Below is a very biased article but I am going to attempt to provide analysis that wades through the spin.
TRANSPARENCY ALERT: WHAT I BELIEVE -
My attendance of the "Concorde Coalition's 'Fiscal Wakeup Tour' almost 5 years ago has reset my perspective. Long before any candidates for 2008 stepped up to the plate they told the audience the "job #1" for the next President will be to honestly level set with the American people. They argued that for America to delay the "day of reckoning" of its fiscal collapse Americans are going to have to:
- Expect LESS from Government
- Pay MORE in taxes until this crisis is abated.
I personally believe that more taxes are required to abate the situation that is growing BUT history shows that if spending cuts are not cemented beforehand - the increased flow of tax money in will be used to feed the furnace with the insatiable appetite. People argue that these two points are not mutually exclusive. The fraudulent accounting of the federal government where a "spending cut" is not real - mandates that legitimate cuts be made as a necessary first step.
Further the notion of ORGANIC GDP GROWTH as a means of revenue increase (See Bill Clinton's term) must be focused upon. No longer can we accept promises of "spending as investments" without employing some intermediate checks (earnest money) along the way. No individual or corporation would keep pumping "investment dollars" into a portfolio that is not providing sufficient returns that they inspect in the spirit of defending their own interests. When it comes to government money - "Federal Treasury Raiders" from the right and the left always throw in some diversionary theories to compel us to take our eye off of the bottom line (example: "Social Justice" or "National Defense").
The Associated Press Article
The Associated Press tries hard to tie the "Bush Era Tax Cuts" as the main culprit. In doing so they can't bring themselves to explain the (estimated) $850 billion in shortfall once we take away the 'Bush Tax Cuts" as a source of "revenue loss".
This all comes down to one's view on spending and taxes.
- Tax Cuts create deficits because the government does not have the revenues necessary to prevent deficit
- Spending over and above the tax revenue digest, without curtailing the demanded "standard of living" per the concepts of "social justice" creates deficits
It is clear that the AP favors the first bullet point as they said little about how the failure to control spending, adjusting the expectations of Americans downward, in line with the actual revenues. This coupled with a firm belief in PRIVATE PROPERTY RIGHTS that would make a 90% marginal tax rate on ANYONE a confiscatory violation of democratic and constitutional standards.
The previous research of the so-called "Bush Era Tax Cut" "cost" the federal government a total of $1.8 trillion over 10 years. This is about $180 billion per year. Let's round this up to $200 billion per year going forward.
If this is the impact of these "Tax Cuts For The Rich" why then did the Associated Press refer to them as the primary accelerator of the national debt but not the unmentioned $900 billion that remains on the table?
The longer we continue the course of "spending beyond our means" and "taxes that don't match the crisis" -the more assured that we will have a fatal failure in the future will be made so.
Associated Press story
WASHINGTON — A new budget report released Tuesday predicts the government will run a $1.1 trillion deficit in the fiscal year that ends in September, a slight dip from last year.
The Congressional Budget Office report also says that annual deficits will remain in the $1 trillion range for the next several years if Bush-era tax cuts slated to expire in December are extended, as commonly assumed.The report is yet another reminder of the perilous fiscal situation the government is in, but it's commonly assumed that President Barack Obama and lawmakers in Congress that little will be accomplished on the deficit issue during an election year.
The first wave of statements from lawmakers had a familiar ring as each party cast blame on the other.
"Four straight years of trillion-dollar deficits, no credible plan to lift the crushing burden of debt," said House Budget Committee Chairman Paul Ryan, R-Wis., "The president and his party's leaders have fallen short in their duty to tackle our generation's most pressing fiscal and economic challenges."
"We will not solve this problem unless both sides, Democrats and Republicans, are willing to move off their fixed positions and find common ground," said Senate Budget Committee Chairman Kent Conrad, D-N.D. "Republicans must be willing to put revenue on the table."
The CBO study also predicts modest economic growth of 2 percent this year and forecasts that the unemployment rate will remain above 8 percent this year and next. That is based on an assumption that President Barack Obama will fail to win renewal of payroll tax cuts and jobless benefits by the end of next month.
That jobless rate is higher than the rates that contributed to losses by Presidents Jimmy Carter(7.5 percent) and George H.W. Bush (7.4 percent). The study predicts unemployment to remain above roughly 5 percent — until 2016. The agency also predicts that unemployment will remain at 7 percent or above through 2015
The new figures also show that last summer's budget and debt pact has barely made a dent in the government's fiscal woes.
The pact imposed $2.1 trillion in spending cuts over 10 years, but lawmakers are already talking about easing across-the-board spending cuts required under the agreement. The latest estimates predict $11 trillion in accumulated deficits over the 2013-2022 time frame if the Bush-era cuts in taxes on income, investments, large estates and on families with children are renewed. Obama has proposed largely extending them, but allowing them to expire for upper-income taxpayers.
Last year, Obama and House Speaker John Boehner, R-Ohio, tried but failed to reach a "grand bargain" on the deficit, an effort that got hung up over taxes and cuts to major benefit programs like Medicare. A subsequent attempt by a congressional "supercommittee" to find smaller saving sputtered over the same issues.
What's left is a heap of unfinished business that comes to a head at the end of the year: expiring tax cuts and painful across-the-board cuts to the Pentagon and many domestic programs. To top it off, another politically toxic increase in the debt limit will be needed at some point shortly after the November elections.
The deficit would require the government to borrow 30 cents of every dollar it spends. Put another way, the deficit will reach 7 percent of the size of the economy, a slight dip from last year's 8.7 percent of gross domestic product.
The CBO report shows that the deficit dilemma would largely be solved if the tax cuts enacted in 2001 and 2003 — and renewed in 2010 through the end of this year — were allowed to lapse. Under that scenario, the deficit would drop to $585 billion in 2013 and to $220 billion in 2017.
But expiration of those tax cuts would slam the economy, CBO said, bringing growth down to a paltry 1.1 percent next year.ar but still very high by any measure.