Cut, Cap and Balance

For which the details do not exist except for $111 million in cuts initially yet not identified. Republicans
want to cut expenses, Cap Spending at 18.5% of GDP (22.5% next year) and a Balanced Budget Amendment which will also require a two thirds majority to raise taxes.

Let us review these proposals from the perspective of logic. Cut Expenses- what we have been hearing lately is that Social Security, Medicare and Medicaid need to be cut. Why? Social Security has a surplus currently being used to fund other government programs. It was fixed temporarily in 1983 a permanent fix is needed. It is true that eventually Social Security will pay out more than it takes in, yet this can be fixed easily by raising the maximum amount you would pay on earnings, which is
currently $106,800 of your annual earned income which does not include interest income, dividend income or capital gains. Social Security, Medicare and unemployment insurance taxes (known as payroll taxes) are paid mostly by the bottom 90 percent of wage earners. That’s because, once you reach $106,800 of income, you pay no more for Social Security, though the much smaller Medicare tax applies to all wages. Warren Buffett pays the exact same amount of Social Security taxes as someone who earns $106,800.

Medicare and Medicaid are similar problems which need to be resolved. The problem with resolving the issue is that too many of our representatives are representing the industry rather than the insured and subsequently can not institute regulatory controls which would eventually reduce the cost of healthcare therefore reduce the cost to the United Sates Government.  A second issue in healthcare is that there are no standard pricing mechanisms for services and how much insurers are willing to pay for the same service. Doctors, Hospitals, and medical services bill Medicare Medicaid and Insurers different amounts for the same service because they all pay reduced amounts to the provider.  A visit to a specialist billed to the three insurers Medicare, Medicaid and a private Insurer would result in three different billing amounts and three different claim payments. If this surprises you don’t be. It’s all about profits. A single payer system looks good compared to what going on today. Even yet the Veterans Health Systems should be reviewed for its efficiencies as a model.

Republicans want to cap spending at 18.5% of GDP in the future. Effectively this would reduce government programs every time we had a recession, therefore, capping our Debt Limit as well which would actually force our Government into a balanced budget. Republicans are refusing at this time to increase the debt limit which if they succeed will cause a second financial crisis that would force the capital markets to dump US owned securities and throw our economy into an inflationary cycle never seen before. Yet, the hypocrisy in all of this by Republicans is that raising the debt limit to give tax cuts to the rich and conduct two wars and an unpaid drug program during the Bush Administration was fine at the time. These three Bush policies by 2019
will account for almost half the national debt. Republicans are attempting to tell the American people that they have been saved and have seen the light and wish to kick the debt limit habit. This too will pass.

I also agree that debt limit increases should be tied to cuts and a balanced budget but not on the backs of the 90% of hard working Americans who effective (No Loopholes) pay the taxes to provide the revenue for the Government.

All budgets should be balanced in America not only the Federal Government. A simple approach should prevail if you want
to buy something or provide something to someone you must raise the money to do so.

One thing the Republicans fail to mention is that when we ask Americans to sacrifice whether it for war or peace it should be a shared sacrifice by all. Those more fortunate should help and provide for those less fortunate, this we have learned in all faiths. Those who have no faith or beliefs share because it is the American way and natural to help others. It is self interest that gets in
the way of sharing. Once we see the need to give to others than there will be no need for politics.

Finally, a Two Thirds majority to raise taxes, how absurd is this. They can’t get a simply majority in either house. Their purpose is never to raise taxes again but cut, cut, cut from those who are in need. Shrewd is the word but like all Republican proposals lately they are absurd and insult the intelligence of the people who put them in office.

The Mayan Calendar doesn’t end on December 12, 2012 I believe it will end on November 6th 2012 if Republicans control both houses of Congress in 2013.


One Comment to “Cut, Cap and Balance”

  1. Very well presented! You raise some valid points I had not considered. Although we differ a bit on the wisdom of a balanced budget – but not the desirability – we are in lockstep on everything else. For my exact views see my blog, , the Cut, Cap and Balance Act article was posted on July 21st.

    I value your insight, particularly on financial issues. It is amassing what the combination of knowledge, experience, sincerity and patriotism can produce!

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