Economics @ ITT

Posted in economics, Moral Hazard, Policy Issues by ittecon on April 12, 2010

Most Americans seem to believe that we should tighten our belts and balance the budget. They are willing to make budget cuts, but not where it would make any significant difference. As this article, The Futility of Budget Cuts, points out, people are more than wiling to cut mass transit, housing, agriculture, environment and foreign aid. The problem is that all tolled, these programs barely amount to 3 percent of the budget. The programs large enough to make a difference are defense, health care programs, and social security. Of course, defense is a sacred cow in US politics, there is no political will to overhaul the health care systems in any meaningful way, and social security has a funding problem in general, so we are told we are left with the choice of taxes, taxes, or taxes. And so it  goes…

The blue bars represent what people suggest should be cut, and the red bars represent the percentage of the budget.

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