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BLOG: Deadlines and Demagogues

Don notes another failure of the Obama administration to propose a budget on time.

I read today that President Obama is once again missing the legal deadline for submitting a budget to Congress.  This is neither unusual nor unexpected.  It is also inconsequential, because President Obama's budgets have been generally ignored by bipartisan majorities in both houses of Congress.

This failure would be worthy of some press attention, especially considering that President Obama has been fond of chastising his political opponents with their failures to "meet deadlines".

Unfortunately, there are very few in either Washington or St. Paul who are willing to be honest with the People.  The fact is that in both Minnesota and nationally, we are spending more money than we have, and racking up debt on our offspring.  The problem is far worse in Washington than St. Paul, but the problem is the same.  The voters demand easy answers, and the politicians provide them.  Demagogues trump those who speak the truth, and .

Focus on our growing debt is appropriate, and necessary.  There is no greater threat to our nation than the possibility that we may become a deadbeat nation.  Given that we currently have no plan to repay our national debt, and seem to consider every need a necessity, being a deadbeat is a very real possibility.  No amount of "easing" by the Federal Reserve will satisfy our international creditors.

The house GOP has started on a path to try to force Congress to produce a budget - a reasonable and modest demand - let's support their effort, and at least get some honesty on our out of control spending.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Ken in MN January 22, 2013 at 01:28 PM
Donald, have you ever bought a home with a mortgage?
Ken in MN January 23, 2013 at 01:26 PM
It's been 24 hours. You must be busy borrowing money from a bank to expand your business. In other words, SPENDING MORE THAN YOU HAVE... (So I'm just going to go ahead and give you the benefit of the doubt, and note that the title of your piece, "Deadlines and Demagogues" was snark, because it certainly couldn't have been ignorance-fueled hypocrisy...)
ABSG January 23, 2013 at 02:57 PM
Really Ken in MN ?? Do you pay your mortgage, credit cards on time? Does your lender allow extensions on your Due Date time and time again? Does your lender let you skip payments without penalty ? Does your lender let you borrow more than you have in equity ? The answer is NO. Yes, Ken - people borrow money everyday - but "responsible" people also "pay it back" and if they don't they are no longer allowed to borrow more and more! And what they were allowed to borrow is taken away (ie your house, car, boat, business etc....) You can't keep robbing Peter To Pay Paul. This is pretty elementary ...
Donald Lee January 23, 2013 at 05:52 PM
Thank you for posting comments. With the exception of the last sentence, this post is simply a collection of facts. The president is late. His budgets have been ignored. We have a huge debt. That debt is growing rapidly. That debt is a serious issue. There is no plan to pay it back. How are my personal finances relevant? The title is supposed to be catchy. A news article about Pres. Obama missing the legal deadline on his budget was what triggered my writing. A demagogue appeals to emotion and those who are not well informed. Those who understand the budget and our federal debt know that we are playing with fire if we don't get our spending under control. Pres. Obama appeals to people's fears and promises to "preserve" entitlements that cannot be sustained. This is the very definition of demagogue. (see: http://mendotaheights.patch.com/blog_posts/the-end-of-medicare and http://mendotaheights.patch.com/blog_posts/cliff-notes and http://mendotaheights.patch.com/blog_posts/entitlements-promises-and-debt) I like the title, and I think it fits.
ABSG January 23, 2013 at 10:36 PM
Spot On Donald!
Ken in MN January 24, 2013 at 09:38 PM
ABSG and Donald reveal their complete ignorance of how the federal government is financed, and how entitlements are financed. To ABSG: The US government has yet to default on any of its debt. Period. End of sentence. So what is your point? To Donald: So what? The "legally required budget" DOES NOT appropriate any money. That is done by spending bills that originate in the Republican't-controlled House. Besides, you said yourself that Congress just ignores the president's budgets anyway, so making an issue of it is the very definition of demagoguery. Pot, meet kettle. Regarding entitlements (more appropriately called "earned benefits) you've forgotten what Mark Twain said: “It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.” Social Security and Medicare are both funded by dedicated revenue streams. In fact, Social Security has a surplus of $2.3 trillion! It can pay full benefits for the next 20 years per current projections, and then 75% of benefits after that if nothing else changes. It can be pay 100% benefits until the year infinity of the income cap is eliminated. I'm sure billionaires who hide their money in the Cayman Islands instead of investing it in the US won't miss the few dollars that would cost them, since it's money they'd never spend in their lifetimes anyway. And issues with Medicare can easily be solved by dropping the age of eligibility to zero...
Donald Lee January 24, 2013 at 10:55 PM
