The United States President Barack Obama seems to have gone wiser by the day and has brought in the ‘PAYGO’ legislation. This legislation aims to reduce the government spending by a considerable amount.
The legislation says that all the new congress tax cuts or increase in the government expenditure will result in higher taxes and lesser spending in some other department of the government so that the excess spending is offset.
The statutory “Pay as you go” legislation has been submitted with the aim of curbing government expenditure and preventing it from going over board. If this legislation were to work, the fiscal deficit in the United States could slightly bee soothed. Touted to hit a whopping 1.8 trillion mark this fiscal, the mood of the US economy still remains gloomy.
At this time, this legislation comes as a tiny relief as it is expected to reduce government spending by a good fifty percent. The legislation however does not have too many supporters. One insider says that is like a ‘Fig leaf’ adding that this is just the government’s way of increasing or bringing in money to spend on newer policies. On this note, President Obama’s words would be nice to recall.
When the announcement was being made, he went on to say that the deficit which has resulted in the government’s pockets have been mainly due to the administration falling prey to several new policies such as huge tax cesses which have not only drained the economic resources but also benefited the masses in a very disproportionate manner suggesting the ‘rich grow richer and poor become poorer’ trait of a typically capitalistic economy.
If the president is to be believed, the announcement of this legislation is just the beginning of one of the many steps that he plans to take to bring in “fiscal discipline” into this administration.
What does the ‘paygo’ mean for the common man? Honestly speaking, Nothing! This will continue to be a replay of the ‘paygo’statutory of the 1990s which was a proven failure. Even now, there remain many aspects of the government spending that remain exempted from this legislation.
In fact, on the other hand, this legislation coming into effect may have a negative effect on the healthcare reforms besides the unknown nature of the automatic benefit reduction the policy would put the US Agricultural industry, says Mr. Max Baucus, the Chairman of the Senate Finance Committee.
If history were to be repeated, recommended spending cuts will be voted out and the government will continue to window dress its increased spending on its ‘new’ policies that yield invisible results.
