Tag Archives: taxes

Higher Taxes for Wealthy Americans: Politics as Usual?

I actually know a few millionaires. And I’m certain that a modest increase in their income tax rate wouldn’t cramp their lifestyle any. But I’m also certain that they wouldn’t be happy about it. They may agree with Warren Buffett about accumulating wealth — but not about sharing any more than absolutely necessary with Uncle Sam.

Can you blame them?

And should higher taxes on wealthy Americans — now apparently defined as those making a million bucks a year or more — be the centerpiece of most of the debt reduction and job creation proposals currently stalled in Congress?

Congress is at work (LOL) right now navel-gazing over whether to extend the Social Security payroll tax reduction that is set to expire at the end of this year. Whether that extra cash in the pockets of many taxpayers has contributed to any economic growth is debatable.  But at this point the reduced tax rate if not extended will feel and smell like a tax hike — something that I expect most members of Congress are not enthusiastic about during an election year.

Yet here’s the rub. The Dems want to attach a tax hike on those making a million or more a year to offset the continued Social Security tax reduction. And the Republicans, well, nuts to that. Here’s from a NYT article “Social Security Payroll Hike Drives Wedge in Washington“:

Republicans in both houses of Congress said Wednesday that they wanted to prevent an increase in Social Security payroll taxes that would otherwise occur in January, but they remained far apart from Democrats on the specifics of how to do it.

A small number of Republican lawmakers indicated that they would be open to the idea of raising additional revenues to offset the cost of extending the payroll tax cut, a break in what has been the party’s nearly solid ranks against tax increases.

Senate Republican leaders introduced a bill that would keep the payroll tax rate at its current level for another year. The cost is roughly $120 billion. Senate Republicans would offset most of the cost by freezing the pay of federal employees through 2015 and gradually reducing the federal work force by 10 percent.

In addition, Senate Republican leaders would go after “millionaires and billionaires,” not by raising their taxes but by making them ineligible for unemployment compensation and food stamps and increasing their Medicare premiums. Democrats said that this part of the Republican proposal was not serious, pointing out that high earners were already ineligible to receive food stamps.

I’m not sure how many millionaires and billionaires are going to the Piggly Wiggly with food stamps in hand. But what do I know?

Anyway, here’s an interesting perspective on The Huffington Post from Robert Reich, who drives the pundit car generally way left of center, “Restore the Basic Bargain“:

For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.

That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.

Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day — three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”

But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.

That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.

The basic bargain is over — not only at Ford but all over the American economy.

New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.

Meanwhile, corporate profits now constitute the largest share of the economy since 1929.

1929, by the way, was the year of the Great Crash that ushered in the Great Depression.

In the years leading up to the Great Crash, most employers forgot Henry Ford’s example. The wages of most American workers remained stagnant. The gains of economic growth went mainly into corporate profits and into the pockets of the very rich. American families maintained their standard of living by going deeper into debt. In 1929 the debt bubble popped.

Sound familiar? It should. The same thing happened in the years leading up to the crash of 2008.

The latest data on corporate profits and wages show we haven’t learned the essential lesson of the two big economic crashes of the last 75 years: When the economy becomes too lopsided — disproportionately benefiting corporate owners and top executives rather than average workers — it tips over.

In other words, we’re in trouble because the basic bargain has been broken.

Yet incredibly, some politicians think the best way to restart the nation’s job engine is to make corporations even more profitable and the rich even richer — reducing corporate taxes; cutting back on regulations protecting public health, worker safety, the environment, and small investors; and slashing taxes on the very rich.

These same politicians think average workers should have even less money in their pockets. They don’t want to extend the payroll tax cut or unemployment benefits. And they want to make it harder for workers to form unions.

These politicians have reality upside down.

Corporations don’t need more money. They have so much money right now they don’t even know what to do with all of it. They’re even buying back their own shares of stock. This is a bonanza for CEOs whose pay is tied to stock prices and it increases the wealth of other shareholders. But it doesn’t create a single new job and it doesn’t raise the wages of a single employee.

