Thursday, November 04, 2010

The Numbers Are The Numbers

We've had the mid-term elections and there will be many new faces in Congress for at least the next 2 to 6 years and the Republicans will now control the House (which they did for 12 of the past 14 years) while the Democrats maintain a slim majority in the Senate. President Obama will continue as President for at least the next two years. That is the landscape. Now on to the numbers.

I have been listening to candidates and elected officials for most of my adult life (and that's several decades now) promise that they would be the one to control spending, balance the budget, reduce the national debt and keep taxes low. Well it hasn't happened and there is no compelling reason to believe that it will suddenly happen now. The sound bite things that candidates utter has been intentionally vague about just HOW they plan to keep those promises. They couldn't be specific because the raw truth would probably cause them to lose their election. We Americans love to buy into the promise with little detail because that is easier than hearing the truth about the numbers.

So, as we all hope and believe that this group will finally be the ones with the solutions let me pose some plain and direct questions. Exactly how will a "balanced budget" be achieved? Exactly how will the National Debt be reduced? Exactly what "spending will be reduced or eliminated to make up for the 1.27 TRILLION dollar deficit projected in the current 2010-2011 budget? Can any of this actually be accomplished with no increase in Federal revenues (tax INCREASES)? It will soon be time to stop campaigning and FIX THE PROBLEM.

Here are the numbers for the 2010-2011 Federal Budget;


           Total estimated revenue - - - -- - -- - - 2,567,200,000,000


           Total estimated spending - - - - - - - -  3,833,900,000,000


           Estimated deficit - - - - - - - - - - - - - -  1,266,700,000,000




                    Total Gross Public Debt          15,144,000,000,000
                      (after adding the current year deficit)



Breakdown of spending;



          Pensions - - - - - - - - - - - - - - - - - - - -787.6 Billion (20.5% of spending)
           (Social Security, Fed Retirement)
                                                                                           (30.7% of revenues)


          Healthcare - - - - - - - - - - - - - - - - -  898 Billion (23.4% of spending)
                                                                                        (35% of revenues)
           (Medicare- - 473.3 B
            Public Health services - 4.5B
            Health R&D - 38.5B
            Vendor Payts (Welfare) 357.8B
              296.7B of this goes to States
              for Medicaid Programs




         Education - - - - - - - - - - - - - - - - - - 140.9 Billion (3.7% of spending)
                                                                                         ( 5.5% of revenues)


         Defense - - - - - - - - - - - - - - - - - - -  928.5 Billion  (24.2% of spending)
                                                                                         (36.2% of revenues)


         Welfare - - - - - - - - - - - - - - - - - - - 464.6 Billion  (12.1% of spending)
                                                                                        ( 18.1% of revenues)


         Protection - - - - - - - - - - - - - - - - - 57.3 Billion    (1.5% of spending)
                                                                                        (2.2% of revenues)

         Transportation - - - - - - - - - - - - - 104.2 Billion  (2.7% of spending)
                                                                                       (4.0% of revenues)


         General Government - - - - - - - - 29 Billion        ( .08% of spending)
                                                                                       ( 1.1% of revenues)


        Other Spending - - - - - - - - - - - - 151.4 Billion    (3.9% of spending)
                                                                                       ( 5.6% of revenues)


        Balance - - - - - - - - - - - - - - - - -  21.0 Billion       ( .05% of spending)
                                                                                       ( .08% of revenues)


        Interest - - - - - - - - - - - - - - - - - 250.7 Billion      ( 6.5% of spending)
                                                                                       ( 9.8% of revenues)




Those are the numbers. How can we get to a balanced budget and begin to reduce the national debt as promised? The newly elected Republicans and all who remained in office have continually promised NO NEW TAXES (and most want to reduce the current tax levels) so the prospects of increased Federal revenues are not good. therefore we will assume the revenue total will stand as estimated above. Defense spending has been a "sacred cow" for Republicans so we will assume NO cuts in defense spending. Social Security (why is this included in the Federal Budget at all?) is a lightning rod for both Parties so we won't touch that for now.


The stark truth is that to eliminate the deficit (for this fiscal year) Congress and the President would have to;


    1) ELIMINATE COMPLETELY ALL SPENDING FOR;
            Education - - - - - - - - 140.9 Billion
            Protection - - - - - - - - 57.3 Billion
            Transportation -  - -   104.2 Billion
            General government 29 Billion
            Other spending - -  - -151.4 Billion
            Balance - - - - - - - - - -21 Billion
                                              ___    
                                              503.8 Billion


         By eliminating ALL spending and thus shutting down ALL Government services and protection the 2010-2011 deficit would still be 762.9 Billion. So, to the next step.


     2) ELIMINATE ALL WELFARE ITEMS COMPLETELY


                                              464.6 Billion
          This would still leave the 2010-2011 Deficit at 298.3 Billion

          In order to get all the way to a balanced budget (still with no reduction in the overall public debt) AND with NO increase in Federal revenues and no cuts to defense spending or Social Security spending we would need to;


      3) REDUCE THE SPENDING FOR HEALTHCARE WOULD NEED TO BE REDUCED BY
                                             298.3 Billion (33% of that budget)




Wow! Is there anyone out there who actually believes that all of the above can or will actually be done? Does anyone out actually believe that any politician would go this far to balance the budget while still maintaining a policy of no taxes increases and no cuts to defense or social security spending? I think not.


The Federal Budget cannot come into balance without doing one of the following or a combination of the following;

           A) A substantial INCREASE in taxes to the extent necessary to balance the budget.
           B) A flat 33% cut to ALL budget items (including Defense and Healthcare and Welfare)
           C) The ELIMINATION of ALL spending in the categories listed above (503.8 Billion)


Well, we have arrived at the end of the numbers and the time for action. If the people in Congress and the President are unwilling to go to the deep end of the pool and deal with the numbers all their talk and spin means nothing and we will continue to have deficit spending as we have for the past 62 years (except for 8 years, and only two years since 1961).


Of course,  the American people need to get past the campaign rallies and decide just what they are really willing to accept in order to "control spending" and "have limited Government" and "reduce the "National Debt". We can't have the services and aid programs and endless increases in defense spending and lower taxes forever without pushing the country and ourselves off the proverbial cliff. The Numbers are the Numbers.


Now it really is TIME TO THINK AGAIN.
      
           


             

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