Saturday, October 17, 2009
Deficit Hits $1.4 Trillion
The Obama administration said Friday the deficit for the fiscal year just ended was $1.4 trillion, the largest relative to the size of the economy since 1945. The administration has a huge challenge to reduce the deficit while considering further steps to stimulate the economy. This is why it is critical that the health insurance reform be revenue neutral. The problem is that it is obvious to all that it won't be. It is entitlement spending at a time that we can least afford it. Note that if any version of the bill currently under consideration in congress gets passed, taxation starts immediately, but the program itself is slated to start in 2013 (after Obama's presumed re-election). It's a running head start, but it won't survive the ballooning deficit. Also, there are rumors of a second stimulus bill. The Democrats are quietly desperate about the economy. GB's fault or not GB's fault, it's a well-known phenomenon that that party in power gets drubbed at the polls if the economy is bad.
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5 comments:
I feel so helpless at this point!
Even if we did not move on health insurance reform, the deficit (not the debt, which is worse) would still be the same. How to reduce this deficit?
Two wars.
Declining tax revenues.
The answers seems obvious, bail on the wars.
Increase taxes.
I know what the arguments are against these two positions. But what else to do?
It is not sufficient to simply take the side of no health care reform now. That will not change the existing deficit.
I don't agree with bailing on the wars immediately, but it is a valid position to take. Obama has a tough choice to make, and either decision is arguably the correct one. I must reiterate that the best way to increase revenue is to reduce taxes. I know it sounds counter intuitive, but it has been demonstrated several times in the past 60 years. JFK being the first to do it. Lastly, and most obviously, we must cut spending. Bailouts for every Tom, Dick, and Harry and dubious stimulus spending are extremely illogical. It is mind-boggling to me that there is talk of yet another stimulus bill.
I agree. No more stimulus. No bailouts of any kind.
Not for airlines, banks, or automakers. Get out of the wars (I cringe saying it) is probably a must. Shrink the military. We ought to be able to cut back in many areas.
I would be inclined to agree with Doug about getting out of the wars there fore being able to shrink the military and use that money to get out of debt...but, then terrorism will come knocking on our door and we may not be able to withstand it...and I am not talking about just Al quaida...but state sponsored terrorism as well. Nothing would please the likes of Mahmoud Ahmadinejad and Kim Jong-il and others like them, happier if we were to do that.
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