Nor do the wealthiest Americans need more money. The top 1 percent is already taking in more than 20 percent of total income — the highest since the 1920s.

American businesses, including small-business owners, have no incentive to create new jobs because consumers (whose spending accounts for about 70 percent of the American economy) aren’t spending enough. Consumers’ after-tax incomes dropped in the second and third quarters of the year, the first back-to-back drops since 2009.

The recent small pickup in consumer spending has come out of their savings. Obviously this can’t continue, and corporations know it. Consumer savings are already at their lowest level in four years.

Get it? Corporate profits are up right now largely because pay is down and companies aren’t hiring. But this is a losing game even for corporations over the long term. Without enough American consumers, their profitable days are numbered.

After all, there’s a limit to how much profit they can get out of cutting American payrolls or even selling abroad. European consumers are in no mood to buy. And most Asian economies, including China, are slowing.

We’re in a vicious cycle. The only way out of it is to put more money into the pockets of average Americans. That means extending the payroll tax cut. And extending unemployment benefits.

Don’t stop there. Create a WPA to get the long-term unemployed back to work. And a Civilian Conservation Corp to create jobs for young people.

Hire teachers for classrooms now overcrowded, and pay them enough to attract people who are talented as well as dedicated. Rebuild our pot-holed highways. Create a world-class infrastructure.

Pay for this by hiking taxes on millionaires.

A basic bargain was once at the heart of the American economy. It recognized that average workers are also consumers and that their paychecks keep the economy going.

We can’t have a healthy economy until that bargain is restored.

Reich touches on what will be a key issue in next year’s elections: more government spending and involvement in the economy or more reliance on the private sector to invest and create jobs.

Right now, neither approach appears to be working. So we’ll see.

In the meantime, let’s hope that members of Congress can reach a bargain — on anything.

 

Please Raise My Taxes: Barf

Wow. We’re a long way from the presidential election in November 2012, but there sure is some great political reality TV available already. Yesterday the Prez was campaigning in Silicon Valley, and he took a question from a guy in the audience who said he was “unemployed by choice” after cashing out from a job at Google. He asked the Prez:”…would you please raise my taxes?”

Barf.

OK. I understand that this is good election politics. It’s a populist wet dream come true to tax the millionaires and billionaires. But is it really sound economic policy — something that will really make a difference in solving the big problems we face involving jobs, government spending and our national debt?

Nah.

Here’s another billionaire, Mike Bloomberg, who opines that the so-called Buffett Rule is just “theatrics.” Here’s from Mediaite.com:

On the whole actually, Bloomberg wasn’t too negative towards the President. In fact, his comments that Obama had “tried some things he liked and some things he didn’t” for the economy weren’t too different from his comments on Christie. However, the Mayor made it clear that one of the things he didn’t like was raising taxes on the rich.

“I think it’s not fair to say that wealthy people don’t pay their fair share. They pay a much higher percentage of their income, they have a higher rate than people who make less. The Buffett thing is just theatrics. If Warren Buffett made his money from ordinary income rather than capital gains, his tax rate would be a lot higher than his secretary’s.”

Wonder if the asshat who asked the Prez yesterday to please raise his taxes paid taxes on ordinary income or on the appreciation on stock options from Goggle? I digress.

I also heard on TV while chasing the treadmill this early a.m. that it is possible just to send a check — a voluntary contribution — to the IRS. Apparently not that many millionaires feel that guilty about their current taxes to make a voluntary contribution. At least I can’t find out via a Google search how to do it. Hey, the guy who wants his taxes raised. He was a Google exec. Maybe he can find it. Oops. I digress again.

And I reprinted info from an AP story last week that shows that the Buffett Rule doesn’t really add up to much — beyond politics.

Anyway, if you are interested in more on this LOL story, check out Michelle Malkin’s blog. She has plenty of commentary and links to other information.

And I didn’t check but she may even have a link to where we can get discount barf bags. With the national campaign just starting, we may need them.

