Posts Tagged ‘future generations’

Fiscal Realities

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Great, succinct post over at Questions and Observations, Where the money goes (h/t Doug Ross).  The highlight is this chart:

budget2

 The data isn’t sourced, but looks about right. The totals pretty much jive with numbers from the White House. The main point is that we are spending more than we are taking in on just mandatory spending and debt service. Both constitutionally and economically, we must first service our debt. So we can’t cut that at all, or for that matter, stop its increase if we continue borrowing, or if the current historically low interest rates should rise. Mandatory spending is spending we are legislatively bound to. It’s mostly entitlements. We’re not going to spend less here unless we change the laws. Further, if the laws don’t change, we will be spending more here as the baby boomers start collecting social security. This leaves defense and all other spending. While these areas can and should be streamlined, they cannot be eliminated and even if they could, we would still be spending more on mandatory spending and debt servicing than we take in. Therefore, short of action, we will need to borrow more and the debt servicing budget will continue to increase in a viscous cycle.

Another note: Nearly one-third of our spending is unfunded. The White House projects our revenue to close the gap with  skyrocketing spending. Not sure how they intend to do that. Hyperinflation?

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