Saturday, February 16, 2013

Auto-Cuts, Deficit, Debt -- Blame Game

Sequestration was Obama's idea, or at least that of his rather inept economic advisers. It was a stroke of political genius meant to strengthen support for the socialists while intentionally harming the country.

Sequestration was a tactic. The idea was to champion the cuts to include cuts to the national defense budget that could reasonably weaken our military and our country's ability to respond to threats, aggression, and enemy plots. The weakening of the military was part of his plan since he was a US Senator.

The cuts on domestic programs were always planned to pin on conservatives. Let's face it. Since socialist LBJ started the "War On Poverty" and "Great Society" programs, the idea was to make Americans give up the American Dream and willingly become dependent upon the federal government to provide things that are individual responsibilities. The idea was to instill the "nanny state" slowly so that when it met with opposition later, when wise self-sufficient people realized what was going on the socialists could vilify them as "taking away the handouts you are 'entitled' to".

So, the sequestration cuts Obama suggested and agreed to are now, according to socialist propaganda, the fault of conservatives. There is no spending problem. There is a "deficit" problem because somehow the tax payers owe the lazy their free stuff. After all, "we" (the politicians) promised them all this stuff they didn't earn. Now we have a "paying for" problem.

Democrats in the Senate introduced a bill to modify the automatic budget cuts in order to reduce the "pain". They offer a reduction in cuts across the board with a lessening of the cuts in national defense spending. They are still willing to accept some cuts. Of course, this all comes with a price -- tax hikes.

They call the plan "The American Family Economic Protection Act", though it has nothing to do with protecting the property (salaries and benefits) the families have earned. In fact, it's a means to take even more from them.

The tax hikes will come in the forms of capital gains taxes, petroleum taxes, and income taxes. Also, instead of reforming social security and medicare, those taxes will increase.

Also, the cuts won't be immediate cuts. They will be spread over 10 years. So, they really don't amount to cuts at all, but smaller increases. To top it off, future bills will be able to nullify this one.

In addition, they filed this bill just before taking 10 days off, leaving very limited  time to debate and vote on this bill. The bill may not even have enough time for review by any of the House committees or sub-committees before  the sequestration cuts take effect.

In other words,  the Democrats' plan is to kick the can down the road:

New revenue from the wealthiest Americans and biggest corporations: $55 billion: The American Family Economic Protection Act includes the Buffett Rule, which reduces the deficit by $54 billion by making sure that taxpayers with a gross adjusted income above $1 million cannot pay tax at a lower effective tax rate than middle class families. Specifically, it would require these taxpayers to pay a 30 percent tax on all of their adjusted gross income (less charitable contributions), phased in between $1 million and $2 million. The proposal also eliminates a tax break that encourages companies to ship job overseas by denying tax deductions for costs associated with outsourcing, reducing the deficit by less than a billion dollars. And it eliminates a special tax loophole now enjoyed by the oil industry by including oil from tar sands among the petroleum products that are subject to taxes that support the oil spill liability trust fund, which would reduce the deficit by $2 billion.
Defense cuts: $27.5 billion:
The American Family Economic Protection Act includes modest reductions in the overall level of defense spending phased in responsibly to time with the troop drawdown in Afghanistan in 2015, and continuing through 2021. The reduction would be about $3 billion in Fiscal Years 2015 and 2016, and then would rise slowly to a high of about $5 billion in Fiscal Year 2021.
Domestic cuts: $27.5 billion:
The American Family Economic Protection Act saves $27.5 billion over 10 years by ending direct payments, which are currently provided regardless of yields, prices, or farm income.

There's an issue with increasing social security and medicare taxes.

Social Security and Medicare are also forms of public debt. Because of the way the programs are set up, in order to seem remotely constitutional, they are really just loans to the government. When receiving the benefits later in life, you are really being repaid those loans with interest, allegedly.

The problem is that these are not kept in separate accounts. All of the funds taken from workers go into the same general fund and used to pay for things  like studies of shrimp on a treadmill or investing in lemons such as Solyndra. Then there are those retirees who put money into the fund for fifty years or so. Well, they are owed that money (plus interest) back in payments.

The payments are now unsecured, meaning the government owes these liabilities but does not have the collateral or funds to pay them. So, it owes the money. For those of us in our 30s and 40s who have paid into the funds for the past 15-20 years, we are owed that money. We may not be eligible for payments until we reach 67 years of age. However, we are still owed. That is part of the national debt. Worse, they are unsecured liabilities.

Making that system worse are people receiving "disability" or SSDI. If they paid into the system for 20 years, they have earned maybe 10 years worth of benefits. However, they will have exhausted what they are owed long before they reach retirement age. Yet they will continue to receive checks. Where does the money come from? It comes from those of us still paying into the system. What should be our retirement money is supporting disabled people. Some of us can afford that. Others cannot. Regardless, we are not given the option to donate or not. It's tyranny.

To make this even worse, there are people feigning depression and other maladies in order to receive those handouts. They are not really disabled. They are just dead-weight burdens on society. But the nanny-state promised to take care of them and relieve them of the responsibility to take care of themselves. The only things they must do in return are to keep voting for socialists and giving up their natural rights (and threaten those of others).

But if reform is even hinted at, conservatives become the bad guys for trying to take these handouts away from people in order to allow those who actually earned the money to keep what is rightfully theirs. How dare they!

However, conservatives do deserve a fair portion of the blame. So far, they have failed to stand up for the core principles of the US Constitution and the natural rights it protects. They have caved and capitulated, calling it compromise. With true compromise, cuts in "entitlement spending" and subsides would have been deeper. With true compromise, defense cuts would have specifically targeted DoD civilians, leaving military pay, benefits, training, equipping, and operational spending in tact. The flip side would have been those tax increases we all suffered. 

In the end, the automatic sequestration budget cuts are only a poor idea in that they don't go far enough in cutting spending on non-essential government programs like food stamps, education (a state and local responsibility per the 10th Amendment) and Section 8 housing and Obamaphones. I still dare somebody to show me where in Article 1 of the US Constitution does it say the federal government is allowed to levy taxes for these programs.

Given the fact that little has been done, so far, and time is running out, more than likely we the people will be stuck with the burden of yet another bad law. If we are lucky, nothing will be passed and the sequestration cuts will just go into effect as originally planned.