We Must Cut Spending to Spur Economic Growth

The proposed “sequester” to cut federal spending automatically by $85 billion appears to be as frightening as a Japanese godzilla movie. In a highly-publicized action immigration officials even released several hundred illegal aliens from custody in expectation of budget cuts to their department.

Friends, do you understand what is really going on here?

First, this $85 billion is about 2.3% of US federal spending and about 7% of the US annual deficit. This $85 billion could be cut easily from the massive overspending, waste, fraud and abuse in federal outlays today.

The only problem is that the Washington Monument Ploy is in full effect.

It works like this: Imagine the city of Washington, DC is having a fiscal crisis. And rather than fire useless, overpaid city workers or root out corruption in the public schools or throw thousands of deadbeats off of the dole in order to fix the budget permanently the first thing the city would do is to close down the Washington Monument to visitors.

Because the Monument is a highly visible symbol and its shutdown would shock people into saying, “The Washington Monument is closed! We need to get more tax revenue so that it can be re-opened…”

Democrats have been using this ploy for decades. In short, the first thing that liberals do in the event of a budget shortfall is to alarm the public by firing cops and firefighters and other essential workers or releasing illegal aliens from custody. This is to make it appear that there is a crisis so that citizens will call for tax increases to solve it immediately.

Meanwhile massive overspending, fraud, waste and abuse continue unabated.

The United States is in a fiscal emergency. Our national debt is spiraling out of control because we are spending too much money while our economy is not producing nearly as much wealth as it used to do in order to pay for it all.

The debt now is at a dangerous level and has been rising inexorably to that point since Obama was elected. A few more years of this and we will be at the level that Greece was at when it collapsed and we too will collapse, making the current crisis look like child’s play.

How will this help all of the “minorities” that Obama says he represents?

It does not. It will harm them worst of all.

This debt has built up because Democrats, with the help of liberal Republicans, have established more and more programs and spent more and more taxpayer money throughout the prosperous years. They have then inserted huge automatic annual spending increases into every program. These increases have jacked these budgets up to unsustainable levels.

So now we have tens of millions of people living off of these programs and any cut is seen as a blow to the poor, the elderly etc.

Nonsense. All of these federal programs need to be cut and must be cut substantially. We should permanently cut at least $600 billion from the US annual federal deficit which is now more than $1 trillion per year. That would put our deficit within the “safe” zone as prescribed even by the International Monetary Fund.

Because unless we see reductions for the 100 million Americans who are in one way or another getting money from the federal government through paychecks, pension checks, subsidies, grants or handouts then the whole nation will drown.

In other words, either they feel a little pain or we all will feel a lot of pain.

Just for starters, look at Oklahoma Republican US senator Tom Coburn’s WasteBook for 2012. For many years Coburn has been reporting on the ridiculous way that the federal government is wasting our nation’s wealth away. The whole 2012 WasteBook is here And it is just a fraction of the excessive and often frivolous spending of the federal government. Foxnews.com reported about Coburn’s report:

 

  — Though skeptics say there's no such thing as a free cellphone or service funded by the federal government, Coburn's report shows otherwise. It estimates that taxpayers are subsidizing phone service at a cost of nearly $1.5 billion a year. Though the roots of the program can be traced back to an effort in the 1930s to make sure all Americans had access to telecommunications, it has morphed into a program that provided free cell service to some 16,500,000 participants last year.

— Though NASA has no plans or budget for any manned spaceflights to Mars, the agency spends about $1 million each year on developing "the Mars menu." It's an effort to come up with a variety of food that humans could eat one day on Mars.

— A $325,000 grant for the development of "Robosquirrel" – a robotic rodent designed to test the interaction between rattlesnakes and squirrels.

— An estimated $70 million loss for producing pennies. According to the Waste Book, "The cost to produce a penny in 2012 is more than two times its actual value." After the pennies are manufactured and sold at face value, taxpayers are left to cover the loss.

— The report spotlights widespread abuse of the food stamp system — including an exotic dancer who earned more than $85,000 a year in tips, but also collected nearly $1,000 a month in food stamps while spending $9,000 during that time period on "cosmetic enhancements."

— Nearly $700,000 from the National Science Foundation to a New York-based theater company so it could develop a musical about climate change and biodiversity. "The Great Immensity" opened in Kansas City this year.

In all, the 2012 Waste Book report details 100 examples totaling nearly $19 billion.

 And this $19 billion truly is “the tip of the iceberg”. This waste is all over the federal government and state and local governments too.

