U.S. officials must consider more concrete plans to remedy budget woes
“Irresponsible” — that’s the word that keeps coming to mind over and over again lately. So many of our elected officials in Washington are continuing to be brazenly irresponsible with our money - year after year after year. They keep spending money they don’t have while ignoring our obscene accumulated debt ($16 trillion) and enormous yearly deficits (over $1 trillion).
Can you imaging a family making $100,000 per year spending $140,000 per year by borrowing the extra $40,000 every year - over and over again, year after year? That’s what the U.S. is doing. It just doesn’t make sense. It’s just plain irresponsible. Not too long ago, our national financial credit was downgraded for the first time in our history and more downgrades are currently being threatened. Countries that have acted irresponsibly like us for more years than we have are on the verge of bankruptcy and economic collapse (e.g. Greece). That’s where we’re headed. The overspending has to stop now!
Memo to the White House and Congress: Stop spending more than you take in. Do it now. Balance the budget. How about we balance it in 3 years - not 10 or 20? Try this: reduce our spending by, say, 30 percent each year for 3 years and it will be balanced. I’d even settle for 5 years. Please stop ignoring this problem. Stop trying to just be re-elected and do the right thing! You might be surprised. Voters like me will reward such noble behavior.
David S. Fitch
Ann Arbor, MI
Comments
Cold
Sun, Jan 27, 2013 : 2:39 p.m.
Some stats about the US government: U.S. Tax revenue: $2,170,000,000,000 Fed budget: $3,820,000,000,000 New debt: $ 1,650,000,000,000 National debt: $14,271,000,000,000 Recent budget cuts: $ 38,500,000,000 Now, remove 8 zeroes and pretend it's a household budget: Annual family income: $21,700 Money the family spent: $38,200 New debt on the credit card: $16,500 Outstanding balance on the credit card: $142,710 Total budget cuts: $385
outdoor6709
Thu, Jan 24, 2013 : 6:56 p.m.
It appears that some people are happy with $1 trillion increases in deficits every year. At what point will the system colapse? What happens when there is no SS, Medicare, ect? We have time to work on the problem but apparently not the will. What is your proposal to fix the problem??
Gorc
Thu, Jan 24, 2013 : 10:56 p.m.
You are so correct....."the will" Our society couldn't stomach the level of collective sacrifice it would take to bring our financial house in order.
outdoor6709
Thu, Jan 24, 2013 : 4:12 p.m.
The problem is baseline budgeting. Under Baseline budgeting spending goes up every year by the rate of inflation and the increase in population. Tax revenues in 2012 were higher than 2011 but Federal government spent about $1.1 trillion more than they took in. Baseline budgeting allows politicians to claims reductions in rate of growth as "cuts" in spending. President Obama claimed the cancelation of a long term assistance program, a program that was never funded, as a $500 billion cut in spending. Government spending increases about 7% a year, regardless of revenues. If you capped spending at 2012 levels for 10 years and cut spending accross the board by 1% we would have a balanced budget in ten years.
macjont
Thu, Jan 24, 2013 : 4:23 p.m.
And we would have one of the worst recessions / depressions in memory.
Unusual Suspect
Thu, Jan 24, 2013 : 2:28 p.m.
Adding to Gorc's comment about the size of the debt... Stop and think for a minute. How much is one trillion dollars? Do you realize it's a million million? That is, picture a pile of bills that add up to a million dollars. Now picture a million of those piles. Now picture 16 of those million piles of a million dollars each.
Unusual Suspect
Thu, Jan 24, 2013 : 11:19 p.m.
Whoosh
macjont
Thu, Jan 24, 2013 : 4:23 p.m.
Your point?
Gorc
Thu, Jan 24, 2013 : 12:33 p.m.
This has been thrown out there before....Pass an amendment that requires then federal government to have a balanced budgeted, without deficits, every fiscal year.
DonBee
Fri, Jan 25, 2013 : 9:12 p.m.
Macjont - LOL - pick one of the most liberal sources of "News" to support a liberal economist. If you had told me that Fox or the Washington Times had backed Krugman's position, it would have told me that he was on the right track. Not because I believe Fox (not!) or the Washington Times, but rather because if they were agreeing with his position, that there was little or no doubt left. The old russian saying applies here "In Pravda there is not Izvestia, in Izvestia there is no Pravda" If you want me to buy your argument give me a neutral or conservative source that is buying a liberal economist.
macjont
Fri, Jan 25, 2013 : 5:15 p.m.
Don Bee I understand the difference between hard and soft sciences. But events are lending more and more credibility to Mr. Krugman (and many others) vs "other schools of thought." See eg., http://www.huffingtonpost.com/2013/01/25/britain-triple-dip-recession_n_2550520.html
DonBee
Thu, Jan 24, 2013 : 11:35 p.m.
macjont - Sorry - economics is an almost science. Krugman is in one school of thought, other economists are in other schools of thought. There is not one economic science with an absolute answer (e.g. 1+1 =2) but rather many schools of thought and no single perfect answer. Dr Krugman comes from the "large government can fix anything" school of thought. Hence some people dis-believing his position and others grabbing onto it and screaming "YES".
macjont
Thu, Jan 24, 2013 : 9:11 p.m.
Too bad for you (and the rest of us) Superior. Why you and so many others think it's a matter of "belief" is beyond me. This is a matter of evidence and reasoning from the same. Suspend "belief" for a moment, and bring your intellect to bear.
Superior Twp voter
Thu, Jan 24, 2013 : 8:59 p.m.
macjont - I trust/believe in Krugman just as much as Friedman, Dowd, and Obama. And that would be.... NOT at ALL.
macjont
Thu, Jan 24, 2013 : 4 p.m.
Gorc, see Krugman "End This Depression Now." Also, numerous other progressive economists. I cannot discuss in post what these gentlemen address in books.
Gorc
Thu, Jan 24, 2013 : 1:44 p.m.
macjoint - please elaborate on your point.
macjont
Thu, Jan 24, 2013 : 1:02 p.m.
Bad microeconomics. Have we learned nothing since the 1930s?
A2comments
Thu, Jan 24, 2013 : 12:16 p.m.
We haven't even approved a budget in 4 years. Outrageous. Seniors that have large savings pay the same amount for Medicare as those with little savings, since only income is taken into account, not ability to pay. Medicare gives no penalty, for those that repeatedly get treated for the same thing, i.e. I don't like your diagnosis, so I will get another (I don't mean legitimate 2nd opinions). We cannot survive with Medicare as it exists. What we pay over a lifetime of work is used up in a few years of retirement, then we get a free ride. This has to change. We also have to stop have bills with dozens of non-related crap attached to them. And we need to stop asking for government handouts on everything. Grant form this, grant for that.
Carole
Thu, Jan 24, 2013 : 11:34 a.m.
All in Washington starting with the president right on down the line need to get with the program and start doing their job instead of lining their pockets. If the regular Joe Doe didn't do his job, he would would be fired. No budget in four plus years, a Sec. of State who doesn't know what her staff is doing, a President who says it's his way or the highway and everyone else arguing about this and that -- it is disgusting. The kids I work with can do conflict resolution better that the so-called adults in Washington. Sorry, but I'm very worried about our great country.
Judy
Thu, Jan 24, 2013 : 3:07 p.m.
Sorry, but I'm very worried about our great country. I agree 100% with you Carole! Both parties are to blame.
leaguebus
Thu, Jan 24, 2013 : 5:22 a.m.
So you want our economy to be like the European economy? With their austerity budgets, they are back into the recession while our economy has started to grow, last year by 2%. In no way does our national budget resemble your household budget. You can't print money and you do not own a bank like the Fed. Certainly we need to reduce spending and certainly we need to increase revenue but not all at once.
Stuart Brown
Thu, Jan 24, 2013 : 3:07 a.m.
Note to clueless, it is not about debt! It is about dismantling the New Deal and Great Society social programs (that is Social Security and Medicare.) A sovereign government cannot be compared to a family since last I heard, families that print money go to jail for counterfeiting. Governments can print as much money as needed to pay its obligations. Governments can also raise taxes to pay obligations, can families simply demand a substantial pay raise from the boss? (hint: not likely.) It is great of Hugh Jeddit to point out high deficits but not focusing on Hugh Unemployment makes Hugh become Hugh Janus when he tries to misdirect attention from what most people care about.
NoSUVforMe
Thu, Jan 24, 2013 : 3:03 a.m.
Voters will reward such behavior? 30% cuts for 3 years? Great idea... Slash Medicare, Social Security, and Medicaid. Increase defense spending every year, sometimes by double digits. Cut taxes on the richest Americans, the so-called jobs creators. Reward companies for moving jobs overseas. This is all a Republicans dream! Brilliant! Voters didn't want Medicare and Social Security anyway, but do want another war or two... And billionaires are having such a tough time in these tough economic times. Who screens these posts?
Gorc
Thu, Jan 24, 2013 : 12:23 p.m.
Wake up, this is both parties fault.
DonBee
Thu, Jan 24, 2013 : 1:39 a.m.
If you look at the interest rates paid by the government from 1980 thru today and draw an average on them up until 2007 - the average was right around 5% Right now the debt is double what it was in 2007 - up from 8 trillion to 16 and headed to 19 trillion by the end of next year based on current budget. The good news is we are paying right around 1 percent right now in interest, the bad news is that all the forward interest curves show that by 2016 - interest rates should be back where they were historically - around that 5 percent point. By then - unless something changes the federal debt will be around 20 trillion dollars. That means that at 5 percent the interest payment will be around 1 trillion dollars a year. That is almost all of the non-entitlement money the government has - so no highway money, no defense, no education spending, no ...you name it. It will be social security, medicare, medicaid, and interest payments. Have fun with that.
DonBee
Thu, Jan 24, 2013 : 11:28 p.m.
