What Will You Give Up To Cut the Deficit?
I want to continue this subject - about how we need to come up with creative ways to save money if we're ever going to reduce the deficit and our national debt. What's troublesome is the whole idea that we're really not as interested in reducing the deficit and the national debt as some people think the are.
It's almost impossible to imagine a world without government in our lives. And that's where we're going to run into trouble trying to cut the budget. In fact, we're already seeing the Republicans who were recently elected pull back on their original plans to cut back. Not that I'm surprised.
It starts with that whole "debt ceiling" thing. The Congress imposes a ceiling on it's spending. Then, every year, they raise the ceiling. What's the point of the ceiling? You tell me. I don't get it.
Well, there is some history behind this debt ceiling thing. It actually started in 1917, when the Congress wanted to be sure that the Treasury - which was raising money for World War I by selling Liberty Bonds - didn't sell too much debt. That first attempt to limit the issuance of debt strictly targeted the money raised to fund the war to be sure not too much debt was built up. It worked. This idea continued over subsequent decades, including the years of World War II, with some years seeing the debt ceiling actually lowered as the need for debt declined.
But over the years, a pattern developed that saw the amount of debt issued essentially reach the ceiling, so that the ceiling no has to be raised every year. This is where it's become a bit of a joke. Its a joke because the government no longer takes in enough money to meet its obligations, and has to borrow more year after year. So the debt goes up each and every year. And the cost of paying interest on that debt goes up each and every year - even with the low interest rates we've had recently.
Which now brings us to the question of what you want to cut to reduce the federal budget, which reduces the deficit the government runs every year, which means that at some point the debt itself will start to be reduced.
So, what's it to be? If you check my last post, you'll see the problem.
Now, wasn't the new Congress supposed to start cutting? Weren't all those Republicans that now have the majority in the House going to see to it that the "fat" starts getting cut? Well, they have in fact proposed $2.5 trillion in cuts. Sounds like a lot, but that's $2.5 trillion over the next 10 years. (You can see the specifics if you click here.) And if you look carefully, you'll see that none of that more sensitive stuff I mentioned last time is in the cuts. Not only that, but you'll also find that of that $2.5 trillion, a full $900 billion relies on a complete overturning of "Obamacare" - something that doesn't look like it will happen, since the Senate retains a Democrat majority, and they're not going to vote to overturn the administration's health care bill that was passed late last year.
So I think we really get down to individual Americans having to give up what they now consider to be "coming to them" - otherwise known as "entitlements." And it probably will entail a reduction in some items that aren't entitlements but are now considered necessities. For example, municipalities start cutting policemen, at some point the actual enforcement of the law will suffer. That's not an entitlement.
So, again, what's it going to be? Are you going to accept lower payouts of social security when you retire? Or how about a later age when you can start collecting social security? Are you going to accept paying more for your medical care when you're retired? Or how about simply not being able to afford to have certain procedures that you need if you're sick or injured?
What I'm trying to say is that I don't really see anyone voluntarily accepting the sorts of cuts in services that the government provides. And that simply means that we continue that game of raising the debt ceiling every year. Which is why it all seems like some sort of silly game to me at this point.
It's almost impossible to imagine a world without government in our lives. And that's where we're going to run into trouble trying to cut the budget. In fact, we're already seeing the Republicans who were recently elected pull back on their original plans to cut back. Not that I'm surprised.
It starts with that whole "debt ceiling" thing. The Congress imposes a ceiling on it's spending. Then, every year, they raise the ceiling. What's the point of the ceiling? You tell me. I don't get it.
Well, there is some history behind this debt ceiling thing. It actually started in 1917, when the Congress wanted to be sure that the Treasury - which was raising money for World War I by selling Liberty Bonds - didn't sell too much debt. That first attempt to limit the issuance of debt strictly targeted the money raised to fund the war to be sure not too much debt was built up. It worked. This idea continued over subsequent decades, including the years of World War II, with some years seeing the debt ceiling actually lowered as the need for debt declined.
But over the years, a pattern developed that saw the amount of debt issued essentially reach the ceiling, so that the ceiling no has to be raised every year. This is where it's become a bit of a joke. Its a joke because the government no longer takes in enough money to meet its obligations, and has to borrow more year after year. So the debt goes up each and every year. And the cost of paying interest on that debt goes up each and every year - even with the low interest rates we've had recently.
Which now brings us to the question of what you want to cut to reduce the federal budget, which reduces the deficit the government runs every year, which means that at some point the debt itself will start to be reduced.
So, what's it to be? If you check my last post, you'll see the problem.
Now, wasn't the new Congress supposed to start cutting? Weren't all those Republicans that now have the majority in the House going to see to it that the "fat" starts getting cut? Well, they have in fact proposed $2.5 trillion in cuts. Sounds like a lot, but that's $2.5 trillion over the next 10 years. (You can see the specifics if you click here.) And if you look carefully, you'll see that none of that more sensitive stuff I mentioned last time is in the cuts. Not only that, but you'll also find that of that $2.5 trillion, a full $900 billion relies on a complete overturning of "Obamacare" - something that doesn't look like it will happen, since the Senate retains a Democrat majority, and they're not going to vote to overturn the administration's health care bill that was passed late last year.
So I think we really get down to individual Americans having to give up what they now consider to be "coming to them" - otherwise known as "entitlements." And it probably will entail a reduction in some items that aren't entitlements but are now considered necessities. For example, municipalities start cutting policemen, at some point the actual enforcement of the law will suffer. That's not an entitlement.
So, again, what's it going to be? Are you going to accept lower payouts of social security when you retire? Or how about a later age when you can start collecting social security? Are you going to accept paying more for your medical care when you're retired? Or how about simply not being able to afford to have certain procedures that you need if you're sick or injured?
What I'm trying to say is that I don't really see anyone voluntarily accepting the sorts of cuts in services that the government provides. And that simply means that we continue that game of raising the debt ceiling every year. Which is why it all seems like some sort of silly game to me at this point.
Comments