Friday, July 22, 2011

Budget Zero

In recent years it is has become increasingly evident to me that those in control of the government checkbooks have one thing in common – they do not have the ability to collectively budget.  This is leading to both the current “crisis” with the federal debt ceiling, as well as state budgets such as the standoff we have here in California.

What is also becoming increasingly obvious is that the great amassing of debt is doing nothing but increasing our reliance on our creditors.  As many of our creditors may not have our nation’s best interests at heart (China comes to mind), this external influence into our internal affairs is becoming very worrisome.

Should we continue on this course I am afraid that the economic system or our very government may become so influenced by external interests that it is no longer under our control, if it does not fail completely.  At that point, any government programs that exist would become moot – we would not have them.

So, if we can foresee us on a road that leads to the destruction of all programs, and we have government that does not have the ability to chisel away at the expenditures, then the time has come to do something different.

I propose that, instead of trying to figure out what to cut in order to bring our budget inline, and trying to force deeply entrenched agencies to shrink themselves, that we start by assuming that all government programs and expenditures are cut.

You read that correctly.  Cut everything.  100%.

At this point you may be calling me a lunatic (and other names not fit to print), but follow me through this line of thought to the end.  During the presidential campaign in 2008, President Obama repeatedly stated that he would use a scalpel to work on the budget instead of a hacksaw.  Well, when the patient is dying because of rampant infection in the leg, the time for a scalpel is over – it is time to amputate to save the life of the patient.

Let us see how this could play out.  Assume at this point that we have now notified all government programs, agencies, beneficiaries, etc. that their programs are cut for the next fiscal year.

Now, obviously, we could not have a country without any government whatsoever.  That would be chaos and anarchy. What we do have now is a clean slate and, beginning with that clean slae we can begin to add expenditures back onto the budget.

The first thing that would get added would be our interest on our existing debt.  You have to pay the payments on the credit card or completely loose trust and ability to maneuver in the world.  In addition, because we know that we can not continue this pattern of paying one credit card off with another as we have done for years, we will also add a sizable chuck of payment on the principle balance as well.  This will allow us to reduce our interest payments in future budgets.

Secondly we add on 100% necessities.  For the federal government this means, primarily, the defense budget.  If you can not defend your country from foreign attackers then you will not be country for very long.  That is one reason we are getting our finances in order – to prevent outside influences in the first place.

Now we can start to entertain proposals on every other program that exists.  Each one would have to come up with a new proposal on how to deliver a necessary service or program – one that is not based on the existing agency infrastructure.  If you have essentially cut off all funding to an agency, see how fast they will come up with proposals to meet needs on a smaller, streamlined budget.

These proposals would have to have one thing very clear – the what, why, and how.  What they are doing, why they are doing it, and how they are accomplishing it.  A good legal justification would need to be attatched as well.  Each proposal should also be narrowly defined.  Why?  Because it makes it easy to line up identical or nearly identical programs.  A big house cleaning like this would give the opportunity to cut out a lot of waste, beyond simply reducing the number and scope of programs.

After you have reached a point that is at 90% of projected revenue, you stop adding things on.  Why 90%?  Have you ever seen a government expense estimate not go over budget?  This would be the icing on the cake if we ended up not spending the extra 10% over the course of the year, but history teaches us that is not likely to happen.

Am I saying cutting out Medicare, Medicaid, Social Security for seniors, etc?  No.  Programs such as these would likely be some of the earlier ones added back on, hopefully in a stream-lined form of them with less red tape and easier access to the benefits.  In an ideal situation, these programs would not be necessary, but at the current time they are a basic part of our economic system.  (I have some words of wisdom for those that would want these programs cut in this process, but I will leave that for another time.)

At this point you are probably also asking what about the [fill in the blank with your favorite program]… I would say “you have to see”.  I would like to have all of the fun and nice programs, grants, etc, but if the government can’t pay its bills, the program has little to no value anyway.  For example, I am a huge advocate for the arts, but if the government goes bankrupt, what good did it do us to fund the full National Endowment for the Arts with tax money?  Where did it leave us?  I would say cut many of these or greatly reduce them for now.  Then, we may have opportunity in the future to really do something.

This is the greatest country in the world, and with the American spirit, we can accomplish much.  It is time for us to clean our financial house to free the people – and the government – from the burden that it places on us.  Being weighed down with too much debt can harm anyone.  If you have experienced that yourself in recent years during this great recession you can appreciate what I am talking about.  When it comes to finances, debt hurts us all.

In short, it is time for a clean slate.  Now is the time to stop this top down budgeting and to flip it around and focus on that which really helps Americans – freedom and liberty.

1 comment:

JohnE said...

Remember, we are the 21st century Romans..and yes, they know how to take care of the books ... Just like the Italian mafia..
Greed ..that's the key..