New Budget Estimates Show Unsustainable Spending and Debt

Privatizing SS will not solve the progbems it was designed to mitigate.

There will be times that people are forced to retire ( health reasons and the like) in a down time and will end up in poverty needing further help from the other functions of government.

SS can be fixed.

To plan as if it is not there for your own retirement is the SMART thing to do because the there is a whole faction of Americans that want it dragged down the hall and drowned in the bathtub or left to wither on the vine.
 
Tax cuts alone can't fix this. We also need huge decreases in government spending, entitlements and regulation. Either we do it soon by legislation, or our creditors will do it for us later.

That's going to be difficult with the proposed Republican freeze on medicare spending cuts, don't you think?

About 80% of spending is medicaid, medicare, defense, and social security (although it's really not fair to count social security as "government spending", since it's basically going to go back to you anyway). If we got rid of the othe 20% (which is, of course, completely and totally absurd), we still wouldn't have a balanced budget. The onlys solution is to raise taxes. :clink:
 
In all seriousness, the gov't does need to "get lean." Conservatives moan about the stimulus & bailouts, but those were basically temporary deals; in the long run, they are simply not the budget busters that they are portrayed as. We lost more from the time the crisis started through the passage of the stimulus than the stimulus actually cost.

Gore started a project in the '90's called "Reinventing government" - it went on for a few years, and then it was dropped when the admins changed, but the concept was a good one, and it's something I'd love to see politicians talk about again, in that form, or another. The bureacracy of things is ridiculous - too many levels, too much paperwork, way too much waste..

And do you actually have any idea how much spending that would cut? Methinks not.

The defense budget needs an overhaul - it should be slashed in a way that many would consider drastic. Too many out-dated systems, too much waste, too much money overall...

Alright. Let's say we cut the budget by a third, or even a half. That's what, 10% of the budget? Still have a deficit.

Social Security should be privatized - period, the end.

Alright, so you've shoved some money around so that we can pretend we're spending less than we really are. Congratulations.

It's great to everybody but the seniors who lose everything in the next conservative caused recession and the taxpayers who have to pick them up on welfare anyway.

The top tax rate in America should be 33.33%. No one should pay more than a third of their income in taxes (Dixie bait).

I have spoken my peace.

Onceler, this is really absurd. You support universal healthcare. There's no way that total government spending is ever going to be less the 35% with this. And you want to mandate that local + federal + state taxes be no more than 33% combined, even for the welathiest Americans? So basically, a flat tax of 33.3% on every American, and still have a deficit? Yeah, that's gonna work out fine. It makes much less sense to raise taxes on those that have ridiculous amounts of money anyway. Gotta raise it on the poor and middle class.
 
Last edited:
Improving gov't efficiency - if legislators are genuinely commited to it - could save more than people think.

You're quick to pooh-pooh the savings from defense cuts, and social security. These are not small figures. The healthcare ideas I support are also committed to largescale cost-reduction, and preventative care. Look at it this way: we're basically paying for universal healthcare right now, but without the preventative & cost-cutting measures. After everything is factored in, universal healthcare could easily be paid for if the defense budget is cut, and if SS is privatized, with plenty to spare.

SS privatization can also add quite a bit to the economy. I admit to not being very well-informed on the economics of everything, but it can't be a bad thing for the market to have the SS contributions of 10's of millions of Americans invested....
 
That's going to be difficult with the proposed Republican freeze on medicare spending cuts, don't you think?

About 80% of spending is medicaid, medicare, defense, and social security (although it's really not fair to count social security as "government spending", since it's basically going to go back to you anyway). If we got rid of the othe 20% (which is, of course, completely and totally absurd), we still wouldn't have a balanced budget. The onlys solution is to raise taxes. :clink:
Raising taxes slows the economy down and will deepen the recession more. We need tort reform to curb medicare spending and complete elimination of programs that are not withing the enumerated powers of Congress.

Implementation of the Fair Tax would virtually eliminate the IRS as well as a major financial and time burden on individuals and businesses.
 
