As American As Apple Pie

There's been a lot of Strum und Drang lately regarding the 2010 budget. (Strum und Drang literally means Storm and Stress, which is an excellent phrase for the nonsense emanating from D.C.) While I don't necessarily want to add more manure to the pile of dung that's already been deposited by our elected 'leaders' (*snort*), I think the pie charts below do an admirable job of summarizing the problem and providing a few clues about how to solve it.

The one above has been floating around the Internet for a while. It points out the absurdity of the partisan squabbling over a few crumbs ($61B vs. $33B) while we're facing a deficit orders of magnitude larger.

The $61B vs. $33B debate is not the problem, but rather a symptom. The problem is the massive amount of mandatory spending - approximately 60% of the $3.85T (yes, that's T as in Trillion) annual budget, as shown below.

Wasting time on the current budget cuts is, to borrow a trite phrase, akin to rearranging the deck chairs on the Titanic. As the above chart clearly shows, we simply must get the 'mandatory' spending under control. That entails meaningful reforms to Social Security, Medicare, and Medicaid. Stop the bleeding first, then worry about the bruises.

Finally, we have one more chart that shows where the government's money comes from, and where it goes.

(Please keep in mind that it's not really the government's money - it's OUR money, taken from us at the point of a gun.)

Spending cuts are one side of the equation. Revenue is the other. I'm a firm believer in the Laffer Curve, which, in a nutshell, argues that if tax rates rise beyond a certain level they discourage economic growth, thereby reducing government revenue. So IMO the solution to our current economic woes is to get spending under control. If we do that the revenue side should take care of itself.

For you policy wonks, an excellent video explaining the Laffer Curve is posted below. An equally excellent article illustrating the Laffer Curve in action at the state level may be found here.

Now if only the yammering idiots in congress would listen to me...