Monday, October 21, 2013

POS - What People Just Aren't Getting About the Debt Fight

Ok so as we all know, the government just went through a messy hissy fit fight over the debt ceiling and spending levels, which was only ended thanks to a temporary solution that likely guarantees we’ll be having the exact same fight again in early 2014. I just wanted to weigh in on a few things that get lost in the shuffle on the fight over spending, some hard truths that either people don’t understand or are willfully ignoring. Too often people just say the soundbite “we don’t have a revenue problem, we have a spending problem.” Unfortunately, that soundbite is wrong; we do have a revenue problem. And until the folks in D.C. on both sides of the aisle (this is a problem facing both Democrats and Republicans, and both parties aren't facing up to these facts) are willing to face that truth, nothing is ever going to change.

What are we spending our money on?

Yes, we currently have been operating without a budget in Washington for some time now, because both sides cannot come to an agreement on a long term budget. Instead, we get these piecemeal continuing resolutions that agree to fund the government at a set amount for a short period of time. Right now, that funding amount is at the levels set forth in the sequester, for a budget on discretionary spending by the government of $988 billion, if the budget were extended out to a twelve month period. What people don’t realize is what that means. Discretionary spending is money the government is choosing to spend, so that covers the following: our military, education, veterans’ benefits, health (the Centers for Disease Control & National Institute of Health), the Food and Drug Administration, the Environmental Protection Agency, NASA, NOAA, and many more. This slice of our budget is approximately 30% of what the government spends, and these were many of the services that were halted by the government shutdown. But all the focus is on this 30% instead of on the other 70% of where the government spending goes.

So what is the other 70%? 6% of it is paying the interest on our national debt (currently ~17 trillion dollars), and the other 64% is on mandatory spending programs. The lion’s share of that 64% is Social Security, Medicare, and Medicaid, which combined are 87% of the mandatory spending. In other words, about 55% of the total federal budget goes strictly to those three programs. So, unless changes are made to those three programs, all the other cuts in the world aren’t going to amount for squat, really.

Keep reading after the jump, there's more! --->