Fiscal FactChecker: 16 Budget Myths to Watch Out For in the 2016 Campaign

I have written several times that we need to do something about our debt crisis, as the problem is only going to get worse. I liken it to having a water problem in your house. If you don’t fix it now, it will get far worse later on.

In addition to The Concord Coalition who I have mentioned before, a sister nonpartisan group to their effort spawns from the Committee for Responsible Federal Budget called Fix the Debt. The Board of Directors of the Committee include some big names who served in various government, think-tank and business roles. The Fix the Debt group was founded by former Chief of Staff Erskine Bowles and former Senator Alan Simpson of the Simpson-Bowles Deficit Reduction Committee.

I will provide a link below, but wanted to summarize a piece called “Fiscal Fact Checker: 16 Budget Myths to Watch Out For in the 2016 Campaign” which is dated August 6, 2015. Those myths are:

Myths about the National Debt

  1. We can continue borrowing without consequences
  2. With Deficits falling, our debt problems are behind us (this is expected to reverse in 2015-16)
  3. There is no harm in waiting to solve our debt problems
  4. Deficit reduction is code for austerity, which will harm the economy

Myths about Taxes

  1. Tax cuts pay for themselves
  2. We can fix the debt solely by taxing the top 1%
  3. We can dramatically lower tax rates by closing a few egregious loopholes
  4. Any tax increases will cripple economic growth

Myths about Health Care and Social Security

  1. Medicare and Social Security are earned benefits and therefore should not be touched
  2. Repealing Obamacare will fix the debt
  3. The Health Care cost problem is solved
  4. Social Security’s shortfall can be closed simply by raising taxes on or means-testing benefits for the wealthy

Myths about easy fixes

  1. We can solve our debt situation by cutting waste, fraud, abuse, earmarks and /or foreign aid
  2. We can grow our way out of debt
  3. A Balanced Budget Amendment is all we need to fix the debt
  4. We can fix the debt solely by cutting welfare spending

In addition to the above, I wanted to reiterate two global trends that impact the US as well. First, per the World Health Organization, we are the most obese country in the world, as well as having the highest costing health care system in the world. The Affordable Care Act has helped, but we are over-tested, over-medicated and future train wrecks waiting to happen This will create continued cost pressures on Medicare, Medicaid and the subsidies under Obamacare.

Second, per the World Economic Forum, we are an aging population. We are not as bad off as places like Japan, Greece, Portugal, Spain, etc., but as we age cost pressures on Social Security and Medicare/ Medicaid will heighten. For people in their 60’s, the average cost of health care is roughly twice that of folks in their 30’s. The aging is actually hitting some of our states and municipalities with increased retirement liabilities relative to fewer workers being hired. Detroit, Stockton, and Birmingham have all filed for bankruptcy, with this being a contributing cause, plus states like Illinois, New Jersey, etc. are having significant retirement cost pressures.

Please check out these two websites and see who is involved in these nonpartisan efforts.

http://www.concordcoalition.org/

http://www.fixthedebt.org/

Also ask your Senators, Congressional representatives and Presidential candidates what they plan to do about this. Like climate change and the global water crisis, we can no longer wait on action.

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34 thoughts on “Fiscal FactChecker: 16 Budget Myths to Watch Out For in the 2016 Campaign

    • Kim, I don’t seem to be sleeping to well either. My nightmares have long orange hair wrapped around his head. Medicines don’t come cheap. Best wishes on figuring out the right path for you. Keith

  1. Thank you for pointing out that there are myths perpetrated on both sides. You also raised the very real problem we have in this country with poor health and obesity. The costs associated with citizens not taking responsibility for their health and weight are staggering. Obviously some have circumstances outside their control, but I don’t think that’s true for the majority.

  2. Wasn’t former Senator Warren Rudman a member, or maybe founder of the The Concord Coalition. I thought he would have made a fine POTUS. Thanks for all the info that helps cut through the yo-yo of mo money.

    Regards,
    Doug

    • Doug, he and Paul Tsongas were two of three co-founders. He would indeed been a good President. Tsongas would have to, but he was not a dynamic speaker. I like the “yo-yo of mo” money. Keith

  3. I keep thinking that maybe, just maybe, if we put our minds to it, we can throw out ALL the politicians and bring in lower middle class to poor mothers to run the country. They know what is important (healthy children, education, taking care of our elderly and disabled), they don’t like sending their children off to die in wars (fancy that) and most importantly? They know how to budget and normally have a sense of fair treatment of others. The politicians and uber-rich seem bent on destroying the country for their own gain (of course, since the uber-rich have been paying off the politicians in order to increase their own coffers to obscene levels, it is to be expected) – so if we Really want to make changes, well, put people in charge who have actual hearts and souls, maybe? Of course, as Shakespeare says, “First, we kill all the lawyers” – but maybe it should be changed to include, “First, we kill all the lawyers and politicians!”