Privatizing SS will not solve the progbems it was designed to mitigate.

There will be times that people are forced to retire ( health reasons and the like) in a down time and will end up in poverty needing further help from the other functions of government.

SS can be fixed.

To plan as if it is not there for your own retirement is the SMART thing to do because the there is a whole faction of Americans that want it dragged down the hall and drowned in the bathtub or left to wither on the vine.

Desh - it is simply a myth that people would be left "poor", even if they retired in a downtime.

There is no 20 year + period in US history where stocks did not generate much better returns than what SS recipients see now.

Add to that that you could work in an option for gradual withdrawal of savings upon retirement.

The left is simply wrong on this. Privatization is a great option.
 
Improving gov't efficiency - if legislators are genuinely commited to it - could save more than people think.

But how much?

I support effective government. I think government should be run more from a business perspective. I just have no idea how much it will save, and I'm not going to just assume the savings are going to be huge.

You're quick to pooh-pooh the savings from defense cuts, and social security. These are not small figures.

You haven't given me determinate figures for exactly how much you plan to cut defense spending. I'd rather cut it as little as possible, personally. China is soon going to exceed our GDP and we need as big a head start as possible.

And cutting social security simply shoves some spending from public into private hands. It doesn't really benefit our economy. It's like how conservatives wail on about healthcare spending, and so we're left huge taxes in the form of insurance premiums instead of smaller taxes to the government. It's more of an accounting trick than something that benefits society.

Seniors, IMHO, need some sort of absolute protection from poverty in old age.

The healthcare ideas I support are also committed to largescale cost-reduction, and preventative care. Look at it this way: we're basically paying for universal healthcare right now, but without the preventative & cost-cutting measures. After everything is factored in, universal healthcare could easily be paid for if the defense budget is cut, and if SS is privatized, with plenty to spare.

If we could get healthcare spending down to 10% of the GDP like most other countries we could easily add the uninsured and not be paying much more than we're paying for medicare right now, true. But I'm not going to be optimistic about that until I see it.

SS privatization can also add quite a bit to the economy. I admit to not being very well-informed on the economics of everything, but it can't be a bad thing for the market to have the SS contributions of 10's of millions of Americans invested....

Right now the savings are invested because seniors spend it and so boost the economy. It's not like the money just dissappears into a vaccum.
 
by Brian M. Riedl
WebMemo #2595
The Office of Management and Budget has released its annual mid-session review that updates the budget projections from this past May.[1] They show that this year, Washington will spend $30,958 per household, tax $17,576 per household, and borrow $13,392 per household. The federal government will increase spending 22 percent this year to a peacetime-record 26 percent of the gross domestic product (GDP). This spending is not just temporary: President Obama would permanently keep annual spending between $5,000 and $8,000 per household higher than it had been under President George W. Bush.[2]

Driven by this spending, America will run its first ever trillion-dollar budget deficit this year. Even worse, the President's budget would borrow an additional $9 trillion over the next decade, more than doubling the national debt. By 2019, America will be spending nearly $800 billion on net interest to service this large debt.[3]

