Posted on 03/13/2012 6:37:09 AM PDT by SeekAndFind
This is a stunner. In the new book The Escape Artists: How Obama’s Team Fumbled the Recovery, journalist Noam Scheiber uncovers this tantalizing tidbit:
In May 2009, the president asked [White House budget director Peter Orszag] to draft a secret memo laying out the government’s options in the event of a fiscal crisis, in which a runaway deficit sent interest rates spiraling upward. No other member of the Obama economic team was even aware of the assignment.
OK, let’s take this step by step:
1. The Obama administration has already conceded it has no long-term plan to deal with rising U.S. debt, driven for the most part by social insurance spending. Testifying before the House Budget Committee recently, Treasury Secretary Tim Geithner told Chairman Paul Ryan the following: “We’re not coming before you to say we have a definitive solution to that long-term problem. What we do know is we don’t like yours.” Even Obama’s ten-year plan doesn’t keep the debt burden from increasing.
2. Yet, apparently, the White House does have a secret plan to deal with a sudden debt crisis. So instead of developing a long-term plan to avoid the worst-case scenario, it has chosen to plan for the worst-case scenario. (This will certainly be a shock to liberal economists like Paul Krugman and Brad DeLong who insist a debt crisis, as evidenced by the current low level of interest rates, is highly unlikely. In fact, they say, we should be borrowing more to boost the economy.)
3. Then there’s this possibility: Maybe the crisis plan is the long-term plan. Maybe it’s something like this: a) do nothing; b) keep implementing the Obama healthcare and environmental agenda; c) wait for markets to finally freak out over rising U.S. debt; d) break the glass and grab the 2009 Orszag plan.
4. And what exactly is in the Orszag memo? Well, as they say in Washington, personnel is policy. Here’s what we know about Orszag, who now works for Citigroup. He thinks America is undertaxed. Elsewhere in Escape Artists, Scheiber writes that “[Orszag] believed the only practical way to balance the budget was to repeal all the Bush tax cuts, not just the upper-income variety.” That is a $4.5 trillion tax hike right off the bat.
And here is Orszag just last month:
… to significantly reduce the deficit over the next decade, additional revenue will be needed. The administration’s budget proposal projects revenue to reach 20 percent of gross domestic product by 2022, about 1 percentage point of GDP more than what is projected with no policy change. The administration deserves credit for proposing even that, given the antipathy to any tax increases. But in the end more revenue will be needed. And since the administration’s budget probably shows the outer limit of what’s plausible in terms of taxing high-income households, the implication is that middle-income households will have to pay more, too.
And how to best tax the middle class? Like most left-of-center economists, Orszag loves the idea of a VAT:
Although hardly anyone wants to admit it, we’re not going to solve our budget problem over the next decade unless revenue is part of the equation. … One possibility would be to establish a new source of revenue, perhaps through revenue-increasing tax reform, and possibly including a modest value-added tax (that is, a V.A.T. of 5 percent to 6 percent). This approach has many potential benefits, including the opportunity to improve our tax code by cutting back on loopholes and shifting toward a consumption-based tax system.
So I think it’s reasonable to assume that the secret Obama-Orszag memo contains some options on massively raising taxes to send markets a signal that the United States is getting its fiscal house in order, ASAP.
Orszag, when he worked for Obama, was also the guy behind the creation of Obamacare’s Independent Medicare Payment Advisory Board. Starting in 2015, IPAB will have the power to making binding recommendations to cut Medicare provider payments if Medicare costs rise too quickly. As Orszag has put it: “This could well turn out to be as consequential for health policy as Federal Reserve policy was for monetary policy. The commission will put its proposals forward and if Congress does not act on them, or if it votes them down and the president then vetoes that bill, they will automatically take effect. Huge change.”
So perhaps the plan recommends giving the powerful IPAB technocrats even more power, not to just limit Medicare spending, but all healthcare spending in the age of Obamacare, public and private. In effect, use IPAB to fully nationalize U.S. healthcare and then ration care, as they do in the U.K., to reduce spending.
But again, this is all just speculation. Mr. President, how are you going to deal with a debt crisis? What’s in the Orszag memo?
You beat me. I was just going to post this!
(MORE of Obama’s agenda...)
Raise Taxes, Borrow More, and then Apologize.
Sounds like a winner.
The plan is simple.
Go to the ChiCom leadership and Saudi Royal Family and paint a vivid picture of what life will be like for them 30 days after their best customer maxes out their credit card.
With that gun to their head they will have no choice but to sign on to the Big Lie and stumble on.
Confiscation of all private property and bank/investment accounts ought to solve all the federal government’s fiscal difficulties.
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How can we demagogue it to get our way?
Wonderful.
Sounds like a winner.
Democrats have been doing it successfully for the past 80 years. Why stop now?
Sign over all government owned land to China? This guy never has a plan and is never at fault.
They want a crisis so they can take control and seize our rights.
Remember the goal of our ‘contemporary Democrats’ had been to march us into a Collective society (even better if it is worldwide).
Keep that in mind and current trend/affairs make a lot more sense that way.
Funny how un-secret the zero’s secrets are.
Run ZERO off and back to Kenya.
Then watch the economy take off. . . . .
Let me just say that I’m against ANY tax increases. Spending decreases must be considered but (of course) are not part of “The Plan”.
That being said, I think any tax increases has to targeted at the 50% of the population who currently pay Jack Squat. We all need to have skin in the game.
“The administration’s budget proposal projects revenue to reach 20 percent of gross domestic product by 2022, about 1 percentage point of GDP more than what is projected with no policy change. The administration deserves credit for proposing even that, given the antipathy to any tax increases. But in the end more revenue will be needed.”
Aye, there’s the rub.
Tax revenue NEVER exceeds 20% of GDP.
Try taking more than 20% out of GDP, and people either get more creative in tax avoidance or just stop working outright.
At 20%, Atlas shrugs.
I think we are beyond the point where we can just say “The Democrats did this...”
If we want an honest solution to the problem, if such a thing even exists, we need to fess up to the fact that pubbies spend and go along with increasing the debt limit.
Just NOT AS MUCH as the dims.
Obama and his cronies in Congress don’t seem to understand that we have a spending problem NOT a revenue problem. Liberals always want to tax and then spend more. The economy is already reeling with gas prices continuing to rise thanks to Obama, so adding new taxes will just push us over the edge. Obama won’t rest until the US is in a new Great Depression with half the country standing in government bread lines.
Yeah, what could possibly go wrong?
Now we know why HR347 was made.
It makes it illegal to protest the President over crap like this.
I've been waiting for the dems to make a move in that direction ever since.
Driving the price of fuel up they way they are I think is all part of the plan to seize the mineral wealth from the owners.
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