View 685 Tuesday, July 26, 2011

The Deficit Dance

I hate to keep writing on this subject.

Budget Cuts: we will increase spending, but we will reduce the rate of increase. We just spent $9 Trillion we didn’t have, but we will make a $1.1 Trillion cut – over ten years. Which is to say we will cut $100 Billion a year, having spent $9 Trillion. The deficit will continue to grow. So the only choice is to raise taxes or the nation is finished, the elderly will not get their Social Security checks, the Veterans will not get their benefits. Inspectors in the Department of Agriculture will continue to get “cost of living” raises and step increases in their civil service ratings. Department of Education SWAT teams will get their raises including full health and pensions. The deficit will grow, and there will be another financial crisis. The EPA will continue to impose regulations, the courts will continue to accept lawsuits to harass anyone who intends to open a mine, drill an oil well, or create a business.

The only remedy will be to raise taxes. We must have shared sacrifices so that the Washington elites can go about business as usual. Washington public schools will continue to deteriorate but none of the elites will send their children to those public schools so that won’t be a problem.

In other words, the Dance goes on, and we are being played. Nothing much has changed. What’s called a cut is in fact merely a small decrease in the rate of increase, so that “cut” means spending more money. There will be a $1.1 Trillion cut spread over ten years, with a Commission of 12, 6 Republicans and 6 Democrats, to propose more cuts. If 7 of them can agree on a “cut” – which may be an actual cut but is more likely to be a reduction in the rate of increase – then both Houses of Congress have to approve the “cut”. This may amount to $2 Trillion spread over ten years, or $200 billion a year.

The government will continue to borrow $100 Billion a month. That amount will go up as the deficit rises. We will then be told that gollies, we did everything we could, but it’s not working, we have to have more revenue or we are in default, give us more money. When we point out that they promised cuts and didn’t deliver, we will be told that, well, yeah, but look at that guy with the private jet over there! Tax him, tax him! Look, that company made obscene profits last year! Tax them, tax them!

There is a way out. It starts with cuts in Entitlements. Begin this way: from this moment, you are entitled to only 99% of what you were previously entitled to. That includes Social Security, Welfare, your pension, Medicare. Meanwhile all government salaries and benefits are reduced by 1%. Once again, these are real cuts.

Set up the 12-person joint Congressional Commission, but its purpose is to identify programs that we can no longer afford to fund. Those will simply be eliminated or deferred until we have budget surpluses. They include a great number of regulatory agencies and enforcements. We set up a second Commission whose job it is to determine which regulations we can afford to put off until there is a budget surplus. In other words, determine what we can afford and must have even if we have to borrow money to do it. Everything else stops until we can afford it at which time we can debate the desirability of inspections of stage magicians to be certain they have a permit to use their rabbits in their acts. We can determine whether we have to reduce ozone emissions so drastically when we can afford to do that: but we don’t need to borrow money from the Chinese in order to cripple our ability to compete with the Chinese who don’t pay any attention to our environmental regulations.

We could try liberty. Leave the money to those who make it and get out of the way.

Or we can continue to Dance. Spend and spend, pretend to cut, spend and spend, pretend to cut, and when the next crisis comes, raise taxes.

Birth of Fire, a science fiction action adventure novel by Jerry Pournelle, is available on Amazon now, and will presently be available for the Nook.

Birth of Fire by Jerry Pournelle is now available for Nook as well as Amazon.