According to CNN, the total cost of the tax cut deal between President Obama and the Congressional Republicans will be approximately 860 billion dollars. According to the article, this is more than:
· The Iraq and Afghanistan Wars from 2001-2008 ($752 Billion according to CBO)
· The stimulus bill ($787 Billion over ten years, from CBO)
· The entire domestic output of South Korea last year ($832 Billion says the World Bank)
The report goes on to explain that 64% of the cost (%545 billion) would be to extend the Bush tax cuts for two years, the majority of which goes to the richest 2% in the country. The remaining 36% goes toward the other concessions that President Obama negotiated: the 2% reduction on Social Security payroll taxes for one year, the extension of unemployment benefits, etc.
Reasonable people can and do disagree as to the merits of this tax cut deal. What frustrates me is that it will add nearly another trillion dollars to the national debt, which currently stands at about $14 trillion dollars. We, as a nation, are not really serious about doing anything to address our long-term fiscal stability as a nation. Even the Tea Party movement, which began over outrage at Congress spending $790 billion for a fiscal stimulus package a few years ago, is now strangely silent on a proposal that will spend an additional $860 billion.
However, I do understand and partially (and reluctantly) approve of the goal to provide short-term economic stimulus and to do something to help to the lower and middle classes in hard economic times. But at some point we will have to come to terms with the simple fact that the budget will not magically fix itself if we continue to cut taxes and increase spending. Each generation seems to deal with the problem by kicking the can down the road for the next generation (i.e. our children) to deal with. I’m sure they will write us a thank-you card for it when it gets to be their turn.