Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 44)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
WASHINGTON, August 1, 2011 – Rep. Scott Garrett (R-NJ), Vice Chairman of the House Budget Committee and Chairman of the Budget and Spending Task Force for the Republican Study Committee (RSC), issued the following statement tonight after voting against the agreement to raise the debt ceiling:
“While a step in the right direction, this is hardly the resolution I was hoping to come out of this process. The American people wanted to see us come up with an actual solution to address our deficit and debt crisis, not another ‘deal’ rushed through Congress at the last minute. Aside from an insufficient amount of spending cuts and the threat of tax hikes on the American people, what is most unfortunate about this bill is the fact that it doesn’t address the exploding costs of our entitlement programs, which are by far the biggest threat to our credit rating.
“Above all else, I am most disappointed in the lack of commitment on the part of negotiators to seeing that a balanced budget amendment was sent to the states for ratification. No matter how much spending we cut, no matter how many blue ribbon commissions we form, a balanced budget amendment is the only solution that will resolve our long-term deficit and debt problem. The American people expected more of us—it’s regrettable we put off the tough decisions once again.”
President Obama’s job speech reacted to by Heritage Foundation scholars (Part 4)
Ernest Istook at the Saint Paul Tea Party Rally 4/16/2011 Part 1
Ernest Istook, US Congressman, Heritage Foundation, http://www.heritage.org, spoke at the Saint Paul Tea Party Rally 4/16/2011. Hosted by North Star Tea Party Patriots, and Sue Jeffers.
Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:
President Calls for Ill-advised Federal School Construction
As expected, tonight President Obama called on taxpayers to send their hard-earned money to the federal government so that Washington can pour that money into public school construction. In an attempt to boost job growth, the president suggested spending billions on school infrastructure projects to “modernize 35,000 public schools.”
Since President Obama came into office, spending on public education has skyrocketed:
Education budget in 2008: $59.2 billion
Education budget in 2011: $69.9 billion
Department of Education “stimulus” award (Spring 2009): $98 billion
“Edujobs” public education bailout (Summer 2010): $10 billion
And state and local school construction spending has also seen significant increases.
By some estimates, inflation-adjusted school construction spending has increased 150 percent in the last two decades. And unfortunately, profligacy and waste are the norm. Remember the $500 million RFK high school in Los Angeles, built last year after a California bond referendum was enacted? There are certainly schools in ill-repair, but this maintenance should be a local concern. Washington should not be in the business of school window repair, updating facilities, or repainting buildings. Schools don’t need increased federal funding for school repairs; they need more flexibility with funding to be able to use dollars for needs they consider pressing.
The president’s proposal to funnel more taxpayer dollars into school construction has both constitutional and pragmatic problems. School construction has historically been – and should remain – the job of states and localities. Federal forays into school construction have been rare and indirect. Federally-funded school construction is also a terribly expensive way to build schools: Washington-funded jobs must pay prevailing wages, increasing costs on average by 22 percent.
In calling for federally-funded school construction, President Obama is once again supporting Washington overreach in education. But he’s also behind the game in terms of the direction school policy is trending. As states and localities begin embracing online learning – and as education shifts to a world outside of the walls of physical school buildings – President Obama is pushing to subsidize the old model. The administration might think “school construction” polls better than other government “jobs” projects, but it’s just as destined to be a waste of taxpayer money, and a public policy failure.
– Lindsey Burke
Not A ‘Jobs Plan’ — Just Stimulus Redux
What President Obama calls a “jobs” plan is really just stimulus redux: a typical Keynesian-style set of infrastructure, school construction, teacher pay, unemployment benefits, and temporary tax breaks that have demonstrably failed in the two-and-a-half years since the $825-billion Recovery Act.
Obamanomics has left the economy with a growth rate just a fraction above 1 percent, nearly 2 million fewer Americans working, and an unemployment rate higher now than when he took office. Government cannot “grow the economy” (as if it were a field of strawberries), and it cannot create private sector jobs. It can only maintain conditions conducive to growth — limiting government spending and regulation, keeping tax rates low, and removing the uncertainties caused by feckless public policies.
Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:
The Absurdity of Obama’s Spending Offsets
It is absurd that this President — who ignored the recommendations of his own fiscal commission, and then sought to raise the debt ceiling without a nickel of spending reductions — now demands the super-committee created in the debt-ceiling negotiations to come up with additional savings to pay for his jobs proposal.?? ?
– Patrick Knudsen
And When, the Rest of the Story, Mr. President?
In giving his big jobs speech this evening before a rare Joint Session of Congress, also gave us a classic “Paul Harvey” moment.
Paul Harvey was a famous radio commentator and personality with one of the longest running national radio programs in history. His trademark was to tell the audience the big lead into a big story and then break for a commercial. When he came back he would then announce, “And now, (pause) the rest of the story”. We’re still waiting for Barack Obama to give us the rest of the story.
In his jobs speech, the President laid out a bunch of retread policy ideas that two years after they were first tried managed to create an arithmetic novelty – exactly zero job growth in August. In total, the President is calling for more new spending on proven policies that are proven failures, and he says these will all be paid for with budget reductions elsewhere.
But he refused to give his proposals for offsetting the cost of his proposals. Desserts only, no spinach?. We’re still waiting for “the rest of the story”. Was he unable to decide in time on what to propose? Did he think perhaps no one would notice? Why put out what is literally a half-baked plan?
– J.D. Foster
Rising Deficits Drive U.S. Debt Limit Higher, Faster
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
Congress first placed a statutory limit on total federal debt in 1917, in the Second Liberty Bond Act. Since 1962, Congress has altered the debt limit through 74 separate measures, raising it 10 times since 2001. Since 1990, the debt limit has been raised a total of $10.1 trillion, but nearly half of that increase has occurred since September 2007.
U.S. DEBT LIMIT
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Source: Congressional Research Service and White House Office of Management and Budget (Table 7.3, Historical Tables).
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Authors
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor
Why not pass the Balanced Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion).
On my blog www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, I did not see any of them in the recent debt deal that Congress adopted. Now I am trying another approach. Every week from now on I will send you an email explaining different reasons why we need the Balanced Budget Amendment. It will appear on my blog on “Thirsty Thursday” because the government is always thirsty for more money to spend.
As Congress considers what to do about federal overspending and overborrowing, conservatives must maintain focus. We must pursue the path that drives down federal spending and borrowing and gets to a balanced budget, while preserving our ability to protect America and without raising taxes. An important part of that conservative agenda is adoption of a sound—repeat, a sound—Balanced Budget Amendment.[1] A Balanced Budget Amendment is not sound if it leads to balancing the federal budget by tax hikes instead of spending cuts. Thus, a sound Balanced Budget Amendment must prohibit raising taxes unless a two-thirds majority of the membership of both Houses of Congress votes to raise them. Without the two-thirds majority requirement, the Balanced Budget Amendment becomes the means for big spenders to raise taxes.
Supporters of the Balanced Budget Amendment rightly want to force the federal government to live within its means—to spend no more than it takes in. Because the government has failed for decades to follow that balanced budget principle, America is now $14.294 trillion in debt, a debt of more than $45,000 for every person in the United States.[2]
President Obama is making things worse. In discussions with congressional leaders, he has pushed hard to get authority to borrow yet more trillions of dollars and hike taxes. And the White House reiterated this week that President Obama opposes amending the Constitution to require the federal government to balance its budget.[3]
A Sound Balanced Budget Amendment Must Require Two-Thirds Majorities to Raise Federal Taxes
Like 72 percent of the American people, The Heritage Foundation favors passage by the requisite two-thirds of both Houses of Congress and ratification by the requisite 38 states of an effective Balanced Budget Amendment to become part of our Constitution.[4] Heritage has made clear that an effective Balanced Budget Amendment must control spending, taxation, and borrowing; ensure the defense of America; and enforce, through the legislative process and without interference by the judicial branch, the requirement to balance the budget.[5] A sound Balanced Budget Amendment will drive down federal spending and end federal borrowing.
To date, Congress has proposed one largely sound Balanced Budget Amendment for consideration—Senate Joint Resolution 10, often called the Hatch-Lee Amendment after its main proponents.[6] It has a number of important features, such as an annual federal spending cap of not to exceed 18 percent of the economy’s annual output of goods and services (called the gross domestic product, or GDP) that Congress cannot exceed, except by a law passed with two-thirds majorities in both Houses of Congress or in specified circumstances involving military necessity.
