Congress Must Address Overall Broader Budget Crisis

Congress is currently debating the Bush administration's proposal for a $700 billion to $1 trillion bailout of Wall Street. It is a bad bill and would waste an enormous amount of money, but it represents just the tip of the proverbial iceberg of fiscal irresponsibility in Washington. Indeed, the national debt already exceeds $9.5 trillion, and Congress recently raised the debt ceiling to $10.6 trillion (which the Bush administration is proposing to increase in the bailout to $11.3 trillion).

Congress should reject the bailout, and then get busy cutting spending elsewhere throughout the budget.

For instance, the 2009 federal budget will exceed $3 trillion. Next year's deficit will run a half trillion dollars. Additionally, this assumes no more federal bailouts. We need a president willing to reconsider every spending program and challenge every special interest that comes in the door.

The U.S. already has spent about $600 billion on the war in Iraq. That's almost as much as the Wall Street bailout package. But total costs for the war may exceed $2 trillion. There are many reasons to pull our forces out of Iraq, leaving Iraq for the Iraqis. Ending this enormous waste of taxpayer money is one of the most important reasons.

The defense budget next year will be at least $515 billion. Toss in outlays for Afghanistan and Iraq, and the total will run nearly $700 billion. Yet most of this money, the equivalent of the Wall Street bailout, is going to defend other countries--not America. Washington should stop protecting prosperous and populous allies, and attempting to rebuild failed societies. Then the U.S. could close bases, bring home troops and put defense back into the Pentagon's mission all while saving a lot of money.

Social Security and Medicare are the government's biggest domestic programs; their outlays next year will run $656 billion for social security alone--almost as much as the proposed Wall Street bailout, and $412 billion, for Medicare. But this one-year cost of more than a trillion dollars is but a foretaste of future fiscal disaster. The total unfunded liability for these two programs--that is, the amount of promised benefits in excess of expected revenue--is $100 trillion. That is trillion with a 'T,' or about 140 Wall Street bailouts.

The U.S. is heading towards financial disaster, and that will remain the case even if Congress kills the Wall Street bailout. Washington has been living beyond its means for decades and the bill is finally coming due. Politics as usual will no longer suffice. The American people want and deserve change. Only a vote for Bob Barr and the Libertarian Party will make a difference.

Comments

[MourningDude]

The lion's share of the money in Iraq has already been spent. Staying there another 6 months isn't going to change that. Sure, 10 billion a month is a lot of money, but the much larger fixed costs for veterans benefits in the future are already owed.

"Getting out of Iraq" will save a little bit, but it won't bring that 2 trillion back.

In order to balance the budget, defense will have to take a big cut, either in terms of reform, or in terms of weapons development, or in terms of deployment, or a mix of all the above.

And the SS and Medicare crises simply cannot be ignored any longer. They WILL bankrupt us, period. They are insurmountable without significant cuts in the outlays.

Since today's retirees bought into these Ponzi schemes unquestioned, and balked at reforming them in their youth, they need to share the burden of reform. Means testing is one way to share the burden without punishing the most vulnerable, and it needs a hard look.

[Overd0g]

Nobody's going to cut spending. You don't get elected by promising to take away peoples free goodies.

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury." -- Tytler

We have passed this Rubicon. There is no turning back from oblivion now.

[McMurdo]

The quoted figures on the long-term unfunded liabilities of Social Security are a bit spurious. These figures include the cost of buying back the Treasury bonds that were placed in the Social Security surplus lock-box when congress borrowed from the lock-box to pay for useless stuff like tax cuts for the rich and an unnecessary and immoral war.

Here is a suggestion for the Social Security Administration: take all of those Treasury Bonds that are sitting in your lock-box and sell them on the open market. Then take the proceeds and use them to buy a diversified basket of foreign government bonds. Voila! The argument that the U.S. can no longer afford Social Security largely goes away.

[DanteLabon]

Exactly. How come every time a repub..or independen­t...whatev­er.. talks about cutting spending it always ends up meaning taking the very life-blood from the people who need it the most? Hey, I got an idea..END those ridicules tax cuts for the rich, End the 2 wars, UNCAP social security so that the rich people who COLLECT it actually pay into it like we do...a percentage of ALL of their earnings not just the first $90,000. And (sin of all blasphemous sins) slightly RAISE taxes on the people who can afford it most...con­sidering they have gotten a pretty free ride for 8 years now.

[Overd0g]

Sorry comrade. You're going to have to "seize the means of production" to achieve your dreams.

[MourningDude]

Democrats have railed against "gambling" the SS trust fund since its inception.

In fact, the SS funds are so super-safe that they required a super-special fund that earns the lowest guarateed return I've ever seen from a US bond. Even normal US government bonds would get a better return than that fund.

If Dems now start spouting off about investing in bonds with higher returns, they've been obstructive hypocrites for 30 years. That train left the station a long time ago. And if you guys are suddenly willing to allow the trust fund to be invested (like every other pension fund in the world), then what is your rationale against private accounts, again?

Dems have no credibility on SS reform whatsoever.

[Superbia]

Usual Bob Barr stuff. Great points all throughout here but it is painfully obvious Barr is just running a campaign to promote discussion from his point of view.

[Aaror]

not a bad view to look at the election from. I just hope that folks keep the votes for Nader in states like CA where it doesn't matter. Would hate to lose FL again, for example, to folks who thought Gore wasn't green enough.

[JohnFromCensornati]

That is soooo tiresome. Do you know how many Florida Democrats voted for W? I give you a hint. The number is way higher than the number of Floridians that voted for Nader. Put the blame where it belongs, with Gore, the Democrats, and the Supremes.