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Americans used to talk about the goal of balancing the Federal Budget. Just a decade ago, that briefly became a reality. Even after that with $150 billion dollar deficits, there were always realistic options that could have closed the gap. No longer. If you ever wanted to know what would actually have to happen to curtail our ridiculous accumulation of debt, here's 7 extreme measures that individually still wouldn't balance the budget. That's how ridiculously in debt we really are. Read this article to find out how you would be affected. It's not pretty.
The FY 2011 projected federal budget deficit is $980 billion and the President's request creates a deficit of $1.27 Trillion. Believe it or not that is actually less than FY 2010. A recent Congressional Budget Research memo looked at how we could actually balance the budget. Here's some of the ugly options.
1. No Military:
If the entire military and all national security were eliminated and not a dime was spent on either of these in FY 2011, we would still run a budget deficit of about $100 billion. This is of course not counting the increased unemployment that would have to be paid to all the fired employees and the fact that we would have zero defenses. Realistically, the military is going to either need to be smaller or fewer weapons will need to be produced. If you work in the Defense industry or you are in the military, eventually, you will be affected.
2. Eliminate Every Other Discretionary:
If every program and agency outside of the Military, Social Security, Medicaid, and various other non-discretionary programs were eliminated, we'd still run a deficit of about $500 billion dollars. Think about it. Every National Park, government funded hospital, every health program, our entire space program, all subsidized housing, and any work done on any federal highway would be eliminated and we'd still have a deficit greater than any deficit prior to 2008.
3. Across the Board
Even if you took the simplistic approach and said, just cut everything evenly, you'd have to hack every budget by 35% just to get to breakeven. What would that mean? If you received a $1,600 Social Security check, the government would have to cut that to $1,040. If you were a soldier making $50,000 a year, you'd be cut down to $35,000. Medicare payments would need to be slashed proportionately which would make doctors even less interested in working with Medicare patients.
4. Raising Taxes
Why not just tax the rich or for that matter everybody? You'd have to raise the tax burden about 80% to balance the budget and assume that this would have no impact on the economy. For instance, if you were used to paying a 25% federal marginal income tax rate, you'd need to fork over 45% for the government to balance the budget and in the proposed Presidential budget, you'd need to shell out about 55%. The reality of course is that most households are strapped at current relatively low tax levels and an increase in taxes would correspond to a decrease in consumption.