Thursday, June 9, 2011

Help Balance the Scales


This back and forth between politicians about whether or not to cut spending has got to stop. We must balance the national budget, get it in the black, and start paying down our debt. Period. We must do it now. Here is what I recommend. We are currently running a budget deficit of about $1.1 trillion dollars on a budget of $3.7 trillion, or at least that's what we're told. I would immediately cut spending 25%, which is roughly where we were just four years ago. This would be about $925 billion. I would also recommend raising the gas tax $1 per gallon. Based on the daily usage in this country of 400 million gallons, that would equate to approximately $146 billion per year. There. Problem solved, budget balanced.
People will say how draconian and hard this would be and I agree. But we need to do this and we need to do it now before it destroys our country. We don't need VAT taxes, which would create huge new bureaucracies, and we should make the spending cuts across the board so that all share in the sacrifice. I'm not sure just how much a sacrifice it would be though. Once again, this isn't much more than we were spending just four years ago, and if we can't exist as a government on two and a half trillion dollars per year, then we've got problems.  We will find, I am sure, that there is more fat in some places than others, so some programs might be eliminated rather than cut 25%.  This would mean that some things would be cut less than 25%.  I think, first of all, that there is at least 10%-20% fat in the budget, maybe more.  After that, much of the cutting could be done through attrition, although there would have to be some layoffs. However, it may not turn out as bad as it may sound. If people realized we were serious about balancing our budget, a renaissance in investment would occur, and the private sector would take off. Those displaced government workers are presumably educated with a myriad of skills, and they could be absorbed into a robust economy.
That's my plan. It would require sacrifice from everyone, but in the long run it would be good for the nation.  Combined with my plan for changing the tax code, we could get this budget balanced and get the economy going.  The first thing the president should do is cut the presidential salary, staff, and expenses 25% as an example.   So let's get on board.  Let's all agree to do this. Let's all share the burden.  Then let's all move forward to a world where we aren't spending a half a trillion dollars a year on interest on our debt. Think about what we could do then. But first we have to get there, and it's going to take a team effort. The alternative is national bankruptcy, the ridicule and shame of the world, an immediate erosion in our defensive capabilities, and a short, quick trip to second power status.

16 comments:

  1. You say your plan of cutting across the board by 25% "hurts everyone", but I can't see how that is true. What percent of our spending goes to millionaires and billionaires, and how are they "hurt" when we cut 25% from school lunches, Pell Grants, veterans' hospitals, and Social Security checks? How much is the "hurt" spread when we cut one-quarter of all Medicare payments to doctors and hospitals--can those retired on 12K or so make up those costs on their own as well as the ones retired on a 250M nest egg? In other words, what you say about sharing the hurt just does not seem to me to be true.

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  2. If you don't repeal the tax cuts for the wealthies Americans your plan is not reasonable. It's time to stop making ridiculous general statements like lets make gas prices even higher so that many workers can't afford to put food on the table and lets see how many millions of people will lose their jobs if we cut spending by 25%. You clearly have absolutely no understanding of the economy.

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  3. I respectfully disagree with you. American businesses are currently sitting on approximately $1 trillion which they either are afraid to invest or have no reason to invest. If the government were to show it was serious about the deficit and create a more business friendly environment, investment and, therefore, economic activity would flourish.

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  4. I love the idea of cutting spending 25% across the board. Immediately sacking 25% of everyone employed by government money (post office workers, DMV, military, serious crimes investigations) will solve all our problems. Is this a joke nomination?

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  5. This isn't a joke at all. If we don't get our fiscal house in order, there will be no money for anything and this "great experiment" we call America will be on the ash heap of history. As I say, cutting 25% sounds draconian at first, but even the most skeptical person has to admit there is a lot of fat in almost all government programs. After that, as I say, we could cut a lot by attrition and a hiring freeze. Keep in mind that the fat isn't at the level of goods and services. For instance, students wouldn't lose textbooks or something like that. The fat has all grown in the mid and upper level management areas. Once again, if we can't live on a government budget of $2.5 trillion dollars, we are in serious trouble. My proposal only takes us to where we were, from a spending standpoint, about eight years ago. With my other ideas for spurring economic activity, we will get this country moving again, and we will no longer be the joke of the world.

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  6. What's your plan to get Congress to pass this?

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  7. I think the current House would pass it. You'd have to get the people to put the pressure on their individual senators. The people are definitely ready for this and if senators thought they might lose their seat, they'd vote for it. If the people are sold on it, the Congress will go for it. It has to be sold as what it is--merely a return to where we were, spending wise, just a few years ago. It's sensible. The people will realize that.

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  8. Tom, You claim to have once run something or other. You should then realize that a 25 percent across the board spending cut is idiotic. A true manger would cut much more that 25 percent in selected areas that don't deserve to be funded. Other areas would be cut less and some productive areas should have their funding increased.

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  9. If you read my post on reforming the tax code, I mention this very thing. If we do other things in concert with spending cuts, such as reducing the size of a large government agency like the IRS, we'll be able to offset cuts elsewhere. The point is that 25% is what we need to cut, along with hiking the gas tax, to be in balance. We will find redundancies with that kind of spending cut, and as you eliminate the fat you will find that more cuts are available in some areas, enabling less cuts in other areas. A 25% cut in spending, once again, just takes us back to where we were eight years ago. If you read my posts, you'll see I favor huge cuts in some areas such as foreign aid.

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  10. how to start cutting:

    1. eliminate the department of homeland stupidity.
    2. get our troops OUT of iraq, afghanistan and libya NOW.
    3. Make the banks pay back the $700 billion they STOLE from the american taxpayer, and at an interest rate of 40% compounded every 30 minutes.
    4. kick illegal immigrants the he** out. TODAY.
    5. stop foreign aid, NOW

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    1. @BobbieJO, I really like your idea and you would have MY vote if your were a presidential nominee!! :)

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  11. Raising the gas tax to a $1 a gallon is he dumbest thing. When the price of gas goes higher people change their habits and drive less which means less tax coming in.

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  12. Bobbies,
    The banks did pay back the money the borrowed with interest already. Illegal immigrants are often paying into the social security system and collecting nothing.

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  13. Illegal immigrants are not paying into the social security system. To do that they would have to be on a legal payroll, and if that happened they would be found out. Illegal immigrants are mostly paid under the table with cash. There's a whole black market economy out there which would be tapped with an additional gas tax.

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