The United States of America is at a breaking point. Under the Bush Administration, the federal debt has grown by a whopping 61%, a shocking $3.5 trillion increase from an already frightening $5.7 trillion debt to a disgustingly high $9.2 trillion. This puts the nation in a downright perilous situation. It is important that individuals who provide for their families stay out of debt, but it is absolutely essential that a government with 300 million people to provide for keep a balanced budget.
For the financial and, frankly, national security of the country now and the wellbeing of the next generation of Americans, it is imperative that the government control its spending now. Contrary to popular belief, the Bush tax cuts are not the problem; they have actually increased tax revenues. The real problem is the spending, the issue which politicians in Washington must address, and soon, before it is too late.
Republican presidential nominee-to-be John McCain is fond of campaigning on a pledge to veto every pork barrel spending bill with the intention of “making the authors of it famous.” McCain, like other Washington politicians, puts undue emphasis on these programs; while it is a given that these line-items are wasteful and must be eliminated, the fact of the matter is that pork barrel projects represent less than $30 billion out of what may be, for fiscal year 2009, a $3.1 trillion budget!
Furthermore, there is the common misconception that the reason the debt is so high is due to spending on the Iraq War. In fact, the government has racked up nearly $800 billion in total spending on the war, or the equivalent of just 8.7% of the federal debt. True, $800 billion in five years is significant, but it is far from the reason the debt is as high as it is.
The simple fact is that the chief component of the budget consists of entitlement programs like Medicare, Medicaid and Social Security. Entitlement programs represent a whopping 44% of the federal budget, and their 2007 costs alone totaled $1.2 trillion—more than double the defense budget. As the baby boomer generation enters into the forefront of Social Security and Medicare, those programs will, in effect, take an even larger bite out of the budget than they do presently.
The second-largest component is defense spending, which constitutes more than half a trillion dollars, or roughly 17% of the projected 2009 budget and 47% of total world defense spending. The third and final greatest single component is the interest on the debt, which will doubtlessly increase as the value of the dollar continues to go down and nations holding our debt demand a rate hike to offset the risk they are assuming. As of now, interest on the debt totals over $178 billion each year, or 6% of the current budget.
While Congress must put a stop to pork barrel spending and eliminate other wasteful expenditures, our politicians need to cut the pork and get serious about the budget. Ending earmarks is not nearly enough; our politicians have to focus on the real causes of this catastrophe, not the earmark smokescreen they constantly put up to shield them from making the tough decisions.
The question is: will there ever be the political will to do what must be done?
Note: I will be posing elaborative suggestions on dealing with the nation's fiscal crisis in an upcoming entry.
The reason that the war is so 'cheap' is because the government is borrowing to pay for it.
And, you forgot about the fed's money printing mayhem. Inflation and all that jazz. When a ridiculous currency like the euro is worth more than the dollar, than we're in trouble.
"What a man does for pay is of little significance. What he is, as a sensitive instrument responsive to the world's beauty, is everything!"
H. P. Lovecraft
Oh, I never said the war is "cheap," nor did I imply that. What I meant is, compared to the other facets of the budget - particularly the primary components - and the overall federal debt, the war isn't all that great. We're borrowing to pay for pretty much everything the government does, but in terms of the overall debt, the Iraq war, at 8.7%, is insignificant. Iraq is not even close to the chief cause of our debt. We spend 6 times the amount we spend on Iraq on entitlement programs each year.
Plus, what I don't address in that entry is the increases in Medicare costs. President Bush's Medicare Part D prescription drug benefit, which went into effect in 2004, I believe it was, could cost as much as $1.2 trillion in ten years - that added on to already expanding entitlement programs, especially with the baby boomer generation entering into the forefront of those programs. Even if we pulled out of Iraq now we would still be facing massive deficits and an incredibly large debt.
With regards to the problems we are presented with in terms of the dollar and inflation, you're right: we have a serious problem with our currency, one which only one politician I know of (who is not the guy I support, mind you) is willing to address, that being Ron Paul. But it is definitely critical that we deal with monetary policy and inflation; for the first time the dollar is at parity with the Canadian dollar, which is frightening.
"Government is not the solution to our problems; government is the problem. - Ronald Reagan
I don't know...I think that 50 trillion a month is kind of expensive, especially on something most of American wants us to get out of...
Damn Canadians, lol. (sorry any Canadians out there, but I'm a New Yorker, so you're #2 on my random enemy list, right after New Jersey)
"What a man does for pay is of little significance. What he is, as a sensitive instrument responsive to the world's beauty, is everything!"
