The bottom line-- the US is spectacularly broke-- more broke than the worst shopaholic with 50 maxed-out credit cards:
The historical perspective is that spending has skyrocketed since the 1930s:
During this time, tax revenues have grown roughly in line with GDP:
TARP hasn't been what's busted the budget:
Defense spending hasn't busted the budget (though it could be lower):
Entitlements grew 4 times faster than GDP:
It gets even worse. Unfunded future entitlements dwarf what is in the budget today:
There seems to be little choice but to cut entitlements along with scaling back the government bureaucracy in general. Currently, we are in better shape financially than the U.K., Spain, Ireland and Greece, but in worse shape than Italy, Germany, Belgium, France and Portugal:
Please urge your local Congressman to cut Federal spending, and reduce the size and scope of government. It's for the kids and those that come after us. Let's not leave this country in financial shambles because of our selfishness in demanding that a paternalistic government take care of us, instead of us taking care of ourselves.
The entire study can be found here:
USA Inc. - A Basic Summary of America's Financial Statements
I need some help here.ReplyDelete
Before the crisis the deficit was $600 billion. Now it is $1.3 trillion. The crisis more than doubled the deficit. So it seems to me a lot more is going on than TARP or entitlements.
Secondly, Clinton had a surplus budget as "far as the eye could see". In fact, none other than Chairman Greenspan worried that all Treasury debt would be eliminated and he would not be able to manipulate the price of money.
Perhaps the tax cut was a mistake? Perhaps funneling our resources into McMansions and bus sized SUVs wasn't really in our best interest. Maybe going down the road of a 24/7 entertainment society is part of the problem.
Just maybe the man and woman who worked for 45 years paying into a system to receive a safety net payment and some help towards medical costs in old age aren't the problem.
The average worker's real wage is going nowhere and the rich keep getting richer, just like in the 1920s. Is this what we want?
First off, I doubt you need any help.ReplyDelete
I view the budget deficit as the #1 national security threat to the country, much greater than terrorism and anything else you can think of, and the most dangerous people in the nation sit in Washington, DC working hard at gifting taxpayer money to their friends and constituents.
Where did the peace dividend go after the end of the cold war? When Congress constrained spending during the Clinton years, we eventually ended up with a slight budget surplus. It didn't take Congress and two absolutely horrible Presidents long to turn victory into defeat.
How did they do it? By continually raising government spending faster than revenue was coming in and attempting to Europeanize the US with a whole range of nanny state programs and gigantic buracracies.
To quote Ringo Star: "Everything government touches turns to crap." So why is the governemnt in the business of subsidizing housing and guaranteeing mortgages? Why did the government grant itself a monopoly over the student loan business? Why is the government paying for anyone's healthcare but those who are unable to earn a living? Why does the government mandate a forced retirement savings program on its citizens only to raid that program to pay for its day to day expenses? Why does the governemnt pay farmers not to grow crops? Why does the government build bridges to nowhere? Why does the government sponsor any kind of art? Why does the government spend so much more today than it did 100 years ago? Why do the taxpayers have to pay for the national defense of Europe and Japan? Why don't these rich countries pay for their own defense? Why don't we repeal the 16th Amendment and institute a national sales tax and do away with all this class warfare nonsense? What business is it of the governments how much money any citizen makes? To take an idea from Rand Paul, why do the Departments of Education, Energy, and Housing and Urban Development even exist at all? Some would argue the same thing for Department of Commerce.... it just goes on and on.
I don't agree with Ringo. I see some things that government does that are extremely valuable. I agree with John Rawls who argues that we are all prejudiced and the only way we could give an unbiased opinion would be if we were unborn and didn't know if we would be a minority or disabled etc. Ringo's a zillionaire who has never had to wonder why he couldn't get into one of his concerts because he was in a wheel chair or similarly disabled. Maybe if Ringo hadn't been blessed with an enormous talent and won the lottery of meeting the most talented musicians of his generation, at exactly the right time, he would see things a bit different.ReplyDelete
People who are smart, energetic, and healthy resent any constraints put on them. Hey let Microsoft do what it wants!
I'm Treasure of the local National Alliance on Mental Illness and hear the stories of families who had nowhere to turn when a family member has a mental illness. This non-profit is subsidized by taxpayer dollars. I understand that people would resent it- at least until they need the service. The point is that there is no private company that will provide this service to low income people. Still I see it as extremely valuable as it benefits the whole community.
To me people need to meet in the middle. I know billionaires think they should keep every penny they have made and that they have done it all by themselves. I know there are others who think that the unemployed would be helped if only they were guaranteed to have nice housing at $100/month.
The problem is that these extremes aren't going to get us any closer to solving our financial difficulties IMHO
Rather than cutting token amounts defunding public radio, cut areas which really would make an impact. Defense.ReplyDelete
To me the big problem we had and Japan had is that when the economy was doing fine (this includes when GDP is rising 1.5% etc.) the government spent more than it brought in. Even the much villified Keynes would be aghast at that. Then when the U.S. was on the brink of going over a cliff and we have a Great Recession with people pulling money out of money market accounts, all the big investment banking firms in dire straits, and even the world's biggest insurance company about to go down, a massive stimulus was needed. Japan is in the same situation today with massive debt overhang and the need for extreme government spending.ReplyDelete
The U.S. economy is now improving and jobs are being created. Now is the time to make meaningful cuts - as MoneyCone suggests. This includes extending the retirement age for Social Security and cutting back on benefits. The Grouch is right on the big government entities but I'm not sure getting rid of them is appropriate. I know the Department of Energy for example collects a lot of valuable data that isn't collected in the private sector . I'm sure the Department of Education does something useful but I can't seem to recall it just now:)
Just to clarify..... I'm not one who believes in no government, just smaller government, less expansive government, confined to those areas where it is effective (which I know is open to debate). I also believe the time to make cuts is now, though we'd probably disagree on how much and in what areas. I think every area of government needs to be questioned as to whether it is necessary or not, but I'm under no illusions that anyone in either party will do this. For example, The Department of Education doesn't educate a single child, but dishes out a lot of money and regulations while overseeing the decline of education throughout the nation, and the Department of Energy produces zero kilowat hours of power, and has largely failed at its original mission of creating a comprehensive national energy policy following the energy crisis of the 1970s, but it does regulate the nuclear power industry and fund global cooling, I mean global warming research as well as any other scientific projects the government deems worthy. Should taxpayer money be used is this way? What we have now is not exactly what Jefferson wished for the nation with a "wise and frugal government."ReplyDelete
To get an idea of how large our defense budget is, look at the first graph from this wikipedia page:ReplyDelete
I read somewhere that our budget is more than the defense budgets of all the countries put together. Looking at this graph I can believe that.
If the US wasn't paying for a large portion of the defense of Europe, Japan and helping Korea out that picture might look different. There are plenty of opportunities for cutting Pentagon spending and reducing waste, fraud and abuse, just as there are in every Government agency. Let's start somewhere, anywhere. It's almost beyond belief our illustrious leaders can't even come up with a half of a percent cut in a $3.7T budget. It just tells me there is no will to do it and little concern about the amount of debt being racked up.ReplyDelete