Some of the Reasons Why the "Staggering" Federal Budget Is So Staggering

Rep. Ike Skelton (D-Mo.) calls President Bush's proposed budget "staggering," which it is. And will likely be even worse once the new majority has gone through the thing. Some highlights/lowlights via the Wash Times:

Projects revenue of $2.662 trillion and spending of $2.902 trillion, for a deficit of $240 billion.

Spends $410 million to help the Internal Revenue Service collect taxes and tweaks tax rules—which the administration says could help collect $29 billion over 10 years in unpaid taxes.     

Calls for Medicare spending to rise at 6.7 percent annually over the next decade, down from the current projection of 7.4 percent, and for smaller reductions in Medicaid, for savings of $96 billion over five years.  

Pushes back the start date for private accounts in Social Security another two years, to 2012—a recognition that Congress is unlikely to approve such a program any time soon.    

Includes Mr. Bush's proposals for boosting alternative fuels to help decrease the use of gasoline, and his new health care proposal, which would amount to a tax cut on most Americans but a tax increase on those with the most generous health insurance plans.    

Calls for slashing 141 programs, which would save $12 billion in 2008.

Awright, we'll save $12 billion on what will likely be a $3 trillion budget in just two years!. More here.

Comments

[Christopher Monnier]

Speaking of corpulent…

[Rex Rhino]

Government spending is going to dramaticly drop. Look for a Soviet Union type collapse to happen to the United States in the next 10 years. The current situation is simply not sustainable.

The trouble is, people worship goverment. It is incomprehensible that there is any phyical or economic limits on the glorious omnipotent state for most people.

[Seamus]

Deficit of $240 billion? Holy crap! I remember when the total *budget* was $240 billion.

And Rex Rhino is right. Some day soon, the Chinese are going to decide it’s foolish for them to continue funding our deficit. And then . . .

[John]

“Projects revenue of $2.662 trillion and spending of $2.902 trillion, for a deficit of $240 billion”

And we need to raise taxes why? Because 2.6 trillion is not enough to run the government?

“Spends $410 million to help the Internal Revenue Service collect taxes and tweaks tax rules — which the administration says could help collect $29 billion over 10 years in unpaid taxes.”

The IRS does have to collect taxes. I seriously doubt that this program will collect $29 billion in revenue. That said, what is the point of this being on there? So what, at least the money is being spent on a government function, collecting taxes, rather than just lining the pockets of connected good ole boys.

“Calls for Medicare spending to rise at 6.7 percent annually over the next decade, down from the current projection of 7.4 percent, and for smaller reductions in Medicaid, for savings of $96 billion over five years.”

In Congressional speak that is actually a cut. We found that out in the mid 1990s when we learned that cutting the projected growth of a program is really cutting spending to the program. I guess Reason is angry that Bush plans to kick grandma out of the hospital. Hey, I would love to really cut medicare spending as much as the next person, would someone please explain how that can be done in this political environment? And after you are done, use your super human powers to do something easy like cure cancer.

“Pushes back the start date for private accounts in Social Security another two years, to 2012 — a recognition that Congress is unlikely to approve such a program any time soon.”

Privatization is a great idea. No one in Congress in either party will vote for it.

” Includes Mr. Bush’s proposals for boosting alternative fuels to help decrease the use of gasoline, and his new health care proposal, which would amount to a tax cut on most Americans but a tax increase on those with the most generous health insurance plans. ”

Give aways for alternative fuels is a bad idea. The tax stuff is hard to tell anything about.

“Calls for slashing 141 programs, which would save $12 billion in 2008.”

It is a start. A small one, but a start.

Considering the tone of most of Reason, I figured they would have come up with a list of ways that Bush plans to kill puppies and break into Mangu Ward’s dresser and sniff her underwear. What exactly is supposed to be so outragous about this?

[John]

“Government spending is going to dramaticly drop. Look for a Soviet Union type collapse to happen to the United States in the next 10 years. The current situation is simply not sustainable.”

Rex get your assault rifle and get back in your bunker. The deficit is a smaller percentage of GDP than it has been at many times in history. Look at the rest of the world. There are countries in Europe that have national debt two and three times the size of their GDP. I would like to see a lower deficit and something done about entitlements but we are a long ways away from a collapse. UGH!!

