how to balance the budget?

[Schneed10]

Originally Posted by joethiesmanfan

That's great for the economy more people on government assistance and more foreclosures. The economy is not like your wallet. Curtting spening does not help an economy. That mean less activity, and that means more debt.

Pfft. JTF is going to lecture me on economics. Is anybody else amused by this?

Foreclosure is simply an evening out process, it puts the nation at a whole in no worse shape. Someone loses an asset (the house) but they also lose the liability (the mortgage). The bank who forecloses picks up the asset and also the liability. It's a zero-sum game, the net impact is none to the US Economy. The family who lost the house moves into an apartment they can actually afford, and life goes on.

If you're cutting spending by reducing wages to minimum wage, you're not putting people on government assistance. They'll make a low salary, but not so little to qualify for welfare or Medicaid. Remember, they're losing their wages, but they're not losing their benefits. They'll still have the same (tremendous) healthcare plan currently available to state workers.

I get what you're attempting to say though (albeit in an ignorant fashion): cutting government spending hurts the citizens. But if you don't bring spending into line with the tax revenue coming in, you drive the country into debt, which causes inflation and a severe weakening of the US dollar. In five years, the cost of your happy meal at McDonalds can easily go from $3 to $6.

That's the kind of inflation we saw in the 1970s and it hurt an awful lot of people. In the end, the government needs to spend whatever it's citizens can support. If the citizens can't generate the tax revenue to keep up with government spending, you end up with a lot of long-term economic pain.