Public Agenda Issue Guide: Federal Budget

ISSUE GUIDE: Federal Budget

OVERVIEW

The Federal Budget

The federal government is facing difficult decisions about its finances, with a growing national debt and long-term fiscal problems that could seriously undercut the nation's prosperity.

After several years of decline, the federal deficit is on the rise to a projected $482 billion in 2009. Even more worrisome, the national debt has surged, topping $9.5 trillion. The nation's long-term obligations are staggering, as the baby boom generation retires and begins to strain the Social Security and Medicare systems. Former U.S Comptroller General David Walker, the federal government's auditor, calls the baby boomers' retirement a "demographic tsunami" that will overwhelm the federal budget. By 2040, there will be little money for anything else other than Social Security, Medicare and interest on the debt -- unless something is done.

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CONSIDER THE CHOICES

Ease the burden on taxpayers with a smaller government

Balance the budget to avoid long-term financial disaster

Address public problems too long deferred

The public knows how to spend its money better than the government does. Its the hard work and productivity of the average American that creates jobs, drives innovation, and builds wealth. By contrast, the federal government takes on far too much and mostly produces red tape. So its only right that average Americans keep as much of their wealth as possible. High taxes slow the economy and keep people from getting ahead, so the government should keep the necessary evil of taxes as low as possible. In the future, the federal government should be smaller, only taking on the tasks no one else in society is suited to do. In the meantime, we may run deficits occasionally, but a deficit is preferable to a tax increase particularly when the economy needs a boost.
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The federal budget is on a course for disaster and our first priority should be to turn it around. By allowing the government to run a deficit, we run the risk of harming the economy and burdening our children with the debts we were unwilling to pay. The federal government has to stop living beyond its means and giving out tax cuts like party favors. Unless we act now, senior entitlement programs like Social Security and Medicare will end up both breaking the budget and failing to serve the elderly when the baby boomers retire en masse. The critical task is balancing the budget and reforming the entitlement programs. Anything less means failing in our obligations to both our children and the elderly.
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You get what you pay for and taxes are an investment we make as a society for the public services we need. What good is it to have a balanced budget or lower taxes if our schools are falling apart, our homeland security is poor, or sick people cant afford to get treatment? The question isn't what the government spends; its what you want the government to do. For decades the deficit has been an excuse to avoid pressing public needs, even though the deficit never seemed to cause any tangible harm. After all, the country prospered during this period. Besides, deficits have their uses, particularly when it comes to stimulating the economy. Its time to address some of these long-delayed problems in education, health care, counter-terrorism, child care and other areas. If the government needs more money, it should tax the wealthy and cut back on corporate tax breaks.
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