JohnnyBz00LS said:
READ MY LIPS: A BUDGET DEFICIT IS A BAD THING FOR AMERICANS, DAVID. IT MEANS THE US HAS TO BORROW FROM FOREIGN INVESTORS TO MAKE ENDS MEET.
You are so blinded by your allegance to the GOP way of thinking.
The GOP consistantly sells-out a piece of america to foreign investors for each dollar of budget deficit. WHERE is it going to end if we continue operating under a deficit?? You expect the US governement to just file some kind of "bankruptcy"?? Sooner or later those foreign loan sharks are going to lay an eviction notice at our feet because they friggin' OWN most of the US soil thanks to the misguided budget policies of the GOP. The US government CANNOT continue operating under a budget deficit FOREVER. The GOP has run up the national debt so high we can hardly keep up with the interest. Am I going to have to school you on "compounded interest" now??
You couldn't be more wrong in every way.
First of all, I'm not against government spending. I AM against government waste and entitlement programs. Don't look now, but the military isn't an entitlement program.
STRIKE ONE.
US SAVINGS BONDS are a form of national debt, which are bought not only by foreign investors, but also by Americans.
STRIKE TWO.
Look at the federal budget. There will NEVER be meaningful cuts in spending by cutting military spending, only by cutting entitlement programs. You expose yourself as pro-entitlement, anti-military. That makes you anti-American and likely a communist.
STRIKE THREE.
You assume I love the GOP but you (so soon!) forget that I've as much as disowned the GOP. You are so blinded by your own hate, you attack me with slavering jowls while ignorant of the true set of facts.
STRIKE FOUR.
Budget deficits are bad for America. True. But increasing taxes is the WRONG WAY TO REDUCE THEM. I can tell you never took Econ 101 in college b/c that's exactly what they teach. REDUCE SPENDING ON ENTITLEMENTS and the deficit goes down.
STRIKE FIVE.
As for your name-calling, I'll let Bryan and Joey deal with you.
THE FEDERAL BUDGET: Overview
The Issue at a Glance
The federal deficit has returned and with it difficult decisions as the government copes with a sluggish economy and new commitments abroad.
Two years ago, the U.S. government was projecting surpluses “as far as the eye could see,” a dramatic turnaround from decades of deficits that cramped the government’s options in nearly every policy area. Then an economic downturn and the Sept. 11 attacks changed everything. Tax revenue fell while spending for domestic security and military operations in Afghanistan and Iraq rose. The nonpartisan Congressional Budget Office now predicts that the government will end the 2003 fiscal year with a $401 billion deficit -- the largest in raw dollars in U.S. history.
Much of the debate has surrounded President Bush’s tax cuts, intended to spur the economy. Republicans say the $350 billion tax cut, signed in May 2003, will stimulate the economy and thus bring in more revenue in the long run. Democrats say the trillion-dollar tax cut passed in 2001 is one of the main reasons for the deficit and that the 2003 cuts will make things worse.
There is a famous axiom, "to govern is to choose." Creating the federal budget is an exercise in making choices, often choices that will make a dramatic impact on individual Americans. Even in a federal budget of more than $2 trillion, there isn't enough money for everything. And choices made now can have implications for years to come. What happens to the federal budget can determine how much your take-home pay will be, whether you can get a college loan or a home mortgage and how secure your retirement will be, not to mention the indirect impact on the quality of your local schools, roads and police.
Discretion and Entitlements
Not everything in the budget can be cut, even if Congress and the president wanted to. Some programs, such as Social Security and Medicare, are "entitlements" the government is obligated by law to provide. Other services, ranging from national defense to national parks, may be vitally important but for budget purposes are still considered "discretionary" (and so are easier to cut). In the early 1960s, two-thirds of the budget was considered discretionary spending. But entitlements have grown dramatically since then, and now only about a third of the federal budget is discretionary spending. Plus, entitlement costs are rising faster than most other areas of the federal budget.
The entitlement problem will likely continue into the foreseeable future. It isn't that entitlements are completely untouchable --- Congress could change who's eligible for a program or the formulas by which benefits are spent. But reforming such popular programs is complicated, unpopular and politically dangerous. In effect, today’s budget choices are greatly influenced by budget choices that were made decades ago. (For additional context, see Public Agenda’s issue guides on Social Security and Medicare).
Other choices depend on events. While there may be debate over the specifics, everyone acknowledges the government had to respond in some way to the Sept. 11 terrorist attacks. The White House budget message estimates that spending to recover from the attacks and improve domestic security amounts to at least $100 billion through 2003 and will likely result in $50 billion in recurring costs "for the foreseeable future." It isn’t clear how much the Iraq war and subsequent rebuilding will cost, but the CBO estimated before the war that it could cost about $33 billion, with another $1 billion to $4 billion per month to maintain an occupation force.
