Today the federal government will release a nearly $5 TRILLION annual budget proposal for Fiscal Year 2021 (which begins on October 1st of this year).
Needless to say, that’s more money than any government has ever spent in the history of the world.
And there are a few things in particular that are worth highlighting:
First– this budget proposal would create yet another trillion dollar annual deficit. And that’s simply astonishing.
Think about it: this is supposed to be the ‘everything is awesome economy’. The stock market is at a record high. Corporate profits are at record highs. Unemployment is at record lows.
If the government can’t make ends meet when the economy is this good, how many trillions will these people burn when the next economic downturn arrives?
Second– and perhaps even more importantly– the budget proposal aims to *cut* funding to Medicare and Social Security by hundreds of billions of dollars over the next decade.
Bear in mind that these programs are already insolvent, i.e. they can’t pay for the obligations they’ve already promised. AND they also lose money according to their own financial statements.
Right on page 5 of the 2019 Social Security annual report, the trustees explicitly state that “Trust Fund asset reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2035.”
And on page 2 of the report, they state that “Social Security’s cost has exceeded its non-interest income since 2010,” and that the cost of Social Security for 2019 exceeds non-interest income by $81 billion.
The Medicare annual report is even more bleak in its outlook:
“The Board projects that expenditures will increase in future years at a faster pace than either...