What’s Interesting about the US Budget Battle

When the Republicans were swept into office in 2010, one of the things they promised to do was rein in spending and balance the budget. To balance a budget–yours, mine, the local Elks Association–you must either cut spending or raise income (or some combination of the two). For the federal budget, raising income is dead on arrival. The newly elected Republicans, even before they took office, pressured the president and the lame duck congress to continue the Bush era tax cuts, and we can be sure they will fight any measure that will close tax loopholes, end corporate subsidies, raise taxes, or otherwise directly increase federal revenue.

So, with a direct increase in revenue out of the question, the Republicans have to cut spending and hope the continuation of the Bush era tax cuts will stimulate enough growth in the economy to significantly increase revenue (this is known as Voodoo Economics and, despite its having failed when it was tried both in the Reagan and Bush II administrations, conservative Americans put their hope in it in the same way the conservative Russians once put their hope in Communism). Read more