How Do We Get The Deficit To Zero?
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The document summarizes the current state of the US federal budget deficit and argues that drastic spending cuts are needed to reduce the deficit to zero. It notes that the US faces a $1.556 trillion deficit for 2010 with revenues of $2.165 trillion and spending of $3.721 trillion. To close this gap, it estimates that spending would need to be cut by 44% on average across all programs, including very popular ones like Social Security, Medicare, defense and antipoverty programs. The document warns that failure to cut spending risks following in the path of European countries like Greece that have faced debt crises, austerity measures and public unrest.
How Do We Get The Deficit To Zero?
- 1. How Do We Get The De鍖cit To Zero? Or, There is no such thing as a free lunch. Paul M. Jones Mid-South Tea Party General Meeting Thursday, May 20, 2010
- 2. Who Cares? Portugal, Italy, Ireland, Greece, Spain (PIIGS) De鍖cit spending for decades Under Euro, cannot in鍖ate Cant borrow any more IMF bailout, austerity measures Strikes, riots in response
- 3. Greek Riots
- 5. 2010 Federal Budget Revenues: $2,165,000,000,000 Spending: $3,721,000,000,000 De鍖cit: $1,556,000,000,000 (source: http://www.whitehouse.gov/omb, table S-4; graphic from Heritage)
- 6. Big Numbers Count to a million: 11.57 days Count to a billion: 31.68 years Count to a trillion: 31,688 years Count the de鍖cit: 49,306 years
- 7. Human-Scale Numbers Revenues per household: $18,276 Spending: per household: $31,406 De鍖cit per household: $13,130 (source: http://www.tampabay.com/opinion/ columns/washington-will-spend-31406-per- household-this-year/1086283, via Heritage)
- 8. Fiscal Responsibility Raise taxes by 72% per household, keep spending in place Cut spending by 44% per household, keep taxes in place
- 9. What To Cut? Earmarks Foreign aid Farm subsidies Bailouts IRS ???
- 10. Its Not Enough Per Household Social Security/Medicare -$9,949.00 Defense -$6,071.00 Antipoverty -$5,466.00 Unemployment -$1,640.00 Interest on the debt -$1,585.00 Veterans兵 bene鍖ts -$1,052.00 Federal employee retirement bene鍖ts -$1,018.00 Education -$914.00 Highways/transit -$613.00 Health research/regulation -$550.00 Mortgage credit -$470.00 Everything else -$2,078.00 Total spending -$31,406.00 Total revenues $18,276.00 De鍖cit -$13,130.00
- 11. Its Not Enough Per Household Social Security/Medicare -$9,949.00 Defense -$6,071.00 Antipoverty -$5,466.00 Unemployment -$1,640.00 Interest on the debt -$1,585.00 Veterans兵 bene鍖ts -$1,052.00 Federal employee retirement bene鍖ts -$1,018.00 Education -$914.00 Highways/transit -$613.00 Health research/regulation -$550.00 Mortgage credit -$470.00 Everything else -$2,078.00 Total spending -$31,406.00 Total revenues -$21,486 $18,276.00 De鍖cit -$13,130.00
- 12. Draconian Example Keep all taxes Cut everything except ... Social Security/Medicare Defense Antipoverty Debt Interest $4795 de鍖cit
- 13. The (Hard) Solution Not enough to demand low taxes Not enough to cut spending in general Need to cut spending in the most popular (i.e., most expensive) programs By large amounts (44% on average)
- 14. Volunteers? Who will volunteer to take the hit? Social Security? Medicare? Food stamps? Reduced defense? Veterans? Retirees?
- 15. Social Issues Sexy, emotional, compelling: Immigration enforcement Abortion Gay marriage Drug war Others are doing wrong.
- 16. Fiscal Issues De鍖cits spending is not sexy ... ... but with de鍖cits, we follow PIIGS. After a debt crisis, social issues will pale. We are doing wrong.
- 17. What We Can Do Send back the free lunch Politicians do what they get rewarded for Tell politicians to cut spending 44% ... ... especially our favorite programs ... ... and re-elect them when they do! Cutting billions? Not serious.
- 18. The Things We Love Per Household Social Security/Medicare -$9,949.00 Defense -$6,071.00 Antipoverty -$5,466.00 Unemployment -$1,640.00 Interest on the debt -$1,585.00 Veterans兵 bene鍖ts -$1,052.00 Federal employee retirement bene鍖ts -$1,018.00 Education -$914.00 Highways/transit -$613.00 Health research/regulation -$550.00 Mortgage credit -$470.00 Everything else -$2,078.00 Total spending -$31,406.00 Total revenues -$21,486 $18,276.00 De鍖cit -$13,130.00
- 19. Truth ... Not fair; violates expectations 44% sooner, or 100% later In鍖ation, con鍖scation, collapse Constitution ignored now? Wait until US bankruptcy. (Argentina 2001)
- 21. Conclusion Cutting spending is a true sacri鍖ce Lives, fortunes, sacred honor A 44% reduction in spending now ... ... or Greece later
- 22. Paul M. Jones http://paul-m-jones.com pmjones88@gmail.com @pmjones