Wednesday, January 29, 2014

Restoring Fiscal Prudence in Government

President Obama and congressional Democrats have already let it be known that they will refuse to negotiate when it comes to raising the debt ceiling as, yet again, we're about to run out of borrowing authority.  Their position is that Congress must ensure the full faith and credit of the United States by doing whatever is necessary to ensure we pay our bills...and, after all, it's Congress that voted to spend the money in the first place.

I can see their point.

The way to stop the perpetual borrowing and spending of our federal government is not for politicians to fight debt ceiling increases.  Instead, politicians need to fight against new and increased spending that results in the need for debt ceiling increases.  If we quit spending irresponsibly, we'll get to the point we don't need to borrow and can actually start paying down our debt while still "investing in America" (gag).

We've got to start prioritizing where our money goes, just like any other person, family, business or entity that is out of money and has maxed out the credit cards.  This isn't a hard concept for most people to understand.  Many people, especially over the last several years, deal with this problem every single day.  They can't just shit money when they run out.  They can't just go demand a raise from their employer "or else".  They can't walk into their bank and approve their own credit limit increases.  They have to cut back on some things, eliminate others, and determine priorities for what's left.

And that's what our federal government needs to do.

The problem is to the point where absolutely everything in the budget needs to be looked at and right-sized in terms of funding.  We are pouring way too much money into things that should be a low priority - if even a priority at all - and we're not spending enough on things that are critically important.

This is an excellent website that tries to consolidate a lot of information about our finances into easy-to-understand graphics, charts, and explanations.  The biggest takeaway for me is that the U.S. Treasury is our third-largest budget item behind defense and HHS.  The lion's share of that item is interest payments.  It's money we're flushing down the toilet for which we get NOTHING in return.  It's not unlike making a credit card payment of $200, with only $35 of that going towards the outstanding balance.  The other $165 is interest.  Many of us do what we have to do in order to not be in a situation where we're paying $165 in interest for every $200 we pay on our debt, so why should the government think that's OK to do with our tax money?

The 2014 budget assumes revenues (taxes) of $3.03T, spending of $3.77T, with a big fat deficit of $744B to add to the total debt of $17.3T. 

To put this in terms most people can wrap their heads around, it's like making $30,300 a year, but spending $37,700...adding $7,400 per year to your total debt of $173,000.

No bank in its right mind would lend you money if that's how you roll.  Ever.  And we, as the "bank" for the federal government, should demand an end to this kind of irresponsible, imprudent, and UNACCEPTABLE spending.

Here is Sen. Tom Coburn's "Wastebook", which contains a yearly sampling of idiotic spending by our federal government.  While the amounts look small against a multi-trillion dollar budget, it adds up quickly.  I personally work for a company who, several years ago, literally removed every third light bulb in all of its offices.  I don't remember the exact amount saved, but it was in the millions of dollars.  It goes to show that cutting out even little tiny bits of fat across the board can go a long way.

Besides unscrewing lightbulbs, here are a few suggestions on how we can get our fiscal house back in order:

First, eliminate all spending that even remotely resembles anything in Coburn's Wastebook.  Not a sampling of it, ALL of it.  Close the unoccupied buildings and sell them.  Bring back the equipment from the sandbox and either sell it, or replace the old, tired crap that our military units have to train with.  No more studies concluding that wives need to calm down.  Let Africa study the penis-washing habits of Africans, with African money.

Next, yank all "aid" to foreign countries.  Most of them hate America anyway.  We have plenty of Americans on welfare here, we don't need foreigners hanging off our teat too.  Let the great and wonderful United Nations handle all that nonsense.  And while we're at it, dial back our funding of that anti-American organization and kick its ass off American soil.  That alone would free up about a billion dollars worth of New York real estate.

Now, quit footing the bill for illegal aliens.  If they aren't subsidized, many will leave.  If they have anchor babies/wives/family members that are citizens or enjoy legal status, those people can choose to stay, or they can choose to leave with the illegal alien.  It's not our fault your beloved illegal broke our laws.  It's his.  Take it up with him and don't come whining to us about his criminal stupidity.  And for crying out loud, don't reward illegals with amnesty.  We would end up spending trillions more if we legalize these foreign lawbreakers.

By now we're making some progress.  But not enough, fast enough.  Here are a few more suggestions to rapidly get the balance sheet where it needs to be:

Get rid of bloat.  The IRS is unnecessary; there are numerous credible proposals for tax system reform floating around out there (such as the Fair Tax), and many of them don't include the need for a bloated, weaponized bureaucracy like the IRS.  Goodbye, Department of Education.  Adios, Department of Agriculture.  See ya, Department of Labor.  This stuff, if even necessary, belongs in the states.

After all of that, we should be in pretty good shape.  But if not, we'll yank funding of nice-to-have items like arts and research for a year or two, and use that money towards our debt.  The arts are nice to have, but when it comes to adequately funding the VA or subsidizing Les Miserables performances all over the country, the former comes first.  As for funding research, Susan G. Komen and the March of Dimes will have to suffice for awhile.  It won't be the end of the world.

Now, we get our house in order.  First, pass a balanced budget amendment to the Constitution.  Every state is bound by law to balance its budget, and so should the federal government.  Eliminate earmarks by forcing lawmakers to keep bills specific in scope with all spending directly related to the bill's specific purpose - and each bill must include specific Constitutional justification to be considered.  Take the keys to Social Security away from the federal government and hand them over to an independent organization overseen and audited by a rotating group of five states' attorneys general. 

Narrow the mission of our military forces to focus solely on foreign threats to the United States and our allies that we're obligated by treaty to defend, draw down accordingly, and shift 50% of the saved money to the VA while using the other 50% to increase pay and benefits to our remaining troops and their families so none of them, down to the lowest-ranking private, are on food stamps.

Audit the Federal Reserve at random intervals, and do the same with each remaining cabinet department.  The DoD alone lost $2.3 trillion dollars, along with several billion more in equipment.

Last but not least, install real accountability, with the states providing oversight of the federal government, as it should be.

Will all (or any) of this work?  Who knows.  I think there's a not-insignificant amount of corruption and cronyism in government, and I think that's where a lot of money disappears to.  With the government as large as it is, with so many moving parts and overlapping jurisdictions and responsibilities, the scale of imprudence is less disturbing than the utter lack of interest in meaningful reform.  Just shrinking the behemoth by doing away with nonessential cabinet departments would go a long way towards getting things turned around.

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