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Spending, not Entitlements is the problem now


Retired USAF Chief
Apr 8, 2011
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San Antonio, TX
Spending, not entitlements, created huge deficit | Campaign 2012

The above link is to an article by Byron York in the Washington Examiner, it brings up some interesting observations. First, look at this:

" There's no doubt federal spending has exploded in recent years. In fiscal 2007, the last year before things went haywire, the government took in $2.568 trillion in revenues and spent $2.728 trillion, for a deficit of $160 billion. In 2011, according to Congressional Budget Office estimates, the government will take in $2.230 trillion and spend $3.629 trillion, for a deficit of $1.399 trillion.
That's an increase of $901 billion in spending and a decrease of $338 billion in revenue in a very short time. Put them together, and that's how you go from a $160 billion deficit to a $1.399 trillion deficit. "

I stopped when I read this and thought, why are we so focused on raising taxes on the rich to get an extra $70 billion or so in more revenues from them when we should be trying to get that $338 in lost revenues from the bad economy? We should not be considering any proposal that could possibly interfere with getting that $338 billion back, and THEN think about raising taxes. Frankly, I'd rather go to a flat tax AND a consumption tax, but in the meantime I'd be for reforming our ridiculous tax code and stripping out the tax breaks, loopholes, deductions, and exemptions as much as posible first.

Then there's this:

" A lot of the higher spending has stemmed directly from the downturn. There is, for example, spending on what is called "income security" -- that is, for unemployment compensation, food stamps and related programs. In 2007, the government spent $365 billion on income security. In 2011, it's estimated to spend $622 billion. That's an increase of $257 billion.
Then there is Medicaid, the health care program for lower-income Americans. A lot of people had lower incomes due to the economic downturn, and federal expenditures on Medicaid -- its costs are shared with the states -- went from $190 billion in 2007 to an estimated $276 billion in 2011, an increase of $86 billion. Put that together with the $257 billion increase in income security spending, and you have $343 billion.
Add to that the $338 billion in decreased revenues, and you get $681 billion -- which means nearly half of the current deficit can be clearly attributed to the downturn.
That's a deficit increase that would have happened in an economic crisis whether Republicans or Democrats controlled Washington. But it was the specific spending excesses of President Obama and the Democrats that shot the deficit into the stratosphere. "

Yet another reason to eschew tax hikes and instead take steps to right the economy. Here's where dems and repubs diverge, with differing approaches to address the situation. The dems want to spend a lot more money - double or triple down on the 1st stimulus. Opinions differ about the efficacy of that program, maybe it prevented a slide into an even worse depression and maybe it didn't. But the results at this point are not good IMHO, we spent a lot of money and went deeper into debt and do not have much to show for it. So, is it not understandable for most Americans to be leery of continuing down that road?

The GOP on the other hand, want fiscal austerity; drastic cuts in gov't spending right now. Some didn't want to raise the debt ceiling at all, which I thought was lunacy. The drastic cuts (44%) would almost surely have sent us into a depression and increased significantly the number of people who are already hurting. Seems to me at a time like this we need more modest cuts that are the least impact on the economy. We didn't get into this mess overnight, and the way out need not be that immediate either. Do it smart, do it right, and do it with the least harmful impact on everybody.

Finally, there's this:

" Spending for Social Security and Medicare did go up in this period -- $162 billion and $119 billion, respectively -- but by incremental and predictable amounts that weren't big problems in previous years. "We're getting older one year at a time, and health care costs grow at 7 or 8 percent a year," says Holtz-Eakin. If Social Security and Medicare were the sole source of the current deficit, it would be a lot smaller than it is.
The bottom line is that with baby boomers aging, entitlements will one day be a major budget problem. But today's deficit crisis is not one of entitlements. It was created by out-of-control spending on everything other than entitlements. The recent debt-ceiling agreement is supposed to put the brakes on that kind of spending, but leaders have so far been maddeningly vague on how they'll do it. "

Nothing wrong with working on tomorrow's problems before they get too big. But today's issues should be foremost - fix the effing economy. Don't give me another temporary stimulus, don't give me more gov't, don't give me a jobs bank that does not create permanent jobs. IMHO, we're not going to get permanent job growth until the underlying issues that are smothering this economy are changed for the better. If employers don't believe things have changed for the better and it's temporary, then whatever the gov't tries will not work to any long term degree.

In my view, neither party comes out looking too good in this regard, perhaps due to the mix of a GOP led House and a Dem controlled Senate and WH. Too bad they can't seem to work together until the last second; I wish we could throw 'em all out of office right now and elect new people. But - gotta wait for next November I guess.
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