Why is the U.S. budget deficits so high? were we not promised the budget would be balanced?

Question

I seem to recall being told just a few years ago that the budget would be balanced and there would be great prosperity for the wealthy and big business and that it would all trickle down to the rest of americans and we would all be swimming in prosperity. what happened?

Answer 1

McCain says he will balance in 3 years but Clinton did what  Conservatives promised.

plans to promise on Monday that he will balance the federal budget by the end of his first term by curbing wasteful spending and overhauling entitlement programs, including Social Security, his advisers told Politico.

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The vow to take on Social Security puts McCain in a political danger zone that thwarted President Bush after he named it the top domestic priority of his second term.

McCain is making the pledge at the beginning of a week when both presidential candidates plan to devote their events to the economy, the top issue in poll after poll as voters struggle to keep their jobs and fill their gas tanks.

“In the long-term, the only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid,” the McCain campaign says in a policy paper to be released Monday.

“The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.”

The pledge is a return to an earlier position he'd later backed away from. On April 15, McCain backed off a February pledge to balance the budget in his first term when asked about it by Michael Cooper of  The New York Times, who reported that McCain said “at a news conference … that ‘economic conditions are reversed’ and that he would have a balanced budget within eight years.”

McCain advisers admit that the document is a repackaging of previous policies, without dramatic new initiatives. Some Democratic officials had thought McCain might try to make a splash by proposing a bold middle-class tax cut.

Jason Furman, Obama's economic policy director, called McCain's pledge “preposterous." Furman pointed out that the Congressional Budget Office now estimates a 2013 deficit of $443 billion, assuming the Bush tax cuts are extended. And he estimated that McCain would have to cut discretionary spending—including defense—by roughly one-third to bring the budget into the black by then.

"McCain would have to pay for all of his new tax cuts and other proposals and then, on top of that, cut an additional $443 billion from the budget—which is 81 percent of Medicare spending or 78 percent of all discretionary spending outside of defense," Furman said.

McCain’s tour of swing states is designed to relaunch his candidacy after a high-stakes shakeup last week in his campaign organization, which has been widely criticized as soft and slow compared to the Obama machine.

Sen. Barack Obama (D-Ill.) also is spending the week emphasizing economic issues, and plans to tout the family-friendly, bottom-up benefits of his proposals.

Obama begins the week in Charlotte, N.C., with what his campaign calls “a discussion on economic security for America’s families.”

The Obama campaign sought to steal McCain’s thunder by holding a conference call Sunday to portray McCain as out of touch and not up to the job on economic matters.

McCain’s emphasis on balancing the budget is likely to excite conservatives, who have remained skeptical of his candidacy, and provoke derision from Democrats, who will argue that it’s a warmed-over version of proposals that President Bush failed to enact.

The budget was in surplus when Bush took office but now is deeply in the red—$410 billion, the White House projects, blaming the demands of war and homeland security.

McCain begins his tour in Colorado, then goes on to Pennsylvania, Ohio Michigan and Wisconsin—five of this year’s 10 most closely contested states.

Answer 2

I'll do what I can to explain.  But let me first answer your final question.  Its regarding the funny term "voodoo economics".  I just find it funny hearing it.  Anyway, that's not important.  What's significant is that the term 'voodoo economics' was a term used by George HW Bush to describe Governor Ronald Reagan (RIP)'s economic plans for his Presidency (he was running against GHW Bush at the time, who I think actually had a good economic policy but that's besides what's important).  Reagan's plans had similarities to Bush's ones- in that they have high tax cuts (particularly for the rich if I'm correct) and much spending.

The difference between Bush's and Reagan's is that the latter may have actually helped the economy (yet hurt it a lot more (lot more than helped) a few years later).  Bush's tax cuts their effects have been debated too.

Now why are budget deficits so high?

First of all not all of the problem can be pointed directly at Bush.  the economy was having a slowdown in 2001 and that was not Bush's fault.  It was starting to be in a bust following a huge wave of success.

