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May 6, 2010

OK, where would you cut the budget?

Here is your chance to solve the U.S. fiscal crisis. Below (HT Greg Mankiw) is a schematic of projected federal spending in 2020. As you can see, it's almost all entitlements and defense, with quite a bit of interest from the soaring national debt added in for good measure. So where will you cut spending?

 Budget_2020.png

Posted by Jay Hancock at 6:00 AM | | Comments (13)
Categories: Slo-mo fiscal train crash
        

Comments

I would cut all defense spending and then move on to recreational spending such as national parks.

Maybe being younger, I've already accepted that benefits such as social security and medicare will not be what they are today (if they are there at all) when i'm of age to collect benefits, and I wish everyone could accept this, and let the system continue to scale back benefits now. I'd also raise the cap on taxable income for social security, but those issues aside, I'd pass an across the board cut (of course we're stuck with the interest), and cut harder from social security and medicare to preserve as much of the 'other' as possible, as its the 'other' that a lot of the programs i'd like to see increased funding for, such as infrastructure.

Social Security and perhaps even MediCare should not be on the list as they were set up as trust funds. Had the gov't not taken those excess funds, those programs could be looked at from their special perspective.
Defense should more properly be described as Offense and should be subject to massive cuts.
Because we are now committed to huge future interest payments (less anything derived by destruction of Goldman), we will have to cut everything else across the board.

1. At current tax and benefit levels SS is only sustainable with a retirement age of 71.

2..US military spending is about 10 times the #2 spender and approximately equal to the entire rest of the world combined. Do we really need to continue to occupy our WW2 foes?

3. Pensions for federal government employees=about 200B/year, a benefit almost no one in the private sector gets.

4. Cut all Fed gov wages 10% across the board given that for a comparable basket of jobs their wages are about 10% over the private sector average.

Don't buy the lie Social Security and Medicare won't be there for you. Just another piece of propaganda touted by Wall Street billionaires who hate these programs because, guess what, they don't need them! There is 2.5 trillion trust fund surplus in Social Security established specifically for the boomers. With a few minor adjustments, Social Security will be solvent for much longer. The whole point of the program is that it is easily amended every several decades or so to address population changes, recessions, etc.
We spend a ridiculous amount of resources on defense and many people in the military say there are definitely wasteful places to cut.

Why wouldn't you cut all of them except maybe for defense?
America was never intended to be a nation of entitlements. If you believe in entitlements, go to Canada or Europe. That cuts Social Security, Medicare, and Medicaid. Reduced spending in those and this bucket for "other" then cuts the interest expense.
I would assume there are opportunities to cut defense spending as well, but that's the only expenditure above that benefits all Americans. Handouts do not. Entitlements attract losers (How's it going, Greece?)

In the end i think that we all will have to pay more taxes AND have programs cut.

Some of these programs may be wasteful. But most wont be.They will have to be cut ,not because they are bad or wasteful, but because we are too far into debt and we cant borrow forever [ask Greece].

There are many good government programs that will have to be cut.

There will be pain and austerity. The Government cant avoid that. It can only try to make it as fair as possible and try to make sure that no one segment of American society has to bear all of the burden .

Thats just my humble opinion.

If you are really serious about helping cut our financial debts in this country, start w/ceiling the border. So our states and country quite spending billions of dollars on aliens. Stop 100% of the pork barrel spending. Last, stop taking money and advice from the lobbiest.

pensions for govt. emp. sliced, guard border in arizona ..no more bail outs on our backs

The first thing to cut is all the pork spending. The next to cut is all the czars that we don't need. Then cut 1/4 of all the congressional staff and require all travel by elected officials be by commerical air (ecomony class). Cut the departments of energy and education (leave education to the local govts.where it belongs. Also a 10% of all govt. payrolls including elected officials.

Cut all federal spending by a TRUE 50%, with the only exception MILITARY.

Remove cap on Social Security (FICU) taxs and make these funds illegal to spend on general fund outlays.

Develope a 3 tier capitol gains tax. Tier1 capitlol gaines collected at 15% on positions held less than one year, tier2 .07% collected on positions held greater than one year but not held three years and Zero (0) percent capitol gaines tax on positions held over three years.

Abolish and remove the IRS along with all income tax (Other than Capitol Gaines {above})

Institute a National Sales Tax on all commercial and private purchases (VAT). Have the States collect this tax at the time and point of sales (States already have the machines in place to do this) and pay this sum minus a small percentage (I think .02%) direct to the federal treasury.

i would take 20 per cent across the board if the affected departments whined
too much i would raise to 30 per cent it's
what i have been forced to do and another thing i would set tax rate at 10
per cent for everyone no exceptions
no dumb deductions period that would end class envy and still bring in more than enough money

There is enough pork in the budget that, if weeded out, would take care of the current deficit. If we don't start cutting the fluff and nonsense from the budget we'll never be able to pay our debts. Speaking of debt, why do youl think China has been loaning us all that money? Could it be that they SAW THE WRITING ON THE WALL and realized they would be in a position to own us?

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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