Post by Admin on Sept 17, 2012 17:06:00 GMT -5
What is the deficit?
The deficit is the difference between revenue and spending in a given fiscal year.
Say you are fairly blessed with generous incomes, however like many Americans you spend beyond your means (hypothetically only, of course). Like with America, when we as individuals or families overspend we have to make up that balance by borrowing or going without certain things. Sometimes we borrow using credit cards which can have unbelievable high interest rates.
In fact many of the places that the middle class turn to for help in tough times are industries deregulated under conservative stewardship and are the same industries that led to predatory lending, ponzi schemes, and scams of the sort. This deregulation arguably is responsible for billions in losses by consumers and ordinary investors over the last decade alone.
So let's take a look at your families annual finances on a basic scale.
Salary & Other Revenue: $ 1,500,000
Bills and Discretionary Spending: -$ 1,950,000
Unpaid balance -$ 450,000
-----------------------------------------
Salary & Other Revenue: $ 1,500,000²
Bills and Discretionary Spending: -$ 1,950,000²
Unpaid balance -$ 450,000 ²
-----------------------------------------
Revenue: $ 2,250,000,000,000*
Spending: -$ 3,802,500,000,000*
Unpaid balance -$ 1,100,000,000,000*
Hmm, is this starting to look familiar?
* These numbers only approximate estimates within a few percent.
-----------------------------------------
Actual 2010 Budget of the United States federal government
Total Revenue: $ 2,165,000,000,000
Total Expenditures: -$ 3,721,500,000,000
Unpaid balance -$ 202,500,000,000.
So this obviously doesn't look good any way you slice it but also like in our daily lives our spending is not always the problem. The cost of certain things that we need like fuel for our cars and energy to warm our homes is becoming more and more expensive even though our salary increases aren't matching these increases in the middle class. That is one of our main problems and it has been for over a decade. I have been saying this since before the tragic events of September 11th, 2001. In fact it was June of that year when then President George W. Bush signed in to law the Economic Growth and Tax Relief Reconciliation Act of 2001. Between this and the Jobs and Growth Tax Relief Reconciliation Act of 2003 are the single biggest factors for why the United States is in the debt it finds itself in today.
Let's look at a few things these two Acts did to chop tax revenue at a time when we are entering two wars without any justified manner of payment for the incredible expenses of a prolonged military engagement which Bush wanted to go alone in Iraq.
Capital gains tax rate prior to Bush tax cuts (2000) – 10%
EGTRRA (2001) – 8%
JGTRRA (2003) – 5%*
* It is relevant to note that capital gains are slightly higher for people in higher income brackets, although these were also reduced under the Bush tax cuts. Also, capital gains tax rate for those paying 15% income tax bracket was eliminated in 2008 through a type of sunset provision in the Bush tax cuts.
There are other crucial events and policies that must be addressed that will affect our future one way or the other. Some might have you believe otherwise but there is a way to solve this problem without completely gutting social programs that do so much good for the underprivileged in this nation.
Setting the budget is more than just adding and subtracting numbers. It's more about setting national priorities for social agendas and beyond that our social agendas have a ripple effect across democracies throughout the world. We will now examine several critical policy decisions that would need to be addressed immediately upon a new President taking office.
The deficit is the difference between revenue and spending in a given fiscal year.
Say you are fairly blessed with generous incomes, however like many Americans you spend beyond your means (hypothetically only, of course). Like with America, when we as individuals or families overspend we have to make up that balance by borrowing or going without certain things. Sometimes we borrow using credit cards which can have unbelievable high interest rates.
In fact many of the places that the middle class turn to for help in tough times are industries deregulated under conservative stewardship and are the same industries that led to predatory lending, ponzi schemes, and scams of the sort. This deregulation arguably is responsible for billions in losses by consumers and ordinary investors over the last decade alone.
So let's take a look at your families annual finances on a basic scale.
Salary & Other Revenue: $ 1,500,000
Bills and Discretionary Spending: -$ 1,950,000
Unpaid balance -$ 450,000
-----------------------------------------
Salary & Other Revenue: $ 1,500,000²
Bills and Discretionary Spending: -$ 1,950,000²
Unpaid balance -$ 450,000 ²
-----------------------------------------
Revenue: $ 2,250,000,000,000*
Spending: -$ 3,802,500,000,000*
Unpaid balance -$ 1,100,000,000,000*
Hmm, is this starting to look familiar?
* These numbers only approximate estimates within a few percent.
-----------------------------------------
Actual 2010 Budget of the United States federal government
Total Revenue: $ 2,165,000,000,000
Total Expenditures: -$ 3,721,500,000,000
Unpaid balance -$ 202,500,000,000.
So this obviously doesn't look good any way you slice it but also like in our daily lives our spending is not always the problem. The cost of certain things that we need like fuel for our cars and energy to warm our homes is becoming more and more expensive even though our salary increases aren't matching these increases in the middle class. That is one of our main problems and it has been for over a decade. I have been saying this since before the tragic events of September 11th, 2001. In fact it was June of that year when then President George W. Bush signed in to law the Economic Growth and Tax Relief Reconciliation Act of 2001. Between this and the Jobs and Growth Tax Relief Reconciliation Act of 2003 are the single biggest factors for why the United States is in the debt it finds itself in today.
Let's look at a few things these two Acts did to chop tax revenue at a time when we are entering two wars without any justified manner of payment for the incredible expenses of a prolonged military engagement which Bush wanted to go alone in Iraq.
Capital gains tax rate prior to Bush tax cuts (2000) – 10%
EGTRRA (2001) – 8%
JGTRRA (2003) – 5%*
* It is relevant to note that capital gains are slightly higher for people in higher income brackets, although these were also reduced under the Bush tax cuts. Also, capital gains tax rate for those paying 15% income tax bracket was eliminated in 2008 through a type of sunset provision in the Bush tax cuts.
There are other crucial events and policies that must be addressed that will affect our future one way or the other. Some might have you believe otherwise but there is a way to solve this problem without completely gutting social programs that do so much good for the underprivileged in this nation.
Setting the budget is more than just adding and subtracting numbers. It's more about setting national priorities for social agendas and beyond that our social agendas have a ripple effect across democracies throughout the world. We will now examine several critical policy decisions that would need to be addressed immediately upon a new President taking office.