January 04, 2011

A Citizen's Guide to the Upcoming Budget Debate

First of all, it's important to remember when pondering the august proceedings of the Kongressional Klown Kollege that nothing is as it seems. While the IQs of the 535 members of Congress are definitely shifted to the left under the standard bell curve, even these mouthbreathers are aware that there is no earthly way for them to come close to balancing the budget. It is, as they say, to laugh. That is why The Man From Planet Orange (although he looks more cordovan in some light), John Boehner of Ohio, the incoming House Speaker, talks about cutting "$100 billion from discretionary domestic spending." There are two ways of reading this statement of intention:

1. It's a joke.
2. Orangeman believes that the American people are even stupider than his colleagues.

Thus, to level the playing field for those of us outside the rotunda...

The Kongress Klowns are probably dimly aware they are running the largest Ponzi scheme in the history of the civilized world. The federal income is wholly inadequate to keep the doors open and the suckers buying Treasury bonds. To illustrate this point, we can refer to the the U.S. Treasury Department, which publishes its income on a monthly basis. Its website is here: http://www.fms.treas.gov/mts/index.html One valuable act of citizenry, in my opinion, would be for all literate, voting Americans to bookmark this site and check it once a month. It can really open your eyes to the reality of the American fiscal situation. The White House and Congress count on your ignorance in saying the stupid things they say, such as Boehner's statement above.

For example, in October of 2010, the first month of the current fiscal year, the United States received in income taxes, inclusive of Social Security (FICA) taxes, $146 billion. In November, 2010, the figure was $149 billion. The outlays (expenses) for these two months were, respectively, $286 billion and $299 billion, for a net deficit, in two months, of $290 billion, or approximately the same as the total income for the two months. We're talking here about two months. Now I will grant that the months of October and November are not necessarily the best months for federal income. If one were to extrapolate the approximately $300 billion received during these two months, total income for the fiscal year would only reach $1.8 trillion. The Treasury's "forecast," however, estimates total income of at least $2.4 trillion. So what I did was, I looked at the last fiscal year and noted that in three months (heavy taxpaying months), the Treasury received about $100 billion more per month than in the usual month. Thus, if we gross up the $1.8 trillion by these bonanza months, we should reach a number like $2.1 trillion.

This indeed was about what America made last year in taxes. The $2.4 trillion figure is a Hopium-enhanced number, although since the unemployment rate has not improved at all, and wages are flat, how is this supposed to be accomplished? Add to this dismal picture the recently passed FICA reduction of 2% on the employment side, which should affect the last 9 months of the fiscal year in a very negative way, and we begin to depart the Reality Station and head down the Track of Deep Denial altogether.

What happens if we multiply the outlay side by 6 (2 mos. x 6 = 12)? Well, the $600 billion spent in the first two reported months of the 2011 fiscal year extrapolates out to about $3.6 trillion, which again is fairly close to the actual budget number, although America has not in fact had an actual, passed budget lately. Just sort of a gentlemen's agreement (continuing resolution, they call it) to spend a helluva lot of money.

Chalmers Johnson, before his lamented death, made the point over and over that the Military-Industrial Complex in the United States, honestly accounted for, spends about $1 trillion per year. Never mind the official budget number of $660 billion or so. This does not count "supplemental" war appropriations (as if Congress is not aware that these tragically expensive follies are going on), expenses for caring for the wounded and maimed veterans we're mass producing, the nuclear bomb budget in the Department of Energy, Homeland Security, the various paramilitary outfits attached to the intelligence agencies, nor the debt service on that part of the national debt attributable to defense costs (about half, or close to $250 billion per year at present). When you add all of these up, you come very close (or over) Chalmers's number.

Do you hear anyone, anywhere, demand that the defense budget be reduced to some sane level of expenditure that we can actually afford on our somewhat pitiful income? The actual income of the U.S. Treasury is only enough to pay the existing defense budget (fully accounted for), Social Security and interest expense on the national debt. That's it. And it's very likely, at the current rate of debasement of the dollar and the addition of approximately $2 trillion per year to the national debt, that the interest expense is going to crowd out its two rivals for attention in future years.

Against this picture, I would ask you: what the hell does $100 billion in "domestic discretionary spending" have to do with anything? Leaving only the question: what are these mountebanks actually up to?

1 comment:

  1. Machipongo John7:55 PM

    You might find it interesting that in 2010, expenditures for defense, 802 billion, approximately equals the amount (in 2005 dollars) that was spent in 1945 at the height of spending on WWII.