Deficits, Entitlements, and Balancing the Budget
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- Category: Bryan Vinson
- Published on Thursday, 17 March 2011 21:00
- Written by Bryan Vinson
It's not a new concept that America generally has two reactions to the big spending federal government, it's jaw dropping 14 trillion in debt, it's trending trillion dollar deficits, and it's lack of discipline in handling the situation. There is first the problem phase. Even democrat president Barrack Obama, who hasn't hesitated to sign or promote big spending bills, has admitted that the government spends more than it brings in through tax revenue and that this is unsustainable. Oddly, Republicans and Democrats alike can agree here.
Most people have a reaction of dissatisfaction with their representatives over the numbers. Then comes the "solution" phase, where everyone starts defending the spending that benefits them. Where do we cut? Health care? Education? Defense? Social Security? The very spending that drives up the debt is defended by the very people who complain about the debt in general, especially in light of specific programs that benefit them. A recent poll showed 62% supported the solution that simply taxing the rich more can solve the Federal Governments financial problems. Not actually. Taxing the top 2% of earners, Obama's favorite taxable targets, would not even begin to cover the trillion dollar yearly budget deficits. Allowing all of the Bush tax rates to expire still doesn't close the gap. America has in the past had taxes as high as 90% on the top income bracket, and it's never helped Congress manage its budgets. Some argue that it even hurts economic conditions as the more affluent shelter th eir money from taxes instead of investing in private industry expanding but taxable growth. Whatever the situation with the economic affects, it still doesn't solve the deficit problems. Tax cuts for all Americans, including the rich, are argued to be a solution by conservatives. The subsequent growth produced by these cuts in the private sector would increase government tax revenue and help bring down the deficit. Thi s is also not a viable option by itself, even if it works like a charm. It would take an unprecedented amount of growth to create the tax base that could cover a 1 trillion dollar deficit, and it would still need to make up for it's cost in lost revenue after the original tax cut.
Cutting spending is the only real answer, but there we run into problems. The republican house of representatives has vowed to c ut 100 billion from this year's budget. They are meeting resistance from liberals, democrat representatives, and those affected by the cuts. 100 billion is a lot to cut! However, it represents roughly just 3 percent of the 3 plus trillion dollar budget. It represents just ten percent of our deficit. It's a baby step start but has met opposistion. We can't even shed 3 percent of our budget without struggeling over the consequences. With every cut proposed, the group that it affects is identified and the ramifications broadcasted. There is no doubt every program put into place by the government provides some measure of help to people, but we may have gotten too used to a central government with nearly unlimited resources that can swoop in and save us from lifes uncertanties. Yet the United States of America's ability to provide those resources is really an illusion built on the foundation of extravagant debt.
In 2010, America spent 3.5 trillion dollars. It brought in 2.2 trillion dollars in revenue. It ran a deficit of 1.3 trillion dollars. 20% went to defense spending of 694 billion dollars. Though it is a favorite budget item to put on the chopping block by liberals, even cutting defense in half still doesn't balance the budget, nor does cutting out defense spending in its entirety. 58% of our federal budget is represented by entitlement programs. The combined cost of Social Security, current healthcare spending, and other benefit programs score nearly two trillion dollars, and Obamacare hasn't been added to the mix yet. In order to balance the budget, and create the surplus necessary to start to pay off our 14 trillion dollar national debt, those programs will be mathematically required to see cuts, and those cuts will be unpopular and affect people. (Defense cuts would affect people as well, though the faces of those affected by defense cuts are never as loudly broadcasted.) The biggest problem we face as a nation today is that we are so reliant on the federal government seemingly for our very sustenance. Franklin D. Roosevelt referred to government relief as a narcotic that disinigrated the moral fiber of Americans. Ironically he instigated the beginnings of those very relief programs that would soon dominate our budgets for over the next eighty years. Now we stand at the choice between facing our withdrawal symptoms or just diving into our usuall unsustainable model of debt driven spending oblivious to the idea that nothing is for free. Is it really about being conservative or liberal? They are, after all, just political beliefs. Or is it about reality versus how we would like things to be? We may talk about making hard choices, but to argue that the deficit needs to be reduced, but entitlements can't be touched, is the same as making no choice.
