Friday, November 5, 2010

Why the Next Congress won't Fix the Deficit

The WSJ has an article about what percentages of your taxes the federal government spends on what programs.  There's an attached table showing two hypothetical families.  This table shows that the first 44% of our tax dollar goes to (in descending order) Social Security, Medicare, Medicaid, and Interest on the National Debt.  The next 18% pays for the military (they broke it down into the categories of non-Iraq/Afghanistan operations, Iraq/Afghanistan operations, personnel, weapons, and research).  That's 62% of tax revenue right there; in order to cut the deficit we'll either need to make deep cuts in everything else or cut some of this stuff out.

There are a few things on the list that I think should have been gone a long time ago.  For instance, Headstart (which sounds nice in theory but, in practice, does not change educational outcomes) takes up .2% of our tax dollars.  Agriculture subsidies take up .3%, and, as a sustainable farmer, I'm telling you that the number one thing we could do to improve farming practices in this country is to cut this subsidy.   But there's a lot of stuff on the list I don't want to give up, like federal highways (which make up 1% of our tax dollars).  So we can't just cut "everything else" and call it good.

So basically, to live within our means, we need to cut either social programs, military programs, or both. Given the powerful interests behind both that are entrenched in Washington, how likely do you think substantive cuts in these areas are right now?  Basically, we're going to be wallowing in debt until the pain of the debt is greater than the pain of cutting these programs.  Here's hoping we're Greece and not Zimbabwe!