This is budget week in Washington, with President Obama's "fiscal responsibility summit" scheduled for today, a presidential speech Tuesday and a proposed budget to be submitted Thursday.
Here are a few things to watch out for:
- Short-term and long-term
We've got two issues to deal with: the current budget deficit, likely to top $1 trillion this year, and the long-term problem of a $10 trillion national debt that will only get higher given the costs of Medicare and Social Security. We've got to deal with both. President Obama said this weekend he wants to cut the deficit in half by the end of his term, but he hasn't said how.
- Health care, Social Security, or both?
There are two reasons why the federal budget is in trouble over the long term: rising health care costs and demographics, as the baby boomers retire and start drawing government benefits. That's why the biggest part of our long-term problem is Medicare, which gets hit on both fronts.
There's been fierce debate over what to tackle first. Advocates of health care reform say it's the bigger part of the problem, and reforming the health care system has plenty of social benefits apart from helping the federal budget. Others argue that health care is devilishly complicated, while fixing Social Security is relatively simple. A Social Security plan could provide the Obama administration with a comparatively easy win on this issue. The current betting is that Obama will go for health care, but we'll probably find out this week.
- Is everyone on board?
If bipartisanship is needed anywhere, it's needed on the federal budget. There are so many minefields that any leader needs bipartisan cover to make progress. In Washington, this issue doesn't so much divide people as Democrats or Republicans as it does between those who want to act now and those who don’t. This week we're going to start finding out whether people are willing to reach across the aisle on this.
So stay tuned.
Re: Climbing the Summit to Talk About a Mountain of Debt
I would also like to know how he is planning on cutting the national dept in half. I think that if he revealed more of his plan to the public there might be less doubt in his methods.
Fauna Tungjaroenkul
Re: Climbing the Summit to Talk About a Mountain of Debt
The world is in the midst o economic crisis and United States is greatly affected b it. In fact, United States has been hit of recession since December 2007 and has resulted loss of jobs to millions of people. United States is not the only country that is affected by the global economic crisis. The national currency of Iceland, the Kronur has fallen over the last few months after the near collapse of their entire banking system, and they had to get a $2.5 billion bailout in payday cash advance loans from other Northern European countries to keep them afloat. That said, there are signs of life, as they have been having a bit of a tourism boom. Iceland has seen over a half a million tourists in the past year, which is impressive for an island of only 320,000 people, and which helps to keep unemployment down. So perhaps tourist income can provide debt relief to Iceland, and perhaps more value over time to the Kronur. I just hope that United States and Iceland would survive in the current recession that they are facing.
Re: Climbing the Summit to Talk About a Mountain of Debt
I am curious as to what final leg(s) we are left standing on? Obviously our economy can be roughly translated as "debt". As our ability to borrow dwindles, so goes our economy.
Obviously our economy was way overheated in the late 90's. So now we are contracting; I saw an article comparing Japan of the late 80's to our economy at its peak, and thought it's not coincidental that roughly the same thing is happening in the US.
Of course our total outstanding national debt sits around $54-55 trillion(!) range.
How can we possibly function in this capacity?
Resveratrol Ultra
Re: Climbing the Summit to Talk About a Mountain of Debt
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