Thursday, December 12, 2013

Congress Passes A Budget


By Norris McDonald

I would like to see a balanced budget and a significant reduction in the debt.  Of course the budget that just passed in the U.S. Congress is not taking us in that direction.  Our budget is about $6 trillion and we spend about $7 trillion lately, give or take a hundred billion or so here and there.

The budget that passed this week does not address the underlying issues that prevent us from being on a fiscally sustainable path.  I am glad that it does not replace the full sequester.  The sequester was taking us in the right direction.

The agreement deals temporarily with preventing a cut in Medicare's physician reimbursement rate, but it needs to be dealt with on a permanent basis.  I would get the government out of the health car business.  But that isn't going to happen so I guess the reimbursements need a permanent fix if the government is going to stay in that business. 

The budget deal does not extend unemployment insurance and on December 28, 1.3 million Americans will lose their unemployment insurance. They will be joined by an additional 3.5 million Americans in 2014.  Unemployment insurance should last for 3 months. 

I want a small, efficient government that operates within its budget.  I don't know if any other country has ever printed more and more money ($80 billion per month from Treasury to The Fed) and artificially kept the interest rates low to prevent inflation, but how long will this experiment work?  I do not want to find out.

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