Ryan And Obama's "Budgets": Why Neither Will Work, And A Better Idea

We can quickly dispose of Obama’s plan, which is the reason “Budgets” is in quotation marks. Can you really call something a budget when there are no specifics about what is allocated for what? In the general outlines of his presentation, Obama offered only classic liberal orthodoxy. First, cut nothing of the nearly all-encompassing Leviathan of government, even after the past two years of unprecedented and unimaginable expansion and spending growth. George W. Bush’s administrations saw government growth that was too much with both a Republican and Democrat Congress; the greatest since the Johnson administration in the 60s. The deficit this year is currently estimated at $1.5 trillion; over three times the deficit in 2008, the last and largest produced by Bush and a Democrat Congress. The only cut Obama offered was in defense, which is one of the precious few responsibilities that the federal government was actually designed to have.

And secondly, Obama called for raising taxes on “the rich.” It’s amazing to me how leftists can perpetually peddle the idea that conservatives have no objective other than to “make the rich richer.” Oh yes: the stuff of my dreams is of people already living in luxury to have even more and keep it away from anyone else. If you have a common-sense conception of how reality actually operates, this kind of thinking is downright loopy. But very bright people hew to it because of false dogma that they harbor at the foundation of their conceptual system. By the way, I’m sure that knowledgeable and responsible people who care about maintaining the highest capacities, can ferret out plenty of waste and unnecessary expense in the Defense Dept., which is after all another government bureaucracy with no market constraint on cost. But that is the last rather than the first place to go. But Obama’s suggestions are silly and a non-starter for Republicans which he must know. It really amounts to rhetorical fish for the far-left seals who don’t.

So, on to the real world and Paul Ryan’s budget. Everything that many Republicans say about it being bold and thoughtful is true. It is thoughtful because it maps a long-term pathway to avert a general calamity and the specific failure of Medicare and Medicaid, preserving them from mandatory painful cuts that would have to be made in the face of insolvency in the near future, without changing the plans for anyone over 55 with a lifelong vestment in the system. And, it preserves a viable plan for generations following. It is bold in that it decisively and necessarily changes the direction of the discussion, even while building in increased government revenues by inducing government growth. And, it does so while braving the additional, historically politically fatal, objective of reforming those entitlements. He predicted that it would be met with derision and insult. And he was right. Why? Because that is the only play in the leftist playbook. Ryan supposedly wants to abandon the needy while giving huge tax-cuts to the wealthiest Americans. But in truth, his plan preserves provision for the needy, and the tax cuts (really just revisions: lower rates and fewer deductions) are the essential for inducing the growth that makes everything, really anything, possible.

But I think Ryan’s plan will not work, simply because it stretches over a decade. In the terms of the plans he’s long had posted on the Internet, it is a roadmap for a relatively long term journey. Ryan himself admits that this journey must be started NOW. But even if it gets a few Democrats in The Senate, it will not survive a filibuster and President Obama will not sign it. Even if we avoid calamity in the next year and a half, and gain a Senate majority and President in November 2012, such a plan could not clear a Senate filibuster. The truth is, it would have a better chance of passage if critical problems do happen before then, like America losing its world reserve currency status and/or (these would affect each other) its bond-rating, or creditors balking at further financing, which will cause big social cost and unrest. But even in the very unlikely case that it were implemented without fatal modification, the chance of it remaining in place without revision…not very good; or has the world changed completely?

When asked on the first day what I thought of the plan, I said it was very commendable, but it won’t happen. “What would you do?” “Well, what I would do would have even less chance of passing. But, if I were the all-powerful emperor, first I’d raise the income tax rate on the wealthiest individuals.” Huh? WHAT IN THE WORLD AM I TALKING ABOUT?! Hang with me. It’s not because I’d expect more revenue. Wealthy INDIVIDUALS (remember that) are only going to shelter their investment, whether here or out of the country, and largely wouldn’t pay more. Raising these rates is only a sop to hopefully hold the barbarians back from the gate when I do this: Business and capital gains taxes…ZERO. Don’t invest your money overseas. Invest it here, where there is no tax on business profits or investment capital gain…as long as it stays invested and is not taken out as personal income. It occurs to me that I should clarify that I don’t like Obama, see $200-$250 thousand dollars of individual or family income,“wealthy.” I mean people with income of $1 million or more, who have people shelter their money. We want people to invest in our country (0 capital gains) or spend their money, NOT pay taxes as middle-class people typically do. But, it can deny the “giveaway to millionaires” talk.

Some will wonder if this won’t dry up needed revenue. No. Where will it come from, if not business and capital gains taxes and if the rich won’t really pay more income taxes if their rates are higher? It will come from lower class people who are now working, and middle-class people whose incomes are increased and will pay more in taxes. How will those people make up for lost revenue from “the wealthy?” It’s simple but somehow intractably difficult for some people to avoid: there are a LOT more of them. It’s the same reason they always wind up migrating high tax rates downward and hate the indexing of tax brackets: the middle class is where the most of money is. I’m telling you: in your lifetime you’ve never seen the amount of resources and commercial activity that would be going on in short fashion with tax burdens on commercial activity eliminated. The only unemployed would be those totally unable or unwilling to work. And THAT is the issue.

But really Ryan’s plan is a minimal one, that would only spare us big problems if it were quickly and relatively fully implemented, which is EXTREMELY unlikely. My idea is even more unlikely, though it gets to the most important underlying issues of the discussion. But, both of them leave undisturbed, the idea that is at the root of the entire problem, that we have assumed all of our lives. In other words, even if these ideas were able to cut down the problem…IT WOULD GROW BACK. Part of it is human nature, and part of it is a loss of the constitutional perspective that was meant to restrain it. It will take me a while even to outline it and it surely won’t be short. But I’d like to discuss a constitutional resolution and restoration. That would be REALLY RADICAL! But, it would solve the problem and rid us of a lot of the pointless debate that we’ve had all of my life, between people who do not see America, or even reality in the same way.

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