A Few Words on the U.S. Budget, Deficit, and Stimulus Package

The U.S. budget for the 2013 fiscal year (which for the U.S. government runs October 1, 2012 to September 30, 2013) is about $3.8 trillion of which about $2.45 trillion is for nondiscretionary spending (social security, medicare, medicaid, children's health insurance, interest on the national debt, and TARP/stimulus), and about $1.35 trillion is for discretionary spending (military and numerous other smaller discretionary). The U.S. national debt is $16.16 trillion, which, of course, has been accumulated over many years. The 2013 budget has a $246 billion (i.e. $.25 trillion) deficit (and so will add that amount to the existing debt); roughly the same amount is being paid in 2013 in interest on the existing debt.

The United States is slowly, ever so slowly, climbing out of the deep worldwide recession. About seven years ago it was evident that President G.W. Bush's economic approaches had put the US economically in trouble, the nation needed a large stimulus package, and the Republicans opposed it . Our stimulus was too small, but it was something. Europe did not take this approach overall, the prime exception being Iceland. Europe is still deep in trouble, the prime exception being Iceland. Among other things, the Republicans opposed aggressive funding of TARP and a bailout of the United States automobile industry, most of which was repaid ahead of schedule.

The are three principal ways for the U.S. to improve its budget (i.e. to eliminate its yearly deficits and pay down its debt): (1) raise more revenue by imposing more taxes (the leading theory for doing that is to return taxes on the wealthy to their higher historical levels); (2) reduce expenditures (the only significant way that can be done as to discretionary spending is to reduce military spending); and (3) to stimulate the economy. That's where the stimulus package comes in. The Republicans, again, oppose all three of these measures.

Some of this post appeared previously in my post Why I am Not a Republican and is posted here as part of my 2012 election series.