Short thoughs on the Federal Deficit
The other day, my Finance professor gave a fascinating rant about the Federal Deficit. He gave a mini-lecture over the United States’ budget problems. He showed us an alarming pie-chart where it cut up government spending into different sections. He showed us that the government is spending $1.30 for every $1 it receives; this is a major problem because our federal deficit could soon reach 15 TRILLION dollars, an unprecedented high. Also, according to the Wall Street Journal, many major states are startlingly close to bankruptcy and will receive no Federal government bail-out. When one student noted a seemingly glaring hypocrisy, the Federal Government will bail out large private companies but not states, Professor Laplante countered with one of his favorite quips: “Those are just peanuts [compared to what it would take to bail out California].”
Above is a very telling graph of the 2010 federal budget. You can see that the largest expenditures are Social Security, the Department of Defense, Medicare, and Unemployment/Welfare/mandatory spending. You can see that two of the top four expenditures are related to the elderly and otherwise incapable of holding a job. When we are spending thirty percent more than we have, doesn't this seem like a problem? The government has made a promise that it can't hold in the long-run. In the short-run they are acting irrationally.
My professor's awesome and impassioned response to this dilemma will forever remain etched in my memory. When speaking about what politicians will have to do to fix the problem, he noted that the four pieces that represent the largest slices of the pie are what needs to change and that "everything else are peanuts". In the most impassioned voice I have heard in years, Professor Laplante spoke:
"Any politician who wants to blows sunshine up your dress and tell you it can all be done... is a fucking liar."