John Nichols in The Nation:

Warren Buffett explained the secret to addressing the challenges facing the United States during President Obama’s first term. In a short commentary written for The New York Times—headline: “Stop Coddling the Super-Rich”—Buffett explained, “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”

President Obama was relatively cautious about taking Buffett’s advice.

Until now.

With an eye toward addressing income inequality, the president will use his State of the Union Address to propose new taxes and fees on very rich people and very big banks. In any historical context, the tax hikes and fees are “modest,” but after a period of absurd austerity and slow-growth economics, Obama’s move is as important as it is necessary.

At a point when there is broadening recognition of the social and economic perils posed by income inequaliy, the president is talking about taking simple steps in the right direction. Congress is unlikely go along with him, but the American people will—Gallup polling finds that 67 percent of likely voters are dissatified with income and wealth distrution in the United States. And as this country prepares for the critical presidential and congressional elections of 2016, the president’s clarifying of the terms of debate on taxes becomes vital.

What utter nonsense. You can’t get out of our deficit problems by taxing the rich. As I said in 2011:

[O]ne of the points I have been making lately is that higher taxes on the rich cannot possibly balance the budget no matter how confiscatory they are. You could return to 2000 levels for incomes over $200,000, raise the top rate to 50% for those making $500,000, 60% for those making over $5 million, and a sky-high 70% for those making over $10 million, and you know what you would raise? An extra $133 billion per year, in a budget whose deficits are more than 10 times that amount.

I have also made the point that increases in taxes, even giant ones, don’t do much to increase revenue:

[W]hether the top tax rate is 90% as it was in 1960, or 30-40% as it’s been since 1990, federal revenue is always 15-20% of GDP:

Source

The whole “income inequality” canard has been addressed here before. Our Savior Mitt Romney thinks its a problem, as I noted here. But it’s not. The free market is the best thing that ever happened to poor people, which is in large part a testament to the consumer surplus. Interfere with the workings of the free market, and you approach communism: that wonderful state where everyone is the same, namely, equally poor. (In actuality, not everyone is the same; party members get special treatment and black markets flourish. But never mind all that!) As Margaret Thatcher said (and I noted in this post): “What the honorable member is saying, is that he would rather the poor were poorer, provided the rich were less rich. . . . Yes, he would rather have the poor poorer, provided the rich were less rich.”

That’s what Obama wants. Never mind that the free market is the best thing in the world for poor people. He wants to end it, and he’ll bend the rules to do so.

P.S. I’ve been reading lately about the fall of the Roman Republic, and it seems eerily reminiscent of Obama’s actions lately. But that’s another post.

We can’t get rid of this guy quick enough.

UPDATE: Since some people don’t get it yet, let me quote this post of mine from 2013 (already linked above):

First, even confiscating all millionaires’ taxable income would not close the gap. It’s difficult to find recent statistics for these numbers, but in posts I wrote in April 2011 I quoted people who had examined IRS statistics and found that in 2008, “Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion.” To get that $1.3 trillion you can’t close the gap by taxing rich people. You could confiscate all the income of people with taxable income over $1 million and it would not close the gap by half.

Of course, that assumes that people with a 100% tax rate would happily continue to work just as hard as they had when they got to keep some of their money. If you believe that, you’re an idiot.

We’ve said this before but we’ll say it again: when they say “cut” you have to ask: from what baseline?

The Department of Transportation’s budget for 2013 is $74.2 billion. The automatic spending cuts would slice $1 billion out of its budget: that is a cut of less than 1.4 percent.

And consider this: even if the cuts go into effect, the Department of Transportation will spend more money this year ($73.2 billion) than it spent last year ($72.6 billion).

A $600 million increase is termed a $1 billion “cut” and they’re talking about sending air traffic controllers home. I call B.S.

Operate on the budget you operated under last year. Let’s START with that.

John Boehner in the Wall Street Journal:

A week from now, a dramatic new federal policy is set to go into effect that threatens U.S. national security, thousands of jobs and more. In a bit of irony, President Obama stood Tuesday with first responders who could lose their jobs if the policy goes into effect. Most Americans are just hearing about this Washington creation for the first time: the sequester. What they might not realize from Mr. Obama’s statements is that it is a product of the president’s own failed leadership.

The sequester is a wave of deep spending cuts scheduled to hit on March 1. Unless Congress acts, $85 billion in across-the-board cuts will occur this year, with another $1.1 trillion coming over the next decade. There is nothing wrong with cutting spending that much—we should be cutting even more—but the sequester is an ugly and dangerous way to do it.

Cry me a river. It’s a drop in the bucket. Boehner has a point that entitlement spending is not touched by the sequester. So call for entitlements to be cut too. But stop talking about how a relatively piddling set of budget cuts is so awful and dangerous. When you tighten the belt, you feel the squeeze, son.

