Presidential Budget Balancing January 31, 2008
Posted by Conrad Hubbard in : The Chip , trackback
Congress has repeatedly demonstrated an unwillingness, as a body, to actually balance our budget. As such, almost every year our government spends more than it takes in via taxes, resulting in a huge national deficit.
If you have a job, and you pay bills, then you know that you simply cannot do this forever. If you are a normal person, you end up in bankruptcy and lose your house and credit rating. If you are a country, your economy fails and your citizens struggle to make ends meet with virtually worthless bits of whatever it is that you try to hold forth as currency. Maybe your leaders make things pretend to work for a few years, or even a few decades, but eventually things go wrong. Eventually the people “inherit” their share of the debt run up by their leaders, in the form of joblessness, runaway inflation, economic failure, and bloody wars over foreign resources.
I have a suggestion, for our President, whoever that is now or might be in the future. When Congress hands you an unbalanced budget — again — then take a look at the projected actual tax revenue. Compare that with the budget. Issue an executive order to every department of the federal government, requiring them to reduce their expenditures by the exact percentage of the national shortfall. Every department, every agency, every office, every single money-spending aspect of our federal government.
This would force Congress to reallocate the overall expenditures to fit their real desires/mandates. If Senator John Doe wants his program to have $50 billion to spend, but the overall budget is 10% off, then he will have to argue enough to cut the overall budget so much that it is 10% lower overall in order to protect his program. Alternately, he can argue to boost his program to something on the order of $55.5 billion without any change to the rest of the budget. If his program is so important that the rest of Congress agrees, then he will get his way. Otherwise, his program is cut by 10% like every other program. Of course, if he manages to raise his program’s expenditure without any offsetting cuts to the overall budget, then the overall budget exceeds the tax revenue by an even greater percentage, and his program gets an even deeper cut. Back to the drawing board, and the negotiations!
The sad fact is that if this approach works, it will only hold us at our current level. We will remain in debt, and continue to pay 10-20% of our tax revenue as mere interest on our existing debt. That is, for every $100 you pay in taxes, $10-$20 goes to pay interest on our existing debt without actually improving our situation. Thus, what the President really needs to do is to reduce expenditures of the executive agencies by at least slightly more than the shortfall in projected revenue. If we are projected to be 10% short in tax revenue, then the President might choose to reduce all federal spending by 11%, for example.
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