    • Leiah, that would make sense, except for the killing part, although I can appreciate Shakespeare’s amended sentiment. I used to believe politicians had more information to work with and were reasonably smart. I no longer feel that way with gerrymandering and use of campaign rhetoric to make decisions. We have people who believe information which has been refuted and they govern off of it. They believe their own BS. It is like whack-a-mole. You defeat the info over here and it comes up over there. Part of the issue we have is the Grover Norquist pledge almost all GOP politicians sign. They will not raise taxes. Well, as the myths indicate, at some point in time we do have to pay for things. Thanks for your thoughts. Keith

      • Thanks Candice. I found this Fix the Debt piece very concise in breaking down the myths from various points of view. I also very much like what Leiah had to say as well. I think back to the movie “Dave” where he got his accountant Murray to come help him find $600 million in the budget.

      • Yes I remember that! What a film ! Imagine, just for a moment, what we could do to this country if we spent money wisely!!! Imagine if we put all the money that goes into political campaigning into helping under funded programs

      • Candice, that would be a huge start. I have told politicians I do not contribute to campaigns, but will make a donation to a charity with them in mind. I said I am not going to fund another commercial to mute. “Dave” is one of my favorite movies, given to me as a gift. It makes my references better, when people have seen the movies or read the books. Thanks, Keith

      • I don’t either. As for movies, we both use then as references a lot, kinda love that! You MUST remember to see the new Lance Armstrong when it comes out here, it’s excellent

  4. Working for a physician, I am required to enter in a patient’s medications. I’ve been doing my own study on the amount of medication people take in a day in comparison to how they look. My conclusion: The more people have on their list, the worst they look. There is a large group of people who do not questions their doctors or anyone else.
    Asking questions, doing your own research and and being your own biggest advocate are essential whether you’re in the doctor’s office or the voting booth.
    Great points Keith!

    • Lisa, you have added a key reason for our over-medication. We would rather take a pill than change lifestyle. Plus, we must ask our doctors more questions, especially with side effects and options. In reviewing a claims report for an employer for which I was Benefits Manager, Aetna advised us there was a doctor in their network who had a great track record of not prescribing as many medicines for her patients. When they asked her why, she said I give some a handwritten Rx and tell them the condition should likely clear up in a week on its own, but here is a Rx to fill next week if it does not. The patient was happy with the piece of paper and rarely needed to fill it. Thanks for your comment, Keith

  5. Pingback: Weekly Review | Erika Kind

  6. Note to Readers: I used to travel with a Global Wellness consultant who helped global employers develop wellness initiatives and measure their success. She often made the comment that one of the US’ greatest exports was obesity. With our fast food restaurants expanding abroad, we are sharing our poor eating habits with the planet. And, what makes it worse, the local countries will add unhealthy choices to the menu to go along with the preset ones. I will have a double cheeseburger and a burrito please.

    • Candice, I admire your poetic use of the word “gobsmacked.” Well done. Trickle down economics has been disproven as a theory in practice and by four sets of analyses. Tax cuts can help some if they are geared to people who will in turn spend the savings. But, the data in the Fix the Debt analysis shows they do not pay for themselves. Obama and Congress temporarily cut the FICA tax by 2% of pay for two years, which helped the economy, but harmed the deficit. Thanks for your poetic and correct assertions. Keith

      • It’s an illusion, borrowing from one to pay the other. A house of cards. Lunacy. Irresponsible without due forecast of the future, oh but they never think of the future!!

      • They ARE proud of slight of hand, where did a sense of shame and desire for decency go???

      • Candice, I write politicians often by email. Usually, I will get a form letter or email back based on the subject I checked. They are not listening to us. I have received the same letter on more than one occasion. So, decency must have been given a tip and sent home. Keith

      • Oh how sad to know that are not listening, yet what other explanation can there be? Are they listening to super packs and big business needs? We need a political overhaul so badly

  7. Note to Readers: Marvelous feedback, thanks. We seem to have too many either/ or debates, when most answers are elements of both. The beauty of Simpson-Bowles as a conversation starter is it had spending cuts and tax increases. We cannot solve this problem without the latter and there are trade-offs. Yet, in this same vein and as most multi-business corporations do, while some cuts are made, there is a need to increase spending in other areas. Infrastructure spending comes to mind. Congress passed an infrastructure bill finally last fall, but it is about three years too late and not enough. It also should be accompanied by a revamped gas tax, rather than how it was funded, robbing Peter to pay Paul. Gas mileage has improved and there is a building trend to hybrid and electric cars. This tax must be reshaped and increased to fund infrastructure improvements and maintenance.

  8. Most of this seems quite logical but I’m not sure “Medicare and Social Security are earned benefits and therefore should not be touched.” is a statement of fact. Surely its a statement of opinion? ie – whether or not it should be touched is based on the value that a person places on the program.

    Are there any suggestions to be made for cutting the deficit? It seems clear that it need to be a multi faceted approach. But what are the suggestions by Fix the Debt?

    • I encourage you to check out their websites, as they have tools and estimated price tags on various changes. I will mention some ideas in the future, but wanted to frame the issue, first. It is all about trade-offs. Their nonpartisan approach takes you through small changes and larger changes. People need to know what they are losing with cuts and what they are spending with tax increases.

      Both Social Security and Medicare have been modified several times since inception. Fix the Debt has a good exercise on the current Social Security issue facing us.

      Thanks for commenting, Keith

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