In Tuesday’s debate, President Obama said if we as a nation take
deficit reduction seriously, it would have to combine “tough
spending cuts” with making sure “the wealthy do a little bit
more.”
Ignoring the fact that the President’s most recent budget
proposal
makes few such “tough cuts,” an interesting new factoid on
government spending in America shows raising taxes on the wealthy
to shrink the deficit is not only inefficient, but simply won’t do
the job.
Earlier this week, the think tank Just Facts showed in
a chart that total government spending is consuming more of our
economy than in the history of the country, including during World
War II. Liberals like Paul Krugman, of course, simply laugh off
concerns about this spending and its correspnding debt. According
to them, our debt dropped significantly after World War II, so why
should we worry about the long-term effects of today’s debt? Those
liberals, of course, ignore the fact that today’s fiscal problems
are very different from the fiscal situation faced right after
World War II — namely, that we won’t have the same worldwide
economic dominance, and we will have huge entitlement
obligations that weren’t present in the 1940s.
While more tax revenue is part of the solution to balance the
budget quickly (though we could also do it through aggressive
budget cuts), it should not come from raising taxes. Instead, it
should come from increased economic growth and/or simplification of
the tax code. As a January IRS study showed, nearly one-seventh of
taxes were lost to noncompliance in 2006, showing yet again that
our tax system is too complicated and
requires simplification.
But the real problem is spending. Very soon — heck, this should
have happened years ago — the following steps must be taken to
begin the process of reducing spending both immediately and in the
long-term:
First, get rid of the low-hanging fruit, including $25 billion a
year spent on
unused federal property, $17 billion
spent on agricultural subsidies, over $20 billion
spent on energy subsidies, and
$100 billion in corporate welfare, respectively.
Second, look at ways to eliminate as much fraud, waste, abuse,
and duplication as possible. At least
ten percent of the federal budget is wasted on this every year.
While most politicians talk about fraud and waste but never do
anything about it due to the complexity of the federal bureaucracy,
it would be a fairly simple process to implement changes to grant
processes and general oversight to save several tens of billions of
dollars annually. Senator Tom Carper (D-DE), for example, has
introduced legislation that would diminish a substantial portion of
the improper payments made every year, in the Improper Payments
Elimination and Recovery Improvement Act of 2011.
Third, diminish defense spending through efficiencies (the
Government Accountability Office considers the Department of
Defense ripe for fraud and other waste) and reformation of the
defense contracting system. We should also begin reducing our
military footprint in Europe, as well as leave Iraq and Afghanistan
entirely.
Fourth, reform all social welfare programs, from food stamps to
Medicaid to Social Security and Medicare. Social Security and
Medicare should be made solvent for the next century, and food
stamps, Medicaid, and other non-retirement social programs should
be changed so people are incentivized to get off the programs, and
so they only help the very poor and destitute. These changes should
obviously be phased in, but that phasing should start ASAP.
Fifth and finally, begin consolidating and/or chopping whole
programs and bureaucracies, starting with the Department of
Education, Head Start, and DARE.
Regardless of who wins the Presidential race in November, or
which party holds each chamber of Congress next year, the deficit
and debt are going to be the top issues facing Washington in 2013
and beyond. It is imperative that both are dealt with as soon as
possible, and given the level of spending and debt in this country,
it is clear that class warfare plans on taxes won’t work, and they
aren’t even a very good method to address these massive national
challenges.
