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Wednesday, July 27, 2011

ok, wait a minute

Coming back to the government's job in a moment...
Boehner and Reid are touting plans that each call for about $1 Trillion/$2 Trillion or so in cuts over 10 years from discretionary spending, "cleaning up waste" and, for the Democrats, savings from pulling out of Iraq and Afghanistan. But no revenue changes.

1) In 10 years, who will in office in Washington DC? Right! We don't know.  But, whoever is in office is not bound to any deals made now, so that part of any plan falls under wishful thinking.

2) These proposals mean that about $100 Billion a year is cut from spending on the discretionary part of the budget, lowering it from oh, lets say $650 billion to $550 billion. (The Democrat's plan has a snowball's chance in hell in the House--the goal of the GOP is embarrass the President into not getting re-elected, so they won't consider it, thus rendering his party's plan moot.) Let's pretend for a moment that the prices of the various goods and services paid for by the US government won't change over 10 years (yeah right...but ok, just for kicks there's no inflation either...) So $100 billion will come off of the $1.2 Trillion budget shortfall. So we'll put that $100 billion toward reducing our $14 Trillion dollar gross national debt? Maybe we should all send them our pennies too, and help them pay that down quicker!

3) Social Security and the other Mandatory spending items will be reduced through streamlining Medicaid.  Aaaannnnd Social Security will continue to rise as more and more of our population ages.  Wanna bet that this increase in expenditures will off-set the mysterious waste that will be taken care of by these plans?

4) And hello, Democrats, are you actually foolish enough to imagine that in the next 10 years the US military will only be deployed here at home, that the US will not involve itself in any foreign conflicts, and we will magically be at peace, thus lowering our $680 Billion dollar defense commitment?  Get a grip!

5) All the while, no new revenues will be raised, meaning that unless the American public magically begins to earn higher wages from the imaginary jobs that are being created, we will continue to see a collection of around $2 Trillion in revenue...which will remain lower than spending levels under the best of circumstances.

6) All the while, our current examples of government incompetence is already resulting in lower confidence in the US to fix these problems.  This means that fewer investors will want to buy US bonds. Which means that interest rates on those bonds will need to be raised to make them more enticing to investors.  Which means that the US government will have to pay more money in interest payments to bond holders, which means that this portion of the budget rises...

Man, sure looks like that $100 billion a year (hell, even $200 Billion a year if we want to pretend that the Dems plan will get passed) will really fix the problems we have with the levels of national debt, won't it? Good work, you bunch of monkeys wearing suits....

2 comments:

  1. AH yes, I wonder what you're thinking now? Spending cuts in NH have just led to the lay-off of approximately 350 people at different hospitals around the state. But this is the queen of no revenue states, so I see no way in hell that the plan in D.C. will fix anything. No way, no how. A bunch of sound and fury, signifying nothing, to quote a famous writer.....

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  2. yep. sound, fury, posturing and very little substance. I fear that cuts like those are only the beginning...I wonder why it is that conservatives believe that hammering the average citizen is a viable campaign strategy...On the other hand, I admire our president's ability to blow a negotiation...Start with a position that revenue must be a part of the compromise, and end with settling for the ceiling being sort of raised...I heard that Congress had an approval rating of between 6 and 19%...my question would be who the hell said they were doing a good job??? Throw the bums out, I say...

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