How to balance the budget in the age of exploding underwear

How do you win a war against an enemy that wears exploding underwear? This is just one of the seemingly unanswerable questions faced by President Obama after a turbulent first year in office.

While the deficit is expected to reach $1.6 trillion by 2011, the President's proposed budget would increase military spending next year to $750 billion, up from around $720 billion this year. To put this in perspective, military spending will be 26 times the outlay for humanitarian aid and development assistance and six times the outlay on education.

Government programs such as Medicare, Medicaid and Social Security, along with military spending, take up pretty much all the tax revenue of the Federal Government. That explains why we won't be returning to the moon anytime soon. While we can put off for a decade or two our need for a Starbucks on the moon, we can't discontinue most other spending, much of which is needed for national security or to keep the economy from collapsing. That is why we are in so much debt to the rest of the world, mostly China. Some things we can't cut: homeland security, unemployment compensation, infrastructure such as roads and bridges, environmental protection and conservation, emergency relief and reconstruction (from natural disasters like Hurricane Katrina), and the judicial and penal systems. Programs such as food stamps and other welfare programs are needed, even though some people would like them to go away.

The best example of gridlock in Washington is the battle for health care reform. Most of those who swept Obama into office were in favor of a major overhaul of the health care system. Even the public option was thought of favorably by a majority of Americans. Even most Republicans agree that the status quo is unsustainable, and others, like Sarah Palin, are just plain misinformed...or worse. She talks of government “death panels” as if she actually believes it. The sad part is that she probably does. Many Americans believe what they hear, especially when it comes from Palin, who is now more of a rock star than a politician. Palin is trying to position herself as the Republican nominee for the 2012 presidential election, but although she has a loyal following, it's not big enough to win.

Comedian/talk-show host Bill Maher has challenged Obama to “stand up for the 70% of Americans who aren't crazy”. I assume he's referring to the other 30% of Americans who support Sarah Palin or listen to Rush Limbaugh. And don't forget those who believe Dick Cheney knows what he's talking about. Maher, though, had harsh words for Obama. He called the current administration “cowards” for not fighting back hard enough against right-wing attacks on everything from end-of-life counseling (i.e. Palin's “death panels”) to Obama's speech to schoolchildren, which the far right warned was an indoctrination to socialism and a viral spread of liberal propaganda.

As for his criticism of Obama, Maher had a point. Obama has said he'd rather be a “really good one-term president than a mediocre two-term president." If that's really the case, Maher points out, why is Obama trying so hard to win over his “delusional” critics, the “sentient majority” as Maher calls it. Maher makes a lot of sense, but it is safe to assume it's easier being a comedian/talk-show host than president of the United States.

Obama is the first to agree that his first year in office wasn't a complete success. But even Bill Maher agrees that we would be in a lot worse shape had John McCain and his side-kick Sarah Palin been on the winning side. In this age of government bureaucracy and partisan political in-fighting, there is a lot that Obama has accomplished. The economy, for example, would be in much worse shape had Obama not stepped in with government stimulus money and help for the banking and auto industry. For example, did he move too quickly, not regulating bonuses for bailed out company's executives? As Sarah Palin would say, “You betcha!” But Obama averted something that could have been much worse – a depression, or at least a more severe recession.

A short-term and effective boost to the economy was Obama's $787 billion stimulus package, which included a $288 billion middle-class tax cut, $275 billion to bail out financially strapped states and a large-scale infrastructure plan. Addressing House Republicans at their annual policy caucus in Baltimore on January 29, the President noted: “A lot of you have gone to appear at ribbon cuttings for the same projects you voted against.” As Obama's approval rating declines, it's clear that much of the public isn't paying attention to the Republicans' obstructionism and hypocrisy.

Well into his second year in office, now is the time for Obama to reclaim his popularity. After all, as Bill Maher has said, there are 70% of Americans who aren't crazy. So how does Obama govern from here on?

First, we must answer the question: How do you reduce the deficit without raising taxes? The answer: Apparently you don't.

If Obama truly believes his statement about being a one-term president, he may need to take a cue from George H.W. Bush, who famously said, “Read my lips,” when declaring that he wouldn't raise taxes, and then changed course. Even if we immediately pulled our troops from Afghanistan and Iraq, we'd still be deeply in debt. Health care costs are still spiraling out of control, including Medicare and Medicaid, which could surely be made more efficient. But even in the area of health care reform, where doing nothing isn't really an option, we're fighting an uphill battle. How do you offset the rising bills that are inevitable, given our aging population? The good news is that because of medical advances and new technology, every child born today will have a 50% chance of reaching 100. The bad news is, what happens to Medicare, Social Security and other government services? Even if we reform the core entitlement programs, we're not going to be able to see any substantial savings. Eliminating the infamous earmarks would save less than 1% of the budget deficit.

