This is a note on the federal budget, a must read for the pro-small-government rich people.
The complete 134-page document can be found here [PDF]. For time-conscious readers, let me show you the summary tables.
Look at the Mandatory programs, totaling $24 trillion from 2010 to 2019, or 60% of outlays. The details:
Social Security: $8.8 trillion outlays on $8.6 trillion social security payroll tax, 2010-2019. It seems balanced, but remembering that it’s pay-go based (paying yesterday’s benefits from today’s income). America is aging.
Medicare & Medicaid: $10 trillion outlays on $2.5 trillion Medicare payroll tax, 2010-2019. This is really, really bad. The president is trying hard to save money and reduce cost on this, but the problem is huge. Since I don’t see the possibility of a benefit cut, prepare for a Medicare tax hike.
Other Mandatory: i.e., veteran benefits and others from the Washington fund family, of $5.4 trillion. Blame the terrorists.
TARP and Financial Stability: $0.247 trillion leftover of TARP and another $0.25 trillion marked as Placeholder for potential additional financial stabilization efforts, or TARP 2.0. If that’s all it is, it will be quite some efforts, indeed.
Geithner promised to level it up to $1 trillion or more to de-toxicate the banks. For the astute investors to accept a price other than the market price (why bother otherwise?), he has to provide some guarantees or loss-sharing agreement. Hope he’s a good negotiator.
Tax Cut: The president kept his promise to cut tax of 95% and raise that of the better off – not a popular decision in a time of recession. The net effect 2010-2019 is $-300 billion, $940 billion cut for the former and $636 billion income from the later.
A quarter million north, don’t be upset. The budget also includes $4.9 trillion interest payment on treasury bills. Invest in America and earn the tax hike back.
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