Our country's fiscal health continues to deteriorate rapidly. Through the first 8 months of the fiscal year the federal government ran a $929 billion deficit, placing our government on pace to roughly match last year's astonishing deficit of $1.3 Trillion. If economists were concerned when our deficit was crossing $400 billion, then 3 consecutive years of deficits over $1 Trillion should have everyone petrified.
At some point the rest of the world will stop lending us money. Then what? If people are screaming like petulant babies at the prospect of 5-10% budget cuts in some programs, what happens if the government has to cut 40% of its budget overnight? Social Security - your check is cut 40% immediately. Medicare - 40% benefit cuts. Think the Ryan plan sounds bad now? Military pay - immediate 40% cut.
On the bright side revenues are up $139 billion compared to last year. Unfortunately spending has increased $132 billion, resulting in virtually no benefit to our balance sheet. Entitlement programs are driving the spending growth. Social Security is up 3.6%, Medicare $3.8%, and Medicaid 5.4%. Spending on all 3 programs, which already consume a large chunk of federal revenues, is set to explode in the next decade. The modest reforms on the table for these programs should merely be a starting point; the programs are clearly unsustainable in their present forms.
The lack of leadership from Barack Obama and most Members of Congress is disconcerting. The childish attitudes of the majority of voters are a problem as well, but perhaps they would be more mature in facing our budget problems if those in charge provided the proper leadership. I'm remaining undecided in the 2012 presidential race until I find a candidate who will credibly tackle these important issues.