iHaveNet.com
Achieve Balanced Federal Budget Through Spending Restraint | Economy
Online Breaking News Headlines Single Source to Headlines Breaking News Current Events Top Stories. Find out what is happening in News & the World. Check out iHaveNet.com for the latest news & current events articles plus Movie Reviews, Wolfgang Puck Recipes, NFL Previews Analysis and Politics. Your Single Source to News Articles, Current Events & Reviews.
  • HOME
  • WORLD
    • Africa
    • Asia Pacific
    • Balkans
    • Caucasas
    • Central Asia
    • Eastern Europe
    • Europe
    • Indian Subcontinent
    • Latin America
    • Middle East
    • North Africa
    • Scandinavia
    • Southeast Asia
    • United Kingdom
    • United States
    • Argentina
    • Australia
    • Austria
    • Benelux
    • Brazil
    • Canada
    • China
    • France
    • Germany
    • Greece
    • Hungary
    • India
    • Indonesia
    • Ireland
    • Israel
    • Italy
    • Japan
    • Korea
    • Mexico
    • New Zealand
    • Pakistan
    • Philippines
    • Poland
    • Russia
    • South Africa
    • Spain
    • Taiwan
    • Turkey
    • United States
  • USA
    • ECONOMICS
    • EDUCATION
    • ENVIRONMENT
    • FOREIGN POLICY
    • POLITICS
    • OPINION
    • TRADE
    • Atlanta
    • Baltimore
    • Bay Area
    • Boston
    • Chicago
    • Cleveland
    • DC Area
    • Dallas
    • Denver
    • Detroit
    • Houston
    • Los Angeles
    • Miami
    • New York
    • Philadelphia
    • Phoenix
    • Pittsburgh
    • Portland
    • San Diego
    • Seattle
    • Silicon Valley
    • Saint Louis
    • Tampa
    • Twin Cities
  • BUSINESS
    • FEATURES
    • eBUSINESS
    • HUMAN RESOURCES
    • MANAGEMENT
    • MARKETING
    • ENTREPRENEUR
    • SMALL BUSINESS
    • STOCK MARKETS
    • Agriculture
    • Airline
    • Auto
    • Beverage
    • Biotech
    • Book
    • Broadcast
    • Cable
    • Chemical
    • Clothing
    • Construction
    • Defense
    • Durable
    • Engineering
    • Electronics
    • Firearms
    • Food
    • Gaming
    • Healthcare
    • Hospitality
    • Leisure
    • Logistics
    • Metals
    • Mining
    • Movie
    • Music
    • Newspaper
    • Nondurable
    • Oil & Gas
    • Packaging
    • Pharmaceutic
    • Plastics
    • Real Estate
    • Retail
    • Shipping
    • Sports
    • Steelmaking
    • Textiles
    • Tobacco
    • Transportation
    • Travel
    • Utilities
  • WEALTH
    • CAREERS
    • INVESTING
    • PERSONAL FINANCE
    • REAL ESTATE
    • MARKETS
    • BUSINESS
  • STOCKS
    • ECONOMY
    • EMERGING MARKETS
    • STOCKS
    • FED WATCH
    • TECH STOCKS
    • BIOTECHS
    • COMMODITIES
    • MUTUAL FUNDS / ETFs
    • MERGERS / ACQUISITIONS
    • IPOs
    • 3M (MMM)
    • AT&T (T)
    • AIG (AIG)
    • Alcoa (AA)
    • Altria (MO)
    • American Express (AXP)
    • Apple (AAPL)
    • Bank of America (BAC)
    • Boeing (BA)
    • Caterpillar (CAT)
    • Chevron (CVX)
    • Cisco (CSCO)
    • Citigroup (C)
    • Coca Cola (KO)
    • Dell (DELL)
    • DuPont (DD)
    • Eastman Kodak (EK)
    • ExxonMobil (XOM)
    • FedEx (FDX)
    • General Electric (GE)
    • General Motors (GM)
    • Google (GOOG)
    • Hewlett-Packard (HPQ)
    • Home Depot (HD)
    • Honeywell (HON)
    • IBM (IBM)
    • Intel (INTC)
    • Int'l Paper (IP)
    • JP Morgan Chase (JPM)
    • J & J (JNJ)
    • McDonalds (MCD)
    • Merck (MRK)
    • Microsoft (MSFT)
    • P & G (PG)
    • United Tech (UTX)
    • Wal-Mart (WMT)
    • Walt Disney (DIS)
  • TECH
    • ADVANCED
    • FEATURES
    • INTERNET
    • INTERNET FEATURES
    • CYBERCULTURE
    • eCOMMERCE
    • mp3
    • SECURITY
    • GAMES
    • HANDHELD
    • SOFTWARE
    • PERSONAL
    • WIRELESS
  • HEALTH
    • AGING
    • ALTERNATIVE
    • AILMENTS
    • DRUGS
    • FITNESS
    • GENETICS
    • CHILDREN'S
    • MEN'S
    • WOMEN'S
  • LIFESTYLE
    • AUTOS
    • HOBBIES
    • EDUCATION
    • FAMILY
    • FASHION
    • FOOD
    • HOME DECOR
    • RELATIONSHIPS
    • PARENTING
    • PETS
    • TRAVEL
    • WOMEN
  • ENTERTAINMENT
    • BOOKS
    • TELEVISION
    • MUSIC
    • THE ARTS
    • MOVIES
    • CULTURE
  • SPORTS
    • BASEBALL
    • BASKETBALL
    • COLLEGES
    • FOOTBALL
    • GOLF
    • HOCKEY
    • OLYMPICS
    • SOCCER
    • TENNIS
  • Subscribe to RSS Feeds EMAIL ALERT Subscriptions from iHaveNet.com RSS
    • RSS | Politics
    • RSS | Recipes
    • RSS | NFL Football
    • RSS | Movie Reviews

