MINUS 6%=BALANCE PLUS 5%
What kind of strange equation is THIS? It's really not that strange. This singular formula is a practical, workable guide for coping with recurring Federal budget deficits and the government's horrendous backlog of debt. It states that when the national unemployment rate drops below 6%, the President and Congress MUST balance the budget. Balance must ALSO include an extra 5% over and above the operating budget devoted to reducing the national debt. So this is a flag around which concerned Americans can rally as they try to get government back onto the track toward fiscal responsibility. Will it work? It's GOT to!
As a scarred veteran of 40 years of Washington news reporting and public affairs work, I take my hat off to the Tea Party movement and other concerned citizens for their efforts to return government to those values that created a great nation.
Experience tells me, however, that we face a long, uphill battle—one that will require not only dedication and enduring effort but also the setting of ONE overriding clear-cut goal. In short, let’s not scatter our shots…but, like Alexander the Great confronting a vastly more numerous Persian army, let’s direct our resources and vote-power into an all-out drive straight into the heart of the enemy.
What is this heart? It’s the SPEND/ELECT fever that seems to grip every new President and Member of Congress (MC) coming to Washington. Or, more precisely, it’s the OVERSPEND/BORROW/RE-ELECT fever. For the dominant symptom of this malady is a feverish obsession with staying in office. This leads our elected officials to vote repeatedly for programs government doesn't have the revenues to cover...and to spend untold hours raising campaign funds from lobbyists and special interests and preparing for the next election, raising serious questions about who’s governing whom.
Sadly enough, we-the-people then abet this mockery by playing up to our representatives as though they are royalty. And once in office that’s exactly how they live…on OUR money. Small wonder our public servants are becoming our public masters!
It is said that democracy has built within itself the seeds of its own destruction. Meaning that our elected officials cannot seem to resist the temptation to dole out tax cuts to favored groups while ALSO borrowing vast sums from nations like China to pay for whatever spending scheme might win them votes at the next election. The result: Massive Federal budget deficits—growing by nearly $2 TRILLION a year and now topping $13 TRILLION-- that overhang America like a disaster just waiting to happen.
Consider this an overstatement? Then picture the unbearable increase in Federal outlays for interest charges that will come with a significant rise in interest rates accompanying economic recovery. Or the shock that would come if China decided to jerk the chain we’ve wound around our neck through runaway borrowing from that nation. And you wonder, how could our “leaders” have allowed the horrendous deficits of recent years to pile up, even in boom times? Were these a result of economic ignorance on their part? Or plain old voter-pandering politicking?
THIS is the curse that we-the-voters must put an end to. And the simple equation set forth in the title of this commentary is THE way to do it. What does it mean? Simply that whenever the national unemployment rate drops below 6%, we-the-people DEMAND that our government adopt a balanced budget--which must include an EXTRA 5% over and above the operating budget devoted directly to paying down those horrific deficits.
In short, let’s tell the New Washington Royalty: Cut spending or raise taxes or do whatever it takes to give America a balanced budget now and every year hereafter. And if you fail to deliver, we demand you take a 50% cut in your inflated pay. THAT should get their attention! The main point: Political incentives are now all on the side of spending. So let’s alter this bankrupting system and add counter-incentives with teeth to CUT spending.
Where can government outlays be cut? The President's Commission on the deficits has recommended a long list of deep budget cuts that can be made across the entire Federal structure. These could serve as a veritable blueprint for action by the next Congress. -- IF the people demand our representatives ACT.
What kind of strange equation is THIS? It's really not that strange. This singular formula is a practical, workable guide for coping with recurring Federal budget deficits and the government's horrendous backlog of debt. It states that when the national unemployment rate drops below 6%, the President and Congress MUST balance the budget. Balance must ALSO include an extra 5% over and above the operating budget devoted to reducing the national debt. So this is a flag around which concerned Americans can rally as they try to get government back onto the track toward fiscal responsibility. Will it work? It's GOT to!
As a scarred veteran of 40 years of Washington news reporting and public affairs work, I take my hat off to the Tea Party movement and other concerned citizens for their efforts to return government to those values that created a great nation.
Experience tells me, however, that we face a long, uphill battle—one that will require not only dedication and enduring effort but also the setting of ONE overriding clear-cut goal. In short, let’s not scatter our shots…but, like Alexander the Great confronting a vastly more numerous Persian army, let’s direct our resources and vote-power into an all-out drive straight into the heart of the enemy.
What is this heart? It’s the SPEND/ELECT fever that seems to grip every new President and Member of Congress (MC) coming to Washington. Or, more precisely, it’s the OVERSPEND/BORROW/RE-ELECT fever. For the dominant symptom of this malady is a feverish obsession with staying in office. This leads our elected officials to vote repeatedly for programs government doesn't have the revenues to cover...and to spend untold hours raising campaign funds from lobbyists and special interests and preparing for the next election, raising serious questions about who’s governing whom.
