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Three Ugly Little Truths About The Federal Budget
Here's the background we should all keep in mind about the budget President Bush sent to Congress this week. The big headline is that this is the first $3 trillion federal budget, but more importantly, the United States is $9 trillion dollars in debt. The country runs deficits routinely and faces another $400 billion gap this coming year. We face huge expenses down the road as 78 million baby boomers start collecting Social Security and needing help from Medicare. Frankly speaking, this country really needs to start thinking seriously about cutting spending, raising taxes, or doing some of both. The United States is a wealthy nation. We're not Haiti. There's no fundamental reason our government can't live within its means. But so far, it doesn't even deserve an "E" for effort.
This year, President Bush has proposed cuts in Medicare and Medicaid as a modest (very modest) tip-of-the-hat to the need to get spending in line with revenues. He's presenting the proposed cuts as a way to offset added spending on the economic stimulus package and as a first step to tackling the problem of rising health care costs. President Bush probably won't go down in history as the country's best money manager, and his belated (and many would say misguided) attempt to be modestly more realistic probably won't go down well either. But the President's budget does shine a light on three ugly little truths we should all start grappling with.
* No. 1. Balancing the budget and getting the country's financial house in order requires making choices. Over the last seven years, the country has cut taxes to historically low levels, added spending for the Iraq War and the larger fight against terror, added a broad new drug benefit to Medicare, and now we need to inject money into the economy because we're on the tip of a recession. You don't have to be an accountant to see that these numbers don't add up. The choices implicit in President Bush's budget - between "entitlement" spending like Medicare and shorter-term needs like the stimulus package - are just a heads up on the decisions we'll be facing later on, because our problems will only get worse.
* No. 2. Cutting expenses from the federal budget sometimes just shifts costs to state and local government. Cutting money for Medicaid could help offset the other federal spending, but Medicaid is a program that's funded jointly by the feds and at the state level. If federal funding is cut, many in the states will say they still have poor people there who need medical care and seniors who can't pay for nursing home care themselves. There will be enormous pressure at the state level to pick up the pieces. And that will mean that local and states taxes may rise and/or states will have less money to spend on the other things they pay for -- like public schools, community colleges, transportation and the criminal justice system.
* No. 3. The cost of health care is a monumental problem for everyone - federal government, state government, employers, and individuals. For federal government, this means rising costs for Medicare, Medicaid, veterans' care, and benefits for federal workers. Medicare is the $330 billion gorilla in the room. According to the Medicare trustees report to Congress in 2007, its "financial difficulties come sooner - and are much more severe - than those confronting Social Security." In the last couple of decades, experts have pinned their cost-cutting hopes on HMOs, preferred provider plans, prevention, competition and other ideas, and costs have continued to spiral upward. If we don't find and agree on ways to control rising health care costs, solving the country's budget problems will be nearly impossible.
As a country, we have ample resources to balance the government's budget and develop compassionate but sensible ways to address the financial problems facing Social Security and Medicare. But unless we start facing facts about the nature of the challenge - and unless we start talking about them candidly and often -- we'll just keep dumping our bills onto the next generation.
Jean Johnson and Scott Bittle are authors of Where Does the Money Go? Your Guided Tour to the Federal Budget Crisis (HarperCollins) and editors of Public Agenda Online (www.publicagenda.org)
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Correction, that one paragraph should read:
They have deliberately made Medicare too expensive, adding private insurers,
Then rolled it in with Social Security and scream we can"t afford it.
They have projected it 75 years into the future, making it look 75 times worse than what it is.
What kind of worthless people would try to beat the elderly out of programs they have paid into for 45 or so years?
Get rid of the private insurers in Medicare and the problem is solved.
There should not be many laid off, if health insurance is changed to single payee. There will still be a need for tracking, bill payments and record keeping. What will disappear are the CEOs with their multimillion dollar salaries and retirements and the fat cats at the top sucking more and more of our services out of the system, so they can make more profits.
The insurance companies still have other ways to feed off of us with car, life, liability and house insurance, etc.
