As bad as the situation is, all is not lost. Many smart people across the country are doing the hard analyses and recommending the tough, but necessary spending choices that need to be made to save the country from the political class that rules it. For example, the Cato Institute has been going through the Federal budget line by line, looking for waste, redundancy, and savings. So far, they have found over $500 billion in annual savings. If realized, the $500 billion in savings would put almost five $5,000 a year back into the pockets of every American houseold. $5,000 that they could then use to live a freer live and stimulate the economy in ways that the Obama administration can only dream about.
Consider the following numbers from the November, 2010 issue of Reason magazine whose theme was: "How To Slash Government Before It Slashes You." Consider their findings of thirteen ways on how to slash the Federal budget:
- Overhaul Medicaid - Medicaid was originally thought to be a low cost way to provide health care to the country's poorest and sickest individuals. However, the Department of Health and Human Services expects the total cost of Medicaid to top a half TRILLION dollars in 2010, hardly low cost. For most states, the program consumes more than 20% of the average state budget. Medicaid consumes more tax dollars than all other welfare program combined. The Reason article cites research from the University of Virgina, the University of Pennsylvania, Columbia University, and Cornell University that indicates that those covered by Medicaid are at best no worse off than those not covered by the program, in other words, we pay big buck for no results. Obviously, the costs of the program need to be tamed, something that will not happen under Obama Care. The article proposes radical changes including terminating the program or changing the funding equation for state subsidies based on inflation and not on the previous year's expenses.
- Bring The Troops Home - The article wants to bring home all of our troops currently deployed in both Iraq and Afghanistan immediately, not the planned and prolonged withdrawal currently on the table. Since both wars have already cost the country over $1 TRILLION and thousands of deaths and more lives changed dramatically by wounds, whatever payback we receive by "winnning" either war will be dwarfed by the human and economic cost. The Congressional Budget Office predicts that the current withdrawal schedule, if it does not slip, will cost the country another $274 billion to $588 billion over the next eight years. The article correctly points out the the country will paying for both wars for decades in caring for those that have been wounded in battle. End the insanity now and bank the savings.
- Erase Federal Education Spending - I think it was Albert Einstein once said that "Stupidity is the act of doing the same action over and over and expecting a different result." Federal government spending on education has increased 80% since 2001 but test scores of American kids in reading and math have been flat since 1971. Title I, which eats up $16 billion a year, has not met its goal of closing the gap in learning of kids in high poverty schools. Head Start, which costs $8 billion a year, has been found by the Federal government to not provide any type of head start in learning by those kids in the Head start program vs. those that were not in the program. The $1.2 billion 21st Century Community Learning Centers are nothing more than babysitting services, having nothing to do with education. Reason would eliminate the whole Federal Education Department since it spends and spends and spends but nothing ever makes the kids any smarter or more competitive. If the whole department cannot be killed off, than at least cut all of the programs that do not work.
- Since the beginning of the economic downturn, the private sector of the economy has lost 8.5 million jobs while all levels of government have actually added 100,000 jobs. The National Conference of State Legislators predicted that state governments will incur a total budget deficit of $84 billion in 2011, with 24 states reporting deficits of at least 10% of their total budgets. From 2000 through 2008, our population rose 8% and the CPI rose 25% for a total increase of 33%. However, state government spending rose almost 60%. Thus, the economy did not cause the budget problems in the states, growth of state government caused the problem. Recall our discussion recently where we found that the population of Buffalo is half of what it used to be but the number of city employees has remained unchanged. The first step to curbing state deficits is to restrict government spending increases to the sum of population increases and inflation.
- End Traditional Pensions For Government Employees - Local and state government funding shortfalls of their public employees' pensions is at least $500 billion. Governments will have a very difficult time finding the money to honor these pensions payouts. However, going forward, the easiest way to ease future pension burdens is to eliminate traditional pensions for all new government employees. Very few new workers in the private sector receive tradiitional pensions benefits. It is not fair to have these pension free workers in the private sector continue to finance a traditional pension benefit for government workers. New government workers would need to rely on 401k like plans, Social Security, and their personal savings, much like jsy about everyone employed in the private sector. For existing and retired government workers, they need to be forced to pay more for the privilege of having a traditional pension, something that Govenror Schwarzenegger accomplished in California.
- Declare Defeat In the War On Drugs - State and Federal law enforcement agencies spend more than $40 billion a year and make 1.7 millon drug arrests every year. The Office Of National Drug Control Policy estimated that Americans spend about $80 billion a year on illegal drugs, of which about 90% of the cost is because we make drugs illegal. Theroretically, making drugs legal would free up over $70 billion that could be used to grow the economy. Cheaper drugs would greatly reduce crime associated with people in need of drug money to feed their habit. A Reason magazine article from last year described how the decrminilzation of drug possession in Portugal actually reduced drug abuse rates. We have been fighting the war on drugs for decades with nothing to show for it except violence and increased drug usage. This srep would elimiinate the wasteful spending and associated crime.
