Getting the House in Order

We've spoken of Greece.  The United States, though, is no Greece.  We'll do what's right to get things in order on our own.  So, what's it going to take to put things right with our budget?
[I]n order to prevent the debt situation from expanding, and depending upon which economist you trust concerning the multiplier effect, federal spending must be reduced to somewhere between $2,085 trillion on the high end and $1.344 trillion on the low end. And here are the current big-ticket items: 
$761 billion - Social Security
$468 billion - Medicare
$269 billion - Medicaid
$598 billion - Unemployment/Welfare
$679 billion - Department of Defense + Foreign Wars
That comes to $2,694 billions, which is roughly $2.7 trillion.  We need to get that down to at least $2.085 trillion, and probably much lower.

If we entirely eliminate welfare and unemployment, Medicare and Medicaid, we'd be down to $1.44 trillion, which is within the right range.  Some cuts to defense will be possible once the wars end, although we do need to replenish the machinery and stores we have used up in Iraq and Afghanistan.

So, it's doable, right?  Well, one little thing got left out.
One major difference between Social Security and pensions is that the federal government has not set aside any money, or created a “revenue source” (aka a new tax) to fund those pensions.
Last year that was $268 billion, and that's before the Boomers retire.  So, figure a good $400 billion in extra cuts are needed here.  Well, maybe we can trim Social Security a bit... say by half... or Social Security by a quarter, and the pensions by half... hm.

It's past time that we started to hear serious consideration of these issues in public.


douglas said...

I'm starting to think you won't get serious consideration of such things till they literally can't send the checks out.

It's depressing.

BillT said...

“We have a disconnect between all these sacred promises we’ve made and how they are not backed up by anything,” he says.

Congress has never hesitated to whack veterans'/military retirees' benefits in order to plug a budget shortfall, and as far back as April, then-SecDef Gates and then-CJCS Mullen were chirping that a $500 billion cut in Defense spending over ten years was doable *if* they targeted retirees and veterans.

Obie then told them to crunch the numbers for a *$900* billion cut, and they balked.

Grim said...

The danger of them refusing to discuss it, Douglas, is that they'll end up at that point with only the plans that people like us have generated. OWS isn't going to come up with a plan that answers the mail, since all their concepts are built around the government doing more.

Whether they like it or not, eventually it'll be our way or the highway -- and since we're the kind of people who have the skills and knowledge to rebuild a civilization, that means it's our way either way.

So take heart.

Dad29 said...

Actually, you DO hear serious discussion. (Singular)

See Paul Ryan (R-Janesville WI).

There's the serious discussion, called the "Roadmap."

But Ryan's plan draws almost zero (R) support and absolute zero (D) support--and almost as much 'discussion' as support.

Who was that guy with a lamp?

Paul Ryan.

Grim said...