The federal deficit is expected to hit $407 billion for fiscal 2008 (which ends at the end of this month) and $438 billion next year. Still, the deficit is expected to be only 3% of GDP, which is in line with the average of the last 30 years. We hope Congress and the Presidential candidates don't obsess over the deficit per se, because the real fiscal drag from government comes from how much it spends, not how much it borrows.
The Bush tax cuts also aren't the budget problem. Until this year federal tax collections have been surging. In the four years after the 2003 tax cuts become law, tax receipts exploded by $785 billion. This year revenues have declined by 0.8%, but a major reason is the $150 billion bipartisan tax rebate that has hit the Treasury without spurring the economy. Without these nonstimulating rebates, federal tax payments would have climbed another 2.5%, according to CBO. Revenue is expected to be a healthy 18.5% of GDP next year without any tax increase.
Another myth is that the war on terror has busted the budget. While operations in Iraq and Afghanistan are expensive, defense spending is $605 billion this year, or about 4.5% of GDP. That only seems large by comparison to the holiday from history of the 1990s, when defense fell to 3% of GDP. As recently as 1986, defense spending was 6.2% of GDP.
The real runaway train is what CBO calls a "substantial increase in spending" that is "on an unsustainable path." That's for sure. The nearby chart shows how much some federal accounts have expanded since 2001, and in inflation-adjusted dollars. This year alone, federal agencies have lifted their spending by 8.1%, with another 7% raise expected for 2009. There's certainly no recession in Washington. The CBO says that, merely in the two years that Democrats have run Congress, federal expenditures are up $429 billion -- to $3.158 trillion.
The fiscal blowouts have included a record farm bill, notwithstanding record farm income; an aid bill for distressed homeowners, extended unemployment benefits, and more generous veterans benefits. Next up: votes on $50 billion for Detroit auto firms, an $80 billion energy bill, as much as $50 billion for spending masked as a "second stimulus," plus $100 billion or more for the Fannie and Freddie rescue. Rather than sort through priorities, Congress is spending more on just about everything.
That's right kids. The biggest spending increase isn't the war in Iraq, it isn't the war in Afghanistan, or even the Bush tax cuts. It's Congress doling out welfare checks and poking it's nose into everything that it shouldn't be. Spending money like a drunken sailor, and not being fiscally responsible.
Nancy Pelosi has specifically blamed Bush for the increase in our debt, when it was the Democratically controlled Congress who were to blame all along.
Just in the above mentioned bills, you're talking about $280 billion dollars in extra money being spent that we don't have.
Democrats in Congress have blamed Republicans for out of control spending, saying that the war in Iraq money could be better spent elsewhere, yet they are spending even MORE money then what's being spent in Iraq.
It really is time that we implement term limits and balanced budget Amendments, otherwise things are going to get worse.
And they are even thinking about another $100 billion to create a "second stimulus" when clearly the first one didn't work.
STOP SPENDING MY FUCKING MONEY LIKE THIS!
Nancy Pelosi, Harry Reid, John Murtha, and Hillary Clinton are all DIRECTLY responsible for this. They are the ones who continually ask for high amounts of earmarks, and then vote for them.
Plus, as an added bonus, this article came from the Wall Street Journal. You know, the FINANCIAL people. :)
Travis
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