CBO Report: Unchanged Tax, Health Policies To Balloon U.S. Debt
WASHINGTON, June 5 (Reuters) - U.S. public debt would balloon to twice the size of its economy in 25 years if current tax and spending policies are extended, Congress' budget referee said on Tuesday, delivering fresh fodder for a year-end budget brawl.
The Congressional Budget Office said in a new report that if tax cuts enacted under George W. Bush are allowed to expire as scheduled on Dec. 31, along with some other tax and spending policies, U.S. public debt would shrink significantly, falling to 53 percent of gross domestic product by 2037 from 73 percent this year.
The long-term CBO forecasts will help bolster election-year arguments from both Democrats and Republicans in favor of their party's form of U.S. deficit reduction as the year-end deadline for the tax cuts, automatic spending cuts, and other fiscal decisions draw near.
President Barack Obama's Democrats have argued that leaving the Bush tax cuts in place, as Republicans have proposed, is fiscally irresponsible, and new revenues are needed by restoring higher tax rates on the wealthy.
Republicans, including presidential candidate Mitt Romney, argue that tax rates can be lowered if Congress makes significant cuts in entitlement programs such as the Medicare and Medicaid health care programs for the elderly and poor.
Nothing to see here, folks... Just the usual TRUTH that the Bush tax-cuts are KILLING the deficit, and if allowed to expire, and if revenue is increased, the DEBT WILL SHRINK SIGNIFICANTLY.
Dang, I hate it when the truth keeps coming out........... NOT... :Whistle
CBO Report: Unchanged Tax, Health Policies To Balloon U.S. Debt
WASHINGTON, June 5 (Reuters) - U.S. public debt would balloon to twice the size of its economy in 25 years if current tax and spending policies are extended, Congress' budget referee said on Tuesday, delivering fresh fodder for a year-end budget brawl.
Spending must be cut too...this addresses both. You seem to ignore that rather large elephant in the room. No amount of tax increases will raise the revenue required if we don't change our drunk spending habits.
Tax policy must be changed across the board. I agree. Just allowing the rate cuts to expire would not increase revenues to the treasury. They would likely cause more economic slowdown. We need wholesale changes to the tax code.
Too bad future generations aren't here to see all the great things we are spending their $$ on!!
There goes your 10 percent. While we are at it, how about cutting some spending too? Whole changes to the tax law, and everyone except below the poverty level pay something, anything, but not nothing.
Stimulus spending? If the Bush tax cuts come back, it will be American austerity. The people & corporations that still have money will see that taken by the goverment instead of them spending to help out their local economies.
I know something needs to be done about the debt, but it will have severe reprecussions on the economy. Imagine this scenario, Obama wins again, Bush tax cuts extended because of gridlock and the economy sinks back even further, 10%? 11%? unemployment.
And please examine the cigarette taxes. States like NY raised taxes to excessive levels, $7 a pack and more, initially people paid the tax, but slowly they quit, and revenue from the tobacco taxes declined to lower levels than before as people stopped smoking or cut back. The Treasury could wind up with less revenue if businesses start to close, hours are cut back, and more people have to go on unemployment.
Thomas Sowell: There are no solutions, just trade-offs.
This is only a temporary influx of revenue to the government. Watch what happens when business income drops and the unempoyment rate goes up because of the increased expense of doing business. Just like Freds cigarette tax analogy, unintended consequenses will hurt more.
The left is angry because they are now being judged by the content of their character and not by the color of their skin.
When you spend more than you take in, you will have a deficit - it's a simple concept really. Repealing the 2003 tax cuts, in their entirety, won't make any difference at all as long as the growth in federal spending outpaces the growth of the economy. Our tax capacity, as proven over the last 80 years of varying tax policies and rates, is 18% of GDP. Any spending above and beyond 18% of GDP keeps us in the deficit cycle we are in. In order to prevent deficits and actually reduce them, federal spending has to drop from 24% of GDP to under 18% of GDP. That, too, is a simple concept.
18% of a $16 Trillion dollar economy is $2.88 Trillion - that is the budget that the federal government needs to pass. What we need at this point is a constitutional amendment that makes it a requirement that 2/3 of both houses of Congress to vote in favor of a budget with a deficit before it gets to the president for their signature. If we actually need to spend in excess of what we take in, it should be clear enough that 2/3 of our elected representatives agree that it needs to be done. Increasing the debt ceiling should take the same majority that amending the Constitution does - 75%. If the federal government is incapable of imposing fiscal responsibility on itself, it is up to the people to impose it upon them and it's high time we got started doing just that.
And please examine the cigarette taxes. States like NY raised taxes to excessive levels, $7 a pack and more, initially people paid the tax, but slowly they quit, and revenue from the tobacco taxes declined to lower levels than before as people stopped smoking or cut back. The Treasury could wind up with less revenue if businesses start to close, hours are cut back, and more people have to go on unemployment. 
