The United States national debt is approaching $17 trillion and interest payments are projected to hit $763 billion in the next 10 years – considering the interest rates remain the way they are today, which is doubtful because of the Federal Reserve’s disastrous monetary policy (see here for further explanation on this topic).
Neither the Republicans nor the Democrats have submitted proposals that would seriously address the nation’s budgetary and fiscal crises. The Democrats want more welfare spending, while the Republicans want more warfare spending, but they compromise in the end and increase both welfare and warfare spending leaving the taxpayer to foot the bill.
Earlier this year, Washington officials claimed the sky was falling because of the sequester, a spending initiative that would slow down the rate of increased spending, but not actually implement serious cuts. At one point, one Democratic representative claimed 170 million jobs would be lost due to the sequestration. Unfortunately, the sequester certainly does not go far enough because the budget is still going up within the next decade to heightened proportions.
The only person in recent memory to suggest a sensible budget plan to actually the address the nation’s finances was Ron Paul, who presented his proposal of cutting $1 trillion in spending within the first year and balances the budget by his third year in office. He was not elected and America had two choices: rapid spending (President Obama) or somewhat rapid spending (Governor Romney).
Many claim that cuts in federal spending could hurt the overall economy, diminish the recovery, hurt the impoverished and elderly and create a disaster in the country. Fortunately for the statists, a huge swarm of people believed it and any recommended reforms to entitlement spending and suggested budget cuts led to hostile town hall meetings and massive protests.
The budget must be kept under control and not performing the necessary methods to get the fiscal house in order will eventually lead to insolvency. Indeed, borrowing trillions of dollars from China, Japan and elsewhere around the world, taxing the American people to death and inflating the money supply will not lead to prosperity.
Here are five budget items to help to avoid the fiscal collapse (please note, this does not include entitlement reforms and changes in the tax code):
1. Foreign policy
Robert Higgs, a scholar at The Independent Institute, a libertarian-leaning economic research organization, published a paper in 2009 that looked at how much the U.S. spends each year on its foreign policy.
Higgs calculated the money that goes to the Defense Department, appropriations given to the Department of Energy’s nuclear weapons program, the Department of State and the Department of Veterans affairs and the interest paid to finance these endeavors (other expenses were added too). The final figure came to roughly $1 trillion.
This figure is a huge sum for a nation that is being crippled by stretching itself too thin across the world and maintaining an elaborate welfare state at home. Think of what the U.S. could do with $1 trillion – giving it back to the taxpayers for one or defending the nation’s borders rather than the border between Afghanistan and Pakistan.
By slashing wars, foreign aid, loans that will never be paid back and armory to other nations, this will save the federal government a ton of money.
2. Departments and labor
Eliminating the Departments of Education, Labor, Commerce, Energy and an array of others would save the taxpayers a large sum of money and time because it would reduce the amount of bureaucracy. All of these federal departments have not had a successful record – look at the Department of Education, for instance.
Of course, this would also save taxpayers in public employee labor, which consists of bloated salaries, benefits and generous pension plans. At first, there would be a wave of jobless individuals, but eventually they would become productive members of society in the private sector and do more good than bad.
At least a 10 percent across-the-board cut in both employment and salaries would be a good start.
3. Salaries of politicians
It has always boggled the mind of the people why civil servants earn enormous salaries, especially when compared to the labor market in the private sector. The same thing can be applied to senators and congressmen, who earn each year $174,000 – the pay is more for leaders and the Speaker of the House.
Salaries do not include, again, the generous benefits and pension plans that those in the private sector would only dream of. However, they have to serve at least 20 years in office and reach 50 years of age (no wonder why they become complacent and spend huge sums of money during election seasons).
The annual pay accounts to nearly $80 million, a small sum in a near $4 trillion federal budget, but every little bit counts to balancing the budget. A senator or a congressman does not need to be making $174,000.
Heck, the president does not need to earn $400,000 annually plus all of the added benefits of living in the White House – each year, it costs the taxpayers $1.4 billion to maintain the lifestyles of the Obama family.
4. Wasteful spending
Considering the way the elephants and donkeys run Washington, their salaries might be classified as wasteful spending. But in all seriousness, the taxpayers’ money is severely abused with highly questionable spending and blatant fraud that is quite tragic.
Economic Collapse News has reported on the numerous examples of how the federal, state and local governments waste public money. Oklahoma Republican Senator Tom Coburn publishes his annual devastating Wastebook, which looks at all of the various ways Washington has wasted your money.
Here are examples:
– $10 million for a remake of “Sesame Street” in Pakistan
– $48,700 for a chocolate festival in Hawaii
– $113,227 for a video game preservation center
– $516,000 for “Prom Week,” a video game that allows taxpayers to relive prom night
– $300,000 for efforts to promote caviar consumption and production
Some may say that this $19 billion in waste won’t do much in the end, but remember every little bit counts. Also, if this waste is not tolerated then it saves taxpayers from future scandals and waste and the money can be spent more prudently and respectfully.
In Canada, Green Party leader Elizabeth May proposed her “Green Scissors” initiative last year. It included a concept of having civil servants work virtually rather than traveling to meetings across the province, nation and the world. May estimated that this in itself would save Canadians $500 million.
In the U.S., it could work for all levels of government. Performing teleconferences, virtual meetings and other advancements in technology could save the taxpayers a lot of money instead of having officials stay in five-star hotels, drink $16 orange juice and going to Paris, Venice or London.
The president does not need to travel to Las Vegas, Nevada from Washington to deliver a one-hour speech on immigration that cost taxpayers $1.6 million. Also, Vice President Joe Biden does not need to use Air Force Two to travel back and forth between Washington and Delaware at a cost of $13,200 nearly every weekend.
What cuts would you make to help balance the budget?