- Cancel The Federal Communications Commission - This agency has an annual budget of $338 million dollars but a study in 2005 by economist Jerry Ellig esitmated that FCC regulations hit consumers with over $100 billion in extra costs every year. According to the article, the Commission sticks its nose into evey nook and cranny of the industry, slowing down progress an innovation. The article proposes a way for the private market to regulate itself in this area without the FCC.
- Uproot Agricuture Subsidies - Since local and family farmers are generally ineligible for Federal farm subsidies, the overwhelming amount of taxpayer dollars that go to farm subsides goes to large farming conglomerates, i.e. Federal farm subsidies are nothing more than corporate welfare and a source of election campaign financing for incumbents. These subsidies distort markets, make food articially more expensive in some categories, and distort land usage. Get rid of them and let the farm corporations fend for themselves without taxpayer dollars.
- Unplug The Department Of Energy - Formed by Jimmy Carter in 1977, this department has failed to deliver on the pressing national issue of a coherent and sane national energy strategy and policy. If the department has not done this basic task in the 33 years of its existence, what makes anyone think they can do it going forward? Their research and development funding of new technologies has not resulted in any new technologies. What makes us think that they can pick winning tehcnologies going forward? Kill the program going forward and let the private market pick the winning technologies while the taxpayers save money with the department's demise.
- Repeal the Stimulus - the economic stimulus package was so large that even our wasteful politicians have not been able to spend all of it. Given that it is obvious that the stimulus money spent so far has been non-effective in keeping the unemployment rate from skyrocketing, why not bank the remaining $301 billion that has not been spent and offset some of the natinal debt? Remember, government cannot create jobs, only the private sector of the market can create long term, sustainable jobs. Govenrment can create short term work, but as soon as the stimulus money is spent, that work disappears and we are right back to where we began. Plus, consider the Obama adminstrration's own numbers. The administration claims through its stimulus tracking website that 749,142 jobs had been created as of June 30 due to stimulus spending. However, if $301 billion of the $794 billion porgram has not yet been spent, that means that $493 billion was spent to generate these 749,143 jobs. Thus, the cost per job created is an astounding $658,086 dollars per job! You cannot stimulate the eoncomy if you spent well over half a million to create one job. Save the remaining, money, the money that has been spent has been wasted and did not prevent skyrocketing unemployment.
- Spend Highway Funds On Highways - The original Federal Highway Trust Fund was created in 1956 and all of the Federal gasoline tax was supposed to be used only to maintain and grow the interstate road system. Unfortunately, the political class could not refrain from stealing from the fund and using it for urban transit, sidewalks, bikeways, recreation trails, and transportations museums. These are all state and local government projects, not Federal projects. Save the money on these non-highway porgrams, reduce the deficit, and let the states deal with their own bike paths.
- Privatize Public Lands - The Federal government is the largest land owner in the country. Reason magazine proposes any number of ways to get the Federal government out of the land ownership business by selling the land to states and private interests.
- Terminate or At Least Audit The Federal Reserve Board - nobody really understands what the Fed does and how it does it. This step would either eliminate the central control that the Fed has over the economy and our lives or at least see what their processes are. Given that the Fed had no clue what it was doing in the lead up to the Great Recession until it hit them in the face, much like the Department of Education and Department of Energy which have also not done their job through the years, how much worse could our lives be if all of these departments went away?
- Step 1 - reduce the Federal government budget by 10% a year for five years.
- Step 5 - aggressively step up fraud and waste investigations in order to save the hundreds of billions of dollars wasted every year by lax government oversight and regulations.
- Step 9 - eliminate a traditional pension benefit for all new Federal employees.
- Steps 10 -12 - reform Social Security to put it on a solid financial basis.
- Steps 23 - 25 - enact the proposed process to create a coherent and doable national energy policy that is enviornmentally friendly.
- Step 26 - enact the proposed process to solve the problem of illgal drugs usage in the country.
- Step 27 - enact the proposed process to solve the problem of failing public schools in the country.
- Step 28 - enact the proposed process to solve the problem of escalating health care costs iin the country.
- Step 30 - bring back almost all foreign deployed U.S. troops froom not only Iraq and Afghanistan but also Germany, South Korea, Japan, and elsewhere and bank the savings by suspending all new military recruitment.
- Step 44 - eliminate all Federal spending on projects that do not substantially impact the lives of the citiizens in at least five states. This would obviously eliminate all earmarks that politicians use to fund their re-election campaigns.
Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the folloiwng sites for freedom:
http://www.cato.org/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.comn/
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