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The "Gang of Six" Plan Isn't Worth the Paper It's Printed On
http://libertarian-neocon.blogspot.com/2011/07/gang-of-six-plan-isnt-worth-paper-its.html ^ | libertarian neocon

Posted on 07/19/2011 3:13:59 PM PDT by libertarian neocon

There has been quite a hullabaloo over the "Gang of Six" plan that was just announced today with even Obama calling it "good news".  Unfortunately, it's a complete waste of time.  First, it's a little bit unclear how much all six of the "Gang of Six" is actually behind the plan as Tom Coburn, supposedly one of the six, just released a budget proposal that cuts $9 trillion from the deficit in 10 years, compared to the plan's paltry $3.7 trillion.  Second, it will have no impact on the current debt limit talks as it is pretty much nothing but an outline, as Dick Durbin admitted.  Third, it is so back-end loaded that I don't see how it gets through the House (it also has to start in the House because it raises taxes).  Supposedly it is in two parts, a $500 billion down payment of "immediate cuts" (in Congressional terms, "immediate" means 10 years) with "comprehensive" reform coming later.  $500 billion averages out to $50 billion a year.  Considering we will have a $1.6 trillion deficit this year according to the White House, this is a paltry sum, about 3%.  That pretty much puts this down payment in sub-prime land.  And fourth, it's not a very good plan at all. Now, let's take a look at the "immediate" section of the plan:

Do you see any actual cuts there?  Any at all?  For every dollar we are taking in, we are spending $1.50 and all these guys can come up with are caps on spending and changing the way CPI is calculated (which might not even reduce the deficit if inflation is higher than current estimates)?  This is such a non-serious festering turd of a cost cutting plan.

And now let's go to the "comprehensive" section of the plan which begins with:

So all they have to do is "report legislation"?  Boy that's reassuring.  I'm sure that in six months, when we are in the middle of a Presidential election year, there is no way this legislation will get bogged down.  Anyway, there is more:

So we are going to have $500 billion in "health savings" without impacting services.  And how pray tell are they expecting to do that, especially after Obamacare just cut a similar amount from the program?  If they can't cut services won't that mean they will have to cut payments to physicians and hospitals?  That will have two impacts, first, even more doctors will stop accepting medicare patients as it's just not economical.  Second, the losses hospitals face on their medicare patients will be made up by charging more to those of us with private insurance.  Brilliant!  That's just what we need, higher premiums.  Higher premiums means a higher cost to employ someone and will mean fewer jobs.  No wonder our economy is in shambles, our politicians have not yet learned that if they meddle in one area, other areas are also affected.  Now here comes a nice amorphous goal that could have far-reaching implications:

Basically that means that the middle class gets screwed as they are the ones who benefit most from these "tax expenditures" (a term which I hate because it seems to assume that everyone's income actually belongs to the government).  I love how the government is making insurance premiums balloon thanks to Obamacare regulations and medicare cuts and then wants to tax me on those premiums.  How does that make any sense?  Do I get the premiums?  Don't the premiums effectively reduce my salary?  Why should I have to pay taxes on money I never see for healthcare that other people get for free from the government.  How is that fair in any way, shape or form? 

I also don't understand the need to "reform" charitable giving deductions.  Isn't giving to charity a good thing?  Does the government really think it has better use for that money?  That it somehow is more efficient?  Don't make me laugh. 

On the mortgage interest deduction, I do understand that it is a big line item but reforming it or getting rid of part of it isn't the answer.  Mortgage interest has been deductible since the first federal income tax law in 1913.  Over the course of the last almost 100 years, it's made houses at the same price point more affordable than they would otherwise be, hence acting as a tailwind on housing prices.  Basically, because buyers could afford to pay more, sellers have generally sold their houses for more.  So I don't think any of us today are actually been benefiting from it the way we think we have.  If it were never enacted, real estate prices would be lower across the board, probably putting your monthly payment around where it is now, with the deduction.  So the house you might have paid $400,000 for, would actually have been $300,000 without the deduction.  So while we probably have not benefited from it, cutting it would have a disastrous impact.  Housing prices would immediately take a hit as they would become less affordable.  This would send many homeowners underwater or further underwater, making any sort of refinancing impossible.  Also, banks still have quite a bit of mortgage debt on their books, so any change in the mortgage interest deduction would have an immediate impact on banks and would probably cause ANOTHER banking crisis.  Seriously, it's amazing how these politicians don't think things through.  Now on to the next and final "reform" that I want to comment on:

Say what?  We are already the most progressive system in the world and now they want to make it more progressive.  According to the Tax Foundation, nobody leans on the top 10% of earners like we do.  Not France, not Germany, not even Italy.  Plus, 47% of Americans pay no federal income tax (which is why you have so many Democrats opposing tax cuts, because they know their constituents won't get any benefit).  If anything we need to make it less progressive, making everyone a true stakeholder in what happens with the budget.  If you pay no taxes, you have an incentive to be in favor of the most spending as possible because you personally won't need to pay for it.  A less progressive system, I think, will lead to a more responsible government.

