It is interesting that theft gets framed in the context of a gun held to the head, when apparently some individuals believe everything (like emergency rooms) are run by magic and don't need to be paid for.  They can go off and use such services, or count on them being there, and if they can pay, feel paying is theft.  So using services and not paying for them is theft, but getting the money to pay for them is theft.

Horseshit. To balance the budget by the end of the decade, you'd have to cut a mere 3-4% in spending each year. And not even real spending cuts, but cuts in projected spending. If you don't think that the government wastes at least 3 or 4 cents out of every dollar, then you are one seriously credulous individual.

If you really believe the tripe you write, how on Earth are (were?) you such a Ron Paul fan?

I think the whole Obama quote thing is just a demonstration of how utterly stupid American politics is. Here in Australia, there is some level of context removal by the other side, but never something so obviously nonsensical.

So instead, I'm going to use my post to talk about what America should be doing about its situation, regarding taxes, debt, etc. How do I justify this? Because some are already discussing it, and because deficits are related to the issue.

The first thing to note is that the entire federal budget is only of the order of $3-4 trillion a year, meaning that this isn't going to be fixed in a couple of years. Now, the deficit in 2011 was $1.3 trillion... you guys are spending somewhere in the vicinity of 50% too much.

So, step 1: Significantly cut the defence department. There are two reasons I say this. One is that it's a source of a lot of waste, and thus simply cutting their funding will force them to identify savings. The other is that American spending on defence is remarkably high as a percentage of the federal budget. America spends 20% of its entire budget on defence... Australia spends just 6%. And note that Australia also doesn't have state militaries, whereas America does, and that spending isn't included in the federal budget.

So you cut the defence department's budget. By 30%, I'd suggest. Their first task would then be to find as many savings as they can without cutting functionality. I'd expect maybe half of the budget cuts can be absorbed without any functionality reductions. Then prioritisation would be applied to cut it the rest of the way. In this way, you reduce the budget by about 6-7%. Note that the net interest on government debt is about 6%, so you've already made a significant dent.

Step 2: Implement a private account system for retirement social security, with a public system as only a fallback. Australia already has this, in the form of "Superannuation". Basically, the money that would have been paid as social security taxes instead go to the person's private account, where they earn interest on it, but can't access it until they reach retirement age, except under special circumstances. This impact will be slower than the last one, but getting it done now will help to reduce deficits in the future. The trust fund you have now should be able to sustain the excess in the meantime.

For welfare, temporarily make a cut comparable to that for the military (proportion, not absolute amount). Again, the focus should be on cutting implementation costs, not reducing benefits. To further reduce welfare costs, examine any spending source that would provide more benefit to the currently-unemployed by employing them to work on infrastructure, etc. Prioritising the unemployed in such work is a sensible step, and should cut welfare without increasing net spending.

Step 3: Identify any discretionary spending that is wasteful. "Wasteful" is defined by two factors - its economic impact, and its social impact, and is only wasteful if it fails on both fronts. Economic impact is most easily examined by the effect on the economy relative to amount spent - sometimes, spending $1 million on a project can boost the economy by $5 million. Other times, it actually boosts it by less than $1 million. If its impact on the economy is less than the amount being spent, then it is economically wasteful.

Social impact is best described as an "impact towards the future" - it basically says that spending on education that has visible impact on learning, for instance, is not wasteful, even if it doesn't positively impact the economy directly. Another example is preventative health spending that reduces need for medical services - the net impact on the economy might be zero, but it improves health in a way that doesn't increase the deficit, and helps more in the long term. If a program fails both tests, then it should be cut.

Step 4: With spending cuts making a strong impact, it's time to boost taxes. American tax as a proportion of GDP is remarkably low, especially compared to spending. The first part is increasing corporate taxes. Corporate tax is only 8% of your current revenue, at $181 billion. For comparison, Australia's company tax (plus a tax on oil profits) represents 22% of Australian tax revenue, or $77 billion (consider that Australia has only 1/15th the population of America). Taxes should be applied to company income made only in America - why? Because otherwise, it encourages offshoring. And corporate tax rate should be higher than typical income taxes in America, but lower than the top income tax rate - this encourages companies to pay their employees more and their top management less in order to reduce the tax burden (in reality, it encourages paying employees more and penalises the excesses being paid to top management).

Now, standardise the sales tax system across the country. It is absurd that there can be states in America that charge no sales tax, or that online purchases can be subject to other sales taxes from the local ones. Standardise across the country, at a reasonable rate. Low numbers are better on sales taxes - 4% looks like a healthy number.

As for income tax, here's how you handle it - for those in the bottom four brackets (up to $178,650), keep the current rates. For those in the next bracket, bump the tax rate by 1%, to 34%. For those between $388,351 and $1 million, increase the tax rate to, say, 38%. Then, for those over $1 million, increase it to, say, 42%. Then, remove any benefits to capital gains tax with regards to tax percentage, but modify it so that capital gains for durations shorter than, say, 3 years, are taxed as though they were only some fraction of the actual number.