But the bulk of the problem is in the way that the federal government has expanded with more and more mainstream programs, the most recent one being the new Medicare prescription drug program enacted by Bush. These programs employ more and more federal workers giving away more and more taxpayer money. It never ends.

In fact all of these programs are subsidizing poverty and sloth and increasing dependency. That is why they must be reformed – in order to encourage self reliance instead.

We should enact the following cuts in order to spur an economic revival:

*Eliminate both the Department of Education and the Department of Energy (combined $100 billion in annual savings). Shut down the National Renewable Energy Laboratory in Golden, Colorado. It is a new Energy Dept. boondoggle that is researching things that already have been studied for decades like solar panels and biofuels.

*Cut off all federal subsidies for windmills, ethanol and solar panels. They do not work.

*Cut the State Department budget in half ($25 billion annual savings).

*Eliminate the Internal Revenue Service ($11 billion annual savings) and implement a flat tax or National Sales Tax that do not require all of the tax forms or the IRS bureaucracy.

*Cut by 25% the budgets of all other cabinet departments (Commerce, Transportation, Interior etc.)

*Cut the EPA budget 50%. Savings of $4 billion. This agency is out of control micromanaging every facet of American life.

*Sell off the inefficient Amtrak system to a private operator. Savings? $1.5 billion annually.

*Cut all federal employees’ pay/benefit/pension packages 25%. These employees have been getting big increases for decades, particularly in the last 10 years. They are way ahead of the game, are making much more money than private workers and have huge bank accounts and retirement accounts as a result. They can easily withstand cuts.

Here is an excerpt from Chris Edwards at downsizinggovernment.org (italics added for emphasis):

 With projections of huge federal deficits for years to come, policymakers should scour the budget looking for places to cut spending. One area to find savings is the generous compensation paid to the federal government's 2.1 million civilian workers. Total wages and benefits paid to executive branch civilians amounted to $236 billion in 2011, indicating that compensation is a major federal expense that can be trimmed.

During the last decade, compensation of federal employees rose much faster than compensation of private-sector employees. As a consequence, the average federal civilian worker now earns twice as much in wages and benefits as the average worker in the U.S. private sector. A recent job-to-job comparison found that federal workers earned higher wages than did private-sector workers in four-fifths of the occupations examined.

 *Cut all Social Security checks and SS disability checks by 25% because SS already is broke and is getting worse every year even though SS taxes already are sky-high. Otherwise the system will disappear entirely. Savings of $125 billion annually.

*Review every single SS disability claim and throw millions of fraudsters off of the program.

*Cut Medicaid and Medicare by 25%. Because today tens of millions of elderly people and poor people are getting very expensive health care through the government. This cannot continue. The government is broke.

*Cut all other giveaway programs 25% like food stamps, housing subsidies, college scholarships and cell phones.

Remember that these across-the-board cuts mean that everyone takes an equal hit. Nobody is singled out. And after decades of extraordinary increases the cuts just bring these programs back to a reasonable level. They never should have been at these high levels to start with.

*Defense budget cuts should be decided by a special panel. For starters we can pull half of our troops out of countries like Japan and Germany. These nations need to stand on their own and pay for their own defenses. And no more US wars unless we are attacked.

Yet half of the “sequester” is coming from defense spending when national defense is the only really essential duty of the federal government while defense is only about 17% of federal spending.  

What will all of these cuts do? Leave millions impoverished and hungry?

No. Quite the opposite. And if we do not make them, even more millions will be impoverished and hungry

Because tens of millions of people are getting huge amounts of federal money, often from multiple government sources, and have been getting big payouts and big increases every year for decades. They are living well and have lived very comfortably. This is unsustainable and is unfair to the people who are paying the bill (the taxpayers).

A recent study showed that government is giving $1 trillion annually in anti-poverty handouts on the federal and state level. This is $60,000 tax free per poor household in America.

It now is time for the recipients of all of this government largess to “give something back”. And if they fall short when their handouts are cut then they will just feel what we taxpayers have been feeling for the last 30 years as we have seen our wealth being drawn away by more and more taxation.

These cuts will spur broad economic growth, will create millions of new jobs and will substantially increase revenues to the government through new economic activity. This happens every time that spending is reduced in this way.

It is like a bank that sees a struggling business cut its debt sharply. The bank then is going to feel much more comfortable working with that business.

Because right now the deficits are choking economic activity. The extraordinary size of the debts is leading investors nationwide to refrain from taking any economic risks and is preventing millions of new jobs from being created.

Investors simply are too worried about the future. These deficits are far into the economic danger zone. And if America does not act to make major reforms our nation will suffer even more irreparable harm than it already has.

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