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| Economy |
| Bankruptcy could be good for America |
| 2010-01-12 |
| In Winnie-the-Pooh, there is a significant moment when the bear is asked whether he wants honey or condensed milk with his bread. He replies "both". You can get away with this sort of thing if you are a much loved character in children's literature. But it is more problematic when great nations start behaving in a childish fashion. When Americans are asked what they want -- lower taxes, more lavish social spending or the world's best-funded military machine -- their collective answer tends to be "all of the above". The result is that the US is piling up debt. A budget deficit of about 12 per cent of gross domestic product is understandable as a short-term reaction to a huge financial crisis. What should worry Americans is that, with entitlement spending set to surge, there is no credible plan to bring the budget deficit under control over the medium term. The US has formidable strengths that will allow its government to be profligate for far longer than other nations could get away with. But if the US keeps running huge deficits, sooner or later the country will start flirting with bankruptcy. Oddly, it might be best if the crisis came sooner rather than later. For a surprising number of countries, running out of money has been the prelude to national renewal. |
| Posted by:Steve White |
| #6 If you check your 1040s that just arrived in the back is the break out of Federal Income and Outlays for 2008. Social Security, Medicare and other retirement 37% - 1 National Defense, veterans, and foreign affairs 24% - 2 Social Programs 20% - 3 Physical, human and community development 8% - 4 Net interest on the debt 8% Law enforcement and general government 2% 1-These programs provide income support for the retired and disabled and medical care for the elderly.* 2-About 20% of outlays were to equip, modernize, and pay our armed forces and to fund the Global War on Terrorism and other national defense acitivities; about 3% were for veterans benefits and services; and about 1% were for international activities including military and economic assistance to foreign countries and maintenance of US embassies abroad. 3-About 14% of total outlays were for Medicaid, food stamps, temporary assistance for needy families, supplemental security income, and related programs; and the remaining outlays were for health research and public health programs, unemployment compensation, assistance housing and social services. 4-These outlays were for agriculture; natural resources; environment; transportation; for elementary and secondary education and direct assistance to college students; job training; deposit insurance, commerce and housing credit, and community development; and space, energy and general science programs. * military retirement is carried in the national defense budget. |
| Posted by: Procopius2k 2010-01-12 08:50 |
| #5 Where do you put the interest on the debt? |
| Posted by: Bobby 2010-01-12 06:01 |
| #4 non-defense discretionary spending is about half the non-entitlement budget. problem is that entitlements make up about 2/3 of the total budget. |
| Posted by: abu do you love 2010-01-12 03:57 |
| #3 How does defense budget compares, size-wise, to social (vote buying) budget? |
| Posted by: g(r)omgoru 2010-01-12 02:19 |
| #2 Disarmament is not an option in a free republic. Given the behavior of our courts & elected "leaders" I'd say that the US is no longer a free repulic so if that's the only bar to disarmament .... |
| Posted by: AzCat 2010-01-12 01:33 |
| #1 The problem with the list of items "bankrupting" the United States is the only one of them, defense spending, is constitutionally permitted. Some financial blogs I have read suggest that the US can't afford all this spending and, amazingly enough, they thus advocate disarmament of the US as a solution to US financial problems. Disarmament is not an option in a free republic. Social Security is an option. PBS is an option. National Endowment for the Arts and Humanities is an option. The US Department of Education is an option. And on it goes. So bankruptcy may be good for the nation, but let us first try eliminating ( not cutting ) whole programs, before we declare bankruptcy, and thus open the gates to the barbarians. National defense is never a choice, so nor should be survival of the US. |
| Posted by: badanov 2010-01-12 01:23 |