There Goes the Budget
Posted by Carl\ on August 25th, 2009Two subjects that will not go away have been much in the news yesterday and today. I will address them in separate posts (see below).
Today’s news included the announcement from the White House that federal budget deficits over the next decade will be even higher than previously anticipated. The White House estimates a $9 trillion dollar deficit for the decade 2010–2019. Congressional estimates are lower, but still staggering placing the estimated deficit at $7.14 trillion.
These estimates are based on a huge number of assumptions about spending, economic growth, tax rates and a host of other factors. Change the underlying assumptions and the estimated deficit will be larger or smaller. No one knows with certainty. We can be sure that circumstances will change and that the estimates will not be all that reliable.
Numbers like this quickly become fodder for political finger pointing. Republicans will point to the economic stimulus package as the villain. Democrats will remind everyone that the largest deficits in our nation’s history were run up in the Reagan and GW Bush years. There will be some truth in both accusations, but mostly they are attempts to grab political advantage rather than thoughtful efforts to analyze the issue. People who’s primary vantage point is religious will not succumb to either party’s efforts to advance itself at the expense of the other.
Rather, it is time for everyone to stop the blame game which has the underlying motive of political competitive advantage and to seek to honestly look at our situation and to apply values that are more important than party rivalry.
At the very least, people of faith should be calling for honesty in analysis. The truth is that we have what is called a structural deficit. That is, even with full employment and full tax revenues, federal spending is greater than income. But solving the problem will take much more than making loud noises about cutting spending. Nor will “cutting out waste” make a significant dent in the deficit. The truth is that if we are to have a government of the people, we have to pay attention to what people want their government to do.
The health care debate is a good case in point. Overall, sixteen to seventeen percent of our Gross National Product is spent on health care. This is far more than any other economically advanced country. While a majority of this money is spent in the private sector, Medicare and Medicaid are government programs that are very expensive. Yet, I do not know a single person over 65 who wants to give up Medicare. For all the loud voices making noise about “socialized medicine,” Medicare works well, people like it and are not going to give it up. Getting overall spending on health care into a more sustainable range for the whole economy will play an important role in addressing the federal budget deficit.
The other spending area we must take a calm look at is military spending. The wars in Iraq and Afghanistan contributed significantly to the GWB era deficits and those costs are still with us. American military spending is the largest in the world and is larger, in fact, that the combined spending of the next nine countries! And virtually all of those countries are our allies! It is simply not economically realistic to spend this way and expect to have a sustainable budget.
Further, calm discussion is needed around the method of funding the federal government. Once we honestly face up to the programs we want to sustain and/or expand, we must then decide how to fund them. The income tax should not be seen as sacred. While most people of faith would agree that those who are blessed with more should carry a greater share of the cost of sustaining their blessings, we should not be exclusively married to the graduated income tax. Perhaps we should consider taxing consumption above a basic amount for food and shelter.
In a day of many loud irrational voices, people of faith can contribute greatly to the debate by holding to our values. What is the truth of the situation? What do the American people want to provide through their government? What is the real threat to our nation: other countries, terrorism, or internal economic insanity? What are some just and rational ways to fund the things we want? When are we holding on to the ways of the past when new ways are needed?
Our projected federal budget deficits will generate slogan shouting, finger pointing and efforts to gain party advantage. People of faith will lower their voices, cut out the tired slogans, open their minds, face the realities (especially the ones that run contrary to our political assumptions), and seek solutions that are consistent with the facts. We are seeing far too little of these things these days.