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Posted at 8:51 PM ET, 02/14/2011

What's the point of reducing the deficit now, anyway?

By Stephen Stromberg

President Obama and House Republicans have formally begun their fight over federal spending. But why care so much about the relatively small domestic discretionary portion of the budget -- which, at the moment, is what all the fuss is about? And why, for that matter, care about the deficit we're running right now, since the real budget-buster, entitlement spending, isn't yet closing in on the catastrophic levels projected for many years from now? There are good reasons, but they're not always clear in the debate.

Commentators regularly assume that it's self-evident that running the sorts of deficits America does now is a massive, long-term problem. Politicians -- and, I presume, most Americans -- often evaluate the debt using an analogy to family finance. Just imagine if YOU were running deficits of this size.

A friend of mine argued during a recent debate on the debt that this is a misleading metaphor. The federal government is a very different sort of debtor than you are -- with an astronomically high credit rating and lenders willing to throw money its way for barely any return. In a way, it's not the raw size of the national debt that really matters. What really matters is whether there are lenders willing to finance government spending. At the moment, America doesn't have a problem with that. In the long term, health-care spending will render deficits and the resulting debt so large that lenders will eventually balk and demand more for their money. Which argues for doing what neither President Obama nor Republicans are proposing at the moment -- setting clear plans to reduce projected entitlement spending more than a decade away.

We must, indeed, reduce those costs. But my friend is still too optimistic; lots of things also have to go just right for us to safely ignore everything else in the mean time. Consider the following, which are more useful to think about than invocations of "the national credit card."

The full burden of retiring baby boomers and the health care we've promised to provide them won't be felt for many years. Even so, President Obama's budget would -- optimistically -- stabilize America's debt at 77 percent of GDP over the next decade. That, the Committee for a Responsible Federal Budget points out, is higher than America's historical average of 40 percent and the traditional target of 60 percent. With steady economic growth, perhaps that will do us until the cost-saving measures in the health-care law kick in around 2017. But if there's an emergency that requires serious government spending before big cost savings are achieved, will lenders still be willing to buy lots of Treasuries? And, after that, will the health-care law nudge health-cost inflation down fast enough to prevent a substantially worse debt-to-GDP figure in the next decade? There's plenty of reason to worry.

Deficit finance also locks in future spending that's required to service the debt. Obama's budget would see debt service costs quadruple over the next decade -- from $207 billion to $844 billion annually. You can predict that the economy will grow enough that servicing the debt accumulated now won't require cuts in other things later. But even if you grow, you've still decided that spending that money now without taxing more now is worth limiting your budget flexibility in the future. In other words: Make sure it's really worth that trade-off. Some spending will help you grow later, rendering your debt service possibly much less daunting. That's what underlies Obama's distinction between "investment" and mere "spending," and it makes sense, if what you claim is "investment" really does lead to growth. But there's plenty of other federal spending that is unworthy, as well as huge opportunity in tax reform to raise more money now to pay for spending now.

Some of the maximalist rhetoric isn't helpful. But it's nevertheless healthy that America is having a debate about just which programs aren't deserving and how the government can raise more revenue over the next decade and beyond.

By Stephen Stromberg  | February 14, 2011; 8:51 PM ET
Categories:  Stromberg  | Tags:  Stephen Stromberg  
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Comments

Massive budget cuts are coming. The center of power isn't between the Republicans and the Democrats. It is between the conservative Republicans and the Tea Party. Cuts in the size, scope, power, and authority of the federal government will be huge and permanent.

Posted by: jy151310 | February 14, 2011 9:39 PM | Report abuse

"What really matters is whether there are lenders willing to finance government spending. At the moment, America doesn't have a problem with that."

The push to replace the dollar on the international market is a strong sign that the world is losing faith in the US. What happens when lenders stop lending?

The massive debt and uncontrolled spending can not be sustained. If we can't control it now, what happens when the entitlements need to be repaid and no one will lend us the money?

