The Federal Budget and Taxation

Originally published in the August 2012 Intelligent Investor, Part 2

As detailed in many issues of this publication for some time now (as well as in America’s Financial Apocalypse), the U.S. government must raise sufficient revenues needed to pay off its enormous debt obligations. In addition, it must determine how it plans to funds its entitlements program. Even with planned cuts to entitlements, Washington will need more revenues to fund these programs. The largest concern is Medicare.

While Medicare funding deficits will become very large and problematic over the next several decades, the fact is that the unfavorable demographic trends account for only a small portion of its financial woes. The primary source of funding problems expected for Medicare is due to runaway healthcare costs. This is an issue that Washington refuses to address because the healthcare lobby is such a powerful force on Capitol Hill.