Tuesday, March 1, 2016

Everyone whines about the US deficit

But nobody running for president talks about how to reduce it.  It's very simple, Uncle spends more than he takes in with taxes.  So Uncle borrows whatever to make up the difference.  So far, Uncle has borrowed a total of one year's output of the entire US GNP, call it $17 trillion. 
  The only way to reduce the deficit is to hike taxes (highly unpopular with everyone) or cut spending (highly unpopular with those on the federal teat).  Nobody wants to talk about either alternative except The Bern, who wants some good old fashioned soak-the-rich taxes.  Trouble with soak-the-rich taxes, is we will all be rich in a few years from inflation.  So soak-the-rich today means soak everybody tomorrow.
   Since the people on the federal teat are less than everybody, it's more politically possible to cut spending than to hike taxes.  Although it still ain't easy.
   If we are gonna cut spending, it makes sense to start with the biggest money suckers, namely Medicare, Social Security, and perhaps Medicaid.  The US spends 19% of GNP on health care, twice as much as any other country in the world.  Some investigation ought to reveal how decent first world countries like Canada, Britain, France, Germany and a bunch of others get by spending half what we do.  Naturally the doctors, the drug companies, the insurance companies, and the hospitals will scream bloody murder when Uncle does a little cost cutting, but let 'em.  They don't have that many votes. 
   Social Security (the third rail of American politics, touch it and die) is harder.  Cutting retiree's social security benefits would create a nationwide firestorm against those stupid enough to try it.  But Social Security pays out a lot in "Survivors Benefits" and "Disability Benefits" which could be tightened up somewhat.  Even a small cut in a big program would save serious money.
  And nobody running for president is talking about any of this.  Wimps. 

No comments: