Poll: Will the US cut spending?

[REWahoo]

With all the recent news coverage on the Deficit Panel recommendations, I'm curious to know what action, if any, the forum readers believe Washington will take regarding the financial future of the US.

 

[aaronc879]

The problem with cutting expenses at a federal government level is that you need people on both sides of the isle to agree which almost never happens. Republicans will decline pretty much anything a Democrat proposes no matter how good it is and it's not much better the other way. If I had the budget in front of me I guarantee I could have a surplus immediately. It's not that hard but it won't happen with the mindset of the politicians in office today.

 

[M Paquette]

The Congresscritters will bloviate, and the talking heads will rant. A proposal to ban earmarks will eventually pass, once enough key Senators attach their earmarks to it. Many committee meetings will be held. Hundreds of dinners shall be hosted by lobbyists, who did grin, and the Congresscritters did feast upon the lambs and sloths and carp and anchovies and orangutans and breakfast cereals, and fruit bats and large chu...

Meanwhile, the economy will quietly improve, and as a result, tax revenues will rise. Various programs set in motion during the recession will wrap up, and interest, dividends, and repayments will accrue, which will cause the deficit to be slightly less than static projections done with poor assumptions would forecast.

Assorted politicians will then take credit for this wonderful, magical deficit reduction, and extrapolating from one data point, will predict that the problem has been solved.

They're all too busy campaigning for the 2012 election to actually DO anything.

 

[Independent]

With the "stimulus bill" running out, maybe unemployment compensation going down, and maybe the war in Afghanistan slowing down, it will be hard to establish a baseline to figure out if Congress really reduced on-going spending.

I think they will do some largely symbolic things, but nothing major. They might put Social Security, Medicare, veterans benefits, much of Defense, and interest payments "off the table", and then say they cut 5% of the rest.

 

[Alan]

I think they will do some largely symbolic things, but nothing major.

I agree. We still have 2 more years of electioneering ahead of us.

 

[youbet]

I agree. We still have 2 more years of electioneering ahead of us.

And if we do well enough to survive those 2 yrs and continue as a country, they'll be 2 more yrs of electioneering followed by 2 more years of electioneering followed by 2 more years of electioneering...... well you see what I mean.......

 

[samclem]

There's going to need to be a crisis before painful steps are taken. The crisis will likely come when creditors begin to have doubts about receiving the payment they are due. Even the slightest doubts will send interest rates up, and as leveraged as we are, things will rapidly deteriorate. That's a crisis, and, unfortunately, one without a convenient tangible rallying point (no flaming, collapsing WTC, no USS Arizona settling to the bottom of Pearl Harbor, etc). It's easier with a tangible enemy, as it gets us out of the chocks quickly and with determination. This time we'll have a few years of finger pointing and indignation before getting beginning the long trudge back.

We could save a lot of heartache by beginning today, but we're just not set up to do it.

 

[REWahoo]

We could save a lot of heartache by beginning today, but we're just not set up to do it.

So far [-]94%[/-] [-]95%[/-] [-]93%[/-] 92% of those responding to the poll agree with you.

 

[MichaelB]

I think our political leadership will get around to slowing down spending and even reduce some. It's just that, well, that requires a set of skills they don't currently have, so they first have to learn how. Seriously. I'm not sure there is a Governor or State with a record of holding down spending either - as one digs into the detail, lots of budget tricks appear.

Maybe we should send them over to UK and Germany for a lesson.

 

[Alan]

And if we do well enough to survive those 2 yrs and continue as a country, they'll be 2 more yrs of electioneering followed by 2 more years of electioneering followed by 2 more years of electioneering...... well you see what I mean.......

Yes, one of the surprising things I found when I moved to the USA is that the term for a Congressman is a mere 2 years and there are no limits of when you can campaign. (In the UK, campaigning is only allowed in the 5 or 6 weeks prior to a General Election which is usually once every 4 or 5 years). When it comes to macro economics, what can you really achieve in 2 years (minus all the time out campaigning) ?

 

[REWahoo]

When it comes to macro economics, what can you really achieve in 2 years (minus all the time out campaigning) ?

Alan, you can achieve a lot - of damage.

 

[scrabbler1]

There's going to need to be a crisis before painful steps are taken. The crisis will likely come when creditors begin to have doubts about receiving the payment they are due.

