To ease surging budget deficits, Americans prefer cutting federal services to raising taxes by nearly 2-1 in a new poll. Yet there is little consensus on specific, meaningful steps -- and a wariness about touching two gargantuan programs, Social Security and Medicare.
With the federal deficit at $1.3 trillion and conservative members of Congress talking about ways to trim government spending, a newly released report by the National Taxpayer Union (NTU) and the U.S. Public Interest Research Group (PIRG) proposes $600 billion in federal budget cuts over the next 5 years. In a "strange bedfellows" confab, the right-leaning NTU and left-leaning US PIRG have highlighted 31 specific examples of wasteful government spending that they say can be eliminated.
In the report, Toward Common Ground: Bridging the Political Divide to Reduce Spending, the 31 examples fall into the categories of ending wasteful subsidies, improving contract and asset acquisition, improving program execution and government operations, ending wasteful or outdated military programs and systems, and aligning military spending with current needs.
Read the rest of this entry >>Hubbard, dean of Columbia Business School, joined Dan Gross and I to discuss the "major structural imbalances" facing America, chief among them being the government's profligate spending.
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ormer Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing.
“Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said.
Greenspan rebutted “misplaced” concern that reducing the deficit would put the economic recovery in danger, entering a debate among global policy makers about how quickly to exit from stimulus measures adopted during the financial crisis. U.S. Treasury Secretary Timothy F. Geithner said this month that while fiscal tightening is needed over the “medium term,” governments must reinforce the recovery in private demand.
The Treasury Department said Wednesday the April deficit soared to $82.7 billion, the largest imbalance for that month on record. That was significantly higher than last year's April deficit of $20 billion and above the $30 billion deficit private economists had anticipated.
