The federal government’s budget
It’s been 20 years since the federal government last had a balanced budget with a small surplus, and the national debt then was $5.1 trillion. By the end of the current fiscal year on Sept. 30, the national debt could be more than $25 trillion. What happened?
There were two debt-funded tax cuts and two debt-financed wars and a new debt-funded Medicare drug benefit, plus original Medicare costs skyrocketed. Additionally, the debt-financed economic bailout for the Great Recession also helped to more than double the national debt to $11.1 trillion by the end of the 2009 fiscal year.
Another debt-funded tax cut in 2017, plus 2020 debt-financed stimulus programs to offset the economic effects of the coronavirus pandemic could easily send the national debt close to or over $25 trillion by the end of September. So what’s the answer?
It’s hard to cut the federal government’s spending so the answer is a tax increase to raise revenue and a possible takeover of the nation’s healthcare system by the federal government, which already operates the VA healthcare system and the financial operation of Medicare that needs more money to cover its costs associated with the retirement of the Baby Boomers. So what’s the solution?
A minimal increase in the top income tax rate from 37 percent to 40 percent and increasing the 15 percent tax rate on capital gains and dividends to 40 percent also would increase tax revenue. In addition, increasing Medicare premiums to cover actual costs and increasing the corporate income tax rate from the current 21 percent to 28 percent or more would also help to balance the federal government’s budget.
DAVID L. FAUST