the Federal Budget To Prevent U.S. Bankruptcy, Part I:
Why It Needs To Be Done
Jim Grichar (aka Exx-Gman)
by Jim Grichar
note: I ask readers for their indulgence because of my extensive
use of the b-lingo bureaucrat-lingo and the detail I used in
presenting my arguments. I do this to reduce bureaucratic counter-arguments
which I expect to receive to the absurdity that they invariably
the federal budget deficit now estimated to exceed the $500 billion
level and not apparently likely to decline rapidly in the near future,
citizens should rightly worry as to when, and not if, the
United States will go bankrupt. While foreign governments like Japan,
China, and Taiwan are financing a large part of the U.S. deficit
(from 4/02/03 through 3/31/04, foreign government holdings of U.S.
government debt increased by nearly $262.3 billion, from over $897.0
billion to just under $1,159.3 billion) as a way of supporting the
dollar and thus spurring their exports to the U.S., how long will
they continue to finance the U.S. government spending spree?
the current presidential election year, with the proposed $2.4 trillion
dollar Bush budget for fiscal year (fy) 2005 (an increase of $81
billion over this yearís budget), Republicans in Congress are making
vague noises as to reigning in the growth in spending and
Democratic presidential candidate John Kerry is calling for guess
what a recision of the measly tax cuts that President Bush signed
into law earlier in his term. Neither political party nor its erstwhile
presidential candidates are discussing the serious changes in U.S.
policy and spending reductions necessary to prevent the U.S. from
falling into the bankrupt state that it is currently heading for
at breakneck speed.
Federal Reserve Board Chairman Alan Greenspan, who with his colleagues
has been flooding the U.S. and world economies with U.S. dollars
in a fitful attempt to finance a world economic recovery, has begun
to state that federal spending needs to be cut significantly if
America is to have a hope of achieving strong long-term economic
growth. Greenspanís formula, however, only nibbles at the edges
of the problem, namely by proposing reductions in future social
security benefits for baby-boomer retirees via a change to a less
generous annual cost of living adjustment.
Medicine for the U.S.
prevent the U.S. slide into a near-term national bankruptcy with
an associated catastrophic collapse in the value of the U.S. dollar
and in living standards and to stimulate longer-term U.S. economic
growth, federal spending needs to be cut drastically, and the time
to begin those cuts is now. An independent presidential candidate
needs to state that the welfare-warfare state concept on which the
U.S. government has been run for more than a century has got to
come to an end. Otherwise, the U.S. will plunge into economic chaos.
in a past article I discussed how the whole federal budget process
is stacked towards greater spending, I certainly believe that the
federal budget can be cut. The warfare-welfare state can be shrunk,
and, given the current political and economic situation in the U.S.,
there are many spending programs, and even whole departments, that
are vulnerable to the budget axe. I offer up these proposals as
a way of getting talk started about actually cutting the federal
budget and as a plan which a truly independent presidential candidate
can run on.
are many benefits to ending the welfare-warfare state, both in economic
terms and in terms of securing the benefits of peace and freedom
for Americans. A drastic cutback in the welfare-warfare state will
spur medium- to long-term economic growth in the U.S., providing
new and productive jobs in the private sector for many of those
who have lost jobs due to companies moving operations overseas to
such places as China and India. Unlike tariffs and import quotas,
which would lead to slower U.S. economic growth and lower living
standards, this free market approach would lead to higher living
plan would also allow the current tax cuts to be made permanent,
especially the important abolition of the much-hated estate and
gift taxes, which destroy family wealth and the incentives to build
family wealth. Without this tax, families would have a much stronger
incentive to save and invest because the fruits of such thrift and
enterprise could be passed along to succeeding generations. Thus,
parents would not only be providing for their own retirement, they
would be providing for the livelihood of their children, grandchildren,
great grandchildren, etc.
cuts in spending would give the Congress time and fiscal resources
to provide for existing retirees under Social Security and Medicare
but abolish that severely flawed system (which is nothing more than
an inter-generational Ponzi scheme) so that future retirees could
provide for their own retirement and health care independent of
of the added longer-term benefits of pushing through some sharp
cuts in near-term federal budgets is that, once implemented, the
public will get used to being without what were once thought of
as "necessary federal services." In other words, the public
will be able to see through the scam of other federal spending programs,
enabling further major cuts to be made after this initial round
of budget cuts.
the course of this multi-part series of articles, Iíll keep track
of proposed near-term cuts in what I call the "Cut-o-meter."
Unlike the phony budget cut numbers that come out of Washington,
claiming that the budget has been cut, the totals on the "Cut-o-meter"
will give readers an idea of how much would actually be saved and
not spent compared to the current budget for fiscal year 2004, which
has been approved and is being spent..
the public is upset with George Bushís war in Iraq and generally
upset with the worthless United Nations and U.S. foreign adventures
in general, major cuts in defense spending and the abolition of
foreign aid, accompanied by a major change in U.S. defense strategy
and tactics, are the area that offers a way of ending the warfare
state. Once the warfare state has been ended, the welfare state
will become easier to slim down and then abolish.
Grichar (aka Exx-Gman) [send
him mail], formerly an economist with the federal government,
writes to "un-spin" the federal government's attempt to con the
teaches economics part-time at a community college and provides
economic consulting services to the private sector.
© 2004 LewRockwell.com