The top 6 reasons spending cuts can’t wait
Throughout this week, Tea Party Patriots has urged activists to pass along the message of fiscal responsibility to their Representatives. With the House in recess (officially called a “district work period”) and the Big Three budget debates coming up, this is the perfect time to make sure they hear our messages of fiscal responsibility, constitutionally limited government, and free markets.
Also throughout this week, this blog has highlighted important aspects of the Treasury Department’s Financial Report of the U.S. Government for Fiscal Year 2012. We’ve examined the 6 top places your tax dollars go, the 9 ways taxes come into the federal government, and 8 numbers which show why a fiscal crisis is coming. All of this is critically important information for your friends, community, and Members of Congress to be aware of.
Today, let’s examine the most important numbers in the report when it comes to preventing a fiscal crisis: the 6 numbers showing why we need spending cuts and reforms now. From Page 16 of the report, with emphasis added:
It is important to address the Government’s fiscal imbalances soon. Delaying action increases the magnitude of spending reductions and/or revenue increases necessary to stabilize the debt-to-GDP ratio. Relative to a reform that begins immediately, for example, it is estimated that the magnitude of reforms necessary to close the 75-year fiscal gap is nearly 20 percent larger if reforms are delayed by just ten years, and more than 50 percent larger if reform is delayed 20 years.
The graph on Page 18 of the report spells this out in more detail:
Let’s put the numbers in the graph in perspective. According to USDebtClock.org, the U.S. GDP is $15.6 trillion. This means Treasury is telling Congress to implement the following cuts, in comparison to today’s GDP:
- In 2013, cuts of $421.2 billion every year until 2087
- In 2023, cuts of $499.2 billion every year until 2087
- In 2033, cuts of $639.6 billion every year until 2087
Of course, adjusting for inflation and the larger GDP America will have in each of those years, the actual cuts 10 and 20 years from now will be substantially larger than the estimates above in pure dollar values. This makes the actual implementation of these cuts very unlikely. Also important to note is that this is the annual cut Treasury recommends to maintain the current ratio of publicly held debt to GDP of 73 percent.
As the week ends, make sure you tell your Congressman what you want to see – him or her to listen to President Obama’s own Treasury Department, which says America needs major spending cuts and long-term entitlement reforms now. Waiting will only make things worse for the American people.