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This was written as an opinion piece by a member of US Message Board, JimofPennslyvan. It captures the basis for the Tea Party protests [then and now in 2012], and is a good outline of the dangers that lie ahead. You may also want to look at this link: http://www.shadowstats.com/alternate_data

2010 Budget Blueprint Overspends
in a Long-Term Dangerous Manner

The 2010 Budget bills in both the House and the Senate are extremely bad pieces of legislation for America. The spending levels in these bills are massively irresponsible for their large increases at this time when are country is facing record deficits.

The level of budget deficits both bills plan to bring about are not in line with ordinary Americans values which hold that it is not right for the U.S. government to stick future generations of Americans with the bill for massive spending today that is not necessary.

The Senate bill which plans for lower deficits compared to the House bill projects a $663 billion dollar budget deficit five years out with that fifth year deficit being the lowest over the five year period. What is further alarming is the size of budget deficits the spending level in these bills will bring to America past the five year projection point in these bills; examining assessments done by the Congressional Budget Office reveals that yearly budget deficits, at these bills’ spending levels, will increase steadily past the five year period reaching levels of a trillion dollars a year ten years out.

The U.S. government can’t continue to generate these levels of deficits and leave future generations of Americans to pay these bills, the American people can’t and won’t allow it.

These kinds of deficits are not only morally wrong and unfair to future generations of Americans who will have to pay the interest and principal on the debt needed to fund these deficits, but it is extremely dangerous to the long-term well-being of the American people and economy.

The resulting huge increases in government burrowing will reduce capital available for private investment as that capital goes to buy U.S. treasury bonds. It will drive up interest rates for private burrowing as these interest rates on private burrowing will have to be higher than would ordinarily be the case to attract capital away from government bonds to private investment.

[All of this will impair] private burrowing [and] will result in less private sector jobs and less wealth being accumulated by Americans in the private sector. Moreover, all this increase in government burrowing will increase the interest rates on government bonds as the Treasury has to offer higher interest rates to attract the needed volume of investment and this problem could get dramatically worse if foreign investors and/or foreign governments decide they don’t want to cooperate or cooperate as needed by the U.S. government to buy U.S. treasury bonds.

This rising of the interest rate the U.S. government will have to pay to burrow money will mean that the interest payments on the national debt will increase that means there will be less money available to help Americans pay for college, provide low-income housing, medical research and things like that.

All these negative repercussions of increased U.S. government burrowing will cause the value of the dollar to drop against foreign currencies. America imports a lot of commodities from foreign countries, a drop in the dollar will cause these commodities to be more expensive.

In addition, with the instability of the dollar this will almost certainly cause many foreign countries and foreign businesses to switch from the dollar as their standard to another currency like the euro.

[This] will weaken the U.S. economy as it will no longer hold its appeal to foreign individuals, foreign businesses and foreign countries as it had, not to mention how it will hurt America from the standpoint that when an American or an American business do business with any of these foreign entities these entities will want the standard to be a foreign currency not the dollar thus making it more costly and unpredictable for Americans and American businesses to operate.

One helpful step Congress could take to stop the large increases in government spending is make it clear in each years budget how the Congress is expanding the base line spending from the previous year.

Currently, Congressional budgets don’t do that. They use inflated numbers for the current years budget so that the next years planned budget increases don’t look that large. The inflated numbers for spending in the various areas of government spending are because of emergency spending or one-time spending legislation which occurs over the course of the year.

For example, the recently passed $ 787 billion stimulus legislation is emergency legislation that will inflate the numbers in various areas of government spending for FY 2009 such as education and transportation so that for the FY 2010 budget the proposed FY 2010 spending increases in these areas won’t look as bad compared to if the base line spending for the current year was used.

Forcing Congress to show in the budget legislation how they are increasing base line spending from one year to the next will put pressure on Congress to hold down spending increases because it will be crystal clear how members of Congress are increasing spending and members of Congress opponents in upcoming elections can hold these members better accountable to their constituents for excessive spending.

Considering the fact that most American family incomes if they rise at all this year will rise at between two to five percent and the fact that the current and projected U.S. government deficits are unaffordable for the American people, the U.S. government should keep its spending increases for the FY 2010 budget in this five percent maximum increase range.

The Democrat Chairman of the Senate Budget Committee described the FY 2010 budget authority increases in his chambers budget bill for discretionary non-military spending at seven percent, this is wrong it is too high. I wouldn’t be surprised at all if in future Congressional elections members of Congress who voted for passage of such a bill pay a price for that vote.

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