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| 5/24 |
| 2007/2/28-3/4 [Politics/Domestic/President/Bush, Politics/Domestic/SocialSecurity] UID:45839 Activity:moderate |
2/28 The Iraq War: a bargain at double the price:
http://preview.tinyurl.com/2xf3kw
\_ You can stop reading at "Dominated by Social Security and health
care, the federal budget..."
Over 50% of the federal budget is now military. -tom
\- if you are accruing liabilities, then you arent really capped
at 100% so it is better to talk number of dollars than
percentages. so he is right the total cost of servicing
things like the social security obligations and medicare
obligations are larger than the military. the numbers vary
based on assumtions and how many years out to but for medicare
and soc security you start seeing numbers like 45-75 trillion
dollars. so the entitlement number seem smaller because we're
not actually paying them but putting in IOUs. we cant pay
the military with IOUs, let alone haliburton. but i'm not
defending this dood's accounting of course. "how many billion
dollars would you be willing to burn to reclaim the loss
of american credibility" etc. it's of course equally bogus
of american credibility" etc. if's of course equally bogus
on only focus on econ costs.
of american credibility" etc. it's of course bogus to only
focus on econ costs.
\_ You need to consider the net present value of all this
spending. And we are certainly paying Halliburton with
IOUs, they are called treasury bonds.
\_ re: NPV ... yes obviously ... that's what is being done.
give me a little credit [no pun intended]. there are a
lot of other actuarial and economic assumptions in there
as well ... that's the tricky part, not mechnically coming
up with the NPV ... that's just arithmetic.
re: halliburton ... no, we are PAYING halliburton with
cash. we are FINANCING it with borrowing. when you buy a
house, you are not paying the seller with a mortgage.--psb
\- see e.g.
http://www.nationalreview.com/nrof_bartlett/bartlett200504280951.asp
http://www.signonsandiego.com/uniontrib/20070211/news_lz1e11riedl.html
[see in particular the 3rd paragraph in the SD UT article]
\_ i thought of a good analogy: say you are going to
MIT and paying for it though student loans. the mit
tuition is $33k/yr now. now say your are paying
$1000/mo on rent and $1000/mo on food and entertainment.
$1000/mo rent and $1000/mo for food and entertainment.
It is not accurate to say "50% of my expenses is rent".
Really you are accruing close to $3k/mo in liabilities.
So yes, it is fair to say "your budget is dominated by
tuition expenses" ... even if you are only say paying
$100/mo toward your student loans. --psb
It really is not accurate to say "50% of my expenses is
rent". Really you are accruing close to $3k/mo in
liabilities. So yes, it is fair to say "your budget is
dominated by tuition expenses" ... even if you are only
say paying $100/mo toward your student loans. --psb
\_ The future liabilities of our military posture
surely outpace those of social security, though
they may be more difficult to project. -tom
\_ medicare liability is more than 2x soc sec
obligations. it's hard to take your judgement
obligation. it's hard to take your judgement
calls seriously when you seem to miss a basic
fact like that. you can look for
google(kansas city federal reserve bank, social
security, medicare) for a research report on this
from 2006. that bartlett fellow has written a
bunch on this too. there is also an excellent
article in the nyrb ... i think i mentioned that
earlier in the motd or wall archive.
\_ PSB > TOM
http://tinyurl.com/yrtors (60 Minutes) |
| 5/24 |
|
| preview.tinyurl.com/2xf3kw -> www.washingtonpost.com/wp-dyn/content/article/2007/02/27/AR2007022701159.html Page A19 Anyone who practices deadline journalism is bound to find much to regret -- things you wish you'd said (or hadn't said) and words, arguments and attitudes that, with hindsight, seem poorly chosen. As the situation in Iraq has deteriorated, some readers have suggested that I revisit that column and confess to error. Let me take up their invitation, because today's ferocious war debate raises many of the same issues. The war has cost far more than I (or almost anyone) anticipated. Still, I defend the column's central thesis, which remains relevant today: Budget costs should not shape our Iraq policy. But in considering the various proposals -- President Bush's "surge," fewer troops or redeployment of those already there -- the costs should be a footnote. We ought to focus mostly on what's best for America's security. A Shared Stake in Iraq's Future Zalmay Khalilzad | The agreement on the oil law should give us confidence that Iraqis are willing and able to take the steps needed for Iraq's success. Since September 2001, Congress has provided $503 billion for Iraq, Afghanistan and related activities, says the Congressional Budget Office. The administration's request for fiscal 2007 (ending in September) and fiscal 2008 would bring the total to $746 billion. By contrast, my original column put the cost of an Iraq war at up to $80 billion. That was based on the cost then of the war in Afghanistan ($10 billion), the cost of the Persian Gulf War ($61 billion) and the expectation that another invasion would involve fewer troops (it did). As to the future, the CBO has created two "illustrative scenarios" -- one involving a troop reduction to 30,000 by 2010, the other a reduction to 75,000 by 2013. In both, troop levels would then remain unchanged until 2017. By CBO estimates, the scenarios would involve extra spending from 2009 to 2017 of $269 billion and $696 billion, respectively. Finally, the war has created costs that, though they don't appear in accounts labeled "Iraq," are properly attributed to Iraq. Trucks, helicopters and tanks are wearing out at faster rates; Veterans' disability benefits and health costs are increasing. Already, 14 million US troops have served in Iraq and Afghanistan, says Linda Bilmes, a Harvard budget expert. Since the Persian Gulf