Today I was reading one of my favorite Blogs “Wintery Knight” and learned some startling facts that are not expected to be very comfortable to the average reader. For me though, it is a reality check,
The Government Accountability Office is the federal government agency that audits the finances of the federal government. They report to President Obama and they are part of the President’s administration.
According to the Government Accountability Office (GAO) – the personal auditor of President Obama and the Federal Government, their assesment of the federal governemnt, released on January 17, 2013, the report illuminates just how serious Americas spending problem is, and that the current proposed cuts in Congress will do very little to fix the problem.
According to GAO “It is estimated in their report that the current policy is not sustainable. Preventing the debt to GDP ratio from rising over over the next 75 years is estimated to require some combination of spending reductions and revenue increases that amount to 2.7 percent of GDP over the period.
Regardless of the claims that the presidents proposal would reduce budget defisits substantially, the report estimates that “it is estimated that running primary surpluses that average 1.0 percent of GDP over the next 75 years would result in a 2087 debt to GDP ratio equaling its level in fiscal year 2012.
There is no doubt that the national debt is a major problem that impacts every American. It is also obvious that if we are to avoid fiscal collapse, we are going to have to find a way to both reduce spending substantially, as well as raise more revenue in such a manner as to avoid the persistent need to adjust and readjust future Fiscal proposals.
The problem here is that too many people are dependant upon Federal assistance in order to survive. Social Security, Medicare, and Food assistance programs are a major part of that dependence.
Another problem is that continued tax increases and cuts in federal programs will hurt more people, and at the same time impact the economy. Local taxes and fees have been increasing at a steady pace as the Federal Government cuts more and more allocations to individual States. To recoup those losses, state government and local government as well, have resorted to increased taxes, benefit cuts to their employees, and increased fees for services. Inflation is increasing, (the cost of living), and incomes are stagnate. It should be understood that most people are not making 40 and 50 thousand per year. Many people in this country are one pay check away from the street. Therefore, tax increases, cuts in service, and increased service fees are eating away at the houshold budget and it is now near the breaking point. Proposed Federal as well as State cuts will do just that; if not come very close. It is like a Rubber Band, you can streach it just so far before it snaps. When it snaps, thousands if not more, are going under. That in itself will have a major impact on any assurance of economic stability for low to moderate income hosuseholds. It would also have a major impact on the American economy.
To ignore this simple truth is irresponsible. The economic impact of budget cuts, tax increases, as well as government service fees, and the severe reduction of, if not the elimination of entitlements, must be included in any proposal set forth by the Obama as well as future administrations. The people have a right to know what they are in for. The Government has an obligation therefore to let them know what the future holds.
It is a scary proposition. The GDP report as well as independant economists have been projecting this situation for a long time. Our Government, the Representatives of the People, put in Washington by the people, have done nothing but play politics with it and continue accomplishing nothing but ‘kicking the can down the road’.
Here we sit. Reckoning day is just about upon us and I am sure most of us have no idea how really, very serious our economic crisis actually is. Look to Greece and Spain for a mere clue.
I must concur …….It is time for a reality check. Thank you Wintery Knight for reminding us all of the real situation we are in.
That’s my point of view………I look forward to your insights on this and any of the issues of the day. Until then have a great day and as usual…………God Bless America.