Saturday, June 4, 2011

How To Reduce the Federal Budget Deficit: It's Not Rocket Science

When you look at polling most Americans want spending cuts to reduce the deficit, but when you get to the actual spending items most Americans do NOT want to see cuts to Medicare, Social Security, education, or fighting terrorism. Without radically cutting those items you can never meaningfully reduce the deficit without raising taxes.

We had a balanced budget in 2000. Four things moved us from balance to record deficits:
  1. The Bush tax cuts

  2. Unfunded wars (Afghanistan and Iraq) paid for through supplemental spending bills, not included in the regular budget process by the Bush administration

  3. The Medicaire prescription drug benefit

  4. A deep recession

When I talk about the wars, I would argue that we have won absolutely nothing in Iraq, where violence is on the rise and most Iraqis see America as the enemy. We also can't win anything in Afghanistan. It's time to get out of both places expeditiously. This is one area where Rep. Ron Paul (R-TX) is right. We also need to look at how valuable other overseas troop deployments are and how many are cold war relics.

I like lower taxes as much as anyone, but... eliminating the Bush tax cuts for everyone slashes $4 trillion from the deficit and would have the largest impact in terms of getting our financial house in order.

2 comments:

srlinuxx said...

Higher taxes during a recession is economic suicide. Besides, most of these "millionaires and billionaire" that make over $250,000 a year are small business which are already being ruined by over-regulation, obamacare, and yes, high taxes.

On the wars - yes they're dragging on too long but don't forget we were attacked. We had to respond. Besides, folks were crying out for blood in the days and months following the attacks - well except for the radicals that said we deserved it. Besides, it's kinda hard to keep throwing those wars up as a problem when obama started his own nice little war in Libya who posed no threat to the US. It was none of our business. And it, unlike Bush's wars, is illegal. obama should be impeached.

The "medicare prescription plan" has come in under projected budget and was a response to the democrat plan that would have costs many times more. If the democrat plan had been passed, we wouldn't be hearing one complaint about it now would we?

The recession was caused by the democrat bill that (yes bush signed) forced banks to lend to those who could not afford to buy a house and told freddie and fannie to guarantee. When you sweep away all the layers of blame - that's the root cause -> liberal democrats and their social justice agenda. And boy oh boy, obama doing a bang up job fixing things ain't he?

Caitlyn said...

Someone has been drinking the right wing Kool Aid and doesn't know the difference between propaganda and facts.

I'm a small business owner. So is my brother. Most small business owners don't earn anywhere near $250,000, sorry. Those that do can do perfectly well with the 1990s tax structure. Besides, I didn't indicate that I wanted to roll back the Bush tax cuts only on the wealthy. I said for everyone.

Right now taxes are at historic lows as a percentage of GDP, both for individuals and businesses. See this article by Bruce Bartlett, a domestic policy advisor to President Ronald Reagan and a top treasury official in the George H.W. Bush administration: http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/ Gary Ungar did a piece on the Bartlett article for Forbes which is an excellent bit of analysis: http://blogs.forbes.com/rickungar/2011/05/31/top-reagan-advisor-calls-out-the-gop-for-lying-to-america-about-taxes/

Over-regulation? It's the insane deregulation of the financial industry in general and the housing market in particular that caused the 2008 economic crisis in the first place.

The healthcare bill you label as "obamacare" actually reduces the deficit according to the non-partisan Congressional Budget Office. Sorry, you're wrong their again.

Regarding the wars: we were attacked? From Iraq? Not hardly. That justification works for Afghanistan, not for Iraq. Bush all but dropped Afghanistan in favor of Iraq and made a total hash of both.

Someone needs to read up on Constitutional law. While I oppose going into Libya the President had the authority as Commander In Chief to order our troops there. The War Powers Act has never faced a constitutional challenge and based on recent Supreme Court rulings likely would not. It certainly isn't illegal and only a dyed-in-the-wool right winger would call for President Obama's impeachment.

Your analysis of the cause of the recession is all wet at best. As far as President Obama, yes, he is doing a much better job with the economy he inherited from the Bush administration than the slash and burn Republicans would do.