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The Budget and its Archenemy

05 Apr

“[The budget cuts] threaten hundreds of thousands of jobs, and cut vital services for children, seniors, people with mental illness and our men and women in uniform” (1).

“Does Mr. Obama really want to claim that his administration…is unable to save a penny out of every dollar it spends?” (2).

I have heard many outraged comments about the sequester. Many people weigh in on this topic, placing blame and criticism on many different sources. Yet throughout the facebook rants, radio tirades, and analytical reports, very few people really seem to understand how our economy and the US budget is run. In an effort to improve our general knowledge of the economy and hopefully cool down some tempers, lets look at some key elements of:

THE BUDGET

First of, lets look at the Constitution. The basic powers of Congress are outlined in this all-important document.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States…To borrow money on the credit of the United States; To regulate Commerce…To coin Money, regulate the Value thereof.

Basically, US money is placed in the hands of our congressional leaders. In comparison, the President has very little to do with the budget. He may recommend policies – such as the Sequester, which was voted on in 2011 by Congress – but he cannot actually do Congress’s job.

Second: The Economy. Our economy has a lot to do with government spending. Below is a pie chart of the spending budget in 2012.Medicare, Medicaid, and Social Security (programs that primarily benefit senior citizens) take up 43% of the budget, which is more than double any other piece of the budget. Over the past few years, the elderly population has been increasing, and is expected to double in the next twenty years (3). This means that the federal budget will either have to change dramatically, or we will be going into a major black hole.

As you will notice from the chart, all other government spending (besides defense spending) takes up less than 26% of the budget. This includes money for schools, stimulus programs, highway maintenance, food inspections, and many other things we depend on. Clearly, there is an uneven distribution of priorities, something that will continue to cause issues for years to come.

Besides the actual budget, our main economic problem is the amazingly deep national debt. At the time of this post, the national debt stood at:

According to data from the US Department of Treasury and the US Bureau of the Census’ (4). This is about  $53,355.28 debt per US citizen. See a problem?

And last but not least, lets look at the Sequester, which I dub the archenemy of the economy. Why? A video by the Vlogbrothers sums it up really well; check it out here “Understand the Sequester (Spoiler: It’s Bananas)”. To summarize, the budget cuts included in the Sequester solve the wrong problem! Instead of fixing our long term budgeting issue, which includes skyrocketing costs of medicare and social security (gotta love those baby boomers.) These cuts affect everything else, including every acronym (NASA, USDA, CIA, FBI, TSA, etc), the programs that are used on a daily basis. Basically, it is a short term solution for a long term problem.

I know what you’re thinking; How did this even happen? Well, the Sequester wasn’t even supposed to happen!  This plan was voted on originally as the backup-to-the-backup-to-the-backup-to-the-backup plan to fix the economy. The deadline – set two whole years from its creation – supposed that in that large time frame, Congress and/or its Super Committee could get its act together and make a better plan. The Sequester was designed badly on purpose, as an incentive to get our lawmakers moving.

Unfortunately, it did not work. Our lawmakers did not “get moving,” and instead allowed a known-consequence simply instate itself. Since then, a crazy round of finger-pointing has ensued in Washington. But here is a better solution. Instead of placing the blame on those who created the program, as the GOP has been inclined to do,  blame those who allowed it to happen: Congress. Even better, inform them that this is unacceptable. These are our congresspeople – they are here to represent the people, and take into consideration your opinion.

So write a letter, send an email, go on your tirade. Keep your cool – think about what you are saying.But get your voice out there, and encourage Congress get something done!

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Posted by on April 5, 2013 in Default

 

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