The Federal Budget, and the Deficit

I have read many articles about one or the other of the items listed in the title of this article, and decided it was time to write an article combining the two, after all they are as conjoined as Siamese Twins, and need to be dealt with at the same time, as the parasites they are on the American people.


Our federal deficit is fast approaching the point of no return. What I mean by this, is our deficit is racing toward the point in which the United States has to borrow money from our creditors, simply to pay the interest on loans already taken. Once this happens the debt will no longer be sustainable, (many would say the debt is already at that point), and I figure with the high levels of jobless people in America, and the huge federal budget, we are less that five years from the point of no return.

This year the federal budget has been on auto pilot, (we have been running on temporary spending measures set at 2010 levels since the fiscal year began), because neither party can agree on a budget, as a matter of fact it seems the only thing the two can agree on, is that they disagree. Which is of course the way the founders set up the US government. The government is supposed to be at odds with itself., and nothing, (or very little), is supposed to actually get done. The founding fathers knew the tyranny government in any form will take, so they set up a two party system, with three branches of government, and called it checks and balances. What better way could they have possibly slowed down the tyranny of the government, and ensure government immobility than the system we have. I know people who tell me the government isn't working right now because of our split congress, and I tell them it's running just the way it was envisioned. But with our runaway deficit, and staggering budget our congress needs to find the middle ground to get it under control.

Last years federal expenditures, ($414 billion interest on the debt included), were an astronomical $3.55 trillion, and revenue was only $2.381 trillion, giving us a budget deficit of $1.17 trillion for the year. That is just an unbelievable, and unacceptable level of spending and debt for a single year, If you stacked 3.55 trillion one dollar bills, one atop the other, you would have a pile of money 269,021 miles tall, about 48,000 miles taller that the total distance from the Earth to the Moon, and our total federal deficit of $14 trillion+ would make a stack about three times that tall. It's just mind boggling, why not just make another Great Wall of China out of dollar bills and call it a day?

Now that I've put some kind of perspective on our budget, and our debt, (at least in the gray matter between my own ears), what can be done about it? How can this mess be fixed? That is a question that baffles politicians because both sides have some kind of an idea, but neither side has the political will, or the guts to acknowledge what is right about the others proposals, or to take the necessary steps to fix the problem. John Boehner and his $100 billion in the first year? I'm about to make a proposal that makes his figure look like small change.

All waste in the federal government needs to be identified and removed from the federal budget, not identified and kept in individual departments like Robert Gates wants to do with the waste he's identified in the military budget. There is easily 25% waste in the federal budget, through the various agencies. Once the waste is identified and removed the government needs to combine agencies with the same or overlapping missions. I mean do we really need the ATF, FBI, and DEA all enforcing federal laws? Combine all those agencies, then downsize them by 25%. That would make a huge savings in and of itself. Once the Agencies are combined and downsized, all overlapping and contradictory federal regulations have to be removed from the Federal Register, which would serve to both shrink the budget, and to spur growth in the private sector. After all the waste is identified and removed, and the government effectively down sized, we need to move on to the sacred cows of the Democratic, and Republican Parties.

Social Security, and Medicare, must be revamped so they are sustainable, or sustainable for the lives of the people who are currently on those programs, for those of us not yet old enough to claim those benefits the programs need to be privatized, and the government needs to keep it's hands out of the pie. Medicaid needs a 10% cut across the board if it has any hope of surviving, and doing the necessary job it does for the impoverished in this country.

And of course we have that Republican sacred cow, the US Military, which spends far too much money in bases around the world, protecting other countries and people, at US taxpayers expense. What I propose, (of course it will never happen), is the foreign countries we protect with our military, pay for the service. The American taxpayer should not have to take keep the burden of providing weapons, ammunition, equipment, supplies etc. for the protection of another nation. If those countries want the protection of the most highly trained, and well equipped military in the world, then they need to reimburse the US for that privilege. Otherwise we pull out, and let them fend for themselves. My guess is with the amount of bases we have around the world, our military budget would be cut in half by this measure.

Next on the chopping block would be corporate welfare and foreign aid. Last year the taxpayers subsidized the corporations in this country, (most of which do their manufacturing overseas), to the tune of $100 billion dollars. It just sits wrong with me that taxpayers are subsidizing companies to send our jobs overseas, and it must be stopped. If the corporations want to manufacture overseas, let them do it on their dollar, and not mine. Foreign aid has to be cut, because quite frankly, we need to get our own country back on it's feet, and we can't do that, and spend $53.9 billion on direct foreign aid, and $36.7 billion on indirect foreign aid, and administrative costs. That money could be put to better use by being purged from the budget.

Next up on the chopping block is the government payroll, which should be pared back 15% across the board, if the government employees unions don't like it they can strike, government workers not working would pare the budget down, as well as the overall size of the government. These unions need to be broken anyway, I hate the idea that government employees make better wages, and have better benefits, than the taxpayers who pay their salaries enjoy.

Now it's time to move on to taxes and federal pay. There is alot of talk going around about a fair tax these days, and it sounds great in theory, but it has been my experience when the government runs a program of any kind, even one as simple as a fair tax would be to administer, they run it into the ground. Under federal management a 23% fair tax would become a 23% flat sales tax overnight. Something needs to be done about our tax code though, when something isn't fully understandable by the people administering a thing, then it is broken. In order to simplify the tax code, I suggest an across the board 15%, non-refundable, no deductions, or tax shelters, tax rate. This tax rate would cover income, capitol gains, dividends, and interest, as well as corporate taxation. For some a 15% tax rate would be a tax increase, and for others it would be a tax reduction, but it would mean everyone was paying the same percentage of their money in taxes, and that would be truly fair.

And finally up on the chopping block is the various feel good, touchy feely programs like the National Endowment for the Arts etc., and the discretionary spending the various agencies engage in, which accounts for $105 billion

Let's take a look at the savings from this plan, then go from there.
Government waste: $887.5 billion
Combining agencies, downsizing, and cutting regulations: $275 billion
Medicaid: $28.5 billion
Military spending $357.5 billion
Corporate welfare: $100 billion
Foreign aid total: $90.6 billion
Wage cuts: $123 billion
Discretionary spending $105 billion
total- $2.070 trillion in cuts for a total of a $1.76 trillion budget, and we didn't even have to cut Social Security for Grampa and Grandma. With the 15% flat tax, based on a $14 trillion GDP we should have $2.1 trillion dollars in revenue, and after our budgetary expenses, we would have $480 billion to put toward the deficit.

This budget would be a death knell to both sides, but is the austerity we need in the federal budget, to both get our federal spending under control, and to start paying down on our massive debt. Or they will be the doom to our economy.
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