This is sorta like what happened in New York City back in the mid-1970s. The banks which had been lending money to NYC all the time just shut their windows because of NYC's awful fiscal practices. This sent NYC on the brink of bankruptcy, requiring drastic remedies and a restructuring of NYC's debt (Re: Felix Rohatyn).

If our foreign lenders start doing what the NYC banks did back in the mid-1970s, that will be a crisis-causing event as you wrote.

The Feds often look to the states as "laboratories for experimentation" but they should also take heed at l"aboratory of failure" such as what happened in NYC back then.

 

[Alan]

Alan, you can achieve a lot - of damage.

Very true - like a big change to try and make things happen quickly.

 

[samclem]

I'm not sure there is a Governor or State with a record of holding down spending either - as one digs into the detail, lots of budget tricks appear.

Well, I'm sure there are some skeletons in the closet, but Indiana seems to be doing something right according to this article about their governor:.

Daniels trimmed the state payrolls by 14 percent and Indiana now has fewer state employees than it did in 1982. Daniels eliminated a $200 million deficit and transformed it into a $1.3 billion surplus, boosting the state's bond rating and cash reserves after eight years of unbalanced budgets. He was able to cut property taxes by an average of 30 percent despite a Democratic-controlled lower house of the legislature, delivering the largest tax cut in Indiana history.
Under Daniels, all state agencies were made to cut their budgets by 10 percent and Indiana sold two-thirds of its state-owned airplanes. Most state employees didn't get pay raises in 2009 or 2010 and the governor's pay was cut. But more than 50,000 low-income Hoosiers received health coverage through a relatively free-market reform -- the Healthy Indiana Plan -- that combined health savings accounts with catastrophic insurance (though the program's health savings accounts may now run afoul of ObamaCare's new qualified coverage standards).

Governor Daniels balanced the budget and has a 70% approval rating.

Look to Europe--mein Gott!

He's also got some experience in actually running an organization, which I think an increasing number of people now recognize to be an important skill in an elected leader.

 

[MichaelB]

Well, I'm sure there are some skeletons in the closet, but Indiana seems to be doing something right according to this article about their governor:.

Governor Daniels balanced the budget and has a 70% approval rating.

Look to Europe--mine Gott!

He's also got some experience in actually running an organization, which I think an increasing number of people now recognize to be an important skill in an elected leader.

Samclem, I'm not challenging your post but I would need to see real numbers. My understanding is Gov Daniels reduced proposed spending but real spending has increased, the budget is balanced by dipping into reserves, and Indiana has increased it's borrowing. I think the efforts of Govs like Daniels and Christie are notable but are baby steps compared with the task ahead.

As for Europe, I was referring not to their unbridled socialistic ways but the recent examples of UK and Germany political leadership in challenging themselves and others to greater fiscal and monetary responsibility.

 

[W2R]

I am braced for some sort of major budget cut that happens to affect me, to hit me in the stomach like a sucker-punch. It may not happen but I'm ready. See? ~~~>

 

[RonBoyd]

When it comes to macro economics, what can you really achieve in 2 years (minus all the time out campaigning) ?

Just look around.

 

[obgyn65]

+1

I think they will do some largely symbolic things, but nothing major. They might put Social Security, Medicare, veterans benefits, much of Defense, and interest payments "off the table", and then say they cut 5% of the rest.

 

[harley]

I couldn't vote. IMO the best we're going to get is a decrease in the rate of increase of spending. Over (a long) time as the economy recovers the increase in income will decrease the increase in spending and bring the deficit back into a reasonable range.

 

[DblDoc]

I think our political leadership will get around to slowing down spending and even reduce some. It's just that, well, that requires a set of skills they don't currently have, so they first have to learn how. Seriously. I'm not sure there is a Governor or State with a record of holding down spending either - as one digs into the detail, lots of budget tricks appear.

Maybe we should send them over to UK and Germany for a lesson.

Or do a gov't swap with Iceland for a year...

DD

 

[samclem]

I couldn't vote. IMO the best we're going to get is a decrease in the rate of increase of spending. Over (a long) time as the economy recovers the increase in income will decrease the increase in spending and bring the deficit back into a reasonable range.

This could work if interest rates don't rise. But when they do, that mountain of debt we keep pushing down the road is going to grow faster than our economy can.

