The Government’s Budget and The National DebtPosted: April 13, 2011
There is great hue and cry right now, and lots of political throat clearing about cutting the budget and getting the debt under control. The President is about to bring out a plan for this as a counter to Paul Ryan’s plan, which aside from funny numbers, the CBO has said will actually barely dent the national debt, if not increase it more.
I don’t believe that the federal government should be run (or can be) like a business, but that is always the demand from the right. As someone who has run a couple multimillion dollar businesses, I offer this: No business on the planet has ever survived by continually cutting spending AND revenues! This, however, is the conservative plan! Cutting spending? Sure. We have and will do more, and it will be painful. There are some services that government exists to provide that can’t be efficiently ‘privatized’ and where it would be a conflict of interest to do so. That said, we will cut more from the budget, both the Democrats and Republicans agree on at least that much.
Let’s address the other side of this equation. More tax cuts are proposed in the Ryan plan. This is just plain insane. If you have ever owned or managed a business, you know that you can’t keep cutting revenue and survive, yet that’s exactly what the Ryan plan does. No matter how dear tax cuts are to the right, taxes are revenues to the government…whether from corporations, individuals, fees, or however they are characterized.
Here is one place the government had better act like a business…raise revenues. The top 2% of wealthy control more wealth at this moment than any time in the last 80 years, they can afford to pay a little more in tax. Wall Street took huge bailouts from the government (us) after nearly sinking the economy with their crazy casino gambling…put a small transaction tax on every transaction that doesn’t presently have one. Finally, close loopholes for corporations, and take away some of their goodies…do you really think oil companies need the depletion allowance when oil is over 100 dollars a barrel and they are making billions in profits? You must be kidding!
The net net is, more cuts are needed (the defense department is so bloated it virtually begs for some cuts), and revenues MUST be raised. Do both, and the national debt will absolutely be reduced. Do only the cuts and lower taxes, and the country is in great peril.