[NAL]

I think what really needs to be done is to raise the eligibility age for Social Security/Medicare. Right now it’s 62/65 (it’s set to go to 62/67 by 2022). With the average life expectancy of 77.9 years, that means people will be spending an average of 12.9 to 15.9 years living off the government. Social security and Medicare should be a “last few years of life” thing if it has to exist. It should be raised to around 70/73. (Of course it would have to be raised slowly over a period of 10-20 years, but it should be raised, nonetheless.)

That would not only help the Social Security crisis, but also would bring in more income tax from elderly workers.

[matt]

“What exactly is supposed to be so outragous about this?”

Spending more than you make is inherently outrageous. Doing it on a massive scale for decades and avoiding consequences is asking for trouble. We are asking for trouble with our budget habits. A lot of people (who don’t live in bunkers) have noticed this.

I tell myself I won’t feed trolls, but some people are just asking for it.

[Kyle]

John, educate yourself before talking out of your ass.

The US deficit is how far we are into the red in *one year*. The US national debt is officially 8.7 trillion dollars, which is about 2/3 of the official yearly GDP of 13 trillion dollars.

What these numbers don’t tell you is how far we are down the road to insolvency. This page will tell you that, and why a collapse—either through hyperinflation or outright default—is inevitable. There’s no way to know when it will happen, but it will happen eventually because the people electing our leaders simply don’t understand that you can’t get something for nothing.

[Cab]

“Spending more than you make is inherently outrageous.”

Don’t tell that to the bank the next time you want to buy a house.

[Rex Rhino]

Rex get your assault rifle and get back in your bunker. The deficit is a smaller percentage of GDP than it has been at many times in history. Look at the rest of the world. There are countries in Europe that have national debt two and three times the size of their GDP. I would like to see a lower deficit and something done about entitlements but we are a long ways away from a collapse. UGH!!

It doesn’t matter what percentage the deficit is of GDP. Government spending is reaching it’s absolute natural limits. All those European countries you mention are much smaller economies, with much smaller governments than the United States.

It is like saying that your friend earns only $1,000, and is charging $2,000 a year on their credit card, while you earn $500,000 a year and are racking up $1,000,000 a year in debt. The percentage is the same, but in the second case you are reaching the absolute limits of where you can keep borowing money.

The U.S. government is now at the point where linear increases in the size of government have exponential greater cost… where the people lending us money are reaching their limits to what they are willing to keep giving us. The U.S. state has now far exceeded even the Soviet Union, or any other political entity in the history of the world, in sheer size and expense.

You can joke all you want, but history has shown the same thing happen, from the callapse of the Soviet Union, to the collapse of the economies of lots of South American countries… to the collapse of the great European empires after WWII. Only an arrogant fool would imagine that the United States is somehow immune to these economic and political realities. Or someone who worships the state!

[Lord Jubjub]

Part of the $8.7T debt is money that the government owes to itself. The debt held by the public (including the Chinese) is half of that.

Now mind you, part of that self-debt is owed to Social Security. Hope your 401(k) and IRAs are fully funded. . .

[Guy Montag]

All this over the PB (President’s Budget)?

That has been irrelevant since 1974. The PB is as “binding” as a non-binding resolution in one house of Congress.

The PB is almost an information paper to the Congress.

ALL budget authority is in the Congress and the Congress, since the 1974 Anti-impoundment Control Act, has the power to make sure what they appropriated is spent by the Executive. Prior to 1974 the President could impound funds, not sepnd them and go on. At no time was it legal for the President to misappropriate funds and the people in the Executive Branch who actually sign for the funds are heald strictly accountable for this.

I really wish that some writer (other than the writers of Fiscal Law text books) would get this straight when they write an article.

Anyway, the Congress may or may not even look at the PB and they will pass their budget without even a by-your-leave to the Executive.

Apparently, at the December Reasoniod gathering, I babbled to the wrong writer at length about this, or perhaps he did not have enough drinks to remember the lesson.

[MP]

Hope your 401(k) and IRAs are fully funded.

It is impossible for them not to be, since they are not defined benefit plans.

[Son of a!]

