Could the Tea Party fix the US economy?

[Mormon Red Death]

Solid piece from msn this morning.

Based on current polling, a significant share of Tea Party candidates stand to win their elections or have 50-50 chances: 33 in the House and eight in the Senate. Especially in the Senate, this means the Tea Party's calls for spending cuts and tax relief are likely to gain strength after Nov. 2, forcing the Republican Party to take a harder line on the budget deficit at a time when policymakers are loath to do so.

That's because fixing the government's long-term fiscal health is a no-win scenario for a career politician. Americans are worried about the deficit -- which stood at $1.3 trillion for fiscal 2010, near 60-year highs as a percentage of the economy, because of relief spending, war costs and slumping tax revenue from the weak economy -- but they don't like either of the solutions: spending cuts or tax increases.

While more than 75% of Americans believe the cost of the government's major entitlement programs will create economic problems, according to a recent Gallup survey, just 42% support a tax increase and just 31% support a spending cut.

[happyone]

Good read, thanks for posting

[Color Me Badd Fan]

Solid piece from msn this morning.

Look at what happened in Greece and look at what's happening in France. Greece represents what happens when a country is left with no choice. France represents a country that is farther down the road towards Greece's current financial situation, but is also worse off than the US. France is dealing with riots because they want to raise the retirement age from 60 to 62.

Those numbers indicate to me that people are not willing to solve the long term problems. Although I think some of the Tea Party types may fall on their own swords in an effort to enact meaningful change, I don't think they can pull the GOP along for the ride.

Medicare and Social Security have to be reformed and the reform requires some pain. Historically, children have taken care of their parents when their parents get old. It was part of the old familial/social contract. Grandma comes and lives with kids and grandkids. That doesn't happen much anymore and we expect Grandma to get social security and other benefits. Social Security and Medicare worked fine when the WWII generation had an assload of kids. But the Boomers didn't have an assload of kids. Like with all Ponzi Schemes the music stops and some are left without a chair. Whether we like it or not, it's going to happen and I think it's going to happen at the worst possible time for a significant portion of Boomers (I'm thinking some time around 2030)

[Indy Coug]

It was easier to take care of your parents way back when because they would keel over quicker and when things went wrong, a doctor would show up and shake his head and then leave them in God's hands.

[Jacob]

In answer to the question "Can the Tea Party fix the economy" I respond with a resounding NO! Neither can the republican party, the democratic party or any other party or group. The best we can hope for is that they don't prevent the economy from fixing itself, or rather prevent the people from fixing the economy. In that vein, the principals of the tea party seem superior to me than the current alternatives.

[woot]

It was easier to take care of your parents way back when because they would keel over quicker and when things went wrong, a doctor would show up and shake his head and then leave them in God's hands.

So god is the grim reaper?

[il Padrino Ute]

So god is the grim reaper?

Well, when he calls your number.....

[KillerDog]

It was easier to take care of your parents way back when because they would keel over quicker and when things went wrong, a doctor would show up and shake his head and then leave them in God's hands.

Great point. People live longer and longer but without any plan to provide for themselves and still trying to retire at the same age. It is silly.

[Indy Coug]

So god is the grim reaper?

He's the Alpha and the friggin' Omega, baby!

[Bjorn Turoque]

Absolutely not.

The Tea Partiers won't budge at all on military spending. In fact, they're more prone to increasing it.

They also won't touch entitlements. Nobody will. It's the kiss of political death to even bring it up.

Maybe they'll pressure for some legislation on earmarks, which is a complete waste of time. Earmarks represent something like 2% of the budget.

The American economy is not fixable. Not because it "can't" be fixed, but because our politics will not allow it to be fixed. Should be a fun next 50 years.

[Goatnapper'96]

There are some issues that are going to be fixed in the next 5 years IMO. I see some entitlement reform as well as public employee pension reform, there is enough political clout wrt those issues.

Saying that American's need to really make a candid decision or the issue won't really be solved. Most Americans want entitlement reform, except for the entitlements that impact them. Unitl the greater American society comes to a conclusion that having outflows exceedeth inflows is not good and willingly agree that the adjustments to bring outflows in correspondence with inflows will negatively impact their services or entitlements, I am not sure the problem can be fixed. I see some minor reform but mostly the House trading who the home team is with the Republicans riding into power over deficits and the Democrats taking it back because Republicans want to take away PELL grants or privitize social security. I don't think there is yet a national consensus on what entitlements can be taken away.

[statman]

Medicare and Social Security have to be reformed and the reform requires some pain.

I read an article a few weeks back that argued (it might have been Rep Ryan from Wisconsin? or it could have been something from Mark Steyn) that Social Security really isn't that hard to fix.

The author's argument was that all that it required was limiting growth in SS payments to actual cost of living increases, plus the increase of the age at which you are eligible to collect SS (both the early version and the full version) by 36 - 42 months. He also left open that there mighthave to be some small rate increases necessary, but postulated that the above changes plus withholding rates at a maximum of 8% (employee and employer) would be enough to keep SS alive

Both ideas - limiting SS increases and a single incremental increase in the retirement age - would be wildly unpopular with the AARP crowd, but in the end, if faced with SS insolvency or full SS benefits three years later, the choice is pretty obvious. Assuming we can keep our birthrate above the 2.1 per couple rate, these changes would keep SS solvent indefinitely.

These relatively simple changes don't alter the inherent dishonesty about SS - there is no 'savings.' There is no 'lockbox.' It's not a retirement savings plan or a national pension plan. It's nothing more than tranfer payments from the young to the old .

But Medicare is another issue altogether. There is no easy way out of the medicare hole. The assumptions that created Medicare in the 60's were that people would only be on it for a few years. Now as the largest generational cohort we've ever seen rolls into retirement, it looks like most of them will be on it for 20+ years, and a sizable chunk will be on it for 30+ years. There's no set of numbers that will balance that equation - except of course, simply denying anything resembling expensive medical treatment based on age...

[statman]

They also won't touch entitlements. Nobody will. It's the kiss of political death to even bring it up.

It's 100% certain financial death if they don't touch entitlements.

[Goatnapper'96]

It's 100% certain financial death if they don't touch entitlements.

Political death will come sooner and they will strive to avoid that. Unless American opinion changes and it recognizes the mutual exclusivity of not significantly increasing taxes and continuing with current entitlements nobody will have the political will. I also doubt that without consensus there would be time as the winds of change would shake up Congress within 2 years of any serious move on the subject.

[statman]

Political death will come sooner and they will strive to avoid that. Unless American opinion changes and it recognizes the mutual exclusivity of not significantly increasing taxes and continuing with current entitlements nobody will have the political will. I also doubt that without consensus there would be time as the winds of change would shake up Congress within 2 years of any serious move on the subject.

i agree - my point was that viewing entitlements as "off the table" or "untouchable" or "political suicide" is no longer viable. they are not sustainable. We now HAVE to make changes. The longer we wait, the more painful those changes will be. And watching that pain unfold in Europe will hasten our desire to make changes.

I find it ironic that the progressive's medical suicide pact got passed at roughly the same time that the Europeans' same 'social contracts' all fell apart.

If we REALLY want to be like our European betters, shouldn't we now be backing away from the social safety net and socialized medicine like they all are?