Good article re: deficit

[billvon 2,463]

It places the blame squarely where it needs to be. From The Economist:

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America's fiscal challenges
It's not them, it's you

Jan 7th 2013, 20:23 by R.M. | WASHINGTON, DC

ANN LYNN of Scottsdale, Arizona, wrote a letter to the New York Times last week that sums up the thinking of many Americans regarding the country's fiscal outlook.

However much we raise taxes and/or try to cut spending, we will constantly be thwarted if Washington does nothing about government waste. I would have no objection to paying taxes (within reason) if only I did not know that so much goes right down the drain!

My holidays were spent with a political crowd who share Ms Lynn's aversion to "government waste", which they would define broadly to include money spent on welfare queens and food-stamp fraudsters, as well as unnecessary government workers and unwanted public services. In fact, they would include most of the stimulative outlays enacted under Barack Obama. This wasteful spending needs to be reined in or America will go the way of Greece, they say.

You can see why many Americans are opposed to raising revenue in an effort to close the budget gap. They don't like the things they believe their money is buying. Fortunately, as the economy recovers, their money is buying less of these things. In fact most of the story behind America's recent string of large deficits is slump-related, a result of lower tax revenues due to the underperforming economy, and increased spending on things like unemployment insurance, food stamps and Medicaid. As the economy recovers, revenues increase and safety-net spending declines, the debt-to-GDP ratio should return to a relatively stable level in the short term.

The longer-term fiscal outlook is more bleak, but my holiday crowd does not distinguish between the distinct challenges. They again blame "waste" and those they call "the takers". Some people are hooked on government handouts, they say, echoing a common refrain from last year's election battle. In keeping with the remarkable disconnect between the actual takers and their perception of reality, none of my group acknowledges their own enjoyment of government social programmes.

Many Americans don't like the things they believe their money is buying. But their bill is hardly reduced by cutting payments to the jobless, dependent moochers they see as the cause of the country's fiscal troubles. Last year the Center on Budget and Policy Priorities ran the numbers and found

People who are neither elderly nor disabled — and do not live in a working household — received only 9 percent of [entitlement] benefits. Moreover, the vast bulk of that 9 percent goes for medical care, unemployment insurance benefits (which individuals must have a significant work history to receive), Social Security survivor benefits for the children and spouses of deceased workers, and Social Security benefits for retirees between ages 62 and 64. Seven out of the 9 percentage points go for one of these four purposes.

The story is similar when looking at discretionary programmes—if there is a pure "entitlement society", it is small and poorly funded.

There is a reason politicians often do not specify which spending cuts they're talking about in budget negotiations: the popular ones (see cuts to foreign aid) don't add up. And, in general, Americans do like the programmes that primarily drive the country's fiscal imbalances—notably Social Security (20% of the budget) and Medicare (21%, taken with Medicaid and CHIP). Most of us do or will (hopefully) benefit from those programmes. That leaves us with the uncomfortable reality that we, not the jobless moochers, are the problem.

Greg Mankiw, an economist and former advisor to Mitt Romney, made clear the challenge facing America in a column two weeks ago: "Ultimately, unless we scale back entitlement programs far more than anyone in Washington is now seriously considering, we will have no choice but to increase taxes on a vast majority of Americans." My colleague notes that Jonathan Chait is confident that Americans will choose tax hikes over cuts to their own entitlements. But is that really the calculation most Americans are making? Most are still in denial over their role in America's fiscal drama. And as long as they are able to find convenient scapegoats for the country's fiscal challenges they will oppose the infliction of pain on themselves. Someone needs to tell these people, it's not them, it's you.

[chutem 0]

Quick and probably way to simple math puts the 2012 deficit at $3809 per person in the US. (1.2 trillion/315 million) I would happily agree to pay this increase for myself and my family if everyone else in the US does the same and the gov could agree they will not up spending with all that new cash coming in. I'd consider it an investment in my childrens future.

Problem solved we can all go on with our lives now.

[kallend 1,672]

So basically the article is saying that only 2% of the federal budget goes to the causes that the right wingers spend 99.9% of their time griping about.

...

The only sure way to survive a canopy collision is not to have one.

[DrewEckhardt 0]

Quote

Quick and probably way to simple math puts the 2012 deficit at $3809 per person in the US. (1.2 trillion/315 million) I would happily agree to pay this increase for myself and my family if everyone else in the US does the same and the gov could agree they will not up spending with all that new cash coming in. I'd consider it an investment in my childrens future.

Problem solved we can all go on with our lives now.

I wouldn't willingly surrender a dime more until they get a handle on truly wasteful spending and corporatist laws that artificially increase prices at which point the deficit could be eliminated with zero net cost to the citizens.

2011 military spending was $711 billion (this does not include homeland security, DOE spending to protect nuclear materials, etc.) The number 2 ranked NATO country was $62 billion and Canada with our same land mass only spent $25B.

Only doubling the UK's spending and still beating China would save $1900 for every man, woman, and child.

In terms of purchasing power parity, US governments spent more on health care than all but three other countries (Monaco, Luxembourg, and Norway). We're insuring just 25% of our population with the sort of spending that much of the world uses to cover their entire populations. This is because "health care" is more about funneling tax dollars to for-profit corporations than taking care of people.

Cutting out the corporate middle men and spending the same money could save thousands of private dollars for every man, woman, and child.

Etc.