Thursday, April 14, 2011

What Obama's Nasty Budget Speech Really Means

Like many thoughtful Americans, SWNID didn't care for BHO's paean to higher taxes, delivered yesterday. If the immoderately moderate Clive Crook can call it "a waste of breath," it hardly deserves comment for its contribution to policy.

But one can understand easily its contribution to electoral politics. Obama's move to the center since November has been greeted by his political base with frustration and even anger. Poll numbers show that the most dependable Democratic voters are not as inclined to feel hope-y and change-y as they were in 2008. Their man is not as messianic as they'd hoped, not the True Believer in the Cause that they believed they'd finally brought to permanent power.

This speech was aimed squarely at restoring the base's confidence. Obama, Plouffe and Company are smart enough to know that the super-rich don't have enough wealth to tax the budget back into balance. They know that no matter what you do to the tax code, you can't squeeze more than about 19% of GDP from the citizens' bank accounts. They know that the problem is not revenue but spending. They can read the numbers as well as the rest of us.

But they know that their best--and probably only--ticket to re-election is class warfare. Ignoring questions of what happens macro-economically when the government takes a bigger chunk out of the economy, ignoring the historic truth that reducing tax rates tends to increase tax revenue, they play the "fairness" card to stir up the impressionable masses--those who without such stirring up cling to their guns and religion--to vote against the fat cats and for the patrons of the middle class.

So never mind that means testing some federal entitlements would actually de-fund welfare for the rich. Thou shalt not turn Medicare into a sliding-scale subsidy for private insurance, even though presently it's only poor seniors who don't supplement Medicare's torpid benefits with supplemental insurance. Thou shalt not even discuss Social Security, even though without means testing it's nothing more than a transfer of wealth from young, less-well-off workers to older, more-well off former workers.

Three years out, it's still all George W. Bush's fault, which is why BHO in the end supported extending the so-called Bush tax cuts, we suppose.

But this is all that Jackson's party has to give to its base. With a bankrupt ideology and a bankrupt fisc, you tell the fairy tale one more time.

By the way, judging by the enthusiasm that this speech without substance has elicited from the most dependably partisan of Democratic pundits, it probably succeeded in doing what it aimed to do.


Dr. Love said...

Best part of the speech, "Democrats have an obligation to prove that entitlement programs work." Ya? Good luck.

Dr. Love said...

Also, "The Republicans' plan will kill Medicare as we know it." Is there anyone in the country who is opposed to that?

Jon A. Alfred E. Michael J. Wile E. SWNID said...

After eighty years, the Democrats need more time. Let's give them a fair shake.

What really irks us about the Medicare discussion is that Medicare covers so little to begin with. The only people who don't carry supplemental insurance with Medicare are the very rich who don't worry about paying out of pocket and the very poor who can't afford even a basic Medi-gap policy. So the shift to Ryan's plan is a matter of degree, not kind, and offers the prospect of downward pressure on prices as people have incentives to get a better deal. Saying that Americans like Medicare is like saying they like the Post Office. They use it, but they don't like it, and they worry that whatever else the government would do would simply be worse.

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