Balancing the Federal Budget (or at least reducing the annual deficit to a manageable size) The Problem: 2010-11 Spending - $3.7 Trillion 2010-11 Revenues.

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Presentation transcript:

Balancing the Federal Budget (or at least reducing the annual deficit to a manageable size) The Problem: Spending - $3.7 Trillion Revenues - $2.2 Trillion (Revenues have declined 13% since 2007 due to the recession) _________________ $1.5 Trillion Deficit 40% + Borrowed

Total Current Debt (Accumulated over 80+ Years) $14.3 Trillion Almost equal to our annual GDP (100%) We’ve only topped 100% once before during WW II Our annual deficit now equals 9.8% of GDP (above 10% is considered to be unsustainable by most economists)

The Debt Limit - $14.3 Billion Set by Congress No constitutional maximum Will need to be raised in March, 2011 Not raising it would result in the USA defaulting on outstanding Treasury Bonds. Catastrophic global economic consequences

The Budget is Divided Mandatory spending set by law - Entitlements. These include Social Security, Medicare, Medicaid, CHIP, Veterans’ Benefits, Food Stamps, and more. Discretionary spending – the parts that we can change without changing other laws. Interest on the debt

Entitlements The President's budget request for 2010 totals $3.55 trillion. Percentages in parentheses indicate percentage change compared to This budget request is broken down by the following expenditures:[8][8] Mandatory spending: $2.009 trillion – $695 billion (+4.9%) – Social SecuritySocial Security – $571 billion (−15.2%) – Other mandatory programs – $453 billion (+6.6%) – MedicareMedicare – $290 billion (+12.0%) – MedicaidMedicaid – $164 billion (+18.0%) – Interest on National DebtNational Debt

Medicare : Rising at 3X the rate of inflation.

Revenue Sources

Defense Related Budget – Over $1 Trillion Budget Breakdown for 2011Defense-related expenditure2011 Budget request & Mandatory spending[1][19]Calculation[6][20][1][19]Calculation[6][20] DOD spending$721.3 billionBase budget + "Overseas Contingency Operations" FBI counter-terrorism$2.7 billionAt least one-third FBI budget. International Affairs$10.1–$54.2 billionAt minimum, foreign arms sales. At most, entire State budget Energy Department, defense-related$20.9 billion Veterans Affairs$66.2 billion Homeland Security$54.7 billion NASA, satellites$3.4–$8.5 billionBetween 20% and 50% of NASA's total budget Veterans pensions$58.4 billion Other defense-related mandatory spending$7.5 billion Interest on debt incurred in past wars$114.8–$454.2 billionBetween 23% and 91% of total interest Total Spending$1.060–$1.449 trillion

The GINI Index Measures Income Disparity Low # means greater equality. High # means greater gap, rich v. poor.