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The two Chairman of the President's debt commission in this interview made some very interesting points. They suggested that cutting and privatization are not what we need to focus on rather solvency. The 1.6% cuts that we are currently striving for "won't get us to the promise land". They also mentioned for every dollar that we spend we borrow 40 cents (just plain stupid!); and by 2020 we will be spending $1 trillion on interest for these major entitlement programs alone. Watch the video and see more of the what they have to say. I don't have any specific questions regarding this article, I was more curious on what you guys thoughts...
Monday, April 4, 2011
Debt Ceiling to be hit by May 16th
"Big issues...no easy answers" - todays top story regarding our nations debt ceiling and the threat that entitlement programs have on our future. I know I brought up entitlement programs in my last blog topic but I think this the most important talk of today's as well as tomorrow's national security so here's another really interesting article regarding these issues. I highly encourage everyone to watch the video, I think is was a really interesting interview.
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Spending must be restructured in order to help solve the increasing debt. However, a government can successfully run a deficit.
ReplyDeleteThe most interesting part about the debate regarding the debt ceiling is the back and forth banter between economists and lawmakers. Some argue that the debt ceiling is not a necessary budget tool. By itself, it does nothing to keep the country from running into the red. Congress controls the annual surplus or deficit by determining the country's levels of taxation and spending. Annual deficits contribute to the overall national debt, which the Treasury Department finances by issuing bonds. The ceiling acts as a check on that overall debt: When Treasury needs to issue debt above the ceiling, Congress raises the ceiling.
ReplyDeleteOthers argue that the statute is the last remnant of congressional control or accountability over the national debt. Proponents for the debt ceiling argue that the debt limit statute encourages legislators to consider the interest of the general public and future generations, rather than those of special interests, and thus acts as an important institutional check on party and interest group politics.
Which side do you guys think makes the better argument?
The conversation of entitlements and the 40 cent debt on every dollar spent reminded me of a related entitlement issue that I'm very concerned about. The proposal to strip Planned Parenthood of it's federal funding is a crucial element for the future of government spending and debt. Cutting PP funds today is a short term solution to cut government spending, however it results in even more spending on the governments part via welfare in the future. For every $1 we spend on PP funding, we save $3.77 in the future on welfare spending. (There is an article about this and I'm looking for it and will post it later when i find it.) Basically, aside from any moral/social issues, this funding cut would have the opposite results as intended-from a financial standpoint. Clearly, it's important to think through the financial repercussions of cuts before they are proposed. Think of the money that will be spent on welfare if PP funding is cut. Talk about a set-back.
ReplyDeleteCan we please just increase taxes? All these tax cuts are great for a little while, but they can not maintain our government and standard of living. Before these tax cuts, we enjoyed a budget surplus, little more than 10 years ago. I'm not saying keep high taxes forever, but we need to reduce this debt.
ReplyDeleteAlso, the budget and our priorities need to be reevaluated. I'm all for defense spending but I know first hand the money that some of those people get, and its ridiculous. And like Beth said, cutting social programs like PP are risky moves. It costs the government more for welfare. We need more sufficient long term solutions.