WASHINGTON — The latest budget impasse ushered in a new round of austerity Saturday, with the nation facing reduced federal services, canceled contracts, and layoffs. But on paper at least, President Obama and Congress have reduced projected deficits by nearly $4 trillion over a decade — the goal for stabilizing the national debt.
The spending cuts that began to take effect Friday — known as sequestration and totaling about $1 trillion through 2023 — come on top of $1.5 trillion in reductions that Obama and Congress committed to in 2011, mainly from the accord that averted the nation’s first debt default.
Comments
Tax reform needs to be done, it should be done seperately from any crisis, the republicans have said loopholes need to be closed.
Last time I looked Bohener said he wasn't closing anything nor seeking any form of tax revenue.
Let's see if I've got this right... The Federal government is borrowing over 1 Trillion a year to cover their additional spending. Now they just raised taxes on everyone in January and in March they have to cut 85 Billion or around 4.5% of discretionary spending. So, they end up borrowing less to finance their deficit spending and this is somehow a problem for the economy, just don't get it...*&!!@###
Obama has stated that no deal will be made unless we INCREASE YOUR TAXES again, again and again...The Senate democrats have a plan, but it has no real spending CUTS only more taxes!!#$!!!^ Enough is enough on the FAIR SHARE Obama plan, cut Federal government spending NOW...
Actually Obama hasn't increased your taxes again and again unless your a millionaire commenting on the BG comment section. Revenue increases sought the last time I looked were in closing loopholes on yachts, private jets and corporate loopholes. If you have any of these you really should be using them as opposed to commenting.
If one can't figure out how reductions in federal spending effect the economy then I'm not sure if you understand economics at all. But hey, this isn't about economics or jobs, is it? This is about ideology and when it comes to ideology rationality flies out the window and if others get hurt as long as it isn't you, who cares.
This whole debate has spiraled downward to the point where I am no longer sure why certain folks hate Obama, certain folks hate Boehner and how reality has become tortured to the point that facts no longer matter. This particular article states some agreed upon facts, yet some will simply say, "That's not true" because it doesn't fit what they want. Austerity fails in Europe but others would say it is exactly what we should do. Why not? It won't hurt the economy. I am no longer sure what you say to such nonsense. Except knock yourself out.
The Sequester (which is properly called the SCAREquester) only slows down the RATE OF INCREASE of every federal department's budget. Look up the term "Baseline Budgeting" on the Internet. You won't find the term here because the Globe doesn't want you to know about it. ..But what Obama is doing, in a nihilistic fashion, is make sure that the cuts that are being made are not to department parties, junkets, goldfish research, or 10 people doing the same job under different job titles. But to make sure that the cuts hurt the American people of a people.
You'd be correct except for the fact that the baseline for this year or what I would have budgeted for this year is already written in. The sequester effects not next years budget but this one. Federal expenditures are generally front loaded so I would be taking the cut from the back-end which has a heavieer effect.
Simply because I think this particular cut is ill advised doesn't mean I don't support budget cuts. I in fact support cuts to entitlements and their reformation. I also support tax reform. But stupid is as stupid does and these cuts are stupid.
The reporter has failed to account for the effect these spending cuts will have on the overall economy, which is still not strong enough to make up for the reduced economic activity as a result of these cuts. As a result, the economy will slow down, tax revenue will fall, and the deficit may actually increase.
A plan of targeted spending cuts and judicious tax increases (you know, the one the Republicans have said they will never pass) will decrease the deficit without slowing down the economy.
Are our houses, condo's, and cars entitlements? Is our homeowner's insurance an entitlement? How about our life insurance? No? You mean if it's something you pay for and eventually own or receive a payoff from it's not an entitlement? So, how then is Social Security or Medicare (the FICA payment on your payroll taxes) an entitlement?
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Sloppy language and thinking often lead to incorrect conclusions, Jackie.
Whether or not deficit reduction is a good thing to do at this point in the afttermatch of the economic crash of 2008, over 2009-2012 Obama has steadily and substantially reduced the US Federal deficit since he took office.
US government deficits by year
2007 $0.2 trillion (Bush, pre-crash)
2008 $0.5 trillion (Bush, pre-crash)
2009 $1.4 trillion (Bush/Obama, post-crash)
2010 $1.3 trillion (Obama, post-crash)
2011 $1.3 trillion (Obama, post-crash)
2012 $1.1 trillion (Obama, post-crash)
http://www.nytimes.com/2012/10/13/business/federal-deficit-for-2012-fiscal-year-falls-to-1-1-trillion.html?_r=0
http://www.usgovernmentspending.com/federal_deficit_chart.html
What I find extremely frustrating about this article is that it does not distinguish between the deficit and the accumulated national debt, and more importantly, it does not cite which "economists and market analysts" have been urging deficit reduction over the next decade of this magnitude. We have no way of evaluating the premise of the claim that deficit reductions are needed here and now while we are still in recession.
Conservatives are using the crisis as a pretext to cut Social Security and Medicare, which are paid for through dedicated taxes (so it is misleading to label them as "entitlements"). In terms of effects on the economy, in contrast to big defense spending, these programs efficiently recycle dollars into the economy (the money is spent immediately), so that demand is boosted most, dollar per dollar.
The smart thing to do economically is to raise revenue by restoring equitable tax rates for those who can afford it, and to avoid cutting income from retired people who will spend it all immediately.
1. Institute the Buffet Rule, that overall tax rates for those with incomes above $1 million/year should never be less than 30% of total income.
2. Tax capital gains the same as earned income.
3. Disallow carried interest deductions
4. Tax all bonuses above $10,000 at 50%
5. Cap the value of all deductions at $1 million
6. We should strongly consider a 1%/year tax on accumulated wealth above $10 million that is earmarked to pay down the national debt.
7. The size of our Federal government should be fixed at a constant fraction of GDP -- this should be our goal, and this value should always be reported when we discuss levels of govt spending.