War, almost 40 percent of veterans have received disability benefits, she says. She estimates the present value of future disability and health benefits at $300 billion to $600 billion. The war on terrorism has clearly worsened the long-term budget outlook. Dominated by Social Security and health care, the federal budget now totals nearly $3 trillion annually. Suppose the war's ultimate costs reach $2 trillion by 2017 (the figure is cumulative, not in any one year). Still, the CBO estimates all federal spending over the same period (2002-17) will total $48 trillion; In the same period, the income of the US economy (gross domestic product) would total an estimated $248 trillion; The point, as I said in 2002, is that we're so wealthy we "can wage war almost with pocket change." With hindsight, it seems almost incontestable that the Iraq war should never have been fought. It has eroded our global power, weakened our military and resulted in thousands of American and Iraqi deaths. What I most regret about my earlier column is that it seemed to bless a war, when I was mainly trying to focus attention on questions more important than money. Given the headline (I wrote it) and the fact that those questions came at the end of the column ("Is this war justifiable? In truth, I was uncertain about the war then, just as I'm unsure of what to do now. But I am certain -- now as then -- that budget consequences should occupy a minor spot in our debates. it's simply that they're overshadowed by other considerations that are so much more important. If we decide to do less because that's the most sensible policy, we shouldn't delude ourselves that any "savings" will rescue us from our long-term budget predicament, which involves the huge costs of federal retirement programs. Just because the war is unpopular doesn't mean it's the source of all our problems. Top 35 Most Viewed Post a Comment Comments: (Limit 5,000 characters) Post Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. |
| www.nationalreview.com/nrof_bartlett/bartlett200504280951.asp April 28, 2005, 9:51 am Long-Term Vision Social Security and Medicare are dangerous giants in the making. A key reason why we have a problem with entitlement programs like Social Security is that they were enacted with insufficient regard to their long-term finances. For example, the only concern Congress had about the recently enacted Medicare drug benefit was whether or not it would cost less than $400 billion in the first 10 years. The period afterward was almost completely ignored in congressional debate. This myopia makes it too easy to enact new programs that cost little in the short run but are massively expensive in the long run. In the case of the drug benefit, the costs in the first 2 years are virtually nil. It is only in the last years of the initial forecast period that the long-term spending-trend becomes visible. The prose may be impenetrable, but it makes for interesting reading if one knows where to look. Last year, the actuaries, who actually write the reports of the trustees, made an important methodological change. Historically, they had presented financial data for 75 years out. But some of the trustees felt that it would be more informative if perpetual costs could be summarized in present-value terms. As bad as this news is, it pales in comparison to Medicares problems. The comparable number for Medicare is 71 percent -- about what is raised by the individual income tax. And remember that these figures are for the unfunded portion of these programs, so they are over and above payroll taxes. The chilling conclusion is that virtually 100 percent of all federal taxes, on a present-value basis, do nothing but pay for Social Security and Medicare. Unless there are plans to abolish the rest of the federal government, large tax increases are inevitable. Avoiding such tax increases is the best reason to reform Social Security now. Its too bad that President Bush made the Medicare problem so much worse before trying to fix Social Security. |
| www.signonsandiego.com/uniontrib/20070211/news_lz1e11riedl.html The key feature of President Bush's fiscal year 2008 budget request is not its budget proposals for next year or even its strategy to reach a balanced budget in five years. Rather, it is the focus on entitlements that really matters. Whether the 2012 budget deficit is projected to be $50 billion or $0 is not the most vital issue of America's long-term prosperity. While balancing the budget over the next five years seems like a common sense goal, its real importance lies in setting the stage for addressing the huge long-term fiscal challenges of entitlement spending. The impending retirement of 77 million baby boomers will trigger a $39 trillion tsunami of unfunded entitlement costs over the next 75 years. The good news for the younger Americans who will pick up this tab for retiring baby boomers is that President Bush's budget begins to seriously address this challenge by proposing real reforms that could slice $8 trillion from Medicare's total unfunded liability. These reforms would be a strong first step toward reining in the enormous fiscal burden that current policies would dump on future generations. ADDRESSING MEDICARE'S INSOLVENCY: The challenge posed by long-term entitlements is daunting. If lawmakers instead tried to reduce spending elsewhere in the budget, they would have to eliminate every other program - including all defense, education, homeland security and anti-poverty programs - and that still would not be enough to offset the entitlement programs' costs. And because every year of delay steeply increases the ultimate costs of reform, responsible lawmakers must address this challenge now. STEPHEN CROWLEY / The New York Times Senate Budget Committee Chairman Kent Conrad, D-ND, seated right, meets with panel members last week on Capitol Hill. Under current law, thanks to large subsidies from taxpayers, seniors enrolled in Medicare Part B and Part D typically pay premiums that total about a quarter