Over the last ten years, Democrats and Republicans alike, in Congress and in the White House, have borrowed and spent us into the worst economic conditions in living memory. The government only admits to an unemployment rate of just under 10%, but surveys and better private estimates show that about 20% of us who want full-time work can't find it. The unprecedented amount of paper money we're pumping into the economy is not actually creating jobs or generating wealth.
That's bad enough, but a recent study from the Bank of International Settlements gave us the really bad news: Our total national debt and our future entitlement liabilities, taken together, are so large that we will be in danger of national default (like Greece) unless we take drastic action immediately. How drastic? The BIS estimates that in order to achieve the very modest goal of taking our total debts back to 2007 levels over a 20-year period, we would need to move from a deficit equal to 7.1% of GDP, to a surplus of 2.4 % of GDP, and keep the budget that way for 20 years. That would require almost $1.4 trillion per year in deficit reduction, starting now. That's some serious budget-cutting.
Unfortunately, our elected officials are not yet having a serious conversation (at least not in public) about how we're going to cut spending consistent with our national priorities. Here are some conversation starters:
End the Bush/Obama bailout and stimulus policies. We should never have gone down that road, and no one should be surprised that these policies didn't work; after all, if it were possible to get richer by going deeper and deeper into debt, we wouldn't have experienced a downturn to begin with. Now that we know the policy is a flop, we need to swear off any so-called "stimulus" programs -- no more "cash for clunkers," "cash for caulkers," or cash for any other fill-in-the-blank interest group. We also need to restore some necessary fear of failure on Wall Street by repudiating the "Too Big to Fail" doctrine and declaring that the era of No Banker Left Behind is over.
Get rid of corporate welfare and other gimmicky tax credits. These tax credits proliferate under Democrats and Republicans alike because they're easy to hide in our sprawling 5.5-mllion-word tax code, and people don't usually pay a price at re-election time for giving away tax breaks. But the fact is that Congress routinely uses the tax code not just for the legitimate purpose of raising revenue, but for the less admirable purpose of throwing bones to politically connected interest groups. One recent estimate says these "tax expenditures" amount to about $1 trillion per year.
Scrub the budget with Article I in mind. We need a federal government that stays within the limits of the dozen or so powers that are granted in Article I of the Constitution. Toward that end, we should demand that Congress specify in each spending bill precisely which part of the Constitution gives Congress the authority to act in that area. A few hints: Bank bailouts and investments in failing automakers are not in Article I. Neither are free colonoscopies or free prescription drugs.
Eliminate, transfer, or privatize programs we don't need. Farm subsidies are a great example of this. They were originally conceived as a way to help farmers survive low food prices, at a time when farmers typically had lower incomes than non-farmers. Now, however, farmers are on average wealthier than non-farmers, and in 2003 55% of the subsidies went to just 6% of the recipients. Yet we still spend $30 billion per year on these subsidies. The Cato Institute figures we can save $108 billion per year in the Department of Agriculture alone. Cato has some other great ideas for savings as well.
Sunset everything. Here's the good news: If you were starting from scratch and your job was to think of enough important government functions to cost $3.8 trillion dollars per year, you would almost certainly fail. You couldn't possibly dream up that much government, let alone that much necessary government. Thus, the budget problem is not that there is not enough money to fund the things we need; it's that there is so much money sloshing around in Congress that our representatives have not been very diligent about insisting on a strong showing of need each and every time a program is reauthorized.
Refocus defense spending on defense. We've gone too long thinking that fiscal policy and foreign policy are entirely separate issues. The fact is that we cannot afford our worldwide empire. I say much more about reorienting our military commitments elsewhere, but suffice it to say here that the amount we need to spend on defense is much less than the amount we currently spend.
Mark Grannis
Libertarian for Congress, Maryland District 8
No comments:
Post a Comment