Tag Archives: social security

December 3: Some Economic Proverbs

We have more tax revenues than ever…and ballooning deficits in Washington, D.C. Neither party has the courage to balance a budget and repay obligations. Here are some insights for changing the conversation:

  • Create a budget based on the real revenue of the previous year. If there is more money, decide ahead of time where it goes; if less, have the cuts ready.
  • Unregulated capitalism and bureaucratic socialism achieve the same end: a few are enriched at the expense of most.
  • Begin a process of removing the thousands of agricultural subsidies that benefit huge agribusinesses and are no longer needed.
  • Transform HUD and other agencies into efficient, decentralized catalysts for help and transformation instead of career paths for bureaucrats.
  • Cut defense spending and increase support for veterans. One less bomber means help for thousands of vets and less pork for Congress to give away.
  • Privatize all public pensions, with excellent regulations through the SEC and other agencies. Eliminate the special retirement benefits for elected federal officials and have them held to the same economic standards as all citizens.
  • Public employee unions should be able to bargain, but not hold taxpayers hostage to benefits they cannot afford. Bring all teachers and workers into Social Security and offer excellent private plans – just like the rest of the country.
  • Hold all government agencies accountable for best practices and have private-sector leaders offer insights on efficient methods and ethics.
  • Transform the IRS with simplification of the tax code and consider alternative ways of raising revenue.
  • Invigorate private/public partnerships for all kinds of infrastructure, with high standards, but honest bidding processes and a cap on “change orders” and lawsuits.
  • Stop sending tax dollars to colleges and universities for frivolous programs and lower the cost of education by demanding that teachers teach, and students work.

With courage, love and wisdom, we can change a 50-year trajectory.

“Solving” the Budget Deficit Crisis

For over 50 years, Democratic and Republican Administrations and Congressional leaders have tolerated and sometimes touted deficit spending, resulting in a huge national debt. Balanced Budget Amendments are often proposed but dead on arrival in committee because no one wants to offend constituents or appear lacking in compassion.

The fundamental flaw is simultaneously maintaining a federal welfare state and a close to wartime economy at the same time. “Guns and butter” are problematic. This does not mean we must sacrifice adequate defense and concrete compassion! What we need is a complete reprogramming of political mindsets that merely “kick the can” down the road for the next generation in order to appease various special interests.

As I write these words, tax revenues are at an all-time high. So why are deficits also ballooning? Every new President and set of Congressional leaders promise to “sharpen the pencils” and “go line by line” through the budget….and then they cave to political expediency.

Underneath the surface is even more ominous news – there are no “savings” locked away for Social Security or Medicare/Medicaid needs in the decades ahead. Since the 1970s, it is all a numbers game!

As an aside, if we managed our family budgets like our national (and sometimes local and state) government(s), we would declare bankruptcy and perhaps face serious criminal/civil charges.

So, what do we do? Here is a prescription (using the insights of many folks much smarter than me):

  • Decide to live within our means. Apart from extreme global emergencies, this is vital.
  • Privatize government pensions and benefits so that elected officials are not immune to economic realities.
  • Streamline government services with the help of ethical and efficient business leaders so that recipients get what they need, and bureaucracy is minimized. It is a moral issue when government keeps ballooning and the poor and our soldiers barely make it.
  • Simplify the tax system and eliminate the egregious loopholes that reward the crafty and penalize workers.
  • Establish priorities so that when revenues go up, there are places for the extra funds (including debt reduction). And if revenues fall below expectations, plans are in place for judicious cuts.
  • Begin debt repayment and true Social Security savings once there is a balanced budget.
  • Establish alternatives to the public employees’ unions that forget their source is the American taxpayer.

With these starting points, we can wisely confront our warfare and welfare policies and devise new strategies for defense and compassion. Compassion is best administrated locally, with federal ethical oversight. We must be prepared to confront terrorism and aggression without being an occupying force longer than needed. And our veterans deserve good care.

Every day, thousands of families happily discover debt-free living. When normal includes sacrifice and saving, stewardship of limited resources and creative budgeting, families flourish and the foundation for prosperity is assured. It is time to get the government off the credit cards and on new pathways.

Careful budgeting will not “starve the children” or weaken our military – just the opposite. Today’s discipline is tomorrow’s destiny. Imagine the USA being the largest creditor instead of the largest debtor. It is possible within a decade if we have courage and self-restraint, creativity and vision for generations yet unborn. We need no long fear being held hostage by hostile powers that own our debt.

We can do this.