 

[M Paquette]

Yes, one of the surprising things I found when I moved to the USA is that the term for a Congressman is a mere 2 years and there are no limits of when you can campaign. (In the UK, campaigning is only allowed in the 5 or 6 weeks prior to a General Election which is usually once every 4 or 5 years). When it comes to macro economics, what can you really achieve in 2 years (minus all the time out campaigning) ?

Just think what it would be like if we happened to have the British law for our elections. Specifically, Section 106 of the Representation of the People Act 1983:

http://www.judiciary.gov.uk/Resources/JCO/Documents/Judgments/judgment-oldham-election-05112010.pdf

1. This is the Judgment of the Court.
2. In the General Election held on 6 May 2010 Philip Woolas (“the Respondent”), who was the sitting MP for Oldham East and Saddleworth (“OES”), retained his seat, defeating his nearest rival, Robert Elwyn Watkins (“the Petitioner”), by 103 votes. The Respondent was the candidate of the Labour Party. The Petitioner was the candidate of the Liberal Democratic Party.
3. By a petition issued pursuant to section 120 of the Representation of the People Act 1983 (RPA 1893) the Petitioner has contested the result of the election. He alleges that the Respondent was guilty of an illegal practice contrary to section 106 of the RPA 1983, namely, before the election and for the purpose of affecting the return, he made or published several false statements of fact in relation to the Petitioner’s personal character or conduct which he had no reasonable grounds for believing to be true and did not believe to be true.
4. The alleged false statements of fact were published in three election addresses sent to voters shortly before the election. These election addresses were drafted by members of the Respondent’s election team. The Respondent made suggestions as to what should and should not be in the addresses and approved them in their final form to ensure that they contained nothing objectionable. He has accepted responsibility for them. He said that he was aware that there was a prohibition against making false statements in relation to a candidate’s personal character or conduct but he denied that the election addresses evidenced any illegal practice contrary to section 106 of the RPA 1983.
5. If he is guilty of an illegal practice then section 159(1) of the RPA 1083 requires that his election shall be void. In addition he will be incapable of being elected to the House of Commons for three years; see section 160(4) and (5).
6. Section 106 and its predecessors have governed what may and what may not be said during an election campaign since 1895.

Tell a stretcher in a campaign, lose the election, and be banned for the next three years!

Phil Woolas – a former Government Minister - was ejected from parliament today after a court ruled he had breached election laws by falsely claiming his Liberal Democrat opponent had "wooed" extremist Muslims in the run-up to Britain’s General Election in May

On second thought, the candidate would just run clips of himself kissing babies. Some completely unconnected PAC would tell the whoppers. Never mind.

I can't wait to see all the claims of cuts accomplished by various Congresscritters, while government spending mysteriously continues to rise. As long as the talk about cuts sounds sufficiently truthy, I'm sure it will all work out OK. Truthiness counts as revenue, right?

 

[REWahoo]

Oh, and for the four of you who at this point voted you expect 'significant cuts', I offer this as evidence you might be a bit too optimistic:

NEW YORK (CNNMoney.com) -- When House Democrats return to Washington on Monday, a top priority will be putting a $250 dollar check in the mail to 58 million Social Security recipients.

Democrats plan to vote early in the lame-duck session on a bill that would provide Social Security recipients with a one-time payment, according to the office of Earl Pomeroy, a Democrat from North Dakota who authored the legislation.

The bill -- with a total cost of roughly $14 billion -- is designed to make up for another year without an increase in Social Security benefits.

 

[fisherman]

The Congresscritters will bloviate, and the talking heads will rant. A proposal to ban earmarks will eventually pass, once enough key Senators attach their earmarks to it. Many committee meetings will be held. Hundreds of dinners shall be hosted by lobbyists, who did grin, and the Congresscritters did feast upon the lambs and sloths and carp and anchovies and orangutans and breakfast cereals, and fruit bats and large chu...

Meanwhile, the economy will quietly improve, and as a result, tax revenues will rise. Various programs set in motion during the recession will wrap up, and interest, dividends, and repayments will accrue, which will cause the deficit to be slightly less than static projections done with poor assumptions would forecast.

Assorted politicians will then take credit for this wonderful, magical deficit reduction, and extrapolating from one data point, will predict that the problem has been solved.

They're all too busy campaigning for the 2012 election to actually DO anything.

+1

 

[chinaco]

I did not vote because the correct option is missing.

They will adjust spending and taxes in some combination of ways that will keep the US stable economically.

Look for higher taxes, reduced benefits (for almost all programs that provide services to people), and reductions in other govt spending.