Posted by: kitchendragon50 | February 14, 2011 10:44 PM | Report abuse

Mr Stromberg; all,

the point IS we do NOT have the MONEY, the spending must STOP, the MESS that BHO & his coven of idiots, crooks, fools & lunatic extremist "DIMocRAT leaders" must be ENDED & the people, who voted to spend the money that we didn't have, must be removed at the first opportunity.= election day 2012.

some of the changes (in no particuliar order) that MUST, imVho, be made are:
1. REPEAL "obamacare" & replace it with NOTHING. = "get the message": federally-mandated healthcare is UNCONSTITUTIONAL.
2. NEVER again "bail out" any commercial enterprise. - at best the "tarp program", "cash for clunkers", etc. was UNNECESSARY & ILL ADVISED. at worst, it was downright STUPID & UNCONSTITUTIONAL!
3. recover every penny of so-called "stimulus funds", that have not yet been spent & try to get back as much as possible of the portion that has been disbursed.
4. cut the federal budget across the board by 20% for EVERY department/agency. - YES, the DoD, too.
5. abolish or consolidate every agency that "duplicates the effort of" another office/agency/department.
(for example, WHY do we have over 70 federal police agencies, each with their own "administrative support structure", when two or three large LE agencies could do at least as good of a job?)
6. resign from the UN & stop "foreign aid" to our ENEMIES abroad!
7. cut the size of the staff of the WH & the Congress by 50%, as every office is filled with "deadwood".
8. allow the VOTERS of each congressional district/state to set the salary/staff level/expenses/pension of their own Congressional representatives.
9. abolish sally mae, freddie mac, ginnie mae & all of the other similar agencies & return those responsibilities to private enterprise.
(a federal government that could not responsibly run the US Post Office has no business trying to run anything as complicated as the various "quasi-govermental financial agencies".)
10. return every possible federal governmental function to the lowest level, that can handle the responsibility.= the cities/counties/parishes/states could hardly do worse that the nitwits/chumps/crooks in DC!
11. "sunset" all grants every two years & require the grantee to re-document their needs. - after that, refund only the MOST CRITICAL of those grants.
12. "lay-off" every "new hire" that has been employed in the last two years.
13. defund NPR/PBS & all other similar "public education" organizations, as they are a luxury that we can no longer afford.
14. "means test" social security/medicare & end "pay-outs" to those who make 250,000USD per year or more.
15. abolish the IRS & replace the current income tax system with a permanently fixed VAT/federal sales tax at no more than 20% of retail value.
16. PERMANENTLY freeze federal spending at FY2000 levels or less.
17. prohibit all "federal mandates" to state/local governments, whether funded or unfunded.
and
18. learn to live within our means.

just my opinion.

yours, TN46
coordinator, CCTPP

Posted by: texasnative46 | February 15, 2011 12:53 AM | Report abuse

Stromberg expresses his STRONG disagreement with Senator Barack Obama.

Senator Barack Obama 3/16/06: "The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies."........
"And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on. Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities."

I think the Barack Obama of March 16, 2006 has the best of this argument, We should follow his advice.

Posted by: pilsener | February 15, 2011 1:05 AM | Report abuse

With businesses waiting to hire until they see consumer spending solidly back up. And consumers waiting for businesses to hire before loosening spending, the only one left in the room to spend then is the govt. So now is almost assuredly the wrong time to get religion on the deficit and debt. But that doesn't mean credible plans to deal with should not be put forward. That would mean both parties owning up and taking real leadership to the American people.

Posted by: Boomhauer | February 15, 2011 1:16 AM | Report abuse

Full speed ahead and damn the icebergs. Even the bond markets themselves couldn't sink this ship of state.

Posted by: DJ_Spanky | February 15, 2011 1:22 AM | Report abuse

You must have the very smallest amount of brain cells needed to write a sentence. I feel sorry for you.

Americans continue to elect clueless lawyers to run the show. In order, we have idiotic lawyers, citizens, and rocks.

It is nice you can write a sentence. Thank you, but in your next life I hope you take Econ 101.

Posted by: jazbond007 | February 15, 2011 2:48 AM | Report abuse

This is really simple. Intake $2.6 Trillion, Expenditure $2.6 Trillion. Period. Like a teenager's allowance; no supplemental, curb the spending.

Posted by: gibiphone | February 15, 2011 3:13 AM | Report abuse

Why cut? Because government is stealing the wealth of the people by collectively taking almost two-thirds of every dollar earned.

Posted by: Bearbank | February 15, 2011 6:52 AM | Report abuse

Why cut anything? Seriously? Only would the newspaper of record in the political Disneyworld that is D.C. would such a question be asked and taken seriously enough to be published.

