« How to eliminate the U.S. Deficit. | Main | What happens when you let private enterprise run amok. »

Very simply, they wanted to pass a balanced budget amendment, which means the amount we have to spend in the federal budget must equal the amount we tax our citizens. And - oh yeah - they don't want to cut anything from Social Security, Medicare, the Military, or interest on the current debt. What exactly does this mean? Kevin Drum lays it out unequivocally:

This whole post is worth a response since most people don't have a very good understanding of where federal revenue comes from and where it goes. But the basic figures are all easily accessible from the OMB and a few other sources, so here's a quickie summary:

** Social Security: Roughly speaking, Social Security is self sufficient. So yes, we can assume that even if the debt ceiling isn't raised, incoming payroll taxes will be enough to keep the program going.

** Medicare: Medicare gets about half its financing from dedicated payroll taxes and premiums. However, the non-hospital portion, which costs about $250 billion per year, comes out of the general fund.

** Defense + Veterans Benefits: Using the narrowest definition of national defense, this costs about $900 billion per year.

** Interest on the debt: About $200 billion per year.

So excluding the parts of Social Security and Medicare paid for out of dedicated payroll taxes, here's what comes out of the general fund: $250 + $900 + $200 = $1,350 billion.

Now for taxes. Excluding dedicated payroll taxes for Social Security and Medicare, here's roughly where our money comes from:

* Individual income taxes: $950 billion.
* Corporate income taxes: $200 billion
* Other taxes: $200 billion

That comes to $1,350 billion. In other words, aside from payroll taxes, our entire tax base -- income taxes, excise taxes, estate taxes, customs duties, everything -- is just barely enough to pay for our military, the non-hospital part of Medicare, and interest on the debt. Finis. If you want to fully fund those parts of government, as most tea partiers do, and if you also want to force a balanced budget by not raising the debt ceiling, as most tea partiers do, you literally have to zero out the entire rest of the federal government. No Medicaid, no FAA, no border patrol, no FBI, no embassies, no highways, no disaster relief, no SEC, no court systems, no prisons, no national parks, no CIA, no school lunches, no medical care for children, no SNAP, no flood control, no student loans, no medical research, no nothing. You get Social Security, Medicare, the military, and interest on the debt. That's it.

Capiche?

Yes...it's crystal clear, hombre, to those who are paying attention.

Name (required)
Email
Website
Remember personal info? Yes   No
Comments

home | music | democracy | earth | money | projects | about | contact

Site design by Matthew Fries | © 2003-23 Consilience Productions. All Rights Reserved.
Consilience Productions, Inc. is a 501(c)(3) non-profit organization.
All contributions are fully tax deductible.