Below is a quote from the Congressional Budget Office (CBO) that describes the current budgetary problem facing the country if we do nothing, including not enacting the above mentioned fiscal cliff agreement.
“… the persistence of large budget deficits and rapidly escalating federal debt would hinder national saving and investment, thus reducing GDP and income relative to the levels that would occur with smaller deficits. In the later part of the projection period (2022), the economy would grow more slowly … and interest rates would be higher. Ultimately, the policies… would lead to a level of federal debt that would be unsustainable from both a budgetary and an economic perspective.”
“We currently spend more on defense than the next 13 countries combined. Defense spending accounts for about 20 percent of all federal spending — nearly as much as Social Security, or the combined spending for Medicare and Medicaid. The sheer size of the defense budget — $680 billion in the current fiscal year — suggests that it should be part of any serious effort to address America’s long-term fiscal challenges.”
The defense budget for China, the country with the next largest budget, is a little over 20% of ours. Our nation cannot do everything that it desires. We must ration our resources. Below is a chart showing how our government spends its dollars. We need to decide how to rearrange our priorities.
Our future depends as much on education as it does defense. We need to improve the knowledge level of our citizens or we continue to decline in power and influence. For the defense of our countries position in the world, we need to reduce our budget for defense and transfer much of that reduction to education, research, development and infrastructure. We no longer can be the military of the West.
With limited resources we must collectively decide how much are we willing to help our less fortunate citizens. Further, what demands should we place on those who are less fortunate to help themselves dig out of poverty? Everyone agrees that each individual should provide for themselves whenever possible. The debate is going to center around “whenever possible”.
We cannot agree on a plan to solve these problems by December 31, 2012. Therefore, we should extend the payroll tax extension, eliminate the Bush tax cuts for the top 2%, implement expense cuts that can be agreed on and set a new date to address the bigger problems by March 31, 2013.