Status quo (noun) – the existing state or condition
The status quo is comfortable. It’s peaceful, predictable, and overall not-too-bad… it’s also leading us straight to a disaster of potentially epic proportions.
THE PROBLEM
Three months ago, members of Congress came startlingly close to allowing the United States government to default on our national debt of over $14 trillion. Congressmen and women stood up in front of the assembled legislators and railed against the system that we have and said that something needed to be done. In their wisdom, they formed a small committee, dubbed the “Super Committee” (I now suspect by themselves). This small group of people, half Democrat and half Republican, was given the task of reducing the government’s budget deficit. They were also given a deadline; November 23rd. If they failed to come up with a certain amount of deficit reducing stuff (spending cuts, revenue enhancements, or a combination thereof) then budget cuts of $1.2 trillion would automatically kick in starting in 2013. Apparently these budget cuts are so drastic that we absolutely can’t allow that to happen. Unfortunately, if you believe the reports and the rumors coming from Washington these days, that’s exactly what is going to happen. If the so-called “Super” Committee cannot come up with some sort of compromise in the three and a half months that they had for this job, I personally view this as an epic failure to do the job that they were sent to Washington to do.
Don’t talk to me about the economic repercussions of raising taxes. I know what they are.
Don’t talk to me about the sob stories of all the people that will be worse off if the government has to roll back its benefits. I’ve heard many of those sob stories.
The fact of the matter is that We, the People of the United State of America, sent those 537 people to the House of Representatives, the Senate, and the White House to make the decisions that us mere mortals can’t even conceive of making. Someone has to make the hard decisions about what is more important in the country today, tomorrow, and ten years from now. Unfortunately, both sides of the aisle seem far more interested in holding the party line at best and moving the party line farther from center at worst than they do in compromising.
In my sometimes-not-so-humble opinion, it is despicable that the federal government has accumulated a debt in excess of $14 trillion. Say what you want about how our economy is still strong (it is) or how much better our prospects look in the short run compared to Europe (much better), I don’t care. In May of 2010, the average American who worked year round full time earned an average of $44,416.18. At that rate, it would take one person 315,200,452 years to pay off the nation’s debt. Put differently, it would require 315,200,452 people to dedicate an entire year’s wages to this effort and they wouldn’t be able to spend any money on such luxuries as food and shelter. That is more than double the workforce of the United States. What’s even more amazing is how the steps taken by Congress to curtail the truly incredible level of federal spending are laughable.
“Wait a minute!” you exclaim. “$1.2 trillion is no laughing matter!”
This would be true if those budget cuts were going to be focused in one year. However, they are going to be spread out over the next decade. If I am not mistaken, the way these cuts are laid out is such that they are far deeper in year eight of the plan than year two. However, it does not change the fact that it isn’t enough.
It is estimated by the US Census Bureau that in the fiscal year 2011 (10/1/10 through 9/30/11), the US government took in $2.1737 trillion and spent $3.8188 trillion for a budget deficit in one year of $1.6451 trillion.
The average annual budget cuts proposed by Congress would be $120 billion.
Cuts - $120 billion
Deficit (FY ’11) – $1,645.1 billion
Desperate times call for desperate measures. The government, Democrat and Republican alike, have spent us into a corner and there are very few things that will get us out of it. As much as it will pain everyone in Congress and everyone in the nation, it will require drastic spending cuts AND increases in taxes.
THE SOLUTION
Do I have a solution? Yes.
Is it overly simplistic? Absolutely.
Is there any other way? I’d love to hear something better.
In 2011, as I mentioned above, the federal government took in $2.17 trillion in revenue and spent $3.82 trillion for a deficit of $1.65 trillion. Please forgive discrepancies due to rounding - two decimal places are much better to deal with than four or five. This gap is just too big to bridge with one side or the other doing all the compromising which leads me to my solution.
The federal deficit is $1.65 trillion. Republicans are responsible for half and Democrats are responsible for half. If we assume that Republicans will look to cut spending and Democrats will look to enhance revenues in the form of new taxes, then we can very easily see what the scope of the federal government will look like.
The government spent $3.82 trillion last year. If they were tasked with trimming $825 billion worth of fat from that budget, that would be a 21.6% decrease in spending. Several candidates for the GOP nomination have even floated sound-bites with regards to specific spending cuts that they would make happen if they were voted into the White House. Rick Perry very famously wanted to cut the departments of Commerce, Education, and Energy and he was hoping that people out there in the real world wouldn’t look it up to see what that would mean. Forget for a moment the implications of actually eliminating those departments and focus just on the money. Last year those three departments spent a combined $135.9 billion. So my question for Governor Perry and the rest of the GOP candidates is quite simple; after you get rid of the “luxuries” that were brought about by Democrats that we can no longer afford, what are you going to cut next?
Those three departments represent a paltry 3.6% federal spending in a year where our expenses outpaced our income by 75.7%. This problem is far more serious than legislators in Washington are acting like it is.
The simple answer on the spending cuts side also has the advantage of being the most fair; cut 20% off the top of each department. Yes, vital services will be cut. Yes, these are beyond drastic measures but let me ask you this; what happens if the debt ceiling doesn’t get raised the next time around?
Now, to the Democratic side of the house…
Federal income last year was $2.17 trillion and they need to find a way to add that same figure; $825 billion. Income taxes comprised $956 billion, corporate taxes provided $198 billion, and “Social Insurance and Retirement Receipts” provided $807 billion. Clearly these three don’t add up to that full number but they did provide just over 90% of the government’s income so that is where the action needs to happen. A little bit more math says that in order to meet their needs, they would have to increase those three areas by 42%.
To sum up, the budget for the federal government has been reduced by 21% and the tax revenue brought in by the government increases by 42% and that could balance the budget. If that doesn’t give you an idea of how far our government has gotten out of whack, my guess is that nothing will.
WHY?
So why am I ranting and raving about this all of a sudden? Because of a proposed constitutional amendment that (according to a CNN poll) slightly less than 75% of Americans want enacted; a balanced budget amendment.
Why do we need it? The answer to that is simple; Congress needs to change their ways and never come back to the way things are being done right now. The only thing I see that can stop them from relapsing is a constitutional amendment.
The automatic cuts as a fallback in case the “Super” Committee couldn’t agree was a good idea… until several prominent lawmakers (principally among them Senator John McCain) said that the cuts are too drastic and, paraphrasing now, since Congress came up with this plan, Congress can amend it or eliminate it. On top of that, we have a candidate for the Republican nomination (Governor Perry again) say that if the automatic cuts hit his desk as president, he would not allow them to go into effect.
Essentially, the situation we have is that one of the more important pieces of economic legislation was passed in August and now, three and a half months later, we have very powerful people saying that we can and should ignore large portions of those laws they helped shape.
We’re all in this together. Republican, Democrat, Independent, Left, Right, Up, Down, Charm, and Strange. We need a group of people to serve in Congress that don’t care about a second term. We need people to make the tough decisions and think of ALL Americans in times like these. We need our lawmakers to stop assigning blame to those who they think are responsible for our circumstances (which comes across as “everyone but me and my friends”) and start working together to find solutions for our problems. We need 537 people pulling on the same end of the same rope because there’s a $14 trillion gorilla on the other end. Instead we have some people on each end of the rope and the gorilla has the middle; dangling it in the air like a puppet master or an amused child.
I believe in America and I believe in her economy. I believe that American workers are the best and smartest in the world.
I don’t believe in our elected officials. If I could speak directly to Congress, my message would be simple;
Restore my faith.
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