Hey there, time traveller!
This article was published 14/10/2012 (1594 days ago), so information in it may no longer be current.
Your Oct. 12 editorial, More than Big Bird on block, addresses the need for the U.S. to rein in its deficit spending. Deficits always involve two sides of the balance sheet: spending and revenue.
Governments need to pay their bills, and citizens need to pay their taxes.
During the 2000 election, the U.S. was projected to pay off its debt by now, and Al Gore and George W. Bush actually debated what to do with the surplus.
Since then, spending went up and taxes went down, both on wars in Afghanistan and Iraq, but also on domestic programs -- agricultural subsidies and health care.
One of the most harshly criticized was the Republican Seniors' Prescription Drug Benefit, which committed the U.S. government to spending without restraint.
It literally had no budget cap and guaranteed that the U.S. government would not negotiate with drug companies for better prices. It costs the U.S. government $86 billion a year -- nearly 200 times the cost of public broadcasting.
One Republican economist, Bruce Bartlett, wrote that the reforms "added $15.5 trillion (in present value terms) to [U.S.] indebtedness."
The U.S. could achieve billions in savings and continue to provide coverage just by allowing government to negotiate a better price with drug companies, who could still make a profit, though a lower one.
The "fiscal cliff" has two sides to it: a tax hike and spending cuts. Because of loopholes, the effective U.S. tax rate is much lower than the "book" value. There is plenty of room for reform on both spending and revenue that can bring the U.S. back to an even keel.