Federal Budget and Tax Info - July 2012 WSJ reference

Federal Budget and Tax information – the real story Posted Originally on July 31, 2012 

There are lots of sources to go to for sorting out the truth about the federal budget, where the money goes, and how much tax we Americans actually pay. The Congressional Budget Office -CBO- is a good source. But, one must be somewhat skilled at interpreting information to get through it all and get the bottom line on these big questions. An easier and more trustworthy source is –suprise, suprise, The Wall Street Journal. David Wessel, long time observer of the federal budget, has published a nice primer, a very short piece that lays out the basic details that are helpful for understanding what is going on.

http://online.wsj.com/article/SB10000872396390444330904577538910083734248.html?

“Everything You Wanted to Know About the Budget but Were Afraid to Ask” is available through the link provided. Here are just a few seminal points. –almost 2/3rds of the budget is never voted on; it is simply money going out the door, infrastructure costs including Medicare, keeping the government running, food stamps, farm subsidies and more. —Here is the basic message on the defense budget, quoting from the article—”About $1 of every $5 the federal government spent in 2011 went to defense, and about 20 cents of that $1 was spent on the wars in Iraq and Afghanistan. In all, the U.S. spends about $700 billion a year on its military” and “The US defense budget is greater than the next 17 country’s budgets combined.” —-One of every four federal dollars today is spent on health care. —-And how does the US pay for this budget? Well, we don’t because “The share of income most American families pay in federal taxes has been falling for more than 30 years” and “the federal government borrowed 36 cents of every dollar it spent last year.” This is the very basic story, and Wessels article is worth reading and worth saving in order to grasp a basic understanding of what is going on with government spending and taxes.

David Stockman and the Bush Tax Cuts

My Letter to the Editor submitted to the Columbus Dispatch on Dec. 28th.  I got a confirmation call back request which is a good sign that it will be published.  Then I backed off a little and resubmitted with one change, inserting Congress in the place of Republican in the last paragraph.  It was slightly too partisan and did not reflect the reality that many of these changes will be supported by Republicans, pushed by the Tea Baggers, and supported by conservative Democrats.  I should have left it alone and not submitted the change, because it was not published.  In any case, it is here to be read by all who visit My View. 

LETTER TO THE EDITOR COLUMBUS DISPATCH  Published Jan. 2011
I am troubled by the tax bill negotiated by President Obama and the Republicans and the threat it portends for the national debt and the ability of government to play a critical role in promoting the well being of our nation. Thankfully my former Republican Congressman, David Stockman, affirms the discontent I am feeling. Stockman was my Congressman in 1979 when I lived in southwest Michigan. Following the 1980 election he was appointed Director of the Office of Management and Budget in the Reagan Administration.

The architect of the Reagan tax cuts is highly critical of the Bush tax cuts, arguing that we are in such serious financial straits with the exploding national debt that they are bankrupting the nation. Stockman says that it was an illusion to think that the Bush tax cuts would pay for themselves. Giving tax cuts, he says, has become a mantra for Republicans, thus destroying the last vestiges of a party that was traditionally in favor of sound money and fiscal restraint. The fiscal situation is so threatening,“it is…unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.” (NYT Stockman Op-ed 07/31/10)

While this legislative compromise to extend the full Bush tax cuts may sustain the economic growth now underway, it will also add an additional 900  billion dollars to the deficit. It contributes to the highest level of US economic inequality since records have been kept. It will become the basis  for Republicans to push for cuts in programs and services that benefit the least well off in our society whose numbers are growing.

Ward Cornett III