Less Government! No Deficit Spending! OK, How?

November 11, 2010

By Terry Smiljanich:

Common themes ran through most of the successful campaigns during this 2010 midterm election: less government, lower taxes, no deficits. Voters spoke loudly and clearly – we want chocolate fudge sundaes with no calories!

Now a bipartisan deficit reduction commission is also chiming in making some controversial proposals on how to reduce the deficit.  Let’s take a look at what’s on the table.

The federal 2010 budget is $3.54 trillion. The deficit this year is $1.42 trillion. Thus, to bring the deficit down to zero, we would have to cut the budget by 40%. No politician could get elected on that impossible platform. There are certain sacred cows in the federal budget.

Let’s start with Social Security, Medicare and Medicaid. They make up the bulk of non-discretionary federal spending, the 60% of yearly federal spending that takes place without Congressional action. No politician who wants to get reelected is going to talk about reducing Social Security or Medicare.

Add another 5% of the budget devoted to interest payments on our debt (we can’t default on those Chinese loans), and that leaves only 35% of the federal budget left to play with, not enough to eliminate the deficit.

But it gets worse. Of the 35% left for discretionary spending by Congress, 20% of that is for the defense budget, another sacred cow in American politics. We can’t “support the troops,” “remember 9/11,” or reward all those defense contractor campaign contributions by touching any of that money. Check out my previous article which analyzed the bloated defense budget.

That leaves 15% of the total federal budget, the place we will have to look to for any move toward “less government” with “no deficits.” Since we now know that “no deficits” is an impossibility with these times and this budget, we will have to scale back our desires and just look for smaller cuts.

Let’s see what would happen if we just took a 50% cut across the board, reducing the deficit by 7.5%, or $265 billion. Are we ready for some of these sacrifices?

  • Firing half of the meat and poultry inspectors;
  • Eliminating half of the air traffic controllers and FAA investigators;
  • Approving most new drugs without any analysis;
  • Cutting veteran’s benefits in half;
  • Closing half of the federal prisons and letting prisoners go free;
  • Firing half of our FBI agents and federal prosecutors;
  • Eliminating most of the farm subsidies;
  • Closing 20 national parks, especially the expensive ones like Yellowstone and Yosemite;
  • Letting half of the deteriorating highways and bridges go unrepaired;
  • Firing half of the border patrol and customs and cargo inspectors;
  • Shutting down the space program, and relying on Russian and Chinese rockets.

These are just some of the “less government” results we would get in attempting to reduce the deficit by just 7%.

Of course, there are two other alternatives. If we can’t tackle the deficit by such draconian cuts, perhaps we could increase taxes. I must be kidding, of course. Didn’t we already demand “lower taxes” as well? Even though personal income taxes are at historic lows, aren’t we already being “taxed to death?”

Another way is to either take steps to boost the economy (stimulus, anyone?), or give the wealthiest big tax cuts so they will hire more workers, hoping they don’t instead just buy more gold-plated faucets or stockpile their money and pass it on to their children tax free.

I don’t know about you, but I just can’t wait for some more of that calorie free chocolate fudge sundae!