Wednesday, February 02, 2005

Tax(cut) and Spend,Spend,Spend Republicans

GAO forum, first section, titled Today’s Fiscal Policy Is Unsustainable:

In the long term, current fiscal policy is unsustainable, and the sooner we
change course, the better. GAO3 and the Congressional Budget Office4
(CBO) agree that addressing the long-term fiscal challenge will require
fundamental changes. These changes could include changes in policies,
process, transparency, and enforcement mechanisms. A key question is,
“How much time remains before action must be taken?”


In fiscal year 2004, the federal budget deficit increased and the long-term
outlook worsened significantly. The unified deficit was $413 billion, or
about 3.6 percent of the economy.
This deficit includes $151 billion in
Social Security surpluses, without which the deficit would have been that
much larger
Indeed, the on-budget deficit for fiscal year 2004 was
$568 billion, or 4.9 percent of gross domestic product (GDP). Fiscal year
2004’s deficit followed upon several years of increasingly negative federal
fiscal outcomes.
(Emphasis Mine)

Note: The last sentence, in a "fair and balanced manner", neglects to mention the fact that prior to the "several years", there were several other years (known as the Clinton Years) where federal fiscal outcomes were not only decreasingly negative, they even became increasingly positive. Well, anyway, read on...

In addition, as the Fiscal Year 2004 Consolidated Financial Statements of
the U.S. Government show,8 in fiscal year 2004 the federal government
added $13 trillion in new liabilities, unfunded commitments, and other
principally due to the new Medicare prescription drug
.9 The federal government’s net liabilities, unfunded commitments,
and other obligations now amount to more than $43 trillion, or about
$350,000 for every full-time worker, and these unfunded commitments are
growing larger every day.
(Emphasis Mine)

If we assume that all tax cuts remain in effect rather than expire as
scheduled under current law, and if we further assume that for the first 10
years discretionary spending grows with the economy rather than at the
rate of inflation, a dramatically different picture emerges.
This simulation
is called “Discretionary Spending Grows with the Economy and All
Expiring Tax Provisions are Extended.” (See fig. 2.) Under this alternative
simulation, by 2040 the government would have only enough money to pay
interest on the federal debt

My interpretation, "if the current group of fiscally irresponsible Republicans maintain their control of the legislative branch, government will be so burdened by spending obligations that eventually our government will run out of money to pay for any programs.

Economic growth can help improve the long-term fiscal outlook, but it
cannot solve the long-term fiscal problem
. A “status quo” fiscal policy is
not an option. The sooner we take action, the better. The sooner we act,
the sooner the miracle of compound interest can work for us rather than
against us.

In other words, you can stick a fork in that supply-side economics theory, Mr. GOP. It's done.

This is something that I think Democrats should be pounding the GOP with. No Republican candidate ever resists the temptation to point his/her finger at a Democrat opponent and pronouce the immortal curse (say it with me now, you know it by heart):


I have never seen/heard any Democrat point to their Republican counterparts and accuse them of being part of the "Tax-cuts-for-the-elites-and-Bankrupt-the-USA-GOP"!!!
Hmmm...maybe someone else out there could come up with something that rolls of the tongue a little smoother.



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