Cutting Government Deficit, Increasing Jobs — Or Nothing?

Let’s see if I can get this straight. Are we trying to cut federal government spending and reduce the deficit? Increase jobs? Engage the masses in class warfare? Note to self: Where’s my pitchfork? And what side am I supposed to be on? Dismantle entitlement programs? Strengthen and enhance entitlement programs? All or none of the above.

Sheesh.

For a Congress and President that accomplishes very little beyond giving speeches and making appearances with the Inside the Beltway Chattering Classes on the Sunday TV talk shows it sure seems like there are a lot of fish in the skillet these days.

And why does it appear to this pajama-clad citizen journalist that all the proposals currently clogging the nation’s collective attention span will amount to nothing more than peeing in a sleeping bag on a cold morning? Sure. It gives you a warm and fuzzy feeling. But doesn’t accomplish much in the long run.

I could, of course, take the time to construct a solid case for all of this. But instead I’ll defer to David Brooks, the token conservative on the NYT op-ed page. Here’s from his article “Obama Rejects Obamaism“:

I liked Obama’s payroll tax cut ideas and urged Republicans to play along. But of course I’m a sap. When the president unveiled the second half of his stimulus it became clear that this package has nothing to do with helping people right away or averting a double dip. This is a campaign marker, not a jobs bill.

It recycles ideas that couldn’t get passed even when Democrats controlled Congress. In his remarks Monday the president didn’t try to win Republicans to even some parts of his measures. He repeated the populist cries that fire up liberals but are designed to enrage moderates and conservatives.

He claimed we can afford future Medicare costs if we raise taxes on the rich. He repeated the old half-truth about millionaires not paying as much in taxes as their secretaries. (In reality, the top 10 percent of earners pay nearly 70 percent of all income taxes, according to the I.R.S. People in the richest 1 percent pay 31 percent of their income to the federal government while the average worker pays less than 14 percent, according to the Congressional Budget Office.)

This wasn’t a speech to get something done. This was the sort of speech that sounded better when Ted Kennedy was delivering it. The result is that we will get neither short-term stimulus nor long-term debt reduction anytime soon, and I’m a sap for thinking it was possible.

Well, maybe Brooks just got up on the wrong side of the sleeping bag. Let’s see how Dana Milbank views things these days since he is generally swinging from the left side of the plate. Here’s from his article in WaPo “Obama launches a revolution“:

Let us begin by stipulating that President Obama’s new budget plan is unrealistic, highly partisan and a non-starter on Capitol Hill.

That’s what’s so good about it.

At last, the president hasn’t conceded the race before the starter’s gun, hasn’t opened the bidding with his bottom line, hasn’t begun a game of strip poker in his boxer shorts. Whichever metaphor you choose, it was refreshing to see the president in the Rose Garden on Monday morning delivering a speech that, for once, appealed to the heart rather than the cerebrum.

“It is wrong that in the United States of America a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million,” the newly populist Obama declared.

Obama squinted into the morning sunlight and chopped the autumn air with his left hand. He got sputtering mad — literally — when he said his opponents would have us “settle for second-rate roads and second-rate bridges and second-rate airports and — and — and — schools that are crumbling.”

Then came that rarest of Obama moves: an ultimatum. “I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share.”

Republican howls of complaints began even before the speech.

“Class warfare,” protested Paul Ryan.

“Class warfare,” complained Karl Rove’s American Crossroads.

“Class warfare,” judged House Speaker John Boehner.

The president welcomed the charge. “I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or teacher is class warfare,” he told the Rose Garden crowd of 200. “I think it’s just the right thing to do.”

A moment later, the class warrior added: “Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. . . . Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get. We can’t afford to do both. This is not class warfare. It’s math.”

The audience — a quickly assembled collection of students, retirees and federal bureaucrats — chuckled at this line. Obama didn’t crack a smile.

OK. Like most people I don’t know whether to laugh or cry about the debacle unfolding Inside the Beltway.

