CBO: Dark skies ahead on deficit

[SoCalBronco]

“Deficits are projected to rise steadily and, by 2039, to push federal debt held by the public up to a percentage of GDP seen only once before in U.S. history [just after World War II],” the agency said.
Publicly held debt will reach 106 percent of GDP by 2039, according to the report, compared to the current 74 percent.
CBO attributed the growth to an aging population claiming Social Security and Medicare benefits, rising health care costs, the expansion of subsidies offered through Obamacare and interest payments on the debt projected to grow sharply as currently low interest rates return to normal levels.


Read more: http://www.politico.com/story/2014/0...#ixzz37bFficFb

The deficit has been falling the last few years but as expected it will begin growing again and really get to unsustainable levels soon. The interest on the debt is the killer here.....it will keep rising as a percentage of the budget and that's just dead money that isn't productive but must be paid. That alone should be a reason to focus on deficit reduction. That is money that could have been used on tax cuts, defense, education, infrastructure, health spending....whatever your priority it's being pissed away because of debt.

Each side has to give a little here. Yes, tax rates on the wealthy need to go up from 35% and yes there has to be serious cost shifting on medical and health benefits to the beneficiary and away from the state. Just increasing eligibility ages doesn't generate that much savings. The answer is pain.....conservative pain and liberal pain.

[UltimateHoboW/Shotgun]

But, but, but Obama is suppose to fix everything.

[SoCalBronco]

But, but, but Obama is suppose to fix everything.

To his credit, he did make a serious initiative with the Grand Bargain talks. I certainly would be fine with 3 trillion in cuts in exchange for 1 trillion in new taxes. That's very reasonable. House GOP was too greedy.

3T in long term cuts would be terrific....cut, cut, cut. I wish they had accepted Obama's proposal.

[UltimateHoboW/Shotgun]

To his credit, he did make a serious initiative with the Grand Bargain talks. I certainly would be fine with 3 trillion in cuts in exchange for 1 trillion in new taxes. That's very reasonable. House GOP was too greedy.

3T in long term cuts would be terrific....cut, cut, cut. I wish they had accepted Obama's proposal.

Dem/Lib are about to put up that BS graph "showing" reduction of the federal budget. First of all they forget to tell you is that the graph is based on "base line budgeting. Second, they forget to tell you that EVER budget that the president has submitted has been stuck down. Hell Rep. Ryan's budgets have gotten more yes votes than Obama. .

The thing is Congress will always vote for the tax increases to come first before any cuts in spending. Republican or Dem. It almost like it doesn't matter.

[SoCalBronco]

Dem/Lib are about to put up that BS graph "showing" reduction of the federal budget. First of all they forget to tell you is that the graph is based on "base line budgeting. Second, they forget to tell you that EVER budget that the president has submitted has been stuck down. Hell Rep. Ryan's budgets have gotten more yes votes than Obama. .

The thing is Congress will always vote for the tax increases to come first before any cuts in spending. Republican or Dem. It almost like it doesn't matter.

I don't think they have to choose which goes first, Hobo. It can all be part of a budget package and when they had PayGo rules you had to figure out how to pay for something thru cuts and increased taxes in advance.

Actually another thing I'd like to see which would help deficit reduction is the cap and trade bill. We have gotten some revenues here in CA from our cap n trade law. In addition to the environmental benefits of reducing carbon, if we can slow the effects of climate change with the caps, it will probably net some savings in terms of avoiding additional federal spending to combat what will likely be a rise in weather related disasters, droughts and hurricanes.

[broncocalijohn]

I don't think they have to choose which goes first, Hobo. It can all be part of a budget package and when they had PayGo rules you had to figure out how to pay for something thru cuts and increased taxes in advance.

Actually another thing I'd like to see which would help deficit reduction is the cap and trade bill. We have gotten some revenues here in CA from our cap n trade law. In addition to the environmental benefits of reducing carbon, if we can slow the effects of climate change with the caps, it will probably net some savings in terms of avoiding additional federal spending to combat what will likely be a rise in weather related disasters, droughts and hurricanes.

You kidding me with the cap n trade bs! Wait a few years when part of the whole Environmental Agencies have California paying $9 a gallon.

[Rohirrim]

"Reagan taught us that deficits don't matter." Dick Cheney

[BroncoBeavis]

To his credit, he did make a serious initiative with the Grand Bargain talks. I certainly would be fine with 3 trillion in cuts in exchange for 1 trillion in new taxes. That's very reasonable. House GOP was too greedy.

3T in long term cuts would be terrific....cut, cut, cut. I wish they had accepted Obama's proposal.

If I remember correctly, the "plan" was 1 Trillion in New Taxes now for 2-3 Trillion in Spending Cuts to be named later. (aka never)

We've been down that road before. The tax hikes happen tomorrow. The spending cuts never do.