Thank you again for posting. There is no demagoguery in merely insisting that we follow the law and HAVE a budget. The fact that it is non-binding in some sense is beside the point. I have documented the state of federal entitlements here. The bottom line is that it all comes from taxes, and the promises are much bigger than the projected taxes. The idea that raising the income cap would fix anything is simply not true. SS does *not* have a "surplus". I believe SS is already cash-negative. SS may have a "trust fund" of 2.3 Trillion, but you have to remember that the "trust fund" is debt - **of the federal government**. It is not listed as part of the federal debt, but should be, because the federal government will have to make good on it. See: http://mendotaheights.patch.com/blog_posts/entitlements-promises-and-debt Medicare has similar problems. I wrote about that here: http://mendotaheights.patch.com/blog_posts/the-end-of-medicare Again, the idea that there are simple, easy answers is attractive and wrong. I think if it were easy, some ambitious legislator would push that easy solution. None do. You have to wonder why.
ABSG January 25, 2013 at 03:44 AM
Wow Ken - have we met ? You seem to know so much about me Ken - Very Strange! "The US government has "yet" to default on any of its debt" ..... KEY WORD "YET". And the only reason we have not defaulted is that they just keep raising the debt ceiling which is ridiculous - if Congress did not raise the debt ceiling and the Treasury was unable to borrow, it would trigger a shutdown of the federal government and a "default" on existing loans. I say let it shutdown! POINT IS - you apparently think it's just fine and dandy to keep borrowing and spending and never having to pay back what you borrowed. You also come across as pissed at "rich people" - I call it envy. Why don't think hard working people who earn their own fortune deserve to keep it ? And lastly, we can't just keep raising the debt ceiling and at some point we need to "Stop Spending" or go into "default" and start paying off our debt. One or both will happen IMHO at some point within this next 4 years.
Ken in MN January 25, 2013 at 02:26 PM
ABSG: The Market obviously doesn't agree with you, as interest rates on government bond is below zero in real terms. It also seems that your issue with any potential future default lies with the Republican't Party, as they are the ones who took the world's economy hostage and are threatening to kill the hostage if their demands to punish the old, young, sick, disabled and middle class aren't met. Plus, I never said anything about never paying back the money we borrowed; those are your words. Your ignorance of the debt ceiling issue is also stunning. Raising the debt ceiling DOES NOT raise the amount of money the government spends, rather, it allows the US government to pay for the spending already authorized by CONGRESS (which is directly controlled by Republican'ts in the House, and, thanks to filibuster abuse, effectively controlled by Republican'ts in the Senate) so once again your issue is with the Republican't Party and their first-line tactic of hostage taking. Donald: Referencing anything from the Koch Brother-funded Mercatus Center was your first mistake. They have an agenda to eliminate Social Security, the New Deal, and the Great Society, the very things that created a middle class and enable the elderly to retire with dignity after a lifetime of work, rather than becoming speed bumps by dying in the streets...
Ken in MN January 25, 2013 at 02:28 PM
As far as this little gem: "Again, the idea that there are simple, easy answers is attractive and wrong. I think if it were easy, some ambitious legislator would push that easy solution. None do. You have to wonder why." They have: http://www.huffingtonpost.com/2012/11/15/bernie-sanders-social-security_n_2139776.html So again, I refer you to Mark Twain...
Ken in MN January 25, 2013 at 02:49 PM
Plus, Charles Blahous is a known fraudster: http://nymag.com/daily/intelligencer/2012/04/bogus-obamacare-deficit-study.html Plus, more information on Social Security from some actual economists (as opposed to a computational quantum chemist pretending to be one. He may be a very smart guy, but would you want him performing your brains surgery?) http://www.cbpp.org/cms/index.cfm?fa=view&id=3261
Ken in MN January 25, 2013 at 02:53 PM
And even more on Social Security http://www.epi.org/publication/social_security_and_the_federal_deficit/
Ken in MN January 25, 2013 at 02:57 PM
And the 75 year projections? Completely bogus and designed by Bu$hCo for fear maximization with big, scary-sounding numbers, in order to enact a Wall Street swindling of the public via privatization: http://peoplespension.infoshop.org/blogs-mu/2010/08/09/the-social-security-trustees-%E2%80%9Cinfinitely%E2%80%9D-unreal-projections/
Ken in MN January 25, 2013 at 03:06 PM
But don't believe me, or the folks over at The People's Pension about Big Scary Numbers and attempted swindle. Why don't we check with the folks over at The American Academy of Actuaries? http://www.actuary.org/pdf/socialsecurity/tech_dec03.pdf
Donald Lee January 26, 2013 at 05:48 AM
