Our Great Issues

 

The Capitol Building, Washington, DC

We here repeat an updated analysis our national situation by the Cato Institute published in 2013.

 

A MESSAGE FROM THE CATO INSTITUTE

ON SPENDING:NO SACRED COWS

We face the annual budget crisis and possible government shutdown unless Congress can come together on a bipartisan basis to cut spending.  In spite of parity in numbers the distance between our two parties has never been greater.

The Affordable Care Act is far from the only program that should be repealed. Both Democrats and Republicans must be willing to cut programs that are championed by special interests in their parties. There can be no more “sacred cows.”  All of these socialistic programs fail because they are stolen blind by the elected people and then milked by the top bureaucrats.

Policy experts at the Cato Institute put together a plan that balanced the budget and reduces our dangerously high debt burden by cutting more than $3 trillion over 10 years in 2013. It builds on good ideas from both liberals and conservatives to expand individual freedom and reduce the burden of government, but it has been violated and now is only a fantasy, fairy tale, but interesting to consider.

You can read more about reforms at DownsizingGovernment.org, a project of the Cato Institute.

 

CORPORATE WELFARE | Farm aid distorts agriculture, harms the environment, and nearly all goes to well-off businesses. Energy subsidies have been disastrous, from a $500 million loss on Solyndra to $700 million wasted on a clean coal project in Mississippi. Phasing out farm and energy subsidies would save $160 billion.  (Note:  Most of this damage was done by all the "Climate Change" nonsense added.)

PRIVATIZATION | President Obama has suggested privatizing the Tennessee Valley Authority. TVA and other businesses may “no longer require federal participation,” his budget noted, which would “help put the nation on a sustainable fiscal path.” Other candidates for privatization include Amtrak, the Corps of Engineers, federal dams, airport screening, and air traffic control — which would save at least $110 billion.  (This was a very good idea, but would end the graft and kickback streams that had made many involved rich.  Can't do that!)

INTELLIGENCE BUDGET | The budgets of the CIA, NSA, and other intelligence agencies have become bloated with spending on vast and often invasive data collection efforts and armadas of drone aircraft. Cutting intelligence spending by one quarter would save $110 billion. (The CIA has long been a bureau in question with regard to involvement in drug traffic and other such crimes.)

DRUG WAR | The war on drugs wastes a huge amount of resources in our police and justice systems. It also harms civil liberties, foments violence, and does little to curb drug use. Ending the federal drug war and returning drug policy to the states where it belongs would save $110 billion.  (There is no simple answer to the drug problem, but really sealing our Mexican border would help a lot.)

SOCIAL SECURITY | Social Security has huge unfunded obligations, and it causes ongoing damage by reducing personal savings and harming labor markets. Meanwhile, spending on federal disability programs has soared as the number of recipients has multiplied. America should move to a system of personal accounts for retirement and disability, but meanwhile we would save $640 billion by indexing initial benefits to prices, modestly raising the retirement age, and trimming the disability rolls by one quarter.  (Social Security has always been a disaster.  If you had done nothing more than put all your SSI money in a bank and not touched it. Then, divide it by 300, the number of months between 65 and 90 and pay yourself that much every month from the bank fund you would be getting three times what we get from SSI every month if you lived to be 90 and very few do. Typically, that would be $4,500 per month or $54,000 per year!  So SSI is no gift.)

SUBSIDIES FOR THE STATES | Washington runs more than 1,100 aid-to-state programs. They are hugely bureaucratic and stifle state and local innovation. Phasing out federal subsidies for K-12 schools would save $180 billion and free states to improve the quality of their own education systems.  ( The Feds should get out of education.  They are bad at it.  I know having handled grants for a small school district my first year of teaching.  What a mess...)

SUBSIDIES FOR INDIVIDUALS | The government’s vast array of individual aid programs would be better handled by state and local governments and private charities. Programs such as food stamps should be turned over to the states. Phasing out federal food stamp subsidies over 10 years would save $400 billion.  ( Bravo!)

MILITARY OVERREACH | The Constitution envisioned a military to “provide for the common defense” of the United States, not one that serves as the world’s policeman. Congress should reduce overseas military commitments, avoid foreign wars, and create a leaner force structure. Making reforms to meet the budget caps for 2014 and beyond could save at least $200 billion. (Every damn war we have been in since WWII we could have avoided.)

MEDICARE | Medicare spending is the largest factor pushing the budget into crisis. Raising premiums and increasing cost-sharing would save $330 billion. Policymakers should also restructure the program by directing payments to enrollees, not insurers or providers. That would generate greater choice, spur innovation, and improve access to care. (When a doctor talks to ten minutes, scribbles gibberish on a notepad, rips it off, hands it to you and charges you $300 you know you have been had.  The whole "health" system is sick.)

MEDICAID | Medicaid’s open-ended matching grants to the states have led to huge cost growth, but not better health care. Congress should give each state a fixed amount of funding and free them to experiment with better ways of providing care for the needy. Limiting annual growth in the block grant to five percent would save $760 billion.  (More graft opportunities.  Kill most of them.)


Dollar amounts are savings over 10 years. Cuts are assumed to be phased in over 10 years. Total cuts include estimated interest savings

Note:  We repeat this here as time has confirmed it and Cato does very good work; they understand basic math, unlike our elected ruling class and we ask you to study this for an informed perspective on our national money matters.  This plan is good and begs attention.  We will be doing more work on this topic.  Adrian Vance