A rainy, gray sky tops the U.S. Capitol dome on the first day of the new session of Congress in Washington, U.S. January 3, 2017. REUTERS/Jonathan Ernst
Jonathan Bydlak, The Hill: Missing: Fiscal sanity in Washington
While it is often an overused and vague term, this year is showing that the “historic debt” not only has a definition, but it is becoming all too real for Americans heading into 2019.
Bloomberg reported: "Total public debt outstanding has jumped by $1.36 trillion, or 6.6 percent, since the start of 2018, and by $1.9 trillion since President Donald Trump took office, according to the latest Treasury Department figures. The latter figure is roughly the size of Brazil’s gross domestic product."
If this year’s debt growth rate is sustained through the end of the year, it would be the biggest jump in percentage terms since the last year of President Barack Obama’s first term.
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WNU Editor: U.S. tax cuts and deregulation have stimulated more economic activity and employment. In turn this has resulted in more government revenues .... but the budget deficit is still growing uncontrollably. This tells me only one thing .... this is not a tax problem, this is a spending problem. And it is going to get worse. The stock market is now a "bear" market, and the revenues that governments collect from the stock market are going to be lower. Here is an easy prediction .... expect even higher deficits in 2019. And if there is a recession .... you can take this to the bank, this is going to be a crisis. And while quantitative easing may help in such a crisis .... 8 years of it under the Obama administration has resulted in a 4 -5 trillion shortfall that cannot grow any further. There are no longer any easy options for the Congress. They can either raise taxes and thereby guarantee a slower economy and less revenues (even thought they are raising taxes), or they can cut and/or freeze entitlements, which I do not see happening under a Democrat Congress.
3 comments:
Actually cutting military spending would be the easiest place to cut or at least it should be. In 2017 the US spent $602.80 billion, China spent $150.50 billion, and Russia spent $61.20 billion. These nations only spent a fraction of the amount the US spent and is spending on its military yet these nations' militaries are every bit equal to America's armed forces and are, in some areas, stronger.
Obviously a scaling back in the missions and the deployments will be needed. Essentially US defense policy needs to be adjusted to reality and not what someone wishes reality to be. Giving unlimited funds to anyone can be dangerous. Giving them to incompetent boobs such as those who currently run the US military is even more dangerous. So simply, "SPEND MOAR ON TEH MILITARY!!11" will likely only make matters worse.
The editor is spot on when he points out that this a spending problem and not a tax problem. Actually the tax cuts and regulatory reforms are a step in the right direction but are only a baby step. Far more actually needs to be done.
The editor is also correct on no easy options for Congress. Raising taxes is not a viable option as it will only strangle the economy. Increased regulations and the costs that go with them are an even worse idea. As such, the only viable options are to cut "entitlements." "Entitlements" will need to be defined. The two things that I think need to be preserved at present are 1.)social security for retirees and 2.)social security disability benefits for workers that are now unable to work and are based upon their earnings and on the taxes they paid into the system. Actually government lands could probably be sold to generate the necessary revenue to cover these.
Also, enormous sums are going to need to be spent in the coming decades to pay for the medical care of disabled veterans who have been maimed in these endless, needless, and needless fruitless deployments that not only haven't advanced American interests but have actually undermined them. I'm pretty sure Russian and Chinese leaders wake up everyday thanking whatever god they believe in that the challenges their countries face is nowhere near those faced by America.
Well, considering Chicago and Detroit, the spending hasn't calmed some of the masses at which it was aimed.
Lets' try an old fashioned dose of Darwinism; cut & trim the social engineering experiment spending or at least redesign the eligibility requirements. Loser behavior sinks, winners float. It will take one decade at least, though when work requirements are added to eligibility requirements there has been a documented and rapid response so evidence of some results will be immediate and can then be adjusted if seen to be necessary to achieve the program's end results. We don't have to wait while the effort is forgotten and disappears from consciousness once the initial whoop de doo passes.
The problem is politicians mixed with old and inefficient concepts. If the limelight were taken off the bill passing and more on the long term results of the bill passing I think the response from the taxpayers would be more critical and reflective of reality for all involved and less so for the limelight seeking pols responsible for the legislation and programs.
I volunteered for two years with a remnant of one of Lyndon Johnson's "Great Society" programs in 1980 and '81 when much of it was being closed down. The OEO; Office of Economic Opportunity. Primarily a well intentioned make work program whose flame had dimmed. The Vietnamese refugees I have written of before got it real quick; nothing here but papers to fill out and other places to go to fill out more papers.
Most people, I believe, want a job, not a handout. The OEO was a job for a few at great cost whose results were almost not measurable and of equal benefit. The taxpayer shouldn't be forced to provide pool admission tickets to neighborhood children. Who I might add, were so ill raised they were quickly restricted to certain hours of use due to complaints by other users of that municipal pool in Sacramento CA.
Those tickets were then described as clients assisted on the record keeping. Another Potemkin village from Washington DC.
Ok. I done typing.
Poster, as one on SS I agree it should be modified. I was credited with $18,600 when I began collecting it. In three years I received that much in SS checks. I find that overly extravagant. Beats all to heck nearly any investment I ever made. It's a Ponzi scheme; it depends on a growing number of participants to make it work.
I must have been typing out my first letter as you were typing yours.
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