“If something cannot go on forever, it will stop.”

[Guy Montag]

Some day soon, the Chinese are going to decide it’s foolish for them to continue funding our deficit. And then . . .

others will buy our bonds. BFD. Next ‘crisis’?

Before you start that fiction about the Chinese ‘calling’ US Bonds, the holder can not call a bond, the issuer does.

I guess that thing about Ohio being a State will be next on the non-issue agenda?

[John]

Guy very good point about the Presidential Budget. Note of course that many of our budget problems started after the 1974 act.

The rest of you are tinfoil hat nuts. The country is not going to collapse from spending. But there is no reasoning with this kind of thinking. It is just like the thread a few weeks ago on the need for the return to the gold standard. “The dollar is based on nothing, the world will end soon.” Economic ignorance is not the sole purview of the left. It exists on the right, the paleoright in particular.

[Edward]

Wait a minute. Wouldn’t breaking the government be a good thing from the libertarian perspective?

[Smappy]

So what, at least the money is being spent on a government function, collecting taxes, rather than just lining the pockets of connected good ole boys.

So that the gov’t will have another $28.5 billion to . . . line the pockets of connected good ole boys.

[Guy Montag]

Rex,

No, it is like saying that 10 years ago I made 40,000/year and had $5,000 in unsecured debt. Now I make $100,000/year and have $7,000 in unsecured debt and 10 years from now I might make $1,000,000/year and have $60,000 in unsecured debt.

The amount of debt is increasing, but as a percentage of earnings it is decreasing and becoming more manageable.

[Smappy]

Oh, but I do agree with John that there is some tin-foilery going on right now.

[joshua corning]

Awright, we’ll save $12 billion on what will likely be a $3 trillion budget in just two years!.

Starting from 2.902 trillion in spending that would only be a 3.3% increase and over two years would be an annual growth rate of 1.65%…which is below inflation and well below annual GDP growth….so in relation to the actual economy the government is shrinking…not fast enough for my tastes…but still IT IS shrinking.

[TrickyVic]

Three Trillion dollars divided by 300 Million is 10,000.

That’s $10,000 debt for every man, woman, child, and baby.

[MP]

“The dollar is based on nothing, the world will end soon.”

It is very hard to conceptualize how an economic model that is based on promises to shuffle IOUs around has any concrete foundation. There are no real assets at stake.

[TrickyVic]

“””Wait a minute. Wouldn’t breaking the government be a good thing from the libertarian perspective?”””

Breaking the government would be a bad thing regardless your political affiliation. When the government is screw, it’s citizen are f***ed

You want limited government not no government.
Not that I’m a libertarian, I value individual rights over corporate rights.

[Guy Montag]

TrichyVic,

You forgot about all of the other economic entities in the country too. Need to add every business, corporation, bookie, drug dealer, etc. as seperate entities. Well, unless you are going for meaningless hysteria.

[Bush]

“…Bush plans to kill puppies and break into Mangu Ward’s dresser and sniff her underwear. ”

Done and done. Oddly enough, smells like Cheetoes.

[TrickyVic]

Not IOU’s MP, credits stored in your cell phone.

[Timothy]

Did y’all know that Guy Montag has a blog? And that he blogs about things? It’s true! Check out his blog!

Blog blog blog blog blog blog!

[TrickyVic]

Guy, which entity uses a currency not backed by the government?

We could trade trinkets or barter. Or, create our own currency, I think there are places in Germany that doing that. We’ll see if it works for them.

[joshua corning]

Guy, which entity uses a currency not backed by the government?

WORLD OF WARCRAFT!!!

In other news the horde is still ganking at Sentinel Hill and peaceblooms have continued to fall, while prices of strange dust continues to sit at 4 gold per 20 stack at the Stormwind Auction House.

“Those dicks” said herbalist gnome Lovstocum who collects and sells peaceblooms at the local auction house

[pigwiggle]

I’m not so worried about a soured economy as long as I can make some shit you need more than the shit you got. I make graphs. Anyone need some graphs?

[jb]

Pigwiggle wins the thread. Or at least makes me actually laugh out loud.

But I don’t need any graphs.

[fyodor]

Cab,

“Spending more than you make is inherently outrageous.”