But if you are looking for a laugh, look no further than the so-called Buffett Rule. Warren Buffett, the billionaire investor and stock picker, wants to pay his fair share of taxes and argues that his tax rate should not be lower than that of his secretary. Hard not to raise your pitchfork in favor of that notion.

But here’s the rub, as Roger Simon points out in Politico, “Eat the Rich“:

“This is not class warfare,” the president promised. “It’s math.”

Well, sort of. Though the rich do benefit enormously, the poor and middle class benefit from the current Tax Code, too. About half the households in America pay no income taxes at all, because the Tax Code says they don’t make enough. And middle-class taxpayers get a large break by being able to deduct their home mortgage interest. (Want a true third-rail in American politics? Try suggesting the elimination of that last one. Obama didn’t on Monday.)

In truth, the Tax Code gives too many breaks to too many people.

“All told, federal taxpayers last year received $1.08 trillion in credits, deductions and other perks while paying $1.09 trillion in income taxes, according to government estimates,” wrote Lori Montgomery in The Washington Post on Sunday. “Only about 8 percent of those benefits went to corporations. … The bulk went to private households, primarily upper middle-class families that Obama has vowed to protect from new taxes.”

And call me cynical (or an asshat) but as soon as the Prez reveals some specifics about the Buffett Rule, you can be sure the Oracle of Omaha’s tax advisers will be hard at work figuring out a way to avoid the tax.

Wonder if Mr. Buffett sleeps in a sleeping bag?

 

 

CEO Pay: Do We Really Want To Tax The Rich?

Oh boy. Here’s one of those stories where you can huff and puff and try to blow the house down. But unless you have the wind of Hurricane Irene, nothing is going to change. Let’s stew this early a.m. on CEO pay, corporate taxes and taxing those who are accumulating real wealth because of legal tax breaks and loopholes.

The Institute for Policy Studies, described in the NYT and elsewhere as a “liberal-leaning research group” released a study yesterday showing that the CEOs at many of the big-name USA corporations make more than the companies pay in taxes. And the backstory: this comes at a time when many are arguing that corporate tax rates are too high and only Warren ‘Please Tax Me More’ Buffett is pushing for individuals at the top of the income totem pole to pay more taxes.

Here’s from a NYT article “Where Pay for Chiefs Outstrips U.S. Taxes“:

At least 25 top United States companies paid more to their chief executives in 2010 than they did to the federal government in taxes, according to a study released on Wednesday.

The companies — which include household names like eBay, Boeing, General Electric and Verizon — averaged $1.9 billion each in profits, according to the study by the Institute for Policy Studies, a liberal-leaning research group. But a variety of shelters, loopholes and tax reduction strategies allowed the companies to average more than $400 million each in tax benefits — which can be taken as a refund or used as write-off against earnings in future years.

The chief executives of those companies were paid an average of more than $16 million a year, the study found, a figure substantially higher than the $10.8 million average for all companies in the Standard & Poor’s 500-stock index.

The financial data in the report was taken from the companies’ regulatory filings, which can differ from what is actually filed on a corporate tax return. Even in a year when a company claims an overall tax benefit, it may pay some cash taxes while accumulating credits that can be redeemed in future years. For instance, General Electric reported a federal tax benefit of more than $3 billion in 2010, but company officials said they still expected to pay a small amount of cash taxes.

The authors of the study, which examined the regulatory filings of the 100 companies with the best-paid chief executives, said that their findings suggested that current United States policy was rewarding tax avoidance rather than innovation.

“We have no evidence that C.E.O.’s are fashioning, with their executive leadership, more effective and efficient enterprises,” the study concluded. “On the other hand, ample evidence suggests that C.E.O.’s and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before — at a time when the federal government desperately needs more revenue to maintain basic services for the American people.”

Well, you can argue that the nation has a spending problem not a revenue problem. But I’ll let the members of the new super committee in Congress wrestle with that issue until they punt right before Thanksgiving. Oops. I digress.

Back to CEO pay and corporate taxes.

