“We’re spending $3.7 trillion. We’re taking in $2.2 trillion,” Sen. Jeff Sessions said, “That’s a stunning number, and one of the reasons it’s so out of control is that we don’t have a budget.”
I couldn’t have said it better. Washington’s overall budgetary condition has gone from ridiculous to shear lunacy. Without a drastic course correction the loons steering the ship are going to take us and our economy down with them. (Since most of them have platinum-plated pensions, they will NOT go down with the ship).
By some strange alchemy of mendacity, arrogance, and deliberate ignorance, the United States Government continues to follow the financial lead of Italy, Portugal, Greece, and Spain…. and I might add Japan. For good examples of fiscal sanity we need only look at countries like Australia, Brazil, China, and South Africa.
US debt trends alarmingly up with no apparent end in sight. Failure to acknowledge these facts is a failure of leadership. The lengths the US Government is willing to go to continue this economic farce would likely be criminal if employed by corporations. (Ever heard of fiduciary responsibility?) Rhetoric like “there’s no problem with Social Security or Medicare… they are solvent”. Wasn’t the same being said about Freddie Mac and Fanny Mae a short few years ago? I wish President Obama and the US Congress would read some of the best investing books.
Every good rant deserves to deliver some solutions. And solutions, I’ve got in spades:
- Cut Federal spending. Start the debate at 2008 spending levels, and look for further cuts. Phase out entire programs. Freeze federal salaries until unemployment drops below 5%.
- Acknowledge that Social Security for people currently under the age of 40 will be aggressively means-tested. Folks under 40 (that includes me) don’t count on much unless you are in poverty during retirement.
- There are only two kinds of infrastructure with real, lasting economic impact. Interstate highways and the US power grid. I’m not talking “Smart Grid”… leave that to local utilities. I’m talking about new, improved, robust, high-voltage, DC power transmission across the United States. If Canada and Mexico want to sell their power, let them participate (via treaty).
- Let US oil and natural gas companies drill. Charge a 10% profit surcharge on new domestic (and offshore) production if you must, but approve the permits and get out of the way. [But raise the liability cap for disasters.]
- Embrace the Canada-to-US oil pipeline.
- Simplify the C-corp (corporate) tax structure by eliminating ALL “loopholes” and reducing the rate from 35% to 21%. Exempt the first $250,000 from C-corp taxes, and charge 10% for earnings of $250,000 to $5 million to encourage small business investment.
- Eliminate the self-employment tax on the first $50,000 of small business earnings.
- Strike down and reverse most provisions of ObamaCare.
- Rein in the EPA on faux “pollutants” like CO2 and modest levels of methane. Instead focus on true pollutants like carcinogens, harmful particulates, and toxins.
- Get out of the way. The private sector is a dynamo on steroids and is ready to roll when the regulatory restrictions are lifted and relaxed. Anti-trust and anti-monopoly rules still serve an important roll. Workplace safety is important too, but measure results as much as adherence to OSHA procedures.
Believe me, I’m writing with kid gloves. Tell me where you think I’m wrong. Please add your suggestions. I look forward to publishing both.