Small business can hire more if their health costs are gone. We will be more competitive overseas.
This is a republican trick to destroy Medicare. They gave it to private insurers, passing a law that there can be no bids to lower costs, then turn them loose against the elderly. They already have it teetering on bankruptcy and not one boomer has retired.
All that is owed to Social Security is 1.8 trillion, which doesn't have to be paid back all at once. Some believe that the tax on the boomer's 401ks will be enough to fund the trust fund as the boomers need the money.
They have deliberately made Medicare too expensive, adding private insurers,
Then rolled
It in with Social Security and scream we can’t afford it.
projected it 75 years into the future, then
If you figure how much taxpayers already
pay for Federal insurance, Medicare, VA aka the military, Medicaid and Schip, plus
no telling how many other programs and then if you take off the profits of the insurance companies and get bids for health care, then the taxpayer shouldn’t be out too much more and everyone would get better health care.
One good thing about single payee would be people could change jobs without losing insurance. Mothers could stay home with their babies until they start to school, if they want.
Are we getting our money's worth?
This is like a very bad episode of twilight zone. You have to hope that it will end by the next hour but, like my hero Rod Serling would say "it doesn't". Viva la Revolution!!!!!!!!!!!!!!!!
Good article. Go the peoples revolutionary party!!!!!!!!!!!!!!!!!!
only one candidate has a short term and long term plan to get us out of this mess in a healthy manner. the good dr., of course.
and he is still quite in the race.
www.ronpaul2008.com
(see economic plan)
MY three ugly truths:
1. The INTEREST on our $9tril debt is the third largest item on the Fed budget, after SS (in surplus), and the military. (So the GOP wants to cut a few Medicare bucks. Big Deal)
2. Of course, the US military budget is larger than all the other military budgets in the world put together. China, for example, spends about 10% what we do. (Bush wants to add more $$? It is not a $$ problem. It is a MANAGEMENT problem. Just consider who is Commander-in-Theif)
3. Our Fed deficit is way less than our trade deficit.
(Its OK, we are selling our assests from under our children, in addition to handing them a huge IOU.)
Get rid of the FED and it's debt based currency. Simple.
mrcontinental '08
Get rid of the FED and it's debt based currency. Simple.
mrcontinental '08
Scott and Jean
Most of the bloggers here are busy blaming Bush, Iraq, Oil, Global Warming, and the rich, yet noone tackles the single ugly truth that we either cut spending or raise taxes.
We have all been trained to distraction, to blame the dems or the repubs, big business or sloppy government, the uber rich or the welfare queens, but it is all empty rhetoric without action.
The fact is we have become too selfish and distracted to ever come together to do the right thing. We don't even know what the next right thing is, but we want someone else to pay for it or expect some magic trick that will pay for all of our health care without any pain.
It is utter madness and our government has lost its ability to govern.
I'll bet the biggest thing we have to get into our head is the link between taxes paid directly affects the services received-right now the voting public and politicians turn a blind eye to that.
One must ask and answer questions before moving forward. Why are we (still) in Iraq/Afghanistan? Why are we in NATO, why is there a NATO, still? Can you fight a "War on Terror"? Why is our "defense" budget greater than the rest rest of the worlds', combined? Does it need to be? All empires end, the above questions might answer why.
I read that we could cut military spending 75% (yes 75%) and still be spending more than the Russians and the Chinese combined. We might have to give up the idea of ruling the world by force of Arms.
The Big One has been overlooked in this article:
http://www.thespiritof76.com/NEX_NEWS/NF_YOURS.HTM#805
Now what?
...and the even Bigger One coming:
http://djomama.blogspot.com/2006/12/first-world-government-junk-bonds-on.html
From Treasury Dept. figures for 2006:
Median income paid 6.3% income tax.
Income over $200,000 paid 22.7% tax.
So, that's progressive. Where it falls down and no statistics can be found is that 1% or fraction thereof who have so many loopholes that they get a free ride.
Just consider modern attack on the 'middle class' as blowback from the 60s when max. was 91% on $100,000 or more. How would that progressive scale suit a lot of people today?
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