Economy

Deficit Decreasing, Yet is Still a Deficit

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The American Enterprise Institute posted a chart and small post, showing that the deficit is decreasing,  but might not be the case for long, as social security and healthcare programs like Medicare and Medicaid are expanding. Budget chief Douglas Elmendorf says that in order to address the budget problems, “we need to cut back on those programs or increase tax revenue to pay for (Social Security and healthcare programs).” Seems simple enough, but when you get into it, neither of those solutions are going to go over well. Tough for the politicians that have to make the decision.

But don’t go feeling sorry for politicians, they are the ones who got us into this mess. Social security was doomed to begin with and after almost a century of the program we are just now starting to do something about it? And whose bright idea was it to expand healthcare programs. Twice a month I pay into these programs, knowing that I will never see a dime of that money again. Either we can start limiting these programs now, and upset people that have already paid into them, or wait for them to go bankrupt and for us all to get screwed. At this point, it doesn’t really matter to me.

To some, the solution is pretty apparent, we should just tax rich people and corporations more, and then we can increase revenues and keep everyone happy! Except for those of us that want to keep our jobs, buy things at reasonable prices, and have a retirement. When corporations, both public and private, are taxed higher, then a company has a few options. They can charge more for the product to keep the same profit margin (which alienates customers and decreases the bottom line anyway. They can accept lower profits, which hurts investors, namely those of us who have any sort of retirement plan. Or, they can look for other ways to save money, like firing people.

So basically it is all going to pot, and there is nothing we can do about it, because a deficit, no matter how small, is still a deficit and puts us deeper and deeper in debt.

 

Image courtesy of Alan Cleaver on Flickr

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