Skip to comments.THEIR OPINION Wanted: Real plan for deficit[Congress and President Obama Donít Seem To Have A Plan]
Posted on 08/22/2009 5:06:26 AM PDT by Son House
The record U.S. budget deficit poses a serious risk to the U.S. economy, and Congress and President Barack Obama dont seem to have a plan to deal with it.
The risk is that our largest debt holders, the Chinese, seem uneasy about their holdings during a time when the annual deficit is four times larger than last year. In the past 10 months, the federal government has spent about $3 trillion while taking in about $1.74 trillion. Should the Chinese begin to sell some of their holdings, interest rates in the U.S. could increase dramatically.
While the Obama administration apparently has high-level meetings with Chinese bankers on their debt holdings, and apparently, reassures them we will manage our debt, there doesnt seem to be much of a plan in place that doesnt rely on the hope of an improving economy.
Federal spending grew as a result of the $787 billion stimulus package and the bailouts of major banking and financial companies. Federal revenues have declined about 6 percent because of the economy.
Congress is attempting to address the spending problem by passing so-called PAYGO legislation that requires Congress to cut spending or raise taxes if it approves new spending or new tax cuts so as to not increase the federal deficit. The House has passed PAYGO legislation, but it still contains too many exceptions. The Senate has not yet adopted PAYGO, though several senators have introduced the legislation in that body.
Those hoping to avoid tough political choices that PAYGO requires may be hoping the economy pulls us out of the recession and suddenly bolsters federal tax receipts. But that doesnt appear to be happening at a rate that would reduce the deficit even in a couple of years. Consumer spending, which makes up two-thirds of the U.S. economy, fell unexpectedly by 0.1 percent in July, even with sparks such as the cash for clunkers car program.
The stimulus money has been making an impact on jobs, but many analysts expect employment to grow slowly, and the unemployment rate nationwide remains high.
So, Congress and the president need to come up with a contingency plan. Passing and enforcing a comprehensive PAYGO plan may at least give a little psychological comfort to holders of U.S. debt and investors worldwide. There should be a plan for considering what entitlement programs can be temporarily suspended should the deficit get into more worrisome territory.
A plan can keep us in control of our financial destiny instead of ceding it to people who dont live here.
There’s only one answer: Reaganomics
Foreign aid moratorium. Zero, zip....
You don’t need a plan. You need action.
Current Plan = Destroy America, seize everyone’s guns, and take away freedom. Isn’t their plan obvious?
Yes, actually, it is. :0/