Sunday, November 14, 2010

Cutting the Deficit

So many times, we are told that tax increases are the only responsible way to reduce the deficit, never cutting because it is too difficult. And to show how hard it is, the New York Times has included a handy calculator so that you can test your plan. I tried my hand at it and came up with this version.
But they didn't have a lot of choices that I wanted to do. First, end all subsidies. No business subsidies, sugar, peanut, ethanol, solar power, anything. The government should not be helping anything, because as soon as it does it distorts the market, and it's usually distorted in the direction that the lobbyists wanted, not in the direction that is good for everyone. I know a lot of people will be screaming that the "Green Revolution" can't happen without subsidies, and they are probably right. Which is just my point. If it makes sense economically, the government doesn't need to help. If it doesn't make sense, then we shouldn't be doing it.
I would also eliminate the Depts. of Energy and Education. So far, their track record from before their existence to now shows that they have failed in improving the situation. In the business world, these are defunct and defective organizations. Spin them off and sell them off to private investors. I would also direct the Dept. of Agriculture to look at selling public lands. It is true that Montana takes in more federal dollars than it pays out, but that is partly because the feds own so darned much of us. Take and sell it and you have the immediate effect of cash plus the long term benefit of not having to maintain the property. It would also open up land for private development which raises income which can be taxed.
Now for the fun part, the military. I know my friends in Great Falls might object, but we need to get rid of the land based missiles. Their cost versus their probability of use cannot be justified. The B-2 at least has a dual use capability, and if we kept about a third of the Trident class, we would still have enough to remain a credible deterrent without as much costs. We also need to address the major challenges to our interests are going to be terrorists and the Chinese. The terrorists are going to continue their low level of conflict, much like a bad infection, and it will require light and flexible forces that can go anywhere and fight anywhere. Probably 8 divisions of light or medium weight (Stryker units) divisions, and four heavy.
The Chinese on the other hand are a much more conventional force and would require higher levels of what we used to call "heavy" formations of armor and artillery. But we couldn't take China on right now in any event. Their Hundred Million Army is too much to engage directly, and luckily, they are a predominantly continental based force, so the greatest threats are going to be Viet Nam and Siberia.
There is the possibility of a sea borne invasion of Taiwan, or even possibly Japan. for that reason we should have four carrier groups. We only need to control the seas of one ocean at a time, not the current seven, and of that force you need one on station, one going to station and one returning, with one more as a backup.
The Air Force should be cut back to enough F-22 and F-35 wings to create air dominance in one theater, and sufficient heavy lift aircraft to move a light division in seven days. The need for future fighters has to be set aside until we get the budget under control.
Overseas bases should not be eliminated. Everyone of those was paid for in American blood, and it would be too expensive to have to reclaim them if we needed them again in the future. Their staffing should be reduced to enough for caretaker status only. But we cannot give up access to bases in Germany because they are a quarter of the world closer to anywhere East than the CONUS units are. Same with Okinawa.

Well, these are just a few ideas for cuts. I would also redo the tax code by making it a flat tax and exempt income under $30,000. The many loopholes and exemptions are just rife with the possibility of corruption. And I think I will put the rest of that idea in another post.

1 comment:

Aaron Goldberg said...

What you are not considering in your calculations for reducing government spending is that spending reductions are merely a Band-Aid applied to a cancerous tumor. What needs to be done is a drastic and permanent reduction in government itself. Whole areas of government need to be cut out and discarded, so that they can never return and grow once the economy recovers and tax revenues begin to increase again.

Unfortunately, the government tumor is so deeply intertwined with our economy that the necessary radical surgery will takes years to recover from. For example, a permanent reduction in the armed forces would result in higher unemployment at first. A reduction in military spending on weapon systems would result in even more unemployment.

This is why the largest part of the stimulus money went to maintaining useless local, state, and federal employees. Firing them all, which is what should have been done, would have caused an even deeper recession. But, again, the economy would have been much better off in the long run.