Federal budget forums offer in-depth look at 'cliff'
Tuesday, Feb. 26, 2013
LWVMC is cosponsoring two forums on the Federal Budget in the first week of March with Citizens for Public Discussion.
The forums have two goals: (a) to explore how to get the federal budget on a sustainable path and (b) to demonstrate a discussion method that stresses civil discourse.
The forums will be held :
- Monday, March 4, 7:00-9:00 p.m., at Whetstone Public Library, 3909 N. High Street, and
- Thursday, March 7: 6:30-8:30 p.m., at Bexley Public Library, 2411 E. Main Street.
Both forums will follow a discussion guide published by Public Agenda titled “The Federal Budget.” http://www.publicagenda.org/pages/the-federal-budget
The forums will begin with a background presentation on budget basics. Participants will then break into facilitated small groups to discuss income and expenditure changes that would lead to a reduction in the annual deficit. The forums will conclude by exploring actions participants could take to influence the development of federal budgets.
Public Agenda is a national, nonprofit, nonpartisan organization dedicated to strengthening democracy and improving people’s lives. Through research and public engagement, it helps leaders, citizens, and stakeholders build common ground on solutions to tough public problems like education reform, the environment, and health care. Check out http://www.publicagenda.org/pages/the-federal-budget for background information on the Federal Budget, and potential solutions for balancing the budget. Here’s a sample:
Five Things You Need to Know About the Deficit and the Debt
(From “A Citizens’ Solutions Guide: The Federal Budget,” Prepared by Public Agenda, May 2012. http://www.publicagenda.org/pages/the-federal-budget )
1. A deficit happens when the government spends more than it takes in during a given year. This has pretty much been our default setting: the federal government has run a deficit for 36 out of the past 40 years. In 2011, we came up $1.3 trillion short for a $3.6 trillion federal budget.
2. When the government runs a deficit, it borrows to cover the difference. When you buy a Treasury bond, this is what you’re doing: loaning money to the U.S. government.
3. The national debt is the total amount the government has borrowed. Every time we run a deficit, we’re adding to the national debt, now well past $15.5 trillion. There are two types of debt you’ll hear policy types talk about.
4. “Debt held by the public” means money the government owes to others, which means the Treasury bonds that you, banks, and foreign investors can buy. In April 2012, this debt stood at about $10.8 trillion. Economists focus on this kind of debt because it has an impact on the broader economy. Properly managed, some public debt can benefit the economy. If public debt becomes too big, however, the risk is that it “crowds out” other investment; in other words, so much money is going into government borrowing that there isn’t enough for business loans, mortgages, and so on.
5. “Gross debt” is everything the government owes: the public debt plus what the government owes itself. Maybe you didn’t know that one part of the government can owe money to another part, but it’s pretty routine. All told, “intergovernmental debt” was about $4.7 trillion in April 2012. The best-known examples are the Social Security and Medicare trust funds, which is the money the government has borrowed from these programs over the years and must pay back. This kind of debt doesn’t affect the overall economy in the same way as debt held by the public, but the money to pay for Social Security and Medicare for the huge baby boom generation will have to come from somewhere. That means the government will have to shift money from other areas to repay these trust funds, potentially squeezing other priorities.