In the recent weeks, Obama proposed $4tn spending cuts to tackle deficit. Obama’s 12-year plan to reduce budget deficit includes curbs on defense spending and Medicare reforms. In fact, Obama has set the stage for a new and bigger budget showdown with the Republicans, proposing a staggering $4 trillion aimed at reducing America’s runaway deficit. As we said before, the size of the deficit, $14tn, is one of the biggest political issues in the US, especially with the country in hock to China, which has accumulated a hoard of dollars Obama set out his proposals in a speech at George Washington University in DC, and blamed Bush for the deficit. He said it has been known for decades that the baby boomers reaching retirement age would put a strain on health and social security at this time. Bill Clinton had left a balanced budget and the burgeoning deficit had been a consequence of the Bush era, Obama said. “We increased spending dramatically for two wars and an expensive prescription drug program, but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts: tax cuts that went to every millionaire and billionaire in the country ; tax cuts that will force us to borrow an average of $500bn every year over the next decade … By the end of this decade, the interest we owe on our debt could rise to nearly $1tn …” he said. The Republicans, who have a majority in the House of
Representatives, are scheduled to pass a bill later this week to cut $6.2tn over the next decade without raising taxes. But some economists and political scientists also raise what they see as the danger of Republican cuts slowing or even reversing America’s climb out off recession. Thomas Ferguson, professor of politics at the University of Massachusetts, said there was a danger of repeating the mistakes of the Great Depression by chopping spending. “The US would surely take a rather large plunge. They will get Ireland and Greece outcomes. You will crater the US economy if you were to enact the [Republican] bill,” he said. But it has no chance of getting through the Democrat-controlled Senate. Even if it did, Obama could use his presidential veto to block it.
Obama has proposed to tackle the deficit by curbing defence spending and ending tax breaks introduced by George W Bush for wealthy Americans -those earning more than $250,000 a year. It’s good, of course if he could do it. But in a move that will anger the Democratic base, Obama is also suggesting further cuts to come from reforms to Medicaid, which provides basic health provision for the poor, and Medicare, which provides healthcare for those over 65. It’s not good. Obama is proposing to cut about $2tn from spending, much of it from defense and health. He promised he would not cut health provision but would look at reducing the cost of prescription drugs and introduce incentives to encourage preventive medicine. He hopes to save another $1tn by lowering interest payments on the federal debt. The final $1tn would come from ending tax breaks for those earning more than $250,000 a year, which date back to the Bush era. But that $1tn cuts form Health and Medicare-Medicaid could be provided by more cuts form Defense, and more tax on those earning more than $250,000 a year. Those earning more than $1,000,000 a year should pay the cost of problems that they have caused. The Republicans say that the tax rate for all people should be equal; It’s free market, and all people, rich and poor, are equal. But it’s really paradoxical. The rich people imposed many burdens on the society. Many of them have factories that pollute the air, water, and environment. In fact, the rich people pollute the environment more than the poor people, and they should pay extra tax for damaging the environment. The rich people often do a lot of illegal activities to earn more money, but these illegal activities impose serious financial and non-financial burdens on the society. The majority of rich people, not only exploit the poor workers, but they bribe the dishonest lawyers and the dishonest politicians and legislators, and then the consequence of their acts would fuck the whole economic and social situation. It has a long story in the US history. But just take look at the current economic crisis, the mortgage crisis. Some groups of rich people f-u-c-k-ed the whole economic conditions, but these troublemakers are still free and live a life of luxury. They enjoy the luxury of hit and run.