Obama's campaign pledge of tax cuts for all households earning less than $250,000 per year got a lot of votes. That promise is not feasible if the government is going to bring back some form of fiscal responsibility. There is no way to close the budget deficit by merely cutting waste and taxing the wealthy.

America is living like my 18-year-old son. He's got a good part-time job for $8.00 an hour, but he hits me up for $20 a day for things like food, clothes, headphones and sneakers. He's living beyond his means. He's spending more than he's making, and he'll probably repay me someday when I'm 90 or 100. To complicate matters, he's planning to go to college, but doesn't quite know or care who's going to pay the $53,000 a year in tuition. The only way he can afford his lavish lifestyle is by still living at home. When he leaves for college, it will be a different matter. He'll have to take out student loans, guaranteeing that when he graduates, he'll owe $200,000 plus, and the only thing he'll be guaranteed is his $8.00 an hour job. I guess he won't have enough money to repay me when I'm 90 or 100, so I'm on my own. President Obama is in a better position than my son, however. Not only can he set this country on a path of fiscal responsibility, but he can help college students and the elderly, the two groups most impacted by our country's staggering financial inefficiency.

When our children are older, will they still be dealing with the financial burden of the previous generation? That's a tough question. Obama must make decisions that can somehow be explained to the American people so that they don't start believing the rants of people like Rush Limbaugh and Glenn Beck. If Sarah Palin can so eloquently explain the falsehood of “death panels”, why can't the Democrats expose the truth?

Still, the biggest question remains: Does it really take $750 billion to stop a bunch of fanatics who are trying to build a better underwear bomb?

Majority Trust Obama To Solve Health Care Crisis

Nearly 46 million Americans have no health insurance, and another 25 million are underinsured. Total health care spending in the United States averages $6,714 per person. Compare that to the United Kingdom, where the cost is $2,760 per person, or France, where the total is $3,449 per person. And if you think we're getting better health care, you're wrong. The United States ranks 50th in life expectancy, and 44th in infant mortality rates, according to most reports. So what exactly does President Obama plan to do? A major point of his plan is to create a government-sponsored health insurance program that would be available to all Americans, much like Medicare is now offered to Americans over age 65. He wants everyone to be able to get insurance at a reasonable rate, even if they have pre-existing conditions. Employers are able to get cheaper rates than individuals because they pool their employees together, therefore the cost is spread around, and people with pre-existing conditions are included. But more and more employers have stopped offering insurance to employees because of the high cost, and more people are being laid off and left to their own resources. How does the president plan to pay for his plan? He wants incentives for people to use preventive services and wellness plans. The best way to keep costs down is to not get sick in the first place. Obama wants doctors, hospitals, and patients across the country to make prevention the top priority, as opposed to curing illness with pills, tests and procedures. He has already identified "hundreds of billions of dollars" worth of savings in the federal budget that could help finance health care reform. Much of his attention is being paid to root out waste and fraud in the Medicare and Medicaid programs, and he wants to reduce tax deductions for high-income individuals. In addition, he wants to standardize and computerize medical records, which will save millions of dollars in the long run, but will cost individual doctors up to $36,000 per physician, which includes the costs of servers, computers and software. Obviously, many doctors and the American Medical Association are against a universal electronic medical record system, even though it will save money in the long-run, but can prevent mistakes and keep patients from taking unnecessary medications or duplicate medications. Republicans are against a government-sponsored health insurance program for all Americans. They are afraid that employers would opt for the government option, which would be less expensive, but they say it would also be lower in quality. Both Obama and Senate Minority Leader John Boehner, who speaks for Republicans, agree that no insurance plan should deny coverage because of pre-existing conditions. Neither side, however, has explained how insurance companies would be forced to insure people with pre-existing conditions. That's what makes the issue of health-care reform so complicated. Until we get answers to questions like this, we shouldn't be blamed for skepticism. Most people believe that Obama, who is known for his intellect, is listening to his advisers and medical experts, and has options that he's weighing. The American Medical Association said that while it believes in health-care reform, it "does not believe that creating a public health insurance option is the best way to expand health insurance coverage." Other medical groups, however, support Obama's plan. The National Physicians Alliance, the American Academy of Family Physicians and other groups this week put out a statement of support: "Having the choice of a public health insurance plan will help make health care more affordable for patients, foster greater competition in the insurance market and guarantee that quality, affordable coverage will be there for our patients no matter what happens," they jointly wrote in a statement. While the AMA won't budge, and individual doctors are still balking at the high cost of things such as universal electronic medical records, the support of these groups is encouraging. Pretty much everyone, including the AMA and the Republican party, agrees that reform is needed in the health-care system. A new Gallup poll showed that 58% of Americans trust President Obama to make the right decisions. Let's hope they're right.