Balancing the budget
POSTED: Monday, September 19, 2011 - 6:24pm
UPDATED: Tuesday, September 20, 2011 - 9:59am
The President announced his deficit cutting proposal today, and Republicans say their prescription is better.
So how big is the problem anyway, and where can we cut.
Jimmy Carter’s last budget deficit was 79-billion dollars.
Ronald Reagan’s was 152-billion.
It is now, 1.27-trillion.
So, how the heck did we get here, and what can we do to balance the budget?
Our national debt from 1776 to 1980 was 711-billion.
It is now 14-trillion.
And, when it comes to how we got to this state of affairs, what you believe depends on who you ask.
It’s not like we added a raft of new government programs. It’s just that nowadays, when we do add drug benefits to Medicare, bail out banks, stimulate the economy or fight wars, we just can’t be bothered with paying for it.
The US government takes in about 2.6-trillion dollars in revenue. But it spends just over 3.8-trillion.
And according to the congressional definition of things, some parts of the budget are off limits. Democrats won’t hear of reducing the 491-billion spent on Medicare or 297-billion on Medicaid, even though medical inflation is 7-10 times the normal inflation rate.
Republicans say the 895-billion dollar Defense budget is a no-go zone, even though it is 3 times larger in constant dollars than in 2000, when we last had a balanced budget.
President Obama has now proposed a 4-trillion dollar plan that includes 1.5-trillion in new tax revenue, 580-billion in cuts to mandatory programs like Medicare and Medicaid, 1-trillion by withdrawing from Iraq and Afghanistan and 430-billion in lower interest payments.
It includes the 1-trillion in cuts already approved.
Republicans say, it can be done with cuts only, and the President won’t get his tax hikes.
But the deficit is fully one third of the budget, and social security and interest on the debt are off-limits.
That leaves huge cuts in everything else.
Democrats will fight that.
That leaves it to the so-called super-committee, which will no doubt deadlock as well.
Remember the deficit commission?
And amidst all this talk of budget cuts, the economy is in the ER and near flatlining, in an election year.
We can all do that math.
Congressman Paul Ryan’s plan was dead on arrival in the Senate, and the President’s plan will no doubt meet the same fate in the House.
That narrows down the options considerably.