A crucial feature is included in section 4 of the Balanced Budget Amendment proposed by Senate Joint Resolution 10: “Any bill that imposes a new tax or increases the statutory rate of any tax or the aggregate amount of revenue may pass only by a two-thirds majority of the duly chosen and sworn Members of each House of Congress by a roll call vote.” The requirement that no tax hikes occur without the approval of 290 Representatives and 67 Senators is essential in a sound Balanced Budget Amendment. Without the requirement for two-thirds majorities for any tax increase, the Balanced Budget Amendment becomes a sword for big spenders to use to raise taxes, instead of a shield to protect Americans from tax hikes. Those who seek to anchor into our Constitution a requirement to balance the budget must always remember that, if the only requirement is “balance,” that can be achieved two ways—cut spending or hike taxes. A sound Balanced Budget Amendment will balance the budget by driving down federal spending and not by driving up federal taxes.
Balanced-Budget States That Allow Simple Majorities for Tax Hikes Face Situations Very Different from That of the Federal Government
Some look at the experience of states that have requirements in their constitutions for a balanced state budget and draw the wrong conclusion about the need for two-thirds majorities for taxation. They mistakenly conclude that a requirement merely for simple majorities in state legislatures to raise taxes suffices to keep state taxation under control and therefore that a federal Balanced Budget Amendment should require only simple majorities in Congress to raise taxes. But the balanced budget requirement at the state level occurs in a very different context from such a requirement at the federal level.
As a practical matter, state legislators regularly work and live among the people they represent, often do their legislative work face-to-face with their constituents, and often depend upon direct contact with voters to persuade voters to keep the legislators in office. As a result, state legislators tend to be closely attuned and responsive to the need of their constituents for reasonableness in taxation. In contrast, U.S. Senators and Representatives spend much of their time distant from the people they represent, often deal with their constituents through the insulation of large staffs, and amass large campaign funds through political fundraising that allow them to depend more upon expensive mass communications than upon direct contact with voters to persuade the voters to keep them in office. As a result, U.S. Senators and Representatives tend to be less directly attuned and responsive to the need of their constituents for reasonableness in taxation than state legislators are. Accordingly, while a requirement for merely simple majorities in state legislatures to raise taxes may suffice to keep taxes under control in that state, simple majorities are not likely to keep taxes under control at the federal level—as the experience of federal tax increases in the last 50 years proves.
Some who recognize the need for taxpayer protection by requiring supermajorities, rather than just simple majorities, of the two Houses of Congress to raise taxes think a supermajority of three-fifths of both Houses would suffice. While three-fifths would add a modicum of taxpayer protection in the House, three-fifths would add little if anything in the way of taxpayer protection in the Senate, which already often requires a three-fifths majority to proceed to consideration of legislation. The existing three-fifths rule in the Senate has often failed to protect taxpayers from federal tax increases in the past. A sound Balanced Budget Amendment would add protection for taxpayers in both Houses of Congress by a requirement for two-thirds majorities of the membership of both Houses to raise taxes.
Conclusion: Adopt the Two-Thirds Majority Requirement for Tax Hikes, to Make the Balanced Budget Amendment the Instrument of Spending Cuts and Not Tax Hikes
America’s soon-to-be New Minority—people who pay federal income tax—need protection from unreasonable taxation.[7] When all Americans have the right to vote, but only a minority has the duty to pay the federal income taxes from which all Americans benefit, the risk is high that a non-taxpaying majority will elect a Congress pledged to adopt taxation that oppresses the taxpaying minority. The impulse to seek something for nothing has regrettably taken root in the American body politic in the past century. The requirement in the Balanced Budget Amendment of a two-thirds majority of the membership of both Houses of Congress to raise taxes will protect a taxpaying minority against oppressive taxation.
As Congress continues on the path toward adopting a joint resolution to recommend a Balanced Budget Amendment to the states for ratification, Congress should ensure that the Amendment includes a requirement for approval by two-thirds of the membership of the two Houses of Congress for tax hikes. Absent such a requirement, the Balanced Budget Amendment will encourage tax hikes instead of spending cuts as the means to balance the budget, making the Amendment the friend of the tax, spend and borrow crowd, instead of the friend of those who believe in limited government, free enterprise, and individual freedom.
