I really have no desire to go through the budget and perform a detailed analysis because there will be no significant changes until Social Security, Medicare, and military spending are addressed. Likewise, I have no confidence in government to avoid spending trillions more on bailouts, lending programs, job creation fallacies, and other so called stimulus measure. I predict the 2010 budget will ultimately require several “surprises” including state bailouts, additional infusions into the FHA/FDIC/Fannie/Freddie, and probably some other economic recipes from Chef Obama & Company. Whatever the Obama administration proposed today doesn’t require much reading- the cards are already showing for all to see. The USA Today recently had a nice writeup on this topic…
The U.S. is broke. Here’s why.
Trouble is, the deficit is only a symptom of a chronic disease that strikes at the very heart of democratic government.
The disease? Fiscal sclerosis — setting future national priorities in stone long before the future has arrived. Our fiscal arteries are so clogged and hardened that to do anything new, meet any emergency, or engage any new opportunity, the president must renege on past legislators’ promises regarding Medicare, Medicaid, Social Security and other such entitlement programs. If he doesn’t address unsustainable promises head-on, Obama will have no wiggle room in the budget for the rest of his presidency, and government will be tied up with yesterday’s problems and the demands of yesterday’s voters.
Thanks to decades of promises for ever-higher benefits and low taxes for the indefinite future, there’s now less give in future budgets than at any point in American history. At least profligate Congresses in the past confined their excesses and temporarily large deficits to the current year. Until recently, they didn’t box in the future…
For the first time in U.S. history, in 2009 every single dollar of revenue was committed before Congress voted on any spending program. Meanwhile, most of government’s basic functions — from justice to education to turning on the lights in the Capitol — are paid for out of swelling, unsustainable deficits.
Blame the recession for some of this dip. But even a recovery only temporarily restores a bit of financial freedom, not enough to reverse the downward trend.
No more annual appropriations are needed to fuel this vicious cycle. On our current path, Rip Van Congress could take a 50-year snooze, and the entire budget (and then some!) would still be spoken for. Tax revenues would rise with economic growth, but not as fast as spending and deficits.
Not only are we in budget talks but also have the joys of election season. I am disgusted by how many of these so called “small government reformers” were the same people engaged in the same nonsense from the USA Today article. I’m no defender of today’s governing because they’re repeating exactly the same mistakes of yesterday. I’m just tired of the non-productive criticism from the same people that supported the Iraq War, Medicare Part D, and TARP to name a few. These people didn’t suddenly get a fiscal responsibility epiphany, they just realized it would help their re-election bids (as those commercials keep reminding me). My point is not to deride the usual political posturing as this is far too easy. It’s to reiterate my analysis that the budget is not about the overall number or size of the deficit. We need to demand changes where change will be meaningful and this is just not happening. I’ll repeat: at the federal level it is entitlement programs and military spending. At the state/local level it is pension reform and Medicaid. Since these issues have received zero attention from anybody, the following has become inevitable…
Some Good News Amid Tax Increases
President Barack Obama’s budget proposes to help narrow a yawning budget deficit by doing away with some sweeping Bush administration tax cuts for the wealthy.
Mr. Obama had planned tax increases for those earning more than $250,000 in last year’s budget, but they didn’t happen. However, action is more likely this time because tax cuts from the George W. Bush-era expire at the end of the year unless Congress extends them.
The budget contains some carrots for taxpayers. One popular move will be to eliminate personal taxes on employer-provided cellphones.
Click the link to get more specifics on the tax proposals. These tax changes are not welcomed but inevitable. They are relatively tame compared to what is bound to come. Every budget over the next several years will become a controversial issue because they will come with more and more tax increases. If you plan to vote in the primary elections or intend to become politically active, stop for a minute and consider the nonsense. If you happen to talk to a candidate, flat out tell them what needs to be done and what the consequences will be for inaction or less than genuine rhetoric. Otherwise these budget discussions are nothing more than a repeat of USA Today’s example.
got up on the wrong side of the bed today I suspect Danny…..did you see your shadow……are we in for 6 more years of economic winter? While I pick at most of your posts, because it is fun and I want to draw you and dr. p into a fight, there is nothing I can disagree with in this post. We need big structural changes which will require pain for everybody, not just the rich. Unfortunately, I don’t see any leadership in our political ranks. We particularly don’t need the Marxist policies of you know who.
Here are the structural changes I, as King, would implement immediately…….across the board tax decreases for corporations and 98 % of Americans, means test social security benefits, 7% reduction in all current and future government pension benefits, $1 per gallon gas tax, $1000 annual deductible for all medicare services and new senate and house leaders for both parties. That’s a start at least.
The accelerator pedal on government spending is stuck and we need to not only put the brakes on but also turn the ignition off.
My suggested structural changes should be referred to in the future as the “JAE American Survival, Share the Pain, Freedom and Job Recovery Act of 2010″.