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Thursday, October 7, 2010

Reducing the deficit/ you want specifics?

I have recently criticized (verbally) Congressional Republicans for promising to reduce the deficit while refusing to provide specifics, except as to what they won't touch (the larger programs),  A couple of my Republican friends have said (freely translated), "OK, Liberal Assh**e, tell us exactly how you would lower the deficit, if you're so smart."

A fair question.  So here goes. Here are some of my main ideas.

First, some assumptions which may not or may not be correct:

1,  We need to focus on cutting the deficit right now.
2.  The Federal and other governments involved can constitutionally and legally do whatever they like.

Second, some assumptions  I think are correct

1.  While the Government is not a business, general business models can provide some guidance on how to operate.
2. You (yes, You) won't like my ideas. (I view them as a package.  Everyone will like some of them, but I will not let you pick and choose.  No saving your own sacred cows.  You may , however, add ideas that will further act to cut the deficit)
3. Every politician will like my ideas even less than you do.

Spending to be Reduced (and I specifically will not talk about reducing waste, inefficiency and fraud.  Everyone agrees on that as a general principle, at least until it bites them)

General thoughts.  The Federal Government  should focus on its "core" operations.  In this case, it means eliminating redundancy - eliminating Federal programs that cost money and do what the States can or should be doing.  I will not eliminate stuff that has a clear effect on interstate commerce, like the FAA, food inspection, and/or on interstate "environments", like the EPA, the Army Corps of Engineers.

Most of the programs I am going to "kill" are valuable and good programs.  They are desirable.  Their employees are the good guys.  But, there's no reason (except stupidity, greed, corruption, lack of money, and other political concerns) that the States cannot do this stuff, and we (the U.S.A.) do not have "extra" money to spend on duplicative services.

Programs to be eliminated (non-defense or foreign relations):(if you want to discuss specifics on 4 and 5 below, let me know)

1.  The Department of Education
2.   The DEA and ATF (if smuggling, leave it to the Coast Guard and the Border Patrol, which may need to be beefed up)
3.   All Federal Drug laws
4.   Most agricultural subsidies
5.  Most tax breaks for specific industries
6.  The National Endowment for the Arts (not a lot of money, but a luxury)

Defense

1.  Start passing laws and throwing people in jail for anything resembling war profiteering
2.   Consider starting the withdrawal from Afghanistan now.  Tricky, and I don't like this one, but I think we have to put our egos aside if the light at the end of the tunnel is an onrushing train. It seems that way to me, but I do not have the information available to our military leaders and Government, and would tend to defer to them.  Obviously, we would still need some workable strategy to squash terroist havens and training gounds in that part of the world, but this is a big and continuing cost in money and in lives.  Remember, our main purpose here is not to bring Democracy or civilation to Afghanistan or to protect Afghan women (and those are GOOD purposes), it is to defend the safety of the United States and its citizens.  We do not have the resources (or even the power) to make the whole world a better place.
3.  Implement Secretary Gates' proposed reorganization of the military now.
4.  Require the U.S. Military to purchase all of its supplies (including things like clothing) from U.S. sources that employe U.S. workers.  This one may not reduce the deficit, but it's something my Wife feels strongly about, and I think she is right.

Foreign Affairs (not just those cutting programs or expenses)

1.  Push the Chinese and others harder on currency valuations and other unfair trade issues - now.
2   Look hard at the idea that we may have to adopt part of the "State Capitalism" model of the Chinese in order to compete in the real world, particularly in the context of actually manufacturing stuff.
3.  Look hard at foreign aid programs (including military ones and humanitarian ones), and eliminate most of them

The Big and Hard Stuff/Social Security and Medicaire

1.  These are certainly a political "third rail", but necessary to look at realistically (and the stuff below is really pretty modest)
2.  Raise, or even eliminate, the cap on income which limits how much workers and employers have to pay into the Social Security Fund (There is already no cap on Medicaire contributions)
3.   Make Medicaire deductibles rise with the income level of recipients (this WILL HURT ME, along with a lot of the proposals I'm advancing here)
4.  Create a "lockbox" for Social Security and Medicaire.  Don't let the politicians keep playing with this money.