Politico opines, “Study: CEO pay tops tax bill”:

The report revealed eBay paid CEO John Donahoe $12.4 million — but reported a $131 million refund on its 2010 federal income taxes. And at General Electric, where CEO Jeff Immelt raked in $15.2 million, the company received a $3.3 billion refund and dropped $41.8 million on lobbying and political campaigns. And at Boeing, CEO Jim McNerney takes home $13.8 million, while the company paid $13 million in taxes and spent $20.8 million on lobbying in 2010.

On average, S&P 500 CEOs make $10.8 million.

Note to self: Is that the same Jeff Immelt who is Obama’s Jobs Czar — but who has been mostly of late creating jobs in China?

Another note to self: You can bet that most of the CEO pay comes in ways — stock options, for instance — that escape the tax bite that the rest of us pay on regular earnings. Tax reform, anyone? Sorry. I digress again.

Back to Politico and the story about CEO pay and corporate taxes:

Rep. Elijah Cummings (D-Md.), the ranking member on the Committee on Oversight and Government Reform, immediately called for hearings on CEO pay after reading the study, Reuters reported.

Cummings sent a letter to committee chair Rep. Darrell Issa (R-Calif.) asking “to examine the extent to which the problems in CEO compensation that led to the economic crisis continue to exist today” and “the extent to which our tax code may be encouraging these growing disparities.” He also sought an inquiry into “why CEO pay and corporate profits are skyrocketing while worker pay stagnates and unemployment remains unacceptably high.”

I see a congressional hearing on this in the near future — with CEOs heading to the dock for a symbolic flogging. And perhaps Warren Buffett should be first up to the plate.

It appears his company, Berkshire Hathaway, has been grappling with the IRS for more than a decade over $1 billion or more in taxes.

Huff. Puff. Ain’t nothing coming down.

Read My Lips: No New Taxes

I wonder what George Bush the Senior thinks about the current kerfuffle Inside the Beltway over hiking the debt ceiling and the federal budget. Prez O said yesterday during his presser that additional revenue — tax increases and the elimination of certain corporate benefits — had to be part of any debt-reduction package. The Republicans said about taxes: no way.

Kind of an interesting policy and political debate with both parties heading in opposite directions.

And many of the newly elected conservative members of Congress got their tickets punched by voters back home by pledging not to raise taxes, if not cut them along with reduced government spending across the board.

George Bush the Senior as he launched his bid for the White House issued the great TV sound bite: “Read my lips, no new taxes.

Alas, he caved — and became a one-term president.

Here’s from the NYT article “In Deficit Plan, Taxes Must Rise, President Warns“:

President Obama pressured Republicans on Wednesday to accept higher taxes as part of any plan to pare down the federal deficit, bluntly telling lawmakers that they “need to do their job” and strike a deal before the United States risks defaulting on its debt.

Declaring that an agreement is not possible without painful steps on both sides, Mr. Obama said that his party had already accepted the need for substantial spending cuts in programs it had long championed, and that Republicans must agree to end tax breaks for oil and gas companies, hedge funds and other corporate interests.

In a 67-minute news conference, Mr. Obama cast the budget battle as a tug of war between the interests of the rich — like owners of corporate jets, who he said get generous tax breaks — and those of the middle class, the elderly and children.

Directly challenging Republican leaders, Mr. Obama said, “Everybody else has been willing to move off their maximalist position — they need to do the same.”

At the same time, Mr. Obama, under assault frfom Republicans on the campaign trail for an unemployment rate that remains above 9 percent, asked voters to understand that the economic recovery would take time but said that Washington, even in its current financial straits, could still do more to help. He expressed support for extending a reduction in payroll taxes for an extra year, providing loans for road and bridge-building and approving trade pacts that could help spur exports.

While the president expressed hope for a budget deal before the government’s borrowing authority expires in early August, he scolded Republican lawmakers for putting off hard decisions until the 11th hour, saying that his daughters did not procrastinate that way with their schoolwork.