ECONOMICS | EDUCATION | ENVIRONMENT | FOREIGN POLICY | POLITICS | OPINION | TRADE

U.S. CITIES:  

HOME > USA

Achieve Balanced Federal Budget Through Spending Restraint
Brian Riedl

 

SocialTwist Tell-a-Friend

Washington needs to recall unspent stimulus dollars, repeal Obamacare, and get its fiscal house in order, now

Just two years ago, pundits and politicians pounded George W. Bush for presiding over a "staggering" $458 billion budget deficit. Since then, the deficit has soared -- to $1.4 trillion in 2009 and to $1.3 trillion this year. Merely maintaining current tax-and-spending policies would push the annual deficit to nearly $2 trillion by 2020, and even that ocean of red ink assumes a return to peace and prosperity.

These numbers are unsustainable. Doubling the national debt will significantly harm the economy and place an obscene financial burden on our children and grandchildren.

Much of this election was about our nation's rapidly deteriorating fiscal condition. Fixing the budget is paramount; however, it must be done in the right way. Simply focusing on deficits and aiming to balance the budget without identifying the underlying problem could mean all solutions are treated equally. Yet some solutions, such as steeply raising taxes, can cause more harm than good.

Washington's problem isn't that it taxes too little. Even if all 2001 and 2003 tax cuts are extended, federal revenues are headed back toward 18 percent of the total economy -- the average level for the last 50 years. What's changing is federal spending. Historically, it equals 20 percent of the economy. But now it is projected to top 26 percent by the end of the decade. Spending is the root cause of our spiraling long-term deficits. It's what Congress must tackle to fix the budget.

That's not the only reason to focus on spending restraint. Tax hikes reduce incentives to work, save, invest, and create jobs, which is why no economic theory advocates raising taxes in tough times. The better way to raise revenues is to focus on pro-growth tax policies -- starting with retaining the 2001 and 2003 tax relief -- that can put 15 million unemployed Americans back to work.

Addressing soaring spending begins with reforming Social Security, Medicare, and Medicaid, which (along with interest on the debt) are responsible for nearly the entire rise in long-term budget deficits. Congress should take these programs' spending off autopilot by putting them on long-term budgets. It should then phase in changes such as higher eligibility ages and restructured benefits for upper-income retirees.

While waiting for those reforms, Congress must root out unaffordable spending elsewhere. After expanding the federal budget by $727 billion on everything from education to NASA over the past three years, Congress should be able to cut about half that amount immediately.

They should start by tightening their own belts: freeze federal compensation until it is reformed, cut the bloated federal travel budget, rescind unspent appropriations, and cut Congress's budget. Washington should also recall unspent stimulus dollars; repeal Obamacare; reform farm subsidies; and eliminate small, outdated programs like the Rural Utilities Service.

Spending cuts will not harm economic recovery. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. So the less Washington taxes and borrows, the more businesses and families will have to spend.

In the past decade, inflation-adjusted federal spending has leapt from $21,500 per household to nearly $30,000. Unchecked, it will hit $38,000 per household by the end of this decade. Few taxpayers believe we are getting our money's worth. Unless we want to also tax $38,000 per household, the only way to balance the budget is through spending restraint.

Read why balancing the budget should not be a priority, by Michael Ettlinger, vice president for economic affairs and a tax policy expert at the Center for American Progress.

 

Brian Riedl is the Grover Hermann fellow in federal budgetary affairs at the Heritage Foundation.

 

SocialTwist Tell-a-Friend

 

  • The Consequences of Fiscal Irresponsibility
  • America's Two Economies: Why One Is Recovering and the Other Isn't
  • Michele Bachmann's Plan to Fix the Economy
  • Achieve Balanced Federal Budget Through Spending Restraint
  • Unemployment Trumps the Budget Deficit
  • GDP Now Matters More Than Force: Policy for the Age of Economic Power
  • What Population Growth and Decline Means for the Global Economy
  • Why the Retirement Age Is Increasing
  • Dr. Bernanke's Magic Elixir for the Economy
  • How Quantative Easing 2 Could Affect Your Money
  • QE2: Potential Winners and Losers
  • Globalizing the Energy Revolution
  • Obama's First Stand
  • The Politics of Budget-Cutting
  • America Checks Into Rehab
  • Interest Rates Drop Again But Will Housing Market Perk Up?
  • G20 Summit: Hitting Singles in Seoul

Achieve Balanced Federal Budget Through Spending Restraint

 

(c) 2010 U.S. News & World Report

 

Recommend

Search Powered By Google

Google Search   

Job & Career Search

career & job search                    job title, keywords, company, location

ADVERTISEMENT

POLITICS

Subscribe to Politics

Delivered by FeedBurner


Political Commentary

Advertisement

ADVERTISEMENT

Advertisement

Your Ad Here
Your Ad Here
  • HOME
  • WORLD
  • USA
  • BUSINESS
  • WEALTH
  • STOCKS
  • TECH
  • HEALTH
  • LIFESTYLE
  • ENTERTAINMENT
  • SPORTS

Achieve Balanced Federal Budget Through Spending Restraint

  • Services:
  • RSS Feeds
  • Shopping
  • Email Alerts
  • Site Map
  • Privacy