Deficit Facts Ignored by our President Created by msouder on 12/4/2012 9:45:30 AM
Here is the deficit facts, from the numbers included in President Obama's numbers (which are, if anything, optimistic):
Total annual revenue: 2.57 trillion
Entitlement spending (mandatory) 2.166 trillion
Interest on debt .251 trillion (this will soar if interest rates rise, critical to assumption)
Total 2.417 trillion (other sources have it higher, around 2.6)
In other words, mandatory spending absorbs all revenue.
Discretionary spending totals 1.415 which is all deficit. This is what Congress spends each year in the appropriations bills each year that they can control without changing laws governing, say, the student loan program.
The so-called "sequestration" agreement (that if a deficit reduction bill that reached 1.5 trillion over 10 years was agreed to that money would be "automatically" be taken from discretionary spending) is not the same as the binding tax law, but still would need to be repealed by Congress.
The sequestration without touching mandatory (entitlement) programs or raising taxes will absolutely hammer defense spending, which is about 64% of discretionary spending. Much of that spending is related to personnel. Thus new and current weapons systems like are made in the Fort Wayne region would be devastated. They are trying to downplay this right now so as not to panic this area, but truth is the truth.
Veteran's spending, because it is thrown in with military construction (things like our Air Guard base) is heavily discretionary with some entitlement. The so-called "peace dividend" never really occurs because of a combination of variables including returning vet costs, declining revenue from defense employers, etc. Usually, such as post-Vietnam, you save minimally at best. It is not an argument for or against war: it is just a fact.
Entitlement spending of 2.166 trillion minimum is about 60% social security and medicare. Medicaid is another .3 trillion (12% or so). "Other" is a broad category of everything from food stamps to student loans.
Mandatory spending (entitlement) means that you are "entitled" to receive that money based upon meeting the criteria and can't be denied.
Their are mixed programs ("capped entitlements") which say that, for example, you are entitled to it if you meet such and such criteria, up to a fixed amount. Other programs like Medicaid were turned into mostly capped entitlements granted to the states, who then could either gain or lose money depending upon how they structured it.
This, believe it or not, is waaay waaay simplified but gives you the basics.
"Congressional earmarks" BTW were, at peak, 1.5% of discretionary. Foreign aid is less. So eliminating both solves absolutely nothing. Barely an asterisk in the budget. (All money must be "earmarked" - an earmark means designate where it is to be spent, so the President earmarked a minimum of 98.5% of the budget with his preferences - which was Ron Paul's point for opposing getting rid of so-called earmarks.)
Reading these facts easily points up charlatans on the left and the right who provide "quick fix" answers. If you talk radio people talk about foreign aid and earmarks being the solution, laugh. If you hear liberals, like our President, or conservatives say this can be done without touching entitlements, they are irrelevant to real debate. Look at the numbers.
And remember this, tax increases never, ever produce expected revenues after one year (the taxpayers adjust) whereas tax cuts, ironically, also produce more revenue than expected (to a point). So don't be tricked by the "soak the rich" argument as a solution either.
Lastly, this whole stupid debate holding our economy hostage is about 1.5 trillion over 10 years. Even if the number of retired people doesn't increase (but boomers are in fact retiring in greater numbers), and even if we don't live longer (which we are doing), which would freeze entitlement expenditures, the annual deficit is 1.26 trillion EVERY year or nearly 13 trillion over the 10 years. Meaning it is a drop in the bucket at best, and we will actually be losing ground if entitlement spending continues to increase.
The only good news, so to speak, on that front is that ObamaCare will dramatically reduce new inventions in health care so we likely won't add years to retired people's lives as much as we have been doing. If you call that good news.
Have a wonderful, happy day. Or just ignore all this and cheer for Notre Dame, enjoy Christmas and trust God that somehow a miracle will occur.