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I keep hearing Republicans say that government should do what us citizens do and spend only what we take in and that we must have a Constitutional Amendment to enforce a balanced budget. I call bullshit on that.
First, when things get tight in the American home we not only reduce spending we find more income. Anybody reading this ever held more than one job? Yet Republicans absolutely refuse to increase revenue; not just tax increases but closing loop holes that give away tax income. Our government should look very seriously at increasing taxes and other revenues.
Second, we Americans do not operate on a balanced budget; we use deficit spending all the time. When we buy homes, cars or get an education we borrow money to do so. If there is an emergency we borrow to cover it. We do what we have to do and figure out how to pay for it later. Our government must be able to do the same. If government is restricted by law to spending only what it takes in how will it respond to another Katrina, wildfires in Texas or a drought that has every county in Texas declared a Federal disaster area? How will it respond to foreign attacks on our soil like 9/11? There are very good reasons that a Balanced budget amendment has not been enacted in the 233 years our country has existed.
A few facts for you to consider as Congress debates cuts and revenues:
Since 1980 taxes from businesses have fallen from 2.5% of GDP to 1.4%. That’s roughly a $400 B a year loss even as profits and bonuses have soared to record highs.
Overall revenues have fallen from 18% of GDP to 14%, a 27% decrease and the lowest % GDP since 1950. Four % of GDP is $750 B a year.
$400 B in the form of plastic wrapped pallets of one hundred dollar bills has disappeared in Iraq.
The Defense department spends more on air conditioning in Iraq and Afghanistan than the entire 2010 NASA budget.
Pentagon spending has risen to $680 B a year, more than the total of all other military spending in the world, yet we can’t win a war in a country that has no army.
Social Security has a $2.7 T surplus. It has not added and, by law, cannot add to the deficit. By law the revenues supporting it must increase or payments from the fund decrease when the surplus is depleted.
Medicare taxes have not increased from the 1.5% of wages set in 1965. Health insurance costs have increased by 10-30% annually.
*Sources: CBO, GAO and SSA.gov reports.
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