Veracity - I used the average interest rates across all bonds - not a specific rate or time period. Once we are out of this low interest recession period - the rates will rise. And when they do - we will have to pay a lot more. I won't argue on what should be done with tax rates - but to raise taxes enough to cover the deficit and higher interest would mean about a 50% increase in total tax receipts. The fastest growing programs in terms of dollar outlays are Medicare, Medicaid and Social Security. At the current rate of growth, even if interest rates stay low - they will consume the whole federal budget by 2025. No problem right - we just raise taxes 3 to 6 percent a year in the future until everyone's is at 100%.
Veracity
Thu, Jan 24, 2013 : 5:32 a.m.
DonBee- You raise an important concern but should realize that a lot of this country's debt will be in ten, twenty and thirty year notes, bonds and other instruments which carry interest rates of 3% or less. If all these debt instruments had to be exchanged into 5% interest carrying instruments then your scenario will be accurate. Nevertheless the total debt is very high, reflecting the borrowing of money to pay for wars, for bloated defense budgets, every Congressman's "pork" and stimulus money to prevent a deep depression caused by irresponsible financial institutions. Raising taxes in a progressive manner is the fairest way to reduce the national debt while trying to maintain some economic expansion while reducing unemployment. For those who wish to balance budgets and reduce debt by decreasing spending, ask them to list specific dollar reductions and to project the effects of these reductions on average citizens and the wealthy. If done honestly, I anticipate an epiphany.
Gorc
Thu, Jan 24, 2013 : 1:04 a.m.
$16,000,000,000,000 is a real number people, not a word. And I don't think this registers with most Americans.
outdoor6709
Thu, Jan 24, 2013 : 8:31 p.m.
The 2011, 2012, & 2013 Obama budgets were all voted on in the US Senate. The 3 budget proposals got a total of Zero votes. Makes you think the White House Budgets were not serious.
Veracity
Thu, Jan 24, 2013 : 5:21 a.m.
JBK- Read the Constitution. All revenue bills must originate in the House of Representatives (HoR). Usually the President sends his recommendations for a budget to the HoR which changes it entirely into their own economic plan and sends to the Senate. Once the Senate makes its budgetary changes in the HoR's bill the altered bill goes into conference to work out the differences. Once the bill satisfies both houses of Congress then the bill goes to the President for his signature or is returned with a veto. Since the Republicans clearly will not accept any budget sent by the White House I wonder why so many people are still insistent that he send one.
JBK
Thu, Jan 24, 2013 : 1:52 a.m.
Gorc - But if you believe Romney that over 47% of all Americans are free loaders, then the number you point out means nothing to them. They will continue to wake up everyday without a job, roll out of bed around 10 AM, crack open a beer or two, watch Jerry Springer, invite a 420 friend over for a "few", pass out and start all over again. DEBT means nothing to people sponging off of society. The narrative coming out of Wash DC has most people brain washed. The sad part is that these same people have children who will be saddled with this debt. I personally have NO children, BUT am still embarrassed by Congress. The Obama Administration has not passed a budget in the 3 years he has been in office. Just imagine living YOUR life without a budget. Think of all the really cool things you would buy!:) DC spends like they have a corp AMEX card with NO limit. At the end of the day, they were voted back in, so I guess we really have no reason to complain!
macjont
Wed, Jan 23, 2013 : 11:25 p.m.
Neither family budgets nor Greece have much relevance to the problems we confront. We need more government spending, not less in our current economic environment. Budget balancing via further reductions in government spending at this time would plunge us back into recession.
macjont
Thu, Jan 24, 2013 : 3:58 p.m.
Terrible macro understanding folks.
Unusual Suspect
Thu, Jan 24, 2013 : 2:04 p.m.
"We need more government spending" Holy cow. The only reason we're not in the same situation as Greece right now is that Greece cannot print it's own money, but we can, and the only thing that gets us is the ability to delay the consequences.
Gorc
Thu, Jan 24, 2013 : 1:55 p.m.
Your right, forget Greece's economic woes. Our situation is more to the scale of the former Soviet Union. Spending at a level that will eventually cause a financial implosion. This may sound extreme, but the out of control spending brought down one super power. I'd rather go back into a recession in the short run, than have to deal with a bigger, long term depression or worse.
Ryan Bowles
Wed, Jan 23, 2013 : 11:17 p.m.
Please say you support higher tax revenue to reduce the debt and deficit. Too many say they are anti-debt when they are really anti-tax.
Unusual Suspect
Thu, Jan 24, 2013 : 2:03 p.m.
Higher taxes are a great idea. That can be realistically and responsibly achieved through more people having paychecks and people having bigger paychecks. Both of those things will lead to high revenue.
javajolt1
Thu, Jan 24, 2013 : 1:55 p.m.
How about requiring the White House and Congress to spend the money they already take in more responsibly before assuming the problem is they don't tax everyone enough. By the way, higher tax revenues come from a more productive economy with low unemployment. You could "tax the rich" 100% and it won't even put a dent in this titanic looming disaster.
David Briegel
Wed, Jan 23, 2013 : 11 p.m.
Interesting that the same "corporation" that downgraded America assigned it's highest AAA rating to all the fraudulent junk being sold by those Saints on Wall St. Have you noticed anyone on the planet buying fewer US Treasury bonds? Do you think the "fix" was in?