One Bad Ugly Bill
There is a lot of talk about budgets these days with the R controlled house passing the BBB with no votes to spare. That led me to start looking at the 2025 Federal Budget as it now exists. As you probably know, that Big Beautiful bill is very ugly for a lot of folks, but they got it half right because it is big. Some say it is the biggest transfer of wealth from the poor and middle class to the rich in the sordid history of US taxation policies. It also tries to kill the good clean energy initiatives of Biden and the rest of the World.
Just to let you know how Artificial Intelligence can lead down an alley that gets your brain mugged, I googled "what is the largest expenditure in the US Budget" and the answer it gave me was right but wrong.
AI responded: The largest single expense in the U.S. federal budget is Social Security.
- Social Security: Accounts for 22% of the total federal budget.
- Medicare: Represents 14% of federal spending.
- Medicaid: Takes up 10% of the budget.
- National Defense: Constitutes 13% of federal spending.
- Net Interest: Interest payments on the national debt are also a significant expense at 14% of the budget.
- Other Mandatory Spending: Programs like veterans' benefits and food stamps fall under this category, accounting for 16% of the budget.
- Non-Defense Discretionary Spending: This includes areas like education, transportation, and scientific research and accounts for 15% of the federal budget.
Yes, if you look at the official budget from the White House, 22% of the budget is about 1.54 trillion which is about right. But what is NOT included is the 1.29 Trillion in receipts for SS which means that the system spent about .30 trillion (300 billion) more than it took in. (not including medicare receipts)
And when you add the corpus and interest gained by Social Security's US treasury bond fund, the actual expense to the treasury is closer to zero. With asset reserves of about $2,908 billion ($2.9 trillion) at the end of December 2020, the system has just started to decline. Asset reserves have declined slightly to about $2,721 billion ($2.7 trillion) by the end of December 2024. To halt this decline, Congress must remove the caps on income for the wealthy and extend the retirement age of white collar workers.
But by far, the real single largest expense (excluding debt) in the US Budget is Defense.
And that is about 900 billion. And the BBB would increase that by another 100 billion.
Ezra Klein says:
Trump’s “big, beautiful bill” is the cruelest and most irresponsible piece of domestic legislation to be seriously proposed in my lifetime.
When you think about this bill, you should think about risk. It would increase our risk of a fiscal crisis by adding a hefty sum to our nation’s debt, at a time when we’re alienating the countries that typically buy our debt. It would slash food stamps and strip health insurance from millions of people, increasing the risk that the safety net won’t be able to catch any of us, at a time when President Trump’s tariffs have increased the risk of a recession.
According to Morning Joe, "Think about this: From George Washington's term through the end of Barack Obama's term on Jan. 20, 2017, the United States of America did not increase the national debt by as much as Mike Johnson's budget increases the national debt over the next decade."
The BBB is one Big Bungled Bunghole.
But what the Citizens of this Country and the World need right now is for the US do some honest work on its situation. And first of all, we are not a business nor are we a household. We are the social fabric that preserves and protects its citizens.
As of May 30th, 2025, we are about 36 Trillion dollars in debt... that's a little over 100,000 a person. (another good reason to keep the family small)
Interest paid on that debt this year is about a Trillion dollars. If interest rates stay where they are right now that will grow to 1.5 Trillion in 7 years.
If you look at our receipts the thing that sticks out is the amount of Tax that business pays (.46 Trillion) versus the amount of tax that is paid by individuals (2.64 Trillion).
You can see by the current Biden White House Budget that Outlays are about 7 Trillion and Receipts are about 5 Trillion.
As for Receipts, individuals pay 3 Trillion (not including Social security and Medicare) and Business pays .5 Trillion (excluding SS). It doesn't seem like a smart time to cut taxes. Quite the opposite. Business should pay for the defense department, especially since they get the money anyway. Citizens should arguably pay for half of the non defense discretionary items of another Trillion.
That would mean Business pays for the military and half of the non-military items or about 1.5 Trillion and individuals pay for all the rest of the domestic spending which is about 4.5 Trillion RIGHT NOW. That cuts the deficit to less than a Trillion a year. (interest will remain the same)
Cutting Taxes for the wealthy and big business in these times is the wet dream of the oligarchy and a ridiculous zombie relic of a GOP past.
Yes, business will raise their prices to pay the tax, just like they would if they paid a tariff.
But tariffs will affect those who live pay-check to pay-check harder.
And speaking of relics of the past, it is now time to ponder the nature of international finance. With the issuance of more and more Bit Coin and other block chain constructions combined with the current political acceptance for uninsured FIAT money, dark clouds are on the horizon.
Ironically and in time, these currencies will erode the government backed Fiat currencies.
And the normal swing between equities and bonds
will be pulled over by the gravity of the imbalance.
And markets will heave.
And a new balance sheet will arise.
Labels: artificial intelligence, economic philosophy, respectful society, the world
posted by oZ @ 12:56 PM
2 Comments:
Well said, Oz!
Senate passed a version out today by one vote
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