Politics: The Sequestor

Image source: http://upload.wikimedia.org/wikipedia/en/2/2b/U.S._Federal_Spending_-_FY_2011.png

The sequestor says that over ten-years, $600 billion needs to be cut in discretionary spending and $600 billion needs to be cut in defense spending. Thus, the target would be $60 billion in each of the two items per year.

Of course, looking at the chart, that leaves 63% of the budget untouched. The 6% that is interest payments is untouchable in the sense not paying it would be defaulting. As a political matter (and perhaps as a legal one as well), the other mandatory, Social Security and Medicare & Medicaid is virtually untouchable.

And that is really the problem: it is hard to balance a budget when 57% of the budget essentially isn't on the table for cuts.

Imagine if we could get at all segments of the pie except interest payments?

How about cutting $24 billion from each of the five pie segments?

Or how about slicing $20 billion from each of the five portions and close loopholes to raise $20 billion in new taxes?

Or how about $16 billion from the five broad categories of spending and raise taxes by $40 billion?

Under the 16/40 scenario, if indeed, about 53% of the people pay Federal Income taxes (159 million of 300 million people) then that is about $252 more per tax-payer.

As you can see, opening all parts of the pie makes things more manageable.