Balanced Budget in 5 Years?

Many Americans are concerned with the extent of how far the US government is in debt. If you go to US Debt Clock.org, it appears the national debt is increasing by about $1.3 million every minute. The current US national debt at the time of this writing is $21,147,920,000,000. The current revenue is about $3,328,652,500,000 and the spending is about $4,070,780,300,000. That means that so far this year, the federal government has spent about $742,127,800,000 more than they have brought in, indicating that our federal spending is completely out of control.

It seems the last time the US had a surplus was around 1999-2000, when the economy was booming and Bill Clinton was president. Doesn’t mean that the US was out of debt, only that the government was pulling in more revenue that it was spending? Then Clinton’s creative mortgage mandates began to reap havoc on the mortgage industry sending millions of Americans into foreclosure and bankruptcy and the nation into a recession.

In 1929, the year of the Stock Market crash, the US debt was $17 billion (the equivalent of about $240 billion today). The first time the US debt topped the $1 trillion mark was in 1982 under Ronald Reagan.

In 1999, when the US reported a surplus revenue, the debt was $5.656 trillion.

When Barack Obama took office in 2009, the national debt had grown to just over $10 trillion. By the time Obama left office, the debt had skyrocketed to nearly $20 trillion.

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The issue of a balanced budget – meaning not spending more than the government takes it – has been an issue of contention. The American people have been calling for a balanced budget for years, but it seems the chance of getting a balanced budget is pretty unlikely. One economic expert once said that a person has a better chance of winning the Powerball than Congress is of passing a balanced budget.

Sen. Rand Paul (R-KY) is hoping to change those odds. In Paul’s recent email newsletter, he wrote:

“I ran for office to put a stop to Washington’s out-of-control spending and skyrocketing debt, and I believe it’s time for conservatives to govern like conservatives!”

“Currently, Senate rules allow any senator to offer a budget if Senate leadership and the Budget committee do not report out a budget by April 1.”

‘Since that deadline wasn’t met, I introduced my ‘Penny Plan’ balanced budget on Wednesday, which will give our Republican-controlled Congress a chance to prove to the American people that it is serious about getting our fiscal house in order.”

“My proposed federal budget will balance within five years by assuming the repeal of the Bipartisan Budget Act of 2018 (BBA) and utilizing the Penny Plan.  This simply means that for every on-budget dollar the federal government spent in Fiscal Year 2018, excluding the BBA, it spend one penny less for the next five years (cutting one percent of spending each year), at which point balance is reached.  Spending would then grow at one percent after that.”

You can read Paul’s Penny Plan balanced budget here.

If the US ever expects to reduce the national debt, it first has to have a balanced budget. Spending has to be limited to the point where the government is taking in more revenue than it is spending. Paul’s proposed budget plan may be the best step towards not only a balanced budget but reducing the national debt.

 

 

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