President Obama fulfilled his constitutional duty and gave his report on the state of the union this week. Here's mine:

We're in deep trouble.

You know why. Our debt has passed $14 trillion, and yet our current spending plans will make that worse. The U.S. debt will reach Greek levels in just 10 years.

But do not despair. If we make reasonable cuts to what government spends, our economy can grow us out of our debt. Cutting doesn't just make economic sense, it is also the moral thing to do. Henry David Thoreau had it right when he "accepted(ed) the motto … that government is best which governs least."

So what should we get rid of?

We start by closing the Department of Education, which saves $100 billion a year. Education ought to be in the free market. It's insane to take money from states only to launder it through Washington and then return it to states.

Next, we should close the Department of Housing and Urban Development: $41 billion. We had plenty of housing in America before a department was created. Let's get government out of that business.

Then we eliminate the Commerce Department: $9 billion. A government that can't count the votes accurately should not try to negotiate trade. Trade should be free. Free trade creates prosperity. And since trade should be free, we should eliminate all corporate welfare and all subsidies. That means: agriculture subsidies, green energy subsidies, ethanol subsidies, and subsidies for public broadcasting. None of these is needed.

I propose selling Amtrak. Taxpayers will save money, and riders will get better service. Why is government in the transportation business? Let's have private companies compete to run the trains.

And we must finally stop one of the biggest assaults on freedom and our pocketbook, the war on drugs. The drug war is really a war on our own people. The ends do not justify the means.

Now the biggest cuts. Republicans propose to cut discretionary nonmilitary spending. Good. But why stop there? That's only 15 percent of our budget. We must cut more. That means cutting Medicare, Social Security, and the military.

I know. Medicare and Social Security are popular, but they are unsustainable. We must privatize Social Security and slowly replace Medicare with vouchers.

And that brings me to ObamaCare. The only way to cut costs and still have medical innovation is to free the market. So I propose that we repeal ObamaCare immediately. Then we must do more: We must repeal all government interference in the medical and insurance industries, including licensing. All that impedes competition.

Now, military spending. Do you recall what candidate Obama said about the war in Iraq?

"I will bring this war to an end in 2009. So don't be confused."

But I am confused. We're two years past 2009, but we still have 48,000 troops in Iraq. We must shrink the military's mission to truly national defense. That means pulling our troops out of Germany, Japan, Italy, and dozens of other countries. America cannot and should not try to police the entire world. We can't afford it, and it's not right.

Those cuts will put America on the road to solvency. But that's not enough. We also need economic growth.

Our growth has stalled because millions of pages of regulations make businesses too fearful to invest. Entrepreneurs don't know what the rules—or taxes—will be tomorrow. This discourages hiring.

All destructive laws must go. I again propose the Stossel Rule: For every new law passed, we must repeal two old ones.

We need to progress to an America that cherishes individual freedom. That means a government limited by the Constitution, one that protects our shores and our persons but otherwise stays out of our way. We should take seriously the words of another president, Thomas Jefferson, and embrace "a wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned—this is the sum of good government."

That's my State of the Union address.

John Stossel is host of Stossel on the Fox Business Network. He's the author of Give Me a Break and of Myth, Lies, and Downright Stupidity. To find out more about John Stossel, visit his site at www.johnstossel.com.

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