This is not cocktail talk around town with your faux powerful buddies Mr. Stromberg. The is a nation at risk and citizens in pain because the federal government will not balance its books and responsibly tell people that annual deficits summing to an accumulating (direct) debt now approaching $14,000,000,000,000 (and I don't think the % gdp is relevant) is either sensible or sustainable.

Grow up. Its not your money. Hell, its not even your government. You and your ilk just shake it like a piggy bank to fund your wishes.

Posted by: fuller1 | February 15, 2011 7:05 AM | Report abuse

Trade policy is the real problem. No industry = no jobs = no recovery = no middle class = no revenue. Neither party will address trade policy. Instead they just divert attention. Their global corporate campaign money is much more important than their country.

Posted by: Jihm | February 15, 2011 7:43 AM | Report abuse

It is fun to read the ComPost and see how low the IQ's are of the writers. Stomberg rates ~70 I.Q.

Posted by: illogicbuster | February 15, 2011 8:37 AM | Report abuse

Like my alcoholic, gambling uncle always used to say, why quit gambling when they're still covering your markers.

Posted by: flyover22 | February 15, 2011 8:58 AM | Report abuse

I think he is just joking. I hope so.

But I do agree with part of what he's saying....why all this political haggling over what amounts of a difference of 40 billion dollars in cuts when our deficit is at $1.65 Trillion (and counting) this fiscal year. In the near future we face an absolute tsunami of entitlement spending...

When are our politicans going to have a grown up discussion about this? When it's too late?

Posted by: Rory14 | February 15, 2011 9:23 AM | Report abuse

You miss the whole point about government lending. Organizations lend the government money not for the hard cash interest on the loan; but for the far greater value in legislation and contracts the government passes and purchases from their loaners. That's one major reason why to government isn't serving the needs of its citizens; it's preferentially doing the bidding of its lien-holders to the detriment of its citizens.

Posted by: mhoust | February 15, 2011 9:36 AM | Report abuse

Ya' gotta love the right. They start wars fought mainly by the children of the middle class, they cut taxes on the very wealthy, they worship military force to the point where we've become the world's policeman and our military budget is larger than the rest of the world combined. But, whoops! - the bill for all that is coming due. They now want us to pay for it, NOT by cutting the military, NOT by taxing the wealthy, but by cutting entitlements that benefit the poor and elderly. And they wonder why America is beginning to look like a third world nation?

If we can't afford to take care of our poor and elderly, or even the middle class, anymore, then we can't afford to police the world. Cut the military by half, end the wars, and bring home our troops from around the world. THEN we can begin talking entitlements.

Posted by: Trakker | February 15, 2011 9:40 AM | Report abuse

The argument over deficits is a way for both parties to sidestep the issue of job creation. Both parties are presenting budget plans that will lay off tens of thousands of federal employees and create zero new jobs, as well as trade deals that will outsource even more American jobs to China and South Korea. Both parties seek to cut services working people pay taxes for and expect in order to lavish bigger tax cuts and corporate subsidies on the rich. You could count the number of politicians in Washington who care about the working class on one hand. The rest including the president and the Republican leadership are just puppets for the super-wealthy.

Posted by: dnahatch1 | February 15, 2011 9:44 AM | Report abuse

I would hope that this article is a joke, but given the guy writes for WaPo, I'm probably mistaken. As long as other government leaders will finance our debt it is OK? So as long as the gambler hasn't been asked to pay up or the drug addict is being fronted drugs for payment at a later date, it is fine? That is basically what you are saying.

There have already been moves to drop the dollar as the world's dominant currency. The bond market is starting to demand higher interest rates on long term debt. China is reducing the amount of US Treasuries as a percentage of their portfolio.

You don't purchase an ARM loan and say everything is fine because the interest rate has yet to reset and I don't have to deal with payments that are twice as large a few years from now.

Posted by: jconboy0226 | February 15, 2011 10:31 AM | Report abuse

Before you even THINK about reducing social security benefits, you'd better lock in a roll-back of social security "payroll" taxes. It's the only part of the federal budget that actually runs a surplus.

And you'd better lock in a roll back of the Bush 43 tax cuts for millionaires and billionaires, while you're at it.

Alternative: 3 weeks in Cairo looks like a Sunday afternoon walk in the park.

