By Bill WilsonAll budget-cutting proposals currently being discussed will do nothing to eliminate the $1.3 trillion annual budget deficit any time soon. The Simpson-Bowles Commission does not foresee a balanced budget until 2037. House Republican proposals to reduce non-defense discretionary spending to FY 2008 levels will save perhaps $66 billion.
These proposals essentially accept that mandatory spending remains at its current $2.1 trillion level, continuing to grow on an annual basis. Without making cuts in so-called mandatory programs, it is impossible to balance the budget. In fact, the entire non-defense discretionary budget of $553 billion could be eliminated, and the budget deficit would still be about $747 billion, as noted by the blog, Mish’s Global Economic Trend Analysis.
A reader, David, writes to Mish, “I went back to the data after getting into one too many arguments with people who claim that we can solve our budgetary problems by eliminating government ‘waste’ — the programs that study the sex lives of jellyfish and that sort of thing — without real cuts in entitlement programs.”
David continued, “Unless the Budget Fairy waves her magic wand, it’s not going to happen.”
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