Pkg Man wrote:
We simply cannot achieve a national consensus as our views and priorities have become so divergent.
This is a real problem but it's one for which the founding father provided an elegant solution: federalism. The 10th Amendment states that all powers not explicitly granted to the federal government are reserved for the states and for the people.
It's a brilliant idea because it creates a flexible system where there's a vibrant "market" for good governance. If you desire an expansive safety net, you could move to a state that provides one. If you don't want anything more from your government than a gun permit and a tax break, There's a State for Thattm.
Unfortunately, we live in a post-Wickard v. Filburn world and the federal government enjoys massively expanded power. Once the Commerce Clause covers wheat you grow and eat yourself, we are truly through the looking glass. The larger government grows, the more this heavy-handed "one size fits all" style of big federal government creates conflict and friction across the country. This births all the problems that you mentioned.
Attempting to discuss discretionary spending in regards to the federal budget is a lost cause without fixing the largest parts of the budget - Medicare/Medicaid, Social Security, Defense, and Debt Servicing. Everything else is rather minor in comparison.
Easiest first -
Social Security - Despite all the panic, there is a simple fix, raise the contribution limit to infinity. There, social security is funded for another ~70-75 years (far enough out that anyone should be happy). No need to mess with retirement age or benefits. Any other fixes, are simply ways to game the system by various parties.
Defense - Our total defense budget this year is going to be around $1.4 trillion. Obviously foreign wars are a problem, as are 600 millitary bases on foreign soil. Much of our defense buildup and foreign bases revolve around the steady flow of oil. A simpler solution to me, would be to retreat to the Monroe doctrine, forget NATO and other entanglements, and invest part of the difference into renewable energy buildouts. Forget the rest, do we really need a laser on a friggin cargo plane? Oh, and the last thing...Congress has to actually start declaring war again...
Medicare/Medicaid - As consumption of economic output, this is the tapeworm in the country's economic intestines (health care costs). Medicare/Medicaid has overhead of under 2%, compared to 25%+ of private insurers. I think allowing everyone to buy into the system is the obvious solution. All the people saying that the country has the best system in the world - no, it doesn't....unless you're worth a mint. This particular insurance should be a seperate item in the budget, with it's own independently adjusting tax rate with all cost increases borne by the employee (employer contributions should be held steady at current payroll taxes). Cost should be based on lifestyle as well. Also, have the rest of the world stop benefiting from our subsidization of prescription drug costs, allow bargaining by the federal plans.
Debt Servicing - Congress has a problem functioning. Quite simply, it can't seem to handle it's main duty - budgeting. If we can't remove lobbyists and outside money from the system, then pass some constitutional amendments about when and why debt may be allowed, and how/why it should be paid back. Example - allowed during war and specific economic events. Surpluses - during specific economic events. Etc. Have a debt on income, I bet people would start realizing the impact of their cake & eat it approach currently taken.
Now, those out of the way...
Tax reform - VAT probably the best way to go in a hybrid Fair Tax plan IMO. I'm not sure I'd eliminate the income tax completely, but the IRS inefficiencies are a problem at the least. Eliminate all tax breaks and credits and deductions, simply establish a progressive income tax scale...and have it be flat within those guidelines.
Yes I just proposed alot of tax increases. Unfortunately, the party of no taxes is the best party at running up debt, and the other party can't come up with a backbone to message what Americans have to hear. Unless people see the cost of their decisions (ever see those polls that show what americans want to cut - answer - only foreign aid...which americans routinely overestimate by a magnitude of what we really spend) - they won't be able to take responsibility for them.
Quite frankly, those 4 main categories, plus our horrid tax code, are the problem with government spending. As to how we actually got to those areas in the first place, I'd place the blame squarely on greed and outside influences (lobbying, corporate cash, union cash, etc).
Any arguments about constitutional law, the validity of other departments, programs, etc, quite simply takes a backseat IMO until the above is solved. One final note - the libertarian approach is always enticing, but ultimately an unrealistic one. When people in vast numbers demand and rely on what the government does, you're the exception and not the rule. That's why libertarians like Goldwater, Paul, and yes, even Brown, never had a chance...and never will. There's a reason Paul went back into the Republican fold.
brajalle wrote:
Attempting to discuss discretionary spending in regards to the federal budget is a lost cause without fixing the largest parts of the budget - Medicare/Medicaid, Social Security, Defense, and Debt Servicing............
One final note - the libertarian approach is always enticing, but ultimately an unrealistic one. When people in vast numbers demand and rely on what the government does, you're the exception and not the rule.
Might I suggest that your two main statements are both true and contradictory. The country was not dedicated to the proposition that all people ought to rely on what the government does, but so long as that remains true we'll continue to have a difficult time trimming the largest parts of the budget. To put it another way, why should anyone restrain their appetite for government when folks are convinced that someone else will pick up the tab?
