Deficits and Balanced Budgets
My lack of posts here about the debt ceiling and annual budgets is not lack of interest. Previously I posted mainly in the Mensa Forums, but now I’m turning my attention to my web site.
It’s interesting to look at what would have to happen to make the Republican Balanced Budget Amendment enforced for the 2012 budget (from a watchdog site). The column on the left is the 2012 budget as it currently stands. It calculates that 29% comes from deficit financing (which is unsustainable as well as a reaction to the Great Recession). In the right column, I stripped out some line items, just to see how we might get to a balanced budget.
If we funded only defense, healthcare, pensions, and interest in the 2012 Budget, we would still have a deficit of $210.9M.
The consequences of such drastic cuts would be felt beyond the GDP which would sink back into recession and possibly depression. Imagine the chaos in the streets and the loss of future productivity by reducing funding for schools.
|2012 Proposed Budget
The entire budgetary argument is hobbled because budgets are yearly income-outgo documents. No business budgets its year without considering the effect on its net worth. Spending this year that builds the asset base for the future is essential investment that doesn’t pay for itself in one year’s budget.
Photo of chart with growing line by Isaac Smith on unsplash.com