Sunday, September 9, 2012

Energion Political Roundtable: Budget Priorities

The latest question from the Great Energion political roundtable is up! The issue posed this round is:
What are the most critical elements of an economic plan for the United States, and how should they be balanced? For example, consider deficit reduction, managing the size of government, creating jobs, maintaining social services, maintaining military strength, supporting current overseas military operations, reducing spending, and increasing taxes. Which candidate has a plan closest to what you prefer?


For me, one present consideration outweighs all of the others and yet it is not a line item on any budgets proposed by either major party: the national debt. The issue is not so much the annual deficit as it is the overall debt. Many people use those terms interchangeably but they should be viewed individually. The deficit refers to the difference between government revenue from taxes and the amount is spends in a given fiscal year. In the last few years the Obama administration has overspent by an average of more than $1 trillion and all of that deficit spending goes into the national debt, a sum of $5 trillion and climbing by the day. During the recent Democratic convention the national debt passed the $16 trillion mark with hardly a mention by the speakers.

At $16,000,000,000,000 and a population of 314,000,000, every man, woman and especially child in this country is in debt to the tune of $51,000. That means that my family of ten is responsible for about half a million dollars in debt that others have incurred on my behalf.Gee, thanks a lot!

Debt reduction needs to be a line item in the budget, setting aside a substantial portion of tax revenue to pay down the debt. Politicians in both major parties simply assume that their policies will somehow increase tax revenue to the point that we will just magically start paying back the debt, a naive assumption or perhaps a cynical misrepresentation that avoids the truth that the government already spends every nickel it brings in and then some. If tax revenue goes up, the government will simply spend even more. Any sensible budget priority must deal with the reality of the national debt, a debt that amounts to more money owed than has ever been owed by a anyone. I am under no illusion that this will ever happen because there is no political benefit in it. Politicians in both parties make a living by bribing us with our own money and paying down the debt on spending they already bribed us with gains them no real benefit. Still the question was asked and that is my answer!

The second budget priority is the military. As one of the few Constitutionally defensible line items in the Federal budget, the military gets preference over virtually any other spending area. Having said that, even though military spending is a legitimate area for spending, it does not follow that all (or even most) spending by the Department of Defense is legitimate or proper.

As I have detailed in previous posts the United States military is utilized in ways that are more aptly described as projecting U.S. power over other nations rather than in defense of the United States (for more details see here, here and here), contrary to the clear intent of the Constitution. Very little of what we spend our "defense" budget on is directly related to defending a nation with no serious or credible nation-state adversary. The amount we spend on military procurement, maintenance and deployment is staggering. From the Downsizing the Federal Government project at the Cato Institute:

The department will spend about $688 billion in fiscal 2012, or $5,800 for every U.S. household. It employs 2.3 million people, and it spends about $230 billion a year on procurement, research, and construction.

For comparison, Wal-Mart has about 2.2 million employees worldwide. Other huge corporations like Apple (60,000) and General Motors (200,000) have a fraction of that number. That makes the defense department larger than any private employer in the U.S. and prior to 9/11 the military looked like a really sweet career choice for young people that didn't want to go to college. That is great and all but the military was never intended to be a) a full time standing force and b) or a job bank for young people. Our spending on the military must be a part of any serious effort to pay off the debt and reduce the size of the government. It is the height of hypocrisy for conservatives to rail against big government when it appears in the form of a welfare check but to applaud it when it wears a uniform. What it is the right number for defense spending? I am not certain but I know that the Republican  hysteria over proposed $100 billion cuts is unwarranted. Even more troubling is the enthusiastic embrace of unlimited military spending by people who claim the name of Christ but that is an issue for my other blog.

Other than defense every single department of the Federal government should be subject to substantial budget cuts. By substantial I mean more than 20% and not a reduction in future spending growth, which is what most "cuts" amount to, but an actual reduction in spending in real dollars year over year. Most of what occurs in the Federal bureaucracy amounts to creating onerous regulations, shuffling papers from one desk to another and taking money from the tax payers before doling it back out to the very people in belongs to in the first place. I would give serious consideration to eliminating some departments completely, starting with the misnamed Department of Education closely followed by HUD and HHS. Certainly we should, at the very least, combine commerce, agriculture, energy, labor and transportation. D.C. is full of three things: monuments, lobbying firms and massive block spanning Federal offices. None of them are terribly useful and two of them are outright harmful.

What about creating jobs? The very best thing the government can do for the job market is to stay out of it. It is evident that there are virtually no conservatives in any of the major parties, leaders or rank-and-file, based on the constant talk of "jobs, jobs, jobs" as if bolstering or creating jobs is somehow in anyway a proper function of the government. Taking money out of the private sector or worse borrowing money to employ people is a failed strategy and one that the Federal government has no business being involved in.Both "stimulus" spending and corporate subsidies serve to distort the labor market and the private enterprise system and both should be eliminated.

Social services? We have so called social services because the church has abdicating her role to the very government so many Christians love to hate and because families no longer support one another. The system is unsustainable with an increasing population of seniors, living longer and therefore drawing more and more from Social Security and Medicare, and a shrinking population of younger people that are becoming more and more unemployed or underemployed. I would love to see us start to phase Social Security out of existence and find a private sector alternative to Medicare. That is also not going to happen of course.

Bottom line? We need to start every budget with a substantial portion of tax revenue aimed reducing the debt and then everything that follows needs to be cut dramatically or eliminated all together.


So who among the current crop of candidates comes closest to this vision? Certainly not President Obama who has never met a government program he didn't love and seems to have no end to his appetite for more spending, more borrowing, more taxes, more government and ultimately more people dependent on the government to form a loyal voting block for Democrats. Mitt Romney is closer but only marginally and I frankly don't think he believes in anything. Libertarian candidate Gary Johnson is probably the candidate who comes closest but he has zero chance of winning this year. However, the influence of Ron Paul, while powerful this year, is certain to increase by 2016. If the GOP continues to ignore the libertarian voting block they will soon find themselves without sufficient votes to win an election for county dog catcher much less the presidency. 2012 is a lost cause and the best we can hope for is government gridlock so our Federal overlords cannot make things any worse.

My candidates locally, Mike Pence for Indiana Governor, Richard Mourdock for U.S. Senate and Marlin Stutzman for U.S. House of Representatives tend to be more conservative than average, as is Indiana as a whole, but still fall solidly into the traditional GOP of big spending on the military. I will be voting for all three but none really captures the vision of a truly smaller government.
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