Take on the Deficit

 

I hate to bore the TOR readership with the minutia of federal budget but the more I hear about the way that the Donkeys and the Elephants want to cut the deficit seem inadequate.    The new Republican class who rode in on a wave of Tea-Party populism has promised to cut $100 Billion from the discretionary Federal Budget in the 2011 year which by the way is already well under way.  In order to accomplish their goals the cuts they have proposed will be deep and painful but maybe necessary.

In term Obama has made some concessions in his budget including a way to trim $1 trillion from the deficit in the next decade and the NY Times put together the following handy chart to show how the federal dollars are spent http://www.nytimes.com/packages/html/newsgraphics/2011/0119-budget/index.html

Obviously the largest expenditures have nothing to do with discretionary spending like foreign aid, farm subsidies, veteran affairs etc but are overwhelmingly located in the entitlement section (Medicaid, Medicare and Social Security) as well as a huge amount in the 'interest on public debt' category.    Now if you are $100,000 in the hole personally you may try to cut the cost of your deli meat by deciding against Boars Head and instead going with generic bologna but in the big picture that won't put a big enough dent in the $100,000 you owe.   At that point you have to make a couple of bigger decisions.   Now you may decide to not paint your house or pay a guy to mow the lawn and these cosmetic decisions seem logical but the hard part comes when a huge tree collapses and smacks into your roof and there is water gushing in by the tub-load.  Now you can decide to fix the leak in the roof or just throwing a tarp over it and keeping your fingers crossed.

But at the end of the day I would look at this defecit issue and attack it this way..

·         Raise the age of retirement from 67 for full Social Security benefits to 70.   Life Expectancy rates improve constantly, so should the age at which time you collect.  If you are going to give people a cost of living increase then you should also adjust their chance of living criteria.

·         Start moving Social Security into its own slush fund.  Don't include it in the normal federal budget and don't allow the normal politicians to touch it.   Keep it separate and pay out each year based on 90% of what the take-ins where last year, keeping 10% for a rainy day..   For example if this year the government collects $800 billion than you pay out $720 Billion to every person who is eligible that year.  If we take in $900 Billion the next year than each person gets a bit more, if we take in $700 Billion then each person gets a bit less.      Look at how revenue sharing works in the NFL with players making 60% of the total intakes…maybe that's not a good example.

·         Take an ax to Medicaid and Medicare and cut 10% from each budget..  yeah it sucks but let me tell you, when I took a paycut last year it sucked too.    I'm sure there are tons of administrative costs that can be cut here and honestly there is no reason that everybody needs brand-name medicine.   Make it mandatory that every person use 50% generic where applicable.  If you don't like it pay for your own medicine.

·         Use the 'savings' from the Medicaid and Medicare package and apply it to pay off the public debt.     So next year your debt will be less and thus the interest you pay will be less since you will be charged interest on a smaller amount.   Use the 'savings' in next years budget to continue to pay down your debt.    I'd suggest the same for those of you with big credit-card bills

·         Eliminate all subsidies to the gas and oil industries.  They don't need any of our help.. they get enough of my money when I'm paying $3.30/gallon at the pump..    Subsidies are un-American

·         Cut taxes for businesses but make sure everybody is paying their share.

·         Force all companies doing business in the US to pay taxes in the US.   There is no reason there should be any allowable tax-havens in Dominica, Switzerland or Costa Rica

·         Simplify the tax-code by making the whole thing 1 page..   There are too many deductions and too many people able to skate because they are able to hide money.     If you want to donate to the arts or to a church you do it on your own merits not because you get a tax break..

·         Eliminate the subsidies the government gives companies for health-care and have people pay their own way.   Subsidies are anti-capitalism

·         Force Congress to balance a budget every single year..  If I have to sit there and balance a checkbook so should congress.

·         Give every person in congress a 15% pay-cut..just because