[pricejj]

What SoCal is referring to is cuts to 'baseline spending increases'. In other words, no cuts at all.

It's not new news that the Socialist Progressive agenda has the US locked into Trillion dollar deficits from now until eternity. Obviously, to anyone with a brain, that's not sustainable.

[BroncoLifer]

We've been down that road before. The tax hikes happen tomorrow. The spending cuts never do.

Correct.

I've seen little evidence that the Republican party is serious about balancing the budget. And zero evidence that the Democrats are serious about it.

[Rohirrim]

Correct.

I've seen little evidence that the Republican party is serious about balancing the budget. And zero evidence that the Democrats are serious about it.

Nobody is going to touch the military/industrial complex. Nobody.

[mhgaffney]

Everything is now predicated on near zero interest rates. (In Europe the rates recently went below zero.)

When they rise, and they will rise, the shyte will hit the fan.

MHG

[24champ]

I don't think they have to choose which goes first, Hobo. It can all be part of a budget package and when they had PayGo rules you had to figure out how to pay for something thru cuts and increased taxes in advance.

Actually another thing I'd like to see which would help deficit reduction is the cap and trade bill. We have gotten some revenues here in CA from our cap n trade law. In addition to the environmental benefits of reducing carbon, if we can slow the effects of climate change with the caps, it will probably net some savings in terms of avoiding additional federal spending to combat what will likely be a rise in weather related disasters, droughts and hurricanes.

Cap and trade is just new taxes and will drive up energy costs for the next fifteen years.

In fact, the price of electricity has already been rising over the last decade, jumping by double digits in many states, even after accounting for inflation. In California, residential electricity prices shot up 30% between 2006 and 2012, adjusted for inflation, according to Energy Department figures. Experts in the state's energy markets project the price could jump an additional 47% over the next 15 years.

The problems confronting the electricity system are the result of a wide range of forces: new federal regulations on toxic emissions, rules on greenhouse gases, state mandates for renewable power, technical problems at nuclear power plants and unpredictable price trends for natural gas. Even cheap hydro power is declining in some areas, particularly California, owing to the long-lasting drought.

"If power gets too expensive, there will be a revolt," Leupp said. "If the state pushes too fast on renewables before the technology is viable, it could set back the environmental goals we all believe in at the end of the day."

http://www.latimes.com/nation/la-na-...ry.html#page=1

In addition, the price hikes will put the squeeze to the middle class in California which is declining in numbers in the state. Cap and trade was to go into effect in Australia but they just scrapped it because there was massive opposition to it once their energy bills went skyrocketing. The same will happen here soon.


Increasing the capital gains tax above 35 percent is also not the answer. Increasing taxes will only further encourage investments overseas. There's a lot of talk in this tread about more taxation, and in your post there's no talk about job creation. Creating jobs will boost revenues for the government. We currently have roughly 90 million people unemployed in this country....90 million people not working.

The U.S. now has 90.6 million "non-institutionalized" men and women over the age of 16 not working—an all-time high. That's 10 million above the 80.5 million when President Obama took office. With total employment at 144.3 million, for every three Americans over the age of 16 earning a paycheck there are two who aren't even looking for a job. That's an ugly portent for American prosperity.

http://online.wsj.com/news/articles/...51843080376798

We need to start making a dent in that statistic, more taxation isn't going to solve that issue and will only exacerbate the problem of revenues. We need to lower tax rates as JFK proposed, similar to the tax reduction act. Cut individual income tax rates across the board, minimally reduce the corporate tax rate and capital gains tax. Our economy is contracting and we need to be proactive to get more Americans employed and having more investments in the country.

[Rohirrim]

More tax cuts for the rich just go into offshore banks. Corporations are sitting on billions. They are not reinvesting that money in the U.S. Cuts lead to less revenue, not more. More unemployment means higher deficits as the tax base shrinks.

There's a wrench in the works. How long it will take the Right Wing in Washington to figure it out is anybody's guess.

[24champ]

Increasing taxes or additional taxes does not increase economic growth nor does it expand the tax base.

Tax increases will only favor big businesses, because they can take the hit and wipe out smaller competitors that will struggle with tax increases. The JFK cuts have lowered unemployment and brought economic growth in subsequent years. The fact is that today's economy is contracting, 90 million plus people are not working and the recovery from the recession has been absolutely dismal.

For economic output to ratchet up to a healthier long-term trend, economists say consumer spending must rise to its prerecession pace of about 3% growth. But five years into the recovery, high unemployment and stagnant incomes continue to restrain the American consumer.

"We just don't see consumer spending coming back to the levels that they were before," Virginia McDowell, chief executive of Isle of Capri Casinos, Inc., recently told investors at a presentation of the company's fourth-quarter earnings. "We continue to get pressured on the top line because our consumer spending habits have changed," Ms. McDowell said.

http://online.wsj.com/articles/u-s-g...ter-1403699600




"Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits… In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now." JFK