Has the Government Dug Its Own Financial Grave?
The US Government’s Fiscal Plight, an Enormous Problem Without a Solution?
by Michael Pollaro
As Republicans and Democrats slug it out over the future course of U.S. government spending, deficits and debt, we here at THE CONTRARIAN TAKE cannot help but wonder if Washington truly grasps the enormity of the government’s increasingly fragile financial condition, whether they truly are seeking a solution to the government’s mounting debt problem. So far Washington has done nothing to address these issues. We think time is running out…
The Republicans entered the year with their Pledge to America, to cut a $100 billion off of the government’s 2011 fiscal budget. Despite that paltry sum, the Democrats wanted nothing to do with it. So, after months of political grandstanding, including threats by the Republican leadership to shut the government down if their spending demands were not met, the Republicans got just $38.5 billion in spending cuts. To put this number into perspective, according the Congressional Budget Office (CBO), fiscal 2011 government outlays are projected to be $3.6 trillion, the government deficit a whopping $1.4 trillion. Washington’s answer to this fiscal malaise – a $38.5 billion spending cut, a spend itself some $175 billion more than fiscal 2010. Worse still, according to that same CBO, it seems now that that $38.5 billion spending cut will be largely negated by higher than estimated spending in other government programs. After all the hoopla, nothing.
So we ask… Is the U.S. government’s fiscal plight really without a solution?