That deficit thing is going to get worse

The Congressional Budget Office released its projections that say the decrease that has been occurring in the deficit is coming to an end. With the improving economy, sequestration cuts and not funding as many troops in the Middle East, the deficit has quietly been reduced to a less painful level, but we are still in a deficit position. The last time we had a surplus budget was when President Bill Clinton left office and before the President George W. Bush tax cuts that put us back into deficit.

The CBO anticipates the deficit to rise again this fiscal year and continue to rise. So, the debt will continue to climb and interest costs will become increasingly an important part of the budget. There is a group called The Concord Coalition (see link below) who advocates for addressing this ticking time bomb now. They have a bipartisan group of Board members and help frame a discussion balancing the spectrum of needed spending cuts and revenue increases.

The major parts of our budget that should get our attention are in five areas:

Expenditures: Social Security, Medicare/ Medicaid/ ACA, Defense

Revenues: Corporate Taxes and Individual Taxes

The other stuff is minor relative to these big items, but of course we need to address each and spend judiciously. There are ways to shave spending off each of these key expenditures, without being too detrimental to the underlying programs and needs. And, we could be more dramatic if we want to make significant cuts, but people need to know what they would be losing. We also need to recognize there are some areas, such as infrastructure investments, that need to be increased and funded.

Yet, we also need to reform our tax system to make it simpler for all and make it easier to repatriate some offshore corporate income which goes untaxed here. In my view, we also need to garner more revenue as we are one of the least taxed (relative to GDP) countries of the 33 member countries of the Paris based Organisation for Economic Cooperation and Development. So, we need to base our decisions off comparative information to other countries, as no one wants a tax increase, but that is something that should be considered.

Regardless of what we need to do to accomplish the task at hand, we need to move forward before the interest costs get too burdensome. Also, as we age as a country, our costs pressures will increase with healthcare and retirement costs. If we wait too long, the cuts will need to be more severe and more of us will be impacted. Learn what each candidate will do about these issues. They seem to be silent on these issues and that is not a good thing.

http://www.concordcoalition.org/

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15 thoughts on “That deficit thing is going to get worse

  1. I would suggest that political silence on this type of issue is “the norm”. Finances, whether at a personal or national level is driven by understanding basic math and being familiar with two columns of data – Incoming and Outgoing! Of course I am being simplistic but look at Greece. The population does not seem to want to pay taxes, but they want their country to be out of debt. Similarly, any politician whose Platform is to include increased taxes must have something else going for him/her otherwise the result will be minimum votes. Part of the problem is expecting a politician to make decisions that will positively impact the country long after their term of office has expired. Part of the problem is pandering to the general population by getting votes using irresponsible promises. Part of the solution is what? Perhaps better education of the voters? Perhaps a huge PR campaign on the benefits of reducing our standard of living just a little? Perhaps a belief that a visionary, charismatic and responsible leader will surface at some point in time?

    • Thanks for your well thought out comment. This was supposed to be a major issue of the Tea Party, yet they are giving a hall pass to Cruz, Trump and others on their tax proposals that significantly increase the deficit. This was the key point of Former GOP Senator Alan Simpson’s op-ed. Your final point, whether it is climate change action, deficit reduction or infrastructure upkeep, it takes a long term plan that must survive the incumbent’s term. Thanks, Keith

  2. This is so needed. And so hard.
    No one is reporting on this. They are all looking for the candidates to say something inflammatory and pointless, so they can report on it and get some views.
    As a result NO one seems to be paying attention to the real and necessary work of running the damn government.

    • Very true. Do check out the website. This group helps facilitate budget planning education sessions to heighten awareness. Given the deficit increasing tax proposals of some of GOP candidates, this would be a great debate question.

  3. I hope when the primaries are over, we can concentrate on the important issues this country faces (like the budget and the deficit). I care little about who is the most religious (in fact, being too much of a holier-than-thou scares me) or who has low energy. What I want is a thoughtful, in-depth, realistic debate. Probably won’t happen but a girl can dream, can’t she?

    • Janis, please keep dreaming and maybe it will become a reality. On the down side, the more detailed GOP candidates who have experiencing governing got shellacked in the Iowa caucus and Cruz and Trump both have tax plans that greatly increase the deficit. Thanks for stopping by, Keith

  4. In listening to the different candidates I have heard some of them discuss those issues and their plans. The voices seem drowned out by the candidates the media seem to focus on.

    • Roseylinn, you are right our media would rather focus on who dissed whom. And, the Trump followers have no idea of what he stands for as it is all about chest beating and how great he is. A guy like Kasich gets drowned out by the blowing wind from the GOP leading candidates. Bernie is a consistent voice, but even he needs to tell people how he is going to pay for things. Keith

  5. Note to Readers: Do link to the website for a The Concord Coalition and look around. Start thinking of trade-offs as you go through some of their exercises. This will have to be a ground up movement.

  6. Our city recently had an online exercise in which we were asked to allocate the city budget. For each department or service, you could maintain the spending, increase or decrease it by 5 or 10%. I tried it myself and it was surprisingly difficult to fund my favourite services better while providing basic coverage for others. The kicker? With a municipal population of 340,000, only five hundred responses were received.

    • These are good exercises. It is one thing for people to say they don’t want big government, but when they see the cuts they gain a different perspective. It is hard.

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