Boehner does have one good point:

The president got his higher taxes—$600 billion from higher earners, with no spending cuts—at the end of 2012. He also got higher taxes via ObamaCare. Meanwhile, no one should be talking about raising taxes when the government is still paying people to play videogames, giving folks free cellphones, and buying $47,000 cigarette-smoking machines.

The GOP keeps allowing this charlatan Obama to talk about “balance” when 1) they already gave him the tax part of the “balance” and 2) the problem is spending, not taxes. As I wrote last month:

Can’t we just tax the rich? No, for two reasons.

First, even confiscating all millionaires’ taxable income would not close the gap. It’s difficult to find recent statistics for these numbers, but in posts I wrote in April 2011 I quoted people who had examined IRS statistics and found that in 2008, “Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion.” To get that $1.3 trillion you can’t close the gap by taxing rich people. You could confiscate all the income of people with taxable income over $1 million and it would not close the gap by half.

But there’s another problem: it wouldn’t work that well anyway. As I illustrated yesterday, we have had top marginal rates as high as 91% and as low as 28%, and we still get about 18% of GDP in revenues every year, regardless. Extremely rich people change their behavior when you start to confiscate all their money.

We haven’t even addressed paying off almost $17 trillion in debt.

It’s as if you had a large mountain of sand and a small bucket of dirt to haul away, and when you said we should start getting on moving that sand, some yutz starts insisting on a balanced approach: one teaspoon of dirt to be removed for each teaspoon of sand.

Yet Obama continues to play the game of demanding more taxes, more taxes, more taxes, as if that will fix everything. Sweetness and Light notes that Obama vowed in 2011 to veto any effort to undo the sequester — unless Republicans raised taxes on the rich. Which they did, recently. Which they need to keep reminding the public.

We already agreed to move the dirt. Now let’s get to work on the real problem. And Boehner, stop treating the sequester as if it’s this awful and unthinkable set of cuts. You’re part of the problem.

Every so often I get into a discussion with someone on the left about the budget, and I find time and again that they seem to think that Social Security and Medicare are not such a big problem — or that the problem they pose can be easily fixed through a small tax increase.

I attempted to address that issue in this post, which embedded this very helpful video:

But I should know by now that, just like readers often don’t click the links, they don’t always watch the videos either.

So I’m going to take the key facts and bring them to the fore, in print, so I will have a post I can refer back to in the future when this issue comes up.

What I am about to post is fairly dense but I think I have made it clear. The bottom line is that, just to balance the budget in 2012, we would have had to raise taxes on everyone 50%. You can’t do it by taxing the rich only, either, because historically even 90% rates don’t bring in more than 18% of GDP, and we are spending 24-25% of GDP. Even if rich people didn’t modify their behavior, there isn’t enough taxable income from the rich to close the gap.

Here are the details:

This is from the President’s 2013 budget, downloadable as a 4.6 MB .pdf here. At page 210, you have the following outlays:

As you can see, what we call “discretionary programs” was $1.3 trillion in 2012. This is basically the entire federal government: Defense, Education, State, Justice, and so forth.

Then we have what we call “non-discretionary programs,” which are Social Security (including SSI), Medicare, Medicaid, unemployment insurance, and TARP (which is comparatively very small). That totaled $2.25 trillion in 2012.

Interest on all this was $225 billion. Add it all up and the total outlays are a hair shy of $3.8 trillion.

Got that?

Discretionary = $1.3T
Nondiscretionary = $2.25T
Interest = 225B
Total = $3.8T

Now for what we take in:

2012 is again the right-most column. As you can see, that’s $1.16 trillion in individual income taxes and $237 billion in corporate income taxes, for a total of $1.4 trillion in income taxes. Payroll taxes (Social Security and Medicare) plus other social insurance taxes total $841 billion. We get about another $235 billion in excise taxes, estate and gift taxes, customs, and related taxes. Our total receipts were $2.47 trillion. Let’s put that in a table like above:

Income tax: $1.4T
Payroll tax: $841B
Other tax: $235B
Total: $2.47T

We’re $1.3 trillion short.

Now, here’s the problem. Pretend we didn’t even have the federal government. In other words, pretend we had no military, no Department of Justice, no Department of Health and Human Services, etc. You eliminate the entire federal government, and just pay nondiscretionary programs and interest. (There would be no employees to issue the checks, but it’s a thought experiment.) You would have to pay $2.5 trillion. But our total revenues are less than that, at $2.47 trillion.

So you use up all our tax revenue, and you still haven’t quite paid entitlements. After you deal with entitlements, every cent of discretionary spending is now borrowed.

