Federal Budget Follies

This is pretty dry reading as is anything that uses lots of numbers, but its important for you to know this stuff. Why? Because I say so. You need any more incentive?

With the baby boomers’ retirement fast approaching, these past several years would have been a good time for federal policymakers to put the government’s fiscal house in order by reducing the national debt. Instead, they expanded it.
At the end of fiscal year 2006, the national debt stood at roughly $4.8 trillion. The Congressional Budget Office estimates that $2.3 trillion, or nearly half of the debt, was the result of tax cuts and spending increases approved by Congress and the Administration since January 2001.

Sad to say, but the nation would be in much better shape today if Congress had left the budget on automatic pilot for the past six years.

Where did that $2.3 trillion go? A bit over half of it went to tax cuts, and another third went to increased spending for defense, homeland security, and international affairs (primarily the wars in Iraq and Afghanistan), according to CBO data. Only 6 percent of the $2.3 trillion represents increases in domestic discretionary programs, the part of the budget some have mistakenly claimed is “exploding.”

Moreover, since the bulk of the tax cuts went to households with higher incomes, the tax cuts not only worsened the nation’s budgetary situation but also widened the growing gulf between the best-off households and all other Americans. This Center report provides the details. [emphasis miine]

And that, folks, is one way you destroy a nation.

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