Saturday, April 09, 2011

Budget Deal Reached. Disappointment Ensues.

I was looking forward to a government shutdown. People would realize that 800,000 "non-essential" workers are just that: Non Essential.

The $39 Billion deal is a drop in the bucket compared to what really needs to be done considering the run rate of $1.6 trillion in expected deficits for the year. The government credit card will continue to be swiped for the foreseeable future... until it can't. See Greece, Ireland, Spain, & Portugal for examples. Unfortunately, the return on additional government debt to GDP is marginally small or negative at this point. So rampant money printing by the Fed through various schemes like QE1, QE2, and guaranteed debt is unlikely to contribute to the fallacy of "economic growth".

The only budget that remotely makes sense is the one proposed by Rand Paul. It would reach a balanced budget in 5 years by cutting spending (including defense spending) and removing entirely useless government programs such as the Department of Education, HUD (partially responsible for inflated housing prices), and Department of Commerce. All of these could have been left with the states instead of having money sloshed around with a scrape taken by useless federal bureaucrats. Paul Ryan's budget is a pathetic excuse for a budget, making several unrealistic assumptions (i.e. 4% unemployment), and still only balancing the budget in nearly 20 years. 20 years!

Here's a proposal that I could deal with:
1. Close the Department of Education and return control of education to Local governments
2. Close down Fannie Mae & Freddie Mac and end all government interference of the housing market
3. End all student loan guarantees. Peter Schiff explains how Student Loan guarantees inflate the the cost of education for the benefit of big banks.
4. End the financing of undeclared wars in Iraq, Afghanistan & Libya
5. End the EPA. All environmental claims could be resolved through enforcement of property rights.
6. Cut defense spending by 25%... at least. Reduce the number of countries in which the US has military bases by 50% within 5 years. The US military is not the hired mercenary of the world as many countries seem to believe.
7. End the financing of the War on Drugs & focus more on treatment of substance abuse
8. End the Federal Reserve's monopoly on legal money & repeal the 16th amendment that provides the guarantee of income to the Fed.
9. End the FDA. This agency is responsible for deaths of many thousands of people per year due to allowing dangerous poisons into the public through drugs. It also pushes a carb heavy diet (for the benefit of the agricultural lobby) that has increased the incidence of diabetes, obesity, and heart disease over the past 30 years.
10. End the Department of Energy & fold nuclear research into the Department of Energy (as proposed by Rand Paul's budget).
11. End the Department of Homeland Security. This department's tasks could easily fall within the jurisdiction of the CIA & FBI.
12. End all international assistance. Does it make sense that we're borrowing money to give to other countries at all? Charitable organizations can easily perform this task (see Red Cross)
13. Social Security, Medicare & Medicaid reform
14. End & Defund Obamacare. Obamacare benefits only the large healthcare companies (can you say 30 million new customers?) at the expense of the lower and middle class.
15. End the Department of Agriculture. What exactly does this department do anyways?
16. End the NSF. This organization rarely provides the public any useful science.

The only departments that really should or could exist are the DOD, DOT, State Department, & Treasury Department. Everything else is really just a waste of resources. Unfortunately, the largest components of the budget are the hardest to politically tackle: Defense, Social Security, Medicare, Health & Human Services, & the Treasury. These departments will need across the board cuts to ensure that the federal budget is a sane and responsible one that spends within its revenues.

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