Don’t tell that to the bank the next time you want to buy a house.

The next time I buy a house will be a ways down the road and will most likely be coupled with selling the one I bought previously, presumably at a profit. That’s a little different than spending more than you make year after year, and on stuff that won’t increase in value.

[Guy Montag]

We could trade trinkets or barter. Or, create our own currency, I think there are places in Germany that doing that. We’ll see if it works for them.

Well, we already trade an easy means of exchange. No longer need we trade cows for driveway paving, we have now have US Dollars. Yes, I saw the thread on alternate currencies in Doichland, there was a link to alternatives in Stati Uniti also.

Are you one of those ‘Ohio is not a State’ folk?

[Guy Montag]

Timothy,

You failed to mention that my /. journal link is usually the link that is my screen name here. Sometimes it is my AOL journal, TheBookOfCharger about my 1972 Dodge Charger Rallye and other stuff.

Do you have a ‘blog or something? Like http://www.onehandedeconomist.com/ or is that something from some flakes who don’t know shit about military service?

[Guy Montag]

“Spending more than you make is inherently outrageous.”

Perhaps to the Amish, Muslims and Luddites. If ‘usury’ is a ‘sin’ to you, don’t do it and leave the rest of us alone.

[Tommy Jefferson]

Being China’s bitch is gonna suck.

When they occupy us for debt default, they will make our occupation of Iraq look like Lilith Fair.

[Seamus]

Some day soon, the Chinese are going to decide it’s foolish for them to continue funding our deficit. And then . . .

others will buy our bonds. BFD.

But at what interest rate? We’re getting an amazing deal right now because the Chinese are willing to fund our debt at relatively low rates. Once they decide they no longer want to hold dollar-denominated debt, we’re going to have to offer much higher rates to attract bond buyers (who will still probably be foreigners, since Americans don’t show much interest in saving these days). At some point, we either (1) start running consistent budget surpluses, (2) default on our debt, or (3) inflate the money supply so we can service our debt. Options (3) will make it necessary to offer even higher interest rates to keep bond-buyers interested, which means we’ll be faced another round of the same menu of options. Eventually, the whole house of cards will collapse, and we’ll be facing “austerity” measures imposed by the IMF or some similar body.

[rob]

Wow. The Chinese are going to invade the U.S. because they bought up a bunch of U.S. debt?

TJ wins the thread for bat-shit crazy, though Rex comes in a close second…

Hey, when you guys get a chance, pick up P.J. O’Rourke’s book on Adam’s Smith’s “The Wealth Of Nations.” If anything can talk you down from your “Mad-Max”/”Red Dawn” dystopia fetishes, it can.

[Seamus]

Guy very good point about the Presidential Budget. Note of course that many of our budget problems started after the 1974 act.

My recollection is that the 1974 act was passed to try to get some control over the problems, which had been already been evident for some time. (I’m talking about the budget provisions, not the impoundment provisions, which were a direct reaction to Nixon’s actions.)

[Eric the .5b]

It takes a remarkable sort of weenie to not only call it “/.”, but to call it that outside of slashdot.org…

[Guy Montag]

Seamus,

I am not sure what the stated intent was, other than the Congress had abdicated its budget control power (through lack of use against over 20 Presidents, including Nixon, per the USSC) and had to enact a law to get it back.

[Guy Montag]

Eric the .5b,

Please stop scaring me and don’t make me cry.

[Public Agenda]

Two of our new public opinion studies conclude that the public has
little difficulty understanding the magnitude of the fiscal challenge
facing the nation. And while the public is also willing to consider
tough trade offs to address the growing national debt, support for
program cuts, reforms or tax increases comes with one key condition:
finding ways to increase trust that their leaders will spend their money
responsibly and for the purposes intended. So, there are some
interesting and timely topics at hand. For more info go to
http://www.publicagenda.org/pubengage/pe_facingup.cfm

[joshua corning]

Spending more than you make is inherently outrageous.

Last I checked an aircraft carrier produces the benefit of protecting our nation over time…not just the year it was built and launched…so it would make sense to spread the costs of the multi year benefits that that aircraft carrier endows over time rather then paying for it in one lump sum.