Budget Debt
The US Government spends about $3.7T a year and generates revenues of about $2.5T a year. A $1.2T annual deficit in 2012. In the last two years, Sequestration cuts and increased revenues have reduced the deficit. Now that Obamacare is underway, forecasts skyrocket for budget deficits. If anyone wants to know why we have a budget problem in this country, all you have to do is look at the running debt clock. We are now at $17T in debt.! But, if big numbers alone don't get your attention, then lets put the $17T in perspective, it represents over 100% of GDP. The nation owed $10.6 trillion on Jan. 20, 2009, when President Obama was sworn in, and he has added another $5.4 trillion since – more than Bush piled up in two terms. There is bipartisan agreement that we cannot sustain this level of debt. There is also bipartisan agreement that we must correct the outflows exceeding inflows that drives the debt higher every second (see debt clock) . Everyone who manages a checkbook has seen this problem before and knows how to correct it - reduce expenses and increase income. Increasing revenues is critical to the solution, but will not have an immediate impact. Reducing expenses is also critical to the solution and can generate immediate impact. It is the only thing in your control instantly! Everything else we here about this subject beyond these two facts is just noise and should be ignored. The political left and right cannot agree on how to correct this problem. Doing something is also better than doing nothing, which is what this stalemate is giving us now. The left solution to our problem is to increase taxes on the rich to increase income. Currently the top 20% of income earners pays 80% of the federal tax burden. So do we want them to pay 100%? 110%? 120%? Maybe just write the check every year for the entire cost of government, whatever it is? Clearly this is not the solution. The right wants us to reduce spending and taxes, which is also a poor solution in a recessionary economy. But the truth is we must do both (reduce expenses and increase income), we must do it now and it will not be easy. All the political hot air outside these two facts is simply a distraction from the difficult but obvious answer. Europe is going through this right now and they are struggling mightily with the anticipated pain of the solution that in their hearts they know is necessary. To increase income we must immediately restructure the tax code to foster a growing economy. A growing economy will increase income (tax revenues for the government) over the next 10 years, but not immediately, this is a delayed impact. To immediately begin to impact our budget and debt problem whiling anticipating increased revenues we also must immediately and dramatically cut spending. That MUST include discretionary spending AND entitlements which represent 90% of the problem. The left will say you are hurting education, the homeless, healthcare of all Americans, the elderly and on and on. The right will shout "we are already taxed enough". All This whining MUST be ignored. No one wants to hurt themselves, their families or their neighbors We have no choice but to intelligently make these difficult decisions while minimizing the pain. But there will be pain. And our representatives MUST ACT NOW. It is a dereliction of duty if they do not. Below you can watch the ongoing debate on this critical issue. And hopefully see the solution we need develop.

Bipartisan Pushback Greets Trump’s Proposed Budget

5/24/17
Trump budget gets self-serving reactions from both sides of the aisle based on impact to state projects.

from The Wall Street Journal,
5/23/17:

White House’s $4.1 trillion spending blueprint relies on economic growth of 3% by 2021.

President Donald Trump faced swift resistance from Democrats and a range of Republicans on Capitol Hill on Tuesday after offering a 10-year plan to balance the federal budget that depends heavily on cuts to government safety-net programs and expectations of a big gain in economic growth. The White House budget proposal for the 2018 fiscal year that begins Oct. 1 would cut federal spending by $4.5 trillion over 10 years. But it leaves mostly untouched the big entitlement programs—Social Security and Medicare for retirees—and proposes increases to infrastructure spending, a new parental leave program and a short-term boost to military spending. With those priorities set—in addition to the shared Republican goal of cutting taxes—the White House offered up significant reductions in other spending programs to further the aim of reducing budget deficits. But the call for rolling back programs that touched their constituents made lawmakers bristle. The proposal, which serves as a recommendation to Congress, is likely to be largely rewritten when lawmakers craft their own budget resolutions in the coming months. “I hate to say it, but I would say the budget was dead before the ink was dry,” Rep. Don Young (R., Alaska), who opposes the budget’s elimination of two programs in his state.

Payments to Medicaid, the federal-state health program for the poor, would be cut by more than $600 billion over a decade from levels projected under current law in addition to proposed Medicaid cuts under the House bill repealing and replacing much of the Affordable Care Act. The food-stamp program would be cut over 10 years by $193 billion, the student-loan program by $143 billion, disability payments by $72 billion and farm subsidies by $38 billion. “The proposed cuts to some federal programs are not mere shavings; they are rather deep and harmful to my district spanning Kentucky’s Appalachian region and other rural, impoverished parts of the country,” Rep. Hal Rogers (R., Ky.), a former chairman of the House Appropriations Committee, said of the proposal. Democrats blasted the overall budget proposal. “This is the budget you write if you think working families have it too easy,” Sen. Ron Wyden (D., Ore.) said. Mr. Trump’s budget risks alienating at least some of his core voters who rely on programs that he is proposing to cut. Rural white voters are among his staunchest supporters, the latest Wall Street Journal/NBC News poll shows. While the president’s overall approval rating was 39%, 52% of rural voters said they approved of his performance.

More From The Wall Street Journal (subscription required):



365 Days Page
Comment ( 0 )
Leave a Reply
Name*
E-mail*
Comment