Bigger Government and Higher Taxes

Since World War II, federal spending has generally remained between 18 and 22 percent of GDP. During the Bush Administration, spending increased from 18 to 21 percent of GDP. This year, President Obama will spend a peacetime-record 26 percent of GDP. Even by 2019, spending would still be 23 percent of GDP--not even counting the President's proposed health plan.
The 22 percent spending increase projected for 2009 represents the largest government expansion since the 1952 height of the Korean War (adjusted for inflation). Federal spending is up 57 percent since 2001.
While the costs of the financial bailouts and economic stimulus bills are staggering, they are only a fraction of the coming costs from Social Security, Medicare, and Medicaid. Over the next decade, the Congressional Budget Office (CBO) projects that each year Medicaid will expand by 7 percent, Medicare by 6 percent, and Social Security by 5 percent. These programs face a 75-year shortfall of $43 trillion--60 times greater than the gross cost of the $700 billion TARP financial bailout.[4]
President Obama claims that "we have already identified $2 trillion in savings over the next decade." This is not true. The President first creates a fantasy baseline that assumes the Iraq surge continues forever (which was never U.S. policy) and then "saves" $1.5 trillion against that baseline by ending the surge as scheduled. It is like a family "saving" $10,000 by first assuming an expensive vacation and then not taking it. Another $1 trillion in "savings" is actually tax increases (in other words, savings for government, not taxpayers).
The President's budget figures exclude his health care plan, which could add another trillion dollars in taxes and spending.
Tax revenues have historically remained between 17 and 19 percent of GDP. This year, the recession has reduced them to 14.7 percent of GDP. The CBO has estimated that once the recession ends, maintaining current tax policies would keep revenues at around 17.6 percent of GDP (slightly below the 18.3 historical average). President Obama's proposed tax increases would push revenues up to 19.2 percent of GDP by 2019 (not counting his proposed tax increases to finance health care reform).
Federal spending per household (adjusted for inflation) remained constant at $21,000 throughout the 1980s and 1990s, before President Bush hiked it to $25,000. In 2009, Washington will spend $30,958 per household--the highest level in American history--and under President Obama's budget, the figure will rise above $33,000 by 2019.
As the budget deficit increases over the next decade, so will net interest spending, from $173 billion (1.2 percent of GDP) in 2009 to a record-level of $774 billion (3.4 percent of GDP) by 2019. In fact, net interest costs will account for 84 percent of the 2019 budget deficit.
President Obama's budget includes $1.4 trillion in tax increases, all of which would go toward new spending rather than deficit reduction.
The 2009 Budget Deficit[5]

Since World War II, the largest budget deficit recorded was 6.0 percent of GDP in 1983. The Bush Administration oversaw budget deficits averaging 2.0 percent of GDP. The projected 2009 budget deficit of 11.2 percent of GDP would nearly double the post-war record. The White House budget proposal would keep the budget deficit above 3.7 percent of GDP indefinitely. It has not reached that level since 1993.
The mid-session review projects a $1,580 billion budget deficit in fiscal year 2009. While this is $261 billion less than the White House projected in May, the entire reduction stems from Congress not following the President's call for another round of TARP (which would have cost $250 billion in outlays), and $101 billion in savings from lower-than-expected deposit insurance costs. Excluding those two variables, the projected budget deficit actually increased.
The 2009 budget deficit will be larger than all budget deficits from 2002 through 2007 combined. More than 43 cents of every dollar Washington spends in 2009 will have been borrowed.
While President Obama claims to have inherited the 2009 budget deficit, it is important to note that the estimated 2009 budget deficit has increased by $400 billion since his inauguration, and the whole point of the "stimulus" was to increase deficit spending to nearly $2 trillion based on the unproven notion that would it alleviate the recession. This suggests that even if the President had not inherited a big deficit, he would have created one as a matter of anti-recessionary policy.
Future Budget Deficits

One would expect the post-recession deficit to revert back to the $150 billion to $350 billion budget deficits that were typical before the recession. Instead, by 2019, the President forecasts a $917 billion budget deficit, a public debt of 77 percent of GDP, and annual net interest spending of $774 billion.
The White House projects $10.6 trillion in new deficits between 2009 and 2019--nearly $80,000 per household in new borrowing.
Since World War II, the public debt has ranged from 23 percent of GDP to 49 percent. Large deficits are estimated to drive the debt ratio to 41 percent in 2008 and 77 percent by 2019--a peacetime record.
The public national debt--$5.8 trillion as of 2008--is projected to double by 2012 and nearly triple by 2019. Thus, America would accumulate more government debt under President Obama than under every President in American history from George Washington to George W. Bush combined.
The White House brags that it will cut the deficit in half by 2013. The President does not mention that the deficit has nearly quadrupled this year. Merely cutting it half from that bloated level would still leave budget deficits twice as high as under President Bush. Furthermore, three upcoming developments--the end of the recession, the troop pullout in Iraq, and the phase-out of the supposedly temporary "stimulus" spending--would, by themselves, cut the budget deficit in half.
The coming tsunami of Social Security, Medicare, and Medicaid costs are projected to push the federal public debt to 320 percent of GDP by 2050 and over 750 percent by 2083.[6]
The White House underestimates future budget deficits by trillions of dollars by (1) assuming that discretionary spending will be frozen to inflation for the next decade, (2) assuming that cap-and-trade revenues will be available to finance a Make Work Pay credit (the House-passed bill allocates those revenues elsewhere), (3) assuming health care reform will be deficit-neutral, and (4) assuming certain tax increases that are unlikely to be enacted.
The White House also likely overestimates long-term economic growth. Its forecast for real GDP growth in 2010 and 2011 is reasonable but exceedingly optimistic after the economic recovery. The Administration forecast exceeds that of the CBO every year by as much as 0.9 percentage points as late as 2015 and by a cumulative 3.9 percentage points over the 2012-2019 period. In effect, the Administration is assuming a full year's additional growth over those eight years. The effect is to boost revenues significantly in each year and by as much as $160 billion in the 10th year and a cumulative amount of almost $680 billion.
Time to Stop Digging

