ObamaCare & SCOTUS

ObamaCare is flawed. No question about that. But when one side gets to push its own agenda while the other side refuses to participate, then flawed is the result. But that’s not the issue. The real issue that neither party will face up to is that as long as OUR generation continues to cash in at the expense of the next and refuses to pay taxes for the services that it enjoys then we have a fiscal disaster looming before us. Benefits have to be cut and taxes have to be raised. As long as one side refuses to raise taxes and the other side refuses to cut benefits then no progress is possible and disaster draws closer. Given that, today’s decision by the Supreme Court was irrelevant in the larger scale of things. What does matter is whether we begin to tackle the cost of healthcare. Continue reading

Government finances — in denial

Today’s newspapers brought some astonishingly sad news about the state of economic education. David Leonhardt writing in the New York Times (The Gridlock Where Debts Meet Politics) is picked up in the Dallas Morning News under the better title “Voters won’t do the math.” The point being made in the articles is that there is simply not enough money in the system to pay pension and healthcare benefits for retirees. Continue reading

Balacing the (operating) budget

My opening shot (!) in an ongoing series that I plan on the federal deficit:

All the talk about a balanced budget ignores the fact that the government is on a cash basis in which all expenditures are treated as outflows of the period. In regular for-profit accounting, the payment of a salary is treated as an expense while the acquisition of a building, say, is treated as an investment. Government does not make this distinction. Were businesses to keep their books the way that the government does, a large number of them would be running a deficit. Yes we desperately need a balanced budget but it needs to be a balanced operating budget. Anything else is nonsensical and shows a sad misunderstanding of government accounting. Continue reading