of the programs' combined costs. Part D is the new drug benefit and Part B mainly covers physician costs for retirees. President Bush has proposed reducing these subsidies for wealthier retirees, which means they would pay more in premiums. It is important that these Medicare reforms do not revoke any benefits that were earned with payroll taxes. Unlike Social Security and Medicare Part A, Part B, and Part D benefits are not "earned" by their recipients' payroll taxes. Rather, they are voluntary health benefits that are overwhelmingly subsidized by today's taxpayers. Currently, Part B subsidies are reduced for seniors with incomes of more than $80,000 a year ($160,000 for married couples), but the Part D drug benefit is not adjusted for income for middle-and upper-income retirees. The president's budget would introduce income-adjusted drug benefit premiums for these seniors and end the indexing of the income level in both parts that triggers a reduction in subsidies. Given the staggering fiscal challenges posed by Medicare, there is no reason to saddle current and future taxpayers with the cost of huge health subsidies for wealthy seniors. Additionally, President Bush has proposed altering the "market basket" of payments for physicians and hospitals. Revising payment formulas means that payments would better reflect the cost and value of services. To be sure, Medicare will still operate under a flawed system of price controls. But until lawmakers introduce real market reforms to Medicare, such as replacing the defined benefit with a defined taxpayer contribution, these adjustments would move Medicare toward solvency. The long-term implications of these proposals are huge and comprise the single most important element of the president's budget proposals. While the budget's short-term savings are modest in Washington terms ($66 billion over five years), they are steps toward serious savings in the future. These savings mean that the long-term Medicare tab being passed to future generations would be cut by one-fourth. Congress should answer the president's call to rein in the entitlements' looming costs, which otherwise pose such a great burden to future generations. Other budget proposals FARM SUBSIDIES: Here, too, the president recognizes the need to rein in spending over the short and long term. The president's budget includes his proposal to reauthorize the farm programs that expire in September. These reforms include some real improvements to the current system. The president would close a loophole that currently allows excessive marketing loan payments. Counter-cyclical payments would be slightly altered to better target low-revenue farmers. Best of all, the president's plan would eliminate subsidies for farmers earning over $200,000 annually. Opponents of the president's proposal will now have to answer whether they believe in continuing a $25 billion farm subsidy system that distributes most spending to corporate farms with household incomes averaging $200,000. Regrettably, while addressing these excesses, the president generally retains the bloated and economically incoherent farm subsidy programs that in 2002 replaced the innovative 1996 "freedom to farm" reforms, which had largely ended market distortions and allowed farmers to make production decisions without government interference. Farm subsidy costs have more than doubled in the past decade, and yet the president would spend only slightly less than in the past farm bill, and likely more than the Congressional Budget Office baseline, on these programs. Anti-free market milk and sugar policies would be only slightly changed. The president's proposal represents a modest step in the right direction. Better still would be a return to freedom to farm policies that would open agricultural markets and rein in long-term spending. Unfortunately, Congress appears ready to write more expensive and inefficient farm legislation such as the 2002 farm bill. DISCRETIONARY SPENDING: Discretionary spending excluding defense and homeland security has leaped by 41 percent since 2001 (22 percent after inflation). These programs' budgets clearly do not need yet another increase. The president claims his budget would provide an increase of just 1 percent to domestic discretionary programs (which excludes not only defense and homeland security, but also international spending). In order to bring the budget under control, any domestic discretionary spending increases should be fully offset by reductions in lower-priority programs. TAX CUT EXTENDERS: The president proposes making permanent the successful 2001 and 2003 tax cuts. By increasing incentives to work, save and invest, reduced tax rates played a key role in the expanding business investment, job growth and the stock market gains that have powered recent years' economic growth. Letting the tax cuts expire - or worse, repealing them - would be a major tax increase for millions of Americans. Raising tax rates would harm families and businesses, and the resulting economic slowdown would minimize any revenue increase. The federal budget's problems do not stem from Americans being under-taxed, but rather from Washington spending too much. In order to prevent one of the largest tax increases in American history, Congress should follow the president's lead by extending the current tax policies. CONCLUSION: The president deserves praise for beginning a long overdue examination of unsustainable entitlement costs. He makes strong proposals that take the first steps to rein in entitlement spending and set the stage for a serious discussion of these unaffordable programs. His budget proposes a credible plan to cut $8 trillion of the $39 trillion in unfunded liabilities. It is now Congress' responsibility to take up this proposal as the first step toward saving future generations from a crushing burden of debt and taxes. Any discussion of this budget must focus on these long-term solutions or it is missing the point. |
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