“Malia and Sasha generally finish their homework a day ahead of time,” the president said, in a tone of rising exasperation. “They don’t wait until the night before. They’re not pulling all-nighters.”

The House speaker, John A. Boehner, flatly rejected Mr. Obama’s call for new tax revenues, saying the “president’s remarks ignore legislative and economic reality.”

In a toughly worded statement, Mr. Boehner said the House would vote to raise the debt limit, as the White House has demanded, only if the administration agreed to a deal that contained deep spending cuts and no tax increases.

Oh, boy.

“Read my lips: no new taxes.”

We’ll see.

Her Royal Hotness: Pippa

Wow. I kind of got blown away by the media and public frenzy surrounding the royal nuptials. And yeah. Like any journalist, I consider it my professional responsibility to find out whether Pippa was wearing underwear during the ceremony at Westminster Abbey.

But alas. There are bigger fish to fry. So I’ll leave it to others to follow closely any breaking details about that cover-up — or not.

Here’s from Sabotage Times:

After the Royal Wedding everyone’s talking about one arse – and amazingly it’s not Prince Philip.

Well said.

OK. On to other matters.

The head sleds at NATO say they are not targeting individuals or civilians in their military missions. Yet bombs launched from planes at high altitudes somehow manage to fly down the chimney of whatever house Mad Dog Gadhafi and family are staying. Go figure. And it strikes me that the USA is about to sign a long-term lease on property in Tripoli — matching the timeshares we can’t unload in Afghanistan and Iraq.

And members of Congress return this week from an Easter recess to deal with the federal debt limit, the 2012 budget, taxes, entitlements and so on. I know. Alert the militia — and get the women and children off the streets. It’s gonna be nasty.

Oh well. At least we’ll have some other asses to concentrate on.

And there’s nothing that I can add about the death of Osama bin Laden. So I won’t even try. I missed the TV announcement by the Prez last night — long after I was sound asleep. And I first learned about the story early this a.m. when I checked my BlackBerry and several WSJ messages greeted me with the good news.

Still, of the many stories I’ve read and seen, this one may have captured the most memorable moment. It’s from Mediate, “White House Crowd Breaks Out In National Anthem To Celebrate Bin Laden Death.”

On the heels of the blockbuster revelation that Osama bin Laden is dead, CNN cameras at the White House captured a spontaneous celebration just outside the North fence of the White House. As anchor Wolf Blitzer tossed to a live shot of the gathering crowd, which Blitzer said had been chanting “USA! USA!”, the crowd broke into a spontaneous rendition of The Star Spangled Banner that could become an iconic image in American history.

The contrived nature of much of modern TV news coverage makes this clip all the more remarkable. While bin Laden’s death doesn’t come close to restoring what was lost on September 11, 2001, it is obviously an important milestone in the national psyche, and a just, if too long delayed, result.

The Country We Want?

Kind of an interesting week for a pajama-clad citizen journalist as Congress and the Prez raced to keep the doors of the federal government open — and as we began in earnest the 2012 election campaigns with conflicting budget proposals and visions for the future of the nation. Whew.

Yesterday, Congress passed the compromise legislation on the 2011 budget, despite a last-minute brou-ha-ha over whether the announced $38 billion in spending cuts would amount to only some $352 million this fiscal year. If you have the energy to try to sort that out, here’s an informative article from NPR, “How Washington Turned $38 billion Into $352 million.”

OK. Now on to the main events — the 2012 budget and the national election campaigns that really should give voters a clear choice about the future of this country, our willingness (or not) to fund a host of social programs, and the role and scope of government at all levels.

Obama began his campaign Wednesday, giving his presidential response to Representative Paul Ryan’s 2012 budget resolution, “The Path to Prosperity.” Note to the Prez: It does seem a little impolite to invite Ryan to attend the speech and then turn it in to as Rush says “a personal bitch slap.” Sheesh.

But I guess it depends on where you sit on the big issues being tossed around here.

