A quick budget deficit summary (and solution)

Posted on September 8, 2010

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At this point, it would be helpful to recall how much spending Democrats have added to the annual federal budget since taking control of Congress: over a trillion dollars.  The final budget from the Republican-controlled Congress, FY2007, spent $2.77 trillion and had a deficit of just under $200 billion, even with the war included.  The last budget from Democrats came in at over $3.8 trillion, with a $1.3 trillion deficit.  That’s a 38% increase in just three years.

Are we to believe that Congress can’t find $400 billion in annual spending to trim out of the massive expansion committed by Democrats?  After all, those same Bush tax cuts were in place for several years by FY2007, and the annual deficit didn’t rise above $500 billion in any one year.  The massive explosion in deficits didn’t come from a sudden revenue shock as much as it did from massive increases in federal spending, regulation, and expansion.

Let’s look at the facts. The projected deficit for 2015 is 4 percent to 5 percent of G.D.P., depending on whose assumptions you use. A sustainable level is more like 3 percent or lower. So we need deficit reduction of 1 percent to 2 percent of G.D.P., or about $200 billion to $400 billion a year by 2015. These figures are uncertain, but they’re the best we have (and they may well turn out to be too optimistic).

Anyone – what hasn’t been calculated in all of this?   That’s right, cut spending by that amount over the next decade.  That’s 300 billion a year.

Undoubtedly, this will mean tough choices for legislators.  Rep. Paul Ryan’s roadmap on the budget acknowledges that it will take entitlement reform and reduction and an end to favored government programs.  But not only can it be done, even without some of those choices it was being done until Democrats took control of the checkbook.

Before taking more out of our pockets, Washington should start living within its already-monumental means.

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