Sunday, February 05, 2012

The budget mess, in a few paragraphs 

The Big Four accounting firm Deloitte has produced a politically neutral summary of the Congressional Budget Office's latest forecast for revenues and spending over the next decade. It is not pretty, and it does not take much reading between the lines to see the moral and intellectual bankruptcy of both our political parties.

The "baseline scenario" includes the fairly unrealistic assumption that all the "Bush tax cuts" expire at the end of 2012 and other politically untenable results. The alternative scenario is the more realistic political answer, assuming entitlements remain where they are.

We do not need lower taxes (unless the Bush tax cuts do indeed expire). We do, however, need different taxes. In a big way. And we need to tell people that we will no longer subsidize retirement for otherwise healthy and productive workers. We should insure against disability, and only disability, whether brought on by geriatrics or otherwise. Everybody else should either work, or save enough money so that they do not have to work. Neither party's leaders will say that, and therefore neither party is even remotely honest. They are all betraying us.


By Blogger Gary Rosen, at Sun Feb 05, 02:44:00 PM:

TH, I presume you meant "subsidize retirement" rather than "substitute retirement".  

By Blogger Cas, at Sun Feb 05, 03:57:00 PM:

If I understand your premise, you ARE talking about these people as well, correct? Those who WANT a job, but cannot find one?
So, what do we do about "unemployment insurance," and it's perpetual "extensions"?
I understand what you are saying, and would agree that some type of weaning period is the only thing that MIGHT work, but even that is not possible to the progressives in the media, academia, and Congress...so, the only question to answer is, how hard we will fall, when the borrowing is cut off, and how fast.  

By Blogger darovas, at Sun Feb 05, 04:56:00 PM:

Extending the Bush tax cuts seems to account for half the deficit or more from 2015 through 2022.  

By Anonymous SR, at Mon Feb 06, 11:08:00 AM:

Only if you assume the current no growth scenario.
If you assume the cuts expire, growth slows or tanks, and revenues are not as projected, then things worsen.  

By Anonymous feeblemind, at Mon Feb 06, 12:39:00 PM:

Both political parties behave as they do because it is the path of least resistance.

My expectations of any serious budget cutting being done after the 2012 elections are low.

So the question is, how much abuse can our monetary system take? Can the Government print/borrow another, say, 15-16 trillion in coming years to finance the future deficits without any serious adverse effects on the currency and economy?

It can't go on forever. One wonders when and how it will it end?  

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