Sunday, March 7, 2010
Five Unthinkable Options (Part 4 of 5)
The Republic piece by
J.J. Jackson
Boy, unthinkable option number three(1) where we appease the dependent class and cut spending everywhere but their precious welfare programs sure was depressing wasn’t it? How did you like those numbers I gave you to mull over last week where even if we cut everything else from the budget except for the so-called “Mandatory Spending” it would still take twenty years to pay off our debt? Pretty depressing huh? Quite a reality check was it not?
Personally I am still trying to figure out why state derived welfare pays and other such redistributions are “mandatory spending” but things such as our national defense which actually appears as a line item in the Constitution as a role our government is tasked with doing are not. In between that pondering I am wondering if all of you angrily emailing me and accusing me of all sorts of heinous acts and not even discussing the topics at hand realize how silly you sound. Again, there are not my numbers. I did not make them up. Sorry if the truth about where the problems lay are too much for you to handle.
Well, this week I am going to tick off those of you who refuse to accept the truth even more. Yes, now we start to actually get somewhat serious. Next week is when we get really serious but once again judging by the angry emails from people accusing me of making up the numbers and lying about where money is being spent I think that we really need to ease into reality.
So here we are. And here comes unthinkable option number four!
Last week we looked at how trying to take a scalpel to the problem only resulted in progressively larger implements being used until the axe came down on everything other than the oh so precious and biggest social welfare programs of our government. This week we are going to start out with the axe and take it equally to every line item there is regardless how precious and necessary it is.
The math is extremely simple when we take this approach believe it or not. Once again just to rehash what the government’s own numbers tell us, in 2008 we had revenues of $2.569 trillion and expenditures of $3.094 trillion. Our deficit was $525 billion for just that year alone. Since then the yearly deficit has gotten worse. Instead of half a trillion we are now talking about a nice round whole trillion per year or more by the looks of things. So the first thing we would have to do is get back to 2008 levels of spending and revenue generation.
Once we do that however what is the reality of the matter? Well, just to break even in a year like 2008 we would have to cut spending 20% across the board. Ok, I lied. Actually cutting spending 20% for everything (expect debt interest payments) from Social Security to the Department of Defense based on 2008 numbers would actually turn us a profit. Yep, cutting spending 20% from top to bottom would give us an extra $3.1 billion each year. That is a payoff period on our total national debt of 3,871 years.
That is not a serious plan if you ask me. And if you think that 3,871 years is a reasonable period to pay back a debt try going into your local bank and see if they will give you such a term on your next mortgage. Good luck with that!
So let’s look at some more reasonable numbers. If we cut spending 35% on every line item in the budget we could pay back the debt in 30 years. That is assuming revenues like those in 2008. If we have some lean years it will take longer.
Now what, you may ask, about the $260 some odd billion of interest payments heading out the door each year? Wouldn’t that line item get smaller and enable us to pay down the debt faster? It would if we spent the surplus created by reducing the deficit each year. But remember we are looking at simple math here. To make the math simple we will say that the government will use the savings on this line item to gradually replace funding in other programs that had to be cut to pay down the debt in the first place. So for the sake of simplicity we will keep it steady over the course of the years.
Hmmm, but you know 30 years is a long time though. There could be five different Senators in a given seat over that period, a representation in the House could have cycled 15 terms under and we could have had anywhere from four to seven different Presidents in that time assuming each served at least four years. What do you think the odds will be that even if today we adopted such a plan that we could serious expect the course to be held over all those changes and all those years?
I am personally going to bet that the odds are not that good and I propose to you that if we are serious about getting this whole debt problem not just under control but wiped out as well then we are going to have to realistically do it in the term of one President or eight years. Yeah you heard me right, I said eight years. Yes, there will be Congressional turn over and even a potential new President but I think that if the American public were serious then we could hang on for those eight years and see it through. Any more than eight years and you really run the risk of a lot of people getting bored with the whole fiscal responsibility thing. Especially when those previously dependant on the government have had to now go out and make their own way without the benevolent hand of the federal government to sprinkle oodles of money upon their heads in the quantities they are used to.
Ok so what will this plan, unthinkable option number four, take? Oh, not much, just a prayer that we can maintain revenues at the same level as they were in 2008 and slash spending (also from a 2008 basis) across the board by 75%. That’s all.
Yep, this means cuts in Social Security from $608 billion to just $152 billion. It means Medicare cut from $386 billion to a paltry $96.5 billion. It means cutting the Department of Defense to just a tad over $120 billion from $481 billion. It means everything, and I do mean everything, is cut to the bones.
It is also very painful. But like I said in the opening article of this series, all the options are painful for someone. At least here the pain in shared equally by everyone from our senior citizens to the military. Sure your social security check will only be 25% of what it is today but at least you still have it. Sure the tanks our Army uses will be rusted out a little and may not work so great but at least we still have them.
I am not saying I agree with it, just saying that it is an option. Oh and once again even though we are cutting spending it doesn’t mean you get a tax cut either. Not with this option. While I personally believe that cutting taxes would indeed increase federal revenues like I have said before, we are not going to get into a scenario of adding more unknowns than we need to. We are sticking with what we know and what we know is taxes at current rates yield certain revenue levels and a certain payback period.
Well, it has been quite a journey through the reality of the federal budget and our deficits and we are almost at the end. Next week it is time for the last option; unthinkable option number five. That is when we get serious. That is when we adopt the approach of if it ain’t in the Constitution, sorry Charlie, but it ain’t going to get money spent on it on the federal level. And when we do that, you are going to see how easy it is to get this debt paid off.
Of course you are also going to hear the howls of misery from the welfare class too. Fun, fun, fun!
J.J. Jackson
http://www.libertyreborn.com/
1) Five Unthinkable Options (Part 3 of 5)
Also:
Five Unthinkable Options (Part 1 of 5)
Five Unthinkable Options (Part 2 of 5)
HowardWasRight 
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