Posted by: seattle_wa | February 15, 2011 10:38 AM | Report abuse

Yeah! Why worry?

Posted by: mmwatch | February 15, 2011 10:40 AM | Report abuse

Wow... this editorial is all the proof you'll ever need that liberals should never be left in charge of the nation's wallet.

Posted by: diesel_skins_ | February 15, 2011 10:57 AM | Report abuse

I don't get this idea that a nation is that different than the family budget. Sure, one is a macro economic entitity the other a microeconomic entity. But to suggest that bad things don't happen in some proportion to the debt is ludicrous. In some ways it is worse for a nation, a family can go bankrupt, start again., a nation will suffer famine, cold winters.

The trick part of this question is that the economy is always expected to grow, we can always "grow" ourselves out of high dept proportion. What if that doesn't happen? What if that "stubborn" unemployment isn't stubborn at all, just the way things are going to be from now on, if say gasoline goes up to $5/gallon?

We've already seen what obama's concept of "investment" is, if you're a Democratic voting bloc then investment is money thrown your way, eg, autoworkers in Detroit (vice the conservative bondholders) money for teachers in heavily Democratic California... I take the word "investment" with a grain of salt when I hear it in current debates.

Posted by: jhtlag1 | February 15, 2011 11:26 AM | Report abuse

Once again, Mr. Stromberg talks as if the money belongs to the "government" rather than the people. The left feels that the government is some sort of autonomous intity that creates and limits itself on command. I guess thats why they also think the constitution is a "living, breathing document".
The fact is, the "governemnt" keeps spending more than "it" brings in. As with any budget whether it be the federal government, a state government, or your own household, living off of credit can only end one way..the way it did two years ago.
And then to believe in the misguided hope that somehow Obamacare will reduce costs, well, that is about as dumb as it gets. All you have to do is look at any, and I mean any governemnt run health-care program anywhere in the world and you have a failed or failing system that nearly every country has had to make cuts over the last few years in services to keep afloat. Who got the raw end on that? The public, that's who. But ours will be different? Whatever...
It seems simple to the uncomplicated...If the government takes less I will have more, to buy a product that I want and/or need.
By the way. Atlas Shrugged the movie will be out April 15th. Go see it.

Posted by: AMCLUCAS | February 15, 2011 11:37 AM | Report abuse

First, since the money comes directly out of my paycheck, every paycheck, and every paycheck I have ever had since I was 18, SS is not an entitlement, IT IS MINE.

Congress, and be very clear, CONGRESS, has raided my SS at every turn it possibly could. THAT has to stop.

But right now isn't the time to do it. It is when the economy has recovered that it is time.

Second, congress doesn't want to do a DARNED thing about the deficit, or they would be looking at defense spending, and mostly homeland security. No one know what that monstrosity costs.

Third, and why on earth doesn't anyone ever think of this? OUR POPULATION IS MUCH LARGER THAN IT WAS TWENTY YEARS AGO.

That means it COSTS more. It isn't all immigrants by any stretch of the imagination. How many kids do you have? If its more than two, you are increasing the population, the one that you don't want to participate with, as if you could live like a hermit today.

And if the regressive House really didn't like the deficit situation, THEY WOULDN'T HAVE HELD THE AMERICAN PEOPLE HOSTAGE UNTIL THEY COULD GET YET ANOTHER TAX BREAK FOR BILLIONAIRES. See where their priorities really are? See that?

Oh, and by the way, since they talk so much about how Americans are overpaid, they need to REDUCE THEIR SALARIES LIKE THE REST OF US. Put the money where their mouth is. (hope they choke).

If congress was serious about raising revenue and reducing the deficit, they would be all over CREATING JOBS RIGHT NOW. Unemployed people don't pay as much tax as employed people do. Minumum wage jobs don't pay as much tax as decent paying jobs do. And I'm only talking about $12-$15 bucks an hour.

We have a welfare state all right, welfare for those poor, put-upon corporations that are STILL shipping American jobs overseas.

Give a tax break to the rich, the ones that aren't going to miss an extra $500 dollars when their MONTHLY take home is more than half the nations YEARLY SALARY. No, lets give them a break, and MAYBE they will hire a few people. Like the mexican gardener.