Yea, ultimately I think our country's problem comes down to the fact that we've taken liberty out of the equation and left life and the pursuit of (material) happiness. Without venturing too far down a non-budgetary path, I'm pretty damn alarmed at the ever-faster plunge we've taken to surrendering individual liberties the past decade. This country is looking positively Orwellian.
I do think that it was impossible to envision the world in the late 1700's and the issues we face today. The framework is just that. It's not a magical bible of all things. Ultimately, government for the people, by the people - and that is reflected in the mess we have today. The development of regulations, the social safety net, and even the convoluted mess with the budget/congress, are ultimately outgrowths of the people's desire. I'm less concerned than most libertarians with rigidly following the constitution, as it does allow for much of what we have today. The root cause of our major issues is a systematic corruption of discourse, undue influence, and greed clouding the entire picture and citizens minds. Bread and circuses.
Anyways, my point was that the best way for people to start taking notice and caring is when they feel the pain - or have to start footing the bill. Now, given the budgetary problems the typical consumer today has gotten themselves into, that may not mean much, but it could, as typically if a problem gets bad enough, a consumer can/or will undertake drastic changes. Witness the conversion some people have in their 30's and 40's to frugal lifestyles. Neither party has been successful at allowing this. The Democrats are a mess on fiscal issue consistency and messaging, and the Republicans seem to have intentionally decided that the best way to prove that government is evil is to spend like drunken sailors and cut revenue. Ie one party, if looked at as a whole, has Alzheimers (moments of lucidity, clueless the next) and the other uses the charge card to buy his buddies crap while gleefully slashing prices below cost in his business. Of course, getting such clowns to act rationally, let alone following the sometimes counter-intuitive policies proper economic action requires in certain situations, is why humanity isn't going into the next frontier anytime soon, let alone solving the major issues that confront us.
It does a good job of showing you which cuts may have the biggest impact — even if they aren't politically feasible right now. Here's a post on how the application was developed: Behind The Times’s Deficit Project
Last edited by Gumby on Fri Mar 04, 2011 9:04 am, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
We can either try it the "most effective" way or we can try it the "politically feasible" way. The "most effective" way is to look at the 80/20 and cut massively from there. If you're looking at cutting off a pound of fat from 20 steaks, would you go for the filet mignon or the prime rib?
The caveat is the most effective way is not politically feasible. So if we are entertaining somewhat realistic discussions, we need to look at what could be slathered up with crisco and pushed through the logjam in congress. What I would propose if I were the President is a 20% across the board cut in ALL federal spending. No debates, no special interests, no opinions on either aisle. Everything. I'd get on the air with a special state of the union and appeal to the 51%+ of Americans with children. I would attempt to unite us all behind a movement that is bigger than ourselves and paint two pictures: one where future generations struggle, or one where future generations prosper.
When you ask someone to sacrifice for themselves, it's a no-go. If you ask someone to sacrifice for their children, you can often get their support. A 20% cut across all programs is almost nothing, in reality. It's estimated medicare & DOD alone have 25% fraud problems.
Of course, the "right" thing to do would be to slash and burn everything that wasn't found in the constitution. But that's pie in the sky anyway. So, we're left with some sort of reality. I'm hoping someone like Chris Christie is the President in 2012 and is willing to propose such a ballsy idea. Short of that, I'm willing to accept the fate of a slowly declining empire at best, or a world crisis at worst. In the latter, the silver lining is that you have the opportunity to wipe the slate entirely clean and start over as long as you have enough of the right people leading the way.
Last edited by Wonk on Fri Mar 04, 2011 9:00 am, edited 1 time in total.
If I thought it could be done, I would cut spending AND taxes by $2 trillion each. Even without a balanced budget, an immediate $2 trillion in the hands of the private sector could grow our way out of the hole immediately and allow us to balance over the following 5 years.
Good stuff, Wonk. Your answer is interesting because it addresses the practical side of things: how do you actually make this work?
I agree that what you're suggesting may be politically possible. Not easy, but possible, and that's exciting.
Wonk wrote:
If I thought it could be done, I would cut spending AND taxes by $2 trillion each. Even without a balanced budget, an immediate $2 trillion in the hands of the private sector could grow our way out of the hole immediately and allow us to balance over the following 5 years.
Also good, although this one is probably "fantasy league" (how I wish it weren't.) History has shown that this kind of approach is quite difficult to pull off politically but also extremely effective. Warren G. Harding used this recipe of simultaneously reducing the size of government and slashing tax rates to move the US from the Depression of 1920 directly into recovery and a very low rate of unemployment.
