The new budget reflects the sick blend of viciousness and cowardice that we've come to expect from the government. Viciousness from the Republicans, and cowardice from the Democrats. It's a bit like watching negotiations between Neville Chamberlain and Adolf Hitler.
The budget cuts amount to $38 billion, or about 2.7% of the projected deficit. So in creating a host of new problems, it failed to address the one all the shouting was about. If the projected deficit for this coming year was projected to be $1.65 trillion, it means that now it will only be $1.612 trillion. Big whoop. That's right, folks: the budget reduces the deficit by less than 3 percent.
Oh, and it doesn't include the $40.5 billion that had already been cut when Obama submitted his budget proposal a few months earlier. That does bring the deficit reduction up to a slightly less inane 6%. But if you know any Republicans who are stupid enough to crow about how Congress is cutting the deficit, you can smile sweetly and point out that Obama cut even more, and more wisely, too. These are very stupid people. You won't miss having to listen to them.
In fact, both Congress and Obama had budget proposals in February, and to the utter mortification of the Republicans, Obama's budget had more cuts! They had to go back and rework their budget, padding the cuts with ones that were categorically illegal, in order to save face among the meat-ax ignorati in the Teabagger movement.
The biggest source of fraud, abuse and waste in all federal spending is the military. Between cost overruns, worthless projects that exist only to please powerful congressionals and their constituents, corruption and sheer bone-headed brass-hat stupidity, a good $200 billion a year could be shaved from the defense budget at no risk to the country's ability to defend itself. Pull out of Iraq and Afghanistan, and save another $150 billion. A lot of the money that goes to the military goes more to defend the interests of major international corporations rather than US interests. If, hypothetically speaking, the funding the military demands includes the ability to invade Malaysia on 48 hour notice, it isn't because Malaysia presents any credible military threat: it's because major companies wouldn't move there from the US, taking jobs with them, without assurances from the US government that the military would step in to protect them if Malaysia were to decide to nationalize them or tax them or something.
You could possibly shave a half a trillion dollars from military spending, and America would STILL be the best guarded and most powerful country on earth. Remember, America out-spends the rest of the world COMBINED on military bullshit. And half of it really is bullshit.
So how much does the new budget cut from the military?
Three billion. And people are expressing surprise that Congress cut that much.
It's important to remember that with the commies all gone, the biggest military threat the Republicans can come up with is al Qaida, who as a military force might be able to beat the Vatican, but little else. The type of battles they fight, the military is useless against.
The only really big threat assessment is China, and after them, Russia. But if they decide to become immediate threats rather than hypothetical ones, it will be to their neighbors, not the US.
People are damning or praising Congress for cutting three billion from the bloated defense budget.
The new budget cuts $2 billion from transportation. Three quarters of that is high-speed rail, a concept Republicans utterly loathe, presumably because any successful mass transportation project will cut into the profits of big oil companies. The rest is infrastructure. Maybe they've got a point: it's probably easier to replace a bridge that has collapsed then it is to retrofit the bridge before it collapses. Just try to avoid being on the bridge when it collapses, and you'll be fine.
The budget cuts $5 billion for crime victims. Yes, that was a Republican cut. “Crime Victims” was a big moral crusade of Republicans for the past thirty years, but, like most of their moral crusades, it vanished when it became clear they might have to make any sort of sacrifice regarding same. The Republicans also cut half a billion from a program designed to take organized crime assets that have been seized and give them to crime victims.
Yessuh, bahss, we's gettin' tough on crime there bahss.
They cut a half a billion from student-aid programs, too.
If the Democrats start bragging about how they saved Social Security and Medicare, tell them to shut the fuck up. Those programs aren't discretionary—Congress, by law, cannot cut them below a base point, which we're already at. So they deserve no credit for not allowing cuts in those programs, much as the Republicans want to go at them with a meat ax.
The Dems DID manage to save the EPA and Planned Parenthood from defunding. Planned Parenthood is chump change--$300 million a year. But it sends a message that the Dems aren't prepared to let the Republicans turn American women back into sex slaves. And the EPA is something all our lives depend on. As long as they're around, the Republicans can't get away with pretending there is no climate change, or that asbestos is actually good for the lungs.
The Republicans really want to eliminate Medicare and Social Security because it isn't enough to weaken American workers—they want them to be utterly dependent on the good graces of their bosses for health care, pensions, education and all the other necessities of life.
In other words, they don't want a democratic citizenry; they want a national corral filled with hundreds of millions of slaves.
Interest on the national debt is projected to be $571 billion. That's bigger than the DoD budget (not to be confused with overall military spending, which is substantially larger). Keep in mind that interest rates are at historic lows, the result of the Fed spending the past nine years trying in vain to kick-start the economy. The national debt is around fifteen trillion, which means the interest rate is about 3%. Guess what happens if interest rates jump to a more normal rate of 6%? Right. The interest on the national debt doubles, and the annual deficit jumps by over half a trillion dollars.
There's not a lot to be done about that at this time. Paying the interest is mandatory (not paying it is possible, but tantamount to national suicide), but it's worth remembering that, as with the annual deficits, the national debt is caused mostly by Republican policies. The debt is fifteen times what it was the day Reagan took office, and between him and Bush Junior, about three quarters of the national debt stem from foolish tax cuts based on quack economic theories, and pointless and stupid wars.
Were it not for the Reagan and Bush tax cuts, the national debt would be about two trillion under the worst case scenario, and interest about $60 billion. Actually, it would be better than that, because the economy would be much more healthy, and interest rates higher. But the government, doing exactly the same other spending it's doing now, would be running a surplus.
Think about that.
The country actually was deeper in debt before, in 1946. World War II had brought about amazing spending, with deficits running up to three times revenues. At the end, debt stood at about 130% of GDP (compared to about 115% now).
It took 22 years, but by the time LBJ left office, it was down to a much more manageable 30%. Yes, that was with Vietnam and the Great Society, things right wingers like to blame for the current debt. Even as Truman, Eisenhower, Kennedy and Johnson worked to reduce the debt, the economy grew at a rate never seen before or since.
Think about THAT.
Granted, the top nominal tax rate was 91% during the Eisenhower years, with an effective rate around 40%. Corporations also paid a much higher effective rate, even though their nominal rate was actually higher than it is now. But that top rate kicked in on incomes in the top 2%, about $2.75 million a year. It's worth noting that federal taxes were a higher percentage of the GDP in 1952 than they are today, but a family of four at the median wage paid four percent of their income in federal taxes.
Think about that.
If the income tax rate were to be changed so a top nominal rate of 45% applied to income and dividends totally more than three million a year, the deficit would vanish, just like that.
If it was on income over two million, we could retire the debt in twenty years.
Think about that.
Posted: April 15, 2011