Kenny asked me in a recent blog post why I'm strongly opposed to deficits. There's a number of technical reasons why I have been told deficits are bad, but the strongest argument in my mind is from Alan Greenspan. He talks repeatedly in his book about his fear in the early years of the current Bush Administration that a hard-won sense of fiscal responsibility in Congress that developed in the late 1990's would be lost.
Budget deficits tend to be persistent because there are two ways that Congress can change the situation - higher taxes, or cutting - not just slowing - spending. Neither is popular. (there's a third way, seen in part under Clinton, where the economy does well and covers the gap... but I think that's beyond the realm of Congress's ability to control it).
According to an economist at the Cato Institute, there's a good chance the actual/realized budget deficit for 2008 will pass $500 billion . That's half a trillion dollars. (note: the proposal currently calls for some $260 billion for the deficit, but that conviniently ignores some war funding and the $150-200 billion "stimulus" proposal currently in Congress).
In FY2007, the interest payments alone on the national debt were over $400 billion. Running through the total discretionary budgets for major agencies in the order listed in the President's budget the following TOTAL to $400.4 billion: Departments of Agriculture, Commerce, Education, Energy, Health & Human Services, Homeland Security, Housing & Urban Development, Interior, Justice, Labor, State and other International Programs, Transportation, Treasury, Veterans Affairs, Corps of Engineers, and the Environmental Protection Agency.
Meaning: if we weren't paying interest on over $9 trillion in debt, we could, without changing the budget at all, double the size of ALL of those agencies. Or, more realistically, we could totally eliminate our current budget deficit without touching a single Government agency.
Deficits borrow from the future to fund our own excesses now. When you do that personally, you borrow from your own future earnings. When the nation does it, you do it from children and those not even born. We are bankrupting the future to buy votes now. That is truly shameful. And every member of Congress who supports these excesses is guilty.
3 comments:
That makes a lot of sense. How could a greater incentive be created for politicians to fix this problem? I guess one way is just by voters like us deciding it’s an important issue.
Thanks for explaining the issue.
I updated my post with a link to the current and past interest expense for the debt.
The agencies I listed to $400.4 billion in discretionary funding. To reach the $429.9 FY 2007 total, you can include the budgets for the Executive Office, the Judicial Branch, the Legislative Branch, NASA and the National Science Foundation (included with the above list, total $431.7 billion).
The ONLY agencies left are the Small Business Administration($0.5 billion), The Social Security Administration ($7.4 billion) and "Other Agencies" ($6.7 billion). Reference HERE (page 5, 200K PDF, 2006 Actual expenditures).
Through the first quarter of FY 2008, the interest paid is over $150 billion.
You mean we should only spend what we bring in???? Or even less and save for a rainy day? That seems too complicated.
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