Have you seen the latest 2011 Federal Budget? $3.8T (as in trillion). This will produce a $1.3T deficit. That essentially is the same as the Federal Government's "discretionary" spending budget for the same year. The other 2/3 of our budget is "mandatory" spending. Mandatory? Want to know what that is? For 2010 (fiscal year), our total budget was $3.5T, with mandatory spending at $2.2T. Of that, Social Security was 32% of mandatory spending. Medicare was 21%. Medicaid was 13%. Those 3 programs totaled 66% of mandatory spending. Our budget deficit for 2010 (not over yet) is $1.2T. Take a look at the 2010 budget: http://bit.ly/Qqf5X.
The government had to just recently pass a bill pushing our debt ceiling up to past $14T just to be able to produce the 2011 budget. The following year? We'll surpass this limit and our debt will then be greater than our GDP. The last time we saw our debt reach 100% of our GDP was during WW2. At that time, we were in a major war AND we borrowed the money from Americans. Further, the monies spent went to the development of new technologies to help us win the war more quickly. Now? We spend money on entitlement programs such as Medicaid. We spend monies on over-expanded Medicare and Social Security programs. Medicare and Social Security are NOT supposed to be retirement programs. Nor are they supposed to support full families. Nor are they designed to be received BEFORE retirement. We all were supposed to receive a small stipend WHEN WE RETIRE. PERIOD. Expenditures on these programs and Medicaid are growing at five times the rest of the budget. We just cannot afford all this.
Another thought on these programs. For years, the government received much more than it spent on them, despite the gross overspending. Where did those funds go? Into the general spending fund. We were supposed to be saving for the days when baby boomers started requesting funds. Now, we spend more than we take in and there's no "savings account" to cover this.
So, how could we fix all this? It would be hard, but, we really have to make DEEP cuts. Here goes:
- Cut SS payments by 25%. We just have to.
- Cut Medicare by 40%. It's a basic program. It should ONLY provide basic benefits.
- Going forward, benefits should be based on what we take in.
- Fraud should be actively prosecuted.
- Medicaid should be completely eliminated. Period. Let states determine what they want to do about their indigent population.
- Cut "Other" mandatory payments by 50%. If it's "other", it's not important.
- Department of Defense should be cut by 30%. Mostly through waste elimination and the cancellation of unnecessary weapons programs. BTW, I think this is the most important part of our budget. I'm a big supporter of our military. So, cuts should be to waste and corruption. Not to our dedication to defense of our country.
- Housing and Urban Development, cut the department by 80%.
- Health and Human Services, cut it by 50%
- NASA, increase it by 10%
- Department of Energy, cut it by 25%
- Department of Labor, cut it by 50%
- Department of State, cut it by 25%
- Department of Transportation, increase it by 10%
- Social Security Administration, cut it by 20%
So, where are we after my cuts?
- $174B less in SS payments
- $181B less in Medicare payments
- $290B less in Medicaid payments
- $286B less in Other mandatory payments
- $199B less in Defense spending
- $38B less in HUD spending
- $39B less in HHS spending
- $1.9B more in NASA spending
- $6.6B less in DOE spending
- $6.7B less in DOL spending
- $13B less in DOS spending
- $7.3B more in DOT spending
- $2B less in SSA spending
Total Savings in Steve's Budget Cuts: Right over $1.2T. There! We've balanced our budget, added no debt. Although we've not paid down any debt. But, it's a start. THAT'S WHAT I WANT TO SEE. Next year, we cut more. We cut SS more, cut Medicare more. Even defense. Perhaps it's time Europe and Japan start paying their own bills. We need to focus on defense where it help the USA and perhaps the USA only for a while.
As for revenues. The Federal government needs to move away from taxing citizens so much. Our economic growth is hurt by the types of direct taxation our Federal government employs. But, they can't reduce revenues. So, what should they do? THE FAIRTAX. It's indirect and helps tax the underground economy. And it's revenue neutral. Further, it helps the US become a "tax haven" encouraging the repatriation of trillions of dollars held by Americans in investments abroad. And it encourages foreigners to invest here.
Trade? Well, I like a free market. But, let's face it. China isn't a "free market". Her government manages how things come in and go out. Our government needs to have the "arrogant" belief that the USA should have trade surpluses with other countries. Otherwise, there's probably not a benefit to us. If those other countries don't like it, perhaps they can sell their goods somewhere else. This may seem harsh and I'm sure there are businessmen in the USA who wouldn't like this. But, we're better off in the long run when we have a fair playing field. Let's use our might to ensure this. When we have that level playing field, we compete very favorably.