Edwin Meese III is the Ronald Reagan Distinguished Fellow in Public Policy and Chairman of the Center for Legal & Judicial Studies at The Heritage Foundation.
Edwin Meese III is a prominent leader, thinker and elder statesman in the conservative movement – and America itself.
Meese holds the Ronald Reagan Chair in Public Policy at The Heritage Foundation, where he is responsible for keeping the late president’s legacy of conservative principles alive in public debate and discourse.
He also is Chairman of Heritage’s Center for Legal and Judicial Studies, founded in 2001 to educate government officials, the media and the public about the Constitution, legal principles and how they affect public policy.
These two Heritage “hats” keep Meese, a trusted counselor to Reagan before becoming Attorney General, among the major conservative voices in national policy debates at an age when most men and women enjoy quiet retirements.
In 2006, for example, Meese was named to the Iraq Study Group, a special presidential commission dedicated to examining the best resolutions for America’s involvement in Iraq.
Immediately after Reagan’s death in 2004, and in the years since, Meese appeared on the major cable and broadcast news programs to discuss the lasting impact of his old friend, mentor and boss. He often summarizes the Reagan legacy in three accomplishments: 1) Reagan cut taxes and kept them low. 2) He worked to defeat and end the Soviet Union and its worldwide push for communism. 3) He restored America’s faith in itself after years of failure and “malaise.”
“I admired him as a leader and cherish his friendship,” Meese wrote in a 2004 essay for Heritage members and supporters. “Ronald Reagan had strong convictions. He was committed to the principles that had led to the founding of our nation. And he had the courage to follow his convictions against all odds.”
Meese spent much of his adult life working for Reagan, first after the former actor, sports announcer and athlete was elected Governor of California in 1966 and then when he sought and won the presidency in 1980.
Meese served as the 75th Attorney General of the United States from February 1985 to August 1988. As the nation’s chief law enforcement officer, he directed the Justice Department and led international efforts to combat terrorism, drug trafficking and organized crime.
From January 1981 to February 1985, Meese held the position of Counsellor to the President – the senior job on the White House staff – and functioned as Reagan’s chief policy adviser. In 1985, he received Government Executive magazine’s annual award for excellence in management.
Meese joined Heritage in 1988 as the think tank’s first Ronald Reagan Distinguished Fellow – the only policy chair in the country to be officially named for the 40th president.
His relationship with Heritage began eight years earlier, however, when Meese met with senior management to discuss the think tank’s landmark policy guide, Mandate for Leadership, prepared for the incoming administration. Meese later recalled that Reagan personally handed out copies of the 1,093-page book to members of his Cabinet and asked them to read it. Nearly two-thirds of Mandate’s 2,000 recommendations would be adopted or attempted by the Reagan Administration.
Meese took on a new role as Chairman of Heritage’s Center for Legal and Judicial Studies more than a decade after joining the think tank. Under his guidance, the center has counseled White House staffers, Justice Department officials and Senate Judiciary Committee members on the importance of filling judicial vacancies with qualified men and women who are committed to interpreting the Constitution according to the founding document’s original meaning.
The center also became known for hosting “moot court” practice sessions to sharpen the arguments of attorneys slated to bring important cases before the Supreme Court. Those cases addressed constitutional issues ranging from property rights to racial preferences in primary and secondary schools to restrictions on free speech in campaign finance law.
Meese headed the center’s Advisory Board for the writing and editing of the best-selling book, The Heritage Guide to the Constitution (Regnery, 2005). The book assembles 109 experts to walk readers through a clause-by-clause analysis of the Constitution. Sen. Tom Coburn (R-Okla.) was among those keeping the reference work handy during Judiciary Committee hearings on Supreme Court nominees.
Meese’s other books include Leadership, Ethics and Policing (Prentice Hall, 2004); Making America Safer (Heritage, 1997); and With Reagan: The Inside Story (Regnery Gateway, 1992).