To make up the gap by taxing people, in 2012 you would have needed another $1.3T on top of the $2.47T we already took in. That means taxes would have to be raised 50%, across the board. Payroll tax, income tax, everything. If you paid $20,000 in 2012, you’d have to pay $30,000 to sustain Social Security and Medicare.

Can’t we just tax the rich? No, for two reasons.

First, even confiscating all millionaires’ taxable income would not close the gap. It’s difficult to find recent statistics for these numbers, but in posts I wrote in April 2011 I quoted people who had examined IRS statistics and found that in 2008, “Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion.” To get that $1.3 trillion you can’t close the gap by taxing rich people. You could confiscate all the income of people with taxable income over $1 million and it would not close the gap by half.

But there’s another problem: it wouldn’t work that well anyway. As I illustrated yesterday, we have had top marginal rates as high as 91% and as low as 28%, and we still get about 18% of GDP in revenues every year, regardless. Extremely rich people change their behavior when you start to confiscate all their money.

We haven’t even addressed paying off almost $17 trillion in debt. Nor have we addressed the widening gap between revenues and entitlement payouts caused by the aging of the workforce. All we have discussed is what to do to close the gap in a single year: 2012.

Without reforming entitlements, it is simply impossible.

Which means we’ll keep coasting, adding over $1 trillion to the debt every year, until it all comes crashing down.

The Democrats I talk to don’t understand this. But you can’t be president and not understand this.

Barack Obama is lying to the American people when he says we don’t need to fundamentally reform entitlements.

Today, we (re)inaugurate a liar.

What stunned House Speaker John Boehner more than anything else during his prolonged closed-door budget negotiations with Barack Obama was this revelation: “At one point several weeks ago,” Mr. Boehner says, “the president said to me, ‘We don’t have a spending problem.’ “

There is no possible way Barack Obama is that stupid.

He knows spending as a percentage of GDP has exploded under his presidency.

Source

He knows that whether the top tax rate is 90% as it was in 1960, or 30-40% as it’s been since 1990, federal revenue is always 15-20% of GDP:

Source

We don’t have a spending problem? That’s precisely what we have and Barack Obama knows it.

And he doesn’t care.

When this guy was first elected, I knew he was going to enact disastrous policies. But the reality, while it has been less disastrous in many ways than I imagined, has been far worse on the economic front than I could have dreamed possible.

I worried that he would destroy the balance of the Supreme Court. So far, he hasn’t been able to. I worried that he would close Guantanamo, try people like Khalid Sheikh Mohammed in federal court, and generally close down the war on terror. He tried some of that, but on balance, he’s been OK fighting terror.

But on the debt and deficit, he has been an unparalleled disaster.

Barack Obama has exploded our debt and shows no signs of letting up. The damage he is wreaking upon this nation will take decades to recover from — if we ever do. He is certainly making my children’s futures far more miserable.

Meanwhile he grins his way through his narcissistic life as if he hasn’t a care in the world.

Over the past four years, this guy has proven himself to be a horrible human being. I say this, not as a hyperpartisan who started out inclined to hate any Democrat with my heart and soul before he had spent a day in office. I say it as someone who has watched him spend four years ruining my kids’ future with the power he had. He has enacted rules changes that reward sloth and discourage work. He has enacted crushing regulations that stomp into the ground any plans that a business might have to grow and create jobs. He has taken credit for “creating or saving” jobs while enacting policies that anyone with a room temperature IQ knows are destined to keep unemployment high. He has taken companies into banktuptcy and told bondholders to go screw themselves while putting his union pals ahead of them in line to collect the scraps. He has taken away the last chance to let the free market control health care costs by pushing through ObamaCare — the biggest change in the relationship of individuals to their federal government since FDR. He has relentlessly engaged in rhetoric that he knows is dishonest class warfare. He has beat a cowardly retreat from any hint of “entitlement” reform that might keep my children from working all their lives to pay outlandish taxes to fix his mess. And that’s if my children don’t die in a nuclear war that comes about from the collapse of the world economy that is likely to happen due to his incredible abdication of any responsibility for making our spending relate to our revenues.

In short, he is ruining my children’s future with a big idiot smirk on his face.

I don’t care whether he is intentionally trying to ruin the country’s economy, to drive us into European-style socialism, or whether he is just fiddling while Rome burns because that’s the easiest thing to do politically, and he knows our crap feckless media won’t call him on it. It doesn’t matter. Either way, he knows better and is not doing what is necessary.

In the past four years he has shown himself to be a wretched, God-awful excuse for a human being. God help the country that today officially “welcomes” another four years of this unthinkable set of economic atrocities.

This guy’s wife said, when he was elected the first time around, that it was the first time she had ever really been proud of her country. Now we live in a country that has re-elected this buffoon — and for the first time in my life, I am not really proud of our country. How dare he parade around children to read letters about a real tragedy, to enact a cynical gun-grabbing agenda for cheap partisan gain. After what he has done to my children’s future, the idea that he would use children as props for any policy advantage is infuriating enough to make me want to bang my head against the wall hard enough to bring down the house around my ears.

