AFTER THE RECESSION, A BALANCED BUDGET
When President Clinton left office in 2001, America had a balanced budget: income equaled expenditures. President Bush cut income (taxes) and raised expenditures, creating a massive deficit budget. In 2008 the great recession hit, further cutting income, and, in response, Bush and President Obama thought it was wise to increase expenditures to seek to soften the recession. The deficit soared.
If it is true that President Obama seeks to eventually move us back towards the balanced budget days in the late 1990s, then income must rise and expenditures fall. If we continue to rise out of this recession, then taxes will rise as personal and corporate income rises. When the recession is over, the “stimulus” spending will end with it. When the wars end, spending should decrease. Then all we have to look at to balance the budget are three things:
(1) we must decide if part of the spending budget will include paying down the national debt;
(2) we must decide if part of the spending budget will include cuts in entitlements;
(3) we must decide if part of our income will be new taxes, or the repeal of some or all of the Bush tax cuts.
In my opinion we should weather the deficit spending until we are clearly out of the recession—which must include a rise in employment. We all borrow money when we have to, and it’s not improper for the federal government to borrow money now.
However, when the recession is over, we must not ignore the national debt. Paying it down must be included in our expenditures. That’s the way families insure their financial futures, and common sense says that that’s the way governments should operate, too.
Entitlements have to be analyzed objectively and honestly. There are so many stories of the federal budget subsidizing out-of-date operations that we simply must not treat pet projects of a powerful representative as sacred cows. We need to trim the fat. Furthermore, we must end contracts that make people rich. No one should get rich from government contracts. That’s the people’s money, and it is being abused.
Tax income will rise once the recession is over, plus states, because of they have to balance their budgets, will have already raised taxes. Should the federal government raise taxes? I think we should look at this after we have truly been honest and tough with spending cuts. Long-term government spending is the real problem, not income.
I believe that the missing ingredient in this agenda is courage. Cutting spending after the recession ends, including debt reduction in the future budget, and considering raising taxes secondary to pet project cuts will require a level of political courage—which means the courage to do what’s right when it might mean you are voted out of office—that our representatives usually don’t have.
We can hope, though, can’t we?