Wednesday, November 23, 2016

Trumpocalpyse Day 3: A Penny Saved Is A Drastic Reduction In Government Services

Donald Trump's proposals, presumably a reason why people voted for him, included the 'penny plan.' This is a plan to reduce federal spending by 1% per year. The Washington Post, which celebrated the election of Trump by having a woman wear a dress made of napkins, which guests were told to take off of her one at a time, reviewed Trump's Penny Plan back in September, when nobody was taking him seriously yet.

Like the old thing about how if I give you a penny today and then double it tomorrow and keep on doing that you'll be a millionaire in a month, those cuts add up, namely because federal spending grows each year.

Here is how federal spending (other than defense spending) grew under each president, from the Cato Institute:



Under even theoretically conservative presidents spending increased each year, and Bush I and Bush II were both bigger spenders than Clinton.

If the federal budget grows by 1.9% per year, and you cut it back 1% per year, each year you cut a bigger portion. If the first year the budget is 6,000,000,000,000, you must cut 60,000,000,000.

The next year, the budget would grow by let's say 2%, or 120,000,000,000 -- so your expected spending would be 540,000,000,000+ 120,000,000,000, or 660,000,000,000,000. Cutting 1% requires cutting 66,000,000,000 this year -- 1% more than last year.

That's a best case scenario.

Within 10 years, as the Post noted,



The budget would need to be cut by 23% to meet the plan.

The Penny Plan would not affect the governments biggest obligations: defense, Medicare, and Social Security. The Penny Plan could not, without destabilizing the world's economy, affect the debt service the government must pay on its outstanding obligations (the National Debt). The Penny Plan would reduce all other government spending, by 23% from where it is now, at least.

That may sound good to you, but keep in mind that even Trump's own policy site notes that our infrastructure is crumbling and we need to modernize the FAA, air traffic control, and our bridges, to avoid a disaster.

I hope the states can pay for all that stuff. Without the federal highway matching money they get now, of course, because that too will be cut by 23%, or more. And without any of the other money states get from the US government, which will be tough, given that 31.5% of all the money each state spends comes from the federal government.

2 comments:

Andrew Leon said...

Except that Paul Ryan has a plan to cut Medicare completely,so you can take that right out of the budget, and Trump has suggested that we should default on our loans; after all, that's what he does, and it has worked for him.

Briane Pagel said...

Well, all right then! Government is fixed. Let's all go home for the weekend!

Wouldn't it be awesome if EVERY SINGLE AMERICAN defaulted on their loans AT ONCE.

I mean we came close to it in 2008, but I'd like to see everyone in the US just stop paying every single loan.