Mesquite Citizen Journal

Mesquite Citizen Journal

The Consequences of Budget Control Posting Date: 08/04/2011 Michael McGreer

The Economic Policy Institute reports that the Budget Control Act of 2011 will take 1.8 million jobs out of the economy and slow economic growth by another 3 percent. While debate over the Act proceeded in Congress, Wall Street declined by 850 points losing 6.8 % of its value. Economists are reporting that the world's confidence in the full faith and credit of the United States has been shattered by the Tea-Party manufactured crisis over the debt ceiling. Crisis in the US market contributes to a continuing decline in the world market. The Act gives ultra-conservatives the opportunity to cut at least $2.1 trillion dollars in spending for entitlements, subsidies, defense and infrastructure in addition to other economic investments necessary to reverse the current downturn in the economy. The Act guarantees at least a dollar of deficit reduction for each dollar of debt limit increase but continues the George W. Bush era tax cuts for the wealthy and continues funding of the Afghanistan, Iraq wars and nation building in those areas. While the wars in the Middle East and nation building will continue to be funded, general defense funds are in for a significant hit. These general defense cuts are an attempt by Democrats to offset their failed attempt to get tax increases by replacing that potential revenue with defense cuts. Conservatives countered by refusing to allow cuts in Afghanistan and Iraq warfare and nation building. Many Nevadans rely on federal spending to survive. In 2008, the state received $17.3 billion in federal funding which increased the states Gross Domestic Product (GDP) from about $111.5 billion to $128.8 billion. How many Nevadans will suffer is everybody's question with no answer in sight. But one thing is certain, if fully implemented, Nevadans will see cuts in Medicare, Medicaid, and the Childcare Health Insurance Program (CHIP), Social Security, defense, farm subsidies, education, transportation, police and fire programs, and the management, protection and fire control on 84.5 percent of Nevada federal lands, waterways, and recreation sites. If ultra-conservatives get their way, individuals will work until they are 70-years-of-age to receive Social Security. Medicare will be turned into a voucher, which would be used to purchase private health insurance. Medicaid will become a block grant for states to spend as they choose, including to pay for deficits in other accounts. Instead of paying their fair share, the wealthy will receive additional tax cuts. Deductions, potentially including interests on home loans, will end or be severely limited. While they are at it, expect caps on domestic spending, and repeal the Health Care legislation, along with slashes in farm subsidies. Republicans, Democrats, and Independents need to carefully consider who they vote for, and the potential consequences of that vote. Michael M. McGreer writes on public policy. His recent book, "No Harm,No Foul, Bioterrorism in the 21st Century" is currently available online at Amazon.com. See his blog at: http://www.generations.typepad.com/.