The Calculating Lemma for America’s Recovery

Republican ElephantIn case you missed it, welcome to sequestration.  So far most of us don’t feel any different than before sequestration became reality.  But sequestration is Romper Room compared to the potential government shutdown scheduled for 03-27-2013 about a week away unless Congress and the President agree on the debt ceiling.

First of all, as I mentioned before when I blogged on baseline budgeting, those draconian spending cuts resulting from sequestration do not reduce spending.  In fact, spending will be still be increased, the deficit will continue to grow; just the rate of growth will be reduced.  If you are $16 Trillion in debt, you cannot afford to buy a stick of gum.  The fact that sequestration does not reduce the deficit is a pretty good indicator that our federal government is involved in way to many things.  There is no easy solution for a compassionate, intelligent conservative.  But something has to go.

Second, if the government shutdown happens, it will be because the two parties will not be able to agree on whether or not to raise the debt ceiling (i.e. the rate of tolerable growth) and by how much.  Aren’t we trying to use Molotov Cocktails as fire extinguishers?  America has accrued insurmountable debt and now, not only does Washington not want to pay it off, but wants to raise the ceiling so we can spend more without consequence?  Try to get Citibank to raise your credit limit when your Visa is maxed out and you cannot afford minimum balance.  Yet, that is exactly what our government gets away with.  The catch-22 is if we don’t raise the debt ceiling, America is most-likely headed for Greek-style bankruptcy.  Now the question is can this be avoided?

This brings me back to the corollary to that Schoenhaus Theorem.  We must look at 1789 and calculate minimum government and determine if the cost to maintain a minimum government continues to accrue insurmountable debt.  If it does, America is beyond repair.  If not, there is still a window to fix America and return it to its lofty status as the greatest country in the world.  I am working on a calculating lemma to the corollary to the Schoenhaus Theorem which would include a dollar on the old-time gold standard.

I fully understand we cannot operate under 1789 rules in the twenty-first century.  But this is the model politicians and elected officials need to make their decisions.  We make a hypothetical model for what I refer to as minimum government.  Using current rates of inflation, but with a gold certificate dollar rather than a federal reserve note, we determine hopefully the amount of budget surplus America would have under minimum government.  Now instead of reducing government in real time by making uneasy spending cuts, we work the problem backwards and determine what we can add to this minimum government and still have a surplus, break even, and accrue debt, but not insurmountable debt.  We decide what is really important that cannot be privatized or can be privatized but not feasible to privatize at this point in time.  Once we have a model we can live with, our elected officials make only the spending cuts that reduce government to the model we built.  With fewer entitlements, the new goal will be to create as many opportunities as possible for the American people to live their American dream.  When the people have enough disposable income to afford to pay more taxes, it will be possible to increase taxes to offset the manageable debt accrued, but we will never take it all—we will guarantee all Americans have enough left to live their American Dreams, or the ability to make up the difference in a very short period of time.

I believe the 60:40 hybrid currency where our dollar is 60% federal reserve notes and 40% gold certificates must be incorporated in the new model—once we balance the budget, we begin a never-ending journey to make sure it stays balanced, or goes no deeper in the red than what is considered manageable and is rectified very quickly.

Let us drink from the fountain of wisdom inherited to us from our Founding Fathers, build this minimum government, and rebuild the model to determine how to cut spending down to this model.  America is the greatest nation God allowed to inhabit Earth.  Now let us glorify God by using our gifts of intelligence and compassion with the offering of this glorious gedanken.

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