Burnt Orange Report

First, a clarification, of that $332 odd billion in interest payments, approx. $160 Billion was paid by the federal government to the federal government (Think Soc. Security trust fund, or Bonds purchased by the Fed, among others). "Only" $170 Billion was actually sent out in interest payments to anyone other than the Federal government.

Still that's a problem, but why is the "debt tax" inherently worse than income / payroll / investment taxes? Sure we could end the deficit now by raising taxes through the roof, as I am sure most of you would love to do, but that would be just as harmful as the "debt tax." More harmfull, actually, since the deficit is about the only thing that puts any pressure on congress to hold down spending. Raise taxes to eliminate it and spending will spiral even higher, resulting in another deficit that must be "fixed" by higher taxes.

It is, incidentally, the massive increases in Federal spending, combined with the until recently slumping economy, that made up most of the swing from $200B+ surplus when Bush took office to the $375B deficit now. Even if you assume that Bush's tax cuts contributed nothing at all to economic growth, and thus higher tax revenues, which no one does, then they "cost" the treasury $140B last fiscal year.

The rest of the swing from surplus to deficit came from the recession and *much* higher Federal spending. Some of it was justified post 9-11, like military spending and homeland security, but a lot of it was social spending/domestic programs that got jacked up, like, say, the 80% increase in farm handouts.

Now, Andrew, if you liberals will agree with us conservatives that the deficit is a problem, and something other than raising taxes must be done, then we can join in the spirit of bipartisan cooperation to dramatically downsize the Federal government :)

Sherk

Yeah, and I guess one should look at the largest budgets when deciding where to start cutting, after all, that's what the Republican leadership in Texas did. So I'm sure Shrek will join me in chopping away at the now $401 Billion Department of Defense spending.

Shrek? That didn't take long. Curse that movie!

As for chopping departments, how about taking down Agriculture, Commerce, Energy, HUD, ... the possibilities are endless.

Seriously, though, when it comes to cutting the largest budgets, how about entitlements? I would hope that we can all agree that those who have the financial ability to care for themselves, ought not look to the government for subsidies.

Mostly I'm talking about means testing Medicare in a serious way, and only allowing the truly poor to recieve any "entitlements." Why should wealthy and middle class seniors recieve such largesse? For all the talk of a drug benefit for destitute Seniors, 3/4 of senior citizens have their own drug coverage, and if the drug bill were tailored to only meet their needs, it would cost only $150B, not $400B. Seniors already have 3/5 of the wealth in this country. So lets trim Medicare so that only the truly poor and needy recieve benefits, or if you don't want to cut off cash to current retirees, at least say that non-impoverished baby boomers don't get the handouts when they retire. We could solve the long-term budget crisis over night if we did that.

Sherk

Sherk, of course, makes a very good point. You can't blame tax cuts for eating up the surplus when when now face a budget deficit nearly twice as large as the tax cuts themselves. The bad economy by itself erased the surplus, and higher spending is reponsible for the majority of the deficit.

Oh, and before you try and blame the increased spending on Iraq, think again. It's largely been non-defense increases, and for the record, I oppose those.

I'll admit that I disagree with liberals and Democrats on some issues. Perhaps means testing Medicare is the answer. I disagree with farm subsidies- the history of our country is a history of farmers learning to do something else and anyone who is not currently a farmer and whose family came over to this country in the last 50-100 years can trace their lineage to a farmer who got sick of farming and learned to do something else. That would save billions of dollars currently spent rewarding people for not producing. If small farmers can't keep pace with factory farms- tough. If factory farms can't be as profitable without the subsidies, tough. Its time they all got off the dole.

Still, if Bush had taken the billions of surplus and devoted to paying down our debt rather than paying back huge breaks to the rich we'd be paying less and less in debt service today. Bush chose a path that betrays the so-called values of conservatives- limited federal spending (see the Cato Institute's studies which show him expanding the federal government at a faster rate than even Carter) and balanced budgets and chose to spend money on causes which don't serve anybody but cost us all in the end.