Posted by: taroya | February 15, 2011 11:51 AM | Report abuse

The deficit is a political problem, not an economic problem. Before the Bush taxcuts, we ran a surplus and were still one of the lowest countries in the world. OECD considers the US has been undertaxing its population since the 1980s, which explains its large trade deficits.

On the other side, the US public wants Medicare and Social Security to be robust and in tact. A large segment wants as big a military as the rest of the world combined. Corporate subsidies bloat the budget dramatically with Big Ag, Big Pharma and Defense Beltway Bandits gobbling hundreds of billions every year.

Meanwhile, the US has huge income gaps, underinvestment in education and a decaying infrastructure. These are the areas that are being cut. They are under served because they don't have the political clout to fight for money.

The bottom line is that US voters like low taxes and want the services offered. Of course, when asked, they want balanced budgets, but not at the expense of paying more in taxes and losing services.

We call politicians cowards for catering to the public whims, but a politician who loses elections is no longer around to be brave.

Posted by: AxelDC | February 15, 2011 12:06 PM | Report abuse

Don't worry. Once the republicans have the white house and congress, talk about the budget deficit will end. It was barely mentioned while Bush ran up $trillions, but not that Obama is pres, it's the most important thing. Why? To stop Obama that's why. Once he's gone, it will be rebublican wild borrowing and spending again - transferring what little money is left to the super wealthy.

Posted by: lip111 | February 15, 2011 12:10 PM | Report abuse

Absolutely no cuts are needed. Just bring back the 1990s tax rate. Many poor people are demanding to have their throats cut. Amazing.

Posted by: gsross | February 15, 2011 12:35 PM | Report abuse

What really matters is getting out of the trillion dollar wars and starting to tax the rich proportionately to their wealth. STOP raiding the Social Security Trust fund and there'll never be a problem with. Whatever happened to the "lock box", you remember that, don't you?

Posted by: mtravali | February 15, 2011 12:42 PM | Report abuse

CUT government spending.
Cut it NOW.
The rich can survive anything.
The rich have already moved assets outside the country.
The poor and middle class will be hurt the most in the economic crash that will occur, if we don't stop borrowing.
If you keep borrowing, eventually foreclosure occurs.
Foreclosure can and does happen to countries.
Foreclosure for a country means lenders outside the US impose restrictions on what the US budget looks like, the currency becomes worthless and foreign lenders buy up all the country's assets for next to nothing.
Cut now before the crash happens.

Posted by: jfv123 | February 15, 2011 12:53 PM | Report abuse

The real Budget Buster is Defense spending. America spens more than all other countries in the world combined (thank you Reagan, Bush and Baby Bush).

Want to balance the Budget? Simply eliminate the Navy (who last fought a war in WWII) and the Navy's army, sometimes called the Marines. Problem solved.

Posted by: chucky-el | February 15, 2011 1:04 PM | Report abuse

I'm with the commentor who's offended that her social security is called an entitlement and is unpaid for. I've been paying into it since i was 15 years old. At 18, in 1960 I made $99 a month in the Air Force. They took SS out of that lowly check. Later in life I paid the maximum. I earned the entitlement. Let's have the rich pay their fair share of taxes without limit on their SS tax.

Posted by: Fergie303 | February 15, 2011 1:31 PM | Report abuse

Why not:

Make the wealthy pay their FAITR share of taxes...personal and corporate. There IS no "trickle down"..we are tired of that plan.
Stop all subsidies...
SLASH the defense budget by 25%.
Stop ALL foreign aid.
Cut the cost of running our government by cutting ALL Congressional salaries, expense accounts, and BENEFITS, and a STAFF REDUCTION! Congress should pay for their own health insurance AND Pensions!
Cut the staff alnd salaries in ALL Government Agencies
Stop the tax breaks for corporations movoing overseas.
Stop the fraud on WALL STREET and make corporate theives PAY THROUGH THE NOSE!

Cut entitlements to those who don't need it! (Medicare, Medicaid, Social Security)
Stop welfare to illegal immigrants.
CREATE JOBS, so that people can work so that people can PAY TAXES!
STOP the outsourcing of jobs abroad.

The ONLY way to get out of this mess is for EVERYONE, from the top down, to sacrifice. Multi-millionaires in Congress have NO right to squeeze the middle class and poor while THEY get paid in TAXPAYER dollars to stiff us!


