I recently read and heard some awful bunkum about the need to slash the Federal deficit. It did not come, as it usually does, from conservatives. It was, in fact, the proposed Federal budget President Barack Obama just presented calling for $1 trillion in deficit reductions over the next 10 years–largely, it appears, on the backs of the non-affluent.
Among the reductions he is seeking is $2.5 billion in cut in spending on a program that helps poor people heat their homes.
Due the bad economy, about 8.3 million households used this assistance in fiscal 2010, up from 5.8 million in fiscal 2008, according to the National Energy Assistance Directors Association. But Obama’s budget would commit half the amount set aside for this program in 2009. That’s not what one wants to hear after the brutal winter most Americans have been experiencing. Perhaps Obama is thinking is that since poor people are used to suffering, what difference does it make if they freeze a little more next year?
Among other awful proposals, the budget calls for cuts to assistance to students pursuing graduate studies, reductions in help to states for environmental programs such as water treatment projects and reductions to community organizing assistance. That last one is especially ironic in view of the fact that Obama’s role as a community organizer helped start his political career.
All this comes mere months after Obama and Congress approved extending tax cuts for the wealthiest Americans, which alone increased the deficit by more than $500 billion.
Call me insane, but I do not share the widespread terror of deficits. Apparently, many politicians on the right don’t, either, as their unhesitating push for unwarranted tax breaks for their wealthiest constituents shows.
The Republicans have their own budget proposals. Sen. Rand Paul (Ky.) has recommended spending cuts of $500 billion for FY 2011, while Rep. Michele Bachmann (Minn.) would slash more than $400 billion.
They could find very little to cut out of defense spending, by the way. And reduce subsidies to Big Oil? Fahgettaboudit!
Yes, the expected Federal deficit will reach $1.6 trillion this year, according to the Wall Street Journal, and yes, that is a record for us, although not if inflation is taken into account. It is a far less alarming figure when we bear in mind that it amounts to 59% of our gross domestic product (GDP). This is well below that of such reasonably prosperous nations as the U.K. (public debt at 76.5% of GDP), Germany (74.8%), Austria (68.6%), and the Netherlands (64.6%), according to data compiled by the Central Intelligence Agency.
Take a look back to World War II, when the economy was fairly thriving, and you can see that the Federal debt has been higher–actually at one point in the mid-1940s, over 100% of GDP, although admittedly that was a time when we were struggling to overcome powerful enemies.