“Ron Paul’s budget plan would cut $1 Trillion from the Fed budget in year One.”
Don’t get me wrong when I say this, the gov needs to be reigned in, but has anyone considered the impact massive cuts like that will have?
Furthermore, I’d like to know the breakdown of this $1T in cuts, vis-a-vis military versus entitlements. How much of these cuts are in things in Art1Sect8, and how much in other areas that the federal (aka: national) govt is wasting money on?
“Don’t get me wrong when I say this, the gov needs to be reigned in, but has anyone considered the impact massive cuts like that will have?”
The pain will be difficult. No politician will support any meaningful reform until the illusion of free government spending is thoroughly clear. When the majority of voters finally understand the unsustainability of our current path, it may be too late. External forces will already be delivering the bitter pain. Democrats have convinced a large number of voters that the rich will be forced to pay for their benefits. Reductions in spending will be aimed at the military. Obama has a clever plan to dilute the immediate impact of military reductions with several large contracts to foreign governments.
We are in much worse shape than Europe. Europe has high taxes across the board especially with income taxes high on even low wage workers and a VAT and gas tax that increases the prices of almost every consumer good. Europe is starting to take the bitter medicine now. Democrats here just keep expanding the welfare state (student loans, Obamacare, food stamps, housing assistance, ...), sharply increasing regulations, and government control of the economy. Government employee unions have no intention to reduce their outrageous demands for retirement compensation. The unions have tremendous legal protections that place their benefits ahead of every other spending priority. Courts will support the unions and may make demands for increased spending in other areas such as eduation (see idiotic court decisions in Colorado and Washington state).
Yes. That’s why some consider an economic crash and mass civil unrest inevitable.
At present, about 20% of spending (not revenue, SPENDING) goes to each of Social Security, Health, Defense, Treasury, and Everything Else. We need to cut $1.5T just to break even. Treasury, being mostly debt service, is nigh unto untouchable: cut payments of debt interest and the whole system will collapse. That leaves cutting the other four categories by 54%, RIGHT NOW, just to stop the bleeding.
Like that’s gonna happen.
We can’t even convince Congress to reduce the rate of increase of spending from 6% down to 2.5% to match the average GDP growth - a mere 3.3% reduction in what Congress _wants_ to spend.
Slashing federal spending in half for everything but debt service would have a massive impact. The half of “taxpayers” who don’t would riot; 50,000,000 rioters would be, um, bad. Ain’t happenin’ since we can’t even get a handful more Republicans to grit their teeth and vote for a 3.3% spending cut.
Problem is, what’s the alternative? Hyperinflation may solve the problem of federal debt (the only non-war alternative once debt interest approaches 100% of revenue), but it would require equivalent increase in welfare (broadly defined) spending because the recipients expect to receive _value_, not just on-paper numbers. Inflate the currency 100% to cut the value of debts by 50%, but then (for example) the $2 needed to buy a loaf of bread will inflate to $4, requiring welfare payouts to double.
The only solution is CUTS. BIG CUTS. Even if we take Ron Paul’s shocking proposed $1T cut and reduce it to $0.1T over 10 years, we’re still increasing the debt by $7.5T over that period. We’d have to cut spending by 3.3% just to have any hope of paying down the debt _ever_ and Congress won’t do that. Heck, Ron Paul’s shocking proposed $1T cut STILL leaves a half-trillion-dollar annual deficit.
Yes, massive cuts would have enormous impact.
So will anything less than massive cuts.
To wit: hang on, it’s gonna be a bumpy ride.
Defense cuts.