This morning, January 26, the Congressional Budget Office (CBO) released new projections showing that–if current laws and policies remained unchanged–the federal budget would show a deficit of $1.3 trillion for fiscal year 2010.
That’s what passes for good budget news these days. The new estimate is down $80 billion from the budget office’s previous estimate.
Of course, as a percentage of the economy (as measured by GDP) the deficit would be the second largest since World War II.
And in the big debt picture an $80 billion swing is barely a drop in the bucket. The CBO projects that total (on budget) federal government debt will reach $8.8 trillion by the end of 2010.
But wait, the news gets better. (Well, maybe not better. How about ‘funnier if it weren’t so important?”)
Shortly after the CBO released its estimate for the 2010 debt, the U.S. Senate rejected a proposed bipartisan commission to recommend ways to reduce the U.S. government deficit by a vote of 53-46. The legislation, which required 60 votes to pass, would have required that the panel’s recommendations be voted on by Congress without being amended.
The bill’s sponsors Kent Conrad (D) and Judd Gregg R) argued that Congress has proven it is incapable for making the difficult decisions needed to reduce the deficit.
You think?
Lobbying against the bill came from both ends of the political spectrum. Americans for Tax Reform opposed the measure, saying that the bill would increase taxes. The AFL-CIO protested that the bill could mean cuts in programs such as Social Security and Medicare.
Hard to see a way to reduce the deficit if raising taxes and cutting spending are both off the table.
I still think the only way to fix government budgets is to cut ALL programs by a set percent (say 30%) and make everyone plead their case for why they need more. I think we’d be surprised how many government programs would continue to operate but 30% more efficiently, just like private companies do when times get tough. Unfortunately, government seems inept at cutting out wasteful spending and instead would continue employing their worst workers and cut services instead. At least they’d be doing it cheaper though…
Christopher,
I think you’re right on the mark regarding people having the time to research every vote. We should repeal the 17th amendment so the state legislatures vote for US senators again. The added benefit is I can talk with my state representative and pass along ideas, good or bad. I can also put in meaningful work to influence reelection. If I don’t like the senator they voted for then I can actually do something about it.
I don’t have either of these options with US senators, and my campaigning would be like throwing a pebble at a locomotive.
While we’re at it we should repeal the 16th so senators cannot be bought off so easily and give pork pay-to-play rewards.
skllstrm, I wasn’t trying to imply that all these rules were put there by the founding fathers. I was just pointing out that the government they setup is clearly a government setup by people that didn’t trust anyone or group with too much power, because they will abuse it. So as far as I’m concerned policies that restrict one group in a government from shoving their policies down the throats of a good portion of another party (of the people) is a good thing.
As for fighting over deficits. I don’t have to choose to fight over it. If it becomes too large and if too many people are supported by too few, it will happen by itself. I really hope not in my lifetime, but all things come to an end, and this is one way they do.
Slavery is a moral issue. Some people don’t like to compromise when it comes to their morals. In the Civil War it was an economic concern for only one side. There haven’t been very many wars fought where it was a major issue. However, there have been a lot of wars fought over financial issues. (N.B. Personally I am against slavery, was a civil rights worker and had my life threatened while participating in nonviolent protests.
If the debt goes too high, what will happen to the credit rating of the country and investors willingness to keep investing here?
Christopher, Sorry you are so divided. The 60% rule is not from the founding fathers or the Constitution. It actually arose quite recently in this century. It is not a true filibuster. The Senate in itself was the compromise in that each state whether populous or not had an equal vote. The filibuster originally meant that as long as as senator was willing to continue the debate it could not be closed. But he or she had to stay up there. it used to be a true balance although not perfect. In the end, if you cannot compromise it means civil war. That killed more Americans than any other war we have had. I would fight over slavery. Will you fight over deficits?
Skllstrm, actually I believe in the 60 vote rule, I believe in the 2/3 budget rule in California, and I believe that the found father’s plan was to try to setup a government that had power opposing each other so that government was slow or impossible to act. Because they had just got out from under a government that would tax them right and left and take away the rights of individuals to satisfy the “greater good”. I believe they were only trying to slow down what they knew would come sooner or later.
