The Republicans want to cut 100B, the Democrats want to cut, what, 5B? The decicit is measured on a WHOLE OTHER ORDER OF MAGNITUDE.
They are both just rearranging the deck chairs. Helloooo?!? Wiemar Republic? Zimbabwe? Yah, just keep borrowing and printing money.
The currency is going to collapse, and with it, our society.
Well, no fix will do it in one go.
Imagine you have a mortgage and car loans. You may be in debt for $300,000 but only make $50,000/year. You cannot possibly pay off your debts in one go. What you do instead is chip away at it over time. Eventually you’ll get to zero but it may take 30 years.
The biggest issue is stopping the debt from growing further. Unfortunately in a shaky economy government spending is the route out. Unfortunately that makes the debt balloon even more.
It then becomes a calculation on what is worse. Increasing the debt or tanking the economy and losing tax income as a result and having to pay more in unemployment and welfare and all that stuff.
Needless to say that last part is argued about a lot.
Eh, the problem isn’t as bad as people are making it out to be. Assuming the economy goes back to 2005ish levels as the recession ends, then allowing (all of the) Bush tax cuts to expire pushes the deficit level down enough so that total debt as a portion of GDP will shrink. And happily the tax cuts ending is the default, Congress doesn’t have to do anything except yell at each other and refuse to compromise.
In the longer-term rising medical costs will push the deficit back up again, but unfortunatley thats more a problem of arresting the exponential growth of medical costs then it is a problem with the federal budget.
Why hasn’t it collapsed yet? When, roughly, is it going to collapse, in your view?
We are also reducing the war costs significantly.
This needs a combination of cutting spending, raising taxes and a growing economy. Need to fix all three and there are definately contradictions between the three.
There’s also the issue of the fantastic orgy of recklessly cutting government services and the impact that has on the future.
I’m not so keen on the economic prospects of a country that wants to end Head Start for hundreds of thousands of children, creates a class of workers who cannot receive job retraining for industries put out of business by unfair trade practices, slashes investments in fixing unsafe roads and bridges, stiffs college students who thought they were going to get financial aid, and eliminates 700,000 jobs at a time when the economy is still fragile.
Even the bipartisan deficit review commission, which made enormous concessions to fiscal conservatism by dictating that there should be three dollars of spending cuts to every dollar in raised revenue, said that we shouldn’t do anything stupid, like indiscriminately cut huge amounts of spending, for two more years so the economy has time to recover.
Anyone who supports the massive spending cuts the House proposes either wants us to return to a recession, or they have no clue what they are suggesting.
Yes, that is the worst thing we are doing now. We can’t cut welfare for old people and corporations*. The only things anyone are proposing we cut are stuff that has a positive economic outsome in the long run such as infrastructure and education.
*Which isn’t to say that all such hand-outs are not economically beneficial. For instance, keeping people who paid into social security from starving in the streets has the economic benefit of keeping the social contract so the government will be trusted (because they paid into the system and are expecting some back,) and keeping money flowing through the economy since they will be spending it. But the latter doesn’t apply to already well-off people who have already gotten back more than they put in to SS.
And, for instance, if we were in danger of not being self-sufficient in food I could see farming subsidies remaining. But we’re not.
And there isn’t all that much of that to be cut to do much good.
So, if you’re a republican, completely shit canning HHS, Education and HUD will net them $191.1 billion in savings. I seriously doubt they will kill Justice or Agriculture. Sure as shit they won’t touch Defense beyond little cosmetic, feel good tweaks. Defense is Big Business.
Now, consider the Bush tax cuts which were extended:
So, averaged out to a per year cost that is $370 billion/year.
The math is not hard on this one but to hear the Republicans talk about it we NEED to cut MOAR! :rolleyes:
I can’t get my talking points straight. Is SS a socialist waste of money where we get back more in benefits than we put in, or is it a ripoff because we would have made more money investing the money ourselves?
