Do you ever feel like you need a scorecard to keep track of all the various spending proposals being put forward for the U.S. federal government’s budget?
If so, you’re in luck! The Mercatus Center has put together the following chart that you can use as a scorecard to see how well each of the major proposals to date do at bringing the nation’s skyrocketing debt into control:
Some quick notes:
The varies trajectories shown above apply only to the “publically-held” portion of the nation’s total public debt outstanding. It does not include the “intragovernmental” portion of the national debt, even though this portion of the debt accounts for over 30% of the total U.S. national debt and will shift more and more over time to the publically-held side of the government’s ledger, given the currently active and much-faster-than-previously-projected depletion of the Social Security trust fund.
The CBO’s baseline budget, which relies on the expiration of major tax hikes and no new government spending to achieve its debt reductions, should not be considered to be a serious proposal. It relies on both today’s and tomorrow’s politicians to do absolutely nothing other than to follow the current law with respect to the budget exactly as it is written, which is something that U.S. politicians have proven to be unable to do for any sustained period of time where their interests are involved, with the current leadership of the U.S. Senate being the only exception in modern U.S. budgetary history, unless there is actually something to the speculation surrounding their inaction.
The Republican and Fiscal Commission proposal debt trajectories rely mainly upon spending reductions to achieve their debt reductions, although the Fiscal Commission’s proposal also employs a number of tax increases. The Republican proposal also includes a number of tax reforms that would increase the government’s net tax collections (reducing loopholes, broadening the tax base, etc.), but to a lesser degree.
Meanwhile, President Obama’s two proposals rely primarily upon major tax hikes to achieve the bulk of his projected debt reduction, seeking to preserve spending. Also, note the difference between what President Obama proposed in September 2011 and in his official budget proposal just five months later. That’s a significant increase in proposed future spending, which is why the President’s newest proposal never meaningfully reduces the national debt with respect to the nation’s GDP.
The last trajectory is the CBO’s alternative fiscal scenario, which projects the nation’s debt trajectory if today’s and tomorrow’s politicians continue to act as if there is no problem with the growth of the U.S. debt.
And that’s the scorecard! Which trajectory are you rooting for to win?