The new budget spending estimates are alarming and absolutely unsustainable--and are the true cause of these appalling levels of deficit and debt. President Obama has proposed massive tax increases that still cannot keep up with the historic spending increases he has proposed. The result will be highest level of spending--and debt--in American history. Within a decade, Washington would have to spend nearly $800 billion annually just to pay the interest on the national debt.

In this budget context, the President's and Congress's brazen proposals to create a $1 trillion health care entitlement are reckless and unaffordable. Lawmakers should focus on capping federal spending, restraining entitlements, and eliminating wasteful and lower-priority programs.

Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

http://www.heritage.org/Research/Budget/wm2595.cfm

Well no shit Captain Obvious. Where was your partisan ass 8 years ago when they were spending money like drunket sailors?
 
When the Bush tax cuts expire and we pull out of Iraq and Afghanistan, everything will be fine.
 
In all seriousness, the gov't does need to "get lean." Conservatives moan about the stimulus & bailouts, but those were basically temporary deals; in the long run, they are simply not the budget busters that they are portrayed as. We lost more from the time the crisis started through the passage of the stimulus than the stimulus actually cost.

Gore started a project in the '90's called "Reinventing government" - it went on for a few years, and then it was dropped when the admins changed, but the concept was a good one, and it's something I'd love to see politicians talk about again, in that form, or another. The bureacracy of things is ridiculous - too many levels, too much paperwork, way too much waste.

The defense budget needs an overhaul - it should be slashed in a way that many would consider drastic. Too many out-dated systems, too much waste, too much money overall.

Social Security should be privatized - period, the end.

The top tax rate in America should be 33.33%. No one should pay more than a third of their income in taxes (Dixie bait).

I have spoken my peace.
The government doesn't need to get lean. The government needs to decide what programs were going to support and which ones we are not and then get rid of the ones we won't support and more fully fund the ones we do support. Going lean will just starve the government services we do need and would be a recipe for ineffectual government.
 
Privatizing SS will not solve the progbems it was designed to mitigate.

There will be times that people are forced to retire ( health reasons and the like) in a down time and will end up in poverty needing further help from the other functions of government.

SS can be fixed.

To plan as if it is not there for your own retirement is the SMART thing to do because the there is a whole faction of Americans that want it dragged down the hall and drowned in the bathtub or left to wither on the vine.
SS is an easy fix. It's medicare that's a problem.
 
do you guys have this saying programmed into your computers so you just push one button and it automatically pops up?:rolleyes:

yes.....and onceler....you should be here defending this.....or at least policing it....

as if all republicans or conservatives were for bush's spending.....
 
The government doesn't need to get lean. The government needs to decide what programs were going to support and which ones we are not and then get rid of the ones we won't support and more fully fund the ones we do support. Going lean will just starve the government services we do need and would be a recipe for ineffectual government.[/QUOTE

What are you talking about? We already have an ineffectual government and it's getting worse.
 
Back
Top