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To: Sunny Jim who wrote (46470)	2/16/2009 12:52:35 PM
From: KyrosL	Read Replies (1) \| Respond to of 218534

Raising taxes and cutting benefits has been done numerous times in America. Social Security retirement ages were raised not too long ago -- Greenspan was actually the head of the bipartisan commission that did it. And taxes have been raised numerous times in the last century. Before Reagan top marginal tax rates were something like 70%. During WWII top marginal tax rates were raised above 90%. Crises are excellent times to cut benefits and raise taxes. Here is a graph of the top US marginal rates. As you can see US politicians can raise taxes dramatically, as well as cut them, especially when they face a crisis. More here: truthandpolitics.org

To: Sunny Jim who wrote (46470)	2/16/2009 9:15:45 PM
From: energyplay	Respond to of 218534

Some parts are easy, they just take time and a functional economy- >>> "Raise taxes, cut benefits, and lower medical costs. You make it sound so easy. Let's see how our politicians deal with that. LOL " <<< Most income taxes in the US are to some degree progressive, the more money you make, the higher your marginal tax rate. Almost every other tax tends to be a flat percentage. So a little inflation will go a LONG way. This was seen in the 1970s and 1980s. Maybe 10% price and wage inflation --> 15% higher tax revenue. Now most benefits are tied to the CPI, Consumer Price Index, which is fixed so it does not really represent inflation. Maybe 10% price inflation --> 7% higher benefits - and this is usually delayed about a year or 18 months after the price changes. So a moderate amount of inflation - say 35% over 8 years -- will come much closer to balancing the Federal budget on a cash basis. This will mean less borrowing by the Federal government, especially less short term borrowing. This will tend to bring interests rates down from where they will be going in a few months. **** The medical side get fixed with a certain amount of slight of hand. Most European nations have lists of drugs they will pay for a given condition. Medicare has a similar list. Just by being slower at approving new treatments, most of the expensive drugs will become cheaper generics, and costs drop. There are many other games that can be played, but basically most people will get care roughly equivalent to what they get today five or ten years from now, and doctors and medical companies will get less money. Expect more foreign doctors and nurses. We can expect some limitations of trial lawyers awards ( California has this now), and limitations on "unneeded" diagnostic tests. Unneeded is in quotes for a reason. The liability costs and 'defensive' medicine practice will be reduced, and that can easily be a 7% cost reduction. The losers, beside the trial lawyers, specialist doctors, nurses, drug companies, etc. will be people with good medical insurance coverage who are not being smart and aggressive about managing their health care. Sort of like Canada is now - the system is somewhat okay, but for some conditions you need to go the the US. If you don't know enough about your condition to figure out where to go in the US, you lose and have to wait in line... The richer and/or smarter fraction who are willing to game the system, or pay for various alternatives, will tend to be okay. If they are not okay, they will sue, lobby, apply political pressure, etc. until they get something close to what they want. And these people are similar to many of the people on Obama's campaign. **************** All this happens after the economy is back on track.