Sadly enough, we-the-people then abet this mockery by playing up to our representatives as though they are royalty. And once in office that’s exactly how they live…on OUR money. Small wonder our public servants are becoming our public masters!
It is said that democracy has built within itself the seeds of its own destruction. Meaning that our elected officials cannot seem to resist the temptation to dole out tax cuts to favored groups while ALSO borrowing vast sums from nations like China to pay for whatever spending scheme might win them votes at the next election. The result: Massive Federal budget deficits—growing by nearly $2 TRILLION a year and now topping $13 TRILLION-- that overhang America like a disaster just waiting to happen.
Consider this an overstatement? Then picture the unbearable increase in Federal outlays for interest charges that will come with a significant rise in interest rates accompanying economic recovery. Or the shock that would come if China decided to jerk the chain we’ve wound around our neck through runaway borrowing from that nation. And you wonder, how could our “leaders” have allowed the horrendous deficits of recent years to pile up, even in boom times? Were these a result of economic ignorance on their part? Or plain old voter-pandering politicking?
THIS is the curse that we-the-voters must put an end to. And the simple equation set forth in the title of this commentary is THE way to do it. What does it mean? Simply that whenever the national unemployment rate drops below 6%, we-the-people DEMAND that our government adopt a balanced budget--which must include an EXTRA 5% over and above the operating budget devoted directly to paying down those horrific deficits.
In short, let’s tell the New Washington Royalty: Cut spending or raise taxes or do whatever it takes to give America a balanced budget now and every year hereafter. And if you fail to deliver, we demand you take a 50% cut in your inflated pay. THAT should get their attention! The main point: Political incentives are now all on the side of spending. So let’s alter this bankrupting system and add counter-incentives with teeth to CUT spending.
Where can government outlays be cut? The President's Commission on the deficits has recommended a long list of deep budget cuts that can be made across the entire Federal structure. These could serve as a veritable blueprint for action by the next Congress. -- IF the people demand our representatives ACT.
^
On a more personal note, every MC and White House official knows where there is government aste…as I myself found out when serving as Director of Public Affairs for Treasury during the Ford Presidency. For example, they can start by making deep reductions in their own bloated salaries, plus those of all Federal employees making more than $100,000 a year. Then, they
could also strike a rare blow for economic justice by distributing the savings to recession-hit state and local governments to help them re-hire laid-off employees (like teachers, social workers, policemen and firemen).
They can also outlaw “earmarks”-- amendments that MCs love to hang onto various bills to fund pet projects back home, and which add billion$ to each annual budget. Earmarks may be the ultimate Capital con game--an underhanded way to bypass normal congressional approval processes and tap the public treasury (OUR money) to show constituents their MCs are “bringing home the bacon”…when, in fact, they’re robbing the rest of the USA to do so.
The truly ultimate disgrace regarding earmarks, however, is that we-the-voters put up with this charade. Let’s STOP it!
A word about my equation: The nation’s unemployment rate right now is hovering around 10%. It’s tough to bring this rate down even when economic activity picks up, since businesses are understandably hesitant about hiring new employees until the economy’s rebound looks assured. When this rate drops below 6%, however, the US will be moving toward full employment, with consumer purchasing power and tax revenues both rising. It’s possible THEN—indeed, imperative—to balance the Federal budget. Let’s INSIST on it!
Increasing each annual operating budget by an extra 5% to begin paying down the national debt is going to be painful for taxpayers and risky for politicians. The reason is that this “harder road to travel” will probably require higher taxes, at least on upper-end incomes (see Post-Note at end of this article).
But what if the President and leaders of Congress proclaimed BALANCED-BUDGETS-PLUS as our national goal? What a fantastic signal this would send around the world! People everywhere would applaud that, finally, America is rejecting years of suicidal self-indulgence and fiscal irresponsibility and “biting the bullet.”
One thinks of those telling lines from Longfellow's "The Village Blacksmith":
His brow is wet with honest sweat.
He earns whatever he can,
And looks the whole world in the face...
For he owes not any man!
Wouldn't it be wonderful if this could be said of America?
At the same time, elected officials who support the crucial changes needed to restore world confidence in America will need all the help that Tea Parties and responsible voters everywhere can give them. Let’s NOT let them down!
Significantly, my Minus 6%=Balance PLUS 5% equation comes close to fulfilling the political scholars’ dream of having government adopt a “cyclical budget.” This holds that government should run a surplus in boom times to dampen inflationary pressures…but allow a deficit during recessions to stimulate the economy–like now. Good idea! BUT it hasn’t worked…so far. The reason is that politicians can’t resist the temptation during boom times to devote ANY surplus to a zillion “worthy” purposes. And so they do….
Does this unique formula have any chance of being adopted by Washington? Well, why not! It's GOT to be better than the present approach. All agree, in any event, that suspension of a balanced budget requirement could be needed in times of a national emergency.