Posted by: cashmere1 | February 15, 2011 1:39 PM | Report abuse

I have been speaking out against the national debt since 1988, when the debt was a mere three trillion dollars and the Repos were arguing that we will grow our way out of it. Some growth, but it is only in the size of the debt. I have to assume that congressional leaders, and most readers of the media, have a basic understanding of arithmetic----not advanced math, just elementary school arithmetic. Wisconsin congressional Representative Paul Ryan, the Republican economic "guru", suggests that we cut the debt through deficit reduction of 60 to 100 billion dollars per year. To think that decreasing spending by 100 billion dollars for each coming year will make a dent in the debt is insane. Using figures for the 2010 budget, consider the following:
Revenue 2.381 Trillion
Spending 3.552 Trillion
2010 Deficit 1.171 Trillion
If 100 billion had been trimmed from the 2010 budget, it would still have left A DEFICIT OF 1.11 TRILLION (eleven times the proposed 100 billion cut in spending), which would have to be ADDED TO THE DEBT. The same additions will be added each year until the budget is ACTUALLY BALANCED !!

In short, SPENDING CUTS WILL NEVER ELIMINATE THE DEBT. We have to grit our teeth and accept more taxes, or the alternative of "printing more money" with resultant, and unpredictable, INFLATION to pay off the debt. Take your choice. I would favor a ten percent surtax on our IRS payments such as we had during the Vietnam fiasco. Let's see what that would do to the budget, with a ban on any increase in spending.

Posted by: merhoff | February 15, 2011 1:41 PM | Report abuse

can someone please explain to me why we still have upwards of 50 military bases in GERMANY? start cutting there, oh and while we are at it, how many golf courses does the military own and maintain? 50, 100, 200? its alot.

http://nakedempire.wordpress.com/

Posted by: nakedempire | February 15, 2011 1:42 PM | Report abuse

@TN46

I can see you’re passionate about your positions and I won’t question your motives because I know you wish to see the US succeed and excel. I’d like know more about many of the points you mentioned. My concern is that some of the levels you stated are well meant, but arbitrary. For example, number 3 of your list includes cutting 20% across the budget; why not 30%? And certainly some programs are more wasteful than others, right? Why cut 20% from an effective program and leave 80% intact in a possibly worthless program? In number 12 you mention laying off “new hires” with less than 2 years experience, but why not lay off the underperformers instead like the private world? In point 15 you mention abolishing the IRS and moving to a fixed sales tax, but who would monitor the level of sales to ensure compliance? In point 16 you mention returning to funding levels of year 2000 or less, but why 2000?

I’m not picking out these points to nitpick. I just want to help you strengthen your arguments. Finally, many or your points would be acceptable to a broad political spectrum which can help you get your ideas acted upon, but your name calling at the beginning detracts from that. Also, what’s with the capitalization of every other word? Honestly it’s off-putting and it also detracts from your arguments. Your intentions are your own, but if you’d like to gain support for your ideas, I believe you’ll need to win a broader audience.

Posted by: one_timer | February 15, 2011 2:06 PM | Report abuse

I have been speaking out against the national debt since 1988, when Reagan had tripled the national debt and the Repos were arguing that we will grow our way out of it. Some growth, but it is only in the size of the debt. I have to assume that congressional leaders, and most readers of the media, have a basic understanding of arithmetic----not advanced math, just elementary school arithmetic. Wisconsin congressional Representative Paul Ryan, the Republican economic "guru", suggests that we cut the debt through deficit reduction of 60 to 100 billion dollars per year. To think that decreasing spending by 100 billion dollars for each coming year will make a dent in the debt is insane. Using figures for the 2010 budget, consider the following:
Revenue 2.381 Trillion
Spending 3.552 Trillion
2010 Deficit 1.171 Trillion
If 100 billion had been trimmed from the 2010 budget, it would still have left A DEFICIT OF 1.11 TRILLION (eleven times the proposed 100 billion cut in spending), which would have to be ADDED TO THE DEBT. The same additions will be added each year until the budget is ACTUALLY BALANCED !!

In short, SPENDING CUTS WILL NEVER ELIMINATE THE DEBT. We have to grit our teeth and accept more taxes, or the alternative of "printing more money" with resultant, and unpredictable, INFLATION to pay off the debt. Take your choice. I would favor a ten percent surtax on our IRS payments such as we had during the Vietnam fiasco. Let's see what that would do to the budget, with a ban on any increase in spending.

