Compromise: It is actually possible (probably)!



It is no secret the House of Representatives has been debating a new budget for the past few months with little success. With exaggerated talks of financial collapse, murmurings of the ‘fiscal cliff’ and ‘sequester,’ the House of Representatives has had their hands full trying to get a balanced budget passed. While the house still has not done that just yet, they have taken a large stride toward passing that budget plan.

The House voted 318-109 to approve legislation that essentially keeps government agencies and programs from shutting down. It holds off lapses in service and furloughs for government employees through September 30th while the two sides continue to debate.

This comes in conjunction with the ‘sequester’ bill that was already passed by the senate which keeps $85 billion in spending cuts in place. The Pentagon alone is set to share $46 billion of that.

While the House was able to keep the government from partially shutting down, there is still considerable ground to cover before Democrats and Republicans reach an agreement on the budget. Chairman of the House Budget Committee, Paul Ryan (R-WI), proposed a non-binding budget resolution that passed 221-207 almost exclusively along party lines. Unlike the Democrats’ proposal, Ryan’s budget aims to reduce the deficit over a 10-year period, eliminating it entirely by 2023.

Democrats, on the other hand, propose a budget that would have a deficit of $400-$600 billion over the next decade. Democrats argue that this would be economically sustainable, which it would, assuming the U.S. economy grows at the same rate for the next decade. In this point the flawed thinking of the Democrats’ budget plan is revealed.

If the GDP growth of the U.S. could be said to be the same for the rest of the future, there would be no reason to eliminate the deficit or any of the debt level of the economy. The only reason the debt level becomes a liability is when the future growth rate of the U.S. economy is not above the level the debt is growing, and the U.S. is forced to renege on payments.

One way or another, the Republicans will drive a resolution through or Democrats will find some way of drawing Republicans to their side. One budget says that we cannot keep accumulating debt at current levels or possibly even lower. The other side says we have nothing to worry about in the near future, and we would be wise to take on a optimal level of debt to spur on growth in the economy.

Whichever is successful is telling of the mindset of the nation.



By: Aaron Overfors

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