Here’s from a NYT editorial “President Obama, Reinvigorated“:

The man America elected president has re-emerged.

For months, the original President Obama had disappeared behind mushy compromises and dimly seen principles. But on Wednesday, he used his budget speech to clearly distance himself from Republican plans to heap tax benefits on the rich while casting adrift the nation’s poor, elderly and unemployed. Instead of adapting the themes of the right to his own uses, he set out a very different vision of an America that keeps its promises to the weak and asks for sacrifice from the strong.

But the WSJ demurs in its opinion article, “The Presidential Divider“:

Did someone move the 2012 election to June 1? We ask because President Obama’s extraordinary response to Paul Ryan’s budget yesterday—with its blistering partisanship and multiple distortions—was the kind Presidents usually outsource to some junior lieutenant. Mr. Obama’s fundamentally political document would have been unusual even for a Vice President in the fervor of a campaign.

The immediate political goal was to inoculate the White House from criticism that it is not serious about the fiscal crisis, after ignoring its own deficit commission last year and tossing off a $3.73 trillion budget in February that increased spending amid a record deficit of $1.65 trillion. Mr. Obama was chased to George Washington University yesterday because Mr. Ryan and the Republicans outflanked him on fiscal discipline and are now setting the national political agenda.

OK. I can’t sort this mess out on an early Friday morning. So let’s turn to David Brooks in the NYT to get his take, “Ultimate Spoiler Alert“:

If they [President Obama and Paul Ryan] met, would they resolve their differences? No, but they would understand them better. Paul Ryan believes five things Barack Obama does not. First, he believes that aging populations, expensive new health care technologies and the extravagant political promises have made the current welfare state model unsustainable. Fundamental reform is necessary or the whole thing will collapse, here and in Europe.

Second, he believes that seniors and the middle class cannot be excused from the benefit cuts that will have to be imposed to rebalance these systems. Third, he believes that health care costs will not be brought under control until consumers take responsibility for their decisions and providers have market-based incentives to reduce prices.

Fourth, he believes that tax increases should not be part of these reforms because the economic costs outweigh the gains. Fifth, he does not believe government can nurture growth and reduce wage stagnation with targeted investments.

Obama, meanwhile, does not believe the current welfare arrangements are structurally unsustainable. They have to be adjusted, but not fundamentally altered. He does not believe the seniors and members of the middle class have to suffer significantly in the course of these adjustments. The approach he outlined Wednesday mostly shields these groups from cuts, even if Congress can’t reach a deal on deficit-cutting and a fiscal trigger kicks in.

Obama does not believe in relying on market mechanisms to reduce health care costs. Instead, he would rely mostly on a board of technical experts, who would be given power to force their recommendations upon Congress.

Obama believes that tax increases on the rich have to be part of a fiscal package. His approach claims to contain $3 in cuts for every $1 in taxes, but if you count these things the way a normal person would, it’s closer to 1 to 1. Finally, Obama believes that government investments in research and infrastructure nurture broad-based prosperity.

Personally, I agree with Ryan on items 1-3 and with Obama on items 4 and 5, and I think an acceptable package could be put together to reconcile these views. But I do not believe there is any chance this will happen in the current climate. What’s going to happen is this: We’re going to raise the debt ceiling in a way that fudges the issues. Then we’re going to have an election featuring these rival viewpoints, and Obama will win easily.

Well, we’ll see.

Here’s Paul Krugman opining in the same NYT editorial section, “Who’s Serious Now?“:

The president’s proposal isn’t perfect, by a long shot. My own view is that while the spending controls on Medicare he proposed are exactly the right way to go, he’s probably expecting too much payoff in the near term. And over the longer run, I believe that we’ll need modestly higher taxes on the middle class as well as the rich to pay for the kind of society we want. But the vision was right, and the numbers were far more credible than anything in the Ryan sales pitch.

I doubt that Dr. K speaks for all Americans when he says “pay for the kind of society we want.”

We’re going to find out what kind of society we want when voters go to the polls in November 2012.