Wednesday, March 27, 2013

Think Progress: Fiscal Policy: Michael Waldron: "More Proof That America Doesn’t Have A Spending Problem": Why This is Only Half of The Story

More Proof That America Doesn’t Have A Spending Problem: pThe idea that the United States has an out of control spending problem has gripped Washington D.C. for most of the economic recovery, and nowhere is that more evident than in recent budget negotiations, where the conversation has been almost solely about when budgets will balance and by how much they will reduce the debt. [...]/p

FRSFreeStates-
Once again I thank Think Progress for only reporting half of the story and why I only use them to gage what Progressives are thinking rather then to get facts on the ground. Michael Waldron only covered the discretionary side of the Congressional Budget Office report not the Federal budget as a whole. For anyone who thinks that sounds like Greek, the discretionary side of the Federal budget or. Discretionary spending is non national security and so called entitlement spending, Social Security, Medicare and. Medicaid and according to Think Progress, the CBO reported that discretionary spending has actually fallen as a. Percentage of the Federal budget and the economy in the last four years and that included things like TARP back in 2008. Which was seven hundred billion dollars and the American Recovery Act of 2009-10. But this is because of the Budget Control Act of 2011 that cut discretionary as well as national security spending. As an attempt to get the national debt and deficit under control, so we now we are at 22% roughly again according to the CBO. When in 2010 we were at 24% but when President Clinton left office we were at around 20%. Lower then that under President Bush if you count Afghanistan and Iraq.

So even though in the last twelve years our economy has grown at around one percent. The Federal Government as grown by twenty percent and in the last two years thanks to the Budget Control Act it. Has shrunk by ten percent but even though economic growth has been slower we still have a large Federal budget both in numbers. And as a percentage of GDP today then we did back in 2001. So to say spending has nothing or little to do with the national debt and deficit is just flat wrong. We have both a spending and a revenue problem thats in the tax code which is why tax reform has to be part of any. Deficit reduction deal that is reached and will be whether Republicans want it or not because there's about one trillion in savings there. That wouldn't hurt the economy if we were to bring tax rates down on some areas and get more money invested in America. Both as it relates to the private sector but also as it relates to infrastructure as well.

More evidence about the debt and deficit, the Obama Administration only wanted a two year stimulus package back in 2009. Why is that, because they knew that every dollar of that eight billion dollar package over two years would be borrowed. And that at some point they were going to need to address the debt and deficit and not have to look to cut or pay for that eight hundred billion dollars. Or raise taxes to pay for it and knew that Federal spending would take a big step forward over those two years.