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We've heard a lot of talk about spending cuts, how we cut 5% here, 10% there, etc. Yet somehow spending always seems to go up. What's wrong with this picture?
Problem is, politicians' (on both sides) definition of a "cut" goes something like:
"We had planned to increase spending by 14% next year. But we have to save money, so we'll increase it only 11% next year instead. There you go: A 3% cut in spending!"
This is unsustainable, of course. The resulting debt has been skyrocketing.
When will we say, "This year we spent $300 billion on such-and-such major program. But next year we will only spend $270 billion on that program. And the year after, we will spend $250 billion on it, and for the ensuing ten years we will spend exactly $230 billion per year, never a penny more." And then we actually stick to it.
THAT'S a cut. And it's what we need. Or we will wind up like Greece.
Don't you know that cutting spending will turn us into a third world nation? Don't you know that cutting spending will force us to push senior citizens over a cliff? Don't you know that cutting spending would eliminate giving free cell phones to those poor folks who simply cannot afford them? Don't you know that we are spending our way out of this recession? Don't you know if we spend more on healthcare, we will all be better off? Spending on education will make test scores go up, right?
Obviously everything is fine and dandy and we should just keep spending like drunken sailors, we will obviously be better off in the long run.
We've heard a lot of talk about spending cuts, how we cut 5% here, 10% there, etc. Yet somehow spending always seems to go up. What's wrong with this picture?
Problem is, politicians' (on both sides) definition of a "cut" goes something like:
"We had planned to increase spending by 14% next year. But we have to save money, so we'll increase it only 11% next year instead. There you go: A 3% cut in spending!"
This is unsustainable, of course. The resulting debt has been skyrocketing.
When will we say, "This year we spent $300 billion on such-and-such major program. But next year we will only spend $270 billion on that program. And the year after, we will spend $250 billion on it, and for the ensuing ten years we will spend exactly $230 billion per year, never a penny more." And then we actually stick to it.
THAT'S a cut. And it's what we need. Or we will wind up like Greece.
When will we do it?
The measure of fiscal sustainability is not to spend less in absolute dollars this year compared to last year; it's to spend less than projected revenues. That may require a spending reduction in absolute terms for some time (it does now), but that's not necessarily always the case. Also, don't forget about inflation...a set amount today will not provide the same level of services ten years from now.
I doubt there will ever be less spending then the year before. Best we can hope for is an increase that matches the natural rate of inflation, or is slightly less then that.
Keep doing that, until the natural growth of GDP increases to make up the cost.
Republicans and Democrats alike haven't shown a willingness to actually cut, and we didn't get that option in this election either. Well, unless you voted for Gary Johnson like I did.
The measure of fiscal sustainability is not to spend less in absolute dollars this year compared to last year;
Actually, that's exactly what it is. Especially when interest on the National Debt is nearly the largest single expense the government has... there can be no other measure.
Or else we will wind up like Greece. They ran out of Other People's Money. And so they were forced to cut back on all the lavish entitlements, like it or not. And their people are now rioting in the streets because they're no longer getting the free goodies they've become used to.
Does anybody think that WON'T happen here (including the rioting parts) if we keep going like we are?
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