Miles to go before we Sleep

Republican ElephantWhile a bipartisan deal to avert going over the 1-1-2013 fiscal cliff is in the rearview mirror now, there are two far deeper cliffs down the road.  The first one is on 3-1-2013 where, although massive tax increases to those making under $400,000 have been averted, the draconian spending cuts, which include the military, go into effect.  And 3-27-2013, the deadline for a decision on the debt ceiling, which will either result in the deficit climbing to an insurmountable number or the bankruptcy of the greatest nation God ever allowed on Earth.

All sides agree both tax increases and spending cuts have to be in the equation, and spending cuts without entitlement reform are nothing but eye wash.  But to actually balance the budget and still maintain a standard of living that separates us from the rest of the world, other issues have to be addressed as well.

Currency Stabilization: I have said over and over, permanent fiscal sanity cannot be reached in an environment while the only form of currency is the Federal Reserve Note.  Its value, or lack thereof, is solely determined by how much is in circulation and whenever we get in a jam, we simply print more, further devaluating it.  Without one penny of additional spending, the devaluation process alone raises the deficit.  We must put forty percent of our currency back on the gold standard and require a 60:40 ratio be maintained.

Privatization: Entitlements that are deemed necessary to meet both our requirements as humane citizens and our constitutional commitment stated in the preamble as to promote the general welfare (the word welfare in 1789 was not a reference to the welfare state created in 1933) need to be turned over to the private sector A.S.A.P. if at all possible.  Giving government contracts to one company and rewarding them by exempting the one company from corporate taxes is desirable over a voucher system at this time.  This will ensure Social Security and Medicare will at the very least, be there for those for whom it is too late for traditional savings and in some form for future generations as well.

Departmental Consolidation: Many services provided by the federal government in the form of entitlements, as well as some others, can be retained, maintained, and re-funded by simply reducing the payroll in Washington, D.C. by having larger departments handling more services.  The best example is what Dwight Eisenhower did with the military in 1954.  The military was once divided into two departments, The Department of War, and The Department of the Navy.  The two departments were merged forming what we know today as The Department of Defense.  Short of privatization, Social Security, Medicare, and I will throw Medicaid into the mix for now, could be consolidated into one department, perhaps The Department of Humane Services, where all three services continue, but with all three departments merged into one, with a governing bureaucracy of only one-third as many federal employees.  The money saved on the two-thirds in salaries can be reinvested into this new department to enhance all three services.  The Three E’s is another good example.  Education, energy, and the E.P.A. can be consolidated to one department.  We need educated people to develop alternative energy sources that are environmentally friendly.

Entitlement Usage Rules: Using Social Security as an example, let us consider those whose pensions are large enough to live on without any additional government help.  Since we have decided we must tax according to income class and wealthier should pay more, let us consider wealthier Americans recycling their unneeded Social Security earnings for those who were unable to retire with adequate pensions and rely on Social Security.  This does not qualify as any form of socialism because revenue for Social Security is tax-based.  The money withheld from your paycheck is not given back to you dollar for dollar when you retire—it goes into a general fund and is appropriated and distributed.  President George H.W. Bush suggested something called the Portable Pensions Act, which never got off the ground.  This would have made it law that if you change employers (voluntarily or involuntarily), and your new employer does not or is unable to offer an equivocal pension, the new employer would be required to work with your former employer’s pension plan for contributions, at least from payroll deduction.

Government Contraction: While every state having two senators is constitutionally mandated, the number of congressmen in the House of Representatives is supposed to be in line with the nation’s population.  Every ten years, we take a census and when the results are in, reapportionment is considered.  But somehow, they manage to maintain 435 congressional districts; one state loses a district, another state gains one.  There were not 435 members of the House of Representatives in 1789 when we were a thirteen state league.  With the baby boom behind us, and generations X and Y carrying a much smaller population, and generations to follow most-likely as small or smaller, we need to consider a downsized House of Representatives.  The salaries saved will make a big dent in the deficit.  The problem with this is the earliest it could be done is 2021; we have to take a census in 2020, then run one more
presidential election with an electoral map based on the 2010 census, then put forth such a plan for reapportionment that includes contraction, not just redistribution.  Not sure we have another nine years to get the budget balanced.

Limited Government Future: Once we have a balanced budget, we need a long-term permanent plan for a limited government society.  You can’t just balance the budget and bring back everything you cut and start spending again—American will go right back into debt.  And since the Constitution prohibits the Federal Government from operating as a for-profit entity, unlike states, counties, and municipalities, the Federal Government cannot have a rainy-day fund as this is considered profit it is held.  Surpluses must be given back to the American people; let’s not repeat history; let’s use it wisely to create opportunities so Americans do not need entitlements.  Most Americans would prefer this anyway.

Economic Growth: Booms and recessions are inevitable no matter how America acts politically at any given time.  But what we can do is bring back manufacturing jobs to America, and provide more opportunities for college graduates to build careers in their fields of study in their own small businesses.  The latter involves policies and tax codes conducive to a small-business friendly nation.  The former involves working with both the working class and the owners of companies that manufacturer to bring the cost down so that it can be both profitable to the owners who cut the paychecks and such jobs can be created that pay decent wages.  I don’t see how we can accomplish this with a $16 Trillion deficit.  The government has to invest in a lot of things, but has nary a penny to invest at this time.

We can’t start on Pennsylvania Avenue.  We can’t start on Wall Street.  We can’t start on Main Street.  So let’s start on Elm Street and Morning Glory Circle.  Let’s inform our children that they will most-likely not have the same entitlements and let’s get them saving.  Let’s encourage career development by personal business ownership by selling the notion to our children and grandchildren that taking ownership of such a business is taking ownership of your life.

God Bless America!


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