Monday, June 8, 2009

Fixing the deficit

The US government is presently running a trillion dollar deficit. The federal government is cutting a few things here and there to reduce this somewhat. This is arguably a good thing. But look at this chart:
65% of the budget is military, medicare and social security. Another 8% is interest on the debt, with 10% on "other mandatory spending", which is more entitlements. Even if all the non-military discretionary spending was cut, including the departments of education, energy, the interior, state, if we eliminated everything else the federal government does besides entitlements and the military, it would still only account for half the deficit. And the baby boomers are going to be hitting retirement age in the next three years, making social security and medicare costs get even larger. Cuts to bad programs are always a good thing. But in this case there is no way they can ever be enough.

Tax receipts will not grow with a growing economy, because we don't have one, and from a perspective of jobs we're probably not going to have one in the next year or two. Unless something dramatic can be done to drastically improve the economy, there are only three ways out of this budgetary mess we're in: cut entitlement spending, cut military spending, or raise taxes. This is not debatable; there's no way around it, and anyone who tells you there's another option is either lying to you, or just uninformed. This problem must be addressed. We have to choose, and we have to choose now. Nobody else is going to tell you this, because they're afraid to. But someone has to, so I am.

Are we going to have federal programs to take care of the elderly and poor? Are we going to have a strong military? Are we going to have the low taxes we have now? Because we can not have all three. We can't have things without paying for them some day, and soon we won't be able to delay that day any further. What are our priorities as a nation?

From a pragmatic perspective, of course, the best solution would involve making the economy better. There are ways to do that, which I'll address in other comments. If we wanted to balance the budget today, though, we would have to find some combination of tax increases and spending cuts, because picking just one of the three options isn't going to fly. Where exactly that compromise lies is not the issue of today. My priority is ensuring that this country has a future, and the only way to do that is to address the growing problem of government debt instead of ignoring it. If that matters to you, tell your friends to vote for me.

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