Wednesday, February 24, 2010

America's budget deficit.Mr Sen blogs on Paul Krugmans blog at NYT.

About Us budget deficit .MR Sen comments from India on Paul Krugmans(nobel laureate new york times columnist) Blog in NYT.
Seams like a simple solution.go figure.

There is no way, but to:

1) Increase revenues; i.e increase taxes and hope that employment will also start to rise.

2)Reduce spending. The two biggest expense tickets are

(a)defence at above $700 billion, more than the rest of the world combined. The USA has a little above 5% of the world's population and spends more that 50% of the total world wide spending on defence. The ratio will be better if we compared the size of the GDP of the USA against that of the entire world. But, still, it is horribly lopsided.

(b)health care costs, which are bankrupting Medicare,Medicaid and US companies wherever the employers are paying. It really does not matter who pays; weather it is the Federal Govt., the insuarance companies, the employers. It is a huge cost/tax on the economy.How huge? Take a look:

Healthcare costs the Japanese $ 2,700 per person per year. In the USA it costs $ 5,800 per person per year.Thats a differance of $3,100, per person, per year. Given a population of 300 million(at least),the USA is paying $ 3,100 X 300,000,000 per year, over and above what the Japanese are paying. That amounts to $930,000 million per year.

Solve these two and bang goes your deficit and your national debt.


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