[Some may argue that in fighting international terrorism the United States faces an ongoing national emergency NOW. Which our beleaguered troops in Afghanistan would certainly confirm in spades. Even so, we cannot let terrorist fanatics prevent us from putting our financial house in order; that would give them as near a victory as our physical destruction.]
The lesson in this overview? If this approach had been in place during the years leading up to the current recession, there would have been NO string of record-breaking budget deficits and escalating indebtedness. And who knows: If our political leaders had set a standout example of fiscal integrity and common-sense budgeting in Washington, would the explosion of unrestrained real estate borrowing across the country and irresponsible lending in Wall Street have occurred? Or the banking crisis and the bail-outs? Or the recession?
Are you listening, Washington? We-the-people hope so…for we desperately want you, our political leaders, to do better.
We know you CAN.
And so can we-the-voters…
By James N. Sites
POST-NOTE: Those interested in that most painful aspect of government, TAXES, may want to visit this blogsite for another jolting analysis--this time of basic changes in the US economy that are producing a dangerous new concentration of wealth among the wealthiest...and the need this poses for parallel changes in tax policy. Stay on this blogsite and click on to MEET AMERICA’S NEW GENERATION OF "ECONOMIC ROYALISTS" (my report, updated, of MAY 8, 2010).
They can also outlaw “earmarks”-- amendments that MCs love to hang onto various bills to fund pet projects back home, and which add billion$ to each annual budget. Earmarks may be the ultimate Capital con game--an underhanded way to bypass normal congressional approval processes and tap the public treasury (OUR money) to show constituents their MCs are “bringing home the bacon”…when, in fact, they’re robbing the rest of the USA to do so.
The truly ultimate disgrace regarding earmarks, however, is that we-the-voters put up with this charade. Let’s STOP it!
A word about my equation: The nation’s unemployment rate right now is hovering around 10%. It’s tough to bring this rate down even when economic activity picks up, since businesses are understandably hesitant about hiring new employees until the economy’s rebound looks assured. When this rate drops below 6%, however, the US will be moving toward full employment, with consumer purchasing power and tax revenues both rising. It’s possible THEN—indeed, imperative—to balance the Federal budget. Let’s INSIST on it!
Increasing each annual operating budget by an extra 5% to begin paying down the national debt is going to be painful for taxpayers and risky for politicians. The reason is that this “harder road to travel” will probably require higher taxes, at least on upper-end incomes (see Post-Note at end of this article).
But what if the President and leaders of Congress proclaimed BALANCED-BUDGETS-PLUS as our national goal? What a fantastic signal this would send around the world! People everywhere would applaud that, finally, America is rejecting years of suicidal self-indulgence and fiscal irresponsibility and “biting the bullet.”
One thinks of those telling lines from Longfellow's "The Village Blacksmith":
His brow is wet with honest sweat.
He earns whatever he can,
And looks the whole world in the face...
For he owes not any man!
Wouldn't it be wonderful if this could be said of America?
At the same time, elected officials who support the crucial changes needed to restore world confidence in America will need all the help that Tea Parties and responsible voters everywhere can give them. Let’s NOT let them down!
Significantly, my Minus 6%=Balance PLUS 5% equation comes close to fulfilling the political scholars’ dream of having government adopt a “cyclical budget.” This holds that government should run a surplus in boom times to dampen inflationary pressures…but allow a deficit during recessions to stimulate the economy–like now. Good idea! BUT it hasn’t worked…so far. The reason is that politicians can’t resist the temptation during boom times to devote ANY surplus to a zillion “worthy” purposes. And so they do….
Does this unique formula have any chance of being adopted by Washington? Well, why not! It's GOT to be better than the present approach. All agree, in any event, that suspension of a balanced budget requirement could be needed in times of a national emergency.
[Some may argue that in fighting international terrorism the United States faces an ongoing national emergency NOW. Which our beleaguered troops in Afghanistan would certainly confirm in spades. Even so, we cannot let terrorist fanatics prevent us from putting our financial house in order; that would give them as near a victory as our physical destruction.]
The lesson in this overview? If this approach had been in place during the years leading up to the current recession, there would have been NO string of record-breaking budget deficits and escalating indebtedness. And who knows: If our political leaders had set a standout example of fiscal integrity and common-sense budgeting in Washington, would the explosion of unrestrained real estate borrowing across the country and irresponsible lending in Wall Street have occurred? Or the banking crisis and the bail-outs? Or the recession?
Are you listening, Washington? We-the-people hope so…for we desperately want you, our political leaders, to do better.
We know you CAN.
And so can we-the-voters…
By James N. Sites
POST-NOTE: Those interested in that most painful aspect of government, TAXES, may want to visit this blogsite for another jolting analysis--this time of basic changes in the US economy that are producing a dangerous new concentration of wealth among the wealthiest...and the need this poses for parallel changes in tax policy. Stay on this blogsite and click on to MEET AMERICA’S NEW GENERATION OF "ECONOMIC ROYALISTS" (my report, updated, of MAY 8, 2010).
