Do Nothing Looks Better

A few months ago I wrote about the Do Nothing solution for our deficit/debt problem.

In light of congressional actions since then, doing nothing is looking even better according to E. J. Dionne.  In fact, if congress just packed their bags and went home today, we would reduce the deficit by $7.1 trillion dollar over the next 10 years. 

$7.1 TRILLION DOLLARS

In the process, the budget would almost be balanced by 2021...another benefit of doing nothing.  So where does that $7.1 trillion dollars come from?  Well it comes from here.

● $3.3 trillion from letting temporary income and estate tax cuts enacted in 2001, 2003, 2009, and 2010 expire on scheduled at the end of 2012 (presuming Congress also lets relief from the Alternative Minimum Tax expire, as noted below);

● $0.8 trillion from allowing other temporary tax cuts (the “extenders” that Congress has regularly extended on a “temporary” basis) expire on scheduled;

● $0.3 trillion from letting cuts in Medicare physician reimbursements scheduled under current law (required under the Medicare Sustainable Growth Rate formula enacted in 1997, but which have been postponed since 2003) take effect;

● $0.7 trillion from letting the temporary increase in the exemption amount under the Alternative Minimum Tax expire, thereby returning the exemption to the level in effect in 2001;

● $1.2 trillion from letting the sequestration of spending required if the Joint Committee does not produce $1.2 trillion in deficit reduction take effect; and

● $0.9 trillion in lower interest payments on the debt as a result of the deficit reduction achieved from not extending these current policies.

 So, in reality, all this yelling and screaming over the budget deficits and the ballooning deficit is BS.  We don't need drastic cuts in entitlements.  We don't need drastic cuts in any spending.  We will be just fine if everyone just sat back, had a beer, and did nothing.