Common Sense on Budgets: while GOP howls about Deficit spending here's an appeal to rational thought

[JohnWxy]

http://www.ourfuture.org/blog-entry/2010020502/common-sense-budgets


Amid the blizzard of statistics, trillion-dollar deficits, howls about impending bankruptcy, and Republican stupocrisy that surround the budget, it is worth repeating a little common sense.

1. The huge deficits are caused primarily by the economic downturn, and the accompanying collapse in tax revenues (down to 14.7 percent of gross domestic product) and automatic increase in spending on unemployment, food stamps and the like. The Bush misrule—tax cuts and not paying for two wars, record military budgets and the prescription drug benefit—adds to the problem. The Obama Recovery spending—too small, not too large—adds the smallest amount to the pot.

2. Deficits will be reduced primarily by economic growth. Growth brings the deficit down from 10 percent of GDP to 5 percent in the Obama projections. Growth brings the deficit down in the Republican budget also (They cut over trillion from Medicare and Medicaid but that essentially pays for top end and corporate tax cuts).

3. The biggest challenge facing the country is still jobs and growth, not short-term deficits. The Obama budget projects unemployment to be at 9.8 percent when the domestic discretionary spending freeze kicks in. The supplemental jobs bills currently under discussion—$150 billion passed by House, $100 billion for Obama, $80 billion and falling in the Senate—are too small to make a difference. And it isn’t clear where the jobs will come from with consumers cutting back, states and localities cutting back and businesses putting off investments. With the “freeze” and the tea-baggers turning political attention to spending cuts, the biggest danger is that spending restraints and the rollback of Federal Reserve subsidies will retard recovery—and increase deficits as mass unemployment continues.

4. The long-term deficit challenge is almost entirely one of health care costs. Assuming the economy starts growing again, the long-term deficits are caused by soaring health care costs. Republicans limit these by abolishing Medicare and Medicaid, turning the former into a voucher program that will push more costs onto the retired and the latter into a block grant that will push more costs onto the states (or the poor and disabled). Comprehensive health care reform that gets both private and public costs under control is the only sensible way to deal with this challenge. Period.

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[groovedaddy]

1. You left out more than half the population with: "an appeal to rational thought." n.t