The Collapse of the USSA

Incoming Speaker of the House, John Boehner, fresh off of ridding Congress of those out-of-control, tax and spend Democrats announced his first big plan to cut the budget today and he started close to home - in his and other congressman and senator budgets.

He stated:

“I’m gonna cut my budget — my leadership budget — 5 percent,” he said, in video released by CBS. ”I’m gonna cut all the leadership budgets by 5 percent. I’m going to cut every committee’s budget by 5 percent. And every member is going to see a 5 percent reduction in their allowance. All together. that’s 25, 30 million dollars that likely would be one of the first votes we cast. We can start with ourselves.”

Wow!  $30 million out of a $3.9 trillion budget.  That's 0.0007%!

Just out of curiosity, I went to the US Debt Clock website and timed how long it took for the US national debt to increase by $30 million.  The amount of time?  13 minutes.

Therefore, if the amount of time spent enacting this budget cut takes up more than 13 minutes it will, literally, be a waste of time.

To be fair to John Boehner, we're sure he has other big plans to cut the budget.  But, here is the problem, even if he cut the US government discretionary spending by 100%, it still isn't enough.  Just take a look at the numbers:

Here is the 2010 tax receipts for the US federal government:

• $1.061 trillion – Individual income taxes
• $940 billion – Social Security and other payroll tax
• $222 billion – Corporation income taxes
• $77 billion – Excise taxes
• $23 billion – Customs duties
• $20 billion – Estate and gift taxes
• $22 billion – Deposits of earnings
• $16 billion – Other

Now, notice how the US government includes Social Security tax, taken off of paychecks as being INCOME??  No company could ever do that.  But the US government can.  Why?  Because they've got all the guns and can do what they want.

But the money taken in from payments into Social Security is obviously not real income of the government.  That money, theoretically, is supposed to be set aside to pay for Social Security in the future.

So, if you exclude Social Security receipts, the total "income" (tax/theft) of the federal government for 2010 was $1.44 trillion.

Here are the Mandatory and Discretionary spending numbers for 2010:

Mandatory spending: $2.184 trillion

• $677.95 billion – Social Security
• $571 billion – Other mandatory programs
• $453 billion – Medicare
• $290 billion – Medicaid
• $164 billion – Interest on National Debt
• $11 billion – Potential disaster costs

Discretionary spending: $1.368 trillion

• $663.7 billion – Department of Defense (including Overseas Contingency Operations)
• $78.7 billion – Department of Health and Human Services
• $72.5 billion – Department of Transportation
• $52.5 billion – Department of Veterans Affairs
• $51.7 billion – Department of State and Other International Programs
• $47.5 billion – Department of Housing and Urban Development
• $46.7 billion – Department of Education
• $42.7 billion – Department of Homeland Security
• $26.3 billion – Department of Energy
• $26.0 billion – Department of Agriculture
• $23.9 billion – Department of Justice
• $18.7 billion – National Aeronautics and Space Administration
• $13.8 billion – Department of Commerce
• $13.3 billion – Department of Labor
• $13.3 billion – Department of the Treasury
• $12.0 billion – Department of the Interior
• $10.5 billion – Environmental Protection Agency
• $9.7 billion – Social Security Administration
• $7.0 billion – National Science Foundation
• $5.1 billion – Corps of Engineers
• $5.0 billion – National Infrastructure Bank
• $1.1 billion – Corporation for National and Community Service
• $0.7 billion – Small Business Administration
• $0.6 billion – General Services Administration
• $19.8 billion – Other Agencies
• $105 billion – Other

The numbers are pretty simple.  The US government had total real tax receipts of $1.44 trillion in 2010.  This only pays for 66% of the Mandatory Spending, even if you got rid of 100% of the discretionary spending.

In other words, in order to balance the budget the government would have to cut 100% of Discretionary Spending and 34% of Mandatory Spending.  What would that look like?

To do this, they would have to close every military base and lay-off every serviceman in the Armed Forces, close every public school and fire every teacher, shut down the Department of Homeland Security and every other government agency and, as well, cut all Social Security, Medicare and Medicaid spending by 34%.

John Boehner's got quite a bit further to go!

But whether he does the cutting himself or not, these cuts will have to be made.  They will either be made by choice or by force as the rest of the world is about to take away the US' credit card.  When they do, and that time is very near, the USSA will collapse just as the USSR did, and for the same reasons: Because they both were or became centrally planned, socialist/communist economies.

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Comments

[nimrod]

Heck, it is all based on central planning by the central banks. If communism and socialism central planning didn;t work, how do we think that central banking would be any different?

[niphtrique]

You have democrats increasing spending and republicans lowering taxes.

You export jobs and you import goods and services.

As long as your political system is corrupted as it is, it will go nowhere.

Mr. Boehner probably has already been bought and paid for like nearly all the others.

[George]

The comment about firing every teacher and closing every public school is incorrect, well over 90% of teachers are paid via local, property & State income taxes. In regards to having no defense, a portion of the National Guards are State funded for State missions (e.g. floods, )

[Rusty Brown]

Argue and quibble all you want - the bottom line is: IT CAN'T BE DONE!

[billhopen]

all debts that can't be repaid, won't be. National debt figures have become abstract.....what matters is if we can't make the interest payments, what you have to watch is interest rate for short term roll over of our carried debt. -every 1% rise is $100,000,000,000. taken out of "spending" that must go towards "debt service"...., that's when it all goes crazy 3%, 5%, 10% instead of 2% money....that's when we spin the presses and everyone gets paid back nominally in Zimbabwei bucks. After the turmoil, we reset and start again...only this time no one will trust us to be the keeper/creator of world's reserve currency, and we will not have the credit to spend ourselves into being the super power. it will be a very different world

[Seeker]

I have one correction to the article:

The Federal budget does not keep our local schools open. They would not have to close our schools by cutting the budget to the Department of Education to zero. Our local and state taxes pay for our public schools.

The Department of Education does not

* establish schools and colleges;
* develop curricula;
* set requirements for enrollment and graduation;
* determine state education standards; or
* develop or implement testing to measure whether states are meeting their education standards.*

Here is where to find out what the Department of Education actually does:
http://www2.ed.gov/about/overview/focus/what_pg2.html#howdoes

[Frank Richards]

You are grossly overcounting social security and medicare. If you count the expenditures, then you must also count the tax income.

I fully understand that valid actuarial calculations are quite complex, but even a simple dollars in vs dollars out number is orders of magnitude more accurate than what you put up.

[David Reischer]

Taps Funeral music is already playing

Can't you hear it ?

Buy gold, silve and comic books

[thinker]

To who do we owe the INTEREST? China? Or the Fed? A private entity... sigh wake up people.

[Spock]

US GDP in 2009 was $14T; not an insurmountable burden, IF we act responsibly. Unfortunately, letting spending go up and taxes do down isn't exactly responsible.

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