Is the American economy producing enough?
Time to take ownership
Ownership for the present state of the economy begins with We the People who elected George W. Bush and the Congress that went along with his policies to 1) start wars we could not afford, 2) give tax breaks to those who didn’t need it. Furthermore, the Clinton affordable housing policies and banking regulation policies triggered an economic calamity.
Now, President Obama is handling the mess.
There are essential questions about the viability of the US economy as we know it. The essence of capitalism and ever expanding markets may not be viable. We must recalibrate to a sustainable economy that also produces sufficiently to pay down our obligations.
Transforming the nation from oil dependence to renewable energy alone should inspire vision and invention to propel a new economy.
I read an article yesterday challenging the viability of the economy in the UK because the people demanding assistance has outstripped the people producing the revenue. America is in the same boat.
“Obama budget: National debt will be $1 trillion higher in a decade than forecast
By Lori Montgomery, Published: February 13
President Obama rolled out an election-year budget on Monday that would delay action to reduce the national debt in favor of fresh spending on Democratic priorities aimed at rebuilding the American middle class.
In his final budget request before facing voters in November, Obama called for $350 billion in new stimulus to maintain lower payroll taxes, bolster domestic manufacturing, lure jobs back from overseas, hire teachers, retrain workers and fix the nation’s crumbling infrastructure. There would be only modest trims to federal health-care programs and no changes to Social Security, the biggest drivers of future borrowing, despite last year’s raucous political debate over the federal debt.
Ezra Klein FEB 13
WONKBOOK | Like the 2012 budget, the 2013 budget has no chance of being adopted by Congress.
Comparing their fiscal promises isn’t quite comparing apples to apples. Obama is burdened with the responsibilities of governance. His numbers need to add up.
A look at domestic discretionary spending in a post-debt-ceiling world.
Sarah Halzack FEB 13
Here is President Obama’s budget request — all 256 pages of it. Tell us what you think about it.
Instead, Obama would reduce deficits by raising taxes by nearly $2 trillion over the next decade on corporations and the wealthy, in part by letting expire George W. Bush-era tax cuts on household income over $250,000 a year.
And the president is encouraging lawmakers to rewrite the tax code to eliminate the alternative minimum tax, which strikes many middle-class families, while requiring millionaires to pay at least 30 percent of their annual income to the Internal Revenue Service.
The $3.8 trillion spending request for fiscal 2013 would limit agency budgets according to limits agreed to during last year’s budget battles, forcing belt-tightening at the Pentagon and the lowest spending on domestic agencies as a percentage of the economy in at least a decade.
Obama said his proposal would save at least $4 trillion over the next 10 years and stabilize government borrowing. But Republicans blasted the budget as insufficient, with Senate Minority Leader Mitch McConnell (Ky.) deriding it as “a campaign document.”
Despite the savings, budget deficits would be markedly higher than they would under a debt-reduction plan Obama submitted to Congress in September, staying well above $600 billion a year for most of the next decade. The portion of the debt held by outside investors would climb to $18.7 trillion by 2021, or 76.5 percent of the overall economy — twice the size of the debt before the recession hit in 2007 and $1 trillion higher than the president’s September forecast.
Administration officials blamed that increase in large part on gloomier economic projections, which tend to depress tax collections, increase government spending and drive up deficits. Since the budget was prepared, job growth has proved stronger than expected, officials said, adding that the picture would look brighter today.
But White House economic adviser Gene Sperling said the administration added “our aspirations” to the $3.8 trillion request. New initiatives would increase 10-year deficit projections by about $350 billion. They include an extra $125 billion for road and rail projects, as well as permanently extending tax breaks that provide families up to $10,000 for college tuition and reward businesses for doing research in the United States.
In an unusually partisan budget message to Congress, Obama wrote that “reining in our deficits is not an end in itself” but “a necessary step to rebuilding a strong foundation so our economy can grow and create good jobs.” Drawing a sharp contrast with his Republican opponents, Obama said his approach “rejects the ‘you’re on your own’ economics that have led to a widening gap between the richest and poorest Americans.””