Last week the United States government almost shut down because our elected officials could not seem to drag themselves out of kindergarten and compromise on a budget. This week we have Obama speaking about his ideas of how our country needs to reduce its deficit, not even its debt, and make some fundamental changes in taxes and welfare systems. Oh, and yes, more budget issues. There is no perfect solution to this issue, mainly because it has been building for so many years that to try and tackle it in just a few is not feasible. Simply cutting spending, or instituting austerity measures as they like to call it, have proven not to entirely work. England tried this last year and just last month suffered a 3.5% decline in retail sales, the worst in 15 years. Keep in mind that they tax their wealthiest citizens almost 50%, something that would probably never happen in the U.S. although Obama wants to increase the tax on the wealthy. The problem now is how do you balance spending and cutting in the midst of trying to recover from an economic recession. To be honest, I don't have the answer. But a good start would be our elected officials in Washington actually having bi-partisan discussions about the best solution, putting their entrenched ideologies aside temporarily, and actually listening to each other's ideas. Here are some tentative compromises that might be made if people actually talked.
Obama was incredibly vague in his speech this week. He mentioned what he wanted to do, cut 4 trillion in the national deficit in 12 years. Now keep in mind, the deficit is vastly different from our national debt. Our deficit is simply the difference in the amount of money our government makes via taxes and other sources versus the amount it spends every year. Our government has spent more than it makes every year for God knows how long and Obama wants to slightly reduce this over the next 12 years. If any household did this on the scale that our government does, they would lose their house and cars and have to file for bankruptcy. The average family can't just go to the wealthy family down the street and say, "Hey buddy, I'm spending more than I make every year, want to help me out and give me a loan?" That other person would laugh in his face, especially if the potential borrower said, "Oh, and I plan on keeping on spending more than I make for quite some time, so just keep the money coming." It is ludicrous, yet this is exactly what our government is doing. Unfortunately at this point, with so many people depending on government jobs and money, to drastically cut our spending would greatly endanger our fragile economic recovery and potentially send us into another recession. However, for us to spend more money to try and stimulate more recovery would affect our debt even more and potentially cause our financiers, mostly China, to come knocking and tell us to pay up on our debt in which case we would be royally screwed.
Hence, no easy solution. There are some areas that we could start to look at however that might make a difference. First lets look at the corporations that send work abroad, wherever it might be, and increase the taxes on them. They send the work out so they can increase their revenue and put more money in the pockets of those running the corporations. If we increase the taxes on them with the stipulation that they will go down if the work returns to our country, we might actually see jobs increase in this country. Conversely, for those corporations/companies that keep work in our country, we might actually want to offer some tax cuts for them with the stipulation that any extra money must be re-invested into their company either towards R&D or job growth. Next, lets look at the size of our military. I have mentioned this before, but it needs to be mentioned again, our military is too damn big and the spending that goes into the military is utterly ridiculous. Does some of that money create jobs here, yes, but to spend over $500 billion every year is outrageous. Obama in his speech asked the Pentagon to find areas to cut. Do you actually think they are going to look that hard on ways to cut spending when asked politely? I don't. They might get rid of a few offices here and there and stop ordering expensive chairs for their top commanders, but I don't see it gong far beyond that. Part of the problem is the military-industrial complex. I will not go into it in depth here, but in essence, it is a vicious circle that increases spending due to expensive programs for fighter jets, new military technology, etc. and the lobbyists who push these ideas and get them passed through congress. If we took some of the military's money and re-invested it in our own country, we might start to see a difference. And, oh yeah, we need to reduce the size of our government as well.
As I mentioned before, our budget, debt, and deficit problems have no easy solution. The problems have been cemented into our society and our way of life for so long that it will be admittedly painful to change things. Unfortunately, if we can not figure out a solution thats workable, we are all in trouble. It took our government almost 6 months to pass a budget for our current year which we are almost 4 months through. If this happened at a corporation, those in charge of passing a budget would be fired. We should be outraged that we have such ineptitude lurking in D.C. The unfortunate part is, we put them there and now must live with them. To me, there really is no difference between the Republicans and Democrats, they are both blood sucking leeches. We get them into D.C. and their public image is drastically different, but behind closed doors they probably sit down to figure out ways to screw us even more. Maybe if they listened to their consituents, which some of them might, and work for us, which few of them do, we might actually get somewhere. In any case, we are on the cusp of the almighty weekend where we might be able to forget about some of these problems for a few days and actually enjoy ourselves. So lets all get through this day, send some stinging letters to our representatives informing them of how displeased we are with their inability to work, and then sit down with a beer or two and watch the sun go down over another lost week of budget reform and foward movement in our government. Maybe next week will be different, we can only hope.
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