Odd Citizen

Odd Citizen
An Odd Citizen’s Search For Vanishing Freedoms

The Right Tool for Budget Trimming

January 18th, 2010

Government budgets need to be hacked, not trimmed. Pictured below is what the seller, Husqvarna, calls a “traditional multi-purpose axe.”

This is the correct tool to use for reducing government budgets down to a practical size. Whole departments need to be eliminated and their employees fired.

Let’s start with the following. Can someone tell me what “services” the following Federal Government departments provide for you personally? Would their disappearance cause you any real hardship? Note that none of these are constitutionally authorized or even permitted Federal Government activities.

Department of Education ($63.5 Bil.)
Department of Energy ($24.7 Bil.)
Department of Commerce ($8.2 Bil.)
Department of Labor ($54.2 Bil.)
Department of Transportation (71.1 Bil.)
Health & Human Services (70.4 Bil.)
HUD (38.5 Bil.)
EPA (7.1 Bil.)
NASA ($18.1 Bil.)
NSF ($6.0 Bil.)
EPA ($8.0 Bil.)
SBA ($22.8 Bil.>

Completely hacking off these departments and activities would reduce the budget by $393 Billion, a good start, but only 13% of the total budget.

When I advocate hacking off 85% of the federal government’s agencies and make a challenge to identify personal consequences I always get the retort, “But what about the national parks?” OK, let’s talk national parks. The Department of the Interior runs the national parks. The Department of the Interior costs the U.S. tax payers 11.5 Billion per year. The budget spends $2.1 Bil. on national parks, 18% of the total Interior Department budget and 0.07% of the total Federal Budget. So I’ll grant you the 0.07%. We’ll transfer this function to the new National Parks Operations Agency, which will contract out the parks to private business operators. They’ll do the job better and for less money. But let’s eliminate the rest. HACK IT OUT.

A few more agencies that need the axe treatment are:

Homeland Security (37.6 Bil.)
Veterans (48.4 Bil.)
Corps of Engineers (4.7 Bil.)

Constitutional Departments:
Office of the President (0.4 Bil.)
Judicial (6.3 Bil.)
Legislative (4.7 Bil.)
State (38.3 Bil.)
Treasury (12.5 Bil.)
Other (7.2 Bil.)

Some Homeland Security activities are needed, particularly with the threat of Islamic Terrorism. But not 37.6 Billion worth. So let’s cut that in half. Veterans and Corps of Engineers are necessary obligations, but they too can do with a 50% haircut each for savings of $90.7 Billion.

Constitutionally mandated activities such as the Judiciary, legislative and office of the president, can be trimmed at least 25%, saving $38.1 Billion and no Federal Budget should have such a large “Other” (it must have no purpose to describe it) so HACK IT and save another $7.2 Billion.

That leaves Defense and entitlements.:

National Defense ($600 Bil.)

Social Security ($660 Bil.)
Medicare ($420 Bil.)
Medicaid & SCHIP (210 Bil.)

Net Interest ($240 Bil.)

The Entitlement Mess: Combining Social Security, Medicare, and Medicaid/SCHIP adds up to $1.29 Trillion. These are supposed to be paid for by so-called payroll taxes. But in fact, the money collected (budgeted at $850 Billion for 2009 but actually $803 Billion, down 5.5% from budget) is immediately spent, leaving a deficit of ($1.29 Trillion – 803 Billion=) $487 Billion. So what is to be done about this?

My proposal is to have an plebiscite in the form of: “Which of the following do you prefer?”

A. Stay with the present Medicare/Medicaid/SCHIP program and double or triple the current FICA taxes, including so-called employer paid portions to 35% of income making these programs viable for an unknown future period. In voting for this option you understand that the U.S. will lose its current standard of living and become a third world economy with almost universal poverty – no exceptions for you.

B. Privatize Social Security, Medicare & Medicaid making each program optional and relying on private charity to provide for those who “fall between the cracks.” In so doing, over time, eliminate $1.29 Trillion from the national budget. By voting this option you understand that, although the country will become immensely richer due to a vastly stimulated economy, you will have additional responsibility and duties, and failing these you may some day have to rely on the charity of others.

C. OPEN FOR SUGGESTIONS — this is a vital issue.

This leaves National Defense, a $600 Billion program ripe for some axe work to trim it down to what is actually needed for the country’s defense and to back up its international interests. A reduction of $200 Billion should do the trick, leaving $400 Billion in the budget.

In keeping with the 33% reduction in National Defense, we’ll reduce the budgets of all other remaining departments by a third as well.

After a while, the Interest portion of the budget withers, so we’ll just leave that one alone. After all, we’re not Argentina.

After the hacking the non-entitlement budget looks something like this:

Office of the President ($0.3 Bil.)
Judicial ($4.7 Bil.)
Legislative ($3.5 Bil.)
National Defense ($400 Bil.)
State (28.5 Bil.)
Treasury (9.4 Bil.)
Homeland Security ($18.8 Bil.)
Veterans ($24.2 Bil.)
Corps of Engineers (2.3 Bil.)

Total Budget: $491.7 Billion. We’ve hacked off $529 Billion. That wasn’t so hard, was it?

But we still face a reform of the $1.29 Trillion entitlement mess. This can only be solved by a plebiscite as suggested, above. If it is not solved then we’re doomed to poverty and serfdom.

To place this into perspective, the last time the Federal Government spent about a like amount ($504 Billion) was in 1979. The country had a population of 225 million. By 1989 the budget stood at $1.1 Trillion, double that. The population had risen to 246 million. The cold war had just been won, so we were still in maximum cold war defense mode. The budget had a $152 Billion deficit. The 2009 expenditures amount to $3.0 Trillion with a $400 Billion deficit. The population of the country is now 300 million. We’ve gone from spending $2,300 per capita in 1979 to $4,479 per capita in 1989 to $10,000 per capita in just 30 years. In spite of the Reagan economic boom and the cold war peace dividend, the Bush-Clinton-Bush governments have put the country into a terrible jam. What Obama intends to do to us is frightful.

Note that without the entitlement mess the Federal Government would have to collect “only” $1,430 per capita to finance the government. Entitlements add $4,300 per capita for a total of $5.730 per capita or ($17,190 for a family of 3). The current burden is $10,000 per capita ($30,000 per year for a family of 3). But this whole article uses 2009 budget figures because 2010 is so wildly uncertain. With the Obama/Pelosi/Reid vision of the future it looks more like a complete wipe-out. Just give all your money to the Feds and they’ll decide how to spend it until the whole country collapses.

And this doesn’t even touch on the fiscal mess the individual states have brewed up for themselves. (Maybe more on this later.)

The moral of this story is: Trim the budget with an axe, and vote on the proper future handling of entitlements. It can’t go on this way much longer without drastic reforms.

2 Responses to “The Right Tool for Budget Trimming”

  1. […] EPA, HHS, and other burdensome, expensive and useless bureaucracies. (I wrote about this here, here, and here.) That would distract some of the attention from entitlements, as millions of […]

  2. […] The President’s Commission on debt reductions is composed of sissies who want to send the budget to the salon for ‘do’, when it should be sent to a barber shop for a true haircut. Or better yet, it should be submitted to a bunch of loggers for a clear-cut. My suggestion for easy and permanent spending reductions starts at $393 Billion, twice the commission’s figure, and then goes on from there. See here. […]

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