As part of the discussion about how to handle the financial mess we are in, I hereby throw my two cents in.
First in deference to Cato and his recent post I use the word “federal” in this post to mean the government of the United States. I recognize his point that it is not “federal” but for the moment that is what people call it.
Cut federal spending across the board by 1% per year. I would hope that Congress could eliminate ridiculous programs to do this, but the reality is that between special interest groups and the sacred cows that our legislators are feeding, this becomes a political free for all. Cut federal spending across the board–every department–by 1% per year.
Does anybody know of an organization that cannot cut 1% from it’s spending? We can do this without diminishing the programs that are being funded. Some believe that waste accounts for 8% of all government spending. Some say more, some say less. We should all be able to agree that there is waste and fraud in government spending. Let’s cut from there.
What about Social Security, Medicare, Medicaid, unemployment and all of the social programs? Let’s cut from the waste and fraud, not from the programs themselves.
Some in government would say “but cutting the waste is hard”. Baloney! Get to work. Do your job. “Mr. President, I don’t know how to cut waste in my department”. “You’re fired”.
With population growth that gives us a 2% spending shift–if our current spending was on a flat line–which we all know it is not. The spending shift this would cause is greater.
With this kind of discipline plus a 2% shift per year we would gain confidence. More people would be hired, retirement funds would prosper. Homes would be built, cars would be bought. Taxable income would increase. More money would come into the treasury. The economy would grow.
We could get ourselves out of this mess over a relatively short period of time.
Don’t touch anything else right now. Yes we need to get the employee’s portion of the Social Security “contribution” (popularly known as the payroll tax) back to where it used to be. Not now. Maybe we need to do something about deductions and capital gains. Not now. Don’t get in the way. Let the economy grow. It wants to. Growth is the easy way out of this mess.
Try this for a couple of years. If it does not work, try something else. In the mean-time Congress should learn how to play gin rummy or something less destructive to our futures.
There are similar plans to this being considered. Let your U.S. Representative and Senators know what you think.
We are in a mess.
We deserve better!
elpasospeak 
Would that be cut 1% from existing spending levels or from the built in increases in the baseline budget? I suggest looking at the following website: http://freedomandprosperity.org/
Browse through the videos that are on this site and you will see how things could be for the better if we just stopped the political madness in favor of sensible fiscal stewardship!
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I found four pennies laying on the ground next to a gas pump this morning. Picked ’em up. It was literally “found money” that someone else was too lazy to pick up. It must have been a government employee who dropped them. A penny saved is a penny earned.
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