What does the budget deficit mean to American taxpayer

The most important budget in the world is that of the United States government. The U.S. budget impacts not only the USA but foreign investment, trade and the economies of nations throughout the world.

We were sent an inside story from Washington D.C. that provides insights, particularly relevant just as President George W. Bush signed the $350 billion tax cut package. Allan Greenspan, Federal Reserve Chairman bemoaned what he called “Washington’s deafening silence” about the deficit.

What was supposed to have been included in the Federal Budget, but mysteriously was cut out by the administration was a comprehensive report commissioned by the U.S. Treasury. The analysis was led by Kent Smeters, who was Treasury Deputy Assistant for Economic Policy and Jagdessh Gokhale consultant to the Treasury and economist for the Cleveland Federal Reserve. It was commissioned by then Treasury Secretary Paul O'Neill.

The study documents that the U.S. Government in light of current policies faces a deficit of $44,000,000,000,000.00 (TRILLION) dollars. Apparently the report was hidden because it was a document produced by the very administration that was trying to convince congress that the tax cut would do just the opposite.

The study indicates the following impacts upon American taxpayers and businesses:

1. Requirement of sharp tax increases
2. Massive spending cuts on all government services (this would include infrastructure, security to social security)
3. Recommends an immediate permanent income tax increase of 66%
4. Cites the debt at 10 times the publicly held national debt
5. Cites the debt as equal to 4 years the entire U.S. economic output
6. Cites the debt as over 94% of all of the assets and wealth of all U.S. households combined.

What is the potential impact upon foreign trade and investment?

1. Reduced investment in plants and equipment overseas
2. Reduced imports
3. Lower consumer demand by U.S. will negatively impact foreign manufacturers and consumers
4. As U.S. Corporations pay higher taxes, they will increase prices on goods made and sold overseas and become less competitive.

When former Treasury Secretary Paul O Neall was asked about this report, that was commissioned by his office before he was fired, he refused to comment. Was his abrupt dismissal the result of this research?