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 five years, Sequestration cuts and increased revenues have reduced the deficit. 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 $20T in debt.! But, if big numbers alone don't get your attention, then lets put the $20T 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 doubled it – 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 a solution. The right wants us to reduce spending and taxes, which was also a poor solution in a recessionary economy, but in a growing economy in 2017 has promise. 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. To increase income we must immediately restructure the tax code to foster a growing economy. Trump did that in Dec 2017. A growing economy will usually increase income (tax revenues for the government) over the 10 years, but not immediately. The Trump tax reform due to money overseas that will be returning home, will have immediate positive revenue impacts. 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 (Social Security, Medicare & Obamacare) 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. The 2 year budget passed Feb 2018 does not do this. It was a purely bi-partisan negotiation (which is good) but gives everything to everyone and makes no tough decisions on spending. Below you can watch the ongoing debate on this critical issue. And hopefully see the solution we need develop.

Congress Passes Mammoth Spending Bill, Averts Shutdown

3/23/18
from The Wall Street Journal,
3/23/18:

The $1.3 trillion budget bill now goes to President Donald Trump for his signature.

The Senate passed a $1.3 trillion spending bill early Friday, acting to avert a government shutdown with less than 24 hours to spare and bringing to a close a messy negotiating process over the sprawling measure. The bill, which now goes to President Donald Trump for his signature, would lift military spending by $80 billion this year and domestic programs by $63 billion, a decision lauded by defense hawks and criticized by lawmakers frustrated by its impact on the deficit. White House officials said Thursday that Mr. Trump would sign it.

The vote was 65-32 and followed House passage on Thursday. Twenty-four Republicans voted against the legislation, led by Sen. Rand Paul (R., Ky.)

Senate Majority Leader Mitch McConnell (R., Ky.) depicted the bill as “legislation that neither side sees as perfect, but which contains a host of significant victories and important achievements on behalf of the American people.”

The repeated delays left senators tired and angry. “This is a ridiculous process,” Sen. Bob Corker (R., Tenn.), demanding that Mr. McConnell explain on the Senate floor “what has occurred over the last 11 hours” that prevented the Senate from voting. Mr. Corker voted against the spending bill. The biggest problem for many Republicans was the size of the spending package. “I’m really troubled by the increased spending in this bill,” said Sen. David Perdue (R., Ga.) who was undecided on the bill Thursday as he weighing its advantages for the military against its impact on the debt. Democrats celebrated victories in the spending bill, including higher spending for infrastructure, opioid research and treatment, the National Institutes of Health, Head Start and child-care programs. “This is a bill that puts the middle class and those struggling to get there first,” said Senate Minority Leader Chuck Schumer (D., N.Y.)

More From The Wall Street Journal (subscription required):



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