GCN LAB IMPRESSIONS
How I solved the budget crisis
The big news for the past few weeks has been the back and forth between Congress and the president over raising the debt ceiling to keep the country from defaulting on its financial obligations.
Everyone knows that we can’t keep borrowing forever. Eventually we have to get our financial house in order. We all do that (at least most of us do) in our own homes, so why can the country do it? It turns out, it’s a lot harder than you think.
“Marketplace” is an American Public Media radio program that is actually one of my favorite shows on National Public Radio. Kai Rhyssdal actually manages to make financial news interesting and even entertaining on occasion. And to further educate and illuminate us, “Marketplace” brings us an update to its popular Budget Hero game from 2008.
Budget Hero 2.0 is a Web-based game in which you can take a crack at balancing the federal budget. Good luck!
The game starts you off with a look at the budget in the year 2021, should our government’s current policies stand as they are without any changes. Things look pretty bleak; some of the buildings representing the various sections of the budget are literally sky-high. The game predicts that, if no changes are made, our budget will go bust in 2031, at which point our debt will equal 100 percent of our GDP. That’s pretty sobering.
Okay, time to roll up the old sleeves and get to work.
Each section of the budget, such as health care, has a set of “cards” you can play that will, according to the best estimates of the Congressional Budget Office, either raise or lower the budget.
For instance, you could decide to revamp Medicare and Medicaid Ryan-style, which would definitely cut a fair amount out of the budget. The card states the pros and cons associated with playing it, where the savings would come from, and who it is likely to affect the most. Many times I would click on a card because of the huge savings it offered, only to close it again un-played after reading the information.
Although I am by no means an economics expert, I still was able to get the budget balanced and most of the debt paid off by 2031. However, to do this I had to play some cards that would never ever get played in real life, where the people making these decisions have to worry about things such as riots.
Heck, my boss, Lab Director John Breeden II, nearly Mil-Spec drop-tested my head seven feet for even considering raising the gasoline tax in one game. And that is what makes this current budget so hard to get under control – it’s not the numbers, it’s the political and social consequences of every decision you make.
One thing this game made abundantly clear is that, no matter what you believe, something will have to be done about Social Security, and quickly. There were only a few cards I could play in this area, which I guess shows how few simple adjustments can be made without a serious overhaul. And even with all factors implemented, Social Security costs doubled from 2012 to 2026, and nearly tripled by 2031 (the highest year you can look at in the game).
Even in the successful game, where I had a trillion-dollar surplus going in places and had nearly all of the foreign debt paid off by 2031, the budget was still slated to go broke in 2048, mostly due to Social Security.
I know what you’re thinking, “How hard could it be?” Well, give it a try.
And if you figure out how to fix Social Security and balance the budget, let us all know, okay?