If One is Running a Business, One Wants to Increase Income (Well, duh!)  (I can argue each of the points below at length, but will not do so here.  If anyone wants to argue more specifically, let me know)

1.  Drastically increase the size of the IRS.  I am not advocating (at least in this paragraph) any substantive change in the tax laws.  However, I bet (and there may even be studies) that the investigations and audits the IRS does make money (for us!) (in a net sense, after subtracting the IRS'overhead), both in terms of collecting from the taxpayers in question, and, even more so, in terms of a deterrent effect on the general taxpaying population.  The Republicans often say they want Government run  more like a business.  Well, the IRS is our main profit center!   Treat it as such.  Tax evasion is not a "right", even if it's something more availble to those with more money and political clout.  (It is hard to cheat on your taxes if you are filing a 1040-EZ with a W-2 attached). (Republicans, I would remind you here about your comments about how we should not "condone" or "reward " illegal acts, at least if they involve poor people and immigration)

2.  Let the Bush income tax cuts expire for everyone.

3.  Pass an Estate Tax Proposal which is reasonable - maybe a higher threshold and a lower starting percentage, but there absolutely should be some estate tax.

Defined Benefit Pension Plans (my own particular hot button)

Outlaw or otherwise eliminate these types of pension plans, to whatever extent possible, at least for new hires.  Particularly for public employees (including Congress and other lawmakers), but also for everyone else.  These are, by their very nature, an actuarial time bomb, and those who negotiate them for government or management have very little incentive to take a hard line on thes issues; they know they will be long gone when the bomb explodes.  Give everyone a combination of 1)a self-directed defined contribution plan and/or a 401(k) plan and or/ a higher limit IRA, and 2)Social Security.  Then, an  individual can take what risks they want with the first plan, while retaining the conservative "safety net" of the Social Security.

While you are at it, overhaul the generally accepted accounting standards on pension plans so they are less of a joke.

Structural Governmental Changes

1.  Ban earmarks.  Does anyone even pretend to defend these?

2.  Pick an "effective date" a  few years down the road, so we do not know which party might immediately benefit, and change the Senate Rules, So that: 1).  Filibusters will require the signatures of 40 (or even only 35) Senators, but will last a maximum of two weeks.  After that, vote it up or down.  2) Senatorial "Holds" cannot be secret, and will last a maximum of one week, with no piggybacking.  Vote it up or down.

3.   Think about a line item veto for authorizations of spending.  I'm nervous about giving the Executive that much power, but it would almost certainly reduce spending.

4.    I really don't like unfunded Federal mandates.  I'm not sure if they can really be eliminated, but. . .

5.   Eliminate (yes, I know there are a lot of Constitutions that would have to be amended) the "upper" house of every bicameral state legislature.  I understand the nature of the US Congress, and its historical roots and purpose, but, as far as I know, both houses in 49 state legislatures (Nebraska has done quite well with a Unicameral Legislature for a long time) are elected on the basis of population, just like the US House of Representatives.  Why do we each need two separate State "representatives" of this type?  Well, we really don't, do we?  A pipe dream, yes, but it would save the states substantial money - not just the legislatures, but their staffs, overhead, and so on, would go.

Well, are you really serious about cutting the deficit?  Or only if it doesn't involve raising taxes or enforcing tax laws or touching Medicaire or Social Security?  Hello?  I'm waiting? Any politicians out there?  I thought not.  Enough.

2 comments:

  1. That's nice. Now what do you think we can actually get someone to pass?

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  2. I don't know, but, certainly,it will depend somewhat on the upcoming election results. Guesses: we will get reasonable estate tax, we will get Obama's income tax cut. The states will slowly start getting realistic about public employee pension. We will largely withdraw from Afghanistan in 2011. No significant Government spending will be cut, until the Repubicans feel they can take a run at Medicaid, not Medicaire. All just guesses, and all short term. We will at least try to get tougher with the Chinese about currency rates.

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