Mr. Obama has today delivered a plan to cut the debt by, according to him, $3 Trillion Dollars. His usual guideline is "I want to spend trillions now, someone else can make the hard choices to repay that debt later," so the timing of implementation of all these alleged debt reduction strategies is not clear for all the items he has proposed.
In broad outline, the plan appears to be:
$1.1 Trillion in savings from the ending of the wars in Afghanistan and Iraq. The wars are over, then? You could say the wars are over if stable governance has been achieved, but it hasn't. This appears to be a callous political device to claim credit for ending the wars. Obama hopes to claim victory during his term of office by drawing down the troop count and hoping violence doesn't blow up in those countries prior to the election. Also, it's not really a proper part of a debt reduction plan; wars are not really part of the normal cycle of taxation and spending. Wilson and Truman at the end of WWI and WWII did not claim they had "discovered" how to reduce the deficit. It is only a phony political ploy, nothing more than an illusion - another case of Obama claiming unearned credit.
$430 Billion in savings- from all of his debt reduction proposals! Another illusion. Yes, you do save money if the debt is reduced, but that really isn't a proposal on how to reduce actual debt.
At this point, it's clear that about half of the debt reduction program is an accounting illusion. These aren't debt reduction programs, merely consequences of other events that, if they occur, also happen to save money. That's not quite true of the rest of his proposal.
$580 Billion in spending cuts to Medicare, Medicaid and other health programs. That is in addition to and above the $638 Billion being cut from these programs under Obamacare. Fortunately for the senior population, these small (trillion dollar) cuts are being enacted by compassionate liberal Democrats, so the cuts will undoubtedly not be felt - or at least, won't be reported by the media.
$1.5 Trillion in new taxes. The White House says that proposal is different than the proposals they made during the debt-ceiling talks. Perhaps it is, but the only tangible difference is that Obama is asking for a greater tax increase now than the trillion dollar tax hike he asked for in those talks, or the trillion dollar tax hike he sought in his Feb. 2009 budget proposal. The plan is to let the Bush tax cuts expire, and to raise taxes on "millionaires." There is nothing new in any of this. While the "Buffet rule" of requiring a minimum tax rate on all income, whether earned or unearned, is appealing, there is a counterbalancing concern of capital flight from the U.S. If the tax rate in the U.S. suddenly goes up, millionaires will simply take their money and leave, just as they have fled California. The same is true of corporations. After making record profits, they are holding on to that money while they watch the tax and regulatory environment. If they see those costs increasing substantially, they will offshore more facilities and more jobs. As Obama once said, it's a bad idea to raise taxes in a recession. http://redwhitebluenews.com/?p=21224
No wonder Republicans are attacking this "new plan" as nothing but a tax increase wrapped in talk about debt reduction. Aside from doubling down the cuts on seniors' health care programs, there is nothing but taxation in this proposal. With Obama's record of spending, is anyone gullible enough to believe that a trillion dollars in his hands would be used to pay down debt, anyway?
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