Sunday, March 17, 2013
Over the past two years, one issue that has plagued the American political system is that of budgetary negotiations. This general disagreement has caused the US to lose its perfect credit rating, it has promoted artificial spending-suicide mechanisms, and it ultimately has given the American people reason to lose faith in their elected officials. There are politicians on the right screaming apocalyptic predictions about our country's future, and those on the left demonizing Bush tax cuts. We have not reached a point of agreement for any of these dilemmas but instead are met with budgetary proposals from the right and left which appear quite foreign to each other.
One of the most recent proposals up for approval is the "Ryan Budget." (As the chairman to the House Budgetary Committee, Congressman Ryan's name is adopted into every proposal pumped out of the House.) Similar to proposals he has made in the past, this budget is filled with tax breaks, program cuts, and an overal reduction in spending. Republicans proudly publicize this proposal as a serious job creation and deficit reducing plan - but a closer look will show otherwise.
On the matter of spending reduction, it plans to cut $4.6 trillion over the next decade. With the simple - nearsighted and all to common - goal of Republican's to reduce expenditures, this is an accomplishment; but as a responsible plan to improve US economic health, this plan falls flat. Among the unoriginal ideas of how to cut spending, Ryan's plan looks to implement the following: turning Medicare into a voucher program; reforming food stamp and medicaid programs into block grants for states to decide to keep or cut; reducing much of the WallStreet and healthcare reforms enacted over the past five years; and chipping away at federally funded eduction, job training, and scientific research funding. In category of discretionary defense spending Ryan's plan has met Democrats in the isle and placed a cap on expenditures on this item. Concerning tax cuts, this plan looks to cut the top tax rate from 39.8% to 25%... which will most likely prompt a tax increase for middle income families.
The task to cut US expenditures, albiet nobel, is much less simple than Ryan is considering it. Since the end of the Great Recession, the US economic has experienced steady growth of 1-4%. This growth was only reversed in January of 2013, a contraction which was decidedly a result of lowered government spending. Knowing this economic reality, implementing Ryan budget cuts will undoubtably have a reverse-growth effect on the economy in the short and long term.
Concerning tax-cuts, it is amazing to continue to see Republicans purport the economic benefits of the Bush tax cuts. Looking at the growth of the deficit since Bush implemented his tax cut legislation, nearly half of the deficit spending stemmed from Bush-era tax cuts. Claiming to be serious on deficit reduction, but continuing these tax breaks is a ridiculous and hypocritical.
If we are to implement this vague and misguided Republican policy, the ramifications we be felt in short term growth, and long term deficit growth. Consensus can be met in responsible spending reduction and logical tax policy; unfortunately, this budgetary choice is neither.