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We are projected to have a $1.5 trillion+ deficit every year until 2020. These cuts are cuts from projected spending which aren't real cuts, we all know this.
We can be conservative in our projection estimate, let's say taxes are raised and we squeeze the deficit to $750 billion, 1/2 of the current deficit and project that over 10 years. That's $7.5 trillion-$2.4 trillion or, $5.1 trillion added to the national debt so about $19.5 Trillion dollars in national debt by 2020.
At a 3% interest rate which is roughly our 10 year yield right now, we will be paying $585 billion in interest. If we are collecting $2.2 Trillion in revenues, and apply a 3% growth rate to revenue collection (to match a 3% growth rate in the economy, which we know won't happen, but..) we are looking at $2.95 trillion in revenues or 20% of federal expenditures on interest alone.
Can someone tell me how this is fixing the problem? The assumptions I used a very conservative and show our fiscal future in the best light possible (things like assuming 3% growth rates, slashing the deficit by 1/2).
We are projected to have a $1.5 trillion+ deficit every year until 2020. These cuts are cuts from projected spending which aren't real cuts, we all know this.
We can be conservative in our projection estimate, let's say taxes are raised and we squeeze the deficit to $750 billion, 1/2 of the current deficit and project that over 10 years. That's $7.5 trillion-$2.4 trillion or, $5.1 trillion added to the national debt so about $19.5 Trillion dollars in national debt by 2020.
At a 3% interest rate which is roughly our 10 year yield right now, we will be paying $585 billion in interest. If we are collecting $2.2 Trillion in revenues, and apply a 3% growth rate to revenue collection (to match a 3% growth rate in the economy, which we know won't happen, but..) we are looking at $2.95 trillion in revenues or 20% of federal expenditures on interest alone.
Can someone tell me how this is fixing the problem? The assumptions I used a very conservative and show our fiscal future in the best light possible (things like assuming 3% growth rates, slashing the deficit by 1/2).
You post's point to the Conservative fallacy that budget reductions can be made solely with spending cuts.
Of course the Republicans walked away from a much larger debt reduction deal that had $4 tillion in deficit reduction with $1 trillion in revenue increases and $3 billion dollars in cuts just so they could say they "beat" President Obama by not cutting tax loopholes for the richest Americans and corporations.
Can someone tell me how this is fixing the problem? The assumptions I used a very conservative and show our fiscal future in the best light possible (things like assuming 3% growth rates, slashing the deficit by 1/2).
It's not fixing the problem. Government will continue to grow every year.
If anyone were serious about fixing the problem, the cuts would have been much much larger.
You post's point to the Conservative fallacy that budget reductions can be made solely with spending cuts.
Of course the Republicans walked away from a much larger debt reduction deal that had $4 tillion in deficit reduction with $1 trillion in revenue increases and $3 billion dollars in cuts just so they could say they "beat" President Obama by not cutting tax loopholes for the richest Americans and corporations.
Can you please read what I said? I said "assume we raise taxes and cut the deficit in 1/2, to 750 billion and project that over 10 years." Read the post before you respond.
We are projected to have a $1.5 trillion+ deficit every year until 2020. These cuts are cuts from projected spending which aren't real cuts, we all know this.
We can be conservative in our projection estimate, let's say taxes are raised and we squeeze the deficit to $750 billion, 1/2 of the current deficit and project that over 10 years. That's $7.5 trillion-$2.4 trillion or, $5.1 trillion added to the national debt so about $19.5 Trillion dollars in national debt by 2020.
At a 3% interest rate which is roughly our 10 year yield right now, we will be paying $585 billion in interest. If we are collecting $2.2 Trillion in revenues, and apply a 3% growth rate to revenue collection (to match a 3% growth rate in the economy, which we know won't happen, but..) we are looking at $2.95 trillion in revenues or 20% of federal expenditures on interest alone.
Can someone tell me how this is fixing the problem? The assumptions I used a very conservative and show our fiscal future in the best light possible (things like assuming 3% growth rates, slashing the deficit by 1/2).
The problem is not fixed. All they did was raise the debt ceiling.
That "cut" they talked about is moot.
The solution is to FREEZE THE BUDGET. No more baseline budgeting and allowing automatic increases of 7-10% every year.
This is exactly what Ron Paul advocates. He encapsulates this point very succinctly and clearly in terms anyone can understand, in this short article that is worth the read.
"...the cuts being discussed are illusory and are not cuts from current amounts being spent, but cuts in prospective spending increases. This is akin to a family saving $100,000 in expenses by deciding not to buy a Lamborghini and instead getting a fully loaded Mercedes when really their budget dictates that they need to stick with their perfectly serviceable Honda."
"In Washington terms a simple freeze in spending would be a much bigger cut than any plan being discussed. If politicians simply cannot bear to implement actual cuts to actual spending, just freezing the budget would give the economy the best chance to catch its breath, recover and grow."
They need to quit quibbling over whether we can afford to buy a new Mercedes or a new Lamborghini and stick with the Honda. Freeze the Budget!
It didn't, it doesn't, it won't, it kicked the can down the road yet again!
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