These are all interesting links. It is important, though, to understand what the numbers being presented are, and to compare the conclusions with your own understanding of how things work. Common sense can be useful. Many of these projections are based on huge assumptions. One of the papers says its silly to assume that some upcoming revolutions won't dramatically increase our GDP in the future, and therefore, we shouldn't worry. Prudence dictates that that's reckless. We should project the expenses carefully, keeping worst case projections in mind. I also see a lot of references in these projections to costs in terms of percent of GDP rather than dollar terms. This is misleading at best, and is worthless at worst, because predicting future GDP is at least as hard as predicting future costs of commitments. I still think that all the noise from the left about SS being "just fine", usually with some minor tweak to keep it ticking is just wishful thinking. The cold hard facts include the politics, and the politics say that benefits keep going up, and the sheer number of retirees will make the program more expensive than future taxpayers will tolerate. Remember that the vaunted "trust fund" is nothing more than a pile of T-bills held in the basement of the SS building somewhere. The future taxpayer has to make good on those. The trust fund has already been spent. It effectively does not exist.
Donald Lee January 26, 2013 at 11:01 PM
Ken in MN inspires me to try to explain a core concept that is essential to understand our debt problem - the nature of money, and what a huge debt means, in real, practical terms. I am already on the hook for a column I have not yet written about why "regulations" are never all that their proponents wish, and often just a vehicle for those who are regulated to keep their competitors at bay. These are both on my to do list.
Susan January 27, 2013 at 04:02 PM
Regulations placed on our businesses in the name of safety of the public, their property, and the planet. This is one area where Republicans and Libertarians have started to sway my opinion. Although I find it absurd to say that there should be NO regulations and/or guidelines placed on our businesses and citizens, I am finding that those who are harming others and the environment are doing it while violating current regulations...blatantly ignoring them in the name of profit and/or one's own self interest. Perhaps punishment is what we need to focus on, not more laws and regulations. Donald, I look forward to this post.
Ken in MN January 28, 2013 at 01:58 PM
Knock yourself out, Donald. But John Maynard Keynes already wrote the book, and those economists who paid attention to what he wrote in The General Theory of Employment, Interest and Money fared well in their prediction over the last 30 years, while those who believed that tax cuts would pay for themselves, that austerity now, austerity forever is the correct answer to an economy in free fall due to a shock to the financial system, and that the Fed doing anything would lead to hyperinflation within two years were horribly, devastatingly wrong... I actually can't believe you think debt to GDP is meaningless! Oh. My. GOD! Donald, it's not the amount of debt in absolute dollar terms that's important. It's the ability to service that debt based on your current income (by which you base your future, projected income.) As for predictions about what may happen in the future, I will ask yet again: Have you ever bought a home with a mortgage? I'm just going go ahead and assume you have. I'm also going to assume you, like most people, secured a 30-year term at a fixed rate. Thirty years is a long, long time. What made you think you'd have a job at an income high enough to service that mortgage for the entire thirty years? Now, given the "logic" you presented above, how could you have in good conscience done such a thing? With that level of uncertainly, I'd guess you were living in a cave somewhere...
Ken in MN January 28, 2013 at 08:58 PM
And it seems a Nobel Prize winning real life economist agrees: http://krugman.blogs.nytimes.com/2013/01/28/failures
Susan January 28, 2013 at 11:29 PM
Ken, did you watch "Morning Joe" today?
Ken in MN January 29, 2013 at 01:58 PM
No, Susan. I'm already at work when it airs, and I don't subscribe to cable TV. (Some people may by shocked to find that Liberals have jobs, work their butts off and can still care about somebody other than themselves and are proud to pay taxes in order pay for the greatest country on Earth...)
Susan January 29, 2013 at 02:23 PM
Haha, ok. Krugman was on yesterday promoting a new book and talking about the economy (again). I like the show because it has some real balance. Scarbarough is a Conservative on a liberal network. It's pretty good if you ever want to check out videos online.
Ken in MN January 29, 2013 at 03:10 PM
Okay, Susan. I just caught the clip online. Krugman PWNED them all, even Wall Street Tool Ed Rendell. And Scarbarough was so miffed he had to write a whiny piece that appeared on Politico this morning proving Mark Twain right once again...
Susan January 29, 2013 at 03:44 PM
Yes, he certainly can get worked up when he disagrees, but the reason that I like the show is because even if he disagrees, he has him on the show and doesn't shut him down. He goes after the extreme in the tea party and those opposed to better gun checks (reversing his previous position) also. I don't love Scarborough but I like the show. I only saw part of the Krugman segment and only asked because of the timing of your comment...I think we're mostly on the same "side".
Ken in MN January 29, 2013 at 05:10 PM
Fair enough...

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