H. P. Lovecraft
$50 trillion a month? Where did you hear that from? If we have still yet to spend $800 billion in Iraq (we've actually spent $600 billion so far), first of all, you can't draw that conclusion, and second of all, that comes out to an average of $150 to $200 billion a year, with the expected cost for 2008 to be $200 billion. (These stats from http://usliberals.about.com/od/homelandsecurit1/a/IraqNumbers.htm.) That isn't cheap, no, definitely not, but the question when it comes to the war isn't whether or not the American people support it so much as the necessity of continuing to fight it. And in my judgment, preventing the potential eruption of genocide and a new propaganda tool for the terrorists from emerging warrants, in this case, enough of a call for the fight to continue. But that's a debate for another time.
My point in addressing the Iraq spending costs is that people are mislead by politicians like Barack Obama into thinking that the Iraq War is what is driving us deeper and deeper into debt, when this is, in fact, not the case.
"Government is not the solution to our problems; government is the problem. - Ronald Reagan
Woops. Sorry. Bad math.
"What a man does for pay is of little significance. What he is, as a sensitive instrument responsive to the world's beauty, is everything!"
H. P. Lovecraft
That's ok. The other day I accidentally mocked somebody for saying that the flu is a virus.
[-(
The flu isn't a virus. It's a former atheist.
:-&
"What a man does for pay is of little significance. What he is, as a sensitive instrument responsive to the world's beauty, is everything!"
H. P. Lovecraft
... you are my hero.
I want to cut out welfare (and not replace it with workfare) and replace it with incentives for private welfare programs to take over. They are better at identifying people in need and more efficient at distributing the funds anyway.
My other suggestions for the federal government are to forget about Universal Health Care, and stop stealing our social security money to use it for social welfare programs.
The expansion of public welfare programs is one of the main reasons for our national debt. There are better ways of helping people than handing them money and hoping for the best.
I agree with you, in terms of my overall opinion. I, too, would like to see welfare programs replaced with incentives for private welfare programs. But that's what I would like to see. Even if our politicians had the will to do what's right I don't think they'd go that far. I would therefore like to see many of these programs phased out or face drastic reforms.
For instance, I believe that we should take Medicare and reform it drastically. I believe that we should slap a grandfather clause on Medicare Part D, meaning those that are currently receiving Medicare Prescription Drug benefits will not be deprived of them, but those that are not on the program will not receive them. I would also make Medicare means-tested, whereby individuals need to qualify in order to receive benefits. That way folks like Bill Gates won't receive Medicare benefits when they most assuredly do not need them.
I would also like to see Social Security phased out. The program was originally intended as a supplement to an individual's savings, but it expanded to become something upon which America's seniors relied upon and continue to rely upon. Therefore, I believe that what should happen is that Social Security should first become means-tested. Then the program should be privatized for those under the age of 55; however, if individuals do want to receive Social Security benefits in the future, they should still be able to.
In other words, if you're under the age of 55, you should still be able to receive Social Security benefits should you decide you want to stay on the program, in which case you would be paying into the fund for yourself; only those who wish to receive their own SS benefits will pay in like you; this, however, would disincentivize people from actually continuing to pay into and benefit from the program, as the benefits they will receive will be significantly reduced. However, it would give folks the chance to say, "You know what? I've been paying into this program all my life and I want to stay in it." So they can, but over time fewer and fewer people will partake in the program, and eventually it will find itself in the grave as folks turn to private accounts like 401k's as the better, more effective way of preparing for retirement.
The fund would then become untouchable; the government would be unable to take any money from the pool so that those who pay in can reap the full rewards without concern. A little choppy, and I'll explain it better when I talk about solutions to the debt in the future, but the reason i prefer phasing the program out like this is because you can't just shut down welfare programs overnight. People are relying upon them (and in the case of Social Security feel that they've been paying into the program so they should benefit from it) and you have to be careful with how you deal with such programs. The key is to reform these programs in such a way that those that need the benefits can get them, but institute incentives for individuals to use private methods to fill these gaps instead of governmental means.
With regards to universal healthcare, I totally agree with you. The free market, not government, is the answer to healthcare. Government is indeed the problem in that arena, not the solution. More on that in an upcoming blog entry, as well as my own solutions to the debt.
"Government is not the solution to our problems; government is the problem. - Ronald Reagan
My blog, "Brother Can You Spar 9.2 Trillion Dollars" talks about the steps needed to reform our economy.
+mspin
I read through some of your ideas last night, and I agree with many of them, at least in terms of their overall premise, and may respond to your proposals later on.
"Government is not the solution to our problems; government is the problem. - Ronald Reagan
you rasied some good points and I'm looking froward to your suggestions. I personally have some ideas to cut spending the most important of which is our need to cut the government agencies that are unecessarily expenisve
- Get rid of the environmental protection agency: not noyl is this agency expensive, its actions which are often overly harsh on businesses are very detrimental to the economy; have you ever seen a car commercial where they talk about EPA estimated mpg? We dont need the govenrment to pay for expensive testing on mpg when the businesses automotive businesses should be doing that
- Our military is very storng and powerful fue to our technological advancement. However, we have many project such as the Osprey than need to be cut because they are too expensive and have faile dmultpiple times