There is Not A Spending Problem

There is a line that gets bandied around by Republicans when talking about the debt: “It’s a spending problem” they yell, “spending needs to be reigned in. It isn’t taxes, it’s spending!”

Where is the truth in that? When asked repeatedly, Romney could offer no specifics of spending cuts. Democrats gleefully assumed it was because any proposed cuts would hurt the middle class and thus lose him votes. When Obama asked for spending cuts again from Republicans, they too refused to come up with anything. You would think that if government was just “wasting” money, you could point to those places.

Let me suggest why there are no spending cut specifics…there is no extra spending to cut. Admittedly, you can fidget with some numbers, find a few million here and there. In the end  though, there is no minor cut that can make a dent in the deficit.  Most of what the Simpson Bowles suggestions for discretionary cuts have already been put in place. Which leaves cutting some big chunks, out of the costliest parts of our budget, as seen here:

Image

Where is the spending problem in this graph? If you’re a conservative, you may point at Social Security and Medicare/Medicaid. Yet really, are these a “spending problem”? These programs have mostly been paid for. Unlike defense spending, most and nearly all of Social Security and Medicare/Medicaid is already covered in our budget. Because we pay for them from our payroll checks. For the most part, they add zero dollars to the deficit.

I will admit, each of these programs have long term issues that could eventually lead to big problems, but the issue is not “government largess” it is about systematic issues. The reason Social Security is unsustainable, is not because of mismanagement, it isn’t because of spending. It’s just the birth rate. No one anticipated that there would be a baby boom followed by unprecedented low birth rates. Medicare is a similar story, medicare is a great program that’s helped millions…but the price of health care is just getting too high. It’s increasing at a level much higher than inflation. No one anticipated that kind of health care cost.

So, when conservatives talk about a spending problem, it’s a problem based on unforeseen circumstances, with entitlement programs which generally don’t add much to the deficit. You could say there is a cost problem, but there is not a spending problem.

What’s left that we can really point to to prove that there’s a spending problem? Is it really the measly amount we give to the arts or NPR? Is it really small inefficiencies? Instead, I would say that it is about unavoidable recession conditions, defense costs which are pure spending in the budget, along with the lowest tax rate in 30 years.

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