The Treasury Department has revealed that sometime in late April or early May the federal government will eclipse the current national debt ceiling of $14.3 trillion. Of course, this means that Congress must act before then to either raise that figure in order to continue spending to meet its budgetary requirements or cut spending to keep from exceeding the limit. Needless to say, the battle lines are drawn. Democrats are on one side appealing to the emotions of average Americans by claiming that Republicans hate them because they intend to vote against raising the debt ceiling; thereby forcing a shutdown of the federal government and consequently denying them of their federal largess, which in the last few decades has become their birthright. For their part, Republicans are proposing, a whopping $60 billion in federal cuts. This must be a cruel joke! Sixty billion dollars out of a $1.6 trillion deficit? The reaction of both to the current situation is indicative of the fact that we are in real trouble.
There is only one course of action our overlords in Washington can take and that is to cut federal spending by $738 billion over the next six months thereby making raising the debt ceiling a moot point. We have no choice, and here is partially how it could be done.
First of all, whoever said that government jobs should be recession-proof was a fool. The private sector has laid off millions in the last three and half years, there is no reason why Uncle Sam shouldn’t significantly cut his workforce as well. The average bureaucrat makes between 30-40 percent more in salary than their private sector counterparts. They have more generous benefit packages and pay next to nothing for their retirement and health care packages. By cutting hundreds of thousands of paper pushers, we can save money and free up resources for the private sector to create real jobs.
We can cut the federal payroll by eliminating several departments and agencies. For example: the Department of Education. Since its inception in 1980, Uncle Sam has appropriated over $1 trillion to that department. What has it accomplished? We are still dissatisfied with our education system. Eliminate just that one bureaucracy now and we save $37 billion over the next six months.
Then there is the Defense Department. As a nation we spend most on our defense; as a matter of fact, we spend more than the next six highest countries combined. In his most recent press conference, President Obama said tough choices have to be made in the budget debate. But, he questioned whether we really wanted to be a nation that cuts funding for baby formula to poor families. He should also be questioning whether we want to be a nation that spends hundreds of billions on a war machine that kills millions and ties up capital at the expense of millions of Americans needing jobs. At around $750 billion a year, we should end the empire, bring the troops home, and restore sanity to our defense spending. We can no longer afford it.
There are also many federal government programs that should be abolished immediately to save money; for example, farm subsidies and NASA. Farm subsidies should be killed because they go mostly to large agribusinesses anyway and are immoral in these times of increasing food prices and possible worldwide food shortages. NASA should face the axe because whatever worthwhile benefits it produces can be provided by the private sector for a lot less money.
And speaking of increasing food prices, they are with us and are a major reason for getting our fiscal and monetary house in order. Because the world’s commodities are purchased in dollars, a devaluation of our currency has caused prices to spike worldwide. In the last year the price of wheat has skyrocketed by 114 percent and corn has soared by 88 percent. That is what all the fuss is about in Tunisia, Egypt, Algeria, Libya, Yemen, and Bahrain. If Congress decides to monetize more debt, prices will only rise further. At some point, unrest could spread to the U.S.
It is a sobering circumstance to say the least. Now is not the time for class warfare or ridiculous proposals to cut spending. What is needed is statesmanship. Nothing less than worldwide peace and tranquility is at stake.