But much of it is indeed Bush's own fault.  His fiscal policies have been pretty bad.  He had similar plans as Reagan.  He had big tax cuts, and has extended them for many years.  The problem with his tax cuts is that he gave a big portion of it to the rich, and the rich don't spend much of their money.  (They don't in proportion to others).  So the deficit has only increased and they haven't helped the deficit.

Another big- perhaps the main- cause of the deficit is the other part of Bush's policy.  High spending.  The President has spent so much money in recent years that even a few conservatives have voiced concerns.  Its awful. He's spent much of it on two wars- one which has a lot of support but had no great plan and the other which has lost a bunch of support and only recently had a good plan.  The problem is, we're spending so much on the wars.  And we would have spent less if our leaders had created a good plan and implemented it.  I disagree on John McCain on many issues, and am not voting for him, but I do agree with him on this for Iraq-- We didn't have an adequate plan.  Nor did we have ENOUGH troops.  The US did not have very many soldiers (sure it had over 100,000 but it needed many more).  Thanks to not having adequate soldier presence and having a poor plan, we are stuck in Iraq and only lately has progress been made.  The Iraqis also need to spend more money for their nation because we spent so much for them.  As for Afghanistan, we did not have a good plan.  No one can deny that things have not been as great in Afghanistan (as great as they could be).  I'm sorry if I'm wrong but what I hear is that things just aren't as good as they can be.  And according to a few, we didn't have a good plan either.

So we're stuck spending SOOO much money and having high tax breaks.

Other reasons why we have a deficit is that we are spending a lot on social security.  We will be spending perhaps even more- or needing to raise tax revenue- if what happens (worse scenario) occurs soon.  There are a lot of baby boomers.  A huge number of them will retire within maybe about 5-15 years.  That's a conservative guess.  As they grow older and retire, younger people will have to pay more money.  So will the government.  Its going to be hard to sustain and they may want to consider raising the cap a bit as in raising the minimum income in which people will have to pay for it (i say the wealthy will need to pay mroe for social security b/c they will not be as hard affected as the poor and middle class), they may need to increase the retirement age to reduce the money spent on Social Security, and do other things.  We'll have to see.

We're also spending a lot on education.  Unfortunately, I don't think things have gotten better.

The nation needs to have the GAO or other independent groups- including one with economists of all beliefs- to examine our spending and see where we are being wasteful.  They need to see our faults and help correct them- send the government advice about how to deal with the high spending- cut it down.  They will need to get us to cut down the spending.

Answer 3

How can you balance a budget if you don't stop spending frivolously.  Our biggest expenditure is this war, second has to be all of these tax break he is giving his rich buddies.

Answer 4

Interesting.  No answers from the conservatives.  Seems they attack the 'evil' liberals because they need to distract people from looking at their failed ideas and policies.

Answer 5

1) the internet crash of 2001. due to junkbonb Companies.

2) the wars started, Afghanstain, Iraq.

3) oil prices started to increase

4) Federal Reserve printed more money

5) the dollar falls below the Euro for the 1st time.

6) the Federal Reserve prints more money.

7) Intrest rates for the dollar has been lowered 17 consecutive times.

8) junkbond companies, now call investment company(bankers, something), crashed another market, the housing market.

9) the Federal Reserve printed more money.

10) Instead of costing 600 billion dollars, it is now being estimated that these wars will cost this Nation 4 Trillion dollars before their over.

11) the Government has grown larger than it's ever been at any time in our History, under any president.

12) they spend more money than any other Administration has ever spent.

13) the dollar under George Bush has decreased in value by 41%.

14) oil has increased under George Bush from $20 dollars a barell to $145 ab.

Rush limbaugh does not have to pay taxes on his 400 million dollar salary, like a famous lady once said ,(she left her fortune to her pet) only poor people pay taxes.................