"But Pundit..." you ask, "...weren't you FOR the Economic Stimulus? Aren't you FOR a government option for health care? Aren't you part of the problem..." All I can say to that is, "possibly..." But rather than argue this point, let's take a look at the current situation, and what can be done.
Here are the facts. And they are NOT in dispute:
- Projected budget inflows for the Federal Government in 2010--$2.33 Trillion
- Projected budget outflows for the Feds in 2010--$3.59 Trillion
- Projected deficit--$1.26 Trillion
Pretty scary. But I do get the idea that we've needed to kick-start the economy, and stave off a depression by keeping the faith and credit in our lending institutions and the dollar. That all has contributed to the deficits, and is probably okay.
Here's the problem. We have no good options to get out of this situation. The gap cannot be wiped out through economic good times alone, as even a 10% growth in tax receipts through improved employment figures won't alone contribute to the bottom line anywhere near the amounts needed to truly close the shortfall.
And this obsession by the Republicans about cutting the pork out of the budget, or "earmarks" is just beyond laughable. It takes our attention away from the true work that needs to be done. The savings on all these crazy projects, while it makes for good PR, and buys John McCain the title of "Maverick", it doesn't really make a dent in the overall problem. So let's look at the stuff in the budget that will really "move the needle" some, shall we?
- Medicare/Medicaid--$1.06 Trillion budget
- Department of Defense--$742 Billion budget
- Social Security--$749.1 Billion budget
- Public Debt interest--$454.5 Billion budget
- EVERYTHING ELSE--$580 Billion
Now, remind me what that deficit was again? Oh yeah, $1.2 Trillion a year. Don't think raising taxes is a good idea? Remember, a 10% increase in the GDP next year (which is HIGHLY unlikely, and could lead to inflationary or other fears) wouldn't get us more than a quarter of the way to solving the deficit problem. So what do we go after to cut?
Want to go after the Department of Labor? Think it's those damn liberals spending on Unions? You'll get $106 Billion in savings, but you'll also lose the $89 Billion set aside for unemployment benefits. Can't do it. People can't be thrown out in the streets. Even if you did, you'd still have $1.15 Trillion to cut, and I'll remind you of that decision if you get laid off...
How about Foreign aid? We must give a TON away to these poorer countries. Time to shut off the spigot! Well...in reality, that will save us about $12.9 Billion. We still have only $1.25 Trillion to go. It only costs us in the goodwill department. I think we've proven during the previous administration that good foreign relations aren't really that important.
Do I need to keep going?
- Housing and Urban Development? Only $54.8 Billion
- Education? $100 Billion
- NASA? $18.4 Billion
- Transportation? $90.5 Billion (half of that is fixing roads...)
All that together, and you STILL have over $800 Billion to go before balancing the budget.
Can we get serious now?
The places we need to cut, to even start to SEE fiscal responsibility are HARD.
Defense--Time for tough choices. Let's forget the geopolitical ramifications of this for a moment, and discuss the costs saved with a pull out in BOTH Iraq and Afghanistan. War supplementals of $183 Billion. Now, let's look at a 10% reduction in purely Procurement, Operations and Maintenance (the cost of our defense weaponry, tanks, etc). That's only going to net us about $40B in costs. Despite what our Liberal base tells us, the costs of the Defense budget is not as full of excess, nor is it as easy to cut, as they would have you believe. Still, a 10% reduction, while SIGNIFICANT, still doesn't close the gap all the way. But let's make these two cuts for argument's sake:
Costs Saved: $223 Billion
Medicare/Medicaid--This is the behemoth! How do you save dollars here? Do we let the government negotiate prescription drug rates? Do we tackle fraud, waste and abuse? Can we really save $80 Billion a year that way? I would suggest that if we cannot, we must at least cap the rate of increase for the premiums paid to the doctors at the rate of inflation. It's going to suck royally for doctors, but the only way this truly works is if we move to a single payer, or public option, because the doctors are going to pass the cuts along to the taxpayers, in the form of higher charges on private insurers. But that's a different discussion, different day. Somehow, we need to get these capped, and find an additional $150 Billion in savings:
Costs Saved: $180 Billion
Social Security--I don't know what you can do here, other than continue to lie about the rate of inflation, and start to creep up the initial age one can draw on the funds provided. This could yield about a $20-30 Billion savings, but in the end, may not do much better.
Costs Saved: $30 Billion
I can't find more savings without a meat cleaver, so let's take our $450 Billion in savings, and combine it with additional tax increases of $400 Billion (IF the economy comes back, and IF the Bush taxes on the top 1% are allowed to expire, and if...), and at least show that cutting the deficit to about $4-500 Billion the next two to three years is achievable. Past that, perhaps a renegotiation of the debt could yield some benefit on the interest owed, but I would see that difference as minimal.
None of my suggested changes are even politically viable anyway, so perhaps we can continue to debate things like federal funds for abortion clinics, flag pins, gay marriage, and the like, while we slowly devalue the dollar, ship our jobs and skills overseas, and end up a third world nation over the next 10 years. Because let's face it, who's going to buy the next round of debt we offer?
Personally, that idea of a carry trade with Swiss Francs or Singapore dollars, looks better every day...
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