In the ongoing debate about the federal budget, there are frequent demands for cuts in entitlements. Ironically, most of those demands come from politicians on the right, while the biggest objections to cuts in Social Security and Medicare typically come…
Elected officials from the South generally and Georgia specifically have been among the most intractable in compromising on issues regarding the federal budget. If they’re unwilling to compromise this time to limit the impact of the looming defense cuts, it’s largely their own region that will suffer the most.
The answer: Pretty effective. Apparently better than many economists expected. The data seems to show that payroll tax cuts are more effective than cuts that effectively come as lump sums. From the WSJ’s Workers Spent More of Payroll Tax Cut…
Over the long term, we’ll need to raise even more revenue and/or cut spending further, but the $1.2 trillion seems a good target for sustainability over the next decade and beyond.
That’s a lot of money, but consider the fact that the 400 wealthiest Americans have a net worth of $1.7 trillion.
Of the major expenditures in the budget, defense seems the most logical to cut. After all, in 2011, we spent more on the military than the next 13 nations combined.
The House Republicans who were so angered by the lack of spending cuts in the deal tonight were the same ones who killed the much bigger deal that Boehner and Obama were negotiating in recent weeks. Obama’s offer that was on the table had $1.2 trillion in revenue increases and $925 billion in spending cuts over 10 years.
The big question here is with the sequester — the mandated spending cuts across the board that are expected to have a particularly harsh impact on defense spending.
The worst case scenario — tax increases to levels of 2000 accompanied by some sharp spending cuts — will put us back on a much faster path to a balanced budget and a reduced federal debt. Going over the so-called “cliff” would hurt growth and likely put us back in recession, but it will also help clean up our long-term problems.
That’s hardly a “crisis”.
We engaged in wars we didn’t pay for. The Bush tax cuts, the first of which came at a time when the federal budget showed surpluses, left the government hopelessly in the red. The recession exacted a huge toll — cutting tax revenues and forcing greater expenditures on safety net programs.
And Obama’s stimulus package cost us, but only temporarily. Without it, we would have certainly seen the economic downturn take an even bigger bite.
For short, pithy summaries of key issues facing the economy in 2013, check out Calculated Risk’s Ten Economic Questions for 2013.
“The president’s statement is right,” Mr. Isakson said Sunday on the ABC program “This Week.” “No one wants taxes to go up on the middle class. I don’t want them to go up on anybody, but I’m not in the majority in the United States Senate, and he’s the president of the United States.”
As I’ve noted here repeatedly, the most expensive items in the federal budget are wildly popular — including with Republicans. Americans like Social Security as it is and don’t want to restrain spending on Medicare — and don’t want deep cuts to defense either.