He also is a Distinguished Visiting Fellow at the Hoover Institution at Stanford University in California and lectures, writes and consults throughout the United States on a variety of subjects.
As both Attorney General and Counsellor to President Reagan, Meese was a member of the Cabinet and the National Security Council. He also served as Chairman of the Domestic Policy Council and the National Drug Policy Board.
After Reagan won the White House in the 1980 election, Meese headed the transition team. In the campaign, he was the Reagan-Bush Committee’s senior official.
During the Reagan governorship, Meese served as Executive Assistant and Chief of Staff from 1969 through 1974 and as Legal Affairs Secretary from 1967 through 1968. He previously was Deputy District Attorney in Alameda County, Calif.
Reagan never forgot Meese’s loyalty and hard work over the years. During a press conference at which reporters questioned Meese’s actions at the Justice Department, Reagan replied: “If Ed Meese is not a good man, there are no good men.”
Meese had a career outside government and politics. From 1977 to 1981, he was a Professor of Law at the University of San Diego, where he also directed the Center for Criminal Justice Policy and Management.
He was an executive in the aerospace and transportation industry as Vice President for Administration of Rohr Industries Inc. in Chula Vista, Calif. He left Rohr to return to the practice of law, doing corporate and general work in San Diego County.
Edwin Meese III was born Dec. 2, 1931, to Edwin Jr. and Leone Meese in Oakland, Calif. He graduated from Yale University in 1953 and holds a law degree from the University of California-Berkeley. A retired Colonel in the Army Reserve, he remains active in numerous civic and educational organizations.
He and his wife, Ursula, have two grown children and reside in McLean, Va.
Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 43)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
WASHINGTON, D.C. – Montana’s Congressman, Denny Rehberg, released the following statement regarding the rejection of Senator Reid’s debt limit plan by the U.S. House.
“The House has passed two bills to cut current spending, control future spending and finally bring the same fiscal accountability to the federal government that Montana families and 49 states already have. Now, finally, the Senate has proposed a plan and put it down on paper. That’s a huge step, and while it’s certainly not the plan I would prefer, at least now we can sit down and try to find common ground to bring this crisis to a responsible end. As it’s currently written, Senator Reid’s plan relies on more budget gimmicks instead of real spending reductions. It delays necessary spending control until after the election. And it brings absolutely no accountability to the federal government. It may be good politics for the President’s re-election, but it’s not good policy for the hardworking American taxpayer. But it’s a start, and I’m eager to role up my sleeves and find a solution that can pass.”
Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 42)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
Congresswoman Vicky Hartzler (MO-4) has taken a stand for fiscal discipline and a strong national defense, voting against the latest bill to increase the nation’s debt ceiling.
“I appreciate House Speaker John Boehner’s rejection of liberal demands for a blank check debt limit increase and liberal calls for tax increases, but the solution approved by Congress and sent to President Obama dramatically cuts our national defense,” said Hartzler. “This agreement strips $350 billion from the Base Defense Budget and has the Obama Administration bragging that this is, ‘the first defense cut since the 1990’s.’ The package also leaves the door open to the possibility of $500 billion in defense cuts down the road. This is unacceptable! The simple truth is that the United States Constitution requires the federal government to do only a handful of things – the most important of which is to provide for our national defense.”
“I also have concerns about a watered-down Balanced Budget Amendment provision,” continued Hartzler. “This agreement forces a vote on the Balanced Budget Amendment, but does not require it to pass and be sent to the states for ratification. I worked hard to include language requiring not only a vote on a BBA, but for the House and Senate to pass the Amendment and send it to the states. Only a Balanced Budget Amendment can force Washington to live within its means as American families must do. It is only through spending discipline that America can secure its future economic freedom.”
“Despite my opposition to this legislation, I am pleased that Republicans are changing the debate in Washington,” concluded Hartzler. “We will continue to work to control spending, solve America’s huge debt problem, and balance our budget.”
Vicky Hartzler was elected to Congress on November 2, 2010. She serves on the House Armed Services Committee and the House Agriculture Committe
In the debate of job creation and how best to pursue it as a policy goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t create new employment.
Video produced by Caleb Brown and Austin Bragg.
