-holds-arred approach. He’ only going to spend a trillion and a half more than he is supposed to every year … and not a penny more.
President Obama obviously understands the real problems. Otherwise he wouldn’t come up with this type of phony rhetoric.
On top of that Obama stressed investments in education and innovation as being essential to maintaining America’s economic and technological dominance around the world.
I agree with him. Science, technology, and education are the keys to maintaining America’s status in the world, but let’s call the problem what it is. Technology and business “investment” only accounted for at best some $90-100 billion of Obama’s $830 billion stimulus package, about 11-12 percent (other estimates have the number being significantly lower). The remaining 88-89 percent of the stimulus was pure waste.
What Obama is trying to do is utilize a little bit of good spending to justify a lot of bad spending.
In addition, Obama conveniently omitted is that he’s phasing out the Space Shuttle program, laying off thousands of workers, and making the U.S. reliant upon the Russians and the Chinese in order to launch manned spaceflight. That part seemed to be missing from the speech.
Considering all of the advances that have come from the space industry (the Tempur-Pedic mattress comes to mind) and the national security implications of not being able to launch manned spaceflight, I think President Obama should take another look at his “investments.”
After sipping some Ginger Ale to calm down my stomach, Obama’s turn was over and now it was Rep. Paul Ryan’s turn to seize the spotlight.
I was looking forward to the Republican response because this was supposed to be a new House of Representatives that was heavily influenced by the tea party, which has repeatedly called for balanced budgets and fiscal responsibility.
Sadly, what we got from Ryan was, as John Kerry would put it, “more of the same.”
We’ve heard from Republicans for years that they are all about lower taxes and smaller government. We’ve heard for years that the Republicans are here to lower government spending (although that hasn’t happened since Newt Gingrich left office).
The State of the Union response was no different. Ryan correctly named America’s No. 1 problem, its financial health, and its main culprit, overspending.
However, after properly identifying the problem, he cleverly sidestepped the real solution with the seductive phrase “deficit reduction.”
It sounds good doesn’t it? Who doesn’t want to reduce our deficit?
Yet, as they say, the devil is in the details.
Politicians know that many people confuse the deficit with our national debt (the deficit is how much we overspend on an annual basis whereas our debt is how much we owe overall).
The current House GOP “deficit reduction” plan calls for $2.5 trillion in deficit reduction over the next 10 years.
Again, sounds good doesn’t it? The Republicans are finally hawks on the budget again.
The annual deficit is currently at $1.5 trillion. So they want to reduce it only $250 billion per year. That’s pathetic.
Even if they came out with a new plan to decrease the deficit by a trillion dollars per year, that still leaves us with a $500 billion per year overspending problem and that is an additional $5 trillion over 10 years (plus interest and interest accumulating on interest).
The Republicans and the Democrats for that matter need to start talking about deficit elimination, not just deficit reduction. They need to start talking about national debt reduction and entitlement reduction.
The national debt has now eclipsed $14 trillion. But that’s peanuts compared to entitlement liabilities.
We owe over $14 trillion in Social Security payments, a convenient target for many Republicans who want to “privatize” Social Security. While privatization gives people more control of their money, it doesn’t address the Social Security problem.
When Social Security first was created the average life expectancy was 59.1 years, according to the National Center for Health Statistics. Now, according to the World Bank, the average life expectancy is 78.4 years old.
You see Social Security wasn’t designed to be a retirement program. It was designed to be somewhat of an insurance policy. When you lived pass the life expectancy (which was 59) and made it to 65, you would be able to cash in from the funds that you paid into the system, so that you wouldn’t have to keep working into your old age.
After medical advances curing polio and the invention of penicillin, people started living longer, yet Social Security’s retirement age remained the same at 65.
Since 1960, life expectancy has only risen roughly 8 years (70-78), which equates to a pace that can rounded up to say that every 5 years our life expectancy goes up 1 year.
Utilizing that scale, for everyone who is 55 or older, everything stays the same. But for everyone under the age of 55, the retirement age goes up. If you are 50-54 it goes up to 66. If you are 45-49, it goes up to 67, and so on and so forth.
Everyone under the age of 18 will be eligible for Social Security when they reach 78 years of age. After that Social Security eligibility age goes up 1 year every 5 years.
That’s real Social Security reform that drastically reduces our entitlement liability by a minimum of 50 percent.
Then there’s the 10-foot tiger … Medicare. Currently the United States has more than $77.8 trillion of unfunded Medicare liabilities, according to the Federal Reserve.
How the United States is to address this problem was not even a topic of conversation during the State of the Union or the rebuttal.
The only thing President Obama has said that would lower the cost of health care is to have medical malpractice reform, to reduce lawsuit awards for malpractice.
The Republicans only have an empty promise of repealing and overriding Obamacare.
I say it is an empty promise because 1) They don’t have the votes in the Senate to pass any legislation and 2) They can’t even smell the 2/3 majority that it would take to override a presidential veto.
If the Republicans were really serious about repealing or at least gutting most of Obamacare, they would attach those reforms to a bill that the Democrats really want to pass. That would force the Democrats to play ball and negotiate and eliminate many of the cost-raising provisions of Obamacare.
But even that doesn”t go far enough.
Remember, we still have over $19.5 trillion worth of unfunded prescription drug liability. Again, no one is even talking about this.
America needs real reform, structural change. No longer can the same old partisan talking points be used as sufficient rhetoric to quell the American people.
The American people must rise up to call out Democrats and Republicans for their empty promises and fancy rhetoric. The American people must remind them that if we are to restore America to her former greatness then we must appeal back to the founders.
We need “Common Sense” in government. We need to remember the Benjamin Franklin adage that, “He who goes a borrowing goes a sorrowing.”
In the age of cable television and the Internet, the American people can become informed like never before. With knowledge, the people can demand real change.
That’s good news for America … bad news for Washington politicians and bureaucrats.