There is a lot of talk in the media these days about the federal budget and the cuts that the newly empowered GOP will attempt to make. Whether or not they are successful this time around in cutting what they campaigned on, one thing is certain, deep cuts will have to be made. Consider this: the Congressional Budget Office is projecting this year’s spending to be around $3.7 trillion. $35 billion is less than one percent of this spending level. Even the $100 billion Tea Party Republicans are insisting on is only about 2.7 percent of the current spending level.
Sounds bad, doesn’t it! Well if the federal government reduced spending by $1 trillion, they would still be running a budget deficit of over $500 billion. With federal revenues at their current levels, a return to the spending levels last seen in 1995 would be necessary to get the budget balanced. By the way, that doesn’t do anything to significantly reduce the national debt. That doesn’t do a thing to address over $60 trillion in unfunded entitlement liabilities that the government officials rarely talk about. You see, this mess is much larger than the $14 trillion cash debt that most folks think of when discussing the federal budget.
There is much work to be done on the budget problems in America. Roughly, one third of what the federal government does goes away before the problems begin to be resolved. The alternative is increase government revenues (a.k.a. taxes on US!) by $1.5 trillion. That means everyone in the US pay much more to the government. I don’t know about you but I would prefer to keep the money my wife and I earn though our hard work each day! The next election cycle will see more career politicians replaced in both parties. The cold hard truth is the folks who have been in Washington DC for 20 – 30 years are largely responsible for this mess regardless of party affiliation. Making difficult budgetary decisions is clearly beyond many of these politicians currently holding office.