What does this mean? It means that you work out how much tax is being paid on regular income, then work out how much would be paid on income + capital gains * x, where x is the fraction. Then, total tax becomes income tax + effect of cap gains / x. As an example, using really simple numbers, suppose that income tax were 10% up to $100,000 and then 30% for each dollar above that. And suppose x=0.6. Now suppose that the person earns $50,000 in regular income and $150,000 in capital gains. Then it's $5000 in regular tax. 0.6 * $150,000 is $90,000, which means the taxable set is $50,000 + $90,000 = $140,000 - that's $10,000 for first bracket, then $12,000 for upper bracket, for a total of $22,000. So, $5000 in regular tax and $17,000 for uncorrected capital gains. Now divide that last number by 0.6, to give $28333.33, which gets added to the regular tax to total $33333.33 in tax. That's an equivalent of 16.67% of total income including capital gains, whereas without the correction it would have been 20%.

I know, it sounds a bit complicated, but it's not.

Anyway, between the changes I've mentioned, you should get to having a small surplus.

I'm pretty sure that most libertarians very explicitly believe that one should pay for what they consume. Of course, we're always told that expecting people to pay for the health care that they consume is wrong and heartless and evil. "It's a right!" and all that garbage.

Requiring people to pay for the services they use is certainly not theft; forcing other people to pay for the services that you use is.

Actually, society working together through government ("by the people, for the people" - something Americans like to say, but apparently don't truly understand) to improve the situation for the least fortunate isn't theft, it's civilisation. And it's not a thankless thing to do, either - more people in better circumstances strengthens the economy, resulting in better quality of life even for the people who are paying higher taxes.

It is a right. But it's a right for a reason. There's a reason why you have a right to health care, but not a right to elective surgery. There's a reason why you have a right to police protection, why you have a right to a basic education, etc. The fact of the matter is, it makes life better for everybody.

Just as a simple example, more poverty and lower education outcomes for the least fortunate creates more crime. Having health care be based on whether you can pay only creates more poverty and more desperation, which drives up crime even further.

Much of it is actually strongly related to Game Theory. For instance, the Prisoners' Dilemma. Look into it, and think about how it might occur in everyday life. Government serves as a way to organise the system in order to get the best result for everybody, instead of the worst. If your government is failing to do that, then it means you need a better government, not a smaller one (as Libertarians are wont to demand).

I've got no idea whether it was a gaffe, Freudian slip or whatever.

There is a pause there... but Obama often pauses in the middle of his speeches.

Though I do think he believes it.

Of course... the truth is... a LOT of what he talks about in that speech... government didn't actually build either... and in a lot of cases... actually tends to make worse. (Schools for example.)

It also ignores the fact that the US government spends on a LOT more then infrastructure. 

If it didn't we'd likely be running budget surpluses.

I feel like you are being sarcastic here...

However, Businesses usually can't adress running deficits by raising their prices...

Buisnesses usually set their prices at the level that will get them the most amount of profit based on demand.

Usually if a buisness tries to raise it's price to escape deficits they end up losing money.

That's why generally, when a buisness is faced with deficits a price raise is the LAST move you'll see.

First they'll

A) Cut costs in productions ANYWHERE they can

B) Change the product.  Either by replacing parts with lower cost parts, or lowering container size for the same price in foods... or raising the amount in a container and raising the price by more.

As can recently be seen by chips by mean.   They went from 99 cents to 1.09.    Chip sales dropped, revenue wasn't as expected, so now pretty much all the local stores instead carry bigger   bags of chips at $1.49.

It isn't a right. Rights are things that are inherent unless someone takes it away from you. Your right to speak freely, for example. You cannot possibly have the right to something that someone else has to provide for you.

Treating things as rights has a lot to do with why nearly every developed country is trying to contain spiraling health costs. Once the government and other third parties get involved, it turns into chaos with everyone trying to make theirs by screwing everyone else. For instance, my 84-year-old grandmother had a doctor's appointment to go in and be told exactly what she had already been told two weeks prior just so that the doctor could get paid by Medicare for a doctor's visit. But for things like Lasik surgery and breast implants that we don't treat as rights, it's almost shockingly expensive. As soon as they do become a "right", as all things inevitably do, a new set of tits will run about $250k.

"Oh, you just need a better government comprised of TOP MEN!" You might pooh pooh the idea of smaller government, but it's a hell of a lot easier to reform a smaller government (not to mention see exactly what needs reforming to begin with) than it is to reform a slovenly gargantuan like the US government.

Naturally. It's a lot easier to hide behind teachers and firefighters and roads than it is to say, "We need to pay off all our constituencies."