Out Of Control Debt

We've heard a lot about out of control spending, especially over the past couple of years. The Republicans say it is 100% because of the spending of the Democratically run congress and the presidency. The Democrats counter that the rich people don't pay enough taxes. They believe that everyone has the right to certain things like food, housing, and medical care and that we are a rich enough country to let the more "fortunate" among us pay the bill for the poor. The conservative politicians out there tend to appeal to our left brain by talking hard numbers and statistics that show that we can't afford all of the government programs touted by the left. The left then counters with a "touchy, feely" right brain response that is wrought with emotion. A good liberal might say "the Republicans don't care if your poor old grandmother starves to death, as long as they can get a tax break for their rich CEO's."

Being a conservative, I would like to take a look at the budget numbers. Here's a little information to feed your left brain:

	Billions of Dollars
Fiscal Year	Receipts	Outlays	Surplus
2007	$2,568.0	$2,728.7	($160.7)
2008	$2,524.0	$2,982.6	($458.6)
2009	$2,105.0	$3,517.7	($1,412.7)
2010 est	$2,165.1	$3,720.7	($1,555.6)
2007-2008	$5,092.0	$5,711.3	($619.3)
2009-2010	$4,270.1	$7,238.4	($2,968.3)
Difference	($821.9)	$1,527.1	($2,349.0)
Source:  The 2011 Statistical Abstract of the United States

At the bottom of this chart, I have compared the tax revenues and expenditures during the last two years of the George W. Bush administration to the first two years of Barack Obama's presidency.  It is easily seen that there was a marked increase in spending of over $1.5 trillion under Barack Obama.  However, this doesn't tell the whole story.  There was also a reduction in revenues of more than $820 billion in the past two years.

What's going on here?  Revenues come from personal and corporate income taxes.  Of course, corporate income taxes are charged against profits.  If profits are reduced or a company takes a loss, they pay less taxes or none at all.  Personal income taxes are paid on salary, wages, dividends and capital gains.  If you are unemployed, you pay no taxes.  If your employer asks you to take unpaid leave of absence or take a pay cut, you pay less taxes.  If the company where you own stock has no earnings, you are unlikely to receive a dividend and pay tax on it.  With the stock market "in the tank," it is difficult to sell shares of your stock at a capital gain.

Now what about the extra expenditures of late?  The government has certainly paid out more unemployment compensation.  If your insurance was lost along with your job, you might need Medicaid if you have an illness or injury.  Then there were the bailouts and financial support payments that were supposed to lessen the blow to the US economy, keep people employed, and prevent a recession.  I've lost track of all that money that was either allocated or actually spent -- over a trillion dollars.

What happened to all that money???  Was it actually all spent or just set aside in some sort of an ineffective slush fund?  Did it lessen the blow?  Were any jobs actually saved?  Would there have been a recession without these huge expenditures?  Who knows -- it's impossible to prove one way or the other.  According to the blog at the Weekly Standard, the numbers coming from the white house show "the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion."  Wow, that was $277,500 per job saved.  Why didn't we just give these folks a pay check for $50,000 each and save the taxpayers almost $550 billion?

The past two years have been the typical MessAPolitico that almost always happens when government does anything.  The actions have done almost nothing -- at least you can't prove to me that the economy is better than it would have been without the so called "stimulus."  The inefficient government spends too much doing the nothing.

The only way to fix the deficit is to get people working again and get corporate America profitable again.  That will not only take care of the revenue side of the equation, but we won't need stimulus anymore.  All those personal support payments that help the unemployed get by would be eliminated by an improving employment picture.

Of course, that only gets us back down to smaller deficits in the hundreds of billions annually.  We still need to take drastic steps to eliminate waste and unnecessary government programs.  Just getting down to a balanced budget doesn't get rid of the national debt.  We would need to run a surplus of $500 billion for 28 years to get rid of the debt already accumulated!  And that's what the goverment MUST do to get us out of this MessAPolitico.