After weeks of political drama, the compromise agreement reached by President Obama and the Congress recently resulted in a $38 billion reduction in the current budget. This represents only 1 percent of the projected $3.8 trillion of spending budgeted in the current fiscal year. Fiscal year 2011 borrowing to cover the deficit is projected to be $1.6 trillion or 42 percent of all the federal government’s income for the year. This compares to 26 percent of income from the personal income tax and 25 percent of income from Social Security and Medicare taxes.
Borrowing to cover the deficit in 2009 was 40 percent of all U.S. government income. It was a larger percentage in 2010, and will be higher in each year in the future if taxes are not raised or spending reduced. Why then did our leaders congratulate themselves on this meaningless $38 billion budget reduction agreement? Maybe it was a travesty meant to deceive the public.
Don Rits
Vancouver
