Tag: Federal Budget

Balancing the Budget–Part 1

Everyone is talking about how to solve the federal budget crisis.  Of course, people have been talking about this subject my whole life.  It’s a heated topic with no easy answers.  And it’s a more of a crisis in bad economic times than in boom times, so there is a certain amount of the sky is falling psychology behind the topic.  However, the debt of the United States is growing so large that maybe the sky really is about to fall.  Who really knows?  It does seem prudent to slow the debt we’re incurring.  It would be impossible to balance the budget in one year without massive spending cuts even if we set aside the current national debt as a separate issue.  It could take a whole generation to really get close to balancing the budget.

There is an excellent graph at the New York Times showing Obama’s 2011 Budget Proposal.  It illustrates the sizes of the various expenditures in relationship to each other.  However, you can read the details at the Office of Management and Budget.  For the average citizen looking at the budget is just mind boggling, and for most people they just think, “Hell, let the experts worry about it.”  The trouble is our government is in political gridlock with two opposing ideologies claiming they know what’s right.  To solve the problem will require thinking and acting out of the box.

There are a number of think tanks that focus on the federal budget which have web sites you can study.  I recommend studying these sites rather than listening to politicians or watching the news on television.  They all have a political bias so I recommend reading more than one.

Personally, I have four recommendations that I think would help working on the problem.

  1. First, don’t consider the budget as a whole, but break it down into parts and lets research and discuss the parts.  Don’t think of it as one giant problem, but many smaller problems.
  2. Remove Social Security from the annual Federal Budget.  Consider it a separate insurance system paid for by FICA.  Don’t allow the Federal budget to use FICA income and make it pay back what it’s borrowed.  Consider Social Security a separate issue.
  3. Let’s really examine the whole issue of defense spending.  It’s been an untouchable sacred cow for too long.  And it hasn’t been the defense budget since the cold war ended – it’s become a world police force and nation building organization.  The whole system needs a rethink.
  4. Let’s have a moratorium on tax cuts.  Until the national debt gets under control lets work on spending cuts and don’t allow any more tax cuts until the budget is under control and we can afford them.  If our country is about to go down the drain because of national debt then we really should be talking about tax hikes.  It’s insane to talk about paying off debt and reducing income at the same time.

That still leaves a million issues to argue over, but I don’t want to write about them for now, that’s why I called this post part 1.  My friend Bill in his blog “That’s interesting …” has been running a lot of posts about the battle of the budget.  It’s such an emotional hot issue with way too many Chicken Littles running around.  Are the press and politicians creating a panic that need not exist?  Would a thriving economy just automatically solve these budget problems?  Are politicians assuming it’s the end of the world as we know and have started a fight over a shrinking pie?  I don’t know.  Politics has become so contentious and ungentlemanly that I want to quit watching all news programs.

JWH – 2/19/11