Are the Democrats Really Serious?

In the March 18, 2013 edition of the Wall Street Journal, longtime Democratic party activist, Ted Van Dyk, essentially asks the above question in his op-ed column, “My Unrecognizable Democratic Party” . Mr. Van Dyk gives many examples of the lack of seriousness of the current national Democratic leaders.
One glaring example which he omits is the enormous difference between the recently proposed House Republican budget, which eliminates deficit spending over a ten year period, and the Senate Democratic budget, which makes no such attempt or even expresses any interest in doing so. The proposed Democratic budget actually increases the national debt by $5 trillion over the next ten years and ends the decade with annual deficits of over $500 billion dollars (see my previous post).
We have added $6 trillion in national debt over the past five budget years, 2009 – 2013, and the Democratic Senate proposes to add another $5 trillion over the next 10 years, with no end in site! How irresponsible can you be! How will this enormous new debt ever be paid off? What will happen when the Federal Reserve is forced to raise interest rates to combat the inevitable inflation which will arise from prolonged quantitative easing? When our public debt reaches $20 trillion, which will soon happen under Democratic budgeting, even an interest rate of 5% will require $1 trillion of interest payments per year forever!
It doesn’t take a lot of common sense to understand the painful fate awaiting our country if this scenario plays out. It is no consolation to predict that a conservative revolution will sweep across the country as a reaction to such irresponsible behavior from the Democrats. It would be far better for Democratic leaders to wake up and address our dire fiscal predicament before it gets even worse. Will this happen? Will Democrats heed Mr. Van Dyk’s warning? Let’s hope so!

6 thoughts on “Are the Democrats Really Serious?

  1. It is a lie to say that Republicans have presented a budget that balances in 10 years. Paul Ryan has used clown budgeting that “balances” only through the use of magic asterisks as placeholders for savings. Those asterisks are actually bigger than the actual savings presented in the plan!

    http://www.theatlantic.com/business/archive/2013/03/paul-ryans-tax-math-just-became-more-magical-/273959/

    Only a modern Republican would consider balancing the budget through the use of clown magic as serious.

    The Democrat’s budget does not balance because it is real and serious and therefore would not do something so stupid as to repeat the mistake of 1937 and attempt to balance the budget when the fed is up against the zero bound and unemployment is above 7%. This indicates that they understand both economics and history.

    So when comparing clown magic to thoughtful analysis by intellectuals, your analysis leads you to tell the intellectuals that they need to to wake up and follow the clowns?

    Sorry, but that just Does Not Add Up!

  2. The critics of the House Republican Budget, such as yourself, are missing the bigger and essential point. It’s not about which programs will be cut, or which tax deductions will be reined in, but rather about how we restore fiscal responsibility to the federal government. The Ryan Plan shows that this can be done with the current tax revenue stream, simply by limiting spending growth to 3.4% per year for the next ten years.
    It is also not about assigning blame for how we fell into our current mess because both the Bush and Obama administrations, and their Congressional supporters, share responsibility for this. Regardless of which party, if either, is most to blame, the urgent question right now is what we do going forward to climb out of the deep hole we are in.
    Obviously neither the House Budget nor the Senate Budget will survive and be enacted in its current form. I am simply saying that given our current severe fiscal predicament, the House Plan is a much better “road map” going forward than the Senate Plan.

  3. Jack:

    I find these postings very interesting. What you do not address is the unrealistic Republican budget, in that it rolls back the Affordable Care Act. I doubt that any Democrat will accept that. Are there ways to keep the Act (or most of it) and still balance the budget in 10 years.

    Steve

  4. First of all, I want to emphasize that I am endorsing the goal of the House Plan to balance the budget within ten years, by holding spending increases to 3.4% per year, but not necessarily endorsing all of its details.
    Secondly, Republicans need to think within the framework of Obamacare because it obviously is not going to be repealed while Obama is President, i.e. until 2017, at the earliest, and probably never.
    The real question is what we can do about the cost of healthcare which is increasing far too rapidly. Briefly, Medicaid should be block-granted to the states which are far more capable of controlling costs than the federal government. Medicare, a much tougher problem, should, at a very minimum, be means tested to a much greater extent than it currently is already. In addition, Medicare needs to be shifted from a defined benefit program to a defined contribution program. Sounds too difficult to accomplish? Well, Singapore has figured out how to accomplish this, at an amazingly low overall cost, so let’s adopt their model!
    More generally, the cost of private healthcare needs to be better controlled because it is eating into the prosperity of the middle class by causing wage stagnation. The best single way to address this problem is to repeal the tax exemption for employer provided healthcare (in a revenue neutral way, I immediately add, with individual tax credits) in order to create an incentive for everyone to be cost conscious about health care. See David Goldhill’s new book
    “Catastrophic care: How American Health Care…” for many other ideas on how the free market can help us control the cost of health care.
    What I am most strongly advocating is the urgent need to get the federal budget under control. If the Democrat’s would come to their senses and agree on the severity and urgency of this problem, I believe that many Repulicans would be willing to find ways to increase revenue as well as cutting spending.

    • ” If the Democrat’s would come to their senses and agree on the severity and urgency of this problem, I believe that many Repulicans would be willing to find ways to increase revenue as well as cutting spending.”

      What is your evidence for that?

  5. Primarily because it just makes sense. There are many ways to raise additional tax revenue. The best way, of course, is by growing the economy faster which will also lower the unemployment rate faster. Even revenue neutral tax reform, with lower rates traded off for eliminating tax preferences, will grow the economy faster and therefore increase tax revenue. If Democrats would agree on really significant streamlining and broadening of the tax code, including lower rates, in return for some amount of revenue increase applied to deficit reduction, I’m sure many Republicans would go along. John Boehner agreed to an $800 billion tax increase (over ten years) in August 2011, part of what would have become a “grand bargain”, which was turned down by Obama, after he had initially agreed to it. During the fiscal cliff negotiations in December 2012, Boehner at least informally agreed to a $1200 billion revenue increase via closing loopholes. This was turned down by Obama because he insisted on raising tax rates for a $600 billion revenue increase instead.
    For some reason, which I really can’t fathom, Democrats are simply not serious, since 2009 at least, about fiscal restraint. It is really just plain idiotic to think we can continue kicking the can down the road indefinitely and never have to pay the piper. When the chickens come home to roost, and we have a far more serious fiscal crisis than our recent Great Recession, the can kickers, i.e. the Democrats, are going to be decimated and I don’t want that to happen!

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