This blog is devoted to fiscal and economic issues facing the U.S. Both the Trump Administration and the Democrats are working to speed up economic growth and I believe there is a good chance that this will happen.
However there is not nearly enough interest in addressing an even bigger problem: our national debt, is now larger, in relative terms, than at any time since the end of WWII.
This is a very difficult political problem because elected representatives would much rather say yes than say no to new programs and more spending. It is even more difficult to try to restrain the growth of, let alone cut, existing programs.
The Congressional Budget Office has recently published a long list of possible ways to decrease federal spending (or increase federal revenues) over the next ten years. It is interesting to pull out several of these suggestions to see what can be accomplished:
Program 10 year savings
- Eliminate concurrent receipt of retirement pay and disability $139 billion for veterans.
- Use an alternative measure of inflation to index mandatory $182 billion
- Reduce funding for International Affairs Programs. $117 billion
- Limit highway funding to expected highway revenues. $40 billion
- Reduce the size of the federal workforce through attrition $50 billion
- Reduce funding for grants to state and local governments $56 billion
- Impose caps on federal spending for Medicaid $680 billion
- Increase premiums for Medicare Parts B and D from 25% to $331 billion 35% of cost.
Total $1595 billion
Conclusion. This brief list of budget restraints would reduce deficit spending by about $160 billion per year. This is significant but not nearly enough compared to the projected deficit of $685 billion for just the 2017 fiscal year alone. About 2/3 of the savings come from the two entitlement programs of Medicare and Medicaid. The idea here is to give specific examples of the sort of changes which will be necessary to seriously confront our debt problem.