I don’t believe in either party, if either of them gets power they will abuse it, and they will both spend money they don’t have, and make me pay for it (actually not any more, I’m going into early retirement, for the first time in my life I’m going to join the 50% that pays less then 3% of the cost of our government). Frankly I don’t see any way out of it.
As governments grow, and as the number of people to resources goes down, the “group” will always demand more and more.
What is so sad is that today people think that what should be exported to the world is democracy, but that was only used in the US because it was the least evil way to decide something. What needed to get exported (actually lead by example not exported) is the idea that an individual’s rights come first (not the group’s!). And everything should be done at the lowest level possible, not that at the highest level possible.
I also believe in The Electoral College, which was set up because they believed that the individual doesn’t have the time or will to do what is needed to cast a good vote. People think this has changed today, but I don’t see it. Yes there is more data, but not information, and people don’t make use of it anyway. They just jump from event to event, emotion to emotion, but seldom look below the headlines of the daily news.
And am I any better? Well I take the least from the system of anybody I know, so I’m proud of that, but I also don’t vote, because I don’t want to do the work to really cast good votes. Besides even looking at the surface I can tell my vote doesn’t count, because when you are faced with two bad choices, you have no choice at all. Yes there are good people out there in politics, but majority wins, not what is right, a few good men/women aren’t going make it work, especially for a people that is asking for it and only getting mad like little kids that want all the candy they can eat, but don’t want to get sick.
Christopher, I couldn’t agree with you more. Everyone is pointing fingers at the other side like Ryanpatrik. However we are all complicit in the mess we have created. Unless we cut the crap and work together for solutions we are in serious trouble. Unfortunately, I think California may be an indicator of where we are headed. When will the Senate wake up and do away with the 60 votes needed for cloture rule?
Speaking of debt…
http://www.bloomberg.com/apps/news?pid=20601068&sid=aIZE2XLgmsJQ
Jan. 27 (Bloomberg) —
“The cut to Japan’s debt rating outlook by Standard & Poor’s escalated pressure on Prime Minister Yukio Hatoyama to rein in spending and consider raising taxes to reduce the nation’s borrowing.
S&P yesterday lowered the outlook on Japan’s AA sovereign credit rating to “negative” because of diminishing “flexibility” to cope with the world’s largest public debt and concern about the lack of a plan to rein in budget deficits. ”
I am thinking it may be time to get out of the market all together… Things seem to be going from bad to worse, how long do you think it will be before the talk turns to US debt? And how bad will that be… I certainly don’t wan’t to be around for that…
Not to worry. The Obama people are going to freeze government spending for three years! On every budget item that isn’t significant. Yes that is correct. It is going to save $250 billion over TEN years. What a fiscally responsible man our president is. He is, he is….he will tell you that now that he thinks it is what we wish to hear. Man those people think we are stupid! We should stay with the materials play I think until a serious person gets in charge.
Javos, that was Pogo:
“We have met the enemy, and he is us.”
Jim, as usual great post. If you allow me I am flipping the coin on the other side. Private saving and the huge problem of baby boomers retiring saving plans and how this flow of funds will be directed/invested in the next decade. It seems to me that a lot of sideline money is still out there (trillions). Is it foreseeable a “tsunami” investing in the near future?
Peanuts (and you) wus right, we’s the enemy.
P.S. First line should have been:
You know, everywhere I look people scream about how the political system is out of control and doesn’t represent them, but when I look at the actions of most people, I think it represents them quite correctly.
You know everywhere I look people scream how the political system is out of control and doesn’t represent them, but when I look at the action most people I think it represents quite correctly. Ask people if they want to reduce taxes, and they are all for it. Ask people to cut a program they are using, and they kick you with lead boots to save “their” program.
People are all for services as long as the other guy pays. The problem is that we are running out of other guys.