Sunday, April 14, 2013

Future Shock: We're In Budget Do-Do...L&C

This past week President Obama introduced his budget plan for 2014. The response was good and bad. The good news was he united both political parties. The bad was both parties are against it. I'd like to remind you, dear readers that the president has not gotten one budget passed into law for four years in a row which violates the constitution. He has no vision or plan and he has no idea what he is doing other than smile on TV. PS, in his budget he looks to repeal the sequester. He hopes this will garner support, however in another 60 days, the Republicans will realize that the economy is tanking and it will fall on the president and Democrats which will make the GOP happy even though we all will suffer economically, to which, I have a dream for a new third party of, from and for the people.
By the way I predicted last week that the president would render a plan to tap into Republican support for his budget by cutting payments in social security using the index idea for COLAs and he did. This is the same man who campaigned against Bush's Tax Plan and then, signed an extension of it into law. I say no more.
Future Shock
I spent the week looking over past federal budgets and one of the interesting things about the site is they give you both the estimates and actual results so you can compare results. Folks, it ain't pretty.
For example, President Obama estimated that revenues for 2010 would be $1469.8billion(that is one trillion four hundred sixty-nine billion dollars). The government actually took in $1374.5billion or roughly, they missed by $95billion. That is a BIG MISS! It gets worse.
Another line under the various debits was the debt on the national deficit. Again in 2010(I will use this year because the government site is two years behind). It was $348.8billion, however three years later, the first actual posted expense under this category is $224.8billion. There are first posts for later budgets, but these figures get changed due to errors and 2010 is set in stone.
Now, how can the budget of 2010 be $124billion less than 2013 when our nation added over $3trillion in new debts to the deficit? The Federal Reserve. They lowered interest rates which is the real reason why rates are so low. It is to help the federal government keep the losses to a minimum.
Howdy Do-Do Time
Dear reader, this is where the do-do begins its odor. Federal costs for government pensions is estimated to be $819.9billion for 2013. This is an expense that can only grow with time. If you consider the other new danger to the budget which rarely gets press, but even when it does, is not fully understood. It is disability payments which come from social security. Did you know that this cost is $135billion a year? Did you further know that the average age of the ex-worker receiving this income is only 53? When you hear the thought about raising the age of social security because people are living longer, well, we just added twelve more years to the new extended life cycle. Did you further realize that food stamps add another $74.6billion to the budget? Finally, the military gets 20% of the budget. If, by some miracle we were to return to a peaceful nation and say cut this in half, it would still be over $300billion. Then, of course, interest rates could rise and at some point, they will. This will cause the debt to rise due to the higher cost, however in this exercise, I won't. Also, I will use Obama's direct revenue estimate which is $2.100b for 2014. Folks, our nation never collected that much, but he has the something to say, this is how I see it. To make things straight forward, I only use the payment of 2010 so you can easily see that I am being too conservative in what I'm going to show you.
Add It Up
Keep in mind that I cut the military budget in half. I am not including social security, medicare or anything else that is included into the federal budget. This is it line-by-line.
348.8b for deficit.
819.9b for pensions
135b for disability
300b for military
   74.6b for food stamps.
Total=$1678.5b in this example. If, our government only receives what it thinks it will under direct taxes the figure is $2100b. This gives our government roughly $421b to play around with. Like I said we are in serious do-do.
Liars and Crooks:This week goes to Jerome Cahuzar, the ex-budget minister of France. It seems that Jerome's job was to check into tax evasion in France after they raised their taxes. In one sense he was the right man for the job. He was found to have stashed thousands of euros in Switzerland to avoid paying taxes.