Budget discussions in the United States and many other countries are publicly aired masking them with many different promises to attract voters, calculated to promote social causes that would benefit large sectors of the voting population. Voters are prompted to vote for those candidates offering more "free" government services and welfare.
The problem is that voters are seldom informed about the cost those promises would impose to the whole of society; government expenditures are not "free" and must be paid sooner or later. Ambitious and irresponsible candidates rely on credit schemes and loans that will eventually be payable long after their terms in office have expired or they have been able to escalate to higher political positions, leaving behind their mistakes. They also rely in hidden taxation, such as the effect that inflation and monetary devaluation has in the purchasing power of every citizen and resident.
When this kind of policies are applied at the national level the end result is always a national disaster. Such is the case now facing Greece, preceded by several other European countries in recent years. And it is an endemic ailment of Latin American economies.
However, when a country such as the United States follows the same path, the national disaster becomes a world-wide crisis. United States and its citizens and residents have enjoyed the good life on credit for too many years. And they are at the brink of a financial abyss. Public debt has doubled from more than 9 trillion in 2008 to more than 18 trillion now. That represents an unprecedented increase in the public debt per taxpayer from $92,159 in 2008 to $154,109 now!!! And that means the Federal government must pay about $8,000 annually per citizen solely in interests. Although the debt is still sustainable in the US huge economy, the rate of increase of the public debt is not. The US is at the brink of economic meltdown.
The chart shows how the debt ceiling approved by Congress has been increasing up to 2010. It has been further increased by almost 4 trillion dollars up to this day in spite of hard fought bouts facing the Presidential veto whenever Congress tried to slow down the explosive indebtedness.
Promises in the field of government social services have given way to the fact that people receiving Food Stamps have increased from less than 30 million to more than 46 million, and they are getting even more subsidies per family! The same with those classified as "living in poverty" who do not pay taxes because of their low incomes: 37 million in 2008 and more than 44 million today.
Furthermore, unemployment figures are masked in the United States. Official unemployment figures refer to those that are actively looking for employment and still receiving unemployment benefits. But actual unemployment -the true figures stalling the national economy- refer to all those able to work and not working. And these figures are certainly worrisome. From 13,432,000 in 2008 the numbers have increased to 17,146,000 today.
Therefore, politicians have an obligation to reduce the budget and its huge expenditures in social benefits in order to reduce a more than 475 billion US annual Federal deficit ($172 billion more per year than in 2008), without additional taxation. Again, when talking about taxation, let us remember that it is not just income tax, sales taxes, or other visible forms but also the hidden ones mentioned above.
Sadly, in the bipartisan US system, the budget has turned into a battleground where one party treats the other as the "enemy". The old tradition of negotiation and transaction is no longer respected, and the President, instead of being the leader of all Americans acts as the leader of his party. This is a fact that has been worsening since the late 1990's to the point where we rarely see the President negotiating with senators and representatives of the other party in his true function as a mediator able to reach a workable solution.
That is the reality Americans are facing as the House Republicans and the Senate Republicans, both having now a majority role in Congress, present their proposed budgets for fiscal year 2016 in response to the President's proposal a few weeks ago. We must remember that the President asks and the Congress decides about budgetary matters in the US. Therefore, if the President does not like either one of the proposals, it is only reasonable to expect that he’ll seat with Congressional leaders to discuss the matter until both sides reach a satisfactory agreement instead of taking the course of a Presidential veto.
Negotiations unite while vetoes divide.
One point the Republicans have in their favor for a healthy US economy - Their proposal balances the budget in less than 10 years without raising visible taxes, while the President's budget does not project any future balanced budget. One point against is their emphasis in a stronger national defense at a very high cost - one that could be easily reduced with less hardware such as cutting the production of so many more aircraft carriers, destroyers, frigates, fighter planes, bombers and tanks. On the other hand, these cuts would be enough, with no need to reduce valuable personnel in active duty or their benefits, specially for veterans.
There is much more to say about these issues and they are open to discussion. Readers may express their views writing their comments below.