Return of Red Ink
For federal finances, 1998 was a watershed year. After decades of annual deficits, the federal government finally showed a budget surplus. While the deficit had been around since the early 1970s, it skyrocketed in the 1980s when President Reagan and the Democratic Congress enacted spending increases, particularly for a military buildup, as well as tax cuts. The balanced budget in 1998 was credited in large part to a surging economy in the mid-1990s that boosted tax revenues.
But when the economy weakens, so do tax revenues. More people are unemployed, investments are sluggish and consumers put off major purchases -- all of which decrease the amount the government gets in taxes. This affects all levels of government. It's no coincidence that state governments are facing even more serious budget problems than the federal government.
The projected 10-year budget surplus is also drying up. When Congress approved the president’s trillion-dollar tax cut last year, the projected 10-year surplus stood at $5.6 trillion. The most recent 10-year outlook from the CBO now estimates a $1.4 trillion deficit over that period. It's important to note, however, that both the Bush administration and the CBO also project that annual deficits will peak in 2004 and then decline over time. Just as important is the fact that the projections presume there won’t be any major new spending programs or tax cuts in that period.
Riding Off Into the Sunset
One reason for both the projected decline in the deficit and for the complexity of the problem is the fact that not all of President Bush's tax cuts (either the 2001 cuts or the new ones passed this year) are permanent. Many of these cuts will expire, or “sunset” in congressional jargon, at some point in the future. For example, the federal estate tax is being gradually reduced until it disappears entirely in 2010 -- and then will return at its old level in 2011 unless Congress votes again to remove it.
Why put a sunset provision in a tax law? In general, it's been a compromise between those who believe that tax cuts are the best way of stimulating the economy and those who fear cuts will run up the federal deficit. By making the cuts expire, the government theoretically gets the short-term economic benefit while avoiding the long-term problems. It also reduces the federal government's projections of long-term deficits, since budget officials presume those taxes will come back. As a matter of practical politics, however, it may prove difficult for Congress to reimpose such taxes.
Does a Deficit Matter?
There are different schools of thought on budget deficits. (There's a distinction between the budget deficit, which is the amount government spending outstrips revenue in a given year, and the national debt, which is the total amount the government has borrowed over time).
One group of economists suggests that deficits have their uses. Moderate, well-managed deficits can stimulate the economy, because additional government spending will create jobs. Other experts argue that it's a bad idea for anyone, including the government, to borrow money to pay year-to-year bills. When deficit spending gets too big or goes on too long, that government borrowing inevitably raises interest rates, increasing the cost for such things as car loans and home mortgages, while making it more difficult for businesses to borrow money for expansion. Long-term deficits also cramp the government’s ability to create new programs and respond to new circumstances.
Still another set of economists, though, feel that surpluses and deficits mean little in such a huge economy, and that an undue focus on red ink leads to program cuts or higher taxes, which do greater damage. The administration says that it is dealing with extraordinary circumstances -- a recession and the war on terrorism -- and that something has to give in order to fuel an economic recovery while coping with an emerging threat to our national security.
The administration also points out that the current deficit, while the largest ever in real dollars, is only 1.9 percent of the total economy. That’s a relatively modest figure, particularly compared to the deficits of the 1980s. Because of that, some (but far from all) economists say this deficit may prove less damaging to the economy.
Ups and Downs
While the president’s $2.1 trillion budget proposal for the next fiscal year represents a 4 percent increase overall in current spending, not every program gets an increase. The biggest proposed increase would come in defense spending, which would rise by $15 billion to $380 billion under President Bush’s plan. The new Homeland Security Department would also see its programs get a steep increase to more than $36 billion. There would also be increases for the president's education plan, the No Child Left Behind Act, which would get an addition $1 billion, and an addition $1 billion for special education. Many other programs, however, would face cuts, such as Medicaid, veterans benefits, the earned income tax credit and many child nutrition and insurance programs.
All of those changes are subject to debate in Congress. One reason why the federal budget debate is so complicated is that there isn’t one "budget bill" to be passed. Generally taxes are considered in one piece of legislation, and then there are 13 separate appropriations bills covering various departments.
The Public's View
Surveys show the public divided on some basic questions regarding the federal budget. They are split, for example, on whether it is more important to control the deficit or reduce taxes. Americans tend to like the concept of tax relief but, at the same time, they also feel that domestic programs deserve more funding.
In any case, most Americans do seem to focus more on what the government does than how much it spends. Most people tell public opinion researchers there are more important priorities than balancing the budget, including terrorism, the economy, education, Social Security and health care. Surveys show most believe President Bush’s tax cuts may help the economy in the long run. But when asked what bothers them about taxes, more Americans say they’re bothered by the feeling that other people don’t pay their fair share than they amount they pay themselves.
http://www.publicagenda.org/issues/overview.cfm?issue_type=federal_budget
*owned*