As you can see, the plan is a completely idiotic monstrosity that probably will end up doing more harm than good.  Luckily, it's only an outline at this point and has just about zero chance of going anywhere (hopefully).


TOPICS: Business/Economy; Government; Politics
KEYWORDS: budget; deficit; obama; obamacare

1 posted on 07/19/2011 3:14:04 PM PDT by libertarian neocon
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To: libertarian neocon

Anyone who supports this huge $3 trillion tax grab “plan”, and that includes anyone posting on this site, is not a conservative.

Coburn, Chambliss, Crapo and Alexander are all now unmasked as big taxers for the Momma State.


2 posted on 07/19/2011 3:20:34 PM PDT by LowTaxesEqualsProsperity
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To: libertarian neocon

One thing that NOBODY has seen, is the “plan” being offered by the current occupant of the Oval Office.

When Mayor Daley of Chicago (the original fat-potato, Dick, not Junior) wanted to scourge somebody, he would ask, no, DEMAND, “Where’s your plan?”

It is a truism that you cannot beat something with nothing.


3 posted on 07/19/2011 3:25:01 PM PDT by alloysteel ("Devastate your rivals, take no prisoners, smash mouths, glare meaningfully.")
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To: libertarian neocon

Gang of What???


4 posted on 07/19/2011 3:32:45 PM PDT by Herbster
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To: libertarian neocon

They need to be called the “Gang of Sellouts”.


5 posted on 07/19/2011 3:33:58 PM PDT by Ballygrl
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To: LowTaxesEqualsProsperity

I’m wondering how many times Obama is going to count that $500 billion cut he has already counted twice, in cuts to medicare? I think he’s going for number three...


6 posted on 07/19/2011 3:35:41 PM PDT by Freddd (NoPA ngineers.)
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To: alloysteel

Obama plan “tax tax tax spend spend spend”


7 posted on 07/19/2011 3:44:34 PM PDT by cableguymn
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To: libertarian neocon

The plan will attack tax breaks for mortgage deductions.

Yeah, that’ll really help the middle class and the real estate market.


8 posted on 07/19/2011 4:06:52 PM PDT by sbMKE
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To: libertarian neocon

“Gang” and Dick Turbin. Sounds about right.


9 posted on 07/19/2011 4:40:26 PM PDT by radioone (How Can an Obscure Guy Who Did Diddly Squat in the Senate Become President?)
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To: radioone

I guess each Senator got a page, 6 pages will solve our Debt problem.


10 posted on 07/19/2011 4:50:22 PM PDT by scooby321
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11 posted on 07/19/2011 5:14:19 PM PDT by DeoVindiceSicSemperTyrannis (Want to make $$$? It's easy! Use FR as a platform to pimp your blog for hits!!!)
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To: libertarian neocon

“$50 billion a year”

Obama is giving more than that to the Palestine Authority, which probably run by Hamas now.


12 posted on 07/20/2011 10:59:30 AM PDT by Sun (Pray that God sends us good leaders. Please say a prayer now.)
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To: Sun

Well he isn’t giving that much to the Palestinian Authority but any amount is still too much. Why are we rewarding terrorism again?


13 posted on 07/21/2011 8:22:50 AM PDT by libertarian neocon
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To: libertarian neocon

“Why are we rewarding terrorism again?”

Good question.

Besides the Palestinian Authority, Obama gives to other terrorist countries. Instead of threatening seniors, and military personnel, why doesn’t he tell our enemy countries, not to mention Planned Parenthood, and his other pet organizations, that they might not get THEIR tax dollars (stolen from the American people).

At least seniors paid into the system, and they are good Americans.


14 posted on 07/21/2011 9:46:45 PM PDT by Sun (Pray that God sends us good leaders. Please say a prayer now.)
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To: Sun

He should probably also tell the IMF that we won’t be paying $20 billion to bailout Greece, an amount we are now on the hook for after the latest Greek bailout. Why are we mortgaging our future so Greeks can retire at 50?


15 posted on 07/22/2011 6:12:36 AM PDT by libertarian neocon
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