Heh. Better split the difference and keep the socialist aspect by forcing us to invest, but we can please our corporate masters too by forcing taxpayers to go through a select number of our favorite mutual fund companies. They can manage our money better than we can, after all. After all, look how well the major financial institutions weathered the housing and subprime mortgage crisis.
I thought we had already sunken below oblivion.
I saw Lester Thurow being interviewed on some TV program around 1999. He admitted at the time that the economy was in a state that he did not understand. I had read his book Zero-Sum-Society long before that but that interview raised my opinion of him.
The only reason the system keeps going is because nobody understand how it works and everybody keeps going through the motions. John Maynard Keynes never saw a consumer society based on television brainwashed consumerism.
The politicians don’t know what effect their policies will have. What can they do? Fire 75% of government employees? We may just end up with a confused slide into chaos. Imagine being 10 years old now and still believing that adults know what they are doing.
psik
It sounds like we need to look at what we call “non-discretionary” spending. Families have to make these tough choices every day. Cutting HHS, HUD, and Federal Education Spending would be a good START.
The question should be are we going to cut taxes until the government is no longer functioning and the rich have all the money and power?
I suppose raising taxes and pulling our guys out of Afghanistan and Iraq because we cant afford it would be wrong for some reason.
That’s why I think that the mortgage and car loan analogy is never applicable to this situation. When you or I take out a mortgage or car loan, there is an amortization sheet that specifies when all of that money will be paid back, interest and principle. The government is taking out new mortgages and car loans every year and making interest-only payments.
This is not like paying your 30 year mortgage in 5 years. The first step is not taking out a 2nd, 3rd, 4th, and 5th mortgage. Only then do we even talk about paying down in 30 years.
Yeah! We have too many under-educated people who can’t find jobs, and not enough educated people.
Let’s make it harder for people to go to college and see if that helps!
Sure, and cutting spending in a draconian way is also kinda like selling your car to make ends meet, even though you’ll need that car to look for and then commute to work in.
Well, that starts a new debate on how helpful these loans have been. Since they are so readily available, more people go to college, and a four year degree is worth what a high school diploma was 30 years ago. So now people use these loans to get masters degrees and (if they pick the right one) now they get into a career and are often burdened with 6 figure student loan debts that they must repay (and can never bankrupt).
How about this. If everyone in the whole country was provided with free education, as much as they wanted, would everyone then have 6 figure incomes?
This is one area where the private industry could function well. A student could come to them with a plan of going into a career making $XXXX over his or her lifetime and the bank would look at it as a good investment. You want to get a PhD in Artistic Impression? The bank will tell you to fuck off. The federal government won’t and it will allow that student to foolishly squander his financial future.
Sorry for the hijack, but it reiterates my point that just because the government throws money at it does not make it better.
Nobody is proposing those kind of cuts. To continue the analogy, that would be like the government selling off a state or two to cut the deficit this year.
75% or more of the current deficits are due to the great recession.
Tax revenue is down but expenses (more people applying for SS early, more medicaid, more UI, more food stamps, etc) are up.
Before the recession hit the deficit was 100-400 billion a year. If the economy were still doing ok it would still be 100-400 billion a year. So overcoming the recession is the most important thing.
After that, minor changes could fix the deficit over the short term. A 200-400 billion shortfall isn’t impossible to fix by any means. If we hadn’t had the 2001/2003 tax cuts and the war in Iraq, there would’ve been almost no deficits from about 2001-2007, so realistic policy changes could make a huge difference. Tax hikes and spending cuts can correct a deficit that is 1-3% of GDP, which is what the deficit was before the recession and what it will likely be after.
Over the long term (100 years or so) we are going to face large debts due to our health care system. Medicaire, medicaid, etc. So drastic reforms to improve efficiency and cost effectiveness of health care are important.
But anyway, the recession is the most important factor in short term deficits, and health care the most important in long term deficits. Trying to fix the debt problems by cutting discretionary spending, or cutting 50 billion from XYZ won’t matter if the recession is still going strong and health care is still insanely expensive.