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When I think of all our hard earned money that has been wasted on stimulus programs it makes me sad. It has never worked and will not in the future too. Take a look at a few thoughts from Cato Institute:
On Thursday night, the president laid out his plan for job creation, a $447 billion stimulus proposal, most of which we have seen before. After all, if Congress passes this new round of government spending, it would be the seventh such stimulus program since the recession began. George W. Bush pushed through two of them, totaling some $200 billion, and Obama already has enacted four more, with a total price tag of roughly $1.3 trillion.
The result: Three years and $1.5 trillion of spending later, we are back to the same gallimaufry of failed ideas. Among the worst:
1. Temporary Tax Cuts. The president wants to extend and expand the temporary reduction in the Social Security payroll tax that Congress enacted last December. The president also called for a grab-bag of tax credits for businesses that buy new equipment, hire veterans or even give workers a raise. There is obviously nothing wrong with letting workers keep a bit more of their money. And some of the tax breaks might encourage businesses to speed up otherwise planned hiring or purchases, providing a short-term economic boost. But neither people nor businesses tend to make the sort of long-term plans needed to boost production, generate growth and create jobs on the basis of temporary tax changes. This is especially true when businesses can look down the road and see tax hikes in their future.
If government spending brought about prosperity, we should be experiencing a golden age.
2. Further Extending Unemployment Benefits. The president wants to spend $49 billion to provide another extension of unemployment benefits to 99 weeks. Of course everyone can sympathize with the plight of the long-term unemployed. But, the overwhelming body of economic evidence suggests that extending unemployment benefits may actually increase unemployment and keep people out of work for longer. In fact, many economists believe that current extensions of unemployment benefits have already extended the average length of unemployment by three weeks or more.
Governor Rick Perry got in trouble for calling Social Security a Ponzi scheme and I totally agree with that. Max Brantley wants to keep insisting that this will be Perry’s downfall but think that truth will win out this time around. This is a series of articles that look at this issue.
Matt Yglesias says anyone who thinks social security is a Ponzi scheme is nuts. So let’s take a look at some of these nuts. First up is Nobel prize winner Paul Samuelson who wrote:
Social Security is a Ponzi Scheme that Works
The beauty of social insurance is that it is actuarially unsound. Everyone who reaches retirement age is given benefit privileges that far exceed anything he has paid in — exceed his payments by more than ten times (or five times counting employer payments)!
How is it possible? It stems from the fact that the national product is growing at a compound interest rate and can be expected to do so for as far ahead as the eye cannot see. Always there are more youths than old folks in a growing population. More important, with real income going up at 3% per year, the taxable base on which benefits rest is always much greater than the taxes paid historically by the generation now retired.
…A growing nation is the greatest Ponzi game ever contrived.
Samuelson wrote that in 1967 riffing off his classic paper of 1958. By “as far as the eye cannot see” he apparently meant not very far because it soon became clear that the system could not count on waves of youths or rapid productivity growth to generate the actuarially unsound returns that made the program so popular in the early years.
Milton Friedman and Paul Samuelson rarely agreed on much but Friedman also called social security a Ponzi scheme. In fact, he called it The Biggest Ponzi Scheme on Earth but perhaps Yglesias puts Friedman in the nut category so let’s go for a third Nobel prize winner who recognizes the Ponzi like nature of social security, none other than…..Paul Krugman (writing in 1996):
Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in). (ital added, AT)
Of these, I agree the most with Krugman. Social Security is not necessarily a Ponzi scheme but it only generated massive returns in the past because of its Ponzi-like aspects. The Ponzi-like aspects are now over and social security is turning into what is essentially a forced savings/welfare program with, as Krugman recognizes, crummyreturns for average workers. Social security is thus a Ponzi scheme which has not gone bust but it has gone flat.
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So here you have it. Both liberals and conservatives can take a calm look at the issue of social security and recognize how Ponzi like it is.
Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 41)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
Washington, DC – Congressman Todd Akin (R-MO), Chairman of the Seapower and Projection Forces Subcommittee, a known fiscal conservative who has been standing for structural reforms in response to the deficit spending crisis, released the following statement on the new debt ceiling proposal:
“Providing for the common defense is one of the most important roles of the federal government, and is clearly required by the Constitution. At a time when we still have thousands of our men and women in the line of fire, dramatic defense cuts are simply unacceptable. In the worst case scenario, this bill could result in roughly $1 trillion in cuts to the military. Almost half of the debt ceiling increase may come at the expense of our national defense. I believe that many of my colleagues on the Armed Services Committee share my deep concerns with the defense cuts proposed in this plan.