And watching our media lionize this scumbag is more than I can take. You can bet I won’t turn on the television today. If I did, I’d throw a shoe at it.

I see nothing but misery on the horizon, and we’re rushing headlong towards it, led by a pompous, self-satisfied, grinning narcissistic fool.

Happy Inauguration Day, everyone.

The delivery is flat. The presentation is amateurish. But, while I don’t agree with every sentence the guy speaks, his presentation of the numbers is right:

I have been talking about submitting a balanced budget. But most people are so unaware of what it would take to do so, they have no idea how “draconian” the cuts must be. Basically, you could eliminate the entire federal government and you’d almost get there.

Some people think we can address the deficit without addressing entitlements. This video shows why such people are fundamentally unserious.

One of the most important points of Andrew Breitbart’s new book is that conservatives can use New Media to fight Big Media’s narrative — and to reshape it according to the truth.

Currently, nothing is more important than fighting the left’s phony and oft-repeated falsehoods about the budget and the deficit. For example, one of the points I have been making lately is that higher taxes on the rich cannot possibly balance the budget no matter how confiscatory they are. You could return to 2000 levels for incomes over $200,000, raise the top rate to 50% for those making $500,000, 60% for those making over $5 million, and a sky-high 70% for those making over $10 million, and you know what you would raise? An extra $133 billion per year, in a budget whose deficits are more than 10 times that amount.

Another point we need to fight is the ridiculous assumption that ObamaCare will reduce the deficit. I saw that particular falsehood raise its ugly head twice in the past 24 hours: once in Obama’s remarks to donors (featured in a post by Lee Stranahan), and again in a piece linked by one of the trolls here, suggesting that we can fix the deficit by doing nothing (!) — thanks to the fabulous savings afforded by ObamaCare!

They are going to keep repeating the lie. So we need to keep rebutting it.

There are a million ways to rebut this, with links a-plenty and walls of text. Obama’s own deficit commission (.pdf) says CBO projections of ObamaCare’s savings “count on large phantom savings” that will never occur. The administration double-counts savings, using the same $500 billion to save Medicare and to pay for the plan. And so on.

But the most entertaining and succinct rebuttal to that idea is this short video by Nick Gillespie:

The basic point Nick makes is that the alleged savings depend on budget gimmickry — such as treating “reform” as independent from huge annual health care expenditures that recur every year, and eliminating those expenditures from the analysis.

It’s wearying, having to constantly rebut lies. But as long as they keep telling them, we have to keep responding.

Look at it this way: thanks to the Internet, we can. Back in the day, we just had to sit there and watch the narrative be shaped by liars, and say nothing.

The new way is much better.

UPDATE: An entertaining “Obama then and now” video — this one on Mediscaring seniors.

It’s worth asking: can that be done?

A reader at Megan McArdle’s blog did the math a few days ago and concluded that it cannot. Even if we accept the left’s counterfactual assumptions that skyrocketing taxes will not shrink the economy, the numbers simply aren’t there:

For anyone who wants to discuss the revenue side of the budget debate knowledgably, I highly recommend spending some time with the IRS’s Statistics on Income. Table 1.1 under Individual Statistical Tables is a good place to start: http://www.irs.gov/pub/irs-soi…

You can see, for example, that total taxable income in 2008 was $5,488 billion. Taxable income over $100,000 was $1,582 billion, over $200,000 was $1,185 billion, over $500,000 was $820 billion, over $1 million was $616 billion, over $2 million was $460 billion, over $5 million was $302 billion, and over $10 million was $212 billion. Effective tax rates as a percentage of taxable income seem to top out around 27%.

You can estimate the effects of various proposals in the best case, which is that each percentage point increase in the marginal rate translates to an equal increase in the effective rate. Going back to 2000 (“Clinton era”) marginal rates on income over $200,000, let’s call it a 5 percentage point increase in the marginal rate, would therefore yield $59 billion on a static basis. Going from there to a 45% rate on incomes over $1 million (another 5 percentage point increase) yields an additional $31 billion. Or, instead, on top of 2000 rates over $200,000, 50%/60%/70% on $500,000/$5 million/$10 million? An extra $133 billion, or nearly 1% of GDP. That’s not accounting for the further middle class tax cuts that are usually proposed along with these “millionaires’ taxes.”

Now, compare this to deficits of $1,413 billion in 2009 and $1,293 billion in 2010, and using optimistic White House estimates, $1,645 billion in 2011 $1,101 billion in 2012, $768 billion in 2013, and continuing at over $600 billion after.

If anyone wishes to dispute this analysis with actual numbers, feel free to do so in the comments.