Posted by: merhoff | February 15, 2011 2:13 PM | Report abuse

cashmere1 ... the wealthy already pay more than 60% of taxes so just what is their fair share? who is to determine fairness? Barney Frank?

Perhaps on reconsideration you might, like many of us, determine that over the past several decades we've allowed government to spend too much.

================================
nakedempire ...We have military in Germany because of long standing Treaty obligations. And if you do the research I think you'll find that Germany actually reimburses US for a substantial portion of what we spend on maintaining those bases.

Posted by: Hazmat77 | February 15, 2011 2:18 PM | Report abuse

AxelDC ... any one who asserts that the US undertaxes its citizens is clueless.

The Cost of EVERY product and service produced and sold in the US is based on actual production PLUS a wide array of taxes - imposed on everyone, including employer's share of employment taxes on the workers who produce the products or provide the services; taxes on communications and utilities - excise taxes also known as manufacturer's excise taxes, are fees imposed by all levels of government on producers, manufacturers and importers of goods and activities.

We are subject to local, state and federal taxes (including user fees) on just about Everything. It's enough already....

Posted by: Hazmat77 | February 15, 2011 2:40 PM | Report abuse

Why is everyone so quick to cut defense? Yes these contractors take in billions, they also employ hundreds of thousands. Think about it, cut defense, cut jobs. Where are you going to make them up at?

Posted by: tpayne1 | February 15, 2011 2:46 PM | Report abuse

one_timer; all,

1. i type to suit ME & nobody else. if you are "offended by" my admittedy eccentric typing style, just "scroll on by". = most people here are much more interested in CONTENT than in "typing style"/typos.
2. i was an criminal investigator/SA/SSA/investigative supervisor in the ARNGUS/USAR/US Army/DoD for over 30 years and i saw how wasteful that EVERY department (that i came in contact with) was/is. therefore, NONE of the agencies/departments should be exempt from the cuts, as ALL have a great deal of waste/fraud/abuse of power/money/time/"duplication of effort".
(fyi, i once investigated the purchasing of several million dollars worth of "repair & replacement parts" for a piece of equipment that had been "out of the inventory" for over 15 years. = the parts, that were ordered/received/paid for, went straight from the seller to the Property Disposal Office, as "of no further use to the government" & were "surplused off" at about 15 cents on the dollar. - YES, "the crooks" involved in that F/W/A case went to federal prison, as "the purchase" was a KNOWING/criminal fraud between government buyers/seller.)
3. complaints/carping/whimpering/moaning about "name-calling" generally are made by people who are either GUILTY of the crimes/misdeeds discussed
and/or
who are UNABLE to actually counter the charges made.
(fyi, a "DIMocRAT" is an example of well-known "Tea Party shorthand" for an elitist/SELF-important/LEFTIST/UN-caring/BIGOTED "member of the ruling class".)
4. point #4 (rather than #3) suggests "a 20% across the board cut" because an economics professor, whom i studied under in grad school days/"daze", says that that percentage of the expenditures should "fix the problem". = i am NOT an expert in budgeting & don't play one on TV, so i asked a "well respected by her academic peers" professor.
(NO, i will not name the lady, absent her consent.)
5. point #16 : same answer. "my old prof" says that that FY2000 funds were sufficient to assure that CRITICAL tasks are done/funded & that NEEDLESS/stupid/wasteful things would be limited/eliminated at that level of spending.
6. point #15: IF we follow my suggestion on reducing the 70+ federal law enforcement agencies to 2 or 3 (the USMS & the Postal Inspectors are in the Constitution & we would need an amendment to eliminate those. = perhaps ALL the "law enforcement types" could be called US Marshals, Treasury Agents or Postal Inspectors, as it makes NO difference which badge/credential, that a police agent wears. = only the LE MISSION is important.), the collection of taxes could be monitored by ANY federal agent.
furthermore, the state tax enforcement/ABC agents could be additionally tasked (and paid some extra money from federal coffers) to monitor collection of gross sales/VAT tax receipts, as those enforcement agents already are assuring that state taxes are being collected.

hoping that these points answer your excellent queries.

yours, TN46
coordinator, CCTPP

Posted by: texasnative46 | February 16, 2011 3:24 PM | Report abuse

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