“While Speaker Boehner and others have been negotiating in good faith, I am concerned that this new proposal may actually make it less likely that we can address the central problem of radical deficit spending. While this new proposal has a balanced budget amendment as one option for a future debt ceiling increase, I do not believe that the President or Democrats in Congress will be willing to support a balanced budget amendment while there are other paths available to them that allow for continued deficit spending.
“While some argue that a balanced budget amendment is unachievable with the current political landscape in Washington, our nation needs a balanced budget amendment now more than ever. We have had problems with deficit spending for much of our history, but we are approaching the point of no return. A balanced budget amendment would force us back on a responsible path. If not now, when? If not us, who?
“The plan before us today fails to address the problem at hand, and it threatens to severely degrade our national defense with a trillion dollars in cuts to our military. For these reasons, I am opposing this bill.”
Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 40)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
Washington, D.C.– U.S. Representative Chip Cravaack (MN-8) issued the following statement after the House approved the Budget Control Act of 2011:
“I could not support the amended Budget Control Act passed by the House this evening. While I applaud this bi-partisan effort to avert a default on our nation’s debt, the measure approved by the House does very little to reduce our bloated deficit; it merely slows its growth. This legislation will not ensure our nation’s AAA credit rating nor provide for a Balanced Budget Amendment before the debt limit is raised. Regrettably, this compromise risks cuts to seniors’ Medicare and veterans’ benefits, and up to a 50% cut to military funding – all the while the U.S is conducting three military operations abroad and China continues to emerge as a global super power and rival model of governance.
We must do betterto protect our nation’s prosperity for future generations.
Just recently, I voted for ‘cut, cap, and balance’ and to raise the debt ceiling; however, I gave my word to advocate the core, fiscally conservative principles my constituents in the 8th District entrusted upon me last November. I will remain an independent voice in Washington – if the numbers don’t add up, I’m not voting for it.”
The Daily Hatch 
President Obama’s job speech reacted to by Heritage Foundation scholars (Part 3)
I love going to the Heritage Foundation website because of articles like this:
Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:
The Absurdity of Obama’s Spending Offsets
It is absurd that this President — who ignored the recommendations of his own fiscal commission, and then sought to raise the debt ceiling without a nickel of spending reductions — now demands the super-committee created in the debt-ceiling negotiations to come up with additional savings to pay for his jobs proposal.?? ?
– Patrick Knudsen
And When, the Rest of the Story, Mr. President?
In giving his big jobs speech this evening before a rare Joint Session of Congress, also gave us a classic “Paul Harvey” moment.
Paul Harvey was a famous radio commentator and personality with one of the longest running national radio programs in history. His trademark was to tell the audience the big lead into a big story and then break for a commercial. When he came back he would then announce, “And now, (pause) the rest of the story”. We’re still waiting for Barack Obama to give us the rest of the story.
In his jobs speech, the President laid out a bunch of retread policy ideas that two years after they were first tried managed to create an arithmetic novelty – exactly zero job growth in August. In total, the President is calling for more new spending on proven policies that are proven failures, and he says these will all be paid for with budget reductions elsewhere.
But he refused to give his proposals for offsetting the cost of his proposals. Desserts only, no spinach?. We’re still waiting for “the rest of the story”. Was he unable to decide in time on what to propose? Did he think perhaps no one would notice? Why put out what is literally a half-baked plan?
– J.D. Foster
Rising Deficits Drive U.S. Debt Limit Higher, Faster
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
Congress first placed a statutory limit on total federal debt in 1917, in the Second Liberty Bond Act. Since 1962, Congress has altered the debt limit through 74 separate measures, raising it 10 times since 2001. Since 1990, the debt limit has been raised a total of $10.1 trillion, but nearly half of that increase has occurred since September 2007.
U.S. DEBT LIMIT
Chart 26 of 42
In Depth
Policy Papers for Researchers
Technical Notes
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Authors
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor