Saturday, January 28, 2006

No Really the US Budget is in Bad Shape

The Congressional Budget Office (CBO) is generally a good organization. They say the budget is in good shape to be balanced by 2012. But....The Heritage Foundation says that may be true but the CBO is required by law to make some assumptions which may have an inpact on that prediction.

What are those assumptions? Little things like: no more money for Iraq or Afghanistan or for US Gulf Coast reconstruction. Those things certainly couldn't have a budget impact now could they? So they recomputed the CBO's estimates with corrections for these assumptions. Instead of a balanced budget by 2012 they see a $805 billion deficit in 2015, that's $6,500 per household.

The Heritage Foundation says the problem isn't revenue as much as spending and the real problem is Medicare, Medicaid and Social Security. Now I remember the President having a plan to fix Social Security, I hated his plan, but he did offer one. The mechanism the Democrats used to combat the plan was to say Social Security was not broken. I didn't agree with that then and I don't agree with it now.


Anonymous said...

Shocking that the Heritage Foundation thinks the problem is spending on social programs, not tax cuts for the Rich. Why don't you quote them on your post about global warming. see what they have to say about it ( I can't see how you can give someone credit for coming up with a plan that makes something worse.

Howard said...

Yeah I know. Still I've blamed the President for a long time for not submitting budgets that include spending for Iraq and other things. If CBO's math is wrong as a result of regulations, I think it should be fixed.

I never did follow the logic of how adding in Iraq, Afgahnistan and Gulf Coast costs means entitlements are the problem, and I should have looked into it more before posting. Thanks for calling me on it.

I do believe Social Security will break because of population trends. This might fix itself in a generation or two (I think the youngest generation is bigger than the baby boomers) but I don't think ignoring the problem is the right thing. Fine it was a strategy to prevent something that probably would have been worse, but as is common for the democrats, it's not offering a solution.

Anonymous said...

Some democrats did offer plans, but they party as a whole wanted Bush to drop his insistence on private accounts.

Interesting read